Spandana Sphoorty Financial Limited · NSE:SPANDANA
Spandana Sphoorty Financial — Q2 FY22 Earnings Presentation
39 slides from Spandana Sphoorty Financial's earnings presentation, Jan 6, 2022
Slide 1: Cover letter to stock exchanges
Ref: SSFL/Stock Exchange/2021-22/071 Date: January 06, 2022 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, BandraKurla Complex, Bandra (E) Mumbai – 400001 Mumbai – 4
Slide 2: Spandana Sphoorty Financial Limited Investor Presentation
Spandana Sphoorty Financial Limited ….Committed to low-income households Investor Presentation January 2022 18 Q2 FY22 Years
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
Slide 4: Business Update, Key Operating Metrics, Key Financial Metrics
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 3
Slide 5: An Experienced Interim Management Team has Taken over Day-to-day Operations
An Experienced Interim Management Team has Taken over Day-to-day Operations… Erstwhile Founder and MD, Padmaja Reddy, resigned on 2 nd Nov 2021. Board immediately constituted a Management Committee and Interim Management Team Management Committee (‘MC’) with long serving Directors of the Company was
Slide 6: Supported by Incumbent Senior Management Team of Spandana
…Supported by Incumbent Senior Management Team of Spandana Incumbent Senior Management Team of Spandana has been driving various …and have put in place control measures to ensure smooth functioning initiatives… Amit Ranjan Biswal | Chief Business Officer ▪ Augmented the roles of supervisory field st
Slide 7: Current Key Focus Areas
Current Key Focus Areas ▪ Tenured interim management team has engaged with all stakeholders and instituted additional risk management controls along with internal audit team ▪ Employee engagement and initiatives implemented which has led to significant reduction in churn and high employee morale Tra
Slide 8: Focus on Employee morale and reduction in attrition levels
Focus on Employee morale and initiatives with significant reduction in company attrition levels With < 5% attrition rates post transition, the organization is well set to deliver Employee friendly initiatives & engagements are being undertaken healthy performance in the upcoming quarters ▪ Continuou
Slide 9: Collections have been healthy through the transition
Collections have been healthy through the transition and continues to be a key focus area for the management… Collection back on track with collection efficiency touching 97% in Q2FY22… … with Significantly Improving Month on Month Collections Collection Efficiency1 (Incl. Arrears; Excl. pre-payment
Slide 10: Interim management focus on tracking cash collections
…with interim management focus on tracking cash collections (excluding any pre-closure) Focus of the interim management has shifted to cash collected and deposited at HO December cash collections have been better than previous 3 months inspite of run down of portfolio Rs. crore 483 457 452 442 427 4
Slide 11: Company working in a parallel robust IT environment
Company working in a parallel robust IT environment with added functionalities Overview of the system Additional functionalities going forward ▪ Web based technology with Anytime + Anywhere access ▪ Migration from a hosted to cloud based architecture ▪ Encrypted architecture with Captcha, 3D Verific
Slide 12: Increased Focus on Risk Management Practices post Transition
Increased Focus on Risk Management Practices post Transition with Specific Long-Term Priorities Mapped Out # of Internal Audit visits per month have increased significantly in the last ▪ Post transition, the near-term priorities for the internal audit team was focused on 3 key couple of months areas
Slide 13: Conservative Provisioning Levels built into the Portfolio
Conservative Provisioning Levels built into the Portfolio Total portfolio coverage for H1FY22 (provisions plus write-offs) stands at a comfortable Rs.390 crore; Total provisions on BS of Rs.806 crore alone account for 12.4% of the portfolio* Balance Sheet Particulars (Rs. crore) Q2FY22 Standard Prov
Slide 14: Liquidity position comfortable with no change in credit ratings
Spandana’s liquidity position continues to be comfortable with no change in credit ratings amidst the recent management changes Total repayments of ~Rs. 1,9271 crore have been made over the past 5 months High level of engagement with rating agencies by Company’s Management Committee Rs. crore1 Novem
Slide 15: Key Operating Metrics
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) All the data are on Consolidated basis Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 14
Slide 16: Operational Summary
Operational Summary AUM (Rs. crore) Disbursements (Rs. crore) Borrowers (In lakhs) Off-Book On-Book* Off-Book On-Book* CAGR +19% CAGR CAGR +16% +37% 8,157 7,999 7,546 25.7 26.1 6,829 24.6 24.5 6,426 4,969 15.9 4,372 4,914 7,280 6,865 3,858 3,166 4,232 1,547 1,915 140 877 682 Mar-18 Mar-19 Mar-20 Mar
Slide 17: Rising Employee Productivity has led to Opex Efficiency
Rising Employee Productivity has led to Opex Efficiency Active Borrowers/Branch (#) AUM/Employee (Rs. crore) Cost To Income (%) Excl. Trainees Incl. Trainees 30.4% 2,658 1.05 1.07 26.1% 2,541 1.01 24.9% 2,285 2,324 2,323 21.9% 0.94 19.9% 0.86 0.83 0.80 0.83 0.78 0.66 Mar-18 Mar-19 Mar-20 Mar-21 Sep-
Slide 18: Industry-Leading Geographic Diversification
Industry-Leading Geographic Diversification at State, District and Branch Levels State-wise Concentration Well diversified portfolio across States Well dispersed district level exposure ensures low impact from region-specific issues Top States AUM Concentration* Madhya Pradesh 18.3% District wise Co
Slide 19: Continued Focus on Further Increasing Diversification
Continued Focus on Further Increasing Diversification, Without Compromising Rural Focus State-wise Consolidated AUM Mix – Greater Diversification Concentration (by AUM) of Top 3 States is Reducing 18.3% 63.0% Madhya Pradesh 18.0% 54.7% 16.0% 48.4% 48.0% 47.2% Orissa 16.7% 12.9% Andhra Pradesh* 11.9%
Slide 20: Key Financial Metrics
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) All the data are on Consolidated basis Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 19
Slide 21: Financial Performance
Financial Performance Total Income (Rs. crore) Net Interest Income (Rs. crore) Yield (%) Cost of Borrowings (%) +156% +217% -260 bps -280 bps 1,470 1,506 1,082 25.7% 26.2% 14.2% 24.0% 13.5% 23.1% 906 21.9% 11.9% 11.4% 10.9% 1,049 831 623 538 588 341 FY18 FY19 FY20 FY21# H1FY22 FY18 FY19 FY20 FY21 H1
Slide 22: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (Rs. crore) H1FY22 H1FY21 Q2 FY22 Q1 FY22 Q2 FY21 Revenue from Operations Interest income 747.2 627.1 350.5 396.7 317.3 Net gain on fair value changes 59.8 39.2 31.0 28.7 23.8 Other Income 22.9 4.5 14.1 8.7 3.8 Total income from operations 829.8 670.8
Slide 23: Consolidated Balance Sheet
Consolidated Balance Sheet ASSETS (Rs. crore) Sep 30, 2021 Mar 31, 2021 Sep 30, 2020 LIABILITIES & EQUITY (Rs. crore) Sep 30, 2021 Mar 31, 2021 Sep 30, 2020 Financial Assets Financial Liabilities Cash and cash equivalents 1,466.9 1,135.2 461.7 Debt Securities 2,254.3 2,034.7 752.7 Bank Balances othe
Slide 24: Borrowing Profile
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) All the data are on Consolidated basis Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 23
Slide 25: Diversified Borrowing Profile
Diversified Borrowing Profile Borrowings (Rs. crore) ▪ Management committee led by Mr. Kamath has been having regular discussions and periodic dialogue with lenders DA 6,194 PTC 5,787 ▪ No adverse / remedial action initiated by any lender for NCDs/MLDs 970 change in management Term Loan 672 4,941 75
Slide 26: Comfortable Liquidity Position Driven by Strong Track Record
Comfortable Liquidity Position Driven by Strong Track Record Positive ALM Mismatch (Rs. crore) Assets 2,175 Liabilities 2,073 2,110 1,740 1,314 1,023 857 476 427 351 381 332 285 39 21 10 Upto 1 Month 1 to 2 Months 2 to 3 Months 3-6 Months 6 to 12 Months 1 to 3 Years 3 to 5 Years Over 5 Years Positiv
Slide 27: Overview of Criss Financial (Subsidiary)
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 26
Slide 28: Overview of Criss Financial
Overview of Criss Financial ▪ Criss Financial Limited (CFL) is an NBFC, which is a 98.5% subsidiary of Spandana Sphoorty Financial Limited ▪ It was set up to operate in states / asset classes that SSFL itself could not, given its status as an NBFC-MFI ▪ CFL offers Loans against Gold, Loans Against P
Slide 29: Criss Financial – Robust Financial Performance
Criss Financial – Robust Financial Performance AUM (Rs crore) Disbursements (Rs crore) Total Income (Rs crore) PBT (Rs crore) PPoP for Q1 and Q2 FY22 is similar; lower PBT in Q2 CAGR CAGR FY22 due to one time conservative management +10% overlay of provisions +89% 403 503 326 56 23 51 20 277 19 244
Slide 30: Criss Financial – Q2 FY22 Profit & Loss Statement
Criss Financial – Q2 FY22 Profit & Loss Statement Particulars (Rs. crore) Q2 FY22 (3M) Q1 FY22 (3M) Q2 FY21 (3M) H1 FY22 (6M) H1 FY21 (6M) FY21 (12M) Revenue from operations Interest income 26.30 23.77 10.42 50.07 20.93 51.12 Net gain on fair value changes (0.02) (0.07) - (0.09) 0.37 1.66 Others 0.4
Slide 31: Criss Financial – Balance Sheet
Criss Financial – Balance Sheet ASSETS (Rs. crore) Sep 30, 2021 Mar 31, 2021 LIABILITIES & EQUITY (Rs. crore) Sep 30, 2021 Mar 31, 2021 Financial Liabilities Financial Assets Debt Securities 18.66 - Cash and cash equivalents 5.05 4.41 Borrowings 334.52 248.63 Bank Balances - 0.50 Other Financial lia
Slide 32: Annexure
1 Business Update 2 Key Operating Metrics 3 Key Financial Metrics 4 Borrowing Profile Overview of Criss Financial 5 6 Annexure (Subsidiary) All the data are on Consolidated basis Criss Financial Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 31
Slide 33: Strong Risk Management DNA
Strong Risk Management DNA Risk Management Key Risks Concentration Risk Political Risk Operational Risk Responsible Lending, Process Controls & Geographic & Lender Management Strategy Dependence Adherence to CoC Non Negotiable Norms and Fair pricing ▪ Portfolio caps based on net worth and ▪ Continue
Slide 34: Products
Products Product Name Purpose Interest Rate (%) Tenor Ticket Size (Rs.) Mix (%) Core Product • These unique loan products are designed especially for low-income households who aspire to improve their financial well-being Abhilasha / • The primary objective of this loan is to empower women in 21.3% 1
Slide 35: Shareholding Pattern
Shareholding Pattern As on Sep-21 Non-Promoter Investor Details % Holding Valiant Mauritius Partners* 11.9% 6.7% 9.7% ICICI Prudential Life Insurance 4.7% 4.7% 3.1% JM Financial India Trust 2.5% 46.5% 12.4% Helion Venture Partners* 2.0% Edelweiss Alternative Investment* 1.8% 16.8% Neuberger Berman E
Slide 36: Niche Business Model
Niche Business Model Business Model Processes HR policies ▪ Standardized systems and a front-end ▪ Group size of 6 to 10 women interface that gives real time information ▪ Strict employee transfer policy with on demand and collections adherence to operational risk control ▪ Loans given under Joint L
Slide 37: Efficient Business Process
Efficient Business Process Spandana Village Selection Branch Manager Survey a Village Group Formation (6-10 Clients) and Training Formation and training of groups Center Formation Credit Assistant Loan Repayment Financial Service at doorstep Services at the Door Borrowers Steps ▪ Loans are offered f
Slide 38: Glossary
Glossary Sr. No. Particulars Formula 1 Networth Shareholders Fund + Other Equity excluding Non controlling interest 2 Capital Adequacy Tier I ratio + Tier II ratio 3 Leverage Closing On Balance sheet Borrowings / Closing Net worth 4 Marginal Cost of Borrowing (Borrowings availed during the period *
Slide 39: Thank You
Contact Information Company : Investor Relations Advisor : Spandana Sphoorty Financial Limited Strategic Growth Advisors Pvt. Ltd. CIN: L65929TG2003PLC040648 CIN: U74140MH2010PTC204285 Mr. Aditya Kumar Mr. Abhishek Shah / Ms. Krunali Shah VP – Investor Relations E: abhishek.shah@sgapl.net / krunali.
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