Capri Global Capital Limited · NSE:CGCL
Capri Global Capital — Q3 FY2019 Earnings Presentation
42 slides from Capri Global Capital's earnings presentation, Feb 4, 2019
Slide 1: Covering letter to stock exchanges
◄ ► February 04, 2019 To, BSE LIMITED NATIONAL STOCK EXCHANGE OF PJTowers INDIA LIMITED Dalal Street, Fort, Listing Department Mumbai 400 001 Exchange Plaza, 5th Floor, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 Company Code No.: 531595 Company Code: CGCL Dear Sir / Madam, Sub: Disclosure
Slide 2: Q3 Earnings Presentation & Liquidity Update
Q3 Earnings Presentation & Liquidity Update 04 February, 2019
Slide 3: Disclaimer
Disclaimer This presentation is for information purposes only and does not constitute an offer, solicitation or advertisement with respect to the purchase or sale of any security of Capri Global Capital Limited (the “Company”) and no part of it shall form the basis of or be relied upon in connection
Slide 4: Capri Global Capital: An Introduction
Capri Global Capital: An Introduction A diversified Non-Banking Financial Company (NBFC) with presence across high growth segments like MSME, Construction Finance, Affordable Housing and Indirect Retail Lending segments Promoted by first generation entrepreneur, Mr. Rajesh Sharma, Capri Global C
Slide 5: Capri Global Capital: Banking the Unbanked
Capri Global Capital: Banking the Unbanked 9MFY19 At A Glance Total AUM* INR 36.82 billion MSME AUM 14,500+ Live Accounts INR 18.22 billion CF + IRL AUM INR 12.45 billion 1,850+ Employees HL AUM INR 6.15 billion 8 States Total Disbursements INR 17.4 billion 82 PAT Branches INR 0.86 billion Net Worth
Slide 6: Q3FY19: At a glance..
Q3FY19: At a glance.. Consolidated numbers NII (INR MN) PAT (INR MN) AUM (INR MN) 902 352 36,824 277 649 24,451 Q3FY18 Q3FY19 Q3FY18 Q3FY19 Q3FY18 Q3FY19 Capital Adequacy Ratio* (%) Gross NPA (%) Net NPA (%) 43% MSME + CF + IRL HF MSME + CF + IRL HF 2.30 2.05 1.45 1.29 37% 0.55 0.23 Q3FY18 Q3FY19 Q3
Slide 7: Q3FY19: MSME Lending Aiding Robust Disbursals
Q3FY19: MSME Lending Aiding Robust Disbursals Consolidated numbers AUM - Segmental Breakup Disbursements - Segmental Portfolio Yield (%) (INR Mn) Breakup (INR Mn) 16.62% 16.28% 18,223 15.32% 14.49% 13.95% 2074 1,960 13.09% 14,583 12.43% 1739 1595 11,525 8,526 6,154 755 689 1,343 922 - - 30 - Q3FY18
Slide 8: Asset-Liability Split: Consistent Mix
Asset-Liability Split: Consistent Mix All amounts in INR Mn 31st December, 2018 31st March, 2018 15,616 Have consistently 12,760 remained cautious 11,983 14,412 11,137 13,130 10,512 about short-term 11,385 asset & liability 10,515 10,267 7,604 9,020 mismatches by ensuring optimally matched Balance
Slide 9: Q3FY19: Performance Summary
Q3FY19: Performance Summary All amounts in INR Mn except stated Particulars Q3FY18 Q3FY19 Y-o-Y (%) Q2FY19 Q-o-Q (%) Net Interest Income (NII) 648.6 901.7 39.0% 747.9 20.5% Interest Expense 281.5 602.6 114.0% 468.6 28.5% Net Interest Margin (NIM)% 11.2% 10.1% (1.1)% 9.1% 1% PAT 277.2 352.0 26.9% 245
Slide 10: 9MFY19: Performance Summary
9MFY19: Performance Summary All amounts in INR Mn except stated Particulars 9MFY18 9MFY19 Y-o-Y (%) Interest Income 2,336.6 3,706.5 58.6% Interest Expense 655.7 1,447.1 120% Net Interest Margin (NII) 1,680.9 2,259.3 34.4% PAT 551.2 867.8 57.4% Annualized RoE (%) 8.6% 8.9% 0.3% Return on Average Asse
Slide 11: Stable Asset Quality: Stage Analysis As per IND-AS
Stable Asset Quality: Stage Analysis As per IND-AS All amounts in INR Mn except stated Provision Analysis as per INDAS Q3FY18 Q3FY19 Q2FY19 Stage 3 - Gross 474.17 739.69 554.26 Stage 3 – ECL Provisions 57.63 107.99 72.34 Stage 3 – Net 416.54 631.70 481.91 Stage 3 – Coverage Ratio 12.15% 14.60% 13.05
Slide 12: The CGCL Advantage: Optimal Mix of Borrowings & Lending
The CGCL Advantage: Optimal Mix of Borrowings & Lending Competitive Higher borrowing costs Tightening Liquidity Retail Lending Advantage >> Declining NIMs Liquidity mgmt As global & domestic Retail loans are measures from RBI liquidity tightens, high amortized on a could force NBFCs to Industry Scen
Slide 13: CGCL: Strong Liquidity Position
CGCL: Strong Liquidity Position Current Assets ( INR Mn) 89 Capital Adequacy (%) 79.7 1002.07 892.7 825 53 39.3 37 505.1 415.4 443.08 346.9 313.6 181.2 114.1 FY15 FY16 FY17 FY18 9MFY19 FY15 FY16 FY17 FY18 9MFY19 Current Investments Cash Equivalents Series 1 Average quarterly Powerful liquidity Stron
Slide 14: Liability Mix: The Low Cost Benefit
Liability Mix: The Low Cost Benefit Total Borrowings (INR Mn) & Borrowing Mix Higher Share of Bank Borrowing >> Lower Overall Cost of Borrowing 1,960 7,280 15,520 17,590 22,680 24,527 Low exposure to short-term money market 100% 97% signifies low probability of default 87% 92% CGCL’s prudence in
Slide 15: Adequate Financing for Future Growth
Adequate Financing for Future Growth Numbers of Lenders 20 Total amount sanctioned from banks 31,900 Mn Total outstanding amount on CGCL’s books 23,677 Mn % of total sanctioned amount still undrawn from banks 9.8% Undrawn limits on Banks (as on 31st December, 2018) INR 1,065 Mn INR 250 Mn INR 300 Mn
Slide 16: Judicious Approach to Lending: Mindful & Stable Growth Guidance
Judicious Approach to Lending >> Mindful & Stable Growth Guidance Turned cautious on low yielding Indirect Lending Segment & large-ticket Construction Finance Focus on direct sourcing & cross-selling in MSME as well as housing finance segments Under-achieved Indirect Retail Lending FY19 GUIDANCE
Slide 17: Capri Global Capital In a Nutshell
Capri Global Capital In a Nutshell An upcoming Diversified NBFC with OUR MISSION OUR BUSINESS MODEL presence across high growths segments like ‘Our mission is to shape this future • Small-ticket, retail-focused MSME, Construction Finance, Affordable and create a solid social impact segments: MSME
Slide 18: Small Loans: Niche Capabilities
Small Loans: Niche Capabilities MSME Construction Finance Housing Finance Indirect Lending ~ 50 % of AUM ~ 31 % of AUM ~ 17 % of AUM <1 % of AUM • Focus on Tier II & III • Project outreach: • Affordable housing • NBFC Outreach: cities; Customer 144 customers in Tier II • Financing to other outreach:
Slide 19: Annexure: About CGCL & Industry Scenario
Annexure: About CGCL & Industry Scenario
Slide 20: MSME Lending: A Huge Unexplored Opportunity
MSME Lending: A Huge Unexplored Opportunity MSME credit to grow at 12-14% over 5 years: The NBFC Advantage in MSME Funding ICRA Lack of formal avenues for financing ensures low penetration from banks Non-bank share in MSME credit pie should expand to 22-23% Banks face issues in financing MSMEs d
Slide 21: MSME: Small Loans, Big Opportunity
MSME: Small Loans, Big Opportunity Focus Area MSME Assets by Geography 4% 2% 5% Delhi NCR 9% 38% Maharashtra Gujarat Micro Enterprise Small Enterprise MP • Self Employed Individuals – • Small enterprises with 20% Rajasthan Provision stores, retail formal income Punjab outlets, handicrafts etc docume
Slide 22: MSME: Enabling Superior Growth
MSME: Enabling Superior Growth Disbursals (INR Mn) Average Ticket Size (INR Mn) 4.3 7,910 7,230 5,920 2.6 1.4 FY17 FY18 9MFY19 FY17 FY18 9MFY19 Direct Sourcing (AUM) 66% 55% 35% FY17 FY18 9MFY19
Slide 23: Affordable Housing: Large Demand & Low Formal Financing
Affordable Housing: Large Demand & Low Formal Financing Housing Shortage Urban Housing shortage pegged to reach 34.1 million 43.7 96% shortage in units by 2022 EWS & LIG 95%+ of the shortage corresponds to Lower Income LIG, 40% 18.8 Group (LIG) & Economically Weaker Sections (EWS) EWS, 56% In 2015,
Slide 24: Housing Finance: Capitalising on Affordable Housing Opportunity
Housing Finance: Capitalising on Affordable Housing Opportunity Focus Area HF Lending Portfolio by Geography • Serves middle and lower middle income population in Tier 2 and 3 cities 11% • Ventures in 2016 through its subsidiary 13% 37% Maharashtra – Capri Global Housing Finance Limited Gujarat Delh
Slide 25: Housing Finance: Exponential Growth Potential
Housing Finance: Exponential Growth Potential Disbursals (INR Mn) Average Ticket Size (INR Mn) 1.5 4,132 1.1 1 2,404 65 FY17 FY18 9MFY19 FY17 FY18 9MFY19 Portfolio Yield (%) 13% 13.09% 12% FY17 FY18 9MFY19 Note: FY18 was the 1st full year of operations
Slide 26: Urban Construction Finance: Significant Scope of Growth
Urban Construction Finance: Significant Scope of Growth Recent Government Initiatives to promote affordable Demand Drivers for Growth in Indian Mortgage Market housing construction • 100% tax exemption on affordable housing • 66% of India’s population is aged below 35 years, construction projects fo
Slide 27: Construction Finance: The Retail Way
Construction Finance: The Retail Way • Exposure to Mumbai region at 37% Addressing Concentration • Reduced average interest rates to in FY18 vs 69% in FY16 Risk 14-16% from 18-20% to target larger • 6 new geographies added in 2 years: developer audience Ahmedabad, Chennai, Vijaywada, etc • Aim to sp
Slide 28: Construction Finance: Building a Sustainable Future
Construction Finance: Building a Sustainable Future Focus Area CF Lending Portfolio by Geography 1% 1% • Construction linked loans to small and 3% 3% midsize real estate developers 3% Mumbai 4% Pune 32% • Comprehensive framework for project Bangalore Ahmedabad selection and credit appraisal 10% Delh
Slide 29: Construction Finance: High Yield, Low Risk
Construction Finance: High Yield, Low Risk Disbursals (INR Mn) Average Ticket Size (INR mn) 277 8,240 5,990 6,334 99.2 80 FY17 FY18 9MFY19 FY17 FY18 9MFY19 Portfolio Yield (%) 17% 16.28% 16% FY17 FY18 9MFY19
Slide 30: Indirect Retail Lending: Unique Product Offering
Indirect Retail Lending: Unique Product Offering Focus Area AUM Disbursements Lending to small NBFCs engaged in INR 922 Mn INR 995 Mn o MSME Lending and Microfinance o Two Wheelers and Commercial Vehicles finance Hypothecation of receivables - 1 to Ticket Size Range Customers 1.2X cover INR 50-2
Slide 31: Strong Focus on MSME: 7x in 4 years
Strong Focus on MSME: 7x in 4 years NII (INR Mn) PAT (INR Mn) 1,040 2,100 952 852 1,681 1,671 1,495 1,301 581 436 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Loans & Advances (INR Mn) Total Assets (INR Mn) 30,107 MSME Construction Finance 15,592 12,138 19,861 10,541 7,571 13,204 11,641 5,057 6
Slide 32: Moving Towards Higher Growth
Moving Towards Higher Growth Net Interest Margin (%) Pre-Tax RoCE (%) Spread (%) 5.6 14.7 5.07 4.93 19.7 14.8 10.4 3.22 11.6 9.3 8.5 5.7 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Return on Equity (%) Cost to Income Ratio (%) Capital Adequacy (%) 44 45 89 9.3 8.6 79.7 27 53 5.1 22 4
Slide 33: Prudent Asset Mix
Prudent Asset Mix Disbursement Mix (INR Mn) AUM Mix (INR Mn) MSME CF IL HL MSME CF IL HL 8,240 15,413 7,915 7,230 12,027 5,990 9,427 4,760 7,484 5,999 3,058 2,922 2,786 5051 4,865 2,420 4,415 2,108 2,080 3,113 2311 2,450 1,100 1,100 65 65 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 All numbers
Slide 34: Q-o-Q Performance
Q-o-Q Performance Net Interest Margin (%) Spread (%) 10.1% 6.9% 5.7% 4.9% 9.3% 4.2% 9.1% 8.7% Q4 FY'18 Q1 FY'19 Q2 FY'19 Q3 FY'19 Q4 FY'18 Q1 FY'19 Q2 FY'19 Q3 FY'19 Return on Equity (%) Return on Total Average Asset(%) 10.6% 3.6% 3.7% 3.5% 8.6% 8.6% 2.9% 7.7% Q4 FY'18 Q1 FY'19 Q2 FY'19 Q3 FY'19 Q4
Slide 35: Strong Asset Quality
Strong Asset Quality As per IGAAP NNPA% Provisions (INR Mn) GNPA% Provisions Held Provisions Required 337.1 196.3 210.5 1.68% 1.44% 102.8 0.97% 0.88% 0.98% 0.88% 75.2 65.2 0.75% 0.84% 36.6 39.7 FY 15 FY 16 FY 17 FY 18 FY 15 FY 16 FY 17 FY 18 FY15 FY16 FY17 FY18 As per IND-AS Loss given Default (%) P
Slide 36: NPA Analysis: Prudent Lending Practises
NPA Analysis: Prudent Lending Practises CGCL (Standalone) FY16 FY17 FY18 GNPA Product Segment wise - FY18 (INR MN) 150 DPD 120 DPD 90 DPD Coverage NPA Recognition Norms Product Segment GNPA % NNPA % Ratio GNPA 97 178 439 NNPA 83 152 374 MSME 2.23% 1.93% 53.43% Provisions 14 26 64 Construction Financ
Slide 37: Income Statement
Income Statement INR Mn FY17 FY18 9MFY19(as per IND-AS) Total interest earned 2051.6 3128.1 3810.5 Total interest expended 379.9 1,020.4 1447.1 Net interest income 1671.7 2107.7 2363.4 Non-interest income 299.2 818.9 303.5 - loan processing fees 105.3 335.4 * - Profit on sale of investments 81.6 241
Slide 38: Balance Sheet
Balance Sheet INR Mn FY17 FY18 H1FY19(as per IND-AS) Share Capital 350.3 350.3 350.3 Reserves and Surplus 11,256.3 12,235.7 12,668.9 Networth 11,606.5 12,586.0 13,019.2 Borrowings 7,278.6 15,742.7 23,858.6 Current liabilities and provisions 794.8 1,529.5 239.6 Other Non Current Liabilities and provi
Slide 39: Leadership Team
Leadership Team Surender Sangar Vikas Sharma Vijay Gattani Hemant Dave Head – Construction Finance Business Head (MSME & HL) Senior Vice President - Credit Head of Operations Ex-MD – Tourism Finance Corporation Ex - Kotak Mahindra Bank, Dhanlaxmi Ex-ICICI Bank, Head of Credit & Ex - Kotak Mahindra B
Slide 40: Board of Directors
Board of Directors Quintin E. Primo III Rajesh Sharma T. R. Bajalia Bhagyam Ramani Non-Executive Chairman Managing Director Independent Director Independent Director Co-founder & CEO of Capri Founder & promoter Ex-DMD – SIDBI, Ex- GM and Director of General Investment Group, Chicago Over 23 years of
Slide 41: Key Partnerships
Key Partnerships Lenders Auditors & Advisors
Slide 42: Thank You
Thank You Contact Details Ms. Sheetal Khanduja Go India Advisors +91 9769364166 sheetal@goindiaadvisors.com Ms. Tanya Khosla Go India Advisors +91 9769387813 tanya@goindiaadvisors.com
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