Highlights:

The second wave of covid and related restrictions impacted the economic recovery and also hurt the operations of the company in the quarter ended June 2021.

The total disbursements were Rs 8652 crore in Q1FY2022 as against Rs 3560 crore in Q1FY2021, a growth of 143%.

Out of this, disbursement in Individual home loan segment were Rs 7650 crore as against Rs 3034 crore, a growth of 152%. Project loans were Rs 237 crore compared with Rs 159 crore for the same quarter in previous year.

Net Interest Margin (NIM) for the quarter stood at 2.20% as against 2.32% for the same period in the previous year.

The total loan portfolio increased 11% to Rs 232548 crore end June 2021 from Rs 209817 crore end June 2020. The Individual loan portfolio moved up 11% to Rs 216947 crore from Rs 195176 crore with home loan portfolio registering a growth of 13%.

Developer loan portfolio stood at Rs 15601 crore end June 2021 from Rs 14641 crore end June 2020.

The company has scaled up ECL provisions to Rs 4727.02 crore end June 2021 from Rs 2668.89 crore end June 2020.

An impact on economic activity has led to increase in NPAs in the quarter ended June 2021. The Stage 3 exposure at default increased to 5.93% end June 2021 from 4.12% end March 2021 and 2.83% end June 2020.

NPAs have been mainly contributed by Tier II and III location with major contribution from small ticket loans.

The provisions for ECL as a percentage of Stage 3 exposure at default stands at 34% end June 021.

The situation has started improving from June 2021.

The collection efficiency stood at 98% for the non-stressed accounts for the quarter ended June 2021

The company is confident of peaking out NPA levels in Q2FY2022

One corporate account under NCLT has been resolved and led to recoveries of Rs 110 crore in the quarter ended June 2021.

The company has exhibited decline in the cost of funds by 5 bps qoq basis and 99 bps on yoy basis.

An incremental cost of fund has declined sharply to 5.03% in Q1FY2022.

The funding environment and liquidity conditions remain favourable for the company. The stage 3 assets in the individual housing loans have increased to 2.6% end June 2021 and from 1.89% from end March 2021. Further, the stage 3 assets for non housing commercial loans segment stands at 18.91%, non-housing individual loans (mostly LAP) at 10.99% and project loans at 24.4%.

In absolute terms, the stage 3 assets for individual housing loans stands at Rs 4727 crore, non housing commercial loans at Rs 2707 crore, non-housing individual loans at Rs 2253 crore and project loans at Rs 3889 crore end June 2021.

The operating expenses of the company were pushed by wage hike and wage arrears leading to higher expenses of Rs 125 crore for Q1FY2022. The company provides wage hike to its employees once in every four years, while earlier wage hike was given in 2017.

The company is targeting expense growth of 15%.

The provision made during the quarter ended June 2021 is ECL provisions. The provisions for restructured advances are created at a rate of 10% by reserves creation through appropriations to P&L.

With increased vaccination drive and containment of the pandemic spread, since June 2021, the business has picked up. The company expects a rebound in the remaining months of FY2022.

Good recovery and further recovery to be strong and sustainable Top 10 accounts Rs 2000 crore

The stage 2 assets in the projects loan segment stood at Rs 2490 crore.

The outstanding exposure under ECLGS loans stands at Rs 450 crore.

There is nil write off in Q1FY2022.

The restructured loan book rose to Rs 5350 crore end June 2021 from Rs 2970 crore end March 2021. These restructured loans are classified as stage 1 and 2 assets with majority in stage 1 level.

Under RBI restructuring guidelines 2.0%, the company has restructured only Rs 50 crore of loans, while the scheme is available up to September 2021

The company has provided only principal moratorium under restructuring, while the customer continues to service loan. There is 38-39% LTV on entire loan book. In case of individual home loans LTV is 44%, non housing individual loans at 33% and non housing commercial loans at 34%.

With the robust disbursements performance in June 2021, the company expects its disbursements in Q2FY2022 to cross disbursements achieved in Q4FY2021. The company is also expecting good level disbursements in Q3FY2022.