Satin Creditcare Network Ltd · NSE:SATIN
Satin Creditcare Network — Q4 FY17 Earnings Presentation
69 slides from Satin Creditcare Network's earnings presentation, May 26, 2017
Slide 1: Cover letter to stock exchanges
May 26, 2017 To, The Manager, The Manager The Manager, National Stock Exchange of India Ltd. BSE Limited The Calcutta Stock Exchange Ltd Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy 7, Lyons Range Bandra Kurla Complex, Towers, Kolkata 700001 Bandra East, Dalal Street, Mumbai-400051 Mumbai – 4000
Slide 2: Investor Presentation - 4Q FY17
SATIN CREDITCARE NETWORK LIMITED INVESTOR PRESENTATION - 4Q FY17 MAY 2017 BSE: 539404 | NSE: SATIN | CSE: 30024 Corporate Identity No. L65991DL1990PLC041796
Slide 3: Disclaimer
Disclaimer By accessing this presentation, you agree to be bound by the following terms and conditions. This presentation (which may reflect some price sensitive information in terms of SEBI regulations and Companies Act, 2013, as amended from time to time) has been prepared by Satin Creditcare Netw
Slide 4: Contents
Contents Details Corporate Overview 3 Product Portfolio 7 Highlights of Mar’17 Performance 12 Impact of Demonetization – SCNL 18 Impact of Demonetization – TSL 26 Digital Transformation and Cashless Disbursements 28 Key Investment Thesis 32 Annexure Financial & Operational Details – Consolidated 48
Slide 5: Corporate Overview
Corporate Overview
Slide 6: Company Overview
Company Overview Satin Creditcare Network Ltd. (‘Satin’ or ‘SCNL’) is India’s third largest Microfinance Shareholding Pattern – April 30, 2017 Institution (MFI) in terms of Gross Loan Portfolio (Mar’17)* with a strong presence in North India Other Promoters and 21.50% promoter group Listed on CS
Slide 7: Key Milestones
Key Milestones Reaches 2.65 mn(A) active clients and gross AUM of Raised Rs. 2.50 bn via QIP in Rs.40,665.98 mn(A) as on Mar’17 Oct’16 Satin raises USD 10 mn from ADB – making this ADB’s Reaches 0.17 mn active clients and CARE Ratings upgraded LT Bank first direct equity investment in a NB
Slide 8: Select Accolades & Key Highlights
Select Accolades & Key Highlights Announced Winner of “Best NBFC-MFI Award” & Award by Client Protection Certificate Runner-up for “CSR Initiatives & Business Responsibility MF Transparency Organization Smart Campaign - 2016 Award” in NBFC-MFI category– CIMSME Banking and NBFC Awards 2016 Receiv
Slide 9: Product Portfolio
Product Portfolio
Slide 10: Product Portfolio – Details
Product Portfolio – Details Business Correspondent MFI Segment(1) Non-MFI Segment services(2) Product Financing Product features as on Mar’17 MFI Lending Loans to MSME(3) TSL(4) (Loan for Solar lamps) Start Date May’08 (JLG) Oct’15 Apr ‘16 May’12(4) Rs. 100,000 – Rs. Rs. 15,000 – Rs. 35,000 Ticket S
Slide 11: Product Portfolio - Diversification Underway
Product Portfolio - Diversification Underway(1) Started operations in 1990 with an objective to provide ‘doorstep’ credit and savings services to individual businesses engaged in productive, trading and services activities in urban areas; gradually forayed into semi-urban and rural areas also St
Slide 12: Product Portfolio – Other Service Offerings
Product Portfolio – Other Service Offerings On Sep 1, 2016, Satin acquired majority stake in TSL which acts as a business correspondent for various banks and provides similar services to other financial institutions in rural and semi-urban areas which have limited access to banking network Taraa
Slide 13: Further Product Diversification by Entry into Affordable Housing
Further Product Diversification by Entry into Affordable Housing Rationale for entry into housing finance Target market and segment for Satin Satin’s Board, on 10 Feb’17, approved the formation of a wholly-owned Income Unit Cost of Unit Housing Housing Finance Company and entry into affordable housi
Slide 14: Highlights of Mar'17 Performance
Highlights of Mar’17 Performance
Slide 15: Highlights of FY17 Performance
Highlights of FY17 Performance SCNL Consolidated Results – FY17 vs. FY16 Consolidated - Revenue / PAT (Rs. mn) – Gross AUM at Rs. 40.67 bn registered a growth of 24% yoy Revenue PAT – Revenue increased by 43% yoy to Rs. 8.01 bn 8,014.66 – PAT (after minority interest) at Rs. 248.74 mn declined 57% y
Slide 16: Highlights of 4QFY17 Performance
Highlights of 4QFY17 Performance SCNL Consolidated Results - 4QFY17 Consolidated - Revenue / PAT (Rs. mn) – Gross AUM at Rs. 40.67 bn, growth of 24% yoy and 9% qoq Revenue PAT – Revenue at Rs. 1.75 bn, increase of 1% yoy and a decrease of 20% qoq 163 169 – PAT at Rs. -430.42 mn vs. Rs. 169.06 in 3QF
Slide 17: Operational Highlights
Operational Highlights Gross Lending Portfolio (Rs. Mn) No. of Branches TSL TSL 40,666 767 32,708 431 36,168** 21,407 618** 267 10,561 199 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 **On standalone basis, excluding TSL **On standalone basis, excluding TSL No. of States of Operation (Standalone) No. of
Slide 18: Operational Highlights (Contd.)
Operational Highlights (Contd.) No. of Employees No. of Loan Officers TSL TSL 6,910 4,481 3,918 2,698 5,801** 3,711** 2,496 1,710 1,958 1,347 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 **On standalone basis, excluding TSL **On standalone basis, excluding TSL Total no. of Active Clients (Million) JLG lo
Slide 19: Robust Operational Metrics
Robust Operational Metrics (1) GLP/ Branch – MFI Lending (Rs. Mn) GLP/ Loan Officer – MFI Lending (Rs. Mn) 12.5 12.1 80.2 75.6 9.5 58.0 7.8 8.4 53.1 52.0 FY14 FY15 FY16 FY17 FY17 - FY15 FY16 FY17 FY17 - Industry Industry No. of Clients/ Loan Officer – MFI Lending No. of Clients/ Branch – MFI Lending
Slide 20: Impact of Demonetization – SCNL (Standalone)
Impact of Demonetization – SCNL (Standalone)
Slide 21: Collections – Strong Recovery from the Lows Post Demonetization
Collections – Strong Recovery from the Lows Post Demonetization; Focus remains on improving collections Collection trend % – All States 93% 94% 95% 91% 88% 88% 91% 86% 86% 81% 81% 83% 79% 82% 78% 73% 71% 71% 76% 65% 71% 58% 58% 61% 58% 30 Nov'16 31 Dec'16 31 Jan'17 28 Feb'17 31 Mar'17 30 Apr'17 15 M
Slide 22: Collections – Significant Improvement in UP, Bihar
Collections – Significant Improvement registered in UP, Bihar returned to normalcy much faster Uttar Pradesh - Collection trend % 91% 92% 94% 88% 82% 85% 87% 81% 80% 73% 77% 68% 70% 73% 68% 58% 54% 57% 63% 50% 56% 34% 36% 36% 41% 30 Nov'16 31 Dec'16 31 Jan'17 28 Feb'17 31 Mar'17 30 Apr'17 15 May'17
Slide 23: Collections – Recovery Gathers Momentum in MP and Punjab
Collections – Recovery Gathers Momentum in MP and Punjab Madhya Pradesh - Collection trend % 93% 94% 94% 95% 92% 89% 90% 87% 88% 84% 85% 86% 80% 82% 81% 83% 77% 76% 77% 79% 67% 76% 65% 66% 63% 30 Nov'16 31 Dec'16 31 Jan'17 28 Feb'17 31 Mar'17 30 Apr'17 15 May'17 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Pu
Slide 24: Zero Collections – Clients Staging a Strong Return to Satin
Zero Collections – Clients Staging a Strong Return to Satin, Willingness to Repay Remains Intact Zero Collection Clients (‘000) 779 481 279 206 167 144 119 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 15 May'17 22,346 Zero Collection Centres 10,392 4,594 3,150 2,682 2,280 1,990 Nov'16 Dec'16 Jan'17 Feb
Slide 25: Disbursements – Slow down post demonetization
Disbursements – Slow down post demonetization, return to normal disbursements since Q4 FY17 Avg. Monthly Disbursements (Rs. mn) 3,728 3,555 969 1H FY17 3QFY17 4QFY17 23
Slide 26: Situation has now Returned to near Normalcy
Situation has now Returned to near Normalcy Factors Impacting Satin’s Collections and Disbursements Currency Shortage: Shortage was especially severe in Political Interference: The local politicians took the Northern States, poll bound regions, and rural areas advantage of the situation and misguide
Slide 27: Impact on Financials – Interest Reversal and Higher Provisions
Impact on Financials – Interest Reversal and Higher Provisions impacted profitability Interest Reversal As per RBI revised guidelines, Satin deferred the classification of existing standard asset as substandard. However, as per Satin’s existing policy and the RBI guidelines, for FY17 Satin has rev
Slide 28: Impact of Demonetization – TSL (Taraashna)
Impact of Demonetization – TSL (Taraashna)
Slide 29: TSL Collections Normalizing, Disbursements Back to Pre-demonetization
While Collections for TSL are returning back to normalcy, Disbursements are back to pre-demonetization levels Collection trend % 98% 98% 98% 99% 97% 96% 93% 94% 93% 92% 92% 90% 90% 88% 89% 88% 85% 88% 84% 84% 30 Nov'16 31 Dec'16 31 Jan'17 28 Feb'17 31 Mar'17 30 Apr'17 Nov'16 Dec'16 Jan'17 Feb'17 Mar
Slide 30: Digital Transformation and Cashless Disbursements
Digital Transformation and Cashless Disbursements
Slide 31: Digital Transformation Expedited and Well Underway
Digital Transformation Expedited and Well Underway Digital Transformation Underway ADVANTAGES OF NEW SYTSTEM – Implemented across 180 branches Completed • Real Time reporting from the field Migrated to a training for all centralized • A major step towards full automation field staff on database TABs
Slide 32: Complete Revamp of our Cashless Disbursements
Complete Revamp of our Cashless Disbursements – To help realize operational efficiencies Cashless Disbursements Methodology Previous System KYC and Bank Loan Processing at Confirmation by Disbursement by Client Information RO BM HO Team CSO collects clients Entry of KYC and BM approves HO team UTR n
Slide 33: Successful Pilot of Cashless Disbursements and Scale-up
Successful Pilot of Cashless Disbursements and Further Scale-up of Cashless Collections Cashless Disbursements – Initial Targets for Q4FY17 Cashless Disbursements – Achievement against Target Phase 1 Phase 2 Phase 2 FY18 Pilot phase: Roll-out phase: Roll-out target achieved: Plan Ahead: Pilot phase
Slide 34: Key Investment Thesis
Key Investment Thesis
Slide 35: Key Investment Thesis
Key Investment Thesis 1 7 Access to both Experienced debt and equity management sources to support team portfolio growth Widespread presence with 6 Robust internal leadership position 2 audit and risk in underpenetrated management regions having high mechanisms growth potential Robust operational St
Slide 36: Access to both debt and equity sources to support portfolio growth
1 Access to both debt and equity sources to support portfolio growth (1) Equity Funds Raised On 21 Apr 2017, successfully raised Rs. 718 mn – Raised Rs. 643 mn from Asian Development Bank (ADB) through issue of equity shares via a preferential allotment – Raised Rs. 75 mn from Promoters, 25% of th
Slide 37: India's Third Largest MFI with Widespread Presence
2 Satin Creditcare - India’s Third Largest MFI, in terms of GLP, with Widespread Presence (1) With strong presence in North India, Satin is steadily building a pan India presence(1) Jammu & Kashmir (as on Mar'17) GLP (INR mn) 34.05 Himachal Pradesh (as on Mar'17) No. of branches 1 GLP (INR mn) 46.71
Slide 38: Established Presence in Underserved Geographies
2 Established Presence in Underserved Geographies Leading to Significant Growth Opportunities (1) Satin is present mostly in states of low MFI penetration It has significant presence in under-penetrated and high growing markets Key markets for Satin(1) YoY growth in MFI GLP – Mar’17 MFI penetrat
Slide 39: Reducing Concentration in Top Districts
2 Reducing Concentration in Top Districts Over the Years (1) Strategy to reduce concentration in top districts is working as envisioned JLG Portfolio in top districts as % of Gross AUM 27.9% 22.2% 19.9% 15.8% 15.4% 13.1% 10.3% 8.7% 6.9% 5.4% 4.7% 3.6% Mar'14 Mar'15 Mar'16 Mar'17 Top 5 Districts Top
Slide 40: Strengthening Presence through Acquisition of TSL
2 Strengthening Presence in Underserved Geographies through Acquisition of TSL TSL is serving clients in under penetrated geographies Presence in 8 states – Punjab and Uttar Pradesh have been added during FY17 Punjab (as on Mar17) GLP (INR mn) 82.16 Uttar Pradesh (as on Mar'17) No. of branches 4 GLP
Slide 41: Geographic Diversification – Increasing contribution from New States
2 Geographic Diversification – Increasing contribution from New States SCNL (1) – Geographic Spread SATIN - STANDALONE GLP FY16 (INR mn) GLP FY17 (INR mn) % Growth YoY % Mix FY16 % Mix FY17 Uttar Pradesh 13,385.28 12,159.21 -9.16% 41% 34% Bihar 5,802.59 6,872.63 18.44% 18% 19% Madhya Pradesh 5,076.5
Slide 42: Strong Client Relationships Built Through Transparent Operations
3 Strong Client Relationships Built Through Transparent Operations (1) Track record of over 25 years in microcredit space with comprehensive understanding of the industry and client segment – Rapidly growing operations despite cyclical changes in the economy as well as the MFI space in the past -
Slide 43: Strong and Diversified Lending Relationships
4 Strong and Diversified Lending Relationships (1) Diversified Lending Portfolio Funds raised (Rs. mn) Active relationship with 77 banks and financial institutions (Mar’17) Total Funds Raised Debt Funds Raised Spread across Public Sector Banks, Private Banks, Foreign Banks, 37,317.70 FY17 29,367
Slide 44: Positive ALM Benefit and Strong Liquidity Position
4 Positive ALM Benefit and Strong Liquidity Position (1) Benefit of positive ALM mismatch continues Strong liquidity position provides significant headroom for growth ALM (No. of Months)* Cash and Cash Equivalents (INR mn) 21.5 18.5 18.4 17.2 11,946.41 11,079.34 9.9 9.8 7,097.75 8.4 8.5 Mar'14 M
Slide 45: Robust Operational Performance Over the Years
5 Robust Operational Performance Over the Years (1) PARTICULARS CAGR % FY14 FY15 FY16 FY17 YoY% Gross AUM (Rs. mn) 50.73% 10,560.55 21,406.50 32,707.60 36,168.33 10.58% No. of districts 34.31% 97 121 215 235 9.30% No. of branches 45.90% 199 267 431 618 43.39% No. of States of operation 16.96% 10 11
Slide 46: Robust Operational Performance Over the Years (Contd.)
5 Robust Operational Performance Over the Years (1) (Contd.) PARTICULARS FY14 FY15 FY16 FY17 YoY% Product Financing AUM (Rs. mn) - - 112.61 1.22 -98.92% No. of Active Customers - - 190,044 7,495 -96.06% Disbursement during the period (Rs. mn) - - 140.30 22.59 -83.90% No. of loans disbursed during th
Slide 47: Financial Performance
5 Financial Performance (1) PARTICULARS (Rs. mn) FY14 FY15 FY16 FY17 YoY % Revenue 1,916.55 3,241.56 5,585.21 7,766.67 39.06% PBT 234.13 464.54 875.29 372.01 -57.50% PAT 155.58 317.16 579.41 244.99 -57.72% PAT (post Pref. Dividend) 154.82 308.25 573.52 244.99 -57.28% EPS – Basic 6.83 12.17 20.28 7.1
Slide 48: Robust Internal Audit and Risk Management Mechanisms
6 Robust Internal Audit and Risk Management Mechanisms Strong Internal Audit Processes and Systems ensure high Portfolio quality Team Structure Full fledged in-house Internal Audit department for Group Lending and MSME 6 member supervisory/support team at Head Office CMD and Audit Committee and a
Slide 49: Organizational Structure
7 Organizational Structure Board of Directors Chairman cum Managing Director Chief Financial Chief Operating Chief Information Head - Human Head - Internal Audit, Officer Officer Officer Business Head – SME Resources Process and Risk Deputy COO – North 1 (Punjab, Haryana, Rajasthan, Company Secretar
Slide 50: Annexure: Financial & Operational Details - Consolidated
Annexure Financial & Operational Details - Consolidated
Slide 51: Business Details – Consolidated
Business Details – Consolidated PARTICULARS Mar’17(A) Mar’16 YoY % Dec’16(A) QoQ % AUM (Rs. mn) 40,665.98 32,707.60 24.33% 37,361.37 8.85% On-Book AUM (Rs. mn) 31,991.81 22,747.24 40.64% 26,289.55 21.69% Securitization/ Assignment (Rs. mn) 4,176.52 9,960.36 -58.07% 7,147.08 -41.56% TSL - Business Co
Slide 52: Balance Sheet – Consolidated
Balance Sheet – Consolidated PARTICULARS (Rs. mn) Mar’17(A) Mar’16 YoY % Dec’16(A) QoQ % Equity(1) 6,375.93 3,240.06 96.78% 6,782.31 -5.99% Preference shares 250.00 - - 250.00 0.00% Net Worth 6,625.93 3,240.06 104.50% 7,032.31 -5.78% Minority Interest 22.80 - - 23.46 -2.82% Long Term Borrowings 20,2
Slide 53: P&L Statement – Consolidated (Quarterly)
P&L Statement – Consolidated (Quarterly) PARTICULARS (Rs. mn) 4Q FY17(A) 4Q FY16 YoY % 3Q FY17(A) QoQ % Total Revenue Interest income on Portfolio Loans 1,173.52 1.059.38 10.77% 1,628.61 -27.94% Income from securitization 88.00 329.15 -73.26% 167.06 -47.32% Processing Fee income 104.80 154.40 -32.12
Slide 54: P&L Statement – Consolidated (Annual)
P&L Statement – Consolidated (Annual) PARTICULARS (Rs. mn) FY17(A) FY16 YoY % Total Revenue Interest income on Portfolio Loans 5,430.27 3,804.69 42.73% Income from securitization 1,063.84 892.11 19.25% Processing Fee income 358.41 352.37 1.72% Interest on FD/ Mutual Fund 877.10 470.47 86.43% Income
Slide 55: Annexure: Financial & Operational Details - Standalone
Annexure Financial & Operational Details - Standalone
Slide 56: Operational Details – Standalone
Operational Details – Standalone PARTICULARS 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Gross AUM 36,168.33 32,707.60 10.58% 33,436.63 8.17% No. of districts 235 215 9.30% 225 4.44% No. of branches 618 431 43.39% 560 10.36% No. of States of operation 16 16 - 16 - No. of Employees 5,801 3,918 48.06% 5,702 1
Slide 57: Operational Details – Standalone (Contd.)
Operational Details – Standalone (Contd.) PARTICULARS 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Prod. Financing AUM (Rs. mn) 1.22 112.61 -98.92% 5.68 -78.50% No. of loan accounts 7,495 190,044 -96.06% 26,157 -71.35% Disbursement during the period (Rs. mn) - 108.96 -100.00% 0.53 -100.00% No. of loans disbu
Slide 58: Financial Performance – Standalone
Financial Performance – Standalone RoE Tree 4Q FY17 4Q FY16 3Q FY17 Gross Yield (1) 18.94% 23.83% 23.45% Financial Cost Ratio(2) 13.80% 12.13% 13.09% Net Interest Margin(3) 5.14% 11.70% 10.35% Operating Expense ratio(4) 7.78% 6.89% 6.98% Loan Loss Ratio(5) 4.61% 1.29% 0.49% RoA(6) -3.63% 2.16% 1.50%
Slide 59: Balance Sheet – Standalone
Balance Sheet – Standalone PARTICULARS (Rs. mn) Mar’17 Mar’16 YoY % Dec’16 QoQ % Equity(1) 6,372.19 3,240.06 96.67% 6,773.79 -5.93% Preference shares 250.00 - - 250.00 0.00% Net Worth 6,622.19 3,240.06 104.38% 7,023.79 -5.72% Long Term Borrowings 20,201.21 13,334.96 51.49% 19,046.97 6.06% Long Term
Slide 60: P&L Statement – Standalone (Quarterly)
P&L Statement – Standalone (Quarterly) PARTICULARS (Rs. mn) 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Total Revenue Interest income on Portfolio Loans 1,173.52 1,059.38 10.77% 1,628.61 -27.94% Income from securitization 88.088 329.15 -73.265 167.06 -47.32% Processing Fee income 104.80 154.40 -32.12% 28.99
Slide 61: P&L Statement – Standalone (Financial Year)
P&L Statement – Standalone (Financial Year) PARTICULARS (Rs. mn) FY17 FY16 YoY % Total Revenue Interest income on Portfolio Loans 5,430.27 3,804.69 42.73% Income from securitization 1,063.84 892.11 19.25% Processing Fee income 358.41 352.37 1.72% Interest on FD/ Mutual Fund 868.54 470.47 84.61% Othe
Slide 62: Annexure: Financial & Operational Details - TSL
Annexure Financial & Operational Details - TSL
Slide 63: Operational Details – TSL
Operational Details – TSL PARTICULARS 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Gross AUM (Rs. mn) 4,497.65 3,457.59 30.08% 3,924.74 14.60% No. of districts 87 61 42.62% 85 2.35% No. of branches 149 112 33.04% 150 -0.67% No. of Regional Offices (RO) 7 6 16.67% 7 0.00% No. of States of operation 8 6 33.33%
Slide 64: Balance Sheet – TSL
Balance Sheet – TSL PARTICULARS (Rs. mn) Mar’17 Mar’16 YoY % Dec’16 QoQ % Share Capital 90.83 90.83 - 90.83 - Reserves and Surplus 96.51 86.30 11.83% 101.95 -5.33% Net Worth 187.34 177.13 5.77% 192.78 -2.82% Long Term Borrowings 32.09 9.79 227.66% 39.37 -18.49% Long Term Provisions 9.61 6.30 52.34%
Slide 65: P&L Statement – TSL
P&L Statement – TSL PARTICULARS (Rs. mn) 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Total Revenue 104.03 81.99 26.88% 105.58 -1.47% Interest Expense -1.66 -0.54 -207.41% 6.02 -127.57% Personnel Expenses 66.83 56.73 17.80% 63.64 5.01% Credit cost (Provisions for NPAs, Write-offs, etc.) 15.41 6.70 130.00% 4.
Slide 66: Annexure: Top Shareholders
Annexure Top 10 Shareholders
Slide 67: Top Shareholders
Top 10 Shareholders Top 10 Shareholders – As of 21 Apr 2017 Top 10 Institutional Shareholders – As of 21 Apr 2017 Share Share Entity Entity holding % holding % MORGAN STANLEY MAURITIUS COMPANY PROMOTER 31.74 4.84 LIMITED MV MAURITIUS LIMITED 8.91 ASIAN DEVELOPMENT BANK 3.95 SBI FMO EMERGING ASIA FIN
Slide 68: Contact Information
Contact Information For any queries, please contact: Mansi Verma AVP – Capital Markets Satin Creditcare Network Limited E: mansi.verma@satincreditcare.com T: +91 11 4754 5000 (Ext – 243) 66
Slide 69: Thank You
Thank You
Satin Creditcare Network — Q4 FY17 Earnings Presentation on 6ix