Indostar Capital Finance Limited · NSE:INDOSTAR
Indostar Capital Finance — Q4 FY2020 Earnings Presentation
30 slides from Indostar Capital Finance's earnings presentation, Jun 18, 2020
Slide 1: Regulation 30 stock exchange intimation letter
ICFL/LS/0054/2020-21 18 June 2020 BSE Limited National Stock Exchange of India Limited st Listing Department, 1 Floor, Exchange Plaza, C-1, Block G, P J Towers, Dalal Street, Fort , Bandra Kurla Complex, Mumbai - 400 001 Bandra (E), Mumbai – 400 051 Scrip Code: 541336 Symbol: INDOSTAR Sub.: Regulati
Slide 2: IndoStar Capital Finance Limited
INDOSTAR CAPITAL FINANCE LIMITED 18 June 2020
Slide 3: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”) have been prepared by IndoStar Capital Finance Limited (“IndoStar” or the “Company”) solely for information purposes and do not constitute an offer to sell or, recommendation or solicitation of an offer to subscribe for or
Slide 4: Our Journey
Our Journey Our Recent Past Build up of retail infra & team across multiple segments – CV, SME and Housing Steady reduction in the wholesale book Present Situation Strong position on capital and liquidity Normalizing Covid impact Prudent cost management Favorable industry dynamics Future
Slide 5: Our Recent Past: Last 3 years
Our Recent Past : Last 3 years Build up of retail infra & team across multiple segments – CV, SME and Housing Steady reduction in wholesale book
Slide 6: Build up of Retail Infra and Team
Build up of Retail Infra and Team Significant growth in Retail AUMs across segments 4x+ growth in Retail AUM 35x growth in Vehicle Finance AUM Scaled up ICICI Bank Partnership to AUM of INR 7,504 million 4.4x 70,989 45,197 35.0x 16,268 1,290 FY18 FY20 FY18 FY20 1x+ growth in SME Finance AUM 16x grow
Slide 7: Build up of Retail Infra and Team
Build up of Retail Infra and Team Built infrastructure to significantly grow Retail businesses Retail: Employees Vehicle Finance: Employees 2.0x 2,049 2.7x 1,643 1,010 604 FY18 FY20 FY18 FY20 High potential to grow Housing & SME lending by increasing penetration amongst existing branches SME Finance
Slide 8: Our Recent Past: Last 3 years
Our Recent Past : Last 3 years Build up of retail infra & team across multiple segments – CV, SME and Housing Steady reduction in wholesale book
Slide 9: Steady reduction in the wholesale book
Steady reduction in the wholesale book Reduced wholesale book to ~50% within last 2 years Working to further reduce wholesale exposure, significantly Wholesale Book (INR million) AUM: Wholesale vs Retail (%) Peak in 0.5x Jul-18 44,327 45,270 60,595 117,352 96,8991 27% 28,687 61% 71% 73% 39% 29% FY18
Slide 10: Present Situation
Present Situation Strong position on capital and liquidity Normalizing Covid impact Prudent cost management Favourable industry dynamics
Slide 11: Strong position on capital and liquidity
Strong position on capital and liquidity IndoStar has highest capital adequacy ratio amongst all the listed NBFCs Since lockdown, IndoStar has been able to raise additional liquidity of over INR 4,520 million Current Liquidity of INR 20,135 million vs. total borrowings of INR 66,798 million
Slide 12: Comfortable ALM position till March 2021
Comfortable ALM position till March 2021 Particulars (₹ mn) Jun-20 Q2FY21 Q3FY21 Q4FY21 Opening Cash & Equivalents* 20,135 16,760 13,984 14,720 Loan repayment inflows [Principal] 163 1,000 4,426 5,310 Total Inflow 20,298 17,760 18,410 20,030 Liability Repayment [Principal] NCDs 250 - 250 3,576 Term
Slide 13: Present Situation
Present Situation Strong position on capital and liquidity Normalizing Covid impact Prudent cost management Favourable industry dynamics
Slide 14: Normalizing Covid impact
Normalizing Covid impact 2/3rd of portfolio AUM in most affected states Commercial Affordable % of AUM Wholesale SME Finance Total Vehicle Finance Housing Finance Maharashtra 76% 11% 29% 23% 36% Gujarat 3% 7% 16% 6% 7% Delhi 6% 19% 6% 35% 14% Tamil Nadu 1% 8% 9% 9% 6% Madhya Pradesh 0% 7% 3% 0% 3% T
Slide 15: Normalizing Covid impact: moratorium uptake
Normalizing Covid impact ~90% of customers in value opted for Moratorium 1.0 Segment % customers opting for % customers opting for % collections in April & moratorium (Nos) moratorium (Value) * May from non-moratorium customers Wholesale 84% 90% 100% Commercial Vehicle Finance 75% 88% 100% SME Finan
Slide 16: Portfolio quality improvement during lockdown
Normalizing Covid impact Portfolio quality improvement with focus on overdue collections during lockdown Days Past Due Commercial Vehicle SME Affordable Housing All in % * Mar 2020 May 2020 Mar 2020 May 2020 Mar 2020 May 2020 Current 56% 61% 85% 87% 98.1% 98.3% 0-30 16% 14% 7% 6% 0.7% 0.5% 31-60 13%
Slide 17: Present Situation
Present Situation Strong position on capital and liquidity Normalizing Covid impact Prudent cost management Favourable industry dynamics
Slide 18: Prudent cost management
Prudent cost management Enhanced focus on cost control. Expect 15% reduction in Opex from INR 3,104 million in FY20 People cost Deferral of FY20 performance-linked incentives / bonus Deferred increments for FY21 Branches and Branch Opex Post IIFL CV book acquisition, rationalized and merge
Slide 19: Present Situation
Present Situation Strong position on capital and liquidity Normalizing Covid impact Prudent cost management Favourable industry dynamics
Slide 20: Favorable industry dynamics
Favorable industry dynamics Well poised to capitalize on the large near-term opportunity to increase market share Industry Significant & accelerated consolidation in NBFC’s driven by continued pressure on liabilities Likely bipolar world – some players will have access to liabilities and some
Slide 21: Future: Next 2 years
Future : Next 2 years Sector outlook Calibrated organic growth across retail segments Alignment for long term value creation
Slide 22: Sector outlook: Commercial Vehicle Finance
Sector outlook: Commercial Vehicle Finance Industry Challenges Significant contraction expected in demand for new commercial vehicles - HCVs as well as LCVs Industrial goods, fleet operators impacted significantly Steady improvement underway as vehicles have started plying from May/June Si
Slide 23: Sector outlook: Affordable Housing Finance
Sector outlook: Affordable Housing Finance Industry Challenges Significant cash flow impact on cash salaried and self employed borrowers in “non essential" small businesses Subdued construction activity and weak home loan disbursements for next few quarters Silver Linings Continued policy
Slide 24: Sector outlook: SME Finance
Sector outlook: SME Finance Industry Challenges Significant impact due to supply chain disruptions coupled with demand moderation Higher ticket size loans particularly with Lease Rental Discounting (LRD) to face pressure Silver Linings Significant push from the Govt. to revive the SME sect
Slide 25: Future: Next 2 years
Future : Next 2 years Sector outlook Calibrated organic growth across retail segments Alignment for long term value creation
Slide 26: Calibrated organic growth across retail segments
Calibrated organic growth across retail segments Large market opportunity to lend to both existing and new customers across all 3 retail segments Our growth rates likely to be higher than pre Covid business plans and past growth in retail At our small base, marginal market share gains lead to
Slide 27: Future: Next 2 years
Future : Next 2 years Sector outlook Calibrated organic growth across retail segments Alignment for long term value creation
Slide 28: Alignment for long term value creation
Alignment for long term value creation Shareholders - Everstone - Started IndoStar 9 years back in 2011 - Additional investment of INR 3,575 million through new fund at INR 421/share in CY2018/19 - No secondary sale by Everstone in current transaction - Brookfield - 1st private equity investment in
Slide 29: Key Takeaways
Key Takeaways Continue to reduce wholesale exposure, further Strong position on capital & liquidity – over capitalized and under leveraged Well poised to capitalize on favorable industry dynamics and grow profitably Retail growth over next 2 years to be higher, and more profitable, than pre
Slide 30: For Further Queries
For Further Queries Amol Joshi Chief Financial Officer Contact No: +91 98198 68337 Email - investor.relations@indostarcapital.com Media Contact Snigdha Nair Adfactors PR Email - snigdha.nair@adfactorspr.com; indostar@adfactorspr.com
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