HDB Financial Services Ltd — Q4 FY26

HDB Financial Services Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=O_yMnQgjE0c Published: 4 weeks ago

0:00 Ladies and gentlemen, good day and welcome to the Q4 FI26 earnings conference call hosted by HTB financial services. 0:09 9 seconds Please note this conference call is only for analyst and investors and not for media. As a reminder, all participant 0:17 17 seconds lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance 0:25 25 seconds during the conference call, please signal an operator by pressing star then z on your touchstone phone. I now hand the conference over to Mr. Chaiikumar Sha, CFO of HDB financial services. 0:36 36 seconds Thank you and over to you Mr. Chikumar. 0:40 40 seconds Thank you Ruja. A very good evening to all of you. I welcome you all to the Q4 earnings call of HDB Financial Services 0:47 47 seconds Limited. We have with us Mr. G. Romesh MD and CEO along with myself and the senior management team of the company. I 0:56 56 seconds hope all of you would have had a chance to produce our financial results, investor presentation and the press release which has been filed with the 1:04 1 minute, 4 seconds stock exchange earlier today and also available on our website www.hdbfs.com. 1:13 1 minute, 13 seconds We will start the man we will start with management remarks and then open up the call for Q&A. The audio recording for this call will also be available on our 1:22 1 minute, 22 seconds website shortly after the call ends. I would now request our MDN CEO Mr. G. 1:26 1 minute, 26 seconds Romesh for his opening remarks following which I will provide a brief on the financial results and then open up the call for Q&A. 1:37 1 minute, 37 seconds Thank you Jay Kumar and a very good evening to all of you who have joined us today. Um, as we exit fiscal 2026, I'll 1:45 1 minute, 45 seconds begin by highlighting a few key aspects of our performance that underscore our operational resilience and long-term trajectory. 1:54 1 minute, 54 seconds This these represent our commitment to execute a mission of serving aspirational India and sets the stage for continued growth in the coming 2:02 2 minutes, 2 seconds years. First, our customer franchise expanded to 22.9 million about two and a half times since 2022. 2:11 2 minutes, 11 seconds Second, our expansive distribution network now covers 1161 towns and cities of India with 1.6 lakh plus retail and 2:20 2 minutes, 20 seconds dealer touch points. This is the physical distribution. We also have extensive digital presence. Third, 2:27 2 minutes, 27 seconds dispersements for Q4 FY26 was the highest quarterly disb dispersement by 2:33 2 minutes, 33 seconds HDB growing 11% as compared to Q3 of FY26. 2:40 2 minutes, 40 seconds Fourth book growth came in at 3.4% in the current current quarter along with a marked improvement in asset quality 2:47 2 minutes, 47 seconds which sets the trajectory for our growth plans. We maintained the granularity of our 100% retail loan book with average 2:55 2 minutes, 55 seconds exposure per customer of about 1.66 lakhs. 2:59 2 minutes, 59 seconds Uh robust operational execution with our pre-provisioning operating profit growing by 7.8% and FAT growing by 16.6% 6% 3:08 3 minutes, 8 seconds sequentially. On annual basis, our uh pre-provisioning operating profit group about 27%. 3:16 3 minutes, 16 seconds On the credits and collections front, we had a significant improvement in asset quality across all products. Gross NPA, which we also report as gross stage 3:25 3 minutes, 25 seconds three. We don't report two different numbers reduced to 2.44% as at March 31st, 2026 versus 2.81 as at December 31st, 2025. 3:36 3 minutes, 36 seconds Coming to the macros, robust rural demand, sustained momentum in domestic economic activity and supportive policy measures augur well for the economy. 3:47 3 minutes, 47 seconds Regulator kept policy rates unchanged and maintained a neutral stance. Real GDP growth showed resilience and inflation stayed benign. While GDP 3:56 3 minutes, 56 seconds growth projections remain largely steady, the West Asia conflict and probable weather disruptions from El Nino may have an impact on growth and inflation. 4:06 4 minutes, 6 seconds Quick restoration of supply chains and timely conclusion of the conf conflict remain a key monitorable. We continue to 4:13 4 minutes, 13 seconds track the rapidly evolving global situation and its potential impact on our business. Coming to the vertical wise commentary, as you may recollect, 4:22 4 minutes, 22 seconds we run our business along three major business lines. On enterprise lending, Q4 dispersement for this segment grew by 4:29 4 minutes, 29 seconds about 28% sequentially and 15.4% year-on-year. Our LP plus EPL book which is our modage business grew by 3.8% 4:38 4 minutes, 38 seconds sequentially on the back of a 36% disbbursement growth. Our gold loan book doubled in FY26 with 587.8% 4:48 4 minutes, 48 seconds growth in disbbursement quarteron quarter. We expect positive momentum on our unsecured business loans going forward where we have seen significant improvement in asset quality. 4:58 4 minutes, 58 seconds Collections and portfolio quality for this verticular continue to improve. 5:03 5 minutes, 3 seconds Asset finance commercial vehicle and construction equipment book showed moderate growth in Q4. We saw continued improvement in asset quality in our 5:10 5 minutes, 10 seconds commercial vehicle business with both early buckets and stage three improving. 5:15 5 minutes, 15 seconds Our focused approach within CV and C segment backed by our extensive OC OEM partnerships and dealership networks 5:24 5 minutes, 24 seconds positions us for strong growth in the coming quarters. On consumer finance booked for this segment grew by 5.3% quarteron quarter and 19.4% yearonear. 5:35 5 minutes, 35 seconds This was led by consumer durables followed by auto loans. We expect momentum to continue in the segment on the back of sustained demand for consumer durables, auto loans and two 5:44 5 minutes, 44 seconds wheelers. Overall, our customized suit of products enables us to provide credit to aspirational India. Our distribution touch points and digital sourcing 5:52 5 minutes, 52 seconds channels ensures our reach across the country. Focus on digital sourcing channel through our DIY platform which is do-it-yourself platform helped us 6:00 6 minutes multiply dispersements by about 2.2x 2x in FY26 and we expect this momentum to continue. 6:08 6 minutes, 8 seconds Made significant investments in our tech technology capabilities including AI which have started yielding positive results for 6:17 6 minutes, 17 seconds our customers across our marketing customer service and collections functions. One of our initial implementation is in collections through 6:25 6 minutes, 25 seconds a scalable botbased intervention for engaging customers who are in the early buckets. In Q4 over 50% of our customers 6:34 6 minutes, 34 seconds who needed a nudge were assigned a bot which resulted in improved collection efficiency of about 25 basis points in the early buckets. As I said this is 6:41 6 minutes, 41 seconds still a early stage and we see a lot of improvement going forward. On the customer service front we imple implemented in-house SLM powered auto 6:50 6 minutes, 50 seconds sorting and saw 20% reduction in response times ensuring faster resolution of customer queries. We 6:57 6 minutes, 57 seconds currently running five large AI powered business initiatives across the organization. We'll continue to invest in technology to drive efficiencies. 7:05 7 minutes, 5 seconds With that, looking forward to a healthy FY27 with a strong growth trajectory. I will now hand over to Jay Kumar for an update on the financials. 7:14 7 minutes, 14 seconds Thank you Romesh. Moving on to the financial performance for the quarter. 7:19 7 minutes, 19 seconds Customer franchise grew by 22.9 million with an increase grew two sorry 22.9 7:26 7 minutes, 26 seconds million with an increase of 4.3% sequentially and 19.7% yearonear 7:33 7 minutes, 33 seconds gross loan book as on March 31 2026 stood at 1 lak 18,493 7:40 7 minutes, 40 seconds crores growing 3.4% 4% sequentially and 10.9% YI 7:47 7 minutes, 47 seconds secured loans comprise 74% of the gross loan book dispersements for the quarter 7:53 7 minutes, 53 seconds ended March 31 2026 was 19,922 crores up 11.2% 2% sequentially an 8:02 8 minutes, 2 seconds all-time high as Romesh mentioned for HDB branch count stood at 1730 spread across 8:10 8 minutes, 10 seconds 1161 cities and towns net interest income for the quarter was 2399 crores 8:18 8 minutes, 18 seconds an increase of 5% Q on Q and 21.6% 6% Y on Y. Net interest income for the year 8:26 8 minutes, 26 seconds ended March 31, 2026 was 8968 crores, an increase of 20.4% Y on Y. 8:36 8 minutes, 36 seconds Net interest margin for Q4 FI26 was 8.23% versus 8.09% 8:44 8 minutes, 44 seconds in Q3 FI26 and 7.55% in Q4 FI25. 8:51 8 minutes, 51 seconds Net interest margin for the year ended March 31, 2026 was 7.96% 8:58 8 minutes, 58 seconds versus 7.56 for the year ended March 31, 2025. 9:04 9 minutes, 4 seconds Cost to income ratio for our lending business was 39.5% 9:10 9 minutes, 10 seconds in Q4 FI26 as compared to 41.6 in Q3 FI26. If we were to compare it with um 9:19 9 minutes, 19 seconds you know after labor cost that was 39.5 so it's largely remained flat and 42.9% in Q4 FI25. 9:29 9 minutes, 29 seconds The ratio for the year ended March 31 2026 was at 41.1% versus 42.8 in the prior year. 9:40 9 minutes, 40 seconds Cost to assets for the year was at 3.8%. 9:45 9 minutes, 45 seconds PPOP which is pre-provisioning operating profit for the quarter was at 1675 crores as against 9:53 9 minutes, 53 seconds 1555 crores for the prior quarter. A growth of 7.8%. 10:00 10 minutes Credit cost for the quarter stood at 2.35% as against 2.52% for the prior quarter. 10:08 10 minutes, 8 seconds Profit after tax for the quarter ended March 31, 2026 was 751 crores as again 10:15 10 minutes, 15 seconds 644 cr for the prior quarter a growth of 16.6%. 10:22 10 minutes, 22 seconds Gross stage 3 as at March 31 2026 was 2.44% as against 2.81% as at March 31 2025. 10:34 10 minutes, 34 seconds Provision coverage on stage three stood at 55.53%. 10:41 10 minutes, 41 seconds ROA on an annualized basis for the quarter ended March 31, 2026 10:47 10 minutes, 47 seconds stood at 2.48% as compared to 2.19% earlier. 10:57 10 minutes, 57 seconds ROE on an annualized basis for the quarter ended March 31, 2026 stood at 14.83% versus for the year FI26 at 13.94%. 11:10 11 minutes, 10 seconds Early earnings per share for the quarter was 9 rupees and the book value stood at 248.9 11:18 11 minutes, 18 seconds rupees. Our borrowing mix remains well diversified with a positive cumulative mismatch across all buckets up to 5 11:27 11 minutes, 27 seconds years. We remain well well capitalized with the total capital adequacy at 21.4% as at March 31 2026. 11:38 11 minutes, 38 seconds We can now open up the open up for Q&A and Ruja we'll hand it over to you um to open up the Q&A. Thank you. 11:48 11 minutes, 48 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 11:56 11 minutes, 56 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please limit your questions 12:04 12 minutes, 4 seconds to two per participant and to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 12:26 12 minutes, 26 seconds The first question is from the line of Abhijett Braval from Motila Losal. Please go ahead. 12:32 12 minutes, 32 seconds Yeah. Uh good evening sir. Thank you for taking my question and first of all congratulations on a on a good quarter. 12:38 12 minutes, 38 seconds That's exactly where my question is. uh that while I think most of us know that the remote 12:46 12 minutes, 46 seconds I'm so sorry to interrupt you Mr. Braval but can you please check your audio quality? It is sounding little muffled sir. 12:54 12 minutes, 54 seconds Is it better now? 12:56 12 minutes, 56 seconds Yes please go ahead. Yeah. So, so I mean I said I mean congratulations on on a good quarter and that's I think where my 13:04 13 minutes, 4 seconds question is. uh we I kind of almost all of us know that we did not see any impact of the war in the month of March 13:13 13 minutes, 13 seconds but if you could just help us understand uh what is it that you started seeing maybe in the last week 10 days of March 13:21 13 minutes, 21 seconds what is it that you've seen in the first 15 days of April uh because I think I remember uh I think sir mentioned that 13:29 13 minutes, 29 seconds quick resolution of the conflict and restoration of supply chain will be So are we seeing supply chain 13:37 13 minutes, 37 seconds disruptions? Are we seeing some impact on CD operators particularly in your vehicle 13:45 13 minutes, 45 seconds business? Uh that is the first question that I wanted to understand. 13:52 13 minutes, 52 seconds Thanks Aijit. Um let me cover off as a whole. I think it's important to look at it holistically. I think CV is a portion 13:59 13 minutes, 59 seconds of our business. Um so overall March while there have been you know talk in 14:06 14 minutes, 6 seconds the market I think March for us um went well and that's clearly reflected in our results. Um there has been clearly a 14:15 14 minutes, 15 seconds concern and you know we called it out in our opening address. Romesh mentioned it that the West Asia conflict remains a key monitorable. Um I believe the 14:24 14 minutes, 24 seconds government is doing a reasonable amount of work to make sure that while there are pressures um you know all across 14:32 14 minutes, 32 seconds they're trying to keep things uh you know as um you know as as normal as possible and um 14:41 14 minutes, 41 seconds I think at this point in time the way we would call it is that I think it remains a key monitorable um there are certain 14:49 14 minutes, 49 seconds challenges but we remain focused on our growth from here on and over the next 15 14:56 14 minutes, 56 seconds 20 days as the situation develops we will keep monitoring it closely. 15:04 15 minutes, 4 seconds And then so the second question I have is uh while you spoke a little bit about the C ecosystem um on on the same side 15:13 15 minutes, 13 seconds we also have this MSM in the theme ecosystem which we all believe and keep hearing and keep reading. uh could be 15:22 15 minutes, 22 seconds one segment which could be vulnerable if there are uh kind of uh supply chain disruptions if the earnings of these MSN 15:31 15 minutes, 31 seconds customers get impacted because of the uh ongoing conflict. So I mean there any thoughts and and the related question is 15:39 15 minutes, 39 seconds that uh if if at all you are seeing anything already in the month of April was there any deliberation around 15:47 15 minutes, 47 seconds building some uh contingency provisions or or some blocker provision. 15:54 15 minutes, 54 seconds So the way I would look at it is um the results are obviously as at March and you know we do continuously discuss as a 16:01 16 minutes, 1 second business because our business is pure retail right. So at this point in time we haven't seen any specific level two 16:09 16 minutes, 9 seconds level three uh you know uh impact coming through is the way I would put it. Um 16:16 16 minutes, 16 seconds again I will at the cost of repetition you know the situation remains a key monitorable for us as and when things 16:24 16 minutes, 24 seconds develop I think we will do the needful um the one good thing is that you know 16:31 16 minutes, 31 seconds across the years I think we remain very strong in terms of making sure we're touch points on the ground um across our 16:39 16 minutes, 39 seconds lab business across MSME business we've called it out in the past that we had challenges we're over it right we called it out last quarter we are completely 16:48 16 minutes, 48 seconds over it as at the March quarter and the whole focus now you know on the ground across enterprise lending business 16:55 16 minutes, 55 seconds across CV and across consumer is growth so that's the way I would put it and that's the way we would like you know 17:02 17 minutes, 2 seconds our stakeholders our people our investors to you know work with us on the growth agenda obviously if things change globally and things change on the 17:11 17 minutes, 11 seconds ground and there's a level two level three impact uh be well positioned to uh how should I put it deal with it 17:20 17 minutes, 20 seconds lot and just a follow up on what you just answered um I mean if I look at this year I think we've reported around 17:27 17 minutes, 27 seconds 11% kind of a year growth u in our book and we've seen momentum build in the 17:34 17 minutes, 34 seconds second half of this fiscal year and like you mentioned right the focus is on growth uh so I mean how are we going to 17:42 17 minutes, 42 seconds approach FI7 again let's keep this this conflict aside for a bit but in it to become much more peaceful than than what 17:51 17 minutes, 51 seconds it is today what is it how is it we are going to approach growth in the coming discuss that's all from my side thank 17:58 17 minutes, 58 seconds you so much thank you so um the way I would look at it Abijit is that we've always called 18:06 18 minutes, 6 seconds out that in the medium term over the three-year agenda that we have we look at a nominal plus six 6 to 7% growth 18:14 18 minutes, 14 seconds and we're very focused on making sure we deliver to that. 18:19 18 minutes, 19 seconds Yes, that answers my question. Thank you so much and I appreciate the very best. Thank you. 18:27 18 minutes, 27 seconds Thank you. Ladies and and gentlemen, we would request you to please limit your questions to two per participant. The next question is from the line of Renish from ICACI. Please go ahead. 18:38 18 minutes, 38 seconds Uh yeah, hi sir. Uh congratulations on a good set of numbers. Uh sir just uh you know couple of things here maybe slightly repetitive but uh please bear 18:47 18 minutes, 47 seconds with me. Uh so on the growth front right I mean if you look at FI26 as a whole uh you know bearing uh last uh maybe 45 18:56 18 minutes, 56 seconds days or uh you know 2 months uh we are still on the lower side which is uh you know sub 10%. Obviously our growth 19:05 19 minutes, 5 seconds aspiration has always been nominal plus 6 7%. And now as you mentioned in your opening remarks as well that you know 19:12 19 minutes, 12 seconds the stress in CV or maybe unsecured PL is largely over. Uh so how confident we 19:19 19 minutes, 19 seconds are uh you know of achieving those aspirational growth numbers in 2728. 19:27 19 minutes, 27 seconds Okay. So I'll just put numbers into perspective. to renish our Q2 dispersements were 15599 19:34 19 minutes, 34 seconds and it's on slide 22 in case if anybody wants to refer to um Q3 was 17917 19:41 19 minutes, 41 seconds Q4 we exited at 19922 right and the clear aspiration from here 19:47 19 minutes, 47 seconds on and the goal and the plan is to start delivering on this base and forward 19:55 19 minutes, 55 seconds right to be able to achieve our numbers and we have plans in place. We've started April with the same level of 20:03 20 minutes, 3 seconds vigor, the same level of conviction within our teams to be able to deliver on the growth agenda that we have. The first step obviously in there is 20:12 20 minutes, 12 seconds dispersements. Um some amount of math will play in in terms of you know how much disbbursement relates into how much 20:18 20 minutes, 18 seconds book. Um what I would like the investor community to read into to begin with is the disbbursements because as that 20:26 20 minutes, 26 seconds starts growing and that starts resulting in the positive book you'll automatically see the movement towards what we want to deliver. 20:35 20 minutes, 35 seconds Okay. So we are trying to let us say highlight that uh you know from Q1 onwards uh the improvement trajectory 20:43 20 minutes, 43 seconds which we you know we are witnessing in second of 26 I believe will continue and that will obviously lead to the kind of growth we are looking for. I mean is that is that the fair assumption? 20:53 20 minutes, 53 seconds Yes. 20:55 20 minutes, 55 seconds And just just to make sure we're on the same page Q1 generally is slower. So I would compare Q1 to Q1 obviously not Q1 21:03 21 minutes, 3 seconds to Q4 and say there is a you know 10% jump on Q4 to Q1 but obviously there will be good amount of positivity that you'll 21:11 21 minutes, 11 seconds see uh or we expect to see from ourselves as well. 21:16 21 minutes, 16 seconds Got it. Got it. And uh secondly sir uh I was just uh you know looking at the repayment rates and as per my 21:23 21 minutes, 23 seconds calculation in interlex uh lending you know my repayment rate has jumped to 11% which used to be average 9% on quarterly 21:31 21 minutes, 31 seconds basis. So just wanted to check I mean is that uh due to higher BT out in lab or is there a product mix change within 21:40 21 minutes, 40 seconds enterprise lending which is leading to a higher repayment rate. 21:44 21 minutes, 44 seconds So maybe more a product mix thing. Today we haven't seen anything odd in the month of March than what we see generally in March for lap EDL. Yeah. 21:54 21 minutes, 54 seconds The other thing as we've said uh and in the past and we continue to focus on is the risk adjusted you know um portfolio 22:03 22 minutes, 3 seconds that we look at right and if you look at growth right the enterprise lending business genuinely 22:12 22 minutes, 12 seconds grew at you know 20% plus right called it out in terms of the enterprise lending business growth and that's a very positive thing right so Q4 22:20 22 minutes, 20 seconds disbbursements grew 27.9% sequentially Right. And that's a very powerful statement for us in terms of our ability 22:28 22 minutes, 28 seconds now to pump things in and move forward from here. 22:32 22 minutes, 32 seconds I'm sorry to interrupt. May we request Mr. Res to please rejoin the queue. Okay. Yeah, sure. Thank you, G. Thank you. 22:40 22 minutes, 40 seconds Thank you. The next question is from the line of Sha from Capital. Please go ahead. 22:47 22 minutes, 47 seconds Yeah. Hi G. Uh first of all, congratulations on good set of numbers. 22:51 22 minutes, 51 seconds uh first is uh with regards to the I would say the cost of funds and the margins. So in Janu you had mentioned 23:00 23 minutes that now incrementally there is uh not meaningful scope and room for cost of fund reduction. So just first wanted to understand uh what has uh resulted in 23:09 23 minutes, 9 seconds this 35 bits improvement on a sequential basis and more importantly how should we look at it uh I would say going ahead 23:16 23 minutes, 16 seconds especially given uh the way the bond yields are and even if say the war resolves some of that impact is going to 23:23 23 minutes, 23 seconds be more lasting uh at an economy level so how should we now look at it incrementally so that's my first question I'll come for the second 23:31 23 minutes, 31 seconds question then after this okay so the way to look at NIMS and let me start holistically first um so if you 23:39 23 minutes, 39 seconds look at NIMS one of the biggest things we priced ourselves over the last three quarters that we've been speaking is on holding to our rates right and that's 23:48 23 minutes, 48 seconds continued in this quarter as well where across every single product that you look at in our portfolio we have made 23:56 23 minutes, 56 seconds sure as a business as a team we have held on to our rates so very clear on making sure the risk adjusted return that we 24:04 24 minutes, 4 seconds um we do well. So there has been a slight reduction of maybe 78 bips um you know on the Eid side but that's purely 24:12 24 minutes, 12 seconds on account of product mix. So you'd see that disbbursements on the um unsecured book hasn't grown as much and that's 24:21 24 minutes, 21 seconds something as I mentioned earlier very focused on making sure that grows once that growth comes back the yield should come back and make sure we stay within 24:30 24 minutes, 30 seconds that 14 plus range. So that is step number one. Um the second big item on 24:36 24 minutes, 36 seconds the um borrowing side that you mentioned um as we've been speaking we said that you know we were confident of our 24:44 24 minutes, 44 seconds borrowing costs and we continue to be confident. What we've done is we made sure on the borrowing side we have uh 24:53 24 minutes, 53 seconds you know use certain strategies on borrowing which help us reduce cost. We have made sure we worked with our 24:59 24 minutes, 59 seconds partners to keep costs at a bare minimum and uh there has been some advantage that we had called out earlier that we 25:08 25 minutes, 8 seconds don't have any more lowc cost borrowings um which are to reset. We finished all of that the last branch almost finished in October November 2025. 25:20 25 minutes, 20 seconds What that's allowed us to do is that if there were borrowings, you know, at 8% plus or even a 7.5, we've managed to 25:30 25 minutes, 30 seconds further work on that and make sure um we tighten the ability on our side um to make sure that the funds we get into the 25:39 25 minutes, 39 seconds company are at the best rates to enable business to go out and lend and lend to the right quality customers to ensure we 25:46 25 minutes, 46 seconds get the we get a good risk adjusted return. So um pretty much sustained that viral and um some of these pieces you 25:55 25 minutes, 55 seconds know it's not one particular strategy it's a combination of various things that we've been working on for the last few years falling in place working 26:04 26 minutes, 4 seconds through it um strategic pieces coming in and making sure it helps us you know come to a cost of borrowing 26:12 26 minutes, 12 seconds which we're good at. Um so that's been the cookie focus. Um in the market uh has you know borrowing costs gone up over the last 1 month? Answer is yes. 26:24 26 minutes, 24 seconds The one thing you will see in our borrowing mix is that we still have very low CPS and that's dry powder that we've 26:32 26 minutes, 32 seconds kept with ourselves. We still have a very healthy mix in terms of bank loans. 26:39 26 minutes, 39 seconds So it has not even crossed 50% today. Um so we're making sure that we are very careful with how we borrow. Don't let 26:48 26 minutes, 48 seconds our mix go off and uh make sure that this is sustainable. 26:55 26 minutes, 55 seconds Got it. So you expect this cost of funds to broadly sustain even if where we are the broad market rates are. 27:03 27 minutes, 3 seconds I I would like to think at least for the current quarter we're good, right? Um beyond that obviously nobody knows what can happen tomorrow morning but 27:12 27 minutes, 12 seconds everything remaining equal I think we'll be able to sustain it in the near future for sure. 27:18 27 minutes, 18 seconds Got it. And my second question uh Jay uh was with regards to I would say on growth and I know uh a couple of questions you addressed that uh and of 27:27 27 minutes, 27 seconds course fully understand that it is first going to reflect on disbburusment and then gradually on book but within that when I look at the mix right so first of 27:34 27 minutes, 34 seconds all on a y basis the disbburusment growth uh is 13%. Of course there is a seasonality just as from 4Q to 1Q. 27:42 27 minutes, 42 seconds Similarly from 3Q to 4Q also there is a seasonality right. Uh so on a Y basis the disbburusment growth is still 13%. 27:49 27 minutes, 49 seconds Uh a first of all uh do you see this picking up to say at least say in the corridor of 18 to 20%. Uh the reason why 27:57 27 minutes, 57 seconds I say this is that um the mix of it uh the share of or at least the growth of asset finance which is typically a longer 10-hour book is actually reducing 28:06 28 minutes, 6 seconds and whereas uh the enterprise and consumer finance is actually driving this disbbursement growth. So for our AUM growth to kind of say materially 28:13 28 minutes, 13 seconds pick up and eventually at least show up say over a period of time we would need this disbbursement growth to be at least 18 to 20%. Do you see visibility of that? 28:22 28 minutes, 22 seconds Yeah. So let me cover a few aspects today. When you look at our enterprise lending and um asset finance and you 28:31 28 minutes, 31 seconds know the consumer side. So in enterprise lending we have LAP which is a longer tenure product. In consumer we have 28:38 28 minutes, 38 seconds two-wheeler and auto loans which are relatively longer period compared to a consumer product. Plus in the asset finance space as well, we've discussed 28:47 28 minutes, 47 seconds um you know on multiple occasions over the last quarter that we're very focused on making sure we grow our used business and we have a lot of plans in place. 28:57 28 minutes, 57 seconds We've done a lot of homework there and we're relatively confident that that business also we will grow well. So 29:04 29 minutes, 4 seconds across the board in areas that we wish to grow um that level of confidence is there today. Um to your second question, 29:12 29 minutes, 12 seconds I'm very hopeful on a year-on-year basis, the number that you mentioned is something which we will work towards and um if everything remains equal, 29:21 29 minutes, 21 seconds hopefully we'll do well on that number as well. 29:26 29 minutes, 26 seconds Right. And can I just squeeze in last question? Okay. 29:32 29 minutes, 32 seconds Uh so uh basically uh on the asset quality front uh agreed there has been I would say very marked improvement uh in 29:39 29 minutes, 39 seconds 4Q just wanted to uh cross check on one piece there has been a sharp 30 bits uh increase on stage one PCR so is this 29:47 29 minutes, 47 seconds just a annual refresh or uh there is something else uh over here which has been no so we've discussed in our previous 29:55 29 minutes, 55 seconds interactions that you know given that we are a very retail lender with a you know highly granular book a provision is 30:03 30 minutes, 3 seconds determined you know or driven largely by a product mix right so it's very granular it's refreshed every quarter 30:10 30 minutes, 10 seconds right there's nothing called one time um we identify homogeneous asset pools for calculation of ECL which is driven by 30:16 30 minutes, 16 seconds PDLgd of those pools and you know the segment subsegment as applicable one of the things our provisioning methodology 30:24 30 minutes, 24 seconds takes into account is you know the company's historical credit loss experience current economic conditions forwardlooking information and scenario 30:33 30 minutes, 33 seconds analysis that's built into it in terms of the methodology and that more or less comes out. So there's nothing specific that I would want to highlight. Um but 30:42 30 minutes, 42 seconds we're very positioned in the medium term in terms of you know the base at which we wish to operate on the uh credit cost side. 30:53 30 minutes, 53 seconds Got it. So basically this partially does take into account the current scenario that we are in. 30:59 30 minutes, 59 seconds Yeah. Now the methodology makes sure that you know if there is any uh adverse thing to an extent it would you know take care of those things. 31:08 31 minutes, 8 seconds Got it. Sorry to interrupt. May we request you. 31:10 31 minutes, 10 seconds Thank you. The next question is from the line of Shria Shabbani from Nura. Please go ahead. 31:17 31 minutes, 17 seconds Yeah thank you for the opportunity. Uh I had a question around uh the um uh vertical wise asset quality that you 31:25 31 minutes, 25 seconds have shared. Just wanted to highlight uh we only have data for three quarters but just wanted to understand first is on the asset finance bit uh it seems to 31:34 31 minutes, 34 seconds have moved from 3 point this gross stage three moved from about 3.1% in fourth quarter of 25 to 4.3% last quarter and 31:42 31 minutes, 42 seconds now reversed back to 3.8. So this is quite dramatic an improvement uh while even the deterioration was quite rapid. 31:50 31 minutes, 50 seconds Um can you help us understand what exactly is driving this much faster recovery trends that we are seeing over 31:58 31 minutes, 58 seconds here? Is it uh simply a function of uh market environment improving or anything that we were talking about our 32:05 32 minutes, 5 seconds technology-led uh collection team AIled collection bots making it easier for us or anything that you can highlight on 32:12 32 minutes, 12 seconds that front that will be useful on the enterprise. Similarly on the enterprise lending in the gross stage um uh three 32:19 32 minutes, 19 seconds and the PCR while we called out the stress in this book in the last couple of quarters uh the PCR here used to be 32:26 32 minutes, 26 seconds much higher at about 57 58 57% or so last year um we've brought this down so it seems a little contrary we thought 32:35 32 minutes, 35 seconds that I mean I mean there would be a little bit more provisioning required over here for this book to clean up so just some understanding around the 32:43 32 minutes, 43 seconds provisioning for the enterprise lending book. Thank you. 32:46 32 minutes, 46 seconds Sure. So um Sh let me take the opportunity to look at make it a little more holistically and give you both your answers as well. So if you look at how 32:54 32 minutes, 54 seconds our stage 3 has operated um an important piece is enterprise lending moved from 1.82 to 1.58. It was 1.79 last year. 33:04 33 minutes, 4 seconds Right? So there's been a marked improvement there. And across the board as I mentioned a lot of our calculation happens through PDLgd and you know what 33:13 33 minutes, 13 seconds the underlying book mix is. So there's not much that we go in and check as to you know what account falls under A or B 33:20 33 minutes, 20 seconds and we do some manual adjustments. We don't do that. It comes in a very automated format. In fact I would like to take you know give credit to our you 33:28 33 minutes, 28 seconds know IT team and a finance team that they've actually fully automated ECL this quarter. So it actually comes out from the system. 33:36 33 minutes, 36 seconds Now in in doing that obviously there will be certain you know loans at a particular stage with different kinds of you know PDLgd in different subroducts. 33:45 33 minutes, 45 seconds So it's purely an outcome. We don't believe there is anything more that we need to do. Um I hope I never have to 33:53 33 minutes, 53 seconds bite my tongue on this one but there's a lot of work which has gone in to make sure that we're comfortable with the book in enterprise lending and be able 34:02 34 minutes, 2 seconds to grow from here on with good qualities. So that's the first one on asset finance. Um as you rightly 34:09 34 minutes, 9 seconds mentioned it has moved from 3.14 to 4.3 to a 3.79. 34:15 34 minutes, 15 seconds Now as you would remember when we called it out in Q2 and Q3 there was a challenge which the business got hit by 34:23 34 minutes, 23 seconds and the recovery has been slightly K-shaped. 34:27 34 minutes, 27 seconds And what do I mean by that? the accounts that went and got challenged in at the end of Q1 their recovery hasn't been 34:36 34 minutes, 36 seconds very great. So what we've done and if you I can just share some insights. What we've done is we've made sure we push 34:44 34 minutes, 44 seconds hard on that recovery to reduce stage three and that's where you know the business and collections team together have done well but at the same time 34:52 34 minutes, 52 seconds they've worked very hard to make sure flow forwards reduce and that is a key thing you know from a future standpoint which gives us the confidence as Romesh 35:00 35 minutes was mentioning from a growth standpoint to be able to grow from here on because what we're onboarding now is good so you 35:08 35 minutes, 8 seconds will see that stage three come down at the same time you'll see the health of the overall you know book sustain as well right and finally on consumer 35:17 35 minutes, 17 seconds finance there also you see you know good improvement from um Q3 while you know 35:24 35 minutes, 24 seconds from last March there has been a slight uptick so that 2.26 is 2.44 but there 35:32 35 minutes, 32 seconds are lots of strategies in there that we have today to be able to work around this number and hopefully pull it down or maybe stabilize it over the coming quarters. 35:41 35 minutes, 41 seconds Yeah. Right. Just to follow up on that in the asset finance you mentioned there's a K-shaped recovery. So the accounts which were challenged in one 35:48 35 minutes, 48 seconds first quarter there it has not been great but the accounts which probably slipped in the last quarter and all they are they are recovering at a much faster pace. Is that the way to think about it? 35:58 35 minutes, 58 seconds Yes in one word. All right. All right. Okay. Thank you. 36:02 36 minutes, 2 seconds These answer my question. Thank you so much. 36:07 36 minutes, 7 seconds Thank you. The next question is from the line of Sonel from Asian market securities. Please go ahead. 36:14 36 minutes, 14 seconds Yeah, thanks for the uh opportunity. Uh just you know has the questions from the dispersement side. Uh so if I look at enterprise lending you know there has been about 27 28% growth on a QC basis. 36:26 36 minutes, 26 seconds So what really changed you know in between these two quarters what is it that the company did you know which led to such high growth on a QC basis. Um 36:34 36 minutes, 34 seconds second was on the asset finance. uh so if I look at the full year number uh there has been a decline of 3% dispersion. 36:41 36 minutes, 41 seconds uh so uh you know just wanted to understand I mean uh was this a conscious call uh just to focus on the credit uh you know quality uh that you 36:50 36 minutes, 50 seconds know you've allowed uh to grow or probably you've declined this book a bit uh you know on in terms of dispersements um also I mean you've been talking about 36:59 36 minutes, 59 seconds you know 50/50 use kind of a mix within asset finance um so uh you know going ahead I mean how how should we look at 37:07 37 minutes, 7 seconds the growth uh especially in in the asset finance segment and maybe unless you could call out in next one or two years 37:13 37 minutes, 13 seconds how should your a so two parts I'll go through e first on 37:21 37 minutes, 21 seconds the enterprise lending segment we had called it out you know in Q1 that we had um strategically or tactically looked at 37:29 37 minutes, 29 seconds focusing on making sure the asset quality comes back especially within the business loan side um by Q2 we were 37:36 37 minutes, 36 seconds relatively confident in Q3 onwards we've really started pushing on the growth front. Um that comes that's come about 37:44 37 minutes, 44 seconds on the secured business within um you know enterprise lending in a good way. 37:50 37 minutes, 50 seconds Um on the unsecured business we have the house in order in terms of the back end in terms of the credit engine in terms 37:58 37 minutes, 58 seconds of the criteria that we look at. Now the whole focus is just one making sure our guys get onto the ground with the confidence that the risk adjusted 38:06 38 minutes, 6 seconds pricing that we're talking about go to the right customer for the needs that they have support them in their growth 38:13 38 minutes, 13 seconds and ensure HDB grows as well. So that's the focus really on enterprise lending on the asset finance side. Um you're 38:22 38 minutes, 22 seconds right we've spoken about you know reaching towards a 50/50 over a 4-year period. Um and that's something which I 38:29 38 minutes, 29 seconds called out earlier as well that we want to really grow our used business. So on the new side we will grow at industry 38:37 38 minutes, 37 seconds rates. On the used side we're going to push more. We are much smaller today than a lot of you know um established 38:45 38 minutes, 45 seconds players in the market. And with the kind of network that we have with the kind of teams that we have I think the focus is really going to help us push that hard. 38:55 38 minutes, 55 seconds um it is a key deliverable for us. We will be watching it closely and I'm sure in 3 months time when we speak again um 39:03 39 minutes, 3 seconds this is something that I'm very hopeful I am able to deliver good amount of positivity on that front a mix. 39:15 39 minutes, 15 seconds So the AUM mix today is 38 38 24. Um I think over a period of time it could be 39:22 39 minutes, 22 seconds 38 37 25 or so in the short term. So um every single business that we have remains a key focus area for us. There is nothing that we're deprioritizing. 39:33 39 minutes, 33 seconds We're just making sure that as we grow from here on and we double in size over the coming years. The risk adjusted 39:40 39 minutes, 40 seconds portfolio is a conscious decision and not something that we have to worry about you know at some point in time. 39:52 39 minutes, 52 seconds Sorry to interrupt. May I request you please rejoin the queue. Sure. 39:57 39 minutes, 57 seconds Thank you. The next question is from the line of Shabban Shamishra from Philip Capital. Please go ahead. 40:04 40 minutes, 4 seconds Uh hi J. Hi Romesh. Good evening. Uh sorry I joined this call a bit late. Uh if you can just uh reiterate the growth 40:12 40 minutes, 12 seconds guidance both for dispersement and AUM uh the credit cost guidance and the min guidance for FY27. 40:20 40 minutes, 20 seconds Uh just one data point which I wanted to understand uh what was the total quantum of write off for 20 entire year 26 and in the fourth quarter 26. 40:33 40 minutes, 33 seconds Yeah. So, so Subancho first thing we don't provide guidance on specific numbers um but I'll cover it in a manner 40:40 40 minutes, 40 seconds of you know what I have been speaking with all investors over the last few quarters. So on the growth side, we're looking towards a medium-term trajectory 40:49 40 minutes, 49 seconds kagger wise nominal plus 6 to 7 and at this point in time um you will see that first coming through dispersements 40:58 40 minutes, 58 seconds um and then obviously on the book front it will reflect as such. On the credit cost side, um we've discussed over the 41:05 41 minutes, 5 seconds last couple of quarters that we wished for it to moderate in the range of 2.3% plus minus and at this point in time, we 41:14 41 minutes, 14 seconds believe that going forward, we should be able to um work with that number for the medium term. On the NIM side, we've 41:23 41 minutes, 23 seconds guided or we've spoken and depending on you know how the market goes of making sure that we maintain an 8% plus today 41:32 41 minutes, 32 seconds it is 8.2. Um the businesses have been you know very focused in making sure at no point in time we drop yields. So 41:39 41 minutes, 39 seconds that's really helping in making sure it stays up. On the borrowing side again the teams have done extremely well in making sure our strategies work. So 41:47 41 minutes, 47 seconds we're at 8.2 to today but an 8 plus is something which we would want to be at every point in time over the coming uh 41:55 41 minutes, 55 seconds period. So that's something which you know when we compare it to last year we had dipped at a point in time going forward we will make sure that we're 42:03 42 minutes, 3 seconds consistent in an 8 plus nim the quantum of write off in this quarter 42:11 42 minutes, 11 seconds and we are 26 so we'll we'll pick it up it'll be there in the financials I think um we just pick it up offline in terms of the 42:19 42 minutes, 19 seconds number as such yeah okay if I can just in one last question the growth in opex how much are we 42:26 42 minutes, 26 seconds expecting in 27 so my OPEX today is at you know whether 42:33 42 minutes, 33 seconds you count it as a 39.5 or a 3.7 3.8 state I think we will range around 3.7 42:41 42 minutes, 41 seconds um Romesh mentioned about a few AI initiatives that we're running and we're very keen that we continue to invest in the business from a growth standpoint at 42:50 42 minutes, 50 seconds the same time you know our chief credit officer is very keen to make sure that on the collection side some of these initiatives also help us you know reach 42:58 42 minutes, 58 seconds out to customers better in making sure we nudge them in the right way for you know money to flow back in faster Right. 43:08 43 minutes, 8 seconds So similar. Thank you so much. I'm so glad. Thank you. 43:15 43 minutes, 15 seconds Ladies and gentlemen, to ask a question, please press star and one. 43:22 43 minutes, 22 seconds The next question is from the line of Sri Paloshi from Aquirus. Please go ahead. 43:27 43 minutes, 27 seconds Thanks sir. Thank you for giving me the opportunity and comments on a good set of numbers. Uh my question was on uh margin front. So we've been trying to 43:37 43 minutes, 37 seconds let's say increase the use segment within CV FE as well as our uh share of consumer loans is also marginally 43:44 43 minutes, 44 seconds increasing and and we are aiming at further increasing it. Uh whereas on the cost of fund side you highlighted that we would be able to maintain uh it at 43:52 43 minutes, 52 seconds current levels for for at least medium-term. If that happens then what is the kind of let's say margin that can 43:59 43 minutes, 59 seconds ex like that we can reach to because if these levels play out then truly is it possible to do maybe on a sustainable basis at an 8.2% margins. 44:12 44 minutes, 12 seconds So first of all thank you and I'm very hopeful that what you've asked is what I can deliver. Um just to clarify what I 44:20 44 minutes, 20 seconds said is at least for the current quarter right um we should relatively be good on our cost of borrowing um and there is a 44:29 44 minutes, 29 seconds lot of volatility today Shipal so what we were borrowing at you know probably 3 months ago and today has been slightly different um I'm hopeful that going 44:38 44 minutes, 38 seconds forward we will keep it at higher levels but an 8 plus is a non-negotiable the 44:45 44 minutes, 45 seconds way we treat it internally today right And that is something you know when we make our 2-year, 3 year, 5 year plans 44:53 44 minutes, 53 seconds that is as I said a complete non-negotiable at every point in time like any good business we will maximize 45:01 45 minutes, 1 second how we look at our assets in the form of risk adjusted return and as I said the business has been great in terms of 45:08 45 minutes, 8 seconds making sure that yield stays. Um the product mix we've been comfortable all throughout at a 7228 72 being secured. 45:18 45 minutes, 18 seconds We're 74% secured today. So as we grow some of those businesses and that comes in hopefully that helps us on the top 45:26 45 minutes, 26 seconds line and with borrowing costs um you know if all stays well um let's hope that we're able to you know talk about 45:35 45 minutes, 35 seconds the number in the medium term that you mentioned. 45:38 45 minutes, 38 seconds Got it sir. Just one uh last question was on the was on the branch network side. So that number has come up. I 45:46 45 minutes, 46 seconds understand we must be rationalizing some of the branches or maybe consolidating some of the branches. But uh so do we 45:52 45 minutes, 52 seconds plan to add branches let's say overall uh in FI27 or or let's say in FI28 time period. 46:01 46 minutes, 1 second Absolutely. But I'll turn it around a bit. We have not reduced a single square footage of usage in the last three quarters that we've been in existence. 46:13 46 minutes, 13 seconds Right? So the most important thing Shal that we're looking at now is looking at branches and just just so that you know all of you are on the same page today 46:21 46 minutes, 21 seconds when we set up a branch we set up a branch even in 600T and 800 ft² right as a branch grows we might have two 46:30 46 minutes, 30 seconds branches in the same vicinity that we've done over a period of time. We're looking to see how do we double, you know, combine that branch potentially and maybe multiply it in terms of size. 46:39 46 minutes, 39 seconds So there are a lot of branches today that we've moved from a 600 800 foot to a 4,000 foot, right? And that helps us 46:46 46 minutes, 46 seconds deliver better to the customer. You need one branch manager, you know, you need one security guard. Um, a very trivial thing which is very important in the 46:55 46 minutes, 55 seconds working space. You'll probably have toilets. You know, the employee well-being is better, the field is better. helps us deliver better to our 47:03 47 minutes, 3 seconds customers. So a lot of those factors have gone in in making sure that you know the space that we have now is properly suited for the next 10 years. 47:14 47 minutes, 14 seconds So that's something we've been working very hard on. So you might see you know 2030 branches go up and down. The focus 47:21 47 minutes, 21 seconds also is how do we deliver better to our customers. So DIY that you know Romesh spoke about you know going two times to 47:27 47 minutes, 27 seconds maybe five times etc growth wise right that does not read branch that needs technology and as I mentioned that's something 47:36 47 minutes, 36 seconds we'll continue to invest in to make sure we deliver on the overall growth targets that we have 47:44 47 minutes, 44 seconds got it sir thank you sir thank you so much for answering our question thank you thank you the next question is from the 47:52 47 minutes, 52 seconds line of sukrit patil from eyesight Fred private limited please go ahead. 47:56 47 minutes, 56 seconds Uh good evening to the team. I have two questions. The first question to Mr. 47:59 47 minutes, 59 seconds Romesh is how do you see uh HTB financial services expanding its uh lending and customer financing business 48:06 48 minutes, 6 seconds in the coming uh quarters especially in terms of reaching new customers improving service quality and using digital platforms to make borrowing 48:15 48 minutes, 15 seconds simple. That's my first question. I'll ask my second question after this. Thank you. 48:19 48 minutes, 19 seconds Okay. So um if you look at our customer franchise um that's grown from about 5 48:26 48 minutes, 26 seconds uh million to in 2020 to about um 22 million in 2026 right so um it was 12 48:35 48 minutes, 35 seconds million in um March 23 it was about 5 million in 2020 so uh a key to our 48:42 48 minutes, 42 seconds growth we believe is the customer that we service in India which is aspirational India this segment is expected to grow as India grows. As 48:52 48 minutes, 52 seconds India gets you know larger economically this segment is likely to have the most outsized growth in terms of just sheer 49:01 49 minutes, 1 second number of people who will um who will come into our addressable base. Um so so that's that's the first point. The 49:08 49 minutes, 8 seconds second point is that you know we spoke about our distribution. We are present today in 1161 towns and cities. I can 49:15 49 minutes, 15 seconds assure you that the 1161 town that we're talking about is is probably as small as what a cluster can get. But I think what 49:24 49 minutes, 24 seconds we've been able to do is to deliver service standards which are uniform across the country. So in our consumer finance business where we work with more 49:32 49 minutes, 32 seconds than 100,000 retailers whether the retailer is in a metro like Mumbai Delhi or whether he's in a small town like Jor 49:42 49 minutes, 42 seconds the service standards are same in terms of the time it takes us to do a credit appraisal and do a delivery and by the way this is true for all products but I'm taking consumer finance because 49:50 49 minutes, 50 seconds that's a product where we deliver um a credit decision in a matter of few seconds or minutes. So, so that's the 49:58 49 minutes, 58 seconds second point you know in terms of how do we engage with our customers in a in a very very transparent and and 50:06 50 minutes, 6 seconds non-discretionary manner. Um so the third thing is that our extensive distribution means that when we work 50:13 50 minutes, 13 seconds with our manufacturer partners whether it's in our commercial vehicles, construction equipment, uh consumer 50:20 50 minutes, 20 seconds durables, digital products or tractors, we have very strong proposition for them in that we can cover practically the 50:28 50 minutes, 28 seconds entire country um and and give them a value proposition not just restricted to 100 or 200 cities but thousand plus 50:35 50 minutes, 35 seconds cities in India. Right? That's a very strong proposition. It's it's a strong mode. It's not easily replicable. 50:41 50 minutes, 41 seconds Building this kind of distribution takes time and building consistency and service delivery takes even more time. 50:47 50 minutes, 47 seconds Right? The fourth is on our digital initiatives. Today you can go to a e-commerce platform and get a loan through HDB. Even if you're new to HDB, 50:55 50 minutes, 55 seconds um most of our we have um you know uh our downloads of our app is is today 51:01 51 minutes, 1 second stands at 1.14 crore downloads. We have uh 4.76 lakh daily users on our app. 51:09 51 minutes, 9 seconds What this enables us to do is to engage with our customers who are our existing customers to make sure that we're able to tell them about what's happening, 51:17 51 minutes, 17 seconds what are the offers we have for them and what else we can do for them so that we have a extensive engagement with our 51:23 51 minutes, 23 seconds customer base. Um so what it enables us to do is to engage with the customer through their life cycle and that's 51:31 51 minutes, 31 seconds really the proposition of our company that how do we engage with the uh customers through their life cycle. So whether it's a consumer loan that they 51:38 51 minutes, 38 seconds want to enhance their lifestyle or whether it's a vehicle loan to to augment income or whether it's a you 51:45 51 minutes, 45 seconds know loan property for a for a capital investment or for a uh business expansion that they have. So 51:52 51 minutes, 52 seconds irrespective of the use case or the need case we have a suitable product and and that product is the hero for that customer at that point of time. So 52:01 52 minutes, 1 second that's the second that's the second point. The other point is on use of technology right some of this is for 52:09 52 minutes, 9 seconds there are three three use cases for technology. One is to reduce time to deliver credit or time to collect or time to service a customer. 52:18 52 minutes, 18 seconds So I think that enables us to deliver a consistent proposition to customers. The second is to reduce cost right there are 52:26 52 minutes, 26 seconds certain activities if I can put them on a digital workflow I reduce the cost as compared to what I would do otherwise. 52:35 52 minutes, 35 seconds The third is to improve quality right and and given that we you know originate almost a million customers a month um 52:43 52 minutes, 43 seconds you know or or that or thereabouts which means that we have to deliver very high quality service. So if I'm going to do a 100,000 consumer loans I have to make 52:51 52 minutes, 51 seconds sure that 100,000 payouts payments go to the dealers without any delay so that you know we have consistent business coming through. 52:59 52 minutes, 59 seconds So whether it's cost, quality or time, uh we put out metrics when we put out a technology project and make sure that we 53:06 53 minutes, 6 seconds deliver on those numbers and we monitor to make sure that those um those technology interventions deliver the results that we are looking at. 53:16 53 minutes, 16 seconds Yeah, thank you. My second my my my second question is Mr. is uh how do you plan to manage risk in the lending business such as credit defaults or any 53:25 53 minutes, 25 seconds compliance uh changes and market uh volatility while keeping the profit steady and ensuring a a sustainable 53:33 53 minutes, 33 seconds growth for the company to understand the vision. Thank you. 53:36 53 minutes, 36 seconds Thank you. So the way we look at it with first and foremost you need to think about us that we are an HDFC bank 53:44 53 minutes, 44 seconds subsidiary right um today every single regulation that comes in you know pulls 53:51 53 minutes, 51 seconds it more towards like a bank um the benefit we've had if I can put it that way is that every single bank regulation 53:59 53 minutes, 59 seconds that comes in we're actually operating on that any which ways and within those you know realms of possibility or you 54:08 54 minutes, 8 seconds know boundaries that we have we have a mo in terms of how we deliver to our customers and make sure that the 54:16 54 minutes, 16 seconds customers that we look at clearly have a need for what we do and we partner with them on their growth. So at this point 54:23 54 minutes, 23 seconds in time from you know uh where we are in the overall um credit cycle where we are 54:30 54 minutes, 30 seconds with our customers as we mentioned um we're very focused on the risk adjusted uh portfolio risk adjusted customer that 54:39 54 minutes, 39 seconds we looked at and uh you know over the last quarter it's a testament in terms of you know us holding on to our top line. Um we will continue to do that. We 54:48 54 minutes, 48 seconds have a wide variety of products. Each product, each sub segment in that has a focus in terms of you know which kind of 54:56 54 minutes, 56 seconds customers they should look at. Um the credit teams put out details in a very very granular manner and that will absolutely continue going forward. 55:06 55 minutes, 6 seconds Thank you and best wish. Thank you so much. Thank you. 55:14 55 minutes, 14 seconds The next question is from the line of Manish Oswal from Nirmal Bank Securities Private Limited. Please go ahead. Yes sir. Thank you for the opportunity. 55:22 55 minutes, 22 seconds Uh in terms of s customer segment like uh we have uh are you seen uh in this particular financial year? I have you 55:32 55 minutes, 32 seconds seen any major markets gain uh in the some of the product categories customer segment 55:39 55 minutes, 39 seconds compared to our competitors in this particular year. Can you call out some products or segments? 55:47 55 minutes, 47 seconds Sorry Manish, we're not clear about the question. Could you help me understand a little more it or rephrase it or you know help me understand it better? 55:56 55 minutes, 56 seconds So my question is that uh uh I want to know LD financial gain of particular customer segments. 56:06 56 minutes, 6 seconds I'm sorry to interrupt you Mr. Manish we are unable to hear you sir your voice is breaking. Am I audible sir? Now it is better. 56:15 56 minutes, 15 seconds Please go ahead. 56:17 56 minutes, 17 seconds Yeah. My question is uh uh this particular you 56:27 56 minutes, 27 seconds sorry to interrupt Manish but it is not audible. We are unable to hear you sir. It is breaking while you are speaking. 56:35 56 minutes, 35 seconds Go to the next speaker and we'll come back to you Manish because we really can't hear you. And if there is something that we missed then you can obviously you know get in touch with 56:44 56 minutes, 44 seconds Gorov and then we'll come back to you as well. 56:47 56 minutes, 47 seconds Thank you. We'll move to the next question which is from the line of Res from IC securityities. Please go ahead. Uh yeah. Hi J. Uh thanks for a followup. 56:56 56 minutes, 56 seconds Uh see just again uh you know touching upon this uh distribution uh thing right. I mean uh you know for retail 57:04 57 minutes, 4 seconds business obviously the distribution uh you know is a key pillar. Now when we look at whether it is you know town and 57:11 57 minutes, 11 seconds cities addition or you know physical branch addition over last one year or so uh it is actually either flat or there 57:20 57 minutes, 20 seconds is a decline right so uh how are we seeing this internally and what gives you comfort that you know we'll be able 57:28 57 minutes, 28 seconds to achieve our aspirational growth targets with uh uh this physical network uh and also distribution in terms of 57:36 57 minutes, 36 seconds town and cities So um Res so what I think one of the things that's changed um over the last 57:44 57 minutes, 44 seconds few years is the amount of digitization of processes. Um so no more does a sales 57:53 57 minutes, 53 seconds officer carry a file to the branch anymore. Um the credit is delivered to where the customer is in most of our 58:02 58 minutes, 2 seconds product categories right in and most of our customer categories credit is delivered to the field. It is not dished 58:08 58 minutes, 8 seconds in the office. Um so think of a consumer loan or a vehicle loan. The credit is delivered at the point of sale. It's not 58:17 58 minutes, 17 seconds delivered and decided in the office anymore. So which means that I don't have to have a physical office in the vicinity of where my salesperson 58:24 58 minutes, 24 seconds operates for the person to carry a file every day to the office. Right? When we started our business in 2008, practically every every customer 58:33 58 minutes, 33 seconds application there would be an application with supporting documents which would be received in the office. 58:38 58 minutes, 38 seconds At the end of the day, a credit officer would look at that file and you know the the process would start then. Today the 58:45 58 minutes, 45 seconds process starts when the customer is met, expresses interest and shares some basic documents. Those are all scanned in real 58:53 58 minutes, 53 seconds time through an app that the salesperson carries. I'm talking about assisted journey in a in a in a digital journey. 58:59 58 minutes, 59 seconds The customer does all this by himself or herself. Right? So the need to have a physical office in the proximity of our 59:07 59 minutes, 7 seconds distribution network is lower today. I mean I could simply ask the salesperson to visit the office once a week uh if it's 50 km away right so what we've been 59:17 59 minutes, 17 seconds able to do is to set up more distribution points uh through our feed on street and through our digital channels than what we could have 59:25 59 minutes, 25 seconds afforded to do a few years ago. I think the decline you see is really because you know some of the smaller locations where we had offices we decided that 59:33 59 minutes, 33 seconds it's not worth keeping a physical office anymore because that location can be serviced from a um a second uh you know 59:42 59 minutes, 42 seconds location. The other thing that you know I spoke about is that our do-ityourself has gone up by 2.2 times in one year. 59:50 59 minutes, 50 seconds Now a lot of existing customers right because they have had good repayment relationship with us uh we encourage our 59:58 59 minutes, 58 seconds customers to come through our app where the offers are available and complete the journey digitally itself because that can be done whenever the customer 1:00:06 1 hour, 6 seconds is free whether it's 11:00 in the morning or it's 7:00 in the evening uh does not require a personal intervention and if the customer at any point of the 1:00:14 1 hour, 14 seconds journey wishes to engage with the company there's the option to convert that digital journey to assisted journey, right? 1:00:22 1 hour, 22 seconds The third thing that you know you also have is that today we have a option for customers to even use our you know take 1:00:29 1 hour, 29 seconds our loans through e-commerce sites u which again is a fully digital journey. 1:00:34 1 hour, 34 seconds So distribution expansion is a function of you know the physical presence distribution presence which is unnecessary journeys and digital 1:00:43 1 hour, 43 seconds presence which is again unnecessary journeys. So today a dealer can log in a file on our behalf because you know we have given him a engagement layer and 1:00:52 1 hour, 52 seconds then the customer's journey can start from there does not require a person to be there. So you know we will use all 1:01:00 1 hour, 1 minute all available methods to expand our distribution and continue to expand that. I think physical offices you know 1:01:07 1 hour, 1 minute, 7 seconds unless there's a certain size that we reach um you know we take a call on whether we need a physical office or not as I said you know I can have a 1:01:15 1 hour, 1 minute, 15 seconds salesperson working remotely and visiting our branch only once a month because there's nothing that he really needs to do. He doesn't pick up payments. He doesn't um you know carry 1:01:24 1 hour, 1 minute, 24 seconds files anymore because it's all digitally transmitted. Got it. Got it. No, I think that's great. Thank you. 1:01:32 1 hour, 1 minute, 32 seconds Just to follow up on that maybe J if we have time I don't know or I can I think we're running out of time. We can pick up things offline. 1:01:41 1 hour, 1 minute, 41 seconds Okay. Sure sir. Sure. Thank you so much sir. Thank you. 1:01:45 1 hour, 1 minute, 45 seconds Thank you ladies and gentlemen. That will be our last question for today which is from the line of J beta from Nirmal Bank institutional equities. 1:01:53 1 hour, 1 minute, 53 seconds Please go ahead. 1:01:54 1 hour, 1 minute, 54 seconds Uh hello sir thank you and congratulations on the set of numbers. 1:01:59 1 hour, 1 minute, 59 seconds I have yeah sir my question is uh currently uh on repayments uh since 1:02:06 1 hour, 2 minutes, 6 seconds since the start of the war how has been how is the repayment uh been in the in the MSN clusters? 1:02:15 1 hour, 2 minutes, 15 seconds So um we haven't seen any major disruption is the way I would put it. So 1:02:23 1 hour, 2 minutes, 23 seconds something Ji covered earlier also that you know March has been fine for us right and at this point in time I think 1:02:32 1 hour, 2 minutes, 32 seconds too early to call out second third fourth order impact um we seem to you know obviously get some positive 1:02:39 1 hour, 2 minutes, 39 seconds messages as well. Let's hope the positive messages you know translate into positive outcomes. Um and uh you 1:02:48 1 hour, 2 minutes, 48 seconds know we at this point in time based on what we are seeing on the ground would really want to focus on growth and movement forward from here on and 1:02:56 1 hour, 2 minutes, 56 seconds obviously that growth you know complements with the fact that collections remain good. 1:03:03 1 hour, 3 minutes, 3 seconds Okay sir also and just one more question if I can squeeze in uh uh on on your AI initiative. So it is just for reducing 1:03:12 1 hour, 3 minutes, 12 seconds that and bringing in new uh customer or is it for reducing opex and uh reducing expected credit loss as well? 1:03:22 1 hour, 3 minutes, 22 seconds So um look technology initiatives cover all three um um outcomes right one is to 1:03:29 1 hour, 3 minutes, 29 seconds reduce time it takes to deliver credit or time to process a loan or time to make a payment to uh our partners. uh 1:03:37 1 hour, 3 minutes, 37 seconds second is you know improving quality uh and and third is uh reducing cost right so all three initiative there'll be 1:03:45 1 hour, 3 minutes, 45 seconds projects that work on all three there'll be projects that work on um um you know making sure that things work well uh for 1:03:53 1 hour, 3 minutes, 53 seconds example you know we use AI extensively in our cyber security now that's really something that can't be done by human beings anymore right so you need 1:04:00 1 hour, 4 minutes technology to help us do that um so for example you know we have branches which are monitored on a real-time basis. Uh 1:04:08 1 hour, 4 minutes, 8 seconds so there could be thousands of CCTV cameras that we have in our branches. 1:04:11 1 hour, 4 minutes, 11 seconds They need to be monitored. Can't be done by human beings. So you enable AI to to monitor so that you a human being only 1:04:18 1 hour, 4 minutes, 18 seconds looks at exceptions, right? U so as I said we we one of our core principles is 1:04:25 1 hour, 4 minutes, 25 seconds to deliver credit across the country in a uniform manner. So whether the customers in a tier four town, a village or a metro now that gets delivered 1:04:34 1 hour, 4 minutes, 34 seconds through technology, right? So that consistency in service. So depending on you know the use case uh it it could be any of the three or a combination of all three or all three at the same time. 1:04:43 1 hour, 4 minutes, 43 seconds Yep. Thank you. 1:04:45 1 hour, 4 minutes, 45 seconds Okay sir. Thank you sir. And uh sir uh one more question from Mr. Manish. 1:04:51 1 hour, 4 minutes, 51 seconds There will sorry we we will we running out of time. That's okay. We thank you sir. Thank you. 1:05:01 1 hour, 5 minutes, 1 second Thank you. 1:05:03 1 hour, 5 minutes, 3 seconds As is it is the end of aorted time I now hand the conference over to Mr. Jay Kumar Sha for closing comments. 1:05:11 1 hour, 5 minutes, 11 seconds Thank you Ruja. Um thank you very much everybody for your time. We're quite excited for the quarters ahead and the 1:05:19 1 hour, 5 minutes, 19 seconds performance for Q4 has laid the right foundation on growth and profitability to be achieved over our medium-term 1:05:26 1 hour, 5 minutes, 26 seconds goals. Thank you very much and have a great evening. Thank you. 1:05:33 1 hour, 5 minutes, 33 seconds Thank you ladies and gentlemen. On behalf of HDB Financial Services, that concludes this conference.