India Shelter Finance Corporation Limited — Investor Meet, 13-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** India Shelter Finance Corporation Limited reported a solid financial performance for Q3FY25, with an AUM of ₹7,619 Cr, reflecting a 36% YoY growth and an 8% QoQ increase. Total income increased by 39% YoY, driven mainly by AUM growth. Profit After Tax (PAT) reached ₹96 Cr, growing 54% YoY and 7% QoQ, with a return on assets (RoA) of 5.5% and return on equity (RoE) of 15.1%.

**Future Outlook and Growth Drivers:** Management expressed confidence in sustaining AUM growth of 30%-35% over the next few years, bolstered by a robust housing demand, particularly in Tier-2 and Tier-3 cities. 42 new branches opened thus far this fiscal year are expected to enhance outreach and growth.

**Order Book and Operational Updates:** The company sourced 97%-98% of its business in-house. The loan-to-value (LTV) ratio is conservative at 52%, with 100% of the loan book secured. The average loan ticket size remains around ₹10 lakh.

**Analyst Q&A Insights:**

- **Revenue and Profitability:** Analysts inquired about asset quality, with management reporting a slight uptick in 30-day past due (DPD) rates to 3.7%. However, management remains optimistic about reversing this trend in the coming quarters.

- **Market Position and Competitive Landscape:** There are challenges related to balance transfer (BT) rates around 5.5%-6%, with management attributing this to competitive pressures. Efforts to retain customers include proactive engagement practices.

- **Operational Challenges or Risks:** Management noted that credit costs have remained stable at 50 bps, with no immediate concerns about asset quality despite broader market stresses.

- **Capex and Capital Allocation:** Future expenditure aligns with branch expansion and planned technology upgrades to enhance operational efficiency. Guidance includes maintaining Opex to AUM at current levels.

**Strategic Focus Areas:** Key themes include focus on Tier-2 and Tier-3 developments and customer engagement to manage asset quality. The management’s optimistic outlook and ongoing strategies indicate a commitment to solid growth trajectories.

**Investor Insight:** India Shelter Finance Corporation's strong financials paired with sound growth strategies suggest a positive investment sentiment, leaning towards a 'buy' position given the potential upside alongside manageable risks in asset quality management.