Net Leasing Occupancy Credit quality Overall impact on AFL portfolio

Positive Stable Stable Positive

Commercial Real
Estate  Net leasing projected to grow 10-15% in fiscals 2023 and 2024.  Stable financial position of borrowers in the sector reduces
 Demand improves as employers embrace flexible work arrangements. the risk of default.
 Debt to EBITDA ratio: 4.6x in fiscal 2023, 4.4x in fiscal 2024.  Adequate cash flows of borrowers ensure the sustainability
 Debt service coverage: 1.7-1.8x in fiscals 2023 and 2024. of loan repayments.

Revenue Visibility Profitability Credit quality Overall impact on AFL portfolio

Positive Stable Positive Positive

Residential Real  Sales of realtors expected to grow 15-17% in fiscal 2023 and 8-10% in fiscal 2024.
Estate  Large, listed realtors projected to outpace the sector, growing -25% in fiscal 2023  Increase in residential prices may positively impact collateral
and 10-15% in fiscal 2024. values, reducing credit risk.
 Growth in fiscal 2024 to moderate due to affordability decline from increased  Moderation in growth due to affordability decline could
capital values and interest rates. affect borrowers' capacity to service debt.
 Residential prices expected to rise due to increased raw material, labor, and land
costs, along with favorable demand-supply dynamics.

Revenue Visibility Profitability Credit quality Overall impact on AFL portfolio

Stable Stable Stable Stable

Steel  Healthy volume growth of 7-8% expected in fiscal 2024 due to infrastructure push.
 Average realizations may drop by approximately 10% on-year for fiscal 2024.
 Rollback of export duty in the second half of fiscal 2023 may increase exports in fiscal
2024.
 Raw material prices expected to remain high, resulting in ongoing working capital
requirements.
 Lower average realizations may affect profitability and
repayment capacity of primary steel producers.
 Export growth provides additional revenue potential for
primary steel producers.
 Revenue Visibility Profitability Credit quality Overall impact on AFL portfolio
Positive Positive Stable Positive

Hospitals  Positive revenue growth outlook for larger hospitals, driven by high occupancy
and bed expansions.  Revenue growth in larger hospitals indicates increased demand
for healthcare services and potential loan opportunities.
 Smaller hospitals focused on optimizing occupancy and sustaining revenue per Higher operating margins, supported by healthy occupancy and
bed. 
Operating margins expected to remain favorable, supported by healthy occupancy improved ARPOB, enhance the creditworthiness of hospitals in
 the sector.
and ARPOB.
 Increased capex indicates expansion and improvement in infrastructure.

Revenue Visibility Profitability Credit quality Overall impact on AFL portfolio

Stable Positive Stable Positive

Education  Strong revenue growth driven by higher enrollment and fee hikes.  Increased enrollment and fee hikes indicate higher demand
services  Stable operating profitability due to cost-cutting and revenue growth. for education loans.
 Continued investment in capex to enhance educational facilities.  Steady operating profitability and revenue growth support
 Balance sheets of education institutes provide a cushion to absorb capex. the creditworthiness of borrowers in the sector.

Revenue Visibility Profitability Credit quality Overall impact on AFL portfolio

Stable Positive Stable Stable

Pharmaceutica  Steady domestic demand and growth opportunities in semi-regulated and untapped
ls markets.
 Export challenges in regulated markets may require careful risk assessment and  Export challenges in regulated markets may require careful
management. risk assessment and management.
 Pricing pressure in the US market could impact profitability and require strategic pricing  Pricing pressure in the US market could impact profitability
and product diversification. and require strategic pricing and product diversification.
 Incentives from the PLI scheme can drive investment and expansion in the sector.
 Continued dependence on China may impact supply chain resilience.