HDB Financial Services Limited — Q2 FY26

HDB Financial Services Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=xI9uE7ApMTI Published: 7 months ago

0:03 3 seconds Ladies and gentlemen, good day and welcome to the Q2 FY26 earnings conference call hosted by HTB Financial 0:10 10 seconds Services. As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation 0:19 19 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchstone phone. 0:29 29 seconds Please note that this conference is being recorded. 0:33 33 seconds Ladies and gentlemen, also note this conference call is only for analyst and not for media. I now hand the conference over to Mr. 0:42 42 seconds Vishal Patil from HTV Financial Services. Thank you and over to you Mr. Vishal. 0:49 49 seconds Thank you Sager. I welcome you all to the Q2 earnings call of STB Financial Services Limited. We have with us Mr. G 0:57 57 seconds Romesh MD and CEO along with Mr. Jakumar Sha CFO and the senior management team of the company. I believe all of you 1:06 1 minute, 6 seconds would have had a chance to peruse our financial results, investor presentation and press release which has been filed with the stock exchanges earlier today. 1:15 1 minute, 15 seconds We will start with the management remarks and then open up the call for Q&A. Audio recording of this call will be available on our website shortly 1:24 1 minute, 24 seconds after the call ends. I would now request Mr. Gi Romesh for his opening remarks followed by Mr. Jumar Sha would provide a brief on the financial results. We will open up thereafter for Q&A. 1:36 1 minute, 36 seconds Thank you Vishal and a very good evening to all of you who have joined us today. 1:41 1 minute, 41 seconds Greetings of the season. Uh briefly on the macros um India seems to be in a very unique situation in terms of 1:48 1 minute, 48 seconds domestic economic activity which showing resilience in spite of geopolitical uncertaintities as indicated by GDP estimates and high frequency indicators. 1:59 1 minute, 59 seconds The latest monetary policy review commentary on growth and inflation estimates bodess well for the economy. 2:06 2 minutes, 6 seconds The robust monsoon season is expected to perk up rural consumption, easing inflation and impetus provided by GST 2:14 2 minutes, 14 seconds rationalization bodess well for the broader econ economy and financiers as we step into the festive season. 2:23 2 minutes, 23 seconds The regulators comments as a part of the latest monetary policy commentary on the draft circular for forms of business is 2:31 2 minutes, 31 seconds meaningful and augers well for us while we wait for the final guidelines. Coming to the quarterly business updates as you 2:39 2 minutes, 39 seconds would all recollect we have our businesses which are bucketed into three distinct business lines. The first business is what we call enterprise 2:47 2 minutes, 47 seconds lending. uh this business has both secured and unsecured loans. So uh the the secured lending products which is 2:55 2 minutes, 55 seconds primarily consisting of loan against property and enterprise business loans grew moderately in Q2 on gold loans. 3:03 3 minutes, 3 seconds Recent changes in regulations in the gold loans business has helped us gain good traction in Q2 along with increase 3:11 3 minutes, 11 seconds in price of the metal and all well for this segment going forward. We have held a conservative position on unsecured 3:18 3 minutes, 18 seconds business loans. As asset quality pressures ease, we expect to return to a growth trajectory in the coming quarters. The second business that we 3:26 3 minutes, 26 seconds have is what we call asset financing. In asset financing, we have faced challenges in this commercial vehicle 3:33 3 minutes, 33 seconds financing segment on asset quality in Q1 and this continued through Q2 as well. 3:39 3 minutes, 39 seconds Monsoon actuate accentuated matters as high precipitation in specific geographies of the country that is north 3:46 3 minutes, 46 seconds and east impeded vehicle deployment with consequent impact on customer cash 3:52 3 minutes, 52 seconds flows. Based on our business insights, we believe that vehicle vehicle idling which is a phenomenon that we normally 4:00 4 minutes notice in Q2 because of monsoon uh this year was much higher than the year prior years. Um the second factor was that 4:09 4 minutes, 9 seconds there was deferment of demand for vehicles because of announcement of GST rate rationalization. Um however with 4:17 4 minutes, 17 seconds the extended monsoon season and a slow seasonally slow quarter behind us we anticipate a positive momentum in book 4:24 4 minutes, 24 seconds growth with the onset of the festive season and supported by key policy changes made by the government through GST rate cuts which have essentially 4:32 4 minutes, 32 seconds reduced the cost of ownership of commercial vehicle on consumer finance which is the third business that we uh business line that 4:40 4 minutes, 40 seconds we talk about um in this segment again growth was moderate in Q2 um due to demand deferment on expected GST 4:48 4 minutes, 48 seconds reductions which have actually now come through uh specifically in some product categories um like two wheelers and and consumer durables and auto. 4:58 4 minutes, 58 seconds This should help us pick up there should be a pick up in demand in auto two-wheelers and consumer durables on the back of one festive season, two 5:08 5 minutes, 8 seconds easing inflation, three better crop, karif crop sewing and so uh growing farm incomes and and that should be a positive for this segment going forward. 5:19 5 minutes, 19 seconds We have already started seeing good movement in retail in the first few days of October which should reflect in the months ahead. Thank you all for joining 5:28 5 minutes, 28 seconds in and wishing everyone a very happy Diwali and a wonderful festive season. I'll now hand over to our CFO Mr. 5:34 5 minutes, 34 seconds Jakumar Sha for an update on the financials. 5:38 5 minutes, 38 seconds Thank you Romesh. A very warm welcome to all. Moving on to the financial performance for the quarter. Customer 5:45 5 minutes, 45 seconds franchise grew to 21 million with an increase of 4.2% sequentially and 19.6% yearonear. 5:54 5 minutes, 54 seconds The gross loan book as at September 30, 2025 stood at 1 lakh 111,49 6:02 6 minutes, 2 seconds crores growing 1.9% sequentially and 13% Y on Y. Secured loans comprise 73% of the total loan book. 6:14 6 minutes, 14 seconds Disbburments for the quarter ended September 30, 2025 was 15,599 crores up by 2.8%. 8% sequentially. 6:25 6 minutes, 25 seconds Branch count stood at 1749 spread across 1157 cities and towns. Net 6:34 6 minutes, 34 seconds interest income for the quarter was 2,192 crores, an increase of 4.8% quarteron quarter and 19.6% yearonear. 6:47 6 minutes, 47 seconds NIMS net interest margin for Q2 FI26 improved to 7.9% 6:56 6 minutes, 56 seconds versus 7.7% in Q1 FI26 and 7.5% in Q2 FY25. 7:06 7 minutes, 6 seconds Cost to income ratio for our lending business declined to 40.7% in Q2 FI26 7:13 7 minutes, 13 seconds as compared to 42.7% in Q1 FI26 and 42.7 in Q2 FI25. The 7:22 7 minutes, 22 seconds ratio for the half year was 41.6% as compared to 43% 7:28 7 minutes, 28 seconds um compared last year IH H1 FI25 cost to assets reduced from 3.8% 8% to 3.7% Q1Q 7:39 7 minutes, 39 seconds pre-provisioning operating profit for the quarter was 1,52 crores as against 7:46 7 minutes, 46 seconds 1,388 crores for the prior quarter. Credit cost for the quarter was 748 crores as 7:54 7 minutes, 54 seconds against 670 crores for the prior quarter. Profit after tax for the quarter ended September 30, 2025 was 581 8:05 8 minutes, 5 seconds crores as against rupees 568 crores for the prior quarter. Gross stage three as 8:12 8 minutes, 12 seconds at September 30, 2025 stood at 2.81% as against 2.56% as at June 30, 2025. 8:22 8 minutes, 22 seconds Provision coverage ratio on stage three stood at 54.73 as at September 30, 2025. 8:32 8 minutes, 32 seconds ROA annualized for the quarter ended September 30, 2025 stood at 1.93% 8:39 8 minutes, 39 seconds which includes opening assets of approximately 9,000 crores of OFS money as at September 30, 2025. Adjusted for 8:47 8 minutes, 47 seconds this, the ROA would be 2.02%. 02%. 8:53 8 minutes, 53 seconds ROA annualized for the quarter uh sorry ROA annualized for H1 FY26 stood at 2.1%. 9:03 9 minutes, 3 seconds ROE annualized for quarter ended September 30 2025 stood at 12.23%. 9:11 9 minutes, 11 seconds Earnings per share for the quarter was 7 rupees and book value per share stood at 233 rupees10. 9:19 9 minutes, 19 seconds Our borrowing mix remains well diversified with a positive cumulative mismatch across all buckets up to 5 9:27 9 minutes, 27 seconds years. We remain well capitalized with total CR I capital adequacy of 21.82% as at September 30 2025. 9:40 9 minutes, 40 seconds So this was a summary from our end. Um Saga we can now open the floor for Q&A. 9:48 9 minutes, 48 seconds Thank you very much. We will now begin with the question and answer session. 9:54 9 minutes, 54 seconds Anyone who wishes to ask a question may press star and then one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and then two. 10:05 10 minutes, 5 seconds Participants are requested to use handsets while asking a question. 10:11 10 minutes, 11 seconds Ladies and gentlemen, also in order to ensure that the management is able to address questions from all the participants in the conference, please 10:18 10 minutes, 18 seconds limit your questions to two each per participant and you may rejoin the queue for follow-up questions. 10:24 10 minutes, 24 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 10:28 10 minutes, 28 seconds Again, to register for a question, please press star and one. 10:35 10 minutes, 35 seconds Our first question comes from the line of 10:46 10 minutes, 46 seconds Abijit Traal from Motila Losal. Please go ahead. 10:51 10 minutes, 51 seconds Yeah. Uh good evening uh sir. Thank you for taking my question. Uh so a couple of things uh in your opening commentary 10:58 10 minutes, 58 seconds you spoke about uh some stress that uh we saw in CV in one few and that continued in two as well. Uh you also 11:07 11 minutes, 7 seconds spoke about some vehicle idling which in was much higher than prior years. Uh likewise in the last quarter you had 11:14 11 minutes, 14 seconds shared uh something around uh MSN uh that we have seen if you could just touch upon that in addition to that and 11:23 11 minutes, 23 seconds are there any other new or reduced stress segments uh which have emerged during the is the second question was 11:32 11 minutes, 32 seconds now that we have practically uh seen uh through almost the festive season maybe another five days to go uh what is the 11:42 11 minutes, 42 seconds the view that you are emerging. I remember kind of ended your opening remarks by saying that uh in the first few days of October we are seeing a good 11:51 11 minutes, 51 seconds retail of it. So if you could just for the benefit of all of us uh kind of dwell on that that how has the festive 11:59 11 minutes, 59 seconds season been um both Navatri and and what's the running like and and lastly sir um given that you are among the 12:07 12 minutes, 7 seconds first NBFCs to report um in in on midseason if you could just kind of speak about some of the trends uh that 12:15 12 minutes, 15 seconds you would have seen in the last quarter um that would that would help all of us. Thank you sir. 12:23 12 minutes, 23 seconds Thank you Abij for your questions. I'll try and answer them. Jaikumar here. Um so in terms of the stress segments um 12:31 12 minutes, 31 seconds I'll just cover it as a whole I think so that it helps holistically. Um as you're aware enterprise lending is 12:37 12 minutes, 37 seconds approximately 38% of a book. Um asset finance approximately 39 and the 12:44 12 minutes, 44 seconds remaining is um you know consumer finance. Um we spoke about and you specifically referred to MSME um we had 12:53 12 minutes, 53 seconds quoted last time stating that we had seen stabiliz stabilization in our MSME book and that's continued um into Q2 as 13:03 13 minutes, 3 seconds well. So we haven't seen any significant um stress increase in MSME space u 13:10 13 minutes, 10 seconds within the enterprise lending segment that we had called out earlier. Um so that's one. Second on the CV space in 13:18 13 minutes, 18 seconds specific um we had stated at the end of Q1 that there were certain challenges and as Romesh alluded to um you know on 13:27 13 minutes, 27 seconds account of some of the monsoon challenges i.e. flash floods that you've seen in the north and east of the 13:35 13 minutes, 35 seconds country. There has been certain um areas which have actually been closed for more than a week, 10 days or even 15 days 13:44 13 minutes, 44 seconds which has resulted in vehicles not really plying the roads which has impacted our customer base and that's 13:54 13 minutes, 54 seconds been as a result of which that there has been stress which has come through as we've moved into towards latter part of 14:01 14 minutes, 1 second September. uh we believe that was an event that happened in August or July and August and we should be moving forward from here on. 14:12 14 minutes, 12 seconds In terms of the festive season view, um we are as you know all of us have read 14:19 14 minutes, 19 seconds in the newspapers and as all of us are looking around in the market, there is a lot of positivity that we see all around 14:27 14 minutes, 27 seconds us in the retail segment. And we're very hopeful that with that positivity, we should be able to ride that uh ride the 14:36 14 minutes, 36 seconds market and do well over the coming quarters. Got it. 14:44 14 minutes, 44 seconds And and and you just just just a follow up there sir Jakoma sir. Uh so you spoke about this positivity in the festive 14:53 14 minutes, 53 seconds season. Um we've seen that across uh both auto as well as uh consumer durables. 15:00 15 minutes So in the consumer segment we're surely seeing it. In the other segments there is some amount of positivity but I think we have to give it time. It's the first 15:08 15 minutes, 8 seconds you know week 10 days of October as we go through the month of October and beyond. We'll have to see that. 15:15 15 minutes, 15 seconds Got it. And so other than CB and MSM, can I can I request you to come back in so that others also get a chance and then I'm sure I can answer myself. 15:26 15 minutes, 26 seconds Thank you so much. 15:31 15 minutes, 31 seconds Thank you. Our next question comes from the line of Vir Sha from IFL Capital. 15:38 15 minutes, 38 seconds Please go ahead. Yeah. Hi. Uh thanks for the opportunity. 15:42 15 minutes, 42 seconds Uh so if you can uh just uh say uh double click on the asset quality piece. 15:47 15 minutes, 47 seconds So you mentioned that MSME has not seen any deteration on a sequential basis and even in asset finance it is only 15:55 15 minutes, 55 seconds commercial vehicle. So this entire stress of uh I would say the what we are seeing in net flipages is attributable 16:02 16 minutes, 2 seconds only to the commercial vehicle segment on a sequential basis. And uh secondly uh if you can also uh talk about the 16:11 16 minutes, 11 seconds provisioning. So if I see uh and look at the stage uh one and two numbers also I understand stage three there could be 16:17 16 minutes, 17 seconds some write off impact but why has PCR come down for uh the stage one and two that would be two questions for my thank 16:25 16 minutes, 25 seconds you okay so I'll cover the first one first 16:34 16 minutes, 34 seconds um which is on terms of uh slippages etc it is materially coming from the CV segment there has been a little bit of 16:43 16 minutes, 43 seconds construction equipment that gets affected naturally it's in a similar domain um but that's rather small u but largely it's come through the CV segment 16:52 16 minutes, 52 seconds so when you look at 2.56 to 2.8 rate. Um that's what's contributes to it in terms of slippages. 16:59 16 minutes, 59 seconds As far as the provisioning is concerned, um you would think about it. Last time also we had spoken ours is largely a 17:06 17 minutes, 6 seconds formula based um piece. We have a very diverse um you know portfolio ranging from lab through to consumers and the 17:14 17 minutes, 14 seconds book mix in terms of what sits in what book drives it a lot more. Plus the PDLgd of each book is very different. Um 17:22 17 minutes, 22 seconds if you look at our stage three provisions again um as the secured book has gone into it there is a slight bit 17:30 17 minutes, 30 seconds of difference but that's more because each product has a different PDLgd on stage two our provisions are largely similar and on stage one as some of the 17:39 17 minutes, 39 seconds book mix has moved there is a slight bit of reduction but on overall basis fundamentally there is no change in 17:46 17 minutes, 46 seconds approach that we have towards provisioning. 17:50 17 minutes, 50 seconds Got it. And just on your piece and commentary with regard to the CV segment uh you mentioned uh that that is the major contributor within that is it uh 17:59 17 minutes, 59 seconds say the new or the used piece uh and has it uh anything to do with say the correction in the CV prices especially on the used piece. 18:10 18 minutes, 10 seconds So um what happens in Q2 uh it's a seasonal thing. It happens both in construction equipment and in commercial 18:17 18 minutes, 17 seconds vehicles that there's some amount of idling that happens uh for example let's say a construction equipment is being 18:24 18 minutes, 24 seconds used in a mine right and the mine gets flooded because of rains so you know there'll be idling of the machine similarly if there's very heavy rains 18:33 18 minutes, 33 seconds and if a vehicle typically covers let's say 100 km or 150 km a day that might come down by about 20 30%. So uh 18:41 18 minutes, 41 seconds historically if you look at Q2 as a se as a season for commercial vehicles there's about 20% idling uh that you can 18:49 18 minutes, 49 seconds look at in this period as compared to Q3 or Q4. Um our you know some of our 18:56 18 minutes, 56 seconds insights suggest that this time in certain markets that went as high as 30 35%. Um so it's not really u vehicle 19:04 19 minutes, 4 seconds type but really where the vehicle was and how the vehicle got impacted by by by uh you know unseasonal rains or 19:11 19 minutes, 11 seconds inability to um commute because of weather conditions. Yep. 19:17 19 minutes, 17 seconds Got it. Thank you so much and all the very best. 19:21 19 minutes, 21 seconds Thank you. Our next question comes from Shukranu Mishra from Philip Capital. Please go ahead. 19:28 19 minutes, 28 seconds Uh hi thanks for the opportunity. So quickly on this climatic change impacting our book uh climatic change 19:35 19 minutes, 35 seconds today is a reality. So are we providing additionally for this and uh these are uh even the climate change can be 19:43 19 minutes, 43 seconds predicted to certain extent. So and this should be a seasonal thing. So anything more to eat into the asset quality and 19:51 19 minutes, 51 seconds what should be a sustainable uh credit cost that we should punch into our models. also if you can spell out the PDPD assumptions for the CDPs. Thanks. 20:03 20 minutes, 3 seconds Thank you. So, so branch I'll cover the second part first. Um, so in terms of PDGs how we look at we have depending on 20:10 20 minutes, 10 seconds the individual product between a 5 to 8 year bucket in terms of the data that is available. So we'd go through through 20:18 20 minutes, 18 seconds the cycle in terms of you know what is the probability of default and the loss given default for each asset type and that's what we factor in. Um in terms of 20:28 20 minutes, 28 seconds specifically on seasonality you're right it has it does affect in certain times and India is a country where seasonality 20:35 20 minutes, 35 seconds of course is there um that largely gets factored into PDLgd and also in the asset movement. So today if you look at 20:44 20 minutes, 44 seconds it where some of the book has moved to stage three from stage two between um September and December sorry between 20:52 20 minutes, 52 seconds June and September you're actually seeing provisions increase. 20:57 20 minutes, 57 seconds So it naturally factors it in in terms of the risk parameter um for us to look at it more closely and then work on corrections and recoveries. 21:09 21 minutes, 9 seconds uh what would be the blended PD LDDD if you can please uh call that out for the CV book. 21:15 21 minutes, 15 seconds uh we don't put it out because I think it's a complex model but what I would suggest is you speak to our IR team you speak to Vishal after the call and we'll 21:23 21 minutes, 23 seconds see how to you know best factor that in right can I just squeeze in one last question what would be sorry to interrupt uh so branches may 21:30 21 minutes, 30 seconds request to return to the queue for any follow-up questions please thank you 21:39 21 minutes, 39 seconds our next question comes from the line of Shwata from ARA please go ahead thank Thank you sir for the opportunity. 21:46 21 minutes, 46 seconds So I have two questions. Uh the first on credit cost. So barring the pandemic periods today the credit cost have 21:53 21 minutes, 53 seconds actually reached historical highs. So at 2.7% uh knocking off the seasonal challenges pertaining to the first half of the 22:02 22 minutes, 2 seconds year. What is the normalized credit cost going forward say for next two years? 22:07 22 minutes, 7 seconds That's the first question. Second uh again uh sorry to harp on asset financing on the CV side. Uh so while 22:14 22 minutes, 14 seconds you mentioned about certain distinct challenges of vehicle idling also certain markets or regional challenges 22:20 22 minutes, 20 seconds will these challenges be able to u uh will these challenges negate the positives coming from GST rate 22:28 22 minutes, 28 seconds rationalization and therefore do we expect CV uh vehicle financing growth to remain subdued even for the remainder 22:37 22 minutes, 37 seconds part of the year? Yeah, those are my two questions. 22:41 22 minutes, 41 seconds Okay. So in terms of credit cost, let me take on that one. Um, what we look at is I wouldn't say we don't provide a you 22:48 22 minutes, 48 seconds know immediate term forecast but in the 3 to 5 year period we look to operate within a two 2.2% plus minus in terms of 22:58 22 minutes, 58 seconds overall credit cost and that is where we believe the ideal range for our book is. 23:03 23 minutes, 3 seconds Today we are at 2.7% which is on the elevated side and we expect that to start coming down um from the coming quarters. 23:12 23 minutes, 12 seconds That's the first one. In terms of GST rate rationalization, I think we've got to watch that space closely. It is a 23:20 23 minutes, 20 seconds very recent phenomena where things have just about panned out in the last two weeks if I can put it that way. people 23:27 23 minutes, 27 seconds are still getting to terms in terms of you know how should some of the used segment play and some of the new segment play. Um we believe with the country 23:35 23 minutes, 35 seconds growing there is enough opportunity and as we go through this coming quarter I think it'll be worth watching that space and then commenting on it. 23:47 23 minutes, 47 seconds So uh one more point sha that you asked about um you know the credit cost um so if you look at pre- pandemic our product mix was very very different compared to 23:55 23 minutes, 55 seconds what it is today. Um for example a consumer book was just about 10% uh 6 7 years ago. Uh so really you can't uh 24:03 24 minutes, 3 seconds compare credit costs let's say 5 years ago with the credit cost today because our product mix has changed substantially. uh many of the products 24:11 24 minutes, 11 seconds that were very small in our book five years ago are large contributors to our balance sheet. So when we look at really cost it has to be a a sort of a blended 24:19 24 minutes, 19 seconds cost based on product mix and I said J has g sort of given you a a credit cost that we are comfortable with given our 24:27 24 minutes, 27 seconds current product mix right sir just a followup question there on commercial vehicles so what is our 24:36 24 minutes, 36 seconds ma'am may we request to return to the queue for any questions please thank you so much ma'am our next question comes from the line of 24:43 24 minutes, 43 seconds Ain Singh from MK Global Financial Services Limited Please go ahead. 24:49 24 minutes, 49 seconds Yeah. Hi, good evening. Uh two questions. The first one is that can you please help uh you know your mix of new 24:56 24 minutes, 56 seconds and old uh you know in your CV and the second question is uh you know with all 25:03 25 minutes, 3 seconds these uh kind of a uh you know the some bit of challenges that were there and you know some bit of a demand revival across businesses and as well as 25:11 25 minutes, 11 seconds consumption uh this 13% kind of a growth of course uh uh I would think lower than normal what kind of a growth you expect 25:20 25 minutes, 20 seconds I mean to pan out in H2 and probably in FI27. Thanks. 25:26 25 minutes, 26 seconds Thanks Ain. So um let me answer both your questions. The first one was new and used. So if you look at our slides, 25:35 25 minutes, 35 seconds u this is something which you know a lot of you had asked for. So if you look at our slides on slide 18, we've actually 25:41 25 minutes, 41 seconds put it out. So CV new is 16% and CV used is 9% of our book today. Yeah. Um in 25:49 25 minutes, 49 seconds terms of your other question was on growth outlook because I mean 13% so from a growth outlook point of view 25:58 25 minutes, 58 seconds the way I think one of your colleagues asked the question earlier um the way we would look at it is Q3 again as I 26:05 26 minutes, 5 seconds mentioned we see a lot of upbeat in terms of the entire uh 26:13 26 minutes, 13 seconds expectation from the market expectation from the customer and expectation on the Now that needs to translate. The first 26:21 26 minutes, 21 seconds week 10 days as Romesh mentioned have been positive on the consumer side. 26:26 26 minutes, 26 seconds We're very hopeful that that translates into a much better growth uh momentum for the entire retail industry and that 26:34 26 minutes, 34 seconds should augur well for our growth for the quarter and beyond. In terms of the medium-term, if I were to look at a 3 to 5 year trajectory in terms of how we 26:42 26 minutes, 42 seconds build our projections and we build our growth forecast, we look at a you know 18 to 20% kagger book growth over a 26:50 26 minutes, 50 seconds period of time and of course as GDP moves forward and grows well we would adjust and we have the absolute engine 26:58 26 minutes, 58 seconds and the capability to do a lot more. So again, GDP numbers came in positive um over Q1 and assuming that continues over 27:07 27 minutes, 7 seconds Q3 and Q4, you should see good momentum pick up for us as well. Okay, thank you. 27:16 27 minutes, 16 seconds Thank you. Our next question comes from the line of Shria Shivani from Nomura. Please go ahead. 27:23 27 minutes, 23 seconds Yeah, hi. Uh thank you for the opportunity. Uh I have a question on the uh uh on the lab book. Uh I can see your 27:30 27 minutes, 30 seconds ticket sizes are uh on the higher side in this book. Uh however, if you can help us understand do we have a uh under 27:38 27 minutes, 38 seconds uh 10 lakh ticket size over here? What is the stress trend uh in this uh portion if any? Uh now second question 27:46 27 minutes, 46 seconds is on the business loan and the gold loan. Uh broadly similar uh kind of a ticket size and assuming that the same 27:54 27 minutes, 54 seconds kind of customer uh would would come to you for either of the loans. uh can you help me understand was the trend very 28:01 28 minutes, 1 second divergent? Did you did you go slow on business loan and gold loans? We have an idea must have uh uh grown at a much faster pace. So those are my two questions. Thank you. 28:12 28 minutes, 12 seconds So thank you so much. Um so Sha on terms of lab book we might have a few loans 28:21 28 minutes, 21 seconds here and there in terms of less than 10 lakhs but most of them are you know in the average book that's been mentioned. 28:27 28 minutes, 27 seconds So it's uh you know 25 plus or 2.5 million plus right um that's one in 28:34 28 minutes, 34 seconds terms of business loans as uh Romesh mentioned we have been slightly conservative in that space it's an area 28:42 28 minutes, 42 seconds we've specifically called out over the last I would say almost three quarters uh where we've had stress and we watched 28:49 28 minutes, 49 seconds that space closely as we've now achieved some level of base where we believe you 28:55 28 minutes, 55 seconds know credit cost is moderated and expect it to come down. Uh we would hope and 29:02 29 minutes, 2 seconds work on uh growth in that business in the coming quarters. 29:07 29 minutes, 7 seconds Last one being on the gold side that is an area as was specifically mentioned at the beginning. We see it as a good 29:14 29 minutes, 14 seconds opportunity with all the rules harmonizing. Our book has almost grown by 10% Q on Q and 40% yearonear um in the gold space. 29:27 29 minutes, 27 seconds All right. And it's um uh just on the lab portion any uh trend any stress trends for your portfolio? I understand you don't have under 10 lakh but uh any 29:36 29 minutes, 36 seconds any thing that you would like to highlight over there? 29:39 29 minutes, 39 seconds Nothing. So just uh you know just as a you know at a at a level uh the way a lap is under return is that this is a 29:48 29 minutes, 48 seconds customer who's got a property that he or she owns and uh that's a collateral for a business loan that the customer takes 29:56 29 minutes, 56 seconds which means that the business has to have sound financials to generate enough cash for a monthly EMI. Now, if you're 30:04 30 minutes, 4 seconds looking at a loan of let's say 5 million, you're looking at a EMI of upwards of 50,000 rupees a month. And what you expect the customer to generate 30:11 30 minutes, 11 seconds adequate cash flows to be able to service that kind of EMI. Um, so I think the advantage of a collateral is that 30:19 30 minutes, 19 seconds the company's able to give a slightly longer term loan. So, which reduces the monthly outflow, right? But also because you're writing a longer tenure, uh you 30:27 30 minutes, 27 seconds have to make sure that the business that the customer has is is of a quality that can sustain for the next few years uh 30:35 30 minutes, 35 seconds while the loan is in is in um uh is is you know being serviced. Uh a 30:43 30 minutes, 43 seconds unsecured business loan by contrast is for smaller amounts and if you can see our average ticket size is about 300,000 rupees but they also return for under return 30:51 30 minutes, 51 seconds for shorter tenurs. uh so which means that the EMI is in the region of 10 to 15,000 rupees. You you are evaluating the customer for ability to service a uh a smaller amount for a shorter tenure. 31:03 31 minutes, 3 seconds Okay, loans by contrast are typically shorter tenure contracts uh because this is a product where customers uh would 31:11 31 minutes, 11 seconds like to prepay as soon as possible, right? Because it's it's it's really a temporary business requirement that they 31:18 31 minutes, 18 seconds are looking at to fulfill. Um so yeah I think your question is probably around microlap as a segment we typically don't 31:25 31 minutes, 25 seconds have exposure to that segment right we we are underwriting customers and you know with with larger value properties and larger ticket sizes. 31:33 31 minutes, 33 seconds No no uh completely understood. Uh this is very clear. Uh thank you so much. Thank you. Thank you. 31:43 31 minutes, 43 seconds A reminder to all the participants, if you wish to register for a question, you may press star and one now. 31:50 31 minutes, 50 seconds Our next question comes from the line of Rajiv Ma from Yes Securities. Please go ahead. 31:57 31 minutes, 57 seconds Yeah. Hi, good evening. Uh my first question is on asset quality. So when I look at your loan stages and the movement through the quarter, so stage 32:06 32 minutes, 6 seconds three increasing uh is a very is pretty much in line with the seasonal pattern. 32:10 32 minutes, 10 seconds So you know when we look at uh the overall stage B including the write up amount but when you when we look at stage two stage two is stable and 32:18 32 minutes, 18 seconds broadly calculating by calculating the flows coming from stage one uh the flow rate seems to be improving while I mean Q improves but even while and why the 32:27 32 minutes, 27 seconds flow rate seems to be stable. uh are there any early indications that uh from stage one the collection efficiency is 32:35 32 minutes, 35 seconds now getting better or the flow rates from stage one going into stage two is it getting better uh in the more recent months. 32:45 32 minutes, 45 seconds Okay. So Rajie when um let me answer a little give you a little longer answer and try and address your question. Um if 32:53 32 minutes, 53 seconds you look at stage three right as we called out earlier there has been certain floodlike situations. Assam was closed for 5 days for certain reasons. 33:03 33 minutes, 3 seconds You know the northern belt had certain challenges. So some of the expectations that we had in terms of bringing the 33:10 33 minutes, 10 seconds book back in um towards the second half of September actually faced challenges. 33:16 33 minutes, 16 seconds We're working on obviously improving that and getting the book back in in terms of a number of actions that we had taken through July and August that did 33:24 33 minutes, 24 seconds help us in curbing some of the flow forwards from August to September recoveries is something which we have to 33:33 33 minutes, 33 seconds improve uh you know coming into October November that should really help us bring the stage three back in and these 33:41 33 minutes, 41 seconds were very specific things on the ground um which happened due to which circumstances 33:48 33 minutes, 48 seconds uh you know didn't help in reaching out to customers for a reason or the other. 33:53 33 minutes, 53 seconds Obviously there are reasons and you know we are very hopeful that we could bring that back in in the coming months but 34:01 34 minutes, 1 second your observation around stage two assets being stable or improving is correct and and you know there is obviously a higher 34:09 34 minutes, 9 seconds focus on on collection efficiencies which we have started seeing across most products. We expect commercial vehicles to also improve as the economy uh and 34:18 34 minutes, 18 seconds and you know next few months that we are looking at. 34:22 34 minutes, 22 seconds Okay. Okay. And sir internally what will make us push growth? I mean I know macro GST some demand will improve but 34:30 34 minutes, 30 seconds internally what are the indicators uh and what thresholds uh will make us push growth on the ground. Uh and a related 34:38 34 minutes, 38 seconds question is on competition. Do you see the competitive space getting slightly more cleared now? Some irrationality in competition, you know, going out in certain products. 34:50 34 minutes, 50 seconds So from a growth point of view, Rajiv, I think that's something we're um equally focused on. Um let's see how you know 34:58 34 minutes, 58 seconds the Diwali festive moves forward for across all segments of ours. be it business loans, be it you know the lap side as Romesh mentioned it's businesses 35:06 35 minutes, 6 seconds that we're funding and as confidence starts to come back we should see a better offtake there right similarly on 35:13 35 minutes, 13 seconds the CV side um you know as you've seen we're doing more of used as prices also move around that is still a portfolio 35:22 35 minutes, 22 seconds which we believe you know there should be good growth coming in similarly on the consumer side um as we mentioned the first 10 days have seen some good 35:31 35 minutes, 31 seconds traction on the field. Um, and we're very hopeful as we move from now through to 23rd, 24th of October and to the end 35:38 35 minutes, 38 seconds of the month that traction actually pushes us into a zone where, you know, not just October, but the entire quarter looks a lot more positive. So, we're 35:47 35 minutes, 47 seconds very well geared up within the company and within the teams to push for a reasonable amount of growth. 35:55 35 minutes, 55 seconds Got it. Now, best of luck. Thank you. Thank you. 36:01 36 minutes, 1 second Our next question comes from the line of Renish from ICICICI. Please go ahead. Uh yeah. Hi. Uh sir, just two question. 36:08 36 minutes, 8 seconds Uh sorry circling back to the uh growth uh you know outlook. Uh so given you know we have a very large bucket of 36:15 36 minutes, 15 seconds products. So uh incrementally you know which product uh do you feel should drive the growth and which are the 36:22 36 minutes, 22 seconds products where you know you will still go little cautious uh in near term. 36:30 36 minutes, 30 seconds So the way I would look at it Renish is growth across all if I can put it that way genuinely right. Segment that we 36:38 36 minutes, 38 seconds have been you know slightly cautious of and which is just about stabilizing is the business loan segment that we have. 36:45 36 minutes, 45 seconds We believe in the coming quarters that should also start to see growth. um you know some of the consumer side clearly 36:52 36 minutes, 52 seconds if you look at auto loans right it has kicked up in terms of really well over the last 2 to 3 weeks two wheelers have 37:00 37 minutes also started picking up and so have consumer durables so over the course of Q3 and Q4 we believe there should be um 37:09 37 minutes, 9 seconds given the economy as well as the customer sentiment there should be enough amount of uh you know power 37:17 37 minutes, 17 seconds behind each one of these products for us to grow. It is obviously going to depend on the overall economic and the geopolitics that plays out. But let's 37:26 37 minutes, 26 seconds assume if everything stays equal, we should be able to move ahead on most fronts. 37:32 37 minutes, 32 seconds Okay. So should we assume uh CV might take a couple of more quarters before we start pushing growth or uh do you see 37:41 37 minutes, 41 seconds that product segment as well contributing to growth incrementally? So CV is a reasonable size book for us. 37:49 37 minutes, 49 seconds There are some segments within that that we will push more on in terms of where we see you know long-term focus and 37:56 37 minutes, 56 seconds there are certain segments like HTV for example where we may not push very hard in the short term. 38:03 38 minutes, 3 seconds Got it. Got it. And just a last question on the asset quality. 38:07 38 minutes, 7 seconds Sorry to interrupt Renir. May we request you return to the queue for any follow-up questions please. Okay. Okay. 38:14 38 minutes, 14 seconds Thank you sir. Our next question comes from the line of Shrial Doshi from Aquarius. Please go ahead. 38:21 38 minutes, 21 seconds Hi sir, thank you for giving me the opportunity. My question was particularly on the enterprise lending and within that uh especially on lab 38:28 38 minutes, 28 seconds business loan and enterprise loans. So how have we seen the bounce rates uh let's say for September versus what it 38:35 38 minutes, 35 seconds was probably in Feb March period. Uh have we seen uh signs of improvement uh there or or is it still at the or or has 38:43 38 minutes, 43 seconds it gone down? So just some color on that not that front. 38:47 38 minutes, 47 seconds So ship the way I would like you to look at it is um our lab book has been fairly stable right something which has very 38:55 38 minutes, 55 seconds low on credit cost and it has operated in a similar zone over the last 6 to9 months or maybe almost a year. So that 39:04 39 minutes, 4 seconds is how I would look want you to look at it rather than an increasing decreasing trend. It's a stable portfolio, something we're very focused on, 39:11 39 minutes, 11 seconds something we wish to grow and has you know reasonably good asset quality 39:18 39 minutes, 18 seconds and then so that is for lab for business loans and enterprise loans. So for business loans as I covered it earlier 39:25 39 minutes, 25 seconds there has been an stabilization in Q1 there has been you know further slight amount of improvement in Q2 and that is 39:34 39 minutes, 34 seconds something we're very hopeful of as you know the book matures we will see you know good amount of improvement in the coming months and we should see growth also coming back. 39:44 39 minutes, 44 seconds Got it. Got it. The second question was pertinent to rejection rates. So I understand that you know every all lenders had tightened their underwriting 39:53 39 minutes, 53 seconds norms probably around one Q period. So are we continuing with the similar uh 40:01 40 minutes, 1 second strategy or or have we moderated it given that some of the segments are showing signs of stabilization on on 40:08 40 minutes, 8 seconds bounce rate as well as improvement. So are we moderating our underwriting norms and are we seeing rejection rates you 40:16 40 minutes, 16 seconds know coming off. So some color on that front if you could and this is particularly for enterprise lending. 40:24 40 minutes, 24 seconds Yeah. So uh know when you look at approval rates it's really a function of um you know product uh the the asset 40:31 40 minutes, 31 seconds risk. So the you know in case of a mortgage you look at the asset. So you would have a measure of asset risk. uh there's an element of customer risk in 40:39 40 minutes, 39 seconds terms of the customer's own income and cash flows and previous uh financial behavior um and and then you're looking 40:48 40 minutes, 48 seconds at a forecast to that business. So when you when you really do an underwriting u you're looking at um you know asset risk, you're looking at customer risk, 40:56 40 minutes, 56 seconds you're looking at geography risk, uh you're looking at business risk, uh you know for example which industry is the customer in so there would be a flavor 41:04 41 minutes, 4 seconds of that in terms of the underwriting. So there could be businesses that naturally lend themselves to better cash flows as compared in certain 41:13 41 minutes, 13 seconds markets right I mean if you look at India there are pockets for example there would be a textile hub there would be a manufacturing hub there could be a retail hub and what you're really trying 41:21 41 minutes, 21 seconds to do is to marry these into your credit policy uh and and underwrite the customer. So, so in in enterprise lending, you really do bespoke 41:29 41 minutes, 29 seconds underwriting. Uh, it's not really a scorecard. Um, you know, scorecard might be initial filter. Uh, but you end up doing a bespoke underwriting because the 41:37 41 minutes, 37 seconds ticket sizes are large. Uh, which means that a credit officer does a detailed evaluation. Um so we would fine-tune 41:45 41 minutes, 45 seconds these credit policies really to a micro market or to a customer segment or to a particular u you know u category of 41:53 41 minutes, 53 seconds customers based on our own internal experience of how things are progressing how we things moving um for example what 42:00 42 minutes could be the impact of tariffs on certain industries so we might decide to tighten the regulations tighten the policy or or moderate the policy u 42:10 42 minutes, 10 seconds broadly I think you know our approval rates are have not been very different in our enterprise lending over the last one year. Uh about a year ago we did 42:18 42 minutes, 18 seconds make some changes to our uh underwriting policy on um unsecured lending because we found that we had certain sets of 42:26 42 minutes, 26 seconds customers who had higher propensity to borrow from others uh because there just a bunch of lenders who landed up and and and were essentially doing uh credit 42:35 42 minutes, 35 seconds score based underwriting and and that was something that we were not comfortable with. uh for us you know leverage is important you know total 42:42 42 minutes, 42 seconds exposure of the customer is important and and that's the way we really look at underwriting. Yep. 42:49 42 minutes, 49 seconds Got it. And thanks for that detailed answer sir. But just to sort of conclude, have you seen 70 80% of our uh 42:55 42 minutes, 55 seconds underwriting uh for let's say be geography customer profile centric uh have we seen some moderation or are we 43:03 43 minutes, 3 seconds looking at moderating it in terms of the underwriting norms or or we are sort of you know still broadly keeping it intact. 43:11 43 minutes, 11 seconds So shipal the way we look at it is the chief credit officer today along you know with the data that he has he will look at each segment each geography you 43:20 43 minutes, 20 seconds know in a very detailed manner and would you know go through that and take decisions it's not a you know one size cut formula that you'd go in and say 43:29 43 minutes, 29 seconds let's you know slice it or dice it in a simple uh you know piece of paper. Yeah. 43:34 43 minutes, 34 seconds Got it. Got it. Thank you. Thank you for the answer. Thank you. 43:39 43 minutes, 39 seconds Thank you. Our next follow-up question comes from Vijit Draal from Motila Losal. Please go ahead. 43:46 43 minutes, 46 seconds Yeah, thank you for allowing me to come follow up. Uh so this just two followup questions that I had. First being uh how 43:54 43 minutes, 54 seconds should we think about margins now? Uh this is the last call you had shared that 95% of our bank boardings are EPL. 44:03 44 minutes, 3 seconds um will obviously repric in line with your external or market benchmarks assuming they have already repriced 44:11 44 minutes, 11 seconds right um how should we look at uh the cost of growing trajectory in the margin trajectory obviously I mean assuming 44:18 44 minutes, 18 seconds status quo while there are room for a few more rate cuts uh in the December and the February policy the assuming 44:26 44 minutes, 26 seconds status quo uh how should uh your cost of borrowings and margins trend and lastly On the CV side, we've discussed a lot in 44:34 44 minutes, 34 seconds this call already, but I just wanted to pick your brains on on one thing. When I look at CVS, there are predominantly two 44:42 44 minutes, 42 seconds things which are driving CVS, right? So, so your your consumption and and the other thing is your construction and 44:49 44 minutes, 49 seconds infrastructure activities. So while consumption might pick up uh given all the actions that the government has taken, what is it that you're seeing on 44:58 44 minutes, 58 seconds the the construction and the infrastructure activities that that's all from? 45:04 45 minutes, 4 seconds Thank you. So I'll take both your questions on the margins and cost of borrowing. The way we would like everybody to look at Ajit is today I 45:14 45 minutes, 14 seconds think we've taken a lot of actions um over the last few months and that's exactly what we spoke about with the 45:21 45 minutes, 21 seconds confidence in the Q1 call and that's allowed us to bring margins up and reduce our cost of capital where NIM 45:28 45 minutes, 28 seconds stands at 7.9. Um for somebody like us the way we look at it the sweet spot is between a 7.9 to 8 and while pressures 45:37 45 minutes, 37 seconds may come on every side we will work towards trying to maintain in that region that's how I would want to look 45:45 45 minutes, 45 seconds at it that's on the margins and obviously cost of borrowing yields both factor in that 45:51 45 minutes, 51 seconds right um on the CD side in specific as you rightly said the consumption side is improving on the um construction and 46:01 46 minutes, 1 second infrasites. Um we're very hopeful that the initiatives that the government is taking helps bring some of those you 46:09 46 minutes, 9 seconds know activities back in as we saw in previous years and as that comes through we should be able to see that segment also growing from here on. 46:22 46 minutes, 22 seconds This is very useful. Thank you for taking my questions and I wish you a good Thank you. 46:30 46 minutes, 30 seconds Thank you. Our next follow-up question comes from the line of Shogranchu Mishra from Philip Capital. Please go ahead. 46:37 46 minutes, 37 seconds Uh, hi. Thanks for allowing me the followup. Uh, given the fact that our asset mix has changed considerably over the last 3 years, how do we look at the assets mix in the next 3 to 5 years? 46:49 46 minutes, 49 seconds That's the first. Second one is um how do we also forecast the credit cost of each specific asset class when it's uh growing? Thanks. 47:01 47 minutes, 1 second Okay. So on the asset mix um so Raju the way we look at it is the consumer business should grow faster 47:09 47 minutes, 9 seconds while the other two verticals will also continue to grow. So what you see as 23% today should inch up a few percent over 47:18 47 minutes, 18 seconds the next couple of years. Right. And the reason I say couple of percent because the other businesses obviously 47:24 47 minutes, 24 seconds would grow fast as well. Um pace would differ in each one of them. So there is no set target that we have today. The 47:34 47 minutes, 34 seconds most important focus for us as a company is to grow our entire diversified portfolio that we have. Keep focused on 47:41 47 minutes, 41 seconds every product that we believe is a long-term focus for us and continue to grow in each of our products in each of our markets. So that's a very important one u that we should do and we will do. 47:55 47 minutes, 55 seconds Second piece around credit cost um at this point in time the way we look at it is because it's a very diversified 48:02 48 minutes, 2 seconds portfolio um and we spoke about some of the products where for example LAP comes at a very minimal credit cost. There are 48:10 48 minutes, 10 seconds other products which come at a slightly higher credit cost like consumer durables etc. The way we look at it is we need to balance it out as a portfolio 48:19 48 minutes, 19 seconds as a whole for the company and really focus on how are we going to manage a balanced return that we wish to give uh 48:27 48 minutes, 27 seconds and work from there. So that's been our key focus and that's how we would even want the investor community to look at us that the diversified portfolio helps 48:36 48 minutes, 36 seconds us grow in a balanced fashion across cycles and also balance out the credit cost. While it's been a little high in 48:45 48 minutes, 45 seconds the last quarter or two, we're very hopeful of bringing it to a moderate level in the coming quarters. 48:53 48 minutes, 53 seconds Well, thanks. Any new products we are planning to launch in the next uh three to four uh quarters to make our books motor 49:02 49 minutes, 2 seconds I've been told as a listed company as soon as I think of something and we get it approved I have to publish it on the exchange. So you'll see it as soon as we doing something. 49:11 49 minutes, 11 seconds Hey, thank you so much. Thank you. Thank you. 49:17 49 minutes, 17 seconds Our next question comes from the line of Priti Raj Patil from Investec. Please go ahead. 49:24 49 minutes, 24 seconds Yeah, thanks for the opportunity. Just one clarification that I wanted uh in the product mix you've mentioned something on the lines of relationship 49:31 49 minutes, 31 seconds PL. So I just wanted clarification on what product that is. And the second is on adoption of technology. So if you 49:39 49 minutes, 39 seconds look at some of the other peers in the sector, they've adopted technology for underwriting or for sourcing. So I just wanted to know what HDB is doing on that front. 49:48 49 minutes, 48 seconds Sure. So relationship PL for us is an absolute you know product that we've made only for our customers. Uh it is 49:57 49 minutes, 57 seconds what you know most people would call as cross-ell. So this is a product that is available exclusively to HDB customers. 50:05 50 minutes, 5 seconds It comes as a cross-ell to the product base that we would have in the consumer book as well as some of the other books that we have. So that customer if 50:13 50 minutes, 13 seconds performing over the first you know 6 9 12 months depending on the customer profile depending on the product they've come to us first with um we give them an 50:22 50 minutes, 22 seconds opportunity to take the second loan and we work from there. It's a book we've been able to grow over the last four to five years really well with our customer 50:30 50 minutes, 30 seconds base and we're very happy with how we're functioning there and we'll continue to grow well in that space. 50:36 50 minutes, 36 seconds That's one. On the technology front there's a slide that we've put up on HDB on the grow HDB on the go and pris I'm 50:44 50 minutes, 44 seconds sure you know all of us today live in the financial services world which is a almost a technology company more than 50:51 50 minutes, 51 seconds anything else. technology is so akin to our you know blood system that if we don't have good technology I don't think 50:58 50 minutes, 58 seconds we'd be able to progress very well. So in terms of slide number 51:06 51 minutes, 6 seconds I think it is 38 and 39 we talk about it you can have a look and I think you can give um you know our IR team a call and 51:14 51 minutes, 14 seconds we can take you through in detail but fundamentally I think we've made sure whether it is you know a loan within 2 minutes whether it is making sure a 51:22 51 minutes, 22 seconds customer is able to finish their journey online we're trying to make sure that every single one of those basics that a 51:29 51 minutes, 29 seconds customer expects from a company like us we have that in our works and we're able to execute it for the customer. The most 51:36 51 minutes, 36 seconds important thing is that you know we are the right choice for our customer and we're able to progress from here in a 51:43 51 minutes, 43 seconds manner that the customer chooses us because of you know the technology and the service and the right fit for him or herself. 51:53 51 minutes, 53 seconds Sure. Yeah. Thank you. Thank you. 51:59 51 minutes, 59 seconds Thank you. Our next question comes from the line of Goautam Jane from GCJ Financial. Please go ahead. 52:08 52 minutes, 8 seconds Uh good evening sir. Uh first uh uh in last quarter you said your name will expand and that perfectly expanded in 52:15 52 minutes, 15 seconds Q2. uh now uh can we say that you know uh the the higher credit cost which uh 52:22 52 minutes, 22 seconds started from Q3 of last year has peaked and we will come back to the normal credit cost itself from Q3 number one 52:30 52 minutes, 30 seconds and second on the growth side again I mean growth will pick up from Q3 can we assume that number one and second 52:38 52 minutes, 38 seconds is uh your cost to income ratio has come to 40%. Historically we had even lower than that. So what what is our idle cost 52:46 52 minutes, 46 seconds to income ratio uh we want to achieve and uh the third question would be uh would you blame higher competition 52:54 52 minutes, 54 seconds you know in the market and because of that the credit growth uh has been lower than some of the peers. Thank you. 53:02 53 minutes, 2 seconds Um thanks a lot Goautam. So in terms of growth as I covered it earlier very hopeful that you know um we are able to 53:10 53 minutes, 10 seconds grow well in the coming quarters and there is a lot of underlying you know market uh um how do I say sentiment 53:20 53 minutes, 20 seconds which does show that Q3 should be a lot better than Q2 and Q1. And um if you 53:27 53 minutes, 27 seconds look at the commentary also that has come from other you know be it banks or finance years all of us are very positive on how we see Q3 53:36 53 minutes, 36 seconds going forward. So Q3 and Q Q4 should go to good amount of growth. That's the way we look at it in terms of cost income 53:43 53 minutes, 43 seconds ratio. Um if you look at on a H1 basis we're 41.6%. 53:48 53 minutes, 48 seconds And we were 42.7% earlier. as we grow and as we push on a number of initiatives we believe between a 41.5 to 53:57 53 minutes, 57 seconds a 42 that's something fairly ideal for us you know as we continue on a growth journey um the more important metric 54:05 54 minutes, 5 seconds there is in terms of cost to asset it's in one of our slides I can give the slide number in a minute 54:18 54 minutes, 18 seconds which slide I'll give you a slide number in a second Um, so that's something we're very focused on. It's 3.7 today. 54:25 54 minutes, 25 seconds It was 3.8 earlier. And our whole focus, it's on slide number 26. 54:32 54 minutes, 32 seconds Um, where we clearly reflected 3.7 and that's something uh if we are able to manage between a 3.6 and a 3.7 as we 54:40 54 minutes, 40 seconds continue to invest and grow, I think it should augur well in terms of us reaching our ROA targets. 54:46 54 minutes, 46 seconds As on credit cost on credit cost as I mentioned the medium to long-term we should be able to operate within a 2.2%. 54:55 54 minutes, 55 seconds And it it will start reflecting from Q3 onwards. Right? 54:59 54 minutes, 59 seconds Welcome. I'm sure it will start to improve. If it starts reflecting from Q3 onwards, I'm sure I'll be as happy as you are. 55:06 55 minutes, 6 seconds Uh I have one more question. Can I ask? Sure. Go ahead. 55:11 55 minutes, 11 seconds Uh this time your BPO profit also went up sharply. QMQ and Yi. So can you comment on that business? 55:19 55 minutes, 19 seconds Yeah. So we had earlier mentioned the way to look at BO and sometimes there is obviously you know billing which will be plus minus a month or you know approvals 55:28 55 minutes, 28 seconds which get deferred. If you look at a PAT of 15 crores per quarter it more or less flatlines towards that. A pat of 60 55:35 55 minutes, 35 seconds crores peranom is where it you know largely moves around plus minus a few. 55:39 55 minutes, 39 seconds So there's been a little bit of you know um billing which would have moved from one quarter to another but nothing more than that. Okay. Thank you so much. 55:48 55 minutes, 48 seconds So margins are fairly stable there. 55:49 55 minutes, 49 seconds There's nothing which changes fundamentally. 55:52 55 minutes, 52 seconds Okay you thank you. Our next question comes from the line of Rajiv Ma from Yes Securities. Please go ahead. 56:02 56 minutes, 2 seconds Okay. Hi thank you and thank you for taking my followup. this relationship PL which is 8% of your portfolio uh and you 56:09 56 minutes, 9 seconds said that it's uh offered to existing customer so what is the existing product overlap can you name the product with which it overlaps with and what is this 56:18 56 minutes, 18 seconds portfolio growth has been on Q and Y basis relationship PL so um so relationship PL is a product uh 56:27 56 minutes, 27 seconds that is offered to only existing customers of the company um so it's a business where we offer loans to our 56:34 56 minutes, 34 seconds existing indiv individual borrowers um and and the customer could have originated to us through any of the other businesses including consumer. If 56:42 56 minutes, 42 seconds you look at our company, we have today 21 million customers but a large proportion of them would be through our consumer finance business, 56:50 56 minutes, 50 seconds right? And so as the customer matures with us and the loan tenure is towards closure uh we look at multiple 56:58 56 minutes, 58 seconds ways of engaging with the customer u either through follow-up products or um you know um the advantage of a 57:07 57 minutes, 7 seconds relationship peel is because it's unsecured loan it can be used for multiple use cases by the customer right so the customer will have a pre-approved 57:15 57 minutes, 15 seconds limit either for purchasing a consumer durable if you take a consumer finance case he could have a pre-approved limit for buying a consumer durable. You could have a pre-approved limit for buying a 57:23 57 minutes, 23 seconds two-heer or you could have a pre-approved limit for a um unsecured personal loan. Right? Right. So these will be different limits based on u you 57:32 57 minutes, 32 seconds know u what what product the customer is looking to buy because you know the tenurs are different the the um you know 57:40 57 minutes, 40 seconds the transaction sizes are different and we engage with the customers on a continuous basis either through our 57:46 57 minutes, 46 seconds inapp notifications or through our outreach programs to the customers u and and that's how we engage and build this 57:53 57 minutes, 53 seconds book. Um any any color in terms of growth that you want to give? So it's a um focused business for us Ajivie and um 58:02 58 minutes, 2 seconds something we will continue to grow over a period of time. If you look at the same product four years ago um I think we would have almost grown a kagger of you know 40% plus over a period of time. 58:13 58 minutes, 13 seconds So we're very focused on the consumer segment as a whole as I mentioned and that's something which we will continue to grow. 58:22 58 minutes, 22 seconds And would it also have CVC customers as well here in the in the in the in the customer base of uh this uh this RPL product? 58:31 58 minutes, 31 seconds Yes, there would be customers there would be but if you'd like to think about it in terms of the customer base right um it would obviously be a 58:38 58 minutes, 38 seconds slightly smaller customer base. So if you have a million customers in consumer durables, you might have you know 10 58:45 58 minutes, 45 seconds 20,000 customers in CVCE. So the number of people to whom you would cross-ell um obviously would be there as a percentage 58:53 58 minutes, 53 seconds of that customer base but absolute number of people would be lesser. 58:58 58 minutes, 58 seconds Okay. Okay. Now second thing is on the cost levers and cost dynamics. Uh now that we are in a very moderate growth environment and we are also you know 59:08 59 minutes, 8 seconds constantly checking on growth. uh right uh what are the cost levers or dynamics available to us to manage the the the 59:16 59 minutes, 16 seconds pre-provision operating profitability are there anything more that we can do on the cost efficiency side or productivity side which will help us uh 59:24 59 minutes, 24 seconds you know control uh the people so at this point in time Rajie the way I would look at it is on the cost front we 59:31 59 minutes, 31 seconds believe we're fine I think um this quarter as there was slightly lower growth we've made sure we managed to 59:39 59 minutes, 39 seconds moderate some of the cost as well and we would continue to do that. So I don't see that as the you know biggest worry. 59:48 59 minutes, 48 seconds Our key focus is to our business is let's invest let's focus on the long-term in terms of you know how we build on this as a growth area. Right? 59:58 59 minutes, 58 seconds Um the most important focus if you think about from a long-term point of view is how well do you invest so that you achieve your medium-term growth targets and also achieve your ROAS as a whole. 1:00:10 1 hour, 10 seconds Yeah. And that's how we look at it. Sure. Sure. Thank you. Thank you so much. 1:00:17 1 hour, 17 seconds Thank you. Ladies and gentlemen, we are at the end of the time. I now hand the conference over to Mr. J. Kumar Sha for closing comments. 1:00:26 1 hour, 26 seconds Thank you very much a um so from everyone here at HDB wishing you all a very very happy Diwali a prosperous new 1:00:35 1 hour, 35 seconds year and a year full of good health and happiness all the very best and may your families do well as well. Thank you so much. 1:00:47 1 hour, 47 seconds Thank you on behalf of HTB financial services that concludes this conference. 1:00:53 1 hour, 53 seconds Thank you for joining us and you may now disconnect your lines.