Ladies and gentlemen, good day, and welcome to the earnings call of Equitas Small Finance Bank Limited's financial performance FY 2023. we have with us today Mr. P.N. Vasudevan, MD and CEO, Mr. Murali Vaidyanathan, Senior President and Country Head, Branch Banking Liabilities, Product and Wealth, Mr. Rohit Phadke, Senior President and Head, Assets, Mr. Natarajan M., President and Head, Treasury, Mr. Dheeraj Mohan, Head, Strategy, Mr. Rahul Rajagopalan, DVP Strategy and IR, and Ms. Srimathy Raghunathan, CFO, Equitas Holdings Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone telephone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. P.N. Vasudevan. Thank you, and over to you, sir. Thank you. Good afternoon to all of you. Hope you all had a great Diwali. There are many macro environmental headwinds in the system. While the India growth story has remained resilient so far, we need to see how long our domestic consumption factor of our economy is going to help us go against the global recessionary trends. Banking industry's credit growth is almost double of the deposit growth in the last few months. There's hardly any bank reporting a single-digit credit growth rate. This is putting pressure on liquidity, and we already see interest rates in the deposit market harden over the last couple of months. The credit demand story is quite similar in the informal economy, which is where Equitas largely operates. Be it Commercial Vehicle Finance, Small Business Loans, or Affordable Housing Finance, we see demand remaining very strong in all these areas. Against this backdrop, we have seen a 20% year-on-year growth in advances. The growth is, even across all our product lines. On asset quality, we continue to see improvement, and our restructured loan behavior has stabilized. The credit cost has normalized to almost INR 75 crore quarterly run rate in the second quarter, and we hope to maintain this for the rest of the year. If all goes to plan, we should contain our credit cost to 1.5% for the full year, as guided in the beginning of the year. On the PCR front, the bank has a stringent provision policy in place, which we had shared with you in an earlier presentation. Apart from our credit cost guidance, we had also guided that our loan growth would be about 30% for the year. While we have built a strong foundation in the bank in terms of a well-diversified loan portfolio to deliver a sustainable 30% annual growth, however, for the current year, we had a slow start, and we believe a 25% loan growth for this year looks more realistic now. The deposit growth has been in line with asset growth. The bank's liquidity position remains comfortable. However, the rise in incremental cost of funds is a concern, possibly for the next two-three quarters. Our retail deposit growth continues to strengthen, and as credit growth picks up, we will tap into bulk deposits and wholesale funding options as required. Murali and Natarajan will walk you through this in more detail. This year, we have been working tirelessly in upgrading our technology backbone for the asset businesses. As you know, we are very strong in digitally on our liabilities business. In fact, already nearly about 9% of our savings balances come from accounts which are sourced digitally. This year, our focus has been to try and improve our technology backbone for the asset business. Three loan origination systems are being worked upon, out of which one has gone live. These should help improve productivity and reduce disbursement turnaround times. Apart from this, we are also in the process of building a customer app for our borrowers to help improve their overall experience with the bank. Some of the other large technology interventions being planned are a state-of-the-art CRM platform, for which we have signed up with Microsoft, a future-ready super app structure to be built on native platform for mobile banking applications, and various other smaller projects to help us scale up digitally. On the amalgamation of the holding company of the bank, we are on track. Against the earlier estimate of completing this by the financial year-end, we may be able to complete it a couple of months earlier, and we will be happy to welcome shareholders of the holding company to the bank. To conclude, we have created a bank with a very well-diversified retail loan product mix, a strong granular liability franchise, putting the ability to put digital to work, and a high-quality management team. We believe that these are the foundation stones required for building a very strong, stable, sustainable, and scalable, differentiated banking franchise in the country and take us closer to our long-term vision of creating consistent returns for all our stakeholders. Thanking you once again, and now I am handing it over to Rohit. Thank you, Vasu, sir, and good evening, friends. The last quarter, advances grew by 20% year-on-year and 5% quarter-on-quarter. Disbursements grew by 22% year-on-year and 19% quarter-on-quarter. We see strong demand for credit across segments. Collection efficiency in every business has shown a marked improvement. X bucket collection efficiency was 99.3% in small business loans, 97% in vehicle finance, and 98.9% in microfinance. The 1-90 bucket has come down to 8.9% in September from 10.3% in June. In small business loans, our focus is on increasing the volume of non-Tamil Nadu business. A digital loan origination system has been piloted in five branches, and we intend to take this across the country in the coming months. Vehicle finance has shown strong growth, riding on the back of increased CV sales. Used car was a new product that we launched a year and a half back, and it is already clocking about INR 50 crore in disbursement month on month. We intend to scale up the volumes in used cars. The microfinance portfolio has shown strong recovery. The 1-90 DPD bucket has come down to 5.8% from 8.5% in June. The overdue book has come down from 13.2%- 10.9% in microfinance. Advances have de-grown in the microfinance book by 9% year-on-year, and we intend to grow the book this quarter. Affordable home loan disbursements have increased to about INR 100 crore a month, and the scale-up for this business is progressing as per plan. Last quarter has seen good growth across various retail segments. CVs have grown by 19% year-on-year across all categories, passenger vehicles by 10%, and even two-wheelers have grown by 9% year-on-year. The data from CIBIL shows a strong demand for credit in small business loans. As per the ICRA report, affordable housing finance has grown by 22% year-on-year. In microfinance, the gross loan portfolio has grown by 24% year-on-year to INR 293,000 crore. Overall, all segments are displaying a strong demand for credit, and we feel that this will continue in the coming quarters, which will help in achieving a 25% growth and annualized credit costs of 1.5%. Thank you. I'm handing over the mic to Murali. Thanks, Rohit. Good evening, friends. Just to continue where we left the last time, we were speaking about the segments, products, markets, and most importantly, our relationship management on the digital side. On the digital side, we were talking about acquisition and digitally enabled solutions, what we are doing. Let me give you some brief insights onto that. On the growth side, I think we are seeing a fundamental shift of three segments. Mass segment, which we acquire through digital, is growing their balances and booking a small retail TD, so which means there is a duration of customer enhanced at a mass level itself. Digital is actually helping us to cross-sell TD of smaller tickets, which earlier never used to happen. This is one fundamental shift, and it's good. Timing-wise, the rate-wise, it makes, I think, very attractive. Second proposition, what we do it through, you know, relationship management. We have virtual relationship managers as well as physical relationship managers at the branches. So virtual relationship management today has crossed 100,000 customers, and that portfolio is growing healthy, and we are seeing many of the customers are migrated up towards the program as well as relationship management team. And this plus relationship management team put together is showing us a growth of 25%-30% on the portfolio. And for the first time, Elite, our premium program today, crossed 20, close to 20,000 families, 40,000 customers, and INR 10,000 crore of book size. I think this is one of the very first, I think, in this space to have happened, and we are very proud of that. This shows our program proposition, relationship management, and the customer life cycle management, which we are doing. Our continuous, you know, focus on individual source savings account is one of the key thing. Today, we have close to 87%-88% of the savings account customers who are individuals. I think this is one secondary thing, which is actually priming up the product holding as well as product proposition towards better penetration at a family level. Extension of this is we have actually sourced close to 1,200 corporates, which means corporate segment as the one which we created some time back, is now getting in a enough pull factor. And all these three things actually help us to actually get the customer proposition and relationship management right. NR is another segment which is showing good growth. We should have grown 40%-50%, but the good part is, post the new scheme, which is announced by RBI, we could leverage that, and we could see the deposit mobilized through that, actually helping us. And we are now present in almost. We have customers from 20 different countries, is one good unique point. Now, on the digital side, earlier, we used to talk about number of accounts sourced. Today, thanks to our eKYC and end-to-end fulfillment team, which we have created, today, we have on a month-on-month sourcing, we could do at least 40% of the customer eKYC on the same month, and the book is inching up towards INR 1,000 crore, which is a very healthy sign for two reasons. One is the demography of the customers, what we get through B2C, our own product, and B2B2C through our fintech partners, both are showing that equal trajectory of demography, mass, coming in, and then second important part is product propositions getting sold. And last quarter, we did launch our three-in-one with HDFC Securities, which showed encouraging sign. And expansion into broking accounts has actually facilitated opening close to 50,000 accounts in this period. And importantly, all our new propositions, acceptance is good. Expansion of this, we have our prepaid running very good through our fintech partners, MicroATM, and as well as issuance business, which is showing an encouraging sign. Last but not the least are TPP penetration or insurance fee-based revenue and mutual fund fee-based revenue, again, is showing a good trajectory. This shows our customers are not only saving-centric, they expand the horizon towards investment, and they also are keen in trading. So I think this trajectory of cross-sell is really helping us. And with regard to fundamental shift, I think as we move on, we will have people getting into more and more RTD and BTD in coming days. And more on this subject, we'll take it later. Let me pass it on to Nat to give us some treasury views and market update. Yes, sir. Hi. Good evening, friends. Globally, the central banks are facing a deadlock between high inflation and low growth. In some cases, there are even threats of recession. Central banks have been hiking rates across the globe at each meeting to tame inflation, which is well above target level in respective countries. The upcoming FOMC, which is going to happen in a couple of days, the market is expecting another rate hike of 75 basis points to control inflation, taking the Fed fund rates to a new range of 3.75%-4%. And market is also edgy, looking for Fed guidance to further action. And nearer home, China is also having low growth, coupled with lockdown to contain renewed concern about COVID cases. So all it points out is on the commodity side, it has a repercussion. Commodity prices are under pressure, mainly on account of recession fears and lower demand. Russia and Ukraine war has rattled the global supply chain, so realignment of supply chain will take a while to meet global demand. So the outlook for global economy, as also mentioned, is somewhat bleak. Nearer home, domestic economy, India is likely to grow in the range of 6.7%-6.9% in the current fiscal, well below RBI growth projection of 7.2%. And our inflation print is at, the latest print is at 7.41% in September, again, well above RBI tolerance level of 6%. So while India has fared better in the relative sense, inflation continues to be sticky, which entails that RBI will be forced to hike rates. Banking system deposits grew by 9.6% year-on-year, and credit growth was up 17.9%. As also mentioned, it is almost double. So system liquidity is just about adequate on the back of high credit demand across sectors. GST collections have been robust. FX reserves, there is a depletion by close to INR 112 billion. The RBI has been pulling down from its war chest of INR 640 billion, mainly to control volatility in rupee. Rupee depreciation is an area of concern for India due to higher CAD and higher FI outflow, but that's how the global economy functions, and as long as we have sufficient reserves, which RBI assures us, it should be okay. In the upcoming MPC meeting, we do expect RBI to hike rates by another 25-35 basis points to counter inflation and the rupee depreciation. And coming to treasury performance for Equitas in Q2, it was another quarter of stable performance by treasury. We kept our yields inching up. We continued to keep the low duration in our investment portfolio so as to reduce the impact of adverse MTM. When yields spiked, we utilized the opportunity to add to HTM portfolio. The RBI has made some room available to fill for all banks, so we used that opportunity to fill HTM portfolio to some extent. Also, IPO markets provided some opportunities to augment our income during the quarter. On wholesale funding, we do have sufficient loan assets to generate liquidity by way of both refinance from term lending institutions as well as IBPC. With this, I'm through. Thank you, Natarajan. Good afternoon to everyone. Our net interest income came at INR 610 crore, as compared to INR 484 crore during the same quarter last year, registering a growth of 26% year-on-year. Other income came at INR 115 crore, as compared to INR 106 crore in the same quarter last year, growth of 8% year-on-year. Net income grew 23% year-on-year and came at INR 725 crore for the quarter, as compared to INR 590 crore during the same quarter last year. Coming to OpEx, the total operating expenditure came at INR 483 crore, as compared to INR 399 crore during the same quarter previous year. On a sequential basis, OpEx increased by 9%, adjusting for one-off in the previous quarter. This was largely driven by employee costs due to employee addition, increases related to business costs, like increased commission and brokerage, higher branding, and technical spends. Going forward, we expect our cost-to-income ratio should be in the range of 60%-63% in the medium term. Pre-provisioning operating profit, PPOP, came at INR 242 crore, as compared to INR 199 crore during the same quarter previous year, registering a growth of 22% year-on-year. PPOP, as a percentage of assets, expanded year-on-year to 3.33% from 3.14%. Profit after tax for the quarter came at INR 116 crore, as against INR 41 crore during the same period last year. Now moving on to asset quality, provisions, and restructuring. The outstanding restructure pool stands at INR 986 crore. Segment-wise, breakup of restructuring has been provided in the presentation. The bank carries a total provision of INR 611 crores, which includes NPA provision of INR 439 crores, provision on restructured standard assets of INR 95 crores, provision on standard assets of INR 68 crores, and additional provision on standard assets for INR 9 crores. GNPA, including IBPC sold, came at 3.82% FY 2023, as compared to 3.95% FY 2023, and 4.64% FY 2022. NNPA came at 1.93% FY 2023, as compared to 2.07% FY 2023, and 2.37% FY 2022. slippages for the quarter was at INR 314 crore, and slippages FY 2023 were relatively higher because we have stopped netting intra-month slippages and upgradations. On a like, like-to-like basis, the slippages FY 2023 would have been at INR 338 crore. Annualized credit costs at 1.62%, excluding the one-time impact is, it is at 1.35%. The provision coverage ratio stands at 50.49%. As of September 30, 2022, the total CARR is at 23.08%, where the Tier 1 at 22.55% and Tier 2 at 0.53%. With this, I would like to hand over the back to operator, and we'll be happy to take questions from your end. Thank you. Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their 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. We have our first question from the line of Shreepal Doshi from Equirus Securities. Please go ahead. Hello, sir. Thank you, and good evening. And thank you for giving me the opportunity. So my first question was with respect to the employee cost. So if you look at even after adjusting for the reversals that we had done during the last quarter, which was, I suppose, close to INR 30 crore, the growth on employee cost has been much higher on a sequential basis. I suppose we've hired 1,000 employees during the quarter. So wanted to understand that what functions have these employees been hired? And also, do we expect any moderation in the run rate on the employee cost? Yeah. Hi, Shreepal, Dheeraj here. So I take the second part first. So what we've envisaged for the year is, you know, to have the employee expense grow up, grow by about 18%. So we are currently at that run rate, in the first half. And as you know, large part of the employee expense gets incurred in the first half, because, one, there's wage revision, which happens in Q1 and Q2, and also a lot of people get added for meeting current year's targets. So we don't expect employee costs to grow the same speed in which it has grown in this current year, but maintain the current annualized growth rate of about 18% odd. Functions in which we have recruited, broadly, we have recruited across the board. Can you give the numbers? Yeah. Yeah, so just to give a breakdown of the 1,000 people. Yeah. So on the branch banking, or the franchise, which comes under Murali, it's about 280-odd people, and the remaining is largely spread across assets, and we'll have about 100-odd people in the support staff. Sales, collection. Yeah. No, they're largely sales, so they are again, front-end branch teams only, where we have recruited. So the breakup of the thousand, in a nutshell, is largely on the field side. It should start translating in disbursements. So if you see vehicle finance, for example, where we've added about 200-300 people, you'll start seeing disbursements pick up. Same with housing, which we have told, I think in the first quarter, you've seen some of those movements happening. And again, 200 odd people in the liability side. That's how the- Again, not on the collection side, broadly. No, collections is broadly what we did last year, so that team will remain stable and only replacement will happen there. The addition of 1,000 is not largely towards collection. Because collection pressure, as you've seen in the numbers, has started to come down, and we are now broadly close to normal. So, largely replacement is happening there. The second question was on the restructured book. So while that book has been coming off, I just wanted to understand from the, you know, 1,700 of 1,700 crore of restructured gross book that we originally had, now that has come down to close to INR 990 crore. So how much of that has been sort of, you know, written off, and what would be the standard restructured book now? What would be the, like, what would be the repayment that, that would have got closed, like, of these cases? Yeah. One second. So, the- Just give us one... This financial year, we've had a write-off about INR 163 crores. And last financial year... Just give us one second. Yes, so roughly it's about INR 250 crore is what we have done total write-off, and the remaining is run down. So 1,000 + 250, and the balance would run down on the book. Oh, all right, all right. So we already have INR 250 crore of NPA from the INR 990 crore of restructured book, which is outstanding. That is, yes. Okay. And any like color if you could give, how much more could slip to NPA from the standard restructured book that we have? And also one last question was that with respect to slippages that we have had during the quarter, what would be from the restructured pool, and what would be the nature of it, as in what book would it have come from? Roughly about INR 100 crore of gross slippages is from the restructured book. Okay, so from the INR 340, INR 314, INR 100 crore- Yes. is from the restructured book. Correct. Correct. How much are we likely to see, Rohit, sorry? No, so if you look at the restructured book, now, most of the book is, most of if you look at, you know, the current, last time also, we had said that, you know, actually we should not differentiate now between the restructured and the normal book, because most of it, most of the restructured book is behaving now like a normal book. So we don't see many much flows now into NPA. And that is the reason why we are saying that an analyzed credit cost of 1.5% is possible. Going forward, you know, you will find the credit cost coming down quarter after quarter. All right, sir. All right. Got it. Thank you so much. I'll come in with you for more questions. So thank you, and good luck for the next quarter. Thank you. We have our next question from the line of Renish from ICICI. Please go ahead. Yeah, hi. So just one question on the growth. Okay, so last quarter, we were guiding at 30%, and when we look at the disbursement growth of 19% sequentially, plus when we look at the employee addition of 1,000 people, of that around 800 is towards sales. And in our, in your opening remarks also, you did mention about the trade demand remaining strong at the ground level. So what is leading to cutting down growth aspiration for this year? I think we are. See, we've been, you know, in each business, we've been planning some fundamental changes in the sense of, you know, how we operate. For instance, in the small business loans, we want to see our volume outside Tamil Nadu grow. And, you know, we've been adding manpower and beefing our organization structures there. So we feel that, you know, if there is some delay in our execution, we need it to be, you know, we need more. We don't want to promise and not deliver that. So that is why we are saying that, you know, we will be comfortable with the 25% growth. Similarly, in vehicle finance, too, you know, we've gone across the country now. Vehicle finance, we started one year back, and we're now across the country, throughout. So there, you know, we are seeing better growth. Similarly, you know, we, we want to do that in small business loans, and small business loans is 38% of the book, a larger portfolio. That is what we expect, and that is why we are being conservative and giving you a 25% estimate. Okay, so maybe in some pockets we are calibrating the growth to realign the process or to make underwriting better. Is that the correct way to look at it? I think it, the way to look at it is, you know, in some pockets, we want to increase growth, and those pockets are outside Tamil Nadu, and we are building a structure to ensure that our non-Tamil Nadu volumes grow up. So I don't think we are calibrating volumes in any place, because, now, you know, I think the market is looking up, the credit demand is good, and cash flows with customers have also improved. So this is the time, I think, to really go gung-ho rather than, you know... A general cautiousness regarding credit appraisal stays, so we are not doing away with that. But that is, that is what it is. Got it. Got it. Thank you, Rohit. So my next question is to Murali. On the deposit side, if we look at the share of retail TD, you know, has sort of fell from peak of 80%- 68% now. And despite, you know, the system at large is still not, you know, quite aggressive on the deposit side. So when that aggression comes from the larger peers, how we gonna maintain the retail TD base and grow the balance sheets? See, in this growth of what you are seeing as INR 1 crore-INR 10 crores, see, ideally, it should have been INR 2 crore-INR 10 crore. That would have reduced the pie, okay? Up to INR 2 crore is retail and, What we have done in terms of present tweaking is, if you see the earlier part of a savings account, up to INR 2 crore, we used to pay 7% on savings account. So a person after crossing INR 2 crore will automatically move into TD. So there were a set of people who were holding up to INR 2 crore in savings account, and they continue to hold at this point of time. So this 23%, assume you move it towards INR 2 crore-INR 10 crore, it will look like more like 15%, 16%. So this is predominantly HNI segment, and as I said, where we have gone aggressive and opened investment account for three-in-one, we are getting those traders account also coming. So you will have a break on INR 2 crore-INR 5 crore savings account growing and RTD coming down to that proportion. But on a book level, as I said, 88%-89% of my size individual. Today on RTD, same 80%-85% is individuals as well as individual plus family and proprietorship plus individual. This is how the structure is built. So this categorization is done just to make you understand the bucket level. So if you carve out this INR 1- INR 10 crore, as INR 2- INR 10 crore as a bucket, you will actually have 67% + 5%, 72% plus another 10%, same 80% levels of retail people who are holding it. Now coming to your second question of when everybody is even, how are you going to grow it? We have a substantial amount of customers now at this point of time, unlike two years back. So the only option is cross-sell and enhance duration, and that work has started. And to complement that, we have relationship management structure at every possible end. Okay. Got it, got it. Okay. Thank you. Thank you. Thank you. We have our next question from the line of Savi Jain from 2Point2 Capital Advisors LLP. Please go ahead. Yeah, hi. Just on the cost side, you've given guidance of 18% on employee expenses. What is the guidance on the other expenses? Yeah. So, other expenses should be close to about 25% on... And on an overall OpEx net of digital, we should be between the range of 20%-23% for the year. So this cost to income guidance that I think one of your colleagues gave of 60%-63%, that is like, maybe— What do you mean by medium-term? Is that likely to be achieved in the year? Yeah, we should see this by in the year. So, if you have a cost to income of close to 63%, it would then translate to an OpEx of 20%-23%. So we should see that for the year. For the full year? Correct, correct. Okay. This employee addition, you know, there's an INR 20 crore QoQ increase in employee costs. Now, some of the 1,000 employees would have received only maybe half of the quarter's salary. So I don't understand how this should increase further, right? Next quarter. Yeah. So, no, the employee cost jump in the first two quarters would be largely because of, you know, incentives being paid out, and a large part is due to recruitment for the year. And so you'll have that wage revision also, which will happen. In the next two quarters, you will typically not see this run rate of employee cost growing. No, no, what I'm saying is that, just the 1,000 employees that you added in this quarter, they have, they would have received only on an average, half of the quarter's salary. And so, you know- Murali here, I understood the question. See, while they would have received half the salary, there are two things which we do. One is planning at the time of, you know, resignation. So there will be overlap of 40% of the employees who stay and handover also. So these are all portfolios need to be handed over, right? So there will be, at this point of time, put together, they would have consumed four months or five months of salary. It is not exactly six months. Assume you visualize a branch, there is a RM who has decided to put on his paper, then you recruit a person. This person has to hand over in the next 45 days. So technically, 45+ 45, which otherwise I would have paid only 45, 90 days happens. So this overlap is what is, you know, taken as partly to this drive. Balance like Dheeraj said, this is a quarter where we had all our incentives, statutory bonuses, and everything paid out. So there's a decline in employees next quarter because there's an overlap this quarter. Is that what you're saying? Yes, yes. And normally what happens, if you see attrition also peaks in this industry post the appraisal first quarter, because many people start shifting and then there is an overlap that happens. These are front-end roles. It is not like we have created top-heavy management or anything. What's the sir? Hold on, hold on, hold on, hold on. This is Vasu here. See, basically the employee cost in the first quarter will always shoot up because we give the increment in the first quarter for the full year. So always April salary will be higher than the March salary by approximately 10%, and that will remain kind of steady over the rest of the year. As far as these new employees who are recruited in the second quarter, so if you see the numbers of employees has gone up almost about 1,000 in the second quarter. You are right that they will obviously come for a full quarter salary in the third quarter, and to that extent, we should see an increase in the salary cost of the third quarter compared to the second quarter. But, how much will be that increase? Because it's 1,000 employees part salary increase on a base of about 18,000-19,000 employees. So it is not a significant change that you should be seeing. And there will be further recruitments in the third and fourth quarter also as we build for growth and build for the next year. Because third quarter, we'll still be building for growth for this year, and in the fourth quarter we'll be starting to add people for the next year. So there will be certain number of employee growth again coming. By and large, as Dheeraj explained, almost 90%-95% of the new recruitments are all at the field level. There'll be hardly, you know, 5% staff who are really recruited at the head office level in functions like risk or IT and other functions. So it's almost largely on sales. This year, the recruitments are almost largely on the sales, be it liability sales or asset sales. Collections, as Dheeraj mentioned, is kind of steady now, so the number of people getting added on collections is not going up much. So that's the picture. I think you should see more employees coming in, in the third and fourth quarter, and to that extent, yes, the employee cost should go up... But how much it will go up and all that? You know, it's not that it's going to go up. It should not go up very sharply because we are talking of a base already of 19,000 employees drawing certain level of salaries and an addition of maybe, you know, 500- 1,000 people. That will be the incremental change in cost that you should be seeing going forward. So I mean, what will basically happen is that, we while the growth guidance has come down, the OpEx guidance has gone up. So will we be able to achieve this 2% ROE, ROE exit, that we, we had earlier guided for? We have not been guiding on the ROE at all, so I don't think we will start guiding on that just now either. But yes, as a model, we have always been saying that Equitas model is something which should be geared for a 2% ROA. You know, assuming that there are no heavy you know headwinds from the market. And we did reach that position. I mean, during the demonetization, if you remember, 2017-2018, we did go down significantly because of demonetization's impact on microfinance. But once that effect started wearing out, then by the third quarter of 2019-2020, we were already over the 2% ROA level. December 2019, if you see, our ROA would be over 2%. But again, the corona came, and it has had a tail headwind effect on the portfolio of the bank. But with things settling down now, yes, as a model, definitely, I think that's what we are geared for. Mr. Jain? Yeah. Does that answer your question? Yeah. Thank you. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. We have our next question from the line of Jai Mundhra, from Batlivala & Karani Securities India Private Limited. Please go ahead. Yeah, hi, sir. Good afternoon, and thanks for the opportunity. Sir, if you can talk about the slippages change that has happened in the quarter on monthly netting off, because my understanding was that RBI has asked this change many quarters ago, and most of the banks would have already implemented. So, you know, what was done in this quarter, particularly on this slippages netting off? See, basically till last quarter, we were, whatever NPA comes up on a daily basis, they get recognized as NPA at the end of each day in the system. And then, during the month, if they get upgraded to standard, then at the end of the month, they were being netted off. The gross slippage and the upgrades were being netted off till last quarter because our system capability was not there. Now, that has been built up, and so from the second quarter, what we are doing is, when an account goes into NPA on a daily basis, within the month also, the gross slippage gets added up, and if they get upgraded during the month, the upgrades also get recognized. So if we had done it on the same basis as the first quarter, then against INR 296 crore of gross slippage in the first quarter, the equivalent number would have been around INR 235 crore or INR 236 crore for the second quarter. And in the second quarter, if you see the numbers we have put out now under the new method is INR 314 crore. But again, the upgrade also, you see there's a sharp uptick in the upgrade to INR 136 crore from about INR 51 crore, basically because those are upgrades which happened within that month itself. So your answer to your question is on a like-to-like basis, the slippage would have been around INR 235-INR 236 crore. Right. Understood, sir. No, and is there any more changes, sir, or you are now fully, you know, compliant on RBI daily NPA or, you know, this is, across all products and, you know, for overall bank, right? So no more changes on this front. Yeah. See, our daily NPA, there is no change at all. I mean, we went on a daily NPA recognition mode, I think more than three or four years back. Long time back, I'm not, I'm not able to recollect. Three, four years back, we had gone live on a daily NPA basis, so that went live long, long time back. This... And which means that, recognizing an NPA, upgrading an NPA and provisioning under the IRAC norms, all that, we went live on a daily basis, so quite some time back, three, four years back. This one is only the gross slippage, method of calculating gross slippage, which we have now upgraded through our system improvement on a daily basis. But as you know, this does not have any effect on provisions at all. Right. Right. Understood. And second question is, sir, on tying up between, you know, slippages and credit cost. So if I see slippages outside restructuring book, right, and if I remove INR 100 crore from this INR 300-odd crore of gross slippages, let's say INR 200 crore as a normalized slippages outside restructuring book, and against that, you are saying INR 75 crore of provisioning. I mean, both these number is that the right understanding? And how would you tie that up, that, you know, 200 on a growing book, maybe INR 200+, and then INR 75 crore of credit cost, Yeah. So the INR 75 crore of credit cost is, removing the INR 15 crore additionally we had to make in Q2 because of that RBI FAQ. So if that FAQ had not come out, we would not have to make that INR 15 crore additional provision. So the INR 75 includes the restructured provision, or, or the slippages, from the restructured and non-restructured book. Right. And you think that outside what, after this, one-off INR 15 crore, this is the you have already achieved, let's say, the steady state or the normalized level of credit cost? Correct. Yeah. Right. And what was this FAQ, sir? I went through that, but there was, if you can exactly say that, you know, what was this that changed the provisioning requirement? Yeah. It's written here. The FAQ, you know, had two impacts. One is that, the residual debt exposure has been defined to include borrower level, not at the loan level. And the second thing is that, you know, the additional or whatever the standards provision which you have been providing on run-down basis, it has to be kept at the original level. That's the two FAQ, you know, issued in August 2022. Sure. Understood. And the next question is to Murali, sir. So if I look at the cost of deposit, right? Now, there is a very small difference between the cost of SA and your cost of TD. Very small difference between the two. And there is a dip or is a very flattish SA balances in this quarter. So how should, you know, one look at the cost of SA and cost of TD from going ahead perspective? And do you think that, you know, this very minuscule difference between SA cost and TD cost, I mean, how would this play out? See, SA is a layered product. Correct. Let's take the inr 0-INR 1 lakh, that is INR 1 lakh-INR 1 lakh, you get inr 1 lakh-INR 5 lakh, you get 5%, and INR 5 lakh-INR 5 crore, you get 7%. Let's assume these are the buckets. In contrast to TD, what happens, every first rupee what you get in is blocked at the same contract rate. So how we used to manage cost of funds is, we will say: How do you expand the entry-level bucket that inr 0-INR 1 lakh from point A to point B? So this year, the important thing that has happened is the trajectory has moved inr 1 lakh-INR 5 lakh bucket, and INR 5 lakh-INR 2 crore bucket, is that, in that sequence only it has grown. Now, the differential INR 5 lakh-INR 2 crore bucket and TD is minimal, whereas in both the other buckets it is maximum. So that's why I said in my initial call itself, there will be a tendency for people to keep at inr 0-INR 1 lakh bucket, keeping only two months or 1.5 months' salary and parking, moving into our TD. So is the next bucket. So we are seeing, rather than seeing it as SA or TD at this point of time, are you locking a customer for a duration and penetrating more is more, you know, important opportunity than anything else. So as we go forward, inr 1 lakh-INR 5 lakh bucket is far more conducive because the temptation for the consumer as well as the bank to move into TD is high. And this will continue to play out this way, at least for next two, three quarters, since the interest rates are going up. At one point of time, I'm sure RTD will... See, for example, senior citizen is at 8% today, so there is no reason for that person to keep money at 5%, even if he has INR 5 lakhs. So I think these are the flexibilities and the arbitrage market, you know, offers to the consumer. And till the point of time you're growing consumer and getting consumer and enhancing the relationship value, it's all the same. It will have a cost of, fund, you know, impact maybe for the short term, but over a period of time, it evens out. Right. Any comment on the flattish SA balances this quarter? No, actually, people have moved it into RTD. One. Second thing, we have actually let go INR 500 crore worth of savings accounts, which were not LCR-friendly for us. So there is a specific regulation which we have internally based on our own appetite. And see, it is a very complicated equation. Individuals are different from institutions, are different from financial institutions, so we let go few of the savings accounts consciously. The INR 500 crore of SA, which were not LCR-friendly, we allowed it to let go. And with this, in the last meeting itself, we have discussed this. Finally, the money has to be deployed, right? It's not only for top line. So there are a set of customers where if you keep the money with you, 100% needs to be kept as a reserve ratio. So we exited those sort of relationship, and few of them has come back as BTD also, non-callable. So it made more CASA-friendly deposits for us. Right. And last question, sir, just- Mr. Murali, I request you to come back in the queue. Sure. Thank you. Thank you. Ladies and gentlemen, in order to ensure the management is able to answer all queries, kindly restrict your questions to two. We have our next question from the line of Ashlesh Sonje from Kotak Securities. Please go ahead. Hello. Hi, sir, I hope you can hear me. I'm sorry, we are not able to hear you. Hi, can you hear me now? Is this better? Little better. Please go ahead. Yeah. Sir, first question is on the restructured book. So if I look specifically at the vehicle finance book, about 6% of that book is still restructured. Of course, there is an improvement because 8% of that book was restructured as of last quarter. So how are you looking at the delinquency performance of this book now? And along with that, if you can give the 31-90 DPD book in the in your key segments, MFI, vehicle finance, and SBL. ... See, the breakup of the restructured is given in the presentation itself, right? Yeah, sorry, I meant non-restructured, non-NPA, 31-90 DPD, if you can give that as well. No, that data, I have overall. We don't share that segment. Okay, sure. Hold on. I can give you the overall book. Yeah, I think we have that in the presentation at about 3.2. That is the restructured book. I can give you the overall, overall book. Overall. 3.5 is our non-restructured 31-90 pool. Oh. That still is there? Yeah, yeah, that is there. Non-restructured. Yeah, non-restructured pool, 5, 7. Segment that we don't give. Yeah, so overall, if you want the overall OD book, in 1-30 bucket, we have 4.25%. In 31-60, we have 2.97%. In 60-90, 1.7%. In 1-90 DPD, 8.9%, and in 90+, we have 3.92%. This is the overall OD book. Okay. Sir, and the other question on the delinquency performance of- I'm sorry, we are not able to hear you. Yes, sir. The other question on the delinquency performance of your restructured vehicle finance book? Yeah. So to give you a flavor, you know, see, what is happening in the market is that you realize freight rates have gone up, market availability is there, and the operator is also able to pass on the increasing cost through higher freight rates because of the load availability. So because of this, you know, the cash flows of operators have increased. When we look at, you know, our loss on sale, we realize that in quarter four, it was 46%. In quarter one, it came down to 38%, and in the last quarter, it has further come down to 36%. And going forward, my expectation is that the loss on sale will come down to about 30%-35%. If you take into consideration that the cash flows are improving, markets are improving, as well as the resale prices of vehicles are improving, because of which the loss on sale is improving, the delinquencies in the Vehicle Finance book will improve. So the restructured book will not have such a great impact as it has had in the past. Okay. Thank you, sir. And just lastly, if you can qualitatively talk about the liability side, the deposit side, what is the... If you are seeing any pressures on deposits running off and any increased effort that needs to be put to acquire new deposits, given the increased competition in the market? Yeah, Murali here. I think there's no running off and all. Is there a shift from savings account to time deposit happening? Yes. Are we acquiring enough customers in the market? Yes. Are we able to penetrate them through all the other peripheral products? So the only fundamental shift is the idle money is getting into time deposit. In fact, our front-end RMs are encouraged to do that because that's the right thing for us to do for the customer. We believe on our core value as customer first. I think there's no point in allowing money also to idle beyond a point while it might sound, you know, very odd, but that's the reality. So if you see any customer having, you know, above certain threshold, our RMs meet them and move them into the relevant bucket, give the duration, and this is how we build trust, right? So I don't see any money running. We have not seen. Other than the set of customer, which I told in the last question also, where they were LCR- unfriendly, we went to those consumers and converted few into the bulk TD, and few allowed them to go because it was not suiting our, pattern of banking. Otherwise, we are at a retail level, we continue to get the, support of senior citizens. We are continuing to get the. 52% of our book is employed professional. As I said, 1,200 corporates have already opened accounts, NRIs are supporting. Is there a shift happening between the pockets? Yes, from SA to TD, and we are very open towards that. Thank you, sir. We have our next question from the line of Nihar Shah from New Mark Capital. Please go ahead. Hi. Good afternoon to everyone. Just want to ask a question again on the cost-to-income ratio. You know, we've over time sort of talked about operating leverage and maybe, you know, getting to, 55%, somewhere in the mid-50% cost-to-income ratio on a steady state basis. Now, this 65%-66% has been pretty sticky over the last three to four years. You know, some of it might be related to COVID slowdown and, you know, other factors. But this year as well, you know, you're gonna—you probably look like you end up somewhere in the mid-60%s, just like last year. Is this, you know, is there any change to your thought process on, you know, how you think about a steady state cost to income for your model? You know, what is driving this level of stickiness in of cost to income? Yeah. So, you know, I think we have explained earlier also that Equitas' model is basically a fixed cost model. And, you know, we have, I don't think we have too much of our cost on a variable basis. So, you know, we don't have, for example, an off-rolls team. Everybody is on rolls. We don't outsource our collections. Everything is, collections are all done by the bank staff, and we also do not source through DSA. Practically, our DSA sourcing will be, I mean, it'll be extremely small. We source directly through our own teams. Of course, we generate leads from new commercial vehicle dealers. That's the, that's for the new commercial, but most of the other businesses sourcings are done directly. So you see that we have explained this in the past also, that our model is basically a fixed cost model largely, and so the cost gets, you know, incurred, whatever happens on the business side. So when there's a robust growth in business, you would see our cost income coming down. But if at some point, the growth is not there because of whatever reason, then the cost income is bound to see an uptick, and that's what we are seeing currently. You know, the cost income did go down, in my memory, the lowest that we went down to was 56%. Again, it was pre-COVID quarter. It went down to 56% or 56.5%, because that's the time when after the demon impacted one-off and before corona was visible in the market, we actually had. We are back to our normal growth rate levels of 30% plus. And so our cost income actually went down to nearly that 56% odd. But after that, what's happened is our growth has come down. The two years of corona, 2020, 2021 and 2021, 2022, our growth rate was only about 15% per annum. And, you know, the cost doesn't go down, but the growth rate goes down to as low as, say, 15%, then the cost to income starts showing the effect. It's not just cost to income, but also other ratios like cost to advances, et cetera. All of that will show a similar trend. So why, while, we would say that 55%-57% cost income is a reasonable expectation to have for Equitas, but that presupposes a consistent growth of about 30% on a quarter on, I mean, year-on-year basis. If at any time you see the rate of growth coming down less than that, then you are bound to see the cost income going up, which is where we are today. So this year, you know, we might end up with about, as we mentioned earlier, 25%+ growth rate, which means that our cost income, we don't expect it to go down into the mid-50%s or slightly over the mid-50%s. Instead, we do expect it to be around the early 60%s. That's where we expect it to be. So going forward, if next year our growth rate comes back to our normal levels pre-COVID of 30%+, then we should see the cost income again inching below the 60% level. So that's our model, and that's how it, the whole thing is structured. You know, at any time you would see a very strong correlation between our cost income and our growth. Okay, great. Thank you so much. Thank you. Thank you. Ladies and gentlemen, kindly restrict your questions to two at a time. We have our next question from the line of Sameer Bhise from JM Financial Institutional Securities. Please, go ahead. Yeah, hi. Thanks for the opportunity. Just wanted to understand more about this slower growth anticipation ahead, given that you expect demand environment has been pretty, pretty robust. What is driving this cut in growth expectation? Is it some product category, or is it pricing, which you think is not commensurate with your return expectations or competition? Just wanted to get a sense more on this, especially given that we continue to add cost items, especially on employees. So what is driving this growth reduction? Yes. So we did guide for 30% in the beginning of the year, and now we are, we are saying that for the, you know, we are giving a revised guidance of 25% for the year. This is basically because we have gone through half year, six months has gone by, and we have registered a 20% growth. And while 30% growth from here does look a little stretched, you know, at 25% looks a lot more reasonable. So we didn't, we didn't want to stick to the 30% of the earlier guidance, and we thought it is better that we tone down the expectation for the year. If there could be a possible, you know, surprise on the upside, so be it, but at least we, we wanted to kind of moderate the expectation for the rest of the year. But, again, if you see, the other question that you asked is that the demand looks robust and all that, fundamentals look strong. You are right. Actually, everything does look good. The demand does look good, and, our own, comfort on collection is quite, quite comfortable on collections now. Our credit cost guidance is something that we are still sticking to, and that's something that we still expect to deliver as per our original guidance. So everything is in place, everything looks good, you know, but as Rohit mentioned, sometime earlier to someone else on the same question, there has been some level of, you know, delay in execution of certain plans, especially our focus on the non-TN areas. You know, part of the 30% growth was supposed to be contributed by, you know, regions outside of south, and there has been some slowdown in the execution in terms of recruitment of certain, you know, state-level teams and things like that. So there has been, it's a delay in execution at some level in these areas, and that is where we see that the first half growth is only at 20%. And now, of course, we will try to catch up. We will try to ensure that we improve the execution and catch up for lost time. But we don't think we should, you know, give a guidance which we may not touch in the next six months. It's better we thought that, you know, we give a guidance that we'll definitely touch, maybe exceed, but definitely not fall short. Okay. Especially, is it related to, say, slower pickup in the HBL book, or you would say it is broadly across products? See, there are, vehicle finance has been doing quite well, so that I don't think, should be any, you know, issue from a, growth perspective. As far as, the small, business loans are concerned, the housing finance which we have carved out now, you know, earlier that used to be part of small business loans. Now we are showing housing finance separately. That also registers a good growth, so that should hopefully continue to go, quite strongly. If page number 16, you see the disbursement, percentage growth, there you can see that, you know, the microfinance at 4% and small business loans at, 15%, are the ones which actually reduce the overall growth of the bank. Yes, yes. Microfinance, yes, we are very cautious. I think we'll continue to remain cautious in microfinance. There's a change in RBI guidelines rules for microfinance that came into effect from first of October. You know, it required certain system changes. Basically, the rules are, the change in rules are that, you know, the loans that a bank can give to a microfinance borrower is now dependent on his total borrowing from the industry and what is his total EMI that he has got to pay back to the industry, to all the lenders, and what will be the EMI as percentage of their income. So there are certain new rules that RBI has levied on those areas in microfinance lending, and it was to come into effect from first October. But we were actually able to implement that from first September, and, so there is some level of, you know, impact because of that. But even otherwise, we do want to remain cautious in microfinance. We don't want to really jump, too hard on that, given that it's fundamentally still an unsecured form of lending. So microfinance, it's at 4%, is a drag on the growth. But small business and agri loans, which is at 15%, that is where Rohit was talking of, you know, the improvement, the contribution to have come from non-TN areas, which has taken longer than what we were, you know, hoping for. And, that is where that should pick up in the second half. Because of that picking up, that's where we believe that our 20% September level should go to 25 by March. Okay. That's all from my side. Thank you and all the best. Thank you. Bye-bye. Thank you. We have our next question from the line of Anand Dama from Emkay Global. Please go ahead. Hello. Yes, so firstly, on the management tenure. So basically, so you had said that we would be looking for a new MD, and I believe we have also formed a committee as such. So any progress over there? That is work in progress, so as of now, we don't have any concrete thing to share. So we will share as and when something happens, but it's a work in progress. Okay. But what's the thought process of the appointed committee in terms of looking for the person to replace you? So looking for a very long banking career, and anything on that you can talk about? You know that I won't be able to talk about it. You know it, and you are just putting, putting it - putting me up. You know, we can't really say anything. It's obviously something that will be held in confidence at the committee level. There's no way that we'll be able to share details of what exactly we are looking at or what we are doing. You know it. You know that I won't be able to answer that question. And so I will also have to say that I'm sorry, I won't be able to give any further details, but definitely take it that we are on the job, and it's a work in progress. Sure. And just secondly, that you have cut down the credit growth target, that is fair on your side, but how about the deposit growth? Do you see that there is going to be a challenge over there as well, given that most banks are now looking to raise the deposit rates and try and challenge on the deposit front? So what is the outlook over there? See, deposit growth, you know, we don't see that as a challenge. If at all, we drop down on our growth, overall growth, it will largely be from a credit pickup and not from a deposit pickup. We don't see a challenge in that. Yes, the more deposit that you want to mobilize could have an impact on cost. That's always a possibility, because if you are more hungry for money, then there are times when you may have to pay a little bit more to generate that liquidity. It might be a trade-off from a cost perspective. But, as you have seen in our results, second quarter results also, you know, as a bank, Equitas, we do not really have so much of stress in terms of our margins and yields. So that is not really a major challenge. So we don't think... I mean, we don't see any issue as far as deposit is concerned. If at all, we have pruned down our growth expectation, you know, by the 5%, it's largely from the credit side. Okay, thanks. Thanks a lot, sir. Thank you. Thank you. We have our next question from the line of Abhishek Murarka from HSBC. Please go ahead. Yeah, thanks. Hi, good evening, everyone. So couple of questions. One, from a NIM perspective, what is the outlook? We, you know, deposit costs are going to rise up, and on the asset side, the repricing is going to be relatively slower, because of a large amount of fixed rate book. So do we expect NIM to continue to moderate? See, our NIM currently is about 9%, and if you see the last four quarters, it's hovering around that 9%-9.1%. But in these four quarters, if you look at the background, our yield has more or less remained the same. Our cost of funds has remained reasonably same. I mean, marginally down a bit and up a bit, and the NIM has also remained steady. And that is from the picture that you are seeing in our presentation. Now, if you want to go a little bit behind the picture into the banking operations itself, what... I mean, you may not know this, but what's happening in the bank is that, the contribution to business from the existing products is more or less steady in terms of percentages, compared to two, three, four quarters back. So we have not really changed our product mix. In the last maybe three, four quarters, there's really no significant change in the product mix. The product mix has remained more or less steady, which means that everything remains, kind of, uniform or, kind of same. Now, the question is, the next three quarters, four quarters or six quarters, what do we expect this to be? Will be actually, based on, any change that might happen in our product mix. So that is what might lead to certain change in the NIMs. So you see, housing finance is growing, and housing finance is a product with a lower yield. In vehicle finance, the new vehicle finance is growing, and the new vehicle finance is a product which is at a lower yield than used commercial vehicles. Similarly, microfinance, the growth rate is not as high, and microfinance does have a higher yield, but the growth rate is not as high. So you are seeing in the presentation that we have set out itself, you are seeing the indications of some small changes in the product mix contribution to the total portfolio. Now, it is not played out in any way in the last three or four quarters on NIM, lastly, because the changes are too minor. But, going forward in the next few quarters, yes, these changes might start reflecting a little bit more, which means there should be, some level of, change that you should see in the yield and the corresponding NIM also. Then the question will be that, whether, whether that will put a, you know, pressure on the, spread of the bank. But I think that is where, we will be toggling it, internally between, you know, drop in yield, as well as, the reduction in the OpEx, because some of the yield drop comes from products which are, having a higher ticket size. So once you're doing more business of, ticket size, which are larger, the operating costs should, to that extent, to that marginal extent, should see some, you know, support, from operating costs. Then over a period of maybe six-nine months to 12 months, there should be a marginal change that we should see on the credit cost also, because they are supposed to be of a better credit profile. So while you might see some level of dip in the, you know, the NIM over the next maybe four quarters or so, but as a bank, we are geared to kind of manage that by ensuring that the product mix changes will be very gradual, and the product mix change that happens gradually should be reasonably supported, you know, in, in a, on a, on a real-time basis through OpEx and credit cost, you know, benefit. Understood. Vasu, and, again, related to NIM, why are we carrying a 200% LCR? Most large banks are at 120% or so, but I'm sure we can come down to 150%. So that will also help NIM. So anything particular why we are maintaining such a high level of LCR? Yeah, actually, our NIM, sorry, our LCR, you know, when you have a 200% LCR, it actually doesn't mean that you're sitting on a high level of, excess liquidity, which is parked in, government securities. It... Even I used to think like that, you know. I am also learning, nowadays from, Nat. so it is really not that, you know, high LCR means lots of money sloshing around in the system, being parked with, with RBI. No. it actually depends on the quality of the type of deposit that you have. then there are, there's another ratio, which is a SLR. Now, as a bank, you are supposed to maintain a minimum SLR of 18% at all points in time. That 18%% is obviously we know that, that 18 is a sacrosanct, and if you have to maintain 18% SLR, you also always want to have a buffer. You know, you don't want to be at 18% exactly. So you will want to keep it at maybe 18.5 or somewhere in that range. Now, if you keep a SLR at 18.5%, let's say, or maybe even 19%, let's say, then what would be your LCR? If that LCR is more than 100%, you are actually quite comfortable. The question is, and Murali, if you remember, mentioned that, you know, we gave up nearly about INR 500 crore of savings in the quarter because they are not LCR-friendly. Obviously, he was, you know, it's difficult to explain in a call like this, what is LCR, what is LCR unfriendly and all that. It's impossible to explain on a call like this. But very, very briefly, I'll tell you that there are some deposits which are very LCR unfriendly, and if you have that kind of money, then your LCR is not showing a high percentage, but your SLR will be very high. So you may end up with 25% or 23% SLR, which will give you that 100% or 120% LCR, which is actually a strain or a drain on the bank. In our case, so, so for any bank for that matter, any of you would looking at the liquidity of any bank for that matter, Abhishek, are you still online? Yeah, yeah, yeah, Vasu. Okay, okay. Sorry, we got cut out. I'm back now. So the question that all of you should ask banks is what's their SLR? If they say my SLR is 18% or 18.5% or even 19%, then you should go back home saying that this is a very efficient bank, they are managing their liability well. But if their SLR is, say, 22% or 23% or 24%, that's actually the one which is an indicator that they have a high level of liquidity, which is all put in government security and a drag on the on the financials. The LCR is more like a gate criteria. If the LCR is more than 100% or 110%, you are comfortable, you don't really care. And if the LCR is 200%, it makes no difference. If it is 250% also, there's no issue at all. But if your SLR is 18.5% or 19%, you are actually perfectly fine. So in our case, you, the question you have to ask is that you have 200% LCR, which is very good, but what's your SLR? And, that's the answer that, I also don't know. What's the SLR? You know the company. Our SLR net says is around 20%, which means that we are not absolutely efficient, but we are marginally inefficient. Now, if my SLR had been 19 and the LCR 200, it means that you are taking a very you are taking deposits which are extremely LCR-friendly. In our case, we are maybe slightly away from that, but not very far. So that's the question you have to ask. Sure, sure, Vasu. Finally, just a very quick question, coming back to cost, but you said 60%-63% in the medium term. How do we... What is medium term? Is FY 2025 target or just, just a timing? So as I just explained, boss, I just explained it to the previous question, the same point. But I'm just trying to understand what- So your medium term, long term, what Sridhar mentioned, don't take it from a timing perspective, take it from a growth perspective. So suppose we are able to come back to your 30% growth, let's say six months from today, that's, that's the time that we are talking of. If we take, let's say, another one year or another one and a half years to come to a 30% growth level, then it's actually a one to one and a half year time frame. So from a, from a time frame, it's actually very closely linked to our growth rate. So it's not basically about, you know, six months, 12 months, or 18 months. Actually, Vasu, the question was that I was trying to figure what, when do we hit that 30%? Is it this year we understand 25, but next year, do we think we can get to 30%? See, let me be very frank with you. This year is something we were very keen to hit the 30%. We were very keen, so you can take it that it's a failure on our part that we are now talking of for 25%. But otherwise, there is no reason why we should not have hit a 30%, because, you know, there's no corona, there is no disturbance. From first April of this year, there has been no dynamics in the market, which has been negative. Our portfolio, touch wood, has been doing well, and all indicators are that, you know, the rest of the year, our portfolio quality should remain very good. And, you know, our vehicles has been doing well. So basically some little bit of execution challenges, and that's pulled our, pulled our growth rate a little bit down. So if you ask me, when will you hit the 30%? You know, I mean, I would love to say that we would like to hit it, you know, six months from today, nine months from today. I want to say that, I really want to say that, and that's our objective. That's clearly our objective and our goal. So just give me some time, we'll, we'll tell you when. Sure. Sure. Thank you, Vasu. All the best. Thank you, Abhishek. Ladies and gentlemen, due to time constraints, that was the last question for today. I would now like to hand the conference over to Mr. P. N. Vasudevan for his closing comments. Over to you, sir. Yeah, thank you. Thank you, all of you. Thanks for being on the call, and do keep working with us, and any questions, doubts you have, please keep asking us. Happy to provide you, and wishing you all the very best. Thank you. Bye-bye. Thank you. On behalf of Equitas Small Finance Bank Limited, we conclude today's conference. Thank you for joining us. You may now disconnect your line.