Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — H1 FY20 Earnings Presentation
37 slides from Aavas Financiers's earnings presentation, Oct 25, 2019
Slide 1: Exchange filing cover letter for investor presentation
A gvqs FINANCIERS LTD SAPNE AAPKE, SAATH HAMAARA Ref. No. AAVAS/SEC/2019-20/272 Date: October 25, 2019 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 – H1 FY20
AAVAS FINANCIERS LIMITED Investor Presentation – H1 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
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 ▪ Focused approach to directl
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+ / Sep-19 Sep-19 Sep-19 Sep-19 A1+ Stable Positive Stable Mar-18 A1+ ICRA Sep-19 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 30th September 2019 30th September 2019 Investor Details % Holding Others, 0.9% AU Small Finance Bank 6.42 SBI Mutual Fund^ 4.95 ^ FII, 18.1% Nomura Asset Management 2.67 Kedaara Capital, Buena Vista Fund M
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 ₹ 19.1 Trn (as on Mar-19) 16.6 17.0 17.8 18.2 19.1 YoY Growth +15% 14.2 12.3 (as on Mar-19) Banks – 19%, HFCs & NBFCs – 9% 8.8 10.4 Market Share Banks - 64% HFCs & NBFCs - 36% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Jun-18 Sep-
Slide 14: Measures from Government and Regulator
Measures from Government and Regulator NHB provides additional liquidity to HFCs NHB to provide additional liquidity support of Rs. 3,00,000 Mn to HFCs for easing the flow of funds into the housing sectors. Regulation & Supervision of HFCs RBI has taken over the regulation of HFCs while the supervis
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) ▪ 100% tax deduction on affordable housing projects for developers to increase supply in under
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 (%) +41.9% +20.8% Maintained below 1% 67,530 13,151 10,888 0.57% 0.62% Average Amount^ per Active 47,592 Loan Account as on Sep-19 ₹ 0.84 Mn Sep-18 Sep-19 H1FY19 H1FY20 Sep-18 Sep-19 PAT* (₹ Mn) NIM (%) ROA (%) Maintained Average Amount^ per
Slide 18: Healthy Business Growth
Healthy Business Growth AUM (₹ Mn) Disbursements (₹ Mn) PAT* (₹ Mn) +49% +38% 67,530 CAGR +62% 1,028 CAGR 13,151 CAGR 47,592 10,888 7,931 621 31,970 4,981 411 20,379 240 30-Sep-16 30-Sep-17 30-Sep-18 30-Sep-19 H1FY17 H1FY18 H1FY19 H1FY20 H1FY17 H1FY18 H1FY19 H1FY20 * Data as per IGAAP 17
Slide 19: AUM Break-up
AUM Break-up Product Category Occupation Category Customer Category ATS : ₹ 0.84 Mn ATS : ₹ 0.78 Mn ATS : ₹ 0.83 Mn 25.0% 0.7% 35.3% ATS : ₹ 6.79 Mn 30-Sep-18 64.7% 99.3% 75.0% ATS : ₹ 0.87 Mn ATS : ₹ 0.85 Mn ATS : ₹ 0.69 Mn ATS : ₹ 0.86 Mn ATS : ₹ 0.84 Mn 25.4% 0.5% 35.2% ATS : ₹ 7.46 Mn 30-Sep-19
Slide 20: Disbursement Break-up – Product Category
Disbursement Break-up – Product Category H1 FY19 H1 FY20 ATS : ₹ 0.55 Mn ATS : ₹ 0.72 Mn 29.6% 34.0% 66.0% 70.4% ATS : ₹ 0.90 Mn ATS : ₹ 1.04 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 78 2012 Maharashtra 39 2012 Gujarat 33 2012 Madhya Pradesh 32 2013 Delhi 4^ 2013 Haryana 11* 2017 Chhattisgarh 5 2017 Uttar Pradesh 9 2018 Uttarakhand 5 2018 Total 216 Data as on 30th September 2019 ^ includes Gurugram & Noid
Slide 22: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings (%) and Spreads Yields (%) COB (%) Spreads (%) Yields (%) COB (%) Spreads (%) 18.13% 14.23% 13.99% 13.86% 13.88% 13.94% 13.75% 13.85% 13.78% 16.49% 15.12% 14.72% 13.99% 13.75% 12.28% 11.41% 8.75% 10.48% 8.63% 8.58% 8.82% 8.79% 8.63% 8.74% 8.75% 9.51% 8.6
Slide 23: Margin and Cost Efficiency
Margin and Cost Efficiency OpEx (%) NIM (%) ROA (%) 8.84% 8.86% 9.00% 3.25% 3.22% 4.86% 7.27% 2.82% 4.05% 4.11% 2.14% 3.89% 3MFY18 H1FY18 9MFY18 FY18 3MFY18 H1FY18 9MFY18 FY18 3MFY18 H1FY18 9MFY18 FY18 8.54% 8.80% 9.39% 9.32% 3.58% 3.64% 4.17% 4.00% 3.92% 3.81% 2.93% 3.06% 3MFY19 H1FY19 9MFY19 FY19
Slide 24: Asset Quality
Asset Quality Gross NPAs (%) Net NPAs (%) 0.64% 0.62% 0.54% 0.58% 0.58% 0.48% 0.49% 0.48% 0.49% 0.57% 0.46% 0.47% 0.39% 0.37% Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 1+DPD (%) Segment-wise GNPAs Sep-18 Sep-19 4.77% 4.90% 0.67% 0.66% 4.07% 4.2
Slide 25: Robust Liability Franchise
Robust Liability Franchise Diversified Funding Mix Loan Assets & Borrowings (₹ Mn) As on Sep-19 As on Sep-19 37 Lenders Terms Loans Floating Fixed Equity 15.6% Diversified Mix 41.5% Assignment 67,530 67,530 15.2% 139 Months Average Borrowing Tenor NHB Refinancing 27.7% NCDs No exposure 38,506 38,443
Slide 26: ALM Surplus
ALM Surplus Surplus Management* (₹ Mn) Average tenor of outstanding borrowing (months) As on Sep-19 4,589 1,825 <3months 2,765 6,691 1,825 <6months 4,867 143 139 135 11,316 3,853 <1year 123 7,463 32,723 <3years 13,725 99 18,998 45,973 <5years 13,271 32,703 64 <7years 56,153 17,124 39,029 <10years 61
Slide 27: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (₹ Mn ) As on Sep-19 Q3 FY20 Q4 FY20 Cash & Cash Equivalents 10,500 Un-availed Sanctions 9,020 Opening Liquidity 19,520 21,495 Add: Principal Repayments & Surplus from Operations 3,061 3,316 Less: Debt Repayments 1,086 1,646 Closing Liquidity 21,495 23,165
Slide 28: Net Securitization Volume
Net Securitization Volume ₹ 5,385 Mn ₹ 6,802 Mn ₹ 3,570 Mn 2,816 2,992 2,579 2,281 1,574 995 1,029 991 500 0 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 27
Slide 29: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (₹) 14.7% 12.8% 251.0 10.2% 186.4 114.6 Sep-17 Sep-18 Sep-19 H1FY18 H1FY19 H1FY20 Capital Adequacy Ratio (%) Earning Per Share* (₹) Tier I Tier II 60.4% 15.4 53.6% 9.0 30.7% 8.1 4.7% 3.2% 0.5% Sep-17 Sep-18 Sep-19 H1FY18 H1FY19 H1FY20 Data of Capital
Slide 30: Annexures
Annexures Quarterly and Half 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 ) Q2 FY20 Q2 FY19 Y-o-Y Q1 FY20 Q-o-Q Interest Income (incl. Processing Fee) 2,237.1 1,585.6 1,905.7 Interest Expenses 833.5 625.1 803.9 Net Interest Income 1,403.7 960.5 46.1% 1,101.8 27.4% Non-Interest Income 75.2 53.8 69.5 Non-Interest Expenses
Slide 32: Half Yearly Profit & Loss Statement
Half Yearly Profit & Loss Statement Particulars (₹ Mn ) H1 FY20 H1 FY19 Y-o-Y Interest Income (incl. Processing Fee) 4,142.9 3,009.4 Interest Expenses 1,637.4 1,206.5 Net Interest Income 2,505.5 1,802.8 39.0% Non-Interest Income 144.7 101.2 Non-Interest Expenses 1,019.8 874.9 Provisions, Contingenci
Slide 33: Balance Sheet
Balance Sheet Particulars (₹ Mn ) 30-Sep-19 31-Mar-19 Sources of Funds Share Capital 781.7 781.1 Reserves & Surplus 18,838.7 17,588.5 Borrowings 42,182.4 36,532.5 Deferred Tax Liability (Net) 398.0 427.5 Other Liabilities & Provisions 1,971.7 938.7 Total 64,172.5 56,268.3 Application of Funds Loan A
Slide 34: PAT Reconciliation
PAT Reconciliation Particulars (₹ Mn ) H1 FY20 H1 FY19 Y-o-Y Q2 FY20 Q2 FY19 Y-o-Y Net Profit as per IGAAP 1,028.1 620.8 65.6% 574.4 330.8 73.6% Add / (Less) : Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financial assets
Slide 35: ECL Provisions
ECL Provisions Particulars (₹ Mn ) 30-Sep-19 30-Sep-18 Gross Stage 3 GNPA 328.2 227.4 % portfolio in Stage 3 (GNPA%) 0.62% 0.57% ECL Provision Stage 3 67.4 36.4 Net Stage 3 260.8 191.0 Coverage Ratio % Stage 3 20.55% 16.00% Gross Stage 1 & 2 52,980.1 39,568.1 % portfolio in stage 1 & 2 99.38% 99.43%
Slide 36: Networth Reconciliation
Networth Reconciliation Particulars (₹ Mn ) 30-Sep-19 Net worth as per previous GAAP 18,104.8 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 (177.4) 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