Ladies and gentlemen, good day and welcome to the Q3 FY 2024 earnings conference call of LIC Housing Finance Limited, hosted by Axis Capital Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Praveen Agarwal from Axis Capital. Thank you, and over to you. Thank you, Yasashri. Good day, everyone, and welcome to the earnings call of LIC Housing. We have from the management team, Mr. Tribhuwan Adhikari, MD & CEO, and Mr. Sudipto il, CFO. I would request, Mr. Adhikari to give us a brief overview of the results, post which we'll open the floor for Q&A. Over to you, sir. Yeah. Thank you. A very good morning and welcome to all of you to the post-earnings analyst call of LIC Housing Finance Limited. As you are aware, we have just declared our Q3 FY 2024 results on the second of February, 2024. Before I start the highlights of the Q3 results, I'd like to outline a few developments in the economy over the last quarter. RBI has continued with the pause in the policy rates in Q3, and hinted to hold the repo rate steady for an extended period till the time inflation eases. However, the liquidity in the market was tight in the quarter, due to which the short-term yields were at an elevated level throughout the period. RBI's ensuing MPC meeting this week will provide better insights into the interest rate dynamics in the days to come. Further, with the government's projected lower borrowing program for the next fiscal, bond yields are likely to stabilize. Overall demand scenario remains steady. The recent interim budget announcements in the areas of affordable housing for rural and urban areas is set to further strengthen the demand for home loans in the next several years. The financial highlights of the quarter are as follows: Total revenue from operations at INR 26,992 crore, as against INR 5,871 crore for the corresponding quarter of the previous year, registering a growth of 16%. Outstanding loan portfolios stood at INR 281,206 crore, against INR 268,444 crore as on thirty-first December of last year, reflecting a growth of 5%. The individual housing loan portfolio reported a growth of 7% and now comprises 85% of the total portfolio, up from 83% a year ago. Total disbursements for the quarter were INR 16,184 crore as against INR 1,600 crore. Out of that, disbursements in the individual home loans was INR 13,580 crore, as against 12,868 crore for Q3 of FY 2023. Whereas project loans were INR 375 crore, as compared to INR 427 crore in the same quarter in the previous year. On the net interest income front, NII was INR 2,097 crore for the quarter, and again, as against INR 1,598 crore for Q3 of FY 2023, a growth of 31%. Q-o-Q, net interest income was almost flattish against INR 2,106 crore for Q2 of FY 2024. Net interest margins for the quarter stood at 3%, as against 2.41% Y-o-Y, and 3.04% for Q2 of FY 2024. Profit before tax for the quarter stood at INR 1,448.69 crore as against INR 593.01 crore, up by 144%. Profit after tax for the quarter stood at INR 1,162.88 crore as against INR 480.30 crore for the same period in the previous year, up by 142%. On the business front, there has been a small improvement in the overall disbursements during Q3 as compared to Q2, though it is yet to show a positive on a Y-o-Y basis. As you are aware, we have made some significant changes in the organizational structure during Q1 and Q2, including introduction of new cluster offices and new area offices for underwriting of loans and for marketing. Though there was a relative slow start, a few of the clusters have already crossed more than 20%-75% of their annual budget. In terms of region-wide growth, states like Telangana, Karnataka, parts of North and North Eastern India are reflecting good growth. The reorganizational reorientation, coupled with the introduction of new technology platform in the early parts of the fiscal, which had caused some disruptions, is however, now, perfectly in place and there are no such issues. Sanctions in the wholesale segment showed an uptick through disbursement, though disbursement continued to be on the slow side. The project loan portfolio continued a declining trend, both Y-o-Y and Q-o-Q. Asset quality has remained stable with an improved trend in the quarter. The Stage 3 EAD stood at 4.26%, as against 4.75% last year during the same quarter. The total provisions as on 31/12/2023 is INR 6,890 crore, reflecting a provisioning coverage of 48% on Stage 3. No write-offs were taken during the quarter. On the funding side, we have witnessed an increase in total cost of funds by 4 basis points, which stood at 7.70% as compared to 7.66% in the previous quarter, attributable to a tighter liquidity conditions and increase in other benchmark rates like T-Bill and G-Sec. So with this brief introduction, I would like you 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 their 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles... We have our first question from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yeah, thanks so much. Good morning, everyone. Sir, congratulations on a good quarter. I think the only thing where we are a little worried is the growth is not kind of coming in. In your opening remarks, I think you explained some organization-level changes that you've done in the first and Q2. So just trying to understand, is it just temporary, where because of our internal problems, the disbursements are not accelerating, or would you say that even at the sectoral level in mortgages, the demand is a little weak, and to that extent, the competitive intensity from, I mean, banks or some other large HFCs is very high, which is where maybe we took that conscious decision of not kind of growing or disbursing at lower interest rates, which would have impacted your margin? That's the first question that I have, sir. Yeah. Thanks, Abhijit. Yeah, a bit of all what you've said, yes. In the beginning of the year, as I said, in Q2 also, and at the end of Q1 also, yes, there were major restructuring which happened in the organization. One was on the technological front, and the other is we changed our organizational structure from a four-tier to a five-tier structure. Yes, there were some initial hiccups in the technology implementation. That got settled somewhere around about August of 2023. On the restructuring part, we completely revamped our organization in the sense that we opened 44 new cluster offices and made them be, I would say, the center of operations of the company. Earlier, they were done by 24 back offices, so it was decided that, no, we need to sort of increase the number of these operational offices or these hub centers or centers of activity. Partly due to, number one, distribution of the workload, which we felt was too much on the back offices, and majorly with the purpose of reducing our TAT. Turnaround time for disbursements of loans we were not very comfortable with, so I thought that with the opening of these cluster offices and decentralizing our operations, the TAT would improve, and we are seeing visibility of improvement in TAT. As far as the demand side is concerned, there is no significant downtrend in demand. The demand is there in the market. Yes, these two initiatives did take some time to stabilize, and as a result of that, the uptake was slow. The other part of it was, yes, there was a conscious decision on the part of the company not to be overaggressive, not to go into very risky segments of market. Conscious call in view of our experience of the past, a huge NPA, especially on the project front. So, and of course, there was a change in management there, where I took over in the month of August after the superannuation of my predecessor. So, these all contributed to the thing, to the slightly tepid growth, if you may say, a growth of 5% so far. But things are in place right now. Things are in place right now. Quarter- on- quarter, we've been growing, and I'm pretty certain that Q4 is going to be much better than Q3. So and more so, taking all this, this has been a year of consolidation for LIC Housing Finance, honestly. So we have consolidated our position with a marginal growth of 5% in the books so far. Q4 is going to be certainly much, much, much better. And in the next year, next months, next fiscal financial year, 2024, 2025, it will be the year when LIC HFL will start delivering. Thank you, sir, and thanks for that honest answer. So just wanted to understand the other thing was on again, asset quality. I mean, when I kind of look at our provision coverage, it tends to remain volatile. I mean, there are quarters where we see the provision coverage coming down, there are quarters where we again see it going up. So, I mean, just a limited request, if you can have some stability around those provision coverages. And sir, lastly, just wanted to understand, from what I recall, we were planning to get into discussions with some ARCs for resolution in your project loans book or the developer loans book. Have we seen any progress? A related question, if Sudipto sir can help us with the segmental gross NPA across the four segments that we report? Thank you so much. Yeah. Yes, Abhijit, on the assets quality front, I think you would be witnessing that there has been progress. Yes, the quality of the assets have improved. And let me tell you, with a lot of surety, that in the coming every quarter here on, you will see an improvement in the asset quality. As regards your PCR or the provision coverage ratio, yes, I agree in the initial part of the year, it has been up and down, right? I think last quarter it was 42. Prior to that, it was slightly higher at 46. This quarter, it is at 48. But I think it has settled down. Credit cost, the provisions, I think it has settled down, and the board has given us a guidance that the provision coverage ratio must reach 50% by the end of this fiscal. We are well on the way to achieving that. So I do not foresee any major changes in the PCR ratios in the coming quarters.... So that is, I believe, taken care of. Yes, you will definitely see improvement in the quality of the asset side. If I may bring in some perspective, from the figures you would see that your EAD, stage three EAD, has just gone down by about INR 60-70 crore. That does not reflect the true story. In fact, my EAD had gone down, until the last day, it had gone down by over INR 540-INR 550 crores. So we have recovered NPAs to the tune of INR 540 crores. Unfortunately, on the last day, one big loan account, which was in stage 2, suddenly slipped into stage 3. Something unexpected, we were not expecting that to happen. So we took that hit of INR 450 crores, and my stage 3 EAD moved up by that. So overall, we've been doing well. We are pretty aggressive on that. A large number of negotiations going on with big borrowers who are in default. On the other part, the borrowers who are not responding, we are employing whatever legal recourse is with us, SARFAESI and NCLT and IBC. IBC, a few resolutions, are in sight, but of course, all these sort of legal things, they do take time. There cannot be much surety on that, and we are not relying too much on that. The more the effort is, on, sort of either regularizing or closing down of these other NPA accounts. So, we are making good progress on that, and you will be seeing that in the coming quarters. And the third party part of it was the ARC party you were talking of. Yes, we have never gone into the ARC so far. In this quarter, yes, some progress has been made. We have finalized the ARC policy. The board has approved it. An ARC committee has been formed in the corporate office. We have taken an external consultant who is going to guide us through this ARC process. In the Phase I, probably, this month and in the next month, as a test case, we are taking 10 big loan accounts to the ARCs. Let's see how they respond and then come back with it. It's basically testing of waters. If everything goes on well, and we are comfortable with it, next year, I think we have a huge loan pool which can be given to ARCs. So next year, I believe you will see the real, the company taking a real call on ARCs in the next fiscal. Right now, we're going to go in for a test, a test case scenario, where we're going to take 10 loans to the ARCs, probably, this month, end of this month or early next month. Got it, sir. The last question I had on the segmental level, NPA that you reported across our core segments. Yeah. Yeah, Abhijit, just, please note down. Overall, it is 4.26%. In terms of IHL, individual home loans, it is 1.71. In terms of the NHC, that is non-housing corporate, which includes the project finance, it is 40.75, and in the non-housing individual, it is 6.5%. Got it, sir. This is useful. Thank you very much, and all the very best to you and your team. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We'll take our next question from the line of Kunal Shah from Citigroup. Please go ahead. Yeah. Hi, sir. So, coming on to the question on asset quality, if we just try to back calculate the coverage on stage two and stage one, apart from the stage three assets, in fact, the coverage has dropped on both of these assets. If we just merely look at INR 558 crore on 4.5% of the stage two, and almost like INR 513 crore on 91.2% of stage one, then sequentially there is a drop. So is it like more of maybe stage one and stage two moving into stage three, but incremental, not much provisioning getting created? And where should this settle? Because this would be more in terms of how the average past track record has been. So maybe why is it a change on a sequential basis? Ladies and gentlemen, please stay connected. We have lost the management connection. Ladies and gentlemen, we have the management team back on the call. Mr. Kunal Shah, can you please repeat your question? Mr. Shah? Yeah. So the question was, with respect to the coverage on stage two and stage one assets. So if we just try to back calculate that, looking at INR 558 odd crore on stage two and INR 53 crore in stage one, there is a drop in stage one provisioning to less than maybe 20 basis points now, and even stage two coverage down to less than 4.5%. So just wanted to gauge. Normally, it used to be like 7-8% in stage two, and 25-30 basis points in stage one. So is it like more moving into stage three from stage one to stage two, and that's the reason maybe credit cost is still continuing to be low? No, actually, if you look at the stage two, there is a reduction in the stage two. Overall amount of the EAD in stage two, it has come down from about INR 14,000 crore to around INR 12,700 crore. Yeah. As I mentioned, as we mentioned some time back, one account which was in stage two has moved to stage three. Yeah. Which was carrying, as it is, it was carrying a higher amount of provisioning. So that would probably be the reason why you are seeing the total ECL in the stage two report, I mean, optically showing a decline in there as far as the PCR is concerned. Sure, and this was INR 450 crore account, you said? Yes. Yeah, yes. Okay, and the stage one? Almost 40%. Okay. Mm. So this was 40% provided? Yeah. Okay, and if you look at stage one provisioning, then that is also coming up below 20 basis points. So any reason for stage one being low compared to 25, 27 basis points over the past several quarters? No, it was 25 basis points. Yeah. It was 25 basis points in September. Now it has moved to 20 basis points. So here also, we were carrying an extra provisioning because of completion of the curing period. So there were some accounts which had actually already been performing, but we were carrying slightly higher provisioning because the curing period was not completed. Now we have come back to the ECL-led model, and over and above that also, we have provided a management overlay to buffer it up. Okay. Okay, so now it should be at, in this range, or we should see again- Yeah, it should be in this range. By and large, it should be in this range. Okay. Okay. Mm. Got it. And, secondly, with respect to growth again, so, obviously the guidance was always on a much higher side. We are yet to deliver that. If you can just give us the month-on-month traction, just to gauge, like maybe since IT also got implemented in August, maybe in the early part of the quarter, it wouldn't have been that strong. But if you can just get some month-on-month trends to gauge how the Q4 would look. Yeah. Yeah. Month-on-month, it's something like this: October was INR 4,500 crore, right? You're talking about Q3, right? Yeah, yeah, yeah. October was INR 4,500 crore, November was INR 4,700 crore, and December was about INR 5,700 crore odd. Okay. Total for the quarter was INR 1,480 crores. Got it. Got it. Perfect. Yeah. And just last clarification, in terms of the IHL, NPA, you highlighted 1.71. How much was it in the last quarter, Q2? 1.84. 1.84. Okay, so that's come up from 1.84 to 1.71. Yeah. Okay, got it. Yeah. Thank you. Thanks, and all the best. Yeah. Thank you. Thank you. We have our next question from the line of Shweta Daptardar from Elara. Please go ahead. Thank you, sir, for the opportunity. While previous question was answered, just one on NIMs outlook. So you had mentioned last time that NIMs are peaking out, so how is the trajectory looking there? Shweta, the NIMs that you see at the end of the quarter is 3%. Last quarter was 3.04%, so I think we've done reasonably well to restrict the downside by just four basis points. Going forward, yes, with the constrained liquidity in the market... Hello, sir? We cannot hear you. Yeah. Hello, Shweta? We can hear you now, sir. Hello. Yeah, we can hear you. You can hear me, right? Yeah, as I was saying, the NIMs at the end of this quarter, NIM as at the end of the quarter is 3%. Last quarter was 3.04%, so we've done well to limit the downside to just four basis points. Going forward, we do see that there will be pressure on NIMs in view of the very constrained liquidity in the market. But I think we will be able to manage it. I think worst case scenario, you can see a downside of 10-15 basis points, not more than that. So, a guidance of NIMs over 2.8%-3% is what I'd give for Q4. Okay. And, sir, because I was also coming from the fact that the incremental cost of funds has spiked. So yeah, but you already gave the guidance, so we'll further see 7.7% climbing? Yeah, as far as the, incremental cost is concerned, during the year, the increase on the total, weighted average cost has been around 7 basis points, and 4 basis points has come in, Q3. Now, what we have witnessed in the just, last few days post the government's announcement of, the borrowing program for the next year, bond yields have come off, and bond yields have come, bond yields have, come up by almost 7-8 basis points. So though there is a liquidity tightness, and probably March, we might see further liquidity tightness happening, there is a little bit of remission which has come in because of the government's, proposed borrowing plan for the next year. So I would say it will counterbalance each other out. So that gives us the confidence that probably, in Q4, we may not see too much of a spike in the cost of funds. We are already seeing a little bit of, for example, after the budget announcement, bond yields have come down by almost 7-8 basis points. ... Sure, the guidance helps the company. Thank you. We have our next question from the line of Ramanathan Murthy from RBS. Please go ahead. Yeah. Yeah, hello. This is Ramanathan Murthy here. Thank you for giving me an opportunity to ask one question. Regarding the projects, etc., I think, management has explained very well. I have a slightly different question. This is as a shareholder also, I'm a shareholder also. Now, there are three points. One is, what is the company's dividend policy? Because according to the EPS year after year, the dividend declared amount year after is hardly any amount. It's not at all comparable with other competitors. Second, since from the inception, company has not declared any bonus so far. Company has got a huge results. What is the plan for rewarding the shareholders who have been with the company since long time? Third, whether the company has got any plans to come out with a QIP or rights issue, because in the, there's, rumors are about tightness of the liquidity et cetera are happening. Why can't the company think of rewarding, shareholders by a rights issue? These are the three general points, I just wanted a clarity. Thank you. See, as far as the capital infusion is concerned, I think the company is right, now well capitalized, and the capital adequacy is closer to 19%, slightly more than 19%. So at this point in time, there are no plans of raising any capital, number one. Number two, you referred to the dividend. The payout is generally around 17%-20% of the profits, and that has been fairly consistent. Obviously, going forward, once the profits, et cetera, improve, then, probably, the payout, I mean, the actual dividends, may or may increase. Otherwise, also, if you see for a company which is having a ROE of around 16%, we, you can rest assured that your company within the, I mean, your, your investment within the company is growing at a much, much faster rate and a better rate as compared to any other comparable investments. Thank you. What about bonus for any plans to declare bonus? No such. Okay. Okay. Okay, thank you. Thank you. We have our next question from the line of Shubhranshu Mishra from Philip Capital. Please go ahead. Hi, sir, good morning. Two questions, the first one is on the Stage upwards of. Shubhranshu, can you speak a little clearly, please? I think your voice is coming a bit muffled. Is it better now, sir? Sir, please use your handset mode. Yeah. Yeah, just- Yeah, better now. Better now. Go ahead, Shubhranshu. Sir, the first one is on PCR. So, we have our Stage 3 PCR upwards of 45-46% for quite some time, and we are running a secured book. So 45-46% or even 50% PCR guidance generally tends to, you know, indicate that we are either running an unsecured book or that is the kind of LGD we are expecting on our loans. So, if you can clarify on that. Second is that almost 99% of our assets are floating rate and 52% of the borrowings was NCD. So as and how the rates come off in the near to medium term, would we see our NIMs compress? No, as far as the your first question regarding the PCR, you have to probably keep in mind that we have got a significantly higher levels of NP in the segment of the wholesale book. So it is to obviously create some kind of a buffer for that. Having said that, the fact is that we are expecting a lot of recoveries, including ARC sales. So probably 50% is kind of an optimal number. There are no loans which are given unsecured. That is something I want to very clearly outline. There is, there are no unsecured exposures or unsecured book. Coming to your other query pertaining to margin outlook in a declining rate scenario, is obviously, as you have very correctly observed, around 50% of the liabilities are fixed, whereas the almost entire asset pool is floating. But this has significantly changed from the last rate cycle, where about 75%-80% was on the fixed rate liability side. From there, we have scaled it down to about half and half. Further, we are also exploring other tools to ensure that the movement of liabilities is in line with the movement of assets as and when the rate cycle reverses. So we obviously need to ensure that we are able to protect the spreads. Sure, sir. And if I can just squeeze in one last question, sir. How many builder loans are there in the Stage 3 number, sir? What's the value and how many? So, you can, in terms of the Stage three, total EAD in Stage three, and this is the entire pool of, not only the builder loans, but also the other non-housing corporates, because that is how the classification goes nowadays in, with the regulator. So that, total amount of, third, Stage three, is around INR 6,100 crores as on, December 2023, out of the total asset pool of INR 15,000 crores, which includes about INR 8,500 crores of project loans and about, seven thousand odd crores or INR 6,500 crores of other wholesale exposures. In terms of count, how many builder loans are these, sir? Around 230-240 in terms of builder loans only. 230-240 builder loans, sir? Accounts. Okay. Okay, sir. Sure, sir. Thank you. Sure, sir. Thank you. We have our next question from the line of Jigar Jani from BNK Securities. Please go ahead. ... Yeah, hi. Thanks for taking my question, sir. So in terms of margins, like you said, right, in Q4, we'll be maintaining 2.8%-3%. Would you be kind enough to guide for FY20 25 as well? Would you be able to sustain these kind of margins? Or considering competition, we might look for more growth and probably some compression on margins? Yeah, as far as margins are concerned, I think there are a lot of moving parts, including, the very big question being debated about the rate reversal cycle. So the objective, obviously, of the company will be to maintain, as you would be seeing, despite a falling contribution from the wholesale book, the margins that we have reported in the nine months is almost a half a decade or seven-year high. So obviously, there has been a focus on profitability in terms of, the asset growth, and that will certainly continue in the next year as well. Yeah. Right. And, sir, how much of our asset book would be EBLR linked, and how much would be MCLR linked on the IHL side? Yeah. Can you speak a little clearly, please? Again, your voice is- Yeah. Is this better, sir? This is better. Yeah. So I was asking, sir, how much of our IHL book is EBLR linked and how much is MCLR linked? No, it is our internal PNR. Everything is internal PNR? It is not external, it is not linked to external benchmark. Okay, sir. Understood. And, sir, the last- Entire book is linked to our internal benchmark, PLR. Okay, understood. And, sir, on, lastly, on credit cost, we had guided for 55 odd bits of credit cost for this year. What would be our guidance? We will still continue with this 10-15 bits guidance of, credit cost reduction next year? I think largely that should be in line. I think, I mean, as you have mentioned, at the beginning of the year itself, we had given an indication that it will be, ranging between 50 and 55 for this current financial year, and till now, we have adhered to that. Next year will be more. Okay, understood. Thank you so much for answering my questions, and best of luck. Thank you. We have our next question from the line of Renish from ICICI. Please go ahead. Yeah. Hi, sir. Just two questions from my side. One on this regulation about the deposits. Now, incrementally, you know, if we have to shift from a deposit to, let's say, a market borrowing or a bank borrowing, of course, those funds will come at a lower cost, even if we assume, you know, rate remains where it is right now. So does it translate into lower cost of fund in next Q2? See, Renish, if you see our deposit book, it is around INR 10,000 crore or INR 11,000 crore, whereas the last reported net owned funds will be closer to INR 30,000 crore. So we are well below the revised norms of 1.5 times anyway choice. Correct. Correct. No, on, on the stock front, I agree, but incrementally, then, we have to diversify, right? No, I think the exposure of, I mean, the share of deposit and the overall liability is around 5%. Certainly, we would like to increase a little bit just for the purpose of diversifying the sources, because till now, we are largely dependent on the wholesale funding. Obviously, having a deposit license, we would like to also diversify into retail liability side. That will be a different strategy. That will be basically a diversification strategy and will have no impact on cost. Got it. Got it. And just the last question again on the growth side. So let's say, looking at the month-on-month improvement, you know, on the disbursement run rate, which you just disclosed, it is fair to assume that the December disbursement run rate fairly sustained in January, and hence we expect much better Q4 than Q3 in terms of disbursement? Yeah, definitely, definitely. As I said, we've been growing quarter- and- quarter, and all our the basic issues which were holding us back are settled. So, Q4, as it is, last year was because of this rate hike by repo rate hike by RBI, Q4 was a slightly I would say low last year. So definitely in Q4, we're going to see a a very good, a very good growth in Q4 as compared to Q4 of last year, and definitely better than, much better than Q3 of current year. Got it. And just, last part. So would you like to give any growth guidance for FY 2025? Well, let's take it. We are right now, as I said, we are in the consolidation phase. We are trying to consolidate this year. Looking forward to Q4 right now and, trying to deliver, an excellent growth, which would probably be appreciated by all of you. We'll take... We have a strategy meet coming up with the board in, March. We'll take a call on, FY 2024, 2025, in March. Got it. And so nothing left on the restructuring and any tech part, right? I mean, those things are behind now and we are- No, no. Tech part and the restructuring part are totally settled right now. Yes, the tech part, a lot, many things envisaged. Basically, the change in tech or the migration to a new tech platform was basically to help us with our digital, what we wanted to do on the digital front. So we are going to go digital on the digital front in a big way in the coming fiscal. ... so otherwise, the lending platform is totally settled. But yes, lots to do on the digital front, in the coming quarters, and in the next fiscal, you're going to see a lot more digital initiatives for us onboarding of customers, so sourcing leads, conversion of leads, et cetera, et cetera. But then does that possess a risk to the disbursement in FY 2025 or no? No, no, no, not at all. Not at all. In fact, it's going to add, it's going to help us, help us onboarding of customers and increasing our disbursement and increasing our book. Because there's no- Got it. There is no risk at all. There is no risk at all. Got it. Got it. Helpful, sir. Thank you very much, and best of luck, sir. Thank you. Thank you. Thank you. Before we take the next question, we'd like to remind participants to press Star and One to ask a question. We'll take our next question from the line of Rajiv Mehta from Yes Securities. Please go ahead. Yeah, hi, congratulations on good numbers. Just two questions. What will be the incremental yield for home loan and non-housing individual loans? incremental means that going forward, or it was, the number that you are asking for is for the- No, the disbursement yield. Disbursement yield for this overall, for the December quarter was around, say, 9.6 or thereabouts, including all pieces of business put together. Okay. Right now, we do have a offer, which has come up for the month of January for the Q4. But overall, maybe some, it will - it is likely to decline maybe two or three basis points at the most from wherever it is, as of December. Okay. It is as of now or for the quarter, it's going to decline by 2-3 basis points only? For the quarter, for the quarter. Okay. Okay. Just on the funding side, so if you were to borrow 3-year money or 10-year money, you know, right now from the bond market after we having some cool off in the bond yields, what will be that likely rate? Yeah, I'll tell you, sometime in the third week of January, 10-year paper, we had ourselves done a 10-year paper that came at 7.82, and I think yesterday, today, we are in the market again. We are doing it at 7.69. So there has been an... This is after the budget. Mm-hmm. There is at least a 10 basis points pullback in the incremental 10-year. The yield curve continues to be a bit inverted, but there's been a parallel shift of the entire yield curve post the budget, interim budget, where the- Mm-hmm. revised numbers were, and the projected numbers Mm-hmm. were decreased for the next year. Mm-hmm. Mm. So sometime probably where we will do the deal today, less than 7.70. Mm-hmm. Probably we'll be in the market in the next very shortly. It was 782, just about the 23rd or 24th of January. Got it. Got it. And, lastly, on the NCD stock, is there any adverse adjustment, you know, is it behind in terms of, any low-cost NCDs, you know, coming from maturity and which is why they had to be substituted by higher cost or maybe the other way around? So this churn of the existing NCD stock, would the adjustment, incremental adjustment, be net neutral or slightly negative or positive? I would say that, there will be always some high-cost borrowings, which will run off on some low-cost borrowing, depending upon when you would have contracted those, those bonds. So I would say to that extent, we are agnostic, because some quarter you might see a, a higher, kind of a bond running off. Some other quarter you might see a lower, coupon, running off. But that really does not make too much of an impact because we are regular borrowers in the market, and over a period of time, it gets, settled down. Got it. Thank you for answering my questions. That's clear. Thank you. We have our next question from the line of Piran Engineer from CLSA. Please go ahead. Yeah. Hi, sir. Congrats on the quarter. Just wanted to clarify, the October number we mentioned was INR 4,500 crore. Did I hear it correctly? Yeah, that was... This is on the retail side, right? That's home loan plus LAP, right? Yeah, yeah. What was the corresponding number in January? Corresponding number in January was 4650. Okay, so it has dipped a bit from December. Overall, disbursements will be slightly higher because of the non-individual segment. Okay. Okay, fair enough. And, is there some OTR still outstanding, in the sense that is it still OTR, but still under moratorium? Yeah, you are asking about the OTR? OTR. No, the entire OTR has now moved out because the OTR window is over. All loans have come out of the OTR window, irrespective of whether they are... I mean, and the moratorium period has also ended. Okay. So are there any loans which are still in stage two, and they're servicing well and have the chance of being upgraded? By and large, settled down. That is by and large, settled down. Whichever loans had to be had to go to stage three are already slipped into stage three, and we have seen several quarters after that. Good number of good number of accounts have got repaid and closed as well. And some of them are servicing regularly. No, okay, let me put it this way. Are there some loans which have a probability of being upgraded in the next Q2? Because I believe OTR ended in mid-2023, and for one year, if it services correctly, you can upgrade. That is possible. That is possible. ... It is possible, yes. Can you quantify or is it possible? I would not like to quantify at this point in time, but yes, there are possibilities that the loans might get closed also. Okay. Either they might get closed or they might get upgraded, that 12-month cooling-off period might get over. Understood. Okay, this is very useful. Thank you, sir, and all the best. Thank you. We have our next question from the line of Vipul Kumar Shah from Sumangal Investment. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, would you repeat the segmental NPA numbers which you had given? Yeah, I will just repeat. Kindly note down. As far as the individual home loan is concerned, it is 1.71%. As far as the non-housing corporate, which includes the project loans, that is 40.75%, and the non-housing individual is 6.5%. Overall, it is 4.26%. LAP is included in which segment? Non-housing individual, NHI. That is, means 6.5, right? Yes. Okay. Thank you, sir. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We'll take our next question from the line of Jeet from Pinpoint Asset Management. Please go ahead. Hi, sir. My question is with regards to your developer book. So what is your strategy your- Mr. Jeet, can you use your handset mode, please? Hello, is that better? Yeah, better, better now. Yeah, go ahead, Jeet. Okay. Hi, sir, my question is with regards to your developer book. What is your strategy here? Are you looking to grow the book incrementally given the real estate up cycle, or you want to continue running it down and, you know, focus more on prime housing? That's my first question. There is no sort of attempt on our part to run it down. Yes, there has been contraction in the developer book, partly because of two big LOCs, lines of credit, customers deciding to close because of them being offered low rates of interest by other peers in our peers. As far as the developer book is concerned, still, right now, my NPAs are at 34%. Yes, down from 42-43% a quarter ago. There is improvement, but again, this year we've decided to be cautious. We are not going in a big way or a very aggressive way with building our developer book. We would like to take it slow and steady, ensure that we do not repeat the mistakes we made in the past. We have at least INR 4,500 crores of sanction book in the developer side, which is yet to be taken. That means loans have been sanctioned, but the amounts have not been drawn, I would say, by the borrowers. So, in the coming... In this quarter, I believe, some of that would come in, some of that would come in. But honestly, yes, we've been consciously very measured in sort of getting into the developer side. And the other part of it is, there is a huge, huge rate war on in the market right now. Even on the developer side, there are my, some of my peers who are offering developer loans at 8.75%, which is way, way, way too low, according to me. Does not fit into my comfort margins. So yes, both taken together, period of, as I said, period of consolidation, looking, being cautious, trying to improve the asset quality on the developer side. Next year we take a call, next year we take up the call whether... Yes, we will definitely be looking at growing the book. No doubts about that. But, how aggressive we get, how much risk we are willing to take will be a call we'll take next year. Understood, sir. Very clear. Secondly, in terms of your NPA and written-off pool on the developer side- One moment, please. Mr. Jeet, the line is disconnected of the management. I'll reconnect them. Please stay connected. Oh, thanks. We have the management team back on the call. Jeet, can you please repeat your question? Yeah, sure. So in terms of your existing NPA and written-off pool on the developer side, any kind of chunky recoveries that you expect? Yes, Jeet, there has been an improvement in the asset quality, even on the developer side, as well as the retail side. Yeah, developer side, as I think there are some about 2, 30-40 big loans, which are in the NPA pool. We are doing everything we can, right from conciliation to taking legal recourse or taking advantage of whatever legal remedies we have. Yes, seeing some traction on the developer book. Many of our big borrowers are right now in negotiation with us, trying to settle or trying to come to a closure. We are open from our side, willing to offer OTS or one-time settlements to those borrowers so that the book gets closed or the loan gets updated. Plus a lot, many for sort of such loans are in the IBC and the NCLT process, legal process, which will take some time. Expecting some resolutions in the coming two months from the IBC and NCLT, and expecting some resolutions to come from the negotiations we are having with the developers. So, I believe at least in the coming quarter, 10-12 large accounts, say INR 100 crore-INR 150 crore, we expect to regularize. Got it, sir. Very clear. Thank you so much. One last question is on your prime housing book. You know, for your, your highest quality customers, they generally compete with Tier One banks. What would be the pricing difference in terms of the yields that you charge versus Tier One banks? Do you match them or are there some differences? To be very honest, we are a lender lending to the IHL, the individual home loan segment, right? So far, we've been very conservative in the sense we've mostly gone into the salaried class, and it will be people with high CIBIL score, 700+, and that is where the competition comes in from banks. Right now, the market as it is very, very, very competitive, especially on the rate front, right? Individual home loan rates for prime borrowers is as low as 8.3, 8.35. It's tough. It's tough for an HFC, where the cost, where my cost of borrowing is 7.70%. Having to compete with a bank with probably an average cost of somewhere about 5-5.5%, it's tough. But then we've got to do it. We've got to do it. So, yes, this year we are still there looking into the affordable housing segment. We've launched a product also there. Next year, we pretty upbeat. I think the affordable segment is where we see a lot of demand coming from, where we need to be as one of the biggest housing finance companies. So looking for diversification next year. Got it, sir. Thank you so much. Yeah, just one small- Just one small correction. 230-40 loans in the builder book. NPAs are 40-50 accounts. 40-50 accounts of the builder book are in the NPA. Got it, sir. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We have our next question from the line of Shubhranshu Mishra from Philip Capital. Please go ahead. Hi, sir. Sir, the last part that you said, 40-50 accounts are in NPA, but previously you mentioned there are 230-240 accounts in stage three. No, Shubhranshu, total, builder loans are INR 230-240. Okay. 40-50 accounts are in stage three. Okay, okay. What is the total value of these 40-50 accounts, sir? I think, about INR 2,000 odd crore. INR 2,000 crore. Sure, sir. If you could split which, how many of these accounts are in IBC, how many in NCLT, how many are being worked out as we- Shubhranshu, I don't have the exact figures with me right now. Okay. Okay. Or if you can give at least geography by concentrations and how many in Ahmedabad, how many in NCR, how many in Chennai, Hyderabad, so on and so forth? See, by and large, I mean, in, in terms of the overall real estate market, also, Mumbai is the largest real estate market, so number of NPAs also in Mumbai will be the highest in terms of amount. Same as in the other cities like Bangalore and NCR. So it will be difficult to give an exact number in terms of number and amount. But yes, it more or less follows the real estate pattern. Largest will be in Mumbai, then it will be in Bangalore and, and then NCR. Do we have a number, sir? How many accounts, builder accounts, NPA in MMR, Bangalore, NCR? No, no, Shubhranshu, we don't have the numbers right now. If you can get in touch a little later, probably we'll then give, we can give it to you. Yeah. Sure, sure, sure. Thank you so much, sir. Best of luck. Thank you. Thank you. Thank you. We have our next question from the line of Prashant Kumar from Sunidhi Securities and Finance. Please go ahead. Thanks for taking my question. Am I audible? Yeah, you're audible, Prashant. Yeah, go ahead. Yeah. So, sir, you have mentioned about that, the HFC likely to take option to sell, 10 large accounts to ARC. So what is, what will be the interest, income component on these accounts? Because it may impact abruptly, interest part in coming quarter. And, is it going to happen in next quarter or, or Q1 FY 2025? Because there is a track record that margin falls, abruptly, that, two or three, good quarterly performance, margin, fall abruptly. So, and, this time there, there are two concerns: one is liquidity and other one is, interest reversal. So your color, if you could give some color, sir. ... Yeah, as far as the ARC is concerned, these are all accounts which have been fully written off. Provided for. Provided for, rather. They are fully provided for. So, I mean, what will be the interest impact of it? Depends upon the kind of resolutions we are able to get in each of these accounts. Oh, okay. Okay. Thank you, Sandesh. Yeah, but there, at least there will be a provision reversal. That is something which is, which can be said certain, with certainty. Okay. So it may, but how many basis points if you can give something, I mean- Yes. Yes, you have mentioned that 2.8%-3% may be in next quarter. I think so my concern is it may fall down to more around. No, Prashant, Prashant, we are confident. We are confident of worst case scenario, maintaining 2.8, and I think a best case scenario, as you see in the last quarter, the downtrend has just been by 4 basis points. We would be targeting anything, not, not, not more than 5-7 basis points in this quarter, but definitely above 2.8. Okay. Thank you, sir. Thank you. Ladies and gentlemen, that was the last question for today. I now hand over the call to management for closing remarks. Over to you, sir. Yeah, thank you. Thank you, friends. As I said, this year was largely a year of consolidation. Whatever important structural changes and technological platform changes we made are in place. Nothing holding us back now from delivering the kind of performance all of you expect, the investors expect. During the year, we've also been able to address areas like stability, improvement in asset quality, improved margins, which is one of the best in half a decade. So as you've been seeing, every quarter is an improvement in same area or the other, and I'm pretty certain and confident that this trend will continue in the next quarter, Q4, and in the coming quarters, all the Q4 of FY 2024 and 2025. I extend my sincere thanks to all of you for your continued support. Thank you. Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thanks for joining us, and you may now disconnect your lines.