Q1FY25 Concall Summary
Business Updates
- The AUM was up by 22% yoy and this aligns with the company’s guidance of 20-25% yoy
- In terms of liability the company continues to maintain a diverse mix and have started exploring co lending
- The borrowing rates have peaked out and incremental borrowing costs went up by 17 bps yoy
- 30 million additional houses will be included in the PM Aawas scheme which was announced in the recent budget
- The overall borrowing costs went up by 1 bps qoq during the quarter
Participants
Equirus
Elara Capital
Ambit Capital
B&K Securities
Philip Capital
Citigroup
Oxbow
Dolat Capital
MSA Capital Partners
QnA
- The growth was lower because disbursements were lower than sanctions
- The sanctions to disbursements ratio will pick up to the earlier ratio of around 87% in the next few quarters which will lead to disbursements picking up
- A lot of borrowings is linked to repo rates so as the rates start to come down it will also have a downward impact on cost of borrowings
- The guidance will remain at the earlier stated target of 20-25% on the AUM going forward as well
- There is a one time setoff and the ESOP cost has gotten reversed which led to the decline in employee costs
- In last few years the company has gone through a technology transformation through both Salesforce and then Oracle changing the whole experience for the company and customer
- The company has upgraded and changed some peripheral softwares as well and this will lead to a total capitalization of around Rs 45 crores and this will benefit over the next decade
- This is the final year of capitalization and combined amount over 2 years is Rs 45-50 crores
- There is no change in the way NIM is being reported and in Q1 the reason why NIM is lower is because of muted assignment income and higher incremental cost of borrowings and a consequent fall in spreads
- The company has never had the objective of building a loan book based on subsidy scheme announcements by the government and idea will be to go for the same customer profile of those building homes for self usage
- The clear focus remains on self construction in Tier 3-5 towns and the growth projections are not based on any subsidy scheme
- The four main states are Rajasthan, Gujarat, Madhya Pradesh and Maharashtra and of the 371 branches there are 108 branches in Rajasthan
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