Fusion Finance Limited — Q4 FY26

Fusion Finance Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=80HfBecKANw Published: 3 hours ago

0:01 1 second Ladies and gentlemen, good day and welcome to Fusion Finance Limited Q4 and FI26 conference call. As a reminder, all 0:09 9 seconds participant line will be in the listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the 0:18 18 seconds conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now 0:27 27 seconds hand the conference over to Mr. Misha from Fector SPR. Thank you and over to you sir. 0:32 32 seconds Thank you. Good morning everyone and thank you for joining us on the Q4 FI26 earnings conference call of Fusion 0:39 39 seconds Finance Limited. We have the company senior management team with us on this call. Before we begin, I would like to 0:47 47 seconds remind you that certain statement made in today's discussion may be forward-looking in nature and may involve certain risk and uncertaintities. A detailed statement in 0:55 55 seconds this regard is available in the Q4 FI26 investor presentation that has been uploaded on the stock exchanges and the company website. I now hand over the 1:04 1 minute, 4 seconds call to Mr. Sanjay Garyi, MD and CEO Fusion Finance Limited to begin the proceedings. Thank you and over to you. 1:12 1 minute, 12 seconds Yeah, thank you. Good morning everyone. 1:14 1 minute, 14 seconds Thank you for joining us today for Fusion Finances Q4 and full year FI26 earnings call. FI26 was an important 1:23 1 minute, 23 seconds year of learning, testing and institutional building for us at Fusion. 1:28 1 minute, 28 seconds During the year, we prioritized portfolio quality, materially strengthened our credit guard rails, invested in collections infrastructure 1:37 1 minute, 37 seconds and technology, and sharpened customer selection across both MFI and MSME businesses. At the same time, we gained 1:46 1 minute, 46 seconds far greater clarity on the operating segments and the customer profiles where we believe the business can scale with 1:54 1 minute, 54 seconds stronger portfolio quality and better productivity. This gives us the confidence that the growth we are now 2:01 2 minutes, 1 second seeing is sustainable, operationally stronger and backed by better execution discipline while also positioning fusion 2:09 2 minutes, 9 seconds significantly better to navigate external and operating headwinds. going forward. At the same time, we remain 2:17 2 minutes, 17 seconds mindful of the evolving external environment. Developments in West Asia, volatility in energy prices and 2:24 2 minutes, 24 seconds possibility of inflationary pressures are risk the broader financial system will continue to monitor closely. 2:32 2 minutes, 32 seconds However, let me reconfirm that we see no impact of the crisis on either the book growth or the portfolio performance. 2:40 2 minutes, 40 seconds Before I move to the business update, I would like to acknowledge a few important leadership developments during the quarter. We are pleased to have 2:50 2 minutes, 50 seconds Priyanka Vada join us as the chief strategy officer. Priyanka brings deep industry experience across financial 2:57 2 minutes, 57 seconds services and will play an important role in fusions next phase of technology process and transformational growth. We 3:06 3 minutes, 6 seconds also welcome Reika Agarwal who has joined the board as nominee director representing Creation Investments, one of our key promoter group shareholders. 3:15 3 minutes, 15 seconds At the same time, I would like to place on record our sincere appreciation for Mr. Kenneth Wandererell for his valuable 3:23 3 minutes, 23 seconds guidance and contribution during his tenure as a nominee director with Fusion. We wish him all the very best 3:30 3 minutes, 30 seconds going forward. Let me now come to the business update. Q4 FI26 disbbursement 3:36 3 minutes, 36 seconds stood at 2140 cr up from 1594 cr in Q3 reflecting strong sequential growth 3:43 3 minutes, 43 seconds during the quarter. This momentum was driven by deeper identification of right customer segments and continued 3:51 3 minutes, 51 seconds investments in automation across onboarding and collections enabling field teams to operate with significantly lower process friction. 4:00 4 minutes Productivity improved materially across both MFI and MSME businesses during the quarter, helping the AUM trajectory turn 4:08 4 minutes, 8 seconds positive during Q4. Another important operating change implemented during FI26 was the move towards a far more granular 4:18 4 minutes, 18 seconds branch level operating framework. Since November 25, we have classified branches across category A to D based on credit 4:26 4 minutes, 26 seconds metrics, operating quality, and growth behavior. This framework is now helping drive both growth allocation and risk 4:34 4 minutes, 34 seconds calibration at the branch level. We are beginning to see meaningful benefits from this approach. Currently, nearly 4:42 4 minutes, 42 seconds 90% of our dispersements are coming from category A and B branches. Importantly, we believe the business today has 4:50 4 minutes, 50 seconds sufficient headroom to continue growing in a calibrated manner without meaningfully increasing portfolio risk. 4:57 4 minutes, 57 seconds This confidence comes from improved customer selection, stronger operating guardrails, and significant penetration 5:04 5 minutes, 4 seconds opportunity that continues to exist within our existing branch network. 5:10 5 minutes, 10 seconds Our AUM increased from 6,800 cr to 7,400 cr during the quarter. Also, the average 5:17 5 minutes, 17 seconds AUM for the quarter increased by nearly 200 cr sequentially. This is an important shift because the benefit of 5:25 5 minutes, 25 seconds the higher average book will start reflecting positively in NI and POP from Q1 onwards with operating leverage 5:33 5 minutes, 33 seconds expected to accelerate from Q2. Coming to portfolio quality, the forward flow rates in current bucket continue to 5:41 5 minutes, 41 seconds remain at sub0.1% level on a net basis and we continue to see similar trends through April and May 5:50 5 minutes, 50 seconds so far this year. On collections, we are now beginning to see the benefit of people, processes and technology 5:57 5 minutes, 57 seconds investments made over the last few quarters. A large part of our monitoring and reminder systems are now becoming AI 6:05 6 minutes, 5 seconds and trigger-driven, allowing early intervention, better execution consistency, and tighter portfolio 6:12 6 minutes, 12 seconds monitoring. During Q4 alone, we executed over 5 million AIled customer interactions mostly in collection and 6:20 6 minutes, 20 seconds customer onboarding. This is helping improve customer engagement, consistency, early delinquency monitoring and field productivity. 6:29 6 minutes, 29 seconds Importantly, we continue to see very strong collection efficiency trends across most of our core operating states 6:37 6 minutes, 37 seconds including UP, Bihar and Orisa where collection efficiencies continue to remain at approximately 99.75%. 6:45 6 minutes, 45 seconds This gives us the confidence that the portfolio stability we are now seeing is broad-based and supported by improving 6:52 6 minutes, 52 seconds customer behavior as well as stronger field execution discipline. are 90 plus DPD cash recoveries including the right 7:01 7 minutes, 1 second of recovery crossed 35 cr for the quarter. Importantly the rightback component within this stood at 7:08 7 minutes, 8 seconds approximately 21 cr compared to nearly 15 cr in the previous quarter reflecting improving recovery efficiencies and 7:16 7 minutes, 16 seconds portfolio behavior despite a far reducing writeoff book. As communicated earlier, our collection model in these 7:25 7 minutes, 25 seconds buckets continue to remain tightly managed through combination of in-house field teams and AI enabled calling 7:32 7 minutes, 32 seconds infrastructure. On customer quality, we continue to focus on lower leveraged and more stable borrower segments. While the 7:40 7 minutes, 40 seconds new to fusion customer mix in MFI increased steadily from 24% in Q1 to 35% 7:49 7 minutes, 49 seconds in Q3 and now stands at 37% at the end of Q4. Within MSME as well we continue 7:56 7 minutes, 56 seconds to strengthen our positioning in the loan against property segment particularly within the 8 to five 15 8:03 8 minutes, 3 seconds lakh ticket size category. Collection efficiency trends remain robust across both the businesses with MFI collections improving to 99.7 and MSME at over 99.3. 8:16 8 minutes, 16 seconds While our stated credit cost guidance remains in the range of 3.25 to 3.75% 8:23 8 minutes, 23 seconds in MFI over the long term. This is more so adjusted for any cyclical issues. 8:30 8 minutes, 30 seconds Internally however the portfolio trends are modeled towards a credit cost of 2.5%. 8:38 8 minutes, 38 seconds We also feel that with MSME as a portfolio kicking in the overall weighted credit cost guidance will be closer to 2.5%. 8:50 8 minutes, 50 seconds As a result of the operating and portfolio improvements undertaken over the last few quarters, quarterly credit cost have reduced significantly down to 8:58 8 minutes, 58 seconds 56 crores from 80 cr in the previous quarter. Alongside this, we are also in the process of migrating to a 9:06 9 minutes, 6 seconds significantly more advanced LMS. The UAT process has already commenced last week and the migration is expected to be 9:14 9 minutes, 14 seconds completed by the end of August 2026. The new platform should materially improve branch productivity, onboarding quality, 9:22 9 minutes, 22 seconds monitoring capability, and customer servicing while reducing further process friction across both underwriting and 9:29 9 minutes, 29 seconds collections. As we move into FI27, we will additionally focus on two key operating priorities. One, stronger 9:37 9 minutes, 37 seconds execution around branch consolidation and overall operating efficiency at a branch level. and two further strengthening client onboarding 9:46 9 minutes, 46 seconds retention and calibrated book growth across existing and new centers. Coming to profitability reported packed for Q4 9:55 9 minutes, 55 seconds stood at 114 crores. However, excluding the one-time DTA impact core profitability for the quarter stood at 10:03 10 minutes, 3 seconds 37.5 crlating into an annualized ROI of nearly 2.1% 10:09 10 minutes, 9 seconds for Q4. The first 45 days of FI27 give us further confidence in our direction. 10:16 10 minutes, 16 seconds Growth trends remain healthy. 10:18 10 minutes, 18 seconds Collections continue to stay strong and portfolio quality is stable across core markets. With a branchled execution 10:26 10 minutes, 26 seconds model now settling well on the ground, we remain confident of progressing towards our 10,000 cr portfolio aspiration by March 2027 while 10:35 10 minutes, 35 seconds maintaining disciplined portfolio metrics. With that I would like to now hand over the call to Mr. Krishnan Gopal to take you through the financials in greater detail. 10:45 10 minutes, 45 seconds Thank you Sanjay and good morning everyone. I am pleased to present our Q4 and FY26 financial performance with 10:53 10 minutes, 53 seconds research index and at our last interaction. This has been a year that reflects meaningful financial 11:01 11 minutes, 1 second strengthening across capital liquidity margins asset quality and provisioning. 11:06 11 minutes, 6 seconds Let me take you through each of them in turn. Before I get into the financials, a brief about important word uh a brief 11:15 11 minutes, 15 seconds but important word on where we have come from. During the earlier few quarters, the company was navigating 11:22 11 minutes, 22 seconds financial covenants under stress, caveats, ongoing concern and cautious lender sentiment. I am pleased to report that all these challenges are now firmly behind us. 11:34 11 minutes, 34 seconds The improvement in our book is clearly evident in strong asset quality metrices like gross NPA of 3.21% and net NPA of 0.51%. 11:46 11 minutes, 46 seconds Our capital and liquidity position remains robust and well capitalized. 11:51 11 minutes, 51 seconds Liquidity stood at 1913 uh cr as on 31st March 26. This liquidity is higher by 11:59 11 minutes, 59 seconds about rupees 500 cr which we have deliberately kept keeping in the geopolitical situation in mind and of 12:07 12 minutes, 7 seconds course this additional liquidity comes at a cost. So this has a additional finance cost of about 7 to 8 crores for the quarter. 12:17 12 minutes, 17 seconds In addition to on balance sheet liquidity, company holds sanctions in hand amounting to 1245 cr which are 12:25 12 minutes, 25 seconds drawable at any time further reinforcing our funding flexibility and further in addition to this company has uh strong 12:34 12 minutes, 34 seconds pipeline of about 2,500 cr. Capital adequacy stood at 36.46% comfortably above regulatory 12:42 12 minutes, 42 seconds requirement. This level of capitalization provides meaningful headroom to support the target of around 12:49 12 minutes, 49 seconds 10,000 crum in FY27 without requiring any further equity infusion during this 12:55 12 minutes, 55 seconds year. During quarter 4 of this year, we raised 240 cr in new borings comprising 13:04 13 minutes, 4 seconds of term loans, direct assignments and pass through certificates. 13:08 13 minutes, 8 seconds For the full year FI26, total debt of about 6,000 cr across our lender base was raised. During the fiscal, we 13:17 13 minutes, 17 seconds onboarded 11 new lenders underscoring the resilience and credibility of our franchise within the financial ecosystem. The lender engagement story 13:26 13 minutes, 26 seconds has continued to evolve positively through quarter 4. Several credit partners that were previously in wait and watch mode have actively re-engaged 13:35 13 minutes, 35 seconds with fresh credit lines extended by both new and existing lenders. The composition of our borrowing base has shifted favorably. Private sector banks 13:44 13 minutes, 44 seconds now account for 42% of our borrowings up from 36%. 13:48 13 minutes, 48 seconds While public sector banks exposure has declined from 27% in FI 25 to 16%. 13:55 13 minutes, 55 seconds Reflecting our uh broadening and diversification of our institutional lender relationship, foreign banks 14:01 14 minutes, 1 second contribute about 18%, NBFC 14%. And uh foreign uh development financial institutions constitute about 4%. 14:12 14 minutes, 12 seconds cost of borrowing front uh our average cost of borrowing for quarter 4 stood at 10.30% 14:19 14 minutes, 19 seconds broadly similar to last quarter demonstrating the stability of our borrowing franchise even as we actively expanded the lender base the marginal 14:28 14 minutes, 28 seconds cost of borrowing moderated further to 10.8% in XR terms in Q4 FY26 from 11.4 4 14:36 14 minutes, 36 seconds again XR in Q3 FI26. This is a 100 bits quarteronquarter improvement reflecting the improving quality of our borrowing 14:45 14 minutes, 45 seconds mix and the re-engagement uh engagement of a broader lender base at a more competitive rates. Going forward, we anticipate our marginal cost of 14:54 14 minutes, 54 seconds borrowing should continue to improve from current levels as the diversity of our sanctions and depth of our lender relationship grows. But of course this 15:03 15 minutes, 3 seconds is subject to the current uh macro environment and geopolitical environment. 15:09 15 minutes, 9 seconds Our credit ratings remain stable across instruments. Long-term debt and NCDs are rated crystal a minus stable and uh Ikra 15:19 15 minutes, 19 seconds a minus stable and uh care by care at a with a stable outlook with care upgrading outlook from rating watch with 15:28 15 minutes, 28 seconds negative implications to stable in quarter 4. That care outlook upgrade is an external validation of the improvement in our financial and 15:36 15 minutes, 36 seconds operational profile and gives us confidence in further uh rating momentum as our profitability and asset quality 15:44 15 minutes, 44 seconds continue to improve. We continue to engage with our other two rating agencies on the upgrade discussions. 15:52 15 minutes, 52 seconds Net interest margin on for the Q4 FI26 stood at 11.44% 44% up 12 bit basis 16:01 16 minutes, 1 second points from 11.32 in Q3. Net interest income for Q3 FI26 was 220 cr compared 16:09 16 minutes, 9 seconds to 237 cr a 6% sequential decline primarily reflecting higher finance cost due to the additional liquidity which we 16:18 16 minutes, 18 seconds have kept as we have discussed in the beginning of the section. 16:23 16 minutes, 23 seconds As the AUM grows in FI27, NI shall expand correspondingly. 16:28 16 minutes, 28 seconds Total operating expenses has stayed stable in Q4 uh at 205 cr nearly flat 16:35 16 minutes, 35 seconds sequentially from 207 cr in Q3 and flat yearon year from 206 cr in Q4 FY FY25. 16:44 16 minutes, 44 seconds For the full year FY26, OPEX was at around 832 cr. As a result, pre-provisioning operating profits for 16:52 16 minutes, 52 seconds Q4 FY26 to that 93 cr broadly flat quarteron quarter at 94 cr in Q3 FY26 17:01 17 minutes, 1 second and up 3% yearonear from 90 cr in Q4 of FY25. This flat PP is after absorbing 17:10 17 minutes, 10 seconds additional finance cost of about 7 to 8 crores due to additional liquidity maintained during the quarter. 17:17 17 minutes, 17 seconds The full year FY26 pop was 362 cr. This demonstrate the franchise underlying earning strength and the tangible 17:25 17 minutes, 25 seconds benefits of the operating efficiency systematically built throughout the year. Profit before tax for Q4 FY26 was 37 cr up 166% from 14 cr in Q3 FY26. 17:38 17 minutes, 38 seconds At tax asset of 76.8 8 crore was recognized during Q4 FY26 arising from temporary taxable differences primarily 17:47 17 minutes, 47 seconds from the ECL provisions to the extent uh considered uh recoverable based on our forward profitability assessment. This 17:55 17 minutes, 55 seconds DT recognition reflects our confidence in the trajectory of future taxable profits. 18:01 18 minutes, 1 second Thus with the impact of recognition of DT the PAT for the quarter was 114.19 cr excluding the impact of DT the 18:08 18 minutes, 8 seconds annualized ROA for Q4 FI26 stood at 2.08%. 18:15 18 minutes, 15 seconds For the full year FY26, PAT was 13.9 cr making a decisive return to the annual profitability after a loss of about 18:23 18 minutes, 23 seconds 1,200 cr. In FY25 on ECL we had provisions as uh as per ECL model of 53 cr during the quarter 18:32 18 minutes, 32 seconds write offs were 136 cr closing ECL was 270 cr this works to a provision coverage of 54% on stage 2 assets and 18:41 18 minutes, 41 seconds 71.5% on stage 2 assets collectively constituting about 81% coverage in stage 18:48 18 minutes, 48 seconds two and stage three. The rate of recovery during the quarter stood at 21 cr up from 14 cr in Q3 demonstrating 18:55 18 minutes, 55 seconds improving effectiveness in our in-house collection teams. Thus the net P&L impact of credit cost for Q4 was 32 cr 19:03 19 minutes, 3 seconds equivalent to 0.5 cr of average on book loans for the quarter. This compares to the 65 cr in Q3 FI26. 19:12 19 minutes, 12 seconds The trajectory of credit cost normalization has remained clear and consistent. 19:18 19 minutes, 18 seconds I would like to mention that during this quarter we have uh uh released uh management overlay uh to the extent of 19:26 19 minutes, 26 seconds five 5 cr lesser as compared to the Q3 based on the monthly net forward flow rates from the current bucket which is 19:36 19 minutes, 36 seconds 0.03 in Q4 F5.6 six and continued improvement in delinquency records and the quality of the new book performing 19:44 19 minutes, 44 seconds at 99.77% collection efficiency. We remain positive to maintain a stable state credit cost of 2.5 to 3%. 19:55 19 minutes, 55 seconds The company has maintained a strong emphasis on portfolio hygiene and conservative provisioning through uh Q4. 20:02 20 minutes, 2 seconds Asset quality matrices improved further during the quarter. Gross NP declined to 3.21%. 21% in Q4 from 4.38 in Q3 of I26. 20:12 20 minutes, 12 seconds A fourth consecutive quarter of uh gross NPA improvement. Net NPA improved to 20:16 20 minutes, 16 seconds 0.51% from 0 uh.63% in Q3 and 0.60% for the internal calibration. These are 20:26 20 minutes, 26 seconds among the most important validation matrices for our recovery. total equity as on 31st March 26 to that 2456 20:36 20 minutes, 36 seconds cr rupees. To conclude, Q4 and FY26 mark the completion of a meaningful phase of financial stabilization and the return 20:44 20 minutes, 44 seconds to profitability. The year has been characterized by the stable and improving margins, strengthening provisioning coverage, healthy liquidity 20:52 20 minutes, 52 seconds and a materially improved lender landscape. As we enter FI27, this 27 are uh financial priorities are clear. 21:01 21 minutes, 1 second sustaining financial discipline and cost efficiency and cost to income ratio improvement and the primary lever uh as 21:08 21 minutes, 8 seconds the primary lever of the operating leverage deepening the divers and diversifying our lender relationships to support uh 21:17 21 minutes, 17 seconds emo 10,000 cr target and continuing the to benefit from the marginal cost of borrowing improvements as lender 21:24 21 minutes, 24 seconds confidence builds on with improving asset quality robust capital adequacy a strengthening funding profile across 11 21:31 21 minutes, 31 seconds new onboarded lenders in FY26 and a clear path to credit cost normalization. 21:36 21 minutes, 36 seconds We are well positioned to deliver steady and sustainable progress in the year ahead. 21:44 21 minutes, 44 seconds Thank you. And with that I open the floor for the Q&A session. Sanjay and I along with the rest of the management team are available to answer your questions. Thank you. 21:55 21 minutes, 55 seconds Thank you sir for your presentation. We will now ladies and gentlemen we will now begin with the question and answer session. Anyone who wishes to ask a 22:02 22 minutes, 2 seconds question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and two. Participants 22:11 22 minutes, 11 seconds are requested to use handsets while asking a question. 22:15 22 minutes, 15 seconds Ladies and gentlemen we'll wait for a moment while the question Q assembles. 22:20 22 minutes, 20 seconds Our first question come from the line of Abijit Treval from Motila Losal Financial Service Limited. Please go ahead. 22:29 22 minutes, 29 seconds Yeah, good morning sir. Thank you for taking my question. U so two three things. One is uh this PTA that we have 22:36 22 minutes, 36 seconds created in this quarter. Uh is this the only quarter where this DTA will be created or going forward also uh there can be more uh DT creation? 22:48 22 minutes, 48 seconds Thanks Abiji. So uh as you are aware we were not recognizing DTA as there was a 22:55 22 minutes, 55 seconds cav uh caveat on the going concern. Now we have started the uh defertex asset for the first time after about four five 23:03 23 minutes, 3 seconds quarters. Now going forward it is going to be a VAU as far as uh defer tax asset 23:10 23 minutes, 10 seconds is uh concerned and uh to the extent recoverable and availability we are going to recognize the DTA every quarter or year based on the availability. 23:22 23 minutes, 22 seconds Got it. So for the next few quarters we can see a DTA creation and to that extent there could be tax writebacks in the coming quarters as well. 23:32 23 minutes, 32 seconds Yeah, that's the the normal situation and we'll follow that. 23:35 23 minutes, 35 seconds So, Abij the total DTA as we are aware is close to around 390 crores. So, you're aware we release about 77 crores. 23:44 23 minutes, 44 seconds Now, the balance is left which is which in the due course on a pro data basis. 23:48 23 minutes, 48 seconds So, there is no hurry to consume that but on a proata basis in the next 12 to 18 or 24 months we will consume as and 23:55 23 minutes, 55 seconds what the auditor is also comfortable with. But that's the amount that is left to be uh let's say consumed or whatever. 24:03 24 minutes, 3 seconds So 390 minus 77 is what is still left on the table. 24:08 24 minutes, 8 seconds Got it. Uh the other question I had was on the liability side. Uh of course I mean last last year meaning FI25 24:16 24 minutes, 16 seconds it reported a big loss. So obviously PSU banks uh don't really give out lending lines. Now that we have at least 24:25 24 minutes, 25 seconds reported a profit this year FI26, do you expect that going forward uh lending lines from PSUs can also start opening 24:34 24 minutes, 34 seconds up? And the related question in the opening remarks Christian said that uh we are in discussion with the credit 24:41 24 minutes, 41 seconds rating agencies the other two uh for an upgrade. So I mean what is it that they're looking for? Is it a improvement 24:49 24 minutes, 49 seconds in profits, improvement in asset quality that they will be monitoring or do they also have some uh size the balance sheet size? 25:00 25 minutes So uh I'll go one by one on your questions uh Abijit. So one is uh during 25:07 25 minutes, 7 seconds this year also we have had decent support from PSU banks like one of the large PSU banks has uh supported us to 25:16 25 minutes, 16 seconds the tune of 800 crores on direct assignment fund in this year. So we continue to get the support from PSU 25:23 25 minutes, 23 seconds banks and going forward uh we have had discussion with all the PSU banks and uh they were looking for the these annual 25:32 25 minutes, 32 seconds results and the final balance sheet and everyone is broadly open to consider and we are hopeful we are confident that 25:39 25 minutes, 39 seconds we'll get the support and while we speak our proposals are already with about five six banks 25:46 25 minutes, 46 seconds including three four PSU banks for uh the credit uh sanction under the credit guarantee scheme. So there is a uh positive trajectory on that side. 25:58 25 minutes, 58 seconds I think Abij the PSU banks may want to start with a credit guarantee scheme with everybody because that's like uh so 26:05 26 minutes, 5 seconds you you're aware that we have close to about 300 cr that we can take up. So uh my sense is that uh our applications are 26:13 26 minutes, 13 seconds under process. Most of the 300 K that we take up will come from the PSU banks and that that will trigger the normal uh lending from them. 26:23 26 minutes, 23 seconds On the rating fund, we continue to engage with all the rating agencies and as per our discussions uh uh the other 26:30 26 minutes, 30 seconds two rating agencies were looking forward to our annual results in the balance sheet and uh uh then they they wanted to 26:37 26 minutes, 37 seconds take a call. However, in between you know this geopolitical situation has happened. So now it's uh less of the 26:45 26 minutes, 45 seconds internal because uh uh we we have already uh we are already profitable asset quality is robust and they should be comfortable but I think the uh the 26:54 26 minutes, 54 seconds whole geopolitical situation and the performance of the industry would be a monitorable for them. However, as we mentioned we are confident and uh we continue to engage with them. 27:07 27 minutes, 7 seconds Perfect. Thank you. And then the last question I had was on how should we look at uh FI27. Now a few things that came 27:15 27 minutes, 15 seconds out during the opening remarks was that despite this West Asia war we are not seeing any impact on growth and asset 27:22 27 minutes, 22 seconds quality collections holding up well. Uh then we also said that on credit costs maybe 3.25 25 3.5 is through cycle 27:31 27 minutes, 31 seconds credit cost but this year given that MSM is also going to ramp up we are thinking of something in the world cup of 2.5% 27:39 27 minutes, 39 seconds credit cost so so if I were to put this all together uh how should we think about uh maybe annual growth in FI27 and 27:48 27 minutes, 48 seconds and how the borrowing costs could shape up and the fact that going forward the interest income reversals could be lower 27:55 27 minutes, 55 seconds so margins could expand what could that kind of translate into the ROS work for this year. 28:02 28 minutes, 2 seconds So Aij, I'll answer your first part and I'll let Vishan take the second one. Uh in terms of FI27 outlook, we continue to 28:09 28 minutes, 9 seconds hold firm to the guidance of 10,000 cr and like I explained the first 45 days which have been like completely part of 28:17 28 minutes, 17 seconds the West Asia crisis. Uh we do not see any impact. We also feel that so you're absolutely right. there could be some 28:25 28 minutes, 25 seconds challenges in the economy and uh there could be inflationary pressures. uh our view is that in the last one one and a 28:32 28 minutes, 32 seconds half year the book that we have built is very very strong in terms of the credit matrices that that we have used and I 28:40 28 minutes, 40 seconds think uh this is uh these kind of measures uh help uh manage when whenever 28:47 28 minutes, 47 seconds the let's say macro headwinds come because nobody knows when the macro headwinds are going to come but I think the prudence or the overp prudence that 28:55 28 minutes, 55 seconds we used in customer selection that is going to ensure that the portfolio is able to manage multiple headwinds on the 29:03 29 minutes, 3 seconds macro side. However, I think uh like uh I think the government has also talked 29:10 29 minutes, 10 seconds about it austerity measures have to be there uh and we have we are already started working on austerity measures in 29:17 29 minutes, 17 seconds the last uh 30 to 45 days. uh and there will be certain uh costs uh which we 29:23 29 minutes, 23 seconds think uh we need to cut down uh whether it is uh some additional branch costs or 29:30 29 minutes, 30 seconds travel costs but there will be uh there are already significant austerity measures that we have put in place however from an amum growth perspective 29:39 29 minutes, 39 seconds and portfolio perspective we'll continue to hold that 10,000 cr and uh let's say a portfolio uh flow rate of uh between 29:48 29 minutes, 48 seconds 0.1 to 0 15% net in the current bucket rest I'll leave to Krishnan to answer so Arjit can you please elaborate what 29:57 29 minutes, 57 seconds was the other question on so what I was trying to understand is uh if I look at fourth quarter also right I mean we are 30:05 30 minutes, 5 seconds yet to see an improvement in the peak at the peak level so going forward now 30:13 30 minutes, 13 seconds yeah right now going forward given that uh maybe interest income some reversals which are happening come become lower. 30:22 30 minutes, 22 seconds Uh hopefully the marginal cost of borings reduces as we move forward. Uh how should we think about margins, optics and finally the RO for this? 30:34 30 minutes, 34 seconds Yes. So uh the baseline for this is uh yes the AUM has grown during this quarter. However uh uh the average AUM is broadly flat. 30:47 30 minutes, 47 seconds On top of it uh the POP is broadly flat because of the two things two three things. One is as we have mentioned we 30:56 30 minutes, 56 seconds have kept the additional liquidity of about 500 cr. So which has an impact on the uh interest cost to the tune about 8 31:04 31 minutes, 4 seconds cr and uh deliberately uh I mean uh the DA income has been acured lesser by 31:11 31 minutes, 11 seconds about 7 cr during the quarter. So uh uh this this this has been broadly the impact. So if we nullify this impact the 31:20 31 minutes, 20 seconds POP would have been higher by uh by that amount. As far as OPEX is concerned at a 31:27 31 minutes, 27 seconds broad level uh the total OPEX for this year has been 832 cr. What we envisage 31:34 31 minutes, 34 seconds for the next year is uh broadly a 56% increment into that at a annual level. 31:41 31 minutes, 41 seconds Having said so, uh as a team the whole of fusion finance team is is running a 31:48 31 minutes, 48 seconds OPEX rationalization project and we are going to look for the avenues wherever possible including as we mentioned in 31:56 31 minutes, 56 seconds the past branch rationalization and any cost through processes and we have engaged uh some taking help of some 32:05 32 minutes, 5 seconds experts also on that front. So uh that should result into a uh opex reduction opex uh rationalization and definitely 32:14 32 minutes, 14 seconds it should not go beyond 4 5% of increment over 832 cr so some in summary 32:23 32 minutes, 23 seconds going forward there should be a increase in aum and that will reflect into pop we 32:30 32 minutes, 30 seconds don't see any increase in the opex so that will again come into the uh pop credit cost guidance as Sanjay has 32:38 32 minutes, 38 seconds mentioned I mean is uh uh is uh stable state. So uh there would definitely be a increase in 32:46 32 minutes, 46 seconds probably net net POP you will start seeing growth in Q1 and the acceleration in POP that we all expect as a part of the uh AOP will start coming in from Q2. 32:56 32 minutes, 56 seconds So the real acceleration will happen in Q2 but you will see growth in Q1 on POP. 33:04 33 minutes, 4 seconds Got it. This answers all my question. Uh thank you so much and I wish you and thank you. 33:15 33 minutes, 15 seconds Next question come from the line of Nidesh from Invest. Please go ahead. 33:19 33 minutes, 19 seconds Uh thanks for the opportunity sir. So first question is on interest income uh on a Q on Q basis. The interest income is flat despite uh we seeing uh decent 33:28 33 minutes, 28 seconds AUM growth on a Q basis and sharp improvement in asset quality. So what is the reason for flat interest income on a 33:35 33 minutes, 35 seconds QQ basis? Nitesh any other question we will answer them together. 33:40 33 minutes, 40 seconds Yeah. Second question is on active borrowers growth. Uh so uh how do you see active borrowers growth in FI27 and 33:47 33 minutes, 47 seconds uh let's say any any target of new customer acquisition for FI27. Uh third question is on what are the plans to add 33:55 33 minutes, 55 seconds branches in FI27. These are the three questions sir. 33:59 33 minutes, 59 seconds Okay. So on the flat NI, Krishna has already explained uh flat or slightly reduced NI essentially because the 34:07 34 minutes, 7 seconds average book growth uh impact will start coming in. Uh right now you see the average book growing or the average OEM growing by already between 150 to 200 K. 34:17 34 minutes, 17 seconds So that is about 67 cr uh uh upside. 34:21 34 minutes, 21 seconds However, uh the dent comes from the additional liquidity that's about 8 to 9 cr PNL impact. Uh lesser DA that we done 34:30 34 minutes, 30 seconds that's another about 6 to 7 cr. So that's why you see the NI flatter. Uh 34:36 34 minutes, 36 seconds however like I explained Q1 onwards you will see this NI growing and then the acceleration will start in Q2 because 34:44 34 minutes, 44 seconds that's where uh the real acceleration on the average book will start. So right now you see the AUM growing but the average book will grow much uh has grown 34:54 34 minutes, 54 seconds much lesser. You understand how the average and the EOP concept operates. So that's one. Hope that answers your flat 35:01 35 minutes, 1 second NI on the active borrower. See there's a call that we have taken that we will uh go slow on entry-level borrowers. So 35:09 35 minutes, 9 seconds less that's less than 40,000 that's why you see that coming down there's a slide that we have explained in less than 40,000 and between 40,000 to one lakh is 35:19 35 minutes, 19 seconds where the sweet spot is. So uh from a new client acquisition most of the upside in quarter 4 has come from uh 35:28 35 minutes, 28 seconds okay has come from the new loans rather than the ticket size increase. The ticket size has only gone up between these two quarters by 2 to 3%. The real 35:36 35 minutes, 36 seconds upside has come from the number of borrowers which has gone up by about 30 31%. 35:42 35 minutes, 42 seconds Uh we were acquiring uh in terms of numbers about 34% uh volume was coming or dispersement was coming from new 35:51 35 minutes, 51 seconds borrowers. This time it is 37%. So now you see that focus we've been telling you that between 35 to 40% of the new 36:00 36 minutes volume will come from of the new dispersement will come from new borrowers. So now you see that inching towards 37. The good thing is that in 36:09 36 minutes, 9 seconds that 37% and we have explained majority of it is coming from less leverage borrowers and less new to credit 36:16 36 minutes, 16 seconds borrowers and 80% of that is coming from just one borrower uh other than fusion. 36:24 36 minutes, 24 seconds Yeah. So that's on the active borrower and we continue to so 37% of this uh between 35 to 40% right now we are 37 I 36:33 36 minutes, 33 seconds think we will be closer to 40% on new client acquisition on the new disbbursement on the branch consolidation or on the branch growth so 36:42 36 minutes, 42 seconds see what we had done was that when our book was at about 12,000 crores we had 15400 micr finance branches uh there 36:49 36 minutes, 49 seconds were some 250 branches which we had split because the existing AUM of the branches had crossed 12 to 14 36:57 36 minutes, 57 seconds crores. Now we all are aware that the AUM has dropped since then. So there are close to about 200 branches uh which we 37:06 37 minutes, 6 seconds had split to form another set of branches. Uh now the parent branch itself the AUM has collapsed and that 37:13 37 minutes, 13 seconds market can be managed by the uh parent branch rather than the offshoot branch that we created. The plan hence is that 37:23 37 minutes, 23 seconds of these 200 branches a lot of branches we will consolidate and there are about 70 to 100 branches that we will add. So 37:31 37 minutes, 31 seconds the net addition will be negative by about 100 but that is more like a technical because these 200 240 branches 37:39 37 minutes, 39 seconds are more like a drag on opex and not technically now required considering that the parent branch can manage. uh and these 70 to 80 branches essentially 37:48 37 minutes, 48 seconds uh we are looking at in three states between Tamil Nadu, West Bengal and Assam and in all these three markets our collection efficiency is around 99.8 37:57 37 minutes, 57 seconds uh and the portfolios are uh roughly sub 5%. 38:04 38 minutes, 4 seconds Sure. Uh one more question on MSME. 38:07 38 minutes, 7 seconds Thank you. I'm sorry to interrupt but you may please rejoin queue for more questions. Thank you. 38:12 38 minutes, 12 seconds Sure. Thank you. Our next question comes from the line of Viral Sha from IFL Capital. Please go ahead. 38:19 38 minutes, 19 seconds Yeah. Hi Sanjay and Krishan. Good morning and congrats on a good set of numbers. Uh I had two questions and uh probably two follow-ups uh if that's 38:27 38 minutes, 27 seconds okay. Uh so first uh is uh with regards to I understand uh Krishna has given fairly detailed explanation with regards 38:35 38 minutes, 35 seconds to yields and why NI did not see uh uh say growth in this quarter. Uh what I wanted to understand is have we taken 38:43 38 minutes, 43 seconds any rate hikes from April? Uh more importantly, is there actually a scope for uh uh us to now take a rate hike 38:51 38 minutes, 51 seconds given that the asset quality trends are now on an improving trajectory and the reported numbers now already start factoring in a better credit cost 38:59 38 minutes, 59 seconds outcome and while the cost of funds in general for the markets are uh is likely to increase or has already started 39:05 39 minutes, 5 seconds increasing for especially us uh it's unlikely to increase at least in the near term. So is there a case for us to 39:13 39 minutes, 13 seconds uh say increase the rates on incremental basis? 39:17 39 minutes, 17 seconds Yeah. Any other question Vir then we will collectively answer. 39:20 39 minutes, 20 seconds Sure. Uh the second question I had was with regards to uh if you can give some uh numbers around the disbbursement 39:29 39 minutes, 29 seconds growth and also the collection efficiencies in the month of April and maybe May first half. uh I understand you gave the qualitative flavor but if 39:36 39 minutes, 36 seconds you can help us with numbers that will be quite helpful and uh the two clarifications or a follow-up that I had 39:43 39 minutes, 43 seconds was uh you mentioned about uh CGS MFI helping us uh the 300 crores cap now is that uh uh very clear that it is at a 39:52 39 minutes, 52 seconds borrower level and not at a lender level and the second was uh the DTA recognition that you mentioned of uh say 40:00 40 minutes uh the residual 330 odd crores uh will that be over the next four quarters or six quarters or eight 40:07 40 minutes, 7 seconds quarters just some clarity over that okay so the first three questions I'll answer DTA I'll let Christian take so uh 40:14 40 minutes, 14 seconds rate hike see uh we have been saying that for the last 9 months there was no rate increase that we had done uh and 40:22 40 minutes, 22 seconds despite the borrowing cost going up by 150 to 200 basis points uh now in uh from 1st of April we have uh increased the rates by a small 0.75%. 40:35 40 minutes, 35 seconds Uh which is in line uh despite the borrowing cost having gone up by 200 basis points and this is in line with the industry but 1 April onwards rate is increased by 0.75%. 40:46 40 minutes, 46 seconds We can't talk about how this will pan out in future and what rate hikes will happen uh in the future. So we will wait and watch on the dispersement growth 40:55 40 minutes, 55 seconds like uh uh normally quarter 1 uh is about 25 30% down as compared to quarter 4 because quarter 4 is supposed to be 41:03 41 minutes, 3 seconds elevated and quarter 1 is little lazy because of multiple things. Uh uh for us quarter 1 has been very similar to uh 41:11 41 minutes, 11 seconds quarter 4. Quarter 4 we were at about what uh 700 crores. Quarter uh one so far we are at about between 625 to 650 41:20 41 minutes, 20 seconds crores. So that's like just four or 5% lower than uh quarter uh three quarter 4 41:27 41 minutes, 27 seconds but this is budgeted as per the AOP the uh 10,000 K amm and the 9,000 K disbbursement plan uh this is as per the 41:36 41 minutes, 36 seconds part of the AOP we had budgeted we had actually budgeted Q1 to be at 10 to 15% lower but we are pleasantly surprised uh 41:44 41 minutes, 44 seconds that uh we are better than that or there on the collection efficiency we continue and reconfirming we continue to be 0.1% 41:52 41 minutes, 52 seconds flow rate net in MFI which translates to a net collection efficiency of 99.9% and a gross collection efficiency of 99.75. 42:01 42 minutes, 1 second This is for the entire month of April and for the first uh 15 days of May that have passed. uh on the uh credit 42:09 42 minutes, 9 seconds guarantee scheme I think there's a lot of clarity while we have given applications our understanding is 300 cr at our level but there are lot other 42:17 42 minutes, 17 seconds questions to be uh asked and answered uh so uh we have given our u uh applications and now we are waiting so 42:26 42 minutes, 26 seconds on credit guarantee I think we should wait and watch for further uh steps and then see how it unfolds on the DTA 42:33 42 minutes, 33 seconds recognition I will leave it to Christian so well on the DTA recognition We will recognize the DTA as and when the uh 42:41 42 minutes, 41 seconds profit comes and whatever the tax liability is equivalent to that we will recognize DTA. That is the plan as of now and we will assess the situation at 42:50 42 minutes, 50 seconds the year end again and this is a dynamic situation. So uh as of now it is it is going to be uh equivalent to the tax 42:58 42 minutes, 58 seconds liability. So uh it will not be four to six quarters. It may be more than that. 43:04 43 minutes, 4 seconds Uh it will be between 18 to 24 months. 18 to 20. 43:10 43 minutes, 10 seconds Got it. And just to clarify Christian, thank Yeah, we you can assume we are late quarters. 43:17 43 minutes, 17 seconds Got it. And just to clarify, Christian, what you mentioned uh on the DTA pieces, which would imply that there would be a zero tax rate or no tax for the next 43:25 43 minutes, 25 seconds eight quarters, right? You won't be recognizing it like this in the one you did in this quarter. 43:30 43 minutes, 30 seconds That's correct. Uh and as I said, we will revisit these situations every year end. So we'll do that as of now it looks like 43:39 43 minutes, 39 seconds as of now what you're saying yes yes that's correct thank you uh Mr. you may please rejoin the queue if you have a more question. 43:47 43 minutes, 47 seconds Our next question come from the line of Rajiv Ma from Yes securities. Please go ahead. 43:53 43 minutes, 53 seconds Yeah. Hi, good morning. Congrats on very good numbers. So most of my questions are answered but just quick two three things. One is with regards to this bad 44:00 44 minutes deck recovery. So you can just quantify the pool from which we are recovering and whether this accelerated 1520 odd cr uh you know income per quarter income. 44:10 44 minutes, 10 seconds Can that continue and what is your estimate then for the whole year for a mex recovery um and uh and would it entail any incremental opex or within 44:18 44 minutes, 18 seconds the same opex the recoveries will come uh second is on the MSME strategy it is 10% of the book roughly at this point in 44:25 44 minutes, 25 seconds time uh but if you can just kind of uh you know take us through granularly what is the strategy for growing the MSM book because right now it's being done from 44:34 44 minutes, 34 seconds selected branches the ticket size is four or five lakhs but I think initially you spoke about uh targeting 8 to three lakhs of ticket price. So what is the 44:42 44 minutes, 42 seconds scale of plan? Uh if you can just elaborate on that. And second is we also spoke about migrating to advanced LMS by August uh for better productivity and 44:51 44 minutes, 51 seconds quality. But would it kind of uh hamper impact uh you know the business in the in the near term? Uh yeah these are the three questions. Thanks. 45:00 45 minutes Okay. Thanks Rajiv. So Rajiv to your first question the total if you see the total uh right back or the income that 45:08 45 minutes, 8 seconds we've received this year is about 110 cr we are targeting between 150 to 160 cr which means additional about 40 cr we 45:15 45 minutes, 15 seconds have explained the cost of collection in this hard bucket is between 25 to 30%. 45:19 45 minutes, 19 seconds So you can assume that 40 cr incrementally net of cost will actually be 30 cr. 40 cr at 25% so knock off 10 45:26 45 minutes, 26 seconds cr so 30 cr incremental and for all hard bucket collection we can assume 25 to 30% as our cost of collections. So net 45:35 45 minutes, 35 seconds whatever we recover 75% straight away goes into 75 to 70% goes straight away into bottom line. So you we will uh 45:43 45 minutes, 43 seconds considering that we have over 2,000 cr while the recent book uh is there is no write off there's almost literally zero write off that we will be doing going 45:51 45 minutes, 51 seconds forward but I think the technology and the strategy that we are using to collect that will lead to this higher uh 46:00 46 minutes and not because of more availability of pools. So that's the way we are looking at it. Just to give you a number uh today we are able to reach out to over 46:08 46 minutes, 8 seconds one lakh uh 90 plus borrowers through the bot calling that we have started to understand bot calling is not something that uh gets by design up front. It 46:17 46 minutes, 17 seconds takes time to set in and all but uh this will not this this is not like coming at a very high opex and this like the opex 46:26 46 minutes, 26 seconds is actually compressed by about 110th or 115th. Second on the MSME strategy. Now 46:32 46 minutes, 32 seconds the MSME strategy that we are working on uh you understand our product is income assessment. We are in tier three and tier four towns. Uh there are two 46:41 46 minutes, 41 seconds additional things that we are doing uh that we are moving we are creating more uh right to win in the ticket size 46:49 46 minutes, 49 seconds between 8 to 15 lakhs and we are saying okay we don't want to play in cash flows. So we don't want to deviate on 46:56 46 minutes, 56 seconds cash flows. We will not deviate on foiler but we want to de we want to see how a better cash flow customer we can 47:04 47 minutes, 4 seconds do with let's say a different collateral. So if you have to ask me the risk that we are taking is on the collateral and not on the cash flow of 47:11 47 minutes, 11 seconds the customer and that is why and that confidence is coming from 6 to9 months of experimentation that we have done where the uh current bucket uh collection efficiency is 99.5 99.4 four. 47:23 47 minutes, 23 seconds So that there are two channels that we are adopting. We have also introduced the connector channel few months back and we're seeing good upside from there. 47:31 47 minutes, 31 seconds Uh so that's about 25 to 30% volume in a steady state will come from the connector channel. uh on the advanced 47:39 47 minutes, 39 seconds LMS uh so uh the the way the advanced LMS will be uh institutionalized or set 47:47 47 minutes, 47 seconds up is that uh there are 10 branches that we will first be piloting then we will be going to about 200 branches once we are confident and there's a back testing 47:55 47 minutes, 55 seconds and this model already operates in two to three MFIs so it is not something that is like completely foreign to the 48:03 48 minutes, 3 seconds MFI sector it is just little bit of customization raises and we is quite confident that after this pilot of 10 48:09 48 minutes, 9 seconds and 200 branches the rest of the 12,300 branches will be simple to execute. So we don't expect and that is why we did 48:17 48 minutes, 17 seconds not keep it in the end of the financial year. We kept it somewhere uh the UAT started about a week back. Uh so May 48:24 48 minutes, 24 seconds June are typically uh not like very accelerated times and hence we have kept it at a time where uh we will have 48:32 48 minutes, 32 seconds plenty of time to check if there are any issues or transition challenges. 48:40 48 minutes, 40 seconds Yeah, thank you so much and best of luck. Thank you. 48:46 48 minutes, 46 seconds Our next question come from the line of Koshik Aaral from Hyon Securities. Please go ahead. 48:53 48 minutes, 53 seconds Yeah. Hi sir, thank you for the opportunity. Uh so couple of questions. 48:57 48 minutes, 57 seconds So firstly on the other income line item I can see there has been a sharp jump on Q on Q on Y basis. uh will you can you 49:05 49 minutes, 5 seconds give some reason like what really explains this? Number two is on the ECL coverage. So I have been noticing that 49:12 49 minutes, 12 seconds your uh coverage across the buckets have been coming down on a sequential basis. 49:17 49 minutes, 17 seconds So should one expect that we have broadly touched the trough or there is some more scope for ECL coverage to come down and lastly if you can give some 49:26 49 minutes, 26 seconds color around uh we are already like almost uh 50 odd days into this quarter. 49:31 49 minutes, 31 seconds How is the broader demand trend you are seeing in any sort of any particular customer category or geographical segment where you are noticing some kind 49:40 49 minutes, 40 seconds of a stress or where you have tightened your underwriting filters. 49:44 49 minutes, 44 seconds So I'll take the third question and I'll let Krishna answer the question on other income and ECL coverage. So in the first 49:52 49 minutes, 52 seconds 45 days uh we have uh so there are so while uh there is no stress on the portfolio and there is no impact that we 50:00 50 minutes see in terms of demand although and this is two months back we did we made two changes uh on the MSME side there are 50:08 50 minutes, 8 seconds certain sectors or fire generally we went a little slow on so about 10% to 15% we reduced specifically on the uh 50:17 50 minutes, 17 seconds fringe customers or on the customers which were on the borderline And second we said that about five to six six% of our business was coming from fusion plus 50:26 50 minutes, 26 seconds two lenders when when we were acquiring new customers. So this we have stopped we are not doing in micro finance fusion 50:34 50 minutes, 34 seconds plus two lenders for the last two months now uh where we are acquiring new customers. So these are the two changes 50:41 50 minutes, 41 seconds that we have done on uh let's say ensuring that and this is not just the 50:47 50 minutes, 47 seconds west Asia crisis or the global uh issues every quarter uh we the intention is that how do we keep cutting the bottom 50:56 50 minutes, 56 seconds two deciles or the bottom one decile and this is also a part of that so uh we are on target for let's say 10,000 cr we 51:04 51 minutes, 4 seconds don't see any major headwinds austerity measures will continue to happen for the uh other two other income increase and 51:12 51 minutes, 12 seconds ECL coverage I'll let Krishna answer. So on the other income front the increase is mainly due to the increase in the 51:19 51 minutes, 19 seconds right of uh recovery and coming to the ECL the uh ECL coverage for the stage two and stage 51:27 51 minutes, 27 seconds three is uh uh for stage two it has increased for stage three it is uh broadly similar uh stage one yes it has 51:35 51 minutes, 35 seconds come down from 1.1 to 0 uh uh 9%. which is basically reflecting the uh better 51:42 51 minutes, 42 seconds flows over last two three quarters and this is purely coming from the uh that ECL model and uh we are confident on 51:52 51 minutes, 52 seconds that front. So this is uh this is the reason I mean when asset flows are uh are improving it can't be constant but I 52:01 52 minutes, 1 second think it should be it should remained around uh these levels now all 52:06 52 minutes, 6 seconds okay thank you so much sir best of luck thank you 52:14 52 minutes, 14 seconds our next question come from the line of cha from AS investment managers thank you sir thank you for giving me 52:22 52 minutes, 22 seconds opportunity and congrats on a good sort of numbers. Uh just few queries on the uh Bihar uh port Bihar portfolio we are 52:31 52 minutes, 31 seconds growing strongly but there has been announcement from the Bihar uh on the act which it is similar to Karnataka act 52:38 52 minutes, 38 seconds they have done so are we seeing any impact on our portfolio or in in terms of uh customer behavior on that or is it 52:47 52 minutes, 47 seconds just a start they have announced there is no official so that's we are we there is no impact as such how one should see this uh portfolio going ahead. 52:56 52 minutes, 56 seconds Any other question other than Yeah. Uh secondly on the uh as you said uh in terms of stage one and stage two 53:04 53 minutes, 4 seconds and stage three EC provisioning just one clarification uh are we uh increasing or any coverage 53:13 53 minutes, 13 seconds percentage due to the geopolitical provisioning which we have seen in one of the MFI MFI uh NBFC have done higher 53:21 53 minutes, 21 seconds provisioning due to the geopolitical any changes in terms of that on ECL? 53:26 53 minutes, 26 seconds Okay. So, uh your first question is on Bihar. So, we were actually the first ones to come out in the market. This is about one and a half months back where 53:35 53 minutes, 35 seconds we said that Bihar for regulated entities uh is actually welcome and uh it is a time that we need to inform the 53:43 53 minutes, 43 seconds customers uh and be able to decimate uh information. 53:48 53 minutes, 48 seconds uh Bihar continues to be perform extremely well and this is not just for us uh for everybody for our peers 53:55 53 minutes, 55 seconds elsewhere uh while I'm talking the collection efficiency of BR continues to be 99.83 54:02 54 minutes, 2 seconds this is March and April and May it is 99.85 85. So Bihar continues to be very strong in terms of collection 54:10 54 minutes, 10 seconds efficiency. I think we should equate Bihar to Tamil Nadu because a similar legislation came in Tamil Nadu uh the 54:18 54 minutes, 18 seconds way the micro finance industry handled it with the administration especially the MIN or the SRO I think that was 54:25 54 minutes, 25 seconds commendable and I think same effort has gone in Bihar. If you see Tamil Nadu again close to everybody's at a 54:33 54 minutes, 33 seconds collection efficiency of 99.5 our collection efficiency in Tamil Nadu in March was 99.82 54:40 54 minutes, 40 seconds uh up right now it is 99.85 so I think Bihar uh is similar to what TN is and I 54:48 54 minutes, 48 seconds think we welcome anything uh that uh encourages the regulated entities or tightens around let's say the 54:56 54 minutes, 56 seconds unregulated entities. So I think that is uh and uh there is nothing negative that we see in Bihar. On the stage provisioning I leave it to Krishna too. 55:07 55 minutes, 7 seconds Stage 1 2 3 stage one as we have discussed I mean uh uh two it has uh gone up from 66 to 71. 55:15 55 minutes, 15 seconds Stage three it is broadly similar and as I explained on the stage one this has come down but this is uh purely a reflection of the better collection 55:23 55 minutes, 23 seconds efficiencies we are clocking month quarter on quarter. So he's saying the provisions that uh he's saying one of the large lenders has 55:32 55 minutes, 32 seconds taken additional provisions. So are there any additional provisions that we have taken on the ACL model? 55:38 55 minutes, 38 seconds So on that front uh what we have done is uh although as I mentioned uh we had in the queue for the best collection 55:45 55 minutes, 45 seconds efficiencies and lowest flows there's no impact on the ground. However uh last quarter we have drawn about 15 cr for 55:53 55 minutes, 53 seconds release 15 cr from the management overlay. uh due to this uh to be conservative we have drawn lesser uh at 55:59 55 minutes, 59 seconds a 10 cr so 5 cr lesser we have drawn down so that's the measure we have taken uh I think overall you should see look 56:07 56 minutes, 7 seconds at it uh from a overall perspective I think our coverage anyway is what in the higher stages between 75 76% which the 56:15 56 minutes, 15 seconds market is at about 65% so we are anyway proficient 10% more than the market or the industry and we don't see a need to 56:23 56 minutes, 23 seconds do that uh neither in uh April and May figures nor in the quarter four figures. 56:31 56 minutes, 31 seconds So it is already we are already at a provision level of 10% more than the market. 56:36 56 minutes, 36 seconds Thank you. Thank you. That was very helpful sir. 56:44 56 minutes, 44 seconds Thank you ladies and gentlemen due to the time con that was the last question for today. 56:51 56 minutes, 51 seconds Also if you have a more question you can call uh company directly after this call. I know in the conference over to the management for the closing remarks. 56:59 56 minutes, 59 seconds Thank you and over to you team. 57:01 57 minutes, 1 second Yeah. So thank you so much uh for being patiently I think supporting us during the tough times uh my assurance and the 57:09 57 minutes, 9 seconds entire fusion team's insurance uh along with the senior management is that uh you will see performance on you're 57:19 57 minutes, 19 seconds seeing performance on fat coming in most of this performance is come because of uh credit cost reducing some of it is 57:27 57 minutes, 27 seconds happening because of the AVM growth because you're not seeing the average AVM so far. However, Q1 onwards, you 57:33 57 minutes, 33 seconds will see the AUM coming in which will lead to a higher uh income growth or 57:40 57 minutes, 40 seconds your POP and then Q2 onwards is where the real kicker or the acceleration will happen. So that we are fairly confident 57:48 57 minutes, 48 seconds and we are uh supremely committed to that uh as an overall objective and at the same time whatever crisis that we 57:55 57 minutes, 55 seconds see in terms of global headwinds we are fairly confident that the portfolio has the ability to manage those headwinds. 58:03 58 minutes, 3 seconds So thank you so much. Thanks for patiently backing us uh for the entire years. 58:10 58 minutes, 10 seconds Thank you so ladies and gentlemen on behalf of Fusion Finance Limited that concludes this conference. Thank you for joining us and you may not disconnect the links.