Capital Small Finance Bank Ltd — Q4 FY26

Capital Small Finance Bank Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=TbFq1yTa0UI Published: 2 weeks ago

0:01 1 second Ladies and gentlemen, welcome to the Capital Small Finance Bank Limited Q4 NFY26 earnings conference call. As a 0:10 10 seconds reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions 0:17 17 seconds after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on 0:26 26 seconds your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sarjit 0:34 34 seconds Samra from Capital Small Finance Bank Limited. Thank you and over to you sir. 0:43 43 seconds Thank you Gesh. 0:46 46 seconds Good afternoon everyone. I'm Saraji Sam Shamra managing director and CEO of Capital Small Finance Bank. Welcome to Capital Small Finance Bank Limited's 0:54 54 seconds earnings call for the quarter ended financial year 26. We thank you for joining the call this evening. Joining 1:03 1 minute, 3 seconds me today are Mr. Indonesia and executive director. A Sim Mahajan, chief financial officer. Rado Agarwal, chief credit 1:10 1 minute, 10 seconds officer, branch banking. Sahil Vijay, chief priority officer and in investor relations lead from our investor relations team along with our IR advisor SGA. 1:23 1 minute, 23 seconds I will begin by sharing our perspective on the operating and macroeconomic backdrop after which we will discuss the 1:30 1 minute, 30 seconds bank's performance and outlook in greater detail. 1:34 1 minute, 34 seconds Financial year 26 was a year the Indian economy navigated with quiet resilience. 1:41 1 minute, 41 seconds The global environment remains challenging with the Middle East conflict impacting energy markets elevating commodity pricing and 1:49 1 minute, 49 seconds moderating global growth growth expectations for for emerging economies like India. 1:56 1 minute, 56 seconds These developments have resulted in some volatility in inflation, currency movements and capital flows largely 2:04 2 minutes, 4 seconds linked to fluctuations in crude oil prices and grow global risk sentiment. 2:10 2 minutes, 10 seconds Amid this backdrop, India continues to stand out as one of the fastest growing major economies with GDP growth expected 2:18 2 minutes, 18 seconds in the range of 6.5 to 7%. Rural demand held up. Government capital spending continued. 2:27 2 minutes, 27 seconds The Reserve Bank of India's decision to begin cutting rates after a prolonged pause signaled a shift in the macro 2:35 2 minutes, 35 seconds environment that we believe will benefit borrowers and credit growth in the months ahead. In the banking system, 2:43 2 minutes, 43 seconds credit growth has remained strong at about 16%. While deposit growth has relatively moderate at 13 to 14% leading 2:52 2 minutes, 52 seconds to increased competition for deposits and some pressure on funding cost across the sector. 2:59 2 minutes, 59 seconds We completed our first decade as a small finance bank. The foundations we built give us strong conviction about the road 3:07 3 minutes, 7 seconds ahead. Capital Small Finance Bank remains well positioned supported by its deep presence in semi-urban and rural 3:15 3 minutes, 15 seconds markets a secured and granular loan book and a diversified retail focused deposit franchise. 3:23 3 minutes, 23 seconds Coming to our Q4 20 franchia year 26 performance we witnessed steady momentum 3:30 3 minutes, 30 seconds across key business parameters. Total deposits crossed 10,000 cr growing 20% 3:37 3 minutes, 37 seconds yearon year with KASA broadly stable at 35%. 3:42 3 minutes, 42 seconds Gross advances at 8687 cr registering 21% yearon-year growth led by traction across MSME and agriculture segments. 3:54 3 minutes, 54 seconds Dispersements remained healthy at 919 cr during the quarter. Asset quality 4:01 4 minutes, 1 second remained stable with GNPA at 2.5% and NNP at 1.2%. 4:07 4 minutes, 7 seconds Net interest margin stood at 4.1%. 4:11 4 minutes, 11 seconds While profit after tax for the quarter at 40 cr 10 years as India's first small finance bank, 26 years as a banking institution. 4:22 4 minutes, 22 seconds The opportunities ahead are larger than the one behind us. With that, I would now hand it like to hand it over to Mr. 4:31 4 minutes, 31 seconds Moni Chan who will take you through the detailed financial and operational performance. Thank you. 4:38 4 minutes, 38 seconds Thank you, Mr. Shamra. And a warm welcome to everyone on the call. I will now walk you through the key business 4:45 4 minutes, 45 seconds and financial highlights for the quarter and financial year ending March 2026. 4:52 4 minutes, 52 seconds As of March 31, 2026, our gross advances stood at 8687 KES reflecting sustained 4:59 4 minutes, 59 seconds momentum in credit growth on a year-on-year basis, advances grew by 20.9% while sequentially growth to 6.4%. 5:09 5 minutes, 9 seconds underscoring both consistent execution and healthy demand across our key lending segments. The growth in advance 5:16 5 minutes, 16 seconds continue to be driven predominantly by our secured lending products and around 90% of the loan book continue to be 5:24 5 minutes, 24 seconds secured with around 89% of our non-corporate portfolio is being collateralized by immovable property/bank FDRs. 5:34 5 minutes, 34 seconds The average ticket size for of our portfolio stomped at 18.3 lakhs against 7.8 lakhs and at the end of Q3 FY26 5:43 5 minutes, 43 seconds reflecting over granual retail focused and risk conscious approach. Our continued emphasis on well 5:50 5 minutes, 50 seconds collateralized assets reinforces the quality resilience and the risk mitigated credit portfolio. The growth 5:58 5 minutes, 58 seconds driver for the quarter is MSME/ business segment which grew by 9% on quarteronquarter and 46% on yearon-year 6:07 6 minutes, 7 seconds basis followed by lap which grew by 5% on quarteron quarter and 19% on year-on-year basis. First displacement 6:17 6 minutes, 17 seconds stood at 919 crores during the quarter and 3,58 crores during the year resisting a 6:24 6 minutes, 24 seconds robust growth of 20% and 23% year-on-year basis respectively. 6:30 6 minutes, 30 seconds This sustained momentum underscores the continued strength in the demand across our key lending segments and the 6:37 6 minutes, 37 seconds effectiveness of our focused business approach. Geographically growth outside over home state of Punjab continues to outpace the overall bank growth. 6:47 6 minutes, 47 seconds Advances out of Punjab grew more than twice the Punjab growth rate on year-on-year basis demonstrating the 6:55 6 minutes, 55 seconds deepening strength and increasing traction across our newer operating geographies. out of Punjab advanced 7:02 7 minutes, 2 seconds portfolio constituting 24% as on March 31, 2026 compared to 21% a year back. 7:10 7 minutes, 10 seconds Asset quality improved and remain well managed during the quarter with gross NPA stood at 2.54% 7:18 7 minutes, 18 seconds improving 14 basic points sequentially and four basic points zero year basis. 7:24 7 minutes, 24 seconds Net NPA stood at 1.24% 24% compared to 1.35% a quarterback and 1.30% in the 7:32 7 minutes, 32 seconds corresponding period last year. The gross lipage ratio stood at 1.61% for 7:37 7 minutes, 37 seconds the year and 1.27% for Q4 FY26 and net slipage ratio for the quarter being 0.08%. 7:47 7 minutes, 47 seconds While writeoffs remain almost nil during the quarter. Credit cost for the quarter stood at 0.26% 26% and is consequent to 7:56 7 minutes, 56 seconds enhanced PCI ratio to 51.89% as on March 31, 2026 against 50.45% a quarter and year back. 8:08 8 minutes, 8 seconds Early stress indicator also shown improvement with SMA 1 and SMA 2 accounts at 4.92% 8:16 8 minutes, 16 seconds of the advances against 6.46% 46% a quarterback supported by proactive collections and early diligence 8:24 8 minutes, 24 seconds management. This highlights our prudent credit risk management 8:32 8 minutes, 32 seconds efforts recovery efforts consistent portfolio performance and reaffirming the quality and resilience of over portfolio. 8:40 8 minutes, 40 seconds On the liability side, our total deposit crossed 10,000 cr and stood at 10,08 cr 8:48 8 minutes, 48 seconds registering a strong 20% yearon-year growth, underscoring the continued trust of our customers and the strength of our 8:56 8 minutes, 56 seconds retail deposit franchise. Deposits continue to be the primary source of funding and constituting 94% plus of our 9:04 9 minutes, 4 seconds outside liabilities. Bank continued to have stable HASSA and the same stood at 34.5% as in 31st March 2026. Bank 9:14 9 minutes, 14 seconds continued to focus on granual and retailcentric deposit franchise. Retail deposit share continued to be above 90%. 9:22 9 minutes, 22 seconds Cost of deposit has started showing declining trend and stood at 5.75% in Q4 9:28 9 minutes, 28 seconds FY26 against 5.86% 86% in Q3 FY26 that is a quarterback backed by initial start 9:37 9 minutes, 37 seconds of the deposit repricing the credit to deposit ratio remained healthy with average CD ratio of 82.3% 9:44 9 minutes, 44 seconds and 86.7% being at the end of the year compared to 80.4 and 82.2% 9:52 9 minutes, 52 seconds respectively in Q3 reflecting efficient fund deployment. 9:57 9 minutes, 57 seconds If I turn to the profitability, net interest income for the year grew by 13% on year-on-year basis for the year to 10:05 10 minutes, 5 seconds 463 crores and for the quarter the same grew by 19% to 122 crores in Q4 FY26 and 10:13 10 minutes, 13 seconds non-interest income grew on for the year by 16% to 99 Kors and for the quarters the stood at 26 crores 10:21 10 minutes, 21 seconds P provision operating profit POP for the Q4 FI26 reflecting a strong 28 8% growth 10:28 10 minutes, 28 seconds and stood at 62 crores and same is 223 crores for the FY26 that is a growth rate of 19%. 10:37 10 minutes, 37 seconds Pack for the quarter grew to 40 crores that is up 17% yearon year and for the year same stood at 141 crores name 10:45 10 minutes, 45 seconds showing early signs of improvement and improved to 4.06% in Q4 FY26 versus 4.01 10:52 10 minutes, 52 seconds 01 in Q3 FI26 and the same is attributed to reducing cost of deposit on repricing and maturity name for the years to that 4.04%. 11:03 11 minutes, 3 seconds Operating margin improved to 2.1% in Q4 FY26 versus 1.9% in Q4 FY25 calculated 11:11 11 minutes, 11 seconds as a percentage to average assets supported by minimum expension and operating efficiencies. The cost to income ratio for Q4 improved to 58.2%. 11:21 11 minutes, 21 seconds 2%. Return on assets for Q4 FY26 improved to 1.33% 11:28 11 minutes, 28 seconds against 1.16% of Q3 FY26 and 1.36% in Q4 FY25. The ROA for the financial year 26 stood at 1.23%. 11:40 11 minutes, 40 seconds Our balance sheet remained well capitalized. The capital adequacy ratio stood at 22.3% and LCR average LCR for 11:48 11 minutes, 48 seconds the quarter was a strong 211% providing sufficient leg headroom to support our 11:54 11 minutes, 54 seconds future growth. As of March 2026, over branch network expanded to 211 branches across five states and two union 12:03 12 minutes, 3 seconds territory, strengthening over presence in rural and semi- urban market with 77.3% branches being sur branches which 12:11 12 minutes, 11 seconds remain key driver of our long-term growth. 12:14 12 minutes, 14 seconds As we look ahead, we plan to organically grow our secured loan book at the rate of 22% plus for FY27 and further 12:24 12 minutes, 24 seconds accelerating the growth to achieve an advanced book of over 16,000 cr by FY29. 12:30 12 minutes, 30 seconds We aim to expand over footprints by deepening presence in contiguous states and intensifying penetration within the existing markets with a target of 235 12:39 12 minutes, 39 seconds branches by the end of the current year and making it 300 plus by FY29. 12:45 12 minutes, 45 seconds We expecting NIM expansion supported by continued moderation in deposit cost from repricing and improving C ratio. 12:53 12 minutes, 53 seconds During the current quarter, the benefit of deposit repricing has started showing initial sign and cost of deposit for the quarter has declined to 5.75 against 13:02 13 minutes, 2 seconds 5.86 a quarterback. This reduction reflects the initial impact of the term deposit repricing. We expect the benefit 13:09 13 minutes, 9 seconds of rebringing to acrue more meaningfully over the next 3 to 6 month. 13:14 13 minutes, 14 seconds Statistically 53% of present term deposit is highriced and due for reprising in the next two quarters. 13:21 13 minutes, 21 seconds to achieve ROA expansion in the coming year and with a target to make it 1.35% 13:27 13 minutes, 27 seconds to 1.4% in FY27 and 1.6% plus by FY29 with the ROE expansion of 15% plus by FY29. 13:38 13 minutes, 38 seconds We remain deeply committed to create long-term value for our stakeholders through responsible banking, customer 13:45 13 minutes, 45 seconds centric innovations and sustainable financial inclusion. With this now, now I request the operator to open the floor for Q&A session. Thank you. 13:57 13 minutes, 57 seconds Thank you very much. We'll now begin the question and answer sessions. Anyone who wishes to ask a question may press star 14:05 14 minutes, 5 seconds and one on the touch phone. If you wish to remove yourself from the question queue, you may press star and two. 14:13 14 minutes, 13 seconds Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue ascends. 14:27 14 minutes, 27 seconds The first question is from the line of Son Minas from present capital. Please go ahead. 14:45 14 minutes, 45 seconds You can please go ahead. Hi, this is Sunal. I hope I'm audible. Yeah, you are fully audible. 14:53 14 minutes, 53 seconds Hi Manish. Hi Sam. Thanks for giving me time. I just want to understand uh I look at your gross NPA table and I'm just reading some numbers from there. 15:03 15 minutes, 3 seconds The additions for gross NPA for this particular year was 25.3 and uh the additional provisions we made 15:11 15 minutes, 11 seconds in the P&L are around 22C cr. So uh if I am just uh tying the two numbers 15:19 15 minutes, 19 seconds together uh are we providing more are we providing uh how are we providing basically that's the first question 15:29 15 minutes, 29 seconds I just believe you have referring 25.3 being the Q4 number and the Q4 being 112.8 15:37 15 minutes, 37 seconds No. So I'm just talking uh Q4 to Q4 both uh Q4 may the provisions are 15:45 15 minutes, 45 seconds provision provision in the Q4 if I talk about the provision number for the Q4 are typically that include all the 15:53 15 minutes, 53 seconds provisions including the taxation provisions. So when we are talking about 22 cr provision for the current year this also include the taxation 16:01 16 minutes, 1 second provision. So the provisions for other than taxation are lesser. Yes, we enhanced the provision coverage this 16:08 16 minutes, 8 seconds particular quarter and over PCR which was typically 50.45% a quarter back we has improved it to 16:16 16 minutes, 16 seconds 51.89% presently. So we have increased the provision coverage and working about the net NPA by keeping in sight the 16:24 16 minutes, 24 seconds profit earning. So the increased a little not much that including that. 16:32 16 minutes, 32 seconds Okay. So we summarizing we have increased it a little but not as much as what uh is looking in the numbers because there are some provisions for 16:39 16 minutes, 39 seconds taxation as well. Basically this got it got it. Uh so one more thing between 16:46 16 minutes, 46 seconds last quarter and now uh if I look at the agriculture loans the net NPA are kind 16:53 16 minutes, 53 seconds of sticky while uh the book has grown uh little so uh it was 2.75 17:01 17 minutes, 1 second uh in Q3 FI26 it's 2.76 now uh so what is happening on the ground uh for this 17:10 17 minutes, 10 seconds particular category um any subjective input would be great to know. 17:16 17 minutes, 16 seconds Uh as far as agriculture is concerned during the period under review that is the NPA were almost static that is 2.75 17:25 17 minutes, 25 seconds and 2.76% respectively. So the accretion in the there was some accretion in the NPA during the current period and there was also recovery during the quarter but 17:33 17 minutes, 33 seconds both are paralleling and in line with the historical trends. So nothing unusual everything is uh controlled and 17:41 17 minutes, 41 seconds uh as always it's a completely in line with the overall NPA trend. So we are seeing a traction. If you look into our 17:48 17 minutes, 48 seconds book you will find the net NP has improved in all the segments. In agriculture it is static but in all other segment it has improved. So just 17:56 17 minutes, 56 seconds it is agriculture period. This is not a recovery period because the agriculture recovery period are typically Q1 and Q3 when the cash flow comes. Q4 is not a 18:05 18 minutes, 5 seconds cash flow period. So the majority of the recovery in agriculture will be coming in Q1 and Q3 because those are the cash flow period. This being a non-cash flow period. 18:15 18 minutes, 15 seconds So Munishi just to follow up on this that can we assume that this number will fall down significantly after Q1, Q2, Q3 18:23 18 minutes, 23 seconds back to around 2%. If you're seeing a healthy uh recovery, if you're seeing this segment uh no stress in this 18:30 18 minutes, 30 seconds particular segment, should this significantly taper down because this has been sticky for this particular year. So just want to understand that. 18:38 18 minutes, 38 seconds Uh Sunal as far as the agree NPS are concerned I'm not saying that it is coming down to 2% over the very next 3 18:45 18 minutes, 45 seconds to 6 month. Yes, we believe that it will be remain range count and with remain rangebound on with the lower lower 18:54 18 minutes, 54 seconds biases but just coming to two is very aggressive target which we can take internally but on a public on this 19:01 19 minutes, 1 second particular platform I believe we want to keep it rangebound around the similar towards the lower bias levels over the next period to come. 19:11 19 minutes, 11 seconds So if you observe during the period we have grown very agree has not grown sat significantly during the quarter it has grown 7%. But 19:20 19 minutes, 20 seconds on a year-on-year basis the growth is quite moderate. So with the growth coming back now the growth has started coming back in the segment. So with the 19:27 19 minutes, 27 seconds growth this number will start getting automatically adjusted also and we can see a better number as you move but despite that particular factor the NPA 19:37 19 minutes, 37 seconds in this particular sector as well remain almost similar what was a quarterback got it man thanks for responding I'll 19:45 19 minutes, 45 seconds call back in the queue thank you thank you thank you the next question is from the 19:54 19 minutes, 54 seconds line of adita mudra from my temple capital please go ahead. Hello sir am I audible? 20:02 20 minutes, 2 seconds Yeah you are fully audible Mundra. 20:04 20 minutes, 4 seconds Yes. Uh sir uh congratulations on the good results. Uh sir any uh guidance on 20:12 20 minutes, 12 seconds any effect of transition to UCL that we have on our credit cost? 20:18 20 minutes, 18 seconds Uh what will be that amount? 20:22 20 minutes, 22 seconds Uh circular on has already been come. So we are still evaluating on the present new guidance which has come a couple of 20:29 20 minutes, 29 seconds days back. So initial understanding yes we are still working initial understanding it will not be PLN 20:36 20 minutes, 36 seconds negative. So we will be either PL neutral or PLN positive with this uh EC 20:43 20 minutes, 43 seconds but still we are evaluating the new guidelines in detail. Uh initial review is it will not be a PLN negative for the capital management. 20:53 20 minutes, 53 seconds Okay. uh what I understand is that you sufficiently provided even if uh uh the new ECL's guideline come after that also 21:01 21 minutes, 1 second we sufficiently provided yes that's what I included okay including in sta stage two uh I think 21:09 21 minutes, 9 seconds where the minimum requirement is about 5% moving that's what I'm saying analy as far as the initial understanding uh the whole 21:17 21 minutes, 17 seconds of the PCL requirement we is will not be P and negative if I compare the requirement provision versus the present 21:25 21 minutes, 25 seconds provision hel negative position but still we are detailing the detail discussions so we 21:32 21 minutes, 32 seconds expecting it to be PLA neutral to P&L positive biased okay uh and sir uh this quarter uh from 21:40 21 minutes, 40 seconds even if I remove the impact of the labor code it was there in last quarter uh about six rows uh even then ourex was 21:50 21 minutes, 50 seconds yeah uh sorry uh So even even then our cortex was seems to have declined quite significantly quarter on quarter. So is 21:59 21 minutes, 59 seconds there any particular reason for that uh or it's just 22:07 22 minutes, 7 seconds if we look into our opex cost the opex first if I exclude uh the labor code it is almost 89 cr versus 86 crores. 22:17 22 minutes, 17 seconds So the impact is only just 3 cr. So which is not a significant there. So this is basically because of there can 22:24 22 minutes, 24 seconds be a lot of factors the some expenses which are not in temporary expenses for a particular period. So those are may be incurred in that particular quarter. So 22:33 22 minutes, 33 seconds otherwise there is not a significant decline. It is almost the same number as we have in the Q3. So because of expenses provisioning and everything 22:40 22 minutes, 40 seconds depends upon whether a lot of factors which are being considered for that particular point. 22:46 22 minutes, 46 seconds So so there's nothing which is oneoff or there's nothing which is unusual. It it's it's in the normal part of the course. 22:53 22 minutes, 53 seconds It's just an business as usual. 22:56 22 minutes, 56 seconds Okay. So sir, what should be our uh like opex to average assets? So what what should be a steady set percentage that 23:03 23 minutes, 3 seconds we should account for? uh let's say for F57 if you can write or on a cost to income basis if you can write uh what would be 23:11 23 minutes, 11 seconds a target as a percentage of the average asset uh over this list is over the medium-term 23:19 23 minutes, 19 seconds to take it below 2.85 85 yes in the year 1 that is the current fiscal fi 27 we 23:26 23 minutes, 26 seconds intend to keep it between 2.9 to 2.95 or 2.9 to3 that is a broader range I can give 23:33 23 minutes, 33 seconds with the lower witness with a lower wiseness yes yes and uh and then that would be on the 23:41 23 minutes, 41 seconds growth of like a a guided growth of about 20% plus on the as on the e 23:48 23 minutes, 48 seconds yes we are targeting current we and guidance of 22% cost for the FY27 with the 2029 being 16,000 cr on the advanc 23:59 23 minutes, 59 seconds one final question from my side and then contacting the qu this agree growth has come very well on the quarterly basis 24:06 24 minutes, 6 seconds and there was some uh like the last couple of years there was some uh slowdown on the agree part uh so any any 24:15 24 minutes, 15 seconds what are the reason that we are seeing on ground uh and how much of this growth can continue and translate to annual growth also. 24:22 24 minutes, 22 seconds Uh as we discussed earlier also agriculture one product which we were conscious earlier year because of certain ground level events which were 24:30 24 minutes, 30 seconds solved in the last year mid last year begin. So we were expecting a growth and the growth for the current quarter start coming. So agree is one portfolio which 24:38 24 minutes, 38 seconds we intend to continue to grow but the growth in agree will be lesser than the overall growth and never the over growth leader will be continue to be MSME 24:46 24 minutes, 46 seconds that's the business segment and the lap they will be our growth leader in the coming F527 also but F agree will be 24:54 24 minutes, 54 seconds growing but lesser than the growth overall growth but we are continue to put our focus on agree as we move forward 25:03 25 minutes, 3 seconds because of that sorry because we are not intending to do agree in the newer states like Rajasthan, 25:10 25 minutes, 10 seconds Delhi, Himachel and UP. So agree will continue to be coming from Punjab and Hana only. So that's the factor we 25:18 25 minutes, 18 seconds always say agree. We don't intend to grow as fast as the overall book. So agree will be growing at the decent pace uh from these two states. 25:28 25 minutes, 28 seconds And then if I can just squeeze in one more uh this you had decided on a cold end lending uh that you will be considering growing on the other states 25:37 25 minutes, 37 seconds non-punjab states through cold lending model. So how much has that started coming in in this from this quarter and how much of the book has come in and 25:45 25 minutes, 45 seconds what is our arrangement with the co lenders in terms of the SLD cover uh or or any other business model that you could give some clarity on? 25:53 25 minutes, 53 seconds Anj let me clarify we are not in a co- lending but we are in a business correspondent lending model in which the business correspondent is originating 26:01 26 minutes, 1 second for us we are not doing a co-ending activity in this particular thing the credit cost the credit risk is going to be with the originator so his revenue 26:10 26 minutes, 10 seconds will be tagged with the asset quality and along with the revenue tagging to the asset quality his uh we will be 26:16 26 minutes, 16 seconds taking an LDG uh for the default risk that if there is any credit default comed we will be getting a cash 26:23 26 minutes, 23 seconds collection AL FDG with us for that particular loan portfolio which will be building this quarter the activity has 26:31 26 minutes, 31 seconds been started last quarter we signed off but this quarter the production movement has come and initially the develop 26:38 26 minutes, 38 seconds initial the business start coming in I will not say very very large value because in the first quarter after activation you can't expect a large 26:45 26 minutes, 45 seconds value but I'm happy to share now we are not having one but more than one partner we having a couple of partners in this particular space the traction is coming 26:53 26 minutes, 53 seconds back and we can see some good momentum in the period to come. Again I reiterating we intend to have more than 27:01 27 minutes, 1 second 90 to 95% of the dispersement through over branch network only. So this is a reation even in the last call we doing 27:08 27 minutes, 8 seconds it. So yes this is an add-on uh to our growth but our bigger growth driver will continue to be our branch banking. 27:16 27 minutes, 16 seconds Okay and sir how much is the FLG cover that they are providing? 27:20 27 minutes, 20 seconds So FLG cover is governed by the regulatory guidance and that is 5%. 27:25 27 minutes, 25 seconds 5%. Okay. Thank you sir. Thank you. I'll follow. Thank you. 27:34 27 minutes, 34 seconds Thank you. The next question is from the line of Pritesh Pam from Tan Capital Advisers. Please go ahead. 27:43 27 minutes, 43 seconds Hi sir. Uh good evening. Uh sir just few questions. One is on fe income uh the 27:51 27 minutes, 51 seconds fee income has been relatively weaker then you see fee income are a little better for the 27:57 27 minutes, 57 seconds industry and for us as well. So why has it been weaker this time around apart from the treasury income? Uh but then uh and how do you look at it going ahead? 28:10 28 minutes, 10 seconds Uh fee income if you look into for the current quarter on a value term it is 25.8 8 cr versus 26.1 crores say a 28:17 28 minutes, 17 seconds quarterback and if we look into the sub components the income from the advance has grown by 3 crores from 6.7 crores to 28:25 28 minutes, 25 seconds 9.7 remain static on the operation related fee income and there is slightly reduction on the bank commission so but 28:32 28 minutes, 32 seconds there is some reduction we are seeing in the treasury income because of the opportunity available so fee income if we look into the asset percentage to the 28:40 28 minutes, 40 seconds asset continue to be 0.9% in both the quarters So it was 1% in Q4 last year. 28:47 28 minutes, 47 seconds So because of the certain uh factors. So yes we continue to believe this number to be re remain towards 0.85 to 0.95 in 28:57 28 minutes, 57 seconds the coming period. So with the upward biasness so we are quite optimistic but here important point I like to manage mention pretty you look into the all the 29:05 29 minutes, 5 seconds fe income components they are statistic state and with a multi- dimensional channel. So uh so we are optimistic we 29:13 29 minutes, 13 seconds are confident to maintain and improve it. So overall currently a fourear basis also this is 0.9% and the same was 0.9 29:20 29 minutes, 20 seconds in the last year and now earlier we were showing a momentum growth and we expect that some momentum will be coming in the current period. 29:29 29 minutes, 29 seconds Sure. Um uh second question was on margin. We've seen a little bit of improvement this quarter. 29:37 29 minutes, 37 seconds uh earlier before the recruit cycle I think fully kicked in we had a view that uh we will improve our margins as the 29:44 29 minutes, 44 seconds LDR improves so we are today at about 83% LDR on an average basis I think uh so how is our margin correlation going 29:53 29 minutes, 53 seconds to be given that the rate cycle at least has passed down uh there are the two variables in this 30:01 30 minutes, 1 second one over uh cost of deposit has started the first sign of improvement in Q4 4 which has improved from 5.86% in Q3 to 30:10 30 minutes, 10 seconds 5.75% in Q4. Now statistically if you look over present term deposit book consisting of around 53% of the term 30:19 30 minutes, 19 seconds deposit which are priced more than the present offer rate which are due to be repricing in Q1 and Q2 of the current 30:26 30 minutes, 26 seconds year that is the June quarter and the September quarter. So we are seeing some benefit which will be pouring up from 30:34 30 minutes, 34 seconds that repricing on their maturity on their repricing on their maturity. So that is the one benefit we can see to to be building up the NIM. So we are 30:42 30 minutes, 42 seconds expecting the NIM benefit coming from that one repricing and second we are 82.3% average CD ratio. So we expect to 30:50 30 minutes, 50 seconds intend to improve the CD ratio in the next year. Last year we increased it very slightly. So next in the coming year we intended to improve with more 30:58 30 minutes, 58 seconds for sharpling and last year we continue to improve our deposit franchise also along with the decline interested trend was there. So we believe there will be 31:07 31 minutes, 7 seconds some improvement we expecting some improvement in the CD ratio in the coming year current year. So that is the second lever which will be over NIM 31:15 31 minutes, 15 seconds expansion available. So in NIM we can see two expension level one being the repricing of the deposit with 53% of the 31:22 31 minutes, 22 seconds term deposit getting repriced in Q1 and Q2 second will be the LD expansion so with this particular thing with 4.06 06 31:30 31 minutes, 30 seconds being the NIM for the Q4. So we can expect better NIM in Q2 and Q1. Q not I will not mention Q1 just we will see 31:39 31 minutes, 39 seconds slight improvement in Q1 and more meaningful improvement in Q2 as we move. 31:43 31 minutes, 43 seconds So this is a driver for the NIM. The second big driver which is available is typically that which we that rotansion 31:51 31 minutes, 51 seconds will be with the NIM and also the OPEX opex for the current year continue to be 61.2% on a year basis. So which we 31:59 31 minutes, 59 seconds believe in the cost income basis we will see some good traction and we believe that cost with the asset ratio it will 32:05 32 minutes, 5 seconds remain in the range of 2.9 to 23. So which will be another traction for the current fiscal and before it start 32:13 32 minutes, 13 seconds pulling further down will apply 29. So these two levers could put together so we are anticipating a rot expansion for 32:20 32 minutes, 20 seconds FY27 and we are targeting the full year rot of 1.35% to 1.4% 4% for FY27 and 1.6% plus for FY 29. 32:32 32 minutes, 32 seconds Sure. And uh last question will be on the EO advances from some other we had 32:40 32 minutes, 40 seconds seen a very steady E at about 11 11.1 and uh now it has suddenly dropped to about 10.8. One can understand there was 32:49 32 minutes, 49 seconds a record in December but the records were earlier as well. So anything uh happened or have you passed on any 32:56 32 minutes, 56 seconds weights uh in terms of additionally uh or or is it like a business exchange 33:02 33 minutes, 2 seconds which is like this uh decline in and there is nothing to worry about in this case. If you look into read it with 33:10 33 minutes, 10 seconds the slide number eight of the presentation where we can see the interest rate versus Q4 versus Q3 there 33:17 33 minutes, 17 seconds was a 25 basic points rate cut coming in this particular quarter which has slightly impacted the yield on advances that is a point number one but there 33:25 33 minutes, 25 seconds which may be affected the zone advances by 10 to 12 basic points. So another 8 to 10 basic point impact is due to because this is the period in which the 33:33 33 minutes, 33 seconds agree accounts become NPA. So there is some agree accounts when become NPA their interest get reversed. So which take care of the old interest earning to 33:42 33 minutes, 42 seconds be reversed. So which impacted the interest yield temporarily for that particular quarter by 8 to 7 to eight basic points. So that is another impact 33:50 33 minutes, 50 seconds is there. So with these two impacts are there but out of this around 10 basic point is impermanent in nature but 10 is not. So we can see there was a 25 basic 33:59 33 minutes, 59 seconds points need cut for the current quarter which are being due in the month of January. So with this particular aspect if you look into over any of the product 34:08 34 minutes, 8 seconds agriculture over rate last quarter rate it is 12.62 now it is 12.54 over housing loan last quarter it was 9.83 now it is 34:16 34 minutes, 16 seconds 9.85 over last quarter rate it was 12.56 now it is 12.33 over business segment last quarter the rate was 10.6 now it is 34:25 34 minutes, 25 seconds 10.55 over corporate loan last quarter the rate was 10.8 Okay, now it is 10.77. 34:31 34 minutes, 31 seconds So the rate are uh in a slight phase. So which is uh going to be available with us as you move forward as well. 34:40 34 minutes, 40 seconds Got it. And last data giving question was on uh uh can you give the absolute savings number this quarter uh absolute uh amount? 34:52 34 minutes, 52 seconds Saving amount I I missed what you said. 34:55 34 minutes, 55 seconds I mean uh within the kasa I wanted the savings uh shares saving share. Okay. Saving deposit 35:02 35 minutes, 2 seconds share. So I just give me a second. I just give me a second. 35:15 35 minutes, 15 seconds Uh the saving value is 3182 K which is constituting 31.76%. 35:23 35 minutes, 23 seconds Sure. Thank you so much. very helpful. Thanks. Thank you. 35:32 35 minutes, 32 seconds Thank you. The next question is from the line of Sri Paloshi from Icorus. Please go ahead. 35:40 35 minutes, 40 seconds Hi sir. Uh thank you for giving me the opportunity. So my question was pertaining to to our agriculture 35:46 35 minutes, 46 seconds portfolio. Uh so given the kind of uh you know geopolitical situation that we are seeing and the impact of the same 35:54 35 minutes, 54 seconds and also you know this year we expecting that the rain there there could be delayed rains uh and also weaker 36:02 36 minutes, 2 seconds monsoon. Uh so given this and also the input cost because of the geopolitical tension has gone up. So how do you see 36:09 36 minutes, 9 seconds our agree portfolio to behave? While I understand that you know our our agriculture customers are relatively 36:16 36 minutes, 16 seconds superior versus the other guys whereas you know our ticket sales are relatively higher but even from the behavior point 36:24 36 minutes, 24 seconds of view and then how we are looking to uh you know manage that portfolio overall. 36:30 36 minutes, 30 seconds uh shify if you look into the present agriculture portfolio for just uh reaffirming recarifying we are in a five 36:38 36 minutes, 38 seconds lakhs to 25 lakh ticket segment that is we are not below in below five lakh that is small and market farmer landing so 36:45 36 minutes, 45 seconds which is politically sensitive segment so that political sensitivity segment is not there with us which has any potential of the problems 36:54 36 minutes, 54 seconds with the potential political uh announcements point number one point number two we are typically lender to 37:02 37 minutes, 2 seconds that particular agriculture set who are cultivating idly two MSP crops but minimum one MSP crop so majority of the 37:10 37 minutes, 10 seconds agriculture guys are having the two MSP crop with one cash crop in between so with that structure of the agriculture 37:17 37 minutes, 17 seconds cropping so even if I talking about the early signs of the wheat so wheat procurement seems to be decent and the 37:24 37 minutes, 24 seconds wheat is coming uh uh well in control and point number two if I talk about so there are the two crops now wheat wheat 37:32 37 minutes, 32 seconds procurement is already on if I get an early sign it's a two early sign but early signs are decent that we are seeing a good wheat procurement and good 37:41 37 minutes, 41 seconds cash is started pouring into the accounts so that is the one clear indicator that the H1 which is wheat period seems to be decent so there is no 37:49 37 minutes, 49 seconds challenge now as far as the second point is concerned when we talk about the monsoon related cropping so Punjab the 37:57 37 minutes, 57 seconds good thing which happened over the Punjab have over last sometimes is reaching off of the canal water even up to the last mile. 38:05 38 minutes, 5 seconds So there is a good uh thing which has happened and last year we have a very good monsoon there is a good water reserves available. So with these two 38:14 38 minutes, 14 seconds factor and also good ground level irrigation facilities available. So I believe uh it will be too early and too 38:22 38 minutes, 22 seconds premature for me to comment how the monsoon will look like. But keeping in view these three scenarios that is the 38:30 38 minutes, 30 seconds last year water storage which we have seen there is was some good high rainfall in Punjab and the water storage 38:37 38 minutes, 37 seconds area at the optimal levels. So which is a one big factor. Second is the reaching of the canal water to the last mile. So 38:45 38 minutes, 45 seconds that has been a big change which has happened over the last one to one two years. And third ground level irrigation facilities. So with these things so we 38:54 38 minutes, 54 seconds are not that worried. So I at this point of time just we see what will happen and we have a lot of levers available that 39:02 39 minutes, 2 seconds is a multi-level accounts available with that customer collateral like more than 200% if the wheat is there and there 39:10 39 minutes, 10 seconds being a patty there is a lot of alternate cropping patterns available for the farmers so all these things are additionally available so which is not 39:18 39 minutes, 18 seconds making me worried at this point of time keeping in view our present customer profile and the present situation and I am again reiterating we are doing 39:25 39 minutes, 25 seconds agriculture in Punjab and Hana only. We are not doing agriculture in Rajasthan, UP, Jammu, Himachel. So, so over 39:35 39 minutes, 35 seconds suspectability, over the challenges get reduced to that extent. 39:43 39 minutes, 43 seconds Got it sir. Got it. That is helpful. So, we are confident that it should not impact our customer profile broadly. 39:53 39 minutes, 53 seconds The second question was on the other income side. Uh so while we have been talking about uh the initiative that 39:59 39 minutes, 59 seconds we've taken and also we you highlighted where we want to be in terms of the percentage of global asset. uh but uh I 40:07 40 minutes, 7 seconds mean if you could give us you know from the the deconstruction of that 1 point uh the the target that we have on the 40:14 40 minutes, 14 seconds other income side like what would contribute how much uh if you could provide that sort of a clarity that would be really helpful. 40:24 40 minutes, 24 seconds So typically as far as the other income is concerned other income which is presently 0.9% on the asset basis. So we 40:31 40 minutes, 31 seconds intend to make it between 0.85 85 to 0.95 also current year. So current year the gosh sheet which we taken for the rotation 40:39 40 minutes, 39 seconds the number we have derived is 0.85 to 0.95 range so with the upward biasness so this will be continue to be supported 40:47 40 minutes, 47 seconds by the four pillars. So yes, I believe there will be some better traction. We can see from advanced rated fee income which has improved during the Q4 or yes 40:55 40 minutes, 55 seconds we can see from the the versus Q4 there has seems to be not an improvement because last time Q3 income was lesser and there was some allocation first the 41:04 41 minutes, 4 seconds child distribution was there but all other income if you look into the operation free income if you compare with the Q4 it was 4.8 cr now it is 5.8 41:13 41 minutes, 13 seconds sheet last year banka was 9.3 it is 9.5 just there is some moderation in the treasury earning because of the market conditions so all the line items all the 41:22 41 minutes, 22 seconds streams are in the right phase so going forward we expect that over the distribution will continue to be 41:29 41 minutes, 29 seconds typically around 33% towards banka and 66% towards non-banka which will be there around 35 to 40 towards advanced 41:38 41 minutes, 38 seconds and remaining towards the operations related so which we are well factored in which we are well uh ready and uh we are 41:45 41 minutes, 45 seconds completely aligned to improve the not interest income not I will not say very significant improvement yes there will be a improvement marginal improvement we 41:54 41 minutes, 54 seconds want to take it from to this level to 0.95% level uh in the current fiscal and then taking it to the next level in the 42:01 42 minutes, 1 second period to come that was helpful thank you sir say good luck for the next quarter 42:08 42 minutes, 8 seconds thank you shaji thank Thank you. The next question comes from the line of Saga Sha from Spark PWM. Please go ahead. 42:19 42 minutes, 19 seconds Yeah. Uh good evening sir and uh first of all congratulations for a very good set of numbers actually. Uh my first 42:27 42 minutes, 27 seconds question sir was uh related to net interest income in spite of uh clocking very good sequential uh loan assets growth of around 4%. 42:38 42 minutes, 38 seconds uh but uh still actually in our net interest income has been hardly been 2% uh on the upside. So first of all I 42:46 42 minutes, 46 seconds wanted to know that are there were there any interest reversals actually that led to such weak uh NI growth actually uh 42:54 42 minutes, 54 seconds and I'll follow up with the second question after this sir. 42:59 42 minutes, 59 seconds So this in the current period it is being a period in which the agriculture accounts were due for the NPA. So there was some accounts of the agriculture 43:07 43 minutes, 7 seconds which is marked for the NPA which brings along with it interest reversals. So there are slight interest reversals of one or two crores which is the factor 43:16 43 minutes, 16 seconds which is bringing it toward. But if we look into the net interest income for the net interest income perspective uh 43:23 43 minutes, 23 seconds during the current quarter it is 122 cr rupes uh which was last 43:32 43 minutes, 32 seconds year corresponding quart is 103 cr rupes and if I look at the december quarter just open a december quarter now 43:42 43 minutes, 42 seconds 190 it is 119 cr rupes so there is an improvement of around 3 cr rupes in this there was some interest reversion So but overall the growth of the net interest 43:50 43 minutes, 50 seconds income for the current quarter is 19% and the topline growth of 20%. So if I talk about the NI growth for the Q4 it 43:58 43 minutes, 58 seconds is 19% and the topline growth of around 20%. So with this with both are very nearer to each other now. 44:06 44 minutes, 6 seconds So there is not a wide spread between these two numbers if we talk as of late. 44:11 44 minutes, 11 seconds Yes. uh the Y numbers seem to be very good actually it's so clocking uh very uh decent growth uh but the QQ numbers 44:21 44 minutes, 21 seconds as you said due to the agree portfolio there were interest there were interest reversals and VMC even in the net NP 44:28 44 minutes, 28 seconds uptake of around 2.76% that led to the interest reversals uh is my reading correct sir 44:35 44 minutes, 35 seconds yes that there is that factor will be always there okay okay fine and My second and the 44:43 44 minutes, 43 seconds last question sir was uh related to our exposure to uh NDFC MFI uh in this 44:51 44 minutes, 51 seconds quarter as well uh we saw our the net NP inching up to 17.3% actually so and our 44:59 44 minutes, 59 seconds total portfolio is also very small at around 39 crores but any color on the same that are we seeing any some green 45:08 45 minutes, 8 seconds shoots there to as we are seeing uh MFI cycle to reverse it. Uh you seeing some of the dispers some of the 45:17 45 minutes, 17 seconds uh companies dispersements numbers. So uh any improvements uh in that portfolio are we seeing uh especially in asset quality espec and also loan growth. 45:28 45 minutes, 28 seconds If we talk about the MFI NBC MI segment we are not very bullish on the NBFC MFA segment. We are awaiting we are wait 45:36 45 minutes, 36 seconds watching the market MFI market and when we get the comfort then accordingly we will evaluate to jump again in the NBFC MFI segment but for the current quarter 45:44 45 minutes, 44 seconds we have not lended any fresh money to the NBFC MFI segment we just recovered what we have already lended and if I talk about the value the value basis 45:53 45 minutes, 53 seconds this particular value the outstanding net NPA now is 5.49 crores and the same value quarter back was 6.08 08 crores. 46:01 46 minutes, 1 second So we typically in the current quarter we recovered around 60 to 70 lakh rupees from those empty accounts. So if I talk about the position as onion date keeping 46:09 46 minutes, 9 seconds in view the present discussions with those lenders. So we are uh well confident that the whatever is required to be provided has already been provided 46:18 46 minutes, 18 seconds and the remaining net NPS is amount of recovery we have already signed up the OTS with one of the lender and the money 46:25 46 minutes, 25 seconds for the current quarter has recovering purely as per OTS. So I strongly believe the pain which was there in this NBSC 46:34 46 minutes, 34 seconds MFI segment is which has come in Q1 is fully provided for in the current year and we are not carrying any baggage in 46:43 46 minutes, 43 seconds the next year. So whatever is pending left which we optically just 17.3 looks very high but if we drive the value out 46:51 46 minutes, 51 seconds of it it is 5.49 crores which is lesser than nets. So which is lesser than uh the value which is there. 47:00 47 minutes Okay. 47:02 47 minutes, 2 seconds Okay. Fine sir. Fine. Thank you so much and all the best. 47:09 47 minutes, 9 seconds Thank you. The next question is from the line of s from Safire Capital. Please go ahead. 47:18 47 minutes, 18 seconds Good evening. Can you hear me? Uh uh please come again. Can you hear me? 47:25 47 minutes, 25 seconds Yeah. Now you're fully audible please. 47:27 47 minutes, 27 seconds Yes sir. Just if you can you know uh I'm sorry if you have uh mentioned this earlier but if you could just help me with the credit cost uh guidance for 47:35 47 minutes, 35 seconds this year and our cost to income has you know uh improved well in this quarter 4. 47:40 47 minutes, 40 seconds So will it be rangebound in the coming quarters and if so what will be the leaders? 47:46 47 minutes, 46 seconds So if I talk about the credit cost credit for the current fiscal that is FI26 was 0.26 and credit cost for the 47:53 47 minutes, 53 seconds current quarter was also 0.26. process and for the RA factors for the same in the current year we seen some uh out of 48:00 48 minutes turn NPS slippage in NBFC MFI and we provided materially amount for that particular uh portfolio which we expect 48:09 48 minutes, 9 seconds the loss so that's the reason currently the credit cost been 0.26 and in the current quarter we opted to increase the 48:16 48 minutes, 16 seconds PCR the PCR which was 50.45 we improved it to 51.89 89 uh at the end of this quarter which was 50.45 at the end of 48:25 48 minutes, 25 seconds the last quarter. So that is the factor that is so the current quarter cost uh credit cost is a provisioning facing not 48:32 48 minutes, 32 seconds a loss. So that is what we have done and if I talk about the credit cost going forward we always intend to maintain in 48:39 48 minutes, 39 seconds the range of 0.15 to 0.25 and we are quite confident to maintain in this particular range just within negative 48:47 48 minutes, 47 seconds bias for the next year. So but our rangebound will be 0.15 to 0.25 for FI27. Uh if I talk about the situation 48:56 48 minutes, 56 seconds sitting in today yes we are looking with a lot of geopolitical environmental changes which is happening as on that if I look I am confident to maintain in the 49:05 49 minutes, 5 seconds range of 0.15 to 0.25% for FY27 and our stated objective is also very clear we 49:11 49 minutes, 11 seconds want to keep our credit cost on the downward to 0.3 up to FYI 29. So that is 49:19 49 minutes, 19 seconds what we are strongly believe and we will uh we are confident to take it that way. 49:28 49 minutes, 28 seconds Answer on the cost to income. Yes. Yes please. 49:31 49 minutes, 31 seconds It's about the cost to income. Cost to income if I ratio if we compare both from the cost income perspective this 49:38 49 minutes, 38 seconds number was typically 58.9 or I say 59% and for the year it is 61%. So we expect this cost to income ratio if we 49:46 49 minutes, 46 seconds calculate from the CI ratio or compare it with the asset basis. So we believe in the coming period coming FY 27 with 49:55 49 minutes, 55 seconds this number shall remain in the range of 2.9 to 3% if we calculate as a percentage to the average assets. So that is the guidance which will be we 50:04 50 minutes, 4 seconds intending to improve cost income ratio with from the fullear basis. What is the number for FY26 versus what we expecting 50:10 50 minutes, 10 seconds for FY27 given we have done all the costing or the middle management costing or the senior management head office 50:18 50 minutes, 18 seconds costing has already been done. Now for the any new branch expansion no that cost is required for the current fiscal that is FI27 only the parry that is the 50:27 50 minutes, 27 seconds last mile cost at the branch is being required. So which is giving us a confidence that we can look forward for some cost optimization slight cost of 50:35 50 minutes, 35 seconds optimization in FI27 and very larger cost optimization as we move forward the with the scale increase uh just uh 50:43 50 minutes, 43 seconds pretext basis if you look into our vision statement we are targeting 1.5x in the branch and 2x in the deposit 50:51 50 minutes, 51 seconds advanced route so we that indicated itself clearly that we looking forward for the cost optimization so we can see a better cost optimization coming in the 50:59 50 minutes, 59 seconds medium term basis. But if I talk about FY27, you will see this in the range of 2.9 to 3%. For the current fiscal calculated as a percentage of the average assets. 51:11 51 minutes, 11 seconds Okay. Got it sir. Thank you so much. All the best. Yeah. Thank you. Thank you. 51:18 51 minutes, 18 seconds Thank you. The next question comes from the line of Ashwini Agarwal from Dent Advisor LLP. Please go ahead. 51:27 51 minutes, 27 seconds Uh good evening sir. a good set of numbers. Um so a couple of questions one 51:34 51 minutes, 34 seconds is uh you know uh one of the one of the participants had asked a question about uh the winter patterns and so on so 51:43 51 minutes, 43 seconds forth. U could you take us through sort of your experience in previous drought 51:48 51 minutes, 48 seconds cycles in 2015 16 or maybe 11 12. Uh how did your portfolio you know behave 51:56 51 minutes, 56 seconds during this period? Is there any historical anecdote you could share with us? 52:02 52 minutes, 2 seconds Ash G rather than just for a tro cycle if we have a very recent uh development 52:09 52 minutes, 9 seconds that was there last by 26 we've seen a high flooding like condition in all of Punjab 52:18 52 minutes, 18 seconds so we seen that condition in lot of portion of the Punjab so that is just very recent around 9 month back or 8 month so we look into that particular 52:27 52 minutes, 27 seconds aspect and then look into the SMA number of capital bank and look into the net NP and the gross NP and the write of 52:34 52 minutes, 34 seconds numbers. So which is giving us a very very clear signal that what we are doing. Point number two when we're talking about the droughtless situation 52:42 52 minutes, 42 seconds even if you go back to the history and look back into the all historical data points we are lander in the agriculture since year 2000. So we have a track of 52:50 52 minutes, 50 seconds 26 years. If we look go back to the rot last rot which is 2014 15 or 15 16 or other 145 there if we go back to I'm not 53:00 53 minutes having a handy number so I can't comment upon that number at this with that authority but uh to the recall since I was handling that time also for some 53:08 53 minutes, 8 seconds portion of this particular portfolio. So I am to the to my recall that there was 53:15 53 minutes, 15 seconds no sudden suffer in that year also but the biggest testimony is even if I talk about the high flooding period also. So 53:23 53 minutes, 23 seconds last year and over broading operating model over operating model is typically diversified income and assessing the income based in the agriculture as a 53:33 53 minutes, 33 seconds business in which and we lending to the farmer who is a progressive and cultivating ideally three crops in a 53:40 53 minutes, 40 seconds year. So resulting in if there is a some damage on one of the crop for some maybe 20% 30% damage. So there is no loss 53:49 53 minutes, 49 seconds which is parting onto the banker. Point two, we are with a LTV downward of 50% in whole of agri portfolio. 53:58 53 minutes, 58 seconds Three, we are in a full-fledged banking with that gentleman that is whole of products his his and his family banking 54:05 54 minutes, 5 seconds are with us. So with the relationship banking approach point number four. So all these pillars, all these hoops are a 54:13 54 minutes, 13 seconds enabler hook and we are a agreeer for now 26 years. seen all the cycles maybe environmental maybe a political maybe a 54:22 54 minutes, 22 seconds geopolitical or maybe even animity actions. So all those actions all the 54:28 54 minutes, 28 seconds scenarios we have seen. So in and we have not written off anything from the agriculture portfolio over last 26 years. The number of NPA which you are 54:38 54 minutes, 38 seconds seeing is accumulative and that value is what we are not able to recover even if we had not wiped right off it is fully 54:45 54 minutes, 45 seconds with recovery effort only. So with this thing we are giving us a confidence that with the operating model which is a time 54:52 54 minutes, 52 seconds tested we are confident. So whatever we are hearing about the matte but uh one important point we are a Punjab and 55:00 55 minutes Hiana lander and look quickly look into Punjab and Hiana one good thing which has happened is reaching off of the canal water even up to the last mile 55:10 55 minutes, 10 seconds reaching off the canal water to the last mile is one of the big milestone and we are if we took statistically Punjab and 55:17 55 minutes, 17 seconds Hana where the ground level consumption is very meticulous and rather ground level store tableable is not showing a depletion over last one or to one or two 55:26 55 minutes, 26 seconds years. So with that cate and there is a huge irrigation based opportunity infrastructure available for the ground 55:33 55 minutes, 33 seconds level at the last also. So ground level irrigation is also available in Punjab and in all the farms right. 55:41 55 minutes, 41 seconds So with that so that particular challenge is not fully 55:47 55 minutes, 47 seconds looking that problematic for us in the coming period. But yes we are keeping our eyes there open and that's the 55:56 55 minutes, 56 seconds reason we always very conscious in the growth in all the segments wherever we see any uh bad 56:04 56 minutes, 4 seconds time there may be some scenario maybe some challenges may be coming we are always in a conscious growth aggre we 56:10 56 minutes, 10 seconds are a consciously aggressive banker okay and the second question is that in 56:16 56 minutes, 16 seconds the new states like UP HP Jamu um Rajasthan joke said you know you won't 56:23 56 minutes, 23 seconds do agriculture so what what kind of loan composition do you expect in these markets okay live paper talk about Rajasthan 56:32 56 minutes, 32 seconds Rajasthan is a huge MSME and mortgage market so we will be doing MSME and mortgage 56:39 56 minutes, 39 seconds Jammu is a huge MSME market uh rupee is a good MSME and mortgage 56:46 56 minutes, 46 seconds market so there is a huge opportunity available in these two products clients. 56:52 56 minutes, 52 seconds So we having a multi-product organization rather than a mon monoline product we are a multi-line product organization. So the opportunity 57:00 57 minutes available in those states are phenomenally high in the products which we are mentioning. Punjab Hana have a very good agree. Yes, UP may we consider 57:10 57 minutes, 10 seconds at some part of the UP for agree depending upon our comping over process of uh the growth is comping and carpeting. We comp that is we understand 57:19 57 minutes, 19 seconds that geography well by being present there in one or two branches com it then we carpet it. So that is the way after 57:26 57 minutes, 26 seconds our learning with the combing activity then we will expand it further. Okay. Thank you sir. All the best. 57:34 57 minutes, 34 seconds Thank you Ash. 57:38 57 minutes, 38 seconds Thank you. The next question is from the line of Harper from Robo Capital. Please go ahead. 57:46 57 minutes, 46 seconds Hello. Am I audible? Yeah, Hashid, you are fully audible. Yes sir. Thank you for the opportunity. 57:53 57 minutes, 53 seconds So I just wanted to understand like what kind of RO and ROE profile are we looking for in FI27 and also going 58:00 58 minutes forward when our book reaches 16,000 crores in FI 29. 58:05 58 minutes, 5 seconds Uh we targeting ROA of 1.35 to 1.4 in FI27 and we are targeting ROA of 1.6% 58:13 58 minutes, 13 seconds plus in FI29. If I talk about the ROE we are targeting 15% plus ROE by FI29. So 58:20 58 minutes, 20 seconds we are looking forward the margin expansion both in FI27 and significant expansion by FI29. 58:29 58 minutes, 29 seconds Underscored. Thank you. Thank you. Yeah. Thank you Ash. 58:35 58 minutes, 35 seconds Thank you. The next question is from the line of Rishi Modi from RDM Advisory L. Please go ahead. 58:44 58 minutes, 44 seconds Yeah. Hi sir. Am I audible? Yeah you are fully audible G. 58:49 58 minutes, 49 seconds Yes. Uh so sir I just wanted to understand on the operations front um a few longer term questions right so uh 58:58 58 minutes, 58 seconds now that you expand beyond Punjab uh how does the new branch evolution look like 59:05 59 minutes, 5 seconds say year one what are the costs uh what that you have to invest in what is the cost to assets that a new branch 59:13 59 minutes, 13 seconds possesses and then if you have to compare it with a new branch which you add in say your core Punjab market as 59:21 59 minutes, 21 seconds well as a mature branch in your Punjab market. How much time does it take for a non-core as in say a Rajasthan branch to 59:29 59 minutes, 29 seconds reach your Punjab branch levels? If you could give me that and then I have another question I'll move to that. If 59:38 59 minutes, 38 seconds we come statistically statistically over if I talk about my Punjab branches Punjab branches we typically categorize 59:46 59 minutes, 46 seconds over branches into four buckets that is the ultra new branch uh new branch midterm branch and the long-term branches. If I talk about the business 59:54 59 minutes, 54 seconds per branch in my Punjab state which is the long-term branches that is old branches that we can say five year plus 1:00:00 1 hour branches Punjab we have a lot of uh very older branches. So if I talk about the average of put together all of them over 1:00:09 1 hour, 9 seconds business per branch in above 5 year segment is typically 106 crores. 1:00:14 1 hour, 14 seconds But similarly if I go ahead with a similar thing over out of Punjab branches the business per branch of five years this is around 73 cr rupes. 1:00:24 1 hour, 24 seconds So I'm talking about average not a single branch. So the business per branch if I look into the business per branch from both the sides and despite 1:00:32 1 hour, 32 seconds the fact in Punjab more than five means we have a 15 to 20 year old branches also but out of five out of Punjab more than five is technically five to seven 1:00:40 1 hour, 40 seconds years only. So with that thing insight we believe the traction which we are getting in Punjab versus out of Punjab is very nearer to each other. And 1:00:49 1 hour, 49 seconds similarly if we look into the OP opex or yes with that sensitized market the 1:00:56 1 hour, 56 seconds business will be slightly higher larger in the sensitized market. So BA being Punjab is not just over sensitized 1:01:04 1 hour, 1 minute, 4 seconds market. Hana is also entering into our sensitized market. With Hana which is also being in sanentralized market becoming we internally call we want to 1:01:10 1 hour, 1 minute, 10 seconds make hana our next pun. So that is our internal wording which we typically use. 1:01:15 1 hour, 1 minute, 15 seconds So with that statistical outlook we believe the growth business per branch number is quite basic and we are talking about the larger businesses of these 1:01:24 1 hour, 1 minute, 24 seconds particular branches and if I talk about the operating uh costing and operating efficiency yes in year one or year two Punjab branches will be more efficient. 1:01:34 1 hour, 1 minute, 34 seconds uh it is a I need not so this is a open secret I can say up to the year three Punjab branches will be contributing 1:01:42 1 hour, 1 minute, 42 seconds more but if I talk about our long-term aspiration of the growth so out of Punjab branches are also started growing significantly the number I shared 72 cr 1:01:50 1 hour, 1 minute, 50 seconds business per branch more than five year out of Punjab so we are quite confident of reaching there so we are that's the reason we are maintaining a very very 1:01:58 1 hour, 1 minute, 58 seconds fine balance that is 50% branch we are opening out of Punjab and around 40 to 45% branches in Punjab so that we can 1:02:06 1 hour, 2 minutes, 6 seconds reap the benefit of the PNL and reap the benefit of the group business expenses. 1:02:11 1 hour, 2 minutes, 11 seconds So that's the way the business strategy is being aligned. 1:02:15 1 hour, 2 minutes, 15 seconds Understood. Um second I wanted to understand your uh underwriting capabilities outside of Punjab. Um so 1:02:24 1 hour, 2 minutes, 24 seconds from what I understand you are opting the NBFC route currently uh to build the book outside of Punjab. Um so how what 1:02:34 1 hour, 2 minutes, 34 seconds sort of data or what sort of insight are you able to generate given this is an indirect way of lending versus say when 1:02:42 1 hour, 2 minutes, 42 seconds you lend directly in Punjab and is there a significant gap or it will take a longer period. 1:02:51 1 hour, 2 minutes, 51 seconds uh Rishi G I think there seems to be some uh gap in the actual what we are doing on Punjab as well as out of Punjab 1:02:58 1 hour, 2 minutes, 58 seconds over business acquisition is through the branch channel the what I think you you are talking about is the partnership channel which is we just started in the 1:03:07 1 hour, 3 minutes, 7 seconds last quarter or last to last quarter and which is not a large but the number which I'm talking does not include those number which I call those number as part 1:03:14 1 hour, 3 minutes, 14 seconds of our alternate channel so as part of the branch channel in Punjab as well out of Punjab our Business acquisition 1:03:21 1 hour, 3 minutes, 21 seconds strategy is the identical that is a branchled business acquisition in which we believe we need to know our customer 1:03:28 1 hour, 3 minutes, 28 seconds well before we underwrite for them and that is being sourced and serviced by our own on role relationship managers 1:03:36 1 hour, 3 minutes, 36 seconds and the underwriting capabilities are identical in Punjab and out of Punjab. 1:03:41 1 hour, 3 minutes, 41 seconds We follow the tier three model that is the branch cluster office, regional office and head office and we are 1:03:48 1 hour, 3 minutes, 48 seconds branches of the sourcing agent which is being governed by one PD officer which we call CCH who are whose line of 1:03:56 1 hour, 3 minutes, 56 seconds control is four to six branches and then the underwriting gentleman who is typically taking care of the uh 16 to 18 1:04:05 1 hour, 4 minutes, 5 seconds branches who's a credit underwriter and we have one commonality in both PJ and Hana or all part of area wherever we are 1:04:13 1 hour, 4 minutes, 13 seconds we follow the MIG customer segment only and we are following the formal income 1:04:20 1 hour, 4 minutes, 20 seconds income channel and also property which is a prime property based landing so we have a complete similarity and we have 1:04:27 1 hour, 4 minutes, 27 seconds the complete information available we are we have the formal income document we have the complete tid available we have the complete scrub available and we 1:04:36 1 hour, 4 minutes, 36 seconds look forward for the primary lending relationship with that gentleman If he has a relationship with couple of NBFCs, 1:04:43 1 hour, 4 minutes, 43 seconds we we aspire to BT in all or if we are not doing it, we consider it part of the choir. So we assessment 1:04:52 1 hour, 4 minutes, 52 seconds is completely done on a similar model what we are doing in Punjab and out of Punjab. I think you are mentioning about very small portion which we are doing a 1:05:01 1 hour, 5 minutes, 1 second partnership channel in which credit risk is not ours but that is a very different business and very small value business which we are doing differently and with 1:05:10 1 hour, 5 minutes, 10 seconds the different uh ambition and a different outlook with a high yielding products. 1:05:14 1 hour, 5 minutes, 14 seconds Got it sir. So uh if I have to understand say your Punjab lending today, how much of the credit uh 1:05:22 1 hour, 5 minutes, 22 seconds decision making would be databased versus say relationship based and uh for 1:05:29 1 hour, 5 minutes, 29 seconds you to replicate that outside of Punjab the relationship lending will be a time factor. So just trying to understand uh 1:05:37 1 hour, 5 minutes, 37 seconds firstly the reliance on relationship based lending versus databased uh credit decision making in Punjab and to 1:05:45 1 hour, 5 minutes, 45 seconds replicate the same where uh would you say you are in non-Punjab state. 1:05:52 1 hour, 5 minutes, 52 seconds Uh I believe if I talk today our majority of the lending is a information based that is a database and it is being 1:05:59 1 hour, 5 minutes, 59 seconds supplemented by the PD which is my relationship. We are following the similar model out of Punjab that is also a datadriven as I said with all the data 1:06:08 1 hour, 6 minutes, 8 seconds with the income data and the property data and the need data and supported by the PD which is again the CCS and CCH 1:06:16 1 hour, 6 minutes, 16 seconds which we are doing Punjab versus out of Punjab. Yes, if Punjab my one CC can handle my seven branches in out of Punjab my one CC is able to handle four 1:06:24 1 hour, 6 minutes, 24 seconds branches. That's the only difference point. But the more important thing is in both the states our underwriting system our underwriting process is 1:06:32 1 hour, 6 minutes, 32 seconds identical and the data flow which we are using we are consuming all the APIs. If you mention the API whether we are 1:06:40 1 hour, 6 minutes, 40 seconds talking about udyam API whether we talk about all the API we're consuming all the APIs. If we talk about the relationship based decision we do the PD 1:06:48 1 hour, 6 minutes, 48 seconds we do the PD or we go to the staff of one of my own team member two different team member visit to the client and the 1:06:56 1 hour, 6 minutes, 56 seconds neighboring author geographies and understanding that business surely for any proposal which is more than 10 lakh or 12 lakh rupees and even from five 1:07:04 1 hour, 7 minutes, 4 seconds lakhs to 10 lakh 1%. So that is the unsaid rule which we are following in the whole of the system. So we are following the similar underwriting 1:07:12 1 hour, 7 minutes, 12 seconds capabilities and uh the thing which will be gives you comforting is presently we have a 24% of the landing out of Punjab 1:07:19 1 hour, 7 minutes, 19 seconds and 76 in Punjab over out of Punjab book has a lesser MP and lesser SMMAs as compared to the Punjab book and 1:07:28 1 hour, 7 minutes, 28 seconds significantly lesser uh X of Agri as well like if I compare X agree Punjab versus X agree 1:07:36 1 hour, 7 minutes, 36 seconds you're not doing agree outside Punjab so you all are at over SMA1, SMA 2. Yes. 1:07:43 1 hour, 7 minutes, 43 seconds Significantly lower. Significantly lower. 1:07:47 1 hour, 7 minutes, 47 seconds Okay. Got it. So, thank you. Please answer my questions for the time being. Thank you for your time. Thank you, Rishi. 1:07:56 1 hour, 7 minutes, 56 seconds Thank you. The next question is from the line of Chennmai Neymar from Preston Capital. Please go ahead. 1:08:04 1 hour, 8 minutes, 4 seconds Oh, hi sir. Hope I'm audible. Yes. May you are fully audible, please. 1:08:09 1 hour, 8 minutes, 9 seconds Uh so two questions from my side. Uh if you could uh just give uh or share uh what is cost to income ratio look like 1:08:18 1 hour, 8 minutes, 18 seconds uh on the fully scaled up branches. the long-term branches that you spoke of which are like five plus years uh if you 1:08:26 1 hour, 8 minutes, 26 seconds could give what does that look like and the second question is over a medium-term what what what is the 1:08:34 1 hour, 8 minutes, 34 seconds strategy for kasa as in is there enough headroom to grow uh within the state of Punjab uh at uh the three odd% interest 1:08:43 1 hour, 8 minutes, 43 seconds rate which can fund growth in uh rest of the states or would you eventually move out uh and also expand deposit base in rest of the states. 1:08:55 1 hour, 8 minutes, 55 seconds Jim, I will take the second question first and just a clarification. Uh we are getting a decent deposit Punjab 1:09:01 1 hour, 9 minutes, 1 second versus out of Punjab that is Hana also and the cases share in Hana is identical to what we are getting in Punjab. So the 1:09:10 1 hour, 9 minutes, 10 seconds deposit we are able to get both in Punjab and House of Punjab. Hana is now almost a fully sanitized market. So we 1:09:18 1 hour, 9 minutes, 18 seconds believe Hiana is the big growth driver over the periods to come. So the centralization part in Hiana majority of 1:09:26 1 hour, 9 minutes, 26 seconds the Hiana has already been done and we are now start moving we have already moved towards the unbanked rural branches also in Hiana. So we have reached to that place where we have 1:09:34 1 hour, 9 minutes, 34 seconds start opening the unbanked rural branches in Hiana also in addition to the semi-urban and the rural branches. 1:09:39 1 hour, 9 minutes, 39 seconds So the deposit and the casta if I talk about the percentage kasa which we are getting in in hana is identical to what 1:09:46 1 hour, 9 minutes, 46 seconds we are getting in Punjab. So that is the one statement I like to make. Second statement if I talk about the branches branches instead of giving you the 1:09:55 1 hour, 9 minutes, 55 seconds answer basically is the opex because opex calculating will be subject to a lot of ppms but if I talk about our operating profit ratios if I talk about 1:10:04 1 hour, 10 minutes, 4 seconds our peop which is typically 2.1% on the entity level if I talk about the pop levels at the above five year branches 1:10:12 1 hour, 10 minutes, 12 seconds which is above five years the same number remain presently say is in the range of 2.75 to 3.25 25 1:10:21 1 hour, 10 minutes, 21 seconds so over more than five branches the peop number will be 2.75 to 3.25 25 getting the opex of this is a very complex 1:10:28 1 hour, 10 minutes, 28 seconds environment so I can derive the peop from those branches so which is much larger which is typically 35% more than 1:10:37 1 hour, 10 minutes, 37 seconds what my total peop so that is what is the present number I will look like so they are contributing in a significant 1:10:43 1 hour, 10 minutes, 43 seconds way to over operating profit uh given the TPMS are also being used so so we 1:10:51 1 hour, 10 minutes, 51 seconds are as a steady state branches as we are moving towards the steady state branches is the POP is getting in maturely improving. So that is the point number 1:10:58 1 hour, 10 minutes, 58 seconds two I like to mention chain mail. So even if you look into the current year we improve over pre-operating profit 1:11:05 1 hour, 11 minutes, 5 seconds that is uh operating profit by 28% in the current quarter despite the fact 10 1:11:12 1 hour, 11 minutes, 12 seconds has grown by 20%. Point number two our peop margin has also improved. So both the things are giving a thing. Yes. uh 1:11:21 1 hour, 11 minutes, 21 seconds in the some part of the current year given the interest rate uh change which was a uh difficult period for the 1:11:29 1 hour, 11 minutes, 29 seconds industry as a whole. So those time the margin was bit uh uh squeezed but now I believe that thing is coming out of it. 1:11:40 1 hour, 11 minutes, 40 seconds Uh got that uh answers my question. Thank you. Yeah thank you chi. 1:11:48 1 hour, 11 minutes, 48 seconds Thank you. The next question is from the line of Vber Jen an investor. Please go ahead. Hello. Am I audible? 1:11:56 1 hour, 11 minutes, 56 seconds Yeah. Yeah, you are fully audible Mr. Gber. 1:11:59 1 hour, 11 minutes, 59 seconds Yeah. So, I had some question regarding the other income piece particularly the banker piece. Uh I just wanted to know 1:12:07 1 hour, 12 minutes, 7 seconds what is our uh model for that business and what is our vision because I think uh you know we can probably scale up 1:12:15 1 hour, 12 minutes, 15 seconds that business. So just wanted to know what are your thoughts. Just that is a scalable business. 1:12:20 1 hour, 12 minutes, 20 seconds Presently the model is typically selling to the customer who are our customer. 1:12:25 1 hour, 12 minutes, 25 seconds Our objective is to be the holistic service provider and providing him the complete range of the product which my customer wants. So we are presently 1:12:32 1 hour, 12 minutes, 32 seconds selling as a banker partner or our various manufacturer which I call it the various service provider. It may be the we include we work with the love driving 1:12:41 1 hour, 12 minutes, 41 seconds journalist companies. We work with the healthcare journalis as well as the health products for the life insurance businesses for the three in one accounts 1:12:49 1 hour, 12 minutes, 49 seconds and for the MTSS business. So these are the four lines of businesses which we are presently catering that is the life journal health three in one and the four 1:12:59 1 hour, 12 minutes, 59 seconds five line of business MTSS going forward we want to keep on expanding this uh this particular uh size this particular 1:13:07 1 hour, 13 minutes, 7 seconds cake size we're including more and more products as we ventured into because we believe the we have reached to a place where we have a decent set of customers 1:13:15 1 hour, 13 minutes, 15 seconds and we can take care of the other all emerging financial needs through adding into the banka businesses banka here doesn't mean the banka insurance I mean 1:13:24 1 hour, 13 minutes, 24 seconds to say bankana banka means when we can sell the third party products to our customers but the third party financial products so that is what our vision are 1:13:32 1 hour, 13 minutes, 32 seconds our vision is that we intend that all the financial products of our customer shall be sold by us to him that is our 1:13:41 1 hour, 13 minutes, 41 seconds med medium to long-term vision that we should be the complete product provider for our customer so that is the vision how we are taking in this particular 1:13:48 1 hour, 13 minutes, 48 seconds regard so presently banka which is typically contributing around 9 and a half cr of the operating profit operating income which consisting of all 1:13:57 1 hour, 13 minutes, 57 seconds GI health MTSS and 3 in1 and going forward we intend to add few of more products in each of the year as you move forward. 1:14:08 1 hour, 14 minutes, 8 seconds Okay. Uh so this is starting from next year you're going to add new products or uh how how will that work? 1:14:15 1 hour, 14 minutes, 15 seconds Uh we intend to add one more product in FY27. So I will not be able to name the product. So I have not got the 1:14:22 1 hour, 14 minutes, 22 seconds approvals. So yes, we intend to add one more product in FY 27 and one more product in coming year. 1:14:28 1 hour, 14 minutes, 28 seconds Got it sir. And as a percentage of average assets where do you see this business say in uh the next two years 1:14:37 1 hour, 14 minutes, 37 seconds there is a good upside opportunity available. If I talk about my other peer bankers if I from the peer banker I mean 1:14:44 1 hour, 14 minutes, 44 seconds my midsize private sectors universal bank. this number gross net of uh uh the 1:14:51 1 hour, 14 minutes, 51 seconds 81 business if I talk about the trade finance business typically in the range of 1.05 05 to 1.15 we are today 0.9 we believe the 1:15:01 1 hour, 15 minutes, 1 second arbitrage between 0.9 and 1.15 is what we need to bridge so yes gradually we intend to bridge that particular gap 1:15:09 1 hour, 15 minutes, 9 seconds between what we are and where the my peers in the similar set of customers are there so that is our wish list to 1:15:16 1 hour, 15 minutes, 16 seconds move towards that direction rather than giving any specific number for this in the current year so this is what the opportunity is there if we look into my 1:15:24 1 hour, 15 minutes, 24 seconds banking landscape Sure, sure. Thank you. Thank you for answering my question. That's all. 1:15:30 1 hour, 15 minutes, 30 seconds Yeah. Thank you, Neville. 1:15:34 1 hour, 15 minutes, 34 seconds Thank you. That was the last question for the day. I now hand the conference over to management for closing comments. 1:15:42 1 hour, 15 minutes, 42 seconds Yeah. Uh I would like to thank everyone for being part of this call. Uh we hope we have answered your questions. If you 1:15:49 1 hour, 15 minutes, 49 seconds need more information, please feel free to contact our investor relations team or strategic growth advisor or investor 1:15:57 1 hour, 15 minutes, 57 seconds relation advisor. Thank you. Have a good day. 1:16:03 1 hour, 16 minutes, 3 seconds On behalf of Capital Small Finance Bank Limited, that concludes this conference. 1:16:07 1 hour, 16 minutes, 7 seconds Thank you for joining us and you may now disconnect your lines.