Indostar Capital Finance Limited · NSE:INDOSTAR

Indostar Capital Finance — Q3 FY19 Earnings Presentation

40 slides from Indostar Capital Finance's earnings presentation, Feb 2, 2019

  1. Slide 1: Q3 FY19 Results Update

    INDOSTAR CAPITAL FINANCE LIMITED Q3 FY19 Results Update 2 February 2019

  2. Slide 2: 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

  3. Slide 3: Discussion Summary

    Discussion Summary  Quarterly Results  Business Strategy & Performance  Company Overview  Shareholding Structure

  4. Slide 4: Q3 FY19: Key Highlights

    Q3 FY19: Key Highlights  Retail AUM: ₹ 32,680 Mn [+274% YoY, +13% QoQ] Retailisation : Execution on track  Retail asset book 42% of total AUM Well-capitalised, Low Leverage –  Strong Tier 1 CRAR of 30.0% headroom for growth  Debt : Equity ratio of 2.1x  Cost / Income: 33.4% [4.2% down QoQ]  PA

  5. Slide 5: Q3 FY19: Consolidated Profit & Loss Statement

    Q3 FY19: Consolidated Profit & Loss Statement Particulars (₹ Mn) Q3 FY19 Q2 FY19 QoQ % Q3 FY18 YoY % Revenue from Operations 3,212 3,245 -1% 1,927 67% Interest Expenses (1,474) (1,404) 5% (781) 89% Net Interest Income 1,737 1,841 -6% 1,146 52% People Costs 332 456 -27% 265 25% Operating Expenses 248

  6. Slide 6: Q3 FY19: Consolidated Balance Sheet

    Q3 FY19: Consolidated Balance Sheet Particulars (₹ Mn) Q3 FY19 Q2 FY19 QoQ % Q3 FY18 YoY % Equity 29,282 28,721 2% 20,258 45% Borrowings 62,223 58,032 7% 36,883 69% Others 384 971 -60% 900 -57% Total Liabilities 91,889 87,723 5% 58,041 58% Loan Assets 76,508 77,665 -1% 50,435 52% Treasury Assets 14,

  7. Slide 7: Q3 FY19: Business Segment Performance

    Q3 FY19: Business Segment Performance Corporate SME Vehicle Housing ^ Parti culars (₹ Mn) Consolidated Lending Lending Finance Finance Revenue from Operations 1,940 594 346 133 3,212 Interest Expenses (789) (303) (139) (63) (1,474) Net Interest Income 1,151 292 207 70 1,737 People Costs 23 40 97 81

  8. Slide 8: 9M FY19: Business Segment Performance

    9M FY19: Business Segment Performance Corporate SME Vehicle Housing ^ Particulars (₹ Mn) Consolidated Lending Lending Finance Finance Revenue from Operations 5,761 1,559 677 238 8,800 Interest Expenses (2,347) (817) (266) (120) (3,997) Net Interest Income 3,413 742 411 119 4,802 People Costs 134 149

  9. Slide 9: Q3 FY19: Diversified Funding Profile

    Q3 FY19: Diversified Funding Profile Funding Mix % - September 2018 (₹ Mn) Funding Mix % - December 2018 (₹ Mn) CP & CP & Others, Equity, Equity, Others, 6,638 29,093 29,749 6,009 8% 33% 32% 6% Banks, 28,356 NCD, Banks, NCD, 27,940 31% 25,840 25,550 31% 30% 29% Strong Credit Ratings Proportion of Co

  10. Slide 10: Comfortable Liquidity Position

    Q2 FY19: Comfortable Liquidity Position Positive ALM month on month, in FY 19 and FY 20 Particulars (₹ Mn) Jan-19 Feb-19 Mar-19 FY20 Opening Cash & Cash Equivalents * 21,909 18,715 18,764 17,327 Loan Repayment Inflows (Principal) 669 643 1,088 18,760 Total Inflows 22,578 19,358 19,852 36,087 Liabili

  11. Slide 11: Discussion Summary

    Discussion Summary  Quarterly Results  Business Strategy & Performance  Company Overview  Shareholding Structure

  12. Slide 12: Our Strategic Priority: Build A Well-Balanced & Diversified Lending Institution

    Our Strategic Priority: Build A Well-Balanced & Diversified Lending Institution Dream. Drive. Deliver. To build a profitable, diversified Become the “Go-To” NBFC Growth, Asset Quality, & asset book for Middle India Profitability  Continue to grow profitable corporate  Be a catalyst in our customer

  13. Slide 13: Q3 FY19: Encouraging Quarterly Performance Trend (1/2)

    Q3 FY19: Encouraging Quarterly Performance Trend (1/2) Consolidated Financials AUM (₹ Mn) Loan Disbursements (₹ Mn) * Includes off book Assets - ₹ 974 Mn 21,830 22,606 74,701 77,665 * 77,482 60,595 14,694 44,140 50,435 13,048 11,766 8,540 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q2 FY18 Q3 FY

  14. Slide 14: Q3 FY19: Encouraging Quarterly Performance Trend (2/2)

    Q3 FY19: Encouraging Quarterly Performance Trend (2/2) Consolidated Financials NPA (%)* PAT (₹ Mn) 1.9% 694 713 1.7% 640 1.3% 1.2% 0.9% 0.9% 394 405 1.6% 1.4% 315 1.1% 1.0% 0.6% 0.6% Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 GNPA % NNPA % * GNPA

  15. Slide 15: Corporate Lending: Calibrated disbursements in Q3 (1/3)

    Corporate Lending : Calibrated disbursements in Q3 (1/3) Gross Disbursements (₹ Mn) Corporate Lending AUM (₹ Mn) 52,519 48,665 16,106 15,351 44,327 44,803 38,533 34,565 11,299 8,772 4,127 2,856 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 AUM Breaku

  16. Slide 16: Corporate Lending: Strong Profitability (2/3)

    Corporate Lending : Strong Profitability (2/3) Particulars (₹ Mn) Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Q3 FY 19 Revenue from Operations 1,589 1,461 1,577 1,614 2,206 1,940 Interest Expenses (536) (522) (627) (722) (836) (789) Net Interest Income 1,053 939 950 892 1,370 1,151 People Costs 69

  17. Slide 17: Corporate Lending: Key ratios (3/3)

    Corporate Lending : Key ratios (3/3) Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Q3 FY 19 Revenue from Operations* 16.8% 15.5% 14.7% 13.4% 16.7% 15.7% Net Interest Income * 11.1% 9.9% 8.9% 7.4% 10.4% 9.3% Operating Expenses * 0.8% 0.7% 0.5% 0.4% 0.5% 0.2%  Consistent growth and profitability Cost

  18. Slide 18: Retailisation Strategy Continues with Strong Momentum

    Retailisation Strategy Continues with Strong Momentum Rising Proportion of Retail Lending in the Overall AUM and Disbursements AUM: CL vs Retail (%) Disbursements: CL vs Retail (%) 44,140 50,435 60,595 74,701 77,665 77,482 11,766 14,694 21,830 22,606 13,048 8,540 22% 24% 25.4% 23% 26% 27% 30% 32% 37

  19. Slide 19: Retail expansion on track: Calibrated disbursements in Q3

    Retail expansion on track : Calibrated disbursements in Q3 Retail AUM (₹ Mn) Retail Disbursements (₹ Mn) 32,680 29,000 8,921 9,823 7,100 22,182 7,170 3,674 3,981 3,311 4,241 5,684 5,636 16,268 2,804 1,757 1,290 1,158 512 1,681 11,902 374 145 3,395 1,294 3,542 9,575 140 2,994 143 4 5 144 18,589 18,61

  20. Slide 20: Branch Network

    Branch Network  Phase 1 of Retail Business roll-out completed 159 Branches Across 17 States  Significant investments in people & infrastructure Early Identification and Rapid Branch Expansion 159 155 129 * Some branches have multiple operating segments 91 142 136 39 114 75 60 10 56 31 40 46 5 15 1

  21. Slide 21: SME Business: Calibrated volume growth in Q3 (1/3)

    SME Business : Calibrated volume growth in Q3 (1/3) SME Finance – Monthly Disbursement Trend (₹ Mn) 1,516 1,467 1,257 1,332 1,244 1,202 1,177 1,111 1,124 1,035 921 829 746 499 344 250 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 April-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 

  22. Slide 22: SME Business is Profitable (2/3)

    SME Business is Profitable (2/3) Particulars (₹ Mn) Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Q3 FY 19 Revenue from Operations 277 311 346 425 539 594 Interest Expenses (124) (150) (193) (230) (284) (303) Net Interest Income 153 161 152 196 255 292 People Costs 59 57 39 53 56 40 Operating Expense

  23. Slide 23: SME Business: Key ratios (3/3)

    SME Business : Key ratios (3/3) Branches & Employees Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Q3 FY 19 Revenue from Operations * 12.8% 11.8% 10.8% 11.2% 12.4% 13.0% Net Interest Income 7.1% 6.1% 4.8% 5.2% 5.9% 6.4% 77 76 86 60 64 65 Operating Expenses * 3.3% 3.0% 1.9% 1.9% 1.8% 1.3% Cost / Incom

  24. Slide 24: Vehicle Finance: Continued strong growth in Q3 (1/3)

    Vehicle Finance : Continued strong growth in Q3 (1/3) Vehicle Finance – Monthly Disbursement Trend (₹ Mn) 1,728 1,305 1,186 1,183 1,076 989 971 758 825 568 368 223 Jan-18 Feb-18 Mar-18 April-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18  Commenced VF disbursements in December 2017  Co

  25. Slide 25: Vehicle Finance: Profitability is improving (2/3)

    Vehicle Finance : Profitability is improving (2/3) Particulars (₹ Mn) Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Q3 FY 19 Revenue from Operations - 0 25 101 231 346 Interest Expenses (0) (1) (9) (38) (89) (139) Net Interest Income - (0) 16 63 141 207 People Costs 10 32 77 95 119 97 Operating Expen

  26. Slide 26: Vehicle Finance: Key ratios (3/3)

    Vehicle Finance : Key ratios (3/3) Branches & Employees Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Q3 FY 19 Revenue from Operations * n.a. n.a. 16.8% 15.8% 17.2% 17.1% Net Interest Income* n.a. n.a. 10.5% 9.9% 10.6% 10.3% 1,030 1,010 883 Operating Expenses * n.a. n.a. 84.7% 31.7% 16.9% 10.6% 604 C

  27. Slide 27: Housing Finance Business: Calibrated disbursements in Q3 (1/3)

    Housing Finance Business : Calibrated disbursements in Q3 (1/3) Housing Finance – Monthly Disbursement Trend (₹ Mn) 570 601 564 510 398 415 331 363 255 271 110 9 Jan-18 Feb-18 Mar-18 April-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18  Consistent month-over-month growth in AUM and disb

  28. Slide 28: Housing Finance Business: Revenue traction improving (2/3)

    Housing Finance Business : Revenue traction improving (2/3) Particulars (₹ Mn) Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Q3 FY 19 Revenue from Operations 0 1 9 31 75 # 133 Interest Expenses (0) (1) (4) (16) (41) (63) Net Interest Income 0 1 5 15 33 70 People Costs 15 27 47 62 93 81 Operating Expe

  29. Slide 29: Housing Finance: Key ratios (3/3)

    Housing Finance : Key ratios (3/3) Branches & Employees Q2 FY 18 Q3 FY 18 Q4 FY 18 Q1 FY 19 Q2 FY 19 Q3 FY 19 Revenue from Operations* n.a. 18.8% 15.0% 12.5% 12.4% 14.3% Net Interest Income * n.a. 8.9% 8.4% 6.1% 5.5% 7.6% 418 391 Operating Expenses * n.a. 406.7% 100.8% 30.1% 20.4% 11.3% 341 370 Cost

  30. Slide 30: Discussion Summary

    Discussion Summary  Quarterly Results  Business Strategy & Performance  Company Overview  Shareholding Structure

  31. Slide 31: Quick Snapshot

    Quick Snapshot 1. First Indian NBFC 6. Robust Risk Management & promoted by Global PE Investors Scalable Technology Platform • Incorporated in 2011, sponsored by Everstone • Strong credit underwriting processes Capital and other marque investors • Active Board oversight • Listed on NSE & BSE in May-

  32. Slide 32: Retail Lending: Focus on High Growth Segments

    Retail Lending: Focus on High Growth Segments Commenced Retail Lending in 2015 with Focus on High Growth Segments Vehicle Finance to be the primary growth engine, while Housing Finance and SME Finance to offer strategic leverage SME Finance Housing Finance Vehicle Finance • Commenced in FY 2016 • Co

  33. Slide 33: 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 (8.7% of diluted shares)  20+ years

  34. Slide 34: Entrepreneurial Leadership Team with Strong Sponsor Backing

    Entrepreneurial Leadership Team with Strong Sponsor Backing  24 years of experience with  20 years of experience financial Institutions with banks & financial  21 years of experience with banks Institutions & financial Institutions  Previously worked with Fullerton India, Citigroup,  Previously

  35. Slide 35: Strong & Distinguished Board

    Strong & Distinguished Board  13 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

  36. Slide 36: Robust Risk Management Framework

    Robust Risk Management Framework Organizational Framework Aligned Strong Credit / Underwriting Processes Followed by to Mitigate Risk Robust Monitoring Mechanism Business National Credit National Ops 1 Structured Credit Appraisal / Approvals Head Manager Head • Corporate: Pre-screened by corporate l

  37. Slide 37: Discussion Summary

    Discussion Summary  Quarterly Results  Business Strategy & Performance  Company Overview  Shareholding Structure

  38. Slide 38: Promoters Shareholding Structure

    Promoters Shareholding Structure Everstone1 48.00 % 57.02% Indostar Capital3 100.0% (Promoter) IndoStar Capital Finance Limited 52.00 % Promoter Group4 Other Investors2 3.27% Strong capital sponsorship of Everstone Group India and SEA US$5.0bn 6 ‘Private Equity Firm of the Year in India’ focused AuM

  39. Slide 39: Shareholding Pattern

    Shareholding Pattern Shareholding @ 31 Dec 2018 Major Shareholders Promoter & Promoter Group Management Team and Employees* Foreign SBI MF Company Body Trusts 2.5% Lenarco (Advent) Corporates 1.5% 5.0% ICICI Prudential Life Insurance Others Fidelity Emerging Markets Fund 8.6% HDFC MF SBI Amundi Fund

  40. Slide 40: For Further Queries

    For Further Queries Pankaj Thapar Nilesh Dalvi CFO IR Consultant Contact No: +91 22 4315 7036 Contact No: + 91 9819289131 Email – pthapar@indostarcapital.com Email – nilesh.dalvi@dickensonir.com Rajagopal Ramanathan Ravindra Bhandari IRO IR Consultant Contact No: +91 22 4315 7068 Contact No: 9283614

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