Overall growth has come from MFI sector: HP Singh, CMD, Satin Creditcare

In this interview with ET Now, HP Singh, CMD of Satin Creditcare talks about Q1 results and the outlook for the coming quarters. Edited excerpts:

Your profits have doubled and NII growth has also been very strong at 84 per cent. What has led to strong performance this quarter?
It has been an aggressive quarter for us as compared to corresponding quarter last year. Our profits have doubled from about Rs 18 crores to about Rs 36 crore. It has been an expansion and consolidation mode in the first quarter.

After impressive performance in the last quarter of FY16, we have increased our network to about 100 more branches. We have increased our employee strength and now have about 1000 more employees. That is one of the reasons that we have had 62 per cent year on year growth from the first quarter of the last year in terms of our AUM. We have increased our clients from about 1.8 million in FY16's last quarter to about 2 million now.

What were your Q1 margins in this quarter and what are your margin drivers?
Margin driver has been our loan officers' operating efficiency in how they handle the number of clients. We have also moved projects into the cashless scheme. Close to 25 per cent of our collections are now cashless which leads to operating efficiency in our deliverance. That is probably one of the reasons which has given us impressive performance in profitability.

Talking about your loan book, which segments contributed most to the growth between MFI, SME as well as LAP?
Our overall growth has been majorly in the MFI sector. The SME sector is fairly new as a vertical to us. We have started SME just about four to five months back. Majorly the growth is coming in from microfinance sector. We have also gone a little bit deeper into newer states like Gujarat and Maharashtra and have also picked up a little bit more in our deliverance of loan in Rajasthan.

What is your gross and net NPA in Q1, are you seeing a rise in gross NPAs going forward?
They have been steady in the first quarter. I think they will remain fairly steady over the next three quarters also.

What is the stress you see at NPAs and the provisions as you shift to 90 DPD?
We are focused on the 90 DPD right now. The shift has already happened for us and even after the shift the NPAs have remained steady. Looking at the general outlook and considering that the monsoon has been good enough, I think NPA will not have any kind of stress in the next few quarters.

What is your catch your net interest margin number at?
Our NIM has expanded to about 12.1 per cent from over 9.9 per cent.

What is the loan growth outlook percentage wise?
It has been a 62 per cent growth on the corresponding quarter of the previous year. We have given a guidance of 60 per cent growth from FY16 to FY17.