Ladies and gentlemen, good day. Welcome to the Tata Capital Q1 FY 2027 Results Media Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touch-tone phone. I now hand the conference over to Mr. Rajiv Sabharwal, managing director and CEO of Tata Capital. Thank you. Over to you, sir. Thank you very much. Welcome to everyone who's joining the call. Good evening. Thank you for joining us. Let me start with the macro environment. FY 2026 was a strong year for the Indian economy, with the real GDP growth at 7.7%, supported by strong domestic consumption and investment activity. Credit demand continued to remain healthy in the first quarter of FY 2027 across both banking and non-banking channels, reflecting a sustained underlying economic momentum. While inflation has remained broadly manageable, we continue to monitor movements in food prices, rural demand trends, and the evolving geopolitical environment. On the monetary policy front, RBI maintains its policy rate and continues to support liquidity conditions, helping sustain credit growth across the financial system. Looking ahead, while global uncertainties and elevated energy prices could moderate growth for FY 2026 from a high base, India's underlying macroeconomic fundamentals continue to remain strong, supported by healthy domestic demand and investment activity. We remain watchful of geopolitical developments, inflationary trends, and monsoon-related risks. We continue to see a broadly supportive environment for credit growth. Before I dive into the operating performance for the quarter, let me share two key developments. First, our entry into the gold loan business marks an important step in further diversifying Tata Capital's retail lending portfolio. We believe the combination of Yog Loans' domestic expertise and branch network with Tata Capital's brand technology and risk management capabilities will help create a compelling platform for future growth in secured lending. Secondly, we also successfully raised $400 million through an international bond issuance that was oversubscribed four times. The strong response from global investors reflects confidence in Tata Capital's franchise and further strengthens our diversified funding platform and access to international capital markets. Now let me turn to the key highlights for the quarter. Consolidated performance. Our assets under management stood at INR 291,000 crore, up 22% year-over-year and up 5% sequentially. If I exclude motor finance business, which we acquired from Tata Motors, our AUM grew by 28% year-over-year. Credit costs for Q1 FY 2027 were 1% versus 1.6% for Q1 FY 2026. That's a significant drop. Profit after tax for the quarter stood at INR 1,547 crore, up 56% year-over-year and 3% sequentially. Our net NPA declined by 10 basis points sequentially to 0.8%. Our ROA stood at 2.3% consolidated, including the motor finance business. If I exclude the motor finance business, which we acquired from Tata Motors, our ROA stands at 2.5%. Tata Capital Housing Finance c ontinued to perform extremely well for us. Their AUM increased 24% year-on-year to INR 89,416 crores. Our credit costs continue to be very low in this business at 0.05%. Profit after tax for the quarter was up 29% year-on-year to INR 532 crores. Our focus on affordable housing and loans against property continues to support margin expansion and portfolio diversification. Overall business momentum remained strong during the quarter, supported by healthy growth across all businesses. Our core focus remains retail and SME lending, which together constitute 85.4% of our portfolio, providing a structurally granular and resilient growth profile. We expanded our distribution network to 1,491 branches across 1,091 locations, serving approximately 8.8 million customers through our physical model and deepening our presence across India. Our AAA credit rating continues to support a diversified and stable funding profile. Total borrowings stood at approximately INR 245,000 crores, while we maintained a strong liquidity buffer of around INR 29,000 crores. In quarter one, our cost of funds stood at 7.28%. Despite a marginal increase in funding costs during the quarter, we remain well positioned to support growth while navigating market volatility. For quarter one of FY 2027, our cost to income stood at 36.4%, showing an improvement of 190 basis points over quarter four of FY 2026. Artificial intelligence is increasingly driving scale and efficiency across Tata Capital. From 98% digital onboarding and AI-led underwriting to 40% productivity gains in operations and stronger collection outcomes, our AI initiatives are enhancing customer experience, operational excellence, and risk management across the franchise. We have seen not only the deployment of AI but also the benefits of AI accruing to us. The transformation of our motor finance business remains on track. We continue to focus on portfolio diversification, disciplined growth, and operational efficiency while maintaining profitability and stable asset quality. Our focus on motor finance remains on creating a portfolio that we do believe can stand the test of time. So our focus continues to be on building a portfolio that, on this parameter, would remain good at all times. To conclude, we remain focused on building a larger, stronger, and more resilient financial services franchise supported by healthy business momentum, improving asset quality, and a robust balance sheet. Along with a diversified funding profile, we continue to invest in technology and AI. We do believe we are well-positioned to deliver sustainable growth and create long-term value for all our shareholders. With that, we are happy to open the floor for questions. Sure. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star one on your touch-tone telephone. If you wish to remove yourself from the question queue, press star two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star one. The first question is from Shrishti Sharma from ETBFSI. Please go ahead. Thank you. Good evening, everyone. Mr. Sabharwal, I'll start off the question with the acquisition of Yog Loans. If you could elaborate more on the strategy and what kind of AUM you are looking forward to on a two- to three-year basis. Two more questions to add on. Since you've spoken about artificial intelligence, your peers are also very bullish about AI and then also the investor presentation, in fact. What kind of operational cost difference do you see in the AI usage? Thirdly, on the co-lending market, how has the market been since the new norms have been made effective from the 1st of January? How active are you in co-lending? Are you seeing more partnerships coming up for you? Thank you. Thank you, Shrishti. Yog loans are a very large market, and we've been looking at this market very carefully. We are happy that we could make an entry through this acquisition. It's a small company, but it is very good, and it comes with not only a portfolio but also expertise, which is there. We also have organically started building our strategy for growing the Yog loans business. While we have applied to RBI and are seeking their approval for acquisition of this entity, we expect the approvals to come towards the end of this calendar year. From the time we acquire, over the next two and a half to three years, we expect to add close to about +500 branches and build a portfolio of approximately INR 4,000 crores-INR 5,000 crores over the next three years. Sure. The other two on AI and co-lending, please. Yeah. Sorry. The other question on AI: we are extremely bullish on the use of technology. We've always been among the first users or early adopters of anything new which is coming in. In AI also, we have done the same. We've been working on this. If you would notice, we are already seeing the benefits of the same, which are growing. If you've seen our investor presentation, the number of people whom we have added is very small compared to our AUM growth, which we have seen in our business. The benefits, which accrue to us on many parameters, whether it is in terms of cost of doing business, in terms of faster acquisition, or ability to cross-sell better. All of these would be benefits that will be coming to us. If you notice, our cost to average assets stands out as amongst the best in the industry; we expect further improvement over the next two years of close to 10 to 15 basis points on ROA because of the use of these technologies. As far as co-lending is concerned, we are not significant players in this market. While we are talking to a few partners with whom we would source for us, and we would have the larger portion of the book on us. These still are early times, and we still are small in this space. Most of our business, if you were to see our investor presentation, has been built organically. 99% of our book has been built organically. Okay. Since you have said you have not hired as much because of artificial intelligence, how much of a difference has AI made to your hiring if you have certain manpower to give to it? In what kind of roles is it that you're not hiring? If you would look at our manpower numbers, the addition to manpower last year is just about slightly less than 5% of our total workforce. Where largely we are adding people is only in front-end sales and collections. These are the two areas that we are adding. On all other places, we are able to see a more significant advantage of AI coming in. It's making the processes faster and more error-free, I would say. Okay, sure. Thank you. I found that. Thank you. Before we take the next question, a request to participants: please limit your questions to two per participant. For follow-up questions, we request you to rejoin the queue. We take the next question from Subhana Shaikh from Mint. Please go ahead. Hi, sir. Good evening. Sir, I wanted to ask, as you've acquired the gold loan business, last year itself, the RBI revised its guidelines on gold loans, which came into effect this year. I wanted to ask, do you have any concerns you see on income-generating versus consumption-generating loans and the overlap on personal loans, given that you've entered the gold loan business? Actually, these are two distinct markets. We do believe that both of these markets are pretty large markets, personal loans as well as gold loans, and they serve two different segments. We do believe that the opportunity for us to grow exists in both of them. We've always been a compliant organization on all RBI regulations, and we will continue to do so. I think what RBI has done is created two distinct segments. It is trying to approach them in the correct way in terms of what LTVs you can give and on what repayment structures you can have. We have planned our products keeping that in mind. Our effort would be to look at growth in each of these segments. We believe that this actually makes the market more organized and helps us with better risk management. Would you be cautious in giving out loans to that consumption-generating category because of concerns around over-leveraging? If you had tracked us, you would have seen us, that we're a conservative organization. We try to understand each segment before we start growing it aggressively, and our strategy here will also remain the same. In the two segments, we would look at what leverage the customer is at, but it will also depend on the collateral being offered to us. We will also watch out for the trends on worldwide movements and keep all of that in mind while we grow our portfolio. We should remember that this is a secured asset class with extremely low credit cost. Our focus would be to use more technology in both distribution and in terms of how we manage our operational risk. Okay. Thank you, sir. Thank you. The next question is from Ram Kumar from Business Line. Please go ahead. Hello? Hello. Just wanted to understand the breakup of your loan book in terms of retail, SME, and others. Once you get this gold loan company on board, how will the complexion of the loans change, actually, within retail? Thanks, Ram. We've stated before also that our retail plus SME will constitute between 85% and 88% of our book. That is the range it will move in. There could be certain quarters in which it will be more towards 87%, 88%. In some quarters, it may go down to 86%. It will remain within that range of 85%-88%. With the addition of gold loan business, we expect within the retail and SME proportion, the retail proportion to start increasing. On an overall retail plus SME range, it will remain between 85%-88%. Already Tata Capital Housing Finance is a large company in terms of AUM, actually. When will the time be right for you to actually unlock value in the company in terms of monetizing it? At the board, we do discuss this, but we've not made any decision on this. We will wait for RBI directions when they do place us in the upper layer. From that time, they do give us about three years to make such a decision of when to list or when not to list. We will comply with those guidelines once we are placed in the upper tier. We have time. We will watch this. There's no decision yet made on when to do it. Thank you. Thank you. The next question is from Manojit Saha from Business Standard. Please go ahead. Hello. This is Ankita Shah from Business Standard. Yeah. Go ahead, please. Am I audible? Yeah, we can hear you. You spoke about portfolio diversification while presenting the notes. I just wanted to understand what diversification we are seeking here and, secondly, any fundraising plans going ahead. Also, with subnormal monsoons, are you seeing any concerns, especially around vehicle finance loans, tractor finance loans, and SME loans, especially in terms of recovery and collections? Any concerns you are seeing? Your first question on diversification. Our strategy remains that we want to be a well-diversified entity, widely present across different geographies, and we've stayed true to that strategy. The addition of the gold loan portfolio is also a step in that direction. It will help us to add a new product that is secured in nature and that has huge potential to grow at a high ROA. As far as diversification of our liability. Again, our strategy there also remains the same: we want to be a very well-diversified entity. If you would have been seeing our numbers, we've also posted getting our international rating, which is triple B, which is equal to the sovereign rating. We've done bond issuances, the one which was done very recently, and now our international borrowings constitute close to about 11% of our total borrowings. We will look at continuously tapping all opportunities, trying to optimize or reduce our cost of funds. As far as the impact of the monsoon and El Niño is concerned, we've not seen any impact of the same on our portfolios. In fact, we are not seeing any early signs of the same also in that. We are actually now hoping that the quantum of monsoons has improved in India, and hopefully the weather predictors—hopefully they will be turned wrong, and hopefully we will get a full monsoon and the rural markets will also flourish. We've not seen any impact as of now. Thank you. Before we take the next question, a reminder to participants that you can press star one to join the question queue. The next question is from Shrishti Sharma from ETBFSI. Please go ahead. Hi. Since I have the opportunity to ask. What segments are you most cautious of, Mr. Sabharwal, in the current times? The retail crisis impact, El Niño, you just addressed—what is that segment you're most cautious of that you think the best managed build-up? Based on what the macro situation is, in quarter one, we did go a little conservative on certain segments. For example, the commercial vehicle segment and construction equipment segment, because we felt that if the fuel crisis were to get fully passed on to the final borrower, it could have an impact on the profitability of those businesses. We did go conservative in those areas. Similarly, certain MSMEs have a high reliance on petroleum products. Those are the areas in which we went a little conservative. Luckily, the government has not passed on the impact of the prices onto the final consumers. Those segments have continued to behave well. Okay. Like you said, you were conservative with this vehicle in the first quarter. What next? Are all the portfolios behaving the best? Yeah. Actually, all portfolios on credit quality continue to behave very well. There are no signs or early indicators of any stress visible in any of the segments. Okay, sure. Thank you. Thank you. Thank you. The next question is from Manish from PTI. Please go ahead. Am I audible? Yes, Manish. Sir, I just wanted to know the number. How many gold loan branches are you targeting in the next few years? I missed that number. Currently, sir, you guys have around 152 branches within the four dozen states. Which are the next states you will be targeting for these gold loan branches? Basically, Manish, I'll give you an idea. Over the next two and a half to three years, once we get the RBI okay for the acquisition, we expect to have about +500 branches. As far as specific states are concerned, we have identified certain states. Work is going on to identify more. That is something which we will roll out once we start our organic business also. Okay. Which are the states you have already identified, sir? We don't want to talk about them at this point in time, but clearly, we want to be present in certain states and go deeper in them before we keep adding more states. Our strategy would be to build a strong ecosystem in certain states and then, once we believe that we've got a critical mass there, go to more states. Are these in the northern part of the country? Yes. They will also be in the northern part of the country. I'm saying I'm not saying only that. Okay. Thank you, sir. Thank you. The next question is from Shubhra Tandon, from Financial Express. Please go ahead. Good evening, sir. Am I audible? Yes. Sir. Okay. Sir, actually, in the investor presentation, you said that you scaled up disbursements for unsecured products from Q1 FY 2026, when you have been addressing the delinquency problem in your personal loans and MFIs. There is another statement there which says there's some book growth to catch up with the growth in the next few quarters. I just wanted to understand the strategy here and the demand and from where you are seeing higher disbursements coming. If you would remember, about two and a half years back, when the whole market saw some increased stress in the unsecured business, we became more conservative, and because of that conservatism, we have scaled down our business volumes in unsecured business. From quarter one of FY 2026, we saw credit costs easing out and the portfolio starting to behave much better, and that is when we started scaling up our unsecured business. What we have stated there in our investor presentation is that the disbursements are growing there. What happens is in any lending book, you will first see disbursements growing, and then you will see the impact on the books. Our book is growing today at a slower pace than disbursement, but we expect this catch-up to happen over the next few quarters, which means that if we continue on a similar trend in disbursement, you will start seeing the book growth coming closer to the disbursement growth. Okay. Understood. Thank you. Thank you very much. That was the last question. I would now like to hand the conference over to the management team for closing comments. Thank you so much. I think quarter one was an excellent quarter for us. We were aided by the fact that the Indian economy continued to remain strong on all aspects. We were also supported by the fact that the credit quality remains strong. Our focus on investment in technology and being early adopters of AI is showing signs of helping us with the operating leverage. We expect operating leverage to further improve in the coming quarters. We expect, because of our focus on high-margin products, that our margins in our business will also improve in the future. We have given certain guidance for FY 2028, and we are on track to meet that guidance going forward. Thank you, everyone, for joining us. Thank you very much. On behalf of Tata Capital, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.