Csl Finance Limited · NSE:CSLFINANCE
Csl Finance — Q4 FY23 Earnings Presentation
43 slides from Csl Finance's earnings presentation, May 16, 2023
Slide 1: Cover letter to stock exchanges
CIN: L74899DL1992PLC051462 May 16, 2023 National Stock Exchange of India Limited BSE Limited Exchange Plaza, Corporate Relationship Department, C-1, Block-G, Bandra Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (E), Mumbai – 400051 Dalal Street, Mumbai-400001 NSE Symbol: CSLFINANCE BSE Scrip Code
Slide 2: Q4 & FY23 Investor Presentation
Q4 & FY23 Investor Presentation MAY 2023
Slide 3: Inside the document
Inside the document 01 FY23 PERFORMANCE 02 QUARTERLY BUSINESS UPDATE 03 ABOUT 04 PRUDENT CSL FINANCE RISK MANAGEMENT 05 LEADERSHIP 06 STRATEGY CSL FINANCE LIMITED
Slide 4: FY23 Performance
01/ FY23 Performance At A Glance Operational Performance Financial Performance CSL FINANCE LIMITED
Slide 5: CSL Finance At A Glance
CSL FINANCE LIMITED 4 CSL Finance At A Glance Scale of Loan Book Asset Liability Distribution Profitability Operations Granularization Quality Profile ₹ 736 Crore 26 99.7% 0.61% 15 ₹ 88 Crore Up 41% in FY23 Loan Book Branches Secured Loan Book GNPA Active Lender Relationships Up 41% in FY23 Net Inte
Slide 6: FY23 - Financial Performance
BUSINESS VERTICAL CSL FINANCE LIMITED 5 FY23 - FINANCIAL PERFORMANCE 42% LOAN BOOK GROWTH RATIONALISATION OF AUM-MIX SUPERIOR & IMPROVING COMFORTABLE LEVERAGE (₹ crore) IN FAVOUR OF SME VERTICAL ASSET QUALITY FURTHER HEADROOM TO GROW (%) (%) (₹ crore) 1.13 736 42% 27 40 1.73 ₹362 Cr 520 YOY Change N
Slide 7: FY23 - Operational Performance
BUSINESS VERTICAL CSL FINANCE LIMITED 6 FY23 - OPERATIONAL PERFORMANCE BRANCH NETWORK AUM PER BRANCH: LOAN ACCOUNTS: LENDING PARTNERS TEAM STRENGTH (#) SME (Excluding MSL) SME (Excluding MSL) (#) (#) (₹ lakhs) (#) 4 72% 43% 7 29% Net Branch Additions YOY Change YOY Change New Lenders Onboarded YOY C
Slide 8: Quarterly Business Update
01/ CSL FINANCE LIMITED Quarterly Business Update Loan Book Size Treasury Update Asset Quality Quarterly Financial Snapshot Asset Quality: Stage Analysis Operational Updates P&L Highlights Lending Partners CSL FINANCE LIMITED
Slide 9: Loan Book Size
CSL FINANCE LIMITED 8 Loan Book Size DISBURSEMENTS COLLECTIONS LOAN BOOK COLLECTION EFFICIENCY (₹ crore) (₹ crore) (₹ crore) (%) -25% -21% -15% -22% 41% 8% Wholesale SME Retail YOY Change QOQ Change YOY Change QOQ Change YOY Change QOQ Change 228 736 173 681 100 100 100 10099 100 167 98 98 98 98 197
Slide 10: Asset Quality
CSL FINANCE LIMITED 9 Asset Quality GROSS NPA NET NPA PROVISIONAL COVERAGE RATIO (%) (%) (%) -112 BPS -11 BPS -61 BPS -7 BPS YOY Change QOQ Change YOY Change QOQ Change 1.73 0.96 206 1.31 173 0.78 161 0.84 116 0.48 102 0.72 0.42 0.61 0.35 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY2
Slide 11: Asset Quality: Stage Analysis
CSL FINANCE LIMITED 10 Asset Quality: Stage Analysis CLASSIFICATION OF ASSETS BASIS THE ECL COMPUTATION AS PER IND-AS: PARTICULARS Q4FY22 Q3FY23 Q4FY23 Gross Stage 3 (GNPA) 8.96 4.89 4.47 % portfolio in Stage 3 1.73% 0.72% 0.61% ECL provision Stage 3 4.00 2.08 1.92 Net Stage 3 4.95 2.81 2.55 ECL Pro
Slide 12: P&L Highlights
CSL FINANCE LIMITED 11 P&L Highlights NET INTEREST INCOME TOTAL INCOME PROFIT AFTER TAX YIELDS (₹ crore) (₹ crore) (₹ crore) (%) 36% -1% 46% 8% 36% 0% YOY Change QOQ Change YOY Change QOQ Change YOY Change QOQ Change 23.6 23.5 21.3 33.7 11.9 11.9 19.3 19.1 19.0 19.0 19.0 19.3 31.3 17.2 27.4 11.2 16.
Slide 13: Treasury Update
CSL FINANCE LIMITED 12 Treasury Update LEVERAGE LIQUIDTY (times) (₹ crore) The Company has adequate liquidity Credit Rating for the of ₹ 60.73 crore and Company stands at undrawn Credit BBB+ Stable from facilities as on India Ratings & 1.13 Research 60.73 31st March 2023 0.98 0.78 0.64 0.65 38.19 33
Slide 14: Quarterly Financial Snapshot
CSL FINANCE LIMITED 13 Quarterly Financial Snapshot (₹ crore) PARTICULARS Q4FY22 Q3FY23 Q4FY23 Disbursements 196.60 186.57 147.37 Revenue 23.09 31.29 33.74 Interest Income 19.35 28.63 30.9 PBT 14.26 15.86 16.42 PAT 10.87 11.90 11.9 Bad debts written off - 0.93 0.94 Bad debts recovered 1.82 0.24 0.77
Slide 15: Operational Updates
CSL FINANCE LIMITED 14 Operational Updates NET INTEREST INCOME & PROFITABILITY LENDING PARTNERS & LEVERAGE • Net Interest Income growth has been less than Total Income growth, in both Q4 and FY23, due to: • CSL Finance onboarded four new lenders during the quarter, namely, 1. Newer interest rates (l
Slide 16: Lending Partners
CSL FINANCE LIMITED 15 Lending Partners NBFC Banks & SFBs Tourism Finance Corporation of India Limited Kotak Mahindra Investments Limited
Slide 17: 5Y Financial Snapshot
CSL FINANCE LIMITED 16 5Y Financial Snapshot (₹ crore) PARTICULARS FY19 FY20 FY21 FY22 FY23 Disbursements 346.19 270.10 433.32 491.10 758.72 Revenue 59.70 60.85 61.67 74.62 117.54 Interest Income 54.97 58.42 59.18 67.66 108.54 PBT 34.06 31.74 39.36 44.98 61.47 PAT 25.15 22.47 27.53 33.68 45.52 Bad d
Slide 18: About CSL Finance
02/ About CSL Finance Introduction & Snapshot Wholesale Business SME Retail Verticals & Products CSL FINANCE LIMITED
Slide 19: Introduction
CSL FINANCE LIMITED 18 Introduction CSL Finance Limited is a Non-Banking ₹ 736 Crore Loan Book Finance Company registered with the Reserve Bank of India and listed on the NSE and BSE. The Company is a one-stop destination for Small and Medium-Sized Enterprises (SMEs) and real estate and non-real est
Slide 20: Business Verticals & Products
CSL FINANCE LIMITED 19 Business Verticals & Products Wholesale SME Retail WS SME WS WS OTHER SME MID- LARGE SMALL TERM RETAIL SIZED LOAN LAP Structured loans for Construction loan Loan against Micro/Small Loans to Kirana Loan against properties for Mid Income/ given against single SORP/SOCP properti
Slide 21: Wholesale
BUSINESS VERTICAL CSL FINANCE LIMITED 20 Niche, focused, real estate wholesale book Focused on secured lending book (100% of the book) WHOLE Built on in-depth expertise of NCR and all its micro-markets SALE Strength in affordable housing segment
Slide 22: Wholesale (1/3)
BUSINESS VERTICAL CSL FINANCE LIMITED 21 Wholesale (1/3) PRODUCTS WS WS WS OTHER LARGE SMALL TERM LOAN AUM (₹ crore) ₹ 254 Crore ₹ 172 Crore ₹ 18 Crore CONTRIBUTION TO WHOLESALE AUM 57% 39% 4% LOAN ACCOUNTS 31 30 4 As at 31st March 2023
Slide 23: Wholesale (2/3)
BUSINESS VERTICAL CSL FINANCE LIMITED 22 BETTER CUSTOMER SELECTION: STRONG SOURCING • Presence in strategically selected micro-markets of NCR • Excellent understanding of dynamics of each micro-market • Customer selection based on end-use demand • Primarily involved in last-mile funding, thus reduci
Slide 24: Wholesale (1/3)
BUSINESS VERTICAL CSL FINANCE LIMITED 23 Wholesale (1/3) ACTIVE ACCOUNTS AVERAGE LOAN-TO-VALUE AVERAGE TICKET SIZE AVERAGE TENURE (#) (%) (₹ crore) (Year) 64 43 42 12 12 3 3 3 3 3 40 11 11 52 36 50 50 49 33 9 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23
Slide 25: Wholesale Large: Affordable Group Housing
BUSINESS VERTICAL CSL FINANCE LIMITED 24 Wholesale Large: Affordable Group Housing 39% Contribution to Wholesale loan book Approved projects under the Affordable Committed Receivables Housing Policy of are 3x of existing POS Haryana Government Average ticket size Time-linked payment of units is unde
Slide 26: Wholesale Large: Mid-Income Group Housing
BUSINESS VERTICAL CSL FINANCE LIMITED 25 Wholesale Large: Mid-Income Group Housing 17% Contribution to Wholesale loan book Last-mile funded Mid-Income Group Committed Receivables Housing projects are 3x of existing POS Average ticket size Located in of units is under NCR region Salient Features ₹60
Slide 27: Wholesale Small: Small Builders
BUSINESS VERTICAL CSL FINANCE LIMITED 26 Wholesale Small: Small Builders Regulatory compliances are 44% Contribution to minimal as these projects don’t Tenure of these loans Wholesale loan fall under RERA compliances book is under 36 months Risk of non-completion of Small Builder Floors projects is
Slide 28: SME Retail
BUSINESS VERTICAL CSL FINANCE LIMITED 27 Target market: Unbanked & underserved Using alternative data instead of conventional scorecards Swift loans and ease of application SME Small & flexible ticket sizes Achieving efficiency through RETAIL digital transformation Focused on secured lending book (9
Slide 29: SME Retail (1/5)
BUSINESS VERTICAL CSL FINANCE LIMITED 28 SME Retail (1/5) PRODUCTS MID JYOTI SAARTHAK SHAKTI SAMADHAN NIRMAN SIZE LAP LOAN AMOUNT ₹2-7.5 Lakhs ₹5-10 Lakhs ₹7.5- 25 Lakhs ₹25-50 Lakhs ₹35-50 Lakhs ₹1-5 Crores TENOR (in years) 3-4 5-6 7 7-8 7 2-3 TARGET CUSTOMER Small farmers, house- Salaried Small en
Slide 30: SME Retail (2/5)
BUSINESS VERTICAL CSL FINANCE LIMITED 29 SME Retail (2/5) PRESENCE BRANCH AGEING < 1 year 35% PUNJAB 04 | 16% HARYANA 04 | 13% NCR 03 | 10% 26 1- 3 years 35% BRANCH NETWORK RAJASTHAN GUJARAT UTTARAKHAND AUM > 3 years DISTRIBUTION 30% 07 | 32% 06 | 23% 02 | 6% (in %) Clustered Approach to expanding b
Slide 31: SME Retail (3/5)
BUSINESS VERTICAL CSL FINANCE LIMITED 30 SME Retail (3/5) AUTOMATING WORKFLOW TO IMPROVE EFFICIENCY LOAN LOAN LOAN ORIGINATION DISBURSEMENT EVALUATION & COLLECTION • Customer on-boarding & authentication • eKYC • 100% cashless, E-disbursement of loan amount • Geotagging of business premise and resid
Slide 32: SME Retail (4/5)
CSL FINANCE LIMITED 31 SME Retail (4/5) Ro a d ma p Go ing Fo rwa rd H1 FY24 • Incentive Management System • Business Rule Engine • Multiple Bureau Checks & Analysis through various credit bureaus • Airtel Payments Bank Integration for cash deposit point 20 22 • Data Analytics Migrated to a bespoke
Slide 33: SME Retail (5/5)
BUSINESS VERTICAL CSL FINANCE LIMITED 32 SME Retail (5/5) ACTIVE ACCOUNTS AVERAGE LOAN-TO-VALUE AVERAGE TICKET SIZE AVERAGE TENURE (#) (%) (₹ lakh) (Year) SME SME SME SME 2,076 34 10 10 1,876 9 9 6 6 6 6 6 1,686 27 27 26 26 1,449 1,530 7 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q4FY22 Q1FY23 Q2FY23 Q3FY23
Slide 34: Prudent Risk Management
03/ Prudent Risk Management Well Managed ALM Conservative Leverage Standards CSL FINANCE LIMITED
Slide 35: Well Managed ALM
CSL FINANCE LIMITED 34 Well Managed ALM CUMULATIVE INFLOW - OUTFLOW 3 7 58 103 269 279 0 400 362 350 327 300 250 200 161 150 129 100 81 84 84 60 57 64 54 50 34 30 31 0 >1 month >2-3 month >3-6 month >6-12 months 1-3 Years 3-5 Years Over 5 Years Total Inflow Total Outflow
Slide 36: Conservative Leverage Standards
CSL FINANCE LIMITED 35 Conservative Leverage Standards CONSERVATIVE LEVERAGE THRESHOLD: 1.5-2X in Wholesale & <4X in SME 400 90% 362 79% 350 80% 73% 320 65% 66% 70% 300 64% 259 60% 250 233 215 ₹30 50% Crore 200 184 Equity Fund 50% raise in 40% ₹54 FY22 150 Crore 1.13 30% Equity Fund raise in 100 FY1
Slide 37: Leadership
04/ Leadership Board of Directors Leadership Team CSL FINANCE LIMITED
Slide 38: Board of Directors
CSL FINANCE LIMITED 37 Board of Directors ROHIT GUPTA ASHOK KUMAR PARMOD BINDAL CHANDER SUBHASH MANAGING DIRECTOR KATHURIA INDEPENDENT DIRECTOR KWATRA DIRECTOR INDEPENDENT DIRECTOR Mr Rohit Gupta has over two decades of Mr Kathuria has been associated with the Company Mr Parmod Bindal has been a Cha
Slide 39: Management Team
CSL FINANCE LIMITED 38 Management Team Work Experience Years at CSL ROHIT GUPTA NARESH VARSHNEY AMIT RANJAN CHANDAN KUMAR RACHITA GUPTA RANJAN BANERJEE MANAGING CHIEF FINANCIAL CHIEF WHOLESALE WHOLE-TIME DIRECTOR ZONAL CREDIT HEAD SME DIRECTOR OFFICER OPERATING OFFICER CREDIT HEAD 28+ 17+ 26+ 8+ 18+
Slide 40: Strategy
05/ Strategy Strategic Priorities Key Takeaways CSL FINANCE LIMITED
Slide 41: Strategic Priorities
CSL FINANCE LIMITED 40 Strategic Priorities FULL-FLEDGED LAUNCH OF LEVERAGING CUSTOMER RATIONAL- OPTIMISING FOCUSING ON CREDIT RATING TECHNOLOGY ONBOARDING & ISATION OF BRANCH ADDING CORE UPGRADE TO STRENGTHEN LOAN OPERATIONS PORTFOLIO PERFORMANCE COMPETENCIES UNDERWRITING PLATFORM • In the recent c
Slide 42: Key Takeaways
CSL FINANCE LIMITED 41 01 WELL CAPITALISED CSL is a well-capitalised lender with a superior Capital Adequacy Ratio. 02 BBB+ RATED CSL has recently upgraded to BBB+, achieving the crucial AA credit rating will help in raising debt at competitive terms, and open doors to a new set of lenders. Key 03 G
Slide 43: Safe Harbour
CSL FINANCE LIMITED 42 Safe Harbour This presentation may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations and on certain assumptions of the management of CSL Finance Limited (“CSL”). Actual results may vary from the forward-l