Fusion Finance Ltd · NSE:FUSION

Fusion Finance — Fusion Micro Finance — Q2 FY24 Earnings Presentation

43 slides from Fusion Finance's earnings presentation, Nov 6, 2023

Slide 1: Exchange submission letter for earnings presentation
Letter No. FMFL/SEC/2023-24/SE-93 Date: 06.11.2023 The Manager The Manager Listing Department Listing Department National Stock Exchange of India Limited BSE Limited Exchange Plaza, Plot No. C/1, G Block Bandra Phiroze Jeejeebhoy Towers Kurla Complex, Bandra (E), Mumbai - 400 051 Dalal Street, Mumba
Slide 2: Investor Presentation Q2 FY24
Creating Opportunities… Creating Investor Presentation Opportunities… Q2 FY24 Fusion Micro Finance Limited
Slide 3: Disclaimer
Disclaimer Creating Opportunities… By attending the meeting where this Presentation (“Presentation”) is made, or by reading the Presentation materials, you agree to be bound by the limitations contained herein and to maintain absolute confidentiality regarding the information disclosed in this Prese
Slide 4: Presentation Path
Presentation Path Creating Opportunities… Vision, Mission Business Executive Summary Overview & Values Our Presence Key Strengths Performance 1 2 33 44 5 6 November 6, 2023 | © Fusion Micro Finance Limited 3
Slide 5: Executive Summary
Creating Opportunities… Executive Summary 1 November 6, 2023 | © Fusion Micro Finance Limited 4
Slide 6: Executive Summary H1 FY24
Executive Summary H1 FY24 Creating Opportunities… Consistent AUM and Disbursement growth, YoY increase of 24.60% & 14.71% respectively Focus on new clients continues, added ~2.4 lakh, increase of 17.69% YoY Cost to Income reduced by 364 bps YoY Added ₹10.23 Cr to Management Overlay, stands at ₹61.48
Slide 7: Executive Summary Q2 FY24
Executive Summary Q2 FY24 Creating Opportunities… Profit after Tax of ₹125.69 Cr, QoQ growth of 4.34% 2 Rating upgrades in 11 months by CRISIL Reduction in Marginal Cost of Funds Expansion in NIM GNPA / NNPA reduced by 52 bps / 13 bps QoQ, stands at 2.68% / 0.65% Addition to Network – 2 states, 61 b
Slide 8: Performance Highlights
Performance Highlights Creating Opportunities… Key Metrics Q2 FY24 QoQ H1 FY24 YoY Total Income (₹ Cr) 571.26 3.34% 1,124.04 38.30% NII (₹ Cr) 304.54 3.56% 598.61 40.60% PPOP (₹ Cr) 241.79 2.72% 477.18 55.20% Cost to Income 36.41% 15 bps 36.34% 364 bps OPEX 5.61% 3 bps 5.64% 12 bps ECL (₹ Cr) 300.24
Slide 9: Collection Efficiency
Collection Efficiency Creating Opportunities… Collection efficiency 97.6% 97.3% 96.9% 96.8% 96.5% 95.4% Q1 FY 23 Q2 FY 23 Q3 FY 23 Q4 FY 23 Q1 FY 24 Q2 FY 24 Collection efficiency including arrears Pre Mar-21 MFI AUM ₹ 28.5 Cr, 0.30% Post Mar-21 MFI AUM ₹ 9,593.7 Cr, 99.70% November 6, 2023 | © Fusi
Slide 10: Credit Cost
Credit Cost Creating Opportunities… Understanding the Credit Cost Impact (₹ in Crore) Q2 FY 24 Q1 FY 24 Q2 FY 23 H1 FY 24 FY 23 Opening ECL [A] 328.38 312.66 244.27 312.66 360.35 - Provisions as per ECL [B] 75.28 75.08 61.09 150.36 199.51 Reversals (on account of write-off) [C] 103.42 59.36 20.28 16
Slide 12: 13+ years of proven track record
13+ years of proven track record Creating Opportunities… Diversified Client Growth AUM Growth Organically diversified ~23% over last 5 Years ~37% over last 5 years since inception Technology Robust Liability Marquee Investor On Cloud since 2013 Warburg Pincus - 2018 Management Ratings IPO New Produc
Slide 13: Vision, Mission & Values
Creating Opportunities… Vision, Mission & Values November 6, 2023 | © Fusion Micro Finance Limited 12
Slide 14: Vision, Mission and Values
Vision, Mission and Values Creating Opportunities… Vision: “Fusion Micro Finance with a social vision and business orientation aims to provide underprivileged women with economic opportunities to transform the quality of Mission: their lives.” “A self-sustainable financial institution which leverage
Slide 16: Our Presence
Our Presence Creating Opportunities… J & K (2) Himachal Pradesh (9) Punjab (58) Uttarakhand (21) Haryana (47) Assam (20) Delhi (9) Uttar Pradesh (225) FY 10-15 FY 16 Q2 FY24 Rajasthan (99) Assam(20) States 5 9 22 Bihar(149) Districts 38 88 420 Madhya Pradesh (116) Jharkhand (50) Branches 75 173 1164
Slide 18: Key Strengths
Key Strengths Creating Opportunities… Diversification Liability Management Consistency Digital Orientation People Operational Prudence Strong Governance November 6, 2023 | © Fusion Micro Finance Limited 17
Slide 19: Key Strengths: Diversification
Key Strengths : Diversification Creating Opportunities… QoQ Network Distribution Top 5 states concentration Rural vs Urban Presence 22 140 0 19 19 20 20 20 69.8% 70.1% 93% 93% 93% 93% 94% 93% 1164 20 69.0% 120 0 1031 1057 1086 1103 100 0 966 15 67.7% 800 66.8% 600 10 66.1% 400 5 200 0 0 7% 7% 7% 7%
Slide 20: Key Strengths: Consistency
Key Strengths : Consistency Creating Opportunities… QoQ ₹ in Crore AUM Disbursement Growth 24.60% Growth 14.22% 2,373 2344 10,026 2,285 9,296 9,712 8,654 2,188 7,389 8,047 2,052 1,983 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 AUM YoY Disbursement CAGR 34.50% CAGR 32.58%
Slide 21: Key Strengths: Consistency (Contd...)
Key Strengths : Consistency (Contd…) Creating Opportunities… For MFI Vertical QoQ AUM/ RO (₹ in Crore) AUM/Branch (₹ in Crore) Borrower/ Branch 1.4 3,513 1.4 1.4 9.1 3,452 8.8 8.8 3,381 3,381 1.2 1.3 1.2 8.4 3,223 7.9 7.8 3,116 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24
Slide 22: Key Strengths: Operational Prudence
Key Strengths : Operational Prudence Creating Opportunities… For MFI Vertical QoQ Avg. Ticket Size (₹ in K) Active Borrowers (in Lakh) Avg. OS / Borrower (₹ in K) Growth 15.69% 42.4 26.2 41.2 42.2 31.9 34.0 35.3 36.4 36.9 25.8 29.0 25.6 37.9 25.0 24.8 36.4 36.2 24.7 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'
Slide 23: Branch Vintage
Branch Vintage Creating Opportunities… For MFI Vertical Branch Vintage Mar’22 Mar’23 Sep’23 (Years) Branches POS Contribution Branches POS Contribution Branches POS Contribution <1 yrs 190 7% 121 4% 100 2% 1 - 2 yrs 119 10% 190 14% 233 16% 2 - 3 yrs 87 9% 118 11% 156 14% > 3 yrs 504 74% 590 71% 599
Slide 24: Key Strengths: People
Key Strengths : People Creating Opportunities… Stable and Experienced core management team and a strong second line with diversified experience Balanced infusion of strong talent for key leadership positions with progressing home-grown talent Team Size Building a performance driven culture which rew
Slide 25: Key Strengths: Liability Management
Key Strengths : Liability Management Creating Opportunities… Average Cost of Borrowing Marginal & Average Cost of Borrowing 12.7% 12.3% 11.2% 11.2% 10.4% 10.3% 10.6% 10.7% 10.7% 10.7% 10.6% 10.6% 10.6% 10.4% 10.4% 10.2% YoY QoQ 10.1% 10.1% '19 '20 '21 '22 '23 H124 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24
Slide 26: Key Strengths: Liability Management (Contd...)
Key Strengths : Liability Management (Contd…) Creating Opportunities… Positive ALM (in Months) 25.8 Period Rating 23.7 24.2 23.7 23.0 22.2 16.5 17.5 18.8 20.4 17.6 17.4 Oct 2023 A+ Nov 2022 A FY 2019 A- FY 2017 BBB+ '19 '20 '21 '22 '23 H1'24 Avg Maturity of Assets Avg Maturity of Liabilties Loan Mat
Slide 27: Key Strengths: Digital Orientation
Key Strengths : Digital Orientation Creating Opportunities… Technology – Infrastructure Customer Experience Early Cloud adoption Digital onboarding improved from Scalable 30% in 2018 to 100% Open API Cashless disbursement improved from Architecture 20% in 2018 to 99.87% in Q2 FY24 Operational Effici
Slide 28: Key Strengths: Digital Orientation (Building for future)
Key Strengths : Digital Orientation (Building for future) Creating Opportunities… Robotic Process Automation facilitating ▪ Automated credit decisioning Develop Technology Solutions Leverage Robotics ▪ Driving operational efficiency To proactively access opportunities To automate manual & repetitive
Slide 29: Key Strengths: Strong Governance
Key Strengths : Strong Governance Creating Opportunities… Independent Risk Independent Audit Function reporting Management Function to Board Audit Committee Extensive use of Au Strong reporting mechanism & Data Analytics nt d Comprehensive risk-based audits e it M nagem anage Automation driving opti
Slide 30: ESG - seeking to be a responsible Financial Institution
ESG - seeking to be a responsible Financial Institution Creating Opportunities… Responsible approach towards environment , community and employees as well as towards internal governance standards Continuous Engagement with Community and Employees Governance Standards In 15 CSR programs, 185 activiti
Slide 31: Corporate Social Responsibility
Corporate Social Responsibility Creating Opportunities… Fusion creates a positive impact on economic, social and environmental growth of disadvantaged communities through integrated and sustainable development initiatives Financial & Digital Literacy Relief Work Lives touched: 7,452 Lives touched: 2
Slide 32: Business Performance
Creating Opportunities… Business Performance 6 November 6, 2023 | © Fusion Micro Finance Limited 31
Slide 33: Profit and Loss Statement
Profit and Loss Statement Creating Opportunities… Profit & Loss Statement (₹ Crore) Q2 FY 24 Q2 FY 23 YoY % Q1 FY 24 QoQ % H1 FY 24 H1 FY 23 YoY % Revenue from operations - Interest income 496.80 399.76 24.27% 479.00 3.72% 975.80 729.12 33.83% - Other revenue from operations 49.84 39.93 24.82% 52.07
Slide 34: Balance Sheet
Balance Sheet Creating Opportunities… Financial Position (₹ Crore) Q2 FY 24 Q2 FY 23 YoY % Q1 FY 24 QoQ % Financial and Non-financial assets - Cash & Other Bank Balances 1,400.43 916.70 52.77% 1,177.08 18.97% - Bank balances other than cash and cash equivalents 60.70 112.86 (46.22)% 70.04 (13.34)% -
Slide 35: Key Ratios
Key Ratios Creating Opportunities… QoQ Margin Analysis Cost to Income Opex 20.7% 21.0% 21.5% 21.7% 44.7% 5.63% 19.5% 20.3% 5.61% 36.5% 38.4% 5.58% 5.59% 36.2% 36.3% 36.4% 10.4% 10.4% 10.6% 10.6% 5.49% 10.1% 10.1% 5.48% 10.2% 10.3% 10.6% 10.9% 11.1% 9.4% Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q1'23 Q2'2
Slide 36: Key Ratios
Key Ratios Creating Opportunities… ROA (On Avg. AUM) ROA (On Avg. Assets) ROE 4.93% 5.10% 5.07% 5.09% 4.99% 4.99% 4.94% 25.95% 4.91% 4.78% 4.74% 4.24% 21.81% 22.04% 4.03% 20.24% 20.21% 20.02% Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24
Slide 37: MSME
MSME Creating Opportunities… MSME vertical launched in Dec 2019 as a dedicated business unit to address the ‘missing middle’ Building credit assessment capability …nucleus of our MSME strategy Business Updates Q2 FY24 Clients 13,685 Clear focus on mapping adjacencies and potential thereof AUM (₹ in
Slide 38: Highly Experienced Board with Strong Governance
Highly Experienced Board with Strong Governance Creating Opportunities… ◼ Chairperson of the governing board of ◼ Managing Director at Warburg Pincus India Microfinance Institutions Network Limited ◼ Served on the board of Creditaccess Grameen and Muthoot Microfinance, among ◼ Over 26 years of exper
Slide 39: Stable & Experienced Management Team
Stable & Experienced Management Team Creating Opportunities… November 6, 2023 | © Fusion Micro Finance Limited 38
Slide 40: Shareholder Profile
Shareholder Profile Creating Opportunities… # Category Top 10 Share Holders Public & Others, 15.50% 1 Foreign Investment Co. Massachusetts Institute of Technology Top 10 Shareholders, 2 Foreign Investment Co. The Nomura Trust and Banking Co. Ltd. 16.58% 3 Foreign Investment Co. BNP Paribas Arbitrage
Slide 41: Abbreviations
Abbreviations Creating Opportunities… AUM Asset Under Management FY Financial Year PAT Profit After Tax H Half Yearly NIM Net Interest Margin Bps Basis points ROE Return on Equity Q Quarter ROA Return on Assets ALM Asset Liability Management ECL Expected Credit Loss TAT Turn Around Time CRAR Capital
Slide 42: Definitions
Definitions Creating Opportunities… • AUM represents the aggregate of principal outstanding for all loans including the assigned portfolio as of the last day of the relevant period/year • Net Interest Income represents interest income on loan portfolio for the relevant period/year reduced by finance
Slide 43: Thank You
Creating Opportunities… Thank You Creating Opportunities… For Investor queries contact: Mr. Deepak Madaan| Email: investor.relations@fusionmicrofinance.com | +91-9289224563 November 6, 2023 | © Fusion Micro Finance Limited 42

Fusion Micro Finance — Q2 FY24 Earnings Presentation on 6ix

Fusion Finance — Fusion Micro Finance — Q2 FY24 Earnings Presentation

Slide 1: Exchange submission letter for earnings presentation

Slide 2: Investor Presentation Q2 FY24

Slide 3: Disclaimer

Slide 4: Presentation Path

Slide 5: Executive Summary

Slide 6: Executive Summary H1 FY24

Slide 7: Executive Summary Q2 FY24

Slide 8: Performance Highlights

Slide 9: Collection Efficiency

Slide 10: Credit Cost

Slide 11: Overview

Slide 12: 13+ years of proven track record

Slide 13: Vision, Mission & Values

Slide 14: Vision, Mission and Values

Slide 15: Our Presence

Slide 16: Our Presence

Slide 17: Key Strengths

Slide 18: Key Strengths

Slide 19: Key Strengths: Diversification

Slide 20: Key Strengths: Consistency

Slide 21: Key Strengths: Consistency (Contd...)

Slide 22: Key Strengths: Operational Prudence

Slide 23: Branch Vintage

Slide 24: Key Strengths: People

Slide 25: Key Strengths: Liability Management

Slide 26: Key Strengths: Liability Management (Contd...)

Slide 27: Key Strengths: Digital Orientation

Slide 28: Key Strengths: Digital Orientation (Building for future)

Slide 29: Key Strengths: Strong Governance

Slide 30: ESG - seeking to be a responsible Financial Institution

Slide 31: Corporate Social Responsibility

Slide 32: Business Performance

Slide 33: Profit and Loss Statement

Slide 34: Balance Sheet

Slide 35: Key Ratios

Slide 36: Key Ratios

Slide 37: MSME

Slide 38: Highly Experienced Board with Strong Governance

Slide 39: Stable & Experienced Management Team

Slide 40: Shareholder Profile

Slide 41: Abbreviations

Slide 42: Definitions

Slide 43: Thank You