Any current/future new fundraising through debt or equity?

The company has a robust and strong liability pipeline planned for the financial year to support loan book growth. Current borrowings stand at Rs. 371.51 crores from 6 banks and 11 financial institutions, including NHB refinance facilities and NCDs. Average borrowing cost is around 12.2%, with discussions on reducing it below 12% through future funding. No debt securitization has been done in this quarter. NHB refinance is expected in H2 of the year, but the quantum is yet to be finalized. There is no explicit mention of immediate equity fundraising. For listing on NSE, the company needs to ma

Any current/future capex/capital investment/strategic investment?

The company is focused on investing in capacity creation through expansion of branch network, recruitment of quality manpower, and digitization of processes. There is an emphasis on strengthening operational capabilities by investing in human resources, branch infrastructure, and technology. They have implemented an upgraded lending suite providing end-to-end home loan processing and receivable management functionalities to improve productivity and credit management. The capital investment is aimed at supporting growth initiatives and maintaining high asset quality standards. No specific menti

Future growth expectations in sales/revenue/volumes?

Star Housing Finance aims to continue strong growth in assets under management (AUM), targeting to reach around Rs. 700 crores in the near future. The company maintains a steady disbursement run-rate of Rs. 15-20 crores monthly, projecting around Rs. 240-250 crores for the full financial year, consistent with prior year levels but with operational leverage focus. H2 is traditionally stronger than H1 in lending activity, with expectations of higher disbursements post-Diwali due to increased market activities. Growth strategy emphasizes increasing sales staff productivity (100 relationship

Future growth expectations in earnings/operating earnings/profits/EPS?

Star Housing Finance Limited aims to sustain strong AUM growth, having crossed ₹500 crore with 62% YoY increase. Focus on steady disbursement run rate of ₹15-20 crore per month to reach ₹600-700 crore AUM by FY25. Cost of funds targeted to reduce below 12%, potentially to ~11.75%, improving margins. Expected NIMs around 450-500 bps; margin accretion of 25-36 bps anticipated next fiscal. Profit after tax grew 47.83% YoY in H1 FY25; management confident of continuing momentum. Growth driven by direct sales and co-lending partnerships; portfolio seasoning and credit quality are key priorities. Lo

Current/ Expected Orderbook/ Pending Orders?

The company mentioned having a "blend of undone limits and pending compulsions" in their pipeline, indicating existing pending orders or undrawn credit lines to support growth (Page 3). They highlighted a "strong liability pipeline" planned according to the business plan for the financial year, which provides confidence to execute asset growth (Pages 3 and 4). Growth and disbursement momentum is expected to continue with a steady run rate of around Rs. 15 to 20 crores per month, targeting total disbursements around Rs. 240 crores for the year (Pages 6, 8). The ability to sustain or improve gro

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Star Housing Finance LtdQ3 FY24Finance

Star Housing Finance Ltd Q3 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹6.6P/E: 8.8Market Cap: ₹59 CrSector: Finance

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Star Housing Finance aims to continue strong growth in assets under management (AUM), targeting to reach around Rs. 700 crores in the near future.
→The company maintains a steady disbursement run-rate of Rs. 15-20 crores monthly, projecting around Rs. 240-250 crores for the full financial year, consistent with prior year levels but with operational leverage focus.
→H2 is traditionally stronger than H1 in lending activity, with expectations of higher disbursements post-Diwali due to increased market activities.
→Growth strategy emphasizes increasing sales staff productivity (100 relationship officers targeting 2.5-3.5 loans per month).
→Star Housing Finance plans to cautiously scale operations in line with funding availability and seasoning of the loan book to enable rating upgrades and sustainable long-term growth.
→Emphasis on expanding branch network, recruitment, and digitization underpin future growth.

Margin guidance

Category 3

→Star Housing Finance Limited aims to sustain strong AUM growth, having crossed ₹500 crore with 62% YoY increase.
→Focus on steady disbursement run rate of ₹15-20 crore per month to reach ₹600-700 crore AUM by FY25.
→Cost of funds targeted to reduce below 12%, potentially to ~11.75%, improving margins.
→Expected NIMs around 450-500 bps; margin accretion of 25-36 bps anticipated next fiscal.
→Profit after tax grew 47.83% YoY in H1 FY25; management confident of continuing momentum.
→Growth driven by direct sales and co-lending partnerships; portfolio seasoning and credit quality are key priorities.
→Long-term strategy emphasizes operational leverage and controlled loan book seasoning to support rating upgrades and sustainable profit growth.

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Fundraise plans

Yes

→The company has a robust and strong liability pipeline planned for the financial year to support loan book growth.
→Current borrowings stand at Rs. 371.51 crores from 6 banks and 11 financial institutions, including NHB refinance facilities and NCDs.
→Average borrowing cost is around 12.2%, with discussions on reducing it below 12% through future funding.
→No debt securitization has been done in this quarter.
→NHB refinance is expected in H2 of the year, but the quantum is yet to be finalized.
→There is no explicit mention of immediate equity fundraising.
→For listing on NSE, the company needs to maintain a minimum net worth of Rs. 75 crores for 3 successive years, which is a prerequisite before considering such a step.
→The management focuses on building a diverse funding base to sustain growth and operations under changing economic conditions.

Order book

→The company mentioned having a "blend of undone limits and pending compulsions" in their pipeline, indicating existing pending orders or undrawn credit lines to support growth (Page 3).
→They highlighted a "strong liability pipeline" planned according to the business plan for the financial year, which provides confidence to execute asset growth (Pages 3 and 4).
→Growth and disbursement momentum is expected to continue with a steady run rate of around Rs. 15 to 20 crores per month, targeting total disbursements around Rs. 240 crores for the year (Pages 6, 8).
→The ability to sustain or improve growth depends on successfully securing funding and converting sanctioned facilities into utilization (Page 10).

Capex plans

Yes

→The company is focused on investing in capacity creation through expansion of branch network, recruitment of quality manpower, and digitization of processes.
→There is an emphasis on strengthening operational capabilities by investing in human resources, branch infrastructure, and technology.
→They have implemented an upgraded lending suite providing end-to-end home loan processing and receivable management functionalities to improve productivity and credit management.
→The capital investment is aimed at supporting growth initiatives and maintaining high asset quality standards.
→No specific mention of large-scale capex or strategic investments like acquisitions or joint ventures was made in the call.
→The approach is to build operational leverage slowly while cautiously calibrating growth and funding moves.

How does Star Housing Finance Ltd rank vs peers in Finance?

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