PNB Housing Finance Ltd Q1 FY23 Earnings Conference Call Insights

Key highlights from PNB Housing Finance Ltd (PNBHOUSING) Q1 FY23 Earnings Concall

Q&A Highlights:

• [00:15:24] Anand Mundra of Soar Wealth Managers asked about the retail growth QonQ, while the disbursements not growing in Q123 vs. Q422. Hardayal Prasad MD answered that the growth has come in retail. In 4Q22 disbursements, PNBHOUSING did about INR3,700 crore. In 1Q23, it did about INR3,400 crores of disbursement due to 1Q being a slower month historically.

• [00:16:39] Anand Mundra of Soar Wealth Managers asked about the guidance in terms of growth of disbursements of AUM. Hardayal Prasad MD replied that PNBHOUSING is expecting higher single digit growth in FY23.

• [00:21:31] Anand Mundra of Soar Wealth Managers enquired about the balance transfer for 1Q23. Hardayal Prasad MD answered that it’s 9% annualized and about 2.25% in 1Q23.

• [00:26:42] Anand Mundra of Soar Wealth Managers enquired the reason for Unnati AUM not growing in 1Q23 vs. 4Q22. Hardayal Prasad MD clarified that the company is revamping the whole product and PNBHOUSING has appointed a new head for the product. Going forward, Unnati portfolio is going to be completely different. PNBHOUSING expects to do bookings by Sept. 2022.

• [00:27:56] Anand Mundra of Soar Wealth Managers asked about the disbursements in Unnati segment in last quarter. Hardayal Prasad MD answered that there was a disbursement of INR140 crore in last quarter.

• [00:28:29] Anand Mundra of Soar Wealth Managers queried that on INR140 crore disbursement, whey there was a de-growth in AUM by INR50 crores. Pankaj Jain Chief Sales Officer said that despite INR140 crores of disbursements, the runoff on the Unnati of 25% impacted AUM. Additionally, the transformation of the business and attrition slowed it down.

• [00:32:43] Krishnendu Saha with Quantum AMC enquired about the Unnati GNPA. Neeraj Manchanda CRO said that after the COVID impact, it’s 150 bp higher than in general. So the delinquency is in the range of about 3%.

• [00:35:05]  Nikhil Walecha from Franklin Templeton asked the reason for the decrease in Stage 3 PCR. Hardayal Prasad MD said the reduction is mainly due to the 3-4 accounts where one was sold to ARC and two write offs, and a decline in NPAs of about INR100 crores of retail.

• [00:39:24] Nikhil Walecha from Franklin Templeton enquired about spreads at all-time low and the incremental spreads PNBHOUSING is working at. Kaushal Mithani Interim CFO replied that the spread the company is looking at is around 1.5-1.6%.

• [00:43:37] Nikhil Walecha from Franklin Templeton asked about the traction on the co-lending partnership. Hardayal Prasad MD answered the company has agreements with one private sector and one public sector organization. On private, PNBHOUSING has already given them INR78 crore, INR61 crore and remaining is with the company, 80:20. To other partner also PNBHOUSING has given good number.

• [00:46:03] Sanjeev Damani of SKD Consulting asked about the total loan accounts as on 30^th June and employee size. Hardayal Prasad MD replied that total accounts are 2.52 lakhs and employee size as on date is 1,400.

• [00:52:05] Aditya Doshi from Chanakya Capital asked about composition of corporate loan book reducing to 9% from 22%. Hardayal Prasad MD answered that the company is looking to restart the corporate book business due to the very high NPAs the company was holding. Now since there is order and disciple with the builders, the company will re-enter the market at an appropriate time.

• [00:56:28] Krishnendu Saha from Quantum AMC asked about restructured book, how are the payments across. Neeraj Manchanda CRO said that on the retail side, the restructuring book outstanding is around INR2,016 crore. Out of that, around INR300 crore has already moved to Stage III and almost 75% of the customers, in the form of principal or interest outstanding have started making repayment.