Quick notes on Equitas SFB concall:
- CD Ratio → bringing it down to 85% by March 25; currently ~91%; retail deposits have been increasing, currently more of RD TD as compared to CASA
- Increase in slippages → Attributed to floods in Tamil Nadu, especially impacting vehicle finance and microfinance; historical slippage rate maintained between 3-4%.
- Collection efficiency → Peaks in Q4; anticipates credit cost around 1.25% for the year.
- Vehicle finance → New LOS implemented for vehicle finance across branches; witnessed 30% growth and expects to sustain this momentum.
- Disbursement Yield → Small Business Loan , vehicle finance, micro finance have increased disbursement yield; marginal increase in affordable housing; new CV from 18.28% (March 2023) to 19.56% (December 2023); SBL from 16.33 (March 2023) to 17.16% (December 2023)
- Disbursement Strategy: Management avoids sacrificing NIMs for topline growth; maintains a focus on high-yield products; flat disbursement not solely due to reducing CD ratio.
- Securitisation → SBL 221crs, HF 271crs, VF 897 crs have been securitized; shown as other income
- Guidance → Targets 25% growth over the medium term; aims for 8% NIM for this financial year; RoA of 2.25%+.
- Cost to Income → Major investments directed to Affordable Housing Finance and Personal Loans; no significant branch expansion; CI expected to remain within the same range.
- NIMs → About 85% fixed interest rate book; if interest rates remain stable, NIMs will improve due to rising advances yield; impact of CD ratio coming down on NIMs will be very marginal
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