Questions across 10 calls

Manoj Viswanathan

Firm not listed in source transcripts

Home First Finance Company India Limited

Home First Finance Company India Limited CC-May26.pdf · 2026-05-07

Yes, Abhijit.

Yes. So, looking at the first half, so there were two or three things that were happening simultaneously. One was that we were just coming out of the whole overhang of the credit issue. So the delinquencies were elevated and the collection was a bit difficult, also impacted by tariffs etc.. There was a bit of sluggishness in demand as well at that point in tim e. And we were also internally going through some issues. Some of the locations were not staffed properly. There was some attrition and so on. So, all of these things were happening simultaneously at that point, and hence, a little bit of weakness or sluggishness. As the year progressed, some of the external factors got resolved, and then the internal factors also got resolved. We started filling up all the positions. We rebuilt the teams. And simultaneously, the external factors got resolved to some extent. So the credit weakness started coming down, collections started improving. The tariff issue was also kind of put to rest at some point. And the demand also started improving from October onwards. So all these things kind of came together in the last two quarters and that helped us deliver these good results.

Home First Finance Company India Limited CC-Jan26.pdf · 2026-01-23

The target is to end the year at 25% AUM growth. And again, for the next year, we have given the guidance of 25% growth on AUM. And as you rightly mentioned, yes, the first half of this year, there were certain issues that we were grappling with, because of the environment. And as I have mentioned in my detailed, state-wise discussion, there are certain states where we are going through certain issues, etc., which are now gradually stabilizing, and which is the reason for the renewed confidence in disbursal numbers. And some of the overhang, which was there, because of the MFI delinquency, etc., is now coming to an end. It is kind of tapering off in the overall market environment. These are all the reasons why we are feeling more confident. And we are also seeing that upt ake in numbers internally, in origination numbers, etc. , which will eventually translate into disbursal. That is the reason we are feeling more confident about the disbursal numbers for Q4 as well as for next year.

Correct. So, we are gradually seeing that divergence between bounce rates and actual collections. If you see last quarter also, the bounce rates were elevated, but then the collection was far better than the previous quarter. To some extent, it is becoming more of a behavioral issue, where customers have multiple accounts, so they end up missing the payment in one account, then they immediately transfer the payment from some other account. We have been talking about this for the last couple of years. But I think now that is coming out very clearly. So, collection efficiency is kind of getting disconnected from the bounce rate itself.

Home First Finance Company India Limited CC-Nov25.pdf · 2025-11-04

Yes, the bounce rate was slightly higher than expected. But then our recovery during the month did not reflect that. We had good recoveries during the month. Our first bucket recovery, which is a barometer we use, was actually pretty good. It was better than what we had seen in the last couple of months. So, maybe it was just more of a seasonal uptick. And I think there was some confusion in terms of the dates also, the date of presentation was extended by one day in October. Since fourth was a Saturday, we ended up presenting on 6th. There was some confusion on the presentation date, as a result of which there was a slight delay.

The recovery was normal or even better than normal. So , we think that it was just a seasonal uptick.

Home First Finance Company India Limited CC-Jun25.pdf · 2025-07-28

As I mentioned, disbursement only in April was slower than expected number. I think just the year opened on a slower note. Generally, Q1 has much lower number in the industry compared to Q4. Till now, we have always been slightly above, except for last year where we were about 5% higher than Q4. If you see previous years, that is Q1‘24 over Q4‘23, Q1‘23 over Q4‘22, etc. you will see that we are just 1% or 2% higher than Q4 in Q1. Generally, it is a seasonally low quarter. Other than that, frankly speaking, yes, April was slightly slower than expected. That is why I said there is a Rs. 40 - 50 crores kind of difference than what we expected. But otherwise, May onwards, we are moving in line with what we have planned for the year, which is about Rs. 5,600 - 5,800 crores of disbursal. If you see our history also in the past, if you see FY23, for example, Q1 was low, but then Q2, Q3, there was a jump or rather Q3, Q4, there was a jump. So, you will have to look at it through the year. Other than that there is nothing additional to add. As I mentioned, in Tamil Nadu and Telangana, there were two large markets again, the Q1 was a little muted, which is why we kind of came lower than expected. But this trend is likely to get corrected and we should be moving on expected lines in the future. There is nothing structurally which is difficulty in disbursements or anything which we are seeing on the ground.

It was lower than what we expected. First quarter, we were looking at maintaining about close to between Rs. 430 - Rs. 450 crores kind of a run rate. But April alone came a bit lower. I think it was around Rs. 380 crores. That is about Rs. 40 - Rs. 50 crores of difference came in April itself. We caught up in May and June, and even July, the trends are good. So, I think, it was just a blip in April.

Home First Finance Company India Limited CC-Mar25.pdf · 2025-05-02

Renish, if you look at the book spreads, we are above the 5% mark. And we have always maintained that we run a fully floating rate book. So, depending upon how the cost of borrowings is moving, we will transmit difference to the customer. Of course, now we are kind of entering a declining interest rate situation. That is why we have not really embarked on any increase in rate. So, the trend should reverse and the margin should be maintained on the book. That is how we are looking at it.

Correct. 5% plus we should be able to maintain because it is a floating rate book. If we are going below 5%, we will transmit that difference to the customer.

Home First Finance Company India Limited CC-Sep24.pdf · 2024-10-25

As of now, nothing to read into it, we are on 25th of this month, and a majority of bounce cases collections actually happens by 25th. We are trending very well as far as the collection is concerned. If you were to look at some of the good months of collections that we had in the last 7 to 8 months, October ranks on par with that. As of now, I would say nothing to be read into it. The Bounce rate as on Oct’24 is 15.6%, if you see the collection figure 6 days post the bounce , about 5.6% of the people have paid and the bounce rate after 6 days is 10%, which is in line with what has been happening in the last several months or several quarters.

No. We don't have a DST model. We have a connector model, which is a completely variable expense model. Our employees basically consolidate these leads and then they contact the customer and take it to closure. We have been following this model for the last 14 years, and have not changed anything. As we pointed out, we have increased the number of employees in the last 2 quarters. And that is in line with our plan. We are building the employee base for expansion over the next 2 to 3 years.

Home First Finance Company India Limited CC-Jun24.pdf · 2024-07-26

On the disbursements, as we had mentioned last time, we actually do a majority of disbursements electronically through NEFT / RTGS. Also, we have a small set of payments which we do for resale transactions through demand draft, so which did not get impacted by this guideline. These are the two main reasons why we didn't have any disturbance in the disbursements. As far as BT out is concerned, the increase in PLR that we're contemplating is fairly small compared to what the customers have gone through over the last two years, and 90% of it will get transmitted through a tenure increase, not an EMI increase. So, it should not disturb the customers too much. Therefore, we don't anticipate any immediate impact from the increase in PLR which we are doing now.

The origination yield will largely be range -bound around 13.4%-13.5% and LAP ratio is also fairly range-bound. LAP share as a percentage of disbursal is generally in the 15% to 20% range. There may be minor changes within that range, but largely it's in that range. As a result of which, the origination yield also will be range-bound.

Home First Finance Company India Limited CC-Mar24.pdf · 2024-05-09

No, I think the balance transfers are slightly elevated only because of the repricing that has happened. We don't see any kind of long-term trend or anything like that. It is largely a reaction to this sharp increase in rates that has happened in the last 2 years. We are also putting in place a lot of new measures to address the balance transfers. It is a concern, but it's not a major concern because you can see the overall erosion levels are still at the same level. It balances out the balance transfers and own prepayments, etc. The total erosion still stands at about 16% to 18%, including the balance transfers. So, it's not like the increase in balance transfers have increased erosion rate of the portfolio.

In our case, we don't issue cheques at all. As a practice, we have been doing electronic transfers from day 1. There are, of course, a certain proportion of transactions, especially on the resale transactions, where the customers themselves require demand draft because they have to show the demand draft to the seller so that the seller will transfer the property in their name. It acts as a kind of assurance. Those are the only transactions where we issue a demand draft. But in the case of a demand draft, we are also incurring the cost from day 1 because the money goes out of our account so we charge the interest to the customer. However, the clearance happens fairly quickly. We don't have a practice of actually issuing a cheque and then completing the transaction later, etc. The turnaround time between issuing the demand draft and transaction clearing happens quickly. Within 30 days, almost 90% -95% of the issued DDs get cleared. On an average, in about 15-day DDs are cleared. And we don't have a very large volume of such transaction, it largely happens in the case of resale transactions where the seller requires the assurance. Those are the only cases where we issue a demand draft otherwise largely it is done electronically.

Home First Finance Company India Limited CC-Dec23.pdf · 2024-01-19

The BT Out has moderated slightly if you see compared to last quarter, that is the result of some of the actions that we have taken to retain customers, etc. It's moderating and trending back towards our earlier levels. Repricing of the back book, we have not done a lot, that is not really the reason for the compression of the spreads. The spreads have compressed because the cost of borrowing has gone up. Back book repricing is minimal. There are few customers who come to us with some req uests, only they are getting repriced. There is no systematic repricing of the back book at this point and as far as the origination is concerned, we have always been maintaining that we are operating at a certain yield point and we continue to operate the re and the spreads are moving up and down depending upon the cost of borrowing. We don't want to operate at very high yield because then we tend to tread into a different customer segment altogether. So, we have kept that balance and we have always maintai ned that the spreads are likely to hover around 5% to 5.25%. That is just coming to play right now.

No, It is the cycle of when people are hired, when they join, etc. Generally, our hiring is largely from campuses. The hiring actually happens in October to December period and then they join between January to June. This month itself probably more than 100 people would have joined us. It's just the way the cycle is. The employee attrition is at similar levels, it's in the range of 30%-35% and still not gone to the highs that we saw last year, so the employee number should come back again in Q4.

Home First Finance Company India Limited CC-Sep23.pdf · 2023-10-27

The players are the same that we have seen in the past. I don't think there is any change in the mix of players. Of course, some NBFCs are also doing balance transfers now at low rate, which probably is not sustainable. That might be more a tactical move in a particular quarter. We see the balance transfers more as a reaction to the rate hikes that have happened over the last year. A lot of customers have gone through a 125 basis point rate hike. When the loan was originated, the tenure was 20 years, but now suddenly their tenures looked very extended, probably 25 to 30 years. So , this is provoking the balance transfers. We think it should moderate with the passage of time.

Yes. Last year, we had kind of elevated attrition levels, and it has reached about 40% levels. But in the first quarter of this year, it was lower than 30%. This quarter also, it has been around the 30-ish level, 32 -odd so. We have taken some steps, as we had mentioned that we have expanded our ESOP pro gram. We have started a different onboarding program for our front - end employees. We have taken several initiatives. However, this year we are also getting support from hiring lull in certain segments and certain sectors of the industry. I think a combination of these factors has led to a lower attrition for us in this year.