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Indiabulls Housing Finance Limited (CIN: L65922DL2005PLC136029)
Unaudited Financial Results Q3 FY 2014-15
January 19, 2015
This document contains certain forward-looking statements based on current expectations of Indiabulls management. Actual results may vary significantly from the forward-looking statements in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, and outside India, volatility in interest rates and in Securities markets, new regulations and government policies that might impact the business of Indiabulls, the general state of the Indian economy and the managements ability to implement the companys strategy. Indiabulls doesnt undertake any obligation to update these forward-looking statements.
This document does not constitute an offer or recommendation to buy or sell any securities of Indiabulls or any of its subsidiaries or associate companies. This document also doesnt constitute an offer or recommendation to buy or sell any financial products offered by Indiabulls.
Investor Contact Media Contact
Ramnath Shenoy Rahat Ahmed
investor.relations@indiabulls.com mediaquery@indiabulls.com
+91 22 6189 1444 +91 22 6189 1155
2
Safe Harbour Statement
3
Pg. No.
1. Business Update 4
2. Operational Update 7
3. Indian Mortgage Market 11
4. Financial and Operational Highlights 17
5. Sustained Financial Performance 32
6. Key Ratios, Valuations and Shareholding 39
7. Detailed Financials 44
Contents
4
Business Update
2000
2004
2005
2006
2008
Started as an NBFC
IPO and listing
Multi-product lending
Launched secured mortgage and commercial vehicle businesses
Credit rating of AA-
Loan book crosses Rs.10,000 Cr.
Exit from unsecured personal and business loans
Mortgage finance focused growth plan
Home loans to prime salaried segments
In-house sales team ramp up to over 1,000 employees
2009
2010 - 11
Credit rating upgraded to AA
Retail mortgage constitutes 70% of loan book
Balance sheet crosses Rs. 20,000 Cr.
RoE: 17%
Credit rating upgraded to AA+
PAT crosses Rs.1,000 Cr.
Balance sheet crosses Rs. 30,000 Cr.
RoE: 22%
2011-12
2012-13
Our Journey
PAT: Rs.1,569 Cr.
Loan assets: Rs.41,169 Cr.
RoE: 27%
2013-14
Conversion to HFC
Indias 3rd largest HFC by size
PAT Rs.1,266 Cr., RoE: 26%
Balance sheet: Rs. 39,129 Cr.
5 5
FY 2014-15: Long-term credit rating upgraded to AAA
Business Update
6
9M FY 14-15 9M FY 13-14 Growth (%)
Total Revenues (Rs. Cr.) 5,179.8 4,392.7 17.9%
NII (Rs. Cr.) 2,266.6 1,902.6 19.1%
PAT (Rs. Cr.) 1,350.2 1,117.0 20.9%
EPS (Rs.) 39.4 34.4
Key Financial Highlights: 9M FY 2014-15
Year-on-Year (Y-o-Y) Comparison Q3 FY14-15 v/s Q3 FY13-14
Q3 FY 14-15 Q3 FY 13-14 Growth (%)
Total Revenues (Rs. Cr.) 1,871.2 1,574.6 18.8%
NII (Rs. Cr.) 828.0 659.0 25.6%
PAT (Rs. Cr.) 478.1 395.1 21.0%
EPS (Rs.) 13.5 11.9
The company had cash, cash equivalents and investments in liquid debt instruments of Rs. 7,813 Crs as at 31st December, 2014. The company receives income from its cash, cash equivalents and investments in liquid debt instruments through the quarter, which appears in Other Income.
For Q3 FY15, dividend of Rs. 9/- per share of face value Rs. 2/- has been declared. With this, total dividend for 9MFY15 would be Rs. 26/- per share of face value of Rs. 2/- .
7
Operational Update
Business Summary
Loans Outstanding : Rs. 48,078 Cr (December 31, 2014) : (US$ 7.75 bn)
Loan Book CAGR (6 years) : 26 % Cumulative Number of Retail Customers Served : 6.30 Lacs Cumulative Loans Disbursed till date : Rs. 100,185 Cr (US$ 16.16 bn)
Cost to Income Ratio (FY 2014) : 17%
Profit After Tax CAGR (6 years) : 20%
8 US $ amounts are converted based on the exchange rate of US $1 = Rs. 62
Credit Ratings
9
Long Term Rating
Short Term Rating
CARE Ratings AAA A1+
Brickwork Ratings AAA
CRISIL (A Standard & Poors Company) AA+ A1+
ICRA (An Associate of Moodys Investor Service) AA+ A1+
India Ratings & Research (A Fitch Group Company)
A1+
Country-wide Reach
10
11
Indian Mortgage Market
Vast Affordable Housing Opportunity
Urban Housing Shortage: estimated at 31.9 million units by 20161
- Demand continues to increase due to rapid urbanization, growing trend of nuclear families and rising income
Affordable Housing: Policy makers focus on Home loans up to 50 Lacs (from sub 25 Lacs classified as priority sector lending)
- HFCs are permitted to borrow through ECBs for lending towards affordable housing
- IBHFL has already tied up facilities of $ 200 million
Government policy focus towards affordable housing
- Relaxation of real estate FDI norms and REIT norms
- Rs. 4,000 crores allocated for low-cost housing and Rs. 50,000 crores for urban housing2
- Rs. 8,000 crores allocated to the Rural Housing Fund run by NHB2
2 million affordable housing units to be launched in the next 3 years
12 1 CRISIL Report; 2 RBI Deputy Governor Speech, Aug 2014
09% 17% 20%
26% 29% 41%
81% 88%
India Thailand China Korea Malaysia Hong Kong USA UK
Lower mortgage penetration compared to advanced and emerging economies implies huge opportunity for growth
Indian mortgage industry at an inflection point and is expected to grow five-fold in next 10 years
In this years budget, the Government has increased tax exemption limits on home loan repayments, effectively lowering the rate of interest
Government has underlined support for affordable housing in the budget, which has been followed up by prompt steps by the regulator
13
Headroom for Growth - Low Mortgage Penetration
Indian Mortgage Market
Source: National Housing Bank, 2013
3,695 3,990 4,541 5,448 6,249 7,110 10,958
27% 27% 30%
32% 35%
37% 40%
20%
25%
30%
35%
40%
45%
-
2,000
4,000
6,000
8,000
10,000
12,000
FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 16E
Rs.
Bill
ion
Home Loan Portfolio HFCs' Share
14
Growing HFC Market Share in a Steadily Expanding Home Loans Market
Source: RBI Database, NHB Reports, CRISIL, & ICRA Estimates
(Amounts in Rs. Bn)
Indian Mortgage Market
High demand growth driven by: Increasing Affordability: Rising disposable incomes coupled with low effective interest rate of
only 4.22 % after tax benefits
Average age of house owner has reduced to 35 years from 43 years in FY20002
Urbanisation to rise to 40% of population by 2025 from the current 31%1
Urban Housing Shortage: estimated at 31.9 million units by 20162
Favourable Demographics: 60% of the countrys population is below 30 years of age3
1 NHB Report, 2012; 2 CRISIL Report; 3 Census 2011
Recent Government Policy Initiatives
Housing for all by 2022: A major policy goal for the new government
- 65 million new housing units
- Government focus on making organised housing finance available to all
100 smart cities plan: Technologically integrated and planned townships
- Large housing opportunity
- Concentrated market and government focus to reduce delivery expenses and improve operating margins
Jan Dhan Yojana: Access to organised banking for all present coverage: 58%
- Vast increase in organised banking infrastructure and reach
- Ultimate benefit and knock on effect on credit off-take and growth
15
Particular 2015 2010 2000
Loan amt 2,000,000 2,000,000 2,000,000
Nominal Interest Rate(%) 10.15% 9.25% 13.25%
Max deduction for interest allowed 200,000 150,000 75,000
Deduction Principal 150,000 100,000 20,000
Tax Rate applicable 33.99% 30.90% 34.50%
Tenor (Yrs) 15 15 15
Total amount paid per year 350,267 282,302 307,617
Interest component 200,267 182,302 262,314
Principal component 150,000 100,000 45,303
Tax amount saved 118,965 77,250 32,775
Effective interest paid on home loan 81,302 105,052 229,539
Effective interest rate on home loan 4.22% 5.39% 11.61%
Indian Mortgage Market
16
Tax Incentives Low Effective Interest Rates
Amount in Rs.
17
Financial and Operational Highlights
80%
15%
5%
Balance Sheet Assets
18 * Cash, Cash Equivalents and Investments in Liquid Debt Instruments US $ amounts are converted based on the exchange rate of US $1 = Rs. 62
Total Assets
As at December 31, 2014 Rs. 53,402 Cr. (US$ 8.61 bn)
As at December 31, 2013 Rs. 43,750 Cr. (US$ 7.06 bn)
Loan Book: 80% Cash & Liquid Investments*: 15% Other Assets: 5%