Ujjivan Financial Services Q4FY18 Concall Summary

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Financial Highlights

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  • Quarterly disbursement rose by 6% from previous quarter and 61% YoY to INR 2262 crores
  • The disbursement in the whole year grew by 13% in total to reach INR 8052 crores
  • The gross loan of the firm grew by 18.5 form March 2017
  • Firm through its operations has added 7.6 lakh new borrowers in the fiscal year
  • The share of MSE and housing finance saw twofold upsurge from the previous value of 2.4% to reach a figure of 7.3% , the major improvements came in the later part of the year
  • Net Interest income of the quarter grew by 24.8% from the previous quarter to reach INR 271.8 crores
  • Company healthy increase in the net margins which stood at 12.8 for the ending quarter up from 11.1% from the preceding quarter
  • Total credit cost of the year stood at INR 310.8 crores which was in line with the earlier predictions of the company
  • Both GNPA and NNPA of the firm has reduced since last quarter
  • The collection efficiency of the all the loans that had been passed since January 2017 is 99.6% which is good
  • Net Profit for the quarter stood at INR 64.9 crores which was considerably higher than the last quarter profits INR 29.3 crores
  • The ROA and ROE has improved since the last quarter and over the period of one year also since the last fiscal year
  • In coming three years time the company is eyeing for 33% business coming from the MFI and are expecting quarter of that to be secured loan


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  • The deposit base of the bank stood at INR 3772 crore as of March,2018 out of the total deposit base 3.7% was CASA and 11.3% were retail deposits. Company is optimistic of gaining more traction in the retail deposits
  • The company is eyeing for 25% of the total deposit base to come from the retail at the end of this fiscal year
  • Around 50% of the total loan advances in Q4 2018 were covered by the deposit base against only 36% in Q3 2018

Microfinance Business

  • The total microfinance disbursements in the Q4 stood at INR 1910 crores
  • The loan disbursed to the individuals grew by 31.6% and also the total disbursement grew by 1.8% over the last quarter
  • The company took cautious stance after the demonetization and only those branches were given go-ahead where the efficiency of collection were higher and had returned to normalcy
  • The business in the MFI domain would ramp up in the coming fiscal year

Cost of Funding

  • The average cost of funding the operations of the bank reduced by 140 basis point to remain at 9%, the improvement came as the strategic result of repayment of legacy loans and increasing the deposit base which was at considerably less rate of interest
  • However the cost to income ratio of the company has worsened from 53.1% in 2017 to 67.1% in 2018   
  • Company at the start of the fiscal year had legacy funding of 64% which they have repaid to some large extent
  • They are hopeful of repaying remaining 30% in the current fiscal year

Risk Management

  • Bank has invested heavily in the risk management practices in form of KYC and AML
  • They have a dedicated team of individuals who look after the risk management
  • The credit policies and risk management practices have been formulated keeping in mind the specific type of risk faced in the branches and clusters

Operating Expenses

  • Operating expense of in the year showed marginal increase in comparison to last year because most of the opened branches were of URC type and had very low cost impact
  • Also the company estimates of the operating costs at the beginning of the year matched significantly with the end year results
  • This year the cost to income ratio might increase by 3-4% owing to multiple branch openings


  •  More than 60% of the customers would be with the company for more than 2 years now and another 30% could be in between 1 to 2 years
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