Research Reports

Hero FinCorp Limited :


Hero FinCorp Limited was incorporated in 1991 as Hero Honda Finlease. Due to a change in the ownership of the parent Hero Motocorp Limited, the company changed its name to Hero FinCorp Ltd.

It is engaged in the business of financing, leasing, bill discounting and other financial services. They have established a presence at over 3100 touch points spread across 1700 plus locations.

The Company had an excellent year aided by strong volume growth across lines of business. During FY 2018-19, the Company had taken various measures to strengthen its business model and continue its growth momentum such as the launching of various new products and variants.

The business is present at close to 2000 retail financing touch-points across Hero MotoCorp's network, and have partnered with over 2000 satisfied corporate clients. Going forward, we plan to continuously expand our offerings and geographic presence, whilst offering class-leading financial services to all sections of our society.

Hero FinCorp Unlisted Shares

About the Company:

  • The company is currently engaged in consumer finance businesses and commercial lending. Consumer Finance includes financing Hero MotoCorp Two Wheeler, Loyalty Customer Loans (top-up loans for existing customers) and providing Loans against a property.
  • On the commercial lending side, it provides Indian corporates with a wide portfolio of financing products which include working capital loans, machine loans among others. It is a captive finance company of Hero MotoCorp Ltd.
  • The retail business is present at 938 dealerships at the end of Financial Year 2020. The services are now available at over 4,000+ touchpoints across 1,900+ cities. At present, the Company is operating out of 50 Locations in the non-retail segment.
  • Hero FinCorp Limited (HFCL), an associate company of Hero MotoCorp, is an Indian Non-banking financial company (NBFC). The Company is engaged in the business of financing, leasing, bill discounting and other financial services.
  • HFCL was incorporated in 1991 as Hero Honda FinLease Limited, due to a 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.

Industry Opportunities

  • Home Financing Companies reported a 13-15 per cent credit growth in FY2018-19, which is expected to inch up to 14-16 per cent in FY2019-20.
  • Gross non-performing assets (NPAs) of the home loan segment will increase to up to 1.3 per cent in the medium term from the present 1 per cent level.
  • Housing Finance Companies (HFCs) could clock 10-12% growth in FY21 on the back of spurt in loan growth, co-lending with banks and the steady pace of loan securitization coupled with lowering dependency on short term borrowing.
  • Retail loans, including home and credit card debt, are expected to become the largest segment for the Indian banking industry, ahead of industrial credit and corporate loans.
  • Retail Loans are estimated to double up to INR 96 trillion in the next 5 years in FY24 from INR 22 trillion accounted in FY18.
  • Mortgage loans market-normal & low-cost housing and loan against property-is expected to double to INR 46.1 trillion in FY24.
  • Unsecured loans-- personal loans and credit cards to more than double to INR 13.8 trillion in FY24.
  • Loans to MSMEs are likely to more than double to INR 13.2 trillion.
  • Vehicles-commercial vehicle, four and two-wheeler-loans are tipped to nearly double to INR 17.5 trillion

Financial Highlights

Revenue

  • The total income has shown an impressive growth of 49% from INR 2,493 crore in FY 2018-19 to INR 3,703 crore in FY 2019-20.

Profit After Tax (PAT)

  • The PAT registered an increase of 16% from INR 268.37 crore in FY 2018-19 to INR 310.17 crore in FY 2019-20.

Earnings Per Share (EPS)

  • The EPS of the Company has increased from INR 23.78 per share to INR 24.18 per share in the FY 2019-20.

Rationale

  • In FY20, Hero-Fin Corp has become India’s No.1 two-wheeler financing company.
  • 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.
  • The receivables under financing activity including leasing portfolio have grown by 19% from INR 19,736 crore in FY 2018-19 to INR 23,389 crore in FY 2019-20.
  • The Company recommended a final dividend of 25.50% (INR 2.55/- per equity share) for the financial year ended March 31, 2020.
  • The Company continued to fulfil all the norms and standards laid down by the RBI pertaining to non–performing assets, capital adequacy, statutory liquidity assets etc. As against the RBI norm of 15%, your Company maintained a Capital Adequacy Ratio (CAR) of 19.55% as of March 31, 2020, which is well above the RBI mandated norm of 15%.
  • Loans including leasing portfolio grew by 19% from INR 19,736 Crore on March 31, 2019, to INR 23,389 Crore on March 31, 2020.
  • A total of over INR 13.5 Lakh of two-wheeler loans were disbursed in the FY 2019-20 (INR 12 Lakh in FY19) amounting to a total active customer base of around 3 Million and an asset book of approx. INR 7,956 Crore.
  • In FY20, INR 7,720 crore worth of loans were disbursed during the FY 2019-20. The Company closed the year with an impressive SME & Corporate asset book of INR 11,875 crore.

Download our Research Report on Hero FinCorp Limited :

Invalid number

Go to Website - www.herofincorp.com