Poonawalla Fincorp Limited · NSE:POONAWALLA
Poonawalla Fincorp — Q2 FY25 Earnings Presentation
42 slides from Poonawalla Fincorp's earnings presentation, Oct 25, 2024
Slide 1: Exchange filing cover letter: Investor/Analysts' Presentation
October 25, 2024 BSE Limited National Stock Exchange of India Limited Corporate Relationship Department The Listing Department, 25th Floor, Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Fort, Bandra- Kurla Complex, Bandra (East), Mumbai - 400 001. Mumbai - 400 051. BSE Scrip Code: 524000
Slide 2: Q2FY25 Investor Presentation
Q2FY25 Investor Presentation October 25,2024 Sustainable | Predictable | Productive
Slide 3: Disclaimer
Disclaimer This presentation and the accompanying slides (the "Presentation") have been prepared by Poonawalla Fincorp Ltd. (the "Company") solely for informational purposes. They do not constitute an offer, recommendation, or invitation to purchase or subscribe for any securities. Furthermore, they
Slide 4: Table of Contents
Table of Contents 1 Key Highlights 2 Business Overview 3 Financial Overview 4 Board of Directors, Management Team, ESG and Awards
Slide 5: 1. Key Highlights
POONAWALLA FINCORP POONAWALLA, FINCORP. INTRODUCING THE SAFEST & FASTEST WAY TO GET FUNDS 1. Key Highlights
Slide 6: Financial Highlights
Financial Highlights Sustained AUM growth; Stepping-up investments AUM NII* PPoP** ▪ Consistent growth in AUM despite moderation in STPL due to credit recalibration ₹28,396Cr ₹645 Cr ₹279 Cr 40% YoY 22% YoY 17% YoY ▪ One-time Opex and ongoing investments in 5% QoQ 5% QoQ 35% QoQ technology, distribu
Slide 7: Table of Contents
Table of Contents 1 Key Highlights 2 Business Overview ✓ Vision and Strategy ✓ Assets ✓ Liability ✓ Risk Management 3 Financial Overview 4 Board of Directors, Management Team, ESG and Awards
Slide 8: 2. Business Overview
POONAWALLA FINCORP INTRODUCING THE SAFEST & FASTEST WAY TO GET FUNDS 2. Business Overview
Slide 9: Our Vision and Mission
Our Vision and Mission To be the most trusted financial services brand Trust denotes legacy and brand promise Vision Financial services: Holistic term that broadly defines the current and future business expansion To help our customers succeed financially, and our values guide everything we do: Ethi
Slide 10: Way Forward
Way Forward Solidify, Expand and Scale Shaping up a Sustainable, Predictable and Productive Business Scale ▪ Sharper focus on customer FY25 Expand acquisition funnel ▪ Cross-sell to onwards ▪ Expand the new product customer cohorts at Solidify lines lower acquisition ▪ Expand ‘Phygital’ model cost ▪
Slide 11: Strengthening the core – Investments for growth
Strengthening the core – Investments for growth Aspiration for 5-6x AUM Technology over next 5 years Driving future growth and profitability ▪ Investments (Opex) of ~₹ 50 Cr per quarter for next 6 quarters to build 6 new businesses and Distribution underpin AUM growth ▪ Upgrading our technology stac
Slide 12: Optimising product mix
Optimising product mix Incubate and expand with product lines New Product Launches PL Prime Consumer Durable Shopkeeper Loans Used CVs Gold Loans Education Loans ▪ Quality of ▪ Build large customer ▪ No incremental ▪ Profit maximiser ▪ Secured business ▪ Well-defined end customers franchise branch ▪
Slide 13: AI-led digital strategy
AI-led digital strategy One-stop shop for customer servicing and value-added services Disbursement through App for PL has already picked-up and web-based loan applications and complete digital onboarding will be replicated for other products as well Digital Onboarding Account Aggregator Alternate Da
Slide 14: Leveraging data analytics
Leveraging data analytics Application across Product & Credit lifecycle 1 2 3 4 5 6 Prospect Acquisition Pre-Sourcing Acquisition Fraud Control Post Sourcing Collections Application Models Identify Theft Behavioural Score Early Bucket Models Storage Market Insights Multi-Bureau Intent Risk Cross Sel
Slide 15: A future-ready collection strategy
A future-ready collection strategy Scaling collection infrastructure • Risk Segmentation & Priority Scorecards • Dovetailing Risk categorisation into across Collection Lifecycle, including Pre- Allocation Strategy Delinquency • Omni-channel communication stack with • Continuous learning mechanisms t
Slide 16: Deepening engagement with all stakeholders
Deepening engagement with all stakeholders Fostering strong relationships across the value chain Employees Channel Partners Customers • Implementation of robust • Increase partner visibility and • Holistic customer engagement engagement framework to foster a reward & recognize them in their plan vib
Slide 17: Human Resources: Planned Innovations and Goals
Human Resources: Planned Innovations and Goals HR Vision To enable both HR and employees to complete HR-related tasks with minimal effort, aiming to achieve “Zero Clicks” experience 1 Prioritizing Employee Development employee development by continuous Impact Increased engagement with employees lear
Slide 18: Table of Contents
Table of Contents 1 Key Highlights 2 Business Overview ✓ Vision and Strategy ✓ Assets ✓ Liability ✓ Risk Management 3 Financial Overview 4 Board of Directors, Management Team, ESG and Awards
Slide 19: Well diversified product suite
Well diversified product suite Tailored to target our focused segment • Loan ₹1 lakh to ₹75 lakhs • Interest rate starts at 11% pa • Processing fee: 1% of sanction Pre- amount plus tax Owned Car • Tenure: 12 to 72 months • Loan from ₹1 lakh to ₹50 lakhs Personal • Interest rate starts at 15% pa Loan
Slide 20: Phygital Distribution Model
Phygital Distribution Model An architecture for customer sourcing App Website Social Media Sourcing of customers through direct, Sourcing of customers through other DSAs and call centers Channels for various product offerings Other Physical Digital Channels In-house sourcing of customers through web
Slide 21: Assets Under Management
Assets Under Management Diversified AUM with right secured to unsecured mix ▪ Consistent growth in AUM despite slowing down STPL for credit calibration ▪ Right balance of secured to unsecured mix at 51:49 with secured mix improving by 225 bps QoQ Assets under Management [₹ crore] AUM Mix +40%YoY MSM
Slide 22: Table of Contents
Table of Contents 1 Key Highlights 2 Business Overview ✓ Vision and Strategy ✓ Assets ✓ Liability ✓ Risk Management 3 Financial Overview 4 Board of Directors, Management Team, ESG and Awards
Slide 23: Credit Rating
Credit Rating Highest rating - AAA Long-term Ratings* Short-term Ratings** CRISIL Ratings CARE Ratings CRISIL Ratings CARE Ratings Q2FY25 AAA/Stable Q2FY25 A1+ *Long-term rated instruments includes Bank Facilities, NCD and Subordinated Debt | **Short-term rated instrument includes Commercial Paper C
Slide 24: Composition of Borrowings
Composition of Borrowings Well diversified liability profile ▪ Total borrowings as on Sep 30, 2024, at ₹ 18,107 crore ▪ 71% of borrowings are on variable rate ▪ Healthy mix of Short-term and Long-term borrowing ensuring positive ALM and optimized cost of borrowing ▪ Low leverage with D/E of 2.26x, p
Slide 25: Optimizing Cost of Borrowing
Optimizing Cost of Borrowing CoB continues to remain among the lowest in the industry 10.00% 9.50% 9.14% 9.00% 8.50% 8.17% 8.16% 8.04% 8.10% 8.00% 7.98% 7.99% 7.90% 8.00% 7.54% 7.54% 7.50% 7.16% 6.97% 7.00% Repo rate hike → 6.50% 6.00% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q
Slide 26: ALM statement and Liquidity
ALM statement and Liquidity Structural Liquidity Statement as on September 30, 2024 Liquidity as on Sep 30, 2024, for PFL stood at ₹ 5,710 crore in the form of cash, cash equivalents and undrawn bank lines 32,875 32,875 Cumulative inflows (₹ crore) Cumulative outflows (₹ crore) 28,670 26,080 24,651
Slide 27: Table of Contents
Table of Contents 1 Key Highlights 2 Business Overview ✓ Vision and Strategy ✓ Assets ✓ Liability ✓ Risk Management 3 Financial Overview 4 Board of Directors, Management Team, ESG and Awards
Slide 28: Risk Management integrated into the strategy
Risk Management integrated into the strategy Prudent risk management frameworks Risk Management Data driven Risk 360 Degree data Fraud prevention Rule engine-based Focus on risk Learn and evolve Management mobilization and detection approach adjusted return • Time maturity • Segmented strategy • Lev
Slide 29: Table of Contents
Table of Contents 1 Key Highlights 2 Business Overview 3 Financial Overview 4 Board of Directors, Management Team, ESG and Awards
Slide 30: 3. Financial Overview
POONAWALLA FINCORP POONAWALLA, FINCORP. INTRODUCING THE SAFEST & FASTEST WAY TO GET FUNDS 3. Financial Overview
Slide 31: Net Interest Income (NII) and Operating Expense
Net Interest Income (NII) and Operating Expense Consistent YoY growth in net interest income NII (₹ crore) Opex to AUM ratio 6.0% +22% YoY 5.4% 5.0% 676 645 641 4.0% 4.4% 529 550 4.2% 4.0% 4.0% 3.9% 3.0% 2.0% 1.0% 0.0% Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Cost to Inc
Slide 32: Asset Quality Trend
Asset Quality Trend Prudent provisioning ➢ STPL portfolio one-time provisioning of ₹ 666 Crore taken during the quarter and recalibrated on credit parameters ➢ PCR improved from 52.53% to 84.47% QoQ ➢ NNPA stable at 0.33%; Increase in GNPA on account of higher slippages in STPL portfolio GNPA and NN
Slide 33: Profitability
Profitability Ongoing investments PPoP (₹ crore) PBT and PAT (₹ crore) 432 308 357 385 390 230 265 332 292 409 350 279 336 -471 -630 Q2FY24* Q3FY24 Q4FY24 Q1FY25 Q2FY25 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 PAT PBT RoA 4.97% 5.31% 5.73% 4.62% ▪ PPoP includes one-time Opex of ₹ 71 Crore ▪ PAT includes o
Slide 34: Profit & Loss Statement
Profit & Loss Statement ₹ crore Q2FY24 Q1FY25 Q2FY25 Total Interest Income 690 896 911 Interest expenses 216 320 352 Net Interest Income (NII) 475 576 559 Fee & Other Income 55 100 86 NII (inc. fees and other income) 529 676 645 Operating expenses 194 244 366 Operating profit 336 432 279 Credit cost
Slide 35: Balance Sheet
Balance Sheet ₹ crore Sep 30, 2023 Jun 30, 2024 Sep 30, 2024 Cash & Bank Balances 185 400 138 Receivables 32 19 15 Loans 17,952 24,083 24,646 Investments 657 1,063 1,239 Other Financial Assets 311 229 213 Non-Financial Assets 481 534 701 Total Assets 19,618 26,328 26,952 Borrowings 11,220 17,121 18,
Slide 36: Table of Contents
Table of Contents 1 Key Highlights 2 Business Overview 3 Financial Overview 4 Board of Directors, Management Team, ESG and Awards
Slide 37: 4. Board of Directors, Management Team, ESG and Awards
4. Board of Directors, Management Team, ESG and Awards
Slide 38: Board of Directors
Board of Directors Commanding the course with the best governance standards Ms. Sonal Sanjay Modi Mr. Kewal Kundanlal Handa Mr. Adar Poonawalla Mr. Arvind Kapil Mr. Sunil Samdani Non -Executive Director Independent Director Chairman & Non- Managing Director Executive Director Executive Director & CE
Slide 39: Management Team
Management Team Leading the next phase of growth Mr. Arvind Kapil Mr. Sunil Samdani Mr. Sanjay Miranka Mr. Shriram V. Iyer Mr. Vikas Pandey Managing Director & CEO Executive Director Chief Financial Officer Chief Credit & Analytics Officer Chief Business Officer - Education: AMP-Harvard Consumer Bus
Slide 40: ESG delivering sustainable long-term value to stakeholders
ESG delivering sustainable long-term value to stakeholders Prioritising responsible business practices Our Approach Metrics Environment 5575.05 GJ 0.40 tCO2/H Implemented energy saving Total Scope 1 and Scope 2 We are committed to sustaining our environment by Total energy measures emissions intensi
Slide 41: Awards and Accolades
Awards and Accolades Industry Recognition for our brand Human Resource Certified as a great India’s Best Recognised as The workplace by Great Workplace in Most Preferred Place To Work Health & Wellness Workplace (GPTW) from January 2023 2023-24 2024 Brand & Marketing Risk Management The Great Indian
Slide 42: Thank You!
Thank You! For further information, please contact: Team – Investor Relations Investor.relations@poonawallafincorp.com www.poonawallafincorp.com CIN : L51504PN1978PLC209007