DCB Bank Limited — Q3 FY26

DCB Bank Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=y6oxWBcEtFM Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the DCB Bank Q3 FI26 earnings conference call. As a reminder, all 0:10 10 seconds participant lines will be in the listenon only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:18 18 seconds you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. From management, 0:25 25 seconds we have with us today Mr. Pravin Kati managing director and CEO Mr. Shridar Shishadri wholetime director Mr. Ravi Kumar chief financial officer Mr. 0:36 36 seconds Rajitkumar Mr. Rajitkumar Singh chief investor relations officer I now hand the conference over to Mr. Pravin Koti 0:44 44 seconds MD and CEO DCB bank thank you and over to you Mr. 0:49 49 seconds Thank you. Good evening, ladies and gentlemen. Uh, welcome to DC Bank's quarter 3 earnings call. 0:57 57 seconds Uh, at the outset, I would like to run you through the headline numbers. 1:01 1 minute, 1 second The customer advances have grown YI by 18.46%. 1:07 1 minute, 7 seconds Customer deposits have grown YI by 19.54%. 1:12 1 minute, 12 seconds And profit after tax has grown YI by 22%. 1:17 1 minute, 17 seconds despite a one-time impact of 26.87 crores. We'll come to that in a minute. 1:25 1 minute, 25 seconds Consistency, predictability, and repeatability. Uh I keep saying this every meeting uh every every interaction with with all of you and as well as the 1:33 1 minute, 33 seconds management team. Uh this continues to be a key cornerstone of our business strategy and you've been seeing the results of this uh over many quarters. 1:42 1 minute, 42 seconds Now I'd like to give you some finer details and texture on both the top line and bottom line numbers. 1:50 1 minute, 50 seconds NIM continues its uh upward momentum clocking 3.27% for the quarter thanks to reduced cost of deposit which now stands 2:00 2 minutes at 6.86%. That's a 10 basis point drop in the quarter. 2:06 2 minutes, 6 seconds It's pertinent to note that the net interest income as a percentage of total asset 2:13 2 minutes, 13 seconds for Q3 this year is higher than the net interest income for Q3 of last year. And Q3 of last year, remember, was prior to the rate cut cycle. 2:26 2 minutes, 26 seconds The fee growth continues to be encouraging. And what's more, the core fee income at 182 crores led by third 2:34 2 minutes, 34 seconds party distribution, trade finance and processing fees is looking robust. 2:42 2 minutes, 42 seconds On the cost front, we have taken an impact of 26.87 crores on account of the new labor code. 2:50 2 minutes, 50 seconds Despite this, our cost to income is at 16 61.84. 2:56 2 minutes, 56 seconds This is lower than Q3 of last year. and cost to average assets is the same as of Q3 of last year. 3:05 3 minutes, 5 seconds I want to clarify that the quarterly incremental impact of the wage bill would be marginal. 3:16 3 minutes, 16 seconds Also, what is pertinent uh to note is that we have grown 18.5% in advances and 19.5% in deposits with less number of 3:23 3 minutes, 23 seconds employees than we had in Q3 of last year. 3:27 3 minutes, 27 seconds We had 11,339 people same time last year we have 10,981 people now 3:37 3 minutes, 37 seconds our focus on organic sourcing visa v DSA source business vendor renegotiation 3:47 3 minutes, 47 seconds impact of digitization and improved use of AI is helping us re in the 3:56 3 minutes, 56 seconds The jaws are widening with income growing at 16% and expenses including the one time growing at 15%. 4:06 4 minutes, 6 seconds This has resulted in the operating profit growth of 19% YI on the portfolio quality. 4:17 4 minutes, 17 seconds Our credit costs are benign at 37%. 4:22 4 minutes, 22 seconds much below the minimum stated goal of 045%. 4:27 4 minutes, 27 seconds What is truly heartening uh for us is that our slippage ratio for the quarter at 3.08%. 4:36 4 minutes, 36 seconds Is the lowest we had in 18 quarters. 4:40 4 minutes, 40 seconds Our GMPPA at 2.72 is the lowest we had again strangely in 18 quarters. And our 4:47 4 minutes, 47 seconds net NPA at 1.1% is the lowest we had in the last 11 quarters. 4:57 4 minutes, 57 seconds The net outcome is that we have posted our highest ever quarterly profit of 184.74 crores with an ROA 5:06 5 minutes, 6 seconds of 0.91 and an ROE of 12.73%. 5:15 5 minutes, 15 seconds Let me talk something hypothetical. 5:19 5 minutes, 19 seconds It's interesting to point out that without the one-off regulatory expense impact, our PAT would have been 205 crores. ROA 5:27 5 minutes, 27 seconds would have been 1.01% and ROE 14.10%. 5:34 5 minutes, 34 seconds As far as the future goes, we continue to be remain confident about our guidance of 18 18 to 20% growth year on 5:40 5 minutes, 40 seconds year and the 13.5% ROE in 2627 5:46 5 minutes, 46 seconds and 14.5% ROE for 2728 that remains unchanged. 5:54 5 minutes, 54 seconds Now, uh I'd leave the quest the the floor open for questions or clarifications. 5:59 5 minutes, 59 seconds U operator, thank you very If you can unmute everybody in the call please. 6:05 6 minutes, 5 seconds Thank you very much sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star 6:13 6 minutes, 13 seconds and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 6:22 6 minutes, 22 seconds handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 6:32 6 minutes, 32 seconds The first question is from the line of Akit Agraal from Smith's Institutional Research. Please go ahead. 6:40 6 minutes, 40 seconds Good evening sir. Thanks for the opportunity. 6:43 6 minutes, 43 seconds Hi sir and congrats on a very good set of numbers. Uh apologies if I missed part of initial remarks as there was another result call at the same time. So 6:51 6 minutes, 51 seconds my first question is on uh free income momentum which was very strong at 15% Q. 6:57 6 minutes, 57 seconds So if you can provide some insights uh what's driving this is it all course and do we think we can sustain this level of momentum? 7:07 7 minutes, 7 seconds Um mostly the core the core fee income has come from a very decent third party distribution fee income which we got uh 7:16 7 minutes, 16 seconds the asset growth has been good. So the processing fee by definition looks looks 7:22 7 minutes, 22 seconds very good. uh traditionally Q4 is a is a good quarter for both third party distribution and also for loan growth. 7:33 7 minutes, 33 seconds So in the short term I see that coming through. Uh what we are uh what we are 7:40 7 minutes, 40 seconds seeing on a on a go forward basis uh I think uh a fee of 1% 7:48 7 minutes, 48 seconds uh of the average assets is something which uh we should be we should be getting through. Currently let me tell 7:56 7 minutes, 56 seconds you we are at 1.1%. But on a go forward basis uh one seems very very achievable in a consistent basis. 8:06 8 minutes, 6 seconds Very well sir. Uh my next question is on margins. So how much of name expansion was related to tax refund? Was it two 8:13 8 minutes, 13 seconds bits and how should we think about the expansion from here in terms of uh residual deposit repricing continued 8:20 8 minutes, 20 seconds benefit from HL to BL transition as well as hybrid fixed mortgage length moving to floating and is incremental flow for 8:29 8 minutes, 29 seconds BL to HL still 60 to 40 or has it improved further? 8:35 8 minutes, 35 seconds Um okay let's go one by one on this uh BL continues to be uh a large share even 8:44 8 minutes, 44 seconds more than 60% of the incremental sourcing okay uh and I think that's a good call that we took it is helping us 8:51 8 minutes, 51 seconds uh both in terms of uh uh income interest income as well as in terms of uh bounce rate as well as uh the uh NPS 9:02 9 minutes, 2 seconds number two there are mixed the activity is happening on the on the margin front. 9:08 9 minutes, 8 seconds The full impact of CRR is not boxed in yet. Uh that's a that's a positive for 9:15 9 minutes, 15 seconds for for Q4. Uh what is not so very positive is that the full impact of the 25 basis point repo cut has also not 9:24 9 minutes, 24 seconds been boxed in for uh and that you'll see the full impact coming in in the in the coming quarters. uh 9:32 9 minutes, 32 seconds you've seen the 10 10 bits reduction in cost of deposit. Uh you would also seen our borrowings come down dramatically 9:41 9 minutes, 41 seconds and I want to pay attention uh I want you to pay attention to both both these items because we have a long long 9:48 9 minutes, 48 seconds duration term deposit. Our belief is that until Q2 there is clear visibility of uh 9:57 9 minutes, 57 seconds reduction through repricing. So the challenge we have is uh if we continue to renew 10:05 10 minutes, 5 seconds uh dep term deposits the way we do then we'll see the benefit of it coming in all the way to t to to to quarter two of 10:13 10 minutes, 13 seconds next year probably even quarter 3. Uh so that's one one element. The second element is we had a borrowing total 10:22 10 minutes, 22 seconds borrowing of 8,400 odd crores. Uh now it is about 4,700. 10:29 10 minutes, 29 seconds uh it is it it is just repricing with uh you know our ability to get lower cost 10:35 10 minutes, 35 seconds of deposit uh uh by giving away borrowing which is more expensive is 10:43 10 minutes, 43 seconds coming into play very quickly and that's also one of the reasons why if you see the balance sheet is growing only 14%. 10:48 10 minutes, 48 seconds Whereas uh clearly we are growing our key areas of customer deposits and loans and advances at a much much higher pace. 10:55 10 minutes, 55 seconds Uh so so in in in short we see this this movement of NIM uh the upward 11:05 11 minutes, 5 seconds movement of NIM should continue definitely till Q1 Q2 unless some 11:11 11 minutes, 11 seconds reporate action uh is is is done by by RBI in the coming in in the near future. 11:21 11 minutes, 21 seconds Right. Uh so uh on the that follow up on that the tax defense part was it two bits this quarter and the hybrid fixed mortgage lag moving to floating how do 11:30 11 minutes, 30 seconds we see about that for all these I mean it exactly is follows that the pattern has been following for the last 11:37 11 minutes, 37 seconds n number of uh you know right over the last two years uh we haven't changed that so in every every month we see uh 11:47 11 minutes, 47 seconds some bit of repricing happening on the on the fixed to floating conversion but 11:53 11 minutes, 53 seconds that's very marginal very very marginal which comes in right sir and the tax refund this 12:01 12 minutes, 1 second quarter is it two bits for impact this quarter of the four bits I'm sorry are you talking about the taxation impact 12:08 12 minutes, 8 seconds tax refund sir uh there there's a note in oh yeah yeah there's a 4 cr uh of tax interest on tax rather not a tax refund 12:17 12 minutes, 17 seconds yeah of course right sir and my last question is sir on asset quality roughly like 73 million floating provisions were added this 12:25 12 minutes, 25 seconds quarter. So is it all for the expected ECL implementation and what kind of rec recurring impact are we likely to see with 12:33 12 minutes, 33 seconds we as a bank we want to get to 1% or less NNPA as soon as possible. So we are doing all that it takes to ensure that 12:42 12 minutes, 42 seconds net NPA comes down to 1% or below and uh we we're sure about the direction how soon we'll reach there we'll get to know 12:50 12 minutes, 50 seconds soon enough so if you see it's a bounce rate coming down slippage coming down uh gross NPA coming down net NPA coming 12:58 12 minutes, 58 seconds down so it's all gross NPA is a net outcome of all these activities that you're doing so so we're very clear it's 13:06 13 minutes, 6 seconds not meant for ECL it's just that you know You see our uh our recoveries and upgrades as a percentage of our fresh 13:14 13 minutes, 14 seconds flow it is 86%. That's like we have never touched that before and we intend to not only touch we need to continue 13:20 13 minutes, 20 seconds that and maybe even go better with the with the with the improved new vintage bounces and and new uh new sourcing 13:29 13 minutes, 29 seconds portfolio quality. So it's got nothing to do with ECL. 13:35 13 minutes, 35 seconds Uh right sir, thanks a lot for answering my oil questions. Uh and congrats again. Thank you very much. 13:42 13 minutes, 42 seconds Thank you. The next question is from the line of Adita from Securities Investment Management. Please go ahead. 13:49 13 minutes, 49 seconds Uh yeah. Hi sir. Thanks for the opportunity and congratulations on a good set of results. 13:54 13 minutes, 54 seconds Hello sir. Uh sir my first question is on NIMS. Uh uh so s Nim improvement you know it has majorly I think come from 14:01 14 minutes, 1 second higher CD ratio and balance sheet improvements which you mentioned which you have undertaken under borrowing side. uh because if I look at your spreads they seem to have dropped zero 14:09 14 minutes, 9 seconds fuel. Uh so yield on advances has fallen at a faster rate than the cost of funds this quarter. uh so going forward with 25 rate card impact going to be seen in 14:18 14 minutes, 18 seconds Q4. Uh uh when do you see you know cost of funds falling at a you know faster rate than the yield or advances? 14:26 14 minutes, 26 seconds So uh I want you to look at the cood cost deposit on a base of almost 65,000 14:33 14 minutes, 33 seconds crores. Okay. on a 65,000 cr base you're dropping 10 bips. Uh and you and you are 14:40 14 minutes, 40 seconds to compare it with uh with with uh average assets where there is a there is a drop to uh 10 14:49 14 minutes, 49 seconds uh uh average yield drop by about 10 10.98 10.98%. 14:58 14 minutes, 58 seconds uh so so where the momentum which which we'll get will be from continued cost deposit coming down uh the if you were 15:07 15 minutes, 7 seconds to see the fall in cost of deposit is sharper than the fall in cost of uh cost of funds which basically means that the 15:15 15 minutes, 15 seconds impact of cost of borrowing is much lesser. 15:19 15 minutes, 19 seconds Yeah, I understood that point sir. But if I look at your yield or advances uh so they have fallen by 13 bits uh this 15:26 15 minutes, 26 seconds quarter as against the drop of 10 bits in the cost of deposits right and the 25 bits rate cut impact to be 15:33 15 minutes, 33 seconds seen in Q4. Uh do you see the yield on advances falling faster than the cost of deposits in Q4 as well? 15:40 15 minutes, 40 seconds The full impact of the 50 bits rate cut which happened in the previous quarter is taken in Q3. The full impact. So, so 15:48 15 minutes, 48 seconds what you're seeing is a lagged impact uh for the 25 basis point repoor rate cut which you saw which happened in Q3 the 15:55 15 minutes, 55 seconds impact you will see happening in in Q4 the full impact you will see happening in Q4 so so it's a lagged impact which is which you're seeing from a yield 16:04 16 minutes, 4 seconds reduction perspective whereas the NIM growth is fully predicated on our term deposit uh and 16:12 16 minutes, 12 seconds our savings account rate interest rate uh going uh going southward and we have 16:19 16 minutes, 19 seconds a we have clarity on we have done this playbook once uh not once twice the last two quarters we've seen this happening and we are confident that uh we'll be 16:28 16 minutes, 28 seconds able to grow as we grow 19.5%. 16:34 16 minutes, 34 seconds At a lower cost of deposits 6.86 and third thing which is very important I want to tell you is on granularity our 16:41 16 minutes, 41 seconds top 20 has gone down to 6.61 fix one. So it's all the three and many of you who have been in the investor day uh uh uh 16:49 16 minutes, 49 seconds presentations that we that Ravi and I did uh we said that it is not two out of the three or one out of three it is all the three together all the time. So so 16:59 16 minutes, 59 seconds we're very confident that our cost deposit will come down the growth rate will continue in the 18 to 20 range and in addition we'll also be able to maintain the granularity. 17:10 17 minutes, 10 seconds Understood sir. Uh and now sir if I look at your growth and deposits uh this quarter a large part of growth has come from bul deposits. Uh so should one 17:18 17 minutes, 18 seconds consider this as a one-off or considering the rate reduction we have done in the on the deposit side there has been some impact on garnering retail deposits. 17:28 17 minutes, 28 seconds You would see that our uh ratio of uh retail to bulk remains the same at the portfolio level and and there is no 17:35 17 minutes, 35 seconds reason to believe that it'll be it'll be any different. uh so I don't see a uh a 17:42 17 minutes, 42 seconds big change in in bulk bulk deposit versus uh retail deposit. Having said 17:48 17 minutes, 48 seconds that the reduction of rates on both is uh is is on par. I mean the the rate of the the reduction in the rate of 17:56 17 minutes, 56 seconds interest of both bulk deposits and retail deposit Q2 Q3 over Q2 is is practically the same. So you're getting the benefit from both retail and bulk deposit repricing. 18:09 18 minutes, 9 seconds Understood sir. And so just lastly on this advanced growth uh there is this others under advances book which have grown strongly this quarter. Uh so what is this book? 18:19 18 minutes, 19 seconds It's a 2,000 cr book. Uh it is not it's not it's not a large book. It's a 2,000 cr book. One second. Which is a mix of 18:27 18 minutes, 27 seconds all all things. Uh page number page number 21. So yeah some uh loan 18:36 18 minutes, 36 seconds against term deposit those kind of things have uh the largest component here will be about a 600 700 cr of uh 18:43 18 minutes, 43 seconds loan against term deposit. So these are this is a mixed bag of whatever is not not mentioned in the other products. 18:51 18 minutes, 51 seconds Got it. And sir mortgages have been flattish now for the last three four quarters. So when do you see that returning to the normal level of growth rates which we expect from BCB? 19:02 19 minutes, 2 seconds I think uh 12.4% is our YI growth on mortgage. Uh we have really curbed uh 19:10 19 minutes, 10 seconds DSA sourcing. We are running a higher organic book and more importantly 19:19 19 minutes, 19 seconds uh our u our HL growth have been curtailed and has been and there's far more BL that we're 19:27 19 minutes, 27 seconds doing. I would tend to think that we'll we'll mortgage will come back to a 18% plus growth. similar to the B bank 19:33 19 minutes, 33 seconds growth in in the next full year and the reason for that is simple. We have uh you know people take time to to get used 19:42 19 minutes, 42 seconds to the new way of thinking and implementing that. Uh we have done it consistently for the last 9 months. So 19:49 19 minutes, 49 seconds we would tend to think for the I mean I plan for the whole of next year mortgage growth will be higher uh equivalent or higher to the bank's asset growth. 20:02 20 minutes, 2 seconds So s thanks for answering questions and all the best. Thank you very much. 20:08 20 minutes, 8 seconds Thank you. The next question is from the line of MB Mah from Kak Securities. Please go ahead. 20:15 20 minutes, 15 seconds I just couple questions. One. Yeah. Go ahead. 20:23 20 minutes, 23 seconds There is no response from the line. 20:25 20 minutes, 25 seconds We'll No, no, there is lot of response. I could hear Mahes. No sir. The person has left the queue. 20:32 20 minutes, 32 seconds We'll move to the next question which is from the line of Suraj Dut from Sundara Mutual Fund. Please go ahead. 20:39 20 minutes, 39 seconds Hi sir. Um congratulation on the good quarter. So just one question. Yes. 20:44 20 minutes, 44 seconds Uh sir just one question sir on the RWA it has jumped almost 890 basis point Q. 20:50 20 minutes, 50 seconds Just wanted to check if this is a function of the loan mix or there are anything else. 20:57 20 minutes, 57 seconds uh our R RW is is well below the 50% mark. Uh so is uh so uh I don't know one 21:07 21 minutes, 7 seconds second just hold on I'm just guessing probably because of the movement here. Yeah, I I think there's a scale 21:15 21 minutes, 15 seconds issue because the the the graph, you know, we this this movement of speed data set is uh 40,000 49. 21:25 21 minutes, 25 seconds Yeah. Uh 21:38 21 minutes, 38 seconds one second. Yeah. 21:59 21 minutes, 59 seconds So uh as I just checked this out uh the RWA moment is 5% which is similar to the the overall growth of the of the book. 22:07 22 minutes, 7 seconds So it has grown in similar terms to the to the to the asset growth the QQQ asset growth. 22:14 22 minutes, 14 seconds Sure sir probably on on a 7% asset growth we have had a RW increase of 5%. 22:21 22 minutes, 21 seconds Sure sir. Okay. 22:29 22 minutes, 29 seconds Thank you. The next question is from the line of J Mundra from ICSA securities. Please go ahead. 22:37 22 minutes, 37 seconds Yeah. Hi, good evening sir and thanks for the opportunity and congratulations on a steady quarter. Uh I believe sir if 22:44 22 minutes, 44 seconds I remove uh this this oneoff staff cost provision then the ROA would have been around one more than one around 1% right 22:53 22 minutes, 53 seconds 1.01 101 right so I mean what you had said in the strategy meeting that you know we are 23:00 23 minutes very much um on that u 1% mark so except for this oneoff we would have been there 23:06 23 minutes, 6 seconds right and hopefully u uh mar mar mar mar 23:11 23 minutes, 11 seconds mar mar mar mar mar mar mar mar mar mar mar mar mar mar mar mar mar mar mar mar 23:11 23 minutes, 11 seconds mar mar mar mar mar mar mar mar mar mar mar mar mar mar mar mar margins asset quality there's no imminent uh pressure as such right and as you said the third party income should be slightly better 23:19 23 minutes, 19 seconds uh seasonality uh hopefully in should also be stable if not improving or maybe improving. Uh 23:26 23 minutes, 26 seconds right so that assessment looks fair right uh it it looks reasonably fair but I I don't want to comment on a quarter four 23:34 23 minutes, 34 seconds as much as yeah that over the next few quarters that that's exactly the way we see it. uh and also secondly I in the 23:43 23 minutes, 43 seconds strategy meet I spoke more about 13.5% and 14 14.5% ROE and not about ROA but 23:51 23 minutes, 51 seconds uh but the same way 1% 1.01 01 roe also translates to 14.1% roe uh in in this 23:58 23 minutes, 58 seconds current quarter. Yeah. So they are related there honestly. 24:03 24 minutes, 3 seconds Sure. And uh secondly sir if you have I mean you have multiple savings rate right? Uh and depending on your customer 24:11 24 minutes, 11 seconds profile and those rates have also changed given the competitive dynamics. 24:17 24 minutes, 17 seconds uh is there I mean do you have the blended number of let's say what is the blended savings rate cost for us and maybe how that has behaved uh versus 24:26 24 minutes, 26 seconds last quarter or maybe last two three quarters so J there is one one way I can answer that without having to reveal 24:33 24 minutes, 33 seconds more than I need to which is kindly look at the cost of fund reduction 24:38 24 minutes, 38 seconds Q1 to Q3 uh Q sorry Q1 to Q2 7.18 became uh 7 7.01 01 or cost of deposit moved from 6 712 to 696. 24:51 24 minutes, 51 seconds That's a 16 basis point reduction. You seeing that? Yes. 24:57 24 minutes, 57 seconds Whereas in the current quarter there is a 10 basis points reduction and and you can imagine why because in 25:05 25 minutes, 5 seconds the in Q2 we reduce the savings account rate and savings account rate is not like every time you can you know you 25:13 25 minutes, 13 seconds make that cut you don't you can't cut deeper than what you're cutting cut and currently you're at 1.5% at the lowest end of the scale. So, so when the 25:21 25 minutes, 21 seconds savings the difference honestly between the delta of 16 bits and 10 bips is uh 25:28 25 minutes, 28 seconds is the impact of savings account cut. So one way of looking at it for the future is that you'll get the benefit from TD 25:36 25 minutes, 36 seconds going forward. There may not be too much of benefit coming from a SAR reduction unless there is more repor rate rape cut happening in the future. 25:44 25 minutes, 44 seconds Right? You you got me? 25:46 25 minutes, 46 seconds Yes. Yes sir. I got that. Okay. and um sir on theme book right so we also have 25:53 25 minutes, 53 seconds a strategy of moving towards slightly u maybe slightly bigger ticket size and 25:58 25 minutes, 58 seconds capturing the OD uh as a tool to protect uh and retain and maybe acquire more 26:06 26 minutes, 6 seconds customers. So where do I look that theme? Because the theme number that we give in the product mix table, right? Is 26:14 26 minutes, 14 seconds that the right number to assess uh that strategy? Because that number of 2249 is 26:20 26 minutes, 20 seconds uh Q YI both parameter is somehow not impressive. So which is the number should I include this along with corporate or how is it? 26:29 26 minutes, 29 seconds Okay, we are in an embionic stage right where we just put in the people in various locations. We found a credit folks. We setting up the team right now. 26:39 26 minutes, 39 seconds It is working in four locations. There is another six more locations where it it has to come in. So, uh you'll see the 26:46 26 minutes, 46 seconds impact of it happening in about uh I don't know 3 four quarters time where it's a meaningful impact. I mean so right now it is about getting the right 26:55 26 minutes, 55 seconds people putting the right structure. So we got the NSM, we got the re RSMs, the people in in certain locations and uh so 27:03 27 minutes, 3 seconds so it's it's a buildup. This this is a long game very clearly a long game. 27:09 27 minutes, 9 seconds Right. Right. Sure. And sir, your mortgage what is the proportion of HL and BL u broadly of this 28,000 cr uh loan book? 27:20 27 minutes, 20 seconds See it used to be 50/50. Now it is less than 5050 like HL is less than 50. uh number one. Number two, if you were to 27:28 27 minutes, 28 seconds look at a investor presentation maybe about four quarters back or maybe six quarters back that mortgage used to be 54%, now it has come down to 51%. 27:37 27 minutes, 37 seconds Okay. Right. 27:38 27 minutes, 38 seconds So clearly there is a there's a increased focus on the BL there on the 27:45 27 minutes, 45 seconds on the lower ticket afford less than affordable housing segment etc. there is a bit of a withdrawal and there's more 27:52 27 minutes, 52 seconds more uh more focus and growth coming in the in in the BL. So while sourcing has 28:01 28 minutes, 1 second really skewed in a in the favor of BL which which is what the management action for the last two two and a half years was uh the impact of it you're 28:08 28 minutes, 8 seconds seeing on the portfolio now it's big be becoming big enough to being visible in the portfolio 28:14 28 minutes, 14 seconds right and sir on your uh uh capital raising I mean any any sort 28:21 28 minutes, 21 seconds of a timeline or uh that that I mean you just had this $10 million uh infusion but from uh uh capital uh perspective. 28:31 28 minutes, 31 seconds Do you have any timeline in mind? 28:34 28 minutes, 34 seconds We have both a timeline is a timeline based as well as event based. Uh we we are pretty much clear uh of how much we 28:44 28 minutes, 44 seconds want to take and at what what rate we want to take it. So uh so right now there is no urgency for for for capital 28:54 28 minutes, 54 seconds but uh for for future growth we require it and uh the belief is that if you're able to increase your book value by 5 29:02 29 minutes, 2 seconds rupees every quarter for the last n number of quarters and the future also we are reasonably confident about 29:07 29 minutes, 7 seconds repeating our our our our business uh in in a similar fashion. uh I think there 29:14 29 minutes, 14 seconds is uh there is there'll be an opportunity coming in. So at at some point in time I really do see us uh 29:22 29 minutes, 22 seconds raising uh capital because uh our ambition and our growth rate uh uh will require capital earlier than later. 29:33 29 minutes, 33 seconds Sure sir, sure. And and and last question sir, have you done any assessment of the ECL requirement? Now a lot of banks are you know because now it 29:41 29 minutes, 41 seconds is five quarters away either they have been you have secured book but still have you done any assessment that if you 29:48 29 minutes, 48 seconds were to transition uh what kind of a uh additional provisioning or one time provisioning the bank may need to make. 29:56 29 minutes, 56 seconds Yeah we have uh we we've been doing it parallelly for qui how long now? for almost four years now performance. 30:03 30 minutes, 3 seconds Yeah. Three four years you've been doing parallelly uh I don't see a I mean it doesn't keep you awake in the night. Let me put it 30:11 30 minutes, 11 seconds that way. J right it's more or less in line and with with the increasing and improving asset quality things will only 30:19 30 minutes, 19 seconds get better but you will not be able to get a benefit. You'll only it's the higher of the two. So right, so so we are focused on getting our portfolio 30:27 30 minutes, 27 seconds quality right and like I told the gentleman earlier also get the NNPA down to one or less right and keep keep 30:36 30 minutes, 36 seconds moving in the direction right when when all these things are aligned slippage ratio is down GNPA is down NPA is down 30:43 30 minutes, 43 seconds so SMA also is is down bounce is down so just keep keep getting that right uh and 30:50 30 minutes, 50 seconds ECL will take care of itself but honestly when you look at it, there's hardly anything to to worry about. 30:58 30 minutes, 58 seconds All right, sir. Thank you and all the very Thank you. Thank you very much. 31:04 31 minutes, 4 seconds Thank you. The next question is from the line of MB Mahesh from KC Securities. Please go ahead. 31:10 31 minutes, 10 seconds Sorry. Sorry, I got dropped. Uh but just one question. In the past in a slightly difficult deposit environment, usually 31:17 31 minutes, 17 seconds DCB has found its cost of fun kind of going faster. we seem to be getting into one such situation again. Um if you 31:24 31 minutes, 24 seconds could just kind of tell us uh how are you seeing the next couple of quarters on on the deposit front? 31:32 31 minutes, 32 seconds I'll give you a bit of a contextual answer on this mish. Uh it is as a as a bank for the last let's say about 10 15 31:39 31 minutes, 39 seconds years we've been the reason to buy has always been price that's changing that has changed. Uh so so close to 3,000 odd 31:48 31 minutes, 48 seconds employees in the in the branch banking uh uh system are now uh uh uh fighting a 31:56 31 minutes, 56 seconds battle in the market where the reason for coming to us is is is is not the pricing alone uh is not the is not the 32:04 32 minutes, 4 seconds pricing uh in itself. Uh so people are finding it a bit difficult uh but but 32:12 32 minutes, 12 seconds a lowcost liability franchise is absolutely essential for uh for us in the medium to long term and uh I'm 32:20 32 minutes, 20 seconds pretty much happy with the way the last three quarters have panned out. Uh because we got all the three things right. Uh I know I'm repeating this but 32:28 32 minutes, 28 seconds the cost of deposit the growth and the granularity. It getting it all all right you know is is not easy. getting 3,000 32:35 32 minutes, 35 seconds people who always been selling based on we are one of the highest that that's kind of moving away and uh I have the 32:43 32 minutes, 43 seconds September data I have another December data uh the the difference between our retail peak rate and the composite 32:50 32 minutes, 50 seconds highest peak rate the peak rate of six biggest banks in India is now down to 60 bits so we're converging uh uh so so the 33:00 33 minutes the people are learning we're getting there and we're not we're not losing time or growth while we are making this 33:08 33 minutes, 8 seconds change. So, so pretty much confident about uh about getting this momentum going. One last thing, I don't know Mah 33:17 33 minutes, 17 seconds whether you you you saw the strategy presentation which we did for the investor day. uh we have a pretty good 33:25 33 minutes, 25 seconds base of NEO customers who have come in for us uh primarily for uh uh lowcost 33:32 33 minutes, 32 seconds forex card purposes. We're finding that cross-selling the savings account and the and and deposit to them is uh is is 33:42 33 minutes, 42 seconds is a is a big opportunity. Half a million customers we have on that base which is not a traditional self-employed 33:49 33 minutes, 49 seconds customers. So we are getting the benefit of that also slowly but we are we are we we're getting it each incremental month 33:56 33 minutes, 56 seconds is a is a better month in terms of uh uh higher savings account uh balance from from this NEO customers who are 34:05 34 minutes, 5 seconds primarily salaried and definitely uh affluent uh and and and high net worth. 34:14 34 minutes, 14 seconds Perfect. Uh second questions are on the ground uh is the demand for the the SM kind of products as robust as what we 34:21 34 minutes, 21 seconds are seeing in the numbers or is this a little bit unsustainable that that one is seeing on the decision? 34:28 34 minutes, 28 seconds I I think uh for for the customer segment that we are in there clearly is a demand and I can see it from both sides us losing our good portfolio 34:37 34 minutes, 37 seconds customers to competition uh for a higher exposure or for a lower cost. So there clearly is demand there in the front 34:44 34 minutes, 44 seconds line. If you see our uh leads to conversion we are seeing that uh there is a there is real competition happening. If you don't if you're not 34:52 34 minutes, 52 seconds able to to to to disperse in time uh customers have multiple offers and and they're going away and increased login 35:00 35 minutes is happening. For example uh uh December login are very very similar to to to 35:07 35 minutes, 7 seconds March login. March is a usually a special month right we are neck to neck on that as far as the login are 35:14 35 minutes, 14 seconds concerned conversion still is is bit more conservative but definitely there is a there is a requirement there's a 35:23 35 minutes, 23 seconds requirement from and from multiple regions it's not region specific across India I'm finding that there is a increased demand and when you speak to 35:32 35 minutes, 32 seconds DSAs also you're seeing the same thing happening in this segment there is competition So the problem which we see is that uh 35:40 35 minutes, 40 seconds is that demand u a function of uh sorry the the the growth that one is seeing out there is it because uh lenders are 35:47 35 minutes, 47 seconds more than happy to lend or are borrowers generally wanting to see that credit coming through in their respective companies. That's the only that's the direction of the question. 36:00 36 minutes Clearly I I would think it's a it's a latter. It is it is that there is a there is a requirement there there is a there is a hunger. 36:12 36 minutes, 12 seconds Perfect. Okay. Thank you. 36:16 36 minutes, 16 seconds Thank you. The next question is from the line of Rohita Aurora and individual investor. Please go ahead. 36:25 36 minutes, 25 seconds Sir, my question has already already been answered. 36:28 36 minutes, 28 seconds Thank you very much. If you have any more questions you can ask. 36:34 36 minutes, 34 seconds The next question is from the line of Kushwan Pava from KPAC. Please go ahead. 36:41 36 minutes, 41 seconds Hi, congratulations on good set of numbers. Am I audible? Thank you Kushwat you are audible. 36:48 36 minutes, 48 seconds Uh I've got two questions. One uh is is uh more immediate and one is more strategic. I'll ask the immediate one first. I recall in uh you know uh the 36:57 36 minutes, 57 seconds beginning of the year presentations and we have given this guidance for this year you have mentioned that we should be achieving an ROE uh and I'm talking 37:04 37 minutes, 4 seconds about uh you know when when we did March 20 uh five results like this year we'll be targeting or you know the guidance 37:11 37 minutes, 11 seconds was closer to 14% ROE now when I look at what we have achieved in 9 months and I annualize it I mean 9 months based on 9 37:19 37 minutes, 19 seconds month we are around 9.4% 4% count and if I analyze it we are close to 12.5.6% 37:27 37 minutes, 27 seconds ROE. So where do you see you know uh closing this year particularly given the fact that you know a lot in Q4 code is dependent on the fee income are we 37:35 37 minutes, 35 seconds likely to hit our targets for this year or uh we're likely to fall short so uh I want to clarify the guidance 37:45 37 minutes, 45 seconds given was 13.5% ROE for 2627 and 14.5% ROE for 2728 37:54 37 minutes, 54 seconds uh we haven't necessarily given our guidance for this current year uh uh so 38:01 38 minutes, 1 second as far as uh the progress is concerned you know growth of 18 to 20%. And uh you know you we we tend to repeat ourselves. 38:11 38 minutes, 11 seconds I mean if you see the last three quarters you would have seen it's a repetitional every quarter is similar to the previous quarter uh in a in a 38:19 38 minutes, 19 seconds topline growth sense as well as in a bottom bottom line sense but for next year 38:26 38 minutes, 26 seconds uh sorry Kushwan just one more thing uh in fact we did not know that there's going to be a wage bill impact we did not know that there was going to be a 38:34 38 minutes, 34 seconds uh but still uh we we we we still posted whatever uh uh the bottom line that we 38:41 38 minutes, 41 seconds posted uh in the same vein uh we are very confident that uh the 13.5% 38:48 38 minutes, 48 seconds roe which we which we gave a guidance for in 20 26 27 we reasonably confident achieving it similarly for 2728 as well 38:58 38 minutes, 58 seconds sure the reason I asked this was was because March is heavy on C income and uh you know given the you know I mean 39:05 39 minutes, 5 seconds other you know the usual banking business will play out the way it's pay out given by growth driven by by improving asset quality and driven by 39:13 39 minutes, 13 seconds retricing of term deposits. But but you know you have you know I wanted to check on with you on on the confidence you have on the feed income side given the 39:21 39 minutes, 21 seconds competition that exists and it's becoming increasingly more cutthroat. So any any color on that? 39:27 39 minutes, 27 seconds I really don't comment on the next quarter but in general the fee looks kind of robust. There is no and nim you 39:36 39 minutes, 36 seconds heard the story. So every quarter we should have very clear yeah that that benefit coming through uh 39:43 39 minutes, 43 seconds and uh and this exceptional expense of of 26 odd yeah would look more like uh 1 cr 39:52 39 minutes, 52 seconds incrementally for quarter so that's hardly anything so on on 40:00 40 minutes the on the long-term perspective we we've seen some articles being right around and uh you know that that you know I may considering reducing you know 40:08 40 minutes, 8 seconds the commissions that are payable on insurance products. So given that fees uh you know is an important part of our uh you know annualized P&L how do you 40:17 40 minutes, 17 seconds see in long-term impacting us and you know do you have any thoughts on this that you would want to share from vision you know two to three years 40:25 40 minutes, 25 seconds because there have been lot of articles on this and I think some regulatory moment also. Yeah. So third party distribution is a is a is a big 40:31 40 minutes, 31 seconds component of e structure. Uh what we aim to what we're doing is that we're building we're using this time to 40:40 40 minutes, 40 seconds feverishly build the trade finance volume. Uh uh some other investor and analysts had asked us question about u 40:47 40 minutes, 47 seconds uh about about the 3 to 15 cr uh uh you know mid mid segment ume segment that 40:55 40 minutes, 55 seconds that we are entering into. Uh the whole idea is that uh we have to build a third 41:03 41 minutes, 3 seconds fourth string in our uh FIBO uh and and I believe that uh TF uh trade finance is 41:11 41 minutes, 11 seconds is is an important component. So we have to build it up that that's an that's an area of opportunity which we have because we do cater primarily to 41:19 41 minutes, 19 seconds self-employed customers who have a trade finance need and uh many people in this call would have heard it adnosium but 41:27 41 minutes, 27 seconds for a long long time we've been we have been treating customers as products giving uh fill it shut it forget it kind of product when we should be getting 41:35 41 minutes, 35 seconds into relationship with the self-employed customers and meeting surplus deficit insurance and trade finance need for 41:42 41 minutes, 42 seconds that customer. So that that's something which you started about 6 months back. 41:46 41 minutes, 46 seconds Uh the progress is painfully slow but in this job you got to be extremely patient because nothing happens overnight in retail banking and we are a primarily a retail SM oriented bank. 41:56 41 minutes, 56 seconds So over a period of time you'll see the benefit of it happening in about two two and a half years. You will see the snowball turning into an avalanche or we hope. 42:06 42 minutes, 6 seconds All right. Thank you. Thank you so much and wish you all the very best. Thank you very much. 42:11 42 minutes, 11 seconds Thank you. The next question is from the line of Ravi Puroitz from Securities Investment Management. Please go ahead. 42:18 42 minutes, 18 seconds Yeah. Hi. Uh congratulations on a good set of numbers. Uh thank you Ravi. 42:23 42 minutes, 23 seconds Yeah. And u so most of my questions have been answered. Just one you know um just wanted to kind of you know check we we've seen lot of um uh increase in 42:33 42 minutes, 33 seconds commodity prices generally speaking in the last you know couple of months and typically what we've seen is whenever commodity prices see these kind of 42:41 42 minutes, 41 seconds increases you've seen working capital um across uh you know the board go up so in have you have you kind of witnessed uh 42:50 42 minutes, 50 seconds you know any on the ground increased demand on theme MSME side um on on 42:57 42 minutes, 57 seconds credit growth owing to this. I mean typically you have credit growth either due to higher capex or due to working capital uh requirements. So if you could 43:05 43 minutes, 5 seconds just share what what do you see uh you know on the ground uh on on credit uh because after a long time we've seen a 43:12 43 minutes, 12 seconds aggregate system level credit to hitting about 14 odd% right lately 14.5. So if you can just share something what what 43:20 43 minutes, 20 seconds do you see on the ground it would be great. So for theme, the self-employed segment uh we are seeing uptick in the 43:28 43 minutes, 28 seconds uh in in in uh not in the CCOD uh but in uh uh installment loans. So that's 43:36 43 minutes, 36 seconds that's where we see the movement happening. In fact uh quite contrary to what you're saying uh we are in a way 43:44 43 minutes, 44 seconds struggling on the theme book as you would have seen it has been stuck at the 2,200 cr level for some time now. So we 43:53 43 minutes, 53 seconds clearly don't have a working capital problem of uh in that sense of the word but we do have a working capital problem in the sense that we don't have enough 43:59 43 minutes, 59 seconds of it. Uh but clearly on the on the installment lending there is uh there is 44:06 44 minutes, 6 seconds demand happening. There is our business loan portfolio uh is uh you know the the kind of login volumes that you're seeing 44:15 44 minutes, 15 seconds is indicative of uh of of a decent demand and the performance of those uh customers also are are reasonably good. 44:23 44 minutes, 23 seconds Uh you know post pandemic uh this this uh perhaps the best few 44:30 44 minutes, 30 seconds quarters I've seen in terms of uh new new new vintage bouncing 44:38 44 minutes, 38 seconds Okay. And and just just one thing you know over the last one year I think you've kind of mentioned um at various 44:46 44 minutes, 46 seconds occasions um about our idea to you know get higher yields or in a sense also higher employee productivity in that 44:54 44 minutes, 54 seconds sense. Right? So on mortgages for example our our ticket sizes on an average uh our idea was to increase the average ticket sizes. Second was we were 45:03 45 minutes, 3 seconds working on this product for merchant ODS where uh we had said that you know we were competing with the NBFCs and uh an 45:10 45 minutes, 10 seconds OD is a is a very very important product uh uh so if you could share uh I don't know it's it's not generally gets 45:17 45 minutes, 17 seconds covered in our presentation but if you could share on you know on both those counts as to you know what what's been the average ticket size increase that 45:25 45 minutes, 25 seconds we've seen on the mortgage side and and how's the traction been on the on the merchant OD uh on the product. 45:33 45 minutes, 33 seconds Uh let me tell the good good story first. Clearly we're seeing an uptick in the in the mortgage dispersal. Uh it is 45:40 45 minutes, 40 seconds it is marginal if you talk it from a average ticket size perspective. Uh let's say approximately 27 lakh going to 32 lakhs. You may say it's only five 45:48 45 minutes, 48 seconds lakhs but that five lakh actually is a 19% growth right? 45:52 45 minutes, 52 seconds Okay. Uh which is which is what the bank is growing by right? 18 and a half 19% is what what we are growing by. So we clearly seeing that the increase in 46:00 46 minutes ticket size is coming through and uh uh uh that that's a tick box for us. the BL to HL has been a tick box clearly that 46:09 46 minutes, 9 seconds has come through very very uh very clearly uh through we haven't been very successful in the OD part and we didn't 46:17 46 minutes, 17 seconds expect to be successful overnight also because what we're doing is we're going back to a term loan customer and then 46:24 46 minutes, 24 seconds getting into the and relationship and the relationship is not built over a phone call so these are customers who've been with us for four four and a half 46:32 46 minutes, 32 seconds five six years uh we haven't had too much of interaction with we're just going and and and we're starting the 46:39 46 minutes, 39 seconds wooing process. Uh some amount of leadership is is is happening. So it'll take time but when it works you will get 46:47 46 minutes, 47 seconds the the incremental benefit coming through for a pretty long time. So on 46:54 46 minutes, 54 seconds merchant OD on OD of all sorts uh it's still in the in in the infancy kind of 47:01 47 minutes, 1 second uh area. I haven't seen real good progress happening yet but effort is on and it's only a matter of time right we should be able to we should get able to 47:10 47 minutes, 10 seconds get the benefit of of the work that we're doing uh once the relationship matures you should be able to get uh the 47:19 47 minutes, 19 seconds benefit through and the benefit is not just OD it is that the relationship will translate to current accounts which are happening right 47:27 47 minutes, 27 seconds it is translating a bit in trade finance and uh OD uh which you spoke board and it's happening very well in terms of 47:34 47 minutes, 34 seconds insurance. So by the time we we get the story right, I would tend to think it'll take another 12 to 18 47:42 47 minutes, 42 seconds months before it becomes large enough for it to make a difference to to our lives. The effort is still on. 47:51 47 minutes, 51 seconds Oh great. Thanks a lot and all the best. Thank you very much. 47:58 47 minutes, 58 seconds Thank you. 48:01 48 minutes, 1 second The next question is from the line of Nitarval from Motilwal. Please go ahead. 48:07 48 minutes, 7 seconds Hello. Yeah. Hi, good evening. Uh, thanks for the opportunity and congrats and the entire team for another great quarter. 48:16 48 minutes, 16 seconds Thank you very much. I quite like the another very nice to hear that it's been a very consistent performance. 48:23 48 minutes, 23 seconds No, so pretty happy about that. Uh, yeah. See, three questions. One is about the field goal. We talked about it and the effort that the bank is taking but 48:32 48 minutes, 32 seconds the growth rate that we are seeing in terms of even the sequential growth yi growth all looks very strong. So how sustainable is this and can one build a 48:40 48 minutes, 40 seconds fee growth significantly higher than loan growth in the coming news? How how do you look at that intention? 48:46 48 minutes, 46 seconds Nathan, it's a very important question because a lot of people ask me this question. I in the beginning I used to get totally confused with this question. 48:52 48 minutes, 52 seconds Now I'm now I understand the question much better. So our our fee growth is less linked to loans. It is more linked to deposits. 49:03 49 minutes, 3 seconds Okay. 49:04 49 minutes, 4 seconds So when earlier people used to ask me I used to get totally befuddled by the question as to what is the correlation because uh I don't have experience of of 49:13 49 minutes, 13 seconds another bank but in our bank uh the processing fee is a component but look at the look at the where the other fees 49:20 49 minutes, 20 seconds are coming from. you you're getting fee from uh third party distribution which is more liability linked trade finance 49:30 49 minutes, 30 seconds largely still uh uh liability liability linked FX income DB remit uh you know uh 49:38 49 minutes, 38 seconds foreign foreign remittance etc liability linked again um penalties and fees are 49:45 49 minutes, 45 seconds processing fees like is one component ATM fees again liabilities So I'm not 49:52 49 minutes, 52 seconds too sure for for us we don't even link it to the loan growth. 50:00 50 minutes Okay. So but but this quarter to 15% sequential fee growth that we are reporting. So how how should one look at 50:08 50 minutes, 8 seconds this in the in the coming quarters because I believe both deposits and advances are you are guiding to grow around 18 19% run rate around that. Yes. 50:18 50 minutes, 18 seconds So we should we should see the core fee income continue at a at a similar rate. 50:24 50 minutes, 24 seconds I mean I I don't we will see and unless there's some regulatory action happening which which one is not aware of. Uh so unless that is happening we should be 50:32 50 minutes, 32 seconds having a fairly consistent growth coming through in terms of core fee income. 50:38 50 minutes, 38 seconds Let me put it this way. While we are at 1.1% uh total income on average assets 50:44 50 minutes, 44 seconds uh 1% is something which at least from a template sense 1% is what we look at the fee income we look at. 50:55 50 minutes, 55 seconds Thanks. 50:56 50 minutes, 56 seconds Okay. Okay. Got it. And the other question is around deposits. uh like if I look at the Kasa while Kasa I understand like SA has been going down 51:05 51 minutes, 5 seconds for most banks but even on the car front uh the mix has been and like shrinking and car deposits over the years has been 51:13 51 minutes, 13 seconds very rangebound. So I understand that the size of the bank and those limitations are there but any any initiatives that we like are working on 51:22 51 minutes, 22 seconds or areas which can help us to improve our car deposits. 51:28 51 minutes, 28 seconds Yeah. So uh good that you asked us this Nathan. I mean uh it's an area of inefficiency or opportunity depending on 51:36 51 minutes, 36 seconds the way you look at it. Um my belief is that the lack of car growth has uh an 51:43 51 minutes, 43 seconds impact of course on the cost of deposit but it also robs us an opportunity uh in a trade fee income and our theme 51:52 51 minutes, 52 seconds book. So they're all interconnected. So we are aware of it. uh we have put up a very very senior resource to drive the 52:00 52 minutes current account and I I and I really don't believe in the big bank small bank thing I mean it's about who's more hungry and who's more processoriented 52:09 52 minutes, 9 seconds who's more digital and who can get things done so and anyway we starting from a very low base so getting current 52:16 52 minutes, 16 seconds account moving is very very critical for us while the term deposit rebooking uh rebooking related repricing will help us 52:26 52 minutes, 26 seconds uh it is it is important to to add uh current account to our arsenal. Uh it 52:32 52 minutes, 32 seconds has been flatlining for too long. So it very very high on my priority list and my my team's priority list that we 52:40 52 minutes, 40 seconds haven't got an action going is is another matter but uh it it is it is real high priority. It has got multiple impact on the bank. 52:50 52 minutes, 50 seconds Right. Right. And uh lastly on the ROA now that adjusted for this labor code impact we have reached 1% ROA. So while 52:58 52 minutes, 58 seconds I understand our guidance is more hinged around ROE but can can I take that 1% ROA is now kind of a baseline ROA for 53:06 53 minutes, 6 seconds the coming quarters or do you see any risk to that? 53:11 53 minutes, 11 seconds See since the guidance of 13.5 is given we would like to stick with the 13.5 guidance for the next year and 14.5 the 53:18 53 minutes, 18 seconds year after. Let me let me try and answer your question in a slightly less straightforward manner. Uh we said we'd 53:28 53 minutes, 28 seconds like to repeat our quarters. Uh you know that's what we said in when the Q2 results came out at that time. I have 53:36 53 minutes, 36 seconds absolutely no clue that there's a another uh repoor rate cut happening. 53:42 53 minutes, 42 seconds We never knew that there was going to be a a 26 27 crore impact happening because of a labor code. We still repeated 53:50 53 minutes, 50 seconds ourselves at that time also people asked now that you're shown this wouldn't you be able so so there could be some headwinds of some sort we don't know 53:58 53 minutes, 58 seconds which headwind some headwind will be coming in there but consistency we need to we need to I mean the whole 54:06 54 minutes, 6 seconds predictability consistency they're not just terms and words alone we really want to live by it so yeah is there an opportunity perhaps 54:14 54 minutes, 14 seconds there's an opportunity but is there some you never know right so in So some it is a bit bit it's okay to be a bit 54:22 54 minutes, 22 seconds conservative in terms of uh estimation uh because because the promises that that or the the guidance that you gave 54:29 54 minutes, 29 seconds is across and unless something really really dramatic happened we don't want to rage on that we don't want to go back on that got it 54:37 54 minutes, 37 seconds so I'll still go by 13.5 and 14.5 uh for for the next year and the year after right right got it that's very clear 54:45 54 minutes, 45 seconds thanks thank you so much I wish you all the best my pleasure Thank you very much. Thank you. 54:52 54 minutes, 52 seconds Participants who wishes to ask a question may press star and one. The next question is from the line of Vun Bank from Bundan Life. Please go ahead. 55:03 55 minutes, 3 seconds Yeah, thanks for the opportunity and it is heartening to see. 55:06 55 minutes, 6 seconds Hi uh heartening to see the continued steady performance. Uh one question on uh Singh uh could you outline the 55:14 55 minutes, 14 seconds current share of DSA sourcing in the mortgages segment and uh how do you see that evolving over medium-term and in 55:22 55 minutes, 22 seconds terms of investments what investments are needed to build a uh you know scalable direct sourcing front end and the way we are looking at building it 55:31 55 minutes, 31 seconds and is there execution risk in this can you share some thoughts uh we had a 18 to 20% % plus mortgage 55:41 55 minutes, 41 seconds book and we're growing mortgage by 20% the last year uh this year we're growing by 12.4% so far. Uh so what is happening 55:49 55 minutes, 49 seconds is while the bank is growing at somewhere between 18 to 20% uh on on assets uh the we are changing the wheels 55:57 55 minutes, 57 seconds of a moving brain so to speak. So so we have already invested re reworked the 56:05 56 minutes, 5 seconds strategy. There were three big movements which happened in in mortgages. Uh I'm I'm using past tense because it's already done. Now we seeing the benefits 56:14 56 minutes, 14 seconds uh in some sense coming through. The first change we made was the reorientation of uh uh BL and HL. The 56:22 56 minutes, 22 seconds second was to uh increase the ticket size. Uh the third uh was was to move 56:29 56 minutes, 29 seconds from uh not entirely change the skew of DSA originated loans to to own uh 56:36 56 minutes, 36 seconds originated loans and and most of you have connects to the DSA. You can we can check it out in the market also. You'll get to know that the sourcing the the 56:44 56 minutes, 44 seconds the contribution to DC bank has come down with any national DSA you can check it out. It'll you'll you'll get to know that. So we have already done what it 56:53 56 minutes, 53 seconds takes. It's almost 9 months now and we seeing the benefit of that coming through the lower cost there is uh uh what we not seen uh what we seen is a 57:01 57 minutes, 1 second lower lower cost what we not seen is the longevity so we have seen that the nondsa sourced accounts stay with you for far longer than DSA sourced accounts 57:10 57 minutes, 10 seconds in some cases you don't even recover the the cost of valuation and uh legal uh and account fulfillment uh by the time 57:18 57 minutes, 18 seconds the customer forecloses and goes away uh and with a zero foreclosure charges in many cases there is hardly any recovery 57:24 57 minutes, 24 seconds possible. So, so from a from a long-term perspective, this is the way to go. Do we reveal the DSA and organic? No, we 57:33 57 minutes, 33 seconds don't do that. And it's not limited to mortgage alone. Even in the other product where DSAs are involved, we're trying to uh while we're keeping the 57:41 57 minutes, 41 seconds relationship going, we are trying to lessen the the the the skew uh uh towards uh towards the DSAs. 57:53 57 minutes, 53 seconds Got it. Got it. And on the coending uh we've seen a very strong growth in co- lending. Is it largely led by gold loans 58:00 58 minutes and uh are we expecting are expecting some uh regulatory hurdles in coal lending model? What is the expectation now? 58:08 58 minutes, 8 seconds So we were uh 16.22% of the book uh in coending in Q2. 58:15 58 minutes, 15 seconds uh we come down to 16 and I publicly said that we'll our co-ending book as of March 31st will be 58:21 58 minutes, 21 seconds 15% or lesser uh uh uh as 15% or lesser of the uh total asset book uh we're 58:30 58 minutes, 30 seconds comfortable with 15% there are multiple uh originators we work with uh of course you're aware that from January one 58:39 58 minutes, 39 seconds onwards uh we have had this new CLM1 uh uh you new rules of coal lending 58:45 58 minutes, 45 seconds coming into play. Uh we see that this will continue 58:52 58 minutes, 52 seconds uh from a from a you know growth perspective our co-ending book will grow from 2627 59:01 59 minutes, 1 second onwards at the same rate as our total book. So while we grew 108% last year currently we at about 60 65%. Uh next 59:09 59 minutes, 9 seconds year onwards if the bank is growing by 18% we'll grow by 18% on the coal ending. If we grow by 20% we'll be growing coending also by 20%. So that's 59:17 59 minutes, 17 seconds the way we foresee this. And to the question whether largely gold loan yes it's it's largely gold loan multiple players uh but but largely goal loan based. 59:27 59 minutes, 27 seconds Got it. Got it. Yeah. Thanks. 59:31 59 minutes, 31 seconds Thank you ladies and gentlemen. That will be our last question for today which is from the line of Dshit Dhi from Whitesoon Financial Advisor. Please go ahead. 59:40 59 minutes, 40 seconds Uh yeah thanks for the yeah thanks for the opportunity and congrats for a good set of numbers. Uh so you have been 59:47 59 minutes, 47 seconds focusing on you know uh improving the efficiency of the people we have uh and 59:53 59 minutes, 53 seconds uh if we see in last uh uh this 9 months we have open only five branches. Uh so going forward where do you see do you 1:00:02 1 hour, 2 seconds see that this kind of 18 19% growth uh will require new branch or still there is a lot of scope for uh you know improving the efficiency. 1:00:14 1 hour, 14 seconds I think it's both we will I don't know whether we'll ever stop improving the efficiency. That's a 1:00:21 1 hour, 21 seconds that's a continuous thing. No way. I mean there's no finish line there. So, so we will still I mean for us improving 1:00:28 1 hour, 28 seconds efficiency going digital war on paper these are not epithets or uh slogans the real thing these are they're like we 1:00:37 1 hour, 37 seconds live and die by it so it'll continue uh there's no no two ways about it but having said that uh we if you see Q Q3 1:00:46 1 hour, 46 seconds to sorry Q2 to Q3 there's been a slight increase in the number of people while we still lesser than the number of people we had a year back or in March 1:00:54 1 hour, 54 seconds the slight improvement has happened. So we will increase it. There'll be more investment in people coming in. Uh we will be increasing our uh uh branches. 1:01:03 1 hour, 1 minute, 3 seconds Uh next year we should be touching the 500 branches mark. Uh so that that that 1:01:10 1 hour, 1 minute, 10 seconds that most likely will happen. Uh but increasingly uh it is it is it is not one or the 1:01:17 1 hour, 1 minute, 17 seconds other. It it is both. Uh a large proportion of our benefits will come from efficiency improvement from increased digitization. 1:01:25 1 hour, 1 minute, 25 seconds uh and and and uh but that doesn't mean that we will not increase the number of people. We still people dependent in terms of our growth specifically assets. 1:01:34 1 hour, 1 minute, 34 seconds So there will be more branches put in and more uh more uh people put in. The game changer could be if something like 1:01:41 1 hour, 1 minute, 41 seconds a unified lending interface happens where uh digitization of the land records happen across India and then you 1:01:50 1 hour, 1 minute, 50 seconds could see a different kind of uh uh uh game coming into play. So we are involved in it. Uh let's see how that 1:01:58 1 hour, 1 minute, 58 seconds emerges. I mean if UPI if ul is anything like uli we have a very interesting time ahead. 1:02:04 1 hour, 2 minutes, 4 seconds Okay. Yeah that's it from my side. I think uh I think precoid we we have doubled our branches and uh even before 1:02:12 1 hour, 2 minutes, 12 seconds getting the benefit of that we were hit by the covid uh I think now the real benefit is visible in the numbers. So 1:02:20 1 hour, 2 minutes, 20 seconds congratulations for that and all the best for the future. Thank you Dit. Yes. 1:02:27 1 hour, 2 minutes, 27 seconds Thank you ladies and gentlemen. As this was the last question for today I now hand the conference over to management for closing comments. 1:02:37 1 hour, 2 minutes, 37 seconds Thank you very much for your patience and um hope to kind of interact with you um in in at the end of uh March or after 1:02:47 1 hour, 2 minutes, 47 seconds the March results are declared. In the meantime, let's go and go back to the grind and ensure that we continue to be 1:02:54 1 hour, 2 minutes, 54 seconds predictable and uh consistent and uh boring. Thank you very much. 1:03:01 1 hour, 3 minutes, 1 second Thank you on behalf of DCB Bank. That concludes this conference. Thank you for joining us and you may now disconnect your lines.