Aavas Financiers Limited — Q3 FY26

Aavas Financiers Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=TeEoNPfyiDA Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the AAS Financials Limited 9month and Q3 FI26 earning conference 0:09 9 seconds call. This conference call may contain forward-looking statement about the company which are based on the beliefs, opinions and expectation of the company 0:17 17 seconds as on date of this call. These statements are not guarantee of future performance and involve risk and uncertainties that are difficult to 0:25 25 seconds predict. As a reminder, all participant line B will be on the listen only mode and there will be an opportunity for you to ask questions after the presentation 0:34 34 seconds conclude. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your TON phone. Please note that 0:42 42 seconds this conference is being recorded. I now hand the conference over to Mr. Rakkesh Shindai, head of investor relation of AAS Finances Limited. Thank you and over to you sir. 0:54 54 seconds Thank you Ran. Good evening everyone. I extend a very warm welcome to all participant and thank you for joining us 1:01 1 minute, 1 second on today's earning call to discuss the financial and operational performance of our company for 9 month and Q3 FI26 1:08 1 minute, 8 seconds along with the business outlook going for forward. The result and the investor presentation have been uploaded on the stock exchanges and are also available 1:17 1 minute, 17 seconds on our company website. I hope you have had chance to review them. We have also uploaded Excel fact sheet containing 1:25 1 minute, 25 seconds historical data on our website for your easy reference. Joining me today is the entire management team of ours. We will 1:33 1 minute, 33 seconds begin this call with the opening remark from our MD Sachinder Vinder, CFO Kam Braat and CRO Ashoto Atre. This will be 1:43 1 minute, 43 seconds followed by Q&A session. With that, let me now hand over the call to Sachinder. Over to you Sachinder. 1:49 1 minute, 49 seconds Thank you Rakkesh. A good evening to all and I thank you all for joining this earning call. I wish you a happy 2026. 1:57 1 minute, 57 seconds The recent macro developments have been very encouraging for the Indian economy. 2:02 2 minutes, 2 seconds The Arma Union budget followed by the positive progress on the India US trade agreement marks an important inflection 2:09 2 minutes, 9 seconds point. These developments are expected to support external stability, improve systemic liquidity, ease interest rates, 2:18 2 minutes, 18 seconds and create a more favorable environment for credit growth. Q3 also saw several structural reforms, including GST 2:26 2 minutes, 26 seconds rationalization, labor code implementation, progress on key trade agreements, and continued FDI 2:33 2 minutes, 33 seconds liberalization. Together, these measures should strengthen household balance sheets and drive a urban and a rural 2:40 2 minutes, 40 seconds consumption recovery. The union budget 2026 reinforces the government's focus on capexled growth while continue to 2:49 2 minutes, 49 seconds support consumption and affordable housing. Alongside this, the high level committee on the banking for Vixsit Bat 2:56 2 minutes, 56 seconds clearly positions NPFCs and housing finance companies as key enablers of credit expansion. The emphasis on 3:04 3 minutes, 4 seconds developing tier 2 and tier three city economic regions creates a strong structural tailwind for affordable 3:11 3 minutes, 11 seconds housing. Overall, we believe the macro environment is becoming increasingly supportive for housing finance with 3:19 3 minutes, 19 seconds improving affordability, stable funding conditions, and a strong runway for sustainable growth. 3:26 3 minutes, 26 seconds on Avas's performance. I'm pleased to share that during Q3 FI26, our balance sheet size crossed rupees 20,000 crores, 3:35 3 minutes, 35 seconds marking an important milestone in our growth journey. During the quarter, we also successfully raised approximately 3:43 3 minutes, 43 seconds 975 crores equivalent to US dollar 108 million for Amaki multilateral financial institution at a competitive cost. This 3:52 3 minutes, 52 seconds represents the largest NCT placement in company's history and underscores our position as one of the leading players 3:59 3 minutes, 59 seconds in affordable housing finance. It also reflects strong external confidence in our measured quality-led growth strategy 4:07 4 minutes, 7 seconds and long-term vision. The proceeds from this financing will be deployed to support affordable housing loans for EWS 4:15 4 minutes, 15 seconds and LIIZ households, promote woman home ownership, scale green certified housing and expand MSME lending in underserved 4:24 4 minutes, 24 seconds regions, further strengthening our development focused lending franchise. 4:29 4 minutes, 29 seconds During the quarter, we rolled out a branch excellence program to drive sustainable quality growth across branches. Project Mi focusing on 4:38 4 minutes, 38 seconds strengthening pre-login discipline and frontline effectiveness through better field management and coaching. Project Nepon institutionalizing the post login 4:46 4 minutes, 46 seconds rigor by improving improved quality documentation discipline and turnaround time. Project SOUN drives a first time 4:53 4 minutes, 53 seconds right culture to enhance login quality and reduce rework. Project C2 optimizes our channel management through digital 5:01 5 minutes, 1 second integration and more effective partner management. And finally, the project rise, which strengthens employee engagement through structured rewards, recognition, and clear career pathways. 5:13 5 minutes, 13 seconds Together, these initiatives are creating a strong operating backbone for consistent and sustainable growth. Onto 5:20 5 minutes, 20 seconds the business front, after the transition to the new dispersement recognition framework in Q1, operations have normalized resulting in a 10%age Q growth in dispersement due to quarter 3. 5:32 5 minutes, 32 seconds Our sanction to dispersement ratio which was impacted in quarter 1 has recovered and now stands at more than 80%age demonstrating improved conversion 5:41 5 minutes, 41 seconds efficiency. Traditionally Q4 is a strong quarter for us and we expect this momentum to sustain. Our credit first 5:49 5 minutes, 49 seconds approach continues to benefit us with best-in-class asset quality. Our one plus DP has shown a sharp improvement 5:57 5 minutes, 57 seconds across geographies resulting in lowering GMPP during the quarter. Our AUM grew by 15%age Y to rupees 222 billion. The 6:06 6 minutes, 6 seconds broader economic backdrop remains supportive and conducive interest scenario continues to support affordability and demand momentum in our 6:14 6 minutes, 14 seconds core segments. During the quarter, we further benefited from a lower cost of funds following a 25 bits cut in the 6:22 6 minutes, 22 seconds repo rate. In today's Alco meeting, it was decided to pass on 15 bits of this benefit to our customers effective 1st 6:29 6 minutes, 29 seconds March. This revision will benefit around 70%age of our customers who are on the floating rate book while maintaining an 6:36 6 minutes, 36 seconds appropriate balance between customer benefit and margin sustainability. 6:40 6 minutes, 40 seconds Furthermore, government initiatives like the interest subsidy scheme ISS under PMI 2.0 coupled with a stable interest 6:49 6 minutes, 49 seconds rate environment continue to support home buyer sentiment and affordability. 6:54 6 minutes, 54 seconds We are pleased to report that over 2,800 AAS customers have already benefited from this scheme receiving subsidies 7:01 7 minutes, 1 second amounting to more than rupees 90 million. 7:05 7 minutes, 5 seconds As we look ahead, our long-term strategic priorities remain clear to fully leverage our digital platforms digit distribution network further 7:14 7 minutes, 14 seconds strengthen governance, drive scale efficiently, optimize cost and enhance productivity across the organization. 7:21 7 minutes, 21 seconds With that preamble, I will now take you through our quarterly performance. Our AUM has now reached at rupees 222 7:28 7 minutes, 28 seconds billion. During quarter 3 FI26, we dispersed loans worth rupees 17.2 billion, registering a 10% sequential 7:36 7 minutes, 36 seconds growth while maintaining our strong focus on quality origination and prudent underwriting. Our net profit for 43 FI26 7:44 7 minutes, 44 seconds grew by 16 percentage Y to rupees 1.7 billion led by 17%age Y growth in NI on 7:51 7 minutes, 51 seconds account of healthy improvement in spread our net worth continues to compound steadily growing at 16%age Y with the 7:58 7 minutes, 58 seconds strength of our capital position driven by consistent compounding internal acral our names expanded by 27 bits 8:07 8 minutes, 7 seconds sequentially to 8.01% 01% during the quarter. This improvement was supported by improvement in the spread coupled with our continuous focus on risk 8:15 8 minutes, 15 seconds adjusted pricing. Our opex to asset ratio saw an improvement of 8 bits sequentially to 3.44 percentage while 8:24 8 minutes, 24 seconds the cost to income ratio continued to trend lower by 66 bits sequentially to 42.9%age reflecting improved efficiency gains. 8:33 8 minutes, 33 seconds Our asset quality remains pristine with OnePlus GPT well below 5 percentage improving by 19 bits sequentially to 8:41 8 minutes, 41 seconds 3.80 as of December 2025 while GNK improved five bits QQ to 1.19 8:49 8 minutes, 49 seconds percentage. Credit cost stood anchored at 16 bits driven by lower oneplus GPD flow and improvement in stage 2 and 8:57 8 minutes, 57 seconds stage three buckets. We continue to maintain our guidance of keeping credit costs below 25 bits on a sustainable 9:04 9 minutes, 4 seconds basis. Our ROA improved by 6 bits Y to 3.43 percentage and ROE improving by 8 bits YI to 14.29%age. 9:15 9 minutes, 15 seconds We remain committed to delivering quality, profitable and sustainable growth powered by techled efficiency and 9:22 9 minutes, 22 seconds cost optimization. With a robust risk management framework, deep and diversified distribution network and the strong execution capabilities of our 9:31 9 minutes, 31 seconds experienced team, we are confident of achieving a strategic milestone and delivering long-term value to all stakeholders. With that ladies and 9:40 9 minutes, 40 seconds gentlemen, I would now hand over to our CFO Gensha Amra to discuss the financials in detail. 9:50 9 minutes, 50 seconds Thank you Sajindra G. Good evening everyone and a warm welcome to our earning call to provide update first on the borrowing path. The improvement in 9:59 9 minutes, 59 seconds cost of fund continued to underscore strength and resilience of AWA's well diversified liability franchise. In line with our strategy of innovation in 10:08 10 minutes, 8 seconds liability sourcing, we proactively anticipated a potential softening and interest rate and strategically seated a sizable portion of our borrowing to ABR 10:17 10 minutes, 17 seconds linked instruments and various market linked benchmarks. This forward-looking approach has continued to yield tangible 10:24 10 minutes, 24 seconds benefit in Q3 also as our liabilities are repriced faster than those of many peers. This position us well to maintain 10:33 10 minutes, 33 seconds a competitive cost of fund while supporting sustainable quality growth. 10:38 10 minutes, 38 seconds Well diversified liability franchise linked with various benchmark and competitively priced in Q3 FI26. We were 10:47 10 minutes, 47 seconds able to deliver an additionally 16 basis point improvement sequentially in our cost of fund and 56 basis point 10:53 10 minutes, 53 seconds improvement in 9 months of this year. In today's algo, we decided to pass on benefit of 15 basis point to our 11:01 11 minutes, 1 second customers with defect from 1st March 2026. 11:05 11 minutes, 5 seconds Our spread improved by 40 basis point year on year to 5.34% in quarter 3 while calculated spread increased by 65 basis 11:14 11 minutes, 14 seconds point year on year. We continue to borrow judiciously raising around 15.41 billion rupees at competitive rate at 7.78 for quarter 3 FI26. 11:27 11 minutes, 27 seconds The average tenure of borrowing continue to be longer than that of assets ensuring a positive ALM across all the 11:33 11 minutes, 33 seconds buckets. As of 31st December 2025, total outing borrowing is stood at 193 11:40 11 minutes, 40 seconds billion. We have optimum mix of borrowing linked with the various benchmark of interest rates such as 35% 11:47 11 minutes, 47 seconds borrowing linked to external benchmarks such as repo table my board and 34% linked with the s three month MCLR 11:55 11 minutes, 55 seconds enabling faster repricing of nearly 69% over borrowing in line with the interest rate movement lender supports remain 12:03 12 minutes, 3 seconds strong as ours continue to evolve we maintain access to diversified and cost effective long-term financing our relationship ship with development fin 12:11 12 minutes, 11 seconds institutions remain robust in supporting our strategic funding goals as of 31st December 2025 we maintain ample 12:19 12 minutes, 19 seconds liquidity and including cash and cash equivalents and unavailable cash credit limit of rupees 19.55 billion documented 12:27 12 minutes, 27 seconds unavail sanction of rupees 24.54 billion profitability and capital position our net total income in in 12:35 12 minutes, 35 seconds absolute terms grew by 18% yearonear in quarter 3 fi26 Net interest margin as a percentage of 12:42 12 minutes, 42 seconds total assets expanded by 27 basis point year on year to 8.01% in quarter 3 fi26. 12:50 12 minutes, 50 seconds We remain well capitalized with a net worth of 48.6 billion and a capital to risk a weight veed assets ratio of 46.4% 13:00 13 minutes significantly above the regulatory requirement. Now I would hand over the line to our CRO Auti to discuss the asset quality. 13:10 13 minutes, 10 seconds over to you. 13:12 13 minutes, 12 seconds Yeah, thank you Kam G. Good evening everyone. I am pleased to share the key portfolio parameters with you. Asset 13:20 13 minutes, 20 seconds quality and provisioning. AAS is strongly positioned to continue delivering industryleading asset quality. Our asset quality remains 13:28 13 minutes, 28 seconds within the guided range with one day pass due well below 5% at 3.80%. 13:34 13 minutes, 34 seconds in Q3 FY26 and gross stage three and net stage three under 1.25% 25% stood at 1 13:42 13 minutes, 42 seconds uh 1 19% and 0.79% respectively during the quarter. Not only in terms of 13:49 13 minutes, 49 seconds percentage as mentioned by G our uh principal outstanding of one plus GPD and stage three principal outstanding 13:58 13 minutes, 58 seconds has also reduced in absolute value from geographic perspective. Asset quality in our vintage states continue to remain 14:07 14 minutes, 7 seconds healthy. the average oneplus DPD and GNPA stood well below 4% and 1.25% of 14:15 14 minutes, 15 seconds AUM's AUM. Similarly, uh in our emerging markets, we are observing healthy credit 14:22 14 minutes, 22 seconds performance with OnePlus BPD and GNPA level remaining comfortably within 4% 14:28 14 minutes, 28 seconds and 1% of AUM respectively. Our total ECM approaching including for coid9 14:36 14 minutes, 36 seconds impact as well as the resolution framework 2.0 stood at rupees 1.27 billion as of 31st of December 2025. 14:48 14 minutes, 48 seconds Our disciplined underwriting standards coupled with proactive risk management framework have enabled us to stay ahead 14:57 14 minutes, 57 seconds of emerging macroeconomic challenges. We continue to follow a rigorous credit assessment process stress tested across 15:06 15 minutes, 6 seconds multiple economic scenarios and remain selectively calibrated in our exposure to higher risk sectors. This approach 15:15 15 minutes, 15 seconds has helped us prevent asset quality which continues to rank among the best in the industry. 15:23 15 minutes, 23 seconds With this I open the floor for question and answer session. 15:31 15 minutes, 31 seconds Thank you so much sir. 15:33 15 minutes, 33 seconds Ladies and gentlemen, we'll begin with the question and answer session. Anyone who wishes to ask a question may press star N1 on the touchstone telephone. If 15:42 15 minutes, 42 seconds you wish to remove yourself from the question queue, you may press star N2. 15:47 15 minutes, 47 seconds Ladies and gentlemen, we request you to use handsets while asking a question. 15:51 15 minutes, 51 seconds We'll wait for the moment while the question qu assembles. 15:58 15 minutes, 58 seconds Our first question come from the line of Kunal Sha from City Group. Please go ahead. 16:04 16 minutes, 4 seconds Yeah. Uh hi, thanks for taking the question. So the first question is on growth. When we uh look at maybe uh the 16:11 16 minutes, 11 seconds first 9 months uh uh growth uh it clearly suggests maybe the guidance which was given of closer to like 18 odd 16:19 16 minutes, 19 seconds percent. uh that appears to be quite uh stretched and it might settle at less than uh 15 odd%. So maybe in terms of 16:26 16 minutes, 26 seconds the indicators as to how do we plan to get towards 18 to 20 odd% uh uh growth in the coming years and uh the related 16:34 16 minutes, 34 seconds question is on the branches last time you indicated that you will add 20 25 odd branches but we had seen some consolidation of branches in Rajasthan 16:44 16 minutes, 44 seconds and Maharashtra. uh so that maybe the addition of branches has also been not very uh high. So what's what's happening 16:51 16 minutes, 51 seconds on that front in terms of the franchise expansion? 17:02 17 minutes, 2 seconds Uh thanks Kunan. Uh during H1 we undertook a significant transformation in our business and accounting processes with a calibrated tightening of credit 17:10 17 minutes, 10 seconds in a relatively subdued macro and credit environment. As communicated earlier, our priority has been to protect portfolio quality and pursue not to pursue just the headline growth. 17:20 17 minutes, 20 seconds Accordingly, the final EUM growth outcome continues to be influenced by how the macro and credit environment has evolved even as we remain committed to our long-term growth aspiration. 17:30 17 minutes, 30 seconds Encouragingly post Diwali we started seeing a pick up in the business momentum and we expect this trend to continue through our quarter 4 FI26. 17:39 17 minutes, 39 seconds Quarter four last year was a strong quarter with disbbursement crossing rupees 20 billion and we are confident of exceeding that level comfortably this 17:47 17 minutes, 47 seconds year as well. On the AUM front, H1 created a meaningful drag on the overall growth run rate uh which has led to AUM growth moderating to around 15%age. 17:59 17 minutes, 59 seconds uh given this backdrop a focus for the remainder of the year is to maintain the current growth trajectory while continue to safeguard asset quality rather than 18:07 18 minutes, 7 seconds pushing for aggressive growth. The second question on the growth for the next year looking ahead FI27 should be 18:14 18 minutes, 14 seconds year of strong recovery uh with no from transformation initiatives a number of initiatives which we are taken and 18:21 18 minutes, 21 seconds incremental investments being made in branch expansion to drive growth with a stable operating environment and a stronger platform in place we are 18:29 18 minutes, 29 seconds targeting around 25%age growth in dispersement in FI27 while continue to build a resilient highquality franchise 18:37 18 minutes, 37 seconds and this is how how it stand is that we are planning to have around 25%age of disbursement growth solving for additional 2,000 crores that we are 18:46 18 minutes, 46 seconds looking at for the next year. We already are ahead by 500 crores in our monthly average run rate for the uh but that will add on to the total cumulative sum. 18:56 18 minutes, 56 seconds The branches opened in the last 24 months will give another 200 to 250 crores of additional business. Whereas 19:04 19 minutes, 4 seconds we are opening another additional 50 branches in the next year which will contribute about 100 cr or of business and really the digital channels kunal 19:11 19 minutes, 11 seconds like the CAC e- mitra and alli channels will give us another 500 cr additional 19:18 19 minutes, 18 seconds business so and plus the the inflation growth we factoring around 6%age which is about 400 crores would really improve 19:26 19 minutes, 26 seconds the the numbers as I speak over and above as I spoke about the lot of initiatives which we have taken which have given the green shoots in quarter 19:35 19 minutes, 35 seconds three where our visits uh the customer visit related from the direct channels have actually increased by improved by 19:42 19 minutes, 42 seconds 30%age and we are confident uh that productivity enhancement really will come through all of this as management 19:49 19 minutes, 49 seconds we are confident with this measures which I really spoke about uh contributing to robust 25%age growth in in the coming here. 20:04 20 minutes, 4 seconds Sure. And uh with respect to branch expansion, it was quite slow during the quarter and there was some rationalization as well. 20:12 20 minutes, 12 seconds There was multiple branches which we had done. So it was not about consolidation. 20:16 20 minutes, 16 seconds So as we speak kunal uh on the current date we are at 410 branches uh uh as of uh today 20:25 20 minutes, 25 seconds and uh in addition to that this quarter we'll add another 20 to 25 branches uh in quarter 4. 20:33 20 minutes, 33 seconds Okay. So that trajectory maybe that guidance still continues in terms of adding uh 20 25 branches in the second half. 20:40 20 minutes, 40 seconds Yeah. Yeah. And uh next year uh we are going to add another around 50 branches next year we will add on. So what we are doing is we going 20:49 20 minutes, 49 seconds deeper in the in the regions where we are there in tier 2 tier three towns by the RRO model which is already there. So I think that deepens our market as far 20:56 20 minutes, 56 seconds as that is concerned. Open lot of where we've stabilized the RRO's and we find that there is a good potential we convert looking at converting into the 21:05 21 minutes, 5 seconds model branches what we call the model branches which are like uh uh self- sustained branches at a lower infra cost which really helps us to build that. So 21:14 21 minutes, 14 seconds we continue our guidance and our trajectory of geographic expansion by going deeper and opening physical branches. 21:22 21 minutes, 22 seconds Got it. That helps. Yeah, that's all from my side. Thank you. Thanks. 21:29 21 minutes, 29 seconds Thank you. 21:35 21 minutes, 35 seconds Our next question come from the line of Abijital from Motilos. Please go ahead. 21:41 21 minutes, 41 seconds Yeah, good evening everyone. Uh thank you for taking my question. Uh so again um just maybe repeating what you've already said right but again uh I think 21:50 21 minutes, 50 seconds while we have managed to get some handle on the BTO and the portfolio attrition this quarter which I'm sure was driven 21:57 21 minutes, 57 seconds by all the actions that you would have taken because from what we hear from other housing finance companies the competitive intensity continues to still 22:06 22 minutes, 6 seconds remain very high. So but but I think disbbursement momentum kind of still leaves a lot to be desired. what we 22:13 22 minutes, 13 seconds usually know right 40 60 kind of a disbbursement mix between 1 H and 2 H uh even if we were to do that right I think 22:22 22 minutes, 22 seconds we still fall short of what maybe you would have targeted on dispersments for this year so I mean while you've already partly answered it in the previous 22:29 22 minutes, 29 seconds question but what were the the growth headwinds uh this year and what will change next year for us to start 22:37 22 minutes, 37 seconds accelerating on growth except for this um branch addition of branches that you just explained 22:43 22 minutes, 43 seconds So Kunal uh sorry Abdish uh uh thanks uh for joining the call and uh see if you place it in the two ones on the growth 22:51 22 minutes, 51 seconds as we said that because we had the transformation on the accounting process of dispersement recognition the quarter one cover up whatever was there I think 22:59 22 minutes, 59 seconds that actually delayed and lagged our entire stuff uh for the for the current financial year. So I think that is one which was there. Secondly, at a 23:07 23 minutes, 7 seconds conscious call of some of the states which we had taken in Karnataka and other places as we start seeing in quarter two and quarter three, we started stepping up and that more true 23:16 23 minutes, 16 seconds so to really look at it from a perspective of the credit environment and the overall environment based on the kas and e- kartas and stuff which was 23:23 23 minutes, 23 seconds there. So I think there were a couple of those stuffs which actually had the muted one. On the second question of how do you really span out the growth for 23:31 23 minutes, 31 seconds the next year. So as we highlighted on the the projects which we highlighted on specifics uh the digital channels which really have started contributing to us 23:40 23 minutes, 40 seconds like cse incrementally would contribute more than 500 crores on a monthly average run rate uh which is there for 23:48 23 minutes, 48 seconds us uh at currently we are at a 500 cr monthly average run rate but additional CSC and EMTRA would contribute uh uh to 23:56 23 minutes, 56 seconds an extent of another 500 crores next year. So we are confident of the digital channels. We are confident of the the branches which have opened in the last 24:05 24 minutes, 5 seconds 24 months really contributing including the new branches additional about 300 crores really coming across from there 24:12 24 minutes, 12 seconds plus an inflationary small bit of 6%age growth coming across from the inflationary lead growth plus the initiatives whatever we spoke about on 24:20 24 minutes, 20 seconds the productivity enhancement and as I spoke that visit to customer ratios actually have improved by 30% is finally 24:28 24 minutes, 28 seconds really helping us improve the productivity So primarily the input really uh is getting refined and crystallized and 24:35 24 minutes, 35 seconds we've seen that green shoots in quarter three. So we are confident that we'll able to carry forward in quarter 4 and build that in the next financial year. 24:45 24 minutes, 45 seconds Got it sir. So then on the disbbursements again if I look at the dispersement makes uh very clearly right 24:53 24 minutes, 53 seconds until last year uh the nonHL in the disbbursements used typically used to be around a 35% ballpark. Uh uh now if I 25:03 25 minutes, 3 seconds look at this year it is consistently the nonHLP is consistently above 40% in the mix. So I mean how is the the demand 25:12 25 minutes, 12 seconds language today purely in individual home loans and the related question here also is that uh I mean recently right I mean 25:22 25 minutes, 22 seconds at least some of the larger HSCs who've reported they have all been talking about uh kind of moving towards near 25:30 25 minutes, 30 seconds prime and affordable so do you think that I mean until now we very often used to say what if there is a competition 25:39 25 minutes, 39 seconds from uh the banks. But now if the larger HFC's also start looking at uh the affordable pile, is it going to kind of 25:48 25 minutes, 48 seconds meaningfully increase the the competitive intensity in the affordable housing sector? 25:55 25 minutes, 55 seconds I think uh your first question on uh the HL NHL part I think it is more about the recognition of that that pushed the uh 26:02 26 minutes, 2 seconds HL to a little drag as far as recognition was concerned because as you know the home loan transactions are operated through a check dispersement 26:10 26 minutes, 10 seconds mode and the NHL and those portions are more by the RTGS mode which was there. 26:16 26 minutes, 16 seconds So that differentially had a drag on the kind of HL which is there. So unlike the normal one, we've not seen any of the 26:24 26 minutes, 24 seconds drop which is there. It is uh it is just a uh what I would say uh uh movement which is moved quarter on quarter to the subsequent quarter. That's one. So uh 26:33 26 minutes, 33 seconds even with our PMA 2.0 where we disperse more than 2,800 plus customers in the ISS scheme is also reflective of the 26:40 26 minutes, 40 seconds strong home loan growth what we uh really uh see. So uh the the login and 26:48 26 minutes, 48 seconds the from the home loan really continue uh to build on and we [clears throat] will continue to build in in the markets where we we operate on the on that 26:56 26 minutes, 56 seconds franchise. That's one. Secondly on the competitive intensity I think we stand out as far as our understanding of self 27:03 27 minutes, 3 seconds self assessment based strong sep direct model is concerned and our inroads into tier 2 tier three markets both from a 27:11 27 minutes, 11 seconds perspective of understanding the customer and understanding the property and buying in the two or both with the quality which is there I think stands 27:19 27 minutes, 19 seconds good at at our which is there and as you highlighted that on the BT out we continue to be at uh 4.5 5 percentage 27:28 27 minutes, 28 seconds for quarter three which is only 60 which is 60 bits lower than the same period last year. So I think we are confident with our kind of underwriting practice, 27:36 27 minutes, 36 seconds our kind of customer segment, our deeper reach which we continue to further uh build and expand will actually also help 27:44 27 minutes, 44 seconds us to uh thwart uh the normal competition what you are referring to and again from a perspective of if you 27:51 27 minutes, 51 seconds look at the average ticket size a continues to be in the average ticket size of 12 and a half lakhs whereas affordable for some of the peers on the 27:59 27 minutes, 59 seconds you you are talking about the ticket size is more than double what typically we we service on an average spy. So I 28:06 28 minutes, 6 seconds think from that still it is far away as far as reaching that customer segment so to say. Yeah. Yeah. Abig what Sachin 28:14 28 minutes, 14 seconds said I think apart two thing very important to see uh like in our today we have 65 to 70 65 to 70% self-employed 28:24 28 minutes, 24 seconds customer basically whereas all large HFC's banks has 80 to 90% salaried customer. So in the same market in the 28:32 28 minutes, 32 seconds same geography even we are present both then we have a different uh we target different customer class they target different customer class we target 12 to 28:41 28 minutes, 41 seconds average ticket size 13 14 15 lakhs rupees they target 25 lakhs and above ticket size customer in same market basically so that make a huge difference 28:49 28 minutes, 49 seconds or thirdly I think as a we are very deep rooted in those market we are almost today source the customers around 2,000 28:56 28 minutes, 56 seconds plus towns basically where they are remain still in the large market uh uh in the city or district headquarters 29:03 29 minutes, 3 seconds they remain up to that level we goes at a sub town level uh sub town level basically so that uh I think that is 29:10 29 minutes, 10 seconds continue to be uh I think uh in the same market all we make a separate road for us uh there is enough opportunity in the 29:18 29 minutes, 18 seconds market so even despite the large SFC focus for affordable housing 29:27 29 minutes, 27 seconds thank you well champ just One last question on the borrowing mix. Uh if I look at the NHB refinance from its peak 29:34 29 minutes, 34 seconds of 22 23% uh kind of decline to 20% then to maybe 16% same time last year and now 29:42 29 minutes, 42 seconds 14 now 14 to 12 rather 12 now. So I'm just trying to understand uh was it because uh NHB was not giving a 29:50 29 minutes, 50 seconds sanctions because of the ongoing CBC transaction but now that the transaction has also been concluded have you 29:56 29 minutes, 56 seconds received any new sanctions from NHV and what are the plans to draw them down? 30:06 30 minutes, 6 seconds Yeah, Vijit uh you are right uh our contribution of NHV finance in overall borrowing has fallen because uh uh as 30:14 30 minutes, 14 seconds you uh as you appreciated that CBC transaction was in process and uh it got now completed everything now we applied 30:21 30 minutes, 21 seconds for our refinance limit also which is under consideration at their end basically uh uh uh we hopeful that uh in 30:29 30 minutes, 29 seconds in the coming quarters uh we will start we will start the positive we will listen the positive from their side uh 30:35 30 minutes, 35 seconds otherwise that I think company has uh uh uh done uh a very fantastic works uh uh 30:42 30 minutes, 42 seconds uh in even NHB borrowing was less than let's say what ratio was there year back basically uh all banks institutions 30:51 30 minutes, 51 seconds multilate institutions and was borrowing is almost we only 56 basis point deductions uh which is which is far 30:59 30 minutes, 59 seconds better than peer group far better than the peer group basically even sequencially our oral uh interest cost is lesser than the lesser than the 31:08 31 minutes, 8 seconds quarter two basically which shows the strength of liability franchise of aat now we are already double A plus double 31:15 31 minutes, 15 seconds A retained a positive outlook uh and so that is also helping us basically to explore the new market of of a borrowing 31:23 31 minutes, 23 seconds at a competitive price thank you so much for answering the question and I wish you and your team 31:30 31 minutes, 30 seconds the very best thanks thank you sir Our next question come from the line of Wun from CODC securities. Please go ahead. 31:43 31 minutes, 43 seconds Hi my question was regarding to disbbursements and how we see disbburment going up what will drive us. 31:51 31 minutes, 51 seconds So in light of that I would want to ask what is the login to sanction ratio for us? How has it trended over the last two three quarters when you have tightened 31:59 31 minutes, 59 seconds the screen and is there leeway over here that as the field staff get normalized these new credit screen that the ratio 32:07 32 minutes, 7 seconds might in the second question is with regard to the disert I think you've mentioned that the new channel partners currently contribute about 7% so how 32:16 32 minutes, 16 seconds much do DSAs or connectors contribute because those uh channels can scale up faster than the others if you can give 32:23 32 minutes, 23 seconds that Yeah, thanks uh Vun. I think as you rightly pointed out the screens on the the credit quality and we had called 32:31 32 minutes, 31 seconds out. So there has been a sequential improvement where we saw uh improvement in the credit environment in the credit quality. Hence our our sanction ratios 32:39 32 minutes, 39 seconds also improved from a around 30 32%age in the quarter one leading to around trending at around 38 40%age in the uh 32:47 32 minutes, 47 seconds last quarter so to say. I think that's the that's the positive side for looking at the credit quality and aas has always been looking at uh the risk adjusted 32:56 32 minutes, 56 seconds returns and really underwriting what we feel right at that period of time which is suitably from a credit environment perspective. So I think that's the 33:04 33 minutes, 4 seconds positive trajectory which is there. The most important point is our sanction to dispersement ratios also improved sequentially from the earlier period of time. That also gives us confidence. 33:14 33 minutes, 14 seconds That's number two. Number three on the channels what you rightly elicited the scaling of IB confident because as a couple of digital channels like CAC 33:23 33 minutes, 23 seconds metitras and mitras is the ones where we've actually put in efforts and those efforts have really shown traction in the current uh financial year and when 33:31 33 minutes, 31 seconds as we entered the quarter as we are in quarter four and entering the FI uh new FI we gives us confidence of an 33:38 33 minutes, 38 seconds incremental uh scope of expanding at a faster pace uh which which highly elicitated that it is going to 33:46 33 minutes, 46 seconds contribute an extra uh around 500 to 600 crores from from those channels. And the other part which we said that on a muted 33:55 33 minutes, 55 seconds expansion of the gra branches uh the last two years branch opening the new financial branch opening further adding an impetus about 200 to 300 crores plus 34:04 34 minutes, 4 seconds the retail inflationary le growth which we have taken at a very very conservative level about 6%age further 34:11 34 minutes, 11 seconds contributing to another 200 to 300 crores for the next uh financial year plus the productivity improvement as I 34:18 34 minutes, 18 seconds spoke about in my call about the various projects and the branch excellence which we have taken and therein also we've seen the green shoots about improvement 34:26 34 minutes, 26 seconds in uh uh uh the quality of logging the customer visit increasing by 30% is really improving the quality input also 34:34 34 minutes, 34 seconds will continue to contribute uh to our uh our expansion of the scalability in a right format plus earlier part as I said 34:43 34 minutes, 43 seconds that we had a little muted geographical growth on certain parts of Karnataka knowing the the credit environment and 34:49 34 minutes, 49 seconds the the part of the kata related stuff which we had uh uh hold on to our dispersement. So we've seen that acceleration also happening in in in 34:58 34 minutes, 58 seconds that uh uh pace. So that also will start contributing plus uh we've opened Tamil Nadu in the last couple of quarters. I 35:05 35 minutes, 5 seconds think that also slowly and steadily will also start contributing to our uh uh numbers as we effectively go in the next financial year. So we are pretty 35:14 35 minutes, 14 seconds confident with all the measures rightly uh we will be able to scale up in a more modular sustainable and a uh rightful quality growth manner. 35:29 35 minutes, 29 seconds Uh I just had one more question on the incremental yield. So after the PLR cut what is the gap between the incremental yields and the book yields where will it trend towards? 35:38 35 minutes, 38 seconds uh I think incremental yield is already even before even even without 15% reduction it already got transmitted 35:46 35 minutes, 46 seconds because by spread corrections which keep on happening when we source the customers the new business will not much impact but by 15 basis point reduction 35:54 35 minutes, 54 seconds we will have almost oral amum will reduce by 9 to 10 basis point oral impact on the book because we have 36:00 36 minutes almost 37 38% fixed rate book so so it will have a 9 to 10 basis point impact Okay, thanks. 36:10 36 minutes, 10 seconds Yeah, only and I think let's say I further update you on that piece. Uh, it will another we see few basis point cost 36:18 36 minutes, 18 seconds of borrowing reduction in the in in this quarter. Overall we are comfortable or we are confident our spread will remain 36:27 36 minutes, 27 seconds around 5.25% 25% uh for the for the year ending a few basis point two basis point here and there but roughly we are 36:35 36 minutes, 35 seconds confident to have 5.25 5.25% 25% is correct by the correct. Yeah, currently we are at 5.34 as we speak on the for the current quarter. 36:49 36 minutes, 49 seconds Thank you. Our next question come from the line of Rago from Ambit Capital. Please go ahead. 36:56 36 minutes, 56 seconds Hi, am I audible? Uh yeah, thanks. Yeah. Yeah. 37:01 37 minutes, 1 second Okay. Uh sir uh I just had two uh uh questions actually two clarifications before I ask my questions. One uh did 37:09 37 minutes, 9 seconds you say that you're targeting 35% dispersal growth in FI27? Is did I hear that correct? 37:15 37 minutes, 15 seconds 25% is 35 sorry 35 is it? 37:19 37 minutes, 19 seconds Oh 25 okay 25 and then uh uh new branch addition will be 50 right? Yeah. 37:28 37 minutes, 28 seconds Okay. Okay. Uh sir my question is uh you know without the PLR reduction uh you know that we've uh I mean you haven't produced your PLR so far uh you know 37:36 37 minutes, 36 seconds it's only effective March uh despite that the yields have come down by about 16 basis points uh because of competition uh and that continues to 37:45 37 minutes, 45 seconds intensify uh and effective March you're taking a 15 bit scr cut uh on the liability side it seems that the cost of funds uh has likely bottomed out at uh 37:54 37 minutes, 54 seconds 7.7%. So for FI27 uh what is your expectation in terms of you know uh how much your spreads can normalize lower? I 38:01 38 minutes, 1 second think you just mentioned 5.2 or 5.25 uh but uh are you confident that you know uh the the uh spread uh decline 38:10 38 minutes, 10 seconds from here uh will not be more than uh say 15 20 basis points uh given the kind of competition that we are seeing out 38:17 38 minutes, 17 seconds there. See Ra we've always guided that we'll remain the rangebound of 5 percentage and if you look at our trajectory we hovered around we came 38:25 38 minutes, 25 seconds down to around 4.8 take down and further jump back. I think looking at the overall environment the cost of funds and right fully passing on the the the 38:33 38 minutes, 33 seconds the cost of uh reduction and the cost of borrowings to the p to the customer is a fair and right uh thing for an 38:41 38 minutes, 41 seconds institution to really do and uh uh that uh with continued softening as what Gensham GI highlighted about the 38:48 38 minutes, 48 seconds softening of expected cost of borrowing we'll we'll be able to balance that uh on on the entire portfolio and uh even 38:55 38 minutes, 55 seconds on the portfolio we have 70%age float putting uh as far as this uh uh the passing on on the PLR reduction is is 39:03 39 minutes, 3 seconds concerned. So we are pretty confident as we've guided. So we well above the guided uh level of 5 percentage. So we are currently at 5.34 and uh we are 39:12 39 minutes, 12 seconds confident of 5 percentage plus at 5 uh ranging between uh at at around 5.20 to 5.25 uh uh in in the coming quarters. 39:24 39 minutes, 24 seconds Understood. Understood. Uh uh second question is on your branch and workforce count uh that has been more or less same 39:32 39 minutes, 32 seconds since last few quarters. I think you may have mentioned or another participant may have mentioned that there has been some consolidation. Uh so I actually 39:40 39 minutes, 40 seconds wanted to ask that uh you know what is your plan for next year but I think you've already answered that around 50 branches. Uh can you give some color on 39:49 39 minutes, 49 seconds employee attrition uh because I noticed that that uh you know workforce count has not been increasing as such. uh and your employee productivity has also been 39:57 39 minutes, 57 seconds uh coming down. I'm guessing that's partly impacted because of the high attrition that's there in the industry in general. Uh so your thoughts on this 40:05 40 minutes, 5 seconds will be very helpful. Uh thanks as we speak we are at 410 branches. So I think from a branch perspective we 40:13 40 minutes, 13 seconds continue to go uh and expand in more deeper in the geographies which we are and we have an RRO model which is a resident relationship officer model 40:22 40 minutes, 22 seconds which is without a branch that is what we cover too. So I think that is one we will further strengthen in the coming 40:28 40 minutes, 28 seconds quarters uh and again uh developing and building those model branches as I spoke earlier also will help us from a branch 40:36 40 minutes, 36 seconds expansion perspective. Secondly, I I think lot of further parts on the rise uh kind of program which we've done I think which has resulted into holding on 40:45 40 minutes, 45 seconds to our our attrition rates at a constant compared to the industry standards which are there. I think that two three things which actually help us to have stability 40:53 40 minutes, 53 seconds which is there and some of that it doesn't really fortify initially in the in the in the coming in the im immediate 41:01 41 minutes, 1 second months on the productivity but as you proceed and the vintage of the arrow really the first mile relationship officer starts you start delivering and 41:10 41 minutes, 10 seconds getting the productivity over a period of uh the next quarter. Right. Uh from that perspective we're confident of getting that productivity rise which is 41:18 41 minutes, 18 seconds there. Again this is also backed up by how we've done scientifically and analytically right to get that and help that in in a right perspective. So I 41:27 41 minutes, 27 seconds think from that perspective we are very clear that this will also help us in building across in in the current quarter as well as the uh the next 41:35 41 minutes, 35 seconds quarter. This is as a part of the branch excellence program which I spoke across which is project rise which strengthens the employee engagement to structured 41:43 41 minutes, 43 seconds recognition and clear car pathway. So there is a there is there's a there's a right mechanism put in place institutionally to help that to uh build in a in a stronger and enduring way. 42:05 42 minutes, 5 seconds Are you there? Yeah. Yeah. I'm all done. Uh thank you. Thanks for that. 42:10 42 minutes, 10 seconds Thank you so much. Thank you. Our next question come from the line of Shipal Dooshi from Aquarius. Please go ahead. 42:20 42 minutes, 20 seconds Hi sir. Uh thank you for giving me the opportunity. Uh my question was on the asset quality front. So there undoubtedly we've done decent 42:28 42 minutes, 28 seconds performance with trends improving. So incrementally is that also likely to help us on uh on on on seeing better 42:36 42 minutes, 36 seconds business momentum uh as we can now relax some of the underwriting uh related norms uh in the coming quarters. Would 42:44 42 minutes, 44 seconds we look at doing that in order to let's say revive business momentum and NR disbburments? 42:52 42 minutes, 52 seconds Uh so shipal we've always looked at a riskadjusted return looking at the credit environment and whenever we felt that it is conducive as per our our 43:00 43 minutes standards I I think we accelerate so I having seen it is not about that having achieved a particular goal you really step up you really look at the 43:09 43 minutes, 9 seconds environment and then you really find that it is suitable credit conducive and it it gives us in a risk adjusted 43:16 43 minutes, 16 seconds returns in the format which as a as an institution has worked across over a period of so many years we actually then 43:23 43 minutes, 23 seconds try to uh look at the market and uh capt and accelerate our growth pedal. So we we continue to build that and I think 43:30 43 minutes, 30 seconds what you see now is our earlier uh credit cautious approach uh considering the environment which is resulting into 43:37 43 minutes, 37 seconds such uh numbers. As far as the concern we always focused on our input quality whenever there is a a credit conducive 43:45 43 minutes, 45 seconds environment from a perspective both customer side and the property side we we've always pushed the pedal and accelerated uh the pedal as as it comes 43:53 43 minutes, 53 seconds and as the uh environment really helps us. So, so sir in that case are you feeling that you are in a position 44:00 44 minutes wherein you would want to accelerate uh the the the disbbursement or business momentum for us? Yeah, as I as I spoke, 44:08 44 minutes, 8 seconds so we had couple of states as we had called out earlier which have seen a positive credit environment really playing out typically states of 44:15 44 minutes, 15 seconds Karnataka both from a perspective of the credit behaviors and the microfin uh uh outlay and overhang which was there 44:23 44 minutes, 23 seconds followed by the regular uh the the registration which was actually now getting streamlined because of the kata related uh uh challenges which had 44:32 44 minutes, 32 seconds posed. So I think as that really push the pushes out we we put the acceleration on the right kind of credit 44:39 44 minutes, 39 seconds growth actually but apart from that also because Karnataka is just 4%. So I mean 44:46 44 minutes, 46 seconds are you seeing the similar trends in in some of our key geographies which is Rajasthan, Maharashtra, Gujarat MP. So are you seeing this north central belt 44:55 44 minutes, 55 seconds also giving you signs of you know business momentum improving at at customer levels? 45:03 45 minutes, 3 seconds Yeah. So in our base state at a such a high base level we continue to grow in Rajasthan at at a compounded rate of more than around 20 percentage or so and 45:12 45 minutes, 12 seconds uh with 111 branches and uh at AUM which is touching about 7,400 crores for us in Rajasthan we at that base we continue to 45:21 45 minutes, 21 seconds go grow with a supreme and pristine quality. Uh UP is one of the areas on the expansion spree for us in the coming years to really get into much deeper. 45:32 45 minutes, 32 seconds We've had five years plus of an experience in that and that's what the quality has been uh pristine from our riskmetric perspective and that's one 45:39 45 minutes, 39 seconds area which will we go deeper further to expand uh the the the Uttar Pradesh belt so to say. So yeah Uttar Pradesh belt 45:47 45 minutes, 47 seconds the states the cohort of our states which are a 10 years kind which is Rajasthan, Gujarat, Maharashtra and MP really contributing to the ones the 45:56 45 minutes, 56 seconds other cohort which is in the likes of the Hana, Delhi and specifically UP where we have been only with about 39 46:03 46 minutes, 3 seconds branches in UP that's one state which we want to really push the pedal and accelerate given that we have had an experience of more than five years in 46:11 46 minutes, 11 seconds that state and plus as we said called out earlier on the southern states We are still having Tamil Nadu, Andhra 46:19 46 minutes, 19 seconds Pradesh and Telanga. Three states actually available to us for our growth opportunities. We just entered Tamil Nadu but the three states along with 46:26 46 minutes, 26 seconds Karnataka the southern states the cohort of the old old states which are vintage states and the existing ones like the UP 46:34 46 minutes, 34 seconds where we like to expand will really help us uh go much deeper and accelerate growth. 46:40 46 minutes, 40 seconds Got it sir. So the second question was while you highlighted that we'll have 25% disbursement growth as target for 27 46:48 46 minutes, 48 seconds for 27 what would be the loan growth aspiration uh for for 27 in that case 46:55 46 minutes, 55 seconds so as I expect that we have a 25%age growth on the dispersement uh see we've actually again to put that in metrics in 47:03 47 minutes, 3 seconds a very simplistic manner we said that we are doing around 1.4 approximately 1.4 4 crores per branch per month on an 47:10 47 minutes, 10 seconds average basis. Just a bump up of uh 1.6 to 1.7 crores really helps us to move the needle much faster. plus an 47:18 47 minutes, 18 seconds additional uh as 25 to 30 lakhs of business per branch really moves that and why I'm saying so is based on the lot of management initiatives which 47:26 47 minutes, 26 seconds we've been taken by the branch excellence program which really help us to granularly move the needle in all of this and incrementally uh that actually 47:35 47 minutes, 35 seconds helps us to uh project that kind of forecast that kind of growth in a very very secular and a granular manner. 47:44 47 minutes, 44 seconds Got it. and the loan book growth guidance for 27. 47:49 47 minutes, 49 seconds Yeah, that would be in the range of 17 to 18 percentage which is almost uh around 300 basis more better than the the F26. 47:59 47 minutes, 59 seconds Got it. Got it sir. Got it. Thank you. 48:02 48 minutes, 2 seconds Thank you sir. Thank you so much for answering my question and good luck for the next one. Thanks Sh. Thank you. 48:09 48 minutes, 9 seconds Our next question comes from the line of Chintan Sha from ICA Securities. Please go ahead. Yeah. Uh thank you for the opportunity. 48:18 48 minutes, 18 seconds Uh so yeah on the disbursements again uh basically uh we are guiding that it would be 25% rate uh driven by the 48:27 48 minutes, 27 seconds branch expansion and a couple of uh projects which we have uh implemented which are which is a kind of transformation project and due to 48:34 48 minutes, 34 seconds inflation but so uh just on asking a in a different way what could be the risk which could lead us to uh not achieve 48:42 48 minutes, 42 seconds this? Do you envisassage any risk or what could be the probable risk which could lead to a miss on this number if any uh which you could think of right now? Yeah, thanks. 48:52 48 minutes, 52 seconds I think it is only about the macroeconomic stability has to continue. 48:55 48 minutes, 55 seconds There has not to be any of the typical headwinds which really uh should blow us out or any black swan event which is very difficult to underwrite or to 49:04 49 minutes, 4 seconds predict. Other than that on the basis of what we are uh currently uh doing and whatever we've seen in quarter 3 and 49:11 49 minutes, 11 seconds what we've seen in quarter four I think that gives us confidence to really uh project and forecast with uh the granular and secular growth uh children. 49:22 49 minutes, 22 seconds Sure. So nothing related to the competition or assets probably interest rates movement probably that could be a detrant to this growth right? 49:31 49 minutes, 31 seconds No nothing of that sort that we envisage. See if you look at a couple of things which you would try to really uh if I were to highlight is the BT out I 49:38 49 minutes, 38 seconds think that's one indicator which you really look at it for the quarter three we are at 4.5 percentage which is 60 pips lower than the same period last 49:45 49 minutes, 45 seconds year and again from a ticket size perspective if you look at it whatever competition or what are what people are envisaging on the affordable housing 49:53 49 minutes, 53 seconds finance companies to step up I think the ticket size is very very different range that's uh point number two point number three we have focused very much on self 50:02 50 minutes, 2 seconds assessment based self-employed non-professionals as one of our key segments which are around 15%age new to 50:09 50 minutes, 9 seconds credit. 92%age of them remain to be new to mortgage which is for the first dwelling house that they are taking and raising the finance which is very 50:17 50 minutes, 17 seconds different from underwriting something which has a different connotation from affordable which is in excess of 25 lakhs as what people really classify. So 50:26 50 minutes, 26 seconds from our segment we are very clear uh that our reach uh tier two tier three towns deep impact one understanding of 50:33 50 minutes, 33 seconds having underwritten more than half a million customer at this period of time as we speak that's one which we already underwritten plus the kind of login 50:41 50 minutes, 41 seconds which you do every month we have a proper data history of the customers what we have sourced what we have underwritten how they performed I think 50:48 50 minutes, 48 seconds there's a lot of lot of data and science available to us to understand much more granularly secularly region wise customer segment wise. Uh I think that 50:58 50 minutes, 58 seconds that really helps us and stands out in in in the uh in the market actually. 51:04 51 minutes, 4 seconds Uh sure. So that is quite helpful. And just one last thing on the Tamil on Tamil Nadu. So we have recently entered Tamil Nadu with around 10 branches. Uh 51:12 51 minutes, 12 seconds so but given that this is a very uh highly competitive market which is what we hear from PR as well. So uh how are 51:19 51 minutes, 19 seconds we placing ourselves uh to gain the to get our share market share in this um markets and any numbers you could throw 51:26 51 minutes, 26 seconds on the disbbursements or AUM targets for Tamil Nadu for FI27. Yeah. 51:31 51 minutes, 31 seconds So Chel if you look at aas's philosophy of doing credit right and once we enter a new state we give good enough time to understand the credit environment the 51:39 51 minutes, 39 seconds local environment and then really step up. So unlike uh and we've never chased market shares really so to say and the market share chase is typically when you 51:47 51 minutes, 47 seconds go out in the market and try to do the BDN and stuff for that I think we've never believed in that philosophy and even if you look at from a perspective 51:54 51 minutes, 54 seconds of entry into Tamil Nadu that is there where we started hosour we were there in Karnataka and we entered the the the piece which is nearing the Karnataka 52:03 52 minutes, 3 seconds bell so understanding of the market doing the credit right and giving enough time for the market to mature to understand for the segments which we 52:10 52 minutes, 10 seconds serve for I think uh and then typically we we step up uh and as we've guided we will continue to do that in in the 52:19 52 minutes, 19 seconds near-term period and we are confident in the next year having opened 10 and another seven plus we are with 17 branches that will additionally have 52:27 52 minutes, 27 seconds about 75 to 100 crores next year to our kitty but as I again reiterate we never chase market share I think when you start chasing market share I think it's 52:36 52 minutes, 36 seconds very important to get the foundation right in the new state which you do so like for example the last state which we entered was Kataka. So we've we very 52:43 52 minutes, 43 seconds conscious about what we underwrite what we put the fundamentals in place and then really accelerate which is there and to your point of competition I think 52:51 52 minutes, 51 seconds from a perspective of the market segments which we serve we are very very sure about the kind of potential which is available there as we are clear on 52:59 52 minutes, 59 seconds SEMP focus unserved underserved plus the new to credit and new to mortgage I think that gives us confidence uh getting into those markets and building 53:08 53 minutes, 8 seconds that and I think I look at from a opportunity perspective for for us because if you look at we have three wide open spaces available three states 53:15 53 minutes, 15 seconds are actually available for us to really uh uh build on which is uh Tamil Nadu to Andhra Pradesh and Teladana. 53:24 53 minutes, 24 seconds Sure. So this is quite helpful. Thank you and all the best. Thanks. Thank you. 53:33 53 minutes, 33 seconds Next question comes from the lineup Rajiv Ma from Yes Securities. Please go ahead. 53:38 53 minutes, 38 seconds Yeah. Hi. uh congrats on good performance and asset on asset quality and spreads. Uh I I just have two three 53:44 53 minutes, 44 seconds things. First is uh you know for having a better productivity uh any changes planned in incentivization for employees and channels. Uh that's first question. 53:55 53 minutes, 55 seconds Second is on this OnePlus GPD improvement. Uh did the bounce improve or did we made a better effort on connections and hence you were able to 54:03 54 minutes, 3 seconds correct uh you know the same a larger volume of bounce and third is on asset quality. Uh generally traditionally we 54:11 54 minutes, 11 seconds see a large pullback in buckets and sizable input recoveries in Q4. It did not happen last year because it was a difficult income liquidity environment 54:20 54 minutes, 20 seconds for customers. But this quarter in Q4 uh you you you uh can we revert back to that traditional movement in asset quantity which we generally see in Q4? 54:30 54 minutes, 30 seconds I think uh you have three questions. 54:32 54 minutes, 32 seconds I'll answer the second question. I think the input quality of credit underwriting is the ones which really define on risk adjusted returns and doing the robust 54:39 54 minutes, 39 seconds risk management practices has always helped ouras right from day one and foundationally our information our risk architecture really contributes towards 54:48 54 minutes, 48 seconds sound uh sourcing sound underwriting and sound risk management and coupled with state-of-the-art uh digital and 54:57 54 minutes, 57 seconds analytical batch collection mechanism and as we say that we have a robust one on predictive descriptive and descriptive analytics to really forecast 55:05 55 minutes, 5 seconds the probability of the bounce much before the customer really bounces. So I think all those have been perfected. I think all of that really put together 55:13 55 minutes, 13 seconds really helps us to deliver for what what we are what what numbers you see on board. That's uh the answer to your 55:20 55 minutes, 20 seconds question number two. Question one was on the employee productivity as I spoke that the branch excellence programs under the part of where we focus on 55:29 55 minutes, 29 seconds really helping the channel uh and helping the the last mile frontline salesperson to know where to go how to 55:36 55 minutes, 36 seconds go and how to approach aided by a digital mechanism that's led by the pin code identification the market identification and coupled with lot of 55:46 55 minutes, 46 seconds CSCled or eitraled kind of sourcing which is also helping to really increase the So what is important there is that how do you increase the throughput when 55:54 55 minutes, 54 seconds your input increases by the visits which are said I'm again reiterating that we've seen a 30%age increase in the sales visits by the front line which has 56:03 56 minutes, 3 seconds resulted into the good quality really coming in and finally resulting into a good uh uh stable uh growth and again we 56:11 56 minutes, 11 seconds will really look at genai bot implementation in quarter three for which will actually help in collection at advanced stage from our analytics 56:19 56 minutes, 19 seconds perspective which will also help in the quality which is there and as we move on this uh we will enhance digitally a it 56:27 56 minutes, 27 seconds and to the to the frontline uh staff to increase the productivity in a right manner. So I think we are incentivizing 56:34 56 minutes, 34 seconds the right kind of a food by digitally aiding them to perform and helping them to uh really source right source well 56:43 56 minutes, 43 seconds and source it uh in quality manner. 56:49 56 minutes, 49 seconds And the third question was on the traditional pullback that we see which is very significantly in Q for asset quality. Uh would we see that kind of a pullback in this quarter as well? 57:00 57 minutes Uh uh um by seeing a January number uh I think uh uh we are at a good trajectory have a pullback in OnePlus or OnePlus 57:09 57 minutes, 9 seconds always have a uh I think after a quarter we start to see a good uh bounce back in 57:16 57 minutes, 16 seconds the 90 plus and stage two basically. So we are quite hopeful uh our number will be much better on the on the quality 57:25 57 minutes, 25 seconds front because across the state we have seen the improvement across the states across the states. 57:31 57 minutes, 31 seconds Got it. Thank you. Best of luck. Okay. Thank you. 57:40 57 minutes, 40 seconds Thank you. 57:43 57 minutes, 43 seconds Our next question come from the line of Sonel Gandhi from AM securityities. Please go ahead. 57:52 57 minutes, 52 seconds Uh yeah thank you for the opportunity. 57:54 57 minutes, 54 seconds Um so uh when I look at uh you know uh a per branch for Gujarat, Mahar Madhya Pradesh and Uttar Pradesh. Now these 58:02 58 minutes, 2 seconds three states have been showing you know growth of less than 10%. Uh probably you know NP being somewhere closer to 4%. Um now if you look at the data even the 58:10 58 minutes, 10 seconds branches have not been really added uh you know over the last uh seven eightuh quarters you know in the states so you think that uh you know that that has 58:18 58 minutes, 18 seconds happened in the states or are the attritions high what is the competitive uh you know intensity or did you uh you know kind of tighten your credit you 58:26 58 minutes, 26 seconds know what uh this almost contributes almost about 30% of a so if you could talk about it so I think MPV had called out earlier on 58:34 58 minutes, 34 seconds certain part of which is there I think the other we really look at it ours from an opportunity perspective both from Gujarat and Uttar Pradesh. I think as 58:42 58 minutes, 42 seconds you speak we've focused on as I spoke earlier on Uttar Pradesh going really deeper into the uh the geographies and the districts of Uttar Pradesh and 58:50 58 minutes, 50 seconds that's what our plan is for the next financial year. So that will actually help us to really scale that uh operations in Uttar Pradesh and 58:58 58 minutes, 58 seconds specifically on Gujarat we going quite deep because we've realized and recognized that we are there in the state for last 10 years and uh we've had 59:07 59 minutes, 7 seconds a lot of uh implementation programs of going deeper by the RRO mechanism which is resident representative offices which 59:14 59 minutes, 14 seconds we are officers which we are looking at it coupled by model branches I think that spread out for us in Gujarat will also which will contribute and help us 59:22 59 minutes, 22 seconds to build a right uh mechanism and scale up uh rightfully in in that state. So this this this is what for the three 59:31 59 minutes, 31 seconds states uh for ours which would be really helpful in the the coming quarters. 59:39 59 minutes, 39 seconds Mhm. Uh so my second question was on uh OPEX to assets. So we are planning to add you know 25 branches uh this this 59:46 59 minutes, 46 seconds quarter probably 78 67 already added 50 branches uh you know next year. Uh so that's that's a big chunk. So how do we 59:53 59 minutes, 53 seconds see our opex 2 assets moving? And second relative would be on roe. So our roses are still at 14.3%. 1:00:00 1 hour So uh you know on stable basis where do you see roses you know reaching in say next two to three years. 1:00:08 1 hour, 8 seconds Yeah. Yeah. We appreciate uh uh your question. I think when we open the branch so I think 25 branches just make out to three four uh uh uh roughly 5% of 1:00:18 1 hour, 18 seconds your total branch strength basically and uh all these branches are now we are opening in the deep market so per branch 1:00:24 1 hour, 24 seconds opening uh infra cost is not that much high generally they now this uh small branches has a main power 4 + 1 uh uh we 1:00:33 1 hour, 33 seconds are more going deeper through RO as such mentioned where it hardly add any opex cost so it mix all these things. Uh we 1:00:42 1 hour, 42 seconds are confident that our opex is more or less on on on on downward trajectory. 1:00:48 1 hour, 48 seconds Yes. Because of we is this when CBC came they they announced uh uh ISO plan for 1:00:55 1 hour, 55 seconds for long-term uh uh uh uh uh uh management uh growth management performancedriven uh uh uh uh given. So 1:01:03 1 hour, 1 minute, 3 seconds that is extra cost came uh uh in in this quarter three. Basically if you remove that one so you will find it is not much 1:01:11 1 hour, 1 minute, 11 seconds change in quarter two to quarter 3 or year note year basis. Uh so excluding ESO cost uh we are at at a similar 1:01:19 1 hour, 1 minute, 19 seconds level. Yeah, with the digital all infra tech in invitation, we are looking forward next year another 25 basis point 1:01:27 1 hour, 1 minute, 27 seconds OPEC saving in the next year and with this with this 25 25% dispersion growth 1:01:34 1 hour, 1 minute, 34 seconds 18% in AUM growth will give us a 25 basis point OPEC saving in the next year 1:01:43 1 hour, 1 minute, 43 seconds the part again you know our you see oral ROA basically uh we are now 1:01:53 1 hour, 1 minute, 53 seconds close to 5% plus spread after I think six six to eight quarters after that basically which is now more or less 1:02:00 1 hour, 2 minutes sustainable uh despite 15 based reductions uh uh opex as I mentioned we are in that range credit cost we are not 1:02:07 1 hour, 2 minutes, 7 seconds seeing much change we are confident 20 basis point uh uh credit cost uh across the I think in next couple of years 1:02:14 1 hour, 2 minutes, 14 seconds every year we don't see so all these lead to sustainable better ROA And ultimately our growth is coming to back. 1:02:21 1 hour, 2 minutes, 21 seconds So that will increase our leverage. So obviously right right now we are almost 16% on on on on net worth growing on 1:02:30 1 hour, 2 minutes, 30 seconds annually without bringing new capital on the table because of all these India's adjustment on P&L basis you find ro 1:02:38 1 hour, 2 minutes, 38 seconds around less than 15%. But but but but uh but at at at but at uh uh network growth level uh uh without 1:02:47 1 hour, 2 minutes, 47 seconds taking any new capital it is 16% around consistently basically. So so we are in that trajectory of uh let's say assume 1:02:55 1 hour, 2 minutes, 55 seconds grow net worth growth 16% to 18% in next couple of years. 1:03:02 1 hour, 3 minutes, 2 seconds Okay sir. Thank you. Thank you so much sir. 1:03:11 1 hour, 3 minutes, 11 seconds Ladies and gentlemen, that was the last question for today. I would like to hand the conference over to the management for the closing comments. Thank you and over to you team. 1:03:19 1 hour, 3 minutes, 19 seconds Thanks everybody for joining the call. 1:03:22 1 hour, 3 minutes, 22 seconds As we conclude today's running call, I would like to extend my sincere gratitude to each of you for your time, engagement, and continued support. The 1:03:31 1 hour, 3 minutes, 31 seconds progress we've made is a testament of our unwavering dedication of our team, the trust placed by us in our shareholders, and the enduring loyalty 1:03:38 1 hour, 3 minutes, 38 seconds of our customers. Looking ahead, we remain optimistic about the opportunities that lie before us. We are 1:03:45 1 hour, 3 minutes, 45 seconds confident that our strategic initiatives underpinned by product risk management and a customer-centric approach will 1:03:52 1 hour, 3 minutes, 52 seconds continue to deliver sustainable growth and long-term value for all our stakeholders. Should you have any further questions or require additional 1:04:01 1 hour, 4 minutes, 1 second information, please feel free to reach out to Rakkesh Hindi, our head of investor relations. Thank you once again 1:04:08 1 hour, 4 minutes, 8 seconds and we wish you all the all the best for the days ahead. God bless. 1:04:13 1 hour, 4 minutes, 13 seconds Thank you so much sir. Ladies and gentlemen, on behalf of AAS Finances Limited, that conclude this conference. 1:04:19 1 hour, 4 minutes, 19 seconds Thank you for joining us and you may now disconnect your line. Thank you team. Thank you.