Full-Year NIM Guidance: 2.6%-2.75%
CFO indicated margins will normalize from current 3.21% quarterly run-rate to 2.6-2.75% band on full-year basis, citing liability repricing and potential RBI rate actions by year-end.
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Loan Book Growth Target: 12-15%
Management guided for 12-15% loan book growth on full-year basis, up from current 8% YoY, contingent on disbursement recovery post-April-May disruptions.
Credit Cost Guidance: 40-50bps
CFO stated credit cost guidance of 40-50 basis points for FY24, down from 78 bps in FY23, reflecting declining trajectory in provisions despite elevated project loan NPAs.
ROA Target: 1.3-1.4%
CFO indicated ROA should be in 1.3-1.4% range on blended all-assets basis, compared to ~2% in current quarter which management considers elevated.
Double-digit loan portfolio growth maintained for FY25
Despite Q1 at 4% YoY, management reiterated double-digit growth target, expecting disbursement momentum to accelerate with strong sanctions pipeline (INR 15,180 crore sanctioned in Q1, +30% YoY).
Disbursement target of INR 75,000 crore for FY25
Up from INR 60,000 crore in FY24, implying ~25% growth in disbursements. Management expects stronger H2 with project loan pipeline and builder book disbursements.
NIM guidance of 2.7-2.9% maintained
Margins bottomed at 2.76% in Q1. Management expects improvement in coming quarters from risk-based pricing revisions, higher-yielding non-IHL mix increase, and declining incremental cost of funds.
Non-IHL disbursement share to increase to 20%
From current 12.5-13%, targeting 20% share of non-individual home loans (LAP, builder, corporate) by FY26 to improve margins, as IHL segment faces intense bank competition.
Double-digit AUM growth target for FY26
Management maintained double-digit growth guidance given at Q4 FY25, with expectation to reassess after Q2 performance based on festival season traction.
NIM guidance of 2.6%-2.8%
Management confirmed NIM will remain within the guided range of 2.6%-2.8%, supported by declining cost of funds offsetting yield compression.
Credit cost guidance of 9-15bps for FY26
Management reiterated full-year credit cost guidance of 9-15bps, expecting Q2 onwards improvement as recovery operations intensify and legal cases resolve.
Incremental cost of funds to decline further 5-10bps
With ample liquidity from RBI's CRR cut, incremental borrowing cost expected to reduce from 6.97% by another 5-10bps over next three quarters.
Loan Book Growth: 15-22% for FY24
Management reiterated full-year guidance despite H1 underperformance. October sanction growth of 15-20% YoY signals acceleration in H2. Requires ~5% sequential quarterly growth to achieve midpoint.
NIM Guidance: 2.6-2.8% for FY24
Current 3.04% expected to compress as Q1 was peak (3.41%). Repricing normalization and competitive intensity to pressure margins. Guidance range set vs. initial 2.4-2.55% estimate.
Credit Cost: 50-55bps for FY24
Normalized credit cost guidance (excluding one-off INR 104 crore provision on repossessed assets). Further decline of 10-15bps expected in FY25-26 as recoveries improve.
ROE Target: 16-18%
Current ROE at 16% with management focus on sustaining through improved ROAs and reduced credit costs (~25bps reduction YoY). Structural improvements cited.
Double-digit AUM growth target maintained for FY25
Management reiterated guidance for double-digit loan portfolio growth, with potential 12-15% if PMAY affordable segment traction exceeds expectations. Currently at 6% growth but expects H2 seasonal strength (festive quarter + Q4) to close the gap.
NIM bottoming at 2.7-2.9% range; expect 5-10bps improvement in H2
Management explicitly stated they have 'hit the bottom' on margins. NIM improvement expected from: (1) wholesale book growth at ~10.5% annualized yield, (2) new affordable self-employed product at +250bps versus standard home loans, (3) CIBIL-based pricing granularity changes, (4) 3bps sequential cost of funds reduction benefit still flowing through.
Developer finance to reach 4% by FY25-end, 5-6% by FY26
Developer loan portfolio currently at 3% (approximately INR 8,838 crores). Management targets 4% by March 2025 and 5-6% over next 12 months, maintaining triple-B or higher external rating requirement for all new disbursements.
Self-employed affordable segment targeting 15-20% of book in 2-3 years
New product launched 20 days prior to call, priced ~250bps above standard home loans, targeting CIBIL/no-document self-employed borrowers. Management acknowledges higher risk but states pricing adequately compensates. Expects 'cautious' growth trajectory as capabilities are built.
Full-year book growth targeting double-digit
Management maintained guidance for ~10% growth in both disbursements and loan book for FY26, despite H1 delivering only 6% growth. Expects Q3 and Q4 (traditionally strong quarters) to drive acceleration, citing 24% sequential disbursement growth in Q2 as a green shoot.
NIM floor established at 2.62%
Management believes 2.62% is the bottom for NIM, with further compression unlikely. Expects cumulative cost of borrowing to decline another 5-6bps in Q3 as fixed-rate NCD maturities (INR 14,000-15,000 crore) are repriced at current lower rates.
Construction finance target INR 5,000 crore for FY26
Despite H1 disbursements of only INR 156 crore (vs INR 1,397 crore in H1 FY25), management reaffirmed the INR 5,000 crore full-year target. Average yield on project finance improved to ~12% (vs 10.35% last year), reflecting selective, high-margin approach.
Lead generation channel target INR 2,000 crore
Direct lead channel (aggregated online/offline leads) crossed INR 750 crore in H1 vs INR 800 crore for entire FY25. This zero-commission channel is expected to contribute INR 2,000 crore in FY26, reducing agent-dependency (currently 87% of business).
NIM guidance for Q4 FY24: 2.8%-3%
Management expects worst-case NIM decline of 10-15 basis points from current 3% levels due to tight liquidity, with Q4 NIM staying above 2.8%. Stable bond yields post-budget provide some offset.
PCR target: 50% by fiscal year-end
Board has mandated reaching 50% provision coverage on Stage 3 assets by March 2024. Currently at 48% with progress on track.
Q4 disbursements expected significantly higher than Q3
Monthly disbursement trajectory shows October INR 4,500 crore, November INR 4,700 crore, December INR 5,700 crore. January came in at INR 4,650 crore on retail. Management expects Q4 to be "very good" vs Q4 FY23 and "much better" than Q3 FY24.
ARC pilot: 10 accounts in Phase I
Board-approved ARC policy with external consultant engaged. Phase I test case involves 10 large fully-provided accounts (no interest income impact). If successful, larger pool will be considered in FY2025.
FY25 AUM Growth Target of ~9% IHL
Despite Q3 disruptions, management expects IHL growth to reach ~9% for FY25, up from current 6.4% total AUM growth, driven by Q4 recovery in Bangalore disbursements and full recovery in Hyderabad.
FY26 Disbursement Growth of 10-15%
Management guided for 10-15% disbursement growth in FY26, underpinned by double-digit AUM growth expectations and new affordable housing vertical contribution.
NIM Improvement of 15-20bps Over 2-3 Years
CFO indicated margin improvement of 15-20 basis points over a 2-3 year period if affordable housing reaches ~10% of AUM, with partial offset from potential rate cuts.
Q4 Disbursement Target of INR 20,000-25,000 crore
All products disbursement guidance for Q4 FY25 set at INR 20,000-25,000 crore, including INR 600 crore undisbursed sanctions in Bangalore awaiting property registration resolution.
Q4 Disbursements Target
Management expects Q4 retail disbursements to exceed INR 20,000 crore, compared to INR 16,096 crore in Q3, as January alone logged INR 6,000 crore.
NIM Outlook
NIM expected to be in the range of 2.70-2.72% in Q4, marginally above the current 2.69%, with further funding cost reduction of 5-7bps anticipated.
Full Year Profit Guidance
Management expects PAT to grow approximately 7% for FY2026, reaching around INR 7,200 crore, driven by Q4 seasonality and improving trends.
Organizational Restructuring Initiative
A Big Four consultant has been engaged to review the company's structure, technology, and compensation practices. Findings expected within 3-4 months, with implementation planned from Q1 FY27.
Double-digit disbursement growth in FY25
Management targets double-digit growth in disbursements and AUM for FY25, with confidence to reach INR ~70,000 crore disbursements based on Q4 performance recovery and new office network delivering.
NIM guidance of 2.7%-2.9%
Management expects NIM to remain in 2.7%-2.9% band with delivery closer to higher end, citing potential rate cuts as buffer. Full-year FY24 NIM was 3.08%.
Cost-to-income ratio at 13%-13.5%
Cost-to-income ratio for FY24 was ~13%, expected to remain steady in 13%-13.5% range for FY25, working towards gradual reduction.
Stage III to continue declining trajectory
Management indicated good visibility on continued Stage III reduction based on ongoing recovery efforts, ARC exploration for large accounts, and focused litigation management.
NIM Guidance: 2.6-2.8% for FY26
Management expects NIM to be range-bound between 2.6% (worst case) and 2.8% (best case) for FY26, compared to 2.73% in FY25, as competitive intensity from PSU banks pressures spreads.
Disbursement Growth Target: 10-12%
Management targets disbursement growth of at least 10-12% for FY26, aiming for double-digit growth quarter-over-quarter with April described as satisfactory and May picking up.
Project Finance Disbursement Target: INR 10,000 Crore
Project finance disbursements targeted at INR 10,000 crore for FY26 vs INR 4,200 crore in FY25, growing from 3% of portfolio selectively by focusing on reputed builders with sustainable margins.
Asset Quality Target: GNPA Below 2.2%
Management targets reducing GNPA from 2.47% to below 2.2%, with credit cost expected in the 9-15bps range, similar to FY25's 9bps.
10%-12% loan book growth for FY27
Management targets double-digit growth, conditional on geopolitical stability. Budgeted disbursements of INR 73,000 Cr retail and INR 4,500 Cr project finance should drive 15% disbursement growth.
NIM guidance 2.5%-2.7% for FY27
Full-year NIM expected to compress from current 2.68% as competitive pressures persist. Q1 guidance is 2.6%-2.7% range.
ROA target 1.75%-1.80% for FY27
Below board's aspirational 2% target, factoring in margin pressure and higher DSA costs from new distribution channels.
Q1 FY27 disbursement growth target 15%
April already showed 20.87% YoY growth, exceeding Q1 guidance, driven by seasonal momentum and improved competitiveness.