Vakrangee Limited · NSE:VAKRANGEE
Vakrangee — H1 FY2015-16 Earnings Presentation
59 slides from Vakrangee's earnings presentation, Nov 7, 2015
Slide 1: We Provide the Last Mile Connectivity
We Provide the Last Mile Connectivity Vakrangee Limited Q2 & H1 FY2015-16 Results Update - Investor Presentation November 7, 2015 1
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Vakrangee Limited (“Vakrangee” or “VL” or the “Company”) solely for your information and for your use and may not be taken away, reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organ
Slide 3: Table of Contents
Table of Contents Our Vision 2020 04 Q2 FY2015-16 Results Update 07 Dividend Pay-Out Policy 10 Current Rollout Status 12 Financial Overview & Shareholding Structure 16 Company Overview 19 Vakrangee Kendra Banking Business 23 E- Commerce 32 E-Commerce – Update on Amazon Tie Up 33
Slide 4: Our Vision 2020
Our Vision 2020 • We are a Technology-driven company, focussing on creating India’s largest network of last-mile retail points-of- sale. • Our aim is to potentially enable every Indian to seamlessly benefit from financial inclusion, Government programmes and a wider access to basic goods and service
Slide 5: Our Vision 2020 – Expansion Plan
Our Vision 2020 – Expansion Plan FY2016 FY2017 FY2018 FY2019 FY2020 Rural 15,000 25,000 35,000 45,000 50,000 Kendras Semi Urban 3,500 7,000 10,000 13,500 17,000 Kendras Urban 1,500 3,000 5,000 6,500 8,000 Kendras Total 20,000 35,000 50,000 65,000 75,000 Vakrangee Limited 5
Slide 6: Q2 FY2015-16 Results Update
Q2Q2 FY2015-16 FY2015-16 Results Results Update Update Vakrangee Limited 6
Slide 7: Q2 FY2015-16 Results Highlights
Q2 FY2015- 16 Results Highlights In Rs Mn Consolidated REVENUES EBITDA & EBITDA Margin PAT & PAT Margin 7,876.2 26.2% 26.1% 12.2% 6,982.8 11.5% 2059.0 961.7 1832.1 800.7 12.8% 12.4% 20.1% Q2FY2014-15 Q2FY2015-16 Q2FY2014-15 Q2FY2015-16 Q2FY2014-15 Q2FY2015-16 EBITDA (Rs. Mn) EBITDA Margin % PAT (Rs.
Slide 8: Q2 FY2015-16 Results – Segmental Analysis (Standalone)
Q2 FY2015-16 Results – Segmental Analysis (Standalone) Q2 FY2015-16 Q2 FY2014-15 H1 2015-16 H1 2014-15 Particulars YoY YoY (Rs Mn) % of % of % % of % of % Total Total Total Total Total Revenues 7838.6 100 6978.5 100 12.3% 14848.2 100 13787.1 100 7.7% Vakrangee Kendra 3884.5 49.6 2964.7 42.5 31.0% 73
Slide 9: Consolidated Financial Statements
Consolidated Financial Statements Key Profit & Loss Statement Items Particulars (Rs. Mn.) Q2 FY2015-16 Q2 FY2014-15 YoY % H1 FY2015-16 H1 FY2014-15 YoY % FY2014-15 Total Income from Operations 7,876.2 6,982.8 12.8% 14,919.1 13,795.2 8.2% 27,804.8 Total Expenses (Excluding 5,834.6 5,174.4 12.8% 10,99
Slide 10: Dividend Pay-Out Policy
Dividend Pay-Out Policy DIVIDEND PAY-OUT POLICY • FOR THE CURRENT FINANCIAL YEAR FY 2015-16, OUR FOCUS IS TO RETIRE DEBT. WE INTEND TO BECOME LONG TERM DEBT FREE BY MARCH 2016. THEREFORE, FOR THE CURRENT YEAR WE WOULD ADHERE TO A DIVIDEND PAY-OUT IN THE RANGE OF 8%-10% OF PROFITS AFTER TAX (PAT) ON
Slide 11: Current Rollout Status
Current Rollout Status Vakrangee Limited
Slide 12: Vakrangee Kendra: Rollout Status as on September 30, 2015
Vakrangee Kendra: Rollout Status as on September 30, 2015 Rural Urban States Total 1398 Number of Branches are Currently under Go- Branches Branches Live Stage Rajasthan 7863 1458 9321 Maharashtra 3147 301 3448 RURAL BRANCHES Uttar Pradesh 2390 342 2732 14,289 Gujarat 264 0 264 11,280 Madhya Pradesh
Slide 13: Strong Focus from Financial Inclusion to Financial Security
Vakrangee Kendra: Strong Focus from Financial Inclusion to Financial Security Strong Ramp-up of Urban Branches Quarter Urban Ending Branches New Initiatives to promote Financial Security Mar-14 15 Sep-14 478 Mar-15 1,288 Mar/14 Sep/14 Mar/15 Sep/15 Sep-15 2,217 Financial Insurance Push to the bottom
Slide 14: Urban Branches in Mumbai
Vakrangee Kendra: Urban Branches in Mumbai 54 BRANCHES UP & RUNNING ACROSS MUMBAI Vakrangee Limited 14
Slide 15: Financial Overview & Shareholding Structure
Financial Overview & Shareholding Structure Vakrangee Limited
Slide 16: Financial Overview & Shareholding Structure
Financial Overview & Shareholding Structure Last 3 Year Financials As on 30.10.15 (BSE) Market cap (Rs. Mn) 69108.30 Price (Rs.) 130.60 No. of shares outstanding (Mn) 529.16 Face Value (Rs.) 1.00 52 wk High-Low (Rs.) 172.40/86.55 • Vakrangee has been classified in the Specialty Retail Shareholding P
Slide 17: Key Shareholders of Vakrangee Limited as on September 30, 2015
Key Shareholders of Vakrangee Limited as on September 30, 2015 Sr. No Category Name Percentage Life Insurance Corporation of India (LIC) 6.74% Other Insurance Companies 0.69% 1. Domestic Financial Institutions (The New India Assurance Company Limited, General Insurance Corporation of India, The Orie
Slide 18: Company Overview
Company Overview Vakrangee Limited 18
Slide 19: Business Evolution & Future Transformation
Business Evolution & Future Transformation BUSINESS EVOLUTION (E-GOVERNANCE) BUSINESS TRANSFORMATION (VAKRANGEE KENDRA) 1990 Company Incorporation 2013 Financial Inclusion Project – MoF & RBI 1993 Computerisation of Central Election Commission 2005 MCA 21 Project - Ministry of Corporate Affairs 2014
Slide 20: Our Businesses
Our Businesses E-GOVERNANCE VAKRANGEE KENDRA Systems Integrator & End-to-End Banking (Business Correspondent), Insurance, Services Provider E-Governance, E-Commerce & ATM (WLA) • More than 20 years of consistent • Setup & manage 75,000 Vakrangee Kendra Outlets and covering the presence in 100% Pin e
Slide 21: Business Transformation – Unique Opportunity, Expansive Growth Potential
Business Transformation – Unique Opportunity, Expansive Growth Potential UNIQUE UNIQUE OPPORTUNITIES CAPABILITIES • Robust Technology - seamless real-time VSAT • Financial Inclusion - i) underpenetrated banking access with only 35.2% bank accounts per connectivity (transaction time < 45 sec) and bac
Slide 22: Vakrangee Kendra – Banking Business
Vakrangee Kendra – Business Vakrangee Limited 22
Slide 23: Financial Inclusion Opportunity: India is Still Largely Under-Banked
Financial Inclusion Opportunity: India is Still Largely Under-Banked SIGNIFICANT UNDER-PENETRATION OF FINANCIAL STRONG GOVERNMENT FOCUS ON FINANCIAL INCLUSION IN INDIA SERVICES IN INDIA • India is still largely under-banked, with only • The current government has taken cognizance of the 35.2% of pop
Slide 24: Vakrangee Kendra: Scope of Services
Vakrangee Kendra: Scope of Services Technology Intensive Retail Distribution Platform for last mile touch points delivering services across Banking, Insurance, e-Governance, e-Commerce and ATM services to domains on a real-time basis to potential 250 mn customers across underserved rural and urban I
Slide 25: Vakrangee Kendra: BC Agreements with Banks
Vakrangee Kendra: BC Agreements with Banks National BC Agreements Common BC Agreements Sr No Bank Tie-Ups Sr No Bank Tie-Ups 1 Bank of Baroda 2 Bank of India 1 Bank of India 3 Baroda Rajasthan Gramin Bank 4 Indian Bank 2 Punjab National Bank 5 Indian Overseas Bank 6 Jaipur The Gramin Bank 3 Union Ba
Slide 26: Vakrangee Kendra: Key Business Alliances
Vakrangee Kendra: Key Business Alliances Banking E-Governance INSURANCE E-COMMERCE Vakrangee Limited 26
Slide 27: Vakrangee Kendra: Business Model
Vakrangee Kendra: Business Model EVOLVED BC MODEL BENEFITS • All the Vakrangee Kendras operate on FRANCHISEE MODEL. Exclusive Brick & Mortar BC per Sales • Franchisee manages day-to-day operations. Service Area(SSA) • All operational costs are borne by the Franchisee. OPERATING Real-time & Interoper
Slide 28: Vakrangee Kendra: Technology Setup
Vakrangee Kendra: Technology Setup Ring Fenced Banking Bank CBS Bank Accounts E-Commerce opening Partner Systems Application Form Cash Withdrawal/ Deposit Bank FI Servers Application Form E-Governance Cheque Book Partner Systems V-SAT Signature Bank Customer PTS Note: Vakrangee PTS – Pass Through Se
Slide 29: Banking Transaction – Process Flow
Vakrangee Kendra: Banking Transaction – Process Flow Transaction flow for AEPS balance enquiry/cash deposit/withdrawal OFF US: Interoperable - Vakrangee Kendra - Bank 1, Customer - Bank 2 ON US: Vakrangee Kendra - Bank 1, Customer - Bank 1 UID Authentication Bank 2 Bank 1 UID Authentication System C
Slide 30: Risk-Free Banking by Pre-Paid Deposit in the Settlement Account
Vakrangee Kendra: Risk-Free Banking by Pre-Paid Deposit in the Settlement Account REAL-TIME SETTLEMENT WITHOUT ANY RECONCILIATION ERROR RISK AND CASH MISAPPROPRIATION RISK • Each Vakrangee Kendra Franchisee is required to maintain a current settlement account with the parent bank. • This current set
Slide 31: Vakrangee Kendra – E-Commerce
Vakrangee Kendra – E-Commerce Vakrangee Limited 31
Slide 32: E-Commerce Opportunity: India to be the fastest growing Market
E-Commerce Opportunity: India to be the fastest growing Market E-COMMERCE PENETRATION IN INDIA as % of total population • India, has low internet penetration of 17% of the total population in comparison to 46% in China and more than 80% in Japan and US • The adoption of E-Commerce is directly tied t
Slide 33: E-Commerce: Amazon India Tie-up
E-Commerce: Amazon India Tie-up MARKET SHARE AMONG E-COMMERCE SPACE • Amazon has acquired 15% market share within 2 years Market Share after starting its ecommerce operations in India (June 2013) • Amazon India had 23.6 million unique visitors in May, 9% edging past Flipkart narrowly. Flipkart saw 2
Slide 34: Amazon in Vakrangee Kendra
Amazon in Vakrangee Kendra Vakrangee Limited 34
Slide 35: Amazon in Vakrangee Kendra
Amazon in Vakrangee Kendra Govandi, Mumbai, Maharashtra Vakrangee Limited 35
Slide 36: Amazon in Vakrangee Kendra
Amazon in Vakrangee Kendra Bhandup, Mumbai, Maharashtra Vakrangee Limited 36
Slide 37: Vakrangee Kendra – White Label ATM
Vakrangee Kendra – White Label ATM Vakrangee Limited 37
Slide 38: ATM Opportunity: India has One of the Lowest ATM Penetration
ATM Opportunity: India has One of the Lowest ATM Penetration ATM PENETRATION IN INDIA: ONE OF THE LOWEST • There is huge opportunity for ATM growth through the white label model. ATM per Mn Population • As on Feb 2015, India had ~ 190,000 ATMs. It is expected to cross 350,000 ATMs by 2017 in India.
Slide 39: Efficient Customer Traffic Management with Co-located WLA
Efficient Customer Traffic Management with Co-located WLA FINANCIAL INCLUSION IS A MAJOR PROBLEM EVEN IN URBAN INDIA • Around 32% of urban households do not have formal banking access. • According to the 2011 study by Analysys Mason, a global think tank, the total transaction value of domestic remit
Slide 40: White Label ATM – Comparative Analysis
Vakrangee Kendra: White Label ATM – Comparative Analysis COMPETITIVE ADVANTAGES ATM OPERATING COSTS PEERS VAKRANGEE URBAN BRANCH + ATM MODEL Rent Expense COST SYNERGIES • No requirement of security guard as the ATM Civil Work & Interiors is located inside the urban BC branch • Sharing of Civil Work,
Slide 41: Well Established Last Mile Infrastructure
Vakrangee Kendra: Well Established Last Mile Infrastructure Independent Project Management Audit Corporate PMO Head Quarters State PMO State Office Division Office 1 Division Office 2 Division Office N District Office 1 District Office 2 District Office N Block Office 1 Block Office 2 Block Office N
Slide 42: E-Governance Projects
E-Governance Projects Vakrangee Limited
Slide 43: E-Governance Projects
E-Governance Projects Vakrangee undertakes only Mission Mode Projects under the National E-Governance Plan (NEGP) which continue to be implemented regardless of the changing political parties and bureaucrats. There is strict compliance in the NEGP project tendering process, which is governed by the
Slide 44: Directors & Leadership Team
Directors & Leadership Team Vakrangee Limited
Slide 45: Independent / Nominee Directors on the Board
Independent / Nominee Directors on the Board Strong Board of Directors RAMESH M. JOSHI • Has about 40 years of business experience in the banking industry. Non Executive • Has worked with RBI for over 3 decades and a former ED of SEBI Independent • Holds a Bachelor’s degree in Arts from the Universi
Slide 46: Leadership Team
Leadership Team STRONG MANAGEMENT TEAM IN PLACE TO DRIVE NEXT PHASE OF GROWTH ACROSS ALL BUSINESSES • Has about 25 years of business experience. Main functions and areas of responsibilities in the Company include policy formulation DINESH and decision making. NANDWANA • Has received a memento from t
Slide 47: Annexure
Vakrangee Annexure
Slide 48: Financial Inclusion
Financial Inclusion Evolution of Financial Inclusion Models in India 2004 RBI sets up Khan Commission to look into financial Mobile BC Fixed BC inclusion Brick & Motor Bank branch opened in each 2005 RBI introduces “No Frill” accounts concept Gram Panchayat by BC BCs visited villages periodi
Slide 49: Financial Inclusion – RBI's Recent Initiative
Financial Inclusion RBI’s Recent Initiative Uttar Pradesh North Eastern States SREI SAHAJ - @0.28% RFP cancelled (Part 1) & FINO -@ J&K 0.35% (Part 2) HIMACHAL Bihar PRADESH FINO - @0.05% (Part 1) Rajasthan and Delhi PUNJAB UTTARAKHAND &@0.11% (Part 2) Vakrangee - @ 0.37% HARYANA ARUNACHAL PRADESH W
Slide 50: Franchisee On-Boarding Process
Vakrangee Kendra: Franchisee On-Boarding Process 3 - 6 MONTHS Compliance Exams to be cleared and Vakrangee On-boarding Franchisee On-boarding Go Live Franchisee background check - • Indian Institute of Banking & Finance (IIBF – For Financial • Campaigning to • Dedicated Settlement • Deployment of IT
Slide 51: Awards and Certifications
Awards and Certifications Awards and Accolades Certifications • Vakrangee has been features in 11 Indian companies, up from an all-time low of eight last year by Forbes Asia’s Best Under a Billion list for 2015 • MSCI ESG Research Inc. has scored Vakrangee 10 out of 10 for the research conducted for
Slide 52: Visit of Ambassador & ED of USAID
Visit of Ambassador & ED of USAID (US Agency for International Development, Washington) Ms. Ann Mei Chang, ED & Mr. Jonathan S. Addleton, MD, USAID visited Vakrangee Kendra in Andheri (E), Mumbai along Mr. Rahul Dev Pal – CEO (Banking) and Mr. Rajeev Ranjan, CEO (E-Governance). Vakrangee Limited 52
Slide 53: Vakrangee Kendra and ATM
Vakrangee Kendra and ATM Vakrangee Kendra in Kurla, Mumbai Vakrangee Kendra in Andheri East, Mumbai Vakrangee Kendra in Malad, Mumbai Vakrangee Kendra in Khar, Mumbai Vakrangee Limited 53
Slide 54: Vakrangee Kendra and ATM
Vakrangee Kendra and ATM Vakrangee Kendra in Goregaon (E), Mumbai Vakrangee Kendra in Ghatkopar (W), Mumbai Vakrangee Kendra in Cotton Green, Mumbai Vakrangee Kendra in Govandi, Mumbai Vakrangee Limited 54
Slide 55: Vakrangee Kendra and ATM
Vakrangee Kendra and ATM Vakrangee Kendra in Ghatkopar (E), Mumbai Vakrangee Kendra in JVLR Jogeshwari (E), Mumbai Vakrangee Kendra in Asalpha, Ghatkopar (W), Mumbai Vakrangee Kendra in Bhayander (W), Mumbai Vakrangee Limited 55
Slide 56: Vakrangee Kendra – Urban Kendra, Rural Kendra
Vakrangee Kendra Urban Kendra Rural Kendra Vakrangee Limited 56
Slide 57: Vakrangee Kendra
Vakrangee Kendra Vakrangee Limited 57
Slide 58: Vakrangee Kendra
Vakrangee Kendra Vakrangee Limited 58
Slide 59: Thank You
Thank You