Northern Arc Capital Ltd. · NSE:NORTHARC
Northern Arc Capital — Q1 FY25 Earnings Presentation
37 slides from Northern Arc Capital's earnings presentation, Oct 1, 2024
Slide 1: Exchange filing cover letter
+ v N®RTHERN ARC Ref No.: NACL/01/0CT/2024-25 October 01, 2024 To, To, BSE Limited, National Stock Exchange of India Ltd., Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block G, Dalal Street, Bandra Kurla Complex, Mumbai- 400001 Bandra (E) Scrip Code: 544260 Mumbai — 400 051 Scrip Symbol: NORTHARC
Slide 2: Investor Presentation - Q1FY25
Great Place To Work. Certified 5 202478 2025 [ N®RTHERN CF ARC YWYy gy mininh AHF Agri Investor Presentation - QIFY25 Listed at (S QONSE BSE"”
Slide 3: Disclaimer
‘Disclaimer > v "This presentation and accompanying slides (the “Presentation”) has been prepared by Northern Arc Capital Limited (*“Company”) to be presented during the analyst call as required under Regulation 46 (2)(0) of the SEBI (LODR) Regulations, 2015, and is not for release, distribution or
Slide 4: Agenda
Northern Arc At a Ol Glance 0 Business Growth Robust Risk 03 Management 04 Technology Stack Financial 05 Liability Franchise Performance Board and o7 Management Way Forward
Slide 5: Northern Arc At a glance
Northern Arc At a glance... 5 + N®RTHERN ARC
Slide 6: Differentiated & Unique Platform Play in India's Retail Credit Market
Differentiated & Unique Platform Play in India’s Retail Credit Market Financing the Retail Credit Needs of India’s + v No RTHERN Focused Sectors bea L — @ 1 MSME MFI CF VF AHF Agri Loans to cater to consumers across the lifecycle Reaching the end customer through a ‘ ...Through Tech & Data enabled P
Slide 7: Expanding Relationships & Distribution reach to scale customer base
Expanding Relationships & Distribution reach to scale customer base 1 Strong Distribution Network through... Own Branches 0.0% 671 Districts 0% 3.7% 0... 343 +137 — 1% 2a% o... Partnerships 28 States I Originator t Partners +36 7 Union A Represents states where NACL hos Retail Lending Territories br
Slide 8: Diversification at the core of our business
Diversification at the core of our business ation provides Re: MSME i MFI 1 CF rguu VF AHF Agri INR 4,579 Cr INR 2,604 Cr INR 3,441 Cr INR 713 Cr INR 380 Cr INR152 Cr AUM Self-employed Micro-entrepreneurs Salaried, Self Salaried and self- Salaried, Self Farmers & Farmer Customer cusiomens)wholesals
Slide 9: Data and Collection Platform which creates strong network effects
Data and Collection Platform which creates strong network effects 1 Multi-channel approach that has impacted over 101 million+ lives across focus sectors through a ‘digital & data first’ approach A flywheel re-generating flows across the ecosystem nimbus T 1,150+ UpaId jo Al ddns [J] Originator part
Slide 10: Northern Arc Business Growth
Northern Arc Business Growth... Y’ N®RTHERN ARC
Slide 11: Demonstrated consistent growth in business and profitability
Demonstrated consistent growth in business and profitability Robust growth in Balance sheet with focus on granularization Assets Under Management (INR crore) e Jun-21 30.5% CAGR Sinc 6979 1,869 : 7,044 5,341 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 A
Slide 12: Northern Arc - High Performing Matrix
Northern Arc - High Performing Matrix INR 7,616 Cr INR 11,869 Cr Key GTV Lending AUM INR 2,770 Cr Outcomes Fund AUM A 8% A 2% o 335 51 yfis 343 I][”]I] Originator Retail Lending Branches Partners Partners A 137 A +36 A = INR 93 Cr 14.7% Return Parameters PAT (excluding NCI) RoE A43% A 145bps INR 495
Slide 13: Across multiple channels of the business
Across multiple channels of the business Gross Transaction Volume Growth in Disbursements Placements Volume Gross Transaction Volume (INR crore) Disbursements (INR crore) Placements Volume (INR crore) > CAGR 32.1% CAGR 56.4% I I ) l l B QIFY22 QIFY23 QIFY24 QIFY25 QIFY22 QIFY23 QIFY24 QIFY25 QIFY22
Slide 14: Balance Sheet Growth led through diversification and granularization
Balance Sheet Growth led through diversification and granularization v Assets under Management - By Source Assets under Management - By Sector INR Crore /% INR Crore /% 1,869 1,869 CAGR 30.5% 10% 8,979 8,979 29% 10% 52% 7,044 7,044 24% 45% 16% 22% 5341 2 5,341 21% 24% 28% 8% 25% 30% Jun-21 Jun-22 Ju
Slide 15: Enhanced Efficiency for better profitability
& Enhanced Efficiency for better profitability Expansion in Risk adjusted NIMs driven by proactive risk Retail expansion coming at a Robust Growth in Profita management and marginal increase in cost and superior return matrix granularization of portfolio A Risk Adjusted NIMs® No. of Branches, No. of
Slide 16: Risk Management
Northern Arc Risk Management 5 + N®RTHERN ARC
Slide 17: Robust Risk Management Framework and in-house collections infrastructure
Robust Risk Management Framework and in-house collections infrastructure v Supported by Independent collections & Analytics and Risk nal Risk Management Practice ecosystem Modelling - Pre due reminders to the 35.2mn data points® SUE SIS collected over a decade 01 0-15 . Strategic Credit xo'z . DPD /
Slide 18: Driving Quality Portfolio with One of the Lowest Industry-wide NPAs
Driving Quality Portfolio with One of the Lowest Industry-wide NPAs driving asset quality & low credit costs Sector Diversification Asset Quality Drivers Granular Portfolio Exposure (in terms of AUM) '\E Proprietary Scorecards for towards Top 10 borrowers reduced Underwriting MSME MFI Vehicles from
Slide 19: Northern Arc Robust Technology Stack
Northern Arc Robust Technology Stack v N®RTHERN ARC
Slide 20: Leveraging Technology Stack
Leveraging Technology Stack Empowering Multifold growth throu Configurable Workflows and Data, Dashboards, and Reports Processes Seamless End to end Journey Data driven insights powered by Lake Integrated LMS NORTHERN ARC Configurable reports Fully customizable BREs TECH PLATFORM Customizable dashbo
Slide 21: Liability Franchise
Northern Arc Liability Franchise v N®RTHERN ARC
Slide 22: Diversified Sources of Funding and Proactive Liquidity Management
Diversified Sources of Funding and Proactive Liquidity Management Total Borrowing Mix as on June'24 Data as of June 30 2024 ICRA Credit Ratings Domestic retail / HNIs , g 2% 48 Sfi)l NBFCs, 9% ‘ Lender Relationships (Stable) A+ e June’24 (Stable) 3.25yrs Beeree Offshore Fi d Avg Tenure of Borrowings
Slide 23: Northern Arc Financial Performance
Northern Arc Financial Performance Y’ N®RTHERN ARC
Slide 24: Key Financial Matrix
Key Financial Matrix v Revenue From Operations 0" Net Interest Margin @* Yields, COF, Spreads @* Revenue from Operations (INR crore) 16.9% 17.5% 13.9% 14.1% CAGR 37.3% 495 9.1% 7.6% g2 5.6% 43% QIFY22 QIFY23 QIFY24 QIFY25 QIFY22 QIFY23 QIFY24 QIFY25 QIFY22 QIFY23 QIFY24 QIFY25 u Portfolio yield mCoF
Slide 25: Key Financial Matrix
Key Financial Matrix v Improving Return Ratios Capital Adequacy Net worth & Borrowings Return Metrics (ROA, ROE) Net worth and Borrowings (INR crore) ® Networth ®mBorrowing mRoA mRoE 14.7% =110 13.3% n.0% 8.6% d = J J I I I - QIFY22 QIFY23 QIFY24 QIFY25 June21 June22 June23 June24 June21 June22 June
Slide 26: Portfolio Quality
Portfolio Quality o o R (;/rore/ Assets under Management Assets under Management (%) ECL : Expected Credit Loss ECRLE prowsws:acgo:erage for each b By Staging JL2|:1- Jun-22 Jun-23 Jun-24 Jun-21 Jun-22 Jun-23 Jun-24 Jun-21 Jun-22 Jun-23 Jun-24 Jun-21 Jun-22 Jun-23 Jun-24 Stage | 5N4 6,881 8,545 11,0
Slide 27: Consolidated Income Statement
Consolidated Income Statement v INR crore Q1FY22 | Q1 FY23 | Q1 FY24 | Q1 FY25 | Growth Growth%|Q4 FY24| FY24 Interest income* 173 240 358 481 123 34% 427 1,582 Interest expense 95 125 164 209 45 28% 204 725 Net Interest Income 79 ns 194 272 40% 224 857 Fee & Other Income 21 17 9 25 36% 42 103 Net R
Slide 28: Financial Dupont
Financial Dupont Particulars Q1 FY22|Q1FY23|Ql1FY24|Ql FY25;Q4 FY24| FY24 Interest Income* 12.2% 12.2% 152% 162% | 152% 15.3% Interest Expense 6.7% 6.4% 7.0% 7.0% E 7.2% 7.0% Net Interest Income 5.5% 5.8% 8.3% 9.1% : 8.0% 8.3% Fee and Other Income 1.4% 0.8% 0.8% 0.8% i 1.5% 1.0% Net Revenue 7.0% 6.7
Slide 29: Balance Sheet
Balance Sheet INR crore Q1FY22 | QIFY23 | Q1FY24 | QIFY25 ; FY24 Assets Financial assets Cash and bank balances Loans Investments Other financial assets Non-financial assets Total assets Liabilities and equity Financial liabilities Borrowings & Debt Securities Other financial liabilities Other non-f
Slide 30: Northern Arc Board & Management
Northern Arc Board & Management v N®RTHERN ARC
Slide 31: Experienced and Professional Management Team
Experienced and Professional Management Team Pardhasaradhi Rallabandi Atul Tibrewal Saurabh Jaywant Group Risk Officer & Governance Chief Financial Officer Chief Legal Officer Head 19+ years of experience 21 Years of experience 23 years of experience Gaurav Mehrotra Gaurav Ajit Shukla Umasree Parvat
Slide 32: Distinguished Board and Marquee Investors Driving Strong Governance
Distinguished Board and Marquee Investors Driving Strong Governance 1 Mr. P S Jayakumar Ms. Anuradha Rao Mr. Ashutosh Arvind Pednekar Mr. Arunkumar N.T. Chairman & Non-Executive Non-Executive Non-Executive Non-Executive Independent Director Independent Director Independent Director Independent Direc
Slide 33: ESG Focused Business Model Positively Impacting 101 Mn+ Lives
ESG Focused Business Model Positively Impacting 101 Mn+ Lives 1 IVCA Award Impact Assets 50 for Social Impact Featured Consistently in 2023 since 2021 . - . Robust ESG Framework with Effective Tools & Regular UNSDG( Alignment Built into the Business Model o s 9 Monitoring - Committed to responsible
Slide 34: Northern Arc Way Forward
Northern Arc Way Forward v N®RTHERN ARC
Slide 35: Way Forward
Way Forward v g the Credit Needs of Ind Underserved Households & Businesses by Credit-first and Customer- Data and technology A Diversified Platform Centric Culture driven < One of the leading players in < Expand presence in Direct to < Focus on improving credit quality < Managing customers through
Slide 36: Mission and Vision
Mission and Vision o(?o [AN @, Addressing a Large Addressable Market and Underpenetrated Market with Strong Sectoral 4dh Expertise Our Vision is to be a trusted To enable access to finance platform that enables the for the underbanked in an Large Ecosystem of Partners and Data and Technology flow of
Slide 37: Thank You
Thank You 5 + N®RTHERN ARC