HDB Financial Services Limited — Q3 FY26

HDB Financial Services Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=f0ubK3Ap2q0 Published: 4 months ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the Q3 FY26 earnings conference call hosted by HTV Financial 0:09 9 seconds Services. Please note this conference call is only for analyst and investor and not for media. As a reminder, all 0:17 17 seconds participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:25 25 seconds you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchdown phone. I now hand the 0:33 33 seconds conference over to Mr. Jumar Sha, CFO of HTB financial services. Thank you and over to you Mr. Jakumar. 0:42 42 seconds Thank you so much Sagar. Um good evening to all of you. I welcome you all to the Q3 earnings call of HDB Financial 0:50 50 seconds Services Limited. We have with us our MD and CEO Mr. Gomesh along with myself and the senior management team of the 0:58 58 seconds company. I hope all of you would have had a chance to produce a financial results the investor presentation and 1:05 1 minute, 5 seconds press release which has been filed with the stock exchange earlier this evening and also available on our website www.hdbfs.com. 1:16 1 minute, 16 seconds We will start with management remarks and then open up the call for Q&A. The audio recording of this call will also 1:24 1 minute, 24 seconds be available on our website shortly after the call ends. I would now request our MD and CEO Mr. 1:31 1 minute, 31 seconds G. Romesh for his opening remarks following which I will provide a brief on the financial results and then answer Q&A. 1:40 1 minute, 40 seconds Thank you Jay Kumar and a very good evening to all of you joining in and wish you a happy new year 2026 and greetings of the harvest festival. Uh 1:48 1 minute, 48 seconds briefly on the macros, consumption growth remained strong during the festive season and positive for the quarter. Broad-based set of measures in 1:56 1 minute, 56 seconds fiscal and monetary policy supported by expected good winter harvest bodess well for the domestic demand. Real GDP growth 2:04 2 minutes, 4 seconds showed resilience amongst amidst global headwinds even as in inflation stayed benign in the festive season. Global 2:12 2 minutes, 12 seconds uncertaintities around geopolitical tensions and trade remain a key monitorable. Coming to quarterly 2:19 2 minutes, 19 seconds business updates at an organizational level, our mission is to serve aspirational India and now we have a 2:26 2 minutes, 26 seconds franchise of over 22 million customers and a panindia network of 1744 branches spread across 1165,000 cities. 2:36 2 minutes, 36 seconds disbbursement for disbbursement for Q3 uh which is the October to December period clocked in at an all-time high of 2:44 2 minutes, 44 seconds 17,917 crores. It grew by 15% quarteron quarter led by the consumer finance segment followed by the asset back businesses. 2:54 2 minutes, 54 seconds Book growth came in at 2.8% in the same period. Our yield improved on the back of our efforts at balancing product mix 3:01 3 minutes, 1 second through focused origination. NIM for the quarter increased to 8.1%. 3:07 3 minutes, 7 seconds As you may know that you know there have been a set of notifications on new labor codes that did impact our provisions in 3:16 3 minutes, 16 seconds terms of graduity and other things. My CFO will talk in more detail adjust so OPEX continued to be adjusted for that 3:24 3 minutes, 24 seconds you know one-time impact which we have taken in Q3. Uh you know OPEX continued to be within the expected range. um our 3:31 3 minutes, 31 seconds asset quality you know uh and stage 1 has improved to 95.22%. 3:39 3 minutes, 39 seconds So adjusted for our um you know so our reported PAT for Q3 grew by 36% yearonear however excluding the impact 3:48 3 minutes, 48 seconds of the new labor code which is a onetime provision that we made in Q3 our PAT grew by 45% if you look at comparable 3:55 3 minutes, 55 seconds numbers. Uh coming to segment wise commentary on enterprise lending lap and enterprise business loan which is a 4:03 4 minutes, 3 seconds variation of our lab product grew moderately in Q3 gold loans book grew by 17.8% 8% quarteron quarter. Portfolio 4:11 4 minutes, 11 seconds quality and unsecured business which we had called out a couple of quarters back uh has stabilized as asset quality pressure eases further. We expect to 4:20 4 minutes, 20 seconds return to a growth trajectory in the coming quarters. On asset finance CV and CE book showed moderate growth in Q3. 4:28 4 minutes, 28 seconds Asset quality challenges that we had called out in H1 showed signs of improvement in Q3 in the early buckets. 4:34 4 minutes, 34 seconds We anticipate further positive momentum in both the businesses on the back of infrastructure push and improving econ 4:41 4 minutes, 41 seconds economy on consumer finance book for this segment grew by 17.3% quarteron quarter this was led by auto two-heers 4:49 4 minutes, 49 seconds and consumer durables festive season surge pent-up demand market response to GSC cuts fewer growth we expect momentum 4:56 4 minutes, 56 seconds to continue in the segment going forward uh Jay Kumar would you like to update on the financials thank you Romesh moving on to the financials performance for the quarter. 5:05 5 minutes, 5 seconds As Romesh mentioned, customer franchise grew to 22 million, which is an increase of 4.8% sequentially and 19.3% 5:14 5 minutes, 14 seconds yearonear. The total gross loan book as on September 30, 2025 stood at 1 lak 5:21 5 minutes, 21 seconds 14,577 crores, growing 2.8% sequentially and 5:27 5 minutes, 27 seconds 12.2% Y on Y. Secured loans of the total amount consisted of 74%. 5:36 5 minutes, 36 seconds Disbburments for the quarter ended December 31, 2025 was 17,917 5:42 5 minutes, 42 seconds crores, up 14.9% sequentially, an all-time high for the franchise. 5:51 5 minutes, 51 seconds Branch count stood at 1744 spread across 1165 cities and towns. Net interest 5:58 5 minutes, 58 seconds income for the quarter was 2,285 crores, an increase of 4.2% quarteron quarter 6:06 6 minutes, 6 seconds and 22.1% yearonear. Net interest margin NIM for Q3 FI26 6:14 6 minutes, 14 seconds improved to 8.09% versus 7.95% for Q2 FI26 6:22 6 minutes, 22 seconds and 7.46% in Q3 FI25. 6:26 6 minutes, 26 seconds Moving on to expenses, I'll just elaborate a little bit on the labor code. Effective 6:33 6 minutes, 33 seconds November 21, 2025, the government of India notified the four labor codes. The code of wages 2019, Industrial Relations 6:42 6 minutes, 42 seconds Code 2020, the code of social security 2020, and the occupational safety, 6:48 6 minutes, 48 seconds health and working conditions code 2020, collectively referred to as the new labor codes, consolidating 29 existing 6:57 6 minutes, 57 seconds labor laws. The Ministry of Labor and Employment has published draft central rules and FAQ on December 30, 2025 to 7:06 7 minutes, 6 seconds facilitate assessment of the financial impact arising from these regulatory changes. 7:13 7 minutes, 13 seconds Under IND19, which is our accounting standards that we follow, changes to employee benefit plans arising from the 7:20 7 minutes, 20 seconds new labor codes constitute plan amendments and they're required to be treated as past service cost and 7:28 7 minutes, 28 seconds recognized as an expense in the statement of profit and loss. 7:32 7 minutes, 32 seconds Accordingly, the new labor codes has resulted in an estimated increase in provision for employee benefit expenses 7:40 7 minutes, 40 seconds of rupees 60.52 crores and the same has been recognized under the head employee benefit expenses in the quarter and the 9 months ended December 31, 2025. 7:53 7 minutes, 53 seconds The company continues to monitor the finalization of central stroke trade rules and class clarifications from the 8:02 8 minutes, 2 seconds government on other aspects of the labor code and would provide appropriate accounting treatment on the basis of 8:10 8 minutes, 10 seconds such developments as needed in the coming quarters. 8:14 8 minutes, 14 seconds Of the overall impact of 61 crores, 56 crores pertains to the lending business. 8:20 8 minutes, 20 seconds The P&L ratios that we call out for the lending business, I will be calling them out after excluding this one-time impact 8:29 8 minutes, 29 seconds of 56 crores to make sure they're comparable. Cost to income ratio for our lending business reduced to 39.5% 8:38 8 minutes, 38 seconds in Q3 FI26 as compared to 40.7% in Q2 FI26 and 42.5% in Q3 FI25. 8:49 8 minutes, 49 seconds The ratio was 40.9% for 9 months ended December 26 as 8:55 8 minutes, 55 seconds compared to 42.8% for the 9 months ended December 25. Cost to asset excluding the one-time impact was flat at 3.7%. 9:08 9 minutes, 8 seconds Pre-provisioning operating profit POP for the quarter was 1,611 9:14 9 minutes, 14 seconds crores as against 1,52 crores for the prior quarter. Credit cost for the 9:21 9 minutes, 21 seconds quarter was 712 crores as comp against 748 crores for the prior quarter. 9:30 9 minutes, 30 seconds Reported profit after tax for the quarter ended December 31, 2025 was 644 9:37 9 minutes, 37 seconds crores as against 581 crores for the prior quarter excluding the one-time impact on account of the 9:45 9 minutes, 45 seconds new labor codes profit after tax for the quarter ended December 31, 2025 9:52 9 minutes, 52 seconds was 686 crores which resulted in a growth of 18%. 9:58 9 minutes, 58 seconds Gross stage three as at December 31, 2025 was 2.81% um which is similar to the number that we had as at September 30, 2025. 10:12 10 minutes, 12 seconds Provision for coverage um as on December 31, 2025 for stage 3 stood at 55.59%. 10:24 10 minutes, 24 seconds ROA annualized for the quarter ended December 31, 2025 stood at 2.35%. 10:31 10 minutes, 31 seconds And for the 9 months was at 2.15%. 10:37 10 minutes, 37 seconds ROE annualize sorry ROE for the quarter ended December 31, 2025 stood at 13.99%. 10:47 10 minutes, 47 seconds Earnings per share for the quarter was 7.8 8 rupees and book value per share stood at 239 rupees. Our borrowing mix 10:58 10 minutes, 58 seconds remains well diversified with a positive cumulative mismatch across all buckets up to 5 years. We remain well 11:05 11 minutes, 5 seconds capitalized with a total capital adequacy of 21.81% as at December 31, 2025. 11:17 11 minutes, 17 seconds This ends my um you know detailed update on the financials. 11:23 11 minutes, 23 seconds We now request Saga to open up the queue for questions. Thank you. 11:29 11 minutes, 29 seconds Thank you. Thank you very much. We will now begin with the question and answer session. 11:35 11 minutes, 35 seconds Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you would wish to remove yourself from the question queue, you may press star and two. 11:47 11 minutes, 47 seconds Participants are requested to use handsets while asking a question. 11:52 11 minutes, 52 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 11:58 11 minutes, 58 seconds Ladies and gentlemen, also in order to ensure that the management is able to address questions from everyone in the conference, please limit your questions 12:05 12 minutes, 5 seconds to two each per participant. If you have a follow-up question, you may rejoin the queue. 12:12 12 minutes, 12 seconds Our first question comes from the line of Abiji Debraal from Motila Losal. Please go ahead. 12:20 12 minutes, 20 seconds Yeah. Hi. Am I audible? Yes Aid. Good evening. 12:24 12 minutes, 24 seconds Yeah. Good evening sir. So thank you for taking my questions. So just just two things. Uh first thing is uh during your 12:31 12 minutes, 31 seconds opening remarks you spoke about u weakness in CV and C that we've been seeing for the last few quarters getting 12:39 12 minutes, 39 seconds better in the second half. So if you could just uh elaborate on that and also the fact that MSME uh was showing us 12:48 12 minutes, 48 seconds some pain uh the unsecured MSME in particular. So where is it trending now because I see that the enterprise segment is still kind of trending a 12:56 12 minutes, 56 seconds little weak. Uh and then the second question I had was uh on on vehicle finance. Uh I see that asset finance 13:04 13 minutes, 4 seconds resource finance have grown by about 4% Y. So if you could uh just uh split this up into uh what was the volume and the 13:12 13 minutes, 12 seconds value growth and so lastly uh now that the festive season and the GST cuts are 13:19 13 minutes, 19 seconds behind um if you could just help us understand which segments have seen the demand momentum continue in December and 13:28 13 minutes, 28 seconds January and which all segments uh are you seeing that the demand has already started tapering off. uh basically 13:35 13 minutes, 35 seconds whatever uh pent up demand or bump in the demand that we saw after the GST rate cut those were the few questions I 13:43 13 minutes, 43 seconds have thank you I'll try and address um Abijit so first one being um weakness in 13:50 13 minutes, 50 seconds CV and C uh so this was something that Romesh mentioned at the beginning that is something we called out in Q1 and Q2 13:59 13 minutes, 59 seconds and we had mentioned that we expect it to stabilize in the current quarter which is you know quarter 3 and we have 14:07 14 minutes, 7 seconds actually seen that so the it's a part of two um states kind of two stories one is 14:13 14 minutes, 13 seconds on the 90 plus where we have seen it stabilize there is some more work to be done where we bring that f down further 14:23 14 minutes, 23 seconds and that's one of the reasons why you see the gross stage three at 2.8%. 14:28 14 minutes, 28 seconds What has been very positive in the current quarter is that we have managed to pull back from the delinquent book 14:36 14 minutes, 36 seconds into stage one and our zero DPDs across um all products actually inching up in a 14:45 14 minutes, 45 seconds good way. So that's been the positive side for us with the unsecured theme pain that was 14:54 14 minutes, 54 seconds there for the last five to six quarters if I can put it that way that has clearly started easing off. Um the book 15:02 15 minutes, 2 seconds as you would have seen in the investor deck has actually reduced slightly by almost 1%. 15:08 15 minutes, 8 seconds Um but there the health of the book has actually improved. So um we're seeing 15:16 15 minutes, 16 seconds very it very positively. We need to start pushing hard into that space and growing from here on. It will take some 15:24 15 minutes, 24 seconds time as you know um we've taken five six quarters to really you know make sure a lot of things uh fall in place. In a 15:34 15 minutes, 34 seconds couple of quarters we should see growth come back on that. In terms of vehicle financing value versus um you know uh 15:44 15 minutes, 44 seconds average ticket size as you put it there has been a slight reduction in the ticket size of approximately 5% if I can 15:52 15 minutes, 52 seconds put it that way. uh and the balance has really been growth on the um you know business front and October especially if 16:01 16 minutes, 1 second I could call out in specific as the festive season really covered up for you know a lot of September gaps 16:10 16 minutes, 10 seconds right and then it has been positive since so we expect that to you know range in the positive territory and grow 16:18 16 minutes, 18 seconds from here on yeah thanks Thank you. 16:32 16 minutes, 32 seconds Our next question comes from the line of Viral Sha from IIFL Capital. Please go ahead. Yeah. Hi. Uh thanks for the opportunity. 16:40 16 minutes, 40 seconds Uh I had two questions. Uh one is on the growth front. Uh if you can uh help us uh understand. While I think that the 16:48 16 minutes, 48 seconds disbustment growth has started showing signs of pickup uh of course season some bit of offset on the ticket size fund 16:56 16 minutes, 56 seconds but uh the book growth is still I would say a bit uh softer so uh what could be the horizon over which we intend to kind 17:04 17 minutes, 4 seconds of reach say an 18 to 20% kind of a uh book growth or medium-term target which is there and the second question is with 17:12 17 minutes, 12 seconds regards to the opex uh what is the uh I would say the BA BU impact of the labor code. Uh I understand there's a one-time 17:20 17 minutes, 20 seconds impact of the historical uh say provisioning but on a BAU basis what would be the kind of impact of it? Is it 17:27 17 minutes, 27 seconds material at all? Uh those were my two questions. 17:32 17 minutes, 32 seconds So on the dispersement to book the way I would look at it um Viral is that um 17:40 17 minutes, 40 seconds look at in the context of how we've grown right. So we've actually grown for 15% Q on Q on disbbursements and that's the most positive thing on the book. The 17:49 17 minutes, 49 seconds way it ranges is as uh you've seen we've held on to our yields and as we've held on to our yields in certain businesses 17:56 17 minutes, 56 seconds prepayments also happen plus the whole pullback that we've done in terms of recoveries which has been very positive 18:05 18 minutes, 5 seconds on the stage two book right or the one plus book that has also you know gone into this calculation. 18:13 18 minutes, 13 seconds So the way I look at it is we're fairly confident in terms of you know how we'd grow from here on in terms of 18 to 20%, 18:21 18 minutes, 21 seconds the way we've always looked at it viral is the nominal GDP plus 6 to 7 and uh 18:29 18 minutes, 29 seconds you know overall the thought process does not change. We believe growth will start kicking in from here on and it 18:36 18 minutes, 36 seconds should be in more positive range from where we stand today. 18:40 18 minutes, 40 seconds Yeah. Second one if I uh just on this followup uh on the growth piece that you mentioned on the 18:47 18 minutes, 47 seconds nominal front uh do you think uh with uh the competitive intensity likely to increase with many players receiving 18:55 18 minutes, 55 seconds growth a significant growth funding uh in the form of equity does that change any of this the competitive scenario on 19:02 19 minutes, 2 seconds the growth front as well from a medium I don't think so uh at this point in time we believe the market is you know 19:11 19 minutes, 11 seconds there for us to grow for the next coming 3 to 5 years for sure if not the next 10 to 15 years. Yeah. Um on your second 19:20 19 minutes, 20 seconds question on OPEX and BAU impact of the labor code the way I I would see is that you know as I mentioned it's a 19:26 19 minutes, 26 seconds developing area um from what uh you know we were aware of based on the draft rules what information we've had we've 19:35 19 minutes, 35 seconds taken a provision as of now um let let this space develop over the coming months and you know let us get finality 19:43 19 minutes, 43 seconds uh then it would be better for us to comment on Thank you. 19:51 19 minutes, 51 seconds Thank you. Thank you. 19:54 19 minutes, 54 seconds Your next question comes from the line of Nestin Chawat from Kota. Please go ahead. 20:00 20 minutes Hi, I was just looking at you know your cost of borrowings and uh that's almost 20:07 20 minutes, 7 seconds flat on a sequential basis. So uh it could give some color in terms of uh you know where are we placed in terms of 20:14 20 minutes, 14 seconds repricing or do we expect this this kind of uh you know ratio to to remain in these at these levels going forward and 20:22 20 minutes, 22 seconds uh in that backdrop how do we really think about margins I know I know you you commented on on the competition part but uh maybe if you could give some 20:30 20 minutes, 30 seconds color in terms of uh you know how do how do you expect the the near-term product mix to sort of uh you know uh change 20:38 20 minutes, 38 seconds your ease and trajectory on cost of borrowings. 20:44 20 minutes, 44 seconds Sure. So let me address the cost of borrowings first. Um on the cost cost of borrowing side as I had mentioned I 20:51 20 minutes, 51 seconds think in the last call we were largely done with maximum of the repricing. 20:57 20 minutes, 57 seconds Um what we have u looked at is I think the cost of borrowing has reduced by two to three bips approximately on the whole 21:05 21 minutes, 5 seconds and what we've been continuously doing is making sure we look at the right products within the basket whether it is 21:12 21 minutes, 12 seconds NCDS whether it is uh you know term loans to make sure we borrow um on a product that we are able to sustain the 21:19 21 minutes, 19 seconds current borrowing cost. The way we look at it is we believe that the current borrowing cost should sustain at least for the coming few quarters. Um 21:28 21 minutes, 28 seconds obviously there's a lot more at play uh you know outside of HDB which affects the overall bond yields um and the 21:36 21 minutes, 36 seconds market. So we'll have to watch that space closely but for the coming at least couple of quarters we expect to be in that range and um if opportunities 21:45 21 minutes, 45 seconds lend or opportunities come our way then we should be able to improve it by a few bips as well. Sure. 21:57 21 minutes, 57 seconds On the yield side, um as I had mentioned on the last call, we expect the NIM to range generally in the 7.9 to8. Um it is 22:06 22 minutes, 6 seconds 8.09. Currently, um you know, as we go into Q4 and the overall markets are 22:12 22 minutes, 12 seconds there, there is pressure obviously on um you know, yields across products. we've done well as a business to hold on to 22:20 22 minutes, 20 seconds our yields. Um we expect again that to be rangebound at least for the coming few quarters uh in the range of you know 22:26 22 minutes, 26 seconds 5 to 10 pips uh not a lot more variant from there. So we should be able to hold on to our nims in the region of eight as we had mentioned. 22:39 22 minutes, 39 seconds Got it. And anything to read in the uh in the decline in gross stage two loans. 22:45 22 minutes, 45 seconds This is as I said it was positive. It's been good recovery be it enterprise lending be it asset finance be it consumer 22:52 22 minutes, 52 seconds finance I think across the board the strategies that the teams put in um have started to show uh we're very uh I 23:02 23 minutes, 2 seconds wouldn't say hope would be the wrong word I think it's the confidence that the teams are driving into the market of going and doing positive recoveries and 23:10 23 minutes, 10 seconds making sure um the flow forwards reduce right the key for our business really in retail is to make sure flow forwards 23:17 23 minutes, 17 seconds reduce and that's been the key focus of how we are going about things. So that's a big positive for how we look at the 23:23 23 minutes, 23 seconds business and uh you know plan for the future. 23:28 23 minutes, 28 seconds Uh thank you. Those were my questions and all the best. Thank you. Thank you so much. 23:34 23 minutes, 34 seconds Thank you. Your next question comes from the line of Piran Engineer from CLSA. Please go ahead. 23:43 23 minutes, 43 seconds Uh yeah sorry I had locked out of the queue. My questions have been answered and thank you. Thank you. 23:52 23 minutes, 52 seconds Your next question comes from the line of Shria Shivani from Namura. Please go ahead. Yeah. Hi, thank you for the opportunity. 24:00 24 minutes I have two questions. Uh first is a followup on the uh reduction in ticket size in the vehicle book that you spoke 24:07 24 minutes, 7 seconds about of about 5%. So uh I just want to understand some reduction would be there because the GST cut and the price of the 24:14 24 minutes, 14 seconds vehicle is lesser. So the loan size is lesser etc. But have you seen depremiumization of cars? So in in a sense that after GST cut have you seen 24:23 24 minutes, 23 seconds more sales of the entrylevel cars versus what was happening earlier um or any other color around uh what has happened 24:31 24 minutes, 31 seconds in the sales of the uh car segment and my second is on the net slippages. So um the trend uh past two quarters were 24:40 24 minutes, 40 seconds elevated. The trend is quite uh significant improvement in this quarter. 24:45 24 minutes, 45 seconds But whatever is uh still slipping I think would it be majority CVC MSME is there some color you can give around uh 24:53 24 minutes, 53 seconds what book continues to uh slip at a slightly elevated rate versus the company average. 24:59 24 minutes, 59 seconds Right. Uh so when you look at u the entire GST and look at our business there are primarily two areas where the GST cut has had a significant impact. 25:10 25 minutes, 10 seconds One is the auto loans business and second is the two wheel over loans business. Uh construction equipment was always at 18% GST. Mobile phones and you 25:19 25 minutes, 19 seconds know entry- level consumer durables are always at 18% GST. High-end televisions which were at a higher GST rate have come down to 18. Um so you know bulk of 25:30 25 minutes, 30 seconds our business really has has had no impact on because GST red card other than the fact that it's driven positive 25:37 25 minutes, 37 seconds sentiment in the market. Uh so with within two wheelers and auto loans we have seen about a 5% reduction in our 25:44 25 minutes, 44 seconds average ticket size um because the vehicle prices itself have come down. 25:49 25 minutes, 49 seconds Also I think couple of manufacturers have uh cut prices of some of the entry- level vehicles that they're selling. 25:56 25 minutes, 56 seconds right as as a festive um offer. So that's also driven um sales in the entry- level segments. So I won't call 26:04 26 minutes, 4 seconds it depremiumization which would suggest that a customer could afford to buy something more and you know has actually 26:11 26 minutes, 11 seconds bought something cheaper. In fact we ran a campaign called do aacha basically to say that why buy a 26:19 26 minutes, 19 seconds two wheel when you can buy a car. In fact, some of the carlo cars are spread 26:26 26 minutes, 26 seconds the same as um 7 years ago. Okay, in some of the entry- level segments. So, I think it's a lot more customers who have 26:35 26 minutes, 35 seconds now found that the product is affordable. Uh there's no depreiumization in our view. Uh in fact, in consumer durable segment, you know, 26:42 26 minutes, 42 seconds where other than high-end televisions, um there's no impact of GST, we not see any reduction in ticket size. Yeah. 26:50 26 minutes, 50 seconds Yeah. Um on the net um slippages um sh you're right uh a large part of it has 26:57 26 minutes, 57 seconds just been in the CVC segment outside of that you know slippages genuinely come down 27:06 27 minutes, 6 seconds and um you know that's that's very positive as I mentioned uh you know we should hopefully see you know slippages 27:13 27 minutes, 13 seconds in these two products also start to become you know lower. Sure. Just to follow up on the CVC, there was some 27:21 27 minutes, 21 seconds cyclones uh uh down south. Uh do do these events uh have some nagging pro have some problems or do do they create some issues for you all? 27:33 27 minutes, 33 seconds Uh so see typically Q2 as a season is slow because of monsoon. So deployment of assets comes down. So let's say a vehicle runs 200 km a day for 20 days. 27:46 27 minutes, 46 seconds during monsoon that number might come down about 150 160 uh because you know vehicles run slower when it's raining a lot. Um but specific events specifically 27:54 27 minutes, 54 seconds I don't think there's been any impact of cyclone in the south that we can sort of attribute to our yeah to our portfolio. Sure. Thank you. This is very useful. 28:03 28 minutes, 3 seconds All the best. Thank you. Thank you. 28:08 28 minutes, 8 seconds Your next question comes from the line of Pritage Patil from Invest. Please go ahead. 28:16 28 minutes, 16 seconds Yeah. So I had uh two questions. So the first one was on the strong fee income growth that we have seen on the book. So if you could just throw some clarity on 28:24 28 minutes, 24 seconds why that has happened and then the second is that the branch count has reduced. 28:29 28 minutes, 29 seconds So will this impact growth going forward or how are we looking at that? 28:34 28 minutes, 34 seconds Thanks. So um so fee income is primarily driven by you know the product mix and you know with the 15% disbbursement 28:41 28 minutes, 41 seconds growth and the product mix you know there's been a increase in fee income. 28:46 28 minutes, 46 seconds Um so you know in terms of branch count you know there are branches that we will sort of review at the end of some time 28:54 28 minutes, 54 seconds to see whether they are viable whether they met their milestones that we have set out for them. So there'll be branches that we relocate. Uh so given 29:03 29 minutes, 3 seconds that given the nature of our business and given our uh processes it's quite we can take these decisions quite quickly. 29:10 29 minutes, 10 seconds So if a branch is not doing well we can shut it and move on or we relocate the branch. There also cases where we increase the branch sizes right based on 29:18 29 minutes, 18 seconds the business volume which really don't come in the numbers count. Uh what I think are essentially on making sure that we are servicing a large part of 29:26 29 minutes, 26 seconds the country. So in terms of the pin code coverage, how many pin codes are we covering effectively? Uh can we cover the branches or a larger geography 29:35 29 minutes, 35 seconds around the branch effectively without uh you know um without compromising our credit policies. So so you know don't 29:43 29 minutes, 43 seconds read too much into the number of branches per se. It'll always be here five or 10. Um you know there'll be some small branches that we started off a year ago hasn't met the milestone. 29:53 29 minutes, 53 seconds Either we're not comfortable with the credit quality of the market or we overestimated the potential of the market or you know factors are not 30:00 30 minutes exactly supporting growth. Uh we would just uh you know relocate the mark branch and and and you know focus our efforts on branches that are doing well. 30:10 30 minutes, 10 seconds Thank you. Just a follow-up question if you could give clarity on the ARC transaction as well if if you can tell what book have we sold off to the ARC's 30:19 30 minutes, 19 seconds and do we see any incremental sell off happening to ARC's in the coming quarters? 30:25 30 minutes, 25 seconds Yeah. So um what we do generally is we only look at you know uh very dated 30:31 30 minutes, 31 seconds write off portfolios right where say let's take an example where you have very small smaller ticket relatively 30:40 30 minutes, 40 seconds smaller ticket lab book or CD book where our ability or the cost that we would potentially incur to recover that money 30:50 30 minutes, 50 seconds over a long period of time is X and we believe today you know what we would recover is what we can get back in cash 30:57 30 minutes, 57 seconds from the ARC transaction. we look at that as a value transaction and we go and complete that and that's exactly what we've done you know for a small 31:05 31 minutes, 5 seconds piece of the NPA portfolio that you've seen in the disclosure uh you know that is what we've done so it's a small piece we always look at you 31:14 31 minutes, 14 seconds know uh costbenefit analysis and everything that we do to make sure we free up resources for uh better 31:22 31 minutes, 22 seconds deployment in future Sure thanks thank Thank you. Your next question comes from the line of Bascar Basu from Jeff. 31:35 31 minutes, 35 seconds Please go ahead. 31:36 31 minutes, 36 seconds Yeah, good evening. Uh I had a couple of questions. Firstly, on the vehicle side, uh so uh this 4% disbbursement growth if 31:44 31 minutes, 44 seconds you can kind of give some color around how much was the drag from a price deflation there. uh and secondly uh when 31:51 31 minutes, 51 seconds I look at the book uh CV new seems to have grown sequentially by about 4% by uh use CVS actually shrunk on a 32:00 32 minutes sequential basis. So is there anything uh playing out there? Um these are the two questions on the CV side and my last 32:08 32 minutes, 8 seconds question is basically on the uh business loan front where uh so far you've tightened filters and how far are you 32:17 32 minutes, 17 seconds when you think you can start pushing growth again that's so yeah Bascar I'll cover it and if I 32:26 32 minutes, 26 seconds miss something I think there was a little bit of crack in the beginning so I'll cover the questions and if I miss something and please jump in. So on the 32:33 32 minutes, 33 seconds TV side um as you as you would have you know observed the whole market wise I think uh the reason why new is higher 32:41 32 minutes, 41 seconds this quarter is primarily on account of the whole festive right festive sales were absolutely bumper and I think that 32:48 32 minutes, 48 seconds just took off completely on CV new obviously in the festive CV used was a less sought after product if I can put 32:56 32 minutes, 56 seconds it that way and plus even the pricing clarity wasn't there for almost you know a couple of weeks or a month in the 33:03 33 minutes, 3 seconds beginning. So I I think that's the primary reason. Um our overall objective over a period of time that we've quoted 33:11 33 minutes, 11 seconds in the public domain that we would like to be more you know uh pushing towards used to get to a 50/50 over the next 3 33:19 33 minutes, 19 seconds to four years does not change um in a particular quarter like this or you know when you look at March end generally you 33:26 33 minutes, 26 seconds know there's more of new sales push that comes. So that's how I look at it. If you look at it on a 9 months level, it's 33:33 33 minutes, 33 seconds more balanced. Uh on a quarter-wise, of course, um as you rightly put, CV new has grown and CV used is slightly lower, 33:40 33 minutes, 40 seconds but nothing more to read beyond the festive and the GST and you know, clarity on pricing, etc. Um so that's on CV. 33:51 33 minutes, 51 seconds On the business loan front, I think if you ask me on the credit side of it, quality, i.e. book health, I think we're 34:00 34 minutes good. The way we read into this is now we've got to push hard on the current parameters and grow our book. And that's 34:07 34 minutes, 7 seconds something we're very focused on. But as we push in the same way across the country, it will take a couple of waters in terms of moving that into positive traity and getting into growth. 34:18 34 minutes, 18 seconds Obviously there's a runoff that happens on the current book um as we push the new book in the trend to reverse might 34:26 34 minutes, 26 seconds take some time but uh you know and in terms of wanting to push and intent and credit being there available for us all 34:35 34 minutes, 35 seconds of those okay uh just two followups there one was uh a question which had asked actually 34:42 34 minutes, 42 seconds uh on the disbbursement side in CVS uh how much was the drag from uh price deflation like you reported about 4% 34:51 34 minutes, 51 seconds disment growth. Uh had it not been for the price what would this be just a ballpark kind of sense. Um um and 35:00 35 minutes secondly just on the business loan uh at this point of time u at a broader industry level are you seeing unsecured 35:08 35 minutes, 8 seconds business loan stress starting to kind of abate or stabilize which will give you comfort to push the growth again? 35:16 35 minutes, 16 seconds I'll answer the second one first. Let me wait for the next one month to see how every what everybody says. I think it won't be fair on my part to comment on the whole industry. I haven't seen everybody's numbers. 35:26 35 minutes, 26 seconds Okay. 35:26 35 minutes, 26 seconds Um on the price deflation side, I think it'll be fair to say it has been, you know, fairly small at this point in time for the quarter. 35:35 35 minutes, 35 seconds We'll see how that goes. Yeah. 35:37 35 minutes, 37 seconds Okay. Thanks a lot. That's all from my side. Thank you. Thank you. 35:43 35 minutes, 43 seconds Your next question comes from the line of Raov from Ambbit Capital. Please go ahead. 35:49 35 minutes, 49 seconds Sir, hi. Uh, good evening and thanks for the opportunity. I have two questions. 35:53 35 minutes, 53 seconds Uh, one on your cost of borrowing. So, given the INR depreciation that has happened and I think your exposure to 36:00 36 minutes ECBS is about 11%. Uh, did you see your cost of foreign borrowings go up during this quarter? Because despite the rate 36:07 36 minutes, 7 seconds cuts coming through even in 3Q, uh, the calculated cost of fund hasn't moved. uh uh really so uh that's my one first 36:14 36 minutes, 14 seconds question so on cost of borrowing um our entire ECB book is fully hedged so there is 36:24 36 minutes, 24 seconds zero impact we treat it as a fixed product kind of a thing uh as I mentioned uh earlier there has been a 36:31 36 minutes, 31 seconds slight reduction of a few bits there are certain borrowings that obviously come in at current pricing or slightly higher 36:38 36 minutes, 38 seconds as well um I'm sure all of you are very clued onto the market where rates have also hardened. Uh while there was a rate 36:46 36 minutes, 46 seconds cut which happened in December that hasn't really translated much into you know lower costs of borrowing in most 36:53 36 minutes, 53 seconds instances. In fact the bond yields um you know have only hardened at this point in time. Um that said we 37:00 37 minutes continuously look at uh you know our entire borrowing book and work closely with all our partners to make sure uh it 37:10 37 minutes, 10 seconds is the right base and the right pricing on a monthly basis. 37:15 37 minutes, 15 seconds Okay. So you know even at the margin the foreign borrowing uh the cost of foreign borrowing remains attractive versus say 37:22 37 minutes, 22 seconds the domestic borrowing. Uh is that a fair assumption or or not? 37:27 37 minutes, 27 seconds Uh so if you ask me as that yesterday there's a large you know newspaper article that got printed whoever has got 37:34 37 minutes, 34 seconds money in you know 728 obviously it's attractive but outside of that window that the RBI gave it's a little pricey 37:42 37 minutes, 42 seconds from at least the way we look at it at this point in time. 37:47 37 minutes, 47 seconds Uh thank you. Uh my second question is on the uh CV finance business I see that your disbursement growth these business 37:54 37 minutes, 54 seconds is about 4%. Uh I'm assuming that's after you know the 5% decline in average value of the vehicle finance. But when I 38:02 38 minutes, 2 seconds look at the uh volume growth for the industry right commercial vehicle retail sales have been up 17% during the 38:09 38 minutes, 9 seconds quarter. uh if I adjust uh that number by the same factor say 5 6% decline in value uh I am assuming that the 38:18 38 minutes, 18 seconds disbbursement growth for the CV industry would have been for all financers collectively would have been you know higher uh than the 4% uh for you uh so 38:27 38 minutes, 27 seconds is that the correct way to look at your disbbursement number and is that comparison correct uh I'm just trying to understand the comparative intensity uh 38:35 38 minutes, 35 seconds in in the commercial vehicle uh finance segment uh so your thoughts will will be really useful here. 38:43 38 minutes, 43 seconds Yeah. So again, just making sure we're both on the same page. U you're seeing the book uh number grow. Book obviously 38:52 38 minutes, 52 seconds has a much larger base to it, right? Ra dispersements grew at a much faster pace, right? Quarter on quarter. In 39:00 39 minutes fact, it's one of the higher ends of you know growth in terms of double digit percentage. uh that effect coming onto 39:07 39 minutes, 7 seconds the book is obviously comes over a period of time because say to give you an example if we were to disperse a 39:14 39 minutes, 14 seconds number of 3,000 right on a book of 30,000 that impact is 10% of that right 39:22 39 minutes, 22 seconds so I don't think both the qu both the statements that you made are directly correlated uh obviously there is a piece that comes 39:31 39 minutes, 31 seconds through with disbbursement growth book will grow Uh in terms of the industry, I believe we're pretty much in there. 39:38 39 minutes, 38 seconds There are certain segments that we may not have operated in more because we don't feel it is it drives value for us 39:46 39 minutes, 46 seconds from an yield perspective, but outside of that, I think we're fairly in the zone with the larger industry. 39:54 39 minutes, 54 seconds Uh no sir so I think my my question was on the disbbursement growth itself uh which is I think 4% Y and then uh even when I look at it on a quarteronquarter 40:02 40 minutes, 2 seconds basis that's I think 15% but uh but but let me take this question from you offline uh Sure. 40:09 40 minutes, 9 seconds Uh okay yeah and and can I ask one more question? Uh yeah. 40:16 40 minutes, 16 seconds Yeah. Okay. So just uh you know your your thoughts some qualitative commentary on the uh asset quality in CV finance segment. Uh what are you seeing 40:24 40 minutes, 24 seconds in terms of customers ability to repay seat utilization? Uh maybe if you can share some numbers around collection efficiencies on the CV portfolio. Uh 40:32 40 minutes, 32 seconds that'll be very helpful. Uh that's all from my side. Thank you. 40:36 40 minutes, 36 seconds Thanks. So I'll give you a broader statement. We don't put out specific you know product wise uh numbers but on the broader side as I mentioned at the 40:44 40 minutes, 44 seconds beginning there are two sides to it for us one is the 90 stroke 120 plus book which has remained in that similar zone and you know needs to be brought down. 40:55 40 minutes, 55 seconds Second is the 90 minus if I can put it or the you know 1 to 90 where the 41:03 41 minutes, 3 seconds efforts that were taken during the quarter we were able to recover well and second we've improved our zero DPD by 41:10 41 minutes, 10 seconds making sure delinquencies also reduce in the first instance. So the X bucket has helped overall. If I were to look at 41:19 41 minutes, 19 seconds collection efficiencies or slippages, slippages have reduced uh you know a little bit from Q2 to Q3. 41:26 41 minutes, 26 seconds They stay at slightly elevated levels which is where we want to really curb it down. So recoveries have improved. We 41:34 41 minutes, 34 seconds believe as we go through the coming quarter and the next two quarters, we should be in a position to bring uh you 41:41 41 minutes, 41 seconds know the book even more healthier from where it stands today, more towards a you know Q1 or a Q4 gone in terms of 41:49 41 minutes, 49 seconds that line. That's at least the aim that we're working towards. Thank you. 41:59 41 minutes, 59 seconds Thank you. A reminder to all the participants, if you wish to register for a question, you may press star and then one. Now 42:08 42 minutes, 8 seconds our next question comes from the line of Ain Singh from MK Global Financial Services. Please go ahead. 42:15 42 minutes, 15 seconds Hi uh thanks. Uh so couple of question. 42:18 42 minutes, 18 seconds The first one on your comment around uh margins uh that it's around 8 8.1% 42:25 42 minutes, 25 seconds towards the higher end of your sort of a guidance and you prefer margin does that mean over the uh coming quarters I mean 42:34 42 minutes, 34 seconds this on margin will lead to a a subpar or relatively uh lower growth than what you would have otherwise kind of thought 42:43 42 minutes, 43 seconds like 18 20% range. uh will this focus on margin leading to sort of a uh you know uh that margin growth uh conundrum you 42:52 42 minutes, 52 seconds being on the lower side in growth that's one and second uh if sort of we were to look maybe for next financial year uh 43:01 43 minutes, 1 second given where the sort of your margins are coming topping already of the guided range uh what sort of you know then you 43:10 43 minutes, 10 seconds know the improvement in credit cost depending upon the current trends you are seeing uh that will help you know the ROAS I mean because on the margin 43:19 43 minutes, 19 seconds side there's very little lever left uh so what kind of a great cost improvement do you expect in the next year right 43:27 43 minutes, 27 seconds thanks Aina so two things I don't think the margin piece impacts growth directly uh sorry it does impact but it doesn't 43:34 43 minutes, 34 seconds in the sense that we believe we're in the right zone as far as a product mix goes plus if you observe an important 43:41 43 minutes, 41 seconds factor and very thank you for the question. Our secured book has actually gone up 50 bips from last quarter itself 43:49 43 minutes, 49 seconds and almost 90 bips plus in the last two quarters. Um as the unsecured comes back which is what we're focusing on which is 43:57 43 minutes, 57 seconds two segments for us which is relationship personal loans and the unsecured business loans we believe that will also help us on the top line. 44:06 44 minutes, 6 seconds That's one. Now if that consistently comes through and rates remain as they are and they don't harden, we should be able to operate at a healthier margin. 44:14 44 minutes, 14 seconds That's one. Secondly, in terms of helping on the ROA, you're right. Uh with a uh you know uh stable book, our 44:25 44 minutes, 25 seconds cost income also we have managed it in a manner sorry managed would be the wrong word. We've actually made sure we've 44:32 44 minutes, 32 seconds taken efforts for it to come into the right zone of less than 40%. As the book grows, we should be able to pull back 44:40 44 minutes, 40 seconds from a 3.7% to slightly lower. Second important factor is the credit cost. Today it is at around 2.5%. 44:49 44 minutes, 49 seconds And the endeavor is to move it towards what we had in the prior quarters and shave off some of uh you know uh a few 44:58 44 minutes, 58 seconds bips from there. We'll see as we go along. Uh the one thing I would want to leave with everybody that we're very committed to bringing that down and 45:07 45 minutes, 7 seconds rather than give a number in specific, the focus is really to see how much can we do over the next coming quarters which can stay in a consistent manner. 45:19 45 minutes, 19 seconds Yeah, thank you. Okay, thanks. 45:24 45 minutes, 24 seconds Thank you. Your next question comes from the line of Kunal Sha from City Group. Please go ahead. 45:31 45 minutes, 31 seconds Yeah. Uh hi, thanks for taking the question. So, uh couple of ones. So, uh in terms of u the uh uh average ticket 45:40 45 minutes, 40 seconds size when we uh look at it, in fact, it's still going up compared to where we were in 2Q particularly on autos as well 45:47 45 minutes, 47 seconds as uh uh two wheelers. So maybe from 433 it's going up by a percent and two wheelers is going up by almost like 3 4%. Uh compared to where we were in 2Q. 45:57 45 minutes, 57 seconds So this is despite uh maybe the price cuts which would have been there because of GST. So how should we look at it? 46:03 46 minutes, 3 seconds Maybe is it like a premiumization or focus on a higher ticket vehicle which is leading to a higher ATS. 46:13 46 minutes, 13 seconds The way I would look at it kunal is I mean it's a small number just now the GST cuts have come through you know there has been fairly very good volumes 46:21 46 minutes, 21 seconds that have happened during the festive on the two-heer side right uh I think that's an important one and you've got 46:29 46 minutes, 29 seconds to look at it in that perspective second is if you look at our new business as I mentioned earlier uh because of the 46:38 46 minutes, 38 seconds festive actually grew more right and whenever the new grows more naturally you will have a 46:46 46 minutes, 46 seconds is on account of new okay okay okay uh got it and fair to assume that on the commercial vehicle side 46:54 46 minutes, 54 seconds there wouldn't have be any impact of GST even on the disbbursement side in terms of the u maybe the price cuts or maybe 47:01 47 minutes, 1 second the overall u uh uh it it's purely the volume linked which would be there on the commercial side yes that's right 47:09 47 minutes, 9 seconds okay got it and u uh just on uh overall credit cost. So uh maybe just in the prior question you indicate that you 47:16 47 minutes, 16 seconds would want to shave it off uh uh say few basis points but ideally when we look at it this kind of a trends both on the commercial vehicle as well as on the uh 47:25 47 minutes, 25 seconds MSM stabilizing when should we ideally see it uh uh coming off uh and and getting to maybe a 47:34 47 minutes, 34 seconds steady state level would it be like another two three quarters from here on or would it take slightly uh longer how should we look at it obviously there 47:42 47 minutes, 42 seconds there has been an improve improvement during the quarter but in terms of the trajectory should we see something similar for another two three quarters 47:50 47 minutes, 50 seconds or it stabilizes over here now the way we would want to look at it kunal is that it stabilizes and improves 47:58 47 minutes, 58 seconds quarter on quarter right um let's see depending on the overall macro and the markets how much can we improve on a 48:06 48 minutes, 6 seconds quarteronquarter basis see the longer term we'd like to operate you know at least 10 to 15 bips or at least 20 bips 48:13 48 minutes, 13 seconds slower than where we are today. Overall, that is where we would want to operate in the longer term and u in the medium 48:20 48 minutes, 20 seconds term try and get there faster than slower. 48:24 48 minutes, 24 seconds Okay, got it. Perfect. That helps. Yeah, thank you. Thank you. 48:30 48 minutes, 30 seconds A reminder to all the participants, you may press star and then one to ask a question. 48:36 48 minutes, 36 seconds Our next question comes from the line of J from NDIE. Please go ahead. 48:42 48 minutes, 42 seconds Hello. Hi. Hi sir. Good evening. Uh congrats on a good set of numbers. Sir my I have a question on uh on your term 48:50 48 minutes, 50 seconds loan. So could you uh specify uh the split between EBLR and MLR borrowing? 48:59 48 minutes, 59 seconds So we have a very small book on um MCLR. 49:03 49 minutes, 3 seconds Our most of our entire bank borrowing on term loans is all EBLR based. 49:09 49 minutes, 9 seconds Okay. Sir and what would be uh the share of HDFC bank uh in your term loans or do we are we are we getting any support 49:18 49 minutes, 18 seconds from the HDFC bank on this side we borrow from HDFC bank like any other 49:24 49 minutes, 24 seconds large bank um we borrow 100% on you know deeply scrutinized related party uh 49:32 49 minutes, 32 seconds terms uh there is absolutely no preference on either sides that's the way I would put 49:40 49 minutes, 40 seconds So it's very commercial terms and it's not that you know uh you know HDFC bank puts in a lot more a lot less. It's very 49:49 49 minutes, 49 seconds very transparent in the market that we operate. 49:52 49 minutes, 52 seconds Okay sir sir thank you and sir uh as we as highlighted and by about by the 49:59 49 minutes, 59 seconds participants previously uh so could you could you just uh just throw some light on how are the collections going on uh the TV side? Uh 50:08 50 minutes, 8 seconds are you are you seeing any green shoots there or is it just uh just the pain still continues? 50:14 50 minutes, 14 seconds Yeah. So I I think J I covered that already you know happy to you know catch up later if there are more length. 50:24 50 minutes, 24 seconds Thanks. Yeah. Thank you. 50:28 50 minutes, 28 seconds Thank you. Your next question comes from the line of Sukarit Dartil from Eyesight Fra Private Limited. Please go ahead. 50:37 50 minutes, 37 seconds Uh yeah, good morning to Raheem. Uh I have two questions. My first question is to Mr. uh Romesh. Uh as India's uh NBFC 50:46 50 minutes, 46 seconds sector evolves with uh rising retail credit demand uh fintech partnerships and uh regulatory oversightes. What what 50:55 50 minutes, 55 seconds structural shifts do you see shaping uh the company's uh vocation over the next two to three 51:04 51 minutes, 4 seconds years? Specifically, how are you preparing to differentiate beyond uh balance sheet growth uh whether through 51:11 51 minutes, 11 seconds uh digital first lending or customer life cycle uh management or uh any risk 51:19 51 minutes, 19 seconds analytics. Yes, I would like to hear your view on this. This is my first question. I'll ask my second question after this. 51:27 51 minutes, 27 seconds Great. Um so u you know glad you asked me that question. I've been in the consumer lending industry for about 30 years now which is pretty much the age 51:35 51 minutes, 35 seconds of the consumer lending industry in India. I worked in the consumer lending industry with no credit bureaus. Um so you know in this industry technology 51:43 51 minutes, 43 seconds change is a is a is a given. It is not a it is not a one-off event. Uh so that's something that we invest for continuously. 51:53 51 minutes, 53 seconds So there's no end game as far as technology is concerned because technology itself is is is is a is a moving train right and that's something 52:00 52 minutes that we need to adapt to on a continuous basis. We need to adapt to customer requirements on a continuous basis and we need to adapt to our own business 52:09 52 minutes, 9 seconds model on a continuous basis. I think our business philosophy has been to address aspirational India uh which is a very clear segment that we identified as a 52:17 52 minutes, 17 seconds growth driver for India and for our business and our company's been focused on understanding what is it that this 52:26 52 minutes, 26 seconds customer needs through his or her life cycle and how do we address those needs effectively. So which is why you know 52:33 52 minutes, 33 seconds over over the last 15 years we have you know developed a large product suite which addresses any need that the 52:42 52 minutes, 42 seconds customer may have and that's our whole product development philosophy is that how do we deliver customer needs profitably. So we don't have a hero 52:50 52 minutes, 50 seconds product in the company which says that oh this how we'll acquire the customer and then try sell another product for us a customer irrespective of the product 52:57 52 minutes, 57 seconds he or she comes through he's a hero and we try and understand what is it that we can do effectively through their life cycle in terms of their own uh 53:05 53 minutes, 5 seconds aspirations as individuals and as businesses and how can we service that requirement effectively. So whether it's a require whether it's investment in our 53:13 53 minutes, 13 seconds processes, people, training, technology uh or our mindset, it's a ongoing and continuous investment u is is how we 53:23 53 minutes, 23 seconds think of our business. Your second question. Yeah, my second question is to Mr. 53:27 53 minutes, 27 seconds Shaha. Uh given the pressure from uh rising funding cost and the needs to invest in uh more tech related uh plat 53:36 53 minutes, 36 seconds uh tech related platforms, how are you uh balancing near-term margin protection with longerterm investments uh that 53:45 53 minutes, 45 seconds could structurally expand the profit uh profit ceiling? Uh are there uh specific 53:53 53 minutes, 53 seconds levers like uh li like like liability mix uh optimization or uh operating 54:00 54 minutes efficiency or any particular fee based kind of a uh service uh that you see as 54:08 54 minutes, 8 seconds margins uh expand beyond 26. Thank you. 54:14 54 minutes, 14 seconds Uh so let me give you my thoughts on this. I think uh the most important question that you asked me I'll cover that one which is on the investment 54:22 54 minutes, 22 seconds front right investing in technology. So the thought process that Romesh has had right from day one is uh that is a 54:30 54 minutes, 30 seconds necessity right over the years that is one area where while we obviously look at pricing everything that we acquire 54:38 54 minutes, 38 seconds and spend very reasonably if I can use that word reasonably. Um there has never been a question mark if our CTO comes 54:47 54 minutes, 47 seconds along and says you know this is what we need to invest for future growth. I think we have not even stopped during COVID. So that is one area we will 54:57 54 minutes, 57 seconds absolutely continue to invest in. Um whatever it takes we will make sure we will uh carve out for the business to 55:06 55 minutes, 6 seconds grow. It is our lifeline and we will continue to do that. That said across the company the culture is extremely 55:13 55 minutes, 13 seconds strong in how costconcious we are. um the concept of an IRRa on an investment 55:21 55 minutes, 21 seconds is almost fed into every single person who comes along with an ask for an investment. So we're very blessed in 55:28 55 minutes, 28 seconds that fashion that the thought process right from you know bottom up is very positive on that front. That's how I would look at it. 55:37 55 minutes, 37 seconds I think that good guidance from your part and I wish the entire team best of luck for next. Thank you. 55:45 55 minutes, 45 seconds Thank you. Your next question comes from the line of Chintan Sha from ICICI Securities. Please go ahead. 55:53 55 minutes, 53 seconds Yeah. Uh hi. Uh thank you for the opportunity. Uh so just one uh one question on this new labor code. Uh so I 56:02 56 minutes, 2 seconds understand that the 61 impact is largely on the uh due to the respective impact. 56:07 56 minutes, 7 seconds Uh but going ahead are we see any recurring uh cost employee cost or will 56:15 56 minutes, 15 seconds that uh sorry to interrupt that chintan sir your audio is modulating it's not coming properly if you can uh just use uh 56:24 56 minutes, 24 seconds handset if if you're using a speaker mode. So uh is this uh better now? 56:31 56 minutes, 31 seconds Yeah yeah I think I got your question. 56:33 56 minutes, 33 seconds Let me try and address it and you can jump in again in case if I missed something. So the question was do we expect something more to come out on the 56:40 56 minutes, 40 seconds labor code right honestly as I mentioned I think that was a question that Vera asked at the beginning if I'm not 56:47 56 minutes, 47 seconds mistaken uh it is a developing space today you know within the finance community uh the understanding that 56:57 56 minutes, 57 seconds we've had along with you know the guidance we've received we've taken that ahead uh let's see how it develops over 57:04 57 minutes, 4 seconds the next coming months Um and then we can talk about it more you know at the end of the year in terms of you know uh what the numbers are. 57:14 57 minutes, 14 seconds Got it. Got it. Yeah. That's it from myself. Thank you. 57:17 57 minutes, 17 seconds I think just having said that to the extent that we have clarifications it's been fully provided for. 57:22 57 minutes, 22 seconds Um to the extent that we have clarification on the labor codes. So we not done a partial provision to the extent that we have actual valuations 57:29 57 minutes, 29 seconds and whatever it's been fully provided for. The 61 crores is is is it at at this point of time. Um yeah sure sure thank you. 57:41 57 minutes, 41 seconds Thank you. Our next follow-up question comes from the line of Abhiji Traal from Modila Los. Please go ahead. 57:49 57 minutes, 49 seconds Yeah question we can't hear you. 58:06 58 minutes, 6 seconds Sorry Saga I don't think we can hear Aijit. All right. 58:14 58 minutes, 14 seconds All right. 58:16 58 minutes, 16 seconds Due to the end of the allotted time we would take that as a last question and I now hand the conference over to Mr. 58:23 58 minutes, 23 seconds Jkumar Sha for closing comments. 58:26 58 minutes, 26 seconds Thank you Sagar. Thank you very much everybody for your time and patience. 58:31 58 minutes, 31 seconds It's been a pleasure talking to all of you. Um wishing you all a very happy you know festival as Romesh wished in the 58:38 58 minutes, 38 seconds beginning. Um have a good evening. Thank you very much. 58:44 58 minutes, 44 seconds Thank you on behalf of HTB financial services. That concludes this conference. Thank you for joining us and you may now disconnect your lines.