Any current/future new fundraising through debt or equity?

CSL Finance Limited is actively working on raising funds at a reasonable cost, focusing on PSU and private-sector banks for low-cost funds. The company aims to maintain borrowing costs within a 9.5% to 10.25% band, subject to repo rate changes. They have added five new lenders in the last six months, including reputed institutions like ICICI Bank and Kotak Mahindra, totaling 11 lenders. The current liquidity position is adequate, with ₹29 crore in cash and undrawn credit lines as of September 2022. Credit rating review is due in the coming months, and the company is optimistic about achieving

Any current/future capex/capital investment/strategic investment?

The company plans to add an unsecured loan product for MSMEs in Tier-2 and Tier-3 cities, expected to launch by the end of the financial year (Page 4). Four new branches were added recently, taking the total to 26 branches across six states, following a clustered approach in existing markets, indicating ongoing investment in branch expansion (Page 4, 10-12). Focus is on improving branch productivity rather than increasing employee strength; some operational costs like ESOP expenses have increased, justified by productivity improvements (Page 9). Investment in building technology platforms cont

Future growth expectations in sales/revenue/volumes?

The company aims to grow its loan book to ₹1000 crore as early as possible, with a targeted disbursement growth of 20%-25% annually. Focus is on profitable growth with reasonable leverage rather than aggressive borrowing at higher costs. The SME retail segment is expected to continue robust growth, with recent sharp jumps in the loan book indicating strong potential. Incremental disbursements are increasingly focused on retail loans, with ambitions to raise monthly retail disbursements from ~₹15-18 crore to around ₹20 crore. The company plans to expand beyond the NCR region into new ma

Future growth expectations in earnings/operating earnings/profits/EPS?

CSL Finance aims for profitable growth with reasonable leverage, avoiding high-cost borrowing (12%-14%) to maintain margins. The company targets a loan book disbursement growth of around 20%-25%, with aspirations to reach a 1000 crore loan book, potentially within three years. Retail segment disbursements are prioritized and expected to increase steadily, aiming for around 20 crores per month. The wholesale portfolio is expected to perform better in the second half of the financial year after a flat first half. Margin pressure due to rising interest rates is being managed by moving some SME lo

CSL Finance LtdQ2 FY23Finance

CSL Finance Ltd Q2 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹217.92P/E: 5.7Market Cap: ₹496 CrSector: Finance

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

The company aims to grow its loan book to ₹1000 crore as early as possible, with a targeted disbursement growth of 20%-25% annually.
Focus is on profitable growth with reasonable leverage rather than aggressive borrowing at higher costs.
The SME retail segment is expected to continue robust growth, with recent sharp jumps in the loan book indicating strong potential.
Incremental disbursements are increasingly focused on retail loans, with ambitions to raise monthly retail disbursements from ~₹15-18 crore to around ₹20 crore.
The company plans to expand beyond the NCR region into new markets like Rajasthan and Chandigarh to diversify growth sources.
Yield on loans is expected to adjust to rising interest rates, with a mix of fixed and floating rates to maintain competitiveness.
Operational efficiency improvements and branch expansions support scaling up without a significant rise in employee costs.

Margin guidance

Category 3

CSL Finance aims for profitable growth with reasonable leverage, avoiding high-cost borrowing (12%-14%) to maintain margins.
The company targets a loan book disbursement growth of around 20%-25%, with aspirations to reach a 1000 crore loan book, potentially within three years.
Retail segment disbursements are prioritized and expected to increase steadily, aiming for around 20 crores per month.
The wholesale portfolio is expected to perform better in the second half of the financial year after a flat first half.
Margin pressure due to rising interest rates is being managed by moving some SME loans to floating rates while maintaining most loans at fixed rates.
Employee and operational costs are stabilized, with investments justified by expected productivity improvements.
Continuous improvements in underwriting and collections, along with expanding lender base, underpin growth and profitability.
Overall, CSL Finance is optimistic about growth, driven by retail expansion and cautious but scalable wholesale growth.

See what CSL Finance Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

CSL Finance Limited is actively working on raising funds at a reasonable cost, focusing on PSU and private-sector banks for low-cost funds.
The company aims to maintain borrowing costs within a 9.5% to 10.25% band, subject to repo rate changes.
They have added five new lenders in the last six months, including reputed institutions like ICICI Bank and Kotak Mahindra, totaling 11 lenders.
The current liquidity position is adequate, with ₹29 crore in cash and undrawn credit lines as of September 2022.
Credit rating review is due in the coming months, and the company is optimistic about achieving an upgrade to facilitate better borrowing.
Rohit Gupta mentioned discretion in borrowing to avoid high-cost funds (12%-14%), preferring profitable growth without excessive leverage.
No explicit mention of equity fundraising during the call.

Order book

The transcript does not provide specific information regarding the current or expected order book or pending orders for CSL Finance Limited. The discussion primarily focuses on loan book growth, disbursements, branch expansion, asset quality, provisioning, funding costs, product strategy, and market outlook. There are mentions of targets like achieving a 1000 crore loan book and expansion into new regions, but no concrete details on order books or pending orders are provided.

See what CSL Finance Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes

The company plans to add an unsecured loan product for MSMEs in Tier-2 and Tier-3 cities, expected to launch by the end of the financial year (Page 4).
Four new branches were added recently, taking the total to 26 branches across six states, following a clustered approach in existing markets, indicating ongoing investment in branch expansion (Page 4, 10-12).
Focus is on improving branch productivity rather than increasing employee strength; some operational costs like ESOP expenses have increased, justified by productivity improvements (Page 9).
Investment in building technology platforms continues, such as launching a bespoke loan underwriting platform with multiple API integrations and developing a credit rule engine to enhance underwriting processes (Page 4).
The company is expanding into new markets like Rajasthan and exploring areas such as Chandigarh, indicating strategic geographic investment (Pages 10-16).
Ongoing efforts to enhance borrowing capacity, including pursuing a credit rating upgrade to reduce cost of funds (Page 5).

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