Indostar Capital Finance Limited · NSE:INDOSTAR
Indostar Capital Finance — Q2 FY2024 Earnings Presentation
53 slides from Indostar Capital Finance's earnings presentation, Oct 27, 2023
Slide 1: Stock exchange cover letter for investor presentation
ICFL/LS/157/2023-24 27 October 2023 BSE Limited National Stock Exchange of India Limited Listing Department, 1st Floor, Exchange Plaza, C-1, Block G, P J Towers, Dalal Street, Fort, Bandra Kurla Complex, Bandra, Mumbai - 400 001. (E), Mumbai – 400 051. Scrip Code: 541336 Symbol: INDOSTAR Sub.: Inves
Slide 2: IndoStar Capital Finance Investor Presentation
INDOSTAR CAPITAL FINANCE Investor Presentation September 2023
Slide 3: Safe Harbor
Safe Harbor “Your Path To A Better Life” This presentation and the accompanying slides (the “Presentation”), which have been prepared by IndoStar Capital Finance Limited (the “Company’), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation
Slide 4: Key Performance Highlights – Q2FY24
Key Performance Highlights – Q2FY24 “Your Path To A Better Life” AUM Disbursements Gross Stage 3 Net Stage 3 CRAR * Branches ₹ 7,726 crs ₹ 1,269 crs 6.7% 3.3% 32.8% CRAR 476 Branches Q2FY23: ₹ 7,908 crs Q2FY23 : ₹ 334 crs Q2FY23: 7.1% Q2FY23: 2.9% Q2FY23: 34.1% Q2FY23: 424 * Standalone Net Total Inc
Slide 5: IndoStar 2.0
IndoStar 2.0
Slide 6: “go-to” NBFC in Retail Lending
“go-to” NBFC in Retail Lending “Your Path To A Better Life” CV Finance Housing Finance Our wholly-owned subsidiary IndoStar Home Finance We provide financing for New/ Used CV, Construction engages in providing affordable home financing Equipment, Tractor & Used Car solutions to self-employed and sal
Slide 7: Strategy for INDOSTAR 2.0
Strategy for INDOSTAR 2.0 “Your Path To A Better Life” • Strengthened Core Management Team to focus on each of the business segments New Customer • Focused on serving the used CV market with higher yields Acquisition • Moving branch network into the hinterland, serving customers in tier 3 and tier 4
Slide 8: Our Strategic Focus Areas
Our Strategic Focus Areas “Your Path To A Better Life” 01 05 Maintaining consistent Digitalization customer communication 02 06 Strengthening controls to Expanding geographically minimize risk 03 07 Maintaining asset quality Ensuring a robust balance sheet 04 08 Investing in technology to become mor
Slide 9: Strategic Performance Indicators
Strategic Performance Indicators
Slide 10: Priority Sector Lending – Key Strategic Initiative
Priority Sector Lending – Key Strategic Initiative “Your Path To A Better Life” What is the RBI What is the qualifier to What are the priority What is the advantage guideline for Banks get an IndoStar loan sectors? to IndoStar? around PSL? tagged as PSL? Under RBI guidelines, loans given to 1) Domes
Slide 11: Changing Portfolio Mix Driven by Retailisation Strategy
Changing Portfolio Mix Driven by Retailisation Strategy “Your Path To A Better Life” Break-up of Asset Under Management (₹ crs) Retailisation Strategy Playing Out 5% 12,054 10,150 8,998 9,658 7,813 8,062 7,726 Q2FY24 5,000 4,643 4,194 3,672 3,928 42% 4,908 46% 47% 47% 49% 4,383 95% 51% 57% 551 5% 83
Slide 12: Retailisation Strategy Playing Out
Retailisation Strategy Playing Out “Your Path To A Better Life” Disbursements: CL vs Retail (₹ crs) Disbursements: Retail (₹ crs) 6,448 3,505 1,827 4,947 2,098 1,116 1,269 4,885 564 579 3,054 2,356 3,054 1,609 945 1,936 1,221 926 2,356 4,885 +277% 347 1,937 534 3,743 14 1,221 363 1,609 0 487 945 221
Slide 13: National Footprint Creating Runway for Growth
National Footprint Creating Runway for Growth “Your Path To A Better Life” No States 476 Branches Across 22 States 1 HIMACHAL PRADESH – 2 476 452 2 PUNJAB – 9 424 423 427 108 3 UTTARAKHAND – 9 56 62 77 99 1 31 4 HARYANA – 11 75 73 38 2 66 5 NEW DELHI – 2 3 4 6 UTTAR PRADESH- 31 5 315 337 7 RAJASTHAN
Slide 14: Movement in Stage 3 Assets - Standalone
Movement in Stage 3 Assets - Standalone “Your Path To A Better Life” IndoStar Capital Finance (%) IndoStar Home Finance (%) Gross Stage 3 Net Stage 3 Gross Stage 3 Net Stage 3 9.1% 8.3% 8.1% 8.1% 7.9% 4.1% 4.0% 1.7% 3.8% 3.7% 1.4% 3.4% 1.2% 1.3% 1.3% 1.2% 1.1% 1.0% 0.9% 0.9% Q2 FY23 Q3 FY23 Q4 FY23
Slide 15: Movement in Stage 3 Assets - Consolidated
Movement in Stage 3 Assets - Consolidated “Your Path To A Better Life” Consolidated Trends (%) Total Provisioning as % of Loan Assets Gross Stage 3 Net Stage 3 Stage 3 Provision Coverage Ratio Provisioning as % of Loan Assets 7.9% 60.1% 56.2% 54.2% 7.1% 53.7% 6.8% 51.5% 6.6% 6.7% 3.6% 3.2% 3.1% 3.3%
Slide 16: Stable Net Stage 3 % in FY23
Stable Net Stage 3 % in FY23 “Your Path To A Better Life” Particulars (₹ crs) Q2FY24 Q1FY24 Q4FY23 Q3FY23 Q2FY23 Gross Stage 1 & 2 6,553 6,905 6,591 6,308 6,478 ECL Stage 1 & 2 152 292 294 265 268 Net Stage 1 & 2 6,401 6,613 6,297 6,043 6,210 ECL Provision % 2.3% 4.2% 4.5% 4.2% 4.1% Particulars (₹ c
Slide 17: Collection Efficiency
Collection Efficiency “Your Path To A Better Life” Collection Overall Collection Collection incl Particulars (₹ crs) EMI Billing EMI collected Billing efficiency % efficiency (incl Overall Collection efficiency Overdue overdue) % % Oct-22 203 172 84.6% 190 93.5% 251 123.5% Nov-22 222 172 77.3% 191 8
Slide 18: Diversified Borrowing Profile Supported by Capital Adequacy
Diversified Borrowing Profile Supported by Capital Adequacy “Your Path To A Better Life” Diversified Funding Mix (Sep 2023) Net-worth and Capital Adequacy Capital 8,654 8,532 8,760 8,967 8,685 34% 33% 32% 34% 33% Adequacy 2% 0% 0% 0% 0% 0% 1% 0% 2% 0% 18% 16% 14% 13% 3,050 3,086 3,112 3,151 3,065 19
Slide 19: Credit Rating remains Strong
Credit Rating remains Strong “Your Path To A Better Life” Key Rating Drivers Strong Credit Ratings Demonstrated support from majority shareholders, Borrowing Type Rating Firm Ratings Brookfield & Everstone CRISIL AA (–) Term Loans Strong capitalisation with healthy net worth base CARE A+ CRISIL
Slide 20: CV Finance
CV Finance
Slide 21: Industry Overview
Industry Overview “Your Path To A Better Life” GDP growth • Commercial Vehicles are a proxy for economic growth • Provides direct / indirect employment to more than 01 50 Mn people • Over 70% of the goods/ people movement is by Road Regulatory 06 02 Rising changes Interest rates Transport • GDP Grow
Slide 22: CV Used Business Potential
CV Used Business Potential “Your Path To A Better Life” Used Vehicle potential ₹ 1.50 Lakh crore per annum Regulatory changes 10 9 8 7 6 5 4 3 2 1 0 Year FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 MHCV (units) 2,68,263 2,00,618 2,32,755 3,02,397 3,02,529 3,27,254 3,63,888 2,05,851 1,03,0
Slide 23: Commercial Vehicle Finance
Commercial Vehicle Finance “Your Path To A Better Life” Used Vehicle Average Ticket Size of AUM of ₹ 4,383 crs Disbursement of 95% in ₹ 8.3 Lakhs Q2FY24 vs 93% in Q1FY24 Average Loan to Value Disbursements Yield ~18.8% Presence across Ratio is 78.0% in Q2FY24 Gross Stage 3 of 6.8%; 22 States vis-à-v
Slide 24: CV Finance : Key Operational Parameters
CV Finance : Key Operational Parameters “Your Path To A Better Life” AUM (₹ crs) AUM Mix (Geography –Wise) (%) North 4,383 21% 24% 3,612 3,672 3,928 South 3,469 East West 21% 34% Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Average Ticket Size (₹ lakhs) Loan to Value (%) 8.3 78.0% 7.6 74.0% 72.7% 6.8 69.6% 69
Slide 25: CV Finance : Key Operational Parameters
CV Finance : Key Operational Parameters “Your Path To A Better Life” Disbursements (₹ crs) Disbursements Yield (%) 1,000 755 19.9% 19.8% 657 19.1% 18.7% 18.8% 334 240 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Disbursement Mix (Product –Wise) (%) Disbursement Mix (Geograph
Slide 26: IT – Key Enabler for Control / Growth
IT – Key Enabler for Control / Growth “Your Path To A Better Life” IndoStar Connect – IndoStar Connect - Lending Software Payment Automation Onboarding Verification & Validation End to End services • Digital loan origination mobile and web • One click verification of proof of • Digital case credit a
Slide 27: IndoStar Home Finance Private Limited
IndoStar Home Finance Private Limited
Slide 28: Indian Affordable Housing Finance Market Expected To Show Significant Growth
Indian Affordable Housing Finance Market Expected To Show Significant Growth “Your Path To A Better Life” Ticket Size (Rs) Players in Indian Mortgage Market Increasing Penetration in LIG & EWS Segments to Drive Growth 69% 41% Average LTS Affordable Housing Market MIG & Comprises of loans with ticket
Slide 29: Future Ready to Seize Affordable Housing Market Opportunity
Future Ready to Seize Affordable Housing Market Opportunity “Your Path To A Better Life” Ecosystem Play Remote access to customers through Home Hub app Fully enabled payment methods for customer leading to cash component using 3-4% of overall transactions Geographical Focus Robust Underwriting Geogr
Slide 30: Affordable Home Financing Solutions
Affordable Home Financing Solutions “Your Path To A Better Life” IndoStar Home Finance Private Limited Salaried: 50% and Self Portfolio Average AUM of ₹ 1,894 crs Employed 50% Ticket Size of ₹ 9 Lakhs HF:70% and LAP: 30% Blended Yield ~15.0% Presence across Average Loan to Value Gross Stage 3 of 1.3
Slide 31: Focusing on Growing Housing Finance Book
Focusing on Growing Housing Finance Book “Your Path To A Better Life” Housing Finance – AUM Housing Finance – Disbursements (₹ crs) (₹ crs) 1,894 221 1,741 190 1,623 183 1,526 1,489 107 82 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2FY24 30
Slide 32: Housing Finance : Key Operational Parameters
Housing Finance : Key Operational Parameters “Your Path To A Better Life” Average Ticket Size (₹ lakhs) Live Accounts 24,095 21,975 8.9 9.0 9.0 20,162 7.7 7.5 18,409 17,556 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Loan to Value (%) Geographical Distribution (Value –Wise)
Slide 33: Housing Finance : Key Financial Parameters
Housing Finance : Key Financial Parameters “Your Path To A Better Life” AUM (₹ crs) Gross Stage 3 & Net Stage 3 (%) +23% 1,894 1,741 1.9% 1,623 1.8% 1,406 1.4% 1.3% CRAR 1.2% 1.3% 832 996 0.8% 1.1% 0.9% 0.9% 1.0% Gross Stage 3 70.8% Net Stage 3 Sep 23 0.7% FY 20 FY 21 FY 22 FY23 Q1FY24 Q2FY24 FY 20
Slide 34: Catering to Underpenetrated Segments Across Product Types
Catering to Underpenetrated Segments Across Product Types “Your Path To A Better Life” Characteristics Salaried Self Employed Textile loom workers Retail workers Small traders Kirana shop owners FMCG workers School teachers Tea & snack vendors Vegetable vendors Profession Small time Micro scale milk
Slide 35: Process Excellence: Credit & Underwriting
Process Excellence: Credit & Underwriting “Your Path To A Better Life” Evaluation of Profile and Property Risk • Collecting KYCs -Aadhar, PAN, Credit history checks with bureaus. Assessment of LTV, FOIR Excluded from • Assessment of employment / business Portfolio stability • Banking Flows, establ
Slide 36: Process Excellence: Collections & Monitoring
Process Excellence: Collections & Monitoring “Your Path To A Better Life” Collection Process Pre Bounce / Delinquency Post Bounce / Delinquency • Use of Bounce prediction tool which provides with the pool of • Cases are allocated to branch sales RM/collections officers customers with high probabilit
Slide 37: Analytics driven Risk Management to control Delinquency
Analytics driven Risk Management to control Delinquency “Your Path To A Better Life” Key Risk Management Aspects Monitored Robust dashboards developed in the system to enable real time monitoring of mentioned parameters Lagged Dashboards are sent to branch managers to enable them to monitor thei
Slide 38: Financial Performance
Financial Performance
Slide 39: ICF Standalone - Income Statement
ICF Standalone - Income Statement “Your Path To A Better Life” Particulars (₹ in crs) Q2FY24 Q1FY24 Q-o-Q Q2FY23 Y-o-Y H1FY24 H1FY23 Y-o-Y Revenue from operations 234.2 241.2 237.3 475.4 495.7 Interest expenses 140.8 133.1 130.7 273.9 263.1 Net Interest Income 93.4 108.1 (14%) 106.6 (12%) 201.5 232.
Slide 40: ICF Standalone - Balance Sheet
ICF Standalone - Balance Sheet “Your Path To A Better Life” Equity & Liabilities (₹ in crs) Sep’23 Jun’23 Sep’22 Assets (₹ in crs) Sep’23 Jun’23 Sep’22 Financial Liabilities Financial Asset Trade payables 0.1 5.8 7.5 Cash and cash equivalents 110.4 623.2 325.5 Bank balance other than cash & cash equ
Slide 41: HFC - Income Statement
HFC - Income Statement “Your Path To A Better Life” Particulars (₹ in crs) Q2FY24 Q1FY24 Q-o-Q Q2FY23 Y-o-Y H1FY24 H1FY23 Y-o-Y Revenue from operations 79.0 59.3 56.9 138.3 112.2 Interest expenses 24.4 22.7 15.8 47.1 31.4 Net Interest Income 54.6 36.6 49% 41.1 33% 91.2 80.8 13% Other Income 0.0 0.2
Slide 42: HFC - Balance Sheet
HFC - Balance Sheet “Your Path To A Better Life” Equity & Liabilities (₹ in crs) Sep’23 Jun’23 Sep’22 Assets (₹ in crs) Sep’23 Jun’23 Sep’22 Financial Liabilities Financial Asset Trade payables 23.3 23.2 0.1 Cash and cash equivalents 11.3 65.2 15.6 Debt Securities 31.3 30.6 49.8 Bank balance other t
Slide 43: Consolidated - Income Statement
Consolidated - Income Statement “Your Path To A Better Life” Particulars (₹ in crs) Q2FY24 Q1FY24 Q-o-Q Q2FY23 Y-o-Y H1FY24 H1FY23 Y-o-Y Revenue from operations 313.3 299.1 294.1 612.4 607.9 Interest expenses 165.2 154.4 146.4 319.5 294.4 Net Interest Income 148.1 144.7 2% 147.7 0% 292.9 313.5 (7%)
Slide 44: Consolidated - Balance Sheet
Consolidated - Balance Sheet “Your Path To A Better Life” Equity & Liabilities (₹ in crs) Sep’23 Jun’23 Sep’22 Assets (₹ in crs) Sep’23 Jun’23 Sep’22 Financial Liabilities Financial Asset Trade payables 0.1 5.8 7.6 Cash and cash equivalents 126.3 693.0 345.6 Debt Securities 2,579.3 1,898.0 527.4 Ban
Slide 45: Historical - Consolidated Income Statement
Historical - Consolidated Income Statement “Your Path To A Better Life” Particulars (₹ in crs) FY23 FY22 FY21 FY20 Revenue from operations 1,174.3 1,162.7 1,279.8 1,597.5 Interest expenses 580.3 539.5 708.6 863.4 Net Interest Income 594.0 623.2 571.2 734.1 Other Income 5.3 11.6 7.4 1.5 Total Income
Slide 46: Historical - Consolidated Balance Sheet
Historical - Consolidated Balance Sheet “Your Path To A Better Life” Assets (₹ in crs) Mar’23 Mar’22 Mar’21 Mar’20 Financial Asset Cash and cash equivalents 179.7 80.3 279.2 168.4 Bank balance other than cash & cash equivalent 236.0 409.4 241.0 376.7 Loans 6,515.7 7,706.9 7,139.3 8,293.1 Investments
Slide 47: Historical - Consolidated Balance Sheet
Historical - Consolidated Balance Sheet “Your Path To A Better Life” Equity & Liabilities (₹ in crs) Mar’23 Mar’22 Mar’21 Mar’20 Financial Liabilities Trade payables 7.9 2.7 3.9 11.1 Debt Securities 1,108.9 1,977.9 2,012.8 2,089.5 Borrowings other than debt securities 4,539.2 4,245.5 3,994.8 5,052.5
Slide 48: Ownership Structure and Management Team
Ownership Structure and Management Team
Slide 49: Large Global Private Equity Parentage
Large Global Private Equity Parentage “Your Path To A Better Life” Shareholding Pattern (As on September 2023) 21.75% Shareholders % 1.38% Promoters 74.99 BCP V Multiple Holdings Pte Ltd 56.20 1.88% (Brookfield) Everstone Group 18.79 74.99% Domestic Institutional Investors 1.88 ICICI Prudential Life
Slide 50: Experienced Management Team - IndoStar
Experienced Management Team - IndoStar “Your Path To A Better Life” Karthikeyan Srinivasan Vinodkumar Panicker Shreejit Menon Chief Executive Officer - ICF Chief Financial Officer - ICF Chief Executive Officer - HFC o He has over 25 years of experience in the areas of Retail Sales, o He has a career
Slide 51: Esteemed Board of Directors
Esteemed Board of Directors “Your Path To A Better Life” BOBBY PARIKH Naina Krishna Murthy Non-Executive Independent Director Chairman and Non-Executive Independent Director o She has more than two decades of experience in the legal o He has nearly three decades of experience in financial services s
Slide 52: Esteemed Board of Directors
Esteemed Board of Directors “Your Path To A Better Life” Dhanpal Jhaveri Aditya Joshi Non–Executive Director Non-Executive Director o He has over two decades of experience in investments, strategy, o He is MD in Brookfield's Private Equity Group and heads the PE M&A and investment banking. Currently
Slide 53: Thank You
COMPANY “Your Path To A Better Life” Indostar Capital Finance Limited CIN: L65100MH2009PLC268160 Email: investor.relations@indostarcapital.com Website: www.indostarcapital.com Thank You INVESTOR RELATIONS ADVISORS Orient Capital (a division of Link Group) Mr. Nikunj Jain Mr. Amar Yardi +91 976906060
IndoStar Capital Finance — Q2 FY2024 Earnings Presentation on 6ix