Ladies and gentlemen, good day and welcome to the Q4FY25 Earnings Conference Call of Cholamandalam Investment and Finance Company Limited, hosted by Kotak Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nischint Chawathe from Kotak Securities. Thank you, and over to you, Nischint. Good morning, everyone. Welcome to the Earnings Conference Call of Cholamandalam Investment and Finance Company Limited. We have the senior management with us today to discuss the 4QFY25 performance of Chola and share industry and business updates. Let me welcome Mr. Vellayan Subbiah, Chairman and Non-Executive Director, Mr. Ravindra Kundu, Managing Director and CEO, and Mr. Arul Selvan, Chief Financial Officer. I would now like to hand over the call to Vellayan for his opening comments, after which we'll take the Q&As. Nischint, thanks so much, and good morning, everybody. We'll just go through results for the quarter and the year-end date: 31 March 2025. Disbursements were at INR 26,417 crore for the quarter, which is up by 7%, and INR 1,86,917 crore for the year, which is up by 14% year-on-year. The total AUM stood at INR 1,99,876 crore, which is up by 30% year-on-year. The net income for the quarter was at INR 3,758 crore, which is up by 29% year-on-year, and for the year, it's at INR 13,570 crore, which is up by 36% year-on-year. The PAT is at INR 1,267 crore for the quarter, which is up by 20%, and INR 4,259 crore for the year, which is up by 24%. Just to give you some quick performance highlights, the vehicle finance disbursements were at INR 14,430 crore in Q4, as against INR 12,962 crore in Q4 2024, which is a growth of 11%. Disbursements for the year were at INR 53,922 crore, as against INR 48,348 crore in the previous year, which is a growth of 12%. For LAP, loan against property, we disbursed INR 5,539 crore in the quarter, as against INR 4,273 crore, which is a growth of 30%. For the year, disbursements were at INR 17,913 crore, as against INR 13,554 crore, which is a growth of 32%. The home loan business disbursed INR 1,983 crore for the quarter, as against INR 1,747 crore, which is a growth of 14%. For the year, it is at INR 7,404 crore, as against INR 6,362 crore, which is a growth of 16%. SME disbursed INR 1,733 crore, as against INR 2,136 crore, and the disbursements for the year were at INR 7,763 crore, as against INR 8,106 crore. The drop in disbursement is due to a conscious decision to slow down on lower ROTA products such as supply chain finance. Consumer and small enterprise disbursed INR 2,328 crore, as against INR 3,301 crore. For the year, it was at INR 12,552 crore, as against INR 11,281 crore, which is a growth of 11%. The drop in disbursement is due again to our decision to progressively exit from some of our partnership-led volumes. The secured business and personal loans disbursed INR 404 crore, as against INR 366 crore, which is a growth of 10%. For the year, it was INR 1,316 crore, which is a 23% growth over INR 1,074 crore in the financial year 2023-2024. AUM stood at INR 199,876 million, as compared to INR 153,718 million, which is a growth of 30%. PBT growth in Q4 was at 19%, and for financial year 2024-2025, it was at 25%. PBT ROA was at 3.6% for the quarter, and for the year, it is at 3.3%. ROE was at 22.2%, and that for the year was at 19.8%. The company continues to hold a strong liquidity position with INR 15,267 crore as cash balance, including INR 5,866 crore held as HQLA for LCR purposes and shown under investment. The total liquidity position was INR 15,712 crore, including undrawn consortium lines. The ALM is comfortable with no negative cumulative mismatches across all time buckets. Our consolidated PBT for Q4 was at INR 1,698 crore, as against INR 1,428 crore in the quarter, which is a growth of 19%. For the year, it is at INR 5,741 crore, as against INR 4,605 crore, which is a growth of 25%. We are also launching the gold loan business in select geographies. Our gross stage three assets, representing 90-plus dues, decreased to 2.81% as of March 2025, from 2.91% as of the end of December 2024. GNPA, as per RBI norms, decreased to 3.97%, as against 4% in December 2024. The NNPA, as per RBI norms, also decreased to 2.63%, which is well below the threshold of 6% prescribed by RBI as the threshold for PCA. The capital adequacy of the company was at 19.75%, as against regulatory requirement of 15%. Tier one capital was at 14.41%, and tier two capital was at 5.34%. The board has recommended a final dividend of INR 0.70 per share, subject to approval of the members of the company at the ensuing AGM. This is in addition to the interim dividend of INR 130 per share for the financial year 2024-2025 declared by the company on 31st January 2025. Nischint, I'll stop with that, and we'll be happy to turn it over to the audience for questions. Thank you. Thank you very much, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask questions may press star and one on their touch-stone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Also, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The first question is from the line of Dhaval from DSP Mutual Fund. Please go ahead. Yeah, hi. Thanks for the opportunity, and congratulations on good performance. I had two questions. First relates to overall growth. Could you just highlight the growth expectation for next year? Last time, you had mentioned 25% for next year as well as medium term. Could you just re-highlight that? Also, specifically, if you can touch upon the home loan business growth. Earlier, you had commented that we sort of accelerate, stabilize, then again accelerate on this business. We have seen a 16% growth in disbursement this year, whereas the capacity growth is much higher. Should we expect significantly better growth in FY2026? Any comment around that would be useful. The second question relates to credit cost. On the newer businesses, we have seen an increase in all the three businesses, the CSEL as well as SBPL and SME business. Could you highlight RBs at peakish levels, and we should see improvement across all businesses? Or any comment around credit cost in the newer businesses for FY 2026 would be useful. Thank you. Okay. Maybe kind of in terms of overall growth, at the AUM level, we still believe we've always guided in the 20-25% range, and we still believe that that will basically hold. In home loans in specific, I'll let Prashant take that question, and then credit also will get the team will. For home loans, we are seeing around 15%-20% growth. That is on disbursement side, and book will be growing at the rate of 30% plus for next two years. Yeah. So the credit cost, we have delivered 1.4%. And in the case of vehicle finance, we are at 1.6%. Vehicle finance will reduce the credit cost in this year. If they reduce it by 20 basis points, the company will get benefited by 10 basis points because they are 55% of the overall book. In terms of the CSEL and SME, these businesses will reduce the credit cost by the year-end. We need to basically factor Q1, Q2, where the credit cost goes up, and then Q3, Q4, credit cost goes down. What I am talking about, the full year our expectation in terms of SME and CSEL, if they come down by 50 basis points and they are 10% of the book, they can actually reduce it for the company's 0.5%. For HL and Lab, which is basically at rock bottom level, we need to both all three businesses, SBPL, HL, and Lab, if they go up by 10 basis points and they are 35% of the book, they can actually increase it by 0.35. Net-net, what SME and CSEL reduction can get adjusted against the SBPL and Lab and HL, and then the vehicle finance reduction can actually reduce the credit cost by at least 10 basis points for the company. We are expecting 1.4 to go down to 1.3 in the next year as far as the credit cost is concerned. As the overall growth is concerned, as the boss said, we are targeting 20-25% always. We have mentioned that. For that, we need to achieve the 30% growth in non-vehicle and 20% growth in vehicle. 30% growth in non-vehicle is actually easily possible. Now, we need to try vehicle finance to deliver 20%. That is. Hello. Sorry, sorry. Just sorry, Kundu sir, just one follow-up on the growth question. If you could talk a little bit around these newer segments that are getting added, in the medium term, should this be additive to the overall growth profile of 20-25%, or this should help us sustain these levels of growth? Any comment around that would be useful. Thank you. Yeah. I always say from a guidance perspective, we have always said that range of 25%, so that includes the new segment, right? Basically, we'll manage the mix within that, but that's what we will get to kind of as a delivered number for the company. Got it. Thanks. Thanks, and I wish you all the very best. Thank you. Thank you. Thank you. We'll take the next question from the line of Raghav Garg from Ambit Capital. Please go ahead. Sir, hi. Good morning, and thanks for the opportunity and congrats on the 4Q performance. I have a few questions. One, just for clarification purposes, did you say that AUM growth for vehicle finance will be 30% in FY2026? Is that what you said? Sorry, I may have misheard it. No, it's personal growth. No, no. Vehicle finance asset growth, we said 20%, and non-vehicle 30%. So that 25% can be achieved. This 25% is at a higher level. Our stand is that we will be targeting 20-25% growth. All depends on how monsoon takes place because last year, monsoon was good, and post that, things have started improving. This year, in vehicle finance, we have disbursed almost 12% for the year, and we're likely to increase the disbursement from 12-15% to 17%. It depends on the second term. That is the reason we are slightly conservative in terms of disbursement growth. This has been our stand that for the company, it will be 20-25%. Understood. Sir, I was looking at your 4Q numbers. Generally, for the vehicle finance segment, there seems to be some seasonality in the vehicle finance yields. In Q4, it tends to increase about 30-40 basis points quarter on quarter every time in Q4. Why is that? No, I didn't understand. Once again, repeat it. No, Q4, you're saying that the disbursement is higher? No, I'm saying that in the Q4, your vehicle finance yields tends to increase quarter on quarter by 30-40 basis points. And then in the following quarter, which is the Q1, it comes down. Why is that? This is as per the data that you report on the segmental information. Hello. Hello. Ladies and gentlemen, thank you for patiently holding. The line for the management has been reconnected. Thank you. Sir, you may continue now. Yeah. Okay. Hi. Complaint is that the Q4 overall income goes up from Q3 level. It has gone up to, say, 15.2 to, say, 15.6. Last year, it went up from 15.1 to 15.4. This is related to the collection efficiency because in the last quarter, always our collection efficiency improved, and that improves all collection, including the EMI collection, like recovery collection, HCCBC collection, other charges collection. That includes the income, and that increases the income in the Q4. Understood. Sir, just one of the last questions from my side. Has the cost of hedging on foreign borrowing gone up in recent months? Generally, what is your observation? Or cost of borrowing? Cost of hedging. Cost of hedging on foreign borrowing, has it gone up? Generally, for. is sort of in Q1 now, but it was good in Q4. We managed to get good deals in Q4. We will be always selectively watching and doing deals. We could strike deals in Q4 at very fine rates. Understood. Fully hedged. That's all from my side. Thanks. Thank you. The next question is from the line of Abhijit Tebrewal from Motilal Oswal. Please go ahead. Yeah. Good morning, everyone, and thank you for taking my question. Just two questions. Trying to understand first thing from Arul sir. Sir, this year, how are we looking at our cost of borrowings getting repriced with the assumption of maybe one or two more rate cuts in the coming quarters? How would you look at cost of borrowings coming down? To that end, given our home loan, loan against property, and SME book are floating rate, what proportion of it will pass on eventually? What margin expansion can one build in this fiscal year? The second question is for Ravi sir. Sir, just trying to understand. I mean, very, very clearly, there is tightness in terms of collections, which is evident, also showing up in credit costs. This year, all four quarters, credit costs in absolute terms were in a very tight range. When we say next year, the credit costs will be lower, what has to change from where we are today, what we saw last year, and what has led us to where we are today? From here, what has to change for the environment to improve and credit costs to come down next year? These are the two things I wanted to understand. I'll just squeeze in one last question. We have already announced the launch of our gold loan business. If you can give some color around how we are approaching the gold loan business, which geographies we target, and also the ticket sizes that we will be looking at. Eventually, in the next one or two years, what proportion of the loan mix can golds become? Okay. Let me address the first question on the cost of borrowings. See, around 20% of our borrowings are linked directly to either the repo or the T-bill. That we are seeing the benefit coming through as in vendor reductions. A large part of our borrowings, which is around 50% plus, is linked to banks. Until and unless MCLR comes down, we have to wait for those MCLR reductions to come for this benefit to pass through. However, marginal borrowings, we are able to negotiate at finer rates, both from market as well as from the banks, considering the reductions that are coming into play. We should see overall for the full year, around 10-15 basis points reduction net of what we need to pass on to the floating rate book for us. NIM should improve around 10 basis points is what I would right now consider. Regarding the credit cost, as I mentioned earlier also, see, there are three areas where the credit cost has to be improved. One is vehicle finance, second is CSEL, and the SME. Now, CSEL credit cost will come down by running down the fintech book, where the proportion of the credit cost is higher than the traditional book. That will happen, that will start happening from the Q3 onwards. The first two quarters, we need to bear with the credit cost, whatever they are delivering. The book is also going down. In fact, in the beginning, the percentage will look higher. After that, once the book is completely run down, that much credit cost, which is coming from the partnership book, will go down. Therefore, the NCL by the end, CSEL will start showing up reduction. In the SME, it is a term loan, which is similar to lab, where the SARFAESI is there on many cases going on, and the progress is very good and likely to basically get the result again in the second half. That will start reducing as lab has reduced over the time. In the case of vehicle finance, we are depending on monsoon. We are depending on good performance and capacity utilization of small commercial vehicle, light commercial vehicle. We have seen that this has improved from quarter four onwards. Quarter three also, the NCL did not go up. If that gets continued and we get a good monsoon this year also, again, we will see the NCL of vehicle finance from 1.6% level go down, which will improve the overall NCL of the company. As far as the gold loan is concerned, we have studied not only gold loan, consumer durable. We have studied that our customers, which is 4.5 million customers, are actually taking gold loan from the market close to INR 1,000 crore per month, and almost INR 1,000 crore disbursement is happening from the consumer durable. Both the products we have initiated, in the beginning, we will be very slow and cautious, and we wanted to do it in a much advanced manner. We are taking the benefit of the technology available to ensure that the golds are secured, and those things are getting developed. At the beginning, we are launching 120 branches, and it is basically in South and East. We are kind of having a plan to basically pilot it and see how it is working. Maybe in this financial year or maybe one and a half years' time, we will try to achieve INR 2,000 crore and see the performance of gold loans, how it is working as against the plan. Once it is doing very well, then obviously, we need to reach out to our customers who are actually going there and taking the loans. Okay. This is all from my side. Thank you, and wish you a good evening very much. Thank you. Thank you, sir. A request to all the participants to kindly limit their questions to one per participant as we have others waiting for their turn. Thank you. The next question is from the line of Avinash Singh from Emkay Global. Please go ahead. Yeah. Hi. Good morning. Thanks for the opportunity. My question is on OPEX. I mean, in this Q4, if we see OPEX has kind of, the growth of OPEX has materially slowed down. I mean, that is a bit atypical of Q4. What were the reasons? Going ahead, with some part of OPEX seeing increase with launch of gold finance and all, how do you see OPEX to trend over the next year as well? Thanks. See, generally, actually, OPEX increases a bit in Q4. This year, we have kept it under control primarily because we have been behind. We have moved all the costs relating to the new businesses which we introduced over the last year. Most of it had been completed. As we move into the next year, we will see a little bit of OPEX coming because of the gold loan. Beyond that, there should not be any further increases. Target is to keep it in the 3-3.1 to asset ratio. We will bend over to follow that trend. Okay. Thanks. Thank you. Thank you. The next question is from the line of Harshit Toshniwal from Premji Invest. Please go ahead. Yeah. Hi, sir. Am I audible? Yes, sir. Please proceed. Yeah. Sir, this is on the assignment income. I think we had that last quarter, and we also have it this quarter. Just wanted to check that. Is this now a consistent strategy going forward that we'll do some assignment? Because this is something which we have been doing only in the last two quarters. Yeah. We had some opportunities, and there have been some slowdown in the securitization market because most of the banks are sort of outsaturated with the securitization requirement. We had kept certain assets available, and we thought we should continue with that program. Most probably, we'll do one or two more deals, both that we will again slow down depending on market. Basically, there should be some income coming through either the securitization or the assignment route, some disposal of assets or state of assets that we will target. Accordingly, we'll plan as we move forward into the current financial year. Got it. Got it. Sure. Sir, answer on the vehicle finance, I think the guidance you mentioned that we would want to increase the disbursement growth to maybe 15%-20% from the 12% where we saw this year. If you can give some color as to what segments you want to focus this year, where do you see the green shoots? In the context of economic recovery also, are we building some of that into our guidance? First, just to clarify, 15% disbursement growth, 20% asset growth, which we are targeting this year. This will happen only when the light commercial vehicle and small commercial vehicle picks up, and we continue to do what we are doing in terms of used and passenger vehicle and other products. The monsoon has been good last year. Therefore, tractor and two-wheeler sales have also picked up. We have also done the disbursement. Still, some scope is there to do more tractor and more two-wheeler. Across all product segment, we are focusing across the country to achieve 15% disbursement growth, which will take us to 20% asset growth in terms of vehicle finance. Sure. Got it. Okay, sir. Thanks a lot. Thank you. We'll take the next question from the line of Kunal Shah from Citigroup. Please go ahead. Yeah. First, just to check on the home loan, we indicated that the growth should improve both in terms of disbursements as well as AUM, almost like 15%-20% disbursements. What ideally would lead to that kind of an improvement? Maybe this year, the overall disbursements in home loan has not been that great. Secondly, on lab, when we look at it, in fact, it's been growing quite well. Would we see some kind of a normalization coming in lab, or maybe the growth traction in lab should still continue? No. First of all, what Prashant said, that the 15% disbursement growth will take him to 30% asset growth, which is at a similar level where we are as of now in the home loan business. In the case of home loan, when we do 15% disbursement, it comes to 30% because we have grown in the new geography, east, west, and north. Around 60% of the disbursement of home loan is still coming from south, but we are cautiously increasing the disbursement, and this is enough for achieving 30% growth. That is also one reason. We will continue to what he said is that we will continue to have this 15% disbursement and 30% asset growth. After some time, we need to do more than 15% to achieve 30% asset growth. By the time, we will learn newer market very well, and we will get established there as the home loan department has done it in South. As far as the LAP is concerned, they are now almost expanded across the country, and therefore, the disbursement growth and asset growth are almost at same level, almost 25% asset growth and 30% disbursement and 30% asset growth. Maybe in the coming year, we are targeting between 25-30% disbursement growth, which will be enough to deliver 30% asset growth. I mentioned that non-vehicle will try to basically deliver 30%. Yeah. Particularly, loan against property, you are still saying it might continue with 25%-30%. There are still maybe the opportunities available and the levers available to continue at that pace. Correct. Okay. On new businesses, when do we start seeing the pickup? Maybe would it be after the first half where we will see maybe the credit cost also normalizing, or maybe now that has also almost bottomed out in terms of growth, and we are getting confident, particularly on the SME and the other segments? Because otherwise, disbursement growth this quarter has not been that great in the new businesses. No. See, when the disbursement growth is not there because we have taken some decision in terms of CSEL, where we have come out from the fintech partnership business. That gets compensated through the consumer durable and our traditional PLBL business, as well as our in-house digital lending business. That is not possible to completely reduce it, compensate it immediately. Over the period, that will get compensated. In the case of CSEL, our asset growth is slightly lower for this financial year. Will that catch up next year? As far as the credit cost is concerned, since the asset rundown in terms of fintech book is very fast, the net credit cost in absolute value remains as it is. First half, this will basically remain at the same level. Only in the Q3 or maybe Q4, we will see that the NCL will start coming down. As far as the SME is concerned, we have again taken one decision that supply chain finance will be reduced because the ROA in the supply chain finance is very low. In that place, we will actually do the small download and equipment finance. That product which we are doing is getting good traction. This year, we will basically see that the disbursement also in the case of SME goes up. Because the term loans are longer tenure book, 30% asset growth is possible, and we will try to do that. In the case of SME, the net credit cost is higher because the cases which are going into stage three are in SARFAESI and likely to get resolved in quarter three. Therefore, we said that in the case of SME also, we are expecting their NCL to go down in this financial year. Perfect. Yeah. That helps. Thank you. Thank you. We'll take the next question from the line of Nidhesh Jain from Investec. Please go ahead. Thanks for the opportunity. Firstly, sir, in the new initiative, if we look at three businesses, all three have shown deterioration in asset quality, slowdown in growth, some recalibration in terms of a strategy. What has actually gone wrong in terms of strategy in that business? In all three of them, we are seeing a bit of similar trends. No. It's not like that. SBPL has delivered 7.6% ROA in quarter four. For the full year also, they have delivered 7.6% ROA. Their growth has been good. They are growing very highly, 70%, just because of the small base. SBPL is one book which is doing very well. Now, coming to the SME, as I mentioned, in the SME book, by nature, if the term loan goes into the NPA, it takes one year time to reduce the NCL. We have seen that in the case of LAP also in the past, that initially it goes up, and then once SARFAESI starts solving the problem, automatically the reversal starts happening. This SME book is also growing at the rate of 33% for the full year, and their net credit cost is at 1%, which will go down. Our targeted ROTA in this business is 2.5%. We have delivered 1.9%. It is just a difference of 0.5%-0.6%, which is going to be coming from the NCL, which we are very, very confident about delivering next financial year. Now, in the case of CSEL alone, where we have done two businesses. One is that in-house DST, DSA, PLBL business, and fintech business. In the case of fintech business only, we have seen that there is a delinquency high, and that delinquency also went up because the FLDG rule has got changed. After that, the amount of FLDG we were getting earlier, we were not getting it. Therefore, we decided not to pursue that business. That is the reason there is an increase in the NCL and drop in the business in the case of CSEL. I will accept that CSEL, when we started doing fintech business, this FLDG norm of 5% cap was not there. When it got introduced, not only for us, for the entire industry, it has become a problem. Therefore, we have also decided to go slow, and finally, we decided to exit from the fintech digital business. As against that, we have developed our in-house digital lending group, which is doing very well. Their ROA standalone is actually more than 6%. We will slowly grow that business. Sure. Thanks for the explanations. What share of our CSEL book will be fintech as of March 2025? That is very low, basically. Overall, around 8%, it will come down. Fintech, only fintech is delinquent. Okay. Okay. Sorry. Okay. Okay. Sorry. Okay. Okay. Sorry. Fintech is only 1.5%. 1.5%. Yeah. Yeah. Okay. Sir, secondly, on the gold business, do we have standalone branches specifically on gold only, or will gold also be offered through the same branches from which we have been doing vehicle finance, etc.? No. No. Gold loan will be a standalone branch. We are planning to roll out 120 gold loan branches this quarter. We have already created infrastructure. It is just a matter of some more time. It will get rolled out. Okay. Sir, thank you. That's it from my side. Thank you. Thank you. We'll take the next question from the line of Viral Shah from IIFL Capital. Please go ahead. Yeah. Hi. Thank you for the opportunity. Sir, just a follow-up on the previous question. You mentioned that you will be rolling out a separate branch for gold loan. Can you just explain the rationale behind that? Because until now, the other businesses that we have been scaling up, we have tried to utilize the existing network. Also, some of our peers have been using the existing branches to do the gold loan business. Just the thought process there. No. With the gold loan, you need to have a separate vault, separate RFID. We are also basically introducing some more control where who is entering inside the branch, who is taking out gold. All those things are getting tracked front head up. That is possible only when you get the standalone gold loan branch. Gold loan branch also requires a specific location to operate from. That is also another requirement. These two requirements can be fulfilled only when we go for standalone gold loan branches. Okay. Sir, just as a corollary to that, the OPEX guidance that Arul sir gave, it kind of bakes in all this branch expansion that you will be doing and also some bit of pickup in the disbursements that will happen in the overall business, right? Because you are seeing that in vehicle finance, that the disbursement will pick up, so will our incentives. Just wanted to get a sense on that. Yeah. Broadly, we are still endeavoring to keep it in the 3% to 3.1%. We will hold it because the count of gold loan branches will not be very high in the first year. Okay, sir. Got it. Thank you so much and all the best. Thank you. Thank you. We'll take the next question from the line of Piran Engineer from CLSA. Please go ahead. Yeah. Hi, sir. Congrats on the quarter and these turbulent times. One, I just wanted a clarification on SME sort of growth plans mentioned. We've slowed down in. I'm sorry to interrupt you. Sir, your audio is not clear. There is a breakage when you're talking. Okay. Sir, please use your handset if possible. I'm coming to the. I'm on my handset. Yeah. Okay, sir. Yeah. Go ahead. Yeah. Okay. Yeah. Just wanted to get a sense more quantitatively on what could be the disbursement growth in SME lending next year because while this quarter was down because we slowed down in supply chain, if I look at the last five-six quarters, it's been flattish. Just wanted to get a sense on that. The next question is, what is the TAM in terms of number of branches you can do loan against property and home loans from? We are already at almost 800 branches in loan against property and 700-odd in home loans. Could that go up further, or now growth will be a function of just improving branch productivity rather than branch expansion? Yeah. First of all, the SME, the disbursement will be again, even for this financial year also, it is going to be flat only. We are not going to increase disbursement significantly because we have brought two products. One is small term loan and also equipment finance as against the supply chain finance. Supply chain finance was a big chunk which we have cut down. Therefore, initially, the disbursement is not going to go up, but we will maintain the asset growth, which is at a 30% level, which is going to be there because of the disbursement we are doing in the case of term loan, which is a long-turner book. Therefore, asset growth is not a problem. As far as the lab and HL is concerned, as I mentioned, NHEL, they are already into three zones where they are operating only for the last three years. Their disbursement of three zones put together is lower than south zone because of the productivity and because they have introduced only three years back. They are continuously improving the productivity and operating expenses and likely to increase also a little bit. Both LAP and HL will continue to do that, but the number of branches expansion is not very high in the current financial year. Current financial year, the productivity focused by LAP and HL is high. Subsequent year, maybe LAP and HL will think about going to another 100 branches. Okay. Okay. That answers my question. Thank you and wish all the best. Thank you. Thank you. Thank you. The next question is from the line of Renish from ICICI Securities. Please go ahead. Yeah. Hi, sir. Just one question from my side on this. Tamil Nadu, we sort of gave a lot of weekend. Given our major exposure would be in the state, how confident are we about sort of sustaining the growth rates or even credit cost? Maybe if you can just tell us the reality at ground post this bill. I know it is too early, but what is your assessment? Actually, the similar thing is there in Karnataka, Telangana, Andhra Pradesh. This is more related to private lender and also microfinance. This was actually going on in many places. You know that we are quite compliant in terms of our collection approach to the market. Therefore, we do not see any impact coming on vehicle finance, which is actually deep-rooted in Tamil Nadu as well as the colocation and lab. It's very clearly mentioned. The legislation will not apply to banks, non-banking finance companies. Yeah. It is also not applicable to us, first of all, registered with the RBI, cooperative banks, and cooperative societies. Yeah. Yeah. Yeah. Correct. In Karnataka, sir, we have still seen sort of players getting impacted because it takes time at borrower level to fully understand the bill, etc. I know MFI or maybe small ticket loans will be more vulnerable. Do you think, I mean, in your portfolio, any of the product is vulnerable? No. No. No. Nothing like that. Actually, we are also approaching the market in terms of collection very peacefully. Therefore, across the country, our approach has been very soft. We have been following up but not harassing customers. Got it. Got it. Okay. Okay. That's it from my side, sir. Thank you. Thank you. Thank you. We'll take the next question from the line of Pranuj from JP Morgan. Please go ahead. Hello. Thank you for taking my question. Just one question on HL, the delinquency rates have risen up to 0.6%. Is there any concern out over here? Second, just a clarification, Arul, that 3-3.1% OPEX, that is OPEX to assets, right? Yeah. It is OPEX to assets. On the delinquency, you want to explain? Yeah. Yeah. The delinquency percent, you want to say something? As far as I see, delinquencies are concerned, we are maintaining at 0.40 for the year. If you compare with the last quarter, this quarter, it was last year there was a release in terms of stage two, stage three. This year, we are maintaining at 0.40. Going forward, we foresee that it will be at similar levels. Already, our stage two, stage three are below, much in good shape. That is what we are focusing on, the fresh bucket, to ensure that the same level of delinquencies continues with increase in the book size. Also, as I mentioned in the beginning itself, that LAP and HL are basically very tightly maintaining their net credit cost. If at all they increase 10 basis points, that will only impact 0.35 as against the SME and CSL going to reduce it by 50 basis points. It will release 0.5. We will get netted off. Vehicle finance will basically reduce it, which will improve the credit cost by 10 basis points. Now, HL, as I mentioned, in case of vehicles, they do not have SARFAESI. Their resolution takes time. They do it mostly through arbitration because small ticket size loan, less than INR 2,000,000. Therefore, resolution takes time. Those cases which have gone into the NPA last year will start getting resolution by the end of the year. Understood. On a four-year basis, you still expect to maintain that 0.4% for FI26? 0.4-0.5%. Understood. Thank you, sir. Thank you. The next question is from the line of Shweta from Elara Capital. Please go ahead. Thank you, sir, for the opportunity. In the vehicle finance portfolio, have we seen any write-offs? If you could provide any color on the subsegments that you might be closely monitoring or seeing vulnerability? We have not, I mean, the normal levels of write-off, which is relating to repossession of vehicles and the sale of vehicles, that has continued. There has been no different change in the trend. We will continue to have this. As you know, there is a little bit of a higher proportion of used vehicles, etc. To that extent, there would be some skewness. Other than that, there will not be any high levels of write-offs in vehicle finance. The write-off has not been done. Only the repossession and sale of vehicle only have been done. Okay. How about bounce rates and early-on delinquencies, 30 DPD book in the vehicle finance? How is that faring? Thank you. Non-starter is actually lower than the last year, March, March 2024 to March 2025. The non-starter has come down. The early default also has come down over the December and September quarter, but it is still higher than the March 2024. Slightly higher. Slightly higher. Non-starter is much lower, lower than the last meeting. That is the trend that we are improving our portfolio quality. It requires better monsoon even this year also. Only then we can see better in theory in this sector. Very helpful, sir. Best of luck. Thank you. Thank you. Thank you. Thank you. Thank you, Thank you, sir. We'll take the next question from the line of Mahrukh from Nuvama. Please go ahead. Yeah. Yeah. Hello. Good morning, sir. I have one question only on asset quality. I think you replied to Shweta partly, but this time, the Q4 seasonality was not strong, and you had already been guiding to that. Does that mean that the one Q week seasonality will also not be as pronounced? Is that a fair takeaway in vehicles especially? No. One Q, quarter one is basically if you are specific to vehicle finance, if you are asking me the question very specifically to finance, last year quarter one was 1.9. We are at actually 1.6. From 1.6, actually, in the case of vehicle finance, it will not go to that level. We will definitely see Q1 to Q1 reduction. Q1 to Q1 reduction, yes. Okay. Okay. Yeah. That was my only question. Thanks. Thank you, sir. Thank you. Thank you. Thank you. Thank you, sir. The next question is from the line of Aluk from UBS. Please go ahead. Yeah. Hi, morning, sir. Did I hear correctly that you said 1.5% of your book is fintech-driven partnership AUM? 2%. 1.5-2%. 1.5-2%. 2,000 crore. 2,000 crore is our fintech book. INR 2,000 crore is our AUM. You can say that is 1%. Okay. Sir, are we saying that first half of the year NCLs will still be high in CSL primarily because of this fintech book? On this remaining INR 2,000 crore AUM, we are expecting another INR 500-700 crore of credit cost. Is that fair to say that? Oh, who said? We have never said. No. No. What we have said is that the CSL and CL, which is actually where we are as of now, will be remaining at the same level in terms of absolute value. For example, I'll tell you the CSL number. It is actually per quarter, it is INR 210 crore-INR 230 crore-INR 240 crore, which is delivery. This number remains as it is in quarter one and quarter two. After that, when the book will get run down, then INR 230 crore-INR 240 crore per quarter NCL will go down. INR 240 crore is on the 8% of the CSL book, not the. Yeah. Yeah. Yeah. No, that's fair, sir. Yeah. Okay. Sir, in this quarter, you have done some extra provisioning in CSL. Could you give that number? INR 32.35 crore. 35 crore. Okay. Okay. Got it, sir. Thank you. This is actually 220, which is actually similar to quarter three. Quarter three was also 210. Now it is 220. We have created another INR 35 crore, INR 36 crore, which is actually taken up to INR 256 crore. This number in absolute value will remain as it is for another two quarters. Once the book gets run down, the corresponding NCL will go up. The percentage will go down. Got it, sir. Okay. Thank you, sir. Yeah. Thank you. Thank you. Thank you. The next question is from the line of Rajiv Mehta from Yes Securities. Please go ahead. Yeah. Hi, good morning. Just one question on vehicle finance. There is a clear pickup in new LCV and HCV financing in the past two quarters. If you can comment on that. When I look at your growth in car and UV financing also, you are significantly outperforming the underlying industry sales. What is driving this? Have we tied up with more OEMs or otherwise for more models? Actually, Chola growth of light commercial vehicle has been 4% as against the industry growth of 3%. This is there in the page number 37. In the case of small commercial vehicle, the growth is basically slightly lower than the industry. Industry degrew by 9%. We degrew by 6%. We are slightly conservative in small commercial vehicle. We are conservative in small commercial vehicle and reduced our market share. In the case of light commercial vehicle, we have increased our market share slightly higher than the industry, slightly. In terms of heavy commercial vehicle, our growth is better than the industry. That is because now the customer, as we maintained in the beginning, that initially the capped user and big fleet operator, medium fleet operator will buy, and then slowly the retail customer will come into the market. Our customer segment has started buying heavy commercial vehicle. Therefore, our HCV sales have gone up. It has increased our market share from 2.9% to 3.5%. Slight increase. In terms of growth, in terms of unit, it is looking higher. It is there in page number 38. Industry degrew by 3%. We grew by 21%. Fantastic. Fantastic. In passenger vehicle, we have grown in terms of market share. Our reach of having a larger number of branches, entire three, entire four cities are helping us. In fact, our market share in Maruti has gone up substantially. In passenger vehicle, we have been able to grab our market share, increase our market share, especially in the Maruti segment. Yeah. That's it from my side. Thank you. Thank you. Thank you. The next question is from the line of Subhranshu Mishra from Phillip Capital. Please go ahead. Hi. Good morning, Kumbhu Sir. Two or three questions. The first part is on the number of people we deploy in collections across businesses. If we can split that into soft bucket and hard bucket, that's first. Second is that I saw a notes to account that says Chola Home Finance. Just for clarity, we are running the home loan business in that subsidiary. Third is that the LAP is growing at a strong level of 25%-30%. That's the guidance as well. Do we foresee seasoning? In that seasoning, will we also see higher credit costs? These are the three questions. Thanks. In the case of headcount, we have 30,700 people in sales and 22,000 people in collection, and almost 10,000 people in credit ops. 1,600 people are our business enabler sitting at head office. In the case of loan against property, I think Suresh, you were the—that is your plan. Yeah. If you look at LAP, we have improved our number of branches to 800 branches. We have significantly invested on the people side as well. That is what has resulted us in the growth in the last few years where we are consistently growing our disbursement as well as book. We still feel there is a lot of market opportunity. The key focus for the current year is our improvement in the efficiency on the existing manpower. We are pretty confident. We are convinced that with the market opportunity available, we can continue to grow at this level of 25%-30% of disbursement growth, resulting in about 35% of book growth. We definitely see the opportunity in India for the SME segment, especially for the LAP segment. With all this manpower and the branch structure in place, we are pretty confident that we will continue like this. As for the Chola Home Finance is concerned, we don't have anything in mind. Yeah. Actually, the Chola Home Finance, we created thinking that we can move and create a home finance company. The arbitrage between a home finance company and an NBFC has narrowed down significantly. We have already decided not to pursue this course and keep the home loans in the main company itself. We have renamed the company as Chola Leasing Company so that they will start looking at leasing operations within the various products we have. That is in a very nascent stage right now. We will look at it as we move into the next financial year or thereafter. My first question remains unanswered. How many people in collections business-wise, sir? Business-wise collections, we will not be able to share. That is, we have given you the overall numbers at the business level. Individually, collections of each of these are not publicly available information. We keep it within the company. Sure. Sure. I'll come back and visit you. Thanks. Thank you. Thank you. The next question is from the line of Dhavil from DSP Mutual Fund. Please go ahead. Yeah. Thanks for the follow-up. Just a quick one on the profitability. Overall, what we're saying is for FY 2026, we are expecting margin improvement, OPEX improvement, and credit cost improvement, which should basically mean that that 3.5% PBT ROTA that we were guiding to should be a target for us. If yes, then is that a sustainable level from there on, or we further invest back in the business? Therefore, we'll see some bit of volatility in coming years on the PBT ROTA. Just directionally, with this change in the business model, diversification, etc., is the 3.5% now a sustainable number or not? That's what I wanted to get through. Thank you. We will be working towards a 3.4 conservatively to look at in the coming years and then move on to 3.5 because we still have whole loan-related OPEX coming up in the current years. We will have to also look at how all of these will pan out. I do not want to right now count the chickens. Let us wait for it to move on. Let's cross the first half, and then we will know because that's a crucial part when the reality of the monsoon becomes more certain. We will do it as we move on. Right now, conservatively, we'll keep it. We'll improve from the current level, but certainly, there will be improvement. Whether we'll reach all of the 3.5 or somewhere midpoint is what we need to see as we move into the current year. Got it. Just a clarification. In terms of new businesses, apart from gold loan and consumer durable lending, what other sizable opportunities do you think we can tap in the next few years? Directionally, would the consumer side of the business be a big focus? I'm just trying to understand where the investments would be incrementally in the coming years. We'll continue to focus on this existing and the new business, whatever we have rolled out for near term. I mean, three to four years, we don't see we can go beyond gold loan and consumer durable because SBPL, CSEL itself is basically even SME also. There are five new businesses we have rolled out during this post-COVID. All five need to be groomed, and we have to make it as big as vehicle finance, lab, and HL in time to come. We'll focus on this only. Got it, sir. Thank you and wish you all the very best. Thank you. Thank you. Thank you. Ladies and gentlemen, we'll take the last question for today from the line of Shreepal Doshi from Equirus Securities. Please go ahead. Mr. Doshi, I have unmuted your line. Please proceed with your question, sir. Hi. Sorry. Thank you, sir, for giving me the opportunity. My question was on why have we moderated our growth in the supply chain financing? Is there anything that the regulator has indicated or anything of that size? No, no. Actually, it is not by the regulator. It is primarily a low-ROTA product. Here, what we see is there is a much faster churn. Many times, it is less than a month that stays on the book. You have large disbursements, but it really does not count to your AUM and real income that comes in. OpEx becomes a burden. With a very low yield, it becomes sort of not our targeted level of ROTA expectation. That is the reason. Got it. Thank you. Most of my other questions have been answered. Thank you and good luck for the next quarter. Thank you. Thank you. Thank you. As that was the last question for today, I would now like to hand the conference over to Mr. Nischint Chawathe for closing comments. Thank you and over to Nischint. Thank you, everyone, for joining us today. We thank the management for providing us an opportunity to host the call. Thank you. Thank you. Thank you. Thank you, members of the management. On behalf of Kotak Securities, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you. Thank you. Thank you. Thank you. Thank you.