Five Star Business Finance Ltd — Q4 FY26

Five-Star Business Finance Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=f3g8J8wwo6A Published: 2 weeks ago

0:00 Ladies and gentlemen, good day and welcome to the FiveStar Business Finance Limited Q4 FY26 earnings conference 0:10 10 seconds call. As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to 0:18 18 seconds ask questions after the presentation concludes. Should you need assistance during this conference call, please 0:26 26 seconds signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being 0:33 33 seconds recorded. I now hand the conference over to Mr. Raav G from Ambbit Capital. Thank you and over to you sir. 0:42 42 seconds Uh good morning everyone. On behalf of Ambit Capital, I would like to welcome you all to the uh Q4 FI26 earnings call for fivestar business finance. Uh 0:51 51 seconds joining us from the management today we have Mr. Lakshmittati Bindalan chairman and managing director, Mr. Shrihan Gopal Krishnan, joint managing director and 1:00 1 minute CFO and Mr. Prashant, chief of treasury and investor relations. I thank the management for the opportunity to host this earnings call. Uh we can now begin 1:08 1 minute, 8 seconds with opening remarks from Mr. Elect which we can open the floor for questions. Uh thank you and over to you Mr. 1:17 1 minute, 17 seconds Yeah. Uh good morning everyone. Uh thank you Raga. Um we have just completed one 1:24 1 minute, 24 seconds of the most challenging years for FiveStar. 1:28 1 minute, 28 seconds The asset quality headwinds faced by MFIs and unsecured loans, unsecured loan 1:35 1 minute, 35 seconds lenders over the last couple of years creeped into the portfolios of secured loan lenders also, especially those providing small ticket loans. 1:47 1 minute, 47 seconds As a company we all know fivestar provides loan to small business owners and self-employed individuals with a 1:55 1 minute, 55 seconds higher proportion of MFI overlap. This resulted in increase in DPDS and NPA for 2:03 2 minutes, 3 seconds fivestar during the course of this financial year. 2:08 2 minutes, 8 seconds However, the actions taken by us over the last few quarters have helped us to tide over these challenging times and 2:16 2 minutes, 16 seconds I'm very happy to state that the worst is behind us and the coming quarters will see us moving in one direction onwards and upwards. 2:30 2 minutes, 30 seconds So let me get into the quarter that just just got completed. 2:35 2 minutes, 35 seconds In the current quarter has been very encouraging with collection efficiency across all buckets showing excellent improvements and 2:43 2 minutes, 43 seconds getting back to the robust levels. This shows our strength in credit underwriting and collection infrastructure. 2:53 2 minutes, 53 seconds I wanted to share few collection metrics that clearly shows this trend. 2:59 2 minutes, 59 seconds For the quarter ended March 31st, 2026, we clocked a unique customer collection efficiency of 98.1% 3:08 3 minutes, 8 seconds which is one of our best in the history of FSA. 3:13 3 minutes, 13 seconds Our X bucket collections for the quarter came in at 99.3% which has helped contain forward flows 3:21 3 minutes, 21 seconds from X buckets. Our slipperage ratio has dropped from 1.09% in last quarter to 7% in this quarter. 3:34 3 minutes, 34 seconds This has helped our NPA remain largely stable between the quarters at 3.37%. 3:42 3 minutes, 42 seconds Grid cost has remained largely stable at 1.88% 88% of the average AM for the Q4 3:50 3 minutes, 50 seconds compared with 1.76% in last quarter after quarters of continuous drop the 3:59 3 minutes, 59 seconds current proportion the customers were in current buckets has moved up almost by close to 1% from 4:08 4 minutes, 8 seconds 81.77% in Q3 to 82.669% 6 69% in Q4. 4:16 4 minutes, 16 seconds So all the above metrics what I said clearly shows the the collection efficiency across all buckets are back to our normal trends. 4:30 4 minutes, 30 seconds With our collection strategies in place and our collection efforts showing strong traction, we started to refocus 4:37 4 minutes, 37 seconds on distribution and portfolio growth during the current quarter. Our dispersement for the quarter came in 4:44 4 minutes, 44 seconds at,213 crores an increase of 24% over the previous quarter. Our dispersement for 4:53 4 minutes, 53 seconds the full year came in at 4,675 crores which has allowed us to clock a 4:59 4 minutes, 59 seconds portfolio growth of 11% even during a challenging year. 5:08 5 minutes, 8 seconds During the quarter ended March 31st 2026, we availed the incremental debt of 5:15 5 minutes, 15 seconds 928 crores at an all-inclusive cost of 8.53%. 5:22 5 minutes, 22 seconds We raised 100 million from Asian Development Bank ADB, one of the largest development financial institutions 5:29 5 minutes, 29 seconds across the globe. during this quarter which is a reinforcement of lenders belief in five-star 5:37 5 minutes, 37 seconds while the all-inclusive cost was slightly higher than the previous quarter it was primarily on account of 5:45 5 minutes, 45 seconds higher edging cost we have to pay on this transaction our cost of funds for the quarter 5:52 5 minutes, 52 seconds dropped from 9.12% in Q3 to 8.95% in Q4 and for the full 6:00 6 minutes Here we saw a drop in our cost of fund from 9.64% in last year to 9.21% this year. 6:11 6 minutes, 11 seconds For the quarter we achieved a PAT of 269 crores while this is 3% lower as compared to the previous quarter on account of higher personal expense. 6:24 6 minutes, 24 seconds I want to reinforce the fact over PAT for a full year we grew even in such a challenging year by 2%. 6:34 6 minutes, 34 seconds And we clocked a fullear PAT of,099 crores. 6:39 6 minutes, 39 seconds Our return on average amum and return on equity for the financial year 2026 6:46 6 minutes, 46 seconds remains healthy at 8.68% and 16% respectively. 6:53 6 minutes, 53 seconds I also want to touch upon another aspect that has created a bit of overhang on us during this year. There was a senior 7:02 7 minutes, 2 seconds management exit during this year. But I want to clearly lay down the fact this has no impact on our performance. As can 7:10 7 minutes, 10 seconds be seen from our results, this is a testimony to the strength and depth of our team both at the management and the branches level. 7:20 7 minutes, 20 seconds We have built a team that has never been and will never be dependent on one or few individuals. 7:26 7 minutes, 26 seconds It may sound glitched, but men may come and men may go, but we go forever. 7:37 7 minutes, 37 seconds Now as we step into a new financial year, we are geared up to get back on the track of growth and well poised to 7:44 7 minutes, 44 seconds achieve a amum growth of around 20% for the financial year 2027 and thereafter we will slowly move upwards. 7:56 7 minutes, 56 seconds As in the past, we will aim at achieving strong yet sustainable growth, quality and profitability through robust credit 8:05 8 minutes, 5 seconds underwriting, strong collections and proactive risk management backed by use of adoption of technology and AI and 8:13 8 minutes, 13 seconds supported by a diversified and cost effective fund profile. 8:19 8 minutes, 19 seconds The way we handled the challenges gives me immense confidence and clearly shows that we have emerged stronger and will move onwards and upwards. 8:33 8 minutes, 33 seconds Thank you. Now I'll hand over the call to Shriant for more in detail. Very good morning to all of you. As Mr. 8:42 8 minutes, 42 seconds Pati has highlighted. I think this has been a quarter which has reinforced our confidence 8:50 8 minutes, 50 seconds in the business model and the execution capability of FiveStar and we are very hopeful and confident that each of you 8:57 8 minutes, 57 seconds on the call and the investors will also feel reinforced with the kind of results that we have been able to demonstrate in this quarter. Let me touch upon just few 9:06 9 minutes, 6 seconds aspects uh on the numbers before I hand it over uh for any questions. 9:12 9 minutes, 12 seconds Despite dropping our yields by 2% about a year and a half back, our spreads continue to remain quite healthy. In fact, the drop in spread for the full year has just been at 40 basis points. 9:24 9 minutes, 24 seconds Uh despite the incremental dispersements coming in at about 200 basis points. Uh so we have been able to get good cost of funds to stem the drop in uh spread. 9:35 9 minutes, 35 seconds This has resulted in strong return on average AUM at 8.37%. 9:40 9 minutes, 40 seconds And an ROE of close to 16% for the full year. 9:45 9 minutes, 45 seconds From the borrowing perspective, I think we are we are being looked at very attractively by the lenders. Uh like Mr. 9:51 9 minutes, 51 seconds Pati said, ADB has given 100 million line to us out of which we have drawn 50 million during this quarter and another 50 million is available for us to draw anytime over the next financial year. 10:02 10 minutes, 2 seconds While this has come in at slightly higher cost because of the uh hedging cost uh involved but this reinforces the 10:10 10 minutes, 10 seconds fact that even some of the largest lenders of the world are ready to back the company because of its strong underwriting capability and uh collection infrastructure. 10:23 10 minutes, 23 seconds Our pack for the quarter stood at about 269 crores uh because of slight increase in personal expenses. This is lower on a sequential basis and on a YI basis. 10:36 10 minutes, 36 seconds Our network stands at a very healthy number of about 7,400 crores, 7,380 crores to be uh precise. Uh we continue 10:44 10 minutes, 44 seconds to have a good uh provision coverage ratio both on the overall assets and on the stage three assets. Our overall coverage is at 1.84%. 10:53 10 minutes, 53 seconds And on stage three we are at 41.4%. 10:56 10 minutes, 56 seconds Given that there has been some betterment in the buckets, especially in the stage 2 composition, the stage 2 proportion has dropped a little bit. In 11:04 11 minutes, 4 seconds fact, our 61 to 90day bucket has actually come down from about 5.1% to 4.8%. 11:11 11 minutes, 11 seconds Uh because of which you see a small drop in the stage 2 provision coverage. But we generally track the overall provision 11:18 11 minutes, 18 seconds coverage because this is what gives confidence on the balance sheet and on the quality of assets that we are holding. 11:27 11 minutes, 27 seconds As a management team, we are very confident that we have bounced back in the best manner possible. We have taken the right set of actions. 11:38 11 minutes, 38 seconds As a company, we have faced multiple challenges during this year. Asset quality challenges, people related challenges. But every one of them have 11:47 11 minutes, 47 seconds been faced by us and we have overcome them in the best manner possible. And like Mr. Pati said I think from here onwards the performance is going to be 11:56 11 minutes, 56 seconds in one direction which will be onwards and upwards. That's the confidence we as a management team have and we would like 12:03 12 minutes, 3 seconds to make each and every one of you feel confident about the ability of the company to bounce back and grow in the 12:10 12 minutes, 10 seconds coming years. So on that note we'll take a pause and very happy to address any questions any of you may have. Thank you. 12:19 12 minutes, 19 seconds Thank you. 12:20 12 minutes, 20 seconds We will now begin the question and answer session. 12:24 12 minutes, 24 seconds Anyone who wishes to ask a question may press take a couple of minutes for the question cue to assemble. 12:33 12 minutes, 33 seconds Sure sir. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to 12:41 12 minutes, 41 seconds remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while 12:48 12 minutes, 48 seconds asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 13:00 13 minutes Our first question comes from the line of Reish from ICICI. Please go ahead. 13:07 13 minutes, 7 seconds Yeah. Hi sir and congrats on a good set of numbers. Uh so just two things. One uh you know on this uh asset quality 13:15 13 minutes, 15 seconds metric. So just wanted to know how April is trending you know in terms of collection and close and also if you can 13:22 13 minutes, 22 seconds give some uh insight on disjustment run rate in April as well. 13:29 13 minutes, 29 seconds Resh, April is a seasonally weak quarter but given that we are coming off a year when we had some challenges we don't 13:38 13 minutes, 38 seconds expect material deterioration to happen in April but at the same time given that it's a seasonally weak quarter we also 13:44 13 minutes, 44 seconds don't expect material uh improvements to come through. Uh so far April is trending quite well. I think we are 13:51 13 minutes, 51 seconds largely in line uh with a typical April month uh both in collections across various buckets and uh our belief is 14:00 14 minutes that I think this quarter also should be fairly good from an asset quality perspective. Dispersements are looking up. In fact, one of the things that we 14:07 14 minutes, 7 seconds have done and we had also highlighted this in the uh commentary in the presentation and in the exchange release. The split between business and 14:16 14 minutes, 16 seconds collections is fully operational from the 1st of April and we expect that this will pay way for a strong uh disbbursement to come in. It's early 14:25 14 minutes, 25 seconds days obviously you know people are just getting acclimatized to doing uh different things. Uh but you know things are looking good. Uh we are getting you 14:34 14 minutes, 34 seconds know strong uh lead indicators and uh we believe that even in this quarter we should be able to show a good dispersement growth. uh and so far you 14:43 14 minutes, 43 seconds know the way the April is trending uh has is giving us the belief that this quarter should be good both in terms of disbbursement and asset quality. 14:53 14 minutes, 53 seconds Got it. Got it. And uh so just lastly on this uh credit cost front. So when you know when we look at net recent rate 15:00 15 minutes which is obviously uh you know coming down pretty sharply in Q4 and also when we look at Xbucket it clearly suggests 15:08 15 minutes, 8 seconds that incremental flows are far lower than you know what it used to be uh during first time in month of F26. Uh so 15:15 15 minutes, 15 seconds if this trend uh has to sustain uh you know what kind of a credit cost uh we are building in 427 15:25 15 minutes, 25 seconds Rish I think uh for FY27 see if you look at it the trajectory of credit cost has been you know marginally going up uh 15:33 15 minutes, 33 seconds over the last four quarters for Q4 we ended with about 1.88% 88% on average amum. Uh so which is the number from 15:41 15 minutes, 41 seconds where we will start showing an improvement. Definitely there'll be an improvement. Uh at this point of time we will probably be guiding you for a 15:50 15 minutes, 50 seconds credit cost of 1.7 to 1.75% for the next uh financial year. Depending on how the buckets trend over the year uh this 15:58 15 minutes, 58 seconds could look uh better from here but our guidance will be about 1.7 to 1.75%. 16:04 16 minutes, 4 seconds Got it. Got it. And just to follow up on that so uh I'm sure because you know we are coming out from a you know a sort of 16:12 16 minutes, 12 seconds prolonged credit cycle and from peak obviously it will improve in 27 uh but what kind of a steady state credit cost 16:20 16 minutes, 20 seconds uh you know one should build uh in the se the segment uh where you operate and also keeping in mind uh you know we are 16:28 16 minutes, 28 seconds sort of uh pivoting towards better rated uh customers you know in terms of ticket size. So how should uh you know one 16:35 16 minutes, 35 seconds should think about the steady state credit cost uh you know let us say from 3 to five perspective. 16:44 16 minutes, 44 seconds So uh I think FYI 27 we gave you the numbers uh 28 to 30 obviously with buckets getting better the credit cost 16:52 16 minutes, 52 seconds will trend uh better. So we are probably looking at anywhere between 1.5 to 1.6% of credit cost as a steady state number. 17:01 17 minutes, 1 second uh I think we are confident about that like you rightly said uh connections are getting better the focus on uh slippages are a lot higher uh today and uh you 17:10 17 minutes, 10 seconds know to some extent we are also moving to slightly better quality customers so maybe 1.5 to 1.6 6 would be the steady state uh cost for the next couple of years. 17:18 17 minutes, 18 seconds Got it. Got it. This very helpful sir. Thank you and best of luck. Thanks. 17:24 17 minutes, 24 seconds Thank you. The next question comes from the line of Abijit Treval from Motilal Oswald. Please go ahead. 17:32 17 minutes, 32 seconds Yeah. Uh good morning sir. Thank you for taking my question. Uh Abijit your voice is quite low. Uh is it better now sir? 17:40 17 minutes, 40 seconds Yes. 17:41 17 minutes, 41 seconds Uh sir uh thank you for taking my question. Uh the first question I had is uh just a follow up on what you just answered to Resh that steady state credit costs could be 1.5 to 1.6%. 17:54 17 minutes, 54 seconds Uh so if you could help us understand what has really uh changed uh in the last one year since uh this uh asset 18:03 18 minutes, 3 seconds quality stress that we started seeing in the lower ticket lab. uh basically what I'm trying to understand is uh going forward we are saying that the world app 18:12 18 minutes, 12 seconds with MFI customers will gradually become lower we are moving to higher ticket sizes you just mentioned we are moving 18:19 18 minutes, 19 seconds to a better customer segment so versus the credit cost at which we used to operate uh earlier uh and and now steady 18:29 18 minutes, 29 seconds state credit cost of 1.5 1.6 six. So what has changed? I mean earlier credit cost used to be let's say 70 80 basis 18:37 18 minutes, 37 seconds points. Now we are looking at 1.5 to 1.6. So what has changed in the environment? 18:44 18 minutes, 44 seconds Vijit I think the earlier guidance that we gave was based on total assets which was about uh8 to 1%. If you just convert 18:52 18 minutes, 52 seconds into into an amum that will probably read more like a 1 uh you know 1 uh 3 to 1.35%. 19:00 19 minutes uh from where we are actually moving to 1.5 to 1.6. See what has changed is I think our understanding of the environment, our understanding of this 19:08 19 minutes, 8 seconds customer segment and the SKUs that they'll probably go through and the necessity to be a lot more consistent in our uh approach towards the credit cost 19:17 19 minutes, 17 seconds buildup is what we are saying we will probably be you know operating at slightly elevated credit cost than what we are than what we have been handling 19:25 19 minutes, 25 seconds because see there are also macroeconomic events which are happening. there are uh other uh uh you know issues or stress 19:33 19 minutes, 33 seconds that keeps cropping up and uh at that point of time you know if you're looking at a much lower credit cost then you 19:40 19 minutes, 40 seconds know you're actually putting a lot of pressure on on the field force and especially with our focus on growth also we need to maintain a good balance 19:48 19 minutes, 48 seconds between the right uh growth number and the right credit cost which is where we believe that I think 1.5 to 1.6 six will be a comfortable number to achieve the 19:57 19 minutes, 57 seconds state and growth objectives and we want to operate at those levels. Got it. Got it. 20:03 20 minutes, 3 seconds So the second question uh I had was uh around uh basically in every uh earnings 20:10 20 minutes, 10 seconds call right we've been asking this that uh are there any disruptions that we are seeing today on the ground u while most 20:18 20 minutes, 18 seconds of them have acknowledged that there is nothing in April uh which is very different or very alarming from March uh 20:25 20 minutes, 25 seconds and I think you also alluded to when you answered the previous participant that April seasonally weak there is some 20:33 20 minutes, 33 seconds deterioration that typically happens in April but business is picking up. So, so just trying to understand given that we 20:40 20 minutes, 40 seconds cater to a self-employed segment which is often perceived as a little more vulnerable compared to other customers 20:48 20 minutes, 48 seconds but uh is your reading today that they have not been impacted as yet and they'll kind of continue to pay for some 20:57 20 minutes, 57 seconds more time basically their their EMIs or do you think that maybe in the coming months there is a need to monitor this 21:04 21 minutes, 4 seconds segment the collections and as as things shape up right and the impact of the western 21:12 21 minutes, 12 seconds I'm presuming you are uh you're alluding to you know the macroeconomic the geopolitical scenario right yes sir that's that's exactly what I'm 21:20 21 minutes, 20 seconds alluding to anyway uh I don't think that has had any major impact like what others have been highlighting I think we are also not 21:28 21 minutes, 28 seconds seeing any major impact of that in fact we did uh uh look at some parts of the portfolio which could potentially be 21:35 21 minutes, 35 seconds impacted like those small E3s and uh NRI remittances and all that the proportion of that portfolio is firstly extremely 21:42 21 minutes, 42 seconds small for us uh sub 1% and even on that we are not seeing any alarm signals at this point of time the repayments are 21:50 21 minutes, 50 seconds coming in uh you know well uh in line with the other portfolio. So at this point of time we are also of the belief 21:57 21 minutes, 57 seconds that uh you know we have not seen or not unlikely to see any material impact of the geopolitical scenario but again it's 22:06 22 minutes, 6 seconds something that we keep uh you know keep an eye on and we'll keep monitoring uh hopefully we are probably getting to some solutions and if that happens I 22:14 22 minutes, 14 seconds think that will be a a positive uh impact for us. 22:19 22 minutes, 19 seconds Got it. Uh Sansa and then last question I had was uh in the last 6 12 months uh have we seen you should probably go to the next uh 22:27 22 minutes, 27 seconds participant I think Abijit has dropped off sir is uh connected connected can you hear me sir 22:37 22 minutes, 37 seconds yeah now I can answer sir I I heard you I heard you maybe there's some problem with the line uh I heard your answer and then the last 22:45 22 minutes, 45 seconds question that I had was in the last 6 to 12 months uh have we seen Let's just move on. We'll probably take it offline with Abij. 22:54 22 minutes, 54 seconds Sure sir. 22:56 22 minutes, 56 seconds The next question comes from the line of Surajj Dash from Sundaram Mutual Fund. Please go ahead. 23:03 23 minutes, 3 seconds Yeah. Hi sir, thanks for the opportunity sir. One question on uh ROA. I mean how do you see the ROA panning out from year one given that your steady state growth 23:12 23 minutes, 12 seconds is only 23 basis point lower than the current level and uh so therefore the ROA driver would be only margin. So how 23:21 23 minutes, 21 seconds do you see that margin panning out? So you see the margin probably a bit of coming down over a period of time while you scale because you increase on the 23:29 23 minutes, 29 seconds ticket side and so forth and again probably RO could be here only at the current level of the port or how you see 23:36 23 minutes, 36 seconds RA that is the only one is in cost but it is also driven by leverage and that will keep going down obviously with 23:43 23 minutes, 43 seconds leverage coming in uh our belief is I think even for the current financial year which is FI27 and thereafter we should be able to operate at a spread of 23:51 23 minutes, 51 seconds around 13 and a half% % uh depending on the leverage the margin gins will stack up where they are and uh from an ROA 23:59 23 minutes, 59 seconds perspective I think we believe that we should be able to operate at about 8 8.25 25 to 8.5%. Uh for this year and uh 24:07 24 minutes, 7 seconds you know on a on a fairly steady state also about uh 8 8 quarter levels we should be able to uh operate uh see 24:15 24 minutes, 15 seconds today it is also a function of a bit of uh leverage which is much lower. I think as the leverage keeps kicking in uh you 24:22 24 minutes, 22 seconds will see some impact on the ROAS but that will have a positive impact on ROE but for this year I think 8 quarter to 8 half is a is an ROA that we should be 24:31 24 minutes, 31 seconds able to operate at G thank you so much 24:38 24 minutes, 38 seconds thank you the next question comes from the line of Viral Sha from IFL Capital please go ahead yeah hi uh thanks for the opportunity 24:47 24 minutes, 47 seconds and congrats on good set of results uh Shant wanted to uh check three things um if I may. Uh one is uh you mentioned 24:55 24 minutes, 55 seconds about the personal uh expenses. Was there any one-off or is this just a reflection of the full uh buildout cost of the collections vertical that we have built up? 25:05 25 minutes, 5 seconds So it's a combination of both world. One is obviously the buildout of the collections vertical and uh typically in Q4 you also give uh slightly higher 25:13 25 minutes, 13 seconds incentives some schemes that we uh put in to actually spur the people to you know to run uh run for good collections 25:20 25 minutes, 20 seconds and good growth. uh I wouldn't call it as a one-off but it's a very typical phenomenon that you will see in uh you 25:27 25 minutes, 27 seconds know in the last quarter uh like like how you see in the first quarter the increment impact coming in uh because the growth was slightly lower for this 25:34 25 minutes, 34 seconds year uh you know the personal cost looks looked a little bit on the higher side but uh but for these two I think uh it's 25:41 25 minutes, 41 seconds largely business as usual got it and uh Santank uh Mr. Pati mentioned about the growth uh of 20% for 25:50 25 minutes, 50 seconds next year on a basis. I understand this is there is some element of arithmetic behind that uh given the book 10 hours of it but how do you see it say on a 25:59 25 minutes, 59 seconds steady state basis 28 uh and maybe even beyond what is the kind of growth uh outlook or aspiration that you would have. 26:08 26 minutes, 8 seconds So I think given that one we are coming off a slightly lower growth year uh so there is some bit of pent-up demand that 26:16 26 minutes, 16 seconds will be there which we should be able to cater to and uh also given the fact that our base is not as high so for example 26:24 26 minutes, 24 seconds even growing at 20% by the end of FI27 we'll probably somewhere around close to 16,000 crores so we still remain confident that at least for the next 2 26:32 26 minutes, 32 seconds to 3 years we should be able to clock a growth around 20%. 26:36 26 minutes, 36 seconds uh so if I have to be conservative and give you a range it will probably be somewhere between 18 to 20%. uh but you know we are definitely at least for the 26:44 26 minutes, 44 seconds next uh 2 to 3 years we are going to be aiming for a close to 20% growth. 26:50 26 minutes, 50 seconds Got it. And uh my last question uh Shikhant was just with regards to the yield uh how much more pass through of 27:00 27 minutes the rate cuts that we had taken one and a half year back. uh is still remaining. 27:04 27 minutes, 4 seconds Understand this is on incremental basis but is it fully reflected on the book and secondly uh given that now we are shifting also segments uh somewhat in 27:13 27 minutes, 13 seconds terms of customers uh do you foresee say uh some bit of element of yield compression in this year 27:23 27 minutes, 23 seconds I think the yields has largely been factored. So if I have to uh put a number maybe you have another 40 to 50 basis points of impact. So we are today 27:32 27 minutes, 32 seconds uh incrementally lending at around 22 1/2%. And uh you know factoring for some delinquencies and all that the book yield should uh should be closer to 27:40 27 minutes, 40 seconds about 22 to 22 quarter and for Q4 we are at about 22.6. So I would probably say about 30 40 basis points of further 27:48 27 minutes, 48 seconds impact that may come in over the over the next uh 3 to four quarters. uh see the other point that you asked I think 27:56 27 minutes, 56 seconds we've been reiterating consistently is that this is not a very price sensitive segment and it's not like we are completely shifting our segment we are 28:04 28 minutes, 4 seconds going to be lending at 15 20 lakhs where the borrowers are extremely price sensitive we have to drop our res 28:12 28 minutes, 12 seconds this is a segment where we have been operating at similar even in the past and for the last 12 months also we have been giving similar reels to these 28:19 28 minutes, 19 seconds customers so it doesn't change primarily on account of you know us focusing more on the let's say closer to five lakh 28:27 28 minutes, 27 seconds customers rather than the closer to three lakh customers. So we really envisaging any uh material disruption to 28:33 28 minutes, 33 seconds the yields on account of the slightly different focus that we may be uh carrying. 28:39 28 minutes, 39 seconds Got it very clear Shikant. Thank you and all the best. Thank you. 28:45 28 minutes, 45 seconds The next question comes from the line of Kunal Tanvi from Banyan Tree Advisers. Please go ahead. 28:52 28 minutes, 52 seconds Hi, thank you for the opportunity. I have two questions. One was you know uh during this I'm sorry to interrupt Gunal. You're not 29:00 29 minutes quite audible. Could you please uh use your phone on the Sorry, we can't hear you. Is it better now? 29:09 29 minutes, 9 seconds Yes, please go ahead. 29:10 29 minutes, 10 seconds Yeah. Yeah. I had three questions. The first one was you know when we have done this restructuring organizational restructuring in terms of you know 29:17 29 minutes, 17 seconds business and collection you know being different teams uh can you you know throw us uh throw some light on you know 29:24 29 minutes, 24 seconds what were the gaps that you saw because see we've been in the business for last 20 years and this is like one of the uh 29:31 29 minutes, 31 seconds first time and we have seen a overleveraging cycle that we saw and in in the first instance itself we have to reorganize the entire team like really 29:40 29 minutes, 40 seconds interested in understanding you know what were the things that went wrong and how did we uh how does this reorganization kind of correct it. 29:47 29 minutes, 47 seconds Second question was on your last quarter's comment on you know permanent overleveraging in the you know micro finance sector. Uh if you can throw some 29:56 29 minutes, 56 seconds light on how the overall sector is now playing out. What is your strength on the over leveraging bit and the third thing is like uh see we 30:05 30 minutes, 5 seconds given our size we've been always saying we uh you know the structural growth will be closer to 25%. And now Shikhan 30:13 30 minutes, 13 seconds just alluded to the fact that we we'll be tracking closer to 18 20% over next three years. So is it that you know structurally our growth rates would be 30:21 30 minutes, 21 seconds lower than what we were anticipating say 2 years back. If yes then if you can you know help us understand why because like at one stage we are moving to slightly 30:29 30 minutes, 29 seconds higher ticket size and still if we'll be going slower than what we had kind of you know uh anticipated 3 years back. 30:36 30 minutes, 36 seconds Are there any things that we should know or you know uh any reasons that we should know for the slower growth? 30:42 30 minutes, 42 seconds Thanks. These are three questions that I have. 30:45 30 minutes, 45 seconds Uh I'm I hope that I'm audible. Um so let me go one by one. Uh see we are not 30:52 30 minutes, 52 seconds extremely going higher on the ticket size. If you see the average ticket size between last year and this year it has 30:59 30 minutes, 59 seconds moved from 3.5 lakh per customer to 4.2 lakh per customer. So we are still operating in the sweet spot of 3 to five 31:08 31 minutes, 8 seconds lakhs. That is where we see uh the potential for higher growth and we see there is the challenges for other people 31:17 31 minutes, 17 seconds to get in. So that is the sweet spot of fivestar. So we will be operating in 3 to five lakhs definitely what we have 31:25 31 minutes, 25 seconds been saying 3/4 before was below three lakhs that had some bit of pain where we 31:31 31 minutes, 31 seconds want to slow down in below three lakhs and concentrate bit more on above five 31:38 31 minutes, 38 seconds lakhs. So structurally 3 to five lakhs will be our core even if you see our 31:44 31 minutes, 44 seconds presentation close to 50% plus of our total AVM lies in 3 to five lakhs. So there is no uh big movement that we have 31:53 31 minutes, 53 seconds made to go and uh uh uh go and get into the bigger ticket size uh customers. So we remain in the range bound of 3 to 32:02 32 minutes, 2 seconds five. That's our sweet spot forever and we remain there stronger on what happened last year on the structural problem. There was no 32:10 32 minutes, 10 seconds structural problems at all. As we have been seeing the problem has come from uh over leverage caused by uh unsecured and 32:19 32 minutes, 19 seconds micro finance lenders that has also peeped into the secured lenders like fivestar. So first it started as a 32:27 32 minutes, 27 seconds overlever issues then it translated translated into behavioral issues. uh that is where fivestar was addressing 32:35 32 minutes, 35 seconds the behavioral issues of our customers in last 3 to 6 months that is getting saturated now uh by a continuous effort 32:43 32 minutes, 43 seconds that what we have been uh uh putting with the with the existing customers. So structurally if you if you want to say 32:51 32 minutes, 51 seconds what is the improvement that we have done is earlier the business and collections was together. Now the business vertical and collection 32:59 32 minutes, 59 seconds vertical has been separated uh since from April 1st uh fully functional. So business team now will be focusing more 33:07 33 minutes, 7 seconds on uh new businesses and collection team will be more focusing on stabilization in the DPDS across uh all the customers 33:16 33 minutes, 16 seconds in fivestar. I hope so. I have broadly answered all the questions. There is some kind of disruption that we are we are not able to hear the entire 33:24 33 minutes, 24 seconds questions. If any f any question that we have not answered, please uh come again. 33:30 33 minutes, 30 seconds Yeah. So the last question was structurally we have been saying you know uh the business is because of the lower base and opportunity 25% was the 33:39 33 minutes, 39 seconds growth number that we have been giving for last two three years. Now in one of the comments Shri Khan mentioned that we'll be growing at 18 to 20% over next 33:47 33 minutes, 47 seconds 3 years. So is it fair to assume that structurally our growth rates would be lower compared to what we had anticipated say 3 years back 2 to 3 years back? 33:56 33 minutes, 56 seconds Uh see when we were growing at 30% plus our AUM size was close to 5,000 to 7,000 34:03 34 minutes, 3 seconds crores. Now we are sitting on 13,000 crores and uh we are coming out from a growth of 10 11% for a full year. We are 34:12 34 minutes, 12 seconds we are intend to grow at 20%. So that is why if you see my earlier uh opening uh remarks this will even go up as we move 34:20 34 minutes, 20 seconds forward year on year but please understand from a current of 10 to 11% we are we are doubling in this financial 34:29 34 minutes, 29 seconds year. Maybe we'll be even higher growth as we go forward. 34:34 34 minutes, 34 seconds Okay. Sure. And last question is on you know the uh our cost to assets like because of this reorg organization and 34:42 34 minutes, 42 seconds slower growth this year we see some inchup in the cost to assets number right. Can you you know help us understand what should be the structural 34:49 34 minutes, 49 seconds cost opex to assets from a steady state basis for uh for Q4 if you look at our opex to 34:57 34 minutes, 57 seconds average AUM uh we ended slightly higher than 7%. And uh this year obviously there will be some benefit of scale that 35:04 35 minutes, 4 seconds will come in that will come in. Uh but we have also made some investments in the collections vertical and uh you know 35:11 35 minutes, 11 seconds there are also uh with competition uh people getting into this segment it is also important for us to retain the right set of people by giving slightly 35:19 35 minutes, 19 seconds higher costs. So our senses I think it'll largely remain around the 7 to 7.25% levels and not show any big 35:26 35 minutes, 26 seconds decline during the year despite the 20% growth that we'll achieve. 35:30 35 minutes, 30 seconds Okay. Perfect. Thank you so much and all the very best. Thank you. Thank you. 35:35 35 minutes, 35 seconds Thank you. The next question comes from the line of UA from Noama Wealth Noama Institution Equities. Please go ahead. 35:47 35 minutes, 47 seconds Thanks for taking my question. Uh my first question was on our AUM outlook for the next year. So uh from the 35:55 35 minutes, 55 seconds current year if you want to uh I understand that there's a low base and therefore we are confident of achieving the 20% uh growth but if we look at 36:04 36 minutes, 4 seconds dispersement sir uh we've only uh improved our dispersement sequentially before that we were uh declining our 36:12 36 minutes, 12 seconds dispersements because of uh the stress that we saw on asset quality also. So we've seen the GNBA ratio increasing for 36:20 36 minutes, 20 seconds the past several quarters. So uh do you uh look at it at this way that uh we'll go for higher dispersement to achieve 36:29 36 minutes, 29 seconds that 20% growth only after you see some early indicators for the GNPI ratio decreasing or uh uh it won't be 36:38 36 minutes, 38 seconds contingent on that aspect sir no we will be pushing up dispersments like we said I think uh in Q4 36:46 36 minutes, 46 seconds sequentially our dispersence are was higher by about 24% and you will definitely see sequential growth. See the the quick back of the envelope 36:55 36 minutes, 55 seconds computation is we did close to 5,000 crores last year. Even if you had grown our disbbursements by 15% this year, that number should have been about close 37:04 37 minutes, 4 seconds to 6,000 crores. And another 15% will mean close to 7,000 crores for FY27. 37:10 37 minutes, 10 seconds Uh but given that this year we did not push up on our dispersements, uh like I even said earlier, there is a bit of a pent-up demand which we can definitely 37:18 37 minutes, 18 seconds address. And this is a segment where the demand is of the least concern because it's a very huge uh market out there and 37:26 37 minutes, 26 seconds uh we should be able to get close to about 6 and a half to 7,000 crores of disbbursements in the coming year. So definitely we have started uh you know 37:34 37 minutes, 34 seconds looking at ways and means to bring in quality customers at the same time push our dispersements up. So just to continue that as I said in my opening 37:44 37 minutes, 44 seconds remarks uh we are we are already seeing a very good uptick in our collections. 37:49 37 minutes, 49 seconds Uh just to go a little deeper for last 6 months we are seeing a good trend in upwards in collections. So that is why we are able to do ever best in our 37:58 37 minutes, 58 seconds collections in both in Xbucket as well as the uh unique customer collection efficiency. you will see the NPA slowing 38:07 38 minutes, 7 seconds down uh from next quarter onwards. So but uh uh uh that is the outcome because if current customers ex customers 38:15 38 minutes, 15 seconds forward flow is lower eventually the areas will be lower eventually the NPS will be lower. So we are seeing that trend very strongly that's why we have 38:24 38 minutes, 24 seconds confident to say that we'll be growing at 20%. So definitely in coming quarters you'll see NPS uh uh downing uh towards the south. 38:36 38 minutes, 36 seconds Understood sir. Thanks. And sir my second question was on our OPEX outlook for this year. Uh so what plans do we 38:43 38 minutes, 43 seconds hold in terms of increase in headcount and branch expansion for FI27 and if there'll be a breakup of uh in terms of 38:51 38 minutes, 51 seconds tier 1, tier 2 etc uh towns uh for the branch expansion that will be helpful. 38:58 38 minutes, 58 seconds So uh our uh uh endure is uh uh keep opening the new branches. Uh last year also we opened uh close to 90 branches. 39:10 39 minutes, 10 seconds Uh I'm happy to say that out of 90 branches 95% of my new branches break even has happened. So so the infrastructure should be ready in place. 39:20 39 minutes, 20 seconds That's why we keep opening because that's one of the important levels for growth for fivear going closer and closer to the customer in city uh where 39:29 39 minutes, 29 seconds we have lesser competition and very uh uh understanding the ground level reality of the customer which is more important. So our uh catchment area around the branches will be 25 to 30 km. 39:41 39 minutes, 41 seconds So we want to be as close to the customer whom we intend to serve. So even for this financial year we intend 39:48 39 minutes, 48 seconds to open 60 to 75 branches. Uh uh from an operation cost you know you want to take 39:56 39 minutes, 56 seconds no uh like we said I think these branches will come in and we are very confident that over a 9 to 12 month period these branches will start breaking even or becoming profitable. uh 40:05 40 minutes, 5 seconds which is what we said at the OPEX to AUM level we should be at about 7 to 7.25% for this year which is same as what we 40:12 40 minutes, 12 seconds did in Q4 uh because obviously to retain our uh good people today we have to you 40:19 40 minutes, 19 seconds know compensate them at the appropriate levels uh which would mean you're not going to get too much of scale benefits coming in in this financial year. 40:29 40 minutes, 29 seconds Sure. Thanks a lot. Thank you. 40:33 40 minutes, 33 seconds Thank you. The next question comes from the line of Arvind Ravi Chandran from Sundaram Alternatives. Please go ahead. 40:42 40 minutes, 42 seconds Sorry. Sorry, we're unable to hear you. Uh hello. Sorry. Uh can you hear me now? 40:50 40 minutes, 50 seconds Hello. Hello. So, can you hear me? 40:58 40 minutes, 58 seconds Hello. Hello. Yes, sir. We can hear you. 41:02 41 minutes, 2 seconds [clears throat] 41:03 41 minutes, 3 seconds Yeah. Uh uh please go ahead. 41:05 41 minutes, 5 seconds Yeah. Can you hear me? Uh sir, uh this will Yes. Yeah. Uh thank you. 41:12 41 minutes, 12 seconds Yeah. Yeah. Thank you so much for the opportunity sir like uh you know uh you know congratulations on the good set of numbers especially on the asset quality 41:19 41 minutes, 19 seconds side uh especially on the dealing with the indicators and you have mentioned you know like there will be like subsequent improvement in NPA and all um 41:28 41 minutes, 28 seconds but my one question is on like you know we have built you know so much capacity especially in the last 2 three years you know telling I mean I understand like 41:36 41 minutes, 36 seconds 20% growth for FI27 but even beyond that like you know the capacity kind of we kind of built and we continuously going 41:44 41 minutes, 44 seconds to build uh like you know can can I assume that the 20% growth for the medium-term let's say 28 or 29 would be on the conservative side rather than on 41:52 41 minutes, 52 seconds the um on the on the even the maximum like could be like maybe better than 41:59 41 minutes, 59 seconds that better than 20%. let's say 28 or 29 and similarly on the credit cost or like you know if you the statistic credit 42:06 42 minutes, 6 seconds cost is going to be this way um like you know should we reook at our pricing also 42:15 42 minutes, 15 seconds I think Mr. Pati did answer the first question. He very clearly said that for the medium-term we are definitely going to be looking at around 20% growth. Uh 42:23 42 minutes, 23 seconds so you know 20% is not the highest number that we are putting in. If you know we uh if we get more confidence we 42:30 42 minutes, 30 seconds are able to you know sustain this level of uh asset quality and credit cost. We can even look at growing slightly on the higher side. Uh so 20% is a number that 42:39 42 minutes, 39 seconds we are confident of achieving and uh possibly we could we could see some uh upsides coming in in the in the years. 42:47 42 minutes, 47 seconds Uh on the credit cost uh right now we are guiding you for uh you know 1.5 to 1.6%. 42:54 42 minutes, 54 seconds Uh it is based on the profile of customers that we'll be onboarding during this year and uh thereafter. So 43:02 43 minutes, 2 seconds at this point we are not saying that we are going to be onboarding you know much higher quality customers which means credit cost will come down. If that 43:10 43 minutes, 10 seconds happens and the asset quality trends a lot better naturally you'll see credit cost being better than our guidance. 43:18 43 minutes, 18 seconds Uh sure sir. As there's one more question on the yield side like you know considering our steady steady state credit cost itself we are you know 43:26 43 minutes, 26 seconds looking at a slightly higher than what we had initially anticipated let's could we reook at our pricing also like 43:33 43 minutes, 33 seconds because you know if steady state credit is going to be at this point I mean there is no necessity for us to relook at our pricing because we dropped uh our 43:42 43 minutes, 42 seconds pricing by 200 bits about one and a half years back and uh if you really look at uh the pricing that is being given by 43:48 43 minutes, 48 seconds lenders to this segment of borrowers. We would largely be on the on the lower end rather than on the higher end of the range. So at this point there is no 43:57 43 minutes, 57 seconds issue from a pricing perspective and it is not like we are uh you know we are we have been slow on dispersements because of pricing the the slowdown in 44:06 44 minutes, 6 seconds dispersements is a conscious call given the challenges that we faced and uh we don't really envisage at this point of time for any pricing drop to happen at least in FI27. 44:19 44 minutes, 19 seconds Okay. Um but my question was on the other side like you know like should we look good or pricing in terms of revising up points in the closing but 44:27 44 minutes, 27 seconds fine thank you sir I will not we we'll keep evaluating it but at this point of time there is no proposal on the table to revise the pricing downwards or upwards. 44:39 44 minutes, 39 seconds Thank you. 44:41 44 minutes, 41 seconds Thank you. The next question comes from the line of Subranchu Mishra from Philip Capital. Please go ahead. 44:48 44 minutes, 48 seconds Uh hi, good morning. Uh two or three questions. The first part is of this dispersement that we have uh got in FI26, what proportion is coming from the 44:58 44 minutes, 58 seconds proper loans and what proportion is to repeat customers. Uh second is uh what uh what is the proportion of collections 45:04 45 minutes, 4 seconds which is uh still cash collections and uh third is what what has been the write off in FY26. 45:12 45 minutes, 12 seconds Thanks. 45:14 45 minutes, 14 seconds So uh Subranch I think the proportion of topups and repeats continue to be at the same level. uh what we used to tell you 45:21 45 minutes, 21 seconds is about 10 to 15% of loans uh you know are people who are running multiple loans with fivestar and you'll probably 45:28 45 minutes, 28 seconds see similar levels from a dispersement side also which is about 10 to 12% coming in through topups and uh repeats 45:35 45 minutes, 35 seconds uh on your uh second question in terms of the uh uh cash collections uh we were I think we had given this data we are 45:44 45 minutes, 44 seconds about 84% of collections that came in digital uh you know in Q4 FY26 so 16% will be in cash and this has been 45:52 45 minutes, 52 seconds gradually moving up. If you look at over the last 1 year, we have moved this up from 80% to 84 and if you look at the last 2 years, we have actually moved it 45:59 45 minutes, 59 seconds from about uh 53% to 84%. Our intent is how close can we get to about 90%. But you will always have to handle some 46:07 46 minutes, 7 seconds level of cash given the profile of borrowers that you're operating in. 46:12 46 minutes, 12 seconds And what is the proportion of write offs in 26? 46:17 46 minutes, 17 seconds Uh you're talking about Q4. No, the entire FI26. 46:22 46 minutes, 22 seconds So FYI26 our write off would have been about uh close to 160 crores. We can we 46:29 46 minutes, 29 seconds can uh I can give you the exact number uh later but somewhere around 160 to 165 crores right and just one followup what is the 46:38 46 minutes, 38 seconds proportion of repeat customers in the dispersment 10 to 15% is uh uh top up how how much and repeat 46:47 46 minutes, 47 seconds so we don't distinguish yeah top up and repeat are pretty much you know we track it as a same metric so the 10 to 15% that we are putting is a combination of 46:54 46 minutes, 54 seconds top up and repeat thank Okay. 47:00 47 minutes Thank you. The next question comes from the line of Rahul Kumar from Vakaria Fund. Please go ahead. 47:11 47 minutes, 11 seconds Rahul, please go ahead with your question and unmute your line in case if you're on mute. 47:22 47 minutes, 22 seconds Since there is no response, we will move to the next participant. The next question comes from the line of Bunch Solanki from RSPN ventures. Please go ahead. 47:32 47 minutes, 32 seconds Uh hello uh good morning management. Uh hope I am audible. 47:37 47 minutes, 37 seconds Uh so I'm with this company. uh so I want to understand uh the process of sourcing and underwriting uh with a 47:45 47 minutes, 45 seconds collection like uh uh I have read in many research reports and also with the other companies which I'm tracking that 47:53 47 minutes, 53 seconds the belong segment is very connector based segment and we have to select the lead from a connectors 48:01 48 minutes, 1 second uh majorly and uh also uh what is the turnaround time uh for our Bman and both 48:10 48 minutes, 10 seconds kind of risk profile customers we are approaching in below five lakh segment and five to 10 lakh segment. 48:18 48 minutes, 18 seconds See once we have a very proprietary underwriting which is based on uh you know evaluation of the character cash flow and collateral and this is a 48:26 48 minutes, 26 seconds methodology that we have perfected over the last 20 years of uh operating in this segment. uh I think we can uh you know we should probably get into a call 48:35 48 minutes, 35 seconds uh separately so that we can actually take you in detail uh because in an earnings call it will be very uh unfair 48:42 48 minutes, 42 seconds for us to explain all of these to the other investors and analysts who are present. So please uh you know you have the mail ids of uh Prashant and me uh 48:50 48 minutes, 50 seconds you know on the presentation do write to us we'll fix up a mutual uh time and we'll take you in detail through the underwriting process the turnaround time and various aspects. 49:00 49 minutes Uh okay. Uh see sure all and another question on if I if I can ask here or 49:08 49 minutes, 8 seconds all the question I need to ask on the offline only. 49:11 49 minutes, 11 seconds Let's connect offline because you're new to the company. I think it'll be good for you to understand the company first before coming out with your questions. 49:18 49 minutes, 18 seconds So let's connect offline and uh you know we'll we'll clarify uh we'll explain to you about the company and also clarify any queries you may have. 49:26 49 minutes, 26 seconds Okay. Sure. Yeah, thank you. The next question comes from the line of Danch Gupta from Latin PMS. 49:35 49 minutes, 35 seconds Please go ahead. 49:36 49 minutes, 36 seconds Hi sir. Uh couple of questions. So just wanted to understand how does the sourcing and fulfillment strategy for the more than five lakh ticket size 49:45 49 minutes, 45 seconds differs from our uh let's say existing less than five lakh customer profile and does the civil profile that we are targeting any different? 49:55 49 minutes, 55 seconds No danch the underwriting process is largely the same. Uh like I said it's based on evaluation of the character cash flow and collateral and we look at 50:03 50 minutes, 3 seconds credit bureau footprint of the customers what kind of loans they already have and what are the what is the performance on those loans. So there is there is 50:12 50 minutes, 12 seconds actually no difference between underwriting let's say a 5 to 10 lakh customer visa we a 3 to five lakh customer. Again like uh we offered to 50:19 50 minutes, 19 seconds one happy touh take you through the detailed underwriting process over a you know over a discussion. So please write to us in case you need any further 50:26 50 minutes, 26 seconds clarifications and we'll we'll be happy to take you through in detail. 50:30 50 minutes, 30 seconds Sure. My question was actually also on the sourcing part not necessarily underwriting. The question was the sourcing channel. 50:37 50 minutes, 37 seconds Both of them are both of them. No no no. Yeah. 50:41 50 minutes, 41 seconds Got it. Got it. And the second question is that we mentioned in the call that let's say 84% customers are paying us digitally right and when we want to take 50:50 50 minutes, 50 seconds it to let's say 90 the question was that if the customers are paying digitally then they start to have a digital 50:57 50 minutes, 57 seconds footprint right uh which goes against one of the reasons why why fivestar is a 51:04 51 minutes, 4 seconds better lender uh to those customer because they don't have banking history right now if they're making basically 51:12 51 minutes, 12 seconds payments they have banking history. So does this lead to any uh any let's say insight from any fintech or any player coming in and 51:20 51 minutes, 20 seconds saying that okay now I have some banking data of these customers I can also lend maybe a small personal loan I'm not saying same ticket size or secured loan 51:29 51 minutes, 29 seconds but just the data availability does it lead to any player coming in anything that you have seen from your data uh definitely whether fivestar wishes or 51:38 51 minutes, 38 seconds not now more and more digital uh uh prints have been uh taken by uh people everywhere. So that is inevitable. Uh 51:47 51 minutes, 47 seconds but uh coming to the direct answer uh yes fintech can uh take up our customers but you have to understand the need of 51:56 51 minutes, 56 seconds our customers. Yeah the need of our customer is not 25,000 or 50,000 or less than a lakh. So our average ticket size 52:03 52 minutes, 3 seconds today it's around four lakhs that's been used for business uh improvement starting a business or a home renovation 52:11 52 minutes, 11 seconds or some u uh a personal in nature which is used for marriage or education or health. So uh first the ticket size 52:19 52 minutes, 19 seconds matters a lot when fivear comes into picture. Second is the tenure. The fintex can operate close to 6 to 12 52:27 52 minutes, 27 seconds months whereas we can operate at 7 years period. So the really the EMI becomes more uh thinner when they uh come to fivestar rather than going into fintech. 52:38 52 minutes, 38 seconds Uh so we never saw fintech as our competitors uh ever since we have been saying because uh they operate in a for a 52:47 52 minutes, 47 seconds different working capital in nature whereas five stars loans are more into business uh uh constructing uh purpose. 52:56 52 minutes, 56 seconds So the end use is completely different. 52:59 52 minutes, 59 seconds They may be giving a competition to the gold loans who are also in the similar uh uh ticket size and similar tenure but 53:07 53 minutes, 7 seconds not the loans like secured lenders like fivestar where our loans are close to four to five and tenur are close to 7 years. 53:16 53 minutes, 16 seconds Got it. Got it. And just one data question in the deck we have the the split of aim that we give by cities 53:22 53 minutes, 22 seconds right uh from let's say last quarter it was around 1% now it is showing as 2%. 53:27 53 minutes, 27 seconds So it's just a data roundup or we are let's say putting in more effort to source higher ticket size from tier one in two cities 53:36 53 minutes, 36 seconds because within a quarter it has optically showing a double doubling of I I think uh in Maharashtra we have 53:44 53 minutes, 44 seconds started our operations right uh Maharashtra looks very uh promising uh state uh so we we are moving our branch 53:52 53 minutes, 52 seconds network uh from close to 40 to uh uh 70 80 branches in Maharashtra. So when we enter into Maharashtra, we put uh 54:00 54 minutes branches in tier one and tier two. Nasi will have a branches. Uh Pune will have a branch uh and Aurorangabad will have a 54:08 54 minutes, 8 seconds branch. Though those branches has been shown in tier one and two so that you see a little up peak in the percentage. 54:16 54 minutes, 16 seconds Got it. And just last question in the last year we we had opened 96 branches and let's say that was a tough period for us from a lending perspective. 54:28 54 minutes, 28 seconds Now assuming that the current collection trends hold or improve. Uh we have mentioned that we are looking to open 54:35 54 minutes, 35 seconds only 60 to 75 branches. Shouldn't we be getting more aggressive in la in launching more branches? Why slow it down? 54:44 54 minutes, 44 seconds No, I think predominantly in last three years our split branch mechanism and new branch mechanism has worked out very 54:52 54 minutes, 52 seconds well. So in Tamil Nadu, Telangana, AAP where the major chunk of branches were put in in last three years have given us 54:59 54 minutes, 59 seconds a right foundation and infrastructure right in place when we want to double our growth comparing to last year. So we 55:07 55 minutes, 7 seconds think uh this financial year we'll take a little small smaller uh number and run with 60 to 75 branches. If promising 55:16 55 minutes, 16 seconds things that we see from newer states like MH, Rajasthan, Gujarat, UP, Chhattisgarh definitely we will also 55:24 55 minutes, 24 seconds increase the number of counts in those locations. Got it. Got it. Understood. Understood. 55:31 55 minutes, 31 seconds Uh thank you for your answers. All the best. 55:35 55 minutes, 35 seconds Thank you. The next question comes from the line of Chandra Shakhar Shridar from Fid Fidelity International. Please go ahead. 55:44 55 minutes, 44 seconds Hi, good morning. Um I had a few questions. One um if you see the composition of the growth uh a large 55:51 55 minutes, 51 seconds chunk of the growth has come from the non-s south markets uh uh in the last uh this year um on the just maybe in some 56:00 56 minutes geographical sense around different markets. I mean AP has been notably weaker this year. Uh anything around that? That's my first question. Second, 56:09 56 minutes, 9 seconds um you had briefly sometime in the middle of last year said that you'd look at um affordable housing or getting to vehicles. I mean where does that fit 56:18 56 minutes, 18 seconds into your scheme of things at this point in uh time maybe over the next one to two years? Um third question to get to 56:26 56 minutes, 26 seconds about 20% share growth we need about 6,200 6,300 crores of disjustments uh 56:33 56 minutes, 33 seconds which means that uh you know we need to sort of step up to 1500 uh 145 1500 crores from the first quarter itself and 56:41 56 minutes, 41 seconds typically it's weak. So how do you just think of that? Um fourth uh just how much more is left in terms of cost of 56:48 56 minutes, 48 seconds funds to drop. Uh obviously this quarter a lot of the uh borrowing happened by ECB. So the um the incremental borrowing 56:56 56 minutes, 56 seconds was largely ECB. So that's why we didn't see that. But just any more medium-term sense on how much more cost a fund um 57:03 57 minutes, 3 seconds can drop. And then the very last question is that you know asset quality is beginning to improve but we still holding on to somewhat similar credit 57:12 57 minutes, 12 seconds cost level. Is this because we're trying to sort of up the coverage uh you know on some of the lower uh stages? Um I 57:21 57 minutes, 21 seconds mean the background also has been that RBI is now prescribed a minimum flow even of 5% on stage two for banks uh and our stage 2 coverage is lower than you know what the RV prescription itself is. 57:32 57 minutes, 32 seconds Thank you. 57:34 57 minutes, 34 seconds Yeah. Uh Chandra good morning. Uh many questions at one go. Uh so last two questions on disbbursement and quality. 57:41 57 minutes, 41 seconds I'll ask Shikhan to uh answer it. Uh going from the first question. Yes. the last year uh definitely the non-south 57:51 57 minutes, 51 seconds growth was going up as I rightly said in Maharashtra, Rajasthan, Gujarat and Chhattisgar and UP the branches were put 57:58 57 minutes, 58 seconds in uh our our uh portion of south to non-s south uh close to 85% of our AUM 58:07 58 minutes, 7 seconds or even much higher will be in south where this overle problem started to creep in. So we had a hold on that very 58:16 58 minutes, 16 seconds tightly for the first two quarters for the June and September. So we put our muted growth there and started to focus 58:23 58 minutes, 23 seconds more on collections as we've been talking for last 12 months. But having said that next this financial year you 58:31 58 minutes, 31 seconds see all the big states coming back in a big way. That's how we see Tamil Nadu, Andra, Telangana and of course to some 58:40 58 minutes, 40 seconds extent Karnataka also because the collections are stabilizing there. X bucket collections in Karnataka also showed 99% in the in the last quarter. 58:50 58 minutes, 50 seconds So for the financial year 27 it will be the growth of south for us uh which will which will predominantly give us that 58:59 58 minutes, 59 seconds 20% or even little more than that what we anticipate for the full year from 59:05 59 minutes, 5 seconds south. Uh on the second question uh products uh on the products uh as uh yes uh we've 59:14 59 minutes, 14 seconds been uh uh introduced affordable housing in uh some of the locations but our 59:22 59 minutes, 22 seconds focus was mainly to get back the microlab product back to its uh original growth. So that was our uh first uh 59:30 59 minutes, 30 seconds option because it uh the yields are good, the returns are good uh and and and uh the runway is great there. So we 59:38 59 minutes, 38 seconds will see microlap uh the sweet spot of 3 to five lakhs in fivestar kicking back in a big way in this financial year and 59:47 59 minutes, 47 seconds slowly we'll be getting into the affordable housing product where we want our sweet spot to be around 7 to eight lakhs. 59:54 59 minutes, 54 seconds uh uh next two years we may we may see even uh one more product getting added uh that may be we can we can call it out 1:00:02 1 hour, 2 seconds little later uh on the asset quality and dispersement you're right uh 1,400,500 crores of disbbursement has to happen 1:00:11 1 hour, 11 seconds yes Shriant so Chandra this is what we alluded for example last year not FYI 26 even in FI25 we did about 5,000 crores 1:00:19 1 hour, 19 seconds of dispersals for the full year which is almost at you know close to 425 to 450 crores on a monthly basis and this year 1:00:27 1 hour, 27 seconds obviously we have consciously pulled back. So the ability to you know push it by 20% on on the back of one year old 1:00:35 1 hour, 35 seconds numbers is not a challenge at all. So today uh you will probably see and this will give you a lot more confidence maybe post the first quarter even in the 1:00:44 1 hour, 44 seconds first quarter we are targeting you know quite strong uh dispersements to come in. So we don't really see a challenge getting to about 6,200 to 6,400 crores of disbburments to achieve a 20% growth. 1:00:54 1 hour, 54 seconds Uh see credit cost levels mathematically you are right. I think uh with asset quality improving we should start seeing 1:01:02 1 hour, 1 minute, 2 seconds benefit on the credit cost and at this point of time there is not any tearing hurry for us to you know keep creating buffers on the provisions. Obviously we 1:01:10 1 hour, 1 minute, 10 seconds will continue to keep creating appropriate level of uh ECL on our book. 1:01:15 1 hour, 1 minute, 15 seconds uh like you said while uh I don't think that is going to come to NBFCs anytime soon because the ECL framework for bank itself is coming in only from 1st April 1:01:24 1 hour, 1 minute, 24 seconds 2027 so I don't think that 5% is going to come on stage two anytime soon for the NBFCs but just that we given that we 1:01:31 1 hour, 1 minute, 31 seconds are coming off a year when we have seen some challenges u possibly we are playing a little conservative from a credit cost levels depending on how the 1:01:39 1 hour, 1 minute, 39 seconds DPDS stack up you could uh see some benefit on the credit cost line kicking in in actuals and lastly to a question 1:01:47 1 hour, 1 minute, 47 seconds on the drop in cost of funds. See if you exclude uh the ADB borrowings that we did our overall cost for this quarter 1:01:56 1 hour, 1 minute, 56 seconds will be somewhere around 8.25 to 8.3 and u given the you know macroeconomic challenges the geo geopolitical 1:02:04 1 hour, 2 minutes, 4 seconds challenges it is you know creating a little bit of uh uncertaintity in the you know in the uh you know borrowing 1:02:12 1 hour, 2 minutes, 12 seconds space. So at this point of time I would probably say we don't expect you know too much of benefit to come in from cost of funds in the next financial year but 1:02:21 1 hour, 2 minutes, 21 seconds they'll continue to be a monitorable. So we will obviously keep pushing banks for much finer rates uh rating upgrade at least till the end of the year or maybe 1:02:29 1 hour, 2 minutes, 29 seconds till the second half of the year is out of question till we start showing some benefit. So most likely I think we should be borrowing uh at average rates 1:02:37 1 hour, 2 minutes, 37 seconds of closer to uh 8.5 levels. uh which means you know at a book level you still have another 30 40 basis points of cost 1:02:44 1 hour, 2 minutes, 44 seconds but that will come over the next 2 to 3 years. So if you're borrowing at 8 and a half naturally the book has to come to about 8 and a half right but it'll 1:02:52 1 hour, 2 minutes, 52 seconds probably take 2 to 3 years. So uh you know that much of juice could still be there in the book. Uh but geopolitical 1:02:59 1 hour, 2 minutes, 59 seconds challenges are creating some uh uh you know some murmurss especially on the on the liquidity side. We will get to know obviously in April we have not borrowed 1:03:07 1 hour, 3 minutes, 7 seconds any monies given the strong liquidity position that we are in but we'll get to know a little better over the next couple of months and I think we'll be 1:03:15 1 hour, 3 minutes, 15 seconds able to give you a better perspective in the next earnings call at this point of time we would say I think we will largely be where we were in FY26 uh yeah 1:03:23 1 hour, 3 minutes, 23 seconds FY26 thank you thank you we take the last question from 1:03:30 1 hour, 3 minutes, 30 seconds the line of Aditya Das from Samatwam capital please go ahead Hi. Am I ordering this? 1:03:39 1 hour, 3 minutes, 39 seconds Yes. Yes. Please go ahead with your question. 1:03:57 1 hour, 3 minutes, 57 seconds Since there is no response from the participant, that brings us to the end of the question and answer session. I would now like to hand the conference over to the management for the closing remarks. 1:04:07 1 hour, 4 minutes, 7 seconds Yeah. Uh thank you all uh for taking up this call with us. As we uh said in the opening remarks uh you'll see the uh 1:04:16 1 hour, 4 minutes, 16 seconds onward and forward uh growth coming back uh to fivestar and uh I'm happy to uh 1:04:23 1 hour, 4 minutes, 23 seconds give a closing comment that uh I'm happy to share that board has declared uh the same dividend what uh we got in last 1:04:32 1 hour, 4 minutes, 32 seconds financial year. Uh so that gives also a good positive uh sign to the retail 1:04:38 1 hour, 4 minutes, 38 seconds shareholders. So with this uh uh positive comment I'm thanking each and everyone who have joined this call.