Highlights:

The company has delivered highest ever consolidated quarterly profit with strong growth across businesses. The company has posted robust 43% growth in the consolidated net profit to Rs 377 crore in Q2FY2022, while the company has PAT guidance of over Rs 1500 crore in FY2022.

Lending book has moved up 3% to Rs 59060 crore end September 2021.

In the NBFC segment, the retail + SME book has expanded 19% y-o-y with its mix rising to 59% of overall loan book.

In the HFC segment, the affordable housing loan book has surged 49% y-o-y with its mix rising to 33%.

The company has improved NBFC NIMs by 91 bps yoy to 6.23% in, while HFC NIM also gained by 99 bps to 4.32% in Q2FY2022.

The domestic AAUM of AMC segment has surged 26% y-o-y with equity AAUM growth of 41% y-o-y and equity mix at 39%.

AMC business has shown strong 41% growth in PBT to Rs 230 crore with RoE at 36.5% up from 33.9% last year.

AMC business has improved Operating PBT/ AAUM ratio to 25 bps from 21 bps.

In the life insurance business, the company has posted 27% growth in the Individual first year premium. The protection mix stood at 6%. Embedded value jumped 22% to Rs 7009 crore.

Health insurance GWP has improved 30% with retail mix at 68% and the business is on track to break even by Q4 FY22

Active customer base at 28 million (grew 42% year on year) aided by focus on granular retail growth across all businesses

Continuing track record of consistent growth in profit delivery, backed by the diversified business model and synergies

Businesses leveraging partnerships and branch expansion to drive customer acquisition and growth at scale

NBFC

Disbursement targeted towards Retail and SME segments in the NBFC segment accounts for 69% of overall disbursements.

The margin expansion led by growth in select retail and SME segments, cost of borrowing and scale up in ecosystem sourcing channels.

About 80% of overall loan book is secured and net security cover is 2.0x

The collection efficiency strong at 98% in September 2021

The gross stage 3 assets stood at 3.64% and net stage 3 assets at 2.03% with PCR at 44.1%.

The stage 2 loan book was at 7.7% with 60 dpd+ at 2.29%. The company has maintained overall floating provision for Stage 1 & 2 assets of Rs 129 crore

NBFC branch count was at 119 with 66% presence in Tier 3/4 cities. The company plans to expand to 150 branches by March 2021.

The retail book mix in Tier 3/4 grew two times since September 2019.

The company continue to focus on retailisation and granularity.

The company has strong funding access with adequate liquidity surplus and amongst best cost of borrowing in industry.

The capital adequacy ratio is comfortable with CRAR at 23.7%.

The collection efficiency is back at 98% in September 2021.

The restructured loan book is at Rs 1840 crore or 3.9% of overall loan book end September 2021 with the addition of 0.79% in Q2FY22.

Housing Finance

The housing finance business branch count was at 80 with 57% presence in Tier 3/4 cities and the company plans to expand to 120 branches by March 2022.

The company is witnessing strong momentum in affordable housing finance segment with targeted book mix of 35-40% by March 2022

Overall loan book retail mix was at 95%, with home loan ticket size down 21% yoy to Rs 22 lakh.

LAP ticket size was up 27% yoy to Rs 39 lakh.

Construction finance ticket size declined 6% yoy to Rs 6.45 crore.

The company is focusing on granularity and higher margin segments

The NIM increased 99 bps yoy to 4.32%. Change in Mix is leading to Improving margins & Core Profitability.

The collection efficiency was strong at 96% in September 2021

The gross stage 3 asset at 2.13% and net stage 3 assets were steady at 1.4% end September 2021.

The restructured loan book was 7.5% end September 2021.

PCR rose to 34.3% from 37.0% a year ago and 33.5% a quarter ago. The security cover was 2x.

Overall floating provision in Stage 1 & 2 is Rs 49 crore end September 2021.

Comfortable capital adequacy with CRAR at ~23.56%

Asset Management

The asset management business is showing momentum in AUM growth and value accretive mix.

There is solid revival in Mutual Fund QAAUM crossing Rs 3 lakh crore rising 26% yoy with consistent investment performance.

Equity QAAUM at Rs 116151 crore accounted for 39% of AUM up from 34% last year.

Investor folios increased to 7.3 million with the addition of 0.6 million folios in H1FY22

Individual MAAUM mix was 47.2% and B-30 MAAUM mix at 15.9%.

SIP AUM surged 43% and new SIP registrations surged 110% to 3.20 lakh.

The company has diversified distribution network with presence across 280+ locations, over 80% are in B-30 cities. There is strategic partnership with 70+ Fintechsto scaling up sourcing through ecosystems.

The company is focusing on growing Alternate Assets Segment. Playing passive segment with Smart Beta (alternate weighting) strategies through ETFs, FoFsand Index Funds.

Life insurance

The life insurance business is showing high momentum in individual business.

There is increase in productivity across Proprietary & Partnership by 23%. Plan for further investments in Partnerships in H2 FY22 to gain mindshare

The company is first mover in repricing term business in Q2 to protect margins.

AUM increased 18% to Rs 14850 crore.

Improvement in persistency across all cohorts over last 2 years with an aim to reach top quartile numbers in next 12 months

The company is on track to achieve 14% Net VNB margins for FY22

Embedded value increased 22% to Rs 7009 crore end September 2021, while the company target to achieve embedded value of Rs 7500 crore by Mar 2022 and return on embedded value of 13% -14%.

Net of Insurance, H1 FY22 Covid claims amounted to Rs 242 crore. The company is carrying additional reserves of Rs 90 crore for claims end September 2021.

By September 2021 end, claims have gone down to 1/3rdof Q1FY22 and same is expected to normalize to Pre-COVID levels in Q3FY22.

Health insurance

Health insurance business has continued growth momentum in H1FY22 with total GWP rising 39% to Rs 764 crore.

The health insurance business reported net loss of Rs 230 crore in H1FY2022 due to high CoVID claims.

The combined ratio normalized for CoVID claims at 110% compared with 118% last year.

The company is on track for breakeven by Q4FY22 in the absence of third wave