Equitas Small Finance Bank Limited — Q1 FY26

Equitas Small Finance Bank Ltd Q1 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=57ZvS7ZRpvQ Published: 9 months ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to Iquitus Small Finance Bank Limited financial performance for Q1 FY26 earnings conference call. 0:14 14 seconds We have with us today Mr. Pen Vasuan MD and CEO Mr. Balaj Executive Director 0:23 23 seconds Technology and Operations Mr. Shridharan N CFO Mr. Mr. Jagdish J 0:30 30 seconds head of assets Mr. Murali Vedinatan senior president and country head branch 0:37 37 seconds banking liabilities product and wealth Mr. Gopal Krishnan G head treasury Mr. 0:44 44 seconds Their mohan head strategy. As a reminder, all participant lines will be in the listenon mode and there will be 0:52 52 seconds an opportunity for you to ask questions after the presentation concludes. 0:58 58 seconds Should you need assistance during this conference call, please signal an operator by pressing star 10 on your 1:07 1 minute, 7 seconds touchstone phone. Please note that this conference is being recorded. 1:14 1 minute, 14 seconds I would now like to hand the conference over to Mr. Pen Vasu Devan. Sir, thank you and over to you sir. 1:24 1 minute, 24 seconds Thank you. Good evening to all of you and thank you for taking your time out to attend this call. Um uh I would also 1:31 1 minute, 31 seconds like to take the pleasure of inviting our chairman Mr. Anil Kumar Sharma for this call. We had a board meeting in 1:37 1 minute, 37 seconds Chennai today and he was here and so he is uh he's agreed to participate in this call. So he is also present in this room today. Uh welcome and thank you sir. 1:49 1 minute, 49 seconds Now let me give a brief of what happened in the first quarter and how do we see it moving forward. uh we had a peop of 1:57 1 minute, 57 seconds rupees 316 crores for the first quarter and the provisions as per the existing norms were rupees 281 crores which would 2:06 2 minutes, 6 seconds have resulted in a part of about 26 cr for the quarter. However, we have made two extra provisions namely one being 2:14 2 minutes, 14 seconds increase in provisions in various NPA buckets to strengthen the PCR ratio and the other being a management overlay in 2:22 2 minutes, 22 seconds terms of standard asset provisioning for micro finance. This has led to a loss for the first quarter. This is the first 2:30 2 minutes, 30 seconds time since 2008 uh that we have reported the loss and hopefully the last time too. The thought behind creating a 2:38 2 minutes, 38 seconds management overlay provision and increasing the provision norms was to speed up the credit cost cycle and showcase the new equitas going forward 2:47 2 minutes, 47 seconds without the current drag uh on the system. In micro finance, it was expected that the stress levels might taper down in the beginning of this 2:55 2 minutes, 55 seconds financial year. However, it now looks like that the collection efficiency may come back to reasonable levels only by the third or fourth quarter of this 3:02 3 minutes, 2 seconds financial year. This is what has led us to take the call to upfront provision buffer so that we can look forward to a more normal quarter in the later part of 3:11 3 minutes, 11 seconds this financial year. We have started calibrated lending and micro finance balancing the long-term goal of reduced 3:17 3 minutes, 17 seconds dependency on micro finance and the short-term goal of improving collection efficiencies. The discipline in lending 3:25 3 minutes, 25 seconds based on the men guard rail is expected to improve the quality of new portfolio getting created. While a separate team 3:32 3 minutes, 32 seconds for over overdue collections has been put in place, case loads for Xbucket also is being reduced to improve both 3:40 3 minutes, 40 seconds collection efficiency and servicing of existing clients. 3:45 3 minutes, 45 seconds We had implemented the min guardrail 2.0 zero from Jan 25 out of the portfolio created between Jan to June of 25 the 3:54 3 minutes, 54 seconds expected efficiency is about 99.6% 6% which is more or less what we used to have before this whole crisis started 4:01 4 minutes, 1 second sometime in the first week first quarter of last year. We have been in the MFI space now for about two decades with a 4:08 4 minutes, 8 seconds high vintage staff right from branch manager and above who have seen multiple good and bad times over these years. The 4:15 4 minutes, 15 seconds initiatives taken both at our bank and industry level should help reach acceptable levels of normaly in the months to come. 4:25 4 minutes, 25 seconds Karnataka and Tamil Nadu have passed acts to prevent coercive recovery practice by lenders. These acts are not 4:32 4 minutes, 32 seconds applicable to banks. However, at the ground level, there has been a swill effect on banks too in the lower end of the small ticket loan against property. 4:42 4 minutes, 42 seconds This was visible a few quarters back and we had taken certain proactive measures. 4:47 4 minutes, 47 seconds We don't anticipate further stress to build in the segment we operate especially given that we don't operate in the below three lakh rupee lap 4:55 4 minutes, 55 seconds segment which we stopped sometime last year's I guess somewhere around November or so we stopped less less than three 5:02 5 minutes, 2 seconds lakh rupee loans and we also taken some proactive steps in terms of tightening our norms for certain segment of 5:09 5 minutes, 9 seconds borrowers diversification strategy which was started back in 2011 holds good and has 5:17 5 minutes, 17 seconds helped us achieve a secured advance book of about 90% as of first quarter. The secured book is also fairly diversified 5:24 5 minutes, 24 seconds in terms of different product categories with new products turning profitable and MFI likely to get back to normal soon. 5:32 5 minutes, 32 seconds We expect to deliver decent return on equity in the quarters ahead. On the deposit front, we have revised our rates 5:39 5 minutes, 39 seconds across products and slabs both in savings and TD. We should see cost of funds moderating in the coming months. 5:46 5 minutes, 46 seconds The rupees 500 cr of tier 2 that we raised in July 25 will of course dampen this a little bit but directionally we 5:54 5 minutes, 54 seconds will see cost of funds coming down over the rest of the year. We have about 90% of our fixed our loan book under fixed 6:01 6 minutes, 1 second rate loans in a declining interest rate scenario we expect to benefit. We have registered a growth of 8% in advances 6:09 6 minutes, 9 seconds for the first quarter and expect to end the year with a growth of about 15 16%. 6:15 6 minutes, 15 seconds Jagdesh will go into further details on his plans of how he will go about achieving this. As we know one of the S 6:22 6 minutes, 22 seconds sobs has got a in principal license to convert into a universal bank yesterday. 6:27 6 minutes, 27 seconds This well for the SB industry as it lays down the direction in which SFBs could potentially proceed going forward. I 6:36 6 minutes, 36 seconds would like to conclude by saying that we have tried to be prudent in terms of upfronting possible stress of the next 6:42 6 minutes, 42 seconds few quarters and with most indicators trending better we expect to get back to our normal levels of performance soon. I now hand over to Srar CFO. 6:56 6 minutes, 56 seconds Good evening everyone. Thank you for joining us today for the Q1 FI26 earnings call of ETA Small Finance Bank. 7:04 7 minutes, 4 seconds Our net interest income and other income for the quarter was 786 crores and 286 crores respectively. Our yield advances 7:13 7 minutes, 13 seconds adjusting for securization and other offbook items dropped by 44 bits on YNY basis on account of drop in micr finance 7:22 7 minutes, 22 seconds mix. Our net interest margin stood at 6.55% down from 7.9% last year largely due to 7:30 7 minutes, 30 seconds contraction in the micro finance portfolio is currently at 9 9% in Q1 FI26 as again 17% in Q1 FI25 7:40 7 minutes, 40 seconds treasury income has majorly contributed to other income segment with Y increase of 321% resulting in net net income 7:49 7 minutes, 49 seconds of,71 crores with yearon year of 8%. The total opex increased by 16% Y on Y on 7:57 7 minutes, 57 seconds account of employee expenses related to bonus and annual. 8:01 8 minutes, 1 second This quarter we reported a loss of 220 224 crores primary driven by the additional provision which we have made. 8:10 8 minutes, 10 seconds While this affects our short-term profitability, it strengthens our balance sheet and prepare us for a sustainable growth. Despite these 8:18 8 minutes, 18 seconds challenges, our POP remained healthy at 315 crores on Q1Q basis reflecting the 8:25 8 minutes, 25 seconds underlying strength of our core operations. Our GNP stood at 2.82% and NNP at 95%. 8:35 8 minutes, 35 seconds The provision coverage ratio remains robust at 67.03% and we expect the credit cost to taper down by Q4 FI26. 8:46 8 minutes, 46 seconds Gross advances grew 8% Y on Y to 37,610 cr while micro finance contracted by 8:53 8 minutes, 53 seconds 41%. Our non MFI book grew 18% Y on Y led by 22% growth in small business 9:01 9 minutes, 1 second loans and 50% growth in used car finance. On the liability side, total 9:07 9 minutes, 7 seconds deposits grew 18% Yony to 44,379 crores. Our Kasa ratio remains stable at 9:15 9 minutes, 15 seconds 29%. And retail deposits now form 73% of our deposit base. We launched FCNR 9:23 9 minutes, 23 seconds deposit this quarter, garnering over 3 million US and continue to deepen our retail franchise. As of June 30, 2025, CR C stood at 20.48%. 9:37 9 minutes, 37 seconds During July 25, we have raised a second branch of 500 crores of tier 2 capital. 9:43 9 minutes, 43 seconds This additional tier 2 capital will improve the car by about 1.7% taking the 9:50 9 minutes, 50 seconds overall car to about 22%. Our capital adequacy remains strong and we have received shareholder approval to raise,250 9:58 9 minutes, 58 seconds cr in tier 1 equity to support future growth. Thank you once again for your continued support and trust. Uh I would 10:06 10 minutes, 6 seconds like to hand over to Mr. Jagdish our head of affairs for his commentaries. 10:17 10 minutes, 17 seconds Thank you Sura. Good evening everyone. 10:20 10 minutes, 20 seconds We have closed the quarter with gross advances of 37,610 crores reflecting an year growth of 10:26 10 minutes, 26 seconds 8%age. Importantly, our secured book contributes 90%age which is our non-micro finance portfolio has grown 10:33 10 minutes, 33 seconds healthily by 18%age year on year and now stands at 34,73 crores. Among the uh 10:41 10 minutes, 41 seconds secured book, our small finance small business loans, which is our flagship product, reached 16,67 crores with 10:50 10 minutes, 50 seconds 22%age yearon-year and 2.5%age quarteron quarter growth. Within our small business loans, our microlab 10:58 10 minutes, 58 seconds product has shown an exceptional momentum growth of 51%age year-on-year growth. And coming back to vehicle finance, we have grown by 12%age yearon 11:07 11 minutes, 7 seconds year to 9,510 crores. Among the vehicle finance, used cars grown by 50%age year on year and used commercial vehicles 11:16 11 minutes, 16 seconds grown by 26 percentage. We continue to focus on used commercial vehicles and 11:22 11 minutes, 22 seconds used cars while statically reducing the exposure to NCV new commercial vehicles. 11:29 11 minutes, 29 seconds Our housing book stands at 4,868 growth with a growth of 12%age year on year and 11:36 11 minutes, 36 seconds 2%age quarteron quarter. And our MSE finance assumes strong traction growth 11:42 11 minutes, 42 seconds of 37%age year on year to,696 crores and micro portfolio is at 3,537 11:50 11 minutes, 50 seconds crores with a decline of 41%age year on year and 22%age quarteron quarter. On the digital print, our selfie loan app 11:58 11 minutes, 58 seconds has gained good traction with 437 crores dispersed in quarter 1. 12:04 12 minutes, 4 seconds The yield on gross advances declined by 29 bits quarteron quarter primarily due to the elevated delicquencies and 12:12 12 minutes, 12 seconds contraction in the micr finance portfolio. 12:15 12 minutes, 15 seconds Looking ahead the July dispersments already reached,582 crores well above the quarter 1 monthly average of,170 crores indicating a strong start to Q2. 12:27 12 minutes, 27 seconds To support the growth in secured advances, we have planned to add 15 new branches and also to add more manpower to deepen the penetration in the existing branches. 12:37 12 minutes, 37 seconds And for the current financial year, we are looking at a growth of close to 15 to 16%age 12:45 12 minutes, 45 seconds yearon-year growth in the overall asset book including MFI. This can be done. We are already growing at 18%age in our non 12:52 12 minutes, 52 seconds micro finance book. So we are looking at a growth of 20%age plus yearon-year growth in from our secured book 13:00 13 minutes and also having a calibrated approach on our dispersement for micro finance where the the degrowth of 41 for the Q1 will 13:08 13 minutes, 8 seconds be calibrated to a degrowth of close to 15 to 20%age year on year and regarding the asset quality there was a signs of 13:16 13 minutes, 16 seconds recovery in the month of July our microfundance 1 to90 DPD improved to 7.09%age 09 percentage in July and 13:23 13 minutes, 23 seconds non-micro finance portfolio DPD also improved to 9.29 thereby improving the overall DPD trend for the bank in July 13:32 13 minutes, 32 seconds and also on the slipages part our non MFI net slipage reduced to 2.04%age in July from 2.67 67 in Q1. So we are 13:41 13 minutes, 41 seconds strengthening our collection framework by establishing a dedicated vertical for overview and NP recoveries with early signs of recovery in the state segment 13:49 13 minutes, 49 seconds and enhanced field level efforts. We anticipate a improved credit demand and collection efficiency in the coming quarters. Thank you. I hand over to Mi. 14:05 14 minutes, 5 seconds Good evening friends. 14:08 14 minutes, 8 seconds As you would have seen in a presentation, uh we have uh reasonably uh a good quarter in terms of RTDLE 14:17 14 minutes, 17 seconds retail franchise growing and backed by current account and current account is backed by ASBA as a proposition where we 14:25 14 minutes, 25 seconds are you know getting into the insta as a solution and then we have savings account which is predominantly led by 14:33 14 minutes, 33 seconds mass affluent and NRS segment. So I think overall our trajectory of keeping our focus on on digital is helping us to 14:41 14 minutes, 41 seconds uh garner mass affluent and that is our elite proposition and to strengthen elite at this point of time we are going to launch two more products in the 14:49 14 minutes, 49 seconds coming month which is to take care of semi-urban and rural setup as well as one onto the uh HNI plus as a segment 14:57 14 minutes, 57 seconds which we are going to call elite light and elite plus and that kept aside we also have strengthened our AD1 proposition through SCNR now and we are 15:04 15 minutes, 4 seconds on road map towards building our inward outward as well as prepaid forex during the quarter two. Now these are all 15:11 15 minutes, 11 seconds important proposition at the uh level of institution and at the level of customer who actually is expecting range of 15:18 15 minutes, 18 seconds products. Today we have a entire range and gamut of liability products ranging from saver savings account and TD both showing us 18 and uh stable kasa ratio. 15:30 15 minutes, 30 seconds Then we have backed with SIP if you see the AM growth year on year we are at close to 3740%. 15:35 15 minutes, 35 seconds And that is also helping us to cater into protection that is insurance which is giving as the steady inflow in terms 15:42 15 minutes, 42 seconds of health general and life. So our proposition towards favor in terms of relationship management and investment 15:50 15 minutes, 50 seconds is actually yielding us and today we have close to 40,000 active 3 in1 accounts through our partner and we also 15:57 15 minutes, 57 seconds have 50,000 ASBA which is actually given us first quarter throughput of thousands of crores. Now as we inch up forward we 16:04 16 minutes, 4 seconds are focused on product holding as an approach RV as an approach getting deeper into the family and most importantly getting the hook products 16:13 16 minutes, 13 seconds and PH products as way of life. So I think our elite proposition strengthening and we are going to enter the digital for mass through D2C which 16:22 16 minutes, 22 seconds is called direct to customer for SA and TD which is coming up at this point of time. Overall we'll try to sustain the momentum and grow from here on. Thank you. Gopy. 16:37 16 minutes, 37 seconds Good evening everyone. Uh the past quarter was relatively favorable in terms of market movements particularly in government bonds. RBA provided 16:44 16 minutes, 44 seconds liquidity and monetary policy support owing to relatively softer CPI prints. 16:48 16 minutes, 48 seconds This allied to the domestic economic relative resilience to geopolitical tensions played out in government bonds with yield on benchmark 10 year 16:56 16 minutes, 56 seconds softening by roughly 35 bs. Government bond deals have instead of pose the recently concluded RBI MPC which saw the committee decided to hold the report 17:05 17 minutes, 5 seconds rate. Various estimates predict the inflation is expected to remain within the RBI MPC's inflation target and 17:12 17 minutes, 12 seconds coming festive season will be keenly watched. Global central banks continue to diverge in their assessment of respective economies as the Fed continues to hold rates while other 17:20 17 minutes, 20 seconds developed economies such as UK have cut rates recently. For equities, currency and broader markets, India specific tariffs tariffs announced by US, the 17:29 17 minutes, 29 seconds full extent of which comes into effect end August continue to be source of concern with varying estimates as to the exact impact on GDP growth. These 17:38 17 minutes, 38 seconds factors will likely cause a bit of volatility across assets segments and we remain cautious in near term. Coming to treasury, we commence the FX business in 17:46 17 minutes, 46 seconds Q1 in line with the AD1 license granted by RBA. This allows the bank to offer various forex products on par with other 17:54 17 minutes, 54 seconds commercial banks in the country. During Q1, Treasury realized profit of 116 crores on profit on sale of investments. 18:01 18 minutes, 1 second Thank you. Back to the operator. 18:11 18 minutes, 11 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 18:20 18 minutes, 20 seconds star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. 18:30 18 minutes, 30 seconds Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question cue assembles. 18:41 18 minutes, 41 seconds The first question is from the line of Daran Diora from Indivist Group. Please go ahead. 18:50 18 minutes, 50 seconds Yeah, thank you. So, uh uh you know given the tough macro environment, I appreciate the steps management has 18:57 18 minutes, 57 seconds taken to steady the ship and I'm sure these steps will pay dividends in the longer run. Also appreciate the progress we're making on the current accounts uh 19:06 19 minutes, 6 seconds as well as uh the successful tier 2 capital raise. Um my question is regarding the cost to income which came 19:13 19 minutes, 13 seconds in at 70% versus 65% say for the same quarter last year. Can you give some guidance on you know what has driven 19:21 19 minutes, 21 seconds this uh higher figure as well as how do you think we'll end the year as well as what will be the guidance of the next two three years on the cost to income front. 19:31 19 minutes, 31 seconds Yeah. Hi hi Dan Dra here. So the cost to income as as you know the income side we have not grown fast enough because of 19:39 19 minutes, 39 seconds largely interest reversals coming from micro finance and also dispersements being muted. So as pass by and if you 19:48 19 minutes, 48 seconds look at July numbers I think growth momentum is back. So uh items like fee income and and uh interest income will 19:56 19 minutes, 56 seconds start growing faster. So uh largely on the income side we will see a lot of positive correction on the operating ex 20:04 20 minutes, 4 seconds side we looking at office growth of close 19% this year uh given that growth 20:11 20 minutes, 11 seconds momentum is there and like Vasu said we are adding people to on the front line so you will see some bit of uh opex 20:20 20 minutes, 20 seconds movement because of those but they're again largely revenue linked. uh but I feel that we may be at the peak of a 20:27 20 minutes, 27 seconds cost to income cycle uh given that uh most of it has got factored in and we 20:34 20 minutes, 34 seconds are seeing growth coming in. So I think from a from a cycle cost to income we would have peaked out looking a little 20:41 20 minutes, 41 seconds ahead uh even in our projections we are looking at uh let's say two years from now a cost to income to be you know between uh 60 to 65%. 20:52 20 minutes, 52 seconds uh and that will reflect the last part of our investments we are making as a bank and we've got some slides about the investments doing which are long-term in 21:01 21 minutes, 1 second nature all of that should you know that's the last phase would would capture that so from a short term I think we've hit the peak from a 21:08 21 minutes, 8 seconds medium-term is 60 to 65 long-term we are still uh I think we'll take some time before we give uh where we would be from 21:16 21 minutes, 16 seconds a long-term cost to income got it thanks thanks I appreciate the elaborate answer my Second question was uh regarding the housing finance. So uh 21:25 21 minutes, 25 seconds you know obviously there's a large opportunity out there. Uh I know the company has been uh thinking about making some changes in our strategy. Uh 21:33 21 minutes, 33 seconds wanted to know any updates in terms of the team or the strategy uh and uh whether we're seeing any uh you know any early signs of success there. 21:51 21 minutes, 51 seconds Hi, this is Jagisha. Uh, regarding the housing finance, yes, currently we had a uh growth of around 12%age, but we are 22:00 22 minutes looking at a growth of close to 20 plus in the current financial year and upwards in the long term. In the current 22:07 22 minutes, 7 seconds term, we are looking at adding close to some 18 to 20 branches and another 30 spoke locations among our 22:16 22 minutes, 16 seconds existing set of branches. So this will help us to show the desired growth and also we are focusing more on the 22:24 22 minutes, 24 seconds semi-urban and rural locations which will also help us to increase the yield. 22:30 22 minutes, 30 seconds Got it. And any uh you know any additions we have done to the team in terms of the senior leadership on the housing finance side. 22:41 22 minutes, 41 seconds No uh no we have not done that. We are only adding the branches. We are not going into the new geographies. Okay. 22:48 22 minutes, 48 seconds Yeah. Leadership everybody's in there. 22:51 22 minutes, 51 seconds So the the I mean the people are in place. So the whole addition is all about branch expansion and more people in the same branch. 22:59 22 minutes, 59 seconds Got it. Got it. I appreciate that and again appreciate the steps the management is taking. Thanks. Thank you. 23:08 23 minutes, 8 seconds Thank you sir. The next question is from the line of Priyang Cheda from Walum Capital. Please go ahead. 23:17 23 minutes, 17 seconds Yeah. Hi, I hope I'm audible. So, it has been a stressful times and in such times what uh as a minority shareholder we 23:26 23 minutes, 26 seconds require is something internal to the bank which you can control. And I'm coming back to the same question which was in the earlier participant which is 23:33 23 minutes, 33 seconds cost to income ratio uh it is going uh to the root that is question one when 23:41 23 minutes, 41 seconds how do we take care in the interim when there is so much of pain on the balance on the P&L uh why don't we take some calls uh to 23:50 23 minutes, 50 seconds cushion up the profitability that is question number one and then I'll come back to the question number two 23:59 23 minutes, 59 seconds yeah I mean it's a it's a good question no doubt uh can we double down on the cost and uh you know reduce the cost at 24:06 24 minutes, 6 seconds a time when there is a stress in terms of provisioning um but if you look at u the way the bank is set up uh we do not 24:15 24 minutes, 15 seconds really employ DSAs or collection agents for uh sourcing or collection of uh installments. Um and in liabilities of 24:24 24 minutes, 24 seconds course uh we don't we are not even allowed to have DSAs for deposit anyway. 24:29 24 minutes, 29 seconds Uh so most of the costs that we incur are of a fixed uh you know cost in nature uh be it people be it uh branch 24:37 24 minutes, 37 seconds rental cost uh and things like that and the IT cost that has been invested. So the variable cost is actually very 24:45 24 minutes, 45 seconds little you know uh there are some uh some businesses where we pay a connectors for certain know lead referrals for businesses only a very 24:54 24 minutes, 54 seconds small part of our cost becomes a variable cost. So if there's a drop in business automatically that cost will go down to that extent but the rest is all 25:01 25 minutes, 1 second actually of a fixed cost in nature and if you look at the business also uh you know while of course the results are not 25:10 25 minutes, 10 seconds very good and there is a loss that we have reported in the first quarter because of higher provisioning etc. But if you look at the fundamental uh you 25:17 25 minutes, 17 seconds know platform of the bank uh you know we have a 90% of our loans in secured book and the secured book is doing quite well 25:25 25 minutes, 25 seconds uh whether it is in terms of growth in terms of uh you know collection efficiencies etc. uh we don't see really any issue in that except that in 25:33 25 minutes, 33 seconds Karnataka and Tamil Nadu as we have mentioned there was a spillover effect of the microfen stress because of the ordinance which was which got passed in 25:40 25 minutes, 40 seconds these two states uh there was some spill or effect in terms of the lower end of the lap book uh but again was a short uh 25:49 25 minutes, 49 seconds you know short-lived uh effect and even in July we have put out our net slipage for non MFI book which has come down to 25:56 25 minutes, 56 seconds 2.19% from the first quarter slipage of about 2.6 odd%. 26:02 26 minutes, 2 seconds uh so basically the business is very strong from the non-MFI side uh which is 90% and the micro finance which is of course 10% but causing a lot of pain uh 26:12 26 minutes, 12 seconds is the factor that we have to deal with and we all felt that the micro finance will improve sometime by the beginning of this financial year but it has not 26:20 26 minutes, 20 seconds turned out to be so and uh but with the guardrail settling in and all people getting more discipline in lending we do expect that the third fourth quarter 26:29 26 minutes, 29 seconds should improve in micr finance also so the challenge for the equitas is really not in terms of how to cut cut cost and 26:35 26 minutes, 35 seconds control operating cost or reduce the cost but in terms of how do we you know uh just get our growth back and we have 26:43 26 minutes, 43 seconds grown by 8% in the first quarter whereas Jagi mentioned uh we should look at about 15 16% growth for the full year on 26:50 26 minutes, 50 seconds the overall book um and that is where the entire cost will get absorbed and as Jiraj mentioned uh in the short to 26:58 26 minutes, 58 seconds medium term our cost to income should come back to that 6 to 63% level. 27:03 27 minutes, 3 seconds Okay, I take that. Uh sir, on non MFI book until last quarter, we guided for a 27:10 27 minutes, 10 seconds credit cost of 1% for the full year. Now uh I I sorry I would have missed out what is the changing in the policy 27:18 27 minutes, 18 seconds provisioning norms that you have undertaken where you know the credit cost annualized uh annualized rate is around 2 and a 27:26 27 minutes, 26 seconds half% on a non MFI group. uh help me with what is the credit cost that I that we should look forward for 26. Uh what 27:34 27 minutes, 34 seconds has changed and transferred versus last quarter to this quarter? 27:41 27 minutes, 41 seconds Uh so uh our normal credit cost should be in the range of 1 to 1.2% for the nonfi book. uh this quarter you know we 27:49 27 minutes, 49 seconds have made a we have changed the provisioning norms in certain buckets uh which you can see in in page uh I don't 27:59 27 minutes, 59 seconds know which page uh page six uh we have made uh extra provision in certain buckets for the non 28:08 28 minutes, 8 seconds MFI book you know the purpose of that or the reason of that was because uh our MFI book is coming down and because of 28:15 28 minutes, 15 seconds that uh you know the overall provision provisions for the bank PCR from a PCR perspective will start going down. Uh so 28:23 28 minutes, 23 seconds we needed to increase the provisions in the secured book to keep the PCR up to a reasonable level. So this was a one time 28:30 28 minutes, 30 seconds exercise that we have done. Uh but short of that yes uh we should still stick to that 1 to 1.2% credit cost for the rest 28:38 28 minutes, 38 seconds of the book. So this is actually not one time uh it has happened uh twice second time in last uh whatever one and a half 28:46 28 minutes, 46 seconds year. Uh what we want to really understand is that till what times you know this provisioning norms will keep getting tightened internal to the bank. 28:57 28 minutes, 57 seconds I'm sure it is good on the long term and hence we are the long-term shareholders for the advertise bank but we really want to understand on the non MFI book 29:05 29 minutes, 5 seconds uh when would this provisioning tightening uh ends uh and then we get 29:11 29 minutes, 11 seconds back to the to the respectable PCR uh norm so is that something which is yet to come more pain in the coming quarters 29:20 29 minutes, 20 seconds uh or or is this a max pain that we are looking at my yeah hi this just just to give you 29:30 29 minutes, 30 seconds one perspective so that you don't think this keeps repeating this 112 crores which is the non-micro finance uh credit 29:38 29 minutes, 38 seconds cost which we have done through strengthening the provision its incremental impact will not be of the same magnitude because this is all while 29:46 29 minutes, 46 seconds why we are saying it is one time it's on the stock so incremental will be a much smaller number no no that he has understood What he's asking is that is understood is 29:55 29 minutes, 55 seconds understood that this 112 is a one time because you are doing it on a portfolio basis incrementally only for that extra amount 30:04 30 minutes, 4 seconds which comes into each bucket there will be that extra provisioning that he is understood what he's asking is you are saying that this is coming up for that 30:11 30 minutes, 11 seconds improving the PCR because MFI is coming down so PCR will go down because MFI is going down and what he's asking is in 30:19 30 minutes, 19 seconds the future also will you keep tightening the internal uh you know uh provision norms from that 70% PCR perspective. 30:26 30 minutes, 26 seconds That's what he's asking. I think we don't have that answer off the cuff now because I can't really tell you yes or no to that question. uh what we can say 30:36 30 minutes, 36 seconds is that uh we will have to look at this from time to time and time the increase in provision norms uh you know properly 30:44 30 minutes, 44 seconds and uh but but uh I think at least for the rest of the year I am fairly clear we will not have to do it again for sure 30:53 30 minutes, 53 seconds whether we'll do it in the next year is something I'm not right now able to predict with clarity no problem thank you sir for that 31:01 31 minutes, 1 second clarity and just one last question on again MFI uh for the full year last year we we undertook a credit cost of around 10%. 31:11 31 minutes, 11 seconds Now in this year uh a normalized credit cost additional upfronting of the credit cost all put together is another 11%. 31:20 31 minutes, 20 seconds Right? uh so what what I wanted to understand is that the balance now so because the book is has run down it's 31:27 31 minutes, 27 seconds been a one year whatever disbbursement that we would have done in last whatever 6 months to set 9 months uh I'm sure we 31:35 31 minutes, 35 seconds would have taken uh all the prospects of the pain that overleveraging of the borrower had 31:43 31 minutes, 43 seconds even would it be prudent to call out that this is the max pain in MFI book also 31:52 31 minutes, 52 seconds Um yeah I mean that's the purpose of taking that 185 cr of standard asset provisioning and micro finance in the first quarter to kind of call out that 32:01 32 minutes, 1 second yes this should be the peak of uh credit cost uh stress that we should see in MOI and uh you know hopefully going forward 32:09 32 minutes, 9 seconds we should see more normalized credit cost for the subsequent quarters the whole purpose is really only that that's where we went for that uh you know 32:16 32 minutes, 16 seconds standardized provisioning and in terms of the last 6 months uh business that we generated yes uh I had mentioned that you know the collection efficiency in 32:25 32 minutes, 25 seconds that is actually 99.6 six which is uh which is absolutely as good as what it used to be before all this crisis 32:31 32 minutes, 31 seconds started and uh the second thing is um uh there's one more question 32:39 32 minutes, 39 seconds okay so so for the full year uh what would be the credit cost for this book that we should think of sorry for the balance 9 months we we know that it has 32:48 32 minutes, 48 seconds happened in Q1 for the balance 9 months what should be the credit cost on MFI book we expecting another conservatively about 300 crores. 32:58 32 minutes, 58 seconds We have made 400 and conservatively another 300 crores is what we expecting. 33:05 33 minutes, 5 seconds Yeah. And the percentage is not the right thing because as you mentioned the denominator has been going down but uh as Jagi mentioned you know he started 33:13 33 minutes, 13 seconds dispersement again in micro finance uh on a calibrated basis. So you know that will obviously reduce a percentage but 33:21 33 minutes, 21 seconds yes to some extent the percentage is a little bit. So the 300 crores is for the balance uh next three quarters for this year. 33:31 33 minutes, 31 seconds That's right. 33:33 33 minutes, 33 seconds Okay. Thank you sir. Hopefully we come back uh more stronger in the coming quarters. Thank you. Thank you. Thank you. 33:41 33 minutes, 41 seconds Thank you sir. The next question is from the line of Ron Chedda from Ariga Capital. Please go ahead. 33:52 33 minutes, 52 seconds Yeah. Hi. Thanks for the opportunity. Uh my first question is uh again going back to grade cost. Uh you said that we are 34:00 34 minutes kind of upfronting the credit cost uh in the current quarter and also uh kind of improving the PPR for the full year. If 34:09 34 minutes, 9 seconds I were to assume uh if it's a 600 to 700 cr ballpark for MFI and 1 one and a 34:15 34 minutes, 15 seconds half% uh should your credit cost for full year of F26 be higher than F25? 34:23 34 minutes, 23 seconds uh if the math serves right. Yes, it will be higher. 34:28 34 minutes, 28 seconds Okay. And uh my uh second question is in terms of uh your cost to income uh in 34:35 34 minutes, 35 seconds terms of our readiness to apply for your universal license. Do we have to now add uh is there something from a readiness point of view where we will have to 34:43 34 minutes, 43 seconds invest in processes, tech, people or that investment is largely done and we are kind of uh gearing up for our application. 34:54 34 minutes, 54 seconds There is no fresh investment required from that perspective at all. uh we should be able to apply next year if we can continue to keep our G&P and NPL 35:03 35 minutes, 3 seconds less than three and one for the March 26 then we should be potentially able to apply subsequent to that but from a investment perspective there is no 35:11 35 minutes, 11 seconds further investment required got it and the last question is on NI item I I understand there is reversal in 35:18 35 minutes, 18 seconds this quarter but uh given the fixed rate nature of our book how do you see the growth delta uh in the NI growth line is 35:28 35 minutes, 28 seconds there is an area in growth over next two years given the rate cycle is uh coming uh the rates are coming down. 35:40 35 minutes, 40 seconds Yes, I'll I'll try to address that from a expectation on NIM rather than NI 35:46 35 minutes, 46 seconds growth. Um so we what's impacting NIM largely is the portfolio mix in MFI and 35:54 35 minutes, 54 seconds also the interest income reversal. So these two are the large contributors for the NIM drop and as you've seen our cost 36:01 36 minutes, 1 second of funds is also uh you know moderating quite well. Uh so I think in our expectation our NIMS should roughly 36:10 36 minutes, 10 seconds hover around here for the given year. Uh even though we will get benefit of lower interest income reversal as asset 36:17 36 minutes, 17 seconds quality picks up but again we're stepping on the pedal from growth perspective. Uh so we at least we we 36:24 36 minutes, 24 seconds expect NIMS to hover around here for this year on NI. Yes, you're right. Um NIA should grow faster theoretically uh 36:33 36 minutes, 33 seconds as as you start getting income from uh from these assets uh and you get the full yield but I think more expectation is NIM to remain where it is. 36:47 36 minutes, 47 seconds Okay. Uh just just last thing on DPD moment in the non MFI book uh despite I understand you commented that it is 36:55 36 minutes, 55 seconds dipping in July but the way to uh the movement from Q4 to Q1 is a sharp increase. So can you talk about uh where 37:03 37 minutes, 3 seconds are we seeing the stress except for the ones we've already called out. 37:10 37 minutes, 10 seconds This is majorly happens only on the Karnataka market where we had a sudden flow in the DPD that was a major impact 37:18 37 minutes, 18 seconds we had it in the u uh DPD movement which we brought it under control which we can able to see in the month of July where 37:25 37 minutes, 25 seconds the 1 to90 DPD has uh come down both in MF as well as on the nonMF book. 37:33 37 minutes, 33 seconds Okay. Thank you so much for answering my questions. 37:36 37 minutes, 36 seconds Thank you. Thank you sir. The next question is from the line of Ash ashes 37:43 37 minutes, 43 seconds sonji from Kotuk securities. Please go ahead. 37:49 37 minutes, 49 seconds Hi team good evening. Uh couple of questions from my side. Uh if I look at the non MSI book it's like the 37:57 37 minutes, 57 seconds sorry to interrupt you sir your voice is breaking. Can you hear me better now? 38:06 38 minutes, 6 seconds Yes sir. Please go ahead. 38:07 38 minutes, 7 seconds Okay. If I look at the non MFI book on the basis, it seems to cross lipages are not what as sharply as the increase in net slippages. Let's see. 38:21 38 minutes, 21 seconds Uh you know, sorry to interrupt you, sir. Your voice is breaking. I'll come back in. Thanks. 38:28 38 minutes, 28 seconds Okay, sir. Thank you, sir. 38:32 38 minutes, 32 seconds The next question is from the line of Sil Sha from Paris Investment. Please go ahead. 38:40 38 minutes, 40 seconds Hi, thanks for the opportunity. So, what is our X bucket collection efficiency for micro finance for the month of July? 38:49 38 minutes, 49 seconds It was around 99.14 on the 1 EMI with 1 MI demand against the 1 Mi collection. 39:01 39 minutes, 1 second So in the month of June I think it was 98.69. Yeah bro. 39:06 39 minutes, 6 seconds So it has improved compared to the month of June. Yes. 39:11 39 minutes, 11 seconds Okay. Okay. And how about Tamil Nadu and Karnataka? 39:16 39 minutes, 16 seconds Tamil Nadu we are at um close to 99 and Karnaka has been uh improved from 96 to close to 97.44. 39:27 39 minutes, 27 seconds Okay. Okay. So overall uh in all the I mean uh uh states we it's improved even in Tamil Nadu. 39:35 39 minutes, 35 seconds Yes. 39:37 39 minutes, 37 seconds Okay. Okay. Uh and so in previous calls I think we mentioned that by an end of this year our ROA should be in excess of 39:43 39 minutes, 43 seconds 1%. And FYI 27 our ROA is to be in the range of 1.5 to 1.8. So are we on track 39:51 39 minutes, 51 seconds to achieve that or looking at the current performance we would like to revise our guidance? 39:59 39 minutes, 59 seconds Yeah. So, uh, as I think we'll still be able to stick to that, you know, the fourth quarter exit ROA for the fourth quarter should be around that 1% level. 40:09 40 minutes, 9 seconds Okay. And for FI27, FI27, it's of course early to predict that, but it will keep improving that's 40:17 40 minutes, 17 seconds for sure. Uh because we definitely believe that MFI stress can't continue beyond that and if MFI comes back then 40:24 40 minutes, 24 seconds everything is back to normal. So we should see back to normal levels of ROI subsequent to that. So if the fourth 40:31 40 minutes, 31 seconds quarter exit RO is around that 1% level then you should see progressive improvement in the subsequent quarters. 40:39 40 minutes, 39 seconds Okay. Okay. And so my final question uh since our 100% of MFI disbburusments are now covered under CGFMU. So can we 40:48 40 minutes, 48 seconds expect from now on from here I mean we'll be stabilizing at this 10% MFI book or we can even increase this book 40:59 40 minutes, 59 seconds um yeah it is unlikely to increase because MFI growth will be always a little lower than the rest of the book 41:06 41 minutes, 6 seconds growth and to that extent it may not increase uh but the sharp reduction that we have seen in the last two quarters may not happen. 41:15 41 minutes, 15 seconds So I mean for us the ideal level would be what 90 secured and 10 mm around that around that. 41:23 41 minutes, 23 seconds Okay. Okay. Uh that's it from my side. Thank you and all the best. Thank you. Thank you sir. 41:31 41 minutes, 31 seconds The next question is from the line of Anil Tuli from Best Pulse Research Adversary. Please go ahead. 41:40 41 minutes, 40 seconds Yeah. Uh thanks for the opportunity. Uh my question is more to understand the strategy of the bank from next 3 to four year perspective and not looking for any 41:48 41 minutes, 48 seconds number guidance. See first on micro funds my question is whatever I have understood the JLG business the JB model 41:55 41 minutes, 55 seconds has broken and now that uh group collections and group underwriting is not working any anymore and we have to 42:03 42 minutes, 3 seconds do individual underwriting and individual underwriting is definitely not possible for ticket price less than one lakh and loans are definitely less than one lakh. So my question is why do 42:12 42 minutes, 12 seconds you want to be present into this MSI segment at all when the business model has broken or is my understanding wrong? That's the first question. 42:21 42 minutes, 21 seconds Yeah. Yeah. Your understanding is correct. I am not going to say your understanding is wrong. The group lending model still exists and the 42:29 42 minutes, 29 seconds people still assemble in the group. What is really not beginning to work now which used to work in the past is the willingness of the group members to pay 42:38 42 minutes, 38 seconds someone else's EMI. uh when that person has uh you know not come to the meeting and requesting someone else to pay they 42:45 42 minutes, 45 seconds normally used to end up paying and then they will collect it between themselves subsequently later on. Now that is the 42:52 42 minutes, 52 seconds one which is really not happening uh you know uh now uh but the rest of the group model still works and um you know as we 43:00 43 minutes keep saying that you know our own micr finance strategy is very clearly that we will uh that percentage of contribution of micr finance will come down over time 43:09 43 minutes, 9 seconds uh except that last two quarters it was sharply down which will not happen it'll reduce in more marginally uh but 43:16 43 minutes, 16 seconds otherwise the rest of the group model still works because even today uh So we are able to get about 50% of attendance at the center meeting which used to be 43:25 43 minutes, 25 seconds under normal circumstance around 70%. Uh 70 75%. So at least 50% are still turning up and making the payment at the 43:34 43 minutes, 34 seconds group and leaving the rest of the members to be followed up individually. Uh and we'll have to keep watching this. 43:41 43 minutes, 41 seconds These are all evolving because now the Min guidelines sorry Min guardrails have got implemented 2.0. 43:48 43 minutes, 48 seconds uh now people can't borrow more than three loans and the total loans can't exceed 2 lak rupees uh and if they have 43:57 43 minutes, 57 seconds an overdue with anyone then no one else will be allowed to fund to her so these are the norms which were not really properly followed in the in the last 44:06 44 minutes, 6 seconds 2023 and 2024 but now from Jan and from April from April everybody has implemented from Jan 44:13 44 minutes, 13 seconds some of us had implemented and when these three norms get implemented strongly by all the players. Uh that is when uh the members will also start 44:22 44 minutes, 22 seconds recognizing that they need to repay the money. If they want to be in the micro finance borrowing market, they need to also repay their money whether they do 44:31 44 minutes, 31 seconds it at the group or whether they do it outside the group. So to that extent I think this uh the collective uh 44:38 44 minutes, 38 seconds discipline lending uh of the entire industry is what can finally hold this group model going forward. 44:46 44 minutes, 46 seconds Got it. And sir my second question is uh on the opex but I'm not looking for the cost to income or anything. Uh where I'm 44:53 44 minutes, 53 seconds coming from is uh I don't know my understanding is right or wrong for the size of our bank I think we have too many products. So is it that the opex is 45:01 45 minutes, 1 second high because we have too many products and then this product scale up then the opex as a percentage of should automatically come down or is it just 45:10 45 minutes, 10 seconds that the growth so why exactly our opex is high as a business that is what I'm trying to understand. 45:18 45 minutes, 18 seconds Um yes so uh I think we have been investing in a few business lines over the last 3 to four years. Uh used car 45:26 45 minutes, 26 seconds was one business that we started about 3 three and a half years back. affordable housing was another one which has started around the same point in time 45:34 45 minutes, 34 seconds and uh both of them I mean used car has been quite profitable even last year and this year also but affordable housing 45:41 45 minutes, 41 seconds last year was not profitm this year it has just turned the corner in the first quarter so hopefully it'll start contributing more going forward and uh 45:50 45 minutes, 50 seconds then uh we had spent money on AD1 and also we had spent money on credit cards so these two businesses uh they have not 45:58 45 minutes, 58 seconds started generating revenue and uh this year they will start generating revenue but the real revenue should come from these two products from the next 46:05 46 minutes, 5 seconds financial year. So there is certain amount of investments we had made and so that way the cost to income remained at 46:12 46 minutes, 12 seconds a higher and elevated level. Of course the fact that micro finance uh book was going down and creating a higher level 46:19 46 minutes, 19 seconds of slippages impacting income reversal was again a major factor. If that had not happened, if that had not happened 46:27 46 minutes, 27 seconds and if micr finance had continued under normal uh patterns then our cost income should have been in the range of 62 63 46:36 46 minutes, 36 seconds 64% somewhere in that range is where it should have been given the investments that we have been making in other products because of that MFI issue it 46:44 46 minutes, 44 seconds has gone a little elevated. Uh but once the MFI comes back naturally it will produce higher level of income and so 46:51 46 minutes, 51 seconds the cost income should come down. uh but as going forward as Dj had mentioned slightly earlier uh you know for in the 46:58 46 minutes, 58 seconds short term we should see the cost income at around this levels but in the medium term we should see it getting back to 47:05 47 minutes, 5 seconds that 60 to 65% level okay one followup question on the micro finance is my understanding right that 47:13 47 minutes, 13 seconds uh now that you so the collection cost will go up 47:20 47 minutes, 20 seconds drastically for the balance for not coming into the group and RBI has been pressurizing that the rates cannot go up beyond the point and structurally it 47:28 47 minutes, 28 seconds looks like the credit cost of the LFI segment has increased. So without going into the numbers can we say on a sustainable basis the profitability on 47:36 47 minutes, 36 seconds the micro finance has come down compared to the before the uh structurally I think uh again you are 47:44 47 minutes, 44 seconds right structurally I think the MFI the profitability the ROI and the roe that MFA used to generate uh in the past I 47:53 47 minutes, 53 seconds think uh at an industry level uh we will start getting used to seeing it at a more normal level and over time you it 48:02 48 minutes, 2 seconds the returns on micr finance may be only equivalent to that of secured loan books just slightly adjusted for the uh 48:09 48 minutes, 9 seconds unsecured risk exposure uh so it'll get it probably be little bit more than what a typical MLAP or a or a secured loan 48:18 48 minutes, 18 seconds lap can produce just adjusted for the uh unsecured credit part of it otherwise 48:24 48 minutes, 24 seconds the the the earlier situation of you know higher levels of ROI I think is something that you know at the industry 48:33 48 minutes, 33 seconds level we'll all start probably getting used to not having that kind of stuff going forward. 48:39 48 minutes, 39 seconds Thanks a lot sir. Thanks a lot for your answers and wishing you all the best. Thank you. Thank you. 48:44 48 minutes, 44 seconds Thank you sir. The next question is from the line of Ashes Sonji from code of securities. Please go ahead. 48:54 48 minutes, 54 seconds Hi team. Uh I hope you can hear me better. Now two questions from my side. 48:59 48 minutes, 59 seconds If I look at the NP recoveries and upgrades in the non MFI book, that metric seems to have worsened quite a 49:07 49 minutes, 7 seconds bit in this quarter. Uh if you can shed some light on which segments or subsegments and which regions are 49:14 49 minutes, 14 seconds contributing to contributing to this worsening, that is one. And secondly, uh I heard you say that the credit cost 49:21 49 minutes, 21 seconds guidance for the nonfi book should be around 1 to 1.25%. 49:27 49 minutes, 27 seconds Um this this seems very different from what we used to indicate earlier for the entire book. Uh if I go back a couple of years, we used to say that the overall 49:35 49 minutes, 35 seconds credit cost should be around 1.1 to 1.2%. 49:39 49 minutes, 39 seconds Now we are giving a similar guidance for the non-MS book. So what has resulted in this change in expectation? 49:46 49 minutes, 46 seconds Those were the two questions. Thanks. 49:48 49 minutes, 48 seconds Okay. Uh I'll leave the first question to Jagi to answer. In terms of uh geography, region wise, where do we say 49:55 49 minutes, 55 seconds stress on the non MFI book? As far as the credit cost uh of the non-MFI book is concerned uh and the overall credit 50:03 50 minutes, 3 seconds cost of the bank is concerned, you are right you know uh when we became a bank in 2016 uh and then uh for the brief 50:11 50 minutes, 11 seconds while that post demonetization if you remove that impact for about a year impact uh then from 2018 to 2020 where 50:19 50 minutes, 19 seconds there was no external uh factors at play. Uh again our credit cost at the bank level used to be around the same 1.2 1.1 1.2 1.25%. 50:30 50 minutes, 30 seconds Uh which comprised of uh you know more or less equal kind kind of credit cost 50:37 50 minutes, 37 seconds between MFI and non MFI. Uh but now what we feel is that the non MFI will still continue to be at the same 1 to 1.25% 50:46 50 minutes, 46 seconds level. Uh but the MFI could be at a different level. MFI could be different is what we feel. uh it can be I mean 50:55 50 minutes, 55 seconds yeah earlier we used to say uh you know long back before all this crisis it used to be 1 to 1.5% credit cost subsequent 51:04 51 minutes, 4 seconds to de demonetization we thought that 2 to 2 and a half is a more normal credit cost for micro finance post corona we 51:12 51 minutes, 12 seconds thought around 3% is a normal credit cost for micro finance now post this 2024 uh overleveraging crisis is 51:22 51 minutes, 22 seconds probably anywhere between 3 to 4% could be a normal credit cost for a micro finance. So if you take that way uh and 51:29 51 minutes, 29 seconds if I assume that 10% of our book will be micr finance then we are really looking at.3 to 4% credit cost once micr finance 51:37 51 minutes, 37 seconds settles down and be becomes normal and then one to 1.25 from the other so you can potentially then look at one and a half% as a credit cost at the bank 51:45 51 minutes, 45 seconds level. I'll leave Jagi to answer the geography. 51:49 51 minutes, 49 seconds Okay. Um regarding the non MFI slipages um there are two products which we added slippages compared to the previous 51:57 51 minutes, 57 seconds quarter. one is on the uh VF other one is on the SBL book but VF you normally 52:04 52 minutes, 4 seconds see it's a season will be there for the Q1 we cannot make a comparison with Q4 but when you make a comparison with the 52:11 52 minutes, 11 seconds last financial year Q1 actually the slippages which much more uh lower both 52:18 52 minutes, 18 seconds for the 1290 DPD as well as on the G&P print so we don't see much of problems as far as the VF even though the 52:25 52 minutes, 25 seconds slippages compared to Q4 are higher but if you look at the SBL part as in the clearly mentioned in the call 52:34 52 minutes, 34 seconds that even the uh due to this ordinance we had an impact on even on the mortgage 52:41 52 minutes, 41 seconds loans on the lower ticket sizes less than 10 lakhs so we have been comfortably having a expected efficiency 52:50 52 minutes, 50 seconds of close to 99%age in Karnataka which has dropped down to 96.2 two in the month of February. So currently we 52:59 52 minutes, 59 seconds brought it on to almost close to 98.4 in Karnataka. But those slippages which contributed majorly uh in the Q1. So the 53:08 53 minutes, 8 seconds maximum slipages happened SBL is on the from the Karnataka region and this is 53:15 53 minutes, 15 seconds primarily on the both less than 10 lakh ticket size which is the microlap and Gab products. 53:31 53 minutes, 31 seconds Hello. Yes sir. Okay. Thank you. Thank you. 53:39 53 minutes, 39 seconds Well, ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. 53:47 53 minutes, 47 seconds Pen Vasuan for his closing comments. 53:51 53 minutes, 51 seconds Yeah, thank you. Thank you all of you for attending this call and uh you know and uh highlighting areas for focus for the bank and for the management. Thank 54:00 54 minutes you so much and uh see you again next quarter. Bye-bye. 54:04 54 minutes, 4 seconds Thank you on behalf of Equitus Small Finance Bank Limited. We concludes today's conference. Thank you for 54:13 54 minutes, 13 seconds joining us and you may now disconnect your lines.