Ladies and gentlemen, good day and welcome to Aptus Value Housing Finance India Limited Q2 FY25 earnings conference call hosted by Dolat Capital. As a reminder, all participant lines will be in 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 Mrs. Mona Khetan from Dolat Capital. Thank you, and over to you, ma'am. Please go ahead. Earnings conference call of Aptus Value Housing Finance to discuss its Q2 and H1 FY 2025 performance. We have with us the senior management from Aptus to share their industry and business insights. I would now like to hand over the call to Mr. Anandan, Executive Chairman of Aptus, for his opening comments. Over to you, sir. Thank you. Thank you, Mona. Good evening, good evening. Good afternoon to all of you. My name is Anandan. I'm the Chairman of the company. I welcome you all to this conference call to discuss the company's performance for the quarter, half-year, ending September 2024. I have with me Mr. P. Balaji, MD, Mr. C. T. Manoharan, Executive Director and CBO, and Mr. Sanjay Mittal, the CFO. The financial results and the investor presentations are already available on the [audio distortion] company. I hope you have a chance to look at it. With low mortgage penetration and significant housing shortage across regions, more particularly in Tier 2, Tier 3, and Tier 4 cities where we operate, and with government initiatives including recent support schemes supporting the sector, we believe that we are having significant headroom for growth to serve the underserved and unserved customers, largely in self-employed segments. At Aptus, we believe in strong growth without losing focus on the quality of loan books and good financial metrics. Very happy to report that Aptus had a very good first half-year of 2025, supported by business growth, stable asset quality, and continuous focus on higher productivity. Sharp focus, business focus, good distribution networks, deep penetration in shared markets, customer sensitivity, along with appropriate tech support and diversified income streams have enabled the company to achieve good business results. As you know, our network stands over INR 4,000 crores, resulting in robust capital adequacy. This, coupled with good support from institutions like NHB, banks, mutual funds, and DFI on the borrowing side, and with strong on-ground demand for both home loans and small business loans, gives us confidence to pursue strong growth in the coming years with sustained profitability. I would now hand over the line to Mr. P. Balaji, MD, to discuss the business focus, operating, and financial parameters. Thank you. Thank you, sir. Good afternoon, friends. As we have been explaining in the earlier call, we will continue to focus on key strategies, namely growing disbursement and loan books, both in housing loans and small business loans, considering the large headroom available in the low and middle-income segments in Tier 3 and 4 cities, expanding operations contiguously in the states of Odisha and Maharashtra, and increasing penetration in existing geographies by opening new branches. Strengthening the analytics and digital adoption, about 20% of our business in Q2 FY 2025 has come from customer referral, customer application, and through social media channels. Our focus will be to increase the leads through these channels in addition to the physical branch networks. Continue to focus on productivity, collection efficiency, OpEx, and cost of funds. During the quarter, the new mobile-first lead management software, which was launched in April 2024, settled well and is bringing in good improvements in terms of streamlining our processes, service delivery, turnar ound, improved collection productivity, better regulatory compliance, and improving overall efficiency. We are continuously monitoring the functioning of this new system to bring in more improvements. Major performance highlights for this quarter half-year work as follows: AUM grew by 27% year-on-year to INR 9,629 crores, disbursement during the quarter increased by 26% year-on-year to INR 935 crores, sequential quarter-on-quarter growth was at 39%. We have 291 branches as of today. During the quarter, we opened 24 branches, and for the half-year, we had opened a total of 29 branches. Plan for the year will be to add a total of 40 branches. Total live customers were at 145,000 customers, growth of 27% year-on-year. NPA was at 1.25%. In terms of asset quality, collection efficiencies were at 99.28%, and our 30+ DPD marginally improved to 6.24% as of 30th September, as compared to 6.31% as of 30th June. Net NPA was at 0.94%. Provision coverage has been maintained consistently at 1.03% as of 30th September. We are carrying a total provision of around INR 100 crores, including a management overlay of INR 45 crores. On this, when computed as a percentage of NPA, it was set to a coverage of 82%. NIM was at 13.02%. Cost to assets were at 2.65%. Profit after tax was at INR 354 crores, representing a growth of 22% year-on-year. ROA was at 7.77%, and ROE was at 18.3%, which is one of the best in the industry. In terms of funding, during the quarter, we diversified our borrowing further by issuing NCD worth INR 400 crores to mutual funds of the borrowing. 59% is from banks, 19% from NHB, 11% from NCD, which is the mutual funds [audio distortion], and the balance in the securitization. The balance sheet liquidity of INR 1,239 crores is maintained, including an undrawn portion of INR 560 crores from banks. As you are all aware, we have not done any direct assignment of loans, leading to no upfronting of income on account of this. Now, with these remarks, I open the floor for the question- and- answer session. Thank you. 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 their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use the handset while asking a question. Ladies and gentlemen, we will wait for a minute while the question queue assembles. The first question is from the line of Renish from ICICI. Please go ahead. Yeah, hi sir. And congrats on a good set of numbers. Sir, just two questions from my side. One on the LAP book, right? So is it possible to share, let's say, what percentage of our LAP book customers might have MFI loans? Actually, there is no overlap. We just did the scrub report for the live customers we have with us. Actually, there is no overlap of MFI customers with the kind of our customers. Okay, okay. And secondly, given there is a lot of noise surrounding growth for NBFC, do you foresee any risk to our near-term growth targets because of the regulatory pressure? No, I think this will be a question which will be in the minds of quite a few analysts and the persons who are in the call. I would like to explain this RBI stance, which we have understood in a certain way. I'll just slowly explain this so I can, then we can take it forward. From what we understood, RBI seems to be more uncomfortable on the following things. One is unsecured loans, MFI, unsecured loans, personal loans, considering the transition of personal loans and consumer loans, including the loans given by similar companies, and secured loans with very small secured size from, say, INR 2-INR 3 lakhs. They seem to be uncomfortable if these companies want to grow at 40% or so, and they also seem to be uncomfortable about the usurious interest rates charged by them at over 24%. And they are also not comfortable with the splitting of, of loans leading to the evergreening of loans, which is being practiced by some of the players in the industry. They are also interested in the fact about the importance of being transparent with the customers in terms of pricing and fees that are being collected from the customers. All this, I would like to have a study where we have already studied the impact of this. In terms of impact on assets, first, we are in fully secured loans, both in housing and non-housing, and the security is mostly self-occupied residential properties. And we are giving a guidance of 30% AUM growth at the lower base, and we are also charging interest rates which are reasonable across products. Our ATS is around INR 8-INR 9 lakhs, with an interest rate of around 35%-40%, which means the security value is around INR 30 lakhs or more. We do not follow any netting of loans in assets. In terms of transparency with the customers, we have been transparent in terms of communicating the interest rates and other changes, both in the sanction letter, MITC, and also on the website. Further, we also communicate this in the vernacular language. Hence, we are not interfered by this RBI stance, which is being taken across companies. Yes, yes, got it. Got it. Got it. This is very helpful, sir, and just last question. On the provisioning front, so if I remember correctly, last quarter, our provisioning was lower because we have stopped creating the management overlay, but then this quarter, there has been a significant jump in the provisioning, so is this due to the higher write-offs in this quarter? No, no, it is not that. If you look at the provisioning, it has just reduced very marginally from 1.05% to 1.03%, and regarding the write-offs, what has happened is, if you look at the provision movement, I said the provision coverage ratio, there is a movement of almost INR 4.78 crores, and the debit in the P&L is almost INR 9.51 crores. This is basically because of our conservative accounting policy of more than 24 months overdue accounts, which is technically written off. But there is also how we need to look at this is, we also need to look at the other income where there is an increase of almost 46%, where the bad recovery also has been factored in. If you look at that, for this quarter, we have got a recovery of almost INR 2.77 crores. So that's how we need to look at it. And the provision coverage, as I told you earlier, we are having almost INR 100 crores of provision. Of that, INR 45 crores is the management overlay. And the actual provision required, actually, the ECL model is with INR 65 crores. And to add to what Mr. Balaji said, the debit to the P&L account is slightly higher than the provision, initial provision to the debit to the P&L account is slightly higher than the first quarter, mainly because there is an increase in the loan book of about INR 650 crores in the past in the second quarter. So that's on that also we carry the provision. Got it. Got it. No, this is very helpful, sir. Thank you and best of luck. Thank you very much. Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Hi sir, good afternoon. afternoon. Thanks for the opportunity. Two or three questions. The first one is around. Sorry to interrupt you, sir. Your voice is not clear. Just one second. Hello. Hello. Hello. Yeah, please continue. Let's see. So the first question is, when I look at the yield, the yield is around 17%. Can you check the yield? I'm not able to hear you, Shubhranshu. Okay. You hear me, sir? Sorry for interrupting you, Shubhranshu, sir. Your voice is not clear. Just a second. Hello, is this better? Yes, now it is clear. Sure. So the first question, can we see of each asset class that we have on book as well as on disbursement? Because when I look at the yield, it's roughly around 17.5% on the book which is blended. Any particular regulatory audit remarks that we have got because of this? Because the regulator has been speaking about high IRRs on various asset classes. No, we are at the largest total booking amount we have done, sir. Maybe I'll come back and make sure it's not worse breaking. You can give me a call as well to explain. Yeah, yeah, yeah. I'll do that, sir. Sure, sure. Thank you. The next question is from the line of Abhishek Agrawal, an individual investor. Please go ahead. Hi, am I audible? Yes, you are audible. Yeah, congratulations on a great set of numbers. So what I've noticed that in these few quarters that have gone by, on the borrowing side, the floating percentage of our borrowings is going up. So could you share your strategy on what number ultimately we are looking at on the floating versus fixed side? And the other question that I would like to understand on is that the asset book, the 80% of it is fixed. So going forward, when we presumably would see a rate cut, are we confident of not losing customers who might want to refinance these loans with banks who would pay on floating interest? So those are my two questions. Thank you. The first, if you look at the borrowings, if you look at our leverage, it is around 1.5x now, and we would like to, since I mean, if you look at our capital adequacy ratio, it is around 70%, which means the future growth which we are projecting for the next five to six years is going to come out of borrowings, so with the result, the leverage, which is currently at around 1.5x, is likely to go up to say four to five times, and we are comfortable with that, and that will be the growth path, and that will be the way in which the growth in business will be funded, so it will be totally out of borrowings. That is the first thing. Next thing is on the yield, which we are talking about 80% fixed. Yes, I mean, I don't think we have been following this practice well for the last 15 years. We have not lost any customers because of the rates we are charging. And if you look at our interest rate, we are charging around 15%-15.5% on the housing loan. On the service loan, we are charging around 17%-18%. And on the non-housing loan, we are charging around 21%, which is comparable with the peers with the interest rates that they were yielding. And also, in the case of small business loans, it is still at 3% less than the market rate. So we don't see that kind of a there will be a pressure on us to reduce the interest rate or we'll be losing customers because of this. Just to add to what Mr. Balaji said, on the liability side and the funding side of about INR 6,700 crores, this is about 56% only from the bank. Outside the banking system about 45%, largely coming from the NCD, securitization a nd on the other NCDs that are raised with it, the fixed tenor and the cost. So there is no variability in that. Within the bank borrowing also, there is a wide tenor is long-term. We always want very long-term tenor of four to five years minimum. But in some cases, there is a variability coming on the interest rate side linked to either the repo rate or the MCLR. So when we say the variable loan, it is not really the entire loan is variable. Only the large part of the loan which is taken from the bank, and within that also, partly it is fixed. And partly the variable is linked to repo or linked to the MCLR. In fact, last three, four months back or six months back, we decided not to really take any loans or to take loans only mainly linked to the external benchmark like repo rather than the internal benchmark with MCLR. So to that extent, the variable component is somewhat manageable and requires to be able to support the growth in funding. On the asset side, you are right, 80% of the fixed rate, where in case of interest situation, a reduction in interest rate happens, we may stand to get benefited because of the fixed nature of the loans. At the same time, going by our past experience, the pre-closure rate in our case is much, much lower. It is not more than 2%-3%. The overall pre-closure rate is around 7%. Half that, but 4%-5% is the money coming from the customer their own source. It is not really coming out of a loan transfer really. So our experience in pre-closure is very limited, and to that extent, the customers are we anticipate that unlikely change in terms of when the interest rate overall comes down a bit, and while we will stand to benefit, that the risk of pre-closure is much lesser. Of course, variable is about 20% that we have to fix. Understood. Thank you so much, sir. And all the best. Thank you. The next question is from the line of Shivam from Abu Dhabi Investment Authority. Please go ahead. Sir, can we start giving the private versus PSB bank in our borrowing? Is it possible? We are not clear. Voice is not clear, Shivam. Can you start giving the private versus PSB bank breakup in our borrowing? Sorry for interrupting you, sir. Your voice is not clear. Can you hear me now? Is it better now? Oh, yes. Is it better now? Yes, it is clear. Sir, can you start giving the private versus PSB bank breakup in our borrowing? What is that? Breakup in PSB bank. PSB banking. See, if you look at my total borrowing, bank borrowing is 59%. Of that, around 25% will be from PSB bank, or maybe 30% will be from PSB bank, and the balance will be from private sector bank. And as I said, NCD is almost 19% NCD borrowing. And NCD is around 11%. The balance is in coming from securitization. Okay. Sir, can we start giving this number directly in our investor presentation? Will be helpful from the next quarter. That is not an issue. Yes. Okay, and the second question is, sir, bifurcation of the variable rate borrowing between the repo rate and the MCLR? I'll tell you. See, of the total borrowing, the borrowing linked to the external benchmark rate is around 20%. The amount the borrowing linked to MCLR is around 32%. Fixed is around 48%. Okay. And sir, right now, as the regulators are very hard on high interest rates, so what is the interest rate we are charging on the small business loans? We are charging 21%, which is reasonable according to us. Okay. So. So there is no large part of our portfolio being a home loan company. The large part of portfolio is home loans, where we charge interest rate at around 15%-15.5%. The second large component is new construction home loans, where we charge about 17.5%. Now, then there is this smaller part in terms of the SME loans, where the interest rate is around 21%-22%. But that really could be our big regulatory concern, is really more in terms of the unsecured loans, small loans, flowing out of microfinance, flowing out of finance companies, and the term that they use is usurious interest rate. So we don't really come under this category. So we are not thinking of reducing the interest rate from 21% to something like 20%, right? We are compatible. We are compatible with quite a few companies operating in the segment, in that particular segment, and our rates are quite compatible. And we don't see the natural usurious interest rate. Okay. Understood. Thank you, sir. It's been 13 quarters since we are giving the quarter-on-quarter growth. So congratulations on the good set of numbers. And hope to see the good numbers in the future quarter also. And by the way, sir, the 30% growth rate for the next five years is comfortable, right? Yes. Next five years, we'll see. At least for the next three years, it is there. 30% will be there. Okay. At least for three years. Okay. Thank you, sir. Yeah. Yeah. Thank you. The next question is from the line of Yash from Citigroup. Please go ahead. Hi sir. Thank you for taking the question. There's a couple of questions. First is on the ECL provisioning, where ECL provisioning to total AUM in this quarter has slightly gone down to 1.03%, whereas we have been guiding for comfortable range of 1.05%-1.1%. So how do we see it moving? And I mean, would it inch up in the 2H of this year? It depends. If you look at the, I mean, obviously, the provisioning depends on the quality of book and the quality of collections. So if the collections are happening very on- time and if the collection efficiencies are good, I don't think we should increase the provision. So we'll be maintaining around 1%-1.03% as the provision coverage ratio. So it will be ranging between 1%-1.03%, and this will be continued because, as I said earlier, if you look at the total provision which we are carrying, almost INR 45 crores we are having as management overlay. The provision required as per the ECL model, which has been tested by three auditors. The first, the model was tested first by EY. Then the next, it was done by T. R. Chadha. Then the new auditors, Sundaram & Srinivasan. So they are all okay with that model. With the result, the requirement is only INR 55 crores. So I'm having additional INR 45 crores as management overlay. So I don't think I'll be increasing the overlay from now on. Got it. Got it, sir. And sir, any incremental color on the particular DPD book, which is still at the elevated level, so in October and first week of November? No. The collection efficiencies are improving. I mean, as we have been told, the third and the fourth quarter, definitely the collections will start improving. And 30+ DPD will come down because that's what is the focus from our point of view as well. So it will surely come down. Got it. And sir, last question on the borrowings. Even in this quarter, we saw good growth in borrowing. So were there more front-ended for the 1H, or did you see the similar traction in 2H as well? What was your question? Sir, on the borrowings, so there was a good growth, sequential growth in borrowings in this quarter as well. So was it more front-ended for the year, or did you see the similar traction in 2H of this year as well? Normally, we maintain two months' disbursement as undrawn liquidity. Another one or two months' disbursement requirement has been undrawn banking. It is just that change of path. Also, we received this proposal from IFC for INR 300 crores. We saw that a very good rate. We thought we should take that opportunity and draw that fund. That is why our balance is undrawn liquidity at one place. Actually, as it was seen in the presentation, the total liquidity in our system is about INR 1,200 crores. Of that, there's about INR 689 crores is really the undrawn that we have with us. That includes the money that was drawn in the last week from the potential issue to IFC. Apart from this INR 689 crores, which is our cash on balance sheet, we have the undrawn sanction of INR 550 crores. These funds are not drawn yet. But then we said these INR 1,208 crores should comfortably cover us in terms of our business growth, almost given the collections and things like that, almost power up to February mark, I guess. Okay. Okay, and sir, lastly, on the attrition rate, how are we moving? Have the trends improved, and any new initiatives you've taken on that front? If you look at the attrition rate, I would like to divide this across levels. Of course, at the top management level, the attrition is low. At the middle management level, categories will be cluster area managers, AVPs, and cluster managers. It is between 5% and 10%. Of course, at the branch manager level, it is between 15%- 20%. And at the sales officer level, it is between 25%- 30%, which is less than the industry, but still, it is a challenge to deal with. Okay, sir. Thank you so much. That's it from my side. Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Hi sir. Am I audible now? So the first question is around the yield, sir. The blended yield is at around 17.5%. Can we hold the yield as it has? Only the fund. I mean, the fund is harder to ask. What I will do, I'll have your number. I'll give you a call maybe after the meeting. Sure. I'll probably do that. I'll get off the queue. Great. I'll give it to the next guy. Thanks. Thank you. The next question is from the line of Nischint from Kotak Institutional Equities. Please go ahead. Hi. Just two questions. One was on the LAP side, our growth is sort of a little lower, I think around 12% year- on- year, and I think even in case of state of Tamil Nadu, our growth sort of still significantly lags the overall company-level growth, so I mean, just what are the thoughts here? Not clear on the question you mentioned. LAP growth, see, if I look at your overall AUM growth, which is at around 27%, growth in LAP is around 12%. It is significantly lower than the company-level average. Is there any specific reason why growth is lower over here? Is there any asset quality stress, any execution stress, anything that you have seen because of which you have? Nothing related to the asset quality. If you look at the collection efficiency or if you look at the 30+ DPD, it is all in line across products. It is maybe 0.2% here and there, but it is in line, whether it is 30+ DPD or whether it is NPA or Stage 1 assets. So there is no value on the asset quality because our credit norms, whether it is a housing loan or a LAP, it is the same. The LTV norms are the same. Income and the income ratio is the same. The way we do the credit appraisal is the same. So there is no difference there. So it's basically because we have to do more housing loans because we need to take care of the compliance f actors. It is because of that that it happened. However, if you look at the total composition of the book in terms of the consolidated basis, it is around 61% on the housing loan and 15% on the affordable home loan and 20% on the small business loan. So that will be continued. So that is the way in which we need to look at the mix rather than quarter-on-quarter disbursements moving slightly here and there. Yeah. Got it. So basically, it is just because you wanted to comply with the 60/40 ratio. Yes. And that is the simple reason why you left. Got it. Got it. And the other thing is, in the state of Tamil Nadu, I know we sort of ramped up in the last two quarters. But when do you think we go back to Tamil Nadu to company-level average growth? Sure. See, what is happening, first of all, let us understand this that in Tamil Nadu, first of all, there is no market-related issues. Market potential is good. We need to do the so the market, the ability of us to grow in the market is very well there. But as you know, we are facing this attrition issue in last September. And we have been slowly making changes and then bringing about improvements in the way that Tamil Nadu is performing. If you look at the half-yearly growth, it is around 8%-9% is the growth in disbursement. And the year-end growth half-year, I mean, September 2024 as compared to September 2023, is also 8%. We have made some structural changes in the team, and that is actually paying off well. And in the third quarter, we can see much more improvement in the Tamil Nadu performance. And so, is it something to do with internal to the team, change in team, or is it something because the market is? It is obviously our internal issue, which is getting sorted out. It is not relating to any market-related thing. Got it. And just since there are a lot of questions related to the regulator that are coming up in this call, is there anything that the regulator has sort of in your discussions commented on growth or margins or asset quality? I mean, if you could clarify, that would just help us. Let me clarify here very clearly. NHB inspection has been completed for us for the year-end of March 2023. We have given their comment, and we have also submitted our response. There is nothing alarming there, and they have suggested some process improvements, which we have submitted that we will also do that, and we will do that as well. That is on the NHB. If you look at the RBI for the NBFC, RBI inspection took place five years back, and there were no major observations at that point in time, and of course, they have just completed the inspection now, and they have gone back. They appeared to come back with their comments. They told they had a call with us before finalizing on the comments. As of from what we got to know, the final discussion I had with the person who conducted the inspection, he was quite comfortable with the way we are doing the business. There were no inputs from the RBI on either the growth or the index rate or the ECL level. This is the state of the situation. Just to add to what Balaji said, so basically, our portfolio of about INR 9,500 crores, INR 7,300 crores, which is a parent company, housing company, which is really secured loan for home or for the property, which is also a secured loan. And the interest rate that we charge is like any other housing company. The housing company's interest rate has never been seen as serious as the regulatory any time in time, as you know. The housing loan, property loan, which almost contributes to about 70%, 20% of the balance sheet, which is the parent company, housing company, regulated by NHB, supervised by RBI, there is no issue. From the point of a small unsecured loan and not clear about the terms and conditions, those issues. Now, the RBI, if you read the RBI concern, regulator concern largely as you know, it can be unsecured loan given by small customers by certain legal entities like microfinance companies or few fintech companies. We are not really present in any of the unsecured loans. We are not present in the small loans. The loans that we are talking about, 3,000-3,500, we are not present in the segment. And our interest rates are fairly well communicated to the customer in English and in their natural language. All the terms are fully disclosed. We have also made an internal comparison for our terms and conditions of the loans that we give. There's just eight other companies. We found that the service charges that we charge are the pro-rata charges, payment charges, for example, for the pre-closure and things like that. We are really quite comparable. So that way, we don't really see any concern of, and we don't have any loan in terms of the other issues in terms of the loan being messing up. We don't do anything messing up loans. We don't do any all other regulatory things are fully and totally compliant, and it is transparent to our customers and to the regulator and to us. We don't really see anything, any concern on that for us. Got it. I think this just helps to clarify. Thank you very much and all the best. Yeah. Sure. Thank you. Thank you. The next question is from the line of Kartikeya Kumar Pandey from Ashika Broking. Please go ahead. Hello. Yeah. I said I am. Slightly not clear. You continue please. Yes, sir. So So you were explaining a few minutes ago about the. Sorry for interrupting you, sir. Your voice is not clear. Could you speak a little louder? Hello. Yes. Yes. You were talking about the effect of repo on your fixed portfolio, fixed assets portfolio. Can you please explain that once again and just list out from the beginning? I'm not able to hear you properly. Sorry about that. Hello. Hello? Hello. Can you mute handset while asking your questions? Yeah. Yeah. I'm muting handset. I was just trying to understand what you were explaining regarding the effect of rate cuts on the fixed rate portfolio. So can you please just explain it once again? Okay. Just note down my number. You call me a little later, I'll explain what you have taken. It's 9791. Yes. 9791 007160. Just give me a call after this. Okay. Thank you. Thank you. Thank you. The next question is from the line of Nidhesh Jain from Investec. Please go ahead. Thanks for the opportunity, sir. Can you share the disbursement number for Tamil Nadu for the quarter. Q1 and Q2? No. Let's start getting to no, then please don't ask for Tamil Nadu and close to the rebound. So as a company as a whole, we have grown a certain percentage in terms of our loan because we have got this rebound. Our disbursement has grown 16%. And we have given a guidance of 30%, which we will do. And within the 15%, our disbursement growth, we'll move into 20%. We expect to move into 20% by third quarter. We'll move into 20% by fourth quarter. And our loan will grow 30%. We are growing in Assam and Andhra. We are growing in Telangana. We are growing in Karnataka. We are growing in. And then as for Tamil Nadu, we have explained enough in terms of we have certain issues in terms of extension. It was corrected. Beyond that, we don't want to get drilled into in terms of Tamil Nadu, which is which cluster, which branch, which is which stock. I think we need to stop it somewhere. Sure. Sure. But in Tamil Nadu, the issue is that two years back, I think that issue has happened, and for the last two years, the growth is still intact. Otherwise, we won't get there. Otherwise, we won't confidently say that we will grow 30%. No. What is happening, see, it's not that easy. It's a business, okay? So I mean, there is a problem that needs some time to get sorted out. See, the thing is, we don't get fully experienced and good people immediately. So even if they come, they might not get adapted to the work environment. So there are issues. It's not that, it's not a plug-and-play model where you just hire some people and then ask them to perform and then start doing things. So it is taking time. As we have been saying, it is taking time. But we are on the right path in correcting the Tamil Nadu chain, and we are correcting it also, and there has been a growth and disbursement of 8% over the last half year. So I think we should take that and then take it forward because it is taking some time, and we all accept that. But we are on the right track on that. So that is how we need to look at things. But as I said again, there is no market-related issues in Tamil Nadu. It is basically our own internal issues which we have to start with. That's it. Okay. Okay. Okay. And secondly, in sourcing, there is a significant, I think, there is sharp increase in the share of construction ecosystem. And over a period of time, customer referral share has also gone up. So what we have done there to show strong growth in these two channels? So basically, we have formed a team at the head office. See, what happens is we have got this customer app. So there, the existing customers can refer the leads. Similarly, we have got this construction ecosystem partners who are basically construction shop owners like paint shop owners or sanitary shop owners. So when somebody comes and buys something from them, they ask them whether they need a housing loan, and then they refer the lead to us. And once the leads come in, what we do at the head office is we go through the leads, we talk to the customer, we do a video check, and make this cold lead into a warm lead, and then take it forward. So that is what and that is being done in a focused manner. If you look at it, 18% of our disbursement last quarter came through these channels. Now it has become 20%. And we find that this channel is really good because the conversion ratios are also high, and the average ticket price is also high at around INR 9-INR 9.5 lakhs. So we would like to focus on this channel and develop this channel, and that's what we are doing. And then lastly, how is the experience in the state of Odisha and Maharashtra? I know it's slightly still a new state. But in terms of disbursement ramp-up, if you can share some data on there. Sure. It is very encouraging. We have got, I mean, if our experience was not good during the onboarding phase there, so our experience in Odisha and Maharashtra has been good, and we have formed a team now. It is led by cluster managers there who are sourcing the talent and experience in those areas. We can take this to the next level. Okay, sir. That's it from my side. Thank you. Thank you. The next question is from the line of Jigar from B&K Securities. Please go ahead. Yeah. Hi. Congratulations, sir, on a strong set of numbers. Two questions. The yields that you mentioned on HL, A HL, and SBL of 15%, 17%, and 21% to 20%, these are disbursement yields or these are book yields, and do they differ materially? Just trying to understand whether we have reduced rates. Disbursement yields, basically, the disbursement yields, we charge 15%-17.5% on the housing loan. It is 17%-17.5% or 18% on the affordable home loan and 21% on the small business loans. Right. And we have not reduced rates recently on SBL, per se, right? We have not increased. No. We have had the interest increase in the repo rate in the past about 2.5%. Our increase in interest rate is much, much less than that, around 0.5%-0.75% overall. So we have really consciously gone for a lower increase in the interest rate in that case. So we did it sometime in September 2023 or October 2023. After that, we have not done anything. Understood. Understood. And sir, on this interest rate cut and 52% of your borrowing either linked to EBLR or an MCLR. So even when the system-wide rate cuts happen and they flow through an EBLR and MCLR, our spreads definitely will increase because a large part of our book is fixed rate. So do we intend to kind of pass it on to our customers, or we will kind of maintain the yields at the current level? The last two years, we have lost interest rates in terms of. Yeah. Yeah. Yeah. Sadly, I mean, we are in an unprofitable position. But we will publish interest rates and that point in time, we will be there. Okay. Okay. And sir, any clauses you have on this fixed rate book that is this remains fixed throughout the tenor of the loan, or does it get repriced, say, one year, two years? Is there a review clause in the agreement? It's a fixed rate contract, while the loan agreement does have a clause which says in exceptional situations, the company can raise the interest rates to recover a part of the increased costs in exceptional cases. So the loan agreement, it is not that it is fixed by our regulator's office, but in case of exceptional situations, the company does have the right to go for an appropriate increase to recover the cost. Sure, sir. Thank you so much for answering my questions. And best of luck. Thank you. The next question is from the line of Rajiv Mehta from YES Securities. Please go ahead. Yeah. Hi. Good evening. Congrats on strong performance. So many of my questions are already answered, only a few left. Sir, firstly, on the employee cost, it was flat on Q- on- Q basis despite a very sharp jump in disbursements. So can you share the employee count change on Q- on- Q basis, and how are the incentives structured for employees? Incentive structures, I don't want to spell it in the conference call because it's I mean, it's company specific. Basically, incentives are being paid based on their performance, which will enhance productivity. So we are a productivity-driven organization. So anybody who performs well will earn a good amount of incentive, and maybe a fixed salary will be 60%-65%, and 35% will be incentive. Actually, just to add on that, actually, such numbers are concerned. We have closed September with about 3,000. And in March, we possibly had 2,700. Huh? 2,000? 2,700. 2,700. Yeah, 800. We have increased about 200. In this time, we have also added about 32 branches. This increase also came largely and mainly in the branches, and we still do level functions like sales and collection. It is also very heavy and increased that way. Actually, incentive is concerned, it does recognize the performance both in terms of quantity and quality, and quality in terms of the proposal, the quality of the proposals generated, the track record of early default, the track record of installment payments, and the quality of documents that have been computed, as well as just not the disbursement number alone. It does take into consideration other qualitative aspects as well. Even in the collections also, it is not based on receipts alone. There's a rate given for the EMI. The EMI is more. We recognize the content of EMI. We recognize the number of receipts, and more importantly, we also recognize whether the EMIs of the current month are in arrears in a collection of old EMIs only, so the incentive structure, which is largely for our sales and collections, recognizes these aspects of productivity and quality. Sir, on this fixed cost- to- asset ratio, I mean, we are at 2.65%, and we are talking about being the lowest cost- to- asset and cost- to- income ratios in the sector. So what is the juice left, and what are the key drivers here? What can drive it further down, and to up to what level do you see it going? There is no juice left, Rajiv. I mean, within every extent, it's just monitored very closely. We negotiate better, and also the productivity. That's what is the secret. I don't think we can improve further on this. Yeah. As a, our culture over here, we follow a fruga l culture. That does not mean that we pay the lowest salary. Our salary is one of the best possible in the industry comparable here. Our terms of employment, our salary level, those aspects. Our investment in IT, our investment in branches, even this year we're planning to add some smaller branches. We will be adding about 15% of our branches. We are beginning one of our branches that we have. We are adding another 40 branches. So despite the investment, and we also invested in the new software that has been mentioned a little earlier. So we do make the investment in terms of easy distribution in the IT. At the same time, we are very conscious that significant part of our growth has to come from the productivity of our existing branches, from the existing stock, and the new stock after we release it in a turnaround time. So in other words, of course, as an organization, we do believe in a prudent way of our culture and way of operation. Just checking and clarifying this 291 branches that we report, is there bifurcation? Are there separate branches for the NBFC and the HFC, and how does the sourcing happen across branches for all products? Can you just throw some light on that? There is no separate branches for NBFC. I think NBFC is the only one such as this. The cost gets shared between the companies based on the asset under management, and as regards to sourcing is concerned, people are free to log in either a housing loan or a non-housing loan. Of course, there will be some push from the head office side on how much small business loans are being done at each branch, and of course, on the housing loans. Okay. I understood, sir. Thank you so much and best of luck. Yeah. Thanks, Rajiv. Thank you. The next question is from the line of Kushan from Morgan Stanley. Please go ahead. Thank you for taking my question. I had two questions. One was around the loan growth. So we have guided for 30% loan growth in the near term. If I look at FY 2025, that broadly looks at an ask rate of about INR 2,400-INR 2,500 crores disbursement in the second half of FY 2025. Is that something that we are targeting? Secondly, my second question was around the loan spreads. So over the last two, three quarters, we've broadly maintained a loan spread of about 8.7%. Is that something that we would guide to maintain going forward as well? And in that context, I mean, how do you think short-term funds will play out from here on? And also the higher liquidity on the balance sheet that you alluded to, over what time frame would that come back to a more normalized level? Yeah. Those are the questions. Currently, we have disbursed around INR 1,600 crores in these last six months. And another INR 2,000-INR 2,100 crores is a possibility. So which means another I will try to assume a bit more, but this is definitely it will be there, INR 2,700 crores. But definitely, we will try to touch INR 4,000 crores of this disbursements this year. So that is the guidance which we want to give. And as for this, what was your next question on the spread, right? It was on the loan spread. Yeah. Yeah. Spread is a result of what? Yields and the cost of borrowing. Our spreads are likely to be maintained at around 17.37%-17.5%. Cost of funds are currently below 8.5%-8.7%. Of course, if the rate cuts happen, then obviously this interest rate, interest cost will come down, at least on the variable rate borrowing. To that extent, there can be a new expansion, but I'm not assuming that as of now because the rate cut has to happen. With the result, the spread is likely to be maintained at 8.7%. Understood. And lastly, just on the liquidity part. What was your question on the liquidity? So liquidity has increased Q1 to this quarter. Just wanted to understand in what time frame will that normalize to earlier levels? It is basically three months gross disbursement we would like to draw for the spread which we would like to maintain as the liquidity. Whether on balance sheet or off balance sheet, it will be determined based on the market, based on the availability of funds and also the market dynamics. So for example, last quarter, we had to draw that money because the rate was good and the terms were good, and then it was from the mutual funds. So we had to draw the money and keep it on the balance sheet. But normal plan is to have three months gross disbursement as the liquidity availability. Understood, sir. Thank you. Thank you. As that was the last question, I would now like to hand the conference over to management for closing comment. Please go ahead, sir. Yeah. Thank you for attending the conference call. I would like to extend my sincere gratitude to all analysts and investors who have taken time to listen to us today. Please feel free to contact Mr. Balaji thereafter in case you have any further queries. Thank you. Thank you. Thank you, everyone. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us, and you may now disconnect here.