CSL Finance Q2 FY22 Earnings Call Analysis

Future Growth Expectations for CSL Finance Limited: - SME Segment Disbursements: - Current disbursal at 4 to 4.5 Crores monthly. - Target to increase to 8-9 Crores monthly by financial year-end. - October saw an unprecedented jump in sanctions and disbursals. - Collections improving with a 96% collection efficiency. - Wholesale Segment: - Pipeline of 150 Crores expected to close in 1.5 months. - Focus on longer tenure loans (24-30 months) for stability and reduced churn. - Pipeline and deals postponed in Q2 expected to close soon. - Branch Expansion & Market Penetration: - Expanding presence in Rajasthan, Gujarat, Haryana, Punjab. - Focus on tier 2 and tier 3 cities using cluster approach (3-4 branches per cluster). - Digitalization & Process Improvements: - Moving toward fully digitalized SME processes by year-end. - Enhanced technology for customer acquisition and credit assessment. - Debt Raising & Rating Improvement: - Focus on improving credit rating to manage cost of borrowing. - Exploring co-lending and alternative borrowing options to fuel growth. Overall, company aims for significant growth in loan book and market presence post-COVID with improved operational efficiency.

- CSL Finance is actively looking to raise more debt to expand their balance sheet. - The company is working on improving their credit rating, which will aid in raising debt at a controlled cost. - They are in discussions with various Public Sector Units (PSUs) to keep the cost of borrowing under control. - The weighted average cost of borrowing currently is around 10.25%, and they intend to raise new debt at a similar cost. - There is no explicit mention of raising equity in the current call. - If unable to raise enough debt in the next 6 to 9 months, they have options through co-lending to increase market presence and profitability. (Referenced from pages 8, 9, 15, 16)