Fedbank Financial Services Limited — Q3 FY26

Fedbank Financial Services Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=kkwJFbjHSm0 Published: 4 months ago

0:08 8 seconds Ladies and gentlemen, good day and welcome to the Fed Bank Financial Services Q3 FI26 conference call hosted by Equir Securities. 0:19 19 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. 0:28 28 seconds Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. 0:36 36 seconds This conference call may contain forwarding statements about the company which are based on the beliefs, opinions and expectations the company has on date 0:44 44 seconds of this call. These statements are not the guarantees of future performance and involve risk and uncertaintities that are difficult to predict. I now hand the 0:53 53 seconds conference over to Mr. Shepal Doshi from Equity Security. Thank you and over to you sir. Thank you Steve. Good morning everyone. 1:02 1 minute, 2 seconds We welcome you all to the earnings conference call of Fredbank Financial Services to discuss the Q3 F26 performance of the company. Today we 1:11 1 minute, 11 seconds have the management of the company represented by Mr. Perves Moola MDM CEO Mr. CB Ganesh CFO Mr. Chargul Takul CBO 1:20 1 minute, 20 seconds for small ticket lab business Mr. S sur CBO for medium ticket lab business and Mr. Jablich CBO for gold loan business. 1:30 1 minute, 30 seconds We also have Mr. Loage who recently joined here as a investor relations head. I would now like to hand over the call to Mr. Perv for his opening remarks 1:39 1 minute, 39 seconds post which we can open the forum for question and answer. Over to you sir. Thank you Shrial. Good evening everyone. 1:48 1 minute, 48 seconds I would like to extend a warm welcome to all of you for joining the Q3 FI26 post results earning call. I am joined by our CFO Mr. CV Ganesh, our three CBOS Mr. 1:59 1 minute, 59 seconds Shardul Kadam, Mr. Jagish Rao, Mr. Suresh Kumar, our chief risk officer Mr. 2:04 2 minutes, 4 seconds Vikram Rati and Mr. Lokkesh Parik our new head of investor relations. 2:10 2 minutes, 10 seconds The priorities for your company remain the same which we had articulated at the start of the year. Namely, one conserve 2:17 2 minutes, 17 seconds and allocate capital to businesses with high ROA and ROE. Focus on our twin engine strategy of gold and lab business 2:25 2 minutes, 25 seconds to move towards a fully secured lending portfolio. Expand gold business through branch expansion and increased doorstep coverage. 2:34 2 minutes, 34 seconds Continue to foster synergies between our gold and lab operations. 2:40 2 minutes, 40 seconds uh six within LAP we will concentrate on a combination of high yield STLAP and low-risk emptylap. 2:46 2 minutes, 46 seconds Seven expand lab with minimum capital allocation. 2:51 2 minutes, 51 seconds Eight, we had faced challenges in our ST lab business. We were rebuilding it over the year. Rebuild ST lab and establish 2:59 2 minutes, 59 seconds leadership and build team for growth and quality. Nine, continue strengthening our collection infrastructure to effectively manage delinquencies. 10, 3:07 3 minutes, 7 seconds aim for increased core income while reducing reliance on DA income. Use DA as a capital allocation strategy. 11, 3:15 3 minutes, 15 seconds move towards a free frugal cost structure. 12, ensure that credit costs remain 1% plus or minus 10 BIPS. With 3:22 3 minutes, 22 seconds respect to these priorities and more, we have taken the following actions in Q3 FY26. 3:28 3 minutes, 28 seconds On the gold business, we have recorded a remarkable quarter with the AUM growing 52% YI and tonnage growing 5.1%. 3:37 3 minutes, 37 seconds Our LTVs on AUM stand at 59.3%. 3:42 3 minutes, 42 seconds Last quarter we got a lot of questions and we had spoken about our seasonality in this particular business. This 3:49 3 minutes, 49 seconds quarter we have dispersed rups 7,853 crores in gold loans marking the highest amount ever achieved by the company in a 3:57 3 minutes, 57 seconds single quarter. Consequently, this has led to a net aum growth of rups 1,174 crores. 4:05 4 minutes, 5 seconds We have opened 54 new gold branches this quarter, bringing our total new branches to 113 for the year. In accordance with 4:13 4 minutes, 13 seconds our guidance, we will keep opening new branches in the upcoming quarters. 4:18 4 minutes, 18 seconds Despite opening 54 new branches, our AUM per branch has reached rupees 13.3 crores, reflecting an increase of 0.91 cr per branch during this quarter. 4:29 4 minutes, 29 seconds In our collaborative initiative involving gold and ST lab, we have successfully merged an additional 14 branches. This means we have colllocated 4:39 4 minutes, 39 seconds 63 branches this year. that is 63 branches of STLAP have moved into 63 gold branch premises and release the ST 4:47 4 minutes, 47 seconds lab premises. We will persist in our efforts to merge and colllocate more branches. 4:54 4 minutes, 54 seconds Despite facing yield pressure, the MTLAB business continues to perform consistently dispersing 545 crores this quarter while maintaining its uh yields. 5:04 5 minutes, 4 seconds In light of the pressures within the ST lab market and the increased trade cost faced by the company previously the company has fortified its credit 5:11 5 minutes, 11 seconds policies and successfully transition to the systemdriven B. This quarter ST lab division has dispersed rupees 28 crores. 5:19 5 minutes, 19 seconds As promised our unsecured lending portfolio continues to diminish now constituting merely 6% of our onbook assets. 5:29 5 minutes, 29 seconds The senior leadership has been successfully onboarded in collections during Q1 and Q2. We have we further strengthened the field team. Now we have 5:38 5 minutes, 38 seconds verticalize the correction framework incorporating additional resources for both call center as well as the legal and recovery teams. Our credit cost uh 5:47 5 minutes, 47 seconds as promised stays below 1% of this quarter we've clocked about.9%. 5:53 5 minutes, 53 seconds In line with our priority of increasing core income and decreasing DA income, our net income from DA has decreased uh 6:00 6 minutes to 1 cr for the 9 months FY26 compared to 62 crores for the same period last year. While we continue to imple 6:09 6 minutes, 9 seconds implement corrective measures in our ST lab business, we anticipate certain flows which will persist as advised earlier and as guided earlier. Once 6:18 6 minutes, 18 seconds these stabilize uh in the near term, it will contribute to a more stable and predictable uh performance. Some of the key numbers are as follows. Our business 6:27 6 minutes, 27 seconds AUM reached a rupees 17,500 crores, translating to a growth of 17% yi. If 6:34 6 minutes, 34 seconds you exclude the uh BL business, it will be about 32% YI. Uh gold reached Rs 7,95 crores and AUM growth of about 52% YI. 6:45 6 minutes, 45 seconds Tonnage growth for the year came in at 5% y reflecting touching 11.2 tons in 6:52 6 minutes, 52 seconds totality. Our mortgage reached rupees 9,84 cr and aum growth of 20% yi. Our 7:00 7 minutes dispersals of rups 8,606 crores in Q3 FI26 up 96% YI on the profitability and 7:08 7 minutes, 8 seconds asset quality. Our net interest income grew 16.8% 8% Y uh to rupees 318.9 7:16 7 minutes, 16 seconds crores. Our operating profit grew 11.7% Y to rupees 149.4 crores. Our credit 7:22 7 minutes, 22 seconds cost for Q3 stands at.9%. Our net profit stood at rupees 87.9 crores in Q3 FY26. 7:30 7 minutes, 30 seconds Gross phase 3 uh stands at 2.1% versus 1.9% uh last quarter. I will now hand over to 7:38 7 minutes, 38 seconds Mr. CV Ganesh to take you through the numbers in detail. 7:42 7 minutes, 42 seconds Yeah, thank you Perves and thank you everyone for your participation on the call. Sharing a few points to aid in better interpretation of the results. 7:52 7 minutes, 52 seconds Firstly, from an asset growth perspective, our AUM X business loans which we divested has grown 32.5% yearonear and 9% quarteron quarter. 8:06 8 minutes, 6 seconds The gold loan originations have been the standout performer in this quarter. Our gold loan aum had grown 850 crores in the first 6 months of this fiscal. 8:18 8 minutes, 18 seconds In the last 3 months alone, which is Q3, the gold AUM grew 1,174 8:25 8 minutes, 25 seconds crores. Our 113 new branches for gold loans are hitting the ground running and 8:33 8 minutes, 33 seconds giving us the confidence to continue this journey of branch addition. 8:38 8 minutes, 38 seconds Of the loan book of 12,945 crores as of December 30th unsecured business loans have gone down to under 6%. 8:49 8 minutes, 49 seconds Down from 10% at the beginning of the fiscal resulting in 99.4% 4% of the loan book now being fully secured either against property or gold. 9:00 9 minutes In this quarter we have originated 545 crores of medium ticket lap and done a 9:07 9 minutes, 7 seconds direct assignment/core lending of 313 crores of the same. However, as guided 9:14 9 minutes, 14 seconds earlier in the earlier calls with the NIM expansion aiding core income growth, we are consciously reducing our DA 9:23 9 minutes, 23 seconds income. I'm reiterating again, it is a choice we are exercising. Consequently, we have done lesser direct assignments 9:30 9 minutes, 30 seconds in Q3 at 313 cr compared to 578 crore in the previous quarter. We may continue to 9:38 9 minutes, 38 seconds do lesser direct assignments in Q4 and the medium-term and migrate to co- lending. 9:45 9 minutes, 45 seconds On the OPEC side, our opex for the quarter is up 21 bill primarily due to an increase in employee costs due to new 9:53 9 minutes, 53 seconds brand staffing in the 130 new branches, higher incentives on the gold loan originations and a one-time impact of 10:00 10 minutes the labor code regulations of 3.9 crores. This impact is reflected both on the OPEX and the operating profit. 10:11 10 minutes, 11 seconds Consequently, our cost to income has come off a little worse uh by about 10 bills. 10:20 10 minutes, 20 seconds Other expenses have also gone up due to new branch related rent and operational expenses, higher advertising and travel spend during the quarter and higher 10:28 10 minutes, 28 seconds depreciation as we increase the branch infrastructure. 10:32 10 minutes, 32 seconds On the asset quality, our delinquencies in the oneplus have gone down from 7.5% to 7.1%. 10:40 10 minutes, 40 seconds And the 30 plus has also gone down from 4.6% to 4.5%. 10:47 10 minutes, 47 seconds However, we had higher forward flows from stage two to stage three resulting in our gross stage three going up by 2.1 10:56 10 minutes, 56 seconds going up to 2.1% from 1.9% last quarter. 11:01 11 minutes, 1 second These are adequately provided for in the quarter. In spite of this, we have been able to keep credit costs flat at.9%. 11:12 11 minutes, 12 seconds On the PCR front, our PCR last quarter had dropped due to an ARP sale of deeper bucket NPA which had a higher provision 11:20 11 minutes, 20 seconds coverage. In this quarter, our PCR has marginally gone up to 32.3% 11:26 11 minutes, 26 seconds from a little under 32%. On the treasury side, total on the uh quarteron quarter basis, our weighted average interest 11:35 11 minutes, 35 seconds cost of total borrowings has gone down 32 bits from 8.19% to 7.87%. 11:45 11 minutes, 45 seconds This consistent decline in the weighted average cost has been facilitated by resets on the external benchmark link borrowings and lower rates on new 11:54 11 minutes, 54 seconds borrowings. Since our new gold loan originations carry shorter tenor than our lab product, it has allowed us to borrow more at the shorter end with lower rates. 12:04 12 minutes, 4 seconds To lock in spreads in a declining interest rate scenario, we have increased our fixed rate borrowings from 12:11 12 minutes, 11 seconds 11% of total borrowings to 29% of total borrowings. This gives more visibility on the spread going forward. on the 12:19 12 minutes, 19 seconds floating rate borrowings of 71% 41% is external benchmark based and 30% is linked to MCLR. 12:27 12 minutes, 27 seconds Our incremental cost of borrowings in quarter 3 FI26 was a little under 7.6%. 12:35 12 minutes, 35 seconds Our debt equity ratio has increased from 3.78 in September 25 to 3.99 as of 12:42 12 minutes, 42 seconds December 25. In summary, over the last four quarters, we have sequentially 12:49 12 minutes, 49 seconds continued on the journey of steady, consistent, and a gradually growing ROA and ROE trajectory. The ROA over the 12:58 12 minutes, 58 seconds last four quarters has grown from 2.2% to 2.5% and ROE has expanded 130 bills from 11.4% to 12.7%. 13:11 13 minutes, 11 seconds aiding in confidence on our new strategy and appetite to invest more in capacity addition. With that, I hand it over to the operator for questions. 13:25 13 minutes, 25 seconds Thank you very much. We will now begin the question answer question. 13:31 13 minutes, 31 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to withdraw yourself from the question queue, you 13:39 13 minutes, 39 seconds may press star and two. Participants are requested to use handset while asking a question. 13:46 13 minutes, 46 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 14:01 14 minutes, 1 second The first question comes from the line of Dantara with clean edge wealth. Please go ahead. 14:10 14 minutes, 10 seconds Fortunately uh so last quarter I had asked that you know when will Lakshmi G shine on our gold loan portfolio. So good to see that you know the AUM growth 14:18 14 minutes, 18 seconds was good but I think the shine has still not fallen on our you know income and operating leverage like you know if I see our old branches would have probably 14:27 14 minutes, 27 seconds reached an AUM of say 15 16 crores per branch the older ones uh but but you know the income line item and uh the operating leverage is still not visible 14:36 14 minutes, 36 seconds like do we see it coming in the next one or two quarters or yeah no you will see it happening see 14:44 14 minutes, 44 seconds normally what happens is We when we uh do such kind of large originations there is a upfront cost of incentives and 14:52 14 minutes, 52 seconds other spend which is incurred at the beginning. It is recognized up front in the month of origination but the earnings of these loans are backended. 15:02 15 minutes, 2 seconds So it will play out gradually. 15:04 15 minutes, 4 seconds Okay. And because uh because thank you so much for I mean I I remember that question when you were um 15:14 15 minutes, 14 seconds you had asked us that why we grew only 6% and when others were growing 10% quarteron quarter in the gold side and I told you about the seasonality 15:22 15 minutes, 22 seconds um and you can see that seasonality playing out differently for different companies although they are in the same gold business because geographically we 15:30 15 minutes, 30 seconds are in uh different sectors which expand differently and behave differently. 15:35 15 minutes, 35 seconds Uh so that seasonality typically plays out for us in Q3 Q4. 15:40 15 minutes, 40 seconds Right. Right. Right. Right. And and you know one more question I had was see the yield on the golden portfolio like you know the reported ones in our 15:48 15 minutes, 48 seconds presentation show that we are down from say 19.1 to 18.3. So is this like competition effect or maybe we did some 15:57 15 minutes, 57 seconds schemes because this was a peak you know a good season for us or you know generally how how should we expect this yield thing to move like is it already 16:05 16 minutes, 5 seconds that they feel pressure in the market or or you know we still have enough room to do our business at our terms and condition. 16:12 16 minutes, 12 seconds No uh see at a portfolio level when you do a substantial amount of dispersal in a particular quarter and that has been 16:20 16 minutes, 20 seconds an exceptional uh dispersal quarter uh there will be a differential yield which we will play with and we will play with 16:28 16 minutes, 28 seconds uh a little bit um I mean it's a line call when you look at certain states where we want to play that yield so I'm 16:35 16 minutes, 35 seconds not so worried about it uh as the mix of the new business is slightly higher in this particular quarter uh it shows in 16:42 16 minutes, 42 seconds that fashion uh but overall level at an entity level I'm not so worried because that comparation will will uh it's not 16:50 16 minutes, 50 seconds going to uh affect us uh in that in substantial basis point there u so it is a mixed 16:59 16 minutes, 59 seconds issue if the dispersals would have been about uh 300 400 crores you wouldn't have seen that kind of a um depression 17:08 17 minutes, 8 seconds okay okay we'll get it and and you know one last question will be like you know we have grown very well say 16 17% QoQ 17:18 17 minutes, 18 seconds but I think a lot of competition would also be doing that so so you know in our assessment you know it just feels that next three four quarters will be the 17:25 17 minutes, 25 seconds time when you know we have to really utilize our asset like we have such a brilliant gold loan asset you know good processes good number of branches good 17:32 17 minutes, 32 seconds employees um so so I just wanted to you know understand if that this momentum for us you know continues uh uh in in 17:40 17 minutes, 40 seconds that particular fashion And you know maybe we reach 15 16 crores of AUM per branch you know in the coming two three quarters because competition is really 17:47 17 minutes, 47 seconds catching up and maybe we have a year's time where competition will really not be very high and we can like you know just fortify our markets. So just wanted 17:56 17 minutes, 56 seconds to hear your thoughts on the next 12 months on this gold piece. 18:00 18 minutes Yeah. So you you'll have to um I mean in the in the start of the year also I had mentioned to you that uh the growth will 18:07 18 minutes, 7 seconds be in line with the Fina strategy. uh we will be conscious of uh the price uh momentum uh and I had mentioned to you 18:17 18 minutes, 17 seconds that we will be focused on tonnage growth. Uh Fedfina as a strategy year on year over the last five years has shown 18:24 18 minutes, 24 seconds tonnage growth. Uh if you look at last five years we've shown a 10 to 12% tagger on tonnage growth every year. Uh this year also uh in the first two 18:32 18 minutes, 32 seconds quarters the tonnage growth wouldn't you wouldn't have seen but year on year again you will see a 10% tonnage growth. 18:38 18 minutes, 38 seconds So the focus is on tonnage growth. The focus is to take the price momentum but not to ride on it as much as uh you 18:46 18 minutes, 46 seconds should we are conscious of the fact that the price momentum is uh very high. So that is why you see the uh combination 18:54 18 minutes, 54 seconds of LTV and price playing out. We've not capitalized on the LTV. The LTV has allowed to uh go down. Uh so we are 19:02 19 minutes, 2 seconds conscious of that. uh while the growth has to happen uh we need to be conscious that that growth has to be in line with 19:11 19 minutes, 11 seconds what we are um our operational processes as well as the risk that we want to look at the price fluctuations that we want 19:18 19 minutes, 18 seconds to look at. So all in all it has to uh fall in in line with what we are expecting with the gold business to do 19:26 19 minutes, 26 seconds uh and you will see that momentum continuing. we will capitalize on the momentum. But u what I am trying to 19:33 19 minutes, 33 seconds essentially say is uh a a single company which is doing only gold loans is very different from a company which is doing 19:41 19 minutes, 41 seconds a twin product. Um and we will get the advantages of doing a twin product. That is how uh you will have to see our company. 19:50 19 minutes, 50 seconds Yeah. Yeah. just you know we'll not stop our gold loans to maintain that right because if we continue this normal run rate also we'll cross 50% in terms of 19:58 19 minutes, 58 seconds gold loans even so we won't stop it just because we want to you know cap gold at below 50 or anything nothing like that right 20:05 20 minutes, 5 seconds no there is there is no thought in that side it's only going to be the cautiousness on the price side 20:13 20 minutes, 13 seconds perfect price and LTV side uh otherwise our actions over the past quarters have shown you that We've not uh been worried 20:22 20 minutes, 22 seconds on that front. So I just want to add our gold loan growth will be unconstrained. 20:27 20 minutes, 27 seconds Okay. The character of the product mix does not determine how much we grow our gold loan or otherwise. It will continue 20:34 20 minutes, 34 seconds to grow on a faster momentum than the rest of the businesses. 20:39 20 minutes, 39 seconds Perfect. Perfect. Thank you. Thank you both so much for the answers. Uh first come back. Thank you. 20:45 20 minutes, 45 seconds Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. 20:54 20 minutes, 54 seconds The next question comes from the line of Nishin Chawati with Kota. Please go ahead. Yeah, thanks for uh taking my questions. 21:03 21 minutes, 3 seconds Uh you know actually two questions from my side. Uh one was uh you know if you could give some outlook or trajectory of 21:10 21 minutes, 10 seconds uh you know stress loans in mortgages. I think essentially the the the small ticket uh business you know how do we 21:18 21 minutes, 18 seconds see it trending up from here onwards uh you know in the fourth quarter and and the next financial year and uh the 21:25 21 minutes, 25 seconds second is uh you know in terms of how do we the sequential movement in over the last three quarters you know it's kind 21:32 21 minutes, 32 seconds of you yeah uh nish thank you for the question 21:41 21 minutes, 41 seconds uh on the uh small ticket lab uh business. Um just to give a context uh a 21:48 21 minutes, 48 seconds year ago uh we had um mentioned about the stress in the small ticket lab business specifically for our company 21:55 21 minutes, 55 seconds and we had uh guided the uh team here about uh what we are doing in terms of 22:03 22 minutes, 3 seconds action and why our portfolio saw that particular stress. Um and uh we had said 22:10 22 minutes, 10 seconds that there will be certain actions and the kind of uh GMPA uh that you could see over the next uh uh 3 four quarters 22:18 22 minutes, 18 seconds that is still FY26 we had said that uh the GMPAS would uh move up or down but 22:26 22 minutes, 26 seconds we will try and maintain the credit cost below 1%. uh at a entity level. Uh while the flows on the ST lab continue from 22:34 22 minutes, 34 seconds the old book u we have transitioned um quite a bit uh of uh this old book which 22:42 22 minutes, 42 seconds was handled by um see we had a manpower shortage on the collection side and whenever you have a manpower shortage on 22:49 22 minutes, 49 seconds the collection side agencies uh handle this collections and we've transitioned from that piece to in-housing that collection. Whenever you do these 22:58 22 minutes, 58 seconds transitions there is that movement happens uh and which is what we have uh faced uh over the past uh two three 23:05 23 minutes, 5 seconds quarters that trajectory you will see um in Q2 and you've seen in Q3 and Q4 it is 23:12 23 minutes, 12 seconds the same um vintage uh portfolio which is giving us uh those uh flows. uh we are in 23:20 23 minutes, 20 seconds complete control of those flows because there is a predictability which we had seen uh we had seen the kind of uh the 23:27 23 minutes, 27 seconds G&PA that is coming out now we had we had uh predicted that that is the G&PA which will flow in Q3 and uh Q4 uh so uh 23:36 23 minutes, 36 seconds we had guided uh you accordingly and that is where we think uh that once uh we get uh this complete in-house um 23:45 23 minutes, 45 seconds which will happen by Q4 the predictability should be much much better on uh the stress loan side. This 23:53 23 minutes, 53 seconds uh fresh sourcing which is happening on STP is giving us much better um 23:59 23 minutes, 59 seconds numbers on the 12 MO and the 15 MOB as well as the 18 MOB. Uh that uh portfolio 24:07 24 minutes, 7 seconds is looking much better. Obviously it is coming off a new B. Uh obviously it is with lesser seasonality. Uh but we are confident of that uh number flowing 24:16 24 minutes, 16 seconds completely differently. Um that is on the stress loan. Um yields uh CG you want to give color? 24:23 24 minutes, 23 seconds Yes. So thank you Nishan for asking that question. See one thing I wanted to caution uh everybody is that our ease 24:29 24 minutes, 29 seconds has appeared in the investor deck are vitiated by the DA income number and that is precisely why we are focusing on 24:37 24 minutes, 37 seconds core income and core yield. Optically while it may appear that yields have dropped 20 uh to by 20 bits quarter on 24:46 24 minutes, 46 seconds quarter between Q2 and Q3 that is merely because of the fact that in Q2 we had 20 bits of DA income which is not there 24:54 24 minutes, 54 seconds consciously in Q3. So eliminating for DA income the core yield is the same. There 25:01 25 minutes, 1 second has been no yield reduction and our focus continues to be on core yield. We 25:07 25 minutes, 7 seconds will continue to drive that and uh uh I would request uh everybody to look at the yield excluding the impact of BA income. 25:19 25 minutes, 19 seconds I think I think this is uh this is very uh very helpful. Uh thank you very much and all the best. Thank you. Thank you. 25:29 25 minutes, 29 seconds Thank you participants. You are requested to limit your questions to two per participant. 25:36 25 minutes, 36 seconds The next question comes from the line of Pan with Adel Vice. Please go ahead. 25:50 25 minutes, 50 seconds Your line has been unmuted. Please go ahead with your question. Hi, thank you sir. Thank you for the opportunity. Uh two questions on the small ticket lab. 25:59 25 minutes, 59 seconds one uh you mentioned earlier that you were facing some issues in Tamil Nadu in terms of the personal have those been 26:06 26 minutes, 6 seconds resolved that's one uh so will that lead to you know growth in the coming quarters second question is on the yield 26:14 26 minutes, 14 seconds compression bit that you have said uh maybe on the calculated deals I definitely take your point but on the origination yields also the ones that 26:23 26 minutes, 23 seconds are disclosed in the presentation there seems to be 80 basis points reduction over the last three quarters in the small ticket lab. These are the only 20 26:31 26 minutes, 31 seconds basis points the reduction in the medium ticket lab. Could you please uh explain that and going forward how are you 26:39 26 minutes, 39 seconds seeing the on the ground economy in terms of the people's willingness to borrow or ability to borrow? Yeah, those are my questions. Thank you. 26:49 26 minutes, 49 seconds Yeah, Pan, thank you so much uh for your question. on the yield front. Uh apart from the one I explained on uh uh the 26:58 26 minutes, 58 seconds gold side as well as the explanation which uh CVG gave on um uh yield uh two 27:06 27 minutes, 6 seconds uh additional colors. One on the uh small ticket lab business. Uh definitely uh there is an environment 27:14 27 minutes, 14 seconds which is behaving in a particular manner for lower ticket below five lakhs. uh there have been companies which operate in this 27:23 27 minutes, 23 seconds particular segment who have reported there is that MFI uh piece which was happening over the past um uh few quarters uh that has affected that 27:32 27 minutes, 32 seconds particular segment uh which is below five lakhs um and uh some people who 27:39 27 minutes, 39 seconds have uh looked at this business on the STP side also have seen uh a little bit of stress on the seven lakh to uh five 27:48 27 minutes, 48 seconds lakh segment the spillover of the MF ify on that um that particular segment. So um when we've been conscious of that 27:56 27 minutes, 56 seconds over the last uh two quarters uh you've seen uh a slight movement of the ticket 28:03 28 minutes, 3 seconds size for ST lab for us uh we've uh we've reduced the exposure for that five lakh to 7 lakh uh and that's why you see the 28:12 28 minutes, 12 seconds ticket size moving up as the ticket size has moved up a yield uh uh has dropped for the ST lab business there uh there 28:21 28 minutes, 21 seconds is definitely a pressure on yield even on the empty lap segment. Across the board in the industry there is a pressure on empty lap. U we have not 28:31 28 minutes, 31 seconds dropped the yield as much as other players in the market have dropped. Um we've continued to hold the yield on the 28:37 28 minutes, 37 seconds uh medium ticket lap. The stlap yield as I said is uh only being conscious of u 28:45 28 minutes, 45 seconds the environment. I think as the environment eases out uh you will see the trajectory coming back uh there. Your second question was on Tamil Nadu. 28:54 28 minutes, 54 seconds Um we will still wait for Q4 for the business to pick up in Tamil Nadu. Um the Tamil Nadu business has picked up 29:02 29 minutes, 2 seconds but not to the expectation that uh we wanted. Um as I have mentioned to you last uh quarter when specifically asked 29:10 29 minutes, 10 seconds on one particular state. Yes. Uh our business had dropped in uh particular state of Tamil Nadu. Uh we are picking 29:17 29 minutes, 17 seconds it up. It has um moved about 20 30%. Uh but uh still uh some way to go. We 29:25 29 minutes, 25 seconds expect Q4 and Q1 for it to come back to uh the dispersion normaly. Uh the delinquencies there are in control but 29:32 29 minutes, 32 seconds the dispersal normaly for it to come back. We still a little bit cautious there in Tamil. So I'll just add one more thing on the yield on the ST lab. 29:41 29 minutes, 41 seconds See the what you see on the deck is the origination yield in the last 3 months. 29:46 29 minutes, 46 seconds Now that is only 200 crores. So if you see on the book the yield has not even gone down by uh in fact it's gone down by less than 10 bits on the overall small ticket lab book. 29:59 29 minutes, 59 seconds Got it. So thank you for that. I come back. 30:04 30 minutes, 4 seconds Thank you. The next question comes from the line of Shranu Mishlra with Philip Capital. Please go ahead. Uh 30:13 30 minutes, 13 seconds hi P. Good morning. Thanks for the opportunity. Uh so two quick questions. 30:18 30 minutes, 18 seconds The first one is uh we've seen ship in the golden. 30:23 30 minutes, 23 seconds Uh if you can just have a split between what what's been uh the contribution from our new branches here and what's 30:30 30 minutes, 30 seconds been the contribution from the increase in the ticket sizes. Uh second is that uh with the rising gold prices do we 30:39 30 minutes, 39 seconds still expect 10 to 12% t in the pomage growth because that seems unlikely because I will get lower bound of gold 30:47 30 minutes, 47 seconds conducting for the same amount of uh gold loans and the third is uh because we're slightly heavier on the uh 30:54 30 minutes, 54 seconds dispersement in uh gold loans which will also reflect on the am uh in subsequent quarters uh we are going to change the 31:03 31 minutes, 3 seconds borrowing metric uh which is uh slight uh slightly heavier on the longer term. 31:09 31 minutes, 9 seconds I understand during the rate cycle we tend to borrow slightly longer but uh are you going to make it commensate to the gold loan uh to not in the end. 31:19 31 minutes, 19 seconds Thanks. 31:21 31 minutes, 21 seconds Yeah. Thank you Shubranchu. I will just request uh Jadesh to give you a flavor on the new branches and the old branches growth. Jibish are you there? 31:30 31 minutes, 30 seconds Yeah. Yeah. I hope I'm audible right? Yes. Yeah. Yeah, you are. 31:33 31 minutes, 33 seconds So, so, so branchu it's it's uh uh we have opened 58 branches in the last quarter and that has resulted in a uh 31:41 31 minutes, 41 seconds that has contributed to the growth. Uh so if you see the overall contribution of in, 100 odd codes that we recorded in 31:49 31 minutes, 49 seconds this quarter 30% of the growth is contributed by the new branches and balance 70% is still coming from the existing branches. Uh that's on one 31:58 31 minutes, 58 seconds trend on the contribution. Second, your question was on the pure weight growth and its consistency. We see that happening because of where we stand 32:06 32 minutes, 6 seconds today because uh our our our average per brand website is hovering around 12 and a half to 15 crores and we still see a 32:13 32 minutes, 13 seconds big room to reach around 20 crores over the years to come. So that's what our aspiration is and we see uh 10 growth 32:21 32 minutes, 21 seconds playing a key uh uh role uh precisely because uh there is opportunity in the 32:27 32 minutes, 27 seconds market that is one. Second, our our uh incentive structures or KAS uh we have a target incentive which is which is 32:35 32 minutes, 35 seconds linked to the pure weight growth of the branch. So every branch, every employee is driven and uh incentivized based on 32:43 32 minutes, 43 seconds the tenage growth that they do in the branch. So that's that's what our crux is from the day one and that is resulting in such a growth. uh uh while 32:52 32 minutes, 52 seconds I agree with you uh while the price are at a uh uh uh is increasing there will be chances that customers will pledge 33:00 33 minutes lesser gold but there is a new acquisition which is happening which is an engine for us to substantiate and uh 33:06 33 minutes, 6 seconds balance that uh uh trend but we see we see consistency and we we are confident 33:13 33 minutes, 13 seconds that we will we will be seeing 10 to 12% of 10 grow year on uh TV you want to give a flavor on the borrowing. Yeah. No, you fully with you. 33:25 33 minutes, 25 seconds We are going to do exactly what you have said. There is an opportunity there to have a skew towards the shorter end and 33:33 33 minutes, 33 seconds that is exactly uh you know what we will do which will aid in the name expansion going forward. 33:40 33 minutes, 40 seconds Just one question uh to uh uh on the well-known part for the tumage growth uh 33:47 33 minutes, 47 seconds with rising uh prices or even the prices at similar levels that we see today uh 33:54 33 minutes, 54 seconds if we have a tage growth which keeps going on then we are infringing on the bank ticket size which means that it 34:01 34 minutes, 1 second will be in future right is that a fair sorry I I sorry I missed your last point 34:07 34 minutes, 7 seconds uh can you So if we keep doing if we are uh bent on doing percentage worth for gold nodes at similar prices or rising 34:17 34 minutes, 17 seconds gold prices we would infringe on the banks uh turf right which generally do higher ticket size in gold loan which 34:25 34 minutes, 25 seconds means that it will be irutative for our uh gold loan business. Is that a fair understanding? 34:32 34 minutes, 32 seconds Uh no basically uh the the retail ticket size is actually growing. Uh uh probably uh a a guy who is who was eligible for 34:40 34 minutes, 40 seconds 1.5 lakh is today eligible for 2.2 to life with the same goal but uh doesn't seems to be tending towards a bank's uh 34:48 34 minutes, 48 seconds top uh uh if there is a tend uh then the yield pressure will be managed through CLM partnership CLM uh models that that 34:57 34 minutes, 57 seconds persist and uh we we will try to encourage we still uh rely on the uh retail and 35:07 35 minutes, 7 seconds retail is seeing traction we see pure way coming from the retail Wonderful. Those are the questions. I'll come back for the rest of you. Thanks. 35:17 35 minutes, 17 seconds Thank you. 35:19 35 minutes, 19 seconds The next question comes from the line of Chintan Sha with ICIC Securities. Please go ahead. 35:27 35 minutes, 27 seconds Uh yeah uh thank you for the opportunity and uh congratulations on strong set of numbers. Uh so just I had one thing on 35:34 35 minutes, 34 seconds this uh labor code impact. uh so I think we already mentioned the impact is around uh 39 crores for this quarter uh 35:43 35 minutes, 43 seconds but so uh is that a one-time impact or do we see any recurring impact as well uh going ahead uh due to that uh so 35:51 35 minutes, 51 seconds that's the first thing and uh secondly on this gold uh loan so now almost we are 45% on the overall portfolio so even 35:59 35 minutes, 59 seconds uh if that exceeds uh say say around uh 50% or so so that is not a challenge 36:06 36 minutes, 6 seconds right and uh thirdly on this boring cost we have seen a steep decline of almost 60 with Q so do we see any uh more 36:13 36 minutes, 13 seconds anything more to come on that or no yeah thanks yeah so maybe I'll take the uh boring 36:20 36 minutes, 20 seconds cost first okay uh no I think uh you know the the 60 bit false Q is not 36:27 36 minutes, 27 seconds repeatable it's a twopoint average so there may be a skew there I would urge you to go by the you know the quarterly borrowing cost sheet 36:36 36 minutes, 36 seconds where we reported a 33 bits uh reduction from 8.17 to I think 7.87. 36:43 36 minutes, 43 seconds I think that's what you should look at. 36:45 36 minutes, 45 seconds There are opportunities there because as I said uh 41% of our uh the borrowings are still external benchmark the balance are NLR. 36:54 36 minutes, 54 seconds As of now 71% of our borrowings continue to be floating rate as and when the transmission continues to keep happening 37:01 37 minutes, 1 second there is an opportunity there though we would be sanguin about it. 37:06 37 minutes, 6 seconds Now in terms of the labor code uh see the biggest impact has been baked in okay the biggest impact has been the a 37:15 37 minutes, 15 seconds one-time catch up in terms of all the retire benefits like graduity leave and cashment etc due to the basic being uh 37:23 37 minutes, 23 seconds needing to get hiked to 50% of the CTC so that exercise has been done now going 37:30 37 minutes, 30 seconds forward you know how the salaries get revisited does it get passed on does it get adjusted is something which we will watch how the rest of the industry 37:39 37 minutes, 39 seconds adjusts to it. We believe we have the weight cycle in April to look at that and have a little more information on 37:46 37 minutes, 46 seconds how peers are handling it. what we do will be relative to what uh you know the peers do 37:52 37 minutes, 52 seconds right now on the gold uh as of now there is no board limit or internal limit we 38:00 38 minutes have that it should not cross the lakshman raka of 15 50% so we don't have any lakshman raka ultimately we are a 38:09 38 minutes, 9 seconds lap first company but gold is a very strong uh secondary product right now it 38:16 38 minutes, 16 seconds is doing very Well, it is per it would be perfectly acceptable and encouraged if it were to in the short term or 38:25 38 minutes, 25 seconds medium-term take the lead and then uh but overall as as texture we would remain a lab company. 38:34 38 minutes, 34 seconds Uh sure sure. Okay. Thank you. That's from my family. 38:40 38 minutes, 40 seconds Thank you. The next question comes from the line of Sonel Mandas with decision cap investment advisors. Please go ahead. 38:56 38 minutes, 56 seconds Uh Miss your line has been unmuted. Please go ahead with your question. 39:08 39 minutes, 8 seconds So, your line has been unmuted. Please go ahead. Hi, am I audible? Uh, yes sir, please go ahead. 39:16 39 minutes, 16 seconds Okay. All right. Um, my question is with regard to more loans. Sir, I have two questions. First of all, just wanted to 39:24 39 minutes, 24 seconds understand since your yields are around 18 19%. Uh, I'm presuming please correct me if I'm wrong. you competing with the 39:32 39 minutes, 32 seconds likes of Mutu, Managurum and couple of other scaled up gold loan companies. Uh how are you seeing uh competition 39:39 39 minutes, 39 seconds visually the the non-banking scaled up gold loan players? Uh and uh we've seen 39:47 39 minutes, 47 seconds some entry by these players where uh basically there is a directional indication that the yields are expected 39:53 39 minutes, 53 seconds to come down given the competition. Um so that's one. Second question was with regard to your LTE. Uh the LTE seems to 40:02 40 minutes, 2 seconds be a bit higher compared to the non-banking players. Uh so just wanted a subjective feedback from you on that. Uh 40:10 40 minutes, 10 seconds since it's an observation that's all for myself. 40:15 40 minutes, 15 seconds Yeah. See comp as far as competition is concerned um these set of um 8 n players have been operating in this market for 40:23 40 minutes, 23 seconds past u 10 years. Um there there have been certain geographies where each predominates. Obviously there are one or 40:32 40 minutes, 32 seconds two players who are very large and they operate at a a different scale. Uh but the other players tend to predominate in 40:40 40 minutes, 40 seconds particular geographies. We uh have seen growth in the western and uh northern geographies much more than what we have seen in southern geographies. You see that in our investor presentation also. 40:50 40 minutes, 50 seconds Our growth essentially comes from those geographies. our new branches also come from uh those geographies. Uh as far as 40:58 40 minutes, 58 seconds uh yield pressure is concerned whenever see whenever the price goes to the levels that it has gone earlier also 41:06 41 minutes, 6 seconds whenever the price has shot up there will be new players uh coming in um and uh those competition and the yield 41:14 41 minutes, 14 seconds pressures will happen for a short-term period. But uh typically a gold being a vernacular business it is dealt by each 41:22 41 minutes, 22 seconds uh large player very very locally. That means um in the state of Gujarat you will deal uh with the Gujarat market and 41:30 41 minutes, 30 seconds uh you will play the yield there and the Maharashtra market you will deal very very separately depending on what the competition is uh there and who is the 41:38 41 minutes, 38 seconds predominant player. You don't match your yields with every player you match it with the predominant player and how you are operating. Again uh what tends to 41:46 41 minutes, 46 seconds happen is gold being a very local uh business geographically where you are located in that uh particular city and 41:54 41 minutes, 54 seconds that particular town also matters. Uh so competition um also is very very 42:00 42 minutes localized in terms of yield. Um banks operate a very different yield. Um but their location is also very very 42:08 42 minutes, 8 seconds different uh in that particular city itself. Uh as far as uh Jesish, you want to add anything on the gold side or the LTV side? 42:18 42 minutes, 18 seconds Yeah. Yeah. I wanted to address the second point uh uh on the LTV. The concern that is raised this uh raised by 42:25 42 minutes, 25 seconds us, right? Uh on on the LTV, our LTV seems to be on a higher end. But but I would like to correct you. It is not 42:32 42 minutes, 32 seconds higher. It is much much conservative uh compared to any other NBFC player. uh if 42:39 42 minutes, 39 seconds you take uh our onboarding LTV it is at the tune of around 70 to 71%. 42:46 42 minutes, 46 seconds uh today uh regulator has allowed us to go up to 85% for certain ticket price 80% for another ticket size but we we 42:53 42 minutes, 53 seconds are little cautious because of we don't want to take the advantage of the price or the LTV black we are more conscious and more conservative our onboarding LTV 43:01 43 minutes, 1 second has reduced we are we are even even onboarding customers at a much lesser one or two% lesser than the um max cap 43:10 43 minutes, 10 seconds on the portfolio LTV we are standing very comfortably at 59% which is the trend So I don't think uh we are we are 43:18 43 minutes, 18 seconds on higher end we are uh conservative or max at par with the largest player. So that's how No, I understand. I picked up a number. 43:26 43 minutes, 26 seconds I I picked up a number from the dead. 43:28 43 minutes, 28 seconds Thanks for clarifying that. I'll call back in the Thanks for answering the question. Yeah. Thank you. Yeah. 43:35 43 minutes, 35 seconds The next question comes from the line of Mnal Hutra with Equities. Please go ahead. 43:41 43 minutes, 41 seconds Hi. Uh thank you for the opportunity. I just have two questions. One is what what percentage of the of the lap book 43:49 43 minutes, 49 seconds is old age and the second question I had is that you mentioned we wanted to move from DA to code ending. Can you uh throw 43:57 43 minutes, 57 seconds some more color on that? What proportion of the would that be or anything else? 44:07 44 minutes, 7 seconds No, the the um old um the percentage of book on the old 44:15 44 minutes, 15 seconds vintage will be anything sourced uh before FY24 uh is old vintage. So the sourcing which 44:23 44 minutes, 23 seconds has happened after FYI 24 uh we we track it separately and uh we put it as uh new book and that is what is showing us uh 44:32 44 minutes, 32 seconds good color. Um and this old vintage book uh will have its own u play but amongst the old vintage also uh there will there 44:41 44 minutes, 41 seconds will be one or two years which we are tracking very closely and we've uh over the past two three quarters um uh we 44:48 44 minutes, 48 seconds have addressed those uh those flows uh in the in the buckets that you have 44:55 44 minutes, 55 seconds seen. So you've seen our Q1, Q2, Q3 movements and most of the flows are coming from uh those two three years uh 45:02 45 minutes, 2 seconds that we are tracking very closely plus there are certain geography mixes which we are tracking and as we go forward the new mix will increase and the old mix uh 45:11 45 minutes, 11 seconds will come down as far as the DA to coal ending uh is concerned uh CVG this was something which you mentioned. 45:17 45 minutes, 17 seconds Yeah. Hey, sorry ma. What was the question again on DA to coending? 45:22 45 minutes, 22 seconds Sir, you mentioned that we want to cut down on DA and move to co ending. Yeah. So yeah. 45:29 45 minutes, 29 seconds Yeah. 45:31 45 minutes, 31 seconds So from 1st Jan there are the new coending one guidelines which are applicable. Yeah. 45:37 45 minutes, 37 seconds Now there is a accounting change in which the coending one happens compared to the kind of accounting which used to happen for DA. That is all I was trying 45:45 45 minutes, 45 seconds to signal. So the the moving of the lower yield assets off book would continue to happen. It is just that the accounting might differ going forward. 45:55 45 minutes, 55 seconds So I think that and what what was which is why I was pointing more uh for everybody to bear attention to the core 46:02 46 minutes, 2 seconds yields and core interest income rather and maybe eliminate the impact of the DA income there from. Okay. On the first question sorry yeah go ahead. 46:12 46 minutes, 12 seconds No go ahead. Go ahead. Sorry. Now on the first question also see there are very specific geographical cohorts of the 46:19 46 minutes, 19 seconds backbook where the pain is lingering. It is I think it would be unfair to color the entire bad book with that uh the back book with that. Sorry. Yeah. 46:31 46 minutes, 31 seconds So this would be a normalized level for the B income or the say the uh co-ending income that we will see right. 46:40 46 minutes, 40 seconds uh we will watch it uh bea I think I wouldn't want to say that statement okay okay sir and uh the lastly can you 46:49 46 minutes, 49 seconds highlight which geographies are growing our pain right now 46:55 46 minutes, 55 seconds uh no see um the um these cohorts that we had talked about we had uh initially 47:03 47 minutes, 3 seconds also mentioned uh in our um first uh Q uh discussion um that there There are geographies of Maharashtra and Tamil 47:12 47 minutes, 12 seconds Nadu where uh we had seen uh that elevated stress which was in Q3 FI uh 25 and those are the geographies we had 47:21 47 minutes, 21 seconds focused and uh within uh these geographies also we had certain pockets again mna not to color it these are not 47:29 47 minutes, 29 seconds um something which the other players had faced so it was our specific problem for these two states so it was not a state 47:38 47 minutes, 38 seconds specific issue it was a Fedfina state specification. 47:44 47 minutes, 44 seconds What? What? Thank you so much. That's all. 47:49 47 minutes, 49 seconds Thank you. The next question comes from the line of prolin Nandu with aerial voice. Please go ahead. 47:57 47 minutes, 57 seconds Yeah. Hi team. Uh hi P and hi Ganesh. Uh couple of questions from my end. uh one is uh you know you talk about the uh 48:07 48 minutes, 7 seconds drag on cost to income because of uh higher intensity of uh dispersement right uh and that is specifically coming 48:15 48 minutes, 15 seconds from gold uh side of things where you mentioned the AU growth in last 3 months uh my question is that uh uh see on cost 48:23 48 minutes, 23 seconds to income obviously there is this uh drag because of this but then we are uh you know colllocating the branches and at some point of time operating ledger 48:32 48 minutes, 32 seconds should also come into the So where are we in that cycle of cost to income? Because uh we will continue to have a very high growth in gold loan 48:40 48 minutes, 40 seconds going forward as well, right? Uh so do we still continue to see that drag because of higher dispersement uh coming 48:47 48 minutes, 47 seconds in gold loan or uh maybe this quarter uh might uh be something you know different 48:54 48 minutes, 54 seconds and going forward there could be uh you know uh the lesser of an impact on cost of income because of higher dispersment. 49:02 49 minutes, 2 seconds Uh so problem thank you for that question. See what I would urge is uh no it would we want to retain flexibility 49:10 49 minutes, 10 seconds in all the levers in the ROA tree. I think the guidance we would give is what I had outlined at the end of my uh 49:18 49 minutes, 18 seconds narrative that we have delivered over the last four quarters a consistent predictable and increasing ROE. 49:27 49 minutes, 27 seconds I think that perhaps is the guidance you want to take that subsumes opex that subsumes credit cost within those 49:34 49 minutes, 34 seconds parameters where that subsumes the DA income or otherwise that subsumes core yield within all of that I think that 49:42 49 minutes, 42 seconds would be the objective we would continue on and Rahul just to add to what CVJ is saying um again at the start of the year 49:50 49 minutes, 50 seconds um uh when uh the guidance was asked I had mentioned that this year we will be focusing on credit cost FI25 we had 49:59 49 minutes, 59 seconds returned a credit cost of 1.8% 8% and we were very conscious that this year FY26 we wanted to keep it below 1% and that 50:06 50 minutes, 6 seconds is the 80 bibs which is which you will see reflecting in our ROA tree uh and this is the guidance which I had given a 50:13 50 minutes, 13 seconds year ago and that uh having said that I had said that on the OPEC side uh we uh 50:21 50 minutes, 21 seconds we will do a lot of work in this particular year but it will only reflect u in FI27. FI26 is a investment year 50:30 50 minutes, 30 seconds because we are taking a challenging uh task of rebuilding the ST lab business. 50:35 50 minutes, 35 seconds There is going to be investment on the collection side. We went ahead and invested into the gold branches. Uh we went ahead and uh did investment in 50:44 50 minutes, 44 seconds areas on of the small ticket lab business. So these three areas have moved the cost to income uh up. So um 50:53 50 minutes, 53 seconds and the other elements on the cost to income whatever we have reduced uh so it is a um there is some reduction and some 51:02 51 minutes, 2 seconds upside and that is why it has remained flat and in fact I had guided it in in such a manner a year ago that cost to 51:10 51 minutes, 10 seconds income for FI26 will remain flat because we are going to do these uh these additional costs and we will do the 51:16 51 minutes, 16 seconds saving um as we go in FI27 these will start reflecting when we are merging the small ticket lab business uh branches as 51:25 51 minutes, 25 seconds well as when we are uh definitely there is a shaving off which is happening but it is getting neutralized by the new branches that we are putting in uh and 51:34 51 minutes, 34 seconds also the fact that um the the leases take time uh for it uh it to fractify so you only get a three-month effect or a 51:43 51 minutes, 43 seconds six-month effect in a particular year next year you will see the full effect uh playing in uh so that is why uh further I had mentioned that uh you will 51:51 51 minutes, 51 seconds see an effect uh next year on the cost to income side. So basically trying to say that FYI 26 we wanted to address the 51:58 51 minutes, 58 seconds credit cost the cost to income and the uh opex to average assets we will address in FI27 which is where you will 52:05 52 minutes, 5 seconds see the upside on the ROA uh trajectory further uh than what we have delivered in FI26. 52:12 52 minutes, 12 seconds No thank you so much for that I I get your point. Uh the second question would be on this uh uh GMPA right in the 52:19 52 minutes, 19 seconds mortgage division. uh now the uh while you have alluded to this but just to summarize is it fair that large part of 52:26 52 minutes, 26 seconds the increase in V&TA that we are seeing is it because of the older book and could you just help us understand how is 52:33 52 minutes, 33 seconds the performance uh on the asset policy side between newer and older book or some of the uh you know I mean not the 52:42 52 minutes, 42 seconds entire older book as you you know highlighted in the previous answer as well is where we were seeing an issue but if you can just you know help us understand how has been the uh 52:50 52 minutes, 50 seconds performance on GNTA side on the uh newer book. 52:55 52 minutes, 55 seconds Yeah. So there is a substantial difference on the newer book and the older book. When we look at the 12 M O and the 18 M O's uh numbers there is 53:04 53 minutes, 4 seconds almost 100 uh bits uh difference uh 250 bits difference between uh what we are 53:11 53 minutes, 11 seconds seeing on uh uh these two books. Even in the older book there are certain pockets and certain vintages which we have uh 53:19 53 minutes, 19 seconds faced uh challenging situation. Again those challenging situations uh Rahul I will repeat was not necessarily an 53:27 53 minutes, 27 seconds environment issue. It was our issue uh our uh collection team's uh inadequacy. 53:33 53 minutes, 33 seconds We had not invested uh as much in the collection infrastructure which we should have been uh doing a year ago or two years ago. uh but that uh caused uh 53:42 53 minutes, 42 seconds that flow to happen. ST lab business is a heavily invested collections uh business uh which we corrected over the 53:49 53 minutes, 49 seconds past one year. So um last one year has gone in in this particular collection. 53:55 53 minutes, 55 seconds Now we are also seeing a lot of um whichever NPA which we had uh moved the 54:03 54 minutes, 3 seconds buckets in Q1 and Q2 we are seeing NPA recoveries happening here. Uh because you have to also understand that uh many 54:11 54 minutes, 11 seconds times when the um customer is in early buckets recovery uh when he moves into bucket two and bucket three recovery 54:19 54 minutes, 19 seconds becomes difficult. It is advantageous for the company to move it into NPA because then the legal process is much 54:26 54 minutes, 26 seconds easier on the NPS side. Um and the recovery is much better after you drop the uh case into NPA. That is why we 54:34 54 minutes, 34 seconds believe that we are getting certain uh good recoveries also which are happening now. Uh so that is the color on the uh 54:43 54 minutes, 43 seconds GNP side on the old book and the new book. U yeah maybe I'll just add on to that. Uh you know see the roughly the 54:50 54 minutes, 50 seconds way to dissect the problem a little better is that of the mortgage book roughly on the AUM side it's a 60/40 54:58 54 minutes, 58 seconds split between medium ticket lap and small ticket lap. So medium ticket lab there is it's pristine there is no problem. So out of that 40% of the 55:07 55 minutes, 7 seconds mortgage book there is a further split between old book and new book. Okay. Uh now we we would that is not public 55:16 55 minutes, 16 seconds information. Now within that old book further there is a geographical split. 55:20 55 minutes, 20 seconds So actually you are talking about a not so large part of the bad book. That's the comfort we give you. 55:28 55 minutes, 28 seconds Yeah. And around further to give you that comfort is uh when I when we had looked at one year ago and when we had seen the problem and when we had guided 55:36 55 minutes, 36 seconds on the problem that is why we said that we were able to give you a guidance on the credit cost that is what is going to 55:44 55 minutes, 44 seconds be the P&L charge of this uh and in spite of the GNPS being volatile we'll be able to hold uh the credit cost below 55:53 55 minutes, 53 seconds 1%. uh because that time also one year ago I got questions that if the G&Ps move up the trade cost will also be 55:59 55 minutes, 59 seconds unpredictable. We had said that uh we we know the cohorts which we are working on. Uh we we can understand what kind of 56:07 56 minutes, 7 seconds recoveries will happen. We are also dealing with movement of uh the portfolio from the agency side to in-house. It also has to be done in a 56:15 56 minutes, 15 seconds structured manner because you understand that when you get um an allocation which is done done to an outsource agency when 56:22 56 minutes, 22 seconds you are moving it in-house there are droppings uh which happen and every quarter you need to handle those. Uh so as you select the cohorts in particular 56:31 56 minutes, 31 seconds states when they move uh from the agency to inside you can predict what is the 56:38 56 minutes, 38 seconds expected numbers which are going to flow. So that is why uh we had guided accordingly and 56:46 56 minutes, 46 seconds uh we are on uh what I can say is whatever is happening on the GNP side is exactly the way we had predicted it and we had guided uh on on the same. 56:59 56 minutes, 59 seconds Thank you so much Surve and Ganesh for this all the very best. Thank you. 57:09 57 minutes, 9 seconds Thank you. 57:10 57 minutes, 10 seconds The next question comes from the line of Vant Maheshwari with Intelist family office. Please go ahead. 57:19 57 minutes, 19 seconds Uh hi sir just a couple of questions I have with regards to the way we calculate our businesses for regards to 57:26 57 minutes, 26 seconds the gold at what uh consider the tonnage part but is there a lag in the price at which we take for computation of our gold loan aum growth? 57:37 57 minutes, 37 seconds Uh did I lose a connection in between? I couldn't hear your question properly in continuous uh flow. Jagish did you catch it? 57:45 57 minutes, 45 seconds Okay. No, I I I I didn't uh Okay. Uh so what I mean is uh as a whole 57:53 57 minutes, 53 seconds with our tonnage growth and everything want to understand at what particular for our uh AUM computation what price of gold do we take is there a lag of the 58:02 58 minutes, 2 seconds gold price which we take and due to which we see the growth or as a whole we take it at the live prices at the moment. 58:10 58 minutes, 10 seconds Yeah. So to answer it, it is it is uh based on the regulatory lines. Uh we take the 30 days average of the gold 58:17 58 minutes, 17 seconds prices. Uh say uh we have declared Q3 LTV. LTV is based on the 30 days average gold price as 31st December. 58:26 58 minutes, 26 seconds Okay. Got it sir. Uh and just one couple of things you said the AUM is backended and we see that in uh because the gold 58:33 58 minutes, 33 seconds gold ticket sizes uh as a whole like the gold loan we see the revenue recognition a little bit backended right around 6 to 58:41 58 minutes, 41 seconds 8 months is the average tenor. So given that we have been experiencing a large tonnage and AUM growth over the last one year and the gold price has also been 58:49 58 minutes, 49 seconds quite high. Uh as a whole how does it translate into our revenue recognition policies? I just want to understand that flavor as we have seen over the last 18 58:58 58 minutes, 58 seconds months to the uh AUM growth and all has been quite strong but as well the translation doesn't seem that high compared to just the top line just 59:06 59 minutes, 6 seconds wanted to understand that these policies a little bit more no so basically yes go ahead 59:15 59 minutes, 15 seconds I think the back ended uh uh uh point was not on revenue recognition back ended point was on the book that we are 59:22 59 minutes, 22 seconds building for the thrown around the majority of the books happened in the month of November and 59:29 59 minutes, 29 seconds December. So the results uh the earnings of that will happen in the subsequent quarters. Yeah. Got it. 59:37 59 minutes, 37 seconds Uh yeah. Apart from that the gold loan is structured in such a way that you onboard a customer at a rate and there are there are options to the customers 59:44 59 minutes, 44 seconds to pay interest at a uh say after 6 months 7 months at a higher rate. So that's where the will play and uh uh we 59:53 59 minutes, 53 seconds see that happening in as a character of ro with any any player this is a industry fact so now I think the maybe you know he was 1:00:02 1 hour, 2 seconds refering to my point the point I was I made earlier in the call is that see the origination costs yeah the incentives 1:00:09 1 hour, 9 seconds some of the other origination costs are incurred recognized in the month of origination 1:00:16 1 hour, 16 seconds so effectively we do not amortize the origination cost over the life of the gold loan 1:00:23 1 hour, 23 seconds cost getting recognized up front over the next many months. That is all I was trying to say. 1:00:30 1 hour, 30 seconds Okay, fine. I think I have understood this now. Uh thank you so much sir. 1:00:37 1 hour, 37 seconds Thank you. The next question comes from the line of Sepi with Unifi Capital. Please go ahead. 1:00:44 1 hour, 44 seconds Um yeah, hi thanks for the opportunity. 1:00:46 1 hour, 46 seconds I had a question on the credit cost. Uh see for this financial year we have given credit cost guidance of about 1% plus minus 10 which is points. Uh but I 1:00:55 1 hour, 55 seconds just want to understand from you uh what are you thinking for the next uh for the uh credit card prep by 27 in the light that now the proportion of gold loans 1:01:03 1 hour, 1 minute, 3 seconds have actually increased. Uh the book is almost run down and most of the collection infrastructure will be ready 1:01:09 1 hour, 1 minute, 9 seconds by Q4. Uh so on this context uh uh do you need to be any guidance on credit card collect at one point? 1:01:19 1 hour, 1 minute, 19 seconds Yeah. Uh hi. Um see um we have um at the start of the year um guided on a 1:01:28 1 hour, 1 minute, 28 seconds particular credit cost uh because that was the most important item uh on the agenda when uh we had seen an elevated 1:01:37 1 hour, 1 minute, 37 seconds uh GMPA and elevated uh credit cost on the ST lab business. That is why we felt it was necessary to guide on the credit 1:01:44 1 hour, 1 minute, 44 seconds cost. Um uh I think uh next year uh we want to keep it in a predictable zone. 1:01:52 1 hour, 1 minute, 52 seconds Um as uh we had mentioned in our strategy that uh we moved out of the uh BL unsecured business because we wanted 1:02:00 1 hour, 2 minutes to bring predictability to the credit cost. Um and that is the objective and we want to uh get into that zone. Uh so 1:02:08 1 hour, 2 minutes, 8 seconds by Q4 uh once we uh see the uh the numbers on Q4 we we should be able to 1:02:16 1 hour, 2 minutes, 16 seconds give you a guidance on the grade cost uh and it should be very predictable for you. But I think what will be important 1:02:23 1 hour, 2 minutes, 23 seconds for you uh next year for FI27 uh will be our guidance on the opex to average assets because that will be a 1:02:30 1 hour, 2 minutes, 30 seconds crucial number where we will uh show some uh numbers. So um these two 1:02:37 1 hour, 2 minutes, 37 seconds alternatively we will definitely give you a guidance on Q4. Um but um I think uh this year was an important year where 1:02:47 1 hour, 2 minutes, 47 seconds we gave you a particular guidance and we wanted to uh live up to that uh number. 1:02:52 1 hour, 2 minutes, 52 seconds Uh next year I think uh it will be more predictable at your end itself. U the opex number will be more crucial I 1:03:00 1 hour, 3 minutes think. Uh but anyways in Q4 I will give it to you. Sure. Thank you. That's it from my side. 1:03:09 1 hour, 3 minutes, 9 seconds Thank you. The next question comes from the line of Rahul Kumar with Vikaria. Please go ahead. 1:03:16 1 hour, 3 minutes, 16 seconds Yeah. Hi. Uh just one question on the uh the slippages front. Uh so going forward do we expect uh the slippages to you 1:03:25 1 hour, 3 minutes, 25 seconds know remain status quo or improve from here especially in the month? 1:03:33 1 hour, 3 minutes, 33 seconds Yeah, see um as far as the slippages are concerned, FYI 26 quarter 1 to quarter 4 1:03:41 1 hour, 3 minutes, 41 seconds uh we are handling the issue of small ticket lab business who affected us uh as a company uh environment might have 1:03:49 1 hour, 3 minutes, 49 seconds been included inside it but it was our issue and we had said that it will take us a year. Uh we will take that year and 1:03:56 1 hour, 3 minutes, 56 seconds that is where you will see these uh slippages. We have we have as much as possible uh tried to keep it 1:04:04 1 hour, 4 minutes, 4 seconds nonvolatile. Uh we have given a prediction on the credit cost. Uh and we have sustained it and maintained it. Uh 1:04:11 1 hour, 4 minutes, 11 seconds on the slippages side, I think um uh FI27 uh should uh give you a more 1:04:18 1 hour, 4 minutes, 18 seconds predictable uh line on the slippages based on whatever uh flows we have seen uh this uh this year because as I said 1:04:27 1 hour, 4 minutes, 27 seconds uh the the characteristics of the old book and the the certain vintages should play out and we should have a better predictability to those uh slippages. 1:04:36 1 hour, 4 minutes, 36 seconds Plus as I said we'll have a recovery team which will neutralize some of those slippages for us. So there will be a 1:04:42 1 hour, 4 minutes, 42 seconds predictability. So FI26 end is where um uh you will 1:04:49 1 hour, 4 minutes, 49 seconds fi 26 will get utilized in these slippages. Uh 27 should be u of predictable uh nature. 1:04:57 1 hour, 4 minutes, 57 seconds Okay. Okay. 1:05:01 1 hour, 5 minutes, 1 second Thank you ladies and gentlemen. This was the last question for today. I now hand the conference over to the management for closing comments. 1:05:13 1 hour, 5 minutes, 13 seconds Thank you so much uh for the call. Uh uh really appreciate uh we the the closing 1:05:21 1 hour, 5 minutes, 21 seconds comments which we want to give is uh last year u we had um given certain 1:05:28 1 hour, 5 minutes, 28 seconds guidances and certain priorities. Uh over the last four quarters we have stuck to those uh guidances. We have 1:05:35 1 hour, 5 minutes, 35 seconds stuck to those uh uh numbers which we had promised uh and Q1, Q2, Q3, 1:05:44 1 hour, 5 minutes, 44 seconds we have moved uh the needle in terms of uh the parameters which we had promised especially on the ROA side on the credit 1:05:52 1 hour, 5 minutes, 52 seconds cost side. Um we had promised uh that we will work on uh a complete secured construct. Uh we have uh we have stuck 1:06:02 1 hour, 6 minutes, 2 seconds to that. uh we had said we would double down on these two uh gold and mortgage business. We've stuck to that. Uh certainly we have been helped by the 1:06:10 1 hour, 6 minutes, 10 seconds price momentum on the gold side. Uh but we have been very conservative in terms of uh focusing on tonnage growth as well 1:06:19 1 hour, 6 minutes, 19 seconds as on the LTV side. Uh so keeping in mind the risk parameters, keeping in mind the processes, uh we have 1:06:26 1 hour, 6 minutes, 26 seconds consciously grown uh these two businesses. Um and on the STP side also we had said that we will rebuild this 1:06:34 1 hour, 6 minutes, 34 seconds business. We've been doing it uh brick by brick. We are not in a hurry but uh we are conscious of the growth that we want in this particular business. We are 1:06:42 1 hour, 6 minutes, 42 seconds focused on this business. We are investing into this business. We believe this is a business which uh we can do very well. uh um the focusing on these 1:06:51 1 hour, 6 minutes, 51 seconds two businesses and creating an expertise within these two businesses uh is the core uh DNA with which we want to move forward. Thank you so much. 1:07:03 1 hour, 7 minutes, 3 seconds Thank you on behalf of the query securities private limited that concludes this conference. Thank you for joining us and you may now disconnect your lights. Thank you.