Ladies and gentlemen, good day, welcome to the L&T Finance Holdings Limited Q1 FY 2024 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star zero on your touch-tone phone. Please note that this conference is being recorded. Before we proceed, as a standard disclaimer, no unpublished price-sensitive information will be shared during the call. Only publicly available documents will be referred to for discussions during interaction in the call. While all efforts would be made to ensure that no unpublished price-sensitive information will be shared, in case of any inadvertent disclosure, the same would, in any case, form part of the recording of the call. Further, some of the statements made on today's call may be forward-looking in nature. A note to this effect is provided in the Q1 results presentation sent out to all of you earlier. We have with us today Mr. Dinanath Dubhashi, Managing Director and CEO, and other members of the senior management team. I would now like to invite Mr. Dinanath Dubhashi to share his thoughts on the company's performance and the strategy of the company going forward. Thank you, and over to you, sir. Thank you. Ladies and gentlemen, a very good morning to all of you. Welcome to the call. You have all seen the results, it goes without saying that we are very enthused with the results. FY 2023 has been a great year for us, no doubt, the results that we achieved during FY 2023 actually gave us the confidence to say that the targets promised for Lakshya 2026, many of them would be achieved earlier, some of them in year 2024 itself. Since then, all of us in L&T Finance have been working relentlessly towards this goal of achieving some of those ratios, especially retailization, asset quality, you know, ROA, much, much earlier. I'm most happy to say, other than the fact, of course, that we have shown good profits, good credit costs, but most of you are happy to say that this quarter is indeed a testimony to that promise, which, we had talked about last quarter. We are one quarter down in FY 2024, and I can say that the performance for this quarter is well in line with these accelerated timelines. Before I talk about the achievements for this quarter and our strengths, et cetera, I believe it is necessary for me to talk about a very important development regarding the company. A few things changed over the last couple of weeks, and in a way, I would like to say that not much has changed as far as the plans of the company are concerned. I will try and explain what I mean by this statement. First, let me address what has very clearly changed. As announced on July 1, 2023, and all of you would be knowing well by now, I have personally taken the decision to superannuate from the company and will be superannuated by April end next year, that is April 30, 2024. Let me talk about this a little bit. Many of you are my friends and well-wishers. I would really like to take a few minutes to explain this. After a lot of thinking and soul-searching, I reached a decision some time back that I would like to follow certain passions of mine, more full-time and not just as a hobby, which I have been doing for quite some time. This includes, few of you are aware, is working for the cause of stray dogs. Along also, second thing is my passion for studying history and mythology. I know all this, you know, seem truly as a passion, and they indeed are. What encouraged me actually to take the decision was the fact that the organization was well on the road to success and was creating sustainable value for all stakeholders. Lakshya 2026 was well and truly launched and assimilated throughout the organization, and most importantly, we had worked in detail on creating the strong management bandwidth and robust succession plans, they have been put in place in the company. That was when I actually felt that now I am confident of passing on the baton and communicated to the chairman my desire to move on earlier than what my contract as MD was, which was 2026. We found a good successor to me, who brings in very complementary skills to our organization. With these building blocks well in place, I believe that the age of 58 years, which I will be in 2024, is as good a milestone as any to finally hang up my professional boots and follow my other passions. Sudipta, Mr. Sudipta Roy, who joins us from ICICI Bank, will take over as MD and CEO from January 24, 2024. After that also, I will act in an advisory role as an advisor to the Chairman for one more quarter, for April 30th, until April 30th, 2024. It's a very well-planned handover kind of process. This is when I will be signing off completely. Sudipta has already joined the LTF family as the Chief Operating Officer from July 1, 2023. He has completed just about three weeks now. Over the next two quarters, I will be overseeing Sudipta's gradual assimilation in the organization. This is how we have planned a very smooth transition over the course of the next six to eight months. I would like to assure you that we have a well-thought-out, data-wise action plan to ensure that the entire process happens as seamlessly as possible. Let me explain that why I said that not much has changed. Over the last few quarters, we achieved some really tangible milestones. So much so that we could fast-track Lakshya goals, many of them to FY 2024. This has helped in creating a strong fortress with some really unique strengths, which we call as sustainable differentiators. In addition to these building blocks, some transformational projects have also been launched within the company. These projects, other than enhancing the organization's business strengths, are also being instrumental in involving people in the projects, which challenge and expand their skill sets and get the next line, next line of management ready. Our target, our plan of making the company a leading digitally-enabled retail finance company is well on course, in fact, ahead of course. The company will draw on Sudipta's strengths, and he will draw on the strengths of the significant market positions we have achieved in our flagship businesses. Needless to say, the focus is going to be on making LTF a retail fintech giant. With this, join me in welcoming Sudipta to the LTF family. I will now hand over briefly to Sudipta to introduce himself. Sudipta, go ahead. Thank you, DD, for giving me the opportunity to introduce myself. Good morning, everybody on the call. It's an honor and privilege to speak to such an eminent group of analysts, and I will take this opportunity to briefly introduce myself. I have joined L&T Finance from ICICI Bank, where I spent the last 13 years of my career, and my last role was as a group head, managing diverse businesses like unsecured assets, cards, digital payment solutions, student ecosystem banking, e-commerce and merchant ecosystem, and last but not the least, connected and API banking. I was also responsible for developing and operationalizing ICICI Bank's digital banking solutions for the millennial banking segment. My team and myself were responsible for growing the bank's unsecured assets businesses five-fold since 2017, with significant contributions to profitability for the overall organization. This was done with an extreme focus on growing it in a risk-calibrated fashion, which demonstrated an excellent resilience of the portfolio during the difficult COVID period. My team, under my guidance, launched the education loans in the consumer finance businesses in the bank, later extended education loans into the country's first comprehensive student ecosystem offering, which is called Campus Power. The ICICI Bank's cards business was nurtured back to significant profitability since the difficulty has posed a global financial crisis. The Amazon credit card program, executed by my team, is now hailed as one of the most successful issuance programs in the country and a textbook case of Big Tech and Big Bank cooperation, having issued four million cards since inception, making it the largest co-brand program in the country. The personal loans and unsecured Business Loans was expanded on the back of cutting-edge analytics and has scaled significantly over the last few years. Prior to ICICI Bank, I spent about five years in Deutsche Bank, managing product management for the Deutsche Bank's cards business in India and China. Prior to that, I spent about six years in Citibank, learning the ropes of financial services, distribution, cards and lending product management, payments, and allied risk modeling, as well as digital banking. My strengths are in cards and retail lending distribution, retail lending technology and allied risk modeling, payments and digital banking, and execution of digitization initiatives at scale alongside P&L and general management capabilities, having managed large-scale businesses in ICICI Bank. I'm incredibly excited to join the capable and committed team at L&T Finance to take forward the retailization journey as part of the Lakshya 2026 objectives. I'm quite certain that the initiative and the hard work of the great team at L&T Finance, we should be able to make a substantial contribution to India's retail financial growth story in the coming years, and really demonstrate the strengths and synergies of the stated objective of becoming Fintech@S cale. Thanks a lot, and back to Mr. Dubhashi. Thanks, Sudipta. Let's now look at the performance for the quarter. It has been more than a year of unveiling our strategic plan, Lakshya 2026, wherein we said we will strive to make LTF a top-class, digitally-enabled retail finance company, moving from product-focused approach to customer-focused approach by creating a Fintech@Scale. I remember telling you that every decision ever since has been taking, keeping in mind these targets of Lakshya 2026. We have continued to improve not only the products we offer, but also the systems and processes we deploy within the company. In fact, every quarter I have gone, you know, we have gone out of our way to try and put even in the investor presentation, the specific moves that we are doing to become more and more a retail company, more and more a company absolutely entrenched in retail and back to digital. This investor presentation also you would see lot of slides are actually dedicated to see how we are farming our large customer database. We have actually given it business-wise, and I will talk a little bit more about that as we go ahead. Our strategic plan of Lakshya was largely set around, as you all remember, four milestones. Let's see how we have reached on the four milestones. The first milestone was 80% retail, and in fact, we achieved 75% by March. I had already indicated to you that, you know, 80% is obviously easy now, and we will in fact try and become 90% by FY 2024. In keeping with that promise, we have already gone beyond 80%. In this June itself, we stand at 82% retailization. The second milestone was about retail growth of more than 25%. You are all aware that we've shown a 35% growth last year, and now followed by a 34% growth in this quarter. We had also said that our GS3 and NS3 will be below 3% and 1% each in retail. As you would see, GS3 has already reached about 3.2%, and NS3 remains steady at 0.7%, which is well below the 1% target. Last but not the least, we had put a ROA target of 2.8%-3%. We had reached 2.95% in Q4, in Q1 we have reached the 3.08%, which I genuinely believe is a rubicon in retail world, that once you are above the 3% mark, from there, you can look at, you know, only improving from there. As I would explain during the presentation, you will see every component of that ROA bridge is falling well in place. Without a doubt, I believe we have delivered on most of our Lakshya goals in line with the accelerated timeline. Here I would like to point out that our achievement now is in terms of attaining desired percentages. Let me explain. Some people have asked me that now we have achieved Lakshya, is there a new Lakshya in the office, right? Let me take that straight away. If you see the Lakshya goals that we had put in place, which was 80% retailization, obviously there is a new goal of 90% now, which we will achieve very soon, by 2026, hopefully, we will be 100% also. We will see the moment we achieve 90%, we will set six. The others, that let us take a GS3 ratio, or a NS3 ratio of 1%, or a profitability ratio of above 3% are more ratios. The, the growth now that, you know, the challenge and the endeavor of management over the next three years will be continuing with this growth path of 25%-30% CAGR, while keeping this asset quality and this profitability targets intact. Now that we have reached 3%, there is no way that we will fall below that, and these kind of NS3 levels and credit cost levels we have reached, we will keep them sustainable while achieving this growth rate of between 25%-30%. That end goal, with all the projects, all the aspects, all the business trends that it involves, remains, steadfastly remains our Lakshya 2026. These are just four, I would say, ratio milestones achieved. The route from now on, the path from now on, will be keeping this profitability and asset quality achievements intact while achieving the further growth as we go. If we look at the highlights for this quarter, clearly profit after tax, if we talk retail, INR 533 crores, retail profit is actually 176% up. Retail NIM + F ees remain very, very strong at close to 11.7% or so. Strong retail quarterly disbursements, INR 11,193 crores, which is up 25% from last year. Book size growth, retail book now INR 64,200 crores, which is up 34%. Asset quality, we already talked about, and ROA is also we have already talked about. Retail ROE now close to 16%. That's where the retail performance is going. If we look at consolidated performance, the PAT is up to INR 531 crores, which is up 103%. Capital adequacy remains strong at 25.75%, and we have also declared our highest ever final dividend at INR 2 for this financial year. Okay? Obviously, as I always said, as the balance sheet becomes more and more Retail and Wholesale, we keep reducing, we are, you know, confident that these kind of ROAs and ROEs start getting converting to overall ROAs and ROEs. I would also like to point out that overall ROA has also crossed 2%, now this acceleration towards conversions to retail ROA will be faster as we keep reducing the Wholesale book. One ratio which I keep talking about, in addition to retail NIM + F ees, which remains strong, is our OpEx plus credit cost ratio. I always say that to some extent, these are fungible and OpEx plus credit cost has already reached about 7.11%. I always guide people towards 7%, that this should be around 7% OpEx plus credit cost should be more sustainable even at these kind of growth rates. We are quite sure that we will reach that level soon and stay there and improve from it. I would say that we have performed better not only than Lakshya, but also in line with the ROA tree guidance that I have provided to you, and expect to stabilize at this kind of stat, trajectory in the future. Let me talk about how we have achieved it, some of the strengths. I'll take a few minutes before we open for questioning. Over the years, we have developed a deep pan-India franchise, and our performance quarter-on-quarter bears testimony to the strength of this franchise. We have optimal mix now of physical presence, preferred channel partners, coupled with leveraging our database, and of course, our digital tools for reaching the customer. We today have a database of about INR 2.1 crore customers, out of which INR 1.4 crores are in Rural and INR 70 lakhs are in Urban, which helps us in building a superior Retail franchise. While we disbursed this quarter itself to INR 6.9 lakh new customers, our active customer base now stands at INR 89 lakhs. Out of those INR 2.1 crore, INR 89 lakhs are active, the rest have repaid and are in our database. The important thing is share of our cross-sell upsell in the total disbursements now stands at 34%. This is very important to explain. We of course, we envisage these numbers to slowly increase as we concentrate our efforts on increasing the share of cross-sell and repeat loans, like Pragati loan, Vishwas loans, Kisan Suvidha, 2-wheeler loyalty, consumer loan top-up, housing loan top-up. This is how we have built a strong cross-sell engine with great use of digital and analytics, which shows the strengths that we are building to address our additional needs of our customers. It definitely benefits the customer, gives the customer the advantage of having the loan ready if the customer has been good with us. It does a very fundamental thing. Any retail finance company, especially a retail finance company who is predominantly in Rural business, is normally subject to seasonalities and cyclicality. That's the rule of life, and every company will be subject to that. The strategies of good companies, good management, should be try and reduce that dependence. I don't think anybody can claim that we are completely, you know, protected, totally, 100% protected from any seasonality, but the whole idea is quarter on quarter, year on year, we have to reduce the impact of that seasonality, both on business and on collection. How do you do on business? Very clearly, there is one big segment. I mean, there seasonality or cyclicality comes into account when you are buying a new tractor or you are buying even a new cow or a new 2-wheeler or a new house, okay. It doesn't come into account when you are an existing customer of your company and you may have any other needs. That is where, while we believe and we acknowledge that new business will always be seasonal, but this layer of cross-sell, upsell, which we do to our existing customers, reduce the effect of the seasonality. If you see, the quarter-on-quarter disbursements of the company that we have shown over the last eight quarters also, you will see this dependence clearly coming down. Our Q1 disbursements being almost in line with Q4 disbursements, you would acknowledge that Q4 is a fantastic quarter for most companies, actually shows that this is working quite well. This is just the beginning. It will be, you know, our endeavor to increase this 34% slowly to 40% first, then 50% as we go ahead. Of course, it comes with the added advantage that acquisition cost is lower, and of course, credit cost is way lower because this is, these are tried and tested customers. On collection side also, it makes a lot of sense. On asset quality side, it makes a lot of sense. On disbursements, it makes a lot of sense, but much more importantly, on the character and the resilience on the company, it makes tremendous amount of sense. Going ahead, explaining our Fintech@Scale. Over the course of last multiple calls, I have talked about transforming LTF into a Fintech@Scale. Building a Fintech@Scale requires not only a comprehensive strategy, but continuously putting data analytics to excellent use. Our motto at LTF is to never let a good customer go. We want to be there for our customers right from the start of their journey with us, to serve their diverse financing or even insurance needs with our differentiated product offerings. Our steadfast focus on data-driven insights, innovations, and customer-centric solutions have driven this and will continue to contribute to the success of the bank. Specifically, talk about the PLANET app now, talking about Fintech@Scale. Our D2C app, PLANET, was launched in March 2022, and, I mean, frankly, I must admit that it has been built through a minute planning and detailing, but the kind of success it has seen was even beyond my expectations. From offering service features like downloading simple statement of accounts and interest certificates, it has developed into having superior engagement features, like providing mandi prices for farmers, insurance, credit scores, features like D2C journey for top ups, et cetera. The app has already crossed INR 44 lakh downloads now in a span of little more one year. I would like to give a quick recap that the app crossed INR 10 lakh in November 2022, INR 20 lakh in January 2023, INR 30 lakh in April 2023, and INR 40 lakh in July 2023. Really, it is actually catching speed with enhanced features on the app and focus on marketing this app to our customers. Lots of things are going to be unleashed. Lots of efficiencies are going to be unleashed by this app. We have already done INR 360 crore of collection from the app and business of more than INR 3,000 crore through the app, of course, catered to INR 67 lakh+ service requests through the apps. It has genuinely inverted the service pyramid. You know, branches just two years back, contributed 51% of our. Digital contributed only 14% of our service requests coming in. This is completely reversed to branches contributing 9% and digital contributing 77%. Just imagine the pluses which can come and come from this for costs, but much more important for quality customer service and hence, hopefully, much higher customer retention. One area which remains a complete upside for this app is Rural. At this point of time, about 10% of total downloads, that is from INR 44 lakhs, around INR 4.4 lakhs, comes from Rural, and this speed is likely to catch up now with our big efforts on, you know, marketing this app in Rural. I think that has the potential of clearly changing the way that a Rural customer behaves and slowly, even the way the Rural customer repays. Once that happens, the upsides to his credit score, to our cost structures, our credit costs can be, I mean, can be immense as it goes ahead. Talking other than that, our idea of Fintech@Scale envisages development of digital finance delivery as a customer value proposition. I had mentioned earlier, the objective is to touch every part of the customer ecosystem. With superior digital infrastructure, we have now been able to build 100% paperless journeys in Rural Business Finance, in farmer finance, in 2-wheeler, and in Consumer Loans. As far as collections is concerned, while our strength definitely lies in our feet- on- street network, owing to the nature of the business we are in, we are continuously boosting our digital collection capabilities also. In Urban space, our e-mandate registration has now reached 97%, 93% of Urban collections now happen completely digitally. It looks like a small number, a number that I am very proud of is now 14%, 1 4%, of Rural collections are happening digitally. Just about two years back, this number would be low single digit, it is now developing, and I believe personally, that this is going to accelerate as we go ahead. As we move on to business updates, allow me to take you through some climatic conditions that are happening and its impact. As you all know, the progression of monsoon remains very uneven across the country, with certain areas facing rainfall deficit, while others having excessive rainfall and floods. We remain watchful of evolving situation. We have undertaken a detailed assessment of the impact of floods in those districts, as well as the impact of, you know, short rainfall in those districts. The portfolio quality of our Rural loans, both Rural Business Finance and Farm Finance, remains intact. We are actually monitoring almost day to day the collections as compared to last year and last month. As a responsible organization, of course, let me assure you that those collections are absolutely fine. All early warning signals are actually, at this point of time, green. They have not been affected too much this month. We will continue to watch closely. Sometimes the impact comes even next month. We are watching it extremely closely and quite confident that the retail portfolio will remain very healthy and robust during these difficult times in some of those districts. You know, many of you who are not in India, hear a lot of things about lots of floods and lots of rainfall deficient. Let me tell you the on-ground situation. Such issues happen very localized in some districts at all. It is good model to monitor only those localized things, where things can be bad, not go by narratives. We are monitoring those very carefully and are fully in control. Like a responsible organization, our primary step is to initiate relief activities. We are making sure that along with our CSR team, we are making field visits, making connecting to customers, physically through calls, and making sure that any of our customers, if they are facing tremendous difficulties, we are there to help them first through our CSR and only then collect. This is a tried and tested template, which has worked excellently during past natural calamities, and we are confident of keeping our portfolio quality intact through any of such problems. Now, let me deep dive through the key highlights of the quarter. Total disbursements, you know, retail disbursement, as I said, INR 11,193, up 34%, and the retail mix is now 82%. If I take Rural Business Finance, some of the highlights I can put now the business is 14 years plus of vintage, and it has done its highest ever quarterly disbursements now at INR 4,511 crores. Now, the good thing is now with income mapping, we started income mapping around 15 months back, as you all know, and now with this income mapping, we have a very good idea of various categories of customers and can design our products accordingly. Times of, you know, putting all joint loans, liability groups as microfinance are gone. I think thanks to the efforts of the regulator, thanks to the effort of all the companies, credit bureaus, the income records are now quite dependable, and we can design good products around this. More importantly, our, you know, repeat disbursements now are close to 61% of total. 32% of the disbursements are to exclusive LTF customers. Many of these numbers actually show that this business has not remained now as cyclical or even as, you know, what I would say? People used to say that microfinance means literally something happens, somebody sneezes, microfinance will have cold. I believe the nature of the business has now moved beyond that to much more robust, and it is keeping its own strength as a proper, legitimate retail finance business, and we are doing extremely well in that. In farmer finance, we have done our highest ever Q1 disbursements at INR 1,757 crores, and the book now has crossed about INR 13,000 crores. In, you know, both these businesses actually, Rural Business Finance and farmer finance, we have launched one new product each. In Rural Business Finance, we have launched Rural Lab, finally, in Madurai district of Tamil Nadu, and the warehouse receipt finance in farmer finance. We have launched for 14 select commodities across four states. Those numbers are this time very, very small. I will be talking about those numbers more next quarter. In Urban finance, which comprises of 2-wheeler Consumer Loans and home loans. Together, we saw a 21% YoY jump in disbursements and which resulted in a 35% jump in book size. 2-wheelers registered a disbursement of INR 1,726 crores, which is up 14% YoY, and the book size has now crossed INR 9,000 crores, up 23%. More importantly, our prime product within that, which is Sabse Khaas loan and VIP loans, have now crossed 30% of the total disbursements, which was 21% last year. What happens in this prime product is the customer gets a better LTV because they are prime customers, and we get much, much lower bounce rates, much lower as in 1/3 kind of bounce rates, and hence, much lower collection costs and credit costs. Again, everything going well in this business. Consumer loans, the business witnessed disbursements of around INR 1,200 crores. The book stands at the doorstep of INR 6,000 crores. Actually, it is INR 5,995 crores as we go ahead. Retail housing disbursements stood at INR 1,300 crores, which is up 39%, and the book now crossed INR 14,000 crore mark, which is up 27%. SME, which is our newest business, has witnessed a steady uptick. The Q1 disbursement stood at little above INR 600 crores. YoY, of course, it is not comparable because YoY, last quarter, year, same quarter, we had done just INR 68 crores. It's a huge increase. More importantly, we have crossed total disbursement of INR 2,000 crores from inception, and the book is close to INR 1,800 crores now. As we go ahead, here also, we have launched new products like we initially started only with unsecured, business term loans. We have now launched overdrafts and hybrid overdrafts products, which are seeing extremely good traction as we go ahead. On the collection side, we have witnessed best-in-class collections in Q1 FY 2024 across businesses. Led by our concentrated on-field efforts, definitely, but analytics helping tremendously on prioritization of collection using our collection scorecard. We have provided detailed product-wise collection efficiencies in our investor presentation, as well as, for the retail portfolio, we have also shown our stage-wise book in our investor presentation, as we had promised for the last two quarters now. On the Wholesale business, we now draw much closer to our, you know, Lakshya 2026 goal of making LTF a retail finance company. As important as it is to build a Retail franchise and grow the retail book, it was equally important to get down the Wholesale business quickly once we decided clearly in Q3 FY 2023, that now we are not looking for one big buyer to come and pay value for the book. You, you remember that we took sort of one-time write-off, write down to the book of INR 2,700 crores to enable us to sell this book faster. In Q4 last year, we showed a fantastic reduction. We continue with kind of showing excellent reduction year-on-year. The Wholesale book continues to reduce quite fast. It has registered a reduction of about INR 5,500 crores in Q1 itself, and now stands at about INR 14,200 crores. We are now very, very confident of crossing the 90% stabilization mark, not only by end of FY 2024, but sometime before. On the liability management side, I last time guided that, cost of funds may go up by, you know, 20 basis points-30 basis points, over the next two quarters. It's in fact, in the 1st quarter, it has increased just by about 6 basis points. I think it has, the credit belongs to two things. One, the way we have used, low-cost priority sector, borrowings for that, and you will see that CP proportion, this cost has not been reduced by increasing CP proportion. Even though the changing book now allows us to do more CPs, we have kept it at around 8%. But priority sector borrowing now constitutes around 17% of our total borrowing. This is where we are actually using the strengths of the asset side and the businesses we are in to borrow. That's what we have done. I must also say that even the economy is now in our opinion, for a long period of stabilization of interest rates. We are not expecting any big reduction, but we believe that interest rates and hence NIM + F ees should be stabilized around this level now for a fairly long period. That doesn't mean 10 basis points, 15 basis points here and there will not happen quarter-on-quarter, but, in, you know, taking a few steps back, looking from a distance, we are looking at a stabilization level, which will allow us to concentrate now on cost efficiencies, on productivity, reducing costs further, reducing credit costs further, and hence adding to our profitability. The last leg I would like to talk about is ESG. Our journey towards Lakshya of our primary objective, while it was to drive growth, it was also while embracing the principles of environment, social, and governance practices. As far as our commitment to ESG is concerned, I would like to share with you that we continue our work towards minimizing our ecological footprint. This quarter, we released our first integrated annual report for L&T Finance for year FY 2023, which has been assured by an independent third-party assurance provider. I believe many of you would have gone through it. It's on the website already, we are quite happy to be able to bring it out. That's it. I would like to conclude very quickly by saying thank you to all of you for your support, and by reiterating the confidence that the company is well on its line for very accelerated achievements of the Lakshya 2026 goals. While the goals as such in terms of percentages have already been achieved well in advance, we aim to keep that kind of asset quality, keep that kind of profitability, further improve productivity and cost efficiencies, further improve our digital footprint, analytic footprint, as we go ahead and continue this growth journey of 25%-30% over the next two to three years till FY 2026. What gives us confidence to do that is all the strengths, whether it is in our network, whether it is in digital capabilities, but more importantly, in our staff, in our management bandwidth, and also in the customer database and the ability to use, utilize, and work on that customer database that we have built. Thank you very much. We can be open for questions. 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 touch-tone 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, let us wait for a moment while the question queue assembles. We have the first question from the line of Saurabh Kumar from JP Morgan. Please go ahead. Hi, DD. Thanks for your presentation. Hi, hi, Saurabh. How are you? I'm fine, sir. First of all, congratulations. Thank you. Thank you. Thank you as well. Two questions, sir. One is essentially on this net worth of the Wholesale Finance business. It has seen a decline, so could you explain what's happening there? Of the INR 2,700 crore macro that you had made for this Wholesale, did you use any of this during this drawdown? That's the first one. The second is just in terms of the profitability of this retail business. First quarter, you know, is normally weaker for your retail business, in terms of both, in terms of at least credit cost. Would it be fair that this number can improve going ahead, or you would want to see the ROA at around 3% now? These are the two. Thanks. Okay, good. The first one is quite technical. I think, you know, I will, if you have any specific, you know, calculation clarifications, you can contact IR. Let me explain, okay? We have two companies as of now, ICL and L&T Finance. ICL is entire Wholesale company, which is continuously reducing, because Wholesale we are selling. The entire equity of that ICL obviously is allocated to Wholesale, right? In L&T Finance, it is allocated proportionately. As we merge, all your confusions will go away. One item that I didn't talk about in my opening remarks is the merger. The merger is going well on plan, and we are quite hopeful. As I keep saying, in FY 2024, definitely we will do it. We are quite hopeful that we should be able to do it in Q3, by about Q3. After that, sort of all this confusion will go out. Simply, the allocation of net worth will go along according to proportionate to the book of businesses. Right now, because of having these various entities, this confusion arises. That's a general answer to your question. Detailed calculations, IR can help. Okay. Was any part of the macro used? Yeah. You know what happens, actually? It was not a provision, right? It was fair valuation of the book, as we do, asset by asset. There are so many assets. Every asset is fair valued. At the end of the quarter, as assets are sold- Macro. First of all, it is not macro. It is that you are talking about the INR 2,700 crores, right? Yeah, the illiquid discount, yeah. The illiquid discount. Ask me to clarify. Macro is in microfinance, that is different. This is not macro. This was more like, as I, as we had said, we will fair value the assets, which gives the management the confidence that we can sell it quite often. Now, as every asset is sold, there are assets which we have more fair value lower, but they are sold sometimes at par also, okay? And some assets that can may be sold little bit below the fair value also. Both these things happen. At the end of the quarter, it is all put again together, and we see where the value is coming, okay? As I will repeat my answer of last time, that by the time the entire book is complete, we don't expect this total discount that we give to the market when we sell, to go beyond this INR 2,700 crore at all, right? There is a very specific reason that I don't give a specific answer at how much we have used, et cetera. I will tell you that specific reason, that any specific reason like this in public space spoils the habits of buyers and spoils the expectations of buyers of these assets. It is harmful for business to give out any of these numbers. We are not trying to hide anything. Please take my confidence coming from me, that there is no way that the total discount will go anywhere beyond this INR 2,700 crores. I believe that should suffice. Any precise numbers, so if I say, okay, X amount is remaining, right? That's, it goes beyond that, hence, please understand, I'm still running a company, so I have to take care of that also. Understood. That's enough, Saurabh? The second one was, sir, on this OpEx. I'll come to that. You are right. you know, as I said, this 3%, 3.1% is the minimum kind of ROE now that we will look forward to. Most definitely, like any good management or any good company, we will expect, you know, quarter-on-quarter improvements from this year. Each quarter, how will it be? Next quarter, suddenly, if huge deluges happen somewhere, what will happen? I don't want to comment on that. I don't want to give such kind of guidance. A big guidance is, yes, we see profitability only improving from here. Thank you, sir. Thank you. Thank you. The next question is from the line of Mahrukh Adajania from Nuvama. Please go ahead. Hi, Mahrukh. How are you? Good, sir. How are you? Congratulations, sir. Thank you. Thank you. Thank you. Sir, probably, Saurabh already asked this question, but just to dwell on it a little more. If you see the retail profitability, the retail tree, then margins have kind of remained stable, and fees are a little soft sequentially. Is that seasonal or is it because of cross-sell, up-sell? We expect fees to taper off a bit only, and then margins will take shape of, depending on our cost and yield evolve. Okay. Very detailed. Okay. Margins, I've said, again, no, I don't want to give quarter-on-quarter guidance, but I believe margins falling below, you know, further, I mean, 11.5% and down looks unlikely right now. I always guided towards 11%, but we are quite confident of maintaining it around 11.5%. If you say they have fallen, yes, from 11.87%, they have fallen to 11.7%. Many times it is actually the just the function of which product and the product mix, a little bit here and there. Let us say 11.5% upwards is a quite, you know, what would I say? Sustainable levels of NIM + F ees. As far as fees is concerned, we are being quite conservative in recognizing the fees coming from insurance companies at this point of time. I had said last time also, our Corporate Agency License is just about to come. In fact, it was expected on 30th June. It has not come. It should come, hopefully by the end of this month. By which, after that, we actually believe that this fees can marginally go up from this point of time. Okay? They are not really comparable with last year also, because last year, don't forget that we had a mutual fund, and the entire income of mutual fund was in the fees. The fees that you see this time, there are no Wholesale sourcing fees in this, because we are not sourcing any Wholesale at this point, right? Second, the insurance cross-sell fees will probably only increase as we get our CA license. I don't see any issues coming there, and don't see any issues in maintaining NIM + F ees at very healthy levels. As I said, credit costs plus operating costs, slowly but steadily, more efficiencies will surely come up here also. That gives us the confidence that this 3% is quite sustainable. Got it, sir. Got it. Sir, just one more question on the Wholesale tree, that credit cost for the Wholesale business, I'm not asking about the rundown or the balance of the INR 27 billion, but just the credit cost shown in the tree also seem to have risen quarter-on-quarter. Usually, if at all, there is a credit cost, it can be drawn down from the INR 27 billion, right? What would be these credit costs in the Wholesale tree? Okay. The whole credit cost in Wholesale tree, most so first of all, credit costs will not drawn down from that because it is, as I said, it is a, it is a fair value, it is not credit cost, no. It is fair value, meaning it is our idea of what the market will buy the asset from there. Hmm? This book is standard. There is no question of any additional credit cost there. The important part, and you, I will remind you that when we had to take an additional credit cost in Supertech, we took it from P&L. We didn't take it from the INR 2,700 crores. That is only a market discount provision. I will explain this INR 45 crore s in Ind AS, okay? Don't ask me for the logic of this, but in Ind AS, even if it is an NPA, so we have an INR 1,000 crore NPA on our book, yeah. Even if it is NPA, the interest on the NPA, you have to recognize in revenues, and then, you know, that's what Ind AS says. What we do is. Interest unwind. We do unwind the interest and show it as credit costs so that it doesn't come to P&L. Okay? Ind AS says actually that you recognize income, and only when you write off or settle that, the whole thing needs to be booked as a loss. We don't see any point in that. While we are in accordance with Ind AS by booking the income on top, that interest, we also provide it down so that the PAT is not overstated for any quarter. Got it. Got it. Makes complete sense, sir. Yeah, it is just technique. Got it, sir. Sir, just in terms of the industry outlook, you know, on personal loans, so much is being said, the RBI's financial stability report says nothing, right? Gives no warning signals as such. In general, there is praise that RBI is worried about quality on personal loans. Any comments you have on this, just in terms of if you are seeing any on the ground, early warning signals or any such thing? Okay. I think it's a good question. Number one, you know, even RBI has talked in at places that it is little bit worried about the high growth rates in unsecured personal loans, okay? I believe the industry is watching it very closely. There is no doubt that the growth rates have been high. We have to look a little bit beyond that, a little bit beyond that and look at, first of all, where are the stresses showing, in which category? I will come to that also later. First, let me talk about the growth. There is one big change also happening, both not only in Rural, but also Urban. What is the change? Is because of digital and data analytics, more and more new-to-credit customers are getting access to organized credit from the industry, whether it is banks, whether it is the upper layer NBFCs, whether it is smaller NBFCs or whether it is Fintech. Organized credit, people are finding access to, and hence there is a shift from unorganized credit to organized credit. There's a shift. I won't be able to tell you how much, when will it get over, how fast is the shift? Simple answer is, I don't know. Unorganized credit is not measured, so I don't know. Our on the ground findings also, and also the number of, you know, new to credit customers that come asking for credit, we see a big move from unorganized credit to organized credit. Hence, it is not necessary that everybody should be scared at the increase in growth rate of organized credit. It is sometimes even it can be good for the industry. The industry will have to be watchful, no doubt, but sometimes it is good for the industry also. Last time also, I had said that the entry of Jio or the, you know, entry of Bajaj in micro loans is actually going to help the industry, because more and more unorganized credit going to organized credit is good for all the responsible lenders. This is a general answer. Very specific. You asked a very specific question: are you seeing any fault lines developing? Yes, the fault lines are developing. When you are in unsecured credit, two places where we see some fault line developing is first time borrower of unsecured credit, slight issues, and second, less than INR 50,000 category of unsecured credit, there are increasing credit costs happening, which is something that we are seeing. Thankfully, perhaps because we were new, our unsecured Consumer Loans are every, each and every loan is more than 1 lakh, and each and every loan is to old to credit customers. We don't do new to credit customers at all. At this point of time, I see or we see, our observation is showing some fault line developing in that below INR 50,000 credit. Not that these ratios have gone out of control, but those credit cost, credit ratios are slightly deteriorating. These are what are colloquially and popularly known as BNPL. Buy now, pay later loans is where fault lines have started developing. Whether they will be permanent, sustainable, I don't want to comment, because largely I'm not in that business, so I don't think I should comment more on that. Since you asked the question, that's the first sort of observations that we are having in terms. Okay, sir, that's so very helpful. Thank you. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Avinash Singh from Emkay Global. Please go ahead. Yeah. Good afternoon. A couple of questions. First one, sir. Yeah. First one, if you can just sort of, again, you have explained it, but once again, I'm going, because you will, you know, large part of your retail business is kind of one can say that technicality is there. I mean, whether it's a 2-wheeler, farmer or, you know, the micro loans. Currently, you are hovering around, you know, somewhere closer to 3% or slightly lower than that in a credit cost term in that retail. Now, over the cycle, what kind of a range? I mean, if the current cycle continues or like, you know, that the robust credit quality continues, I mean, how low typically you would expect? What's your range of credit cost expected over, you know, a few years to three years kind of a time horizon? Related to that also, your retail, I mean, if you geographic concentrator, you are primarily at east and south focused. Are you sort of looking to geographically diversify more toward the west and north? Like you have, I mean, you will continue to be focused on, I mean, these kind of a six states, three each in the east and south. That, all in, on retail. Then Wholesale, if you can just help, the kind of the loan you have sold down in the quarter. I mean, if at all, some color on the stage why they were. Thank you. Sorry, I didn't get the last sentence. Can you repeat the last sentence? Color on what? Color on the kind of Wholesale loans which you sold during the quarter. I mean, what sort of standard loans, whatever kind of, you know, the Stage 2 or 3. Okay. Sure. Most of them are Stage 1. There is no Stage 3 at all. One Stage 3 was sold to ARC, which was part of Supertech. Supertech, we had INR 1,500 crore, out of which INR 500 crore is sold to ARC, but everything else is standard. We have only one NPA, actually, which is INR 1,500 crore, Supertech, one large NPA, there are some one or two small ones. Out of this 1,500, INR 500 crore is sold to ARC. The Supertech loan is provided 57% already. And as I always said, we expect the rest of the money to come back. Okay? That's answering your last question first. I will now take your first question. I always guide towards, you know, I stop short of guiding towards a across cycle credit cost as such, because experience has showed me that credit cost and operating costs, especially collection costs, are very fungible in retail business. You know, frankly, sir, by throwing money, I can reduce NPAs in one month drastically. That's not the sustainable way of doing it. Always balancing these two in a way that it is sustainable is very important. The way we try and control it actually, is try and control asset quality at zero DPD level. There is one data that, you know, we give our current collection efficiencies in our investor presentation. There is one data that we closely monitor internally, is zero DPDs across products. At each product level, each state, each branch, zero DPD is monitored very closely. We as a company believe that if it slips beyond zero DPD, after that, it is either collection cost or credit cost. One of the two is going to come, and for us, both is same, right? That is why it is very, very important to stop at zero DPD. Very clearly across products, if you see, we are having the best in class zero DPD. We are in fact, this time we have given it for our flagship products. We have given it in the investor presentations also. This is something that we concentrate it a lot. After considering everything, I believe that a 7% level of credit cost plus operating cost is what is sustainable across cycles, across regionalities. Obviously, it will be our endeavor to be below this in good times and not to be too much about this at, in bad times, you know, because good and bad times do come. When you concentrate on arresting something at zero DPD, that is the time that these things become, you know, sustainable. That would be my answer to your first question. As far as expansion is concerned, I don't again want to get into north, south, west, et cetera. We very clearly believe in deciding where to do business based on very deep data analytics. Let us say the business, which is most widely wide on the ground in terms of 1,600-1,700 what you call meeting centers across the country. What we do is at a district level, sometimes even at a taluka level, we do detailed analysis by various departments of the credit quality, of the banking habits, post office habits, literacy levels of that area, and then get into that area. This kind of exercise is on continuously throughout the year, and that is where we open new centers as we go ahead. We don't really look at some huge that "let us capture north now" something like that. It doesn't make sense. We have gone beyond thinking of India as just one monolithic geography or even a particular state as one monolithic geography. A state as a geography comes into picture only as far as politics is concerned and any political decisions are concerned. Otherwise, geo, you know, environment, geology, crops, occupations are so different every 100 Km that we try and monitor where to do business, how to do business according to that. That is as far as physical infrastructure is concerned. The new magic is digital infrastructure and the digital reach. As we put more and more products on D2C, you know, it will add as a further advantage to the network that we have. Okay. One area where you will see us, you know, to answer your question, definitely making the entry, a slow entry nonetheless, over the next two quarters, maybe Andhra Pradesh and Telangana for our Rural Business Finance. After 2008, after 2010, we have been out of these states, but the recent ruling of the Honorable Telangana High Court Honorable Telangana High Court, now, doesn't allow any other body to legislate on RBI-regulated entities, which gives us the confidence to reenter into these two states. We are doing very detailed, you know, on-ground surveys of both Andhra Pradesh and Telangana. You will see us making a cautious entry into these two states over the next two to three quarters. Does that answer your question? Yeah, it does. Thank you. Thank you. All the best. Thank you. The next question is from the line of Viral Shah from IIFL Securities. Please go ahead. Hi, Viral. Hi, sir. Thank you for taking my question. Congratulations on good set of numbers. Thank you. I have two questions. One is on the cross-sell piece. You have mentioned on your PPT that 34% was a cross-sell and disbursement. Does that mean that 34% of INR 11,200 crores of retail disbursements were to existing customers? Yes. Yes. Okay. Also, can you share, what's the cross-sell franchise? Because you have mentioned that, the average disbursement, to them was INR 79,000 this quarter. I didn't get your question. INR 79,000 for every cross-sell to every cross-sell customers, the average ticket size was INR 79,000. Correct. What's the quantum of that customer? Basically, you have a lifetime customer franchise of 21 million. 41% is. Okay, I will correct myself, okay? Is this right? 34% is number of customers? No. Correct, it is value. 34% is value. Okay. You want number of customers? I will give it to you in five minutes. Sure. 41%. Okay, 41% number of customers, 34% value. 41% of your 21 million customers are you have identified as cross-sell customers. Correct. All new, more important. No, no, not like that. We did how much new customers? 6.9 customers we did new disbursement. That was 59% of total customers that we did. You get what I'm saying? Okay, got it. You just divide 6.9 to 0.59, and you will get total number of customers. Accurate 2 minute. Got it. Hmm, okay. Very helpful, sir. The second question I had was on the provision. Actually, no, in the presentation, we have actually given product-wise also. In the presentation, we have given product-wise slides, repeat customer shares. In Rural Group Finance, repeat customer share is given very clearly. In farm equipment, also repeat, Kisan Suvidha is repeat customers. Okay. Second question? Sir, the second question was on the provisioning piece. So- While you have given the provisioning on the retail assets. Sure. Can you give us the sense of the stock of the total provisions on the consolidated book? This is not just the Stage 3 provisions, but all your Stage 1, 2 provisions put together. See, you know, I mean, last time also I have said that I don't give... If you are asking Stage 1, Stage 2 kind of data, last time I had said very clearly that since the Wholesale book is in a sort of quick rundown basis, quarter-on-quarter, it won't give any trends. I'm not asking for the breakup of it, sir. I will just ask Sachinn to answer this question, because there is a lot of confusion on this. There is no provision on the Wholesale book. It is fair value. In case of Wholesale, we already mentioned, in fact, earlier on the call, that about INR 2,700 crores fair value of the assets was done in third quarter, the asset book was stated at a amount which was lower by about INR 2,700 crores. As the asset book is being sold, either it is being sold at the value prevailing in the books or, you know, some assets on the high, at higher level, some assets at lower level. At the end of each quarter, the fair valuation exercise is undertaken by the valuer once again, what you see as the closing book is the fair value book as of thirtieth of June. In terms of the overall provisions, the only asset, the GS3 asset was Supertech, which was provided for about 57%. It is given, clearly. The Stage 3, gross Stage 3 is INR 1,065 in Wholesale, and net Stage 3 is INR 469. Correct. The difference between that is provisions- Right. in Wholesale. The rest of the standard book is fair value. Fair value. There is no question of provision. This INR 14,000 crores of Wholesale book, which is there, that is the fair value of it? Absolutely. Yes. Out of 14,200, INR 1,065 is GS3, okay? Which provision is given in the presentation. The rest of it is standard book, fair value. Got it. Yeah. Okay, answer to your previous question. We did INR 6.91 lakhs of new customers, INR 4.71 lakhs of repeat customers, making it INR 11.62. Okay. Got it. Total number of customers. Thank you so much, sir. Yeah. Thank you. The next question is from the line of Digant Haria from GreenEdge Wealth. Please go ahead. Yeah, hi. Hello, hello, sir. One question is that, you know, in the last one and a half year, we have started the cross-selling journey in L&T Finance. Mm-hmm. Most of the successful companies who have done cross-selling, say Bajaj Finance or, you know, ICICI Bank, where Sudipta comes from, they have reported, you know, declining operating costs and declining credit costs as well, you know, as the cross-sell franchise improves. For us, like, you know, when do we reach that stage where, you know, this OpEx plus credit cost does not remain at 7%? Because, you know, that 7% number, it still optically looks very high for, you know, any franchise which can actually cross-sell a lot. That is my question. Okay. By when, I would not like to say. I agree with you. We have to, first of all, reach 7% and then go below that. Both the companies that you talked about, okay, ICICI is a bank, so I don't want to comment on that. We are a Rural company, and don't forget that the costs of reaching in Rural are also higher. I would just like to differentiate that that way, and yields are also higher to that extent as we go ahead. Very clearly, in a way, you are right. We have reached now close to 7%. We will reach 7% before, and after that, obviously, we will start reducing from there. I didn't think it was, you know, very responsible of me to give a guidance of lower than 7% before reaching it. Let us reach 7%, which will be a good achievement. After that, we will certainly go ahead. You cannot forget that we are in the stage where last two and a half years, and continuing now, we are making heavy IT investments. Those are also a part of this 7%. There is nothing like we don't build good, big, you know, fixed assets, right? These IT investments are all expenses, current expense. Those are also a part of these expenses. As we go ahead, those IT investments will start even contributing to productivity, and we are very sure that on quarter-on-quarter basis, we will show a good reduction on this ratio, which is currently at 7.2%. Let's come to 7% first, and then we will set up a new target as we go ahead. Thanks for this. Just let me ask one more follow-up on this. Sure, yeah. On the cross-sell franchise that we already have, like, you know, we've just started and we already have some part of the loan book, which is made purely out of cross-sell. The ROA numbers there, like, you know, what could they be? Like, you know, are they better than the overall retail ROAs that we see, or they will still need some scale before that can really happen? They will definitely be better. I won't be able to give those numbers. I mean, I'm not able to. Right now, we are not telling those kind of numbers, but way better. Very simply, you know, acquisition cost is less, clearly. Collection cost is less, and credit cost is way less. I'll just give you some, you know, one number, which is my favorite number, and which you can draw your conclusions from, okay? In 2-wheelers, the, you know, the cross-sold part or the part which customers which are prime enough to do cross-selling, the bounce rates are 1/3 of a normal 2-wheeler bounce rates, 1/3. If the bounce is less, obviously the collection cost is way less, and, hence, the credit cost is also way less. It can be extremely profitable as we go ahead. Some numbers are already showing up in terms of credit cost and operating cost. More will show up as we go ahead. Okay. Okay. Thank you. Thank you so much. Maybe I'll ask this question again a quarter or two later as well. Thank you. Thank you so much. Yes, yes. Quarter-on-quarter, absolutely, I hope it goes like that. Two quarters, certainly it will go. Right. Thank you, and all the best, and, you know, welcome to Sudipta also. Thank you. Yeah, thank you. Thank you. Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead. Hi, Kunal. Yeah. Hi, sir. How are you? I'm good. How are you? Yeah, good, sir. questions first on Wholesale profitability. when we look at it, maybe INR 7 crores on a pre-provision level. Sorry to interrupt. Okay. Mr. Shah, I would request you to kindly use your handset. Your audio is not clear. Yeah. That is very, very breaking. Which profitability? You able to hear me now? Yes. Yeah, yeah, much better. Much better. Yeah. I was just saying on the Wholesale profitability, okay, so when we look at it almost like, say, INR 7 odd crores on the pre-provisioning level. You said, like, there is no revaluation, but what is actually leading to the NIM getting down from INR 200 odd crores to INR 75 crores, even after recognizing the interest income out there? Would there be like maybe on the sell downs, there would have been some further knock which would have been taken? How should we look at it on a steady state? No doubt, the book is declining, but INR 7 odd crores at a pre-provisioning level seems to be quite low, yeah. Okay. I mean, one simple thing is on, you know, there are SRs that we are holding, or credit cost, interest cost. That is one simple thing, I will ask Sachinn to give a detailed answer on this. Hi, Kunal. Kunal, what's happening is actually, as the book is being sold down, depending on when the actual asset is exiting my balance sheet, the income accordingly is getting booked, right? Q4, you would have seen that huge amount of sell down has happened, and a lot of it has happened at the back end of the quarter. Which means that income got booked for that quarter, whereas the income for those assets was not there in the first quarter. That's why you see a significant difference in the top line. Apart from that, of course, there is, you know, assets which are there, which are not on my balance sheet, but with ARCs, and there is an, you know, cost attached to it, which continues. I think Q1, the differential that you're talking about takes care of, you know, these two are the key reasons for that. Steady state should be how much then on this outstanding book, which is there, or maybe even if we run down by another INR 4, INR 5 or INR 1,000 crores? No point, no point talking about steady state, because as we speak, assets are being sold down. In next couple of quarters, that's the reason. Yeah. you know, we ask everyone to just focus on retail P&L. Wholesale is just a transitionary P&L. Next two, three quarters, this will be absolutely irrelevant. I mean, if you take all this put together, PAT is INR 531 crores. I can make a statement that we don't see it going down from here. Sure. Okay. Secondly, in terms of the Consumer Loans and SME, maybe, quarter on quarter, the traction was building up. Should we see like Q1 was more of a seasonality or maybe, slightly conservative stance out there? Same with the Consumer Loans, okay? Maybe I think, traction seems to be, even there in terms of the disbursements, it's in a narrow range, and these are like the newly launched products. How should we read this? I think both is a little bit right. I wouldn't. Seasonality comes in terms of April. SME, that is true, because it's still largely a DSL-led business. April, that is why you see a Q1 like this in SME. Both these products, I mean, that, leave it, just April. One month in a year that happens, you will see that catching up in Q2. I would also say that both these businesses are new, and hence, the moment we see something, some processes, a need for change, not necessarily in terms of customer profile or not necessarily in terms of portfolio or something, but even in terms of, let us say, our own processes. If we see a need for improvement, if you see a need for reengineering to remain good in the market, we actually, even today, are sort of, you know, holding back for 10, 15 days, launching the new process, going ahead. It is that period. I wouldn't call it a pilot, but for both these products, it is still a period of innovation, growth, and that is why we are calling these growth products. We are not steady-state products at all. As long as we remain in that ballpark, we don't get too affected. If I were to answer your question more strategically, I don't see anything which is sustainably wrong. It is just some corrections in the processes, et cetera, that we did it, both the products. We will see this, those run rates coming back very soon. Sure. Actually, in terms of the network, sorry to get back into that, but finally, eventually, post rundown of the Wholesale, this entire book will get into the retail, and retail network will go up. Maybe this quarter also, almost there was INR 500 crores addition from the Wholesale, which has happened. Eventually, we could see that, okay, almost like INR 20,000 crores of maybe the retail network being there. Correct. Okay. Correct. Maybe last time also you highlighted, but then in terms of either the dividend or the utilization of this excess net worth, okay, what we would eventually look at, given where we are in terms of the overall loan book at, say, INR 65,000 growing at this pace, yeah? Correct. You know, you are absolutely right. Now, what are things that we will definitely not do, okay? We will definitely not grow irresponsibly just to absorb the network. We will not do that. I think at 25%-30%, maybe 35% in a particular year, are good growth rates that we can achieve and sustain, we will stay at that. We will not do acquisition just because we have money. If we see some acquisition happening at good prices, why not? At the current multiples you are giving in the market, people's expectations are crazy. You know, even companies which are doing pretty badly, also their expectations are crazy. Those two things are what we will not do. We will make sure that the growth remains sustainable, number one, and everything else possible to, you know, manage the network in the meanwhile, we will do. This year you saw that, even despite having issues about, you know, holding company, et cetera, we have given a INR 500 crore dividend. Yeah, nothing can stop us next year once the merger is done, till we find a use for the increased network, even having the maximum permissible dividend payout ratio of 50%. That's, that would be the plan. Is it ideal? No, it is not ideal, but that's the truth, that Wholesale will come down. Retail growth, even at 30%-35%, is a great growth. We will have to manage network also simultaneously, which we will keep doing by giving out good dividends. Sure. Thanks. Thanks, this is helpful. Yeah, all the best. Yeah. Thank you. Thank you. Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead. Abhijit, how are you? Hi, sir, how are you doing? It's good to see that you made that statement, when you said why you are superannuating. You've seen the organization in a good plane, which is why you've now decided to pursue your hobbies and passions. Congratulations to you on that. I'm sure it's a very, very fulfilling and satisfying career. Thank you so much. Thank you very much. Sure. just one thing on the last question that you were addressing on the dividend, when you said that till the time we find some suitable opportunity to deploy the capital, maybe we'll go ahead with the maximum permissible dividend payout ratio, 50%. Fair to assume that, I mean, in the last two quarters, we were talking about some special dividend, where we were trying to work with the regulator. At least that has now been rolled out. That has been rolled out, that INR 2 which we gave, meaning, it will be given on 28th of July after the AGM. Yes, sir. Yes. Yeah, that is done. Got it. The other two questions that I had is, now, obviously, you had discussions on cross-selling already. Thank you for throwing light on that. The other two things that I wanted to understand is the fact that we've been aggressively selling down Wholesale. I think, I mean, one of the things that I kind of wanted to infer from this is the fact that we've been able to do it so fast and so aggressively is because, I mean, except for Wholesale real estate, we didn't really have any meaningful stress on the balance sheet. Which is where I kind of wanted to understand, that out of, this other, let's say, rundown that you've seen, if I look at last one year from almost INR 40,000 crores of Wholesale down to about INR 14,000 crores now, how much in totality has been sold to ARCs other than that INR 500 crores that you talked about Supertech? Our total SR book is about five and a half thousand rupees. No. Total? No, no, carrying value. Carrying value. Five and a half is what I remember. Six and a half. Total SR book is six and a half thousand crores. Total, right from inception. Got it. Got it. This is where I would say we are expecting the recoveries to come through over the course of the next- I will tell you, the SR book is mark to market every quarter, based on independent rating agencies. Many of the SRs keep getting extinguished as recoveries happen. I would say that whatever goes every quarter from, you know, mark to market, as those ARCs mark to market, those SRs, it goes every quarter. Otherwise, what remains should be recovered. We monitor it very, very closely. We don't look at it like, "If sold", even though the ARCs are fully in control of the recoveries, and it is a true sale. My legal team monitors it very closely. I'm happy to say that a lot of recoveries have happened. In fact, you know, you will be surprised that the SRs of real estate, the recoveries are faster than infra, because naturally, because, you know, even if, it was a 90 + asset, real estate, assets are actually there to monetize very quickly, right? So if a new developer comes and takes over the asset or the asset gets completed, the real estate SRs are actually, some things which get extinguished much faster than the infra assets. Got it, sir. Is there a timeline or a duration till which these SRs have to be there on the book? Let's say, just giving an example here, by the end of this year, let's say, if you are able to bring down the Wholesale book to 5% of the loan mix- Mm-hmm. Even then, these SRs will continue to sit of the INR 6,500 crores that you talked about, will continue to sit as SR? I would INR 6,500 remain because it keeps getting reduced. Technically, the SR can remain for about 8 years, technically. I would think, I mean, this INR 6,500 crores is what I have told you is the net number. The way the repayments are being planned and are happening, we see a big reduction happening in 2024 itself, about couple of thousand crores coming down in 2024 itself. That is the kind of speed of reduction of SRs that we have shown in the past, and we will continue to show. Got it. INR 6,500 crores coming down to INR 4,500 crores or so by the end of this year itself, is what we confidently expect, without any big upsides. Got it. Thank you. Sir, one last question. Out of this total disbursements that you are doing, what proportion of those disbursements are happening in partnerships with your digital fintechs or consumer tech? It is Consumer Loans, 40%, INR 465 crores, total. Sir, only Consumer Loans is where we have fintech partnerships, is what I wanted to understand? Yes, yes, yes. Just one last question in the interest of time. Given that you do a lot of industry benchmarking, I'm glad from this quarter onwards, for your top three products, you've started sharing the zero DPD numbers vis-a-vis the industry. I just wanted your view on how you look at your MFI business, given that we have a whole host of listed NBFC MFIs today. When you kind of benchmark your MFI business with some of the, maybe the leaders in the space or someone who's just doing microfinance as a product, how do you look at your MFI business? And do you think there are things that we could basically improve from here on in our MFI business when you look at some of the pure MFI trends? Okay, I will stop short of benchmarking within MFIs at all, okay. I believe that microfinance as such now is a business which has, I mean, which has growth potential, but always be limited, because microfinance is what? Where your income level, family income level is below INR 3 lakhs, right? That is typically microfinance. We tend to the industry, analyst, everybody tends to wrap everything under that bundle. It is less than INR 3 lakhs. We take now efforts to show how much we have done less than INR 3 lakhs, how much more than INR 3 lakhs. We are now actually looking, going beyond that also and trying to change the complexion of that business. You know what? I believe what you mean by MFI is joint liability group business. Within joint liability group, there will be two categories. One is microfinance, one is non-microfinance, which is less than INR 3 lakhs, more than INR 3 lakhs. A large proportion of our business, which is what? 90% of our business in joint liability group happens for more than INR 3 lakhs. It is not microfinance. 90%, 90, okay? Our further attempts are now to see whether beyond a particular income level, are there very different segments even within that? Let us say INR 10 lakhs, just a number. I'm just throwing a number. 10, about INR 10 lakhs income, there is a segment which exists, which can do business in a completely different way, like a Rural consumer loan, where maybe, you know, there will not be monthly meetings, people will, there will be mandates and people will repay through bank mandates. Maybe that segment exists, and we have to start looking at that. A segment definitely exists where there are fixed assets in Rural, like their own homes, and we can work on that and, you know, help people leverage those fixed assets, which is not microfinance. According to me, the future of a good Rural lender lies in looking beyond these given models, okay, here microfinance, to see that try and look at those people as beyond after removing this veil of what we have termed as microfinance customers, right? We have found out from our research that it is no longer true. By definition, by nature, by behavior, there are very different segments that exist. We believe, we have found out, actually discovered, that we largely are playing in the near prime, and super prime segments, actually, in Rural India, not in the typical Microfinance business. We are there to about, just about 10% of our disbursements. I believe good trends and good growth in the Rural lending will happen there. That is where then the question of benchmarking, et cetera, will come from there as I go ahead. Okay, great color. This has been very, very useful. Thank you so much, and wish you and Mr. Sudipta Roy the very best for the quarter. Thank you so much. Thank you so much. Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Dinanath Dubhashi, for closing comments. Over to you, sir. Thank you. I would once again thank all of you for your unstinting support, your confidence. I remember that when we came with the second plan, the Lakshya 2026, to all of you, we were coming after a very difficult period that the company, as well as the stock, had gone through. Still many of you supported us, many of you put confidence in our plans. I am happy today and proud to stand in front of you, having delivered those numbers of those plans, but more importantly, having put in place an engine that will make sure that this kind of growth, this kind of profitability will continue in the future, not only during FY 2024, but well in future after that as well. The strategy, Lakshya 2026, remains steadfast. The leadership and support of our chairman, Mr. S.N. Subrahmanyan, remains steadfast, and more importantly, the devotion and the zeal of the management team and all our field teams to deliver these goals remains steadfast. Thank you very much. God bless you, and let your support come. Thank you. Thank you very much, sir. Ladies and gentlemen, on behalf of L&T Finance Holdings Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.