Spandana Sphoorty Financial Limited · NSE:SPANDANA
Spandana Sphoorty Financial — Q3 FY22 Earnings Presentation
36 slides from Spandana Sphoorty Financial's earnings presentation, Feb 15, 2022
Slide 1: Stock exchange covering letter
Ref: SSFL/Stock Exchange/2021-22/090 Date: February 15, 2022 To To BSE Limited, National Stock Exchange of India Limited, Department of Corporate Services Listing Department P. J. Towers, 25th Floor, Exchange Plaza, C-1, Block G Dalal Street, BandraKurla Complex, Bandra (E) Mumbai – 400001 Mumbai –
Slide 2: Spandana Sphoorty Financial Limited Investor Presentation Q3 FY22
Spandana Sphoorty Financial Limited ….Committed to low-income households Investor Presentation February 2022 18 19 Q3 FY22 Years
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Spandana Sphoorty Financial Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe f
Slide 4: Business Update
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 3
Slide 5: Current Key Focus Areas
Current Key Focus Areas ▪ Organisation augmentation continues to be a key focus area. Company has onboarded a CTO with 20+ years of BFSI experience. Previously, he was leading digital initiatives in a leading private sector bank in India. CEO and CFO with prior experience of MFI lending expected to
Slide 6: Key Focus Area Continues to be Organization Augmentation
Key Focus Area Continues to be Organization Augmentation Company has recently onboarded a CTO, wo was leading digital initiatives in a leading Indian private sector bank. CEO and CFO with prior experience of leading large MFI organizations expected to join very soon Management Committee (‘MC’) with
Slide 7: Focus on tracking cash collections which have continued to be robust
Focus on tracking cash collections which have continued to be robust inspite of run down of portfolio Cash deposited at HO from branches continues to be robust… …with healthy collection efficiency trends continuing in the quarter Rs. crore Collection Efficiency# (Incl. Arrears; Excl. pre-payment) AU
Slide 8: Significant progress on IT Systems Implementation over the last 3 months
Company has made significant progress on IT Systems Implementation over the last 3 months Overview of the system Implementation Progress ▪ Web based technology with Anytime + Anywhere access Overall System ▪ Encrypted architecture with Captcha, 3D Verification and OTP ▪ IP / Mac Address linked uniqu
Slide 9: Organisation has stabilized post management transition, with a roadmap
Organisation has stabilized post management transition, with a roadmap to drive sustainable growth and profitability Future Roadmap Interim period focus areas (post erstwhile MD resignation) – till date ▪ Disbursement Ramp-up: Fully automated Loan origination system has been implemented; disbursed R
Slide 10: Conservative Provisioning Levels built into the Portfolio
Conservative Provisioning Levels built into the Portfolio Total provisions on BS of Rs.760 crore alone account for 12.9% of the portfolio* Balance Sheet Particulars (Rs. crore) Q3FY22 Standard Provisions 129 COVID related Provisions 631 Total Provisions towards Loan Assets 760 Total Provisions on Ba
Slide 11: Liquidity position comfortable with no change in credit ratings
Spandana’s liquidity position continues to be comfortable with no change in credit ratings amidst the recent management changes Total repayments of ~Rs. 2,6751 crore have been made over the past 7 months High level of engagement with rating agencies by Company’s Management Committee Rs. crore1 7th F
Slide 12: Key Operating Metrics
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) All the data are on Consolidated basis Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 11
Slide 13: Operational Summary
Operational Summary AUM (Rs. crore) Disbursements (Rs. crore) Borrowers (In lakhs) Off-Book On-Book* Off-Book On-Book* CAGR +19% CAGR CAGR +16% +37% 8,157 7,999 24.6 25.7 24.5 25.9 6,829 6,695 6,426 4,969 15.9 4,372 4,914 7,280 3,858 3,166 6,107 4,232 2,009 1,915 140 877 588 Mar-18 Mar-19 Mar-20 Mar
Slide 14: Employee Productivity lower in the transition period
Employee Productivity lower in the transition period due to run-down of portfolio, expected to increase in Q4 FY22 with ramp-up in fresh disbursements which are already underway Active Borrowers/Branch (#) AUM/Employee (Rs. crore) Cost To Income (%) ▪ Includes one-time transition expenses Excl. Trai
Slide 15: Industry-Leading Geographic Diversification at State, District and Branch Levels
Industry-Leading Geographic Diversification at State, District and Branch Levels State-wise Concentration Well diversified portfolio across States Well dispersed district level exposure ensures low impact from region-specific issues Top States AUM Concentration* Madhya Pradesh 17.9% District wise Co
Slide 16: Continued Focus on Further Increasing Diversification
Continued Focus on Further Increasing Diversification, Without Compromising Rural Focus State-wise Consolidated AUM Mix – Greater Diversification Concentration (by AUM) of Top 3 States is Reducing 17.9% 63.0% Madhya Pradesh 18.3% 54.7% 15.9% 48.4% 48.0% Orissa 16.0% 45.9% 12.1% Karnataka 12.3% 11.5%
Slide 17: Key Financial Metrics
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) All the data are on Consolidated basis Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 16
Slide 18: Financial Performance
Financial Performance Total Income (Rs. crore) Net Interest Income (Rs. crore) Yield (%) Cost of Borrowings (%) +156% +217% -260 bps -280 bps 1,470 1,506 1,082 25.7% 26.2% 14.2% 24.0% 13.5% 23.1% 906 21.7% 11.9% 11.4% 11.5% 1,181 1,049 749 623 588 341 FY18 FY19 FY20 FY21# 9MFY22 FY18 FY19 FY20 FY21
Slide 19: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (Rs. crore) 9M FY22 9M FY21 Q3 FY22 Q2 FY22 Q3 FY21 Revenue from Operations Interest income 1,075.7 959.7 328.5 350.5 332.6 Commission and incentive income - 0.9 - - 0.5 Net gain on fair value changes 69.9 38.9 10.1 31.1 (0.4) Other Income 30.4 9.2 7.
Slide 20: Consolidated Balance Sheet
Consolidated Balance Sheet ASSETS (Rs. crore) Dec 31, 2021 Mar 31, 2021 Dec 30, 2020 LIABILITIES & EQUITY (Rs. crore) Dec 31, 2021 Mar 31, 2021 Dec 30, 2020 Financial Assets Financial Liabilities Cash and cash equivalents 914.6 1,135.2 775.8 Debt Securities 1,992.0 2,034.6 1,396.8 Bank Balances othe
Slide 21: Borrowing Profile
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) All the data are on Consolidated basis Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 20
Slide 22: Diversified Borrowing Profile
Diversified Borrowing Profile Borrowings (Rs. crore) ▪ Management committee led by Mr. Kamath has been having regular discussions and periodic dialogue with lenders DA 6,194 PTC ▪ No adverse / remedial action initiated by any lender for NCDs/MLDs 970 change in management Term Loan 4,941 4,836 750 59
Slide 23: Comfortable Liquidity Position Driven by Strong Track Record
Comfortable Liquidity Position Driven by Strong Track Record Positive ALM Mismatch (Rs. crore) Assets 1,729 Liabilities 1,467 1,377 1,378 1,283 1,276 792 429 456 364 359 215 150 34 11 9 Upto 1 Month 1 to 2 Months 2 to 3 Months 3-6 Months 6 to 12 Months 1 to 3 Years 3 to 5 Years Over 5 Years Positive
Slide 24: Overview of Criss Financial (Subsidiary)
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 23
Slide 25: Overview of Criss Financial
Overview of Criss Financial ▪ Criss Financial Limited (CFL) is an NBFC, which is a 98.5% subsidiary of Spandana Sphoorty Financial Limited ▪ It was set up to operate in states / asset classes that SSFL itself could not, given its status as an NBFC-MFI ▪ CFL offers Loans Against Property, Business Lo
Slide 26: Criss Financial – Robust Financial Performance
Criss Financial – Robust Financial Performance AUM (Rs crore) Disbursements (Rs crore) Total Income (Rs crore) PBT (Rs crore) +10% 403 411 326 74 23 +98% 277 276 19 20 244 +18% 56 17 40 35 168 103 FY19 FY20 FY21 9MFY22 FY19 FY20 FY21 9MFY22 FY19 FY20 FY21 9MFY22 FY19 FY20 FY21 9MFY22 PAT (Rs crore)
Slide 27: Criss Financial – Q3 FY22 Profit & Loss Statement
Criss Financial – Q3 FY22 Profit & Loss Statement Particulars (Rs. crore) Q3 FY22 (3M) Q2 FY22 (3M) Q3 FY21 (3M) 9M FY22 (9M) 9M FY21 (9M) FY21 (12M) Revenue from operations Interest income 21.72 26.31 13.93 71.79 34.86 51.12 Net gain on fair value changes 0.01 (0.02) 0.01 - 0.01 1.66 Others 0.02 0.
Slide 28: Criss Financial – Balance Sheet
Criss Financial – Balance Sheet ASSETS (Rs. crore) Dec 31, 2021 Mar 31, 2021 LIABILITIES & EQUITY (Rs. crore) Dec 31, 2021 Mar 31, 2021 Financial Liabilities Financial Assets Debt Securities 19.23 - Cash and cash equivalents 3.26 4.41 Borrowings 263.97 248.63 Bank Balances - 0.50 Other Financial lia
Slide 29: Annexure
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) All the data are on Consolidated basis Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 28
Slide 30: Strong Risk Management DNA
Strong Risk Management DNA Risk Management Key Risks Concentration Risk Political Risk Operational Risk Responsible Lending, Process Controls & Geographic & Lender Management Strategy Dependence Adherence to CoC Non Negotiable Norms and Fair pricing ▪ Portfolio caps based on net worth and ▪ Continue
Slide 31: Products
Products Product Name Purpose Interest Rate (%) Tenor Ticket Size (Rs.) Mix (%) Core Product • These unique loan products are designed especially for low-income households who aspire to improve their financial well-being Abhilasha / • The primary objective of this loan is to empower women in 21.3% 1
Slide 32: Shareholding Pattern
Shareholding Pattern As on December-21 Non-Promoter Investor Details % Holding 18.7% Valiant Mauritius Partners* 11.88% 4.7% 4.1% ICICI Prudential Life Insurance 4.74% 45.5% 10.2% JM Financial India Trust 2.50% 16.8% Edelweiss Alternative Investment 1.25% Goldman Sachs India 1.17% Kedaara & Affiliat
Slide 33: Niche Business Model
Niche Business Model Business Model Processes HR policies ▪ Standardized systems and a front-end ▪ Group size of 6 to 10 women interface that gives real time information ▪ Strict employee transfer policy with on demand and collections adherence to operational risk control ▪ Loans given under Joint L
Slide 34: Efficient Business Process
Efficient Business Process Spandana Village Selection Branch Manager Survey a Village Group Formation (6-10 Clients) and Training Formation and training of groups Center Formation Credit Assistant Loan Repayment Financial Service at doorstep Services at the Door Borrowers Steps ▪ Loans are offered f
Slide 35: Glossary
Glossary Sr. No. Particulars Formula 1 Networth Shareholders Fund + Other Equity excluding Non controlling interest 2 Capital Adequacy Tier I ratio + Tier II ratio 3 Leverage Closing On Balance sheet Borrowings / Closing Net worth 4 Marginal Cost of Borrowing (Borrowings availed during the period *
Slide 36: Thank You
Contact Information Investor Relations Advisor : Company : Strategic Growth Advisors Pvt. Ltd. Spandana Sphoorty Financial Limited CIN: U74140MH2010PTC204285 CIN: L65929TG2003PLC040648 Mr. Abhishek Shah / Ms. Krunali Shah Mr. Hari Agrawal E: abhishek.shah@sgapl.net / krunali.shah@sgapl.net E: invest
Spandana Sphoorty Financial — Q3 FY22 Earnings Presentation on 6ix