Spandana Sphoorty Financial Limited · NSE:SPANDANA
Spandana Sphoorty Financial — Q3 FY25 Earnings Presentation
30 slides from Spandana Sphoorty Financial's earnings presentation, Jan 23, 2025
Slide 1: Cover letter to stock exchanges
Ref: SSFL/Stock Exchange/2024-25/134 January 23, 2025 To To BSE Limited, National Stock Exchange of India Limited, Department of Corporate Services Listing Department P. J. Towers, 25th Floor, Exchange Plaza, C-1, Block G Dalal Street, Bandra Kurla Complex, Bandra (E) Mumbai – 400001 Mumbai – 400051
Slide 2: Q3 FY25 Investor Presentation
Invested in Bharat! Spandana Sphoorty Financial Limited Saura Art Q3 FY25 Investor Presentation
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Spandana Sphoorty Financial Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe f
Slide 4: Spandana 2.0 started with a set of objectives
Spandana 2.0 started with a set of objectives Key levers March 2022 December 2024 Achievement Reduce geographic ~57% AUM ~50% AUM concentration in top 4 contribution of top 4 57% contribution of top 4 50% states by expanding in states states North Project Parivartan 0% 14% (covering ~55% Only monthl
Slide 5: In the interim – Industry experienced challenges
In the interim – Industry experienced challenges Factor Issues Spandana’s Q3FY25 experience Industry wide attrition*, especially among Loan Officers (~71%) People focused initiatives taken in light of Attrition and Branch managers (~36%), continues to remain high. attrition. Slight improvement visib
Slide 6: Concentration risk addressed by increasing presence in North; industry challenges
While Spandana addressed concentration risk by increasing its presence in North - Industry challenges are more pronounced in this geography Industry 31 – 180 book* Spandana’s region wise AUM share (%) 8.6% 28% 26% 27% 26% 29% 27% 7.4% 7.1% 16% 22% 25% 21% 23% 30% 4.4% 5.7% Mar-23 Mar-24 Dec-24 3.7%
Slide 7: Spandana 2.0 - will continue the prudent approach on lending
Spandana 2.0 - will continue the prudent approach on lending Lower ticket sizes across cycles No loan beyond 24 months Cycle wise maximum ticket size Tenor Distribution # Cycle 1 42,000 24% 72% Cycle 2 65,000 24m 76% Cycle 3 72,000 28% 12m to 18m Shorter tenures Low ticket size* >=Cycle 4 80,000 Wee
Slide 8: December 2024 - green shoots visible on improvement in collection efficiency
December 2024 - green shoots visible on improvement in collection efficiency Current book Net CE (%) 97.8% Current book Net 96.7% 96.4% Signs of trend reversal seen in current book Net Collection efficiency Collection Efficiency 95.9% Sep-24 Oct-24 Nov-24 Dec-24 Branch staff attrition People focused
Slide 9: Strengthening the business fundamentals
Strengthening the business fundamentals • Good traction on recovery from GNPA/write off bucket. Q3 equal to Recovery (₹ Cr) H1 of FY25. Expecting significant recoveries in next 3-4 quarters 21 • 600 Customer Retention Associate deployed for recovery from 11 12 Recovery GNPA and written-off portfolio
Slide 10: Q3FY25 & 9MFY25 Results
Q3FY25 & 9MFY25 Results 9
Slide 11: External challenges continue to impact operations
External challenges continue to impact operations AUM declined by 14% YoY. Deliberate disbursement slowdown to drive portfolio quality & center discipline Q3 FY25 Q3 FY24 YoY (%) Q2 FY25 QoQ (%) 9MFY25 9MFY24 YoY (%) Disbursement (₹ Cr) 1,443 2,543 (43)% 1,514 (5)% 5,240 6,719 (22)% AUM (₹ Cr) 8,936
Slide 12: Weekly branches account for ~19% of Q3FY25 disbursement
Weekly branches account for ~19% of Q3FY25 disbursement No. of customers (in L) Branch count 1,723 1,774 2,000 33.2 34.1 33.0 1,642 1,665 1,529 1,800 29.6 29.6 442 449 1,600 375 429 434 1,400 1,200 1,000 800 1,154 1,213 1,231 1,281 1,325 600 400 200 0 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Dec-23 Mar-24
Slide 13: Weekly branches account for ~19% of Q3FY25 disbursement
Weekly branches account for ~19% of Q3FY25 disbursement Weekly branch Weekly Branch count Disbursement share (%) 24% 429 434 442 449 21% 22% 375 19% 16% Q3 Q4 Q1 Q2 Q3 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 FY24 FY24 FY25 FY25 FY25 Weekly branches Weekly branches AUM (₹ Cr) Net Collection Efficiency (%)
Slide 14: AUM at ₹8,936 Cr
AUM at ₹8,936 Cr Top 4 States contribute ~50% of AUM vs. 57% in March 2022 AUM (₹ Cr) Disbursement (₹ Cr) QoQ YoY YoY (5)% (43)% (22)% 11,973 6,719 11,723 10,404 10,537 2,543 5,240 8,936 1,514 1,443 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Q2FY25 Q3FY25 Q3FY24 9MFY25 9MFY24 AUM Concentration of top 4 stat
Slide 15: Comfortable liquidity maintained
Comfortable liquidity maintained Incremental borrowing (in ₹ Cr) Cost of borrowing QoQ YoY YoY 12.3% 12.2% (45)% (62)% (43)% 11.8% 11.7% 11.7% 11.8% 11.7% 7,013 11.6% 11.4% 2,279 4,010 10.8% 1,584 872 Q3 Q4 Q1 Q2 Q3 Q2 Q3 Q3 9M 9M FY24 FY24 FY25 FY25 FY25 FY25 FY25 FY24 FY25 FY24 Cost of Borrowing M
Slide 16: PCR maintained at 80%
PCR maintained at 80% 31-Dec-24 30-Sep-24 Asset Classification Loans ECL Loans ECL % of Loans % of Loans Outstanding Provision Coverage Outstanding Provision Coverage Outstanding Outstanding (₹ Cr) (₹ Cr) (₹ Cr) (₹ Cr) Stage 1 7,225 87.51% 92 1.27% 8,730 88.98% 78 0.89% Stage 2 631 7.65% 290 46.01%
Slide 17: Q3FY25 PPOP at ₹78 Cr impacted by lower AUM
Q3FY25 PPOP at ₹78 Cr impacted by lower AUM (deliberate slowing down the disbursement), higher opex & reversals Income* Net Interest Income In ₹ Cr QoQ YoY YoY QoQ YoY YoY (19)% (13)% +11% (22)% (14)% +13% 2,016 1,824 1,031 911 707 657 341 573 309 265 Q2 Q3 Q3 9M 9M Q2 Q3 Q3 9M 9M FY25 FY25 FY24 FY2
Slide 18: Yield and NIM impacted by decline in AUM & higher delinquencies
Yield and NIM impacted by decline in AUM & higher delinquencies Cost of borrowing at 12.2% in Q3FY25 Yield (%) Cost of Borrowing^ (%) QoQ YoY YoY QoQ YoY YoY (128) bps (291) bps (138) bps 41 bps (8) bps (43) bps 24.1% 24.2% 12.0% 12.4% 22.4% 22.8% 12.2% 12.3% 21.1% 11.8% Q2 Q3 Q3 9M 9M Q2 Q3 Q3 9M 9
Slide 19: Elevated Cost-to-income due to higher opex & lower income
Elevated Cost-to-income due to higher opex & lower income Decline in RoA due to high impairment cost & deliberate slowdown in disbursement Cost-to-income^ (%) ROE (%) QoQ YoY YoY QoQ YoY YoY 2,369 bps 3,482 bps 1,268 bps (2,877) bps (6,715) bps (3,755) bps 77.7% 55.1% 14.7% 15.0% 54.1% 42.5% 42.9% -
Slide 20: Consolidated Net-worth of ₹3,082 Cr, CRAR at 35.7%
Consolidated Net-worth of ₹3,082 Cr, CRAR at 35.7% Gearing at 2.2x (consolidated) SSFL Standalone Net-worth & CRAR 4000 2.7 3,707 35.9% 35.7% 36.0% 3,645 3,497 3,507 2.6 5000 32.0% 32.7% 35.00% 3500 2.6 3,082 2.5 30.00% 3,614 4000 3,556 3000 2.4 3,414 3,426 25.00% 3,047 2.4 3000 2500 2.3 20.00% 2.3
Slide 21: Consolidated Income Statement
Consolidated Income Statement Particulars (₹ Cr) Q3 FY25 Q2 FY25 Q3 FY24 QoQ YoY 9MFY25 9MFY24 YoY Revenue from Operations Interest income on loans 494 599 559 (18)% (12)% 1,777 1,588 12% Net gain on fair value changes 49 75 56 (35)% (13)% 137 129 6% Other Income 12 12 11 (-)% 10% 37 31 18% Total in
Slide 22: Consolidated Balance Sheet
Consolidated Balance Sheet Assets (₹ Cr) Dec 31, 2024 Mar 31, 2024 Liabilities & Equity (₹ Cr) Dec 31, 2024 Mar 31, 2024 Financial Liabilities Financial Assets Debt Securities 2,737 4,064 Cash and bank balances 1,756 1,894 Borrowings (Other than Debt Securities) 4,009 5,340 Loan Portfolio 7,621 11,0
Slide 23: Credit Rating
Credit Rating Spandana Sphoorty Financial Ltd Rating / Outlook Rating / Outlook Rating Agency Rating Instrument Change (Current) (30-Sep-24) ICRA Bank Facilities / NCD’s A+ / Negative A+ / Stable Outlook change India Ratings Bank Facilities / NCD’s A+ / Negative A+ / Stable Outlook change Bank Facil
Slide 24: Annexure
Annexure 23
Slide 25: Positive ALM across maturity buckets
Positive ALM across maturity buckets Positive ALM (₹ Cr)* Maturity profile* (in months) 3,047 11.7 2,503 10.3 2,055 8.2 8.6 1,973 2,010 1,699 1,550 1,134 564 552 568 551 411 286 79 61 upto 1m 1m to 2m 2m to 3m 3m to 6m 6m to 12m 1Y to 3Y 3Y to 5Y Over 5Y Dec-24 Sep-24 Assets Liabilites Avg. residual
Slide 26: Well diversified presence
Well diversified presence AUM concentration* - ~49% from top 4 States District level concentration* % of AUM Largest 1.7% State Dec-24 Mar-24 Mar-23 Top 5 7.9% Odisha 13% 14% 15% Madhya Pradesh 13% 13% 17% Top 10 13.4% Bihar 12% 12% 8% Andhra Pradesh 11% 10% 11% Top 20 22.1% 4% 6% Karnataka 10% 10%
Slide 27: Metrics over the years
Metrics over the years AUM (₹ Cr) Disbursement (₹ Cr) GNPA (%) & NNPA (%) 10,688 18.7% 11,973 8,004 8,125 8,157 8,511 6,829 6,426 6,581 10.5% 3,373 3.1% 2.1% 1.4% 1.5% 0.4%0.1% 0.6% 0.3% FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 GNPA (%) NNPA (%) Net Interest Income
Slide 28: Accelerated growth delivered over last year
Accelerated growth delivered over last year Customers (in L) Employees Customers / Branch & LO * 33.2 14,243 2,541 3000 850 2,324 750 25.7 24.5 2500 2,097 1,914 2,021 23.5 22.6^ 10,016 2000 650 550 8,224 8,644 8,763 590 450 1500 350 432 382 343 344 1000 250 150 500 50 0 -50 FY20 FY21 FY22 FY23 FY24
Slide 29: Glossary
Glossary Key Ratio Abbreviation Definition 1 Portfolio Yield Yield Interest income divided by average monthly loan outstanding 2 Cost of borrowing COB Interest expenses divided by average monthly borrowing outstanding 3 Marginal COB (XIRR) Multiplication of borrowing availed during the period and co
Slide 30: Thank you!
Thank you! Investor Relations Spandana Sphoorty Financial Ltd Investor.relations@spandanasphoorty.com Spandana Sphoorty Financial Limited Strategic Growth Advisors Pvt. Ltd Abhishek Shah +91 99306 51660
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