Ladies and gentlemen, good day and welcome to the Q1 FY26 earnings call for Utkarsh Small Finance Bank, hosted by ICICI Securities. 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 this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Renish Bhuva from ICICI Securities. Thank you, and over to you, sir. Yeah, thank you. Good afternoon, everyone, and welcome to Utkarsh Small Finance Bank Q1 FY26 earnings call. On behalf of ICICI Securities, I would like to thank Utkarsh Management Team for giving us the opportunity to host this call. Today, we have with us the entire top management team of Utkarsh, represented by Mr. Govind Singh, Managing Director and CEO, Mr. Pramod Kumar Dubey, Executive Director, Mr. Sarjukumar Pravin Simaria, CFO, Mr. Amit Acharya, Chief Risk Officer, Mr. Vivek Kashyap, Head JLG Sales Microbanking, and Mr. Saurabh Ghosh, Head Consumer Banking. I will now hand over the call to Mr. Govindji for his opening remarks, and then we'll open the floor for Q&A. Over to you, sir. Thank you, Renish. Thanks always for hosting this call. Thank you very much, all the investors, for taking time to join this call. Thank you, everyone, for taking the time to join us for our Q1 FY26 earnings call. The first quarter of FY26 commenced amid the impact of two pivotal forces. First, the full-scale implementation of Guardrail 2.0 from April 1, 2025, and second, the lingering impact of elevated delinquencies carried over from FY25. You are aware, Guardrail 2.0 introduces caps on borrower leverage, restricting microfinance customers to no more than three lenders. While this framework is essential for long-term portfolio health, it did impose a temporary pause in the nascent recovery of collection sentiment that we had observed even in FY25. The immediate effect was that our overdue buckets remained elevated longer than we had anticipated initially, reflecting both the guardrail adjustment process and the residual stress embedded in the portfolios. While JLG business headwinds are there, our non-JLG portfolios sustained good momentum, growing 39% year-on-year and 2% quarter-on-quarter. The moderation in overall loan growth book was driven almost entirely by the contraction in our JLG book, which declined by 7% during the quarter. Conversely, the share of secured loans within the overall loan book increased to 45% as of June 2025, from 35% as of June 2024, and is likely to increase further. On the liabilities front, total deposits registered a marginal decline of 0.4% quarter-on-quarter. However, we delivered 18% year-on-year growth in total deposits, driven by strong traction in retail term deposits, which grew by 34% year-on-year and 10% quarter-on-quarter, while our CASA deposits increased by 22% year-on-year, resulting in improved CASA plus RTD ratio of 74% as of June 25, from 67% as of June 24. During Q1 FY26, we intentionally calibrated deposit accretion to align with our moderated dispersion run rate and maintained a strategic focus on achieving sustainable and consistent deposit growth, driven by a well-diversified and granular low-cost retail deposit portfolio. The bank continues to enhance its digital and fintech capabilities through both direct initiatives and strategic partnerships, contributing to a higher deposit mobilization and cross-sell opportunities. We maintain a strong presence through our general banking branches across the top 100 centers of the country, predominantly located in metro and urban locations. With our newly launched branches getting matured and ramped up, we remain optimistic about margin improvement and overall business scalability, with a strategic focus on improving product per customer, higher wallet share, customer 360-degree perspective, and digital enablement. Aligned with our strategy, our CD ratio declined to 83% as of June 25, against 93% as of June 24, and after netting off refinance borrowing from advances, CD ratio declines to 76% as of June 25. In line with RBI repo rate cuts, we have trimmed interest rates for savings as well as for retail term deposits. These calibrated actions are expected to drive a gradual reduction in our overall cost of funds. With respect to JLG loan book, we are cautiously charting a path towards long-term stability over short-term expansion. As we continue to focus more on collections, it has slowed down loan disbursement, resulting in a decline in JLG loan portfolio by 7% during the quarter, though the fresh NPA slippage is reduced during Q1 FY26. We are working on back-to-basics programs, imparting training to newly inducted frontline staff about center meeting processes and new customer acquisitions, implementing stricter screening processes and greater client connects. Through a more disciplined lending approach, we are already focusing on streamlining the portfolio growth, while the impact may likely persist for some time. The business is expected to stabilize in the next few months, and better collection efficiency is anticipated by then. We see significant growth potential in microbanking business loans, MBBL, considering the large base of JLG borrowers and our MBBL penetration level of less than 5%. MBBL portfolio grew by 29% year-on-year, comprising 10% of our MB loan book, focused on graduating better-profile JLG customers with good repayment track record. This portfolio is behaving much, much better on collection efficiency and asset quality. Accordingly, MBBL portfolio is expected to grow faster and faster henceforth. We are seeing healthy traction in our non-JLG loan portfolio with our deepened focus on secured asset businesses. MSME loan portfolio expanded by 46% year-on-year to INR 4,001 crore, optimizing disbursement yield, which improved by more than 150 basis points over the same quarter last year. Within this, we are also seeing steady growth in Micro-LAP portfolio, wherein disbursement yield is around 18%. We see good growth potential for this product in our geography and given our strong franchise. Housing loan portfolio grew by 30% year-on-year to INR 929 crore. Disbursement yield also improved by more than 40 basis points over the same quarter last year. CE and CV loan book increased by 17% year-on-year to INR 1,179 crore. Within this, we are focusing on increasing share of used vehicle loans. Its disbursement share increased to 30% for Q1 FY26, which was around 5% during Q1 FY25. We are strengthening our presence in BBG lending. The entire portfolio is secured against immovable collateral. This book grew by around 48% year-on-year. We are seeing much better traction on cross-sell on both sides. Asset products, that is, MSME, housing, and micro-LAPs through our liability-focused GB branches and deposit accounts for our asset customers, essentially more products per customer. The overall gross loan book registered moderate growth of 2.3% year-on-year, primarily impacted by a sharp decline in the JLG portfolio. However, we expect JLG disbursement to improve in the next few months. Also, good growth is expected in MBBL portfolio. Additionally, we foresee a continued healthy trajectory in the non-microbanking segment, which largely comprises secured loans, including high-yield products. We expect better loan book growth for FY26. In terms of risk diversification, we also registered with CGFMU for credit guarantee coverage on our eligible JLG and MBBL portfolio, with effect from January 17, 2025. Accordingly, incremental JLG and MBBL out disbursement from then onwards are getting covered under credit guarantee. This cover will further de-risk our JLG and MBBL exposures. We continue to build and deploy higher collection force, also establish a specialized call center focused exclusively on overdue accounts and implement stricter oversight of field of processes, ranging from center meeting discipline to effective monitoring and supervision. We continue to split large MB branches to maintain better control. With the help of these measures, fresh NPA accretion will decline meaningfully in the next few months. Nonetheless, the carry-forward stress translated into a net loss of ₹239 crore for Q1 FY26. For us, FY26 will be a pivotal year for operational and financial optimization, with a strategic emphasis on improving asset quality first while scaling up our focus on profitability-driven businesses along with superior customer experience. Despite the losses, our capital adequacy ratio remained at 19.6% as of June 30, 2025, comfortably above the regulatory threshold. Looking ahead to shore up our capital base, we have already embarked on the equity fund-raise initiative, planning to raise capital in the next few months, depending upon the capital market conditions and investor appetite. Concurrently, we have also secured all requisite statutory approvals on the proposed reverse merger of the holding company with the bank. With these approvals in hand, we are now examining the optimal sequencing of petition filing with NCLT application in tandem with the equity raise. Our surplus liquidity position stood at almost INR 3,900 crore as of June 25, which is higher than our usual liquidity requirement and LCR ratio of 239%. We don't have any short-term borrowing on our balance sheet. We are also undertaking a business transformation project to make our technological architecture and business processes future-ready for our growth plans. While the near-term disruption from guardrail implementation and elevated carry-forward stress posed challenges, it has also highlighted the strength of diversified franchise, prudent risk management, and deep customer connect. Through decisive actions, strengthening our collection framework, optimizing funding cost, shore up capital, and scaling up digital and secured lending initiatives will gradually lay a solid foundation for sustained improvement in asset quality and a steady balance growth trajectory for months ahead. Thank you once again, and now we open this discussion for questions and answers. Thank you. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the attached phone. 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. The first question is from the line of Jay Chauhan from Trinetra Asset Managers. Please go ahead. Good afternoon, and thank you for the opportunity. Am I audible? Yes, you're audible. Yes, so I do have two questions. One, management provided optimistic guidance for Q1 FY26 recovery, but the results showed further deterioration, so what went wrong with the projection, and how reliable are your current recovery timelines? Sorry, can you just repeat? We couldn't hear properly. Can you just repeat your question? Yeah, sir. So I was saying that management provided optimistic guidance for Q1 FY26 recovery, but the results showed further deterioration. So what went wrong with the projections, and how reliable are your current recovery timelines? That was my question. Yeah. So in case of, I mean, I think we are referring to specifically to JLG because that is not; there is no impact on the other any other portfolio. In case of JLG, there was one more point of Guardrail 2.0 of MFIN, which got implemented from 1st of April. And I think the industry also expected that there may not be much impact. But in the first two, three months' time, we saw there was a higher impact more than anticipated. That may be true for overall the JLG overall portfolio. So when the initial guardrail came from MFIN, they put four lenders' cap. And from 1st of April 2025, they changed it to three lender caps. Because of that, we saw some more, you can say, slippages or little elevated credit cost during this quarter. You must have seen that is more or less an industry phenomenon. I think anticipation was that it will not have that much impact, but the actual impact was a little higher than what it was there. You must be aware that guardrail, they start from the 1st August 2024, and the first tranche was August. Then in January 1, 2025, some more changes, and final changes happened from the 1st April 2025. They had a little more impact. I mean, that is mostly the reason. We don't expect any such thing to happen from MFIN or from any of the regulators. Whatever was to be done, that has been done. We have seen the impact so far. Now I think, of course, it's a matter of time, but I think recovery should start happening from here. Right, sir. Understood. And so my second question was the collection efficiency has collapsed right from 96.2% to 82%. What specific operational changes are being implemented to restore this discipline and improve collection? There has been a small change or small reduction in the overall collection efficiency, for sure. Even in the expected, there are some declines. And as you mentioned in our opening remarks also, I think customer connect and all the overdue customers, we are able to connect all the overdue customers through various channels right from our own business team, which goes to field. Then we have the large collection team of more than 800 people. That is the collection team. And then we have also through the call centers, we approach these customers. So I think you can see the efforts have been intensified now. And that is also causing some decline where we are not able to do disbursement to that action because the entire focus is right now on the collections part as far as the JLG is concerned. So we have initiated a lot of new things. And the tracking and supervision part has also been improved. We have got a lot of teams which are in place at the regional level and zonal level, which is able to track the customers as well as the client. So I think we have initiated a lot of things as far as the overall collection is concerned. And that certainly should yield results in days ahead. Good. So that's it from my side. Thank you. Thank you. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead. Yeah, am I audible, sir? Certainly, yes. Please go ahead. Okay. Yeah. Thank you very much, sir, for this opportunity. So just wanted to understand first on the provisioning part. Now you mentioned that we have seen the impact, and going forward, recovery you expect to start happening. So how should one look at credit costs going forward? I mean, currently, I think we had about INR 411 crores kind of a provisioning. So how should one look at incoming quarters? So as just mentioned with the interventions that we are doing in terms of collection, in terms of headcount, in terms of bucketing focus, I guess the quarter two, by and large, will be the similar type, but quarter three onwards, we should see a dropdown. Okay. So for third quarter onwards, we expect some decrease in credit cost? Yes. Is there any timeline by when we can expect some kind of normalcy? I mean, by when we can expect normalcy in credit cost? So, as the CFO mentioned, we are certainly seeing a reduction in the overall pain, but we can use the word. But see, I mean, normalcy can happen once our regular collections reaches 99.5%. I'm talking the X Bucket. And I mean, currently, as of date, it is very difficult to pinpoint. But as you mentioned, next 3-4 months' time, we should be able to reach that level. That is what is our estimate right now. No, reach that level in the meantime? You are talking about normalcy level in three to four months? Yeah. So normalcy will have two things. One, the X bucket collections being on a regular basis at 99.5%, that is one thing. And maybe 99% upwards, in fact, that is what should happen. Plus, in terms of disbursement, obviously, now the disbursement will not be the type of disbursement which used to happen earlier. But disbursement where we are able to cover portfolio doesn't degrow and portfolio growth starts happening. I think that is what we expect. That is the second part of the second leg of the overall normalcy. Again, that is again our anticipation is around three to four months from now. So portfolio will not degrow and if the conservative side by fourth quarter, one can expect some normalcy to resume? I mean, in terms of credit cost and in terms of growth? Yeah. In both terms, I think collection, credit cost, what you mentioned, and also portfolio stability and portfolio starting not declining and growing, in fact, towards the quarter three, and I think that is what we can expect, quarter three and then quarter four beginning. And now in the third quarter, one month has been passed. I mean, July month. So how has been the collection efficiency, microbanking, I mean, which has reduced to 82% as of first quarter? So how do you see your collection efficiency as of, I mean, the last one month? So we have seen almost entire last four months, even June and July, we have seen almost similar type of trajectory as far as JLG business is concerned. It has not gone down, but at the same time, it has not improved significantly also. I think it is almost the same trajectory that we have seen during July, which was there in the month of June, almost on the same lines. And not gone up also, I mean, at least not deteriorated, not improved much. Correct. Correct. You're right. Yeah. Okay, and how should one look at growth for this year? I mean, we expect a single-digit kind of a growth, muted growth this year because of all these issues we are facing. Growth, as I mentioned, because of little uncertainty still remains there in JLG, we are not able to give any specific guidance. And JLG, because we have seen degrowth in the portfolio, so I think you are still asked about the normalcy or when disbursements start picking up. Our some assessment we have done. Maybe I can give a better guidance on the non-JLG part. Non-JLG, we are sure about or certain about 30% plus growth as far as non-JLG book is concerned other than JLG. JLG, I mean, right now, giving a specific guidance on the growth of JLG will be difficult, but non-JLG around 30% plus is what we can guide to the investors. Okay. And just one last thing from my side. Now you have started, you mentioned you have started the CGFMU coverage. So how much percentage of portfolio currently we have and how much we intend to cover over the period? So as far as intention is concerned, we'll cover the entire portfolio. I mean, it's a matter of time. As and when new disbursement happens, this gets automatically covered, almost close to 95% plus because it's only the direct agriculture which is not covered. And normally for JLG, direct agriculture is a very small portion. Indirect agriculture is anyway covered. Even most of our microbanking business loans is covered under that. So whatever the new portfolio are creating from middle of January, that is getting covered automatically under this. I may not have the exact details of how much is already covered, but whatever disbursements are happening from the middle of January under JLG and under MB business loan, they are getting covered under the guarantee scheme. That's very clear, sir. I mean, that's very helpful and all the way, best way. Thank you so much. Thank you. Thanks a lot. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Henil Shah, who is an individual investor. Please go ahead. Hello, sir. Thank you for the opportunity. While I do acknowledge that there is stress in MFI, but look at it, our bank, this has been much better. So how can we expect profitability in FY26, or it is a loss here for the company? I think right now, very difficult to talk about this part unless we see the, what do we say, the JLG portion getting normalized. As you mentioned, it will take some time. So currently, it's very difficult to anticipate the year as far as the profitability part is concerned. We will require some more time. Maybe when we come next time, based on quarter two, we'll be able to give a better guidance as far as the profitability and the JLG overall growth is concerned for this financial year. Okay. And second question, sir, our operating, can we expect operating profit to increase, or it is in line similar range for next couple of quarters? Operating profit by logic in terms of disbursement, and as I just mentioned, about 30% growth on the non-microbanking. There are two factors, three factors that will lead to better operating profits. One, the growth in the non-microbanking portfolio at a higher yield that should increase your operating profit. Two, your cost of funds are likely to come down. We have already reduced our rates on term deposit and our savings account. We already seen 20 basis points cost coming down on both of these from previous quarter to this quarter. The cost of funds should lead to further improvement in terms of the operating profit. In terms of cost, we are steady state. We have done all the platform development. I guess what then is incremental inflation increase in cost. So, stability in cost with higher disbursement should see improvement over next three quarters, the PPOP of the operating profit. So, that is absolutely the execution plan. Okay, sir. Thank you very much, sir. Thank you. Thank you. The next question is from the line of Harsh, who is an individual investor. Please go ahead. Hi. Can you please update on the fundraise process? What is the quantum and timeline? Harsh, can you please be a little louder? Can you please share an update on the fundraise process? What is the quantum and what are the timelines that we are expecting? Right. So if you recollect, we mentioned last time, we have already taken approval from the board and the shareholders for a fundraise of INR 750 crore. I think we will intensify the engagement with the potential investors. We are hoping to do that, if not this quarter end, maybe early month after that. That's the timelines we're looking at. We're just waiting for the results, and then now we will intensify the discussions. Okay. Thank you. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Sagar from Spark Capital. Please go ahead. Thank you so much, sir, for the opportunity. My first question was related to provisioning. I wanted to know what is the PCR that we are holding in our MFI portfolio? We'll be holding, I think, about 62% in MFI. And you want to answer that? Yeah. So 62%? Yeah. Overall, after that, overall unsecured is around. PS just mentioned. Yeah. That is right, sir. 62% is the PCR for the MFI portfolio, you're saying? Correct. Overall, the bank level is 59%, and for JLG, it's around 62%. So is it safe to assume that in the next two quarters, we will be required to do further provisioning because of the accretion of NPAs? Because as far as my understanding goes, you will need to provide higher for the unsecured slippages, right? So already the process is that we provide 40% in the first on NPA itself in case of JLG. So that's why this is already higher on its own higher percentage. Yeah, obviously, based on the collections, I mean, we'll have to see what is the additional requirement on quarter-on-quarter basis based on the recovery and these further slippages. So very difficult to anticipate today, but yes, there will be some additional provision for sure in next quarters also. Because for the LPAs that are accrued in the MFI portfolio, if we have done provisioning for 62%, then actually what my point was that you will need to do at least 100% you will need to provide 100% for the NPAs that are already there in the microfinance as concerned. So that is why my point was that you will need to do further provisioning in the next quarters because all banks and NBFCs have done in the last three quarters 100% provisioning for the NPAs that are accrued actually because of this over-leveraging crisis. My second question was related to our diversification. Yeah. For the diversification, my point was that in the MFI portfolio, our majority of the advances are coming from Bihar and UP. Almost 84% of the loans are sourced from there. So what are the plans to diversify at least in the JLG portfolio? Okay. So broadly speaking, I mean, it's not 84%. I'll give the exact details. In terms of state level, it is not 84%. 69%. It is a portfolio. It is 69% actually, not 84%. But having said so, when we are talking diversification, we are looking at from two angles, one from the geography and second from the product angle. So you also mentioned that our JLG portfolio, which has come down to almost 45% of our book right now, which you are aware that almost we started at almost 100% in 2017. So there is a long way we have come to that level, and now it is only 45%. That is one part. As far as JLG's business is concerned, we are working in 11 states, which is northern and central belt, and we have seen some diversification. We have gone to places like Odisha and Rajasthan during the last two, three years, and there is some diversification. More diversification will happen through that because we are not going to grow our JLG book to that extent. The major growth will come from the non-JLG, which is pan-India. It is not limited or linked to any of the states. In fact, there we are a pan-India player, be it MSME, be it housing, be it CE and CV businesses. So overall diversification of the geography as well as product is happening on a regular basis. You'll see that next two to three years' time, there will be a significant I mean, from here also, there will be significant diversification of portfolio and geography. That's a continuous process, sir, in our case. Okay, so can you quote that what is the share of secured to unsecured that you are eyeing in the next two to three years, sir? So currently, we are around 45% is secured. And I think this maybe if you look at medium-term plan, I think because JLG portfolio is coming down and others are very limited unsecured. So at least we can expect in medium term, this mix will go to around 50-50. If you look at two to three years' horizon, our secured will be more than 50% if going forward also. Okay. My third question was related to the leveraging of the existing branches. In the last three years, we have significantly expanded our network in terms of branches. But still, the utilization of the branches, utilization of the employees is still very low compared to the industry. So what are our plans to scale up? Because that will lead to operating leverage that will only scale your ROE. So what are the plans to actually leverage our existing branches so that at least. That So very important point, sir. I think our entire focus is right now, as you mentioned about the diversification, that is one part. And second, on the operational efficiency. So this year, other than barring a very few branches, which are basically split branches for JLG, we are not opening branches. Our idea is that we have enough number of branches right now. And you mentioned that during the last two to three years, we have opened many branches. So we have a large, you can say, manpower base, and we have a large network base right now, and we have a good client base also. And that is what we have started. In fact, we have a big focus on the cross-sell right now. I also spoke, when I gave the opening remarks, we have a big focus on the cross-sell part so that our customers are able to get more accounts or more products from us. So there is a big focus on that, and you'll see a big change because of that. Without expanding the network, I think we'll be able to give more. We will be able to expand our balance sheet, and that is what will be visible, sir. In fact, when we have to expand our other products like, say, MSME or housing, in fact, we keep expanding to newer locations without opening a branch. So that is also keep happening on a regular basis. So you'll see that the operational efficiency part will play a big role as far as medium-term, next two to three years' trajectory, two to three years' balance sheet, next two to three years' performance of the bank is concerned, sir. That is the focus area for us right now. Okay. Thanks. I got your point. My last question was that what is the PCR that we are eyeing for the MFI portfolio by the end of FY26? I guess you may consider about 10% more. Of course, as we said, that as normalization happens and we have the collection efficiency for the interventions we have done, it should be plus 10% from where we are. Okay. Okay. Thanks, sir. Thank you. Thank you so much, and all the best. Bye. Thank you, sir. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Anand Dama from Emkay Global. Please go ahead. So thank you for the opportunity. In your presentation, it shows that your collection efficiency exceeding the prepayments has dropped to 82%. Which states are basically contributing this? Is it the Uttar Pradesh, Bihar, or the other states like Karnataka where you have some presence, and there you are seeing the drop in collection efficiency? So in our case, there are some pockets where we might have challenges. And just to talk of Karnataka, actually, we are not there in South at all. I mean, we are not in Karnataka. We are not in Tamil Nadu. And all these were the impact of guardrails only. And I mean, the resultant reasons coming out of guardrails. So there was specific state per se. There might have been some pockets where we might have challenges. So for example, some portion in the Bhagalpur in Bihar or some portion near Gorakhpur in UP. So there might have been some elevated, you can say, collection issues in some of the pockets. But there is no geography specific. There is no state specific in our case. Unlike in some players, it might have been because of some of the states where there have been specific challenges. In our case, largely, it is because of the impact of Guardrail too. In these pockets also, is it more of economic distress which you are seeing at the borrower level plus the MFIN guardrail, or there is something more to it? Because I think we are also getting closer to the elections. So what basically explains the pocket-wide stress that you are seeing? So sometimes it may be specific to some entity also. Suppose you have some issues in terms of local-level issues, or sometimes we might have some staff issues or the distance from your branches issues. So those might elevate these things. And in some pockets, last year, we had seen there used to be a Karz Mukti Abhiyan or Andolan, what we say. We had some impact in some pockets of Bihar and the Gorakhpur and that belt of UP. So these are very small, isolated things, but sometimes they have an impact for a longer period. Sometimes some pockets, again, there may be some specific issue because of some natural calamities or those type of things. Again, those are the isolated things. So those might have the reason. Sometimes maybe it's an operational issue with the entity also. As for elections are concerned, as I mentioned in past also, and I think elections have never impacted the JLG part, and especially the places like UP and Bihar, and we don't foresee any challenge or anything on account of this. What generally happens because of elections, there may be some restriction on the local operational part. Movement of cash and those type of things get little impacted during that period. But otherwise, as long as your operations or any impact on the collections part is concerned, disbursal part is concerned, we don't anticipate, and in past also, we have never seen that. Right. Secondly, my question was that is it possible to get your 3+ lender portfolio in terms of borrowers and also your all outstanding loans? Of our lenders? 3+ lender portfolio? Yeah. 24%-25% of our customers have more than three lenders. So ours plus three lenders. In terms of portfolio, how much is the outstanding loans? In terms of portfolio, also it will be in the similar range. Not much difference. Of these 3+ lenders' portfolio, is it possible to tell us what is into SME and how much is into NPA? No. At this point of time, it will be difficult to say, but it's certainly more than whenever the number of lenders are lesser. Sorry, I didn't get you. Sorry. So Anand, I can share the details with you. Maybe I don't have exact full details right now, but I agree that we have the experience where a number of lenders, there is a direct correlation between these two things. We have seen it many times in the past, also during last almost now it is one year. In fact, first August, the guardrails are put in place. And wherever there are more number of lenders, it has impacted badly. But I don't have the exact data right now with me. I'll certainly share with you offline after this. Okay. And, sir, third is, do you see any stress in the CV segment? Obviously, your portfolio is pretty small, but still in that segment, are you seeing some stress? For last around a year, we saw some, I mean, not the way we have seen in some of the things like JLG, but yes, it was little higher than usual, you can say, we had seen. We had taken corrective actions also. We put little higher two things we have done. One, we have reduced our rather three things we have done. We have reduced our overall disbursement. In fact, we used to disburse almost INR 30-60 crore. Now it is in the range of INR 20-25 crore per month. We have reduced that part. Some of the pockets where we thought that these may be vulnerable, we had stopped disbursement in those places altogether. In fact, some of our sales team, people were also moved to that so that before it goes out of hand, we should be able to control that. And another thing that we have done. We have focused more on the second-hand vehicles or used vehicles, which I spoke in my opening remarks also. It used to be almost 5% or so till one year back. Now it is almost 30%. There the losses because LTV is lower in that case. The propensity of losses is much lower. So I think these are some of the things we have done so that it doesn't go out of hand as far as the Wheels Business is concerned. Yes, sir. Thanks a lot. Thanks, Anand. Thank you. A reminder to all participants, you may press star and one to ask a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The next question is from the line of Anand Mundra from MyTemple Capital. Please go ahead. Hello. Thank you for the opportunity. Sir, so we've seen some other lenders give a commentary that there is some stress appearing in the MSME segment, and for us, I think that's the second largest portfolio, so just wanted to check what has our experience been in this vertical? Our experience is there is not much so far. And largely because in case of our MSME, it is largely secured portfolio. These are all against hard collateral. I again don't have exact number, but almost 95% of our portfolio is a secured portfolio as far as MSME is concerned. A very limited portfolio is unsecured there. And we have not seen much change. I mean, there are maybe some fractional change, but any significant increase or delinquencies or overdues that we have not seen so far in MSME. I think we just mentioned to previous caller Anand that besides JLG, where we had seen little higher uptake was the wheels. In all other businesses, I think things are looking under control. Maybe few basis points here and there. That's the only difference. Got it. Got it. And sir, sorry if I might have missed this out, but did you call out what was the expected collection efficiency in July for our JLG portfolio? No, but I think we had not mentioned that, but it was at the same level of June. 98.6% was our expected collection efficiency for July also. Okay. All right, sir. That's it from mine. Thank you, sir. Thank you. Thank you. The next question is from the line of Hainil Shah, who is an individual investor. Please go ahead. Hello, sir. Thank you for the opportunity once again. Sir, so how do we see FY27 if you can guide us a little bit or since FY26 is more tethered in profitability or due to JLG issue? Sir, broadly speaking, as I mentioned, we are not giving guidance only because JLG uncertainty has not gone away completely. But if you look at a medium-term horizon, certainly the way we have done our liability franchise, in fact, currently we are restricting our liabilities just to not take too many liabilities because our asset growth has been little lower. So that franchise is working very well. Our asset franchise, other than JLG, everything is working very well. Even within JLG, MBBL franchise is working well, and we have got some other high-yielding products like Micro-LAP and those type of things also. Even when we talk of used vehicles in wheels business, that is also giving better yield. So I think, and we have seen good improvement in the yield overall in MSME, be it MSME, be it housing also. So in medium term, we expect that we should be able to give a 15% plus type of ROE if you look at next three years' horizon also. We are confident of giving that type of ROE on an overall basis and a good growth of around 25%-30%, what we expect if you look at a medium-term horizon. This year, I think, is little difficult because of JLG issues. Okay. Can I ask one more question? Please, sir. All yours. Thank you. Okay. Sir, since we have registered with CGFMU, are we required to make provision in future such situation arise or how can you throw some light on that? So, I think the way the process operates. Maybe the CFO can say if I'm not correct. The provision is required to be made upfront, in fact, in case of all guarantee schemes. As in, when the guarantee claim becomes mature, you get claim money, and then you have to net off from the provision you have made. So, first time, you have to make the provision. That is my understanding. Sarju? That's correct. Yeah. Okay, sir. Thank you for the opportunity. Thank you, sir. Thank you. A reminder to all participants, you may press star and one to ask a question. Let's wait for a moment. The next question is from the line of Harsh Sadhya, who is an individual investor. Please go ahead. Hi, sir. I wanted to understand. So as your secured loan book shrinks, what is the realistic margin number that one can expect at a normalized level? Because it's already shrunk quite substantially, but currently, of course, there are interest reversals which are happening. At a normalized level, what would your margin number be? So one is that I think our unsecured will certainly come down. Secured will go up. But within secured also, there are some little better-yielding or high-yielding products. And also, in terms of cost of fund, it's coming down. Operational efficiency is also improving. So again, I mean, what we can estimate on a medium-term basis, our margins will improve from here, which has really come down. In past, we were in the 9% plus, but I think 8.5% plus margin should not be a problem. I'm talking NIM should not be a problem. In the medium term, again, I'm talking of medium term. It's not for this year. I want to make it very clear. This is for the medium range to look at two to three years' horizon from here. Close to 8.5% NIM should be possible. With the change of mix, that's important. Change of mix, but because we'll get the operational efficiency, we'll get cost of funds decline, and overall benefits of scale. So I think that is what we expect. Okay. Yeah. Very clear. Sir, with regard to your recovery, you've said that Q2 onwards, you will start to see recovery because you blamed MFIN for Q1 FY26. Q2 should start to see recovery, but you're also saying credit costs will remain elevated. Can you give us some perspective on what's happening? Are recoveries expected in Q2 or Q3 onwards? What should one see? Sir, as you mentioned, whatever NPA we have seen in the past, in the last year, Q3, Q4, and again in Q1. So incremental provisioning would be required to be done. So even when the incremental slippages are on the lower side, we'll have to provide for NPA which is not being collected. So that's why there will be some lag in terms of NPA gross slippages and in actual credit cost in the quarter. So despite a recovery, you will still see a larger credit cost overall, and therefore your credit cost will largely remain flat in Q2. Is that the right understanding and the right way to look at it? Yeah. Yes, sir. Yes. That's right. Understood. Thank you so much. That's all from me. Thank you. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Yeah. Thank you, everyone. Thanks a lot for joining our investors' call. And we have clearly mentioned currently, yes, there is a stress in JLG portfolio which we are working on, and we are confident that it's a matter of few months from where things should become certainly much better from where we are today. And our all other verticals, including the non-JLG part and the liability part, working really well. We are seeing a good traction in terms of operational efficiency part is concerned. Cost of funds are coming down. So I think overall, while currently it might be a stress scenario, but if you look at the medium-term horizon, I think we should be able to do much better on all counts in terms of all the KPIs, all the parameters we expect to do much better. So once again, thank you very much for joining the call. ICICI team, thank you very much for hosting us. Thanks a lot. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.