Highlights:

The company has been witnessing good performance since the fourth quarter of last year. The performance was impacted because of covid-19 spread in Q1FY2022.

The housing market uptrend is likely to continue for next 5 to 6 years. The growth is expected to continue across builder, non builder, metro and non metro segments.

The company has recorded all time high disbursements in Q3FY2022, while the disbursements also record high in 3 out of last 4 quarter.

The company has raised interest rate 3 times since April 2021 which has helped to improve yield on advances.

The yield on advances has improved to 8.05% in Q3FY2022 and the company expects further improvement in yields going ahead. An incremental yield on home loans stood at 8.02% and overall portfolio at 8.07%.

The company is reducing cost of funds to 5.56% in Q3FY2022, while the incremental cost of funds stood at 4.98% in Q3FY2022.

With the increase in yield on advances and decline in cost of funds, the company has improved net interest margin to 3.74% in Q3 from 3.53% in Q2FY022.

The company aims to maintain spreads above 2.4% and margins above 3.65%.

The company is recording strong growth in disbursement, sanctions, loan book, yields and margins but the profitability is impacted due to change in strategy and cut in interest rates to competitive levels last year.

The company expects to reverse impact on profitability from Q1FY2023.

With the improvement in collection efficiency back to pre-covid or better levels, the company has further improved asset quality in Q3FY2022.

An increase in the provision cost in Q3FY203 is on account of jump in disbursements and loan book.

The provisions for standard assets were Rs 11 crore and provisions for NPA book that moment was at Rs 5 crore in Q3FY2022.

The company is holding provisions of Rs 240 crore in line with IRAC norms against requirement of Rs 156 crore provisions under ECL norms.

The company added six branches last year against normal run rate of 12 to 16 branches mainly on account of covid, while the company would focus on adding branches going forward.

The margins were boosted by high LCR contributing 9 bps of improvement in margins as the yield on investment in government bonds was higher than cost of funds of 5.5% for the company.

The housing market demand and market dynamics is back to pre covid levels.

The company has prepared for increase in cost of borrowings by 100-125 bps in next 4-6 quarters.

The company would be comfortable with the debt equity ratio of 8 times. The company also has plans to raise capital at appropriate time to maintain debt equity ratio.

The share of Karnataka in disbursements which used to be above 30% has declined with the diversification to other states. The share of Southern region stood at 67-68% in the disbursements in Q3FY2022. As per the company, the monthly disbursements for Karnataka state stood at Rs 250 crore, Andhra Pradesh Rs 70 crore, Telangana Rs 150 crore and Tamilnadu at Rs 110 crore in Q3FY2022.

The non-salaried segment is showing healthy pickup in the growth. The share of non salaried segment in the disbursement which used to be 30% pre-covid levels, declined to 12% during the covid-19. The non-salaried segment has shown increase in share in disbursements to 26% in Q3FY2022 and it would further accelerate to pre-covid level of 30% in the next couple of quarters.

Balance transfer out stood at Rs 70 crore in the quarter ended December 2021 and the company expect maximum balance transfer out of Rs 30 crore per month.

The company is targeting growth of 18-20% in disbursements as well as loan book for FY2023.

The target customer of the company has income of Rs 30000-40000 per month.

The company does not expect much change in credit cost going forward and it expects continue to maintain asset quality.

The borrowings of the company stood at Rs 23550 crore, of which bank borrowing continues to account for 50%.

The restructured loan book of the company has declined to Rs 690 crore end December 2021 from Rs 711 crore end September 2021, after repayment of Rs 20 crore by the customers.

As per the company out of 4400 customers in the restructured book about 700 customers have started repaying the loan amount.

The company makes standard asset provisions of 0.45%.

The company has utilized covid related provisions.