Poonawalla Fincorp Limited · NSE:POONAWALLA
Poonawalla Fincorp — Q3 FY23 Earnings Presentation
44 slides from Poonawalla Fincorp's earnings presentation, Jan 23, 2023
Slide 1: Exchange cover letter: Investors/Analysts' Presentation
January 23, 2023 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: Poonawalla Fincorp Limited Investor Presentation Q3FY23
Poonawalla Fincorp Limited (Formerly known as Magma Fincorp Limited) Investor Presentation Q3FY23 Scalable Business Model | Pure Retail Play | Digital-First Tech-Led | Customer Centric
Slide 3: Agenda
Agenda 1 Overview & Executive Summary 2-5 2 Strategy Execution | Business & Financial Highlights: PFL Standalone 6-23 3 PHFL Transaction : Update & Rationale 24-25 4 Digital Transformation Journey So Far & Way Forward : PFL Standalone 26-31 5 Financial Highlights: PHFL 32-34 6 Financial Highlights:
Slide 4: Q3FY23 Performance – PFL Standalone
Q3FY23 Performance – PFL Standalone Excellent Quarter on All Fronts Differentiated strategy and execution excellence led to all round performance across business growth, credit quality & profitability Amounts in ₹ cr Highest ever quarterly disbursement AUM Disbursement 13,929 3,369 +28% YoY | +6% Qo
Slide 5: Executive Summary – PFL Standalone
Executive Summary – PFL Standalone Setting the momentum for expanding growth horizon Strong Business Momentum Continues in Q3FY23 ▪ Highest ever quarterly disbursement of ₹ 3,369 cr with new products scaling up well ▪ Consistent increase in disbursement: Up 157% YoY & 8% QoQ ▪ AUM at ₹ 13,929 cr wit
Slide 6: Executive Summary – PFL Standalone
Executive Summary – PFL Standalone Setting the momentum for expanding growth horizon Robust Asset Quality ▪ GNPA* & NNPA* reduced to 1.69% & 0.89% respectively compared to 1.77% & 0.94% in Q2FY23 and 4.05% & 1.97% in Q3FY22. ▪ Stage 3 PCR stood at 47.8% as on Q3FY23 Rise in Profitability ▪ NIM at 10
Slide 7: Agenda
Agenda 1 Overview & Executive Summary 2-5 2 Strategy Execution | Business & Financial Highlights: PFL Standalone 6-23 3 PHFL Transaction : Update & Rationale 24-25 4 Digital Transformation Journey So Far & Way Forward : PFL Standalone 26-31 5 Financial Highlights: PHFL 32-34 6 Financial Highlights:
Slide 8: Scalable Business Model to Drive Profitable Growth
Scalable Business Model to Drive Profitable Growth Uniquely positioned – PFL Standalone Inherent Strengths… Brand Strength & Strong Management Digital First and Technology Led Target Market Aligned Distribution & Products Flagship financing arm of Cyrus Poonawalla Digitalized end to end processes Un
Slide 9: Management Vision 2025 : PFL Standalone
Management Vision 2025 : PFL Standalone Performance well ahead of long-term guidance Vision 2025 On the right track (Q3FY23 status) To be amongst the Top 3 NBFCs in consumer and Product diversification to have large presence in MSMEs chosen segments. Leadership in select products achieved. Risk-cali
Slide 10: Long Term Guidance on Financial Metrics
Long Term Guidance on Financial Metrics PFL Standalone – Profitable Growth with Best in Class Asset Quality AUM Growth Profit Growth GNPA 35-40% 30-35% 1.3-1.8% NNPA Return on Assets 0.5-0.9% 4-4.5% 9
Slide 11: Successfully Executing our Strategic Plan
Successfully Executing our Strategic Plan PFL Standalone 1 Differentiating by Offering Superior Customer Value 2 Aligning Distribution & Products that Suit Target Market 3 Digital-First, Technology-Led to the Core 4 Upholding Robust Credit Quality 5 Continuously Optimizing Cost of Borrowing & Liquid
Slide 12: Differentiating by Offering Superior Customer Value
1 Differentiating by Offering Superior Customer Value To ensure sustainable growth & leadership in chosen segments - PFL Standalone Accelerating organic disbursement growth Focused AUM has grown 75% YoY ₹ cr 3.1x ₹ cr 3,369 1.75x 11,616 12,738 3,110 10,325 2,379 8,791 7,288 1,600 1,090 Q3FY22 Q4FY22
Slide 13: Distribution: In Sync with Emerging Business Models
2a Distribution: In Sync with Emerging Business Models Direct Digital Program (DDP) led distribution model - PFL Standalone Direct Channel Digital Channel Digital ecosystem In-house sourcing of In-house sourcing of Multiple tie-ups, alliances & DDP Distribution customers through own customers throug
Slide 14: Product Suite: Tailored for the Target Segment
2b Product Suite: Tailored for the Target Segment Focus on Consumer & MSME segment with diversified offerings - PFL Standalone Existing products Upcoming products Pre-owned Cars Digital Business Loans Machinery Loan Credit Card Merchant Cash Advance Digital Personal Loan Digital Consumption Loan EMI
Slide 15: Digital-First, Technology-Led to the Core
3a Digital-First, Technology-Led to the Core Leading to competitive moat, efficient operations & sustained growth - PFL Standalone Deep Investments in Technology Building a Tech led Play Customers Partners Self service online web application Extended API Infrastructure Core Contact center led digita
Slide 16: Digital Transformation Yielding Results
3b Digital Transformation Yielding Results PFL Standalone End to End Digitalized Lending – Lower TATs, Minimal Paperwork, Reduced human intervention ▪ End to end digital journey capability for customers across all products via Digital KYC, Digital Onboarding (E-sign, E-agreement & E-NACH), Automated
Slide 17: Upholding Robust Credit Quality
4 Upholding Robust Credit Quality PFL Standalone Consistent outperformance on Asset Quality GS3 / GNPA* (%) NS3 / NNPA* (%) 4.05 1.97 3.29 2.68 1.30 1.11 1.77 1.69 0.94 0.89 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Chosen market segment, Prudent underwriting & Collection
Slide 18: Optimizing Cost of Borrowing & Liquidity Position
5 Optimizing Cost of Borrowing & Liquidity Position PFL Standalone Average Cost of Borrowing (PFL) Two notch increase in credit rating to AA+/Stable by CARE Assigned AA+/Stable credit rating by CRISIL 9.10% Credit rating upgraded to AAA/Stable by CARE 8.00% 7.54% 7.50% 7.16% 6.97% Repo rate hike → Q
Slide 19: Future Ready Human Capital with Strong Leadership
6 Future Ready Human Capital with Strong Leadership Building the Right Culture – PFL Standalone Productivity & Operational Employee Development Efficiency Engagement Rewards • New HRMS system & • Employee satisfaction survey • OKR framework launched • Well defined development plan analytics launched
Slide 20: Performance Parameters
Performance Parameters Robust growth continues | Significant reduction in GNPA & NNPA –PFL Standalone Amounts in ₹ cr Disbursement AUM Net-worth Focussed Discontinued 6,212 3,110 3,369 13,929 2,901 13,161 6,018 12,606 2,539 11,765 1,545 1,192 5,878 10,914 2,281 2,974 5,715 5,616 3,626 1,310 12,738 1
Slide 21: ALM statement and Liquidity
ALM statement and Liquidity PFL Standalone Structural Liquidity Statement as on 31st Dec 22 Cumulative inflows (₹ in Cr) Cumulative outflows(₹ in Cr) 16948 18244 18244 15537 11625 10138 9755 7762 5300 5992 4738 3662 881 1068 379 536 1102 25 68 256 0-7 days 8-15 days 15-30 days 1-2 m 2-3 m 3-6 m 6-12
Slide 22: Asset Quality
Asset Quality Significant improvement on sustained basis – PFL Standalone Particulars Dec-21 Sep-22 Dec-22 Stage 1 & 2 Assets 95.95% 98.23% 98.31% Stage 1 & 2 PCR 3.85% 1.35% 1.26% Gross Stage 3 (₹ cr) / GNPA* 420 224 223 Net Stage 3 (₹ cr) / NNPA* 200 118 117 Gross Stage 3 / GNPA* 4.05% 1.77% 1.69%
Slide 23: Profit & Loss Statement – PFL Standalone
Profit & Loss Statement – PFL Standalone Particulars Q3FY23 Q3FY22 Q2FY23 YoY QoQ FY22 NII 360 270 336 33.2% 7.0% 1058 Opex 204 154 210 32.4% (2.8%) 595 PPOP 156 116 127 34.1% 23.3% 463 Credit Cost (45) 10 (47) - (5.2%) 78 Profit Before Tax 201 107 174 88.2% 15.6% 385 Profit After Tax 150 80 130 87.
Slide 24: Balance Sheet – PFL Standalone
Balance Sheet – PFL Standalone Particulars 31-Dec-22 31-Dec-21 30-Sep-22 31-Mar-22 Cash & Bank Balances 99 688 335 537 Receivables 23 17 22 14 Loans (Net of provision) 12,883 9,714 12,290 10,678 Investments 1,138 820 1,479 820 Other Financial Assets 470 139 317 144 Non-Financial Assets 513 635 534 6
Slide 25: Agenda
Agenda 1 Overview & Executive Summary 2-5 2 Strategy Execution | Business & Financial Highlights: PFL Standalone 6-23 3 PHFL Transaction : Update & Rationale 24-25 4 Digital Transformation Journey So Far & Way Forward : PFL Standalone 26-31 5 Financial Highlights: PHFL 32-34 6 Financial Highlights:
Slide 26: PHFL Transaction – Update & Rationale
PHFL Transaction – Update & Rationale Update Poonawalla Fincorp announced sale of its Housing Subsidiary In Q3FY23 , Poonawalla Fincorp board approved sale of its housing subsidiary Poonawalla Housing Finance Limited to TPG (Perseus SG Pte. Ltd., an entity affiliated with TPG Global, LLC) at a valua
Slide 27: Agenda
Agenda 1 Overview & Executive Summary 2-5 2 Strategy Execution | Business & Financial Highlights: PFL Standalone 6-23 3 PHFL Transaction : Update & Rationale 24-25 4 Digital Transformation Journey So Far & Way Forward : PFL Standalone 26-31 5 Financial Highlights: PHFL 32-34 6 Financial Highlights:
Slide 28: Digital Transformation Journey So Far & Way Forward
Digital Transformation Journey So Far & Way Forward It’s been 6 quarters since Magma acquisition; we have successfully completed Phase 1 of technology transformation and launched multiple new products as per our stated strategy. It has helped put in place a stable and scalable digital platform. With
Slide 29: Strong Roots of Digital, Technology & Analytics
Strong Roots of Digital, Technology & Analytics Successfully implemented in Phase 1 over the last 6 quarters Customer Relationship Rule Engine Loan Management Collection Management Core Platform Loan Origination Platform Management Platform Platform Platform Lead generation Onboarding Real time Anal
Slide 30: Phase 2: Deepening Technology, Digital & Analytics
Phase 2: Deepening Technology, Digital & Analytics Innovative, Personalized, Engaging & Convenient - For superior customer experience Highly customised orchestration layer integrating across channels to create unique experience Consumer Data Apps Eco-System Personalization Engagement Products Consen
Slide 31: Phase 2: Journey Started..
Phase 2 :Journey Started.. On track to deliver it over next 3 Quarters (20% work completed in Q3FY23) Straight Through Customer Mobile Super App Based Lending Digital Collections Customer Portal Enhanced Disbursal Platform App & Referrals Platform Digital Partner On-boarding & Self Automated & Fully
Slide 32: Phase 2: Enhanced Customer Service - 360 View
Phase 2: Enhanced Customer Service - 3600 View* Self Service, Personalized, Insight Driven – “Making Service delivery a Sales Channel” Self Service & FTR Resolutions Promote & Manage Cross Sell • Segmented campaign management in CRM • Agent assist & Customer 360 • Loan details • STP fulfilment journ
Slide 33: Agenda
Agenda 1 Overview & Executive Summary 2-5 2 Strategy Execution | Business & Financial Highlights: PFL Standalone 6-23 3 PHFL Transaction : Update & Rationale 24-25 4 Digital Transformation Journey So Far & Way Forward : PFL Standalone 26-31 5 Financial Highlights: PHFL 32-34 6 Financial Highlights:
Slide 34: Profit & Loss Statement - PHFL
Profit & Loss Statement - PHFL Particulars Q3FY23 Q3FY22 Q2FY23 FY22 NII 125 63 109 263 Opex 64 42 59 147 PPOP 61 20 50 116 Credit Cost 15 (8) 7 14 Profit Before Tax 46 28 43 101 Profit After Tax 34 21 33 77 Amounts in ₹ cr 33
Slide 35: Balance Sheet - PHFL
Balance Sheet - PHFL Particulars 31-Dec-22 31-Dec-21 30-Sep-22 31-Mar-22 Cash 409 61 173 62 Loans 4,993 3,606 4,727 4,177 Other Financial Assets 155 104 133 86 Non-Financial Assets 68 43 63 62 Total Assets 5,625 3,814 5,095 4,387 Borrowing 4,274 2,673 3,838 3,198 Other Liability 162 92 106 107 Share
Slide 36: Agenda
Agenda 1 Overview & Executive Summary 2-5 2 Strategy Execution | Business & Financial Highlights: PFL Standalone 6-23 3 PHFL Transaction : Update & Rationale 24-25 4 Digital Transformation Journey So Far & Way Forward : PFL Standalone 26-31 5 Financial Highlights: PHFL 32-34 6 Financial Highlights:
Slide 37: Profit & Loss Statement - Consolidated
Profit & Loss Statement - Consolidated Particulars Q3FY23 Q3FY22 Q2FY23 YoY QoQ FY22 NII 482 334 446 44.2% 8.1% 1325 Opex 268 196 269 36.7% (0.1%) 742 PPOP 214 138 177 55.0% 20.7% 583 Credit Cost (30) 2 (41) - - 93 Profit Before Tax 244 130 218 86.8% 11.9% 492 Profit After Tax 182 96 163 89.1% 11.8%
Slide 38: Balance Sheet - Consolidated
Balance Sheet - Consolidated Particulars 31-Dec-22 31-Dec-21 30-Sep-22 31-Mar-22 Cash & Bank Balances 507 747 506 597 Receivables 23 17 24 15 Loans (Net of provision) 17,862 13,312 17,012 14,851 Investments 329 0 659 0 Other Financial Assets 606 241 442 235 Non-Financial Assets 632 757 649 746 Total
Slide 39: Agenda
Agenda 1 Overview & Executive Summary 2-5 2 Strategy Execution | Business & Financial Highlights: PFL Standalone 6-23 3 PHFL Transaction : Update & Rationale 24-25 4 Digital Transformation Journey So Far & Way Forward : PFL Standalone 26-31 5 Financial Highlights: PHFL 32-34 6 Financial Highlights:
Slide 40: Board of Directors - Poonawalla Fincorp
Board of Directors - Poonawalla Fincorp Experienced & Diversified Board Mr. Adar Poonawalla Mr. Abhay Bhutada Mr. Amar Deshpande Mr. Sajid Fazalbhoy Mr. Atul Kumar Gupta Chairman & Managing Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Ms. Vijay
Slide 41: Awards and Accolades
Awards and Accolades Recognition from Industry circles HR Practices Customer Centricity Digital NBFC One of the most ‘Best Digital NBFC of Recognized as the Customer centric the Year’ award at the most preferred Brands at Economic 4th Annual India NBFC workplace 2022-23 Times CX Summit Summit 2022 2
Slide 42: Disclaimer
Disclaimer This presentation has been prepared by Poonawalla Fincorp Limited (the “Company”), for general information purposes only, without regard to any specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation or form part
Slide 43: Disclaimer (Continued)
Disclaimer (Continued) The information contained in these materials has not been independently verified. Neither the Company, its directors, promoter affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability what
Slide 44: Thank You
THANK YOU Team – Investor Relations Investor.relations@poonawallafincorp.comClassification | INTERNAL