Home First Finance Company India Ltd. · NSE:HOMEFIRST

Home First Finance Company India — Q2 FY23 Earnings Presentation

45 slides from Home First Finance Company India's earnings presentation, October 2022

  1. Slide 1: Investor Presentation Q2 – FY23

    Investor Tech Growth Productivity Presentation Q2 – FY23 Risk Management Funding ESG

  2. Slide 2: Safe Harbor

    Safe Harbor This presentation and the accompanying slides (the "Presentation"), which have been prepared by Home First Finance Company India Ltd. (the "Company"), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe

  3. Slide 3: Executive Summary

    Executive Summary y-o-y q-o-q Assets Under Management (AUM) Disbursement Gross Stage 3 / POS (GNPA %) ₹ 62,754 Mn ₹7,022 Mn (1) 1.9 In line with RBI circular dated 12 Nov 2021 1.1% prior to such classification +35.9% +7.6% +36.3% +6.2% - 20 bps Spread(2) Cost to Income Opex to Assets 5.8% 37.4% 3.1%

  4. Slide 4: HomeFirst – Who We Are?

    HomeFirst – Who We Are? Technology driven affordable housing finance company with pan India presence Home loans to first time home buyers with predominant focus on salaried individuals having income < ₹ 50k p.m 89% of book comprise of housing loans with average ticket size of ₹ 1.09Mn Strong liquidity

  5. Slide 5: Our Journey

    Our Journey AA- ICRA & CARE CARE Rating CARE / ICRA Rating Upgraded Long Term BBB- BBB+ A- A+ AA- Credit Assets Under Management (AUM) Facilities India Rating to ₹ 62,754 Mn Ratings: AA- Stable Assigned Crossed 100 Long Term Physical We got listed Credit Branches Facilities 62,754 As of Sep’22 W arb

  6. Slide 6: Shareholding as on Oct’22

    Shareholding as on 14 Oct’22 PROMOTER & PROMOTER GROUP % Holding` TRUE NORTH FUND V LLP 20.2 TRUE NORTH FUND V LLP AETHER (MAURITIUS) LIMITED (GIC)^ 13.4 13.3% 20.2% KEY INVESTORS % Holding AETHER (MAURITIUS) LIMITED ORANGE CLOVE INVESTMENTS B.V 28.7 (GIC)^ (WARBURG PINCUS) BESSEMER INDIA CAPITAL HO

  7. Slide 7: Distinguished Board of Directors

    Distinguished Board of Directors Deepak Satwalekar Geeta Dutta Goel Anuj Srivastava Sucharita Mukherjee Chairman / Independent / Independent / Independent / Independent / Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Divya Sehgal Maninder Singh Juneja Na

  8. Slide 8: Experienced Management Team

    Experienced Management Team Manoj Viswanathan Ajay Khetan Gaurav Mohta Vilasini Subramaniam MD & CEO Chief Business Officer Chief Marketing Officer Head – Strategic Alliances Nutan Gaba Patwari Ramakrishna Vyamajala Abhijeet Jamkhindikar Chief Financial Officer Chief Human Resource Officer Business Head - M

  9. Slide 9: Meet Our Customers

    Meet Our Customers Formal Salaried Salaried Informal Salaried Self Employed Self Employed Customer 1 Age:44 / Location: KR Puram 71% Customer 2 Age: 32 / Location: Sayan 29% Customer 3 Age: 36 / Location: Avadi (suburbs of Bangalore) (suburbs of Surat) (suburbs of Chennai) Who are they? Teacher with

  10. Slide 10: Our Unique Value Proposition to Our Customers

    Our Unique Value Proposition to Our Customers Who are our customers What do our customers need What challenges do they face Salaried and self-employed Home loan requirement primarily Inability to meet documentation NPS individuals (1) in the ₹0.5 -1.5 mn range requirements of traditional lenders 75%

  11. Slide 11: Distribution Strategy

    Distribution Strategy 0 -4 4-7 7 - 15 Contribution to India's GDP FY’22 ( %) Pan India Distribution driven by strategic market selection & contiguous expansion Existing branches - 101 New branch locations - 47 Digital branches - 101 101 112 13 249 Geographic Expansion Branches Districts States/UT To

  12. Slide 12: Omni Channel Lead Generation Strategy

    Omni Channel Lead Generation Strategy Diversified lead generation channels |Q2 FY23 73.8% Diversified channels for generating leads such as connectors, builder ecosystem, digital, etc. 100% in-house conversion 8.0% by HomeFirst RMs. 3.3% 4.0% 5.0% 0.3% 1.6% 1.9% 2.1% Construction Digital Digital Const

  13. Slide 13: Data Science Backed Centralised Underwriting

    Data Science Backed Centralised Underwriting Risk Management Design Tech-Led Centralised Salaried customers 100+ data points & digitally Consistency in underwriting Loans Approved within 48hrs captured data for all customers Build detailed understanding of customer via field visits by RM API integrat

  14. Slide 14: Scalable Operating Model built on Holistic Technology Usage

    Scalable Operating Model built on Holistic Technology Usage Recent Tech Interventions • E-NACH • E- Sign Home First App for all API Integration with third party Data on Cloud Digital marketing on major stakeholders databases • E- Vault online media o Integrated CRM and loan 360 view of customer for

  15. Slide 15: Digital Adoption

    Digital Adoption % Customers registered on App Unique user logins as % of Customer Rating on Google active customers Playstore 76% 80% 84% 87% 3.9 72% 51% 51% 54% 54% 57% As of 18 Oct’22 Average payment per user on app Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 ₹30,159 For

  16. Slide 16: ESG at HomeFirst

    ESG at HomeFirst Putting sustainability at core of operations

  17. Slide 17: Commitment to ESG

    Commitment to ESG ESG Framework The Company understands An ESG Execution Team the growing importance of with management team ESG and has adopted a participation has been created Board approved ESG Policy to ensure implementation of the ESG Policy Comprehensive Robust Policy & Implementation Governan

  18. Slide 18: Digital Processes from start to finish to reduce Carbon Footprint

    Digital Processes from start to finish to reduce Carbon Footprint Customer App Connector App RM Pro App Green Operations Operational Eco-efficiency & Climate Resilience HomeFirst has a deeply ingrained Ideology of all processes being paperless across the product cycle. Implemented Electronic process

  19. Slide 19: Progress on Social Development

    Progress on Social Development Responsibility towards community Responsibility towards employees Project “Sashakt”, an initiative by HomeFirst to empower the households to uplift these households and bring an all-around Certified as “Great Place To Work” by GPTW improvement in their social, economic

  20. Slide 20: Progress on Social Development

    Progress on Social Development Responsibility towards customers ESG Initiatives conducted during the year Customer Satisfaction • The company published first ever Sustainability Report for the year FY21-22 as part of its Integrated Annual Report. • Customer focus: Playing a key role in Financial inc

  21. Slide 21: Strong Governance Structure

    Strong Governance Structure Work Sustainably & Ethically Governance at core Separate Chairman & Managing Director position Sustainable Finance Corporate Governance We promote Financial Inclusion. • Core competencies of Independent Directors Experienced Board & Management We have customers belonging

  22. Slide 22: Strong Governance Practice

    Strong Governance Practice Top-tier Corporate Governance • High Independent Directors representation in all Board Committees • Highly experience Board & Management Team on Risk Management committee. • Company's risk management framework is driven by its Board and its subcommittees including the Audi

  23. Slide 23: Business Updates

    Business Updates

  24. Slide 24: Healthy Growth in Loan Book and Disbursements

    Healthy Growth in Loan Book and Disbursements Disbursement ( ₹Mn ) Last 4 Years Last 5 Quarters 6,612 7,022 6,411 5,696 All time high disbursement in the quarter, 5,152 q-o-q growth of 6.2% 20,305 15,728 16,183 10,966 FY19 FY20 FY21 FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Assets Under Management ( ₹

  25. Slide 25: Consistent Portfolio Metrics

    Consistent Portfolio Metrics | Sep’22 10% 1% AUM by Occupation AUM by Product 29% Salaried Housing Loan Shop Loans Self Employed LAP Sharp focus on High ratio of 89% 71% housing loans salaried customers 77% 2% 10% AUM by Credit history 8% AUM by Ticket Size 23% Upto 0.5mn Have Credit History AVG: 74

  26. Slide 26: Consistent Spreads

    Consistent Spreads Portfolio Yield Net Interest Spread Movement COB Spread Last 4 Years Last 5 Quarters 12.9% 13.0% 12.8% 12.8% 12.8% 12.8% 12.7% 13.0% 12.3% Competitive Cost of Borrowing 8.8% 8.4% 8.0% 7.2% 7.1% 7.2% 7.2% 6.9% 7.1% FY19 FY20 FY21 FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Incremental

  27. Slide 27: Healthy Leading Indicators

    Healthy Leading Indicators Bounce rate :On the day of EMI presentation Bounce rate Bounce rates normalising COVID COVID WAVE -1 WAVE -2 36.4% 28.3% 20.1% 17.3% 18.3% 16.5% 15.7% 15.6% 14.5% 14.0% 15.1% 10.0% 10.9% 10.5% 9.5% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY2

  28. Slide 28: Healthy Leading Indicators

    Healthy Leading Indicators Collection Efficiency Collection Efficiency (1) Collection efficiency trending back to Unique Customers (2) normal levels 98.5% 98.0% 99.4% 99.4% 97.8% 98.2% 98.4% 98.8% 98.4% 98.5% 97.2% 98.0% 97.9% 97.4% 99.1% 97.6% 96.3% 96.3% 96.4% 96.0% 96.9% 96.6% 96.9% 97.2% 96.9% 97.2% 9

  29. Slide 29: Sound Credit Indicators

    Sound Credit Indicators DPD 1+ / POS DPD 30+ / POS % Stage 3 / POS Stage 2 / POS 5.2% 7.6% 4.7% 6.2% 6.5% 4.1% Improvement 3.7% 1.7% 3.7% 5.3% 5.3% 3.5% 3.3% 5.0% 4.7% continues in 4.4% 1.8% 2.6% 3.2% 2.0% 2.3% 2.3% 2.1% 1+ & 30+ DPD 1.7% 1.9% 3.5% 0.8% 1.0% 2.3% 2.1% 0.9% 0.9% 1.4% 1.4% 1.4% 1.4% M

  30. Slide 30: Diversified funding profile at competitive Cost of Borrowing

    Diversified funding profile at competitive Cost of Borrowing DA & Co-lending NCD Borrowings Mix and Cost of Borrowing trend NHB Refinance NBFC Public Sector Banks Sep'20 Dec'20 Mar'21 Jun'21 Sep'21 Dec'21 Mar'22 Jun'22 Sep'22 Pvt Sector Banks 100% 8.50% COB% 21% 90% 20% 20% 22% 23% 23% (Represents 25

  31. Slide 31: ALM Position as of Sep’22 - Cumulative

    ALM Position as of Sep’22 - Cumulative Inflow Outflow Surplus 4,431 6,697 7,229 12,523 24,468 16,963 (₹Mn) Robust ALM profile ensuring 95,556 sufficient liquidity buffers 81,338 78,593 56,313 56,870 Cumulative Positive flows 43,790 across all the time buckets 26,587 18,143 19,358 11,730 11,446 7,299 0-3mon

  32. Slide 32: Assignment and Co-lending Transactions

    Assignment and Co-lending Transactions Direct Assignment Transactions Co-Lending Transaction ₹3,574 Mn ₹3,003 Mn ₹4,646 Mn ₹1,736 Mn Consistent demand for assignment of the company’s portfolio Generated business from co-lending 1,844 transactions 77 1,491 1,472 166 1,183 1,273 1,159 1,140 1,050 802

  33. Slide 33: Strong Liquidity Position

    Strong Liquidity Position Liquidity Buffer as on Sep’22 (in ₹Mn) Unencumbered Cash and Cash equivalent 6,198 Un-availed Sanction from NHB - Un-availed Sanction from Banks 5,488 Total 11,686 Particulars (in ₹Mn) Q3FY23 Q4FY23 Q1FY24 Q2FY24 ₹ 12,928 million Opening Liquidity 11,686 11,623 12,238 12,078

  34. Slide 34: Financial Updates

    Financial Updates

  35. Slide 35: Financial Highlights

    Financial Highlights Profit After Tax ( ₹Mn ) Net worth ( ₹Mn ) Equity Raised 1508 3281 3450 32 18 8 18 ( ₹Mn ) (1) 1,741 15,737 16,279 16,856 Robust NW to Strong profit growth 13,805 14,627 support growth 1,001 796 (1) 9,334 457 431 512 543 5,227 FY19 FY20 FY21 FY22 Q2FY22 Q1FY23 Q2FY23 FY19 FY20 FY2

  36. Slide 36: ECL Provisions Summary

    ECL Provisions Summary Loan Particulars (in ₹Mn) Stage 1 Stage 2 Stage 3 Commitment Total For period ended Sep’22 Loans – Principal Outstanding 50,259.4 690.4 1,001.1 51,950.9 ECL Provision 153.9 78.1 264.5 12.1 508.5 Net Loans – Principal Outstanding 50,105.5 612.3 736.6 51,442.4 ECL Provision % 0.

  37. Slide 37: Annexures

    Annexures

  38. Slide 38: Quarterly and Annual Profit and Loss Statement

    Quarterly and Annual Profit and Loss Statement Particulars (in ₹Mn) Q2FY23 Q1FY23 Q2FY22 QoQ YoY FY22 FY21 YoY Interest Income on term loans 1,637.2 1,449.9 1,154.4 12.9% 41.8% 4,770.5 4,061.3 17.5% Net gain on DA 93.3 99.0 170.7 678.4 439.3 Income other than interest income on term 508.2 390.9 163.

  39. Slide 39: RoE Tree

    RoE Tree Particulars Q2 FY23 Q1 FY23 Q2 FY22 FY22 FY21 Interest Income on term loans / Average total assets 11.4% 10.9% 10.0% 9.9% 10.2% Net Gain on DA / Average total Assets 0.7% 0.8% 1.5% 1.4% 1.1% Income other than interest income on term loans/ Average total assets 1.1% 1.1% 1.2% 1.1% 1.0% Total

  40. Slide 40: Key Financial Ratios

    Key Financial Ratios Particulars Q2FY23 Q1FY23 Q2FY22 FY22 FY21 Profit after tax on average total assets (ROA) 3.8% 3.9% 3.7%(1) 3.6%(1) 2.5% Leverage (Average total assets / average Equity 3.5 3.3 3.2 3.3 3.5 or average Net worth) Profit after tax on average equity or average Net 13.1% 12.8% 12.0%(

  41. Slide 41: Balance Sheet

    Balance Sheet Particulars (in ₹Mn) Q2FY23 FY22 FY21 ASSETS Cash & cash equivalents and Other bank balance 3,218.4 6,678.5 6,798.7 Loans 51,454.4 43,048.7 33,265.0 Investments 3,396.8 - 3,750.1 Other financial assets 1,177.4 1,150.0 1,011.7 Property, plant and Equipment* 222.8 200.0 164.0 Non-financi

  42. Slide 42: Experienced and Diverse Board

    Experienced and Diverse Board Mr. Deepak Satwalekar Ms. Geeta Dutta Goel Mr. Anuj Srivastava Chairman/ Independent/ Non-Executive Director Independent/ Non-Executive Director Independent/ Non-Executive Director Mr. Deepak Satwalekar was associated with HDFC Limited as a Ms. Geeta Dutta Goel is Count

  43. Slide 43: Thank You

    Thank You For further information, please contact Company Investor Relations Advisors CIN: L65990MH2010PLC240703 Mr Ashish Chovatia Mr. Manish Kayal, Head - Investor Relations +91 9930044680 manish.kayal@homefirstindia.com ashish.chovatia@linkintime.co.in Investor Relations - HomeFirst investor.relat

  44. Slide 44: Glossary

    Glossary Terms Explanation Assets Under Management/Gross Loan Assets represents the aggregate of current principal AUM - Assets Under Management outstanding and overdue principal outstanding, if any, for all loan assets under management which includes loan assets held by the Company as of the last d

  45. Slide 45: Green Space by Homefirst comic

Home First Finance Company India — Q2 FY23 Earnings Presentation on 6ix