Sbfc Finance Limited · NSE:SBFC
Sbfc Finance — Q2 FY2024 Earnings Presentation
34 slides from Sbfc Finance's earnings presentation, Oct 27, 2023
Slide 1: Intimation letter to stock exchanges
October 27, 2023 To To National Stock Exchange of India Limited, BSE Limited Exchange Plaza, Plot No. C/1, G Block, Phiroze Jeejeebhoy Towers, Bandra-Kurla Complex, Bandra (East), 21st Floor, Dalal Street, Mumbai – 400051 Mumbai – 400001 NSE Symbol: SBFC BSE Scrip Code: 543959 Dear Sir/ Madam, Sub:
Slide 2: Investor Presentation Q2 FY 2024
Investor Presentation Q2 FY 2024
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (‘Presentation”), which have been prepared by SBFC Finance Limited (the "Company"), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities,
Slide 4: SBFC – FY24 H1 Performance
SBFC – FY24 H1 Performance Size and Growth Distribution Granular Book Asset Quality Liability Profile Profitability % 5,803 171 97.9% 2.37% 2,339 100 AUM YoY +43% # Branches % Secured GNPA Tangible Net worth H1 FY24 PAT YoY -13 bps YoY +47% 4,787 3,278 9.89* | 0.86* % 3.8% Secured MSME AUM 1.33% CRA
Slide 5: Executive Summary – Q2 FY24
Executive Summary – Q2 FY24 Asset Under Management Disbursement1 Branches 5803 701 171 +43% +9% +25% +7% +35 +9 Gross NPA Yield / Spread Opex to AAUM 2.37% 16.8% / 7.5% 5.52% -13bps -17bps +74 / -15 bps +29 / +37 bps -70bps +10bps PAT RoAAUM RoATE 53 3.84% 10.40% +48% +12% +8bps +12bps -32bps -159bp
Slide 6: About the company
About the company Management and Shareholder Business Credit & Risk Financials 5
Slide 7: Executive Summary
Executive Summary 171 branches Team: Experienced, cycle-tested, professional management with strong corporate 140 Cities governance backed by marquee investors 16 States 2 UTs Focused Segment: Offering Secured MSME loan to small businesses with focus on ₹5 lakh - ₹30 lakh ticket size Opportunity: Ma
Slide 8: SBFC Focus Segment – customers borrowing ₹0.05 to ₹0.3 cr
SBFC Focus Segment – customers borrowing ₹0.05 to ₹0.3 cr Large segment within MSME of ₹2.5 lakh cr and growing at CAGR 24% Segment Market Size1 (₹ tn) CAGR2 (%) % of Market >₹1 cr 3.6 13.1% 42% ₹0.5 – 1 cr 1.1 17.0% 13% ₹0.3 – 0.5 cr 0.9 20.4% 10% Focus ₹0.05– 0.3 cr 2.5 23.7% 30% Segment <₹0.05 cr
Slide 9: Our Journey
Equity Listing on NSE Our Journey 1,00,000 customers and BSE 150 Branches 150 cr PAT Credit rating upgraded to ‘A +’ 5803 4943 50,000 customers 100 AUM of INR Branches 3192 Investment by 1000cr Clermont and 100 Arpwood group 150 2221 1648 65 1156 778 85 36 25 3 2018 2019 2020 2021 2022 2023 2024 (H1
Slide 10: Management and Shareholder
About the company Management and Shareholder Business Credit & Risk Financials 9
Slide 11: Management
Management Experienced, cycle-tested, professional management Aseem Dhru Mahesh Dayani Narayan Barasia Pankaj Poddar MD & CEO Chief Business Officer Chief Financial Officer Chief Risk Officer Sanket Agrawal Sumeet Ghai Ganesh Vaidya VM Maneesh Sai Prashant Menon Chief Strategy Officer and IR Chief H
Slide 12: Board of Directors
Board of Directors Strong corporate governance backed by long term investors Rajesh Agrawal Surekha Marandi Independent Neeraj Swaroop Jt. Managing Director, Ex Executive Director, Chairman of the Board Ajanta Pharma RBI John Mescall Jonathan Tatur Arjun Sakhuja Managing Director Investments Investm
Slide 13: Shareholding
Shareholding Shareholding Pattern Category of Shareholders % Share Promoters 12.41% 10.57% Clermont Group 58.52% Arpwood Group 5.50% 10.25% Other Major Shareholders SBI Mutual Fund 7.32% 64.03% 2.74% Amansa 4.16% Malabar Funds 4.16% Steadview Capital 1.88% Promoters Foreign Portfolio Investors Forei
Slide 14: Business
About the company Management and Shareholder Business Credit & Risk Financials 13
Slide 15: Business Momentum
Simplify graphic Business Momentum Delivering rapid growth in recent years YoY : 43% QoQ : 9% CAGR: 49% 5803 5327 2% 4943 3% 15% 3% 16% 18% 4070 5% 3192 19% 7% 2221 20% 83% 10% 79% 81% 25% 76% 73% 65% Mar-21 Mar-22 Mar-23 Q2 FY 23 Q1 FY 24 Q2 FY 24 Secured MSME LAG Others Secured MSME LAG Others All
Slide 16: Business Momentum – Secured MSME
Business Momentum – Secured MSME Growth in both Volume & Value AUM Disbursement Value Disbursement Volume YoY: 25% YoY: 25% YoY: 55% QoQ: 7% QoQ: 6% QoQ: 11% 7065 701 4787 655 4328 560 6655 70… 5672 3097 Q2 FY 23 Q1 FY 24 Q2 FY 24 Q2 FY 23 Q1 FY 24 Q2 FY 24 Q2 FY 23 Q1 FY 24 Q2 FY 24 AUM Secured MSM
Slide 17: Business Momentum – Co-origination
Business Momentum Co-origination – Validates our profitable origination Steady rise in co-origination disbursement… …leading to rise in co-origination AUM over the period %1 23% 18% 23% 13% 16% 18% Co-origination AUM (₹ Cr) Co-origination Disbursement (₹ Cr) 843 160 699 128 116 387 Q2 FY 23 Q1 FY 24
Slide 18: Business Momentum – No concentration risk
Business Momentum No concentration risk & well distributed growth Present in 16 states, 2 UTs covering 140 cities via 171 branches Driven by steady rise in AUM per branch # Branches 40 45 86 171 <12 months >12 & <36 months >36 months 4 1 3 10 50 3 45 43 39 25 40 37 6 11 35 7 33 35 30 86 13 4 25 22 2
Slide 19: Credit & Risk
About the company Management and Shareholder Business Credit & Risk Financials 18
Slide 20: Credit Underwriting
Credit Underwriting Tailored to service underserved, underbanked informal customers Most small businesses in India SBFC's business model, backed by experience in this segment have challenges • Credit officer spends time to understand income & cash flow (documented + non-documented) at family Partial
Slide 21: Credit Underwriting – Quality borrowers
Credit Underwriting Quality borrowers with credit score above 700 Over 83% AUM from customers with CIBIL >7001,2 Granular loan book with high quality collateral1 0/-1 7.4% 7.7% 7.9% <650 4.3% 2.1% 1.5% 8.5% 7.7% 7.2% 94.60% 42.59% > 650 & < 700 AUM secured by self occupied LTV residential/ commercia
Slide 22: Credit Indicators
Credit Indicators Gross NPA %1 Net NPA %2 2.54% 1.62% 2.50% 1.55% 1.33% 2.37% PCR 36.0% 39.6% 44.6% Q2 FY 22-23 Q1 FY 23-24 Q2 FY 23-24 Q2 FY 22-23 Q1 FY 23-24 Q2 FY 23-24 1+ DPD %3 Collections Efficiency %4 97.85% 97.17% 97.49% 5.97% 5.51% 5.27% Q2 FY 22-23 Q1 FY 23-24 Q2 FY 23-24 Q2 FY 22-23 Q1 FY
Slide 23: ECL Provisions Summary
ECL Provisions Summary As on September 30, 2023 Stage 1 Stage 2 Stage 3 Total Gross Loans Outstanding 4,811 225 122 5,158 ECL Provision 30 13 55 98 Net Loans Outstanding 4,781 212 67 5,060 ECL Provision % 0.63% 5.91% 44.62% 1.91% As on June 30, 2023 Stage 1 Stage 2 Stage 3 Total Gross Loans Outstand
Slide 24: Collections Approach
Rework icons Collections Approach In-house, on-ground collections teams – 92% collected digitally On-ground Teams Scalable Structure Adaptable collection strategy as per loan stage Loan Stage Branch staff Branch area- from local area + limited radius Normal • Call center autodial quick attention to
Slide 25: Financials
About the company Management and Shareholder Business Credit & Risk Financials 24
Slide 26: Financial Performance – Quarterly Trends in KPIs
Financial Performance Quarterly Trends in KPIs AUM Yield Spread (₹cr) 17.26%1 17.10%1 7.63%1 7.89%1 5327 5803 4070 16.84% 16.56% 7.61% 7.09% 7.47% 16.11% Q2 FY 23 Q1 FY 24 Q2 FY 24 Q2 FY 23 Q1 FY 24 Q2 FY 24 Q2 FY 23 Q1 FY 24 Q2 FY 24 Opex to AAUM Gross NPA RoAAUM 10.72% 11.99% 10.40%* RoATE 3.84% 6
Slide 27: Financial Performance – Half-yearly Trends in KPIs
Financial Performance Half-yearly Trends in KPIs AUM Yield Spread (₹cr) 17.19%1 5803 7.77%1 4943 4070 7.56% 7.41% 16.71% 7.29% 16.28% 15.92% H1 FY 23 H2 FY 23 H1 FY 24 H1 FY 23 H2 FY 23 H1 FY 24 H1 FY 23 H2 FY 23 H1 FY 24 Opex to AAUM Gross NPA RoAAUM 10.58% 11.56% 11.10%* RoATE 2.57% 3.79% 3.78% 6.
Slide 28: Sources of Borrowing
Sources of Borrowing Diversified Borrowing Mix Long Term Credit rating A+ (Stable) 1.2% 1.2% 1.2% 10.5% 22.6% Lenders to the Company 31.5% 41.2% 0.7% 8.3% Public Sector Banks 49.6% 6.0% 15.7% 10.3% NCD Private Sector Bank NCD Private Sector Bank Financial Institutions Public Sector Banks Financial I
Slide 29: ALM – September 2023
ALM – September 2023 Surplus 641 649 Upto 3 months 1290 962 958 Upto 6 months 1920 1614 Upto 1 Year 1181 2795 3472 Upto 3 Years 907 4379 3950 Upto 5 Years 2401 6360 6759 Upto 5+ Years 6759 Liablilities Asset All figures in ₹ Cr 28
Slide 30: Summary Financial Statements – P&L for Q2 FY24
Summary Financial Statements – Profit & Loss Account for Q2 FY24 Quarter Ended Growth (%) Particulars 30 30 30 H1 FY24 September June September Q-o-Q Y-o-Y 2023 2023 2022 Performance Interest Income on Loans 2051 1881 143 9.3% 44.1% Interest Income other than on Loans 15 16 13 -9.3% 8.4% Fee & Other
Slide 31: Summary Financial Statements – P&L for H1 FY24
Summary Financial Statements – Profit & Loss Account for H1 FY24 Half Year Ended Growth (%) Annual Particulars 30 30 31 H1 FY24 September September Y-o-Y March 2023 2022 2023 Performance Interest Income on Loans 3931 267 47.2% 595 Interest Income other than on Loans 31 28 8.0% 59 Fee & Other Income
Slide 32: ROE Tree
ROE Tree Ratios H1FY24 H1FY23 FY 23 FY 22 Interest Income on Loans/ Average Loan Book 16.7%1 15.9% 16.1% 15.5% Fee & Other Income/ Average AUM 2.0% 2.4% 2.2% 2.2% Finance costs/ Average Borrowings 9.5% 8.4% 8.7% 8.1% Spread 7.3%1 7.6% 7.5% 7.5% Net Interest Margin/ Average AUM 9.3%1 9.7% 9.5% 9.7% O
Slide 33: Balance Sheet
Balance Sheet Quarter Ended Annual 30 30 30 31 Particulars September June September March 2023 2023 2022 2023 Assets Cash and Bank Balances 714 440 393 400 Derivative Instrument 4 - - - Receivables 12 18 9 11 Loan Assets 5,060 4,713 3,719 4,415 Investments 476 623 834 607 Other financial assets 8 4
Slide 34: Thank You!
THANK YOU! 33 PRIVATE & CONFIDENTIAL