Eyeing takeover assets looking for refinance: Tourism Fin

The stock rallied 140 percent in last one-year but has slipped around 20 percent in the last one month this quarter. The topline in Q4 was muted and profits fell 23 percent to Rs 11 crore on back of low higher income as well as higher tax outgo.

Below is the transcript of SK Sangar’s interview with Sumaira Abidi and Reema Tendulkar on CNBC-TV18. Sumaira: For the first half of FY15 you’ll had done Net Interest Margin (NIMs) of 3.65 percent, can you tell us what the numbers stand at for Q4 as well as for the full year? A: Net interest margin for the full year is 3.36 percent; it has come down slightly because twice in the previous year we have reduced our base rate from 13.5 to 13 percent and another tranche from 13 to 12.75 percent. Sumaira: And NIMs for Q4?A: In Q4 the Net Interest Margins (NIMs) were around 3.36 itself. Reema: Overall it has been a rather flat year for the company, your revenues are just up about one percent, and in fact the NII was down 7.5 percent. Any particular reason why the company has been so cautious in growth and what is the outlook going to be for FY16?A: As far as the overall performance of the company in the previous year is concerned, it is because of the sluggish market conditions because the new hotel projects that have been few as far as the four stars, five stars are concerned. There have been projects in the three star category, amusement parks and resorts category where we have lent also. Our sanctions are 19 percent more than the previous year and similarly our disbursements also has grown by 43 percent over the previous year and balance sheet size has grown by 10 percent and there has been three percent growth in the net profit and earnings per share has also increased from 7.25 to 7.46. Sumaira: What were your provisioning numbers?A: We made a provision of Rs 4 crore last year and as far as the overall provision we are having much more provision than what is actually required mandatorily.Reema: You indicated in FY15 disbursements are up 43 percent and sanctions up 19 percent. In FY16 have you set out any internal targets?A: Yes, we have set out our internal targets and we will be growing at about 25 percent that is what we have decided and planned. Our budget we have taken for 25 percent plus growth in the sanctions as well as the disbursements will be more than that, somewhere around 40 percent more than this.Sumaira: The big mover in terms of a trigger for your stock has also been IFCI stake sale. In November when you spoke to us you denied that there was any such plan but has anything changed since then?A: Nothing IFCI at that time sold about two percent of stake and after that IFCI has not sold anything and they are sticking on to the overall shareholding of 39 percent in TFCI.Reema: What is the current dividend payout ratio? Has it gone up or is the company considering increasing it further?A: Yes, it has gone up. We gave 12 percent dividend last year and for the financial year 2014-15 the board has decided for paying 18 percent dividend. Out of that 10 percent interim dividend already has been paid in March itself and remaining eight percent will be paid. So this is six percent more than what we paid in the previous year.Sumaira: Your financing is in three parts, Greenfield or their projects which are approved by state government or you have your existing clients from new finance. Where are you seeing the maximum amount of traction, are you seeing things improving on the ground for this tourism industry?A: We are seeing things improving particularly in the three-star categories in tier I, tier II cities and apart from that the renovation and refurbishing from the existing clients also because every hotel requires a refurbishing after every three to four years. Apart from that we are looking for some good assets for takeover also.So these are the three dimensions from which we want to explore our business and the previous year also we have done it and this year also we will be doing it quite aggressively.Reema: Can you throw some colour on these assets that you might consider taking over?A: These will be the projects where the construction risk is over and there is a need for the refinancing to give us some extended repayment period. So these kinds of assets are available in the industry and we will be marketing for it and going in for it.