Poonawalla Fincorp Limited · NSE:POONAWALLA
Poonawalla Fincorp — Q2 FY2022 Earnings Presentation
49 slides from Poonawalla Fincorp's earnings presentation, Oct 27, 2021
Slide 1: Exchange filing cover letter
October 27, 2021 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. BSE Scrip Code: 524000
Slide 2: Poonawalla Fincorp Limited Investor Presentation Q2FY22
Poonawalla Fincorp Limited (Formerly known as Magma Fincorp Limited) Investor Presentation Q2FY22
Slide 3: Agenda
Agenda 1 Executive Summary 2 Business Strategy 3 Business and Financial Update – Consolidated 4 Business and Financial Update – Subsidiary / Joint Venture 5 Shareholding Pattern and Leadership Team 2
Slide 4: 1. Executive Summary
1. Executive Summary
Slide 5: Executive Summary (1/2)
Executive Summary (1/2) Business ▪ AUM at ₹15,275 crore as on 30-Sep-21 | 6% QoQ | Revival of business activity ▪ Personal Loan, Loan to Professionals and SME LAP launched ▪ Medical Equipment Loan, Small Ticket LAP and Co-Lending / Fintech Partnerships at an advanced stage of rollout Financials ▪
Slide 6: Executive Summary (2/2)
Executive Summary (2/2) Funding & Liquidity ▪ Two notch upgrade in long-term credit rating to ‘AA+; Stable’ by Care Ratings ▪ Over 85% of eligible loans repriced by over 120bps | Incremental funding at sub 6.5% ▪ Ample liquidity - over ₹1,700 crore as at 30-Sep-21 | Further term loan sanction of ₹1,
Slide 7: 2. Business Strategy
2. Business Strategy
Slide 8: Management Vision 2025
Management Vision 2025 To be amongst Top 3 NBFCs for consumer and small business finance “To be a diversified tech- enabled NBFC focused on risk Risk-calibrated accelerated growth ~3x of Current AUM calibrated growth, with customer centric approach, Amongst the lowest COF in the industry ~250 bps re
Slide 9: Core Strategic Pillars
Core Strategic Pillars Building on benefits derived End-to-end digitization using Capital from being part of the Cyrus data analytics and Digital Poonawalla group Parentage 1 7 Focus 2 6 Highly experienced Professional Asset Quality Focus on asset quality management team with Management and Risk thr
Slide 10: Phased Strategy Execution
Phased Strategy Execution Consolidate-Grow-Lead Consolidate Grow Lead (1-9 months) (9-18 months) (18-36 months) • People • Build scale with new products and • Leadership in chosen Products expand cross sell • Products • Leadership in chosen • Build branch lite model Geographies • Branches • Enhance
Slide 11: Phased Strategy Execution - Update
Phased Strategy Execution - Update Consolidate-Grow-Lead Consolidate ▪ Onboarded Group COO, Group CTO, Dy. CEO-PHFL, CRO, Head-Treasury (1-9 months) People ▪ Relocation of key resources to Mumbai / Pune progressing well; Extensive employee connect carried out • People ▪ Personal Loan, Loan to Profes
Slide 12: Product Strategy Roadmap
Product Strategy Roadmap Existing Products Products Launched Pipeline Pre-owned Cars Personal Loan Medical Equipment Loan Consumer Durables Affordable Home Loan Loan to Professionals Small Ticket LAP EMI Card Affordable LAP SME LAP Co-branded Credit Card Supply Chain Finance Business Loans Merchant
Slide 13: End to End Digital Focus
End to End Digital Focus Best-in-class Technology & Analytics 1. Digital Acquisition 2. Online Channel Partner Login Aggressive digital campaigns on social media. Channel partner login enabled for Direct sourcing through website with digital unsecured lending journey enabled 7. Technology Enabled Cu
Slide 14: Tech Priorities
Tech Priorities ▪ Quicker Product Launches ▪ Credit Score Cards ▪ Faster Partnership Risk ▪ Digitized Collections Module Accelerated Onboardings Calibration ▪ Integrated Data Verification. Journey ▪ Complete migration to new stack by Mar-22 ▪ Activate digital transformation Priorities Governance tea
Slide 15: Data Science and Analytics
Data Science and Analytics Sales & Distribution Credit Underwriting & Risk Monitoring Key Initiatives Key Initiatives ▪ Geo-Expansion and Rationalisation done using micro ▪ Machine Learning algorithm based underwriting model market data under testing for some products ▪ Pre-Approved campaigns launch
Slide 16: Liability Strategy
Liability Strategy Pillars for building a resilient liability franchise Diversification of liabilities • Diversified relationships across banks, mutual funds, insurance companies and other capital market lenders • Progressive increase in capital market borrowings to reach steady state range of 40%-4
Slide 17: 3. Business and Financial Update
3. Business and Financial Update
Slide 18: Business Update (1/2)
Business Update (1/2) Pre-owned Cars (POC) Unsecured Loans Fintech Partnership entered for accelerated growth Personal Loan and Loan to Professionals launched Collection Efficiency back to pre-COVID level at 98% in Focus towards formal segment customers Sep-21 Improved operational controls - Fresh o
Slide 19: Business Update (2/2)
Business Update (2/2) Affordable HL and LAP SME LAP Geo expansion from 97 in Mar-21 to 103 as of Sep-21 Board approved policy in place Collection Efficiency back to pre-COVID level at 99% in Digital stack implemented Sep-21 Direct Sourcing ratio maintained ~80% 300+ channels onboarded Home Loans Rat
Slide 20: Key Financial Parameters
Key Financial Parameters Disbursement AUM Gross and Net Stage 3 % 2,580 5.1% 5.4% 15,571 14,424 15,275 4.1% 1,732 1,285 3.2% 2.7% 830 2.0% 1,395 1,295 338 Q2FY21 Q1FY22 Q2FY22 Sep-20 Jun-21 Sep-21 Sep-20 Jun-21 Sep-21 CRAR (Standalone) &Net Worth Leverage CoB 57.8% 52.2% 72bps 9.8% 9.6% 27.0% 5,722
Slide 21: Diversified AUM Mix
Diversified AUM Mix Product-wise On book vs Off book Zone-wise 14% 9% 20% 36% 41% 13% 18% 31% 91% 26% Cars (POC + AL) Unsecured loans Mortgage Discontinued book* On-book Off-book North South East West Well diversified portfolio across products as well as geographies; 96% portfolio secured by collate
Slide 22: Asset Quality
Asset Quality PFL PHFL Consol Sep-20 Jun-21 Sep-21 Sep-20 Jun-21 Sep-21 Sep-20 Jun-21 Sep-21 Stage 1 Assets % 88.0% 76.9% 80.9% 95.6% 85.3% 86.0% 89.5% 78.9% 82.1% Stage 2 Assets % 6.1% 16.7% 14.3% 2.8% 12.7% 12.1% 5.4% 15.8% 13.8% Stage 1 PCR (%) 2.8% 1.6% 1.5% 0.6% 0.4% 0.3% 2.3% 1.3% 1.2% Stage 2
Slide 23: Asset Quality
Asset Quality Collection Efficiency Trending Towards Pre-covid Levels Restructuring ▪ Total restructured assets as at 30-Sep-21 was ₹899 crore (5.9% of AUM). ▪ Out of total restructured assets of ₹899 crore, ₹523 crore (58%) is in 0 bucket. However, for the purpose of asset classification and provis
Slide 24: Well matched ALM
Well matched ALM Structural Liquidity as on 30-Sep-21 Cumulative inflows (₹ in Cr) Cumulative outflows(₹ in Cr) 13,895 13,895 12,291 11,304 7,587 8,087 6,318 5,632 4,298 3,202 2,165 172 451 839 0-1m 1-3m 3-6m 6m-1y 1-3y 3-5y >5y Cumulative 1,993 2,751 3,459 686 3,717 4,204 0 Positive Gap Cumulative
Slide 25: Profit & Loss Statement - Consolidated
Profit & Loss Statement - Consolidated Q2FY22 Q1FY22 Q2FY21 H1FY22 H1FY21 FY21 Particulars Q2FY22 Q1FY22 Q2FY21 H1FY22 H1FY21 FY21 9.1% 7.9% 8.0% 8.4% 7.4% 8.2% NIM (incl. fee income) 336 284 315 620 590 1,252 4.8% 4.3% 3.4% 4.5% 3.4% 3.6% Opex# 177 155 134 332 271 542 4.3% 3.6% 4.6% 3.9% 4.0% 4.7%
Slide 26: 4. Business & Financial Update – Subsidiary / Joint Venture
4. Business & Financial Update – Subsidiary / Joint Venture
Slide 27: Poonawalla Housing Finance Limited
Poonawalla Housing Finance Limited (Formerly known as Magma Housing Finance Limited) (Subsidiary)
Slide 28: Key Financial Parameters - PHFL
Key Financial Parameters - PHFL Disbursement AUM Gross and Net Stage 3 % 4,047 4,287 390 3,554 1.9% 1.9% 1.6% 267 248 1.2% 1.2% 1.0% 177 71 Q2FY21 Q1FY22 Q2FY22 Sep-20 Jun-21 Sep-21 Sep-20 Jun-21 Sep-21 CRAR and Net Worth Leverage CoB 57.6% 60bps 53.4% 9.4% 9.2% 33.5% 1,007 1,038 5.0 8.8% 503 2.1 2.
Slide 29: Diversified AUM Mix - PHFL
Diversified AUM Mix - PHFL Product-wise On book vs Off book Zone-wise 0.4% 22% 32% 34% 38% 62% 8% 78% 26% HL LAP CF On-book Off-book North South East West With the new capital infused, the company is poised for accelerated growth in AUM 28
Slide 30: Business Update - PHFL
Business Update - PHFL Direct Ratio (Units) Home Loan Ratio (Units) 75% 73% 78% 80% 81% 65% 67% 66% 75% 79% 44% 37% FY18 FY19 FY20 FY21 Q1FY22 Q2FY22 FY18 FY19 FY20 FY21 Q1FY22 Q2FY22 Home Loans Ratio in fresh disbursement has grown Direct sourcing ratio maintained at ~80% from 37% in FY18 to 73% in
Slide 31: Strong ALM Profile with Adequate Liquidity - PHFL
Strong ALM Profile with Adequate Liquidity - PHFL Structural Liquidity as on 30-Sep-21 6,362 Cumulative Inflows Cumulative Outflows 4,544 4,199 3,064 3,076 2,595 1,375 1,443 648 896 614 456 76 164 0 - 1 month 1 - 3 month 3 - 6 month 6 - 1 Year 1 - 3 Years 3 - 5 Years > 5 Years Cumulative Gap 380 484
Slide 32: Profit & Loss Statement - PHFL
Profit & Loss Statement - PHFL Q2FY22 Q1FY22 Q2FY21 H1FY22 H1FY21 FY21 Particulars Q2FY22 Q1FY22 Q2FY21 H1FY22 H1FY21 FY21 6.4% 5.1% 5.6% 5.7% 5.2% 6.8% NIM (incl. fee income) 67 51 49 118 89 246 3.1% 2.8% 2.7% 2.9% 2.7% 2.8% Opex 32 28 23 60 46 102 3.4% 2.3% 2.9% 2.8% 2.5% 4.0% PPOP 35 23 25 58 43
Slide 33: Magma HDI General Insurance Limited
Magma HDI General Insurance Limited (Joint Venture)
Slide 34: Highlights
Highlights Wide range of IRDAI approved products 67+ with multiple add-ons attached to products Extensive network of IRDAI approved intermediaries 8600+ across the country One of the Top 5 companies with least number of complaints intimated per 10,000 policies issued as at Q1FY22* One of the lowest
Slide 35: Built on Strong Risk Foundation
Built on Strong Risk Foundation Achieved robust growth rate over the years GWP FY18 – FY21 CAGR ~34% 1,294 1,349 1,026 31% 723 560 553 FY18 FY19 FY20 FY21 H1FY21 H1FY22 GWP 560 1,026 1,294 1,349 553 723 Magma HDI Growth 32% 83% 26% 4% -6% 31% Industry Growth 17% 13% 12% 6% 1% 13% Values in ₹ crore 3
Slide 36: Diversified Distribution & Portfolio Mix
Diversified Distribution & Portfolio Mix 20% 58% 32% 30% 45% Distribution Mix & 289 141 163 Growth 106 23 44% 40% 16% 20% 15% 15% 22% 22% 3% 3% Agency & Others Banca* & Others OEM Commercial Business e-Sales, MSME & Others H1FY21 H1FY22 GWP Growth Growth Motor OD Motor OD 48% 7% 7% 6% 20% 6% Portfol
Slide 37: Enhancing Distribution Through Partnerships
Enhancing Distribution Through Partnerships Offices & Channel Partners FY19 FY20 FY21 H1FY22 Number of Branches 169 170 133 132 Agents + POS* + MISP# 5,028 6,558 7,614 8,692 Corporate Agents 7 13 11 11 OEM^ Tie-ups 1 6 14 18 Number of Districts where policies are issued : 587 Number of Districts where
Slide 38: Focus on increasing Non Motor Portfolio
Focus on increasing Non Motor Portfolio Motor GWP and Share Retail Run Rate 80% 304 320 338 73% 72% 71% 72% 258 221 101 107 74 113 1029 86 747 969 395 517 FY19 FY20 FY21 H1FY21 H1FY22 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 GWP Share Qtrly Retail Business Mthly Retail Run Rate Commercial and Health GWP w
Slide 39: Continuous Accretion in Investment Book
Continuous Accretion in Investment Book Combined Ratio Movement Investment Book & Leverage ratio 7.6 120.7% 120.0% 121.1% 119.3% 117.7% 121.8% 119.7% 6.9 36.4% 40.3% 36.1% 40.2% 40.4% 47.8% 47.0% 5.4 4.7 2,994 3,299 84.3% 79.6% 85.0% 79.2% 81.5% 2,285 69.9% 72.6% 1,462 FY20 FY21 Q1FY22 Q2FY21 Q2FY22
Slide 40: Profit & Loss Statement (Ind AS)
Profit & Loss Statement (Ind AS) Particulars Q2FY22 Q1FY22 Q2FY21 H1FY22 H1FY21 FY21 Gross Written Premium 400 323 313 723 553 1,349 Net Written Premium 269 181 198 450 335 798 Net Earned Premium 224 202 190 427 378 762 Net Claims Incurred 157 153 151 310 308 607 Net Commission (1) (12) (16) (13) (2
Slide 41: 5. Shareholding Pattern & Leadership Team
5. Shareholding Pattern & Leadership Team
Slide 42: Holding Structure & Shareholding Pattern
Holding Structure & Shareholding Pattern Rising Sun Holdings Private Shareholding (30-Sep-21) Limited (owned and controlled by Mr. Adar Poonawalla) Public, 12.44% Domestic 59.91% Investors, 8.53% Poonawalla Fincorp Limited FII, 5.94% Overseas Bodies, 0.56% Promoters, 100% 36.43% 72.53% Magma HDI Gen
Slide 43: Board of Directors
Board of Directors Mr. Adar Poonawalla Mr. Sanjay Chamria Mr. Amar Deshpande Chairman & Executive Non-Executive Director Non-Executive Director Vice Chairman Ms. Vijayalakshmi R. Iyer Mr. Bontha Prasad Rao Mr. Sajid Fazalbhoy Mr. Prabhakar Dalal Non-Executive Non-Executive Non-Executive Non-Executiv
Slide 44: Management Team
Management Team Vijay Deshwal Gaurav Sharma Group Chief Executive Officer Group Chief Technology Officer Previously, Business Head, Service Sector Group at ICICI Bank Previously, Chief Technology Officer at L&T Financial Services Sanjay Miranka Mahender Bagrodia Group Chief Financial Officer Head-Co
Slide 45: Annexure
Annexure
Slide 46: Profit & Loss Statement - PFL Standalone
Profit & Loss Statement - PFL Standalone Q2FY22 Q1FY22 Q2FY21 H1FY22 H1FY21 FY21 Particulars Q2FY22 Q1FY22 Q2FY21 H1FY22 H1FY21 FY21 9.8% 8.7% 8.4% 9.2% 7.8% 8.4% NIM (incl. fee income) 269 231 266 500 499 1,002 5.3% 4.8% 3.5% 5.0% 3.5% 3.7% Opex# 145 127 111 272 225 440 4.5% 3.9% 4.9% 4.2% 4.3% 4.7
Slide 47: 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 48: Disclaimer (Contd.)
Disclaimer (Contd.) The information contained in these materials has not been independently verified. None of the Company, its directors, promoter or affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability what
Slide 49: Thank You!
POONAWALLA FINCORP Thank You! www.poonawallafincorp.com