Detailed Narrative
Post-Merger Integration Delivering Results
FY24 was the first full year post-merger and delivered stellar results: AUM grew 21.1% to Rs 2.25 lakh crores, PAT surged 48.73% to Rs 1,946 crores, NIM expanded to 9.02%. Gold loan branches expanded to 800-900, MSME to 600 branches. Product integration ongoing in phased manner - not all 3,000 branches will get all products, using hub-and-spoke model for MSME. Employee additions slowing as bench created.
Strategic Pivot to Profitability Over Growth
Despite delivering 21% AUM growth, management maintained 15% guidance for FY25, emphasizing bottom-line over top-line. Focus on granular, small-ticket, high-yielding products. ROE trajectory guided at 17%+ for FY25 and 18% by FY26 from current 16%+. CV growth expected at 11-12% with other products growing 20%+ to compensate. Used vehicle price increase contributed ~5% of 15% CV growth.
Macro Tailwinds and Rural Economy Optimism
India GDP grew 8.4% in Q3 FY24. S&P upgraded India's sovereign outlook to Positive. IMD forecast above-normal monsoon at 106% of LPA for 2024. Budget allocated Rs 11.11 lakh crores for CAPEX with focus on Eastern India and Rs 1.5 lakh crores interest-free loans to states. GST collections reached Rs 1.78 lakh crores in March, second highest ever.
Asset Quality Trajectory and ECL Model Updates
Gross Stage-3 improved to 5.45% from 6.21% YoY with credit cost at 2.06%. Stage-1 ECL rose from 3% to 3.3% due to annual PD/LGD reassessment incorporating day-stamping data and 5-year historical data. LGD improved from 41.45% to 38.08% QoQ. Write-offs at Rs 805 crores with incremental provisioning of Rs 456 crores. Management targets Stage-3 at 5% and net Stage-3 at 2.5% by FY25-end.