Home First Finance Company India Ltd — Q4 FY26

Home First Finance Company India Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=FQ598qWM_Os Published: 6 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to Home First Finance Company India Limited Q4 and FI26 earnings 0:09 9 seconds conference call. As a reminder, all participant lines will be in the listenonly mode. There will be an opportunity for you to ask questions 0:16 16 seconds after the presentation concludes. Should you need any assistance during this conference, please signal an operator by pressing star and then zero on your 0:25 25 seconds touchstone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sunil 0:32 32 seconds Anjanna, head treasury and investor relations of Home First Finance Company India Limited. Thank you and over to you sir. 0:41 41 seconds Thank you Farah. Good afternoon ladies and gentlemen and welcome to Home First Finance Company's earnings conference call to discuss the financial results 0:48 48 seconds for the quarter and financial year ended March 31st, 2026. We hope you have had the chance to review our investor 0:56 56 seconds presentation and press release both of which are available on our website and stock exchanges. As per our practice, we have also uploaded an Excel fact sheet 1:04 1 minute, 4 seconds containing historical data on our website for your easy reference. From the management, we have with us today Mr. Manoj Vishnuatan, MD and CEO, Miss 1:13 1 minute, 13 seconds Nutan Gabatpari, CFO. With that, I now invite Mr. Vishnuatan to share his insights on overall performance and 1:20 1 minute, 20 seconds outlook. Over to you, sir. Thank you Senil. Good afternoon everyone and thank you for joining us today. FI26 has been 1:28 1 minute, 28 seconds a year of resilience and disciplined execution for home first. We ended the year with healthy growth record disbbursements in quarter 4 over 41.4% 1:36 1 minute, 36 seconds profit growth for the full year improving asset quality and a balance sheet that remains very well capitalized. What is important to us is not any one of these metrics in 1:44 1 minute, 44 seconds isolation but the fact that all of them moved in the right direction together. 1:50 1 minute, 50 seconds We continue to grow well. Our asset under management stood at rupes 15,878 crores as of March 26, up 24.9% year-on-year and 6.4% sequentially. 2:01 2 minutes, 1 second Disbburment in quarter 4 was the highest ever at 1,572 crores, up 23.5% yearonear and 19.3% Q. For FI26, the disbbursement 2:10 2 minutes, 10 seconds stood at 5 5,424 crores, a growth of 12.9% over FI25. The strong exit run rate in quarter 4 gives us confidence as we enter FI27. 2:20 2 minutes, 20 seconds Profitability remained robust for FI26 PAT stood at 540 crores, up 41.4% yearonear. Reported return on equity for 2:28 2 minutes, 28 seconds FI26 was 15.7%. And on a pre- money basis, adjusted RO stood at 16.8%. 2:34 2 minutes, 34 seconds Even as we delivered this performance, we continued to invest for the next phase of growth. During the quarter, we added six new branches and five touch points, increasing the network to 171 2:42 2 minutes, 42 seconds branches and 373 touch points. During 2026, we also added uh 221 employees and largely customerf facing goals, taking our total headcount to 1,855. 2:54 2 minutes, 54 seconds Our origination yield continues to be healthy at 13% with an 83% share of individual housing loans. That consistency in mix is important because 3:02 3 minutes, 2 seconds it reflects both the strength of our core franchise and the granularity of our portfolio. 3:07 3 minutes, 7 seconds Now coming to asset quality, one of our key priorities over the last few quarters has been to strengthen the portfolio quality from the front end by tightening our focus on early buckets 3:15 3 minutes, 15 seconds collection discipline and resolution intensity. We are pleased with the pronounced improvement visible this quarter. Our plus DPD is at 4.7% down 60 3:23 3 minutes, 23 seconds basis points sequentially. 30 plus DPD improved to 3.2% down by 50 basis points sequentially. Stage 2 reduced by 30 basis points to 1 1.4%. 3:34 3 minutes, 34 seconds Growth stage three improved to 1.8%. 8% down by 20 basis points quarteron quarter. Early indicators from April demonstrate good collection outcomes 3:42 3 minutes, 42 seconds compared to the same month in previous years. Fris slippage percentage is lower than what was seen in April 2025 as well 3:49 3 minutes, 49 seconds as April 2024. We have not yet observed any significant impact on the ongoing war in the Middle East. Let me now touch upon statewise trends. To start with, 3:58 3 minutes, 58 seconds all senior leadership positions in the branch network have been filled across all states and are now fully focused on delivering strong results in this financial year. Gujarat MP and Rajasthan 4:07 4 minutes, 7 seconds are showing healthy growth and stable asset quality. Maharashtra has regained strong momentum particularly in Mumbai and Pune reflected in a robust AUM 4:14 4 minutes, 14 seconds trajectory. All the southern states are on track for strong growth in this financial year including Tamil Nadu and Karnataka. Also the Eata issue is mostly 4:21 4 minutes, 21 seconds behind us. In UP the team is being built and we are preparing a strong base for FI28. 4:28 4 minutes, 28 seconds Technology remains one of the key differentiators of home first. It is central to how we source underwrite service and scale the business. 4:35 4 minutes, 35 seconds Home first deep rooted digital DNA built consistently since inception has created a strong foundation for accelerated AI adoption across the value chain. This 4:44 4 minutes, 44 seconds digital first approach has also given us clean structured data assets stretching back to day one of the company. 4:49 4 minutes, 49 seconds Providing the highquality training ground that modern AI systems demand. 4:52 4 minutes, 52 seconds Our AI strategy is anchored in three outcomes. Elevating customer experience, enhancing employee productivity and driving structural cost efficiencies. In line with this framework, we have 5:01 5 minutes, 1 second already operationalized proprietary AI agents for income assessment and contextual bank statement analysis. 5:07 5 minutes, 7 seconds Parallely, AIEL interventions in lead qualification, legal and technical valuation and bureau analysis are currently in pilot and will progressively move to production as we 5:15 5 minutes, 15 seconds scale our intelligent underwriting stacks on sustainability. Our green homes initiative continue to make progress. We 5:23 5 minutes, 23 seconds certified 140 additional homes during the quarter, taking the cumulative total to 450 as of March 2026. As we look ahead, we are entering FI27 from a 5:32 5 minutes, 32 seconds position of strength. Growth momentum is healthy. Asset quality is improving. 5:35 5 minutes, 35 seconds Margins remain robust. The balance sheet is strong and the investments we are making in distribution people and technology are entered to support durable growth, not just near-term 5:43 5 minutes, 43 seconds growth. Based on where we are today, we are positioned to deliver around 25% year-on-year AUM growth. Our focus remains clear. Grow with discipline, product portfolio quality, improve 5:51 5 minutes, 51 seconds productivity, and deepen our customer franchise and continue delivering strong and sustainable profitability. With that I now hand it over to Nan to take you through the financial performance in more detail. Over to you Nutan. 6:02 6 minutes, 2 seconds Thank you Manoj and good afternoon everyone. I will take you through the key financial highlights for the quarter and the full year. Let us start with the 6:09 6 minutes, 9 seconds income statement. Total income for the quarter stood at 505 crores up by 21.3% YI and 4.4% quarteron quarter. 6:18 6 minutes, 18 seconds Specifically on the interest on term loans went up from 46 crores in quarter 3 to 412 crores in quarter 4 presenting 6:27 6 minutes, 27 seconds 1.6% quarteronquarter increase as against average principal outstanding growth of 5.5% on a quarteronquarter 6:35 6 minutes, 35 seconds basis in the interest income on term loans two lesser days in the quarter that is quarter 4 versus quarter 3 6:41 6 minutes, 41 seconds impacted by 2.2% 2% 10 basis point PLR cut impacted by 80 basis points and origination yields had an impact of 6:50 6 minutes, 50 seconds another 80 basis points. So that wraps up the uh interest on perm loans. 6:55 6 minutes, 55 seconds Portfolio yields excluding co- lending stood at 13.2% while dispersal yields for the quarter stood at 13%. Reflecting 7:03 7 minutes, 3 seconds continued pricing discipline and healthy customer acquisition quality. 7:08 7 minutes, 8 seconds On the liability side, through proactive borrowing mix management, we were able to contract our cost of borrowing 7:16 7 minutes, 16 seconds excluding co- lending by 10 basis points to 7.9%. 7:20 7 minutes, 20 seconds Incremental borrowing cost during the quarter remained favorable at around 7.6% which gives us confidence in the 7:27 7 minutes, 27 seconds resilience of a spread profile. As a result, our spread excluding co- lending remained healthy at 5.3%. 7:34 7 minutes, 34 seconds Yields have to be looked at a portfolio level and we run a 100% floating asset book allowing us the ability to repric 7:41 7 minutes, 41 seconds as cost of borrowing moves. This is an essential element of our financial strategy to not carry any interest rate risk on our balance sheets. Our aim 7:50 7 minutes, 50 seconds remains to deliver spread at a portfolio level in our guided range of 5% to 5.25%. 7:57 7 minutes, 57 seconds Net interest margin for quarter 4 stood at 5.9%. While there was a modest sequential compression of 10 basis 8:04 8 minutes, 4 seconds point, NIM remains robust and continues to reflect the strength of a business model. For FI26, NIM stood around 5.7%. 8:14 8 minutes, 14 seconds Moving to operating efficiency, uh it remained strong. Cost to income for quarter 4 was 32% improving 10 basis 8:21 8 minutes, 21 seconds points sequentially. For FI26, the cost to income spread 32.5% an improvement of 8:28 8 minutes, 28 seconds 330 basis points. This is particularly encouraging because it comes alongside continued investments in distribution, headcount, and technology. 8:39 8 minutes, 39 seconds As a reminder, the full year OPEX includes a one-time gratuitity provision of 3.3 crores recorded earlier in quarter 3 arriving from the implementation of the new labor code. 8:50 8 minutes, 50 seconds Operating cost to assets was 2.7% for the quarter as well as for the full year. As we continue to invest for growth, we expect this ratio to remain broadly rangebound within 2.6 to 2.7%. 9:03 9 minutes, 3 seconds Pre-provisioned operating profit in quarter 4 stood at 212 crores up by 44.9% 9:10 9 minutes, 10 seconds Y. This reflects the operating leverage inherent in the franchise as the book continues to scale. Profit after tax for 9:18 9 minutes, 18 seconds quarter 4 stood at 149 crores, up by 42.7% Y and 6.6 million Q. For FI26, 9:27 9 minutes, 27 seconds profit after tax stood at 540 crores, representing 41.4% Y growth. Return on assets of 3.9 and return on equity of 15.7%. 9:38 9 minutes, 38 seconds Following the 1250 cr completed earlier in April, our balance sheet remains very well capitalized. On a pre- money basis, adjusted ROE for FI26 stood at 16.8%. 9:50 9 minutes, 50 seconds Moving on to provisions and asset quality. Credit cost for quarter 4 and the year stood at 40 basis points. 9:56 9 minutes, 56 seconds Provision on stage three assets was increased to 24% as of March 26 from 22% 10:03 10 minutes, 3 seconds in December 25. We continue to follow a conservative provisioning approach and maintain overlays above ECL 10:10 10 minutes, 10 seconds requirements. As of March 26th, our total provision coverage ratio stood at 44.9%. 10:17 10 minutes, 17 seconds We believe this reflects the prudence with which we manage the balance sheet while preserving adequate flexibility for growth. Now coming to borrowance and 10:25 10 minutes, 25 seconds liability profile. Our funding profile continues to be well diversified and cost effective. As of March 26, 59% of 10:33 10 minutes, 33 seconds funding came from private and public banks, 15% from NHP, 20% from assignment and co- lending. We balanced entities, ECDS and NBFC. 10:43 10 minutes, 43 seconds During quarter 4, we executed direct assignment transaction of 264 crores. In co-ending disbbursement for FI26 10:51 10 minutes, 51 seconds doubled, rising from 153 cr in FI25 to 37 crores in FI26. 10:58 10 minutes, 58 seconds The co-ending book grew to 593 crores and now represents 3.7% of AUMF. In 11:05 11 minutes, 5 seconds FI27, we will continue to scale the co-ending business by further strengthening the enabling infrastructure. This product line 11:13 11 minutes, 13 seconds provides an opportunity to serve a wider customer base while driving enhanced productivity and returns. Finally, on 11:20 11 minutes, 20 seconds capital adequacy and liquidity, as of March 26, our capital to risk weighted assets ratio stood at 44.1% with tier 1 at 43.8%. 11:32 11 minutes, 32 seconds As of March 25, prior to April QIP, our capital adequacy stood at 32.8% with tier 1 at 32.5%. 11:41 11 minutes, 41 seconds Our net worth stood at 4,357 crores and book value for share is 480 11:48 11 minutes, 48 seconds rupees as of March 26. This positions us well to continue investing in growth while maintaining a disciplined risk 11:55 11 minutes, 55 seconds framework. With that, we conclude our opening remarks and are now happy to take your questions. 12:01 12 minutes, 1 second Thank you very much ladies and gentlemen. We will now begin the question and answer session. Anyone who wishes to ask a question may enter star 12:10 12 minutes, 10 seconds and one on the touchstone telephones. If you wish to remove yourself from the question Q, you may enter star and two. 12:17 12 minutes, 17 seconds Participants are requested to please use only handsets while asking a question. 12:22 12 minutes, 22 seconds We will wait for a moment while the question Q assembles. 12:28 12 minutes, 28 seconds The first question is from the line of Abiji Tibra from Motilosa. Please go ahead. Yeah, thank you for taking my question. 12:36 12 minutes, 36 seconds Uh am I audible? Yes. 12:40 12 minutes, 40 seconds Yeah. Yeah. Thank you. Um know there are two questions. One is uh maybe near-term uh what we have seen over the last one 12:49 12 minutes, 49 seconds year and then maybe I'll I'll move to the second question. The first question is is more around if you look at this financial year which we just ended. Uh 12:58 12 minutes, 58 seconds the first part of the year was a little bit about weakness weakness both in terms of demand as well as uh I would 13:06 13 minutes, 6 seconds say asset quality and then when we moved to the third quarter we saw some semblance of stability coming in and then fourth quarter obviously we have 13:14 13 minutes, 14 seconds ended on a on a high note. uh whether we look at the disbburment momentum whether we look at the improvement in asset quality that we have uh reported so so 13:23 13 minutes, 23 seconds just trying to understand the first half weakness which was there that was more demandled and are you seeing demand 13:31 13 minutes, 31 seconds improve now as you've exited four view uh that is the first part of the question and the other thing is you'll remember first half of this fiscal year 13:40 13 minutes, 40 seconds we also spoke about weakness in asset quality predominantly part of it coming from is some impact of US tariffs. How 13:47 13 minutes, 47 seconds how is credit trending now? Uh is something I wanted to understand. I remember you saying in your opening remarks that April 26 was better than 13:56 13 minutes, 56 seconds April 25 and 24. But just trying to understand how are these two things demand and credit trending uh right now. 14:05 14 minutes, 5 seconds Yes. Um so uh um I mean looking at the first half I mean first the uh discussion on the first half. Uh so 14:14 14 minutes, 14 seconds there were two or three uh things which were happening simultaneously. One was that we were just coming out of the whole uh overhang of the you know credit 14:22 14 minutes, 22 seconds issue. U so the you know there were delinquent delinquencies were elevated uh so and collection was a bit 14:29 14 minutes, 29 seconds difficult. So uh also impacted by tariffs etc. uh there was a bit of sluggishness in demand as well at that point of time and we were also 14:37 14 minutes, 37 seconds internally going through some issues you know some of the locations uh you know regions were not stopped properly there was some aggression and so on right so 14:44 14 minutes, 44 seconds all of these things were happening simultaneously at that point and hence the you know little bit of a weakness or sluggishness uh as the year progressed 14:53 14 minutes, 53 seconds uh you know some of the external factors got resolved and then the internal factors also got resolved we started filling up all the positions uh you know 15:01 15 minutes, 1 second we rebuilt the teams and simultaneously the external factors got resolved to some extent. So the credit weakness started coming down you know collections 15:09 15 minutes, 9 seconds uh started improving. Uh the tariff issue was also kind of put to rest at some point and uh the demand also 15:17 15 minutes, 17 seconds started from October onward the demand also started improving. Uh so all these things kind of came together in the last two quarters and u then helped us uh deliver this uh good results. 15:28 15 minutes, 28 seconds Got it, man. And then the the last question that I had was a little bit uh I would your medium-term uh strategy. Um 15:36 15 minutes, 36 seconds I remember you saying in your opening remarks that we are entering F27 from a position of strength. You also acknowledge that there were some 15:44 15 minutes, 44 seconds internal challenges as well last year in terms of staffing which you acknowledge has now been resolved. So if you could just articulate how should we look at 15:53 15 minutes, 53 seconds maybe the next two to three years. uh you you you did mention that we'll be looking to grow our AUM at a 25% uh this 16:02 16 minutes, 2 seconds year. So, so a what what all changes have you done this year which is giving us confidence that we'll be able to 16:08 16 minutes, 8 seconds sustain that 25% growth and then if you could also talk about uh how are you looking at uh your distribution uh your 16:16 16 minutes, 16 seconds expansion into newer states or rather deepening into newer states u just just do two three points if you can cover 16:25 16 minutes, 25 seconds yes um so u so one is you know the uh you know teams being rebuilt and uh you 16:32 16 minutes, 32 seconds know all senior leadership positions uh being filled across the country. I think that is the uh big positive with which we are entering uh this year. Um so we 16:42 16 minutes, 42 seconds have now the teams on the ground uh you know fully focused on uh you know delivering the result for the year. Um 16:49 16 minutes, 49 seconds so we are not distracted with any positions to be filled or any iteration and so on and so forth. So that is the big the big you know positive starting 16:56 16 minutes, 56 seconds point. Um second is that uh you know we have further improved our value proposition to the uh you know distribution channels in terms of 17:04 17 minutes, 4 seconds turnaround times in terms of the you know wide bouquet of products that we are able to offer. Uh so there you know the co-ending also comes into play uh 17:13 17 minutes, 13 seconds where we are you know so if we are going to a connector or to any distribution channel we are able to offer them um you know a larger book of products uh where 17:22 17 minutes, 22 seconds they can you know address more number of customers. It's a wider target target market that they can address. So that is also that is also and that is being that 17:30 17 minutes, 30 seconds is being well recognized by the channels uh you know with you would see there's there's a big jump in the number of connectors as well uh last quarter. So 17:38 17 minutes, 38 seconds that is another big positive that we are entering entering with. So all of this uh so and uh you know the other uh you 17:45 17 minutes, 45 seconds can say important development is our you know huge success that we have got in places like Bombay and Pune which 17:54 17 minutes, 54 seconds were traditionally seen as you know formal markets and where only the banks could banks could operate etc. So we have really turned around and you know 18:03 18 minutes, 3 seconds created a huge success there. So all of these things gives us the confidence that you know as for the the next two to three years we are on a very strong 18:10 18 minutes, 10 seconds growth uh trajectory. Uh we have understood uh you know the kind of value proposition the market wants. We are able to deliver that um and exceed the 18:19 18 minutes, 19 seconds expectations of the channels and uh so that's what gives us confidence that you know this year definitely 25% AUM growth we can deliver and you know everything 18:28 18 minutes, 28 seconds goes well we should be able to kind of continue that trend over the next couple of years as well. 18:33 18 minutes, 33 seconds Got it. Thank you so much so much that answer my question and I wish you and your team the very best. 18:39 18 minutes, 39 seconds Thank you. The next question is from the line of Prashant Kotari from Pikt. Please go ahead. 18:50 18 minutes, 50 seconds Mr. Your line is unmuted. Yes, please go ahead sir. 18:54 18 minutes, 54 seconds Uh hello. Uh two quick questions from my end. Uh the first one uh would be that you know you mentioned that you're on 19:02 19 minutes, 2 seconds track for growth in the southern states in FI27. 19:06 19 minutes, 6 seconds I just wanted to check how did our market shares move in in say Karnataka and Tamil Nadu in the in FI26 and are 19:15 19 minutes, 15 seconds there any specific competitors growing aggressively in these re regions? 19:20 19 minutes, 20 seconds That would be my first question. I I'll come back to the second. 19:23 19 minutes, 23 seconds Sure. So market shares in Tamil Nadu you know Tamil Nadu was not very strong uh to start with and uh you know it would 19:32 19 minutes, 32 seconds have further dropped a little bit in this uh last year because you know the growth was very muted in Tamil Nadu. Uh but we will hopefully be able to make it 19:39 19 minutes, 39 seconds up in the in the coming couple of years because now the kind of base is ready and you know uh the teams are there. So uh we should be able to catch up as far 19:48 19 minutes, 48 seconds as the TN is concerned. Um in Karnataka it has been a fairly steady uh steady growth except for a minor blip we had for one one or two quarters because of 19:55 19 minutes, 55 seconds the eata issue otherwise uh you know it's been uh we would we we would have sustained our market share in uh Kataka. 20:05 20 minutes, 5 seconds Got it. Got it. And any any specific competitors that you are uh sort of looking out for there or growing aggressively in the in the southern states? 20:16 20 minutes, 16 seconds M no new names as such. Um you know the uh you know set of existing players uh 20:25 20 minutes, 25 seconds you know so depending on the season depending on the year depending on the year there are uh you know uh some 20:32 20 minutes, 32 seconds players who are more active. Uh so uh nothing significant to report in terms of new new competition. 20:40 20 minutes, 40 seconds Got it. Got it. Uh maybe uh next sort of question uh you know how how do we think about risk adjusted ES uh when say 20:48 20 minutes, 48 seconds compared to other pure play uh affordable housing uh finance players uh do we look at that and then if so what's 20:56 20 minutes, 56 seconds our what's our thinking there so on yields are thinking see you know we are offering a wide bouquet of 21:04 21 minutes, 4 seconds products so starting from five lakh ticket size to a 40 lakh ticket size and the idea and we also do a do loan 21:11 21 minutes, 11 seconds against property. So the idea is to provide a blended yield um or rather you know to deliver a spread of around 5 to 21:18 21 minutes, 18 seconds 520. Um so if the borrowing cost drops uh you know further from here then you 21:25 21 minutes, 25 seconds know there will be corresponding decline in the yields but overall we are looking to maintain a spread of 5 to 520 that is what we are looking to do. So we will do 21:34 21 minutes, 34 seconds that you know by using this whole blend of products. So there will be lak on one side maybe to up to the extent of 20%, there is a smaller ticket loans which 21:42 21 minutes, 42 seconds will deliver slightly higher yields and then we have the you know larger ticket loans and then anyway co- lending is there which is yield agnostic because uh 21:50 21 minutes, 50 seconds uh we are anyway getting an effective yield of about five effective spread of about five five and a half in the coending product. So um uh the idea is 21:59 21 minutes, 59 seconds to deliver uh you know I mean sustain the profits and deliver the respectable uh uh or the promised roe that we have 22:07 22 minutes, 7 seconds you know we have committed to uh helpful I was thinking more around sort of riskadjusted deal. So if if we 22:15 22 minutes, 15 seconds uh look at say uh the yield uh and uh take out the credit costs uh how how do 22:23 22 minutes, 23 seconds we think about that on a portfolio basis on on different segments say different uh states and then how does it compare to uh or our peers? 22:35 22 minutes, 35 seconds Uh so it would be uh you know see in certain segments it would be similar to peers. Uh it also depends upon the kind of markets etc. we are we are comparing. 22:45 22 minutes, 45 seconds So some of our peers operate in more rural or you know semi-ural markets where deals would probably be higher 22:53 22 minutes, 53 seconds also in some cases uh they operate in the you know lab and you know they have a higher proportion of lab and microlap segment. So where the yields are again higher 23:01 23 minutes, 1 second uh in in in uh in comparable products the yields will be largely comparable. It's not going to be very different. 23:09 23 minutes, 9 seconds Just to give you a range, we operate in a yield range of between say 12% to about 14%. U so ticket size is one axis. 23:20 23 minutes, 20 seconds Uh and the other is the uh nature of the product which is whether it's lap or housing loan. Uh so 12 to 13 and a half 23:27 23 minutes, 27 seconds 14% is generally the range uh in which we operate. It is not a it doesn't it doesn't vary beyond that. 23:34 23 minutes, 34 seconds Got it. Got And then uh just on that on the uh lap segment say compared to the home loan segment is the lap segment uh 23:42 23 minutes, 42 seconds are the you know yields uh higher and then the credit cost comparable or or uh let's say it'll be different. 23:52 23 minutes, 52 seconds Hey credits also don't uh fluctuate uh you know fluctuate a lot. So I mean uh if we are talking about a overall credit 24:00 24 minutes cost of 40 basis points for the year. I mean the range will be between 20 basis points to 60 basis points. So we are not operating a product where you know the 24:09 24 minutes, 9 seconds credit cost is substantially higher and we're just delivering a higher yield because uh uh that is not our strategy. 24:17 24 minutes, 17 seconds Got it. Or for lap also it'll be in the same range right? Lap also it will be in the same range. Correct. 24:25 24 minutes, 25 seconds Got it. But yield will be higher. Is uh is that correct? 24:30 24 minutes, 30 seconds Yeah yield is higher. So again we are not operating in the very high yielding lab category. You know our lab yields are also in the say 14 14 and a half% range. 24:43 24 minutes, 43 seconds Got it. Got it. No helpful. Thank you so much. 24:47 24 minutes, 47 seconds Thank you. Our next question is from the line of Shipal Doshi from Aquarius. Please go ahead. 24:54 24 minutes, 54 seconds Hi sir. Thank you for giving me the opportunity. My question is pertaining to PNR. So we had taken 10 point PLR cut 25:01 25 minutes, 1 second last quarter. Uh now with rates likely to go up systemic rates likely to go up I would we make any adjustment there or 25:09 25 minutes, 9 seconds would we continue with our pricing strategies that we have as on today? 25:14 25 minutes, 14 seconds Sher we will wait for the repo car uh repo hike if at all they were to happen in the later part of the year. We will 25:21 25 minutes, 21 seconds also have to watch out how banks are repricing from the MCLR line and only if we need we will take the decision to 25:30 25 minutes, 30 seconds hike. As I explained in my call they have a fully floating book and uh our history also has indicated that we have 25:37 25 minutes, 37 seconds the capability to increase rates as well as reduce rates and uh uh so we will take a call based on as and when the 25:45 25 minutes, 45 seconds hikes come through in the next one quarter. uh we are not seeing that as a possibility. In fact, I would say uh we 25:52 25 minutes, 52 seconds should be able to maintain our cost of borrowing in quarter 1 in and around the levels uh of last quarter. 26:01 26 minutes, 1 second Got it. Got it. My second question was on branch expansion. Uh so uh I was looking at the dispersement upon branch 26:08 26 minutes, 8 seconds number and and it's already at closer to 50 K per branch. Uh and this is really at a peak level. Uh so incrementally 26:16 26 minutes, 16 seconds when you say you want to like we'll be growing at 25% loan growth uh and so what is our branch expansion strategy 26:23 26 minutes, 23 seconds where do you see the dispersement per branch as a run rate and also wanted to understand which locations would we add 26:31 26 minutes, 31 seconds branches and what is the number of branches or percentage of branches with disbursement per branch below 10 cr. 26:42 26 minutes, 42 seconds So u generally our strategy to put up a branch is only if the branch has the potential to reach this uh you know 26:50 26 minutes, 50 seconds average branch branch disposal potential which is you know 2 to three crores a month. Uh so we would typically not put 26:57 26 minutes, 57 seconds a branch where you know the potential is only one 1 cr a month. Um so that we would just operate as a touch point or a satellite location. Um so branch 27:07 27 minutes, 7 seconds strategy is to add about 30 to 40 branches every year. Uh so that is what we are planning and productivity of the branch obviously the disposal of a per 27:14 27 minutes, 14 seconds branch should keep pinching up you know as we scale up uh that has always been the uh uh you know what do you call it principle under which we are operating. 27:25 27 minutes, 25 seconds So productivity of the branch and overall aum um aum per branch disposal per branch and aum per employee should keep on going up. 27:36 27 minutes, 36 seconds Okay. But see then where I'm coming from is that while we focus on business uh our employee at branch level is 27:43 27 minutes, 43 seconds responsible for collections as well. So in that case you know the AUM per employee continues to inch up. In that case are we planning to create a 27:52 27 minutes, 52 seconds bandwidth for buckets like let's say 31 to 60 and 60 to 90 uh with additional uh bandwidth there. 28:03 28 minutes, 3 seconds No. So the how we facilitate this increase in productivity is only through techn through technology and tools which 28:10 28 minutes, 10 seconds are made available to the employees. So the idea is to take away the time they are spending in mundane tasks and uh 28:18 28 minutes, 18 seconds just focus their attention more on customerf facing activities. So u originating leads uh closing the 28:25 28 minutes, 25 seconds transaction with the customer and uh collecting from uh more difficult customers. These are the key front facing or the customerf facing 28:34 28 minutes, 34 seconds activities that we uh want to spend the time of the front end teams on. So if they are spending time on any other activity like making receipts or you 28:42 28 minutes, 42 seconds know um updating records things like that. So those we continue to you know keep observing in automating those activities. 28:50 28 minutes, 50 seconds But just two follow-ups here which one was that in terms of AUM per branch if you could highlight uh number of branches or percentage of branches with 29:00 29 minutes let's say per branch having below 10 cr sort of a number or or and also 10 to 50 cr sort of a number and the second 29:08 29 minutes, 8 seconds question was where would we plan to add the 30 to 40 branches in incoming uh years. Thank you. 29:15 29 minutes, 15 seconds So 30 to 40 branches would be broad-based. It is not we are not really targeting a specific state as such. We are looking at uh so it's a two-pronged 29:24 29 minutes, 24 seconds strategy. There will be a few additions in new locations or new cities that we have identified across across various states and uh a lot of addition will 29:32 29 minutes, 32 seconds also be in existing cities uh where we are increasing the density of the branches. Uh so larger cities uh where we have a few branches we would be 29:41 29 minutes, 41 seconds increasing the number of branches in the larger cities to improve our distribution and you know access to the customer. So it's going going to be a two-prong strategy. Number of branches 29:49 29 minutes, 49 seconds which are less than 10 crores would be very small. Um so it would be about uh I don't know about 10 maybe 10 odd 29:57 29 minutes, 57 seconds branches which are less than 10 cr in yeah 10 30:08 30 minutes, 8 seconds less than 50 crores you're talking about? Yeah. Yeah sir. 30:12 30 minutes, 12 seconds less than 50 crores will be about 50 branches. 30:16 30 minutes, 16 seconds Got it. Got it. Thank you, sir. Thank you so much for answering our questions. Good luck with the next question. Thank you. Participants, it's a request. 30:24 30 minutes, 24 seconds Please limit your questions to two questions per participant. Our next question is from the line of Konal Sha from Cityroup. Please go ahead. 30:33 30 minutes, 33 seconds Yeah. Uh thanks for taking the question. 30:35 30 minutes, 35 seconds So, uh not sure if a cold ending piece got addressed. Uh so, this quarter it was low. How much time would it uh take to rectify this and again scale it up? 30:46 30 minutes, 46 seconds Uh uh I understand that uh uh the regulatory and or the guideline changes as today but is it addressed to a larger 30:54 30 minutes, 54 seconds extent and when should we again start seeing a pick up in this? 30:58 30 minutes, 58 seconds It should get addressed this quarter. Um so some progress has been made in the first month in April and uh uh by end of 31:05 31 minutes, 5 seconds May uh hopefully all the issues should get addressed. So I think June should be a normal month. 31:14 31 minutes, 14 seconds Okay. So thereafter the run rate of cold ending would be uh similar or maybe better than what we saw last year. That's right. 31:22 31 minutes, 22 seconds Okay. And uh uh secondly in terms of the bounce rates we have heard from many of them that bounce rates have been better 31:30 31 minutes, 30 seconds in April than that of uh March. Okay. uh but I I hear you that you mentioned at least it's better than that of uh April 31:38 31 minutes, 38 seconds of previous years. Uh but how how has been it trending and is it showing any sign of worry in any of the uh pockets 31:46 31 minutes, 46 seconds because of the macroeconomic sectors at this point in time? 31:52 31 minutes, 52 seconds No, as of now there is absolutely no visible impact. I mean there are sporadic uh you know anecdotal you know 32:01 32 minutes, 1 second discussions going on uh but really uh nothing that we are seeing uh you know at a central level in terms of a visible 32:09 32 minutes, 9 seconds impact uh of this whole Middle East issue. Okay. Got it. Yeah. Thank you. 32:18 32 minutes, 18 seconds Thank you. The next question is from the line of Gorav Kandelwa from JP Morgan. Please go ahead. 32:24 32 minutes, 24 seconds Hi good afternoon. Thanks for taking my questions. Uh my first question is on the sourcing rate. So that's third. Is 32:31 32 minutes, 31 seconds the 13% number average for the quarter or is that the exit sourcing rate? 32:38 32 minutes, 38 seconds Average for the quarter. 32:40 32 minutes, 40 seconds And where are we at the quarter end? The exit rates. 32:44 32 minutes, 44 seconds It's similar G. It doesn't vary month to month. Uh so it probably will be two basis points plus two basis points minus. That will be the range. 32:53 32 minutes, 53 seconds See the this is all the pricing is largely uh centrally driven in our case. 32:59 32 minutes, 59 seconds Uh so uh it's all algorithm based. So you know the cases the loans loan applications get logged in and there is 33:07 33 minutes, 7 seconds a rate you know riskadjusted rate which gets generated and communicated to the customer and there is a little bit of a cushion for bargaining that is left. So 33:15 33 minutes, 15 seconds it's a very it's a this is a process we are following since several years. Uh so there will not be generally a you know month-to-month variation once we have 33:24 33 minutes, 24 seconds fixed uh you know once we have fixed a certain rate. 33:28 33 minutes, 28 seconds Got it. Thanks. That's very helpful. My second question u are you seeing more competition in your product segments 33:35 33 minutes, 35 seconds your ticket sizes by the larger housing finance companies of late. The competition always is high but uh any new incrementals there? 33:46 33 minutes, 46 seconds Nothing new as such to report frankly. 33:49 33 minutes, 49 seconds Um it's it's it's I mean it it's always up and down depending upon this depending upon the month or season but otherwise 33:58 33 minutes, 58 seconds uh there is nothing as such new or significant to report. 34:03 34 minutes, 3 seconds Got it. Okay. No, the place where I'm coming from is effectively all of these large HFCs are losing out to the big 34:10 34 minutes, 10 seconds banks in terms of their prime loans and hence uh based my discussions with some of these they are trying to target some 34:18 34 minutes, 18 seconds of the zip codes where you excel in and hence the question. 34:25 34 minutes, 25 seconds Uh yeah but we are not I mean there's nothing significant that we have seen or you know some any new activity that we have seen as of now. 34:32 34 minutes, 32 seconds Got it. No, thank you so much. 34:35 34 minutes, 35 seconds Thank you. The next question is from the line of Joti Katri from Ambbit Wealth. Please go ahead. 34:42 34 minutes, 42 seconds Yeah, thanks for taking my question. Uh, one was with respect to uh ticket size of the loans. Uh, this quarter round we 34:51 34 minutes, 51 seconds are seeing higher growth coming in from the high ticket size loans from 15 to 20 lakhs and 20 to 25 lakh wicket size. Uh, 34:58 34 minutes, 58 seconds so what's the outlook there? uh so assume that if this standard continues uh will it exert some pressure on the 35:07 35 minutes, 7 seconds margin side because I assume that even in the high tickets like ticket size loans competition is relatively higher and the margin pressure too. So what is the outlook there? 35:18 35 minutes, 18 seconds So um you know as we have been saying since last couple of years the uh you know c the customer segment the same customer uh who used to purchase a 35:27 35 minutes, 27 seconds smaller house or a you know lower lower ticket size property earlier is migrating upwards uh but his his or her 35:34 35 minutes, 34 seconds challenges continue to remain the same in terms of the the difficulty in getting loans from a larger from the larger lenders. So we are not targeting 35:41 35 minutes, 41 seconds a more premium customer as such. It's the same customer we are targeting. It's just that the requirements have gone up. 35:47 35 minutes, 47 seconds The the size of the houses, price of the houses have gone up. So which is why we not you're not seeing if you look at you know there has been a there has been an 35:55 35 minutes, 55 seconds increase in the ticket size but you are not seeing such a such an impact on the yield. Uh we are still reporting 36:02 36 minutes, 2 seconds origination yields of 13% and that is largely also because of the drop in borrowing cost. So uh adjusted for borrowing cost there is actually there 36:11 36 minutes, 11 seconds is no decline in yields at all. So the the reason is that we are addressing the same customer and the customer is willing to pay that premium to us to for 36:18 36 minutes, 18 seconds us to solve his problem. Uh so you know 5 years down the line we will be probably talking about a 40 lakh ticket size but you know the customer segment 36:27 36 minutes, 27 seconds is going to remain the same. The challenges are going to remain the same and obviously then the yields will also be the same. 36:35 36 minutes, 35 seconds Okay. Uh fine and second thing is on the uh you know u you know the fact that over the last three months we have seen uh 36:44 36 minutes, 44 seconds interest rates hardening uh do you foresee uh you know although your increment in the cost of borrowing has come down uh and your guidance sustains uh you know five to 5.25% 25% margins. 36:58 36 minutes, 58 seconds Uh do you feel this might continue uh in FI27 as well given the interest rates have hardened in the in Q4 fourth quarter? 37:07 37 minutes, 7 seconds So um let me take it in two parts. 37:10 37 minutes, 10 seconds Quarter one we have enough visibility to uh ensure that the cost of borrowing is in by and large in the same range. uh 37:18 37 minutes, 18 seconds for the rest of the year we will have to see how the actual pricing moves in the market and based on that we will have to 37:25 37 minutes, 25 seconds repric the customers or not repric that decision is not available today we are very confident of maintaining the spread above 5%. Which is in our guided range of 5 to 525. 37:40 37 minutes, 40 seconds Yes. Thank you. Thanks so much. Thank you. 37:43 37 minutes, 43 seconds Thank you. The next question is from the lion of Kushin Parrick from Morgan Stanley. Please go ahead. 37:50 37 minutes, 50 seconds Uh thanks for taking my question. Uh just wanted to understand uh how you are seeing uh asset quality uh on the ground 37:59 37 minutes, 59 seconds uh in the month of April and uh I mean what is your assessment for the year uh and also what your uh guidance is uh on 38:07 38 minutes, 7 seconds the credit cost side. Uh lastly one specific question uh around uh 38:14 38 minutes, 14 seconds collections. Uh I mean uh uh peers have been uh highlighting uh uh some collection issues in the state of 38:23 38 minutes, 23 seconds Karnataka. Just wanted to get uh your assessment of the things. Yeah, those are my questions. 38:31 38 minutes, 31 seconds Uh so u asset quality wise as I mentioned you know April experience has been good uh and it's been better than 38:39 38 minutes, 39 seconds last two years so uh gives us a lot of uh I mean it's a you know gives a lot lot of confidence in terms of how it's going to pan out rest of the year uh 38:47 38 minutes, 47 seconds because if you remember last year April uh you know was much worse than you know March but this year we have not seen 38:54 38 minutes, 54 seconds that I mean it's been much better than last two years um and u u you Overall uh 39:02 39 minutes, 2 seconds you know the for the coming year we feel that I mean if if this is a kind of indicator it should be uh it should be good the credit quality uh experience 39:11 39 minutes, 11 seconds should be good uh for this year. Uh same for Karnataka we are not here if we we don't have any issues on you know as far as Karnataka is concerned. Um generally 39:20 39 minutes, 20 seconds our portfolio quality has been extremely good there. Um and we are not seeing anything on the ground. 39:27 39 minutes, 27 seconds Uh thanks for that. Uh just the guidance on credit cost uh for the next year. 39:32 39 minutes, 32 seconds Credit cost uh is the same the same guidance 30 to 40 basis points. Uh got it. Uh those are my questions. 39:40 39 minutes, 40 seconds Thank you. 39:41 39 minutes, 41 seconds Thank you. The next question is from the line of Magna Lutra from Incred Equities. Please go ahead. 39:50 39 minutes, 50 seconds Yeah, thank you sir for the opportunity. 39:52 39 minutes, 52 seconds I I'm sorry ma'am your line is not audible. Could 40:03 40 minutes, 3 seconds you repeat? Hello. Hello. 40:11 40 minutes, 11 seconds Yes, ma'am. Please go ahead. Yes. Audible. Yes, ma'am. Please go ahead. 40:18 40 minutes, 18 seconds Thank you for the option for the I had one quick question and that what has changed on the sourcing strategy from uh 40:26 40 minutes, 26 seconds Pune and Mumbai specific have been hired in the city plan to replicate in some of the Bombay like Delhi. 40:40 40 minutes, 40 seconds Uh yeah so we have uh you know uh uh so Bombay Pune are you know more formal 40:47 40 minutes, 47 seconds apartment markets uh where the sourcing largely comes from the uh you know developers who are building uh building 40:56 40 minutes, 56 seconds housing projects. Um so we have you know developed a good strategy to kind of tap into that uh you know tap into that 41:03 41 minutes, 3 seconds market and uh get leads from leads from there. Um we already had a good uh similar uh you know similar uh you can 41:11 41 minutes, 11 seconds say um sourcing structure in places like Ahmedabad, Surat etc where which are large developer markets. Uh so we've man 41:19 41 minutes, 19 seconds managed to replicate that well in place like Bombay and Pune which uh uh used to be more of a you can say uh the uh uh 41:29 41 minutes, 29 seconds you know uh I mean the banks used to be much stronger in these markets. So we have been able to kind of penetrate that. So that is the that is the main uh main difference in the souring strategy. 41:44 41 minutes, 44 seconds Yeah. Thank you. Uh can we have some more color on on on how it I mean has been there in Bombay and 41:52 41 minutes, 52 seconds Bombay has been performing as a good market since since I think many uh quarters and recent quarters right. So what is the that happened during 42:01 42 minutes, 1 second the quarter is something that uh I mean the crack that that I mean if you can give some more color on that. 42:08 42 minutes, 8 seconds No not specifically with respect to the previous quarter. I mean so the Bombay Pune uh you can say transition has been taking place over the last uh almost 18 42:17 42 minutes, 17 seconds to 18 to 24 months. U it's just that you know it's become much larger now. Uh so we started this uh transformation about 42:25 42 minutes, 25 seconds 24 months ago and uh you know entering these uh developer uh entering to the developer segment and sourcing customers 42:34 42 minutes, 34 seconds from there. uh it's just that it has become much larger now and uh you know uh it's uh uh really taking off uh you 42:41 42 minutes, 41 seconds know so that uh we so we had we had a we had a I mean last quarter we had a good quarter uh so that is that is the I mean 42:49 42 minutes, 49 seconds it is not that it started last quarter this transformation started some time ago do we to this in Bangalore Delhi 42:58 42 minutes, 58 seconds Hyderabad uh sorry uh can you just repeat that do we plan to replicate this in 43:05 43 minutes, 5 seconds Bangalore, Delhi, Hyderabad, are we going to see higher flows from the bigger cities? 43:12 43 minutes, 12 seconds Uh yes to some extent. Uh but if you look at compare Bombay and Pune with say the 43:20 43 minutes, 20 seconds other cities that you're talking about uh those are more individual housing markets uh as far as affordable housing 43:27 43 minutes, 27 seconds is concerned. Um uh but yes uh some part some part of our Bombay strategy will be replicated in those markets. 43:36 43 minutes, 36 seconds Okay. And lastly is it fair to assume that the co-ending and DA book is largely the large ticket high ticket AUM that we have? 43:46 43 minutes, 46 seconds Uh large part of it is yes. So co- lending is largely 20 20 lakhs plus. So 20 to 40 lakhs is where we do co-ending. 43:55 43 minutes, 55 seconds So a large part of the higher ticket is quality. Good. Thank you so much. 44:02 44 minutes, 2 seconds Thank you participants. Please limit your questions to two questions per participant. The next question is from the line of Suraj Das from Sundra Mutual Sand. Please go ahead. 44:13 44 minutes, 13 seconds Yeah. Hi. Uh am I audible? Yes. 44:17 44 minutes, 17 seconds Yeah. Hi. Thanks. Thanks ma'am. Uh two questions. First if I look at the number of employees per branch uh it has 44:24 44 minutes, 24 seconds steadily increased let us say from nine uh in effort 23 to almost 11. Now do you believe further stinging of the manpower 44:32 44 minutes, 32 seconds will be required given probably the higher attrition in the sector and also the competitive intensity in the sector uh this number can go up further. What 44:40 44 minutes, 40 seconds is your opinion on that? So that is point one. Second question ma'am on this origination yield I mean looking beyond the quarterly movements uh you have 44:48 44 minutes, 48 seconds taken uh 35 basis point PLR increase in F25 uh yet um still the yields remain 44:56 44 minutes, 56 seconds broadly flat on F25 versus F24 if I look at your presentation despite a higher lap now over the past few quarters the 45:04 45 minutes, 4 seconds origination yields are coming down uh and then you have also taken a PLR cut so over the let us say next couple of years do you think uh you know yield 45:12 45 minutes, 12 seconds could remain under pressure given the competitive intensity to sustain growth. 45:19 45 minutes, 19 seconds Uh okay. So on the first question as far as the number of employees per branch are concerned there will be there will be some fluctuation. So you know uh so 45:27 45 minutes, 27 seconds for example if we add another let's say 30 branches uh next year uh you know that number can you know uh will maybe 45:34 45 minutes, 34 seconds come down come down to a couple of quarters and then again pick up. So but broadly it will be in that 9 to 10 11th or 11th range. it's not going to substantially uh jump up. Uh it will 45:43 45 minutes, 43 seconds only gradually move up as the company uh scales up. So maybe 2 to 3 years down the line that number can be a higher number. But otherwise broadly it'll be 45:50 45 minutes, 50 seconds range found in that 9 to 10 9 to 9 to 12 number. Um as far as the yields are concerned uh you know uh so want to just 45:59 45 minutes, 59 seconds draw your attention to the spread. So we have been able to maintain the spread. 46:03 46 minutes, 3 seconds So if you see last three four quarters 5.2 5.3 that we have been talking about we have been able to maintain the spread. So that is the number that we 46:10 46 minutes, 10 seconds are trying to anchor anchor to. Uh so if the borrowing cost reduces then we will pass on some of that to customers and 46:17 46 minutes, 17 seconds you know the yield reduces but we are still able to maintain the spread and uh our increase in uh you know the lap ratio is not very substantial. So we have always been in that 14 15% range. 46:28 46 minutes, 28 seconds It's just maybe a 1% increase uh you know which does not move the needle much. Uh so broadly we are operating in 46:35 46 minutes, 35 seconds that 5% spread 5 to 5.2% 2% spread uh you know uh kind of a construct. Uh so depending upon whatever the borrowing 46:43 46 minutes, 43 seconds cost is at that point of time and we run a fully floating rate book. So we will you know ensure that we maintain that 5 to 520 spread. Uh so we either pass on 46:52 46 minutes, 52 seconds the benefit to the customer or if there is an increase then we kind of you know pass that uh increase to the customer. 46:57 46 minutes, 57 seconds So that just one additional point uh you referred to FI24 versus 20 FI25. Now uh 47:04 47 minutes, 4 seconds what we had done essentially was we were uh looking forward to the cost of borrowing hike that was coming our way and we had led with a price increase at 47:12 47 minutes, 12 seconds that point of time which led to a slightly higher spread and even if we go back in that year our guidance has always remained of spread in 5 to 525. 47:22 47 minutes, 22 seconds We enjoyed uh higher spread for a shorter period and uh in our conversations we've always been guiding 47:28 47 minutes, 28 seconds to this product mix uh that we pling now and uh we will stick to our spread guidance uh uh for some time to come. 47:40 47 minutes, 40 seconds Okay. Okay. Sure. Sure man. Thanks. Yeah. 47:45 47 minutes, 45 seconds Thank you. The next question is from the line of Arvin Ravi Chandran from Sundaram Alternatives. Please go ahead. 47:52 47 minutes, 52 seconds Huh? Actually yeah thank you so much for the opportunity like my question was was on the similar similar lines of Zurich. 48:00 48 minutes Uh but like do we will we see any need to like cut PLR further at least in the shorter term you know if the borrowing rates are like especially the 48:08 48 minutes, 8 seconds incremental borrowing rates are you know broadly stable visa v the book not at the moment. Okay. 48:15 48 minutes, 15 seconds Already done with the 10 basis uh in 1 of January. So we will want to stay put uh for now. 48:23 48 minutes, 23 seconds And uh this PLR cutter like is it is it effective for the entire book uh or like you know does it happen over some more 48:30 48 minutes, 30 seconds time some more quarters uh to cut has to get transmitted to the entire book. 48:36 48 minutes, 36 seconds Yeah. Yeah. Yeah. Okay. Okay. So thank you. 48:41 48 minutes, 41 seconds Thank you. The next question is from the line of Nishin Chavate from KC Institutional Equities. Please go ahead. 48:48 48 minutes, 48 seconds Yeah, hi thanks for uh taking my question. Uh you know if you look at the the AUM growth trajectory uh you know we've come down from around 30 48:57 48 minutes, 57 seconds percentage to around 25 odd percent. Uh you know what gives us conviction uh and and confidence that you know you you 49:06 49 minutes, 6 seconds sustain this this what is it that u you know are we kind of you know actively going to shift into segments or is it is 49:13 49 minutes, 13 seconds it the same segment that that that we pursue? uh are the liability side tailwinds. What is it that gives you this this conviction that this 25 will 49:21 49 minutes, 21 seconds kind of you know remain here and not further tap it down. 49:26 49 minutes, 26 seconds So um um one is that you know the uh you can say the organizational distribution 49:34 49 minutes, 34 seconds strength that we have built uh in terms of our connector network our um um 49:41 49 minutes, 41 seconds branches distribution RMS etc that we have across the country. Last year for a couple of quarters we were still in the 49:48 49 minutes, 48 seconds process of rebuilding that but now you know we have completed that process uh and uh you know our delivery of the last 49:57 49 minutes, 57 seconds two quarters gives us a confidence that yes this is you know a good formula to kind of uh u use or you know keep kind 50:05 50 minutes, 5 seconds of uh building on and uh that is what gives us the confidence that we should be able to um you know do this 25% 50:13 50 minutes, 13 seconds growth. Um so as far as FI27 is concerned our you know u exit momentum 50:19 50 minutes, 19 seconds our u let us say continued dispersal in April so that's what gives us the confidence to you know kind of uh uh 50:27 50 minutes, 27 seconds project that number for FI27 and beyond that uh you know uh hopefully whatever good work we do this year in terms of 50:34 50 minutes, 34 seconds building a distribution and team etc should help us to keep going with the same momentum for the next couple of years. 50:43 50 minutes, 43 seconds Okay. Uh let me be a little more specific. See if I look at your loan book growth uh you know in the last last one year and loan growth accretion 50:51 50 minutes, 51 seconds almost a third of the the you know incremental loan growth comes in from ticket size about 25 lakhs. So you know 50:59 50 minutes, 59 seconds and and I believe you do get you know I think I think you rightly mentioned that you know loans about 20 lakhs are sort of large largely uh you know kind of 51:07 51 minutes, 7 seconds coorinated. So uh you know is this kind of a strategy? How much is the funding cost differential between you know your 51:15 51 minutes, 15 seconds balance sheet borrowings and co- lending or or basically you know co- lending strate on on co- lending and yield differential about 25 lakhs and is this 51:24 51 minutes, 24 seconds really the the way forward you know in terms of we uh kind of you know slowly uh reducing the gap between between us 51:32 51 minutes, 32 seconds and maybe the the the target segment of larger synchronaut companies. 51:38 51 minutes, 38 seconds So it is one in coending is one way to u uh bridge that gap and uh we are using it more as a productivity enhancement 51:46 51 minutes, 46 seconds tool. Um so you know when our distribution uh you know comes across a customer who's uh uh let's say a formal 51:54 51 minutes, 54 seconds customer and who can get a loan from a bank we uh you know push it through the co- lending channel um and I mean in the 52:02 52 minutes, 2 seconds normal course we we are sourcing customers who are in from the informal segment and you know that gets booked as a normal regular home first customer um 52:11 52 minutes, 11 seconds so it's just a you know way to kind of increase the target market offer a better better uh you can say better proposition to our channels um and increase the productivity of the team. 52:21 52 minutes, 21 seconds So that is the strategy behind uh coal lending. Uh but uh having said that you know we are at the moment it is only 52:28 52 minutes, 28 seconds about 4% of our AUM and about maybe 10% of our uh 10% of our origination. Um so 52:36 52 minutes, 36 seconds a good part of the 20 lakh plus is also coming as regular customers which are like I said where there is a you can say increase in ticket size. So same 52:43 52 minutes, 43 seconds customer segment who are from the informal segment but who want a larger ticket size that is also that also forms a part of the uh you know 20 lakh plus uh cohort. 52:54 52 minutes, 54 seconds How much is the difference in cost of funding between co sorry co- lending and uh and balance sheet borrowings? 53:02 53 minutes, 2 seconds very similar uh nint I mean it depends from bank to bank but the range will be less than 20 basis points 53:11 53 minutes, 11 seconds and and how much is the catch up between you and let's say the larger uh you know larger housing finance the triple a rated housing finance companies and cost of funding 53:18 53 minutes, 18 seconds cost cost of funding will be 40 basis points 40 at best 50 not more than that 53:25 53 minutes, 25 seconds so just as these companies you know have a strategy of kind of having a small affordable housing book you you can probably also have a strategy of you 53:32 53 minutes, 32 seconds know having a small prime book I mean win no I don't I think I want to you know come in here and address it's not prime 53:39 53 minutes, 39 seconds the customer segment is the same there is inflation which is causing the ticket size to rise there is lack of 53:46 53 minutes, 46 seconds documentation in these borrower segment otherwise we wouldn't have been able to deliver the yields we are not targeting a prime book I think it's very important 53:54 53 minutes, 54 seconds to differentiate customer the prime customer would seek a rate in today's marketer he would seek a 54:00 54 minutes rate between uh 7 7.25 to 8 right he's not going to pay a penny above 8 to 8% today so that is not the customer we are 54:08 54 minutes, 8 seconds targeting I mean we cannot offer 8 8% even in coending so what we are offering in coending is anywhere between 8 to 10%. 54:16 54 minutes, 16 seconds So these are customers who are uh uh you know like I said you know the same the 54:22 54 minutes, 22 seconds you know what do you call it um customers who are slightly more you know they have some formal source of income etc but who are willing to pay us that 54:30 54 minutes, 30 seconds premium so that is the co-ending portion and then we also have a in the in the same cohort we have customers who are uh you know affordable housing customers 54:38 54 minutes, 38 seconds who have informal incomes etc and who are willing to pay us the rate which is you know say 12.5% or 13% % u earlier 54:46 54 minutes, 46 seconds the ticket sales used to be lower I mean they would have taken a they would have bought a smaller house but now they are going for a larger house their incomes 54:52 54 minutes, 52 seconds have gone up u you know uh and hence they are looking to take a larger ticket housing loan that's the only difference 55:01 55 minutes, 1 second just one last one uh in new market in markets like Mumbai and Delhi the uh the properties would be similar to that of the prime segment but just said the 55:09 55 minutes, 9 seconds customer segment would be different or are we just type Absolutely right. So you know if you see Bombay and Pune as was as I was 55:18 55 minutes, 18 seconds mentioning you know always a mainstream of large banks. Uh so these are all projects which are all RA approved projects. Uh so most of the banks 55:27 55 minutes, 27 seconds operate in these in these projects. Uh so they would take away 90% of the customers who have formal incomes and you know documentation and so on. But 55:35 55 minutes, 35 seconds there's always 10 customers who are left who are uh uh you know who have informal incomes who struggle to get loans from the banks but they are they are 55:43 55 minutes, 43 seconds purchasing properties in the same uh projects and these are all from the deep suburbs right we are talking about Kalyan Amber Balapur Palar these kind of 55:51 55 minutes, 51 seconds places got it got it thank you thank you very much for answering all the questions and all the best thank you 55:59 55 minutes, 59 seconds thank you participants kindly limit your questions to two questions Please. The next question is from the line of Subranchu 56:07 56 minutes, 7 seconds Mishra from Philip Capital. Please go ahead. 56:10 56 minutes, 10 seconds Uh hi, good evening. Thank you for the opportunity. Uh so just wanted to understand uh this growth that we are 56:18 56 minutes, 18 seconds forecasting. Uh what proportion would come from home loans and what portion would be from a lap and uh uh how do we 56:27 56 minutes, 27 seconds think of the demand uh with the West Asia crisis? Is it going to have a a dip in terms of the down payment 56:34 56 minutes, 34 seconds capabilities? Um any kind of uptick that we are seeing in demand maybe for because of the PMA or it or is it a very 56:44 56 minutes, 44 seconds stringent uh uh PMI this time around? Uh so uh just wanted to pick your brains on these aspects. Thanks. 56:54 56 minutes, 54 seconds Yes. So u our mix is likely to remain the same. So we are looking at a somewhere between 15 to 20% loan against 57:01 57 minutes, 1 second property. We are somewhere in the middle of that 16 or 17%. Uh so the ratio of housing to labs will broadly remain in 57:10 57 minutes, 10 seconds the same uh same ballpark which is about 80/20. So 80% housing and 20% loan against property. So that will be the 57:16 57 minutes, 16 seconds mix. Um as far as the you know best Asia crisis is concerned at the moment we are not seeing any impact on the demand. Um 57:25 57 minutes, 25 seconds so hopefully uh you know it should be behind us soon and you know things will move ahead. So as of now we are not seeing any any drop in demand. April has also been fairly good. 57:41 57 minutes, 41 seconds I think the third questions too is it a more stringent uh uh policy than the previous one? Are we seeing any 57:50 57 minutes, 50 seconds kind of uh throughput increase because of that? 57:54 57 minutes, 54 seconds Yeah. So, uh yes, it I mean it has it has uh a slightly more elaborate process. Uh but I think some of the teething issues are getting addressed 58:02 58 minutes, 2 seconds and uh um we should see good traction this year in terms of transmitting the benefit to more number of customers in 58:11 58 minutes, 11 seconds terms of generating new demand. uh uh it it probably has does not have that kind of impact but maybe it gradually it will 58:18 58 minutes, 18 seconds pick up and as more customers get the benefit Yeah. 58:24 58 minutes, 24 seconds Yeah. As more customers get the benefit of the scheme uh you know it will kind of pull in more customers. 58:29 58 minutes, 29 seconds Got it. And just one last question in terms of data keeping what is the differential uh between the uh home loan and the lab product at blended level? 58:41 58 minutes, 41 seconds the uh yield difference 100 to 250 basis points 58:49 58 minutes, 49 seconds and this would be same on an on a APR basis also. 58:54 58 minutes, 54 seconds Yes. Yes. Because we are not I mean for us you know more or less the APR and the uh rate that we are charging. So reducing balance uh rate that we are 59:02 59 minutes, 2 seconds charging. So the APR is almost same as the uh same as the interest rate which is charged because APR calculation also takes into 59:10 59 minutes, 10 seconds account the income. So sometimes it's the income and lap. 59:14 59 minutes, 14 seconds Yeah. Yeah. Very minimal, right? So those are very minimal. So that's why I said it will not it doesn't move the needle that much. I mean it would be a 10 basis point for 59:22 59 minutes, 22 seconds okay. Thank you so much. These are my questions. Thank you. The next question is from the line of Ravi Kumar Naredi from Nared Investments. Please go ahead. 59:33 59 minutes, 33 seconds Thank you to give me the opportunity sir. How much right of badness from profit and loss account this year and 59:41 59 minutes, 41 seconds how many units we auctioned 27. 59:51 59 minutes, 51 seconds So uh the total write offs has been about uh this year has been about 36 crores. 59:58 59 minutes, 58 seconds Okay. So you think this amount is extraordinary high? 1:00:05 1 hour, 5 seconds Uh it's it's by you know the uh scale of the business is growing so it's more or 1:00:13 1 hour, 13 seconds less in line with the uh growth in the business. And how many units we auctioned this? 1:00:21 1 hour, 21 seconds So we auction about uh between anywhere between 50 to 100 units a month. So uh for the year it will be around,000 units. 1:00:29 1 hour, 29 seconds Okay. And sir Aum growth we achieved between March 23 to March 26 is 30% CAGR 1:00:39 1 hour, 39 seconds same growth can we expect expect from next 3 years uh so we have guided to a 25% growth sir 1:00:48 1 hour, 48 seconds ah that I have listened but it can be 30% not possible in current circumstances. 1:00:56 1 hour, 56 seconds Uh at this point difficult to say sir. 1:00:59 1 hour, 59 seconds Okay. Okay. Thank you very much and all the best. Thank you. 1:01:03 1 hour, 1 minute, 3 seconds Thank you. The next question is from the line of Mayank Mistri from Antique Stock Broking. Please go ahead. 1:01:11 1 hour, 1 minute, 11 seconds Yeah. Hi sir. Hi sir. Uh so just uh one question from uh you know on the connector's point I think uh there are 1:01:19 1 hour, 1 minute, 19 seconds many you know players saying that the connector fees is increasing for them and uh just wanted to know uh have there 1:01:28 1 hour, 1 minute, 28 seconds been any higher demand from their side even in your case and uh if you can highlight how how the connective fees 1:01:36 1 hour, 1 minute, 36 seconds has moved since last you know few years and maybe how it should trend. 1:01:42 1 hour, 1 minute, 42 seconds Yeah. So this is a ongoing uh you know negotiation with the connectors. Uh so the u any connector in what whatever fee 1:01:49 1 hour, 1 minute, 49 seconds structure he's at if you are going and ask him he's going to always want to want a higher fee. So that is a constant negotiation with them. So how we 1:01:57 1 hour, 1 minute, 57 seconds normally address that is by u um also addressing other issues which the connectors have which is you know timely 1:02:03 1 hour, 2 minutes, 3 seconds payouts uh you know a wider book of products uh faster turnaround uh so faster turnaround in in to some extent 1:02:12 1 hour, 2 minutes, 12 seconds compensates for you know the uh you know higher fees because if they're able to turn around one more case or two more loans in a particular month that more 1:02:19 1 hour, 2 minutes, 19 seconds than compensates for the higher commissions that they would be probably earning with somebody else. So that is how we kind of address the commission 1:02:27 1 hour, 2 minutes, 27 seconds issue. Um and if there are you know specific tactical you can say 1:02:33 1 hour, 2 minutes, 33 seconds uh what do you call it uh tactical moves that we need to make in in a particular market we do that. So in a particular 1:02:41 1 hour, 2 minutes, 41 seconds location particular connector we need to increase the fees we do that. uh but on a uh on an overall basis I would say 1:02:49 1 hour, 2 minutes, 49 seconds probably we would have seen a previous 10 basis points moment in the uh 10 to 15 basis points moment in the commissions. 1:02:59 1 hour, 2 minutes, 59 seconds Okay sir. So basically it it varies across the connectors and across the geographies. 1:03:05 1 hour, 3 minutes, 5 seconds Yes, varies across connectors and geographies and uh you know we also uh uh kind of u uh plan it uh depending 1:03:15 1 hour, 3 minutes, 15 seconds upon the connectors through port uh the quality of files and you know various other metrics that we track the connectors on. 1:03:22 1 hour, 3 minutes, 22 seconds Okay sir. Thank you. Thank you. That was the only question. 1:03:26 1 hour, 3 minutes, 26 seconds Thank you participants. If you have any questions at this time you may enter star followed by one on your handsets. 1:03:40 1 hour, 3 minutes, 40 seconds We have a question from the line of Adita Pal from MSA Capital Partners. Please go ahead. Am I available? 1:03:48 1 hour, 3 minutes, 48 seconds Yes. 1:03:50 1 hour, 3 minutes, 50 seconds Yeah. Thank you so much for the opportunity. Great set of results and really commendable performance on the asset quality. Uh just wanted to quickly 1:03:59 1 hour, 3 minutes, 59 seconds understand uh what is the issue with Tamil Nadu and Telangana? Is it just 1:04:06 1 hour, 4 minutes, 6 seconds human capital issue or is it something else that you're seeing on the ground? 1:04:13 1 hour, 4 minutes, 13 seconds No as we had mentioned you know it is I think largely to do with internal teams and building the teams uh but now those things are behind us and we should have 1:04:21 1 hour, 4 minutes, 21 seconds a good year as far as Amladu and Telangana are concerned. 1:04:26 1 hour, 4 minutes, 26 seconds Understood. And the other question is on strategy. So in your opening remark, you had said that uh you have successfully 1:04:34 1 hour, 4 minutes, 34 seconds implemented uh agentic AI and and some some piece of work has been already automated. So how are we thinking of 1:04:43 1 hour, 4 minutes, 43 seconds will it will it uh increase our productivity in terms of growth or will it increase our productivity in terms of opex cost? 1:04:54 1 hour, 4 minutes, 54 seconds So uh as of now the you know u prediction I mean we can we are we can more confidently predict the uh outcomes 1:05:02 1 hour, 5 minutes, 2 seconds on the cost side. Uh it is a little more difficult to predict you know what kind of outcomes it will have on the origination side. Uh but eventually it 1:05:10 1 hour, 5 minutes, 10 seconds should have outcome it should have origination outcomes as well. Uh so on cost side definitely yes there will be out there will be a strong outcome 1:05:18 1 hour, 5 minutes, 18 seconds because of implementation of AI because of higher productivity. uh as far as new originations etc are concerned there are some pilots going on uh it could be a 1:05:26 1 hour, 5 minutes, 26 seconds more gradual impact over there I mean they um uh the the the outcome that we're looking for there is uh you know 1:05:34 1 hour, 5 minutes, 34 seconds uh the ability for us to capture uh capture loans which may be otherwise getting declined on the ground uh you 1:05:41 1 hour, 5 minutes, 41 seconds know proactively. So that is something that is uh uh that is going on. Uh if it is successful of course it should help us to improve originations. Uh but that 1:05:50 1 hour, 5 minutes, 50 seconds is something that we will uh it's difficult to predict at this point. 1:05:55 1 hour, 5 minutes, 55 seconds And so that's that's from that's all from my side. Wishing you and the entire team all the very best. Thank you. Thank you. Thank you. 1:06:03 1 hour, 6 minutes, 3 seconds Thank you. Participants with questions at this time, you may enter star and one. 1:06:15 1 hour, 6 minutes, 15 seconds As there are no further questions from the participants, I now hand the conference over to Mr. Manoj Vishvanatan for closing comments. Over to you, sir. 1:06:24 1 hour, 6 minutes, 24 seconds Uh, thank you everyone for joining us today and for your continued interest in home first. We hope we were able to address your questions satisfactory. For any further queries, please feel free to 1:06:32 1 hour, 6 minutes, 32 seconds reach out to Sunilanjan or write to us on investor.reations at homeindia.com. Thank you. 1:06:38 1 hour, 6 minutes, 38 seconds Thank you. On behalf of Home First Finance Company India Limited, that concludes this conference call. Thank you all for joining us and you may now disconnect your lines. Thank you.