Indostar Capital Finance Limited · NSE:INDOSTAR
Indostar Capital Finance — Q3 FY21 Earnings Presentation
45 slides from Indostar Capital Finance's earnings presentation, Feb 4, 2021
Slide 1: Exchange filing cover letter under Regulation 30
INDOSTAR ICFL/LS/00242/2020-21 4 February 2021 BSE Limited National Stock Exchange of India Limited Listing Department, 1st Floor, Exchange Plaza, C-1, Block G, P J Towers, Dalal Street, Fort, Sandra Kurla Complex, Mumbai - 400 001 Sandra (E), Mumbai - 400 051 Scrip Code: 541336 Symbol: INDOSTAR Sub
Slide 2: Q3FY21 Results Update
INDOSTAR CAPITAL FINANCE LIMITED Q3FY21 Results Update 04 February 2021
Slide 3: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”) have been prepared by IndoStar Capital Finance Limited (“IndoStar” or the “Company”) solely for information purposes and do not constitute an offer to sell or, recommendation or solicitation of an offer to subscribe for or
Slide 4: Discussion Summary
Discussion Summary Strategy Quarterly Results Business Update Shareholding Structure
Slide 5: Strategy
Strategy • To be a 100% retail company. Focus on growing the retail business • To reduce the Corporate book to less than 10% by March 22 • To build a profitable retail platform with growth potential to deliver excellent value to all stakeholders • To focus on collections and enhance asset quality •
Slide 6: Discussion Summary
Discussion Summary Strategy Quarterly Results Business Update Shareholding Structure
Slide 7: Q3FY21 in Perspective
Q3FY21 in Perspective • Re-started retail disbursements and quickly reached pre-covid disbursement levels • Continued reduction in Corporate lending book • Obtained CRISIL credit rating of AA (-) with stable outlook even in the current challenging environment • Strengthened partnership with ICICI Ba
Slide 8: Summary of Q3
Summary of Q3 Health & Safety • India’s COVID situation improving; but need for continued alertness • Most important aspect of the economy in the first half of calendar 2021 is going to be the vaccine. The base case at this stage for most of us is that the vaccine will be effective • Safe and effici
Slide 9: Steady reduction in the Corporate book
Steady reduction in the Corporate book Corporate Lending AUM (₹ mn) 52,519 48,665 44,803 45,270 43,067 36,267 31,646 28,687 29,287 24,760 22,872 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 7
Slide 10: Q3FY21 performance: Key Highlights
Q3FY21 performance : Key Highlights Strong retail franchise ~75% of AUM (69% in Dec19) Execution of Retailisation Theme ICICI partnership AUM ~ ₹ 6,518 mn Comfortable liquidity; ~39% of Borrowings Strong Capitalisation & CRAR 35% Liquidity Debt : Equity ratio of 1.8x Net Revenue from Ope
Slide 11: Q3 & 9MFY21: Consolidated Profit & Loss Statement
Q3 & 9MFY21: Consolidated Profit & Loss Statement Particulars (₹ mn) Q3FY21 Q2FY21 QoQ % Q3FY20 YoY % 9MFY21 9MFY20 YoY % Revenue from Operations 3,353 3,392 -1% 3,816 -12% 10,079 12,655 -20% Interest Expenses (1,785) (1,854) -4% (1,960) -9% (5,477) (6,664) -18% Net Revenue from Operations 1,568 1,5
Slide 12: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (₹ mn) Dec-20 Sep-20 QoQ % Dec-19 YoY % Equity 40,046 39,695 1% 30,953 29% Borrowings 71,236 71,427 0% 69,262 3% Total Liabilities 111,282 111,121 0% 100,215 11% Loan Assets 75,515 78,000 -3% 90,238 -16% Treasury Assets 30,779 27,712 11% 5,591 450% Fixed Assets
Slide 13: Q3FY21: Business Segment Performance
Q3FY21: Business Segment Performance Corporate SME Housing ^ Particulars (₹ mn) CV Finance Consolidated Lending Finance Finance Revenue from Operations 834 1,287 432 600 3,353 Interest Expenses (414) (526) (242) (138) (1,785) Net Interest Income 420 761 189 462 1,568 People Costs 17 184 47 53 470 Op
Slide 14: 9MFY21: Business Segment Performance
9MFY21: Business Segment Performance Corporate SME Housing ^ Particulars (₹ mn) CV Finance Consolidated Lending Finance Finance Revenue from Operations 2,825 4,256 1,286 1,146 10,079 Interest Expenses (1,431) (1,875) (718) (406) (5,477) Net Interest Income 1,394 2,381 568 740 4,602 People Costs 55 5
Slide 15: Diversified Funding Profile
Diversified Funding Profile Funding Mix - Sep 2020 Funding Mix - Dec 2020 NCD 22% NCD 23% Equity 36% Equity 36% Banks 28% Banks 30% CP 1% CP 2% Securitisation Securitisation 12% 10% Incremental Funding Mobilized Strong Credit Ratings ₹ mn Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Borrowing Type Rating Firm Ra
Slide 16: Strong Liquidity & ALM
Strong Liquidity & ALM Particulars Jan-21 Feb-21 Mar-21 Q1 FY22 Q2 FY22 Q3 FY22 Opening Cash & Equivalents* 27,954 27,289 24,845 20,190 13,856 12,941 Loan repayment inflows [Principal] 880 947 864 2,622 2,725 3,552 Total Inflow 28,834 28,236 25,708 22,811 16,581 16,493 Liability Repayment [Principal
Slide 17: Post integration branch rationalisation on course
Post integration branch rationalisation on course 217 branches across 18 states * Some branches have multiple operating segments 10 2 322 322 9 233 233 215 217 212 2 4 305 305 222 222 207 207 202 19 9 55 55 49 64 48 48 17 10 10 10 10 10 44 10 10 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 SME F
Slide 18: Q3FY21: Quarterly Performance Trend (1/2)
Q3FY21: Quarterly Performance Trend (1/2) AUM (₹ mn) Loan Disbursements (₹ mn) On-book Loans Off-book Loans AUM Corporate Retail Total 8,759 102,219 96,899 98,098 7,324 90,842 88,645 6,611 11,981 13,813 13,968 13,016 13,130 5,904 4,769 6,340 90,238 82,930 84,285 77,826 75,515 2,152 2,855 868 2,045 1
Slide 19: Q3FY21: Quarterly Performance Trend (2/2)
Q3FY21: Quarterly Performance Trend (2/2) NPA* PAT (₹ mn) GNPA NNPA With Hon. SC dispensation 472 4.5% 4.8% 4.7% GNPA is 2.1% 316 242 2.9% 2.8% 2 3.6% 3.8% 3.8% Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 2.1% 1.8% -4,214 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 * GNPA & NNPA (restated) represents Stage 3 Assets N
Slide 20: Asset Quality
Asset Quality Gross NPA (₹ mn) Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Corporate Lending 1,546 1,546 1,546 1,546 1,076 CV Finance 2,334 2,336 2,445 578 805 SME Finance 267 237 153 180 261 Housing Finance 51 63 64 69 138 Total 4,199 4,182 4,207 2,372 2,280 Net NPA (₹ mn) Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21
Slide 21: Discussion Summary
Discussion Summary Strategy Quarterly Results Business Update Shareholding Structure
Slide 22: Collections update
Collections update Retail Month Total Billing % Collections Jan-20 2,267 2,349.5 103.64% Feb-20 2,122 2,208.9 104.10% Mar-20 2,232 1,461.7 65.49% Apr-20 2,130 153.6 7.21% May-20 2,134 389.4 18.25% Jun-20 2,219 1,022.8 46.09% Jul-20 2,234 1,450.2 64.91% Aug-20 2,211 1,564.5 70.76% Sep-20 2,182 2,008.
Slide 23: Restructuring Snapshot
Restructuring Snapshot No. of Amount % of no. of % of Total no of Total AUM YTD FY21 Restructure Restructured Restructur Restructured Accounts accounts e accounts AUM (INR mn) (INR mn) VF 81,442 1512 41,014 1632 1.86% 3.97% SME 2,610 72 17,994 864 2.76% 4.80% AHF 13,471 0 9,152 0 0% 0% Total Retail
Slide 24: Corporate Lending (1/3)
Corporate Lending (1/3) Corporate Lending AUM (₹ mn) AUM Breakup: RE vs. Non-RE 52,519 18% 16% 48,665 19% 19% 18% 44,803 45,270 43,067 36,267 31,646 28,687 29,287 24,760 22,872 81% 82% 84% 81% 82% Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q3FY20 Q4FY20 Q1FY21 Q2FY2
Slide 25: Corporate Lending: Profit and Loss (2/3)
Corporate Lending: Profit and Loss (2/3) Particulars (₹ mn) Q3 FY 20 Q4 FY 20 Q1 FY 21 Q2 FY 21 Q3 FY 21 Revenue from Operations 1,288 1,077 1,000 991 834 Interest Expenses (648) (610) (529) (488) (414) Net Interest Income 640 467 471 503 420 People Costs 40 27 23 15 17 Operating Expenses 9 8 4 59 9
Slide 26: Corporate Lending: Key ratios (3/3)
Corporate Lending : Key ratios (3/3) Q3 FY 20 Q4 FY 20 Q1 FY 21 Q2 FY 21 Q3 FY 21 Revenue from Operations* 14.7% 14.3% 13.6% 13.7% 13.5% Net Interest Income* 7.3% 6.2% 6.4% 7.0% 6.8% Operating Expenses* 0.6% 0.5% 0.4% 1.0% 0.4% Cost / Income 7.7% 7.7% 5.8% 14.7% 6.2% Pre-provision Operating Profit 6
Slide 27: Retailisation Strategy On track
Retailisation Strategy On track AUM: CL vs Retail (%) Disbursements: CL vs Retail (%) 1,02,219 96,899 98,098 90,842 88,645 8,759 7,324 868 2,152 6,611 69% 71% 71% 73% 75% 67% 72% 87% 89% 95% 31% 29% 29% 27% 33% 25% 28% 13% 11% 5% Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY2
Slide 28: Retail Business Volume impacted by Covid-19
Retail Business Volume impacted by Covid-19 Retail AUM (₹ mn) Retail Disbursements (₹ mn) 70,574 70,989 71,595 68,617 68,160 6,340 7,699 8,310 8,305 5,904 8,538 9,152 17,530 4,769 17,968 17,482 17,495 17,994 4,293 4,833 2,603 2,045 44,907 45,197 45,760 42,584 41,014 856 850 866 777 827 760 1316 745
Slide 29: CV Finance (1/3)
CV Finance (1/3) CV Finance – Monthly Disbursement Trend (₹ mn) 2191 1724 1374 918 944 679 574 280 284 7 23 2 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 CV Finance AUM ₹ 41,014 mn AUM of ICICI Bank tie-up ₹ 6,518 mn 27
Slide 30: CV Finance: Profit and Loss (2/3)
CV Finance : Profit and Loss (2/3) Particulars (₹ mn) Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Revenue from Operations 1,743 1,455 1,511 1,458 1,287 Interest Expenses (771) (759) (707) (642) (526) Net Interest Income 971 697 804 817 761 People Costs 206 193 187 182 184 Operating Expenses 119 152 100
Slide 31: CV Finance: Key ratios (3/3)
CV Finance : Key ratios (3/3) Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Branches & Employees Revenue from Operations* 16.9% 15.2% 16.0% 15.7% 15.1% Net Interest Income* 9.4% 7.3% 8.5% 8.8% 8.9% 350 1,934 1,734 1,635 1643 1606 2,000 Operating Expenses* 3.1% 3.6% 3.0% 3.6% 4.0% 300 1532 1463 250 1,500 C
Slide 32: SME Finance (1/3)
SME Finance (1/3) SME Finance – Monthly Disbursement Trend (₹ mn) 485 414 418 351 297 200 126 103 32 4 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 SME Finance AUM : ₹ 17,994 mn Assigned/Securitized Portfolio : ₹ 3,826 mn 30
Slide 33: SME Finance: Profit and Loss (2/3)
SME Finance: Profit and Loss (2/3) Particulars (₹ mn) Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Revenue from Operations 441 428 436 419 432 Interest Expenses (260) (266) (245) (232) (242) Net Interest Income 181 162 191 188 189 People Costs 45 44 39 42 47 Operating Expenses 33 31 17 16 20 Pre-provisio
Slide 34: SME Finance: Key ratios (3/3)
SME Finance : Key ratios (3/3) Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Branches & Employees Revenue from Operations* 12.9% 13.0% 12.8% 12.6% 12.6% Net Interest Income* 5.3% 4.9% 5.6% 5.6% 5.5% 98 93 89 87 89 89 88 Operating Expenses* 2.3% 2.3% 1.6% 1.8% 1.9% Cost / Income 43.1% 46.1% 29.3% 31.3% 35.
Slide 35: Housing Finance (1/3)
Housing Finance (1/3) Housing Finance – Monthly Disbursement Trend (₹ mn) 377 362 295 303 270 278 193 206 156 64 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Housing Finance AUM : ₹ 9,152 mn Assigned /Securitized Portfolio : ₹ 1,683 mn Loans assigned du
Slide 36: Housing Finance: Profit and Loss (2/3)
Housing Finance: Profit and Loss (2/3) Particulars (₹ mn) Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Revenue from Operations 245 261 261 285 600 * Interest Expenses (121) (141) (136) (132) (138) Net Interest Income 124 119 125 153 462 People Costs 58 63 53 51 53 Operating Expenses 31 36 21 27 26 Pre-pr
Slide 37: Housing Finance: Key Ratios (3/3)
Housing Finance : Key Ratios (3/3) Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Branches & Employees Revenue from Operations* 15.3% 14.6% 13.9% 14.7% # 14.9% Net Interest Income* 7.8% 6.7% 6.7% 7.9% # 7.9% 324 329 319 319 294 Operating Expenses* 5.5% 5.6% 4.0% 4.0% 4.0% 271 275 # Cost / Income 71.1% 83.0
Slide 38: Significant Growth Capital: A real edge in current environment
Significant Growth Capital : A real edge in current environment IndoStar now has all the essential ingredients to rapidly grow its loan book in the future • Capital : We have substantial growth capital, which we will utilize to pursue calibrated growth • Strong ALM and Low Leverage • Continued reduc
Slide 39: Scrappage Policy
Scrappage Policy • This is a much awaited and welcome reform announced by the government • One million+ commercial vehicles in India, which are more than 15 years old • Scrapping them and creating a replacement demand will modernise the fleet and has the potential to add approximately $15 billion to
Slide 40: Entrepreneurial Leadership Team with Strong Sponsor Backing
Entrepreneurial Leadership Team with Strong Sponsor Backing Several years of experience and in-depth understanding of the specific industry and geographic regions Separate business & credit heads for each vertical Strong alignment through large ESOP program 20+ years of 30+ years of experi
Slide 41: Entrepreneurial Leadership Team with Strong Sponsor Backing
Entrepreneurial Leadership Team with Strong Sponsor Backing Several years of 24 years of 20+ years of Several years of experience with experience in experience in experience with financial financial financial SME, Institutions institutions commercial Institutions banking, and Previously Si
Slide 42: Strong & Distinguished Board
Strong & Distinguished Board 14 committees composed of independent and non-independent directors and also employees1 Distinct and delineated responsibilities to ensure good corporate governance Strong capital sponsorship also providing access to best industry practices and international corpor
Slide 43: Discussion Summary
Discussion Summary Strategy Quarterly Results Business Update Shareholding Structure
Slide 44: Shareholding Pattern
Shareholding Pattern Shareholding# @ 31 December 2020 Brookfield 52.2% 6.5% Indostar Capital Mauritius 41.3%^ # Excluding CCPS ^ includes ECP II & ECP III ESOP is 4.58% of diluted shares capital (excluding CCPS) Source – NSE, Company data 42
Slide 45: For Further Queries
For Further Queries Salil Bawa Head Investor Relations Contact No: +91 9987644008 Email – sbawa@indostarcapital.com Email - investor.relations@indostarcapital.com Media Contact Snigdha Nair Adfactors PR Email - snigdha.nair@adfactorspr.com; indostar@adfactorspr.com
IndoStar Capital Finance — Q3 FY21 Earnings Presentation on 6ix