Poonawalla Fincorp Limited · NSE:POONAWALLA
Poonawalla Fincorp — Q4 FY2023 Earnings Presentation
49 slides from Poonawalla Fincorp's earnings presentation, Apr 26, 2023
Slide 1: Exchange filing cover letter for investor presentation
April 26, 2023 BSE Limited National Stock Exchange of India Limited Corporate Relationship Department The Listing Department, 25th Floor, Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Fort, Bandra- Kurla Complex, Bandra (East), Mumbai - 400 001. Mumbai - 400 051. BSE Scrip Code: 524000 NS
Slide 2: Investor Presentation Q4FY23
Poonawalla Fincorp Limited (Formerly known as Magma Fincorp Limited) Investor Presentation Q4FY23 Scalable Business Model | Pure Retail Play | Digital-First Tech-Led | Customer Centric
Slide 3: Agenda – PFL Standalone
Agenda – PFL Standalone 1 Overview & Executive Summary 2 2 Strategy Execution 6 3 Our Fintech Play 20 4 Business & Financial Highlights 28 5 Digital Transformation Journey So Far & Way Forward 35 6 Board Members, Awards & Accolades and Media 41 2
Slide 4: Q4FY23 Performance – PFL Standalone
Q4FY23 Performance – PFL Standalone Excellent Quarter on All Fronts Differentiated strategy and execution excellence led to all round performance across business growth, credit quality & profitability AUM Disbursement Highest ever quarterly disbursement ₹ 16,143 crore ₹ 6,371 crore +37% YoY | +16% Q
Slide 5: Executive Summary – PFL Standalone
Executive Summary – PFL Standalone Setting the momentum for expanding growth horizon Strong Business Momentum Continues in Q4FY23 ▪ Highest ever disbursement (entirely organic) of ₹ 6,371 crore with new products scaling up well ▪ Consistent increase in disbursement: Up 151% YoY & 89% QoQ ▪ AUM at ₹
Slide 6: Executive Summary – PFL Standalone
Executive Summary – PFL Standalone Setting the momentum for expanding growth horizon Robust Asset Quality ▪ GNPA* & NNPA* reduced to 1.44% and 0.78% respectively compared to 1.69% & 0.89% in Q3FY23 and as compared to 3.29% & 1.30% in Q4FY22 ▪ Stage 3 PCR stood at 46.2% as on March 31, 2023 Rise in P
Slide 7: Agenda – PFL Standalone
Agenda – PFL Standalone 1 Overview & Executive Summary 2 2 Strategy Execution 6 3 Our Fintech Play 20 4 Business & Financial Highlights 28 5 Digital Transformation Journey So Far & Way Forward 35 6 Board Members, Awards & Accolades and Media 41 6
Slide 8: Scalable Business Model to Drive Profitable Growth
Scalable Business Model to Drive Profitable Growth Inherent Strengths… Brand Strength & Strong Management Digital First and Technology Led Target Market Aligned Distribution & Products Flagship financing arm of Cyrus Poonawalla Digitalized end to end processes Unique sourcing model with mix of Direc
Slide 9: Management Vision 2025 : PFL Standalone
Management Vision 2025 : PFL Standalone Performance well ahead of long-term guidance Vision 2025 On the right track (Q4FY23 status) To be amongst the Top 3 NBFCs in consumer and Product diversification to have large presence in MSMEs chosen segments. Leadership in select products achieved Risk-calib
Slide 10: Long Term Guidance on Financial Metrics
Long Term Guidance on Financial Metrics PFL Standalone - Profitable Growth with Best-in-Class Asset Quality AUM Growth Profit Growth GNPA 35-40% 30-35% 1.3-1.8% NNPA Return on Assets 0.5-0.9% 4-4.5% 9
Slide 11: Successfully Executing our Strategic Plan
Successfully Executing our Strategic Plan PFL Standalone 1 Differentiating by Offering Superior Customer Value 2 Aligning Distribution & Products that Suits Target Market 3 Digital-First, Technology-Led to the Core 4 Upholding Robust Credit Quality 5 Continuously Optimizing Cost of Borrowing & Liqui
Slide 12: Differentiating by Offering Superior Customer Value
1a Differentiating by Offering Superior Customer Value To ensure sustainable growth & leadership in chosen segments - PFL Standalone In ₹ crore Accelerating organic disbursement growth Focused AUM has grown 73% YoY 4.0x 6,371 1.73x 15,198 12,738 3,369 11,616 3,110 10,325 2,379 8,791 1,600 Q4FY22 Q1F
Slide 13: Diversified Assets Under Management
1b Diversified Assets Under Management PFL Standalone Contribution In ₹ crore Business Loans & LTP 4,516 28% Pre-Owned Car 2,690 17% Personal and Consumer 2,578 16% • Pure retail portfolio with focus on Loan Against Property 2,559 16% MSME and Consumer segment. • AUM well diversified across Asset Ba
Slide 14: Distribution: In Sync with Emerging Business Models
2a Distribution: In Sync with Emerging Business Models Direct Digital Program (DDP) led distribution model- PFL Standalone Direct Channel Digital Channel Digital ecosystem In-house sourcing of In-house sourcing of Multiple tie-ups, alliances & DDP Distribution customers through own customers through
Slide 15: Product Suite: Tailored for the Target Segment
2b Product Suite: Tailored for the Target Segment Focus on Consumer & MSME segment with diversified offerings- PFL Standalone Existing products Upcoming products Pre-owned Cars Digital Business Loans Machinery Loan Credit Card Merchant Cash Advance Digital Personal Loan Digital Consumption Loan EMI
Slide 16: Digital-First, Technology-Led to the Core
3a Digital-First, Technology-Led to the Core Leading to competitive moat, efficient operations & sustained growth- PFL Standalone Deep Investments in Technology Building a Tech led Play Customers Partners Self service online web application Extended API Infrastructure Core Contact center led digital
Slide 17: Digital Transformation Yielding Results
3b Digital Transformation Yielding Results PFL Standalone End to End Digitalized Lending – Lower TATs, Minimal Paperwork, Reduced human intervention ▪ End to end digital journey capability for customers across all products via Digital KYC, Digital Onboarding (E-sign, E-agreement & E-NACH), Automated
Slide 18: Upholding Robust Credit Quality - PFL Standalone
4 Upholding Robust Credit Quality - PFL Standalone Consistent outperformance on Asset Quality GS3 / GNPA* (%) NS3 / NNPA* (%) 3.29 2.68 1.30 1.11 1.77 1.69 0.94 0.89 1.44 0.78 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Chosen market segment, Prudent underwriting & Collecti
Slide 19: Optimizing Cost of Borrowing & Liquidity Position
5 Optimizing Cost of Borrowing & Liquidity Position PFL Standalone Despite repo rate hike of 250 bps, our average cost of borrowing increased only by 35 bps since Q4FY22 Average Cost of Borrowing (PFL) 9.1% 8.0% 7.9% 7.5% 7.5% 7.2% 7.0% Repo rate hike → Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY
Slide 20: Future Ready Human Capital with Strong Leadership
6 Future Ready Human Capital with Strong Leadership Building the Right Culture with focus on Productivity Productivity & Operational Employee Development Efficiency Engagement Rewards • New HRMS system & • Synergy - Organization • OKR framework launched • Well defined development analytics launched
Slide 21: Agenda – PFL Standalone
Agenda – PFL Standalone 1 Overview & Executive Summary 2 2 Strategy Execution 6 3 Our Fintech Play 20 4 Business & Financial Highlights 28 5 Digital Transformation Journey So Far & Way Forward 35 6 Board Members, Awards & Accolades and Media 41 20
Slide 22: Customer’s Problem Statement and Persona
Customer’s Problem Statement and Persona An illustration Rajiv, a 34-year-old businessman from Pune, runs a manufacturing unit since last 8 years from rented premise. He has an annual turnover of ₹ 3 crore, stays in his owned house and pays GST on time. He is tech savvy, uses internet banking, activ
Slide 23: Customer Dilemma – Where is my lender of choice?
Customer Dilemma – Where is my lender of choice ? Large NBFC with Parameters Traditional Bank Traditional NBFC Digital Capability Fintech NBFC Poonawalla Fincorp Loan Amount No Yes Yes No Yes Flexibility Collateral Free No Yes Yes Yes Yes Quick Turnaround No No Yes Yes Yes Time 100% Digital No No No
Slide 24: Poonawalla Fincorp’s Fintech Model - Demystified
Poonawalla Fincorp’s Fintech Model - Demystified Low cost of funds and Low Opex enabling Poonawalla Fincorp to target low risk - credit tested Prime and Super Prime customers thereby resulting in lower credit cost Low Higher Risk Low Low Low Credit Cost of Adjusted Operating Cost Risk Customers Cost
Slide 25: Opportunity Sizing – Bureau Based
Opportunity Sizing – Bureau Based Total Live Consumers % Represents YoY Growth [219 Million] % Represents high YoY Growth & Poonawalla Focus Segments +10% 1 account [61%] 2+ accounts [39%] +20% Mortgages Single Product Multiple Products +5% [6%] +15% +21% [10%] [29%] Consumption Only Unsecured +21%
Slide 26: How we are growing and the road ahead
How we are growing and the road ahead Portfolio Mix Tenure Mix Secured Portfolio 49% Short Term (Upto 12 mths) 20% Current Unsecured Portfolio 51% Medium & Long Term (>12 mths) 80% Secured Portfolio 40% Short Term (Upto 12 mths) 20 - 25% Road Ahead Unsecured Portfolio 60% Medium & Long Term (>12 mth
Slide 27: Risk Management integrated into the strategy
Risk Management integrated into the strategy • Prime & Super Prime Segment • Bureau Score 700+ • Time maturity model • Demonstrated credit behavior • Better customer understanding Credit Tested • Credit risk optimized Customers • X-Sell & Up-Sell optimized Digital • Bureau Data Start Small Grow Big
Slide 28: Our Digital Metrics
Our Digital Metrics E-Agreement E-NACH AUM/Employee PBT/Employee Penetration Penetration ₹ 7.6 crore ₹ 35 lakh ~90% ~90% System Scalability Customer Service Digital Collections 10X in 12 months 94% penetration in 99% collections in loan booking digitally enabled through digital services means All th
Slide 29: Agenda – PFL Standalone
Agenda – PFL Standalone 1 Overview & Executive Summary 2 2 Strategy Execution 6 3 Our Fintech Play 20 4 Business & Financial Highlights 28 5 Digital Transformation Journey So Far & Way Forward 35 6 Board Members, Awards & Accolades and Media 41 28
Slide 30: Performance Parameters
Performance Parameters Robust growth continues | Significant reduction in GNPA & NNPA - PFL Standalone Amounts in ₹ crore Disbursement AUM Net-worth 6,425 Focussed Discontinued 6,212 6,371 6,018 16,143 5,878 13,929 945 5,715 13,161 12,606 3,110 3,369 11,765 1,192 2,901 1,545 2,539 2,281 2,974 15,198
Slide 31: ALM statement and Liquidity
ALM statement and Liquidity PFL Standalone Structural Liquidity Statement as on March 31, 2023 Cumulative inflows (₹ in crore) Cumulative outflows(₹ in crore) 20,342 20,342 18,369 16,638 13,543 11,645 11,456 9,064 7,081 6,673 4,924 3,424 1,114 1,521 1,116 1,637 31 74 297 494 0-7 days 8-14 days 15-30
Slide 32: Asset Quality
Asset Quality Significant improvement on sustained basis - PFL Standalone Particulars Mar-22 Dec-22 Mar-23 Stage 1 & 2 Assets 96.71% 98.31% 98.56% Stage 1 & 2 PCR 3.22% 1.26% 1.15% Gross Stage 3 (₹ crore) / GNPA* 372 223 225 Net Stage 3 (₹ crore) / NNPA* 144 117 121 Gross Stage 3 / GNPA* 3.29% 1.69%
Slide 33: Profit & Loss Statement - PFL Standalone
Profit & Loss Statement - PFL Standalone In ₹ crore Q4FY22 Q3FY23 Q4FY23 YoY QoQ FY22 FY23 YoY Total Income 398 519 581 46% 12% 1,567 2,010 28% Interest Expenses 110 159 173 57% 9% 509 595 17% Operating Expenses 173 204 196 14% -4% 605 803 33% Operating Profit 115 156 212 84% 36% 453 612 35% Credit
Slide 34: Balance Sheet - PFL Standalone
Balance Sheet - PFL Standalone In ₹ crore 31-Mar-22 31-Dec-22 31-Mar-23 YoY Cash & Bank Balances 537 99 657 22% Receivables 14 23 21 47% Loans 10,678 12,883 15,229 43% Investments 820 1,138 311 -62% Other Financial Assets 144 470 571 297% Non-Financial Assets 616 513 1,232 100% Total Assets 12,810 1
Slide 35: PHFL Transaction – Update & Rationale
PHFL Transaction – Update & Rationale Update Poonawalla Fincorp announced sale of its Housing Finance Subsidiary In Q3FY23, Poonawalla Fincorp’s Board approved sale of its housing finance subsidiary Poonawalla Housing Finance Limited to TPG (Perseus SG Pte. Ltd., an entity affiliated with TPG Global
Slide 36: Agenda – PFL Standalone
Agenda – PFL Standalone 1 Overview & Executive Summary 2 2 Strategy Execution 6 3 Our Fintech Play 20 4 Business & Financial Highlights 28 5 Digital Transformation Journey So Far & Way Forward 35 6 Board Members, Awards & Accolades and Media 41 35
Slide 37: Digital Transformation Journey So Far & Way Forward
Digital Transformation Journey So Far & Way Forward We have successfully completed Phase 1 of technology transformation and launched multiple new products as per our stated strategy. It has helped put in place a stable and scalable digital platform. With strong roots in place, the Company has now em
Slide 38: Strong Roots of Digital, Technology & Analytics
Strong Roots of Digital, Technology & Analytics Successfully implemented in Phase 1 over the last 6 quarters Customer Relationship Rule Engine Loan Management Collection Management Loan Origination Platform Management Platform Platform Platform Core Platform Lead generation Onboarding Real time Anal
Slide 39: Phase 2: Deepening Technology, Digital & Analytics
Phase 2: Deepening Technology, Digital & Analytics Innovative, Personalized, Engaging & Convenient - For superior customer experience Highly customised orchestration layer integrating across channels to create unique experience Consumer Data Apps Eco-System Personalization Engagement Products Consen
Slide 40: Phase 2: Journey Started..
Phase 2 :Journey Started.. On track to deliver it over next 2 Quarters (~50% work completed in Q4FY23) Straight Through Customer Mobile Super App Based Lending Digital Collections Customer Portal Disbursal Platform App & Referrals Platform Enhanced Digital Platform Automated & Fully Partner On-board
Slide 41: Phase 2: Enhanced Customer Service - 360 View
Phase 2: Enhanced Customer Service - 3600 View* Self Service, Personalized, Insight Driven – “Making Service delivery a Sales Channel” Self Service & FTR Resolutions Promote & Manage Cross Sell • Segmented campaign management in CRM • Agent assist & Customer 360 • Loan details • STP fulfilment journ
Slide 42: Agenda – PFL Standalone
Agenda – PFL Standalone 1 Overview & Executive Summary 2 2 Strategy Execution 6 3 Our Fintech Play 20 4 Business & Financial Highlights 28 5 Digital Transformation Journey So Far & Way Forward 35 6 Board Members, Awards & Accolades and Media 41 41
Slide 43: Board of Directors - Poonawalla Fincorp
Board of Directors - Poonawalla Fincorp Experienced & Diversified Board Mr. Adar Poonawalla Mr. Abhay Bhutada Mr. Amar Deshpande Mr. Sajid Fazalbhoy Mr. Atul Kumar Gupta Chairman & Managing Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Ms. Vijay
Slide 44: Awards and Accolades
Awards and Accolades Recognition from Industry circles HR Practices Customer Centricity Digital NBFC Fastest Growing NBFC Recognized as the One of the most Fastest Growing ‘Best Digital NBFC Recognized as the Customer centric NBFC of the Year’ of the Year’ award at most preferred Brands at award at
Slide 45: Rising India Summit - Celebrating India’s Real Heroes
Rising India Summit - Celebrating India’s Real Heroes • Associated with News18 for their flagship event Rising India to honour the Real Heroes • During this summit Poonawalla Fincorp in association with News18 felicitated the Unsung heroes from different walks of life for their contribution towards
Slide 46: Launch of Kya Se Wah Campaign
Launch of Kya Se Wah Campaign Promotional digital media campaign for Business and Professional Loans • Launched ‘Kya Se Wah’ campaign for company’s business and professional loans in Q4FY23 • It resulted in strong brand visibility and recall across target segments • We will continue to focus on Cust
Slide 47: Disclaimer
Disclaimer This presentation has been prepared by Poonawalla Fincorp Limited (the “Company”), for general information purposes only, without regard to any specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation or form part
Slide 48: Disclaimer (Continued)
Disclaimer (Continued) The information contained in these materials has not been independently verified. Neither the Company, its directors, promoter affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability what
Slide 49: Thank You
THANK YOU Team – Investor Relations Investor.relations@poonawallafincorp.com