Spandana Sphoorty Financial Limited · NSE:SPANDANA
Spandana Sphoorty Financial — Q2 FY25 Earnings Presentation
28 slides from Spandana Sphoorty Financial's earnings presentation, Oct 28, 2024
Slide 1: Stock exchange cover letter for investor presentation
Ref: SSFL/Stock Exchange/2024-25/106 October 28, 2024 To To BSE Limited, National Stock Exchange of India Limited, Department of Corporate Services Listing Department P. J. Towers, 25th Floor, Exchange Plaza, C-1, Block G Dalal Street, Bandra Kurla Complex, Bandra (E) Mumbai – 400001 Mumbai – 400051
Slide 2: Q2 FY25 Investor Presentation
Invested in Bharat! Spandana Sphoorty Financial Limited Gond Art Q2 FY25 Investor Presentation
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Spandana Sphoorty Financial Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe f
Slide 4: Industry landscape has changed over the past 2 years
Industry landscape has changed over the past 2 years What has changed? • Number of lender relationships has increased at borrower level • Graduation of borrowers with higher vintage to non-MFI loans • Dilution of JLG model post Covid • Increase in employee attrition (recent phenomenon) Industry Outr
Slide 5: Multiple factors impacting Industry currently
Multiple factors impacting Industry currently Industry wide attrition*, especially among Loan Officers (~64%) and Branch managers (~31%), continues to Attrition remain high. Post disruptions caused by heat wave and elections in Q1FY25, borrowers’ livelihoods were impacted by heavy Climatic Factors r
Slide 6: Challenges continue to impact Spandana's operations
Challenges continue to impact Spandana’s operations BAU expected by end of FY25 Internal Challenges Major initiatives taken to address challenges • Emphasis on softer aspects like rewards & recognition, team building Prioritizing • Employee connect through multiple channels of communication and meet
Slide 7: Conservative stance in ticket size, indebtedness and tenure
Conservative stance in ticket size, indebtedness and tenure being focused by Spandana Borrowers have availed multiple other loans post disbursement by Spandana Average borrower indebtedness & loan tenure with Spandana A B C 36,044 35,805 (in %) At the time of disbursement * Latest data ^ 34,842 Only
Slide 8: Q2FY25 & H1FY25 Results
Q2FY25 & H1FY25 Results 7
Slide 9: YoY AUM up 8%; Income for Q2FY25 up 10% & NII up 9%
YoY AUM up 8%; Income for Q2FY25 up 10% & NII up 9% Q2 FY25 Q2 FY24 YoY (%) Q1 FY25 QoQ (%) H1FY25 H1FY24 YoY (%) Disbursement (₹ Cr) 1,514 2,512 (40)% 2,283 (34)% 3,798 4,176 (9)% AUM (₹ Cr) 10,537 9,784 8% 11,723 (10)% 10,537 9,784 8% Funds raised (₹ Cr) 1,584 3,191 (50)% 1,554 2% 3,138 4,734 (34)
Slide 10: 22% YoY growth in customer base
22% YoY growth in customer base Customer addition moderated to focus on improving asset quality No. of customers (in L) Branch count 2,000 33.2 34.1 33.0 1,642 1,665 1,723 1,800 29.6 1,457 1,529 1,600 27.0 429 434 442 375 1,400 323 1,200 1,000 800 1,134 1,154 1,213 1,231 1,281 600 400 200 0 Sep-23 D
Slide 11: Weekly branches account for ~22% of Q2FY25 disbursement
Weekly branches account for ~22% of Q2FY25 disbursement Weekly branch Weekly Branch count Disbursement share (%) 429 434 442 24% 375 21% 22% 323 16% 7% Q2 Q3 Q4 Q1 Q2 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 FY24 FY24 FY24 FY25 FY25 Weekly branches Weekly branches AUM (₹ Cr) Net Collection Efficiency (%)
Slide 12: AUM at ₹10,537 Cr, ~8% YoY growth
AUM at ₹10,537 Cr, ~8% YoY growth Top 4 States contribute ~50% of AUM vs. 57% in March 2022 AUM (₹ Cr) +8% YoY Disbursement (₹ Cr) +8% QoQ YoY YoY (34)% (40)% (9)% 4,176 11,973 3,798 11,723 10,404 10,537 2,512 9,784 2,283 1,514 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Q1FY25 Q2FY25 Q2FY24 H1FY25 H1FY24 AU
Slide 13: Borrowings from banks at 54% vs. 49% YoY
Borrowings from banks at 54% vs. 49% YoY Diversified borrowings and active funds management have positive impact on borrowing cost Incremental borrowing (in ₹ Cr) Cost of borrowing 12.5% 12.3% QoQ YoY YoY 12.0% 11.7% 11.7% 11.8% 11.8% 11.6% 2% (50)% (34)% 11.4% 10.8% 4,734 Q2 Q3 Q4 Q1 Q2 FY24 FY24 F
Slide 14: PCR maintained at 80%
PCR maintained at 80% 30-Sep-24 30-Jun-24 Asset Classification Loans ECL Loans ECL % of Loans % of Loans Outstanding Provision Coverage Outstanding Provision Coverage Outstanding Outstanding (₹ Cr) (₹ Cr) (₹ Cr) (₹ Cr) Stage 1 8,730 88.98% 78 0.89% 10,611 94.25% 90 0.85% Stage 2 604 6.16% 281 46.45%
Slide 15: Q2FY25 YoY Income up 10%, NII up by 9%
Q2FY25 YoY Income up 10%, NII up by 9% Income* Net Interest Income In ₹ Cr QoQ YoY YoY QoQ YoY YoY (4)% +10% +24% (20)% +9% +27% 1,444 766 1,168 602 737 707 425 640 341 312 Q1 Q2 Q2 H1 H1 Q1 Q2 Q2 H1 H1 FY25 FY25 FY24 FY25 FY24 FY25 FY25 FY24 FY25 FY24 PPOP* PAT* QoQ YoY YoY QoQ YoY YoY (21)% (12)%
Slide 16: Q2FY25 Yield at 22.4%; Opex-to-AUM at 7.8%
Q2FY25 Yield at 22.4%; Opex-to-AUM at 7.8% Cost of borrowing at 11.8% in Q2FY25 Yield (%) Cost of Borrowing^ (%) QoQ YoY YoY QoQ YoY YoY (197) bps (202) bps (70) bps 16 bps (77) bps (76) bps 24.4% 24.5% 24.2% 12.5% 23.5% 12.5% 11.7% 22.4% 11.8% 11.6% Q1 Q2 Q2 H1 H1 Q1 Q2 Q2 H1 H1 FY25 FY25 FY24 FY25
Slide 17: Elevated Cost-to-income due to higher bench & lower income
Elevated Cost-to-income due to higher bench & lower income Drag on profitability due to high impairment costs Cost-to-income^ (%) ROE (%) QoQ YoY YoY QoQ YoY YoY 1,412 bps 1,226 bps 423 bps (2,974) bps (3,872) bps (2,390) bps 54.1% 15.1% 15.1% 46.4% 6.1% 42.2% 39.9% 41.8% -8.8% -23.7% Q1 Q2 Q2 H1 H1
Slide 18: Consolidated Net-worth of ₹3,507 Cr, CRAR at 35.8%
Consolidated Net-worth of ₹3,507 Cr, CRAR at 35.8% Gearing at 2.2x (consolidated) SSFL Standalone Net-worth & CRAR 37.0% 4000 2.7 3,707 35.9% 35.7% 3,645 3,497 3,507 2.6 5000 32.0% 32.7% 35.00% 3500 3,360 2.6 30.00% 2.5 3,614 4000 3000 3,414 3,556 3,426 3,286 25.00% 2.4 3000 2500 2.4 20.00% 2.3 2.3
Slide 19: Consolidated Income Statement
Consolidated Income Statement Particulars (₹ Cr) Q2 FY25 Q1 FY25 Q2 FY24 QoQ YoY H1FY25 H1FY24 YoY Revenue from Operations Interest income on loans 599 685 540 (12)% 11% 1,284 1,029 25% Net gain on fair value changes 75 13 60 457% 25% 88 73 21% Other Income 12 12 11 5% 17% 24 20 23% Total income fro
Slide 20: Consolidated Balance Sheet
Consolidated Balance Sheet ASSETS (₹ Cr) Sep 30, 2024 Mar 31, 2024 LIABILITIES & EQUITY (₹ Cr) Sep 30, 2024 Mar 31, 2024 Financial Liabilities Financial Assets Debt Securities 3,379 4,064 Cash and bank balances 1,830 1,894 Borrowings (Other than Debt Securities) 4,470 5,340 Loan Portfolio 9,134 11,0
Slide 21: Credit Rating
Credit Rating Spandana Sphoorty Financial Ltd Rating / Outlook Rating / Outlook Rating Agency Rating Instrument Change (Current) (30-Jun-24) ICRA Bank Facilities / NCD’s A+ / Stable A / Positive Upgrade India Ratings Bank Facilities / NCD’s A+ / Stable A+ / Stable No Change Bank Facilities / NCD’s A
Slide 22: Annexure
Annexure 21
Slide 23: Positive ALM across maturity buckets
Positive ALM across maturity buckets Positive ALM (₹ Cr)* Maturity profile* (in months) 3,426 11.7 11.8 2,897 2,611 9.2 8.6 2,358 2,003 1,941 1,808 1,364 804 671 666 411 459 294 97 53 upto 1m 1m to 2m 2m to 3m 3m to 6m 6m to 12m 1Y to 3Y 3Y to 5Y Over 5Y Sep-24 Jun-24 Assets Liabilites Avg. residual
Slide 24: Well diversified presence
Well diversified presence AUM concentration* - ~49% from top 4 States District level concentration* % of AUM Largest 1.6% State Sep-24 Mar-24 Mar-23 Top 5 7.6% Odisha 13% 14% 15% 0% Madhya Pradesh 13% 13% 17% Top 10 13.1% 0% Bihar 12% 12% 8% 0% Karnataka 10% 10% 11% Top 20 21.6% 4% 6% Andhra Pradesh
Slide 25: Metrics over the years
Metrics over the years AUM (₹ Cr) Disbursement (₹ Cr) GNPA (%) & NNPA (%) 10,688 18.7% 11,973 8,004 8,125 8,157 8,511 6,829 6,426 6,581 10.5% 3,373 3.1% 2.1% 1.4% 1.5% 0.4%0.1% 0.6% 0.3% FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 GNPA (%) NNPA (%) Net Interest Income
Slide 26: Accelerated growth delivered over last year
Accelerated growth delivered over last year Customers (in L) Employees Customers / Branch & LO * 33.2 14,243 2,541 3000 850 2,324 750 25.7 24.5 2500 2,097 1,914 2,021 23.5 22.6^ 10,016 2000 650 550 8,224 8,644 8,763 590 450 1500 350 432 382 343 344 1000 250 150 500 50 0 -50 FY20 FY21 FY22 FY23 FY24
Slide 27: Glossary
Glossary Key Ratio Abbreviation Definition 1 Portfolio Yield Yield Interest income divided by average monthly loan outstanding 2 Cost of borrowing COB Interest expenses divided by average monthly borrowing outstanding 3 Marginal COB (XIRR) Multiplication of borrowing availed during the period and co
Slide 28: Thank you!
Thank you! Investor Relations Spandana Sphoorty Financial Ltd Investor.relations@spandanasphoorty.com Spandana Sphoorty Financial Limited Strategic Growth Advisors Pvt. Ltd Abhishek Shah +91 99306 51660
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