Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — 9M FY20 Earnings Presentation
37 slides from Aavas Financiers's earnings presentation, Jan 24, 2020
Slide 1: Aavas Financiers exchange filing letter
Agvqs FINANCIERS LTD S AP NE AAPKE, SAATH HAMAARA Ref. No. AAVAS/SEC/2019-20/357 Date: January 24,2020 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 - 9M FY20
AAVAS FINANCIERS LIMITED Investor Presentation - 9M 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 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 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 Un
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: 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 12.9 13.4 E ■ Focused approach to directly ■ In-house underwri
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 r Reaffirmed CARE ICRA CRISIL CARE A A -/ A+ / A+ / Dec-19 Dec-19 Dec-19 Dec-19 A1+ Stable Positive Stable Mar-18 A1+ A+ / A/ BBB+ / Mar-17 Mar-16 Aug-12 Stable Stable Stable J V J K 9
Slide 11: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Institutional Shareholders as on 31st December 2019 31st December 2019 Investor Details % Holding Others, 1.2% AU Small Finance Bank 6.40 KEDAARA SBI Mutual FundA 3.56 FII, 18.8% Nomura Asset Management 2.67 Capital Group 2.29 St. James's
Slide 12: Housing Sector - Under-penetrated
Housing Sector - Under-penetrated y Size of Opportunity y Measures from Government and Regulator y Long-term Government Support
Slide 13: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (^ Trn) Market Size ^ 19.2 Trn (as on Jun-19) 16.6 17.0 17.8 18.2 19.1 19-2 YoY Growth +13% 14.2 12.3 (as on Jun-19) Banks -19%, HFCs & NBFCs - 3% 10.4 Market Share Banks - 65% HFCs & NBFCs -35% Mar-15 Mar-16 Mar-17 Mar-18 Jun-18 Sep-18 Dec-1
Slide 14: Measures from Government and Regulator
Measures from Government and Regulator Agvqs Competitive funding for green & affordable housing NHB together with French Development Agency & European Union has announced commitment to expand allocation of resources to finance green & affordable housing projects. Regulatory Regime RBI withdraws cert
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 y/ Key Business Parameters -/ Geographical Distribution Y Spreads and Margins ^ Asset Quality y Liability Franchise */ Key Ratios
Slide 17: Performance Highlights
Performance Highlights AUM (K Mn) Disbursement (K Mn) GNPA (%) 20,682 Average AmountAper Active Loan Account as on Dec-19 ^ 0.84 Mn 9MFY19 9MFY20 Dec-18 Dec-19 PAT* (K Mn) NIM (%) ROA (%) Average AmountAper Disbursed Loan Account in 9MFY20 ^ 0.86 Mn 9MFY19 9MFY20 9MFY19 9MFY20 9MFY19 9MFY20 Data as
Slide 18: Healthy Business Growth
Healthy Business Growth AUM (^ Mn) Disbursements (^ Mn) PAT* (^ Mn) * Data as per IGAAP 17
Slide 19: AUM Break-up
AUM Break-up Agvqs Product Category Occupation Category Customer Category ATS : ^ 0.85 Mn ATS : ^ 0.77 Mn ATS : ^ 0.85 Mn A 31-Dec-18 ATS : ^ 0.88 Mn ATS : ^ 0.86 Mn ATS : ^ 0.68 Mn ATS : ^ 0.86 Mn ATS : ^ 0.83 Mn 31-Dec-19 ATS : ^ 0.91 Mn ATS : ^ 0.82 Mn Retail Corporate Home Loan Other Mortgage Lo
Slide 20: Disbursement Break-up - Product Category
Disbursement Break-up - Product Category 9M FY19 9M FY20 ATS : ^ 0.57 Mn ATS : ^ 0.75 Mn ATS : ^ 0.96 Mn ATS : ^ 1.05 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 88 2012 Maharashtra 42 2012 Gujarat 37 2012 Madhya Pradesh 36 2013 Delhi 5A 2013 Haryana 12** 2017 Chhattisgarh 5 2017 Uttar Pradesh 12 2018 Uttarakhand 8 2018 Total 245 Data as on 31st December 2019 A includes Gurugram & Noi
Slide 22: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings (%) and Spreads —•—Yields (%) • COB (%) Spreads (%) • Yields (%) • COB (%) Spreads (%) 18.13% 13.99% 13.86% 13.88% 13.94% 13.75% 13.85% 13.78% 13.74% •--- -•------- ---- •— ”•-------------•— -----------------------•— ---- • 8.82% 8.74% 8.79% 8.75% 8.68%
Slide 23: Margin and Cost Efficiency
Margin and Cost Efficiency A gvqs 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% 9.37% 9.32% 3.58% 3.64% 4.17% 400% 3.89% 3.81% 2.93% 3.06% 3MFY19 H1FY19 9MFY19
Slide 24: Asset Quality
Asset Quality Gross NPAs (%) Net NPAs (%) 0.54% 0.57% 0.58% 0.58% °-62% 0 .570 % 0.49% 0.46% 0.47% Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Sep-19 Dec-19 1+DPD (%) Segment-wise GNPAs Dec-18 Dec-19 4.90% Jun-18 Sep-18 Dec-18 Mar-18 Jun-19 Sep-19 Dec-19 Home Loan Other Mortgage Loan NPA Data a
Slide 25: Robust Liability Franchise
Robust Liability Franchise Diversified Funding Mix Loan Assets & Borrowings (K Mn) As on Dec-19 As on Dec-19 38 Lenders ■ Terms Loans Floating Fixed Equity Diversified Mix ■ Assignment 71,951 71,951 137 Months Average Borrowing Tenor ■ NHB Refinancing ■ NCDs No exposure to Commercial Papers Incremen
Slide 26: ALM Surplus
ALM Surplus Surplus Management* Mn) Average tenor of outstanding borrowing (months) As on Dec-19 143 137 64 Mar-15 Dec-19 Assets Liabilities Surplus * Data as per IGAAP 25
Slide 27: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (^ Mn ) As on Dec-19 Q4 FY20 Q1FY21 Q2 FY21 Q3 FY21 Q4 FY21 Cash & Cash Equivalents 11,470 Un-availed Sanctions 12,000 Opening Liquidity 23,470 24,534 26,347 28,198 29,487 Add: Principal Repayments & Surplus from Operations 3,121 2,988 3,079 3,033 3,000 Les
Slide 28: Net Securitization Volume
Net Securitization Volume ^ 5,385 Mn ^ 6,802 Mn ^ 5,647 Mn > 4 ---------------------------------------------------------------------------------------► 2,816 2,992 2,579 2,077 995 991 0_____________ Q1 FY18 Q2 FY18 Q3 FY18 Q1 FY20 Q2 FY20 Q3 FY20 27
Slide 29: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (^) 14.7% 13.0% Dec-17 Dec-18 Dec-19 9MFY18 9MFY19 9MFY20 Capital Adequacy Ratio (%) Earning Per Share* (^) Tier I Tier II 67.8% 23.9 57.9% 16.2 31.5% 4.6% Dec-17 Dec-18 Dec-19 9MFY18 9MFY19 9MFY20 Data of Capital Adequacy Ratio is as per IGAAP * Dil
Slide 30: Annexures
Annexures y Quarterly and Nine Monthly Profit & Loss Statement y Balance Sheet y PAT Reconciliation y ECL Provisioning y Networth Reconciliation 29
Slide 31: Quarterly Profit & Loss Statement
Quarterly Profit & Loss Statement Particulars (^ Mn ) Q3 FY20 Q3 FY19 Y-o-Y Q2FY20 Q-o-Q Interest Income (incl. Processing Fee) 2,300.8 1,865.2 2,237.1 Interest Expenses 949.3 628.5 833.5 Net Interest Income 1,351.5 1,236.7 9.3% 1,403.7 -3.7% Non-Interest Income 92.4 82.3 75.2 Non-Interest Expenses
Slide 32: Nine Monthly Profit & Loss Statement
Nine Monthly Profit & Loss Statement Particulars (^ Mn ) 9M FY20 9M FY19 Y-o-Y Interest Income (incl. Processing Fee) 6,443.7 4,874.6 Interest Expenses 2,586.7 1,835.1 Net Interest Income 3,857.0 3,039.5 26.9% Non-Interest Income 237.1 183.4 Non-Interest Expenses 1,646.7 1,358.9 Provisions, Continge
Slide 33: Balance Sheet
Balance Sheet Particulars Mn ) 31-Dec-19 31-Mar-19 Sources of Funds Share Capital 783.0 781.1 Reserves & Surplus 19,572.7 17,588.5 Borrowings 45,587.1 36,532.5 Deferred Tax Liability (Net) 379.6 427.5 Other Liabilities & Provisions 2,008.8 938.7 Total 68,331.1 56,268.3 Application of Funds Loan Asse
Slide 34: PAT Reconciliation
PAT Reconciliation Particulars (^ Mn ) 9M FY20 9M FY19 Y-o-Y Q3 FY20 Q3 FY19 Y-o-Y Net Profit as per IGAAP 1,614.2 1,031.7 56.5% 586.1 411.0 42.6% Add / (Less): Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financial asset
Slide 35: ECL Provisions
ECL Provisions Particulars (^ M n) 31-Dec-19 31-Dec-18 Gross Stage 3 GNPA 323.4 250.6 % portfolio in Stage 3 (GNPA%) 0.57% 0.58% ECL Provision Stage 3 66.5 40.1 Net Stage 3 256.9 210.5 Coverage Ratio % Stage 3 20.57% 16.00% Gross Stage 1 & 2 56,092.0 43,007.3 % portfolio in stage 1 & 2 99.43% 99.42%
Slide 36: Networth Reconciliation
Networth Reconciliation Particulars Mn ) 31-Dec-19 Net worth as per previous GAAP 18,721.4 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.