Q1FY23 Concall Notes
- Gold Loan Business
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“Pressure from banks and fintechs seen easing somewhat in the face of reversal of RBI’s COVID-related LTV relaxation for banks and tighter liquidity conditions for fintechs. Going forward, the Company intends to prune the low yielding, high ticket loans (6.9% teaser portfolio that was introduced during Covid). This is a conscious measure and the income associated with such portfolio is not high.”
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“Net yields on Gold Loans improved from 18.8% in QE Mar’22 to 19.4% in the current quarter. As at the end of July, yields have further increased to 21.7%. Yield improvement largely driven by rationalization of low-yielding schemes.”
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Yields will settle at around 21-22%
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- MFI Business
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collection efficiency for the quarter at 102%
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GNPA of new book (disbursals post May’21) is less than 1%
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320 Gold loan branches under Asirvad as of now.
- Gold AUM currently at Rs.421 crs
- No RBI approval needed here but the cap is at 25% of total AUM
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Management believes that high provisioning for Asirvad is coming to an end of cycle.
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Incremental disbursement NIM is around 15%
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- Cost of borrowing increased by 10 bps on a sequential basis during 1QFY23.
- Central bank hiked the custom duty on 1st July 2022 from 7.5% to 12.5%.
- 10% of book is still under teaser loan.
- Maturity upto December 2022
- Might come back during diwali. (One has to keep eye)
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Competition is similar to 6 months back.
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The demand from lower segment has yet to come back to Pre-COVID levels
- Demand picks up sowing season that is from September.
- Demand for gold loan is stagnant as of now
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The demand from lower segment has yet to come back to Pre-COVID levels
- Guidance of provision:
- half of last year
- Might increase next quarter but would stabilize in second half of the year.
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