Indostar Capital Finance Limited · NSE:INDOSTAR
Indostar Capital Finance — Q3 FY2024 Earnings Presentation
54 slides from Indostar Capital Finance's earnings presentation, Jan 24, 2024
Slide 1: Stock exchange filing cover letter
ICFL/LS/0127/2023-24 24 January 2024 BSE Limited National Stock Exchange of India Limited Listing Department, 1st Floor, Exchange Plaza, C-1, Block G, P J Towers, Dalal Street, Fort, Bandra Kurla Complex, Bandra, Mumbai - 400 001. (E), Mumbai – 400 051. Scrip Code: 541336 Symbol: INDOSTAR Sub.: Inve
Slide 2: IndoStar Capital Finance Investor Presentation January 2024
INDOSTAR CAPITAL FINANCE Investor Presentation January 2024
Slide 3: Safe Harbor
Safe Harbor “Your Path To A Better Life” This presentation and the accompanying slides (the “Presentation”), which have been prepared by IndoStar Capital Finance Limited (the “Company’), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation
Slide 4: Key Performance Highlights – Q3FY24 (Consolidated)
Key Performance Highlights – Q3FY24 (Consolidated) “Your Path To A Better Life” AUM Disbursements NIMs Gross Stage 3 Net Stage 3 CRAR ₹ 8,037 crs ₹ 1,345 crs 5.6% 5.3% 2.4% 30.4% CRAR Q3FY23: ₹ 7,669 crs Q3FY23 : ₹ 522 crs Q3FY23: 6.9% Q3FY23: 7.8% Q3FY23: 3.6% Q3FY23: 33.1% Net Total Income PAT Bra
Slide 5: Key Performance Highlights – Q3FY24 (ICF Standalone)
Key Performance Highlights – Q3FY24 (ICF Standalone) “Your Path To A Better Life” AUM Disbursements NIMs Gross Stage 3 Net Stage 3 CRAR ₹ 5,991 crs ₹ 1,121 crs 5.1% 6.5% 2.8% 30.4% CRAR Q3FY23: ₹ 6,143 crs Q3FY23 : ₹ 415 crs Q3FY23: 6.5% Q3FY23: 9.1% Q3FY23: 4.1% Q3FY23: 33.1% Net Total Income PAT B
Slide 6: Key Performance Highlights – Q3FY24 (IHFPL Standalone)
Key Performance Highlights – Q3FY24 (IHFPL Standalone) “Your Path To A Better Life” AUM Disbursements NIMs Gross Stage 3 Net Stage 3 CRAR ₹ 2,047 crs ₹ 224 crs 7.9% 1.2% 0.9% 66.6% Q3FY23: ₹ 1,526 crs Q3FY23 : ₹ 107 crs Q3FY23: 8.6% Q3FY23: 1.7% Q3FY23: 1.2% Q3FY23: 86.5% Net Total Income PAT Branch
Slide 7: IndoStar 2.0
IndoStar 2.0
Slide 8: Our vision: To become a go-to NBFC in Retail Lending
Our vision: To become a “go-to” NBFC in Retail Lending “Your Path To A Better Life” CV Finance Housing Finance Our wholly-owned subsidiary IndoStar Home Finance We provide financing for New/ Used CV, Construction engages in providing affordable home financing Equipment, Tractor & Used Car solutions
Slide 9: Strategy for INDOSTAR 2.0
Strategy for INDOSTAR 2.0 “Your Path To A Better Life” • Focused on serving the used CV market with higher yields, with focus on SCV and LCV Focus on Higher Yield • Moving branch network into the hinterland, serving customers in tier 3 and tier 4 towns Granular Customer Segments • Branch teams incen
Slide 10: Our Strategic Focus Areas
Our Strategic Focus Areas “Your Path To A Better Life” 01 05 Digitalization Expanding the use of data and systems 02 06 Automating controls and alerts Expanding distribution to minimize risk footprint 03 07 Continuously evolving product Ensuring a robust balance sheet offerings 04 08 Expanding custo
Slide 11: Key Performance Indicators
Key Performance Indicators
Slide 12: Changing Portfolio Mix Driven by Retailisation Strategy
Changing Portfolio Mix Driven by Retailisation Strategy Consolidated “Your Path To A Better Life” Break-up of Asset Under Management (₹ crs) Retailisation Strategy Playing Out 26% 12,054 10,150 8,998 9,658 7,813 8,062 7,726 8,037 365 381 1,543 1,200 1,190 (5%) 1,932 (16%) (15%) (15%) 1,059 734 (5%)
Slide 13: Retailisation Strategy Playing Out
Retailisation Strategy Playing Out Consolidated “Your Path To A Better Life” Disbursements: CL vs Retail (₹ crs) Disbursements: Retail (₹ crs) 6,448 3,505 1,827 4,947 2,098 1,116 1,269 1,345 4,885 61 48 47 564 218 162 171 1,149 579 3,394 3,054 926 2,356 4,885 1,221 1,298 +194% 1,609 1,936 347 1,937
Slide 14: National Footprint Creating Runway for Growth
National Footprint Creating Runway for Growth Consolidated “Your Path To A Better Life” No States 493 Branches Across 22 States 1 HIMACHAL PRADESH – 2 476 493 2 PUNJAB – 10 452 423 427 108 119 3 UTTARAKHAND – 9 99 62 77 4 HARYANA – 11 1 31 27 73 66 38 2 5 NEW DELHI – 2 3 4 6 UTTAR PRADESH- 31 5 315
Slide 15: Declining Non-performing Assets
Declining Non-performing Assets Consolidated “Your Path To A Better Life” Consolidated NPA Trends (%) Total Provisioning as % of Loan Assets Gross Stage 3 Net Stage 3 Stage 3 Provision Coverage Ratio Provisioning as % of Loan Assets 7.8% 56.2% 56.8% 54.2% 53.7% 6.8% 51.5% 6.6% 6.7% 5.3% 3.6% 3.2% 3.
Slide 16: Movement Non-performing Assets
Movement Non-performing Assets “Your Path To A Better Life” IndoStar Capital Finance (%) IndoStar Housing Finance (%) Gross Stage 3 Net Stage 3 Gross Stage 3 Net Stage 3 9.1% 8.1% 7.9% 8.1% 6.5% 4.1% 4.0% 1.7% 3.8% 3.7% 1.2% 1.3% 1.3% 1.2% 1.2% 2.8% 0.9% 1.0% 0.9% 0.9% Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY2
Slide 17: Improving Stage 3 % in FY24
Improving Stage 3 % in FY24 Consolidated “Your Path To A Better Life” Particulars (₹ crs) Q3FY24 Q2FY24 Q1FY24 Q4FY23 Q3FY23 Gross Stage 1 & 2 6,991 6,553 6,905 6,591 6,308 ECL Stage 1 & 2 140 152 292 294 265 Net Stage 1 & 2 6,851 6,401 6,613 6,297 6,043 ECL Provision % 2.0% 2.3% 4.2% 4.5% 4.2% Part
Slide 18: Collection Efficiency
Collection Efficiency Consolidated “Your Path To A Better Life” Collection Overall Collection Collection incl Particulars (₹ crs) EMI Billing EMI collected Billing efficiency % efficiency (incl Overall Collection efficiency Overdue overdue) % % Jan-23 221 180 81.6% 214 96.8% 297 134.3% Feb-23 269 17
Slide 19: Diversified Borrowing Profile Supported by Capital Adequacy
Diversified Borrowing Profile Supported by Capital Adequacy Consolidated “Your Path To A Better Life” Diversified Funding Mix (Dec 2023) Net-worth and Capital Adequacy Capital 8,532 8,760 8,967 8,797 9,878 33% 32% 34% 33% 30% Adequacy* 0% 0% 0% 0% 1% 0% 2% 0% 4% 0% 18% 16% 14% 13% 3,086 3,112 3,151
Slide 20: Credit Rating remains Strong
Credit Rating remains Strong “Your Path To A Better Life” Key Rating Drivers Strong Credit Ratings Borrowing Type Rating Firm Ratings ✓ Demonstrated support from majority shareholders, Brookfield & Everstone CRISIL AA (–) Term Loans CARE AA (–) ✓ Strong capitalisation with healthy net worth base CRI
Slide 21: CV Finance
CV Finance
Slide 22: Industry Overview
Industry Overview “Your Path To A Better Life” GDP growth • Commercial Vehicles are a proxy for economic growth • Provides direct / indirect employment to more than 01 50 Mn people • Over 70% of the goods/ people movement is by Road Regulatory 06 02 Rising changes Interest rates Transport • GDP Grow
Slide 23: Used CV - Business Potential
Used CV - Business Potential “Your Path To A Better Life” Used Vehicle potential ₹ 1.50 Lakh crore per annum Age of Vehicle ---> 10 9 8 7 6 5 4 3 2 1 0 Year FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 MHCV (units) 2,68,263 2,00,618 2,32,755 3,02,397 3,02,529 3,27,254 3,63,888 2,05,851 1,0
Slide 24: Commercial Vehicle Finance
Commercial Vehicle Finance “Your Path To A Better Life” Used Vehicle Average Ticket Size of AUM of ₹ 4,850 crs Disbursement of 98% in ₹ 8.2 Lakhs Q3FY24 vs 95% in Q2FY24 Average Loan to Value Disbursements Yield (including Presence across Ratio is 73.0% in Q3FY24 processing fees) ~18.9% 22 States vi
Slide 25: CV Finance : Key Operational Parameters
CV Finance : Key Operational Parameters “Your Path To A Better Life” AUM (₹ crs) AUM Mix (Geography –Wise) (%) 4,850 North 4,383 3,928 23% 23% South 3,469 3,672 East West 21% 33% Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Average Ticket Size (₹ lakhs) Loan to Value (%) 8.3 78.0% 8.2 7.6 74.0% 72.7% 73.0% 6.
Slide 26: CV Finance : Key Operational Parameters
CV Finance : Key Operational Parameters “Your Path To A Better Life” Disbursements (₹ crs) Disbursements Yield (%) * 1,074 1,000 19.8% 755 19.1% 18.8% 18.9% 18.7% 657 334 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 * Including processing fees Disbursement Mix (Product) (%)
Slide 27: Impact of IT projects on employee productivity
Impact of IT projects on employee productivity “Your Path To A Better Life” Digitization: Early impact on sales productivity Loan value disbursed/salesperson/month (INR lakhs) Driven by new Loan Origination System (LOS) launch in March’23 Key features that reduced processing time: +73% 45 One-click:
Slide 28: IndoStar Home Finance Private Limited
IndoStar Home Finance Private Limited
Slide 29: Indian Affordable Housing Finance Market Expected To Show Significant Growth
Indian Affordable Housing Finance Market Expected To Show Significant Growth “Your Path To A Better Life” Ticket Size (Rs) Players in Indian Mortgage Market Increasing Penetration in LIG & EWS Segments to Drive Growth 69% 41% Average LTS Affordable Housing Market MIG & Comprises of loans with ticket
Slide 30: Future Ready to Seize Affordable Housing Market Opportunity
Future Ready to Seize Affordable Housing Market Opportunity “Your Path To A Better Life” Ecosystem Play Remote access to customers through Home Hub app Fully enabled payment methods for customer leading to cash component using 3-4% of overall transactions Geographical Focus Robust Underwriting Geogr
Slide 31: Affordable Home Financing Solutions
Affordable Home Financing Solutions “Your Path To A Better Life” IndoStar Home Finance Private Limited Salaried: 49% and Self Portfolio Average AUM of ₹ 2,047 crs Employed 51% Ticket Size of ₹ 9 Lakhs HF:68% and LAP: 32% Blended Yield ~15.1% Presence across Average Loan to Value Gross Stage 3 of 1.2
Slide 32: Focusing on Growing Housing Finance Book
Focusing on Growing Housing Finance Book “Your Path To A Better Life” Housing Finance – AUM Housing Finance – Disbursements (₹ crs) (₹ crs) 2,047 221 224 1,894 1,741 190 183 1,623 1,526 107 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2FY24 Q3FY24 31
Slide 33: Housing Finance : Key Operational Parameters
Housing Finance : Key Operational Parameters “Your Path To A Better Life” Average Ticket Size (₹ lakhs) Live Accounts 26,216 24,095 8.9 9.0 9.0 9.0 21,975 7.5 20,162 18,409 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Loan to Value (%) Geographical Distribution (Value –Wise)
Slide 34: Housing Finance : Key Financial Parameters
Housing Finance : Key Financial Parameters “Your Path To A Better Life” AUM (₹ crs) Gross Stage 3 & Net Stage 3 (%) +25% 2,047 1,894 1,741 1.9% 1.8% 1,623 1,406 1.4% 1.3% CRAR 1.2% 1.3% 1.2% 996 1.1% 832 0.8% 0.9% 0.9% 0.9% Gross Stage 3 66.6% 1.0% Net Stage 3 Q3 FY24 0.7% FY 20 FY 21 FY 22 FY23 Q1F
Slide 35: Catering to Underpenetrated Segments Across Product Types
Catering to Underpenetrated Segments Across Product Types “Your Path To A Better Life” Characteristics Salaried Self Employed Textile loom workers Retail workers Small traders Kirana shop owners FMCG workers School teachers Tea & snack vendors Vegetable vendors Profession Small time Micro scale milk
Slide 36: Process Excellence: Credit & Underwriting
Process Excellence: Credit & Underwriting “Your Path To A Better Life” Evaluation of Profile and Property Risk • Collecting KYCs -Aadhar, PAN, Credit history checks with bureaus. Assessment of LTV, FOIR Excluded from • Assessment of employment / business Portfolio stability • Banking Flows, establ
Slide 37: Process Excellence: Collections & Monitoring
Process Excellence: Collections & Monitoring “Your Path To A Better Life” Collection Process Pre Bounce / Delinquency Post Bounce / Delinquency • Use of Bounce prediction tool which provides with the pool of • Cases are allocated to branch sales RM/collections officers customers with high probabilit
Slide 38: Analytics driven Risk Management to control Delinquency
Analytics driven Risk Management to control Delinquency “Your Path To A Better Life” Key Risk Management Aspects Monitored ✓ Robust dashboards developed in the system to enable real time monitoring of mentioned parameters Roll Rate Analysis Lagged Bounce Rate Analysis ✓ Dashboards are sent to branch
Slide 39: Financial Performance
Financial Performance
Slide 40: ICF Standalone - Income Statement
ICF Standalone - Income Statement “Your Path To A Better Life” Particulars (₹ in crs) Q3FY24 Q2FY24 Q-o-Q Q3FY23 Y-o-Y 9MFY24 9MFY23 Y-o-Y Revenue from operations 238.1 234.2 237.2 713.5 732.9 Interest expenses 145.3 140.8 120.7 419.2 383.8 Net Interest Income 92.8 93.4 (1%) 116.5 (20%) 294.3 349.2
Slide 41: ICF Standalone - Balance Sheet
ICF Standalone - Balance Sheet “Your Path To A Better Life” Equity & Liabilities (₹ in crs) Dec’23 Sep’23 Dec’22 Assets (₹ in crs) Dec’23 Sep’23 Dec’22 Financial Liabilities Financial Asset Trade payables 0.0 0.1 0.7 Cash and cash equivalents 386.3 110.4 216.0 Bank balance other than cash & cash equ
Slide 42: HFC - Income Statement
HFC - Income Statement “Your Path To A Better Life” Particulars (₹ in crs) Q3FY24 Q2FY24 Q-o-Q Q3FY23 Y-o-Y 9MFY24 9MFY23 Y-o-Y Revenue from operations 68.1 79.0 45.5 206.4 157.7 Interest expenses 27.1 24.4 16.1 74.2 47.5 Net Interest Income 41.0 54.6 (25%) 29.4 40% 132.2 110.2 20% Other Income (0.0
Slide 43: HFC - Balance Sheet
HFC - Balance Sheet “Your Path To A Better Life” Equity & Liabilities (₹ in crs) Dec’23 Sep’23 Dec’22 Assets (₹ in crs) Dec’23 Sep’23 Dec’22 Financial Liabilities Financial Asset Trade payables 0.3 23.3 0.0 Cash and cash equivalents 206.0 11.3 3.1 Debt Securities 27.5 31.3 0.0 Bank balance other tha
Slide 44: Consolidated - Income Statement
Consolidated - Income Statement “Your Path To A Better Life” Particulars (₹ in crs) Q3FY24 Q2FY24 Q-o-Q Q3FY23 Y-o-Y 9MFY24 9MFY23 Y-o-Y Revenue from operations 306.2 313.3 281.3 918.6 889.2 Interest expenses 172.4 165.2 135.4 492.0 429.8 Net Interest Income 133.8 148.1 (10%) 145.9 (8%) 426.7 459.3
Slide 45: Consolidated - Balance Sheet
Consolidated - Balance Sheet “Your Path To A Better Life” Equity & Liabilities (₹ in crs) Dec’23 Sep’23 Dec’22 Assets (₹ in crs) Dec’23 Sep’23 Dec’22 Financial Liabilities Financial Asset Trade payables 0.0 0.1 0.7 Cash and cash equivalents 597.0 126.3 223.7 Debt Securities 2,857.6 2,579.3 681.2 Ban
Slide 46: Historical - Consolidated Income Statement
Historical - Consolidated Income Statement “Your Path To A Better Life” Particulars (₹ in crs) FY23 FY22 FY21 FY20 Revenue from operations 1,174.3 1,162.7 1,279.8 1,597.5 Interest expenses 580.3 539.5 708.6 863.4 Net Interest Income 594.0 623.2 571.2 734.1 Other Income 5.3 11.6 7.4 1.5 Total Income
Slide 47: Historical - Consolidated Balance Sheet
Historical - Consolidated Balance Sheet “Your Path To A Better Life” Assets (₹ in crs) Mar’23 Mar’22 Mar’21 Mar’20 Financial Asset Cash and cash equivalents 179.7 80.3 279.2 168.4 Bank balance other than cash & cash equivalent 236.0 409.4 241.0 376.7 Loans 6,515.7 7,706.9 7,139.3 8,293.1 Investments
Slide 48: Historical - Consolidated Balance Sheet
Historical - Consolidated Balance Sheet “Your Path To A Better Life” Equity & Liabilities (₹ in crs) Mar’23 Mar’22 Mar’21 Mar’20 Financial Liabilities Trade payables 7.9 2.7 3.9 11.1 Debt Securities 1,108.9 1,977.9 2,012.8 2,089.5 Borrowings other than debt securities 4,539.2 4,245.5 3,994.8 5,052.5
Slide 49: Ownership Structure and Management Team
Ownership Structure and Management Team
Slide 50: Large Global Private Equity Parentage
Large Global Private Equity Parentage “Your Path To A Better Life” Shareholding Pattern (As on December 2023) 21.84% Shareholders % 1.33% Promoters 74.99 BCP V Multiple Holdings Pte Ltd 56.20 1.84% (Brookfield) Everstone Group 18.79 74.99% Domestic Institutional Investors 1.84 ICICI Prudential Life
Slide 51: Experienced Management Team - IndoStar
Experienced Management Team - IndoStar “Your Path To A Better Life” Karthikeyan Srinivasan Vinodkumar Panicker Shreejit Menon Chief Executive Officer - ICF Chief Financial Officer - ICF Chief Executive Officer - HFC o He has over 25 years of experience in the areas of Retail Sales, o He has a career
Slide 52: Esteemed Board of Directors
Esteemed Board of Directors “Your Path To A Better Life” BOBBY PARIKH Naina Krishna Murthy Non-Executive Independent Director Chairman and Non-Executive Independent Director o She has more than two decades of experience in the legal o He has nearly three decades of experience in financial services s
Slide 53: Esteemed Board of Directors
Esteemed Board of Directors “Your Path To A Better Life” Dhanpal Jhaveri Aditya Joshi Non–Executive Director Non-Executive Director o He has over two decades of experience in investments, strategy, o He is a Managing Partner at Brookfield, responsible for the M&A and investment banking. Currently, h
Slide 54: Thank You
COMPANY “Your Path To A Better Life” Indostar Capital Finance Limited CIN: L65100MH2009PLC268160 Email: investor.relations@indostarcapital.com Website: www.indostarcapital.com Thank You INVESTOR RELATIONS ADVISORS Orient Capital (a division of Link Group) Mr. Nikunj Jain Mr. Amar Yardi +91 976906060
IndoStar Capital Finance — Q3 FY2024 Earnings Presentation on 6ix