Highlights:

The loan book of the company has increased 11% with 15% growth in the individual loan book which has increased its share to 79% from 76 % a year ago.

Disbursements have increased at a strong base of 29% to Rs 16110 crore in the quarter ended September 2021. Individual loan disbursement have surged 38% to Rs 14330 crore. The disbursement growth was spread across the country.

The disbursement have increased to 132% of the pre covid level in the quarter ended September 2021.

The company has recorded substantial improvement in the gross stage 3 assets to 5.14% end September 2021 from 5.93% end June 2021.

The company has a strong confidence and conviction that there would be further improvement in the asset quality going forward.

The company has also accelerated provisions to improve provision coverage ratio by 9% to 43% end September 2021.

There is a strong focus on collection and the collection efficiency has improved up to 99% for the regular account which is highest since the beginning of the pandemic.

The company has reduced cost of funds by 12 bps, despite hardening of the interest rate environment.

Incremental spread stands at above 230 bps. However, the margin has been impacted due to interest income reversal on restructured loans.

The company is very much comfortable on the asset quality.

The developer loan book stands at 6% of the overall loan book and the company do not expect any large slippages in developer book.

The one-time restructuring 1 and 2 stands at Rs 7300 crore end September 2021 up from Rs 5300 crore end June 2021. The restructuring of loans has led to interest income reversals of Rs 135 crore in the quarter ended September 2021 in addition to Rs 116 crore in the quarter ended June 2021.

The interest income reversal on restructured loans is on account of change in the effective interest rate.

With the end of restructuring scheme, there would be no further addition to restructured loans and customer exiting restructured category would lead to significant decline in interest income ahead.

Thus, the margins are expected to return to normal level in next couple of quarters.

The operating expenses were higher on account of one-off expenses of Rs 47 crore for retirement benefits in the quarter ended September 2021.

Excluding the one-time impact the normal run rate in the operating expenses is expected to be 15-20%.

Further provisioning may not be on the higher side

There is a positive mood about growth ahead and the company expect a better performance in Q3FY2022 than Q2FY2022 supported by festive season.

The credit cost increased from 48 bps in FY2020 to 60 bps in FY2021. The credit cost stood at 100 bps in H1FY2022, while the company expects to credit cost for FY2022 to be at a similar level to FY2021.

The company has already made full provisions of 10% for restructured loans.