Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — FY2023 Earnings Presentation
39 slides from Aavas Financiers's earnings presentation, May 3, 2023
Slide 1: Stock exchange cover letter for investor presentation
Ref. No. AAVAS/SEC/2023-24/195 Date: May 03, 2023 To, To, The National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Mumbai – 400051 Mumbai – 400001 Scrip Code: 541988 Scrip Symbol: AAVAS Dear Sir/Madam, Sub:
Slide 2: Aavas Financiers Limited Investor Presentation – FY23
AAVAS FINANCIERS LIMITED Investor Presentation – FY23
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Aavas Financiers Ltd. (the “Company”), without any specific objectives and solely for information purposes and do not constitute directly or indirectly any advertisement, advise, offer, recomm
Slide 4: Our Background
Our Background Commenced operations in 2011 Regulated by Reserve Bank of India (“RBI”) from Jaipur, Rajasthan Supervised by National Housing Bank (“NHB”) Currently being run by professional management team backed by Recognized by NHB for refinance marquee private equity players facility Kedaara Capi
Slide 5: Our Pillars of Strength
Our Pillars of Strength Professional Management Team Experienced Board of Directors In-house Execution Model Technology and Data Analytics Improving Credit Ratings Diversified Shareholding Base
Slide 6: Aavas 3.0: Building a lasting institution
Aavas 3.0: Building a lasting institution Aavas 1.0 Aavas 2.0 Aavas 3.0 2012 2016 2023 AUM (INR Bn) Investment (2016) by: IPO (October 2018) 113.5 141.7 59.4 78.0 94.5 0.0 1.2 4.1 8.4 16.8 26.9 40.7 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY28E # of 25 35 42 44 94 165 210 250 280
Slide 7: Aavas 3.0: Executive Committee is deeply rooted in Aavas
Aavas 3.0: Executive Committee is deeply rooted in Aavas 7+ years 7+ years Nishant Sharma Manas Tandon Promoter Nominee Director Promoter Nominee Director 3+ years Sachinder Bhinder Managing Director and Chief Executive Officer 10+ years 9+ years Ghanshyam Rawat Ashutosh Atre President and Chief Fin
Slide 8: Strong Management Depth continues to drive Aavas's Outperformance
Strong Management Depth continues to drive Aavas's Outperformance Sachinder Bhinder 3 years Ghanshyam Rawat 10 years Ashutosh Atre 9 years Managing Director & Chief Executive Officer President & Chief Financial Officer President & Chief Risk Officer • 25+ years of experience • 30+ years of experienc
Slide 9: Experienced Board has guided Aavas's journey since inception
Experienced Board has guided Aavas's journey since inception Sandeep Tandon 5+ years Soumya Rajan 3+ years 7+ years Kalpana Iyer Chairperson of Board, Independent Independent Director & Chairperson of Independent Director & Chairperson Director & Chairperson of Stakeholders Nomination & Remuneration
Slide 10: Superior Business Outcome: In-house Execution Model
In-house Execution Model 1. Reduction in average TAT (days) In-house execution model – Replicated across the states Turn around time is a key metric for employee incentives Lead generation and Risk management Collections 13.4 13.1 sourcing 10.6 10.0 11.0 Superior Business Outcome ▪ Focused approach
Slide 11: State-of-the art technological backbone enabling digital & analytical capabilities
State-of-the art technological backbone enabling digital & analytical capabilities Technology backbone backed by high quality systems LOS LMS & GL Supported by multiple softwares Data Sources Ingestion / Staging / Data Data Catalogue & Analytics Processing Lake Warehousing security ecosystem Web- Bu
Slide 12: IT Transformation – Project GATI and UNNATI
IT Transformation – Project GATI and UNNATI (End to End digital journey from origination to servicing) Guiding Principles Key Objectives ▪ Be a digital first, technologically advanced & agile 1 2 3 organization ▪ Transform loan origination & customer service processes leveraging Salesforce platform
Slide 13: Improving Credit Ratings
Improving Credit Ratings Long-Term Credit Rating Short-Term Credit Rating Reaffirmed ICRA CARE ICRA Mar-23 A1+ AA / AA / Mar-23 Mar-23 Stable Stable CARE Mar-23 A1+ A/ A+ / INDIA RATINGS Mar-16 Mar-17 Stable Stable Mar-23 A1+ 12
Slide 14: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Institutional Shareholders as on 31st Mar 2023 31st Mar 2023 Investor Details % Holding Others, 5.63% Kedaara Capital^ 23.62 Partners Group^ 16.14 Capital Group^ 8.34 Kedaara Capital, Wasatch Global Investors^ 7.17 23.62% Stewart Investors
Slide 15: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (₹ Trn) 27.8 Market Size ₹ 27.8 Trn 22.9 26.0 (as on Sep-22) 20.7 18.4 15.8 13.4 YoY Growth +15% (as on Sep-22) Banks - 22%, HFCs - 15% Market Share Banks - 68% HFCs - 32% (as on Sep-22) Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Sep-22 Mortga
Slide 16: Measures from Government and Regulator
Measures from Government and Regulator Halt in Repo Rate hike After witnessing 250bps hike in repo rate during FY23, RBI has given the stance of keeping the repo rate unchanged at 6.50% Resolution Framework 2.0 in their last review meeting and decided to remain focused with readiness to act should t
Slide 17: Financial Performance
Financial Performance Key Business Parameters Geographical Distribution Spreads and Margins Asset Quality Liability Franchise Key Ratios
Slide 18: Performance Highlights: Journey of Aavas 3.0 starts with the strongest quarter ever
Performance Highlights: Journey of Aavas 3.0 starts with the strongest quarter ever AUM* (₹ Mn) Disbursement (₹ Mn) Gross Stage 3 (%) +24.8% +39.5% -07 bps 141,667 # includes 0.11% with DPD 113,502 50,245 0.92%# upto 90 but categorized as 0.99% 36,022 0.11% GNPA/Gross Stage 3 on 0.31% account of RBI
Slide 19: Healthy Business Growth
Healthy Business Growth AUM (₹ Mn) Disbursements (₹ Mn) PAT* (₹ Mn) +28% 141,667 CAGR +20 +36% 113,502 CAGR 50,245 CAGR 4,283 94,543 3,575 77,961 36,022 2,903 59,416 29,304 2,491 26,724 26,569 40,730 20,512 1,761 932 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 F
Slide 20: AUM Break-up
AUM Break-up Product Category Occupation Category Customer Category ATS : ₹ 0.86 Mn ATS : ₹ 0.71 Mn ATS : ₹ 0.89 Mn 27.9% 0.1% 40.0% ATS : ₹ 7.00 Mn 31-Mar-22 60.0% 99.9% 72.1% ATS : ₹ 0.94 Mn ATS : ₹ 0.84 Mn ATS : ₹ 0.74 Mn ATS : ₹ 0.92 Mn ATS : ₹ 0.89 Mn 0.3% 30.1% 39.9% ATS : ₹ 7.74 Mn 31-Mar-23
Slide 21: Disbursement Break-up – Product Category
Disbursement Break-up – Product Category FY22 FY23 ATS : ₹ 0.83 Mn ATS : ₹ 0.83 Mn 31.8% 33.7% 68.2% 66.3% ATS : ₹ 1.08 Mn ATS : ₹ 1.17 Mn Disbursement include 11.5% of mortgaged-backed MSME Loans Disbursement include 14.1% of mortgage-backed MSME Loans classified under Other Mortgage Loans classifi
Slide 22: Geographical Distribution
Geographical Distribution State Branches Operations Commenced in Rajasthan 102 2012 Maharashtra 48 2012 Gujarat 44 2012 Madhya Pradesh 49 2013 Delhi 4 2013 Haryana & Punjab 20 2017 Chhattisgarh 9 2017 Uttar Pradesh 27 2018 Uttarakhand 9 2018 Himachal Pradesh 4 2020 Orissa 6 2021 Karnataka 24 2021 To
Slide 23: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings and Spreads (%) Yields (%) COB (%) Spreads (%) Yields (%) COB (%) Spreads (%) 12.99% 12.90% 12.85% 13.04% 13.12% 12.79% 12.65% 12.67% 15.12% 14.72% 13.99% 13.75% 13.63% 13.16% 13.12% 12.65% 10.48% 9.51% 7.61% 8.74% 7.25% 7.17% 7.03% 7.29% 8.63% 8.44% 6.8
Slide 24: Margin and Cost Efficiency
Margin and Cost Efficiency OpEx (%) NIM (%) ROA (%) 6.82% 7.42% 7.71% 3.22% 3.49% 6.15% 2.89% 2.62% 2.80% 2.82% 3.01% 2.55% 3MFY21 H1FY21 9MFY21 FY21 3MFY21 H1FY21 9MFY21 FY21 3MFY21 H1FY21 9MFY21 FY21 7.80% 8.11% 8.23% 3.37% 3.58% 6.93% 2.64% 3.25% 2.88% 3.21% 3.34% 3.45% 3MFY22 H1FY22 9MFY22 FY22
Slide 25: Asset Quality
Asset Quality Gross Stage 3 (%) Net Stage 3 (%) DPD upto 90 DPD above 90 DPD upto 90 DPD above 90 1.72% 1.33% 0.89% 1.13% 0.92% 0.87% 0.99% 1.08% 1.10% 0.70% 0.84% 0.84% 0.68% 0.96% 0.17% 0.19% 0.11% 0.77% 0.26% 0.72% 0.13% 0.14% 0.08% 0.31% 0.21% 0.24% 0.83% 0.82% 0.93% 0.94% 0.81% 0.68% 0.63% 0.63
Slide 26: Robust Liability Management
Robust Liability Management Diversified Funding Mix Prime Lending Rate hiked by 160 bps in FY23 Loan Assets & Borrowings (₹ Mn) As on Mar-23 Further increase of 40 bps w.e.f. 05th Apr 2023 As on Mar-23 Terms Loans 31 Lenders Floating Fixed Equity 12.2% Diversified Mix Assignment No exposure to Comme
Slide 27: ALM Surplus
ALM Surplus Surplus Management* (₹ Mn) Average tenor of outstanding borrowing (months) As on Mar-23 18,762 <3months 14,610 4,151 24,237 <6months 16,363 7,874 143 33,644 135 <1year 16,747 134 130 16,897 126 128 69,117 <3years 52,487 16,631 97,704 <5years 79,612 18,092 119,490 <7years 92,778 26,712 13
Slide 28: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (₹ Mn) As on Mar-23 Cash & Cash Equivalents 13,687 High Quality Liquidity of Un-availed CC Limits 1,100 ₹ 17,407 Mn Documented & Un-availed Sanctions from NHB 2,620 Documented & Un-availed Sanctions from other Banks 15,340 Total Liquidity Position 32,747 Pa
Slide 29: Net Securitization Volume
Net Securitization Volume ₹ 6,647 Mn ₹ 5,496 Mn ₹ 7,784 Mn ₹ 9,541 Mn 2,981 3,054 2,967 2,916 2,579 2,397 2,234 2,077 1,749 1,590 1,509 1,424 991 1,000 0 0 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 28
Slide 30: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (₹) 14.09% 413.6 12.91% 13.72% 355.8 305.9 Mar-21 Mar-22 Mar-23 FY21 FY22 FY23 Capital Adequacy Ratio (%) Earning Per Share* (₹) Tier I Tier II 54.3 45.0 53.17% 50.73% 36.6 46.54% 1.21% 0.68% 0.40% Mar-21 Mar-22 Mar-23 FY21 FY22 FY23 Data of Capital
Slide 31: Annexures
Annexures Quarterly Profit & Loss Statement Balance Sheet PAT Reconciliation ECL Provisioning Networth Reconciliation ESG 30
Slide 32: Quarterly Profit & Loss Statement
Quarterly Profit & Loss Statement Particulars (₹ Mn ) Q4 FY23 Q4 FY22 Y-o-Y Q3 FY23 Q-o-Q Interest Income on Loans (incl. Processing Fee) 3,887.2 3,097.3 25.5% 3,635.4 6.9% Interest Income on Fixed Deposits 280.3 174.3 237.0 Reversal Income on Earlier Assigned Loans (306.1) (231.0) (287.2) Upfrontin
Slide 33: Yearly Profit & Loss Statement
Yearly Profit & Loss Statement Particulars (₹ Mn ) FY23 FY22 Y-o-Y Interest Income on Loans (incl. Processing Fee) 14,080.4 11,450.2 23.0% Interest Income on Fixed Deposits 911.4 640.7 Reversal Income on Earlier Assigned Loans (1,110.0) (803.3) Upfronting Income on Fresh Assigned Loans 1,518.2 1,240
Slide 34: Balance Sheet
Balance Sheet Particulars (₹ Mn ) 31-Mar-23 31-Mar-22 Sources of Funds Share Capital 790.6 789.4 Reserves & Surplus 31,906.0 27,297.1 Borrowings 98,872.8 80,119.8 Deferred Tax Liability (Net) 501.8 353.6 Other Liabilities & Provisions 2,034.1 1,644.0 Total 1,34,105.3 1,10,203.8 Application of Funds
Slide 35: PAT Reconciliation
PAT Reconciliation Particulars (₹ Mn ) FY23 FY22 Y-o-Y Q4 FY23 Q4 FY22 Y-o-Y Net Profit as per IGAAP 3,793.1 3,282.3 15.6% 1,006.1 947.9 6.1% Add / (Less) : Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financial assets at
Slide 36: ECL Provisions
ECL Provisions Particulars (₹ Mn ) 31-Mar-23 31-Dec-22 31-Mar-22 Gross Stage 1 1,12,318.4 1,02,743.1 87,571.0 During FY22, resolution plan was implemented for certain % portfolio in Stage 1 97.26% 96.74% 96.04% borrower accounts as per RBI’s Resolution Framework 2.0 ECL Provision Stage 1 259.6 231.7
Slide 37: Networth Reconciliation
Networth Reconciliation Particulars (₹ Mn ) 31-Mar-23 31-Mar-22 Net worth as per previous GAAP 30,177.4 26,133.3 Adjustments increasing/(decreasing) net worth as reported under previous GAAP: Adoption of EIR for amortisation of Income and expenses - financial assets at (217.9) (410.1) amortised cost
Slide 38: Environmental, Social & Governance
Environmental, Social & Governance Pillars for Sustainable Future Key Quarterly Updates Green Planet Green housing program with IFC: Nurturing Workplace ▪ 40 Green house certificates received so far and ROI Create a healthy planet by reducing Create a healthy & diverse workplace reduction of 0.5% ha
Slide 39: Thank You !
Contact Us Aavas Financiers Limited (Formerly known as Au HOUSING FINANCE LIMITED) CIN: L65922RJ2011PLC034297 Mr. Ghanshyam Gupta investorrelations@aavas.in www.aavas.in Thank You ! Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285 www.sgapl.net 38