Please note that this conference is being recorded. I now hand the conference over to Mr. Ashok Vaswani, Managing Director and CEO of Kotak Mahindra Bank. Thank you, and over to you, sir. Thank you. Thank you so much, Operator. Good evening, everyone, and thank you so much for joining us. A lot has happened this quarter. Economic growth continues to be benign, as reflected in the RBI-estimated GDP growth number of 6.5% in Q1 FY2026 and for the full year FY2026. To promote growth, the RBI has infused liquidity and cut repo rates by a total of 100 basis points in the last six months. However, the cut in interest rates has not yet stimulated demand for bank credit. Generally speaking, while the corporate balance sheets are healthy, we are not yet seeing momentum in private capital expenditure. In addition, sales of commercial vehicles, passenger vehicles, and construction equipment have been soft. The pace of retail credit growth has come down. Rural India should fare better given the start of a good monsoon season. Finally, there is still a high level of uncertainty on the geopolitical arena and trade tariffs. All of the above, of course, has had an impact on the business. We have driven healthy growth of 14% and 15% in net advances and deposits, respectively, on a year-on-year basis. This continues to be in line with our philosophy of growing our advances in the range of one and a half to two times that of normal GDP growth. We continue to see granular growth, and our CASA ratio is comfortable at 40.9%. The repo rate cuts, combined with change in product mix, offset by reduction in deposit rates, have impacted NIM. The actual reduction is affected by the timing of the transmission of rate cut to the floating rate asset book, about 60% of our total book, and the deposit books. Unless there are further rate cuts, we expect the NIM to stabilize over the year. On credit costs, MFI credit costs were a significant contributor to the overall credit cost increase. However, it appears to have peaked and is expected to show a declining trend in the coming quarters. We have started cautiously stepping back into fresh disbursements, given the declining trend in incremental slippages. The credit costs in the credit card portfolio continue to plateau, as we have highlighted earlier, and we should start seeing decline in the second half of the year. Credit cards fulfill a very important need for our target customers, and we have launched new products this quarter, namely Solitaire and Kotak Indigo, to cater to our customers' needs. The credit costs in the personal loan portfolio have also stabilized from Q4. Strategically, this is part of our core proposition, and we are committed to grow this book. However, we have seen stress build-up in the retail CD segment, and we have been taking action in line for our new underwriting. We will continue to be cautious in this segment. This quarter also reflects the usual seasonal impact of the rural portfolio. Credit costs for this quarter over last quarter were also affected by lower recoveries from the legacy corporate customer book. A key reason that we were able to deliver this kind of growth, despite the macro, is due to our strategy to focus on the customer. We have made good progress as regards key customer segments with reference to product proposition and technology. Our combined SME book continues to grow strongly as we focus on the holistic wallet of the customer. We continue to invest in our FIN platform as well as our mobile banking app. We have recently launched capability that allows a small SME customer to track both personal and business accounts in the same app, which is being highly appreciated by our customers. We have launched a special proposition for the affluent customers, Solitaire. Solitaire offers to the affluent customers products manufactured from across the group, like investments, protection, credit card, personal loan, business loans, all on a pre-approved basis. This proposition has landed well in the marketplace and is enabling acquisition of quality customers. Our private banking segment continues to report healthy growth in AUMs. Our proposition for Core India, 811, came back strongly this quarter. 811 allows us to acquire customers at scale, gives us valuable granular low-cost deposits, and an opportunity to cross-sell various other products. Customer migration to the new dedicated 811 app is progressing well. We will continue to invest in propositions for selected customer segments. Strategically, our conglomerate structure allows us to capture opportunities as new trends emerge in financial services. For example, with savers becoming investors, our asset management business continues to demonstrate very strong performance with a 25% growth in assets under management. Similarly, we saw an increase in market share in both the cash market and derivative market in Kotak Securities. With corporate spending to tap capital markets, we see a very healthy pipeline in our investment bank, or KMCC. Overall, our book value per share grew 17% on a YoY basis to INR 829. It has been a busy quarter with a lot of significant macroeconomic and geopolitical turbulence. What I feel good about is the demonstrable progress that we continue to make in the execution of our strategy. Now, I'll hand it over to Devang to take you through the specifics of this quarter. Thank you, Ashok. And good evening, friends. Before I start detailing the performance, it is important to recognize three significant areas impacting standalone bank performance for quarter one, especially when you are comparing on a YoY basis. First, NIM. NIM for Q1 2025 was 5.02%, which has reduced to 4.65% in current quarter. It is largely on account of Aditi's reduction in repo rate over last year. This would mean even at a 14% average advances growth, NII increase is restricted to 6%. Second, other income and costs. We had embargo for most of the last year, which impacted onboarding of new customers in 811 products and no issuance of new credit cards. As we restart both of these businesses, post-listing the embargo, both income and costs related to these products, new acquisitions will start flowing over the remaining year. Last but not the least, the credit costs. As you are well aware, stress on MFI sector started reflecting in books from Q3 of last year, which continued in Q4 and has now peaked in Q1 of 2026. Q1 '25, therefore, had a negligible credit cost in MFI, which has now full impact in the current quarter. With this backdrop, let me start with some more details on the bank standalone performance first. The bank balance sheet grew 14% YoY, with net advances growing also at 14%. Share of unsecured advances reduced from 11.6% to 9.7% during the year as bank tightened the underwriting norms, especially for unsecured business. Total deposits grew 15% YoY, with current account and fixed rate SAR growing at 16% and 9% YoY, respectively. CASA ratio stood at 40.9% at 30th June. Bank continues to maintain healthy CD ratio at 86.7% at 30th June, and bank capital adequacy remains overall at 23%, with CET1 itself about 21.8%. Bank ended the quarter with the PAT of INR 3,282 crore, down by 7% YoY, largely due to increasing credit costs, while operating profit is up by 6% YoY. Q4 PAT of the bank had one-off credit income items, and the PAT excluding the same was INR 3,466 crore, as explained on page 8 of our investor presentation. NIM for the quarter, 4.65, QoQ lower by 35-ish, largely on account of reduction in the yield in floating rate book and lower share of unsecured advances, which were partly set off by reduction in the deposit rates. Besides this, as highlighted during Q4, NIM for Q4 had a positive impact due to number of days computation. As deposits start getting repriced, NIM is expected to stabilize during the later half of the year. Fees and services income got impacted by lower fees on credit cards and lower deal-based income. Operating cost of the bank at INR 4,775 crore grew 6% YoY, while we continue to invest in technology, and technology spends for the quarter around 13.5% of the total effort. We are seeing benefit of tech spend in form of efficiency in payroll costs. However, the retirement costs saw increase due to reduction in the interest rates. This quarter also saw higher marketing spend on restart of 811 campaign. Gross NPA at 30th June is 1.48%, with net NPA 0.34%, with provision coverage ratio at 77%. Slippage for Q1 increased to INR 1,812 crore versus INR 1,488 crore in Q4, with credit costs for current quarter at 90 basis points. Overall, sequential quarter increase in slippage and credit costs is mainly due to microfinance business and stress in retail commercial vehicle and seasonal impact in rural segment. We remain cautious on retail commercial vehicle segment. Credit costs and slippage for microfinance business has peaked during the quarter. Stress in personal loan and credit card also has stabilized. Last quarter, there were higher recoveries in secure business from two corporate accounts compared to current quarter. Overall, bank's performance for quarter got impacted by margin compression and higher credit costs. Coming to consolidated performance, Q1 consolidated profit stood at INR 4,472 crore. We consolidated net worth at just under INR 1,65,000 crore and book value per share at INR 829, which grew 17% YoY. Contribution of the bank and other lending-related entities in Q1 in consolidated profit was 74%. As you would recall, Q4 2025 consolidated results included full year mark-to-market gain of INR 411 crore on alignment of RBI direction on valuation of investments during Q4, which for the current quarter is INR 204 crore in respect of subsidiary investments. In addition to the above gain, which has been taken through P&L, post-fixed gain of almost INR 3,000 crore in respect of investment under AFS category for the bank has been accounted directly in the net worth. So this INR 2,977 crore, INR 3,000 crore post-fixed profit has not gone through P&L. It has been accounted directly in the net worth. Cumulative post-fixed gain accounted in the net worth for such investments stood at INR 7,244 crore. Our consolidated customer assets are at INR 5,57,000 crore, which is 13% higher YoY. AUM managed by group stands at INR 7,50,000 crore, which grew by 18% compared to June 2024. Our capital adequacy continued to remain healthy at the group level at 23.7%, with CT1 itself 22.7%. ROE at consolidated level was 11.30% for Q1 and ROA at 2.03% for Q1 2026. Coming to some specific performance of subsidiaries, Kotak Securities recorded profit of INR 465 crore, up 16% YoY. This includes mark-to-market gain of INR 86 crore. Cash market share of Kotak Securities improved to 10.1%, with overall market share now at 12.8%. Kotak AMC and Trustee Company recorded profit of INR 326 crore, up 86% YoY, with a 24% YoY increase in the equity average AUM to INR 3,32,638 crore. Kotak AMC and Trustee Company profits include mark-to-market gain of INR 83 crore for Q1. Kotak Life ended the quarter with a PAT of INR 327 crore, up 88% YoY due to higher realized gain on sale of investments. Kotak Life continues to maintain solvency ratio of 2.4x as against the regulatory requirement of 1.5x. Kotak Prime customers' assets grew to INR 41,469 crore, with YoY growth at 16%. PAT for Q1 for Kotak Prime was INR 272 crore, up 17%. Kotak Alternate Assets recorded Q1 profit of INR 59 crore on back of higher distribution income from investments in AIFs. With this, I hand over to Shanti for business updates. Thank you, Devang. As Devang had mentioned, the bank's net advances grew 14% YoY and 4% QoQ, while customer assets, including credit substitutes, grew by 30% YoY and 3% QoQ. Deposits grew 15% YoY and 3% on a quarter-on-quarter basis. I will start with the highlights on assets. I just wanted to say that at a macro level, we have seen an overall slowdown on urban consumption, which has impacted certain areas. Consumer asset growth was primarily led by secured businesses, such as mortgages. Mortgage loans, comprising home loan and BLAC, grew 90% YoY at the back of a strong Q1. In home loans, there is irrational and highly competitive pricing. However, we continue to focus on home loans as it helps us build a strong long-term relationship with our customers and helps increase the wallet share of our customers, particularly in the after-market. The land market continues to be strong. We have always been a strong player given our strength in the self-employment sector. In mortgages, we upgraded our tech platform, which resulted in better transparency and customer experience. Quality of the mortgage books stayed good. Thus, we continue to support our growth focus on these pieces. Business banking. There is strong demand for working capital in the small business banking segment across sectors, including food processing, light engineering, goods manufacturing, renewable energy, etc. Our secure business banking, comprising of small SMEs, continues to see good growth at 18% YoY. Our portfolio metrics continue to perform well across the industry in various geographies. In this business, we are able to serve our customers across their financial and non-financial needs, both business as well as individual. This business is largely around our branches and will continue to be a key focus area. In the unsecured business loan segment, we continue to grow, and the book is overall stable at the portfolio level currently. Personal loans. Personal loans is a key segment and a key part of our retail unsecured portfolio. This includes the portfolio acquired from Kandicharted last year. Our organic. Personal loan disbursement maintained momentum driven by salaried customer segment and digital acquisition. From a risk standpoint, we have seen stabilization in the trend of loan and collection efficiency. We continue to follow a granular growth approach, emphasizing credit quality, focusing on digital origination and processing, and optimal ticket sizes. The acquired portfolio is being managed actively and so far has performed as ended such. Let me turn to credit cards. We reimbursed on credit card issuances post-embargo last year. The trajectory has been a little slower than the ended such. However, we believe this is likely to ramp up over the next few quarters. During the quarter, we also implemented a one-time cleanup on blocked accounts. These are accounts which become inactive due to either 30 days or a year for existing cards for operational reasons. None of these cards were then active. This led to a drop in market share on cards this quarter. During the quarter, as Ashok had said, we launched new credit cards, Solitaire and Indigo, catering to the affluent segment. Credit card continues to be a core pillar of our affluent customer proposition and unsecured retail strategy. We will continue to focus on the acquisition momentum in Solitaire, Indigo, and other cards, and we are well positioned to drive traction. The delinquencies in the cards portfolio have flattered, with floor rates stabilizing in the current quarter. We continue to strengthen our risk management and monitoring framework in cards. Let's move to commercial assets, construction equipment, and commercial vehicles. For Q1, it was 26. Construction equipment industry sales actually degrew by 4% YoY on account of low retail buying, owing to tighter state government cash flows and early monsoon in many states. In line with this, our disbursements were also lower this quarter. We, however, continue to maintain our market position and remain a meaningful player in this industry. This is expected to pick up post-monsoon and during the upcoming festive season. For Q1, it was 26. Commercial vehicle industry has, however, degrew by 18%, and growth has remained flat-ish YoY. Goods vehicle segment degrew by 4%, majorly on account of subdued economic activity and negative demand-supply equilibrium. We have been witnessing a YoY negative growth in goods segment for close to two years now. Passenger segment, however, continues to grow at 22% YoY. In view of the overall economic environment sectoral trend, the collection environment has been challenging, especially at the lower end of the retail segment. We have highlighted this in the last two quarters, and the flow in the retail commercial segment has been hard. We have just moderated our disbursements, especially in the retail segment. Would, however, like to mention that this is an important segment for us. Between construction equipment, commercial vehicles, and the working capital to that segment, it's almost 10% of our portfolio and has generated good ROE for us. The overall slower macro is impacting the micro, but we are dynamically managing the stress and the collection scenario. We will continue to focus on building a business in relevant customer support through calibrated risk intervention while keeping a cautious stance on certain segments like retail commercial vehicles. Tractor Finance. Tractor industry witnessed 9% YoY growth in Q1, driven by favorable conditions, including good monsoons, improved annual yields, and lower inflation. We have seen higher disbursements and have maintained our leadership position in this segment. Q1 are at similar levels as compared to last year. However, due being a demand cycle month, credit costs were slightly elevated, leaving me the previous quarter. With the above-normal monsoon forecast and expectation of a good hurry crop, we expect improved cash flows in the second half of this year. Micro credit. We expect microfinance industry to see a gradual recovery in FY2026, barring any unforeseen event-based risks. The growth in the industry is expected to pick up in the second half. The credit costs are expected to remain elevated in the first half of the industry. Our retail microcredit books degrew by 12% QoQ due to higher repayments versus disbursements. We have seen some pickup in the disbursements in June and expect the trend to continue. The early signs of respective delinquencies are encouraging for the book originated through risk profile underwriting. There has also been some improvement in the hard asset management. As we have said earlier, we think microfinance trends have peaked in this quarter, and we expect it to be stable and hopefully better in the second half of the year. The merger of BFS and Sonata Finance is currently underway and is expected to be completed by Q2, FY2026. It will enable the bank to create an integrated franchise with a national footprint. Agri SME. The agri SME books maintain a healthy growth momentum with a QoQ growth of 4%, led by continued focus on entity sourcing. Quality of the portfolio continues to remain stable. This will continue to remain a focus area for us. I will now take you through the highlights of the wholesale business. This quarter, our wholesale banking assets, along with credit substitutes, grew 13% YoY and 6% QoQ. A large part of the growth has come through our granular segment of SME and mid-market. This quarter, select accounts within SME portfolio were migrated to other verticals of the corporate bank to ensure that these customers are served appropriately through the right business vertical. Due to this migration, current quarters are not strictly comparable to that prior period. Advances from the rest of the wholesale bank grew largely from working capital loans and trade assets across customer segments. Advances from GIFT City also showed a strong quarter. Of the various customer segments, like I mentioned, we continue to scale up mid-market at a fast pace. Again, growth was accelerated due to onboarding new clients, and this quarter, the entire growth in this book has come from working capital and flow-based business. Portfolio has remained robust, and we will continue to scale this business. Pricing continues to be a challenge in the large corporates and longer-term loans, and we have seen large corporates raise money from the capital market. Our strategy in the larger corporates is more flow-led businesses, including trade, transaction banking, and deeper penetration into business. Let me now turn to liabilities. As of June 25, our average deposits grew 13% YoY and 5% QoQ, and CASA ratio stood at 49%. Our fixed-rate savings grew at 9% YoY and 2% QoQ. Our continued efforts to capture the core mass affluent and affluent customers through abundant offerings, omnichannel customer engagement, enhanced digital platforms, supported by physical resources on field, have resulted in better quality customer acquisition and deepening existing relationships. This helps us to increase the value for customers, which led to an improved CASA balance. This quarter, we launched Hosrahe Tohu Jayaga brand campaign, which commenced in February 25, which was very well received by the audience, and our point score jumped by 6 percentage points to 54% in June 25, thus increasing awareness for our various customer categories. In line with our strategic focus on deepening relationships, as Ashok had mentioned, the bank launched Quarter Solidarity, a deep-focused banking program tailored to meet the financial, travel, and lifestyle aspirations of our affluent customers. The initial responses have been very encouraging. Our core proposition of savings with Active Money helped us grow our customer deposits. Active Money grew 25% YOY during this quarter. Post-lifting of the embargo, 811 has started acquiring customers with a revamped and superior product. This has led to better quality customers and value. The new revamped 811 app and platform has seen significantly higher engagement across transactions, products, and crosses. The Quarter 811 will continue to be an integral part of our strategy to acquire and serve core. Sorry to interrupt, ma'am. We have lost the audio from your end. What was that? Ma'am, we have lost the audio from your end. Can you hear me? What could you hear me? Can you hear me now? Yes, we can hear you now. Core is the word that I heard last. Core. You're talking about 811? Did you hear the 811? Yes, ma'am. Okay. Our core proposition of Active Money helped us grow our customer deposits. Active Money grew by 23% during the quarter. Post-lifting of the embargo, Quarter 811 has started acquiring customers with a revamped and superior product. This has led to better quality customers and value. The new revamped 811 app and platform has seen significantly higher engagement across transactions, products, and cross-buying. Quarter 811 will be an integral part of our strategy to acquire and serve core customers of India. Let me now turn to current accounts. Current account balance is for the. 13% YOY. On the consumer side, in the self-employed segment, we saw positive traction on NTB with much better value accretion. Continues to have strength in the self-employed base. Our vendor engines on SME business banking and labs are strong enablers for retail cards. On the wholesale side, our focus on garnering greater share of customer collections and payment flows has resulted in strong growth in customer throughput and liability balances. Growth has come from both granular customers and deals, including escrow and dividend deals. From a strategic perspective, our liability strategy overall is focused across consumption-led, investment-led, and asset-led liability. Extra custody flows, however, remain subdued this quarter, primarily due to net selling by FPI and a muted IPO market. In the domestic market, we continue to strengthen penetration into institutional customers and added customers in the insurance segment. Additionally, we are now operational on a global custody from GIFT branch and have started onboarding clients as a global custodian. Our term deposits grew at 20% YOY and 7% QOQ. To summarize, we will continue on liabilities to focus on our key segments for savings, growth, and balance between savings, active money, and term deposits in a granular manner. Overall, we have seen reasonable growth in both assets and liabilities, and we remain focused on growing both the segments based on quality acquisition, deepening customer friendship, enhanced customer experience, and cutting-edge digital platform. I will now request the operator to begin the Q&A session. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the attached phone. 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. Our first question comes from the line of Kunal Shah from Citig roup. Please go ahead. Yeah. So firstly, particularly on the asset quality side, you indicated that the incremental slippages and credit costs coming in from MFI, retail CV, as well as some seasonal stress in rural. If you can quantify with respect to MFI, given that the portfolio is maybe at least last quarter was closer to INR 6,700 crore, would it have meant that almost like 5%-7% of that would have been the credit cost on that? Because ideally, when we look at it like last time, INR 900 crore of credit cost also had the impact of INR 300 crore on increasing provisioning coverage from 73% to 78%. Ideally, when we look at like-to-like increase, seems to be quite high. Would MFI be such a high portion? I think you're right. MFI continues to be, and I think as we have guided last quarter also that we expect, look at this way. The MFI stress started building and reflecting in the books from the Q3 of last year, right? Clearly, the gross NPA, which sort of flowed during Q3, Q4. Given the provisioning norms of 75%, 25%, I think all accumulated towards the Q1 hit, which has resulted in a higher credit cost for the quarter. That is the reason it has happened. The Karnataka issue, which happened during the January, February month, also resulted in additional stress, which sort of also reflected in this quarter result as the additional credit cost. If you can quantify the number of slippage, I mean, the amount of slippage from MFI, that would be really helpful. Maybe you generally don't do that, but given that it's quite high. Particularly MFI slippages would be helpful, yeah. I think you rightly said. Generally, we don't do that, so we would like to keep it that way. I think it is one of the key reasons, besides, as we said, the CV retail. But I think the important point, as Ashok and Shanti also mentioned, it is sort of sliding down, and it has peaked during this quarter now. Going forward, it will only sort of start tapering off. Okay. Secondly, on margins. If you can highlight in terms of maybe the reported cost, what is the kind of reset period and how much of the rate cuts in April and June has been passed on? Even on cost of fund side, when we look at it, it is not declining much adjusting for the SAR benefit. We have cut the SAR, and if you look at it like on 25%, in fact, that is higher than the overall cost of fund decline. Not really sure in terms of we have not seen any cost of deposit benefit getting reflected in the first quarter, even except for SAR. Yeah. I think you are right. If you look at the average SAR cost, which we have mentioned in the EU, which is around for the Q1, is about 3.25%. As you know, now we have aligned the SAR rate finally to 2.5%. Clearly, the SAR cut, which we have done over a period of various months and more, latest one in the month of June, will obviously flow through in the Q2. Clearly, directionally, the SAR portfolio, we will be paying 2.5% interest, which the average cost of that in Q1 was 3.25%. You can easily see 0.75% reduction coming and flowing through in the Q2. That is one part. Second part, what you are saying is right. In terms of the reported benefit, which transfers to the customer, it happens on the interest reset date, which happens on a fortnightly basis as the loans get repriced, and that flows over the time. I think what we are saying, basically, that while the hit on the repo on the earning asset is upfront, I think with some of these cost reductions, as well as the CRR cut, which will also start kicking in from September, it will effectively even out over three to four quarters. Of course, assuming no further reported cuts, right? So 50 basis points would be entirely left out to be passed on. That will reflect in Q2. As I said, it is difficult to say because it has happened over a different period of time. It will also depend upon the asset repricing. All I am saying is that, again, also the deposit also repricing. Over the next three to four quarters, we will see the effect of earning loss getting offset by the cost of fund reduction. That is what I am saying. Okay. We will take hree to four quarters. Okay. Okay. Yeah. Thanks. Yeah. Thank you. Thank you. Our next question comes from the line of Mahrukh Adajania from Nuvama. Please go ahead. Yeah. Hi. Just a couple of questions. Firstly, that is obvious reasons. Unsecured has grown slower, I mean, much slower than secured, and makes it down to less than 10%. A little less, almost 10%. Do we still aspire to grow unsecured in the mid-teens or take a breather year? That is my first question. I have a couple of other questions. Sure. Look. Aspirationally, we would like our retail unsecured book to be at 15%, always in line with our guidance. In that, three kind of elements, one is MFI, which we have talked about, and we have talked about how we are stepping back and starting disbursements. Currently, our disbursement level is more or less equal to the runoffs, but over a period of time, as the credit thing gets better, we will start building our MFI book again. Personal loan is, again, a very, very important product for us, which our customers need, and we will continue to grow that book, and we are doing a lot of work there to really make, to step up the pace of personal loans. Both MFI and personal loans will be more immediate. Card is one area where we have kind of, kind of getting our engine started, launching the new products, trying to get the right product into the right customer's hand. Card, as you know, it takes a bit of time, but it is clearly an area of high importance to us, and we will go after it. This quarter, like we said, we launched Solitaire and the Indigo credit card. There are other card product launches that are coming up, and cards is one area that we will grow quite aggressively going forward. Our entire focus of trying to climb up and get a higher percentage of our assets and retail unsecured is very much on the cards. Very much on the cards, and we will do it in a sensible kind of fashion. Okay. Just in terms of margins, obviously, there were multiple things that happened which took down margins this quarter. Is this the bottom, or the earlier rate cuts may not have been fully passed on, and therefore there is some more catch-up to do on yield? How do we view margins? Is this an upfronted impact, and therefore it is the bottom, or which quarter do you see bottom out? I think if you see, the latest repo cut happened in June, so clearly, the full effect of that 50 basis points will reflect in Q2. Therefore, Q2, it is likely to bottom out before the repricing and the CRR benefits start accruing from Q3 and Q4. The other thing just wanted to also highlight is that while that is happening, on an organic growth on current account and saving account, we have been having the growth. That will also add to some improvement happening going forward. I think the answer to the question, the reported effect on the advances is fully. Will be felt during the Q2 quarter just because the 50 basis points cut happened in June itself. So it's only for 15 days you have taken the hit in Q1, right? The full quarter effect will come, and that, of course, holds good for all the banks. The deposit repricing will happen as per maturity. Absolutely. Absolutely. We expect that to take somewhere between three to four quarters. Three to four quarters. Okay. The repo repricing policy is what? It's 3 plus 1, 1390. I mean, in how many months does the entire repo book reprice following our rate cut? Broadly, three months. Okay. Perfect. Thank you. Thanks a lot. Thank you. Our next question comes from the line of Chintan from Autonomous. Please go ahead. Hi. Thank you for taking my question. Can I just come back on MFI? You said that you want unsecured to be 15% of the mix, but you're stepping away from MFI for the moment. When you think about that 15%, how much of that do you think should be MFI, roughly? I think we look at it on a total kind of basis, right? We're not going to get to 15% overnight, but we're talking kind of building it up. Look, MFI as an overall book, as an overall of total assets, will not be more than 3% or 4% of our total asset book, right? I think the more important thing is to say that we would not like our retail unsecured assets to be more than 15%. Currently, we are at a low of 9.7, so there is a long road ahead of us. Okay. Thank you. The second question I had was on the MFI. Again, sorry to come back on this, but perhaps Devang, if you can help us understand the moving parts this quarter. The day-count impact will probably be 7-8 basis points. Then you have adverse loan mix shift effect. You have adverse funding mix shift effect because of the CASA deterioration. Is there anything else that we are missing out here that would explain the quarter-on-quarter decline in NIM outside of these factors? Sure. I think there are three primary reasons, as I explained in my opening remark. First, of course, is the repo rate cut and the cost of fund impact. Second, I think the mix of the unsecured which reduced in this quarter compared to Q4. The third, as I explained even in the last call, is the way our system calculates the interest on the retail book and the number of days count. Typically, the Q4 has a benefit because of that, and every year, the Q1 has a reversal of that. Effectively, these are the three key reasons which have impacted the movement of the NIM. Okay. So no other one-off factor that might explain any or something? No, no, no. No. No. No. Okay. If I may, very quick one. On the AMC AUM, you highlight 18% growth. How much of that is net new money? How much is net new money? How much of that is net new money? Net new money, yes. Can you just repeat that question, please? Sorry, I could not hear that. We also could not hear clearly what you said. Repeat that question. Of the 18% growth that we have seen in the AMC asset under management, how much of that would be net new money, as in money coming in from grants as opposed to market price increase or asset price increase? Our total assets under management has grown about 8% quarter on quarter, of which new flows, thanks to the liquidity coming into the banking system, was disproportionately higher on the debt side. mark-to-market was less, and client flows were higher. On the equity market, again, markets have been fairly stable, so the flow from client will be almost equal to the mark-to-market gain. Thank you. By the way, that was Nilesh Shah, the CEO of our asset management business. Thank you. Our next question comes from the line of Sumeet Kariwala from Morgan Stanley. Please go ahead. Hi. Good evening, everyone. I have two questions. First is on the cost of funds. That has declined by almost 8-9 basis points. If I look at the number of measures, gift card, savings deposit rates, active money deposit rates, and so on, I was looking at cost of SAR. Cost of SAR itself has come down by 50 basis points Q2. That itself would explain, say, 10 basis points of funding cost decline. Is it fair to assume that we have not seen much repricing on the term deposit portfolio or the active money portfolio? You are right. With the term deposit portfolio, as you know, our average tenure for the term deposit is between 9-12 months, so most of the term deposit repricing will happen over that period of time. As far as fixed is concerned, the price reduction, today we have a 2.91% interest rate, what we have mentioned in the EU, is on the fixed rate side, which obviously will move down to 2.5. As we already sort of declared the price. I think if you have also seen in the breakup, our reliance on the Malboro related SARs, the high-cost SAR, has also gone down during the quarter, which will also obviously help us in reducing the cost of funds further, right? Okay. The second question is on asset quality. If I look at MFI, credit cards, personal loans, and retail commercial ventures, we have been highlighting that stress for the last two or three quarters. I just wanted to recheck on segments out of those segments. Is there any deterioration that you are seeing in the early buckets, particularly in the business banking and SME portfolio, please? As of now, Sumeet, we are not seeing anything in SME and business banking in this quarter as well. As I mentioned earlier, personal loans, we have stabilized, both flows and collection. Cards have plateaued. MFI, we believe, has peaked this quarter. Retail commercial ventures, we think it will, based on what we are seeing, maybe continue over the next one or quarter. We watch that as we are managing that dynamic. Otherwise, as of now, in our SME and business banking, we are not seeing any stress as of now, but we are monitoring it very closely. Just to add, Sumeet, in our case, both SME and MSME, both the portfolios are fully secured. To that extent, we have that cover. Yeah. Thanks a lot, Vivan. Thanks, Shanti. That was from me. Thank you. Our next question comes from the line of Prithvi Engineer from CLSA. Please go ahead. Yeah. Hi, team. Thanks for taking my question and congrats on the quarter. Just firstly on SAR, I wanted to understand sort of the movement. Our opening balance was about INR 1.3 lakh crore and closing closer to INR 1.28 lakh crore, but the average is more like INR 1.24 lakh crore. Was it that we had some quarter-end flows in the March quarter which impacted it, or did we see some outflows when we cut SAR rate during the quarter? How do I just reconcile? I think, first of all, there has been no impact due to the—we have not seen till now impact due to the interest rate cut on the SAR balances. What has changed clearly is the breakup between the floating and the fixed rate SAR. If you refer to slide 10 of our EU, which effectively will show you that the savings account average balances have improved by—from INR 1.22 lakh crore to INR 1.24 lakh crore. Also, on the left side, if you see the EOP balances, which have been broken down between floating and fixed rate SAR. Let me just add to that. Actually, we have been bringing down our Malboro book. Our Malboro book is down. If you look at it, YOR is from INR 18,730 crore to INR 13,280 crore, while our fixed rate SAR, which is currently at 2.5, that has gone up from INR 105 crore to INR 114 crore. The mix of savings is moving to better quality customer granular savings, which is the fixed rate SAR, and Malboro we have been reducing. We always have shown them differently because they are different customer segments and different strategies. It is the granular fixed rate SAR that is very critical. Yeah. The 3.32 cost what you saw below is actually both put together, which is Malboro as well as the other non-Malboro SAR. Correct. No, no. Sorry. Maybe I miscommunicated. I am not referring to the mix or the cost of SAR. I am just saying that the total SAR balance as of 31st March was INR 1.32 lakh crore, and as of 30th June was INR 1.28 lakh crore. One would broadly assume the average to be 130. But the quarterly average is more like 124. Maybe I'm overanalyzing, but just wanted to understand if there was. No, if you look just refer to that page. I think we can, Pridhan, we can sit across and discuss this. Yeah. Thank you. Yeah. See the look. Look at what page is that? Page 10. That's here. So you see page 10. Right? That kind of explains it, right? It's gone from March, it was 111. That's the fixed rate SAR going to 114. Correct? Correct. The floating rate SAR has come down. The floating rate SAR has come down. Of course. I thought it would be down, but there's a big difference between them. That's correct. You have to look at it separately. Okay. Okay. And I'll take it offhand with Vivan. Secondly. Just how do we think about. The quality of the book that has been underwritten in the last 12 to 18 months across segments? Sorry. Which book? Quality across. Okay. Across. So we can talk about CVs, unsecured lending, credit cards. Obviously, it has not happened much. MFI, etc. Is the new book showing significantly better outcomes than the, let's call it, legacy book? Look, let's just go into the areas where we are seeing stress and what is happening there, right? Currently. The stress is in MFI. And in MFI, clearly, the newer book, say for the last, call it, three quarters, or maybe even four quarters, definitely the newer book is much, much, much better than. How the old book is kind of performing. Cards, as you know, we have not been growing. Actually, we've been degrowing. On a percentage basis, you may see a lift in losses, but actually, the portfolio is getting better because all the bad stuff is kind of getting. Washed through. PL, definitely, we are seeing improvements, and the new book is definitely better. No concerns there. In CVs, we had actually spotted this trend. About two quarters ago. If you remember. Shanti had mentioned this. Over the last two quarters, we are seeing some stress in retail CV. It is not in the entire CV market. It is only in retail, small retail CV that we are seeing stress. Over the last two quarters, we have tightened our underwriting for that segment. That new loan, the new origination from that segment now has come to a real fraction of what we were doing earlier. Generally speaking, we kind of stay. We kind of are like watching these books like a hawk, particularly since we are worried about. The trend in the economy. I covered that in my opening statement. The RBI says 6.5% GDP growth, which is a slip from last year. We are just seeing where the implications are and therefore monitor these books very, very, very carefully. Got it. Got it. Just my last question is on gold loans. After COVID, we have been expanding branches quite significantly. Last year, we cut about 20% of our gold loan branches. Anything to read into that? Have they merged branches, or what is going on there? Sadhak Manish Kothari, who heads up our commercial bank, to deal with that. Gold loans will continue to—the numbers, I do not know where one is seeing, but some of the gold loan branches which—huh? It is not—some of the, yeah, so the gold loan branches which we would have reduced would have been more coming out of possibly towns where we were not really seeing much of the growth. Otherwise, actually, the book has grown. Despite the reduction in the branches, the book has grown by 30% plus. Yeah. It is a small book, but it has grown 30% plus over 2023. We are concentrating on—we have got concentration. We have identified 488 branches where we are concentrating on gold loan, building the capability both operationally as well as in tech in those 488 branches. As Manish correctly pointed out, albeit off a small base, 2023 growth in gold loans is 30%. Okay. That answers my question. Thank you and wish you all the best. Thank you Pridhan. Thank you. Our next question comes from the line of Harsh Modi from JP Morgan. Please go ahead. Yeah. Thanks. My question is just on asset quality. To what extent does it appear concerted slowdown across multiple places, as well as some degree of unwinding of the microfinance book? How much more of stress do you think it shows up? Does it show up only in second quarter, or do you think it continues over second half of the year as well? Thank you. Yeah. As Harsh likely said, "Look, a lot of microfinance has been actually quite painful. Started Q3, Q4. We believe it peaked in Q1. We believe it will start coming down," right? With both credit cards kind of flattering and personal loans being stable, some uptick in commercial loans, but the uptick in commercial vehicles, I doubt very much is going to be as much as the drop-off in microfinance. What we are looking at is, if the microfinance book actually kind of drops off as much as we hope, then we should be in a better shape. These are, as you know, Harsh, these things, you have to monitor them virtually on a daily basis. We are all over it. We feel pretty confident that microfinance will peak in Q1. The microfinance book has also come down quite dramatically, and therefore, our confidence that that loss rates will fall off is relatively high. I am hoping that same time next quarter, we have a better picture to report. Thanks. I had just wanted to dig in a bit more on that. Once the guy knows that the bank is kind of in a runoff mode in microfinance, does the willingness to pay back go for a toss? And then do you end up seeing a much higher calamity of loss? And also on MSME, one of the smaller or one of the large players said that economic growth is a univariate variable which has a significant impact on ability and willingness to service debt in MSME segment, especially for the smaller guys. Is that something you said you're not seeing a lot there? I think Shanti said that. But is there something there where there's any early warning signs? Thank you. Yeah. So Harsh, first of all, in the microfinance book, look, what we've done is that we've replaced the joint liability group model with individual underwriting risk-based models. Right? And therefore, the way we are stepping back or the way we are discussing and where we are not discussing has a lot to do with what the model says or the propensity for repayment. Right? And we have backtested these models, and the models seem to indicate that that works into a very acceptable level of risk and loss rates. So that gives us comfort that going forward, the model for microfinance has changed from a joint liability model to individual underwriting, individual risk-based underwriting. I think we can get into a much, much, much better place. On SME, particularly the smaller SME, we are monitoring that portfolio very, very carefully because obviously, we want to look to see whether there are any signs of a contagion. Monitoring very carefully. There are a couple of things that kind of help. One is usually these customers are solely banked, and therefore we get the holistic view of the customer. And two, not 100%, but for the most part, it is secured. Right? But having said that, given where the economy is, we are definitely looking at it and monitoring it very carefully. Thanks for that. It's just so I understand the probability of default may go up in SME, but loss given default may not. But the probability to that is moving up obviously. Yeah. As of now, at least as of now, I'm not that stressed about, I'm not stressed about the SME piece. But of course, we are monitoring it. Got it. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict yourselves to one question per participant. If you have any follow-up questions, please rejoin the queue. Our next question comes from the line of Cherry from ICICI Securities. Please go ahead. Dr. Kovacs, can you repeat your name? Dr. Kovacs and Dr. Kovacs. Yeah. Hi, sir. Good evening. It's a question on your OpEx. So this quarter, the growth has been 6% versus loan growth of 14%. And I think you mentioned in the opening remarks that as. Credit card and PL book keeps, I mean, gains momentum, there may be some rise in the OpEx there. For full-year basis, do you think that OpEx should be broadly similar to loan growth, or do you believe that it can trail loan growth significantly? I also mentioned that while we continue to spend on the IT, which obviously will bring efficiency, and we are already seeing some green shoots there, the payroll costs are growing at a much slower pace than the year. I think it is a combination of the mix of the spend has changed towards more IT and less towards the payroll part. I think the other part which will grow is related to the acquisition cost. As we start onboarding higher rate one-on-one customers and issuing the new and new credit cards, right? To that extent, it will be a variable cost. Also, those new acquisitions will bring the income also, which is currently not reflected in the other income line. To that extent, I think I would like to see the acquisition cost increase in line with the income also from the new onboarding of customers. We are clearly seeing efficiency of the IT spend now coming gradually into the cost. Okay. I thought that answered your question. Yeah. Yeah, that does. If I can ask one more question? We have several other participants waiting for their turn. Sure. Thank you. Thank you. Our next question comes from the line of Xuexuan Gao from Shaunfield. Please go ahead. Thank you so much for the opportunity. Just one question on the CV part that you are highlighting. Just want to understand, can you elaborate more? Is there any specific subsegment of these retail CVs that are being issued, either geographically or new versus used, or is there a type of CV? We just had a CV player that just reported yesterday and said that everything seems to be fine on the ground. It is just seasonality, etc. I just want to understand whether there is anything specific that we are overexposed to, or it is more of an industry thing that you are seeing. Thank you. Sorry. Sorry. It was very buffered. We could not hear in the room. Could you repeat your question, please? Yeah. Am I more audible now? Sorry? Yes. Yes. Am I audible? Yeah. Yeah. Just want to, so on the retail CV, as a quality, do you mind sharing with us more details on is there any subsegments, either new versus used, or any subsegments of retail CV that is having more stress? Because we have a CV player that reported yesterday, and their commentary seems to be things are pretty fine on the ground. It is just seasonality. Just want to understand, is there any subsegment that is causing this for you guys? Retail CV, which is the segment, which is retail is the subsegment. But. What we are really seeing is that within CVs, it is the retail CV. Not really the transport operators and stuff like that. It is the retail CVs where we are seeing. In the goods segment, retail CV is seen. In the goods retail. Goods and retail. Does that make sense? Good. Retail CV. Sorry. I do not know. You are coming back? Retail commercial vehicle and in the goods segment, which is the goods. Transportation. Transportation. Movement of goods. Got it. Got it. Thank you. And then overall credit cost, how do we expect this to be the peak credit cost, or how should we think about the next couple of quarters? Like we said, right, we expect MFI to peak. We expect MFI to drop off. Right? Cards, like we said, have plateaued. I do not think there should be too much change to cards. PL is also stabilized, so that should be more or less the same. We will see some stress in commercial vehicles, like we said. That is what the outlook looks like. Of course, the wild card in all of this is corporate recoveries as to how much you can get in a particular quarter, which is not the annuity piece. Right? That provides to some extent the swing factor. Got it. Thank you so much. Thanks. Thank you. Ladies and gentlemen, we will take that as our last question for today. I now hand the conference over to Mr. Ashok Vaswani for closing comments. As always, thank you so much for joining us on a Saturday evening. Thanks again. We will see you next quarter. Thank you. Thank you. Thank you. On behalf of Kotak Mahindra Bank, that concludes this conference. Thank you for joining us. You may now disconnect your lines.