Aavas Financiers Ltd. · NSE:AAVAS
Aavas Financiers — H1 FY24 Earnings Presentation
38 slides from Aavas Financiers's earnings presentation, Oct 26, 2023
Slide 1: Revised Investor Presentation filing letter to exchanges
Ref. No. AAVAS/SEC/2023-24/688 Date: October 26, 2023 To, To, The National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Mumbai – 400051 Mumbai – 400001 Scrip Code: 541988 Scrip Symbol: AAVAS Dear Sir/Madam, S
Slide 2: Investor Presentation – H1 FY24
AAVAS FINANCIERS LIMITED Investor Presentation – H1 FY24
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Aavas Financiers Ltd. (the “Company”), without any specific objectives and solely for information purposes and do not constitute directly or indirectly any advertisement, advise, offer, recomm
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 Professional Management Team Experienced Board of Directors In-house Execution Model Technology and Data Analytics Improving Credit Ratings Diversified Shareholding Base
Slide 6: Aavas 3.0: Building a lasting institution
Aavas 3.0: Building a lasting institution Aavas 1.0 Aavas 2.0 Aavas 3.0 2012 2016 2023 AUM (INR Bn) Investment (2016) by: IPO (October 2018) 94.5 113.5 141.7 40.7 59.4 78.0 0.0 1.8 4.1 8.4 16.8 26.9 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY28E # of 25 35 42 44 94 165 210 250 280
Slide 7: Strong Management Depth continues to drive Aavas's Outperformance
Strong Management Depth continues to drive Aavas's Outperformance Sachinder Bhinder Ghanshyam Rawat Ashutosh Atre Managing Director & Chief Executive Officer President & Chief Financial Officer President & Chief Risk Officer • 25+ years of experience • 30+ years of experience in financial • 30+ year
Slide 8: Experienced Board has guided Aavas's journey since inception
Experienced Board has guided Aavas's journey since inception 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 Committ
Slide 9: 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 13.4 13.1 sourcing 10.6 10.0 11.0 Superior Business Outcome Focused approach
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 Transform loan origination & customer service 1 2 3 processes leveraging Salesforce platform to achieve 10x scale Enable seamless collaboration & information s
Slide 11: State-of-the art technology implementation enabling digital & analytical capabilities
State-of-the art technology implementation enabling digital & analytical capabilities LOS LMS Enterprise GL A New digital loan origination Adopting a next-gen cloud ERP system platform (LOS) and customer service Adopting a new loan management for back-office process automations to system to enable b
Slide 12: Improving Credit Ratings
Improving Credit Ratings Long-Term Credit Rating Short-Term Credit Rating Reaffirmed ICRA CARE ICRA Sep-23 A1+ AA / AA / Sep-23 Sep-23 Stable Stable CARE Sep-23 A1+ A/ A+ / INDIA RATINGS Mar-16 Mar-17 Stable Stable Sep-23 A1+ 11
Slide 13: Diversified Shareholding Base
Diversified Shareholding Base Shareholding Pattern as on Top Institutional Shareholders as on 30th Sept 2023 30th Sept 2023 Investor Details % Holding Others, 8.91% Kedaara Capital^ 23.60 Partners Group^ 16.13 Stewart Investors^ 6.10 Wasatch Global Investors^ 6.03 Kedaara Capital, UTI Asset Manageme
Slide 14: Size of Opportunity
Size of Opportunity Indian Housing Finance Housing Market (₹ Trn) Market Size 29.8 (as on Mar-23) ₹ 29.8 Trn 22.9 26.0 20.7 18.4 15.8 13.4 YoY Growth 14% - 15% (as on Mar-23) Market Share SCBs - 68% HFCs - 32% Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 (as on Mar-23) Mortgage Penetration (%) A
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 (%) +22.1% 3.9% -06 bps 153,195 22,404 Indicates upto 90 DPD 125,437 23,267 1.10% 1.04% assets but categorized as 0.13% GNPA/Gross Stage 3 on 0.17% account of RBI notification 0.93% 0.91% Sep-22 Sep-23 H1FY23 H1FY24 Sep-22 Sep-23 PA
Slide 17: Healthy Business Growth
Healthy Business Growth AUM (₹ Mn) Disbursements (₹ Mn) PAT* (₹ Mn) +28% 141,667 CAGR +20% 113,502 CAGR +36% 50,245 CAGR 4,283 94,543 3,575 77,961 36,022 2,903 59,416 29,304 2,491 26,724 26,569 40,730 20,512 1,761 932 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19
Slide 18: AUM Break-up
AUM Break-up Product Category Occupation Category Customer Category ATS : ₹ 0.87 Mn ATS : ₹ 0.73 Mn ATS : ₹ 0.90 Mn 29.1% 0.1% 39.8% ATS : ₹ 6.87 Mn 30-Sep-22 60.2% 99.9% 70.9% ATS : ₹ 0.94 Mn ATS : ₹ 0.85 Mn ATS : ₹ 0.74 Mn ATS : ₹ 0.94 Mn ATS : ₹ 0.90 Mn 0.4% 30.3% 40.1% ATS : ₹ 7.80 Mn 30-Sep-23
Slide 19: Disbursement Break-up – Product Category
Disbursement Break-up – Product Category H1FY23 H1FY24 ATS : ₹ 0.80 Mn ATS : ₹ 0.84 Mn 34.7% 33.1% 65.3% 66.9% ATS : ₹ 1.10 Mn ATS : ₹ 1.31 Mn Disbursement include 13.8% of mortgaged-backed MSME Loans Disbursement include 12.6% of mortgage-backed MSME Loans classified under Other Mortgage Loans clas
Slide 20: Geographical Distribution
Geographical Distribution State Branches Operations Commenced in Rajasthan 102 2012 Maharashtra 48 2012 Gujarat 44 2012 Madhya Pradesh 49 2013 Delhi 5 2013 Haryana & Punjab 20 2017 Chhattisgarh 9 2017 Uttar Pradesh 30 2018 Uttarakhand 9 2018 Himachal Pradesh 4 2020 Orissa 6 2021 Karnataka 24 2021 To
Slide 21: Consistent Spreads
Consistent Spreads Yields, Cost of Borrowings and Spreads (%) Yields (%) COB (%) Spreads (%) Yields (%) COB (%) Spreads (%) 13.04% 13.12% 13.26% 13.15% 12.79% 12.65% 12.67% 12.85% 15.12% 14.72% 13.99% 13.75% 13.63% 13.16% 13.12% 12.65% 10.48% 9.51% 7.61% 7.66% 7.86% 8.74% 7.03% 7.29% 8.63% 8.44% 6.8
Slide 22: Margin and Cost Efficiency
Margin and Cost Efficiency OpEx (%) NIM (%) ROA (%) 7.80% 8.11% 8.23% 3.25% 3.37% 3.58% 6.93% 2.64% 2.88% 3.21% 3.34% 3.45% 3MFY22 H1FY22 9MFY22 FY22 3MFY22 H1FY22 9MFY22 FY22 3MFY22 H1FY22 9MFY22 FY22 8.17% 8.23% 8.28% 7.67% 3.42% 3.43% 3.51% 3.17% 3.56% 3.71% 3.75% 3.68% 3MFY23 H1FY23 9MFY23 FY23
Slide 23: Asset Quality
Asset Quality Gross Stage 3 (%) Net Stage 3 (%) DPD upto 90 DPD above 90 DPD upto 90 DPD above 90 0.99% 1.08% 1.10% 1.13% 1.00% 1.04% 0.92% 0.13% 0.84% 0.84% 0.87% 0.76% 0.19% 0.13% 0.77% 0.68% 0.73% 0.26% 0.17% 0.11% 0.10% 0.13% 0.14% 0.10% 0.31% 0.21% 0.08% 0.24% 0.82% 0.93% 0.94% 0.81% 0.87% 0.91
Slide 24: Robust Liability Management
Robust Liability Management Diversified Funding Mix Loan Assets & Borrowings (₹ Mn) As on Sep-23 34 Lenders As on Sep-23 Diversified Mix Terms Loans Floating Fixed Equity 11.4% No exposure to Commercial Papers 18.3% Assignment 153,195 153,195 49.6% Incremental H1 FY24 Borrowings - NHB Refinancing ₹
Slide 25: ALM Surplus
ALM Surplus Surplus Management* (₹ Mn) Average tenor of outstanding borrowing (months) As on Sep-23 19,687 <3months 14,399 5,288 30,585 <6months 21,266 9,319 143 40,998 134 <1year 18,807 130 130 22,191 126 128 78,767 <3years 59,316 19,451 109,280 <5years 89,565 19,715 132,692 <7years 103,872 28,820
Slide 26: Comfortable Liquidity Position
Comfortable Liquidity Position Particulars (₹ Mn) As on Sep-23 Cash & Cash Equivalents 19,887 High-Quality Liquidity of Un-availed CC Limits 1,100 ₹ 30,987 Mn Documented & Un-availed Sanctions from NHB 10,000 Documented & Un-availed Sanctions from other Banks 19,050 Total Liquidity Position 50,037 P
Slide 27: Net Securitization Volume
Net Securitization Volume ₹ 7,784 Mn ₹ 9,541 Mn ₹ 5,285 Mn 3,054 3,284 2,981 2,967 2,916 2,234 2,001 1,749 1,424 0 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 26
Slide 28: Key Financial Ratios
Key Financial Ratios ROE (%) Book Value Per Share (₹) 13.64% 444.1 13.44% 383.6 12.25% 325.7 Sep-21 Sep-22 Sep-23 H1FY22 H1FY23 H1FY24 Capital Adequacy Ratio (%) Earning Per Share* (₹) Tier I Tier II 29.2 51.00% 49.73% 47.95% 24.8 19.2 1.14% 0.63% 0.21% Sep-21 Sep-22 Sep-23 H1FY22 H1FY23 H1FY24 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 FY24 Q2 FY23 Y-o-Y Q1 FY24 Q-o-Q Interest Income on Loans (incl. Processing Fee) 4,222.4 3,357.9 25.7% 4,129.4 2.3% Interest Income on Fixed Deposits 370.8 197.6 297.7 Reversal Income on Earlier Assigned Loans (334.5) (268.8) (299.0) Upfrontin
Slide 31: Half Yearly Profit & Loss Statement
Half Yearly Profit & Loss Statement Particulars (₹ Mn ) H1 FY24 H1 FY23 Y-o-Y Interest Income on Loans (incl. Processing Fee) 8,351.8 6,557.7 27.4% Interest Income on Fixed Deposits 668.6 394.2 Reversal Income on Earlier Assigned Loans (633.5) (516.7) Upfronting Income on Fresh Assigned Loans 796.7
Slide 32: Balance Sheet
Balance Sheet Particulars (₹ Mn ) 30-Sept-23 31-Mar-23 Sources of Funds Share Capital 791 791 Reserves & Surplus 34,344 31,906 Borrowings 1,11,996 98,873 Deferred Tax Liability (Net) 540 502 Other Liabilities & Provisions 2,705 2,034 Total 1,50,376 1,34,105 Application of Funds Loan Assets 1,24,026
Slide 33: PAT Reconciliation
PAT Reconciliation Particulars (₹ Mn ) H1 FY24 H1 FY23 Y-o-Y Q2 FY24 Q2 FY23 Y-o-Y Net Profit as per IGAAP 2,174.3 1,799.4 20.8% 1,099.9 915.8 20.1% Add / (Less) : Adjustments as per IndAS on account of: Adoption of effective interest rate (EIR) for amortisation of Income and expenses - financial as
Slide 34: ECL Provisions
ECL Provisions Particulars (₹ Mn ) 30-Sep-23 30-Sep-22 31-Mar-23 Gross Stage 1 1,21,432.8 97,945.8 1,12,318.4 During FY22, a resolution plan was implemented for certain % portfolio in Stage 1 97.28% 96.53% 97.26% borrower accounts as per RBI’s Resolution Framework 2.0 ECL Provision Stage 1 279.6 220
Slide 35: Networth Reconciliation
Networth Reconciliation Particulars (₹ Mn ) 30-Sep-23 31-Mar-23 Net worth as per previous GAAP 32,385.6 30,177.4 Adjustments increasing/(decreasing) net worth as reported under previous GAAP: Adoption of EIR for amortisation of Income and expenses - financial assets at (230.6) (217.9) amortised cost
Slide 36: Environmental, Social & Governance
Environmental, Social & Governance Pillars Pillars for for Sustainable Sustainable Future Future Key Quarterly Updates Green housing program with IFC: Green Planet Nurturing Workplace Create a healthy planet by reducing our Create a healthy & diverse workplace where Capacity building workshops on
Slide 37: Environmental, Social & Governance
Environmental, Social & Governance Key Quarterly Updates Stakeholder Engagement Initiatives: Silver partners in the Annual Directors Conclave, a Flagship event of the Institute of Directors (IOD) on the theme “Emerging Trends in Corporate Governance and Building Futuristic Boards- 2030” on 10th Au
Slide 38: Thank You !
Contact Us Aavas Financiers Limited CIN: L65922RJ2011PLC034297 Mr. Ghanshyam Gupta investorrelations@aavas.in www.aavas.in Thank You ! Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285 www.sgapl.net 37