Capitaline

Analyst Meet / AGM 17-Oct-17

Conference Call

Dewan Housing Finance Corporation

Expects 30% disbursement and 20% AUM growth for FY2018

Dewan Housing Finance Corporation conducted a conference call 17 October 2017 to discuss the financial results of the company for quarter ended September 2017. Harshil Mehta, Joint Managing Director and CEO of the company along with his colleagues addressed the call:
Highlights:

The company has exhibited strong performance across all parameters in the quarter ended September 2017.
The loan book of the company increased at accelerated pace of 25% yoy to Rs 81390 crore at end September 2017 from Rs 65346 crore at end September 2016. The company has posted strong 51% surge in the disbursements to Rs 9950 crore, while the loan sanctions zoomed 68% to Rs 14201 crore in the quarter ended September 2017, indicating at strong potential.
The segment wise disbursements stood at Rs 5307 crore (up 28% yoy) in home loans, Rs 2475 crore in LAP, Rs 1613 crore in project finance and Rs 554 crore in SME in Q2FY2018.
Home loans accounted for 63.7% of the AUM, followed by LAP at 17.8%, Project Finance at 15.1% and SME at 3.3% end September 2017. The company expects to maintain the home loans share at around two-third of overall loan book, while LAP and SME share would be in the range of 20-21%.
The company is hopeful of sustaining 30% growth in disbursements and 20% increase in AUM for FY2018.
The supply side situation to improve, going forward, supporting the strong growth in home loans disbursements. The GST implementation and demonetisation has is expected to shift business to the formal sources of funds. The implementation of RERA is also expected to improve the ease of home buying and support loan growth.
The loan growth in the retail home loan segment is mostly driven by affordable housing segment. As per the company, it has submitted more than 6000 case with NHB for subsidy under government scheme estimated to be around Rs 100 crore till August 2017.
The company expects to maintain margins in the range of 3.00-3.05% with the falling interest rate scenario.
The company has showing strong momentum in retail liabilities. The deposits share in total liabilities has increased to 10% end September 2017.
The company has been consistently improving its operating efficiency, while showing 21 bps decline in its cost-to-income ratio in H1FY2018 over H1FY2017.
An incremental ticket size for the LAP loan segment stood at 45-48 lakh with incremental yield at 11.5-11.7%.
The project finance ticket size stood at Rs 80-90 crore, while the company expects ticket size to increase for the segment with the implementation of RERA and more compliance. The company is present in the west and southern project finance segment with developers mostly relating to the affordable housing segment.
The company has maintained the asset quality strong with Gross NPA ratio flat at 0.96% and nil Net NPA end September 2017.

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