Spandana Sphoorty Financial Limited · NSE:SPANDANA

Spandana Sphoorty Financial — Q1 FY25 Earnings Presentation

27 slides from Spandana Sphoorty Financial's earnings presentation, Jul 27, 2024

  1. Slide 1: Stock exchange cover letter for investor presentation

    Ref: SSFL/Stock Exchange/2024-25/055 July 27, 2024 To To BSE Limited, National Stock Exchange of India Limited, Department of Corporate Services Listing Department P. J. Towers, 25th Floor, Exchange Plaza, C-1, Block G Dalal Street, Bandra Kurla Complex, Bandra (E) Mumbai – 400001 Mumbai – 400051 Sc

  2. Slide 2: Q1 FY25 Investor Presentation

    Invested in Bharat! Spandana Sphoorty Financial Limited Q1 FY25 Investor Presentation Kalighat Art

  3. 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

  4. Slide 4: Macros intact despite challenging Q1FY25

    Macros intact despite challenging Q1FY25 H2FY24 expected to normalize General Elections • Long drawn 7 phase elections • UP, Bihar, Madhya Pradesh, Maharashtra and Odisha impacted • Encountered operational challenges because of restricted movement of customers and employees Impact Heat wave • Center

  5. Slide 5: Measures taken to improve portfolio quality

    Measures taken to improve portfolio quality Stopped acquisition of new-to-credit customers Paused new member acquisition in 14% branches across key states New center addition restricted in 39% branches Credit level resources put at 20% branches; To be scaled to 50% branches by September 2024 Bench s

  6. Slide 6: Continuing to focus on the basics

    Continuing to focus on the basics Strategy Status • AUM concentration of largest state <14% Prudent geographical concentration norms • Top 4 states together account for ~50% of AUM • Average customer indebtedness of Spandana is ~₹42000 which is 76% of the industry. Only Spandana indebtedness is ₹34,

  7. Slide 7: Rating upgraded to A+ / Stable by ICRA and India Ratings

    Rating upgraded to A+ / Stable by ICRA and India Ratings CFL rating upgraded to A / Stable – highest ever Spandana Sphoorty Financial Ltd Rating / Outlook Rating / Outlook Rating Agency Rating Instrument Change (Current) (31-Mar-24) ICRA Bank Facilities / NCD’s A+ / Stable A / Positive Rating upgrad

  8. Slide 8: YoY AUM up 32%; NII up 47%, PPOP up 52%

    YoY AUM up 32%; NII up 47%, PPOP up 52% Portfolio quality impacted by external conditions leading to YoY PAT decline of 53% Q1 FY25 Q1 FY24 YoY (%) Q4 FY24 QoQ (%) Customer Addition (L) 2.0 2.6 (23)% 4.4 (55)% Disbursement (₹ Cr) 2,283 1,664 37% 3,970 (42)% AUM (₹ Cr) 11,723 8,848 32% 11,973 (2)% Fu

  9. Slide 9: 42% YoY growth in customer base

    42% YoY growth in customer base Focus on improving efficiencies across branches No. of customers (in L) Branch count 1,529 1,642 1,665 1,800 33.2 34.1 1,457 1,600 29.6 1,258 375 429 434 1,400 27.0 140 323 24.1 1,200 1,000 800 1,118 1,134 1,154 1,213 1231 600 400 200 0 Jun-23 Sep-23 Dec-23 Mar-24 Jun

  10. Slide 10: Weekly branches account for over 24% of Q1FY25 disbursement

    Weekly branches account for over 24% of Q1FY25 disbursement Weekly branch Weekly Branch count Disbursement share (%) 429 434 24% 375 21% 323 16% 7% 140 2% Q1 Q2 Q3 Q4 Q1 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 FY24 FY24 FY24 FY24 FY25 Weekly branches Weekly branches AUM (₹ Cr) Net Collection Efficiency (

  11. Slide 11: AUM at ₹11,723 Cr, ~32% YoY growth

    AUM at ₹11,723 Cr, ~32% YoY growth Top 4 States contribute ~50% of AUM vs. 57% in March 2022 AUM (₹ Cr) - +32% YoY Disbursement (₹ Cr) +32% QoQ YoY (42)% +37% 11,973 11,723 3,970 10,404 9,784 8,848 2,283 1,664 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Q4FY24 Q1FY25 Q1FY24 AUM Concentration of top 4 states

  12. Slide 12: Borrowings from banks increase to 59% vs. 48% YoY

    Borrowings from banks increase to 59% vs. 48% YoY Diversified borrowings and active funds management have positive impact on borrowing cost Incremental borrowing (in ₹ Cr) Cost of borrowing 12.5% 12.5% QoQ YoY 12.3% 11.7% 11.9% 12.0% 11.8% 11.7% (55)% +1% 11.6% 11.9% 10.8% 3,428 12.3% 12.3% 12.2% 11

  13. Slide 13: Portfolio quality temporarily impacted; GNPA at 2.6%; NNPA at 0.53%

    Portfolio quality temporarily impacted; GNPA at 2.6%; NNPA at 0.53% 31 – 60 dpd 61 – 90 dpd 3.41% 2.57% 1.93% 1.55% 1.47% 1.49% 1.68% 1.38% 0.83% 0.92% 0.60% 0.59% 0.64% 0.54% 0.60% 0.82% 0.42% 0.39% 0.47% 0.42% Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 22 22 22

  14. Slide 14: PCR maintained at 79.66%

    PCR maintained at 79.66% SSFL standalone PCR is 80% 30-Jun-24 31-Mar-24 Provisioning & Loans ECL Loans ECL Coverage % of Loans % of Loans Outstanding Provision Coverage Outstanding Provision Coverage Outstanding Outstanding (₹ Cr) (₹ Cr) (₹ Cr) (₹ Cr) Stage 1 10,611 94.25% 90 0.85% 10,942 96.94% 95

  15. Slide 15: Q1FY25 YoY Income up 40%, NII up 46%, PPOP up 52%

    Q1FY25 YoY Income up 40%, NII up 46%, PPOP up 52% PAT declined by 53% YoY owing to temporary challenges In ₹ Cr Income* Net Interest Income QoQ YoY QoQ YoY +4% +40% +12% +47% 710 737 378 425 527 290 Q4 Q1 Q1 Q4 Q1 Q1 FY24 FY25 FY24 FY24 FY25 FY24 PPOP* PAT* QoQ YoY QoQ YoY +8% +52% (57)% (53)% 266 2

  16. Slide 16: Q1FY25 Yield at 24.4%; Opex-to-AUM at 6.5%

    Q1FY25 Yield at 24.4%; Opex-to-AUM at 6.5% Cost of borrowing at 11.6% in Q1FY25 Yield (%) Cost of Borrowing (%) QoQ YoY QoQ YoY +22 bps +35 bps (15) bps (92) bps 24.2% 24.4% 24.0% 12.5% 11.7% 11.6% Q4 Q1 Q1 Q4 Q1 Q1 FY24 FY25 FY24 FY24 FY25 FY24 NIM (%) Opex-to-AUM (%) QoQ YoY QoQ YoY +58 bps +91 bp

  17. Slide 17: Q1FY25 Cost-to-income improves to ~40%

    Q1FY25 Cost-to-income improves to ~40% ROA at ~2%; ROE at 6.1% due to higher impairment cost Cost-to-income^ (%) ROE (%) QoQ YoY QoQ YoY (379) bps (274) bps (839) bps (908) bps 43.7% 42.7% 14.5% 15.2% 39.9% 6.1% Q4 Q1 Q1 Q4 Q1 Q1 FY24 FY25 FY24 FY24 FY25 FY24 ROA (Total Assets) (%) ROA (On book POS)

  18. Slide 18: Consolidated Net-worth increases to ₹3,707 Cr, CRAR at 32.0%

    Consolidated Net-worth increases to ₹3,707 Cr, CRAR at 32.0% Gearing at 2.4x (consolidated) SSFL Standalone Net-worth & CRAR 4000 3 38.0% 37.0% 3,707 35.9% 3,645 3,497 5000 32.0% 32.7% 35.00% 3500 3,360 2.5 3,228 2.6 2.4 30.00% 2.3 2.3 3,614 4000 3000 2 3,414 3,556 2.0 3,164 3,286 25.00% 3000 2500 1

  19. Slide 19: Consolidated Income Statement

    Consolidated Income Statement Particulars (₹ Cr) Q1 FY25 Q4 FY24 Q1 FY24 QoQ YoY Revenue from Operations Interest income on loans 685 628 490 9% 40% Net gain on fair value changes 13 34 13 (60)% 5% Other Income 12 14 9 (19)% 26% Total income from operations 710 676 512 5% 39% Non-operational Income

  20. Slide 20: Consolidated Balance Sheet

    Consolidated Balance Sheet ASSETS (₹ Cr) Jun 30, 2024 Mar 31, 2024 LIABILITIES & EQUITY (₹ Cr) Jun 30, 2024 Mar 31, 2024 Financial Liabilities Financial Assets Debt Securities 3,642 4,064 Cash and bank balances 1,534 1,894 Borrowings (Other than Debt Securities) 5,199 5,340 Loan Portfolio 10,810 11,

  21. Slide 21: Annexure

    Annexure 20

  22. Slide 22: Positive ALM across maturity buckets

    Positive ALM across maturity buckets Positive ALM (₹ Cr)* Maturity profile* (in months) 3,614 3,422 11.8 12.1 3,231 2,797 9.6 9.2 2,421 2,114 1,846 1,595 656 682 664 629 535 290 52 53 upto 1m 1m to 2m 2m to 3m 3m to 6m 6m to 12m 1Y to 3Y 3Y to 5Y Over 5Y Jun-24 Mar-24 Assets Liabilites Avg. residual

  23. Slide 23: Well diversified presence

    Well diversified presence AUM concentration* - ~49% from top 4 States District level concentration* % of AUM Largest 1.8% State Jun-24 Mar-24 Mar-23 Top 5 7.5% Odisha 14% 14% 15% Madhya Pradesh 13% 13% 17% Top 10 12.7% Bihar 12% 12% 8% Karnataka 10% 10% 11% Top 20 21.5% Andhra Pradesh 10% 10% 11% Ot

  24. Slide 24: Metrics over the years

    Metrics over the years AUM (₹ Cr) Disbursement (₹ Cr) GNPA (%) & NNPA (%) 10,688 18.7% 11,973 8,004 8,125 8,157 8,511 6,829 6,426 6,581 10.5% 3,373 3.1% 2.1% 0.4%0.1% 1.4% 1.5% 0.6% 0.3% FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 GNPA (%) NNPA (%) Net Interest Income

  25. Slide 25: Accelerated growth delivered over last year

    Accelerated growth delivered over last year Customers (in L) Employees Customers / Branch & LO * 33.2 14,243 2,541 3000 850 2,324 750 25.7 24.5 2500 2,097 1,914 2,021 23.5 22.6^ 10,016 2000 650 550 8,224 8,644 8,763 590 450 1500 350 432 382 343 344 1000 250 150 500 50 0 -50 FY20 FY21 FY22 FY23 FY24

  26. Slide 26: Glossary

    Glossary Key Ratio Abbreviation Definition 1 Portfolio Yield Yield Interest income divided by average monthly loan outstanding 2 Cost of borrowing COB Interest expenses divided by average monthly borrowing outstanding 3 Marginal COB (XIRR) Multiplication of borrowing availed during the period and co

  27. Slide 27: Thank you!

    Thank you! Investor Relations Strategic Growth Advisors Pvt. Ltd Abhishek Shah Spandana Sphoorty Financial Limited +91 99306 51660

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