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Earnings Overview • Date of Call: July 25, 2024 • Q1 FY25 Performance: • Profit After Tax (PAT): ₹433 crores (25% YoY growth) • Retail disbursements: ₹4,363 crores (19% YoY growth) • Retail loan asset book: ₹65,157 crores (14.4% YoY growth) • Net Interest Margin (NIM): 3.65% • Cost of borrowing: 7.92%
Strategic Focus • Target Segments: • Affordable and Emerging segments: 33% of retail disbursements • Plans to expand branch network in tier 2 and tier 3 cities • Credit Rating: Upgraded to AA+ by CRISIL
Business Growth • Roshni Affordable Housing: • Loan book growth: Over ₹2,300 crores (5x YoY increase) • Disbursements: 157% increase • Technology Initiatives: • New Salesforce-based loan origination platform operational in 135 branches
Credit and Collections • Loan Logins: 33% growth • Underwriting: Over 80% of applications with CIBIL score above 700 • Collections Management: Successful recovery from written-off accounts
Technology Transformation • Initiatives: • Cloud-based CRM platform • Revamped website and digital collection platform • Impact on Operations: • 16-17% reduction in turnaround time (TAT) for loan processing
Future Outlook • Growth Projections: • Retail book growth guidance: 17% • Anticipated 25% growth in retail disbursements • Branch Expansion: Plans to open 40 more branches, totaling 200 by year-end
Challenges and Responses • Net Interest Margins: Anticipated stabilization and improvement in yields • Operating Expenses: Opex ratio maintained around 1% despite branch expansion • Credit Underwriting: Differentiated approach for various segments
Conclusion • Overall Sentiment: Optimistic about growth in the affordable housing sector, with strategic plans for expansion and improved operational efficiency.
Event Overview • Date: May 22, 2024 • Compliance: Transcript submitted to BSE and NSE • Key Personnel: MD & CEO, CFO, department heads • Introduction of company anthem reflecting values
Strategic Direction • Transition from high growth to consolidation • Focus on balanced and profitable growth • Launch of Affordable Business segment "Roshni" with rapid expansion
Financial Performance • GNPA decreased from 8.13% to 1.5% • Loan book growth from INR 58,000 crore to INR 65,500 crore • Retail loans now 97% of the portfolio • Targeting a steady-state ROE of 15%
Growth Strategy • Focus on retail franchise and tailored strategies for: • Prime • Emerging • Affordable markets • Shift from Super Prime to Emerging and Affordable segments for higher yields
Affordable Housing Focus • Targeting Tier-2 and Tier-3 cities for higher yields • Significant growth in disbursements in Affordable Housing • Plans to enhance collection efficiency and reduce GNPA further
Construction Finance Strategy • Targeting select builders with ticket sizes of INR 100-200 crores • Cautious approach to corporate growth, maintaining corporate exposure under 10%
Technological Investments • Enhancements in loan lifecycle processes through technology and automation • Development of analytics-driven scorecards for customer retention • Implementation of a WhatsApp-based chatbot for service requests
Emerging Markets Strategy • Projecting 40% of disbursements from emerging markets over the next three years • Restructuring operating model and enhancing risk governance • Investment in technology for improved customer engagement and underwriting
Underwriting and Collections • Standardized credit processing with a rule engine • Focus on smaller ticket sizes and low NPA rates • Strategic efforts in collections leading to high resolution rates
Technology Strategy • Emphasis on scalability, performance, and user-friendly technology • Development of a comprehensive platform for distribution team • Reduction in manual data entry and improved operational efficiency
Conclusion • PNB Housing Finance is positioned for growth in high-yield segments while maintaining asset quality and enhancing technological capabilities.
Summary of PNB Housing Finance Conference Call
Strategy for Profitability • Focus on enhancing profitability through improved yield and reduced borrowing costs • Emphasis on maintaining a diversified borrowing profile • Reduction of excess liquidity from 8% to 3.5%-4% • Stable borrowing costs despite industry increases, aided by NHB borrowings • Projected 15-20 basis points reduction in future borrowing costs due to rating upgrade
Asset-Liability Management • Balanced asset-liability profile with healthy key ratios • Expected improvement in ROA from 2.1%-2.2% to 2.5%-2.6% in three years • Shift towards retail lending highlighted
Growth and Compliance Goals • Aim for 17% growth in the loan book over three years • Disbursement growth projected at 23%-25% • Target to reduce GNPA from 1.5% to 1%-1.1% by year-end • Continued investments in IT and digitization
Affordable Housing Segment • Ambitious goal to increase affordable housing share to 14-16% of a projected INR 1 lakh crore loan book • Plans to expand branch network from 160 to 200 • Focus on informal salaried customers and potential increases in operational expenses and credit costs
Operational Efficiency • Unique business model utilizing shared resources to maintain lower operational expenses (OPEX) • Projected OPEX around 95 to 100 basis points • Blended credit cost projected between 30 to 32 basis points
Decentralization and Risk Management • Decentralized loan sanctioning with gradual empowerment of branch credit managers • Focus on risk-based pricing and careful selection of loan types and ticket sizes • Acknowledgment of challenges in maintaining margins in a monoline business
Long-term Margin Guidance • Long-term steady-state margin guidance of 3.5% • Cautious re-entry into the corporate market, aiming to keep corporate segment under 10% of the overall portfolio
Market Penetration Strategy • Emphasis on growth potential in affordable housing in Tier-3 and Tier-4 cities • Plans to open over 500 branches in 150 conducive districts, focusing on semi-urban areas • All loans are floating rate, with interest rate changes passed on to customers
Human Capital Development • Low attrition rates and ongoing investments in employee development • Training and integration programs for employees in the affordable segment to maintain company culture
Conclusion • The call concluded with an invitation for further inquiries and a break for refreshments.
Earnings Call Overview • Date: May 1, 2024 • Focus: Q4 and fiscal year results ending March 31, 2024 • Key Participants: MD & CEO Girish Kousgi, CFO Vinay Gupta
Financial Performance Highlights • Retail Loan Growth: • 14% year-on-year growth, highest in five years • Retail constitutes 97% of the portfolio • Affordable Business grew to Rs.1,790 crores • Overall Loan Book: • Grew by 10.3% year-on-year • Retail disbursements reached Rs.5,541 crores in Q4 • Geographical Distribution: • North: 35.3%, South: 37.5%, West: 27%
Asset Quality Improvements • Non-Performing Assets: • GNPA decreased by 57% to INR 984 crore • Net NPA at 0.95% • Corporate Loan Book: • 46% reduction • No principal losses from 268 properties auctioned
Profitability Metrics • Profit After Tax (PAT): • Increased by 44% to INR 1,508 crore • Return on Assets (ROA): • 2.2% • Future Projections: • Anticipated margin of around 3.5% • Credit cost of 30 basis points for FY’25
Strategic Focus • Segment Growth: • Targeting 40-42% contribution from Affordable and Emerging segments in FY’25 • Corporate Book Growth: • Expected to grow in the second half of the year
Operational Insights • Branch Openings: • New branches primarily in the affordable segment • Operating Expenses: • Slight increase expected, but anticipated to align with business contributions • Cost of Funds: • Margin compression expected, but performance improvements may mitigate impacts
Management's Outlook • Future Growth: • Optimistic about profitability driven by strategic shifts • Employee Costs: • Disparity compared to competitors explained by focus on emerging markets • Growth Guidance for FY’25: • Set at 17%
Challenges and Considerations • Margin Concerns: • Anticipated 15 basis points drop in NIMs due to increased borrowing costs • Operational Expenses: • Slightly higher for Affordable segment, but manageable due to shared resources • Credit Cost Outlook: • Recoveries from write-offs expected to improve outlook
Conclusion • Management emphasized the importance of maintaining asset quality while pursuing profitable growth through strategic shifts in lending segments.
Earnings Call Overview • Date: January 24, 2024 • Focus: Unaudited financial results for Q3 and nine months ending December 31, 2023 • Key Participants: MD & CEO Girish Kousgi, CFO Vinay Gupta
Financial Highlights • Retail Book Growth: • Year-to-date growth of 13.2% • Projected growth of 15% for the year • Disbursement Growth: • Expected increase of 22% compared to the previous year • Profit After Tax (PAT): • Reported at INR 338 crores for Q3, a 26% year-on-year increase • Net Interest Income: • Decreased by 19% year-on-year, but grew by 7% over nine months • Yield and Borrowing Costs: • Yield at 10.2%, cost of borrowing at 8.07% • Expected improvement in spreads and yields
Strategic Focus • Retail Segment: • 96.5% of portfolio in retail • Plans to expand branch network • Cash Collections and Auctions: • Record number of auctions in Q3, with improved collection efficiency • NPA Recovery: • Anticipation of resolving significant NPA accounts in Q4
Management Insights • Credit Cost Guidance: • Remains at 60 bps for the year, with a potential reduction to 31-32 bps • Growth Strategy: • Balancing growth with profitability, targeting 17% growth in retail loan book for FY25 • Asset Quality: • Improved asset quality with a focus on three retail verticals: prime, emerging, and Roshni
Market Challenges • Disbursement Decline: • Attributed to internal challenges and external factors • Interest Income and Costs: • Affected by changes in MCLR and external borrowings
Future Outlook • Write-Backs: • Anticipated write-backs of approximately INR 1,700 crores in corporate and over INR 500 crores in retail • Return on Assets (ROA): • Expected to exceed 2% • Capital Adequacy: • Strong ratio of 29.53%, no immediate need for additional equity raising
Conclusion • The company is navigating a transitional phase while aiming for sustainable growth and profitability, with a focus on enhancing its retail operations and managing costs effectively.
Earnings Call Overview • Date: October 30, 2023 • Transcript submitted to BSE and NSE • Management speakers: MD & CEO Girish Kousgi, CFO Vinay Gupta • Focus: Un-audited financial results for Q2 and half-year ending September 30, 2023
Key Financial Highlights • Retail Disbursements: • 18% year-on-year growth, totaling INR 4,165 crores • Affordable segment contributed 9% with INR 374 crores • Loan Book Growth: • Overall growth of 5.2% year-on-year to INR 60,852 crores • Corporate book declined by 58% due to NPA resolution focus • Asset Quality: • GNPA improved to 1.78% from 6.06% year-on-year • Targeted loan book growth of 17-18% for the year
Profit and Revenue • Profit After Tax (PAT): • Increased by 46% year-on-year to INR 383 crores • Revenue Growth: • 6% year-on-year increase • Net Interest Margin (NIM): • Improved to 3.95% • Operating Expenses: • Increased due to investments in affordable housing
Strategic Focus • Corporate Lending: • Plans to restart with a focus on construction finance • Geographical Shift: • Increased contributions from southern states • Channel Partners: • 14,000 partners for retail loans, balanced sourcing mix
Return on Equity (ROE) and Credit Costs • ROE Projection: • Expected increase to 17%-18% as leverage rises • Credit Costs: • Projected stable operating expense ratio and credit cost of 40 bps
Market Insights • Cost of Funds: • Stable for NCDs, no significant refinancing impact • Borrowing Costs: • Current costs similar or slightly lower than previous years • Yields: • Incremental yields of 9.6% to 9.7% after repo rate increases
Future Outlook • Disbursement Growth Target: • Confident in achieving 22% year-on-year growth • Construction Finance: • Targeting less than 10% of overall loan mix • Retail Loan Growth: • Anticipated stronger performance in the second half of the year
Conclusion • Management expressed optimism about retail loan growth while corporate growth remains on hold. The call concluded with an invitation for further inquiries.
Announcement Details • Date of Call: July 24, 2023 • Financial Results: Un-audited results for the quarter ending June 30, 2023 • Participants: MD & CEO Girish Kousgi, CFO Vinay Gupta • Regulatory Compliance: Communication sent to BSE and NSE • Transcript Availability: Accessible on the company's website
Financial Highlights • Rights Issue: Raised Rs. 2,494 crores with a subscription rate of 1.21 times • Retail Disbursements: 8% year-on-year growth; 66% increase in affordable segment • Loan Book Growth: 5% year-on-year, reaching Rs. 60,395 crores • Asset Quality: Improved GNPA ratio; credit cost at 0.36% • Financial Performance: • Revenue: 21% growth • Net Interest Income: 70% growth • Profit After Tax: 48% growth • Outlook: Positive demand anticipated, especially in affordable housing
Management Insights • NIM Sustainability: Aim to align retail GNPA with industry standards in 4-5 quarters • Gearing and ROE Targets: Gearing of 6-6.5 times; ROE of 16-17% in 2.5-3 years • Corporate Loan NPA Resolution: Optimism for resolution in upcoming quarters • Growth Confidence: Assurance of meeting growth targets despite slow start
Strategic Focus • Affordable Housing Strategy: Target growth rate of 17%-18%; focus on prime and affordable income segments • Loan Ticket Sizes: Affordable loans around Rs. 16-17 lakhs; prime loans slightly higher • Customer Segmentation: Dedicated branches for different customer profiles and geography
Asset Quality Management • Corporate Accounts Coverage: Coverage ratio exceeding 2 times; active resolutions in progress • Write-Back Expectations: Anticipated write-backs from previous write-offs; ongoing resolutions for corporate accounts • Cost of Funds: Currently at 8%; improvements expected from lower-cost NHB funds
Retail Loan Guidance • Loan Growth: Guidance of 17-18% for retail loans; disbursement growth of 22% • Salaried vs. Self-Employed Mix: Target of 65% salaried and 35% self-employed customers
Conclusion • Portfolio Management: Back-to-basics approach with adjustments in customer segments and ticket sizes • Regional Focus: Increased presence in southern India; balanced distribution across regions • Investor Relations: Invitation for further inquiries from the Investor Relations team
Company Overview • Date of Call: May 18, 2023 • Key Speakers: • Girish Kousgi (MD & CEO) • Vinay Gupta (CFO)
Financial Performance Highlights • Quarterly Results (Q4 FY23): • Profit After Tax (PAT): Rs. 279 crores (65% YoY increase) • Net Interest Income (NII): Increased by 57% YoY, decreased by 19% QoQ • Pre-Provision Operating Profit: Up 32% YoY • Operating Expenses: Increased by 23%
• Full Year Results: • PAT: Rs. 1,046 crores (25% growth YoY) • Consolidated disbursement growth target: Over 22% in the next 2-3 years
Asset Quality and Non-Performing Assets (NPAs) • Gross Non-Performing Assets (GNPA): • Retail GNPA reduced from 2.86% to 2.57% • Corporate GNPA dropped by 69% to Rs. 846 crores, mainly due to two accounts • Future Corporate disbursements limited to 10% of overall book
• Projections: • Target GNPA level of 1.25% to 1.35% in 4-6 quarters
Strategic Focus • Market Segments: • Shift towards Prime and Affordable housing segments • Affordable business initiated with Rs. 137 crores in Q4, yields around 11.5% to 11.6%
• Growth Plans: • Targeting 17% book growth for the upcoming year • Affordable housing expected to contribute 25% of incremental disbursements in the future
Financial Strategy • Capital Raise: Rs. 2,494 crores to support growth and improve asset quality • Cost of Funds: Projected reduction of 40-50 basis points due to capital raises and potential credit rating upgrades • Average Cost of Borrowing: 7.75% for Q4 FY23, with incremental costs around 8-8.1%
Operational Efficiency • Operating Expense Ratio: Currently at 0.8%, with plans to reduce further • Coverage Ratios: Retail coverage stable at 32%
Future Guidance • Net Interest Margin (NIM): Expected steady state of 3.5% • Spread Target: Steady state spread of 2.5%
Conclusion • The company remains optimistic about improving asset quality and growth in the retail segment, with strategic plans in place for both Prime and Affordable housing markets. The call concluded with an invitation for further questions directed to Investor Relations.
Communication Details • Date of communication: January 31, 2023 • Transcript of earnings call held on January 24, 2023 • Discussed financial results for the quarter and nine months ending December 31, 2022 • Clarification on retail book under moratorium: No accounts under moratorium, some may be part of restructuring • Transcript available on the company's website • Signed by Sanjay Jain, Company Secretary and Head of Compliance
Financial Performance Highlights • Disbursements: • 21% increase for the quarter • 39% increase for nine months • Loan Book Growth: • Overall growth of 0.3% • Retail loans: 2% quarter-over-quarter, 7% year-over-year • Corporate book: Declined by 39% year-over-year • Revenue and Profit: • Revenue: 20% year-over-year growth • Profit After Tax (PAT): 43% increase • Asset Quality: • Gross Non-Performing Assets (GNPA): Decreased to 4.87% from 6.06%
Strategic Focus • Emphasis on retail lending, particularly home loans • Establishment of a dedicated team for affordable housing • Target: 20-25% contribution from affordable housing to incremental business in the next year
Key Inquiries and Responses • Assets Held-for-Sale: Marked down to Rs. 100 crores, not classified as NPAs • Corporate NPA Resolutions: Minimal amounts resolved; full resolution expected in 4-6 quarters • Disbursement Targets: Projected 10% growth in retail book, 20-25% future disbursement growth • Yield and Provisions: Yield increase not directly linked to NPA reversals; some write-offs acknowledged
Market Strategy Shift • Focus on salaried customers in affordable housing segment • Targeting private and government employees with monthly incomes of ₹40,000 to ₹55,000 • Average ticket sizes: ₹16-17 lakhs for affordable housing, ₹26-27 lakhs for prime housing
Financial Outlook • Expected credit cost around 1%, with a target of 0.6% to 0.65% in coming years • Disbursement growth guidance: 22% to 25% for the next year • Margins: Affordable housing expected to yield higher returns; stabilization anticipated in the long term
Operational Insights • Interest rates likely peaked; minimal fluctuations expected • Operating expenses (OPEX) have not significantly increased despite branch expansion • Confidence in corporate loan portfolio; no anticipated slippages in coming quarters
Conclusion • PNB Housing Finance Limited is optimistic about future growth, focusing on retail lending and improving asset quality while managing credit risks and operational efficiency.