Shriram Finance Limited · NSE:SHRIRAMFIN
Shriram Finance — Q3 FY23 Earnings Presentation
62 slides from Shriram Finance's earnings presentation, Jan 31, 2023
Slide 1: On a journey to become the most preferred Financial Services destination
On a journey to become the most preferred Financial Services destination January 31, 2023 1
Slide 2: Agenda
Company Overview 3 Business Model/Competitive Strengths 7 Market Dynamics & Growth Strategy 10 Organizational Structure 15 Performance Track Record 25 Recent Performance – Q3 FY23 36 Shriram Housing Finance (SHFL) 49 55 2 Consolidated Numbers
Slide 3: Company Overview
COMPANY OVERVIEW 3
Slide 4: Company Snapshot
Company Snapshot Leading player in organized high yield pre-owned CV financing segment and Two-wheeler segment. Diversified Portfolio – PCV’s, Construction Equipment, Tractor Financing, Personal loans, Gold Loans, MSME Finance Over 6.98 million customers Large network of 2,901 Branch offices and 746
Slide 5: Corporate History
Corporate History Securitised Rs. 87.57 Tied up with Merger of Shriram bn during FY 2010. Citicorp for CV Investment Ltd. and financing under Shriram Overseas Successfully raised Portfolio Finance Ltd. with Rs. 5.84 bn through Management STFC; PAT crosses QIP with domestic & Services (PMS) R
Slide 6: Corporate History
Corporate History Successfully Raised maximum Shriram City Union Finance Limited and Shriram Capital Limited merged raised Rs. 13.5 permissible US$ Raised Rs. 14.92 bn with Shriram Transport Finance Company Limited and was renamed as Bn through 750 million through through right issue in Shri
Slide 7: Business Model / Competitive Strengths
BUSINESS MODEL / COMPETITIVE STRENGTHS 7
Slide 8: Strategic Presence In High Yield Used CV Segment
Strategic Presence In High Yield Used CV Segment CV Financing Business Model Pre-Owned New Age of Truck 1 2 3 4 5 6 7 8 9 10 11 12 Lending Rates 14-16% 16-24% 12-16% Small truck owners (less than 5 trucks) with underdeveloped Existing customer base upgrading to new trucks Target Segment banking
Slide 9: Valuation Expertise & Relationship Based Model
Valuation Expertise & Relationship Based Model Knowledge Driven Valuation Model Critical Success Factor Vehicle Assessment Loan Amount Valuation EMI Old CVs 60-70% LTV Ratio Repayment Ability New CVs 75-80% LTV Ratio SFL has right mix of scale and skill Awareness of load structure / business mix Rel
Slide 10: Market Dynamics & Growth Strategy
MARKET DYNAMICS & GROWTH STRATEGY 10
Slide 11: Strong Industry Potential – Commercial Vehicles
Strong Industry Potential – Commercial Vehicles Market Potential (Rs. bn) Trucks (mn) Market for second hand truck financing is under penetrated with 55-60% of the market with private financiers / money lenders who 3,717 29% charge high interest rates 31% Stringent traffic regulations in major c
Slide 12: Strong Industry Potential – Other Portfolio Segments
Strong Industry Potential – Other Portfolio Segments Construction Two Wheelers Passenger Vehicle’s Tractor Financing Automall Equipment (Only New) Market Size Rs. 1,200 billion NA Rs. 800 billion Rs. 4,400 billion Rs. 1,300 billion (FY23) Infra spends in 11th 5- year plan/ PM Gati Shakti Access to r
Slide 13: Transportation Model – Multiple Financing Opportunities
Transportation Model – Multiple Financing Opportunities Hub and Spoke Transportation Model Long Haul Medium Haul Short Haul Last Mile >800 kms 350-800 kms 50-350 kms <50 kms Load re-distributed from few large hubs in major regions of the country to large number of touch points in the hinterland CV L
Slide 14: Growth Strategy
Growth Strategy Strengthening presence Introduction of top-up and expanding reach products like finance for tyres, working capital and Increase penetration into engine replacement rural and urban centers Target AUM (Rs. bn) Economies of scale - Build partnerships with incremental cost of n
Slide 15: Organizational Structure, Management Team & Board of Directors
ORGANIZATIONAL STRUCTURE, MANAGEMENT TEAM & BOARD OF DIRECTORS 15
Slide 16: Geographical Units (GU) Branches
Geographical Units (GU) Urban Semi-urban Rural Total Branches GU1 Puducherry - 7 7 14 Tamil Nadu 75 194 382 651 GU1 Total 75 201 389 665 GU2 Andhra Pradesh 30 113 151 294 Odisha - 23 28 51 Telangana 46 53 99 198 GU2 Total 76 189 278 543 GU3 Bihar 16 39 39 94 Goa - - 3 3 Jharkhand 13 21 12 46 Maharas
Slide 17: Geographical Units (GU) Branches
Geographical Units (GU) Urban Semi-urban Rural Total Branches Assam - 11 15 26 Chandigarh 2 - - 2 Chhattisgarh 5 18 49 72 Karnataka 24 62 128 214 Kerala 4 20 81 105 Manipur - 1 - 1 Meghalaya - 1 - 1 Sikkim - 1 2 3 Tripura - 2 2 4 West Bengal 15 24 19 58 GU5 Total 50 140 296 486 Grand Total 401 998 1
Slide 18: Professional Management Team with Vast Industry Experience
Professional Management Team with Vast Industry Experience • Joined as an Executive Trainee in 1987. He has been associated with Shriram Group for over 35 years and has Umesh Revankar shouldered various responsibilities and worked in several key roles of business operations. Executive Vice- • Holds
Slide 19: Professional Management Team with Vast Industry Experience
Professional Management Team with Vast Industry Experience P. Sridharan • Joined in 1996. Joint Managing • Over 26 Years experience in Shriram. Director • Holds a degree in BSC and MBA. Nilesh Odedara • Joined in 1997. Joint Managing Director • Holds a degree in BBA. • Over 25 Years experience in Sh
Slide 20: Professional Management Team with Vast Industry Experience
Professional Management Team with Vast Industry Experience K. Srinivas • Joined Shriram Group in 1992. Joint Managing • Over 30 Years experience in Shriram. Director • Holds a degree in B Com, MBA from Pune University. • Commerce Graduate, a Fellow of Cost and Management Accountants of India. R. Cha
Slide 21: Professional Management Team with Vast Industry Experience
Professional Management Team with Vast Industry Experience Hardeep Singh Tur • Joined in 1991. • Holds a degree in B. Com Chief Risk Officer • Over 30 Years experience in industry Sanjay K. Mundra President - Investor • Over 25 years experience in the finance Industry. and Media • Joined in 2007, a
Slide 22: Board of Directors
Board of Directors • Holds M.A. (Economics) from Delhi School of Economics and Post Graduate in Economics from Boston University, USA Jugal Kishore Mohapatra • IAS, Odisha Cadre, Currently, non-executive Chairman of India International Bullion Exchange IFSC Limited (IIBX) and Nominee Director of Fou
Slide 23: Board of Directors
Board of Directors • Joined as an Executive Trainee in 1987. He has been associated with Shriram Group for over 35 years and Umesh Revankar has shouldered various responsibilities and worked in several key roles of business operations. Executive Vice- Chairman • Holds a degree in MBA Finance. • Appo
Slide 24: Board of Directors
Board of Directors • Joined CV Finance business of Shriram Group in 1992 as Head of Investment Servicing. • Currently serves as Managing Director of Shriram Capital Private Limited. D V Ravi • Spearheaded several successful M&A’s for TAKE Solutions Ltd. Director • Started his career in Strategy and
Slide 25: Performance Track Record
* SHRIRAM Finance PERFORMANCE TRACK RECORD
Slide 26: Strong Financial Track Record
Strong Financial Track Record FY16 FY17 FY18 FY18 FY19 FY20 FY21 FY22 P&L Metrics (Rs. mn) IGAAP IGAAP IGAAP IndAS IndAS IndAS IndAS IndAS Interest Income (Incl. Securitization) 101,953.3 107,305.8 121,435.5 132,710.3 154,441.4 164,773.1 173,346.6 191,806.2 Less: Interest Expenses 50,743.8 52,094.0
Slide 27: Strong Financial Track Record
Strong Financial Track Record Balance Sheet Metrics (Rs. FY15 FY16 FY17 FY18 FY18 FY19 IndAS FY20 IndAS FY21 IndAS FY22 IndAS mn) IGAAP IGAAP IGAAP IGAAP IndAS - On Books 4,92,271.4 6,18,783.7 6,54,628.7 7,96,729.2 8,00,013.7 8,50,847.3 1,085,017.1 1,161,916.0 1,256,990.3 - Off Books 98,811.4 1,08,8
Slide 28: Healthy Asset Quality (as per IGAAP)
Healthy Asset Quality (as per IGAAP) Particulars (Rs. mn) FY14 FY15 FY16 FY17 FY18 Gross NPA 14,505.0 18,941.4 38,702.4 54,084.4 73,763.9 Net NPA 3,029.1 3,791.2 11,437.0 16,590.0 21,311.4 Gross NPA (%) 3.86% 3.80% 6.18% 8.16% 9.15% Net NPA (%) 0.83% 0.79% 1.91% 2.65% 2.83% Coverage ratio (%) 79.12%
Slide 29: Healthy Asset Quality (as per IndAS)
Healthy Asset Quality (as per IndAS) Particulars (Rs. mn) FY18 FY19 FY20 FY21 FY22 YoY (%) Gross Stage 3 90,842.1 86,222.7 91,797.1 82,952.1 88,875.5 7.14% ECL provision-Stage 3 30,953.2 29,670.0 31,886.5 34,885.3 44,415.0 27.32% Net Stage 3 59,888.9 56,552.7 59,910.6 48,066.8 44,460.5 -7.50% Gross
Slide 30: Access to Low Cost Funds
Access to Low Cost Funds Funding Mix as % of Overall Liabilities Reta il Ba nks/Ins titutions 80.60% 81.50% 85.40% 87.18% 86.80% 84.76% 80.86% 19.40% 18.50% 14.60% 12.82% 13.20% 15.24% 19.14% FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 Strategic mix of retail deposits and institutional funding match
Slide 31: Credit rating as on December 31, 2022
Credit rating as on December 31, 2022 Credit Rating Agency Instruments Ratings as on 31.12.2022 CARE Commercial Paper CARE A1+ CARE Non-convertible debentures CARE AA+/Stable CARE Subordinated debt CARE AA+/Stable CRISIL Bank Loan Long-term CRISIL AA+/Stable CRISIL Bank Loan Short-term CRISIL A1+ CR
Slide 32: Shareholding Pattern as on December 31, 2022 vs December 31, 2021
Shareholding Pattern as on December 31, 2022 vs December 31, 2021** No. of shares outstanding: 374.43 mn No. of shares outstanding: 270.52 mn Other Public, 5.69% Public, 4.91% Other Corporate Corporate Body , 8.59% Promoters Body , 0.18% & Promoters Promoters & MF/Bank/ group*, Promoters Insurance M
Slide 33: Has Attracted Strong Interest from Quality Investors
Has Attracted Strong Interest from Quality Investors Consistent track record and high growth potential has attracted reputed institutional and private equity investors to infuse growth capital Last Four fund raising : 1. On November 25, 2021, allotted 1.736 mn equity shares of face value of Rs.
Slide 34: List of Key Shareholders
List of Key Shareholders Key Shareholders Shareholding As on % December 31, 2022 (Mn Shares) Promoter and Promoter Group 94.70 25.29 Piramal Enterprises Limited 31.22 8.34 Dynasty Acquisition (FPI) Ltd 17.34 4.63 Life Insurance Corporation Of India 16.37 4.37 TPG India Investments II, Inc. 9.92 2.65
Slide 35: Well-Capitalized Balance Sheet
Well-Capitalized Balance Sheet Capital Adequacy Ratio at 22.97% (Tier I - 20.70%, Tier II - 2.27%) as on March 31, 2022 vs 15% mandated by RBI Networth (Rs. mn) CRAR (%) Book Value (Rs.) 22.97% 21.99% 20.27% 22.50% 17.38% 17.56% 16.94% 16.87% 958.61 852.30 793.59 697.99 554.12 598.35 497.71 446.60
Slide 36: Recent Performance
Ke SHRIRAM Finance RECENT PERFORMANCE
Slide 37: Performance Highlights – Q3 FY23 vs Q3 FY22
Performance Highlights – Q3 FY23 vs Q3 FY22* Q3 FY23 Rs 76,122.9 mn Total Income Q3 FY22* Rs 48,323.3 mn Net Interest Income** Q3 FY23 Rs 44,278.8 mn ** including Net Direct assignment Income Q3 FY22* Rs 23,879.7 mn Rs. 401.8 Mn (Q3 FY22 Rs. 672.8 Mn) Q3 FY23 Rs 17,769.7 mn PAT Q3 FY22* Rs 6,806.2 m
Slide 38: Performance Highlights – 9M FY23 vs 9M FY22
Performance Highlights – 9M FY23 vs 9M FY22* 9M FY23 Rs 220,344.6 mn Total Income 9M FY22* Rs 141,866.4 mn 9M FY23 Rs 125,171.8 mn Net Interest Income** 9M FY22* Rs 66,882.4 mn ** including Net Direct assignment Income Rs. 1,452.6 Mn (9M FY22* Rs. 1,807.8 Mn) 9M FY23 Rs 46,710.3 mn PAT 9M FY22* Rs
Slide 39: Performance Highlights – Q3 FY23 vs Q3 FY22
Performance Highlights – Q3 FY23 vs Q3 FY22* Q3 FY23 Rs 1,774,981.7 mn AUM 13.17 % Q3 FY22 Rs 1,568,486.3 mn Q3 FY23 Rs 110,586.1 mn Gross Stage 3 assets* Q3 FY22 Rs 103,581.1 mn Q3 FY23 Rs 54,505.5 mn Net Stage 3 assets* Q3 FY22 Rs 51,526.9 mn Q3 FY23 Rs 1,132.94 Book Value* Q3 FY22 Rs 935.61 Note:
Slide 40: AUM Break-up
AUM Break-up Particulars (Rs. mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22 YoY (%) QoQ (%) FY22 Loan Portfolio - On Books Balance sheet assets 1,565,702.4 1,481,483.7 1,408,975.1 1,346,588.1 16.27% 5.68% 1,348,800.8 Securitised assets 192,736.1 196,216.5 206,728.7 208,224.7 -7.44% -1.77% 214,081.6 Total On b
Slide 41: Segment-wise AUM Break up
Segment-wise AUM Break up Product Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22 YoY (%) QoQ (%) FY 22 (Rs. bn) Amt % Amt % Amt % Amt % Amt % Commercial Vehicles 906.2 51.05% 876.8 51.77% 850.9 52.21% 809.6 51.62% 11.92% 3.35% 828.2 52.51% Passenger Vehicles 318.1 17.92% 300.6 17.75% 283.2 17.38% 263.1 16.77% 20.9
Slide 42: Branch & AUM distribution – Q3 FY23 vs Q3 FY22
Branch & AUM distribution – Q3 FY23 vs Q3 FY22 Urban, Rural, Branch (Nos) Urban, 401 Rural, 1,502 AUM (Rs in bn) 245.4 919.0 Q3 FY23 Q3 FY23 Semi- Semi- Total Branch 2,901 Urban, Urban, 998 Total AUM 610.6 Rs 1,775.0 bn Urban, Rural, 391 Urban, Rural, 1,423 217.5 791.5 Q3 FY22 Q3 FY22 Semi- Urban, 1
Slide 43: Provision Analysis
Provision Analysis Particulars (Rs. in mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22* YoY (%) QoQ (%) FY22* Gross Stage 3 110,586.1 105,830.5 101,315.5 103,581.0 6.76% 4.49% 88,875.5 ECL provision-Stage 3 56,080.6 51,922.6 49,255.5 52,054.0 7.74% 8.01% 44,415.0 Net Stage 3 54,505.5 53,907.9 52,060.0 51,527.0
Slide 44: P&L Statement
P&L Statement Particulars (Rs. mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22* YoY (%) QoQ (%) 9M FY23 9M FY22* YoY (%) FY22* Interest income 75,699.1 73,836.8 69,694.2 48,109.5 57.35% 2.52% 219,230.1 141,263.3 55.19% 191,806.2 Interest expended 31,420.3 32,788.2 29,849.8 24,229.8 29.68% -4.17% 94,058.3 74,380
Slide 45: Summarized Balance Sheet
Summarized Balance Sheet Particulars (Rs. mn) Dec-22 Sep-22 Jun-22 Dec-21* YoY (%) QoQ (%) Mar-22* I. Assets Financial Assets a) Cash and bank balances 167,437.1 251,951.1 257,083.6 181,393.5 -7.69% -33.54% 163,551.6 b) Loans 1,650,433.4 1,576,252.9 1,519,010.6 1,135,801.1 45.31% 4.71% 1,166,651.5 c
Slide 46: Key Metrics – Q3 FY23
Key Metrics – Q3 FY23 F P&L Metrics (Rs. mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22* YoY (%) QoQ (%) 9M FY23 9M FY22* YoY (%) Y FY22* Interest Income 75,699.1 73,836.8 69,694.2 48,109.5 57.35% 2.52% 219,230.1 141,263.3 55.19% 191,806.2 Less: Interest Expenses 31,420.3 32,788.2 29,849.8 24,229.8 29.68% -4.1
Slide 47: Borrowing Profile
Borrowing Profile Q3 FY23 Q2 FY23 Q3 FY22 Product Amt in bn % Amt in bn % Amt in bn % Non-Convertible Debentures 325.93 21.26% 335.55 21.21% 271.58 19.08% Public Deposit 344.89 22.49% 325.43 20.57% 280.34 19.69% Securitisation 202.68 13.22% 198.46 12.54% 230.76 16.21% Subordinated debts 46.35 3.02%
Slide 48: ALM statement on December 31, 2022
ALM statement on December 31, 2022 Over one Over 2 Over 3 Over 6 Over one Over 3 to Particulars (Rs. Bn) One month month to 2 months to months to months to year to 3 Over 5 years Total 5 years months 3 months 6 months one year years Total Outflows 58.60 51.85 67.13 148.12 263.67 658.27 165.43 591.24
Slide 49: Shriram Housing Finance (SHFL)
SHRIRAM HOUSING FINANCE (SHFL) 49
Slide 50: AUM Break-up
AUM Break-up Particulars (Rs. mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22 YoY (%) QoQ (%) FY22 Loan Portfolio - On Books Balance sheet assets 57,518.1 54,236.5 47,649.6 38,300.5 50.18% 6.05% 45,167.6 Securitised assets 2,864.7 1,780.0 1,898.4 604.0 374.32% 60.94% 577.8 Total On books 60,382.8 56,016.5 49,54
Slide 51: Assets under Management
Assets under Management Segment (Rs. mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22 YoY (%) QoQ (%) FY22 HL 42,518.4 38,800.5 34,720.0 28,119.0 51.21% 9.58% 31,951.6 LAP 20,412.8 18,364.1 16,533.7 12,811.4 59.33% 11.16% 15,499.8 Top up 3,475.2 3,176.9 2,910.8 2,461.2 41.20% 9.39% 2,743.8 CF 4,115.0 4,047.1 3,5
Slide 52: P & L Statement
P & L Statement Particulars (Rs. mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22 YoY (%) QoQ (%) 9M FY23 9M FY22 YoY (%) FY22 Interest income 1,826.4 1,596.9 1,362.8 1,130.5 61.56% 14.37% 4,786.2 3,253.5 47.11% 4,467.7 Interest expended 1,030.3 951.6 749.2 703.1 46.54% 8.27% 2,731.1 2,103.0 29.87% 2,806.0 Net i
Slide 53: Summarized Balance Sheet
Summarized Balance Sheet Particulars (Rs. mn) Dec-22 Sep-22 Jun-22 Dec-21 YoY (%) QoQ (%) Mar-22 I. Assets Financial Assets a) Cash and bank balances 1,388.8 2,505.6 2,807.5 2,402.0 -42.18% -44.57% 2,295.5 b) Loans 59,812.4 55,434.4 48,994.0 38,362.0 55.92% 7.90% 45,221.5 c) Investments 2,921.1 2,06
Slide 54: Provision Analysis
Provision Analysis Particulars (Rs. in mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22 YoY (%) QoQ (%) FY22 Gross Stage 3 696.4 853.7 771.8 961.3 -27.55% -18.42% 788.0 ECL provision-Stage 3 169.8 207.2 181.5 192.7 -11.88% -18.05% 184.4 Net Stage 3 526.6 646.5 590.3 768.6 -31.48% -18.54% 603.6 Gross Stage 3 (%)
Slide 55: Key Metrics
Key Metrics P&L Metrics (Rs. mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22 YoY (%) QoQ (%) 9M FY23 9M FY22 YoY (%) FY22 Interest Income 1,826.4 1,596.9 1,362.8 1,130.5 61.56% 14.37% 4,786.2 3,253.5 47.11% 4,467.7 Less: Interest Expenses 1,030.3 951.6 749.2 703.1 46.54% 8.27% 2,731.1 2,103.0 29.87% 2,806.0 Net
Slide 56: Consolidated Numbers
Consolidated Numbers 56
Slide 57: Associate
Associate Shriram Automall India Limited (SAMIL), an ISO 9001:2015 certified company, is India's Largest Phy-gital Pre-owned Marketplace connecting pre-owned vehicles and equipment buyers and sellers. SAMIL began its journey in 2011 by setting up India's first professionally managed and organize
Slide 58: Financial Performance (Consolidated)
Financial Performance (Consolidated) Particulars (Rs. mn) Q3 FY23 Q2 FY23 Q1 FY23 Q3 FY22* YoY (%) QoQ (%) 9M FY23 9M FY22* YoY (%) FY22* Interest income 77,563.9 75,569.1 71,041.8 48,109.5 61.22% 2.64% 224,174.8 141,263.3 58.69% 191,806.2 Interest expended 32,449.7 33,739.0 30,597.4 24,229.8 33.92%
Slide 59: Summarized Balance Sheet (Consolidated)
Summarized Balance Sheet (Consolidated) Particulars (Rs. mn) Dec-22 Sep-22 Jun-22 Dec-21* YoY (%) QoQ (%) Mar-22* I. Assets Financial Assets a) Cash and bank balances 168,805.8 254,456.8 259,891.1 181,393.5 -6.94% -33.66% 163,551.6 b) Loans 1,710,571.8 1,632,188.4 1,568,681.1 1,135,801.1 50.60% 4.80
Slide 60: About Us
About Us About Shriram Finance Ltd. Shriram Finance Limited is the flagship company of the Shriram group which has significant presence in Consumer Finance, Life Insurance, General Insurance, Housing Finance, Stock Broking and Distribution businesses. Shriram Finance Limited is India’s largest retai
Slide 61: For any Investor Relations queries please contact
Contact Us For any Investor Relations queries please contact Sanjay K. Mundra Shriram Finance Ltd Email: smundra@shriramfinance.in Tel. No. +91-22-4095 9507 61
Slide 62: Thank You
Thank You 62