Sbfc Finance Limited · NSE:SBFC
Sbfc Finance — Q3 FY2024 Earnings Presentation
34 slides from Sbfc Finance's earnings presentation, Jan 25, 2024
Slide 1: Exchange filing cover letter for investor presentation
25th January, 2024 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(s), Sub: In
Slide 2: Investor Presentation Q3 FY 2024
Investor Presentation Q3 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 9M Performance
SBFC – FY24 9M Performance Size and Growth Distribution Granular Book Asset Quality Liability Profile Profitability 6,266 % 177 98.4% 2.38% 2,417 164 AUM GNPA 9M FY24 PAT # Branches % Secured Tangible Net worth YoY +40% YoY -28 bps YoY +47% % 5,246 3,535 9.70* | 0.90* 1.36% CRAR 41.5% 3.97% Secured
Slide 5: Executive Summary – Q3 FY24
Executive Summary – Q3 FY24 Asset Under Management Disbursement1 Branches 6266 713 177 +40% +8% +21% +2% +40 +6 Gross NPA Yield / Spread Opex to AAUM 2.38% 17.2% / 7.8% 5.48% -28 bps +1 bp +114 / +55 bps +34 / +32 bps +18 bps -4 bps PAT RoAAUM RoATE 64 4.31% 10.77% +63% +22% +57 bps +47 bps -50 bps
Slide 6: About the company
About the company Management and Shareholder Business Credit & Risk Financials 5
Slide 7: Executive Summary
Executive Summary 177 branches Team: Experienced, cycle-tested, professional management with strong corporate 145 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 and BSE Our Journey 1,00,000 customers Credit rating 150 Branches upgraded to ‘AA -’1 150 cr PAT 6266 Credit rating upgraded to ‘A +’ 4943 50,000 customers 100 AUM of INR Branches 3192 Investment by 1000cr Clermont and 164 Arpwood group 150 2221 1648 65 1156 778 85 36 25 3 2018
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 11.62% Clermont Group 58.26% 11.89% Arpwood Group 5.48% 10.21% Other Major Shareholders SBI Mutual Fund 7.25% 63.74% 2.54% Amansa 4.14% Malabar Funds 4.14% Steadview Capital 1.87% 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 : 40% QoQ : 8% 6266 CAGR: 49% 5803 2% 2% 15% 4943 15% 3% 4475 18% 5% 19% 3192 7% 2221 20% 83% 83% 10% 79% 25% 76% 73% 65% Mar-21 Mar-22 Mar-23 Q3 FY 23 Q2 FY 24 Q3 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 ATS in ₹ Lakhs Disbursement Value Disbursement Volume YoY: 50% YoY: 21% YoY: 26% QoQ: 10% QoQ: 2% QoQ: 8% 7605 5246 701 713 7065 4787 6029 590 3491 9.79 9.92 9.38 Q3 FY 23 Q2 FY 24 Q3 FY 24 Q3 FY 23 Q2 FY 24 Q3 FY 24 Q3 FY 23 Q2 FY 2
Slide 17: Business Momentum – Co-origination
Business Momentum Co-origination – Validates our profitable origination Co-origination Disbursement (₹ Cr) Co-origination AUM (₹ Cr) %1 23% 23% 19% 14% 18% 18% 160 962 137 135 843 503 Q3 FY 23 Q2 FY 24 Q3 FY 24 Q3 FY 23 Q2 FY 24 Q3 FY 24 1Percentage is on Total Secured MSME Loans 16
Slide 18: Business Momentum – No concentration risk
Business Momentum No concentration risk & well distributed growth Present in 16 states, 2 UTs covering 145 cities via 177 branches Driven by steady rise in AUM per branch # Branches 46 28 103 177 <12 months >12 & <36 months >36 months 4 1 3 10 50 45 ₹ Cr 3 45 43 43 25 40 37 37 6 11 7 35 30 27 86 13
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
Credit Underwriting Quality borrowers with credit score above 700 Over 84% AUM from customers with CIBIL >7001,2 Granular loan book with high quality collateral1 0/-1 7.4% 7.7% 7.9% 4.3% 2.1% 1.3% <650 7.0% 94% 8.5% 7.7% AUM secured by self occupied 42.6% > 650 & < 700 LTV residential / commercial p
Slide 22: Credit Indicators
Credit Indicators Gross NPA %1 Net NPA %2 2.66% 1.71% 1.55% 2.54% 1.33% 1.36% 2.37% 2.38% PCR 36.1% 39.6% 44.6% 43.5% Q3 FY 22-23 Q1 FY 23-24 Q2 FY 23-24 Q3 FY 23-24 Q3 FY 22-23 Q1 FY 23-24 Q2 FY 23-24 Q3 FY 23-24 1+ DPD %3 Collections Efficiency %4 5.49% 5.51% 5.27% 5.61% 97.75% 97.17% 97.49% 97.47
Slide 23: ECL Provisions Summary
ECL Provisions Summary As on December 31, 2023 Stage 1 Stage 2 Stage 3 Total Gross Loans Outstanding 5,151 241 132 5,524 ECL Provision 32 13 57 102 Net Loans Outstanding 5,119 229 74 5,422 ECL Provision % 0.62% 5.21% 43.46% 1.84% As on September 30, 2023 Stage 1 Stage 2 Stage 3 Total Gross Loans Out
Slide 24: Collections Approach
Rework icons Collections Approach In-house, on-ground collections teams – 96% 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) YoY : 40% QoQ : 8% 17.18% 6266 16.84% 7.47% 7.79% 5803 7.24% 4475 16.04% Q3 FY 23 Q2 FY 24 Q3 FY 24 Q3 FY 23 Q2 FY 24 Q3 FY 24 Q3 FY 23 Q2 FY 24 Q3 FY 24 Opex to AAUM Gross NPA RoAAUM 11.27% 10.40%* 10.77% RoATE 4.3% 5.52% 5.48% 2
Slide 27: Financial Performance – Trends in KPIs 9M
Financial Performance Trends in KPIs – 9M AUM Yield Spread (₹cr) YoY : 40% 16.88% 7.44% 7.47% 6266 4475 16.88% 15.97% 7.47% 9M FY 23 9M FY 24 9M FY 23 9M FY 24 9M FY 23 9M FY 24 Opex to AAUM Gross NPA RoAAUM 10.82% 10.96%* RoATE 3.97% 5.84% 2.66% 3.77% 5.48% 2.38% 9M FY 23 9M FY 24 9M FY 23 9M FY 24
Slide 28: Sources of Borrowing
Sources of Borrowing Diversified Borrowing Mix AA– (Stable) A+ (Stable) 1.0% 10.5% 1.1% 17.4% 1.0% 7.9% 30.5% 32.0% Lenders to the Company 18.8% Public Sector Banks 5.2% 0.4% 13.4% 43.8% 6.4% 10.6% NCD Private Sector Bank NCD Private Sector Bank Financial Institutions Public Sector Banks Financial I
Slide 29: ALM – December 2023
ALM – December 2023 Surplus 715 298 Upto 3 months 1,013 1,037 727 Upto 6 months 1,765 1,731 Upto 1 Year 815 2,546 3,601 Upto 3 Years 543 4,144 3,965 Upto 5 Years 2,421 6,386 6,847 5+ Years 6,847 Liablilities Asset All figures in ₹ Cr 28
Slide 30: Summary Financial Statements – P&L for Q3 FY24
Summary Financial Statements – Profit & Loss Account for Q3 FY24 Quarter Ended Growth (%) Particulars December September December H1 FY24 2023 2023 2022 Q-o-Q Y-o-Y Performance Interest Income on Loans 225 205 155 9.4% 45.1% Interest Income other than on Loans 12 15 15 Fee & Other Income 27 27 25 2.
Slide 31: Summary Financial Statements – P&L for 9M FY24
Summary Financial Statements – Profit & Loss Account for 9M FY24 Nine Month Ended Growth (%) Annual Particulars H1 FY24 December 2023 December 2022 Y-o-Y March 2023 Performance Interest Income on Loans 618 422 46.4% 595 Interest Income other than on Loans 42 43 59 Fee & Other Income 80 67 19.5% 86 T
Slide 32: ROE Tree
ROE Tree Ratios 9MFY24 9MFY23 FY 23 FY 22 Interest Income on Loans/ Average Loan Book 16.9% 16.0% 16.1% 15.5% Fee & Other Income/ Average AUM 1.9% 2.3% 2.2% 2.2% Finance costs/ Average Borrowings 9.5% 8.6% 8.7% 8.1% Spread 7.5% 7.4% 7.5% 7.5% Net Interest Margin/ Average AUM 9.7% 9.4% 9.5% 9.7% Oper
Slide 33: Balance Sheet
Balance Sheet Quarter Ended Annual Particulars December September December March 2023 2023 2022 2023 Assets Cash and Bank Balances 434 714 584 400 Derivative Instrument - 4 - - Receivables 20 12 10 11 Loan Assets 5,422 5,060 4,045 4,415 Investments 471 476 362 607 Other financial assets 7 8 4 4 Curr
Slide 34: THANK YOU!
THANK YOU! 33 PRIVATE & CONFIDENTIAL