Fusion Finance Ltd · NSE:FUSION
Fusion Finance — Q2 FY25 Earnings Presentation
46 slides from Fusion Finance's earnings presentation, Nov 16, 2024
Slide 1: Submission of Earnings Presentation Q2-H1 FY2024-25 letter
Letter No. FFL/SEC/2024-25/SE-115 Date: 16.11.2024 The Manager The Manager Listing Department Listing Department National Stock Exchange of India Limited BSE Limited Exchange Plaza, Plot No. C/1, G Block Bandra Phiroze Jeejeebhoy Towers Kurla Complex, Bandra (E), Mumbai - 400 051 Dalal Street, Mumba
Slide 2: Investor Presentation Q2 FY25
Creating Opportunities… Creating Investor Presentation Opportunities… Q2 FY25 Fusion Finance Limited
Slide 3: Disclaimer
Disclaimer Creating Opportunities… By attending the meeting where this Presentation is made, or by reading the Presentation materials, you agree to be bound by the limitations contained herein and to maintain absolute confidentiality regarding the information disclosed in this Presentation. Any fail
Slide 4: Sectoral Challenges continue
Sectoral Challenges continue…. Creating Opportunities… Customer Leverage, coupled with stagnant household income impacted by inflation Customers have taken multiple loans Significant rise in overall customer indebtedness levels High food inflation has adversely impacted household expense levels and
Slide 5: Presentation Path
Presentation Path Creating Opportunities… Executive Summary Vision, Mission & Values Key Strengths 1 3 5 Financial Overview Our Presence Performance 2 4 6 4 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 6: Executive Summary
Creating Opportunities… Executive Summary 1 5 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 7: Executive Summary Q2 FY25
Executive Summary Q2 FY25 Creating Opportunities… Challenging quarter due to industry wide headwinds , leading to drop in collection efficiencies and impact on other operating metrics. Implemented immediate corrective measures including tighter customer selection criteria, strengthened collections i
Slide 8: Measures Initiated by Fusion
Measures Initiated by Fusion Creating Opportunities… Strengthened Management Team Onboarded new COO Strengthened Collections Infrastructure New Collections Head Improved analytics and planning for state specific events Ramped up dedicated field team for collections Tele calling set up for pan India,
Slide 9: Performance Highlights
Performance Highlights Creating Opportunities… Key Metrics Q2’25 Q2’24 YoY Q1’25 QoQ Total Income (₹ Cr) 703.71 571.26 23.19% 706.68 0.42% NII (₹ Cr) 397.29 304.54 30.46% 396.55 0.19% NIM 11.48% 11.12% 36 bps 11.64% 16 bps Cost to Income 40.41% 36.41% 400 bps 38.39% 202 bps PPOP (₹ Cr) 283.84 241.79
Slide 10: Customer Leverage & PAR
Customer Leverage & PAR Creating Opportunities… Timeline / Unique to Us Us+1 Us+2 Us+3 Us+4 Us+ >= 5 Us+ >= 3 Us+ >= 4 Relationship # ever + now Customer Composition* Mar'24 30.9% 19.7% 17.8% 14.6% 10.5% 6.4% 31.5% 16.9% Sep'24 33.3% 26.0% 19.0% 11.9% 5.7% 4.0% 21.7% 9.7% PAR 0+ Us+ >= 3 Us+ >= 4 Se
Slide 11: Credit Cost
Credit Cost Creating Opportunities… (₹ Cr) Particulars Q2’25 Q2’24 Q1’25 H1’25 FY 24 Opening ECL [A] 644.06 328.38 354.54 354.54 312.66 - Provisions as per ECL [B] 693.00 75.28 347.92 1,040.92 361.08 Reversals (on account of write-off) [C] 196.44 103.42 58.40 254.84 319.20 Closing ECL [D = A+B-C] 1,
Slide 12: Overview
Creating Opportunities… Overview 2 11 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 13: 14+ years of proven track record
14+ years of proven track record Creating Opportunities… Diversified Client Growth AUM Growth Organically diversified ~20% over last 5 Years ~34% over last 5 years since inception Technology Robust Liability Marquee Investor On Cloud since 2013 Warburg Pincus - 2018 Management Ratings IPO New Produc
Slide 14: Vision, Mission & Values
Creating Opportunities… Vision, Mission & Values 3 13 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 15: Vision, Mission and Values
Vision, Mission and Values Creating Opportunities… Vision: “Fusion Finance with a social vision and business orientation aims to provide underprivileged women with economic opportunities to transform the quality of Mission: their lives.” “A self-sustainable financial institution which leverages the
Slide 16: Our Presence
Creating Opportunities… Our Presence 4 15 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 17: Our Presence
Our Presence Creating Opportunities… J & K (2) Punjab (55) Himachal Pradesh (9) Uttarakhand (21) Haryana (47) Rajasthan (111) Uttar Pradesh (268) Assam (32) Delhi (8) FY 10-15 FY 16 FY24 H1 FY 25 States 5 9 22 22 Bihar(183) Madhya Pradesh (132) Districts 38 88 453 483 Jharkhand (62) Branches 75 173
Slide 18: Key Strengths
Creating Opportunities… Key Strengths 5 17 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 19: Key Strengths
Key Strengths Creating Opportunities… Diversification Liability Management Consistency Digital Orientation People Operational Prudence Strong Governance 18 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 20: Key Strengths: Diversification
Key Strengths : Diversification Creating Opportunities… QoQ Network Distribution Top 5 states concentration Rural vs Urban Presence 1550 22 22 22 22 22 22 70.4% 70.4% 70.4% 93% 93% 94% 94% 94% 1450 1398 1463 70.1% 70.1% 1297 21 1350 1242 1250 1164 20 1150 19 1050 18 950 850 17 750 16 650 7% 7% 6% 6%
Slide 21: Key Strengths: Consistency
Key Strengths : Consistency Creating Opportunities… (₹ Cr) QoQ AUM Disbursement Growth 15.41% Growth -29.15% 12193 2,953 2987 11,476 11571 10,693 2,713 10,026 2344 1661 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 AUM YoY Disbursement 10,294 11,476 11571 8,596 9,296 6,180 6,786 4,647
Slide 22: Key Strengths: Consistency (Contd…)
Key Strengths : Consistency (Contd…) Creating Opportunities… QoQ AUM/ RO (₹ Cr) AUM/Branch (₹ Cr) Borrower/ Branch 1.4 1.3 9.1 1.3 8.8 8.9 8.9 3,381 3,260 3,204 1.2 3,017 1.1 8.0 2,805 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 YoY AUM/ RO (₹ Cr) AUM/Br
Slide 23: Key Strengths: Operational Prudence
Key Strengths : Operational Prudence Creating Opportunities… QoQ Avg. Ticket Size (₹ K) Active Borrowers (Lakh) Avg. OS / Borrower (₹ K) Growth 4.2% 29.6 46.4 39.5 45.2 28.5 28.6 44.7 38.6 38.3 43.8 37.8 27.2 26.2 42.2 36.9 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q2'24 Q3'24 Q4'2
Slide 24: Branch Vintage
Branch Vintage Creating Opportunities… For MFI Vertical Mar’23 Mar’24 Jun’24 Sep’24 Branch Vintage (Years) POS POS POS Branches Branches POS Contribution Branches Branches Contribution Contribution Contribution <1 Yrs 121 4% 181 4% 270 6% 278 7% 1 - 2 Yrs 190 14% 121 7% 106 6% 100 4% 2 - 3 Yrs 118 1
Slide 25: Key Strengths: People
Key Strengths : People Creating Opportunities… Stable and experienced core management team with an average tenure of almost 8 years Strong second line with diverse experience with a healthy balance of home-grown and new talent Team Size Performance driven culture with differentiated rewards for high
Slide 26: Key Strengths: Liability Management
Key Strengths : Liability Management Creating Opportunities… Average Cost of Borrowing Marginal & Average Cost of Borrowing 11.2% 10.6% 10.6% 10.4% 10.5% 10.2% 10.1% 10.4% 10.4% 10.2% 10.1% 10.0% 10.1% 10.3% 10.1% YoY QoQ '21 '22 '23 '24 H1'25 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Marginal Cost of Borrowing
Slide 27: Key Strengths: Liability Management (Contd…)
Key Strengths : Liability Management (Contd…) Creating Opportunities… Positive ALM (Months) Stable Liquidity Position For the Month Jan’25 to 23.7 24.2 23.1 24.1 Details 22.2 Oct-24 Nov-24 Dec-24 Mar'25 18.8 20.4 Opening Cash & Equivalents (A) 1,793 1,934 2,025 2,031 17.6 17.5 16.4 Loan Recovery [Pr
Slide 28: Key Strengths: Digital Orientation
Key Strengths : Digital Orientation Creating Opportunities… Technology – Infrastructure Customer Experience Early Cloud adoption Digital onboarding since 2019 Scalable Cashless disbursement at 99.81% in Open API Q2 FY25 Architecture Business Outcome Operational Efficiency “Touch & Tech” Loan Approva
Slide 29: Key Strengths: Digital Orientation (Building for future)
Key Strengths : Digital Orientation (Building for future) Creating Opportunities… Robotic Process Automation facilitating ▪ Automated credit decisioning Develop Technology Solutions Leverage Robotics ▪ Driving operational efficiency To proactively access opportunities To automate manual & repetitive
Slide 30: Key Strengths: Strong Governance
Key Strengths : Strong Governance Creating Opportunities… Independent Risk Independent Audit Function reporting Management Function to Board Audit Committee Extensive use of Au Strong reporting mechanism & Data Analytics nt d Comprehensive risk-based audits e it M nagem anage Automation driving opti
Slide 31: ESG - seeking to be a responsible Financial Institution
ESG - seeking to be a responsible Financial Institution Creating Opportunities… Responsible approach towards environment , community and employees as well as towards internal governance standards Continuous Engagement with Community and Employees Governance Standards Under 20 CSR programs, 211 activ
Slide 32: CSR: Snapshots H1 FY25
CSR : Snapshots H1 FY 25 Creating Opportunities… 43,234 20 211 21 148 (34,879 in Q2) CSR Programs CSR Activities Lives Touched States & UTs Districts 23 14 88 1,217 407 Aspirational Partnership Branding & Employees External Districts with NGOS Visibility Participation Stakeholders 31 |November 16, 2
Slide 33: CSR: Snapshots H1 FY25
CSR : Snapshots H1 FY 25 Creating Opportunities… 32 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 34: Financial Performance
Creating Opportunities… Financial Performance 6 33 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 35: Profit and Loss Statement
Profit and Loss Statement Creating Opportunities… Profit & Loss Statement (₹ Cr) Q2’25 Q2’24 YoY % Q1’25 QoQ % H1’25 H1’24 YoY% Revenue from operations - Interest income 626.08 496.80 26.02% 621.28 0.77% 1,247.36 975.80 27.83% - Other revenue from operations 65.47 49.84 31.36% 67.04 (2.34)% 132.51 1
Slide 36: Balance Sheet
Balance Sheet Creating Opportunities… Financial Position (₹ Cr) Q2’25 Q2’24 YoY % Q1’25 QoQ% Financial and Non-financial assets - Cash & Other Bank Balances 1,793.06 1,400.43 28.04% 1,590.00 12.77% - Bank balances other than cash and cash equivalents 57.50 60.70 (5.27)% 60.43 (4.85)% - Loans (Net of
Slide 37: Key Ratios
Key Ratios Creating Opportunities… QoQ Margin Analysis Cost to Income Opex to Avg. AUM 40.4% 38.4% 6.5% 21.7% 21.9% 21.8% 21.7% 36.4% 36.8% 36.8% 6.1% 6.3% 21.5% 5.9% 5.6% 11.1% 11.5% 11.6% 11.6% 11.5% 10.6% 10.4% 10.2% 10.1% 10.1% Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q2'24 Q3
Slide 38: Key Ratios
Key Ratios Creating Opportunities… GNPA 9.4% NNPA 5.5% 2.4% 3.0% 2.9% 1.3% 2.7% 0.7% 0.8% 0.6% Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 CRAR 28.8% 27.9% 27.5% 25.9% 24.4% Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 37 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 39: MSME
MSME Creating Opportunities… MSME vertical launched in Dec 2019 as a dedicated business unit to address the ‘missing middle’ Building credit assessment capability …nucleus of our MSME strategy Business Update H1 FY 25 Clients 19,656 Clear focus on mapping adjacencies and potential thereof AUM (₹ Cr)
Slide 40: Highly Experienced Board with Strong Governance
Highly Experienced Board with Strong Governance Creating Opportunities… 39 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 41: Stable & Experienced Management Team
Stable & Experienced Management Team Creating Opportunities… 40 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 42: Shareholder Profile
Shareholder Profile Creating Opportunities… Category Top Share Holders (As on date) Foreign Investment Co. BOFA SECURITIES EUROPE SA Alternate Investment Fund NUVAMA PRIVATE INVESTMENTS TRUST 57.71% 57.71% Alternate Investment Fund AIONIOS ALPHA FUND Mutual Fund NIPPON LIFE INDIA TRUSTEE LTD Mutual
Slide 43: 42 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Creating Opportunities… 42 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com
Slide 44: Abbreviations
Abbreviations Creating Opportunities… AUM Asset Under Management H Half Yearly PAT Profit After Tax Q Quarter NIM Net Interest Margin ALM Asset Liability Management ROE Return on Equity TAT Turn Around Time ROA Return on Assets API Application Programming Interface ECL Expected Credit Loss UPI Unifi
Slide 45: Definitions
Definitions Creating Opportunities… • AUM represents the aggregate of principal outstanding for all loans including the assigned portfolio as of the last day of the relevant period/year • Net Interest Income represents interest income on loan portfolio for the relevant period/year reduced by finance
Slide 46: Thank You
Creating Opportunities… Creating Thank You Opportunities… For Investor queries contact: Mr. Deepak Madaan| Email: investor.relations@fusionfin.com | +91-9289224563 45 |November 16, 2024 | © Fusion Finance Limited | www.fusionfin.com