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Aavas Financiers Q3 FY21 - Conference Call Takeaways - YES Securities

Posted On: 2021-01-24 22:20:06 (Time Zone: Arizona, USA)

Guidance / Outlook:

- 15%-20% of 1+dpd pool usually slips to NPA.

- Retain disbursement growth of 20-25% for FY21.

- Expectations of 1+dpd to be < 5% in near term.

Asset quality / Restructurings/Collections/ Credit cost:

- GS3 and NS3 at 1% and 0.7% respectively. 1+dpd at 8.2% from 6.2% QoQ. GS3 includes 0.6% of assets (outstanding at Rs413.8mn) not classified as NPA owing to standstill norms.

- 1+dpd of 8.2% includes 30-90 bucket of 3.8%.

- 2,000 accounts have not paid a single installment in December vs 5,800 accounts in Sept. Mostly in 1st and 2nd buckets. Assuming 15-20% slips, 8.2% is inclusive of those.

- In terms of 1+dpd and NPLs, Maharashtra state is above the average from all other states.

- Collection efficiency at 98.8% (Inclusive of NPA) and 100% (excluding NPA) vs 95% QoQ, portfolio is 100% secured (mostly residential properties in pool).

- ECL provisions at Rs42.9mn, cumulative covid provisions at Rs190.3mn and total provisions at Rs482.9mn.

- Received 100-150 restructurings requests, done none. Some moved out and took BT. Stress is lesser as 97% of book ATS is below

- Average cost of borrowings at 7.7%, Cumulative yields at 13.4% and spreads at 5.7%.

- Have zero exposure to CPs.

Portfolio mix:

- Salaried segment at 39.3% from 34.9% QoQ, largely due to higher salaried disbursements and reclassification of assets from applicant to earning member.

- Have recalibrated disbursement towards segments or people engaged in activities like school transports, hospitals, stationary etc. Remain cautious for the next 1-2 quarters.


- Total live accounts at 1,18,398.

- Securitisation at 23% of AUM from normal 19-20%. Despite elevated volumes, net income is lower by Rs150mn on YoY basis.

- Securitisation spreads were higher by 140-150bps.

- Normally keep 3-4 months of disbursement as liquid, holding higher due to covid. Normally disburse Rs300-400crs on monthly basis.

- Have passed on 10bps benefit to customers owing to reducing costs, may release some more in Q1FY22.

Shares of AAVAS Financiers Ltd was last trading in BSE at Rs.1851.1 as compared to the previous close of Rs. 1930.2. The total number of shares traded during the day was 7231 in over 1479 trades.

The stock hit an intraday high of Rs. 1951.55 and intraday low of 1845.1. The net turnover during the day was Rs. 13512859.

Source: Equity Bulls

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