Q3FY2025 Results of Hero Fincorp

Document Summary

Unaudited Financial Results of Hero FinCorp Limited for the third quarter and nine months ended December 31, 2024

Key Highlights:

• Board Meeting Outcome: The Board of Directors of Hero FinCorp Limited met on January 29, 2025, and approved the unaudited financial results for the third quarter and nine months ended December 31, 2024. This is in accordance with Regulations 51(2), 52, and 54 read with Part B of Schedule III of the SEBI Listing Regulations, 2015.
• Financial Results: The Board approved the unaudited financial results of the Company for the third quarter and nine months ended on December 31, 2024, along with the Limited Review Report of Joint Statutory Auditors, as reviewed and recommended by the Audit Committee.
• Other Approvals: The Board also approved the statement of disclosures pursuant to Regulation 52(4), the declaration regarding material deviations under Regulation 52(7) and 52(7A), and the security cover details of Non-Convertible Debt Securities as on December 31, 2024, under Regulation 54 of SEBI Listing Regulations.
• Publication of Results: The unaudited financial results as on December 31, 2024, will be published in the newspaper and made available on the company's website.
• Meeting Time: The board meeting commenced at 5:00 P.M. and concluded at 7:30 P.M.

Independent Auditors' Report:

• Deloitte Haskins & Sells LLP and M M Nissim & Co LLP reviewed the standalone financial results of Hero FinCorp Limited for the quarter and nine months ended December 31, 2024, as required by Regulation 52 of the SEBI Listing Regulations, 2015.
• The statement was prepared by the Company's Management and approved by the Board of Directors, following the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34").
• The review was conducted according to the Standard on Review Engagements (“SRE") 2410 issued by the Institute of Chartered Accountants of India ("ICAI").
• The auditors stated that nothing came to their attention that causes them to believe the statement does not comply with Regulation 52 of the Listing Regulations or contains any material misstatement.
• The financial results for the quarter and nine months ended December 31, 2023, and the year ended March 31, 2024, were reviewed/audited by the predecessor auditor, who expressed an unmodified conclusion/opinion.

Financial Performance (Standalone):

• Total Income: Total income increased from ₹1,998.17 Crore in December 31, 2023 to ₹2,306.41 Crore in December 31, 2024.
• Revenue from Operations: Total revenue from operations increased from ₹1,985.38 Crore in December 31, 2023 to ₹2,290.20 Crore in December 31, 2024.
• Expenses: Total expenses increased from ₹1,712.37 Crore in December 31, 2023 to ₹2,318.29 Crore in December 31, 2024.
• Profit/Loss Before Tax: Profit before tax was ₹285.80 Crore for the nine months ended December 31, 2023, compared to loss before tax of ₹(11.88) Crore for the nine months ended December 31, 2024.
• Net Profit/Loss After Tax: Net profit after tax was ₹200.43 Crore for the nine months ended December 31, 2023, compared to loss after tax of ₹(32.43) Crore for the nine months ended December 31, 2024.

Key Financial Ratios:

• Debt Equity Ratio: 8.01 (December 31, 2024).
• Gross Non-Performing Assets (NPA): 5.36% (December 31, 2024).
• Net NPA: 2.49% (December 31, 2024).
• Provision Coverage Ratio: 55.02% (December 31, 2024).
• Capital to Risk Weighted Assets Ratio: 16.56% (December 31, 2024).
• Liquidity Coverage Ratio: 261.98% (December 31, 2024).

Other Key Points:

• Hero FinCorp Limited is a Non-Banking Financial Company registered with the Reserve Bank of India ('the RBI').
• The Company has listed Commercial Papers on the National Stock Exchange (NSE).
• During the quarter ended December 31, 2024, the Company issued and allotted 1,06,085 equity shares under the Employee Stock Option Scheme.
• Details of loans acquired and transferred through assignment during the nine months ended December 31, 2024, are provided. The company has transferred 2,95,212 loans which were written off, having an amount outstanding of Rs. 1,874.73 crore, for a sale consideration of Rs. 49.85 crore.
• The Board of Directors of the Company and its Shareholders have approved a resolution towards listing of equity shares through an Initial Public Offer ("IPO") and have filed the Draft Red Herring Prospectus with SEBI.
• The Company operates primarily in the business of financing and has no separate reportable segments.
• During the year ended March 31, 2023, the Company had allotted 3,63,63,636 Compulsorily Convertible Preference Shares (CCPS) (comprising of 1,70,36,363 Class A CCPS and 1,93,27,273 Class B CCPS) of face value of 550 each aggregating to 2,000 crore. In accordance with Ind AS 32 'Financial Instruments: Presentation', the Company had classified these CCPS as a financial liability and presented it in accordance with Schedule III division III of the Companies Act, 2013 (disclosed under the head of Subordinated liabilities). These CCPS are subsequently measured at fair value through profit or loss as per Ind-AS 109 requirements.
• The auditors have provided a certificate regarding the maintenance of security cover for the listed non-convertible debt securities as at December 31, 2024. The company maintained hundred percent security cover or higher security cover as stated in Debt securities trust deed in respect of listed secured Debt securities of the Company outstanding as at December 31, 2024.
• Utilization of issue proceeds. For instance, for the INE957N08169, the funds utilized (55 cr) were as per the Prospectus/Offer document without any deviation.

Disclaimer: Previous figures have been regrouped/reclassified, wherever necessary, to conform to the current period/year's classification.