Highlights:

The disbursements of the company have increased 4% to Rs 16786 crore from Rs 16110 crore in Q2FY2022. However, the disbursements in the individual home loan segment were flat at Rs 14300 crore. On the other hand, the disbursements in project loans increased 15% to Rs 407 crore and other retail loans by 46% to Rs 2079 crore in Q2FY2023.

The total loan portfolio rose at steady pace of 10% to Rs 262336 crore as against Rs 237660 crore. The individual loan portfolio increased 13% to Rs 250617 crore, while developer loan portfolio declined 23% to Rs 11719 crore end September 2022.

The digital app of the company ‘Homi” has added Rs 9159 crore of sanctions in Q2FY2022.

The company has witnessed sharp decline in NIM on qoq as well as yoy basis due to modification loss of Rs 275 crore on coversion of Rs 9000 crore high quality retail loans from fixed rate to floating rate. The exercise was aimed to retaining these quality retail asset with zero NPAs and high CIBIL score.

The sharp decline in project loan book by Rs 700 crore in Q2FY2023 and Rs 2000 crore in last 12 months has also caused the reduction in interest income of Rs 95 crore.

The high cost of borrowing have further contributed additional interest cost of Rs 240 crore in Q2FY2023.

The company has nearly absorbed the impact of repo rate hike on cost of borrowings. The impact of report rate hike in September 2022 is likely to caused another 15-18 bps rise in cost of borrowing for the company in Q3FY2023.

However, the company has raised lending rate by 115 bps effective from 01 October 2022 and the company expects this repricing of loans to contribute 80-90 bps improvement in the yield in Q3FY2023 and significantly improve interest income.

The company has hiked lending rate by 175 bps in last four months.

The lending rate hike of 60 bps in Q2FY2023 has led to 47 bps increase in yield on advances in Q2FY203 over Q1FY2023.

The company expects FY23 margins to be better than FY22 margins.

The company has exhibited decline in the stage 3 loan book to 4.9% from 5.14% a year ago. The provisions were at Rs 6521.89 crore with coverage ratio improving to 44% from 43% last year.

The provisions include covid related provisions of Rs 535.50 crore end September 2022.

The company has witnessed slippages of Rs 585 crore in the project loan segment, of which Rs 350 crore came from the restructured book in the quarter ended September 2022.

Further exit in project loans are limit and company will try retain high yielding and quality project loans.

The NPA ratio in the individual housing loan segment stood at Rs 1.68%, non-housing individual loans 6.85%, project loans 42.24%.

About 97-98% of loan book is floating rate loan book.

The restructured loan book of the company stood at Rs 3266 crore end September 2022 of which corporate segment is Rs 2093 crore and other is Rs 1374 crore.

The company do not expect significant slippage from restructured book.

The housing demand is expected to remains table in H2FY2023.