Arman Financial Services Limited · NSE:ARMANFIN
Arman Financial Services — Q1 FY2025 Earnings Presentation
41 slides from Arman Financial Services's earnings presentation, August 2024
Slide 1: Arman Financial Services Limited Investor Presentation – August 2024
Arman Financial Services Limited Investor Presentation – August 2024 1
Slide 2: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Arman Financial Services Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for an
Slide 3: Contents
Contents Business Update Page 4 - Page 8 About the Company Page 9 - Page 15 Presence in Attractive Retail Page 16 - Page 22 Lending Segments Efficient Liability Management Page 23 - Page 26 Strong Financial Performance Page 27 - Page 40 3
Slide 4: Business Update
2» Business Update
Slide 5: Q1FY25 Performance Highlights
Q1FY25 Performance Highlights Assets Under INR 2,594 Crore Provisions INR 44 Crore Management and Write offs Cumulative Provisions stood at ~INR 101 Crore (+21.0% Y-o-Y) (covering 3.91% of the consolidated AUM, 4.81% on-book) INR 459 Crore GNPA: 2.79% Disbursement Asset Quality (-13.5% Y-o-Y) NNPA:
Slide 6: Recent Fund Raises (1/2)
Recent Fund Raises (1/2) December – 2023 September - 2022 Company raised INR 230 crore via Company raised INR 115 crore via allotment of CCDs Shareholding Pattern as on 30 th June, on Fully diluted basis Qualified Institutional Placements of and OCRPS on a preferential basis Equity Shares Business P
Slide 7: Recent Fund Raises (2/2)
Recent Fund Raises (2/2) Calculated as per IND-AS Net worth (INR Crore) Debt/Equity (x) # CRAR (%) 813 847 3.4 770 65.8% 62.7% 48.2% 502 2.1 1.8 1.8 35.2% 37.9% 32.8% 25.8% 26.4% Sep-23 Dec-23 Mar-24 Jun-24 Sep-23 Dec-23 Mar-24 Jun-24 Sep-23 Dec-23 Mar-24 Jun-24 Arman (Standalone) Namra #After adjus
Slide 8: Impact of RBI’s New Microfinance Guidelines
Impact of RBI’s New Microfinance Guidelines Annual household income limit raised to INR 3 Lakh • Increased annual household limit from INR 1.25 Lakh to INR 3 Lakh will provide more headroom to NBFC- MFIs to lend to more customers. • This will help microfinance lenders to service consumers from diver
Slide 9: About the Company
About the Company
Slide 10: About Arman Financial Services
About Arman Financial Services About the Company Business Performance Efficient Liability Management • A diversified NBFC focusing on large under-served rural & semi-urban • Consistent rating upgrades backed by strong financial & operating retail markets performance • Upgraded to A- (Stable Outlook)
Slide 11: Journey so Far
Journey so Far 1992 1995 1998 2010 2018 • Company Incorporated • Listing on BSE – • Launched 2W Loans • Launched Microfinance • Raised PE funding • Started bill discounting Issue subscribed business from SAIF Partners & Machine leasing 22x 2017 2014-16 2013 2011 2019 • Launched MSME Loans • Demerged
Slide 12: Geographical Footprint
Geographical Footprint Geographical AUM Mix Number of (Consolidated) Q1FY25 Q1FY24 Branches 7% Microfinance 342 274 7% 2 28% 18 9% MSME 88 64 83 57 12% 2W & Rural 2W 4 4 38 75 9 22% 92 15% Total 434 343 45 Gujarat Rajasthan Others 14 Uttar Pradesh Bihar Madhya Pradesh Maharashtra 1 Number of Branche
Slide 13: Strong Underwriting Measures by Leveraging Digital Transformation
Strong Underwriting Measures by Leveraging Digital Transformation Loan Management Instant Verification Of Key Details • Loan Utilization check • The LOS* & LMS* System facilitates instant • Instant pre-closure and pre-settlement and its verification simulation for the customer to understand • KYC Va
Slide 14: Eminent Board of Directors
Eminent Board of Directors Alok N. Prasad Jayendrabhai B. Patel Aalok J. Patel Chairman Vice Chairman & Managing Director Joint Managing Director • A veteran banker with over 35 years of regulatory, banking and • He has been an entrepreneur for 45 years. He was involved in a • He has 16 years of ban
Slide 15: Competitive Moat
Competitive Moat 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 increasing volumes rather than ticket sizes Competitive Conservative operations fram
Slide 16: Presence in Attractive Retail Lending Segments
Presence in Attractive Retail Lending Segments 16
Slide 17: Product Offerings across Verticals
Product Offerings across Verticals 81%* 15%* 3%* 1%* Microfinance - JLG MSME Loans Two-Wheeler Loans Individual Business Loans Average Ticket Size : INR 47,000 Average Ticket Size: Average Ticket Size: Average Ticket Size: (Cycle 1 & 2 -INR 20k - 60k INR 77,000 INR 72,500 INR 82,500 Cycle 3+ -INR 20
Slide 18: Microfinance Loans
Microfinance Loans (INR Crore) AUM* Disbursement Total Income Profit After Tax Avg. Ticket Size (INR) 2,129 446 143 33 47,000 1,801 43,000 356 120 19 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Q1FY24 Q1FY25 *Includes Individual Business Loans • Disbursement: 100% Cashless • JLG model wi
Slide 19: MSME Loans
MSME Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 383 89 34 77,000 77,000 276 67 24 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Q1FY24 Q1FY25 • Individual enterprise /working capital loans for small rural businesses in low competition • Disbursement: 100% Cashless areas • Cre
Slide 20: 2W and Rural 2W Loans
2W and Rural 2W Loans (INR Crore) AUM Disbursement Total Income Avg. Ticket Size (INR) 82 17 5 72,500 72,500 66 14 4 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Q1FY24 Q1FY25 • Hypothecation (secured) loans given to self-employed /cash-salaried customer in the • Disbursement: 100% Cashless informal se
Slide 21: MSME Process Overview
MSME Process Overview MSME Process Overview Sourcing Underwriting Collections • In-house sourcing team (No DSAs) • Credit bureau check (CRIF & CIBIL) • Team member that does sales also • Physical FI & PD by in house credit handles collections • Feet-on-Street sales team model manager at residence &
Slide 22: Collection Efficiency
Collection Efficiency Microfinance MSME Two-Wheeler Total 95.4% 96.0% 95.1% 97.5% 97.4% 97.2% 95.9% 95.9% 96.1% 95.7% 96.3% 95.5% Apr-24 May-24 Jun-24 Apr-24 May-24 Jun-24 Apr-24 May-24 Jun-24 Apr-24 May-24 Jun-24 Two- Update on Collections Particulars (INR Crore) Microfinance MSME Wheeler Total • C
Slide 23: Efficient Liability Management
Efficient Liability Management
Slide 24: Strong Capitalization with Sufficient Liquidity
Strong Capitalization with Sufficient Liquidity Capital Adequacy Ratio ALM Position (in Months) 62.7% 19 19 19 19 19 17 17 17 16 16 48.2% 37.9% 32.6% 32.8% 29.0% 25.6% 18.7% 31-Mar-22 31-Mar-23 31-Mar-24 30-Jun-24 Q 1FY 24 Q 2FY 24 Q 3FY 24 Q 4FY 24 Q 1FY 25 Arman (Standalone) Namra A v g T e n u re
Slide 25: Borrowing Profile
Borrowing Profile Borrowing Mix (%) Top 5 Lending Partners (INR Crore) 2,161 2,245 2,240 2,261 2,217 Top 5 Lenders % of Borrowings Lender 1 - TL & DA 13.49% 33.9% 32.5% 35.7% Lender 2 - TL & DA 9.82% 41.1% 40.2% Lender 3 - TL, PTC & DA 6.59% 1.4% 1.3% 3.2% Lender 4 - TL 5.06% 19.7% 23.0% 5.1% 4.6% 1
Slide 26: Securitization
Securitization Non-Bank Bank Partners Borrowings Borrowings Lending Partnerships 26 NCDs & ECB
Slide 27: Strong Financial Performance
Strong Financial Performance 27
Slide 28: Q1FY25 Consolidated Profit & Loss Statement
Q1FY25 Consolidated Profit & Loss Statement Particulars (INR Crore) Q1FY25 Q1FY24 YoY % Q4FY24 QoQ% Income from Operations 184.4 149.5 182.9 • As of June 2024, Consolidated AUM stands at ~INR 2,594 Crore, as against Other Income 0.0 0.0 0.1 ~INR 2,143 Crore in June 23, registering strong Y-o-Y growt
Slide 29: Balance Sheet – 30th June 2024
Balance Sheet – 30th June 2024 Particulars (INR Crore) Consolidated Standalone Particulars (INR Crore) Consolidated Standalone ASSETS Jun-24 Mar-24 Jun-24 Mar-24 LIABILITIES & EQUITY Jun-24 Mar-24 Jun-24 Mar-24 Financial Assets Equity Share capital 10.5 10.5 10.5 10.5 Cash and cash equivalents 116.2
Slide 30: Consolidated Business Performance
Consolidated Business Performance (INR Crore) AUM Disbursement Gross Total Income 2,639 2,594 669 183 184 2,437 169 2,304 561 160 2,143 530 537 150 459 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Net Total Income Pre-provision Operating Pr
Slide 31: Consolidated Business Performance
Consolidated Business Performance Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 15.5% 28.7% 25.9% 26.2% 25.1% 25.1% 25.4% 15.2% 14.1% 26.0% 25.4% 25.7% 26.6% 13.4% 13.1% Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Asset Qualit
Slide 32: PAR Movement
PAR Movement PAR 31-90 (%) Movement GNPA (%) 8.3% 7.9% 7.8% 6.9% 6.0% 3.7% 4.4% 4.1% 4.3% 2.4% 2.9% 3.7% 2.8% 2.9% 2.2% 2.0% 4.8% 4.6% Mar-21 Mar-22 Mar-23 Mar-24 Jun-24 4.7% 4.2% 4.3% 4.5% 3.9% NNPA (%) 2.1% 1.9% 2.5% 2.1% 2.3% 1.6% 1.4% 1.3% 1.1% 1.2% 1.1% 0.3% 0.7% 0.5% 0.6% 0.6% 0.5% Mar-21 Mar-
Slide 33: Q1FY25 – Standalone P&L Statement (2W, MSME & LAP)
Q1FY25 – Standalone P&L Statement (2W, MSME & LAP ) Particulars (INR Crore) Q1FY25 Q1FY24 YoY % Q4FY24 QoQ% • Standalone AUM grew by 36.6% Y-o-Y to ~INR 465 Crore as compared to ~INR 343 Crore Income from Operations 42.2 29.4 37.7 • Disbursement of ~INR 102 Crore in Q1FY25, a Other Income 0.3 0.9 -0
Slide 34: Standalone Business Performance
Standalone Business Performance (INR Crore) AUM Disbursement Gross Total Income* 446 465 135 39 391 82 15 34 5 359 79 101 102 31 343 30 4 79 28 69 84 81 14 4 5 66 23 4 17 14 383 120 34 367 30 276 291 312 79 89 26 27 67 67 24 Q1FY24 Q2FY24 Q3FY24 Q4FY24# Q1FY25# Q1FY24 Q2FY24 Q3FY24 Q4FY24# Q1FY25# Q
Slide 35: Q1FY25 - Namra Finance Profit & Loss Statement
Q1FY25 - Namra Finance Profit & Loss Statement • We steadily expanded and deepened our MFI Particulars (INR Crore) Q1 FY25 Q1 FY24 Y-o-Y (%) Q4 FY24 Q-o-Q (%) presence through our wholly owned subsidiary, Namra Finance. This involves Income from Operations 143.1 120.3 147.0 entering new geographies,
Slide 36: Microfinance Business Performance – Namra Finance (1/2)
Microfinance Business Performance – Namra Finance (1/2) (INR Crore) AUM Disbursement Gross Total Income 2,193 2,129 534 147 143 1,945 2,046 136 1,801 446 456 459 120 127 356 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Net Total Income Pre-
Slide 37: Microfinance Business Performance – Namra Finance (2/2)
Microfinance Business Performance – Namra Finance (2/2) Net Interest Margin (%) Cost to Income Ratio (%) Yield (%) 13.3% 13.6% 13.0% 26.2% 24.4% 24.9% 23.8% 23.8% 23.6% 12.0% 12.0% 23.0% 21.9% 21.5% 21.5% Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q1FY24 Q2FY24 Q3FY24 Q4FY
Slide 38: Strong Growth in AUM and Disbursements
Strong Growth in AUM and Disbursements Total AUM (INR Crore) Total Disbursements (INR Crore) 2,639 2,297 14% 3% 14% 1,943 1,767 3% 13% 13% 3% 3% 1,233 1,024 13% 83% 880 860 4% 778 14% 82% 814 16% 4% 685 17% 84% 12% 84% 11% 15% 6% 547 12% 10% 509 453 14% 10% 15% 83% 17% 13% 5% 10% 248 0% 248 3% 82% 1
Slide 39: While Maintaining Cost Efficiency & Asset Quality
While Maintaining Cost Efficiency & Asset Quality Gross and Net Total Income Yield & NIM (%) Asset Quality (INR Crore) Demonetization COVID-19 Demonetization COVID-19 Demonetization COVID-19 662 6.7% 28.7% 28.3% 27.4% 25.5% 26.7% 24.4% 25.2% 21.5% 22.9% 424 396 17.4% 16.5% 16.5% 15.9% 14.0% 14.3% 14
Slide 40: Annexure
Annexure • Gross Interest Income = Interest Income + processing fees / other charges • Net Interest Margins = Net Interest Income / Average AUM (On + Off-Book) • Yields = Gross Interest Income / Avg. AUM (On + Off Off-Book) • Cost-to -Income Ratio = Opex (excl. provisions) / Net Total Income • GNPA
Slide 41: Thank You
Thank You Contact Information Company: Investor Relations Advisors: Strategic Growth Advisors Pvt. Ltd. Arman Financial Services Limited CIN: U74140MH2010PTC204285 CIN: L55910GJ1992PLC018623 Mr. Abhishek Shah Mr. Vivek Modi abhishek.shah@sgapl.net Chief Financial Officer (CFO) +91 9930651660 Email :
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