Ladies and Gentlemen, good day and welcome to the Aptus Value Housing Finance Limited conference call hosted by Dolat Capital. As a reminder, all the participants line 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 Ms. Mona Khetan from Dolat Capita l. Thank you and over to you Ms. Khetan. Thank you. Good evening everyone and welcome to Q1FY25 earnings call of Aptus Value Housing Finance. We have with us the senior management for Aptus to share industry and business updates. I would now like to hand over the call to Mr. Anandan, Founder and Executive Chairman of Aptus for his opening r emarks, post which we can open the floor for questions. Thank you. Over to you, sir. Thank you. Thank you. Ma'am, ladies and gentlemen, good afternoon to all of you. I am Anandan, Executive Chairman of the company. I welcome you all to this conference call to discuss the company performance for the quarter ended June 2024. I have with me Mr. P. Balaji, MD, Mr. C.T. Manoharan, ED and CBO, and Mr. John Vijayan, CFO. The financial results and the investor presentations are available on the website of stock exchanges as well as our company. I hope everyone had a chance to look at it. With low mortgage penetration and significant housing shortage across regions, more particularly in Tier 2, Tier 3, Tier 4 cities where we operate and with the government initiatives supporting the sector, we believe that we are having a significant headroom for growth to serve the underserved and unserved customers in the areas we operate. At Aptus, we believe in strong growth without losing focus on the quality of loan book and good financial metrics. We are happy to record that Aptus had a solid first quarter FY25 supported by business growth, stable asset quality and continuous focus on productivity. Sharp business focus, good distribution network, deep penetration in the served markets, customer centricity along with appropriate tech support and diversified income stream have enabled the company to achieve good business results. We believe our net worth as you know stands over about INR 3,800 crore indicating robust capital adequacy. This coupled with good support from NHB banks, FDIs on the borrowing side and strong on-ground demand for both home loans and small business loans gives us confidence to pursue strong growth scalability in the coming years with sustained profitability. I now hand over the line to Mr. P. Balaji, MD, to discuss business focus, operating and financial parameters. Thank you. Thank you, sir. Good afternoon, friends. As we have been explaining in the earlier calls, we will continue to focus on key strategies, namely growing disbursement and loan book in housing loan and small business loans. Considering the large headroom available in the low- and middle-income segment in Tier 2, Tier 3, and Tier 4 cities. Increasing penetration in existing geographies by opening new branches and expanding operations contiguously in the states of Odisha and Maharashtra. Strengthen analytics and digital adoption. About 18% of our business in Q1FY25 has come from customer referral, app, construction ecosystem, app and social media channels. Our focus shall be to increase the leads through these channels. In addition to the physical branch network, continue to focus on productivity, collection efficiencies, OpEx and cost of funds. During the quarter we moved to mobile first lead management software system which impacted our disbursements in the month of April. But in the month of May and June disbursements were back to normalcy clocking 35% growth over the corresponding comparable two month period. Technology initiative will bring major advancement in our operations streamlining our processes. Service delivery lesser bounces, improved collection productivity, better regulatory compliance and improving overall efficiency. Major performance highlights are as follows. AUM grew by 27% year-on-year to INR 9,072 crore. Disbursements increased by 4% year-on-year to INR 675 crores. We have 278 branches as on date including 15 branches open till date. Of this, four branches are already operational in Odisha and Maharashtra. Four more will be opened in these states in Q2. Plan for the year will be to add 40 new branches. Total live customers were 137,000 customers. It was a growth of 27% year-on-year. NPA was at 1.3% maintained at the same levels as June 2023. Coming to the asset quality, collection efficiencies dropped to 99.18% resulting in 30+ DPD inching up to 60. This was mainly due to seasonality and also due to elections. This will be focused and collections will be improved further in the ensuing quarter. Net NPA was at 0.98%. Provision coverage ratio maintained consistently at 1.05%. We are carrying a total provision of INR 95 crores including a management overlay of INR 45 crores. This when computed as a percentage of NPA works out to a coverage average of 80%. NIM was at 12.8%. OpEx to assets were at 2.67%. PAT was at INR 172 crores 21% growth year-on-year ROE was at 7.73%. During the quarter our ROE crossed 18% and was at 18.13% which is one of the best in the industry. Now coming to the funding we have well diversified borrowing. Of the total borrowings, 64% is from bank, 22% from NHB, 14% from NCDs issued to IFC and also to Bajaj. Also securitization sufficient on balance sheet liquidity of INR 907 crore including undrawn sanction of INR 520 crore from bank. As you know we have not done any direct assignment of loan front ending of income on account of this. Now with these remarks I open the floor to the question and answer session. Thank you all. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touch-Tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Renish Bhuva from ICICI Securities. Please go ahead. Yeah, hi sir. Congrats on a good set of numbers. Just two things from my side. One on this disbursement growth, you know which we alluded to the spike upgradation but is there any impact of the RBI circular dated 29th April? Actually no. If you look at our disbursements, 95%-98% of our disbursements is through RTGS. Actually this RTGS planning we have started sometime in January 2024 itself. So with the results we didn't get impacted because of this RBI circular. And with the new system coming in more discipline has come up. Because of that the MODT gets registered before the disbursement happened. And because of that the only we are dispersing through RTGS except for the balance takeover and also the where we are funding the housing purchase cases where we need to give checks. Got it, got it. And sir, my second question is on the provision side. So this quarter, you know there has been a sharp fall in the total provisioning. But when we look at the, you know the indicators for asset quality like collection efficiency or 30+ DPD or even for that matter 10 DPD as well, you know all these three parameters has increased sequentially. And despite that our provisioning fell sequentially. So you know what extends that, sir? No, actually if you look at the provision as I told a little earlier we are carrying a provision of INR 95 crore which works out to 1.05% of our total assets. Total assets under management. This works out to 1.05% till 31 March. We are. We were creating this overlay, management overlay. So of this INR 95 crore, INR 50 crore is the provision that is required as per the ECL model. So the balance INR 45 crore is the management overlay which we are carrying. So in the month in the quarter of June we stopped creating this management overlay. And this drop in collection efficiencies and increase in stage 2 assets is because of the seasonal nature of the business. In the second quarter the collection efficiencies will improve. And in July we are seeing signs of that. So and also the asset quality has remained stable. Because of that we have stopped creating the management overlay. And this INR 45 crore will be continued. So that's the reason. Got it. So sir, it is fair to assume that going forward, you know, these are the total issue. Provision at 1.05 will remain static and there will be no further requirement for creating the management overlay. Is that the fair assumption? Yes, it will be at these levels. And if it is, only if the asset quality improves further we might take some benefit. But as of now we are not planning that way. Got it. So sir, what could be the credit cost guidance for the full year in FY2025? It should be around 0.3%- 0.35% basis points per person. 0.3 2.35. Okay. So this quarter at 16 basis points is optically low, is what. You know, just to add to what Mr. Balaji said, basically, you know, we follow, you know, somewhat conservative policy as far as the provision for NPAs are concerned and also dealing with NPAs. In fact, apart from the provision, any outstanding beyond 24 months we fully 100% write off. And so whatever the any account is outstanding only less than 24 months also will be there. When we say NPA, it is really between 91 days to maximum of two years. Only beyond two years completely written out. Within that also we have created 25% provision for the NPA. In addition to that there is this management total provision of INR 95 crore which includes INR 45 crore of management outlay. In fact this. We've been consistently looking at it and you know, too. Just to recall, even the actuaries have advised whether we want to reverse this. It's not fully partly, but we said we would rather not reverse this management overlay of INR 45 crore. But we will use this going forward. To support the business growth. So to that extent, the incremental provision for the quarter for the year is, you know, actually what is really required without disturbing our overall provision still at 1.05, which has not been disturbed. Only thing is if you put additional provision, it goes 0.05 further and increase the management outlook further. So you know that is the reason we have taken the call. While the overall provision will maintain around 1.05-1.06. That actually covers up to 80% of our NPA. In our NPA, this INR 95 crore of the provisions available accounts for 80% of our NPA. So given that, you know, the debit to the P&L account in the first quarter is slightly less because of the without really, really reducing any provision and without really reversing any management overlay. Got it. Got it. Got it. Okay. Okay. That's it. Thank you sir. Thank you. The next question is from the line of Kunal Garg from IIFL Securities. Please go ahead. Good evening sir. Congratulations for the good set of numbers. My first question is, may I know the gross write-off during this quarter. As you know, as Mr. Anandan told, the write-off is basically is a technical write-off. So that means any asset which is going beyond 24 months that is getting debited in the P&L account. So if you look at it, I think it was it is around INR 1.65 crore is the write-off that has happened in this quarter. But as against that, the old bad debt recovered is around INR 1 crore that is getting accounted for in the other income. Okay, answer my second question on your ECL model. So for how many years of data? You are using for your ECL model it's basically right from the inception that is being used for the purpose of calculating the probability of default and the loss given default. Okay. Yeah. Live customers payment patterns are getting analyzed. Okay. And Mr. Last question is your 30+ Has increased significantly in this quarter. So any particular product or any particular. State where you see stress in this 30+? No, it's not that way. I mean we are not seeing any stress in any of the states in particular. It is discussed across all states. Okay. So any reason for increasing this 30+? As I told earlier, it is basically because normally in any NBFC the first quarter is slightly subdued whether it is disbursements or whether it is collections. Because of the hard work done for the last quarter of the financial year. So that is the, that is the reason. And of course the elections also played a part because in some states the elections were in June and in some states elections were in April. So that also played a part in getting the money collected. So that is one thing plus this. So otherwise we are back to normalcy in July. Actually, if you really see our last year like a record, also if you can see it in the presentation, last. Year, first quarter the AUM was at. About 1.1 and then progressively it came down to 1.07 by March 2024. Because then after this 1.29 in the Q1, it came down in Q2, came down in Q3 and then came down in Q4 to 1.07. So again with 1.29 of Q1 of last year, so happened we are at 1.3 in GNPA, you know, Q1 2025. Despite this, you know, whatever is the problem is caused by the election and things like that. Okay, thank you sir and best of luck. Thank you. The next question is from the line of Balkrushna Vaghasia from Axanoun Investment Management. Please go ahead. Good evening sir. My first question is related to the. Industry as a whole. So if I look at. The microfinance industry which sell to the bottom of the pyramid and then comes I think the small business loans and housing loans in the Tier 3, 4, 5 cities and rural. So when I look at the micro. Finance, it is kind of a highly. Cyclical, if I take the data of last 15 years. Now comparing that to our industry, what is your perspective on the cyclicity. Of like affordable housing as well as. The small business loans that you are. Granting in the areas you are operating? Like how much cyclical is the business that we are in? See, actually I don't think it is right to compare the microfinance industry with say loans that we are giving. Because first of all, microfinance is an unsecured loan. Whereas in the loans which we give it is fully secured and fully secured by self occupied residential properties. That's the first thing. And also if you look at the average ticket price of any micro finance, it is between INR 50,000 to maybe INR 200,000 at the most. Whereas in our case the average ticket price is almost INR 900,000, which means the quality of the customers are very well above the microfinance kind of customers. And also we fund for the construction of the property alone. In our case, a typical customer of Aptus or any affordable housing finance is that you will typically have a land of his own and will be you will want money for construction of the house. And we also fund part of the construction cost resulting in the LTVs which between 35%-40%. And most of the cases the customer lives in that house. So with the result, I don't think the cyclical nature of the industry is not applicable for the affordable housing industry because it is his asset and he is living in that house. And the moral responsibility to pay back the due is much more than in the case of a microfinance industry. Also, as you're aware, the interest charged by the microfinance companies far higher. It's, you know, anything about 24%+ kind of thing. Anything between 22 and 28 or so. Up to 25%-26%. Whereas in the affordable housing company the interest charge, you know, is not that high. So that because of that the EMI because interest is lower, EMI also serviceability becomes, you know, this year. And really it's really for them, as Mr. Balaji said, it is for really living purpose. In our case, 80% of what we have funded customers are living in that house. And we are also saving in the rental because they are living their own property. Right. Second question is related to employee turnover. Like if I look at the industry data, specifically the players who are listed and who are not, like the government bank sponsored or something like that. I mean I exclude, if I exclude the government sponsored like HFCs. Employee turnover is very high in the industry. Of course your data is like one of the best. But overall the employee turnover is very high at the industry level. So what. What are the couple of things that you can attribute to this particular scenario? In our case. See, I would like to answer this in two parts. One is the level, one is the people at different levels. One is the band one which is the top management where there is no attrition. And also the band 2 which comprises of the middle management, associate vice president and vice president and the state and area managers and regional and cluster managers. There is no attrition there. And the attrition is around 4-5% there. And the third one is the branch managers again there the attrition is around 10%. At the field level the attrition is high. I mean it is not low for us as well it is between 30%-35%. So that is a challenge which we need to handle. And we are incentivizing all the branch managers, managers and also the field staff to the extent possible. But we also draw productivity out of them. But beyond that, if they are not performing then either we need to take a call to ask them to go out or they themselves go out of the organization. So that 30%-35% is a challenge which we are tackling. But at the top level there is not much attrition to be as a challenge which is posing as a challenge. Actually you know, too, in fact Mr. Balaji said the attrition is large not only for us, most of the financial players as you know, it's only at the field staff level, either the field level sales officers or field level collection itself where their average age is between 25-30, you know, in that age group. Now what we are trying to do is that, do a lot of homework at the time of recruitment and induct them through proper appropriate handholding and training. We have also introduced an incentive, you know, a retention bonus for them if this guy stays with us, you. Know. Up to eight months. Now maybe from six to eight months they get a bonus because we found that based on our past experience the attrition happens largely in the first six months really. You know, so then we said we've started taking a lot more care and in fact after you know we find some of the actions that we try. To initiate. You know, to really reduce attrition and we do see some positive impact you know, when compared with the. Maybe some of the other industry players. Including some of the larger private sector banks as you know, where the attrition is around 45% and upwards. We are, you know, our attrition even lower, slightly lower than that. It doesn't do that. Right, right. Third question is related to like NHB refinance. So what is the fund that NHB has you know, targeted for refinance for the current financial year and how and what on what basis NHB allocates the fund and how much we are targeting to borrow from NHB in this year? See if you look at this NHB, we apply in fact for refinance right from the first year of operations. NHB support has been there. That's the first thing. Next thing is every year we have been applying to NHB and NHB has been supportive enough for us to give the refinance facility. Last time they gave INR 300 crore. The year before they give finance. This year also we will be applying. But the decision making at the NHB normally comes after our AGM, after the annual return is filed and then we need to file, give all the relevant information to them. They process it and the refinance sanction comes sometime between September and October after which we'll be drawing the funds. This year we are planning to approach NHB, approach NHB for a facility of around INR 750 crore. We need to see how they give. Of course they have their own internal parameters of how they rate, how they have a rating associated with all the housing finance companies. Based on that they arrive at the amount and give the money. That's the process which NHB follows. Every year we have been applying for that. So our experience has been very good and very positive because they've been supporting us a lot. That's why today our funding closer to about 22%-22%. If funding, you know, has come from NHB only. So you know, and not only even after giving the funds when they come for the audit. The NHB audit has got two components. One is a regulatory audit. Second is really refinance audit. In case of our refinance audit, if they are happy, everything is good, they tend to give more. Right? Right. What is the amount that? You would have written off so far in the existence of the company? Mr. Balakrishna, may we request you to return to the question queue for follow-up questions as there are several participants waiting for that. Sure, sure. Thank you so much. The next question will be from the line of Kunal Shah from Citigroup. Please go ahead. Yeah. Hi. So anything to link say the collection team rationalization to collection efficiency or that's a separate part? Would we look at more rationalizing the collection team from here? No, no Kunal, that's part of our everyday operation. See, we look at productivity of each of the collection officers, and suppose it's in a branch if the bounces are say 120 bounces and if there are three collection officers and I don't think we need three collection officers because every average collection officer can do 60 receipts per month. So if that happens then we normally rationalize it either transferring him to some other branch or making him do more. So that is. That is one thing which we followed diligently and then monitor the mis and then take actions on these kind of things. And that's how the collection officers numbers have also come down as compared to the earlier quarter. So it brought up the rationalization impact. And also, what is happening is with the new system that is going in, we expect the early signs are that the bounce rates are coming down. So, anticipating that also. So we are, we are slightly rationalizing the collections manpower. Sure. And secondly, with respect to this ECL provisions which we are maintaining at 1.05, 1.06, would there be any read through in terms of how the trends in 30+ DPD would be? And then we would want to create some buffer out there because, see, when we look at it in terms of the aspiration that we had on 30+ that number, maybe this quarter again went up quite high to 6.3. No doubt over the quarters we see it improving, getting into Q4. But somehow, when we look at it maybe in terms of the aspiration level and the ECL that seems to be moving in the opposite direction. So should we link that if there is an increase in the rise then we will see higher coverage. See if it is increasing. See, as of now, the ground level is collection efficiency but doesn't indicate that kind of a thing though the ratios are that way. The, it is basically this quarter it has increased because, as I explained, because of the seasonality of the thing. Otherwise, it is being consistently maintained between 5% to maybe 4%- 5% at this stage too. So. So we are not seeing that kind of patterns on the field because people are able to collect the money. If we see some strain addressed at the field level, we will be surely increasing the provision coverage at that level. Okay. Now we are back on collection efficiency to 100%+ in July. I can't reveal those numbers but definitely it is really good compared to. Last on states. Any specific trends with respect to states or it was more broad-based the election impact and. Or maybe we saw the deterioration in collection efficiency slightly higher in few of the states. No, no, it is not the view of the states. It is basically, if you look at it, I think two of the states had the elections in June. So that was the problem. And other, of course, the seasonality. That's all. Okay. Okay, got it. Thanks. Thanks. All the best. Yeah. Thank you. Thank you. The next question will be from the line of Harshit Toshniwal from Premji Invest. Please go ahead. Hello. Hello. Yeah. Yes. Yeah. Hi sir. Thanks for the opportunity, sir. Sir, I think the question is more with respect to the shift in the regional mix which we have seen. So I think this quarter Tamil Nadu portfolio has worked pretty well. There has been a slowdown in the Andhra Pradesh book and a pretty sharp slowdown. If you can help us explain what were the individual dynamics within both the state or if election was a reason to slow down slightly in Andhra Pradesh? Just a sec. I don't know where you got this number from? Andhra, there is no slowdown at all. Go down. Go ahead. See if you look at the year-on-year growth, Andhra Pradesh has grown by 43%. Tamil Nadu has grown by 10%. This is, I'm talking about the AUM and in Telangana it is grown by 43% and Karnataka it is grown by 24% resulting in the overall AUM growth of 27%. So this is the number that has there. I don't know on what basis are you telling the Andhra Pradesh growth has come down. Let me. I found that sequentially it was lower, but maybe I would have punched the. Number if it is. Don't worry, Arad. I think if it is relating to specific numbers, we can have a specific call and get this clarified. Okay. Yeah. Thank you very much. The next question will be from the line of Rajiv Mehta from Yes Securities. Please go ahead. Yeah. Hi, good evening. Congrats on good numbers. My question is on disbursement. So what we saw in May and June was a very good comeback. But as a run rate, you know, are we, are we running on that, you know that momentum in July to start off this quarter and whether. Can you look forward to say maybe INR 1,000 crore disbursement, you know, coming in second quarter? Definitely, Rajesh, we are very confident of achieving INR 1,000 crore disbursement in this quarter. The signs are very positive in the month of July as well. In fact there has been a 27%-28% growth over July 2023. Things are looking better. That's how it is. I mean, I think I've answered this question. Sure, sure, sure. Our overall guidance, what has been given? You know, we are confident of pursuing that overall guidance that we given. We have given the guidance of about. 30% growth in our disbursements. That we are despite this little thing that's happening because of system in April, we are very, very confident we'll catch up with it. Our overall guidance of 30% and which will be visible in the second quarter itself. Yes, as we have seen in July, it's very good growth and we are seeing that happening in August and September and going forward for the year as well. Thank you. And just one question is on cost of funds and spread. So I mean if you can elaborate on the trends in incremental cost of funds and how do you see it going in the coming months and hence how should we look at spreads? See, if you look at the cost of funds, it has been stable for the housing finance company. We are able to raise additional funds, incremental funds between 8.5%-8.6%, and of course that is also getting linked to the repo rate. So that is one thing which we are observing on the field. But if you look at the NBFC borrowings, banks are increasing the rates. One is. Of course in the HFC gets classified as priority sector as well. So with the result I'm getting the funds around 8.5% but in the end because of the risk weights getting increased by RBI and also the credit to deposit ratio being higher, we are seeing banks raising the interest rate. With the result earlier we were raising funds around 8.9%-9% in the NBFC this has gone up to say 9%-9.2% now. So with the result that the additional funding that is required in the NBFC there will be an increase in the cost of funds to that extent there can be a NIM compression maybe I am expecting 0.1%-0.15% NIM compression because of that on the total book clear. Sir, thank you so much and best wishes. Thank you. Thank you very much. The next question is from the line of Chinmay Nema from Prescient Capital. Please go ahead. Hi, sir, thank you for taking my questions. Firstly, could you provide some sense around the asset quality on a vintage basis? As in, what does the asset quality? Looks like on our one-year-old. 2-year-old book and what's the right vintage to assess the loans in your category? I didn't understand the question. So what does the asset quality look like on the loans that were disbursed one year back and on the loans that were disbursed two years back? Just trying to understand how the asset quality progresses as the loan seasons. See if you look at the June number, it is working out to say the lag delinquency for one year is around 1.5% and maybe if you look at the two-year lag it will be around 1.8%. This is the June number. If you compare it with the March, it will be lower because it should be around 1% or it should be around 1.3% for one-year lag and around 1.5% for two-year lag. If you are looking at the financial numbers for FY as on the year-end. So that's the trend we are looking at and we are absolutely fine with those numbers. Yeah, because of the collection efficiencies at around 100%. We also have a system of tracking what we call the tracking the early default. We, you know, for example last 15 months we have, you know, whatever all the transactions done in the last 15 months, how did they really perform and if there is any visibility in terms of customers tax account and is there any, you know, budget bonds are higher or is there repayment is coming. So in other words, indication of our default percentage will tell us in terms of all the new accounts are coming on board. They are being monitored continuously on an ongoing basis for the first 15 months account by account. And also not by account by account, by branch by branch, by the say the branch originate, the branch manager who's originated it, the sales officer who has originated it. The root cause of any early delinquency is it because of the end use related or our own employee related or location related. So that way we do a root cause analysis for all the early delinquency, early defaults and then inbuilt into our credit appraisal approval system. So that really gives us a comfort in terms of, you know, you know, these keeping track of the, you know, lag delinquency and lag outstanding and things like that. Understood, sir, understood. And secondly, could you talk about a post disbursement tracking mechanisms in the sense that? Do we do a bureau scrubs, periodic bureau scrubs once we have disbursed the loans or keep a check on the other loans a person might be taking after taking on a housing loan? Or is that not part of the. Process. As regards the post disbursement. First, end use is checked properly, see whether it is for the purpose of construction of the house. Obviously the money gets disbursed based on the stage of completion of the construction. So the end use is clearly monitored. Even in the case of small business loans. The purpose of our loans is for enhancement of our business of the customers. So if a customer borrows for enhancing the businesses of them. So after disbursement, maybe three months down the line that there is a post disbursement audit conducted at the field to ensure the end use of the funds. As regards the CIBIL records or the credit bureau records are concerned, three or four years after the disbursements are done, maybe we also do a credit bureau check on whether he has got any other loan. We also do an analysis of whether he is paying us rightly correctly and whether for the other loans he's not paying or is he paying correctly. That kind of analysis are also being done. Those, if something happens, if some data is coming out which is not okay, we monitor those customers more closely. Understood. And my last question is on underwriting. So we have a centralized underwriting system but just trying to understand that because we have a high share of salaried, sorry self employed customers in our mix. How do you deal with the subjectivity of cash flows associated with such customers? Could you talk about what happens at the branch level or what to what extent underwriting happens with the feet on street team. Some sense around this. If you look at the typical structure of a branch, there is a branch manager, four or five sales officers. The duty of the sales officers is to procure the lead from the field and then pass it on to the credit officers of the branch. So these credit officers goes and meets the customers and then understands his business, goes through his cash flow and then he does a business education, he does a resident verification and then gives a credit appraisal memorandum that is being done. One more thing, what he does is we have something called asset creation. Suppose if a customer comes and tells me he is earning INR 50,000 a month, at least 50% of that has to be in a tangible asset creation. He should show us the proof. By tangible asset creation we mean it can be an investment in a piece of land or a fixed deposit or a chit fund or something which is tangible where he is able to prove. So once this is done, the proposal gets into the head office where a team of 40-50 people analyzes the credit appraisal memorandum. If there is a need, they talk to the customer, understands the business of the customer again and then takes a call on whether to give the money or not. And for this purpose we have got around 60-70 profiles of customers where we have developed over the period of last 15 years. And then for each profile of the customers we have a cash flow analysis and. And also what kind of profit those kind of profiles will be making. Yeah. Then currently what we are doing is we are also using the services of the Account Aggregator wherein the bank statements of the customers are analyzed for their cash flows. That is also being done for evaluating the customer. Understood. That's very helpful. I'll join that with you. Thank you. Ladies and gentlemen. In order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. I repeat, please limit your questions to two per participant. The next question is from the line of Deepak Mandhana from Avigna Investments. Please go ahead. Hello. Yeah. Yeah. I have two questions. One is what would be your loan to what would be your average loan tenure and what would be your average loan to value in each of the segments: housing loan, quasi housing loan, and your small business and personal? Just a bit. See, if you average tenure of loans for the housing loan is around 9.59 years. We give up to 15 years. But the average tenor is around 9.59. For the non-housing loans it is between 8.5-9 and for small business loans it is seven years. And LTV for the housing loan is around 37%. For the non-housing loan it is around 42%. For the small business loans it is around 40%. Okay. The second question is a follow-up on this. Now considering your most of the loan book is on fixed loans on the fixed rate. So going forward obviously because of the direction from Fed as well they would start reducing rate. So probably the Indian banks, the RBI would also start reducing rates. So how do you see that business? Because people if you have a fixed rate so there would be difficulty in getting the old customers in terms of the tenure that you have given to stay with you because they would, they would want to do a BP with some other financiers. No, actually I will see this as a benefit because what will happen is I have got. If you look at the interest rates which we charge, it is on par with any other company. That is the first thing. Next thing is if the interest rate comes down, I think we'll be, will be the beneficiary. Now your question is whether these customers will go to somebody else. Our past strength is not indicating that for the last 15 years our preclosure rates are at 7% or 8% of that almost 70% of the precursors is from the own source. Out of 8%, 5% is from the own source. So, so we are not seeing that kind of a trend. So if it comes we need to see. But as of now we are not seeing those kind of trends. Okay. Any growth of business in Karnataka that has been seen? Because I don't see much of the growth in the state of Karnataka. 28, 29. No, no. Actually, you will see lot more growth coming from Karnataka. You know in this year, right from. You know, this year and this quarter itself. In fact, in Karnataka we are also adding more branches, and you know more branches are really getting added in Karnataka and in Telangana in our existing states. And apart from the branches that we are adding in Maharashtra and new state. In the existing stage, we are focusing. On Telangana and Karnataka, and we are quite happy with the growth started coming already. Thank you. Thank you. The next question will be from the line of Raghav Garg from Ambit Capital. Please go ahead. Hi. Thanks for the opportunity. Sir, just two questions. One, why is there a decline in the Tamil Nadu loan book on a quarter-on-quarter basis? It seems to have declined by almost 2% on an outstanding basis. Why is that? Tamil Nadu loan book has grown by 10%. Okay. Quarter-over-quarter. That is the first thing. And see, as you know, we have been. Sorry, 10% YoY, right. Yeah. In terms of YoY. And if you look at it, we have been indicating in the last, last year there were some problems relating to employees, staff attrition. Because of that, the loan book and the disbursements were not that great in Tamil Nadu in the last year. Now if you look at it, we have taken steps to correct it. And the last quarter of last year the disbursement growth was 9%. And in this quarter, the disbursement growth as compared to the corresponding period of last quarter, quarter was, barring April was 15%. Which means we are able to see good improvements in Tamil Nadu. We are targeting at least 20% disbursement growth this year in Tamil Nadu and we have to correct one or two clusters. But that will be done in this quarter. And once that is done, we can safely assume a 20% growth in Tamil Nadu as. Sir, would it be fair to say? That whatever attrition issues or staff poaching issues that you had highlighted last year, you know, considering those there may have been cases where employees, you know, took some of the business from you to, you know, wherever they went. Is that the right way to think about this? No, I didn't understand your question. Yeah, no, so. What I meant is that, you know, you had highlighted staff attrition issues in your company last year. Is it fair to assume that, you know, the employees would have taken away the business, you know, would have done a balance transfer after they went to that new company? See what happens when a group of people leave from one company to another. The first thing they target is to get the loan that they have sourced in the older company because that's the easiest way to show performance in the new company. Right. So that normally happens, but over the next or maybe one or two months, it will happen. After that it is winded down. We don't see that kind of a issue as a big issue. It might be there for one or two months. Understood. So no, sir, my only reason to ask that was that, you know, there has been a consistent decline in the Tamil Nadu, you know, growth rates which prompted me to ask as to why has the book declined on a quarter-on-quarter basis. And even if you look at on a YY basis, the growth rates have been coming down. So that was the only reason why. So that's why. But this time it becomes. Yes, sure. And sir, how are collections trending in July so far? I understand that disbursements are up 27%-28% like you highlighted. But how are collections doing or how are collections in July? In July. I can't reveal the number but it has been very good. It is much more. It has improved a lot as compared to the first quarter of FY25. We are seeing good, good improvements and we are pushing people to collect more. No problems there. Thank you. That's all from my side. Thank you very much. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Hi, thanks for this opportunity. The first one is if we can. Specify the number of loans in home loans and LAPs that we have done. This quarter versus, say, on a QoQ. Basis and on a YoY basis. The second is, are we deploying any account aggregators and any other technology providers? To do ID, ID verification or you. No, bank statement analysis? Guys, like, so how what all parts. Of technology is being deployed? That's the second. Yes. First, first, I'll take the second question. I didn't understand the first question, but first, second, we are using the services of account aggregator and account aggregator we are using for the purpose of bank statement generation and also the bank statement analysis we have tied up with CAMS and they are giving both. One is the account aggregator, then the bank statement analyzer also. Now that has been plowed back into the credit evaluation mechanism itself so that the adoption of account aggregator has been increasing month-on-month. And also in terms of the loan loan agreement execution, we have tied up with the firm called Leegality where all the, all the loans that we disburse the loan agreement execute, the loan agreement execution is done on a tech platform. The first question, what was that? I didn't understand the first question. The first question is fairly simple. It's just a data point. The number of loans that we have. Done in the home loan category and. The LAP category this quarter versus on a QoQ basis and on a YoY basis. Yes. Volume. Volume. I'll give it to you a little later. I don't have that right on hand. It will be very helpful if you. Could do it during the call. Thanks. Thank you very much. The next question is from the line of Varun from Kotak Securities. Please go ahead. Hi, sir, I have two questions. The first one is with regard to Tamil Nadu disbursement guidance. As far as I remember, last quarter we had guided for 30% growth in this year. And before in the call you had guided for 20%. So is there a cut in guidance? No, no. 30% guidance we have given for the company. The 20% guidance was given for Tamil Nadu. We are still maintaining the 20%. If you look at the disbursement growth year-on-year for this quarter, it has been 15%. We will, we are confident of cutting this 20% in this year. Actually, the growth that we are getting. Outside Tamil Nadu, particularly in Andhra, Telangana is much, much higher than even 30%. So, so whatever, you know, the 20% that we are talking about is only for Tamil Nadu. But outside Tamil Nadu, other than Tamil Nadu, our growth rates are higher than that. And that's where we are indicating a growth rate of 30% at the company level. So basically this growth is coming out of expansion in terms of new branches in the existing states, namely in Telangana and in Karnataka also the growth is coming, you know, out of enhanced production productivity from the sales officers. Now we are moving to 3.5 files per staff per day. That's moving up to four. So you know, as the growth also is coming on account of small increase in the ATS average ticket size, we are looking at anything between 8%-10% increase. Because our average loan size of about INR 9 lakhs is tending toward moving towards about INR 10 lakhs. So in other words, the overall growth of you know, 30% that we are disbursement growth that we are guiding is really take into consideration factors in terms of new branches in existing states, new branches in the new state, increase in productivity for sales officer the productivity and increase ATS. So because of that we are getting the overall 30% while in Tamil Nadu. Yes, we are moving from the last year, we are improving this year to about 20% and going forward we will improve further there also. Okay. The second question I had was with regard to the rate hikes that we had implemented in the previous quarters. We have not really seen a benefit on the yields. When are we going to expect some flow through to the yields? If you look at it, I think from 17.15 or so it has become 17.36% Is referring to the other income. Because of the effort. Okay. If you look at the ROA tree, it has. It has not increased much because there are some volume related income which gets booked and in April because the volumes got impacted from 17.6 last quarter to just become 17.67. It is because of the disbursement which didn't happen in the April. If that has happened, it would have become 17.9. Actually, we have just worked it out, but it is. It would have worked out to 17.9. Okay, so then that 10-15 bps NIM compression that we're guiding for includes whatever benefit we might get from the rate hike. Yes. Yes. Thank you. Last question for today will be from the line of Chintan Shah from ICICI Securities. Please go ahead. Hello sir, thank you for the opportunity. So just to dive into Tamil Nadu so sir, I think we have slow. The growth rate has been slow relative to the overall growth for us. So if we look at the AUM. If it is due to attrition then probably it would be a normal case and it won't be extended. But it looks like this slowdown has been now extended. So is there anything structural to it given that it is also our oldest state and the biggest state for us? Yeah. So any thought I think we have explained a lot on terminology. What has happened is we had problem in the second quarter and the third quarter of last financial year which we corrected. It was basically the attrition. This has been corrected now with the new people joining and with more people. More people and also new people joining. The disbursement growth was 9% in the last quarter of the last financial year. Now this growth has become 15% while we have around 18 clusters in this time Tamil Nadu we. There are two or three clusters which is still to be corrected. If this is. This is corrected we will have. We are very confident of pursuing this growth at 20% this year and that's what we are guiding for Tamil Nadu and this will happen now the acquisition problems have got sorted out but the new people to get acclimatized with the way we operate that is taking some time and obviously we need to give them that time. Right. So that's what is happening. So. So you told that there are two, three clusters which are pending. So that also is not the. There are some measures to be taken with regard to attrition or is there anything? No, no, that has been sorted out. Only thing is we need to have more productivity from the people people. That's it. Other than that. Nothing else. Yeah, that's it from my. Thank you. Thank you very much, ladies and gentlemen. That was the last question for today. I would not like to hand the conference over to the management for closing comments. Thank you. Thank you for organizing this conference call. I would like to pay my sincere gratitude to all analysts and investors, friends who have taken time out to listen to us today. Please feel free to connect with us in case you have any further queries or questions. Thank you very much. Thank you. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.