Ladies and gentlemen, good day and welcome to the LIC Housing Finance Limited Q4 and FY2025 earnings conference call, hosted by Access Capital. 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 *100 on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Praveen Agarwal from Access Capital. Thank you, and over to you, sir. Thank you, Manav. Good day, everyone, and welcome to this earnings call. We have with us from the management team, Mr. Tribhuwan Das Adhikari, MD and CEO, and Mr. Lokesh Mundhra, CFO, to take us through the key highlights of the results, post which we'll open the floor for Q&A. Over to you, Adhikari, sir, for your initial remarks, please. Yeah, thank you, Praveen. Very good morning to all of you, and welcome to the post-earnings conference call of LIC Housing Finance Limited for Q4. As you are aware, LIC Housing Finance Limited declared its Q4 results yesterday. Now, before I start the highlights of the Q4 results, I would like to outline a few developments in the economy over the last quarter. The Reserve Bank of India's MPC enacted two successive 25 basis point reductions in the repo rate during 2025, lowering it from 6.5 to 6.25 in February, and further 25 basis point cuts from 6.25 to 6.0 in April. Despite these cuts, liquidity conditions remained constrained in Q4 of financial year 2024-2025, January to March, contributing to higher market yields. To address this, the RBI introduced multiple liquidity-boosting measures in March 2025, including a $10 billion INR buy and sell swap. There were OMOs worth INR 1.8 lakh crore and variable repo rate options. The cumulative 50 basis point rate cut, combined with the improved liquidity from these interventions, led to a decline in market yields during Q1 of the current fiscal, that is 2025-2026. Now, due to an increase in the borrowing costs, the company, LIC Housing Finance Limited, increased its benchmark lending rate, or LHPLR, as we call it, by 10 basis points, with effect from January 1, 2025. Subsequently, after the repo rate cut, the PLR was reduced by 25 basis points, with effect from April 28, 2025, which affected the entire portfolio. With this, we present the financial highlights of the company for the quarter as follows: the total revenue from operations at INR 7,283 crore averaged at INR 6,936 crore for the corresponding quarter of the previous year, registering a growth of 5%. The total loan portfolio stood at INR 3,07,732 crores as against INR 2,86,884 crores as of 31st March 2024, reflecting a growth of 7.38%. The individual home loan portfolio stood at INR 2,61,562 crores as against INR 2,44,205 crores, up by 7%. This individual home loan portfolio comprises 85% of the total portfolio. Total disbursements for the quarter were INR 19,156 crores as against INR 18,232 crores for Q4 of FY2024, up by 5%. Out of that, disbursements in the individual home loans, INR 15,383 crores were individual. Out of this total disbursed of INR 19,156, INR 15,383 crores was as against INR 14,300 crores for Q4 of FY2024 were individual home loans, which was up by 8%. Project loans were at INR 875 crores compared with INR 1,501 crores in Q4 of FY2024. On the net interest income, the NII was INR 2,166 crores for the quarter as against INR 2,000 crores for Q3 of FY2024. Sequentially, there was a growth, but it was INR 2,238 crore for FY 2025, so there was a decrease. Net interest margins for the quarter stood at 2.86% as against 2.70% of Q3 of FY 2025 and 3.15% of Q4 of FY 2024. EBITDA stood at INR 1,769.58 crore as against INR 1,476.18 crore, registering a growth of 20%. PAT registered a growth of 25% approximately. It stood at INR 1,367.96 crore as against INR 1,094.82 crore. For the year, the PAT stood at INR 5,429.02 crore as against INR 4,765.41 crore, showing a growth of 14%. Dividend declared by the company was 500%. That is INR 10 per share, face value being INR 2. In terms of asset quality, the phase III exposure at default stood at 2.47% as against 3.61% as at the end of 31 March 2024, and 2.75% as on 31 December 2024. The asset quality has been continuously improving. Total provisions as on 31/03/2025 were INR 4,899 crore, with phase III PCR, the provision coverage ratio, coming up, coming to 51%. On the recovery front, with the continuation focus efforts, we have witnessed a significant and consistent reduction in delinquency levels during the last year. Also, during the year, we have made a technical write-off of INR 171 crore during Q4 and INR 1,368 crore during the entire financial year. On the funding side, the cumulative cost of funds stood at 7.73% as on 31/03/2025, as against 7.78% as on 31/12/2024. Sequentially, there was a decline of 5 basis points. Compared to last year, which was at 7.76%, there was a decline of 3 basis points. Incremental cost of funds stood at 7.73% for the full year and 7.66% for the quarter. Net interest margins for the year stood at 2.73% as against 3.08%. During the last quarter, the interest rates were elevated due to tight liquidity conditions. However, we managed to keep our interest rate expense flat in comparison to Q3. We also renegotiated on some of our outstanding borrowings. These were the earning highlights. 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 question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw 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 while the question queue assembles. We have our first question from Maruk Adhijania from Nomura, please go ahead. Hello. Hi, sir. I had a couple of questions. You did say that you have changed your PLR as of 1 April by 25 basis points. Now the entire individual loan book has repriced. Is that correct? Yes, it is correct, Maruk. Okay. In terms of cost of funds, which was 7.66% incremental in the fourth quarter, what is it as we speak today? Because the yields have already gone. Cost of funds have gone down after the repo rate, I think, around about 7.3%. 7.3%. Basically, 7.66% has gone down to 7.3%, and the yield has gone down on the individual home loans by 25 basis points. I just wanted to understand. I know you'd explained even on the last call that how soon do you pass on the repo rate cuts? What's the pricing mechanism? No. You passed on the previous 25 basis points, but there was one more 25 basis points. When will that be passed on to existing customers? Maruk, like banks, many of the banks, the housing loan rates are linked to the repo rate. And so automatically, wherever there is a repo rate cut, the benefits are automatically passed on to the borrower. In our case, we do not have that. We have something called the LHPLR or something, a PLR we can call it. We do assess our, because ultimately, how much we are able to pass on relies primarily on our borrowing costs, right? If we see that the borrowing costs are transmitted, the reduction in repo rates are also transmitted to us in the form of lower borrowing costs, we do take a call and pass on the reduced borrowing costs to the borrower. That is a call we take from time to time. It is not automatically linked to the repo rate that as soon as the repo rate comes down, we have to bring down our PLR. Good morning, Maruk. I am Lokesh Mundhra, CFO, this year only. Good morning. I understood your question that this reduction in lending rate or so that will be effective on quarterly basis. This quarter, it will not be effective. Next quarter, from 1st of July, the effect will come. Okay. The next repo rate, there were two. One has been passed on, and one will be passed on in July. That's it. No, no. We are not confirming that. We'll take a call in July as to how our borrowing rates have sort of leveraged as compared to the rate cut. Because again, in June, there's an MPC in June here. I'm personally expecting a rate cut of another 25 basis points. We'll take a call in June. We'll take a call in the month of June. This rate cut, which we have effected in April, this will automatically be passed on from the 1st of July. Because many of these loans get reset every quarter. There are some loans which get reset every month. That is a slightly lesser, smaller percentage. Those loans would have already been reset. A majority of the loans get reset quarterly. Those would be reset on the 1st of July. Got it. Got it, sir. Very clear. Just historically, if you see in the earlier rate cut cycles, of course, we did not have repo linkage then, even for banks. How long does it take to transmit cuts? If, say, RBI is cutting rates today by 25 basis points historically, how long has it taken before that fully reflects in your cost of funds and is then fully passed on to borrowers? Any such data you could share? I don't have any specific data as to when we have passed on the rate cuts in the earlier cycles, etc. Usually, I would say it would be, I think, a three-month cycle. As it is, the reset is quarterly. In most of the loans, almost the majority of the loans, the reset is quarterly. Normally, it takes about three months to pass on the rate cut to the borrower and to get effective, for the borrower to feel the effect of the rate cut. Okay, sir. Thanks a lot. Thank you. That was my only question related to rate cut. Thank you. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to take questions from all participants in the conference, please restrict yourselves to only two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. We have our next question from Sameer Bhise from Demeon Asia, please go ahead. Yeah, hi. Thanks for the opportunity and some good set of numbers. Just kind of probing on the whole interest rate things again, given that we have partly passed on the rate cut on the asset side right now, do you think there is a case that as we go down the rate cycle, there could be a period when in the summer, at least in the first half of 2026, we could have a bit of a compression on spreads, which is probably more pronounced than before, and then hopefully we recover towards the end of the year? Is this the right way to think about it? Sameer, yeah. The interest rate scenario right now is very, very volatile with rate cuts happening and transmission of the rate cuts to the borrowers, and again, transmission of the rate cuts in the form of borrowing costs. It's all very, very, I would say, murky right now. Yes, the trend has clearly been from the actions of RBI and from the market expectations that the trends are for a lower revision in the repo rates. We are looking at how it gets transmitted to the borrowing costs. As I said, the borrowing costs right now at 7.3%, down from around 7.66%, so almost 30 basis points out of that 50 basis point rate cut has been passed on to us. We'll have to take a call. Yes, margins are going to be under pressure. I'm very sure of this. It will require very test handling on our part managing the, I would say, the interest rate scenario so that we do not lose out on the spreads and the margins. I feel we should be able to handle that. We have ended the year with a NIM of 2.72. I think we should be in that region. So my guidance for the year. On a full-year basis. Pardon? This is on a full-year basis. We ended at 2.7273. How should we look at probably if you could give some sense on how the transition could be through the year? Yeah, through the year, my sense would be worst-case scenario would be probably at 2.6%. Best-case scenario, probably at 2.9%. So my guidance would be between 2.6% and, sorry, 2.6% and 2.8%, not 2.9%. Okay, sir. Okay. This is helpful. Thank you, and all the best. Thank you. Thank you. We have our next question from LINE-OFF. Gaurav Kuchhal from Tribhuwan Das Adhikari, please go ahead. Yeah, hi sir. Good morning. Again, probing a little bit more on margins. You called out that there has been a PLR reset of 25 basis points. You also mentioned that the incremental cost of funds, which was 7.66% in Q4, has come down to 7.3%. Is it fair to believe or is it the correct way to look at it that whatever benefit you get on your cost of funds, only that will be transmitted on the PLR? Let's say if you take a call on the further PLR rate cuts that you'll be doing, that will be solely dependent on how much funding cost benefit you're getting. In that scenario, if that is the case, one, in that scenario, what is the spread that you're looking at that you would like to maintain on a going forward basis? Maybe if not quarterly, maybe from 1H and 2H, taking these two separately, where do you think your spreads would likely bottom out? Yeah, got a point, actually. I think I hate taking money out of my pocket. So asking me to take money out of my pocket and giving it to my borrowers and thereby increasing my margins and spreads, that's not the right way to do it. Yes, we would be looking at whatever sort of rate concessions we get and our borrowings onto the borrowers. We've done 25 basis points. Yes, as I said, 2.66 to 7.66 to 7.3%. That means almost 36-36 basis points is what the borrowing cost has reduced by. We'll look in the coming days. Let's see what happens in the June MPC. In the coming days, we'll see if we can pass on this to the borrowers as well. Definitely, whatever benefit we get in lowered borrowing costs as a result of the repo rate reduction will be passed on to the borrowers. What was the second part of the question, Gaurav? If you can just. Yeah. Any spread that you would like to maintain? Today, let's say you're doing 2% spread about the difference between your yield and cost of funds. Would you like to say that probably maybe 1.90% or any number that you'd like to call out? You'd like to maintain that kind of a spread? Right now, we are at 2.06. We are at 2.06. We'd like to maintain that. For that, two things need to be done. Yes, we've got to be aggressive as far as borrowing is concerned. Of course, borrowing depends on market conditions and T-bill rates and a lot many other things which are not in my control. That would be market-driven. Still there, since we are the biggest HFC, we have a AAA rated status. We would try to negotiate with our borrowers for better rates, number one. On the other part, as far as the lending cost is concerned, yes, I do agree that we are a company which is mostly focused on individual home loans. Our competition is mostly with the banks. The banks have an advantage of lower cost of funds because of the CASA deposits they hold, which are very low-cost funds. Competition in the individual home loan sector is very, very intense. The rates, they're already down to 8% for new loans. Right. Being a big player in the market, we cannot afford to set our rates higher than what is there in the competition because then we lose business, we lose growth. It has got to be a very tight balancing act. What we need to do, I believe, as a company, we need to sort of enlarge the sales of whatever we are selling into more margin-accretive segments. Like IHL, as I said, is very, very competitive. The margins are very low in IHL. There are other segments like if I talk about the LRD and the LAP part of it, where yields are much, much better. Project finance is one sector where the yields are much, much better. Affordable housing is another segment where the yield is much, much better. We have done it last year, and we have seen some traction. For example, if I talk of project finance, last year, my loan growth was almost 47.5%. If I talk of the LAP fund, the LRD book, my growth was almost 20%. We have been focusing there. Again, this book is small in size, comprising about 15% of my total book because 85% is housing loans. We have to diversify into that segment. At the same time, aim for lower borrowing costs so that my spreads, which are at 2.06%, remain at that level. I would say spreads would, we would keep the spreads in the region of about 2%. Okay. Sure. Just last on the funding cost, the incremental cost, as you mentioned, has come down to 7.3%. By when do you think the stock cost will also start sliding down towards that 7.3% mark? How long will it take for your stock cost of funds also to kind of get in line with the incremental cost of funds? Yeah. I think that will take time, too. My entire borrowing book, if you see, my borrowing book is over what, INR 3 trillion approximately? 270. INR 270 crore. Yeah. 270. Borrowing book is 270. Quite a lot of it is on term loans, which are linked to repo rates. Quite a lot of it is MCD, which are more or less fixed in nature. The repo rate cuts would be impacting my borrowings of term loans from banks immediately. In the MCD, I would have to wait. Of course, there are some borrowings which we have done in the past at higher rates. We need to retire those borrowings and turn the portfolio so that we get fresh borrowing at lower rates. All these things need to be done so that we are able to maintain our spreads and our NIMs. Yes, Sameer. I want to add something more. We have 45% of our borrowing is on floating rate, and that cost is gradually coming down. Ultimately, impact would be if you consider yield rate and the borrowing cost, the impact would be in our favor only. Understood. Understood. Thank you so much, sir. That's it from my side. All the very best. Thank you. We have our next question from the line of Rajiv Mehta from Yes Securities. Please go ahead. Yeah, hi. Congratulations on a good performance. Sir, first, we need some color on growth because in this quarter, our disbursement growth rate was heavy. Which markets drove home loan disbursement growth in the fourth quarter? How was the performance of Hyderabad and Bangalore versus previous quarter where we had an issue? If you can also comment about whether the traction in growth is kind of sustaining in April and May, and what kind of disbursement and loan growth are we targeting for the current year? Okay. Yeah, Rajiv, yes, Q4 was good as far as the disbursement was concerned, the 24% growth in disbursements overall. Coming to Hyderabad and Bangalore, yeah, these were two geographical territories which were impacted in Q3 for two different reasons altogether. Hyderabad has come back on track, 100% back on track, and has delivered excellent results for us in Q4. Bangalore is now, I would say, if I were to put it on a scale, I would say 95% back on track, 5% pain we are still experiencing because of piling up of a large number of registrations which have gone online or electronic in Q3 and Q4. I say as of now, I think both these regions are back on track. As far as what contributed to this 24% growth, I think overall, everyone has done well, except my East. East is slightly behind expectations, I would say. East, by East I mean West Bengal, Assam, and those seven sister states. Of course, they are a very small part of my overall book and the overall share of disbursements. Otherwise, by and large, all regions have done well. This year, I am pretty optimistic. All regions would fire. There is nothing to hold us back. The trend of Q4 gives us a lot of hope that things would continue. April has been satisfactory, I would say. Of course, not too much of growth, but that is expected after a big month. In the month of March, it is traditionally April month is usually slow. May is picking up. This year, I am very optimistic that we would not face any problems in registering growth quarter after quarter. I am aiming for a business growth. That means a disbursement growth of at least 10-12% and an AUM growth also of doubling. Okay. Great. Sir, PSU banks have been very swift in cutting new home loan pricing. They have cut it by 50-60 basis points in the last three months. Now, is this starting to impact our BP request and BP out rates in April, May? Can that also drive more upfronting of our decision with regards to cutting rates? I know that a large bulk of the decision-making rests with how the funding cost should move. Because of this competition downing their rates pretty fast, is the BP pressure increasing? Would we need to move slightly in an accelerated fashion in cutting our PLR and new home loan pricing? Yeah, Rajiv, you're right. Yes, there is some basis points pressure witnessed in Q4, especially for our existing loans. Because banks have been very aggressive in cutting their rates, and the rates they offer to existing customers moving out of other institutions is almost equivalent to the new home loan rate, which is closer to 8%. That is one issue which needs to be tackled, and our basis points out, or rather, if I may call it in general, retention of portfolio is a major concern. Yes, we are trying to address that by offering on a selective basis, by offering rates to our customers who want to move out. We've been doing that. Yes, it's a very tightrope walk for HFCs as compared to banks. Banks do have the advantage of CASA deposits and slightly lower cost of borrowing. Of course, the banks have an advantage of having other products to sell, like MSME or personal loans and other loans where they charge high rates. Overall, their NIMs only are impacted. For companies like LIC Housing Finance, which is a single-product company, as we deal only in housing loans and home loans, for us, it becomes very difficult competing with these banks. This is a conscious call we need to take. Yes, we want our book to grow. We want our disbursements to grow. At the same time, we cannot throw margin to the wind, right? We also need margins. We also need margins. This is going to be a tightrope. We have to walk all through. I believe we would be successful in doing that. At the end of the year, I think we would have a disbursement growth of double digits, loan book growth of double digits. I think we would be able to maintain our margins, NIMs at 2.6-2.8. Clear, sir. Thank you so much, Industry Plan. Thank you, Rajiv. Thank you. Thank you. A reminder to all participants, please restrict yourself to only two questions. We have our next question from the line of Abhijit Tibrewal from Motilal Oswal Financial Services, please go ahead. Yeah. Good morning, everyone. Thank you for taking my question. Just a few questions while you have kind of articulated a lot around how you're looking to grow, what margins you're wanting to maintain this year. First things first, sir, just trying to understand. I mean, first of all, congratulations to Mr. Mundhra for assuming this role of CFO. That's where my question was, what has prompted this change in the CFO role? I mean, the CFO that we had earlier, right, know that he has resigned or moved on. He still is in the company. So, what is the thought process around this change at the CFO level? That's the first question I have. The other thing that I wanted to understand is, I think, I mean, last year, if I look at FY 2025, I personally take a lot of heart from the improvement in asset quality that you have demonstrated, which led to benign credit cost. We also know that you've been working a lot on resolutions on some of the exposures. I think I remember somewhere in media, maybe appeared earlier in media earlier, where you guided for some recoveries in project loans this year. Just trying to understand, I mean, A, how should we look at asset quality going ahead? What is your assessment of credit cost for this year? Yeah. Let me answer your question. Yeah, Abhijit, coming to your first question regarding change in CFO, this was a routine affair, not driven by anything special or anything of that sort. Sudipto, still our previous CFO, had been with us for a long, long, long time, I think 9, 10 years, right? The management felt Sudipto still has some time to go in the company. The management felt that Sudipto needed some exposure in other verticals or other lines of business also. Just to give you an exposure, there was this change. Sudipto was moved into marketing. Mr. Mundhra, who's an old, experienced finance audit accountant at LIC, having worked in the investment department, all the three sections, the front office, the back office, and the mid office, good experience of finance and investment and borrowing. We decided to bring in him. That was all. There was no specific any other reason other than that. As regards to asset quality, yes, we've been working on asset quality for the past two years, and there has been improvement in quarter to quarter consistently. If I remember correctly, two years back, our GNPA was 4.41. Last year, we brought it down to 3.31. This year, we have ended at 2.46. I am pretty sure the asset quality will continue to improve. The provisioning requirements would continue to come down. There would be a release of provisions. Yes, legacy-wise, we still have a lot of about INR 8,000-9,000 crore of outstanding portfolio in default. About the project takes up almost about, what, 21% or 21-24% of that. There are some big, sticky, lumpy loans with us at various stages of resolution. Last Q3, we were able to resolve one big loan through ARC, say, INR 250 crore, etc., approximately. There are others which are, I would say, at various stages of settlement negotiations going on. Some big loans being restructured very recently. The executive committee of the board has agreed to restructure one big loan of an outstanding portfolio of INR 450 crore. Restructuring comes into effect in May. Of course, as per RBI guidelines, it would continue to be in NPA for one more year. After one year, it would get out of NPA. May 2026 is when this big loan would probably get out of NPA. We are also doing ARC sales. We have just done one. We have just done one. We are approaching ARCs, talking in discussion with them, talking to them to offload some other loans as well. We had offloaded a basket of loans. Probably made a mistake there because we did not get any expression of interest as far as that basket was concerned. I personally feel that rather than offloading baskets of loans to ARCs, we need to offer, I would say, break up the basket into smaller, smaller, smaller chunks, which the NBFCs are able to assess and appraise quickly and probably come back with a positive reply. That is that. Plus many cases in DRT and CLT and FLAT, etc., etc., etc. at the various stages of, I would say, the legal decision-making process, which, as you all know, takes time. Overall, I'm very optimistic about the asset quality. We are aiming for GNPA right now at 2.46, aiming to bring it down to less than 2.2. Credit cost is as low as we can get, 9 basis points of the credit cost as of 31st of March. I'm looking to keep it that worst-case scenario, restricting it to 9-15, whatever it is. The asset scenario, the asset quality scenario looks good. Dr. Selin, just one last data keeping question. In every earnings call, we shared segment-wise states and numbers. If you can just share that. Okay. Abhijit, yeah, you usually ask for this every time, so I have it ready with me. Normally, Sudipto used to answer this. Yeah. So in the individual home loan, what do you want? You want the EAD and the EAD percentage? Yes, sir. I mean, both the things, Rajiv, if you can just share that segment for us. Okay. In the individual IHL, the individual home loan piece, the EAD is INR 2,852 crore, and the EAD percentage is 1.09%, right? In the NHC and project, this is EAD INR 3,523 crore, and the EAD percentage is 24.52%. In the NHI, the non-housing individual, it is the EAD is INR 1,225 crore, and the EAD percentage is 3.85%. Overall, the EAD is INR 7,600 crore, and the EAD percentage is 2.47%. Got it. This is useful, and I wish you and your team the very best. Thank you so much. Thank you. Thank you. We have our next question from the line of Himanshu Taluja from Aditya Birla Sun Life AMC, please go ahead. Thanks for the opportunity. Most of the questions have been answered. Just a few at my end. Sir, can you just throw out in the year-end interest income of the margins of 2.72, how much of the NII gets support of the resolutions of the bad assets? How much is there? Potentially, is there still a good pipeline which is there for this year? Can we expect some bit of interest income recovery from those assets as well? That is my first question. Yeah. Himanshu, coming to you, the asset part of it or the recovery part of it. Yes, we still have a total EAD of what, INR 7,600 crore, right? And in projects, it is INR 3,523 crore, and the other is almost near that, almost near that or a little bit more than that. We are working on both the fronts. The retail piece loans, again, we have divided into two parts, the small loans and the big loans. Project, of course, most of it is these big ticket project loans we have given, which are lying in default upwards of INR 50 crore and all. The project part is slightly tricky because these are big loans. Many of these are in litigation in various courts, such as DRT, NCLT, and FLAT, etc., etc., etc. That takes its own course, its own time. At the same time, though we are in the courts, we are extending offers to these delinquent borrowers to come up and settle. Settlement, also the basic thing, what we are saying, we are not going to settle below principal, below the outstanding principal. Okay, we are willing to take a hit on the accrued interest and the interest and other recoveries, etc., etc. There also some progress is being made in some cases. In some cases, it is out only on the course. On the retail front, the collection efficiency has been holding up, which is good. Not too much of change in DPD delinquency is being noticed. All in all, looks good from the recovery percentage or the, I would say, asset piece is concerned. What was the first part of the question? Here, sir, just a first question which I have. How much of the interest income recovery, or you can say the margin support that you accrued during the year because of some of the resolutions which have happened during FY 2025? No, you are Himanshu. Yeah. So recovery from NPA, that is created for my interest income for the financial, it was around INR 400 crore. Okay. Which has been passed to the NII? Yeah, yeah. It's a part of NII only. Okay. Got it. Yeah. Thanks, sir. Just secondly, just wanted to understand because if we look at your project financing book, it has been on a continuous basis on a declining trend, and this quarter we have seen some of the—how do you expect over the course of this project financing book to grow from here? Also, if you can prove from the non-HL, also currently your non-HL book is growing at 11.5%. How do you expect this growth rate to be during the course of the coming fiscal year? Thanks. Yeah. The project finance book has seen a shrinkage, and that is basically not because of any lack of focus or anything. Most of it is some of these big project finance loans which we had given in the past three years, four years back at higher rates of interest, 11%, 11.5%, etc. They have gone out of our books. Therein, of course, we had to take a call whether most of these builders were expecting rates between 8.5% and 9.5%, which we felt was not tenable for us, right? Because you have to take a call between the margins and the lendings that you do. We did try to hold on to them, but again, the rates they were asking were, in our opinion, not tenable. We had to let them go, of course, with a very heavy heart. As far as the book is concerned, the disbursements have been good. Project finance last year has shown a disbursement growth of almost 47.5%. While saying that, this is a very small part of my book, right? Project finance is only 3% of my portfolio. Last year, we have disbursed about INR 4,200 crore in project finance. There again, there are two things which are driving us. Number one is, of course, the rate at which these builders are demanding. Let me tell you, this is one space where builders, at least the top-rated builders, the Shobhas, the Prestige, the Lohas, they are asking for rates which are almost equivalent to IHL rates, 8.5%, 8.25%. Surprisingly, some of the banks are willing to offer them that. We are not going into that. We are trying to make sure that we get some decent rates which are beneficial for us. We are focused on project in a, I would say, not in a very aggressive way, but we want to grow this book. This year, we have taken our target of doing INR 10,000 crore to project finance, as against INR 4,200 of last year. We would be looking to grow this book selectively by looking at builders with reputation, with pedigree, with the ability to deliver projects in time. At the same time, we need to give us some margins which are sustainable. Sure, sir. Thanks. Thanks, Himanshu. Thank you. Thank you. Reminder to all participants, please restrict yourselves to only two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. We have our next question from the line of Shreya Shivani from CLSA, please go ahead. Yeah. Thank you for the opportunity. I have just two questions. First, just wanted the clarity on the project resolution that you spoke about. Last quarter, you said there are four to five more assets getting resolved in NCLT. The negative net slippage that we have this quarter, how many projects got resolved over there? I mean, just some color on that. Second is on affordable housing. Now that you are closer, you must have, you've already launched some products, etc. How many branches would affordable housing products be available in for financial year 2026 and 2027? Some guidance over there would be useful. Thank you. Coming to project loan resolutions, as I said, in Q4, there were no big project loans which were resolved. Q3, there was one big case which went to ARC, as I said, INR 250 crore. In Q4, we could not get a resolution on any of the big project loans, so to say. That was slightly disappointing. Again, that was expected because all these big project loans are in legal disputes, lots of disputes going on, NCLT and FLAT, DRT. We get some order from somewhere, and the borrower runs to DRT and gets our things stayed. We try to auction something, and then there are cases filed in court. These are difficult loans. I think what is left now are the difficult loans. Still, we are optimistic of resolution, as I said to an earlier question, that we are exploring both ways. It is not that we want to take them to court and hang them. They are open and amenable to settlement if they are coming to us and offering some reasonable settlement. When I say settlement, I say we have a policy here that will go. In principle, the project loan, there was no big resolution last quarter. Again, these are all big cases, and you never know what may turn, what may happen, what might come up for settlement. We are optimistic that this year also, we would see a few resolutions. We expect at least two or three resolutions this year also. Let's see how it goes. Of course, you cannot give a guarantee that these are going to be resolved, right? You can only be hopeful and move in the right direction. Both the carrot and stick is the legal part of it, and the carrot is the settlement part of it. We are exploring all options. Ultimately, we want this portfolio to go out of our books so that provisioning requirements do come down. As regards affordable, yes, this was one segment which was missing from our portfolio. We were not into the affordable segment as such. We had primarily been focused on individual housing loans to the prime segment. Last year, towards the end of August, we came up with this affordable segment product. We have been slow, and it is deliberate. We have been slow in expanding into this area because we do realize it's an area where we do not have any past experience or expertise. Plus, this is an area where there is every possibility of higher delinquencies if not handled correctly, if the credit appraisal and the marketing teams are not properly trained. We are going at it slowly. Last year, in the affordable segment, we could disburse INR 432 crore. Yes, slightly lower than expected. We were expecting at least INR 1,000 crore of disbursement to come through because we had launched in August, so we had almost one half year. This year also, we would be focusing more on the infrastructure and the kind of support and training experience we are able to give to people, the comfort level in handling such cases so that delinquencies do not rise. We have set ourselves a target of INR 2,000 crore this year. We are very clear that this is going to take two to three years for this segment to build up. We are also convinced that this is the segment where we have to be, and this is the segment where everybody in the NBFC and the HFC space is entering. There is going to be competition, yes. Of course, this is one segment which is going to give me margins. If I am going to hold on to my margins or increase my margins, I have to be in this segment. INR 2,000 crore is what we are looking at this year. Got it, sir. Sir, just to follow up on the first question, then what is the recovery that has come in this quarter in the stage three? I know you said write-off is there of INR 171 crore. There are some recoveries also, right? There are recoveries. For the year, the total net recoveries is around about INR 1,800 crore. In Q4, Q4 is INR 650 crore. INR 615, INR 615 crore in total. So for the year, INR 1,800 crore of net recovery. Net recovery means recovery plus creation. So INR 1,800 for the year and INR 615 net recovery for the quarter. If you want to ask gross recovery, it is more than INR 1,000 crore. Gross recovery is more than INR 1,000 crore for this quarter. Definitely has been more than that. Net is INR 1,800. Yeah. Gross will be much, much higher. Okay, sir. Thank you so much. Thank you. We have our next question from the line of Kunal Shah from Citigroup, please go ahead. Yes. Thanks for taking the question. First, if you can highlight out of 32% bank loans, how much is recalling, and out of 55% NCD, how much would be coming up for maturity or refinancing this year? Just to gauge how much of a benefit we can see in the funding cost over the next 12 months. Overall, if I say my borrowing book, it's 55% fixed, 45% floating linked to the repo rate, right? That is the thing. Bhatti, in your case, you want to take over? What is the? What was it, Kunal? What was the second question? Sorry, sir. The first question itself is out of 32% bank borrowing, how much is recalling? And out of NCDs, how much would be coming up for refinancing or maturity in this year? For recalling, out of 32% of our total bank borrowing, that is all recalling. Mostly it is recalling the T-bill linked borrowing. Very few cases are NPL linked. Okay. NPL is not much. It's largely EBLR and T-bill. Yeah. Recurring T-bill linked. Yeah. Mostly it belongs to EBLR only. Okay. Okay. Now, just to get the sense, to get the benefit on the NCD side on the refinancing, how much of this 55% would be coming up for maturity in FY2020? Also, INR 30,000 crore NCDs are going to mature. In that, INR 30,000 crore will be repriced. And you know. 3,000 crores. Rates are now coming down, so definitely we'll borrow money on lower rates. That's right. Yeah. So almost 30,000 NCDs will get repriced over the year. And no chunkiness in the first half or something of that sort. It should be evenly spread across the year. Across the year. 30,000 across the year. 2025, 2026. Okay. Got it. Okay. Just a clarification, this PLR, you said the entire effect will play through by July 1. It's not like the pass-on or maybe the effectiveness will start from July 1. 99% of home loan portfolio will be at the 25 basis points lower rate by July 1, taking generally three months for the entire effect. Is that correct in terms of the understanding? Entire portfolio, we are not saying that entire portfolio will be repriced at lower PLR. In most of the cases, a major part of our portfolio will be repriced from 1st of July. In some cases, it will have monthly effect. Okay. Okay. Majorly it will happen from 1st of July. It will be effective from 1st of July, even though we have reduced the rate from April. In terms of the transitioning to the customer, it will take effect from 1st of July. Yes. Correct. Okay. Okay. So if you have to look at next quarter, maybe only a part of which you mentioned might get repriced, it would not be a substantial one, but maybe for one key, it will be a relatively lower proportion. No, Kunal, we couldn't get you clearly. Can you come again? No, no. We have set PLR by 25 basis points with effect from April. I am saying in terms of passing it on to the borrower, okay, it happens so the entire 99% of our floating rate book on the individual side will entirely be repriced 25 basis points lower over the next three months by July, or maybe this pass-on actually will take effect on a quarterly basis. No, Kunal, it's like this. My entire loan book is divided into two parts. There are a small portion of loans which are having a monthly reset. So those loans where the reset is monthly, the reduction in the PLR has already been passed on. Yeah. Yeah. A major chunk of the book, the reset is quarterly, right? All those quarterly reset would experience the lower rates from 1st of July. Perfect. Got it. Yeah. So this quarterly reset, major portion is passed from 1st of July. Correct. Yeah. Okay. Yeah. Thanks. Yeah. Thank you, sir. We have our next question from LINE-OFF. Shweta from Elara Capital, please go ahead. Thank you, sir, for the opportunity. A couple of questions. The first one, with your increased vigilance now on the affordable portfolio, wherein we have seen regional sort of delinquencies flaring up, and also given the rate war now coming to fore even on the project loan side, where do you see the levers to this 12% growth target? That is the first question. Second question, just taking cues from the previous participants. Given the fact that the rate transmission will be largely effective July 1 onwards, do we see net interest margins at least in the interim quarters to sort of exceed the 2.6%-2.7% target which we are sort of highlighting? Thank you. Yeah. Shweta, coming to levers for 12% growth, yes, I do agree that the home loan market is getting very, very competitive, yeah, with banks also in the fray, banks having the advantage of slightly lower cost of funds as compared to NBFCs and HFCs. Yes, it is a very, very murky world there and a very, I would say, a cutthroat world there. Yes, there is the potential. If we talk about the potential, if you talk of demand, the demand is there. It is not that everybody wants it at 8%. There are segments of society who are willing to pay slightly higher also. I believe the challenge for us is how do we approach those people who are willing to pay us at slightly higher rates. Just to sort of clarify, there are lenders in this segment who are having income almost 5%, 6%, 7% also. There is a market. Of course, they are small in size as compared to us. They are there. There is a market there, so we'll have to find our way into the market. Yes, it's going to be a tight rope, as I said earlier, right? We have to be selective at what sort of cost we want to lend the loans. That would largely depend on our cost of borrowing, how much we are able to leverage our size or leverage our rating to get lower cost of funds. I don't see any reason why we should not because we are not abandoning the path of growth. There are two routes we can take. We can say that, okay, we will not look at growth. We will look at margins only. Or the other, we can say that we will not look at margins. We will look at growth only. We are not doing that. We are trying to balance both of them together so that we get growth on the loan book and the disbursement book. At the same time, we are able to maintain our margins. The margins are 2.72, NIM at 2.72 as of the end of 31 March 2025. I do not see any major shrinkage in the NIM. Worst-case scenario, I feel that we should be able to maintain it at somewhere around about 2.6-2.8. Shweta, does that answer your query? Yes, sir, fairly answers. Thank you. Thank you. We have our next question from the line of Rajiv Pathak from GC Holdings. Please go ahead. Good afternoon, sir. Sir, out of this INR 9,000 crore of the defaulted loan portfolio that you said you are carrying, what is the recovery target that you would have for this year and the next year? This year and the next year? Yeah. I think I would say 25. I'm going to next year and rather focus on this year. Last year, as I said, for the full year, my net recovery is for about INR 1,800 crore, right? This year also will be targeting a similar amount, upwards of INR 1,500 crore. Okay. This INR 1,800 crore would be like fully written off accounts or how would this be? No, no, no. This would be a mix of both. There would be some accounts which we would write up because we have a write-off, technical write-off policy. As per the technical write-off policy, any loans where the provisioning has reached 100%, they need to be written off. Do not do any pick and choose that I am going to write off X loan and not Y loan. That is guided by the, it is a mathematical formula, so I have no leverage or leeway in saying that I will write off this and not write off that. There will be some write-offs coming up. Other than that, there would be recoveries also. Net to net, I am targeting anything upwards of INR 1,500 crore this year. Basically, then anywhere between INR 800 crore-INR 1,000 crore of recoveries can flow through the P&L in terms of the recoveries or the write-back of provisions. Would that be a fair thing to see? That would be a fair effort. Okay. Sir, the next question is on the yield. How much would be the yields on our affordable housing and the retail LAP portfolio? Affordable housing, our yields are upwards of 11%. We have been conscious in not pricing it too high, to 13-14%. We do not want to swindle the borrowers also. Our yields in affordable housing would be 11-12%. On our LAP, they would be upwards of 10.5-11%. Okay. Thank you so much, and wish you all the best, sir. Thank you, Rajiv. Thank you. We have our next question from Siraj Khan from Ascendent Capital. Please go ahead. Hello, Siraj. Siraj, are you there? I think we've lost Siraj. Yes. Yes, Siraj. Siraj, we can't hear you. Can you please rejoin the queue? We'll move on to the next participant. We have our next question from Rakesh Kumar from Berentis Advisors. Please go ahead. Yeah. Hello. Can you hear me, sir? Rakesh, I can hear you. I can hear you. Yeah. Just slightly taking this query off margin a bit structurally. I was just because banks' loan, housing loan, basically individual housing loans are completely EBLR linked. Till the time we have a trajectory of repo rate cut maybe happening for maybe another 50 or 75 basis points, they will keep on passing on, right? Banks will keep on passing. We are directly competing with them in terms of ticket size, individual housing loan ticket size that we have. Considering that, either we take a hit on the disbursement base or we take a hit on the credit yield. I was thinking that. The option that we have, that we do the repricing as and when our funding cost is coming down, would that logic remain valid considering the way competition will pan out? Rakesh, to be very honest, yes, we are competing. Yes, I did make a statement that we would link our rate cuts to our cost of borrowing. Yes, that is true, very much true. However, we will also be reviewing the competition in terms of what the competition is doing and what we need to stay competitive. Because I cannot say I will run away from the market and not be competitive and expect to grow at what we are trying to grow or trying to grow at double digits. We have to be, I would say, willing to be flexible in the sense that, yes, if it comes to that, if push comes to a shove, we should be able to take a call. My guidance is that, yes, we would be careful while passing on the repo rate cuts onto the borrowers. As to say that we have the best of both worlds, we do not compromise on growth, and at the same time, we do not lose out on margins also. As I said, it's going to be tough. It's going to be very, very tough. It's going to be a tightrope walk for us. I realize that. As a company, we have to be on our toes, keep eyes here, everything open, noses to the ground, feet on the street. We'll have to take a call. We'll have to be flexible and not say that, "No, I'm going to do only, I'm going to pass on rates only when my borrowing costs come down. Got it. Sir, the second question that I'll stick to NHB borrowings. The number, the composition remains at around 4% of the total borrowing that we have. What is the scope of raising that composition further from here? NHB borrowings, Rakesh, let me be very honest. Yes, NHB offers us two types of borrowing. One is for the marginal segment, the tribal, for the Northeast, for women, for affordable. That is very competitive. We get it at around 5.5%-6%, right? The rest of the borrowing is at rates which are higher than what we can get from the open market. It is really, I would say, a catch-22 situation for us. NHB being the, what you call, our supervisor and a bigger, it does not offer us the benefit of, "I mean, you take only the low-cost ones and do not take the high-cost ones." It is usually offered in a basket where they mix up the low-cost along with the high-cost. We try to see that the average works out to at least my average borrowing cost from the market. Right now, there is not too much of scope. We have been in discussion with Chairman NHB and the refinancing team of NHB that they need to be competitive with. NHB is a government entity. If we can get it at 7.7, why should they get it at 8? They should be able to get it with government backing and government guarantees. They should be able to get it at lower rates. Let's see how it pans out. This year, I'm hopeful that from what I hear, what I've talked to the Chairman or what we discussed, this year, I'm hopeful that NHB will be able to give us, of course, now NHB has come out with a formula. They are not sort of picking and choosing that, "No, I like LIC Housing Finance. I give it more. I do not like Punjab Housing. I give it less." They have come out with a specified formula. I believe the transmission of whatever lending which LIC does will be fair and equitable. All that we are asking them, they will need the rates also to be fair and equitable for all. Let us see how it goes. Got it. All right. Thank you. Thank you, sir. Thank you. The next question is from the line of Bhaskar Basu from Jefferies. Please go ahead. Yeah. Thank you. I just had a clarification, sir, of the INR 450 crore of income NPA recovery, which is part of the NII. How much of it came in this quarter? Secondly, the increase in other income this quarter seems to be quite sharp. What is driving that? Yeah. For this quarter, NPA recovery is around INR 16 crore, which we are creating to interest income. For the full year, this number is? Quarter NPA recovery is INR 615 crore. 615. Okay. Tax on interest income would have been INR 16 crore. 16 crores. Tax on interest. Yeah. For the full year, the credit on the interest income? 16 crore is credit on the interest income. Full year. Full year. Full year. Full year. Crores. Around INR 400 crore. INR 400 crore. The increase in other income this quarter is due to? Other income? 90% going to. Recovery from write-off cases for this quarter is INR 100 crore, INR 100 crore. For the full year, it is more than INR 200 crore. Just to be clear, the recovery from write-off, I mean, is part of the other income. In addition, there is about INR 16 crore of recovery sitting in there. Yeah. Yeah. And other income from return of cases, it is more than INR 100 crore for this quarter. Understood. Secondly, just on the OpEx side, there is a bump up in the OpEx. We see this seasonally in the fourth quarter. Is it mostly commissions or what is driving that? Anyway, every fourth quarter, you normally see a bump up in your OpEx, right? Mostly, it is due to advertisement, publicity. Whatever is unspent or committed is booked. Then you have CSR. CSR also contributes to a big chunk of this OpEx. Competition contests because Q4 normally is a business quarter. To boost sales, we do give contests and competitions not only our people on the field side. Then you have fees and commissions because business increases. Naturally, fees and commission also goes up. Apart from that, this year, there are two others. One is in the month of February, we just concluded our wage revision for all the 2,500-odd employees of the company. This happens once in five years. Of course, we provide for these wage revisions on a quarterly basis. The provision is normally at 15%. This year, we have concluded the revisions at 17%. That 2% gap would also have to come into the OPEX. One more thing, one change we have made this year is our hardware, computer hardware, etc., whatever we buy. Until last year, it was under the CapEx model. Rather, we were purchasing them and capitalizing it, which would form a part of balance sheet. This year, we have decided not to spend too much of money on the hardware. Since we need it, we are going into an OPEX model, right, in the sense that we are leasing. If I need a server costing somewhere around INR 30-40 crore, earlier, I would have paid the full INR 40 crore to the vendor and owned the server. This year, we are taking it on lease for a normal SLA, the service level agreement is for three years, extendable by two more years. I am taking it on lease. I do not have to capitalize it. It is coming into expenses. These are the main reasons for this increase in expenses this year. Okay. Okay. Understood. Thanks a lot. Thank you. Ladies and gentlemen, this would be the last question for today. I now hand the content over to the management for closing comments. Thank you, friends, for all the queries. I think very pertinent and to the point. Yes, thank you for giving us an opportunity to explain our views, our guidance, what we are thinking of for the company in the financial year 2025-2026. Let me assure you that the company is poised to deliver an excellent performance both in terms of our disbursements, that is, sales, both in terms of the loan book growth, and also in terms of margins. Basically, the focus of the company will be on growth, margins. The third part would be the asset quality, which has been improving and which we expect to improve further. Thank you. Thank you so much for your support. Thank you, Praveen. Thank you, sir. On behalf of Access Capital, that concludes this conference. Thank you for joining us. You may now disconnect your line.