Good day, and welcome to the Utkarsh SFB Limited Q1 FY 2027 earnings conference 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 at the end of today's presentation. 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 would now like to hand the conference over to Mr. Renish Bhuva from ICICI Securities Limited. Thank you, and over to you, sir. Thank you, Manoj. Hi, good evening, everyone, and welcome to Utkarsh Small Finance Bank Q1 FY 2027 earnings call. On behalf of ICICI Securities, I would like to thank Utkarsh SFB management team for giving us the opportunity to host this call. Today we have with us the entire top management team of Utkarsh SFB, represented by Mr. Govind Singh, Managing Director and CEO, Mr. Sanjeet Kumar, Executive Director, Mr. Amit Acharya, Chief Risk Officer, Mr. Virender Sharma, Head of Micro Banking, Mr. Sourabh Ghosh, Head-Consumer Banking, and Mr. Abhay Kataria, Head of IT. I will now hand over the call to Govindji for his opening remarks, and then we'll open the floor for Q&A. Over to you, sir. Thank you. Thank you, Renish. Thanks a lot. Good evening, everyone, and thank you for joining us for our Quarter one FY 2027 earnings call. The first quarter of FY 2027 marks an important point in our journey. Over the last several quarters, our bank has navigated one of the most challenging operating environments faced by the microfinance industry in recent years. Throughout this period, our focus remained firmly on protecting franchise quality, preserving balance sheet strength, improving collections, and ensuring that every strategic decision was aligned with the long-term interests of our customers, shareholders, and other stakeholders. We are encouraged by the progress achieved across multiple dimensions of our business during the quarter. The actions undertaken over recent quarters are beginning to translate into measurable improvements in business momentum, asset quality indicators, portfolio composition, funding cost, and operating performance. While profitability has not yet fully normalized, this significant reduction in losses and the strengthening of underlying business drivers reinforce our confidence that the bank is moving in the right direction. Over the last year, our objective has been clear: to build a stronger and more balanced institution by improving the quality of new businesses, strengthening risk management practices, diversifying revenue streams, expanding secured lending, enhancing collection infrastructure, deepening customer engagement, and improving the credit quality and quality of our liability franchise. These efforts are now providing the foundation for a more sustainable growth cycle. One of the most encouraging development during the quarter has been the strengthening of business across both our JLG and non-JLG segments. Disbursement trends have improved significantly, reflecting both increased customer demand and our confidence in the calibrated growth. During quarter one FY 2027, total disbursement grew by 49% year-on-year, supported by JLG disbursement, which grew by 5% year-on-year, and non-JLG disbursement, which registered a robust growth of 93% year-on-year. Importantly, this growth has been built on strengthened underwriting framework and improved portfolio monitoring mechanisms. Our objective remains to grow assets of the right quality and risk profile rather than pursuing growth for its own sake. Consequently, equally encouraging are the trends visible in portfolio performance. The improvement in business momentum has been accompanied by continuous strengthening in asset quality. During the quarter, X-bucket collection efficiency in the JLG segment remained strong at 99.7%, up from 98.6% in quarter one of FY 2026. SMA pools within the Micro Banking segment contracted to 1.2% from 1.3% in March 2026 and 5.1% in June 2025, reflecting strong field execution enhanced collection processes. Along this, the total fresh NPA slippages net of recoveries and upgradations reduced materially to INR 125 crore, compared with INR 170 crore in the previous quarter and INR 400 crore in the corresponding quarter of the previous year. As a result, the GNPA ratio as percentage of gross loan portfolio stood at 5.9% as of June 2026, representing an improvement of 550 basis points year-on-year and 160 basis points quarter-on-quarter. These trends demonstrate the measures implemented over the recent quarters are producing tangible outcomes. As we assess the future shape of the bank, diversification continues to remain a central strategic priority. Over the years, we have consciously worked towards reducing concentration risk and building multiple growth avenues. Our JLG portfolio now represents 26% of the gross loan book and 26%, including BC JLG exposure, compared to 18% in March 2020, and 19%, including BC JLG exposure. Simultaneously, secured lending has increased to 51% of the gross loan book from 45% a year ago. This structural transformation is changing the nature of our balance sheet, reducing margins volatility, and supporting a more resilient risk profile. Within Micro Banking, the growth of our Micro Banking Business Loan product continues to validate our customer lifecycle strategy. MBBL serves customers who have demonstrated repayment discipline and are ready to graduate beyond traditional group lending structures. Further, we have expanded the product to cater to new to bank customers as well. MBBL portfolio grew by 147% year-on-year and 11% sequentially during the quarter, and now constitutes more than 30% of the Micro Banking portfolio. With penetration still below 20% of our customer base, there remains substantial room for further expansion. We believe this segment represents an attractive opportunity to deepen customer relationships while supporting business growth among our borrowers. Beyond Micro Banking, growth momentum across secure and diversified asset classes remain healthy. Our MSME portfolio expanded by 12% year-on-year to INR 4,482 crore, also supported by the Micro Loan segment, which is delivering disbursement yield of around 18%. Housing Loan grew by 8% year-on-year to INR 1,005 crore. While our BBG, the Business Banking portfolio, recorded strong growth of 40% year-on-year. In Commercial Vehicles and Construction Equipment segment, we have continued refining portfolio composition with greater focus on assets demonstrating stronger risk profile. The share of used vehicle in disbursement is around 30%, reflecting our emphasis on balancing growth with prudent risk management. Gold Loan penetration is also expanding through our digital LOS aimed at improving turnaround time, controls, and operational efficiency. Collectively, these trends highlight the emergence of a broader and more diversified lending franchise capable of contributing to long-term profitability and stability. Over the last several quarters, we have remained focused on strengthening our liabilities franchise, increasing granularity, enhancing customers engagement, and reducing dependence on borrowed deposits. Total deposits grew by 3% year-on-year, supported by CASA deposits, which grew by 15% year-on-year, while retail term deposits also increased by 15% year-on-year. Consequently, CASA plus retail term deposit ratio improved to 83% compared to 74% a year ago, and the CASA ratio strengthened to 22% as of June 2026. The benefits of the improving deposit mix are also reflecting in funding costs. Following RBI repo rate cuts, we have phased reduction in interest rates on savings and term deposits to remain competitive while optimizing cost of funds. As a result, cost of funds declined by around 40 basis points year-on-year and around 50 basis points quarter-on-quarter to 7.7% in quarter one FY 2027. We expect the full impact of repricing actions to unfold progressively over the coming quarters, providing further support to margin stability. From an earnings perspective, quarter one FY 2027 reflects a business that is steadily approaching normalization. We reported a net loss of INR 34 crore. This represents a reduction in more than 80%, both on year-on-year basis as well as sequential basis. As stated earlier also, to further de-risk incremental flows, we registered under CGFMU, Credit Guarantee Scheme for eligible JLG and MBBL disbursement, with effect from January 17, 2025. 60% of our microfinance book relating to disbursement up to quarter four of FY 2026 is already covered under CGFMU, increasing to around 80% upon including quarter one FY 2027 disbursement. This coverage materially reduces the risk associated with new disbursement and supports portfolio stability as we continue to scale higher quality secured lending products. During the quarter, the CGFMU scheme provided mitigation of around INR 75 crore in terms of P&L impact, contributing to a reduction in the credit cost to 2.3%, compared with 5.3% in quarter four FY 2026 and 8.5% in quarter one FY 2026. Importantly, the key drivers of future profitability, asset quality, credit costs, business growth, cost of funds, and portfolio mix have all moved in a favorable direction. While pursuing growth opportunities, we have remained committed to maintaining a strong liquidity and capital position. As of June 2026, the bank maintained surplus liquidity of around INR 3,200 crore and LCR of 227%. The CD ratio stood at 83.8%, and our capital adequacy remained at 17.4%, well above the regulatory threshold, providing sufficient capacity to support growth plans and absorb potential uncertainties in the operating environment. The bank is planning to raise around INR 500 crore through NCDs in the current year to accelerate growth initiatives and reinforce its capital adequacy. Also, we have taken a strategic decision aimed at accelerating balance sheet cleanup through the ARC sale of stressed JLG and Wheels portfolio and ensuring that we remain focused on future growth opportunities rather than legacy stress. We believe such actions improve transparency, strengthen the franchise, and create a clearer platform for long-term value creation. On the proposed scheme of amalgamation of holding company, UCL, with and into the bank, the NCLT, at its hearing on July 23, 2026, took note of the responses received from the relevant authorities. Wherever the replies were pending, granted another 10 days to file the same and hence fixed the matter of next hearing on August 6, 2026. The reverse merger is expected to complete in next few months, subject to NCLT proceedings. Operational excellence continues to remain a core area of focus. We have strengthened our collections infrastructure, operationalized a specialized call center for overdue accounts, enhanced monitoring processes, and training program for new frontline staff, emphasized core processes such as center meetings and customer onboarding, ensuring consistent execution across the field. Our collection workforce supporting JLG and MBBL businesses exceeds 1,200 personnel. We have also improved branch-level oversight and strengthened customer engagement mechanisms. These operational enhancements have contributed meaningfully to the improvements seen across collections, SMA trends, recoveries, and overall portfolio quality. Technology continue to play an increasingly important critical role in our transformation journey. Through the Utkarsh 2.0 technology transformation project, we are embedding greater automation, data-driven decision-making, monitoring capabilities, and process efficiency across the organization. Enhanced digital underwriting tools are helping us identify and avoid over-leveraged borrowers, while 360-degree control parameter mapping, strengthening monitoring frameworks and improving visibility across the trade cycle. The bank is also about to launch new CBS. These investments are expected to improve customer experience, strengthen risk controls, and support scaling of the business over the coming years. We have also 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. The bank's strategy is centered on improving productivity and operating efficiency rather than branch expansion. Employee headcount has been rationalized by around 1,700, while growth is being driven through enhanced productivity of the existing branch network, digital and technology investments. The bank is also undertaking various product and process simplification initiatives, including workflow automation, digitization of customer journeys, reduction of manual interventions, and streamlining of operating processes to improve turnaround times, service quality, and cost efficiency. As we look ahead, our priority remains clear. We intend to build on the positive momentum achieved during the last few quarters by sustaining collection performance, further improving asset quality, expanding secured lending, accelerating growth in diversified asset classes, and deepening our liability franchise. At the same time, we'll maintain disciplined underwriting standards and a prudent approach to risk management. We are aiming for a loan book growth of around 25%-30%, with the secured lending comprising 65% of the portfolio, maintaining NIM of around 8% and delivering an ROE of 15% by FY 2028. While sectoral headwinds and regulatory transitions may continue to influence near-term performance, we remain confident that the strategy direction we have charted will deliver a stronger, more sustainable franchise over the medium term. FY 2027, in our view, is a year of rebuilding earnings strength and translating operational improvements into sustainable financial outcomes. The progress achieved during quarter one is encouraging because it demonstrates that the recovery process is firmly underway. We are seeing stronger disbursement, improving portfolio quality, lower stress formation, better recoveries, a healthier funding mix, declining cost of funds, and increasing transaction cost across diversified businesses. Together, these indicators point toward a franchise that is emerging stronger, more balanced, and in a better position for the future. With this, let me hand over the call for the question answer session. Thank you very much. Thank you very much, sir. 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, we will wait for a moment while the question queue assembles. We have our first question from the line of Shreya Chatterjee from Page Licht Capital Finance. Please go ahead. Hello, sir. Thank you for taking my question. I would like to just give some color onto what would be the portfolio rundown of your JLG portfolio, like, going ahead in the year. What percent of your portfolio did it be and the overall MFI portfolio also, and how much do you plan to run down the book as well? Just to mention, we have been talking past also. We have a strong belief that the JLG and overall Micro Banking has a good potential for growth also. Our idea is to remain almost in the same range, around 25% or so, if you look at JLG part, over a period of next two to three months also. Sorry, two to three years also. Around 25% is what we expect our JLG portfolio will be. Okay. If you're not planning to run down much of the JLG portfolio from here on, what would be the total overall portfolio growth for this year and the next year? As you mentioned, in case of JLG, and I also add, we have Micro Banking Business Loans also. Our range is around 15%-20% growth as far as the JLG and the Micro Banking is concerned. We have mentioned that overall we expect that 25%-30% growth will be there, but JLG growth will be below 20% overall. Okay. Sorry, ma'am, just to add, I guess, maybe if you are referring to the stress that has been seen in the past in the JLG and the fact that how are we looking at that growth in this book. Two things. One, that environment, as we speak, all the disbursements are happening under the new guardrail, which is to say that the behavior of the new guardrail, the slippages are normalized. To that extent, the past guardrail legacy can be called as past. Second, in any case, you have covered this portfolio under the CGFMU guarantee scheme for any abnormality that can in future come. One way is that we have already, as far as mix is concerned, and this was the planned trajectory our couple of quarters, eight quarters that we will move from unsecured to secured and we will bring the JLG or Micro Banking to 1/3 of the portfolio. We are already almost on track on that trajectory. While we grow the portfolio on total portfolio basis, I think we will continue to keep the cap around 25 as Govind mentioned, but still grow this book and not thinking about running down the book as you started the question. That was helpful. If you could just guide about what's your guidance for the NPA and the credit cost for the rest of the year, and how much provision do you expect to build up because of that? Ultimately, apart from the NCD fundraise that you are doing, any additional fundraisers that are planned in the medium term? On the credit cost, I know we would be around, on an upper side, being conservative, not more than 3% or 3%-3.5% as we go along. On your second question, we are raising INR 500 crore, but we are also repaying one of the tranche that we have of INR 200 crore, which is at 12.5% coupon. We are prematurely repaying that about a year earlier. That should happen in mid of August. We have already put this formal announcement across. That should save the bank around INR 20 crore as we go along. Primarily, the idea was not to carry INR 200 + INR 500, INR 700 crore into debt, and that INR 200 crore which we are repaying or prematurely or making an early redemption had no delta on the CRAR benefit. What we are going to do now is raise NCD under tier 2 classification. That helps us to boost our CRAR. On the back of the envelope, this INR 500 crore should inch up the CRAR by around 250 basis points. Got it, sir. That was helpful. Any indications on the early signs of stress or portfolio at risk for your new lending book that you are giving away? The new lending book, any par numbers that you would like to share? Amit this side. If you see, we do track the pre-guard rail and post-guard rail portfolio, which we have built up in the micro banking and JLG space. If you'll see post-guard rail, that is 1st April 2025, if you'll see our total gross NPA and majority of our outstanding book now belongs to that particular period in JLG in particular, and our gross NPA are below 2%. To be precise, it hovers around 1.85%-1.9% only. Just to add, this book now, starting mid of January 2025, our JLG or our MBBL portfolio is covered under CGFMU. Whatever NPA is coming post April 2025 is also covered under CGFMU. Probably just a point to add, that as we speak, as of March, my CGFMU coverage on the portfolio was 60%. If I take June, it is 80% of the portfolio is covered. This portfolio is JLG, MBBL, including the CGFMU. 80% of the portfolio as it stands as on June is covered under the CGFMU guarantee scheme. Got it, sir. Thank you. Yeah. Thank you. Thank you. We have our next question from the line of Sagar Shah from Spark PWM. Please go ahead. Yeah. Thank you for the opportunity. My first question, sir, was actually related to your MBBL portfolio. We are seeing a sharp jump, especially in the MBBL disbursement side, actually more than 100% growth. Is this portfolio completely to the existing customers who have demonstrated good behavior in their JLG portfolio, or is it something like are we sourcing some new-to-banking customers also for these kind of loans? Currently, I think it's 99.9% portfolio of our existing customers only. We are just piloted, you can say the open market or the new-to-bank customer. I mean, the number may not be even 100 or 200. It's primarily almost 100% is our existing customer with a history with us. Two to three, what we say, cycles have been exhausted in these cases. They're existing customers only. Okay. Basically, on the underwriting front, how is it different from the normal JLG front? What sort of different underwriting measures have we taken for this portfolio? Hi, this is Virender. Sorry. Primarily this portfolio is built up on the premise it reaches only to the people who are having an established business activity, the credit is done by the separate underwriting team, which does the complete underwriting as is the norm in all other unsecured loan business. We have built up this business over a period of last four years. The incremental business has jumped in the last one year, after learning experience of last three years, which is helping us growth in this side and our focus after the study of last three years on the portfolio. Additional to that, we also cover this portfolio under the CGFMU scheme. With a very stable collection team and as well as delinquencies being closely monitored in that front. Now, just to add, Virender, I guess when we are doing MBBL, we are having a dedicated collection team for MBBL business as well. If the headcount that we have spoken earlier for JLG stays with JLG, as we grow, we do look at the necessity in terms of the support for the collection, we have given collection headcount to teams to ensure that MBBL has a net-net, the contribution and the bite of the business remains, NPA remains checked. Hi, Amit. Just to add again, post-April 2025, we will see the outstanding out of this portfolio, which is close to INR 1,250 crore. INR 1,042 crore is post-April 2025. Out of that particular pool, we have only 0.4% as NPA. We do track whatever interventions in terms of process, underwriting standards we have done, what kind of outcome we are getting in terms of asset quality. Now my next question was related to the asset quality. We are seeing that your recovery/upgradations are getting slower, actually. We expected this quarter to be strong in terms of recoveries, but it hasn't happened. The NPAs that have been showed in the past, actually, why is the recovery being so slow or it's non-recoverable? Is it like that way? I guess, in particular, you would see that. I can say that as far as MB or JLG is concerned, almost all things are sorted. When it comes to retail book, we have certain accumulated recoveries from SARFAESI, and it is a matter of pushing that to come back. As we go along, when you see this legal litigation bucket where some amount is lying yet to be recovered, you will see that unfolding in coming quarters. That is one of the reason where it's taking time, at least on the retail side, the secured book side, to get this encashed. On the secured book, if it is getting time, what about the unsecured? Every small finance bank, almost eight out of 10 small finance banks are getting stronger on recoveries, at least what the last two years that every bank had faced on the microfinance side. On the microfinance side, out of the INR 69 crores that you reported in this quarter, how much was it on the unsecured microfinance book? Sorry, I couldn't. How much was unsecured and how much was secured? Close to INR 42 crores was from NPA and write-off pool in the unsecured fees. Microbanking. Microbanking fees. Out of 69, 49 was that? 42. 42. Okay. Got it. At least you expect the recoveries to pick up in the coming quarters. Is that what your guidance is? Quarter one was normally slow in that recovery. If you see, quarter four was good. We expect to see the pick up back in the quarter two and quarter three. That is it. I just want to add one more thing and correlate it and hope, I guess you buy this. Is one that we had inched up our headcount about a year and a half back, obviously, to improve our collection efficiency, which last five, six months has been above 99.5%. The headcount, as we added up, stands at about, say, 1,100 headcount only on collection, and I am talking of JLG. I just mentioned MBBL as its own source of collection. It comes at PF allocated to them. Once 1,100, the headcount that is lying in JLG, as we see normalization is happening in the credit cost, we would obviously shift some of this headcount for recovery of the NPA and write-offs. You would see some traction there in the coming quarters because at the normalized rate of credit cost in JLG, probably 1,100 is a bigger ask in terms of headcount being there. We will continue to hold them and deploy them for recoveries of the past NPAs and write-offs, I guess you should see some traction there in coming quarters. Now just one suggestion from my side. As you highlighted on the asset quality, that recoveries were taking time. The asset quality, if you can, on the investor presentation, on every segment-wise asset quality, if you can mention from next quarter onwards, what was the GNPA for every segment. Because I wanted to know what was the GNPA for MSME as on this quarter. We will do that. Point taken. We will do that. What is the GNPA as on 30th June for MSME? It was around INR 169 crores. INR 169 crores out of your INR 4,482. Yeah. Percentage-wise, you will see it, 3.8%. Okay. You see, I just wanted to add, when Sarju said it's taking time, means there are certain cases which are legacy cases, which has come into NPA in the last quarter itself. Now if you have to go for SARFAESI and auction the properties and take into possession, normally it's a process of six to seven months, and that is where Sarju said. Normally in secure, we have seen when we initiate the initial notices regarding this SARFAESI, majority of the cases and the customers comes and pays the overdue amount. That is where, because these cases have come into NPA in the last quarter itself, probably in the next two months, majority of them should get resolved without going for actual auction. Just wanted to add that point also. Okay, fine. Just last one from my side. In Utkarsh FY 2028, you were saying 25%-30% portfolio growth that you just highlighted on the guidance. 25%-30% percentage growth from FY 2026, right? No, we are talking year-on-year growth of around 25%-30%. FY 2027 also, you are eyeing 30% growth? Yeah, 25%-30%. That's giving a range, because market is also that way. In this quarter, we hardly have seen any growth, right? That is why. We have done write-off also because the write-off of the portfolio goes down, which will not reflect. That's why I'm saying 25%-30% is the range for this year, and our base is small right now. When I say small, it means because we have not grown during last two years, so base is also small. 25%-30% growth from this year and very similar type of growth we expect for next year also. I mean. In the top line. Sorry, I just want to add that if you really look at Q4, which is the beginning of green shoots and the momentum continuing in Q1, Q4, the disbursements across was 30%, which is Q4, our previous Q4, and you know Q4 is the loaded volume business in a financial service sector. Generally, Q1 is lower. Right. If you have a 30% disbursement growth, as we have shown, similarly it remains 48% again in Q1, the trajectory obviously is turning towards our internal discussions and management targets envelope. Endeavor is to really pick up and H2 will be a year where the target comes on a few to get that 25% growth that we are aspiring. The engine and the operations infrastructure, headcount, the new technology we have switched over to, the new LMS systems and all of that tech improvement. All that is now required is higher productivity, which is the same cost to get the high volume is what is going to be our key focus. Okay. Thanks a lot. Thank you so much, and all the best. Thank you. Thank you. We have our next question from the line of Saurabh Jain from SSJ Finance and Securities. Please go ahead. Hi, good evening. I'd like to lead my question with a few comments here. The management commentary seems to be more focused on the liability side of the balance sheet, where you're working on improving your cost of funds, increasing your deposits or so. As shareholders, our concern seems to be more on your asset side, the quality of your assets, where we don't have enough granular information in terms of the quality of loans that you have. You still seem to be talking about growing your loan book by about 25%-30% each year, even growing your JLG and MBBL book at probably the same rates or so, rather than running it down. What gives you this confidence that you can grow the book and with a net interest margin continuing with a net interest margin of 8%? What gives you this confidence that you can grow the book looking at the history of the industry and even specifically with respect to Utkarsh, that you can continue to give a healthy asset side of your balance sheet? I think if you see the way we have done and that's why we are using the word this is a consolidation year for us. Whatever product and services we have got, we are not adding anything new. We have been doing these products for some time and whatever experience we have gained, we have utilized those experiences and that is the basis. In fact, some of the places we have got around 1,100 branches across in fact and the type of productivity we can get from these branches, we have not reached, nowhere near optimum actually. If I'm able to do even my 70%-80% of the capability of my branches, we can do much more than this. Because of the experience, we are a little slow. In fact, that's why some people are asking quarter one, the growth is lower than what maybe people have anticipated. We'll see this growth will pick up. JLG, we still have a very firm belief in JLG. Yes, there have been challenges whatever challenges are there, I think because of I'm not trying to take a shelter of guarantee scheme, I think guarantee scheme whenever when the numbers or I'm talking the stress goes beyond average, I think then we'll get the benefit of guarantee scheme also which was not there in past. That will even out the challenges because of cycle there are issues, otherwise we see there is huge potential. Actually, if you really ask me, JLG, the way it has happened during last four to five years, people have not gone for new customers at all. There's a lot of potential there if we are able to do things good and again, we're very clear that we are not going to go out of our core geography as far as microfinance is concerned. In case I find a good potential, we'll go through partners, not through our own network. Wherever we have got network, we have got good experience because people have actually not gone for new customers also. Our sense is there is a good potential and there is a good requirement also. Industry also gone down during this period. If you see almost 30% de-growth has happened in the industry also. There is a potential which we intend to see that especially in the core geography of Utkarsh. On the other part, I think we still have a very small base. If I'm talking of housing, I'm having only INR 1,000 crore. I'm talking BBG, we are in the same range actually. Business banking group which has huge potential. We are talking gold loan. Gold loan we are around INR 300 crore right now. You can imagine the type of potential we are talking of. I think each and every segment where we have started, we are small that way and in percentage terms, I think 30% is not a very high growth from that perspective. These all numbers are, I'll not use the word achievable. These are well within when we talk about our plans for this year, 25%-30% growth in the top line should not be a problem. No, my concern is not with respect to your ability to grow your loan book. Frankly, your focus on growing your loan book is my concern itself. My question really is that should you be looking at growing your loan book? Yes, obviously, linear to the industry, for sure. The quality of the loan book itself still seems to be following the same pattern as earlier periods. Please correct me on that part. Even now, when we are talking about the secured part of the book, we are talking about you looking at protection under SARFAESI and recovering money through SARFAESI. Again, which brings in certain questions on your practice of even giving secured loans as such. Can you help me dilute my concern on these parts? No, certainly, maybe Amit can also talk about this part, the way we have done during the collection period is sometimes there may be some periodic spurts can happen in some of the portfolio or some of the accounts actually. There is a proper laid-down process. In fact, secured, the challenge is it takes a little longer time to settle. It remains in NPA status for some longer period. That's the only difference in case of. Let us accept this fact that in secured case also, the cases will go bad. It's not that these cases will not go bad in case of cases. The process followed is little different in that case. The yield is lower for sure, but I think the stability of portfolio is much better in case of secured. It takes a little longer time to settle whatever security you have got in some of the cases. That's the only thing which Sarju and Amit were talking about. Okay. Thank you. Yeah. Thank you. We have our next question from the line of Vatsal Chheda from PhillipCapital. Please go ahead. Vatsal, are you there? Hello, Vatsal? We'll move on to the next question from the line of Ashlesh Sonje from Kotak Securities. Please go ahead. Hi, team. Good afternoon. Sir, a few questions on the MFI book. Your total MFI NPAs are today at roughly around INR 740 crores. Correct me if I'm wrong on that number. Want to know what proportion of these MFI NPAs are now covered under the CGFMU scheme, and what is the NPA provision you are carrying against these MFI NPAs. That's the first question. Give us one minute. Maybe you can go to your next question by the time we just take that figure. Okay. Sure, sir. Sir, secondly, this CGFMU scheme, does it allow you to apply a lower risk weight to the covered set of loans? Yeah, it does. There is a cap, Ashlesh. You have benefit of, obviously, to the extent of the claim that is eligible, which is 72.75%. In addition to that, you have a cap of 15% on the total disbursement made, which is obviously under the regulatory terminology called crystallized portfolio. Of that 15%, you can count and apply zero risk weightage on that. I guess the benefit is simply given because on one hand you have a premium which goes to your cost, and on the other end, you have the coverage. The benefits under the RBI norms are twofold. One is provisioning and other is zero risk weightage. As I said, it is capped. It's not on the total portfolio. Okay. Sarju sir, just to simplify. Just to add to your question. Under JLG and MBBL product together, if you will see around INR 170 crore is the gross NPA amount, which is covered under CGFMU. On this, if you will see lifetime provisioning we need to require is of INR 46 crore as per the CGFMU guidelines. Out of that, already INR 28 crores has been provided. Only INR 17 crore is something which will come as a bucket movement every quarter. Okay, sir. Just trying to understand the numbers. INR 170 crores, out of that INR 740 is already covered under CGFMU. Okay. INR 570 is not covered. How much NPA provisions are you carrying against this MFI NPAs which are not under CGFMU right now? I am just trying to understand what is the provision requirement you have on the existing MFI space. If you see, let me try to answer this in splitting before April and after April. If you see before 1st of April 2025 portfolio, we had gross NPA is INR 619 crore, out of that, already INR 407 crore has been provided. The PCR comes close to 66%. Post April 2025, the total NPA is INR 73 crores, which is the recent one. Out of that, already provided is INR 14 crore. Between these, because we started CGFMU somewhere in mid of January 2025. That is where this number comes as INR 170 because second NPA is also of the portfolio built up between January 2025 to March end 2025. Understood, sir. This clarifies. Sir, just going back to the risk weight question. Sarju sir, if I were to simply add INR 100 of MFI book incrementally going forward. What would be the risk weight assigned to that book if it is Out of the INR 100, on the INR 15 you will assign zero. Okay, INR 85 you will still assign a risk weight. Yes, that's right. Okay. Simply stick to it. Understood, sir. Sir, secondly, can you also split the non-MFI NPAs? I think the total number is around INR 420 crores. If you can give a breakup of non-MFI NPAs across segments like CV and MSME. In INR is also fine for us. Out of this INR 38 odd crores, non-MFI is INR 425 crores. Okay, sir. I want to know what's the breakup of that INR 425 across MSME, wheels, and so on. Okay. Out of that 425, secured MSME is INR 168 crore, CVCE is INR 62 crore, WSL is INR 30 crore, and housing loan is another close to INR 49 crore-INR 50 crore. Understood, sir. Sir, lastly, if you can share any update on your capital issuance plans. Also one more data keeping question. If you can give us the microfinance slippages for this quarter. Thank you. Those were all the questions I had. Yeah, the total provision that has gone into my P&L for quarter is INR 109 crore, out of which microbanking is INR 45 crore and non-microbanking is INR 62 crore. Sorry, sir. Slippages if you can share. MFI slippages. For microbanking, slippages for this quarter stood at INR 68 crores, as compared to INR 153 crore of quarter four. Perfect, sir. Last one was on the capital raising plan. Equity plan. Yeah. We just mentioned about raising INR 500 crore of tier 2 NCD, I did speak that should on the back of the envelope, give us about 250 basis point incremental CRAR. With the trajectory as we spoke about in terms of profitable years, clawback of profits. There would be no otherwise a capital equity raise that we anticipate, at least till the end of FY 2027. Understood, sir. Perfect, sir. Thank you very much for the answers. Those are all the questions. Thanks a lot. Yeah. Thank you. Thank you. We have our next question from the line of Henil Shah, an individual investor. Please go ahead. Hello, sir. Am I audible? Yes, sir. Please go ahead. Yes, sir. Any guidance on FY 2027 ROE or credit cost? We have given a guidance for FY 2028, which is a 15% ROE, which it's a path to profitability through FY 2027 because that has to be the first milestone delivery. We are looking at more than around two-digit upwards ROE by the exit of FY 2027, which builds up the case for ROE for the FY 2028. Okay, sir. One more question, sir. Our operating profit is not rising. The growth in operating profit is very slow. Can you please throw some light on it? You're right. I guess if you really look at the trend from where we were, and that's what we say the consolidation and the bouncing back story beginning, a negative pep up of around 44 in December to a positive of 12. We are at 64 this quarter, which is five-fold of Q4, signifying that the disbursements, which is the core input that builds up the portfolio, that builds up the income accrual AUM. That trajectory is visible over the last two quarters. As we go along, disbursements and portfolio will continue to build up with completely normalized credit cost. There'll be no reversals that has been event last year. We'll have a steady state AUM to accrue income in a normalized fashion as growth is building up in coming quarters, with added cost of fund advantage in terms of almost 60 basis point benefit accrued. My peak rate of deposits at a point in time on senior citizen was 9.1, which is 8.25 today. The peak deposit card rate, which was 8.5, is 7.8 -ish point a few both 8.1. These two things, as we grow in our deposits and the new maturity gets into at the lower card rate, we continue to see benefit in the cost of funds. The third line, this is relevant because it will come back to the path to profitability. The third line, as I mentioned, other income is also an element of disbursement, loan processing fee, which is up as the disbursement go up. Correlation, I guess the other income will again be stabilizing, and then at the same cost, which one of our colleague asked just before you. At the same cost with no expansion plans, it's a matter of getting the higher income and higher productivity, which will lead to a PPOP growth incrementally from wherever we are here. We just mentioned to your previous question that if I am exiting FY 2027 Q4 with a ROE of, let's say, around two digit, that probably would be in a very decent PPOP. That's the envelope in terms of trajectory we are looking forward. Okay, sir. Thanks for detailed answer. May I ask one more question if you permit? Yes, please. Go ahead, sir. Sir, you are saying that we have already enough NCLT, cost to income ratio will not rise over the next two year, even if we grow every year 30%, that is right? I guess again, little relevance. Thank you for asking this question, cost to income actually looks elevated because the income, which is the denominator contraction has happened over last year. Once income comes back, all that we said is about getting the income, the top line growth and cost at static, you will see the cost to income ratio reasonably improving as we exit FY 2027. Okay, sir. Do we intend to grow MFI space or we will stay here, means, on loan book over the two year? I think as I mentioned that, we understand the JLG business. Our ratio is very low now. Right now, we are around 25%, but we'll continue with the microfinance to that extent, sir. Thank you, sir. Thank you for detailed answer. Thank you. Okay. Thank you. There are no further questions, I now hand the conference over to the management for closing comments. Thank you, ICICI team for hosting this one. Thanks every investor for your queries, questions, and interest in the company. As you mentioned, I think worst is behind us and we can see next few quarters are going to be really good quarters and better in all the parameters, all the KPIs where we talk of. Once again, thank you very much for your support and guidance all these years. Thank you. Thank you, sir. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.