Highlights:

The second covid wave impacted the performance of the company in the quarter ended June 2021 as many of the branches of the company were not operational.

The gold prices have corrected sharply from the peak of August 2020, while the gold prices trend remained weak in Q1FY2022.

The new customer acquisition was impacted due to covid second wave in Q1FY2022.

About 67% of the loan book is in gold loan segment

Gold book of the company has declined 6% on yoy basis and 13% on sequential basis end June 2021.

The loan disbursement stood at Rs 35419 crore in the quarter ended June 2021 compared with Rs 44630 crore a quarter ago.

The gold loan book has declined due to higher auctions, withdrawals of collaterals by customers and volatility in gold prices.

However, the company is better placed to deal with any volatility in the gold prices with loan to value (LTV) ratio at 65%.

The company could add 2 lakh new customers compared with 3 lakh added in the previous quarter.

The average ticket size of the gold loan segment stood at Rs 42749 crore with the duration of 114 days.

The disbursements in the microfinance business stood at Rs 1118 crore in the quarter ended June 2021. The collections in the microfinance business are improving.

The high value customers of the company above Rs 1 lakh ticket size were targeted by competitors. The company has taken corrective actions and launched new products and the results are visible.

The microfinance business has exhibited a turnaround, while the company is positive for the future.

The company is carrying excess liquidity across all businesses. The excess liquidity on consolidated basis stands at Rs 2893 crore and undrawn bank lines stands at Rs 7320 crore end June 2021.

The share of CPs in borrowings has declined to 6% end June 2021 from 9% a year ago.

The gold loan customer base was 24.06 lakh.

The average LTV on the gold loan book stood at Rs 2850 crore or 65% of the gold price.

The vehicle finance business is operating from 68 branches and reported net profit of Rs 2.2 crore.

The actions have reduced the growth has picked up and company expect 15% gold loan growth for rest of FY2022.

The interest accrued stood at Rs 740 crore

The company expects some pressure on yields for products introduced for high-ticket gold loan customers, while it would be offset by growth in the book.

The restructuring of loans stood at Rs 1174 crore in Q1FY2022.

The credit costs was Rs 122 crore in Q1FY2022, which includes Rs 90 crore for microfinance, Rs 30 crore in gold loan segment and balance in the housing finance business.

The collection efficiency in the microfinance business was consistently at 95% in July and for the 10 days of August.

The company has auctioned gold loans of Rs 1500 crore in Q1FY2022 valuing 4.5 tonnes or 1.5% of gold loan disbursements in Q2FY2021. The company had earlier auctioned 1 tonnes of gold loans in Q4FY2021.

The company undertook aggressive auctioning to reduce credit costs.

The lower tenure products below 3 months lead to early recognition of NPAs.

The collection efficiency in the vehicle finance stood at 87% in May 2021, which improved to 105% in June 2021.

The collection efficiency in the housing finance segment was 79% in May 2021 and 87% in June 2021 with 84% for Q1FY2022.