Poonawalla Fincorp Limited · NSE:POONAWALLA
Poonawalla Fincorp — Q1 FY2024 Earnings Presentation
46 slides from Poonawalla Fincorp's earnings presentation, Jul 24, 2023
Slide 1: Exchange cover letter for investor presentation
July 24, 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 NSE
Slide 2: Poonawalla Fincorp Limited Investor Presentation Q1FY24
Poonawalla Fincorp Limited Investor Presentation Q1FY24 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 27 5 Digital Transformation Journey So Far & Way Forward 34 6 Board Members and Awards & Accolades 40 2
Slide 4: Q1FY24 Performance – PFL Standalone
Q1FY24 Performance – PFL Standalone Excellent Quarter on All Fronts Differentiated strategy and execution excellence led to all round performance across business growth, credit quality & profitability Highest ever quarterly disbursement AUM Disbursement ₹ 17,776 crore ₹ 7,063 crore +41% YoY | +10% Q
Slide 5: Executive Summary – PFL Standalone
Executive Summary – PFL Standalone Setting the momentum for expanding growth horizon Strong Business Momentum Continues in Q1FY24 ▪ Highest ever disbursement (entirely organic) of ₹ 7,063 crore with growth across all product lines ▪ Consistent increase in disbursement: Up 143% YoY & 11% 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 1.42% and 0.76% respectively compared to 1.44% & 0.78% in Q4FY23 and as compared to 2.68% & 1.11% in Q1FY23 ▪ Stage 3 PCR stood at 46.4% as on June 30, 2023 Rise in Pr
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 27 5 Digital Transformation Journey So Far & Way Forward 34 6 Board Members and Awards & Accolades 40 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 (Q1FY24 status) To be amongst the Top 3 NBFCs in consumer and Product diversification to have large presence in MSME segment chosen segments. Leadership in select products achieved Ris
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 66% YoY 4.4x 7,063 1.9x 6,371 17,115 15,198 12,738 11,616 3,369 10,325 3,110 8,791 2,379 1,60
Slide 13: Diversified Assets Under Management
1b Diversified Assets Under Management PFL Standalone Contribution In ₹ crore MSME Unsecured 6,352 36% (BL, LTP and SCF) Personal and Consumer 3,448 19% Loan Against Property 2,866 16% • Pure retail portfolio with focus on MSME and Consumer segment. Pre-owned Car 2,848 16% • AUM well diversified acr
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 1.42 0.78 0.76 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Chosen market segment, Prudent
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 50 bps since Q4FY22 Average Cost of Borrowing (PFL) 9.1% 8.0% 8.0% 7.9% 7.5% 7.5% 7.2% 7.0% Repo rate hike → Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23
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 27 5 Digital Transformation Journey So Far & Way Forward 34 6 Board Members and Awards & Accolades 40 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 Low Low Low Credit Risk Cost of Operating Cost Risk Customers Cost Adjusted
Slide 25: Opportunity Sizing – Bureau Based
Opportunity Sizing – Bureau Based Total Live Consumers % Represents YoY Growth [220 Million] % Represents high YoY Growth & Poonawalla Focus Segments +10% 1 account [61%] 2+ accounts [39%] +20% Mortgages Single Product Multiple Products -2% [6%] +17% +20% [9%] [29%] Consumption Only Unsecured +19% [
Slide 26: How we are growing and the road ahead
How we are growing and the road ahead Portfolio Mix Tenure Mix Secured Portfolio 45% Short Term (Upto 12 mths) 26% Current Unsecured Portfolio 55% Medium & Long Term (>12 mths) 74% 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: Agenda – PFL Standalone
Agenda – PFL Standalone 1 Overview & Executive Summary 2 2 Strategy Execution 6 3 Our Fintech Play 20 4 Business & Financial Highlights 27 5 Digital Transformation Journey So Far & Way Forward 34 6 Board Members and Awards & Accolades 40 27
Slide 29: Performance Parameters
Performance Parameters Robust growth continues | Significant reduction in GNPA & NNPA - PFL Standalone In ₹ crore Disbursement AUM Net-worth Focussed Discontinued 6,649 7,063 6,425 6,371 17,776 6,212 16,143 661 6,018 13,929 945 5,878 12,606 13,161 3,110 3,369 11,765 5,715 2,901 1,192 2,539 1,545 2,2
Slide 30: ALM statement and Liquidity
ALM statement and Liquidity PFL Standalone Structural Liquidity Statement as on June 30, 2023 Cumulative inflows (₹ in crore) Cumulative outflows (₹ in crore) 23,273 23,273 21,027 19,173 16,182 14,071 13,477 11,345 9,242 8,416 7,912 4,934 2,779 2,791 3,322 2,151 1,308 1,039 62 202 0-7 days 8-14 days
Slide 31: Asset Quality
Asset Quality Significant improvement on sustained basis - PFL Standalone Particulars Jun-22 Mar-23 Jun-23 Stage 1 & 2 Assets 97.32% 98.56% 98.58% Gross Stage 3 (₹ in crore) / GNPA* 327 225 245 Net Stage 3 (₹ in crore) / NNPA* 134 121 131 Gross Stage 3 / GNPA* 2.68% 1.44% 1.42% Net Stage 3 / NNPA* 1
Slide 32: Profit & Loss Statement - PFL Standalone
Profit & Loss Statement - PFL Standalone In ₹ crore Q1FY23 Q4FY23 Q1FY24 YoY QoQ Total Income 429 581 712 66% 23% Interest Expenses 119 173 235 98% 36% Operating Expenses 192 196 183 -4% -7% Operating Profit 119 212 294 148% 39% Credit Cost (16) (25) 27 - - Profit after Tax 124 181 200 62% 11% 31
Slide 33: Balance Sheet - PFL Standalone
Balance Sheet - PFL Standalone In ₹ crore 30-Jun-22 31-Mar-23 30-Jun-23 YoY Cash & Bank Balances 249 657 308 24% Receivables 19 21 21 11% Loans 11,461 15,229 17,031 49% Investments 1,034 311 504 -51% Other Financial Assets 333 571 614 85% Non-Financial Assets 533 1,232 1,201 125% Total Assets 13,628
Slide 34: 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 35: Agenda – PFL Standalone
Agenda – PFL Standalone 1 Overview & Executive Summary 2 2 Strategy Execution 6 3 Our Fintech Play 20 4 Business & Financial Highlights 27 5 Digital Transformation Journey So Far & Way Forward 34 6 Board Members and Awards & Accolades 40 34
Slide 36: 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 37: Strong Roots of Digital, Technology & Analytics
Strong Roots of Digital, Technology & Analytics Successfully implemented in Phase 1 Customer Relationship Rule Engine Loan Management Collection Management Loan Origination Platform Management Platform Platform Platform Core Platform Lead generation Onboarding Real time Analysis Loan Servicing Dues
Slide 38: 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 39: Phase 2: Journey Started..
Phase 2 :Journey Started.. On track to deliver it over next 2 Quarters (~70% work completed in Q1FY24) 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 40: 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 41: Agenda – PFL Standalone
Agenda – PFL Standalone 1 Overview & Executive Summary 2 2 Strategy Execution 6 3 Our Fintech Play 20 4 Business & Financial Highlights 27 5 Digital Transformation Journey So Far & Way Forward 34 6 Board Members and Awards & Accolades 40 40
Slide 42: 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 43: Awards and Accolades
Awards and Accolades Risk Management Corporate Governance Customer Centricity Awarded with ‘Excellence Best Customer ‘Risk Management Team in Corporate Governance’ Experience providing of the Year’ at UBS at UBS Forum’s Audit and NBFC at Quantic India Forum’s CRO Summit and Risk Summit & Awards Exce
Slide 44: 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 45: 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 46: Thank You
THANK YOU Team – Investor Relations Investor.relations@poonawallafincorp.com