Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — FY2020 Earnings Presentation
37 slides from Aavas Financiers's earnings presentation, May 14, 2020
Slide 1: Exchange filing cover letter
Aevas FINANCIERS LTD S A P N E AAPKE, SAATH HAMAARA Ref. No. AAVAS/SEC/2020-21/38 Date: May 14, 2020 To, To, The National Stock Exchange of India Limited BSE Limited The Listing Department Dept, of Corporate Services Exchange Plaza, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalai Street, Fort
Slide 2: Investor Presentation – FY20
AAVAS FINANCIERS LIMITED Investor Presentation – FY20
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Aavas Financiers Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securit
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 Experienced Board of Directors Professional Management Team In-house Execution Model Technology and Data Analytics Improving Credit Ratings Diversified Shareholding Base
Slide 6: Experienced Board of Directors
Experienced Board of Directors Sandeep Tandon Soumya Rajan Kalpana Iyer Chairman & Independent Director Additional Director (Independent) Independent Director Qualifications: Bachelor’s in Electrical Qualifications: Bachelor’s in Mathematics & Qualifications: Chartered Accountant Engineering from Un
Slide 7: Professional Management Team
Professional Management Team Sushil Kumar Agarwal - Managing Director & CEO Ghanshyam Rawat - Chief Financial Officer • 18+ years of experience in retail financial services • Experience in financial services & allied sectors • Prior associated with Kotak Mahindra Prime, ICICI Bank & Au Small • Prior
Slide 8: 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 21.1 Risk management Collections sourcing 12.9 13.4 Superior Business Outcome 10.6 ▪ Focused approach to di
Slide 9: Technology and Data Analytics
Technology and Data Analytics Lead Generation Underwriting Operations Collections ▪ Majority of the leads ▪ Platform integration ▪ Tie-up with banks to ▪ Route optimization are logged in through with credit bureaus enable branch-level for collection the sourcing app ▪ Quarterly scrub of registration
Slide 10: Improving Credit Ratings
Improving Credit Ratings Long-Term Credit Rating Short-Term Credit Rating Reaffirmed CARE ICRA CRISIL CARE AA- / A+ / A+ / Mar-20 Mar-20 Mar-20 Mar-20 A1+ Stable Positive Stable Mar-18 A1+ ICRA Mar-20 A1+ A+ / A/ BBB+ / Mar-17 Mar-16 Aug-12 Stable Stable Stable Mar-18 A1+ 9
Slide 11: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Institutional Shareholders as on 31st March 2020 31st March 2020 Investor Details % Holding Others, 2.2% AU Small Finance Bank 6.34 Capital Group^ 5.36 Kedaara Capital, SBI Mutual Fund^ 3.56 FII, 23.6% 29.5% ^ Nomura Asset Management 2.76
Slide 12: Housing Sector – Under-penetrated
Housing Sector – Under-penetrated Size of Opportunity Measures from Government and Regulator Long-term Government Support
Slide 13: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (₹ Trn) Market Size ₹ 20.7 Trn (as on Dec-19) 16.5 19.2 19.4 20.2 20.7 YoY Growth +13% 12.3 14.2 (as on Dec-19) Banks - 18%, HFCs & NBFCs - 6% 8.8 10.4 Market Share Banks - 66% HFCs & NBFCs - 34% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Jun-
Slide 14: Measures from Government and Regulator
Measures from Government and Regulator Additional refinance for HFCs NHB has been extended an additional refinance facility of Rs. 1,00,000 Mn for housing finance companies. Moratorium under Covid package RBI permitted banks & NBFCs to allow a 3-month moratorium to their borrowers on the payment of
Slide 15: Long-term Government Support
Long-term Government Support Demand Side Supply Side Interest Subsidy Scheme (CLSS – Credit Linked Subsidy Scheme) Income Tax Expenses ▪ Interest rate subsidy scheme under Pradhan Mantri Awas Yojna (PMAY) ▪ Tax holiday on profits generated by developers of affordable housing projects approved till 3
Slide 16: Financial Performance
Financial Performance Key Business Parameters Geographical Distribution Spreads and Margins Asset Quality Liability Franchise Key Ratios
Slide 17: Performance Highlights
Performance Highlights AUM (₹ Mn) Disbursement (₹ Mn) GNPA (%) +31.2% +9.7% Maintained below 1% 77,961 29,304 59,416 26,724 Average Amount^ per Active 0.47% 0.46% Loan Account as on Mar-20 ₹ 0.84 Mn Mar-19 Mar-20 FY19 FY20 Mar-19 Mar-20 PAT* (₹ Mn) NIM (%) ROA (%) Maintained Average Amount^ per Disb
Slide 18: Healthy Business Growth
Healthy Business Growth AUM (₹ Mn) Disbursements (₹ Mn) PAT* (₹ Mn) +43% +28% 77,961 CAGR +59% 2,297 CAGR 29,304 CAGR 59,416 26,724 20,512 1,473 40,730 13,916 929 26,935 571 Mar-17 Mar-18 Mar-19 Mar-20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 * Data as per IGAAP 17
Slide 19: AUM Break-up
AUM Break-up Product Category Occupation Category Customer Category ATS : ₹ 0.85 Mn ATS : ₹ 0.73 Mn ATS : ₹ 0.86 Mn 24.5% 0.5% 35.1% ATS : ₹ 7.61 Mn 31-Mar-19 64.9% 99.5% 75.5% ATS : ₹ 0.90 Mn ATS : ₹ 0.86 Mn ATS : ₹ 0.67 Mn ATS : ₹ 0.87 Mn ATS : ₹ 0.84 Mn 26.5% 0.3% 35.0% ATS : ₹ 7.30 Mn 31-Mar-20
Slide 20: Disbursement Break-up – Product Category
Disbursement Break-up – Product Category FY19 FY20 ATS : ₹ 0.61 Mn ATS : ₹ 0.72 Mn 27.7% 29.9% 72.3% 70.1% ATS : ₹ 0.99 Mn ATS : ₹ 1.07 Mn Home Loan Other Mortgage Loan ATS : Average Amount (at the time of Sanction) per Disbursed Loan Account 19
Slide 21: Geographical Distribution
Geographical Distribution State Branches Operations Commenced in Rajasthan 88 2012 Maharashtra 42 2012 Gujarat 37 2012 Madhya Pradesh 36 2013 Delhi 6^ 2013 Haryana 14* 2017 Chhattisgarh 5 2017 Uttar Pradesh 14 2018 Uttarakhand 8 2018 Total 250 Data as on 31st March 2020 ^ includes Gurugram & Noida b
Slide 22: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings and Spreads (%) Yields (%) COB (%) Spreads (%) Yields (%) COB (%) Spreads (%) 18.13% 13.86% 13.88% 13.94% 13.75% 13.85% 13.78% 13.74% 13.63% 16.49% 15.12% 14.72% 13.99% 13.75% 13.63% 12.28% 11.41% 10.48% 8.58% 8.63% 8.82% 8.74% 8.79% 8.75% 8.68% 8.44% 9.
Slide 23: Margin and Cost Efficiency
Margin and Cost Efficiency OpEx (%) NIM (%) ROA (%) 8.84% 8.86% 9.00% 4.86% 7.27% 3.25% 3.22% 4.05% 4.11% 2.82% 3.89% 2.14% 3MFY18 H1FY18 9MFY18 FY18 3MFY18 H1FY18 9MFY18 FY18 3MFY18 H1FY18 9MFY18 FY18 8.54% 8.80% 9.37% 9.32% 3.64% 3.06% 3.58% 2.93% 4.17% 4.00% 3.89% 3.81% 3MFY19 H1FY19 9MFY19 FY19
Slide 24: Asset Quality
Asset Quality Gross NPAs (%) Net NPAs (%) 0.57% 0.62% 0.48% 0.49% 0.58% 0.58% 0.57% 0.48% 0.49% 0.46% 0.47% 0.46% 0.37% 0.34% Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 1+DPD (%) Segment-wise GNPAs Mar-19 Mar-20 4.07% 3.86 4.25% 3.92% 0.53% 3.43
Slide 25: Robust Liability Franchise
Robust Liability Franchise Diversified Funding Mix Loan Assets & Borrowings (₹ Mn) As on Mar-20 As on Mar-20 39 Lenders Terms Loans Floating Fixed Equity 18.4% Diversified Mix Assignment 0.4% 77,961 77,961 42.7% 134 Months 13.7% NHB Refinancing Average Borrowing Tenor NCDs 24.9% No exposure Cash Cre
Slide 26: ALM Surplus
ALM Surplus Surplus Management* (₹ Mn) Average tenor of outstanding borrowing (months) As on Mar-20 6,014 3,355 <3months 2,659 16,041 11,865 <6months 4,176 143 135 134 21,034 13,059 <1year 123 7,975 39,155 <3years 17,199 99 21,956 54,851 <5years 15,874 38,977 64 <7years 66,960 18,914 48,046 <10years
Slide 27: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (₹ Mn) As on Mar-20 Cash & Cash Equivalents 14,840 High Quality Un-availed CC Limits 1,180 Liquidity of Documented & Un-availed Sanctions from NHB 6,000 ₹ 22,020 Mn Documented & Un-availed Sanctions from other Banks 3,300 Total Liquidity Position 25,320 Par
Slide 28: Net Securitization Volume
Net Securitization Volume ₹ 5,385 Mn ₹ 6,802 Mn ₹ 6,647 Mn 2,816 2,992 2,579 2,281 2,077 1,574 995 1,029 991 1,000 500 0 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 27
Slide 29: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (₹) 12.66% 267.9 11.64% 235.2 10.33% 170.1 Mar-18 Mar-19 Mar-20 FY18 FY19 FY20 Capital Adequacy Ratio (%) Earning Per Share* (₹) Tier I Tier II 64.25% 31.5 55.94% 53.85% 23.1 15.2 5.61% 3.52% 2.18% Mar-18 Mar-19 Mar-20 FY18 FY19 FY20 Data of Capital
Slide 30: Annexures
Annexures Quarterly and Yearly Profit & Loss Statement Balance Sheet PAT Reconciliation ECL Provisioning Networth Reconciliation 29
Slide 31: Quarterly Profit & Loss Statement
Quarterly Profit & Loss Statement Particulars (₹ Mn ) Q4 FY20 Q4 FY19 Y-o-Y Q3 FY20 Q-o-Q Interest Income (incl. Processing Fee) 2,157.3 1,715.9 25.7% 2,037.5 5.9% Net gain on derecognition of financial instruments under 89.2 249.0 263.3 amortized cost category Non-Interest Income 103.6 86.9 92.4 In
Slide 32: Yearly Profit & Loss Statement
Yearly Profit & Loss Statement Particulars (₹ Mn ) FY20 FY19 Y-o-Y Interest Income (incl. Processing Fee) 7,924.3 6,056.6 30.8% Net gain on derecognition of financial instruments under amortized 765.9 782.8 cost category Non-Interest Income 340.8 270.3 Interest Expense (incl. Finance Charges) (3,609
Slide 33: Balance Sheet
Balance Sheet Particulars (₹ Mn ) 31-Mar-20 31-Mar-19 Sources of Funds Share Capital 783.2 781.1 Reserves & Surplus 20,196.1 17,588.5 Borrowings 53,520.4 36,532.5 Deferred Tax Liability (Net) 317.0 427.5 Other Liabilities & Provisions 1,763.7 938.7 Total 76,580.4 56,268.3 Application of Funds Loan A
Slide 34: PAT Reconciliation
PAT Reconciliation Particulars (₹ Mn ) FY20 FY19 Y-o-Y Q4 FY20 Q4 FY19 Y-o-Y Net Profit as per IGAAP 2,297.4 1,473.1 56.0% 683.2 441.4 54.8% 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 35: ECL Provisions
ECL Provisions Particulars (₹ Mn ) 31-Mar-20 31-Mar-19 Gross Stage 3 GNPA 284.1 222.7 % portfolio in Stage 3 (GNPA%) 0.46% 0.47% ECL Provision Stage 3 73.9 48.6 Net Stage 3 210.2 174.1 Coverage Ratio % Stage 3 26.02% 21.81% Gross Stage 1 & 2 61,734.5 47,149.9 % portfolio in stage 1 & 2 99.54% 99.53%
Slide 36: Networth Reconciliation
Networth Reconciliation Particulars (₹ Mn ) 31-Mar-20 Net worth as per previous GAAP 19,370.5 Adjustments increasing/(decreasing) net worth as reported under previous GAAP: Adoption of EIR for amortisation of Income and expenses - financial assets at amortised cost / net (229.4) interest on credit i
Slide 37: Thank You !
Contact Us Aavas Financiers Limited (Formerly known as Au HOUSING FINANCE LIMITED) CIN: L65922RJ2011PLC034297 Mr. Himanshu Agrawal investorrelations@aavas.in www.aavas.in Thank You ! Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285 Ms. Payal Dave / Ms. Neha Shroff payal.dave@sgap