Arman Financial Services Limited · NSE:ARMANFIN
Arman Financial Services — Q1 FY20 Earnings Presentation
42 slides from Arman Financial Services's earnings presentation, Sep 17, 2019
Slide 1: Arman Financial Services Limited
4WN Arman Financial Services Limited 501-504, SAKAR III, OPP. OLD HIGH COURT, OFF. ASHRAM ROAD, AHMEDABAD-380 014. GUJARAT, INDIA PH. :+91-79-40507000,27541989 FAX : +91-79- 27543666 e-mail finance@armaniridia.com Website : www.armanindia.com Date: September 17, 2019 To, To, BSE Limited National Sto
Slide 2: Investor Presentation FY19
INVESTOR PRESENTATION FY19 Arman Financial Services Ltd. Investor Presentation 2019
Slide 3: Disclaimer
DISCLAIMER Certain statements in this document that are not historical facts are forward looking statements. Such forward- looking statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors
Slide 4: Contents
CONTENTS 04 Performance Update – Q1 FY20 15 Liability Overview 18 Company Overview 26 Product Overview 30 Annexures
Slide 5: Financial Performance Update - Q1 FY20
Financial Performance Update - Q1 FY20
Slide 6: Q1 FY20 – Financial Performance Highlights
Q1 FY20 – Financial Performance Highlights Total AUM increased by 57% to INR 7,225 Mn (Q1 FY19 AUM: INR 4,603 Mn) Total Disbursements Increased by 24% to INR 1,915 Mn (Q1 FY19: INR 1,548 Mn) Gross Total Income increased by 69% to INR 482.0 Mn (Q1 FY19: INR 285.2 Mn) Net Total Income increase
Slide 7: Q1 FY20 – Consolidated Profit & Loss Statement
Q1 FY20 – Consolidated Profit & Loss Statement As per IND-AS As per I-GAAP Particulars (INR Mn) Q1 FY20 Q1 FY19 YoY (%) Particulars (INR Mn) Q1 FY20 Q1 FY19 YoY (%) Asset Under Management 7,225 4,603 57% Asset Under Management 7,225 4,603 57% Disbursements 1,915 1,548 24% Disbursements 1,915 1,548 2
Slide 8: Q1 FY20 – Microfinance “Namra” Performance Update
Q1 FY20 – Microfinance “Namra” Performance Update As per IND-AS Particulars (INR Mn) Q1 FY20 Q1 FY19 YoY (%) Asset Under Management 5,137 3,163 62% • Witnessed strong traction in AUM backed by increase in customer base Disbursement 1,395 1,161 20% and average ticket size Interest income 315.9 195.7
Slide 9: Microfinance Performance Update – Reconciliation to IND-AS
Q1 FY20 – Microfinance Performance Update – Reconciliation to IND-AS Particulars (INR Mn) Q1 FY20 (IND-AS) Q1 FY20 (I-GAAP) Chg (%) Particulars (INR Mn) Q1 FY19 (IND-AS) Q1 FY19 (I-GAAP) Chg (%) Gross Total Income 324.2 321.5 0.8% Gross Total Income 198.6 200.0 -0.7% Finance Costs 139.3 144.1 -3.3%
Slide 10: Q1 FY20 - Microfinance Performance Update
Q1 FY20 - Microfinance Performance Update AUM (INR Mn) Disbursement (INR Mn) Gross Total Income (INR Mn) 5,137 1,657 4,852 324 1,535 1,543 4,064 1,395 267 255 3,580 1,161 3,163 220 199 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1
Slide 11: Q1 FY20 – Microfinance Performance Update
Q1 FY20 – Microfinance Performance Update Yields % and NIM % Cost-to-Income Ratio % 26.1% 26.7% 25.9% 25.1% 24.0% 50.0% 50.7% 45.1% 46.2% 40.7% 14.3% 14.9% 14.8% 13.2% 13.0% Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Yields % NIM % Cost / Income (%) Asset Quality
Slide 12: Q1 FY20 – Standalone Performance Update (2W & MSME)
Q1 FY20 – Standalone Performance Update (2W & MSME) As per IND-AS Particulars (INR Mn) Q1 FY20 Q1 FY19 YoY (%) Asset Under Management 2,088 1,441 45% • Witnessed strong traction in the MSME business segment Disbursement 519 387 34% • No. of loans disbursed increased by 87.0% YoY to Interest income 1
Slide 13: Standalone Performance Update – Reconciliation to IND-AS
Q1 FY20 – Standalone Performance Update – Reconciliation to IND-AS Particulars (INR Mn) Q1 FY20 (IND-AS) Q1 FY20 (I-GAAP) Chg (%) Particulars (INR Mn) Q1 FY19 (IND-AS) Q1 FY19 (I-GAAP) Chg (%) Gross Total Income 161.7 159.1 1.6% Gross Total Income 95.1 91.5 3.9% Finance Costs 48.7 58.6 -16.9% Financ
Slide 14: Q1 FY20 - MSME Performance Update
Q1 FY20 - MSME Performance Update AUM (INR Mn) Disbursements (INR Mn) Gross Interest Income (INR Mn) 1,100 319 92 992 299 78 251 778 222 64 645 56 548 171 38 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Asset Quality Yields %
Slide 15: Q1 FY20 - 2W Performance Update
Q1 FY20 - 2W Performance Update AUM (INR Mn) Disbursement (INR Mn) Gross Interest Income (INR Mn) 1,018 1,017 64 64 335 60 988 53 55 966 248 242 216 220 892 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Asset Quality Yields %
Slide 16: Liability Overview
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Slide 17: Efficient Liability Management
Efficient Liability Management Funding profile is well diversified with increasing share of NCDs, NABARD refinance & securitization Q4 FY19 - Borrowing Mix % Q1 FY20 - Borrowing Mix % • Well-diversified borrowing mix with increasing share of NCD’s, NABARD Refinance and Securitization 12% 10% • Share
Slide 18: Lending partners
Lending partners Bank Borrowings Non-Bank Borrowings Securitization Partners 22 17
Slide 19: Company Overview
Company Overview
Slide 20: Key Strengths
Key Strengths Genesis Robust Risk Management Framework Arman Financial Services (“Arman”) is a diversified NBFC Superior Asset Quality – GNPA: 1.1%; NNPA: 0.6% (Q1 FY20) focusing on large under-served rural & semi-urban retail markets Consistent rating upgrades backed by strong financial & ope
Slide 21: Business Progression
Business Progression Company Raised PE Expanded to Crosses 100 Disbursement incorporated. funding from Maharashtra, branches across 5 crosses 750 Cr; Started bill Launched 2W Incofin; MP, UP & states & 3 products; 100% Cashless discounting & Loans Disbursement Uttarakhand; Disbursement disbursements
Slide 22: Product Snapshot
Product Snapshot • 27 years of existence • Active customer base of 3.66 lakh • Employee strength of 1,526 employees • Completely in-house operations – Sourcing, Credit & Collections Microfinance MSME Loans 2-Wheeler Loans Rural 2W Loans % of Total AUM 71% 14% 14% 1% (in Pilot Stage) LTV Unsecured Ca
Slide 23: Differentiated Operations
Differentiated Operations Focus on small-ticket retail loans to the large under-served informal segment customer in rural & semi-urban geographies Diversifying products, geographies, sources of funds and delivering growth by increase in volumes rather than ticket sizes KEY STRATEGIC DIFFERENTIATORS
Slide 24: Strong Growth in AUM & Disbursements
Strong Growth in AUM & Disbursements….. 8000 Total AUM (INR Mn) 80 00 • Diversified portfolio of 7,255 Mn in Q1 FY20 split between – 6,847 50% 7000 70 00 • Microfinance: INR 5,137 Mn (71%), 14% 115%# • 2-Wheeler Loans: INR 988 Mn (14%) 6000 60 00 4,532 15% 17% • MSME Loans: INR 1,100 Mn (15%) 5000 5
Slide 25: While Maintaining Superior Cost Efficiency & Asset Quality
…..While Maintaining Superior Cost Efficiency & Asset Quality Gross Income and Net Total Income (INR Mn) Yield % and NIM % Focus on risk have led to immaculateDemonetization through-cycle asset quality CAGR: 42% CAGR: 38% 2.6% 1,411 2.0% Demonetization 28.8% 28.7% 28.3% 25.5% 25.6% 1.6% 782 1.1% 780
Slide 26: Shareholding Pattern
Shareholding Pattern SHAREHOLDING - 30TH JUNE 2019 * Fully Diluted (Post Conversion of CCD’s) Promoters, 31.3% Public, 47.3% SAIF Partners, 21.4% Source – Company *SAIF Partners invested INR 500 Mn in CCDs in April 2018 which will convert in October 2019. Post conversion of CCD’s, SAIF Partners st
Slide 27: Product Overview
Product Overview
Slide 28: Product Overview: Microfinance
Product Overview: Microfinance Product Overview FY19 – Key Metrics (Mn) JLG model with small ticket loans (Avg. Ticket Size – INR 4,840 5,896 26,000) given to women borrowers for income generating activities such as Livestock, Dairy, Agri allied, Kirana Stores AUM (INR Mn) Disbursement (INR Mn)
Slide 29: Product Overview: 2W & Rural 2W Loans
Product Overview: 2W & Rural 2W Loans Product Overview FY19 – Key Metrics (Mn) Hypothecation (secured) loans given to self-employed / cash- 1,017 1,041 salaried customer in the informal segment in semi-urban / rural areas for a 2W AUM (INR Mn) Disbursement (INR Mn) Currently operates only in Guj
Slide 30: Product Overview: MSME Loans
Product Overview: MSME Loans Product Overview MSME Process Overview Individual enterprise / working capital loans for small rural businesses in low competition areas • In-house sourcing team (No DSAs) Currently operates across 2 states – Gujarat (86%) & MP (14%); 25 branches • Feet-on-Street sal
Slide 31: Contact
Vivek Modi Group – CFO Mandar Kapse / Chintan Mehta Arman Financial Services Ltd Dickenson World Tel : + 91 79 4050 7000 (Extn. 210) Tel : + 91 9867550004 / +91 9892183389 Email : vivek@armanindia.com Email : armanfinancial@dickensonworld.com
Slide 32: Annexures
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Slide 33: Microfinance: 5-Year Performance
Microfinance: 5-Year Performance Disbursement growth is driven by customer & branch addition AUM growth exceeds MFI industry growth rates 2.5 Demonetization 2.24 70 00 4,837 60 00 2.0 1.70 50 00 1.5 1.33 3,170 40 00 0.80 Demonetization 1.0 0.62 0.74 5,896 30 00 4,001 20 00 0.5 1,206 1,239 2,080 1,58
Slide 34: Microfinance: 5-Year Performance
Microfinance: 5-Year Performance Well diversified across geographies Maintaining high operational efficiency MFI AUM Mix (%) Demonetization 1% 1% 6% 2% 8% 56% 57% 18% 5% 20% 21% 53% 17% 48% 13% 21% 40% 39% 21% 100% 92% 27% 82% 72% 44% 31% FY14 FY15 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19 C
Slide 35: 2W Loans: 5-Year Performance
2W Loans: 5-Year Performance Yields (%) & NIM (%) Trend Arman 2W AUM/ has seen steady growth over FY14-19 12 00.0 10 00.0 35 .0% 32.1% 30.4% 80 0.0 30 .0% 25.7% 24.9% 24.3% 25 .0% 60 0.0 20 .0% 1,017 900 20.4% 19.6% 40 0.0 738 18.4% 15 .0% 10 .0% 14.8% 493 555 12.2% 20 0.0 457 5.0 % 0.0 % 0.0 FY15 F
Slide 36: MSME Loans: 3-Year Performance
MSME Loans: 3-Year Performance Disbursement Growth AUM Growth 16,284 12 00 CAGR: 83% CAGR: 115% 992 15 000 10 00 12 000 9,756 80 0 90 00 60 0 461 60 00 962 40 0 30 00 1,054 527 20 0 61 0 64 0 FY17 FY18 FY19 FY17 FY18 FY19 Arman MSME disbursement (INR Mn) # of MSME cases disb. AUM (INR Mn) Total Inco
Slide 37: P&L Statement – Consolidated
P&L Statement – Consolidated Particulars (INR Mn) FY15 FY16 FY17 FY18 FY19 YoY (%) Revenue from Operations 296 407 536 780 1,405 80% Interest income 284 381 497 713 1,313 84% Other interest income 0 8 22 9 16 78% Income From Securitization 0 0 0 0 6 Interest income from Managed Assets 0 0 0 17 7 -59
Slide 38: Balance Sheet – Consolidated
Balance Sheet – Consolidated Equity & Liabilities FY15 FY16 FY17 FY18 FY19 Share Capital 69 119 119 69 70 Reserves & Surplus 323 385 441 500 723 Shareholder's Funds 392 505 560 569 792 Long Term Borrowings 223 458 482 2,221 2,534 Long Term Provisions 2 3 3 7 16 Non-Current Liabilities 225 461 484 2,
Slide 39: P&L Statement – Standalone
P&L Statement – Standalone Particulars (INR Mn) FY15 FY16 FY17 FY18 FY19 YoY (%) Revenue from Operations 152 159 166 273 469 72% Interest income 152 159 165 272 463 70% Income From Securitization 0 0 0 0 2 Other charges in respect of loans 1 0 1 1 4 300% Other Income 0 0 0 0 1 Total Revenue 153 159
Slide 40: Balance Sheet – Standalone
Balance Sheet – Standalone Equity & Liabilities FY15 FY16 FY17 FY18 FY19 Share Capital 69 69 69 69 70 Reserves & Surplus 274 287 313 333 406 Shareholder's Funds 343 357 382 402 476 Long Term Borrowings 74 16 0 283 676 Long Term Provisions 1 1 1 3 6 Non-Current Liabilities 75 17 1 286 682 Short-Term
Slide 41: P&L Statement – Namra (NBFC-MFI Subsidiary)
P&L Statement – Namra (NBFC-MFI Subsidiary) Particulars (INR Mn) FY15 FY16 FY17 FY18 FY19 YoY (%) Revenue from Operations 144 257 370 527 948 80% Interest income 132 203 329 441 850 93% Other interest income 0 4 15 21 14 -33% Income From Securitization 0 0 0 0 4 Interest income from Managed Assets 0
Slide 42: Balance Sheet – Namra (NBFC-MFI Subsidiary)
Balance Sheet – Namra (NBFC-MFI Subsidiary) Equity & Liabilities FY15 FY16 FY17 FY18 FY19 Share Capital 100 154 174 152 242 Reserves & Surplus 49 98 159 239 557 Shareholder's Funds 149 252 333 391 799 Long Term Borrowings 149 441 482 1,938 1,858 Long Term Provisions 0 2 1 4 10 Non-Current Liabilitie
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