Home First Finance Company India Ltd. · NSE:HOMEFIRST
Home First Finance Company India — Q1 FY24 Earnings Presentation
48 slides from Home First Finance Company India's earnings presentation, Jul 27, 2023
Slide 1: Stock exchange filing cover letter
HFFCIL/BSE/NSE/EQ/57/2023-24 Date:27-07-2023 To, To, BSE Limited, The National Stock Exchange of India Limited, Department of Corporate Services, The Listing Department, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Mumbai- 400001. Mumbai- 400 051. Scrip Code- 543259 Scrip Symbol- H
Slide 2: Home First Finance Company India Limited
Home First Finance Company India Limited
Slide 3: Safe Harbour
Safe Harbour Safe Harbour 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
Slide 4: Q1FY24 Highlights
Q1FY24 Highlights Executive Summary | Q1FY24 y-o-y q-o-q Assets Under Management (AUM) Disbursement Gross Stage 3 / POS (GNPA %) ₹ 77,759 Mn ₹8,952 Mn 1.6(1) In line with RBI circular dated 12 Nov 2021 1.0% prior to such classification +33.3% +8.0% +35.4% +3.0% -50 bps 0 bps Spread(2) Cost to Income
Slide 5: MD & CEO Commentary on Q1 FY24 Performance
MD Commentary MD & CEO Commentary on Q1 FY24 Performance “We stay focused on providing loans for affordable housing, led by distribution and use of technology, backed by diversified funding and strong risk management. We continue to expand our distribution in large affordable housing markets in Stat
Slide 6: HomeFirst – Who We Are?
HomeFirst – Who We Are? Corporate Information HomeFirst – Who are We? Technology driven affordable housing ESG Risk Rating by MorningStar Sustainalytics finance company with pan India presence ‘Amongst Leading Ratings in Home loans to first time home buyers with BFSI Sector ’ predominant focus on salar
Slide 7: Our Journey
Corporate Information Our Journey India ICRA / CARE CARE Rating CARE / ICRA Rating Ratings Rating BBB- BBB+ A- A+ AA- AA- 100+ Physical AUM crosses Branches ₹75 bn. Scalable operating model 1,00,000+ ₹ 77,759 Mn We got listed Customers 71,980 77,759 Assets Under Management W arburg Pincus invested i
Slide 8: Shareholding as on Jul'23
Corporate Information Shareholding as on 21 Jul’23 PROMOTER & PROMOTER GROUP % Holding TRUE NORTH FUND V LLP 18.2 AETHER (MAURITIUS) LIMITED (GIC)^ 12.0 KEY INVESTORS % Holding TRUE NORTH FUND V LLP ORANGE CLOVE INVESTMENTS B.V (WARBURG PINCUS) 26.5 16.0% 18.2% MFS & AIFS % Holding* INVESCO INDIA MF
Slide 9: Distinguished Board of Directors
Leadership Distinguished Board of Directors 08 Home First Finance Company India Ltd. Investor Presentation – Q1 FY24
Slide 10: Experienced Management Team
Leadership Experienced Management Team Ajay Khetan Vilasini Subramaniam Chief Business Officer Head – Strategic Alliances Gaurav Mohta Nutan Gaba Patwari Ashishkumar Darji Chief Marketing Officer Chief Risk Officer Chief Financial Officer Abhijeet Jamkhindikar Ramakrishna Vyamajala Arunchandra Jupalli Busin
Slide 11: Meet Our Customers
Corporate Information Meet Our Customers Formal Salaried Salaried Informal Salaried Self Employed Self Employed Customer 1 69% Customer 2 31% 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
Slide 12: Our Unique Value Proposition to Our Customers
Corporate Information 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 NPS Home loan requirement primarily Inability to meet documentation individuals in the ₹0.5 -1.5 mn range (1) requirements of t
Slide 13: Distribution Strategy
Corporate Information 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 Physical branches - 113 282 Proposed branches - 62 Touchpoints Digital branches - 107 113 123 13 282 Branches District
Slide 14: Omni Channel Lead Generation Strategy
Corporate Information Omni Channel Lead Generation Strategy Diversified lead generation channels | Q1 FY24 75.6% Diversified channels for generating leads such as connectors, builder ecosystem, digital, etc. 100% in-house conversion 8.4% by HomeFirst RMs. 3.2% 2.5% 4.6% 3.8% 0.3% 0.9% 0.7% Constructio
Slide 15: Data Science Backed Centralised Underwriting
Corporate Information Data Science Backed Centralised Underwriting Risk Management Design Tech-Led Centralised Salaried customers 100+ data points & digitally captured Consistency in underwriting Loans Approved within 48hrs data for all customers Build detailed understanding of customer Integrated C
Slide 16: Scalable Operating Model built on Holistic Technology Usage
Corporate Information Scalable Operating Model built on Holistic Technology Usage Recent Tech Interventions • E-NACH API Integration with third Data on Cloud • E- Sign Home First App for all Digital marketing on major party databases stakeholders online media • E- Vault Integrated CRM and loan o Pro
Slide 17: Digital Adoption
Corporate Information Digital Adoption Customer Rating on Google Unique user logins as % of active Playstore % Customers registered on App customers 84% 87% 91% 93% 93% 4.1 57% 55% 57% 55% Average payment per user on 54% As of 24 Jul’23 app ₹36,244 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q1FY23 Q2FY23 Q3
Slide 18: ESG at HomeFirst
ESG at HomeFirst Putting sustainability at core of operations
Slide 19: Commitment to ESG
ESG Commitment to ESG ESG Framework An ESG Execution Team with The Company understands the Comprehensive management team participation has growing importance of ESG and Policy & Robust been created to ensure has adopted a Board approved Governance Implementation implementation of the ESG Policy ESG
Slide 20: Digital Processes from start to finish to reduce Carbon Footprint
ESG 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 pro
Slide 21: Progress on Social Development
ESG 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 of migrant factory workers livin
Slide 22: Progress on Social Development
ESG Progress on Social Development Responsibility towards customers ESG Initiatives 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 280 crores from by fa
Slide 23: Strong Governance Structure
ESG Strong Governance Structure Separate Chairman & Managing Work Sustainably & Ethically Governance at core Director position Sustainable Finance Corporate Governance We promote Financial Inclusion. • Core competencies of Independent Directors directly relevant to company’s operations. Experienced
Slide 24: Strong Governance Practice
ESG Strong Governance Practice Corporate Governance Structure 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 i
Slide 25: Business Updates
Business Updates
Slide 26: Healthy Growth in Loan Book and Disbursements
Business Updates Healthy Growth in Loan Book and Disbursements Disbursement ( ₹Mn ) Last 5 Years Last 5 Quarters 8,691 8,952 7,804 6,612 7,022 All time high disbursement in the quarter, 30,129 q-o-q growth of 3.0% 20,305 15,728 16,183 10,966 FY19 FY20 FY21 FY22 FY23 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY2
Slide 27: Consistent Portfolio Matrix | Jun'23
Business Updates Consistent Portfolio Matrix | Jun’23 12% 31% 1% AUM by Product AUM by Occupation Salaried Housing Loan Shop Loans Self Employed LAP Sharp focus on High ratio of 87% housing loans 69% salaried customers 81% 2% 11% 19% AUM by Credit history 10% AUM by Ticket Size Upto 0.5mn AVG: 742 H
Slide 28: Competitive Spreads
Business Updates Competitive Spreads Portfolio Yield COB Net Interest Spread Movement Spread Repricing schedule 25bps w.e.f 1st Jul’22 Last 5 Years Last 5 Quarters 50bps w.e.f 1st Dec’22 50bps w.e.f 1st Apr’23 13.4% 13.7% 12.9% 13.0% 13.1% 13.0% 13.1% 12.8% 12.7% 12.3% Competitive Cost of Borrowing
Slide 29: Healthy Leading Indicators
Business Updates Healthy Leading Indicators Bounce rate : On the day of EMI presentation Bounce rate Bounce rates are range-bound 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% 15.0% 15.1% 13.6% 10.0% 10.9% 10.5% 9.5% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21
Slide 30: Healthy Leading Indicators
Business Updates Healthy Leading Indicators Collection Efficiency Collection Efficiency (1) Collection efficiency at normal levels Unique Customers (2) 98.7% 98.5% 99.3% 98.0% 98.8% 98.5% 98.8% 98.4% 98.5% 98.0% 98.8% 98.9% 97.8% 98.2% 97.2% 98.4% 97.3% 97.2% 96.9% 97.3% 97.4% 97.4% 97.3% 97.8% 97.3% 97.7
Slide 31: Sound Credit Indicators
Business Updates Sound Credit Indicators DPD 1+ / POS DPD 30+ / POS % Stage 3 / POS Stage 2 / POS 6.2% Asset quality at 5.3% 5.0% 4.1% 4.4% 4.7% 4.4% 3.7% 3.5% 4.0% 4.0% 4.3% 3.3% healthy levels 1.8% 3.0% 2.9% 3.2% 2.7% 2.7% 2.0% 2.3% 2.1% 1.7% 1.9% 1.8% 1.6% 1.6% 1.6% 0.8% 1.0% 2.3% 0.9% 1.4% 1.1%
Slide 32: Diversified funding profile at competitive Cost of Borrowing
Business Updates Diversified funding profile at competitive Cost of Borrowing DA & Co-lending Borrowings Mix and Cost of Borrowing trend NCD NHB Refinance Total Borrowings 39,322 40,039 40,150 44,919 48,387 52,281 58,009 59,556 68,215 NBFC (₹Mn) (1) Public Sector Banks Jun'21 Sep'21 Dec'21 Mar'22 Jun
Slide 33: ALM Position as of Jun'23 - Cumulative
Business Updates ALM Position as of Jun’23 - Cumulative Inflow Outflow Surplus 6,322 9,283 11,457 15,622 27,034 23,562 (₹Mn) Robust ALM 1,25,832 profile ensuring sufficient liquidity 1,02,046 1,02,270 buffers 75,012 71,086 Cumulative 55,463 Positive flows across all the time buckets 34,692 22,584 23,236 14
Slide 34: Assignment and Co-lending Transactions
Business Updates Assignment and Co-lending Transactions Direct Assignment Transactions Co-Lending Transaction ₹3,003 Mn ₹4,646 Mn ₹3,784 Mn ₹1,143 Mn Consistent demand for assignment 1,844 of the company’s portfolio 1,273 1,159 1,183 1,140 1,154 1,143 1,050 879 857 894 Generated 348 350 77 166 busin
Slide 35: Strong Liquidity Position
Business Updates Strong Liquidity Position Liquidity Buffer as on Jun’23 (in ₹Mn) Unencumbered Cash and Cash equivalent 8,622 - Un-availed Sanction from NHB Un-availed Sanction from Banks 12,295 Total 20,917 ₹ 12,472 million Liquidity raised during Q1FY24 Particulars (in ₹Mn) Q2FY24 Q3FY24 Q4FY24 Q1F
Slide 36: Financial Updates
Financial Updates
Slide 37: Financial Highlights
Financial Updates Financial Highlights Profit After Tax ( ₹Mn ) Net worth ( ₹Mn ) Equity Raised 1508 3281 3450 32 53 8 18 29 53 15 ( ₹Mn ) 2,283 (1) 18,173 18,680 1,741 17,483 18,173 Robust NW to 16,279 16,856 Strong profit growth 15,737 13,805 support growth 1,001 796 691 9,334 543 587 640 457 512 5,
Slide 38: ECL Provisions Summary
Financial Updates ECL Provisions Summary Loan Particulars (in ₹Mn) Stage 1 Stage 2 Stage 3 Commitment Total For period ended Jun’23 Loans – Principal Outstanding 63,875.0 841.7 1077.3 65,794.0 ECL Provision 179.3 86.1 334.3 15.8 615.5 Net Loans – Principal Outstanding 63,695.7 755.6 743.0 65,178.5 E
Slide 39: Annexures
Annexures
Slide 40: Quarterly and Annual Profit and Loss Statement
Financial Updates Quarterly and Annual Profit and Loss Statement Particulars (in ₹Mn) Q1FY24 Q4FY23 Q1FY23 QoQ YoY FY23 FY22 YoY Interest Income on term loans 2,166.2 1,937.2 1,449.0 11.8% 49.4% 6,825.0 4,770.5 43.1% Net gain on DA 125.7 112.0 99.0 380.4 678.4 Income other than interest income on te
Slide 41: RoE Tree
Financial Updates RoE Tree Particulars Q1FY24 Q4FY23 Q1FY23 FY23 FY22 Interest Income on term loans / Average total assets 12.1% 11.7% 10.9% 11.5% 9.9% Net Gain on DA / Average total Assets 0.7% 0.7% 0.8% 0.6% 1.4% Income other than interest income on term loans/ Average total assets 1.7% 1.6% 1.1%
Slide 42: Key Financial Ratios
Financial Updates Key Financial Ratios Particulars Q1FY24 Q4FY23 Q1FY23 FY23 FY22 Profit after tax on average total assets (ROA) 3.9% 3.9% 3.9% 3.9% 3.6%(1) Leverage (Average total assets / average Equity 3.9 3.7 3.3 3.5 3.3 or average Net worth) Profit after tax on average equity or average Net 15.
Slide 43: Balance Sheet
Financial Updates Balance Sheet Particulars (in ₹Mn) Jun’23 FY23 FY22 ASSETS Cash & cash equivalents and Other bank 5,437.2 2,984.1 6,678.5 balance Loans 65,194.3 59,957.0 43,048.7 Investments 3,656.8 2,808.0 0.0 Other financial assets 1,325.2 1,241.0 1,164.8 Property, plant and Equipment* 257.0 253
Slide 44: Consistent Financial Performance over the years
Financial Updates Consistent Financial Performance over the years Particulars (in ₹Mn) FY17 FY18 FY19 FY20 FY21 FY22 FY23 CAGR % Operational Information Number of Branches 36 42 60 68 72 80 111 Loan disbursals 4,244 7,455 15,728 16,183 10,966 20,305 30,129 AUM 8,473 13,559 24,436 36,184 41,411 53,80
Slide 45: Experienced and Diverse Board
Leadership 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 Go
Slide 46: Thank You
Thank You For further information, please contact Company CIN: L65990MH2010PLC240703 Mr. Manish Kayal, Head - Investor Relations manish.kayal@homefirstindia.com Investor Relations - HomeFirst investor.relations@homefirstindia.com
Slide 47: Glossary
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 t
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Home First Finance Company India — Q1 FY24 Earnings Presentation on 6ix