SRG Housing Q2 FY25 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 2
Margin
Category 3
Fundraise
Yes
Order
Yes
Capex
Yes
3 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 2- The company aims to expand to 100 branches by March FY25 and maintain them for 2-3 years to build a strong loan book.
- Disbursement targets are INR 350 crore for FY25 and around INR 400-450 crore for FY26.
- AUM is expected to grow to around INR 750 crore in FY25 and cross INR 1,000 crore in FY26.
- The company envisions growing its business up to 5 times in the next 5 years through strong rural housing finance focus.
- Expansion will prioritize profit with lower expenses and efficient operations rather than merely increasing AUM.
- Pan-India team establishment and strategic hiring of experienced personnel support this growth.
- With government rural development schemes and improved rural incomes, the demand in target markets is expected to grow significantly.
See what SRG Housing management said on margin guidance — free account, 30 seconds.
Fundraise plans
Yes- SRG Housing Finance plans to raise an additional INR 50 crores in equity by March to support opening new branches and business expansion.
- The INR 50 crore equity raise is primarily for funding branch operations and to create equity for leveraging and growing the loan book.
- There are no immediate plans mentioned for further debt fundraising.
- The fundraising aligns with the goal to reach 100 branches by March and then consolidate the loan book from these branches before further expansion.
- The company already completed a fundraise of INR 50 crores in Q2 FY25, with 40% from banks and the rest from financial institutions.
- No recent credit rating updates after December 2023; the company has an annual review process with CARE credit rating agency.
See what SRG Housing management said on order book — free account, 30 seconds.
Capex plans
Yes- SRG Housing Finance plans to raise an additional INR 50 crore by March to fund expansion.
- This capital raise will support opening new branches, aiming to reach 100 branches by March FY25.
- The raised equity is primarily for leveraging and growing the loan book, not just for branch setup.
- Branch setup cost is estimated at INR 3-4 lakhs per branch.
- Post reaching 100 branches, the company intends to pause branch expansion for 2-3 years to focus on building a strong loan book.
- Strategic emphasis is on expansion with a strong team and infrastructure.
- The company is forming a pan-India team with experienced hires to support growth and scalability.
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Margin guidance
Category 3- SRG Housing Finance aims for significant business growth, potentially scaling 5 times over the next 5 years.
- Expansion is focused on rural housing finance, with improved rural incomes and infrastructure driving demand.
- The company plans to raise INR 50 crores by March FY25 to support branch expansion, targeting 100 branches.
- Operating expenses will be higher during this expansion phase but are expected to normalize to 60-65% cost-to-income ratio after new branches stabilize.
- Profit before tax increased to INR 8.33 crores in Q2 FY25 from INR 6.58 crores in Q2 FY24, signaling profitability growth.
- Net interest margin stands at 2.77%, with a healthy spread of 10.83%.
- EPS rose to INR 4.87 in Q2 FY25 from INR 4.05 in Q2 FY24, reflecting earnings growth.
- The management emphasizes realistic, achievable targets and anticipates visible results of growth within the next year.
Order book
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What SRG Housing's management said in earlier quarters
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