Ladies and gentlemen, good day, and welcome to the Poonawalla Fincorp Limited Q2 FY 2024-25 earnings conference call. We have with us today on the call Mr. Arvind Kapil, Managing Director and Chief Executive Officer, Mr. Sunil Samdani, Executive Director, and other senior management officials. As a reminder, all participants lines will be in the listen-only mode, and there'll 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 and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Arvind Kapil, Managing Director and Chief Executive Officer of Poonawalla Fincorp Limited. Thank you, and over to you. Thank you. A very good evening to all of you, and welcome to our Q2 earnings call. Wish all of you and your loved ones a happy and prosperous festival season ahead. I've now spent around four and a half months as an MD and CEO of Poonawalla Fincorp, and I've got a chance to fully detail out the operating strategy of the organization. I will therefore begin by updating you on the details and progress made since the last call. To reiterate, our vision is to create a sustainable and predictable retail lending business that scales to five to six times over the next five years. So I've mentioned five to six years and coming back to five years and four and a half months down the line, I'm quite clear that we can probably. My confidence on this looks far more clearer. This is on the back of creating a stronger customer finance brand and respectable customer service, the two very fundamental to begin. I continue to be extremely bullish on the Indian retail macro. There's a significant value creation opportunity by, let's say, serving around 400 million creditworthy customers in India, of which around 50% are still underserved. Delivering on this vision will require significant investments in the quality of our people. That's most important. New businesses, yes, new distribution points, and strengthening our capabilities across collections, as I mentioned last time to you. Advanced analytics, extremely important, is going to be cutting edge in almost every department that we run, and customer engagement. Let me provide you a brief update across all these dimensions. I thought it would be more prudent for us to be more detailed this time, so that all of you get a first-hand glimpse of what the plans are. All of this has been thought through, planned, and we will systematically execute. Let me start with our people. Happy to report back to you that we've made offers, which have made almost 95% of the envisioned leadership hires. All the senior management have already joined us. So in four and a half months, you've got the top management, and almost the second layer beyond that has also joined. Barring one CTO that we're expecting in the first week of December, which is also a fantastic resource, almost everybody else is on board as I talk to you and is already full scale in the working progress. This team, in my limited view, should be among the top teams by any standard when you compare with the industry. If I were to give you a quick glimpse on this, if you take the Chief Credit and Analytics Head, Shriram, ex-HDFC Bank, you've got the Chief Business Officers, Vikas Pandey and Raghavan, ex-HDFC Bank, top-notch resources, who I introduced in our last call. We have a couple of new seasoned leaders across data science, collections, risk, audit, both internal and compliance. They've already joined us from pedigreed institutions. To give you guys a sense, Bhaskar Pandey joins us as CRO, Chief Risk Officer, ex-HDFC Bank, 23 years plus. You've got Bholananda Behera, Chief Compliance Officer, who joins us with 27 years experience. You've got Nitin Sane, he's joined us. He's ex-Citi and then ex-HDFC Bank. He's joined us from the legendary Rabobank Group, Netherlands, with over 20+ years experience. You've got Jaswinder Saini, who's joined as risk analytics, one of the finest resources. Anil Hoskote joins us as lead collections, with 30 years of experience in Yes Bank. Let's quickly take you through our plans for the new businesses. As we scale up our customer franchise, we want to go deeper in our focused micro markets rather than just go broad across India. This will enable us to get operating synergies, I believe, understand and manage risk better, and ensure our brand promise is delivered in the communities we serve. While we've always had a forte in self-employed segment as well as tier two geographies, we've had a limited product portfolio to serve the segment. I strongly believe there's a need to expand our offering in order to get multiplier benefits from our catchment areas. For example, improve productivities of our branch and people network, improve our cross-sell ratios, and remember one thing, this management team is very well versed with the cross-sell strengths that's going to start getting added to our existing portfolio plus the new ones... to further lower our customer acquisition costs and manage yields per customer, hedge our portfolio from diversification, and substantially increase the granularity to the entire business. As a result, from a product portfolio that I announced last time, existing that you have 4 key products, that's your small ticket size PL, STPL, you've got LAP, you've got business loans, you've got pre-owned car. We want to broaden our offering to 10 products. So what I'm really saying is that we want to build six additional offerings, and I'm talking about a whole lot of work is already underway on this. The budgets have been done, the people are getting hired, but I'm putting a launch by quarter one of FY26, just to be a little more precise in terms of our delivery on precise numbers from thereafter. So I shared with you Prime PL, which is already, by the way, taken off much before we had thought of, and it's scoring pretty decent numbers already. You've got consumer durables, the process is underway to start. You've got shopkeeper loans. You've got used commercial vehicles. The people have joined in, the business heads have joined in. You've got two new businesses that I'm adding now after adequate thinking through and increasing the granularity and the strength of the offering, is gonna be gold loans and education loans, and both of them as well will be launched around quarter one of financial year twenty-six. Let me quickly take some time to briefly talk about the rationale for each of these businesses and how they'll complement our existing product portfolio and enhance our competitiveness vis-à-vis, I believe, our peers. We should be growing at a much faster rate and far more granular. Quick sense in consumer durable, like I discussed last time, is gonna be a key pillar for growing our customer franchise. India's consumer durable sales in a year is close to around eight odd lakh gross, and only 30% is financed today. That itself shows to you what an opportunity it can be for the company. As a result, consumer durable financing is seeing a 25% plus growth year on year. The tier two and tier three locations have been growing fastest, 35% plus year on year, and not surprisingly, still, presently, immense penetration potential. Our strategy will be anchored along with these geographies with a focus on younger, early salary customers. Our underwriter will be backed by robust credit decisioning and fraud models, given the experience of our data science and product team. Quick sense on shopkeeper loans. India has 13 million kirana stores today, with 3 million mass retailers and family stores, where the turnover can be anywhere between 10 lakhs to 5 crores. Formal financing penetration is less than 20%. It's a fantastic opportunity for us. Playing in this segment requires strong digital assisted models and sharp credit policies, and we have the bench strength and past experience. We will work with, work on both digital and physical. We've captioned this model earlier in my previous organization, and I do see significant opportunity to build a sustainable shopkeeper finance book. Let me speak about gold loans. As we know that gold is one of the largest and safest form of collateral today to lend to the rural and informal sectors in the Tier 2, Tier 3 geographies, having gold loans in our portfolio becomes extremely complementary to our catchment areas. While gold is approximately seven lakh crore plus market, we intend to play in the mid, lower ticket size segment in the Tier 2, Tier 3 geographies, so 40%-50% of the market. Gold loan branches do require specific infrastructure. However, they're quicker to break even, especially if paired with other complementary cross-sell business that we've built strength on. And remember one thing, this team, I'll repeat, is well seasoned on that area. I'll cover this in our distribution strategy. Personal loan prime, yes. Personal loan may seem a crowded space, 13 lakh crore market growing at approximately 26% year on year. However, my 20 years of experience of leading this business tells me that there's significant pockets of prime customers that are underserved in deeper geography, over three lakhs areas, and that presents a great opportunity for us. We are already scaling this up from insignificant levels to decent quantums month on month and growing at a rapid scale. I'm very optimistic on the yields and the business prospects of this. Our play in this segment will be driven by open market, physical sourcing, and a strong digital-assisted journey with robust funnels to scale. Used commercial vehicles, another very interesting business. There are close to 11 million commercial vehicles in India, and they typically change two to three owners in a life cycle. 40% of the stock is in the prime 5-10 year vintage, where funding penetration is less than 40%. The current used commercial vehicle finance market is around INR 1.9 lakh crores today, and has grown at a steady rate of approximately 13%. These locations in the semi-urban India align well with our current physical distribution strategy. Our sales strengths and self-employed underwriting will help us serve the small fleet operators and first-time buyer segments. Education loan. Yes, I'm going to be focusing on that as well. It could make us a good household name. It's a fast-growing segment, 70% year-on-year increase AUM on almost close to one lakh crore a year. While most of the portfolio has been targeted at international students, there's a clear shift in the trends in increased demand in the segment beyond on various segments of the institutions. Education loan, like I said, will enable us to amplify our household brand efforts and building across our retail segment. I'm confident that adopting these complementary businesses and leveraging the right data and analytics can help us build a diversified portfolio with predictable and sustainable cash flows and calibrated risk levels. The whole plan is that where your whole business is broadly going to ten businesses and building it over four to six quarters, can substantially add a very positive upside in the next one and a half years on the building blocks. On the new distribution points, a few comments. It's my firm belief that the segment we cater to requires us to have meaningful presence on the ground, both from a sourcing and collections perspective. As a result, we'll brutally expand our footprint. Yes, we presently stand at approximately 101 branches, and we are getting ready to expand our footprint by 400 branches over the next year in T2 and T3 locations, consistently with our strengths. So what I'm saying is, I will be launching 400 branches addition in the coming financial year. So the whole work has already begun. There's a whole lot of work happening on that. From the first quarter itself of the coming financial year, you'll see us moving on that. These will be gold loan branches, but there will be heavy cross-sell focus into our core businesses of business loans, LAP, shopkeeper loans. It will be a fair flavor of digital as well. And as a result, we expect our breakeven for these branches to be 12-15 months ballpark. Our new capabilities, if I were to summarize quickly, there are three areas we are doubling down on. From a capability standpoint, that will serve as the foundation for the franchise. I've mentioned last time to you, strengthening collections, number one. We significantly strengthened our collection organization, bringing seasoned professional, Anil Hoskote, Head of Collections, joining us from Yes Bank, over twenty years, nine years of experience in the industry. We see our collection strategy across three clear dimensions. I'm laying it out for you so that it's much easier for you to assess, because with every passing month, we are moving, we're almost probably leapfrogging in the way we're getting controls. The use of advanced analytics, the three dimensions I'm laying out. We've already built advanced portfolio segmentation, risk categorization scorecards for most of our portfolio. We are augmenting them with both internal and external data across the life cycle of customers, pre-delinquency to delinquency to recovery. That's what they've done on the ground over the last 60 days. We're putting in place algorithms to help us decide on the right strategy for the customers. We will be fully live by December. Scientific customer and resource allocation is being done and customer engagement. We have significantly augmented our agency capacity. I think that itself can add immense value over the next 60-90 days, and we are bringing in seasoned debt management professionals to manage the markets. 80% of the required capacity will be in place, let me give you precise timeline, will be by January, the coming January 2025, and 100% by March 2025. You can well see that work is happening on a war footing on multiple dimensions, investments and adoption of digital technology in collections. Whether it'll be rolled out an intuitive and agent-friendly collections app, multiple scan, UPI features for EMI repayments, multilingual bots in probably 10 languages. We are already live, by the way, over the last 60 days, and digital communication enablement to build timely payment habits. We are building out modern, sophisticated collection tech capabilities. That's our priority. If I look at the point number 2, AI-driven credit decisioning and risk management. All the tech products that we are kickstarting, we spoke of, have to be necessarily driven off the back of a solid risk management infrastructure and scientific decisioning. Remember one thing, what gives us courage to take four products to 10 products is a solid management team, and over and above, a very solid risk management and collections team. Our aim is to build a granular book that is differentiated by specific credit policies for specific segments. As a result, we have defined product and customer segments, risk-adjusted return on capital, to granularly assess risk reward choices. We will have approximately 10 to 15 such segments within each product. We are creating risk separation by using alternative data over and above bureaus. What I'm really doing is giving you micro details of what my guys are doing. That's what I asked them to share with me, precise steps. So that gives you a first-hand sense of the detailing that we're getting into. We are leveraging behavioral data, we are doing data from DigiLocker and other digital public infrastructure, the data sources, the point of sale, and micro market level data, and cash flow data via account aggregation. Very important. It should give us a 10%-20% higher lift in predictive algorithms. We are fairly investing in that to give us a cutting edge in a few quarters. Set up advanced portfolio monitoring techniques that can improve credit costs for another 20-30 basis points. We're granularly analyzing productivity and its impact through the door quality, along with keeping a tab of macro and micro indicators that might indicate slowdown or temporary shortfall in specific sectors of geography. The idea of getting into these small details is to give you a ground level feel on what's happening at an operating level. Building a team of cutting-edge AI professionals, along with strong capability and infrastructure, having hired some seasoned professionals to boost our current data science team. That's what we've done on the risk side. We are now investing in overhauling our scorecards from traditional models to AI and ML models. This is being worked upon by Jaswinder, Shriram, Bhaskar. Personally, they're getting into these areas because this could be cutting edge for us. Size of the balance sheet versus these initiatives, we could probably be the best in class in this in couple of quarters down the line. We will have a stack of models across customer life cycle, right from classification and regression models to predict income, to multi-bureau models and partnerships, alternate scoring models. This isn't easy to build. You can build this today because you've got a management team which has that main strength to create different swim lanes to ensure risk accuracy is not just compromised, while providing a seamless experience to customers. Fraud prevention is another area where we will heavily lean on AI, ML. We've achieved initial success in identity theft patterns, and documentation tampering behavior in our digital lending portfolio. We will continue to use a combination of graph-based technologies and generative AI to drive higher fraud prevention. To ensure all of the above are scalable, we are also building the right data marts and solutions, along with modular API capabilities for third-party integration. We will soon be partnering with one of the leading institutes of India to ensure we get a highly talented pipeline of machine learning operations and data engineers to build these use cases. Ramping up digital and performance marketing for our customer engagement is another very close to my heart. If you know my past background in digital, that probably will quantify why this area is so close to my heart. We will have a large customer lending base coming in over two to three years. Our aim is to ensure we have 50%-60% of our customers as repeat franchise customers. This will enable us to have a reasonably healthy margins, risk costs, and create solid customer cohorts. This will be the building block strength of us. To enable this, we are building a marketing technology infrastructure. Our focus going forward will be to monetize these capabilities via AI and scientific performance marketing, search engine optimization or search engine marketing and organic traffic builds, and engage our customers meaningfully over the web and customer apps. It will be a high priority for us. We're doing a fair amount of work on that. By quarter four of financial year twenty-five, we will go live with our revamped website that is powered by modern architecture and personalization capabilities. As we build out our new businesses, our app will also provide seamless service and interaction, including meaningful features that will enable us to engage with our customer base. Collectively, adding new people, new businesses, distribution points, new segments, and also capabilities across AI, collections, digital marketing will mean incremental investments over the next six quarters. I thought it might be appropriate for me to give you on a ballpark basis, because we've done a fair bit of budgeting on that, that we do expect the number to be around ballpark INR 50 crores per quarter over the next six quarters. These investments are gonna be foundational and will provide a multiplier benefits to our growth and profitability in subsequent quarters.... Having walked you through the details of our fundamental strategy, I will continue to keep the group posted on our progress in subsequent calls. Let me now focus our conversation to our performance this quarter. We are firmly on track to deliver our AUM growth as promised in our last quarter. What has changed is the mix of our incremental business, and that is a priority for us as well. We will change the incremental mix more towards in more granular, risk savvy, and incrementally solid customers. We've driven a purposeful scale-up of our commercial lending businesses on the back of the strong cash flows and tailwinds we are seeing across our markets. Incremental business disbursals among our existing four businesses, let me give you a sense of the two businesses. To begin with, business loan and LAP. It's been around four and a half months now, and we've already started growing at approximately 50% in business loan and 65% quarter on quarter, respectively. I thought probably this will give you some sense on what this team, after joining in various points of time in the last four months, can pick speed. At the same time, in LAP, we've improved our pricing as well. So it's not just that the LAP has grown at around 65% quarter on quarter. We've increased our pricing by 25-30. We've expanded our presence in 40 new cities. The idea of just sharing this with you was just to give you a ground level feel. We've curtailed down as well. Among the four businesses, there's an STPL business. I've given you guys a hint in the first 40 days. With our experience seasoning, we felt it needed calibration. We've curtailed down our disbursals in the STPL higher risk business by almost one. We're down to one-fifth. So whatever we were doing in STPL, we're down to around approximately 20% of that disbursals a month. Despite that, you notice we show the 5% sequential growth, which means the rest of the business have to start growing at a much accelerated rate, and which we managed to do even in the first four months. Over the next few months, we will test multiple customer cohorts on STPL in terms of credit quality, pricing, average ticket size, and then use our digital marketing machinery to scale up the disbursements. But it's very important we get the calibration absolutely bang on right. Coming from a two and a half years, or decades rather, at HDFC Bank, I've been brought up with a philosophy of prudence when it comes to risk management. It's very important that the balance sheet remains financially resilient to any foreseen or unforeseen surprises. I must clarify here that adequate provisioning, for me, is not merely a regulatory or accounting exercise, but a tool to ensure we are building a strong balance sheet through risk management. We walk the talk. I've been always telling you we'll be solid in risk management. When I say we'll be solid, it only means that we are to walk the talk as a management team, which is fundamentally important as we embark upon sustainable, predictable, and transparent long-term strategy. Post a thorough data-driven review of our STPL book, we have decided that an increase in provisions is warranted to ensure we are able to hedge against the unseasoned nature of the book and macro environment we are in. We are very confident that this one-time action, combined with calibration of our product mix for incremental businesses, will strengthen our balance sheet, without doubt, and enable us to sharply focus on multi-year, multi-product growth trajectory and deliver an AUM and a profitable number over the next few quarters. With this, we are confident that we are done with our credit assessment of the entire portfolio and have adequately provisioned on the entire book. This financial resilience that we have created in the balance sheet will help us build a very strong franchise from here on. At the cost of repetition, let me reiterate, we are very clear we are building a long-term franchise that will deliver 30%-40% AUM growth for the next five years. We are firmly on track to achieve it. At the same time, we are going to ensure that the business lines we get into are absolutely sustainable, and we remain prudent and calibrated in our risk management approach. Before I hand it over to Sunil and Sanjay to walk us through the detailed financial performance this quarter. The festive season, this festive season, we wish all of you a very happy Diwali. This quarter, in my view, will mark a very positive turning point for this company. We have made provisions for STPL book with a clear intent of better risk management and financial resilience. We are strengthening our balance sheet for the long-term strategy. Just to summarize, with this management depth, which I believe is one of its kind in the industry, and our strategy is one of its kind of building a franchise of six additional businesses, we're confident we'll take these 10 growing, 10 solid businesses to growth trajectory. I do believe firmly, this will be the transformation of Poonawalla Fincorp. Ballpark, I would treat it as four to six quarters, both in terms of diversity of customer segments, which we will build and add value to the franchise, multiple distributions that we'll create at a rapid scale, both physically, like I said, we are launching 400 additional branches from 100-odd, plus on the website, we'll transform the game. Recalibration of overall risk, substantially lifting AUM growth, is something that I see year two onwards, as a foundation for recalibration of profits, much better profits, starting the beginning of third year. Thank you very much, and let me hand it over to Sunil. Thank you, Arvind, and good evening, everyone. Let me now take you through the quarterly and financial operating highlights. Our assets under management stood at INR 28,396 crores, reflecting a growth of 40% year-on-year and a healthy 5% quarter-on-quarter. Now, this is despite the moderation in STPL book due to credit recalibration. In terms of AUM mix, our MSME finance contribution is 32%, followed by personal and consumer finance at 28%. Loan against property and pre-owned car at 19% and 15% respectively. We continue to maintain a balanced secured to unsecured mix of 51 to 49, with secured mix improving 225 basis points quarter-on-quarter. Our net interest income, including the fees and other income, was INR 645 crores for Q2 of FY 2025. This is up 22% year-on-year. The one-time OpEx and the ongoing investments in technology, distribution, and people impacted the PPOP, which is the pre-provision operating profit, during the quarter, which stands at 279 crores, as against 432 crores last quarter and 333-336 crores same time last quarter. During the quarter, we incurred a one-time OpEx of 71 crores, along with a one-time additional provisioning of 666 crores for the STPL book. This provisioning reflects our commitment to prudent risk management practices. The net NPA was stable at 0.33%. Our gross NPA stands at 2.1%. This increase in gross NPA is on account of higher slippages in the STPL portfolio. Our PCR, which is the provisioning coverage ratio, during the quarter, improved from 52.53% to 84.47% quarter-on-quarter. Coming to our liability profile, our cost of borrowings was lower by six basis points quarter-on-quarter, at 8.10%. This is despite the tight liquidity environment that we were in. We have been successful in reducing our cost of borrowing through a dynamic treasury management, with one eye on the cost of borrowing and another one on the liquidity and the ALM. Our debt-to-equity ratio was 2.26 times. We remain comfortable with positive cumulative mismatch across all our buckets, and a surplus liquidity of 5,710 crores as of September thirtieth, 2024. The total borrowings at the end of quarter was 18,107 crores, with approximately 71% of which are on variable rates. Whereas, the fixed rate borrowings are of relatively shorter tenure, which places us well to take advantage of the lower interest rate environment in the past, in the future. Our capital adequacy continues to be well above the regulatory requirement, with CRAR standing at 29.22%, of which the Tier 1 capital is 27.75%. Let me now take you through some of the technological initiatives undertaken. With implementation of centralized enterprise data warehouse and the data lake, PFL is now future ready for any new business segments with high volume compute platform and a single source of truth with near real-time data. This will benefit cross-sell campaigns, reduce turnaround time at a lower total cost of ownership... and faster query compute performance. This will also enhance the data democratization and the data-driven culture in the organization. We have partnered with an Account Aggregator that will further enhance our credit assessment and operational efficiency, which will help in managing the risk. We have built an AI-based delinquency and collection management system that effectively improves collections. Our collection stack is a cutting-edge solution built on a modular, low-code, no-code platform. We have integrated top-tier technology to enhance workflow execution, including the dynamic field allocation based on location and a robust legal framework, and a multilingual voice and chatbot for efficient customer communication. Our goal is to modernize the existing collection stack through seamless upward and downward integration while maintaining the current user interface, ensuring high user adoption. On the customer service front, we have implemented an integrated communication hub and an auto authentication of customer based on the registered mobile number. This will help our callers give a 360-degree portfolio view when talking to our customers. We have launched our first Gen AI-based voice bot and email bot. Our voice bot now proactively engages with the customer, providing important loan details through welcome calls, such as disbursement amount, EMI, due date, broken period interest, et cetera. About 35% of our inbound customer calls are handled by our voice bot, whereas the outbound welcome calling, 100% of it is done through bot. These topics that generate a high volume of inquiries at the call center are now explained automatically by the bot. The email bot that we have recently introduced shall provide, in phases, the instant response to our customer query, 24/7, categorize and scan the incoming emails to identify the topic and the urgency, prioritize email, ensuring that the urgent matters are handled first, bot drafts and sends a response to routine inquiries, reducing the workload on customer service team and speeding up the response time. Our Net Promoter Score, a key indicator of customer brand loyalty, has consistently stayed above 70% throughout Q1 and Q2 across all critical touchpoints, which is sales, onboarding, service, and exit. We are actively addressing customer insights, identifying opportunities for process improvement as part of our ongoing commitment to continuous enhancement. Thank you, everyone, and wish you all a very happy Diwali in advance. I would like to now open the floor for question and answer session. Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your 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. We have the first question on the line of Avinash Singh from Emkay Global. Please go ahead. Yeah, hi. Good evening. Thanks for the opportunity. So the first question would be, from where I left last quarter. I asked that, I asked Arvind about, the provision buffer that was created last year, and of course, I mean, we got answers from your other colleagues, or we got answers. So I mean, this, around, you know, nearly 700 odd crores of our provision on this STPL you have created. And then last year, when Poonawalla has, received money from that housing asset divestment, about 1,200 odd crores of, you know, that, prudential buffer was created. So what had happened to that? I mean, where is that buffer utilization, today? Because, I mean, with that kind of a buffer, and again, this kind of a provisioning to be done, this raises the sort of, very serious quality over the kind of, book that was underwritten over the last twelve, eighteen months, and in terms of, what is your confidence, as far as the, you know, provisioning on the entire book is concerned, that book, I mean, almost you have inherited. How comfortable are you with the kind of asset quality, and will this provisioning be sufficient for that? So my question is twofold, that okay, of course, your confidence going forward in the existing book and the, updates on what happened to that, you know, the provision, the buffer that was created, how is it utilized, what, where it is, now? That's for the first. Second one would be more on, you know, of course, you have, as you sort of rightly highlighted, the team you have now hired to build, you know, a franchise for the future next, many years. The question would be that, okay, I mean, how are you finding... I mean, you know, at the ground, branch and all levels, how are sort of they responding to this entire, I would say that, change in style, change in the top management? And for the top management, I mean, sort of, how, sort of, you see that the longevity in the organization, because, I mean, this kind of a transformation at times could be very frustrating. Because, I mean, the results take time, and your incentive sometimes linked to share price. Again, that is, that will again take time to, before your share price may start to reflect, this. So I mean, somehow, you know, that, the team also start to get frustrated. So how sort of, do you see this transition playing out, and how confident that, okay, this team is going to stay? Thanks. So, okay, quick one. I got two of your questions. Let me quickly cover the two parts and then hand it over to Sanjay to give you a perspective on a certain area. Okay. First of all, we've done risk calibration check on the entire portfolio. So while you may see provisioning on the STPL book, which I thought was relevant and appropriate to take it to adequate provisioning, which is why we've done that. But the checks have been done on the entire portfolio by our risk team, by internal and external assessments, so we are done with our provisioning. I want to be very clear on that. There's no ambiguity there. Yes, it is a little bit of a, you might call it a more precise upfront call, but it's important that we create and strengthen the financial resilience. You can't talk about risk management and then, you know, not have the courage to do it when it has to be done. Tough calls is important to make the company stronger and ready for its long-term growth, and you can see that we are ready now. The balance sheet is all ready. There are multiple plans and our courage to run six businesses. In those additional six businesses, first of all, there are no people, so we are building those entire teams, franchise, everything. So that'll be direct value to the company that we are creating. For the existing businesses, I shared with you about the four businesses. STPL, we are recalibrating it. That's predominantly very biased to digital. On the feet on street ground, they're business loans and LAP. The teams have really adapted well. There's no frustration, by the way, there's excitement. When you challenge people, I shared with you, the growth rates are around well over 50% in both those businesses. It's not like the entire team joined in on the first of, or the tenth of June, when I joined. Over the last four and a half months, they've been joining over at different points of time, and it's a team that managed to click really well with the existing team. I think they're a fine bunch of guys. They've already picked up fantastic speed, adapted well. I think we have some good people that we've hired, and would love to share the confidence that we have. We have very, very aggressive plans and, you know, challenges when you throw at people, people get excited and motivated. I mean, a good example of that is our own Indian Armed Forces at the border. It's not that they're paid the best, but when they're faced with fantastic challenges, the excitement is of a different order. You can well compare that with the way we run this, run things here. When you create exciting challenges, I can see the energy levels are only going up, and I think sky is the limit when it comes to business. We are excited about it, I'll be honest with you. When I told you we will look at the first portfolio in forty days, I was very frank with you. Now, when I'm excited about the road ahead, I'm equally in the same spirit sharing with you. So that's what it is. As far as the specific provision of the past, maybe we are more conservative for now, but I think, Sanjay, give him a sense of it. Yeah. So, out of the provision, okay, exceptional provision which we had created in FY 2023-24, we are still carrying INR 299 crore of provision in our books. So, as Arvind rightly said, books are well provisioned. And, just to add to the point on top management and how it is transforming the entire landscape, the way our core products, as of now, business loan, loan against property, pre-owned car, the way they have picked up speed with better yields, you will see, okay, the results in next quarters and years to come. And even these six businesses, there's a fair amount of work happening. Out of that PL Prime, I think we've already started reaching levels of INR 50-70 crores a month, to give you a sense. It's, you know, and probably be interesting to see quarter on quarter, we're moving quite sequentially, rapidly on those. So if you go into micro detail, we may have recalibrated some of the high risk businesses, but the ones which we are growing, we're growing fairly fast and fairly rapidly. Okay. Yeah, thanks. So you said that you are carrying a INR 209 crore provision from last year? Two fifty-nine. Two fifty-nine. Okay, thanks. Thank you. Thank you. We have the next question from the line of Shreyas Pimple from JM Financial. Please go ahead. Hello? Yes, we can hear you. Yeah. So I wanted to ask two questions. First, on PL book, what is the actual size of the PL book, and of that, the STPL book specifically, which is throwing up issues? Yeah. Yeah. Sanjay, can you throw some light on this as well? Yeah. So the total STPL book is to the tune of 6,800 crore, out of which the book, okay, which is which is belonging to the period prior to risk calibration, that book is about about 5,400 crore. The entire book the book of 5,400 crore is well calibrated as as I've been articulated, disbursement, which was to the tune of 1,200 crore, 1,000 to 1,200 crore monthly, have been brought down post this this calibration to 200 crore in September. Only after gaining confidence both on any kind of future repo rates in terms of the overall performance of the book, this is the customer segment, this is the average ticket size. We will, in a measured way, grow that book. So, this is. I think we've got a handle on the calibration, but the scaling up, I might take 60, 90 days on that particular book, because I think it's important we get it absolutely bang on right, and then I think it'll open up a new opportunity for us. But at the same time, it would be important to add that, the growth is more dependent on STPL. We have well-settled products, which we are giving the growth. Understood, sir. Thank you. Thank you for the detailed answer. The second question was on the capital requirement, both in terms of debt and equity, for to fund the fintech or tech investments that would be required for your growth ambitions. So I think we've already... I've stuck my neck out and shared some figures of around ballpark 50 crores for these six businesses over the next six quarters. To give you guys an indicator, that this 300-odd crores in one and a half years will set the ball rolling for us for a certain growth rate. Remember one thing. I've also said 400 new branches, because you can actually between digital and physical substantially increase your productivity. While we invest in digital, very important to get the ground level RMs also in India, in Tier 2, Tier 3 cities. We come with very strong experience. I see a great opportunities of fantastic ROI products there. So if you combine your ground level forces with digital forces, the productivity goes up. And business focus is priority for us. You can check my background on digital. We produce one of the best products in the world, so that effort is gonna go on. As a matter of fact, for me as a CEO, I'm gonna bet big on AI, but I'm gonna focus on business. If I can do two big projects, which are game changer in the next four to six months on AI, you'll hear of it. There are already two projects that I've commissioned. I haven't spoken about it. Let some results come in, in that, before we speak about that to you in the next earnings call, and it might be more appropriate. Most of the stuff that I've detailed out for you all right now is, so that everybody with that note gets a ground level feel what's happening on the ground, because a fair amount of work happening. You will see a more exponential kind of a flavor as we start moving quarter to quarter, because the experiences of our distribution is very, very strong. So to your point on the debt or equity capital requirement, we are a very low leverage company with our debt-to-equity at 2.26. So there is enough headroom to increase our leverage, so we don't see that as a challenge for our projections that we are looking at. Equity, again, it's very high capital adequacy, so we don't see a requirement to raise equity in near future. Yeah. I think the year ahead should be very strong. Exciting times. So this is building block perspective. Sure. Thank you. Thank you so much. Those were my questions. Thank you. Participants are requested to kindly restrict your questions to two questions, please. We have the next question on the line of Parag Thakkar from Fort Capital. Please go ahead. Yeah. Hi, Arvind, and the entire team. I really appreciate your long-term vision and the execution, foundations, which you have laid down. And I really appreciate that you have hired very good people to take the business from here. Hi, Parag. Yeah, hi. The only thing is that, unfortunately, when you take this tough decision of providing in one quarter, I hope that this shocker, which comes to market and which unsettles market, I hope that shocker thing is over now, with this quarter. Yes, first of all, I think, Parag, it's not a shock. It's something which is prudent risk management, and, as a matter of fact, absorbing shock. And I'm making sure that we have a clean runway ahead to markets can see more clearly, and I can see more clearly the road ahead. Thank you. Instead of playing wishy-washy over and trying to postpone, I think when you have this quality and credibility, I have also pressure to hold the ground and walk the talk. So I'm very, very clear. If you see my plans, I've gone out of the way to go into very high details with everybody. A lot of this is not theory. This is getting executed at the ground level. You can well imagine how many companies in the last ten years you've seen who've got the courage to say, "We've got four businesses, we'll put six businesses on the table." I've said that in the first forty days. Do you see me wavering on that? No. I've not wavered on it. Within the first forty days of coming in, I could see the problem. I specified to you guys, called it out, said the four businesses will launch. We have gone ahead and stuck our neck out for another two businesses. It's four and a half months. You can well imagine the seasoned experience we have with putting it on the table. We've got Serum India behind us. We've got a AA A rating. We've got solid pedigree. We've created a management team which is probably the best in class, in my limited view, and between existing and new people, we have a fantastic team! And I'm excited for the road ahead. I think the market should be fully excited that this is the company which is worth its mettle. That's what I would look at it. On the stock market, I told you last time also, I don't understand stock market at all. So that's treated as a disclosure. I understand businesses, and that you will see, we'll create one of its class. I have no doubts. I really appreciate your response. Just that, I think, Avinash also asked the same question, that on the STPL book, where you have provided so much of the amount, and you are after seeing the entire book, you have done this. So I hope that this amount or this thing will not be repeated, right? It is one-off, and we have decided to write it off in one quarter itself, right? Absolutely. But if I can reduce, calibrate my business to one-fifth of monthly disbursement, it takes courage, no? To bring it down. Obviously, it's fully recalibrated and we are going to... And I'm accelerating other businesses. Hmm. Obviously, we are fully. It's all well planned, it's well risk calibrated, I can assure you, and we have some very serious strengths which will play out in quarter on quarter. This was an important decision. It marks actually a game changer, positive move for the company. Yeah. Sir, sir. We want to focus on various projects, like I mentioned in this, and once you probably, your, respective fund managers goes through the details of my conversation, you will realize that I'm investing a lot in AI and a lot of projects. With our experience, we'll create something very exciting within six months, and that kind of optimism, I'm sharing with you when I see it. Sure. So I'm the kind of a guy, I'll tell you well in advance how I see the future. If I see the future bright, you will hear it from me. Sure, sure, sure. We really respect your, Let me be honest there. I don't understand stock market. Sorry, over to you. Sorry to interrupt you, but thank you. No, no, sorry, sorry. So really appreciate your comments and really appreciate your honesty and I would say modesty also. And the way you have gathered so many people from very, very highly respectable institutions. And so really looking forward to excellent growth as well, and asset quality also. The only thing which ultimately I would like to ask and for, this is for all of us to know, that whatever hit you had to take, you have taken, right? Just answer that question, and that's all. Across the book, taken, done, over. We are accelerating on our pedals now. Okay. So now there will be no extraordinary hits. The business is as usual now, and it will grow with a very, I would say, prudent risk management as you are running in an HDFC Bank, right? See, that's the DNA. We can't change that, sir. So risk management will be a little better. We can't change that. It's going to be a better DNA, and that I can't move it out because we work for an NBFC now. So there will be- Yes. I said the growth will be massive. We enjoy great credibility with existing distribution. Our understanding on creating new distributions is very strong. This is business time now. So business time is our forte. And this management team, by the way, is not just one level below me. You've got guys who are two levels below, now three levels below. This is expanding at a very good rate. We used to have difficulty getting that quality of talent at that pace. Now, I think we have a pipeline of guys who want to join us. I mean, I'm not exuding extra confidence on what I see on the ground. People have been kind, and I'm very grateful that people are showing interest in joining us. Yeah. We are very obliged, but we'll obviously be prudent at all levels, because, you know, we've been brought up being cost conscious, we've been brought up being sensible spenders, we've been brought up being risk prudent. Finance business risk prudence is hand in hand. Yeah. It's being extra prudent. It's part of life. Yeah. You cannot be, you know, compromising that area. That's all I'm trying to say. Perfect. We know how to do business. That's why the world sees it. Thank you, sir. Hmm. Perfect. Perfect. So basically, we will. So the one-offs have been over. Now, it will be business as usual. The growth will be as usual. You'll be always prudent in terms of providing, which was the DNA of yours and your HDFC Bank. So we'll continue to see that and growing new six businesses, scaling it up. Those kind of investments are absolutely okay with investors. But the one-off thing, which was a one-off thing, which you said on the last call, that you are seeing that STPL book, and now you have provided for it, right? So it's a one-time thing, which we have already taken. Yeah, we've just created financial resilience, sir. That's all we've done. Where it was required, I've taken. Rest of the book, we've calibrated, checked. Everything is within the range that we can manage, and there's nothing. From here on, it's. I'm excited from here on. Sure. Thanks a lot. Thanks a lot. Thanks a lot. ... Thank you. Thank you. We have the next question on the line of Kaitav Shah from Anand Rathi. Please go ahead. Hi, good evening. Thank you for taking my question. So two questions. Number one was, LAP seems to be the new gold in terms of financing. It's in a pretty good space. Where do you think, in which ticket sizes or markets would you want to create your niche in the first two to three years for us to kind of, you know, look up to, of how or measure you? How should we look at it? Number one. Number two, what are the outstanding, a bookkeeping question, what are the outstanding provisions on the books now? The buffer that had been created earlier. You're talking about provisions or the new provisions we have created, or which one are you talking? The old buffer. We had a buffer of about 1,000 odd crores prior to this. So is it still outstanding? What quantum is it? I think for me, let me give you a more holistic answer. LAP right now is gonna be one of the ten businesses for us. We're gonna be focusing on a lot of secured businesses, including for gold, by the way, will also be gold for us. Just so your idea, it's a good ROA business. So we still believe gold has a lot of shine left, and the size we are at, it's gonna be a great opportunity for us. We see, we are gonna cater to all possible segments that we can take advantage of, which is why on the business side, commercial vehicles, education loans, housing loans, consumer durable, to create a company. You know, when you create solid ROAs from here on, you've got to create customer franchise running faster than the growth rates of companies. So while our growth rates might be extremely on a positive trajectory, I would still want customer franchise to run faster, so that through AI, through cohort groups, through cross-sell strengths that we have management depth on, you can create some serious advantages, not just for LAP, for various basket of products. Even if, let's say, I want to be competitive advantage on the website, for example, which should be, which should be irrespective of your balance sheet size. But for that, you need multiple products and businesses on the table to be successful. That's the reason we're launching six additional businesses, so that both on the consumer side, commercial side, we should be on a solid platform to offer products, right to term loans, overdrafts, various needs of various customers. Every customer sees a need to be our second customer and third customer. That's important to understand. That's what we're gonna do. If you see, we are very clear, we're marking our niche as very strong consumer finance players, and that's important to understand on that provision. Sanjay, you want to throw some light on it, specifically? Yeah, so our closing provision as of September at entity level is INR 1,406 crores. Yeah, and we already talked about the incremental provision, okay, which we made of INR 666 crore and INR 259 crore provision, okay, out of the provision which was created. Exceptional provision which was created earlier is still okay there in the balance sheet. Sorry, can you repeat the last number? INR 259 crore of provision out of the exceptional provision which we had created earlier, is still there in the books. We are carrying that provision. Oh, okay, okay. Right, got it. And sir, just an additional question, sorry- Yes. Um. No, no, please. That you mentioned is, of course, multi-focused consumer NBFC. Can you please slightly louder, if you don't mind? I'm not able to fully hear you. Sorry. Yeah. Better? Yeah, much better. Yeah. So the question was, when we try and move to a consumer financing multi-product player, generally there are certain costs associated. Yeah. Initially that you have to do, and it could be a two to three-year process, if I'm not mistaken. So will we- Uh, no. Sorry? Sorry, you finish your question. Sorry. Yeah. So, are we going to see some heavier costs initially? Will there be some heavy lifting over the course of next one year in terms of cost? After the benefits will then flow in, just from an understanding perspective. See, let's look at it commonsensically. Any CEO comes, you've got a balance sheet, you take over, profits will come out of that balance sheet. It's not gonna come out of anywhere else. I want to invest INR 50 crores a quarter into the six new businesses, along with the expenses of rapidly growing the existing ones. The ones we are growing, existing ones, are fairly good margin businesses. The ones we are growing existing, the next six also are gonna be very good. What is the granular tenure? They're not ten-year loans, they're three-year loans. So in one and a half years, if you start scaling up, where do you think your calibration goes between your existing and new? Your profits, technically, while last time I gave a guidance, should be higher on the percentage of the two, it should ideally get recalibrated much higher. Right. Okay. Let me be conservative there, because what will really happen in four to six quarters, we will be a substantial lifters in terms of the recalibration of profit as well, and that's the plan. That's why it's important that the first four quarters we do basic amount of investing, and investment will lead to wealth creation. That's important right now. Remember, what I understand of the markets, my limited understanding is, once it should be more sustainable and predictable. As you see us build business, we'll keep sharing with you the growth rates, how we're building blocks, how we're building it, how we're cross-selling it. We'll give you enough feel as we go along, and that's important, so that you all will know that we are actually creating a fantastic franchise at a fairly fast pace. And that's gonna be the strong foundation for us. So I'm looking at robustness every two quarters, three quarters on a different scale, it will get recalibrated, and then at some point, you'll find it'll actually get recalibrated to a higher level very soon. Yeah? Thank you. Thank you, sir. Thank you. That was the last question. On behalf of Poonawalla Fincorp Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.