Ladies and gentlemen, this call is not for media representatives or Bank of America investment bankers or commercial bankers, including corporate and commercial execs. All such individuals are instructed to disconnect now. A replay will be available for Bank of America investment bankers and commercial bankers, including corporate and commercial execs. The replay is not available to the media. Good day, and welcome to the Bajaj Finance Limited Q4 FY 2024 earnings conference call. This call will be recorded, and the recording will be made public by the company pursuant to its regulatory obligations. Certain personal information, such as your name and organization, may be asked during the call. If you do not wish for it to be disclosed, please immediately discontinue this call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Anuj Singla. Thank you, and over to you, sir. Thank you, Nirav. Good evening, everyone. This is Anuj Singla from Bank of America Securities. Thank you very much for joining us for the Bajaj Finance earnings call to discuss quarter four and full year FY 2024 earnings. To discuss the earnings, I'm pleased to welcome Mr. Rajeev Jain, Managing Director, Mr. Sandeep Jain, CFO, and other senior members of the management team. Thank you very much for giving us the opportunity to host you. I now invite Rajiv for his opening remarks, post which we will open the floor for Q&A. With that, over to you, Rajiv. I have with me Sandeep Jain, who's our CFO, Anup Saha, who's our DMD, Atul Jain, who's MD, BHFL, and Manish Jain, MD, BFSL, and a set of my colleagues, Nilesh Sarda, who's Chief Compliance Officer, Fakhri Sarjan, Chief Risk Officer, et cetera. I'll take you through the investor deck, which has been uploaded on BSE, NSE, and the investor section of our website. Let me jump right on to panel four. I hope to take 20, 25 odd minutes to take you through important sections, and then I'll hand it over for questions and answers. In terms of Q4, I'm on panel four. Good quarter on AUM, customer acquisition, portfolio metrics, and operating efficiencies. Dampeners of the quarter were elevated loan losses in rural B2C and continued impact of regulatory restrictions. Overall, in the quarter, we delivered INR 19,647 crore of AUM growth, booked 7.9 million loans, just a tad below 7.9 million loans, and added 3.23 million new customers in Q4. The app, if you're using it, or I would strongly recommend you download and you start to use it, has gone through a major upgrade in Q4, significantly expanding our products, services, and host of new features on the app and web platform. Bajaj Finance app now overall has 52.5 million customers, net, net users at this point in time. In terms of financials, we ended the year with AUM of INR 3,30,600 crore, a growth of 34%. OpEx to total income came in at 34%. That is really where it's been for the last three quarters now. PAT came in at INR 3,825.8 crore, a growth of 21%. ROE, as a result of capital raise, came in at 20.5%. Net NPA came in at 0.37%. Move. I'm on panel five, which is the full year summary. Overall, I would say, a good year across all financial and portfolio metrics for the company. Delivered AUM growth of a record INR 83,236 crore. We disbursed overall 36.2 million loans and added a record 14.5 million new customers in FY 2024. Clearly, regulatory action on two of our products was a setback for the year. We remain committed to compliance in form and spirit as a company, and I'll cover as to how we've acted on the embargo on the KFS just in a short while. We're rapidly implementing our key LRS mega trends that we outlined in Q3 to investors. Account ggregator now, we are 22% of India's account aggregator on a monthly on a run rate basis. We have 8.1 million customers who have given us consent. ONDC, which is on track to go live by June 2024. Social commerce as a platform by July 2024. Reward as a platform by June 2024, and O2O2O to make life significantly easier for consumers by June 2024. All these actions, as implemented, should significantly strengthen our competitive moat and also re-improve our cost-to-income ratios. AUM, full year, I've talked about, INR 330,000 crore. OPEX to NIM on a full year basis also came in at 34% because last three quarters that's really where the number has been. PAT has grown by a healthy 26% to INR 14,451 crore. ROE on a full year basis come in at 22.1%, and net NPA ending March is at 0.37%. So that's the full year. I'm on panel six. Very quickly, some of the points I, I'll just cover, new... Which is point number four, on panel six, new loans booked were lower by approximately 0.8 million, as we articulated even in our early press release, on account of restrictions placed by RBI on the company, on account of E-com and Insta EMI Card. Now, total cross-sell franchise crossed a milestone of 50 million customers and stood at 50.75 million customers. The company added 53 new locations and added 7,700 distribution points. We are now physically present in 4,145 locations and serve over 198,000 active distribution points as of 31st March. In terms of liquidity buffer, liquidity buffer is strong at INR 15,700 crore. Cost of funds continue to inch up, albeit slowly now. It grew by 10 basis points on a quarter-on-quarter basis, on a sequential quarter basis, was at 7.86%, as of March 30, in the quarter gone by. Deposits book also grew in line with the assets growth, grew by 35% and stood at INR 60,151 crore. Net deposit accretion was INR 2,143 crore. Deposits on a consolidated balance sheet now contribute to 21% of overall borrowings. In terms of operating efficiencies, net interest income grew 28%. NIM compression in Q4 over Q3 on a sequential basis was 21 basis points, primarily contributed by AUM composition changes. As we move more and more of our assets or as we or just repivot our assets slowly to see rightful balance between secured and unsecured, there is some level of compression that's slowly evident in net interest income. Opex to revenue income came in at 34%. Company is rapidly deploying various GenAI initiatives across operations, service, and contact centers to enhance operating efficiencies. The bigger benefits will not be visible in 2024, 2025 or FY 2025, but in FY 2026. The exit rates of FY 2025 should be much stronger as we sharpen the pencil in terms of inducting GenAI across our processes as a company. Employee headcount, as a result of optimization of our cost operating cost model, after eight odd quarters went down, it stood at 53,782. The employee headcount reduced by 499 people in Q4. Attrition, on a full year basis, we came in at 14.9% versus last year of 18.7%, so continue to see improvement in overall attrition rates for the company. Credit cost, overall loan losses and provisions were INR 1,310 crores. The rural B2C business continued to trouble us even in Q4. AUM growth, and as a result, as I've always said, we are a risk-first company. Rural B2C, growth actually came down from 25% on a AUM growth basis to 6% in March 2024. So clearly, we still don't have a full handle on rural B2C, and, as a result, the growth has been slowed down until such time we can tame risk in the business. Having said that, I must just qualify that it's 5%-6% of the balance sheet, 18,339. Six percent of the balance sheet, so, it's a contained risk, and I would say it does not impact the company in any manner on an overall basis. Loan loss to average AUF came in at 1.86% in Q4. The overall macro overlay came in at INR 300 crore. During the quarter, company utilized INR 127 crore towards strengthening of ECL model, which is an annual exercise, and released INR 163 crore towards loan losses and provisions. So it was, the number was, close to INR 590 crore, which has come down to INR 300 crore. GNPNPA came in at 85 basis points. It's the lowest that we've seen in the history of the company, and net NPA came in at 37 basis points. I think even in the industry, it's among the lowest GNPA ratios, definitely, and NPA as well. Risk metrics across portfolios were stable, except the rural B2C business, as I said, which continued to trouble us. We continue to remain watchful on risk actions in the rural B2C business. Otherwise, all businesses are from a management assurance standpoint at this point in time, being marked as green. I'm on panel eight. Profitability consolidated, pre-provision profit grew 25, PAT grew 21. Annualized ROA came in at 4.84. ROE came in at 20.48. Capital adequacy came in at 22.52, and Tier-one capital was 21.5. three-four additional updates, I thought I'll provide. I'm on point number 26, panel eight, that the board of directors of BHFL, which is a wholly-owned subsidiary of BFL, at its meeting held yesterday, evaluated various options for meeting the mandatory listing conditions, pursuant to BHFL classification as a Upper Layer company and including a potential IPO. In this regard, board of BHFL has constituted a committee to undertake various actions and steps. That's really the update that we're gonna provide at this point in time, and as and when the committee deems appropriate, we'll provide timely updates to the investors. In the quarter gone by, company to diversify its borrowing profile, raised $752.5 million in external commercial borrowings, which is equivalent to INR 6,016 crore, all in three-year monies. So now 2% of the overall borrowing profile is in ECB. At the peak of it, we used to have 4% of our borrowing in ECB. So based on market conditions, we expect to take it to four, four odd% in the current year itself. Last point is point number 29 and 30. I want to cover on Panel 9, that the company has made required changes in response to the regulatory restrictions imposed by RBI on the company on sanction and disbursal of loans under eCOM and in the same regard, the company has formally requested RBI for a review and removal of these restrictions. To ensure compliance in form and spirit, the company, in addition to the 2 lending products, which are under embargo, has implemented KFS now for all lending products, effective thirty-first March. So any client who takes a loan from the company, across retail and SME, effective April 1, gets to receive a comprehensive KFS, and it's in 20 vernacular languages. So that's really the update on BFL standalone, consolidated. BHFL had a good quarter. AUM was up 32%. Home loans grew 24, loan against property, 23, lease rental discount is 57, and developer finance, 69. Portfolio composition remains steady. BFL is fully meeting its PBC criteria of 60%. The number you see is 58% here, but, the based on PBC criteria, it's at 61%, is what the PBC criteria become. The hurdle rate is 60%, the company is at 61%. Overall approvals grew 19% to INR 19,500 crore. Disbursements grew 26% to INR 11,400 crore, and the company is now present in 174 locations. Liquidity was steady at INR 2,000 crores. Borrowing mix remain largely steady, with bank borrowings contributing to 51%. Move. In terms of operating efficiencies, net interest income grew 11%, total income grew 14%, OPEX to total income came in at 27%, employee headcount stood at 2,400. The credit costs were virtually negligible, came in at INR 35 crore. And BHFL still holds a macro and management overlay of over INR 94 crore. GNPA and NPA are amongst the industry best at 27 basis points and 10 basis points. In terms of profitability, PAT grew by 26% to INR 381 crore, and annualized ROA came in at 2% and ROE of 12.65% on a quarter basis. On a full year basis, they're at 15%. BHFL raised INR 2,000 crore from through rights issue from BFL on third of April, 2024. It's sufficiently capitalized for 25-26, for 18 months of growth or so. So, that aspect has been taken care of to ensure that whatever the committee of the board constituted committee decides in terms of its options, they are well capitalized. Move. Bajaj Financial Securities ended the quarter with a INR 26 crore profit, against a INR 3 crore profit a year ago. Profit after tax came in at INR 22 crore, against a profit of INR 3 crore. Again, added 43,000 customers. The company, on a full year basis, delivered a pre-tax profit of INR 72 crore, giving us latitude to start to invest in the business- Mm-hmm. To grow the business as we move from here. The next two panels are full year panels. Mm-hmm. I'm not gonna spend time on that. What I wanted to do is to give you a management assessment for FY 25, because questions get asked and we'll end up responding. I thought it's it may just be more prudent for us to systematically give you an a management assessment for FY 25. Also, importantly, we've been through two low years and two high years, if I take the last four years since COVID. And we're getting into a normal year, the way we see it as management, so I thought it's important we provide you a reasonable update or an assessment from a FY 25 standpoint. I'm on panel 17 for the reference of people who are listening in. As you're aware, we have a long- you know, well-established long-term guidance across AUM, profit, GNPA, NNPA, ROA and ROE. We expect FY 25, the way we see it at this point in time, to be a year of normalization to pre-COVID metrics. Adjusted for, of course, certain regulatory changes pertaining to NPA classification. So, and those NPA classifications have had an impact of 12-14 basis points. So it's a marginal change, but, that's change. When your credit costs are to the extent of, 1.7%, and they go up to 1.82, that's a change. which is an 8.9% change, that has happened as a result of harmonization of NPA classification between banks and non-banks, which RBI conducted between 2020 and 2021 and 2022. When I look back over the last four years, what principally I come to conclusion is that the first two years of COVID were a low phase, and the last two years have been a high phase. From that perspective, we thought we'll just provide you a management assessment. This will all, of course, be subject to stable macroeconomic and regulatory environment. This assessment, I must just qualify, is for FY 25 only. We remain committed to achieving long-term guidance, metrics for the medium term as a company, for which we are sufficiently capitalized, have full breadth of products, have large franchise, and a very strong moat in terms of business model. Move. These are seven, eight areas that in general, that you guys have, that the investors have questions on. I thought I'd just, you know, clarify them. In terms of our management assessment of FY 2025 is that we'll continue to originate 12-14 million customers in FY 2025. It is. We added 14.5 million customers in FY 2024. In terms of AUM, we foresee a 26%-28% balance sheet growth, principally supported by newly launched secured businesses, such as loan against property, which went live in January 2023, a new car financing, which went live in July 2024 - July 2023, sorry, and Tractor Finance, which went live in January 2024. Net interest margin has been moderating because of rising cost of funds and gradual shift in AUM composition towards secured assets. We expect cost to peak in our assessment at this point in time, by July, August, and AUM composition repivot towards secured assets to stabilize by September 2024. Accordingly, we foresee a 30-40 basis points moderation in NIM over the next two quarters from our current levels and then stabilize from there. Of course, global interest rates, local interest rates, will still have a role to play, both ways, if upwards or downwards, but this is assuming that by, by second half, sometime in second half of the year, we have peaked in terms of interest rates. That's really what the assumption is. In terms of OPEX to NIM, we expect improvement of 20-40 basis points from current levels. And, as we continue to focus, we move from accelerated frame to a more consolidation stage, there could be little bit of opportunity in OPEX to total income, even from these levels. In terms of credit costs, as I said, pre-COVID, we used to be at 175-185 basis points. We expect to remain within that corridor. Last year was 182 basis points, or the year gone by is 182 basis points. We expect to remain within the corridor of 175-185 basis points. Return on assets, our long-term guidance will be between 4.6%-4.8%. We expect to remain within the long-term guidance of 4.6%-4.8%. ROE in FY 2025 may marginally go down as a result of capital that we've raised. But as you can see, ROE is holding steady, but mainly because of excess capital that we'll be sitting on, that we may see some level of little bit of drag on ROE in FY 2025. GNPA and NPA expect to remain range bound and lower than our long-term guidance. Long-term guidance is between 1.2-1.4. We ended the year at 85 basis points and 37 basis points. We expect to remain between 85-95 basis points—between 85-100 basis points of GNPA and NPA, depending on the quarter. On a full year basis, we expect this to be well within the current range. In terms of profitability, remain cautiously optimistic about 25, FY 2025, with profit growth to be a little more rear-ended due to moderation in NIM in the first half of FY 2025. I think that's—I thought I'll just try and answer most of the questions that people have in a clear manner so that we can. So that's really one of the last panels. Very quickly, we can just go to asset mix. That's panel number the cross-sell franchise continued to grow well. So I'm mindful of time. In terms of asset mix, that's on panel 55. On a year-on-year basis, there is a 2.2% reduction in unsecured to secured mix. Urban B2C, as you can see, has gone down by 80 basis points, and rural B2C, as a result of the actions that we've taken, has gone down by 140 basis points, leading to 220 basis points reduction in unsecured. One is not designed by design, the second is by design, which is rural B2C, which I've talked about for the last two, three quarters. From this time onwards, we've also started to separate, rural B2C used to have gold loan sitting there. We have started to separate gold loan as well. Gold loan is now 1.4% balance sheet, ending last year. It's, we've also separated from SME lending, the car loans balance sheet. It is now at 2.1% of the balance sheet. So greater granularity in the balance sheet continues to emerge as we grow larger and larger in size. So two-wheeler, three-wheeler grew year-on-year by 80 basis points in terms of mix. Urban sales finance, flat. Urban B2C, down 80 basis points. Rural sales finance, flat. Rural B2C, down as a result of actions. Gold loan, moved up. SME lending, 40 basis points down. Commercial lending, moved 30 basis points, so on and so forth. That's really where the overall asset mix has been, but I would say marked by greater granularity as we continue to execute on our long-range strategy of to be present in all retail and MSME categories that clients would want us to be. Just on, as a last point on GNPA and NPA, which is panel, and with that, I'll hand over for Q&A. This is panel 58. Range bound, plus, minuses, not much movement here. As you can see, aggregate is where it is. Reasons for up and down are also different. If you have questions, you can, you can raise them, we'll try and answer it. As to why is 40 basis points, thirty-first March 2023 is at 57, because the balance sheet in, in the preceding-- in thirty-first March quarter, the urban sales finance balance sheet grew, whereas, urban sales finance balance sheet in quarter four went down because of the embargo. So, it's a numerator, denominator point on urban sales finance and rural sales finance, and so on and so forth. That really brings me, in terms of portfolio quality, we remain, on panel- Sixty-two. -62. From a management assurance standpoint, we remain pretty comfortable. As I said, everything eventually will go back to pre-COVID, adjusted for regulatory actions that happened or in terms of GNP and NPA. Otherwise, we remain well ahead or still significantly better than where we were pre-COVID. I think that brings me to the end of points that I want to cover. Happy to take Q&A between me and the management team. ...Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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. Participants, you may press star and one to ask the question. The first question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Hi, Rajiv. Thanks for the opportunity. I've got two or three questions. The first one is, do we have any plans to list in the international market, either through ADR or GDR? Second is with respect to fledgling businesses, which is one is gold loan, second is broking. When do we see INR 1,000 crore bottom line for each of the businesses? What's the timeline, if you can comment to that. Third is that the B2C business, when we include urban plus rural, that in my sense should constitute a larger amount of the profit pool, closer to 35%-40%, versus which we cross-subsidize other products or other businesses. Now, given the fact that we have been getting the credit cost from these businesses, are we facing issues in cross-subsidizing the other businesses? Thanks. These are my three questions. Thanks. So ADR, GDR, it's a new point, so I had not thought about it, but it's a good input. We'll evaluate and update you guys based on our assessment. We do know broadly that some of the leading firms in India are listed there. So thank you for the input. In terms of profit horizon, clearly we build businesses a long-term view. We expect microfinance. So in terms of size, if you start to think about it, and that's why we detailed gold loan this time, we are now from 180 branches to 650 branches. Business is growing extremely well. You should continue to see progress there. We are very clear it is anywhere between 18-24 months by the time business becomes breakeven, because we're doing business at scale, and 36-48 before it starts to meet hurdle rate, and anywhere between 40-60 before it starts to be a meaningful contributor to profitability. These are the three dimensions that go into our planning process. So clearly, as you can see, as we've been updating the street, that we launched a whole host of businesses in the last 18 months. Microfinance, tractor, new car financing, LAP, we're just launching commercial vehicle. So clearly, it's a two-two. We launched open architecture, two-wheeler two years ago. That should start to be... That should make money in the current year. So clearly, two years to breakeven, and businesses are built with a five-six-year view. But do we remain very focused on giving time, attention as you become larger to young businesses? The answer is yes. So that's the second point. In terms of your third point, you're principally saying that, are they subsidizing? We run verticalized P&Ls for each one of our line of businesses internally. No business gets any subsidy. They all get capital at the same rate. They all- so it's a very established discipline, process and methodology, and there's no cross-subsidization. Every business must meet. Any business that we do, it can take three years, but must meet a hurdle rate of 14%-15% ROE, for us to even launch the business. So, and there is no concept of cross-subsidization, in the firm, because we think that creates mediocrity in the way we run and conduct businesses. My question still remain unanswered. What's the commitment in INR 1,000 crore bottom line for gold business and broking business? Uh, sorry? Gold and broking business. What will be the- When do we hit INR 1,000 crore profit in each of these businesses, gold and broking? So, I mean, so gold loan, look, at this point in time is growing well. You're aware it's a cyclical business because it's a commodity, so clearly growing very rapidly at this point in time. Okay? If the current run rate was to continue, in three years' time, it could be INR 1,000 crore profitability. But again, as I said, we're building this as a long-term view. The model and the template is well set. So now that's one. Coming to BFSL. BFSL had a pre-tax profit pool of INR 72 crore last year, should cross, should grow over, should grow significantly, I would say, given their current run rate at this point in time, should get to three-digit growth in the current year itself, and should compound, I would say 35%-40% for the near term. Now, and then when I say, then you, you are... You're talking INR 1,000 crore, that's a long way off for Manish Jain to deliver in BFSL. But again, I repeat, we are building business as a long-term view. We are quite excited about the business. Do we challenge all our businesses to hit a milestone of INR 1,000 crore profitability? The answer is yes. But are we patient enough to know that businesses take time to build? The answer is yes. So gold loan, three, three-four years, longer for BFSL. Thanks. Thank you. I request to all the participants, kindly use handsets while asking a question. The next question is from the line of Viral Shah from IIFL Securities. Please go ahead. ... Yeah. Hi, Rajeev. Thank you for giving me an opportunity. So I had two questions. One is, basically, so first of all, how is the management transition happening with Anup now being elevated and, basically, how internally it is playing out? Is it as per your expectations, and what are the changed roles and responsibilities now you are varying? That is point number one. The second question that I had was also to do with, now again, we have now numerous instances of RBI placing business restrictions on different entities across the shades of different regulated entities. Wanted to get a sense of, at least the common theme we have seen is that, on issues that have been, more recurrent issue between the, those regulated entities and RBI, those are the points basis which, if they are, left unaddressed, that is where RBI is stepping in, with this kind of restrictions. So are there, apart from this, one instance, which was there, any other pressing points that have been, say, more of a persistent issue? Any guidance on that front would be really helpful. So management transition, it's very early days as yet. You would appreciate that. We announced the management transition in December. December. So it's very, very early, is the point I would make. So it's a patience play for us as a management team, and clearly, we would request you all to be patient as well. And only thing I would say is that it's being done in a highly disciplined, rigorous, and a planned manner, and we are all working towards making it a successful transition. So that's first part. Second part, clearly, in terms of regulated matters, our preference would be to not comment on it. We remain committed to compliance and form in spirit, areas that we are identifying even on our own, we are acting on, in addition to, annually points being raised by Reserve Bank. So, and are we all, given the actions on us, are we, are we committed as a company to ensure that we don't create such a recurrence? At least as management, we are fully committed to. And, you know, that's what I can say. Fair enough. Thank you, and all the best. Yeah. Thank you. Thank you. Question. Next question is on the line of Kunal Shah from Citi. Please go ahead. Yeah. So firstly, on credit cost, again, so given that there is a pivot which is happening towards the secured business, and maybe towards a relatively lower-yielding portfolio as well. But in terms of the credit cost guidance, that still seems to be slightly on a higher side at 1.75%-1.85%. So maybe last time you indicated Urban B2C as well, which was in the watchlist, but it doesn't seem to be the case now. So then maybe could it be like, are there any other product segments which is becoming a cause of concern, or they are like the normal write-offs which we are seeing in the business, which is leading to this kind of a guidance here? No. First thing you have to remember that while we repivot towards secured assets, if you look at the transition is 2.5%. So 2.5% of assets went down in terms of unsecured and went up, and correspondingly, other portfolios went up. So it's a pivot that will happen gradually. It's not a doing anything considering the secured businesses are low-risk businesses and unsecured are high-risk businesses is a myth. If both done poorly will yield the same negative result. So it's a gradual transition. It is not a quick transition, but clearly, the roadmap is to create a more granular portfolio. There's no question of balance. We've been running this mix for many, many years. We have published to the street that our LRS plan is to compound at 25%-27%. So it's in that direction. There is, there is, and all shifts will be gradual in nature. So that's why even the while the assets may come, the or the as the mix moves, it all comes with a lag effect. So that's the only point, Kunal, that you have to keep in mind. If I may add, Rajiv, I think in addition to that, Kunal, if you look at last year's performance, right, we, we delivered 1.63 loan loss to average AUM. Adjusted for the macro and management overlay that we released in the last year, the number was 1.82. If you look at pre-COVID, adjusted for growth, of course, we used to grow reasonably at faster pace at that point in time. On a normalized basis, the loan loss to average AUM, pre-COVID was 1.65%-1.75% kind of corridor. Rajiv did talk about some of the regulatory changes with respect to definition of NPA that happened last to last year. On top of it, as you would remember, we have made this point in a couple of earnings calls as well. We have significantly accelerated our write-off policies to ensure that we don't carry any residual risk in the balance sheet. That has also led to 10-12 basis point impact on the overall loan loss to average AUM as a metric. If you take both the things together, I think 175-185 is a normal corridor, in addition to what Rajiv has communicated. And mind you, Kunal, four years later, the balance sheet is INR 330,000 growth, INR 100,000 versus INR 140,000 growth, but we've ensured that the credit has remained... in fact, if you, if you knock off the points Salil is making, we are lower than where we were versus FY 2020... so balance sheets are 2.8x and 2.7x, 2.8x, and credit costs have held flat, rather marginally reduced if you knock off these regulatory changes that came in. However, to your last point, as the mix pivots a little bit, sometime in 2026, 2027, you will see an impact. It will not even be this year and the next year. You mean 25? I mean, 2025, 2026, you may see some impact. You will see full impact only in 2026, 2027. In terms of if the, of, of the slow or gradual pivot that we, that we are walking towards. Sure. Sure. So, on an average, what could be the write-offs? Maybe if we have to look at it, maybe currently, maybe this quarter also, it seems to be on the higher side, but, what should be the average write-offs, given the profile of the assets which we are building? So just wanted to get that, because today, in terms of the, GNPA as well as net NPA, those are like, as you mentioned, historically low levels. Yeah. So I think if you look at Kunal, by that logic, I think, the overall provisioning versus last year to this year is very well disclosed. Yeah. The differential is nothing but the write-off number. Yeah. I think, barring 10 basis points, which goes towards provisioning balances towards write-off only. Eventually- That might not improve. Yeah. Yeah. Eventually, what you do is you settle the account with the customer by taking a charge off after consuming all the remedial measures that is available for you to do debt management services. Sure. One last question in terms of the BHFL. So again, if I look at in terms of the NIM trajectory out there, given that that's also like more than 25% of the AUM, it seems like NIMS there itself have contracted, and that has led to like almost 21 BPS, kind of a contraction on a quarter-on-quarter basis. So overall profitability was also low, in BHFL compared to Q3. Year-on-year, it sustained. But how should we look at the BHFL, both in terms of the margin as well as the ROA profile? Does it improve towards 2.3%, 2.4%, or like 2% seems to be- No. I mean, so two points. Clearly, you know the, you know that the... if I may use the word in a lighter vein, the madness in terms of competitive activity in the mortgage space. I mean, you know, borrowing costs for BHFL in NCD market is at 8.3%, and home loans are being distributed at 8.4%-8.5%. Yeah. So, you know, we are in that zone, that it's a pretty crazy zone. So that's point number one for me to make. Point number two, clearly our guidance on a long-range basis, while the company has delivered a 15% ROE in the current year, we believe that it anywhere between 13%-15% ROE on a sustainable basis is really where the business is anchored on. So that's the way you should look at the business. It is a range around 13, 14, 15% ROE on a sustainable basis, amongst the cleanest, largest businesses in India, which are focused on with and a great annuity business that we are headed to create, is how you should look at the business. Amongst the largest, amongst the lowest risk businesses, 13%-15% ROE, and compounding annually between 25%-27%, to create a great annuity business. Its cost to income ratios should keep going down, so making it more and more competitive, as it becomes larger in size. Sure. Okay. Okay, yeah. Thanks, and all the best to you. Thank you. Thank you. Next question is from the line of Kuntal Shah from Oaklane Capital. Please go ahead. Hi, thanks for taking my call. My question is, just wanted to correct that there's 70 basis points increase in the cost of funds, right? In spite of the ECB cost borrowing up. ECB is a percentage. On a full year basis, Kuntal? Yeah, on a... yeah. In a full year, yes. Yeah. If you go to the panel, I think there will be. That's correct, Kuntal. Yeah. It's 70 basis points over last year. That's correct. There is a 4% impact on the embargo, on the PBT level. That's correct. In the current quarter, yes. Yes. Okay. Thanks, thanks for the clarification. Rajiv, the question is, you mentioned in passing about account aggregator, ONDC rewards, and various planning in, the products you are rolling out. Can you just throw a granular light on how does it impact franchisee profitability and so on and so forth? I mean, Account Aggregator, we think, is a fundamental shift in the way business will be done. That's really how we are driving the business at this point in time. As I shared, that it's 8.1 million consents. I mean, based on the consent of the client to get his in a structured manner, his entire bank statement, allowing us to underwrite him right, price him right, expand exposures, portfolio monitoring, early warning. It's a dramatic shift, let me tell you. And the company's been driving that since November, and that's how, as I mentioned, we are 22% of India's consents at this point in time on a daily or a month, month-on-month basis. This data is published on the Sahamati website. So clearly, we are very excited. It dramatically opens up clearly new growth path for us as a company or for any company that intends to use it, because— So that's one. Two, ONDC, while it has no commercial outcomes, but clearly would dramatically improve engagement rates for our 52 million customer franchise. We're adding 3-4 million customers net installs a quarter. It's a— I mean, January 2023, 1,000 orders a month were happening. Eighty-two million... Sorry, 8.2 million orders happened in January 2024. A year later from 1,000, something went to 8.2 million. That's the kind of growth rate that ONDC is principally experiencing. Clearly, customers are ready for it, so that would improve dramatically the engagement rate, our opportunity to engage with the customer. So that's the second part. Social commerce, clearly, as I've said, people are spending more and more time on videos and photos rather than content. Our app infrastructure, web infrastructure are more organized to content. Social commerce clearly is nascent, but the way we are engaged on a day-to-day basis are more and more social. So that's going live. It'll have real infrastructure and so on and so forth by June, July. Rewards is an open architecture customer acquisition engine that is run on back of a PPI platform with host of benefits. It's a paid program that if customer wishes to buy, should help us acquire more new to Bajaj customers and engage them over time to take all financial services products. So these are big bets, Kuntal, that we are making. From a medium-term standpoint, some short term, some medium term, and could dramatically alter the way the business looks in the medium term. Are you throwing in the expense management and all the, related tools for rewards for enterprises, or it's just- So expense management as the, it is there even today, in the, in the asset, but we don't find too many, the utilization rates to be very high. So what happens, Kuntal, is if you, if you get all the bank statements, then expense manager using account aggregator is relevant. Our intent is to underwrite and, lend to a client. Making him give five bank statements is, is, in my mind, personal assessment, practically not feasible, because at store or at wherever the client is, one main bank account mostly tells the story. So, if you want to deliver a full-fledged expense manager, then you need to get all his bank accounts, which is not practically feasible, as I said. Just my last question. We had a 2% degrowth in EMI franchise because of the embargo. Yes. What is the timeframe you are expecting for RBI to revert, and when would you be able to fire that engine? I cannot comment, Kuntal. As I've said, we have completed the compliance, and we are awaiting next steps from RBI. Thanks for taking my call. All the best. Thank you. Next question is from the line of Umang Shah from Kotak Mutual Fund. Please go ahead. Yeah, hi. Congratulations to the team on the quarter. Just two questions. One is, FY 2025 guidance that we have given on various metrics. I mean, does that factor in the relaxation from the RBI or on eCOM and Insta EMI cards or you are assuming that it will... I mean, the guidance is assuming that the situation that we are in today, that kind of continues? Yeah, sometime in near future, we assume. Uh, that- That the relaxations will be lifted, right? Yes. Okay. And the second question is mainly pertaining to the listing of the housing finance entity and parts to it. One, the shift that we are seeing between secured and unsecured at this point of time, is it just temporary, given that some businesses or parts are under embargo or it is more structural in nature that DFSL standalone will start building more secured businesses on its own? And the second part of the question is that the long-range guidance that we have given in the presentation, it's predominantly consolidated. Does the listing impact that in any way? Yeah. So look, structurally, let's, let's step back for a moment. Our market share across lines of businesses remain very low. We've come a long way in 17 years, but when you look at our market share across lines of businesses, in personal loan, our market share is 7%. Okay, it's been at 7%. It was at 7% in FY20, which was pre-COVID. Since then, all the action happened. Even today, it's at 7%. 7% of all disbursements in India, plus, minus, this is bureau data, is our market share. So structurally, we are not talking a structural moment. We're just saying that at a design level, there are opportunities in lines of businesses, given the growing franchise like auto loans, like LAP, because BHFL by design has to principally focus on home loan, because 60% of the business has to be home loan, and 15% has to be developer finance. That is 75. They have built a phenomenal business of CRE, that's 10%-12%, so that leaves only 7%-8%. So there's very little scope for them to do LAP. So that's how LAP came in. So we are looking at opportunity rather than changing the mix at a structural level of the business. It's important I clarify that. Of course, you have to take into account external environment. You have to take into account various optics to ensure you play year at a time, but no change in structural guidance for us as a company. Okay. And the long-range guidance on a consolidated entity basis, that's also kind of remaining? Yeah, yeah. So, okay, it's a good question. I am sorry to not have responded clearly. Some point in time based on the committee's decision. But anyway, that committee's decision is contingent between now and September '25. By September '25, we have to list the firm based on the upper layer guidance. We are encouraging both that both companies should principally look at, be more atmanirbhar, look at their rightful mix. BHFL should focus on ROE, and BFL should focus on the balance between secured and unsecured. So from a directional standpoint, as BHFL gets listed, the consolidated conversation is as important as the standalone conversation for each one of the entities from a long-term standpoint, and which is what we are driving them for. So in a way, to the point that you're making, that's why also launching some of the lines of businesses, in BFL, to make sure that when we start to look at them independently versus consolidated, which are relevant for the business. Sure. And, and so just one last follow-up. So, does that mean that at some point in future post-listing, can Bajaj Finance and Bajaj Housing Finance compete in the same product line? No. We would never do home loans. BFL would never do home loans. If it ever did, it may do it on an assignment basis, for BFL, for BHFL. LAP, both will do. Market is very large. BHFL is very large-