Csl Finance Limited · NSE:CSLFINANCE
Csl Finance — Q1 FY2024 Earnings Presentation
39 slides from Csl Finance's earnings presentation, Aug 7, 2023
Slide 1: Cover letter to stock exchanges
CIN: L74899DL1992PLC051462 August 07, 2023 National Stock Exchange of India BSE Limited Limited Corporate Relationship Department Exchange Plaza, Phiroze, Jeejeebhoy Towers C-1, Block-G, Bandra Kurla Complex, Dalal Street, Mumbai-400001 Bandra (E), Mumbai - 400051 NSE Symbol: CSLFINANCE BSE Scrip Co
Slide 2: Q1FY24 Investor Presentation
Q1FY24 Investor Presentation AUGUST 2023
Slide 3: Quarterly Business Update
CSL FINANCE LIMITED 01/ Quarterly Business Update Loan Book Size Treasury Update Asset Quality Quarterly Financial Snapshot Asset Quality: Stage Analysis Operational Updates P&L Highlights Lending Partners CSL FINANCE LIMITED
Slide 4: Loan Book Size
CSL FINANCE LIMITED 3 Loan Book Size DISBURSEMENTS COLLECTIONS LOAN BOOK COLLECTION EFFICIENCY (₹ crore) (₹ crore) (₹ crore) (%) -5% 27% -2% 99% 32% -3% Wholesale SME Retail YOY Change QOQ Change YOY Change QOQ Change YOY Change QOQ Change 228 736 715 173 681 100 100 10099 100 100 167 163 98 98 98 1
Slide 5: Asset Quality
CSL FINANCE LIMITED 4 Asset Quality GROSS NPA NET NPA PROVISIONAL COVERAGE RATIO (%) (%) (%) -56 BPS 14 BPS -35 BPS 8 BPS YOY Change QOQ Change YOY Change QOQ Change 1.31 0.78 206 173 175 0.84 161 0.72 0.75 0.48 0.61 0.42 0.43 116 0.35 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q
Slide 6: Asset Quality: Stage Analysis
CSL FINANCE LIMITED 5 Asset Quality: Stage Analysis CLASSIFICATION OF ASSETS BASIS THE ECL COMPUTATION AS PER IND-AS: PARTICULARS Q1FY23 Q4FY23 Q1FY24 Gross Stage 3 (GNPA) 7.06 4.47 5.34 % portfolio in Stage 3 1.31% 0.61% 0.75% ECL provision Stage 3 2.83 1.92 2.26 Net Stage 3 4.23 2.55 3.07 ECL Prov
Slide 7: P&L Highlights
CSL FINANCE LIMITED 6 P&L Highlights NET INTEREST INCOME TOTAL INCOME PROFIT AFTER TAX YIELDS (₹ crore) (₹ crore) (₹ crore) (%) 30% 7% 41% 5% 24% 12% YOY Change QOQ Change YOY Change QOQ Change YOY Change QOQ Change 35.5 13.2 17.9 18.1 18.3 25.0 33.8 17.6 17.8 23.6 23.3 31.3 16.7 16.7 16.7 16.6 16.6
Slide 8: Treasury Update
CSL FINANCE LIMITED 7 Treasury Update LEVERAGE LIQUIDTY (times) (₹ crore) The Company has adequate liquidity Credit Rating for the of ₹ 40.29 crore and Company stands at undrawn Credit BBB+ Stable from facilities as on India Ratings & 1.13 Research 60.73 30th June 2023 0.98 0.96 0.78 38.19 40.29 0.6
Slide 9: Quarterly Financial Snapshot
CSL FINANCE LIMITED 8 Quarterly Financial Snapshot (₹ crore) PARTICULARS Q1FY23 Q4FY23 Q1FY24 Disbursements 196.61 259.62 187.07 Revenue 25.10 33.75 35.49 Interest Income 23.62 30.9 31.26 PBT 14.20 16.21 18.18 PAT 10.63 11.85 13.24 Bad debts written off 0.50 0.40 0.94 Bad debts recovered 0.79 0.76 0
Slide 10: Operational Updates (1/2)
CSL FINANCE LIMITED 9 Operational Updates (1/2) NET INTEREST INCOME & PROFITABILITY • As communicated in our last update, we have begun reshuffling some of the existing • Both NII and PAT have registered growth of 7% and 16% QoQ branches while also launching new ones. During the quarter, we closed a
Slide 11: Strategic Updates (2/2)
CSL FINANCE LIMITED 10 Strategic Updates (2/2) EQUITY FUND RAISE • Leveraging its expertise of the NCR Wholesale lending market, the Company is lending via • During the quarter, the Company announced an Equity Fund Direct Assignment route for lenders such as Kotak Mahindra Bank Limited & Tourism rai
Slide 12: Lending Partners
CSL FINANCE LIMITED 11 Lending Partners NBFC Banks & SFBs Tourism Finance Corporation of India Limited Kotak Mahindra Investments Limited
Slide 13: 5Y Financial Snapshot
CSL FINANCE LIMITED 12 5Y Financial Snapshot (₹ crore) PARTICULARS FY19 FY20 FY21 FY22 FY23 Disbursements 346.19 270.10 433.32 491.10 758.72 Revenue 59.70 60.85 61.67 74.62 117.54 Interest Income 54.97 58.42 59.18 67.66 108.54 PBT 34.06 31.74 39.36 44.98 61.47 PAT 25.15 22.47 27.53 33.68 45.52 Bad d
Slide 14: About CSL Finance
02/ About CSL Finance Introduction & Snapshot Wholesale Business SME Retail Verticals & Products CSL FINANCE LIMITED
Slide 15: Introduction
CSL FINANCE LIMITED 14 Introduction CSL Finance Limited is a Non-Banking ₹ 715 Crore Loan Book Finance Company registered with the Reserve Bank of India and listed on the NSE and BSE. The Company is a one-stop destination for Small and Medium-Sized Enterprises (SMEs) and real estate and non-real est
Slide 16: Business Verticals & Products
CSL FINANCE LIMITED 15 Business Verticals & Products SME SME Fabricator Wholesale Retail Loan WS SME SME WS WS OTHER SME MID- FABRICATOR LARGE SMALL TERM RETAIL SIZED LOAN LOAN LAP Structured loans for Construction loan Loan against SORP/SOCP Micro/Small Loans to Kirana Loan against properties for P
Slide 17: Wholesale Business Vertical
BUSINESS VERTICAL CSL FINANCE LIMITED 16 Niche, focused, real estate wholesale book Focused on secured lending book (100% of the book) WHOLE Built on in-depth expertise of NCR and all its micro-markets SALE Strength in affordable housing segment
Slide 18: Wholesale (1/3)
BUSINESS VERTICAL CSL FINANCE LIMITED 17 Wholesale (1/3) PRODUCTS WS WS WS OTHER LARGE SMALL TERM LOAN AUM (₹ crore) ₹ 248 Crore ₹ 135 Crore ₹ 19 Crore CONTRIBUTION TO WHOLESALE AUM 62% 33% 5% LOAN ACCOUNTS 25 33 5 As at 30th June 2023
Slide 19: Wholesale (2/3): Credit appraisal and risk management
BUSINESS VERTICAL CSL FINANCE LIMITED 18 BETTER CUSTOMER SELECTION: STRONG SOURCING • Presence in strategically selected micro-markets of NCR • Excellent understanding of dynamics of each micro-market • Customer selection based on end-use demand • Primarily involved in last-mile funding, thus reduci
Slide 20: Wholesale: Active accounts, LTV, ticket size, tenure
BUSINESS VERTICAL CSL FINANCE LIMITED 19 Wholesale (1/3) ACTIVE ACCOUNTS AVERAGE LOAN-TO-VALUE AVERAGE TICKET SIZE AVERAGE TENURE (#) (%) (₹ crore) (Year) 42 64 40 63 38 12 12 3 3 3 3 3 36 52 33 50 49 11 11 10 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY23 Q1FY23 Q2FY23 Q3FY23
Slide 21: Wholesale Large: Affordable Group Housing
BUSINESS VERTICAL CSL FINANCE LIMITED 20 Wholesale Large: Affordable Group Housing 29% Contribution to Wholesale Approved projects loan book under the Affordable Committed Receivables Housing Policy of are 3x of existing POS Haryana Government Average ticket size Time-linked payment of units is unde
Slide 22: Wholesale Large: Mid-Income Group Housing
BUSINESS VERTICAL CSL FINANCE LIMITED 21 Wholesale Large: Mid-Income Group Housing 30% Contribution to Wholesale Last-mile funded loan book Mid-Income Group Committed Receivables Housing projects are 3x of existing POS Average ticket size Located in of units is under NCR region Salient Features ₹60
Slide 23: Wholesale Small: Small Builders
BUSINESS VERTICAL CSL FINANCE LIMITED 22 Wholesale Small: Small Builders Regulatory compliances are 34% Contribution to minimal as these projects don’t Tenure of these loans Wholesale loan fall under RERA compliances book is under 36 months Risk of non-completion of Small Builder Floors projects is
Slide 24: SME Retail Business Vertical
BUSINESS VERTICAL CSL FINANCE LIMITED 23 Target market: Unbanked & underserved Using alternative data instead of conventional scorecards Swift loans and ease of application SME Small & flexible ticket sizes Achieving efficiency through digital transformation RETAIL Focused on secured lending book (9
Slide 25: SME Retail (1/5)
BUSINESS VERTICAL CSL FINANCE LIMITED 24 SME Retail (1/5) PRODUCTS MID FABRICAT0R JYOTI SAARTHAK SHAKTI SAMADHAN NIRMAN SIZE LAP LOAN ₹2-7.5 ₹5-10 ₹7.5- 25 ₹25-50 ₹35-50 ₹1-5 ₹0.5-5 LOAN AMOUNT Lakhs Lakhs Lakhs Lakhs Lakhs Crores Lakhs TENOR (in years) 3-4 5-6 7 7-8 7 2-3 45-90 Days Small farmers,
Slide 26: SME Retail (2/5): Branch presence
BUSINESS VERTICAL CSL FINANCE LIMITED 25 SME Retail (2/5) PRESENCE BRANCH AGEING < 1 year 20% PUNJAB 02 | 15% HARYANA 04 | 15% NCR 03 | 2% UTTAR PRADESH 01 | 7% 25 1- 3 years 20% BRANCH NETWORK RAJASTHAN GUJARAT UTTARAKHAND AUM > 3 years DISTRIBUTION 60% 07 | 32% 06 | 22% 02 | 7% (in %) Clustered Ap
Slide 27: SME Retail (3/5): Automating workflow
BUSINESS VERTICAL CSL FINANCE LIMITED 26 SME Retail (3/5) AUTOMATING WORKFLOW TO IMPROVE EFFICIENCY LOAN LOAN LOAN ORIGINATION DISBURSEMENT EVALUATION & COLLECTION • Customer on-boarding & authentication • Multi Bureau checks + CIBIL Auto analysis • 100% cashless, E-disbursement of loan amount • Geo
Slide 28: SME Retail (4/5): Roadmap Going Forward
CSL FINANCE LIMITED 27 SME Retail (4/5) Roadmap Going Forward H1 FY24 • Business Rule Engine • Airtel Payments Bank Integration for cash deposit point • Data Analytics FY23-FY24 • BI Dashboards • Lead Management System Migrated to a bespoke customer onboarding & loan underwriting platform with multi
Slide 29: SME Retail (5/5)
BUSINESS VERTICAL CSL FINANCE LIMITED 28 SME Retail (5/5) ACTIVE ACCOUNTS AVERAGE LOAN-TO-VALUE AVERAGE TICKET SIZE AVERAGE TENURE (#) (%) (₹ lakh) (Year) SME SME SME SME 11 2,076 2,186 34 34 10 10 1,876 9 9 6 6 6 6 6 1,530 1,686 27 26 26 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY23 Q3FY23 Q4FY2
Slide 30: Prudent Risk Management
03/ Prudent Risk Management Well Managed ALM Conservative Leverage Standards CSL FINANCE LIMITED
Slide 31: Well Managed ALM
CSL FINANCE LIMITED 30 Well Managed ALM CUMULATIVE INFLOW - OUTFLOW 24 28 37 47 232 288 0 400 379 377 350 300 250 193 200 150 93 83 89 100 78 42 31 37 50 18 26 29 22 0 >1 month >2-3 month >3-6 month >6-12 months 1-3 Years 3-5 Years Over 5 Years Total Inflow Total Outflow
Slide 32: Conservative Leverage Standards
CSL FINANCE LIMITED 31 Conservative Leverage Standards CONSERVATIVE LEVERAGE THRESHOLD: 1.5-2X in Wholesale & <4X in SME 400 90% 362 79% 350 80% 73% 320 65% 66% 70% 300 64% 259 60% 250 233 215 ₹30 50% Crore 200 184 Equity Fund 50% raise in 40% ₹54 FY22 150 Crore 1.13 30% Equity Fund raise in 100 FY1
Slide 33: Leadership
04/ Leadership Board of Directors Leadership Team CSL FINANCE LIMITED
Slide 34: Board of Directors
CSL FINANCE LIMITED 33 Board of Directors ROHIT GUPTA ASHOK KUMAR PARMOD BINDAL CHANDER SUBHASH MANAGING DIRECTOR KATHURIA INDEPENDENT DIRECTOR KWATRA DIRECTOR INDEPENDENT DIRECTOR Mr Rohit Gupta has over two decades of Mr Kathuria has been associated with the Mr Parmod Bindal has been a Chartered M
Slide 35: Management Team
CSL FINANCE LIMITED 34 Management Team Work Experience Years at CSL ROHIT GUPTA NARESH VARSHNEY AMIT RANJAN CHANDAN KUMAR RACHITA GUPTA RANJAN BANERJEE MANAGING CHIEF FINANCIAL CHIEF WHOLESALE WHOLE-TIME DIRECTOR ZONAL CREDIT HEAD SME DIRECTOR OFFICER OPERATING OFFICER CREDIT HEAD 28+ 17+ 26+ 8+ 18+
Slide 36: Strategy
05/ Strategy Strategic Priorities Key Takeaways CSL FINANCE LIMITED
Slide 37: Strategic Priorities
CSL FINANCE LIMITED 36 Strategic Priorities FULL-FLEDGED LAUNCH OF LEVERAGING RATIONAL- OPTIMISING FOCUSING ON CUSTOMER CREDIT RATING TECHNOLOGY ONBOARDING & ISATION OF BRANCH ADDING UPGRADE TO STRENGTHEN LOAN PORTFOLIO PERFORMANCE COMPETENCIES OPERATIONS UNDERWRITING PLATFORM • In the recent credit
Slide 38: Key Takeaways
CSL FINANCE LIMITED 37 01 WELL CAPITALISED CSL is a well-capitalised lender with a superior Capital Adequacy Ratio. 02 BBB+ RATED CSL has recently upgraded to BBB+, achieving the crucial AA credit rating will help in raising debt at competitive terms, and open doors to a new set of lenders. Key GEAR
Slide 39: Safe Harbour
CSL FINANCE LIMITED 38 Safe Harbour This presentation may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations and on certain assumptions of the management of CSL Finance Limited (“CSL”). Actual results may vary from the forward-l