DCB Bank Limited — Q4 FY26

DCB Bank Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=XFHyWOJ15pY Published: 2 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to the DCB Bank Q4 FY26 earnings conference call hosted by ATF factors 0:09 9 seconds PR. Joining on the call is the senior leadership team of DCB Bank, Mr. Pravin Kouti, managing director and CEO, Mr. 0:19 19 seconds Shridhar Shashadri, wholetime director, Mr. Ravi Kumar, Chief Financial Officer, 0:26 26 seconds Mr. Dr. Ajit Kumar Singh, Chief Investor relations officer. 0:31 31 seconds As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance 0:40 40 seconds during the conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this conference is being recorded. 0:48 48 seconds I now hand the conference over to Mr. 0:50 50 seconds Pravin Ki, managing director and CEO from DCB Bank. Thank you and over to you sir. 0:56 56 seconds Thank you, Ysef. Uh, good evening, ladies and gentlemen. Welcome to DC Bank's quarter 4 earnings call. 1:04 1 minute, 4 seconds Uh, in line with what we said before, uh, consistency, predictability, repeatability are very critical to us. 1:15 1 minute, 15 seconds Uh, this is the eighth successive quarter. uh I have uh I I've been presenting the the results and I'm happy 1:24 1 minute, 24 seconds to say that the bank continues to grow in line with the stated milestones and the objectives that uh we have 1:31 1 minute, 31 seconds articulated uh in the last uh last two years. Uh bottom line first the profit 1:38 1 minute, 38 seconds after tax for Q4 is at 26 crores and the full year is at 732 crores. both of 1:44 1 minute, 44 seconds which are the highest ever in the history of the bank. This is the third successive quarter of registering 1:52 1 minute, 52 seconds highest quarterly profit underlying the inherent consistency of our output. 2:00 2 minutes The bottom line is keeping pace with the top line and the operating jaws are widening. 2:06 2 minutes, 6 seconds 16% income growth, 11% expense growth, fullear operating profit, 25% which is 2:13 2 minutes, 13 seconds the highest in the last 8 years. You'll be hearing the sentence quite a lot in in the next 10 minutes of my opening speech. 2:22 2 minutes, 22 seconds In Q4, advances are grown by 18% on a year-on-year basis and 6% in the sequential quarter. 2:30 2 minutes, 30 seconds deposits have grown by 21% on a YUI basis and 7% in sequential quarter. 2:39 2 minutes, 39 seconds We continue to ensure that the deposit growth outpaces the advances growth. 2:44 2 minutes, 44 seconds The good part of the deposit growth is that the granularity of the portfolio continues to improve. Top 20 ratios well 2:51 2 minutes, 51 seconds under 7% 655 again 661 in the previous year. 2:58 2 minutes, 58 seconds Further, this growth is coming at lower costs. 3:03 3 minutes, 3 seconds Cost of deposit in Q4 is 44 basis points lower this year as compared to Q4 of last year. 3:11 3 minutes, 11 seconds The advanced growth is coming from uh chosen products which is secured small ticket and granular 3:20 3 minutes, 20 seconds mortgage corporate gold loan agree tractors KCC construction finance 3:28 3 minutes, 28 seconds educational institution loans have contributed healthily to this particular growth. 3:38 3 minutes, 38 seconds I want to take you through uh some of the commitments made in the beginning of the year. Uh one of which was that the we said that the collanding book at the end of the year would be less than 15%. 3:48 3 minutes, 48 seconds Uh it is at 13.9%. Actually the colling book has decreased in absolute terms between Q3 and Q4. 4:00 4 minutes on net interest margin the uptick continues uh 3.39% 4:07 4 minutes, 7 seconds which we record in in Q4 is uh 12 basis points higher than the sequential quarter and 10 basis points 4:15 4 minutes, 15 seconds higher than the previous period in the same period last year remember we also had a 25 basis point rate cuts full cap 4:23 4 minutes, 23 seconds impact happening in Q4 uh Treasury had a very muted quarter as far as fees concerned concerned as 4:31 4 minutes, 31 seconds expected. But our third party distribution and other fee avenues uh demonstrated a fairly healthy growth 4:39 4 minutes, 39 seconds resulting in a core fee income growth of 198 crores which is the highest ever in the history of the bank. 4:49 4 minutes, 49 seconds Gross NPA coming to the portfolio quality is at 2.45. 4:56 4 minutes, 56 seconds Net NPA is at 89. both of which are at 7 year lows. 5:08 5 minutes, 8 seconds Our fullear credit cost is 40 basis points. 5:12 5 minutes, 12 seconds I want to hark back to the Q1 guidance in which I said we had we had a 59 basis 5:19 5 minutes, 19 seconds points uh credit cost in Q1 and had assured uh that there's no way we're going to be higher than 45 basis points 5:27 5 minutes, 27 seconds credit cost for a year and we clocked in 40 our upgrades in recoveries during this 5:34 5 minutes, 34 seconds quarter was 109% of fresh slipage our absolute gross NPA of,000 496 crores 5:43 5 minutes, 43 seconds at the end of the year is lower than what it was in the beginning of the year. This is all about the output. What 5:51 5 minutes, 51 seconds gives us confidence going forward is that the slippage ratio is 2.28%. Down from 3.09%. 6:01 6 minutes, 1 second And that can only augur well for the future. As far as the portfolio quality is concerned, 6:08 6 minutes, 8 seconds we continue to improve improve our cost to average assets. Our cost to average assets is for the full year is 2.5%. 6:16 6 minutes, 16 seconds Uh despite taking what we took last in Q3 27 crores because of the new wage code and for Q4 the cost to average 6:24 6 minutes, 24 seconds assets is 2.47. 6:28 6 minutes, 28 seconds Our cost to income ratio has decreased by three basis 300 basis points. 6:35 6 minutes, 35 seconds last year compared to this year. In November during our investor day, many of you were kind enough to attend. We 6:42 6 minutes, 42 seconds had reiterated quite a lot of things. Uh we retained our stance of changing our mortgage mix of home loan and business 6:52 6 minutes, 52 seconds loan, improving our average ticket size, increasing direct sourcing visa va. 6:59 6 minutes, 59 seconds We see the benefits of these flowing in. 7:01 7 minutes, 1 second Our employee productivity is historically the highest. 7:05 7 minutes, 5 seconds Uh our opics cost increases are marginal. Remember 16% growth in incomes 11% growth in expenses 7:14 7 minutes, 14 seconds widening jobs. Uh we were able to drop moderately on the yield and advances due to the rate cuts to a certain extent by 7:22 7 minutes, 22 seconds the gains on yield on account of the mix change. 7:26 7 minutes, 26 seconds uh over the year Q4 of last year was Q4 of this year the yield in advances has decreased by 56 basis points despite we 7:36 7 minutes, 36 seconds having a 100 basis point rate cut applicable for this financial year 7:43 7 minutes, 43 seconds in Q4 our ROE is 97 and our ROE is 13.53%. 7:51 7 minutes, 51 seconds The fullear ROE is 12.77, the highest 7:58 7 minutes, 58 seconds in the last 11 years. In fact, it's the highest ever since the bank became a full taxpaying entity. 8:07 8 minutes, 7 seconds Uh that's all of the past on the go forward basis. 8:11 8 minutes, 11 seconds The fundamentals of business are that we swed and harvested for several years are continuing to bring in consistent, predictable, repeatable outcomes. 8:20 8 minutes, 20 seconds confident that that it should continue in the future as well. 8:25 8 minutes, 25 seconds Uh there are clouds on the horizon uh on account of West Asia crisis. We've been cautious. 8:32 8 minutes, 32 seconds We have overstocked on our liquidity. 8:35 8 minutes, 35 seconds We've done detailed assessment and we don't see any immediate impact on the 8:42 8 minutes, 42 seconds portfolio performance. But again depends upon how long this imbug lasts. 8:48 8 minutes, 48 seconds Uh that's it. Now I'll leave the floor open for questions or clarifications. Operator, could you come in please? 8:55 8 minutes, 55 seconds Thank you very much sir. We will now begin the question and answer session. 9:01 9 minutes, 1 second Anyone who wishes to ask a question may press star and one on the touchstone telephone. 9:07 9 minutes, 7 seconds If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. 9:16 9 minutes, 16 seconds Ladies and gentlemen, we'll wait for a moment while the question Q assembled. 9:26 9 minutes, 26 seconds First question is from the line of Akshhat Agarwal from Smith Institutional Research. Please go ahead. 9:34 9 minutes, 34 seconds Good evening sir. Thanks for the opportunity and congrats on a good set of numbers. Uh my first question uh my first question is on margins. uh 9:42 9 minutes, 42 seconds NIMS have continued their robust support upward trajectory and previously guided for benefits from the deposit repricing 9:49 9 minutes, 49 seconds to continue until Q2. So if you can get some color on the repricing benefit which is still pending and how is the 9:56 9 minutes, 56 seconds bank progressing on HL2BL incremental sourcing is it still 6040? 10:03 10 minutes, 3 seconds uh well uh see we expect the deposit repricing benefit to come till late Q2 10:11 10 minutes, 11 seconds perhaps early Q3 uh that that that's it not beyond that okay so that's the 10:17 10 minutes, 17 seconds answer to your first question uh HL2BL is much more than that it's like we are 10:25 10 minutes, 25 seconds almost 7030 and that's really helping us it's helping us in terms of uh uh you 10:31 10 minutes, 31 seconds know yield it is helping us in terms of uh credit cost and the fact that we have also gone slightly higher ticket size 10:40 10 minutes, 40 seconds has uh helped the cost consistently uh and that that possibly is reflecting in the new slippages uh coming down from 10:49 10 minutes, 49 seconds 3.09 to 2.28 to it. It's certainly a part contributor to that. 10:55 10 minutes, 55 seconds Right. Sir, h in terms of asset quality which continues to be very strong. Uh do you expect this trend uh to sustain or 11:03 11 minutes, 3 seconds should we anticipate normalization towards your uh through the cycle guidance of 45 to 55 uh the business 11:10 11 minutes, 10 seconds model guidance uh uh barring this West Asia conflict. 11:16 11 minutes, 16 seconds See as of now we sticking to the 40 be below 45 bits. Okay, we don't see see 11:23 11 minutes, 23 seconds currently we're at 30 32 33 bits. Uh I don't see us in the short term getting 11:31 11 minutes, 31 seconds increasing anywhere around the 45 basis points mark and our model continues to be 45 to 55. So, so fairly strong on 11:41 11 minutes, 41 seconds that and uh I would expect uh similar trend to continue. There's no reason to believe that in the short term we would have any reversal coming through. 11:52 11 minutes, 52 seconds Very well sir. Uh in terms of fee growth which has been uh very strong for many quarters now and with the latest quarter 11:59 11 minutes, 59 seconds at 9% uh what are the key drivers for this quarter and how should we see sustainability going forward? Is this 12:06 12 minutes, 6 seconds still a third party distribution or is there some other drivers? Uh so if if you can help with some color, sir. Thank you. 12:15 12 minutes, 15 seconds It's the same. See the leopard never changes spots. We don't we like that. We don't nothing happens all of a sudden. 12:22 12 minutes, 22 seconds So we continue to be uh you know uh uh high high on third party distribution. 12:28 12 minutes, 28 seconds Forex income is uh decent. Uh trade is our area of of concentration. The repeatability of income is something 12:36 12 minutes, 36 seconds which we are uh which we are focusing on. Um uh treasury gave us nothing in Q4 nothing. Uh and we expect that trend 12:44 12 minutes, 44 seconds possibly to continue. So core fee income is a key driver for uh fee going forward. 12:52 12 minutes, 52 seconds Uh right sir and my last question is on uh branch expansion headcount. So what's your outlook going forward? uh I understand you did 11 11 branches in 4Q and employees around 400 on net basis. 13:04 13 minutes, 4 seconds So how should we think about investments on this front going forward? 13:08 13 minutes, 8 seconds See uh yeah if you see the number of employees if you see a U-shaped coming through so we if you were to see the 13:16 13 minutes, 16 seconds number of employees that we have in let me get the year right uh 24 13:24 13 minutes, 24 seconds uh uh you know you you see that or rather September of 20 13:30 13 minutes, 30 seconds 24 uh we had 11,900 people. We still are lower than that, but I expect uh us to 13:37 13 minutes, 37 seconds hit a 13,000 kind of number by the end of this particular year. We're still a peopledriven business. A lot of our 13:44 13 minutes, 44 seconds sales are assistant sales. So there will be more people coming in. Branches are optional. I mean, we don't necessarily need to have more branches to grow. 13:55 13 minutes, 55 seconds People are required. But having said that there is a very high probability that we'll cross a faded branch barrier or rather mark during this year. 14:07 14 minutes, 7 seconds Very well sir. Thank you very much for answering all my questions. All the best. Thank you. Thank you. 14:16 14 minutes, 16 seconds Next question is from the line of path mutka from 361 capital. Please proceed. 14:24 14 minutes, 24 seconds Yeah. Uh hi sir. Thank you a lot for the opportunity. Uh so my first question my first question is again uh you know if I 14:33 14 minutes, 33 seconds sorry to interrupt Mr. Pat your voice is breaking. 14:43 14 minutes, 43 seconds I'm so sorry. I don't know if you can hear me but uh we just can't hear you. Uh Mr. Pat. 14:51 14 minutes, 51 seconds Yeah. Yeah. Yeah. Can you hear me now? 14:52 14 minutes, 52 seconds Yes. Yes we can hear you now. Please proceed. 14:55 14 minutes, 55 seconds Yeah. Yeah. Yeah. Okay. So, uh so uh my question wasn't marked. If I look at your Elon advances is flat quarter on quarter. Uh uh you know cost of funds have declined slightly. 15:06 15 minutes, 6 seconds Uh uh you know uh uh the liquidity on the balance sheet has uh you know gone up quarter on quarter. uh uh so so uh 15:14 15 minutes, 14 seconds you know uh uh so so ideally margins should have been uh you know not improved by 12 bits or or should have improved marginally is what the 15:23 15 minutes, 23 seconds calculation suggest. Uh so are there any one-offs in the margins? 15:27 15 minutes, 27 seconds No, there are no one-offs involved. We don't we're not a one-off business. We you can't be in a retail environment and 15:34 15 minutes, 34 seconds have one-offs. What you could have is skews at the at the month end. the the liquidity buildup could be towards 15:42 15 minutes, 42 seconds towards the end rather than the other way around. Uh uh one of the key factors 15:49 15 minutes, 49 seconds in in NIM is a quality portfolio. If you recover 109% of your fresh slippage, it is bound to have an impact not only on 15:57 15 minutes, 57 seconds the NNPA uh the GMPA but also on your NIM. 16:02 16 minutes, 2 seconds Okay, fair enough. Okay. And my second question was uh the cost to assets you know considering for the full year we are at around 2.45 16:11 16 minutes, 11 seconds uh what is the for the full year we are at 2.5 for the quarter we have 2.4 16:18 16 minutes, 18 seconds okay so so what is the further uh you know further juice left here or or you know or what will lead to the further 16:26 16 minutes, 26 seconds improvement of phosetss from here on uh or or it will be stable at around these levels. See this is a bit like the 16:35 16 minutes, 35 seconds earlier question which was asked on uh on on credit cost. Uh model suggest 45 bits to 55 bits of credit cost. Model 16:42 16 minutes, 42 seconds suggest you know 2.5% of cost to average. Reality we are 16:48 16 minutes, 48 seconds slightly better than that. Uh I mean we very happy at 2.5 and remember there is going to be an 16:56 16 minutes, 56 seconds increase in the number of people which will al also result in more productivity. There's already been one. 17:00 17 minutes So there'll be a linear increase through the year of number of people. So so okay those investments are critical uh and 17:09 17 minutes, 9 seconds and despite that we are reasonably confident of a 2.5% cost to average going through. Okay, perfect. Okay. And 17:18 17 minutes, 18 seconds just one last question if I can squeeze in uh you know so because you know the war was persisting uh you know large 17:24 17 minutes, 24 seconds part of the March month have you tweaked any of your risk filters while sanctioning and dispersements 17:32 17 minutes, 32 seconds uh to uh you know your MSNE customers. I I think uh we were 17:39 17 minutes, 39 seconds lucky more than we we we never predicted this but going up the ladder of ticket size. It was meant to be an operational 17:48 17 minutes, 48 seconds operation productivity excite that has resulted in in in lower bounces. Uh we we sacrificed a bit of a yield but we're 17:57 17 minutes, 57 seconds getting better quality customers and that's reflecting in fresh slippages being being better. And all these things happened much before the war actually 18:06 18 minutes, 6 seconds manifested. So now you know it see if this continues it'll affect everybody 18:14 18 minutes, 14 seconds but people at the lower end of the economic uh pyramid will get impacted more. So there's not a specific problem 18:21 18 minutes, 21 seconds we'll have. If hydrocarbon prices go up, everyone is going to get affected. uh and the effect will be largely felt by 18:29 18 minutes, 29 seconds people who do not have the security of a or a cushion to to to to take care of 18:36 18 minutes, 36 seconds this extra expense will hit their monthly bills. So, so I would tend to think that reprofiling and going up the ticket ticket size about a year and a 18:45 18 minutes, 45 seconds half back is uh helping us compared to where uh we would have been had we not moved the needle. But it's I mean not 18:54 18 minutes, 54 seconds this is not a reaction to the war at all. Uh it just so happened that it it helps us that we done these things much beforehand. 19:04 19 minutes, 4 seconds Sure sir. Thanks a lot sir. You're welcome. Thank you. 19:11 19 minutes, 11 seconds Next question is from the line of MB Mahes from Kotak Securities. Please go ahead. 19:19 19 minutes, 19 seconds Hi. Uh just two questions from my side. 19:21 19 minutes, 21 seconds Um when you speak to your collection teams and when they're reporting such strong numbers. Um would you would you ask this on the ground that their 19:30 19 minutes, 30 seconds leverage levels of the borrowers have come down, their access to credit has improved. Um what is the what is the 19:38 19 minutes, 38 seconds general feedback as to what constitutes a better recovery? Number one. Uh second one is that if assuming that we are into 19:46 19 minutes, 46 seconds this slowdown and there is a slowdown in the next uh 6 to9 months would you say that the book today is better than where 19:54 19 minutes, 54 seconds it was in 2023 when we had the slowdown led by unsecured loans and MFI or would you say that the book is broadly the same? 20:05 20 minutes, 5 seconds Uh I I think uh let me ask you a first question first. So what has really happened is uh uh if you were there in 20:14 20 minutes, 14 seconds the investor day presentation uh I made the statement saying that we moved from managing NPA to managing one DPD as in 20:23 20 minutes, 23 seconds one days past due. Okay. Uh and and when we made the statement we already implemented that. So, so we did put in 20:32 20 minutes, 32 seconds more people. We we we significantly improved our early bucket collection. Uh the intensities increased significantly 20:41 20 minutes, 41 seconds and and what you see in uh March is the result of those activities which is in somewhere around June July and then persisted with it. That's the way I see 20:49 20 minutes, 49 seconds it. So it's more of intensity uh it is more of uh uh you know uh more of focus 20:57 20 minutes, 57 seconds in the earlier buckets which we were not really focused upon. Uh otherwise your slippage ratio would never have come down. I mean you could have any kind of 21:05 21 minutes, 5 seconds recovery 109% recovery which will help the NNPA most certainly but that will not help 21:13 21 minutes, 13 seconds the slippage. One particular uh uh uh metric you can look at is for 21:20 21 minutes, 20 seconds the first time we're given slippages of gold loans separately. Okay. In the investor presentation. Uh now that 21:28 21 minutes, 28 seconds clearly is an indicator of the of the pressure in the market because we don't do early bucket collection in gold. It's 21:36 21 minutes, 36 seconds not it's not worth our while, right? Uh because because the gold is there. white call on the 30th day and that's an operational cost. So there's a natural 21:45 21 minutes, 45 seconds delinquency which we see on the go loan and I would tend to imagine that as a reasonably good barometer uh for for the 21:55 21 minutes, 55 seconds pain at the lower end of the uh the pyramid and if you were to look at that page 22:03 22 minutes, 3 seconds number uh page number I think it is uh uh 26 okay the bottom left hand corner 22:11 22 minutes, 11 seconds you can see there's marginal improvement I'll Just read out the number for those people who haven't seen this. It used to be 6.29 a year back. Now it is 5.3 22:20 22 minutes, 20 seconds [clears throat] 22:21 22 minutes, 21 seconds and this is natural repayment or natural uh slippage which really happens. The 22:28 22 minutes, 28 seconds real action happens near NPA rather than rather than in the beginning. 22:36 22 minutes, 36 seconds Perfect. Thank you. and and and answer to the question that you're seeing with respect to the portfolio that you're carrying today versus where you were probably about 2 years back. 22:48 22 minutes, 48 seconds Uh see 2 years back our credit cost was in the region of 3 somewhere about 22:57 22 minutes, 57 seconds somewhere between 38 and 42 currently we are at 04. So what we've done is we have ridden the wave. So if 23:06 23 minutes, 6 seconds history were to repeat we will also repeat the the particular performance. 23:11 23 minutes, 11 seconds So you see marginal increase in our credit cost still will be below 45 bits. 23:18 23 minutes, 18 seconds But it's a very strange statement to make because if freight prices were to shoot up uh post and you know the you 23:28 23 minutes, 28 seconds could see a situation whereby inflation really really is impacted. 23:34 23 minutes, 34 seconds Second order issues of prochemical oriented products not coming into the 23:40 23 minutes, 40 seconds market could keep the supply chain inefficient. So it is not just about 23:47 23 minutes, 47 seconds inflation alone. It's about you know everybody's impacted. Uh and unlike co you can't throw you can't do quantitative easing and get out of this. 23:56 23 minutes, 56 seconds You will have to and it's not going to be that easy. So but at the moment uh it's good to be in a position where 24:05 24 minutes, 5 seconds your slippage ratios are lower where your NNPS are lower your recoveries are higher is a good place to be in. 24:12 24 minutes, 12 seconds So just to clarify in your assessment when you are looking at those borrowers are you saying uh are you are you seeing 24:19 24 minutes, 19 seconds a situation where those borrowers leverage levels is similar to where they were two years back or they are better or worse? What's your assessment of the 24:28 24 minutes, 28 seconds of the customers that are coming to the pool? So the reason uh I'm not able to give you a straight answer is the customer's stock which we had two years 24:36 24 minutes, 36 seconds back is very different from the customer stock that we having today because because over the last 2 years the kind 24:44 24 minutes, 44 seconds of ticket size of customers that we have onboarded the the kind of profile of customers that we onboarded are are 24:53 24 minutes, 53 seconds different our our uh MFI book has has dramatically come down at one point in time it was 1400 CR book now it is some 25:01 25 minutes, 1 second 600 is it 600 700 600 yeah 600 700 cr book uh so so it's not 25:09 25 minutes, 9 seconds the same I mean while the balance sheet has grown by 20 the customer advances have grown by about 18% the fact remains 25:16 25 minutes, 16 seconds that what they're not that comparable perfect thank you sir thank you for this 25:24 25 minutes, 24 seconds yeah you're welcome thank you next question is from the line of Rohan M from Equida Securities. Please proceed. 25:34 25 minutes, 34 seconds Uh good evening sir. Thanks for the opportunity on good set of numbers. Thank you very much. 25:40 25 minutes, 40 seconds This is on the yields uh e flatish Q on Q and what we had explained earlier in 25:47 25 minutes, 47 seconds the conferences we our book uh on the mortgage especially fixed to floating when we see uh gradual reprising over 25:55 25 minutes, 55 seconds some period. So with repo cuts uh happening uh what has helped at such a yield at this level especially with corporate dispersion is also picking up. 26:05 26 minutes, 5 seconds So have we taken any increase in spreads on incremental lending or what has helped that if you can explain that? 26:11 26 minutes, 11 seconds Yeah. So frankly if you see our co-ending book has come down. Co-ending 26:18 26 minutes, 18 seconds book is a low yield book. It comes at low cost but low yield. So this is a product mix game. So if you see we have 26:25 26 minutes, 25 seconds grown 6% quarter on quarter sequentially and our co-ending book has degrown. 26:33 26 minutes, 33 seconds So the low yielding book has degrown and uh higher yielding book have grown which has resulted in the in incremental yield 26:42 26 minutes, 42 seconds being higher and uh it has absorbed the the 25% uh 25 bips sorry 25 bips uh 26:50 26 minutes, 50 seconds repor rate cut the full impact of which we had in Q4. 26:56 26 minutes, 56 seconds Sure. Uh so secondly uh if you look at slippages X gold it has fallen to 1.5%. 27:03 27 minutes, 3 seconds 1.47 1.47 So just want to get a sense like uh given how the macro is evolving right now and this uncertainity on how how 27:12 27 minutes, 12 seconds things will shape up uh given your interaction with the clients like is this sustainable going into FI27 27:20 27 minutes, 20 seconds especially with negative net slippages if if can this trend continue in FI27? 27:28 27 minutes, 28 seconds Uh very difficult to answer because you know there so many unpredictable unponderables there but uh uh uh you 27:36 27 minutes, 36 seconds know what you see day one is very different from what you see on day two right there is so much of change 27:43 27 minutes, 43 seconds happening which is uh you know which which makes prediction really really very difficult but what I'm confident of 27:49 27 minutes, 49 seconds is that uh I I I don't see our net NPA going back above 1% uh we said that as 27:59 27 minutes, 59 seconds you remember in the Q4 in Q3 call I said we will be below 1%. We are there and we 28:07 28 minutes, 7 seconds we intend to stay there. uh like I said in the opening remark, the benefit is coming through lower slippage, higher 28:15 28 minutes, 15 seconds focus on the early buckets. But if if an customer do does not get the component that he wants to complete his product, 28:25 28 minutes, 25 seconds he will suffer and along with him we also will suffer. We are aware of that. 28:29 28 minutes, 29 seconds So [clears throat] far we are not seeing that happening but that is not a guarantee for the future. 28:35 28 minutes, 35 seconds Sure. And so lastly uh what will drive your NIMS towards your business model NIS target of 350 to 365 and what is 28:44 28 minutes, 44 seconds your time frame expectations around that I see if there is one thing I'm not 28:51 28 minutes, 51 seconds happy in a in a very decent quarter or a decent year for that matter is uh there are so many things which are good one 28:59 28 minutes, 59 seconds thing which I'm not very happy about is uh the current account pickup so we are we are focused on We want to in our S 29:07 29 minutes, 7 seconds growth is 10%. Uh our car growth is flat and that's not a good thing to happen. 29:13 29 minutes, 13 seconds We're putting resources behind it. We're putting effort behind it. We're putting focus behind it. That has to that has to improve. And now if if and practically 29:22 29 minutes, 22 seconds everything that we put focus on, you see an improvement happening. It's time it happens in the current account portfolio as well. So that's one big driver. uh we 29:32 29 minutes, 32 seconds we've really moved the needle on engagement with our savings uh customers. Uh you know there is a there 29:40 29 minutes, 40 seconds is a whole host of uh crossell activities uh happening uh on our asset 29:47 29 minutes, 47 seconds customer base. Uh is it uh still a snowball? It hasn't reached avalanche. 29:53 29 minutes, 53 seconds Uh but sustained efforts over a period of time retail was that way. the good the good work that we've done about a year and a half back you seeing the 30:00 30 minutes result of it now. So we are at it. Uh uh we we just just keep progressing on the right path. Uh trust the process and the results will happen. 30:11 30 minutes, 11 seconds Sure. So thanks thanks for the opportunity. You're welcome. Thank you. 30:20 30 minutes, 20 seconds Next question is from the line of Judra from ICI securities. Please go ahead. 30:26 30 minutes, 26 seconds Yeah. Hi, good evening uh Pravin thanks for the opportunity. 30:30 30 minutes, 30 seconds Yeah, I have few questions. Uh one is uh if I look at your uh uh slippages number 30:37 30 minutes, 37 seconds right so just a broad calculation slippages overall slippages are 2.28 30:44 30 minutes, 44 seconds excluding growth gold is 1.47 47 and gold is 5% roughly and the number somehow does not tally in 30:53 30 minutes, 53 seconds the sense that gold is supposedly less than uh I mean if I do the reverse calculation it looks like gold is 20% of the portfolio to drive that change from 31:02 31 minutes, 2 seconds 2.28 to 1.47 uh these are gross slippages number only right so that is why I'm I'm assuming 31:09 31 minutes, 9 seconds these are gross slippages 1.47 47 and 5% of gold. 31:13 31 minutes, 13 seconds That's right. These are these are actual numbers. If if you I can I can put you 31:21 31 minutes, 21 seconds under my finance folks or collection folks and can have a discussion on that can take you through the the the 31:28 31 minutes, 28 seconds numbers. Uh these are 2.28 is our uh is our slippage. It's come down from 3.09. 31:36 31 minutes, 36 seconds Okay. So that is anyway. So I'll I'll check them offline. Second is sir uh on the growth front right so we have done 31:44 31 minutes, 44 seconds 18% growth which is much faster than the industry uh but somehow um as you also mentioned in the opening remarks this uh 31:51 31 minutes, 51 seconds the coal lending has declined Q and rightly you had highlighted at the beginning of the year also that at some point of time it will it will moderate 31:59 31 minutes, 59 seconds uh but the growth of the core businesses like mortgage uh 10 11% MSN flat or 32:06 32 minutes, 6 seconds negative uh how and as you said uh cool lending I I believe this co-ending is a function of CLM transition. So how 32:15 32 minutes, 15 seconds should we look at the next year going ahead when you know mortgage is 10 11% and MSME is still yet to pick up. Uh and 32:22 32 minutes, 22 seconds so far the support has been coming from little bit that let's look at that it's a good question and and I'm sure my answer will will help a lot of people 32:30 32 minutes, 30 seconds this call kindly look at Q quarter. Okay. 32:36 32 minutes, 36 seconds Look at the quarter and look at the mortgage growth in the quarter. 32:43 32 minutes, 43 seconds You want me to tell you the page number? Yes. 3.8%. Yeah. 32:49 32 minutes, 49 seconds Okay. For for sake of argument, let's say 4%. Okay. 32:54 32 minutes, 54 seconds And and if you were to multiply by four, you're talking about 16. So what what you have seen is while the bank has grown 18% 33:02 33 minutes, 2 seconds uh in this year 24% the last year we have been busy re-engineering the mortgage uh business. Okay we have we 33:10 33 minutes, 10 seconds have really turned it around because that is contributing delinquency that is it is it is it is it is a lower ticket uh issue which was vulnerable. So we 33:18 33 minutes, 18 seconds have really really turned changed the the the the wheels of the train while the train is still moving and you haven't felt it because other products contributed to that particular growth. 33:27 33 minutes, 27 seconds Now what's happening is uh a better BLS skew a better self-sourced versus DSA 33:36 33 minutes, 36 seconds sourced uh mortgage is up and running and and every quarter that growth is better than the previous Q on Q growth. 33:49 33 minutes, 49 seconds So, so what you have seen the 10% of growth that you saw in in the year I would look at it slightly differently 33:56 33 minutes, 56 seconds and say 6.5% was a growth in the first 9 months and 3.5% is a growth in the in 34:02 34 minutes, 2 seconds one single quarter and the the 3.5% of the mortgage book that we're growing in the quarter is of a supremely better 34:09 34 minutes, 9 seconds quality than the than the kind of book that we had a year back. Are you with me? Hello. 34:17 34 minutes, 17 seconds Yes. Yes, sir. This part is understood. 34:19 34 minutes, 19 seconds Yes. So, so clearly there is a there is a takeoff happening on that count. So, my finance 34:26 34 minutes, 26 seconds folks have just come in with some broad math. Uh can I go to the early question? Sure sir. 34:33 34 minutes, 33 seconds All right. Uh so, uh so one sorry Val you want to explain this? 34:42 34 minutes, 42 seconds Yeah. Gold have a weightage of 21% and a slipage of 5.3%. And other than gold 34:49 34 minutes, 49 seconds have a weightage of 79% and a slipage of 1.4%. 34:53 34 minutes, 53 seconds So overall it's coming to at correct. No sir you're right. If the gold weightage is 20% then it the math is absolutely right. But then 35:02 35 minutes, 2 seconds 21.21%. So so that that covers the the the discussion. Okay. So so that's the second question. Now can I ask you a 35:10 35 minutes, 10 seconds question J? Yeah. Yeah. Please sir, do you remember in the investor day we were standing outside and then you told 35:18 35 minutes, 18 seconds me our at that time our uh NNPA was 1.22%. And you told me 35:25 35 minutes, 25 seconds you for a business of our our type you remove the 22 basis points from the from the ROA. Do you remember the conversation? 35:34 35 minutes, 34 seconds Yes. Yes, I do sir. 35:36 35 minutes, 36 seconds Okay. I want to tell you you don't have to do that anymore. We are at 89 bits and congratulations. Yes. 35:42 35 minutes, 42 seconds No, no, no. Once again, I want you to know that and and thank you for it because this this kind of conversation I want to let you know helps us also. So 35:50 35 minutes, 50 seconds now we're at 89 bits. So I just want to tell you that there are not promises. 35:56 35 minutes, 56 seconds The intentions that we say we take it extremely seriously and uh and we demonstrated by by the performance and 36:04 36 minutes, 4 seconds and you'll see that coming through in the next few quarters as well. 36:11 36 minutes, 11 seconds Right sir appreciate. Well appreciated sir. Yes. Right. 36:17 36 minutes, 17 seconds Okay. No sir sorry just to come back. So gold loan proportion is 20 21% but in this table the advances mix the gold 36:26 36 minutes, 26 seconds loan proportion looks like uh you know 78%. So I believe the coal ending plus gold plus it is also somewhere sitting from there. 36:33 36 minutes, 33 seconds Absolutely. Absolutely. See coanding uh we have about 8,300 crores 8,366 crores 36:40 36 minutes, 40 seconds of coending bulk of which is gold and then you have normal gold our own gold of about 4,000 odd crores 36:48 36 minutes, 48 seconds right okay sir and sir then going ahead so mortgage I I take your point sir that 36:56 36 minutes, 56 seconds mortgage has accelerated and maybe it will sustain but if the other piece I mean so far this quarter the growth has 37:04 37 minutes, 4 seconds also been contributed by corporates and MSI institution which may or may not be desirable or you know you can still 37:11 37 minutes, 11 seconds sustain but I'm saying that uh in case of co- lending not being a meaningful contributor to the growth uh which which 37:19 37 minutes, 19 seconds portion will do the heavy lifting apart from so so I just I want to repeat what I said earlier consistently been saying growth 37:28 37 minutes, 28 seconds we had and I would tell you this our colanding growth in 2425 It is not in this book but if you have to look at the previous book it was 108%. 108%. 37:39 37 minutes, 39 seconds This year it is 24.9%. 37:44 37 minutes, 44 seconds That is 25 26 in the current year 26 27 I'm not telling you the percentage but it'll be exactly the same as the overall 37:52 37 minutes, 52 seconds asset growth of the bank. Are you with me? 108 has been brought down to 24.9 and in the in the current year 2728 38:01 38 minutes, 1 second there no sorry 26 27 we will be exact we mean co- lending growth will be 38:10 38 minutes, 10 seconds exactly similar to the overall asset growth of the bank so that's one part of it will it will 38:17 38 minutes, 17 seconds not be zero and it's not even advisable right so that will be the it'll be the steady normal growth happening there uh you will have growth coming coming in 38:24 38 minutes, 24 seconds from the from the from the mortgages uh and and there are some uh impact players like theme MSME uh uh and construction 38:34 38 minutes, 34 seconds finance where a lot of effort has gone into it. The output is yet to come but it'll not remain like that forever. So we'll see contribution coming in from 38:43 38 minutes, 43 seconds from these core segments. uh the agree segment I don't know how fertilizer prices will be affected by this uh you 38:50 38 minutes, 50 seconds know uh this this West Asia crisis but assume that life is normal I would tend to think 38:56 38 minutes, 56 seconds that tractors KCC uh growth will happen I'm not a big fan of MFI we do MFI only 39:03 39 minutes, 3 seconds to meet the small farmer marginal farmer uh requirement it's not meant for balance sheet growth or you have to do it you have to do it right the history 39:12 39 minutes, 12 seconds has not grown very very good either for us for industry but yeah so it'll be it'll be the MFI growth sorry the the BC 39:21 39 minutes, 21 seconds MFI growth will be sufficient to meet our small farmer marginal farmer appetite 39:29 39 minutes, 29 seconds so that's the way we see this so so I take I mean I do the math 6% is a quarter and quarter growth you remove 39:36 39 minutes, 36 seconds coending it comes to 8.6% 6%. Non-polenting growth rate 8 point I'm not saying 8.6 39:45 39 minutes, 45 seconds into four I wish I could say that my senior leadership team also sitting here I mean just imagine 8.6 into four then I 39:51 39 minutes, 51 seconds could be leaving home at 4:00 every day right 39:58 39 minutes, 58 seconds and sir any any guidance or I mean you would I think in the end day you had said that you know this 18 20% kind of a 40:06 40 minutes, 6 seconds growth we should be delivering over the next uh I mean that that still remains the broad guidance right in terms I mean 40:13 40 minutes, 13 seconds in these times when there are clouds etc on the horizon uh team uh we we are 40:20 40 minutes, 20 seconds cautious the very very we also we only know the pains of getting 40:27 40 minutes, 27 seconds uh 1.22% NPA uh NNPA to 89 our team is fully aware of the pain of getting a 40:35 40 minutes, 35 seconds 3.32% gross NPA 8 quarters back to 2.45 45. So these are hard and not to talk about slippage, these are hard earned lessons. 40:46 40 minutes, 46 seconds So so we're very confident about about growth, what kind of growth that we want. Uh and uh we we think we are we're 40:53 40 minutes, 53 seconds fairly on a a good track as far as as as far as the portfolio is concerned. 41:00 41 minutes Right. And last question sir on co-ending CLM change uh uh you know correct me my understanding is that it 41:08 41 minutes, 8 seconds has now changed from non-discretionary sorry discretionary to non-discretionary and which is why you may have some 41:15 41 minutes, 15 seconds disruption in the current in the March quarter um has been has that been sorted already or you believe there could be 41:23 41 minutes, 23 seconds some more uh teething issues u when you when you u align towards the new guidelines. 41:30 41 minutes, 30 seconds And what one good thing about the bank Jay? One good thing about the bank is the quality of tech. Okay. I mean that that is one 41:39 41 minutes, 39 seconds one really good thing that we have. So but that doesn't guarantee everything because partners tech also should be uh 41:46 41 minutes, 46 seconds up to up to gear. We we acted pretty much early around September October on this and we got it absolutely right. 41:53 41 minutes, 53 seconds some of the big gold loan players are our uh our partners and it's uh working very well very very well with them and 42:02 42 minutes, 2 seconds and probably you since we all in the finan financial industry you'll be covering them also I I I invite you to even speak to them and figure out how 42:11 42 minutes, 11 seconds this particular thing is progressing we're very comfortable with them they are very comfortable with us and I'm sure some of these guys are part of your 42:18 42 minutes, 18 seconds coverage right no sir just to coming The question is the disruption the transition is over 42:27 42 minutes, 27 seconds and even incrementally uh I mean you said that co- lending will be growing as much as the overall growth so I I would believe that the entire 42:35 42 minutes, 35 seconds transition is over right and there is no more yeah for us see why I'm not giving a straight answer on that is it is over 42:42 42 minutes, 42 seconds for gold it is not over for see we do educational student financing we do that is school financing we do lap we do see 42:51 42 minutes, 51 seconds we keep doing various things So uh so in in in areas of little volume consequences we are a bit slow. So so at a at a bank level is it done fully? No. 43:04 43 minutes, 4 seconds But as far as a gold loan uh is concerned which is a lion share of a coending we are very comfortable. And the reason why gold loan is a lion share 43:12 43 minutes, 12 seconds of coending is because you can you can accurately predict the loss. 43:19 43 minutes, 19 seconds Correct. And does this change anything sir structurally I mean the transition one one is I believe you you may not 43:27 43 minutes, 27 seconds have a discretion in terms of how you how you partner with the partner is there anything also changes or not 43:35 43 minutes, 35 seconds material we had this partnership J okay uh with with one of our partners from 2022 43:44 43 minutes, 44 seconds okay uh he he became he he was that partner was our single largest partner uh until 43:53 43 minutes, 53 seconds February of 2024, right? 43:56 43 minutes, 56 seconds Then we had a second big partner coming through. So we talking about four year history, we're talking about 2year history. 44:04 44 minutes, 4 seconds uh and there is a you know we it's like a full-fledged I mean I I I can do a PhD on co-ending bold coending 44:12 44 minutes, 12 seconds at least right so so that these are kind of relationships and partnerships where we have for a for a for for the for the 44:20 44 minutes, 20 seconds for the co-ending part so I I no I don't see any disruption coming in sorry 44:27 44 minutes, 27 seconds and lastly sir if I may ask uh why is there a seasonality in the fourth quarter Um I mean is this a normal seasonality 44:36 44 minutes, 36 seconds in terms of lower slippages, higher recovery or there is something more fundamental in the product that we have. 44:42 44 minutes, 42 seconds I mean all banks have seasonality which is favorable seasonality in 4Q but for our case looks slightly more pronounced. 44:49 44 minutes, 49 seconds So any any reason or it's like business is recently? Thank you. Our appraisal is in April. 45:00 45 minutes I can't think of any recent J. Sorry. 45:03 45 minutes, 3 seconds Okay. No, no issues sir. Thank you and all the very good sir. Yes. Thank you also. Thank you. 45:10 45 minutes, 10 seconds Next question is from the line of Adita from Securities Investment Management. Please proceed. 45:16 45 minutes, 16 seconds Uh yeah. Hi sir, thanks for the opportunity and congratulations on your set of results. Hi sir much. 45:23 45 minutes, 23 seconds Uh first question was on NIMS. Uh so how should we see the NIM trajectory now from here on? Uh so do you see them 45:30 45 minutes, 30 seconds still improving? uh because while your deposits are still getting repsized uh but your kafa share has been reducing uh 45:37 45 minutes, 37 seconds rates industrywide have been hardening uh and also your reliance on bul deposits have been increasing uh it is 45:43 45 minutes, 43 seconds now 20% of your deposits so how do you see the lens uh for the bank uh going forward 45:50 45 minutes, 50 seconds I I wanted to focus on caution deposit because the ultimate truth uh which is a mixture of the car institutional 45:58 45 minutes, 58 seconds deposits uh uh you uh excess liquidity that we keep for a rainy day all that is reflected in cost deposit. 46:08 46 minutes, 8 seconds Right? So have a look at the trend line of the caution deposit. Uh our our belief is that uh 46:16 46 minutes, 16 seconds if you were to renew as much as we renew normally we should be having some advantage going 46:23 46 minutes, 23 seconds all the way into Q2. After that that advantage will stop. 46:29 46 minutes, 29 seconds uh but that's only part of the story. Uh in the investor day I had mentioned this 46:36 46 minutes, 36 seconds uh and this is public information just do this look at the peak retail term deposit rate of three of the biggest 46:45 46 minutes, 45 seconds private sector bank and three of the biggest public sector banks and come with a composite peak retail 46:54 46 minutes, 54 seconds term deposit rate. compare that with DC banks and see how convergence is happening. 47:01 47 minutes, 1 second This number the difference between the composite rate of this the six largest banks in India and US at one point of 47:08 47 minutes, 8 seconds time was was about 1.27 27 it was89 if I remember right in March it's there in the investor in the in my investor day 47:16 47 minutes, 16 seconds presentation 89 we brought it down to something like 6 uh 6 or 61 47:25 47 minutes, 25 seconds 61 and it's public why we're not doing bul deposit is I'm not aware because many banks don't publish that we do 47:33 47 minutes, 33 seconds right so it it that way it's slightly unequal but this is an indication one is of longerter deposit 47:39 47 minutes, 39 seconds maturity and you're having a benefit of renewal repricing. The second is even 47:47 47 minutes, 47 seconds fresh deposit. This bank used to be a bank which was in the top three of of 47:54 47 minutes, 54 seconds highest interest rate. Uh please look at the websites of of similar sized banks. 48:01 48 minutes, 1 second We are no no longer there. The bank has learned to to sell 48:08 48 minutes, 8 seconds liability products on items other than price also. Price 48:16 48 minutes, 16 seconds still a big big component. I mean we not anywhere where we need to be but uh the reason why people bank with you uh 48:23 48 minutes, 23 seconds earlier used to be the rate today it is changing and it's been a it's been hard work for the last one and a half years. 48:29 48 minutes, 29 seconds our branch bank team has done a fantastic job of of switching it and the proof of the pudding is look at the website look at the website and find out you can 48:38 48 minutes, 38 seconds I don't want to name banks now uh we grown 20.91% uh look at our rates look at similar 48:48 48 minutes, 48 seconds size even bigger sized banks uh if you're not lower than them the distance between the two has dropped so that's 48:57 48 minutes, 57 seconds how we seeing it and Like I told another gentleman earlier, we're really working hard on getting our story on uh current account right. Effort has gone into it. 49:07 49 minutes, 7 seconds Results have not come in yet. But uh we're not people who give up easily. 49:13 49 minutes, 13 seconds Understood. But now sir, I know understand that we have been more aggressive in cutting rates as compared to other banks. But now when I look at 49:21 49 minutes, 21 seconds the deposit growth, uh so that is majorly been uh coming from bul deposits. uh our retail deposits have not been keeping up pace with the 49:29 49 minutes, 29 seconds overall deposit growth. Uh so how do you see that going forward? 49:34 49 minutes, 34 seconds For us uh there are two things which really really matter uh in the order of priority. 49:39 49 minutes, 39 seconds Uh we should be liquid uh being being liquid is not a is not a choice. So that 49:48 49 minutes, 48 seconds pure play liquidity is important. Cost deposit is important. Long tenor is important. 49:54 49 minutes, 54 seconds Now if you meet these conditions frankly if it is is it a is it a s coming in really doesn't matter. Uh there was a 50:03 50 minutes, 3 seconds time when the bank used to give uh 8% rate on on on on savings account. Today I think it gives 6.7%. 50:13 50 minutes, 13 seconds Okay that that's a rate that that the bank gives. Uh there is that's why I 50:18 50 minutes, 18 seconds said you can it's easy to grow bulk saw and show a better kasa ratio. We prefer 50:27 50 minutes, 27 seconds to grow deposits and keep the cost of deposit down. Whereas car is is a is an equal story. 50:36 50 minutes, 36 seconds You can compare car across time. Saw comparing doesn't really make sense because some of the S actually more expens like one day you can put money 50:44 50 minutes, 44 seconds into savings account and get in our bank it's 6.7%. 50:49 50 minutes, 49 seconds So it is is really expensive but it helps in terms of saying publicly kasa ratio is good. I would tend to think you 50:56 50 minutes, 56 seconds should look car and saw separately look at the while we don't publish it. Our saw average weighted average pricing on a saw has come down significantly. 51:08 51 minutes, 8 seconds I mean if if 25 basis point rate cut happened and we we we have reduced our 51:14 51 minutes, 14 seconds uh cost of deposit in Q4 which is a traditionally very liability hungry uh market. It comes because we are getting the right kind of deposit. 51:27 51 minutes, 27 seconds Okay sir. I guess last bit on this deposit part. 51:30 51 minutes, 30 seconds Now uh BCV is generally known for being focused on granularity uh either being on advances or on deposits. Uh now B 51:38 51 minutes, 38 seconds deposits is currently 20%. So is there any percentage beyond which you won't be comfortable growing bul deposits? 51:47 51 minutes, 47 seconds uh like I told you we have to ensure that uh getting if if you get a bulk deposit which is which is of a lower 51:57 51 minutes, 57 seconds rate of interest earlier we were giving it up uh but now we are managing three 52:04 52 minutes, 4 seconds things we're managing granularity we managing ROI and [clears throat] we are also managing 52:12 52 minutes, 12 seconds the uh the the uh the uh uh the sorry the the the the the tenor. Uh so it it is an uneven battle. 52:24 52 minutes, 24 seconds Uh we have we triangulate these three things. Earlier we should take a stand saying that uh even if the rates are 52:30 52 minutes, 30 seconds lower uh we will not take bulk because the uh because the you know it doesn't 52:38 52 minutes, 38 seconds meet our small ticket criteria. But in a time like now when there is chaos 52:45 52 minutes, 45 seconds liquidity is important for us. So it is it is good to have extra liquidity even if it means there is a higher carrying 52:53 52 minutes, 53 seconds cost. So we do have bul deposit. Do we have a number on on on retail retail 53:00 53 minutes term deposit? Yes of course we we we have to grow that. We want to grow that. 53:05 53 minutes, 5 seconds Uh but this is a this is a good buffer to keep for keeping your cost of deposit down. 53:11 53 minutes, 11 seconds Sure. And that's it. Uh and sir on your ROA so for your ROA to improve from here I believe NIMS would be the major uh 53:20 53 minutes, 20 seconds lever for us to grow uh because the credit cost and OEX cost are pretty much under control. Uh and for the NIS to improve from here would cost of deposits 53:28 53 minutes, 28 seconds be the only trigger uh for us to improve our NIS? 53:33 53 minutes, 33 seconds Uh yes uh we we would we don't want to go into a higher yield segment because this is not really the time to go to a 53:41 53 minutes, 41 seconds high yield segment. It comes this sting in the tail. So improvements will come because uh we're keeping a tighter rain 53:49 53 minutes, 49 seconds on the caution deposit and got it. Uh and now sir on this theme book uh this 2,000 kes book uh so how 53:58 53 minutes, 58 seconds big is the threads part because we were looking to degrow that part of the book and how is the book apart from treads uh 54:06 54 minutes, 6 seconds growing for us the ccod part it's not growing so that's why I said we are putting some effort into it it's not 54:13 54 minutes, 13 seconds growing it is stuck where it is uh if I see it's about it's a flat kind of thing quarter on quarter it has decreased by 54:22 54 minutes, 22 seconds about 13% yearon So we're kind of revamping that. Uh we we got a new vertical to look at the 54:29 54 minutes, 29 seconds greater than greater than 3 cr. There's a lot of good customers who are above a particular threshold 3 crores where leaving the bank because it's meant to 54:37 54 minutes, 37 seconds be a small ticket program. We said look that doesn't make any sense. So you're just filling up the uh the bank. So we we have got a new not not no longer from 54:46 54 minutes, 46 seconds July onwards we've been having this channel. It is just getting set and ready. So that's that's where the momentum we see uh happening. The SM 54:54 54 minutes, 54 seconds comeback will happen. Uh treads is about 300 cr book. So hardly any you used to be 300 it continues to be 300. So there's no change. 55:03 55 minutes, 3 seconds Understood. As for this last question uh any uh what is the bank's now position 55:11 55 minutes, 11 seconds on fundraising? Uh we have got an amazing position uh for fundraising. Uh yeah. 55:18 55 minutes, 18 seconds So how is the bank looking? 55:21 55 minutes, 21 seconds We we should be uh in the in the next two next two three quarters or next two quarters maybe right uh maybe either 55:28 55 minutes, 28 seconds late Q2 or early Q3 uh we should be we should be going in for our fundaries 55:34 55 minutes, 34 seconds uh because we see that as a bank we'll be continuing to grow at this kind of pace and if we do continue to grow at 55:43 55 minutes, 43 seconds this kind of pace with a similar kind of portfolio mix probably we'll reach our internal 55:50 55 minutes, 50 seconds uh red flag by Q1 of 2728. We don't want to wait that long. So maybe Q2 and Q3 55:58 55 minutes, 58 seconds begin sir. 56:04 56 minutes, 4 seconds So thanks sir for answering the question. Not at all. 56:08 56 minutes, 8 seconds Thank you ladies and gentlemen. In order to ensure that the management is able to address the question from all the participant in 56:15 56 minutes, 15 seconds the conference, please restrict your yourself to two questions per participants. Should you have a follow-up questions, please rejoin the queue. 56:24 56 minutes, 24 seconds Next question is from the line of Pam Subramanyu from Invest. Please proceed. 56:31 56 minutes, 31 seconds Yeah. Hi, thanks for taking my question and congrat. 56:35 56 minutes, 35 seconds Yeah. Yeah. So uh firstly um on the uh you know the board the enabling 56:41 56 minutes, 41 seconds resolution for the capital wave uh so is that an enabling is it is it just procedural or are we looking at something um and 1500 cr seems the 56:51 56 minutes, 51 seconds largest number yeah maybe I I'd be happy with something like uh some I don't know 1100 1200 odd 57:00 57 minutes cr so so it's good to keep some 1500 core enabling done but uh Yeah, $100 million 57:07 57 minutes, 7 seconds not slightly more maybe somewhere in that particular region. Uh see the thought process behind it is simple. Uh 57:14 57 minutes, 14 seconds take what you need right now at the at the price prevailing at this particular point in time. Our belief is that uh if 57:22 57 minutes, 22 seconds you continue performing like this uh the next race will be at a at a at a different level. So so don't over dilute 57:31 57 minutes, 31 seconds at this point in time. as to what is required to to continue this particular growth momentum and uh and then when the 57:39 57 minutes, 39 seconds next level of expansion happens hopefully soon we'll be raising again at at a slightly different level with uh 57:46 57 minutes, 46 seconds with the fundamental numbers looking even better than what is looking today that that's what is driving the management thought process 57:54 57 minutes, 54 seconds perfect perfect I mean u makes a lot of sense uh secondly on your provision coverage ratio I mean uh this quarter 58:02 58 minutes, 2 seconds it's it's gone up sharply. What level are we broadly comfortable with? Uh 58:08 58 minutes, 8 seconds yeah 78 plus is good and as a company we like to keep those provisions but any 58:14 58 minutes, 14 seconds anything above 75 is okay. Uh but uh if you remember we have some some uh MFI 58:22 58 minutes, 22 seconds loans had gone bad in in the last year Q1 Q2 etc. So we want to ensure that uh 58:30 58 minutes, 30 seconds you know the the the aging provision of that should not stutter us. So we have kind of sufficiently uh ensured provisioning 58:40 58 minutes, 40 seconds in these unsecured uh small ticket micro finance kind of loans uh off of Q1 so that so that there 58:49 58 minutes, 49 seconds is some evenness in the way things will happen going forward. 58:55 58 minutes, 55 seconds Got it. Um and and lastly this is just um so on on the quarter um so your NIM is up 12 basis point right uh uh now uh 59:04 59 minutes, 4 seconds is there some day count or something you know impacting that because uh you know your NI is broadly in line with your 59:11 59 minutes, 11 seconds loan growth and your asset growth right so uh so 12 basis point uptake I'm just trying to reconcile with the quarteronquarter 5% NI growth 59:20 59 minutes, 20 seconds see what I look at is uh instead of worrying about uh you know day count I 59:27 59 minutes, 27 seconds just compare this with Q4 of last year last year Q4 we were 3.29 29. Uh neither 59:35 59 minutes, 35 seconds was last year a leap year nor is this year a leap year. I think so. So you're talking about similar kind of so you if 59:42 59 minutes, 42 seconds you're having 10 bits improvement on NIM uh despite having a 100 basis point repo rate cut impact it's not doing too badly. 59:54 59 minutes, 54 seconds I was looking at the quarter and quarter sort of movement. Yeah. 59:58 59 minutes, 58 seconds at this point right the name of this point but yeah yeah yeah so so I I would I always look at you 1:00:06 1 hour, 6 seconds know Jan 5th March to the Jan 5th March and April May June so that in case there are any any any any abnormalities of of 1:00:13 1 hour, 13 seconds number of days coming into play uh comparison with similar kind of time frame the previous year is a good 1:00:20 1 hour, 20 seconds indicator are we making progress or not perfect uh that's all I had congratulations on the quarter Once again, thank you. 1:00:28 1 hour, 28 seconds Thank you very much. Thank you. 1:00:33 1 hour, 33 seconds Next question is from the line of Akshai Badlani from HDFC Securities. Please proceed. 1:00:39 1 hour, 39 seconds Yeah. Hi, thank you for taking my question. Hi Ash, how are you? 1:00:41 1 hour, 41 seconds Hi, I'm good. I'm good. Thank you. Uh so Pin, just wanted to ask you you mentioned your you know increasing employees headcount to 13,000 from 1:00:50 1 hour, 50 seconds current. So it would be around 13,000 from current. 1:00:53 1 hour, 53 seconds Yeah. So 1,500 addition for the next year. So just wanted to understand in which areas are you looking to add on and how would we ensure that our you 1:01:02 1 hour, 1 minute, 2 seconds know cost to income you know the trend that has been there and we have you know maintained reducing our cost to income how would we ensure that you know in 1:01:09 1 hour, 1 minute, 9 seconds spite of adding employees that we will maintain that run rate. 1:01:13 1 hour, 1 minute, 13 seconds Yeah because we haven't added employees in you know last year or so. Yeah. Apart from we we haven't we kept on adding and we 1:01:24 1 hour, 1 minute, 24 seconds kept on getting red so it is not as if we never added so our exit processor was really sharp and good but uh where I see 1:01:32 1 hour, 1 minute, 32 seconds this coming in is it's not for this year uh we we see practically all all of these folks uh 1:01:41 1 hour, 1 minute, 41 seconds going into the going into the liability and deposit uh acquisition Uh so so we'll put we'll we'll put more 1:01:49 1 hour, 1 minute, 49 seconds people in the in the branches. We'll put more people on the distribution front. 1:01:55 1 hour, 1 minute, 55 seconds Uh I realize there the basic math tells us that between a selfsourcing 1:02:01 1 hour, 2 minutes, 1 second uh sales network on mortgages and their DSA dependent uh uh uh DSA dependent sourcing. 1:02:12 1 hour, 2 minutes, 12 seconds Initially you may feel that uh 2% or 2 and a half% uh to the DSA is cheaper but if you seen that it sticks the loan 1:02:20 1 hour, 2 minutes, 20 seconds sticks with you for 2 years 2 and 1/2 years whereas self-sourcing loans stick with you for six seven you know higher 1:02:28 1 hour, 2 minutes, 28 seconds than 6 years you're getting the benefit the benefit coming through the the BT the balance takeouts are considerably 1:02:35 1 hour, 2 minutes, 35 seconds less you own the customer not somebody else uh so and the credit quality if you 1:02:42 1 hour, 2 minutes, 42 seconds know, of these loans are are really better than what the DSA uh sourced loans are. They are a necessary 1:02:51 1 hour, 2 minutes, 51 seconds I'm trying to find another word for evil. Uh they they are a necessity. We can't live without them. But our dependence has to necessarily come down. 1:03:02 1 hour, 3 minutes, 2 seconds uh so so I don't mind putting in the people there because I will I'm I'm very confident that the team has shown it to 1:03:09 1 hour, 3 minutes, 9 seconds me that that from a longevity perspective from a balance BT out perspective from a from um from a coupon 1:03:18 1 hour, 3 minutes, 18 seconds perspective and a credit perspective these customers over a over the currency loan in our bank are far far better 1:03:26 1 hour, 3 minutes, 26 seconds quality than BSA uh whereas a basic math of two and a half% per per ticket size 1:03:33 1 hour, 3 minutes, 33 seconds uh with a five lakh salary of a of a of a sales executive may initially look like it's a bad call. It is not. I mean 1:03:42 1 hour, 3 minutes, 42 seconds if you know how to run the nonDSA channel. 1:03:47 1 hour, 3 minutes, 47 seconds Sure. Sure. Uh my second question was on the line of uh crossell. So you know the at the analyst day we had indicated of 1:03:54 1 hour, 3 minutes, 54 seconds you know around the DCB Neo cards where you know we would we would like to crossell and even in terms of liabilities like OD facility we we were 1:04:03 1 hour, 4 minutes, 3 seconds you know we were wanting to offer so what progress you know what kind of progress have we made there. 1:04:09 1 hour, 4 minutes, 9 seconds I'm very happy to say that uh not a significant a sizable chunk of the 3.8% 1:04:16 1 hour, 4 minutes, 16 seconds Qonq mortgage growth has come from the branch banking channel. Uh look this is bread and butter for most companies. For 1:04:24 1 hour, 4 minutes, 24 seconds us it is not. So it for for us this is a this is a this is a low hanging fruit. 1:04:29 1 hour, 4 minutes, 29 seconds It just just kind of is kicking in. It should not be news at all. Honestly this should have been the way things should should happen. But anyway let's not 1:04:37 1 hour, 4 minutes, 37 seconds complain. So clearly that that is coming through from the from the branch banking channel less so from the digital channel. Uh so that that's one uh our 1:04:46 1 hour, 4 minutes, 46 seconds credit bureau linked uh uh you know interventions on our liability base is is where these uh lap loans and home 1:04:56 1 hour, 4 minutes, 56 seconds loans are are are coming through. Uh we've been reasonably happy with that. 1:05:00 1 hour, 5 minutes Uh I'm not particularly happy with the level of crossell that we have achieved 1:05:09 1 hour, 5 minutes, 9 seconds so far. Uh but again that is not stopping us from trying. uh there is a treasure within it. It is it is 1:05:16 1 hour, 5 minutes, 16 seconds difficult. It's not it's not an easy thing. Uh but we are we we are at it. It is it is giving us result. So but it's a 1:05:24 1 hour, 5 minutes, 24 seconds I knew it will be a painfully slow process but this it is certainly a painfully slow process but yeah it is directionally is it is it going okay? 1:05:33 1 hour, 5 minutes, 33 seconds Yes. Uh from a from a volume sense it is a bit frustrating at times but but there's no charge. I'll keep at it and 1:05:42 1 hour, 5 minutes, 42 seconds we'll see the benefit of it coming through. 1:05:46 1 hour, 5 minutes, 46 seconds Sure. So, thanks. Thanks for answering my question. Not at all. Thank you. 1:05:53 1 hour, 5 minutes, 53 seconds Next question is from the line of Punit Balani from Talut Capital. Please proceed. 1:06:01 1 hour, 6 minutes, 1 second Oh, hello sir. Am I audible? Oh, you're very much audible. Yes. 1:06:05 1 hour, 6 minutes, 5 seconds Yeah. So firstly on the margins plan like this quarter the firstly if you could explain uh where the 12 bits Q is 1:06:13 1 hour, 6 minutes, 13 seconds coming from and secondly uh if we are looking at uh you know from a next year from a next year perspective uh is it 1:06:21 1 hour, 6 minutes, 21 seconds fair to assume that uh you know uh given that we have a lot of bank deposits and uh I guess uh uh we are doing our 1:06:30 1 hour, 6 minutes, 30 seconds mortgage book pretty well uh despite that we will get some decline from funding costs like we can expect like 1:06:38 1 hour, 6 minutes, 38 seconds margins to be rangebound around these levels because uh you know uh because of these two factors. Any comments on that? 1:06:46 1 hour, 6 minutes, 46 seconds It can happen. I mean can can can it be rangebound in this particular level? 1:06:51 1 hour, 6 minutes, 51 seconds Possible but like I told the gentleman earlier also compare us uh quarteron quarter with the same quarter the previous year. uh if it happens it 1:07:00 1 hour, 7 minutes primarily will be a execution issue uh because uh our our ability to get the 1:07:09 1 hour, 7 minutes, 9 seconds the liabilities at the cost that we want uh is is a journey that we are taking and we're very happy with the first 9 1:07:17 1 hour, 7 minutes, 17 seconds months of that progress. Uh our people have learned that you don't need to be the highest rate or one of the highest rate provider to get liabilities uh into 1:07:26 1 hour, 7 minutes, 26 seconds the bank. So that I would see as a execution risk rather than a strategic risk. So it's 1:07:33 1 hour, 7 minutes, 33 seconds worked very well so far in Q4 if you can get that kind of volume and still keep the the the rates 1:07:41 1 hour, 7 minutes, 41 seconds not talking about the cost the rates the offered rates on the website lower than who we used to have uh uh uh 1:07:51 1 hour, 7 minutes, 51 seconds you know a margin a difference with other other banks who had a margin with it's a good thing going so there is an 1:07:59 1 hour, 7 minutes, 59 seconds institutional resilience building on ability to get cost lower cost in deposit. No way are we near the big big 1:08:06 1 hour, 8 minutes, 6 seconds six or big seven but uh we are not the bank that we were a year and a half back. 1:08:13 1 hour, 8 minutes, 13 seconds Right. Right. Uh and on the growth front like I know you have mentioned in your presentation that you know in three to four years you aim to double the balance 1:08:21 1 hour, 8 minutes, 21 seconds sheet but given the fact that now you have the way you have highlighted that you with the golden book it is already 1:08:28 1 hour, 8 minutes, 28 seconds at a decent base the coending book uh is it fair to assume that growth will be around these levels for the next couple of years or so or you are targeting 1:08:37 1 hour, 8 minutes, 37 seconds still the 20% level plus I think 18 20% is a is a given I mean you Just look at our March 22 liability numbers and multiply by two. 1:08:48 1 hour, 8 minutes, 48 seconds You just multiply our March 22 asset numbers and see where we are. Right. Right. 1:08:57 1 hour, 8 minutes, 57 seconds 29,800 was our asset number in March 22. Today you are 60,000. 1:09:05 1 hour, 9 minutes, 5 seconds Right. you you had your your liability number was 35,000 or slightly 36,000 1:09:14 1 hour, 9 minutes, 14 seconds yeah 3 35,000 in March 22 today you are at uh 72,000 so that's four years and 1:09:21 1 hour, 9 minutes, 21 seconds and that a four year where one year we were recovering from our bank was recovering from co 1:09:28 1 hour, 9 minutes, 28 seconds so getting getting up to speed so in that tough times and we can do that we had a micro finance kind a problem 1:09:36 1 hour, 9 minutes, 36 seconds hitting us DA secured DA problem hitting us despite all this we are managing both the credit quality and the growth uh 1:09:45 1 hour, 9 minutes, 45 seconds these things will happen and that's why we are paid in the first place right to manage these imponderables you know something is going to hit you you don't 1:09:52 1 hour, 9 minutes, 52 seconds know what it is and how well you manage that is the resilience of a of an institution 1:09:59 1 hour, 9 minutes, 59 seconds right right uh okay uh that that's it from myself. 1:10:07 1 hour, 10 minutes, 7 seconds Oh, thank you very much. 1:10:09 1 hour, 10 minutes, 9 seconds Thank you ladies and gentlemen. We will take this as a last question for the day. I now hand the conference over to Mr. Pravin 1:10:16 1 hour, 10 minutes, 16 seconds Kouti for the closing comments. Over to you sir. 1:10:20 1 hour, 10 minutes, 20 seconds Uh thank you very much for your attention and watch the space 90 days from now. 1:10:28 1 hour, 10 minutes, 28 seconds Thank you sir. On behalf of DCB Bank that concludes this conference. Thank you all for joining us and you may now disconnect your lines.