Csl Finance Limited · NSE:CSLFINANCE
Csl Finance — Q3 FY23 Earnings Presentation
39 slides from Csl Finance's earnings presentation, Jan 30, 2023
Slide 1: Exchange filing cover letter: Investor Presentation
CIN: L74899DL1992PLC051462 January 30, 2023 National Stock Exchange of India Limited BSE Limited Exchange Plaza, Corporate Relationship Department C-1, Block-G, Bandra Kurla Complex, Phiroze, Jeejeebhoy Towers Bandra (E), Mumbai – 400051 Dalal Street, Mumbai-400001 NSE Symbol: CSLFINANCE BSE Scrip C
Slide 2: Q3FY23 Investor Presentation
Q3FY23 Investor Presentation 2023
Slide 3: Inside the document
Inside the document 01 QUARTERLY BUSINESS UPDATE 02 ABOUT CSL FINANCE 03 PRUDENT 04 LEADERSHIP RISK MANAGEMENT 05 STRATEGY CSL FINANCE LIMITED
Slide 4: Quarterly Business Update
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 5: Loan Book Size
CSL FINANCE LIMITED 4 Loan Book Size DISBURSEMENTS COLLECTIONS LOAN BOOK COLLECTION EFFICIENCY (₹ crore) (₹ crore) (₹ crore) (%) 53% -18% 42% -39% 61% 13% Wholesale SME Retail YOY Change QOQ Change YOY Change QOQ Change YOY Change QOQ Change 228 178 173 681 100 100 100 100 100 197 197 187 602 99 522
Slide 6: Asset Quality
CSL FINANCE LIMITED 5 Asset Quality GROSS NPA NET NPA PROVISIONAL COVERAGE RATIO (%) (%) (%) -224 BPS -11 BPS -126 BPS -6 BPS YOY Change QOQ Change YOY Change QOQ Change 1.68 2.96 173 161 116 1.73 0.96 102 0.78 1.31 76 0.83 0.48 0.72 0.42 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q3FY22 Q4FY22 Q1FY23 Q2FY2
Slide 7: Asset Quality: Stage Analysis
CSL FINANCE LIMITED 6 Asset Quality: Stage Analysis CLASSIFICATION OF ASSETS BASIS THE ECL COMPUTATION AS PER IND-AS: PARTICULARS Q3FY22 Q2FY23 Q3FY23 Gross Stage 3 (GNPA) 12.38 4.96 4.89 % portfolio in Stage 3 2.96% 0.83% 0.72% ECL provision Stage 3 5.34 2.09 2.07 Net Stage 3 7.05 2.86 2.82 ECL Pro
Slide 8: P&L Highlights
CSL FINANCE LIMITED 7 P&L Highlights NET INTEREST INCOME TOTAL INCOME PROFIT AFTER TAX YIELDS (₹ crore) (₹ crore) (₹ crore) (%) 47% 11% 65% 14% 36% 6% YOY Change QOQ Change YOY Change QOQ Change YOY Change QOQ Change 23.6 31.3 21.3 11.9 19.5 11.2 19.3 19.3 27.4 19.1 19.1 19.1 10.7 10.6 17.2 25.1 16.
Slide 9: Treasury Update
CSL FINANCE LIMITED 8 Treasury Update LEVERAGE LIQUIDTY (times) (₹ crore) The Company has adequate liquidity Credit Rating for the of ₹ 38.19 crore and Company stands at undrawn Credit BBB+ Stable from facilities as on India Ratings & December 2022 Research 38.19 0.98 33.50 30.71 0.78 29.00 27.36 0.
Slide 10: Quarterly Financial Snapshot
CSL FINANCE LIMITED 9 Quarterly Financial Snapshot (₹ crore) PARTICULARS Q3FY22 Q2FY23 Q3FY23 Disbursements 122.20 227.60 186.57 Revenue 18.95 27.40 31.29 Interest Income 16.81 25.39 28.63 PBT 11.85 15.05 15.86 PAT 8.71 11.20 11.90 Bad debts written off 0.05 0.51 0.93 Bad debts recovered 0.27 0.62 0
Slide 11: Operational Updates
BUSINESS VERTICAL CSL FINANCE LIMITED 10 NET INTEREST INCOME & PROFITABILITY • Net Interest Income has grown, albeit lesser than Total Income due to the: 1. Increase in cost of borrowings due to higher repo rates 2. Nonetheless, the Company has maintained reasonable yields on the overall portfolio •
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 FY18 FY19 FY20 FY21 FY22 Disbursements 387.46 346.19 270.10 433.32 491.10 Revenue 41.46 59.70 60.85 61.67 74.62 Interest Income 39.51 54.97 58.42 59.18 67.66 PBT 25.78 34.06 31.74 39.36 44.98 PAT 18.07 25.15 22.47 27.53 33.68 Bad deb
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 ₹ 681 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 Wholesale SME Retail WS SME WS WS OTHER SME MID- LARGE SMALL TERM RETAIL SIZED LOAN LAP Structured loans for Construction loan Loan against Micro/Small Loans to Kirana Loan against properties for Mid Income/ given against single SORP/SOCP properti
Slide 17: Wholesale
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 ₹ 153 Crore ₹ 19 Crore CONTRIBUTION TO WHOLESALE AUM 59% 41% 5% LOAN ACCOUNTS 28 21 4 As at 31st December 2022
Slide 19: Wholesale (2/3): Credit Appraisal & Risk Management Framework
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 (3/3)
BUSINESS VERTICAL CSL FINANCE LIMITED 19 Wholesale (1/3) ACTIVE ACCOUNTS AVERAGE LOAN-TO-VALUE AVERAGE TICKET SIZE AVERAGE TENURE (#) (%) (₹ crore) (Year) 73 42 43 42 12 12 3 3 3 3 3 40 11 33 9 53 48 50 49 5 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY23 Q3FY22 Q4FY22 Q1FY23 Q
Slide 21: Wholesale Large: Affordable Group Housing
BUSINESS VERTICAL CSL FINANCE LIMITED 20 Wholesale Large: Affordable Group Housing 39% 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 17% 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 44% 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 CSL FINANCE LIMITED 23 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
Slide 25: SME Retail (1/5)
BUSINESS VERTICAL CSL FINANCE LIMITED 24 SME Retail (1/5) PRODUCTS MID JYOTI SHAKTI SAMADHAN SAARTHAK SIZE LAP LOAN AMOUNT ₹2-7.5 Lakhs ₹7.5- 25 Lakhs ₹25-50 Lakhs ₹5-10 Lakhs ₹1-5 Crores TENOR (in years) 3-4 7 7-8 5-6 2-3 TARGET CUSTOMER Small farmers, Small entrepreneur, Immediate working Salaried
Slide 26: SME Retail (2/5)
BUSINESS VERTICAL CSL FINANCE LIMITED 25 SME Retail (2/5) PRESENCE BRANCH AGEING < 1 year 35% PUNJAB 05 | 16% HARYANA 04 | 16% NCR 02 | 8% 26 1- 3 years 35% BRANCH NETWORK RAJASTHAN GUJARAT UTTARAKHAND AUM > 3 years DISTRIBUTION 30% 07 | 31% 06 | 23% 02 | 06% (in %) Clustered Approach to expanding b
Slide 27: SME Retail (3/5)
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 • eKYC • 100% cashless, E-disbursement of loan amount • Geotagging of business premise and resid
Slide 28: SME Retail (4/5)
BUSINESS VERTICAL CSL FINANCE LIMITED 27 SME Retail (4/5) TECHNOLOGY INITIATIVES ROADMAP FOCUS AREAS Q4FY23 • Full integrations with • Automating underwriting – Document enhancing underwriting with Management System more credit validations & • Working on building checks so deviations can be Q2FY23 c
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 1,876 27 27 1,686 10 1,449 1,530 26 26 9 9 6 6 6 6 6 1,260 7 6 23 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q3FY22 Q4FY22 Q1FY23 Q2FY23
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 34 35 35 42 271 292 0 400 378 350 350 300 250 200 150 150 102 95 100 65 65 58 44 53 50 32 9 16 16 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 OF 1.5X 400 90% 358 79% 80% 350 73% 322 65% 66% 70% 300 64% 259 60% 250 233 215 ₹30 50% Crore 53% 200 184 Equity Fund raise in 40% ₹54 FY22 150 Crore 30% Equity Fund raise in 0.98 100 FY18 20% 0.57 0.64 0.41 50 0.
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 ASHOK KUMAR CHANDER SUBHASH ROHIT GUPTA KATHURIA PARMOD BINDAL KWATRA MANAGING DIRECTOR DIRECTOR INDEPENDENT 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 27+ 16+ 25+ 7+ 17+
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 CORE UPGRADE TO STRENGTHEN LOAN PORTFOLIO PERFORMANCE COMPETENCIES OPERATIONS UNDERWRITING PLATFORM • The Company has
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, ON PATH TO AA 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 le
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