Indostar Capital Finance Limited · NSE:INDOSTAR

Indostar Capital Finance — Q2 FY2021 Earnings Presentation

46 slides from Indostar Capital Finance's earnings presentation, Nov 5, 2020

  1. Slide 1: Regulation 30 disclosure cover letter to exchanges

    INDOSTAR ICFL/LS/0150/2020-21 5 November 2020 BSE Limited National Stock Exchange of India Limited Listing Department, 1* Floor, Exchange Plaza, C-1, Block G, P J Towers, Dalal Street, Fort, Bandra Kurla Complex, Mumbai - 400 001 | Bandra (E), Mumbai — 400 051 Scrip Code: 541336 Symbol: INDOSTAR Obl

  2. Slide 2: IndoStar Capital Finance Limited Q2FY21 Results Update

    INDOSTAR CAPITAL FINANCE LIMITED Q2FY21 Results Update 05 November 2020

  3. Slide 3: Disclaimer

    Disclaimer This presentation and the accompanying slides (the “Presentation”) have been prepared by IndoStar Capital Finance Limited (“IndoStar” or the “Company”) solely for information purposes and do not constitute an offer to sell or, recommendation or solicitation of an offer to subscribe for or

  4. Slide 4: Discussion Summary

    Discussion Summary  Strategy  Quarterly Results  Business Update  Shareholding Structure

  5. Slide 5: Our Strategy

    Our Strategy • To be a 100% retail company • To build a high quality, highly profitable platform with good governance to deliver excellent value to all stakeholders • To focus on collections during Lockdown/Moratorium and thereafter to enhance Asset quality • To open smart branches and work on digit

  6. Slide 6: Value Proposition – Growth, Balanced Risk-Reward

    Value Proposition – Growth, Balanced Risk-Reward Growing Well positioned economy, Focus on 100% to grab growth Gaining market retail business opportunities share Nationwide Strong focus on urban & rural leveraging Strong branch network Digital, Analytics Parentage & AI platforms 4

  7. Slide 7: Digital transformation journey

    Digital transformation journey… 1 2 Digitize the lending process from lead On-board fintech and technology partners to generation to disbursement implement the digital journeys 3 4 Define the risk scorecards and business rule Define the risk analytics framework with engines to digitize credit proces

  8. Slide 8: Digitized processes make way for seamless journey

    Digitized processes make way for seamless journey Digitized journeys Scorecards and with paperless and Leverage fintech rule engines workflow based ecosystem for embedded in the transparent integrations to system to processes along ensure reduced ensure with usage of documentation, automated analyti

  9. Slide 9: Discussion Summary

    Discussion Summary  Strategy  Quarterly Results  Business Update  Shareholding Structure

  10. Slide 10: Q2 focus

    Q2 focus Q2 was all about gradual unlocking of the economy At IndoStar, we: • Adopted cautious approach to opening of business • Focussed on collections – March onwards collections have increased gradually reaching nearly 100% in October • Started disbursements: Expect to see momentum from November

  11. Slide 11: Summary of Q2

    Summary of Q2 Health & Safety • India’s COVID situation improving; but need for continued alertness • Health and safety top priorities for the Company • Work from home continues to the extent possible • Safe and efficient digital channels – Net Banking, Mobile Banking Economic Situation • After a sh

  12. Slide 12: Q2FY21 performance: Key Highlights

    Q2FY21 performance : Key Highlights  Strong retail franchise ~ 73% of AUM (66% in Sep-19) Execution of Retailisation Theme  ICICI partnership AUM ~ ₹ 6,847 mn  Comfortable liquidity; ~36% of Borrowings Strong Capitalisation & Liquidity  CRAR 35 %  Debt : Equity ratio of 1.8x  Net Revenue from

  13. Slide 13: Q2 & H1FY21: Consolidated Profit & Loss Statement

    Q2 & H1FY21: Consolidated Profit & Loss Statement Particulars (₹ mn) Q2FY21 Q1FY21 QoQ % Q2FY20 YoY % H1FY21 H1FY20 YoY % Revenue from Operations 3,392 3,334 2% 4,428 -23% 6,726 8,839 -24% Interest Expenses (1,854) (1,838) 1% (2,231) -17% (3,692) (4,705) -22% Net Revenue from Operations 1,538 1,496

  14. Slide 14: Consolidated Balance Sheet

    Consolidated Balance Sheet Particulars (₹ mn) Sep-20 Jun-20 QoQ % Sep-19 YoY % Equity 39,694 39,512 0% 31,022 28% Borrowings $ 71,427 73,652 -3% 83,282 -14% Other Liabilities (Net) - - - 425 n.a. Total Liabilities 111,121 113,163 -2% 114,729 -3% Loan Assets$ 77,826 84,285 -8% 97,732 -20% Treasury As

  15. Slide 15: Q2FY21: Business Segment Performance

    Q2FY21: Business Segment Performance Corporate SME Housing ^ Particulars (₹ mn) CV Finance Consolidated ^ Lending Finance Finance Revenue from Operations 991 1,458 419 285 3,392 Interest Expenses (488) (642) (232) (132) (1,854) Net Interest Income 503 817 188 153 1,538 People Costs 15 182 42 51 405

  16. Slide 16: H1FY21: Business Segment Performance

    H1FY21: Business Segment Performance Corporate SME Housing ^ Particulars (₹ Mn) CV Finance Consolidated ^ Lending Finance Finance Revenue from Operations 1,991 2,970 855 546 6,726 Interest Expenses (1,017) (1,349) (476) (268) (3,692) Net Interest Income 974 1,621 379 278 3,034 People Costs 38 369 81

  17. Slide 17: Diversified Funding Profile

    Diversified Funding Profile Funding Mix - Jun 2020 Funding Mix - Sep 2020 NCD 20% NCD 23% Equity 35% Equity 36% Others 0% Banks 31% Others 0% Banks 28% CP 1% CP 1% Securitisation 13% Securitisation 12% Incremental Funding mobilized Strong Credit Ratings Particulars (₹ mn) Q2 FY20 Q3 FY20 Q4 FY20 Q1

  18. Slide 18: Strong Liquidity Position

    Strong Liquidity Position Particulars (₹ mn) Oct-20 Nov-20 Dec-20 Q4 FY21 Q1 FY22 Q2 FY22 Opening Cash & Equivalents* 25,821 26,216 26,014 24,828 19,172 13,479 Loan repayment inflows [Principal] 1,007 1,008 1,013 2,845 2,558 2,582 Total Inflow 26,828 27,224 27,028 27,673 21,730 16,060 Liability Repa

  19. Slide 19: Post integration branch rationalisation on course

    Post integration branch rationalisation on course 215 branches across 18 states * Some branches have multiple operating segments 10 2 322 322 9 233 233 212 215 2 4 305 305 9 222 222 207 207 19 55 55 49 17 10 10 10 48 10 10 44 10 48 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 SME Finance Housing Financ

  20. Slide 20: Quarterly Performance Trend (1/2)

    Q1FY21: Quarterly Performance Trend (1/2) AUM (₹ mn) Loan Disbursements (₹ mn) On-book Loans Off-book Loans Corporate Lending Retail Finance Total 8,759 1,07,181 1,02,219 96,899 98,098 7,324 9,450 90,842 6,612 11,981 13,968 13,813 13,016 5,904 3,742 97,732 6,340 90,238 82,930 84,285 77,826 2,152 2,8

  21. Slide 21: Quarterly Performance Trend (2/2)

    Q1FY21: Quarterly Performance Trend (2/2) NPA* PAT (₹ mn) GNPA NNPA 4.8% 4.7% 494 472 4.5% 3.8% 316 2.9% 3.6% 3.8% 3.8% 2 3.0% 2.1% Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 -4,214 * GNPA & NNPA (restated) represents Stage 3 Assets Net worth (₹ mn) Return Ratios^ & Capita

  22. Slide 22: Asset Quality

    Asset Quality Gross NPA (₹ mn) Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Corporate Lending 1,546 1,546 1,546 1,546 1,546 CV Finance 1,792 2,334 2,336 2,445 578 SME Finance 437 267 237 153 180 Housing Finance 26 51 63 64 69 Total 3,801 4,199 4,182 4,207 2,372 Net NPA (₹ mn) Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY2

  23. Slide 23: Discussion Summary

    Discussion Summary  Strategy  Quarterly Results  Business Update  Shareholding Structure

  24. Slide 24: Collections update

    Collections update Retail Total Month Billing Collections % (₹ mn) (₹ mn) Jan-20 2,267 2,349.5 103.66% Feb-20 2,122 2,208.9 104.08% Mar-20 2,232 1,461.7 65.48% Apr-20 2,130 153.6 7.21% May-20 2,134 389.4 18.25% Jun-20 2,219 1,022.8 46.09% Jul-20 2,234 1,450.2 64.91% Aug-20 2,211 1,564.5 70.76% Sep-2

  25. Slide 25: Restructuring Snapshot

    Restructuring Snapshot As on 31st No. of AUM under % of no. of Total no of Total AUM % of Total October restructured Restructure restructure Accounts AUM (YTD) accounts accounts (₹ mn) (₹ mn) VF 77,554 532 37,950 470 1.23% 0.70% SME 2,395 25 17,720 420 2.37% 1.00% AHF 12,767 0 8,750 0 0% 0% Total Re

  26. Slide 26: Corporate Lending (1/3)

    Corporate Lending (1/3) Corporate Lending AUM (₹ mn) AUM Breakup: RE vs. Non-RE 36,267 31,646 28,687 29,287 19% 18% 16% 19% 27% 24,760 81% 82% 84% 81% 73% Q2FY20 Q3FY20 Q4FY20 Q1 FY21 Q2 FY21 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Real Estate Non Real Estate  Continued focus on reduction in exposure 

  27. Slide 27: Corporate Lending: Profit and Loss (2/3)

    Corporate Lending: Profit and Loss (2/3) Particulars (₹ mn) Q2 FY 20 Q3 FY 20 Q4 FY 20 Q1 FY 21 Q2 FY 21 Revenue from Operations 1,494 1,288 1,077 1,000 991 Interest Expenses (789) (648) (610) (529) (488) Net Interest Income 704 640 467 471 503 People Costs 42 40 27 23 15 Operating Expenses 2 9 8 4

  28. Slide 28: Corporate Lending: Key ratios (3/3)

    Corporate Lending : Key ratios (3/3) Q2 FY 20 Q3 FY 20 Q4 FY 20 Q1 FY 21 Q2 FY 21 Revenue from Operations* 14.9% 14.7% 14.3% 13.6% 13.7% Net Interest Income* 7.0% 7.3% 6.2% 6.4% 7.0% Operating Expenses* 0.4% 0.6% 0.5% 0.4% 1.0% Cost / Income 6.1% 7.7% 7.7% 5.8% 14.7% Pre-provision Operating Profit 6

  29. Slide 29: Retailisation Strategy On track

    Retailisation Strategy On track AUM: CL vs Retail (%) Disbursements: CL vs Retail (%) 1,07,181 1,02,219 96,899 98,098 90,842 6,612 8,759 7,324 868 2,152 57% 66% 69% 71% 71% 67% 73% 87% 89% 95% 43% 34% 31% 29% 29% 33% 27% 13% 11% 5% Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q2 FY20 Q3 FY20 Q4 FY20 Q1 F

  30. Slide 30: Retail Business Volume impacted by Covid-19

    Retail Business Volume impacted by Covid-19 Retail AUM (₹ mn) Retail Disbursements (₹ mn) 70,914 70,574 70,989 71,595 68,617 7,080 7,699 8,310 8,305 8,538 6,340 5,904 18,637 17,968 17,482 17,530 17,495 3,742 4,293 4,833 2,157 2,045 45,197 44,907 45,197 45,760 42,584 856 866 777 921 827 760 664 745 6

  31. Slide 31: CV Finance (1/3)

    CV Finance (1/3) CV Finance – Monthly Disbursement Trend (₹ mn) 2191 1,777 1724 1,427 1,089 918 679 574 280 7 23 2 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20  CV Finance AUM ₹ 42,584 mn  AUM of ICICI Bank tie-up ₹ 6,847 mn 29

  32. Slide 32: CV Finance: Profit and Loss (2/3)

    CV Finance : Profit and Loss (2/3) Particulars (₹ mn) Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Revenue from Operations 1,870 1,743 1,455 1,511 1,458 Interest Expenses (832) (771) (759) (707) (642) Net Interest Income 1,038 971 697 804 817 People Costs 225 206 193 187 182 Operating Expenses 144 119 15

  33. Slide 33: CV Finance: Key ratios (3/3)

    CV Finance : Key ratios (3/3) Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Branches & Employees Revenue from Operations* 16.7% 16.9% 15.2% 16.0% 15.7% Net Interest Income* 9.3% 9.4% 7.3% 8.5% 8.8% 350 1,934 1,734 1,635 1643 2,000 Operating Expenses* 3.3% 3.1% 3.6% 3.0% 3.6% 300 1606 1532 250 1,500 Cost /

  34. Slide 34: SME Finance (1/3)

    SME Finance (1/3) SME Finance – Monthly Disbursement Trend (₹ mn) 351 297 242 242 261 200 126 103 32 4 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20  SME Finance AUM : ₹ 17,495 mn  Assigned/Securitized Portfolio : ₹ 4,003 mn 32

  35. Slide 35: SME Finance: Profit and Loss (2/3)

    SME Finance: Profit and Loss (2/3) Particulars (₹ mn) Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Revenue from Operations 679 441 428 436 419 Interest Expenses (314) (260) (266) (245) (232) Net Interest Income 365 181 162 191 188 People Costs 47 45 44 39 42 Operating Expenses 32 33 31 17 16 Pre-provisio

  36. Slide 36: SME Finance: Key ratios (3/3)

    SME Finance : Key ratios (3/3) Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Branches & Employees Revenue from Operations* 17.1% 12.9% 13.0% 12.8% 12.6% Net Interest Income* 9.2% 5.3% 4.9% 5.6% 5.6% 98 93 89 87 89 89 Operating Expenses* 2.0% 2.3% 2.3% 1.6% 1.8% Cost / Income 21.5% 43.1% 46.1% 29.3% 31.3%

  37. Slide 37: Housing Finance (1/3)

    Housing Finance (1/3) Housing Finance – Monthly Disbursement Trend (₹ mn) 377 362 311 295 288 267 193 206 156 64 0 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Housing Finance AUM : ₹ 8,538 mn Assigned/Securitized Portfolio : ₹ 813 mn 35

  38. Slide 38: Housing Finance: Profit and Loss (2/3)

    Housing Finance: Profit and Loss (2/3) Particulars (₹ mn) Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Revenue from Operations 259 245 261 261 285 Interest Expenses (124) (121) (141) (136) (132) Net Interest Income 134 124 119 125 153 People Costs 60 58 63 53 51 Operating Expenses 25 31 36 21 27 Pre-prov

  39. Slide 39: Housing Finance: Key ratios (3/3)

    Housing Finance : Key ratios (3/3) Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Branches & Employees Revenue from Operations* 16.5% 15.3% 14.6% 13.9% 14.7% Net Interest Income* 8.6% 7.8% 6.7% 6.7% 7.9% 324 329 319 319 294 Operating Expenses* 5.4% 5.5% 5.6% 4.0% 4.0% 271 Cost / Income 63.4% 71.1% 83.0% 59

  40. Slide 40: Significant Growth Capital: A real edge in current environment

    Significant Growth Capital : A real edge in current environment IndoStar now has all the essential ingredients to rapidly grow its loan book in the future • Capital : We now have substantial growth capital, which we will utilize to pursue calibrated growth • Infrastructure : Our current infrastructu

  41. Slide 41: Entrepreneurial Leadership Team with Strong Sponsor Backing

    Entrepreneurial Leadership Team with Strong Sponsor Backing  Several years of experience and in-depth understanding of the specific industry and geographic regions  Separate business & credit heads for each vertical  Strong alignment through large ESOP program  20+ years of  30+ years of experi

  42. Slide 42: Entrepreneurial Leadership Team with Strong Sponsor Backing

    Entrepreneurial Leadership Team with Strong Sponsor Backing  20 years of  More than 20  20+ years of experience in  Several years of  Several years of years of IT experience in Investor experience in experience with experience with financial Relations, SME, financial financial institutions Stra

  43. Slide 43: Strong & Distinguished Board

    Strong & Distinguished Board  14 committees composed of independent and non-independent directors and also employees1  Distinct and delineated responsibilities to ensure good corporate governance  Strong capital sponsorship also providing access to best industry practices and international corpor

  44. Slide 44: Discussion Summary

    Discussion Summary  Strategy  Quarterly Results  Business Update  Shareholding Structure

  45. Slide 45: Shareholding Pattern

    Shareholding Pattern Shareholding# @ 30 September 2020 Brookfield 52.3% 6.3% Indostar Capital Mauritius 41.4%^ # Excluding CCPS ^ includes ECP II & ECP III ESOP is 3.73% of diluted shares capital (excluding CCPS) Source – NSE, Company data 43

  46. Slide 46: For Further Queries

    For Further Queries Salil Bawa Head Investor Relations Contact No: +91 9987644008 Email – sbawa@indostarcapital.com Email - investor.relations@indostarcapital.com Media Contact Snigdha Nair Adfactors PR Email - snigdha.nair@adfactorspr.com; indostar@adfactorspr.com

IndoStar Capital Finance — Q2 FY2021 Earnings Presentation on 6ix