Poonawalla Fincorp Limited · NSE:POONAWALLA
Poonawalla Fincorp — Q4 FY2024 Earnings Presentation
45 slides from Poonawalla Fincorp's earnings presentation, Apr 29, 2024
Slide 1: Exchange intimation letter: Investor/Analysts' Presentation
Classification | INTERNAL April 29, 2024 BSE Limited National Stock Exchange of India Limited Corporate Relationship Department The Listing Department, 25th Floor, Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Fort, Bandra- Kurla Complex, Bandra (East), Mumbai - 400 001. Mumbai - 400 051.
Slide 2: Poonawalla Fincorp Limited Investor Presentation Q4FY24
Poonawalla Fincorp Limited Investor Presentation Q4FY24 Scalable Business Model | Pure Retail Play | Digital-First Tech-Led | Customer Centric
Slide 3: Q4FY24 Performance
Q4FY24 Performance Excellent Quarter on All Fronts Differentiated strategy and execution excellence led to all round performance across business growth, credit quality & profitability AUM Crosses ₹25,000 crore AUM Disbursement ₹ 25,003 crore ₹ 9,688 crore Annual PAT crosses ₹1,000 crore +55% YoY | +
Slide 4: Agenda
Agenda 1 Overview & Executive Summary 2 2 Our Business Model 6 3 Strategy Execution 16 4 Business & Financial Highlights 30 5 Digital Transformation 36 6 Board Members; Management Team and Awards & Accolades 38 3
Slide 5: Executive Summary
Executive Summary Setting the momentum for expanding growth horizon Strong Business Momentum Continues in Q4FY24 ▪ Highest ever disbursement of ₹ 9,688 crore ▪ Consistent increase in disbursement: Up 52% YoY & 11% QoQ ▪ AUM at ₹ 25,003 crore with a growth of 55% YoY & 14% QoQ ▪ Secured : Unsecured A
Slide 6: Executive Summary
Executive Summary Setting the momentum for expanding growth horizon Robust Asset Quality ▪ GNPA & NNPA reduced to 1.16% and 0.59% respectively compared to 1.33% & 0.70% in Q3FY24 and as compared to 1.44% & 0.78% in Q4FY23 ▪ Provision Coverage Ratio (PCR %) stood at 49.39% Rise in Profitability – Q4F
Slide 7: Agenda
Agenda 1 Overview & Executive Summary 2 2 Our Business Model 6 3 Strategy Execution 16 4 Business & Financial Highlights 30 5 Digital Transformation 36 6 Board Members; Management Team and Awards & Accolades 38 6
Slide 8: Poonawalla Fincorp's Digital-First Tech-led Model - Demystified
Poonawalla Fincorp’s Digital-First Tech-led Model - Demystified Low cost of funds and Low Opex enabling Poonawalla Fincorp to target low risk - credit tested Prime and Super Prime customers thereby resulting in lower credit cost Low Higher Low Low Low Cost of Risk Operating Cost Risk Customers Credi
Slide 9: Customer's Problem Statement and Persona
Customer’s Problem Statement and Persona An illustration Rajiv, a 34-year-old businessman from Pune, runs a manufacturing unit since last 8 years from rented premise. He has an annual turnover of ₹ 3 crore, stays in his owned house and pays GST on time. He is tech savvy, uses internet banking, activ
Slide 10: Customer Dilemma – Where is my lender of choice?
Customer Dilemma – Where is my lender of choice ? Large NBFC with Poonawalla Parameters Traditional Bank Traditional NBFC Digital Capability Fintech NBFC Fincorp Loan Amount Flexibility No Yes Yes No Yes Collateral Free No Yes Yes Yes Yes Quick Turnaround Time No No Yes Yes Yes 100% Digital Process
Slide 11: What Differentiates Us?
What Differentiates Us? • Led by Abhay Bhutada, a serial • AAA Rated entrepreneur at the top • Well Capitalized Entrepreneur • Built a pool of next level leaders and a • Excellent portfolio quality at top culture of innovation and entrepreneurial • Strong well diversified book mindset Strong Digital
Slide 12: Differentiated Business Model
Differentiated Business Model Non-Conventional & Branch-lite model Strong Leadership and Management • We have well defined, digital-led and branch lite • Poonawalla Fincorp is backed by Cyrus Poonawalla model that differentiates us from the conventional Group, which is cash rich, net debt free and o
Slide 13: Our customer segment is unique and better than other lenders
Our customer segment is unique and better than other lenders Product Market Credit Tested Bureau Score Professional Use Urban Credit Tested 700+ Consumption related Semi Urban New To Credit 650+ Commercial Use Rural 600+ Ticket Size Income Assessment Income Document Pricing Top Quartile Verified Inc
Slide 14: Where is differentiation getting reflected?
Where is differentiation getting reflected? AUM Growth Portfolio Quality Operating Efficiency Digital Reach Customer Satisfaction Consistent Best-in-class GNPA Consistent reduction Increased customer Improvement in NPS QoQ & NNPA in Opex ratio acquisition We have built an engine that is Scalable Sus
Slide 15: Risk Management integrated into the strategy
Risk Management integrated into the strategy • Prime & Super Prime Segment • Bureau Score 700+ • Demonstrated credit behavior • Time maturity model • Credit risk optimized • Better customer understanding Credit Tested • X-Sell & Up-Sell optimized Customers Digital • Bureau Data Start Small • Banking
Slide 16: Biggest & Successful Transformation in NBFC sector
Biggest & Successful Transformation in NBFC sector Dec-20 (Legacy Magma) Mar-24 (Poonawalla Fincorp) Parameters (Standalone) (Pre-Acquisition) (Post-Acquisition) Assets Under Management (AUM) ₹ 11,631 crore ₹ 25,003 crore Cost of Borrowing (%) 9.64% 8.17% GS3/Gross NPA (%)1 8.23% 1.16% NS3/Net NPA (
Slide 17: Agenda
Agenda 1 Overview & Executive Summary 2 2 Our Business Model 6 3 Strategy Execution 16 4 Business & Financial Highlights 30 5 Digital Transformation 36 6 Board Members; Management Team and Awards & Accolades 38 16
Slide 18: Scalable Business Model to Drive Profitable Growth
Scalable Business Model to Drive Profitable Growth Inherent Strengths… Brand Strength & Strong Management Digital First and Technology Led Target Market Aligned Distribution & Products Flagship financing arm of Cyrus Poonawalla Digitalized end to end processes Unique sourcing model with mix of Direc
Slide 19: Management Vision 2025
Management Vision 2025 Performance well ahead of long-term guidance Vision 2025 On the right track (Q4FY24 status) To be amongst the Top 3 NBFCs in consumer and Product diversification to have large presence in MSME segment chosen segments. Leadership in select products achieved Risk-calibrated acce
Slide 20: Long Term Guidance on Financial Metrics
Long Term Guidance on Financial Metrics Profitable Growth with Best-in-Class Asset Quality AUM Growth Profit Growth GNPA 35-40% 30-35% 1.3-1.8% NNPA Return on Assets 0.5-0.9% 4-4.5% 19
Slide 21: Successfully Executing our Strategic Plan
Successfully Executing our Strategic Plan 1 Differentiating by Offering Superior Customer Value 2 Aligning Distribution & Products that Suits Target Market 3 Digital-First, Technology-Led to the Core 4 Upholding Robust Credit Quality 5 Continuously Optimizing Cost of Borrowing & Liquidity 6 Future R
Slide 22: Differentiating by Offering Superior Customer Value
1a Differentiating by Offering Superior Customer Value To ensure sustainable growth & leadership in chosen segments ₹ crore Accelerated disbursement growth 6.1x 9,688 8,731 7,063 7,807 6,371 3,110 3,369 1,600 2,379 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Minimal paperwork, red
Slide 23: Diversified Assets Under Management
1b Diversified Assets Under Management Contribution ₹ crore MSME Lending (Secured + Unsecured) 9,260 37% Personal and Consumer 5,855 23% Loan Against Property 4,072 • Diversified portfolio with focus on 16% MSME and Consumer segment. • AUM well diversified across Pre-owned Car 3,647 15% products, ge
Slide 24: Distribution: In Sync with Emerging Business Models
2a Distribution: In Sync with Emerging Business Models Direct Digital Program (DDP) led distribution model Digital Channel Direct Channel Digital ecosystem In-house sourcing of In-house sourcing of Multiple tie-ups, alliances & customers through app, web, DDP Distribution customers through branches
Slide 25: Product Suite: Tailored for the Target Segment
2b Product Suite: Tailored for the Target Segment Focus on Consumer & MSME segment with diversified offerings Products Pre-owned Cars Digital Business Loans Machinery Loan Co-branded Credit Card* *Launch in Q1 FY25 Digital Personal Loan Digital Consumption Loan Loan Against Property Supply Chain Fin
Slide 26: Digital-First, Technology-Led to the Core
3a Digital-First, Technology-Led to the Core Leading to competitive moat, efficient operations & sustained growth Deep Investments in Technology Building a Tech led Play Customers Partners Self service online web application Extended API Infrastructure Core Contact center, app led digital onboarding
Slide 27: Digital Transformation Yielding Results
3b Digital Transformation Yielding Results End to End Digitalized Lending – Lower TATs, Minimal Paperwork, Reduced human intervention ▪ End to end digital journey capability for customers across all products via Digital KYC, Digital Onboarding (e-sign, e-agreement & e-Nach), Automated BRE for quick
Slide 28: Upholding Robust Credit Quality
4 Upholding Robust Credit Quality Consistent outperformance on Asset Quality GS3 / GNPA* (%) NS3 / NNPA* (%) 3.29 2.68 1.30 1.11 1.77 1.69 0.94 0.89 1.44 1.42 1.36 1.33 0.78 0.76 0.72 0.70 1.16 0.59 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun
Slide 29: Optimizing Cost of Borrowing & Liquidity Position
5 Optimizing Cost of Borrowing & Liquidity Position CoB continues to remain among the lowest in the industry despite hardening of rates & tight liquidity Cost of Borrowing (CoB) 9.14% 8.17% 8.00% 8.04% 7.98% 7.99% 7.90% 7.54% 7.54% 7.16% 6.97% Repo rate hike → Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY
Slide 30: Future Ready Human Capital with Strong Leadership
6 Future Ready Human Capital with Strong Leadership Building the Right Culture with focus on Productivity Productivity & Enhancing Employee Exciting Rewards Continuous Operational Efficiency Engagement Development • Embedded competencies with goals • Launched comprehensive Leadership • Technology dr
Slide 31: Agenda
Agenda 1 Overview & Executive Summary 2 2 Our Business Model 6 3 Strategy Execution 18 4 Business & Financial Highlights 30 5 Digital Transformation 36 6 Board Members; Management Team and Awards & Accolades 38 30
Slide 32: Performance Parameters
Performance Parameters Robust growth continues | Significant reduction in GNPA & NNPA ₹ crore Disbursement AUM PAT (Excluding exceptional Items) 332 25,003 265 230 21,946 9,688 20,215 200 8,731 180 7,807 17,776 7,063 16,143 150 6,371 130 13,929 12,606 13,161 100 2,901 3,110 3,369 Q1FY23 Q2FY23 Q3FY2
Slide 33: ALM statement and Liquidity
ALM statement and Liquidity Structural Liquidity Statement as on March 31, 2024 Cumulative inflows (₹ in Cr) Cumulative outflows(₹ in Cr) 28,058 28,058 24,687 22,582 19,548 16,608 14,940 11,480 9,087 10,031 6,586 3,955 3,725 4,494 2,218 2,708 1,531 575 160 244 0-7 d 8-15 d 15-31 d 1-2 m 2-3 m 3-6 m
Slide 34: Asset Quality
Asset Quality Significant improvement on sustained basis Particulars Mar-23 Dec-23 Mar-24 Gross NPA (₹ crore) 225 275 268 Net NPA (₹ crore) 121 145 136 Gross NPA (%) 1.44% 1.33% 1.16% Net NPA (%) 0.78% 0.70% 0.59% Provision Coverage Ratio (%) 46.19% 47.33% 49.39% % of on-book AUM 33
Slide 35: Profit & Loss Statement
Profit & Loss Statement Particulars (₹ crore) Q4FY23 Q3FY24 Q4FY24 YoY QoQ FY23 FY24 YoY Total Income 581 774 922 59% 19% 2,010 3,152 57% Interest Expenses 173 224 281 62% 26% 595 955 60% Operating Expenses 196 200 231 18% 16% 803 807 1% Operating Profit 212 350 409 93% 17% 612 1,389 127% Credit Cos
Slide 36: Balance Sheet
Balance Sheet Particulars (₹ crore) 31-Mar-23 31-Dec-23 31-Mar-24 YoY Cash & Bank Balances 657 198 268 -59% Receivables 21 66 29 39% Loans 15,229 19,415 22,046 45% Investments 510 743 878 72% Other Financial Assets 373 342 259 -31% Non-Financial Assets 1,232 468 556 -55% Total Assets 18,022 21,232 2
Slide 37: Agenda
Agenda 1 Overview & Executive Summary 2 2 Our Business Model 6 3 Strategy Execution 16 4 Business & Financial Highlights 30 5 Digital Transformation 36 6 Board Members; Management Team and Awards & Accolades 38 36
Slide 38: Digital Transformation
Digital Transformation We have successfully completed Phase 1 & Phase 2 of technology transformation enabling: • Launch of multiple new products as per our stated strategy • A stable and scalable digital platform • Superior experience to our customers Phase 2 of technology transformation has further
Slide 39: Agenda
Agenda 1 Overview & Executive Summary 2 2 Our Business Model 6 3 Strategy Execution 16 4 Business & Financial Highlights 30 5 Digital Transformation 36 6 Board Members; Management Team and Awards & Accolades 38 38
Slide 40: Board of Directors - Poonawalla Fincorp
Board of Directors - Poonawalla Fincorp Experienced & Diversified Board Mr. Adar Poonawalla Mr. Abhay Bhutada Mr. Sunil Samdani Mr. Amar Deshpande Mr. Sajid Fazalbhoy Chairman & Managing Director Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Mr. Atul Kumar G
Slide 41: Key Managerial Personnel
Key Managerial Personnel Experienced Management Team Mr. Abhay Bhutada Mr. Sunil Samdani Mr. Manish Chaudhari Mr. Sanjay Miranka Managing Director Executive Director Head of Retail Assets Chief Financial Officer Mr. Anup Agarwal Mr. Manoj Gujaran Mr. Rajendra Tathare Mr. Hiren Shah Chief Internal Au
Slide 42: Awards and Accolades
Awards and Accolades Compliance and Legal Human Resource ‘Rising Corporate Certified as a India’s Recognised Legal & great Best as The Compliance Team workplace by Workplace Most of the Year’ at At Great Place in Health Preferred Lex Falcon Global To Work & Workplace Awards India 2024 (GPTW) from We
Slide 43: Disclaimer
Disclaimer This presentation has been prepared by Poonawalla Fincorp Limited (the “Company”), for general information purposes only, without regard to any specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation or form part
Slide 44: Disclaimer (Continued)
Disclaimer (Continued) The information contained in these materials has not been independently verified. Neither the Company, its directors, promoter affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability what
Slide 45: Thank You
THANK YOU Team – Investor Relations Investor.relations@poonawallafincorp.com