Aye Finance Ltd — Q4 FY26

Aye Finance Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=ZVtRjbQTYA8 Published: 2 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to the I Finance Limited Q4 FI26 earnings call hosted by IFL Capital. 0:11 11 seconds As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation 0:18 18 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:26 26 seconds zero on your touchstone phone. I now hand the conference over to Mr. Viral Sha from IFL Capital. Thank you and over to you sir. 0:36 36 seconds Thank you Ikra. Good morning everyone. This is Viral Sha from IFL Capital. 0:41 41 seconds Welcome to the 4Q FI26 earnings conference call of Finance Limited. On behalf of IFL Capital, I would like to 0:49 49 seconds thank the management of I Finance for giving us this opportunity to host the call. From the management team today we have Mr. Sanjay Sharma, managing 0:57 57 seconds director and co-founder and other senior members of the management team. We will have opening comments from the management team post which we will open 1:05 1 minute, 5 seconds the floor for Q&A. With that, I would like to transfer the call to Sanjay for his opening remarks. Over to you. 1:14 1 minute, 14 seconds Thank you Vir and a good morning to everyone. 1:19 1 minute, 19 seconds We appreciate you taking the time to join us today and on behalf of Finance Limited, I extend a warm welcome to all 1:26 1 minute, 26 seconds of you to our fourth quarter FI26 earnings call. Uh I'm today joined by 1:33 1 minute, 33 seconds our chief financial officer Mr. Gorov sage and by Mr. Soap Prakash the head of strategy products and investor relations 1:42 1 minute, 42 seconds uh along with the ISFL team and the investor relations team from LGA. Uh before I talk to you about our 1:50 1 minute, 50 seconds performance, I would also like to share with you some an important positive update in our senior management team. 1:57 1 minute, 57 seconds Mr. Goro Sage has uh been appointed as the chief financial officer of the company. He has earlier been with the CFO at uh Airel Payments Bank and 2:06 2 minutes, 6 seconds Housing Finance and brings the experience and gravitas needed for the role of a CFO in a listed company. Uh 2:13 2 minutes, 13 seconds Mr. his own Satar Praash who has been our interim CFO and has been the u the has done the bullwark of work in the 2:22 2 minutes, 22 seconds investor relations area during the road shows is now resuming back his key role as head of strategy head of product and 2:30 2 minutes, 30 seconds also investor relations and he's a SMP of the company uh now let me take a moment to step back and reflect on how FI26 has been a 2:39 2 minutes, 39 seconds defining year for I finance not just for the financial ial performance but also as a debut in the public market through 2:47 2 minutes, 47 seconds her IPO. We successfully completed our public initial public offering in February 26 and raised 1,0 crores. Uh my 2:57 2 minutes, 57 seconds team and I understand that this is an important milestone and it comes with a greater responsibility and even stronger conviction in our mission. 3:06 3 minutes, 6 seconds I finance was built on a simple but powerful belief to expand and provide formal credit to the microenterpreneurs 3:15 3 minutes, 15 seconds across India. These are the businesses that have so far been excluded or not provided any sort of business loans by 3:22 3 minutes, 22 seconds the organized uh NBFCs or banks. Over the years we have stayed true to this belief and we remain deeply rooted to 3:29 3 minutes, 29 seconds our commitment and thanks to that focus we have a unique asset class which uh you will hardly see presentation in any 3:38 3 minutes, 38 seconds other company and we are present across 18 states three union territories with 571 branches serving more than 70 plus 3:47 3 minutes, 47 seconds unique business uh clusters and we have over 6.4 four lakh active borrowers 3:54 3 minutes, 54 seconds lending to this Indian micro MSME segment continues to remain significantly underpenetrated and 4:02 4 minutes, 2 seconds undercrowded if I may say so and is this presents a large structural opportunity for us in the long term. Our 4:09 4 minutes, 9 seconds differentiated approach of combining proprietary underwriting models and use of AI and machine learning has so far 4:17 4 minutes, 17 seconds positioned as uh as a dominant player to capture this opportunity with responsibility. 4:24 4 minutes, 24 seconds That said, FI26 has not been without its challenges. 4:30 4 minutes, 30 seconds The first half of the year was marked by tighter liquidity conditions, elevated credit costs across the sector and macro headwinds on small businesses. In 4:39 4 minutes, 39 seconds response, we remained disciplined and tightened our underwriting and collection efforts and focused on the portfolio quality. The outcomes or 4:48 4 minutes, 48 seconds results of that are visible in the steady trajectory of improvement through the second half of FI26 and particularly 4:55 4 minutes, 55 seconds in quarter 4. I will now touch upon five key areas that will give you a very good color of what we are doing and how our 5:03 5 minutes, 3 seconds business uh is expected to perform. Uh these five areas the first one would be on the business performance itself and 5:11 5 minutes, 11 seconds I'll talk a little bit about quarter 4 and the annual performance of FI26. 5:16 5 minutes, 16 seconds Second, I would like to cover product mix. How the mix of hypothetication loan and the mortgage loans uh is being 5:24 5 minutes, 24 seconds brought about and what are the effects of that of that mix change. Uh third is on the technology and some some of the 5:31 5 minutes, 31 seconds new innovations that we have seen deployed in the last uh few months. Uh fourthly, I'll talk about the liability 5:38 5 minutes, 38 seconds book uh and how it will uh behave uh in the coming year. And finally the evolving market environment especially 5:47 5 minutes, 47 seconds in the backdrop of uh the problems in west Asia and uh also the issues of uh 5:54 5 minutes, 54 seconds LPG etc and how does it relate to our microscale MSMES uh after that I will open it for questions. So let me start 6:02 6 minutes, 2 seconds with the performance itself on quarter 4 we ended the year on a very strong quarter 4. Our assets under management 6:09 6 minutes, 9 seconds stood at 7,044 crores reflecting a sequential 6% growth quarteron quarter and an annual growth of 27%. 6:21 6 minutes, 21 seconds Reflecting the same, disimbursements for quarter 4 grew at 26% sequentially to 1,655 6:28 6 minutes, 28 seconds crores of disbursement in the quarter and this reflects uh the fact that there's a healthy pipeline of pipeline of sustained demand for small 6:36 6 minutes, 36 seconds businesses. For the full year, a disment stood at 5,169 crores reflecting a growth of 20% over the last year. 6:44 6 minutes, 44 seconds The mean marketer profit for the quarter stood at 86 crores recording 110% 6:51 6 minutes, 51 seconds yearon-year growth and a 100% growth quarteron quarter. The net margins for the quarter stood at 16.4% 6:59 6 minutes, 59 seconds showing improvement despite an increasing share of modg loan in our portfolio mix. During the quarter four 7:06 7 minutes, 6 seconds our overall cost of borrow borrowings moderated to 10.87%. 7:13 7 minutes, 13 seconds Whereas our incremental boring in quarter 4 were even lower at 10.13%. 7:18 7 minutes, 18 seconds And uh this is because the older borings keep getting replaced with new borings and there's a fall in cost of boring which compensates for the reduction in 7:27 7 minutes, 27 seconds yield because of the mix. This has kept the nymph stable. This can be expected in the coming year as well and I'll talk about this a little more when I talk 7:36 7 minutes, 36 seconds about liabilities. Our collection metrics also have shown tremendous strengthening and some meaningful 7:43 7 minutes, 43 seconds strengthening during the quarter. Our non-collection efficiency nonod collection efficiency 7:50 7 minutes, 50 seconds has improved from 99.1% in October 25 consistently to 99.5% 7:57 7 minutes, 57 seconds in March 26. Even our top three state that are Bihar, Uttar Pradesh and Rajasthan each of them have crossed the 8:05 8 minutes, 5 seconds collection efficiency of 99.5% on the nonOD collection efficiency and Rajasthan leads with a 99.7% nonOD collection efficiency. 8:17 8 minutes, 17 seconds Further down into bucket one, our collection efficiency here also has improved by a significant 107 basis 8:24 8 minutes, 24 seconds points from 51.8% 8% in October 25 to 62.5% in March 26 over a 6-month period. 8:34 8 minutes, 34 seconds Thanks to these uh wonderful collection efficiency markers, our asset quality has seen consistent and measurable 8:41 8 minutes, 41 seconds improvement during the quarter. Our PARX or PAR 1 plus whatever you want to call it stood at 6.9% 8:50 8 minutes, 50 seconds improving from 7.6% 6% in the third quarter 3 FI26 trade cost also reduced to 4.3% in 8:58 8 minutes, 58 seconds quarter 4 compared to 4.67% 67% in previous quarter which is a 37 basis points reduction quarteron quarter 9:08 9 minutes, 8 seconds and this is not uh all this is the fifth consecutive quarter that we have seen a 9:16 9 minutes, 16 seconds reduction in our quarterly credit costs so this is a consistent effort is being giving us consistent outcomes of 9:24 9 minutes, 24 seconds reduction in trade cost for the five quarters in the past the stage two bucket 9:31 9 minutes, 31 seconds which is 30 BPD and 60 DPD buckets have been brought down to a near 1.12% of our 9:39 9 minutes, 39 seconds portfolio through disciplined management of collection efficiencies and this is a good marker of the quality of our portfolio. 9:49 9 minutes, 49 seconds The GMPP for March 2026 stood at 4.77% and it has declined by 17 basis points 9:56 9 minutes, 56 seconds from 4.94 in the previous quarter. This reflects a clear improving trend in the portfolio quality. 10:06 10 minutes, 6 seconds The movement is clearly an outcome of our deliberate actions of tightening underwriting standards where needed, 10:14 10 minutes, 14 seconds optimal deployment of collection resources and deeper integration of data and AIdriven early warning systems uh 10:21 10 minutes, 21 seconds that allow us to identify and act before the stress surfaces. 10:25 10 minutes, 25 seconds On the annual performance for the full year ended March 31, 2026, our overall profitability improved sign 10:33 10 minutes, 33 seconds significantly with profit growing by 13% to 194 crores in FI26 supported by reduction in credit costs 10:42 10 minutes, 42 seconds and improving credit uh or asset quality. Our total income stood at 1,796 10:49 10 minutes, 49 seconds crores with a year-on-year growth of 20% and net interest margin for FI26 stood at 14.67%. 10:58 10 minutes, 58 seconds Moving on to the second area I wanted to talk of was the product mix. Over the past two years, we have evolved our 11:06 11 minutes, 6 seconds product mix so that we have a good mix of mortgage loans as well as hypotheseation loans. Our mortgage loans 11:12 11 minutes, 12 seconds now comprise 23% of our portfolio as compared to 12% in FI24 2 years back. 11:21 11 minutes, 21 seconds Our secured hyper education loan accounts up to 40% and the unsecured hyper education loans account for 30% 11:30 11 minutes, 30 seconds 37% as of FI26N. 11:35 11 minutes, 35 seconds As a strategic plan, we have increased the proportion of mortgage loans in our portfolio. And while a higher proportion 11:42 11 minutes, 42 seconds of secured lending or mortgage loans typically exert some pressure on yields, we aim to enhance the overall portfolio 11:51 11 minutes, 51 seconds stability and profitability through an increase in average tenor of overall portfolio. So overall mortgage will not 12:00 12 minutes uh bring down the profitability although the yield will come down. uh but it'll be compensated through improvement in operating expense and in credit cost. 12:11 12 minutes, 11 seconds On the technology front, we have our in-house data science and machine learning team which has been delivering 12:18 12 minutes, 18 seconds a variety of models and tools that have helped us automate many of our processes in the last so many years. Recently we 12:26 12 minutes, 26 seconds completed a significant pilot uh which was uh there in the newspapers that further enhances our AI capabilities in 12:34 12 minutes, 34 seconds credit underwriting. The generative AI tool translates unstructured input such as store images into actionable 12:42 12 minutes, 42 seconds financial assessment for underwriting trading businesses in tier 2 and beyond cities. Built on company's extensive proprietary data sets and rigorously 12:50 12 minutes, 50 seconds tested for consistency. This model uses a multimodal large language model integrated integrated with our in-house 12:58 12 minutes, 58 seconds ML machine learning model to estimate monthly sales of trading businesses such as government and grocery stores. And 13:06 13 minutes, 6 seconds this improves our ability to extend formal credit with greater confidence and more consistency than traditionally underwritten methods. 13:18 13 minutes, 18 seconds Moving to the next I uh next agenda item that I mentioned to management of liabilities. On the liability front, the 13:26 13 minutes, 26 seconds proceeds from our IPO have meaningfully strengthened our capital adequacy to 42.2%. 13:32 13 minutes, 32 seconds Providing a solid foundation to support our future growth. We continue to diversify our fund profile across banks, 13:40 13 minutes, 40 seconds NBFCs and capital market instruments including NCDS which enhances both stability and flexibility of our 13:47 13 minutes, 47 seconds borrowing mix. Our lending qualifies completely for priority sector lending uh norms and this always ensures that we 13:56 13 minutes, 56 seconds have adequate and good liquidity available from the markets for our business. Our incremental cost of 14:03 14 minutes, 3 seconds borrowing for the quarter as I mentioned stood at 10.13% in quarter 4 and the blended cost of borrowing stood at 10.87%. 14:14 14 minutes, 14 seconds The movement in cost of borrowing we'll see three major components play out in FI27 14:21 14 minutes, 21 seconds as they have played out in FI26. First is the replacement of high cost debt as it matures with debt with lower rate of 14:30 14 minutes, 30 seconds interest. You can see our blended cost is 10.87. Our incremental borings are at 10.13. This itself as the new borings 14:37 14 minutes, 37 seconds are taken and they replace old boring, we will see a movement down in the credit cost. The second big component is 14:45 14 minutes, 45 seconds the possible effect of a corporate rating review during the year. We had been rated two years back, more than two 14:52 14 minutes, 52 seconds years back and today we have a much larger network and hopefully we should get a possibly a better rating than the 15:01 15 minutes, 1 second ace table that we have today and this can also help bring the cost of rates of borrowing down. The third big component 15:08 15 minutes, 8 seconds is the hardening of interest rates in the market which can bring the cost of borrowing or 15:17 15 minutes, 17 seconds rate of interest up. But at the same time I would mention mention that the increase will get moderated by the fact 15:24 15 minutes, 24 seconds that we are a priority sector lender and therefore uh our debt providers may not 15:32 15 minutes, 32 seconds go that much on the cost of uh or rates of uh interest as the rates harden. The 15:39 15 minutes, 39 seconds net effect that we believe could be an upside of about 25 to 35 basis points in 15:46 15 minutes, 46 seconds our borrowing costs which mean that we do expect our borrowing cost to reduce right 25 to 35 basis points compared to 15:54 15 minutes, 54 seconds FI27 that would be our guidance given these three parameters moving on to the market environment and 16:01 16 minutes, 1 second there's so much of of talks around what's happening in West Asia and how it will affect various economies and 16:08 16 minutes, 8 seconds markets. The micro MSME segment in India as of today is witnessing a steady 16:15 16 minutes, 15 seconds recovery. The strong recovery in rural consumption which played out in FI26 continues to rub off on the tiny scale 16:23 16 minutes, 23 seconds businesses that we target. With support from government initiatives and increasing formalization of economy, we are seeing a constructive demand 16:31 16 minutes, 31 seconds environment for working capital across our core segments. I had mentioned in my last earning call that our customer 16:38 16 minutes, 38 seconds segment is not linked to the organized industry supply chain and is hence insulated from the industry trends that 16:46 16 minutes, 46 seconds impact the organized MSME. This continues to hold true and uh we believe that with the effect of looming war and 16:55 16 minutes, 55 seconds heightened trade barriers, our customer segment of tiny scale micro enterprises 17:02 17 minutes, 2 seconds is expected to continue to to uh hold good business margins and continue to 17:11 17 minutes, 11 seconds supply to their local markets without too much of disruption. U I think this is how we uh view the market. We are 17:20 17 minutes, 20 seconds visible in 18 states and three union territories and our March data does not 17:27 17 minutes, 27 seconds show any sort of uh adverse impact from the effects of uh what's happening in 17:34 17 minutes, 34 seconds West Asia. uh we will continue to monitor this uh space and uh we have as I said many early warning metrics which 17:43 17 minutes, 43 seconds help us start uh reacting to any situation that is emerging. 17:49 17 minutes, 49 seconds Finally our S stands for FI27 we have exited quarter 4 or FI26 17:56 17 minutes, 56 seconds with a quarterly ROE of 16% and a quarterly ROA of 4.6%. 18:03 18 minutes, 3 seconds Second is that we have entered the year FI26 with a strong disbursement momentum of FI 26 quarter 4 and third is that an 18:13 18 minutes, 13 seconds improving asset quality trajectory is quite visible and we also are carrying a robust provisional coverage uh reserve 18:23 18 minutes, 23 seconds or PCR of 64%. So we are well capitalized balance sheet uh well 18:29 18 minutes, 29 seconds provided uh for uh possible uh credit uh cost and with good momentum and good 18:37 18 minutes, 37 seconds profitability that we enter the new financial year. 18:42 18 minutes, 42 seconds Our expectation is that for the guidance would be that for FI26 we will target a growth in the range of 25 to 30%. 18:52 18 minutes, 52 seconds We also expect the trade cost to continue to normalize further and we expect uh to be guided in our workings 19:01 19 minutes, 1 second on a 3.5 to 4% credit cost supported by better portfolio quality and sustained collection efficiencies. 19:09 19 minutes, 9 seconds Also in FI26 we had invested a lot of our resources in building the team and related infrastructure for collections and also for the nent mortgage business. 19:22 19 minutes, 22 seconds In FI27, we'll focus on sweating these assets to build productivity and bring operating expense ratio to the range of 19:31 19 minutes, 31 seconds 8.25 to 8.75. Remember that we ended the year with a 9.6 operating expense ratio. 19:39 19 minutes, 39 seconds Taken together, these factors give us confidence that we should be able to target a ROA of 4 to 4.5%. 19:49 19 minutes, 49 seconds and deliver sustainable and responsible growth while continuing to strengthen our core business fundamentals. 19:56 19 minutes, 56 seconds I think with that I uh I can close. Uh we can now open the floor for questions. 20:03 20 minutes, 3 seconds Thank you very much. 20:08 20 minutes, 8 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. 20:18 20 minutes, 18 seconds 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. 20:28 20 minutes, 28 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 21:10 21 minutes, 10 seconds The first question is from the line of Deepak Pod from Tafire Capital. Please go ahead. 21:17 21 minutes, 17 seconds I'm audible, sir. Yes, you are. Yes, you are audible. 21:23 21 minutes, 23 seconds Okay. Uh, great. Thank you very much, sir, for this uh opportunity. So just first up wanted to understand I mean in 21:30 21 minutes, 30 seconds terms of our focus area I mean the the MSME is is our main focus area is there 21:38 21 minutes, 38 seconds any other product also we are looking at and currently MSME forms more than 90% of our revenue our um the loan book 21:48 21 minutes, 48 seconds thanks Deepak uh we are focused only on the MSME uh businesses to the extent 21:56 21 minutes, 56 seconds that these are typ typically the small business which could be into manufacturing, trading, service sector 22:03 22 minutes, 3 seconds or could be running a even a dairy business. So I think the focus of this 22:09 22 minutes, 9 seconds uh our mission or focus has been on MSME businesses but when you talk of MSMES we 22:16 22 minutes, 16 seconds are talking of a very tiny scale right at the bottom of the scale of micro scale businesses. 22:24 22 minutes, 24 seconds Mhm. Okay. 22:27 22 minutes, 27 seconds So, so that would form our 100% of our mix, right? 22:31 22 minutes, 31 seconds Yes. And any other products we looking at or or this is what we we intend to do going forward as well. 22:39 22 minutes, 39 seconds Yeah. Um I think that's an excellent uh question. See, for this segment because no one has uh uh has offered them any 22:48 22 minutes, 48 seconds services, financial services, it becomes a wide space and there are so many other products that are their needs which we 22:55 22 minutes, 55 seconds are aware of. So besides the business loans uh they can be gold loans that they look at they can be two-wheeler 23:02 23 minutes, 2 seconds loans even small commercial vehicle loans etc are all relevant to this segment and uh we will this year focus 23:10 23 minutes, 10 seconds on at least one uh one product launch uh there are many ideas gold loan is one idea solar uh solar based uh lending for 23:21 23 minutes, 21 seconds businesses is is another idea so we will probably uh uh add one more product uh research market research is going on for 23:30 23 minutes, 30 seconds uh two or three product ideas and once we have that by end of first quarter we will be able to uh launch our plans. Uh 23:39 23 minutes, 39 seconds before any product launch we do conduct a detailed market survey. So that is what is uh in progress right now. 23:46 23 minutes, 46 seconds Okay. Understood. Understood. And and in terms of secured unsecured mix what would that mean be for us? 23:54 23 minutes, 54 seconds Yeah. So I think our unsecured hypothecation all our loans are business loans. So unsecured hypothecation loans 24:00 24 minutes is about 37% of the mix. Interestingly the all these customers that we have 96% 24:07 24 minutes, 7 seconds of our customers have a self-owned uh residential property or self-owned commercial property. So it's all not 24:14 24 minutes, 14 seconds that property does not exist but for a non-conumption need of business the need 24:21 24 minutes, 21 seconds is only for one or two lakhs and for which uh we don't insist on taking a mortgage over a property. So while 24:29 24 minutes, 29 seconds mortgage is about 23% of her uh book uh secured hypertation loan is about 24:35 24 minutes, 35 seconds 47%. And for about 37% would be uh the unsecured uh HL. We don't see any uh 24:44 24 minutes, 44 seconds credit related problem with the unsecured HL book because it behaves very very similar to the secured application book. 24:53 24 minutes, 53 seconds Okay. And and how should one look at this mix going forward? uh the 65 35 roundabout would we'd like to maintain that? 25:01 25 minutes, 1 second Yeah, I think I think we will continue to uh move the mortgage loan book up and uh today we are at 23%, we want to see 25:09 25 minutes, 9 seconds it grow in the next uh let's say 2 to 3 years to about 30 to 35%. 25:15 25 minutes, 15 seconds The balance uh 65 to 70% will be hyperigation and of that uh more than half of that should be 25:26 25 minutes, 26 seconds Hello sir, you're not audible if you're speaking management team. 25:41 25 minutes, 41 seconds Oh, I think there's some network. So I'll pick that up. 25:50 25 minutes, 50 seconds Sorry sir, even you are not audible. 25:55 25 minutes, 55 seconds 20% I think uh 5 to 26%. Uh rest of the portfolio been 26:04 26 minutes, 4 seconds so we targeting the sorry sorry answer we are not we cannot hear you. 26:21 26 minutes, 21 seconds Ladies and gentlemen, please stay connected while we get the management connect again. 26:27 26 minutes, 27 seconds [music] 26:32 26 minutes, 32 seconds [music] 26:40 26 minutes, 40 seconds [music] 26:43 26 minutes, 43 seconds Heat. Heat. 26:47 26 minutes, 47 seconds [music] 26:52 26 minutes, 52 seconds [music] 27:10 27 minutes, 10 seconds [music] 27:18 27 minutes, 18 seconds [music] 27:35 27 minutes, 35 seconds ladies and gentlemen, we have management team connected now. Over to you, sir. 27:41 27 minutes, 41 seconds Yeah, sorry for that interruption. Uh so Deepak I was mentioning that uh the portfolio that we're looking at uh the 27:48 27 minutes, 48 seconds mortgage piece will probably grow up to about 30 to 35% and we're talking of the next two to three years. 27:55 27 minutes, 55 seconds The 65 to 70% will still be hypert because that is the correct product to address the need of this segment. And 28:04 28 minutes, 4 seconds here uh we believe that more than half of that would be in secured area and uh therefore around you we could say about 30% would still be in the unsecured 28:13 28 minutes, 13 seconds hypertication uh uh loans. Uh typically the unsecured hypertication loans arise from businesses which are in the service 28:22 28 minutes, 22 seconds sector because often or even in trading sector where the inventory is low and it does not cover the total cost of the loan. 28:32 28 minutes, 32 seconds Mhm. Okay. Understood. Understood. Um, sure. So, a 7030 would be a more uh I mean going forward we can we can look in terms of secured unsecured mix, right? 28:42 28 minutes, 42 seconds Yeah. So, 30% mortgage and uh within hypotheication as I said that about 40% would be probably secured hypothication 28:51 28 minutes, 51 seconds and 30 would be unsecured. Those will be the typical target figures for the next two to three years. 28:57 28 minutes, 57 seconds Mhm. Understood. And given this unsecured secured mix isn't our credit cost little on the higher side I mean even even the the one which we are 29:05 29 minutes, 5 seconds guiding for FI27 a 4% credit cost or or or is is that the normalized credit cost given the given the secured unsecured 29:14 29 minutes, 14 seconds book we have sure see uh I think the credit cost has to be seen in reference to one the type 29:23 29 minutes, 23 seconds of market segment that you're targeting and second is the tenor of the loan loans that you're giving uh if the tenor 29:30 29 minutes, 30 seconds of the loan was longer in our case hypertition typically have a tenor of up to two years. So when you have a 2-year 29:38 29 minutes, 38 seconds tenor uh product even a static pool loss of 5 and a half% looks like a 3% credit 29:45 29 minutes, 45 seconds cost. Whereas if the same loan was a 5 years a 10ear loan like a mortgage loan even with a static pool loss of 5 and a 29:54 29 minutes, 54 seconds half% it still looks like one and a half to 2%. So it also depends on the tenor of that loan and second is on the 30:01 30 minutes, 1 second market. Given the market that we are in, we believe that uh the guidance that we are giving of uh around uh 3 point 30:11 30 minutes, 11 seconds uh around 3.5 to 4% for the next year is a sort of guidance that uh would play 30:19 30 minutes, 19 seconds out and I think in the threeear uh forward guidance we have given a number where we expect the asset quality to be 30:27 30 minutes, 27 seconds in the 3.25 to 3.75% uh range. These are the ranges which are uh which are the we 30:36 30 minutes, 36 seconds believe are the right ranges for this uh segment of customer. So obviously uh the pricing is done accordingly the yields are higher therefore. 30:46 30 minutes, 46 seconds Mhm. 30:47 30 minutes, 47 seconds Okay. Okay. Okay. Okay. Understood. And and just one last small thing I mean given given our focus on MSME is our customer base majority towards rural area that would be a right assumption. 30:58 30 minutes, 58 seconds Uh no in fact uh that's not correct. Uh most of our branches are in the tier one 31:04 31 minutes, 4 seconds and tier 2 uh towns. Uh so very few of our branches uh would cover rural areas 31:12 31 minutes, 12 seconds because rural India do not have that density of businesses and we do need uh at least 500 to a,000 businesses in any branch for it to be a profitable branch. 31:23 31 minutes, 23 seconds So we're not in rural areas. We are in 571 locations and these are primarily tier 2, tier three towns. I would say tier 2, tier three towns. 31:34 31 minutes, 34 seconds Yeah. Okay. But but through through these branches only we cover the rural area also. I mean we don't do too much 31:41 31 minutes, 41 seconds of business in the rural area. I mentioned that rural uh consumption is affecting or rubbing off on our business. It is just that when the rural 31:50 31 minutes, 50 seconds area does well often the tier 2 tier three towns also pick up. So it's only that association that uh is relevant. 31:58 31 minutes, 58 seconds Okay. Okay. I I I got it and that was very helpful sir. I mean I I would like to wish you all the best. Thank you so much. Thank you. 32:07 32 minutes, 7 seconds Thank you. The next question is from the line of Adash from Inam. Please go ahead. 32:14 32 minutes, 14 seconds Hello. Hi. Uh good morning Tim. Um sir I have a question on your uh yield right for the quarter you reported um in a 32:23 32 minutes, 23 seconds slide. So obviously your interest income um on quarterly basis have uh moved up 32:30 32 minutes, 30 seconds quite a bit and in spite of that um you know we've ended the year at 14.6% 32:36 32 minutes, 36 seconds net interest margin on assets. Uh we've ended up at 16.4 versus 14.6 six for the 32:43 32 minutes, 43 seconds year and with the capital raise uh then you are guiding to margins which are flattish. So I just wanted to understand 32:50 32 minutes, 50 seconds firstly are the upticks um in the yield core or fourth quarter has some one-offs 32:59 32 minutes, 59 seconds um and how do you explain a flat name versus 26 in context of capital raise plus cost of fund going down and yields picking up. 33:10 33 minutes, 10 seconds Yeah, I just uh [clears throat] again a fairly uh deep question on the 33:17 33 minutes, 17 seconds yield. Uh we believe that the mix because of uh the first of all the yield in hyperication loan has not uh changed 33:26 33 minutes, 26 seconds or has not gone down. If anything it is u it is stable. 33:32 33 minutes, 32 seconds Mod yield loan when the mix comes in it tends to bring a blended deal down. 33:38 33 minutes, 38 seconds This is compensated as I had mentioned by the replacement of old debt with new debt and we have done uh some 33:45 33 minutes, 45 seconds calculation that if we take the old stock of borrowing and whatever is falling due in the next year that is replaced with the rate that we are 33:53 33 minutes, 53 seconds getting today which is incremental rate of 10.13%. 33:57 33 minutes, 57 seconds That itself will give us a 30 to 35 basis points uh drop in the cost of borrowing rate. So that's one thing that 34:05 34 minutes, 5 seconds will play out and which will in a way buffer up the fall in yields because of the mix of mortgage versus hypertation 34:15 34 minutes, 15 seconds law. Overall we feel that the net effect would be that the nymphs will stay steady or uh there's a possibility there 34:22 34 minutes, 22 seconds could be an upside but we are right now uh forecasting that we at least stay level. That is the approach we are coming in. 34:30 34 minutes, 30 seconds It's a conservative approach, conservative view of you know how the yield will behave. But if there is an upside that would work in our favor else 34:39 34 minutes, 39 seconds if there is a hardening of interest rates and if the let's say the interest rates hardening even for priority sector lending then we'll probably be right in what are assumptions today. 34:49 34 minutes, 49 seconds I hope that answers your question. 34:52 34 minutes, 52 seconds Yeah, I was just wondering with I understand the mix part but with the capital raise uh ideally I would have 35:00 35 minutes expected the names to go up. So just trying to yes 35:08 35 minutes, 8 seconds you're right you one would expect that with the equity rate the uh nymphs will go up these will remain the same net 35:17 35 minutes, 17 seconds interest margin because of the cost of uh uh borrowing uh will change. Now if 35:23 35 minutes, 23 seconds you see that from 14.2% in quarter 3 we went up to 16.4% 4% in quarter 4 name 35:31 35 minutes, 31 seconds and from uh I would say not all of it but most of it is come from the lowering of borrowing costs from two effects. One 35:40 35 minutes, 40 seconds is that we have borrowed less because we have more equity and the borrowing from banks incrementally have come at a lower rate. 35:50 35 minutes, 50 seconds So both these effects one is that we have to borrow less. So absolutely the point you're making I completely uh mirror that that uh that 14.2 to jump to 35:59 35 minutes, 59 seconds 16.4 I suppose part of it is because of equity coming in and so just if you can talk about uh you 36:07 36 minutes, 7 seconds know obviously you've given power trends and collections uh data on slide 25 if you look through April right um are you 36:16 36 minutes, 16 seconds continuing to see that kind of trend because just trying to understand one there could be seasonality to u any 36:24 36 minutes, 24 seconds impact that we've seen from the macros or things continue to look uh pretty all right on collections in uh April as well. 36:35 36 minutes, 35 seconds Other on April our run rates of collection are uh not very different from what we have seen in the fourth 36:43 36 minutes, 43 seconds quarter uh period. So we have not seen any worsening uh so to speak. Uh 36:50 36 minutes, 50 seconds normally a lot of uh the last bit selection happens in the last four five days. So we will see that uh play out. 36:57 36 minutes, 57 seconds But we are not uh at least our estimate is that it will not be very uh different from what the fourth quarter uh outcomes 37:03 37 minutes, 3 seconds have been. Uh normally the April uh month for us from a seasonality perspective is seasonal from 37:11 37 minutes, 11 seconds disbbursement uh data. Usually the disments are a little lower and I think uh that will be the case this April also 37:20 37 minutes, 20 seconds although we are working to make sure that the first quarter is a good quarter in terms of disbburments. 37:27 37 minutes, 27 seconds Perfect answer. Last question. Um, when I look at your opex 9 and a half% guiding to 8 and a half and then if I 37:36 37 minutes, 36 seconds look at the threeear number it broadly says 7 7 and a half%. So it's a very 37:42 37 minutes, 42 seconds sharp two two and a half% drop. So just from a capacity perspective uh would you 37:50 37 minutes, 50 seconds like just want to understand you're broadly saying that OPEX will lag AUM growth quite materially right it looks 37:56 37 minutes, 56 seconds more like a 10% delta between AUM and opex growth um so how comfortable are you from that 38:04 38 minutes, 4 seconds perspective on how much you've invested and uh from a capacity building perspective to kind of sustain growth and then deliver at least a 10% delta between AU Sure. 38:17 38 minutes, 17 seconds Uh others this is so uh so I think one of the things that we did over the last two 38:24 38 minutes, 24 seconds years is uh increase the manpower in the mortgage vertical and if I talk about the last financial year in particular 38:32 38 minutes, 32 seconds the overall staffing had gone up by almost 17 to 18%. And if you break it down the collection and mortgage 38:39 38 minutes, 39 seconds capacity building that happened in the mortgage itself, we had increased the manpower in the last financial year to almost 30% uh on the previous days. 38:48 38 minutes, 48 seconds Another large investment that had happened during the last financial year which is now reflected on the improving credit cost is the investment in the 38:55 38 minutes, 55 seconds collections front where the collection scheme almost increased by 70%. Now obviously this was done to handle the uh 39:03 39 minutes, 3 seconds slippages that were happening. But how we look at the next financial year is that we have capacitized the collection team which now would focus on cleaning 39:11 39 minutes, 11 seconds up our NPA and write off portfolio and help us improve the bottom line and from a modage standpoint the rapid 39:19 39 minutes, 19 seconds capacitation that was being done over the last uh two years that would moderate in the next financial year. So at a overall level one we don't expect 39:28 39 minutes, 28 seconds the manpower to grow at a similar level or the overall manpower this should normalize down to almost 10%. And most 39:35 39 minutes, 35 seconds of the 10% growth in manpower that would happen also would happen in the branches at sales uh level or some part of 39:42 39 minutes, 42 seconds collection. So the cost increase on the opex front would be normalized from that uh standpoint. So we expect this 39:50 39 minutes, 50 seconds capacity should help uh normalize the overall opex. So uh we strongly believe that the opex can be brought down to the 8.25 to 8.75%. 40:00 40 minutes And uh if you look at previous year trends also barring the last financial year we we have been continuously bringing down our opics starting 40:08 40 minutes, 8 seconds postcoid. So I think that trend should continue in the coming financial years also. 40:15 40 minutes, 15 seconds Yeah I'm just saying your guidance kind of implies that you can do do with 15 17% opex growth. Is it this year? 40:23 40 minutes, 23 seconds Yeah. About 15% overall opex growth should be able to deliver the 25 to 30% man uh sorry total AUM growth that we are expecting. 40:34 40 minutes, 34 seconds Perfect. Uh thanks. Thanks for answering all the questions. All the best. 40:42 40 minutes, 42 seconds Thank you. The next question is from the line of Charlene from Capital. Please go ahead. 40:50 40 minutes, 50 seconds Uh hi sir, thank you for the opportunity and uh congratulations on a great uh set of numbers. So I had a few questions 40:58 40 minutes, 58 seconds firstly on asset quality. Uh so it seems like our collection efficiency is back to precrisis level with our parx also 41:07 41 minutes, 7 seconds improving uh but it impact on credit cost has been uh much more gradual. So sir just wanted to understand what is 41:14 41 minutes, 14 seconds the re uh reason behind this and uh when do we expect the credit cost to go back to normal. 41:24 41 minutes, 24 seconds Salin uh with respect to the credit cost obviously uh the first focus point of this entire thing is the tightening of 41:31 41 minutes, 31 seconds uh the underwriting. That was the first focus point uh that we were looking at because it is a shorter tener product. 41:37 41 minutes, 37 seconds The tightening of underwriting uh relatively shows up quicker with respect to our overall book. And if you look at almost 80% plus portfolio today is post 41:46 41 minutes, 46 seconds this entire crisis that played out of the overland lending. Uh then the next focus area for us is the nonod uh bucket. Uh where we have seen that 41:55 41 minutes, 55 seconds gradual increase and as the nonod and xdpd bucket have improved collection efficiencies have improved. Uh we have 42:02 42 minutes, 2 seconds somehow been able to tighten the stage 2 portfolio. However, because the early part of this entire crisis played where 42:10 42 minutes, 10 seconds the slippages had happened from all the buckets. So, right now there is a bulge up with respect to the NPA uh portfolio 42:17 42 minutes, 17 seconds NPA pool that we have. So, that is the reason we have not seen a rapid uh decline in the overall credit cost even though the collection efficiencies have 42:26 42 minutes, 26 seconds uh drastically improved over the last 6 months to 9 months uh window. From here on how we look at it is that uh one if 42:34 42 minutes, 34 seconds the collection efficiency stays stable and which we are hopeful that collection efficiency stays stable here over by quarter 2 quarter 3 onwards you can see 42:43 42 minutes, 43 seconds a gradual uh decrease of the credit cost again and by quarter four we should be in the 3 to 3.25% kind of a range in the 42:51 42 minutes, 51 seconds next financial year bringing the overall credit cost of the uh FY27 below 4% uh 42:58 42 minutes, 58 seconds mark. Uh the other big piece is uh the settlement port part of the uh resolution that we will focus on that 43:06 43 minutes, 6 seconds should also aid in reducing the overall credit cost because we have already provided more than 70% in the hypotheication book which is sitting in the uh NPA portfolio. 43:19 43 minutes, 19 seconds Uh also Charlene if I may add uh we have sorry Shalene if I may add we have also increase our provision coverage ratio. 43:29 43 minutes, 29 seconds So unlike uh in the market the trend is to lower it in a difficult year. We've not done that. So that also in a way 43:37 43 minutes, 37 seconds goes into the what we reflect as credit cost. So I think we continue to maintain that and we believe that uh when you're 43:44 43 minutes, 44 seconds looking at a reference point 3.5 to 4% according to us is a good credit cost to work in a in a good year because that is what we'll be targeting for FI27. 43:58 43 minutes, 58 seconds Uh so just a follow up on this so uh uh is it safe to assume that uh the increased PCR on stage two and stage 44:07 44 minutes, 7 seconds three uh will be steady state going forward? 44:11 44 minutes, 11 seconds uh here and I'll ask so to probably give you more detail but uh just let me mention 44:20 44 minutes, 20 seconds that we got our provisional coverage ratio and ACL calculation vetted and audited by Ernst Young uh over and about 44:30 44 minutes, 30 seconds the statuto order that uh does the vetting and this was done just about a few months back last year uh in the last 44:37 44 minutes, 37 seconds financial year essentially because it was a difficult financial year. We wanted to make sure that we were a uh we were adequately uh structured on the 44:46 44 minutes, 46 seconds original coverage. So we are very solid on what we have computed and uh in terms of stability yes we believe that it will remain roughly in this but let so probably give you more color on this. 44:57 44 minutes, 57 seconds Yeah. So the increase in the overall provision coverage for stage one, stage two and I'll keep the stage three aside for now uh is primarily because we also 45:05 45 minutes, 5 seconds have baked in um the relatively uh lower performance during this uh last two years and even though we have already come out of the crisis the portfolio 45:14 45 minutes, 14 seconds looks solid. The collection efficiency are trending uh in positive areas. We have still baked in the impact of the uh 45:22 45 minutes, 22 seconds lower collection efficiencies over the last 12 months to 15 months which has resulted in the overall provisioning uh going up which we feel is a conservative 45:30 45 minutes, 30 seconds approach that we have taken. As we move into the next financial year as the collection efficiency stabilize as this level uh due to the averages it should 45:39 45 minutes, 39 seconds come down for stage one and stage two by quarter 4. However, on the stage three provision coverage ratio, uh we intend 45:46 45 minutes, 46 seconds to keep it above 60% level. Even though there would be a change in mix with mortgage increasing, which should bring down the overall provision level, but we 45:54 45 minutes, 54 seconds intend to keep it above 60% uh in the next financial year also. 46:02 46 minutes, 2 seconds Uh okay. Uh very clear. Uh so secondly on uh our non-interest income uh so it has increased meaningfully in 4Q and uh 46:11 46 minutes, 11 seconds the delta is largely coming from net gain on fair value changes. So just wanted to understand what is the reason 46:18 46 minutes, 18 seconds behind this and uh is this sustainable and uh also what is the uh basically steady state fees income that you are baking in. 46:31 46 minutes, 31 seconds Uh hi this is G. uh now the fair page change that we are seeing is primary driven on two aspects. One is uh uh the 46:39 46 minutes, 39 seconds the income or the uh the change due to the mutual funds. The second [clears throat] is given the 46:46 46 minutes, 46 seconds geopolitical situation there was a there was a cross currency u swap impact that 46:52 46 minutes, 52 seconds has been baked into the P&L. Uh now right now we are actually discussing with our auditors to since this is in 47:00 47 minutes the P&L uh we we intend to move it down to OCI because that's where the real uh line is since this is a uh since this is 47:09 47 minutes, 9 seconds a volatile market and this is a volatile number. So we intend to move it down to the OCI. Uh we could not do it this year because uh all of this was happening in 47:18 47 minutes, 18 seconds the middle of the year and we wanted to do it at at a as a fresh start. uh so we do it uh in in F5 27 at the beginning of 47:28 47 minutes, 28 seconds April. So that's the intent and therefore going forward it will be a stable uh number. trying in this there 47:37 47 minutes, 37 seconds is uh from accounting perspective there while there is a gain in uh movement of forex there's also a corresponding item 47:45 47 minutes, 45 seconds which goes into the uh into our okay 47:52 47 minutes, 52 seconds so I think the net that we will look at is about 10 or 11 crores is the net that uh 47:59 47 minutes, 59 seconds has come into this year we will remove it from our uh P&L uh from next onward so that it does not because these 48:06 48 minutes, 6 seconds fluctuations are not really uh income or expense because these are fully secured hedged uh positions. 48:14 48 minutes, 14 seconds These are not accounting entries that come in don't want to mix it with the business accounting. 48:25 48 minutes, 25 seconds Uh understood sir. And lastly just a clarification. So the cost of decline uh cost of fund decline that you me mentioned of around 30 bips is that from 48:33 48 minutes, 33 seconds 4Q levels or uh from folier FI26 levels. 48:40 48 minutes, 40 seconds So uh you need the the drop in the uh the drop in the cost of borrowing. Yeah. Yeah. 48:48 48 minutes, 48 seconds Yeah. So it is from uh X526 levels. Okay. Okay. Uh very clear sir. 48:55 48 minutes, 55 seconds No hold on sh I'll correct that. Uh our fi uh the quarter 4 uh number is about 10.87. 49:05 49 minutes, 5 seconds From there we will see a 30 basis points drop. 49:11 49 minutes, 11 seconds Okay. Uh understood sir. Thank you. 49:17 49 minutes, 17 seconds Thank you. The next question is from the line of Anarana from A91 partners. Please go ahead. 49:25 49 minutes, 25 seconds Hi. Um I had two questions on the FI27 guidance. Um so uh first of all on PAT would you expect more more 49:34 49 minutes, 34 seconds [clears throat] PAT to sort of acrue in Q3 and Q4 of the year or do you expect it to be more evenly spread out um 49:41 49 minutes, 41 seconds across the four quarters? That was the first question. And secondly on the credit cost guidance um in order to hit 49:48 49 minutes, 48 seconds our credit cost guidance um how where would you expect PARX and PAR 30 to get to by let's say middle of the year like 49:56 49 minutes, 56 seconds would you does does hitting the credit cost guidance require a significant improvement in both PAX and par 30. 50:06 50 minutes, 6 seconds Um hi uh so I think with respect to pick up the first question with respect to profitability typical uh skewess of the 50:13 50 minutes, 13 seconds profits are uh in the first half we deliver 35 to 40% of the profit value and about uh 60 to 65% of the profits 50:23 50 minutes, 23 seconds come in H2 and that's a skewess that has been observed across years primarily because of the uh improvement of 50:31 50 minutes, 31 seconds dispersements uh in the H2 and the same also reflect on the PPOP levels So I think that is what the trend we believe 50:39 50 minutes, 39 seconds uh should play out even in the next financial year. Uh this financial year it was more skewed primarily because of the continuous reduction in the credit 50:46 50 minutes, 46 seconds cost which we feel would not be that sharp in the next financial year. So I think that is how we should look at the profits for the next uh financial year. 50:55 50 minutes, 55 seconds Uh with respect to the parx uh levels uh we during the complete year I think we want to bring down the parx to below 6%. 51:05 51 minutes, 5 seconds So from the current 6.9% or so, we want to be in the 5.5% to about uh 6% or so. 51:11 51 minutes, 11 seconds Uh this drop of almost 100 to 150 bips that uh we will observe during the next 51:18 51 minutes, 18 seconds financial year. 30 bips reduction could come in the H1 and rest of the movement can happen in the H2. uh this also is 51:26 51 minutes, 26 seconds because there is always a denominator effect that plays out and H1 being slower with respect to the dispersement 51:33 51 minutes, 33 seconds compared to H2 that dip also would play out in a similar fashion. 51:40 51 minutes, 40 seconds Thanks um thanks a lot guys. 51:45 51 minutes, 45 seconds Thank you. The next question is from the line of Shraija from I thought financial consulting. Please go ahead. 51:55 51 minutes, 55 seconds Yeah, thanks for the opportunity sir. Uh sir, my question pertains to the mortgage loans. What are the current uh GMPAS in that segment? 52:08 52 minutes, 8 seconds Uh sure. Uh uh thank you for that question. Uh with respect to the mortgage loan, uh the par 90 for the 52:16 52 minutes, 16 seconds mortgage today is about 2.7% uh of the total portfolio. uh this has increased compared to the December uh 52:25 52 minutes, 25 seconds quarter. However, uh the collection efficiency even in mortgage have improved in Q4 which has resulted in the 52:32 52 minutes, 32 seconds overall parx seeing a reduction. So at parx level we are sitting at about 4.1% which is an improvement of 5 to 10 bibs 52:40 52 minutes, 40 seconds compared to the previous quarter. Uh so because we have already seen an improvement at the par x level. So we believe that the par 90 number which is 52:48 52 minutes, 48 seconds currently at 2.73% uh right now should also see a reduction in the next 3 to 4 months. 52:58 52 minutes, 58 seconds Got it. Got it sir. And sir what would be the sustain sustainable levels of GMK you foresee in this mortgage book? 53:08 53 minutes, 8 seconds Uh mortgage book I think uh between 2 to 2.5% is what we would be targeting. uh the mortgage uh par 90 uh levels at a 53:17 53 minutes, 17 seconds credit cost level we would want to keep it uh below 2% level uh but from a target standpoint internally we would want to keep it in the range of 2 to 2.5%. 53:29 53 minutes, 29 seconds Understood. Understood. Sir, just to double click on what you have said, this 2.7% current par 90 that's on a book of around 13 to,400 crores. 53:40 53 minutes, 40 seconds Yeah, it is about 1,600. Yeah, it would be about 15 to,600 crores at this point. 53:47 53 minutes, 47 seconds Thank you, sir. Yeah, that's about it. 53:52 53 minutes, 52 seconds Thank you. The next question is from the line of Ravi Mata from OneUp Financial Services. Please go ahead. 54:00 54 minutes Yeah. Hi. Uh thanks for this call. Uh just wanted to check uh if you can share uh the borrowing maturity profile like 54:09 54 minutes, 9 seconds uh what's due for uh renewals in next quarter 6 months. Any color if you can share. 54:17 54 minutes, 17 seconds Yeah, over the next 12 months uh we are seeing a repayment of close to 2400 crores. Uh now this repayment uh is 54:26 54 minutes, 26 seconds going to be uh these are the expense the slightly more expensive borrowings that we have from the past. Uh so the overall 54:33 54 minutes, 33 seconds repayment that we are seeing in the next year is around 2400 crores. 54:38 54 minutes, 38 seconds Okay. And and if you call it out that these are expensive borrowings what could be average rate like just to get a sense on the an overall average basis 54:47 54 minutes, 47 seconds this is closer to 11% 10.95 to be very precise. All right. All right. 54:54 54 minutes, 54 seconds Okay. Thank you. Thank you so much. 55:00 55 minutes Thank you. Next question is from the line of Viral Sha from Capital. Please go ahead. 55:08 55 minutes, 8 seconds Yeah. Hi. Uh actually I had a question more from uh your three-year vision uh target. uh if you can first of all articulate what is your say the 55:17 55 minutes, 17 seconds sustainable leverage up to which you can operate uh because the ROAS uh that you are guiding for 4 to 4 and a half% uh 55:26 55 minutes, 26 seconds and an ROE of 17 to 20% indicates probably a sustainable leverage of four four and a half times uh approximately 55:34 55 minutes, 34 seconds and second is uh basically uh we are guiding for reaching a 4 to 4 and a half% ROA in next year itself uh at an 55:43 55 minutes, 43 seconds OPEX levels which are at least uh say 100 to probably 125 150 bits higher uh 55:50 55 minutes, 50 seconds versus our three-ear vision. So is there an upside potential there uh in terms of say uh the ROAS for 28 and 29 56:11 56 minutes, 11 seconds management team you are not audible if you're speaking uh okay uh sorry V I would mention that 56:18 56 minutes, 18 seconds we do see a leverage at the range of 4 to 4.5 is a range that we would like to 56:26 56 minutes, 26 seconds operate at and even before raising uh equity and IPO we have actually worked at about 4.5 uh got one up to almost 4.8 56:35 56 minutes, 35 seconds eight in our leverage and I'm talking of total uh borrowings to total uh assets 56:42 56 minutes, 42 seconds to borrowings. So one is that we do want to stay in that range and while today that would have come down because of the 56:49 56 minutes, 49 seconds equity infusion but we'll gradually get there. uh in terms of ROA being in the four and 4.5% range as if guided uh 56:58 56 minutes, 58 seconds you're right that you know this year itself we will reach that target and with the falling operating expense we 57:04 57 minutes, 4 seconds should see an upside uh we believe that we have also factored in into this a slightly lower lowering of interest 57:12 57 minutes, 12 seconds rates in our HL product as well as well as the ML product there's some lowering that is being factored in as a u as a 57:20 57 minutes, 20 seconds conservative uh stance although there is no nothing in the market that shows that our rates are not uh competitive or are 57:30 57 minutes, 30 seconds not sustainable but still that has been factored in in our threeear projection. 57:35 57 minutes, 35 seconds So we do believe that uh with that we will deliver try to deliver in the range of four to four and a half% ROA and with the leverage of four four and a half we 57:43 57 minutes, 43 seconds should be in the high teens in terms of uh our ROE. 57:50 57 minutes, 50 seconds Got it. Thank you so much. 57:55 57 minutes, 55 seconds Thank you. The next question is from the line of Priti Raj Pat from Invest Tech. Please go ahead. 58:03 58 minutes, 3 seconds Yeah. Hi, thanks for the opportunity. 58:05 58 minutes, 5 seconds So, I just had uh one question on the CGTMS uh uh scheme. So, is there any portfolio in the CGT MSSE scheme? And 58:14 58 minutes, 14 seconds also just to understand does this scheme apply for hypothecation of uh the current assets that we lend against. 58:22 58 minutes, 22 seconds Uh so we have roughly around 500 crores which is parked under CGFMU not CGTMS. 58:28 58 minutes, 28 seconds CGTMS particularly I think there's some interest rate uh related capping that's why we don't uh uh put it under CGTMS 58:36 58 minutes, 36 seconds but under CGFMU we have roughly around 500 crores of hypertheication booked right now uh as of I think March 26 58:48 58 minutes, 48 seconds okay thank you and here uh the entire book of hypothetication can be covered with CGMP 58:56 58 minutes, 56 seconds so it is eligible We only have uh done a very small cover uh primarily because uh the economics of 59:06 59 minutes, 6 seconds uh the benefit of uh of recovery versus the payment of uh commission works only when the uh credit cost are much higher. 59:20 59 minutes, 20 seconds Understood. Thank you. Thank you. 59:25 59 minutes, 25 seconds Thank you. Next question is from the line of Sonel from Pessian Capital. Please go ahead. 59:34 59 minutes, 34 seconds I hope I'm audible. Uh I have a small request that for uh the future presentations if you could segregate and 59:41 59 minutes, 41 seconds report the MPA for both the MSM and the mortgage business separately. Um the mortgage business is a little new 59:50 59 minutes, 50 seconds business. Hence uh I I presume the rate cost a little higher. uh would be great uh to see that and then you see your 59:59 59 minutes, 59 seconds internet. That's all for myself. Thank you. Sure. We'll keep that. Sure. Thank you. 1:00:10 1 hour, 10 seconds Thank you. That was the last question for today. I now hand the conference over to Mr. 1:00:17 1 hour, 17 seconds Viral Sha for closing comments. Over to you sir. 1:00:22 1 hour, 22 seconds Uh thank you. Uh thank you Sanjay and the I finance team. Uh Sanjay do you want to make any closing comment? 1:00:30 1 hour, 30 seconds Um yes I just want to thank everyone for their active participation in this 1:00:37 1 hour, 37 seconds earning call and in case there are any further queries. Uh I think you are all of you are welcome to get in touch with 1:00:45 1 hour, 45 seconds the strategic ghost advisor or investor relations advisor or you can get in touch with uh any of us. uh coven 1:00:54 1 hour, 54 seconds and I we can uh take any of the queries and uh give you a response. Thank you so much again. 1:01:04 1 hour, 1 minute, 4 seconds Thank you very much on behalf of Capital that concludes this conference. Thank you all for joining us today and you may 1:01:11 1 hour, 1 minute, 11 seconds now disconnect your