Indiabulls Housing Finance Ltd Q1 FY23 Earnings Conference Call Insights

Key highlights from Indiabulls Housing Finance Ltd (IBULHSGFIN) Q1 FY23 Earnings Concall

Management Update:

• IBULHSGFIN said it expects its overall gross NPAs to remain in the range of 3-3.5% for some time and as AUMs start to grow, the company expects stability in its gross and net NPAs.

• For FY23, the company expects credit costs to remain at between 100-150 bp and from FY24 onwards credit costs are expected to reduce substantially from these levels.

Q&A Highlights:

• Hari asked about the size of the legacy loan book that was expected to reduce by further 20% by calendar. Gagan Banga CEO answered that it’s roughly $2 billion.

• Hari asked if the company is fully hedged and is not exposed to FX rate. Gagan Banga CEO replied that the company is fully hedged. Also, there is no risk that the company carries irrespective of the movement of the rupee and this principle the company will continue to follow.

• Analyst asked about the plans regarding a potential equity raise or funding via convertible debt. Gagan Banga CEO said that currently, the company chose to defer it and there is no immediate plan. Given the current capital adequacy at 35%, IBULHSGFIN feels equity or convertible is not the way to proceed.

• Shabad Thadani from Arkkan Capital enquired about the 20% reduction in wholesale book, how much of this is expected to be driven by repayments from the borrowers or others. Gagan Banga CEO replied that all of this will be through actual repayment. There is no transaction structured or any other being factored in.