Ladies and gentlemen, good day and welcome to LIC Housing Finance Q4 FY24 Earnings Conference Call 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 the 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 Limited. Thank you, and over to you, sir. T hanks, Steve. Good day, everyone, and welcome to the Earnings C all of LIC Housing Finance. From the management team, we have Mr. Tribhuwan Adhikari, MD & CEO, and Mr. Sudipto Sil, CFO, to take us through the key highlights of the results, post which we'll open the floor for Q&A. Over to you, sir, for your initial remarks. Thank you. T hank you, Praveen. Good morning, ladies and gentlemen, and welcome all of you to the post-earnings conference call of LIC Housing Finance Limited. As you are aware, we declared our Q4 results yesterday. Before I start the highlights of Q4 results, I would like to outline a few developments in the economy in the last quarter. As expected, the RBI continued with the pause in the policy rates in Q4 also, and expectations of the rate cuts are being pushed further now, largely due to global data cues. The liquidity conditions in the quarter were also kept at tighter levels to control the inflation. Tighter liquidity conditions, along with geopolitical tensions and volatility in the global data points, kept the interest rates at elevated levels during the quarter under review. The overall demand scenario for housing loans remained steady. Further, as informed in the Q1 and Q2 conference calls, the company had undergone two transformational changes during last year, including technological changes as well as opening up new marketing offices and introduction of special trustee offices for credit appraisal process. As a result, we witnessed significant improvement in all areas of operations of the company. In FY23-24, the year has been the best in terms of margin and profitability with record PAT and NIM. Now, I would like to share the key financial highlights of the quarter, which are as follows. Total revenue from operations grew from INR 6,415 crores to INR 6,936 crores for the corresponding quarter, QoQ, a growth of 8%. Outstanding loan portfolios stood at INR 286,844 crores against INR 275,047 crores on 31 March 2023, reflecting a growth of 4%. The individual home loan portfolios stood at INR 244,205 crores as against INR 228,730 crores as on 31 March of last year, up by 7%. This individual home loan portfolio comprises 85% of the total portfolio of the company. Total disbursements for the quarter were INR 18,232 crores as against INR 16,027 crores in the corresponding quarter last year, a growth of about 14%. Out of these disbursements, in the individual housing loan segment, we disbursed INR 14,300 crores as against INR 12,406 crores of Q4 of FY23, up by 15%. Project loans were at INR 1,501 crores compared to INR 1,554 crores in Q4 of last year. The last quarter of FY23-24 was the best quarter of the year in terms of disbursements, with sequential growth as well as YOY growth. On the interest income front, NII, net interest income, was INR 2,237 crore for the quarter as against INR 1,990.30 crore for the corresponding quarter of FY23, a growth of 12%. Net interest margins for the quarter stood at 3.15% as against 2.93% in the previous quarter sorry, in the previous quarter of FY23. NIM for all the quarters of last year has been consistent and in the range of 3% or above. PBT, profit before tax for the quarter, stood at INR 1,476.18 crore as against INR 1,444.78 crore, a marginal growth of 2%. Profit after tax for the quarter stood at INR 1,090.82 crore as against INR 1,180.28 crore for the same period previously. And PAT, profit after tax, stood at a record high for the year, year-on-year. PAT for FY23-24 stood at INR 4,765.41 crore as against INR 2,891.03 crore, showing a significant growth of 65%. Yesterday, the company declared a dividend of 450%. That is INR 9 per share. In terms of asset quality, the stage III EAD exposure at default stood at 3.31% against 4.37% as on 31 March of last year and 4.26% as at the end of the previous quarter, that means 31 December 2023, reflecting sequential as well as a YOY improvement in the same. Total provisions as on 31 March 2024 stood at INR 6,270 crores, with stage III provisioning coverage ratio at 51%. On the recovery front, with continuous and focused efforts, we have witnessed a significant and consistent reduction in delinquency levels during the last year. We have also made technical write-off a technical write-off of INR 1,080.57 crores during Q4 of FY 2024. Overall, the total technical write-off during the financial year 2023-2024 stood at INR 2,005.62 crores. On the funding side, we have witnessed an increase in the overall cost of funds by 13 basis points during last year from 7.63 to 7.76 and an increase of 6 basis points during the last quarter from 7.70 to 7.76. Incremental cost of funds stood at 7.84 for the full year and 7.90 for the quarter. Net interest margins for the year stood at 3.08 against 2.41 last year. During the last quarter, the interest rates were at elevated levels due to tight liquidity controls. However, we managed to keep our interest expense flat in comparison to Q3. We also renegotiated on some of our outstanding borrowings. The last year was a year of consolidation as well as one where several new initiatives were launched and implemented. Also, there was a significant focus on the recovery effort, which has led to improvement in asset quality. With this foundation, I believe we look forward to a strong financial year 2025. With this brief introduction, I would like to invite you for your queries. Thank you. Thank you very much, sir. We will now begin the Q&A session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mahrukh from Nuvama. Please go ahead. H ello, sir. Good morning. Good morning. Good morning, Mahrukh, ma'am. H i. So my first question is on the write-off. Do these look builder loan? Ma'am, sorry to interrupt. Your voice is a little low. Can you use your handset? I will do that. Please give me a moment. S ure. Hello. Mahrukh. Can you hear me now? B etter now. Better now. Better now. Yes. My first question is on the write-off. Was it on builder loans? No, Mahrukh, ma'am, the write-off is on all loans, builder as well as IHL, which are provided for 100%. That means wherever there is a provision of 100%, these loans are eligible for write-off. So it would be a mix of both, not specifically builder loans. It would be a mix of both, builder as well as retail IHL, individual home loans. On the repossessed assets, are part of Stage II? No. Actually, repossessed assets are Stage III. They are Stage III. So the Stage II provision has also gone up. ECL has also gone up a lot. That's why I asked. Any explanation? I mean, any reason for the Stage II ECL being higher QOQ? No. For the Stage II, you are asking? Yes, Stage II. Stage II, the Management Overlay, it is because of the Management Overlay, it has been increased. Any DTA reversal because the tax rate is also higher? No. As far as the tax rate is concerned, it is basically because of some old, I would say, DTA for earlier years, which we have taken effect this year. Total amount is INR 127 crore, approximately. So it's the earlier years DTA. And it will normalize to 19%-20% going ahead? 19%-20%. Thanks a lot. Thank you. Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Good morning. Again, congratulations. I think, I mean, this has been a good quarter for us except for maybe some burn-offs and maybe slightly higher write-offs. So, sir, I mean, I had two questions here. NIM is something that we're all trying to wrap our heads around. I mean, as a franchise, we were not a business model which did NIMs in excess of 3%. So if you could, I mean, help us understand what is it that has changed in the last one year that is allowing us to deliver this NIMs, given that if you look at the sectoral level across HFCs, there seems to be some transient pain, which is that the margins needs have largely maxed out. Cost of borrowing continues to rise. So that is one thing if you can help us understand as well as supplement it with your NIM outlook for the next year. That is one. And the other thing is, sir, I mean, your stage III has declined by almost INR 2,500 crore. You just explained in your opening remarks that you have about INR 1,100 crore of technical write-offs that you took during the quarter. So where the other, I mean, decline that we've seen in stage III, stage II, there were more organic resolutions during the quarter. Your second question first, yes, there have been write-offs to the tune of about INR 1,000 crore in the quarter. But despite that, we have been able to also work on the recoveries and which was a focus area for the last 2-3 quarters. And we had also, I would say, given that commitment in the previous calls that we will certainly bring down the NPLs and the Stage III accounts. And there was a decent visibility because we were working on those accounts for a fairly long period of time. So that has now come through, and that has given the movement that you have just referred. As far as your first question is concerned regarding margins, this is the fifth quarter in a row, back to back, that we have delivered margins at 3% or around 3%. So this is not a one-off. It has been happening for the last five quarters, and you would have seen the trajectory ever since we have been able to take the benefit of the higher interest rate regime and pass on the rate hikes. And to that extent, because of the fact that our liabilities, half of it is fixed and half of it is floating, we have certainly benefited from that model. In fact, going further, if you look at and compare the interest expense for the Q4 compared against Q3, you will find that there is hardly any increase. So we have really worked hard and renegotiated, as we mentioned in the opening remarks. We have renegotiated on some of the borrowings that we had, and we were able to pull down the interest expense, which has resulted in creating the gap between the interest income and the expense. So that has actually resulted. On top of that, we had a couple of resolutions of some high-ticket cases where we were able to collect the interest due on the NP accounts as well. So that has also helped. Got it, sir. Got it. Sir, and just one follow-up question on that. Just trying to understand this better. So what you just explained, I mean, resolution of high-ticket cases, and you were able to collect interest on that, and the same thing that you explained on the liability side, we seem to have benefited and maybe done better than many of our peers. So what you suggested, this NIM improvement that we are seeing in FY24 is more structural in nature, is the conclusion that I just wanted to draw. And sir, the other question that I had was on the asset quality bit. If I just look at our credit costs for the last maybe three years, four years post-COVID, they've been a little bit on the higher side. I mean, I must compliment you versus maybe FY22, 2023 levels. They have declined in FY24. Now, I mean, are we going to see that same trajectory, what you guided earlier, maybe 60 basis points in 2024 moving towards more 40-45 basis points for the next couple of years? And sir, if you can also give that segmental NPA breakup that you give in your earnings report. I will give you the segmentals. I'll first answer that question regarding the credit cost. Yes, credit cost, certainly now, we have reached a stage where the provisioning coverage PCR on stage III is, I would say, probably one of the best in the peer segment. And we will like to hold it at around these levels. This is something that we had indicated, I think, two quarters back. So that 50% PCR we have achieved. As far as the other data points concern, you can just note it down. I will quickly read it. You can note it down. Individual home loans, IHL, the stage III is 1.48%. It has come down from 1.71. Then non-housing corporate, it is now 30.65. It has come down from 40.75. In the non-housing individual, it is now 5.46. It has come down from 6.50. This is, I'm talking of the December quarter and the current March quarter. Overall, if you add all the pieces together, it is currently the Stage III, 3.31. In December, it was 4.26. This is useful. Sir, I mean, the other question that I asked was on the margins. This looks like sustainable margins now going ahead. A s far as the margin is concerned, you asked about the margin, right? Yes, sir. Margin, I think we are now in the territory that 2.7%-2.9% band can be delivered, I would say. That is certainly the outlook. Comfortably, that should come through. Got it, sir. And I'll come back in the question queue, but congratulations and thank you. Thank you. Thank you. The next question is from the line of Varun from Kotak Securities. Please go ahead. Hi. I'm audible? A udible. Audible, Varun. Audible. I just wanted to ask a question regarding the expenses. If you look at the expenses, they're up 38% year-over-year and 42% quarter-over-quarter. Is this driven by some wage hike or a pension provision or something of the startup? Is it just on growth of employees? No, Varun, if I talk of Q4, the increase in expenses which probably led to a lower PAT as compared to PBT. There was some one-off expenses which we had to take care of in Q4. Just to explain further, we had to make provisions for areas of wage revision. The wage revision of the employees is due now. So we had to make a provision for areas of wage revision to the tune of INR 32 crore. The method of calculation of gratuity also went to change. And because of that, our liabilities increased by INR 22 crore. A provision for that had to be made in Q4. Then tax expense, DTL, deferred tax liability of past years, we had to increase it by INR 227 crore. So slightly, the tax portion is slightly skewed, much on the higher side. The other part of it, ECL, yes, we also had to make an additional ECL provisioning of INR 100 crore to increase our PCR to 50, slightly higher than 50% as then discussed by or as directed by our board. These were the one-offs that took place in Q4, as a result of which your operating expenses and expenses are slightly seen at a higher level. My second question is regarding the disbursement growth. So right now, we have done about 15% in 2024. But is this the sustainable rate that we should expect for next year, or will this go down? No, no. I don't think there's any reason. I don't see any reason why it should go down. Yes, in the beginning of the year, we were constrained by these technological changes and the expansion in the organizational structure. But now, things have stabilized. And whenever we, of course, we opened 44 new cluster offices and 50 new area offices. Those delivered in the Q4. And I think the Q4 was where we should have been right from the beginning of the year. So the 15% growth which we have shown in the Q4 is what we were expecting all through. And yes, I'm looking for a double-digit growth in this year. There is no reason why I don't see any hindrances in the market, in the demand, which would hold us back. Thanks. Those are the questions. Thank you. The next question is from the line of Avinash Singh from MEmkay Global. Please go ahead. Yes, sir. Thanks for the opportunity. A couple of questions. The first one, if you can provide some guidance on growth part, I'm not sure if I have missed this, particularly when you are going relatively slower on the project finance side, that's good. But if you can provide the growth guidance for the next year. And the second question is that, on one hand, you said that the margin improvement is a bit structural, and you have done underlying work to improve it. But again, you are guiding for 2.7%-2.9%, whereas the current year margin is 3.1%. So that's question two. And if I look at note 10, it says about repossessed asset held for sale reclassified. So that was INR 122 crore gross. You have provided already INR 18 crores. What is the initial provision now you have done on this if it has gone to Stage III? So these are my three questions. Thanks. Sorry to interrupt. Ladies and gentlemen, we have lost the management line. Please stay connected while we reconnect them. Thank you. Ladies and gentlemen, thank you for patiently holding. We have the management line back with sir. Thank you. Avinash, you can come in again. Yes. So I had three questions. The first one was if you can just guide for FY25 growth, particularly because, I mean, you are now going reasonably slow on the project finance side. So in that backdrop, what disbursement or AUM growth you will see for FY25? That's number one. Number two was that, you said on margin improvement that there are structural factors, and you have done certain work that is helping you deliver better margin. But you are guiding for 2.7%-2.9% vis-à-vis a current year margin of 3.1%. That's second question. Third question, on note 10 to your accounts, that INR 122 crore gross loan that was classified as asset held for sale to now, again, loan at amortized cost, because as you said that it would have gone in stage III, what is the additional provision you have taken on this particular list? Thanks. Avinash, coming to the disbursement front, yes, the project loans have shown a de- growth. It is not that we have gone slow or anything of that sort. Yes, the project loans, we have been very. I would use the word we have been a little bit guarded and conscious about project loans going by the legacy we have, a large buildup of NPAs in projects related to the loans we gave about five years back. Yes, we are slightly guarded on that, but definitely, we are not going slow on project loans. Yes, beginning of the year, as I said, we had some issues which we had to contend with. But Q4, we are back on track. So as far as disbursement is concerned, definitely a double-digit growth in disbursement and in the loan book is very much in the horizon for FY25. Coming to NIMS, I'll ask my CFO so they could take over NIMS. Avinash, actually, when we indicated 2.7-2.9, that's a wide band, I understand that. But the delivery will be closer to the higher end of the band for sure, and it will be done comfortably. We have closed the year with around, say, 3.08 for the full year. There is a possibility that there could be a rate cut or something like that. But overall, we are very confident that by and large, the steadiness will be there with a slight variation at most. Then our question regarding the movement, that was basically because of the index change. Now, earlier, it used to be in the held for sale category. Now, it will be treated as a part of our overall loan portfolio. So there will be no change in the provisioning because earlier also, the assets were provided for. It will be just a reclassification. Whatever provision was being held for that particular asset category will now get transferred to the general pool. That's all. But I mean, you said it is under Stage III, and you are indicating nearly 15% cover. So that is where I got confusion. So that was because the index requires the provision to be made depending upon the underlying value of the security. So there will be maybe INR 10 crores-15 crores difference will be there. That's all. Thank you. Thank you. The next question is from the line of Gaurav Kochar from Mirae Asset. Please go ahead. Hi. Good morning. Morning, Gaurav. A few questions. Firstly, on the provisioning, if I look at Stage I, Stage II, Stage III, this quarter, I observed that we have increased the cover on each of the three buckets. Going forward, as you alluded to earlier, that you are satisfied with Stage III cover of 50% plus, and we are already there. And incrementally, assuming the PD, LGD assumptions do not change materially for the other buckets, and you're guiding for 40 basis point credit cost, where will that come from is my question. Because if I read correctly, I mean, I mean, barring write-offs, the organic Stage III reductions, both in FY2023 and FY2024, were quite healthy. You had almost negligible net slippages in each of the two years. So going forward, if the net slippage number is going to be broadly similar, where will the 40 basis point provision come from? So Gaurav, actually, the 40 basis points, if you see this year's provisioning trajectory also, so what we do is that whenever an asset moves onto a particular stage in terms of hardening of the bucket, say, for example, within the Stage III itself, if there is further hardening, we increase the provisioning there for these particular accounts. This year also, we have done the same. For example, whenever a Stage III account has remained in Stage III, but it has moved from, say, two years to three years. So there, we have increased the provisioning through a management overlay. Understood. So what? Finally, the objective is that once it touches 100% provisioning, it will be written off. All right. Technical write-offs, again, let me again mention that these are Technical write-offs only. All follow-up and recovery action continues as it is. Got it. Just two questions from this, two follow-up questions. One, off your total INR 6,200-odd crore ECL, how much is management overlay? And secondly, how big is this technical write-off pool now as we speak? Technical Write-off pool will be closer to INR 4,000 crore now. The Management Overlay of the INR 6,270 crore will be roughly around INR 1,700-INR 1,800 crore. All right. Understood. Understood. And sir, with respect to the, I think, in the previous call, you alluded to some transaction in pipeline for your wholesale book in terms of ARC sale or otherwise, the stretched accounts. So is that something in pipeline for FY25? And how much broadly, maybe a ballpark number that we can expect can come in this year? Yes, Gaurav, yes, we have taken up ARCs last year. In fact, as a test case, we have put up a large account to the ARCs. I think they'll be coming back. Some 6, 7 ARCs have shown interest. They will be coming back to us. We would be likely taking a call in probably, if not this month, in the next month. So let's see how it goes, how these ARCs go. And then we'll take it forward. Difficult to give a guidance right now because it's not a very clear established practice in the company. We're just testing the waters right now. But definitely, if our experience is good going by this big account we put up on the block, yes, we would be exploring the ARC option also for all the sticky and the hard loans which we feel are difficult to resolve or settle. Right. Got it. Got it. And sir, just last question on, again, the loan growth or disbursement growth target. If I look at full year this year, because we had an impact in the H1, the disbursement overall were INR 58,000-odd crore this year. Next year, if you are targeting a double-digit growth, I'm assuming a 12% number here. If we have to achieve that, the overall disbursement needs to be closer to INR 70,000-odd crore for next year. So are we confident of delivering, let's say, FY25, INR 70,000 crore disbursement? Yes, Gaurav, no reason. Right now, honestly, if you ask me, there is nothing, as I said, which should hold us back from achieving those numbers you've just quoted. Yes, we are targeting that. Great. Great, sir. Congrats on the quarter and very good luck for the coming year. Thank you. Thank you, Gaurav. Thank you. The next question is from the line of Mohit Jain from Tara Capital. Please go ahead. Hello. G ood afternoon, sir. And congrats for a good number, sir. Sir, I just wanted to understand on the main part, if I'm just comparing from December to March, incrementally I'm seeing the accumulative interest yield has gone down, and the cost of funds have increased, both in the form of add-on rates, the cost of fund, as well as incremental cost of fund. So then, is the increase in them purely because of the recovery from the NPA cases, or is there something else to it? No. If you look at it, again, I would like to repeat what I just said in the previous question. Interest costs have not increased, but interest income has increased. But if I'm just looking at the interest, the yield, or the incremental cost of funds. I'm coming to that. I'm coming to that. I'm coming to that. But if you look at it that way, the interest expenses remain absolutely flat. No increase. Interest income, on the other hand, has shown some increase because of the increase in asset book, whatever little it is, but it has come through. So that has actually expanded the net interest income. As far as the yields and cost is concerned, that is actually the number which exists on the last day of the quarter. It does not reflect the entire quarter. How you will calculate if you just take the interest expense and the interest income, which are the audited numbers available along with our financials, and you also have the opening and closing book, that will give you a very good understanding of the trajectory, which has actually shown an increase. Sir, just to reconfirm, you are saying for the next year loan growth also, we are expecting the AUM to grow in double digits? Mohit. Thank you, sir. Thank you. The next question is from the line of Subhankar Mishra from Philip Capital. Please go ahead. Good morning. Two questions. The first one is on the various appointments that we have done. So a lot of senior guys have come in from LIC who are in their late 50s and would be probably decent to housing finance business. So my question is that why are we not appointing professional managers in regional zones or zonal managers to run the housing finance business instead of taking it from the parents who are in their late 50s, who may or may not have commensurate experience in running a housing finance business? And why are we giving close to an INR 500 crore dividend when we have so much of bad assets? So if we can conserve on that, we can probably add to our management overlay. That's the first. Second is, at a point in time, our gross Stage III on the corporate book was 45%, implying that 50% of the book was bad. So why don't we just run it down and we say that, "Okay, we'll only be a home loan company or catering to individuals, and we won't do corporate assets at all"? Thanks. Subhan Anashu, coming to your first question on the 6 or 7 new people who have come in from the promoters as senior management. T his has been a tradition in this company - I don't know since when, but since long, I'm sure - when the promoters do nominate their people as senior management personnel. So this is something which the promoters have to decide on, on getting professional people on board, as you are suggesting. So that was question number 1. And your question number 2 was I think question number 3, if I remember, I'll ask you on question 2 later on. Question 3 was on our corporate loan book, the project finance book, as you said, where 50% of the book is in stage III. L et me tell you why we are. Your question was, "Why don't we completely drop the book and focus completely on individual housing loans?" L et me tell you, if you look at the corporate loan book right now, approximately INR 5,000 crore-INR 6,000 crore of portfolio still remains there. And if you look at this bad debts or stage III exposure at default of the corporate loan book, this all pertains to loans given during a particular period, if I may be specific, between 2016 and 2019. So it is not that the corporate loan book or loans given during the last three, four, five years have been bad. Yes, there was a particular period in our history when we did get loans which were not properly which probably went bad. So I would not say that we'd give up on this project loan book because we do see demand coming from this sector, and there are a lot of good builders, slightly riskier, I do agree, but of course, margins also are available. So we are not looking at dropping this entire loan book altogether. Yes, we would be cautious. We would be slow, but definitely, we'd like to do business in this segment also. And what was the second question, Gaurav? I just missed it. Sir, why are we giving dividend of roughly INR 500 crore to the parent? We can add it to the management overlay and not give dividend at all, right? See, Subhan Anashu, what you said technically, I mean, it is a correct observation. But the fact is that we have been a dividend-paying company since the inception, and we would like to continue with it because we have got a decent number of retail shareholders as well, for whom probably this payout is a bit important as compared to many of the institutional investors for whom it may not matter much. But for the retail investors, and we have got a sizable number of retail investors, for them, it is important. We have increased the dividend payout only marginally from 425, that is, INR 8.5 a share to INR 9. And that is also after three years. Three years, we did not increase. This is the fourth year. And this time, the profits have also been quite good. I would like to also add that as compared to last year, the payout ratio has actually come down significantly. Till last year, for the last almost 10, 15 years, the dividend payout ratio used to hover around between 16%-20%. For FY24 dividend that we have declared yesterday, the payout ratio is just a little above 10%. It is a little 10.5%. Understood, sir. Look forward to tremendous growth in FY25. Thank you. Thank you. Thank you, Subhan Anashu. Thank you. The next question is from the line of Rajiv Pathak from GeeCee Holdings. Please go ahead. Good afternoon, sir. My first question is on the spreads and the margins. So I think Sudipto already alluded to the fact that the spreads are at the period end and probably the margins and everything are on an average basis. So if you can have a comparable spread, so the yield and the cost number on an average basis, that would be helpful. See, actually, if you look at the on an average basis, I think the cost number is working out around somewhere around 7.3 or 7.4. So then even the spread would have shown a similar] an increase, right? So you have. The spread also would have, you're absolutely right. The spread also would have shown a similar trajectory between the period and the comparison, which I tried to explain to in the previous query. O n this margin especially, so you would have a good amount of recoveries that have happened in this quarter. And I think you touched upon that you also have the interest recovery that you have done on those accounts. What would be the amount that would be sitting in that NII line? It would be a little less than INR 100 crore. Less than INR 100 crore? Yeah. Sudipto, if you can share the. Actually, if you look at the comparison between Q3 and Q4, it is more or less 6. Sudipto, if you can share the incremental yield and the incremental cost? Just a minute. The incremental yield on our, I mean, combined asset book, just a minute. I'll just share it. Incremental yield is around 9.9. And it is 7.0, sorry, this is the weighted average. That is 9.9, and the cost is around 7.76. This is all the. This is the outstanding, right? Yes, outstanding. On incremental basis? On incremental basis, the borrowing cost is 7.84 for the full year. And the incremental yield for the full year put together is something around more than 9.4 or thereabouts. Just one last point on the recoveries. I think you guys are doing a good recoveries this quarter. How much would be that amount, and what would be your target for the next year? D ifficult, Mr. Pathak. Very difficult to quote a number or as such. But definitely, yes, there has been a lot of focus on recovery, and we have done a lot of hard work in the previous financial year, FY23/24, which is reflected by the Stage III, 80% of 3.31 down from 4.37 at the end of 31st March of 2023. Yes, I'm pretty sure the hard work we put in last year will bear fruits and results in this current financial year. And definitely, you can see the percentage Stage III, 80% going down even further. But difficult to quote a number as such. I think trajectory-wise, it is now very clear, very clear, the way we have put in a lot of efforts in FY2024, especially in the second part of the year. And we are given this, you can say, guidance or indication also that we have got very good visibility. And that visibility, it continues. And as we mentioned, some good big-ticket cases, we are moving in terms of ARC. Ongoing follow-up continues. And that now we have reached a stage where probably from here, it will go down only. It will be fair to assume a downward sloping NPA numbers versus the spike that we saw in the interim quarter last year? So now, I think trajectory-wise, it is very clear. It is a downward trending. Thank you so much, and wish you all the best. Thank you. Thank you. The next question is from the line of Abhijit Devjal from Motilal Oswal. Please go ahead. Thank you for this follow-up. Sir, again, coming back to the NIM, just wanted to understand, in addition to those recoveries that we have had from some of the accounts where we have seen resolution, is there also some a product or sorry, the customer mix change that you are seeing in your IHL book? See, actually, if you look at on a year-on-year basis, the incremental yield for the IHL, incremental yield, has increased because we got the benefit of a higher interest rate regime in FY24 as compared to the whole of FY23. So that has helped. Got it. Sir, just to clarify, I mean, all those one-offs that you spoke about, especially on the OpEx side, employee expenses, they are in the nature of one-offs, right, which essentially means that from next quarter onwards, we will again go back to those INR 140-150 crore of quarterly run-rate in terms of employee expenses. There were three one-offs in the expense line. And if you look at it, there are two which had impacted the employee cost and one which is a non-employee cost. So as far as the employee costs are concerned, there is a wage revision arising, which is a one-off we have always been providing, but this is slightly more to bridge the gap. So that has already been done, INR 32 crore for that, arising for gratuity, some little change in the calculation. That is a one-off that is done. These are the two on the employee side. So now, if you compare it with the expense on the employee benefits, these are the Q3, you'll get a clear picture of where the trend line has moved. Now, coming to the non-employee expense, predominantly, it was a publicity of around INR 15-16 crore, which and if you recollect last year, FY24, during the first six months, there were a lot of operational issues, and we had gone a little slow on the publicity and the visibility exercise, which has picked up in the third and especially in the Q4. It has also given us good results on the marketing side. So that has been a INR 15 crore that is in the Q4 itself. Now, if you look at the non-employee expense on a full-year basis, FY23 compared with FY24, you'll find that the growth is about 9%. Right. Right. It's that 9%. Got it, sir. I think, I mean, this is useful. That's all from me. Thank you so much. Thank you. Thank you. The next question is from the line of Akash Gohel from Tara Capital Partners. Please go ahead. Hello? Hi, Akash. Hi, sir. Sir, just wanted to confirm the disbursement expectation that you were sharing. So were you sharing a double-digit growth on the FY24 base, or I think you alluded to a INR 70,000 crore disbursement also being possible. So that would be a double-digit growth on FY23 base. So just that confusion I had. No. See, FY24, our disbursements were INR 53,500 crore, right, approximately. And if you compare it to—sorry. See, total, it was INR 58,000. INR 58,937 crore, be precise. So definitely, a double-digit from this. And even if you compare it to FY23, INR 64,115 crore, I would say a double-digit from there also is not, I would say, unconceivable. We have put all the worries behind us. The Q4 of FY24, growth around about 15%. Yes, definitely, this gives us the confidence that FY25, there will be a double-digit growth whether you compare it to FY23 or 2024. Got it, sir. Thank you so much. Thank you. Thank you. Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead. Am I audible, sir? Deepak, you're audible. T hank you very much, sir, for this opportunity. So just first up, the areas from gratuity adjustment, what was the quantum you mentioned? 22 crores. So INR 32 crores is wage revision, and INR 22 crores is gratuity, right? Gratuity.. But your other expense, if you see the increase has been much sharper, right, I mean, from INR 70 crore to INR 115 crore. And publicity expense is about INR 15 crore. So increase is about close to INR 45 crore, right? So there is some INR 30 crore increase also in other expense, which you are saying is not one-off. No, see, actually, Deepak, right? Yes. That's correct. Deepak, actually, you have to see it in the full-year basis. As I mentioned, publicity is one of the lumpy ones. There are other promotional expenses which we did not incur in the H1 of the year, which got pushed to the second and Q3s, especially in the Q4. So that is the reason why I said that you have to look at it on a full-year basis. I got it. So what is the cost-to-income we are looking at in FY25? Cost-to-Income Ratio has come down. That's a very good question you have raised. Cost-to-Income Ratio last year was 15. FY24 is around 13. Correct. Correct. It was around 13.3%. So how do we see that for FY2025? I think it will remain by and large steady. It will remain by and large steady. Obviously, we will be working towards reducing it, but it will be remaining by and large steady. At 13%-13.5%? Yes. Ballpark, that could be the range. Fair. And given, I mean, YOY, you have mentioned a lower band for NIMS, right, as against 3.2% that we have done this year, we are looking for in a band of maybe 2.7%-2.9%. So on that backdrop with the steady cost-income, do we expect our ROA to drop in FY2025? See, first of all, is that we have not delivered 3.2 this year. We have delivered 3.08 on a full-year basis. At 3.1? F or this quarter, it was about 3.1 round, right? I mean, you should look at it on a full-year basis because we are, I mean, discussing on a full-year number basis. Yes. In fact, what I mentioned earlier also in one of the previous queries is that the delivery will be towards the higher end of the band, and that will be done very comfortably. Obviously, there is a possibility that there could be a rate cut during the current financial year because of RBI action, etc. So we're just trying to keep that as some a buffer. But for all practical purposes, it will remain steady. In the ROA, ROA also, we are looking at. ROA is just the derivation of the profit numbers. Correct. Fair enough. I think that would be it from my side. I think all the very best to you. Thank you so much. Thank you, Deepak. Thank you. The next question is from the line of Sanket from DAM Capital. Please go ahead. Mr. Sanket, your line has been unmuted. Please go ahead with your question. Hi. Am I audible? It's audible. Audible. Audible. Sir, just to reconfirm, you said the technical write-off pool that we have is around INR 4,000 crore and overlay is around INR 1,700-INR 1,800 crore. Is that correct? Yeah. Sure, sir. All other questions were answered. Thank you, Sanket. Thank you. The next question is from the line of Mahrukh from Nuvama. Please go ahead. Hello, sir. Hello, Mahrukh. Yes. Hi. So I just wanted to know that suppose whenever the rates are cut, what will be your reset? So say if repo rate is cut today, when will you pass on lower rates to borrowers? After what gap? Generally, next quarter. Beginning of next quarter. Got it. So if the rates are cut today, you will pass it on in the Q2. That is? Yeah. Thank you. Thank you. The next question is from the line of Kapil Kumar and Apsin Shah from Shubh Mangal Investment. Please go ahead. Hi, sir. Thanks for the opportunity. So what are the technical write-offs? Can you explain it? I just am not able to follow it. See, technical write-offs are write-offs which is basically an accounting treatment. So it is removed from the books of accounts, but the loan continues to be there in the ledger, and all follow-ups, recovery, legal, everything continues. You can say just it's a cleanup. But then what will happen to the provision for that? Ladies and gentlemen, we have lost a management line. Please wait while we reconnect them. Thank you. Sorry. Hello? Hello. Yes. Yes, sir. So my question was, can it happen only after they are provided 100%? Yes. Yes. Yes. Only cases where 100% provisions have been made can be technically written off. Thank you, sir. One small suggestion, if you can make it as a part of presentation, all segmental NPAs and provisions for those particular sub-segments. We'll do that. Next quarter, we'll do that. Thank you, sir. All the best. Thank you. Thank you. The next question is from the line of Puneet Bhallani from Equirus Capital. Please go ahead. Hello, sir. Am I audible? Amit, you're audible. Just to confirm one thing, the INR 1,000 crore is the write-off for this quarter, right? Yeah. And what will be the recoveries? The recoveries from the write-offs? No, recovery, as in the entire pool from GNP recovery. Recovery, actually, almost INR 500 crore we have recovered. Got it. Thank you. Thank you. The next question is from the line of Rajiv Mehta from YES Securities. Please go ahead. Good afternoon and congratulations on strong performance. I have a few questions. So Sudipto, first, on this incremental cost of fund being 7.9% and the stock cost of fund being 7.76%, would this understanding be correct that the stock cost of fund may not go to incremental cost of fund because you may, even in the future, renegotiate on the current borrowings? Actually, if you look at it, the incremental cost is only because of the Q4, especially the March phenomena where there was a tremendous liquidity pressure and negative liquidity situations. Now, the same number in April will be much, much less. Got that. On this senior management personnel appointments, I think I see you appointed 5 GMs and 4 regional managers. Is it augmentation of the senior management team, operational management, or is it the replacement of people who have gone? Can you give more color on that? No. This is just a replacement, Rajiv. This is just a replacement. Understood. And just two more things. What is the assessment of recovery from the return of pool, which is INR 4,000-odd crore? So you can sell to ARC for cash, and then you can also recover it yourself. But can you just give some ballpark number that out of this INR 4,000-odd crore, what is the current recoverability assessment? Praveen, Rajiv, difficult to give you a number as such because recoveries is always these are all sticky loans. Most of the INR 4,000-odd crore, especially in the builder book, these are all in litigation, IBC, NCLT, and all that. And litigation, as you know, is always a slow process. Litigation always leads to further litigation. So difficult to point a given number to that. But definitely, I can give you the trend is very clear that the asset pool is improving, and our EAD exposure at default, especially stage three, is coming down. This will continue. This will definitely continue. Got it. Just lastly, how do you define Management Overlay as INR 1,700-INR 1,800 crore? Is it just what is over and above the ECL model? That is over and above the ECL model. Here, we apply our own judgment to loans which are in various stages, stage one, stage two, stage three, where we feel that there is some stress buildup or there is some additional risk. So we do make a judgment and provide an additional provision. So that is called management overlay. That is basically you can say a buffer. Buffer over a buffer, actually. And so what is the view? I mean, how much more buffer we would build because I'm trying to link it to credit cost. Stage Three, I think we have already reached a stage which is very good in terms of comparison with our peers, probably one of the highest, if not the highest, in our peer group. So I think that way, it is absolutely fine. Stage One, Stage Two, there are no challenges because Stage One I mean, Stage One is standard assets, and there also, we have done a decent amount of provision. Stage Two, also, we have done a decent amount of provision there. Don't see much space. I think there is no space further in buffering up. Only what actually happens is that the Management Overlay comes in when in Stage Three itself, it moves from, say, a 2-year NPA to a 3-year NPA, or from a 3-year NPA, it moves on to a 5-year NPA bucket. Got that. Got that. Thank you so much and best of luck. Thank you. Thank you, Rajiv. Thank you. Ladies and gentlemen, that was the last question for today's conference call. I would like to hand the conference over to the management for closing comments. Thank you, friends. In conclusion, I would like to thank you all for your continued support, and I look forward to your support in future as well. As in FY24, I believe we did a reasonable job, and the results for the entire year as a whole were good. Yes, many areas of improvement, and we, as a management, as a company, we are focused in all these areas. Looking forward to a fantastic FY25 and looking forward for your support in future as well. Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.