Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Satin Creditcare Network Ltd (BOM:539404) reported a 30% year-on-year increase in overall revenue for H1 FY25, reaching INR 1,290 crore on a consolidated level.
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The company's AUM grew by 16% year-on-year to INR 11,007 crore on a consolidated basis, with a standalone AUM growth of 18% year-on-year.
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The borrower base expanded by 8% year-on-year to 34.6 lakh, and the branch infrastructure increased by 10% year-on-year with the addition of 128 branches.
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Satin Creditcare Network Ltd (BOM:539404) has implemented robust risk management strategies, resulting in a lower GNPA of 3.5% compared to the national average.
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The company has received an AUA license from UIDAI, enabling seamless eKYC transactions, enhancing accuracy, security, and sustainability in customer verification processes.
Negative Points
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The unsecured lending space faced notable disruptions due to factors like heatwaves, general elections, and heavy monsoons, leading to increased delinquency rates.
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There was a temporary increase in delinquency across several geographies, impacting regular collections and follow-ups.
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The company's cost-to-income ratio increased marginally from 43% to 46% due to additional resources deployed for collections.
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Satin Creditcare Network Ltd (BOM:539404) revised its annual AUM growth guidance to 8-10%, down from the previously projected 25%, reflecting a more measured outlook.
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The company anticipates a credit cost of around 4.5% to 5% for FY25, indicating ongoing challenges in managing asset quality.
Q & A Highlights
Q: Can you explain the increase in operating expenses and the outlook for cost-to-income ratio? A: The increase in operating expenses is marginal, rising from 43% to 46%. This is due to the addition of dedicated employees for collections and other administrative costs. We expect the cost-to-income ratio to remain stable at around 45-46%. - Respondent: Unidentified_2
Q: What is the guidance for credit costs in H2 and FY26? A: We anticipate credit costs to be in the range of 4.5% to 5%. However, with our measures in place, we aim to manage within or below this range. We expect stabilization by Q4 FY25. - Respondent: Unidentified_2
Q: What is the target for secured book growth, and what percentage contribution do you foresee? A: Currently, the secured book is about 12% of our total AUM. We aim for a 40-50% year-on-year growth in secured lending, targeting 25-30% of the total AUM in the next three years. - Respondent: Unidentified_2