Can Fin Homes Q2 Disbursements Drop 25% on IT Rollout

Q2 FY27 disbursements stood at ₹2,375 crores, significantly lower than planned due to IT system implementation impact.
Disbursements netted off ₹29 crores due to NHB guidelines regarding cancellation of demand drafts (₹28 crores during quarter + ₹0.19 crores post-quarter-end).
Project Tejas (IT transformation) completed nationwide rollout in phases:
July: 11 branches (5 old + 6 new)
August: 75 old branches + 14 new branches
September: 77 old branches
October 1: 93 remaining old branches + 5 new branches
Branches undergoing IT migration experienced 70-75% monthly disbursement drop during implementation month, recovering to 80-90% of previous levels in subsequent month.
Management maintains full-year disbursement guidance of ₹13,000 crores and AUM growth guidance of 13-14%.

Received NHB sanction for ₹1,350 crores refinance with blended cost expected between 6.6-6.7%.
Undrawn sanctions stand at ₹2,500 crores.
65% of liabilities are floating rate (mostly repo-linked with monthly reset, some T-bill linked with quarterly reset).
Implemented 10 bps lending rate hike effective October 12, 2026, for both new and existing floating rate customers (87% of book).
Target to maintain NIM at 3.75%+ and spread at 2.75%+.
LCR ratio increased due to reduction in short-term borrowings from 26-27% to 12% of total borrowings.

25 new branches opened FY27 year-to-date (of 28 planned).
Sales team contributed ₹560 crores disbursements in H1 with ~90 people.
Plan to increase sales team strength from 90 to 150 people by leveraging IT efficiency gains.
Target 20% of disbursements from sales team in FY28 (₹2,500+ crores of ₹16,000 crores guidance).

Q2 prepayments at ₹1,795 crores vs ₹1,857 crores in Q1 FY27.
July prepayments high at ₹655 crores, but reduced to below ₹600 crores in August and September.
Expect prepayment reduction as interest rate gap narrows (company passed on only 50 bps of previous 125 bps rate cuts).

Telangana Section 22 implementation caused processing delays as sub-registrar verification required before documentation.
Process modified to require upfront verification to avoid wasted processing effort.
Karnataka disbursements stabilized at ₹230-250 crores monthly.

FY28 disbursement guidance: ₹16,000 crores (22% growth)
FY28 AUM growth guidance: 15%+
Digital sourcing target: 10% of business by Q4 FY28
Planning to draw NHB sanctions from Q3 FY27 instead of Q4 to benefit from lower rates

LCR ratio increased due to strategic reduction in short-term borrowings and smaller borrowing tranches.
Maintain HQLA of approximately ₹2,300 crores.

Company conducts 12-scenario stress tests quarterly covering delinquency and interest rate impacts.
Results presented to Risk Management Committee.

Management believes 25-50 bps rate increases are "non-event" for housing demand due to minimal EMI impact.
Company typically passes on 40-50% of repo rate changes to customers.

Acknowledged potential impact on construction activity in drought-affected regions but considered early to quantify.
May increase focus on LAP or top-up loans as short-term strategy if needed.

Expected operational efficiencies include automated processes, digital sourcing capabilities, and staff reallocation to sales.
Entire RFP package implemented completely as of October 1, 2026.

Scheme progress slower than CLSS-1 due to longer processes.
Limited benefit due to company's smaller presence in states with current housing shortfall (Odisha, Bengal, Bihar, UP).

New branches typically take 18-24 months to reach productivity of 5 cases per staff per month.
Branch categorization changes (small/medium/large) trigger staff additions as portfolio grows.

Bank borrowings reprice monthly (repo-linked) or quarterly (T-bill linked).
NHB PLR changes typically delayed versus market rates.
No immediate need for NCD issuance as already compliant with 25% market borrowing requirement.