Call add by Ms. Sunita Sharma MD and CEO; Key Highlights by Capital Mkt;
During the Q2 FY2015, the Company sanctioned loans of Rs. 8092 crore and disbursed loans of Rs. 7196 crore, a growth of 25% and 21% respectively over the corresponding quarter of the previous year.There has been a loan growth of around 40% in Sep’14 alone as momentum of business continues to remain high and festive season this time will generate better business.
Of the current total loan portfolio, the developer loan book stood at 4%. Loan to developers have grown by about 120% in Q2 FY’15 to about Rs 772 crore. Lots of approval on developer loan book will get disbursed in H2 FY’15.The company was able to recover fully one of its developer NPA and thus about Rs 20 crore of provisions have been reversed. Management also expects recovery of a developer NPA in Q1 FY’16.
The company also has been focusing on LAP and now it constitutes about 3% of total loan book. Thus overall, the NIM will improve given the mix of loan book going towards better margins. Overall management expects NIM to be around 2.35% by March 2015 from around 2.23% as on Sep’14. As per the management, margin recovery is the topmost priority of the company
Along with loan book, lower borrowing costs due to change in borrowing mix will also help the company in better margins. Bank borrowings are around 20% of total borrowing which is well within what management anticipated. There was an additional borrowing of Rs 11000 crore done during the year, of which about Rs 9000 crore from NCD and banks around Rs 1500 crore.CAR of the company stands at around 12.48% for Q2 FY’15.
There was an additional expenditure of about Rs 11 crore on advertisement in H1 FY’15 as this year is silver jubilee year of the company and hence required additional spends.There was an interest income on income tax refund in Sep’13 quarter. Also there was higher interest income from some of the debt investments in Sep’13 quarter. Thus overall other income for Sep’14 quarter was lower.
Overall the demand uptick is there in the industry. People are getting geared up for growth in disbursement. Distribution channel has been increased. Market sentiment is strong for loan growth. The company is able to increase its penetration and market share.There was an additional borrowing of Rs 11000 crore done during the year, of which about Rs 9000 crore from NCD and banks around Rs 1500 crore
Overall for FY’15, management expects Loan growth of around 20% with better margins.