Ladies and gentlemen, good day and welcome to SBFC Finance Limited Q3 FY25 earnings conference call hosted by ICICI Securities Limited. 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 the star, then zero on your touchtone phone. I now hand the conference over to Mr. Renish Bhuva from ICICI Securities Limited. Thank you, and over to you, sir. Yeah, thank you, Steve. Good morning, everyone. Welcome to SBFC Q3 FY25 earnings call on behalf of ICICI Securities. I would like to thank SBFC Finance team for giving us the opportunity to host this call. Today, we have with us the entire top management team of SBFC, represented by Mr. Aseem Dhru, Managing Director and CEO, Mr. Mahesh Dayani, Chief Executive Officer, Mr. Narayan Barasia, Chief Financial Officer, Mr. Pankaj Poddar, Chief Risk Officer, and Mr. Sanjay Agarwal, Chief Strategy Officer and Head IR. I will now hand over the call to Mr. Aseem Dhru for opening remarks, and then we'll open the floor for Q&A. Over to you, sir. Good morning, and thank you for your time, Mr. Renish. Morning. Since our roadshows and in every quarterly call thereafter, our guidance has been growth at 5-7% quarter on quarter, cost reduction of 50 basis points year on year, and credit cost in the region of 80-100 basis points. If you compare our December 2024 to that of December 2023, because it's a longish period to give you a full idea, and then I'll talk about the quarter, December 2024 to that of December 2023, our AUM has grown by 30% year on year, while core operating profit has grown much faster by 38% year on year. This was aided by increased operating efficiency because we have reduced our cost-to-income ratio from 45% to 40%. So overall, against an indicated 50 basis point reduction for the year in nine months, we have delivered about 68 basis points. As we continue to invest in growth, our costs will be stable this quarter, and we will aim for a further reduction of 50 basis points in the coming year. In a rising interest rate environment, our cost of funds has reduced by three basis points year on year, keeping our NIMs steady at 10.26%. The ROA has expanded from 4.31% to 4.49%, despite increase in leverage from 1.5 times debt equity to 1.84 times debt to equity. Credit cost has inched up from 83 basis points to 97 basis points during the year. ROEs have expanded by a full 200 basis points from 10.77% to 12.77%. In terms of quarter on quarter, we have grown within our guided range at 6%, with core operating profit also growing at 6%. Quarter on quarter yields have further expanded by 12 basis points to 17.81%, and with stable cost of funds, we have increased our spread to 8.43%. Credit cost marginally down quarter on quarter to 97 basis points and a flat cost-to-income ratio quarter on quarter. Bank finance is about 60% of our total liabilities, and as the year goes by, over the next financial year, this number will come to under 50%. In April 2024 call, we had called out that we would see the tides of the economy ebb, tightening liquidity and rising consumer leverage, and that the year is going to be a challenge on three fronts: growth, NIMs, and credit quality. The same was restated in the July and October calls too. When we called it out, we were the canary in the coal mine, a lone voice. Now, slowing consumption and elevated consumer leverage is common commentary and coffee table discussions. We are still a small company, and to that extent, the size of the economy and growth does not matter. We stay focused on execution and navigating the currents we find ourselves in. A year back, I said that the industry is too optimistic. Today, I say it has become too pessimistic. The truth is always somewhere in the middle. We continue with our guidance of 5%-7% quarter on quarter growth, annual reduction of operating cost by 50 basis points, and credit cost at the higher end of our guided range of 80-100 basis points. As always, we remain cautiously optimistic. With that, I hand it over to Narayan. Thank you, Aseem. Hi, good morning, everyone. Good morning, everyone. Thank you, Aseem. Our AUM for December 24 is INR 8,148 crores, with a growth of 30% on a YoY basis and 6% on a QoQ basis, with 99% of both being secured by properties and gold. This growth is in line with our guidance given earlier. We added about five branches during this quarter, and the total branch count now stands at 197 as of 31st December 2024. Our borrowing cost has remained stable at 9.31%. Given the tightness in the liquidity in the market, this is a good achievement. The yield and spread continues to remain stable at 17.81% and 8.5% respectively for the quarter. Our OPEX continues to reduce and is at 4.62% for the quarter due to improved operating leverage, which is again in line with our guidance of reducing OPEX as a percentage of AUM. Our return on average AUM for the quarter is 4.49%, with the return on average equity further improving to 12.75%. In terms of asset quality, our GNPA remains stable on a QoQ basis at 2.7%. Our 1+ DPD portfolio for secured MSME increased marginally to 6.52%. Our credit cost is at 0.97% for the quarter, again in line with the guidance. We remain healthy at a PCR of 40.2% as of December 2024. In terms of capital and return ratio, our capital adequacy ratio is at 38.2%. Tangible net worth is INR 2,820 crores as of December 24. We made profit of INR 88 crores for the quarter. We were reporting a profit growth of 38% on YoY basis and 5% on QoQ basis. Our nine-month profit for the year exceeded the 12-month profit of FY24. With this, we 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 their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nischint Chawathe from Kotak Institutional Equities. Please go ahead. Hi. Two, three questions from my side. One is, you kind of said that your yield on loans has gone up marginally, maybe around 12 basis points quarter on quarter. So just curious what is driving it, whether there is a change in the lending rates or the mix or what is it? And the second one is on gold loans. Your book is sort of flattish or probably gone down a little bit this quarter, despite the fact that there are a fair amount of tailwinds for gold loan companies. Hi, Mahesh. So, responding to your first question on the yields, so in the mix, any yields have largely been stable. So, the bump up that you see in the yields is largely on account of gold, which is coming. So, the yields on the gold portfolio have moved up to a consolidated level. The 12-13 basis points increase that you see is largely contributed from gold. That's one. Second, I guess quarter three, the growth in gold was relatively lower. Obviously, it was coming off from a higher base in Q2 and Q1. But the run rate that's been there in Q3, we expect that the same momentum of that run rate is going to continue in quarter four without compromising on the yield. Sure. Just extending the first question, what is your view on the pricing environment at this point of time? Do you see, with whatever is happening around, do you really see the rates going up? Or given the fact that we are kind of probably looking at a rate cut in the near future, you do kind of expect the rates to go down? We have seen competition tightening rates a little bit, so. I don't think the rates specifically on the gold are going to go up from where they are. The range is anything between 18%-21%. I guess that's going to be extremely range bound. There's very limited room that's going to be available to increase the pricing there. Maybe on the lower end, where probably the yields are in the range of 11, 12, or 13-odd%, maybe there's going to be some movement there. But the ones which are already priced in and fully priced in, I guess there's going to be very little headroom available. On the MSME side? On the MSME side, I guess we'll be largely stable. I don't think that there's opportunity to increase or increase up beyond from what we are already charging. Sure. And just one last one, if I can squeeze in. I believe you have been sort of tightening your screens. And so do we see the process further continuing, or do you think we are now done? And in that sense, maybe on a sequential of probably on an annual basis, we start seeing this investment's growth kind of leaping up from year on? So I would say that we've, so you're right. We've further tightened the screens. And as we reiterated in the last call, that obviously the login to disbursal numbers have been impacted because of it. But that's what we see on the ground, where on account of high leverage, probably we're not able to underwrite as much as we could. We expect this to continue and probably we'll be watchful for at least a quarter more before we slightly open the gate. Sure. And just sorry, just last one since you mentioned this. When you say higher leverage, how do you look at it? If you could kind of give some data point or a portfolio cut on how you have looked at high leverage and where you have cut the screens? Yeah. So Nischint, so our customers largely borrow against their property. So these are largely driven by institutions who lend to them against the property. But there are only one or two loans of probably at best two. What we meant is that the amount that they've already borrowed, in addition to the secured, is a little too high, which impacts their FOIR or their repayment capacity. So if we're not very comfortable on the amount that an individual is seeking, then we try and stay away because we feel that he is not going to be in a position to probably service the loans in the near future. So that's a cautious call. That's a pretty guarded call that we've taken. And this is something that probably we initiated almost three or four quarters back, and that probably also explains why the disbursals have been slowly inching up, despite the opportunity still existing. So we feel that we will probably wait for at least a quarter more before we actually go back and revisit the underwriting now. Quantitatively, it means that you've brought down your FOIR or something? Yes. Yes. Okay. Got it. Thank you very much and all the best. Thanks. Thank you. Participants who wish to ask a question may press star and one. Ladies and gentlemen, if you wish to ask questions of the management, you may press star and one at this time. The next question is from the line of Renish Bhuva from ICICI Securities. Please go ahead. Yeah. Hi, sir. So my question is on the, let's say, the current scenario in the small ticket LAP segment. So of course, you will be the first one to highlight that there are some sort of stress building up, or maybe customers are going through some sort of seasonal cash flow mismatch. So sir, where do we stand in terms of that cycle? Do you feel that things have started improving, or it's too early to call that we are, let's say, at the peak of the cycle? See, this is not. I mean, these are economic winds. They move the way they move. It is not about that all customers are in trouble or that there is a major crisis. It is just that a certain segment of customers have got overfunded by the industry, and those are the problems that are coming home to those, so at the very lower end of the spectrum, we are seeing the problem the highest, so when you are going at the lowest end of lending, that's when we are seeing the problem highest, which is why we have not gone below those ticket sizes of lending yet, and at the middle segment, you have to be watchful. There is nothing dramatically that is changing. We are financing bread-and-butter businesses. We are not financing manufacturing. We are not financing any exotic businesses. These are trade and services, basic B2C businesses. So you have to go borrower by borrower. So there are an equal number of good borrowers, but there are also some borrowers where, so it's the marginal increase that is actually what can cause the concern. So I mean, in a hundred, if you make two mistakes, it's okay. If you make five mistakes, then that becomes a lot. So those additional three is where the problem is. So you just have to be watchful. Nothing dramatically different. These cycles keep coming. I don't know if one has seen many, many cycles come and go. You just have to do the right thing and watch the winds and play accordingly. Got it. Got it. So nothing alarming as of now, at least in terms of cycle? You see, the problem is this only that we get either too enthusiastic or we get too pessimistic. This is our problem as a nation. We are emotional people, and also, three quarters back, I had a problem telling anybody that there is a problem. Nobody wanted to hear it, and now everybody's gone to the other extreme, saying the whole world is coming to an end. Arreh, baba, ऐसे बहुत साइकल आए, बहुत साइकल गए. You have to keep playing your game, and then some damage will come. You will take that damage and move on, and as long as you are delivering a profitable outcome, it's part of course. Got it, sir. Got it. And maybe just a bookkeeping question. So credit cost assumption, etc., will remain intact, right, sir? We are not changing any guidance. Got it, sir. Yeah. That's it from my side. Thank you, sir. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question is from the line of Mayank Mistry from JM Financial. Please go ahead. Hi, sir. So I wanted to know what would be our floating rate mix in the borrowing side. And secondly, I would like to know, I mean, since you have highlighted there are some of these threats building up in the small ticket SME segment. So I would like to know whether this is specific to a few regions, few geographies, or this is like a pan-India situation that we are seeing. So let me answer your first question. So we don't take interest rate risk. On the asset side, we have all the assets which are variable, floating rate. So on the liability side also, 99% of our loans are on a floating rate basis. Okay. And related to the geographical, I mean, the stress, whether it is concentrated to few geographies or how is it? I mean, how are you seeing the trend? So there is no geographical concentration. Some geographies here and there keep happening, but it's a general credit cycle, we would say, which we are watching and we'll manage it accordingly. Okay. Does that answer your question, Mr. Mayank? Yes, yes. Thank you. Thank you. The next question is from the line Hrishikesh Thakker from ValueQuest Investment Advisors. Please go ahead. Yeah. Thanks for the opportunity. Hrishikesh here from ValueQuest. My first question was on the moderation in OpEx. So obviously, you've been achieving the OpEx moderation target that you called out earlier. But does that at some point have a correlation with growth? And do you believe that in the interim with the challenges that we've seen, and this moderation in OpEx growth could slow down in the medium term? Obviously, next quarter you retain your guidance, but in medium-term growth, is there some implication of the OpEx slowdown? I think as a company, we started with a significantly higher OpEx to begin with. And I think now is the time where probably you'll see it's sliding down. But I think a couple of quarters back, the questions were as to why the OpEx was high. But thankfully, now the distribution is beginning to sweat, and that's how you see the OpEx moving down. What we've always guided is we will grow, we will consolidate, and we will grow again. Our guidance on adding 25-odd branches in a year continues intact, irrespective of the market, irrespective of the cycles. And that we feel is going to give you a good risk-adjusted return on an overall front. So if our guidance is anywhere between 5%-7% growth on an AUM and to deliver the required ROE, I feel a lot of those investments have already done it. Incrementally, these investments will continue to trickle in. The reason that you won't see the significant uptick in OpEx is largely because most of the heavy lifting on the high cost has already been done, and they were done upfront because you were laying distribution across the country in each of those states, which is extremely expensive. Now the incremental investments are more to do with spokes in smaller cities and in variable costs with respect to employees at the front end, so you won't see a significant OpEx getting added, so on a marginal costing basis, I feel that it's going to be a lot more creative, and that's the reason we said that we are more than confident of meeting our OpEx outcome without compromising on any of our AUM growth or credit cost outcome. Got it. My second question related to this was the new client addition in this quarter in particular seems to be slightly muted. Anything to lead into that number? No. So let me just put some probable numbers in perspective. As we had mentioned earlier, that we did tighten up our underwriting screens at the beginning of the year. So just to give you a sense that earlier, if I was originating close to around 100-odd customers, 50-odd customers would pass through the door. Now that numbers dropped to roughly around, say, 45 or below. And that's roughly a 5%-6% impact. We originate close to around 20,000-odd customers, and out of which probably currently 7,500 passed through the door, which is less than 40%. So if you just put your numbers and say that if you were to go back to our original numbers of efficiency of going back to 5% or 6%, that's like 1,000-odd customers, and average ticket size of INR 1,000,000 is almost INR 1,000,000,000 delta that you would otherwise get in a quarter. This we feel is a result of what is consciously by design being implemented at SBFC, as and when we feel a little confident that the market's beginning to open up or probably the credit risk is beginning to get a lot better, we will accelerate. So I think the good part for us is that we have all our ammunition ready. We have the distribution. We have the people on the ground. It's on us to decide how much do we want to accelerate without compromising on any of our other credit parameters. Got it. Final question was on this other income line item. So other income slowdown is on account of the slowdown in disbursement growth, or is there anything else? We have a business when we do servicing to institutions. There has been a slight slowdown in that income. So that is what we call an LMS fee income, a slight slowdown there. Other than that, as a percentage of disbursement, percentage of AUM, all other numbers remain the same. Got it. Thanks. Thank you a lot, and all the best. The next question is from the line of Mr. Nischint Chawathe from Kotak Institutional Equities. Please go ahead. Hi. This actually pertains to the liability side. What we can see is that there is a little bit of an inch up on liquid investments on balance sheet over the last one quarter. Apart from that, what we can see is that the share of bank borrowings is actually going up. Is it kind of some reading that probably we'll be a little bit more cautious on liquidity at this point of time? Yes. So I take this question. So listen, liquidity is certainly tight in the market. But the good thing is, and the MCLR is also going up, the good thing is we have been able to contain the cost of borrowing, right? We generally keep a liquidity buffer in a range. And so in September, it was slightly lower. In December, it's slightly higher, but it is still the same range where we maintain the liquidity. So liquidity is actually not very high. But yes, we continue to maintain a high liquidity given the tightness in the market. To your next question, whether the bank borrowing is going up, actually, no. So we are diversifying a lot. For instance, in this financial year, we added so if you compare the data versus March, you will actually realize the journey we are into in terms of diversification. We added a lot of money from NCD investors. We are now moving towards DFI, and you will very quickly hear that. So there's a diversification happening. As we go along, more and more diversification will happen. But as of now, if you look at all the bank borrowings we have, it is almost about some 60-odd%, including the FCNBs, etc., we borrowed from the banking system. So listen, the liquidity is the price of a good night's sleep. That's true. But you're not kind of. Don't let us be guilty there. Don't object to liquidity. That's a fair point. But you're not seeing any tightness by any of the banks in the banking sector? Anyway, tightness. Who's there? We are sitting on a large pipeline of approved credit. The problem is the rate of interest, so it takes us longer to arrive at an acceptable rate of interest rather than the absolute amount of liquidity. Sure. And what would be the difference in your average? You guys keep needling the banks and saying your net interest margin is falling for them. They keep needling us. Sure. What is the difference in incremental and weighted average cost of funds as we speak? So we are borrowing at the same average cost of borrowing what we are today. So our cost of borrowing, incremental cost of borrowing, and the weighted average cost of borrowing remain the same. The idea that the challenge is to really hold this at this price. That's true. So that's the reason you will see over the last three quarters, even though MCLRs, etc., would have gone up, the cost of borrowing remained the same or slightly coming down, so it's almost at the same level. Incremental cost of borrowing is the same. But having said that, it's going to be tough to hold. Okay. With the MCLRs going up. Yeah, yeah. Got it. Got it. Thank you very much. The next question is from the line of Himanshu Taluja from Aditya Birla Sun Life AMC. Please go ahead. Hi, sir. Thanks for the opportunity and congrats for the quarter and your elaborative commentary. And at least you would have whatever pushes the optimistic stance as well. So I have just a few questions. Firstly, in this environment, what growth do you envisage for FY26 where you see that FY26 can head towards from a growth standpoint? Second, from an industry-wide question, any particular sweet spot in ticket size where you are very comfortable to land in the current environment? And which ticket size where you think that there is an increased delinquency or any customer segment which is showing the vulnerability? Also in this, if you can add, what is your thoughts? Because although you don't do less than five lakh ticket size loans category, but any particular read-through for this ticket size, how that segment is behaving, less than five lakh? Last question is around what is your when you expect to reach the path of the 15% ROE, return on tangible equity, by when? Yeah, thanks. These are all my questions. From a growth perspective, I think we don't want to bore you, but nothing changes. We continue to maintain a 5%-7% even for the coming year as well, irrespective of how the cycles move. And that's a growth that we feel is comfortable both on. Deliver as a? Sorry, sorry, sorry. That's something that we feel is comfortable both on financial capital and human capital, and will give us the required outcomes in terms of profitability. I think your second question was related to the sweet spot on the ticket sizes. I think we lend out to customers where the pricing is anything between 12%-21%, and that's a large range of customers that we cover. In the current context, I think it's more to do between 11%-17% is what probably we're looking at. The lower end or the extreme low tickets is something that we're extremely watchful for. So we're soft-pedaling that particular segment. But as and when the market tends to open up, then probably we are going to start expanding there. But we've seen these cycles come in our professional careers over a longer period of time, and nothing lasts forever. So I guess that it's a quarter or a couple of quarters before it seasons in. Sir, any particular read-through for less than 5 lakh tickets, how that segment is behaving in the current times? That I don't think we'll be able to comment. That's not our domain. So we would have very little commentary to talk about that particular market. Sure, sure, sure. And lastly on the yeah, yeah. 15% ROE is what your question was. So what we are looking at is the last quarter of next financial year or the Q1 subsequent to that is where we will land at a 15% ROE, away from us. Sorry, I missed out. Sorry, I missed out. The last quarter of next financial year. Yes. Sure. Thanks a lot, sir. Thank you. The next question is from the line of Shailesh Kanani from Centrum Broking. Please go ahead. Good morning, sir, and thanks for the opportunity. Given the current situation and tightness in liquidity, how do you see evolving the competitive landscape in MSME financing? Is it being lower? Since we are at a strong footing vis-à-vis our peers, are we thinking to push our growth more and increase the market share? Anything on that front, sir? Strategies don't change, as far as what the wind changes. So we are doing nothing new. We are doing nothing different. We will keep doing what we are doing, the same ticket size, the same customer segment, and growing at the same pace of growth. So there is enough for us to do right there. We have enough challenges. There is also going to be a challenge to both maintain the profitability as well as maintain the credit quality. We have enough challenges. We will try our best to meet those challenges. There is nothing new that we would wish to do at this point of time. We just wish to keep steady. We have to deliver cost efficiencies. We have to deliver. We still have a long road to get to where we wish to see the organization at. We are still an early-stage organization. We are just not even seven years old. We have a long path, and we have to work hard to get to that path. So, nothing there. There is no great change. We will keep doing what we are doing and hopefully keep getting better at it with time. Any color on competition? Has it kind of subsided? How is it? No. Competition is always there. The shape and form keeps changing. Sometimes some players get active. Sometimes some players cool off. So competition in India is always there. And the segment that we are doing, technically, in financial services, there is no moat in any segment. So all players end up doing everything. It is just that the beauty of financial services is that everybody does the same thing, but they don't get the same results. So we have to just focus on our execution. And if we execute it right, we'll get the results. If we don't execute it right, we'll not get the results. Competition doesn't matter. We don't need competition really in the field as much. It is more a conceptual than thinking on Excel sheet. The reality is that we have to work hard to execute well on the ground. That's what our job is, and that's what we'll stay focused on. Fair enough. You have answered my second question, but still, any plans to enter into any other segment or increase the ticket size? As of now, it doesn't seem like, right? No. No. Okay. That's all from my side. Thanks a lot, sir. Best of luck. There's nothing really exciting that we have to say. We would hope to continue on our boring journey. Best of luck, sir. A reminder to all participants that you may press star and one to ask a question. The next question is from the line of Kunal Shah from Citigroup. Please go ahead. Yeah. Hi. So I joined the call late. So sorry if I'm being repetitive. But just one thing in terms of any of the segments wherein you would have made the credit filters slightly stronger. No doubt it's evolving based on the macro and the operating environment. But any changes either on the credit side, on the underwriting side, on the collection side that you would have maybe done over the past three to six months looking at the environment? Yeah. Yeah. So last two, three quarters, actually, we have been a little more cautious. Some underwriting parameters, which we can specifically say, but some underwriting parameters we have tightened around the eligibility and the onboarding so that we can take care of some of the emerging aspects, including the leverage aspects. So parameters around that, we have become a bit more cautious. And should that reflect in terms of the overall approval rates, what we are disbursing, and the files which we are evaluating or logging in? So is it very well reflective of that? And would it mean that maybe either we need to strive more to get a similar disbursement run rate, okay, or maybe we should be satisfied with a slightly lower growth? Yeah. So, hi, Kunal. So, I guess if I were to summarize the last three quarters, I think we did two, three things at the beginning of the financial year when we announced that we could probably see the orange lights or the green turning into orange. One was largely on the credit filter that Pankaj articulated. Then there were certain geographies that we had paused in some of the markets where we saw that the overall delinquency was moving up, independent of the SBFC's portfolio behaving. So that's something that we paused. Third, I guess we invested upfront a lot. Sorry? Sorry. These geographies would be? There's one state in the east and one state in the north. Okay. In some of these markets, we've decided to go a little slow. Also, in terms of our collections, infrastructure is something what we spend in during the course of the year. These were the conscious investments that we made. What I can tell you is from an overall login perspective, the logins, obviously, are a lot higher. As I had reiterated earlier, I'm not too sure whether you were there in the call then, but I was just giving a perspective that, obviously, what we were logging in earlier and what is going through the door is probably 6%-7% less. If you're originating close to around 20,000 applications in a quarter, 6% is roughly around, say, 1,200, around 1,000-1,200. That's a delta of almost INR 100-120 crores in a quarter. That's something that we feel could have been accommodated. We could have done it. But given the market, we're trying to leave that on the table, which is on account of either we feel the leverage is a little too high or the pricing probably is not to the effect that we would want. These are the kind of cycles where we feel that we've seen that in the past come through, but it's just a matter of a couple of quarters here or there before it just comes back to normal. What we remain committed is that we remain committed to investing in the businesses, investing in the distribution. As far as the catch-up to where probably the original metrics were, it's just a matter of time. Having said that, we are not changing any of the guidance. Our guidance for growth continues to be intact, irrespective of the cycles and irrespective of the outcomes that we see. Okay. And despite this, I think there are enough levers on the OpEx efficiency side, productivity side, wherein we are not worried even in terms of OpEx. So I think on the earlier question you answered that, still, you seem to be confident in terms of the cost ratios. So when we are seeing these investments being slightly stringent, I would say more volumes getting into the logins but not getting approved, still not impacting the cost ratios as such. So on a variable cost structure, part of that is funded. So that's not so much going to have a bearing on the overall structure. As I also covered earlier in the call, that most of the heavy fixed costs have already been accounted for, are already penciled in. Incremental costs are very, very marginal, which will literally have no bearing on the overall cost structure. Okay. And proportion of fixed vis-à-vis variable in the overall cost would be? You don't want the OpEx? Yeah. OpEx. Yeah. So, largely, everything is fixed, right? Because the rentals and the salaries, etc., of its nature. Volume is still low. Also in a way, it is variable because every front-end team gives us incremental business. For instance, when we added five branches, in a way, the cost of five branches is variable to the extent that these five branches give us more business, right? So in a way, everything is fixed, but yes, it's variable because it's about productivity at the end of the day. Okay. Okay. Yeah. Thank you. Thank you. The next question is from the line of Shweta from Elara. Please go ahead. Thank you, sir, for the opportunity. Sorry, even I joined late, so this might be a repeat question. So you mentioned that the mean range now, at least in near to medium term, would be around 11%-17%, average 20% plus on the higher side earlier. So do we change our credit cost targets going forward? Now, do you see the agreeable range could be closer to 1% or higher? One, in the near term, given the glitches currently in the system, and two, across cycles? Thank you. Yes. So what we've maintained on our credit cost outcomes has been 80-100 basis points. In the current cycle, we've been guiding that it's going to be towards the higher end, could be probably a 10 basis points here or there. But given the current cycle that we are in, we've adjusted our origination also accordingly. If we were not to adjust the origination accordingly, then probably these credit outcomes were difficult to achieve. When I maintained that our range is anything between 11%-17% is what we are currently focusing on. But your credit cost is on your overall portfolio. So currently, what we originate, the color of that portfolio comes in only with a lag. So it's a little difficult for us to juxtapose the credit cost in the next quarter versus what we are originating currently. But what we're currently doing is within will help us to be within a guided range of what we've been projecting of 80-100 basis points. Sure. That helps. Thank you. Thank you. The next question is from the line of Chintan Shah from ICICI Securities. Please go ahead. Yes, sir. Thank you for the opportunity and congratulations on the quarter. So just as you mentioned here, we have tightened the underwriting standard at the beginning of the year. So probably, would there be a case of relaxing the same, and how far that would be as of now? So what could be the triggers for relaxing those standards? So any thoughts there? Yeah. I think it's a little too early for us to say that we are going to be relaxing any of those parameters. The current trend, what we are seeing, doesn't seem to suggest that it's time as yet. So what we are going to be doing is going to be watching for another quarter before we revisit any of those filters that we've implemented. Okay. So the main parameter would be the consumer leverage factor. If that probably cools down a little bit, then there could be some relaxation. Is that correct or not? Yeah. I think there are multiple things. You could have a customer where the CIBIL score is upward of 700, but we feel that the leverage is high, the inquiries are high. The LTV is probably not to the acceptable level that we would want. I mean, there are multiple variables that go in before we actually take a call on the customer. So currently, we'd like to hold on to whatever filters that we've done. Maybe at the end of probably the next quarter call, we can give you an update as to how comfortable we are. But currently, the status quo remains. Sure. Sure. So secondly, so once the, as you told, the market opens, probably we could further accelerate on the growth momentum. So could there be a case also for an 8%-10% QOQ growth for some quarters, or we would restrict ourselves to 5%-7%? We will, as of now, commit ourselves to 5%-7%. We will see how probably the market opens up. Probably at that point of time, we can be in a better position to comment on it. But as of now, as what we see, our guidance remains the same. Sure. Sure. But in case the market opens up, so probably one or two quarters down the line, if we relax also underwriting standard, there could be a case for even higher growth than the guided one, right? Could be, but I'm not going to fall in for that as of now. Sure. Sure. Sure. Fair enough. Yeah. Thank you, sir. Yeah. That's it from my side. All the best. Thank you. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for their closing comments. So thank you. Thank you. That's it from our side. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.