Ladies and gentlemen, good day and welcome to IndusInd Bank Ltd Q3 FY 2025 earnings conference call. 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sumant Kathpalia, Managing Director and CEO. Thank you, and over to you, sir. Good evening, and thank you for joining this call. Let me start with some macro commentary and then go into bank-specific details. Recent trends in high-frequency indicators suggest stability in economic activities after the slowdown in Q2. A recovery in rural demand and a festive season boost to urban demand is aiding private consumption. However, a contraction in public CapEx in H1 and a sluggish recovery thereafter have weighed on investment growth. The Union Budget due to be presented tomorrow may address growth slowdowns this year by retaining focus on investments and on spending sides and on continuing tax policy reforms to improve compliance while signaling commitment towards fiscal discipline. Any potential measure supporting rural as well as overall economic activity should aid our microfinance and vehicle finance businesses. Coming to the quarter-specific developments, the key highlights for the quarter were robust retail deposit growth. We maintained momentum in retail deposit mobilization during the quarter with 4% quarter-on-quarter and 14% year-on-year growth. The share of retail deposit, as per LCR, improved to 46.1% versus 44.1% quarter-on-quarter. We, however, consciously let go of some of the non-LCR accretive wholesale deposits during the quarter, and as a result, overall deposit declined 1% quarter-on-quarter. Calibrated loan growth. We continue to grow our loan book in a calibrated manner, being watchful of the developments across the segments. Overall loan growth was at 12% year-on-year and 3% quarter-on-quarter. Our vehicle and microfinance business saw robust pickup in disbursements sequentially. Momentum continued under the retail loans and corporate book growing 19% and 16% respectively. Progress on new initiatives. Our liability initiative of Affluent and NRI Banking maintained healthy growth rates of 20% and 39% year-on-year respectively. Loan book under merchant business at INR 6,319 crores grew 32% year-on-year, while home loan book at INR 3,144 crores grew at 128% year-on-year. Our digital banking offering indeed is now open up to all customers of the bank as the upgraded digital application, and we are seeing positive trends among the early adopters. Asset quality. Our gross NPA and net NPA were at 2.25% and 0.68% respectively. Gross slippages were at INR 2,200 crores, and net slippages were at INR 1,860 crores. The slippages were higher in the microfinance segment given the industry situation. Asset quality trends in the rest of the business remained broadly stable. The restructured book, SMA-1 and 2, and loans, and SR book showed improvement year-on-year and quarter-on-quarter. Stability in financial metrics. Our ROA was stable at 1.03% versus 1% quarter-on-quarter. The lower NIMs were due to rundown in the microfinance book but offset by strong other income and cost control. Our capital adequacy remained healthy with CET1 at 15.18% and CRAR at 16.46%. Now coming to individual businesses. Vehicle finance. Vehicle finance business saw improvement both in terms of disbursements and asset quality during the quarter. Vehicle disbursements for Q3 were at INR 13,388 crores, growing at 25% quarter-on-quarter and almost at similar levels YoY. The quarter thus reversed the trend of YoY and quarter-on-quarter decline in disbursement in the last several quarters. We saw YoY growth in disbursements for M&HCV, construction equipment, and two-wheelers. Passenger vehicles and SCV saw YoY decline in disbursements. Tractors and LCV too saw robust improvement sequentially, elevating its still lower YoY. The sequential vehicle loan growth thus accelerated to 3% from 1% last quarter. The year-on-year growth was at 9%, broadly reflecting the underlying industry performance. The gross slippage in vehicle finance was stable at 0.74% versus 0.73% year-on-year and 0.77% quarter-on-quarter. The commercial vehicle, passenger vehicles, and construction equipment saw YoY and quarter-on-quarter improvement in slippages, whereas tractors and two-wheelers saw comparatively high slippages. The restructured book in vehicle finance continues to reduce to INR 231 crores versus INR 309 crores quarter-on-quarter, with the majority of the reduction coming from upgrades and recoveries. Overall, the vehicle industry should see recovery in volumes aided by government spend and possibly lower interest rate environment. With improved diversification across product categories, we remain well-positioned to benefit once the industry sees recovery. Bharat Financial Inclusion Limited. Outstanding loan book via Bharat Financial Inclusion now stands at INR 38,883 crores, growing by 1% quarter-on-quarter and down 4% year-on-year. The microfinance segment witnessed sequential improvement in disbursement driven by pent-up demand as well as improving eligibility of centers as well as customers. The disbursement of INR 9,200 crores was largely in line with the repayment and thus arresting a strong drop in the loan book witnessed since March 2024. We remain cautious on the growth with disbursement well below our historical run rate as well as customer eligibility. Geographically, among the key states, portfolio grew sequentially in Maharashtra and Odisha, whereas de-grew in Karnataka and Uttar Pradesh. The 30 to 90 book was stable at 4% versus 4.1% quarter-on-quarter. We have provided a few additional disclosures in microfinance covering disbursement as well as asset quality indicators. The disbursements are concentrated towards vintage customers and centers. The incremental stress in microfinance seems to be peaking out, as seen in the reducing forward flows from zero DPD customers. We can discuss this further in question- and- answer. Bharat Super Shop, the merchant acquiring business. We have now around 660,000 merchant borrowers under this program. Our merchant loan book at INR 6,319 crores grew by 32% year-on-year and 9% quarter-on-quarter. The share of non-MFI book improved to 16% versus 12% year-on-year. Total liability sourced through Bharat Financial now stands at INR 2,610 crores with 19 million SA and RD accounts. Gross slippages from Bharat Financial increased to INR 695 crores during the quarter. We remain committed to the business with investments in technology and analytics as well as human resources, adding around 10,000 more employees during the last one year in Bharat Financial. Overall, while incremental stress formation is showing early signs of stability, we continue to be cautious on the microfinance segment. We are also watchful of implications from the new MFIN guidelines once they get implemented. Nevertheless, we continue to believe in our approach of addressing, focusing on one, funding requirements of vintage customers and centers. Two, being conservative on overall customer indebtedness. Third, investing in collection infrastructure. Fourth, continued diversification of the loan book. Corporate Bank. The corporate bank loan book growth was healthy at 16% year-on-year and 2% quarter-on-quarter. Within corporate, large corporate grew by 14% year-on-year. Mid and small corporate grew by 18% year-on-year each. Sectors which saw growth during the quarter include petrochemical, food processing, and NBFC. Our diamond business continued to be of robust asset quality while growth is subdued due to weak industry demand. The portion of A and above-rated customers have been at 79% versus 77% year-on-year, with weighted average risk improving to 2.47% versus 2.54% year-on-year. Gross slippages in the corporate book were at INR 281 crores, mainly contributed by one restructured real estate account which passed the DCCO guideline. The nine-month financial year 25 annual slippages remained low and were stable at 0.39% versus 0.57% YoY. Our SMA-1 and SMA-2 Book collectively stand at 20 basis points. Looking ahead, we continue to focus on building a granular and diversified corporate bank franchise, leveraging on selected areas of competitive advantage. Other Retail Assets. Our retail assets maintain robust growth momentum with 19% year-on-year and 4% quarter-on-quarter growth. MSME Book under business banking is at INR 17,769 crores, grew by 12% year-on-year. New acquisition momentum saw a peak with 10% quarter-on-quarter growth given by maturing of branch operation model and new product adoptions. 80% of the new-to-bank customers are from granular less than INR 2 crore segment catered via a fully enabled digital lending platform specifically designed for MSME customers. LAP book maintained a steady traction with 14% year-on-year and 5% quarter-on-quarter growth. We continue to scale our home loan book at healthy pace with outstanding now at INR 3,144 crores, growing by 128% year-on-year. Credit cards spend at INR 28,135 crores, growing at 12% quarter-on-quarter. Share of unsecured cards and PL has been maintained prudently at 5%-6% of the loan book. Overall, we will continue to scale up our retail assets at faster pace with focus on improving diversification of the overall loan book with increasing the retail secured mix with home loans and MSME. Now coming to liabilities. The deposit growth for the bank was at 11% YoY. Sequentially, however, deposits de-grew by 1% as we let go of around 3% of deposits from financials and other non-LCR beneficial sources. We maintained healthy growth momentum in retail deposits as per LCR of 4% quarter-on-quarter and 14% year-on-year. As a result, the share of retail deposits as per LCR reached 46.1% versus 44.1% quarter-on-quarter. Our CASA ratio was lower quarter-on-quarter due to outflow of some short-term flows such as dividend mandates. Savings account deposits grew 2% quarter-on-quarter. The increase in cost of deposits remained contained at 3 basis points quarter-on-quarter, mainly driven by change in mix. Our initiatives of Affluent and NRI Banking are showing robust traction amidst the challenging deposit environment. Affluent segment deposits at INR 60,300 crores grew by 20% year-on-year and 6% quarter-on-quarter, and AUM at INR 99,000 crores grew by 28% year-on-year. Our NRI segment deposits at INR 58,600 crores grew by 39% year-on-year and 7% quarter-on-quarter. Our market share in non-resident segment stands at 3.9% as per last available data versus 3.3% YoY. Our reliance on bulk deposits remained low with certificate of deposit at 4.2% of the overall deposit and borrowing at 9% of total liabilities. Share of top 20 depositors further reduced to 15.4% in December 2024 versus 16.1% in September versus 17.4% in March 2024. The liquidity position remained healthy during the quarter with average LCR of 118% and average surplus liquidity at INR 40,800 crores for the quarter. Overall, we have worked on optimizing the deposit mix while continuing to progress on our journey of strengthening liabilities, franchise, and retailization of deposits. Digital Traction. During the quarter, Direct Digital Model continued to scale with over 70,000+ clients who originated digitally through the do-it-yourself model every month across savings, cards and personal loans. Over 80,000 fixed deposits by volume and more than INR 2,000 crores by value are originated digitally via platform each month. At the same time, we are imbibing digital across customer touchpoints and nearly all of retail business products such as cards, personal loans, savings, term deposit, investments are digital now. Indie continued to scale up as the app was opened to all customers of the bank. As the upgraded digital application for all, we have seen extremely positive trend on early adopters. The first set of 1.5 lac customers who have migrated have shown 20% deepening within a month of adoption. The bank also launched Indie for Business as one of its kind industry-first solution to bring better business banking to all MSME clients in the country. We have seen 10,000+ users register to the app within a month of the launch. Now coming to the financial performance of the quarter. Our net interest income was at INR 5,228 crores. The yield on advances was impacted due to lower quarter-on-quarter average balance for microfinance and EBLR repricing. The cost of funds was subsequently higher due to increase in cost of deposit and higher borrowings quarter-on-quarter. As a result, net interest margin was at 3.93% versus 4.08% quarter-on-quarter. Non-interest income at INR 2,355 crores grew by 8% quarter-on-quarter. The core fee income was at INR 2,123 crores. The fee income was driven by healthy sequential pickup in vehicle as well as microfinance disbursements. We continue to optimize our operating expenditure. The YoY growth in OpEx is now moderated to a single digit at 9% versus 14% in previous quarter. The sequential growth too remained contained to 1% quarter-on-quarter. The operating profit for the quarter was at INR 3,601 crores stable quarter-on-quarter. On the asset quality and the provisioning front, our gross slippage ratio was at 0.62% versus 0.56% YoY. The gross slippages by key segments were vehicle finance INR 671 crores, Bharat Financial INR 695 crores, corporate bank INR 281 crores, and other retail including credit cards of INR 553 crores. The restructured book reduced during the quarter to 0.18% from 0.29% quarter-on-quarter. The net security receipts have reduced to 29 basis points versus 37 basis points YoY and 31 basis points quarter-on-quarter. Overall, GNPA and net NPA were at 2.25% and 0.68% respectively. Provision coverage ratio at 70% was stable quarter-on-quarter. Our SMA-1 and SMA-2 book collectively was at 20 basis points versus 33 basis points quarter-on-quarter. Our contingent provision stands at INR 1,325 crores versus INR 1,525 crores quarter-on-quarter. We wrote off INR 344 crores of microfinance versus INR 73 crores quarter-on-quarter. We also had a corporate account slippage from a restructured book. The contingent provision was utilized largely towards that. The loan-related total loan-related provision ever at 2.4% of loans or 105% of gross NPAs. Profit after tax for the quarter were at INR 1,402 crores, grew by 5% quarter-on-quarter. Return ratios saw marginal improvement sequentially with RoA and RoE at 1.03% and 8.5% respectively. We continue to use our capital efficiently. Our capital adequacy ratio remains healthy with CET1 at 15.18% and overall CRAR at 16.46%. Overall, if I may summarize, we remain cautious on microfinance segment. While the slippages may get elevated for another quarter, our customer base is showing early signs of stability, which should start reflecting from quarter one onwards. Growth has resumed in our core domains, and retail loan shares should start picking up again. The retail deposit momentum remains apace to fund the loan growth. Operating expenses are now well contained, and the retail loan growth should start reflecting in operating leverage playing out. The pre-provision operating margins remain healthy to absorb incremental stress in microfinance. Asset quality outside microfinance has been robust, including in vehicle finance segment. The capital adequacy levels are healthy even after considering current microfinance stress, evolving regulatory requirements, and the bank growth conditions. With this, we can open the floor for questions- and- answers. 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 one on their touch-tone 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. Participants, you may press star and one to ask a question. The first question is from the line of Kunal Shah from Citigroup. Please go ahead. Yeah, thanks for taking the question. So sorry, I just missed out in terms of the utilization of the contingency buffer. Was that towards the corporate account or it was towards the MFI? So INR 160 crores was towards the MFI and INR 40 crores was towards the corporate account. Oh, only INR 40 crores towards the corporate account and INR 160 crores towards this. So maybe going forward, as you mentioned, slippages might remain elevated in 4Q as well. If you can just broadly, maybe there are various cuts which have been given. There are additional disclosures on the MFI front. But looking at it in terms of what could be the overall stress which we are seeing, because on the X bucket, we have already seen 99.5% collection efficiency now. So we would be having the good handle in terms of what is the level of stress. So how much could be the slippage? What could be the provisioning against it? And would there be further utilization of contingency buffer in 4Q? So I can't tell you about the contingency buffer utilization, but I can tell you the 30-90, which is a good indicator of the stress, still elevated at 4% because October and November were bad months for microfinance. And that provisioning will still continue? I think if you look at the resolution rates which happen in the forward buckets, it's a bit low in the microfinance segment. Yeah. Okay. Okay. Got it. And secondly, when we look at it in terms of the overall margin front, so given that there would have been interest reversals on a higher level of slippages. But otherwise, given the initiatives which we have taken, do we expect it to have? And given in the rate cut environment, we should be more beneficial given the profile of our portfolio. Where do we see margins eventually settling now, given that interest reversals would be more or less behind us? I think very difficult to give a guidance on the margins as of now. I would like to see quarter four playing out. I would like to see that microfinance stabilizing. And then I think we have to see what the rate announcements are on the deposit and the RBI or the rate cuts which come in. And then I think there would be a good guidance which can be given on the margin. I'd like to wait for the next quarter before we give any guidances on this as of now. Okay. And just lastly, when we look at it, you mentioned you will be watchful of the MFIN 2.0 guardrails. When we look at our portfolio, almost like 14-odd% is something wherein it's BFIL plus 2. So how do we see maybe our collection efficiencies in this pool relatively worse off? And if it doesn't get refinanced, do we see the pain continuing even in 1Q of next year? You have clearly guided for 4Q, but is that the risk of spillover in 1Q as well? So I think we've also given a graph if you go to the second page. So flows come when your zero plus DPD are at higher percentage. The flows were coming when we were at 98.3% or 98.4% on the resolution in the, and the flow rates were about 1.6- 1.7. I think those flow rates have now moderated to the collection efficiency is at 99.5% in the zero plus bucket. So the zero plus bucket is 99%. So there is a flow which has forward flows have reduced considerably, which is what we were observing, and it has happened in December, and so is the case in January. We want to continue to watch this space. That's why I said that we are cautious about the microfinance segment, and I think we will continue to wait and watch before we press the accelerator. You know that we used to do disbursements of INR 14,000 crores-INR15,000 crores a quarter. We're now down to INR 9,000 crores. I think just pressing the accelerator on disbursement may not be the right approach. We want to wait and watch and see how this plays out, see the balancing of our book. We want to press the accelerator when 30-90 becomes within a range amount of 1%-1.2%. That's our objective, and we are putting all our processes, collection efficiencies in place to make sure that that happens first. Got it. Got it. Okay. Yeah. Thanks. Thanks and all the best. Yeah. Thank you. Next question is from the line of Rikin Shah from IIFL. Please go ahead. Hi. Good evening. Am I audible? Yeah. Okay. Thank you for the opportunity, sir. Just a couple of questions. The first one is on yields. So while the interest reversals due to elevated slippages are understandable, but if you look at the corporate loan yields, they have been declining in the last four quarters sequentially. So what is the reason there? Because we have been growing the small business loans faster than the large corporates. So that's question number one. And second question is on the asset quality. So even barring MFI, the NPAs in all other segments have inched up sequentially, and even the slippages in CFD is relatively elevated. So what's the outlook on the slippages in the coming quarters? Those are my two questions. So I think let me answer the first question, the corporate yields. I think if you look at the corporate yields, there are two reasons for it. One is, I think, we manage our risk profile very well, and that was very, very important that we make sure that the excess liquidity is now, rather than going into the reverse repo, managed to manage the good quality accounts in AA and AAA rated paper, and I think that is where I think we are willing to give away yield, but the risk weights have come down to 2.47, as explained earlier in the corporate from 2.54, so we've actually managed our risk weights very, very well. The second reason for that is, I think, the EBLR repricing has happened on the loan, so a lot of these corporate bank loans are floating rate loans. They're not fixed rate loans, and I think the EBLR repricing, where it's linked to external benchmark rates, have got repriced. The second part of your question was on how do you see the flows and the. I think it's too early to comment. Like I said, I've told you that our vehicle finance has gone through the most turbulent period, and in good times gives you 110- 120 basis points of credit cost, and in bad times gives you 130- 140 basis points of credit cost. So I think while the gross flows may look elevated, but I think the recovery in the vehicle finance book is very fast, and that is where I believe that the vehicle finance is a good book which manages, its range bound in the cost. I think the other retail which has seen the flow is mainly because of the credit card business. And when you see the elevated flow, it's all come from credit card, and the credit card flows are at a higher level right now. And I think they are, and you know the industry is going through a stress in the unsecured business. And I think the good part is they are now moderating. We've seen stability of flows, forward flows now. And I think in next two quarters, you should start seeing a reduction in the flows from the other retail book also. On microfinance, I will continue to say that we have to continue to watch this space. The explanation which I gave to Kunal stands here also. I continue to believe that the forward flows have now looking better, but I think we still have to be conservative and cautious about this space. I think we will continue to be conservative and cautious about this space. Right. Thanks. I have one more question, if I may squeeze in, if you allow me to squeeze in one question. It's on deposits. Is there any further debulking of deposits likely in the coming quarters, or now the overall deposit growth should kind of move in line with the retail deposit growth? No, I continue to believe that we will continue to reduce our bulk deposits. I've said that before. I think our given guidance to the market is 48%-52% of LCR ratio and LDR 88%-90%. I think that's the only guidance we can give you, which is in public domain. I think that's our guidance, and we will continue to do what is necessary to granularize the liability book. Got it, sir. Thank you very much. Thank you. Next question is from the line of Chintan Joshi from Autonomous. Please go ahead. Hi. Thank you. So can I ask just follow up on that NIM point from earlier? I appreciate you don't want to guide us on what might happen in the near term. But how should I think about kind of NIM evolution, say 12, 18 months down the line, once we are past this MFI stress period? How big is MFI now going to be part of your loan book? And also, what kind of margin should we expect once that kind of stabilizes at the level that you want? Now that we kind of appreciate more that MFI will remain cyclical, I wonder if you're thinking it may go back to 12% of the loan book down the line or not. Related to that, I would like to understand, through this cycle, how do you see the ROA and MFI ROA on the MFI business? We go through external shocks in this book every few years. Just trying to understand how you think about through the cycle ROAs in this business. I think there are multiple questions which you've asked, so let me try and see if I address all your questions. The number one question is on what is the share of MFI in your book, right? I think you've seen that over the past three years, we've been continuously reducing the share of the MFI. It was 15%, then 11%, 12%, and now we want to bring it down to 8%-10%. I think that is the optimal size of the MFI book. I don't think the MFI. I think that's our first step, that 8%-10% is what our share of the MFI book should be. And that's what we are working on, and we are diversifying. The second issue, we continue to believe that rural is a great opportunity in the country, and we continue to diversify this book. And we are launching a segment called Bharat Vikas Banking in April, where I think merchant acquiring business, which is a very good business we talked about, Bharat Financial business, and some other parts of rural product, which is the small SME lending, will start getting launched into this vertical. And I think we will start diversifying the business from microfinance into this so that we don't compromise on the growth of this segment. Having said that, we continue to believe that across cycles, which is, you know, that MFI business is cyclical in nature. MFI business will give you 2.5%-3% ROA at this point of time. If you go at some years, it gives you 4%. In some period, it gives you 1.5% also. So I'm saying 2.5%-3% is given on this business. And I think if you look at this business on a holistic basis, I think it's a very, very efficient business. And if done well, and if you take provisions in this business, like we did, we did not use it. But I think if you continue to keep 2% of the book as provisions, I think you should be able to manage the stress. I've always said this book will run at a credit cost of 2.5%-3.5%, and you keep a 2% provision. Then I think a cyclical trend in this business, if it will happen, it should be able to take care by plus - 1%. That's how you should manage this business. I hope I have been able to answer your questions. Yeah. Thank you. And then I have one on deposits. When I think about kind of your stable deposits within your retail deposits, it's about 5% of the total LCR retail deposits. Why is that number that low? If I think about your branch franchise in a number of tier two, tier three cities, tier four cities, that granularity should be higher, but somehow that stable deposit number is a little low. I'm just wondering how that can be improved. Chintan, there are some different ways in which there has been some interpretation for those guidelines. There is no clarity or uniformity in which what can be classified as stable and non-stable. You would notice that some banks have a very low number, some banks have some slightly higher numbers. I'll take you through granularity offline through a separate discussion. Thank you. Thank you. Next question is from Piran Engineer from CLSA India. Please go ahead. Yeah. Hi team. Congrats on the quarter in this challenging environment. Just circling back to microfinance, firstly, is January better than December, if you can comment? Obviously, on collections, not growth. So if you look at the I just mentioned that if you look at the forward flows, it looks better on the zero- plus bucket. But if you look at what has flown into the 90- plus bucket, what had accrued in October and November, we are seeing that some flows are happening in the bucket as of now. Okay. Understood. So stage two flowing into stage three. Yes. So I think what is encouraging is the forward flows in zero- plus have stabilized, and it has improved dramatically. Okay. Okay. Fair enough. And given that the new guidelines in MFI will be out in April, have we proactively stopped this two plus one? I mean, have we moved to two plus one, or are we still okay being the fourth lender if a proposal comes right now? So if you look at the data which we have presented, and I think there's a disclosure which we've given, I think if you look at the number of lenders, if you look at the BFIL plus two, we are already at 90, I think 86% of our business is BFIL plus two. And I think we want to get that to 95%-98%. No, no. I get that. Eventually, it has to be 100%. My question is right now, if you're getting a proposal where you're the fourth lender, okay, let's say today on 31st January, will you take it up, or will you say, "No, anyway, in two months, you can't do it, so why do it now?" That's my question. I have Sridharan who runs Bharat Financial. Yeah. Hello, sir. Hi. We already have got put in our system that any new customer, we will not have BFIL Plus Two, and for an existing customer, maximum we'll allow one more lender, and when the MFIN guidelines come, the latest rule we need to change that for a new or existing relationship, it'll be BFIL Plus Two. In terms of business impact, I think it'll not be significant. We will manage, but for quite some time, we have been having the number of lenders rule built into the system. Got it. Sir, since you're on the call, how should we think about MFI industry growth once all this is settled, say, two quarters later? Because clearly, I think the industry is maxed out on the number of the TAM in terms of number of borrowers. And then should we just think of it as ticket size, which is similar to inflation, so the MFI industry grows at 6%-7%, or how do we think about industry growth here? See, the industry is likely to grow at 15%-16%. When When new geographies get added, still, there are pockets in the country where lending is not taking place. Whether we will participate in that, how the industry will move there is what we need to see. If you see the growth post the RBI unification of the guidelines, that growth has been quite significant, and there was also only a 10% degrowth in that. So the overall picture, whether the MFI industry will continue to grow 25%, I don't believe so. 10%-15% growth in the JLG model is likely to be there, but that also will come more from newer geographies and less from new customers in the existing geographies. Understood. Okay. That was it from my end. Thank you and wish you all the best. Thank you. Next question is from the line of Anand Dama from Emkay Global. Please go ahead. Yes, sir. Thank you for the opportunity. So what explains the highest leakage in the- Go ahead and explain to the handset, please. Yeah, sure. Yes, sir. What explains the highest leakages in the tractor, small CV segment? And also, if you can provide the MFI exposure in the state of Karnataka, where there are basically new rules coming up, and do you see any impact of that on your portfolio? Okay. So let Sriram answer the tractor as well as the SCV. Yeah. Good evening. On tractors, we are seeing an increased flow in the 90-360 bucket. So a year back, we have made our underwriting norms much stricter. But whatever flowed into 60-360 slowly has been flowing into NPA, which is recognized on 360 first day. So that is what we are seeing. I mean, with the better underwriting norms, I think after three or four months, the slippages should slow down quite a lot. The next three, four months, there will be increased slippage in tractors. Having said that, we are operating at 15 plus 2% other income on tractors, which should more or less compensate for that one. And the priority sector lending targets are very high for the entire industry, so we will have to be there in the tractor industry. On small commercial vehicle, yeah, again, the interest rates are around 18%, so there will be an increased slippage. But this is generally the quarter wherein the slippages come down in Q4, so we are expecting the slippages to be arrested in this quarter itself. Thank you. On the Karnataka, I think we have 13% of our microfinance book in Karnataka. 1% of that book is in the active district, which is there. We have degrown this book by about 4% quarter on quarter. But do you see any early signs of stress building up over there because of these new laws coming in? I think the collection efficiency in the Karnataka is down by 1%. That's the early stress. Okay. Okay. Do you see that coming down further with the law coming up and collections being restricted? See, this is Sridharan. The law we are talking about, we are not very sure. We don't have clear visibility. As for the latest discussion with the government is concerned, the government says that wherever there are regulated entities, the regulations will take care. They will not have any law impacting them. They will come very heavily on the unregulated entities. The proposed law may impose certain conditions on outsourcing collection activity or in ensuring that the customer protection standards are fully met. It's already part of the regulation. So we are still not sure what are the new regulation ordinance law that is being talked about. We are watching the space. Initially, there was some amount of discomfort. Now, I think things are slightly settling down in terms of the legislation on the ordinance front, but the space is to be watched. As far as the stress is concerned, I think it's in a manageable space. Maybe about 100 basis points reduction in the collection efficiency in a few pockets. I think it's manageable. Sure. And lastly, any outlook on the Gems and Jewellery portfolio? Are you seeing any early signs of stress over there? So we don't have any SMA one, two, or any SMA account on the Gems and Jewellery. Our book has not grown. You are aware of it. And we do working capital finance, and we have not seen any stress building up in this book. That's good to hear. Thanks. Thanks so much. Thank you. Next question is from the line of Abhishek Murarka from HSBC. Please go ahead. Yeah. Hi. Thank you. I have two questions. One for Mr. Sridharan, just to clarify, and one to Mr. Sriram. On MFI for the BFIL Plus Three customers, existing customers, are you giving repeat loans for the moment, or are they also not getting repeat loans? And in the quarter, out of the INR 1,700-odd crore provisions, how much provision have you made for MFI? Is it around INR 550 crores, give or take? We disclose the. Going back to the question on vehicles. So I think the specific question on provision, Indrajit, will give you the breakup. As far as the number of lenders are concerned, as of now, we deal most only on a very, very selective group of customers. So an existing customer having three other lenders, if there is an ability, because if you know, our overall limit is the lowest in the industry. We still do not lend more than INR 1.25 lac industry exposure. So we are very selective in lending, and the proportion of loans going to good customers in that segment also is low. Once the MFI regulations come, obviously, we will not be lending to that customer. The entire industry will move to Lender Plus Two now. Okay. But as of now, they are getting, if they are a good customer, they are getting a repeat loan. Oh, they are because that is part of the program. We have not stopped, but that's a very small number. It's not a substantial or significant number. Yeah. In terms of provisioning, we don't share business-wise provisions. We have given you slippages. Different businesses have their own provision coverage ratios, which we try to maintain. Bank as a whole, you would have seen we have maintained 70% PCR. BU level Net NPA as well as provisions, we don't share. Okay. Okay. No worries. On vehicles, for Q3 is generally quite strong for disbursements as well as for recovery, etc., so asset quality. Do you see that kind of trend or this INR 13,000-odd crore of disbursement in the quarter? That was just a bit of an aberration, and the segment is still going through a bit of consolidation, so it will come down. Just some commentary on growth and asset quality in the next maybe three to six months there would help. Q3 was good. Generally, Q3 is good, and the growth rate of vehicles, if you see the retail growth rate, has been in single digits except for two-wheeler. Not much is expected in the Q4 also. It will be in the similar lines. Commercial vehicle, it's expected to grow only with the GDP. Unless the GDP grows heavily over 6%, there may not be much of a growth in the commercial vehicle segment. Gone are those days when commercial vehicle was the trendsetter. Now, more or less, people buy with the work order only. So it will be as and when the GDP increases, there will be growth in the commercial vehicle sector. So more or less, in the next quarter, I think we are hoping for similar numbers, around INR 13,500 crores. And asset quality there? Again, Q4 is one of the best quarters, so we are keeping our fingers crossed. Done. Only very quick question on MFI. How's the disbursement trending? Given that forward flows have improved, the data that you shared, is disbursement going to pick up? And versus Q3, is it going to be higher? Or maybe January, what's the run rate? Some indication there would help. So I think, like I said, we want to be cautious about the disbursements, and I think we continue to remain a cautious trend. I think what is more important, I think focus on your good customers and your good centers. And that is where 85%-88% of our disbursement should be targeted. That's our philosophy. I think we are not looking at any number. I think what is important is to make sure that we service our customers well, and we are in the centers which are performing well and do the disbursements there. Right. But Sumant, just QoQ, it should improve, right? Given that there is an improvement in the 0 DPD bucket, etc. Yes, it should, but I don't want to give any number as of now because I want to continue to watch this space, how the Karnataka develops, how does it pass on to another state, how does UP behave. So I don't want to give any numbers or projection on the MFI business as of now. Fair enough. Fair enough. Thank you so much. Thank you. Thank you. Next question is from the line of Hardik Shah from ICICI Securities. Please go ahead. Yeah. Hi. Good evening, sir. Sir, just a few questions. First, on MFI or BFIL, do we also cross-sell any two-wheeler or personal loan or small CV to these customers? And if yes, what would be the exposure? So I think we don't do any CV personal loans on this segment. It's already an unsecured segment, so we don't do any unsecured exposure on this segment any further. We did try a scooter loan. We did about 2,000 scooter loans, but we continued. We did it as a pilot and stopped it because the delinquencies were high. Right. So there is no other exposure, right? I mean, there is no other retail product or any other exposure. We don't believe that we can do any other cross-sell into the exempt liabilities, which is we talked about INR 2,600 crores of book. Right. Sure. Secondly, sir, if you can also highlight the net NPA in MFI, right, that will help give us some direction in terms of the additional provisioning needed. You have a gross NPA of INR 2,400 crores. And if you can sort of quantify what is the PCR here or what is the net NPA here. So you know that our PCR overall is 70%. Like Indrajit said, we don't give product-specific NPAs on provision. So I think that is not something we give it in public domain. But I can tell you that it will be well provided and well covered. Sure. And lastly, Sridharan, if I look at the contingent provisions that we have right now, that is roughly around 4% of the MFI loans. And you have said that SMA-1 plus 2 is around 4%. So are we - I mean, are we sort of done in terms of whatever extra, whatever additional slippages that come through in fourth quarter? You will be providing those, but we may be - we may continue to carry these contingent provisions going ahead in FY 2026. Is that the way to think about this, or you would keep sort of, I mean, you would, there would be some change in this contingent stock? So I think it's too early to comment on whether we will use contingent. I've always said the bank should be adequately covered, and we will always be conservative on provisions and make sure that we have enough coverage to take care of any eventuality in our highly volatile businesses, for example, microfinance. I've always said that. I also feel that we also want to be prepared for the ECL part of the business. So I think given these two scenarios, we continue to believe that the bank should carry enough contingent provision to take care as they move forward. What it will be and whether we will use anything, I think it's too early. We will see how the flows happen in the MFI, how the business goes, and then we will take a call. Sure, sir. And lastly, sir, I think there was an exit of CFO. And of course, if you can, we have already disclosed that. If you can comment on any other attrition that you are seeing at the senior level, or if you want to sort of comment on that thing. So I think we have a very stable management team. If you look at it, I think over the period, a lot of old people have gone and new people have come in, whether it's the CTO, whether it's the CRO, whether it's the CCO. I think we've got a lot of new people, internal audit head. So I think we've always said that a good mix is always a good understanding of the business, and we get a new perspective on the business. Having said that, I think the HR head is here, and maybe he can comment on it. Hi. Thanks, Sumant. Actually, not much more to add than what he said. We had a very stable leadership right from 2008 to 2020 simply because of the age of the people. And at a particular time and point, almost seven, eight people retired at the same time, and we added a lot of new people. So there is a good blend of old and the new, more new now. And again, this year, I guess we'll have a couple of people retiring together. So we're already in the process of identifying people. We will not be having any position unfilled for any length of time. Our backfill and hiring for these positions continue, and we will be sorted on our top management talent at all times. Sure. Thank you and all the very best. Thank you very much. Next question is from the line of Subhranshu Mishra from PhillipCapital. Please go ahead. Hi. The first one is on credit cards. The gross NPA has increased up on a sequential basis. And I just wanted to understand the architecture of our ENR here. What percentage is transactors? How much is revolvers? And how much are the EMI proportions? If we can speak about the number of credit card customers who have two or more credit cards, three plus credit cards, and four plus credit cards. That's on the credit cards. The second one is on vehicle financing, especially the SCV, LCV, HCV. There's been commentary around asset quality write-off and slowdown here. How do we see this market, and what has been our experience, and what do we think of the growth levels in these three specific segments going forward in the next fiscal year? For a minute, LCV, M&HCV? Used M&HCV, the entire M&HCV and LCV. Small commercial vehicle, light commercial vehicle, and medium and heavy commercial vehicles. Thanks. What is the question? The question is, how do you see the flows? The flows that you see in fiscal 2026, and what do we think of the asset quality write-offs that are being commented about by the rest of the players in the market? The commercial vehicle is behaving well. I would say the commercial vehicle portfolio has been improving, and I think it will continue to improve. Light commercial vehicle, as people give more towards the FTB or the new-to credit, there will be some increased slippage, but which will be compensated by the higher rate of interest. Small commercial vehicle, again, the same way, nearly 50%-60% are new-to credit, wherein quite a bit of default occurs. But LGD is somewhere around 45%, and we hope when a customer in a small commercial vehicle is slowly improved to buy a light commercial vehicle and a heavy commercial vehicle. So overall, the ROA of the product is also good, and it gives you a good customer base. So having said that, SCV and LCV are products which we have to be there. And the credit card question? Yeah. So you know that our unsecured business, including personal loan, is a very small portion. It's only 6% of our book. We've always said that because we have microfinance, we will keep it at 6%. Around 3%-3.5% is credit card, and 2.5% is personal loans on that segment. Our credit card GNPA are elevated because you know the industry issues which are coming in. And I think the gross flows are elevated as of now. And if you look at the retail flows, I think most of it is coming from the credit card businesses, the slippages. Having said that, I believe that we have 24% of our base as revolvers in the 40%? Huh? 40%. No, 24% and 16% are LOP or EMI customers. So 40% of the base either is revolving or are LOP-related customers. On the second question, part of your question, how many customers are with three to four, I think I don't have the ready-made answer. They may be in the data pack, but I don't recall that answer. So I think we will come back to you later on this answer. Just one question, if I can squeeze in. What is the percentage of open market sourcing in credit cards? What do you mean by open market sourcing, if you can? Based not from our own liability or asset customers. So I think it's very difficult to give an answer on this. I think our focus is to focus on our liability base. But I think we are also very, very stringent on our parameters or on internal customers as to what we want to source. I think most of what we source in the open market are more salaried customers because we want to get the salary relationships out here, and what we get on our customer base are salaried and self-employed. The mixes, I think we cannot share right now. Sure. Thanks. Thank you very much, ladies and gentlemen. We'll take that as a last question. I now hand the conference over to Sridharan for closing comments. So thank you for joining the call. I think the results were delayed this time, and we wanted to be—we wanted to watch the other players getting the results before we announced it. I think we also wanted to see how the MFIN and the regulations evolve around the microfinance industry. I think me and Indrajit are available for any questions and post the call, any dialogue that you may want to have with us. Thank you so much for your time. Thank you very much. On behalf of IndusInd Bank Ltd, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.