SBFC Finance conducted a conference call on 29 January 2024 to discuss its financial results for the quarter ended December 2023. Aseem Dhru, MD&CEO of the company addressed the call:

Highlights:

The company had received a rating upgrade to AA-/ stable during the quarter.

The Asset under management growth was stable at the higher end of the guided range.

The company has continued to maintain the stable asset quality in Q3FY2024.

The spreads and NIMs have been stable, despite the company do not recognize interest income on NPAs.

RoE of the company has increased to pre-IPO level of 11% in Q3FY2024.

The loan book has increased 8% qoq and 40% yoy to Rs 6266 crore end December 2023.

The spread were stable at 7.5% in Q3FY2024. The company expects to maintain the spread steady at around current level.

The company has maintain cost of fund stable in Q3 from Q2 and expect to continue to maintain stable cost of funds ahead

The yields have improved by 30 bps in Q3FY2024 driven by decline in the ticket size to Rs 9.3 lakh from 10 lakh in the previous quarter.

The company expects rating upgrade to help to keep check on cost of funds.

About 98% of the loan book is at the variable interest rate.

Opex to AUM has declined to 5.48% in 9FY2024 from 5.84% in the corresponding period last year.

The company is on track to reduce opex to AUM ratio by 50 bps in FY2024. The company further aims to reduce opex to AUM ratio by 50 bps in FY2025 also.        

The company aims to continue to grow AUM by 5-7% every quarter.

The company does not expect to add any new product in the near term.

The company will continue to add 20-30 branches every year.

The company has 100% in house sourcing model.