Ladies and gentlemen, good day, and welcome to the Can Fin Homes Q1 FY 2024 earnings conference call, hosted by Investec Capital Services. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nidhesh Jain from Investec Capital. Thank you, and over to you, sir. Thank you, Mudovan. Good afternoon, everyone. Welcome to the Q1 FY 2024 earnings conference call of Can Fin Homes Limited. To discuss the financial performance of Can Fin Homes and to address your queries, we have with us Mr. Suresh Iyer, MD & CEO, Mr. Ajay Kumar Singh, Deputy MD, Mr. Apurav Agarwal, CFO, Mr. B.M. Sudhakar, Business Head, and Mr. Prashanth Joishy from Can Fin Homes Limited. I would now like to hand over the call to Mr. Iyer for his opening comments. Over to you, sir. Yes. Good afternoon, everyone, and thank you for joining the conference call today. I'll just give a brief of the highlights, a couple of points before we can open for the question- and- answer session. In terms of the disbursement and sanctions and disbursement, we've seen a good growth. In fact, it's been a little higher than what it was project or it was done last year. We've had a 14% growth in disbursements, which has resulted in an 18% YOY growth in the AUM. This is very much in line with the guidance that was given of about 18%-20% growth in AUM that we had projected. We had last time had a discussion in the last quarter that about the lag because of the rate hike from the asset side, which because of it, there was a slight upside available in terms of the NIM and spread. Which is a part of it has already been experienced during this quarter, as a result of which there is sequentially, there is a improvement in spread by 16 basis points and NIM by 11 bps. The NP also on the has slightly been on the higher side. There is a increase in the NP by about INR 30 crores, of which around INR 18 crores is on account of the restructured book, which has come out. We have about INR 250 crore of restructured book, which had come out in the months of February and March, wherein more than three months have elapsed, and out of that INR 250 crore book, we have about INR 18.5 crore book, which is about 8.67%, which is lower than the 10% that we were anticipating. However, it is there. The remaining INR 12 crore increase in NPs on account of the, you know, seasonal effect. Normally, the Q1, there is a little bit of an increase. During the quarter, we have also, you know, in terms of the financial accounts, we have not reversed the INR 17 crore management overlay that we had carried in the last quarter of last year. Although the part of the restructured book has come out of the portfolio, we have not reversed that thing. Wherever, and additionally, even in respect of the INR 204 crore restructured book, which has come out and wherein the NPA has also been witnessed, we are still carrying the entire INR 67 crore plus of provisioning that was done at the time of the restructuring as per the guidelines. These are some of the brief points about the performance of the quarter. I think now we can open for queries. 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 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. The first question is from the line of Mahrukh Adajania from Nuvama. Please go ahead. Hello sir. Congratulations. My first question is on margin. Briefly, like you had guided, margins have done very well. What's the outlook from here on? Also, the cost of funds that you've shown in the presentation seem to have declined quarter-on-quarter. What's the outlook on cost? First of all, why did it decline quarter-on-quarter from 7.5% to 7.3%, and what's the outlook from here on? Sure. Thank you, Mahrukh. As we had indicated in the last quarter, in the last year, in the last fourth quarter of last year, that there was a 25 bps upside that was available, while entire amount may not come into the books, but 5-10 bps could have come into the books, is what we had estimated. We have, as of now, out of the INR 18,000 crore, still about INR 5,500 crore has already experienced that rate hike that we were talking about, which has already been passed on in the Q1. Because of this, we are seeing this impact. Most of these cases were the ones where, you know, 85 bps impact was to be passed on. We've already seen that. Going forward, we still have another INR 12,500 crore of book. Here, you know, there is only one, on a larger component, there is only one rate hike of 35 bps, which is to be passed on. Net-net, we might still have there, because of this INR 12,500 crore, we might still have on the entire book, somewhere in the range of about 3-5 bps, which could probably go further from here. That is in terms of the, you know, portfolio that is yet to experience the rate hike. The second point was, as you get the cost of funds. In the last quarter of last year, you would be aware that we had raised very high cost NCDs at 8.35% because the big cost was high. During the year, obviously, it has been spread out over the quarter. In terms of some of the banks, we've also experienced some, you know, reduction in the rate of interest. These are the two main reasons. The CP that we had raised in between, during that quarter for a short period, that has also helped us. Net, net, if you see, the increase in the loan book has been to the tune of about INR 1,000 crores. In terms of the borrowing, we've not added much to the borrowing, just it's been much lower than that. We are trying to utilize as much as results and available funds are available from internal approvals. These are the two reasons why on the cost side, we have been able to bring down or it's a little lower, and whatever little I said on the asset side. Got it. From here on, costs will stabilize or they'll move up? They will not, are unlikely to move up because, you know, the rates at which we are still getting, and we are still negotiating with banks for a slight improvement. Of course, we can't, you know, comment on how much of it will actually materialize, but we are, you know, trying to negotiate with the banks. The rates have softened in terms of what we are doing. Like, for example, even the NCDs, what we are getting in the market is at a lower rate because of H. Going forward, we don't expect the rates to be on a very high side, on the cost side. Banks are willing to negotiate on repo link or MCLR? Majority of our bank borrowings are linked to repo rate. While the repo rate has not changed, what we are trying to, you know, talk to the banks is that, if we can, you know, work on the spreads over the repo rate at which they are lending to us. Got it. That's clear, sir. Sir, what will be the... You will keep, as you had mentioned earlier, the salaried to non-salaried mix would remain constant from here on, or how does it? Well, there is no attempt to actually change it in any way. If at all it happens, it will be by, you know, automatically, whatever, because of the selection of customers. There is no attempt or a direction to make a change in that. We are comfortable with the present breakup. Got it. There is no, there's no cap on either, right? As in that, depending on customer selection, either can grow, that way? That is correct. The comfort of the, you know, our present customer base is mainly towards salaried. That tilt and that, you know, even the walk-in customers, the word of mouth publicity, everything that comes in, as well as our channel with sources, is also very comfortable with that segment. You know, the, it is likely to continue. Got it. Sir, what's the progress on builder tie-up? We have targeted that. We have not yet started getting the results, but we have made quite a bit of attempt to start the APS. A lot of files at the branches are in the pipeline where the legal processing and checking, everything is done. The benefits should start coming in from the second quarter onwards. By the time we rolled out the, you know, policy for APF approvals and all those things, it was already half the quarter was gone. The efforts branches have been putting, but we have not yet seen any results as yet. Got it, sir. Thank you so much, sir. Thanks a lot. Thank you. Thank you. We have the next question from the line of Dhaval Gada from DSP. Please go ahead. Yeah. Hi, hi, Suresh. Thanks for the opportunity and congrats on a good performance. I just had a couple of questions. First is on the restructured portfolio. If you could just give an update, what is the standard restructured book at the end of the quarter? I think if I heard it right, you said INR 18 and a half crore was the slippage from the restructured book into NPA. If that is correct, what is the, you know, view on the rest of portfolio? That's the first question. Yeah. Thanks, Dhaval. The portfolio, as I clarified, we have totally about INR 475 crore portfolio out of the total INR 691 crore, which has come out of restructuring. You know, there is some portfolio which has come out in April, May and June, which have not even completed 3 months. That is not, I think, correct to consider that portfolio. Based on the portfolio of February and March, which has come out of restructuring and where more than 3 months have elapsed, and where an account, it has moved into NPA, wherever 3 months has not elapsed, that portfolio is INR 250 crore. Out of the INR 250 crore, 19.5 has become NPA, which is 8.67%. We had indicated in the last quarter that it could be up to 10%, there could be some slippage in the restructured book. It has been lower than that. Going forward, obviously, the lessons from this are already there, we are working on them. Going forward, at least we expect that this number could be lower also, we would still like to retain the 10% limit on the conservative side. Got it. In terms of provisioning requirement, you know, through the year, I mean, you still hold on to the great cause guidance given at the end of last year? Or any thoughts of making additional, you know, buffer provision? I mean, I'm saying the entire FY24. See, actually, we have already, you know, while giving the guidance and product projection, we had already indicated that the NPA we will be considering for the working would be 0.7%. We don't expect that to go beyond that. As regard to provisioning, you already know that we had made a provision, management overlay of about INR 17 crore in the Q4 of last year, which we have entirely carried in this year as a management overlay without drawing up from that provisioning for the NPA, which has come out of the restructured book. Whatever has moved into NPA from the restructured book, we have made additional provision as per the ECL guidelines. That INR 17 crore stays, plus whatever addition has come, we have been able to provide from the current year profit. That's how we have not drawn from the original provisions. Technically, we have the additional provision of INR 17 crore, which was the management overlay. We also have this entire INR 67.69 crore, which was done at the time of restructuring. Although INR 250 crore book has come out of restructuring and part of it has moved into NPA, we have made the additional provisioning for that additional INR 19.5 crore, but the INR 67.69 crore stays intact. Very clear. Just last question is on the distribution. The new branch expansion, what's the broad timeline, you know, like, for the new branch addition, for FY24? If you could give some perspective on that will be useful. Sure. We had indicated 15 branches is what we have planned for the year. Out of that, we have done, carried out the survey and everything for 12, and 3 are yet to be, you know, visited and verified and everything. Out of the 12, 4 are in an advanced stage where we have negotiated the identified the property, negotiated the rent and interior work. During this quarter, we should be able to open 4 out of the 15. The remaining 8 probably could be in the next quarter, because we are yet to finalize the rent and everything, and then the interior work will take a little while. Probably, 8 more could be in the Q3. Great. Thanks. Yeah. Sorry. The last three could be in the Q four. Perfect. Thanks. Thanks, Suresh. Wish you all the very best. Thank you. Thank you. Thank you. The next question is from the line of Arvind R from Sundaram Alternates. Please go ahead. Hi, sir. Thank you for the opportunity. I mean, like, the repricing had happened in this quarter also, but the yields quarter-on-quarter hasn't actually moved up. Any reason, like, what is, like, why it didn't happen? I wanted to understand, like, little more on, like, the bank borrowings. Is it only predominantly Canara Bank borrowings, or like, is it a borrowing from, you know, multiple banks? Yeah. Thanks, Arvind. The first point regarding this, why the yield has not gone up. One of the things is that our incremental lending rates are also at a lower rate. Obviously, we have a repricing and the incremental rates also we give attractive rates to the customers to get the business, which is in line with this. That's why, while some of it has been, you know, some incremental yield has come because of the repricing, some of it has been offset by the incremental business which has been done. The second point which I'd like to make is that the INR 30 crore additional NPA which has come, okay? That has also had an impact in terms of the non-recognition of income. That has also pulled down some of the income. Had that NPA remained as static, that income would have been higher, and this would have therefore reflected in the higher NIMs. These are the two reasons why, you know, the NIM, I'm sorry, the yield has not is not getting reflected entirely. Your second question was regarding the bank's exposure and whether entirely from Canara Bank? No. In fact, the Canara Bank has a very small percentage of the total bank borrowing that we have. The total exposure of Canara from what is already given in the related party transaction details, so it's not a very large amount. In fact, the major two borrowers, the major two banks from which we borrow are SBI and HDFC, which are almost, you know, 5 to 6 times higher than what we borrow from Canara. Thank you, sir. Thank you so much. Thank you. The next question is from the line of Sumit Rathi from Centrum PMS. Please go ahead. Thank you for giving this opportunity, sir. One, I wanted to ask on the industry level, how are we seeing the growth, going forward basis, like, given a lot of competition is coming up and, looking towards, housing finance and affordable housing finance? The competition obviously is a constant. It has always been there, and the pace of the competition sometimes changes. In terms of the market, if you ask, we are witnessing a little bit of, you know, uptick in the supply. On the supply side, at least in the medium to high level, property ticket prices, that is in the 2 BHK, 3 BHK and 4 BHK kind of properties, we are seeing some, you know, project launches coming in. That's a good sign, and we are quite confident now that, you know, the demand is also there. You know, the rates remaining static or remaining constant, stable, the people have also come back and buying decisions are happening today in the market. That's also good. A couple of, you know, states are also looking at stamp duty and everything, so, you know, that should also push up something in terms of the demand. Okay. You feel enough levers for the demand is there for it? Yeah. Yes. We are confident that the demand, you know, that the demand will continue. Okay. I joined the call a few minutes late, so probably you would have answered it already, but I just wanted to check. What was the, you know, what are the reason for the sequential drop in disbursement and the new approval? Is there any slowdown, or is it just a quarterly phenomena? No, no. Actually, you know, Q four or rather the second half of the year is always seasonally, you know, normally 55% of the business happens in the second half. First half is a little subdued, and April month particularly is always like that. It's a industry-wide phenomenon, and I think that's the only reason. There's no, no other reason for that. In all our-- but compared to the previous year, June, you would see that there's a 14% growth in terms of the- Correct. Disbursements and 18% in terms of sanctions. Correct, correct. Great. Thank you, sir, and all the best. Thank you. Thank you. The next question is from the line of Umang Shah from Kotak Mutual Fund. Please go ahead. Yeah, hi, Suresh. Congratulations on a good quarter. Thanks for taking our question. A couple of them. One is on the provisions, I just wanted to understand what's the broader thought process, right? I mean, let's say, we are carrying about Umang, I'm sorry, can you be a little louder, please? Yeah, sure. Just give me a minute. Yeah, is it better? Yeah, this is much better. Thank you. Yeah, sure. Sorry, I'll just repeat. On provisioning front, I just wanted to understand. Let's say we are carrying roughly about 25 basis points of provision across management overlay and restructured loans. Let's say these restructured loans converting to standard or NPLs through the course of the year, then basically how should we treat this 25 basis points of provision? Do we intend to carry it as a provision over and above the provisions that we have? The second is on our stage three provisions, right? I mean, although during the COVID period, we had kind of increased the stage three provisions, it still remains significantly higher compared to the what we used to have during the pre-COVID period. On a steady state basis, how should we look at this whole provisioning dynamics? See, post this Ind AS, actually, we are supposed to carry the provision as per the ECL guidelines only. There is only a one small scope wherein as a management overlay, we can carry something more than the ECL. As compared to the, you know, Indian GAAP, wherein we could have a, you know, carry extra provisions. We are already carrying as per the Ind AS provision and as a management overlay, as, you know, till this is possible. Technically speaking, once the entire book of restructured book comes out of NPA, there should not be any reason to carry the management overlay. However, we will, we would like to, you know, if possible, we would like to be a little conservative going forward. We'll see how it can be done. you know, if there is some justification, the auditors also will have to, you know, be consulted. as of the moment, because of the restructured book, we are able to carry a management overlay, but otherwise, we know, you know, it has to be as per the ECL. I mean, although as a management, we would like to carry a little more. Understood. If you could just help me, what is the outstanding restructured book now after, INR 475 crore you mentioned has already come out of restructuring, right? Yeah. We have INR 216.62 crore yet to come out of restructuring. INR 475 crore has come out of restructuring, 216 is yet to come out. Okay, that will come out of restructuring, in the second quarter, or post that? No, we have up to November. August, September, October and November, we have some portfolio coming out. Although, majority of it actually comes out in August. Almost 50% of it comes out in August. Understood. My second question is on liability. Once again, this quarter, we have seen a little bit uptick in our CP borrowing. Just want to understand what's the broader thought process. Now, I understand that in the past, we have run much higher lower tenor of CP borrowing book, and which had come down by the previous quarter. As a management strategy, I mean, do we intend to kind of play tactically as far as this liability book is concerned or we would like to cap the proportion of CPs at a particular level? Hi, this is Akhil. How we look at CP is as a cost leverage tool, not as an liquidity tool. Whenever there is a market opportunity wherein we can borrow from the market at a lower rate and not compromising on the ALM, then at that point of time, we'll try to avail CP to leverage our cost. CP as a cost management tool, cost leverage tool is just the thing. If you look at the number of March, it was 1,350 crores, and in June it was 2,000 crores. This is always backed up against our unsanctioned, sorry, unavailed sanction limits from the bank. In principle, if you are saying whether we are looking at CP as to increase the CP percentage, actually, no. We in fact, this year, we have not even increased the limit which the board has approved for the borrowing from CP. The overall limit, which has already got the approval, the year before, that continues. We've not gone for any enhancement to this thing. It is only an opportunity where we have drawn a little from the CP, but not as a borrowing requirement. Understood. Just one last question is on OpEx. 15 new branches will come in over the course of the year, and I believe in the past, you have also alluded to making some investments towards upgrading our technology systems, so on and so forth. Should we assume that the cost-to-income ratio, where we are currently, will see an uptick in the coming quarters? Absolutely. We have been mentioning that this year we can expect somewhere, you know, last year we were 16.93 or something. We can expect somewhere in the higher 17, or closer to 18%, cost-to-income ratio we can expect. Although with the, you know, the staggering of the branch expansion and the IT expenses, probably we don't know where we'll end, but you can expect it to be somewhere in the 17.5% to 18%. Okay. All right. Perfect. Those were my questions. Thank you so much, and wish you good. Thank you. Thank you. Thank you. The next question is from the line of Shreepal Doshi from Equirus. Please go ahead. Hi, sir. congrats, and thank you for giving me the opportunity. My question was pertaining to the repricing. by when would the entire book get repriced? The entire book would actually come up for repricing up to December 2023. Okay. We have every month, portfolio, because we had last done it in the month of November 2022. That will, the last book, you know, would come up in December when the one part will be passed on. Got it. Given that you said that, you know, there is not material increase in cost that we are anticipating, you know, if that is stable, then what is the, you know, sense on margin expansion? As you said 3 to 5 basis point, but if it is till December, then by what, you know, how much can it still increase? No. We have factored in that the timing aspect also. That is why we have said up to 3 to 5 basis only is the upside that we are having. I guess, you know, the 2.5 spread and 3.5 means is what we can continue and maintain. Okay, got it. There was just one doubt pertaining to the yield and, you know, margin numbers. There is slide number 10, which gives us a comparison, and then there is slide 13, which again gives us comparison. What is the difference between the two in the names, in the yield and cost of fund? you said slide number 10 and slide number? Thirteen. No, in fact, slide number 13 is more of a 5, over 5 quarters and for the quarter, specific quarter, as at end of each quarter, for the quarter. The incremental cost and this thing is slide number 13. As at the end of the for the quarter, it's this thing. I think it's just a subset. Okay. It's just a subset of it. We have given for 5 quarters in slide number 13, this is only for a quarter to quarter and quarter on quarter that we have given in the other 2 slides. The numbers are different. For example, you know, for June quarter, for March 2023, we have given 9.87% as a yield. If you look at in slide 13, it is 8.99%, so therefore the disconnect. You know. No, no, I think I just have it checked. Yeah, I think that is right. Okay. Okay, got it, sir. The last part was, like with respect to the IT infra upgradation, what is the cost that we are anticipating that we will incur for the same? Even in the annual report, there's been a lot of emphasis on upgrading the entire infra and also having 10% coming through digital channels. What is the OpEx that we are anticipating? See, the board has approved a budget of 250 crores, which includes 60 crores for CapEx and the remaining 180-190 crores for OpEx, spread over 7 years. Because this project that we are, the RFP talked about a 7-year project for this. Now, the present position of the project is that we have already received 2 bids from 2 SIs, and the evaluation process is going on. Now, part of the resource is also one of the, there is a manpower resource that they are going to provide, that is the SI is going to provide, is a critical function, which is also going to be part of the pricing. Once the SI is finalized, then we'll know an exact picture as to how many resources they are likely to bring and accordingly to the price. It may not be a very large difference. To cut this thing, INR 60 crore is the CapEx, which will be INR 30 and INR 30 over this year and the year and the next year. The OpEx will not start in this year because it will start from the year thereafter, after the one year AMC start, kicks in. Got it, sir. Got it. Just one last question pertaining to the asset quality. As you said that only INR 216 crore is now left for coming out of the restructuring bucket. Wanted to understand, what is the 30-90 bucket, you know, in% term for Q1 and versus what it was in Q4 of FY23? You are talking about which bucket, sorry? 30-90 bucket. 30-90 bucket. Yeah. Just, I'll come back to you. We'll just do the math and come back to you. Just give us 5 minutes. Sure. Sure, Sure, sir. Thank you so much, sir. Thank you. Good luck for the next quarter. Thank you. Sorry, just to come in, you are talking about the restructured book or the entire book? Entire book, sir, entire book. The entire book. Okay, just a second. On the entire book, our Stage 1 is around INR 30,300 crore. Stage 2, which is, you know, SMA 1 and SMA 2, is around INR 1,260 crore. In fact, the restructured book, entire restructured book of INR 672 crore, we have considered excluding the INR 19.5 crore NPA, is entirely considered under Stage 2. INR 1,260 crore plus INR 672 crore is considered under Stage 2 for the purpose of ECL calculation, and the NPA of Stage 3, INR 205 crore. Got it, sir. Got it. For 4Q, I will take it from the annual reports. Thank you. Thank you. The next question is from the line of Devansh Nigotia from SMIFS. Please go ahead. Yeah, thanks for the opportunity. Also, with the last three years, we see that the DSA dependence has gone significantly high from, I think, 30%-35% to 70% a year. I mean, since, so the management change, how you're looking at it, and incrementally, where we want the DSA dependence should settle? Well, you're right. In fact, it is more than 70%, as you mentioned. It is actually closer to 80% is the DSA dependence of the last year. We would like to, you know, while we would obviously continue with the DSA as a channel, because it's a very important channel for sourcing, but we have also initiated efforts to source direct business, for which one of the earlier questions is also there, that the tie-up with developers for APS projects. We at least anticipate in the next 2-3 years to bring down this 80% to around 60%. The balance will come from, the balance should come from direct business, which is this APS, plus as well as customer walk-ins. Once this IT project is implemented, we'll also be able to push for the digital sourcing, which also will start contributing once the project is implemented. What prevents the DSAs to also show the customer, not to the bank, but to us, considering that the ratio it also has accelerated? How does that happen? Well, the DSAs, first of all, you know, they are also their comfort also comes as to how much they are able to understand and give a commitment to the customer, and how much the, you know, service we are able to give. One of the important factors is that because the DSAs have been with us for a very long time, they are also very comfortable with the kind of policy and the sanctioning and everything, and what loans we are able to give. They are also able to, you know, kind of communicate to the customer as to whether it is possible or not. That is one of the critical reasons that we are able to do. You know, sometimes, you know, other lenders may not be able to give that kind of a comfort, or they may not be able to honor the kind of commitment that the DSAs give. I mean, it's highly interest sensitive. I mean, customer satisfaction, some soft points, if you can elaborate on which, you know, which will be given by maybe other banks will not be given. Probably, they'll provide lower interest rates, so I'm still not. Rate of interest, of course, is an important factor, but service tax, and of course, the, you know, ability to, you know, honor the commitment. You know, we have decentralized sanctioning power, so our branch managers are able to commit and sanction the loans. That is one of the things. Unlike other, many other players who have a centralized setup and a verticalized approach, where, you know, sanctioning is, so the, so the people who are sourcing the loans are not having any say on what is the amount, the quantum, the, the rate of interest, the, you know, terms of sanction and everything. They're not able to commit or able to communicate to the customer. That comfort is one of the major factors, we believe, because of which the comfort is there for DSAs to bring the loans to us. In terms of branch expansion, any location strategy that we have with the regions that we are targeting? Out of 15 branches, we plan to open four in the south, nine in the west plus north together, and two in the east. Sir, I meant, more in terms of are they in the center of the city or outskirts or maybe tier two, tier three towns? We have quite a bit of, you know, urban towns which are, which have come up, which are doing well, and where we feel we can have a good presence. We don't have any presence. None of these 15 branches are actually in the metro towns or in the large or the mini metros. All these 15 centers that we are looking at are the upcoming towns. Most of them are urban towns only. Just the last question. The NCD that we have raised of INR 4,500 crore, what is the interest rate on that? We've not raised. You're talking about the. We have taken an approval from the, in the AGM, from the shareholders to raise additional. We have not raised anything during the year. This is just an our provision to raise, as and when the requirement comes, we will be raising it. This is more to meet the regulatory requirement that 25% of the long-term borrowing has to come by way of market borrowing. To meet that, we have taken the approval from the shareholders. This quarter, we have not raised any NCDs. Okay. Currently, we are seeing market rate below 8% for NCDs? Correct. For the tenure that we are looking at, we are getting quotes at below 8%. Correct. Thanks a lot, sir, for answering my question. Thank you. Thank you. The next question is from the line of Onkar Ghogade from Anand Rathi. Please go ahead. Hey, just a small question on the finance costs, which have increased, significantly. Any particular reason on that front? Finance costs quarter-on-quarter have not increased much. I'm talking about year-on-year. Yeah, year on year it could increase because the underlying repo rate, market, everything is 250 basis points the repo rate has increased on which major bank borrowings are based on. Also, like, capital market from last year till, like, right now are a little pricier considering the repo rate increase. If you'll recollect, most of the, you know, the entire repo rate increase started from post June 2022. So that's where, you know, this whole thing is impacted. What would be the likely scenario in the upcoming quarters for the finance cost? See, in terms of the cost, overall cost, it is kind of going to remain stable, because our revenue, obviously, though we will be trying to, you know, bring down the rates, borrowing costs, from the banks and everything. You can say that it remains stable because now there are no further increases expected. At least, I mean, we hope that there are no further rate hikes. Okay. As of now, you see that the rate, it would remain stable at this rate? Kind of. In this quarter, of course, there has been no rate hike or anything, so therefore, whatever has been experienced is the opening cost, which was there on 31st of March, and almost on the entire liability side, we have experienced the rate hike impact in the last year itself. As far as the year and, say, next 2, 3 years goes, you stay with your guidance of 18%-20% disbursement and AUM growth rate? We are quite hopeful that, you know, the markets will stay up like this, and demand will continue, and we see a long runway for this for the housing finance industry. Definitely we are hopeful that we should be able to maintain that kind of a growth. Unless there is something very, very untoward, which we hope not. Okay. another small thing is on the fundraising, which you had, you wanted to do. Any timeline on that front? Equity fundraising, I mean. No, this is, again, more of an enabling provision. As of now, we have a, you know, ROA of around 2.1, or in fact, 2.19. Even assuming 2 and a gearing of around 8 times, we should be about 18% kind of a growth should be manageable from internal approval. Of course, if the rate picks up and there's a good opportunity, then we will look at it. As of now, we've not got any timeline, but it's more of an enabling provision. You are comfortable with the gearing of around 8, right? Not beyond that. Kind of, yes. Right now, up to the, up to eight, I think, I believe there is not much of a, of an issue. We should be comfortable. Okay. Okay. All right. Thank you very much. Thank you. Thank you. The next question is from the line of Aseem Gupta from Guardian Asset Management. Please go ahead. Yeah. Good afternoon, sir. The TCR ratio seems to be declining for this quarter, so what sort of future TCR are we looking at? Thank you for this. You see, as I explained earlier to one of the other queries also, that, you know, the requirement for the provisioning is purely we ask for the ECL guidelines now. Whatever provision of the TCR of 40... 66% that we have shown is purely based on the provision maintained as per the ECL guidelines. However, it does not include the INR 17 crore management overlay that we are carrying and the additional INR 67 crore that we are carrying for the restructured book. If you include that, definitely it will be higher, and as indicated earlier also during this conf call, that if possible and with the if the auditors are also comfortable, we as management would definitely like to carry a little higher than the ECL provisions. Okay. Sir, previously, we used to receive an outlook of what the loan book growth can be in the coming for this year and for, like, next year. What sort of growth are you looking right now? We have indicated that we'll be looking at around 18%-20% AUM growth, is what we are projecting. Okay. Based on disbursements, shall I say. Am I right to say that 3% of the book gets closed every quarter? That is right. You are right. 3%. Per quarter, you said, right? Yeah. Yeah, that is fine. That is correct. Okay. Thank you. Thank you. The next question is from the line of Prakriti Banka from HSBC Mutual Fund. Please go ahead. Hi, good afternoon. Just two questions. I joined a little late in my investor, in case you spoke about it earlier. The yield improvement in this quarter has been much more than, you know, what we had taken off, of how about a part of our book is going to get repriced by the fact that we might have about 14 basis. What is the yield trajectory from here? The second question is on the average ticket pricing. The incremental ticket price you mentioned in home loans was INR 22 lakhs. Is that correct? Yes, that is correct. Thanks, Prakriti. First point on your answering to your first question. Yield. On yield. On your first question, the yield that we are talking about, we have got a, you know, sequential growth of 16 basis spread and 11 basis in the NIM. We had in, if you, if you recollect, indicated that, you know, the restructured book is going to come out INR 18,000 crore or there at the beginning of the book, which is yet to experience the part of the rate hike, of which we have already experienced it in about INR 5,500 crore, approximately, of about 85 basis. That is the reason why this has gone up. This has also been supported by the fact that, well, we had a, When we began the year, we had expected the cost to remain stable, but on the cost side also, we have been able to slightly negotiate with a couple of banks and have been able to bring down the, you know, borrowing costs. Going forward, we still have about INR 12,500 crore of book, which is yet to experience some of it, but large part of it is yet to experience a lower, you know, spread of 35 basis points only. Overall, we expect another about 3 to 5 basis points, which is possible going from here, where we could see the benefits coming from the rate hike, which is yet to be passed on. Okay, got it. On my calculated numbers, I'm getting a yield increase of, you know, almost over 30 bps, but on your numbers, it's not that bad, right? You're still at about 15, 16 bps only in this quarter? I'm sorry, I didn't get you. 30 bits of what? No. The quarter-on-quarter basis, it's mentioned in yields. Yield comes up to what quantum? Not the share. No, the yield is around 9.84% is what is the yield on the portfolio. I think that also we answered earlier, that 9.87% which was there. There are two reasons why that is not getting reflected in the yield going up. One is because, you know, while the yield has come on the INR 5,500 crore of books, we've also been on the incremental lending, we've also had some offers and all that. The incremental lending rate is also on slightly on the lower side. That is part one. Okay. Part two, which, is that we have additional increase in the NPA of about 30 crores, and therefore, there is a non-recognition of income on that additional 30 crores, which is also one of the reasons why the yield has slightly been pulled down. Got it. Understood. Coming to your answer, sorry, we missed out on the INR 22 lakhs. You are correct, the average ticket price for the quarter in home loans is INR 22 lakhs, as compared to INR 24 lakhs of last year. That is more because, you know, the, some large value things were stopped in the city of Bangalore and all, because, and Karnataka, because of the change in the sub-registrar offices and digitization that was going on in some of the locations. Some high-value loans, we have had to have impacted in the disbursement also. Another INR 80-100 crores of disbursement also has probably been impacted because the sub-registrar offices were not taking the LSRs and all those things were getting impacted. Okay. Otherwise, the, you know, the idea of moving, increasing our average ticket size, that continues to stay? That continues. Again, as I think you might have missed this answer also, we did the mention in the beginning that this APF that we are talking about and the builder tie-ups, that was incidentally the first question, that where we said that we have that intent to start the target and we have started the efforts. By the time we rolled out the policy and everything, it was almost half the quarter gone, the impact is yet to be witnessed. Once that comes in, is when we will start seeing the, you know, business coming from the APF random projects and the, you know, INR 25-1 crore kind of a segment. Got it. All right. Thanks so much for answering my questions. Thank you. Thank you. The next question is from the line of Harshvardhan Agrawal from Bandhan Asset Management. Please go ahead. Hi, sir. Thank you for the opportunity. I just wanted to understand the stage two numbers that you mentioned. If I were to look at some transcripts of previous years, these are hovering at around INR 1,000 crores, or maybe INR 1,100 crores of stage two number, and the number that you mentioned now is at somewhere around INR 1,900 crores. There's a sharp increase in stage two numbers in the last 1 year. How should one look at it? Is there some important stretch that you're looking at? No, no, I'll just clarify. Our stage two numbers are around INR 1,260 crores only. I said that additionally, the entire restructured book we are considering under stage two, although they are under stage one or regular, or they have not even come out of the restructuring. Okay. We are taking the entire thing and making a higher provision. For the ECL purpose, the entire restructured book has been pooled along with the stage two asset for the purpose of provisioning, not that they are in stage two. I agree, sir, even in the previous on-call, we obviously had the same policy. Just, earlier when we had the INR 1,000 crore rough number, even that included the restructuring book. Even today, including the restructuring book, it's around INR 3,000 crore. I just wanted to understand. No, no. How could it be... I just clarify, even in the month of March, what phase two we had, that is SMA 1 and SMA 2, was almost in the same line. In fact, there is a little INR 100 crore this is an increase. Probably, you know, the INR 1,100 crore that you're talking about might be the same, because we have, overall our, you know, delinquent portfolio has come down by about 150 bps, INR 150 crore. Stage one, stage two has slightly increased by INR 100 crore, which is what is coming up as INR 1,100 crore-INR 1,200 crore. sure. That helps. Great. Thanks. Thank you. The next question is from the line of Shweta Daptardar from Elara Capital. Please go ahead. Thank you, sir, for the opportunity and congratulations on this set of numbers. A couple of questions. The first one being, I just wanted to understand the math behind, you know, setting aside the seasonality and the disbursements, repayments are giving steady quarter-on-quarter. In light of 18% growth, how do you see this math panning out going ahead? Sorry, can you just, Shweta, can you just repeat it? Because we are slightly, you know... I'll be louder. Repayments are running steady on sequential basis. Disbursement, you said there were slightly, you know, due to seasonality, there were slight sluggishness. You are guiding 18% growth, so how do you see the math panning out in terms of repayments versus disbursements in order to support that 18%+ kind of growth ahead? Well, if the disbursements, You're right, the disbursements, which is about 14%, should pick up in the coming quarters. You know, with that, we should be able to, probably, we are now at the 18%, it could slightly go up. Again, as we move forward, you know, the pressure on the prepayment should also come up. I think it is fair to keep the target at 18%-20% only. In this quarter, we've not actually seen any pressure on prepayment. Hopefully that remains. This might pick up, but normally in the second half, the prepayment pressure also starts coming in, and the competition also starts offering very attractive rates and, you know, special schemes for BP and all those kind of things. Right. Right. Okay. Just secondly, you mentioned you are comfortable at 8 kind of leverage, if I just extrapolate, you know, going by your risk-weighted assets number taken from the annual report, is it that, you know, it becomes minimum for category raising in FY25? Well, as I said, it's eight times, 8x, eight times gearing and two ROA. 18% is there. If we consistently keep doing it, probably we may require, yes. Okay. Normally the, you know, this thing only comes in the Q1, but once the, you know, the AGM happens and the accounts are approved, then in that case, normally the borrowing does go up. That time it's normally not much of an issue thereafter. Okay. Okay. Just 2 bookkeeping sort of questions. One is, if you could provide the content of borrowing for the quarter gone by, and also what is your RAC rate for the loan? Sorry, what is the second question? First was the borrowing. Second is? What is your growth rate, RAC rate? Lending rate. RAC rate. RAC, okay, RAC rate. During the quarter, we have experienced a loan book growth of roughly INR 950 crores. We have like on the bank borrowing side, we have experienced a net incremental borrowing of roughly around INR 700 crores. Our lending rates start from 9.6% onwards. Okay. Okay. Sure. Thank you. Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Thanks a lot. Thanks for the opportunity. Two questions. The first one is, if you can decompose the growth guidance that we are giving, 18%-20%, would have some ticket size inflation rate, which would be around 4%-5%, some amount of e-efficiency in it, branches would be maturing. What is the pure growth number, pure new business number in that 18%-20% growth that we're guiding for? That's the first. Second is, how do we split our OpEx into cost of collections and cost of acquisitions? If you can further split the cost of acquisitions in south territory, which is our home territory, and non-south territories where we want to expand our book. Thanks. Yeah. The first question, Shubhranshu, I'll just answer your first question. The calculation of 18%-20% is based on a 20% growth in the disbursement. Last year, we had done about INR 9,000 crores. Around INR 10,500 crores or thereabout should get us, you know, considering the present prepayment ratios and all, should get us somewhere around INR 6,500 crores of net accretion to the book. That will be around 18%-20%. That's the basic math. Now to the question as to where the 20% of growth will come from. We have branch expansion, about 15 branches planned for the year. That should bring us, but that should not be a very large number because we have it staggered over the period, and the first year, the branches won't contribute very large numbers. For the majority of it should come, one, from the, you know, increase in ticket size because of the normal inflationary increase that happens in the cost of construction and all, which should be around 3%-4%. Additionally, we are looking at an increase in terms of the ticket size, which should also help us in bringing this, because, you know, we are targeting this approved project via the ATS, and that should help us slightly increase our ticket size once we move into the 25 to 1 crore segment, which is predominantly the segment where this ATS happens. This is the main reason. Right. frankly, 18%-20%, roughly, you think, 7%-8% should come out of ticket size and impact, right? kind of, yes. What would come out of branch efficiency? Obviously, another, we expect another 10% of all branches to do definitely more than what we are doing. At least 10%-15% with branches, what we have increased for the budget for them, and another 5% should come from the ticket size and from the branch expansion. Okay. The OpEx part that I had asked? See, the major, you know, at, we have 80% of the, of the, I answered the second part of your cost part of it as to what is the acquisition cost. We have 80% of the loans being sourced to the DSA channel, where we are seeing a graded structure and about 0.43 of the is what is the payout, which is effective payout that is going out to the DSA channel on that 80% of the loans which are being sourced to the DSA channel. That's the only other, you know, acquisition cost, because we don't have any other, any other channel. We are not much into, you know, this. A little bit of, you know, business development expenses could come this year, but because of this ATS penetration that we are looking at. Right. Cost of collection? Cost of collection, actually, there is no additional cost of collection except for whatever, because it's our own staff that is doing the collections also. We don't have a dedicated separate team or anything which is doing it. In terms of that, I wouldn't say there is much of it, and nothing that I can attribute separately to it. Right, right. If I could just squeeze in one data keeping question, what is the total borrowing number of this quarter? INR 29,000, sir. INR 29,700. Right. Thank you. Thanks a lot. Thanks, Subodh. Thank you. Thank you. We have the next question from the line of Pawan Kumar from Yantra. Please go ahead. What will be the BT out for this quarter, and? Sorry, I'm sorry to interrupt, sir, but the line for you is very low in volume. If you could please speak closer to the mic. What would be the BT outs for the quarter, and what should be the normalized BT out ratio for the year? The BT out during the quarter is not a very high number. Our normal prepayments is ranging between INR 100 to INR 125 crores per month. That's about INR 400 crores, I think max we would have, not even that much. About INR 350 crores is what we would have had a prepayment, of which BT out would probably about INR 100 to INR 125 crores, not more than that. INR 125 crores per month? Quarter. For the quarter. For the quarter, okay. Yeah. Okay. Sir, another thing on the restructured book which has come out of INR 4.70 odd crores that you are talking about. How do we actually define that they have come out, in the sense, is it like the payment due has already started? Are there any further more GNPA expected from the same INR 470 crore pool going forward? Because my understanding is, there would be maybe... I mean, how many have actually paid one or more installments? Sure. How we consider them there to be out of restructuring is that whenever the restructuring was given, there was a tenure of fixed tenure for which the restructuring was given. Once the period comes out, the EMI demand or rather the demand starts. That is when we say they are come out of restructuring. Right. Okay? As of now, while INR 475 crore has come out of restructuring, as I had earlier mentioned, only about INR 250 crore is the portfolio wherein more than 3 EMIs have become due. From that, if you look at it, only about INR 19.5 crore has turned into NPA. The balance portfolio is where at least customers are paying something. That's the thing. Now to the remaining part, whether there will be some more NPA that could come out of 475? Yes, because 475 minus 250, around INR 225 crore, are such cases where even 3 EMIs have not become due. Some of the customers, if they don't continue to pay, and then they could move into NPA, plus there is a INR 216 crore of portfolio which is yet to come out of restructuring. Overall, we have given earlier a guidance that up to 10% could go into default, wherein we may have to carry a provision. Although the provision out of INR 250 crore, this is only INR 19.5, which is 8.67%. Okay. This INR 250 crores, since they have not paid their 3 EMIs, I mean, then it should technically be a GNPA, right? We have classified INR 19.5 crore as a gross NPA. For the rest of the book, out of INR 250 crore, there have been cases where people have paid out of it. There have been say, people who are absolutely regular, and some of them are in SMA 1, 2, or SMA 0. Okay. Apart from this INR 250 crores, out of the INR 470 crores, you are saying they are paying very regularly? There are so cases which are paying out. I didn't say all of them are paying. As I said, INR 475 has come out of restructured book, of which INR 250 is where more than 3 EMIs are due, and INR 19.5 has become NPA. Sir, I think you are... Okay. No, no, the NPA is not 250 crore. I'm sure. 250 crore- No, no, I understand. Portfolio, which has crossed 3... Where more than 3 EMIs are due, only 19.5 is such where the customers have not paid 3 EMIs, and are therefore NPA. The remaining ones have paid their EMIs, part of it or full. If 3 EMIs are crossed, then it is 90 days plus due, right? Yeah, that's right. They have been in more than NPA, no? That's why INR 19.5 crore is such where they have not paid. If they have paid, say one out of the two EMIs, they would be in SMA zero. If they have paid two out of three, then also they will be in SMA zero. That's how the classification. I'm saying only INR 19.5 crores are there, where more than 90 days, EMI three, more than three or more EMIs have not been received, and that is the portfolio which is classified as NPA, out of the INR 250 crore. The remaining INR 231 crore is such where they are paying. Okay. Okay. If you are taking it that way, now, INR 250 crores worth is the portfolio who has become regular out of the restructured book. It is not that they are not paying. Mm-hmm. Okay. Okay, that's fine. Fine, sir, thank you. Thank you. We have the next question from the line of Anusha Raheja from Dalal & Broacha. Please go ahead. Thanks for taking my question. Am I audible? Yes, yes, you are audible. Yeah. What will be your full year credit cost guidance? The credit cost, we are talking about 10 bps only. We have so far not seen anything. We may have to carry some provision for the NPA, but in terms of absolute write-off and credit cost in that sense, where we will not be able to recover, that will be not more than 10 bps. ... that will the total hit on the PNL will be closer to around 10 bps. That will include on the restructured provisioning as well, right? No, no. You are talking about credit cost in the term of losses, or you're talking about NPA provision also? NPA provisioning. We are saying 0.7%, up to 0.7 could be the portfolio which could be under NPA. Consider including the portfolio which will come out of the restructuring. Point 0.7 is the portfolio which will be NPA. The actual provisioning of that would be 0.4%-0.46% is the ECL guidelines that we are doing, or 0.5, you can say. That would be the provisioning that we will have to carry on that book. But the actual credit cost in terms of the write-offs, in terms of the amount we will not be able to recover from the customers, it will not be more than 10 bps. Okay, okay. I just actually moved on to your builder loan strategy. If you can just elaborate a little bit more on that? This we are doing, with a view to improve our direct sourcing, we would like to. We have identified the APF, that is, the project approved, project file, concept for tie-up with builders for sourcing of direct business. There we have already initiated efforts, we have already, you know, marketing with the builders for sourcing the projects. Thus far, we have not received any approvals because we have started it only in the last month and a half or 2. We are expecting that to happen, once that happens, mainly we are targeting the segment of 2 BHK, 3 BHK properties in the geographies that we operate in smaller projects, not the very large projects, because, you know, the smaller projects are easier to handle. Basically, this will be the Category B and Category C developers. With the cat B, cat C, category of developers, we would like to tie up for the project sizes, where the unit costs are in the 25 lakhs to 1 crore segment. In that, we would like to tie up with them for, and give the legal clearances so that we can do direct sourcing of business from there. Okay. What is the average ticket size of the home loans currently? For home loans, it is INR 22 lakhs in this quarter and INR 8 lakhs for the NHL. Okay. Incrementally, you're saying that closer to around 5% or growth in the AUM can come from increase in the ticket size. That will, you know, this 22 can become 25 or right, I mean. We are projecting it to slightly be in the INR 25 lakh-INR 27 lakh range. 27 to 28? INR 25 lakh-INR 27 lakh range. Because we are right now at INR 22 lakh, it has to inch up. Last year also, we were around INR 24 lakh. Once we, actually, once we start doing this APF project, we expect an average ticket size of around INR 40 lakh in the APF, from the APF projects, because they are, as I said, they would be the INR 25 lakh-INR 1 crore segment. An average ticket size around INR 40 lakh is what we can expect from there. This would help, you know, even if we get 10% business from this segment in the year, we should be able to increase it from the present INR 20 lakh-INR 24 lakh to around INR 27 lakh. Okay. Upwards of INR 30 lakhs, if you will see, I think even banks are quite active in that segment, right? When you say that you will be having 80%-20% sort of growth, you know, over a longer period of time, and incremental, you know, some part of the growth is also coming from the higher ticket size. How do we see that? Because that will, you know, also call for shrinkage in the margins as well, right? There could be some impact on the margin, but basically, as I said, we are looking at the Cat B, Cat C developers and the smaller projects, you know, where the project sizes. There, we should be able to at least make some inroads and get some business. Okay. What could be, you know, how can we look at this as builder sourcing sort of loans over the next year, over the period of next, you know, say, 1 or 2 years? What could be its share in the total, you know, the loan book size? With APFs that we are talking about, we expect, you know, going forward to contribute somewhere around 20% of the business. Right now, as we mentioned, 80% of the business is sourced through DSAs. We expect that to come down to around 60% in the next 2-3 years. We would like to bring about the APFs to contribute about 20%, our direct business another 10, and about 10 could come from the digital sourcing that we would be able to start once our systems are in place. Okay. How much could be the benefit, you know, in this versus, you know, how much you pay out to DSAs, currently? See, we are paying out up to 0.43, that is 43 bps, for the to the DSAs, for the business sourced by them. That obviously will, if we get the direct business, that is, that will be a saving, which we can use to pass on to the customers in terms of using. I mean, you broadly, we can expect the return ratios in terms of ROE and ROE to maintain, you know, at the current levels, despite the fact that there will be increase in the ticket size. That's a fair assumption? That is a fair assumption, 2-2.1 ROA and around 17%-18% ROE. Okay. Thank you. Thanks. Thank you. We will take that as our last question for today. I would now like to hand the conference over to Mr. Suresh Iyer for closing comments. Over to you, sir. Yeah. Thank you. Thank you. I would like to thank all the, all of you for for taking your time out for this, you know, Q&A session and for this presentation. If there are any queries, you can always be most welcome to reach out to us. I hope we have answered all the queries. If there is anything missed out, you can please get in touch with us. Thank you. Yeah. Thank you, Nilesh. On behalf of Investec Capital Services, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.