Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — H1 FY23 Earnings Presentation
37 slides from Aavas Financiers's earnings presentation, Oct 20, 2022
Slide 1: Exchange filing cover letter for investor presentation
Ref. No. AAVAS/SEC/2022-23/644 Date: October 20, 2022 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, Dalal Street, Fort, Mumbai – 400051 Mumbai – 400001 Scrip Symbol:
Slide 2: Aavas Financiers Limited Investor Presentation – H1 FY23
AAVAS FINANCIERS LIMITED Investor Presentation – H1 FY23
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 Chairperson of Board, Independent Independent Director & Chairperson of Independent Director & Chairperson Director & Chairperson of Stakeholders Nomination & Remuneration Committee of Audit Committee Relationship Committee Qual
Slide 7: Professional Management Team
Professional Management Team Sushil Kumar Agarwal - MD & CEO Ripudaman Bandral – Chief Credit Anshul Bhargava – Chief People • 21+ yrs of experience in retail Officer Officer financial services • Prior associated with Indiabulls, ICICI • Prior associated with Kotak Mahindra Bank, HDFC Ltd • Prior as
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 Risk management Collections sourcing 13.4 13.1 Superior Business Outcome 10.6 10.0 ▪ 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 ▪ E-disbursement & E- ▪ Route optimization for are logged in through with credit bureaus repayment facility at all collection personnel the sourcing app ▪ Quarterly scrub
Slide 10: IT Transformation – Project GATI and UNNATI
IT Transformation – Project GATI and UNNATI (End to End digital journey from origination to servicing) Guiding Principles Key Objectives ▪ Be a digital first, technologically advanced & agile 1 2 3 organization ▪ Transform loan origination & customer service Linear Growth with Be a “Bank” by Create
Slide 11: Improving Credit Ratings
Improving Credit Ratings Long-Term Credit Rating Short-Term Credit Rating CARE Limited upgraded the Long-Term rating from AA-/Positive to AA/Stable on 2nd Sep 2022 Reaffirmed ICRA CARE ICRA Sep-22 A1+ AA / AA / Sep-22 Sep-22 Stable Stable CARE Sep-22 A1+ A/ A+ / INDIA RATINGS Mar-16 Mar-17 Stable St
Slide 12: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Institutional Shareholders as on 30th Sep 2022 30th Sep 2022 Investor Details % Holding Others, 6.27% Capital Group^ 7.99 Wasatch Global Investors^ 7.26 UTI Asset Management^* 4.01 Kedaara Capital, Nomura Asset Management^ 3.34 23.63% GIC^
Slide 13: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (₹ Trn) Market Size ₹ 25.0 Trn (as on Mar-22) 25.0 20.7 22.5 18.4 YoY Growth +10% 13.4 15.8 11.6 (as on Mar-22) Banks - 9%, HFCs & NBFCs - 13% Market Share Banks - 67% HFCs & NBFCs - 33% Mar-17 Mar-18 Mar-19 Mar-21 Mar-22 Mar-16 Mar-20 (as on
Slide 14: Measures from Government and Regulator
Measures from Government and Regulator Hike in Policy Rate After witnessing 90bps hike in repo rate during 1st Quarter, RBI’s MPC has further hiked repo rate by 100 bps in 2nd quarter to 5.90% . MPC also decided to remain focused on Resolution Framework 2.0 withdrawal of accommodation to ensure that
Slide 15: Financial Performance
Financial Performance Key Business Parameters Geographical Distribution Spreads and Margins Asset Quality Liability Franchise Key Ratios
Slide 16: Performance Highlights
Performance Highlights AUM (₹ Mn) Disbursement (₹ Mn) Gross Stage 3 (%) +23.6% +64.2% # includes 0.17% with DPD 14 bps upto 90 but categorized as 125,437 GNPA/Gross Stage 3 on 101,481 22,403 account of RBI notification 0.96% 1.10%# 13,641 0.17% 0.93% Average Amount^ per Active Loan Account as on Sep
Slide 17: Healthy Business Growth
Healthy Business Growth AUM (₹ Mn) Disbursements (₹ Mn) PAT* (₹ Mn) +29% +15% 113,502 +40% 3,575 CAGR CAGR 36,022 CAGR 94,543 2,903 77,961 29,304 26,569 2,491 26,724 59,416 20,512 1,761 40,730 932 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 Data as per Ind-AS
Slide 18: AUM Break-up
AUM Break-up Product Category Occupation Category Customer Category ATS : ₹ 0.85 Mn ATS : ₹ 0.69 Mn ATS : ₹ 0.88 Mn 27.9% 0.1% 39.8% ATS : ₹ 6.70 Mn 30-Sep-21 60.2% 99.9% 72.1% ATS : ₹ 0.93 Mn ATS : ₹ 0.83 Mn ATS : ₹ 0.73 Mn ATS : ₹ 0.90 Mn ATS : ₹ 0.87 Mn 29.1% 0.1% 39.8% ATS : ₹ 6.87 Mn 30-Sep-22
Slide 19: Disbursement Break-up – Product Category
Disbursement Break-up – Product Category H1 FY22 H1 FY23 ATS : ₹ 0.84 Mn ATS : ₹ 0.75 Mn 37.5% 34.7% 62.5% 65.3% ATS : ₹ 1.10 Mn ATS : ₹ 1.10 Mn Disbursement include 12.7% of mortgaged-backed MSME Loans Disbursement include 13.8% of mortgage-backed MSME Loans classified under Other Mortgage Loans cl
Slide 20: Geographical Distribution
Geographical Distribution State Branches Operations Commenced in Rajasthan 100 2012 Maharashtra 48 2012 Gujarat 44 2012 Madhya Pradesh 46 2013 Delhi 6^ 2013 Haryana & Punjab 18 2017 Chhattisgarh 8 2017 Uttar Pradesh 23 2018 Uttarakhand 9 2018 Himachal Pradesh 4 2020 Orissa 4 2021 Karnataka 11 2021 T
Slide 21: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings and Spreads (%) Yields (%) COB (%) Spreads (%) Yields (%) COB (%) Spreads (%) 16.49% 13.42% 13.16% 12.99% 12.90% 12.79% 15.12% 12.65% 12.67% 12.85% 14.72% 13.99% 13.75% 13.63% 13.16% 12.65% 11.41% 10.48% 9.51% 7.68% 8.63% 8.74% 7.40% 7.25% 8.44% 7.17% 7.
Slide 22: Margin and Cost Efficiency
Margin and Cost Efficiency OpEx (%) NIM (%) ROA (%) 6.82% 7.42% 7.71% 3.22% 3.49% 6.15% 2.89% 2.62% 2.80% 2.82% 3.01% 2.55% 3MFY21 H1FY21 9MFY21 FY21 3MFY21 H1FY21 9MFY21 FY21 3MFY21 H1FY21 9MFY21 FY21 7.80% 8.11% 8.23% 3.37% 3.58% 6.93% 2.64% 3.25% 2.88% 3.21% 3.34% 3.45% 3MFY22 H1FY22 9MFY22 FY22
Slide 23: Asset Quality
Asset Quality Gross Stage 3 (%) Net Stage 3 (%) DPD upto 90 DPD above 90 DPD upto 90 DPD above 90 1.72% 1.33% 1.14% 0.89% 1.08% 1.10% 0.98% 0.96% 0.99% 0.17% 0.86% 0.70% 0.77% 0.84% 0.84% 0.26% 0.71% 0.72% 0.31% 0.13% 0.24% 0.21% 0.93% 0.83% 0.68% 0.82% 0.71% 0.63% 0.52% 0.63% Mar-21 Jun-21 Sep-21 D
Slide 24: Robust Liability Management
Robust Liability Management Diversified Funding Mix Prime Lending Rate hiked by 75 bps in H1 FY23 Loan Assets & Borrowings (₹ Mn) As on Sep-22 Further increase of 50 bps wef. 05th Oct 2022 As on Sep-22 30 Lenders Terms Loans Floating Fixed Equity 14.7% Diversified Mix 41.8% Assignment No exposure 12
Slide 25: ALM Surplus
ALM Surplus Surplus Management* (₹ Mn) Average tenor of outstanding borrowing (months) As on Sep-22 11,649 <3months 4,195 7,454 22,780 <6months 7,534 15,246 143 31,160 135 134 <1year 15,873 130 15,287 126 127 62,166 <3years 47,183 14,984 87,180 <5years 71,534 15,646 106,062 <7years 83,333 22,729 118
Slide 26: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (₹ Mn) As on Sep-22 Cash & Cash Equivalents 13,270 High Quality Un-availed CC Limits 1,100 Liquidity of Documented & Un-availed Sanctions from NHB - ₹ 14,370 Mn Documented & Un-availed Sanctions from other Banks 14,000 Total Liquidity Position 28,370 Partic
Slide 27: Net Securitization Volume
Net Securitization Volume ₹ 6,647 Mn ₹ 5,496 Mn ₹ 7,784 Mn ₹ 4,391 Mn 2,981 3,054 2,967 2,579 2,397 2,077 1,749 1,509 1,590 1,424 991 1,000 0 0 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 26
Slide 28: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (₹) 12.25% 13.44% 10.80% 325.7 383.6 283.4 Sep-20 Sep-21 Sep-22 H1FY21 H1FY22 H1FY23 Capital Adequacy Ratio (%) Earning Per Share* (₹) Tier I Tier II 24.8 19.2 50.84% 51.00% 49.73% 14.7 2.24% 1.14% 0.63% Sep-20 Sep-21 Sep-22 H1FY21 H1FY22 H1FY23 Data
Slide 29: Annexures
Annexures Quarterly Profit & Loss Statement Balance Sheet PAT Reconciliation ECL Provisioning Networth Reconciliation ESG 28
Slide 30: Quarterly Profit & Loss Statement
Quarterly Profit & Loss Statement Particulars (₹ Mn ) Q2 FY23 Q2 FY22 Y-o-Y Q1 FY23 Q-o-Q Interest Income on Loans (incl. Processing Fee) 3357.9 2,826.6 18.8% 3,199.8 4.9% Interest Income on Fixed Deposits 197.6 144.4 196.6 Reversal Income on Earlier Assigned Loans (268.8) (183.9) (247.9) Upfronting
Slide 31: Half Yearly Profit & Loss Statement
Half Yearly Profit & Loss Statement Particulars (₹ Mn ) H1 FY23 H1 FY22 Y-o-Y Interest Income on Loans (incl. Processing Fee) 6,557.7 5,494.7 19.3% Interest Income on Fixed Deposits 394.2 286.4 Reversal Income on Earlier Assigned Loans (516.7) (363.6) Upfronting Income on Fresh Assigned Loans 710.7
Slide 32: Balance Sheet
Balance Sheet Particulars (₹ Mn ) 30-Sep-22 31-Mar-22 Sources of Funds Share Capital 790.3 789.4 Reserves & Surplus 29,523.8 27,297.1 Borrowings 85,712.3 79,725.0 Deferred Tax Liability (Net) 426.6 353.6 Other Liabilities & Provisions 2,426.8 2,038.9 Total 118,879.7 110,203.8 Application of Funds Lo
Slide 33: PAT Reconciliation
PAT Reconciliation Particulars (₹ Mn ) H1 FY23 H1 FY22 Y-o-Y Q2 FY23 Q2 FY22 Y-o-Y Net Profit as per IGAAP 1,799.4 1547.9 16.2% 915.8 834.9 9.7% Add / (Less) : Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financial assets
Slide 34: ECL Provisions
ECL Provisions Particulars (₹ Mn ) 30-Sep-22 30-Sep-21 31-Mar-22 Gross Stage 1 97,945.8 76,921.0 87,571.0 During FY22, resolution plan was implemented for certain % portfolio in Stage 1 96.53% 92.93% 96.04% borrower accounts as per RBI’s Resolution Framework 2.0 ECL Provision Stage 1 220.4 203.7 216
Slide 35: Networth Reconciliation
Networth Reconciliation Particulars (₹ Mn ) 30-Sep-22 31-Mar-22 Net worth as per previous GAAP 28,120.1 26,133.3 Adjustments increasing/(decreasing) net worth as reported under previous GAAP: Adoption of EIR for amortisation of Income and expenses - financial assets at (351.9) (410.1) amortised cost
Slide 36: Environmental, Social & Governance
Environmental, Social & Governance Pillars for Sustainable Future Key Quarterly Updates ▪ Corporate Office in Jaipur certified LEED Gold Green Planet Nurturing Workplace Create a healthy planet by reducing ▪ 9840 online part disbursals of construction loans Create a healthy & diverse workplace our c
Slide 37: Thank You!
Contact Us Aavas Financiers Limited (Formerly known as Au HOUSING FINANCE LIMITED) CIN: L65922RJ2011PLC034297 Mr. Ghanshyam Gupta investorrelations@aavas.in www.aavas.in Thank You ! Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285 www.sgapl.net 36