Conference Call with Aavas Financiers Management and Analysts on Q2FY25 Performance and Outlook. Listen to the full earnings transcript.
Housing Finance company Aavas Financiers announced H1FY25 results Financial Highlights: AUM of Rs 184 billion; Growth of 20% YoY. PAT at Rs 2.74 billion; Growth of 18% YoY. Gross Stage 3 at 1.08%; 1+ DPD at 3.97%. ROA at 3.28% and ROE at 14.01%. Positive ALM & Strong Capital Base. Other Highlights: Assets under Management (AuM) of the company grew by 20% YoY and stood at ~Rs 184 billion. Disbursements during H1FY25 were Rs 25.05 billion registering growth of 8% YoY. Net Profit grew by 18% YoY to Rs 2.74 billion for H1FY25 led by a 12% YoY growth in Net Interest Margin to Rs 6.36 billion, coupled with sharp improvement in operating leverage. Opex to Assets ratio improved sharply by 40 bps YoY in H1FY25 at 3.25% and improved by 9 bps QoQ to 3.18% in Q2FY25. Spread and NIM stood at 4.89% and 7.61%, respectively for H1FY25. As on Sep-24, Gross Stage 3 was 1.08%, Net Stage 3 was 0.78% and 1+ DPD stood at 3.97%. Credit cost during the quarter was 11 bps for Q2FY25 and 16 bps for H1FY25. n terms of the borrowing mix, 50.8% of our borrowings are from Term Loans, 25.1% is from Assignment & Co-lending, 18.1% from NHB Refinancing; 6.0% is from debt capital market (of which 69.6% is from development finance institutions like IFC, CDC & ADB), with no borrowings through CPs. Net Worth grew by 15% YoY to Rs 40.5 billion as on H1FY25. The total number of branches stands at 372 as on H1FY25. During Q2FY25, we have expanded in the state of Tamil Nadu with a branch opening in Hosur. With this Aavas now covers 14 States/ UT. Sachinder Bhinder, Managing Director & Chief Executive Officer, said: “Dear All, For India to be the global leader in economic growth, we believe the housing sector will be at the forefront of this transformation. Current conditions are marked by low mortgage penetration and a significant urban housing shortage presenting unique opportunities for innovation. At Aavas, we are committed to serving unserved, underserved, and underbanked customers in Tier 2 to Tier 5 markets by developing tailored financial solutions. Our focus on achieving risk-adjusted returns underscores our dedication to fostering housing affordability and creating sustainable value in these communities. The green shoots of our technology transformation are already evident, with improvements in turnaround time (TAT) enhancing customer service. This tech-led evolution is expected to further boost productivity and efficiency across the organization. We are excited to share that our network has expanded to 372 branches across 14 states, highlighted by the recent opening of a new branch in Hosur, Tamil Nadu, during Q2 FY25. Building on a robust portfolio and the valuable insights we have gathered from our operations in Karnataka since 2021, this strategic expansion underscores our ongoing confidence in the potential of this region. Aavas has well diversified liability franchised with prudent cash management Aavas is wellcapitalized, boasting a Capital to Risk (Weighted) Assets Ratio (CRAR) of 46.48% as of September 2024. Our granular underwriting practices and collection efforts, backed by cutting-edge technology, have led to an improvement in 1+ days past due, contained at 3.97% as of September 2024. The portfolio’s health remains robust, with Gross Stage 3 at a mere 1.08%. The launch of the PMAY 2.0 scheme, including the interest subsidy scheme for urban housing, will be pivotal in improving loan accessibility for economically weaker sections and low-income groups, empowering countless individuals to realize their dreams of homeownership. This bold initiative reflects the Government’s unwavering commitment to ensuring that every Indian has access to safe and affordable housing, driving inclusive growth and prosperity for all. It aligns with Aavas's mission and vision, enhancing our dedication to delivering innovastive housing solutions for underserved communities. We continue to maintain a razor-sharp focus on Governance, Asset Quality, Profitability, and Growth. By leveraging technology and creating superior customer experiences, we are optimistic about the future. Our strategic initiatives are set to drive sustainable growth and enhance shareholder value.” Result PDF