Ladies and gentlemen, good day and welcome to the Q1 FY 2023 earnings conference call of LIC Housing Finance, hosted by Axis Capital Limited. As a reminder, all 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. Praveen Agarwal from Axis Capital. Thank you, and over to you, Mr. Agarwal. Thank you, Margaret. Good morning, everyone, and from the management team we have Mr. Y. Viswanatha Gowd, MD and CEO, and Mr. Sudipto Sil, CFO, to take us through the key highlights of the call, post which we'll open the floor for Q&A. Over to you, sir, for the opening remarks, please. Thank you. Thank you, Praveen. Friends, very good morning and heartily welcome to every one of you to the post-earnings conference call of LIC Housing Finance Limited. As you are aware, we declared it, our results for Q1 FY 2023 yesterday. Prior to detailing the operational aspects, I would like to highlight that a strong momentum in the economy was witnessed throughout the quarter as compared to the previous quarters over the last two years, which is reflected in the robust growth in the disbursements. The quarter under review also witnessed a 90 basis points policy repo rate hike. In aggregate, the two consecutive MPC meetings held in May and June, and also another 50 basis points hike today. As a result, the company also raised its benchmark lending rate by 60 basis points in June 2022 in response to earlier 90 basis points policy repo rate hike. As reflected in the strong disbursements numbers in Q1, the current year promises to be better than the last two previous years. The financial highlights of the quarter are as follows. Key highlights of the quarter results. Number one, the total revenue from operations were INR 5,285 crore as against INR 4,857 crore for the corresponding quarter of the previous year. It is up by 9.9%. Outstanding loan portfolio stood at INR 2,55,757 crore against INR 2,32,548 crore as on 30th June 2021, reflecting a growth of 10%. Out of which, the individual home loan portfolio stood at INR 2,09,599 crore as against INR 1,82,055 crore. It is up by 15%, and now it comprises 82% of our total portfolio. It is also up from 78% 81% one year ago. The total disbursements for the quarter were INR 15,201 crore as against INR 8,652 crore. It is also up by 76%. Out of the disbursements in the individual home loans were INR 13,131 crores as against INR 7,650 crore with a growth of 72%. Disbursement in project loans were INR 309 crore as against INR 237 crore for the same period previous year. Net interest income rose by 26% to INR 1,660 crore as against INR 1,275 crore for the same period in the previous year. Net interest margins for the Q1 FY 2023 stood at 2.54% as against 2.2% for the Q1 of FY 2022. Profit before tax for the quarter was INR 1,140.36 crore as against INR 192.93 crore in Q1 of FY 2022, with a growth of 491%. Profit after tax for the quarter stood at INR 925.48 crore as against INR 153.4 crore for the same year. Our loan disbursements during the quarter was very strong with 76% growth in total disbursements over Q1 of last year. Geographically, the growth remained evenly distributed across the various regions with southeastern, western, and southern leading. Our mobile platform, HomeY app, it continues to add value and it accounted for over INR 6,500 crore in the sanction during this quarter. In terms of asset quality, stage three exposure at default as on 30th June 2022 stood at 4.96% as against 5.93% as on J une 30th, 2021. The total provisions as on 30th June 2022 stood at INR 6,141.03 crore as against INR 4,727.02 crore as on 30th June 2021, and INR 5,839.11 crore as on 31st March 2022. This includes INR 619.10 crore for COVID-19 related provisions. As of June 10th, 2022, we have seen INR 4,500 crore approximately exiting out of OTR. On the funding side, our cost of funds were at 6.7% as compared to 6.88% as on 30th June 2021. Despite the rising interest scenario in the market, we have been able to bring down our cost of funds on year-on-year basis. Incremental cost of funding stood at 5.44% for Q1 of FY 2023. With this brief introduction, I would like to invite you for your queries. 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 touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Anyone who would like to ask a question, please press star and one at this time. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sanket Chheda from B&K Securities. Please go ahead. Yeah. Hi, sir. My question was on asset quality. Last quarter, we had a restructuring of INR 7,800 which was sitting in stage one. This quarter seems there is some flow to stage two and stage three. What was that flow and how much restructuring is outstanding? Yeah. Good morning. See, out of the 7,800 was the total OTR that has happened. Every quarter, as you know, some of it is exiting. As of today, including last few quarters put together, about INR 4,500 exits have been there. In terms of movement, in the various stage buckets, you would have seen an increase in the stage three by roughly around INR 1,000 crores. That is partly due to the movement in the OTR and partly due to the non-OTR accounts. How much is the OTR outstanding now in stage one? In stage one, total OTR outstanding right now is about INR 2,060 crores. About INR 2,100 crores you can say, which is both having interest and principal moratorium. About INR 1,000 crores, which you can say it is partly in OTR because they are servicing the interest, but they are having a principal moratorium. Okay. INR 3,000 crore is what sits in stage one against INR 7,800 crore last quarter. Is that right? No, not entirely in stage one. As you would note that this quarter, what we have also done is that we have actually marked those specific accounts in the buckets that they were belonging to pre-OTR. So some of these accounts which were in stage one earlier, we have actually put them in stage two as was their specific DPD prior to the invocation of the OTR. Sir, can you give a simple math like, 7,800 was last quarter in stage one. From that, how much you have- It was not in stage one. It was in stage one and stage two put together. It was not in stage one. The OTR was not in only stage one. It was in stage one and stage two put together. How much of that is? The OTR outstanding numbers which I have told you is about INR 2,000 crore, which are both in interest and principal moratorium, and about INR 1,000 crore which are servicing the interest, but they are in principal moratorium. Last quarter you gave INR 78 billion. Against that, what is the number this quarter in simple- Yeah. That is about a little less than INR 3,000. Okay. Second question is, sir, this quarter now, we have increased our TCR on stage two, but that has entirely come because we shifted INR 392 crore from stage one as a provision. As a result of which, now the provisioning on stage one is just seven basis. I think regulatory requirement on standard asset is also 25 basis, right? It's much lower than that now. No, it is not that way. Actually, if you look at it, the regulatory provisioning which is there, that is as per the RBI IRAC norms, and it is actually fully and adequately provided. This what you are talking about, stage one, stage two, stage three, this is basically on an ECL provisioning account. This also if you see on a year-on-year basis, there has been an increase. Of course, there has been a movement from stage one to stage two as we have rightly identified. That has happened because some of these OTR accounts which were earlier being marked as stage one are now in stage two, not because of any change in the DPD, but because we have actually migrated them to a position which was there prior to the invocation of the OTR. 7 basis is adequate you mean? Yeah. Because. Anyways next quarter we need to move to IRAC, so. No, next quarter, we don't have to move to IRAC. I'm not able to understand your query. No. IRAC reporting. No. IRAC reporting is parallelly happening. No, there is no change in that. That we have been following since December, if you are talking about the November 12 circular. No. In stage three, we have 4.96%, right? But there are certain assets as per that RBI circular, which we are still having in stage two, right? This 4.96 number is not the IRAC number. Is that right? No. The IRAC number is separate. IRAC number is separate. Yeah. That's what I'm saying. We are not reporting IRAC as of now. That is fully adequately provided. If you look at the provisioning overall. Adequately provided, yes. Yes, sir. I'm saying that there will be some increase in next quarter, right? As we have to- If you look at, I'll just share with you few data points that will help you understand. The total coverage ratio sequentially on INR 250,000 crore of assets has moved up from 2.32 to 2.40. Correct. That's correct because, as said, deterioration is also more- The total coverage ratio on the project loans, that has also increased from 11.6% as of March to 13.45% as of June. Correct. As stress has also increased, huh, sir? Stage two, stage three has increased. Anyways, yeah. Also, this, I wanted to confirm that both these numbers would be different. Like 4.96 is not the IRAC number. That's a different number you are saying. Yeah. Yeah. IRAC is independent and different. There also, if you look at as per the IRAC provisioning norm, whatever be the IRAC NPA, GNPA number, which is at 5.35%, which is also separately disclosed, there also it is fully provided as per the existing IRAC norms. Okay. Because you have to understand that these are regulatory requirements, so there cannot be any leniency or any relaxation on a regulatory requirement. Sure, sir. Keeping seven dips on stage one is also fine as per you, right? Yeah, if you look at on a year-on-year basis, it has improved. Sure, sir. Those were my questions. Thanks. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants, we would request you to please limit your question to two at a time. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Mahrukh Adajania from Edelweiss. Please go ahead. Yeah, hello. I have two questions. Just following up on Sanket's question. You said that the total exits from OTR over the last few quarters have been INR 4,500 crore, right? And those have been over the last few quarters. What has been the exits in the first quarter, as in INR 7,800 crore has gone down to INR 3,000 crore or? No, actually the 7,800 was the total amount of OTRs granted. It was around 3% of our entire loans. It was 3% of our More or less. That was the figure that in fact in the public disclosures also, you would have seen that that is the total amount of OTRs which have been given by the company ever since the OTR program had been announced by the government, by the Reserve Bank. That is the total 3%, which was translating around INR 78 billion or INR 77 billion. Right. That was the total figure. As of now, the outstanding figure I just shared in the previous period. Yes, INR 3,000 crore. What I'm saying is that the core queue may not have been 7,800, right? It could have been lower. It would have been lesser, yes. Okay. Any quantification on how much has slipped from restructured in Q1? Sorry? What is the slippage from restructured loans into stage three? Yeah. In Q1? See, roughly around you can say about INR 400 odd crores, INR 400-INR 450 crores. INR 400-450 crores approximately. Right. Okay. Got it. Just one question on spread. You've given the portfolio yield and the portfolio cost of borrowing. Correct. I mean, if you deduct costs from yields, you get a spread of 1.3%. Whereas if you actually see your net interest income. Yeah. You know, try to calculate the spread on the balance sheet, it comes to a figure higher than 1.3%. Correct. Correct, sir. Correct. Correct, sir. Right. How do you tally the thing into? I'll explain it this way. The spread that is reported in our communication, that is basically taking into consideration the yield on the entire advances and the weighted average coupon on the. You can use the word coupon, the weighted average coupon on the total liability side. That is on a quarter end or end of quarter reporting date. Now, if you look at the way the interest rates have moved, April was fairly stable. It was only from May where the cost of funds had actually started increasing. That I think will answer your query. Okay. Makes sense. Thank you so much. Thank you. Thank you. The next question is from the line of Shubham Mishra from UBS. Please go ahead. Hi, sir. Good morning. Thank you for the opportunity. A couple of questions on the demand and second on the liability mix. First is, Can you speak up a little loudly, please? Hi, can you hear me now? Yeah. What sort of demand are we seeing in the individual housing? Can you please split it into the top seven cities versus the rest of the country? That's the first on individual housing loans. What's our own estimate going forward for the next 15-18 months? Second is on the construction finance. Have you been seeing incremental competition there from banks because very high quality developers are demanding right now who want more debt? Is that the reason that our disbursements are low, or is it because that we consciously want to keep it low as a proportion of our AUM? If we can speak on that as well, that will be very helpful. The second question is on the cost of funds. What proportion of our bank borrowings are on EBLR versus MCLR, and what sort of pass-through do we think banks are gonna give us, going forward? Yeah, okay. As for the demand, what you are asking is, there is a robust demand even Q1 we could see, and even going forward also there will be very good demand for individual housing loans across all the regions. One good thing actually after COVID vaccination then full momentum now is almost all actually now we have regained. Across all regions there is a very good what you call demand for housing especially which is a basic need. The demand is mainly driven on two, three factors in that main one is now the property rates are almost stable for long. So probably people would like to now lock in at these rates. That's one thing driving. Here and there some small spikes in interest rates may not be a major deterrent for the people to go in for housing loans. That's one thing as far as the individual housing loans are concerned. For the whole year, we are also positive that there will be a steady growth and we are also expecting that the demand, at least our growth rate will be more than 12%-15% in the range as far as the individual housing loan disbursements are concerned for the whole year, current year. The second question you are asking about the construction finance. In that, of course, we are also very cautiously, we are also what you call present in the market. We are also giving loans, not that we have, actually would like to reduce that one. Only thing is what happened because here and there one or two slippage were there into the NPA. That's why the, there is a shrinkage in that, what you call entire portfolio. Otherwise of the project finance. Now it is fluctuating around 5%. In the days to come we are very sure that this definitely will increase and we are also focusing on more smart cities where we can give the very good project loans, even to the range of INR 100 crore or so. What happened, now there we can have very good, in the sense presence and also expand our loan book in the project finance. This is one thing as far as the project finance matters are concerned. I think regarding cost of funds you are inquiring. No, what is that regarding? Second question. Yes, sir. If you look at the bank funding, sir, what proportion presently is on EBLR versus MCLR, and what sort of pass-through are we likely to see going forward, sir, in the next foreseeable 12-18 months? Yeah. As far as the bank funding is concerned, about 32% of our total fund is drawn from banks, and most of them are linked either with an external benchmark or with a repo. Now as you would know that today also there has been an increase in the repo. To that extent, a portion of that will get repriced higher. As far as the external benchmark is concerned, there is a little bit of remission in terms of the T-bill cut-off rates because already it has run up quite sharply in the past couple of months. I would say that there will be some impact, but obviously you would note that in the last month we had increased our PLR by about 60 basis points. Today, post RBI's decision also, we will take a decision at our ALCO in the next few days. Sir, just a clarification on the construction finance, sir. Could you give a number on the growth? What sort of forecast or estimate we have for the disbursements for the construction finance? Construction finance, actually what happened now, we are very much focused on that also. It was in our radar and then now we have strengthened our systems and our people are well equipped and trained, and we have a very good monitoring system and our digital operations also in full swing. We expect at least we'll have to at least in our total disbursements, the market, so our share of the. Our share in the project finance will be at least close to 78%. That's what we're looking at. 78% growth. Is that correct, sir? 78% share in our- Share. Now it is around 5%. Probably by end of the year, we would like to have more nearly to the level of at least 78%. That's what we are looking at. Moreover, nowadays we are focusing on the line of credit. That is also one good business opportunity we are looking into that. Right. Sure. I'll take this offline, sir. Thank you. Thank you. Thank you. The next question is from the line of Kunal Shah from ICICI Securities. Please go ahead. Yeah. Hi. The first question, again, just if you can give the exact numbers in terms of what has gone into stage two from the restructure. Overall there was INR 2,400 crore increase in stage two and INR 1,000 crore increase in stage three. How much of that is coming from restructure? You said INR 400-450 crore in stage three, but how much would be in stage two? Yeah. You're talking about the transition from the March numbers, right? Yeah, yeah. Just this quarter. Yeah, just this quarter. Yeah. Total, about INR 2,000 crore have moved. To stage two? Yeah. INR 450 crore to stage three? Yeah. That is actually NPA. Yes. Yeah. That has come into stage two. This is the movement from Kindly note this movement, that this movement is not because of any movement in the DPD. Let me be very clear on the call. Yeah, it's pre-COVID delinquency bucket is what you have considered and movement. It was reflected in S-1. Now we have put them in S2. Again, to repeat, there is no movement in the DPD per se. It is exactly whatever it is because obviously the clock has frozen when the OTR is in operation. Sure. Stage three would be INR 450-odd crores, no? Yeah. That is the stage three basically means that it is. MP only, right? Yeah. Okay. Got it. Secondly, when we look at it, this entire hike which has been there, from first of July, which we did it on 22nd of June we announced. Given the profile of the book, would it be fair to say that everything will get reset maybe if 96% are pure floating rate loans on our outstanding portfolio, then how should we see maybe in terms of the reset of this? Is it like one month or it will be everything will get reflected in Q2? No, everything gets reset as on first July 2022. That particular date, all accounts, whatever is linked with the PLR, gets increased by 60 basis points from first July 2022. Okay. Fair to assume that yields which are there, which are reported as of now, are maybe 97-odd% into sixty- I'll tell you. It's where, here if you actually look at how, what is going to translate, obviously the loans which are in NPA, there will not be any benefit because anyway. Sure, yeah. They are in NPA. Got it. Apart from that, the loans which have been disbursed in the last one or two months, that also there is a minimum lock-in of three months, so those two months of disbursement will also not qualify for this hike. Apart from that, everything which is linked to the PLR, whether it is retail loans, whether it is non-housing corporate, whether it is non-housing individual or whether it is project loan, all will get moved up by 60 basis points. Perfect. This is very useful. Lastly, there would be no discounting which will be provided to this. I think there was some discounting and this quarter yields have actually come up on a sequential basis. Would we offer that as well with the increase in the rates or no? No. Let us very clearly mention there is no discounting. Okay. There was a special exercise which was conducted in the month of April to retain some customers, which are basically retail customers on the bulk side. Retail customers working with some corporates, et cetera, where we wanted to retain those customers because obviously of the good credit scores. That has also yielded very good results considering the fact that as of March, the year-on-year portfolio growth was roughly around 8%. It has increased to about 10% in the June end quarter. There was a specific, you can say, exercise being conducted to retain the portfolio to, you know, increase the growth. That also was in the backdrop that we are looking at an interest rate hike almost imminently. Yeah. No, the only thing was maybe that 30 basis points sequential decline that is quite huge, so maybe that came all of a sudden because of this, discounting on a larger part on, and I would say now that proportion was also quite high, which is resulting in 30 basis points decline. Just wanted to be sure that there will be no such exercise going forward which will create pressure on yields. Yeah. Okay. Yeah. Thanks. Thanks. Thanks a lot. Thank you. Thanks. Thank you. The next question is from the line of Krishnendu Saha from Quantum AMC. Please go ahead. Hi, thanks for taking my question. Just a couple of understanding the same, most of the questions have been answered. Just a couple of things. Your cost-to-income ratio is, it's low for the last 3-4 quarters. You could throw some light on 12.8%. What is the thought out there? Again, coming back to the yield and the post-discounting 8.1%, the increase in the home loan yield on assets that will be on top of 8.1% or the discount not being there, so it should be higher? Could you just talk about the incremental cost of funds that has also gone up. How do we see that net in effect, looking at the NIMs and the spreads for the next 2-3 quarters? Can you just talk about that? What question did he ask? What question? The first question was, Krishnendu was on. Cost to income. to income. Sudipto, on the cost to income. Just it's been low, 12.8% I suppose according to my calculation or- Yes. What is happening over there? The cost-to-income ratio, if you look at in the entire housing finance space, I think LIC Housing has got one of the lowest cost-to-income ratio. Historically so. Cost to income, you compare it with cost to assets, whatever. It is. Last year there was an elevation because there was a one-off payment regarding wage arrears. Now that it is not there this quarter, it has actually come to normalized level. Further, if you look at the actual, the expenses on account of employee cost et cetera, that has actually, I mean, remained very stable with a slight decline sequentially. As compared to March, there's been a slight decline only. There has been no increase. That way, if you look at it, I think cost-to-income ratio, it will be very stable and it is reflecting the kind of cost discipline that the company has always maintained. Going forward also, by and large, this ratio will be maintained. I see. Okay, thank you. Sir, Sudipto, on the NIMs and the spread. Our incremental cost of fund has gone up by, say, about 30 basis points. What, how do we see that general cost of funds for the coming quarters? With 8.1- 30 basis points also a change in yield. The increase in which you have repriced the assets. Is it on top of 8.4 or 8.1 for the quarter? I just want to get that clarity. See, of course. Regarding the discount. First question that regarding the margins last year. When we had the annual call, I was very emphatic that we will maintain margin stability. Very clearly we had indicated it's irrespective of the fact that we were looking at an increasing rate scenario. The management had very clearly indicated that margin stability will certainly be there, and that has been delivered by and large. There has been an increase in interest costs, as you know, across the board. Two repo hikes till the first quarter, one more today morning. Despite that, we can share with you that, in terms of, margins, it will be stable. Last year, full year margin, for us to compare, there is volatility intra-quarter. On a full year basis, there will be margin stability to improvement. Regarding the cost of funds, yes, cost of funds has increased overall, the 140 basis points including today's repo rate hike that the Reserve Bank has increased. Despite that, if you look at the 90 basis points rate hike which happened in first quarter, has translated to about 20-35 basis points increase in cost. Net net, more than what in the future NIMs you expect at these levels to be maintained or maybe a little bit slightly better for the coming quarters because we'll be repricing our assets. Actually, full year basis, yes, certainly it's improvement. Certainly, yes. Yeah. Margin address something. Yeah. Yes. Could you give us the break-up of the GNPA for 4.96%? What is the break-up which individual LAP, LRD, where it came from? That will help from a detection. Yeah. Yeah. Thank you. Just one second. I'll share with you. Okay. Yeah, as far as the individual housing loan is concerned, it comes to 1.9%. Non-housing commercial and non-housing, if you put together, it comes to around 7%. Okay. 7%. Project, the concession finance is 35%. 35%. That has increased. Okay. Thank you. Thank you for your time, sir. Thank you. Thank you. Thank you. Request participants to please limit your question to one at a time now since there are several others waiting in the queue. The next question is from the line of Rikin Shah from Credit Suisse. Please go ahead. Sir, just had a question relating to the effective tax rate. It has been low for us in the last few quarters. Any specific reason for that? How does it trend from here? Effective tax rate. The full tax rate is 25.168. You are aware that under Section 36(1)(viii), we receive a benefit on the amount of transfers that we make to special reserve. About 20% of our long-term income from long-term lending activities, that benefit we get under Section 36(1)(viii). Effective tax rate is around 18%-19%. Around 18% you can say, 18%-18.5% effectively. This 18%-19% should sustain going ahead as well? Yeah. Obviously, because as of now, there is no indication of the change in tax rate by the government. Correct. Okay. Got it. I have couple of clarificatory questions, or maybe I can come back in the queue. Yeah, please. Okay, thank you. Thank you. The next question is from the line of Hitesh Gulati from Haitong. Please go ahead. Sir, thank you for taking my question. My question is on the breakup between the restructured books, INR 3,000-odd crore restructured books that you mentioned. What is the breakup between wholesale and retail? The retail piece is about INR 2,000 crores. The wholesale piece is about INR 1,000 crores. Okay. Sir, how much of upgrade recovery have you seen in stage three? Sorry, I didn't. What is the recovery that you have seen in stage three, sir? Have you seen any recoveries in stage three assets? Stage three OTR. No, you are checking about OTR recovery out of stage three. No. Yes, a normal recovery also, like in stage three. Yeah, normal recovery. There has been some recovery on the stage three accounts both on the OTR as well as on the non-OTR out of about INR 4,000 crore total. Sir, INR 4,000 is OTR recovery, sir. I'm just asking about stage three recovery, sir. No. Sorry, can you be a bit more clear? Sir, in the stage three assets as of last quarter, sir, have there been any recoveries there, sir? Sir, what is the recovery? Yes, there is a recovery. Certainly, there has been some recovery. See, actually it is offset by. I'll just share with you some numbers. Say for example, on the project side, we have slippage of about 500 odd crores, but there has been recovery of INR 140 crores. So net net there is an increase of about INR 395 crores on the project side. Correct. Similarly, there will be a similar kind of experience on the retail side also. Okay. Thank you, sir. That's it from my side. Recovery is, say, INR 500 crores of slippage, around INR 200 crores of recovery on the retail side. Okay. Yeah. Thank you, [audio distortion] Yeah. Thank you. Request participants to limit your question to one at a time. The next question is from the line of Mr. Nischint Chawathe from Kotak Securities. Please go ahead. Hi. This is again just trying to understand the coverage on stage two loans. Your total ECL on stage two loans has gone up by around INR 590 odd crores. What you mentioned is that the ECL transfer on account of the OTR transfer is around INR 400 odd crore. The balance would be on account of what? No, it is not 400. I thought the number I shared was around 2,000. No, no, that's the principal amount, right? You moved INR 2,000 crores of loans from stage one to stage two for whatever the OTR transfer. Along with it, you moved around INR 400 crores of provision. Provision is INR 400 crore. Yeah. Now the thing is, if I look at quarter-on-quarter increase in stage two provisions, as you have reported, this is up by around INR 590 crores. Correct. I was trying to understand what could be the difference for the balance. It's almost at INR 200 crore. The balance is a genuine increase in the coverage. Okay. For a INR 300 crore balance increase in stage two, you have almost a INR 200 crore balance increase in ECL. Correct. There are two parts to it. One is that what I've mentioned is that because of the movement or I would say migration from the stage one to stage two to the pre-OTR, DPD. Protecting. Therefore there is an attendant movement of the provision from stage one, which was earlier residing in stage one to stage two. Apart from that, on the stage two itself, the coverage has increased. That's good, which is fair. Excess of OTR, whatever is the stage two coverage that we can- That has also increased. Consider to be a more steady-state coverage going on. Yes. Correct. Sure. There are two parts to it. That's it. Perfect. Thank you very much. Thank you. Thank you. The next question is on the line of Varun Subramanian from Equirus Securities. Please go ahead. Yeah, hi. Thank you for the opportunity. I wanted to ask on the OTR pool, the remaining INR 3,000 crores, when will it move out of OTR? That's my first question. Yeah. It will come out almost every quarter now. It has started moving out from the last two quarters. This was the third quarter it was moving out and it will probably go on for another three more quarters. That is, you can expect the bulk of it happening in September and December and a bit of it in March. Got it. That's clear. It will move only in March. Okay. Very small portion happening in March. Got it. I wanted to understand of the book that has moved out from OTR, that INR 4,500 crore, what is the sort of collection efficiency or some sort of color you can give on how it is performing, that INR 4,500 crore book? You said INR 250 crore at slip. Apart from that, you know, how is that portfolio performing? Regular means that the collection efficiency will be close to 100 only. 99%. More than 99%, of course. Yeah. On interest and principal overall, right? Collection is close. Interest and principal. Yes. Okay. My last question is what is the interest accrued on the OTR pool currently? The outstanding OTR pool. Outstanding OTR means. INR 3,000 crore, whatever the INR 7,800 crore, if there is any interest accrued and not paid. No. What is that now? If you look at it, what I have mentioned out of the INR 3,000 crore, about INR 1,000 crore, the interest is serviced. There is no accrual, there is actual receipt. Okay. Even on the overall INR 7,800 crore, there is no interest accrued and not paid. That's not a significant number is what you're saying. The 7,800 number doesn't exist today. Now the number is not 7,800. It is actually. I don't know whether you were there in the beginning of the call. The number is now not 7,800. It has moved. Okay, sir. Sir, just wanted to understand if the amount that has moved out, they have repaid the accrued interest as well or that will still be accrued, right? No, no. That's Actually, see, there are two, I mean, let me again clarify. People who have actually come out of the OTR. Yes. it means that for them it is, I mean, the repayment is as- Regular. As regular and as per the earlier. They'll come to stage one full. Yes. Okay. Got it. Thank you, everyone. Thank you. Okay. Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yes. Morning. Good afternoon. Thank you for taking my questions. The first one is, I mean, while you have already shared, the stage three number was 7% on the non-housing, if you could just split it into commercial, non-housing commercial, and non-housing individual, and then maybe I can take the next question. I'll give you the numbers. You can just about INR 200 crore in the non-housing commercial and about INR 187 crore, sorry, INR 1,879 crore in the non-housing individual. Non-housing individual, you said INR 1,879 crore. Yeah. Non-housing commercial, you said INR 200 crore. Correct. All right, sir. This is useful. Sir, now kind of coming to my question, I wanted to understand, I mean, how are our contracts structured basically. What is the repricing frequency? Kind of trying to understand that you suggested that you took a PLR hike of 60 basis points in June, which becomes effective from first July. Now that there is another repo rate hike of 50 basis points, you suggested your ALCO committee might again meet and kind of decide on the next course of action. Just wanted to understand at what frequency does the repricing of the back book happen? See, there are two ways, I mean, two different. Of course, you have asked only specific to the back book, but as far as the new business is concerned, that can happen anytime. For example, just to give an example, if it is decided to increase rates today, it can increase today. If it is decided to increase from tomorrow, it can increase from tomorrow, like that. Now, as far as the back book is concerned, at the time of signing the loan offer letter, there are four dates on which it will be moved. That is July 1st, October 1, and like that. January 1st, April. That is post subsequent to the completion of the quarter. Those are the pre-contracted dates. That is for the old loans. New loans we are free to decide depending upon whatever contractual obligation or contractual arrangement we enter with the new customers. Sir, if I understood this right, newer customers incremental lending, like you said, I mean whenever the new PLR kicks in, it's effective. On the back book, after the completion of the quarter, the first of the month, as in basically the next one could potentially be first October then. There could be a lag in the transmission is what we are suggesting. Costs go up, but the back book can get repriced now only on the first of October. I will put it this way, it works both ways. Today we are looking at a scenario where the rates are increasing and probably in the next few quarters the same query will be when the rates will start coming down. It is, I think, in a declining interest scenario, it works. I mean, the mechanics. How much? Give a different result. Fair point taken. Just squeezing one last question. While we have a provision cover of about 40% on our gross Stage three, if you just kind of give the split of this provision cover based on project loans, non-housing commercial individual and individual retailers. What is the provision cover that we are carrying on these three? Yeah. Individual housing loan, if you look at the PCR it is 44%. Non-housing commercial it comes to 37%. The non-housing individual also it is almost all 38%. On project loans, sir? Project loan, it is 38%. 38%. Thank you so much, sir, and wish you the very best. Thank you. Thank you. Request participants to please limit your question to one at a time. The next question is from the line of Pankaj Agarwal from Ambit Capital. Please go ahead. Yeah, hello sir. Sir, this INR 30 billion of restructuring is part of stage two? Sorry? This INR 30 billion outstanding restructuring where there is a principal and interest moratorium, is it already part of stage two or? No, no. Please No, no. Please note, it is not INR 30 billion. Principal and interest moratorium is INR 20 billion, not 30. Yeah, INR 20+ thousand, separately, right? Total INR 30 billion. Principal only and INR 20 billion is principal plus interest. It is parked in both one and two depending upon this, the DPD at the time of invoking the OTR. Okay. Would it be fair to say that a majority of this INR 30 billion will be in stage two? I mean based on Stage two, yes. Yes. Correct. Okay. Second thing, Sudipto, leaving aside the provisioning coverage, you know, given the quality of collateral you have, right? Given your stage three assets and restructured loans, you know, what could be the ultimate LGD on all these loans based on quality of collateral, LTV, everything, and based on past experience? You are talking about the book in entirety or separate buckets? Separate Especially like your restructured plus, stage three. I mean, you know, though I know regulatory requirement is different, but ultimately how much I can share with you the loss rates of the company or the write off rates, which is actually the LGD. The ultimate LGD is basically the write offs which have happened cumulatively in the company since inception is INR 411 crore. Less than INR 500 crore over 33 years. Out of that, we have collected about INR 140 crore. INR 240 crore we have recovered out of those INR 400 or INR 500 crore. So actually, if you look at the actual loss rate, I would say it is in single-digit basis points, considering the fact that over the last 33 years we have disbursed almost 5 lakh crore of assets. You believe that future won't be materially different from the past when it comes to this? The adequacy of the provisioning coverage that you have seen on the Stage three, or you leave aside Stage three, you look at on a total coverage ratio basis, TCR basis is also around 2.5% now. Whereas if you actually look at the loss rate, that is in single-digit basis points. Okay. Fair enough. Thank you very much. Thank you. Thank you. The next question is from the line of Prashant Kumar from Sunidhi Securities. Please go ahead. Thanks for the opportunity, sir. My question is on credit growth side. Although the disbursement dipped sequentially, but the total advances inched up a bit. It must be due to lower prepayment. So is it fair to assume the strict competition from banks due to lower pricing are easing in rising yield scenario? If you could give some color on growth side of the individual housing loan as well as the whole book for FY 2023. Yeah, as far as the disbursements now you are, what you are inquiring is, actually the current quarter, the Q1 was very good. Going ahead, Q2 also, of course, this is a very big, in the actual market there. There will be certainly competition from all, where banks will be there, HFCs are there, all are there. One good thing is our strength lies with our MIs and our reach across. Especially the MIs, nearly our market intermediaries, more than 10,000 people. They are providing good support in our reach as well as even our, what you call, volumes. With that, I think we'll have fair enough, our share will be there in the market. Recently we have also, what you call, equipped our, the other line of officers, we call it the processing centers at some important centers. What happened now, the cards are maintained very well. Your digital operations, what we now engaged into, they are also giving good results. Going forward, I think we'll have very good edge in the market as far as the new disbursements are concerned. Growth for the current year, we are almost aiming at 12%-15% in our disbursements. That's one thing. As for now, even our existing book, the total portfolio also will be more or less moving in the same range of 12%-15% by end of the year. Okay. Thank you so much, sir. Thank you. The next question is from the line of Arjun Bagga from Baroda BNP Paribas Mutual Fund. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Just regarding the yields, the decline that we had, QoQ, during the quarter, can we attribute that entirely to this repricing that we did? Yes. As I think Some high yielding loans getting prepaid. Okay, sir. As you disclosed that, this 60 basis points increase in the PLR, that would be applied to, I think all the loans going forward, and that is going to help our yields going forward. Is that understanding correct, sir? Yes. Yes. Correct. This quarter on it will be there. This quarter onwards, like entirely. Sure, sir. That's all from my side. Thank you. Thank you. The next question is from the line of Vipul Kumar Shah from Sumangal Investments. Please go ahead. Sir, I have a small suggestion. If you put all this individual project non-individual all this provision and all these figures in your presentation, it will be really helpful. If you put name and phone number of the person in your investor relation team to be contacted in case of any further queries, it will really be helpful. Yeah. We'll consider that. Thank you. Thank you. Thank you. The next question is from the line of Sanket Chheda from B&K Securities. Please go ahead. Just follow-up question on what Mahrukh Adajania asked that maybe last quarter then the restricted number will be lower than 70%. What would be that number? Sorry to interrupt you, Mr. Chheda. Your voice is breaking up. We cannot hear you very clearly. Thank you. Hello. Is it fine? Yes, now it's better. Just a follow-up question on what Mahrukh asked that maybe last quarter then the restricted number will be lower than 70. Can you give me what was that number last quarter? OTR number. No, your voice is breaking. It is not at all clear. OTR number, which quarter you wanted? March. March quarter. Yes, sir. Total OTR given till March is INR 7,800 crores. That is almost 3% of the book size. In previous discussion, you just allued that that number would have been lower. The INR 148 crore that we have provided, on the back of RBI notification of reclassifying and which sits in Stage two, Stage one, what would be that quantum in absolute terms against which you have created INR 148 crore of provisions? Can you come again, please? As per RBI notification of November- You have mentioned at the bottom that you have provided INR 148 crore or created INR 148 crores of provisions. Yes. Yes. I'm saying what would be the absolute quantum against which you have created this provision? Okay. See, it is about INR 1,400 crores. Okay. Okay, sir. Sure. 10%. Thank you. The next question is from the line of Rikin Shah from Credit Suisse. Please go ahead. The first one is on funding cost. Last quarter, your incremental funding cost was 5.1%. This quarter it is 5.4%. Despite of that, your overall funding cost has moved up from 6.5%- 6.7%. So any color on why the overall book has moved up even if your incremental funding cost is still at least 130 basis points lower than your overall book? That's the first one. Second, just wanted to clarify, out of INR 3,000 crore of remaining outstanding restructure, INR 2,000 crore will be in the stage two and INR 1,000 crore will be in the stage one. The last one is the non-housing commercial NPA, was it INR 200 crores or INR 2,000 crores? That's it. Your first question regarding the cost of funds. The incremental cost of funds has increased, but there is also repricing on the back book. Just like there is repricing on the back book on the asset side, there is also repricing on the back book on the liability side because of the linkage with the external benchmarks or the repo. Thanks. If your incremental repricing is happening at 5.4%, that is your incremental cost of fund, then why would the overall book move up? Because the back book, 30% of the bank, you have to see the amount of the back book and the amount of incremental borrowing. Incremental borrowings in the first quarter will be around INR 10,000 crore. The outstanding 30% of the back book is around, say, INR 60,000 crore. Obviously a 5 basis point increase in the 60,000 crore and a 5 basis points increase in the 10,000 crore will have a different kind of an impact. Got it. It's not comparable. Fair enough. The remaining two questions, sir? Remaining two question, can you please refresh? Are the restructured INR 3,000 crore split, INR 2,000 crore in stage two and INR 1,000 crore in stage one? Is that correct? Yes, correct. Okay. Last one, the non-housing commercial NPA, is it INR 200 crore or INR 2,000 crore? Sorry, INR 2,000 crore. My bad. It is 2,000. Sorry. 2,000 plus non-housing individual, INR 1,879 crore. Total around INR 3,808 crore, and the total outstanding is 33,500 crore. It is around 10% if you add the two. Got it. Sorry, but it was my slip. Thank you for correcting me. Correct. Earlier also we told you, coverage ratio also. Around 10%. Yeah. Correct. Yeah. Thank you very much, sir. This is helpful. Thank you. The next question from the line of Gaurav Jani from Prabhudas Lilladher. Please go ahead. Thank you so much, sir, for taking my question. Two questions. One is, you mentioned that about 60 basis points is the yield hike that we have taken. Proportionately, by what amount, or by what percentage would the cost go up? On an estimated- Yes. The cost of funds which has increased in Q1 on the book is 18 basis points. Obviously, there'll be further increases because of further repo hikes, et cetera. Today, we had a repo hike of around 50 basis points, and we'll see how what is the translation or transmission of that to the various markets in terms of whether wholesale market and then the bank loans, et cetera. It is expected that after this rate hike, there will be some indication of stability. That is number one. If you look at the 10-year bond yields, there is already a reduction from the 7.50% levels to about 7.20%-7.30% levels. That is one thing. There will be increase in the cost of funds, but that will be more than made up by the increase in PLR that will be affected by us, including the one that has happened, that is effective 1st July. You would mean, sir, that the 50 basis points increase in cost of funds would be lower than 60 basis points on the yields. I will give you just one data point that will help drive the point home. Almost 60% of our liability book is on the fixed rate side. 90% - Got it. Plus of the assets are on the floating side. I think your answer is, the question is answered. That will take care, yeah. Got it. Thanks. Just last question from my end. We are at a stage three at about 5%. You know, taking forward one of the previous questions on recoveries. Do you see that recoveries would exceed slippages in the coming year so that our overall GNPA would come off or how should we look at it? Yeah, sure. I think what happened now, the recovery teams are well in place and moreover the effort, even efforts also in full swing. On all fronts, maybe OTR or maybe even in our, the other, what you call, defaults. Even a regular case also, excellent follow-up is being made now, so that what happen, the overall collection efficiency will improve in all the segments, maybe regular or even defaults and all. Even what happened in the non-housing sector also, right? Non-housing commercial loans also, the teams are put in place to, what you call, to make them regularize as well as perform in this quarter. Mostly there will be an improvement. That's what we are very positive. No, because where I was coming from is, sir, in the coming quarter, you'll also see, you know, the OTR pool coming up for payments, right? So X of that or after that, could we see, you know, net slippages being negative or, the higher recoveries? That is what I was trying to get at. Correct. You know, OTR case also what happened, our teams are even in association with the grassroots levels, they were working for the past even two, three months already. What happened, no, majority of them we brought out of this OTR and adequate information is being shared, if they come out, what is the benefit and all. Teams are working for that, for a better improvement in the OTR also. In that we are very sure that there will probably slippages will be less and then the recovery will be better. Got it. Thanks. That will be it. All the best. Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you for arranging this and also all the queries you are putting very nicely. We are now in an improving economic cycle, with impact of COVID almost reduced very, very significantly. Despite increase in interest rates, the housing demand continues to be very, very healthy and robust, and we are highly confident of improved performance on the back of a very good first quarter. Thank you and wish you all the best. Azadi Amrit Mahotsav. Wish you all the best. Thank you. On behalf of Axis Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.