Highlights:

The business activity was severely impacted due to covid-19 pandemic and lockdown across the country during the most part of Q1FY2021. However, its only from the June 2020 month unlock started and economic activity started improving.

The disbursements of the company dipped65% to Rs 3560 crore in Q1FY2021. The total loan portfolio rose 6% to Rs 209817 crore end June 2020.

The disbursements have started picking up from June 2020 touching 62% of the disbursement in the month of June 2019, despite several locations continuing under lockdown.

The performance of the company under PMAY was buoyant with disbursements of more than Rs 1000 crore accounting for 30% of the retail disbursements.

The business environment in Q2FY2021 is better compared to Q1FY2021. The second quarter has started on the positive note with the significant pickup in disbursements in the month of August 2020. Overall, the company expects to post positive growth in disbursements for Q2FY2021.

The loan book under moratorium in the individual home loan segment stands at 16%, while 25% of the overall loan book of the company is under moratorium end June 2020 which has declined from a peak of 29%. However, in terms of customers less than 12% of the customers are under moratorium.

The construction or developer loan book under moratorium stands at 77% and LAP stands at 36%

Many customers are coming up for payments despite being under moratorium. The trend of loan book under moratorium is showing improvement and remains in the range of 20-25% in August 2020.

As per the company, many customers unaffected by covid have utilized the moratorium benefit to preserve the cash in the absence of any business activity in April-May 2020.

Most of the loan accounts availing moratorium where standard as on 1 March 2020 and as moratorium ends, the company expects them to start servicing loans. 

Thus, the company does not expect any significant spike in NPAs or restructuring of loans after the moratorium ends. The property sales is also picking up, while LTV on loans is very low giving confidence about maintaining the asset quality.

The company has exhibited a sharp 21 bps decline in cost of funds in Q1FY2021 with the sharp decline in incremental cost of funds. The company expects to maintain margins ahead with a sharp decline in cost of funds.

The funding and liquidity environment remains comfortable for the company.

The capital position of the company is comfortable currently and the board of the company will take call on capital raising at appropriate time.

The company has created sufficient provisions taking into various covid scenarios and currently the provision coverage ratio stands at 45%.

The employee cost of the company was elevated for the quarter ended June 2020 mostly on account of payment of incentives to the employees.

The challenge for the company is to bring customers under moratorium on track. The company has formed a task force to handle loan book under moratorium.

The collection efficiency for the non-moratorium book stands at more than 90%.