Ladies and gentlemen, good day and welcome to Ujjivan Small Finance Bank Q1 FY 2027 earnings conference call hosted by Antique Stock Broking 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 star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manjith Nair from Antique Stock Broking Limited. Thank you, and over to you, sir. Thank you. Good evening, everyone. I welcome you all to Q1 FY 2027 earnings conference call of Ujjivan Small Finance Bank. Today we have the senior management team of Ujjivan Small Finance Bank represented by Carol Furtado, Executive Director; Sadananda Kamath, Chief Financial Officer; Ashish Goel, Chief Credit Officer; Vibhas Chandra, Head Micro Banking; Hitendra Jha, Head of Retail Liability; Umesh Arora, Head of Emerging Business; Martin P S, Chief Operating Officer; Brajesh Cherian, Chief Risk Officer; Siddharth Bharadwaj, Head IR; and Mr. Gaurav Sah, Lead Investor Relations. With this, I now hand over the call to Carol Furtado, ED, for her opening remarks. Thank you, and over to you, ma'am. Thank you, Manjith. Good evening, and thank you all for joining us today for Ujjivan Small Finance Bank's Q1 FY 2027 earnings call. Since our MD, Mr. Sanjeev Nautiyal, is indisposed and not in office today, hence unable to attend this call. Please do note, I will be referring to year-on-year comparisons with Q1 FY 2026 and quarter-on-quarter with Q4 FY 2026. I will begin with a brief overview of the macroeconomic environment before discussing the bank's performance for the quarter. The geopolitical situation in West Asia, which started in February this year, continued to create uncertainty across global markets during the quarter. While discussions around a ceasefire emerged, the situation remains fluid. Softening of global energy prices from their peak, coupled with easing Indian commercial gas supply restrictions, has smoothened commercial operations. On the local front, the weather-related uncertainties continue to pose risks due to strengthening of El Niño in the months ahead. We believe that harvest of Rabi crops has led to better outcomes currently, but any delay in sowing of Kharif crops might impact H2 economic activity. This remains a key monitorable. On the positive side, the high-frequency domestic economic indicators have largely shown stability. RBI, in its June MPC review meeting, decided to keep the policy repo rate unchanged at 5.25% while maintaining a neutral policy stance. The forex hedging cost dispensations by RBI have been a welcome step and should help in liquidity and hence stabilizing the deposit rates. While the real GDP growth for FY 2027 was recalibrated to 6.6%, inflation forecast was within the band defined by RBI and is projected at 5.1% for full year. The governor also emphasized that the banking sector continues to remain resilient, supported by healthy credit demand, steady deposit mobilization, and adequate liquidity to meet the productive requirements of the economy. Against this backdrop, the bank delivered another quarter of steady business growth. Our strategy continues to remain centered on strengthening our liability franchise, building a diversified asset portfolio, and maintaining prudent risk management practices to ensure profitability along with growth. As part of plan for FY 2027, Bank has operationalized 38 new branches, taking total count to 814 as of June 26th. We delivered highest year-on-year growth in deposits at 25% in the last couple of years, taking the deposit book to INR 48,129 crores. CASA deposits grew to INR 12,930 crores, up 37.8% year-on-year. In a tight liquidity scenario, we maintained comfortable CD ratio. To adjust for evolving market scenario, we effected rate increases in the month of June on key buckets in line with our intended ALM outcome. Our focus on enhancing the value proposition for deposit customers continues to deliver encouraging results. The High Net Worth program, Ivory, has witnessed strong momentum and is increasingly becoming an important pillar of our affluent banking franchise. Insurance cross-sell penetration has improved further, reflecting stronger customer engagement. The mutual fund distribution offering, now accessible through mobile and internet banking channels, is seeing growing customer adoption. The co-branded credit card, currently in the testing phase, is expected to further strengthen customer engagement and product penetration. Cost of funds continued the downward trajectory and stood at 6.86% for the quarter. We remain in sound liquidity health with liquidity coverage ratio around 132% for the quarter, reflecting a well-balanced appROAch towards growth and liquidity management. Turning to our asset franchise, we are pleased to note that our progress towards diversification of loan portfolio remains on track, with more than half of the loan book being secured at 50.4% as of June 26th. Following a strong performance last quarter, growth in our secured book has continued at robust rates and expanded to INR 21,638 crores, up 42.7% year-on-year and 7.8% quarter-on-quarter. The bank-level gross loan book reached INR 42,903 crores, growing 28.9% year-on-year and 5.5% quarter-on-quarter. Disbursement for the quarter were at INR 9,245 crores, up 41.4% year-on-year. Driven by the sustained momentum in the microbanking sector, our microbanking book reached INR 21,371 crores, up 16.8% year-on-year, while disbursement grew by 16.4% year-on-year to reach INR 4,581 crores. On the asset quality front, Bucket X collection efficiency for the quarter stood at 99.68%, demonstrating a healthy portfolio. After seven quarters of degrowth, borrower base has started to grow, supported by 1.72 lakh new customer additions in Q1, marginally above the Q4 FY 2026 numbers. Affordable housing and micro mortgages recorded strong growth, with gross loan book increasing 40.8% year-on-year to INR 11,210 crores, underscoring resilient customer demand and effective execution across key markets. Affordable housing distributed through 581 branches and micro mortgages through 323 branches benefits from broad geographic dispersion and a well-defined state-wise collateral framework. Our disciplined underwriting appROAch, supported by calibrated LTV and FOIR thresholds, continues to reinforce portfolio quality while enabling sustainable growth. GNPA across affordable housing and micro mortgages remains stable at 1.2% and 0.6%, respectively. The MSME portfolio continued its strong momentum, registering growth of 54% year-on-year at INR 3,470 crores on the back of maintaining prudent underwriting standards. We have enhanced our product offerings within this segment. The working capital and supply chain finance jointly contribute around 28% in the MSME book. The business continues to help in customer diversification and increase deposit mobilization. The MSME PAR dropped 13 basis points, and new book GNPA remains stable at 0.5%. Gold loans continues to be strong growth driver with sourcing across 455 branches, with an increase of 106 branches in the quarter. Gold gross loan book stood at INR 1,020 crores, up 248.6% year-on-year. This increased product penetration and tailored offerings resulted in disbursements growth of 183.9% year-on-year at INR 467 crores. Origination LTV for Q1 remained comfortable at 75%, while the book LTV remained around 56%. The vehicle loans with new two-wheeler segment continues to do well. This product is offered across locations catered by 337 branches, with focus to enhance our mix of mid-premium and EV. The vehicle gross loan book stood at INR 1,036 crores, up 85.1% year-on-year. Portfolio quality remains steady with GNPA at 1.7%. Together, the new business lines of gold, vehicle, and agri have contributed to 7% of the gross loan book, while the disbursement share was at 9% in Q1. Bank level asset quality continued to be stable during the quarter, with GNPA reducing by 10 basis points to 2.17%. Provision coverage ratio strengthened further to 85%, providing adequate coverage across secured and unsecured products. Collection efficiency for current due plus overdue remained healthy at 98.4%, supported by consistent execution across our operating network. Write-off for the quarter stood at INR 72 crores. Credit cost came in at INR 127 crores. We are watchful of the macro environmental factors and will continue to take timely corrective steps to address any developments. The business growth witnessed across both our liability and asset franchise in Q1 translated into a healthy financial performance with profit after tax at INR 317 crores, resulting in ROA of 2.2% and ROE of 18.2%. Net interest income increased to INR 1,186 crores, while net interest margin remained stable at 8.5%. Processing fee and insurance cross-sell supported other income. Operating expenses remained well managed quarter-on-quarter, while personal cost increase reflects salary increments effective from April 26, hiring, and towards gratuity and leave encashments. The other expenses were lower sequentially on account of lower business generation expenses and lower CSR expenses. The strong performance across our asset products has more than offset the impact of macroeconomic headwinds and reinforced our confidence in achieving our FY 2027 planned asset growth of 25%. The expenses planned this year for future capacity building has started kicking in from late Q1, and the effect would be seen over the remaining quarters. Capacity building expenses are of the nature of branch opening, branding, and tech and analytics capabilities. This deferred commencement of expenses, coupled with ongoing efficiency gains, will result in full year OPEX to be lower than earlier planned and now would be around 6.4% of average assets. We continue to witness encouraging trends in asset quality with credit cost at 0.9%, with absolute slippages during the quarter remaining lower than anticipated. Accordingly, we are revising our FY 2027 credit cost guidance to 0.9%-1% of average total assets. Please note, we are moving away from guiding credit cost on average gross loan book to average balance sheet for better alignment. We remain mindful of the prevailing funding rate environment and the continued competitive intensity in CASA mobilization, along with pricing pressures across key asset products and the resulting impact on margins. Taking these factors into consideration, along with the strength of our operating performance, improving asset quality, and enhanced cost outlook, we are confident in raising our FY 2027 ROA guidance to 1.8%-2%. We continue to invest on creating more levers for liability customers to bank with us. Simultaneously, multiple digitalization and analytics-led interventions are being carried out to further bolster liability franchise. We are also utilizing the newly created capacities on Forex side by offering attractive FCNRB rates. It is of paramount importance that capacity building continues to happen on all fronts. Highlighting a few new initiatives on assets front. Unsecured fast-track loan has completed successful pilot and is ready for a scale-up. This is a pure digital product with the utilization of account aggregators and bureau details. Pre-owned cars has been piloted in Karnataka. It will be creating a growth engine within our vehicle loan business. Lending to mid-corporates has commenced with disbursements in Q1. The MSME product suite has been expanded with purchase invoice discounting. With that, I conclude my opening remarks and request the moderator to open the floor 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 their 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, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Renish from ICICI. Please proceed. Yeah. Hi, sir. Congrats on a good set of numbers. Just two, three things. One on the asset yield. We are experiencing a very heightened competition in segment like affordable housing or maybe vehicle financing. How we are preparing ourself from, let's say, three to five perspective to sustain these yields even if competition increases, right? Why I'm asking this is that since we are moving away from MFI business structurally, and if you're not able to sustain yields in some of these new products, then on a steady state basis, maintaining 2% ROA will be challenging. Just wanted to know your thoughts on the non-MFI yield today and how are we placed from a three to five perspective. Hi, Renish. I'll first address the affordable housing and then move to the overall yields. Yeah. On the affordable housing side, our markets are semi-urban, largely urban and semi-urban. We are not present in the metros. We would be present in a small way in the metros. We are present in about 580-590 branches. That has given us a very robust distribution network to be able to maintain growth. A INR 16-20 lakh ticket size also is the right mix that we have found to maintain the yields that we desire. We've been able to maintain yields. There is definitely some competitive pressure. However, we feel confident that in the markets that we are, we should be able to maintain the yields. Okay. Just on this affordable piece. Let's say even if you look at your internal rates, it has been hovering around 12.2%, 12.3% from last maybe six, seven, eight quarters. Right. Which definitely suggests that the market environment is such that even if we want to increase the price, the market is not going to allow us. Hence, my question is slightly from a medium-term perspective. Are we confident of sustaining these yields in this segment at this level? Maybe we have to, let us say, revisit our strategy in terms of scaling micro mortgage more aggressively to maintain overall mortgage book yield. I was talking about affordable housing being in the range of about 12.5% yield. This is something you have to see the mix of ticket sizes and the geographies in which you operate. For us, the affordable housing, we've not had to compromise on yields because of the geographies and the ticket sizes that we've been operating in. There is a business line of micro mortgages, which we started around three years back. It is now about INR 1,800 crores. Here, the yields are much healthier. Correct. In the range of 19.5% odd. Here again, about 70% of our business is semi-urban in nature. In the ticket sizes of about INR 10 lakhs-INR 15 lakhs, the average is about INR seven, eight lakhs in micro mortgages. Okay. Even if we go to INR 10 lakhs or INR 12 lakhs, the yield doesn't come down significantly. Got it. Again, as I said, it's a mix of ticket sizes and geographies. Okay. Got it. Okay. My second question is on the gold loan. When we look at the customer sourcing mix. This quarter, the new-to-bank customer has increased very sharply to 40%. Just wanted to know, in one quarter, what has changed which helped us acquiring lot of customer from outside? Or it is just to do with the vintage of branch? Hi, Renish. This is Vibhas. As far as gold loan is concerned, it is a business which is very promising. At the same time, it is a new business to us. If you look at this quarter, we have activated more than 100 branches in gold loan, That leads to new customer acquisition also. Got it. At the same time, we have seen that demand in microfinance customers have also increased in Q1, leading to new customer from this segment also to come in. Got it. [audio distortion] combined has changed the numbers. Got it. Any ballpark absolute number we have in our mind, as far as gold loan book is concerned, let's say INR 5,000 by 2028 or any number would you want to assign? Renish, in this business, we are looking at increasing capacities, and this is the consistent strategy we've been maintaining for the last two years. Okay. Keep activating branches, keep enhancing capacity. This quarter, we've done on an average about INR 160 crore to INR 170 crore a month. The exit in June being INR 170 crore, INR 175 crore. We have a plan to take our active branches from about 430, 440 to about 575 by the end of this year. We'll again significantly add capacities. The exit number for disbursement should be somewhere in the range of about INR 250 odd crore a month. How much, sorry? About INR 230 crore-INR 240 crore, INR 250 crore a month exit March. Got it. Okay. That's useful for my side, sir. This would actually result in the book getting increased. Got it. No, this is very helpful, sir. Thank you, and best of luck. Thank you. The next question is from the line of Shreepal Doshi from Equirus. Please proceed. Hi, sir. Good evening, and thank you for giving me the opportunity, and congrats on a good set of numbers. My first question was on the liability side. There we've seen cost of fund, cost of deposit are coming down on a sequential basis. We've taken increase in the rates in some of the ticket size buckets. Now, incrementally, do we expect the cost of fund to move up? Also, you highlighted in your commentary that the liquidity situation remains tight. In that scenario, would we see incrementally the cost of fund going up? If yes, then to what extent are we expecting for the full year for that number to close? Hi, Shreepal. Our deposit growth has been broadly aligned with the asset growth you would have seen. We also have some more avenues to support the funding, if at all required, and to optimize the margin. We have the IBPC refinance, securitization options are also open for us. We remain cognizant of the fact there is a deposit pressure in the market. Those impacts are also being accounted for. That's been baked into our ROA guidance of 1.8%-2%. That's been considered while we guiding the number of 1.8%-2%. We don't see a very significant increase, but marginal increase is being expected. Got it. Undoubtedly, sir, we've done a commendable job despite the situation being tight on the deposit side. Do you see any further rate hike requirement at our level in some of the buckets? Or for now we are okay with the current rate hike that we've taken in the 1Q? As such, we don't see any immediate requirement for any upward revision. We will continue to remain at same levels, and we will be watchful about how the market moves. Got it. The second question was on the vehicle finance portfolio. We plan to add the pre-owned car segment within vehicle. Do we also plan to explore CV such as LCV, HCV in that category? Shreepal, we have just completed the pilot for pre-owned cars. This is a business that we will test during the year in maybe two or three geographies and plan to scale up next year once we understand the customer segment better, the pricing and the local flavor of all the geographies that we're operating in. HCV and LCV, if and when we plan, would be only after this financial year. Got it. Just one last question on the fee income side. This quarter, we have seen a deep dip in the insurance income. What explains that? Incrementally also, should this be the run rate or will we see some bounce back there? Hi, Shreepal. Hitendra here. What we have seen that our income has grown by almost 50% YOY. We are hopeful to maintain same kind of growth rate as we go along from here. Sir, from sequential, like Okay. You mean to say on a All right. Okay. Got it. Thank you, sir. Thank you for answering my questions. Shreepal, just to add, it all depends on the dispersal. Q4 dispersal is all-time high, whereas Q1 is not comparable. That may explain the difference to you. Got it, sir. Thank you. Thank you. The next question is on the line of Rajiv Mehta from Yes Securities. Please proceed. Yeah. Hi, good evening. Congratulations on very strong set of numbers. My question is on, if you can share the investment amount that you want to put for this capacity building, which is your branch opening, branding, tech enablement and analytics. See, I am looking at your current rate of profitability, which is INR 317 crore in a first quarter, wherein typically other income is also lower. When I look at the guidance, you're implying INR 1,250 odd crores of profit at 1.9% ROA. Are we also trying to build in some NIM compression throughout the year, which is why we'll be remaining at the same rate of quarterly profits and adding up to INR 1,250 odd crore. If you can just tell us, firstly, the amount that you'll be spending on capacity building throughout the year and whether any NIM compression has been budgeted in the overall guidance of this current ROA. Hi, Rajiv. Bhara here. We already had informed you that we are planning to spend around INR 250 crores. Not much has been spent in Q1, which is why there is a good impact upward in the profits. Definitely the spending has started in June because it required some planning. For example, in marketing, IT, we have worked on it, opening branches. Many branches opened in June, so it will build up in the coming quarters. That is why you can see that we have given you a guidance of 1.8%-2%, which has considered the spend of this INR 250 odd crores in the coming quarters. Yeah. On the NIM side, what have we budgeted in the ROA guidance? NIM, already my colleague, CRO Brajesh, just now explained on the cost of fund. On one side, the yield, you can see that the MFI is doing pretty well, so that will be helpful in keeping the yield up along with some of our higher-yielding segments such as gold, two-wheeler, used car, micro mortgage. That will sustain there. Already my colleague has explained that we don't see any major changes in the cost of fund going forward because we have various instruments such as IBPC, refinance, securitization, upward slope, which we have not used in the first quarter, and we'll use it to keep it stable. You can go ahead with the guidance of the NIM, which we already gave at the beginning of the year and which we have recorded in the first quarter. Okay. Sure. See, just on this funding of this very strong growth that we're delivering on the asset side, how are we looking at liability mobilization for funding such high level of growth? Say, from a distribution point of view, you explained that you'll be adding more branches, in pricing also, I think we have done something on the pricing side as well. Anything from the productivity side that we plan to take some action so that we are able to get the required amount of deposits to fund this 25%, 30% odd percent growth that we plan? Rajiv, Hitendra here. Okay. There are two strategies. Number one, we are adding 144 branches this year. Out of that, 38 already we have opened, 106 more branches will open, which will give us a distribution. Number two, from the beginning we have guided that our focus on liability side is on top eight and top 30 markets, where we are seeing robust growth of roughly 75% YY growth on CASA and overall 36% growth. We'll continue to focus in this market, which has given us a good result, number one. Number two, we have introduced certain products which is helping us to acquire good customers and also we are now more segment-focused. We are not looking customers as one customer. We are different segments. We are focused on HNI segment, we are focused on NR, we are focused on TASC customers and also corporate salary. This segmental focus, we are very confident with a new set of branches, we will be able to garner the deposit what we require. We have FCNR opportunity which has come up, which will give us a good result. Till now we have done INR 60 odd crores in Q1 and we are hopeful to do this number, what we have guided earlier. Okay. Just last thing. Can you share the current ROA profile of the affordable housing book, excluding micro mortgages, and how do we see the ROA of that portfolio shaping up in the coming year? Hi, this is Gaurav. Rajiv, we are not looking to give any product-level numbers. We'll come back to you once we plan to give. Yeah. Okay, Gaurav. Thank you and best of luck. Thank you. The next question is on the line of Kaushik Agarwal from Haitong. Please proceed. Hi. Thank you for the opportunity. I have couple of questions. Firstly, on this guidance cut on the credit cost side. What gives you the confidence in terms of cutting down this guidance? broadly, if you can comment in terms of MFI portfolio, though we are seeing that broadly on the industry side, things are improving, but how is your portfolio performing? Owing to this uneven weather conditions, are you seeing any early warning signs in your portfolio? That is number one. Second question is on affordable housing. The growth has been quite strong over there. What is the management strategy in terms of the growth that we are seeing and Do you expect the momentum to continue? Second part to this question is in the micro mortgages, in the PAR zero, there was some uptick on a sequential basis. How should one read this? Lastly, on margins. I saw that in your presentation, there is some improvement in cost of fund despite that margins were largely stable. If you can help us understand what has really happened. Do you expect the cost of fund has largely bottomed? Last quarter you indicated that some part of the borrowings were supposed to be repriced in the upcoming quarter. Is it all done or something is still left over there? Kaushik, I'll answer the question on microfinance first. The credit cost is actually a function of the Bucket X collection efficiency. In Q1, we have seen 99.7%, which is a very healthy collection efficiency. In last quarter also, we said that 99.7% is something that we find comfort in. The trends in July are remaining roughly the same. Therefore, we feel that this trend will continue. If there is a five, seven basis points increase or decrease, that would lead to a marginal increase or decrease in the credit cost. As long as this trend continues, our credit cost will remain largely under control. The second question was on affordable housing. The momentum, as we said, is basis the geographies that we are present in. We are largely into the urban and semi-urban geographies. Very little presence in metros. The ticket sizes and the yield that we have been maintaining has helped us grow this business. It is largely a distribution-driven business. Similarly, on the micro mortgages side, we are already present in about 325 branches. As we go through the year, some of these branches will start to give a better efficiency. In terms of PAR, yes, there has been a marginal increase in PAR, but this business is only two and a half, three years old. It has still not started. The 18 MOB book is still very small. As we go forward, there will be a natural increase in PAR. That is how the micro mortgages book will mature over a period of time. Okay. On the margin, please, if you can answer that part also. Sir, we're not able to listen to you, Kaushik. Sorry. Basically, I was asking that during this quarter, there has been some improvement in cost of fund, but the margins have largely remained stable. What explains that? Second part is should one expect that cost of fund has largely bottomed? Because in the last quarter, you suggested that some of the books has to be repriced. Is it all done or some more further improvement in cost of fund can be expected? Hi, Kaushik. From the repricing side, that benefits is almost, we can't see further visibility on repricing benefit. We feel it to remain at current level or slightly elevated. You know there is a pressure on the market. We don't see significant changes to the current levels beyond few bits here or there. Thank you. Okay. Thank you so much. Thank you. The next question is from the line of Abhishek from HSBC. Please proceed. Hi, good evening, and congratulations for the quarter. I just wanted to check in the MSME business, the ticket size is increasing quite steadily. Is this LAP or is this working capital? What is the yield range on this higher ticket business that you are doing currently? Abhishek, this increase is a conscious strategy that we have- That we started in quarter one of this year. The increase in ticket size is both on LAP as well as working capital. LAP, as you know, was about INR 58 lakhs to INR 60 lakhs. We are currently in the range of INR 80 lakhs to INR 90 lakhs. Similarly, on the working capital side, while we were in the range of INR 70 lakhs-INR 80 lakhs, we have now consciously taken it up to INR 1.1 crores to INR 1.2 crores. The yield, therefore, cannot be maintained at about 11%, 11.5%, which we used to do earlier. It would be somewhere in the range of 10.5%. Okay. The disbursement yield would be similar to the book yield or it would lower than the book yield? It would be lower than the book yield. Because in the last three quarters, your book yield is also trending down and which coincides with the ticket size- Yes increase. Yes. Where does that stop? Where do you draw the line and say, now we don't want to migrate further up the ticket size curve just to protect yield or hold it where it is? Yield and OpEx are two variables that we are consciously monitoring. As the ticket size increases, the OpEx also comes down. It doesn't fully compensate the decrease in yield, but the OpEx plus the risk takes care of the credit cost. Both of them take care of the decrease in yield. We feel that currently we are in the range where we should continue for some more time. If there is any further increase in ticket size, probably it can be looked at next year, but this year probably we'll be working in the same band. Right. The way you think about this is it's essentially a leverage product, right? You may not be making great ROA there, but you'll be making high RoE. That's the way you would appROAch this product. Absolutely, Abhishek. This is the way we are looking at it. It also gives us some foothold into the liability relationship, the overall banking relationships, bank guarantees. There are some non-fund-based opportunities also which are available in the higher ticket sizes. Those are also areas in which we started to see some success. Although this is early success, but yes, these are also opportunities which are opening up. Got it. Separately, I wanted to check on housing. If I look at the mix between micro-mortgage and affordable, of course, micro-mortgage is going up quite significantly in the mix and the disbursements are also quite high. What are the further legs? What will keep these trends, this kind of mix change towards micro-mortgage for, say, next 12 months or 24 months? Where do you expect the mix to settle? Right now, I think it's 27, 73 broadly. Where would you expect this to settle eventually? Abhishek, we are not looking at the ratios as of now. What we are looking at is the capacity that we have built. On the affordable housing side, a capacity of about INR 350 crore-INR 375 crore a month has already been built. On the micro-mortgage side, you will see INR 100 crore a month kind of a disbursement number, which exit March will probably reach in the range of INR 140 crore-INR 150 crore. The mix can be derived from there, but yes, we will be working on these capacities. Right. The disbursement mix will be increasing towards micro-mortgage. Yes. The disbursement mix, the incremental book will be more towards micro-mortgages. More towards micro. Got it. I also wanted to check on OpEx. The way to think about OpEx, in light of what Kamath Sir said, is that this quarter your OpEx is sans any kind of additional spending. This is your true underlying run rate. On top of this, we add around INR 250 crore to get to a full year number. broadly, that should be the broad thinking. Is that fair or how to think about it? More or less you are there. The extraordinary spend, what we factored of INR 250 crore was delayed due to planning and also some macroeconomic factors. We are a little cautious there. We started spending in June, so you will see the impact in the coming quarters going forward. We want to spend that money because it is for the development of the bank and it is going to be responsible for the growth going forward. We have also given you a guidance. ED madam has said it will be around 6.4%, which will be the OpEx to ATA by the end of the year, for the year. Got it. Very clear. Yeah. Right, sir. Thank you so much and all the best. Thank you. The next question is from the line of Ashlesh from Kotak Securities. Please proceed. Hi, team. Good evening. I think first question is on the liability profile. You have seen a fairly good growth in the CASA deposits this year of about 35%. Do you expect that to continue into FY 2027? On the CASA ratio as well, there was a lot of discussion during the analyst meet last year about taking it closer to 30. Are you still on track to get there, let's say by the end of this year? That's the first question. Hi, Ashlesh. Yeah, we are confident of maintaining the same CASA growth what we have delivered this quarter, and we have taken various steps to ensure that kind of growth. Of course, as CASA ratio also, whatever we have projected, we are very much committed or we may over-deliver slightly. Understood. Just a follow-up on that, what has been the strategy on the liability profile in the last few quarters? While CASA has grown well, I think there has been a little bit more reliance on bulk deposits, bulk term deposits over retail term deposits. Along with that, the share of individual depositors has also declined in the last few quarters, if I look at the depositor mix. If you can just elaborate on what has been the strategy there so far. Our bulk deposit ratio is about 30%. Our guiding factor is to keep it in and around 30%. Through the year, we will make sure that we are closer to that one. We have other interventions and other opportunities to make sure to bring it within that particular ratio, which we have guided. We'll continue to work on it. Okay. Just to get more clarity on that one, what would be the rough ballpark cost of the retail TD part and the bulk TD part? Was that a cheaper source, the bulk TD part this quarter? No, this quarter is not. Now it has reduced differently cheaper than bulk TD. Okay. We are now getting good momentum in retail TD and we want to continue momentum in retail TD now. Understood. Okay. The second part of the discussion was on the loan mix. What are you looking at the target loan mix between MFI and non-MFI for March 2027 and March 2028? I remember you had earlier guided for a number closer to 56% in non-MFI by March 2027. Is there any update to that one? Ashlesh, we maintain the same guidance of 56%. 56% of secured by exit March 2027. Understood. Okay. Lastly, if you can share the slippages in the MFI business and the provisions in the MFI business made in this quarter. Slippages were less than 2%. On the provisions, I can talk about the provision coverage ratio. It's in the range of about 95% for MFI. Exact amount of provision, I can actually come back to you on the exact amount, but in terms of provision, PCR is about 95% odd. Sure. Can you give us the MFI slippage number in INR if possible? Yeah, I'll give it to you. Perfect. Okay. Thank you. Thank you. The next question is from the line of Param from Investec. Please proceed. Yeah. Hi. Thanks for taking my question. Congrats on the quarter. First question is on the operating expenses. Sir, you mentioned that this year we should be at 6.4% of assets. How to look at this from, say, next year or next couple of years, how should this track? Yeah. This year we will be at 6.4%. Going forward, yes, the investment should be slightly lesser. You will see an improvement there. Exact figures, I will let you know little later. There will be improvement year on year till since the efficiencies will start kicking in and the majority of the investment you would have taken this year. Going forward also, there will be investment, but in a lesser amount. We will see improvement year on year. That is what we see. Okay, sir. Thank you. Sir, if I can ask that another way. Among the non-MFI businesses, which of the businesses are, say, yet to achieve PPOP level breakeven? We get an idea of what can contribute to operating leverage going ahead. Yeah. We do not give any guidance each vertical-wise at this moment. When we are ready, we will come back to you on that. Sorry, sir. I totally got. Thank you. The next question is from the line of Pritesh from DAM Capital. Please proceed. Yeah. Hi. Congratulations on good set of numbers and strong outlook. Just on the outlook part, the driver of our ROA guidance being higher is on the credit cost. When you look through your portfolios segment-wise, geography-wise, is that now that the book has reached fair level of maturity or the mix is driving the overall credit cost lower? What has been the comfort area for us to revise that credit cost downwards in last couple of quarters? Pritesh, the revised guidance on ROA is on credit cost, OPEX first and credit cost next. It is a combination of both OPEX as well as credit cost. In terms of microfinance, all states have completely stabilized. We are getting consistent 99.7% Bucket X collection efficiency. There are states which do 99.75%, there are states which do 99.665% also. Largely, every state is now stable in terms of repayment behavior. The guardrails have also led to a very minimal four lender and above, so it's now below 1.5%. There is no over-leverage in the market. The customers have got de-leveraged. Repayment is consistent. Therefore, we feel that the 2% which we had said on unsecured might be just a little lower than that. Q1 was about 1.9% on the GLB of microfinance. Right. Thanks. Second question was on the micro mortgage. Of course, the book has been growing quite strong now today even with products. If you look at the PAR and the GNPA, it has been also steady climbing. Almost PAR has doubled or GNPA also is slightly high. Where do you think this will go and settle? Second point was that, do we have a higher NGD on this portfolio generally as it grows? How do we see that? Yes, Pritesh, the PAR number, which was about 1.2%, is now in the range of about 1.5%. It's not a very significant increase. Similarly, on the NPA side, we were at about 0.47%, and now we're at about 0.55%. Largely on the micro mortgage book also, what we do is we keep measuring the Bucket X collection efficiency. Currently, we see about 95% on-time repayment and about 99.7%-99.75% Bucket X collection efficiency month-on-month consistently for the last 24 months. With the exception of April of this year, it has been working on a very steady basis. There will be an increase in PAR because the product is not matured yet. It's three years old. The first year was, again, a very small base. On an 18 MOB and a 24 MOB, the numbers will not be fully representative. What we see is even the 18 and 24 MOB has not touched about 2.5%. We feel that the book quality and the locations, the customer profile is acting quite well for us. Sure. Last two questions. One is on MFI side, you mentioned that all the states have stabilized. From a growth perspective, which state do you think can now contribute to growth? Of course, you had mentioned in your guidance that it will be in a 10%-15% range of a growth over time, but do you think that any state will start contributing again to a slightly higher growth compared to what we have seen in last two years? Hi, Pritesh. As far as the microfinance growth is concerned, we are witnessing increasing demand in almost all states. Kerala is one state where we strategically don't want to grow that much. Apart from that, from all states, we are seeing good demand and new to bank and new customers also coming in. As far as our branch opening strategy is concerned, our branch opening is also happening across many states, but little more in states like U.P., Rajasthan, some in Bihar also, where the portfolio has behaved better in the last three, four years. Sure. Lastly, when you look at your liability customer, Sorry, we are not able to hear. Pritesh got disconnected. Deposit or savings, or is it like only term deposit liability customer as well in this number? Could you repeat your question? We lost you in between. Sorry. I wanted to check the liability-only customer, which has been steadily growing, I think is about INR 53 lakh. Does it mean that they all have savings account or they will have only a term deposit relationship with us and may not have a savings account? No, largely all customers will have savings account. We do not onboard any standalone term deposit customers. Sure. Either it will be through micro banking or through liability franchise. Some small number may be there, but largely it will be backed by savings account. Got it. Okay. Thank you so much. Thank you for answering my question. All the best. Thank you. Due to time constraints, this will be our last question. The next question is from the line of Sagar Shah from Spark. Please proceed. Good evening, management. First of all, congratulations to the entire team of Ujjivan for posting such healthy set of earnings, and thank you for the opportunity. I had couple of questions. First of all, related to your productivity on the gold loan metrics, actually. On the gold loans, I wanted to understand that incrementally, how are we expanding our portfolio to something like, in the current scenario, in how many branches are we disbursing our gold loans, and what is our outlook so that our productivity can be enhanced? My second question was on the guidance front. On the guidance front, you have revised your credit cost guidance as well. I wanted to understand that, are we seeing any healthy recoveries, especially in the MFI space, which will lead to lowering of credit cost and thus that is the enabler behind your guidance, actually? These are my two questions. Yeah. Hi, Sagar. I will answer your first question. I'm Vibhas, and I will request Ashish to take up the second question. As far as gold loan is concerned, as I mentioned earlier also, it is a new business and very promising business for us, and we are expanding and started offering gold loan from branches from where we operate. This year also we'll be activating gold loan in about 250 branches. We are witnessing that branches where we start operations, within one year, the productivity of our loan officers reaches a level of INR 25 lakhs-INR 30 lakhs, and that is something which is happening across branches and across regions. One good thing that we have been able to see, being a late entrant, we also have a benefit of understanding what are the nuances of gold loan, and we have been able to understand and build a product which fits the market. RBI also came up with policies, we were already following most of the policies as this business is new to us. Gold loan is in the industry, it is very heavy in the south. We also see opportunity in other regions also, including east, even northeast and northern part of the country, where market is not that extracted so far, and we see a good amount of business happening from this region as well, apart from southern states. Expansion of gold loan to all branches where we operate, and also expanding capacity through gold loan team and all other business teams which work in the branches and getting leads from there is leading to high business volumes. That will continue over the period of time as we go ahead. Okay. Till FY 2028, how many branches are we seeing to add for gold loan disbursements? Right now, as we mentioned, we have close to 800 branches, and we will be opening branch in the future also. Our plan, our intent is to offer gold loan from almost all branches from where we operate. There will be some branches, a small number, where we'll not be able to operate because of operational issues, but we intend to have gold loan across branches we operate. Okay, fine. My second question. On the microfinance side, we have seen a significant reduction in slippages. There are two points. One was related to Bucket X collection efficiency, where we are seeing a steady 99.7%. The second is on slippages. This also answers Ashlesh's question. Ashlesh had asked about slippages in Q1, and have these slippages come down. On an annualized basis, the slippages is about 1.72%, which was 2.68% in Q4, again, on an annualized basis. With a reduction in the slippages, we have therefore seen a much better, one, Bucket X collection efficiency improving, remaining steady. Two, slippages coming down. This leads us to much better credit cost for the full year. Okay. Fine, sir. Got your point. Thank you. Thank you so much. Thank you. All the best for your future. Ashlesh, your question related to provisions held is about INR 657 crores. Thank you. I would now like to hand the conference over to the ED for the closing comments. Over to you, sir. Thank you. I once again thank all the participants for their time and interest. We at Ujjivan Small Finance Bank remain focused on delivering profitable growth while we build an enduring institution. Please reach out to our IR team for any unanswered queries that you may have. Thank you. Thank you. On behalf of Ujjivan Small Finance, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.