Spandana Sphoorty Financial Limited · NSE:SPANDANA
Spandana Sphoorty Financial — Q2 FY2020 Earnings Presentation
35 slides from Spandana Sphoorty Financial's earnings presentation, Oct 31, 2019
Slide 1: Cover letter to stock exchanges
, ..... ~, /, SPAN DANA Ref: SSFI/Stock Exchange/2019-20/17 Date: October 31, 2019 To To BSE Limited, National Stock Exchange of India Limited, Department of Corporate Services Listing Department P. J. Towers, 25 th Floor, Exchange Plaza, C-1, Block G Dalal Street, Bandra Kurla Complex, Bandra (E) M
Slide 2: Spandana Sphoorty Financial Limited Investor Presentation
Spandana Sphoorty Financial Limited ….Committed to low-income households 16 Investor Presentation October 2019 Years
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Spandana Sphoorty Financial Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe f
Slide 4: Performance Snapshot
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 3
Slide 5: Performance Snapshot
Performance Snapshot Net Worth Largest Microfinance Company in terms of Profit Before Tax (PBT) Capital Adequacy (Rs. Crs.) 2,377 51.0% 2nd Largest Microfinance Company in terms of Market Capitalization Leverage GNPA / NNPA 3rd Largest Microfinance Company in India with an AUM of Rs. 5,407 crore, 1.
Slide 6: Q2FY20 – Key Performance Highlights
Q2FY20 – Key Performance Highlights AUM (Rs. Crs) Disbursement (Rs. Crs) No. of Borrowers (In lakhs) No. of Branches +37% +45% +16% +15% 5,407 1,829 24.7 941 21.3 816 3,948 1,263 Operating Metrics Sep-18 Sep-19 Q2FY19 Q2FY20 Sep-18 Sep-19 Sep-18 Sep-19 Total Income (Rs. Crs) Net Interest Income (Rs.
Slide 7: Key Operating Metrics
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 6
Slide 8: Operational Summary
Operational Summary Gross Loan Portfolio (Rs. Crs) Disbursements (Rs. Crs.) Borrowers (In lakhs) CAGR CAGR +41% CAGR 5,407 +55% 4,969 24.6 24.7 +77% 4,372 21.3 3,858 3,711 3,948 3,166 15.9 2,244 2,059 10.6 11.5 1,297 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 FY17 FY18 FY19 H1FY20 Mar-17 Sep-17 Mar-1
Slide 9: Rising Branch and Employee Productivity
Rising Branch and Employee Productivity Borrowers/Branch (#) AUM/Borrower (Rs.) Borrowers/Loan Officer (#) CAGR +13% CAGR Excl. Trainees Incl. Trainees +26% 2,611 2,658 2,630 21,850 740 19,970 700 2,285 19,511 18,533 667 17,780 630 1,948 1,966 547 534 539 526 12,236 500 567 577 470 Mar-17 Sep-17 Mar
Slide 10: Diversified Geographical Presence
Diversified Geographical Presence Well dispersed district level exposure Top States By Branch Network Well spread AUM Mix ensures low impact from region-specific issues Top States Number of Branches Orissa 149 District wise Concentration Madhya Pradesh 149 Karnataka 131 < 0.5% 194 Maharashtra 115 An
Slide 11: Key Financial Metrics
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 10
Slide 12: Financial Performance for Q2 FY20
Financial Performance for Q2 FY20 Total Revenue (Rs. Crs) Net Interest Income (Rs. Crs) Yield (%) Cost of Borrowings (%) +177% +186% -330 bps -690 bps -150 bps 1,049 632 29.5% 20.3% 25.7% 26.2% 25.5% +90 bps 24.0% +57% 14.2% 13.4% +42% 12.7% 588 341 11.8% 379 366 221 243 257 155 FY17 FY18 FY19 Q2 FY
Slide 13: Impact of Deferred Tax on P&L
Impact of Deferred Tax on P&L Deferred tax impact to P&L during H1 was notionally high since the actual tax outflow for H1 was only Rs. 2.1 Crs 31st March Opted lower tax rate of 22% 30th September Particulars 2019 2019 Write-off of old AP portfolio of Rs. 317.6 Crs and DTA - Old AP Rs. 125.5 Crs. R
Slide 14: Profit & Loss Statement
Profit & Loss Statement Particulars Q2 FY20 Q2FY19 Y-o-Y Q1FY20 Q-o-Q H1FY20 H1FY19 Y-o-Y Revenue from Operations Interest and Fee Income 302.4 249.7 277.3 579.7 472.9 Net gain on fair value changes 48.3 2.7 14.8 63.1 4.8 Fees & commission 5.9 4.2 4.9 10.8 7.6 Other Operating Income 1.9 0.7 1.2 3.1
Slide 15: Balance Sheet
Balance Sheet ASSETS (Rs. Crs.) Sep 30, 2019 Mar 31, 2019 LIABILITIES & EQUITY (Rs. Crs.) Sep 30, 2019 Mar 31, 2019 Financial Assets Financial Liabilities Debt Securities 1,177.1 1,372.0 Cash and cash equivalents 781.0 148.6 Borrowings (Other than Debt Securities) 1,962.4 1,575.5 Bank Balances other
Slide 16: Diversified Borrowing Profile
Diversified Borrowing Profile Borrowings (Rs. Crs) Diversified Funding Mix (As on Sep-19) Improving Credit Rating (3 upgrades by ICRA in two years) 3,160 2,968 Private Banks 6% 4% A- 2,331 10% Public Sector Banks Mar-19 Small Finance Banks (Stable) 4% 55% NBFCs 933 21% FPIs Mutal Funds BBB+ Mar-17 M
Slide 17: Positive Asset-Liability Gap & Comfortable Liquidity Position
Positive Asset-Liability Gap & Comfortable Liquidity Position Positive ALM Mismatch (Rs. Crs) Sept 19 – Liquidity Position 1,564 Liabilities Cash & Cash Equivalents Rs. 783 Crs Assets Unavailed Sanctions Rs. 920 Crs 1,167 1,089 1,090 929 Well Capitalized for Growth 750 617 Particulars (Rs. Crs) Q3 F
Slide 18: Spandana at a Glance
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 17
Slide 19: Company Overview
Company Overview ▪ Founded by Padmaja Reddy who has over 24 years of experience in development and microfinance sector ▪ Operating as an NBFC since 2004 and NBFC-MFI since 2015 ▪ By March 2010, we were the 2nd largest MFI in India in terms of AUM and borrowers and were one of the most profitable pla
Slide 20: Focused on Rural Markets
Focused on Rural Markets MFIs - Urban vs. Rural AUM Split* MFIs - Urban vs. Rural Industry Portfolio Quality* 4.15% 10% 2.37% 46% Spandana MFI Industry 54% (Sep 30, 2019) 0.86% 0.99% 0.94% 1.00% 90% 1 - 30 31-180 180+ Rural Urban Rural Urban ▪ Close to 68% of India’s population live in rural areas#
Slide 21: Our Products
Our Products Product Name Purpose Interest Rate (%) Tenor Ticket Size (Rs.) Core Product: 98% of AUM • Abhilasha stands for “Aspiration” • This unique loan is designed especially for low-income households who aspire to improve their financial well-being Abhilasha 24 1 to 2 Years 25,000 to 80,000 • T
Slide 22: Efficient Business Process
Efficient Business Process 2 • Scanned Documents uploaded to the app directly • Data is entered directly into the app by the loan officer 1 and key data entry is 3 • Group Formation with 8 to 10 automated members • Group training, house visits, • KYC Document collection credit appraisal, group throu
Slide 23: Niche Business Model
Niche Business Model Business Model Processes HR policies ▪ Standardized systems and a front-end ▪ Group size of 8 to 10 women interface that gives real time ▪ Strict employee transfer policy with information on demand and collections adherence to operational risk control ▪ Loans given under Joint L
Slide 24: Learnings from Industry Cycles
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 23
Slide 25: Implemented Learning from AP Crisis
Implemented Learning from AP Crisis Diversified Geographical Presence No. of States and UT’s No. of Districts Top State Contribution Top 3 States Contribution present +5 17 +80 272 53% - 34% 81% - 30% 12 192 51% 19% Sep-10 Sep-19 Sep-10 Sep-19 Sep-10 Sep-19 Sep-10 Sep-19 Reduced Leverage Improved Ca
Slide 26: Strong Performance since CDR Exit
Strong Performance since CDR Exit 3rd Largest MFI Rs. Crs. CDR Exit in the Country* March-17 2Yrs Sep 19 4x Gross AUM (excl. old AP) 1,297 5,407 Net worth# 928 2.6x 2,377 Gross PAR 90+ 89@ Reduced by 60% 36 Profit before Tax 46 # 10x 473** Lenders 3 11x 33 Credit rating^ NA 3 Upgrades A - (Stable) R
Slide 27: Seasoned and Resilient Business Model
Seasoned and Resilient Business Model Challenges faced Spandana Approach Outcome • Kept on-ground presence in AP by keeping branches open and engaging with customers Andhra Pradesh (AP) • Managed recovery in old AP portfolio • Continuing operations in other states Crisis • Executed profitable operat
Slide 28: Key Takeaways
Key Takeaways Largest NBFC-MFI (PBT)* 2nd largest NBFC-MFI (Market cap)* 3rd Largest NBFC-MFI (AUM)* Rural High Geographic Well Capitalized Low Operating Focus Diversity Expenses 16 states 1 Union Territory 51.0% Capital Adequacy 90% portfolio in 272 districts Ratio 4.1% Opex ratio underserved rural
Slide 29: Annexure
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 28
Slide 30: Microfinance in India – Rs. 5-6 Tn opportunity
Microfinance in India – Rs. 5-6 Tn opportunity 3rd India has Urban Rural India is amongst Top 3 nations with 640,000 Particulars (# in Mn) Villages in rural India unbanked people No. of HHs (Census 2011) 78 168 Rural Villages have Rural India has 68% 10% No. of HHs (2018e) 90 180 of India’s populati
Slide 31: IPO Details
IPO Details Face Value Rs.10 Per Share Issue Price Rs. 856 Per Share Listed on NSE and BSE on 19th August 2019 Particulars Shares Rs. Crores Fresh Issue 4,543,385 389* Offer For Sale 9,356,725 801 Total 13,900,110 1,190 Shareholding Structure (%) Particulars Pre IPO Post IPO Promoter Holding 78.71%
Slide 32: Experienced Board of Directors
Experienced Board of Directors Ms. G Padmaja Reddy| Managing Director Sunish Sharma | Nominee Director, Kedaara Capital 01 She is post-graduation in management, worked in an NGO and later in 1998, started ‘Spandana’. She pursued various trainings on Microfinance – 06 He is the Managing Partner and c
Slide 33: Historical Profit & Loss Statement
Historical Profit & Loss Statement Particulars (Rs. Crs.) 31-Mar-19 31-Mar-18 31-Mar-17 Interest Income 998 573 371 Commission Income 15 4 4 Net gain on fair value changes 27 4 2 Others 4 6 1 Total Revenue from operations 1,043 587 377 Other income 5 0 2 Total Income 1,049 588 379 Finance cost 358 2
Slide 34: Historical Balance Sheet
Historical Balance Sheet ASSETS (Rs. Crs.) 31-Mar-19 31-Mar-18 31-Mar-17 LIABILITIES & EQUITY (Rs. Crs.) 31-Mar-19 31-Mar-18 31-Mar-17 Financial Assets Financial Liabilities Debt Securities 1,372 1,015 - Cash and cash equivalents 149 105 290 Bank Balances other than cash and cash Borrowings (Other t
Slide 35: Thank You
Contact Information Company : Investor Relations Advisor : Spandana Sphoorty Financial Limited Strategic Growth Advisors Pvt. Ltd. CIN: L65929TG2003PLC040648 CIN: U74140MH2010PTC204285 Mr. Sudhesh Chandrasekar Ms. Payal Dave / Ms. Neha Shroff Chief Financial Officer E: payal.dave@sgapl.net / neha.sh
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