Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — Q1 FY2021 Earnings Presentation
37 slides from Aavas Financiers's earnings presentation, Aug 12, 2020
Slide 1: Exchange filing letter: Investor Presentation on Q1 FY21 results
A gvqs FINANCIERS LTD SAPNE AAPKE, SAATH HA MAARA Ref. No. AAVAS/SEC/2020-21/239 Date: August 12, 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, Fo
Slide 2: Investor Presentation - 3M FY21
AAVAS FINANCIERS LIMITED Investor Presentation - 3M FY21
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: Update on Impact of COVID-19
Update on Impact of COVID-19 Particulars Impact of COVID-19 Branches & corporate offices are operational while following necessary precautions like regular sanitization of premises, Business Operations social distancing protocols & wearing of masks etc. In accordance of the localized lockdowns as &
Slide 5: 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 6: Our Pillars of Strength
Our Pillars of Strength y Experienced Board of Directors y Professional Management Team y In-house Execution Model y Technology and Data Analytics y Improving Credit Ratings y Diversified Shareholding Base
Slide 7: Experienced Board of Directors
Experienced Board of Directors Sandeep Tandon Soumya Rajan Kalpana Iyer Chairman & Independent Director Independent Director* Independent Director Qualifications: Bachelor's in Electrical Qualifications: Bachelor's in Mathematics & Qualifications: Chartered Accountant Engineering from University of
Slide 8: Professional Management Team
Professional Management Team Sushil Kumar Agarwal - Managing Director & CEO Ghanshyam Rawat - Chief Financial Officer • 19+ 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 9: 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 <U E ■ Focused approach to directly ■ In-house underwriting team
Slide 10: 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 11: Improving Credit Ratings
Improving Credit Ratings Long-Term Credit Rating Short-Term Credit Rating r Reaffirmed CARE ICRA CRISIL A A -/ A+ / A+ / Jun-20 Jun-20 Jun-20 Stable Positive Stable A+ / A/ BBB+ / Mar-17 Mar-16 Aug-12 Stable Stable Stable J V J K 10
Slide 12: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Institutional Shareholders as on 30th June 2020 30th June 2020 Investor Details % Holding Others, 2.2% AU Small Finance Bank 5.94 Capital GroupA 5.75 Wasatch Global AdvisorsA 5.16 FII, 24.5% KEDAARA SBI Mutual FundA 3.56 Kotak (Offshore) A
Slide 13: Housing Sector - Under-penetrated
Housing Sector - Under-penetrated y Size of Opportunity y Measures from Government and Regulator -/ Long-term Government Support
Slide 14: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (^ Trn) Market Size ^ 20.7 Trn (as on Dec-19) I 6.5 19.2 19.4 20.2 20-7 YoY Growth +13% (as on Dec-19) Banks -18%, HFCs & NBFCs - 6% Market Share Banks - 66% HFCs & NBFCs -34% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Jun-19 Sep-19 Dec-19 (as
Slide 15: Measures from Government and Regulator
Measures from Government and Regulator Additional refinance for HFCs NHB has been extended an additional refinance facility of Rs. 50,000 Mn for housing finance companies in August. Moratorium under Covid package RBI permitted banks & NBFCs/HFCs/MFIs to allow a further 3- month moratorium to their b
Slide 16: 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 AwasYojna (PMAY) ■ Tax holiday on profits generated by developers of affordable housing projects approved till 31
Slide 17: Financial Performance
Financial Performance y Key Business Parameters y Geographical Distribution -/ Spreads and Margins s/ Asset Quality y Liability Franchise y Key Ratios
Slide 18: Performance Highlights
Performance Highlights AUM (K Mn) Disbursement (K Mn) GNPA (%) 79,353 63,623 Average AmountAper Active Loan Account as on Jun-20 ^ 0.83 Mn Jun-19 Jun-20 Jun-19 Jun-20 PAT* (K Mn) NIM (%) ROA (%) Average AmountAper Disbursed +10.5% <-195 bps Loan Account in 3MFY21 ] ^ 0.70 Mn 501 453 8.10% 6.15% 3MFY
Slide 19: Healthy Business Growth
Healthy Business Growth AUM (^ Mn) Disbursements (^ Mn) PAT* (^ Mn) * Data as per IGAAP 18
Slide 20: AUM Break-up
AUM Break-up Agvqs Product Category Occupation Category Customer Category ATS : ^ 0.84 Mn ATS : ^ 0.72 M ATS : ^ 0.86 Mn A 30-Jun-19 ATS : ^ 0.90 Mn ATS : ^ 0.84 Mn ATS : ^ 0.66 Mn ATS : ^ 0.86 Mn ATS : ^ 0.83 Mn 35.0% i 30-Jun-20 1 1 J ATS : ^ 0.91 Mn ATS : ^ 0.81 Mn Retail Corporate Home Loan Othe
Slide 21: Disbursement Break-up - Product Category
Disbursement Break-up - Product Category 3M FY20 3M FY21 ATS : ^ 0.41 Mn ATS : ^ 0.52 Mn ATS : ^ 1.02 Mn ATS : ^ 0.98 Mn Home Loan Other Mortgage Loan ATS : Average Amount (at the time of Sanction) per Disbursed Loan Account 20
Slide 22: Geographical Distribution
Geographical Distribution State Branches Operations Commenced in Rajasthan 88 2012 Maharashtra 42 2012 Gujarat 37 2012 Madhya Pradesh 36 2013 Delhi 6A 2013 Haryana 14** 2017 Chhattisgarh 5 2017 Uttar Pradesh 14 2018 Uttarakhand 9 2018 Total 251 Data as on 30thJune 2020 A includes Gurugram & Noida br
Slide 23: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings and Spreads (%) • Yields (%) • COB (%) Spreads (%) Yields (%) • COB (%) Spreads (%) 18.13% 13.88% 13.94% 13.75% 13.85% 13.78% 13.74% 13.63% 13.62% • -------------- * --------- ---- -------------------------------------------------------- -• • 8.63% 8.82%
Slide 24: Margin and Cost Efficiency
Margin and Cost Efficiency OpEx (%) NIM (%) ROA (%) 8.54% 8.80% 9.37% 9.32% 3.58% 3.64% 2.93% 3.06% 4.17% 4.00% 3.89% 3.81% 3MFY19 H1FY19 9MFY19 FY19 3MFY19 H1FY19 9MFY19 FY19 3MFY19 H1FY19 9MFY19 FY19 8.69% 8.66% 8.16% 4.03% 4.05% 3.75% 8.10% 3.17% 3.38% 3.28% 3 42% 3.38% 3MFY20 H1FY20 9MFY20 FY20
Slide 25: Asset Quality
Asset Quality Gross NPAs (%) Net NPAs (%) 0.58% 0.58% 0'62% 0.57% 0.49% 0.48% 0.49% 0.46% 0.37% 0.34% 0.32% Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 1+DPD (%) Segment-wise GNPAs Jun-19 Jun-20 0.67% 3.86% 4.25% 3.92% Home Loan Other Mortgage Lo
Slide 26: Robust Liability Franchise
Robust Liability Franchise Diversified Funding Mix Loan Assets & Borrowings (^ Mn) As on Jun-20 As on Jun-20 31 Lenders ■ Terms Loans Floating Fixed Equity Diversified Mix ■ Assignment 79,353 79,353 No exposure ■ NHB Refinancing to Commercial Papers ■ NCDs Incremental Q1 FY21 borrowings ■ Cash Credi
Slide 27: ALM Surplus
ALM Surplus Surplus Management* Mn) Average tenor of outstanding borrowing (months) As on Jun-20 143 70,993 77,564 Assets Liabilities Surplus * Data as per IGAAP 26
Slide 28: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (^ Mn) As on Jun-20 Cash & Cash Equivalents 15,050 High Quality Un-availed CC Limits 1,270 Liquidity of Documented & Un-availed Sanctions from NHB 4,000 ^ 20,320 Mn Documented & Un-availed Sanctions from other Banks 3,300 Total Liquidity Position 23,620 Par
Slide 29: Net Securitization Volume
Net Securitization Volume ^ 5,385 Mn ^ 6,802 Mn ^ 6,647 Mn Nil 4 ------------------------------------------------------------------------------------- ► -4-------------------------------------------------------------------------------------- ► -4------------------------------------------------------
Slide 30: Key Financial Ratios
Key Financial Ratios Agvqs ROE (%) Book Value Per Share (^) 274.6 9.74% 241.1 9.81% 9.43% 180.1 Jun-18 Jun-19 Jun-20 3MFY19 3MFY20 3MFY21 Capital Adequacy Ratio (%) Earning Per Share* (^) Tier I Tier II 61.00% 55.29% 53.73% 6.3 5.7 4.2 Jun-18 Jun-19 Jun-20 3MFY19 3MFY20 3MFY21 Data of Capital Adequa
Slide 31: Annexures
Annexures y Quarterly Profit & Loss Statement Y Balance Sheet y PAT Reconciliation y ECL Provisioning y Networth Reconciliation 30
Slide 32: Quarterly Profit & Loss Statement
Quarterly Profit & Loss Statement Particulars (^ Mn ) Q1FY21 Q1FY20 Y-o-Y Interest Income (incl. Processing Fee) 2,297.5 1,836.5 25.1% Gain on derecognition of financial instruments under - 69.3 amortized cost category Non-Interest Income 38.4 69.5 Interest Expense (incl. Finance Charges) (1,130.5)
Slide 33: Balance Sheet
Balance Sheet Particulars Mn ) 30-Jun-20 31-Mar-20 Sources of Funds Share Capital 783.2 783.2 Reserves & Surplus 20,722.6 20,196.1 Borrowings 56,762.3 53,520.4 Deferred Tax Liability (Net) 262.6 317.0 Other Liabilities & Provisions 1,748.5 1,763.7 Total 80,279.4 76,580.4 Application of Funds Loan As
Slide 34: PAT Reconciliation
PAT Reconciliation Particulars (^ Mn ) Q 1FY21 Q 1FY20 Y-o-Y Net Profit as per IGAAP 601.2 453.7 32.5% Add / (Less): Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financial assets at amortised cost / net interest on credit
Slide 35: ECL Provisions
ECL Provisions Particulars (^ M n) 30-Jun-20 30-Jun-19 Gross Stage 3 GNPA 294.8 299.4 % portfolio in Stage 3 (GNPA%) 0.46% 0.58% ECL Provision Stage 3 89.4 55.2 Net Stage 3 205.4 244.2 Coverage Ratio % Stage 3 30.31% 18.43% Gross Stage 1 & 2 63,537.9 50,976.9 % portfolio in stage 1 & 2 99.54% 99.42%
Slide 36: Networth Reconciliation
Networth Reconciliation Particulars Mn ) 30-Jun-20 Net worth as per previous GAAP 19,953.2 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 interest on credit impaired loa
Slide 37: Contact Us
Contact Us Aavas Financiers Limited (Formerly known as Au HOUSING FINANCE LIMITED) CIN:L65922RJ2011PLC034297 Mr. Himanshu Agrawal investorrelations@aavas.in www.aavas.in Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285 Ms. Payal Dave / Ms. Neha Shroff payal.dave@sgapl.net / neha.