Home First Finance Company India Ltd. · NSE:HOMEFIRST
Home First Finance Company India — Q1 FY23 Earnings Presentation
44 slides from Home First Finance Company India's earnings presentation, July 2022
Slide 1: Investor Presentation Q1 – FY23
Investor Tech Growth Productivity Presentation Q1 – FY23 Risk Management Funding ESG
Slide 2: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the "Presentation"), which have been prepared by Home First Finance Company India Ltd. (the "Company"), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe
Slide 3: Executive Summary
Executive Summary y-o-y q-o-q Assets Under Management (AUM) Disbursement Gross Stage 3 / POS (GNPA %) ₹ 58,319 Mn ₹6,612 Mn (1) 2.1 In line with RBI circular dated 12 Nov 2021 1.2% prior to such classification +35.8% +8.4% +117.0% +3.1% - 20 bps Spread(2) Cost to Income Opex to Assets 5.8% 35.8% 2.9
Slide 4: HomeFirst – Who We Are?
HomeFirst – Who We Are? Technology driven affordable housing finance company with pan India presence Home loans to first time home buyers with predominant focus on salaried individuals having income < ₹ 50k p.m 90% of book comprise of housing loans with average ticket size of ₹ 1.07Mn Strong liquidity
Slide 5: Our Journey
Our Journey CARE Rating CARE / ICRA Rating BBB- BBB+ A- A+ AA- AA- Assets Under Management (AUM) ICRA & CARE India Upgraded ₹ 58,319 Mn Ratings: Long Term Assigned Credit Long Term Facilities We got listed Credit Rating to Facilities AA- Stable As of Jun’22 Warburg Pincus invested in Rating AA- Stab
Slide 6: Shareholding as on Jul'22
Shareholding as on 22 Jul’22 PROMOTER & PROMOTER GROUP % Holding TRUE NORTH FUND V LLP 20.2 TRUE NORTH FUND V LLP AETHER (MAURITIUS) LIMITED (GIC)^ 13.4 12.8% 20.2% KEY INVESTORS % Holding AETHER (MAURITIUS) LIMITED ORANGE CLOVE INVESTMENTS B.V 28.7 (WARBURG PINCUS) (GIC)^ BESSEMER INDIA CAPITAL HOL
Slide 7: Distinguished Board of Directors
Distinguished Board of Directors Deepak Satwalekar Geeta Dutta Goel Anuj Srivastava Sucharita Mukherjee Chairman / Independent / Independent / Independent / Independent / Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Divya Sehgal Maninder Singh Juneja Na
Slide 8: Experienced Management Team
Experienced Management Team Manoj Viswanathan Ajay Khetan Gaurav Mohta Vilasini Subramaniam MD & CEO Chief Business Officer Chief Marketing Officer Head – Strategic Alliances Nutan Gaba Patwari Ramakrishna Vyamajala Abhijeet Jamkhindikar Chief Financial Officer Chief Human Resource Officer Business Head - M
Slide 9: Meet Our Customers
Meet Our Customers Formal Salaried Informal Salaried Self Employed Customer 1 Customer 2 Customer 3 Age:44 / Location: KR Puram Age: 32 / Location: Sayan Age: 36 / Location: Avadi (suburbs of Bangalore) (suburbs of Surat) (suburbs of Chennai) Who are they? 72% 28% Salaried Self Employed Teacher with
Slide 10: Our Unique Value Proposition to Our Customers
Our Unique Value Proposition to Our Customers Who are our customers What do our customers need What challenges do they face Salaried and self-employed Home loan requirement primarily Inability to meet documentation NPS individuals (1) in the ₹0.5 -1.5 mn range requirements of traditional lenders 75%
Slide 11: Distribution Strategy
Distribution Strategy 0 -4 4-7 7 - 15 Contribution to India's GDP FY’21 ( %) Pan India Distribution driven by strategic market selection & contiguous expansion Existing branches - 93 New branch locations - 50 Digital branches - 81 93 102 13 224 Geographic Expansion Branches Districts States/UT Touch
Slide 12: Omni Channel Lead Generation Strategy
Omni Channel Lead Generation Strategy Diversified lead generation channels |Q1 FY23 74.3% Diversified channels for generating leads such as connectors, builder ecosystem, digital, etc. 100% in-house conversion 8.2% by HomeFirst RMs. 3.5% 3.0% 5.1% 0.4% 1.4% 1.9% 2.2% Construction Digital Digital Const
Slide 13: Data Science Backed Centralised Underwriting
Data Science Backed Centralised Underwriting Risk Management Design Tech-Led Centralised Salaried customers 100+ data points & digitally Consistency in underwriting Loans Approved within 48hrs captured data for all customers Build detailed understanding of customer via field visits by RM API integrat
Slide 14: Scalable Operating Model built on Holistic Technology Usage
Scalable Operating Model built on Holistic Technology Usage Recent Tech Interventions E-NACH Home First App for all API Integration with third party Data on Cloud Digital marketing on major stakeholders databases E- Sign online media o Integrated CRM and loan 360 view of customer for Proprietary pro
Slide 15: Digital Adoption
Digital Adoption % Customers registered on App Unique user logins as % of Customer Rating on Google active customers Playstore 76% 80% 84% 3.9 72% 67% 56% 51% 51% 54% 54% As of 23 Jul’22 Average payment per user on app Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 ₹31,232 For
Slide 16: ESG at HomeFirst
ESG at HomeFirst Putting sustainability at core of operations
Slide 17: Commitment to ESG
Commitment to ESG ESG Framework The Company understands An ESG Execution Team the growing importance of with management team ESG and has adopted a participation has been created Board approved ESG Policy to ensure implementation of the ESG Policy Comprehensive Robust Policy & Implementation Governan
Slide 18: Digital Processes from start to finish to reduce Carbon Footprint
Digital Processes from start to finish to reduce Carbon Footprint Customer App Connector App RM Pro App Green Operations Operational Eco-efficiency & Climate Resilience HomeFirst has a deeply ingrained Ideology of all processes being paperless across the product cycle. Implemented Electronic process
Slide 19: Progress on Social Development
Progress on Social Development Responsibility towards community Responsibility towards employees Project “Sashakt”, an initiative by HomeFirst to empower the households to uplift these households and bring an all-around Certified as “Great Place To Work” by improvement in their social, economic, and
Slide 20: Progress on Social Development
Progress on Social Development Responsibility towards customers ESG Initiatives conducted & in pipeline • The company published first ever Sustainability Report for the year FY21-22 as part of its Integrated Annual Report. Customer Satisfaction Link: https://homefirstindia.com/files/Sustainability%2
Slide 21: Strong Governance Structure
Strong Governance Structure Work Sustainably & Ethically Governance at core Separate Chairman & Managing Director position Sustainable Finance Corporate Governance We promote Financial Inclusion. • Core competencies of Independent Directors directly relevant to company’s operations. Experienced Boar
Slide 22: Strong Governance Practice
Strong Governance Practice Top-tier Corporate Governance • High Independent Directors representation in all Board Committees • Highly experience Board & Management Team on Risk Management committee. • Company's risk management framework is driven by its Board and its subcommittees including the Audi
Slide 23: Business Updates
Business Updates
Slide 24: Healthy Growth in Loan Book and Disbursements
Healthy Growth in Loan Book and Disbursements Disbursement ( ₹Mn ) Last 4 Years Last 5 Quarters 6,411 6,612 5,696 5,152 All time high disbursement in the quarter, q-o-q growth of 3.1% 20,305 3,046 15,728 16,183 10,966 FY19 FY20 FY21 FY22 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Assets Under Management ( ₹
Slide 25: Consistent Portfolio Metrics | Jun'22
Consistent Portfolio Metrics | Jun’22 9% 1% AUM by Product AUM by Occupation 28% Salaried Housing Loan Shop Loans Self Employed LAP Sharp focus on High ratio of 90% 72% housing loans salaried customers 76% 2% 10% AUM by Credit history 8% AUM by Ticket Size 24% Have Credit History Upto 0.5mn AVG: 740
Slide 26: Expansion in Spreads
Expansion in Spreads Portfolio Yield Net Interest Spread Movement COB Spread Last 4 Years Last 5 Quarters 12.9% 13.0% 12.8% 12.7% 12.8% 12.8% 12.8% 12.7% 12.3% Sustained Cost of Borrowing 8.8% 8.4% 8.0% 7.2% 7.2% 7.1% 7.2% 7.2% 6.9% FY19 FY20 FY21 FY22 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Incremental
Slide 27: Healthy Leading Indicators
Healthy Leading Indicators Bounce rate :On the day of EMI presentation Bounce rate Bounce rates normalising COVID COVID WAVE -1 WAVE -2 36.4% 28.3% 20.1% 17.3% 18.3% 16.5% 15.7% 14.5% 14.0% 13.5% 10.0% 10.9% 10.5% 9.5% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY
Slide 28: Healthy Leading Indicators – Collection Efficiency
Healthy Leading Indicators Collection Efficiency Collection Efficiency (1) Collection efficiency trending back to Unique Customers (2) normal levels 98.5% 99.4% 99.4% 97.8% 98.4% 97.2% 98.0% 97.9% 97.4% 99.1% 98.0% 98.2% 97.6% 96.3% 96.3% 96.4% 96.0% 96.9% 96.6% 96.9% 97.2% 96.9% 97.2% 97.1% 94.7% 94.3% 9
Slide 29: Sound Credit Indicators
Sound Credit Indicators DPD 1+ / POS DPD 30+ / POS % Stage 3 / POS Stage 2 / POS 5.7% 5.2% 8.9% 4.7% 7.6% 4.1% 1.9% Improvement 3.7% 1.7% 3.7% 6.2% 6.5% 3.5% 5.3% 5.3% 2.6% continues in 5.0% 1.8% 4.4% 2.0% 2.3% 2.3% 2.1% 1+ & 30+ DPD 3.2% 1.7% 3.8% 3.5% 0.8% 1.0% 2.3% 2.1% 0.9% 0.9% 1.4% 1.4% 1.4% M
Slide 30: Diversified funding profile at competitive Cost of Borrowing
Diversified funding profile at competitive Cost of Borrowing DA & Co-lending COB% (Represents quarterly avg.) NCD Borrowings Mix and Cost of Borrowing trend NHB Refinance Credit Rating upgraded from NBFC [ICRA] A+ 'Positive' to [ICRA] Public Sector Banks AA- 'Stable' Pvt Sector Banks 100% 8.50% 21% 9
Slide 31: ALM Position as of Jun'22 - Cumulative
ALM Position as of Jun’22 - Cumulative Inflow Outflow Surplus 3,735 3,748 3,979 10,034 23,738 16,581 (₹Mn) Robust ALM 87,547 profile ensuring sufficient liquidity 74,132 buffers 70,966 50,358 50,394 Cumulative 40,324 Positive flows across all the time buckets 22,342 18,363 14,885 10,099 11,137 6,364 0-3mon
Slide 32: Assignment and Co-lending Transactions
Assignment and Co-lending Transactions Direct Assignment Transactions Co-Lending Transaction ₹3,574 Mn ₹3,003 Mn ₹4,646 Mn ₹879 Mn Consistent demand for assignment of the company’s portfolio Generated business from co-lending 1,844 transactions 77 1,491 1,472 1,183 1,273 1,159 1,140 1,050 802 611 -
Slide 33: Strong Liquidity Position
Strong Liquidity Position Liquidity Buffer as on Jun’22 (in ₹Mn) Unencumbered Cash and Cash equivalent 5,855 Un-availed Sanction from NHB - Un-availed Sanction from Banks 2,185 Total 8,040 Particulars (in ₹Mn) Q2FY23 Q3FY23 Q4FY23 Q1FY24 ₹ 3,200 million Opening Liquidity 8,040 8,752 8,497 9,061 Liqui
Slide 34: Financial Updates
Financial Updates
Slide 35: Financial Highlights
Financial Highlights Profit After Tax ( ₹Mn ) Net worth ( ₹Mn ) Equity Raised 1508 32 3281 3450 11 6 8 ( ₹Mn ) (1) 1,741 15,737 15,737 16,279 Robust NW to Strong profit growth 13,805 14,173 support growth 1,001 796 9,334 (1) 457 482 512 351 5,227 FY19 FY20 FY21 FY22 Q1FY22 Q4FY22 Q1FY23 FY19 FY20 FY21
Slide 36: ECL Provisions Summary
ECL Provisions Summary Loan Particulars (in ₹Mn) Stage 1 Stage 2 Stage 3 Commitment Total For period ended Jun’22 Loans – Principal Outstanding 46,000.9 656.8 1,020.0 47,677.7 ECL Provision 150.1 76.5 228.8 11.6 467.0 Net Loans – Principal Outstanding 45,850.8 580.3 791.2 47,210.7 ECL Provision % 0.
Slide 37: Annexures
Annexures
Slide 38: Quarterly and Annual Profit and Loss Statement
Quarterly and Annual Profit and Loss Statement Particulars (in ₹Mn) Q1FY23 Q4FY22 Q1FY22 QoQ YoY FY22 FY21 YoY Interest Income on term loans 1,449.9 1,310.3 1,091.3 10.7% 32.9% 4,770.5 4,061.3 17.5% Net gain on DA 99.0 138.2 193.7 678.4 439.3 Income other than interest income on term 144.5 112.4 133
Slide 39: RoE Tree
RoE Tree Particulars Q1 FY23 Q4 FY22 Q1 FY22 FY22 FY21 Interest Income on term loans / Average total assets 10.9% 10.8% 9.6% 9.9% 10.2% Net Gain on DA / Average total Assets 0.8% 1.1% 1.7% 1.4% 1.1% Income other than interest income on term loans/ Average total assets 1.1% 0.9% 1.2% 1.1% 1.0% Total
Slide 40: Key Financial Ratios
Key Financial Ratios Particulars Q1FY23 Q4FY22 Q1FY22 FY22 FY21 Profit after tax on average total assets (ROA) 3.9% 4.0%(1) 3.1% 3.6%(1) 2.5% Leverage (Average total assets / average Equity 3.3 3.2 3.2 3.3 3.5 or average Net worth) Profit after tax on average equity or average Net 12.8% 12.5%(1) 10.
Slide 41: Balance Sheet
Balance Sheet Particulars (in ₹Mn) Q1FY23 FY22 FY21 ASSETS Cash & cash equivalents and Other bank balance 3,004.3 6,678.5 6,798.7 Loans 47,222.3 43,048.7 33,265.0 Investments 3,266.8 - 3,750.1 Other financial assets 1,167.7 1,150.0 1,011.7 Property, plant and Equipment* 202.5 200.0 164.0 Non-financi
Slide 42: Experienced and Diverse Board
Experienced and Diverse Board Mr. Deepak Satwalekar Ms. Geeta Dutta Goel Mr. Anuj Srivastava Chairman/ Independent/ Non-Executive Director Independent/ Non-Executive Director Independent/ Non-Executive Director Mr. Deepak Satwalekar was associated with HDFC Limited as a Ms. Geeta Dutta Goel is Count
Slide 43: Thank You
Thank You For further information, please contact Company Investor Relations Advisors CIN: L65990MH2010PLC240703 Mr Ashish Chovatia Mr. Manish Kayal, Head - Investor Relations +91 9930044680 manish.kayal@homefirstindia.com ashish.chovatia@linkintime.co.in Investor Relations - HomeFirst investor.relat
Slide 44: Glossary
Glossary Terms Explanation Loans – Principal outstanding represents gross principal outstanding of loans as of the last day of the POS - Principal Outstanding relevant period or year as per the restated financial statements. Net Interest Income represents interest income on term loans minus Interest
Home First Finance Company India — Q1 FY23 Earnings Presentation on 6ix