HomeFirst Finance
HomeFirst Finance - Q1
29th July 2021, Mumbai
HomeFirst is a technology driven affordable housing finance company that targets first time buyers in low and middle - income groups. The company was listed in Feb'21 on Bombay Stock Exchange & National Stock Exchange of India.
Particulars | Q1FY22 | Q1FY21 | YoY | Q4FY21 | QoQ |
AUM (INR Crs)^ | 4294 | 3623 | +18.5% | 4141 | +3.7% |
Disbursement (INR Crs) | 305 | 53 | +476.9% | 452 | -32.6% |
Total Income (INR Crs) | 142 | 134 | +5.8% | 136 | +4.8% |
PAT (INR Crs) | 35 | 39 | -9.1% | 31 | +12.2% |
Spread (%)* | 5.5% | 4.6% | +90 bps | 5.4% | +10 bps |
ROA (%) | 3.1% | 4.3% | -120 bps | 2.9% | +20 bps |
Gross Stage 3 (%)^ | 1.9% | 1.0% | +90 bps | 1.8% | +10 bps |
Cost to Income (%) | 32.1% | 28.8% | +330 bps | 38.0% | -590 bps |
*IGAAP basis. ^ Data as on period end
Key Highlights for Q1 FY22:
Vaccination
Ÿ 99% of the employees are now vaccinated with at least one dose.
Ÿ All employees remained safe across Wave-1 and Wave-2.
Asset under Management (AUM):
Ÿ INR 4,294 Crs, growth of 18.5% over Q1 FY21.
Ÿ Sharp focus on housing loans that contribute 92.4% of AUM and EWS / LIG category that forms ~77% of the customer base.
Distribution:
Ÿ As on Jun'21, the Company has 72 branches with presence in 12 States and 1 Union Territory
Ÿ Business commenced in 10 new branch locations. In addition, 12 new digital branches have been launched taking the total number of touchpoints to 137
Disbursements:
Ÿ Disbursements of INR 305 Crs in Q1 FY22, at 67.4% of Q4 FY21 levels, y-o-y growth of 476.9%.
Collection Efficiency:
Ÿ Collection Efficiency has improved to 97.6% in Jun’21 after dips in April and May, compared to 98.5% in Mar’21.
Ÿ Bounce rates have improved to 16.1% in Jul’21 from 18.3% in Q1 FY22 (17.3% in Q4 FY21).
Asset Quality:
Ÿ Gross Stage 3 is at 1.9% and Net Stage 3 is at 1.4% with 0.6% of POS being restructured.
Provisions:
Ÿ ECL provision as on Jun'21 is INR 47 Crs; resulting in total provision to loans outstanding ratio at 1.4%; and the Stage 3 provision coverage ratio is at 70.3%.
Borrowings:
Ÿ Total borrowings including debt securities are at INR 3,083 Crs as on Jun’21 up from INR 2,654 Crs as on Jun'20. The company continues to carry a liquidity of INR 1,480 Crs as on Jun’21.
Ÿ Cost of borrowings reduced further from 7.4% in Q4 FY21 to 7.2% in Q1 FY22. It is lower by 130 bps compared to Q1 FY21 which stood at 8.5%.
Spread:
Ÿ Spread on loans stood at 5.5% in Q1 FY22 compared to 4.6% in Q1 FY21.
Strong Capital Adequacy will drive growth going forward:
Ÿ Tier I capital stands at 55.2% as on June’21. IPO fund raise of INR 265 Crs is being utilized for future growth.
Ÿ Networth as of Jun’21 is at INR 1417 Crs vis-à-vis INR. 973 Crs as on Jun’20.
Financial Performance:
Ÿ Q1 FY22 Total Income at INR 142 Crs; y-o-y growth of 5.8% from INR 134 Crs in Q1 FY21, sequential increase of 4.8% over Q4 FY21 of INR 136 Crs.
Ÿ Q1 FY22 PAT at INR 35 Crs, sequentially up by 12.2% from INR 31 Crs in Q4 FY21.
Commenting on the performance Mr. Manoj Viswanathan, MD & CEO said,
“Our Q1 FY22 performance was strong, considering that we had to deal with a severe second wave of Covid. We recorded an AUM growth of 18.5% y-o-y and a sequential growth in PAT of 12.2%. Wave 2 of Covid had a bigger impact on health, while livelihoods and incomes were broadly protected. Industries were allowed to function by maintaining strict Covid protocols. Construction work and industrial units were operational and in-fact exports reached a historical high during Q1. Increasing vaccination is seen as a strong counter to fatalities and this has led to the positive momentum in businesses. At HomeFirst, 99% of our employees are vaccinated with at-least one dose.
We expect the upward trend to continue as the overall opportunity remains large; supported by low interest rates and muted house prices, driving strong business growth. Also, people realized the importance of home ownership in the past 18 months, more than ever before. Affordable Housing Finance sector remains one of the most resilient segments, validated through better collection efficiencies compared to other segments. Besides, the inherent resilience of this sector, our focus on the salaried segment in industrialized and urbanized states helped us stay on course through these difficult times.
Digital adoption has also accelerated during Covid times. Usage of the customer app for various activities has increased. 67% of our customers are registered on our app as on Jun'21 compared to 48% in Jun’20. Payments received via the app have gone up by 135% in the same period.
Our collection efficiency improved in June to 97.6% (April & May at 94.7% & 94.0% respectively). Bounce rates improved in July'21 to 16.1% (Q1 FY22 - 18.3%, Q4 FY21 - 17.3%). Our Gross Stage 3 inched up marginally by 10 bps to 1.9% and restructuring under the RBI framework during the quarter was just 60 bps.
Q1 Disbursement at INR 305 Crs is at a commendable run-rate of 67.4% vis-à-vis Q4 FY21 levels (y-o-y growth of 476.9%). This is further enhanced by the fact that this growth is broad based across all our markets.
On Direct Assignment (DA), we have completed a transaction worth INR 118 Crs during this quarter. Like in the past, company continues to explore these transactions which will help optimize the capital usage, bring down leverage, improve cost of funds as well as balance the existing liquidity position of the company.
We remain committed to our strong tech-led operating model in the housing finance space and continue to invest in building a trusted brand that delivers superior service to customers with industry leading turnaround times.”
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