In This Article:
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Consolidated PAT Growth: 64% increase compared to Q3 FY24.
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Assets Under Management (AUM): INR10,625 crores, a 32% growth year-on-year.
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Disbursements: INR1,572 crores, up 17% year-on-year.
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Cost of Borrowings: Reduced by 110 basis points over the last year.
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Liquidity: INR1,009 crores with additional undrawn amounts of INR575 crores.
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Net Interest Income: INR241 crores, a 79% increase year-on-year.
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Net Interest Margin: Stable at 5.6%.
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Operating Expenses: INR155 crores.
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Consolidated Profit: INR28 crores.
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Gross Non-Performing Assets (GNPA): 4.9% for the stand-alone entity.
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Retail Lending Portfolio: Constitutes 98% of total loan portfolio.
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Average Disbursement Yields: Maintained at 18.5%.
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Capital Adequacy: 28.5%.
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Debt-to-Equity Ratio: 2 times.
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Housing Finance Disbursements: INR281 crores for Q3, a 25% growth year-on-year.
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Housing Finance AUM: INR2,747 crores, a 34% growth year-to-date.
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Housing Finance GNPA: 1.64%.
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Housing Finance Capital Adequacy: 52.6%.
Release Date: January 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Indostar Capital Finance Ltd (NSE:INDOSTAR) reported a consolidated PAT growth of 64% year-on-year for Q3 FY25.
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The company achieved an AUM growth of 32% to INR10,625 crores and disbursements increased by 17% year-on-year to INR1,572 crores.
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The cost of borrowings was reduced by 110 basis points over the last year, indicating improved financial efficiency.
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Retail lending now constitutes about 98% of the total loan portfolio, showcasing a successful retail lending strategy.
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The company maintains a strong capital adequacy of 28.5% and a debt-to-equity ratio of 2 times, providing a solid foundation for future growth.
Negative Points
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The RBI's MPC revised its growth forecast for the fiscal year downward to 6.6%, indicating potential economic challenges.
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The GNPA stood at 4.9% for the stand-alone entity, with collections impacted by heavy rains affecting truck movement.
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Credit costs increased significantly to 2.6% in Q3 FY25, reflecting higher delinquencies.
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Collection performance was impacted by heat waves, extended monsoons, and a sluggish economy, leading to increased delinquency levels.
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The cost of funding remains high at 10.8%, despite efforts to reduce it, impacting overall profitability.
Q & A Highlights
Q: There's been a sudden drop in other income and a high impairment cost this quarter. Can you explain the reasons and future outlook? Also, what is the current cost of funding? A: The drop in other income was due to a one-off branding exercise related to insurance cross-selling, which was not repeated this quarter. The high impairment cost is attributed to increased delinquencies over the past quarters, but we believe the worst is behind us. The current cost of funding is around 10.8%, down from previous quarters, and we expect it to decrease further as we secure more bank funding. (VinodKumar Panicker, CFO)