Ladies and gentlemen, good day. Welcome to the Shriram Finance Limited Q1 FY 2024 earnings conference call. As a reminder, all participant lines will be in 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. I now hand the conference over to Mr. Umesh Revankar, Executive Vice Chairman. Thank you. Over to you, sir. Thank you. Good evening, friends, from India and Asia. A warm welcome to all of you who joined this call. Greetings also to those who have joined from the western part of the world. To present our Q1 earnings call today, I have with me Mr. Chakravarti, Managing Director, Joint Managing Directors, and CFO, Mr. Parag Sharma, and Joint Managing Directors, Mr. Sunder, Sridharan, Sudarshan, Nilesh, and Mr. Jilani. We also have with us Mr. Ravi Subramanian, MD, CEO of our subsidiary, Shriram Housing Finance Limited, and Sanjay Mundra, our Investor Relationships Head. Financial year 2024 is also when Shriram Group is celebrating our golden jubilee, so this is the 50th year of our existence. I take this opportunity to thank all of our group customers, investors, deposit holders, team members, and all other stakeholders for enabling our group to reach this milestone of 50 years of existence. Thank you very much. Coming to the economy, the performance of which is intertwined with our company's own performance, Indian economy grew at 7.2% in FY 2023, exceeding government's projection. India was the fastest growing major economy in the world, and this performance underscored the country's resilience compared to general slowdown in Europe and other parts of the world. The GDP growth outlook for FY 2024 is currently expected more than 6%. With good monsoon, well-contained inflation, increasing consumption would likely to boost the private CapEx. The government spend on logistic infrastructure would encourage international manufacturing to move to India, that means Indian economy is likely to exceed the expectation. On inflation, the CPI index has been reasonably benign in the first quarter of FY 2024. The month of April, it was 4.7, it is the lowest since October 2021, following month, May 2023, it came down further to 4.25. In the month of June, it went up to 4.81, still below the RBI's tolerance limit. The wholesale inflation was in negative territory throughout the first quarter. Meanwhile, RBI, in its MPC meeting, retained the repo rate at 6.5 and guided for the inflation for the FY 2024 at 5.1. We can expect the repo rate to remain at current level, if that is the overall guidance. On the rural economy, after having faced some headwinds in the last 18 odd months, mainly caused by the inflation and higher commodity prices, Indian rural economy appears to be doing well now. It has reflected in higher FMCG consumption, plus two-wheeler sales. The crop yields are up, the MPC prices are up, and therefore, the agricultural income and non-agricultural income seems to be helping the rural economy to revive. As of, the monsoon, southwest monsoon has recovered, has covered entire country, and we expect the kharif to be good. The kharif planting season is underway now. There is sufficient stocks of staple grains, which are wheat and rice, the procurement of which has helped the agri economy. While the official statistics on food grain production of FY 2022-2023 season, it's estimated to be 24 million tonnes, which is 2.5% higher than the previous year estimate. Also it represents record production levels for seventh year consecutively. Meanwhile, the government has set a target of 332 million food grain for this crop year, that is 2023-2024, that is July to June, which is 2.6% increase over previous year. Overall, Kharif crop has been sown in around 53.6 million hectares till of July 14, which is around 4.29% less than the previous year. By the end of this month, it is likely to cover that deficit. On GST collection, the Q1 2024 has seen a robust GST collection, and April 2023, we saw highest-ever GST collection of INR 1.87 lakh crore. The pace of GST collection continues into May with INR 1.57 lakh crore and June at INR 1.61 lakh crore. This helps the government's planned infrastructure spend. Now, coming to our auto industry. The automobile industry has largely been doing good, despite the fact that first quarter normally is a dull one. The commercial vehicle, the CV sales aggregated 217,046 units, compared to 224,488 units. Within CV, M&HCV, we saw a growth of 2.5% year-on-year. That is 77,774 versus 75,854. Meanwhile, LCV sales were slightly lower at 139,272, against 148,634 year ago. The passenger vehicle registered a growth of 9.4%, with 995,974 units, against 910,495 units previous year. Two-wheeler again has seen the growth with 11.2% in Q1 2024 versus Q1 FY 2023, which was 4,140,964 units compared to 3,724,533 units. Three-wheeler has seen the maximum growth of 89.4% growth, with 144,475 units against 76,793 units. Tractors have again seen a growth of 19.23 over the previous year, with 225,234 units against 188,903 units. The India's construction equipment industry turned out a best ever performance in FY 2023, with 26% year-on-year increase in sales, with 24,806 units being sold against 21,299 units. India, with this kind of consumption or the sales, is likely to become third largest market for construction equipment, overtaking Japan in 2024. On the other prominent loan product that Shriram Finance offers is MSME. India has estimated 63 million MSME units registered, and Shriram largely caters to micro and small, with average ticket size of around INR 1 million. With which the company has been nurturing for nearly two decades now, and wanting to scale it across the country with post-merger, with large number of branches and the network being there. The growth of formal retail credit demand in India is in upward trajectory overall, and we see lot of involvement happening from suburban and rural region also. The surge in demand is largely driven by digitally literate, tech-savvy, younger generation, who have embraced mobile technology for their daily transaction. Even the rural credit, which was dependent on local money lenders, now moving towards formal credit option, with JAM Trinity helping them to become part of digital economy. Recognizing this opportunity, we have forged a strategic collaboration with pioneering mobile payment platform, Paytm, to extend financial services across the nation. As a prominent player in delivering financial solution to unbanked population, this partnership holds immense significance for Shriram Finance. Being the largest retail NBFC in the country, this alliance will facilitate issuance of loans to credit-starved segment of the economy through few taps of smartphone. With this new digital alliance, the company aims to reduce downtime for customers seeking instant credit while retaining its position as trusted financial service partner. Paytm, a trailblazer in QR and mobile payment, has redefined the traditional loan distribution model with its focus on digital-first credit distribution, ensuring access to users at the last mile. By combining Paytm's extensive reach and technological infrastructure with Shriram Finance expertise in lending and underwriting, this partnership forms a potent force in financial services sector. With sourcing, distribution and servicing moving onto digital platform, the cost of borrowing would certainly get reduced to the customers over the period. This is going to be a game- changer for small enterprises in improving business margins, increasing sales and expanding their market. We also are happy to inform that the S&P International Rate Rating Agency upgraded our international ratings from BB- to BB. On merger synergies, the synergies arising out of last year's amalgamation of Shriram Transport Finance with Shriram City Union Finance, we continue to expand our product suite in our combined network of branches in Shriram Finance Limited. Process of two companies coming together and working has been relatively seamless, and year down road, it appears to all of us at Shriram Finance that it has always been one entity. I request my colleague, Mr. Chakravarti, to take over and run through the operational performance. Thank you. Thank you. Ladies and gentlemen, welcome to the earnings call for the first quarter of the new financial year. We have declared our results for the quarter earlier today, and I trust you have had the opportunity to pursue them and the related investor presentations, which are available on the website of the stock exchanges. Post the merger, which came into effect last year, our combined efforts are reflected in the results for the first quarter, and we hope it will only grow stronger progressively. The registered disbursements growth of 21.26% YoY, our disbursements in the first quarter aggregated to rupees 30,454.80 crores versus rupees 25,114.78 crores in Q1 FY 2023, and versus rupees 31,054.10 crore in Q4 FY 2023. Our assets under management as on June 30th 2023 has registered a growth of 18.56% over Q1 FY 2023 and of 4.46% over Q4 FY 2023. Our AUM stood at ₹ 1,93,214.67 crores, as against ₹ 1,62,970.04 crores a year ago, and ₹ 1,85,682.86 crores quarter ago. Our net interest income in Q1 FY 2024 registered a growth of 11.31% year-on-year to INR 4,435.27 crores in the quarter, as compared to INR 3,984.44 crores in Q1 FY 2023, and INR 4,445.89 crores in Q4 FY 2023. Our net interest margin was 8.32%, as against 8.12% in Q1 FY 2023, and 8.55% in Q4 FY 2023. We registered a PAT growth of 25.13% to INR 1,675.44 crores for the first quarter of FY 2024, as compared to INR 1,338.95 crores in Q1 FY 2023, and INR 1,308.31 crores in Q4 FY 2023. Our earnings per share for the quarter stood at INR 44.73, as against INR 35.76 in Q1 FY 2023, and INR 34.94 in Q4 FY 2023. On our asset quality, gross stage three in Q1 FY 2024 stood at 6.03%, and net stage three at 2.96%, as against 6.27% gross stage three and 3.32% net stage three in Q1 FY 2023, and 6.21% gross stage three and 3.19% net stage three in Q4 FY 2023. Our credit cost for Q1 FY 2024 stood at 1.62%, as against 2.34% for Q1 FY 2023, and 2.24% for Q4 FY 2023. Our cost income ratio was 27.29% in the first quarter, as against 23.18% in Q1 FY 2023. Our cost income ratio in Q4 FY 2023 was 28.29%. Regarding our subsidiary, Shriram Housing Finance, they have registered a disbursement growth of 139.42% over Q1 FY 2023. Disbursement in the first quarter of this year were INR 1,902.661 crores, as against INR 794.68 crores in Q1 FY 2023, and INR 1,301.13 crores in Q4 FY 2023. The AUM for Shriram Housing Finance as on thirtieth June 2023, has grown by 64.39% year-on-year to INR 9,539.20 crores, as against INR 5,802.64 crores in Q1 FY 2023, and INR 8,046.60 crores in Q4 FY 2023. The net interest income registered a growth of 41% in Q1 FY 2024 to ₹85.27 crores, as compared to ₹60.47 crores a year ago, ₹66.63 crores a quarter ago. Shriram Housing Finance registered a PAT growth of 51.07% to ₹45.64 crores as compared to ₹30.21 crores for Q1 FY 2023, ₹37.14 crores for Q4 FY 2023. The EPS stood at ₹1.40, against ₹0.93 in Q1 FY 2023, and against ₹1.14 in Q4 FY 2023. Their gross Stage 3 for the first quarter of this year stood at 1%, and net Stage 3 came in at 0.75%, as compared to gross Stage 3 at 1.56%, and net Stage 3 at 1.19% in Q1 FY 2023, and at 0.93% gross Stage 3, and 0.69% at net Stage 3 in Q4 FY 2023. I shall now request our Whole-time Director and CFO, Mr. Parag Sharma, to highlight the activities centered around raising of resources and credit rating upgrades, after which, our Joint Managing Director, Mr. Sundar, will brief you about our account, accounting, and other aspects. Thank you. Parag? Hello, everyone, I'm Parag. On the debt, we have total debt outstanding of INR 1,61,931 as of the June quarter, and the cost has gone up by around 7 basis points from 8.82% to 8.89%. We are maintaining diversity of liability sources with the retail deposit at around 24%, external commercial borrowing, both in the loan and bond format at close to 15%, the domestic capital market at 21%, bank borrowing at around 15%-25%, and securitization, which is done for priority sector assets, at around 15%. The liquidity is close to around INR 16,165 crores, and this will take care of our next three months of maturities, which is close to around INR 15,790 crores. We always had a policy of maintaining three months of liability repayment into liquid assets, and that continues to be there. The LCR ratio is at 202.83% versus 209% in the previous quarter. The debt to equity has slightly come down from 3.65 to 3.6. This is on account of utilization of the excess liquidity what we had. The ALM buckets continue to be positive, and up to one year bucket, the cumulative surplus will be in excess of ₹26,000 crore. We had taken an ECB loan of $200 million in the last quarter, through this is on the loan format through different banks. I hand over to Sunder for his comments now. Hello, everyone. The employee count as on June 30th, 2023 was 66,343, an increase of 2,291 compared to the March number. On the ECL provisioning, the Stage 1 PD was 8.05%, and the Stage 2 PD was 18.88%, and LGD was 42.32, as against the March number of 8.04 of Stage 1 PD, 18% of Stage 2 PD, and 42.27 of the LGD. We continue to hold a COVID provision. The amount as on June 30th was INR 1,008 crore, and as against an opening balance of INR 1,110, INR 1,107 crores. We had utilized INR 99 crores in the current quarter. That's it from me, and we would open the forum for questions. Thank you. Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Anyone who wish to ask a question may please press star and one at this time. The first question is from the line of Digant Haria from Green Edge Wealth. Please go ahead. Hi, congratulations on the good performance, and thanks for this opportunity. Two questions from my side. The first is a little on the recent performance that, let's see, our, you know, in the last 12 months, we have seen fast growth in, you know, the old scuffed portfolio, you know, which is the personal loans and MSME loans. These are typically, you know, these are higher-yielding loans, but still, you know, our margins this quarter has been under pressure. If you can just explain that, like, you know, it's from the borrowing cost side or what is it? It's a combination of both, on the yield as well as the cost. The interest cost has gone up marginally by around 7 basis point, and the yields have come down by 8 to 9 basis point, and that has caused the pressure on the NIM. Why would the yields come down? Because, you know, I see that there's a faster growth in the unsecured portfolio. Digant, I'm coming. I'm Chakravarti here. That's basically because in the last quarter, we have funded our. The share of our new vehicles have gone up. Funding of new vehicles has gone up. That has primarily led to both passenger and commercial vehicles has gone up, which has led to a slight compression in yield. Okay, okay. Okay, okay. Okay, perfect, perfect. That, that's helpful. Thank you. The second question is, you know, maybe to both of you, you know, Mr. Chakravarti and Revankar, that, let's see, when we look at, you know, this period of 2015 to 2020, you know, both Shriram Transport and SCUF (Shriram City Union Finance) had credits, credit costs in excess of 3%. If we look at the whole five, six-year bucket, I understand we are migrating from 180-day to 90-day, and there was IL&FS crisis, you know, economy itself was patchy. But, you know, what has changed, you know, internally that, you know, we are now so confident of 2% kind of a credit cost? Is it, you know, our collections, our credit writing, or is it just that, you know, the vehicle prices are so high that, you know, even if we have to repossess, we will not lose money? If there any qualitative color you can give on this particular question. Yeah. It's a combination of everything. One is the economy is really doing well, the vehicle utilization levels have gone up, and vehicle values or prices have gone up. All this matters a lot for the operators. When the vehicle prices go up, people will like to hold on to vehicle, not to default, because the moment they default, they lose the value of the vehicle, or rather, they lose the increased value of the vehicle. That's one thing primarily making them work little extra hard to retain the vehicle and operate. Second, their operating income has gone up. See, on an average, a vehicle used to operate around 19, 20 days earlier, in the best of the days, it used to work for 22-23 days in a month. Today, considerably, consistently in the last two years, you will see vehicles run around 25, 26 days in a month because there is a good utilization, good demand for the vehicles. The number of vehicles have not increased in the last three years, even in spite of the, you know, the economy growing, because the vehicle prices have gone up steeply by 25%-30%. Since the vehicle prices have gone up, the buying of a new vehicle has slowed down. That enabled us and also operator to use the existing vehicle for longer time and also with the best profitability. All this has helped. It is not only it is in the vehicle department, whether it's personal vehicle or passenger vehicle or commercial vehicle. Even in the business also, there is a significant improvement in the environment. Earlier, around 60%, 70% of our collection used to be in cash, where we have to go to customer and collect the cash. Last four, five years, the cash component has come down. Most of them are digital transaction. That saves a lot of time, and there is a substantial improvement in the productivity for both customer and the employee. That also helps the efficiency in the overall collection. All these things has really matters a lot. The credit cost, as you rightly put it, from the around 2%, 2.5% in the last couple of years back, it has come down below two. And we believe this will continue to remain, and I don't see any further deterioration, and it should below at 2% at any point of time. One is environment, one is vehicle prices being up, and the business overall operating levels have gone up. All this have resulted in this. Oh, perfect. Perfect. Thank you. That was, that was a detailed response. Just on the SCUF portfolio also, if you can just comment on the same, because SCUF was usually, you know, 3.5%-4% kind of credit costs in the past. If on the Shriram City Union Finance portfolio, also, you can give those comments. That portfolio, again, I was telling you, we were. You remember that we've been working on both credit and collections for a long, for a quite some time, and I think, plus, added to that, the economy doing well, has resulted in what you see. I think this is not a flash in the pan. It's work across probably about five, six years of hard work. Right. Of course, of course, sir. Just one more thing, if I can squeeze in that, you know, whenever the environment deteriorates next, you know, someday in the next seven, 10 years, it is going to deteriorate again. Those days, you know, we will have lesser credit costs than in the past because of all these operating efficiencies that you talked about. Exactly. Exactly. Perfect. Thank you so much for clarifying. All the best. That's it from my side. Thank you. A reminder to our participants, please press star and one to ask a question. The next question is from the line of Gaurav Kothari from Mirae Asset. Please go ahead. Gaurav, your line is unmuted. Yeah. Yeah. Hi, Am I audible? Yes, yes. Yeah. Hi, good evening, sir. Thanks for taking my question. Firstly, congratulations on, on the quarter. Just three questions from my side. First, I'm just extending the question asked by the previous participant. It is on the yield on loans. If I look at the mix, today, gold loan, you know, personal loan, MSME loan, all these are typically high-yielding loans. The share of these loans have been going up as the AUM mix is moving faster towards these loans. Going forward, sir, taking a slightly longer term view, maybe two, three years, what do you think would be the overall share of these products, gold, personal loan, and MSME, all of these combined? Today, it's about 20% of the overall AUM. I n two to three years, can we expect this to be at least 25, 26% of the overall loan? If that is the case, then, you know, structurally, don't you think we can have better yields on the overall portfolio? Yeah. See, as you rightly portray, there will be a small shift in the portfolio towards high yielding, naturally, the net interest margins will improve. We are aiming at around 8.5 level of net interest margin by the end of the last quarter. That is one. The one of the reason for the margin squeeze for this quarter was because normally during the end of financial year, that is March, the demand for new vehicle goes up. Many of our customers upgraded to new vehicles during the March and this quarter. What happens is, when the new vehicle component goes up, the margins are a little lower in the new vehicle. This normally, you will see the demand coming up in the March, April, May. These are the three months, normally, the new vehicle, new vehicle uptake is high for our customer. These are the two reasons, and as you rightly put it, by making a slight changes in the overall portfolio, we'll be able to improve our margins, as per the plan. Sure, sure. Thanks. On AUM growth, you know, this quarter, we grew 19% YoY. Year overall guidance has been 15%. There is also, a tie-up that you have done with, you know, fintechs, and you plan to do more tie-ups, in the near term. Taking that cue and, you know, given that the growth and overall demand has been strong, do you see, you know, upgrading your guidance of 15% AUM growth? See, as of now, we will stick to 15% guidance, but coming to the end of the second quarter, we'll be able to clearly say what's likely growth for the full year. Because we would like to see the monsoon coverage fully and see how the rural economy shapes up, and that will help us to give a concrete number. As you indicated, this 18%, 19% is something in the first quarter is a good sign, and we can expect these numbers to be maintained for the full year. Understood. Understood. Sir, in that, the fintech partnerships that you'll be doing, any sort of cap that you would have internally decided, what% of AUM would be, you know, attributable to these fintech? What% of your AUM can be, you know, sourced from these fintech? Any sort of cap or any sort of number that you have in mind? Right now, we are looking at around 5% of the total AUM, so that should be the target. We will be growing very slowly there. We are not in a hurry to grow because we have the branch network reach, and this will be a additional sourcing for us. Plus, we'll be combining both to see that we are most very effective in our disbursement and collection. Because for us, the relationship and collection matters much more than the sourcing. This will help us to reach out to new set of our customers who are young, who are tech-savvy, and who like to do business on digital mode. Sure, sure. Understood. On the cost, coming to cost, you know, this quarter, cost to income was slightly elevated at 30% versus your guidance of 27%-28% kind of cost to income steady state. On a full year basis, do you see any risk to that 27%-28% cost to income guidance, or you believe we can still achieve 28% kind of cost to income ratio for full year? Yeah, we should be around 27%, 28%. I think we are very confident of managing it within that level. Sure. Just last question, if I may squeeze in. If I look at the subsidiary, Shriram Housing, I mean, very strong performance in this quarter. AUM growth was 18% QoQ, even margin expanded by 130 basis points sequentially. Just wanted some color around, you know, where the growth is coming from. I see the share of LAP has gone up. Any sort of color that you'd like to give on this portfolio? Secondly, if I look at the capital position, clearly it has, you know, it's just a shade over 20% on the capital adequacy front. Do you see any capital raise in the subsidiary in this financial year? Whether it will be Shriram Finance who will put in the capital, or you're looking for some strategic partners there? Hi, this is Ravi Subramanian here. As far as the split of growth is concerned, given that we are governed by NHB, there are certain, there's a certain mix that we have to maintain between HL and LAP to maintain our principal risk criteria. Any origination that we do will actually be in line with that. We built a new team this quarter, and that's the reason why you see the origination of LAP going up slightly higher than normal. That will stabilize, and home loan will stay in the 62%-65% range for us going forward. As far as the capital position is concerned, I think statutorily, we're required to be somewhere around 15% capital adequacy. We are still 7.5% away from that. As a subsidiary of a large NBFC, I think we are in a reasonably strong position to capitalize as and when required. At this point in time, I don't see too much of a stress on that point at all. Okay, understood. On the profitability, you know, the ROA for the subsidy was at 2.2%. Steady state, what is the ROA and ROE you're looking at, let's say, by the end of this year? For the subsidiary, given the leverage is high, my ROAs should be somewhere in the region of about 2.75 to 2.8 on a steady-state basis. At the leverage levels that I am at right now, I think we would be for the full year at FY 2024, we would be somewhere around 15.5% in terms of an ROE. Because we're also investing heavily in growth, as a result of that, we'll be at about 15.5% ROE. The benefits of this growth will actually come in FY 2025. Understood. Great. Great. Congratulations again, and thanks for taking my question. Thank you. Thank you. Next question is from the line of Raghav Garg from Ambit Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. Sir, when I look at the overall auto portfolio of CV, passenger vehicles, construction equipment, all of this cumulatively, that portfolio has grown by about 16%. This is, while it's good on a standalone basis, but when we compare to peers, you know, the growth is lower. What would be the reason why, you know, we've been lagging last years in terms of the overall growth as far as the auto finance portfolio is concerned? Should I take up my other question right now, or should we go one by one? See, as far as the growth is concerned, please understand, and appreciate that, we are fairly large. If you add our commercial vehicle and passenger vehicle put together, we are INR 1,32,000 crore. Our growth rate, will be definitely, you know, it cannot be compared with the smaller companies' growth rate because of the sheer denominator. Overall increase in AUM, we will be still, one of the highest, is what I believe. Sure, sir. Sir, another thing which I wanted to ask is: You've been pointing out since a few quarters that the vehicle prices, especially in the, used vehicle market, have, gone up quite a bit, maybe in the range of 15%, 20%, even 25%. You know, what I wanted to understand is that, what is the growth in the number of vehicles that you would have financed in, say, Q1 or maybe even last year? Is there a growth in the number of vehicles financed by you? Number-wise, it is around 6%-7% growth would be there, and rest is because of the value growth. Sure, sir. Thank you. Sir, my last question is, one of the large NBFCs, you know, just yesterday highlighted some bit of caution on the rural personal loans. Since you are, you know, present, in that, business, segment, you know, or at least, geographically, your presence is there, what is your sense about whether there's stress in the rural segments or not, and, you know, the kind of leverage levels that they have, and whether, you know, if it is prudent to continue to lend to them, and grow at the rate which we are growing in the personal loan segment? That will be also my side. Thank you. Yeah. Hi, this is Chakravarti. The entire personal loan book, you see that is there, totally consists of our existing customers, right? Number one. Number two, majority of these customers are, I mean, 100% of these customers are our two-wheeler customers, where either they would have completed 75% of their existing two-wheeler loan or and above. Basically, tenor would have been completed, and we would have offered them a personal loan. Two things we must note here is that our two-wheeler portfolio, close to 70%, is semi-urban and rural, as you pointed out. Again, about 70% of them have no prior credit history, that is, they have minus one score. Their ability to leverage outside is very limited, and we do offer them credit basing on their performance on their loan performance. We are not too. To be honest with you, I'm not worried about any stress on this portfolio. In fact, I'm very, very positive on this personal loan portfolio. We also make sure that the EMI for the customer does not cross the two-wheeler EMI that he was paying us. We do take precautions before lending. It's not just that it's a blind lending. Since they are all proven customer base, I don't find a reason to worry about this portfolio at all. Sure. Thank you, sir. What I see is that in the personal loan segment, the, I think the gross stage three may have gone up a little bit. Yeah. -5.53 in the last quarter, gone up 5.6, and that too, you know, we've seen a decent amount of growth in this quarter. But you're saying there is nothing. Yeah really to worry about here? Nothing to worry about. Sure. Probably because it's a seasonally quarter, that could be one explanation, right? Yeah, even, see, it keeps up, the small bumps happen. It's not something that we really need to worry, that the portfolio is about the portfolio. Sure, sir. Thank you, doctor. Thank you. Thank you. Thank you. The next question is from the line of Bunty Chawla from IDBI. Please go ahead. Thank you, sir. Thank you for giving me the opportunity. Actually, I've joined late, so sorry for if I'm being repetitive. As you said, there has been a increase in the cost of fund by 7 bits. How one should see this cost of fund moving in next two quarters, and respectively, what will be the impact on the margins and margin guidance impact for the full year FY 2024? This was my first question. Okay, the cost is concerned, there could be some increase in the subsequent quarters. I don't expect any significant increase in cost. Margins, as indicated, we are looking at the asset mix and looking at a better net interest margin in subsequent quarters. We'll be able to pass on whatever additional cost will be there. I don't expect any significant increase in the cost of liability. Can we say 8.3% could be sustainable for next two quarters, next two quarters? Until and unless there is some market event, some regulatory changes, I don't expect cost to go up. It should be in the same range. Expectation. Okay. Sir, my second question is, are you seeing any impact on the asset quality? As sir said about the rains, we are seeing some flooding in few of the states. Any negative impact on the asset quality front because of that reason? If you look at the monsoon season, every year there will be some geography which will be flooded and some geography where the rain is deficient. It's both is there. As if it averages out across, I don't see any reason to be alarmed at this stage. The loss of property or the discomfort on transportation has not been seen anywhere. We have not got any report on such big excesses. I don't really see any challenge. Some of the, you would have seen some either video clipping or maybe news where larger cities like Delhi or maybe Hyderabad flooded, and that doesn't impact overall business or transportation. Okay, sir. Thank you. Thank you very much. Thank you. The next question is from the line of Uday Pai from Investec. Please go ahead. Hello. Thank you for the opportunity. I just wanted to discuss. Please use the handset. Your voice is echoing. Hello, is it clear now? Yeah, disbursement for the quarter is INR 30,454 crore. Your voice is totally doubled. Thank you. The next question is from the line of Harsh from Flute Aura. Please go ahead. Hello, sir. You have given us the guidance for cost to income ratio already, and a steady state margin you would be maintaining around 27%-28%. When I see the breakup of other costs, the OpEx costs and the employee expenses, they are somewhat like fluctuating in every quarter. Can you also provide some guidance on these cost numbers? The current quarter, the employee costs have gone up by INR 100 crore, close to INR 790 crore, primarily because of the revision that we did for the employees. There was rationalization of salary across both the companies at certain levels, and that has impacted the staff cost. This will continue because it's a permanent increase, and hence this trend should continue for the future also. Coming to the other point that you have raised regarding the other operating expenses, it is more or less similar to the previous quarter, except that previous quarter we had taken in one-time, or rather, the hit of INR 302 crore on account of the impairment of intangibles, which was for the entire year. Current quarter, we have taken INR 75 crore, which is for a single quarter. Okay, sir. In terms of steady-state basis, going forward, as you mentioned, the costs would continue on this level. What would be our expectation in terms of ROE? What% are we targeting? The ROE should be anywhere between 15%-16% for the entire year, yeah, full year. On midterm basis, if we look at for maybe two or three years. Sorry, you're not audible. Can you please use the handset and come to the point? Yes, pardon. I was asking for midterm ROE, what targets are we looking at? See, for, we are aiming at 16% ROE at the end of the year, so cannot, midterm, cannot say, but, that's the target we have kept ourselves. Okay, sir. Thank you. Thank you. The next question is from the line of Chandrasekhar Sridhar from Fidelity International. Please go ahead. Hi, a question for Mr. Chakravarti. Where are we adding all of these employees? The employee count is up pretty substantially. Just maybe, if you spend some time on that. During the merger, you know, we had announced that with the salary rationalization between Staff and Shriram Transport was a INR 68 crore difference. I mean, from looking at the numbers now, it seems that just the salary rationalization looks to be a very large number. Maybe just, if you could help me on that. Couple of questions for Mr. Sunder. One is, the tax rate now is sorted the issues. I mean, we worked with, like, a 25% tax rate. Second is just from the annual report. You know, all along, the investment in subsidiary, which is largely Shriram Housing, was reflecting at INR 650 crore. I see this quarter that, you know, and in your published numbers, it's gone up to INR 1,500 crore, so investment in subsidiaries. Maybe just help me understand, you know, what's resulting in this increase in the investment in subsidiaries? The investment in subsidiary, which has been quoted as INR 1,500 crores, is on account of the fair valuation which we had done at the time of merger. Hence, the INR 1,500 crores has been arrived. Coming to the staff cost, what we had earlier guided of around INR 60-65 crores, but this INR 100 crores hit also includes the normal increment to all the employees on an which is done on a yearly basis. Added to that, there has been an increase of around 2,000 odd crore employees in the previous quarter as well as in the current quarter, that also has an impact on the staff cost. The other question now? Where are we adding the employees? All the employees are basically, the rationalization, all has happened only in this quarter? Correct. Correct. All the- Along with the increment exercise, we did the rationalization exercise, Chandra. Where these employees are getting added mostly in the erstwhile commercial vehicle branches, where we are introducing gold loans, two-wheeler loans, and SME loans. It's almost across the country, not specific to a geography. Thanks. My understanding was there are only 100 Shriram Transport branches something, so they're on the ground floor, so there was limited capability to add people for gold loans, I think, over there. No, not 100. I mean, ground floor and first floor are okay. We have added, for, as of yesterday, we have added 498 commercial vehicle branches to gold loan. what's the total number of branches where you're doing gold loans now? This is 498 of commercial vehicle and, close to about, 1,000. INR 100. INR 1,000 INR 100. So it should be around INR 1,580. Yes. 1,500 combined. Okay. All right. Thank you. Sorry, on the tax rate? tax rate will continue at 25%. Okay, fine. Thank you. Thank you. The next question is from the line of Sameer Bhise from JM Financial. Please go ahead. Yeah, hi. Thanks for the opportunity, and congrats on the good quarter. The LCR is around 200%. Is this a desirable level, or how does it move going forward? Okay. Regulatory requirement, what we are saying is right, it is much lower, but since we always used to maintain higher liquidity, the LCR is looking at 200 odd%. Desirable level, I think, one, we will continue to maintain that liquidity of three months' repayment. That we're not going to value. Based on the larger, like, overall, size, it can be in the region of 150-200, but it will be definitely be much above than the regulatory requirement of 100%. Fair enough. That is helpful. Secondly, on this whole, product-wise, provisioning, do you want to keep a higher statutory coverage on the personal loan as a product? I see it is at 47% rightly. Yeah, the provision is done around ECL methodology, and we go based on whatever comes out based on the last five years' data. As of now, it is at 47%. Rightly said, yeah, because the other areas it is high. We will- We will bring it above 50% maybe in the next couple of quarters. Okay. That's all from my side. Thank you, sir, and all the best. The person you are speaking with has put your call on. The next question is from the line of Kunal Shah from Citigroup. Please go ahead. Yes, sir, thanks for the opportunity. Just coming back to the cost of fund again, so you were saying that going forward, we can expect some cost of fund increase, but not material. Should we expect the quarterly cost of fund increase to be smaller than what we have seen this quarter, or is there a right way to understand it? Yeah, we don't expect the cost of fund to go up. We should be able to maintain the cost of the book at the current level. That is what we are indicating. The incremental cost of fund is definitely not up, that is the reason which gives us confidence that the overall cost should not go up any further. Even if it goes up, it can be, it will be very, very marginal. Our back book is entirely, almost all repriced already by now? Yes. To the front book. Correct. Okay, got it. Thanks so much. That's all from me. Thank you. The next question is from the line of Manoj Baheti from YES Securities. Please go ahead. Yes, sir. Hi, this is Rajiv here. Just one question on value growth in vehicle finance, both in CV financing and vehicle and your 2W financing. We have seen significant value growth in the last two years. How, how much do you see value growth helping us in a year growth in the current year? The value growth now will be little lower year-on-year. Whatever increase was there, because moving from BS4 to BS6, there was a technology upgradation and value growth was there. Even this year, what happened is, there was BS6 Phase II. That's some more increased emission norms. That also helped the vehicle prices to go up by around 3%. Last three years, there is a continuous value growth, and it may be slowing down from the next year. Therefore, the ticket size may not be growing at the same level, but the number of vehicles probably will go up as we get into deeper pockets. We should be able to overall maintain what has been given the guidance of 12% growth in the CV portfolio. Got it, sir. Thank you so much. Thank you. The next question is from the line of Punit from Macquarie. Please go ahead. Yeah. Hello, am I audible? Yes. Yeah. I just wanted to confirm one thing. You said that your cost of funds was up 7 basis points and the yields declined 8 basis points, right? If I'm right. Or was the number different? Yeah, the cost of funds increased by 7 basis point, and yields came down by 8 basis point. 8 basis points, Okay. Okay, sir. That is it from my side. Thank you. Thank you. Next question is from Gaurav Sharma, from HSBC Securities. Please go ahead. Hello, sir, am I audible? Yeah. Yes, please. Yeah. Just a small data-getting question. Can you please provide the segmental breakup of disbursement in quarter one? Okay. Let me give it to offline. Yeah, I'll give you offline. Yeah, I'll give you offline. Yeah, you can contact Mundra; he will help you out. Okay, sure. Thank you. That's it from us. Thank you. The next question is from the line of Amit Jain from Axis Capital. Please go ahead. Yeah. Hi, sir. Thanks for taking my question. Sir, just wanted to know your thoughts on the MSME and the two-wheeler segment. Was it growing? Any challenges you see in terms of asset quality or the pain is behind? How do you see the growth planning in these two segments, sir? I don't see any worry about asset quality. In fact, honestly, I think we are seeing, I mean, one of the best periods for me, actually, one of the best periods of asset quality in both the segments. As far as business growth is concerned, in two-wheeler, we expect a growth of about. The OEMs are expecting a growth of anywhere between 10%-12% this year. And if it grows at 10%-12%, we are sure that our portfolio will grow upwards of 15%+. In fact, after a long, long time, we have crossed a disbursement of more than 106,000 two-wheeler in the month of June. It looks like good. There is also... I mean, the known fact is that there is also serious competition in the market, I mean, in the two-wheeler space. Let us see how it goes. We are confident that on the growth of both MSME and two-wheeler. Sure, sir, this is helpful. Thank you. Thank you. Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference back to Mr. Umesh Revankar for closing comments. Thank you. Over to you, sir. Thank you all for joining the call. As some of you said, it's one of the good quarter, especially being the first quarter, which is a little challenging. It's a good quarter for us. The indication of the growth is the indication for the full year. As we discussed, we'll definitely work on improving the margins, and we will come out with better numbers coming quarters. Thank you. Good day, good health, good night. Thank you very much. Ladies and gentlemen, on behalf of Shriram Finance Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.