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, sir. Thank you, Siddhant. Welcome, everyone, to the earnings call of LIC Housing. From the management team, we have Mr. Tribhuwan Adhikari, MD and CEO, and Mr. Sudipto Sil, CFO, to discuss the results. I would request Mr. Adhikari to share his key remarks on the results, post which he'll open the floor for Q&A. Over to you, sir. Yeah. Thank you, Praveen. Good morning to all of you, and welcome to the post-earnings conference call of LIC Housing Finance Limited. As you are aware, LIC HFL declared its Q1 FY25 results last Friday. Before I start the highlights of the Q1 results, I would like to outline the few developments in the economy which has taken place over the last quarter. As announced in the Union Budget of 2024-25, the government continues to focus on the infrastructure development and affordable housing, including fresh allocations for urban housing and PMAY. The budget is expected to improve the housing demand and foster socioeconomic growth. As far as interest rate scenario is concerned, a gradual downtrend is expected in the current year. However, the pace of the same will depend on the incoming data and outlook of the domestic as well as the global markets. Several developments have taken place globally, and we expected, we expect RBI's August monetary policy statement to provide good amounts of clarity on the way forward. Now, I would like to share the key financial highlights of the quarter. Total revenue from operations were INR 6,783.67 crore, as against INR 6,746.51 crore for the corresponding quarter of the previous year. There was a marginal increase. Our standing loan portfolio stood at INR 286,665 crore, as against INR 276,440 crore as on thirtieth of June 2023, reflecting a growth of 4% Q-on-Q. Year-on-year, out of which the individual home loan portfolio rose to, stood at INR 246,275 crore, as against INR 231,087 crore, up by 7%. And this IHL or the individual home loan portfolio comprises 85% of the total portfolio. Total disbursements for the quarter were INR 12,915 crore, as against INR 10,856 crore, up by 19%. Out of that, disbursements in the individual home loans were at INR 10,932 crore, as against INR 9,419 crore, up by 16%. Disbursement in the project loans were INR 521 crore, against INR 251 crore for the same period previous year, up by 108%. We have seen disbursement pick up gradually during the first quarter, and this has continued in the early weeks of the second quarter as well. Net interest income stood at INR 1,989.08 crore, as against INR 2,209.44 crore for Q1 of FY 2024, and INR 2,237.60 crore for Q4 of FY 2024. There is a Q1Q decline in NII, particularly due to low collections from NPA accounts in Q1 of FY 2025, as against a collection of approximately INR 230 crore from NPA accounts in Q4 FY 2024, which included some one-offs. INR 90 crore only was collected in Q1 of FY 2025. Also, interest expenses increased by about INR 100 crore as compared to Q4 of FY 2024, due to increase in the average liabilities from Q4 of FY 2024 to Q1 of FY 2025. Net interest margins for Q1 FY 2025 stood at 2.76%, as against 3.21% for Q1 of FY 2024, and 3.15% for Q4 of FY 2024. Profit before tax for the quarter was at INR 1,628.43 crore, as against INR 1,648.99 crore in Q1 of FY 2024, and INR 1,476.18 crore for Q4 of FY 2024. Profit after tax for the quarter stood at INR 1,300.21 crores, as against INR 1,223.66 crores for the same period of the previous year, and INR 1,090.82 crores for Q4 of FY 2024, thereby a growth of 19% over Q4 of FY 2024. In terms of asset quality, Stage 3 exposure at default as on June 30, 2024, stood at 3.30%, as against 4.96% as on June 30, 2023. Total provisions as on June 30, 2024, stood at INR 5,670 crores, reflecting a provision coverage of approximately 50%, as against 42% as on June 30, 2023, and 51% as on Q4 of FY 2024. A technical write-off of INR 736.91 crore has been made in the quarter. On the funding side, our cost of funds remains at 7.76%, same as the number as on 31st of March 2024, despite the elevated yields in the market during Q1. Our incremental cost of funds stood at 7.82% for Q1 of FY25, slightly lower than Q4 of FY24. With this brief introduction, I would like to invite you for your queries. Thank you. Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on 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'll wait for a moment, as the question queue assembles. The first question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. ... Yeah, good morning, everyone, and thank you for taking my questions. Just three questions. First things on margins. So, I mean, while we have already disclosed in the presentation that our recoveries were lower from NPA accounts QQ, I mean, just wanted to say that, I mean, if these things can be disclosed in the quarter itself, right, would help all of us. So that was one suggestion that I had. But more importantly, given that you're now working on asset quality resolutions, how should we kind of look at margins in the context that the recoveries actually tend to make it very volatile? That is the first question that I had. The second one was on growth. So do you remember, I mean, at the beginning of this year, your target for a double-digit loan growth, which I'm assuming was 10% kind of a grown growth, versus that, the delivery in one Q kind of leaves a lot to be desired. So, I mean, how are we now kind of going to get to that, 10% growth in this year? And lastly, sir, when it comes to asset quality, and more particularly, the provisioning cover that you have maintained on Stage 1 and Stage 2, again, a very sharp decline that we are seeing, in your Stage 1 and Stage 2 provision cover. While I understand that a lot of these things come from the ECL model under Ind AS, but I mean, if you can just explain what kind of leads to this volatility in the provision coverage. So those are my three questions. Thank you so much. Yeah. So, yeah, Abhijit, yeah. Thank you. I've noted the three questions. I'll come to the growth part of it first. Yes, at the beginning of the year, we had given a guidance of a double-digit growth in the portfolio, and at the end of the quarter for the first quarter, we are at around about 4%. Agreed, this is not what I would say the markets would expect or even we expected. We expected slightly higher growth. But if you look at our disbursement, we've done pretty well in our disbursement. So our growth in disbursement is about almost 19% in Q1. The reason why probably your portfolio growth has not, I would say, reflected in this is because of an average. Our basic assessment is about 4% of our portfolio is natural wear and tear, or a natural erosion in the portfolio because of prepayments and repayments. So approximately about what? INR 11,000 crore-INR 12,000 crore every quarter is what goes off our books. And rewriting pressure is still there, though it has subsided. Though it has subsided, but there is still a lot of rewriting pressure, especially our the higher ROI loans are being rewritten at a quite a faster rate, at as compared to what we were expecting. So growth right now, yes, slightly muted at 4%, basically where we were at the end of the financial year last year. But we expect because our, we see a good, growth, coming up in both our retail and our project finance books. This is in Q1, it is 19%, and we are witnessing a slightly better growth in the early part of, July. So we expect this to pick up. And, coming forward, we are also having a relook at our rewriting rates and, our overall, rate of interest. We are having a relook at it. Probably will be coming out with, reworked rates, in the near future. So maybe, that will also help, coming, bring down the, the prepayment and the prepayment and repayment and rewriting also. So all these put together, we expect that, yes, we are still maintaining our guidance of, double-digit, portfolio growth for the year. As far as margins are concerned, yes, the margins have been down 2.76 at the end of this quarter, down from 3.15. Slightly lower than what we were expecting. But yes, we have given a guidance in the beginning of the year. If you recollect, we have given a guidance of anywhere between 2.7-2.9, and we are very confident of maintaining those margin guidance what we have given. Yes, bit of the fall in the margins was because of the one-off NPA collections, which we had in Q4. As you all know, Q4 is normally a very productive year, and a lot of effort does go into all the recoveries and other parts of it. So as I said in my opening statement, against an approximate collection of around about INR 230 crore from NPA accounts in Q4, we've only been able to get in INR 90 crore in Q1 of FY 2025. So this was one of the reasons for the compression of, the net interest income and also the margins. Margins partly also because of, last year, if you remember, we had technological issues in the, at least the first half of the year. So we were slightly aggressive with our rates of interest, or, we offered very low rates of interest in the market to keep up our, disbursement growth. So maybe an impact of that was that as well. But I think we have hit the rock bottom, 2.76. I think, this is the bottom which we have hit. I don't think we're going to go any lower than this, and I expect margins in the coming quarters to strengthen, to be better off than what they are at the end of this quarter. What was the third one? What was the third? ECL, I would expect. Yeah. The ECL, Abhijit, ECL, we had a query why there is a lower provisioning in the ECL. Actually, if you look at the ECL model, and you're referring to especially the Stage 2 and Stage 1. So Stage 2, there have been upgrades to Stage 1, and some obviously movements to Stage 3 as well. But wherever, if you compare the Stage 1, then Stage 1 provisioning was around 24 basis points as of March, which has become 18... 18 or 19 basis points in June quarter. Now, actually, if you look at the way the provisioning is done vis-a-vis the ECL, one is the PD LGD formula, which gives you the basic output. Secondly, is also some of the accounts which have been upgraded, which have been upgraded from Stage 2 to Stage 1 in March itself, as a practice, it is retained. Though there is an upgrade in the account movement, the provision is retained at the Stage 2 levels for a curation period of a quarter. And when that gets over and the loan account continues to be in Stage 1, that particular provisioning is removed from the global pool. So, about INR 2,000 crore of such assets, which were already upgraded in the month of March, we were holding some provisions, which was to the tune of around INR 121 crore, which was pertaining to the Stage 2 level of provisioning. Once the curation period of it has been removed, it has been reversed. I hope I'm able to explain this. Yes. Yes, sir. Thank you so much. And sir, lastly, if you can just share the Stage 3 numbers across this four? I will do that. Okay. Before that, just one more small point regarding the one-off. I think in the previous call also, I probably would have indicated that there is a one-off from a project recovery. If we are able to—I'm able to recollect correctly, probably that was mentioned anyway, but we will take care in the future about this matter. Stage 3 for the IHL, individual home loans, is 1.38 as of thirtieth of June. Stage 3 for the non-housing individual, which is basically the individual loan against property and some similar products, non-housing individual is 5.39. And for the NHC plus project, non-housing commercial and project put together, the Stage 3 number is 33.06. Total Stage 3 for the in all three pieces of assets put together, 3.30. Got it. This is useful, and thank you very much. Thank you. The next question is on the line of Avinash from Emkay Global. Please go ahead. Yeah, hi. Good morning, sir. A few questions. The first one, again, a bit on the growth and margin. So you alluded to the fact that your, you know, margin also had some impact of the aggressive interest rate last year. Now, the thing is that, yes, if I look across the, you know, segments, individual housing, individual LAPs or even project finance, your rates are very, very competitive. And yet you are, for growth, you alluded to the fact that there were kind of elevated repayments. So my question here is that, okay, how are you going to balance this? I mean, even with this kind of competitive rate, your repayments are kind of leading to a fact that, okay, your growth is muted. So if you are going to again change growth, the margin is further come under pressure, or if you are going to focus on margin, then again, repayment can go up. So that is where the thing is, that your rate looks very, very competitive in the segment you operate. And particularly, if I look at the, you know, Stage 3 numbers, like 1.38 in individual housing, 5%+ for individual LAP, for that, your rate looks very attractive. So, I mean, how are you looking? I mean, you answered quite, sort of comprehensively in your question, but I still, I'm confused that how is this, margin growth balance thing is going to happen. If you focus on margin by increasing your yields, then you will see higher repayments, and if you are focusing on growth, then again, margin is going to be under pressure. So that's the first question. Yeah, Avinash. Yeah, I get what you're trying to say. Yes, you're talking about growth and margins together. Yes, I'll address the margin part of it. As far as margins are concerned, if you look at our book, 85% of our book is IHL, right? Individual home loans. Individual home loans, the kind of segment we are catering to at LIC HFL is mostly salaried, with excellent CIBIL scores. So this is a very, I would say, cream, sort of a creamy layer, or the cream of the market. And naturally here, we're facing a lot of competition from banks, especially banks. And then, we need to be competitive, to sort of get this segment on the book. But sir, if we look at, you know, the you know, asset quality in the individual non-housing, that LAP, again, there also your LAP is a bit different than markets, so are mostly the salaried LAP. But the 5%, the 5%, you know, Stage 3, there does not suggest, I mean, there should... It suggests a kind of adverse selection or the rates are not adequate. So what are you doing, to address this part? I mean, you're at a 5% Stage 3 ratios. Definitely this is not based on the portfolio and particularly at the yields you are offering. So what is your strategy on this individual non-housing? Sorry to interrupt, sir. The line for the management seems to be disconnected. Please stay connected while we connect the management back. ... Yeah. Hello. Avinash, are you there? Sir, yeah, so my follow-up question was more on individual non-housing part, because, I mean, as you explained for the housing part, but if I look at your individual non-housing or LAP, there also you are mostly into the salaried LAP. And yet the Stage 3 ratio is 5 odd%. Now, for that kind of a Stage 3 ratio, your yields again looks on the lower side. So now what is your strategy on this book? I mean, because this does not seem to be best for the customer, definitely there is some adverse selection, and for that you are not pricing it right. So what is the strategy on individual non-housing, sir? Thank you. Yeah, sure. Avinash, if you talk about our LAP, so whatever you see in Stage 3, yes, the percentage of LAP in Stage 3 is pretty high, but this is mostly legacy. This is mostly legacy, right? There was a certain phase in our business operations where we were very aggressive on the non-housing part and, yeah, we took some wrong decisions, decisions, let me say that. But of late, if you look at the last four years, specifically, I think we are pretty comfortable with what we've done in LAP. Of course, volumes have not been very high, largely because of the bad experience of the past. But whatever LAP we have sold, we are pretty comfortable with that. There are not too many NPAs in that. So, I would not say that we are not going to do LAP, or we are not going to get into the LAP business. We'll definitely get in there and put in the learnings we've made from the past and not make the same mistakes again. And yes, the non-housing loans, I would say, I mean, loans which are not the part of IHL, what we call the OHL, other home loans. They are definitely more margin-producing as compared to my IHL. So that is one area we are targeting, as we said this year, and looking for at least last year we had a share of about 12, 12.5%, 13% from our other housing loan segment. This year, we're looking to increase it to about 20%. So once if we can get an additional 7% from this other housing loans, definitely it will give me a boost to my margins. Okay, sir. Thank you. Thank you. Thank you, Avinash. Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead. Yeah. Hi, thanks for taking the question. So on this, collections from NPA account, you have indicated number of INR 230 crore for Q4. But if you can just help with respect to the full year, and what, what's the normalized levels of this, collections which are expected? And will it continue at 90? Could it be lower than that and again have some volatility in margins? How should we look at it? Because last three quarters, margins have been over 3 odd%, yeah. Actually, if you look at the collections from NPA, every quarter we do get some collections from NPA. But as I mentioned in the, I think, in the Q4, there were some one-offs, which was around lumpy, about, say, INR 70 crore-INR 80 crore, which was then in a particular project account, where we also got the interest income. To that extent, certainly, it is a one-off. Otherwise, also, there has been a decline in the NPA interest income collection from the NPA, because generally in Q1, there is slight depression in that particular item. So the collection efficiency in Q1 for the NPA accounts have also come down, which has resulted in this drop from INR 240-INR 90, or INR 230-INR 90. Otherwise, if you see the other, earlier quarters, apart from the first quarter, generally the, the collection from there is not, this, low. Yeah, so if we look at it last Q2 and Q3, how much was that amount, yeah? So that would help maybe just for comparison purpose when it comes over next two quarters. Put together, you can say that out of this INR 230 or INR 240, whatever was the collection in the fourth quarter, the INR 70-INR 80 for project is certainly a one-off. Otherwise, the collections in this quarter has dropped by another, say, INR 40-INR 50 crore in the first quarter. So roughly around, say, INR 130-INR 140, you can say is a steady state. That we should expect over next two quarters. Yeah. -to repeat. Yeah. So INR 90 crore generally, I mean, INR 90 crore is the gap. Okay. And within this, there are no accounts wherein there is some kind of a stress and that's the reason we didn't get the collection in this quarter, and it might not continue even for next two quarters. Collections overall has dipped in the first- Okay. Okay, okay. Got it. And- Just to add, Q1 is slightly, we are slightly slow off the blocks, right? It's natural after a hectic Q4, and plus, we... This company set up is such that Q1 is our promotions and transfer season, so a lot of movement of personnel here and there. So there is some disruption in terms of continuity. And plus, this year, if you think the heatwave and the elections and all that did have an effect. So overall, the collection efficiency for Q1 was slightly lower than what it was, what it is normally. So probably it had an impact on the margins. Yeah, yeah. No, so just wanted to get the sense in terms of the riskiness that this might, whether this will repeat in Q2 and Q3 or no. So whether it will be like normalized to 1.3-1.5- Yeah, INR 130 crores-INR 150 crores, or maybe we should still go with INR 90 crores kind of an expectation. Fourth quarter is always the highest in terms of collections. Always. Yeah. Okay. You can, you can expect about INR 150 crore per quarter, year-on-year. Per quarter over next two quarters? Yeah. Okay. Secondly, maybe you indicated in terms of why there was a release, say from Stage 1, but when we look at Stage 2, then obviously something has gone into Stage 1 as well. But was there like a management overlay has got released, which was created last time? What was the reason for INR 300-odd crore release in Stage 2? Yeah. I will explain this also. See, actually, when write-offs happen, there are two things, which one is write-off, and the other one is upgrades. Whenever write-offs happen across the board, the Stage 3 account related management overlay gets released. Then there are some accounts which gets upgraded or from Stage 2 to Stage 1, so obviously there will be a reduction in the PDLGD. And whatever accounts have actually moved from Stage 2 to Stage 3, the entire provisioning moves out from that bucket. So you have to actually compare what is the stock of account, the amount outstanding in Stage 2 in totality. Yeah, yeah. So maybe overall coverage being less than 4%, would it be, like, less than 4% now? Or maybe we should expect it to get towards 6-odd% again. It actually, for Stage 2 accounts, I will just, share with you the movement between March and June. Between March and June, there is a INR 300 crores-INR 350 crores reduction in the, overall, EAD, that is the exposure and declines- Yeah. For the Stage 2 accounts, part of which has moved to Stage 2, stay from Stage 2 to 3, and some upgrades from two to one. Generally, if you look at it, the focus is on maintaining an overall PCR of around 50% on the Stage 3 accounts. In overall provisioning, if you look at the Stage 1, that Stage 1, by and large, should remain in the band of around 18%-20% or thereabout will be a percent basis point up or down from that level. That has been the consistent number for the last several quarters. Stage 3 overall has remained around 50%, and we will strive to maintain maybe right now it is little less than 50%, but it will remain around 50%. Overall provisioning, that is the provisioning to the entire EAD, that also is one statistic that we monitor that remains around 2%. Yeah. So now, which is slightly down. Okay, so we will try to create towards 2-odd%. 1.96% or 1.97%. Yeah, so one- Very close to that. Okay, very close to that. Okay, got it. Perfect. Yeah. Thank you. Thank you. The next question is from the line of Piran Engineer from CLSA. Please go ahead. Yeah. Hi, team. Congrats on the quarter. Just a couple of questions. Firstly, what percentage of our bank borrowings are EBLR linked? Yeah. See, our bank borrowings of the total book is about 34%. Out of 34%, almost which is coming to, say, roughly around INR 80,000 crore-INR 82,000 crore. Out of that, about INR 40,000 crore is linked with external benchmark. Then, about INR 25,000-odd crore is linked to the repo rates, and about INR 17,000 crore is linked to bank MCLR rates. Okay. Okay, got it. So nothing is fixed in this, like short-term fixed? No, there is no fixed. It is, it is all floating, linked to various benchmarks, as I just described. Got it. Got it, Got it, got it. And then secondly, getting back to the earlier question, I'm a bit confused on your strategy between margins and growth. So will we lower our home loan rates to spur growth, or will we increase our home loan rates to improve margins? There's a bit of confusion around this. Thanks. No, definitely no, no. Lowering is out of the question. Lowering of... I think, as I've said, we are more than competitive, and, I think, whereas we need to be competitive, in, the certain segments or... But we also need to look at margins, thing. So basically, we are, what we are looking at, just to kind of give you an example, our rates are basically CIBIL based, right? So we have, for example, if I talk about the IHL, we have a big slab from, say, 750 to 800. So all people in the 750 to 800 bucket are being priced at the same rate. So what we are looking at probably is to have smaller baskets of, say, 7.50-7.75, and then 7.75-8.00, so that we price them better. And I think that is not going to impact my sort of business growth significantly. But at the same time, it's going to give me a little bit of better margins than what I'm doing. And then we are also looking at segment-wise repricing of our portfolio. In the sense, as I said, sort of trying to go into the self-employed segment a little bit more. This is one segment we've not been very focused on. We've mostly been into the salaried class. So, yes, what I'm saying, basically, risk-based pricing is being revisited. We're trying to price our products based on the risks of the borrower. So I don't think it's going to have any significant impact on our business growth story, but I think it will give us some comfort to our margins. Got it. And sir, you are mentioning that other housing loans is 12-13%, you'll take it to 20. This is, you're referring to LAP and all? I was... If you could just, reiterate that. Yeah. Basically, all products other than individual home loans. So it could be... Yes, it does include LAP, it does include LAP. ... Okay, so, home loan share comes down from 85% to 80%? Yeah. Yeah, approximately. Approximately. See, actually, if you look at it, just few years back also, the builder loan share was more than 5%, 5%-6%. Last three years, there has been a decline year-over-year. In fact, year-over-year, there is a decline of almost 26%-27% on the portfolio, and it has not increased, significantly. There has been, I can say the bottoming out has happened between December and, and March and June, but it has not been added significantly to give us a margin benefit. And overall, the builder share has come down to around 2% or something, of the total book now. Understood. Understood. Okay, so that, that's it from my end. Thank you, and wish you all the best. Thank you. Thank you. Thank you, sir. The next question is from the line of Raghav Garg from Ambit Capital. Please go ahead. Hey, hi, sir, most of my questions have been answered. I just wanted one clarification. You had mentioned that there was about INR 250 crore of NPA recovery for Q, and out of that, I think about INR 90-INR 100 crore was a one-off. So, is it fair to assume that, the INR 130 crore-INR 140 crore is, you know, a steady state run rate, for you in terms of, in terms of recovery every quarter from the retail pool? Yeah, actually, let us, I mean, I'll, I'll go through the numbers once again. See, out of the builder segment, builder segment, the INR 90 crore that we recovered has come down to about INR 10 crore, so that included about INR 70 crore-INR 80 crore of the one-off. So that one-off is particularly pertaining to maybe one or two accounts, that is certainly not going to replicate. So that is one thing which is very clear. Even in the fourth quarter, which I again explained, and again, I'm explaining, Q4 numbers in terms of collection are always seasonally the highest. So whatever numbers have happened, removing the builder segment on the retail book, that particular number is always the highest in the fourth quarter, which come down in the first quarter. This time it has come down a little bit more than normally it should. Understood, sir. But, you know, if we adjust, if you look at the adjusted net interest margin, you know, adjusted for 213 last quarter, 90 for this quarter, there is still about 20 basis points, decline in the margin- It is, you are looking at only the interest income part. Interest expense has also increased by about INR 100 crore, because between Q4 of last year and Q1 of this current year, the average liabilities have increased by about INR 4,300 crore. If you take the December liability, March liability, take the average, and again, the March and the June and take an average, the liabilities that we serviced in Q4, we service the liability service in Q1 has increased by about INR 4,000 crore. That INR 4,000 crore at a rate of around 7.8% rate of interest, roughly works out to be around eighty crores for the quarter. So that also has added to the margin gap, nil gap. The cost of funds is still, you know, flat, 7.6. Flat between March and June, but between December and March it had increased. If you see in December, my weighted average cost of fund, and, March, my weighted average cost of fund, the gap is almost 4-5 basis points. So initial part of Q4 was at a lower rate of interest, which spiked during March because of lot of, liquidity, pressures and the lot of state government borrowings, et cetera, which have happened. Thereafter, if you see, between March and June, we have been able to keep it absolutely steady at, 7.76. Now, after June, we have seen a little bit of revision on the money market benchmarks, like Treasury Bills, which has come down by about 16-17 basis points in the month of July itself, from 1 July to, say, around 31st of July. And probably if the rate of interest that decline continues, then little bit more improvement we will get on the 3-month T-bill, which with which there is a significant portion of our liability is linked. So there will be some improvement. Otherwise, also, if you see on a comparative basis for incremental cost of funds, the 7.84, which was the run rate for the March quarter, has come down by about couple of basis points in the first quarter itself. Understood. Sir, just one last question. This, improvement in Stage 2 that you are referring to, is there any, you know, color in terms of, some specific products, or it, is it, is it broad-based, say, you know, there would be, No, this is basically retail, retail side. It is retail side, it is not builder side. Understood. Thank you, sir. That's all from my side. Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Hi, good morning. I have one question, which is around our margins. I'm sorry to belabor on it. Given the fact that our non-housing, which is developer plus the non-housing and debt and corporate, used to be roughly around 23%-24% around three, four years ago, versus around 13%-14%. These things are actually margin accretive versus the salaried home loans, which is fairly competitive and take at least four, five years to break even. So, when we are targeting a 10% growth, are we talking about more of home loans than developer and non-housing, individual or corporate, or vice versa? Because then it will be slightly difficult to hold on to the margin guidance. That's the first question. Second is just a data point. You did give the Stage 3 numbers for each of the asset classes. Is it possible to give the PCR on each of the Stage 3? Thanks. ... Okay, coming to your first question first, regarding the margins. Yes, the strategy is very, very clear. As I said, 85% of our lending is to individual home loan customers, which again, you rightly alluded, is a very competitive market, does not give me any comfort as far as margins are concerned. So this year, as I said, we are trying to diversify from the individual home loan to what we call the other home loans. The other home loans is a mix of lending to corporates, lending to individuals for commercial and other activities, and of course, the builder book, right? As far as the builder book is concerned, in the first quarter, we've shown a pretty good growth. We disbursed about INR 521 crore against INR 251 crore last year, up by 108%. So the builder book is, yes, definitely we're looking at growing our builder book because it is from a margin perspective, it is much more comforting than the individual home loan segment. Yes, we are looking at growing our other home loan segment from roughly 12.5% of our book of our disbursements last year, to about 20%. So about seven percent, seven to eight percent increase. And actually, that is the increase in the non home loans or the other home loans. The home loan segment or the individual home loan segment is expected to go down slightly to somewhere around about 80%-81% from the current 85%. Does that satisfy you? Correct, sir. And just one observation here, sir, that though we are talking about non-housing, which includes the project loans and you know, commercial and individuals, but when we look at the peak number in terms of Stage 3 for project loans, it was at around 45%, implying that almost 50% of the book was bad. Yeah. How do we comfort the investors so that this time on, we would build a much better book? Yeah. Yeah, Yeah, as I said, look here, if I, if you look, if I look at my, builder, builder loans or the wholesale book, and if I look at the Stage 3 there, I've said it before, this has been a particular phase in our journey. Let me be very specific, a phase between 2016 to 2019, wherein, let me say, more than what, 60%-65% of what we disbursed went into, the NPA account bucket, right? But of late, if I look at the last five years, of course, there's not, there has not been too much of a disbursement in the, builder book, partly to do with our experience, of the past. But whatever we've disbursed, we are very comfortable with the, NPA, the NPMR, NPAs there. So I think we've learned our lesson. We've learned our lesson from the past, and what we are doing now or what we propose to do in the current year is be very, very cautious, pick on the good builders, builders with a good track record, and then lend to them and not re-repeat the mistakes we made in the past. Our monitoring aspect, which was almost not there in the past, we have built a monitoring team, a strong monitoring team. I think that will help us in sort of ensuring that we do not repeat the mistakes what we have made in the past or a particular period of our journey between 2016 and 2019. Understood, sir. The data points, sir, the PCR on each of the Stage 2? The PCR, PCR on the IHL and the NHI put together will be around 37%-38%. On the NHC project put together, it is 61%, 60%. Just one last question, sir. So 60% PCR on NHC and project loan would mean as much of LGD, right? Sorry? So 60% PCR on NHC and project loan would mean as much of LGD, 60% LGD on project loan and NHC put together. Not necessarily. See, there is a combination of various things. Provisioning is one thing, see, and LGD is a different output, because the value of security, et cetera, all these things comes to play. And mind you, this is considering the management overlay as well. So out of INR 5,270 crore, INR 5,670 crore of the total provision, almost INR 1,770 crore is the management overlay. So management overlay is over and above whatever is the PDLGD calculation coming for. Can you repeat the management overlay, is it INR 1,700 crore? So roughly about the total provision, 30% is the management overlay. Okay. Okay, understood, sir. This was very helpful, and best of luck for the future quarters. I look forward. Yeah, thank you, Shubhranshu. Thank you. Thank you. The next question is from the line of Nischint Chawathe from Kotak Institutional Equities. Please go ahead. Hi. Two questions from my side. You know, first is, if you could give some color on, the loan sanctions that have happened this quarter. You know, is the growth rate similar to loan disbursements? You know, just give us a sense in terms of the way momentum is heading. The second is on, you know, competitive intensity that you have seen in the last three months in the retail home loan business, whether it has increased or decreased. And, sorry, one more question is, you know, how is the incremental cost of funds trending or expected to trend in the next one or two quarters? See, I will take the last question first regarding the incremental cost of fund. We have seen improvement in liquidity in Q1 itself, and though the rates were sticky because the banks continued to increase the deposit rates, now with whatever you have seen happening in the global markets and the last one or two days of sharp decline in the yields- ... certainly augurs well as far as the cost of fund is concerned, even without any policy intervention. Liquidity has improved quite a bit. Of course, depending upon the outflows on the equities market, we cannot say what it is going to be for the next couple of days. Overall, if you ask, the trending lower, we are expecting improvement on the overall cost of funds. Incrementally, cost of funds will trend down. Whatever borrowings we have with the floating rate benchmarks will also trend down. We are already seeing about 16-17 basis points decline in the Treasury Bills. About INR 7,500 crore of liabilities will get replaced in this particular quarter because of the exits, and those were contracted at upside of 8%. Today, we'll be able to replace that amount of money very comfortably in the range of 7.76 or thereabouts. So there are a little bit of catch-up or little bit of space, we will get there as well. Yeah. And coming to the- Yeah. Yeah, coming, Nischint, coming to your first part of the question. Yeah, the sanctions, the disbursements were INR 12,915 crores, which were up by 19% as compared to last, the first quarter of last year. Sanctions were better off. Sanctions were up by 30%. The total sanctions in Q1 were INR 15,180 crores, out of which we disbursed INR 12,915 crores, almost you can say INR 13,000 crores. So we do have a buffer about INR 2,200 crores, which carries forward to Q2 of this year, and which would probably- 30% is in the individual business, or it includes all the businesses? No, this is individual retail. This is individual retail. Okay. Sure. And, maybe comment to you on the competitive intensity in the last three months, whether it's increased or decreased? The intensity continues to remain the same, especially in the retail segment, the intensity is the same. As I said, the kind of segment we are catering to, the salaried class, the high CIBIL score wala class, this, the intensity remains the same. Yes, banks have increased their rates slightly 10-15 basis points, but again, the intensity is there. Banks also continue to be aggressive, continue to be aggressive, and we are also... Yes, we are trying to be competitive, but then again, we are also trying to diversify our product segment so that we move into slightly higher-yielding products. So this is helpful, but just one follow-up for Sudipto. Sudipto, you're not, you know, hearing any of the banks kind of, you know, saying that, they have had, you know, fairly large NBFC exposures and, you know, there is some pressure on them to sort of, you know, reduce the NBFC exposure or that kind of in turn translating into a higher cost of funding for you? No, no. No, on the contrary, we have got fresh sanctions in Q1 itself to the tune of almost INR 5,000 crore from one bank, another couple of banks put together, about INR 7,500 crore of fresh term loan sanctions we have received from the banks. And, some more banks have already lined up their term loan proposals for us, in which will come in this quarter and third quarter. Perfect. Thank you very much. That answers my question. Thank you very much. Thank you. Thank you, Nischint. Thank you. The next question is on the line of Jigar Jani from B&K Securities. Please go ahead. Yeah, hi, thanks for taking my question. Just one clarification. This, 20% book movement to non-individual, this will be on, you're talking on disbursements for FY 2026, or for the entire book you might see it, and what is the timeframe that you're looking at? No, Jigar, we're talking of disbursement FY 2026. Disbursement, okay. We were at FY 2025, we were at around about 13%, roughly around 13%. We are looking at increasing it to 20%, 7% increase. Right. So FY 2024-2025, we will be 13%-20% in terms of disbursement. Yeah. Yeah. Yeah. Yeah. And, sir, on the fact that we are looking at maintaining our guidance at double digit growth at 10%, so that entails even on a normalized repayment rate of, say, between 16%, that entails a significant growth or run rate required from the disbursement side. So is it fair to assume that you will be looking more bulky project loans in terms of disbursements in 9 months, given that our strategy is also more towards on individual and builder loans now to achieve that disbursement target? And if you can give some sense on what disbursements are you targeting for FY 2025? Hello? Sorry, Mr. Jigar, the line for the management seems to be disconnected. Please stay connected. I'll reconnect the management. Yeah. Hello, Jigar, are you there? Yes. Yeah. Sir, could you hear my question? Yeah. Yeah, I can hear you. Yeah. Can you just carry on? ... Yeah. So I was asking on the disbursement side, any specific disbursement target for the full year, for FY25? And secondly, even when you look at run rate required towards the, say, a double-digit annual growth, the run rate required for disbursement seems pretty high for the next three quarters. And given that our strategy is going more towards non-individual side, would it be fair to assume that, it will be more towards builder loans, which should be higher ticket size and therefore allow you to hit that kind of, higher disbursement and loan growth for the current year? Yeah, Jigar, it'll be a bit of both. As we said, no, we are categorizing this as other home loans, right? We are basically segregating our book into two parts. One is the individual home loans, which we give to individual borrowers, and the other is to corporates, individual borrowers as well, and of course, builder loans. So it's going to be a mix of both. Yes, as far as the builder book is concerned, yes, we do expect some big disbursements, because as I said, going by our past track record, we have been on the wrong side of the line, I would say. So we are being cautious here. We are targeting big builders, builders with a lot of credibility, good credit record and other things. So we'll be targeting big builders and, looking into the construction market right now, I believe a whole lot of projects coming up, so all big builders, the best of the builders will be looking for funding, and I'm sure we'll be able to meet them, meet their requirements. So definitely some big loans will be coming into our builder books. So that also would help me in my double digit book growth, which I'm looking at. Right. And, any, any targets on disbursements? Any growth rate target on disbursements? Yeah, last year we did about INR 60,000 crore. This year we're targeting about INR 75,000 crore. Okay, great. Thank you. That, that is all. Thanks, Jigar. Thank you. The next question is from the line of Kashmira from ACKO Life Insurance Limited. Please go ahead. Hello. First, the 37% decline that we see in the deposits, I was wondering what could be the reason behind the sequentially declining deposits? And the second question would be on particularly the weighted average cost of borrowing. From banks and NCD, we have a spread of about 24 bps. Now, is there any particular reason for such a high spread? And also, how is the WAC, for banks at just 7.91? For us, any particular updates on these? And, third question would be around what's, the credit cost for us this quarter, specifically, if any guidance on that? Yeah, as far as credit cost is concerned, this quarter, the credit cost is about 19 basis points. So overall, we expect that this year we should be in the range of around 25-30 basis points, which is much lower than the credit cost for last financial year. As far as your other query was regarding the reduction in deposits, yes, we have seen some deposits getting redeemed, but, and the reason is precisely because of the fact that the banks have been very aggressive in raising deposits, and we have not changed the rates. We have not changed the rates for quite several quarters now, despite the fact that the banks have been increasing their deposit rates. But incrementally, the inflow is quite good in terms of fresh deposits, especially in the retail segment. The other part is pertaining to the, you said the, the gap between the bank and the- NCD. NCD. See, NCDs are historical. You have to understand that, rates which were there earlier probably were lower than what it is today, five, seven years back. So this is a weighted average. Whereas banks being mostly on the, I would say, entirely on the floating, reflects the current, cost. All right. Any particular reason why the bank's WAC is, like, so low, that we are able to, like, get the bank borrowing at a very lower cost? So we actually, as I mentioned, we have contracted with a repo-based link borrowing rate, as well as the EBLR rates. The external benchmarks have been coming down of late. Even in first quarter, we have seen a slight decline. Second quarter, the decline is much bigger. And we have always been able to negotiate with the banks for the best rates because of our triple A rating and obviously the the LIC HFL brand, LIC brand helps. So overall, we have been able to raise it at more competitive levels. Thank you so much. That's it from my side. Thank you, Kashmira. The next question is from the line of Gaurav Jani, from Prabhudas Lilladher. Please go ahead. Thank you. So just one clarification. In the presentation, the yield on advances number of 9.83 for the quarter, does that include the recoveries impact that you mentioned, the INR 90 crore and the 220 or 230 last quarter? See, this yield, actually, the way it is presented is the reported yields, that is the yield on the entire pool of assets on the closing day of the quarter. This does not- Okay. Take into consideration the collections, because interest, that, that is reflected by the interest income and the net interest income computations. This yield is basically the weighted average yield on the entire pool of advances on the reporting day of the month and quarter, that is the last day of the quarter. ... Sure. Can you provide the same number for the last quarter? It is mentioned there in the presentation itself. So that's for actually given for FY 2024, so, you know, just sort of taking for Q4 of 2024. Yeah, Q4 of 2024, see, that is the year-end, so the entire pool of assets on the last day of the quarter, that is the yield which is reported there. There is nothing for the quarter. It is, of course, on an as-on-date, because it's a balance sheet figure. It is not a P&L figure. Okay. Understood. Understood. Thank you. Thank you. Thank you. The next question is from the line of Tejas Shah, who's an individual investor. Please go ahead. Hi. A good set of numbers. I just wanted to understand, what is the, provision coverage ratio that we are running? And, Reality Bank doing so well, why can't we grow much larger than the other industry peers? Well, overall, Stage 3, PCR, is at, what, what is it? Totally- Just around 50%. Yeah, 49.72, to be exact, precise. So around 50%, which we've been trying to maintain since Q4 of last year. And as regards growth, yes, Mr. Shah, this is something which we do understand is slightly not up to the mark. Yes, we are all, the entire company is working towards that. We have in our guidance given a goal that we are targeting a double-digit growth in the current financial year. Q1, we come in at 4%, slightly muted, I do agree. But then, yes, we are working on it, and I'm sure by the end of the financial year, we'll be closer to the guided figure of double-digit growth. Thank you, sir. The next question is from the line of Raghav Garg from Ambit Capital. Please go ahead. Hi, thanks for the opportunity again. Just one more question. Your write-offs is for the INR 775 crore. Do you anticipate making any further write-offs during the year? Yes, Raghav, there could be a few write-offs. There could be a few write-offs, a few more write-offs in Q2, Q3. To what extent? I think around about a further write-off around about INR 400 crore-INR 500 crore. Okay. And you know, a couple of quarters ago, you had also spoken about these NCLT recoveries which you were awaiting because, I mean, but which haven't come through because of procedural delays. Any visibility on that? Yeah, there are a few. Of course, NCLT, there are a lot of loans in NCLT. Yeah, NCLT, the process does take time. Yes, there are a few green shoots, I would say. Some, I think three big loans in which we expect a positive result over the next two quarters. Won't name them specifically, but they are sizable loans, INR 250 crores, 400 crores, and one of about 375 crores. So definitely expecting and hoping and praying that some of these loans get resolved. Okay. And, just last question, your ECL Stage 1 and 2 coverage, you would look to maintain these levels, right? Yeah, I think we- Yeah. Regarding the PCR of, I mean, Stage 1 and 2, we've already discussed at the beginning. So by and large, few basis points up or down could be there as far as the Stage 1 is concerned. Stage 2 also, the asset pool itself is not very large. So I mean, you can say that probably it will range around, say, 4%-5% kind of a number. Thank you, sir. That was the last question for today. I would now like to hand the conference to the management for closing comments. Yeah, thank you, friends. We've had a reasonably, I would say slightly weak... Traditionally, the first quarter of the year has been slightly weaker. Since we do compare Q to Q, normally we compare Q4 to Q1, and Q4 traditionally is always the strongest quarter for any company, because a lot of efforts do go in being the financial year-end. But however, on the operational area, there are improvements, and we see a lot of, I would say a silver lining, if I may use the word, for the future quarters, Q2, Q3, and onwards. So there is room for further improvements, which we are fully geared up for. We thank you for your continued support, and would want to request all of you to continue to support the company. On behalf of the company, let me assure you, we are doing all we can to improve our performance further. As far as profits are concerned, I think we should continue to do well. The only area which we are slightly worried about is, yes, the margins. And as said, I think the margins we have reached, we have bottomed out. I think the margins are not going to fall any further than this. And the main focus naturally is going to be our book growth and our disbursement growth with a little bit of emphasis on higher margins as compared to what we've been getting in the past. So thank you all. Thank you so much. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.