Home First Finance Company India Ltd. · NSE:HOMEFIRST
Home First Finance Company India — Q3 FY23 Earnings Presentation
45 slides from Home First Finance Company India's earnings presentation, January 2023
Slide 1: Investor Presentation Q3 – FY23
Investor Tech Growth Productivity Presentation Q3 – 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) (1) Disbursement Gross Stage 3 / POS (GNPA %) ₹ 67,512 Mn ₹7,804 Mn (2) 1.8 In line with RBI circular dated 12 Nov 2021 1.1% prior to such classification +35.2% +7.6% +37.0% +11.1% -80 bps -10 bps Spread(3) Cost to Income DPD 30+ / POS % 5.
Slide 4: HomeFirst – Who We Are?
HomeFirst – Who We Are? Technology driven affordable housing finance company with pan India presence ESG Risk Rating by MorningStar Sustainalytics Home loans to first time home buyers with predominant focus on salaried individuals having income < ₹ 50k p.m ‘Amongst Leading Ratings in BFSI Sector ’ 88%
Slide 5: Our Journey
Our Journey AA- CARE Rating CARE / ICRA Rating ICRA & CARE Upgraded BBB- BBB+ A- A+ Long Term Assets Under Management (AUM) Credit AA- Facilities ₹ 67,512 Mn Rating to India AA- Stable Ratings: Crossed 100 Assigned Physical Long Term Branches As of Dec’22 We got listed Credit Facilities 67,512 W arb
Slide 6: Shareholding as on Jan'23
Shareholding as on 20 Jan’23 PROMOTER & PROMOTER GROUP % Holding TRUE NORTH FUND V LLP 20.2 TRUE NORTH FUND V LLP AETHER (MAURITIUS) LIMITED (GIC)^ 13.4 KEY INVESTORS % Holding 14.0% 20.2% ORANGE CLOVE INVESTMENTS B.V (WARBURG PINCUS) 28.7 AETHER (MAURITIUS) LIMITED (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 Salaried Informal Salaried Self Employed Self Employed Customer 1 Age:44 / Location: KR Puram 70% Customer 2 Age: 32 / Location: Sayan 30% Customer 3 Age: 36 / Location: Avadi (suburbs of Bangalore) (suburbs of Surat) (suburbs of Chennai) Who are they? 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’22 ( %) Pan India Distribution driven by strategic market selection & contiguous expansion Existing branches - 102 New branch locations - 54 Digital branches - 105 102 117 13 261 Geographic Expansion Branches Districts States/UT To
Slide 12: Omni Channel Lead Generation Strategy
Omni Channel Lead Generation Strategy Diversified lead generation channels |Q3 FY23 74.7% Diversified channels for generating leads such as connectors, builder ecosystem, digital, etc. 100% in-house conversion 8.5% by HomeFirst RMs. 3.2% 2.1% 4.2% 4.5% 0.2% 1.2% 1.4% 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 • E- Sign Home First App for all API Integration with third party Data on Cloud Digital marketing on major stakeholders databases • E- Vault online media o Integrated CRM and loan 360 view of customer for
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% 87% 91% 4.1 51% 54% 54% 57% 55% As of 20 Jan’23 Average payment per user on app Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 ₹32,653 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 bring an all- Certified as “Great Place To Work” by GPTW around improvement in the social, health and economic status Institute for 3 successive years of
Slide 20: Progress on Social Development
Progress on Social Development Responsibility towards customers ESG Initiatives conducted during the year Customer Satisfaction Sustainable Finance • Customer focus: Playing a key role in Financial inclusion • Funds raised from IFC to finance affordable housing and green housing. HomeFirst raised Rs
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 Experienced Board & Management We have customers belonging
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 7,804 6,612 7,022 6,411 All time high disbursement in the quarter, 5,696 q-o-q growth of 11.1% 20,305 15,728 16,183 10,966 FY19 FY20 FY21 FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Assets Under Management (
Slide 25: Consistent Portfolio Metrics | Dec'22
Consistent Portfolio Metrics | Dec’22 11% 30% 1% AUM by Occupation AUM by Product Salaried Housing Loan Shop Loans Self Employed LAP Sharp focus on High ratio of 88% housing loans 70% salaried customers 78% 2% 10% 22% AUM by Credit history 9% AUM by Ticket Size Upto 0.5mn AVG: 741 Have Credit Histor
Slide 26: Competitive Spreads
Competitive Spreads Portfolio Yield Net Interest Spread Movement COB Spread Last 4 Years Last 5 Quarters 12.9% 13.0% 12.8% 13.0% 13.1% 12.8% 12.8% 12.7% 12.3% Competitive Cost of Borrowing 8.8% 8.4% 8.0% 7.2% 7.2% 7.2% 7.1% 7.4% 6.9% FY19 FY20 FY21 FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 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% 15.6% 14.5% 14.0% 14.9% 14.4% 10.0% 10.9% 10.5% 9.5% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22
Slide 28: Healthy Leading Indicators
Healthy Leading Indicators Collection Efficiency Collection Efficiency (1) Collection efficiency trending back to Unique Customers (2) normal levels 99.4% 98.8% 98.4% 98.5% 98.0% 98.8% 98.9% 99.1% 98.0% 99.4% 97.8% 98.2% 98.4% 97.9% 97.4% 96.0% 96.9% 97.2% 96.9% 97.2% 97.1% 97.5% 97.3% 97.2% 96.9% 97.3% 9
Slide 29: Sound Credit Indicators
Sound Credit Indicators DPD 1+ / POS DPD 30+ / POS % Stage 3 / POS Stage 2 / POS 6.2% 6.5% 4.7% Improvement 5.3% 5.3% 4.1% 5.0% 4.7% 3.7% 3.7% 4.4% 4.4% 3.5% 3.3% continues in 2.6% 3.0% 3.2% 1.8% 2.0% 2.3% 2.3% 2.1% 1.9% 1+ & 30+ DPD 1.7% 1.8% 0.8% 1.0% 2.3% 2.1% 0.9% 0.9% 1.4% 1.4% 1.4% 1.4% 1.2% M
Slide 30: Diversified funding profile at competitive Cost of Borrowing
Diversified funding profile at competitive Cost of Borrowing DA & Co-lending NCD Borrowings Mix and Cost of Borrowing trend NHB Refinance NBFC Public Sector Banks Dec'20 Mar'21 Jun'21 Sep'21 Dec'21 Mar'22 Jun'22 Sep'22 Dec'22 Pvt Sector Banks 100% 8.50% COB% 20% 25% 90% 20% 22% 23% 23% 22% 19% (Repre
Slide 31: ALM Position as of Dec'22 - Cumulative
ALM Position as of Dec’22 - Cumulative Inflow Outflow Surplus 8,676 12,033 13,190 15,970 25,932 18,597 (₹Mn) 1,09,427 Robust ALM profile ensuring sufficient liquidity 89,809 90,830 buffers 63,125 63,877 Cumulative Positive flows 47,155 across all the 31,802 time buckets 23,015 18,612 14,588 10,982 5,912 0-
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 ₹2,630 Mn Consistent demand for assignment 1,844 of the company’s portfolio 1,491 1,472 1,273 1,183 Generated 1,159 1,140 business from 1,050 co-lending 879 857 894 transactions
Slide 33: Strong Liquidity Position
Strong Liquidity Position Liquidity Buffer as on Dec’22 (in ₹Mn) Unencumbered Cash and Cash equivalent 7,592 Un-availed Sanction from NHB 6,000 Un-availed Sanction from Banks 1,645 Total 15,237 Particulars (in ₹Mn) Q4FY23 Q1FY24 Q2FY24 Q3FY24 ₹ 26,122 million Opening Liquidity 15,237 16,732 16,727 17
Slide 34: Financial Updates
Financial Updates
Slide 35: Financial Highlights
Financial Highlights Profit After Tax ( ₹Mn ) Net worth ( ₹Mn ) Equity Raised 1508 3281 3450 32 26 18 29 ( ₹Mn ) (1) 1,741 15,737 16,856 17,483 Robust NW to Strong profit growth 15,100 13,805 support growth 1,001 796 9,334 543 587 457 459 5,227 FY19 FY20 FY21 FY22 Q3FY22 Q2FY23 Q3FY23 FY19 FY20 FY21 F
Slide 36: ECL Provisions Summary
ECL Provisions Summary Loan Particulars (in ₹Mn) Stage 1 Stage 2 Stage 3 Commitment Total For period ended Dec’22 Loans – Principal Outstanding 54,803.7 669.4 1,007.9 56,481.0 ECL Provision 156.7 76.3 293.1 13.8 539.9 Net Loans – Principal Outstanding 54,647.0 593.1 714.8 55,941.1 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) Q3FY23 Q2FY23 Q3FY22 QoQ YoY FY22 FY21 YoY Interest Income on term loans 1,800.7 1,637.2 1,214.5 10.0% 48.3% 4,770.5 4,061.3 17.5% Net gain on DA 76.0 93.3 175.8 678.4 439.3 Income other than interest income on term 508.2 390.9 178.
Slide 39: RoE Tree
RoE Tree Particulars Q3 FY23 Q2 FY23 Q3 FY22 FY22 FY21 Interest Income on term loans / Average total assets 11.5% 11.4% 10.5% 9.9% 10.2% Net Gain on DA / Average total Assets 0.5% 0.7% 1.5% 1.4% 1.1% Income other than interest income on term loans/ Average total assets 1.1% 1.1% 1.1% 1.1% 1.0% Total
Slide 40: Key Financial Ratios
Key Financial Ratios Particulars Q3FY23 Q2FY23 Q3FY22 FY22 FY21 Profit after tax on average total assets (ROA) 3.8% 3.8% 4.0% 3.6%(1) 2.5% Leverage (Average total assets / average Equity 3.6 3.5 3.1 3.3 3.5 or average Net worth) Profit after tax on average equity or average Net 13.7% 13.1% 12.4% 11.
Slide 41: Balance Sheet
Balance Sheet Particulars (in ₹Mn) Q3FY23 FY22 FY21 ASSETS Cash & cash equivalents and Other bank balance 3,675.6 6,678.5 6,798.7 Loans 55,954.9 43,048.7 33,265.0 Investments 4,338.4 - 3,750.1 Other financial assets 1,158.2 1,150.0 1,011.7 Property, plant and Equipment* 223.1 200.0 164.0 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 Assets Under Management/Gross Loan Assets represents the aggregate of current principal AUM - Assets Under Management outstanding and overdue principal outstanding, if any, for all loan assets under management which includes loan assets held by the Company as of the last d
Slide 45: Leaving so early for the I've decided to do my bit as well]
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Home First Finance Company India — Q3 FY23 Earnings Presentation on 6ix