Ugro Capital Limited · NSE:UGROCAP
Ugro Capital — Q3 FY2024 Earnings Presentation
31 slides from Ugro Capital's earnings presentation, Jan 23, 2024
Slide 1: UGRO Capital Limited Q3'FY24
UGRO Capital Limited Q3’FY24 EMPOWERING MSME ECOSYSTEM NSE: UGROCAP | BSE: 511742 Slide 1
Slide 2: Safe Harbor
Safe Harbor This presentation has been prepared by UGRO Capital Limited (the “Company”) solely for your information. By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation is for information purposes only and should not be deemed to constitute or
Slide 3: Rebound visible post-Covid for MSMEs
Rebound visible post-Covid for MSMEs Journey towards formal credit fold is accelerating Sign of business rebound visible in post pandemic time frame New credit disbursals picking up post Covid During pandemic period 1st year Post pandemic 2nd year Post pandemic 77% customers showing 68% customers sh
Slide 4: Performance Highlights for Q3'FY24 and 9M'FY24
Performance Highlights for Q3’FY24 and 9M’FY24 Q3FY23 Q3FY24 9M’FY23 9M’FY24 AUM (INR Cr) 5,095 8,364 64% 5,095 8,364 64% Annualized EPS on current rate Net Disbursement (INR Cr)* 1,166 1,552 33% 3,183 4,311 35% INR 14.24 per share for 9M’FY24 Off-book AUM 35% 45% 29% 35% 45% 29% Pre-Tax Profit (INR
Slide 5: Key metrics for 9M'FY24
Key metrics for 9M’FY24 01 Asset 02 03 Asset 04 Liability & Profitability Growth Quality Co - lending AUM Net Total Income GNPA Borrowings As on Dec’23 : 8,364 Cr 9M’FY24 : 436.5 Cr As on Dec’23 : 2.0% As on Dec’23 : 4,173 Cr (+64% Y-o-Y) (+66% Y-o-Y) (+30 bps Y-o-Y) Co-lending Net Loans Originated
Slide 6: We continue to deliver strong Net Loan Origination
We continue to deliver strong Net Loan Origination Amount in INR Cr Net loans originated increased to INR 1,552 Cr in Q3’FY24 from INR 1,476 Cr in Q2’FY24 ( +5%) and INR 1,164 Cr in Q3’FY23 (+33%). 1,054 963 1,359 1,653 1,874 2,314 2,036 2,506 2,810 33% 5% Gross Loans Originated 1,552 1,459 1,476 26
Slide 7: And strong AUM
And strong AUM Amount in INR Cr AUM increased to INR 8,364 Cr as on Dec’23 from INR 7,592 Cr as on Sep’23 (+10%) and INR 5,095 Cr as on Dec’22 ( +64%). 64% 10% 8,364 7,592 967 12% 6,777 849 1,037 12% 6,081 750 893 722 9% 715 798 5,095 670 721 8% 701 585 636 4,375 746 14% 567 548 3,656 718 564 11% 47
Slide 8: Which is delivering operating leverage
Which is delivering operating leverage Amount in INR Cr Consistently increasing PBT over past 8 quarters 109% 46 41 36 34 22 18 10 8 5 Q3'FY22 Q4'FY22 Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23 Q1'FY24 Q2'FY24 Q3'FY24 Slide 8
Slide 9: Our collection efficiencies and portfolio performance remains stable
Our collection efficiencies and portfolio performance remains stable Current Month and Overall Collection Efficiency remains robust ECL Data (Dec’23) Current Month Collection (excluding overdue) / Current Month Demand (In Cr) Loan Exposure Loan Exposure (%) Total Collections* (including overdue) / C
Slide 10: Our collection efficiencies and portfolio performance remains stable
Our collection efficiencies and portfolio performance remains stable Stage 1 has remained stable over last 5 quarters Provision Coverage Ratio 96% 96% 95% 95% 94% 49% 48% 49% 49% 38% Dec'22 Mar'23 June'23 Sep'23 Dec'23 Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 Restructured Loans (standard portfolio) 1.5% 1
Slide 11: Tri-pronged liability strategy – on-balance sheet, co-lending and assignment continues to mature
Tri-pronged liability strategy – on-balance sheet, co-lending and assignment continues to mature Demonstrated ability to manage a prudent mix of on-balance sheet and off-balance sheet approach 1 On-Balance sheet Diversified Lender base across Lending Institutions – Banks, Large NBFCs and DFIs. Multi
Slide 12: Robust momentum of our co-lending platform continues
Robust momentum of our co-lending platform continues Increasing Mix of off - Book AUM Product wise Mix of off - Book AUM (Sep’23) 2,252 2,664 721 722 1,037 967 On Book Portfolio Off Book Portfolio 7% 3% 51% 48% 41% 21% 29% 35% 40% 43% 45% 45% 66% 93% 97% 49% 52% 59% 34% Prime Prime Micro Supply Chain
Slide 13: Diversified Lender base and continued build-out of liability book
Diversified Lender base and continued build-out of liability book Total Debt (INR Cr) and Cost of borrowings Liability mix by lender profile Liability mix by product 10.53% 10.58% 10.66% 10.61% 10.65% 19% 2% 0% Cost of Borrowings 4,173 4% 3,798 3,149 3,342 24% 2,885 43% Total Debt INR 10% Total Debt
Slide 14: Finance | Income Statement
Finance | Income Statement Income Statement (₹ Cr) Q3FY23 Q3FY24 Y-o-Y Q2FY24 Q-o-Q Interest Income 133.1 182.8 37% 171.9 6% Income on Co-Lending / Direct Assignment 42.9 76.4 78% 64.8 18% Other Income 13.6 20.1 48% 17.0 18% Total Income 189.6 279.3 47% 253.6 10% Interest Expenses 81.6 116.7 43% 105
Slide 15: Finance | Income Statement & ROA Tree
Finance | Income Statement & ROA Tree Income Statement (₹ Cr) 9MY23 9MFY24 Y-o-Y FY23 ROA Tree 9MY23 9MFY24 Interest Income 341.8 516.2 51% 482.9 As a % of Gross On Book AUM Income on Co-Lending / Direct Assignment 91.7 185.1 102% 154.1 Total Income 20.8% 22.4% Other Income 33.1 50.0 51% 46.8 Intere
Slide 16: Operating & Financial Metrics
Operating & Financial Metrics Total Income (INR Cr) & Portfolio Yield$ Finance Cost (INR Cr) & Cost of Borrowing Operating Exp. (INR Cr) and Cost to Income 17.4% 17.3% 17.3% 17.4% 17.5% 10.7% 10.7% 63.9% 10.5% 10.6% 10.6% 55.9% 55.0% 55.9% 53.2% 16.1% 16.3% 16.2% 16.3% 87 16.0% 117 83 105 69 74 69 2
Slide 17: UGRO Overview
GRO UGRO Overview Slide 17
Slide 18: Building a large institution for small business financing is a real possibility
Building a large institution for small business financing is a real possibility Explosion of Credit in MSME Segment: INR 92 Trn MSME Credit Gap Presents a large Market Opportunity Total MSME Credit gap is Rs 92 trn Credit Gap of our customer segment constitutes 95% FY17 FY23 Medium Enterprise No. of
Slide 19: UGRO's journey of Data-Tech driven lending to MSMEs over 5+ yrs
UGRO’s journey of Data-Tech driven lending to MSMEs over 5+ yrs Build phase Early Validations Maturing phase Growth Phase Data Repository-Dec 2023 Infrastructure build at inception During Covid, pivoted At Dec 2022, 87% of long term portfolio Become an industry to cash flow based underwriting models
Slide 20: Our Distribution continues to be powered by our GRO Score
Our Distribution continues to be powered by our GRO Score Ability to capture alternate data from banking and bureau… …to draw meaningful insights out of unorganized data... Artificial Intelligence GRO 2.0 GRO 3.0 Engineering of making Intelligent Credit Bureau Machines and Programs Credit Across Mul
Slide 21: GRO Score – Risk Bands Stacking up on Historical Portfolio
GRO Score – Risk Bands Stacking up on Historical Portfolio Default rates across score bands – All customers assessed Since Inception Score Band wise break up of recent disbursals (Jul 23 – Dec 23) 4.2% 3.7% A 3.2% 9% 2% 6% B 2.2% 1.5% GRO Score A&B C 1.1% 1.1% 22% ~84% 0.9% 61% D A B C D,E E Disburs
Slide 22: Sector Focused Approach, Multiple Products and Large Distribution Strength
Sector Focused Approach, Multiple Products and Large Distribution Strength Hospitality Supply Chain 23 Financing Prime Branches Light Engineering Business Loans Secured by Property 81 Auto Components Unsecured Micro Branches Business Chemicals Loans 500+ GRO Partners Our Product Food Processing Offe
Slide 23: Of our addressable market, we serve a diverse set of customers
Of our addressable market, we serve a diverse set of customers Prime: Metro & Ecosystem (SCF & Micro: Tier 3-6 Partnership & Tier 1/2 Direct Digital Machinery) Branches Alliances Branches Collateral: Prime Collateral: Collateral: Prime Prime Collateral: Collateral: Standard Standard Collateral: FLDG
Slide 24: Through our multi-pronged distribution channels
Through our multi-pronged distribution channels Prime Loan Branches Micro Loan Branches Branch-Led Channel – Catering through 100+ branches Product Avg. Yield Tenor Avg. Yield Tenor • Prime Loan Branches : 23 branches with origination through intermediated Ticket % Ticket % channel Secured 69L 13.8%
Slide 25: Resulting in a well diversified, granular and stable portfolio quality
Resulting in a well diversified, granular and stable portfolio quality Product Mix (AUM) Portfolio Concentration in key geographical areas Sector Mix* State wise AUM 12% coverage * 7% 27% 21% 18% 4% 12% 1% 8% 7% 9% 5% 9% 8% 21% 9% 23% 9% 11% 23% Guaranteed by CGTMSE 8% 6% 3% Prime - Secured Loans Pr
Slide 26: Board, Management and Shareholding
Board, Management and Shareholding Slide 26
Slide 27: Independently Supervised : Eminent Board of Directors
Independently Supervised : Eminent Board of Directors Satyananda Mishra – S. Karuppasamy - Karnam Sekar – Hemant Bhargava – Rajeev K. Agarwal - Non-Executive Chairman Independent Director Independent Director Independent Director Independent Director Ex-Chairman, MCX, Ex-CIC, GOI, Ex-Executive Direc
Slide 28: Professionally Managed : 190+ years of cumulative experience
Professionally Managed : 190+ years of cumulative experience Shachindra Nath - Amit Mande - Anuj Pandey - Kishore Lodha - Sunil Lotke – Vice Chairman & Managing Chief Revenue Officer Chief Risk Officer Chief Financial Officer Chief Legal & Compliance Director 20+ Years of Experience 20+ Years of Exp
Slide 29: Institutionally Owned : Majority held by Institutional Investors
Institutionally Owned : Majority held by Institutional Investors Shareholding Pattern IFU: Investment arm of 16.5% Denmark govt. Other Public shareholders, 27.7% 24k+ shareholders 16.3% Insurance Companies, 3.3% Foreign Portfolio Investors, 2.2% Corporate (Family Offices, HNIs), 7.8% Promoter, 2.2%
Slide 30: Business Metrices in line with long term goal
Business Metrices in line with long term goal Credit Cost has been stable 1.4% 1.4% 1.5% 25 30 17 Off Book Aum Mix increasing YoY Cost To Income Ratio decreasing Y-o-Y Q3'FY23 Q2'FY24 Q3'FY24 Credit Cost Credit Cost/ Avg Total AUM 64% 56% 53% 45% 45% 35% 3 69 83 87 Q3'FY23 Q2'FY24 Q3'FY24 2 ~<2% 4 Q
Slide 31: Thank You
Thank You www.ugrocapital.com Slide 31