Arman Financial Services Limited · NSE:ARMANFIN

Arman Financial Services — Q4 FY2022 Earnings Presentation

38 slides from Arman Financial Services's earnings presentation, June 2022

  1. Slide 1: Q4 & FY22 Investor Presentation

    INVESTOR PRESENTATION FY19 Arman Financial Services Ltd. Q4 & FY22 - Investor Presentation June 2022

  2. Slide 2: Disclaimer

    DISCLAIMER Certain statements in this document that are not historical facts are forward looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors

  3. Slide 3: Contents

    CONTENTS 04 Performance Update – Q4 & FY22 17 Liability Overview 20 Company Overview 29 Product Overview 34 Annexures

  4. Slide 4: Financial Performance Update – Q4 & FY22

    Financial Performance Update – Q4 & FY22

  5. Slide 5: Q4 FY22 – Financial Performance Highlights

    Q4 FY22 – Financial Performance Highlights Total AUM up by 51% YoY to INR 12,332 Mn in Q4FY22 vs INR 8,144 Mn in Q4FY21  We have added more than 80,000 new customers in Q4 FY22. Active Customer base of more than 4.6 lakh. Shareholders Equity Stood at INR 2,127 Mn in Q4 FY22  Consolidated Debt-Equi

  6. Slide 6: Update on Collections

    Update on Collections Update on Collections  Collections in all the segments were healthy and remained above 95% during the quarter • ‘Microfinance’ collections was healthy and reached 98% during March 2022 . • 2W and MSME collections continued to be well-north of 95% during December 2021  Cumulat

  7. Slide 7: Update on Liquidity & Disbursements

    . Update on Liquidity & Disbursements Update on Liquidity  Healthy Liquidity position with INR 1,504 Mn in cash/bank balance, liquid investments, and undrawn CC limits • The company has duly repaid all the debt obligations that were due in Q4 FY22. • ALM continues to remain positive, and the compan

  8. Slide 8: Q4 & FY22 – Consolidated Profit & Loss Statement

    Q4 & FY22 – Consolidated Profit & Loss Statement Particulars (INR Mn) Q4 FY22 Q4 FY21 YoY (%) FY22 FY21 YoY (%) Assets Under Management (AUM) 12,332 8,144 51% 12,332 8,144 51% Disbursements 3,375 2,752 23% 1,0233 5,097 101% Shareholder’s Equity * 2,127 1,868 14% 2,127 1,868 14% Income from Operation

  9. Slide 9: Q4 FY22 - Consolidated Performance Update

    Q4 FY22 - Consolidated Performance Update AUM (INR Mn) Disbursement (INR Mn) Gross Total Income (INR Mn) 12,332 758 10,446 3,375 2,965 587 9,083 2,752 2,665 497 508 8,144 7,848 443 1,216 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q

  10. Slide 10: Q4 & FY22 – Consolidated Balance Sheet

    Q4 & FY22 – Consolidated Balance Sheet Particulars (in INR Mn) Consolidated Standalone Consolidated Standalone ASSETS March 2022 March 2021 March 2022 March 2021 LIABILITIES & EQUITY March 2022 March 2021 March 2022 March 2021 Financial Assets Equity Share capital 85 85 85 85 Cash and cash equivalen

  11. Slide 11: Q4 & FY22 – Microfinance “Namra” Performance Update

    Q4 & FY22 – Microfinance “Namra” Performance Update Particulars (INR Mn) Q4 FY22 Q4 FY21 YoY (%) FY22 FY21 YoY (%)  Q4 FY22 MFI AUM stood at INR 10,220 Mn – higher by 59% vis-à- vis last year Asset Under Management 10,220 6,431 59% 10,220 6,431 59% • Active MFI Customer base stood at 4.01 Lakhs in

  12. Slide 12: Q4 FY22 - Microfinance Performance Update

    Q4 FY22 - Microfinance Performance Update AUM (INR Mn) Disbursement (INR Mn) Gross Total Income (INR Mn) 10,220 559 2,795 8,557 2,297 2,421 428 7,417 2,200 376 6,431 367 6,307 336 985 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 F

  13. Slide 13: Q4 FY22 – Microfinance Performance Update

    Q4 FY22 – Microfinance Performance Update Yields % and NIM % Cost-to-Income Ratio % 25.5% 48.9% 23.6% 22.6% 21.6% 21.5% 39.6% 23.2% 27.5% 28.0% 18.7% 13.1% 13.3% 12.9% 10.6% Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Yields % NIM % Cost / Income (%) Asset Quality

  14. Slide 14: Q4 – Standalone Performance Update (2W & MSME)

    Q4 – Standalone Performance Update (2W & MSME) Particulars (INR Mn) Q3 FY22 Q3 FY21 YoY (%) FY22 FY21 YoY (%) Asset Under Management 2,112 1,713 23% 2,112 1,713 23%  Standalone AUM stood at INR 1,889 Mn on 31st March 2022 Disbursements 580 455 27% 1,832 921 99% • MSME AUM increased by 32% YoY to IN

  15. Slide 15: Q4 FY22 - MSME Performance Update

    Q4 FY22 - MSME Performance Update AUM (INR Mn) Disbursements (INR Mn) Gross Interest Income (INR Mn) 1,651 1,395 164 1,253 1,247 502 1,131 379 380 108 353 96 99 93 160 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Asset Quality# Yi

  16. Slide 16: Q4 FY22 - 2W Performance Update

    Q4 FY22 - 2W Performance Update AUM (INR Mn) Disbursement (INR Mn) Gross Interest Income (INR Mn) 494 42 459 461 410 419 163 31 30 30 31 112 76 71 79 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Asset Quality Yields % 28.9% 2

  17. Slide 17: Liability Overview

    Seo = Liability Overview

  18. Slide 18: Efficient Liability Management

    Efficient Liability Management Funding profile is well diversified with increase in share of funds from NCDs & DFIs Q4 FY21 - Borrowing Mix % Q4 FY22 - Borrowing Mix % INR 7,665 Mn * INR 10,858 Mn * Banks & SFBs 8.4% 0% 2% DFIs (NABARD, MUDRA & SIDBI) 21% 26.0% 27% NBFC / FI 18.1% 6% Securitization

  19. Slide 19: Lending partners

    Lending partners Bank Borrowings Non-Bank Borrowings Securitization Partners NCDs & ECB 22 19

  20. Slide 20: Company Overview

    Company Overview

  21. Slide 21: Key Strengths

    Key Strengths Genesis Robust Risk Management Framework  Arman Financial Services (“Arman”) is a diversified NBFC  Consistent rating upgrades backed by strong financial & operating focusing on large under-served rural & semi-urban retail markets performance – Currently rated BBB+ by CARE Ratings an

  22. Slide 22: Business Progression

    Business Progression Company Disbursement Raised PE Expanded to Crosses 100 crosses INR 750 Cr; incorporated. funding from Maharashtra, branches across 5 100% Cashless AUM crossed Started bill Launched 2W Incofin; MP, UP & states & 3 products; disbursements; INR 1,000 Cr discounting & Loans Disburse

  23. Slide 23: Product Snapshot

    Product Snapshot • 30 years of existence • Active customer base of 4.65 lakh • Employee strength of 2,270 employees • Completely in-house operations – Sourcing, Credit & Collections Microfinance MSME Loans 2-Wheeler Loans Rural 2W Loans % of Total AUM 83% 13% 3% 1% (in Pilot Stage) LTV Unsecured Cas

  24. Slide 24: Differentiated Operations

    Differentiated Operations Focus on small-ticket retail loans to the large under-served informal segment customer in rural & semi-urban geographies Diversifying products, geographies, sources of funds and delivering growth by increase in volumes rather than ticket sizes KEY STRATEGIC DIFFERENTIATORS

  25. Slide 25: Technological Initiatives to Strengthen Operations

    Technological Initiatives to Strengthen Operations  In FY19, the company launched an integrated mobile interface for its MFI field staff to enable seamless on-boarding of MFI customers by digitizing & standardizing the loan origination and appraisal process. ‘This technology has been successfully i

  26. Slide 26: Strong Growth in AUM & Disbursements

    Strong Growth in AUM & Disbursements….. Total AUM (INR Mn) 12,332 14000 • Diversified portfolio of 12,332 Mn in Q4 FY22 split between – 12000 • Microfinance: INR 10,220 Mn (82.9%), 13% 12000 10000 4% • MSME Loans: INR 1,651 Mn (13.4%) 8,599 17% 8,144 10000 • 2-Wheeler Loans: INR 461 Mn (3.7%) 8000 1

  27. Slide 27: While Maintaining Superior Cost Efficiency & Asset Quality

    …..While Maintaining Superior Cost Efficiency & Asset Quality Gross Income and Net Total Income (INR Mn) Yield % and NIM % Focus on risk have led to immaculateDemonetization through-cycle asset quality Demonetization CAGR: 34% CAGR: 34% 6.7% 2,350 Demonetization 2,152 1,950 28.7% 28.3% 27.4% 25.5% 2

  28. Slide 28: Shareholding Pattern

    Shareholding Pattern SHAREHOLDING – 31st March 2022 Promoters, 27.5% Public, 50.2% Elevation Capital, 22.3% Source – Company  Elevation Capital (Erstwhile SAIF Partners) invested INR 500 Mn in CCDs in April 2018 Post conversion of CCD’s, Elevation Capital stake in the company stands at 22.3%  Mr.

  29. Slide 29: Product Overview

    Product Overview

  30. Slide 30: Product Overview: Microfinance

    Product Overview: Microfinance Product Overview FY22 – Key Metrics (Mn)  JLG model with small ticket loans (Avg. Ticket Size – INR 10,220 8,401 35,000) given to women borrowers for income generating activities such as Livestock, Dairy, Agri allied, Kirana Stores AUM (INR Mn) Disbursement (INR Mn) 

  31. Slide 31: Product Overview: 2W & Rural 2W Loans

    Product Overview: 2W & Rural 2W Loans Product Overview FY22 – Key Metrics (Mn)  Hypothecation (secured) loans given to self-employed / cash- 461 428 salaried customer in the informal segment in semi-urban / rural areas for a 2W AUM (INR Mn) Disbursement (INR Mn)  Currently operates only in Gujarat

  32. Slide 32: Product Overview: MSME Loans

    Product Overview: MSME Loans Product Overview MSME Process Overview  Individual enterprise / working capital loans for small rural businesses in low competition areas • In-house sourcing team (No DSAs)  Currently operates across 4 states – Gujarat, MP, Maharashtra & Rajasthan with 45 • Feet-on-Str

  33. Slide 33: Contact details

    Vivek Modi Group – CFO Pushpa Mani/Chintan Mehta Arman Financial Services Ltd Dickenson World Tel : + 91 79 4050 7000 (Extn. 210) Tel : +91 9911684123 / 9892183389 Email : vivek@armanindia.com Email : armanfinancial@dickensonworld.com

  34. Slide 34: Annexures

    Annexures

  35. Slide 35: Microfinance: 5-Year Performance

    Microfinance: 5-Year Performance Disbursement growth is driven by customer & branch addition AUM growth exceeds MFI industry growth rates 2 .5 2.24 2.32 2.30 1 1 ,0 0 0 Demonetization 10,220 2 .0 Demonetization 1.70 9 ,0 0 0 7 ,0 0 0 6,431 1 .5 1.13 6,207 4,837 5 ,0 0 0 1 .0 0.74 8,401 5,896 6,531 3

  36. Slide 36: Microfinance: 5-Year Performance

    Microfinance: 5-Year Performance Well diversified across geographies Maintaining high operational efficiency MFI AUM Mix (%) Demonetization 2% 1% 1% 0.2% 6% 7% 1% 2% 5% 9% 61% 21% 20% 1% 11% 4% 17% 18% 18% 56% 1% 13% 21% 24% 48% 21% 18% 43% 45% 42% 21% 13% 27% 72% 25% 27% 22% 44% 31% 27% 27% 23% FY1

  37. Slide 37: 2W Loans: 5-Year Performance

    2W Loans: 5-Year Performance Yields (%) & NIM (%) Trend Arman 2W AUM/ has seen steady growth over FY15-20 1 2 0 0 .0 1 0 0 0 .0 25.7% 25.5% 3 0 .0 % 24.9% 23.9% 24.4% 8 0 0 .0 2 5 .0 % 2 0 .0 % 6 0 0 .0 COVID-19 1,017 955 1 5 .0 % 18.4% 900 16.5% 4 0 0 .0 15.6% 738 1 0 .0 % 14.8% 14.0% 2 0 0 .0 459

  38. Slide 38: MSME Loans: 5-Year Performance

    MSME Loans: 5-Year Performance Disbursement Growth AUM Growth 3500 33000 1,651 1,433 30000 3000 27000 24,586 23,914 24000 2500 1,254 21000 2000 992 18000 16,284 15000 11,246 1500 9,756 461 12000 1000 9000 1,362 1,391 1,054 6000 978 500 61 3000 527 674 0 64 0 FY17 FY18 FY19 FY20 FY21 FY22 FY17 FY18 F

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