Ladies and gentlemen, good day and welcome to the Q3 FY26 earnings conference call hosted by HDB Financial Services. Please note, this conference call is only for analysts and investors and not for media. 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 and then zero on your touch-tone phone. I now hand the conference over to Mr. Jaykumar Shah, CFO of HDB Financial Services. Thank you, and over to you, Mr. Jaykumar. Thank you so much, Sagar. Good evening to all of you. I welcome you all to the Q3 earnings call of HDB Financial Services Limited. We have with us our MD and CEO, Mr. G. Ramesh, along with myself and the senior management team of the company. I hope all of you would have had a chance to peruse our financial results, the investor presentation, and press release, which has been filed with the stock exchange earlier this evening and also available on our website, www.hdbfs.com. We will start with management remarks and then open up the call for Q&A. The audio recording of this call will also be available on our website shortly after the call ends. I would now request our MD and CEO, Mr. G. Ramesh, for his opening remarks, following which I will provide a brief on the financial results and then answer Q&A. Thank you, Jaykumar, and a very good evening to all of you joining in. I wish you a happy New Year 2026 and greetings of the Harvest Festival. Briefly on the macros, consumption growth remained strong during the festive season and positive for the quarter. Broad-based set of measures in fiscal and monetary policy supported by expected good winter harvest bodes well for the domestic demand. Real GDP growth showed resilience amidst global headwinds, even as inflation stayed benign in the festive season. Global uncertainties around geopolitical tensions and trade remain a key monitorable. Coming to quarterly business updates, at an organizational level, our mission is to serve aspirational India, and now we have a franchise of over 22 million customers and a pan-India network of 1,744 branches spread across 1,165 cities. Disbursements for Q3, which is the October to December period, clocked in at an all-time high of INR 17,917 crores. It grew by 15% quarter on quarter, led by the consumer finance segment, followed by the asset-backed businesses. Book growth came in at 2.8% in the same period. Our yield improved on the back of our efforts at balancing product mix through focused origination. NIM for the quarter increased to 8.1%. As you may know, there have been a set of notifications on new labor codes that did impact our provisions in terms of gratuity and other things. My CFO will talk in more detail. So OPEX continued to be adjusted for that one-time impact, which we have taken in Q3. OPEX continued to be within the expected range. Our asset quality and stage one has improved to 95.22%. Adjusted for our reported PAT for Q3 grew by 36% year on year. However, excluding the impact of the new labor code, which is a one-time provision that we made in Q3, our PAT grew by 45% if you look at comparable numbers. Coming to segment-wise commentary, on enterprise lending, LAP and enterprise business loan, which is a variation of our LAP product, grew moderately in Q3. Go loans book grew by 17.8% quarter on quarter. Portfolio quality and unsecured business, which we had called out a couple of quarters back, has stabilized. As asset quality pressure eases further, we expect to return to a growth trajectory in the coming quarters. On asset finance, CV and CE book showed moderate growth in Q3. Asset quality challenges that we had called out in H1 showed signs of improvement in Q3 in the early buckets. We anticipate further positive momentum in both the businesses on the back of infrastructure push and improving economy. On consumer finance, book for the segment grew by 17.3% quarter on quarter. This was led by auto, two-wheelers, and consumer durables. Festive season surge, pent-up demand, market response to GSC cuts fueled growth. We expect momentum to continue in the segment going forward. Jaykumar, would you like to update on the financials? Thank you, Ramesh. Moving on to the financial performance for the quarter. As Ramesh mentioned, customer franchise grew to 22 million, which is an increase of 4.8% sequentially and 19.3% year on year. The total gross loan book, as of September 30, 2025, stood at INR 114,577 crores, growing 2.8% sequentially and 12.2% Y on Y. Secured loans of the total amount consisted of 74%. Disbursements for the quarter ended December 31, 2025, were INR 17,917 crores, up 14.9% sequentially, an all-time high for the franchise. Branch count stood at 1,744 spread across 1,165 cities and towns. Net interest income for the quarter was INR 2,285 crores, an increase of 4.2% quarter on quarter and 22.1% year on year. Net interest margin, NIM for Q3 FY26, improved to 8.09% versus 7.95% for Q2 FY26 and 7.46% in Q3 FY25. Moving on to expenses, I'll just elaborate a little bit on the labor code. Effective November 21, 2025, the Government of India notified the four labor codes: the Code of Wages 2019, Industrial Relations Code 2020, the Code of Social Security 2020, and the Occupational Safety, Health, and Working Conditions Code 2020, collectively referred to as the new labor codes, consolidating 29 existing labor laws. The Ministry of Labor and Employment has published draft central rules and FAQ on December 30, 2025, to facilitate assessment of the financial impact arising from these regulatory changes. Under Ind AS 19, which is our accounting standard that we follow, changes to employee benefit plans arising from the new labor codes constitute plan amendments, and they are required to be treated as past service costs and recognized as an expense in the statement of profit and loss. Accordingly, the new labor codes have resulted in an estimated increase in provision for employee benefit expenses of INR 60.52 crores, and the same has been recognized under the head employee benefit expenses in the quarter and the nine months ended December 31, 2025. The company continues to monitor the finalization of central and state rules and clarifications from the government on other aspects of the labor code and would provide appropriate accounting treatment on the basis of such developments as needed in the coming quarters. Of the overall impact of INR 61 crores, INR 56 crores pertains to the lending business. The P&L ratios that we call out for the lending business, I will be calling them out after excluding this one-time impact of INR 56 crores to make sure they're comparable. Cost-to-income ratio for our lending business reduced to 39.5% in Q3 FY26 as compared to 40.7% in Q2 FY26 and 42.5% in Q3 FY25. The ratio was 40.9% for nine months ended December 2026 as compared to 42.8% for the nine months ended December 2025. Cost-to-asset, excluding the one-time impact, was flat at 3.7%. Pre-provisioning operating profit PPOP for the quarter was INR 1,611 crores as against INR 1,502 crores for the prior quarter. Credit cost for the quarter was INR 712 crores as against INR 748 crores for the prior quarter. Reported profit after tax for the quarter ended December 31, 2025, was INR 644 crores as against INR 581 crores for the prior quarter. Excluding the one-time impact on account of the new labor codes, profit after tax for the quarter ended December 31, 2025, was INR 686 crores, which resulted in a growth of 18%. Gross Stage 3 as at December 31, 2025, was 2.81%, which is similar to the number that we had as at September 30, 2025. Provision coverage as on December 31, 2025 for Stage 3 stood at 55.59%. ROA annualized for the quarter ended December 31, 2025, stood at 2.35%, and for the nine months was at 2.15%. ROE for the quarter ended December 31, 2025, stood at 13.99%. Earnings per share for the quarter was ₹7.8, and book value per share stood at ₹239. Our borrowing mix remains well diversified with a positive cumulative mismatch across all buckets up to five years. We remain well capitalized with a total capital adequacy of 21.81% as at December 31, 2025. This ends my detailed update on the financials. We now request Sagar to open up the queue for questions. Thank you. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touch-tone phone. If you would 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. Ladies and gentlemen, also in order to ensure that the management is able to address questions from everyone in the conference, please limit your questions to two each per participant. If you have a follow-up question, you may rejoin the queue. Our first question comes from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yeah, hi. Am I audible? Yes, Abhijit. Good evening. Yeah, good evening, sir. So thank you for taking my questions. So just two things. First thing is, during your opening remarks, you spoke about weakness in CV and CE that we've been seeing for the last few quarters getting better in the second half. So if you could just elaborate on that and also the fact that MSME was showing us some pain, the unsecured MSME in particular. So where is it trending now? Because I see that the enterprise segment is still kind of trending a little weak. And then the second question I had was on vehicle finance. I see that asset finance disbursements have grown by about 4% YOY. So if you could just split this up into what was the volume and the value growth. Lastly, now that the festive season and the GST cuts are behind, if you could just help us understand which segments have seen the demand momentum continue in December and January, and in which all segments are you seeing that the demand has already started tapering off? Basically, whatever pent-up demand or bump in the demand that we saw after the GST rate cut. Those were the few questions I had. Thank you. I'll try and address them, Abhijit. So first one being weakness in CV and CE. So this was something that Ramesh mentioned at the beginning. That is something we called out in Q1 and Q2. And we had mentioned that we expect it to stabilize in the current quarter, which is quarter three. And we have actually seen that. So it's a part of two states, kind of two stories. One is on the 90 plus, where we have seen it stabilize. There is some more work to be done where we bring that down further. And that's one of the reasons why you see the gross stage three at 2.8%. What has been very positive in the current quarter is that we have managed to pull back from the delinquent book into stage one and our zero DPDs across all products actually inching up in a good way. So that's been the positive side for us. With the unsecured SME pain that was there for the last five to six quarters, if I can put it that way, that has clearly started easing off. The book, as you would have seen in the investor deck, has actually reduced slightly by almost 1%. But there, the health of the book has actually improved. So we're seeing it very positively. We need to start pushing hard into that space and growing from here on. It will take some time as we've taken five, six quarters to really make sure a lot of things fall in place. In a couple of quarters, we should see growth come back on that. In terms of vehicle financing, value versus average ticket size, as you put it, there has been a slight reduction in the ticket size of approximately 5%, if I can put it that way, and the balance has really been growth on the business front, and October, especially, if I could call out in specific as the festive season, really covered up for a lot of September gaps, right, and then it has been positive since, so we expect that to range in the positive territory and grow from here on. Thanks, Abhijit. Thank you. Our next question comes from the line of Viral Shah from IIFL Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. I have two questions. One is on the growth front. If you can help us understand why I think the disbursement growth has started showing signs of pickup. Of course, festive season, some bit of offset on the ticket size front. But the book growth is still, I would say, a bit softer. So what will be the horizon over which we intend to kind of reach, say, an 18%-20% kind of a book growth, our medium-term target, which is there? And the second question is with regards to the OpEx. What is the, I would say, the BAU impact of the labor code? I understand there is a one-time impact of the historical provisioning. But on a BAU basis, what would be the kind of impact of it? Is it material at all? Those were my two questions. So on the disbursement to book, the way I would look at it, Viral, is that look at it in the context of how we've grown, right? So we've actually grown 15% Q1, Q1 disbursements. And that's the most positive thing. On the book, the way it ranges is, as you've seen, we've held on to our yields. And as we've held on to our yields, in certain businesses, prepayments also happen. Plus, the whole pullback that we've done in terms of recoveries, which has been very positive on the stage two book, right, or the one-plus book, that has also gone into this calculation. So the way I look at it is we're fairly confident in terms of how we'd grow from here on. In terms of 18%-20%, the way we've always looked at it, Viral, is the nominal GDP plus six to seven. Overall, the thought process does not change. We believe growth will start kicking in from here on, and it should be in more positive range from where we stand today. Yeah? Second one. Just on this follow-up on the growth piece that you mentioned on the nominal front, do you think with the competitive intensity likely to increase with many players receiving significant growth funding in the form of equity, does that change any of this, the competitive scenario on the growth front as well? From a medium-term perspective. I don't think so. At this point in time, we believe the market is there for us to grow for the next coming three to five years for sure, if not the next 10 to 15 years. Yeah. On your second question on OpEx and BAU impact of the labor code, the way I would see is that, as I mentioned, it's a developing area. From what we were aware of based on the draft rules, what information we've had, we've taken a provision as of now. Let this space develop over the coming months and let us get finality. Then it would be better for us to comment on this. Thank you. Thank you. Thank you. Your next question comes from the line of Nishin Chawate from BofA Securities. Please go ahead. I was just looking at your cost of borrowings, and that's almost flat on a sequential basis, so if you would give some color in terms of where are we placed in terms of repricing, or do you expect this kind of ratio to remain at these levels going forward, and in that backdrop, how do we really think about margins? I know you commented on the competition part, but maybe if you could give some color in terms of how do you expect the medium-term product mix to sort of change your yields and trajectory on cost of borrowings? Sure. So let me address the cost of borrowings first, Nishin. On the cost of borrowing side, as I had mentioned, I think in the last call, we were largely done with maximum of the repricing. What we have looked at is I think the cost of borrowing has reduced by two to three basis points approximately on the whole. And what we've been continuously doing is making sure we look at the right products within the basket, whether it is NCDs, whether it is term loans, to make sure we borrow on a product that we are able to sustain the current borrowing cost. The way we look at it is we believe that the current borrowing cost should sustain, at least for the coming few quarters. Obviously, there's a lot more at play outside of HDB, which affects the overall bond yields and the market. So we'll have to watch that space closely. But for the coming at least couple of quarters, we expect to be in that range. And if opportunities lend or opportunities come our way, then we should be able to improve it by a few basis points as well. Sure. On yield side. On the yield side, as I had mentioned on the last call, we expect the NIM to range generally in the 7.9%-8%. It is 8.09% currently. As we go into Q4 and the overall markets are there, there is pressure, obviously, on yields across products. We've done well as a business to hold on to our yields. We expect, again, that to be range-bound, at least for the coming few quarters, in the range of 5-10 basis points, not a lot more variant from there. So we should be able to hold on to our NIMs in the region of 8%, as we had mentioned. Got it. And anything to read in the declining gross stage two loans? As I said, it was positive. It's been good recovery, be it enterprise lending, be it asset finance, be it consumer finance. I think across the board, the strategies that the teams put in have started to show. I wouldn't say hope would be the wrong word. I think it's the confidence that the teams are driving into the market of going and doing positive recoveries and making sure the flow forwards reduce. Right? The key for our business really in retail is to make sure flow forwards reduce. And that's been the key focus of how we are going about things. So that's a big positive for how we look at the business and plan for the future. Thank you. Those were my questions and all the best. Thank you. Thank you so much. Thank you. Your next question comes from the line of Piran Engineer from CLSA. Please go ahead. Yeah, sorry. I had logged out of the queue. My questions have been answered. Thank you. Thank you. Your next question comes from the line of Shreya Shivani from Nomura. Please go ahead. Yeah, hi. Thank you for the opportunity. I have two questions. First is a follow-up on the reduction in ticket size in the vehicle book that you spoke about of about 5%. So I just want to understand some reduction would be there because the GST cut and the price of the vehicle is lesser, so the loan size is lesser, etc. But have you seen de-premiumization of cars? So in a sense that after GST cut, have you seen more sales of the entry-level cars versus what was happening earlier? Or any other color around what has happened in the sales of the car segment, and my second is on the net slippages. So the trend, past two quarters were elevated. The trend is quite significant improvement in this quarter. But whatever is still slipping, I think, would it be majority CVC, MSME? Is there some color you can give around what book continues to slip at a slightly elevated rate versus the company average? Right. Shreya, so when you look at the entire GST and look at our business, there are primarily two areas where the GST cut has had a significant impact. One is the auto loans business, and second is the two-wheeler loans business. Construction equipment was always at 18% GST. Mobile phones and entry-level consumer durables are always at 18% GST. High-end televisions, which are at a higher GST rate, have come down to 18%, so the bulk of our business really has had no impact from the GST rate cut, other than the fact that it's driven positive sentiment in the market, so within two-wheelers and auto loans, we have seen about a 5% reduction in our average ticket size because the vehicle prices themselves have come down. Also, I think a couple of manufacturers have cut prices of some of the entry-level vehicles that they're selling, right, as a festive offer. So that's also driven sales in the entry-level segments. So I won't call it de-premiumization, which would suggest that a customer could afford to buy something more and has actually bought something cheaper. In fact, we ran a campaign called दो से बड़ा अच्छा चार, basically to say that why buy a two-wheeler when you can buy a car? In fact, some of the cars are priced at the same as seven years ago, okay, in some of the entry-level segments. So I think it's a lot more customers who have now found that the product is affordable. There's no de-premiumization in our view. In fact, in the Consumer Durables segment, where other than high-end televisions, there's no impact of GST, we're not seeing any reduction in ticket size. Yeah? Yeah. On the net slippages, Shreya, you're right. A large part of it has just been in the CVC segment. Outside of that, slippages genuinely come down. And that's very positive, as I mentioned. We should hopefully see slippages in these two products also start to become lower. Shreya, just to follow up on the CV, there were some cyclones down south. Do these events have some problems, or do they create some issues for you all? Typically, Q2 as a season is slow because of monsoons. Deployment of assets comes down. Let's say a vehicle runs 200 kilometers a day for 20 days. During monsoon, that number might come down to about 150-160 because vehicles run slower when it's raining a lot. Specific events, specifically, I don't think there's been any impact of cyclone in the south that we can sort of attribute to our portfolio. Sure. Thank you. This is very useful. All the best. Thank you. Thank you. Your next question comes from the line of Prithviraj Patil from Investec. Please go ahead. Yeah. So I had two questions. So the first one was on the strong fee income growth that we have seen on the book. So if you could just throw some clarity on why that has happened. And then the second is that the branch count has reduced, QOQ. So will this impact growth going forward, or how are we looking at that? So fee income is primarily driven by the product mix. And with the 15% disbursement growth and the product mix, there's been an increase in fee income. So in terms of branch count, there are branches that we will sort of review at the end of some time to see whether they are viable, whether they met their milestones that we have set out for them. So there'll be branches that we relocate. So given the nature of our business and given our processes, we can take these decisions quite quickly. So if a branch is not doing well, we can shut it and move on, or we relocate the branch. There are also cases where we increase the branch sizes, right, based on the business volume, which really don't come in the numbers count. What I think. Essentially on making sure that we are servicing a large part of the country. So in terms of the PIN code coverage, how many PIN codes are we covering effectively? Can we cover the branches or a larger geography around the branch effectively without compromising our credit policies? So don't read too much into the number of branches per se. It will always be here, five or 10. There'll be some small branches that we started off a year ago, hasn't met the milestone. Either we're not comfortable with the credit quality of the market, or we overestimated the potential of the market, or factors are not exactly supporting growth. We would just relocate the branch and focus our efforts on branches that are doing well. Thank you. Just a follow-up question. If you could give clarity on the ARC transaction as well, if you can tell what book have we sold off to the ARCs, and do we see any incremental sell-off happening to ARCs in the coming quarters? Yeah. So what we do generally is we only look at very dated write-off portfolios, right? Let's take an example where you have a relatively smaller ticket LAP book or CD book where our ability or the cost that we would potentially incur to recover that money over a long period of time is X. And we believe today what we would recover is what we can get back in cash from the ARC transaction. We look at that as a value transaction, and we go and complete that. And that's exactly what we've done for a small piece of the NPA portfolio that you've seen in the disclosure. That is what we've done. So it's a small piece. We always look at cost-benefit analysis and everything that we do to make sure we free up resources for better deployment in the future. Sure. Thanks. Thank you. Thank you. Your next question comes from the line of Bhaskar Basu from Jefferies. Please go ahead. Yeah. Good evening. I had a couple of questions. Firstly, on the vehicle side, so this 4% disbursement growth, if you can kind of give some color around how much was the drag from a price deflation there? And secondly, when I look at the book, new CVs seems to have grown sequentially by about 4%, while new CVs actually shrunk on a sequential basis. So is there anything playing out there? These are the two questions on the CV side. And my last question is basically on the business loan front, where so far you've tightened filters, and how far are you when you think you can start pushing growth again? That's all from my side. Bhaskar, I'll cover it. And if I missed something, I think there was a little bit of crack in the beginning. I'll cover the questions, and if I missed something, please jump in. On the CV side, as you would have observed, the whole market-wise, I think the reason why new is higher this quarter is primarily on account of the whole festive, right? Festive sales were absolutely bumper, and I think that just took off completely on CV new. Obviously, in the festive, CV used was a less sought-after product, if I can put it that way. And plus, even the pricing clarity wasn't there for almost a couple of weeks or a month in the beginning. I think that's the primary reason. Our overall objective over a period of time that we've quoted in the public domain that we would like to be more pushing towards used to get to a 50/50 over the next three to four years does not change. In a particular quarter like this, or when you look at March end, generally, there's more of new sales push that comes. So that's how I look at it. If you look at it on a nine-month level, it's more balanced. On a quarter-wise, of course, as you rightly put, CV new has grown and CV used is slightly lower. But nothing more to read beyond the festive and the GST and clarity on pricing, etc. So that's on CV. On the business loan front, I think if you ask me on the credit side of it, quality, i.e., book health, I think we're good. The way we read into this is now we've got to push hard on the current parameters and grow our book. And that's something we're very focused on. But as we push in the same way across the country, it will take a couple of quarters in terms of moving that into positive clarity and getting into growth. Obviously, there's a runoff that happens on the current book. As we push the new book in, the trend to reverse might take some time. But in terms of wanting to push and intent and credit being there available for us, all of those things. Okay. Just two follow-ups. One was a question you had asked, actually. On the disbursement side in CVs, how much was the drag from price deflation? You reported about 4% disbursement growth. Had it not been for the price, what would this be? Just a ballpark kind of sense. And secondly, just on the business loan, at this point of time, at a broader industry level, are you seeing unsecured business loan stress starting to kind of abate or stabilize, which will give you comfort to push the growth again? I'll answer the second one first. Let me wait for the next one month to see what everybody says. I think it won't be fair on my part to comment on the whole industry. I haven't seen everybody's numbers. On the price deflation side, I think it would be fair to say it has been fairly small at this point in time for the quarter. We'll see how that goes. Yeah? Okay. Thanks a lot. That's all from my side. Thank you. Thank you. Your next question comes from the line of Raghav from Ambit Capital. Please go ahead. Sir, hi. Good evening and thanks for the opportunity. I have two questions. One, on your cost of borrowing, so given the INR depreciation that has happened, and I think your exposure to ECB is about 11%, did you see your cost of foreign borrowing go up during this quarter? Because despite the rate cuts coming through, even in 3Q, the calculated cost of fund hasn't moved really. So that's my first question. So on cost of borrowing, our entire ECB book is fully hedged. So there is zero impact. We treat it as a fixed product kind of a thing. As I mentioned earlier, there has been a slight reduction of a few basis points. There are certain borrowings that obviously come in at current pricing or slightly higher as well. I'm sure all of you are very clued on to the market where rates have also hardened while there was a rate cut which happened in December. That That hasn't really translated much into lower costs of borrowing in most instances. In fact, the bond yields have only hardened at this point in time. That said, we continuously look at our entire borrowing book and work closely with all our partners to make sure it is the right base and the right pricing on a monthly basis. Okay. So even at the margin, the cost of foreign borrowing remains attractive versus, say, the domestic borrowing. Is that a fair assumption or not? So if you ask me as at yesterday, there's a large newspaper article that got printed. Whoever has got money in 728, obviously, it's attractive. But outside of that window that the RBI gave, it's a little pricey from at least the way we look at it at this point in time. Thank you. My second question is on the CV finance business. I see that your disbursement growth in this business is about 4%. I'm assuming that's after the 5% decline in average value of the vehicle finance. But when I look at the volume growth for the industry, right, commercial vehicle retail sales have been up 17% during the quarter. If I adjust that number by the same factor, say, 5%-6% decline in value, I am assuming that the disbursement growth for the CV industry would have been, for all financers collectively, would have been higher than the 4% for you. So is that the correct way to look at your disbursement number, and is that comparison correct? I'm just trying to understand the comparative intensity in the commercial vehicle finance segment. So your thoughts will be really useful here. Yeah. So again, just making sure we're both on the same page. You're seeing the book number grow. Book obviously has a much larger base to it, right, Raghav? Disbursements grew at a much faster pace, right, quarter on quarter. In fact, it's one of the higher ends of growth in terms of double-digit%. That effect coming onto the book obviously comes over a period of time. Because, say, to give you an example, if we were to disburse a number of 3,000, right, on a book of 30,000, that impact is 10% of that, right? So I don't think both the statements that you made are directly correlated. Obviously, there is a piece that comes through with disbursement growth. Book will grow. In terms of the industry, I believe we're pretty much in there. There are certain segments that we may not have operated in more because we don't feel it drives value for us from a yield perspective. But outside of that, I think we're fairly in the zone with the larger industry. No, so I think my question was on the disbursement growth itself, which is, I think, 4% YOY. And then even when I look at it on a quarter-on-quarter basis, that's, I think, 15%. But let me take this question from you offline. Sure. Sure. Yeah, and can I ask one more question? Sure. Yeah. Okay. So just your thoughts, some qualitative commentary on the asset quality in CV finance segment. What are you seeing in terms of customers' ability to repay, seat utilization? Maybe if you can share some numbers around collection efficiencies on the CV portfolio, that'll be very helpful. That's all from my side. So thank you. Thanks, Raghav. So I'll give you a broader statement. We don't put out specific product-wise numbers. But on the broader side, as I mentioned at the beginning, there are two sides to it for us. One is the 90/120 plus book, which has remained in that similar zone and needs to be brought down. Second is the 90 minus, if I can put it, or the 1 to 90, where the efforts that were taken during the quarter, we were able to recover well. And second, we've improved the zero DPD by making sure delinquencies also reduce in the first instance. So the X bucket has helped. Overall, if I were to look at collection efficiencies or slippages, slippages have reduced a little bit from Q2 to Q3. They stay at slightly elevated levels, which is where we want to really curb it down. So recoveries have improved. We believe as we go through the coming quarter and the next two quarters, we should be in a position to bring the book even more healthier from where it stands today, more towards a Q1 or a Q4 gone in terms of that line. That's at least the aim that we're working towards. Thank you. Thank you. A reminder to all the participants, if you wish to register for a question, you may press star and then one now. Our next question comes from the line of Avinash Singh from MK Global Financial Services. Please go ahead. Hi. Thanks. So a couple of questions. The first one on your comment around margins, that it's around 8.1% towards the higher end of your sort of guidance, and you preferred margins. Does that mean over the coming quarters, I mean, this margin will lead to a subpar or relatively lower growth than what you would have otherwise kind of thought, like 18%-20% range? Will this focus on margin leading to sort of that margin growth conundrum, you being on the lower side in growth? That's one. Second, if sort of we were to look maybe for next financial year, given where the sort of your margins are probably topping already of the guided range, what sort of then the improvement in trends was depending upon the current trends you are seeing, that will help the ROEs? I mean, because on the margin side, there is very little lever left. So what kind of a credit cost improvement will you expect in the next year? Thanks. Thanks, Avinash. So two things. I don't think the margin piece impacts growth directly. Sorry, it does impact, but it doesn't in the sense that we believe we're in the right zone as far as our product mix goes. Plus, if you observe an important factor, and thank you for the question, our secured book has actually gone up 50 basis points from last quarter itself and almost 90 basis points plus in the last two quarters. As the unsecured comes back, which is what we're focusing on, which is two segments for us, which is relationship personal loans and the unsecured business loans, we believe that will also help us on the top line. That's one. Now, if that consistently comes through and rates remain as they are and they don't harden, we should be able to operate at a healthier margin. That's one. Secondly, in terms of helping on the ROE, you're right. With a stable book, our cost income also, we have managed it in a manner, sorry, managed would be the wrong word. We've actually made sure we've taken efforts for it to come into the right zone of less than 40%. As the book grows, we should be able to pull back from a 3.7% to a slightly lower. Second important factor is the credit cost. Today, it is at around 2.5%, and the endeavor is to move it towards what we had in the prior quarters and shave off some of a few basis points from there. We'll see as we go along. The one thing I would want to leave with everybody is that we're very committed to bringing that down. And rather than give a number in specific, the focus is really to see how much can we do over the next coming quarters, which can stay in a consistent manner. Yeah? Thank you. Okay. Thanks. Thank you. Your next question comes from the line of Kunal Shah from Citigroup. Please go ahead. Yeah. Hi. Thanks for taking the question. So a couple of ones. So in terms of the average ticket size, when we look at it, in fact, it's still going up compared to where we were in 2Q, particularly on autos as well as two-wheelers. So maybe from 4.33, it's going up by 1%, and two-wheelers is going up by almost like 3%-4% compared to where we were in 2Q. So this is despite maybe the price cuts which were made because of GST. So how should we look at it? Maybe is it like a premiumization or focus on a higher ticket vehicle which is leading to a higher ATS? The way I would look at it, Kunal, is I mean, it's a small number just now. The GST cuts have come through. There has been fairly very good volumes that have happened during the festive on the two-wheeler side, right? I think that's an important one. And you've got to look at it in that perspective. Second is, if you look at our new business, as I mentioned earlier, because of the festive, actually grew more, right? And whenever the new grows more, naturally, you will have a higher. So the ATS is on account of new. Okay. Yes. Okay. Okay. Got it. And fair to assume that on the commercial vehicle side, there wouldn't have been any impact of GST, even on the disbursement side in terms of maybe the price cuts or maybe the overall, it's purely the volume linked to which would be there on the commercial side. Yes, that's right. Okay. Got it. And just on overall credit cost, so maybe just in the prior question, you indicated that you would want to shave it off a few basis points. But ideally, when we look at it, this kind of a trend, both on the commercial vehicle as well as on the MSME stabilizing, when should we ideally see it coming off and getting to maybe a steady state level? Would it be like another two, three quarters from here on, or would it take slightly longer? How should we look at it? Obviously, there has been an improvement during the quarter. But in terms of the trajectory, should we see something similar for another two, three quarters, or it stabilizes over a year now? The way we would want to look at it, Kunal, is that it stabilizes and improves quarter on quarter, right? Let's see, depending on the overall macro and the markets, how much can we improve on a quarter-on-quarter basis? In the longer term, we'd like to operate at least 10-15 basis points or at least 20 basis points lower than where we are today. Overall, that is where we would want to operate in the longer term, and in the medium term, try and get there faster than slower. Okay. Got it. Perfect. That helps. Yeah. Thank you. Thank you. A reminder to all the participants, you may press star and then one to ask a question. Our next question comes from the line of Jay from NDIE. Please go ahead. Hello. Hi, sir. Good evening. Congrats on a good set of numbers. So I have a question on your term loan. So could you specify the split between EBLR and MCLR borrowing? So we have a very small book on MCLR. Most of our entire bank borrowing on term loans is all EBLR-based. Okay. And what would be the share of HDFC Bank in your term loans, or are we getting any support from the HDFC Bank on this side? We borrow from HDFC Bank like any other large bank. We borrow 100% on deeply scrutinized related party terms. There is absolutely no preference on either sides. That's the way I would put it. So it's very commercial terms, and it's not that HDFC Bank puts in a lot more or a lot less. It's very transparent in the market that we operate. Okay. Thank you. And sir, as highlighted by the participants previously, so could you just throw some light on how are the collections going on the CV side? Are you seeing any green shoots there, or is the pain still continuing? So I think, Jay, I covered that already. Happy to catch up later. Is there a more specific question? Yeah. Sure. Sure. I didn't lend. Thanks. Okay. Thank you. Thank you. Your next question comes from the line of Sukrit Deepatu from Eyesight Fintrade Private Limited. Please go ahead. Yeah. Good evening, Raki. I have two questions. My first question is to Mr. Ramesh. As India's NBFC sector evolves with rising retail credit demand, fintech partnerships, and regulatory oversights, what structural shifts do you see shaping the company's position over the next two to three years? Specifically, how are you preparing to differentiate beyond balance sheet growth, whether through digital-first lending or customer lifecycle management or any risk analytics? Yes, I would like to hear your view on this. This is my first question, and I have a second question after this. Okay. So glad you asked me that question. I've been in the consumer lending industry for about 30 years now, which is pretty much the age of the consumer lending industry in India. I've worked in the consumer lending industry within credit bureaus. So in this industry, technology change is a given. It is not a one-off event. So that's something that we invest for continuously. So there's no end game as far as technology is concerned because technology itself is a moving train, right? And that's something that we need to adapt to on a continuous basis. We need to adapt to customer requirements on a continuous basis, and we need to adapt to our own business model on a continuous basis. I think our business philosophy has been to address aspirational India, which is a very clear segment that we identified as a growth driver for India and for our business. And our company has been focused on understanding what is it that this customer needs through his or her lifecycle, and how do we address those needs effectively? So which is why over the last 15 years, we have developed a large product suite which addresses any need that the customer may have. And that's our whole product development philosophy, is that how do we deliver customer needs profitably? So we don't have a hero product in the company which says that, "Oh, this is how we'll acquire the customer and then try some other product." For us, a customer, irrespective of the product he or she comes through, is a hero. And we try and understand what is it that we can do effectively through their lifecycle in terms of their own aspirations as individuals and as businesses, and how can we service that requirement effectively? So whether it's investment in our processes, people, training, technology, or our mindset, it's an ongoing and continuous investment is how we think of our business. Your second question? Yeah. My second question is to Mr. Shah. Given the pressure from rising funding costs and the needs to invest in more tech-related platforms, how are you balancing near-term margin protection with longer-term investments that could structurally expand the profit ceiling? Are there specific levers like liability mix optimization or operating efficiency or any particular fee-based kind of service that you see as margins expand beyond FY26? Thank you. So let me give you my thoughts on this. I think the most important question that you've asked me, and I'll cover that one, which is on the investment front, right? Investing in technology. So the thought process that Ramesh has had right from day one is that is a necessity, right? Over the years, that is one area where, while we obviously look at pricing everything that we acquire and spend very reasonably, if I can use that word, reasonably, there has never been a question mark if our CTO comes along and says, "This is what we need to invest for future growth." I think we have not even stopped during COVID. So that is one area we will absolutely continue to invest in. Whatever it takes, we will make sure we will carve out for the business to grow. It is our lifeline, and we will continue to do that. That said, across the company, the culture is extremely strong in how cost-conscious we are. The concept of an IRR on an investment is almost fed into every single person who comes along with an ask for an investment. So we're very blessed in that fashion that the thought process right from bottom up is very positive on that front. That's how I would look at it. I think that's good guidance from your part, and I wish the entire team best of luck for the next quarter. Thank you. Thank you. Your next question comes from the line of Chintan Shah from ICICI Securities. Please go ahead. Yeah. Hi. Thank you for the opportunity. So just one question on this new labor code. So understand that the 61 impact is largely on the gratuity perspective impact. But going ahead, we see any recurring impact in cost, employee cost, or will that be okay? Sorry to interrupt there. Chintan Shah, sir, your audio is modulating. It's not coming properly. If you can just use handset, if you're using a speaker mode. So is it better now? Yeah. Chintan, I think I got your question. Let me try and address it, and you can jump in again in case I missed something. So the question was, do we expect something more to come out on the labor code, right? Honestly, as I mentioned, I think that was a question that Veera asked at the beginning, if I'm not mistaken. It is a developing space today within the finance community. The understanding that we've had along with the guidance we've received, we've taken that ahead. Let's see how it develops over the next coming months at the end of the year in terms of what the numbers are. Got it. Got it. Yeah. That's it from my side. Thank you. I think just having said that, to the extent that we have clarifications, it's been fully provided here. To the extent that we have clarification on the labor codes, so it's been not done a partial provision to the extent that we have actual valuations and whatever, it's been fully provided for the 61 codes. Is it at this point of time? Yeah. Sure. Sure. Thank you. Thank you. Our next follow-up question comes from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yeah. Thank you for running that. One One question. Sorry, Abhijit. We can't hear you. Sorry, Sagar. I don't think we can hear Abhijit. All right. All right. Due to the end of the allotted time, we would take that as a last question. And I now hand the conference over to Mr. Jaykumar Shah for closing comments. Thank you, Sagar. Thank you very much, everybody, for your time and patience. It's been a pleasure talking to all of you. Wishing you all a very happy festive, as Ramesh wished in the beginning. Have a good evening. Thank you very much. Thank you. On behalf of HDB Financial Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.