Highlights:

• The loan growth of the company has been supported by deeper penetration and lower competitive landscape.
• The recoveries and collection performance was supported by improved sentiments from better cash flows with ongoing rural infrastructure story, better crop and MSPs etc.
• The collections efficiency was upwards of 96% for FY2019, 100% for Q4FY2019 and 107% for March 2019, which helped the company to further reduce GNPA ratio.
• The company has recorded decline in GNPA ratio to 5.9% end March 2019, while the company expects to continue to further reduce GNPA level going forward. However, even in a worst case the company expects GNPA ratio to be contained at 7-8% level.
• Thus, the strong loans growth, better collection efficiency, improved margins etc boosted the earnings performance of the company to record high level in Q4FY2019. The improved performance of subsidiaries also contributed to better earnings performance of the company in Q4FY2019.
• As per the company, most of the products of the company are need based products that do not get impacted by any events for longer time. The company would be able to maintain its growth trajectory with strong rural opportunity providing significant headroom for growth. Even an average monsoon rainfall would provide strong growth opportunity.
• On liquidity front, as per the company even if liquidity remains tight and interest rates remain elevated, it would not face any fund raising challenge.
• The company would continue to maintain strong focus on asset quality and growth. However, historically H1 of the financial year has always been subdued, while the company has been able to record aggressive performance in H2 of the financial year.
• The provision coverage ratio of the company for stage 3 asset was lower at 19.2T% end March 2019, while it is line with the requirement under ECL method of Ind AS. However, the PCR for stage 1, 2 and 3 asset was healthy at 46%.
• The write-off stood at Rs 197 crore in Q4FY2019 and Rs 1182 crore in FY2019.
• The disbursements of the company were steady for Q4FY2019 over Q4FY2019, mainly on account of higher for vehicle segment and cautious reduction in the SME disbursement due to existing market conditions.
• The company expects to maintain the share of SME loans stable at 9.10%, while sees the room for increase in share of pre-owned vehicle to 12-15% over a period of time from existing 9%.
• Despite high base, the company has posted 10-12% growth in the vehicle segment for Q4FY2019. Within the vehicle segment, the car disbursements were flat, while other segments have posted healthy growth.
• For FY2020, the OEMs are cautious over growth, but the company expects to outperform the OEMs.
• The company has improved RoA to 2.6% in FY2019, while sees scope to RoA above 3% in FY2020 with 15-20 bps improvement in cost efficiency 10-15 bps reduction in cost of borrowings and 20 bps contributions from NPA reduction.
• LGD has increased from 27.45% end March 2018 to 27.95% end March 2019.