Ladies and gentlemen, good day and welcome to the Q2 & H1 FY 2025 earnings conference call of Satin Creditcare Network Limited, hosted by Dolat Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kapil Yadav from Dolat Capital. Thank you, and over to you, sir. Thank you, Yusuf. On behalf of Dolat Capital, I welcome all the participants on this call, and I thank all managers of Satin Creditcare Network Limited for the opportunity to host this call. For today's call, we have with us the senior member team from the management team, Shri H.P. Singh Ji, Chairman and Managing Director. Mr. Jugal Kataria, Group Controller. Ms. Aditi Singh, Chief Strategy Officer, and with this, I now hand over the conference to Shri H.P. Singh Ji, CMD, to preside over the call. Thank you, and over to you, sir. Thank you, Kapil. Good evening, everyone. Thank you for joining to discuss our performance during the second quarter and the first half of financial year 2024/2025. I hope you and your family enjoy the festive season and enjoy good health too. I believe you have had the opportunity to go through our quarterly results and investor presentation. If you have not gone through them yet, you can access them on our website or through the stock exchanges. I'll start the discussion on our Q2 and H1 FY 2025 performance with the expression of gratitude towards our Board of Directors, customers, employees, and all other stakeholders for their unwavering support, perseverance, and confidence as we complete 34 years of existence on 16th October 2024. As we continue our journey, our mission to positively impact lives nationwide remains at the heart of everything we do. This commitment compels us to look ahead constantly, asking ourselves, "What's next?" With this forward-thinking mindset, we have expanded our financial inclusion efforts, going beyond microfinance to offer a diverse range of services. Our aim is clear: to become a one-stop provider of diversified financial solutions for rural India, defined by our commitment to innovative processes and cutting-edge technology. Through our subsidiaries, we are able to fill gaps that need to be addressed for the deeper impact we want to create in the community. Moreover, as we are talking about subsidiaries, our latest addition, Satin Technologies Limited, has begun its operations, and through this venture, we look forward to accelerate change across sectors that are ripe for technological disruption. We aim to push the boundaries of possibility in building our technology-driven solutions to reach other players as well as deliver scalable solutions that create meaningful change. Now, coming on the dynamics of the current environment, I must acknowledge that the unsecured lending space has faced notable disruption during the last two quarters, with various factors like heat waves, general elections, and heavy monsoon leading to increased delinquency rates. In response, the industry is actively reinforcing its approach with enhanced risk management and innovative strategies to navigate these challenges effectively. SROs have also taken cognizance of the situation, implementing focused measures to ensure responsible financing, stability, and resilience across the sector. MFIN, Sa-Dhan, and household indebtedness guidelines were introduced in the month of July 2024, an essential measure for fostering a conducive environment for the industry for the longer run. It gives us pride to mention that much before the sector-wide initiatives by SROs, the company has been following the good practices like the policy of capping the maximum number of MFI lenders at four and limiting the total microfinance indebtedness to INR 2 lakhs. When the SROs implemented the guardrails in July 2024, the retrospective analysis showcased that just about 1% of the company's existing clients exceeded the number of lenders by four, and only 0.04% clients had loans outstanding exceeding INR 2 lakhs at the time of disbursement, demonstrating the strength and consistency of our approach to responsible lending over the years. Currently, we are happy to share that our portfolio is well within these guidelines, and we have well deliberated the same in slide number three of our investor presentation. Given the challenging environment within the industry, our portfolio has shown resilience driven by strong underwriting and right onboarding processes. In contrast to broader industry trends, Uttar Pradesh and Bihar, comprising 42% of our own book portfolio, continue to perform strongly, with PAR 90 rates in these states remaining below our national average of 3.53%, their GNPA being 1.98%. Moreover, our top four states, which collectively contribute about 60% of our own book portfolio, report a PAR 90 of 2.9%, a figure well under the national PAR 90 average. This stability across core regions reflects our proactive approach to client selection, coupled with robust risk management strategies and rigorous onboarding processes, even as we navigate the broader challenging impact in the industry. Our asset quality has experienced a temporary transitory increase in delinquency across a few geographies, including Odisha, Punjab, Rajasthan, Jharkhand, and Maharashtra, influenced by various challenges like heat waves, floods, general elections, and other on-ground external factors. This impacted regular collections and follow-ups in the delinquent buckets. These states comprise approximately 17% of our own book portfolio, with a cumulative collection efficiency of 92.2% for FY 2025. Additionally, our performance in Punjab has outpaced industry standards, with collection efficiency holding above 92% levels, even with calibrated disbursements. We expect the situation to improve from Q4 FY 2025. The company continues to strengthen its collection mechanism with additional PAR control measures by deploying dedicated collection resources for separate DPD buckets, driven by the findings of our data analysis and also supported by continuous customer engagement, along with robust underwriting measures. In response to macroeconomic challenges, we have implemented a series of targeted initiatives to fortify our operation and maintain asset quality. Our commitment to responsible lending is reflected in our stringent client filtering processes, with a sourcing-to-disbursement rate of about 37% achieved by following stringent guidelines, scorecards, and prudent underwriting standards and guardrails. We continue to adhere to a one-loan-per-client policy to prevent over-leveraging and ensuring responsible lending. To manage this effectively, we have ceased disbursements to new-to-credit clients in 561 branches, up from 200 in Q1 FY 2025, and halted new client acquisitions in 242 branches. This is also enabling us to focus on strengthening our existing client relationships. To enhance collection efficiency, we have split larger branches and regions for more focused oversight, deploying dedicated teams with about 1,100 employees managing specific DPD buckets and rationalized loan officer spans to improve management and accountability. Additionally, we have strengthened our supervisory structure by assigning one territory manager for every two branches, which has further bolstered our audit and risk processes. These initiatives collectively enhance our resilience and adaptability, positioning us well to navigate current challenges. We are pleased to announce that we have received our AUA KUA license from UIDAI, enabling seamless eKYC transactions through a fully digital automated verification process. This brings swift, paperless results with enhanced accuracy, security, and sustainability, advancing our commitment to efficient and user-friendly customer experiences. Talking about our operational performance during the H1 FY 2025, on a consolidated basis, our AUM grew by 16% year-on-year to INR 11,749 crore. On a standalone basis, the AUM stood at INR 10,463 crore, up 18% YoY. The disbursement stood at INR 4,733 crore on a consolidated basis and INR 4,272 crore on a standalone basis. Our borrower base grew by 8% YoY to 34.6 lakhs, while our branch infrastructure stood at 1,463, up by 10% YoY as we added 128 branches in 61 districts. Like I said before, we have observed a temporary increase in delinquency during the reporting quarter on account of several factors, which impacted regular collections and follow-ups in the delinquent buckets. On-book GNPA stood at INR 286 crore, which is 3.5% of the on-book portfolio. The company has sufficient on-book provisions amounting to INR 284 crore as of Q2 FY 2025, which is 3.5% of on-book portfolio. Provision required as per RBI regulation is INR 167 crore. We have adequate measures in place and are working to ensure that delinquency trend should stabilize from Q4 FY 2025 onwards. Coming to our financials now, during H1 FY 2025, the company's overall revenue grew by 30% YoY to INR 1,290 crore on a consolidated level, and on a standalone basis, it reached INR 1,183 crore, marking a 30% increase. The pre-provisioning operating profit stood at INR 411 crore, registering a growth of 34% YoY on a consolidated basis. On standalone, the PPOP stood at INR 398 crore. This growth reflects our focused strategy and operational efficiencies in spite of the difficult dynamics. For H1 FY 2025, the consolidated PAT stood at INR 150 crore, with an ROA of 2.8% and ROE of 12.1%, reflecting our sustained operating profitability. As we look ahead, mindful of the current industry landscape and the challenges that have emerged in recent months, we have revised our guidance for FY 2025 to reflect a more measured outlook. We now anticipate an annual AUM growth of approximately 8%-10%, with a projected credit cost of around 4.5%-5%. Despite these near-term headwinds, we remain confident in our strategies and continue to assess the evolving situation on the ground, ensuring that we remain agile, resilient, and prepared for future opportunities. On the borrowing front, in H1 FY 2025, the company has raised INR 3,852 crore at the group level from various lenders. We draw good comfort from our diversified domestic and international lender base, which ensures continued access to funds. Further, the company has an CRAR of 28.8%, an adequate liquidity of around INR 1,590 crore, and also has undrawn sanctions in hand of more than INR 1,539 crore as of 30 September 2024. Our consolidated book value stands at INR 250 per share. Coming to the other aspects, I would like to highlight some of the foundational strengths that position us well for sustained growth and resilience. At the heart of our success is a stable, highly skilled, and dedicated management team. With an average tenure of over eight years, our core team brings a wealth of diversified industry knowledge and an enduring commitment to our mission. This depth of experience and continuity is a powerful asset as we navigate an evolving financial landscape and steer the company forward towards new horizons. We are also proud to have further strengthened our governance with the addition of three distinguished independent directors to our board in the recent times. These seasoned professionals have brought fresh perspectives, diverse expertise, and strategic insights that will enhance our decision-making processes and deepen our focus on responsible, sustainable growth. Their contribution will be instrumental as we continue to adapt, innovate, and lead with integrity. Coming to the laurels, our company as well. I'm immensely proud of the technological progress our company holds, and it brings me great joy to see our efforts recognized through multiple prestigious accolades. We were honored with the Best Solution in Cash Management India Award at the 2024 The Asset AAA Awards, and received the Best Technology for Operational Efficiency MicroLend Award at the 5th Annual BFSI Excellence Award 2024 organized by Quantic. These achievements reflect our commitment to innovation and operational excellence. As we move forward with our core strengths, clear vision, dedicated team, and strong foundation, we are well positioned to navigate challenges and create lasting value for all our stakeholders. Now, let me run through the financial and operational highlights of the company, starting with the consolidated highlights. We have a customer base of 34.6 lakhs as of 30 September 2024, with presence spanning in 1,463 branches across 473 districts in 29 states and Union Territories of India. Our top four states contribute to 55% of total AUM as of Q2 FY 2025, and the states are UP, Bihar, Assam, and West Bengal. The total revenue for the quarter stood at INR 1,292 crore, up by 30% YoY. Standalone highlights, our average ticket size of MFI lending for the H1 FY 2025 stood at INR 52,000. There is a slight increase since we are focusing on lending to our existing clients. We have a well-diversified customer base of approximately 33.9 lakhs clients with 76% rural exposure. Pan India presence is 1,361 branches. PAT for H1 FY 2025 stood at INR 144 crore, ROA of 2.8%, and ROE of 10.6%. The shareholders' equity stood at INR 2,798 crore as of 30 September 2024. GNPA as of September 2024 stood at 3.5%. The overall provision coverage ratio increased to 99% versus 79% in September 2023. Total borrowing stood at INR 7,653 crore as of 30 September 2024. Debt-to-equity ratio as of 30 September 2024 stood at 2.7x. As of 30 September 2024, 96.8% of our districts have less than 1% of AUM, an update on subsidiaries. Through the collective efforts of our subsidiaries, we aim to extend the spectrum of financial services to our clients. By harnessing the strength of our microfinance outreach, we endeavor to extend affordable housing and retail MSME loans specifically to clients who have completed more than two loan cycles with the company and have higher credit requirements. Satin Housing Finance Limited has now reached an AUM of INR 850 crore, which grew 50% year-on-year, having presence across 19 states with 8,228 customers. SHFL has a 100% retail book. The quality of the portfolio remains intact with GNPA of 1.4% as of September 24. The company has 30 active lenders, including NHB Finance, CRAR of 55.68%, and gearing of 2.3x. PAT for H1 2025 stood at INR 1.5 crore, credit rating A- stable from CARE Ratings. Satin Finserv Limited, the company's MSME lending arm, has reached an AUM of INR 435 crore. We are running down the business correspondent book and focusing on building retail MSME book going forward. MSME on-book portfolio grew by 48%, CRAR of 41.2%, and gearing of 1.6x. PAT for H1 2025 stood at INR 3.4 crore, 18 active lenders, including banks and platforms, et cetera, credit rating of A- stable from CARE Ratings. In closing, as we forge ahead on our journey of growth and innovation, we are confident in our ability to achieve greater profitability while ensuring operational efficiency. Our strategic vision and dedication to excellence position us well for our prosperous future. Thank you for your time. With this, I would like to open the floor for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants, to ask a question, you may press star and one. Participants, to ask a question, you may press star and one. Participant, if you wish to ask a question, you may press star and one. First question is from the line of Rishikesh from RoboCapital. Please go ahead. Yeah, hi. Hi. Hello, am I audible? Yeah, yeah, you are. Oh, thank you for the opportunity. My question is with respect to the OpEx, our cost-to-income looks elevated for Q2. Can you please touch upon this, and how do we see cost-to-income going ahead? See, it's not a marginal increase which has happened. Technically, from our 43%, which was Q2 FY 2024, to about 46%. See, this is in respect to the new environment, the way things are proceeding. So we've added, as I said in my earnings call speech, that we've added more dedicated employees in different DPD buckets to do more collections effectively. And that is probably one of the biggest reasons since we have had this kind of OpEx increase in that. So related to that, then you'll get also other administration increases in terms of the incentive given across over there. But it will remain stable, I think, going ahead in the same range as such, about 45%-46%. Okay, got it. And what credit cost do we foresee for H2 specifically? And steady state, what is your view for FY 2026? See, for us, as we have given the guidance that we'll be closer to about 4.5%-5%, that's what the range is. But to be very honest, as we put in, as I specifically mentioned in terms of our guardrails for lending new-to-credit clients, new-to-settled-credit clients, different branches across over there, we feel that we'll be able to manage probably within these range or maybe lesser than that. That's what our whole task is, and the management team is working towards it. As I said also earlier that by Q4 FY 2025, I think we will probably be stabilizing the whole process by putting in all these efforts of ours and looking at various things. I think we've given a detailed kind of guideline in our investor presentation of one page that what all measures we've taken. I can see that it has now started to show some results for us. And I think if you look at the credit costs as compared to maybe the other credit costs which are coming in, I think they're fairly, fairly much better in terms of our credit cost work we've done. So this is what our guidance is, and we hope to probably be able to do maybe better than that also in the near future. Okay. And what would be our current unsecured book, and what is the target? Sorry to interrupt, Rishikesh, your voice is breaking. Am I audible now? Yes, please proceed, sir. Yes. Just want to touch upon the secured book part. What is our target for our secured book growth? What percentage contribution do we foresee going ahead? See, so for us, the secured book is closer to about 12% of our total AUM consolidated. We want to increase, since we said, about 8%-10% overall growth, but we are emphasizing a growth in our secured book both on the housing and retail MSME of about 40%-50% year-on-year. That is where we do it. On our current estimate basis, in the next three years, I think for us, our secured book would probably be 25%-30% of the total overall consolidated AUM which we will have. Okay. Okay, got it. Thank you. Thank you. Before we move to the next question, a reminder to the participants to ask a question. You may press star and one. Next question is from the line of Aman Mehta from Dolat Capital. Please go ahead. Hi, sir. I have a couple of questions. First is related to MFI. I have collection in MFI business improved in October month. I got the collection efficiency and industry-wide. What are your thoughts and views if you can share that? Secondly, it is on what is the slippage to NPA in this quarter? And what sort of trend do you anticipate in slippage leakages in the next two quarters? And what is the share of borrowers with exposure? And what is the trend you're observing in ground level in the top four states? So we've given you the status of our top four states this thing. Where our overall PAR 90, the GNPA is closer to about 2.9%, if I'm correct. Yeah, it's about 2.9%, which is below the national average of 3.5%, which we've reported. So you can get the answer from there. That is point number one. Point number two, you've asked me when do we technically see this. As I said, Q4 is probably the quarter when we actually look at it from our standpoint. But how does it go forward? Collection in October is technically the flatish of the same as what it was in the previous thing. But you'll have to bear it in mind that October was a month where we have Diwali, Chhath Puja, and everything which is probably consolidated in the efforts. And so we've got Dussehra, Diwali, and everything. It does have a spike technically. If you look at it from that angle, it's also not probably a month where we can actually see it, but once we've entered November, I can probably give you some headwinds into that. We are far better off in November since we do not have all these festivals now. They are all over. The monsoon is over. The heat wave is over, so everything has been put behind. It's a stable thing. In the initial eight days, I can probably just give you a fact of the matter is that we are far, far better in this month as compared to the previous six months, so that is probably one indication which probably can give you some kind of a comfort. Slippage in Q2 was about INR 121 crore in terms of what you said in terms of the flows. And this is probably going to be maybe range -bound if we go forward in terms of Q3 and Q4. Okay. Okay, sir. And what is your guidance overall growth guidance? Is there any change you are seeing? So we have said that it is tapered down to 8%-10% instead of the 25% we had earlier projected for ourselves. Okay. Thank you. Thank you. Next question is from the line of Rajendra Pasi, who is an individual investor. Please go ahead. Hello. Am I audible? Yes, you are. Yes. Rishikesh, please go ahead. So sir, as you have mentioned that this month we have improved somewhat from the past six months. So can you say that the trend might continue in Q3 and Q4 from the collections perspective? No, that's what I said. I think what we are seeing in the initial eight days, ten days of November, we are much better than the last six months. So if this stabilization and the trend continues, I think we will probably be much better off in terms of how we probably do it. But there's an overlap of the last six months which will probably have a bearing on the Q3. That's the reason why we were very, very clear in our process when we said that Q4 would be stable, at least for us. I cannot talk about the entire industry or anybody else. I can talk about myself. But what we are trying to look at is that I think once all these hiccups and things on the ground, plus the guardrails which we've actually enforced since February 24, and we are taking all those measures of NTC as well as new-to-client and new-to-settled clients and everything, the whole cumulative effect of all this is going to probably have an effect from now on to see whether we will have an improvement. And I don't know whether the first eight days or 10 days are indicative enough to probably do that. But for us, we feel that maybe some measures of that indication has already started to come in for us from the first eight days of November. Okay. Thank you. Thank you. Thank you. Next question is from the line of Pranav Gupta from Aionios Alpha Investment Advisors. Please go ahead. Hi. Thanks for the opportunity. Just a sort of follow-on question from a few of the previous participants. Wanted to understand, sir, how are we seeing the collections, not overall collection efficiency, but maybe collections on the X bucket? That will help us get a sense of how the pay flows are moving and whether we can sort of hold on to the Q4 normalization trajectory that we're looking at. So some sense on the X bucket collections would be helpful, sir. So let me give you an indication again of how 1-30, 31-60, and 61-90. Let me be a little bit more explicit in giving you these kind of numbers. 1 to 30, past six months, I think for us, when we are looking at it, in the last month, we've had a slight increase in the 1 to 30 collection buckets also, which we are seeing again increase, as I said, in the first eight days of November. For example, if my 1 to 30, I know this is not a figure which probably is there. But if we are seeing an X collection efficiency, we've had practically a 20% increase in the collection efficiency into 1 to 30 buckets. And that's a very, very positive sign for us. Regarding the 31 to 90 DPD buckets, we are seeing again a 20% increase in 31 to 90 buckets also. What we've also done is I think we've also put in that 1,100 dedicated employees which we talked about in the earnings call as well as in the investor presentation. People have been specifically being put in these DPD buckets. We earlier had DPD buckets of 90 + onwards where a separate team was working on it. Sorry. We've created this team now of 1 to 90, 1,100 dedicated people who are continuously visiting and motivating these guys, the borrowers who have not paid in these 1 to 90 are there in that bucket to repay. And we've had very good positive signs, as I said, in November, the first eight months. And we feel that that is probably this is how it holds on. We have a much better collection efficiency of the DPD buckets from 1 to 90 on the overall basis. Understood, sir. Just one more follow-up on that, sir. Are we seeing pullbacks, not just obviously stabilization within the buckets, but also pullbacks increase when we say compared to the last two, three months? Is that also a thing that you're seeing? Or is it just that customers are continuing to pay and stay in the same bucket that they are? There's been increase in knockouts also. So that's what I said. Once all these pitfalls are taken off, I think microfinance is a very specific kind of asset class where I think rains will have a thought process on your collection efficiencies. Heat waves will have it. Festivals will have it. Basically, it's more physical collection, which is probably done appropriately. So there's been an increase in our knockouts also in the first eight to ten days of this thing. And why we say it is important to see the November first ten days as compared to this thing? Because 31st was Diwali again, and 30th was Chhoti Diwali. We had Dussehra about ten days before that. So the festivals do have an effect in terms of other things. October 2nd was again a national holiday. Chhath started from right after Diwali and then Bhai Dooj. So in spite of the fact that we are actually in the midst of the Chhath process right now, we are still talking of a very positive sign in terms of collection efficiency, both overall as well as in terms of our DPD collection buckets also. Right. Right. So just one last question on the asset quality bit. When we look at states like Odisha, Rajasthan, these are the states that have been mentioned by many other players also where they're seeing slightly elevated GNPAs and collection efficiencies being down. Is this solely in your opinion, is this solely because of the overleveraging bit, or are there other state-specific factors for some of these states that are at play? See, I will probably hold myself and not exactly saying that it's been overleveraged, but I think it is a combination of all these processes of, I think, the festivals and maybe at some places, maybe some kind of overleveraging in terms of this. There's also technically Odisha and these places being coastal areas. I think the typhoon, the cyclone just came in the end of October as such. That has a bearing. Bihar has been grappling with floods. Even though I think people have been talking about nuances in UP and Bihar, but I think our collection efficiency as well as our PAR numbers are far, far better than probably people have been talking about. So my own sense is I think once all this probably settles down and I think we are able to put in our kind of dedicated teams as well as our guardrails and everything, it will have a cumulative effect overall for us in the asset quality. I think that is probably something which we would like to probably state that by putting in all these, I think we will have some much better things to really look on in the next six months or so. Okay. Great. And sir, just one last question on the growth bit. Obviously, keeping these next two quarters aside where we'll sort of try and move towards more of the normalization. But when we look at FY 2026, do you believe that with the new and stringent guardrails in place, we will start seeing an environment where there is more focus on customer acquisition, net new to credit or new to each lender, and also sort of a higher share of customers that are exclusive to each lender? Is that an environment that we are going to start going forward? We are still assessing the overall perspective. But one thing which I can probably say for our company, I think we were probably the first ones to enforce these guardrails even before the SRO actually brought in. So if I tell you, our NTC actually started from February 2024 onwards, which we've increased now from 200 to 561 branches, as I said. For us, I gave you the percentage figure, 1% in terms of four lenders and above. We've got 1 percentage point. So all these factors, the blueprints for us are very clear. For us, asset quality is far more important rather than the growth. And that is the reason why we petered down our growth. But we are focusing more on our collection efficiency and on our asset quality. And if we've been able to hold on as compared to maybe the overall environment at a GNPA of 3.5%, I think we probably will be able to hold on much better than as we progress further from there. Sure, sir. Thank you so much. Thank you. Thank you. Next question is from the line of Anant Mundra from Mytemple Capital. Please go ahead. Hello. Thank you for the opportunity, sir. Sir, my first question was on our write-off policy. Just wanted to understand what is our write-off policy and what is the current provision that we have on stage one and stage two assets. That was my first question. The second question was around, I mean, there have been some reports that there's a lot of voter ID duplicity that happens. So just wanted to understand how big is this an issue industry-wide or how big this is an issue for us. And also wanted to understand why is it that the industry relies on voter ID, which is easy to duplicate rather than something like an Aadhaar, which is difficult to duplicate. And the third question was around any permanent changes that we are planning to make around our business model or processes or underwriting policies based on the learning experience from this cycle. Thank you. Okay. So, on write-off, we generally write off the cases which are beyond 360 days DPD. But in the stressed states where we have defined how we should treat the stressed states, there we write it off after 180 days. So this is broadly our write-off strategy that we do. Over and above, wherever we feel that there is a problem, we do that. But these two things we surely write off. Now, in terms of your voter ID, so we have gone far ahead of that. So we do two what do you call this? KYCs. Aadhaar is our primary source of KYC, and voter ID card is the same. Aadhaar for us is beyond any kind of manipulation or duplication because we do Aadhaar with iris verification. Now, even people are doing Aadhaar with biometric or doing voter ID card. We are probably the only institution in the entire MFI sector, and this is where I state with a disclaimer. We are the only company in the entire MFI sector which does Aadhaar with iris verification, which has absolutely zero chances of any duplication or kind of fake this thing. On the third point of yours, how do we make our changes in underwriting, our processes, and everything? That is something which we keep on doing day in and day out. For us, it's not something we will do it once we see the environment going bad or anything. That's the reason why we said all these guardrails which have come in force after about eight to nine months of their being enforced in some time in August or September, we've done it in February, basically. For us, it's a constant evolution process, constant process of evolving assets and making changes in our processes as well as everything. All these actually lead to what we said. This whole thought or the way we do it, and by the way, Aadhaar and iris verification, we've been doing it for the last two years now. It's not even that it has started now. We've been doing this for the last two years. This is how we actually track ourselves in terms of the changes and the processes which we do for our institution. Got it. For the first question, you missed out on the part. How much is our provision coverage on stage one and stage two assets currently? Stage one PD is close to about 43%, and we make a 62% provision on that. And similarly, on stage two, we have between 31-60 of about 68% and 99% on 61-90. So on that, we make a 62% provision. Okay. Got it. Thank you, sir. That's it from my end. Thank you. Thank you. Thank you. Next question is from the line of Shreyas Pimple from JM Financial. Please go ahead. Hi. Thank you for the opportunity, sir. My question was on page number 3 where you have given Satin Plus 4 percentage clients at the time of disbursement. I wanted to understand, can you provide the number at the end of Q2, how many clients have Satin Plus 4 exposure? See, let me give you this answer. I think this is an answer which probably doesn't have any merit. When we disbursed, what happens post that, I have no bearing on that, to be very honest. Now, if we've done at the time of disbursement Satin Plus 1, I think you can take heart from that that whatever increase would be, again, that would be very minuscule. Now, if I keep on tracking that, I can't do anything about it if the customer is live and it is actually working on it. I can't do anything about it. And that's point number one. Point number two, I think if you look at the other factor of ours, that anything which is over 2 lakhs, we've done 0.04 at the time of disbursement. Now, if something happens post that by any other player in the entire industry, we probably do not have any bearing on that. So even if I do a scrub, even if I try and look at it, what can I do about it? I can't do anything about it. I can't go to a customer and say, "Okay, prepay me just because you've got another loan." I think that will probably put the field in a far bigger jeopardy than anything. Right? Understood, sir. The reason why I asked the question was that many players have been reporting this number. So just for the compatibility, I thought if you could. That's what I said. It's very important that when we are actually giving out a loan to my client, that time it is important for me to seriously look at it. After that, the guy is already on board. I can't put him off the train now, even if I have the number. So I don't know whether that has relevance or not, but that's how we look at it. Fine. Fine. The second question was on the operating expenses. The operating expenses for the quarter have been elevated. Could you bifurcate on how much of these operating expenses were because of branch additions and how much of the percentage would be strengthening of collection teams? See, branch expansion, we've increased about 128 branches. That's part of our normal process. If that would have been, that would be very minuscule. I think the basic factor where we've been able to increase our office is because of, one, lowering our caseload for our loan officer. That is one. We've taken additional loan officer because since it is a stressed environment, we want to have that the customer, the loan officer will have the freedom to actually look at the clients and get collection from them. And the second is about 1,100 employees putting in separate DPD buckets, which will give us probably a much better collection efficiency again in the process. I think that's probably 90% of the reason why we have that little bit elevated cost for ourselves. And along with that will come incentives and everything. It's just not just the regular expense. The infrastructure expense will also get added on, plus the incentives, et cetera, will also get added on to the whole space of the resources which we have. Understood, sir. That is very helpful. Thank you so much. Thank you so much. Thank you. Next question is from the line of Raja from Nuvama Wealth. Please proceed. Mr. Raja, the line is unmuted. Yeah. Thank you for the opportunity. Sir, just wanted to know, in first half, our credit growth is about 18%, and we have been guiding about 8%-10% for the full year. What the credit disbursement growth we are targeting for second half and the next year? Next year, I do not have a thing. We will look at how the collection efficiencies and the GNPA has panned out. I think it will all be dependent on our credit cost. Our own senses, as we said, I think that Q4 onwards is far more the thing. I think we'll take a re-look at it. We are also looking at complete environmental change in our complete systems as well as everything in terms of how we evolve, look at our center meetings, our JLG model, our models in terms of products and everything. I think we are preparing blueprints on that. And once we have that ready, I think we're trying to look at how we are able to do it. So I think pretty premature for us to give you a guidance for the next year, but 8%-10%. If you can put some light on the second half, how do we see the disbursement growth? I think we are flat right now. Basically, I think that the whole growth of about 8%-10% will come in the third and fourth quarter, basically. Okay. So our collection efficiency we are, and I think most of the state, four, five states, I think better than the industry. Despite that, yeah. Despite that, we Despite that, we have been, yeah, guiding about 4%-5% kind of credit cost. Again, the first half, we have the 3.9%. So what the kind of return ratio we are looking? Return ratio means ROA. ROA. Yeah, ROA. ROA, I think we're not given any guidance, but I think we will probably be around 2%-3% or so within that range. I think ROE will also be closer to about 8%-10%. That is what our process is. One thing which I would like to point out, and I think we're working as a team very hard in terms of the guidance which we've given, and our only work towards all this is that we want to beat our guidance also for credit costs. That is what our whole work is now revolved around in the next six months so that we can send out a far more positive message to all our stakeholders from there. So what is the qualitative question? So how the situation is on ground in terms of collection efficiency? Is there any sign of improvement? Or if not, then when we can expect maybe by the end of the year, or when do we expect that there will be some improvement in the collection efficiency? I've been far more candid and blunt in telling you about the first nine days of November, and I said we are seeing very positive signs in terms of our collection efficiency as a thing. I think if this trend post all these festivals, monsoon, and everything, if that holds on, I think we'll have a far more better numbers coming in, so first nine days, first eight days have been very, very good for us in terms of our collection efficiency as well as our numbers in terms of knockouts, DPD buckets, collection, and everything. So if collection efficiency is improving, then credit growth guidance and the credit cost guidance, both will change for second half? Sir, we'll try to do better. That is always our endeavor. Aage karne ki koshish karenge hamesha. Thank you. Sir, lastly, on the number of people we have deployed for the collection, out of 1,100 employees we have, how many of them have been deployed for the collections? All 1,100, sir? No, size of the collection team, just wanted to get the sense. So this is the collection team which we have deployed separately. 1,100 is only for collection in these DPD buckets. Okay. Thank you. Thank you. Thank you. Next question is from the line of Amit Agarwal, an independent investor. Please go ahead. Hello, sir. Thank you for the opportunity. Sir, I just wanted to understand from you the big picture, how is the future of Satin going to shape up? Because the kind of guardrails and whatever is happening in the industry, it appears that the bigger banks who have cost advantage and the reach advantage, they will eventually gain market share because a borrower will not have more than three lenders or four lenders. So how are we going to ensure our right to win in this environment? And is it going to be like we will pursue some kind of small banking license or banking license? How are we going to approach this crisis? So Amit, let me give you my perspective. Definitely, we are in a competing field where we have large banks who have the ability and the thing to probably do microfinance in a much larger space than what we can do. What I can probably say with the last two quarters being there, the microfinance landscape has changed completely. It is no longer a space which is only left with people who have too much money in their pocket that they can only lend and probably do it. It is more of a collection game now which has evolved. It is more of a technology game which will enable and support the microfinance objective. It is more of a process and human resources game which is there in terms of other things. It is more related to probably the entire environment. We looked in a very different kind of a scenario. Whether it is JLG, you want to do with shorter center meetings, you want to do with larger center meetings, you want to do with certain areas, you want to do certain areas. It's not just about talking about money in your bank account and you can actually do microfinance. It's much different from what it was in the earlier days. Over there, I think what I can say with certainty, I think as an institution, Satin is well poised always and will always be ahead of the curve for everything which is being involving in this kind of a space. That is what exactly we are doing right now. That is the reason why I can say with surety that the guardrails which came in nine months later than that, and this is the statement which I've been making, we did it. Secondly, I think which people tend to overlook and see it as an oversight. What is Satin? Satin is not only a microfinance institution. It is a combination of secured lending of MSME as well as housing finance. And we have forayed into technological this thing with our new structure which is coming in. And for us, that is probably one of the key areas that we've been very strong in our technology efforts. And that is how we are going to take that positivity taking forward across. So this is not just microfinance which we talk about. It's a much larger picture and a much larger perspective which we are talking about for Satin in the longer run as such. Yeah, but I understand. So basically, for Satin technology, what is the size of opportunity that you are looking at? I believe that you will be providing solutions to mostly these lending space and financial space. So what do you think? What is the size of opportunity there for that company, Satin Technologies? It's very huge. If you look at the BFSI space for any large technology company, that's the biggest space everybody has. We have been implementing and doing this practical solution for the last eight to nine years. We've got a solid team. We can actually the software for LMS and LOS, which was for microfinance, for MSME, for housing finance, it has all been done internally. If we can actually make for four different asset classes for us, I think it can speak something of the advantage which we hold. That is the reason why for us, we floated a subsidiary which will take advantage of the space in the BFSI sector to a large extent and maybe in various other related fields going ahead. That is what exactly it is all about. How many people do you have in Satin Technologies, sir? Satin Technologies just started about three months back. It's about the same. But in the parent company, we have close to about 100 people in the technology team which is there. And that is something which we are going to slowly replicate in the new company. It's just been two months old. But just to tell you, I think we've got a few clients now in the technology company right from the inception. And that speaks about how we've been able to approach looking at our software progress going forward. So one last question on your Satin Housing, sir. I've been actually very bullish on housing. So I'm very excited about our venture in Satin Housing. So just wanted to understand how our competitive position stands in Satin Housing. What is the cost of funding? Because a lot of players have very low cost of funding. Secured lending is a very competitive space. So how are you going to scale this with whatever we have? Amit, that's your name. Sorry, not that if I remember. So Amit, for us, housing is an opportunity where we have a complete USP. There is still not an outreach on the rural space for the affordable housing segment by anyone right now. We are probably the only MFI which has got a separate subsidiary which will have an outreach, piggybacking upon our parent company in terms of the thing. We are present in 479 districts. We are present in 28 states. We are present in about 100,000 villages. For me, that is the opportunity of housing finance. And housing finance, not talking of the cost of funds. Cost of funds is coming slowly down. We're just about six, seven years old in the housing finance company. But the opportunity in terms of housing finance, we've got the complete monopoly in terms of our USP in terms of our rural housing, which I think probably nobody has. Just because of outreach in MFI, I think we will be able to do it. And for such a young company, we've been able to get an ICRA A-rating for housing finance. I think that can speak about it. A CRAR of about 50%, which is there. And our marginal cost of fund right now is about 10.25% in the thing, which will slowly also come down as we grow bigger and bigger across over there. Okay. That's helpful. That's it for me, sir. Yeah. Yeah. Thank you. Thank you. Next question is from the line of Rahul Mishra from RTL Investments. Please go ahead. Yeah. Thank you for taking my question. And congratulations on a very good set of results given the environment. My question was, given what has happened, and it clearly seems like there has been this issue of over-leveraging, because if you look at the slippages from, say, the 4+ versus the 4 -, there is a reasonable difference. Given that, should we not think about the industry stabilizing only when the forward flow, I mean, at the top of the funnel stabilizes? Sir, sorry, your voice is not very clear. Not able to comprehend. Yeah, not able to follow you. Sorry. Can we please request you to use your handset? Is this any better? Yes, sir. Yes. Better. Rahul? I think we. I think he dropped off. He got disconnected. We'll move to the next question from the line of Vishwanath Singh, an individual investor. Please go ahead. Hello, sir. Am I audible? Yeah, a little louder, please. Hello. Am I audible now? Yeah. So just to start off with, I have a question regarding Satin Housing. When do we expect the operational leverage to take in housing finance? I mean, with respect to the margins compared to the industry. We got the growth rate, as you have mentioned. It would be around 50% year-on-year, which we are targeting. But I was also interested in knowing the margins and how would we assess in future. Yeah. So as we are going about, I said 40%-50% year-on-year in this. If I give you our lead indicators in terms of our—the thing that we are closer to about INR 850 crore. In terms of our margins, I think our yield right now is close to about 15.5% or so. As we progress further by adding on more clients in the rural areas, I think this will probably inch up further. For us, having a base where a yield in a housing finance company technically is about 15.5% or 16%, I think that can probably give you an indication how we move forward across over there. 40%-50% is what we're looking at year-on-year from here on now. Yeah. I mean, is there any sort of timeline which we can target? Because if you see the profit after tax, right, it is still lower as compared to the peers, right? I just had a query regarding that. See, right now, the cost of funds is still on an elevated level because we were still not past the first threshold of the INR 1,000 crores. I think the moment we do that, we'll have some of this thing. We just got our rating upgrade about a couple of months back. I think that is there. But I think moving forward, in the next three to five years, I think we'll probably be one of the largest in the rural space. That I can say for sure in the next three to five years in terms of housing finance. You're saying once we reach the INR 1,000 crore, I assume that's when we can expect some more for the housing finance. That's the first benchmark which everybody tries to look at, the first crossing of that INR 1,000 crore mark. Okay. We'll probably be doing it FY 2025. Right. And also, do we expect more provisioning in the upcoming quarters, or are we sufficiently covered for the rest of the year? As I see, I mean, we have sufficiently provisioned for this quarter. That's why the provision outlook is a bit. Given the overall credit cost guidance, we'll remain within that range and try to get better within that. We've talked about 4.5%-5% credit cost. We're trying to be better than that, but that is the guidance for the time being. Yeah. I also wanted to understand, RBI has some guidelines regarding the loan which we can provide to the customers, right, if they have one or more loans. I just wanted to understand, Satin is also trying to leverage its existing customers for the housing finance and MSME, right? Will this RBI rule have any bearing on that particular initiative? Or we can definitely tap the existing customers without bothering about the guidelines? I just wanted to understand. So our policy is very clear. One loan per customer. If there is a loan in a housing finance company, there will not be any other loan from either MSME or microfinance. So if you have a loan in microfinance, there will not be any other loan to that same customer from MSME and the thing. And this is something which we follow very diligently right from the start. Thank you. That's great. Thank you. Thank you, Thank you, sir, for coming. Thank you so much. Thank you. Next question is from the line of Rahul Mishra from RTL Investments. Please go ahead, sir. We again lost the connection from Mr. Rahul Mishra. Next question is from the line of Ashlesh Sonje from Kotak Securities. Please go ahead. Hi, team. Good evening. A few questions from my side. Firstly, sir, just regarding the entire asset quality situation in the MFI industry today, what is the kind of discussion that is currently ongoing, let's say, at the SRO level and at the RBI level? I understand that the guardrails have been largely implemented by everyone. But from both a near-term as well as a medium to longer-term perspective, what is the kind of discussion that is currently ongoing? See, I'll be very honest. We normally are not very, very—this thing. For us, our guardrails were implemented much before the SRO brought in. I think we look at our institution in a different fashion from what comes in. And I think the discussions which are going on between the other players and everybody, and in Sa-Dhan since I used to be in Sa-Dhan earlier, is that I think the guardrails have to be implemented by everyone. I think what you said is absolutely right. The guardrails have been implemented by everybody else, even the MFIs as well as, I think, by the banks and everyone. This is where things stand. The discussion is towards that we are able to look at maybe lesser of over-leveraging with our customers. That's probably the baseline effect. It pr obably should be followed and inspired by each and everyone. That is what the whole idea is all about. Understood, sir. Friend, so far, the regulator does not seem to have reacted to the situation. What is the kind of discussion that you and other players could be having with the regulator at this point in time on the asset quality situation? I think the regulator, this is probably not an answer which I can give you that what discussion we've had and everybody else is at. I think the guardrails were implemented by looking at the over-leveraging session. And I think probably I will not be able to give you an answer in terms of how we look at this thing. I think being a regulator, I think they have all the right and all the way to look at us and everybody else. I think that is a constant conversation which always goes on with the regulator from what we know. We have our regular inspections, regular conversations, everything. And I think that's the normal process which happens. Sure, sir. Friend, just lastly, can you just repeat the stage-wise coverage, provision coverage which you mentioned earlier in the call? I missed those numbers. Okay. Sure. For your benefit, please repeat it. Stage one, PD is about 43%. On stage two, between 31-60, it's about 68%. And 61-90, it is about 99%. And on all the surface stages, we have an LGD of about 62%. So your result will be roughly a product of the LGD and the PD in that case. Yeah. That's right. Perfect, sir. Thank you. Thank you. Ladies and gentlemen, we will take this as the last question for the day. I would now like to hand the conference over to the management for the closing comments. So hi, this is Aditi Singh. And I thank each one of you for taking out time and joining our call. And thank you for all the questions to put things in perspective. As mentioned in the opening remarks, we stand firm on the firm ground with all the process, technology, and the responsible lending practices in place. We have been very transparent in sharing all the updates with you. While you can refer to our investment collectors, should you want to discuss anything in detail offline, you can get in touch with me. My name is Aditi Singh. Or you can also get in touch with my colleague, Ms. Shweta Bansal from the investor relations team, for any further discussions. Our details are there on our website to follow. Thank you very much for taking time on a Friday evening. I'll say it once again. Thank you. Have a great weekend. Thank you. On behalf of Satin Creditcare Network Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.