Reliance Home Fin meets analysts’ expectations of a strong growth as profits jump 97% in FY18
Mumbai – 24 April 2018 Focus on affordable housing segment, lower-income group and strong operational efficiencies to maintain its asset quality has enabled Reliance Home Finance Ltd. (RHFL), a subsidiary of Reliance Capital Ltd., to show a stellar performance in the financial results for the year ended March 31, 2018.
The company witnessed a whopping 97 per cent increase in its profits for the year – the profit before tax (PBT) skyrocketed to Rs. 272 crore in the said period from Rs 138 crore reported on March 31, 2017. The company continued with its strong quarterly growth as well – its profits of Rs 90 crore during fourth quarter (Q4 FY18) was more than double from Rs 41 crore reported in the fourth quarter of FY17.
Terming the financial year gone by as a “great year” for the company, Mr. Ravindra Sudhalkar, ED & CEO, Reliance Home Finance said that the reason for the company to grow at a faster pace than the industry was because of its “continued focus on ensuring operating efficiencies and, emphasis on self-employed customers and affordable housing, both of which have a very high growth potential.”
Earlier in a report, Chola Securities had said that the company has managed to create a niche for itself by concentrating on higher yielding segments like the self-employed, low-income groups and the fast -growing affordable housing segment. Chola not only had predicted a strong growth ahead for the company but also had assigned a ‘BUY’ rating for the RHFL stock, with a 12-month target price of Rs 91.
The FY18 results of the company conform to the predictions made in the Chola report. RHFL showed a remarkable improvement of 47% in assets under management (AUM), which stood at Rs. 16,379 crore for the year ended March 31, 2018. Disbursements by the company also improved by 19% to Rs. 8,695 crore and total income rose by 46% to Rs. 1,671 crore in the said period.
The company’s focus to contain NPAs and focus on maintaining the quality of assets through various checks and measures has shown result. It has been maintaining a lower NPA ratio of 0.8% since the third quarter of the financial year 2017-18, lower than a NPA ratio of 1% in FY17.
RHF has digitalized various arenas in its loan processing — from sourcing to collections- which has helped in minimizing costs. It has been expanding its low-cost branch network to garner to the needs of low income groups. The company’s network expanded to 54 cities in FY18, catering to 125 locations, with over 45,000 client accounts.
All these factors have helped the company to lower the cost-to-income ratio to 38% in FY18 from 55% in FY17.
Reliance Home Finance is one of the country’s leading private sector home finance companies (HFC), incorporated in the year 2008. The Company’s equity shares got listed on Indian Stock Exchanges from September 22, 2017. RHFL provides a wide range of solutions like Home loans, Affordable housing loans, LAP and Construction Finance.
