Good morning, everyone. Welcome to the interaction with management of Cholamandalam Investment and Finance Company Limited. We will discuss three-tier FY 2026 earnings today. The senior management is represented by Mr. Vellayan Subbiah, Chairman and 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 will take the Q&As. Over to you, Vellayan. Thank you, Nischint, and good morning, everyone. I'm happy to take you through our performance for Q3 FY 2026. We had aggregate disbursements of INR 29,962 crore, which is a growth of 16% year-on-year, and that takes our AUM to INR 2,27,770 crore. AUM growth remains steady at 20% at the end of this quarter. Disbursement saw healthy growth across all major product segments in the quarter. Vehicle finance delivered a 17% year-on-year increase in disbursements, supported by broad-based industry momentum across CVs, PVs, and two-wheelers in both new and used categories. GST rate reduction also helped bring down vehicle prices, which further strengthened customer sentiment and supported sustained demand across segments. LAP home loan, loan against property home loan, and SBPL also delivered strong disbursement growth during the quarter. This momentum was supported by sustained housing demand across key markets, coupled with healthy traction and mortgage-backed lending for both self-occupied residential properties and SME credit demand. Q3 witnessed robust customer inquiries and improved conversion rates across segments, contributing meaningfully to the overall expansion of our retail mortgage portfolio. LAP grew disbursals by 26% year-on-year, and home loans grew disbursals by 10% year-on-year, and SBPL by 30% year-on-year in Q3 of FY 2026. AUM growth in these business verticals continued to be strong, with LAP clocking 31%, HL registering 27%, and SBPL having a 52% growth over Q3 FY 2025. Disbursement growth in the unsecured segment was also strong, with momentum picking up in Q3, registering a 32% growth over Q2 of FY 2026. Due to the withdrawal from fintech-based lending, the growth year-on-year continues to be negative over Q3 of FY 2025. This will change from Q1 of FY 2027, as we had stopped lending through fintech relationships from Q1 of FY 2026. Likewise, in SME, also, the growth and disbursement over Q3 of FY 2025 continues to be negative due to the conscious slowdown in supply chain finance. On a sequential basis, disbursals grew by 16%, driven by term loans and equipment finance. The AUM growth was robust at 33%. The newly introduced gold loan business disbursed INR 772 crore during Q3 FY 2026, operating out of 118 dedicated branches in the south and eastern parts of India. As highlighted in our previous call, NIM was improved by 33 bp s in Q3 over previous year, with the RBI's rate cut progressively impacting our cost of funds favorably. Operating expenses have remained steady on a year-on-year, year-on-year basis, even after incorporating the impact of the new labor code in this quarter. This reflects our continuous focus on cost discipline and productivity. Credit costs improved marginally as the impact of running down the fintech business continues to influence our credit costs. On the vehicle finance side, the credit costs have stabilized, and we are looking at a reasonable moderation in Q4. ROA for Q3, FY 2026 stands at 3.2%, and ROE at 19.11%. With the second half progressing well, we anticipate Q4 to reflect improved performance in line with past trends. In terms of liquidity and capital adequacy, we hold a strong liquidity position with total liquid assets of INR 18,857 crore, including undrawn sanction lines. The ALM is comfortable with no negative mismatches, no negative cumulative mismatches across all time buckets. Our capital adequacy position stood at 19.16% in December 2025, with Tier 1 capital at 14.12%. Out of the total issuance of INR 2,000 crore, CCDs amounting to INR 307 crore were converted in the month of October 2025. Further, INR 1,063 crore of CCDs were converted in January 2026. This will improve Tier 1 capital in Q4 of 2026. There's a balance of INR 633 crore of CCDs, which is expected to be converted in April and July of 2026. And finally, the board approved the payment of an interim dividend of 65%, which is INR 1.30 per share. So, Nischint, I'll stop with that, and we'll be happy to take it, turn it over to you for questions. So the first question comes from Suraj Das of Sundaram Mutual Fund. Suraj, your line is unmuted. You can ask your question. Yeah. Hi, am I audible? Yes, yes. Definitely. Yeah. Hi, sir, thanks for the opportunity. Sir, one question on the, you know, vehicle side. First, in terms of the asset quality, I mean, if I look at the, let us say, overall, credit cost on the vehicle that is running a bit higher versus your historical levels. Anything that you want to call out in terms of specific geography or particular OEM or probably any sub-segment that is probably giving the cause, I mean, pain? While you are highlighting that probably the vehicle credit cost will see substantial moderation going ahead, but what could the rationale? Is it because of, let us say, the growth, and hence automatically the credit cost coming down? Or, it would be, you know, more from, you know, underlying cash flow improvement from the borrowers or maybe the state governments coming, payment coming in or something like that. So just first, if you can highlight, I mean, what is the cause of the, you know, this pain? Because your vehicle credit cost is running at 2%, which is relatively, you know, higher versus the peers as well as the historical levels. That would be my first question. Yeah. Morning, Suresh. So few data points which we, I would like to tell you about the vehicle finance is that Stage 3 from June quarter of 3.89 has gone up to 4.11 in September, and December it has remained at 4.17. So in Stage 3, we have got the stability now. As far as Stage 2 is concerned, it has 3.9 in June and gone up to 3.96, but it has come down to 3.6. So 30 basis point improvement in Stage 2 has been seen, and also internally we are monitoring the early default and non-starters. Those are coming down significantly, well, in Stage 3, it's in the quarter three itself, and likely to further improve in the March quarter. So this is in line with our plan only. Our NCL numbers in quarter one was 2.2%, which has come down to 2.1% in quarter, the next quarter, and then in, in this quarter, it has come, 2%. So from the first two quarter to third quarter, the NCL has also come down, though it is at a elevated level. But as you, know that, that the first two half, the first two quarter of the, you know, India is actually getting impacted due to the rains and, and also capacity utilization getting impacted. That is the case, the seasonal effect, and it is, it is similar to the last year. But this year onwards, we are seeing that there is a good demand coming up. Vehicle demand has improved after the GST rate cut and all those things happen. Then we are seeing that disbursements are going up. That means the deployment of the customers have improved and the capacity utilizations are improving. So we are expecting quarter four of the Vehicle Finance going to be very good, and then they are going to maintain it the next financial year. So, coming back to your point that it is at elevated level, yes, but it started coming down in Stage 2, and Early Default and Non-Starters come down. Stage 3 is stable. From here, it will go down. Sure, sir. But, sir, this early starter or let us say, the early delinquency coming down, is it a factor of underlying cash flow improvement or, is it a factor of more, let us say, growth? Because this quarter, the disbursement growth, has been relatively good on a QoQ basis. Early default is basically pertaining to the first six months or 12 months of the book, where the customer is getting into the first delinquent. It is nowhere related to the denominator effect. If one customer goes into the first bucket, it is early default or non-starter. Only the period we basically monitor. Non-starter for six months, and so it is very stringent now, and it is nowhere getting impacted because of the denominator. Therefore, early default and non-starter going down is a. Also, Stage 2 has come down for the full book. It is actually the indication that the collection efficiency is increasing. In the month of January also, we have seen that, which recently we have completed. So this victory is going to be maintained in Vehicle Finance. Not only in vehicle finance, we are seeing the similar impact in benefit coming in CSEL also. Sure. This improvement has been across OEM, across geography? Across OEM, across geography, across the type of product, new and used. Sure, sir. Sir, last question on growth. I think this quarter, the vehicle disbursement growth has been very strong. Partly could be, you know, pent-up demand also, but how do you see the overall disbursement growth going ahead? Since we have seen the January, I have opportunity to tell you that things are looking better than quarter three in this quarter till now, because 30, 60 more days to go. So quarter four will be better than quarter three in terms of overall disbursement, and as well as across all the businesses we are seeing the disbursements are up. Like, you know, quarter three, you would have seen that SME or, you know, C-sale are slightly behind in terms of their disbursement, comparing the quarter three of the last year, because they were doing much higher and they have given up some portfolio, but now the disbursements are up. Sure, sir. And if I can squeeze in last one question, sir, can you give the slippages and write-off number in vehicle this quarter or nine months, maybe? Those numbers are consistent actually. We have not seen any significant change in terms of further disbursement. It has been four- Sure. The write-up in- Okay, sure. Thanks. 353. Yeah. Yeah. 353? 353-401. Okay, and 353 is write-off? No, 401. Okay, and 353 is the slippages? No, 353 was the previous quarter. Okay. Sure, sure. Sure, sure. I'm just comparing, it is INR 40 crore, INR 50 crore up. Okay, sure. Understood, sir. Thank you so much. Kunal Shah from Citi. Kunal, you go next. Yeah, Mr. Kunal. Yeah. Hi. So the first question was on home loan credit cost, not a significant number in absolute term on the base where it is, but if we look at it in terms of the credit cost in home loans, that has gone up, so anything to read into it, or was there any one-off out there which has led to a slightly higher credit cost? And the second question was on CSEL. So now we have started to see the improvement on the disbursement side. So there was a recent traction on a quarter-on-quarter basis on the disbursements. So going forward, maybe last time also you indicated that the stress has peaked out in CSEL. So should we see now significant improvement in CSEL, and when- where should the credit cost stabilize compared to 6.6%, 6.4%? Yeah. Yeah, just to start with the home loan, and this is one of our quarter for the home loan in terms of their NCL. What they did is that the non-performing people working on, and they got into the stage where the collection is visible through the legal. Now they have contacted or tied up with the ARC and given up INR 65 crore of their Stage 3, wherein we book the NCL upfront. So the NCL, it is in the, in the line of, HLPNL is around INR 35 crore, forty, INR 65 crore above POS is basically being removed. And, the income line is actually slightly elevated because of the whole deal has gone up by 23%. So the PNL line is actually not much gap. Therefore, you can see that the ROAs remain. Yeah, yeah. 4.2%. So that's because of the, you know, we take NCL line, NCL, not like in, in some of the players we have seen that they do it slightly differently. NCL, they basically take it, the income also into the NCL line and keep the NCL better. But we have not done that, and we have also created a little bit extra provision, because now we are going to get this money collected through the ARC. So we have not taken entire benefit, INR 5 crore-INR 6 crore extra NCL we have taken. So net-net, what I'm saying is that this... and even in the past we said that, because the NBFC like Chola doesn't have the non-SARFAESI for less than INR 20 lakh for SBPL and CSEL and UB and SBPL and HF, and for LAP also, we have a small LAP. time to time, when we get into the situation where we are quite confident that in such stream, if we can collect money, then we will route it through ARC and get it done, and that is what is going to be the process even in the future. Once in a while it will be done and... But at ROA level, if you see that they are at very high level, 4.2%, and they will continue to do that. And their target of ROA of 4.5%, pre-tax ROA, Prasad has been always saying that he will deliver it. So we should actually rely on his commitment. Now, coming to the CSEL. CSEL is not- So one thing, so, sorry on this, so there was a sale to ARC during the quarter, and we had taken the provisioning knock of INR 35 odd crores, on that transaction. Is that the right interpretation? Yeah. NCL line. Yeah. No, no, I think accounting line let you understand from our perspective. No, let me explain. So there is INR 65 crore of as such sold, and when you sell, you have to write it off in the book, and the income that comes is coming in income line. This is as per the end date. So it's not like. The whole thing has been removed from the book, as such, and you have brought the income, whatever the rate. The provision which you have been carried would have got reversed. Net impact is around INR 35 crore in the NCL line. Got it. Got it. 65 bp s of the 1.1%. Yes. Thank you. So if it wasn't for this, it would have been- 0.45. 4, 5, yes. Yeah. Our overall NCL also would have been even better for the company. But this is the right thing for the organization, that is what we are targeting. Now, coming to the CSEL. CSEL NCL actually moving right direction. In quarter one, it was 6.7%, now, quarter two was 7%, and now it has come down to 6.4%. In absolute value also, the NCLs are coming down because of the rundown of the partnership book. Also, we are seeing the overall NCL of the regional NCL, which is like an on-ground DSA, DST business, which is done unsecured, personal loan, business loan, and professional loan. There also, the absolute value NCLs are coming down. So we are expecting the 6.4% of NCL of December quarter to further go down in quarter four, and that trajectory will be maintained in next year also. You will see that because they, they have cut down their almost INR 500 crore of disbursement per month from this financial year, and now they are reaching to the same level of disbursement what they used to hit it last year. From the next year, they will get the benefit of base, and then disbursement look very high. So one side, the disbursements start picking up and NCLs are going to go down, and even in the case of NCL, I would like to tell you what we have done into the DSA, DST business, where we segregated the entire portfolio into four categories: Diamond, Gold, Silver, and Bronze. Every quarter we have removed bronze, Silver, and Gold, and now we are only sourcing the Diamond quality of the portfolio, which has got the very lower NCL as of now. But the NCL, overall NCL, because of the new portfolio, will start appearing after one year. So we are moving in that direction. By doing that, we have also successfully maintained our disbursement growth at the same level, and now we will start growing the disbursement with a better quality of sourcing. So the quality of sourcing is improving, disbursement growth is improving, and portfolio quality is improving in terms of NCL. So this is the good news from the CSEL side. Yeah, so the question was, where should it settle ideally, compared to 6.4%? After doing this, if we are sourcing diamond category, four quarters down the line, what should be the steady state, NCL in CSEL? That's what I said, that, you know, this entire book of diamond will be accumulated in next two to three years' time, and ideally, by that time, we should go up, we should improve the number significantly. That is the number. So at this juncture, I don't want to commit any number. Sure. 6.4% is very high, and it can come down definitely below 5% in next financial year. Thanks, thanks. That's helpful. Yeah, next is Piran Engineer from CLSA. Piran, you can ask your question. Yeah, thank you, and congrats on the quarter. Just firstly, you know, in the M&HCV segment, we are seeing demand migration towards large fleet operators, and that's being then tapped by the banks. How is it in the case of LCVs and SCVs? And is that a risk you foresee, for this segment also? No, first of all, Piran, if you see in our HCV for last two, three years, we from HCV. And therefore, when the cost of funds started coming down, we started getting benefit too. We start acquiring more HCV customer. So some numbers are very, very, you know, surprising to you, that industry grew by 20%, but Chola grew by 56% in heavy commercial vehicle. But in the case of light commercial vehicle, we were already high, so therefore, our growth and market growth are more or less same. In the case of small commercial vehicle, the market is actually growing at the rate of, say, 16%. We grew by 28%, which is a high input. So in the commercial vehicle segment, in the new segment, overall disbursement growth is coming because of market share as well as the industry. So we are not seeing that the banks are. And banks are always there in the, you know, in the large, and captive, customer. We were always, you know, into the SRTO. SRTOs were away from the market because they were not seeing the capacity utilization. After the GST cut, with the cost of vehicle has come down and also EMI burden has come down because of the both interest rate cut and also total loan has come down because of the vehicle price coming down, the SRTOs are now getting into that. So our disbursement growth is not depending on whether bank is aggressive or not. It is depending on whether our sector, our segment is coming to the market to buy the vehicle or not. So we are seeing that now that is happening, and therefore, HCV and small commercial vehicle started growing and we are maintaining, maintaining our market share at a similar level at the light commercial vehicle. Well, you want to comment? Yeah, but no, sir, my question was- I think his question is different. On the, yeah, that's my question is different. It's more on, like, the market structure, right? Like, Yeah. Is the LCV market also heavily, like, towards fleet operators, or is it more fragmented? No. towards SRTOs, which is why you all can still continue to maintain? Piran, yeah. That's my question. LCV is more into the SRTO and less into the fleet. LCV is more into the fleet and less into the SRTO. Okay. Okay, and that will continue like this, you feel? Yeah, yeah. It will continue. Because in light commercial vehicle, it will start from 3.5 ton GVW to, say, 19 ton GVW. So therefore, the range is large. As of now, the banks are concentrating in a high a tonnage vehicle, which is like 10 ton +. The lower tonnage vehicle is still, is actually getting sold in the tier three, tier four, tier five town, where the people are buying for transporting vegetable at all. But they are more mainly the market load operator, where they MC only finance. To add on that, the retail, the retail operators, be it in light commercial vehicle, that is ILCV, Indian segment, and M&HCV, we are seeing a strong traction of retail operators, which is, Chola's set of customers, coming in from November, December, and that trend is continuing in the month of January. So when you have like, you know, the Amazons and all the e-commerce players, which need that last mile distribution, do they end up outsourcing that to smaller transport operators? I would assume that, you know, this segment also gets more and more formalized with the proliferation of e-commerce. That is what I said, no? Okay. In any case, that was there earlier, and they were actually being funded by bank. What I'm saying is that- No, no, his question is on the e-commerce shift, right? So the e-commerce shift, yes, so to answer your question, the e-commerce players will prefer to contract with people that have a larger fleet, and you do see some people getting into fleets. But traditionally, so if you take the percentage that has gone to fleet in terms of these businesses, it is much, much less than heavy commercial vehicle. So heavy commercial has always been larger fleets. Here, you see it getting a bit more formalized. But, Piran, it's only that, the e-commerce segment, that basically demands that, right? Which is kind of this large level of formalization from their supply base. Correct. Yeah, yeah. Besides that- Okay. There's not that many guys. And also, this is there for now, for quite some time. So post, you know, COVID, we are seeing this, you know, like e-commerce buying the vehicle, being funded by the banks are already there. It is not that this year it is getting changed. The electric vehicle is getting more funded by the banks, because those are getting actually purchased by the large operator. So if the EVs are going to go up, then you will see the shift in that, in terms of the mix between the banks and the EVs. Got it. Got it. My next question is on yields. Now, when I look at, say, SME yields, over the last nine months, they've been the same as it was in March 2025, despite 100 basis points of repo rate cut. Have we pruned low yielding business, or why hasn't the transmission happened? And likewise, even in LAP, and I'm just taking a longer time frame here, if I look versus pre-COVID and today, LAP yields are actually higher today. And it's counterintuitive, given how much of, you know, SME, MSME competition we've seen in the last five years. So just your comments on how we've been able to sustain yields in both these segments would be helpful. On the LAP side, so, post-COVID, we have also introduced SME LAP with a higher rate of interest and, With the business mix issue. The business mix, which is kind of helping us in sustaining. We understood this is going to be a challenge and we changed the strategy to immediately after the COVID. Okay, and- In both situations, it's a business mix issue. Sir- If you take a like-for-like product, you will see it's coming down. But- Okay. Some of the things we constantly are looking at is, if we have to maintain, then, kind of, we do look at changing the mix as well. Yeah, LAP has introduced a small LAP, and that small LAP has now started getting the momentum. So the amount of volume they are generating, like INR 6,300 crore, in that, around 20% is coming from small LAP, which has got high, and therefore they are able to maintain the team. At the same time, SME has given up the supply chain finance, and they have reduced their disbursement by INR 600 crore, what they used to do it. And also they have introduced the- An increase of equipment finance, which is like our equipment finance business has gone up, which is a shorter term and a higher rate of interest, Genset business. So that is helping us to improve over 10% vertically. Got it. Got it. Okay, this explains it, yeah. Thank you, and wish you all the best. Thank you. Thank you. Next in line is Sudhanshu Mishra from PhillipCapital. Hi, good morning. Congratulations on a great set of numbers, and thanks for the opportunity. The first question is around the growth itself. We're looking at a stellar growth, which is coming because of the GST rate cut. However, are we in discussions with various OEMs, or is there any RM inflation which is to be passed, which could more likely offset the GST rate cut benefits that we have seen? CAFE norms are still in a discussion paper. Are we going to see any kind of rate and hikes by OEMs there? Second is, if we can speak about various OEMs, what kind of market shares do we enjoy there? What are we looking at in terms of market share increases, say, the larger OEMs like Maruti, Tata Motors, Mahindra, Ashok Leyland, the larger ones. The next question is a bit strategic in nature. What is our aspiration? Or maybe, when do we hit INR 1,000 crore PAT, on an annual basis in each of the three businesses, new businesses that we have started, which is SBPL, SME, and CSCL? And the third is just a data keeping question: What would be our FEMI in the personal loans? Thanks. Lot of questions, Sudhanshu. So, why don't you go on the OEMs and then FEMI you will get. See, for the vehicle finance, as far as the OEMs are concerned- FEMI. See, two things. What has happened from October, November, December, across the segment, be it small commercial vehicle, light commercial vehicle, ILCV, M&HCV, passenger cars, all the market share we have grown. And as you know, we have our market share in Tata, Volvo Eicher share, Ashok Leyland. These have all grown, and most of it are in double digits. Maruti, we have gained substantial market share across. Small commercial vehicle also we have grown. So, in fact, two-wheelers, we have grown our market share in Royal Enfield, in Honda, and of course, in Hero also, because we are focusing in these three manufacturers mainly. So to your question, that across the board, our market shares have gone up, and the growth has been higher than the market growth. And the trend has continued in the month of January. We hope this will continue for this quarter and going forward. FEMI, you have the second? Yeah. What is the question on FEMI again? Currently, FEMI rates. FEMI, like I know, it for the FEMI rate, it used to be peaked at 3.90%, but over the last three months, it has come down to 3.1, 3.2 types. So, that is what. But, no, I would like to tell you that FEMI is never a, no, a indicator for for any of your, you know, metrics, because it requires what you call the registration, match registration with the bank. All those things are a, you know, as a indicator. So I would say, it has come down, but it is never a indicator from my past experience, I am saying. Just one clarification. On the market share, this is on volumes we are speaking of, right? Yeah, market share is numbers. Yeah, numbers. Okay, okay. It's RAM number. Sure. The last part, INR 1,000 crore, PAT- So in terms of. Yeah, I think the broad guidance is always in this side, which is like when we get into some of the newer businesses, the growth rates will be higher than the growth rates in some of our traditional businesses. But we obviously, you know, we don't want to give guidance on when each of them are going to give INR 1,000 crore in PAT. So there's just, I mean, I think that, so I don't think we'll give specific guidance on that. Sudhanshu, actually, if you see that the CSCL now ROA 1.4%, and what we have been discussing between me and Sujeet, that he will deliver 3.5% ROA ROE, which is normally we, you know, target it in the next financial year. Both Vijay and Sujeet put together, driving the CSCL business. So most important thing is the ROA. In the case of SVPS, so if you take one by one new businesses, is already delivering PBT ROA more than 7%, and SME started delivering more than 2%. So they are all moving towards the direction what we have set in the beginning in terms of profit, it goes. Understood. This was very helpful, and look forward to INR 1,000 crore PAT in each of these businesses. Best of luck. Thank you. The next question comes from Raghav Garg from Ambit Capital. Guys, just a request to all participants, we have a long queue, so maybe you can just keep your questions short and probably restrict to one question per participant. Over to you, Raghav. Thanks, Nischint. Hi, and thanks for the opportunity. I have two questions. One, I just wanted to go back to the Vehicle Finance asset quality bit. See, when I look at your asset quality trends on this portfolio, and compare it to peers, your trends seem to be a little inferior. Say, for example, the QoQ drop in credit cost is lower, the YoY trend is higher. And even when I look at the net accretion to Vehicle Finance in case, it's on the higher side versus peers. So I just wanted to understand, specifically with respect to your customer segment, in the sense that why is he finding it difficult to repay you versus, you know, what we've seen for other auto NBFCs? Is there, you know, some customer-specific color to this or, you know, any vehicle type color to this? That's my first question. No, in our vehicle finance, if you know that the, our mix is not towards the one segment alone, it is actually distributed across all segment. That means we are, we have been financing heavy commercial vehicle, light commercial, small commercial vehicle, new. Suppose you compare with, any finance company which is more towards the used, the used is not so, so much deteriorated during the last two years. The small commercial vehicle and, light commercial vehicle, plus tractor has deteriorated in the, in last two years because of the, you know, two years back when the, slightly, you know, monsoon deficit was there, and then capacity utilization got impacted during last two, two years and during the first half. Having said that, what I mentioned in the beginning of the call today itself, that our vehicle finance Stage 2 has come down from 3.96% to 3.61%. Whenever Stage 3 goes up, like it was 4.11 in September quarter, now it is 4.17, same level. First, Stage 2 and early default and non-starter start coming down, and then subsequently, you start seeing the, you know, results coming, improvement coming in Stage 3 as well. So the trajectory is looking very good in terms of vehicle finance. You know, you're asking why it has gone up. I have said that it's because of the mix of both new and used, not that either new or used, we are doing it. We are doing all pro- product, and that is the reason things started, if you know, you know, looking slightly high in the Stage 3. But the trajectory is looking good from the early default and non-starter point of view, and you'll see the result in quarter four and going forward. Understood. Uh- As far as the market and product is concerned, product and market across the geography, we do not have any concentration in terms of any particular market or any particular product is basically doing very bad. It is all, you know, distributed across. Understood. My second question is, I heard your commentary on early starter or, you know, non-starter, those metrics showing improvement. So my question is that, say, for example, if we see INR 100 of credit cost in the vehicle finance portfolio, how much of this would you attribute to this specific bucket of early starter or non-starter? You know, and then if we see this number as percentage of, say, two or four quarter lag disbursements, would that be the right way to look at it? A majority of the NCL is coming from Stage 2 and Stage 3. The Stage 2 is obviously much lower, as I mentioned. So Stage 3 also, we have not that we have one single provisioning. In the Stage 3, as the, His question is, we say early and non-starter contribute to what percentage of our- The early non-starter is a part of the Stage 2. No, as a percentage of our NCL over time. Yeah. So from a cohort perspective, how much of it flows into this thing? So I, I think that's your question. Yes. Yes. The behavior of these two parameters indicates the business of the portfolio. So if it is coming down, then it means that the current portfolio is behaving better. So the impact of this will be seen over the next 4 or 5 quarters. Mm-hmm. Because this is the. That means, if there is a lesser of early default and non-starters, then what happens is, at a given point in time, the equity of the customer becomes larger, so he will not move out. That's the, that's the, you know, sort of the attribute we're looking towards as we move or keep reducing this. See, my only point behind asking this question is because we don't get segment-wise Stage 2 or even the next slippage on a segment-wise basis, you know, just getting some color as to how much of the credit cost in the Vehicle Finance is coming from the early bucket would just help in modeling the numbers better. That was the only objective behind asking this question. So, I think understood. So we can get back with that data. Sure, sure. That'll be helpful. I have one more question. Can I ask? Yeah, yeah. So in the affordable HLL, I think you mentioned INR 665 crore of principal has been sold to ARC. Is that right? Is that understanding right? Yes. Despite that, the NPA has come down only from 376 to 358, which means that there have been some slippages here, too. Is that understanding also there? Yes. Okay. Yes. So any specific or geographically- Yes. Color to this? No, basically only the non-SARFAESI pool, the there is a slightly increase in delinquencies, which we will do all the legal means to collect out of that. So it is only the non-SARFAESI pool slightly gone up. It is not about any geographies. Geographies, in fact, everywhere the different delinquencies are coming down, and Q4, we'll see this has started coming down everywhere. So we'll maintain the NCL as 0.5 going forward. Okay. Thanks a lot for all those answers. Thanks. Thank you. Next is Shreya Shivani from Nomura. Yeah, hi. I hope I'm audible. Thank you for the opportunity. I have two questions. My first question is on the vehicle book. So, in December and probably end of November, probably, there were two cyclones that hit southern part of India. And can you help us understand what has been the impact of these cyclones on our customer base? Is there some stress that can show up in the 4Q numbers because of this pool? My second question is on the growth outlook for the non-vehicle book. We backed out from the fintech portion, and we are going to scale up direct, digital and consumer durable loans. Can you help us understand how much time will it take for you to set up the infrastructure for these two segments, and then the growth can kick in for you? So is the growth, like, four quarters away or three quarters away in these segments, which are basically replacing your fintech book? Those are my two questions. Thank you. Okay. So to answer the first question, as far as the South Zone is concerned, for the vehicle finance, last 4 months, South Zone had the collection across all metrics, they have done well. For the month of January also, in spite of the highest holidays in a year in South Zone happens in the month of January with Pongal, Makara Sankranti, all this happening. So we have done extremely well in South Zone for the month till January. So we are not facing or we have not seen any kind of pressure or stress as far as the cyclone, and it has been very, very, very marginal. So there is not much of impact to finance book in South Zone for Chola. As far as the CSEL is concerned, there are two segments of CSEL. One is the DSA, DST business, which we are now doing INR 700 crore per month, and then CD and, you know, digital lending, which we are doing INR 300 crore per month, so close to INR 1,000 crore per month. Our peak was INR 1,200 crore per month, but quarter one of this financial year was only INR 2,000 crore. So if we do even INR 1,000 crore, we will do INR 3,000 crore. From the quarter one, you will see significant growth coming up. As I mentioned in the call also, what are the corrective measures we have taken in order to improve the quality of CSEL trade as well, in terms of, you know, removing the pre-segment of the portfolio, which we are actually causing the concern in terms of the NCL, and still growing at the rate of INR 700 crore per month, which is going to grow the disbursement from quarter one at the rate of 25% +. Right. And in the, in the, digital lens, consumer durable, you said INR 300 crore. I am assuming that majority would be digital, because consumer durable, the infrastructure as in partnering with all these, all the stores, et cetera, would take time, right? The INR 300 crore may be more digital. Is that understanding correct? Digital is actually INR 100 crore, and INR 150 crore is around, you know, Samsung, Samsung, and then around INR 50 crore is the CD business, which we are doing through the mobile. So around INR 300 crore. And so INR 200 crore is CD, INR 100 crore is digital. Still, CD is higher than the- Oh, okay. CD is only about to go up. Yeah, so we have the tie-up with Samsung Finance+, so already the infrastructure is all set as far as the platform is concerned. So we are distributing or now our distribution is based on the Samsung Finance+ platform itself. We are able to acquire more customers across the country. So I think from a time lag perspective, that has been taken care of. Okay, interesting. So but you will be looking for more tie-ups in the CD, right? I mean, this must be your first- Yes, yes. Yeah, all right. Okay, okay. How many tie-ups do we have? We already have about 9 tie-ups. We have already covered about 97.75% of the entire mobile market. So we are actually only working on distribution on the open market platform for CD. In addition to- I'll share, we just moved out of mobile into- Non-mobile. Other segments as well. Yeah. Also, this is going to... It's going to kind of grow in different tiers over time, right? So the first part is going to be mobile, and then the second part is going to be non, non-mobile, other household appliances as well. Got it, got it. This is very useful. Thank you, and all the best. Thank you. Thank you. Next comes in Viral Shah from IIFL. Viral, you can ask the question. Hello. Yeah, am I audible? Yes, yes. Yeah, good morning. Thank you for the opportunity. So I had two questions primarily. One is, I was looking at your comments with regards to within the vehicle finance industry, and therein, you have mentioned that the used vehicle finance prices saw good demand with replacement cycle kicking in or expected to kick in and prices declining. So over here, just wanted to understand, first of all, two parts to it. Which sub-segment of this, I would say within vehicle, the used segment, is seeing a demand pickup because of replacement? And secondly, what is the extent of the used CV prices declining? And if at all, you see any concerns with regard to asset quality over there. I'll ask the second question after this. I think there are, there are two things. And, see, immediately after the, GST, price was, GST reduction was announced, there was a lull for almost 15 days. Subsequent to that, the market got corrected, and the initial spurt in demand happened in the M&HCV segment, as the retail operator left. The real movement in, and subsequently it has flown towards the ILCV segment. So M&HCV to ILCV segment, and in the M&HCV segment, also in the used business, the initial was on the, haulage segment. And from January, we are seeing a traction coming up in the tipper segment also, because a lot of contracts have been released, and the usage for the secondary, segment, there is a, a demand for tipper also coming in. So this is where it stands. See, at the small commercial vehicle segment and all, we are yet to see a huge, but it's more or less BAU, as far as the small commercial vehicle segment is concerned in used business. ILCV, we are seeing a traction coming up. M&HCV started. From haulage, it has moved to tippers. So this is what the current scenario is. Just to continue, Viral, this is also linked with the new HCV and new LCV sale. As the HCV market is growing, the replacement cycle also be kicking up for the use. The people who are buying the vehicle, they are not only adding the vehicle, but they're also sometimes, you know, you know, replacing the vehicle what they have. So, when they sell their existing fleet and, you know, buy the new vehicle, new vehicle sales picks up, and old vehicle sales also picking up. So both are going to get benefited because when the existing customer having the vehicle are selling, and that vehicle comes in the market, quality of the vehicles are good, and that vehicle gives better price than the vehicle which comes through the repo, you know, repo, repo sale and all. So the, now the quality of the used vehicle coming in the market after, say, December or, say, after November, are quality-wise, better. Little bit, drop is there in terms of, you know, valuation of the vehicle, which is hardly 5%, but it doesn't matter, because at the end of the day, if someone wants to buy a new vehicle, wants to sell the vehicle, he need it for his replacement, customer need it for their, their deployment. So that, that is not important. Important is that the vehicle is available for us to finance, and therefore, our used business is going up from December onward, which is likely to go up further in quarter four. All right. And, how long, sir, do you see this, replacement cycle playing out? Is this something that you expect over the next few quarters, or is it just 4 Q? Yeah. So it is simple. Last two years, there were, there has been lull in the new vehicle sale. So new vehicle sale, now only it started picking up. Commercial vehicle did not pick up immediately after the GST cut. It has started only in December. In fact, December was very low. January, I'm seeing the peak demand is coming, and the passenger vehicle, whatever we have seen in the, you know, Q3, that is, it remains same, it's not going up. So now the disbursements are driven by the new vehicle sale or commercial vehicle side, which is going to also support the used vehicle side. Suppose new vehicle is continuously, I'm talking about the heavy commercial vehicle and light commercial vehicle, it's continued to grow at the rate of, say, 15% or even 20%, 10%-15%. Obviously, to that extent, the used vehicle is also going to come in terms of unit. Now, when you are financing it, the GV value is actually matter for financing. So if that is the case, 10%-15% is the unit number, it convert into the value, it comes to 20%+. And it can continue for- Got it. t ill such time, new vehicle sales continue. Got it. And, secondly, sir, the question was, more for Arul sir. Sir, how do you see now the cost of fund trajectory for you, given how the, bond yield movements have been, especially not just today, but I would say over the last, 3-six months as well? We have barely seen any, reduction in the GSEC rates. So how should we think about it, and consequently, the margins also going ahead? So, you are right. There has been no tightness in liquidity as well as on the rates. But I think the good part is we have a mix, which is also partly fixed rate borrowings. So there's still steam left in that to reduce more on the NCD side, on the market borrowings and the MCLR side on the bank borrowings. These two will still give us another 5 basis points-10 basis points on the cost of fund reduction in next quarter is working one. It should, you know, at least to a large extent, flow through to the NIM. And sir, beyond that? Beyond that, I don't think there is. I know. I think only. Beyond that, we need to- Not really. the NIM through business only. So in the quarter four, obviously, due to better collection, your other income goes up, and you have seen that last year, where if you take the investor presentations, you are able to see quarter four NIMs are always higher. So we are going to expect that also in this quar- in this quarter. Got it, sir. Thank you very much. I'll come back in the queue. I have just one more question, if it is there. Please, please. Next question comes in from the line of Akshay Jain from Autonomous. Hi, sir, thank you for the opportunity. So my first question is again on margins. So while you have indicated that, you know, next quarter, the margins will go up because of two impacts: one, cost of funds will come down, and, number two, other income, being, pretty well in 4Q. Currently, the NIMs are around 8% odd, and maybe next quarter, it, given your guidance or given your outlook, it can go up to, say, 8.1-8.2 range. But how should we look at FY 2027? Like, should we expect these, margins to be held, around similar levels, 8.1-ish-8.2-ish levels? Or, how should we think about NIMs incrementally, and what will be your incremental cost of funds in this quarter? Well, I said 5 basis points-10 basis points, you took it to 20 basis point. No, no, so I included the other income as well. So, no, no, all put together only, income. So the 8.81 could be the quarter four number, so overall we should end the year with around, you know, slightly less than the 7.9 we are talking here. I expect it to hold next year to a large extent, unless there is some drastic increase. I don't see any reduction coming through beyond current levels. So but, I also hope unless there are some, you know, macro issues cropping up, that should not be increased also. So we should hold at the current levels. Understood. And, on the AUM growth, while you have guided for a wide range of 20%-25%, and given the strong Q3 and your comments on continued strong January, so should we expect the AUM to grow, you know, at the higher end of this range? No. See, it is the same thing in the reverse way. When we drop, disbursement dropped in Q1, Q2, AUM didn't drop that far. So same way, when in one or two quarters of disbursement, you know, peaking, AUM will also not react so fast. So still we hold the 20%-22% AUM growth for the current year. Yes, we will look at opportunities to improve, but, I don't want to give any guidance beyond that. Understood. Any guidance on the credit cost front also? Because for this year, you had mentioned around 1.6%, and 4Q is expected to be strong for Chola, so- It's a fair question, so should I skip it? It's fine, sir. Like, if you can answer it, it will be great. Hello? Am I audible? Yeah, we actually, you have any other questions? No, it's fine. Okay, thank you. Thanks. Next question comes from the line of Arvind Ravichandran from Sundaram. Hi, can you hear me? Yeah. Yeah, yeah. So, my question is, most of my questions are answered, but, one question is on, like, you know, SBPL business. We are seeing like, you know, continuous increase in, you know, NCL and SBPL business. Like, I understand that it's, it's on the low base, like, so the growth is still coming through, but, do we see any risk to that, net growth in that particular business? And similarly, in LAP business, should we expect, you know, margins to... I mean, like, spreads to hold largely considering, like, mix is shifting towards small ticket LAP? These are my two questions. Yeah, I'll request the management to answer. There's no response on the line. Probably just hold on a minute. Oh, sure. The management should just be connecting with us any moment. Hello, Nischint? Hello. This is dial-in on my, your- Yeah, Go ahead. Yeah, I will just. Yeah, yeah, you connect, you are. Can you connect on this? Yeah, you are on the. Sir, you are actually on the, you know, on the Zoom call. You can ask your questions. Yeah, I hear that. Connect it. All right. You can, yeah. Okay. Can you hear us now? Yeah, you can. So, you can. Yeah. Probably, Arvind, you can ask the question once again. Yeah, yeah, yeah, sure. Yeah, please go ahead, Arvind. Yeah, yeah, thank you. Thank you for the opportunity. So my question is on SBPL business, where, like, you know, net credit cost is like moving up continuously for the past few quarters. So do we see any risks to growth there, like, you know, in the near term into that business? And are we comfortable with this level of credit cost? That is my first question. And second question is on LAP business. Like, you know, should we consider then, like, you know, spreads and margins to hold largely like despite rate cuts which has come through because of the mix change which is happening continuously? And if I can ask one more question, like, you know, in affordable housing segment, should we start to see again like disbursements growth picking up? Yeah, for SBPL, the credit cost, for Q3 may look higher, but it, it has basically reached a peak. We don't see any more damage, as far as credit cost is concerned. In fact, actually, if you go geographically, two of our zones have already started improving in December and January. It will reflect in, Q4 end or Q1, definitely you'll see stabilization of that, and up further to that, it, it will start going down. Also, we mentioned that in the past that, you know, SBPL is entirely a non-SARFAESI book. The collection is through a traditional way of doing, you know, legal and also the follow-up on ground. Traditional way of doing legal means that means it takes another 2-3 years time. It require a cycle of, you know, resolution of the cases which is there in the pipeline. Now we started getting resolution through legal in some market, and some market we yet to get it. That's the reason Ashish is commenting that the NCLs are picking up now here, and from here we can actually expect that the NCL will go down. And also, in the case of SBPL, we will, time to time, we will see that how we can actually do some, you know, ARC sale and reduce the Stage 3. That is also in the pipeline. Their PBT ROE is quite, you know, it could at a very high level, at 7.3%, and they will continue to deliver this. In the case of HLL- In case of LAP, if you look at last year to current year, there's a 20 basis points increase in the margin. But this is primarily, as I mentioned earlier also, it's primarily because of the, you know, product mix. We are continuing to expand our high, higher interest product. But equally also, we are expanding our geo to the Tier 3, Tier 4, which is also helping us in sustaining our yields. Now, the NIM will be about at the same range. We will continue to hold it at the same levels, and that could be slight increase in the. If you look at the Q3, OpEx is about 1.8%, and the YTD OpEx is 1.7%. It will again be at the same range bound, 1.7-1.8. I think there should not be any material impact on the overall ROE. If at all, that could be a plus, you know, 10 basis points maximum. Otherwise, it will be at the same range only. For HLL, growth side, we have seen a good quarter, and we hope to see, we have always maintained that, the book growth, the AUM growth will be around 28%-30%, and we see that coming, for next two years. Okay. Thank you so much. Thank you so much. Next, we have Nidesh Jain from Investec. Thanks for the opportunity. So my question is on growth and asset quality. So if I look at segmental data in home loans, our GNPA has been increasing. If I add the ARC transaction, in SBPL also, our GNPA has been increasing. There is slight increase in SME also. So what give us confidence in growing these segments? In the CSEL segment, when the GNPAs are increasing, we have slowed down the growth, but in these segments we are continuing to push growth. So what is giving us confidence to continue to grow despite increasing GNPA? So we have seen that in the case of HLL, LAP, and SBPL, even the SME, there are two types of customers who are getting into this Stage 3. One are they who can be resolved by the SARFAESI, and one is a non-SARFAESI. SARFAESI cases are getting resolved because in the, in this property business, mortgage business, when you have a property, you will get the money because they're appreciating asset. So there is no point that you're going to lose money unless you have a problem in the property itself. So we are confident that the, you know, underlying security is in place. It's just a matter of time, either SARFAESI, nine -month to 12-month, or non-SARFAESI, it takes two to three years. So that's the reason we have done the deal in the case of, non-SARFAESI in the HLL book. And we are seeing that even after doing all these things in the HLL, the steady state NCL going to be 0.5%-0.6%, and their ROE going to be point. the PBT ROE is going to be 4.5%. Similarly, in the case of LAP, they are commenting that they will be continue to deliver 3.7%-3.8%. And in the case of SBPL, again, they are delivering 7%+ PBT ROE. In the case of SME, as we mentioned that since the, the term loan book, which is actually again with the mortgage, of the property of the customer, which takes time because here the entire book is SARFAESI, but it is a corporate customer where the SARFAESI takes little bit more time because of the customer context completely, you know, for a longer period. And that's the reason SARFAESI cycle in the SME, it takes one and a half years, and we are seeing that some resources started coming in the month of December, which is going to continue in quarter four, and quarter four onwards, you will see a little better result in the SME in terms of the Stage 3 reduction and NCL reduction. Sure, sir. Okay, thank you. That's it from us. Yeah, thanks. Our next question comes from Sonal Gandhi of AMSEC. Yeah, thanks for the opportunity. So my question was more on the PBT ROTA. So for a long time we've been guiding, you know, that we'll be closer to 3.5%. Obviously, we understand there's issue with credit cost, but, you know, going ahead, maybe when we are also, you know, talking about consumer durable business, okay? So that's, that's a high, you know, infra-heavy business. Probably, ROEs would not come until you reach a scale. So how do you see OpEx, and how do you see PBT ROTA for CSEL and overall business say for FY 2027 and FY 2028? And, second one was on the impact of New Labour Code. So, are we done with the entire. I mean, have you taken the entire impact in this quarter, or is there anything remaining, for the Q4? Okay. They will, they will. Yeah, but- They will launch. Yeah, the CSEL still is a very small percentage of the overall AUM, around 7% of the overall AUM. And as we scale up, we will certainly make sure that it starts contributing at the same or a similar expectation levels of about 3% ROTA, and progressively build thereon from there. So that should not be a change. The larger impact would be once we connect the vehicle finance business and then the other businesses coming in with their expected levels of ROTA. That, those two will be the contributing factors to reach the 3.5% pre-tax ROTA. And, with regard to the labor code, yes, we have provided for the gratuity fully, for all the past period based on the actual evaluation, and that's been completely covered. The rest will be only on a month-on-month basis, changing, so there may be a slight difference in the salary cost as we do some corrections with regard to the wage definition per se, but I don't see that as a big game changer. Sure. Thank you, sir. Thank you. We'll now just take the last question from the line of Abhijit from Motilal Oswal. Yeah. Thanks, Nischint. Ravi, sir, just two questions. One is, I mean, if you look at this financial year, like, by 2025, 2026, right? I would say, I mean, difficult years from March 2024 to now, I mean, we've discussed in the past, right, that infrastructure spending has actually been very slow. I think I heard in the call earlier today that GST cuts, and you're seeing very good momentum in Q3, expecting that to continue into Q4. But if you look at the asset quality, right, I mean, from March 2024 to now, right, I mean, just one direction, things have kept deteriorating. Do you think this is just to do, I mean, with the weak macro that we are seeing, and for a significant improvement, because obviously, we are in Q4, we could look at a better Q4, but then we again head into the seasonally weaker first half of the next fiscal year. So, I mean, what do you think we really need, right, as an industry, we at Chola, right, for things to substantially start improving from here, in terms of asset quality? And the other thing is, in terms of non-interest income, are there any initiatives that we are taking to improve the fee income or the non-interest side of things, non-interest income side? Those two questions. Thank you, sir. So good morning, Abhijit. For the last one and a half years, starting, as you mentioned, 2024, immediately after the election, apart from the election year itself, that quarter itself, we started seeing that there is a problem in terms of vehicle finance, in terms of the NCLs are going up. And then it is coupled with. So in our business, we have eight business lines. Out of eight business lines, we have only two business lines where the NCLs are high. One is vehicle finance, the CSEL. So vehicle finance is entirely due to the macro, and CSEL is because of the partnership business has gone slightly higher. That is one reason, so it is not related to macro, I will say, it is because of the segment. And also in the case of CSEL traditional, which is INR 6 crore, we want to professional, personal and the business loan. It is because of the type of, you know, process which is being adopted by entire industry that, you know, at that point in time, the multiple fundings were happening. Customer, you know, for number of loans being given to one customer were high, number of inquiries were high. And that is the reason, in that segment, the NCL went up, which is because the number of players suddenly went up, and then the DSA, I think I can say that illegal advantage they have taken, and therefore that segment got impacted. Otherwise, when that segment was done by few, then problem was not there. So if you see CSEL and we have, we have business where INR 600 crore and INR 300 crore, put together INR 900 crore NCL is coming in quarter. I am expecting that, that number will start significantly going down because the capacity utilization in vehicle has improved significantly. And as you mentioned, that now Stage 2 is coming down, that means the, you know, collection efficiency has improved. That is going to start showing up in the NCL also from the quarter four. Now, coming to the, future, the seasonality effect is going to be there. There has been two problem in vehicle, seasonality and cyclicity. So I am expecting that the cyclicality problem is going to get resolved if the vehicle demand is continued to be there from now onwards, till next 3-4 years, as we have seen that the cycles are actually four years up and four years to 1, 1.5 years down. So that should, vehicle finance, the good news, if the cyclicality gets resolved, and seasonality impact is going to be there, and that is the effort we need to put it on the ground, which I think because during the cyclicality, we improve the collection, feet on the street, on the ground more. Then after the cyclicality problem get resolved, our collection efficiency improves significantly. So vehicle finance is going to be better, significantly better from quarter one. If the cyclicality problem is not there, seasonality is there. Now, coming to the CSEL, as I mentioned, the indication is that their numbers are looking better because the partnership book has already come down from INR 3,000 crore to INR 6,600 crore. So the partnership book, NCL, is completely getting eliminated from next financial year. And traditional CSEL business, their ROA, their NCL, is also started coming down. So both put together, their NCL will look better. As we mentioned that they can go down as low as 5%. So both the side, we are benefited in time to come. Got it. Thank, thank you, sir. And the last thing on the non-interest income side, are we taking any initiatives there to improve the- Non-interest, as such in our business, is not much the fee income. What we do it by doing the, you know, protecting the asset and the life of the customer. What we do ensure that good income is coming, and then other income is coming from the additional finance charges and all which we collected. So what is going to happen in the time, when the collection improves, I mean, this is very specific to vehicle finance. Whenever collection improve, their other income also grows, and that is the reason the fee income or other income, whatever you say that, is going to go up in the quarter four. And if that continued, as I mentioned, if the cyclicity is improved in quarter one onward, and their collection is improving, Stage 3 is coming down. During that period, for short period, for at least one year, you will see that their overall income will be high. Got it, sir. This is, this is all from my side. Thank you so much, and I wish you and your team the very best. Thank you. Thank you so much, Abhijit. Thank you very much. This concludes the call. Thank you, participants, for joining us today, and thanks a lot to the management for giving us an opportunity to host the call. Thank you. Thank you, Nischint.