Ladies and gentlemen, good day, welcome to the LIC Housing Finance Q1 FY 2027 investor conference call hosted by Axis Capital. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Praveen Agarwal. Thank you, over to you, sir. Thank you, Avirat. Good day, everyone, welcome to the earning calls of LIC Housing Finance. From the management team, we have Mr. Tribhuwan Adhikari, MD and CEO, Mr. Sandeep Kumar, COO, Mr. Lokesh Mundhra, CFO. I would request Mr. Adhikari to share his opening remarks, post which we'll open the floor for Q&A. Over to you, sir. Thank you, Praveen. A very good morning, welcome to all of you to the post-earning conference call of LIC Housing Finance Limited. As you are aware, LIC HFL declared its Q1 FY 2027 results yesterday. Before discussing our financial and operating performance, let me briefly touch upon the evolving macroeconomic environment. The global macroeconomic environment continues to remain uncertain due to heightened geopolitical tensions, particularly the renewed escalation of the U.S.-Iran conflict, which has led to volatility in crude prices and global financial markets. While major central banks continue to adopt a cautious policy stance, the Indian economy remains resilient, supported by strong domestic demand, healthy government capital expenditure, robust financial sector. Inflation remains broadly within the RBI's comfort zone, despite potential upside risks from higher crude oil prices. India's GDP is expected to remain among the strongest globally. Against this backdrop, the market expectations currently indicate that the RBI is likely to maintain the repo rate at its present level over the near term. The recent geopolitical developments have introduced upside risks to inflation through higher crude oil prices. The RBI is expected to carefully balance inflation management with the need to support economic growth. A stable domestic interest rate environment should continue to support credit demand, particularly in the housing sector, while also benefiting funding costs and asset quality across the industry. With that backdrop, let me now take you through our financial performance and key business highlights for the quarter. Total revenue from operations was INR 706.2 crore, as against INR 716.9 crore for the corresponding quarter of the previous year. Outstanding loan portfolio stood at INR 322,098 crore as on 30th June 2026, against INR 309,587 crore as on 30th June 2025, reflecting a growth of 4%. Out of this, the individual home loan portfolio stood at INR 271,979 crore, as against INR 262,411 crore, up by 4%, and comprises 84% of the total portfolio. Total disbursements for the quarter were INR 15,014 crore, as against INR 13,116 crore, up by 14.5%. Out of this, disbursements in the individual home loans were INR 12,119 crore as against INR 11,247 crore, up by 8%. Non-housing individual loan segment were INR 1,975 crore as against INR 1,647 crore, up by 20%. Whereas project loans or the wholesale loan finance were at INR 872 crore, compared with INR 156 crore in Q1 of FY 2026, up by 459%. Net interest income stood at INR 2,075.52 crore for Q1 of FY 2027 as against INR 2,064.71 crore for Q1 of FY 2026. Net interest margins for Q1 FY 2027 stood at 2.58%, as against 2.68% in Q1 of FY 2026. Profit before tax for the quarter was INR 1,888.43 crore as against INR 1,699.16 crore in Q1 of FY 2026, up by 11%. Profit after tax for the quarter stood at INR 1,488.32 crore as against INR 1,359.92 crore for the same period in the previous year, up by 9.4%. In terms of asset quality, stage three exposure or defaults stood at 2.14% as on 30th June 2026, as against 2.62% as on 30th June 2025. Total provisions as on 30th June of current year stood at INR 4,398 crore, reflecting a provision covering of approximately 48%. The company also conducted a sale of a stressed asset through ARC for a cash consideration of INR 140 crore during Q1 of FY 2027. On the funding side, our cost of funds stood at 7.28% as on 30th June 2026, as against 7.50% as on 30th June 2025, and 7.27% as on 31st March 2026, reflecting a reduction of 22 basis points YoY. Our incremental cost of funds stood at 7.06% for Q1 FY 2027 as compared to 6.86% for Q4 of FY 2026 and 6.97% for Q1 of FY 2026. Despite the elevated interest rate environment during the quarter, our cost of funds remains largely stable, reflecting the strength of our diversified borrowing profile, prudent liability management, and timely access to multiple funding sources. With this brief introduction, I would like to invite you for your queries. Thank you. Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Avinash Singh from Emkay Global Financial Services Limited. Please go ahead. Yeah, hi. Good morning, sir. Thanks for the opportunity. A couple of questions. First, on overall growth and margin trajectory. If we look back, the kind of a five-year data you have presented. The growth and margin both have not been coming the way you would have thought. If we look in the context of industry, and particularly from your peers who are reasonably active into prime housing as well, they have done reasonably well. Now, going forward, what are you going to do different that gives you belief that the growth and margin trajectory from here onward could at least alter or could be materially better than here? What has not worked for last nearly five odd years. The second is on, if I were to look at developer finance, of course, your exposure is very limited. Again, there also, if you look back nearly four, five years, there was a reasonable, I would say, opportunity for many of the lenders, housing finance and NBFCs owing to HDFC getting merged into HDFC Bank. A lot of your peers have leveraged upon that opportunity. In this round, at least you seem to have missed that bus. Now, from here onwards, what kind of opportunity you see in the developer finance, particularly from the risk-adjusted return perspective because the past track record for you in this segment is not so great. Thank you. Avinash. Very good morning. I'll take your growth question first, the part related to growth. Yes, you may be looking at the year-on-year growth of 4%, and that is why you say that growth has not been satisfactory. If you look at the disbursement growth for quarter one, as I said, the disbursement growth is, as per our standards, pretty okay, 14.5% growth as compared to year-on-year, which we had in the beginning in this Q4 earnings call, I had given an indication or guidance that first quarter will be growing at 15%. More or less, our growth is in line with the guidance. I think by growing at 15%, traditionally our growth has been sub 10, right? We do see some traction as far as growth in business is concerned in the quarter. Looking into Q2, of course, this is the first month, July. We are still back on track. Q2 also, I feel, in fact, we are targeting a 15% growth in Q2. I think as far as the disbursement front is concerned, I think we should do well this year and the guidance we have given of a 10%-12% growth, we will be able to achieve that. Yes, the book growth is going to be gradual. It is not going to happen overnight because apart from the loans which get added up due to disbursements, there are a lot of exits also by way of maturities, by prepayments, part prepayments, full prepayments and of course, BT out. In quarter one, our BT out is at INR 3,000 crore approximately. BT in is about INR 1,500 crore, so net BT out is about INR 1,500 crore and I think this is okay. This is in line with what we expect. You will be witnessing a good disbursement growth this year. The book will grow gradually as disbursements grow. Coming to your margin call. Margins indications in the beginning of the year was 2.6%-2.7%, provided everything remains okay, geopolitical, economic, et cetera. We have ended the quarter at 2.58%, 2 basis points below the lower end of the guidance at 2.6%. Anyway, this was expected because last year there were a lot of rate cuts in the overall book as well as the new borrowing book which we had to introduce because of the rate cuts by RBI and in keeping in line with the reduction in repo rates of banks due to the rate cut. Since we are competing largely with banks on the IHL individual home loan front, we had to be competitive and that has to some extent impacted the margin. Again, this year also like last year is going to be, let me say, a war or tug of war between high growth and maintaining our margins. We would be, of course, looking to try and do both at the same time, grow our books through higher disbursements and more of retentions and at the same time increase or rather maintain our NIMs at the guided level of 2.6%, while ensuring by probably focusing on better borrowing cost. We are also looking at a product diversification strategy, which has been on for the past two years. It is gaining ground. We are slowly trying to reduce our share of individual home loans and probably get into the what we call the non-individual home loans. Basically, I am meaning the LAP and the LRD segment. There has been traction on that. That book is growing. Right? On the other front, this year we will be looking at, as I said in the beginning of the year, inorganic growth through direct assignment and co-lending. The policy is on the final stages. I think in Q2 we should be starting the direct assignment and co-lending business. That would also give us some book growth, and we will be also looking at increasing our margins. That is about the margin part of it. Yeah. Developer finance book. It is a small part of our book. Not too much of a thing. Last year was a disappointing year from the development of finance perspective. Throughout this year, we could do about INR 1,950 crore of disbursement in developer finance. This year the start has been good. First quarter, I think we have done about INR 850 crore odd, INR 872 crore of disbursement in the wholesale book or the developer finance book. Growth is very high at 450%, largely to do with the low base of last year. We are interested in the development finance book, again, cautious, steady. The other part of it is we are also looking at margins from the development fund, developer finance book. Which is right now under extreme pressure. The big builders, the very good builders, they are demanding prices sub 8%, which we feel as a company that it is not in our interest to do developer finance at 8% or sub 8%. We need margins from there. We are looking at good quality grade B builders. Till last year we had this overhang of the developer companies or the builders being minimum rated triple B or above. This year this is going to go, not yet gone completely, but this year this is going to go. We have a credit risk policy for developer finance which is almost ready. It'll be going to the EC and the board in the coming month. I think that overhang will go. That will help us get into slightly lower rated builders. We need to be careful that, yes, we choose the good ones with a good track record so that again, we do not get into the sort of problems we had in the past. Developer finance book should do well. We have set a modest target of about INR 4,000 crore for the current financial year. The expectations are, of course, that we would probably be doing INR 7,000 crore-INR 8,000 crore in developer finance. I hope that answers all three parts of your question. Avinash, again, Lokesh Mundhra here supplementing what our MD has said. Though portfolio growth is 4%, but in absolute term, you will find it is more than INR 12,500+ crore. Being a larger housing finance company, definitely if you compare in the percentage term, then definitely it will be less. But in absolute term, it's a very good growth. And secondly, in terms of my disbursement growth, 15% growth year-on-year. That is in line with our expectations. Thanks. In developer finance that you are targeting any sort of range of per project or per builder exposure, what kind of a typical ticket size that you want to say that, okay, we will not go beyond that ticket size or something of that sort in mind? No, I don't think we have any ticket size in mind. We are willing to consider all sorts of ticket sizes. From probably at the low end, small developers wanting small loans of INR 25 crore, INR 30 crore right up to big developers asking us for INR 300 crore, INR 400 crore. That also we are into. I think what we'll be looking at in developer finance is the kind of rates which these borrowers are willing to give us. Going into probably a Lodha or a Wadhwa or a Puravankara or a Sobha who is demanding sub 8%. No, I don't think that is what we are looking at. We are taking calls on probably not going for that just for the sake of building the book because we want margins. We want some margins in the developer finance book. Right now our margins are probably close. We are lending at probably 10.5% in the developer finance book. We would be wanting rates closer to that. Got it. Very clear. Thank you. Thank you. The next question is from the line of Gaurav Khandelwal from JP Morgan. Please go ahead. Yeah. Hi, good morning. Thanks for the opportunity. I have got a few questions. My first question is, sir, previously your philosophy was more on protecting margins at the cost of growth. Given your comments just now, is it fair to assume that the philosophy is now evolving to chase growth rather than margins? How should one think about that? Okay. Gaurav, no. Last year I had given an indication that given a choice, I would like to protect margins as compared to growth. This year, I would say we would try to balance growth along with margins. It is not going to be that we are going to shun growth and look only for margins. We are trying to grow the book because that is important from the long-term perspective, and at the same time, margins are important to me because it is no use growing the book at lending rates which probably do not help my spreads, help my margins, so on and so forth. We have to look at the best of both worlds, trying to protect the margins as well as trying to grow the book through higher disbursements and a better retention. Got it. The other question I have is on cost. If I look at the YoY cost growth, that is actually quite high in first quarter. Can I understand what is driving this year-on-year cost increase? Is it also to do something with initial investments in hiring more people that you had mentioned last quarter and setting up your tech architecture for enabling digital co-lending and DA models? Just want to understand what is driving the high year-on-year increase in cost. Yeah. We have been hiring. Yes, we have been hiring, but it is not significant that should really disturb my cost. The main reason for the increase in cost which you see is a gratuity provision of INR 22 crore, which we had to make due to increase in the G-Sec yield. This is a one-off. This is a one-off which has happened in this quarter, an increase in the gratuity provision of the employees due to an increase in G-Sec yield. Otherwise, the costs are all well within range. Yes, the IT spend has not yet taken place. It will happen. There is a significant IT spend which is to come during the course of the year. It has not yet happened yet, but it will probably come between Q2, Q3, and Q4. Got it. Thanks for that. This is the final question. There is a significant drop in non-interest income. What I want to understand, is there some adjustment in recovery item where you have excluded that from non-interest income and adjusted that with provisions? We were not expecting a provisions write back. Could you also give us more color on the NPA account recovery which has happened and how much is the provision release on back of that? Okay. Yeah, regarding the other income which you see a drop, there has been a slight accounting change in the current quarter which our auditors wanted us to do. Until last year, recoveries from written-off NPA accounts, for the current quarter it is about INR 31.87 crore, was being added to other income. This year, this has been submerged under the impairment, I would say, head. Basically, these INR 37 crore of recoveries, which last year would have gone into other income, has now come under the impairment head. That is why you see this slight anomaly. Got it. In that context, what's your view guidance for full year on this new credit cost? How should we think about this for the full year? Also, for FY 2027 entire year, should we think of 15% as the disbursement growth rate? Yeah. Coming to credit cost, right now it is -5 basis points. The credit cost guidance which we had given at the beginning of the year was about 10- 15 basis points. Yes, we are definitely in line to achieve that. The asset quality has been improving quarter-on-quarter. This quarter, of course, there was one big one-off of INR 180 crore of NPA, which we sold to NARCL for INR 140 crore. That was a big one-off. There will be similar recoveries coming in Q2, Q3, and Q4. A lot of our big legacy loans are in very advanced stages of resolution. You could expect some big reduction in NPA because of resolution of this. For the quarter, the recovery from NPA accounts was INR 540 crore. Last year it was about INR 307 crore. There has been an increase. The asset quality is going to improve. Right now, GNPA is at 2.14%. Guidance for the year is less than 2%. We are definitely going to achieve that. In fact, we'll do much better than less than 2%. The 10-15 basis points credit cost guidance is before the recoveries number. That was the beginning of the year, yeah. That took into account the various kind of recoveries we expected during the year. Okay, got it. On disbursement target for the full year? Disbursement target right now, 14.5% growth. Quarter two, we have given you an indication about 15% growth. For the full year, we stick by our guidance of 10%- 12%, which we had given in the beginning of the year. Got it. Okay. Thank you so much, those were all my questions. Very helpful. Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead. Thanks for taking the question. Firstly, again touching upon the provisioning aspect. That upgrade of restructured account which was going to happen and there was expected to be maybe the provisioning release from there, is that also included in this provisioning line item? If you can just highlight the entire breakup of INR 165 odd crore, how we are getting to this number, because you mentioned recovery from written-off account is also considered out there. That would be very helpful in terms of the breakup, yeah. Yeah. Coming to the first question, yes. That big restructured account of about INR 500 crore is not included in this. Though as per the decision of the executive committee, the account was restructured from the 1st of May 2025. Technically speaking, that one-hour period should have expired on the 1st of May or the 31st of April 2026. Somehow, our auditors were of the view that since the first payment came in a little bit late, of course, it was as per the restructuring schedule, but the payment did not happen exactly on 1st of May. The first payment happened later. They have not allowed us to consider that as upgraded, but that will happen in Q2 or Q3. That big restructured account is not in the reporting of Q1. The second part of your question was the Kunal, can you come again? What was the second part of your question? Yeah. This entire write-back is primarily on account of the recovery from written-off. It's not only provisioning release of this restructured account. No. The restructured account is not appearing in the reporting of Q1. Got it. This payment which you have received, what portion of this INR 500 crore has been received till now? In terms of the release of the provisioning, would it be in terms of the actual payment or maybe now given that one year, because last time you were confidently saying that one year will be done and we will upgrade it. Should we see it on the payment? Because now you are saying Q2 and Q3 as well, it appears like it depends on the actual payment that we will do the provisioning release. No, there is some difference in the point of view of the management and the auditors, statutory auditors. Otherwise, personally, if you ask me, technically speaking, one year is the cooling off period. The executive committee had restructured this account on the 1st of May. We feel that it should have been taken as updated in the current quarter, somehow auditors have a different point of view. We are still discussing with them, trying to iron out the issue, this quarter it has not happened. It could happen in quarter two. That is what I'm saying. Payment received quantum? For the restructured account? Yeah. No. There are two accounts I'm talking of. One is the big account which was sold to NARCL in the current quarter. Yeah, that I got it. Yeah, that is INR 140 crore. I'm talking about this restructure, you said like payment happened later. How much of money have we already received from that? Yeah. This is as per the restructuring schedule. I think, let me see if I can give you. I do not have the exact schedule right now. Okay. This is restructured over a one and a half year period. Oh. Restructured usually like that. The entire money doesn't come upfront. It is restructured to come in bits and pieces over a definitely defined time frame. All those recoveries are coming in. As per the restructuring, the first payment which came in, which I think I don't have the exact date, I think it was in December, right? It was in December. Got it. Right now, the statutory auditors feel our contention is that since the executive committee of the board restructured it on the 1st of May 2025, with a repayment schedule starting from December till up ahead, we should take it as restructured from the 1st of May. Somehow they have a different point of view. There's a discussion going on. Let's see. If it gets resolved, it'll come into Q2. Got it. Sorry, Kunal. Sorry. Yeah. We have received the amount as per the restructuring schedule, that nothing is overdue. Got it. Yeah. Got it. Perfect. The other question was on yields. Particularly the pressure on margins of 22 odd basis points with cost of funds remaining stable, what is actually leading to it? We have shown that yield on advances have declined, was there a BT out pressure and since we have increased maybe the BT out rates as well, has that impacted? I think you mentioned INR 1,500 crore of net BT out and what I recollect last quarter was INR 1,150 crore. Was the BT out also slightly higher during this quarter compared to that of the last quarter and creating some pressure on yields? Yes, BT out definitely. BT out is a part and parcel of this business. Last year it was particularly severe because banks are linked to repo rates. The moment RBI reduces repo rates, the entire book gets restructured to lower rates, whereas in HFCs we have a relook depending on cost of funds, credit cost and all other things. We do take our time in reducing the rates across the board. Definitely there was a BT out pressure last year. If you see Q2, Q3 and Q4 of last year, almost INR 34,000 crore of BT out took place. Current year, our net BT out, as I said, is INR 1,500 crore. It is slightly up from about INR 1,300, INR 1,200, INR 1,300 crore, which is there. That is expected, right? Nothing to do on that, though of course we have outlined a strategy to probably not let customers go. We have certain rewriting rates in place. There is a defined policy on rewriting. We are flexible now. This year we intend to be flexible with the policy in the case of prime customers, very good customers, big-ticket customers. We are willing to bend our policy to accommodate lower rates of interest. In a BT out what happens? A high-rate loan goes out and what the competitor organization offers is the lending rate which is much, much lower than the rewriting rate. Again, we are flexible on that. We have formulated a policy where we are tracking each and every big BT out, negotiating with the customer, talking to the customer. Wherever we feel that the customer is a prime customer, a strong customer, a big-ticket customer, we are offering him rates which are, I would say, comparable to what he is getting elsewhere. That is one thing which we are doing. The other reason for decrease in margins, I think we had last year somewhere around about in April, we had a complete 25 basis point cut on the overall book. That was not factored in in Q1 of last year because as per our rules, 1/3 of the book gets replaced immediately, two-thirds get replaced after the first month of the next quarter, which that means last year happened in 1st of July. Out of a INR 3 lakh crore book, probably INR 1 lakh crore got repriced immediately in April. The remaining INR 2 lakh crore got repriced from the 1st of July. That would also have an impact on the, I think, Q1 year-on-year because decrease in the spreads and the NIMs. Got it. Yeah. Thanks. All the best. Yeah. Thank you. The next question is from the line of Zhixu an Gao from Schonfeld. Please go ahead. Hey, thanks for the opportunity. Just some bookkeeping questions. What's the overall incremental disbursement yield in the first quarter of this year? In the first quarter of this year, our disbursements was INR 15,014 crore as against INR 13,116 crore in the first quarter of last year. I mean, excuse me, the yield on these disbursements. Beg your pardon? The yield on the disbursement this quarter. The NIM? Yield. Those are incremental disbursement yield. Yield. Okay. The figures I've given you, INR 15,014 crore up by 14.5%. This is in line with our expectation of 15%, which we had guided during the Q4 results conference call. We are on track, 15% growth in Q1. We are on track with what we expected. Going forward in Q2, we expect this momentum to continue and we expect the company to register 15% growth in Q2. Sir? I mean disbursement yield, as in interest yield on these INR 15,000 crore of disbursement. What's the yield on that? You're talking about. Incremental loan rates. Incremental yield. The interest yield on the incremental yield on the disbursement this quarter. Sorry to interrupt. Mr. Gao, may we request you use a microphone while asking your question? You're not that audible. Am I audible now? Yep. Please come, yeah. What's the incremental disbursements yield this quarter? As in the INR 15,000 crore disbursement, what yield on average is that? You want incremental yield on whatever we have disbursed in this quarter? Is it? Yes. On average. Yes. Incremental yield for this quarter is 8.25%. 8.25%. Your overall portfolio yield, I'm looking at the slide, is 9.12%, right? No, we could not get you. Mr. Gao, we could not get you. Sorry. The incremental yield is 8.2%. If your overall portfolio book yield or net book yield is 9.2% as of 1Q, then shouldn't the margin continue to compress because there's 100 basis points gap between your new yield, incremental yield and your book yield? Yeah. Cumulative yield is 9.12% as on 30th June 2026. Yeah. There's 100 basis points gap between your incremental yield and your book yield, cumulative yield. How are we maintaining the margin going forward? Because as you disburse more and the repayments come, the book yield will trend down towards our incremental yield, right? No doubt about it, there was some pressure on our cost of borrowing. Our strategy is definitely we are now focusing on the other housing loan portfolio, which is giving all of the 150 basis points extra, if you compare with the IHL portfolio. That portfolio is growing at around 20% in this quarter. We are hopeful that IHL, which was grown by 15% in this quarter and portfolio diversification from IHL to OHL, other than housing loan, means your LAP and LRD, that is the high yielding segment. I think that segment will compensate our overall yield for the year. Sorry, the composition of your. Sorry to interrupt. Mr. Gao, may we request you return to the question queue for a follow-up question? Welcome. Thank you. Thank you. The next question is from the line of Abhishek from HSBC. Please go ahead. Hello, good morning. Good afternoon now. Can you tell me last year, and I'm talking about disbursements only. Last year in project finance, we had a disbursement of roughly INR 2,000 crore. This year, is there a target or a sanctions pipeline which you follow or is it more transactional and when it comes to you through your team, that's when you decide whether to underwrite or not? How do you approach this? Well, yes. Last year, INR 2,000 crore of disbursement, a very muted year as far as developer book was concerned. This year in Q1, we have disbursed about INR 872 crore. There is a growth of more than 450%. Target for the year in the developer book is INR 4,000 crore. We are aiming at INR 4,000 crore, but we are expecting somewhere around about INR 7,000 crore-INR 8,000 crore. The process is transactional, yes. As and when the borrowers approach us for loan, we do the credit appraisal, see what rates they are asking, and then take a call whether from the credit perspective, risk perspective, it is doable. Also from whether from the rates perspective, is it in our interest to offer them that loan at whatever rate they are asking. Sir, is there a sanction pipeline or is there no sanction pipeline? There would be some cases which were sanctioned last year. See, developer finance is basically construction finance, right? Yeah. This is dependent on the stage of construction. Any building coming up in the initial stage, plinth level construction complete probably with disbursement, what? 25%-30% of the entire sanction. As and when the construction progresses. How much is the sanction, sir? Is it INR 7,000 crore was the sanction, is it? No. Last year the sanction was closer to INR 5,000 crore. Sanction does not translate into disbursement, right? Supposing we sanction a loan at 9.5% to, say, Sobha in Bengaluru. From our point of view, it is sanctioned. Sobha, supposing is asking me 8%. Probably I'm not okay with it. That sanction automatically. There would be some I understand that comparatively things change. If you have a sanction today, there would be some predictability of it converting into a disbursement or that depends on when the disbursement comes up. No. If a loan is sanctioned, of course, there are some pre-disbursement conditions. If something is required and this and that. Sir, just to explain, the reason I'm asking is that you have an INR 4,000 crore target for the year. I just want to know what is the predictability like. You will achieve INR 4,000 crore or that is dependent on when that disbursement comes up and whatever commercial terms are acceptable or not. It may not be INR 4,000, it may be INR 2,000. You can't say right now. This INR 4,000 crore would include probably about INR 700 crore, INR 800 crore of sanctioned amount where the disbursement would be made in the current year. Right? What we have already sanctioned in the previous financial year. The rest of it would be new sanctions, new files which was during the year. We are expecting 100% achievement of this disbursement target of INR 4,000 crore. In fact, what we are aiming for is a disbursement around about INR 7,000 crore-INR 8,000 crore. Understood. Got it, sir. You will maintain 10.5% over there, lending rate? That would be your cutoff broadly. That is not a benchmark. That is not a benchmark, but that is somewhere where we would like to be. Right? Yeah. It is no use growing your book at 8%. Exactly. Internally, you want to stick to roughly 10.5%± something. Yeah. Just so that profitability is maintained. Understood. In LAP and LRD, sir, again, similar question. Last year you did about INR 10,000 crore. This year you've done INR 2,000. Is there again a target for LAP and LRD put together for the year? This year the target is INR 15,000 crore. INR 15,000 crore. Got it, sir. What is the incremental lending rate over there in LAP and LRD? LAP is about 9.4%. In LAP? In LAP and LRD. We call it the NHI and the NHC segment. Yeah. Both of them are similar, 9.4%? Yeah. Yeah. Yeah. Overall, the LAP and LRD book is 9.4%. That is your incremental rate, right? That is your fresh disbursement rate. Incremental. Got it. Abhishek. Yeah. Abhishek, sorry. I'm intervening, for this NHI segment, LAP and LRD, my cumulative yield is 10%+, but my incremental yield is 9.43% for this quarter. Okay. What is the cumulative yield currently on the book? LAP and LRD. No. LAP and LRD. It is more than 10%. Yeah. Okay. More than 10%. Got it. Sir, finally on your credit cost, I didn't get the exact breakup. How much is actual credit cost and how much is recovery for the quarter? Can you give that breakup? Recovery from NPAs for the quarter is INR 540 crore. No. The stuff that is coming into your P&L. Sorry. The INR 165 crore provision, how much of that is provision and I think there's a net write-back, right? INR 164 crore something. How much is the recovery part or write-back part and how much have you actually provided? Sir, okay. Recovery from write-back. No. There is a P&L entry of INR 164 crore, right? That is a write-back total, if I remember correctly. Hello? Okay. This is INR 132 crore is from ECL. Okay. This INR 164 crore of recovery in the ECL is INR 132 crore from ECL and INR 32 crore from recovery. Okay. I'll take that off then, no problem. I got my answer. Thank you so much and all the best. Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Hello, am I audible? Yeah, Abhijit, you are audible. Yes. Yeah. Hi, sir. Good afternoon. Just two things. One is, I think earlier in the call you had said that while this quarter you reported margins of 2.58%, for the full year, we are now guiding for the lower end of the margin range, which you had given earlier, which is 2.6%, if my memory serves me right. What I'm trying to understand is, don't you think that what we have discussed in this call earlier as well, that margin pressure will likely continue, given that the overall portfolio yields for us are about 9.2%, 9.12%, to be precise. What we acknowledged is the incremental yields on the business that we are doing is about 8.25%. Pressure will be there on yields. On the cost of borrowing side also, if you could just enlighten all of us what is the maturity that is coming up this year, both on the NCDs and the bank borrowing side. At what rate are they coming up and what is it that you expected to get refinanced at? I am just trying to understand that interplay between pressure on yields, which will be there, while I heard you that we are trying to make some changes in the product mix, trying to increase NHI, NHC. That is a much smaller proportion of your book and will take time for it to make any meaningful improvement in the portfolio yields. Just that bit, if you can help us understand. Yeah, Abhijit. Your first question was my incremental cost of borrowing. It is 7.06% for this quarter. Second question was how much amount is going to mature in this year. It is around INR 17,000 crore. The average cost of that is around 7.38%. Got it. Which you expect to get refinanced at maybe 7.1%. Is that a fair assessment? Yeah. Can you come back please? What was your question? What I'm trying to say is the INR 78,000 crore that you just said, at 7.3%. You expect it to get refinanced at a lower rate? Almost. Rate scenario is, it is slightly on higher side, but what I said, my incremental borrowing cost is 7.06% during this quarter. Probably, I'm hopeful that I will get it at a lower cost, at what it's maturing. Got it. Sir, safe to conclude that at least cost of borrowings do not inch up from here. At the margin, your portfolio weighted average cost of borrowings for your liabilities comes down in the coming quarters. It's almost in line, but it may increase by 3, 4 basis points on cumulative basis. If you compare with my cumulative cost of borrowing, it was 7.27% last year. That's increased hardly 1 basis point only. Correct. You expect it to stay there or increase by 3-4 basis points, is what you say. 3-4 basis points maximum. Got it, sir. This is useful. Then the only other question was a data keeping question. In the earnings call, you share your stage three segment-wise. Can you do it for all of us? Yeah, Abhijit. You can note it down. You want it group-wise, right? Individual loans, HC project, et cetera. Yes. Yeah. Individual loans, stage three, the EAD is INR 2,967 crore. What else do you want? You want the provisioning also? Yes, sir. Either this or the percentage numbers that you put out for IHL, NHI, NHCL project groups. Okay. Percentages is like this. You want the GNP or you want the EAD? Abhijit, you tell me clearly what you want. Sir, I want the GNP. The stage three numbers that we give segment-wise. The stage three in individual, the total EAD is INR 2,967 crore, and the percentage is 1.09%. Okay. NHC and project, it is INR 2,819 crore, and it is 20.53%. NHI is INR 1,113 crore, and it is 3.06%. Overall, INR 699 core, and 2.14%. Got it. Just one follow-up on that. IHL, you have actually seen it move from 1.03% to 1.09% this quarter. Yeah. An increase of 3 basis points is there. Got it, sir. That answers my question. Thank you so much, and I wish your team the very best. Thank you. The next question is from the line of Rishi Mody from Mody Advisory. Please go ahead. Yeah. Hi, sir. Can you hear me? Yeah, I can hear you, Rishi. Hi. I'm new to the company, so I just had some more questions on the business front rather than just this quarter. The first question I had, sir, you had mentioned in the Q3 FY 2026 call that you all are exploring the possibility of bringing in an external CEO, non-LIC individual, probably someone from the industry, and discussions are ongoing with LIC. Just wanted some further updates here if you all have anything which you can share with the wider audience. Are you sure I said this? I don't think I ever said that. Yeah. In your Q3 call, I think it was mentioned for the first time that you all are discussing with LIC on bringing in external No. Like you all are exploring the possibility of an external leadership. No, no. This has never, okay. Okay. That's not happening. All right. Second, I wanted to understand, on the affordable housing finance business, you mentioned an external team, completely external team, non-LIC Housing Finance people to run it over the next two, three years, you all want to build it up. This year you all are assembling the team. Just wanted to know, are we on track and what budget have you all set aside? It's still a work in progress, which has not been rolled out as yet. Yes, expected that the concurrence of the board and the NRC, which is going to give me the sanction for additional staff, we will be taking it up in the current year. How much budget are you all keeping aside for this over the next two, three years? How much OpEx you all are willing to fund? How much loan book are you all willing to take exposure to? Any guardrails around that? Oh, yes. There will be guardrails because the affordable business is a risky segment, there will be definitely credit-related guardrails will be there. As I said in my last call, let the child be born and then we see how to groom him and develop him, right? We have not taken any targets for affordable business right now. Yes, we are doing affordable business, but not with this structure which we had in place or which we discussed in the con call of Q4. It is a work in progress, but expected to take off somewhere in this year with the concurrence of the NRC and the board. Okay, got it, sir. Third question, sir, I wanted to understand. Till last year or the year before that, you all had some INR 7,000 crore worth of loans which were written off and under process of recovery. Just wanted to understand how much of that amount has been recovered and how much do you expect to recover over the next two, three years realistically? Out of INR 7,000 crore, I believe approximately INR 3,000 crore would be the amount in write-off, technical write-off what we call. Right. Okay. We still consider it to be a part of our book and we aggressively pursue all legal and other methods of recovery. In the current quarter, I think we have recovered about INR 37 crore from this pool. Most of these are your legacy loans. Most of it from the developer finance book. These loans are in various stages of resolution, I would say. Right from your surface, I would say legal recourses to cases in DRT where we are expecting decisions, NCLAT, NCLT. Also some of these cases are in negotiations with the borrower themselves for a one-time settlement, OTS what we call. This year we would expect some good recoveries from here from at least to the tune of INR 500 crore- INR 600 crore. INR 180 crore, n o, this was not from a written off account. This was from a, yeah. Okay. INR 500 crore-INR 600 crore this year. Do you think like another INR 2,000 crore over the next two years can be recovered out of this? Yeah, definitely. We'll be targeting more, definitely INR 2,000 crore. Okay, got it. Sir, my fourth question. Over the last few years, you all had implemented Project RED. Now you all are venturing onto this new IT straight-through process, if I'm not wrong. Just to understand Project RED, what benefits are you all seeing today? How should one think about, will we see a loan growth acceleration? Will we see reduced [VPO? Would we see reduced cost to income or lower GNPA on back of Project RED? Again with the straight-through process, I think it's more automated underwriting. Do we expect faster processing, faster tag? I'm just trying to understand, we're spending this much, how does an investor measure your success? Is there some targets that you all are setting where we see that this tech investment is actually helping us? The latest this year, how much do you expect to spend on IT? Finally, if you would have to measure yourself against, say, a Bajaj Housing or a Can Fin Homes, where would you say you would be on the tech capabilities as, say, a percentage of their capabilities if you've done some assessment? I think Project RED was basically our change of our complete overhaul of our LMS and LOS, right? In the earlier system, which we had was Castle. This was implemented in 2012. This was, I would say okay. For its time it was okay, coming into the new digital world, we found that it was not adept or not in tune with the current requirements of the digital world, the various apps we have, the various APIs we needed to link. We went in for a complete overhaul of our both the LOS and the LMS. That is complete. That has happened in 2023, 2024. Now we are integrating our various, I would say, apps and applications and the other tools which we have to improve the customer experience, improve our service delivery, improve our turnaround times, improve the way and the methods of working. One of them you talked about was this STP process, where we are talking of complete digital onboarding, digital credit appraisal. That has been implemented in late, somewhere around about February of last year. Four months of experience we have. Yes, we had very tight guardrails around that, which resulted in a smaller number of cases being eligible to go through the STP process. We are currently reviewing that, based on our experience, we are quite sure, we are, I would say, assured that, okay, whatever guardrails were put in place, whatever risk mitigation measures were in place are working, now we can afford to relax it a bit. In the first quarter, almost about INR 960 crore have been disbursed through the HomY App, which is also an onboarding platform. All these new digital things which help us reduce or cut back on our manpower or rather redeploy our manpower, if I may use the word. There's not going to be any retrenchment or anything of that sort. Whatever excess manpower we get by way of introducing these digital initiatives, they are going to be redeployed in other productivity areas so that the productivity goes up. That is a work in progress. Another thing, this year, what we are looking at, we are looking at a complete data Lakehouse project, whereby the entire data of the company is going to be, I would say, consolidated and used effectively for data mining, data drilling. AI is going to be integrated into that so that it helps us in generation of leads. It helps us in our, what you call EWS, early warning systems for collections, for NPAs and for a whole lot of other systems. That is going to start this year. The RFP, I would say, tendering is already over, very shortly we are going to issue the contract to the successful vendor, which I will not name at this moment. These are the things in progress. If you say compared to Bajaj and Can Fin, yes, I do agree, they are probably slightly ahead of us at this moment, at the current moment, but we will catch up with them, no doubt about that. We will catch up with them. Our systems have to be equally robust and even more robust than systems which at least Can Fin has. Bajaj is, of course, the benchmark in the industry, in the housing finance industry, if I may say. Right. This is a work in progress, is going on in all fronts, we are expected to do well. This result in reduction of costs will result in, I would say, generation of additional manpower for us, which can be used for productive purposes. Got it, sir. If you could just quantify how many bits of. Sorry to interrupt you, Mr. Mody. May we request you return to the question queue for a follow-up question. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to one per participant. The next question is from the line of Sonal Minhas from Prescient Capital. Please go ahead. This is Sonal Minhas. I will just like to continue from the question that somebody in the queue was just asking. Sir, when will these software products start adding meaningfully to the top line and the growth of the company? That's one. Secondly, also that from a preparedness perspective that if you want to lend, let's say, at individual loans at higher yields, what is the preparedness required from a people systems and from a mindset perspective? Because it's a different TG of customers that we need to lend at. Just want to understand subjectively what is the preparedness for that. Yeah, regarding the digital preparedness, it's not a one-time job or a one-day job. This is a continuously evolving process. Digital systems are put in place, various things like onboarding of customers for credit appraisal, like the STP process we have done for generating EWS, for helping us reduce our delinquencies, reduce our NPAs. This is a complete work in progress. Now with AI coming in, a lot more new tools coming in. We are exploring those also. There cannot be an end date to that. It is a continuous process. It will keep on happening. The ultimate aim and objective is that make the experience for the customer much, much, much better. Number two, make it very cost-effective for the company to do its business and probably reduce the overall costs, which contribute to the margins of the company. This is an ongoing process, right? The second part of your question, what was it, Sonal? Sir, I was asking that maybe a timeline would help in terms of understanding when would the growth of AUM would be at par with the names that you were just talking about, Bajaj, Can Fin, maybe couple of other names. Is there a broader guidance of when can we expect, let's say, a double-digit growth number or a higher growth number in terms of AUM growth once this preparedness is there and we're ready internally? Yeah. If you look at our peers, for example, I do not know the Bajaj numbers. Probably their book growth would be somewhere around 20%-25%. Yes. Yes, sir. If you look at us, yes, 4% growth seems very low. As CFO was saying, we've added almost INR 12,000 crore, INR 30,000 crore to our book in the first quarter. Right. Since because my base is huge, INR 3 lakh crore, as probably Bajaj being half of mine. Naturally, on the same growth, Bajaj would be showing a double growth than mine, right? Matching the peers until they reach our size is probably going to be difficult. Yes, I agree to that. Definitely, yes, we cannot be satisfied with this 4%, 7% growth, which we have been demonstrating over the past three, four, five years. Definitely, we need to start off with a double-digit growth and probably inch towards 12%-13% consistent growth over a period. This year, we are hell-bent on trying to give a growth of close to 8%-10% in the book, and at least a 15% growth in the disbursement, that we can start our journey of growth, both in the disbursement as well as on the book, which we have not been showing for the past three to four years. Got it, sir. Thanks for explaining, sir. Thank you. Thank you. The last question for the day is from the line of Arun Antony from JM Financial. Please go ahead. Hi. Good afternoon, sir. Just a couple of questions. I think earlier the guidance for disbursement was around 16% and growth was around 10%-12%. Is that being revised to around 8%-10% growth and disbursement of around 15% currently? Also just one more question on the disbursement side. I think last quarter you had mentioned that in April you were seeing around disbursement growth of around 21%, right? Then what happened in May and June so that the disbursement growth for the overall quarter dropped to 14%? The last question on credit costs is that I think the guidance was around 10- 15 basis points for FY 2027. Considering the accounting change that was carried out in this quarter, is the guidance for credit cost still in that range, or it would be lower than that? These are my questions. Coming to disbursement. Yes, one month is not an indicator of what is going to happen in the long term. Yes, April, I think when we talked, we were showing probably a 21% growth. The guidance we had given for the quarter was 15%, and we have almost been there. 14.5% is what we have achieved. Again, as I said, guidance for quarter two also stands at 15%. Yes, some months could be good. July could be good, August could be slightly lower than July. September could be good. Let us take it for the quarter. 15% is what we had guided, and 14.5% is what we have achieved. For the year, our guidance for the book growth was double digit, and for the disbursement growth, it was between 10% and 12%. We continue to maintain that. Credit cost right now is - 5 basis points. For the year, we had given guidance of 10- 15 basis points. We stick to that. We stick to that guidance of 10- 15 basis points for the year. Just to clarify, actually AUM growth guidance is around 8%- 10%, and disbursements for the full year is 10%-1 2%? Yeah. All right. Thank you. Thank you. Ladies and gentlemen, that was the last question of the day. I would now like to hand the conference over to the management for closing comments. Yeah. Thank you. Thank you, friends. A lot of insightful questions. Yes, I know the concern is on margins and on growth, these two aspects. We are very well aware of that. As far as the growth, I said, the disbursement has picked up in Q1. We are optimistic that the trend will continue in Q2. As far as the margins is concerned, it's going to be challenging considering the fact that our segment is basically what the banks peddle in. We are basically competing with banks. We need to continue to compete, keeping an eye on the sort of margins we get or the spreads we get on our business. The other thing is the diversification strategy, which we are pushing hard, showing traction, showing growing green shoots. These things, I believe, will help us in achieving our guidance of 2.6% on the NIM parameter, which we have given. Q2 is going to be a good quarter as of now. From what I see as of now, Q2 should be a good quarter for the company, should be a quarter which will help us accelerate our journey to achieving the guidance we have given to all of you. Thank you. Thank you for your participation. Yeah. Just I want to supplement something, though. Our disbursements started growing in double digits. Definitely this quarter is really great in terms of my PBT and PAT. My asset quality is also improving gradually. The return on assets for this quarter again improved by 9 basis points. We are definitely hopeful that this year would be definitely do something extraordinary by end of the year. Thank you very much. Thank you. On behalf of LIC Housing Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.