Expect Rs 800cr sales growth, over 3% NIM in FY16: TFCI

Mangalam: Could you give us a sense of the first two months of this quarter, what has been the loan book growth, growth in sanctions and growth is disbursals?

A: In Q1 we are likely to have sanctions of more than Rs 125 crore and apart from that the disbursements will also be touching more than Rs 70 crore.

Mangalam: How much did loan book grow by?

A: Loan book will grow by Rs 50 crore because we are anticipating some repayments. So the loan book will grow by about Rs 40-50 crore and that will give us growth in Q1.

Reema: I was reading one brokerage report on the company and they said that they are expecting disbursements of close to about Rs 800 crore for FY16. If you have done a disbursement or you are expected to do a disbursement of Rs 70 crore in Q1, if I take that as an average, you are still likely to reach only about Rs 280 crore for the full year. Give us a realistic expectation of what the disbursement will look like for the full year, FY16?

A: I would like to say that normally Q1 is a subdued quarter but apart from that as on date we are having more than Rs 400 crore of sanctions which are waiting disbursements. The new sanctions which we will be doing in the current financials are targeted at over Rs 1,100 crore during this financial year. With this new sanction, as well as Rs 400 crore sanctions on hand, we are hopeful that we will be touching the targeted growth of Rs 800 crore.

Mangalam: We also understand that of the Rs 48 crore of gross NPAs that you have, Rs 46 crore come from one corporate house of which the assets you have in your possession, we understand one of them is a commercial plot of Gurgaon highway, the other one is a 5-star. You were looking to monetise that so has that been done. What is the update on that?

A: That process is going on and we are hopeful that in the near future we will be able to monetise that. There are two accounts and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) action is going on, on both these accounts and we are hopeful that shortly we will be able to recover it.

Mangalam: Can you give us any timeline on that?

A: Another three-four months.

Reema: In the previous quarters there were some loans which didn\\'t get sanctioned because the existing banks of your clients offered them lower rates and also extended their repayment schedule, so some of your existing loans couldn't get refinanced. Is that the case which is happening even in Q1?

A: In Q1 it is not so because that was in December quarter. We had sanctions of about Rs 150 crore which could not be taken over because their existing lenders gave them better terms and that could not come to us. But as of now, we are not having this kind of issues but going forward in this current financial year I see that more of the takeovers will help us because if existing lender restructures it, it will become non-performing asset (NPA). So in that case the better option of refinancing those assets will be a better choice. So we are anticipating that more of the takeover loans will happen during this year.

Mangalam: We also understand that you have cut your base rate twice in the last quarter. Now with the RBI having cut the repo rate by another 25 bps, do you see further room for base rate cut?

A: Not immediately but going forward if further rate cut is there and we are able to raise the bonds at low rate, which we are in the process of raising bonds and I am hopeful that with the reduction of the rate of interest the bond rate has come down and we will also be able to raise the bonds at lower price and then correspondingly we will think of reducing the base rate further.

Mangalam: In that case what would be your net interest margins (NIMs) like because your NIMs did narrow in last quarter?

A: That is true but going forward I am sure that we will be able to maintain our NIMs 3 percent plus because if we reduce our base rate but simultaneously we will be able to reduce our cost of fund also. We are availing some line of credit from the banks where already interest rate has come down. So correspondingly we will be able to bring down our cost of funds also and we will be able to maintain the NIMs 3 plus.

Reema: There was a lot of thrust from the government on tourism; there was talk about e-visa etc but has the situation on the ground improved for company like yours vis-à-vis a year ago?

A: Certainly there is an improvement because foreign tourist arrival has improved; we are also seeing good improvement in middleclass domestic travelling and lot of hotel and resort demand is there and as a result the occupancies has started improving and once the occupancy starts improving the ARRs will also improve. So going forward looking at the government efforts and tourism ministry has also come out with a draft tourism policy which is also encouraging tourism to a great extent and with the improvement in the economy the business travel will also happen and this will certainly bring better year as compared to the previous years.