Some basic notes from the recent conf call (Discl – decently long here from much lower levels and def biased)
Indian banks and NBFC’s are strong and need to be growing faster for Bharat to grow.
Q2 Perf in line with management guidance and expectations.
AUM up 5% YoY & up 4% QoQ (a metric I am watching and expecting to grow) apprx 67K Cr –
AUM Stable and growing despite massive changes in underlying book…
Improved Retail : Wholesale mix now at 58:42 (vs 33:67 at end-FY22)
Wholesale 1.0(Legacy) AUM reduced by 33% YoY
GNPA’s down QoQ
NIM Expansion – Modest
Housing loan sweet spot – INR 18 lacs
Housing disbursements grew by 309% YoY – 60% LTV – 11.2% Yield – 90+ Day Delinquency 0.4%
3.6 Mm Customers – 1.1 Mm Active
23% of retail is Unsecured. De-growing unsecured thru tighter credit standards.
Management Goals –
120K Aum by FY28 – 15% CAGR
Retail ROA: 2.5-3%; Wholesale ROA: 3.5-4%
Plan to expand to 500-600 branches
Legacy
Stage 1 (Loans/NCDs)1 AUM of INR 17,381 Cr with an average yield of 12%
Long Bias Assumptions –
Management gets to 50% of target
Cost to Income continues trending down
NIM’s continue trending higher.
Cost of borrowing moderates further.
RR is tilted towards a significant re-rating if, big if, they can grow AUM to 90K within the next 3 years by FY27.
Discl. Long and biased
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