Fusion Finance Ltd · NSE:FUSION

Fusion Finance — Fusion Micro Finance — Q3 FY24 Earnings Presentation

45 slides from Fusion Finance's earnings presentation, Feb 5, 2024

Slide 1: Submission of Earnings Presentation cover letter
Letter No. FMFL/SEC/2023-24/SE-120 Date: 05.02.2024 The Manager The Manager Listing Department Listing Department National Stock Exchange of India Limited BSE Limited Exchange Plaza, Plot No. C/1, G Block Bandra Phiroze Jeejeebhoy Towers Kurla Complex, Bandra (E), Mumbai - 400 051 Dalal Street, Mumb
Slide 2: Investor Presentation Q3 FY24
Creating Opportunities… Creating Investor Presentation Opportunities… Q3 FY24 Fusion Micro Finance Limited
Slide 3: Disclaimer
Disclaimer Creating Opportunities… By attending the meeting where this Presentation is made, or by reading the Presentation materials, you agree to be bound by the limitations contained herein and to maintain absolute confidentiality regarding the information disclosed in this Presentation. Any fail
Slide 4: Presentation Path
Presentation Path Creating Opportunities… Vision, Mission Financial Executive Summary Overview & Values Our Presence Key Strengths Performance 1 2 33 44 5 6 February 5, 2024 | © Fusion Micro Finance Limited 3
Slide 5: Executive Summary
Creating Opportunities… Executive Summary 1 February 5, 2024 | © Fusion Micro Finance Limited 4
Slide 6: Executive Summary 9M FY24
Executive Summary 9M FY24 Creating Opportunities… Consistent AUM and Disbursement growth, YoY increase of 23.57% & 17.97% respectively Focus on new clients continues, added ~4.23 lakh ~12.0% YoY Reduction in Cost to Income Consistent ROA & ROE AUM PAT ROA ROE Cost to Income ₹ 372.60 Cr ₹ 10,693.42 C
Slide 7: Executive Summary Q3 FY24
Executive Summary Q3 FY24 Creating Opportunities… Disbursement growth of 15.75% QoQ, 23.98% YoY Expansion in NIM Reduction in Marginal Cost of Funds PPOP stands at 260.26 Cr Profit after Tax of ₹126.45 Cr Network Expansion – 78 branches Disbursement Marginal Cost of Funds NIM CRAR Network 10.45% 11.
Slide 8: Performance Highlights
Performance Highlights Creating Opportunities… Key Metrics Q3 QoQ 9M YoY Total Income (₹ Cr) 613.24 7.35% 1,737.28 35.80% NII (₹ Cr) 337.21 10.73% 935.82 38.96% NIM 11.54% 42 bps 11.10% 118 bps OPEX 5.85% 24 bps 5.65% 13 bps Cost to Income 36.80% 39 bps 36.50% 291 bps PPOP (₹ Cr) 260.26 7.64% 737.44
Slide 9: Collection Efficiency
Collection Efficiency Creating Opportunities… 98.4% (Ex – Punjab) 97.9% 97.6% 97.3% 96.9% 96.8% 96.5% 95.4% Q1 FY 23 Q2 FY 23 Q3 FY 23 Q4 FY 23 Q1 FY 24 Q2 FY 24 Q3 FY24 Including Arrears February 5, 2024 | © Fusion Micro Finance Limited 8
Slide 10: Punjab Impact
Punjab Impact Creating Opportunities… Corrective Measures Punjab AUM 13 branches were split in H1 FY 24 for effective monitoring Month % Contribution to Total AUM Collection Efficiency (₹ Cr) Mar'23 479 5.2% 93.7% Disbursement slowed down in Q2 FY 24 to calibrate risk and growth Dec'23 382 3.6% 84.4
Slide 11: Credit Cost
Credit Cost Creating Opportunities… (₹ Cr) Particulars Q2 FY 24 Q3 FY 24 9M FY 24 Opening ECL [A] 328.4 300.3 312.7 - Provisions as per ECL [B] 75.3 92.9 243.3 Reversals (on account of write-off) [C] 103.4 81.3 244.1 Closing ECL [D = A+B-C] 300.3 311.9 311.9 Impairment [F] 75.3 92.9 243.3 Credit Cos
Slide 13: 14+ years of proven track record
14+ years of proven track record Creating Opportunities… Diversified Client Growth AUM Growth Organically diversified ~23% over last 5 Years ~37% over last 5 years since inception Technology Robust Liability Marquee Investor On Cloud since 2013 Warburg Pincus - 2018 Management Ratings IPO New Produc
Slide 14: Vision, Mission & Values
Creating Opportunities… Vision, Mission & Values February 5, 2024 | © Fusion Micro Finance Limited 13
Slide 15: Vision, Mission and Values
Vision, Mission and Values Creating Opportunities… Vision: “Fusion Micro Finance with a social vision and business orientation aims to provide underprivileged women with economic opportunities to transform the quality of Mission: their lives.” “A self-sustainable financial institution which leverage
Slide 17: Our Presence
Our Presence Creating Opportunities… J & K (2) Himachal Pradesh (9) Punjab (55) Uttarakhand (21) Haryana (47) Assam Assam (20)(20) Delhi (9) Uttar Pradesh (231) Rajasthan (99) FY 10-15 FY 16 Q3 FY24 Bihar(162) States 5 9 22 Madhya Pradesh (125) Jharkhand (50) Districts 38 88 446 Branches 75 173 1242
Slide 19: Key Strengths
Key Strengths Creating Opportunities… Diversification Liability Management Consistency Digital Orientation People Operational Prudence Strong Governance February 5, 2024 | © Fusion Micro Finance Limited 18
Slide 20: Key Strengths: Diversification
Key Strengths : Diversification Creating Opportunities… QoQ Network Distribution Top 5 states concentration Rural vs Urban Presence 22 22 69.8% 70.1% 70.4% 20 20 20 69.0% 93% 93% 93% 94% 93% 93% 140 0 67.7% 1164 1242 20 1086 1103 1057 120 0 15 100 0 800 10 600 400 5 200 0 0 7% 7% 7% 6% 7% 7% Q3'23 Q
Slide 21: Key Strengths: Consistency
Key Strengths : Consistency Creating Opportunities… (₹ Cr) QoQ AUM Disbursement Growth 23.6% Growth 24.0% 10,026 10,693 2,713 9,296 9,712 8,654 2,373 2,285 2344 2,188 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 AUM YoY Disbursement CAGR 34.2% 10,693 CAGR 32.6% 9,296 8,596 7,341 6,786
Slide 22: Key Strengths: Consistency (Contd…)
Key Strengths : Consistency (Contd…) Creating Opportunities… For MFI Vertical QoQ AUM/ RO (₹ Cr) AUM/Branch (₹ Cr) Borrower/ Branch 9.1 8.9 3,452 3,513 1.4 8.8 8.8 3,381 3,381 1.3 1.4 1.4 1.3 8.4 3,260 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 YoY AUM/
Slide 23: Key Strengths: Operational Prudence
Key Strengths : Operational Prudence Creating Opportunities… For MFI Vertical QoQ Avg. Ticket Size (₹ K) Active Borrowers (Lakh) Avg. OS / Borrower (₹ K) Growth 11.2% 44.7 27.2 42.4 42.2 36.4 36.9 37.8 26.2 41.2 34.0 35.3 25.6 25.8 24.8 37.9 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'2
Slide 24: Branch Vintage
Branch Vintage Creating Opportunities… For MFI Vertical Branch Vintage Mar’22 Mar’23 Dec’23 (Years) Branches POS Contribution Branches POS Contribution Branches POS Contribution <1 Yrs 190 7% 121 4% 152 3% 1 - 2 Yrs 119 10% 190 14% 173 10% 2 - 3 Yrs 87 9% 118 11% 185 16% > 3 Yrs 504 74% 590 71% 645
Slide 25: Key Strengths: People
Key Strengths : People Creating Opportunities… Stable and Experienced core management team and a strong second line with diversified experience Balanced infusion of strong talent for key leadership positions with progressing home-grown talent Team Size Building a performance driven culture which rew
Slide 26: Key Strengths: Liability Management
Key Strengths : Liability Management Creating Opportunities… Average Cost of Borrowing Marginal & Average Cost of Borrowing 12.7% 12.3% 11.2% 11.2% 10.4% 10.3% 10.5% 10.7% 10.7% 10.6% 10.6% 10.6% 10.5% 10.4% 10.4% 10.4% YoY QoQ '19 '20 '21 '22 '23 9M'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Avg. Cost of Bor
Slide 27: Key Strengths: Liability Management (Contd…)
Key Strengths : Liability Management (Contd…) Creating Opportunities… Positive ALM (Months) Period Rating 25.8 23.0 23.7 24.2 23.8 17.5 18.8 20.4 22.2 17.6 17.5 Oct 2023 A+ 16.5 Nov 2022 A FY 2019 A- FY 2017 BBB+ '19 '20 '21 '22 '23 9M'24 Avg Maturity of Assets Avg Maturity of Liabilties Loan Maturi
Slide 28: Key Strengths: Digital Orientation
Key Strengths : Digital Orientation Creating Opportunities… Technology – Infrastructure Customer Experience Early Cloud adoption Digital onboarding since 2019 Scalable Cashless disbursement improved from Open API 20% in 2018 to 99.90% in Q3 FY24 Architecture Business Outcome Operational Efficiency “
Slide 29: Key Strengths: Digital Orientation (Building for future)
Key Strengths : Digital Orientation (Building for future) Creating Opportunities… Robotic Process Automation facilitating ▪ Automated credit decisioning Develop Technology Solutions Leverage Robotics ▪ Driving operational efficiency To proactively access opportunities To automate manual & repetitive
Slide 30: Key Strengths: Strong Governance
Key Strengths : Strong Governance Creating Opportunities… Independent Risk Independent Audit Function reporting Management Function to Board Audit Committee Extensive use of Au Strong reporting mechanism & Data Analytics nt d Comprehensive risk-based audits e it M nagem anage Automation driving opti
Slide 31: ESG - seeking to be a responsible Financial Institution
ESG - seeking to be a responsible Financial Institution Creating Opportunities… Responsible approach towards environment , community and employees as well as towards internal governance standards Continuous Engagement with Community and Employees Governance Standards Under 23 CSR programs, 256 activ
Slide 32: Corporate Social Responsibility
Corporate Social Responsibility Creating Opportunities… Fusion creates a positive impact on economic, social and environmental growth of disadvantaged communities through integrated and sustainable development initiatives MENSTRUAL HYGIENE : PROJECT BEEJ : Empowering ~ 6000 women and Empowering 100
Slide 33: Financial Performance
Creating Opportunities… Financial Performance 6 February 5, 2024 | © Fusion Micro Finance Limited 32
Slide 34: Profit and Loss Statement
Profit and Loss Statement Creating Opportunities… Profit & Loss Statement (₹ Cr) Q3 FY 24 Q3 FY 23 YoY % Q2 FY 24 QoQ% 9M FY 24 9M FY 23 YoY % Revenue from operations - Interest income 540.04 420.25 28.50% 496.80 8.70% 1,515.84 1,149.37 31.88% - Other revenue from operations 52.99 38.38 38.07% 49.84
Slide 35: Balance Sheet
Balance Sheet Creating Opportunities… Financial Position (₹ Cr) Q3 FY 24 Q3 FY 23 YoY % Q2 FY 24 QoQ% Financial and Non-financial assets - Cash & Other Bank Balances 1,357.66 1,103.18 23.07% 1,400.43 (3.05)% - Bank balances other than cash and cash equivalents 60.59 115.62 (47.60)% 60.70 (0.18)% - L
Slide 36: Key Ratios
Key Ratios Creating Opportunities… QoQ Margin Analysis Cost to Income Opex 21.5% 21.7% 21.9% 5.85% 20.7% 21.0% 38.4% 5.59% 5.63% 5.61% 36.8% 5.49% 36.2% 36.3% 36.4% 10.4% 10.4% 10.6% 10.6% 10.4% 10.3% 10.6% 10.9% 11.1% 11.5% Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'
Slide 37: Key Ratios
Key Ratios Creating Opportunities… ROA (On Avg. AUM) ROA (On Avg. Assets) ROE 22.04% 5.10% 5.07% 5.09% 4.99% 4.99% 4.94% 4.91% 4.88% 20.24% 20.21% 20.02% 4.74% 4.71% 19.14% Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 GNPA NNPA 3.69% 3.46% 0.98% 3.20% 3.0
Slide 38: MSME
MSME Creating Opportunities… MSME vertical launched in Dec 2019 as a dedicated business unit to address the ‘missing middle’ Building credit assessment capability …nucleus of our MSME strategy Business Updates Q3 FY24 Clients 15,320 Clear focus on mapping adjacencies and potential thereof AUM (₹ Cr)
Slide 39: Highly Experienced Board with Strong Governance
Highly Experienced Board with Strong Governance Creating Opportunities… ◼ Over 26+ years of experience in Service/ ◼ Managing Director, Head of India at Warburg Financial Services industry Pincus ◼ Served on the board of Creditaccess Grameen and Muthoot Microfinance, among ◼ Holds a Post-Graduate Ce
Slide 40: Stable & Experienced Management Team
Stable & Experienced Management Team Creating Opportunities… February 5, 2024 | © Fusion Micro Finance Limited 39
Slide 41: Shareholder Profile
Shareholder Profile Creating Opportunities… CATEGORY SHARE HOLDER NAME Mutual Fund NIPPON LIFE INDIA TRUSTEE LTD Mutual Fund HDFC MUTUAL FUND 67.92% Mutual Fund MIRAE ASSET BANKING AND FINANCIAL SERVICES FUND 57.70% Insurance Company KOTAK MAHINDRA LIFE INSURANCE COMPANY LTD. Mutual Fund ADITYA BIRL
Slide 42: Awards and Accolades
Awards and Accolades Creating Opportunities… Fusion Microfinance Ltd. has been awarded as Mr. Sanjay Mahajan , CIO, “Most Influential Microfinance of the Year” Fusion Microfinance won the “Hall of Fame” February 5, 2024 | © Fusion Micro Finance Limited 41
Slide 43: Abbreviations
Abbreviations Creating Opportunities… AUM Asset Under Management FY Financial Year PAT Profit After Tax H Half Yearly NIM Net Interest Margin Bps Basis points ROE Return on Equity Q Quarter ROA Return on Assets ALM Asset Liability Management ECL Expected Credit Loss TAT Turn Around Time CRAR Capital
Slide 44: Definitions
Definitions Creating Opportunities… • AUM represents the aggregate of principal outstanding for all loans including the assigned portfolio as of the last day of the relevant period/year • Net Interest Income represents interest income on loan portfolio for the relevant period/year reduced by finance
Slide 45: Thank You
Creating Opportunities… Creating Thank You Opportunities… For Investor queries contact: Mr. Deepak Madaan| Email: investor.relations@fusionmicrofinance.com | +91-9289224563 February 5, 2024 | © Fusion Micro Finance Limited 44

Fusion Micro Finance — Q3 FY24 Earnings Presentation on 6ix

Fusion Finance — Fusion Micro Finance — Q3 FY24 Earnings Presentation

Slide 1: Submission of Earnings Presentation cover letter

Slide 2: Investor Presentation Q3 FY24

Slide 3: Disclaimer

Slide 4: Presentation Path

Slide 5: Executive Summary

Slide 6: Executive Summary 9M FY24

Slide 7: Executive Summary Q3 FY24

Slide 8: Performance Highlights

Slide 9: Collection Efficiency

Slide 10: Punjab Impact

Slide 11: Credit Cost

Slide 12: Overview

Slide 13: 14+ years of proven track record

Slide 14: Vision, Mission & Values

Slide 15: Vision, Mission and Values

Slide 16: Our Presence

Slide 17: Our Presence

Slide 18: Key Strengths

Slide 19: Key Strengths

Slide 20: Key Strengths: Diversification

Slide 21: Key Strengths: Consistency

Slide 22: Key Strengths: Consistency (Contd…)

Slide 23: Key Strengths: Operational Prudence

Slide 24: Branch Vintage

Slide 25: Key Strengths: People

Slide 26: Key Strengths: Liability Management

Slide 27: Key Strengths: Liability Management (Contd…)

Slide 28: Key Strengths: Digital Orientation

Slide 29: Key Strengths: Digital Orientation (Building for future)

Slide 30: Key Strengths: Strong Governance

Slide 31: ESG - seeking to be a responsible Financial Institution

Slide 32: Corporate Social Responsibility

Slide 33: Financial Performance

Slide 34: Profit and Loss Statement

Slide 35: Balance Sheet

Slide 36: Key Ratios

Slide 37: Key Ratios

Slide 38: MSME

Slide 39: Highly Experienced Board with Strong Governance

Slide 40: Stable & Experienced Management Team

Slide 41: Shareholder Profile

Slide 42: Awards and Accolades

Slide 43: Abbreviations

Slide 44: Definitions

Slide 45: Thank You