Indostar Capital Finance Limited · NSE:INDOSTAR
Indostar Capital Finance — Q1 FY2021 Earnings Presentation
40 slides from Indostar Capital Finance's earnings presentation, Aug 12, 2020
Slide 1: Q1FY21 Results Update
INDOSTAR CAPITAL FINANCE LIMITED Q1FY21 Results Update 12 August 2020
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”) have been prepared by IndoStar Capital Finance Limited (“IndoStar” or the “Company”) solely for information purposes and do not constitute an offer to sell or, recommendation or solicitation of an offer to subscribe for or
Slide 3: Discussion Summary
Discussion Summary ❖ Brookfield Investment ❖ Quarterly Results ❖ Moratorium and Collections Update ❖ Business Update ❖ Shareholding Structure
Slide 4: Brookfield transaction completed
Brookfield transaction completed Strong Endorsement of IndoStar’s Business Model, Management Capability and Quality of Retail Lending Franchise • Brookfield has invested growth capital of ₹ 12,250 mn via equity shares and CCPS • Transactions fully completed on 8th July 2020 • Brookfield now holds ~5
Slide 5: Discussion Summary
Discussion Summary ❖ Brookfield investment ❖ Quarterly Results ❖ Moratorium and Collections Update ❖ Business Update ❖ Shareholding Structure
Slide 6: Q1FY21 performance: Key Highlights
Q1FY21 performance : Key Highlights ▪ Strong retail franchise ~ 71% of AUM (63% in Jun-19) Execution of Retailisation Theme ▪ ICICI partnership AUM ~ ₹ 7,158 Mn ▪ Comfortable liquidity - cash and equivalents ₹ 21,278 Mn; ~30% of Borrowings Strong Capitalisation & Liquidity ▪ CRAR 37.7%; Tier 1 CRAR
Slide 7: Q1FY21: Consolidated Profit & Loss Statement
Q1FY21: Consolidated Profit & Loss Statement Particulars (₹ mn) Q1FY21 Q4FY20 QoQ % Q1FY20 YoY % Revenue from Operations 3,223 3,206 1% 4,191 -23% Interest Expenses (1,727) (1,814) -5% (2,253) -23% Net Revenue from Operations 1,496 1,391 8% 1,937 -23% People Costs 482 502 -4% 476 1% Operating Expens
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (₹ mn) Jun-20 Mar-20 QoQ % Jun-19 YoY % Equity 39,512 26,806 47% 30,591 29% Borrowings 69,187 66,798 4% 80,863 -14% Other Liabilities 1,159 Total Liabilities 108,699 93,603 16% 112,613 -3% Loan Assets 79,778 78,019 2% 101,568 -21% Treasury Assets 22,907 7,756 1
Slide 9: Q1FY21: Business Segment Performance
Q1FY21: Business Segment Performance Corporate SME Housing Particulars (₹ mn) CV Finance Consolidated ^ ^ Lending Finance Finance Revenue from Operations 1,000 1,400 436 261 3,223 Interest Expenses (529) (595) (245) (136) (1,727) Net Interest Income 471 804 191 125 1,496 People Costs 23 187 39 53 48
Slide 10: Diversified Funding Profile
Diversified Funding Profile Funding Mix - Mar 2020 Funding Mix - Jun 2020 Others CP Others Securitisat 1% 1% 1% ion Equity 11% Equity Securitisat 29% 32% ion 10% NCD NCD Banks 22% Banks 22% 37% 34% Incremental Funding mobilized Strong Credit Ratings ₹ mn Q2FY20 Q3FY20 Q4FY20 Q1FY21 Borrowing Type Ra
Slide 11: Strong Liquidity Position
Strong Liquidity Position Particulars Aug-20 Sep-20 Q3 FY21 Q4 FY21 Q1 FY22 Opening Cash & Equivalents* 21,278 21,765 21,139 24,115 21,865 Loan repayment inflows [Principal] 846 1,612 6,750 5,723 5,105 Total Inflow 22,125 23,377 27,888 29,838 26,970 Liability Repayment [Principal] Commercial Paper -
Slide 12: National Footprint
National Footprint Post integration branch rationalisation on course 212 branches across 18 states * Some branches have multiple operating segments 10 2 322 322 9 233 233 212 2 4 305 305 9 222 222 207 19 55 55 49 48 17 10 10 10 10 10 44 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 SME Finance Housing Finance
Slide 13: Q1FY21: Quarterly Performance Trend (1/2)
Q1FY21: Quarterly Performance Trend (1/2) AUM (₹ mn) Loan Disbursements (₹ mn) On-book Loans Off-book Loans AUM Corporate Lending Retail Finance Total 1,15,792 12,357 1,07,181 1,02,219 14,224 96,899 98,098 16,591 17,867 18,320 8,759 18,880 7,570 7,324 6,612 1,01,568 5,904 90,590 84,352 79,778 3,742
Slide 14: Q1FY21: Quarterly Performance Trend (2/2)
Q1FY21: Quarterly Performance Trend (2/2) NPA* PAT (₹ mn) GNPA NNPA 471 494 472 2 4.7% 4.4% 4.5% 4.4% 3.7% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 3.7% 3.5% 3.6% 3.5% 3.0% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 -4,214 * GNPA & NNPA represents Stage 3 Assets Net worth (₹ mn) Return Ratios^ & Capital Adequacy
Slide 15: Asset Quality
Asset Quality Gross NPA (₹ mn) Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Corporate Lending 1,546 1,546 1,546 1,546 1,546 CV Finance 2,651 1,411 1,946 1,805 1,994 SME Finance 677 437 267 237 153 Housing Finance 19 26 51 63 64 Total 4,893 3,420 3,811 3,652 3,756 Net NPA (₹ mn) Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1F
Slide 16: Discussion Summary
Discussion Summary ❖ Brookfield investment ❖ Quarterly Results ❖ Moratorium and Collections Update ❖ Business Update ❖ Shareholding Structure
Slide 17: 59% portfolio under moratorium 2.0 compared to 90% in moratorium 1.0
59% portfolio under moratorium 2.0 compared to 90% in moratorium 1.0 As on July 31,2020 % customers % customers opting Collections as % of opting for for moratorium Pre-Covid monthly moratorium (Nos) (Value) billing CV 55% 42% 48% SME 52% 58% 51% AHF 25% 25% 86% Total Retail 51% 44% 50% Corporate Le
Slide 18: Portfolio quality improvement with focus on overdue collections
Portfolio quality improvement with focus on overdue collections Days Past Due CV SME AHF All in % Mar 2020 June 2020 Mar 2020 June 2020 Mar 2020 June 2020 Current 56 62 85 89 98.1 98.5 0-30 16 15 7 5 0.7 0.3 31-60 13 11 5 4 0.2 0.2 61-90 6 5 2 1 0.2 0.2 All % at AUM level 17
Slide 19: Discussion Summary
Discussion Summary ❖ Brookfield investment ❖ Quarterly & Annual Results ❖ Moratorium and Collections Update ❖ Business Update ❖ Shareholding Structure
Slide 20: Corporate Lending (1/3)
Corporate Lending (1/3) Corporate Lending AUM (₹ mn) AUM Breakup: RE vs. Non-RE 43,067 36,267 27% 19% 18% 16% 31,646 36% 28,687 29,287 81% 82% 84% 64% 73% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1 FY21 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Real Estate Non Real Estate ✓ Continued focus on reduction in exposure 19
Slide 21: Corporate Lending: Profit and Loss (2/3)
Corporate Lending: Profit and Loss (2/3) Particulars (₹ mn) Q1 FY 20 Q2 FY 20 Q3 FY 20 Q4 FY 20 Q1 FY 21 Revenue from Operations 1,676 1,494 1,288 1,077 1,000 Interest Expenses (883) (789) (648) (610) (529) Net Interest Income 793 704 640 467 471 People Costs 49 42 40 27 23 Operating Expenses 1 2 9
Slide 22: Corporate Lending: Key ratios (3/3)
Corporate Lending : Key ratios (3/3) Q1 FY 20 Q2 FY 20 Q3 FY 20 Q4 FY 20 Q1 FY 21 Revenue from Operations* 14.7% 14.9% 14.7% 14.3% 13.6% Net Interest Income* 6.9% 7.0% 7.3% 6.2% 6.4% Operating Expenses* 0.4% 0.4% 0.6% 0.5% 0.4% Cost / Income 6.2% 6.1% 7.7% 7.7% 5.8% Pre-provision Operating Profit 6.
Slide 23: Retailisation Strategy On track
Retailisation Strategy On track AUM: CL vs Retail (%) Disbursements: CL vs Retail (%) 1,15,792 1,07,181 1,02,219 96,899 98,098 12,357 6,612 8,759 7,324 868 61% 57% 63% 66% 69% 71% 71% 67% 87% 89% 39% 43% 37% 34% 31% 29% 29% 33% 13% 11% Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20
Slide 24: Retail Business Volume impacted by Covid-19
Retail Business Volume impacted by Covid-19 Retail AUM (₹ mn) Retail Disbursements (₹ mn) 7,570 72,726 70,914 70,574 70,989 71,595 1,014 6,364 6,340 7,080 7,699 8,310 8,305 5,904 1,384 827 19,017 866 18,637 17,968 17,482 17,530 679 745 3,742 921 5,172 664 4,833 47,345 45,197 44,907 45,197 45,760 4,2
Slide 25: CV Finance (1/3)
CV Finance (1/3) CV Finance – Monthly Disbursement Trend (₹ mn) 2191 1,777 1724 1,427 1,054 1,089 918 732 679 371 7 23 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 ✓ CV Finance AUM ₹ 45,760 Mn ✓ AUM of ICICI Bank tie-up ₹ 7,158 Mn 24
Slide 26: CV Finance: Profit and Loss (2/3)
CV Finance : Profit and Loss (2/3) Particulars (₹ mn) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Revenue from Operations 1,506 1,681 1,585 1,327 1,400 Interest Expenses (673) (643) (613) (630) (595) Net Interest Income 833 1,038 971 697 804 People Costs 255 225 206 193 187 Operating Expenses 139 144 11
Slide 27: CV Finance: Key ratios (3/3)
CV Finance : Key ratios (3/3) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Branches & Employees Revenue from Operations* 16.6% 18.4% 18.4% 16.1% 17.4% Net Interest Income* 9.2% 11.4% 11.3% 8.5% 10.0% 1,934 350 1,734 Operating Expenses* 4.3% 4.0% 3.8% 4.2% 3.6% 300 1,635 1643 1606 2,000 250 Cost / Income
Slide 28: SME Finance (1/3)
SME Finance (1/3) SME Finance – Monthly Disbursement Trend (₹ mn) 351 297 256 242 242 261 234 174 32 4 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 ✓ SME Finance AUM : ₹ 17,530 mn ✓ Assigned/Securitized Portfolio : ₹ 4,159 mn 27
Slide 29: SME Finance: Profit and Loss (2/3)
SME Finance: Profit and Loss (2/3) Particulars (₹ mn) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Revenue from Operations 587 679 441 428 436 Interest Expenses (341) (314) (260) (266) (245) Net Interest Income 247 365 181 162 191 People Costs 46 47 45 44 39 Operating Expenses 24 32 33 31 17 Pre-provisio
Slide 30: SME Finance: Key ratios (3/3)
SME Finance : Key ratios (3/3) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Branches & Employees Revenue from Operations* 13.6% 17.1% 12.9% 13.0% 12.8% Net Interest Income* 5.7% 9.2% 5.3% 4.9% 5.6% 98 93 89 87 89 Operating Expenses* 1.6% 2.0% 2.3% 2.3% 1.6% Cost / Income 28.4% 21.5% 43.1% 46.1% 29.3% 10
Slide 31: Housing Finance (1/3)
Housing Finance (1/3) Housing Finance – Monthly Disbursement Trend (₹ mn) 377 316 320 311 286 288 295 267 156 64 0 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 ✓Housing Finance AUM : ₹ 8,305 Mn ✓Assigned/Securitized Portfolio : ₹ 845 Mn 30
Slide 32: Housing Finance: Profit and Loss (2/3)
Housing Finance: Profit and Loss (2/3) Particulars (₹ mn) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Revenue from Operations 220 259 245 261 261 Interest Expenses (112) (124) (121) (141) (136) Net Interest Income 108 134 124 119 125 People Costs 55 60 58 63 53 Operating Expenses 24 25 31 36 21 Pre-prov
Slide 33: Housing Finance: Key ratios (3/3)
Housing Finance : Key ratios (3/3) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Branches & Employees Revenue from Operations* 15.7% 16.5% 15.3% 14.6% 13.9% Net Interest Income* 7.7% 8.6% 7.8% 6.7% 6.7% 329 Operating Expenses* 5.7% 5.4% 5.5% 5.6% 4.0% 324 319 319 Cost / Income 74.1% 63.4% 71.1% 83.0% 59.5
Slide 34: Significant Growth Capital: A real edge in current environment
Significant Growth Capital : A real edge in current environment IndoStar now has all the essential ingredients to rapidly grow its loan book in the future • Capital : We now have substantial growth capital, which we will utilize to pursue calibrated growth • Infrastructure : Our current infrastructu
Slide 35: Entrepreneurial Leadership Team with Strong Sponsor Backing
Entrepreneurial Leadership Team with Strong Sponsor Backing ✓ Several years of experience and in-depth understanding of the specific industry and geographic regions ✓ Separate business & credit heads for each vertical ✓ Strong alignment through large ESOP program (5.7% of diluted shares * ) ◼ 20+ ye
Slide 36: Entrepreneurial Leadership Team with Strong Sponsor Backing
Entrepreneurial Leadership Team with Strong Sponsor Backing ◼ 24 years of experience with ◼ 20 years of experience financial Institutions with banks & financial ◼ 21 years of experience with banks Institutions & financial Institutions ◼ Previously worked with Fullerton India, Citigroup, ◼ Previously
Slide 37: Strong & Distinguished Board
Strong & Distinguished Board ✓ 14 committees composed of independent and non-independent directors and also employees1 ✓ Distinct and delineated responsibilities to ensure good corporate governance ✓ Strong capital sponsorship also providing access to best industry practices and international corpor
Slide 38: Discussion Summary
Discussion Summary ❖ Brookfield Investment ❖ Quarterly Results ❖ Moratorium and Collections Update ❖ Business Update ❖ Shareholding Structure
Slide 39: Shareholding Pattern
Shareholding Pattern Shareholding @ 31 July 2020 Brookfield Public 52% # 6% Indostar Capital 42% # Excluding CCPS Source – NSE, Company data 38
Slide 40: For Further Queries
For Further Queries Amol Joshi Chief Financial Officer Contact No: +91 98198 68337 Email - investor.relations@indostarcapital.com Media Contact Snigdha Nair Adfactors PR Email - snigdha.nair@adfactorspr.com; indostar@adfactorspr.com
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