Satin Creditcare Network Ltd · NSE:SATIN

Satin Creditcare Network — Q3 FY2017 Earnings Presentation

66 slides from Satin Creditcare Network's earnings presentation, February 2017

  1. Slide 1: Investor Presentation - 3Q FY17

    SATIN CREDITCARE NETWORK LIMITED INVESTOR PRESENTATION - 3Q FY17 FEB 2017 BSE: 539404 | NSE: SATIN | CSE: 30024 Corporate Identity No. L65991DL1990PLC041796

  2. Slide 2: Disclaimer

    Disclaimer By accessing this presentation, you agree to be bound by the following terms and conditions. This presentation (which may reflect some price sensitive information in terms of SEBI regulations and Companies Act, 2013, as amended from time to time) has been prepared by Satin Creditcare Netw

  3. Slide 3: Contents

    Contents Details Corporate Overview 3 Product Portfolio 7 Highlights of Dec’16 Performance 12 Impact of Demonetization 18 Digital Transformation and Other Business Initiatives 23 Key Investment Thesis 27 Annexure Financial & Operational Details – Consolidated 43 Financial & Operational Details – Sta

  4. Slide 4: Corporate Overview

    Corporate Overview

  5. Slide 5: Company Overview

    Company Overview  Satin Creditcare Network Ltd. (‘Satin’ or ‘SCNL’) is India’s fourth largest Microfinance Shareholding Pattern – December 31, 2016 Institution (MFI) in terms of Gross Loan Portfolio (Sep’16)* with a strong presence in North India Other Promoters and  Listed on CSE** (May’15), NSE

  6. Slide 6: Key Milestones

    Key Milestones  Reaches 2.58 mn(A) active clients and gross AUM of ₹ 37,361.37 mn(A) as on Dec’16  Raised INR 2.50 bn via QIP in Oct’16  CARE Ratings upgraded LT Bank Facilities & NCDs to A- in Oct’16  Acquired TSPL in Sep’16  Exit of DMP in Jul'16 and Shore Capital in Aug’16  Reaches 0.17 mn

  7. Slide 7: Select Accolades & Key Highlights

    Select Accolades & Key Highlights  Received “Client Protection Certificate” under the Award by Client Protection Certificate Smart Campaign – 2016 from M-CRIL MF Transparency Organization Smart Campaign - 2016  Received certificate for being the ‘Best Micro Finance Company in India’ from Worldwide

  8. Slide 8: Product Portfolio

    Product Portfolio

  9. Slide 9: Product Portfolio – Details

    Product Portfolio – Details Business Correspondent MFI Segment(1) Non-MFI Segment services(2) Product Financing Product features as on Dec’16 MFI Lending Loans to MSME(3) TSPL(4) (Loan for Solar lamps) Start Date May’08 (JLG) Oct’15 Apr ‘16 May’12(4) Rs. 100,000 – Rs. Rs. 15,000 – Rs. 35,000 Ticket

  10. Slide 10: Product Portfolio - Diversification Underway

    Product Portfolio - Diversification Underway(1)  Started operations in 1990 with an objective to provide ‘doorstep’ credit and savings services to individual businesses engaged in productive, trading and services activities in urban areas; gradually forayed into semi-urban and rural areas also  St

  11. Slide 11: Product Portfolio – Other Service Offerings

    Product Portfolio – Other Service Offerings  Have entered into an agreement with Reliance Capital Limited (“RCL”) in Dec’13 to provide certain services to RCL for providing loans against property (“LAP”) with a view to leverage on our rural reach Loan Against  Under the arrangement, Satin sources

  12. Slide 12: Further Product Diversification by Entry into Affordable Housing

    Further Product Diversification by Entry into Affordable Housing Rationale for entry into housing finance Target market and segment for Satin Satin’s Board, on 10 Feb’17, approved the formation of a wholly-owned Income Unit Cost of Unit Housing Housing Finance Company and entry into affordable housi

  13. Slide 13: Highlights of Dec'16 Performance

    Highlights of Dec’16 Performance

  14. Slide 14: Highlights of 9mFY17 Performance

    Highlights of 9mFY17 Performance SCNL Consolidated Results – 9mFY17 Consolidated - Revenue / PAT (Rs. mn) – Gross AUM at Rs. 37.36 bn registered a growth of 47% yoy Revenue – Revenue increased by 63% yoy to Rs. 6.28 bn 6,284.24 PAT – PAT (after minority interest) at Rs. 679.15 mn increased 63% yoy 3

  15. Slide 15: Highlights of 3QFY17 Performance

    Highlights of 3QFY17 Performance SCNL Consolidated Results - 3QFY17 Consolidated - Revenue (Rs. mn) – Gross AUM at Rs. 37.36 bn, growth of 47% yoy and a decline of 11% qoq – Revenue at Rs. 2.19 bn, increase of 52% yoy and an increase of 3% qoq 2,127.63 2,189.08 – PAT at Rs. 169.06 mn, growth of 13%

  16. Slide 16: Operational Highlights

    Operational Highlights Gross Lending Portfolio (Rs. Mn) No. of Branches TSPL TSPL 41,810 710 681 37,361 MFI 32,708 32,782 Lending 431 458 21,407 37,517** 33,437** 267 544** 560** 10,561 199 FY14 FY15 FY16 Jun'16 Sep'16 Dec'16 FY14 FY15 FY16 Jun'16 Sep'16 Dec'16 **On standalone basis, excluding TSPL

  17. Slide 17: Operational Highlights (Contd.)

    Operational Highlights (Contd.) No. of Employees No. of Loan Officers TSPL TSPL 6,546 6,817 4,276 4,451 4,583 3,918 3,173 2,698 5,702** 5,537** 3,711** 3,614** 2,496 1,710 1,958 1,347 FY14 FY15 FY16 Jun'16 Sep'16 Dec'16 FY14 FY15 FY16 Jun'16 Sep'16 Dec'16 **On standalone basis, excluding TSPL **On s

  18. Slide 18: Robust Operational Metrics

    Robust Operational Metrics (1) GLP/ Branch – MFI Lending (Rs. Mn) GLP/ Loan Officer – MFI Lending (Rs. Mn) 12.5 12.1 MFI80.2 10.3 10.4 75.6 71.3 9.6 Lending 69.1 9.0 59.9 58.8 7.8 53.1 FY14 FY15 FY16 Jun'16 Sep'16 Dec'16 Sep'16 - FY14 FY15 FY16 Jun'16 Sep'16 Dec'16 Sep'16 - Industry Industry No. of

  19. Slide 19: Impact of Demonetization

    Impact of Demonetization

  20. Slide 20: Demonetization - Impact and Steps Taken

    Demonetization - Impact and Steps Taken Impact of demonetization Steps taken  On 8 Nov 2016, demonetization of higher currency  Satin worked closely with MFIN Focused Action Task notes was announced with effect from midnight Force and met with the local administration in all the states to help edu

  21. Slide 21: Positives for the MFI Sector from Demonetization

    Positives for the MFI Sector from Demonetization Budgetary boost for the sector: Allocation for MUDRA scheme doubled, and SIDBI refinancing for unsecured loans at reasonable rates Regulatory clarity: Fear of state intervention for regulated MFIs has been put to rest - RBI is the sole regulator for c

  22. Slide 22: Demonetization Impact – Satin Standalone

    Demonetization Impact – Satin Standalone Collection trend % 88.1% 81.2% 77.6% 65.3% 57.9% 30 Nov 2016 31 Dec 2016 25 Jan 2017 Nov'16 Dec'16 Cumulative repayment rate % 99.6% 99.5% 94.0% Jun'16 Sep'16 Dec'16  Zero collections centres are ~2.5% 21

  23. Slide 23: Demonetization Impact - TSPL

    Demonetization Impact - TSPL TSPL Collection trend % 96.7% 97.2% 90.3% 92.1% 88.2% 30 Nov 2016 31 Dec 2016 23 Jan 2017 Nov'16 Dec'16  TSPL, being a business correspondent for banks, was able to collect demonetized currency as per the RBI guidelines  During the quarter, TSPL initiated cashless disb

  24. Slide 24: Digital Transformation and Other Business Initiatives

    Digital Transformation and Other Business Initiatives

  25. Slide 25: Digital Transformation Expedited and Well Underway

    Digital Transformation Expedited and Well Underway Digital Transformation Underway Completed Migrated to a Software has the capability to track every client, group, center, training for all centralized branch, territory, region, zone and the company in its entirety field staff on database TABs Will

  26. Slide 26: Successful Pilot of Cashless Disbursements and Cashless Collections

    Successful Pilot of Cashless Disbursements and Further Scale-up of Cashless Collections Cashless Disbursements Process Flow KYC and Bank Loan Processing at KYC and Bank KYC and Bank KYC and Bank Information RO Information Information Information CSO registers client e-KYC, Instant Credit Branch Mana

  27. Slide 27: Recent Business Initiatives

    Recent Business Initiatives  Satin goes Digital in FY17 – Shifted from a decentralized database to a centralized database  Provided TABs to all branches - last mile connectivity for real-time collections & records updation Information  Rolled out cashless disbursements to clients in Feb’17 Techno

  28. Slide 28: Key Investment Thesis

    Key Investment Thesis

  29. Slide 29: Key Investment Thesis

    Key Investment Thesis 1 7 Robust industry Experienced fundamentals with management strong regulatory team support Widespread presence with 6 Robust internal leadership position 2 audit and risk in underpenetrated management regions having high mechanisms growth potential Robust operational Strong cl

  30. Slide 30: Microfinance Sector – Supportive Industry Dynamics and Robust Fundamentals

    1 Microfinance Sector – Supportive Industry Dynamics and Robust Fundamentals; Strong Growth to Continue Industry Snapshot Sector has seen high growth in GLP and client reach**  High level of credit under-penetration in rural areas – Rural areas accounted for only 10% of overall o/s bank-credit whil

  31. Slide 31: Microfinance Sector – Strong Portfolio Growth Coupled with Low Delinquencies

    1 Microfinance Sector – Strong Portfolio Growth Coupled with Low Delinquencies has Ensured Continued Funding Higher debt and equity funding Debt funding and securitization during the period*  Banks have shown high confidence in the sector and have increased their Debt Funding (Rs. bn) Securitizatio

  32. Slide 32: India's Fourth Largest MFI with Widespread Presence

    2 Satin Creditcare - India’s Fourth Largest MF, in terms of GLP, with Widespread Presence (1) With strong presence in North India, Satin is steadily building a pan India presence(1) Jammu & Kashmir (as on Dec'16) GLP (INR mn) 33.71 Himachal Pradesh (as on Dec'16) No. of branches 1 GLP (INR mn) 44.31

  33. Slide 33: Established Presence in Underserved Geographies

    2 Established Presence in Underserved Geographies Leading to Significant Growth Opportunities (1)  Satin is present mostly in states of low MFI penetration  It has significant presence in under-penetrated and high growing markets Key markets for Satin(1) YoY growth in MFI MFI penetration in the St

  34. Slide 34: Reducing Concentration in Top Districts Over the Years

    2 Reducing Concentration in Top Districts Over the Years (1)  Strategy to reduce concentration in top districts is working as envisioned Portfolio in top districts as % of Gross AUM - JLG 27.9% 22.2% 19.9% 15.8% 15.4% 13.4% 10.3% 8.8% 6.9% 5.4% 4.7% 3.8% Mar'14 Mar'15 Mar'16 Dec'16 Top 5 Districts

  35. Slide 35: Strengthening Presence in Underserved Geographies through Acquisition of TSPL

    2 Strengthening Presence in Underserved Geographies through Acquisition of TSPL TSPL is serving clients in under penetrated geographies Presence in 8 states – Punjab and Uttar Pradesh have been recently added during FY17 Punjab (as on Dec'16) GLP (INR mn) 25.10 Uttar Pradesh (as on Dec'16) No. of br

  36. Slide 36: Strong Client Relationships Built Through Transparent Operations

    3 Strong Client Relationships Built Through Transparent Operations (1)  Track record of over 25 years in microcredit space with comprehensive understanding of the industry and client segment – Rapidly growing operations despite cyclical changes in the economy as well as the MFI space in the past -

  37. Slide 37: Strong and Diversified Lending Relationships

    4 Strong and Diversified Lending Relationships (1) Diversified Lending Portfolio Funds raised (Rs. mn)  Active relationship with 77 banks and financial institutions (Dec’16) Total Funds Raised Debt Funds Raised  Spread across Public Sector Banks, Private Banks, Foreign Banks, 9mFY17 29,872.75 21,9

  38. Slide 38: Positive ALM Benefit and Strong Liquidity Position

    4 Positive ALM Benefit and Strong Liquidity Position (1)  Benefit of positive ALM mismatch continues  Strong liquidity position provides significant headroom for growth ALM (No. of Months)* Cash and Cash Equivalents (INR mn) 21.8 18.5 18.4 19.3 17.2 17.8 11,946.41 8,966.24 9.9 9.8 9.6 8.4 7.8 8.3

  39. Slide 39: Robust Operational Performance Over the Years

    5 Robust Operational Performance Over the Years (1) PARTICULARS FY14 FY15 FY16 CAGR % 9mFY16 9mFY17 YoY % Gross AUM (Rs. mn) 10.560.55 21,406.50 32,707.60 75.99% 25,384.27 33,436.63 31.72% No. of districts 97 121 215 48.88% 183 225 22.95% No. of branches 199 267 431 47.17% 364 560 53.85% No. of Stat

  40. Slide 40: Robust Operational Performance Over the Years (Contd.)

    5 Robust Operational Performance Over the Years (1) (Contd.) PARTICULARS FY14 FY15 FY16 CAGR % 9mFY16 9mFY17 YoY% Product Financing AUM (Rs. mn) - - 112.61 - 30.11 5.68 -81.14% No. of Active Customers - - 190,044 - 42,274 26,157 -38.13% Disbursement during the period (Rs. mn) - - 140.30 - 31.35 22.5

  41. Slide 41: Robust Financial Performance Over the Years

    5 Robust Financial Performance Over the Years (1) PARTICULARS (Rs. mn) FY14 FY15 FY16 CAGR % 9mFY16 9mFY17 YoY % Revenue 1,916.55 3,241.56 5,585.21 70.71% 3,854.59 6,140.25 59.30% PBT 234.13 464.54 875.29 93.35% 624.84 1,002.27 60.40% PAT 155.58 317.16 579.41 92.98% 415.98 670.63 61.22% PAT (post Pr

  42. Slide 42: Robust Internal Audit and Risk Management Mechanisms

    6 Robust Internal Audit and Risk Management Mechanisms Strong Internal Audit Processes and Systems ensure high Portfolio quality Team Structure Full fledged in-house Internal Audit department for Group Lending and MSME  6 member supervisory/support team at Head Office CMD and Audit Committee and a

  43. Slide 43: Organizational Structure

    7 Organizational Structure Board of Directors Chairman cum Managing Director Chief Financial Chief Operating Chief Information Business Head – SME Business Head – SME Head - Human Head - Internal Audit, Officer Officer Officer (North & East) (West & South) Resources Process and Risk Deputy COO – Nor

  44. Slide 44: Annexure: Financial & Operational Details - Consolidated

    Annexure Financial & Operational Details - Consolidated

  45. Slide 45: Business Details – Consolidated

    Business Details – Consolidated PARTICULARS Dec’16(A) Dec’15 YoY % Sep’16(A) QoQ % AUM (Rs. mn) 37,361.37 25,384.27 47.18% 41,809.81 -10.64% On-Book AUM (Rs. mn) 26,289.55 19,809.08 32.71% 27,920.24 -5.84% Securitization/ Assignment (Rs. mn) 7,147.08 5,575.19 28.19% 9,596.98 -25.53% TSPL - Business

  46. Slide 46: Balance Sheet – Consolidated

    Balance Sheet – Consolidated PARTICULARS (Rs. mn) Dec’16(A) Dec’15 YoY % Sep’16(A) QoQ % Equity(1) 6,782.31 2,796.25 142.55% 4,293.19 57.98% Preference shares 250.00 - - 250.00 0.00% Net Worth 7,032.31 2,796.25 151.49% 4,543.19 54.79% Minority Interest 23.46 - - 22.82 2.83% Long Term Borrowings 19,0

  47. Slide 47: P&L Statement – Consolidated (Quarterly)

    P&L Statement – Consolidated (Quarterly) PARTICULARS (Rs. mn) 3Q FY17(A) 3Q FY16 YoY % 2Q FY17(A) QoQ % Total Revenue Interest income on Portfolio Loans 1,628.66 995.01 63.68% 1,308.42 24.48% Income from securitization 167.06 202.60 -17.54% 439.45 -61.98% Processing Fee income 28.99 101.55 -71.45% 1

  48. Slide 48: P&L Statement – Consolidated (9 months)

    P&L Statement – Consolidated (9 months) PARTICULARS (Rs. mn) 9mFY17(A) 9mFY16 YoY % Total Revenue Interest income on Portfolio Loans 4,256.80 2,745.31 55.06% Income from securitization 975.84 562.96 73.34% Processing Fee income 253.61 197.97 28.11% Interest on FD/ Mutual Fund 595.80 312.66 90.56% In

  49. Slide 49: Annexure: Financial & Operational Details - Standalone

    Annexure Financial & Operational Details - Standalone

  50. Slide 50: Operational Details – Standalone

    Operational Details – Standalone PARTICULARS 3Q FY17 3Q FY16 YoY % 2Q FY17 QoQ % Gross AUM 33,436.63 25,384.27 31.72% 37,517.22 -10.88% No. of districts 225 183 22.95% 225 0.00% No. of branches 560 364 53.85% 544 2.94% No. of Regional Offices (RO) 37 17 117.65% 29 27.59% No. of States of operation 1

  51. Slide 51: Operational Details – Standalone (Contd.)

    Operational Details – Standalone (Contd.) PARTICULARS 3Q FY17 3Q FY16 YoY % 2Q FY17 QoQ % Prod. Financing AUM (Rs. mn) 5.68 30.11 -81.14% 20.19 -71.87% No. of loan accounts 26,157 42,274 -38.13% 124,291 -78.96% Disbursement during the period (Rs. mn) 0.53 31.35 -98.31% 7.58 -92.99% No. of loans disb

  52. Slide 52: Financial Performance – Standalone

    Financial Performance – Standalone RoE Tree 3Q FY17 3Q FY16 2Q FY17 Gross Yield (1) 23.49% 24.52% 23.78% Financial Cost Ratio(2) 13.09% 12.72% 11.55% Net Interest Margin(3) 10.40% 11.80% 12.23% Operating Expense ratio(4) 6.98% 6.55% 6.82% Loan Loss Ratio(5) 0.54% 1.44% 0.94% RoA(6) 1.50% 2.33% 2.72%

  53. Slide 53: Balance Sheet – Standalone

    Balance Sheet – Standalone PARTICULARS (Rs. mn) Dec’16 Dec’15 YoY % Sep’16 QoQ % Equity(1) 6,773.79 2,796.25 142.25% 4,289.33 57.92% Preference shares 250.00 - - 250.00 0.00% Net Worth 7,023.79 2,796.25 151.19% 4,539.33 54.73% Long Term Borrowings 19,046.97 11,352.08 67.78% 16,384.97 16.25% Long Ter

  54. Slide 54: P&L Statement – Standalone (Quarterly)

    P&L Statement – Standalone (Quarterly) PARTICULARS (Rs. mn) 3Q FY17 3Q FY16 YoY % 2Q FY17 QoQ % Total Revenue Interest income on Portfolio Loans 1,628.62 995.01 63.68% 1,308.42 24.47% Income from securitization 167.06 202.60 -17.54% 439.45 -61.98% Processing Fee income 28.99 101.55 -71.45% 138.55 -7

  55. Slide 55: P&L Statement – Standalone (9 months)

    P&L Statement – Standalone (9 months) PARTICULARS (Rs. mn) 9mFY17 9mFY16 YoY % Total Revenue Interest income on Portfolio Loans 4,256.76 2,745.31 55.06% Income from securitization 975.84 562.96 73.34% Processing Fee income 253.61 197.97 28.11% Interest on FD/ Mutual Fund 513.19 312.66 64.14% Other I

  56. Slide 56: Annexure: Financial & Operational Details - TSPL

    Annexure Financial & Operational Details - TSPL

  57. Slide 57: Operational Details – TSPL

    Operational Details – TSPL PARTICULARS 3Q FY17 3Q FY16 YoY % 2Q FY17 QoQ Gross AUM (Rs. mn) 3,924.74 2,777.00 41.33% 4,292.59 -8.57% No. of districts 85 50 70.00% 78 8.97% No. of branches 150 99 51.52% 137 9.49% No. of Regional Offices (RO) 7 5 40.00% 8 -12.50% No. of States of operation 8 5 60.00%

  58. Slide 58: Balance Sheet – TSPL

    Balance Sheet – TSPL PARTICULARS (Rs. mn) Dec’16 Dec’15 YoY % Sep’16 QoQ % Share Capital 90.83 90.83 0.00% 90.83 0.00% Reserves and Surplus 101.95 94.02 8.43% 96.64 5.49% Net Worth 192.78 184.85 4.29% 187.47 2.83% Long Term Borrowings 39.37 15.19 159.18% 46.67 -15.63% Long Term Provisions 8.65 2.85

  59. Slide 59: P&L Statement – TSPL

    P&L Statement – TSPL PARTICULARS (Rs. mn) 3Q FY17 3Q FY16 YoY % 2Q FY17 QoQ % Total Revenue 105.58 77.31 36.57% 106.42 -0.79% Interest Expense 6.02 6.47 -6.96% 3.01 100.00% Personnel Expenses 63.64 46.27 37.54% 55.81 14.03% Credit cost (Provisions for NPAs, Write-offs, etc.) 4.81 4.85 -0.82% 10.82 -

  60. Slide 60: Annexure: Top Shareholders

    Annexure Top 10 Shareholders

  61. Slide 61: Top Shareholders

    Top 10 Shareholders Top 10 Shareholders as of 31 Dec 2016 Top 10 Institutional Shareholders as of 31 Dec 2016 Share Share Entity Entity holding % holding % PROMOTER 33.04 MORGAN STANLEY MAURITIUS COMPANY LTD 5.29 MV MAURITIUS LIMITED 9.30 MORGAN STANLEY ASIA (SINGAPORE) PTE 2.81 SBI FMO 8.82 GOVERNM

  62. Slide 62: Annexure: Financial Inclusion and Community Initiatives

    Annexure Financial Inclusion and Community Initiatives

  63. Slide 63: Delivering on our Mission of Financial Inclusion

    Delivering on our Mission of Financial Inclusion (2)  With majority of lending to weaker sections of the society, Satin is committed to its mission of increasing financial inclusion Active client* mix(2) as of Dec 31, 2016 Gross AUM mix(2) as of Dec 31, 2016 SC 36.22% SC 36.23% OBC 34.18% OBC 33.58

  64. Slide 64: Recent Community Connect Initiatives to help improve quality of lives

    Recent Community Connect Initiatives to help improve quality of lives  Committed towards social initiatives - conducted regular campaigns including organizing free health checkup camps and campaigns to increase financial literacy  Activities lined up:  Health camps  Contribution to School Infras

  65. Slide 65: Contact Information

    Contact Information For any queries, please contact: Mansi Verma AVP – Capital Markets Satin Creditcare Network Limited E: mansi.verma@satincreditcare.com T: +91 11 4754 5000 (Ext – 243) 64

  66. Slide 66: Thank You

    Thank You

Satin Creditcare Network — Q3 FY2017 Earnings Presentation on 6ix