Please note that this conference is being recorded. I now hand the conference over to Mr. Uday Pai from Investec Capital Services. Thank you, and over to you, sir. Thank you. Good afternoon, everyone. Welcome to the Q4 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 and CEO; Mr. Vikram Saha, Deputy MD; Shri Prakash, Deputy General Manager; Shri Prashanth Joishy, Deputy General Manager; and Shri Apurav Agarwal, CFO. I would now like to hand over the call to Mr. Suresh Iyer for his opening comments. Over to you, sir. Good afternoon, everyone, and welcome to this earnings call for Q4 performance of Can Fin Homes Limited. As you all know, we declared our results yesterday, and the Q4 results. In the Q4 results, the main highlight is that in terms of disbursement, wherein we had seen a fall in Q2 and Q3, in Q4, we have been able to pull back, and that growth in disbursement compared to Q3 has been up by 23%, and we've been able to it, INR 2,300 crore plus disbursement. That's almost an average of INR 750 crore plus run rate per month. While this is lower than what it was for the previous year, but, we have still come back in terms of disbursement, and it gives us the confidence that going forward, we should be able to now focus on business and, push the AUM and, disbursements and AUM. The second highlight of the performance is that, in terms of our recovery, compared to the performance of Q3, we are, the gross NPA in absolute value, as well as in percentage terms, has come down. Compared to the 0.91% gross NPA as at the end of Q3, we have ended the Q4 at 0.82%. And, in terms of the non-restructured portfolio, our gross NPA percentage stands at 0.55%, which is the same as what it was in the previous year. Whatever, therefore, the increase in the NPA that is there is mainly on account of the restructured book. Even in terms of the restructured book, we would like to highlight that the gross NPA has reduced compared to the Q3 levels. As at the end of Q3, the gross NPA in the restructured book was INR 96 crores, which has come down to INR 92 crore. And therefore, in absolute value, it gives us confidence that there is no further slippage expected, other than the normal course that would be there, in terms of the restructured book also. And it's now been five months since the entire book has come out of restructuring, because the last pool also came out in November 2023. So therefore, it gives us confidence that no further slippage is expected, even in the restructured book. However, we have continued to carry the management overlay of INR 34 crore, which we had created in March 2023, INR 17 crore in March 2023, and seventeen crores in September 2023. So that management overlay is continuing. Additionally, of course, we have also carried the provision of INR 58 crore in respect of the COVID restructuring guidelines, where we are required to carry 10% of the portfolio, which is offered restructuring. However, in that, we have there is a INR 1 crore reduction in the provisioning in the COVID portfolio because of the portfolio which has been closed or has been prepaid by the customer. So in respect of those accounts, we have withdrawn the provision, which is at, including about INR 1 crore. Other than that, in terms of the profitability, the company has had a been able to maintain a healthy spread of 2.67% compared to 2.66% as at the end of Q3. During the entire year, we've had a continuous improvement in the spread as well as the NIM because of the portfolio which came out, where the repricing was impacted during the year. So the entire portfolio, which was got repriced up to January, and thereafter from January, we have also moved to a quarterly reset. So going forward, whenever there is a increase or decrease in the borrowing cost, the same will be passed on to the customer. So therefore, that will bring in a more stronger ALM position. In terms of the financial ratios, there has been an improvement in almost all the ratios. Even in the long term, in terms of our debt equity ratio, it has improved further from the previous year. So this is broadly the highlights of the performance. If I have to just mention to you a couple of the ratios, in terms of the ROA, it stands at 2.28%. In terms of the ROE, it is 17.28%. The spread, as I mentioned earlier, is 2.67%, and the debt equity ratio is 7.34%, down from 7.97%. So these are broadly the highlights of the performance of the year. Going forward, in terms of where we, how we look at the coming year, FY 2025, we would like to push on disbursement since we have already, you know, covered in terms of the various attempts that we have made and efforts that we have made in terms of strengthening the process in terms of the policies and processes. So a lot of it we have already achieved, and which is also made available in the presentation. So going forward, we would like to push on disbursement, and we are targeting around 15% growth in terms of the AUM for FY 2025. Thank you. Over to you. Yeah, thank you. Am I audible? Yes, sir. Yeah. Should we begin the Q&A session? Please, please. I think anything else we can take up in the Q&A session. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their 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. Yeah, hello, sir. Hi. Congratulations! Hello. Yeah. Hi. Thank you. So I had a few questions. Firstly, Ma'am, may I request you to use your handset, please? The audio is not very clear. Okay, just give me one second. Yes, ma'am. Hello? Yes, ma'am, this is better. Please go ahead. Yes. So, basically, my question was on yield and cost. Your yields have remained pretty steady, and so has your cost of funds. How do you see it going ahead? And also, if you could talk us through competitive intensity, in your segment of borrowers and, you know, who are the two to three most aggressive competitors? If you could throw any color on that. That's my first question. Okay. See, in terms of the yield and cost, actually, our cost has gone up from 7.35- 7.4 during the quarter, because obviously in Q4, there was a liquidity was also tight, and therefore, the funds that we have raised in Q4 have obviously come at a slightly higher rate. But at the same time, it has been offset by the increase in the yield. So on actually both sides, we have seen five five basis points and 6 basis points increase. That's why our spread overall has remained same as around 2. 6%, it has slightly moved to 2.67%. Going forward, in terms of the spread, obviously, we will have, you know, there could be a cost rate reduction in this financial year, which we are hoping. So if that comes also, but it will not have much of an impact because we are also going to pass on the rate to our customers. And we, if you recall it, in January, had informed that we have moved from an annual reset to a quarterly reset. So in terms of the resetting for our, on the asset side also, it will happen on a quarterly basis. So that is in terms of the yield and cost. However, if you are to, you know, if you were to ask for a guidance, we would probably say that in terms of the spread, we would look at about 2.5% and 3.5% NIM, is what we would be targeting. Now, second question or second part of your question regarding the competitive landscape. Well, in our scope, that is in the INR 20 lakh-INR 75 lakh segment, where almost 50%-60% of our business is happening. Now, in that segment, of course, there are the competitors are there, but the main ones I would say are LIC, LIC Housing, PNB Housing and Bajaj Housing. These are the three main ones. Of course, banks are always there, but the main ones who, from which I can say is from the point of view that, you know, our loans, if you have, if I have to see from who are, who are the competitors who are picking up our loans, then it would be these three. So this is what it is. As far as our competitiveness in this segment is concerned, we are also offering an attractive rate from 8.95 for customers who are in the 700+, CIBIL score segment. So in that segment, therefore, we are quite competitive. So getting this thing would not be, it would not be that, you know, it would be difficult or anybody's pricing undercutting or anything of that sort. Of course, there are, different players at different, levels, and I think at this level also we'll be able to get a very good, you know, quality of customers, in the areas that we are operating in. But your competitors in the 700+ segment, are they lending at 8.95 or lower? Well, actually, there are at, at different segments, you know, I mean, different, different, players, like all the banks are also operating in this segment. And nowadays, in fact, there are other players, smaller players, who are charging at a higher rate also, who are also having a very good customer, CIBIL scores in their, portfolio. So basically, it is not only the, you know, the rate of interest or, the CIBIL score it matters. The CIBIL score overall, we have observed that in the industry has been moving up because people or customers have become a little more, you know, They have become a little more understanding and aware of the importance of CIBIL scores. So that is one thing, because of it, the scores are going up. And two, in terms of the competition, as I said, there are other players who are charging much higher than us also, who have more than 50% of their portfolio with 700+ scores. Got it. Got it. Okay, sir, thank you. That's very helpful. Thank you. Thank you. The next question is from the line of Aditi Loharuka from CD Equis earch Private Limited. Please go ahead. Good afternoon, sir. Sir, my question to you is, like, what sort of specialization do you think housing possesses, which enables it to compete effectively with other companies in the housing market segment? See, if you were to ask what is our USP, one is, of course, you know, we have a very experienced staff. It's a 33-year-old company. Our stability of staff is also very good. So when it comes to explaining to the customers or understanding the exact need of the customers, I think our staff is that way well-equipped and well, experienced. Second thing I would say is that, we also have one more aspect, that we have decentralized sanctioning. Of course, we do have a review and checking mechanism where all the loans sanctioned at the branches are checked by the credit review monitoring department, but, at least the local sanctioning is there. So the branch manager at the branch at the local location is able to give a fair idea to the customer as to whether the loan is possible or not, and two, how much roughly the loan eligibility works out. So this gives a, you know, immediate comfort to the customer, which I believe is also one of our very strong USPs. ... Okay, sir. Thank you. Thanks, Aditi. Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yeah, thank you, and good afternoon to you all. May I request you to use your handset, please? So your audio is muffled, sir. Is it better now? Slightly better, sir. I'll try, otherwise you can let me know. I can change. So, so thank you and good afternoon to you all. So just wanted to understand that this has indeed been a good quarter, but if I look at the disbursements that we've been doing quarterly, very clearly, right, I mean, there is still a YOY growth that we see. So just trying to understand, are there products, customers, that we were doing maybe one year back that we are not doing now, right? Is something I wanted to understand, that is there room for further acceleration in the disbursement momentum? Or, I mean, have we stopped doing certain product segments which led to much stronger disbursement momentum in the last fiscal year? Just, just a related question. I mean, is it then kind of safe to assume now that whatever challenges we had seen after the Ambala fraud, none of those things, none of the process-level changes, none of the system technology changes that we were doing are now impacting the business momentum today? Yeah. Good afternoon, Abhijit. First thing on the disbursement side, see, I wouldn't say that there are anything that we are, any products or any things that we have withdrawn from the market, except that, you know, a couple of years back, we had a very small portfolio of construction finance, which we are not doing. So we are now purely focusing on retail. The only other thing that I would say is that in terms of the processes and in terms of some of the policy, small, small changes, we have tried to strengthen and streamline the processes and strengthen the policy matters. Just one case in point is like, you know, earlier, our CIBIL score, you know, floor rate was, floor score was, 600, which is now up to 650. So this is more in the view of, with the view of, you know, strengthening the quality of the portfolio. So that is the, I think, the only kind of small, small changes we have done. Otherwise, we are not actually missing out on any, any market. Generally, but, if you ask me, yes, our focus on the LAP portfolio or in terms of our top-up loans or BT in as a strategy is something which we have not, aggressively, explored. So in terms of that, there is always a scope that if we can look at these two things to slightly get a little more aggressive and push for disbursements. However, you know, the disbursement, whatever the slowdown that we have seen in the second and third quarter is more because of the process changes that we have introduced. And there, I would definitely say that we are much more comfortable and confident that you know, now we are in a much better position to monitor and stream and look at the quality of the portfolio being sourced. So that way, we have strengthened the processes, and we are quite confident now. The second thing is as to whether it will impact our business going forward. I would say not much, because as I said, we had done it in the beginning of the second or the third quarter. So those kind of changes have now kind of become part of the system, and now everybody is used to it. Like the centralized disbursement when it was introduced in Q3, beginning of Q3, at that time, it did impact in the month of October in a big way. But now it has been streamlined, the entire process has streamlined considerably. So going forward, this may not have much of an impact. However, I would say that, you know, we are still continuing with our process of improvement. One of the things, of course, would be IT, which, you know, is there. We have introduced some IT-related modifications and improvements in our process, and those things are kind of on a continuing basis, so those things will continue. Got it, sir. So then, maybe, because you spoke of IT investments on a continuing basis, this quarter, there was a little elevated, other topics, that, you report. So, I mean, are there any one-offs there, or have we kind of maybe front-loaded some of the investments that we, talked about in the past? Because I remember, in the recent past, you have been guiding at, slightly higher OpEx trajectory, whether we look at cost to income or OpEx to assets. That is correct. In fact, we have in this quarter had about additional INR 5 crore expenses approximately because of the IT interventions, of which some of it is because of which is on an ongoing basis. So about INR 3 crore on a quarter kind of will keep get added on an ongoing basis because you know we have this upgradation of our software, which we embarked upon. The second thing is another INR 2-odd crore we have spent on some of the changes and which are more in the nature of a one-time cost, which will not be repeated. So that's the kind of thing. However, you know, this is only part of the improvement, as I mentioned, that the IT changes is an ongoing kind of a thing, and, therefore, this is just part of the total overall expenses that we were anticipating and which has not happened entirely in this financial year. That's why if you would say that, we had in the beginning indicated that probably our cost-to-income ratios could go up to about 18%, but it has not gone up that much because some of the cases have kind of been postponed or gone a little further. ... Got it. So, sir, I mean, then for FY 2025, that guidance of cost-income ratio of 18% then stays? Yes, yes, you can say that because some of the costs will still, as we start investing further and we introduce further IT changes, some of the costs will further happen. So we will continue with the 18% guidance for cost-income ratio in FY 2025. Got it, sir. And sir, maybe in the interest of time, just one last question that I had, was, I mean, the asset quality has been behaving well, looks like, and what you said in your opening remarks, the pain from the restructured pool is now comfortably behind. So I mean, have you had some conversations with the regulator or the auditor in terms of how long we want to hold this management overlay of INR 34 crore, or for that matter, the standard provisions in the COVID portfolio that you are holding today? Okay, two parts to it. One is, you know, this management overlay of INR 34 crore, I, that is not a regulatory requirement or anything. It is more from, from the management's point of view, and we have taken the conservative step. And if you would recollect, in, at the end of Q2, we had said that we are making this additional INR 17 crore, which, you know, we would like to make for the likely provisions that could come in the balance restructured book. And it came in on those similar lines only, but then, then we have decided to not, to, to continue a conservative approach and continue with the management overlay. So that is, as regards the management overlay, it's just a conservative approach, which we would like to continue. The second part about your COVID restructuring, provisioning, that is a statutory requirement, and as long as the portfolio continues, we'll have to do it, subject to, I mean, the portfolio remaining above 80%. So in the sense that if the restructured pool, or a particular individual loan was given, say, INR 10 lakh, was restructured, then if it comes below INR 88 lakh, then we can withdraw 50% of that particular provision. So that is something which, you know, is more guided by the regulatory requirement. Having said that, we have not withdrawn the provision, and we have not reduced it to 50% for those cases where it has gone below 80%. We have continued to provide the entire 100%. But only for those cases where the loans have been closed, we have withdrawn the provision from that original, INR 68 crore, which in Q3, we withdrew INR 10 crore because of the closed loans, and in Q4, we have further reduced it by another INR 1 crore because of, some more closures that have happened in Q4. Okay, Suresh. This is very, very useful. Again, congratulations on a good quarter, and wish you and your team the very best ahead. Thank you. Thank you, Abhijit. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. Thank you. The next question is from the line of Rajiv Mehta from YES Securities. Please go ahead. Hi, good afternoon. Congratulations on strong results. So I've got two questions. Sir, firstly, what is the disbursement target and BT out rate assumed in your AUM inputs, forecast of 15% for FY 2025? See, in terms of the disbursement, we think about INR 11,000 crore kind of a disbursement or thereabout should help us achieve a 15% growth in AUM. Current year, if you see, we have about INR 4,000, crore-INR 4,800 crore, which is about INR 400 crore, which is a monthly BT out, plus amortization, plus part payments. So the loan closures happen because of three parts. So all three put together is about INR 400 crore on an average per month. So if going forward, we think, you know, we believe that, you know, looking to the slight increase in the book, next year it should be around INR 450 crore per month. So that would be the kind of average run rate of BT out, plus prepayments, plus lower amortization. Okay. And how should we look at this 15% growth guidance? Is it just for FY 2025 because we are still adjusting to the new processes, and that we are going to have some tech system changes in FY 2025, as well as we are developing the new sourcing channels? And then FY going into FY 2026, would our aspirations of growth change? See, if you look at our disbursement target of about INR 10,500 crore-INR 11,000 crore, also, if I have to look at it, even INR 10,500 crore would be about 30% growth in disbursement from the current year. Okay? But, generally, the AUM or the outstanding portfolio, there is always a lagged impact, and it always grows at a slightly, you know, gradual pace. So even with the 30% growth in disbursement from the current year, we will be able to achieve about 15% growth in AUM. But if, but as we sustain the disbursement growth in the country in the following years also, this 15% will go up to 18% and 20%. Got it. Got it. And just one clarification, does our reported NIM include fee income as well? No, it does not. NIM is only on the interest part of it. Understood. Thank you, understood. Thank you. The next question is from the line of Devansh Nigotia from Safe Enterprises. Please go ahead. Sir, can you, I mean, elaborate a bit more on, you know, from the time you joined, our aspiration advances growth was 20%, which we have kind of moderated to 15%.... So, is it because of the changes in the IT system, and, you know, the malafide incident why we have moderated in terms of growth? Or, I mean, can you share your perspective over here? Well, in the first quarter, yeah, thank you, Devansh. The first quarter, actually, we did see a good, healthy growth in the last year. But, in July, we had this incident because of which we had to undertake a bit of strengthening of the processes and streamlining, and a lot of fresh, you know, processes or controls were also introduced. We centralized the disbursements, we centralized the reconciliation, we also introduced a credit review monitoring department, which reviews, as a, is a double check on all the loans. And we also introduced some other checks in terms of IT processes and all. So basically, this slowdown or our, you know, pullback happened mainly because of our changed processes and the strengthening that we did. I think that was most necessary at that time also, because we needed to have the confidence that, you know, such incidents do not happen again. So basically, it was because of that. In terms of the market, if I understand, is where you are coming from. In terms of the market, I don't think there is a slowdown or there is anything where we need to be worried about, except that probably in the affordable segment, I personally believe that there would be a little bit of a slowdown. But of course, we decided to move a little out of it or rather move a little in the higher segment, so basically in the INR 20 lakh-INR 75 lakh segment. Because we believe that, you know, probably in the sub-INR 20 lakh segment, there could be probably some slowdown or some issues in terms of the supply, since the CLSS has been withdrawn. So having otherwise, in the segment that we are talking about, INR 20 lakh-INR 75 lakh, there is a very robust growth, and we believe it, this will continue for a few more years, looking to the number of launches, project launches across cities that we are witnessing. What would change, what would give us the confidence to change this trajectory of advancing growth from 16% to, let's say, 18%-20%? What, what are the things you're looking for, internally in the company that you want, that will help you inch up the disbursement significantly from here on? See, first of all, we have already undertaken some changes in the IT, and I believe that is going to be one major thing which will, which will, determine the kind of growth that we'll be able to deliver. And, we have already undertaking some... undertaken some of the changes in terms of the IT processes, IT systems. And this is, as I said earlier also, is something which will continue for, one more year or maybe a year and a half also. And that is what will give us some, strength in terms of, you know, we will be able to do a better digital onboarding. We'll be able to have some more processes which can be kind of done digitally, like, you know, like we introduced this time the verification of PAN, verification of Aadhaar and all those things. So all those kind of things will also bring in some productivity improvement. So basically, it is IT a major investment which we believe can help us further bring in the growth. That is one thing. Not to mention that, you know, even without that, looking to the market, we are confident that we should, even in the current year, have a much better disbursement performance. Thank you. Thank you, sir. Yeah, thank you. Thank you. The next question is from the line of Raghav Garg from Ambit Capital. Please go ahead. Hi. Thanks for the opportunity. Sir, sometime back, I think couple of quarters ago, you had highlighted, because of the developer channel that you were exploring and that you had gotten into, your branch efficiency would improve by 10%-15%. Where are we on that? And how long will it take you to achieve that 10%-15% efficiency improvement on a per-branch basis? Because I believe that is one lever or one low-hanging fruit for you to possibly deliver a better AUM growth over the next couple of years. Got it. No, you're right, Raghav. In fact, we had mentioned about this APF, which we are targeting and which we are looking at. So we have initiated that, but frankly speaking, it is still not, you know, given us the traction that we were looking for. It has been a little slow development on that side. And this year we are definitely looking at, pushing that, you know, very aggressively. Last year, we could not get much out of it. Although, you know, some of our interactions with the builders, some of our, you know, visits and all, have helped us in getting some bit of inquiries and leads and conversions, because of which, if you see our, you know, INR 30+ lakh segment particularly, we have seen a good growth in terms of the disbursements, incremental disbursements. However, I would not, I would not, I mean, it is not... From our point of view, we are not very satisfied with what we have achieved over there. Still, a lot can be done over there. If you were to highlight you know that you are facing? Or what is it that what are the reasons why you're not able to do it? Well, actually, you know, there were two things I would say. One, mainly is that, you know, it was more of a DSA-driven channel that we were having. So first is, we had to also get the boys on the ground to do the marketing. Plus, you know, you know, to have a builder ties. In fact, we, I would say we were probably not completely ready with the kind of offering that we need to give to the developers, because what existing players like, you know, the larger banks are offering to developers for these ti- these kind of ties, that kind of an offering, we, we, we were not ready with. So we are working on that, and once we are ready, only I think we will be able to get that kind of a thing in terms of, you know, how we are able to offer a, offer a quicker process for the developers, having people on ground, on the project sites and everything. So that kind of, you know, a little more feet on street. So these are the kind of things where, you know, we couldn't achieve, I believe the reasons why we couldn't achieve the, that particular aspect. Sure. And sir, your INR 10,500 crore-INR 11,000 crore of disbursement next year, what sort of a ticket size increase are you building in? ... Yeah, this year we have actually, our housing loans ticket sizes improved from INR 22 lakh average to about INR 25 lakh. And next year, probably we can still look at up to INR 27 lakh, we can look at it. Understood. And so just one last question from my side. I know you explained it to one of the previous participants on the OpEx, but sorry, I missed it. What is it that led to this 39% growth in OpEx? That will be all from my side. See, there are two components to this increase. Of course, one is the normal, as I mentioned, at almost, almost, 16 or more than for, for, for, this thing or the other expenses. But, the main thing was, we had a couple of one-off, you know, expenses, like, we have this, GST for which we have about INR 6.5 crore. We had the assessments for 2017 onwards, which came for assessment in this year. So all those things we have kind of closed. So that is about INR 6.5 crore roughly. A little bit is on the IT expenses, which I explained earlier, that now we have another INR 3 crore increase, on a month, on a, on a quarterly basis because of the IT on, which will be on an ongoing basis. And some INR 2 crore odd, which is for the, fixed expenses, one-time, one-off expenses, which we paid for the, modifications and, additions in the IT that we introduced during the year. And little bit is on the CSR, where, again, our obviously limits have gone up because the profits have been going up. So that also we have done. So these are the some of the reasons because of which the mainly the, you know, about INR 12 crore odd mainly is because of this. Sure. Thanks a lot for that. Thank you. The next question is from the line of Darshil Jhaveri from Crown Capital. Please go ahead. Hello. Good evening, sir. Hope I'm audible. Yes, yes, Darshil, you are audible. Yeah, yeah. Hi, thank you so much for taking my question. A lot of my questions have already been answered. So I just wanted to know our NIMs target of 3.5%, are we being a bit conservative? Because I think we already in Q4 have achieved around 4% NIM. So, like, NIM, or that was my first question, and what kind of ROA are we targeting for FY 2025? 3.5% is what we said is something we would definitely want to work above, above that. Now, how much above that is something we would not be able to say. Obviously, if it is possible and if it is there, we would definitely try and work towards a higher NIM. But we would say in terms of the guidance or if you were to, you know, kind of do your projections on math, then probably you can work with about 3.5%. That is what I would say. As regards our ROA, we can, we would... I believe we will be comfortable with about 2.2% end of an ROA for the for FY 2025. Oh, oh, perfect. Perfect, sir. And sir, I just wanted to, you know, like sense of picture, like somewhere in some affordable housing segments, we are seeing some issues, but is that even the mid segment? You know, are there some issues that, you know, there have been seeing industry-wide that can, you know, lead to further slowdown or, you know, inflation creeping up or some demand issues? Because supply may be launches are happening, but then on the demand side, do we see, like, you know, any issues coming from that side? Yeah, of course, in terms of the super luxury and in the luxury segment, definitely the demand is very, very strong. But even in this INR 20 lakh-INR 75 lakh segment, the demand is quite decent. And in about six months' time, the developers are able to, you know, mostly get out of the projects comfortably. So that is not much of an issue. So- I mean, I don't see much of a problem in that, because we have been getting good inquiries, good kind of, you know, quality leads also. Oh, oh, okay. Okay, perfect. Perfect, sir. Yeah, that's it from my side. So congratulations on a great quarter. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Pavan Kumar from RT Capital. Please go ahead. Sir, can you just give us a normalized run rate of OpEx, apart from employees? Because this quarter, it was around INR 33 crore. I understand you have given some estimates, but what should be the run rate, sustainable quarterly run rate from here on? See, we've got some fee and commission expenses, which are roughly in the range of, annually, I would say, are in the range of INR 27 crore-INR 28 crore, which is going to increase in line with the disbursement target for this year. Other than that, OpEx are roughly in the range of INR 18 crore-INR 20 crore per quarter, roughly aggregating to INR 80 crore a year. From here on. Sorry, Mr. Pavan Kumar, you are not audible. May I request you to use your handset? So this would be, this would be INR 20 crore from here on, right? Yes. So for this financial year, quarter one starting. Okay, got it. And, on the disbursement side, sir, I mean, from the next quarter onwards, can we expect the disbursements to be, let's say, average around INR 2,500 crore-INR 3,000 crore here on, or still it would take time for the processes to settle? See, actually, in the... if you look at it, most of the companies and if you look at the, you know, since the last many years, that generally there has been a trend that about 45% of the business happens in the first half, and about 55% happens in the second half. So that way, you can consider that, that kind of a trend would continue for us also. ... Okay, fine. Thank you. Thank you. The next question is from the line of Shubhranshu Mishra, Mishra from Phillip Capital. Please go ahead. Hi, Suresh. Hi, group. Thanks for the opportunity. So, I think you've answered this question a bit before, so I just want to check, the average ticket size increase is roughly around 10% when we decompose the disbursement, of which my sense is, almost 67% would be a natural inflation which happens annually. So, when we look at the number of loans, how many number of loans do we do on a quarterly basis now? And, what are we thinking of doing in the, on a quarterly run rate in 2025 and 2026 as well, if you can spell that out. That's on the disbursement. Second is, what are the resistance that we are facing in terms of, reducing our DSA sourcing versus home sourcing? Third is, is there a board-approved set parameter that we can't do much of construction finance? Is that an impediment to have more builder tie-ups? Because my sense is that the builders would really like construction finance, which later on gets knocked off with the home loan, making Can Fin Homes a preferential lender in that particular project. So these are my three questions. Thanks. Sure. Sure. Yeah, hi, thank you, Shubhranshu. See, first of all, we are doing about 3,800 to about 4,000 loans in every month. That's the kind of numbers that we are having, and that comes to, you know, with an average ticket price about INR 22 lakh-INR 25 lakh, we would, we would be getting somewhere in the range of about INR 750 crores is what we are getting. Now, in terms of what we are looking at in terms of increase in the ticket size and how much it would, would come from the increase in the number of cases, a 5% increase in the number of cases is what we would be targeting at minimum. That is what will help us, because, you know, as you rightly pointed out, there is an inflationary cost increase that happens. Plus, of course, that we are moving to a slightly higher segment from INR 25 lakhs -INR 27 lakhs is what we are targeting. So all three put together should help us in getting the desired result of, in terms of disbursement growth. The second question was regarding DSA sourcing. In terms of DSA sourcing, so what we are doing is, if you recollect, we had said that last year we had tried about 51 branches, which are, you know, with a cutoff of some limit. We had introduced as a pilot, about one staff we had identified for marketing. So that has helped us, because this year, from the beginning, when we had about almost 85% plus of business coming from DSA channel in Q1, we were able to bring it down to 80% in Q4, and that has been a kind of a consistent reduction. So this, we believe, has kind of helped us in getting some direct business. Plus, incentives of the, you know, internal contests and all that we are running is also helping us get some direct business. So we will be continuing that, and in this year, our plan is to have, from 51 branches, we would like to roll out the same thing to almost all our, across our branches. Across all our branches, we would like to have dedicated staff for marketing from within our resources, not external. We are not going to recruit additional outside staff, but from within our teams, we want to separate people for marketing and expand this, what we have done on a pilot basis. So that is how we are looking at bringing down the DSA sourcing. And the third point as to why we are not doing, I think it's an, construction finance is more of an internal decision. One, because, we are not, you know, having that kind of... Construction finance, unlike retail, it requires a different kind of a skill set and analytics and all those things of the developer, the project, evaluation, viability, and all those things, which we believe we need to first have a dedicated team to analyze this before we can, you know, roll it out on a, in a, in a proper manner. So that's why, as an internal conscious decision, we are not going for construction finance for the time being. As regards whether it would hurt in our APF push, probably, yes. But you know, any which way, that loan is taken by only, from only one lender, but there are still four or five approved lenders who are there in any project. So probably we would like to be the remaining three or four. Understood. Just one data keeping question, if I can push on. What is the concentration of Bangalore in our disbursement as well as outstanding AUM? Same for Karnataka, and if we can speak about non-south territories for disbursement and AUM concentration. In terms of the region-wise, I think we've already given in our, you know, slide. But further breakup, if you want, in terms of the south, we have 65% or something in terms of the number of branches and 72% in terms of the disbursement. Now, out of that 72% also, if you look at only Karnataka specifically, then we have about 40 branches out of 200. So about 20% of the branches are from Karnataka, and the contribution is somewhere in the range of 27%-28% of the business, incremental business is coming from Karnataka, and so also in terms of the portfolio is roughly around the same only. What would be the concentration of Bangalore in this? Most of it would be Bangalore, because we have very few branches outside of Bangalore. But of course, when I say Bangalore, it would also include almost 60 km-70 km outskirts of Bangalore also, which actually now, because the city has also expanded so much, so, I mean, probably all that would also be considered under Bangalore only... but other than Bangalore or, say, I would say that would be a little less. Understood. Thanks, Suresh. Yeah. Thanks, Shubhranshu. Thank you. The next question is from the line of Mohit Jain from Tara Capital. Please go ahead. Hello? Yes, sir. Please go ahead. Hello. Yeah. Hi. Good afternoon, sir. Thanks for taking my question. Sir, my team just hinted about the slowdown in the affordable housing segment. So, in the current year, we had almost 37% of our disbursement in this in less than INR 20 lakh threshold. So going forward, do we see that we'd be having higher disbursement in, let's say, INR 20 lakh-INR 75 lakh bucket? And the related question is: how is our interest rate different in the two buckets, like, are we charging the differential rate in the two buckets? So how is that going to turn out, sir? So, I wouldn't say that there will be a major reduction in the INR 20 lakh segment, below INR 20 lakh segment. We will still be pushing for it. Mm-hmm. But as a percentage, this would come down because with higher loans that we are doing, obviously, in terms of They will have a higher impact, even, you know, three loans of about INR 35 lakh would be equivalent to almost, you know, 10 loans of INR 10 lakh each. So in that way, if you look at it, you know, then the percentage-wise, you know, it might still come down, but in terms of number of cases, we would continue to do in the 10, sub-INR 20 lakh segment also. Mm-hmm. So I guess that is what... Yeah. I think you had one more question to it, right? I'm sorry, I missed. Yeah. How's the interest rate different in the- Sorry, sorry. Yeah, interest rate differential. So, we have about 65-75 basis points is the difference between the below INR 20 lakh and above INR 20 lakh segment. So above INR 20 lakh, we are offering our rate starts from 8.95%, whereas in case of below INR 20 lakhs, it starts from 9.6%. Okay. Thank you, sir. Thank you. Thank you. you. Thank you. The next question is from the line of Jigar Jani from B&K Securities. Please go ahead. Yeah, hi. Thank you for taking my question, and, congratulations on, great set of numbers. Sir, on your slide 14, when you mention the yield and cost of borrowing, on your, overall for the March quarter, you are seeing a sequential decline in spreads, but your NIMs are actually moving up by 4 basis points when you compare to the December quarter. So, just want to understand, these are what, incremental yields and, NIMs. And, just as a follow-up, so do we see, like, incremental spreads being at 2.28% overall? Yeah. So we, that is a very good observation. Actually, this page, slide 14 that you're talking about, where the spread is 2.28%, it is only for the disbursements and the borrowings of the Q4. So obviously, in Q4 being the last quarter, there's always an aggression, and there are offers which are laid out, and there are also... You know, this quarter, did you also know the liquidity was also a little bit tight, which normally happens also in Q4? So the borrowing costs do go up. So basically, this is a Q4 phenomenon, where it is slightly squeezed. But, you know, in spite of that, because of the benefit of the rate increase and all that we were seeing, the overall in terms of the book, at the end of the year, we have experienced a spread of 2.67%. So that's what it is. So in Q4, yes, incremental business, we've had a slight squeeze in the spreads, but that is more of a phenomena of Q4. And, as soon as the trades come for repricing and everything, they will again, you know, reset in Q4 on the liability side as well as on the asset side. This is a discount that you have given to push growth, with this? Yes. Problems with the- Some slight discounts in Q4, and we've also had a slightly higher cost of borrowing because of the liquidity issue. Understood, sir. Secondly, given all the noise on the regulatory front, the regulator also becoming quite stringent on procedures and processes, any highlights from the regulator, NHB or RBI, post your annual audit, something that you would like to highlight, if you have received any changes suggested by the regulator to be done in your systems or processes? No. In fact, our you know annual inspection for the year ended March 2023 got over in, I think, January 2024, and the report has also been received, and we have responded to the report also. And there are no any special observations or any kind of, what you call, restrictions or conditions laid down in that report. It is business as usual. Overall, however, as you are rightly said, that, you know, overall the the regulatory landscape is slightly becoming, you know, tighter and, that, but that applies to all the players in the industry, not anything specific to us. Understood, sir. Thank you so much for answering my question. Thank you. The next question is from the line of Vinod Dadlani, who's an investor. Please go ahead. Good afternoon. My name is Vinod Dadlani. I have a couple of simple questions. One is, was any recovery attempt made for the fraud which had happened couple of years back? And whether anything happened, anything is likely to happen? This is one. Second is, who's conducting internal audit in the company? Is it external sources or is it within the company? Okay, yeah. First point, see, in terms of the, what happened two years back in 2022, we had a issue at, one of our, branches of Bhilwara, where about 67 cases were identified, where customers had, submitted, you know, forged income papers to get a higher loan. Okay. Out of the 57 loan cases, 50 loans have already been closed, means they have been fully repaid and, either the customers have moved out by making the full payment and they have closed the loans, or their loans have been taken over by some of the competitors. In fact, in a couple of cases, even nationalized banks have taken over the loans from us, from that pool of 57. So therefore, the regulatory debt continues. And even those seven cases, it is not that the customers are not there. Customers are very much available. The properties are also very much there, and they have a good amount of value, but because they were classified as a fraud in 2022, they continue to be flagged as a fraud. That is in respect of the two-year-old issue that happened. The issue in terms of the August what happened in August this year, of course, there, no recovery has happened. There, the complaint has been filed. The accused, the main accused is behind bars and, you know, we are trying to push it for the enforcement director or the CBI or the SIT will take over that matter. So that is something which is under process. As regards the second question about audit, we have our own internal risk-based internal audit team, which is carrying out the audit. And the audit committee has laid down the guidelines for carrying out the audit and all, and it is the internal team which is doing the audit. Yeah. So it is head of risk who is head of audit, is it? Sorry? Because I see in this main management team, you are, I think, somebody who's taking care of the risk management. So is he the one who takes care of the internal audit? Yes, yes. Mr. Ratish, who is the head of RBIA, that is a Risk-Based Internal Audit. Okay. So it is, it is audit cum risk management, right? Risk-Based Internal Audit, yeah, that is correct. Okay. Okay. So I'm sorry, I- We have a separate, say, CRO, and so the risk basically is handled in terms of the, you know, overall risk and all those things is handled as by, by the risk department, which is separate. Here, Risk-Based Internal Audit is what we call it, but it is the internal audit. So basically, risk is separate and audit is separate. Yeah, but then there's no mention about head of internal audit. I saw head every other function. RBIA is internal audit only. No, no, I agree, but who's the gentleman who takes care of risk audit? Because I didn't see his name, I think, or his photograph in the presentation. No, no. Mr. Ratish, his photograph is the last one- Okay. -in the bottom row. Low, low, the bottom row, right side. Fine. Thank you. He is the head of internal audit. Fair enough. Thank you. Coming back to question one, maybe there's some confusion. I think I was talking about this Ambala thing which had happened. That was something which had happened. So that recovery was done or that didn't happen? No, I said... No, I said No, I said no. So that, it is in the courts right now, and the main accused is behind bars, and the money trail and everything has been, you know, whatever it is, the police has to establish it, and they'll have to carry out the further work in terms of seizing the assets and everything. Okay. So that, in terms of that, there is no recovery. The full provision was already made in the month of, in the quarter, in second quarter itself, in September. Results, we have already taken the full provision for the same. Yeah. So likely that the one that whenever the recovery happens, it can be, it can come as an additional income, is it? Yes. So we can be still hopeful that there will be some windfall kind of a thing in next few quarters? Yes, technically, yes. It all depends on the speed with which the police works and the, you know, judicial system works. Fair enough. I hope that you have the right people to follow up and ensuring that whatever can be done, should be done. Yeah. Thank you. Thanks. Thank you. Thank you. The next question is from the line of Chandrasekhar Sridhar from Fidelity International. Please go ahead. Hi, good evening. I have a few questions. One, Suresh, maybe you could just help us directionally, how do you see the mix between, salaried and self-employed moving over a period of time? I'm just, started dropping, you know, it's moving a little more in favor of self-employed in the recent past. So anything to read into that and directionally, how we want to, move that? And could you just help us with what's the yield differential right now on your average salaried book, you know, versus the self-employed book? And as we basically start doing a little more larger ticket sizes, do you think that, given that you may be a little more competitive over there, you know, spreads sort of become a little more competitive, that naturally, the business basically does a little more self-employed over a period of time to retain that, you know, 3.5% NIMs? Thanks. In a way you're right, that yes, the HN, the high net worth, when we are talking about higher ticket size loans, there we are offering a competitive rate, just like, you know, it has to be competitive in the market. So that does slightly impact our spread and our yields. And there is no special effort to kind of push up the SENP, that is, self-employed. We have slightly increased a little more so in the Q4 as compared to the previous quarters. But there is no special effort to kind of push up the SENP or the self-employed category. Although, yes, we have kind of reviewed that segment, and now with more, you know, people filing returns and everything, therefore, we are able to get that also, you know, in a better way, fit into our norms. So basically, that is the reason why it has been slightly increasing. However, even in the self-employed segment, we are not doing the cases of appraised income or surrogate income case documents. So when we are saying self-employed, we are still talking about the cases where people have been filing at least two years of IT returns. We have a very small component of portfolio, which is cash-based salary or which is with a one-year ITR or something. It's mostly when we are talking about self-employed, we are talking about people who have filed two years' IT returns. So that is one thing. But yes, that does give us about half a percentage point, that is 50 bits higher, yield in terms of the self-employed segment vis-a-vis the salaried segment. ... Got it. Got it. And directionally, this is not, I mean, this largely 70/30, should not become like 60/40 over a period of, I mean, like three, five years. It's not directionally the way of thinking? No, no, no, no. We would still be comfortable with the 70/30 only. Right. And you did say, you know, the last time around, you eventually wanted to get DSA down to 60% at, you know, some point in time. Just curious to understand what does it just mean in terms of sourcing costs, and why you haven't added additionally in terms of manpower right now at the branch level? Just maybe how does it eventually help you save on cost, or do you need to start eventually at some point in time adding, you know, people on the ground? See, in terms of the DSA right now, let me just say that, you know, incrementally, we are still doing, you know, even in this year, we have done about 80% of sourcing through the DSA channel. However, on a portfolio basis, only 72% of our portfolio is sourced through the DSA. So it does the phenomena of the last three or four years, where the incremental sourcing from the DSA channel actually spiked, and which we are trying to control and bring down. So in terms of the overall book, we are still at 72%. Having said that, we would definitely, we stand by that. We would like to bring it down to 60%. The second point is in terms of sourcing costs. See, the DSAs, we have been at, on an average, paying about, you know, anywhere ranging from 35-60 basis points, we are paying on the loan amount, at the time of disbursement. But on an average, it comes to around 43-44 basis points is what we are paying to the DSAs commission. Now, in terms of direct, sourcing, yes, this will slightly, reduce, because what we'll be paying as, whatever for the incentives to our staff or everything will be much lower than the 0.43% or 0.44%. So to that extent, it will come down. Presently, at least we believe that, you know, we will be able to segregate, from our existing team and pull out a separate team for marketing. Going forward, we'll see, you know, as to how we will be able to manage this. As of now, the idea is to manage it from internal sources only. Thank you. Thank you. Ladies and gentlemen, the last question for today is from the line of Shweta Daptardar from Elara Capital. Please go ahead. Thank you, sir, for the opportunity. So two questions. One is, what is the rejection rate for us for the proposals that are proposed, that are raised or sourced from DSA vis-à-vis our own internal channels? And, if you could first, address this. See, I wouldn't be able to give you what is the rejection ratio from the DSA channel. However, because, you know, many of our DSAs are well-trained, they have been with us for a long time, so mostly they are aware of our internal policies and what will be accepted in our system. So there I wouldn't be able to give you. Most of the what I can say is that most of the cases being sourced by the DSAs, at least the old ones who have been with us for a long time, it would be as close to probably over 98%-99%. However, in terms of the incremental sourcing, which our people are doing, yes, the incremental ratio would be much higher. But, again, I would not be able to give you an exact number. I can only offhand say that probably it will be around, you know, about, 25%-30% would be the rejection ratio. Noted, sir. So secondly, at the branch level, so do we have ceiling on how much, approvals, or, you know, the, the targets which branch manager would have in terms of accepting a particular proposal? So is there a ceiling on, say, ticket size or loan amount or anything on GMI? And have these targets or ceilings, sort of undergone change, as on today, wherein we are, you know, in the process of revisiting our systems and processes? See, there are, you know, delegation of powers linked to the grade of the staff and the tenure of the staff with us. So based on that, it ranges from INR 35 lakh to about INR 75 lakh, depending on the grade. That has not undergone any change in terms of our present system. We have continued to that. However, we have introduced an additional checkpoint wherein, not a checkpoint, but an additional, you know, backup, wherein, you know, we have a credit review monitoring department, which reviews each and every case that is sanctioned by the branch. That happens anytime in a span of about 48 hours to about 96 hours from the time of the sanction at the branch level. So it is more of a double check by the credit review monitoring department. But it is not a, you know, bottleneck or any. It is not a showstopper, because what the branch is sanctioned will continue. However, as a second check, if in the credit review monitoring department, what we have done is that if we are finding that, you know, there is some slightly higher risk that is being, you know, taken or onboarded by the branch, then we would take a call that we might either reduce or withdraw the powers of the branch manager. So that we have additionally done, and that is what the CRM department has helped. So in a couple of cases during the year also, we have actually withdrawn the powers of certain branch managers. Thank you, sir. Yeah, thank you. Thank you, Shweta. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Yeah, thank you. Thank you everyone for taking out your time, and, I appreciate all the queries. I hope, all the queries have been answered. Of course, if there are any other further or subsequent queries, you can always, touch base with us. The presentation is there. I thank you once again on behalf of the entire Can Fin team, to all the people who joined this conference. Thank you. Thank you. On behalf of Investec Capital Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.