Five-Star Business Finance Limited — Q2 FY26

Five-Star Business Finance Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=8UlSBevYFA8 Published: 6 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the FiveStar Business Finance Q2FI26 earnings conference call hosted by DAM 0:09 9 seconds Capital Advisors. As a reminder, all participant lines will be in the listenon only mode and there will be an opportunity for you to ask questions 0:18 18 seconds after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing star then zero on your 0:26 26 seconds touchstone phone. Please note this conference is being recorded. I now hand over the conference to Mr. Sanket Shira. 0:33 33 seconds Thank you and over to you sir. 0:36 36 seconds Yeah thanks. Uh hi and very good evening to all of you. Uh we have with us uh the management of fivestar to discuss their 0:44 44 seconds uh Q2 results and outlook thereafter. Uh we have with us Mr. Lakshmiati din who is the chairman and managing director 0:53 53 seconds and Mr. Shrianak Krishna who is joined MD and CFO. Uh without further ado, I'll hand the call over to uh uh Mr. Lakmati 1:02 1 minute, 2 seconds uh for their opening remarks and then uh uh uh maybe we'll follow up by question and answers. So over to you sir Lakshmi and Lakm. 1:15 1 minute, 15 seconds Yeah. Uh thank uh thank you Shankit. 1:18 1 minute, 18 seconds Uh good evening. We welcome all to the Q2 earnings call. 1:26 1 minute, 26 seconds As we have updated in the last quarter, we have given a stable performance in the current quarter across various 1:34 1 minute, 34 seconds metrics. The downtrend that we witnessed in Q1 has been arrested in the current quarter and from year onwards we believe 1:43 1 minute, 43 seconds that we would see some green shoots emerging in Q3 and a much stronger performance in Q4. 1:52 1 minute, 52 seconds We have taken several strategies and actions towards this across sourcing, credit underwriting, collections and risk oversight. 2:01 2 minutes, 1 second These are marked out as focus areas for us in the quarters to come and we believe this will pave the way for a 2:09 2 minutes, 9 seconds building a bigger and stronger portfolio in coming quarters. 2:15 2 minutes, 15 seconds While while our asset quality and credit cost have seen marginal impact in the current quarter as compared to the 2:23 2 minutes, 23 seconds previous quarter, these still stack up better than many of our peers operating in the small ticket secured and unsecured loan space. 2:33 2 minutes, 33 seconds As I had said in the past also, we believe that a trend reversal is likely on the horizon and is expected to play out over the next couple of quarters. 2:46 2 minutes, 46 seconds Our investment in physical infrastructure and people continues as can be seen from the addition of 33 2:53 2 minutes, 53 seconds branches and 769 business and collection officers during Q2. 2:59 2 minutes, 59 seconds During this quarter we dispersed rups,196 crores of loans as against rupees,290 3:09 3 minutes, 9 seconds crores in Q1 and the drop in dispersement can be attributed to the additional controls 3:16 3 minutes, 16 seconds that have been implemented for the first time during this quarter towards onboarding the right customers. 3:24 3 minutes, 24 seconds With our system getting attuned to these changes, we should see uh we should start seeing increase in disbbursements 3:31 3 minutes, 31 seconds and increase AUM growth in quarters to come. 3:36 3 minutes, 36 seconds Our collections from unique customers and overall collections have remained stable compared to the previous quarter. 3:44 3 minutes, 44 seconds Collections from unique customers stood at 95.1% the same as last quarter. And we have we 3:52 3 minutes, 52 seconds have s we have seen an improvement in the overall collection efficiency which went up from 96.3% in Q1 to 96.7% in Q2. 4:02 4 minutes, 2 seconds These metrics shows early signs of revival though in a gradual manner. 4:11 4 minutes, 11 seconds During this quarter we availed incremental debt of rupees,68 crores and the cost of incremental debt 4:20 4 minutes, 20 seconds came in at 8.56% which is marginally lower than the cost of incremental debt borrowed during previous quarter. 4:30 4 minutes, 30 seconds Cost of the funds on the book has dropped by about 25 27 pips 4:36 4 minutes, 36 seconds and given our cost of incremental debt we should see improvement in the cost of funds for the full year 4:45 4 minutes, 45 seconds with incremental yields on asserts coming in lower than the book yields since we are lower our yields in last 4:54 4 minutes, 54 seconds November we expect to bridge a good portion of the yields drop Through drop in cost of funds, 5:02 5 minutes, 2 seconds we continue to have a robust liquidity on the balance sheet of rups 2360 crores. 5:11 5 minutes, 11 seconds For the quarter, we achieved a PAT of 286 crores, 7% higher as compared to the previous quarter. 5:19 5 minutes, 19 seconds Even during these extremely challenging times, we have been able to achieve healthy return ratios as can be 5:27 5 minutes, 27 seconds evidenced in the increase in return on assets from 7.24% in Q1 to 7.49% in 5:34 5 minutes, 34 seconds current quarter. An increase in return on equity from 16.57% in previous quarter to 16.91% in the current quarter. 5:45 5 minutes, 45 seconds I'm also happy to inform all of you that we have commenced our housing loan product during this month. The first few 5:53 5 minutes, 53 seconds login have come in and in various stages of processing. While this may not have a significant impact on growth for this 6:02 6 minutes, 2 seconds financial year, this would be a lever of growth for the coming years. 6:08 6 minutes, 8 seconds We expect to deliver on the guidance for this financial year that we have given you and look forward to the much better 6:15 6 minutes, 15 seconds and stronger second half of this financial year. Now let me invite Shriant to take you through more on other numbers. 6:27 6 minutes, 27 seconds Good evening to all of you. 6:30 6 minutes, 30 seconds After a difficult quarter in Q1 when we had uh met you all post our Q1 6:38 6 minutes, 38 seconds results we had very clearly guided that we expect the second quarter to be a quarter of stabilization 6:44 6 minutes, 44 seconds and as we speak we stand vindicated in our belief the second quarter has been a stable quarter across various metrics as 6:52 6 minutes, 52 seconds Mr. Pati has pointed out he has touched upon many of the operational metrics. Let me quickly delve into few of the financial metrics 7:01 7 minutes, 1 second and then open out for any questions that any of you may have. 7:05 7 minutes, 5 seconds Our yields continue to be around uh 23 23.2%. 7:10 7 minutes, 10 seconds We have had a good drop in the cost of funds which has come down to about 9.27%. 7:16 7 minutes, 16 seconds So the spreads have fairly remained constant on a sequential basis uh at around 13.9%. 7:23 7 minutes, 23 seconds The NIM again has been consistent on a sequential basis but obviously NIMS have an impact of leverage getting built up. 7:33 7 minutes, 33 seconds So it'll continue to drop as we go forward and have a good portfolio growth. Our cost to income X credit cost is largely stable at around 31%. 7:44 7 minutes, 44 seconds the credit cost guidance that we revised last quarter we have been able to maintain the credit cost at around 1.34% which is very marginally higher than 7:53 7 minutes, 53 seconds what we had in uh Q1. So even across asset quality collections efficiencies and in the credit cost we have remained uh stable. 8:04 8 minutes, 4 seconds This has resulted in an attractive RO of close to 7 12% and an ROE close to 17%. 8:11 8 minutes, 11 seconds uh which are very good numbers given the trying times that we are all uh in from a debt perspective lenders continue 8:20 8 minutes, 20 seconds to see us as a very strong uh borrower so we did avail more than 1,000 crores during this quarter and during the 8:28 8 minutes, 28 seconds quarter we also onboarded JP Morgan one of the largest banks in the world and this was for a very sizable uh 8:35 8 minutes, 35 seconds investment into our PTC's uh of close to about 650 crores about 75 $5 million and 8:42 8 minutes, 42 seconds at fairly attractive rates. So not just any lenders but even pedigreed lenders are looking at fivestar as an attractive 8:49 8 minutes, 49 seconds destination to lend their monies to. So we should be able to build on this foundation and uh which will also aid in 8:57 8 minutes, 57 seconds our asset growth in the quarters to come. 9:00 9 minutes Our collection efficiencies have been largely stable. unique collection efficiency stood at 95.1 and we saw an improvement in the overall collection 9:08 9 minutes, 8 seconds efficiency by about 40 basis points. We believe we should see uh improvements coming in uh Q3 and hopefully a much stronger quarter in Q4. 9:18 9 minutes, 18 seconds Uh on the provision coverage ratio, we continue to hold close to 1.9% of provisions on the overall book while our 9:27 9 minutes, 27 seconds PCR on the stage three assets dropped a little bit. This is purely on account of the write-offs that we have taken. So if you would understand whenever we take a 9:36 9 minutes, 36 seconds write off these are typically deep delinquent assets on which we carry a much larger provision. So there will be a drop in the provision coverage but we 9:44 9 minutes, 44 seconds are still having a very healthy provision coverage on stage three at over 45%. And when you compare this with peers in the industry this still stacks up as one of the uh high numbers. 9:57 9 minutes, 57 seconds On the profitability side, we we had a good quarter. So we uh our profits grew 7% yearon year and on a sequential basis 10:06 10 minutes, 6 seconds we clocked a profit of about 286 crores during this uh quarter and uh which resulted in a net worth of about 6,800 plus crores as of uh September 30th. 10:18 10 minutes, 18 seconds So on on various metrics this has been a calm and a stable quarter. Our belief is that we should start seeing improvements 10:26 10 minutes, 26 seconds coming through in Q3 uh which will pave the way for a stronger Q4 and uh thereafter. 10:33 10 minutes, 33 seconds Uh with these opening remarks, we are happy to take any questions that any of you over to over to the over to all of you for any questions. 10:44 10 minutes, 44 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 10:52 10 minutes, 52 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use the handsets while 11:00 11 minutes asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. 11:19 11 minutes, 19 seconds First question is from the line of Res from ICICI. Please go ahead. 11:25 11 minutes, 25 seconds Yeah. Hi sir. Uh am I audible? Yeah. Yes. Yes Res. 11:31 11 minutes, 31 seconds Yeah. Uh so sir uh two three questions from my side. So one on this uh early bucket pool right. So uh 30 plus has again gone up to sort of more than 12%. 11:42 11 minutes, 42 seconds this highest since co uh so how do you see the urgent bucket moving going ahead I mean obviously you did mention about 11:50 11 minutes, 50 seconds tightening head filters etc but do you see any green shoots in October or or I 11:57 11 minutes, 57 seconds mean any early sign of the bucket pool softening down going ahead 12:05 12 minutes, 5 seconds uh reish our uh thought process is uh going forward at least for the next three to six months we don't want any uh 12:14 12 minutes, 14 seconds buckets to bulge up. So we want to bring in a stable performance across all buckets. So that's our prime focus. If you see unique customers at 95.1%. 12:27 12 minutes, 27 seconds That means there will be some some slipperages from current to aras. So that is inevitable. 12:34 12 minutes, 34 seconds We are we are trying to arrest that in this quarter. Hopefully I'm seeing this quarter the focus will be more on 12:41 12 minutes, 41 seconds current customers. Uh not much slipperages from current customers. 12:45 12 minutes, 45 seconds Eventually this uh 30 bucket will start stabilizing and coming down. 12:53 12 minutes, 53 seconds Okay. I mean uh so basically what you're trying to say is uh the current focus is containing flow powers in the already 13:01 13 minutes, 1 second delinquent pool and the early bucket pool you know might start improving after a couple of quarters is that what 13:08 13 minutes, 8 seconds you are trying to highlight from this quarter onwards is what I'm I'm trying to say what you said is right from this quarter onwards. 13:18 13 minutes, 18 seconds Okay. Okay. Uh and sir my second question is around this uh you know disgustment uh run rate right I mean 13:26 13 minutes, 26 seconds last uh year or so we have added almost 140 branches uh added more than 2,500 people uh but this point has been uh you 13:36 13 minutes, 36 seconds know little curtailed I understand that we have been very guarded when it comes to sourcing new customers etc. uh but 13:44 13 minutes, 44 seconds when do you see uh the disbburusment uh rate uh you know start picking up meaningfully? I mean uh you know when do 13:51 13 minutes, 51 seconds you see this the infrastructure right which we added in last year or so uh start generating business? 14:00 14 minutes uh see as I said in my opening remarks uh uh we have broughten uh the underwriting tightness and risk 14:09 14 minutes, 9 seconds oversightes uh by by creating layers uh before a file even gets into the logging stage. So this kind of controls is very 14:19 14 minutes, 19 seconds new for our system which we have uh done it in last quarter. So close to 5,000 offices are there, close to 1,000 BMS 14:28 14 minutes, 28 seconds are there to get attuned to this new system. It will take some time. So that is why we said in Q3 you will see uh uh 14:37 14 minutes, 37 seconds better performance and very stronger performance in Q4. 14:42 14 minutes, 42 seconds Okay. Okay. So basically uh this quarter uh most of the operating parameters are 14:48 14 minutes, 48 seconds sort of bottom out. I mean disusment uh as well as the uh sort of credit card has picked out. Uh if that's the fair assumption. 14:57 14 minutes, 57 seconds Yes, that's our belief. 15:00 15 minutes Okay, I I do have a few more but maybe I will come back in the queue. Thank you very much and best of luck sir. Thank you. 15:09 15 minutes, 9 seconds Thank you. The next question is from the line of Viral Sha from IFL Capital. Please go ahead. 15:15 15 minutes, 15 seconds Yeah. Hi. uh thank you for the opportunity and uh I would say congratulations on a good set of numbers. Uh Mr. Chapati if you can 15:23 15 minutes, 23 seconds elaborate on uh two things. One is uh the changes that you have highlighted and mentioned also in the press release 15:32 15 minutes, 32 seconds uh with regards to say the sourcing underwriting if you can just elaborate and try to give us a flavor of what are the things that you have changed and 15:41 15 minutes, 41 seconds consequently because of that do you think uh like how much time do you think we will take to go back to say a 1400 15:48 15 minutes, 48 seconds crores kind of a quarterly disbburment run through it that is my first question and the second is on the asset quality front uh while I look at the unique 15:57 15 minutes, 57 seconds collection efficiency remaining stable Q but the overall collection efficiency has started improving. So uh and this 16:05 16 minutes, 5 seconds has been actually accompanied by your net slippage is improving both on stage two and three. uh a first of all do you see uh uh now the recovery starting to 16:14 16 minutes, 14 seconds come back even from delinquent customers and secondly more importantly uh while you're talking of we are on the cusp of it how strong this improvement uh could 16:23 16 minutes, 23 seconds be can we start seeing a 30 plus DPD reducing from uh say 3Q onwards those are my two questions uh probably I'll 16:32 16 minutes, 32 seconds come back and ask you for other questions so I'll start with the second question uh I think uh as I said in The first one 16:42 16 minutes, 42 seconds uh we want to stabilize one more quarter from each DPD buckets perspective. So we are not here to say that reversal will 16:50 16 minutes, 50 seconds start happen in this quarter. We wanted to stabilize in this quarter and we will see the reversals happening uh to the 16:58 16 minutes, 58 seconds extent possible in Q4. That is our plan of action as we move forward. on this we are uh putting in collections effort and 17:07 17 minutes, 7 seconds legal recovery team as I mentioned in last call also a good chunk of legal recovery team has been put in place uh 17:14 17 minutes, 14 seconds where they are starting to yield good results that is why you see uh whenever a NPA gets closed you get lot of arrests 17:22 17 minutes, 22 seconds coming back to us that is why you see the collection efficiency has gone up so the legal recovery team has doing external uh extremely good work and you 17:31 17 minutes, 31 seconds see a lot of uh reversal happening going forward. 17:35 17 minutes, 35 seconds On the first question on the dispersement side uh I think uh the the over uh the levels that what we have 17:45 17 minutes, 45 seconds increased from a supervisory perspective is uh giving us a good result uh just to 17:51 17 minutes, 51 seconds uh share some data in Q1 we had a 25% uh rejection ratio uh whereas in Q2 we had 17:59 17 minutes, 59 seconds a 41% rejection ratio uh compared to login uh files getting So uh that's that is how I measure the 18:08 18 minutes, 8 seconds strength of uh uh layers that we have put in uh from a quality files perspective is showing a good results 18:15 18 minutes, 15 seconds from um from the system perspective. But as I said 5,000 people's uh of uh 18:22 18 minutes, 22 seconds sourcing and thousand branch managers of sourcing attuned to this uh system is new for them. So it will take some more 18:30 18 minutes, 30 seconds time and some more months to get attuned. So uh this quarter we will see better disbbursement comparing to Q2 and a stronger disbbursement coming in Q4. 18:44 18 minutes, 44 seconds Got it sir. Thank you very much. Yeah. Sorry. 18:47 18 minutes, 47 seconds No V I think Mr. Pati has uh confir you know clearly articulated the changes that we have done. uh one other thing 18:56 18 minutes, 56 seconds that we have been highlighting to you even in the past also is the slight shift in focus on customer profile. So 19:03 19 minutes, 3 seconds while the branches have been a little more attuned towards focusing on sub five lakhs ticket size today we are moving the focus slightly towards the 3 19:12 19 minutes, 12 seconds to 5 lakhs and 5 to 10 lakhs. So that also takes a little bit of time. So uh the changes that actually made is in terms of going behind the right 19:20 19 minutes, 20 seconds customers and ensuring that these are underwritten in a stronger manner by stronger people. So we have we have 19:28 19 minutes, 28 seconds added more layers in terms of doing the underwriting checks which has caused a little bit of an impact in uh in this 19:35 19 minutes, 35 seconds quarter but I would say that you know most of that have been ironed out. If you look at September standalone the numbers have been very good. In fact, we 19:43 19 minutes, 43 seconds have crossed more than 500 crores of dispersals in the month of September. Uh and you know, we should start seeing uh good run rate coming in Q3 and Q4. 19:54 19 minutes, 54 seconds Thank you. The next question is from the line of Abijit Deal from Motilal Oswal. Please go ahead. 20:02 20 minutes, 2 seconds Yeah. Yeah. Good evening. So, thank you for taking my question. So the first one is I mean if you could give give some 20:09 20 minutes, 9 seconds geographic color around what is it that we have seen during this quarter. Uh the chab geography is where we have seen uh 20:18 20 minutes, 18 seconds in PS in likewise given that we are expecting Q2 Q3 to be a quarter of stabilization and improvement from Q 20:26 20 minutes, 26 seconds onwards. I mean which are those I mean geographies in particular which will contribute to that. Um the second 20:33 20 minutes, 33 seconds question sir that I had was uh on the guidance front uh now that we are looking at 3Q stabilizing it's much 20:42 20 minutes, 42 seconds stronger improvements on 4Q onwards how is it that we are looking at uh the rest remainder of this year in terms of 20:49 20 minutes, 49 seconds growth in terms of credit costs as well as if you could speak a little bit on FI27 in terms of guidance and lastly sir 20:58 20 minutes, 58 seconds while I acknowledge that um both the MFI and the microlab product that we do are are very different. Um I mean for for at 21:07 21 minutes, 7 seconds least the last couple of quarters right at least in M5 business [clears throat] uh we have seen the the goalpost has 21:14 21 minutes, 14 seconds just kept moving after every quarter. Uh in other words what I mean is we are still seeing u some of the NDFC MFIs 21:23 21 minutes, 23 seconds increasing their credit cost guidance for the coming quarters and the next two year. So, so how would you kind of look 21:31 21 minutes, 31 seconds at that given that in the past we have acknowledged that we also have maybe 40 45% of the customers where there's an 21:39 21 minutes, 39 seconds overlap of micro finance loans. So just those couple of questions you can help me with that. Thank you so much. 21:46 21 minutes, 46 seconds So Abij the first point you know you're talking about the geographic color. Uh like we said I think we have seen you know a good amount of stabilization 21:55 21 minutes, 55 seconds across the various geographies. So there is no specific geography where we can point out uh a more than normalized 22:03 22 minutes, 3 seconds improvement or a more than normalized worsening. uh the one geography which continues to be a little bit of a 22:09 22 minutes, 9 seconds concern is Karnataka where the numbers are still a little higher but given that our portfolio in Karnataka is only about 22:17 22 minutes, 17 seconds 5 to 6% this is not going to have a very significant impact on our overall AVM but otherwise we have seen improvements 22:24 22 minutes, 24 seconds even in the other uh bit of a problematic geography that we had which is Andhra Pradesh even there we have seen uh some bit of improvement 22:31 22 minutes, 31 seconds happening in uh this quarter uh so largely The 18 basis points increase in NPA has been I would say uniformly contributed 22:41 22 minutes, 41 seconds across the geographies. There is no specific geography which has seen significant improvement or uh significant worsening. Uh which is also 22:48 22 minutes, 48 seconds giving us a good hope and belief that uh overall at a macro level also things are getting settled in and from here onwards 22:57 22 minutes, 57 seconds we should start seeing things uh improving. uh so there's no specific concern on nin geography at this point 23:04 23 minutes, 4 seconds of time. The concern again is on the ticket size. So if you look at across uh 23:11 23 minutes, 11 seconds uh our portfolio uh where we see higher delinquencies or higher NPS is still in the sub three lakhs ticket size. So if 23:18 23 minutes, 18 seconds there is a geography with a little more pronounced proportion of sub three lakhs that geography is probably showing up a little bit of a higher number in terms 23:27 23 minutes, 27 seconds of delinquencies and NPS. Otherwise we are not seeing any geographical uh differences u in any of the states. Uh 23:36 23 minutes, 36 seconds coming to your uh uh question on guidance Abijit at this point of time we would like to say that whatever guidance 23:43 23 minutes, 43 seconds we have given you in the past we are not changing the goalpost at this point of time. Uh we still hope and believe that we should be able to deliver on our 23:52 23 minutes, 52 seconds guidance. Mr. Paty also talked about this in his opening remarks. uh we still believe that we should be able to deliver on the guidance that we have uh 24:00 24 minutes given you. So at this point of time there is no change in guidance either on growth, profitability or asset quality or credit cost. Uh sorry could you please remind on the third question? 24:11 24 minutes, 11 seconds So the third question was around this um micro lap and mi where I acknowledge that while the products are very different. 24:22 24 minutes, 22 seconds Yeah ab this is a point that we have anyway you know clearly told you while there is an overlap from an MFI borrower 24:29 24 minutes, 29 seconds perspective the behavior of the borrower is very different when it comes to different products. So while the 24:36 24 minutes, 36 seconds borrower definitely tries or is hopeful that he may be able to get benefits from a secured lap lender also similar 24:46 24 minutes, 46 seconds ajit is is that your line where we are seeing quite a bit of disturbance. No sir I was on mute. Okay. 24:54 24 minutes, 54 seconds Yeah now it's okay. Yeah sorry. Yeah. So what we are saying is while there is an overlap and we saw a temporary issue because uh there was a 25:03 25 minutes, 3 seconds little bit of a behavioral issue from the borrower side when they saw that micro finance had written off their loans the collection efforts had reduced 25:11 25 minutes, 11 seconds uh and there was a hope that secured lenders also will follow that path uh but when they see secured lenders coming to them following up uh you know more 25:20 25 minutes, 20 seconds frequently taking necessary legal actions the behavior definitely changes and that is what we are seeing in this quarter. While it is still happening in 25:29 25 minutes, 29 seconds a very gradual manner, uh we still believe that just because a borrower has taken a micro finance loan which could 25:36 25 minutes, 36 seconds have been uh you know written off uh while his belief might be there. The question is depending on the actions 25:42 25 minutes, 42 seconds that the lender takes the borrower's behavior will also shift. So we are still confident that even those 25:49 25 minutes, 49 seconds borrowers who slipped in Q1 uh we will be able to collect the entire money back from them. But the question is you may 25:56 25 minutes, 56 seconds not be able to do it through let's say a regularization kind of a route like collecting multiple installments from them but you need to bring them back 26:04 26 minutes, 4 seconds towards the behavior of paying one installment every month and then it's just a question of maybe one or two months extension in tenor by which you 26:12 26 minutes, 12 seconds know by which time they will pay up their entire uh loan. So we don't really see any impact in our uh eventual losses 26:19 26 minutes, 19 seconds or in our eventual uh ability to recover from these borrowers. 26:26 26 minutes, 26 seconds Got it sir. This is useful. I just wanted to mention one followup question uh while you said that there is no 26:32 26 minutes, 32 seconds change in guidance um just wanted to understand from next fiscal year onwards uh what should be the steady state uh credit costs now? 26:44 26 minutes, 44 seconds So Vijit uh Vijit uh we have told you in the last call itself the the credit cost guidance change what we said in last 26:53 26 minutes, 53 seconds call from 75 to uh now it's 1.25 25 to 1.35 range will hold it for a shorter 27:02 27 minutes, 2 seconds period of time right uh I don't think uh next year we are going to change the guidance on credit cost this product 27:10 27 minutes, 10 seconds this customer needs this kind of credit cost uh is what that we uh we we have we have concluded and we have told that 27:18 27 minutes, 18 seconds guidance this will hold on for at least next uh uh uh 18 24 months got it sir thank you thank you so much and and I wish your team the very best. 27:29 27 minutes, 29 seconds That's sir. Yeah. Thank you. Thank you. 27:33 27 minutes, 33 seconds Thank you. The next question is from the line of Raghav from Ambit Capital. Please go ahead. Hey. Hi. Uh thanks for the opportunity. 27:41 27 minutes, 41 seconds I just have two questions. One your business officer count is up from 35% versus last year. Obviously the focus 27:49 27 minutes, 49 seconds has been mostly on collections. Uh but when you decide to press for growth, will you continue to hire with the same intensity or will it be lower? uh 27:57 27 minutes, 57 seconds because even the current uh capacity that you are creating uh can be utilized uh you know for growth uh uh so I just 28:05 28 minutes, 5 seconds wanted to understand what are your thoughts on this yeah yes Rago you're you're right on that uh building the infrastructure 28:14 28 minutes, 14 seconds should not stop unless until your business runway looks very uh very dull but our runway business runway looks 28:21 28 minutes, 21 seconds very bright because today the biggest opportunity is small business loans and small secured loans. So we are 28:28 28 minutes, 28 seconds continuously uh creating the infrastructure and if we see the stabilization continuing and uh uh uh uh 28:38 28 minutes, 38 seconds no more uh damages happening to the uh repayments I think then the press uh the the the business has to be moved up. So 28:46 28 minutes, 46 seconds that is what we are expecting in Q3 little bit and Q4 more strongly. 28:53 28 minutes, 53 seconds Understood. So Ra again just rather just giving you a break up the 700 odd offices that Mr. Pati alluded to in his 29:01 29 minutes, 1 second uh thing that also has collection officers. So it's almost like 500 business officers and about 200 collection officers. So we are 29:08 29 minutes, 8 seconds strengthening both sides of the uh uh you know of the operations uh such that we have the necessary infrastructure 29:16 29 minutes, 16 seconds when we want to press the pedal of growth. At the same time we are building a good collection support to ensure that there is no slippages. 29:26 29 minutes, 26 seconds Understood. And and the uh the stability in collection unique collections that we have seen uh in Q2 over Q1 uh is uh is 29:35 29 minutes, 35 seconds uh a result of that. Is that understanding correct? Because of the investments that you've done in hiring collection officers over the last one year. 29:45 29 minutes, 45 seconds That's right. 29:46 29 minutes, 46 seconds Understood. U and uh one more related uh question is that uh you know you said that 1.25 5 1.3% is something that 29:54 29 minutes, 54 seconds should be a steady state number on credit cost. U does that translate into say 4 and a half to 5% kind of static 30:04 30 minutes, 4 seconds NPA right if we were to look at NPA on a static pool uh does it translate uh into that kind of a number around 4 and a 30:12 30 minutes, 12 seconds half 5%. Uh I'm just asking for my modeling purposes. 30:17 30 minutes, 17 seconds So Raa we'll take it offline. Uh we've not really looked at that. The number seems a little high what you're talking about but obviously then on a static 30:25 30 minutes, 25 seconds pool uh whatever we used to guide about three or three three and a half% on a static pool will go up. Uh but I'm not sure if it'll go all the way up to 5% and all that. Let's take it offline. 30:36 30 minutes, 36 seconds Sure. Uh just last question the write offs were quite high this quarter. How much more do you expect to write off in the second half? 30:44 30 minutes, 44 seconds and uh you know uh how should one think about the stage three coverage will you take it back to 50% over time 30:53 30 minutes, 53 seconds this write off the way you should look at rais it is done for the first half of the year so while we have done it in one quarter but it's for the first half of 31:01 31 minutes, 1 second the year so we are talking about let's say a 50 crores uh uh write off that we have done so it's you know broadly I would say 2525 uh but then the next two 31:10 31 minutes, 10 seconds quarters the write off will be a little higher because we would want uh you know the the financials uh allow that and we would want to take benefit of uh 31:17 31 minutes, 17 seconds technical writeoffs. So the write-offs will be a little uh elevated compared to the run rate that you saw in the first half of the year. Uh so maybe from your 31:26 31 minutes, 26 seconds modeling perspective you need to bake in a little higher writeoffs for the rest of the year and uh from a provision 31:32 31 minutes, 32 seconds coverage perspective uh see as we take more writeoffs mathematically the coverage will come down uh and uh you 31:41 31 minutes, 41 seconds know the current regulatory climate is also that they are not really pushing for any specified uh coverage number on stage three. So it'll largely be guided 31:50 31 minutes, 50 seconds by uh our ECL model uh and our LGDs which probably should be somewhere around the 40 to 45% kind of a range. So 31:59 31 minutes, 59 seconds uh you know it is not like we are working with a specified number in mind. Uh it'll be coming out of our ECL model. 32:07 32 minutes, 7 seconds At this point we don't envisage taking it back to 50% just from a number perspective. But if 32:14 32 minutes, 14 seconds the model throws 50% let us say for whatever reason at a later point of time that's the number it will be if the model throws let's say 42% it will be 42%. 32:24 32 minutes, 24 seconds Understood. Uh how much write offs can be built for second hour. 32:30 32 minutes, 30 seconds Any numbers? Why don't we just take it offline? Sure. Yeah. Thank you. 32:40 32 minutes, 40 seconds Thank you. The next question is on the line of Amit Khan from Labernum Capital. Please go ahead. 32:47 32 minutes, 47 seconds Uh hi, thanks for taking my question. Uh so my first question is on OPEX. So if I look at the last couple of years, right? 32:54 32 minutes, 54 seconds Our opex to total assets average assets has been in the 5 to 5% range. Now uh that was a fairly benign credit 33:02 33 minutes, 2 seconds environment. uh going forward as you're guiding to higher credit cost as well as you know beefing up the collection and legal recovery team uh how do you expect 33:11 33 minutes, 11 seconds this ratio to evolve on a steady state basis uh this is again something that we've 33:19 33 minutes, 19 seconds been talking in the past also uh so generally at least for the short to medium-term the guidance continues to 33:25 33 minutes, 25 seconds stand at about 5 to 5 and a half% while we will definitely get some benefit of scale uh we will also be upfronting 33:33 33 minutes, 33 seconds certain investments you know in terms of collection support in terms of technological investments and all that which will continue to keep the opex a 33:40 33 minutes, 40 seconds little elevated uh than where we would like to be so I think you should build in about 5 to 5 and a half% of opexics for the short to medium term 33:49 33 minutes, 49 seconds understood understood second question was on on the on the housing product can you throw some more color in terms of what is the customer profile you're targeting what are the yields ticket 33:58 33 minutes, 58 seconds size and geographies that you're currently looking So see housing product has actually been 34:05 34 minutes, 5 seconds uh introduced in uh in some of the safest and the strongest branches of the company. So in about 175 to 200 branches 34:14 34 minutes, 14 seconds uh we are expecting to lend to the same profile of customers uh slightly you know uh maybe people whose expectations 34:22 34 minutes, 22 seconds are a little higher uh average ticket size of about 6 to 8 lakhs because these are people whose expectations are higher 34:29 34 minutes, 29 seconds uh but maybe the incomes uh from a lap tenure perspective don't match up uh but given that they are going to be using 34:36 34 minutes, 36 seconds this money for housing uh we are expecting an yield somewhere around uh 16 to 18% and lending for up to 15 years 34:44 34 minutes, 44 seconds or so or maybe beyond that depending on the uh requirement of the customer. Uh which which will make the customer qualify for let's say a 78 lakhs kind of 34:53 34 minutes, 53 seconds a loan. Uh so that's the profile and the product characteristics that we are targeting. 35:00 35 minutes Got it. Got it. And you intend to apply for a uh you know separate housing license or how should we think about that? 35:08 35 minutes, 8 seconds uh currently not not now not now I think there is a eco coming back coming back 35:16 35 minutes, 16 seconds got it got it but we we would be disadvantaged right because of the we we can't access NHB housing finance 35:24 35 minutes, 24 seconds uh I think uh Shikant has told you from a debt perspective and the pricing perspective 35:32 35 minutes, 32 seconds is very attractive and we are able to get the current debt at around 8% % and for the housing which is a priority 35:40 35 minutes, 40 seconds sector we may even target lesser than that percentage which will argue well 35:45 35 minutes, 45 seconds for us. So uh debt and pricing will not be a problem. 35:54 35 minutes, 54 seconds Got it. Got it. Thank you and all the best. Thank you. 36:00 36 minutes The next question is from the line of Kal Sha from Cityroups. Please go ahead. Yeah. uh thanks for taking the question. 36:08 36 minutes, 8 seconds So uh firstly uh when we look at in terms of the number of people u maybe on a quarteron quarter basis there's almost 36:15 36 minutes, 15 seconds like thousand which has got uh added uh particularly in the business and uh collections and that too I would say 36:24 36 minutes, 24 seconds like maybe more on the business side. So is there confidence with respect to preparing ourselves for the uh growth? 36:32 36 minutes, 32 seconds Is that uh the right observation? 36:35 36 minutes, 35 seconds Uh yes Kol you're right close to uh 800 uh offices have been recruited in last 36:43 36 minutes, 43 seconds uh quarter. Out of that if you see 600 has gone to business and 200 has gone to collections. A rough figure right? So 36:52 36 minutes, 52 seconds this clearly indicates the focus is back on business. 36:57 36 minutes, 57 seconds uh when the collection gets stabilized as I've been saying in the call uh you see the pedal pressing for the business 37:04 37 minutes, 4 seconds which will happen in Q3 and Q4 yes we are preparing for a good business. 37:10 37 minutes, 10 seconds Got it. And uh secondly on account side is there some rejiging which has happened or maybe have they been moved to some other place because almost like 180 190 people moving out of accounts. 37:22 37 minutes, 22 seconds So is it something like maybe they are getting towards the business side of it? Uh has there been any reasoning? 37:29 37 minutes, 29 seconds No no no no. So Kunal what we have done is you would you would see that number a little more at the operations uh side. 37:35 37 minutes, 35 seconds So earlier we used to have an operations officer and cashier. So the number if you see the drop will be in the cashier side. So we used to have a cashier and 37:44 37 minutes, 44 seconds an operations officer in a particular branch. uh given that the cash proportion has significantly dropped and 37:51 37 minutes, 51 seconds the newer branches the digital adoption has been extremely high what we are now doing is we are only having 1% so not 37:58 37 minutes, 58 seconds having two persons for cashier and operations officer separately we are having a branch support officer so those 38:05 38 minutes, 5 seconds have been mapped under operations so none of the none of the accounts are cashiers people have actually moved to business and all that they are uh 38:13 38 minutes, 13 seconds they'll be doing both uh uh receipting cash receiving in the branches and also doing the operational support for the 38:20 38 minutes, 20 seconds branches by acting as a branch support officer. 38:23 38 minutes, 23 seconds Okay, got it. Almost like 190 of cashiers coming off and operations officer going up by almost 150 also. 38:32 38 minutes, 32 seconds That's right. Yeah, that that's right Kunal. As you seen see in our presentation our digital penetration is 38:40 38 minutes, 40 seconds moving up from uh 81% to 82%. Slowly gradually we intend to take it to 85%. 38:47 38 minutes, 47 seconds So the work of cashiers is going to come down as we go forward. So we are deploying them in the operational work. 38:55 38 minutes, 55 seconds Perfect. Got it. Thank you. Thanks a lot. Yeah. Thank you. 39:01 39 minutes, 1 second Thank you. The next question is from the line of Ajit Kumar from GM Financial. Please go ahead. 39:08 39 minutes, 8 seconds Yeah. Uh thanks for the opportunity. Uh two to three questions from my side. uh first coming to SI26M growth guidance 39:16 39 minutes, 16 seconds again which is roughly 25% versus 18% growth currently our rate in terms of disbbursement become very steep almost [clears throat] around 1,800 to 1900 39:24 39 minutes, 24 seconds crores of disbbursement per quarter is needed in next two quarters versus 1200 to 1400 crores of disbbursement that we are doing currently from last 8 to 9 39:32 39 minutes, 32 seconds quarters do you think this kind of acceleration in disbursement in second half is possible 39:39 39 minutes, 39 seconds Ajit if you look at dispersals in Q4 of Last year we were almost at about 1,400 to,500 crores of dispersals. So if not 39:47 39 minutes, 47 seconds for the issues that we probably faced in Q1 and some consequent changes that we have done because of that uh we would have been dispersing more around let's 39:55 39 minutes, 55 seconds say a 1500600 kind of a dispersal run date in the first half of the year. So to move towards let's say 1,600 to 40:03 40 minutes, 3 seconds 18,800 is not difficult in the second half of the year. Obviously the company will keep the uh you know the necessary 40:12 40 minutes, 12 seconds caution in mind before uh stepping up the dispersals but our point is it is not something that is not doable. Uh we 40:21 40 minutes, 21 seconds have done it in the past and based on our run rate we should be able to do that. So it's not an unachievable number but we'll definitely keep uh you know 40:29 40 minutes, 29 seconds various aspects in mind before pushing the pedal of dispersal. At this point of time we are not uh revisiting our guidance on our growth. 40:38 40 minutes, 38 seconds Sure. Sure. Sure. And on credit cost I just wanted to confirm again FYI 26 guidance is 1.25 to 1.35% right as you 40:46 40 minutes, 46 seconds highlighted just now because the last quarter call credit cost guidance was 1.2 to 1.25. So just wanted to reconfirm 40:52 40 minutes, 52 seconds credit cost guidance for FI26 even last quarter last quarter we said 1.25 to 1.3 1.35 only. So the guidance 41:00 41 minutes stands. So we have not changed our credit cost guidance. It will be about you know around 1.25 to 1.3%. 41:06 41 minutes, 6 seconds And this is as a percentage of AUM right not as a percentage of assets. 41:09 41 minutes, 9 seconds No no no this is as a percentage of total assets. When you compute on em this number will be you know more around one and a half to 1.6%. 41:18 41 minutes, 18 seconds Okay. Okay. Okay. And this last one growth in Tamil Nadalu has been lagging from last few quarters and has come down to believe 10% odd in this quarter. Um 41:27 41 minutes, 27 seconds any issue in Tamil Nadu in terms of growth or asset quality as it is your home state? 41:32 41 minutes, 32 seconds No nothing uh nothing. Tamil Nadu is uh gearing up very well and the collections also is very good. So you see a good 41:40 41 minutes, 40 seconds amount of rundown is also happening in Tamil Nadu when the collections are stacking up very well. So I don't see anything coming up and you'll see uh 41:49 41 minutes, 49 seconds improvement in uh uh this in next 6 months also. So slowly that state will move towards 30% of our overall AUM. 42:00 42 minutes Okay. Okay. Sure. Sure. Thanks. Uh that's it. Thank you. Thank you. 42:07 42 minutes, 7 seconds Thank you. The next question is from the line of Chandra Shakar from Fidelity. Please go ahead. 42:13 42 minutes, 13 seconds Uh yeah. Hi. Uh good afternoon. So uh the yield drop since you've u instituted the disbbursement cut has almost been 42:20 42 minutes, 20 seconds 100 bits on the book. Now typically in one particular year um you have about uh 40 45% is that which has been originated 42:30 42 minutes, 30 seconds in near in that year. Now this year obviously a lesser portion has been originated because dispersements have been slower. Um so how could there be a 42:38 42 minutes, 38 seconds 100 bits drop in book yields uh when only 35% has been originated uh during that year. Have you all uh done some 42:46 42 minutes, 46 seconds differential pricing of some people even below 22% yields? 42:50 42 minutes, 50 seconds Uh no Chandra this is a little bit of a function of the delinquencies as well. 42:54 42 minutes, 54 seconds Uh if you look at accounting methodology or interest acral methodology that follows an ideal schedule whereas as per the Indian accounting standards the 43:02 43 minutes, 2 seconds unpaid interest gets added back to the principle. So let us say if a customer does not pay you are acrewing or you you 43:11 43 minutes, 11 seconds are charging a penal interest which does not get acred on books. But what happens is the interest as per the original schedule is the one which is in the 43:20 43 minutes, 20 seconds numerator while the denominator the interest also gets added. So whenever there is a little bit of a delinquency that gets built up on the portfolio you 43:27 43 minutes, 27 seconds will see a little bit of yield drop. If you want to look at the overall number you should probably add the penal interest to this and uh compute the 43:35 43 minutes, 35 seconds yields but even that will be slightly lower because generally the collections itself has been a little muted right. So it's a function of uh of accounting 43:44 43 minutes, 44 seconds rather than any other any further drops that we have done. Understood. But there's been no change. 43:49 43 minutes, 49 seconds I mean otherwise they would broadly add that at about 22%. Yeah. 22 to 22 and a half. 43:57 43 minutes, 57 seconds Understood. Understood. Uh then just you know uh employee cost growth has been 15% but then the count is up actually 25%. So um like what's happening here? 44:08 44 minutes, 8 seconds How is there such a substantial difference? Um that's the second one. 44:13 44 minutes, 13 seconds No, a lot of the growth has actually come in towards the end of the second quarter. Uh you know because uh collections we were putting people but 44:22 44 minutes, 22 seconds when we saw that things are stabilizing uh like Mr. Pati said the business officers have been added more towards the end of the uh quarter. So you're not 44:30 44 minutes, 30 seconds seeing their cost fully absorbed yet. So that is I would say you know don't look at an opex of 5.07 as compared to 5.47 44:38 44 minutes, 38 seconds on a sequential basis. This is uh you know you should probably build somewhere between 5 to 5 and a half% for the full year. Uh 5.1 is not the indicative 44:47 44 minutes, 47 seconds number that you'll probably see for the full year. 44:51 44 minutes, 51 seconds And and the last question is obviously you you saying that your the recovery legal teams are able to recover from the assets better. My understanding with 44:58 44 minutes, 58 seconds this business is that the threat of recovery works more than the actual recovery. It's very tough to actually recover. Um so I mean and given the 45:07 45 minutes, 7 seconds ticket sizes I mean you can't even use surface. So how are you how does is there been some change that you're able 45:14 45 minutes, 14 seconds to recover more now than in the past? Um yeah yeah Chandra I think I've been 45:21 45 minutes, 21 seconds articulating the uh these things uh uh since beginning. This is a myth that you people think that smaller ticket size 45:30 45 minutes, 30 seconds loans uh properties cannot be sold or uh brought in for action. uh that was a conscious decision that company has 45:38 45 minutes, 38 seconds taken for last 20 years not to go into auction route rather than negotiate with the customer and collect your uh dues. 45:45 45 minutes, 45 seconds That is how we contained our NPA. Uh but having said that in last 2 years uh since listing we started to focus on uh 45:54 45 minutes, 54 seconds bringing the properties of of NPA customers to auction and taking them to the legal proceedings. So we have put in 46:01 46 minutes, 1 second a legal uh chief legal officer 24 months down the line and uh uh today we have close to 150 uh legal people who are 46:10 46 minutes, 10 seconds working on legal recovery. So that is why I said in last conference call also uh earnings call also close to 75 to 80 46:19 46 minutes, 19 seconds crores of NPA will be recovered for the full year. Just to give you the number last quarter uh July, August, September 46:27 46 minutes, 27 seconds close to 20 crores of NPA got resolved in a single quarter. So that again shows 46:36 46 minutes, 36 seconds uh even though a small ticket size the properties are genuine the documents legal documents are very clear and 46:44 46 minutes, 44 seconds buyers are there so that we are able to recover close to 20 crores of resolutions happening from deep deloquent NPs and this will this will continue. 46:55 46 minutes, 55 seconds Thank you. [clears throat] Thank you. The next question is from the 47:04 47 minutes, 4 seconds line of Arvend Ravi Chandran from Sundaram alternates. Please go ahead. 47:10 47 minutes, 10 seconds Hello team. Thank you so much for the opportunity and congratulations on the good set of numbers despite a tough environment. Um sorry. 47:19 47 minutes, 19 seconds Yeah. 47:19 47 minutes, 19 seconds So you're quite low. Could you please keep the mic towards your self and have a louder tone? 47:27 47 minutes, 27 seconds Yeah. Is this better? Yeah, that's better. Yeah. Yeah, better. Please. 47:32 47 minutes, 32 seconds Yeah. Yeah. So like uh I just want some clarification in terms of you know credit card guidance like you know we mentioned 125 to 135 bits. Uh is it on 47:41 47 minutes, 41 seconds like total am or sorry on average am or or like average total it's like you know balance sheet assets we talking it's 47:49 47 minutes, 49 seconds average balance sheet assets total assets. 47:53 47 minutes, 53 seconds Oh okay. Because like you know generally in market like we talk about when we say credit cost it's usually on average. So that's why there was a uh like a like 48:02 48 minutes, 2 seconds you know like that's how so okay. Uh so so if we can like you know you know you know make clarity on like if it is an 48:10 48 minutes, 10 seconds average advances or average it would be better so that everyone would have a clear idea of what we are referring to. 48:17 48 minutes, 17 seconds That is my request and uh we'll take a look. Generally, we have all our ratios on total assets. So, we 48:24 48 minutes, 24 seconds don't want to think this uh you know as a separate uh number uh but we can give you a guidance depending on how the 48:31 48 minutes, 31 seconds trend was in the past in terms of how the how it'll look on an average AM uh but we can take it separately. 48:38 48 minutes, 38 seconds Yeah. Yeah. Yeah. And I would like to understand like the the new housing loan you know uh which we are introducing. Um 48:47 48 minutes, 47 seconds you know like how are we like you know looking to scale it up like is it like you know are we looking to make it like five or 10% something like that over 48:55 48 minutes, 55 seconds next few years how are we looking to scale up uh as a percentage of the overall mix over next few years if you can give some on that. uh it's uh little 49:05 49 minutes, 5 seconds early to uh speak about uh going forward uh but now as we have introduced in 49:12 49 minutes, 12 seconds October month we have picked up close to 125 to 150 safe locations of fivestar 49:19 49 minutes, 19 seconds across India and we have introduced for only for those branches so the login are coming in the processing is going up uh 49:27 49 minutes, 27 seconds maybe in this financial year we may build up close to 150 crores of housing pure housing loan portfolio uh 49:36 49 minutes, 36 seconds translates to 1 one and a half% of our AVM uh going forward let me give you a good color after 6 months of uh uh being 49:45 49 minutes, 45 seconds in this product maybe after the March quarter okay okay can you like just share like 49:54 49 minutes, 54 seconds you know what was the actual write offs in this quarter uh it's about 49 crores 7 okay 50:03 50 minutes, 3 seconds Okay. Yeah. Thank you. I see if I have any more questions. I'll just come back. Okay. Thank you. Thank you. 50:11 50 minutes, 11 seconds Thank you. The next question is on the line of Rahan Sayyad from Tinetra Asset Managers. Please go ahead. 50:19 50 minutes, 19 seconds Oh yeah. Hello. Good afternoon and thank you for uh just I wanted to confirm like my all questions have been answered. So like 50:28 50 minutes, 28 seconds could you please give me the uh economics of new branch that you have added in F 26 specific uh specifically time to break 50:37 50 minutes, 37 seconds even productivity curves relative to earage. 50:42 50 minutes, 42 seconds So Rahan this is similar to what we have been doing in the past also. So every branch typically say takes anywhere between 6 to 9 months for achieving a 50:50 50 minutes, 50 seconds complete break even uh because they are able to log in uh you know we start with about five officers and each officer 50:57 50 minutes, 57 seconds logs in about uh four odd files out of which three get converted uh so which means it's about uh 15 files that gets 51:05 51 minutes, 5 seconds logged in on a on a monthly basis which will roughly work out anywhere to about 50 to 60 lakhs and then when the portfolio reaches about 2 and a half to 51:13 51 minutes, 13 seconds 3 crores we are able to break even uh there are branches which do this in 6 months there are branches which do this in 9 months so if you look at it I think 51:21 51 minutes, 21 seconds historically we have seen that almost 98% of our branches reach this break even between 6 to 9 months there could be some very few outlier branches 51:29 51 minutes, 29 seconds nothing has changed for the newer branches also uh okay okay fair enough and thank you for clarification and good luck for your 51:38 51 minutes, 38 seconds coming thank you the Next question is from the 51:46 51 minutes, 46 seconds line of Sanjay Ladha from Bastian Research. Please go ahead. 51:52 51 minutes, 52 seconds Yeah. Hi sir, thank you for the opportunity. Uh sir, I just wanted to know that you know we are focusing on 51:58 51 minutes, 58 seconds housing ticket size loan book and uh you know what we have observed and listening to various other player most of the players are entering into you know this 52:07 52 minutes, 7 seconds secure segment. So my two question how you see competition in that space and most importantly are you seeing name will maintain at this level given the 52:15 52 minutes, 15 seconds competition will increase and of course you already had highlighted that this is going to drop down going forward as as 52:23 52 minutes, 23 seconds you start taking leverages on that side but if you can highlight more onto that where we see the stabilization taking Please. 52:52 52 minutes, 52 seconds Hello. 53:40 53 minutes, 40 seconds Hello. 53:41 53 minutes, 41 seconds So we are unable to hear you. Are you connected? Yeah. Yeah. Hello. Yeah, I'm connected. Yes. Got it. 54:14 54 minutes, 14 seconds ladies and gentlemen, the line of the management has been disconnected. Please hold while we reconnect them. 54:32 54 minutes, 32 seconds [music] 54:49 54 minutes, 49 seconds Ladies and gentlemen, thank you for being on hold the line of the management is now reconnected. Thank you and over to you sir. 54:56 54 minutes, 56 seconds Uh thank you. Uh is Mr. Sunday there? Yes sir. 55:00 55 minutes So yeah thank you Sunday for patiently waiting on the line. Uh so we understood your question. uh the the housing 55:09 55 minutes, 9 seconds product what fivestar intend to come in uh I think is not comparable with other affordable housing uh players because we 55:18 55 minutes, 18 seconds are not going to be in the uh in in the in the ticket size of uh uh 10 15 20 lakh space as explained in the earlier 55:26 55 minutes, 26 seconds question the the profile of customers whom we have been dealt for last 20 years for those profile of customers we 55:34 55 minutes, 34 seconds find there is a huge space uh for for for the for the house to be built. So our average ticket size for the housing 55:43 55 minutes, 43 seconds product what we have built will be around 7 to eight lakhs. So that is the that is the ticket size and the profile of customers whom we are focusing uh we 55:52 55 minutes, 52 seconds believe the competitions is not as intense as it is if you cross about 10 or 15 lakhs. So we are able to we will 56:00 56 minutes be able to maintain the pricing what we said um that's our commentary as of now. 56:08 56 minutes, 8 seconds So but uh just wanted to take a follow up on that side as as as you rightly said there will be aid of 16 to 18% as 56:16 56 minutes, 16 seconds you alluded and if if my uh thinking is correct on 16 to 18 and on lower of the interest expense on that side you will 56:25 56 minutes, 25 seconds see some uh name moderation on that side and that that uh number on ROA will drop out that as well is my understanding 56:33 56 minutes, 33 seconds right on that side or you know as a company you are thinking on a different line. 56:40 56 minutes, 40 seconds Sanjay obviously housing is not going to give you the ROA that uh that our current product is giving. This is something that we have been talking 56:47 56 minutes, 47 seconds about in the earlier calls as well. Uh housing we are doing it from a product diversification and from the market being available where there are 56:55 56 minutes, 55 seconds customers who are currently being excluded from from our lending. So we will tap into those customers. It will be a stickier product. It will help us 57:02 57 minutes, 2 seconds on the balance sheet side. So combined ROA will definitely drop because in the housing side we are not expecting an ROE which will be like 7% 7 and a2% and all 57:12 57 minutes, 12 seconds that. Even the current product ROA will compress given the increase in leverage but put together we should be able to 57:19 57 minutes, 19 seconds deliver you a 6 and 1 half% ROA and at a good leverage if you're able to push it that should be a attractive RO for the 57:26 57 minutes, 26 seconds investors. So yes, combined basis there will be a compression in ROA but it'll also give a kicker from an RO perspective. 57:37 57 minutes, 37 seconds Thank you sir for the clarification. Uh so my another uh question would be as you know we are very much focused on 57:43 57 minutes, 43 seconds secured loan book side and as I see we have a very low LTV as well. So we are 57:50 57 minutes, 50 seconds very much um you know secured portfolio as we speak. So the stage one and stage 57:57 57 minutes, 57 seconds two increasing and and as you rightly alluded in your previous comment that you will see higher recovery going 58:04 58 minutes, 4 seconds forward and in the past also I have uh check uh checked your numbers so at 58:10 58 minutes, 10 seconds times there is a stage one going towards 101 at FI22 but that not reflected into 58:18 58 minutes, 18 seconds GNPA level but this time the scenario is something different so just wanted to know more clarity already on that side 58:26 58 minutes, 26 seconds what is happening you know I understand the you know the dynamic is such where you know the numbers are going up but 58:33 58 minutes, 33 seconds the previous cycle does not support me and suit me that your numbers are different so before I wanted to 58:40 58 minutes, 40 seconds understand your viewpoint on that side that is the advantage of a secured product in an unsecured product let us 58:48 58 minutes, 48 seconds say a loan flowing into stage one uh one DPD or a stage two uh typically you will it's free flowing into stage three and 58:57 58 minutes, 57 seconds uh the recovery will be very low because the ability to recover on an unsecured loan is very less. Whereas in a secured loan while the customer may slip on 59:06 59 minutes, 6 seconds installment for uh justifiable reasons there may be a good event happening in the family or a bad event happening in the family given that this is a strong 59:14 59 minutes, 14 seconds and an emotionally attached asset the customer will not continuously keep slipping into further buckets. So which 59:21 59 minutes, 21 seconds would mean that you are able to control a lot of flows into NPA. So that is why we have always been saying that our softer buckets will be a little elevated 59:30 59 minutes, 30 seconds whereas our harder buckets will be a lot uh controlled and that is an experience that the company has been seeing for the last not one two years but maybe for the 59:39 59 minutes, 39 seconds last two decades and that that's the nature of the secured loan given the nature of the security you won't see free flows into NPS. 59:47 59 minutes, 47 seconds Uh sir just a followup and it would be last from my end. Uh sir just wanted to understand in the corn call also mad in 59:54 59 minutes, 54 seconds the uh in the previous uh conversations you have alluded that the asset quality on the GNPS side from two to you are 1:00:04 1 hour, 4 seconds expecting from 3.5 and credit cost side has also increased up but in the past never has been that happened. So just 1:00:12 1 hour, 12 seconds wanted to understand why this description we now is the model is something getting different. So just 1:00:19 1 hour, 19 seconds wanted to understand more clarity on that side. 1:00:22 1 hour, 22 seconds Yeah. Uh Tai uh [clears throat] our uh guidance what we gave uh credit cost of 1.25 to 1.35 1:00:31 1 hour, 31 seconds and the NPA's level around uh uh uh 2.25 25 to 2.5 uh takes into account uh 1:00:39 1 hour, 39 seconds because this is the first time we see a overleverage crisis uh from a small ticket borrower segment. So the earlier 1:00:48 1 hour, 48 seconds crisis uh was not uh done by the lenders, it was being by the environment and uh from the from a government 1:00:56 1 hour, 56 seconds perspective from demon and covid. So we were able to come out of that because the cash flows were uh uh uh safer and 1:01:03 1 hour, 1 minute, 3 seconds clearer. Even current scenario the cash flows are there but the overlever has been made a big dent in the uh repaying 1:01:12 1 hour, 1 minute, 12 seconds capability of the uh sub three lakh segment. So that is why we have revised our guidance from 75 credit cost to 1.25 1:01:22 1 hour, 1 minute, 22 seconds to 1.35 and our NPA sub 2% to around 2.25 25 to 2 5%. At least for the shorter term. So 1:01:32 1 hour, 1 minute, 32 seconds and clearly uh with this kind of yields you cannot operate for a longer period of time at uh at the credit cost and the 1:01:41 1 hour, 1 minute, 41 seconds NPA where fivear was handling in last 10 15 years because the competition is also going up in the segment people people 1:01:49 1 hour, 1 minute, 49 seconds lend more and uh uh so so you you have to be adjustable according to the environment. Uh that's why we changed 1:01:57 1 hour, 1 minute, 57 seconds the guidance in credit cost and NPA from last quarter onwards. So thank you so much for the clarity. 1:02:05 1 hour, 2 minutes, 5 seconds All the best. Thank you. Yeah, thank you. 1:02:10 1 hour, 2 minutes, 10 seconds Thank you. The next question is from the line of Banti Chavela from ASK Wealth. Please go ahead. 1:02:17 1 hour, 2 minutes, 17 seconds Thank you sir. Thank you for giving the opportunity and congrats on a good set of numbers. one just one clarity uh FYI 1:02:24 1 hour, 2 minutes, 24 seconds 26 EM growth still stands at 25% for full year right yeah we expect to deliver that 1:02:33 1 hour, 2 minutes, 33 seconds okay secondly on the spreads per se uh as you have said now we are focusing more on higher ticket uh higher ticket 1:02:41 1 hour, 2 minutes, 41 seconds side customers where the yields are bit low so going forward uh this yields as we have seen in last five six quarters 1:02:49 1 hour, 2 minutes, 49 seconds has come down to 13.9% kind of a What should be the sustainable run rate when we are focusing on higher uh ticket size loans? 1:02:59 1 hour, 2 minutes, 59 seconds We talking about spread uh not on yield. Yes. 1:03:01 1 hour, 3 minutes, 1 second So the spread spread will be about 13 to 13 and 12% on a steady state. 1:03:07 1 hour, 3 minutes, 7 seconds Okay. 13 to 13 1.5%. Although we are having a still uh having a chance to decrease the cost of borrowings. We have 1:03:15 1 hour, 3 minutes, 15 seconds a space for that. But there will be a there will be a little more compression in yield also uh as as the loans uh keep 1:03:24 1 hour, 3 minutes, 24 seconds building up because today we are onboarding loans at 22 and a half%. So it'll come down more to around 22 and a half to 23 and whatever cost of so I 1:03:32 1 hour, 3 minutes, 32 seconds think 13 and a half should be a should be a good number to work around. 1:03:38 1 hour, 3 minutes, 38 seconds Okay. Okay. Okay. and any any guidance similar guidance for FI27 if you can share likeum credit cost which you have shared for 26. 1:03:48 1 hour, 3 minutes, 48 seconds Uh similar numbers yeah I think for FI 2627 on the spread side we should be at about 13 to 13 and a half%. 1:03:55 1 hour, 3 minutes, 55 seconds And am growth and credit cost for FI27 we will come back to you. So at this point of time you know given the kind of 1:04:03 1 hour, 4 minutes, 3 seconds environment that we are living with uh we'll we would like to deliver the FY26 numbers but generally you know uh we 1:04:10 1 hour, 4 minutes, 10 seconds come back to you towards the end of the year uh with guidance on the next year I think please hold till then we'll come back to you with our guidance. 1:04:18 1 hour, 4 minutes, 18 seconds Okay. Okay. Thank you. Thank you and best of luck. 1:04:25 1 hour, 4 minutes, 25 seconds Thank you. The next question is from the line of Abishek Gulati from AG Wealth. Please go ahead. 1:04:32 1 hour, 4 minutes, 32 seconds Hi. Am I audible? Yes. 1:04:35 1 hour, 4 minutes, 35 seconds Yes, sir. Yeah. Yeah. Actually, I was observing the numbers of other like lenders in the same regions that are doing asset back lending. How are they 1:04:44 1 hour, 4 minutes, 44 seconds reporting a bit of a like a strong asset quality and a loan book growth? So, could you highlight like uh is it the case with us or like as we are also 1:04:53 1 hour, 4 minutes, 53 seconds doing asset back lending? So in that don't we add that thing that the person is having a more mfi exposure we should 1:04:59 1 hour, 4 minutes, 59 seconds like be lending less to them. Uh so have we added these checks now or we were missing them previously? 1:05:08 1 hour, 5 minutes, 8 seconds We have always had this checks. So when we are lending the loan we look at all the uh you know borrowings that he has 1:05:15 1 hour, 5 minutes, 15 seconds taken. We look at his leverage. We uh we knock off all those obligations and uh you know go with conservative debt burden ratio of 50%. 1:05:24 1 hour, 5 minutes, 24 seconds But what has happened is post taking our loan if he has gone and leveraged himself more by taking more from MFIs 1:05:31 1 hour, 5 minutes, 31 seconds for whatever reason uh they have been giving the loan to him. Now how do you control that? So the question is not 1:05:38 1 hour, 5 minutes, 38 seconds about us not having those checks. The checks have been existent for the last 10 15 years when we've been operating in this. It is just that post taking our 1:05:46 1 hour, 5 minutes, 46 seconds loan there have been more leverage that the customer has uh borrowed. Today that is something that you can't do anything right but we ensure that through the 1:05:54 1 hour, 5 minutes, 54 seconds security we have the priority uh on the customer uh repayment. So he will typically pay us rather than paying a micr finance customer. 1:06:03 1 hour, 6 minutes, 3 seconds Understood. Uh now like in the quarter to FR26 like two three micr finance company those who have come up with the results they have highlighting in the 1:06:10 1 hour, 6 minutes, 10 seconds conference calls as well that the asset quality is improving and in future it will keep on improving from here on. So also also are you witnessing the same 1:06:18 1 hour, 6 minutes, 18 seconds trend uh in the MFI borrowers as your like borrowers are having that loan as well. So witnessing that the things are gradually improving in the MFI category as well. 1:06:30 1 hour, 6 minutes, 30 seconds We are seeing this across the board. So it is not like an MSI category is improving or a nonfi category is deteriorating. The good part is yes on 1:06:38 1 hour, 6 minutes, 38 seconds the MSI category maybe the whole leverage is not getting built up. on the non MFI category also things are uh looking up which is why we have been 1:06:46 1 hour, 6 minutes, 46 seconds able to deliver a stable quarter uh in Q2 and you will see improvements happening from here onwards 1:06:54 1 hour, 6 minutes, 54 seconds understood that's all from my end and hope things should improve from here on for us as well 1:07:03 1 hour, 7 minutes, 3 seconds thank you the next question is from the lion of Maru Kadhania from Noama please go ahead 1:07:11 1 hour, 7 minutes, 11 seconds Yeah. Hello. Uh my first question is on credit cost again. Uh so in terms of 1:07:18 1 hour, 7 minutes, 18 seconds your guidance, the credit cost guidance will stay here as in at 1.25 to 1.35 for 1:07:26 1 hour, 7 minutes, 26 seconds 18 months. That's because of the below three lakh segment or just because of the earlier strong growth which leads to the seasoning of the book. 1:07:37 1 hour, 7 minutes, 37 seconds uh so on account of two reasons Mar one is uh because of the sub3 lakh segment which is still undergoing some bit of a stress so it's not going to come out in 1:07:46 1 hour, 7 minutes, 46 seconds a hurry the second reason I think few minutes back Mr. Pati was also taking that you cannot keep putting undue stress on these borrowers uh or on our 1:07:55 1 hour, 7 minutes, 55 seconds staff to ensure that you know there will be no flow forwards or uh the uh unique customer collections will be at a very 1:08:03 1 hour, 8 minutes, 3 seconds very healthy level. So we need to uh have a little bit of a flexibility which is why we are saying that our earlier 1:08:10 1 hour, 8 minutes, 10 seconds guidance of 100 basis points is a little bit of a stress target and we have moved this to about 1.25 25 to 1.35 which will 1:08:18 1 hour, 8 minutes, 18 seconds give a little bit of a breather in terms of uh you know for our uh staff and we have the yields and the spreads to 1:08:26 1 hour, 8 minutes, 26 seconds absorb this. So it's a combination of these two reasons. 1:08:30 1 hour, 8 minutes, 30 seconds Got it. And just in terms of uh growth accelerating in the second half and then even more in FI26. 1:08:39 1 hour, 8 minutes, 39 seconds Do you see any green shoes for growth or was there some growth that you were earlier avoiding and now you feel more 1:08:46 1 hour, 8 minutes, 46 seconds comfortable doing? And of course I heard on you on the bit of housing growth that or affordable housing that you would be looking at. 1:08:56 1 hour, 8 minutes, 56 seconds So the first point is which I think all of you are aware the over leverage is certainly coming down and uh you know even MFI lenders have been talking about 1:09:06 1 hour, 9 minutes, 6 seconds uh the proportion of greater than three loans coming down in their portfolio. So which means the strength of the borrowers is that much better. The 1:09:14 1 hour, 9 minutes, 14 seconds second reason is we have now put additional filters and additional controls to ensure that the right borrower is being onboarded. Uh so with 1:09:23 1 hour, 9 minutes, 23 seconds these two filters once our branches and our staff get attuned to onboarding the right customer uh and our underwriting 1:09:32 1 hour, 9 minutes, 32 seconds norms being able to filter the borrowers a lot better we should be able to build a stronger portfolio. Uh with the attunement getting better the ability to 1:09:40 1 hour, 9 minutes, 40 seconds onboard more customers will also increase which will mean better growth. Okay. Thanks a lot. Thank you. 1:09:52 1 hour, 9 minutes, 52 seconds Thank you. The next question is from the line of Siraj Khan from Ascendency Capital. Please go ahead. 1:09:59 1 hour, 9 minutes, 59 seconds Uh uh thank you for the opportunity and a good set of numbers. Uh hopefully I'm I'm audible. uh what what I wanted to 1:10:07 1 hour, 10 minutes, 7 seconds know with respect to the growth breakdown I know you are uh not you have said that we'll look at the guidance for 1:10:14 1 hour, 10 minutes, 14 seconds fi 27 later but say assuming it's at 25% or whatever number I believe because we are moving out moving to a higher ticket 1:10:22 1 hour, 10 minutes, 22 seconds size the large part of the growth will come from the higher ticket size and because of housing again technically a a 1:10:30 1 hour, 10 minutes, 30 seconds move to to a product which is of a much higher ticket size so a large part of the growth will be driven by ticket size 1:10:37 1 hour, 10 minutes, 37 seconds in uh ticket size improvement. Will that be correct understanding? 1:10:42 1 hour, 10 minutes, 42 seconds Yeah. Uh the ticket size increase is uh right because last call last last earning call itself we said our focus 1:10:49 1 hour, 10 minutes, 49 seconds will be 3 to five lakhs which is our core and 5 to 10 lakhs is where our exposure will go up. So yes a 1:10:57 1 hour, 10 minutes, 57 seconds combination of these two will will result in increase in ticket size but housing loan as I said in open open 1:11:05 1 hour, 11 minutes, 5 seconds commentary I mean opening remarks itself we have just launched it few files have come in and the process is on so we 1:11:13 1 hour, 11 minutes, 13 seconds don't expect more than 150 crores of uh am getting built in housing so that will not contribute much of that 1:11:21 1 hour, 11 minutes, 21 seconds increase in ticket size and increase in offices count will definitely uh give us a good result in Q3 and Q4. 1:11:30 1 hour, 11 minutes, 30 seconds No. So I was also looking at from a longerterm perspective say like FI28 or FI30 perspective by that time the ticket 1:11:38 1 hour, 11 minutes, 38 seconds size will materially increase because of both of us moving to higher ticket size on our core business and also on account 1:11:44 1 hour, 11 minutes, 44 seconds of uh affordable housing. So let's say like 50% of the of the growth would come from the ticket size is what I was 1:11:52 1 hour, 11 minutes, 52 seconds getting at. I I got that uh I I agree this but at at current uh 1:11:58 1 hour, 11 minutes, 58 seconds moment uh let's not more talk about forward so we can talk much about uh after this financial year. 1:12:07 1 hour, 12 minutes, 7 seconds Got it. Got it. And uh just a couple of clarifications of of the 49 crore write off how much is the technical write off 1:12:14 1 hour, 12 minutes, 14 seconds uh and the overall and the total write off the breakup of that in that could be for us all of all of the loans are only 1:12:22 1 hour, 12 minutes, 22 seconds technical write off because we do have the properties and we'll be able to get good recoveries out of this. It's only a question of time. 1:12:29 1 hour, 12 minutes, 29 seconds Okay. Okay. Uh nextly on the fee income so what I can see our fee income has has 1:12:36 1 hour, 12 minutes, 36 seconds improved a good bit during the during the quarter. Uh what is the fee income that we are uh that we are tapping into 1:12:44 1 hour, 12 minutes, 44 seconds that it is increas increasing and will this be also like like a kind of a cushion that we are adding to our spreads and the overall means uh and 1:12:52 1 hour, 12 minutes, 52 seconds where do you see this piece with respect to the fee income going uh moving ahead? 1:12:58 1 hour, 12 minutes, 58 seconds See on the fee income this is on account of two things uh or technically one thing which is a legal and an inspection fee that we take from the from the 1:13:07 1 hour, 13 minutes, 7 seconds customers uh for logging in the loan and for processing the loan which is about 4,000 rupees 2,000 taken up front and 1:13:13 1 hour, 13 minutes, 13 seconds 2,000 taken later. So as the login uh increase and as the dispersements increase this number will look up. So it 1:13:21 1 hour, 13 minutes, 21 seconds has just gone up from about 9.6 crores to 11.2 2 crores which is primarily improvement in login that have happened during the quarter. So there's there's 1:13:29 1 hour, 13 minutes, 29 seconds no big aation so depending on whatever disbbursements you are uh modeling you know you'll have to take uh a similar uh 1:13:37 1 hour, 13 minutes, 37 seconds increase in the fee incomes okay actually I was looking on a y basis so it was 6.7 to 11.2 too. But that that 1:13:45 1 hour, 13 minutes, 45 seconds is fine. So there is no insurance anything of that sort in the fee income. 1:13:51 1 hour, 13 minutes, 51 seconds We we just have a just this legal inspection. No insurance fee income anything of that sort. 1:13:56 1 hour, 13 minutes, 56 seconds We don't so we don't uh take any insurance commission whatever it is. 1:14:00 1 hour, 14 minutes This is just legal inspection and we take 500 rupees for storage cost. So nothing beyond that. Got it. Got it. 1:14:08 1 hour, 14 minutes, 8 seconds uh and with respect to the uh uh credit cost just to uh clarify the 1.3 uh in 1:14:17 1 hour, 14 minutes, 17 seconds what I wanted to understand was the the out of the 1.35% a big part a big part of it will be our 1:14:26 1 hour, 14 minutes, 26 seconds PCR the provisions that we do so do we intend because we want to maybe say bring our overall G&P also and NPA down 1:14:36 1 hour, 14 minutes, 36 seconds so will we take make a conscious call to have a management overlay or something of that sort to pushing beef up our provisions so that the asset quality 1:14:44 1 hour, 14 minutes, 44 seconds kind of remains stabilized kind of a liquid kind of a buffer created. 1:14:50 1 hour, 14 minutes, 50 seconds See most of our ECL provisioning comes from the model because we have a very robust ECL model which has been working for the last about 7 8 years uh without uh any major tweaks that we have done. 1:15:01 1 hour, 15 minutes, 1 second So most of it will be from the model. 1:15:04 1 hour, 15 minutes, 4 seconds Obviously there will be some overlays that we that we'll build in for specific uh event based occurrences like if there is a little bit of a stress in Karnataka 1:15:12 1 hour, 15 minutes, 12 seconds that we are seeing because of the ordinance we'll maintain a little bit of a higher provision there. So but most of it will be coming in from the model itself. 1:15:20 1 hour, 15 minutes, 20 seconds Understood. And final final couple of we we are seeing a trend in the secretization moving a bit higher this 1:15:27 1 hour, 15 minutes, 27 seconds quarter. It's 20% of the total borrowing profile. uh how how do you see this moving and because this will also impact 1:15:35 1 hour, 15 minutes, 35 seconds our P&L there there will be a good uh you know impact on the P&L on the positive side because of the uh 1:15:42 1 hour, 15 minutes, 42 seconds upfronting and reversal so where do you see that going firstly please understand these are PTC transactions there is no upfronting of 1:15:51 1 hour, 15 minutes, 51 seconds income there is no offbook treatment so these are treated as onbook assets these are treated as borrowings so that is why we do this these are not assignment transaction where we upront the income. 1:16:02 1 hour, 16 minutes, 2 seconds So from that perspective, this is treated like any borrowing. So if a borrower is comfortable doing a term loan, we are happy. If they are 1:16:09 1 hour, 16 minutes, 9 seconds comfortable doing an LCD or a PTC or a bond or whatever it is, we are agnostic about that. Understood. Thank you for the clarity. And finally with respect to 1:16:18 1 hour, 16 minutes, 18 seconds the you know states in which this upfoldable that we have uh started which states or 1:16:27 1 hour, 16 minutes, 27 seconds any specific state or or a group of states that we have uh started this uh uh it's not specific states across 1:16:35 1 hour, 16 minutes, 35 seconds six states we have chosen the most safest and uh vintage location and we are uh we introduce the product in those locations. 1:16:45 1 hour, 16 minutes, 45 seconds Underscore. underscore and finally on the other locations I mean Maharashtra and other other states that that have been that they've been there how do we 1:16:53 1 hour, 16 minutes, 53 seconds see the plan going ahead I mean do we still look to consolidate or or do we go to growth in the coming 1:17:02 1 hour, 17 minutes, 2 seconds quarters if you're specifically asking about Maharashtra yes that is a turnaround state for us we'll definitely grow the 1:17:09 1 hour, 17 minutes, 9 seconds state in the coming quarters but there are few other states which will continue to be in an experimental mode we are trying to understand the geography 1:17:17 1 hour, 17 minutes, 17 seconds understand the borrower behavior and these are Gujarat, Rajasthan, Uttar Pradesh. So you know there will always be a combination of matured states which 1:17:25 1 hour, 17 minutes, 25 seconds will be growth drivers for us and early states uh which will which will be experimental areas and then which will help us with growth in the future years. 1:17:35 1 hour, 17 minutes, 35 seconds S if there are any further questions I think we're happy to connect with you offline. Oh thank you that was it that was it. Thank you. 1:17:43 1 hour, 17 minutes, 43 seconds Thank you. So uh can we take a last call or last two calls? 1:17:48 1 hour, 17 minutes, 48 seconds Thank you. This will be the last question from the line of Shabbrancho Mishra from Philip Capital. Please go ahead. 1:17:57 1 hour, 17 minutes, 57 seconds Hi good evening. So the uh first question is with respect to the penal interest while I see the 30 plus and the 1:18:05 1 hour, 18 minutes, 5 seconds GNPI moving. However, I don't see the uh change in penal interest by uh by a huge 1:18:13 1 hour, 18 minutes, 13 seconds margin. Second is if we can speak about the concentration of the top 50 branches 1:18:20 1 hour, 18 minutes, 20 seconds uh top 100 branches and the top 200 branches. These are my two questions. 1:18:26 1 hour, 18 minutes, 26 seconds Thanks first of all penal interest is accounted on receipt basis and not on approval. So 1:18:34 1 hour, 18 minutes, 34 seconds irrespective of the GMPA moving up or moving down it depends on the collections and just because the GMPA is move up you know you're not going to get 1:18:42 1 hour, 18 minutes, 42 seconds as much of interest collections but these numbers this number will keep moving out depending on areas in the coming quarters. Uh see on your second 1:18:50 1 hour, 18 minutes, 50 seconds question let's connect offline because at this point of time we don't have readyate answers on the top 50 100 200 branches but we can connect offline and 1:18:58 1 hour, 18 minutes, 58 seconds give you the details right sure thank you 1:19:08 1 hour, 19 minutes, 8 seconds due to time constraint that was the last question I now hand over the conference over to the management for the closing comments. Yeah. Uh thank you. Uh thank 1:19:16 1 hour, 19 minutes, 16 seconds you all for attending this call. As we said uh the this quarter has been uh uh 1:19:23 1 hour, 19 minutes, 23 seconds very stable and uh going forward Q3 and Q4 we expect that growth can uh will 1:19:30 1 hour, 19 minutes, 30 seconds come back and we will uh meet you soon after the Q3 numbers. Thank you. 1:19:42 1 hour, 19 minutes, 42 seconds On behalf of Dam Capital Advisers Limited, thank you for joining us.