Arman Financial Services Limited · NSE:ARMANFIN
Arman Financial Services — Q3 FY22 Earnings Presentation
39 slides from Arman Financial Services's earnings presentation, Feb 16, 2022
Slide 1: Cover letter to stock exchanges
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Registered Office: 502-503, SAKAR III, OPP. OLD HIGH COURT,
Slide 2: Q3 & 9M FY22 Investor Presentation
INVESTOR PRESENTATION FY19 Arman Financial Services Ltd. Q3 & 9M FY22 - Investor Presentation February 2022
Slide 3: 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
Slide 4: Contents
CONTENTS 04 Performance Update – Q3 & 9M FY22 17 Liability Overview 20 Company Overview 29 Product Overview 34 Annexures
Slide 5: Financial Performance Update – Q3 & 9M FY22
Financial Performance Update – Q3 & 9M FY22
Slide 6: Q3 FY22 – Financial Performance Highlights
Q3 FY22 – Financial Performance Highlights Total AUM up by 45% YoY to INR 10,446 Mn in Q3FY22 vs INR 7,200 Mn in Q3FY21 ✓ We have added more than 35,000 new customers in Q3 FY22 and more than 50,000 new customers added since July 22 Shareholders Equity Stood at INR 2,021 Mn in Q3 FY22 ✓ Consolidated
Slide 7: Update on Collections
Update on Collections Update on Collections ❑ Collections in all the segments were healthy and remained above 92% during the quarter in spite of the pervasive Omicron variant • ‘Microfinance’ collections was healthy and steady and remained above 92% during every month of Q3 FY22. • 2W and MSME colle
Slide 8: Update on Liquidity & Disbursements
. Update on Liquidity & Disbursements Update on Liquidity ❑ Healthy Liquidity position with INR 1,264 Mn in cash/bank balance, liquid investments, and undrawn CC limits • The company has duly repaid all the debt obligations that were due in Q3 FY22. • ALM continues to remain positive, and the compan
Slide 9: Q3 & 9M FY22 – Consolidated Profit & Loss Statement
Q3 & 9M FY22 – Consolidated Profit & Loss Statement Particulars (INR Mn) Q3 FY22 Q3 FY21 YoY (%) 9M FY22 9M FY21 YoY (%) Assets Under Management (AUM) 10,446 7,200 45% 10,446 7,200 45% Disbursements 2,965 1,819 63% 6,845 2,345 192% Shareholder’s Equity * 2,021 1,843 10% 2,021 1,843 10% Income from O
Slide 10: Q3 FY22 - Consolidated Performance Update
Q3 FY22 - Consolidated Performance Update AUM (INR Mn) Disbursement (INR Mn) Gross Total Income (INR Mn) 10,446 2,965 9,083 2,752 2,665 8,144 7,848 587 7,200 1,819 497 508 479 443 1,216 Q3FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3
Slide 11: Q3 & 9M FY22 – Consolidated Balance Sheet
Q3 & 9M FY22 – Consolidated Balance Sheet Particulars (in INR Mn) Consolidated Standalone Consolidated Standalone ASSETS Dec 2021 March 2021 Dec 2021 March 2021 LIABILITIES & EQUITY Dec 2021 March 2021 Dec 2021 March 2021 Financial Assets Equity Share capital 85 85 85 85 Cash and cash equivalents 48
Slide 12: Microfinance “Namra” Performance Update
Q3 & 9M FY22 – Microfinance “Namra” Performance Update Particulars (INR Mn) Q3 FY22 Q3 FY21 YoY (%) 9M FY22 9M FY21 YoY (%) Asset Under Management 8,557 5,487 56% 8,557 5,487 56% ❖ Q3 FY22 MFI AUM stood at INR 8,557 Mn – higher by 56% vis-à-vis last year Disbursements 2,421 1,473 64% 5,606 1,878 198
Slide 13: Q3 FY22 - Microfinance Performance Update
Q3 FY22 - Microfinance Performance Update AUM (INR Mn) Disbursement (INR Mn) Gross Total Income (INR Mn) 8,557 7,417 6,431 2,297 2,421 6,307 2,200 5,487 428 1,473 367 376 332 309 985 Q3FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY2
Slide 14: Q3 FY22 – Microfinance Performance Update
Q3 FY22 – Microfinance Performance Update Yields % and NIM % Cost-to-Income Ratio % 23.6% 22.6% 22.2% 22.0% 21.5% 27.5% 27.5% 28.0% 26.2% 23.2% 13.8% 13.1% 13.3% 12.9% 11.5% Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Yields % NIM % Cost / Income (%) Asset Quality
Slide 15: Standalone Performance Update (2W & MSME)
Q3 & 9M FY22 – Standalone Performance Update (2W & MSME) Particulars (INR Mn) Q3 FY22 Q3 FY21 YoY (%) 9M FY22 9M FY21 YoY (%) Asset Under Management 1,889 1,713 10% 1,889 1,713 10% ❖ Standalone AUM stood at INR 1,889 Mn on 31st December 2021 Disbursements 543 346 57% 1,239 467 166% • MSME AUM increa
Slide 16: Q3 FY22 - MSME Performance Update
Q3 FY22 - MSME Performance Update AUM (INR Mn) Disbursements (INR Mn) Gross Interest Income (INR Mn) 1,395 1,253 1,247 1,169 1,131 379 380 353 240 102 99 108 93 96 160 Q3 FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Asset Quality# Y
Slide 17: Q3 FY22 - 2W Performance Update
Q3 FY22 - 2W Performance Update AUM (INR Mn) Disbursement (INR Mn) Gross Interest Income (INR Mn) 544 494 459 410 419 163 105 112 37 76 71 31 30 30 31 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Asset Quality Yields % 26.8%
Slide 18: Liability Overview
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Slide 19: Efficient Liability Management
Efficient Liability Management Funding profile is well diversified with increase in share of funds from NCDs & DFIs FY21 - Borrowing Mix % Q3 FY22 - Borrowing Mix % INR 7,665 Mn * INR 8,789 Mn * Banks & SFBs 2% 1% 18% DFIs (NABARD, MUDRA & SIDBI) 21% 27% 32% NBFC / FI 5% 6% Securitization 7% 7% 13%
Slide 20: Lending partners
Lending partners Bank Borrowings Non-Bank Borrowings Securitization Partners NCDs & ECB 22 19
Slide 21: Company Overview
Company Overview
Slide 22: 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
Slide 23: 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
Slide 24: Product Snapshot
Product Snapshot • 29 years of existence • Active customer base of 3.91 lakh • Employee strength of 2,131 employees • Completely in-house operations – Sourcing, Credit & Collections Microfinance MSME Loans 2-Wheeler Loans Rural 2W Loans % of Total AUM 82% 13% 5% 1% (in Pilot Stage) LTV Unsecured Cas
Slide 25: 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
Slide 26: 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
Slide 27: Strong Growth in AUM & Disbursements
Strong Growth in AUM & Disbursements….. Total AUM (INR Mn) 10000 • Diversified portfolio of 10,446 Mn in Q3 FY22 split between – 10000 9000 • Microfinance: INR 8,557 Mn (81.9%), 8,599 8,144 8000 • MSME Loans: INR 1,395 Mn (13.4%) 8000 17% 6,847 15% 7000 • 2-Wheeler Loans: INR 494 Mn (4.7%) 11% 6% •
Slide 28: 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: 37% CAGR: 36% 6.7% 2,152 Demonetization 1,933 28.7% 28.3% 27.4% 4.6% 1,411 1,
Slide 29: Shareholding Pattern
Shareholding Pattern SHAREHOLDING – 31st December 2021 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% ▪ M
Slide 30: Product Overview
MSME EOANS > Product Overview
Slide 31: Product Overview: Microfinance
Product Overview: Microfinance Product Overview FY21 – Key Metrics (Mn) ▪ JLG model with small ticket loans (Avg. Ticket Size – INR 6,431 4,176 35,000) given to women borrowers for income generating activities such as Livestock, Dairy, Agri allied, Kirana Stores AUM (INR Mn) Disbursement (INR Mn) ▪
Slide 32: Product Overview: 2W & Rural 2W Loans
Product Overview: 2W & Rural 2W Loans Product Overview FY21 – Key Metrics (Mn) ▪ Hypothecation (secured) loans given to self-employed / cash- 459 246 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
Slide 33: 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
Slide 34: Investor relations contacts
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
Slide 35: Annexures
Annexures
Slide 36: Microfinance: 5-Year Performance
Microfinance: 5-Year Performance Disbursement growth is driven by customer & branch addition AUM growth exceeds MFI industry growth rates 3.0 900.0 800.0 Demonetization 2.24 2.32 6,431 Demonetization 6,207 2.5 700.0 2.0 1.70 600.0 4,837 500.0 1.5 1.13 400.0 3,170 0.74 653 1.0 590 300.0 400 418 200.0
Slide 37: Microfinance: 5-Year Performance
Microfinance: 5-Year Performance Well diversified across geographies Maintaining high operational efficiency MFI AUM Mix (%) Demonetization 2% 1% 1% 6% 1% 61% 7% 9% 5% 21% 20% 56% 17% 18% 18% 48% 13% 43% 45% 21% 21% 18% 21% 27% 72% 25% 27% 44% 31% 27% 27% FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20
Slide 38: 2W Loans: 5-Year Performance
2W Loans: 5-Year Performance Yields (%) & NIM (%) Trend Arman 2W AUM/ has seen steady growth over FY15-20 1200.0 1000.0 25.7% 25.5% 30.0% 24.9% 23.9% 24.4% 800.0 25.0% COVID-19 600.0 20.0% 1,017 955 15.0% 18.4% 900 15.6% 16.5% 400.0 738 10.0% 14.8% 14.0% 200.0 459 5.0% 0.0% 0.0 FY17 FY18 FY19 FY20 F
Slide 39: MSME Loans: 5-Year Performance
MSME Loans: 5-Year Performance Disbursement Growth AUM Growth 3500 33000 1,433 30000 3000 27000 24,586 1,254 2500 992 24000 21000 2000 18000 16,284 11,246 15000 1500 12000 9,756 461 1000 9000 1,362 1,054 6000 978 500 61 3000 527 674 0 64 0 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Arman MSME
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