Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — Q1 FY20 Earnings Presentation
35 slides from Aavas Financiers's earnings presentation, Aug 1, 2019
Slide 1: Exchange filing cover letter for investor presentation
A gvqs FINANCIERS LTD Ref. No. AAVAS/SEC/2019-20/155 SA P N E A A P K E , SA A T H H A M A A R A Date: August 01, 2019 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,
Slide 2: Aavas Financiers Limited Investor Presentation – 3M FY20
AAVAS FINANCIERS LIMITED Investor Presentation – 3M 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 National Housing Bank from Jaipur, Rajasthan (“NHB”) Currently being run by professional management team backed by Recognized by NHB for refinance marquee private equity players facility Kedaara Capital and Partners Group Listed on BSE & NSE i
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 Krishan Kant Rathi Sandeep Tandon K. R. Kamath Chairman & Independent Director Independent Director Non-executive Nominee Director Qualifications: Chartered Accountant, Company Qualifications: Bachelor’s degree in Secretary Qualifications: Bachelor’s in Electrical comm
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 • Prio
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 21.1 Risk management Collections sourcing 12.9 13.4 Superior Business Outcome ▪ Focused approach to directl
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 Reaffirmed CARE ICRA CRISIL CARE AA- / A+ / A+ / Jun-19 Jun-19 Jun-19 Jun-19 A1+ Stable Positive Stable Mar-18 A1+ ICRA Jun-19 A1+ A+ / A/ BBB+ / Mar-17 Mar-16 Aug-12 Stable Stable Stable Mar-18 A1+ CARE Ratings Limited upgrad
Slide 11: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Institutional Shareholders as on 30th June 2019 30th June 2019 Investor Details % Holding Others, 2.2% AU Small Finance Bank 6.42 SBI Mutual Fund^ 5.84 ^ FII, 16.6% Nomura Asset Management 2.67 Kedaara Capital, Buena Vista Fund Management
Slide 12: Housing Sector – Under-penetrated
Housing Sector – Under-penetrated Size of Opportunity Measures from Government and Regulator Long-term Government Support
Slide 13: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (₹ Trn) Market Size ₹ 19.1 Trn (as on Mar-19) 16.6 17.0 17.8 18.2 19.1 YoY Growth +15% 14.2 12.3 (as on Mar-19) Banks – 19%, HFCs & NBFCs – 9% 8.8 10.4 Market Share Banks - 64% HFCs & NBFCs - 36% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Jun-18 Sep-
Slide 14: Measures from Government and Regulator
Measures from Government and Regulator NHB tightens applicable norms for HFCs NHB has increased the minimum CAR from 12% at present to 15% & reduced the maximum leverage from 16 at present to 12 in a phased manner by March 2022 Regulation & Supervision of HFCs Regulatory authority over HFCs shifted
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 Key Business Parameters Geographical Distribution Spreads and Margins Asset Quality Liability Franchise Key Ratios
Slide 17: Performance Highlights
Performance Highlights AUM (₹ Mn) Disbursement (₹ Mn) GNPA (%) +46.0% +22.7% 63,623 6,710 Maintained below 1% 43,591 5,469 0.64% 0.58% Average Amount^ per Jun-18 Jun-19 3MFY19 3MFY20 Jun-18 Jun-19 Active Loan Account ₹ 0.85 Mn PAT* (₹ Mn) NIM (%) ROA (%) Maintained -44 bps above 2.5% +49.9% 453 3.17
Slide 18: Healthy Business Growth
Healthy Business Growth AUM (₹ Mn) Disbursements (₹ Mn) PAT (₹ Mn) +53% +53% 63,623 CAGR 6,710 +61% 454 CAGR CAGR 43,591 5,469 290 28,874 3,173 186 1,864 17,898 109 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 3MFY17 3MFY18 3MFY19 3MFY20 3MFY17 3MFY18 3MFY19 3MFY20 Data as per IGAAP 17
Slide 19: AUM Break-up
AUM Break-up Product Category (₹ Mn) Occupation Category (₹ Mn) Customer Category (₹ Mn) 24.2% 0.7% 35.8% 30-Jun-18 64.2% 99.3% 75.8% 25.0% 0.4% 35.1% 30-Jun-19 99.6% 64.9% 75.0% Retail Corporate Home Loan Other Mortgage Loan Self-Employed Salaried 18
Slide 20: Geographical Distribution
Geographical Distribution State Branches Operations Commenced in Rajasthan 78 2012 Maharashtra 39 2012 Gujarat 32 2012 Madhya Pradesh 32 2013 Delhi 4^ 2013 Haryana 11* 2017 Chhattisgarh 5 2017 Uttar Pradesh 5 2018 Uttarakhand 5 2018 Total 211 Data as on 30th June 2019 ^ includes Gurugram & Noida bra
Slide 21: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings (%) and Spreads Yields (%) COB (%) Spreads (%) Yields (%) COB (%) Spreads (%) 18.13% 14.39% 14.23% 13.99% 13.86% 13.88% 13.94% 13.75% 13.85% 16.49% 15.12% 14.72% 13.99% 13.75% 12.28% 11.41% 8.96% 10.48% 8.75% 8.63% 8.74% 8.58% 8.63% 8.82% 8.79% 9.51% 8.6
Slide 22: Margin and Cost Efficiency
Margin and Cost Efficiency 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 6MFY18 9MFY18 FY18 3MFY18 6MFY18 9MFY18 FY18 3MFY18 6MFY18 9MFY18 FY18 8.54% 8.82% 9.39% 9.32% 3.58% 3.64% 4.17% 4.02% 3.92% 3.81% 2.93% 3.06% 3MFY19 6MFY19 9MFY19 FY19
Slide 23: Asset Quality
Asset Quality Gross NPAs (%) Net NPAs (%) 0.82% 0.69% 0.64% 0.54% 0.48% 0.57% 0.58% 0.58% 0.48% 0.49% 0.46% 0.47% 0.39% 0.37% Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 1+DPD (%) Segment-wise GNPAs Jun-18 Jun-19 6.70% 4.77% 4.90% 0.77% 4.25% 0.6
Slide 24: Robust Liability Franchise
Robust Liability Franchise Diversified Funding Mix Loan Assets & Borrowings (₹ Mn) As on Jun-19 As on Jun-19 35 Lenders* Terms Loans Floating Fixed Equity 11% Diversified Mix 18% Assignment 63,623 63,623 43% 143 Months Average Borrowing Tenor NHB Refinancing 28% NCDs No exposure 35,359 33,782 to Com
Slide 25: ALM Surplus
ALM Surplus Surplus Management* (₹ Mn) Average tenor of outstanding borrowing (months) As on Jun-19 6,024 3,629 <3months 2,396 9,022 5,297 <6months 3,725 143 143 135 13,449 6,222 <1year 123 7,227 28,456 <3years 10,642 99 17,814 41,136 <5years 27,168 13,967 64 <7years 51,072 33,197 17,875 <10years 55
Slide 26: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (₹ Mn ) As on Jun-19 Q2 FY20 Q3 FY20 Q4 FY20 Cash & Cash Equivalents 6,250 Un-availed Sanctions 8,540 Opening Liquidity 14,790 16,623 18,478 Add: Principal Repayments & Surplus from Operations 2,862 3,061 3,316 Less: Debt Repayments 1,029 1,207 1,563 Closin
Slide 27: Net Securitization Volume
Net Securitization Volume ₹ 5,385 Mn ₹ 6,802 Mn 2,816 2,992 2,281 1,574 995 1,029 991 500 0 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 26
Slide 28: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (₹) 241.1 9.2% 9.8% 9.7% 180.1 109.8 Jun-17 Jun-18 Jun-19 3MFY18 3MFY19 3MFY20 Capital Adequacy Ratio (%) Earning Per Share* (₹) Tier I Tier II 61.0% 55.3% 5.7 33.6% 4.2 2.5 5.2% 3.3% 0.6% Jun-17 Jun-18 Jun-19 3MFY18 3MFY19 3MFY20 Data of Capital Ade
Slide 29: Annexures
Annexures Quarterly Profit & Loss Statement Balance Sheet PAT Reconciliation ECL Provisioning Networth Reconciliation 28
Slide 30: Quarterly Profit & Loss Statement
Quarterly Profit & Loss Statement Particulars (₹ Mn ) Q1 FY20 Q1 FY19 Y-o-Y Interest Income (incl. Processing Fee) 1,905.7 1,423.7 Interest Expenses 803.9 581.4 Net Interest Income 1,101.8 842.3 30.8% Non-Interest Income 69.5 47.3 Non-Interest Expenses 495.5 438.0 Provisions, Contingencies and Write
Slide 31: Balance Sheet
Balance Sheet Particulars (₹ Mn ) 30-Jun-19 31-Mar-19 Sources of Funds Share Capital 781.1 781.1 Reserves & Surplus 18,050.9 17,588.5 Borrowings 37,625.4 36,532.5 Deferred Tax Liability (Net) 403.2 427.5 Other Liabilities & Provisions 1,363.5 938.7 Total 58,224.1 56,268.3 Application of Funds Loan A
Slide 32: PAT Reconciliation
PAT Reconciliation Particulars (₹ Mn ) Q1 FY20 Q1 FY19 Y-o-Y Net Profit as per IGAAP 453.7 290.0 56.5% Add / (Less) : Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financial assets at 9.0 7.6 amortised cost / net interest
Slide 33: ECL Provisions
ECL Provisions Particulars (₹ Mn ) 30-Jun-19 30-Jun-18 Gross Stage 3 GNPA 299.4 231.0 % portfolio in Stage 3 (GNPA%) 0.58% 0.64% ECL Provision Stage 3 55.2 37.0 Net Stage 3 244.2 194.0 Coverage Ratio % Stage 3 18.43% 16.00% Gross Stage 1 & 2 50,976.9 36,122.5 % portfolio in stage 1 & 2 99.42% 99.36%
Slide 34: Networth Reconciliation
Networth Reconciliation Particulars (₹ Mn ) 30-Jun-19 Net worth as per previous GAAP 17,540.1 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 (190.0) interest on credit i
Slide 35: Thank You! 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 Thank You ! Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285 Ms. Payal Dave / Ms. Neha Shroff payal.dave@sgap