Ladies and gentlemen, good day, and welcome to the Utkarsh Small Finance Bank Limited Q4 FY 2026 earnings call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. I now hand the conference over to Mr. Chintan Shah from ICICI Securities. Thank you, and over to you, sir. Yeah, hi, Dipesh. Yeah, thank you. Good evening, everyone, and welcome to the Q4 FY 2026 results conference call of Utkarsh Small Finance Bank. We would like to thank the management for giving us the opportunity to host this call. From the management, we have Mr. Govind Singh, Managing Director and CEO, Mr. Sarju kumar Pravin Simaria, Chief Financial Officer, Mr. Amit Acharya, Chief Risk Officer, Mr. Virender Sharma, Head Micro Banking, Mr. Sourabh Ghosh, Head Consumer Banking, and Mr. Abhay Kataria, Head of Assets. Now without further ado, I would like to hand over the floor to the management. Thank you and over to you, Govind sir. Thank you, Chintan. Thanks a lot. Thanks for hosting this call. Thank you everyone for joining our quarter 4 FY 2026 earnings call. The fourth quarter of FY 2026 has been a period of renewed growth, proof of resilience and cautious optimism. As a part of industry, we also went through adverse impact of MFI segment, as you are aware, guardrails for a longest period of one and a half year. However, for us, FY 2026 has been a year of deliberate choices, prioritizing stability over speed, quality over quantity, and resilience over short-term expansion, growing so that we emerge with a fundamentally stronger, less cyclical franchise that can deliver sustainable returns over the medium and long term. FY 2026 began under the shadow of legacy stress and a cautious environment. Over the course of the year, we focused on stabilizing collections, tightening underwriting, and rebalancing the portfolio mix. These actions were designed to arrest deterioration, reduce fresh slippages, and created the conditions for a durable recovery. By quarter four of FY 2026, we began to see tangible green shoots, disbursement improved meaningfully, SMA pools contracted, fresh NPA slippages declined sharply, recoveries and upgradations increased, and collection efficiencies strengthened, all of which point to the strategic measures taken, taking hold. Concretely, disbursement improved across both JLG and non-JLG segment in quarter four FY 2026. JLG disbursement grew 58% quarter-on-quarter and grew 2% year-on-year, while non-JLG disbursement grew 41% quarter-on-quarter and 51% year-on-year. These improvements will expand the portfolio base going forward and reflect a calibrated return to lending activity. At the same time, our ex-bucket collection efficiency in the JLG segment improved to 98.7% in March 2026, up from 98.5% April 2025, the highest level in the last four quarter, a direct outcome of strengthened field execution and targeted collection initiatives. Fresh NPA slippages, net of recoveries and upgradation reduced to INR 710 crore in the Q4 of FY 2025. Our GNPA ratio improved by 330 basis points quarter on quarter to 7.7% as on March 26. These are the early measurable signs that our corrective actions are beginning to deliver. Our central theme of FY 2026 has been structured de-risking of our unsecured exposure and a strategic pivot toward secured and higher yield, lower risk portfolios. This is a deliberate long-term shift to reduce cyclicality in the credit cost and create multiple avenues for growth beyond JLG lending. We have consciously moderated our JLG exposure to around 28% of the gross loan book and around 30% including BC JLG as on March 2026, down from nearly 88% and 90% including BC JLG in March 2020. This reduction reflects both selective contraction of the JLG book, which declined by around 10% during the quarter, and a purposeful shift from new flows into attractive products, alternative products. As a result, secured lending now comprises 51% of our gross loan book, up from 43% a year ago. This structural shift is already changing the risk profile of the bank and will over time enhance stability of margins. Within micro banking, our Microbanking Business Loan targeted at graduated JLG customers with proven repayment discipline have shown exceptional traction. MBBL portfolio grew 122% year-on-year and 40% quarter-on-quarter and now represent 27% of our micro banking loan book. Penetration remains below 15%, which gives us significant headroom to scale this product to a much larger share of our customer base while preserving asset quality. To further de-risk incremental flows, we have registered with CGFMU for credit guarantee coverage on eligible JLG and MBBL disbursement with effect from March 17, 2025. 45% of our micro bank finance book for disbursement till quarter 3 FY 2026 already covered under the guarantee scheme. Counting quarter 4 FY 2026 disbursement, 70% of the microfinance book is covered. This coverage materially reduces incremental portfolio risk on new disbursements and supports portfolio stability as we scale higher quality secured products. Diversification beyond JLG has been a key strategic priority, FY 2026 has seen healthy momentum across our non-JLG lending businesses. These segments not only broaden our revenue base, also deliver attractive yields and more resilient collateral profiles. MSME loan book expanded by 15% year-on-year to INR 4,456 crore, supported by the newly started Micro LAP segment, which is delivering disbursement yield of 18%. Housing loans grew by 8% year-on-year to INR 990 crore, and our BBG portfolio, Business Banking Group, portfolio, fully secured against immovable collateral grew by 19% year-on-year. CV and CE segment also was indicating the need to look at the mix of new versus used vehicles as the former was signaling riskier behavior and therefore, the loan book contracted by 1% quarter-over-quarter to INR 1,090 crore, and the share of used vehicles grew to almost 30% in FY 2026 from less than 15% a year ago, reflecting our strategic tilt towards more resilient asset classes. Collectively, these moves are increasing the share of secured assets in the book and improving overall portfolio resilience. On the liability side, our focus has been on building a granular low cost deposit base and aligning deposit growth with disbursement. Total deposits were broadly stable with 0.4% year on year growth and around 3% quarter on quarter growth, while retail term deposits grew by 20% year on year. Our CASA deposits increased by 11% year on year and 13% quarter on quarter, lifting the CASA plus RTD ratio to 83% as of March 2026 from 17% on March 2025, and the CASA ratio improved to 24% as on March 2026. These improvements reflect better quality of account sourcing and a conscious reduction in reliance on bulk deposits. In response to the RBI repo rate cuts, we have phased reduction in interest rate on savings and term deposits remain competitive while optimizing cost of funds. These calibrated repricing have driven a reduction in our overall cost of funds by more than 45 basis points year-on-year and more than 20 basis point quarter-on-quarter. Moving from 8.3% quarter four FY 2025 to 8.1% in quarter three FY 2026 and 7.9% in quarter four FY 2026. We expect cost of fund to reduce further as pricing continues to take effect. Repricing continues to take effect. We also maintain prudent liquidity buffer. Our CV ratio declined to 83% as on March 2026 from 87% as on March 2025, and we ended the quarter with surplus liquidity of almost INR 3,800 crore and an LCR of 178%. These matrices provide us the flexibility to support calibrated disbursement while preserving balance sheet resilience. Income compression led to elevated cost income ratio for the financial year, which impacted the PPOP if adjusted for interest reversal due to fresh NPA slippages, then PPOP would be INR 140 crore despite pressures from legacy book leading to elevated credit cost and hence the loss, our capital position remains healthy. We reported a net loss of INR 188 crore for the quarter, driven by providing for legacy stress. Our capital adequacy ratio stood at 17.7% as on March 31, 2026, comfortably above the regulatory threshold. To strengthen the Tier 1 base and support future growth, we successfully completed rights issue of INR 950 crore in November 2025, which has been helping for our capital cushion. In parallel, we proactively address legacy stress through the ARC sale of stressed JLG portfolio. This was a deliberate value-enhancing decision that improves balance sheet strength and positions the company on a much cleaner footing for sustainable growth. Following creditors and shareholders on the reverse merger part, following creditors and shareholder approval obtained in accordance with the process of amalgamation. This, the second motion petition was filed with the NCLT on April 5, 2026 for the scheme of amalgamation of holding company UCL with and into the bank. The reverse merger is expected to complete in next few months, subject to NCLT proceedings. Operational discipline has been a central pillar of our FY 2026 response. We expanded our collections workforce for JLG and MBBL to more than 1,200 as on March 2026, operationalized a specialized call center for overdue accounts and split larger micro-banking branches to improve oversight and control. Training programs for new frontline staff emphasized our core processes such as center meetings and customer onboarding, ensuring consistent execution across the field. These structural investments have contributed directly to the improved collection matrices and reduction of SMA and the fresh slippages we reported in Q4 FY 2026. Technology and process transformation have also been critical. Our Utkarsh 2.0 technology transformation project is delivering tangible benefits in automation, productivity and risk control. Digital underwriting capabilities are helping us avoid lending to over-leveraged borrowers with 360-degree control parameter mapping strengthens monitoring across the credit cycle. Our bank is also in the process of launching new CBS in quarter 2 of FY 2027. These investments are not only improving the efficiency, but also enhancing our ability to underwrite and monitor risk at scale. We also recognize the importance of our people. During FY 2026, we incurred a one-time impact related to new labor codes, LTIP and ESOP grants and other employee benefit obligations in quarter 3 FY 2026, and its incremental impact in quarter 4 of FY 2026. While this weighs on the near-term profitability, it reflects our commitment to compliance, employee welfare, and building a motivated, capable workforce to execute our strategy. Training, productivity initiatives, and organizational agility will remain central to our transformation journey. Throughout FY 2026, we took a range of decisive actions to address legacy stress and position the bank for sustainable growth. These included tightened underwriting standards, calibrated disbursement, targeted recoveries and upgradation, selective portfolio resolutions, and measures to improve borrower discipline under the new guardrails. We have also been proactive to de-risking incremental flow-through, as we have mentioned earlier, through CGFMU coverage for eligible JLG and MBBL disbursement and by shifting new origination towards secured and higher quality products. We also have taken steps to improve the quality of new account sourcing and to cross-sell asset products through our liability-focused general banking branches, thereby increasing product penetration per customer and improving wallet share. These actions taken together are designed to reduce the probability of future stress and to create a more diversified, resilient earnings base. We view FY 2027 as a consolidation year, a period to convert the green shoots seen in quarter 4 FY 2026 into sustainable momentum while continuing to strengthen the franchise. Our near-term priorities will be to sustain improved collection performance, continued calibrated disbursement into higher quality segments, deepen secured lending, and accelerate liability mobilization to support growth in a prudent manner. In the coming years, we are aiming to form loan book growth of 25%-30%, with secured lending comprising around 55% of the portfolio, maintaining NIM of above 8%, and delivering a ROE of around 15%. Achieving these targets will require steady execution across underwriting, collections, product diversification, liability mobilization, and technology-enabled risk management. While sectoral headwinds and regulatory transitions may continue to influence near-term performance, we remain confident that strategic direction we have chartered will deliver a stronger, more sustainable franchise over the medium term. In essence, FY 2026 has been a year of challenge and purposeful transformation. We have moderated risks, strengthened collections, diversified our portfolio, deepened our lively franchise, and reinforced our capital base. The quarter has shown that the bank is on the path of recovery and with increase in quality disbursement, better portfolio and deposit mix, improved asset quality with lesser stress slippages and higher recoveries upgradation, decline in SMA pool. We will continue to prioritize operational efficiency, disciplined execution, and organizational agility. Our strategy is not about chasing rapid growth at expense of stability. It is about building a fundamentally stronger institution that can withstand cycles, deliver sustainable returns, and create enduring value for all the stakeholders. We thank you for your continued support and confidence. With this, I conclude, and now we'll move to question and answer session. Thank you. Thank you very much. We'll now begin the question and answer session. Anyone who will ask a questions you may press star and one on the touchtone 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'll wait for a moment while the question queue assembles. The first question is from the line of Sagar Shah from Spark Capital. Please go ahead. First of all, congratulations to the management for posting at least better set of earnings as compared to a few quarters. Sir, I had some few questions. My first question was related to our asset quality. On the asset quality, you have mentioned the PCR on the bank level of around 59%. I wanted to understand what is the PCR that we are holding for secured as well as unsecured, both of them individually. Yeah. Sure, sir. Amit can just mention that. Yeah, hi. Amit this side. If you'll see on the overall book, PCR is 59.3%, as you mentioned. On the entire secured book, it stood at 38.7%, and on entire unsecured, it stood around 65.4%. Okay. 64.5% that you are saying is for Is it safe to assume that includes MSME unsecured as well as MFI, right? Yeah, right. But for, uh, own- When I mentioned unsecured 65.4%, it includes all unsecured loans, including MFI. Right, sir. Only for MFI, what is the PCR that we're holding, sir, now? Only for JLG, if you see, it would be 66.3%. Only for JLG. For MBBL as well as JLG mixed in? More or less on the same side, 66.3%. For MBBL and for JLG, we do the same kind of provision. Okay. Is it safe to assume that still some sort of provisioning is still left in the next two quarters for, especially for MBBL and JLG is concerned because even if we want to recognize 80% provisioning, aging provisioning, so still some sort of provisioning is left in the next quarters, right, for MBBL as well as JLG? Yeah, it is there. Okay. We booked on 85% provisioning and some portion on 70% is still remaining. Okay. Next year from FY 2028 onwards, we are migrating to ECL-based provisioning. What I wanted to understand that how well are we prepared for actually model our asset quality towards that? Because over in the ECL model, our provisioning has to be more aggressive especially on the SMA 2 assets. How ready are we? Have we figured out a model? How ready are we for the ECL transition, sir? Well, this Ind AS beginning is from first April is actually SFBs are exempted. No, we still don't have to follow that. I guess it will be some time before RBI brings us into that. Having said that, you know, while we have a pro forma Ind AS that we do, and given, you know, honestly, the provisioning for the last year, in terms of 5Gs that has happened, I guess our ECL provisioning, perhaps, you know, or the accounting IT provisioning would be equal to or maybe higher. Your question to be preparedness for Ind AS next year, it doesn't apply to us, you know, in terms of statute requirement. Okay. Okay, fine, sir. My second question, sir, was related to the MSME portfolio. Our GNPA in the last quarter, you mentioned was upwards of 12.5% GNPA on the MSME front. Now it constitutes 23% of your total lending portfolio. What is the GNPA right now and how is the something like, still now, the real impact of the West Asia conflict is going to have is going to reflect in the coming quarter. How what is the GNPA right now and how well are we prepared to actually face that? Are we facing stress in some of our existing portfolios? Sid, if you talk about retail MSME portfolio, the gross NPA stood as on March 26 at 3.4%. If you see, we do fund to a very, you know, normal ticket size. We do not fund, like, 20 crore or 30 crore kind of borrowers who have some export or larger export limits or the foreign currency exposure. As far as geopolitical situation is concerned, there has been no, you know, abnormal behavior in our portfolio so far, which we have been monitoring for last 2.5 months, when Iran-US situation got worse. We have a close monitoring on it. As far as it is concerned, there has been no issue or portfolio behavioral change in our portfolio as far as MSME is concerned. Okay. MSME, the GNPA has come down to 3.5%, sir. 3.4%. 3.4. It was at 12.2% you mentioned in the last quarter. Yeah. This, when we talk, I just wanted to add one more point. When we talk about this MSME portfolio, largely it is secured by hard collateral like residential or commercial properties. There is a, you know, security available to the bank in case of any defaults. Okay. Just one suggestion, sir, from my point or from my end. Within the MSME, you have around three segments. Within the MSME, you have the secured business loans, so you have unsecured business loan, you have Micro LAP also. If you can just give the break up actually within your INR 4,456 crore worth of portfolio, that would be very helpful, sir, to understand that what, at what direction the bank is going actually. That would be very helpful. Now my third question, sir, was related to the disbursements. Disbursements in JLG have actually are going up for the first time in almost I think in last many quarters, actually. What is the reason behind the same? Because our disbursements have three consecutive quarters of decline. Now it has moved up to INR 1,310 crores. Where are we exactly finding the value? Have we actually found something like still, have you gone tough through the underwriting? What is the new portfolio? How is the new portfolio doing actually? What changes have you made in your existing underwriting systems? Thanks. This is Virender. Just to answer your question, there has been, as you know that, in April 26th, MFIN 2.0 guardrails were implemented. Yes. April 25, the guardrails were implemented and there was a sudden, what you call, increase in par, which led to our focus of more onto the collection side and focusing on building up the collections. By 3rd quarter or October, November, we had nearly stabilized on our collections. We always had the, what you call, distribution and the people to do that part. Once the collection in early bucket started stabilizing, we started putting the thrust on sales back and we are adhering to all the guidelines as specified in MFIN 2.0 guidelines. Even industry had seen a upward trend towards the disbursal. Our to FY 2025 is 26 portfolio after the this is behaving very well with respect to the collections also. It is I will say still we are only at a 70% optimum capacity of disbursement and we should be stabilizing in the same ranges right now. Okay, sir. Lastly, what is the steady-state credit cost that, sir, that we are eyeing for FY 2027 and FY 2028. Sir, FY 2027, sir? So I- Retarget. Yes. In the previous call, we had mentioned about 2.5% steady state to 3.5% or 3%-3.5% for FY 2027 and 2%-2.5% in FY 2028. With this trajectory of slippages being arrested significantly in terms of SMA going down significantly, with the background that the new disbursements are happening under the new guardrail, with the background that we have a CGFMU cover, you know, I guess this is a very conservative, you know, number, but we will still stick to the fact that it will be around 3% for FY 2027, to 2.5% in FY 2028. We will do better than that. Assume, you know, the trajectory the way we are looking at them. The industry as well is endorsing coming back of the disbursement and the collection being 99.5% plus. I guess this is a conservative number that I am giving you. Okay. Fine, sir. Thank you. Thank you so much and all the best, sir. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Shivam Singh, an individual investor. Please go ahead. Good evening, sir. Good evening. I wanted to ask, what is the amount that we are gonna get back in CGFMU cover in the last one year that insurance that we have taken for MFI? The way it happens that, you know, I would say, you know, the maturity of NPA as we speak, I think, you know, still, it's not an NPA that the disbursement that we have started while our portfolios of 31st March 70% is covered under CGFMU, but the maturity of claim has yet not arrived. I guess, you know, may, I would hope it doesn't arise, frankly, but maybe a year and a half it takes, you know, the claim and settlement. We are also not even wanting to account this credit and therefore the entire numbers that we have said is without even considering the credit at this point, because that's kind of a experience, and we don't want to set into a windfall gain. At the moment, the cost of premium is embedded in my P&L, and since we don't have the NPAs, you know, from the new book, well, it appears to be a cost of premium, but we just, you know, protecting our future in terms of any adverse development for future. For your question to say that is anything matured under CGFMU, the answer is probably too early to, you know, give a number on that. Just to summarize that, you know, we have taken the cost of CGFMU for last more than a year now since last quarter four of last year. We have neither taken accounting benefits nor we have got any claim so far. Only expense have gone part, but in case something goes, you know, to that extent, in future we'll get the benefit. In current one we have not taken any benefit, only expense has been taken out, taken into account. Sir, how much of our capital got freed up because of that? I know that the risk weightage is adjusted if we take the cover. No. Even that has not been done by us. As I mentioned, we have not taken any benefit of any, these guarantee scheme. The accounting, we have done a very plain accounting, where we have not taken any benefit of this. As I mentioned, whatever is there, only expense part has been taken. No benefit either in terms of getting any claim or any adjustment in the NPA or capital adequacy has not been done by us. Okay, sir. Sir, regarding our Prime Minister's comment in the previous few days, what is our stance like? We are trying to grow at 30% and given the nature of the geopolitical situations, what is the segment that we are targeting, and how do we ensure that our credit cost doesn't increase? You see, I mean, you are aware that last year has been a year where we could not grow, so we are at the almost same level. We have a real low base right now from that perspective. We have got a full infrastructure in terms of manpower, in terms of number of branches and the lines of products and our channels. I think around 30% growth should not be a problem in the normal one. Our focus remains on the one. Obviously, we understand macro as well, so that remains our focus area. Besides that, as you mentioned, there are you know, various types of LAP products which we have been focusing upon, including the small ticket LAP and normal LAP as well as the BBG products. I think LAP and JLG will still remain our key products for going forward also. We have obviously we've done something like, you know, Gold Loan, which we think that we'll be able to grow bigger this year. There are some of the new area also which we start around 1 to 2 years' time. We think that there should be a, you know, further growth in that part. As far as the credit cost is concerned, we do understand, you know, the statement from the Prime Minister, but I don't foresee any challenge because I think most of our portfolio is for income generation and smaller ticket size. We don't foresee much challenge. Anyway, I think we are in recovery path, and we have got a good machinery as far as collection is concerned. We don't foresee any major impact because of that. Okay, sir. That was really helpful. Sir, in the secured segment. If there is a default, what is the timeline in which we can get physical control of the asset and auction it off? What is the LTV value of the secured asset that we are lending to? Hi. Amit Acharya. Normally, you know, when we assess the NPA case and bank decides that we'll have to go on the SARFAESI route, from there, various processes are involved and it takes around 6 to 8 months is a period. Somewhere six months, somewhere eight months, depending on the situation. That is the normal scenario, six to eight months you are able to dispose of the property completely by inviting the bid under the SARFAESI. That is one. Second is, the normal LTV if you will see on the portfolio side, it would be less than 65% around it should be there because mostly we do residential property on a loan value at 70%. On outstanding portfolio basis and including our all portfolio, like Micro LAP we offer only 50% and we do not go beyond that also. Overall it should be below 65%-60%. Sir, what is the average tenure of these loans? Average tenure you see the because the LAP may smaller borrowers opt for a longer tenure, so the average tenure would be around, you know, 12-13 years would be the average tenure given. But if you will see the entire portfolio, largely in secured in housing and MSME, customer, you know, takes this loan on an average of 8-9 years and dispose off or foreclose the loan within this particular period. Sir, what would be the risk weightage for this loan? This is when we talk about LAP, it is 75% is the risk weight largely. Okay, sir. Thank you so much. I'll join back in the queue. Thank you. Thank you. The next question is from the line of Rahul Kumar from Vaikarya Fund. Please go ahead. Yeah. Hi, thanks. Just one question. What are our capital raise plans? Immediately we are not having any plans for capital raise. I know, it is 17.7% but I think, this year we should be able to sail through on this capital base. Our idea is to first, you know, focus more on the at least when I'm talking, so when I say capital raise means I'm not talking equity capital. Obviously, we have other means of taking capital like tier two capital and sometime, you know, offloading some of the balance sheet items also. Idea is not to go to capital market this on immediate basis and raise through tier two or some other means this time, in case there are any shortfall or, you know, immediate requirement is there. Not to capital market. Okay. Understood. Understood. That's all. Thank you. Thank you. Thank you. The next question is from the line of Utpal Saikia as an individual investor. Please go ahead. Yeah. Thank you for taking my question. Actually my question only is that in the last con call, the management has mentioned, we are targeting for 15% ROE in FY 2028. I want to know only are you in line on that path? Also now see what I hope to what is behind. That is the only question from my side. Yeah. I'll confirm that, you know, 15% if you're looking FY 2028 and certainly we are there. We'll exit FY 2028 what, you know, above 15% capitalistic, sorry, the ROE. As far as what is behind, yes, what is behind us. I mean, you must have seen, you know, type of provisioning what is even if you have to take for quarter four also, it is largely of the legacy portfolio. I mean, we are creating a new good portfolio because of guardrails also. Also we have got a guarantee cover issued. We don't foresee much challenge, you know, going forward. Whatever provisioning you have seen, off late or maybe this quarter also is largely on account of the legacy portfolio. Okay. Thank you. Thank you. Thank you. The next question is from Bhavin Shah from Equirus AMC. Please go ahead. Hi. By when we are planning to reach net NPA ratio of less than 1% and how are you planning to provide provisions for the same? Can you just repeat the question? Please not hear it properly. Can you just repeat little louder, please? Yeah. Can you hear me? Now it is better. Yeah. By when are you planning to reach net NPA ratio of less than 1%? Because before the crisis I think as we are operating in the range of 0.3%-0.5%, and how are we planning to provide provisions to reach this ratio? If you can provide some more. Our idea that Yeah, sure. I think FY 2028 is what we expect that we should be in, you know, reaching this range and one obviously through, you know, reduction in the overall NPA recovering, whatever are the NPA of past, whatever is% is possible. Certainly as you see, you can see that we have been providing also for the NPA in past also. Now we have gone to almost below 3.5% also. Idea is to recovery as well as providing for during next whatever is the balance NPAs are there in next few quarter. Our estimate is that quarter FY 2028 we should be net NPA in the range you just mentioned. Of 0.3 to 0.5 or less than that? No, less than 1%. Within 1%. Yeah. Okay. We already reached three point- Three point- 3.3 is our FY 2028, you know, net NPA. FY 2026 is 3.3, and it has to reach around below 1% by FY 2028. Okay. Okay. Thank you. Yeah. Thank you. Yeah. Thank you. The next question is from the line of Kiran Roy, an individual investor. Please go ahead. Kiran, sir, please go ahead. Kiran, sir, can you hear me? Kiran, sir, please unmute yourself and go ahead. As there is no response, we move ahead. Reminder to all the participants that you may press star and one to ask a question. The next question is from the line of M. B. Mahesh from Kotak Securities. Please go ahead. Prasanna, sir, one question. On the non-MFI slippages, it has been running still high, about 4 odd%. If you would just kind of tell us, what is driving this number? Yeah. Amit. Yeah. Hi, Amit. Hi, Mahesh. Amit, our CRO, is just about to respond to you. Yeah. Yeah, yeah. No issues. If you see the non-MFI space or retail space, Wheels has been, you know, one of the problem area for us in the past, which we are trying to address. If you see the collection efficiency or the resolution percentages across the buckets in the last three, four months, since November onwards, we have controlled the NPA percentages. Yes, we need to bring it down drastically. The resolution in the earlier buckets. Flowing into NPA bucket, the SMA one and two, we have tried to arrest it and which we have done successfully. Second is that the portfolio makes movement. The past more than 12 months, we are trying to move away from new and doing more of the used. If you see the disbursement percentage contribution of the used on the overall portfolio, you will see it hovers around 12%. Whereas from last seven to eight months disbursement, you will see the needle has moved to close to 30%. 30% around the used business is being done. Also, we did lot of portfolio analysis last year, and we did lot of policy norms and other parameter intervention basis the portfolio analysis. If you see the last 18 months', disbursement, including new or used, whatever the bank has done, the disbursement post October 2024, the last 18 months, the new portfolio is performing pretty well as compared to the earlier portfolio. The NPA levels hovers below 2% post 2024 portfolio created. Thank you. -have been a major contributor in the overall. Otherwise, if you see the other portfolios like your Housing or LAP or even Micro LAP portfolio, or our BBG, which is a working capital portfolio, again, all these backed by hard collaterals like residential or commercial properties. They are under, you know, tolerance levels. Wheels has been the contributor in the overall retail lending, which you will see in at least another 2 quarters. This would also be in a very under control level. Perfect. Sir, Govind sir, in your opening remarks you had mentioned a PPOP number, which is adjusted for, I think, the slippages in terms of the interest income reversal. That number was INR 140 crores. Did I hear that correctly? That's right. That's right. We had INR 59 crore of PPOP, and we had a reversal during the whole year, all four quarters combined of INR 81. That adds up to INR 140, which is pure year reversals on the slippages that happened during the quarter. On interest reversal. On interest reversal due to slippages that go into the quarter that you reverse the last 3 years income or 3 months income. That's right, Mahesh. That number is INR 140 crores for the quarter if you adjust for slippage, interest reversals. No, no. It is INR 140 crore for the full year. That's all. Perfect. Okay. Perfect. Perfect. In your assessment, this number for next year, how are you looking at it, if you have some sense of it? No. If, you know, the trajectory of collection efficiency as we are seeing, you know, remains and the disbursement going around, you know, in the new guardrail, I guess this reversal should be arrested. It's a combination of your standard book going into GNPA, which you lose the interest. Sure, sure. Sure. -go up. By and large, I guess your steady state interest income, though not visible now, but that should find its revival in the, in the, in the coming quarters, next four quarters. The reversals by, you know, the nature will be less. We will see that as actual, you know, the book that where the interest accrual actually has to happen will be returning back. Perfect. Perfect. Perfect. What will be outstanding stock? If you look at your collection that you're seeing today, if you could just kind of give us a color on how much of recovery that you're currently seeing of the stock of bad debt which has been written off? Written off collection, and I've done this back of the envelope try to say the, you know, in my P&L, whatever is the credit for, write-off versus, you know, the write-off number on inventory, it works out to 12%-14% recovery. That has not changed as yet. It continues to remain in the same range. That is right. I just want to add, Mahesh, here that, you know, we have this headcount for collection that we ramped up primarily to erase the creepages from X but it's SMA. That normalization has already happened or maybe a quarter more to work on that. If that actually goes the way we are looking at, the allocation of that headcount, at least, you know, some decent 30% kind of an headcount will then be shifted for collecting the write-off for NPA. I presume in the sense that it's an execution plan, the write-off collection should be better off in the coming years because that extra collection force should now get allocated to collect the legacy or the NPA as a write-off. Perfect. Just 1 last question. Assuming that you are able to grow next year at 25%-30%, adjusting for the collection machinery that is sitting there, any sense on how much of OpEx will be re-required against it? How much of? OpEx. The operating expenses. Only for the collection team you are saying? No, no. I'm just saying in your sense, given that you have built some machinery around all the other assets, is it fair to assume that the OpEx is going to be meaningfully lower than the loan book? Just trying to understand some direction between the past investment made versus the growth that you're likely to see in the book next year. You know, I mean, as I said that one way to look at it is this collection force. When normalization happens, you may tend to. Correct. Yeah. I guess the idea is to go on the write-off collection. Even if it were to continue the cost, I guess the data will be in multiple in terms of retaining them, taking that cost and getting a credit on the P&L line for the NPA collection that I just mentioned to you, write-off and NPA. Mahesh, so I may not have exact numbers, but it will happen in two parts. First part is that I have got a cost, and I expect that I should be able to raise, you know, 20%-30% growth in the, in the portfolio with the same cost. Correct. That is 1 thing will happen. Second, suppose I have around 1,200, 1,300 people who are hardcore collection people only. Our expectation, and that is what is happening right now, the cost may be around 25%-30%, you know, whatever the amount they bring. Suppose they bring in INR 1 lakh, their cost may be around INR 30,000. I'm again a ballpark number. Because we have a large pool even, you know, which needs to be recovered, and we have seen in first 2-3 years' time, I mean, we are able to recover the chunk. Thereafter, it is 1 person, 2 person only. Idea is that at least for next one and a half year, let us keep this team there and whatever, you know, is their cost, at least three times of that I'll be able to recover from this collection team. These are 2 number. I don't know the exact number the way you expect, but this is how I think how it will happen. Viren, do you want to add something? Yeah. It is, Mahesh, in the last quarter we collected close to INR 50 crores from this NPA and write-off pool with this 900 odd people in the, at that time, in the field. Which is close to some 20% of the collected value from this pool. This vertical or this collection will continue to be stable for at least next couple of quarters, which will give us an upside on that side. Mahesh- Okay. Indeed, the other side because our, you know, the case load has actually gone down significantly in the range of now 330-350. Our expectation is that I'll be able to build, as I mentioned, additional 25%-30% portfolio with the same cost. My cost may not go down, but my income and my top line will go up. Correct. Correct. By around 25%-30% with the same cost. I think that is what will happen now. Yeah, that's what we are asking. Done. Yeah. Thanks, Mahesh. Thanks a lot. Thank you. Yeah, yeah. Thank you. Thanks, Mahesh. In the interest of time, we will take that. That was the last question for the day. I now hand the conference over to the management closing comments. Thank you. Thank you, ICICI team, for this, and thanks all the investors for your continued support. As you have seen, I think things have changed significantly during last few quarters, and we expect that, you know, next few quarters should be a significant improvement in the trajectory. As we have mentioned that for FY 2028, at least in the next two years' time, we should be back to 15% ROE and, you know, good return, you know, overall good, all KPI, KPIs. Thank you for your support, and keep exploring and keep talking to you. Thank you. Thanks a lot. Thank you. On behalf of ICICI Securities Limited, that concludes the conference. Thank you for joining us, and you may now disconnect your lines.