Ladies and gentlemen, welcome to IndusInd Bank Limited Q2 FY 2026 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 the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Anand, MD and CEO, IndusInd Bank. Thank you and over to you, sir. Thank you, Michelle. Good evening and thank you for joining us today. I understand that today is a long day for all of you, and I appreciate you taking time for us, especially also during the festive season. It is indeed a privilege to address you for the first time as Managing Director and CEO of IndusInd Bank. I'm also joined by our CFO, Viral Damania, and the other management team members of the bank. Let me begin with a quick view on the macro. The global uncertainties are persisting, driven by tariff-related disruptions and geopolitical tensions. In contrast, India continues to demonstrate resilience, supported by its domestic-oriented growth model. While the pace of growth has moderated over the last 12 - 18 months, underlying fundamentals remain strong. Recent policy measures, such as income tax rationalization, GST rate cuts, and the accommodative steps by RBI, are expected to support consumption and investment. A strong monsoon in rural momentum further strengthens this outlook. I remain optimistic that these developments will bolster economic momentum. We will work towards positioning IndusInd Bank to participate in the recovery as it unfolds. The bank has shown strong resilience during recent periods of turbulence. As I take on this role, my focus is on realizing the full potential of the bank by leveraging our capabilities, scaling our strengths, and improving in areas where we can do better and unlock new areas of value creation. We will now cover key highlights for Q2 FY 2026 and then go into business-specific progress and financial performance. During the quarter, we consolidated our balance sheet by letting go of wholesale deposits and cautious disbursements on microfinance. Our retail deposits remain steady, while wholesale deposits did grow 3% QoQ. Share of retail deposits, as per LCR, improved to 47.3% versus 46.5% QoQ. On advances, vehicle disbursements were impacted with deferment of purchases due to GST changes last quarter. We remain cautious on microfinance disbursements. The corporate and retail disbursements were steady. Asset quality, excluding microfinance, continues to hold steady with sequential improvement in both gross and net slippages across vehicle, other retail, and corporate segments. Microfinance slippages remain elevated during the quarter, and we undertook accelerated provisions to prudently rationalize the outstanding NPA book. Our GNPA and net NPA thus have improved QoQ to 3.6% and 1.04%, respectively. We have made progress on rebuilding our leadership team. This quarter saw the onboarding of senior key leaders, including a new CFO, Legal Counsel, Head Internal Audit, and Head Business Transformation, each bringing fresh perspective and deep expertise. We expect a few more senior leaders to join in the coming months, further enhancing our strategic depth and execution capabilities. As this team comes together, we are confident it will play a transformative role in shaping the future of the bank. Our core pre-provision operating profit at INR 1,940 crores remains stable QoQ in spite of lower disbursements in vehicle and microfinance. The accelerated provision on microfinance has resulted in a net loss of INR 437 crores for the quarter. We have written off INR 1,579 crores of microfinance loans and increased coverage on the residual microfinance NPAs. We believe this is a prudent measure and strengthens the balance sheet. The bank has a healthy capital adequacy with CET1 of 15.88%, which will further be supported by the recent announcements on risk rate reductions. I'll now take you through highlights on individual businesses. The vehicle finance business saw dip in disbursements between GST cut announcements till the implementation as customers deferred their purchases. This resulted in disbursements for Q2 dropping by 4% YoY and no sequential loan growth. Disbursements, however, have picked up significantly post 22nd September, and we see the traction continuing this quarter as well. Purchases are further aided by the ongoing festive season as well. The asset quality trends continue to be benign, with gross slippages reducing QoQ and YoY. The bank has chosen to in-house collections instead of selling to ARCs. This has resulted in improved recoveries, and thus net slippage has improved more than gross slippages. Gross slippages have been YoY stable or better in commercial vehicles, passenger vehicles, construction equipment, and three-wheelers. The tractors and two-wheelers saw YoY higher gross slippage, but those two have moderated QoQ. As we move into the second half of the year, we expect the demand momentum seen in September to continue, supported by the festive season, GST 2.2% impact, strong monsoon and kharif harvest, and a broader pickup in economic activity. I believe the Vehicle finance business is a key pillar for the bank. The business is well managed and is maintaining its market leadership with significant market shares across leading OEMs and navigating asset quality cycles efficiently. The business will be further strengthened by investing in its distribution and leveraging digital capabilities. The business should also see support from the long-overdue auto upcycle. We continue to be cautious on the microfinance business and have taken several steps which would help the bank weather subsequent cycles. Some of the steps include conducting income assessment of every loan, additional Voter ID checks, and further field verifications over and above the conservative bank rule engine for underwriting approvals. The bank has also strengthened the internal audit function for better portfolio coverage and identifying any gaps in controls and processes, ensuring zero tolerance for wrong practices. We have carved out a dedicated collections team to focus exclusively on the 90+ DPD customers. We have also started availing the credit guarantee scheme, CGFMU, coverage for disbursements done in FY 2026, and it now covers 22% of the standard book as on September 2025. This coverage will continue to grow in the coming quarters. These steps should help in normalizing gross slippage, which continued to be elevated in Q2 as well. The 31- 90 days past due book was 3.2% in September 2025 versus 2.2% in June 2025. The cautious stance, coupled with seasonally weaker demand, resulted in the loan book contracting by 25% QOQ. We continue to scale the Bharat Super Store Shop, the merchant acquiring business, to leverage our rural presence. Our merchant loan book now is INR 7,262 crores, spread across 636,000 borrowers, growing 25% YoY. The CGTSME guarantee covers 63% of this book. The share of the non-MFI book now stands at 25% versus 15% YoY, reflecting continued diversification. Overall, we believe the tighter norms may result in near-term impact on disbursements, but they should, along with the credit guarantee, help reduce the extreme swings in credit costs through the cycle. Microfinance will continue to be an integral part of the bank's approach, especially meeting its financial inclusion and priority sector ambitions. We have resumed disbursements in the corporate bank, which were tactically slowed in the earlier couple of quarters for efficient balance sheet management. Within the corporate bank, the focus remains on granular mid and small corporates with better risk-adjusted returns and being selective in the large corporate space. The proportion of A and above rated customers and the weighted average rating have been steady QoQ at 77% and 2.6, respectively. The asset quality remains healthy with negligible net slippage for the quarter. The Gems & Jewellery business continues to maintain robust collections with no SMA1 or SMA2 customers as we speak. Overall, I believe the bank's corporate franchise has become robust over the last few years. We will invest in building coverage and capabilities, particularly in the mid and small corporates. The transaction banking offerings have significant scope for penetration. The mobilization of low-cost LCR efficient liabilities, too, will be an area of focus as we move forward. Our other retail assets grew 13% YoY. We continue to scale our home loan book with outstandings now crossing INR 5,500 crores, growing 84% YoY and 11% QoQ. LAP book is INR 12,581 crores, maintaining steady traction with 10% YoY and 1% QoQ growth. MSME book under business banking now stands at INR 18,195 crores, growing 1% QoQ. Credit card spends at INR 26,900 crores remain steady QoQ. Our market shares in credit card spends were 4.9% based on the latest available data. Asset quality across segments remains within a stable range. The traditional retail assets will be a key growth driver as we build a universal banking franchise. While the bank will continue to grow in its domains, vehicle finance and microfinance lending, we see huge opportunities to grow our retail asset businesses, not only to diversify the portfolio but also to support our liability franchise. The MSME space is a large opportunity for a bank of our size. We have a minuscule presence in home loans and can scale this up irrespective of the cost of funds disadvantage. The unsecured segments, too, are now poised for cyclical growth. We believe the retail segment will contribute meaningfully to our growth in the future. Coming to liabilities, we continue to optimize our deposit mix, exiting some of the non-LCR accretive wholesale and certificate of deposits while maintaining a healthy liquidity position. As a result, total deposits stood at INR 3,89,600 crores, declining 2% QoQ. Our retail deposits, as per LCR, remain stable during the quarter at INR 1,84,144 crores. Deposits of the combined Affluent and Non-Resident segments remain stable QoQ at INR 74,300 crores. The NRV now stands at INR 1,22,000 crores, growing 7% YoY. Our flagship digital platforms, Indie and Indie for Business, for retail, individual, and MSME clients, respectively, showed healthy user growth during the quarter. Indie app now has a registered base of over 5 million customers, and monthly active users grew 40% QoQ. INDIE for Business, with a registered base of 2.3 L MSME clients, saw monthly active growth of 122% QoQ. Both apps continue to show healthy rating on the Play Store and App Store. INDIE is rated 4.7 on the App Store, 4.4 on the Play Store. Indie for Business is rated 4.5 on the App Store and 4.4 on the Play Store. Cost of deposits for the quarter at 6.23% improved 21 basis points QoQ, largely driven by the savings account repricing. We further reduced our dependence on bulk sources, with certificate of deposits down 16% and borrowings at INR 45,350 crores down 13% QoQ. We maintained a healthy liquidity position during the quarter, with an average LCR of 132% and average surplus liquidity of INR 56,000 crores. As we know, the liability franchise is core for a sustainable, profitable business of any bank. IndusInd Bank has made considerable progress over the last few years. I will aim to accelerate the reutilization journey further, especially focusing on low-cost deposits. We will aim to enable the front line by streamlining processes, offering competitive products, and bringing the one-bank approach in delivery. I will now hand over to Viral to take you through the financial performance. Thanks, Rajiv, and a very good evening to everyone. At the outset, I would like to mention that the year-on-year comparison may not be appropriate given the adjustments that were carried out in the last couple of quarters. Hence, we will focus on sequential trends for a few quarters from year on. The financial performance of this quarter was impacted due to sharp reduction in the microfinance business and lack of treasury gains. The drop in NII, NIM, and other income, and the large increase in trade provisions are all attributable to these two factors. Barring this, the business has been stable, and we have had some offsets by improvement in cost of funds and as well as some containing on the operating expenses line. With that overview, let me now go through some of the details, starting with the balance sheet. Advances dropped 2% sequentially from quarter one, which is largely the drop in microfinance loans. Deposits dropped 1.9%, and of that, a 1.2% drop was solely from reduction in CDs, which we are looking to calibrate down. Our retail deposits, as per LCR perspective, have remained steady, and the CD ratio has been maintained at 84%. Borrowings have also been brought down by 13% quarter- on- quarter. With that, moving on to the P&L, net interest income for Q2 stood at INR 4,409 crores, and the quarter- on- quarter drop explained again by the lower microfinance loan portfolio. Adjusted for one-off recoveries in Q1, and we talked about that in the previous quarter, net interest margin was marginally lower at 3.32% versus 3.35% quarter- on- quarter. NIM was supported by a 26 basis reduction in cost of funds on the back of deposit rate cut actions taken earlier, and this was offset by the impact of lower asset yields due to corporate loan repricing and adverse loan mix. Our core fee income came in at INR 1,543 crores, which has actually grown 1% quarter- on- quarter. However, overall, non-interest income declined sequentially as the previous quarter had strong treasury and recovery gains. The operating expenses declined 5% quarter- on- quarter, driven by disciplined cost optimization across functions. As a result, core operating profit for the quarter at INR 1,940 crores has actually remained stable quarter- on- quarter. This then brings us to provisions and contingencies, and the increase of INR 896 crores that you see there on that line is entirely from incremental provisions on the microfinance book. As we had shared last quarter, we have seen higher slippages in this portfolio, so we did an accelerated write-off this quarter, and we have prudentially upped our PCR on this portfolio and the overall PCR for the bank. The GNP and NNP ratios are at 3.6 and 1.04, both of which have improved quarter- on- quarter, and overall PCR has also increased to 71.6% versus 70.2% in the previous quarter. In terms of asset quality, slippages, excluding microfinance, continue to hold steady, with net slippages improving to 0.36% versus 0.42% quarter- on- quarter. Elevated slippages in the microfinance segment kept overall gross and net slippages broadly unchanged at 0.76% and 0.63%, respectively. Gross slippages by key segments were vehicle finance was INR 694 crores, corporate INR 64 crores, other retail INR 697 crores, and microfinance INR 1,083 crores. The SMA1 and SMA2 book was at 26 basis versus 33 basis year- on- year. Net security receipts have declined to 17 basis points s versus 31 basis points year- on- year, and restructured advances have also declined to 8 bps versus 29 bps in the previous year. The accelerated provisioning and write-offs have, however, resulted in the net loss for the quarter at INR 437 crores. It is important to highlight that the bank continues to have very healthy capital adequacy and liquidity position with CET1 of 15.88% and CRR at 17.1%, and the LCR is at 132%. Let me now hand over back to Rajiv for his closing comments. Thanks, Viral. While it's just been a couple of months in the bank, my interactions with several teams across locations have been exciting. I believe this is a unique franchise. The bank has a large distribution network with presence across geographies, diverse customer segments, and the ability to serve a bulk of financial requirements of our customers. The bank also holds a leadership position in select businesses such as Vehicle finance, Gems & Jewellery, and microfinance. The corporate finance has steadily been growing without any asset quality issues. The bank has progressed on granularizing liabilities, and there is further scope of improvement as we move forward. Scaling up MSME and traditional retail assets are also large opportunity pools for the bank. We also need to fine-tune our delivery infrastructure of these products by streamlining processes, empowering channels, and investments in digital. The bank has a strong capital and liquidity position, providing us the flexibility to grow with confidence. Overall, our aim in the near term would be to build the growth momentum in areas of focus such as vehicle finance, retail, and profitable corporate businesses, and of course, retail deposit mobilization. Streamline the microfinance business to normalize slippage and pivot towards sequential growth, formalizing the leadership structure along with filling of gaps, if any, identifying new profit pools to build a more granular and less volatile franchise. We will come back to you with our medium-term strategy in the coming months. Thank you, and we are now open for questions and answers. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on the touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mahrukh Adajania from Nuvama. Please go ahead. Hello. Hi. Hi, Mahrukh. Hi. Welcome, Rajiv. Thank you. It's good to have you on the call. Just a couple of questions. Now that you've spent a few months, what is the rebalancing in the book you would like to do? Maybe in favor of a few assets, in favor of a few lending segments. Any such thoughts? I know you will share your detailed strategy at some point in time with us, but just wanted to get a sense of what kind of normalized margins would you be looking at in a one-year out or two-year out time period. Maruk, you know, from a rebalancing perspective, I think the two big engines of growth are our commercial vehicle business and microfinance. Having said that, and to some degree, our corporate lending business as well, I think our muscle on the MSME space is relatively weak, and I think that is a space that we are really looking to double down on. Two is, if you look at many of the traditional retail asset businesses, home loans, affordable housing, gold loans, agri-financing, etc., all these are currently subscaled, and these provide us huge opportunities for us to grow as we go forward, not just in terms of diversification, granularizing, and also meeting our PSL objectives. I think the first medium-term objective is to get to a 1% ROA, and I think that is what the aim will be. There are multiple levers for us to be able to do that. I think there is ample scope for us to reduce cost to assets. We need to get better productivity in the branches for us to be able to grow our liability franchise and reduce cost of funds as well. I think as we look to diversify our portfolio, we should be able to get to a different path to 1% from what IndusInd Bank has seen historically. Got it. What would be the time frame to reach 1% ROA? I think the exact time frame is too early to call, Mahrukh. I'm in the process of building a three-year plan along with the current team members and some of the new members who are joining us. Just give us a little bit of time, and we will give you more granularity as we go forward. Sure. In terms of credit costs, you did accelerated write-offs. Would it be the end of these accelerated write-offs, and would you see recovery in credit costs or lower write-offs going ahead? Would there be a substantial reduction in credit costs in the second half because your slippages seem to have stabilized? If microfinance improves, maybe they come down more. Hi, Viral. Let me try and answer that. Let's put this into two buckets. One is the accelerated write-off and credit costs that you see in the current quarter, and that's, as you mentioned, pertaining specifically to the microfinance portfolio. That brings us to a level of PCR which we are currently comfortable with, but we would continue to look at that pretty closely in the next couple of quarters. Yes, slippages have been high in the past couple of quarters. We do see early signs of that stabilizing, but this is an area we really have to watch here on for the next two quarters. It's kind of early to conclude that it'll indeed start improving, but that's really something we are looking at fairly closely. It's a portfolio we've calibrated down. We do think it should certainly start stabilizing and hopefully at some point start coming down as well. Got it. Thank you so much. Thanks a lot. Thank you. The next question is from the line of Harsh Modi from JPMorgan. Please go ahead. Hi, Rajiv. Thanks. The question here, I guess, that Mahrukh also asked, kind of how do we think about, is this the worst or we should brace ourselves for at least a couple more quarters of really tough numbers? How do we start forming any views for FY 2027 given the scale of challenges? I know you said you will have some detailed comments later on, but anything that you can help us with would be great. Thank you. I think, like I said, there are enough levers for us to be able to grow. I also mentioned the fact that the macro environment is also fairly benign for us to be able to grow across the various parts of our business. I think the levers are there, the ability is there, the intent is there. I think the key challenge really is to be able to ensure that we get our hands around the process controls, fill some of the management gaps as well, and be able to do all the right things as we go forward. I'm not in a great hurry to push the growth lever because I think it's important for us to first stabilize the platform before we are able to do that. I think it will just take a little bit more time. Right. Can I ask a question a slightly different way? If I think about, let's say, the costs as well as the write-offs, from my understanding of what Viral said right now, it seems there is a lot more to go in terms of write-offs. Even if we are at 70% PCR, there is a possibility that the bank may remain close to very limited profitability, if at all, for the rest of the year. Is that a fair assumption, given the scale of problems that you still need to manage and would rather try to clean it up in FY 2026 rather than push it out to 2027? No, I think that's too pessimistic an approach. I am not in that camp. I think, like I said, as we go forward, I do see growth in the books, and therefore, the income stream should be stronger, fee income should be stronger. Therefore, to that extent, I am not that pessimistic. Right. Sorry, if I could just push on that a bit, in terms of confidence of depositors, confidence of employees with a headline loss, what are the few steps you would have taken and you are taking to manage the fallout? Thank you. I think that's an important question. I think it's very important for us to communicate, which we are in the process of, both to customers as well as to our own employees, the fact that much of this loss has come from the accelerated provisioning side rather than anything that was damaging, like what we saw in March of 2025. The core PPOP is actually stable on a QoQ basis. NIMs are broadly stable. The book is broadly stable. That should give confidence, in addition to the fact that all our capital numbers continue to be very, very strong. I am very confident that we should be able to communicate this confidence to our employees as well as our customers. Great. Thank you. Thank you. We'll take the next question from the line of Rikin Shah from IIFL Capital. Please go ahead. Thanks, Rajiv. Just a few questions. The first one is, if you could just elaborate on the key hires that you have made after joining the bank and also flag what are the key vacant positions which are yet to be filled. That's number one. Secondly, the slippages even outside of MFI are still a tad elevated and even on an overall basis flattish QoQ. When do you expect this to start improving? A continuation on this is, while we have taken some accelerated write-offs in the quarter, the net NPA ratio is still 1% versus 0.6% a year ago. Wouldn't we still be required to continue with these accelerated write-offs to bring down the net NPA? That's the second. Third is on margin. Of course, we'll wait for your detailed outlook in terms of where the medium-term trends stabilize. Just a clarification that if there are no further rate cuts, should we think that margins are at the bottom and from here onwards, at least no further contraction should be expected? Let me take the first question. During the quarter, we saw Viral, our new CFO, joining, our new Head of Internal Audit, Pragati, our new Legal Counsel, Anand Vardhan, and our new Head of Business Transformation, Pankaj Sharma, have joined. They have been in the bank for anything between, let's say, 15, 20 days to about 30, 40 days. As we go forward, during the course of the next three months, a new Head of HR and a new Head of Digital are expected to join. In the medium term, there are a few other senior hires that we are looking at as well. Therefore, it's a steady stream of—oh, I'm sorry. We've also got a new Head of Marketing, Sharon, who's sitting here, who I forgot to mention. She has also joined because I think to the question, I think there is a lot that we can do from a brand perspective as well. I think she then becomes a critical hire for us as well. Some of these roles, some of these people are already on board. Some of them, I mean, it's like effectively like one or two people joining pretty much every month from here on. The last. Just on this, Rajiv, how about various business heads, both for the assets and liabilities? Are there still any gaps for the businesses? Yes, there are gaps on the business side as well. We are in the process of closing those out. There is nothing that I can update you on at this point in time. For the businesses, would this be broadly just if I? Both on the corporate and retail side, we are also hiring a new CEO for the Head of BFIL, who should be joining in November as well. Got it. In subsegments of our retail and corporate businesses, there are some new hires that we're looking at. Got it. The last question was around margins. I think the way to think about this is that while cost of funds has come down, the fact that disbursements on the microfinance side have been relatively muted has impacted yields on the asset side. That one lever itself, as we start to grow that business going forward, should ensure that margins begin to improve. As we recalibrate our overall portfolio, both on the retail and corporate side, I do believe that there are levers for us to improve, to certainly hold current margins, but certainly the intent is to improve margins as we go forward. Got it. Just the last one on that write-offs, which I mentioned, given that net NPA ratio is still high at 1% versus 0.6% a year ago. Do the write-offs continue, essentially? I think, as I mentioned earlier, there are two pieces to this. One is the accelerated write-offs. Obviously, that's not something you will keep seeing in the subsequent quarters. The delta that you see this quarter, INR 872 crores odd, is unlikely that you will see the same level of maintenance of provision or credit costs in the subsequent quarter. That will surely come down if you take the current quarter as a base. Okay, thank you. Thank you. The next question is from the line of M B Mahesh from Kotak Securities. Please go ahead. Say hi, Rajiv. Just two questions from my side. One, why was the accelerated provisions made for the quarter in MSME? Sorry, I didn't understand that question. In the sense you've made higher provisions this quarter, just trying to understand why was it made? Let me try and explain some of the drivers on that increase. It's basically got to do with the slippages that we've seen over the past couple of quarters. They have been elevated. We thought we really needed to up the coverage ratio on that portfolio. It's basically an accumulated impact of the fact that slippages have gone up over the past quarter. We see some of that translating into credit losses, and we've tried to improve the coverage ratio itself on this portfolio. It's the aggregated impact of these two that you see there. Okay. I think just one question. There is a constant news that keeps coming quite often in the media on some of the practices at the bank. Trying to understand how much of a change that you would need to make below the leadership level, looking at what you have seen in the organization in the last few months. No, no. Firstly, let's look at this at multiple levels. One is that for whatever happened within the bank, all the financial impact was taken in March 2025. Thereafter, investigations, etc., have happened. Some of it has moved into the legal world with law enforcement agencies, etc. That is a process that will continue as we go forward. Needless to say, the bank is fully cooperating with law enforcement agencies as we go forward. We have also, based on all the investigations that have been done, staff accountability has been established and staff action has been established. Some people have been asked to go, some people have been docked, etc. That is a process that is, by and large, being completed as well. Rajiv, it's fair to assume that there are no pending monetary-related impacts that are still yet to be identified? I think that's a fair comment. Okay. Perfect. Done. Thank you. Thank you. The next question is from the line of Piran Engineer from CLSA. Please go ahead. Yeah. Hi, team, and congrats, Rajiv and Viral, on your new role. Thank you. Just firstly, in this quarter, can you comment on, A, quantify what are the slippages in microfinance? B, just comment on corporate loans slippages also? Peran, we have given those details. Our vehicle is INR 694 crores gross slippage. Microfinance is INR 1,083 crores. Other retail is around INR 697 crores, and corporate is INR 64 crores. Okay, what was CV last quarter, if you don't mind? CV last quarter was 743, MFI 888, other retail 692, and corporate 245. Okay. Fair enough. Secondly, Rajiv, you mentioned that you would scale up home loans irrespective of the cost of funds disadvantage. What exactly, like why would we do that, firstly? What am I missing here? What you're missing is the absolute size of that business that we have. I think that business for us is about INR 5,000 crores, give or take. Therefore, given that size, we can actually pick and choose both in terms of the kind of customers we want to lend to and the price that we want to lend to. Obviously, we don't want to compete with other banks and NBFCs in the prime and super prime areas. I think, given the size of the business we have, there is ample opportunity for us to be able to grow profitably within this business, at least into the medium term. More importantly, it feeds into our liability franchise as well. That is probably even more important as far as I'm concerned. I'm sorry. Just to be clear, you're not referring to affordable housing here, you're referring to mass housing. Yes, I am. Honestly, how much does it really feed into the liability franchise? Because the guy who's taking a home loan from you, a regular fellow, not an affordable housing guy, already has a bank account. I think even at HDFC and all, they open new [SA accounts, but the money there is equal to one month of EMI, so like maybe INR 30,000, INR 40,000. Is that really a needle mover? I think when you look at it at an individual account basis, the way that you put it, it perhaps may not be material, but as it continues to grow and the bank has this particular customer on its portfolio, the ability to open the account improves. The ability to cross-sell other products improves quite dramatically, including, for example, our personal loan or credit card businesses as well. I think the fact that we can do more with that customer is unquestioned. Understood. Okay. Fair enough. That's it from my end. Thank you and wish you all the best. Thank you. Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead. Yes. Hi, Rajiv. Firstly, maybe the question was asked with respect to net NPA. During the last earnings call, it was indicated that we would want to get towards 5.6% odd, but maybe the new CEO would take a call. What would be your reading? Would you really want to get to that number or are you comfortable with 70% coverage and it not being necessary in this year? How are you looking at the overall net NPA number? No, I think we need to get, I am certainly not comfortable at 1 plus. I think we need to get to in the vicinity of 50 basis points- 60 basis points in the medium term. I think that we certainly need to get there. Okay. That call still continues even with you, so that we will get it in the medium term. Yes, that's correct. Even outside of microfinance, this INR 1,500 odd crores, the overall write-offs are like INR 2,500 odd crores. INR 1,000 odd crores run rate compared to maybe a relatively lower number. What is actually leading to that? Was it like the accelerated write-off in other segments as well? Still, we don't see GNPAs coming down despite this kind of write-offs in the other product segments. I think where you share in terms of the consumer banking GNPA, it's rising across the board. In fact, even like microfinance, after these write-offs, I've seen a rise. Maybe it's because of the book itself coming down, but other portfolios are not showing any improvement as such. I think if you look at, again, these two in comparison, the escalation or the increase has clearly been on the microfinance portfolio. On the others, it's not a substantial increase. We are watching that, and we really think that's probably going to stabilize in the next couple of quarters. It's not really a big concern at the moment, but something we are watching. Rajiv, with respect to your 1% ROA, where do you eventually see in terms of the potential of the franchise to deliver the fee to assets? This quarter, it's been off. We would tend to believe that microfinance, the processing fee out there, would have also impacted. There are a few more line items wherein the fee income is still down sequentially on a low base of first quarter. Where do you see fee to assets settling for the bank over the medium term? I think this is a franchise which I think can deliver fee to assets in the vicinity of about 1.5%. It may take a little bit of time, but I think there are enough levers for us to be able to get there. Okay. 1.5% or maybe over a period of time? Yes, 1.5% over a period of time. Got it. Okay. Thanks and all the best, and wish you all a very happy Diwali. Thank you, Kunal. Thank you. The next question is from the line of Chintan from Autonomous. Please go ahead. Hi. Thanks for taking my question. Can I check with you how the Gems & Jewellery book is doing? It's one of the areas that the U.S. tariff is impacting. Are you seeing signs of stress? The anecdotal hearings on that industry are not great, so that's why I wanted to check. Yeah. One is we have a preeminent position in the gem jewelry business. We've been in this business for many, many years. Two is we do business pretty much with the cream of the gem jewelry side of the business. Therefore, like I mentioned in my commentary as well, we have no SMA 1 and 2 as we speak. Okay. Kind of early signs, like what are you watching in this space to ensure that you stay on top of the credit risk there? There is an impact. It's very palpable. How do you kind of stay on top of this credit risk? This is like any other portfolio. We monitor this portfolio very, very closely. You know, we look at it both from the underwriters who look at it regularly. The coverage team looks at this regularly. I have met most of the very large promoters within this space to understand what they're doing and what is the impact on their businesses. They clearly understand that tariffs are an issue, but they too have mitigants for them to be able to manage this. One is to be able to move some of this manufacturing out of India. Two is to refocus some of their businesses away from the U.S., which is a large market for them, to other parts of the world, including India, where demand continues to be fairly strong. Three is to move to the higher carriage, which then is probably more profitable from their perspective as well. In the short term, yes, they are seeing pressure in terms of their overall businesses. These are businesses that have been around for many, many years, and these are players who have been in this business for generations. Okay. Thank you for that. Can I ask a second question? I mean, we've spoken about sustainable limbs and stuff in the call. Can I just check the 14 NIM movements seen in the quarter? Could you just go through the moving parts there? What caused that impact? There is something coming from microfinance, but if you can talk through the moving parts, that would be helpful. Got it. Maybe let me take that. There was this one-off recovery impact last quarter, so we first were to factor that. The impact of the microfinance portfolio going down, that's roughly 20 bps on the NIM. I think these are the two moving parts which you need to factor in. 20 from microfinance. What did you say the other one was? The one-off recovery. Basis points? In the first quarter, 14 basis points. Okay. Fine. 14 basis. The final question is, when I look at your LCR retail deposits, your end-of-period number is 2.1% different from your average number last quarter. We don't have this quarter's number yet. I'm just wondering, why should there be an end-of-period impact in the LCR retail deposit book? It's kind of normal to expect that in a corporate book. Just curious why such a big divergence between these two numbers. Oh, just a movement between the quarter. It's nothing. Depending on what kind of flows move in, move out during the quarter, given there was a bit of volatility in the last six months, sometimes some of the large, let's say, affluent customers move in, move out. That moves the averages a bit different way towards the versus the end period number. Otherwise, you're right. In normal course, the difference between period end and period average broadly remains the same. We have been a little bit in the exceptional situation last six months. Okay. Fair enough. Thank you. The final point, on the BFIR qualified audit report, what are the issues there that would lead to that qualified audit report? If you could just throw some light on that. You've covered some of the points, but I wanted to ask it as a direct question. Let me answer that. Some of those issues which you mentioned in the subsidiary entity in terms of quantum and scale really are not material. Also, these are all pertaining to past periods where there's no incremental financial impact. Whatever loss was there was booked in past periods. It's basically got to do with the nature of the business. Some of these are inherent. Yes, there is some improvement in internal controls that we need to see with that particular entity. I think it's very important to highlight that there's no new financial impact coming out from those issues. It's all the past. The only thing we look to do is enhance the controls and the governance framework specific to that subsidiary entity. Again, nothing really impacting the bank. Important to highlight that. Okay, thank you. Thank you. The next question is from the line of Jayant Karote from Access Capital. Please go ahead. Thank you for the opportunity. Just one bookkeeping question. The microfinance loan book is down 25% QoQ. That's almost like INR 7,000 crores. Could you just help us understand the flow, what got repaid, what has slipped, and the sort of numbers for the movement? That is the first thing. Yeah. Our opening book was INR 28,300 crores. We disbursed around INR 1,300 crores. We wrote off INR 1,580 crores, and there is a change of some provisioning. Repayments were around INR 6,700 crores for the last quarter. Understood. If I understand, disbursements over a year, how should we think about that over the next two quarters? Since the repayment amounts are going to be large, is it fair to assume this book comes off sharply now? Like I had mentioned earlier as well, we have tightened some of the underwriting standards that we have within this space. We have increased the scrutiny, so the approval rates, by definition, have dropped as well. That is somewhat reflecting in the lower disbursals. I do believe that as we get into the current quarter and as we get into the next quarter, disbursal amounts should be significantly higher than what we've been able to achieve in the current quarter. Thank you. The second question is on the vehicle book. You did mention in the opening remark that the festive uptick you're already seeing on vehicle. Should we assume the asset quality there is stable? That gives you the confidence to now pursue disbursement growth aggressively there? Yes, I think that's a fair comment. We do believe that asset quality should be stable, and we will certainly look to participate as demand comes back. Thank you. Thank you. The next question is from the line of Nitin Aggarwal from Motilal Oswal. Please go ahead. Yeah. Hi. Good afternoon, and thanks for the opportunity. I just have one clarification to ask Rajiv around the Gems & Jewellery business. When we speak to credit rating agencies, there is a fair bit of rating downgrades that have happened in that space. It is almost double-digit in proportion to the total rated borrowers that they have, clients that they have. Has there been any such events in our portfolio that you see? No, no. Okay. Sure. That's it from my side. Thank you so much. Thank you. Thank you. The next question is from the line of Himanshu Taluja from Aditya Birla Sunlife AMC Limited. Please go ahead. Hi, sir. Thanks for the opportunity. Just a couple of questions. Can you just comment around any of the segments where you are not comfortable to grow? Apart from vehicle, what could be your core segment of growth? The second question, can we see any further tightening or requirement towards increasing the provision coverage in any of the segments? Like this quarter, you took some higher provisioning on the microfinance. How do we expect this provisioning tightening in the coming quarters as well? Thirdly, if you have done anything from your understanding, if you can put any lumpy fee which is still and where can come and you can take as a calibrated approach? That's all. These are the three questions at my end. Thanks. Are we uncomfortable in any of the spaces? My answer is not really. Will we increase PCR as we go forward? I think our intent will always be to ensure that we are fortifying the balance sheet at all points in time based on multiple levers, including loss given default rates, etc. That is an ongoing process. I didn't understand the last question. Sir, the last question is around the fees. Any lumpy fee which can be calibrated where you have done any understanding according to you? Is there any nature in the fee income which can take certain calibration further? All the fee income is all franchise fees across both the retail and corporate side of the business. Our intent will be to grow this in a granular fashion. Okay. Sure. Sir, can we say along with this vehicle, microfinance, and the Gems & Jewellery will remain our key portfolios for the growth? What I have said was that these are domains that IndusInd Bank has built its capabilities and distinctiveness. I see no reason for us to sort of reduce our presence in these spaces. Having said that, I see huge opportunities in areas like the MSME sector, in the retail asset businesses for us to grow businesses significantly. Therefore, it is quite possible that as we get into the medium term, while some of the other businesses may grow much faster, the proportionality of these three businesses could potentially reduce. That, in a sense, will be the aim of the bank as we go forward to build a more diversified portfolio, less cyclical, and more predictable business as we go forward. Sure, thanks a lot. Thank you. Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Rajiv Anand for closing comments. Thank you and over to you, sir. Thank you. Thank you to each one of you. Let me also take this opportunity to wish each one of you and your families a very happy Diwali. Thank you, everyone. Thank you, members of the management. On behalf of IndusInd Bank, we would like to thank you for joining us, and you may now disconnect your lines. Thank you.