(i) Hero FinCorp Limited (HFCL) was incorporated in 1991 as Hero Honda FinLease Limited, due to change in the ownership of its parent, Hero MotoCorp Limited (Formerly known as Hero Honda Motors Limited), the company changed its name to Hero FinCorp Limited.
(ii) HFCL is engaged in the business of financing, leasing, bill discounting and other financial services. HFCL has a wholly-owned subsidiary – Hero Housing Finance Limited which is engaged in the business of providing housing loans.
(iii) In 2020, HFCLs retail business is present at 938 dealership and services are available at more than 4000 touch points spread across more than 1900+ cities, towns and villages. HFCL’s loan against Property, SME and Emerging Corporate Business is operating out of 50 locations on the non-retail segment and processes more than 800 applications every month.
(iv) Subsidiary of Hero FinCorp:
The Company has one wholly-owned subsidiary company viz. Hero Housing Finance Limited (“HHFL”). HHFL had started its lending operations from April 2018. It is an all-inclusive housing finance company providing hassle-free home loans PAN India which includes the following products to its customers: (i) Home Loans, (ii) Loan Against Property, etc.
HHFL has shown tremendous growth and touched loans of INR 556.75 crore during the first year of its operation in FY19.
During the year, Hero-Fin Corp had invested INR 200 crore in HHFL by subscribing to 20,00,00,000 equity shares of the face value of INR 10 each on rights basis.
(i) The Hero Motorcorp Limited (HMCL) holds 41.03% stake in Hero-Fin Corp.
(ii) Hero-Fin Corp’s revenue and net profit have grown by 47.85% and 49.01% over the past three years.
(iii) Hero-Fin Corp’s capital adequacy ratio is well above the RBI norm of 15% and stands at 19.03%.
(iv) ICRA and CRISIL Limited has assigned ratings for the various facilities availed by the company as AA+.
(v) Hero-Fin Corp derives financial, operational, managerial support from Group HMCL (Group HMCL includes Group investment companies and individual promoters).
(vi) Hero-Fin Corp has a strong presence of institutional investors like Credit Suisse (Singapore) Limited which holds 2.58% in the company and ChrysCapital which holds 10.56% stake in the company.
(i) In FY20, Hero-Fin Corp has become India’s No.1 two-wheeler financing company.
(ii) In FY19-20, Hero-Fin Corp has crossed a milestone of covering 50 Lakhs customers, network at 2000 locations, and registered a growth of 40% in loan disbursement as compared to last year.
(iii) Hero-Fin Corp has disbursed 17827 Crores of loans in FY19-20.
(iv) Total AUM as on 31.03.2020 stands at 25182 Crores.
(v) PAT at 310 Crores up by 16% as compared to 268 Crores last year.
(vi) Employees strength as on 31.03.2020 stands at over 7500.
(vii) Hero-Fin Corp has recommended a final dividend of Rs. 2.55/- per equity share for the financial year ended March 31, 2020.
1. Net Interest Income: The net interest income increased by 38% from ₹2,563 crore in FY22 to ₹3,546 crore in FY23. This growth suggests an improvement in interest-earning assets or an increase in interest spreads.
2. Other Income: The other income also witnessed a 38% increase, rising from ₹492 crore in FY22 to ₹680 crore in FY23. This growth may be attributed to factors such as fee income, commissions, or gains from non-core business activities.
3. Total Income: The total income of Hero-Fin Corp grew by 38.3% from ₹3,055 crore in FY22 to ₹4,226 crore in FY23. This significant increase indicates a robust performance in generating revenue from both interest and non-interest sources.
4. Operating Cost: The operating cost experienced a substantial increase of 54.3% from ₹1,374 crore in FY22 to ₹2,121 crore in FY23. This rise suggests higher expenses related to operational activities, such as expansion, inflation, or increased administrative costs.
5. Profit Before Provisioning: The profit before provisioning increased by 25.2%, rising from ₹1,681 crore in FY22 to ₹2,105 crore in FY23. This growth indicates an improvement in the company’s profitability before accounting for provisions.
6. Provisioning: The provisioning decreased by 33% from ₹1,800 crore in FY22 to ₹1,200 crore in FY23. This reduction indicates a decrease in the amount set aside for potential loan losses or contingencies, which could be a positive sign for improved credit quality or risk management.
7. Profit After Provisioning: The profit after provisioning turned around from a loss of ₹119 crore in FY22 to a profit of ₹905 crore in FY23. This significant improvement indicates the positive impact of reduced provisions on the company’s overall profitability.
8. Profit After Tax (PAT): The profit after tax (PAT) also displayed a substantial improvement, increasing from a loss of ₹194 crore in FY22 to a profit of ₹457 crore in FY23. This positive swing indicates a significant recovery in the company’s bottom line.
Overall, Hero-Fin Corp demonstrated strong financial performance in FY23 compared to FY22, with significant increases in net interest income, other income, total income, and profitability. The decrease in provisioning and the turnaround from losses to profits after provisioning are positive indicators, suggesting improved asset quality and risk management.
Hero FinCorp unlisted share price has gone up a lot in the past year, from Rs.980 to Rs.1060. Most of this shift up has happened in the last month. Profit after tax (PAT) and non-performing assets (NPAs) both went down, which is why the stock price went up.
Hero-Fin Corp has been able to show significant growth in its revenue, which has no doubt helped build investor trust and get the attention of the market. This growth shows that the business operations of the company have been going well, leading to more sales and a better overall financial situation. Positive sales numbers are often seen as a sign of a healthy and growing business, which makes investors happy and drives up the share price.
In the current unlisted market, the price of Hero-Fin Corp is Rs.1050 per share. The Book value of Hero-Fin Corp as of 31.03.2023 is Rs.415 per share. So, P/B is 2.35x which looks reasonably priced.
|Total Available Shares:||4000|
|Face Value:||₹ 10 Per Equity Share|
|Lot Size:||25 Shares|
|Current Unlisted Share Price:||₹ 1060 Per Equity Share|
|Revenue Growth %||158||72||26%||47%||46%||10%||10%||34%|
|Profit/Loss Before Tax (PBT)||124||200||215||413||480||90||-256||735|
|Profit/Loss After Tax (PAT)||81||130||145||268||310||71||-194||480|
|PAT Growth %||145||60||24.57||84%||16%||-77%||-373%||38%|
|Earnings per share (EPS)||12.11||15.38||15.63||25.97||27||5.78||-15.24||37.7|
|Book Value Per Share||228||321||394||396||380||412|
|Face Value (In Rs.)||10||10||10||10||10||10|
|Particulars (in Cr)||FY23||FY22||% Change|
|Net Interest Income||3546||2563||38%|
|Profit Before Provisioning||2105||1681||25.2%|
|Profit After Provisioning||905||-119||860%|
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