Baid FinservQ1 FY24Finance

Baid Finserv

Q1 FY24 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Revenue guidance

Category 2

→Targeting 20-25% growth year-on-year in both revenues and profit.
→Expect total revenue for FY25 around INR 80-85 crores (INR 100 crores considered tough).
→Aiming to disburse around INR 200 crores of fresh loans in FY25.
→Projecting total AUM of approximately INR 500 crores by end of FY25 and INR 600 crores by FY26.
→Plan to expand branch network to 75 locations by FY25.
→Introduce new products including electric vehicles and two-wheelers in vehicle loan segment to boost yield.
→Will tie up with large lenders, NBFCs, and small finance banks for micro-housing products.
→Growth driven by market expansion (Maharashtra entry), technological advancements, and improved risk management tools.

Category 3

→Baid Finserv expects 20% to 25% growth in profit and income in the coming year (FY25).
→Revenue for FY25 is projected around INR80-85 crores, though INR100 crores looks tough.
→AUM is targeted at around INR500 crores by the end of FY25, with plans to reach INR600 crores by FY26.
→They aim to expand the branch network to 75 locations by FY26 from around 70 currently.
→EBITDA showed strong growth of 30% in FY24 with a margin of 62.7%, net profit increased 24.6% with a margin of 19.5%.
→Earnings per share grew 11.3% in FY24; future growth in EPS is expected aligned with profit growth.
→Continuous addition of new product portfolios, including electric vehicles and two-wheelers, is expected to improve yields and margins.
→Cost of borrowing is expected to reduce by approximately 25 basis points, possibly enhancing NIMs marginally beyond the current 10.5%-11%.

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Yes

→Rights issue for equity fundraising was proposed but later deferred; no current plans to dilute promoter holding or issue rights in the near term.
→Current capital adequacy is strong (around 45-46%), with low leverage (~1.4x), giving enough headroom for growth without immediate need for fresh capital.
→Borrowings primarily through term loans from banks and large NBFCs; considering issuance of NCDs soon to diversify funding sources.
→Major borrowings now come from scheduled banks (e.g., IDFC, Federal Bank, ICICI Bank, ESAF Small Finance Bank, Capital Small Finance Bank, SBI).
→Future fundraising plans focus on associating with more banks and large NBFCs for better rates and increased borrowings.
→No immediate plans for fresh equity; additional capital raise might be considered once AUM reaches around INR 500 crores.

→Baid Finserv aims to achieve an AUM (Assets Under Management) of around INR 500 crores by the end of FY 2025.
→Plans to further increase the loan book to INR 600 crores by FY 2026.
→Targets a 25% to 30% annual increase in AUM going forward.
→Fresh disbursement target for the current year is around INR 200 crores.
→With principal collections and closures, they expect an addition of approximately INR 120 crores to the existing AUM.
→Currently maintaining a capital adequacy of around 45%, allowing expansion without fresh capital infusion for roughly 2 years.
→The company plans branch expansion to 75 branches by FY 2026 to support growth in the orderbook.
→Expected to leverage up to 2 to 3 times, which will improve volumes and ROE.

Yes

→Current capex for branch expansion is modest, typically around INR 2-3 lakhs per branch, primarily for basic infrastructure.
→Each new branch becomes viable and self-sustainable within 5-6 months with an AUM of INR 3-4 crores.
→No major IT or infrastructure splurges on branch setup; emphasis is on efficient, lean operations.
→Plans to open 4-5 branches in Maharashtra in the next quarters.
→Target branch strength of 75 by FY26.
→Considering issuance of Non-Convertible Debentures (NCDs) soon for funding diversification.
→Exploring tie-ups with large lenders, NBFCs, and small finance banks for micro-housing loan products.
→Focus on technological advancements: usage of LOS, LMS software from Graviton, Collect-ON app, and other digital payment solutions for process efficiency.
→No large strategic investments or significant capital expenditure beyond branch expansion and IT tool enhancements mentioned.

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