Highlights:

• The company has exhibited good performance across all parameters in the financial year ended March 2017. The disbursements of the company increased 15% to Rs 41541 crore, while loan book improved 15% to Rs 144534 crore end March 2017 over Rs 125173 crore end March 2016. The company expects to maintain loan growth in the range of 15-17% for FY2018.
• Individual loan portfolio increased 14% Rs 139024 crore (96.2% share in overall loan portfolio), while project loans surged 60% to Rs 5510 crore (3.8% share) end March 2017 over March 2016.
• Within individual loans, the loan against property (LAP) accounted for 12% of the overall loan portfolio. The company expects to maintain the share of LAP and projects loans together at 16% in FY2018. The company has been very selective on project loan disbursements.
• In individual loans segment, the focus has been strong on affordable housing segment, which has also been assigned infrastructure status in the Union Budget 2017-18. Further, the company expects RERA to instill more confidence into home buyers helping to improve sales and loan growth.
• As per the company, its lowest home loan rates in the industry and stable real estate prices would support the loan growth.
• The non-metro locations have contributed about 55% of the disbursements of the company in FY2017. The company has further expanded into non-metro locations by adding two new regional offices at Bhopal and Patna.
• The expansion of distribution network, addition of new product and higher ticket size would support loan growth of the company.
• As per the company, its subsidiary LICHFL Financial Services would contribute higher loans sourcing of 9% in FY2018 up from 4% in FY2017.
• On customer retention front, the company has been reducing the pre-payment rates and expects further decline in pre-payment rates in FY2018.
• The provision expenses were higher in Q4FY2017 mainly on account of one-off provisions relating to provision of Rs 50 crore towards aging of one large project loan accounts. The company had made provision of Rs 120 crore for aging of large loans. The company has such 3 large NPA project loans, were 100% provision has been made, while the company is expecting the recovery of one account in FY2018.
• The company has reduced Gross NPA to 0.43% end March 2017 as against 0.45% end March 2016. Net NPA have also declined to 0.14% from 0.22%.
• Net Interest Margins (NIMs) further improved to 2.70% in FY2017 from 2.52% in FY2016, while the company expects to maintain or marginally improve NIMs in FY2018.
• The incremental yield stood at 10.3% on incremental basis with individual loan yield at 9%, project loans at 14% and LAP at 11%.
• On liabilities front, the company has raised the share of low cost public deposits to 5% from 3% last year. As per the company about Rs 12000 crore of high cost bonds with the interest rate of above 9% are due for repayments in FY2018, which will help to reduce cost of funds of the company in FY2018.
• As per the company, about Rs 5000-6000 crore of loans are also scheduled for repricing in FY2018.
• The company has provided Rs 50 crore for wage revisions related expenses in FY2017, which unlikely to be repeated in FY2018. The company expects cost-to-income to remain stable at 15-16% for FY2018.
• The current leverage ratio of the company stands at 12 times (debt/networth), with the room to expand up to 16 times. The company has comfortable equity capital position.