India Shelter Finance Corporation Limited Q1 FY25 Earnings Conference Call Summary
Key Highlights
• Date of Call: August 8, 2024
• Transcript Availability: Announced on August 13, 2024
• Key Executives:
• Rupinder Singh (MD and CEO)
• Ashish Gupta (CFO)
Financial Performance
• Assets Under Management (AUM):
• Grew 37% year-on-year to Rs. 6,509 crores
• Disbursements:
• Increased by 23%
• Profit After Tax (PAT):
• Rose 77% to Rs. 83.5 crores
• Cost of Funds:
• Stable at 8.8%
Management Guidance
• Branch Expansion:
• Continued focus on growth
• Loan Growth:
• Target AUM growth of 30%-35%
• Credit Costs:
• Management reaffirmed guidance
Key Discussions
• Portfolio Yield:
• Stable at 14.9%
• DA to AUM Ratio:
• Approximately 16%
• Discrepancies in NII Growth:
• Management to review figures
• Incremental Cost of Funds:
• Around 8.9% without NHB funding
Seasonal Trends
• Disbursement Trends:
• Typical seasonal dip noted
• Collection Efficiency:
• Decline attributed to seasonal factors
Branch Expansion and Operating Expenses
• Branch Addition:
• Plan to add 40-42 branches annually
• Operating Expenses (Opex):
• Expected to decrease as branches increase
Government Schemes Impact
• Growth Plans:
• Not factored into growth but could provide a boost
• NHB Refinance Scheme:
• Potential to lower costs without affecting margins
Asset Quality
• 1 DPD Rate:
• Currently around 6%
• Off-Balance Sheet AUM:
• DA constitutes 15.7% of total AUM
• Co-lending accounts for Rs. 52 crores (2.9% of total AUM)
Borrowing Structure
• Borrowing Links:
• 50% linked to MCLR, 35% to external benchmarks, 15% fixed rates
• Variable Rates:
• 25% of total assets at variable rates
Loan Performance
• Gross Non-Performing Assets (GNPA):
• 1.1% overall, with home loans at 0.9% and LAP at 1.3%
• Loan-to-Value (LTV) Ratio:
• Conservative at 45% for LAP
Future Projections
• Leverage:
• Expected to increase from 2.6x to 3.5-4x in two years
• Return on Assets (ROA):
• Projected at 4%
• Return on Equity (ROE):
• Projected at 16%
Conclusion
• Post-Disbursement Monitoring:
• Involves data science team assessing customer risk
• Future Updates:
• Management will share further updates in the future.

India Shelter Finance Corporation Limited Earnings Conference Call Summary
Announcement
• Transcript available for earnings call on May 9, 2024.
• Discussed financial year ending March 31, 2024.
Key Financial Highlights
• Assets Under Management (AUM): Increased by 40% to Rs. 6,084 crores.
• Disbursements: Grew by 35% year-on-year.
• Branch Expansion: Added 40 new branches, totaling 223 across 15 states.
• Total Income: Up 42% year-on-year.
• Net Profit: Rs. 248 crores, a 59% increase.
• Asset Quality: Stable with a 30+ days past due (DPD) rate of 2.4%.
Management Outlook
• Confidence in sustaining growth and profitability.
• Projected branch expansion and loan growth target of around 35%.
Q&A Highlights
• Interest Rates & ECL Provisions: Fixed-rate loans; no changes for existing customers.
• Yield Dynamics: Steady yields through direct sourcing; focus on reducing operational expenses.
• Cost of Funds: Anticipated improvement due to recent rating upgrade.
• Branch Performance: Success measured by disbursements rather than AUM targets.
Operational Insights
• Repayment Rates: Improved by 3% year-on-year.
• NHB Funding: Current ratio at 15%, aiming for 18-20%.
• Affordable Housing Funds: Decreased share in NHB pool from 50-60% to 25-30%.
Innovation and Technology
• Commitment to enhancing operations through technology.
• Focus on equipping field resources for improved efficiency.
Market Trends
• Self-Employed Borrowers: Increased from 65% to 72%, expected to rise further.
• Delinquency Rates: Clarified classification of restructured loans during COVID.
Growth Strategy
• AUM Growth Guidance: Targeting 35% growth, focusing on customer base expansion.
• Branch Expansion Plans: Opening 40-43 branches, primarily in the South.
Loan Products and Financial Projections
• Loan Against Property: Offered through co-lending; home loans managed on their own balance sheet.
• Projected ROA: Steady-state ROA around 4% in 2-3 years; current ROA exceeds 5%.
• Debt-to-Equity Ratio: Currently at 2.5x, potential to reach 5x in the future.
Conclusion
• Management expressed gratitude to participants and promised future updates.

Announcement Details
• Date of Announcement: February 16, 2024
• Earnings Call Date: February 9, 2024
• Focus: Financial results for the quarter ending December 31, 2023
• Key Executives: MD and CEO Rupinder Singh, CFO Ashish Gupta
• IPO Fundraising: Rs. 1,200 crores
Financial Performance Highlights
• Assets Under Management (AUM): Increased by 42% YoY to Rs. 5,609 crores
• Disbursements: Grew by 36%
• Total Income:
• 40% YoY increase
• 4% QoQ increase
• 44% growth for the first nine months
• Net Income:
• 47% YoY increase
• PAT of Rs. 62 crores, up 55% YoY
• Portfolio Yield: Stable at 14.8%
• Cost of Funds: Increased to 8.8%
• Operating Expenses: Grew by 29%, lower than income growth
Strategic Focus
• Target Market: Affordable home loans in Tier 2 and 3 cities
• Customer Base: Significant loans to self-employed individuals and women
• Branch Expansion: Plans to open 42 new branches, focusing on existing states
• Technology-Driven Operations: Emphasis on cost optimization and brand visibility
Loan Products and Yields
• Loan Against Property (LAP):
• 82% for business use
• LTV ratio of 45%-48%
• Blended yield of 14.8%
• Fixed vs. Floating Rates:
• 70% of loans are fixed rate
• 14% of AUM are floating, with plans to increase to 25%
Operational Insights
• Branch Productivity:
• Current disbursement per branch manager: 1.75 to 2
• Target: 9 to 10 disbursements monthly
• Delinquency Rates: Low, with a collection efficiency of 99.3%
• Sales Staff: Over 1,700 employees involved in sales
Future Outlook
• Growth Guidance: Potential growth rate of 30-35%
• Operational Efficiency: Aim to reduce operational expenses by 20-25 basis points annually
• Customer Focus: Continued emphasis on self-employed individuals in the affordable segment
Closing Remarks
• Availability of Transcript: Audio recording and transcript to be available on the company's website
• Next Quarterly Call: Anticipation expressed for future discussions and inquiries from participants