Good day and welcome to Can Fin Homes earnings conference call hosted by Investec. I hand it over to Nidhesh Jain, our lead analyst, NBFC and Insurance with Investec India. Over to you, Nidhesh. Thank you, Ramya. Good afternoon, everyone. Welcome to the quarter four FY 2026 earnings conference call of Can Fin Homes Limited, hosted by Investec Capital. As a reminder, all participants will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation conclude. For Q&A, please raise your virtual hand and we will unmute you from our side. We will start with the management commentary followed by a Q&A session 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. Shailesh Kumar Singh, Mr. Prakash, President, Mr. Uthaya Kumar, President and CRO, Mr. Abhishek Mishra, CFO of Can Fin Homes Limited. Please note that this call will be recorded. I would now like to hand over the call to Mr. Suresh Iyer for his opening comments. Over to you, sir. Thank you, Nidhesh, and good afternoon to everyone, and welcome to this earnings call for FY 2026 results of Can Fin Homes Limited. I'll just take you through the brief highlights of the performance for the year ended March 31, 2026, and then we can have the question answer session. I'll start with disbursements. First of all, in terms of disbursements performance as against the guide and this is by quarterly from the initial four quarters in relative performances, it has a new four quarters before 24. In terms of the areas Karnataka both zones started with some performance Karnataka. This is input and by the end of delayed to some extent. Otherwise in most of the, you know, urban centers it's coming quite okay. Therefore, you know, this performance is likely to continue. In this year we are targeting a 15% growth in disbursement in Karnataka. In terms of the quarterly performance, as against Q2 and Q2 disbursement of an average INR 250 crore per month in Karnataka, in Q4 we could achieve about INR 290 crore average disbursement per month in Karnataka. It is a little positive. In terms of Telangana, we started off with a Q1 negative of 33%, and that consistently has been coming down. Particularly in Q3 and Q4, we've had a very, very steady run rate of more than INR 100 crore disbursement. We could, you know, reduce the gap. Unlike the expectations that we had originally given of that we might also end up with a positive in Telangana, we have almost ended flat against INR 1,198 crore disbursement last year. We've ended up with INR 1,147, it's a marginal thing. In terms of the current year, we are looking at a positive from day one because we've already reached a consistency in terms of performance, and Telangana now is doing about INR 100+ per month. We have reached that level. Now in terms of the, you know, AUM growth, we had originally targeted about 11%-12% growth. However, you know, what we had started off with was that we would be having approximately about, you know, INR 6,000 crore rundown, including the part prepayments, full prepayments and everything. That was based on the fact that last year we had about INR 5,400, INR 5,300 odd crores of rundown in the entire year. We had assumed that there will be a INR 6,000 crore rundown. You know, Q2, Q3, and Q4, we've had a slightly elevated rundown situation. Therefore, we ended up with about, you know, INR 600 odd crores extra over and above the INR 6,000 that we had targeted. That has actually shaved off some of our AUM growth expectations. We've ended up with about 10.44%. For the current year, we are targeting that, you know, if this is our present position, then we may have a rundown of about INR 7,000 crore for the entire year. Based on that, with a INR 13,000 crore disbursement target that we have kept for the year, we should be having a net addition of about INR 6,000 crore to the book in FY 2027, which would result in about a 14% AUM growth. In terms of the prepayment intensity for the year, actually, we've not had much of a BT pressure compared to Q3 or other. I would say it was very static because as against you know a total of about INR 370 crore-INR 380 crore in terms of the BT out in Q3. As against that, it has been about INR 400 crore in Q4. Considering that Q4 normally is a very hectic and a very high pressure kind of a quarter, still the increase in BT outs has been very marginal. Therefore, it gives us confidence that the shift that we have made from annual reset to quarterly reset will help us. Now with almost 85% of the book having shifted to quarterly reset, the entire 50 basis points has been passed on to our customers. That should help us in managing our BT outs. Other than that, in terms of 1,691 was a total runoff including in Q3, including the partial prepayments, including the amortization, debt outs and normal closures. As against that, it has been INR 1,730, which is very much in line. Q4 pressure also we have been able to somehow has been handled well. Next, we come to the delinquency performance. For the fifth quarter in a row, we've had a reduction in our absolute delinquency numbers, and that has helped in you know ensuring that our credit costs remain low. Overall in Q4, we have seen a reduction in our overall NPA numbers also. That also has brought down our GNPA number to below the last year number of 0.87%. We've ended with 0.85% in terms of our NPA numbers. Going forward also, we see that there is you know, even in the month of April as well as in the month of March, in spite of the geopolitical situation, we have not seen any major stress in terms of delinquency. Therefore, in terms of our you know, going forward guidance for delinquency, we expect that you know, our credit costs will remain benign. While it has been about 10 basis points for the current year as a whole, however, you know, on a conservative basis, we would still like to continue with the guidance of 15 basis points, although we don't see any stress, and it could well be below that by the end of FY 2027. As regards spread, as I mentioned earlier, we had a, you know, higher percentage of portfolio which was under annual reset. Almost 70% plus of our portfolio was at an annual reset, and that it was 71.14% at the end of last year. That has changed drastically because this year we also sent across communication and sought consent from our customers. In Q4, we've had a major reduction from 48% to below 15%. Now almost 85% plus of our customers are at a quarterly reset. The entire benefit of the quarterly reset, that 50 basis points, has been passed on at the time of the revision to all of them. Now as on the entire portfolio, after giving the impact of this quarterly reset, 50 basis points to all our converted customers, as well as after considering the 15 basis points that we reduced in January, also the entire book yield will come down to 9.8%, and that also excluding the you know any reversal in NPA income and all. Nine point eight, that means that we will be able to retain the spread of 2.8% starting from day one in this current financial year also. This was one major concern which, you know, every time was coming up that what if the portfolio converts from annual to reset, you will have to the spread, the spreads will come down. That we have, you know, taken into consideration, and therefore this one additional slide has been presented in this, presentation, where we have showed that as on 1st April, after giving the entire impact of conversion to quarterly, as well as after giving the, you know, benefit of that 15 basis points to customers, eligible customers, is the yield will be, opening yield will be 9.8%, and the spread of 2.8%+ will be maintained. However, as a conservative, again, as a conservative basis, we therefore continue the, you know, guidance of 2.75% spread and 3.75% on the NIM for the FY 2027. So that is, in a nutshell, the entire details of the performance. As regards the profitability, this year we have had, you know, in Q4, two one-time specific events. One was the impact of DTA, wherein earlier we have been providing for the DTA on the NPA. Whereas in case of standard assets, the DTA was not being provided, so that has been provided from this quarter onwards. That's a one-time impact, additional impact of INR 46 crore. The normal would have anyway, there would have been some impact because of the provision, DTA on the NPA. This additional provision for the standard assets that has been provided is INR 46 crore. There was also the closure of our income tax refund status, where INR 13.5 crore income tax refund was received and the matter was closed by the department. That also we have taken into account. Excluding these two one-time events also, if you look at it, our profit for the entire year would be as against INR 1,085 crore, it will be INR 1,027 crore, which is also a 20% growth over the last year profit of INR 857 crore. These are the two one-time events which we have taken into consideration. I guess with that's in a nutshell. Going forward, we would have a little impact in the current financial year of about INR 40 crore, which we have been talking about, in our cost because of our IT implementation. In fact, INR 6 crore of that cost in the Q4 has already been booked in this year also. While we were saying it will start from Q1 of FY 2027, INR 6 crore has come in this year also, which has been already booked. Additionally, slightly the cost to income ratio next year will be a little elevated, which we have been already sharing. Overall next year we hope to be able to maintain our ROA of more than 2.3%, 2.4%, in fact, more than 2.4%. Therefore, ROE might slightly be impacted because of the cost, but still it'll we hope to have an ROE of 18%+. That's the in a nutshell the highlights of the performance. Thank you once again for joining for this earnings call, and I request now to open the floor for questions, please. Thank you. Thank you, sir. We will now start the Q&A session. I will request the participant to introduce him or herself, stating your name and the organization name. I will unmute the participant and state his or her name, and then he can unmute himself to ask the question. The first question is from Siddharth. Siddharth, please, I'm just unmuting you. Yeah, Siddharth, you can now unmute yourself and ask your question. Please introduce yourself. Yeah. Hi, am I audible? Yes, Siddharth. Please go ahead. Yeah. Hi. My first question was, you know, how helpful have the IT programs been, and could you share any qualitative insight on how it's helping us right now? Sure. See, in terms of the IT on which we have already implemented, we have presented the slide. We have already implemented on the infrastructure side. Mm-hmm. Also on the security aspect. Both have been completely done. Of course, that is helping us in terms of the speed, in terms of the connectivity and all those issues. That has come down considerably wherever there were, you know, this MPLS lines that has happened, considerable reduction as CP has been witnessed. In terms of security, of course, it is, it is just, you know, it is just the confidence I can talk about. I can't obviously say that, you know, but we have, our MTTR and MTTD that is, time to identify a problem. This we have been very well within our limits. It has been giving us a lot of confidence that, you know, any kind of, you know, attack on the system, we have been able to immediately catch and we've been able to handle it also well. So that is well within our, you know, prescribed or whatever is guideline, you know, the benchmarks we have set for ourselves. As regards the applications, we have already gone ahead with our deposit applications, so that should reduce a lot of our, you know, time or, that would be going forward will be there. Other than that, in terms of our entire, HRMS package has gone online, so now there's a lot of, saving in that also. Whatever manual calculations and, impact that were there, that is there. Additionally, what I can say is that, you know, some of the upgrades that we have done, we've been able to bring in some AI components also have already come in. Like for example, in terms of our, you know, digital signatures and everything have been implemented. Our entire, you know, DMS has been implemented, so search and everything for records has improved. In terms of our mailing solutions, that has also been completely moved to Office 365, and we also have the benefit of the, you know, Copilot and all. In terms of legal, we have implemented a new solution for, you know, title search and this, you know, legal clearance report and all. That has also brought in a lot of efficiencies. Of course, the main component, which is the LOS and LMS, which is yet to be implemented in Q1 of this year, that will also, once implemented, will give us a lot of advantages and we will be able to, you know. Therefore, a higher amount of benefit will start coming in at that point in time. Understood. That's great to know. The second question is, you know, just after, you know, I think on April first we shifted to quarterly reset for most of the largest chunk of customers, right? Yes. After that, would you assume that the BT out rate or the rundown rate has peaked now? Are you- I would probably assume so. Because you know, as I mentioned, you know, if I look at the data today, our BT outs in Q4 have marginally increased, and that is also probably a function of the high increased portfolio. Otherwise, in terms of the percentages, it is almost static, which normally in Q4 witnesses a spike because of increased competition and everything. But it has almost INR 380 crore, has been just INR 400 crore for us. So that has not INR 370, INR 380. There's a very marginal increase only. I would therefore assume that that would be there. Because we went across, sought the consent from the customers, and we passed on the entire benefit. Now the customers have got the benefit. They have already, we have demonstrated that they will not be negatively impacted. I guess this should be probably the peak. Understood. That's why we have also considered only INR 7,000 crore for FY 2027, as against approximately INR 6,600 crore for FY 2026. Understood. I mean, that's great. Just a follow-up to this is, now if there is a rate hike cycle, what lag will we have in our spreads? See, actually, you know, today almost 85% plus is on quarterly reset. In terms of our liability side, about 62%, which is the bank related loans, is linked to repo rate. If there is a repo rate increase on the liability side, about 62% of the book will witness an increase immediately or in the coming month. Whereas on the asset side, since 85% is quarterly, that will be about maximum one quarter delay might be there. Understood. Perfect. Thank you so much. Yeah. The next question is from Nipun Kinkar. Nipun, please unmute yourself. I'm unmuting you here. Hi, am I audible? Yes. Please go ahead. Yeah. Sir, how satisfied are you with just under 5% growth in our housing loan book this fiscal? See, actually, you know, it was a conscious effort to have a increase in our, you know, non-housing. To some extent it was also because we had to focus more on LAP, particularly in Karnataka, where, you know, in Q1, Q2, and almost Q3 also to some extent, we had an impact of our e-Khata issues, where, for fresh sanctions there were issues in getting the registration or the sale deeds and all. There was a compulsory, you know, requirement also where, you know, in one of the most important markets for us, we had to focus more on LAP. That is why if you see our LAP also has gone up by almost two percentage points in this financial year. Having said that, you know, going forward, I think we will be focusing, you know, we have almost reached the limit that we had set for ourselves in terms of our housing, non-housing. I guess we will see a higher increase in this current financial year. Okay. Okay, sir. Wishing you all the best, sir. I had nothing more to ask. Thank you. Yeah. Thank you. Nidhesh? Yeah. Next question is from Praveen Kumar. Praveen, please unmute yourself. I'm unmuting you from here. Praveen, you can unmute yourself. Hello. Am I audible? Yes, Praveen. Please. Yes. Yes. Hi. Thanks for the opportunity. I had a couple of questions. The first one was on the disbursement target and the loan growth target. If I do the math correctly, then, you know, excluding Q1, Q2, Q3, Q4, you'll need to have around INR 3,400 crore kind of a disbursement that you need to do, right? Under run rate. Given that, you know, you have your branch growth has been only to the order of around 6%-7% annualized in the last couple of years. Could you throw some light on how do you plan to, you know, achieve this higher scale of disbursements? A related question is that, in terms of AUM growth, in the previous couple of quarters, for FY 2027, you were indicating 15%, but I think in your opening commentary, you indicated a 14% AUM growth. Yes. Is that a tacit recognition that the BT out and the prepayments are actually much higher than you predicted, and that's here to stay? Yeah, that's my first question. Thank you. Sure, yeah. First, I'll handle the disbursement aspect of it. See, actually, you know, the year 2023, 2024 and 2024, 2025 also, from then onwards, we've been consistently opening branches. We've opened 54 branches. The first and the second year, we had almost most of the branches being opened in Q4 or mostly in the one month of March. We couldn't get the benefit of the branch expansion. Whereas last year, we entirely opened all the branches, 15 branches in the first half itself. We were able to get the advantage. What has happened is, in terms of the disbursement growth, we have had two factors which have impacted or supported us in our growth. Okay, sorry, I'll come to the branches. As against the last year, where in FY 2025, the new branches which are opened in 2023, 2024 and 2024, 2025, contributed only about INR 128 crore. The last year, because of a change in strategy also, and also because, you know, we could get the full year benefit of the 2024, 2025 branches also. Last year, the new branches have contributed INR 863 crore. The new branch strategy that we have done has really helped in the last financial year. Going forward also this year, we are looking at 28 branches to be opened, which again, we would be opening in the first half of the year. That also should bring in, plus this 54 branches that we opened. We'll also have some more efficiency improvements because not all of them have reached their break-even points. There also we are expecting. This new branch expansion that is there is going to be one key factor pushing or helping us in our growth. The second thing is the sales team that we had. Last year in FY 2025, we had only about 30-35 people in the sales team, and they contributed about INR 183 crore in the full year. Last year, post-June, that is from July 1, we increased the team strength and the whole of this FY 2026, they, the team of about 80-90 people has contributed around INR 868 crore. Both these parameters, that is the sales team as well as the branch expansion, is what we are looking at for bringing the growth. Sales team this year, we are looking at increasing it from about 80, 90 to about 150 people. Which means another 60-odd people we are planning to add to the sales team. As I mentioned, 26 branches, 28 branches are also planned to be opened in the first half of this year. Majorly it is these two aspects which will help. The third, of course, aspect is, as I had mentioned earlier, that Karnataka, which had a first half, you know, slightly negative or whatever because of the e-Khata, is now almost kind of getting resolved. We are looking at a much higher positive coming in from both Karnataka as well as Telangana, which had some impact on disbursements during the current year. Basically, these are the three parameters why I feel where it gives us the confidence. The second, as you rightly pointed out, yes, we have to acknowledge that we have had a slightly higher prepayments, and so therefore we have slightly marginally looked at it. But as I said, we have come, taken the step for conversion, and if therefore, we are able to slightly manage our prepayments, this could go up. But in a nutshell, I would say the calculation is that INR 13,000 crore disbursement is what we are planning. We have projected for INR 37,000 crore prepayments, BT outs and closures. If that is reduced, obviously the portfolio can even be 15%. K nowing the current situation, at least we have factored in INR 7 thousand because, you know, unlike last year where we had projected less but it slightly was elevated, we don't want to, you know, give a higher figure and then fall short of it. Understood. Thanks for the response. My second question was again on the roadmap, geographical roadmap that you have presented this time. I noticed that, you know, the proportion of the southern states is marginally increasing in FY 2028 compared to the FY 2026 levels. Again, does it again imply that Karnataka and Telangana are expected to continue to drive a higher rate of growth and hence the south proportion is marginally increasing? No, two things. One, of course, we had these issues in Telangana and Karnataka, which now are getting resolved, so obviously their contribution, this INR 290 crore or INR 250 crore, which was the run rate, will go up in Karnataka. Same way if you look at it, our run rate in Telangana will also go up. Therefore, the contribution from these two states, which was actually slightly subdued, will start to show. The second thing is that, you know, now that the situation in both these states is coming under, you know, has kind of stabilized. In the last three years we have not opened a single branch in either Karnataka or in Telangana, which now slowly we will look at a couple of branches here and there. So that is basically the thing. I think we are targeting three branches in Karnataka and about two branches in Telangana this year, out of the 28. Those also we have factored in, so maybe it will be a marginal increase. Not to mention that we are looking at a slowdown in any of the other markets. Our other markets continue to perform strong. In fact our North zone, West zone as, and you know, East including, which is mainly Andhra Pradesh, have almost done a 40% plus kind of growth in this year in terms of disbursement. Tamil Nadu, which has been already, was a well high-performing even the two years back, continues to grow at around close to 30%. It's just that these two states will also start now inching up in terms of the disbursement. Therefore, we have, that is, what it is planned. Understood. My last question was on the DSA proportion. See, in FY 2026, your DSA proportion of sourcing is somewhat similar to the previous year, few decimal points here and there, right? However, in your P&L, when I saw the fees and commission expense, that's in FY 2026 seems to have come down drastically compared to FY 2025 levels. Could you throw some light on that? No, actually it is only an impact of the amortization, and it has impacted both in the income as well as on the expense side. On the expense side, because of the amortization, it is reduced. Also on the income side, because it is there. It is nothing to do with that, the absolute, you know, outflow or cash outflow of the DSA expenses has not gone down. It is just the amortization impact which is there in this year. For which I think there is a note also which we have put in our Q1, because we changed that in our Q1. In Q1 also we have put that note, and in Q4 also we have put that note. It is impacting both sides, so on a net-net impact in terms of our entire P&L, there's only INR 5 crore difference, net of both. Otherwise it's as it's an amortization impact, not otherwise. Thank you. The next question is from Shubhranshu Mishra. Shubhranshu, unmuting yourself. You can unmute yourself and ask your question. Hi, Suresh. Good afternoon. Thanks for the opportunity. Yeah, good afternoon. If you can take me through the budgeting per state for the disbursements. How much are we expecting in these large states that we have, which is Karnataka, Telangana, Tamil Nadu, and Andhra? Also if you can talk about North and West as well in terms of what we have budgeted for in FY 2027. Second is how do we look at the OpEx growth, especially the employee and the non-employee, if you can split it into two parts. The third is about the credit costs. We have some amount of management overlays, so if you can speak about that. Fourth is more macro, if you can speak about, you know, we're seeing a lot of disturbances because of West Asia crisis. Any kind of delinquencies we are seeing in our LAP book, any or anything we want to provide for just as to increase our management overlay or any kind of policy support that we are seeing in CLSS to additionally or demand and supply of an affordable housing. It'll be great. Thanks. Sure, sure. I'll first start the disbursement targeting. See, I will be able to immediately share with you roughly the run rate that we are doing in each of the zones or the states. Growth next year, we are almost targeting an almost similar 25% growth across all the zones because, you know, that is what it is. You can have the numbers. The exact breakup I think I don't have right now. Roughly, if you look at the current run rate that we are doing, we are doing about INR 275 crore per month in Karnataka. North zone and West zone both are doing about INR 150-INR 160 crore each. West zone includes, you know, Rajasthan, Maharashtra, Gujarat and MP. North zone covers Punjab, Haryana, Delhi NCR, UP and Himachal, Uttarakhand. These two are doing about INR 150 crore-INR 160 crore per month. Tamil Nadu does about INR 180 crore-INR 200 crore per month. That is the contribution. Telangana now is almost doing INR 110 crore-INR 120 crore per month. East zone, which is mainly Andhra Pradesh and other states of Chhattisgarh, Odisha, Bihar and West Bengal is doing about close to INR 100 crore a month. That's the current run rate. Next year we are projecting almost a uniform 25% kind of a growth. Marginal would be somewhere where expansion is a little higher. It could be going up to some extent that way. This is the present breakup that we are having. In terms of our OpEx, I think I'll just give you this one. In terms of the credit cost, in fact, management overlay, I don't think we will be adding any more management overlay in terms of, you know, in the sense of a management overlay per se. Yes, we have slightly, you know, you would have seen that our PCR has slightly gone up from 49% to 56% this year. That is a little more conservative in terms of our valuations and all those things we have taken. Otherwise, in terms of management overlay per se, we will not be adding anything over that. Credit cost per se, as I mentioned, we are having a 10 basis points credit cost in this financial year, which includes the higher, you know, PCR that has been there. Otherwise, next year we don't expect any major increase. While we are projecting for 15 basis points, I am quite confident it'll be, you know, well below that only. As regards our CLSS and PF under the PMAY, the PMAY 2.0, there in fact now, some traction is slightly happening. In fact, NHB is also making attempts to tie up with state governments to come up with some construction and providing support. There are some states particularly, you know, last quarter there was a meeting with the UP and then now with Odisha. The NHB is also trying to, you know, tie up and provide that support so that, you know, there is more supply coming into the CLSS or the PMAY funding and all. We are hoping that, you know, slight impact will be there, but it's not a very major kind of a number that we are talking about. In fact, it's been almost six months that we have done, September to now. In six months, it's just been about INR 100,000 crore. Only 1 lakh numbers that have been happened in terms of the PMAY numbers across all the HFCs, all the NBFCs who are claiming and whoever is registered with the primary lending institutions at HUDCO and NHB. It's not a very great number that we have, but yes, some traction or some improvement is there. Hopefully the states other than the, you know, couple of states who are doing it can also start chipping in, it might go up a little bit. We are not very positive or gung-ho in that the numbers will jump up in a very drastic manner in terms of our PMAY contribution. As regards the geopolitical impact and all those things, currently there is no impact. We are not witnessing anything in our either NPA bounce rates or in our delinquency or any customers talking about it so far. It's been just two months, but even April we have not witnessed that kind of pressure. That's the situation. I hope I've covered all the points. Just one last question. Yeah, one last question, if I can squeeze in. In terms of prepayment, if we get 100 applications, how many applications are to foreclose or do a part payment versus how many are actually going out to a competition? What is this percentage which really goes out to the competition as a percentage of if there are 100 applications for prepayment? Uh, that's- Who are these co-competitors, basically? Okay, I'll give you my Q4 numbers, so that should give you some idea. Out of INR 1,730 crore, which is the BT out, prepayment, part prepayment, amortization and everything, you know, INR 400 crore is the BT out. Okay? That is INR 400 crore. There are customers who have closed their loans, which either because they have sold the property or they have made other closures because it's some other thing, but purely from their own funds, that is something around INR 350 crore, INR 360 crore. Okay? Then there are about INR 970 crore odd, which includes part prepayment and amortization. That is the principal component of the EMI and part prepayments. This is the breakup. INR 400 crore is BT out, INR 360 crore is where customers have closed their loans from their own funds or they have sold the property and then taken another loan or moved to another property and stuff like that, or properties which have got closed because of a servicer action. Third, approximately INR 970 crore is part prepayment and amortization. That's the kind of number you can say. I would say, you know, out of 1,800, 400, so that's not, that's about 25% of the loans probably are, so one in four is where it is coming for a BT out. The key players who are doing the BT out is, you know, LIC Housing and Bajaj. These are the two major ones. Of course, region specific, there are some, you know, local banks and stuff also doing it. Majority of the branches will have LIC as the first competitor, and the second would be Bajaj. Understood. This was very helpful, Suresh. Thank you so much. The next question is from Henry Pushottam. Please unmute yourself and ask your question. Hi, can you hear me? Yes. Yeah, yeah. Please go ahead. First of all, congratulations for a very sound set of results. I also wanted to appreciate, I've been a shareholder for a long period of time. There has been a remarkable degree of consistency in the professionalism and the transparency with which you communicate with us. Thank you. We really appreciate it. Okay. Now my question was Thank you. My question was a follow-up from what previous people had asked. You had indicated that in terms of a lag percentage, the increase in 2% is now you're quite happy with the risk profitability equilibrium, so to speak, right? I'm also assuming that you might be doing the same thing with your target groups. It means there are some which are more profitable but a little riskier, and that, in a sense, you know, cup you have already drank from. If that is true, are there any significant levers for you to improve your profitability in the next 12 months or so, given the fact that there is an understandable increase in your IT expense to the extent of INR 40 crore or whatever you have mentioned? How do you look at improving profitability and how should we look at it? Should we think in terms of your ability to improve profitability or should we assume that your profitability will be roughly at levels that you currently have? First of all, you know, thank you for appreciating our efforts and our performance. In terms of our, you know, portfolio mix and our yield and everything, currently after having passed on entire benefit today, our entire portfolio yield is around 9.8%. Actually it's 9.84%, or maybe there are some portfolio which we have not considered for the NPAs and all those things, so that's why we have given a conservative 9.80%. Our incremental yield is also 9.80%+ because, you know, that's the breakup post our change in our mix from housing to a little bit of non-housing, LAP increased and all those things. It has also increased slightly from our self-employed segment, which has happened from our salaried, which has come down from about 89% to now close to around 84%, 83%. That impact we have—what we have seen—that is ensured that our incremental yield is also around 9.8%+. Therefore, in terms of our current yield and everything, we should be able to maintain even if we don't change our mix. Having said that, as our roadmap 2028 shows, there is a scope for slightly increasing our non-housing as well as our SENP category. Which would slightly give us a little slightly higher or a little improved yield if we work on that a little more. That is one thing. The second thing is in terms of our cost. We have given that our present borrowing cost is at 6.99% to start with as on April 1. However, on the liability side, there is some small book which is of NHB where we are yet to get benefit of the rate cut because as and when that particular tranche of NHB comes for a rate revision which is on annual reset, at that time they're given the PLR impact to us. There is still some component of NHB portfolio which, not a very large one, but where some portion is there where we are yet to receive that. Probably our cost might slightly come down. Plus the fact that, you know, Q1 we have already, you know, got sanctions on hand which where the highest cost from banks is at 7%. So we are already getting something which will be lower than 7%, which is what we will be raising the funds from banks in the coming quarters. You know, currently, you know, the CP rates also compared to Q4 have come down. So if there's opportunity we may raise some little bit because already our CP rates are, and CP proportion has almost come down to below 3%, which used to be at a point in time 6%, 8% and so on. Therefore, we have some scope on the liability side to slightly reduce further and on the asset side to slightly improve if we continue with a little increased SENP and a little more in higher percentage of non-housing portfolio. These are the two things in terms of the mix. I guess that's what it is. In terms of the cost, as I mentioned, yes, there is a little extra cost that will come, but the other area that we have seen is last year we have you would have noticed that, you know, our bad debt recovery has also increased slightly. There is some scope probably we will be able to do some recovery and keep the credit costs also lower. Although we have projected 15 basis points, it will be definitely below that, so that should help. I'm just wondering whether you have two additional maybe small levers of profitability. One is the revenue kick from the increased positivity of Telangana and Karnataka, and the second is the decreased cost of sourcing through increased digitization. If you- Correct. Would these be significant contributors or do you think these are marginal contributors? No, there will be. They will definitely contribute. In fact, as I had mentioned earlier, the LOS LMS, once it is introduced, we'll be able to bring in a lot of efficiency in terms of our delivery and we are also increasing the percentage of our business coming through our direct sourcing, through our own sales team. That will obviously help us a little in managing our or reducing our DSA costs. Those are. This will not be adding too much. Maybe a few basis points, definitely yes, but maybe that would be what it is. The true impact of our IT transformation probably we will be able to, you know, gauge and come back in FY 2028 more than in FY 2027. Thank you very much, and once again appreciate your team hugely. Thank you. Thank you. Thanks. Of course. The next question is from Pawan Kumar. Pawan, I am unmuting you. Please unmute yourself and ask your question. Pawan, please unmute yourself. Yeah. Can you hear me? Yes, yes. Okay. I just wanted to understand the cost structure, especially in terms of two things. One is the employee cost, which has gone up significantly this particular year. What is our expectations going forward? Secondly, Suresh did mention that INR 40 crore incremental expenses will come in next year. For the year it is INR 40 crore extra on IT infrastructure, is it? I just wanted to clarify. Can you just clarify? Yeah. Is it INR 40 crore for the entire year or how much? Yeah. The 40 crore is for the entire year because currently, you know, the entire IT project has a total outlay of INR 300 crore, which 100 crore was CapEx, 200 crore was OpEx spread over five years. The depreciation now will kick in mainly from this financial year, that is FY 2027. The depreciation component of the CapEx and the OpEx which will be there, the total cost in one financial year will be about INR 60 crore. Whereas currently we are paying about INR 20 crore total cost for our IT in a financial year. The net impact will be INR 40 crore for the full year. Okay. In terms of our Full year The full year OpEx is about INR 311 crore, of which INR 177 crore is for the employee cost, and the other cost- Okay. is about INR 134 crore. The employee cost will probably go up by about, you know, 10%, 12% because we are also adding staff, and there will be some increments and all. The other cost, which is 134 crore, will probably go up to about 175 to 180 crores. Okay. The IT this INR 40 crore incremental, does it also include the amortization of INR 100 crore CapEx that we have done or that is a- Yes, yes. That is included. As I said, the INR 100 crore is a CapEx, the depreciation will also start. I said that's what the depreciation of the CapEx plus the OpEx will be about INR 60 crore and net INR 40 crore. This INR 100 crores CapEx has already been done or it will be completed in the next six months. How does that work? It is part of CWIP, capital work in progress. We'll capitalize once the No, but has the entire INR 100 crore. This CapEx, INR 90 crore have been spent. almost the entire component has already been taken into the Taken. Yeah. Okay. Okay, thank you. The next question is from Abhijit Tibrewal. Abhijit, please unmute yourself. Yeah, I'm unmuting. Yeah, okay. Yeah, Abhijit, I think we are not able to hear. Abhijit, yeah. Abhijit, please unmute yourself and ask your question. Yeah. Am I audible now? Yes. Yes. Yeah, Abhijit. Hi, sir. Thank you for the good questioning. I mean, in the fourth quarter we have seen a good momentum in terms of disbursements for us, but in the fourth quarter we have seen good momentum. Sorry, your voice is very muffled, Abhijit. We are not able to hear you. Just give me one minute. Sorry, two. Sir, is it better now? Yeah, this is better. Much better. Please go ahead. What I want to understand is, this fourth quarter, we have seen very good momentum in disbursements, for us as well as a few other players who might report and ones who've already reported. Fourth quarter, after maybe a lull in the first half, third quarter we saw things picking up, and then fourth quarter, things really picked up when it comes to housing. You think this was just seasonality led or are there, I mean, real structural triggers at play which is, are leading to a good demand? Because, sir, when we hear, analysts who are tracking real estate, experts who are tracking real estate, they're all talking about the strong upcycle that we saw in real estate and housing kind of seems to be tapering off now. I don't know whether this is just applicable to higher ticket size loans or the same comment can be applied equally to affordable housing as well. That was the first question that I had, that what is the outlook on demand? One thing is, we guide for a certain disbursement, certain sanction number, right? Underlying that, is the demand also very strong, which will help us do that? Or do you think that the demand is weakening? If we have to get to maybe the INR 13,000 crore disbursement number that you spoke about earlier, that will require market share gains. That is the first question I had. The second question I had, sir, was around margins. Like you mentioned, almost 85% of our customers are now on quarterly reset effective April 1st. I remember you also spoke about a small tranche from NHB, which is expected to get repriced sometime later this year. A combination of both these things, on one side you have customers getting repriced because they are now on quarterly reset. At the same time, there are, I would say small little pockets on the liability side which can also get repriced. Combined together, what could be the outlook on spreads and margins? Lastly, sir, just wanted to understand, given that you have a good presence in Bangalore, which is the IT hub, do we have customers who have got impacted by layoffs in the IT sector? Or are those predominantly customers who are catered to by the banks too? Those three questions. Sure. So first thing about the disbursement, yes, to some extent it is a seasonality because normally, you know, across the year we have seen that it's a 45%, 55% breakup H1, H2. Roughly H1 is a little lower than H2, definitely. As in Q3 and Q4, once the, you know, festive season starts, the demand picks up and the business also picks up. That is mainly the seasonality part of it. Having said that, you know, we don't see any major impact in our demand side because across our branches we are seeing a good amount of inquiries coming in still. Even normally now, you know, post-March there is a slowdown in people generally, but that is also, we are seeing that, you know, there is a good amount of demand there. Good inquiries are coming in and we are not seeing that much of an issue in terms of the at least the segment that we cater to. Probably, yes, there is a definite slowdown in the affordable segment, and that is also reflected in the numbers because, you know, if you look at affordable, if you look at mid-segment and look at prime, yes, affordable definitely is now in the mid single digit numbers that growth that we are talking about. So definitely affordable is impacted in terms of demand. Yeah, in the segment that we are catering to, I think we at least are not seeing any major change or a slowdown or anything in the, in terms of the demand. As regards the margins. See, what has happened is this entire 45% or 48% of the loans that we had, which were at, you know, annual reset, we sent across communication to them and we got in touch with them. And, basically, the remaining 15% are those customers who either have opted not to shift to quarterly reset or who have right now not, you know, taken a call. So the shift now further from here to the, you know, quarterly reset probably will be a little slow because these are customers who opted for this thing. Only thing would be in case of a rate going up, yes, this 15% will have an impact where, you know, there will be a lag effect in terms of the assets getting repriced. On the liability side, I said currently assuming that this 15% does not move to quarterly reset and remains same, you know, we have taken into consideration the entire impact of the reset as well as the 15 basis points that we passed on in January. Therefore, no further, you know, reduction is expected on the asset side in terms of the yield. As I said, our incremental yield is also a little higher than 9.8. Therefore, you know, even that is not going likely to eat into our overall yield on the book. Therefore, you know, whatever we are expecting a reduction in our NHB refinance rates or whatever we are able to get in terms of better pricing from a bank term loans, or repricing of our or being able to raise the CP at a lower rate, that will help us actually reducing our cost further, which should actually help us in improving our spread. The only flip side will be if the rates start going up, then this 15% is where we will slightly get impacted. Okay. That's as regards margin. We are quite confident that the 2.8% is which is there is kind of there. We don't have a problem in that. We do conservatively talk about 2.75%. Okay? As regards IT impact, our IT impact has been very, very less. In fact, our delinquency ratio in Karnataka is the lowest among all our six zones, and we've not seen that impact. In fact, our absolute value of NPA in Karnataka in FY March 2026 is lower than our absolute value of NPA in Karnataka in March 2025. I think that should give you the confidence that we've not had the impact of the IT job losses and everything in this. I guess that's what. Anyway, our IT salaried segment coming from IT segment is only about 6% of our book. It's not very high. Got it, sir. Just one follow-up, where you mentioned, right, margins or spreads for that matter, where you said spreads can be maintained at 2.8%. Right you've conservatively Right Guided for 2.75%. Sir, when we look at the entire business model, the only risk that is left then is basically a rate upcycle, where the rates start going up. This 15% who have still not opted for the quarterly reset, they are the ones you think are the only risk today? I guess in terms of the spread component, yes. You know, therefore, I mean, we don't see any change in that because our current incremental spread also will not eat into our overall spread. Got it. Sir, lastly, cost of borrowings. While you spoke about NHB, but when we are speaking to other NBFCs, other HFCs, all of them are acknowledging and while we don't borrow too much from the debt markets, but debt market borrowings had gone up significantly, especially in the month of March, and they have subsequently cooled off a little bit in the month of April. You think that the cost of borrowing bottoming out has now come to an end, and from here cost of borrowings either remain stable or inch up? Or do you think there is some more leg, some room left, you know, except this NHB borrowing that you spoke about where cost could further come down, remain sideways, or inch up from here? See, today, if you were to see our presentation, from 55%, which was our bank borrowing, it has gone up to 62%. Okay. Basically, you know, we have relied more on bank borrowings, where we have got rates at below 7%-7%. We raised that funding rather than depend or go to the debt market. Okay. Right. That is the one point. Second thing is in Q4, some of them, I'm sure you know, the rates are very much there for everybody to see. The debt market rates, even CPs actually had gone up considerably post the you know, the shift in the geopolitical situation and all those things. We had, if you recollect, indicated that we were sitting on INR 1,000 crore of unutilized NHB sanction at the end of- Yes, sir. Q3. That was also because we had total 1,500 we had planned, wherein we could draw INR 2,000 crore in the Q4, when normally the rates, because of a tighter liquidity, are on the higher side. We had, you know, planned our liability side accordingly. Therefore, we were obviously benefited, which is there. Going forward, other than this NHP, I mean, the only thing would be that we have about today our NCDs are at the highest, you know, cost of funds for us, which is on a blended outstanding portfolio of NCDs is around 7.67% or Mm-hmm 7.67%. In fact, if we are able to, as and when the maturity happens, we'll be able to replace them with a lower cost NCD, because today the rates are at a lower lower than the 7.67%. That is one thing. Plus, as I mentioned, CPs in Q4 had gone up, 90-day CP had gone up to almost 7% and a little above, 7.35 also. Mm-hmm. Whereas now today you are, we raised in the month of April, we raised a CP, a fresh CP at 6.35%. These are some of the timing differences where, you know, if we have to be careful and see if we can draw at the right time, we will use those opportunities. Got it, sir. This is useful. Thank you very much, and I wish you and your team the very best. Thank you. Yeah. There is a follow-up question from Henry Pushottam. Henry, do you have a follow-up question? If you have, please ask your question. Can you hear me? Yes. Please go ahead. Yeah. Just, you mentioned that your prepayments you are largely using out to LIC Housing Finance and to Bajaj Finance, right? Correct. Now, LIC Housing, I can understand that they will be basically luring customers by virtue of price. I was a little surprised to hear that about Bajaj Finance. I thought their plank would be mostly convenience and ease and quickness of for this thing. Since a person has already been sanctioned a loan by you, that cannot be an advantage for Bajaj Finance. Can you just throw some light- Yeah on competitive behavior and why do you think they are behaving in the fashion that they want? No, you're absolutely right. LIC, because they offer a lower rate, in fact they were also offering 7.15% at a point in time for new business, and that is one thing. In case of Bajaj, what happens is it's normally a takeover plus top-up, and many times we are not able to match the kind of top-up that they are able to offer. That is some area where we lose sometimes to Bajaj. That is one aggressive, you know, they. I mean, I wouldn't want to, you know, get into that. Yeah, sometimes we are not able to match that top-up. It's usually a, you know, BT plus top-up where they are able to offer the same rate on a takeover probably, but on the top-up they are able to give a much higher amount. Any thinking on how to counteract that, or you're saying that we'll just live with that? No, I guess, you know, we are a little more conservative in our LTV values when it comes to takeover or top-up loans and all those things. I guess, you know, it has helped us in the past and we would like to maintain that conservative approach. Sometimes, yes, it hurts, but I think the conservatism has helped. Thank you. Thank you very much, Sir. Thank you. As there are no further questions from the participant, I now hand over the conference to Mr. Suresh Iyer and the team for his closing comment. Sure. Thank you, Nidhesh, and thank you, once again, to all of you for joining this earnings call of Can Fin Homes for Q4 FY 2026. I hope we have been able to answer all the queries. In fact, one of the queries we couldn't answer then, but it subsequently came up, and I guess we've been able to answer that also. On the cost breakup. If there are any further queries, of course, you can please feel free to get in touch with us. Once again, thank you very much. On behalf of Can Fin Homes Limited, we conclude this conference. Thank you for joining us, and you may, disconnect your lines now. Thank you. Thank you.