Satin Creditcare Network Ltd · NSE:SATIN

Satin Creditcare Network — Q4 FY2017 Earnings Presentation

68 slides from Satin Creditcare Network's earnings presentation, May 2017

  1. Slide 1: Satin Creditcare Network Limited Investor Presentation 4Q FY17

    SATIN CREDITCARE NETWORK LIMITED INVESTOR PRESENTATION - 4Q FY17 MAY 2017 BSE: 539404 | NSE: SATIN | CSE: 30024 Corporate Identity No. L65991DL1990PLC041796

  2. Slide 2: Disclaimer

    Disclaimer By accessing this presentation, you agree to be bound by the following terms and conditions. This presentation (which may reflect some price sensitive information in terms of SEBI regulations and Companies Act, 2013, as amended from time to time) has been prepared by Satin Creditcare Netw

  3. Slide 3: Contents

    Contents Details Corporate Overview 3 Product Portfolio 7 Highlights of Mar’17 Performance 12 Impact of Demonetization – SCNL 18 Impact of Demonetization – TSL 26 Digital Transformation and Cashless Disbursements 28 Key Investment Thesis 32 Annexure Financial & Operational Details – Consolidated 48

  4. Slide 4: Corporate Overview

    Corporate Overview

  5. Slide 5: Company Overview

    Company Overview  Satin Creditcare Network Ltd. (‘Satin’ or ‘SCNL’) is India’s third largest Microfinance Shareholding Pattern – April 30, 2017 Institution (MFI) in terms of Gross Loan Portfolio (Mar’17)* with a strong presence in North India Other Promoters and 21.50% promoter group  Listed on CS

  6. Slide 6: Key Milestones

    Key Milestones  Reaches 2.65 mn(A) active clients and gross AUM of  Raised Rs. 2.50 bn via QIP in Rs.40,665.98 mn(A) as on Mar’17 Oct’16  Satin raises USD 10 mn from ADB – making this ADB’s  Reaches 0.17 mn active clients and  CARE Ratings upgraded LT Bank first direct equity investment in a NB

  7. Slide 7: Select Accolades & Key Highlights

    Select Accolades & Key Highlights  Announced Winner of “Best NBFC-MFI Award” & Award by Client Protection Certificate Runner-up for “CSR Initiatives & Business Responsibility MF Transparency Organization Smart Campaign - 2016 Award” in NBFC-MFI category– CIMSME Banking and NBFC Awards 2016  Receiv

  8. Slide 8: Product Portfolio

    Product Portfolio

  9. Slide 9: Product Portfolio – Details

    Product Portfolio – Details Business Correspondent MFI Segment(1) Non-MFI Segment services(2) Product Financing Product features as on Mar’17 MFI Lending Loans to MSME(3) TSL(4) (Loan for Solar lamps) Start Date May’08 (JLG) Oct’15 Apr ‘16 May’12(4) Rs. 100,000 – Rs. Rs. 15,000 – Rs. 35,000 Ticket S

  10. Slide 10: Product Portfolio - Diversification Underway

    Product Portfolio - Diversification Underway(1)  Started operations in 1990 with an objective to provide ‘doorstep’ credit and savings services to individual businesses engaged in productive, trading and services activities in urban areas; gradually forayed into semi-urban and rural areas also  St

  11. Slide 11: Product Portfolio – Other Service Offerings

    Product Portfolio – Other Service Offerings  On Sep 1, 2016, Satin acquired majority stake in TSL which acts as a business correspondent for various banks and provides similar services to other financial institutions in rural and semi-urban areas which have limited access to banking network  Taraa

  12. Slide 12: Further Product Diversification by Entry into Affordable Housing

    Further Product Diversification by Entry into Affordable Housing Rationale for entry into housing finance Target market and segment for Satin Satin’s Board, on 10 Feb’17, approved the formation of a wholly-owned Income Unit Cost of Unit Housing Housing Finance Company and entry into affordable housi

  13. Slide 13: Highlights of Mar'17 Performance

    Highlights of Mar’17 Performance

  14. Slide 14: Highlights of FY17 Performance

    Highlights of FY17 Performance SCNL Consolidated Results – FY17 vs. FY16 Consolidated - Revenue / PAT (Rs. mn) – Gross AUM at Rs. 40.67 bn registered a growth of 24% yoy Revenue PAT – Revenue increased by 43% yoy to Rs. 8.01 bn 8,014.66 – PAT (after minority interest) at Rs. 248.74 mn declined 57% y

  15. Slide 15: Highlights of 4QFY17 Performance

    Highlights of 4QFY17 Performance SCNL Consolidated Results - 4QFY17 Consolidated - Revenue / PAT (Rs. mn) – Gross AUM at Rs. 40.67 bn, growth of 24% yoy and 9% qoq Revenue PAT – Revenue at Rs. 1.75 bn, increase of 1% yoy and a decrease of 20% qoq 163 169 – PAT at Rs. -430.42 mn vs. Rs. 169.06 in 3QF

  16. Slide 16: Operational Highlights

    Operational Highlights Gross Lending Portfolio (Rs. Mn) No. of Branches TSL TSL 40,666 767 32,708 431 36,168** 21,407 618** 267 10,561 199 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 **On standalone basis, excluding TSL **On standalone basis, excluding TSL No. of States of Operation (Standalone) No. of

  17. Slide 17: Operational Highlights (Contd.)

    Operational Highlights (Contd.) No. of Employees No. of Loan Officers TSL TSL 6,910 4,481 3,918 2,698 5,801** 3,711** 2,496 1,710 1,958 1,347 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 **On standalone basis, excluding TSL **On standalone basis, excluding TSL Total no. of Active Clients (Million) JLG lo

  18. Slide 18: Robust Operational Metrics

    Robust Operational Metrics (1) GLP/ Branch – MFI Lending (Rs. Mn) GLP/ Loan Officer – MFI Lending (Rs. Mn) 12.5 12.1 80.2 75.6 9.5 58.0 7.8 8.4 53.1 52.0 FY14 FY15 FY16 FY17 FY17 - FY15 FY16 FY17 FY17 - Industry Industry No. of Clients/ Loan Officer – MFI Lending No. of Clients/ Branch – MFI Lending

  19. Slide 19: Impact of Demonetization – SCNL (Standalone)

    Impact of Demonetization – SCNL (Standalone)

  20. Slide 20: Collections – Strong Recovery from the Lows Post Demonetization

    Collections – Strong Recovery from the Lows Post Demonetization; Focus remains on improving collections Collection trend % – All States 93% 94% 95% 91% 88% 88% 91% 86% 86% 81% 81% 83% 79% 82% 78% 73% 71% 71% 76% 65% 71% 58% 58% 61% 58% 30 Nov'16 31 Dec'16 31 Jan'17 28 Feb'17 31 Mar'17 30 Apr'17 15 M

  21. Slide 21: Collections – Significant Improvement in UP, Bihar Normalcy

    Collections – Significant Improvement registered in UP, Bihar returned to normalcy much faster Uttar Pradesh - Collection trend % 91% 92% 94% 88% 82% 85% 87% 81% 80% 73% 77% 68% 70% 73% 68% 58% 54% 57% 63% 50% 56% 34% 36% 36% 41% 30 Nov'16 31 Dec'16 31 Jan'17 28 Feb'17 31 Mar'17 30 Apr'17 15 May'17

  22. Slide 22: Collections – Recovery Gathers Momentum in MP and Punjab

    Collections – Recovery Gathers Momentum in MP and Punjab Madhya Pradesh - Collection trend % 93% 94% 94% 95% 92% 89% 90% 87% 88% 84% 85% 86% 80% 82% 81% 83% 77% 76% 77% 79% 67% 76% 65% 66% 63% 30 Nov'16 31 Dec'16 31 Jan'17 28 Feb'17 31 Mar'17 30 Apr'17 15 May'17 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Pu

  23. Slide 23: Zero Collections – Clients Staging a Strong Return to Satin

    Zero Collections – Clients Staging a Strong Return to Satin, Willingness to Repay Remains Intact Zero Collection Clients (‘000) 779 481 279 206 167 144 119 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 Apr'17 15 May'17 22,346 Zero Collection Centres 10,392 4,594 3,150 2,682 2,280 1,990 Nov'16 Dec'16 Jan'17 Feb

  24. Slide 24: Disbursements – Slow down post demonetization, return to normal

    Disbursements – Slow down post demonetization, return to normal disbursements since Q4 FY17 Avg. Monthly Disbursements (Rs. mn) 3,728 3,555 969 1H FY17 3QFY17 4QFY17 23

  25. Slide 25: Situation has now Returned to near Normalcy

    Situation has now Returned to near Normalcy Factors Impacting Satin’s Collections and Disbursements Currency Shortage: Shortage was especially severe in Political Interference: The local politicians took the Northern States, poll bound regions, and rural areas advantage of the situation and misguide

  26. Slide 26: Impact on Financials – Interest Reversal and Higher Provisions

    Impact on Financials – Interest Reversal and Higher Provisions impacted profitability Interest Reversal  As per RBI revised guidelines, Satin deferred the classification of existing standard asset as substandard. However, as per Satin’s existing policy and the RBI guidelines, for FY17 Satin has rev

  27. Slide 27: Impact of Demonetization – TSL (Taraashna)

    Impact of Demonetization – TSL (Taraashna)

  28. Slide 28: TSL Collections Returning to Normalcy, Disbursements Recovered

    While Collections for TSL are returning back to normalcy, Disbursements are back to pre-demonetization levels Collection trend % 98% 98% 98% 99% 97% 96% 93% 94% 93% 92% 92% 90% 90% 88% 89% 88% 85% 88% 84% 84% 30 Nov'16 31 Dec'16 31 Jan'17 28 Feb'17 31 Mar'17 30 Apr'17 Nov'16 Dec'16 Jan'17 Feb'17 Mar

  29. Slide 29: Digital Transformation and Cashless Disbursements

    Digital Transformation and Cashless Disbursements

  30. Slide 30: Digital Transformation Expedited and Well Underway

    Digital Transformation Expedited and Well Underway Digital Transformation Underway ADVANTAGES OF NEW SYTSTEM – Implemented across 180 branches Completed • Real Time reporting from the field Migrated to a training for all centralized • A major step towards full automation field staff on database TABs

  31. Slide 31: Complete Revamp of our Cashless Disbursements

    Complete Revamp of our Cashless Disbursements – To help realize operational efficiencies Cashless Disbursements Methodology Previous System KYC and Bank Loan Processing at Confirmation by Disbursement by Client Information RO BM HO Team CSO collects clients Entry of KYC and BM approves HO team UTR n

  32. Slide 32: Successful Pilot of Cashless Disbursements and Scale-up of Cashless Collections

    Successful Pilot of Cashless Disbursements and Further Scale-up of Cashless Collections Cashless Disbursements – Initial Targets for Q4FY17 Cashless Disbursements – Achievement against Target Phase 1 Phase 2 Phase 2 FY18 Pilot phase: Roll-out phase: Roll-out target achieved: Plan Ahead: Pilot phase

  33. Slide 33: Key Investment Thesis

    Key Investment Thesis

  34. Slide 34: Key Investment Thesis

    Key Investment Thesis 1 7 Access to both Experienced debt and equity management sources to support team portfolio growth Widespread presence with 6 Robust internal leadership position 2 audit and risk in underpenetrated management regions having high mechanisms growth potential Robust operational St

  35. Slide 35: Access to both debt and equity sources to support portfolio growth

    1 Access to both debt and equity sources to support portfolio growth (1) Equity Funds Raised  On 21 Apr 2017, successfully raised Rs. 718 mn – Raised Rs. 643 mn from Asian Development Bank (ADB) through issue of equity shares via a preferential allotment – Raised Rs. 75 mn from Promoters, 25% of th

  36. Slide 36: India's Third Largest MFI with Widespread Presence

    2 Satin Creditcare - India’s Third Largest MFI, in terms of GLP, with Widespread Presence (1) With strong presence in North India, Satin is steadily building a pan India presence(1) Jammu & Kashmir (as on Mar'17) GLP (INR mn) 34.05 Himachal Pradesh (as on Mar'17) No. of branches 1 GLP (INR mn) 46.71

  37. Slide 37: Established Presence in Underserved Geographies

    2 Established Presence in Underserved Geographies Leading to Significant Growth Opportunities (1)  Satin is present mostly in states of low MFI penetration  It has significant presence in under-penetrated and high growing markets Key markets for Satin(1) YoY growth in MFI GLP – Mar’17 MFI penetrat

  38. Slide 38: Reducing Concentration in Top Districts Over the Years

    2 Reducing Concentration in Top Districts Over the Years (1) Strategy to reduce concentration in top districts is working as envisioned JLG Portfolio in top districts as % of Gross AUM 27.9% 22.2% 19.9% 15.8% 15.4% 13.1% 10.3% 8.7% 6.9% 5.4% 4.7% 3.6% Mar'14 Mar'15 Mar'16 Mar'17 Top 5 Districts Top

  39. Slide 39: Strengthening Presence in Underserved Geographies through TSL

    2 Strengthening Presence in Underserved Geographies through Acquisition of TSL TSL is serving clients in under penetrated geographies Presence in 8 states – Punjab and Uttar Pradesh have been added during FY17 Punjab (as on Mar17) GLP (INR mn) 82.16 Uttar Pradesh (as on Mar'17) No. of branches 4 GLP

  40. Slide 40: Geographic Diversification – Increasing contribution from New States

    2 Geographic Diversification – Increasing contribution from New States SCNL (1) – Geographic Spread SATIN - STANDALONE GLP FY16 (INR mn) GLP FY17 (INR mn) % Growth YoY % Mix FY16 % Mix FY17 Uttar Pradesh 13,385.28 12,159.21 -9.16% 41% 34% Bihar 5,802.59 6,872.63 18.44% 18% 19% Madhya Pradesh 5,076.5

  41. Slide 41: Strong Client Relationships Built Through Transparent Operations

    3 Strong Client Relationships Built Through Transparent Operations (1)  Track record of over 25 years in microcredit space with comprehensive understanding of the industry and client segment – Rapidly growing operations despite cyclical changes in the economy as well as the MFI space in the past -

  42. Slide 42: Strong and Diversified Lending Relationships

    4 Strong and Diversified Lending Relationships (1) Diversified Lending Portfolio Funds raised (Rs. mn)  Active relationship with 77 banks and financial institutions (Mar’17) Total Funds Raised Debt Funds Raised  Spread across Public Sector Banks, Private Banks, Foreign Banks, 37,317.70 FY17 29,367

  43. Slide 43: Positive ALM Benefit and Strong Liquidity Position

    4 Positive ALM Benefit and Strong Liquidity Position (1)  Benefit of positive ALM mismatch continues  Strong liquidity position provides significant headroom for growth ALM (No. of Months)* Cash and Cash Equivalents (INR mn) 21.5 18.5 18.4 17.2 11,946.41 11,079.34 9.9 9.8 7,097.75 8.4 8.5 Mar'14 M

  44. Slide 44: Robust Operational Performance Over the Years

    5 Robust Operational Performance Over the Years (1) PARTICULARS CAGR % FY14 FY15 FY16 FY17 YoY% Gross AUM (Rs. mn) 50.73% 10,560.55 21,406.50 32,707.60 36,168.33 10.58% No. of districts 34.31% 97 121 215 235 9.30% No. of branches 45.90% 199 267 431 618 43.39% No. of States of operation 16.96% 10 11

  45. Slide 45: Robust Operational Performance Over the Years (Contd.)

    5 Robust Operational Performance Over the Years (1) (Contd.) PARTICULARS FY14 FY15 FY16 FY17 YoY% Product Financing AUM (Rs. mn) - - 112.61 1.22 -98.92% No. of Active Customers - - 190,044 7,495 -96.06% Disbursement during the period (Rs. mn) - - 140.30 22.59 -83.90% No. of loans disbursed during th

  46. Slide 46: Financial Performance

    5 Financial Performance (1) PARTICULARS (Rs. mn) FY14 FY15 FY16 FY17 YoY % Revenue 1,916.55 3,241.56 5,585.21 7,766.67 39.06% PBT 234.13 464.54 875.29 372.01 -57.50% PAT 155.58 317.16 579.41 244.99 -57.72% PAT (post Pref. Dividend) 154.82 308.25 573.52 244.99 -57.28% EPS – Basic 6.83 12.17 20.28 7.1

  47. Slide 47: Robust Internal Audit and Risk Management Mechanisms

    6 Robust Internal Audit and Risk Management Mechanisms Strong Internal Audit Processes and Systems ensure high Portfolio quality Team Structure Full fledged in-house Internal Audit department for Group Lending and MSME  6 member supervisory/support team at Head Office CMD and Audit Committee and a

  48. Slide 48: Organizational Structure

    7 Organizational Structure Board of Directors Chairman cum Managing Director Chief Financial Chief Operating Chief Information Head - Human Head - Internal Audit, Officer Officer Officer Business Head – SME Resources Process and Risk Deputy COO – North 1 (Punjab, Haryana, Rajasthan, Company Secretar

  49. Slide 49: Annexure: Financial & Operational Details - Consolidated

    Annexure Financial & Operational Details - Consolidated

  50. Slide 50: Business Details – Consolidated

    Business Details – Consolidated PARTICULARS Mar’17(A) Mar’16 YoY % Dec’16(A) QoQ % AUM (Rs. mn) 40,665.98 32,707.60 24.33% 37,361.37 8.85% On-Book AUM (Rs. mn) 31,991.81 22,747.24 40.64% 26,289.55 21.69% Securitization/ Assignment (Rs. mn) 4,176.52 9,960.36 -58.07% 7,147.08 -41.56% TSL - Business Co

  51. Slide 51: Balance Sheet – Consolidated

    Balance Sheet – Consolidated PARTICULARS (Rs. mn) Mar’17(A) Mar’16 YoY % Dec’16(A) QoQ % Equity(1) 6,375.93 3,240.06 96.78% 6,782.31 -5.99% Preference shares 250.00 - - 250.00 0.00% Net Worth 6,625.93 3,240.06 104.50% 7,032.31 -5.78% Minority Interest 22.80 - - 23.46 -2.82% Long Term Borrowings 20,2

  52. Slide 52: P&L Statement – Consolidated (Quarterly)

    P&L Statement – Consolidated (Quarterly) PARTICULARS (Rs. mn) 4Q FY17(A) 4Q FY16 YoY % 3Q FY17(A) QoQ % Total Revenue Interest income on Portfolio Loans 1,173.52 1.059.38 10.77% 1,628.61 -27.94% Income from securitization 88.00 329.15 -73.26% 167.06 -47.32% Processing Fee income 104.80 154.40 -32.12

  53. Slide 53: P&L Statement – Consolidated (Annual)

    P&L Statement – Consolidated (Annual) PARTICULARS (Rs. mn) FY17(A) FY16 YoY % Total Revenue Interest income on Portfolio Loans 5,430.27 3,804.69 42.73% Income from securitization 1,063.84 892.11 19.25% Processing Fee income 358.41 352.37 1.72% Interest on FD/ Mutual Fund 877.10 470.47 86.43% Income

  54. Slide 54: Annexure: Financial & Operational Details - Standalone

    Annexure Financial & Operational Details - Standalone

  55. Slide 55: Operational Details – Standalone

    Operational Details – Standalone PARTICULARS 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Gross AUM 36,168.33 32,707.60 10.58% 33,436.63 8.17% No. of districts 235 215 9.30% 225 4.44% No. of branches 618 431 43.39% 560 10.36% No. of States of operation 16 16 - 16 - No. of Employees 5,801 3,918 48.06% 5,702 1

  56. Slide 56: Operational Details – Standalone (Contd.)

    Operational Details – Standalone (Contd.) PARTICULARS 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Prod. Financing AUM (Rs. mn) 1.22 112.61 -98.92% 5.68 -78.50% No. of loan accounts 7,495 190,044 -96.06% 26,157 -71.35% Disbursement during the period (Rs. mn) - 108.96 -100.00% 0.53 -100.00% No. of loans disbu

  57. Slide 57: Financial Performance – Standalone

    Financial Performance – Standalone RoE Tree 4Q FY17 4Q FY16 3Q FY17 Gross Yield (1) 18.94% 23.83% 23.45% Financial Cost Ratio(2) 13.80% 12.13% 13.09% Net Interest Margin(3) 5.14% 11.70% 10.35% Operating Expense ratio(4) 7.78% 6.89% 6.98% Loan Loss Ratio(5) 4.61% 1.29% 0.49% RoA(6) -3.63% 2.16% 1.50%

  58. Slide 58: Balance Sheet – Standalone

    Balance Sheet – Standalone PARTICULARS (Rs. mn) Mar’17 Mar’16 YoY % Dec’16 QoQ % Equity(1) 6,372.19 3,240.06 96.67% 6,773.79 -5.93% Preference shares 250.00 - - 250.00 0.00% Net Worth 6,622.19 3,240.06 104.38% 7,023.79 -5.72% Long Term Borrowings 20,201.21 13,334.96 51.49% 19,046.97 6.06% Long Term

  59. Slide 59: P&L Statement – Standalone (Quarterly)

    P&L Statement – Standalone (Quarterly) PARTICULARS (Rs. mn) 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Total Revenue Interest income on Portfolio Loans 1,173.52 1,059.38 10.77% 1,628.61 -27.94% Income from securitization 88.088 329.15 -73.265 167.06 -47.32% Processing Fee income 104.80 154.40 -32.12% 28.99

  60. Slide 60: P&L Statement – Standalone (Financial Year)

    P&L Statement – Standalone (Financial Year) PARTICULARS (Rs. mn) FY17 FY16 YoY % Total Revenue Interest income on Portfolio Loans 5,430.27 3,804.69 42.73% Income from securitization 1,063.84 892.11 19.25% Processing Fee income 358.41 352.37 1.72% Interest on FD/ Mutual Fund 868.54 470.47 84.61% Othe

  61. Slide 61: Annexure: Financial & Operational Details - TSL

    Annexure Financial & Operational Details - TSL

  62. Slide 62: Operational Details – TSL

    Operational Details – TSL PARTICULARS 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Gross AUM (Rs. mn) 4,497.65 3,457.59 30.08% 3,924.74 14.60% No. of districts 87 61 42.62% 85 2.35% No. of branches 149 112 33.04% 150 -0.67% No. of Regional Offices (RO) 7 6 16.67% 7 0.00% No. of States of operation 8 6 33.33%

  63. Slide 63: Balance Sheet – TSL

    Balance Sheet – TSL PARTICULARS (Rs. mn) Mar’17 Mar’16 YoY % Dec’16 QoQ % Share Capital 90.83 90.83 - 90.83 - Reserves and Surplus 96.51 86.30 11.83% 101.95 -5.33% Net Worth 187.34 177.13 5.77% 192.78 -2.82% Long Term Borrowings 32.09 9.79 227.66% 39.37 -18.49% Long Term Provisions 9.61 6.30 52.34%

  64. Slide 64: P&L Statement – TSL

    P&L Statement – TSL PARTICULARS (Rs. mn) 4Q FY17 4Q FY16 YoY % 3Q FY17 QoQ % Total Revenue 104.03 81.99 26.88% 105.58 -1.47% Interest Expense -1.66 -0.54 -207.41% 6.02 -127.57% Personnel Expenses 66.83 56.73 17.80% 63.64 5.01% Credit cost (Provisions for NPAs, Write-offs, etc.) 15.41 6.70 130.00% 4.

  65. Slide 65: Annexure: Top 10 Shareholders

    Annexure Top 10 Shareholders

  66. Slide 66: Top Shareholders

    Top 10 Shareholders Top 10 Shareholders – As of 21 Apr 2017 Top 10 Institutional Shareholders – As of 21 Apr 2017 Share Share Entity Entity holding % holding % MORGAN STANLEY MAURITIUS COMPANY PROMOTER 31.74 4.84 LIMITED MV MAURITIUS LIMITED 8.91 ASIAN DEVELOPMENT BANK 3.95 SBI FMO EMERGING ASIA FIN

  67. Slide 67: Contact Information

    Contact Information For any queries, please contact: Mansi Verma AVP – Capital Markets Satin Creditcare Network Limited E: mansi.verma@satincreditcare.com T: +91 11 4754 5000 (Ext – 243) 66

  68. Slide 68: Thank You

    Thank You

Satin Creditcare Network — Q4 FY2017 Earnings Presentation on 6ix