Sammaan Capital Ltd · NSE:SAMMAANCAP
Sammaan Capital — Indiabulls Housing Finance — Q1 FY2016 Earnings Presentation
46 slides from Sammaan Capital's earnings presentation, Jul 21, 2015
Slide 1: Indiabulls Housing Finance Limited Q1 FY 2015-16 Results
Indiabulls Housing Finance Limited (CIN: L65922DL2005PLC136029) Unaudited Financial Results – Q1 FY 2015-16 July 21, 2015
Slide 2: Safe Harbour Statement
Safe Harbour Statement This document contains certain forward-looking statements based on current expectations of Indiabulls management. Actual results may vary significantly from the forward-looking statements in this document due to various risks and uncertainties. These risks and uncertainties in
Slide 3: Contents
Contents Pg. No. 1. Business Update 4 2. Operational Update 7 3. Indian Mortgage Market 11 4. Financial and Operational Highlights 20 5. Key Ratios, Valuations and Shareholding 38 6. Detailed Financials 43 3
Slide 4: Business Update
Indiabulls HOME LOANS Business Update
Slide 5: Our Journey
Our Journey 2014-15 Credit Rating upgraded to AAA Cumulative disbursements crosses Rs.1,00,000 Cr. 2013-14 Balance Sheet : Rs. 57,231 Cr. PAT : Rs. 1,901 Cr. RoE : 29% 2012-13 PAT: Rs.1,569 Cr, Balance Sheet : Rs.44,417 Cr RoE : 27% 2011-12 Conversion to HFC India’s 3rd largest H
Slide 6: Key Financial Highlights: Q1 FY15-16
Business Update Key Financial Highlights: Q1 FY15-16 Q1 FY 15-16 Q1 FY 14-15 Growth (%) Loan Assets (Rs. Cr.) 54,021.5 42,014.3 28.6% Total Revenues (Rs. Cr.) 2,024.9 1,589.0 27.4% NII (Rs. Cr.) 821.5 652.4 25.9% PAT (Rs. Cr.) 511.3 423.8 20.6% EPS (Rs.) 14.38 12.68 The company had cash, cash equiva
Slide 7: Operational Update
Indiabulls HOME LOANS Operational Update
Slide 8: Business Summary
Business Summary • Loans Outstanding : Rs. 54,022 Cr (June 30, 2015) : (US$ 8.51 bn) • Loan Book CAGR (6 years) : 26 % • Cumulative Loans given to retail Customers : 6.54 Lacs • Cumulative Loans Disbursed till date : Rs. 111,129 Cr (US$ 17.50 bn) • Cost to Income Ratio (FY 2015) : 16.4% • Profit Aft
Slide 9: Credit Ratings
Credit Ratings Long Term Short Term Rating Rating CARE Ratings AAA A1+ Brickwork Ratings AAA CRISIL (A Standard & Poor’s Company) AA+ A1+ ICRA (An Associate of Moody’s Investor Service) AA+ A1+ India Ratings & Research (A Fitch Group A1+ Company) 9
Slide 10: Country Wide Reach
Country Wide Reach Head office • Presence of core Master Service credit committee Centres (MSC) • All decisions for loans above certain • MSC is a regional predefined limits Branches credit hub and is taken jointly by the manned by senior committee • Walk-in branches with personnel credit decisionin
Slide 11: Indian Mortgage Market
Indiabulls HOME LOANS Indian Mortgage Market 11
Slide 12: Vast Affordable Housing Opportunity
Vast Affordable Housing Opportunity • Urban Housing requirement: estimated at 45 million units by 20221 - Demand continues to increase due to rapid urbanization, growing trend of nuclear families and rising income • Affordable Housing: Policy makers’ focus on Home loans up to 50 Lacs (from sub 28 La
Slide 13: Indian Housing Finance Industry
Indian Housing Finance Industry Headroom for Growth - Low Mortgage Penetration 88% 81% 41% 26% 29% 17% 20% 09% India Thailand China Korea Malaysia Hong Kong USA UK Source: National Housing Bank, 2013 • Lower mortgage penetration compared to advanced and emerging economies implies huge opportunity fo
Slide 14: Indian Mortgage Market
Indian Mortgage Market Growing HFC Market Share in a Steadily Expanding Home Loans Market 22,904 36% 10,285 4,595 33% 2,052 34% 28% FY05 FY10 FY15 FY20F Bank's Share HFC's Share (Amounts in Rs. Bn) Source: RBI Database, NHB Reports & Industry Estimates High demand growth driven by: • Increasing Affo
Slide 15: Recent Government Policy Initiatives
Recent Government Policy Initiatives • Housing for all by 2022: Scheme launched by the government - 20 million new housing units in 500 towns and cities in 7 years - Affordable housing in partnership with the private sector • 100 smart cities plan: Guidelines issued - Outlay of Rs. 1,00,000 Crs over
Slide 16: Tax Incentives – Low Effective Interest Rates
Indian Mortgage Market Tax Incentives – Low Effective Interest Rates Particular 2015 2010 2000 Loan amount 25,00,000 25,00,000 25,00,000 Nominal Interest Rate(%) 9.90% 9.25% 13.25% Deduction allowed on interest repayment* 2,00,000 1,50,000 75,000 Deduction allowed on principal repayment# 1,50,000 1,
Slide 17: Buying a Home – Prudent Financial Investment
Buying a Home – Prudent Financial Investment Rental Yield v/s Home Loan Cost 5.1% 4.7% 3.2% 3.3% 3.5% 3.1% 2.9% 3.1% 2.5% 2.4% Ahemedabad Bengaluru Chennai Delhi Hyderabad Kolkata Mumbai Pune India Rent Yield Effective Interest Rate on Home Loan (5.1%) Source: NHB; Industry reports Increasing Afford
Slide 18: Loan Against Property Market
Loan Against Property Market Secured Loans to Small Businesses Basis of Loan Appraisal Collateral Yields Risk Levels Factory/ office space Lending against components of Inventory 18%+ High business Business receivables Home/ commercial Asset based lending 15% - 18% Moderate property Self-occupied Ca
Slide 19: LAP Growth Opportunity
LAP Growth Opportunity Total finance demand for MSMEs: Rs. 32.6 lakh crs. • LAP loans from HFCs, NBFCs and private banks represent a cost effective and efficient source of finance for SMEs Potential Debt demand : 26 lakh crs. • Additionally professional customer centric delivery has led to LAP loans
Slide 20: Financial and Operational Highlights
Financial and Operational Highlights 20
Slide 21: Balance Sheet Assets
Balance Sheet Assets 4% 16% Loan Book: 80% Cash & Liquid Investments*: 16% Other Assets: 4% 80% Total Assets As at June 30, 2015 Rs. 59,959 Cr. (US$ 9.44 bn) As at June 30, 2014 Rs. 46,359 Cr. (US$ 7.30 bn) * Cash, Cash Equivalents and Investments in Liquid Debt Instruments US $ amounts are converte
Slide 22: Asset Composition
Asset Composition Q1 FY 14-15 Q1 FY 15-16 21% 22% 4% 2% 75% 76% Mortgage Commercial Vehicle Loans Corporate Mortgage Loans • Driven by the growth of the Home loans book, retail mortgage book growth has outpaced the growth of corporate mortgage book growth • Home loans, which forms the majority of in
Slide 23: Loan Book Growth
Loan Book Growth Total Loan Assets (Rs. Cr.) Loans Sold (Rs. Cr.) 54,022 (in preceding 12 months) 6,126 42,014 47,896 3,974 36,874 5,618 3,910 3,028 36,396 32,964 2,582 Jun-13 Jun-14 Jun-15 Jun-13 Jun-14 Jun-15 Ownbook Sell down • Over Rs. 17,500 Cr. of loans sold down to 26 banks and FIs since FY 0
Slide 24: Asset Quality
Asset Quality As at Jun 30, 2015 0.84% 0.85% (in Rs. Cr.) 0.78% NPA (90+ dpd*): 456.9 Provisions for 0.49% 0.49% Contingencies: 627.0 0.44% Of which 0.35% 0.36% 0.34% NPAs: 263.1 Other provisioning: 363.9 Regulatory Provisioning: 417.0 Jun-13 Jun-14 Jun-15 Excess Provisioning Over Regulatory Gross N
Slide 25: Mortgage Loans' Sourcing
Mortgage Loans' Sourcing 82% of Mortgage loans are sourced in-house 18% 11% 71% Direct Sales Team* Branch Walk-ins External Channels • Over 80% of the incremental sourcing is done in-house by on-rolls employees *Direct Sales Team - on rolls sales employees 25
Slide 26: Home Loan Profile: Focus on Affordable Housing
Home Loan Profile: Focus on Affordable Housing Average Loan Size 24 Lacs Maximum Loan to Value 80% Average Loan to Value 71% (at origination) Average Loan Term 15 years Primary Security Mortgage of property financed Repayment Type Monthly amortizing • RBI defines Affordable housing finance as housin
Slide 27: Conservative Loan Against Property Profile
Conservative Loan Against Property Profile Average Loan Size 71 Lacs Maximum Loan to Value 65% Average Loan to Value 49% (at origination) Average Loan Term 7 years Primary Security Mortgage of property financed Repayment Type Monthly amortizing 27
Slide 28: CRISIL LAP Grading Methodology
CRISIL LAP Grading Methodology Detailed assessment of key factors determining credit worthiness Financial Strength Business Management • Interest and debt service cover • Business sector and sectoral prospects • Revenues, margin and profitability • Business duration and track record • Networth and l
Slide 29: Unique Initiative: CRISIL LAP Grading
Unique Initiative: CRISIL LAP Grading Grading Segment Characteristics Total Interest Incremental Outstanding Level of credit Service Loan to Value EBITDA Grading Scale Disbursals* Liabilities/ worthiness Coverage (LTV) Margins Q1 FY16 Total Ratio (ISCR) Networth LAP1 Excellent 13.0% 5.5 – 6.6 1.5 –
Slide 30: Liabilities
Liabilities 4% 10% Share Holder’s Funds: Rs. 6,682 Cr. (US$ 1.05 bn) Borrowings: Rs. 50,863 Cr. (US$ 8.01 bn) Other Liabilities: Rs. 2,414 Cr. (US$ 0.38 bn) 85% Total Liabilities: As of June 30, 2015: Rs. 59,959 Cr. (US$ 9.44 bn) As of June 30, 2014: Rs. 46,359 Cr. (US$ 7.30 bn) US $ amounts are con
Slide 31: Diversified Borrowing Programme
Diversified Borrowing Programme 3% 8% 8% 7% 31% 32% 35% ECB Commercial Paper Bonds 61% 60% 55% Bank Loans Jun-13 Jun-14 Jun-15 Total Borrowings: As of June 30, 2015: Rs. 50,863 Cr. (US$ 8.01 bn) As of June 30, 2014: Rs. 37,864 Cr. (US$ 5.96 bn) US $ amounts are converted based on the exchange rate o
Slide 32: Diversified Borrowing Programme
Diversified Borrowing Programme Borrowings (Rs. Cr.) 50,863 8.5 50,000 37,864 7.5 40,000 33,372 Borrowings 6.3 6.5 30,000 5.6 5.5 5.1 4.5 Net Gearing 20,000 3.5 10,000 2.5 Net Gearing: Borrowings Net of ‘Cash & Cash Equivalents’ and ‘Investments in Liquid - 1.5 Debt Instruments’ Jun-13 Jun-14 Jun-15
Slide 33: Optimally Matched Balance Sheet
Optimally Matched Balance Sheet Maturity Profile (As of March 31, 2015) 27,895 26,883 17,800* 17,366 12,901 11,455 Up to 1 yr 1 - 5 yrs Over 5 yrs Assets Liabilities (Amounts in Rs. Cr.) • * Assets in the ‘Up to 1 Yr’ bucket includes Rs. 9,631.2 Cr. (as of March 31, 2015) of Cash, Cash equivalents a
Slide 34: Business Value Proposition
Business Value Proposition Growing economy/ low mortgage Focus on affordable housing. Young staff: better connect with penetration, increasing market Nationwide network with increasingly younger home buyer share expanding footprint Leading player in self-employed Technology leveraged scalable Health
Slide 35: Eminent and Experienced Board of Directors
Eminent and Experienced Board of Directors Board of Directors with pre-eminence and experience in diverse fields • Mr. Sameer Gehlaut : Chairman of the Board • Mr. Gagan Banga : Vice Chairman and MD • Dr. K.C. Chakrabarty : Former Deputy Governor of the Reserve Bank of India • Justice Surinder Singh
Slide 36: Indiabulls Foundation: Corporate Social Responsibility
Indiabulls Foundation: Corporate Social Responsibility Free medical clinics to provide primary and preventive health care to the underprivileged Swasthya Kalyan Vahika™vehicles: 7 Mobile medical vans provide free primary Health healthcare services to nearly 2,00,000 patients every year Cleft deformi
Slide 37: Indiabulls Foundation: Corporate Social Responsibility
Indiabulls Foundation: Corporate Social Responsibility Support to ladies self-help groups to make its Paushtik Aahar (nutritional Sustainable supplements) and provide sustainable employment options for the Livelihoods underprivileged Tie-up with MKCL (Maharashtra Knowledge Corporation Ltd.) authoriz
Slide 38: Key Ratios, Valuations and Shareholding
Key Ratios, Valuations and Shareholding 38
Slide 39: Rising Productivity Ratios
Rising Productivity Ratios FY 2015 FY 2014 FY 2013 FY 2012 No. of Employees 4,840 4,099 4,072 4,243 Profit per employee (Rs. Cr.) 0.39 0.38 0.31 0.24 Asset per employee (Rs. Cr.) 11.82 10.84 8.09 5.85 Cost Income Ratio 16.4% 17.1% 18.0% 18.7% 39
Slide 40: Rising Productivity Ratios
Rising Productivity Ratios FY 2015 FY 2014 FY 2013 FY 2012 Pre Tax RoAA (%) 4.9% 4.8% 4.9% 4.9% Post Tax RoAA (%) 3.7% 3.8% 3.8% 3.7% RoE (%) 29% 27% 26% 22% Capital Adequacy (%) 18.36% 19.14% 18.47% 18.86% - Tier I 15.25% 15.05% 14.96% 18.21% - Tier II 3.11% 4.09% 3.51% 0.65% 40
Slide 41: Valuations and Returns
Valuations and Returns Mar-15 Mar-14 Mar-13 Mar-12 Market Price per share (Rs.) 557.9 285.6 271.8 207.1 Market Capitalisation (US$ Bn) 3.12 1.50 1.34 1.02 PE Ratio (times) 10.2 6.0 6.8 6.5 Book Value per share (Rs.) 184.5 168.7 165.4 157.7 Price to Book Ratio (times) 3.0 1.7 1.6 1.3 Dividend per sha
Slide 42: Shareholding Pattern
Shareholding Pattern 16.7% 27.8% 3.1% 52.4% Promoters Foreign Shareholding MFs/Banks/IFI Public MF: Mutual Funds IFI: Indian Financial Institutions As on 3rd July, 2015 42
Slide 43: Detailed Financials
Indiabulls HOME LOANS Detailed Financials 43
Slide 44: Consolidated Balance Sheet
Consolidated Balance Sheet Rs. 9,552 Cr. of Cash & Cash Equivalents and Investments in Liquid Debt Instruments 44
Slide 45: Consolidated Income Statement
Consolidated Income Statement 45
Slide 46: Thank you
Indiabulls HOME LOANS Thank you
Indiabulls Housing Finance — Q1 FY2016 Earnings Presentation on 6ix