Indiabulls HFL Q3 PAT up by 8.9% at INR 985.5 crore

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PAT for 9M FY19 is at INR 3,084.4 crore up 19.7% from 9M FY18 PAT of INR 2,576.2 crore

*Please note that the P&L for Q3 FY18 and 9M FY18 are not directly comparable with the P&L of Q3 FY19 and 9M FY19 due to one-time gain of INR 542.4 Cr. from sale of investment in OakNorth Bank to GIC of Singapore, in Nov 2017. Also, in Q3FY19 there is a one-time tax incidence of INR 217 Cr. [spread across Q3 & Q4 of current FY] on account of redemption of long-term units of debt mutual funds

For Immediate Use

Mumbai, 31st January 2019: The Board of Directors of Indiabulls Housing Finance Ltd. (IBH), India’s second largest housing finance company, announced its unaudited financial results for the year ended December 31, 2018.

The numbers are reported under Indian Accounting Standards (Ind AS).

IBH’s Profit after Tax (PAT):

Particulars

(₹ Cr.)

9M FY19 9M FY18 YoY Growth (%) Q3 FY19 Q3 FY18 YoY Growth (%)
PAT 3,084.4 2,576.2^ 19.7% 985.5 905.3^ 8.9%

^ The above PAT for 9M FY18 and Q3 FY18 have been adjusted for profit from sale of stake in OakNorth Bank to GIC of Singapore, in Nov 2017. Also, in Q3FY19 there is a one-time tax incidence of ₹ 217 Cr. [spread across Q3 & Q4 of current FY] on account of redemption of long-term units of debt mutual funds

Note: Full Corporate Social Responsibility [CSR] expenses of INR 69.2 Cr. for FY 2018-19 have been taken in Q3FY19, adjusted for CSR and credit costs, operating expenses for Q3FY19 was INR 255.0 Cr. compared with INR 261.1 Cr. in Q2FY19

An interim dividend of INR 10 per share of face value INR 2/-, amounting to 500%, has been declared in the board meeting held on January 31st, 2019. IBH is amongst the Top 15 dividend paying private companies in the country.

Highlights 9M FY18-19

· PAT for 9M FY19 is at INR 3,084.4 Cr. up 19.7% from 9M FY18 PAT of INR 2,576.2 Cr.

· Loan Assets are at INR 1,24,271.1 Cr., growth of 16.2% from INR 1,06,971.3 Cr. in 9M FY18

· Balance sheet size as at end of 9M FY19 is at INR 1,28,750.4 Cr.

· 3-month commercial paper is down to INR 4,670 Cr. which is only 4% of borrowings

· GNPA stable at 0.79%

· Capital adequacy stands at 22.75%

Highlights Q3 FY18-19

· PAT for Q3 FY19 is at INR 985.5 Cr.

· Gross sell down of INR 14,587 Cr. and net sell down of ₹ 12,055 Cr. in Q3 FY19

· Adjusted for CSR and credit costs, the operating expenses for Q3FY19 is INR 255.0 Cr., down 2.4% sequentially from Q2FY19 operating expenses of INR 261.1 Cr.

Business Going Forward

· IBH is on track to deliver 15%-16% PAT growth the current financial year

· For the next financial year FY2019-20 PAT will grow at between 17% and 19%

· The core strategy of IBH’s business is to sell down pools of loans while retaining a spread door-to-door over the entire length of the loan

· While total assets under management are expected to grow 20% – 25%, balance sheet growth is expected to be around 10%, this strategy will not only allow the company to grow its business without raising fresh equity capital, but will also boost RoEs

· As on date, the sell down pool principal outstanding is INR 25,822 Cr. [we earn a spread of 2.4%] representing 21% of total assets under management of IBH. If these assets were on the balance sheet of the company, based on the conservative gearing with which the company operates, an additional equity capital of INR 4,300 Cr. would have been required

Key Financials:

Particulars

(Rs. Cr.)

Q3 FY19 Q3 FY18 YoY Growth (%) 9M FY19 9M FY18 YoY Growth (%)
Total Loan Asset 1,24,271.1 1,06,971.3 16.2%
PAT 985.5 905.3^ 8.9% 3,084.4 2,576.2^ 19.7%
Gross NPA (%) 0.79% 0.77%
Net NPA (%) 0.59% 0.56%
CRAR 22.75% 21.35%

^ The above PAT for 9M FY18 and Q3 FY18 have been adjusted for profit from sale of stake in OakNorth Bank to GIC of Singapore, in Nov 2017. Also, in Q3FY19 there is a one-time tax incidence of INR 217 Cr. [spread across Q3 & Q4 of current FY] on account of redemption of long-term units of debt mutual funds

Asset Liability Management and Strong Liquidity Position

IBH closed December 2018 with cash and liquid investments of INR 21,090 Cr., in line with its principle of maintaining high liquidity on its balance sheet.

IBH reduced its 3-months CP outstanding to INR 4,670 Cr. which now constitutes to only 4% of its total borrowings, ensuring a long-term fully matched ALM.

As an operating principle, from Q4FY19 the total 3-month CPs of the company will not exceed 5% of its borrowings.

Over the past 36 months IBH has demonstrated the depth of its diversified liabilities franchise by moving nimbly across instruments such as securitization, institutional bonds, retail bonds, ECB’s, Masala Bonds and Bank Term Loans based on macro conditions around liquidity and interest rates

Customer repayments in Q3FY19 were INR 7,431 Cr. The average customer repayments per quarter in the 3 quarters of this financial year is INR 6,523 Cr.

Gagan Banga, Vice Chairman and MD, IBH commented that,

“We are on track to deliver 15%-16% PAT growth the current financial year. For the next financial year FY2019-20 PAT will grow at between 17% and 19%.

The core strategy of IBH’s business is to sell down pools of loans while retaining a spread door-to-door over the entire length of the loan. While total assets under management are expected to grow 20% – 25%, balance sheet growth is expected to be around 10%, this strategy will permit the company to maintain conservative leverage but at the same time allow it to deliver healthy RoEs.”

About Indiabulls Housing Finance Limited

IBH is India’s 2nd largest Housing Finance Company. IBH enjoys the highest long-term credit rating of AAA from all of the four leading rating agencies in India. IBH has a balance sheet size of ₹ 1,28,750.4 Cr. and provides quick, convenient and competitively priced home loans in the affordable housing segment

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