Spandana Sphoorty Financial Limited · NSE:SPANDANA
Spandana Sphoorty Financial — Q3 FY2020 Earnings Presentation
35 slides from Spandana Sphoorty Financial's earnings presentation, Jan 28, 2020
Slide 1: Cover letter to stock exchanges
SPAN DANA Ref: SSFIjStock Exchangej2019-20j39 Date: January 28, 2020 To To BSE Limited, National Stock Exchange of India Limited, Department of Corporate Services Listing Department P. J. Towers, 25 th Floor, Exchange Plaza, C-1, Block G Dalal Street, Bandra Kurla Complex, Bandra (E) Mumbai - 400001
Slide 2: Spandana Sphoorty Financial Limited Investor Presentation
Spandana Sphoorty Financial Limited ….Committed to low-income households Investor Presentation 16 January 2020 Years
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Spandana Sphoorty Financial Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe f
Slide 4: Performance Snapshot
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 3
Slide 5: Performance Snapshot
Performance Snapshot Net Worth Largest Microfinance Company in terms of Profit Before Tax (PBT) No presence in Leverage (Rs. Crs.) Assam state 1.2x 2,505 2nd Largest Microfinance Company in terms of Market Capitalization Marginal Cost of GNPA / NNPA Capital Adequacy Borrowing (Q3) 3rd Largest Microf
Slide 6: Q3FY20 – Key Performance Highlights
Q3FY20 – Key Performance Highlights Disbursement (Rs. Crs) No. of Borrowers (In lakhs) No. of Branches No. of Employees +63% +3% +7% +26% 1,971 23.8 24.6 980 7,545 913 6,000 Operating 1,209 Metrics Q3FY19 Q3FY20 Dec-18 Dec-19 Dec-18 Dec-19 Dec-18 Dec-19 Total Income (Rs. Crs) Net Interest Income (Rs
Slide 7: Key Operating Metrics
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 6
Slide 8: Operational Summary
Operational Summary AUM (Rs. Crs) Disbursements (Rs. Crs.) Borrowers (In lakhs) +40% +3% CAGR 5,681 CAGR 5,879 24.6 23.8 24.6 CAGR +55% +53% 4,969 +84% 4,372 4,204 3,858 15.9 3,166 2,059 10.6 1,297 Mar-17 Mar-18 Mar-19 Dec-18 Dec-19 FY17 FY18 FY19 Dec-19 Mar-17 Mar-18 Mar-19 Dec-18 Dec-19 No. of Bra
Slide 9: Rising Branch and Employee Productivity
Rising Branch and Employee Productivity Borrowers/Branch (#) AUM/Borrower (Rs.) Borrowers/Loan Officer (#) +36% Excl. Trainees Incl. Trainees CAGR -4% CAGR +17% +21% 700 700 2,658 2,611 23,940 2,506 577 2,285 19,970 534 17,780 17,635 558 1,948 667 12,236 568 567 526 440 Mar-17 Mar-18 Mar-19 Dec-18 D
Slide 10: Diversified Geographical Presence
Diversified Geographical Presence Well dispersed district level exposure Top States By Branch Network Well spread AUM Mix ensures low impact from region-specific issues Top States Number of Branches Madhya Pradesh 154 District wise Concentration Orissa 145 Karnataka 130 < 0.5% 208 Maharashtra 121 An
Slide 11: Key Financial Metrics
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 10
Slide 12: Financial Performance for Q3 FY20
Financial Performance for Q3 FY20 Total Income (Rs. Crs) Net Interest Income (Rs. Crs) Yield (%) Cost of Borrowings (%) +177% +182% -330 bps -690 bps -140 bps 1,049 623 29.5% 20.3% 25.7% 26.2% 25.4% -170 bps 24.0% +43% 14.2% 13.4% +22% 12.6% 588 341 10.9% 379 358 221 233 293 163 FY17 FY18 FY19 Q3 FY
Slide 13: Profit & Loss Statement
Profit & Loss Statement Particulars Q3 FY20 Q3 FY19 Y-o-Y Q2 FY20 Q-o-Q* 9MFY20 9MFY19 Y-o-Y Revenue from Operations Interest and Fee Income 292.0 268.2 302.4 871.6 741.0 Fees and Commission 8.8 3.8 5.9 19.6 11.5 Net gain on fair value changes 46.8 18.0 48.3 109.9 22.9 Other Operating Income 2.4 1.1
Slide 14: Balance Sheet
Balance Sheet ASSETS (Rs. Crs.) Dec 31, 2019 Sep 30, 2019 Mar 31, 2019 LIABILITIES & EQUITY (Rs. Crs.) Dec 31, 2019 Sep 30, 2019 Mar 31, 2019 Financial Assets Financial Liabilities Cash and cash equivalents 491.3 781.0 148.6 Debt Securities 881.0 1,177.1 1,372.0 Bank Balances other than cash and cas
Slide 15: Diversified Borrowing Profile
Diversified Borrowing Profile Borrowings (Rs. Crs) Diversified Funding Mix (As on Dec-19) Improving Credit Rating (3 upgrades by ICRA in two years) 2,968 2,971 1% 5% Private Banks 2,331 8% A- 3% Public Sector Banks Mar-19* Small Finance Banks (Stable) 51% NBFCs 933 33% FPIs Mutal Funds BBB+ Mar-17 M
Slide 16: Positive Asset-Liability Gap & Comfortable Liquidity Position
Positive Asset-Liability Gap & Comfortable Liquidity Position Positive ALM Mismatch (Rs. Crs) Dec 19 – Liquidity Position 1,564 Liabilities Cash & Cash Equivalents Rs. 491 Crs Assets Unavailed Sanctions Rs. 1,010 Crs 1,167 1,089 1,090 929 Well Capitalized for Growth 750 617 Particulars (Rs. Crs ) Q4
Slide 17: Spandana at a Glance
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 16
Slide 18: Company Overview
Company Overview ▪ Founded by Padmaja Reddy who has over 24 years of experience in development and microfinance sector ▪ Operating as an NBFC since 2004 and NBFC-MFI since 2015 ▪ By March 2010, we were the 2nd largest MFI in India in terms of AUM and borrowers and were one of the most profitable pla
Slide 19: Focused on Rural Markets
Focused on Rural Markets MFIs - Urban vs. Rural AUM Split* MFIs - Urban vs. Rural Industry Portfolio Quality* 4.15% 10% 2.37% 46% Spandana MFI Industry 54% (Dec 31, 2019) 0.86% 0.99% 0.94% 1.00% 90% 1 - 30 31-180 180+ Rural Urban Rural Urban ▪ Close to 68% of India’s population live in rural areas#
Slide 20: Our Products
Our Products Product Name Purpose Interest Rate (%) Tenor Ticket Size (Rs.) Core Product: 98% of AUM • Abhilasha stands for “Aspiration” • This unique loan is designed especially for low-income households who aspire to improve their financial well-being Abhilasha 24 1 to 2 Years 25,000 to 80,000 • T
Slide 21: Efficient Business Process
Efficient Business Process 2 • Scanned Documents uploaded to the app directly • Data is entered directly into the app by the loan officer 1 and key data entry is 3 • Group Formation with 8 to 10 automated members • Group training, house visits, • KYC Document collection credit appraisal, group throu
Slide 22: Niche Business Model
Niche Business Model Business Model Processes HR policies ▪ Standardized systems and a front-end ▪ Group size of 8 to 10 women interface that gives real time ▪ Strict employee transfer policy with information on demand and collections adherence to operational risk control ▪ Loans given under Joint L
Slide 23: Learnings from Industry Cycles
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 22
Slide 24: Implemented Learning from AP Crisis
Implemented Learning from AP Crisis Diversified Geographical Presence No. of States and UT’s No. of Districts Top State Contribution Top 3 States Contribution present +5 17 +84 276 53% - 35% 81% - 32% 12 192 49% 18% Sep-10 Dec-19 Sep-10 Dec-19 Sep-10 Dec-19 Sep-10 Dec-19 Reduced Leverage Improved Ca
Slide 25: Strong Performance since CDR Exit
Strong Performance since CDR Exit 3rd Largest MFI Rs. Crs. CDR Exit in the Country* March-17 2.75Yrs Dec 19 4.5x Gross AUM (excl. old AP) 1,297 5,879 Net worth# 928 2.7x 2,505 Gross PAR 90+ 89@ Reduced by 82% 16 Profit before Tax 46 # 11x 510 Lenders 3 10x 31 Credit rating^ NA 3 Upgrades A - (Stable
Slide 26: Seasoned and Resilient Business Model
Seasoned and Resilient Business Model Challenges faced Spandana Approach Outcome • Kept on-ground presence in AP by keeping branches open and engaging with customers Andhra Pradesh (AP) • Managed recovery in old AP portfolio • Continuing operations in other states Crisis • Executed profitable operat
Slide 27: Key Takeaways
Key Takeaways Largest NBFC-MFI (PBT)* 2nd largest NBFC-MFI (Market cap)* 3rd Largest NBFC-MFI (AUM)* Rural High Geographic Well Capitalized Low Operating Focus Diversity Expenses 16 states 1 Union Territory 50.5% Capital Adequacy 90% portfolio in 276 districts Ratio 4.0% Opex ratio underserved rural
Slide 28: Annexure
1 Performance Snapshot 2 Key Operating Metrics 3 Key Financial Metrics 4 Spandana at a Glance 5 Learnings from Industry Cycles 6 Annexure All the data are on Consolidated basis Criss Financials Holdings Limited became subsidiary of Spandana Sphoorty Financial ltd. with effect from December 2018 27
Slide 29: Microfinance in India – Rs. 5-6 Tn opportunity
Microfinance in India – Rs. 5-6 Tn opportunity 3rd India has Urban Rural India is amongst Top 3 nations with 640,000 Particulars (# in Mn) Villages in rural India unbanked people No. of HHs (Census 2011) 78 168 Rural Villages have Rural India has 68% 10% No. of HHs (2018e) 90 180 of India’s populati
Slide 30: IPO Details
IPO Details Face Value Rs.10 Per Share Issue Price Rs. 856 Per Share Listed on NSE and BSE on 19th August 2019 Particulars Shares Rs. Crores Fresh Issue 4,543,385 389* Offer For Sale 9,356,725 801 Total 13,900,110 1,190 Shareholding Structure (%) Particulars Pre IPO Post IPO Promoter Holding 78.71%
Slide 31: Experienced Board of Directors
Experienced Board of Directors Ms. G Padmaja Reddy| Managing Director Sunish Sharma | Nominee Director, Kedaara Capital 01 She is post-graduation in management, worked in an NGO and later in 1998, started ‘Spandana’. She pursued various trainings on Microfinance – 06 He is the Managing Partner and c
Slide 32: Historical Profit & Loss Statement
Historical Profit & Loss Statement Particulars (Rs. Crs.) 31-Mar-19 31-Mar-18 31-Mar-17 Interest Income 998 573 371 Commission Income 15 4 4 Net gain on fair value changes 27 4 2 Others 4 6 1 Total Revenue from operations 1,043 587 377 Other income 5 0 2 Total Income 1,049 588 379 Finance cost 358 2
Slide 33: Historical Balance Sheet
Historical Balance Sheet ASSETS (Rs. Crs.) March 31, 2019 March 31, 2018 March 31, 2017 March 31, March 31, March 31, LIABILITIES & EQUITY (Rs. Crs.) 2019 2018 2017 Financial Assets Financial Liabilities Cash and cash equivalents 149 105 290 Debt Securities 1,372 1,015 - Bank Balances other than cas
Slide 34: Glossary
Glossary Sr. No. Particulars Formula 1 Networth Shareholders Fund + Other Equity excluding Non controlling interest 2 Capital Adequacy Tier I ratio + Tier II ratio 3 Leverage Closing On Balance sheet Borrowings / Closing Net worth 4 Marginal Cost of Borrowing (Borrowings availed during the period *
Slide 35: Thank You
Contact Information Company : Investor Relations Advisor : Spandana Sphoorty Financial Limited Strategic Growth Advisors Pvt. Ltd. CIN: L65929TG2003PLC040648 CIN: U74140MH2010PTC204285 Mr. Sudhesh Chandrasekar Ms. Payal Dave / Ms. Neha Shroff Chief Financial Officer E: payal.dave@sgapl.net / neha.sh
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