Poonawalla Fincorp Limited · NSE:POONAWALLA
Poonawalla Fincorp — Q1 FY22 Earnings Presentation
52 slides from Poonawalla Fincorp's earnings presentation, Aug 14, 2021
Slide 1: Intimation of Investor Presentation to Stock Exchanges
14 August 2021 The Manager, Listing Department, National Stock Exchange of India Limited Exchange Plaza, Bandra- Kurla Complex, Bandra (E). Mumbai-400051 Symbol : POONAWALLA BSE Limited Corporate Relationship Department 25th floor, Phiroze Jeejeebhoy Towers Dalal Street Mumbai-400001 Company Code: 5
Slide 2: Poonawalla Fincorp Limited Investor Presentation Q1FY22
Poonawalla Fincorp Limited (Formerly known as Magma Fincorp Limited) Investor Presentation Q1FY22
Slide 3: Agenda
Agenda Key Developments Post Transaction Board of Directors and Management Team Business Strategy Business and Financial Update – Consolidated Business and Financial Update – Subsidiary / Joint Venture 2
Slide 4: 1. Key Developments Post Transaction
1. Key Developments Post Transaction
Slide 5: Transition Update
Transition Update… Equity infusion of ₹3,456 crore in PFL Mr. Adar Poonawalla appointed as the Chairman of PFL and PHFL Mr. Abhay Bhutada appointed as the Managing Director of PFL Appointment of Group CEO & Group CFO along with other senior management personnel Magma Fincorp Ltd. Poonawalla Finc
Slide 6: …and Business transformation
…and Business transformation Leadership team strengthened across functions Product suite realigned for better risk-adjusted returns Revised credit policies with stringent parameters implemented across existing and new business lines Use of Data analytics for delivering targeted value proposition for
Slide 7: Unique Positioning
Unique Positioning One of the largest capital base amongst Strong parentage to result in efficient cost of private NBFCs borrowing and likely improvement in credit rating Well-capitalized Balance Sheet with low leverage Financial Strong Strong financial profile of the group’s flagship Positi
Slide 8: Holding Structure & Shareholding Pattern
Holding Structure & Shareholding Pattern Rising Sun Holdings Private Shareholding (30-Jun-21) Limited (owned and controlled by Mr. Adar Poonawalla) Public, 10.85% Domestic 59.92% Investors, 7.26% Poonawalla Fincorp Limited FII, 5.34% Overseas Bodies, 3.35% Promoters, 100% 36.43% 73.20% Magma HDI Gen
Slide 9: 2. Board of Directors and Management team
2. Board of Directors and Management team
Slide 10: Board of Directors
Board of Directors Mr. Adar Poonawalla Mr. Abhay Bhutada Mr. Sanjay Chamria Mr. Amar Deshpande Chairman & Managing Director Executive Non-Executive Director Non-Executive Director Vice Chairman Ms. Vijayalakshmi R. Iyer Mr. Bontha Prasad Rao Mr. Sajid Fazalbhoy Mr. Prabhakar Dalal Non-Executive Non-
Slide 11: Management Team
Management Team Abhay Bhutada Manish Kumar Managing Director Group Chief Human Resources Officer Previously, MD & CEO at Poonawalla Finance Previously, President and CHRO at Ziqitza Healthcare Limited Vijay Deshwal Mahender Bagrodia Group Chief Executive Officer Head Collections Previously, Business
Slide 12: 3. Business Strategy
3. Business Strategy
Slide 13: Management Vision 2025
Management Vision 2025 To be amongst Top 3 NBFCs for consumer and small business finance “To be a diversified tech- enabled NBFC focused on risk Risk-calibrated accelerated growth ~3x of Current AUM calibrated growth, with customer centric approach, Amongst the lowest COF in the industry ~250 bps re
Slide 14: Core Strategic Pillars
Core Strategic Pillars Building on benefits derived End-to-end digitization using Capital from being part of the data analytics and Digital Poonawalla group Parentage 1 7 Focus 2 6 Highly experienced Professional Asset Quality Focus on asset quality management team with Management and Risk through r
Slide 15: Phased Strategy Execution
Phased Strategy Execution Consolidate-Grow-Lead Consolidate Grow Lead (1-9 months) (9-18 months) (18-36 months) • People • Introduce new products and • Leadership in chosen Products expand cross sell • Products • Leadership in chosen • Build branch lite model Geographies • Branches • Enhance digital
Slide 16: Multi-tiered Customer Proposition
Multi-tiered Customer Proposition PRICE - Competitive and Transparent Shall offer products at competitive and transparent pricing to ensure we are always in the top consideration set TURNAROUND – Best in class Shall offer the best turnarounds with lean & agile backend operations by leveraging techno
Slide 17: Product Strategy Roadmap
Product Strategy Roadmap Existing Products Q2FY22 Q3FY22 Q4FY22 Pre-owned Cars Personal Loan Small ticket LAP Consumer Durables Business Loans Loan to Professionals Merchant Cash Advance EMI Card Affordable Home Loan LAP Co-branded Credit Card Supply Chain Finance Affordable LAP Medical Equipment Lo
Slide 18: Digital Focus
Digital Focus Best-in-class Technology & Analytics Technology Led Acquisition Strength Expand Technology capabilities through a Building direct acquisition channel via Digital dedicated technology center in Pune which will to ensure that the customer ownership and form backbone for all technology re
Slide 19: Digital Focus
Digital Focus Infrastructure & Architecture to Support Scalable & Efficient Device Agnostic Cloud Based Infrastructure Best-in-Class Monitoring State of the art security 18
Slide 20: End to End Digital Focus – Customer Acquisition
End to End Digital Focus – Customer Acquisition Best-in-class technology & analytics 1. Digital Acquisition 2. Online Channel Partner Login Strong digital acquisition channel Online platform for channel partners to for direct business digitally login the loan applications 7. Technology Enabled Custo
Slide 21: Illustration: E2E Digitized Process
Illustration: E2E Digitized Process Online Online Business Approval Online Application Verification Rule E Agreement Disbursement Journey & Checks Engine E Nach Seamless Integration of Website, API factory, CRM, LOS & LMS Real Time Multi-channel DIY Journey Smart Workflow Intelligent BRE Integration
Slide 22: Data Science and Analytics
Data Science and Analytics Sales & Distribution Credit Risk & Monitoring Collections Optimization Impact Areas Impact Areas Impact Areas • Selection of customer segments and • Underwriting using multiple variables • Predictive models to identify default geographies on data analytics based architectu
Slide 23: Liability Strategy
Liability Strategy Building an Efficient Liability Franchise Diversification of liabilities • Diversified relationship across banks, mutual funds, insurance companies and other capital market lenders • Progressive increase in capital market borrowings to reach steady state range of 40%-45% Robust Li
Slide 24: Robust Risk Management Framework
Robust Risk Management Framework Board of Directors Risk Management Committee ALCO Audit Committee IT Security Committee Independent Risk Management Unit 1st line of defense 2nd line of defense 3rd line of defense Operational and Business Credit Governance, Operational Risk, Independent Assurance Un
Slide 25: 4. Business and Financial Update
4. Business and Financial Update
Slide 26: Executive Summary
Executive Summary AUM NIM and Profitability AUM at ₹14,424 crore flat on QoQ basis due to COVID-19 restrictions across the country. Q1FY22 NIM was 7.9%, up from 6.8%% in Q1FY21 AUM of Continued products increased by ~6% on YoY Consolidated PBT for Q1FY22 at ₹81 crore, up 72% YoY basis and ~1
Slide 27: Key Financial Parameters
Key Financial Parameters Disbursement AUM Gross and Net Stage 3 % 15,922 1,732 14,225 14,424 5.8% 1,426 5.4% 3.7% 3.7% 2.7% 1.2% 216 Q1FY21 Q4FY21 Q1FY22 Jun-20 Mar-21 Jun-21 Jun-20 Mar-21 Jun-21 CRAR Leverage Net Worth 57.8% 4.8 4.2 5,722 26.0% 2,796 20.3% 1.3 2,194 Jun-20 Mar-21 Jun-21 Jun-20 Mar-
Slide 28: Diversified AUM Mix
Diversified AUM Mix Product-wise On book vs Off book Zone-wise 15% 10% 19% 10% 36% 44% 18% 32% 90% 26% Pre-owned cars Business loans On-book Off-book North South East West Mortgage Discontinued products* Well diversified portfolio across products as well as geographies; 97% portfolio secured by coll
Slide 29: Asset Quality
Asset Quality PFL PHFL Consol Jun-20 Mar-21 Jun-21 Jun-20 Mar-21 Jun-21 Jun-20 Mar-21 Jun-21 Stage 1 PCR (%) 1.4% 4.9% 1.6% 0.3% 1.0% 0.4% 1.2% 4.0% 1.3% Stage 2 PCR (%) 15.4% 29.7% 22.4% 16.1% 21.8% 14.1% 15.4% 28.4% 20.8% Stage 1 & 2 PCR (%) 2.9% 8.5% 5.3% 0.8% 2.8% 2.2% 2.5% 7.2% 4.5% Gross Stage
Slide 30: Asset Quality
Asset Quality Collection Efficiency Trending Towards Pre-covid Levels Restructuring Total restructured assets as at 30-Jun-21 was ₹854 crore (5.9% of AUM), of which portfolio restructured under Resolution Framework – 2.0 is ₹325 crore Out of total restructured assets of ₹854 crore, ₹510 crore (6
Slide 31: Strong ALM Profile with Adequate Liquidity
Strong ALM Profile with Adequate Liquidity Liquidity update (Consolidated) Structural Liquidity – PFL (Standalone) 1580% 4,604 4,186 4,327 3,820 • Overall available liquidity of ₹3,238 crore 3,538 3,172 1127% • Additional undrawn sanctions in hand ₹625 crore 701% 583% • Borrowing mix: Term loan - 37
Slide 32: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Q1FY22 Q4FY21 Q1FY21 FY21 Particulars Q1FY22 Q4FY21 Q1FY21 FY21 AUM 14,424 14,225 15,922 14,225 7.9% 9.2% 6.8% 8.2% NIM (incl. fee income) 284 337 274 1,252 4.3% 4.0% 3.4% 3.6% Opex# 155 145 136 542 3.6% 5.2% 3.4% 4.7% Pre Provision Operating Profit 129 191 138 7
Slide 33: 5. Business & Financial Update – Subsidiary / Joint Venture
5. Business & Financial Update – Subsidiary / Joint Venture
Slide 34: Poonawalla Housing Finance Limited (Subsidiary)
Poonawalla Housing Finance Limited (Formerly known as Magma Housing Finance Limited) (Subsidiary)
Slide 35: Key Financial Parameters
Key Financial Parameters Disbursement AUM Gross and Net Stage 3 % 3,978 4,047 1.9% 484 3,400 1.6% 1.6% 1.2% 1.0% 248 0.8% 133 Q1 FY21 Q4 FY21 Q1 FY22 Jun-20 Mar-21 Jun-21 Jun-20 Mar-21 Jun-21 CRAR Leverage Net Worth 57.6% 5.1 4.5 1,007 34.6% 30.5% 2.1 486 497 Jun-20 Mar-21 Jun-21 Jun-20 Mar-21 Jun-2
Slide 36: Diversified AUM Mix
Diversified AUM Mix Product-wise On book vs Of book Zone-wise 0.4% 25% 33% 33% 39% 61% 75% 8% 26% HL LAP CF On-book Off-book North South East West With the new capital infused, the company is poised for accelerated growth in AUM 35
Slide 37: Business Update
Business Update Average Ticket size (₹ in lakhs) Home Loan Ratio (Units) 30.6 75% 19.8 65% 67% 66% 13.4 10.8 10.7 11.0 10.9 37% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 Q1FY22 Home Loans Ratio in fresh disbursement has grown Shift towards granular affordable housing portfolio from 37%
Slide 38: Strong ALM Profile with Adequate Liquidity
Strong ALM Profile with Adequate Liquidity Liquidity update Structural Liquidity for PHFL 1,476 440% • Overall available liquidity of ₹391 crore 949 • Additional undrawn sanctions in hand ₹175 crore 221% • Borrowing mix: Term loan - 66% , PTC - 6%, NCD 179% 430 420 455 406 389 - 21%, Perpetual and S
Slide 39: Profit & Loss Statement
Profit & Loss Statement Q1FY22 Q4FY21 Q1FY21 FY21 Particulars Q1FY22 Q4FY21 Q1FY21 FY21 AUM 4,047 3,978 3,400 3,978 5.1% 8.4% 4.8% 6.8% NIM (incl. fee income) 51 81 40 247 2.8% 3.2% 2.7% 2.8% Opex 28 31 22 103 2.3% 5.2% 2.1% 4.0% Pre Provision Operating Profit 23 50 18 144 1.1% 8.1% 1.0% 3.6% Credit
Slide 40: Magma HDI General Insurance Limited (Joint Venture)
Magma HDI General Insurance Limited (Joint Venture)
Slide 41: Quick Snapshot
Quick Snapshot One of the highest claims settlement ratio companies for Motor Own Damage (94%) in FY21 One of the lowest Motor Own Damage loss ratio in Industry: 44.9% as at FY21 One of the Top 5 companies with least number of complaints intimated per 10,000 policies issued in FY21 One of the lowest
Slide 42: Built on Strong Risk Foundation
Built on Strong Risk Foundation The Company has achieved robust growth rate over the years GWP FY18 – FY21 CAGR ~34% 1,294 1,349 1,026 560 35% 323 240 FY18 FY19 FY20 FY21 Q1FY21 Q1FY22 GWP 560 1,026 1,294 1,349 240 323 Magma HDI Growth 32% 83% 26% 4% -17% 35% Industry Growth 17% 13% 12% 6% -4% 14% V
Slide 43: Diversified Distribution & Portfolio Mix
Diversified Distribution & Portfolio Mix -30% 12% 224% 63% 46% 10% Distribution Mix & 115 102 Growth 43% 31% 36% 37 42 29% 18 13% 10 11% 11% 11% 2% 3% 6% 5% Corporate Agency Agency & Others Banca & Others OEM Commercial Business e-Sales & MSME Q1FY21 Q1FY22 GWP Growth Growth Portfolio Mix & Growth M
Slide 44: Enhancing Distribution Through Partnerships
Enhancing Distribution Through Partnerships Offices & Channel Partners FY19 FY20 FY21 Q1FY22 Number of Branches 169 170 133 132 Agents + POS* + MISP# 5,028 6,558 7,614 7,984 Corporate Agents 7 13 11 11 OEM^ Tie-ups 1 6 14** 14 Number of Districts where policies are issued : 574 Number of Districts whe
Slide 45: Strong Growth in Retail Health & Fire
Strong Growth in Retail Health & Fire Motor GWP and Share Retail Run Rate 80% 304 320 73% 72% 258 221 66% 64% 170 86 101 107 74 747 1029 57 969 159 207 FY19 FY20 FY21 Q1FY21 Q1FY22 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 GWP Share Qtrly Retail Business Mthly Retail Run Rate Commercial GWP, Health GWP and
Slide 46: Continuous Accretion in Investment Book
Continuous Accretion in Investment Book Combined Ratio Movement Investment Book & Leverage ratio 120.7% 120.0% 124.5% 121.5% 112.1% 7.2 6.9 36.4% 40.3% 40.6% 45.9% 41.5% 5.4 4.7 2,994 3,146 84.3% 79.6% 83.8% 2,285 70.6% 75.6% 1,462 FY19* FY20 FY21 Q1FY21 Q1FY22 FY19 FY20$ FY21 Q1FY22 Loss Ratio Exp
Slide 47: Profit & Loss Statement (Ind AS)
Profit & Loss Statement (Ind AS) Particulars Q1FY22 Q1FY21 Q4FY21 FY21 Gross Written Premium 323 240 438 1349 Net Written Premium 181 138 237 798 Net Earned Premium 202 188 192 762 Net Claims Incurred 153 157 150 607 Net Commission (12) (10) (17) (55) Management Expenses 96 66 114 382 Impairment los
Slide 48: Annexure
Annexure
Slide 49: PFL Standalone Profit & Loss Statement
PFL Standalone Profit & Loss Statement Q1FY22 Q4FY21 Q1FY21 FY21 Particulars Q1FY22 Q4FY21 Q1FY21 FY21 AUM 10,671 10,563 12,903 10,563 8.7% 9.2% 7.1% 8.4% NIM (incl. fee income) 231 256 233 1,002 4.8% 4.1% 3.5% 3.7% Expenses# 127 115 114 440 3.9% 5.1% 3.7% 4.7% Pre Provision Operating Profit 103 140
Slide 50: Disclaimer
Disclaimer This presentation has been prepared by Poonawalla Fincorp Limited (the “Company”), for general information purposes only, without regard to any specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation or form part
Slide 51: Disclaimer (Contd.)
Disclaimer (Contd.) The information contained in these materials has not been independently verified. None of the Company, its directors, promoter or affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability what
Slide 52: Thank You!
POONAWALLA FINCORP Thank You! www.poonawallafincorp.com