Jana Small Finance Bank Ltd — Q4 FY26

Jana Small Finance Bank Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=ONgO7xkHZxM Published: 2 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Jenna Jenna Small Finance Bank Limited Q4 FY26 earnings conference 0:09 9 seconds call hosted by Noama Wealth and Investment Limited. As a reminder, all participal lines will be in the listen only mode and there will be an 0:18 18 seconds opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an 0:25 25 seconds operator by pressing star then zero on a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Miss Sanjana 0:34 34 seconds Fjadar from Noama Wealth and Investment Limited. Thank you and over to you ma'am. 0:41 41 seconds Thanks Yu. Good evening everyone and welcome to the Q4 and FI26 results conference call of Jana Small Finance 0:48 48 seconds Bank. We at NUMA sincerely thank the management team for giving us the opportunity to host this call. From the management we are joined by Mr. Ajay Kandal managing director and the CEO Mr. 1:00 1 minute KS Raman executive director Mr. Abil Sander CFO along with the other members of the senior leadership team. I would 1:08 1 minute, 8 seconds now like to invite Mr. Kwell to share his opening remarks following which we will open the floor for Q&A. Over to you sir. Thank you so much. 1:18 1 minute, 18 seconds Thank you so much. Uh good evening and a warm welcome to everyone. 1:22 1 minute, 22 seconds uh I will refer to the presentation which has been uploaded and I will be referring to specific page numbers so we can all be aligned. 1:30 1 minute, 30 seconds Let me start by page number three. 1:34 1 minute, 34 seconds Last quarter we had given specific guidance what to expect this quarter both on PAD credit cost and slippages. 1:45 1 minute, 45 seconds I'm very happy to report that we have met all the guidances that we had given for Q4 when we had declared the Q3 results. 1:56 1 minute, 56 seconds The first one was PAT. We said we'll do PAT at 140 to 160. We have come at 140. 2:02 2 minutes, 2 seconds Our net credit cost is 156. Uh the gross cost is at 192 which is pretty much 2:09 2 minutes, 9 seconds there. And SMA we said we'll come below four and we are at 3.66%. 2:14 2 minutes, 14 seconds So all of them are met. Now let's look at the Q4 numbers with a clear expectation 2:23 2 minutes, 23 seconds of how the whole stress in MFI is behind us. We had signaled that very clearly in 2:30 2 minutes, 30 seconds Q3 and you can see Q4 being a clear demonstrable quarter for that. 2:37 2 minutes, 37 seconds So let me start with I'm on page three the SMA for March 26. 2:44 2 minutes, 44 seconds is lower than even March 2024 at 3.66% versus 3.99%. 2:51 2 minutes, 51 seconds So we are exiting the stress period with a better SMA book than when we started with the slippages 3:00 3 minutes roughly about 334 crores are the lowest since the 3:08 3 minutes, 8 seconds first quarter of 2020 uh like April to June quarter 25. 3:15 3 minutes, 15 seconds So in the last 8 quarters this is the nearly the one of 3:22 3 minutes, 22 seconds the lowest slippages. So again slippage is back to where it should have been if there was no stress. We can see that in quarter 4. 3:32 3 minutes, 32 seconds Our net credit cost which was 0.79% for the quarter is down to 0.47%. 3:41 3 minutes, 41 seconds Importantly we see it sustaining. 3:45 3 minutes, 45 seconds So slippage is one of the lowest now among the last eight quarters. 3:56 3 minutes, 56 seconds SMA lower than we entered the crisis and net credit cost sustainably at low. So I think from a what is the cost of credit 4:05 4 minutes, 5 seconds I think we've got a reasonably good handle now. Now very importantly is to see how are we doing on the growth side because the quality side is very clear. 4:16 4 minutes, 16 seconds Assets have grown 23% yearonear. Secured assets have grown 28%. We'll go into the details later but 23% is very strong growth. 4:26 4 minutes, 26 seconds Unsecured book under the guarantee program has grown as now is about 77%. 4:33 4 minutes, 33 seconds which being 77% of all future NPAs will be 4:40 4 minutes, 40 seconds uh covered in terms of expectation of receiving monies from the CGMFU stroke CGMC programs. 4:50 4 minutes, 50 seconds Our deposit book has also grown very healthy at 23%. 4:54 4 minutes, 54 seconds And the cost of deposits have dropped by 20s in quarter 4 itself versus quarter 5:02 5 minutes, 2 seconds 3. If you take the full year the drop is about 50 bips. 5:07 5 minutes, 7 seconds Now as we all know quarter 4 is when the deposit pricing is amongst the highest and we have seen that quarter 4 we have 5:16 5 minutes, 16 seconds obviously been pricing it lower. So one should expect that quarter 1 of this financial year we should probably see a 5:24 5 minutes, 24 seconds more mod another moderation of cost of funds too up at 140 crores and I would like to 5:32 5 minutes, 32 seconds draw attention to the right hand side because that chart is the right chart where you can see cost of funds is declining 5:41 5 minutes, 41 seconds the net interest margin is growing it is growing more than the cost of funds decline purely because less interest in 5:48 5 minutes, 48 seconds such expense and of course a very strong and robust asset growth. 5:54 5 minutes, 54 seconds I will now move on to page four. Now these are the key highlights. 6:03 6 minutes, 3 seconds First like I mentioned deposits now at 35,784 crores 23% growth in FI26 cost of funds 6:11 6 minutes, 11 seconds down to 7.46 we began with 8.03% 03% in quarter 4 FI25 6:19 6 minutes, 19 seconds secured assets as we all know that we have been moving towards a 80/20 secured unsecured 6:28 6 minutes, 28 seconds asset uh mix that's been our direction for the last 8 years we have grown 28% yearonear 9% in the 6:37 6 minutes, 37 seconds quarter itself our secured book now stands at 72.6% 6% I will show you the assets in detail in the further slides. 6:47 6 minutes, 47 seconds We've had the highest ever in our history of dispersements in quarter 4 5372 crores in secured dispersements. 6:58 6 minutes, 58 seconds Interestingly, while December we began the what was the best uh December ever in unsecured 7:07 7 minutes, 7 seconds the best quarter in unsecured in 8 years was this quarter which is quarter 4 portfolio grew 10%. 7:16 7 minutes, 16 seconds It actually helped grow the year-on-year growth to 8.5. 7:21 7 minutes, 21 seconds We did the highest ever disbbursement in quarter 4. Highest ever means highest ever in 8 years of 2522 crores which is 7:30 7 minutes, 30 seconds a 24% growth quarteron quarter and as I mentioned slippages are down. Our strategy of 7:38 7 minutes, 38 seconds ensuring that we put the book under credit guarantee program hasn't changed which is why the total guarantee program is at 77%. 7:48 7 minutes, 48 seconds I would also like to mention that there has been a growth in cost. These are specific areas where we we have seen a 7:57 7 minutes, 57 seconds growth but we are primed for operating leverage because we have used last year to really grow some of the areas which will provide greater benefit this year. 8:07 8 minutes, 7 seconds Uh first one is of course the pro guarantee program cost has costed us 55 crores. It will result in benefit of a 8:15 8 minutes, 15 seconds recovery from NPA from the guarantee programs in the future. 8:19 8 minutes, 19 seconds Higher dispersement is less to a cost of 77 crores. See when we give commissions for uh any disbbursement whether it is a 8:29 8 minutes, 29 seconds vendor payment for a valuation or a DSA commission or any legal cost they are all born upfront. They're not amotized 8:37 8 minutes, 37 seconds over the period of the loan. That cost is 77 crores. So yes cost is higher by 77 but we will see the benefit of 8:45 8 minutes, 45 seconds interest income in the in this year itself. 8:49 8 minutes, 49 seconds Some of the areas needed investment collections used car growth that's seen a 55% 55 crores sorry of cost growth and 8:58 8 minutes, 58 seconds of course the new wage code which is applicable to all has costed us 12 crores. So these are the big ones we have done this year so that we can build 9:07 9 minutes, 7 seconds the momentum as we go into this year into the into the current financial year and we will see the benefit of these expense. Obviously we don't have the same investment expectation this year. 9:19 9 minutes, 19 seconds So cost growth will taper off significantly from the current the last financial year in the in the as compared 9:27 9 minutes, 27 seconds to the last financial year. So this financial year will be a much lower cost run rate. 9:34 9 minutes, 34 seconds I'll move on to page number five and this is the important page. So first page was around slippages 9:42 9 minutes, 42 seconds SMA followed by a growth in dis in asset in deposits the strong Q4 and this is about 9:50 9 minutes, 50 seconds the gross NPA. You can read here a credit cost for quarter 4 195 less recoveries which is under other income. 9:59 9 minutes, 59 seconds uh starting this time we've also started mentioning this specifically in our P&L because I think when we do credit cost so that we don't end up with different 10:07 10 minutes, 7 seconds numbers uh we have specifically mentioned it right here itself so net credit cost is 156 at 0.47 10:15 10 minutes, 15 seconds a gross NP at 2.33% net NP at 0.87 87. 10:21 10 minutes, 21 seconds Our additions to gross NPA has been at 334. The lowest was at Q1 FY25 before 10:30 10 minutes, 30 seconds this which was about 324. So nearly about there. Um we are comfortable with 10:38 10 minutes, 38 seconds how we entering the new the current financial year with our credit portfolio health. I'll move on to page number six. 10:50 10 minutes, 50 seconds It basically on the left hand side gives you the state which shows there is really a broad non-conentrated 10:58 10 minutes, 58 seconds distribution of branches. Uh you will find the same true in the way we do assets and 11:04 11 minutes, 4 seconds liabilities too. On the expansion plans we have finished 80 branches in the last financial year uh which is FI26. 11:15 11 minutes, 15 seconds I I just want to show you how we have spent that uh or how we built it. 12 branches are absolutely new. 11:22 11 minutes, 22 seconds Split branches which is size of branch becomes big. We have to split them largely led by MFI growth that's 26. And 11:31 11 minutes, 31 seconds existing branch is relocated to better spots to help liability growth as well as affordable housing that's 42. 11:39 11 minutes, 39 seconds In terms of cost really it is a split branches and new branches which are really fresh cost. Relocations are 11:46 11 minutes, 46 seconds incremental cost only because existing branches do have cost. Relocation makes costs higher but they're not absolutely 11:55 11 minutes, 55 seconds 100% new. Our FI27 plan is to take the same by another 78 branches. 40 will be relocation. So they will not be 12:03 12 minutes, 3 seconds additioned to number of branches. 30 branches will split. Eight will be new. 12:07 12 minutes, 7 seconds So 38 branches will get added as we go to next year. We have finished setting 822. 12:12 12 minutes, 12 seconds So expect that to be at 860 branches next year. New products great line on UPI being tested right now with ST loans 12:21 12 minutes, 21 seconds against shares and mutual funds create an FX as we go live with our AD1 license. That's broadly the plan for 12:28 12 minutes, 28 seconds product launches and branches for next year. I'll now move on to page number eight 12:34 12 minutes, 34 seconds and you will see here our biggest product is affordable housing 8,174 12:42 12 minutes, 42 seconds crores average ticket size 12.7 lakhs uh second highest secured product is microlap 12:51 12 minutes, 51 seconds 6,6300 crores is 6.7 lakhs then MSME loans at 5281 12:58 12 minutes, 58 seconds term loans to NBFC is 1935 5 strong growth in vehicle loans which includes two-heer and used cars which has been a 13:06 13 minutes, 6 seconds addition last year which has grown at 79.6%. 13:11 13 minutes, 11 seconds And gold loans just like the industry uh gold loan is doing extremely well and now the book 13:17 13 minutes, 17 seconds stands at 2358 crores 140% growth from last year. 13:25 13 minutes, 25 seconds Others basically is ODFD, some DA, some employee loans. We've seen a drop in ODFD of a large customer which is why you can see others at negative - 43%. 13:37 13 minutes, 37 seconds Uh but it's it has no real impact from a NIM perspective. Our total secured loan 13:44 13 minutes, 44 seconds stands at 26,332 crores. 13:48 13 minutes, 48 seconds Our unsecured book uh really has um 9,674 crores as unsecured advances. It has 13:57 13 minutes, 57 seconds grown at 10% in the fourth quarter. Um that's helped year-on-year growth of 8.5. We are very happy with the growth 14:05 14 minutes, 5 seconds in terms of how it's performing and we'll talk about it from in the next page itself. And uh it very good news 14:14 14 minutes, 14 seconds because not only has the collections come back uh but we've also seen very robust dispersements uh it probably points out that there are less players 14:22 14 minutes, 22 seconds in the market than they were before the stress began because fundamentally our branches haven't changed our number of 14:31 14 minutes, 31 seconds people in sales haven't changed and unsecured yet we've seen such a strong growth uh which has been our highest ever. it does point out to some unmet 14:41 14 minutes, 41 seconds demand and so the available players are obviously getting uh bigger benefit than they probably would have got if you know 14:49 14 minutes, 49 seconds had all players come back. Uh so that does point out to probably an advantage period till other 14:57 14 minutes, 57 seconds players really come back. Uh I want to go to page number nine is important page. Uh it talks about our um unsecured 15:05 15 minutes, 5 seconds book. 77.1% of book is under guarantee program I already told you that we paid 55 crores 15:12 15 minutes, 12 seconds um in FI26 we paid roughly about 25 26 crores in the previous financial year we are 77.1% 15:20 15 minutes, 20 seconds is book is covered for any event risk which may arise um as of now this book has a net NP of 184 crores which you've 15:28 15 minutes, 28 seconds highlighted there um out of the 184 crores of net NPA 15:35 15 minutes, 35 seconds 151 1 crores is under the guarantee program of which we will receive some of the sums in quarter 3 this year and some 15:42 15 minutes, 42 seconds of the monies in quarter 3 next year. uh but fair to say that you should expect this 77% of unsecured 15:51 15 minutes, 51 seconds book through this financial year cross the 90 95% range or rather come to the 90 95% 15:59 15 minutes, 59 seconds range the strategy won't change and we should probably receive our first uh 16:06 16 minutes, 6 seconds reasonable size check from the guarantee comm uh guarantee program in quarter 3 16:13 16 minutes, 13 seconds this Yeah, I will also want to highlight that the BC book has started doing 99% since January 26. 16:21 16 minutes, 21 seconds Our own book has been doing 99% plus uh since December. Um we are sitting in April now. Uh tomorrow is the last day. 16:32 16 minutes, 32 seconds I can confirm to you that April will also be 99% for both the BC and the bank's own books. So the trend continues to be healthy. 16:43 16 minutes, 43 seconds I did want to make a mention of April because last April was a very uh bad one for us. We were ultra cautious this year 16:52 16 minutes, 52 seconds and I'm happy to report that that challenge of April last year is not being seen at all in April this year. I want to move to page number 12. 17:06 17 minutes, 6 seconds This is our important slide. We always talk about this slide because this is why uh we do think that the bank has a 17:14 17 minutes, 14 seconds competitive mode. This is where we will derive more operating leverage and this is where we'll derive more loyalty form 17:22 17 minutes, 22 seconds customers. As we show you here roughly about this is for all the affordable housing microlab customers. Our average 17:31 17 minutes, 31 seconds relationship which is active is four. If you add the property insurance and life insurance, we made a mention in the 17:37 17 minutes, 37 seconds bottom uh it'll be 6.3 active products so to say for FI26 17:45 17 minutes, 45 seconds and you can see there has been I would say good work across wherever we are short. So I did expect gold to get 17:54 17 minutes, 54 seconds better from 2.2% pen reach 2.9. I still think there is enough and more room to go there. We can see our pre-approved business loan program at 20%. 18:05 18 minutes, 5 seconds It's moved from 18.5. That's been a positive move. Our two has gone up to 1.1. I I would expect this to be between 18:13 18 minutes, 13 seconds 5 to 7. So all round growth. Casa balances are lower at 23.8. Um and we need to do some work here to try and see 18:21 18 minutes, 21 seconds how we can get a CASA balances higher because they were at 28,000 for the previous year. 18:28 18 minutes, 28 seconds key page for us because we do believe that this will stop the balance transfers out and this will really create the one-stop shop which is our 18:37 18 minutes, 37 seconds anchor bank position for a customer base which is the middle of India or as we call it the rising India. 18:45 18 minutes, 45 seconds I'll now move to page 14. 18:47 18 minutes, 47 seconds This is on cost of funds. So first it shows you our kasa book year on year 22.6 time deposit at 23. 18:56 18 minutes, 56 seconds We did lose kasa in quarter 4 at 4.8% 8% loss largely driven through some of the government casa we had um where while we 19:06 19 minutes, 6 seconds didn't have any challenges uh we were certainly we did see some withdrawals as part of 19:13 19 minutes, 13 seconds an industry group um we are hoping to capture some of it back as things settle down but it was a very short notice exit 19:22 19 minutes, 22 seconds of some of the government led CASA um which we couldn't make it up before March end 19:28 19 minutes, 28 seconds um other things which is cost of funds uh continue to show decline we would expect one more quarter of decline and 19:35 19 minutes, 35 seconds then stability after that um our CD ratio including refinance is at 82.9%. 19:44 19 minutes, 44 seconds Uh again 83% of bulk deposits are one and above. As we all know our strategy always has be to take longerterm deposits and not shorter-term deposits. 19:52 19 minutes, 52 seconds And as you know people who put one-year deposits even though they are bulk in nature don't have a 19:58 19 minutes, 58 seconds fly by night or a quick exit um approach in their mind. So these are very stable deposits for us. And of course 92% of 20:06 20 minutes, 6 seconds our retail deposits are more than one year. Our LC is very strong at 143%. 20:12 20 minutes, 12 seconds And on the right hand side you can see the distribution of geographies. Uh we don't have any concentration risk on the deposit side either. So on the funding 20:20 20 minutes, 20 seconds side we've got very good uh support from National Housing Bank from Sidpi from Nabad. We continue availing those as 20:29 20 minutes, 29 seconds well as grew our Kasa and TD book at a strong 23% growth. 20:35 20 minutes, 35 seconds I want to move to page 14 next. Sorry. 15. Uh, next. 20:45 20 minutes, 45 seconds And see, while this page is an important page, you'll find that it's very difficult to pick up one thing 20:53 20 minutes, 53 seconds in this page and saying this is the most standout because everything shows how a digital bank is really making terrific 21:01 21 minutes, 1 second progress across the board. So you take it on the left hand side you will see mobile bank registration up 114% mobile bank transaction up 36%. 21:11 21 minutes, 11 seconds and everything is in large numbers. But for a bank which has an asset and a liability growth of 23% each which is 21:20 21 minutes, 20 seconds essentially focused on doing everything digital is normal to expect that this page 21:27 21 minutes, 27 seconds every quarter will show great growth and as a country we are blessed with a very strong digital platform. So even you see UPI it's up 67% year on year. 21:38 21 minutes, 38 seconds I would expect us to keep showing such very strong growth numbers digit in 21:44 21 minutes, 44 seconds digital space every passing quarter. I want to now move to page number um 16. 21:55 21 minutes, 55 seconds Um I think the important thing to see other than the so our advances is at 36289 22:04 22 minutes, 4 seconds uh these are gross advances 35,784 crores is our deposit base. 22:12 22 minutes, 12 seconds Our quarter 4 ro is at 1.3 our roe is at 13%. 22:20 22 minutes, 20 seconds And it does show that this is more like a normal position of the bank and a book value is 22:28 22 minutes, 28 seconds at 424 crores 424 rupees. Uh that gives you a sense of what a normalized quarter would look for us. 22:39 22 minutes, 39 seconds I would then move to page 23 so that I leave enough time for questions. 22:46 22 minutes, 46 seconds Um on page 23 you will see that sorry 22:59 22 minutes, 59 seconds the guidance okay sorry the guidance is page 22. So I really wanted to point out page number 23:07 23 minutes, 7 seconds 22 and not 23 is the guidance for next year which is uh gross loan portfolio 23:14 23 minutes, 14 seconds growth of 19 to 21% a deposit growth of 23 to 25 and pad year on year should 23:20 23 minutes, 20 seconds grow at 80% plus. Um that kind of summarizes all that I had to say. Uh I 23:28 23 minutes, 28 seconds really want to point out page number 25 before I close. 23:32 23 minutes, 32 seconds um because it's just not about quantity and quality. Um business times along with 23:40 23 minutes, 40 seconds KPMG judge Jenna is the best small finance bank and that award was given to us in Feb 2026 23:48 23 minutes, 48 seconds and uh I did want to share this because while yes we've been through a stretch period as we're exiting we are exiting in a very strong and healthy position 23:57 23 minutes, 57 seconds and uh we would try and make sure that we get this award next year too. Uh thank you so much and I would like to open the call to questions. 24:08 24 minutes, 8 seconds Thank you very much sir. We will now begin the question and answer session. 24:13 24 minutes, 13 seconds Anyone who wishes to ask question may press star N1 on the touchstone telephone. 24:18 24 minutes, 18 seconds If you wish to withdraw yourself from the question queue, you may press star N2. 24:23 24 minutes, 23 seconds Participants are requested to use handset while asking a question. 24:28 24 minutes, 28 seconds Ladies and gentlemen, we'll wait for a moment while the question queue assembles. 24:36 24 minutes, 36 seconds First question is from the line of Wun Shvram from Choice Broking. Please go ahead. 24:43 24 minutes, 43 seconds Uh hello. Uh good evening sir. Uh thank you for the opportunity. So I have uh two or three questions sir. Uh so first 24:51 24 minutes, 51 seconds is looking at the name improvement in the unsecured business. So wanted to know uh does the bank expect any name 24:58 24 minutes, 58 seconds expansion in the coming upcoming quarters? 25:04 25 minutes, 4 seconds So Warun um you want me to answer this question or you uh first then you'll come with the second one is that okay? 25:11 25 minutes, 11 seconds Yeah sure. So okay so see what's happening on NIMI is two things. One is we haven't seen any 25:19 25 minutes, 19 seconds customer pricing drop in any of our products. So what we were able to secure from customers as pricing whether it is 25:28 25 minutes, 28 seconds a micr finance customer or a housing customer or a lap or MSME we haven't seen any dip in pricing 25:35 25 minutes, 35 seconds um what has happened in quarter 4 is uh because the slippages have reduced interest in suspense has not increased 25:43 25 minutes, 43 seconds so that is one reason why has got better second we have seen a 10% growth in our quarter on quarter on unsecured 25:52 25 minutes, 52 seconds That's the reason NIM has improved. Now if you extrapolate that to quarter 1 of this year and quarter two, we do expect 25:59 25 minutes, 59 seconds unsecure to keep growing. So yes, that should help NIM grow. We don't expect slippages to rise. So that should hold 26:08 26 minutes, 8 seconds back because insurance won't go up. It won't go decline significantly because we at a very good spot right now. But that that will not be the reason of name 26:16 26 minutes, 16 seconds increase. We do expect at least one more quarter of cost of deposit decline. 26:22 26 minutes, 22 seconds So yes Q1 is deposit cost of deposit decline improvement on NIM due to unsecured and then Q2 will be flattish 26:30 26 minutes, 30 seconds cost of deposit and still slight improve in NIM because of unsecured growing and you can expect the same behavior in Q3 and Q4. 26:38 26 minutes, 38 seconds Okay. Sure. So thank you so much. So I like you elaborated on uh slippages trend uh uh declining. So wanted to know 26:47 26 minutes, 47 seconds in in the MFI and the unset whether this trend will continue as well. 26:53 26 minutes, 53 seconds Great. So why don't I ask Raman who is my uh rather who's a banks ED and who runs the micro finance business and he has taken over April last year. He is 27:02 27 minutes, 2 seconds the reason for this brilliant performance. I would let him answer this question. 27:06 27 minutes, 6 seconds Thanks. Thanks AJ. U so I mean just to give you a little bit of uh uh trends. 27:12 27 minutes, 12 seconds So the unsecured slippages were around 150 crores in the fourth quarter. Uh it it reduced by about uh 35% in the 27:19 27 minutes, 19 seconds quarter and if I compare with a year ago is reduced by about 50%. Um also the SMA book if you looked at the first slide of 27:28 27 minutes, 28 seconds AJ is on the decline in the SMA book. So the SMA book has also reduced by about 24%. and and therefore uh we do expect 27:37 27 minutes, 37 seconds the slippages to trend lower uh during the uh FI27 27:45 27 minutes, 45 seconds but I mean just so that uh we don't expect to see the decline like steeply steeply 27:53 27 minutes, 53 seconds because I think we're reaching a point where it kind of steadied up correct and you know because at 99 plus% that we 28:00 28 minutes collect is only so much growth you will get in SMA and slippages Uh and like I mentioned earlier our big uh 28:10 28 minutes, 10 seconds pump I would say last year was uh not a great April but today sitting on 29th of 28:17 28 minutes, 17 seconds April I can say we are very very different from last year we will cross the 99% in our unsecured MFI business our secured businesses are doing very 28:26 28 minutes, 26 seconds well again would cross 99% in all of those we specifically focused on doing collections in April this Sir 28:34 28 minutes, 34 seconds I can see on slippage in SMA we are very confident now. 28:39 28 minutes, 39 seconds Okay. Sure. So based on that uh like are we seeing any uh stress signals in 28:47 28 minutes, 47 seconds segments like theme or microlap or any housing portfolio side. 28:53 28 minutes, 53 seconds So listen um one is the only slide 29:00 29 minutes worry we had was on microlab and if you see a page uh just give me a second if 29:08 29 minutes, 8 seconds you see our asset page uh which is page eight so microlab barun last year grew yearon year only 9.4%. 29:19 29 minutes, 19 seconds it was the weakest growth amongst all our secured assets. So consciously we did some tightening across a few geographies etc. 29:28 29 minutes, 28 seconds Uh we are very comfortable with it. We don't see and I think because we went slow last year we are able to kind of 29:34 29 minutes, 34 seconds make sure that uh nothing that could possibly have slipped has arrived and whatever we had to kind of collect 29:41 29 minutes, 41 seconds harder we have done. We not seeing any signs here. They're very watchful on MSME on you know what happens with any 29:49 29 minutes, 49 seconds spillover effects of the Middle East war. Uh nothing is visible to us but 29:56 29 minutes, 56 seconds it's unlikely nothing will impact us. Uh right now impact is unclear. We're very 30:02 30 minutes, 2 seconds watchful. We're very careful but um yeah so that is the only thing on MSME I'll be a bit more watchful. Other than that 30:11 30 minutes, 11 seconds um existing book I can't see any sign which should change our thinking on SMA or uh slippages. 30:22 30 minutes, 22 seconds Okay. So uh last question from my end. 30:25 30 minutes, 25 seconds Um what is your outlook on the credit cost percentage for the coming year and um do we see any additional provisioning requirement for the same? 30:38 30 minutes, 38 seconds So listen um we are not giving specific guidance on credit cost for next year but if you 30:44 30 minutes, 44 seconds take a quarterf number of 0.47 47 uh which is a net credit cost which is on page number five. I think that should 30:52 30 minutes, 52 seconds give you a good signal of uh what one should expect. Um I would uh I would 30:59 30 minutes, 59 seconds probably urge you to view that you'll be in the same range or slightly better at best. 31:07 31 minutes, 7 seconds Sure. So thank you so much for the opportunity. Thank you. Thank you. 31:14 31 minutes, 14 seconds Next question is from the line of Chhattya from Incred Equities. Please go ahead. 31:20 31 minutes, 20 seconds Hello. Uh thank you sir for the opportunity. I had a couple of questions. Uh the first one is like the 31:27 31 minutes, 27 seconds gold loan book has seen good growth this year. So does the yield on the same is at par with the pure play gold? 31:38 31 minutes, 38 seconds Um see our ticket size tends to be closer to two lakh rupees. 31:43 31 minutes, 43 seconds So for that pricing yes uh our gold yields are as competitive as the similar 31:52 31 minutes, 52 seconds yields in the market. So it's higher than of course most uh nationalized banks I would say 32:00 32 minutes um but is not as high as the large NBFCs who are gold specialists because our ticket size is a bit more different. 32:10 32 minutes, 10 seconds Secondly, I do think our opportunity in gold loans which we need to do more of is our smaller ticket high yielding gold 32:17 32 minutes, 17 seconds loans. Um I think we've been less focused on it because the large workforce of our micro finance business 32:26 32 minutes, 26 seconds which could have really cross sold gold in any significant way has been overtly busy in collections. I think now that 32:33 32 minutes, 33 seconds collections are a steady state with 99% achieving much earlier before the month ends. Now I do expect that this year our 32:42 32 minutes, 42 seconds yields will improve in gold as more smaller ticket customers essentially from the micro finance crossell will 32:50 32 minutes, 50 seconds make their appearance. So to answer your question we are competitively positioned in terms of what customer yields there 32:57 32 minutes, 57 seconds are. I would expect improvement in yields in gold in the coming financial year. Okay. 33:05 33 minutes, 5 seconds Okay. Sure. Uh so the next questions that I want to ask is uh on the MFI segment uh what is the percentage of growth are we expecting for the FI27. 33:18 33 minutes, 18 seconds I will let Raman answer that. Uh thanks Saj. Um as you're aware I think last few quarters there was a stress I mean in 33:27 33 minutes, 27 seconds the 24th March we used to be at about 10,000 crores uh and that had come down to 9,700 crores in uh 8,900 crores in 33:35 33 minutes, 35 seconds March 25. Now it's steadily gone up u roughly about 10%. U but as we speak we're still below March 24. Uh 33:44 33 minutes, 44 seconds strategically our focus continues to remain on growing secured faster. the secured book will grow by 25 to 30% and unsecured book is expected to grow by 33:52 33 minutes, 52 seconds about 10 to 12%. So that's that's really the expectation over the next year or so. 33:58 33 minutes, 58 seconds Okay. Uh the third question I want to ask is sir uh when do we plan to reapply for the universal banking and what are 34:05 34 minutes, 5 seconds the chances of getting it approved this time and uh do we have any like impact on our valuation and growth trajectory 34:12 34 minutes, 12 seconds if it if the application is delayed something like that. Yeah. 34:20 34 minutes, 20 seconds So yes, uh now that our results are out, uh we would get back to you know working on resubmitting the application. 34:30 34 minutes, 30 seconds Uh I think that is what was in our mind because we needed the audited results to be completed and uh we have maintained 34:37 34 minutes, 37 seconds the gross NPA of 3 and 1%. um at least these are not the approval criteria but 34:45 34 minutes, 45 seconds these are the gating criterias for an application. 34:50 34 minutes, 50 seconds uh we are diversified, we continue diversified. So we do think we'll probably meet that criteria but yes the work to resubmit the application will start now. 35:00 35 minutes Um you know the reason we wanted to apply for a universal bank was largely from a liability book position. We thought the velocity of deposits and the 35:08 35 minutes, 8 seconds cost of deposit will improve as we you know change our name and drop the word small finance. We have not built that 35:16 35 minutes, 16 seconds into our financials either for this year for sure and certainly for next year because uh you know whether we get uh 35:24 35 minutes, 24 seconds universal or not we still think we have a strong business case um in our numbers. So when we are giving you the 35:33 35 minutes, 33 seconds guidance for next year which is a 80% growth in PAT over this year it doesn't have an any any impact of uh universal bank in the numbers. 35:44 35 minutes, 44 seconds Okay. And the last question I want to ask is regarding Kasa. So any growth uh are we expecting uh for FI27? 35:56 35 minutes, 56 seconds See so Kasa last year you know we were in like a real super position till Q3. 36:02 36 minutes, 2 seconds Um unfortunately for Q4 some of the government Kasa went away uh to shorter a time to recover. Um, but if you just 36:11 36 minutes, 11 seconds say even in spite of the quarter 4 hiccup, you know, where we lost about 8% quarter on quarter, we still did a year-on-year growth in Kasa of 22.6%. 36:22 36 minutes, 22 seconds Had it not been for the last quarter, it probably would be more like a 27 to 30%. 36:27 36 minutes, 27 seconds So, I think we should expect uh around 27 to 30% growth this year in Kasa. 36:33 36 minutes, 33 seconds We're very committed to get the ratio up and our retail business in deposit is doing well. As you probably may have 36:42 36 minutes, 42 seconds seen the ads, we've been the official uh banking partner to RCB. We also upping our marketing spends. So yes, um Kasa 36:51 36 minutes, 51 seconds should do 27 to 30%. Our deposit growth rate as we have already signaled in our guidance 23 to 25%. 36:58 36 minutes, 58 seconds and um without really taking up the number of branches high we've already invested in the RMS and you can see that in the cost increase for FI26. 37:08 37 minutes, 8 seconds So I do think we have fully invested for a 23 25% growth without any significant investments now. 37:15 37 minutes, 15 seconds Okay. Okay. Thank you sir. Thank you. Thank you. 37:21 37 minutes, 21 seconds Next question is from the line of Viral Ma from RPML Capital. Please proceed. 37:28 37 minutes, 28 seconds Hi, good evening sir. Am I audible? Yes. Yes, please go ahead. 37:34 37 minutes, 34 seconds Yeah. So my first question is do you expect the same mix of housing gold and two wheelers to drive next to asset door or do you see the mix changing? 37:44 37 minutes, 44 seconds Um so easy ones first gold very easy yes housing yes uh vehicles yes 37:54 37 minutes, 54 seconds um I do think microlab which just did about 9.4% 4% will do better next year. 37:59 37 minutes, 59 seconds So it'll probably be the 12 to 15% range and I do think that commercial banking 38:07 38 minutes, 7 seconds which has done about 23.3 will probably be in the same range. Um so that's what will happen really. So yes affordable housing primary leader vehicle loans 38:16 38 minutes, 16 seconds gold loans all three won't change. Um I do think you will see a little bit of a pickup in microlab and which is why the 38:23 38 minutes, 23 seconds total secure advance which is looking like 27.6 6% uh yearon-year last FY in current financial we should be closer to 30%. 38:34 38 minutes, 34 seconds Okay. So and my uh second question is do you see any sign of Iran war impact on your portfolio? How do you intend uh preparing for a prolonged war? 38:46 38 minutes, 46 seconds So this is a very tough one you know um there is no significant signs. 38:52 38 minutes, 52 seconds Okay we can see sporadic nature of customers. So I'll give you a simple uh real life issue. Okay. 39:01 39 minutes, 1 second Uh so one of our customers owns a petrol pump and uh last thing we would expect a petrol pump owner not be able to pay an 39:09 39 minutes, 9 seconds EMI. Uh and he did say that the number of tankers he's getting which we used to be 10 in the past is down to two. So 39:17 39 minutes, 17 seconds obviously he's getting less uh fuel to sell. So obviously he's feeling a bit stressed. So that's one example. We have 39:25 39 minutes, 25 seconds not seen more examples like this. But you know we have to watch out because there there will be some impact. It cannot be zero impact. Now how significant with which customer class? 39:36 39 minutes, 36 seconds We have to keep our eyes open. Uh like I said April collections are very good. Uh they're pretty much like March collection. So we haven't seen any real 39:44 39 minutes, 44 seconds impact in our business customers or even our individual retail customers as yet. 39:51 39 minutes, 51 seconds uh we just watching for sectors we have to be careful of in MSME and uh fortunately we always have a secured 39:58 39 minutes, 58 seconds strategy so we do think we have to keep watching out but right now nothing which worries us really 40:06 40 minutes, 6 seconds okay sir okay thank you sir that's it from my side thank you thank you 40:13 40 minutes, 13 seconds next question is from the line of Rohit Roi from ambit BCG please go ahead 40:20 40 minutes, 20 seconds Yeah. Hello sir. Uh so first of all congrats on the good set of numbers and sir so my first question is that how was 40:28 40 minutes, 28 seconds the outcome of branding with RCBT team during this IPL season. Did we see a uptick in the number of deposits or CSA growth in April? 40:39 40 minutes, 39 seconds So April we have seen a tick up in the kasa and the retail TD growth. Um I would I I don't know whether it's 40:47 40 minutes, 47 seconds sustaining so I don't want to make a very strong case uh that this is the you know way we should look at it but it did 40:55 40 minutes, 55 seconds see a lift of about 15% in the month of April itself. Um I I do think I do think 41:04 41 minutes, 4 seconds we will be investing more in our branding and marketing efforts as we go into this year. 41:11 41 minutes, 11 seconds uh you can see that one of the reasons is you know last year there was so many challenges you know the distraction of 41:22 41 minutes, 22 seconds uh trying to fix the unsecured flow rates was so high that we kind of missed a few things. So yes uh we will be 41:29 41 minutes, 29 seconds investing more in branding and we think the RCB tie-up uh has been uh a very good tie up for us and fortunately the 41:37 41 minutes, 37 seconds team is playing well so we hope that they continue playing well and we get as much advantage as possible from their good performance. 41:48 41 minutes, 48 seconds Okay. Uh so my second question is actually that have we made any to uh 41:55 41 minutes, 55 seconds CGFME yet? what can we expect in terms of recoveries from them during the current financial year? 42:02 42 minutes, 2 seconds So I'll let Raman uh address that question. Um thanks AJ. You want to add? 42:07 42 minutes, 7 seconds No, we have not made any claim from CDMF in FY uh 26. The claim will start from Q3 of this financial year. Yeah. 42:15 42 minutes, 15 seconds So as for their process, no I think July August you kind of start loading the claims and uh around October you should 42:24 42 minutes, 24 seconds expect the payout. So no claims can be made but it shall be made in July August. Yeah 42:32 42 minutes, 32 seconds with October being the first month we should probably expect some payment. 42:36 42 minutes, 36 seconds Our rough and ready estimate is we should expect about 65 crores for under CGMFU in quarter 3 this year. 42:47 42 minutes, 47 seconds Okay. Okay. Uh so my uh third question is actually how's the used car business performing now and any new product 42:55 42 minutes, 55 seconds launch expected during uh the current year? 43:01 43 minutes, 1 second Yeah. So used car uh for everyone's u information we launched in October last year. 43:08 43 minutes, 8 seconds We are now doing a strong run rate of 25 crores dispersal a month. Uh we have a scorecard which has been tested. It's a 43:16 43 minutes, 16 seconds digital process tested. They've got hundreds of um 43:23 43 minutes, 23 seconds partners which are large uh distributors of used cars who are already signed up 43:30 43 minutes, 30 seconds which is why we are doing 25 crores in March and we expect to improve that. We are operating in 15 cities 15 we expect 43:38 43 minutes, 38 seconds to take that up to 35 cities by September. So, Yuskar touchwood um launch has gone well. Uh we should see 43:47 43 minutes, 47 seconds some scale up this year and uh we like everything we see about that business. 43:55 43 minutes, 55 seconds Okay. Uh so my final question actually uh so what was the reason for VA transaction which was done during the year? 44:05 44 minutes, 5 seconds Yeah. So you know as you know we have a target to meet both SMF and agree. Uh 44:12 44 minutes, 12 seconds SMF is small and marginal farmers and then the overall target of 18% on agree. 44:18 44 minutes, 18 seconds We comfortably meet the SMF target which is a small and marginal farmer because we do lot of we have you know as you know we have 30% plus of unbang rural 44:27 44 minutes, 27 seconds branches and we do engage lot of farmers with our uh MFI group loan and individual loan product. We don't have 44:35 44 minutes, 35 seconds much of corporate agree business. Uh we have we hadn't developed it. So we tend to be short on agri assets and which is 44:43 44 minutes, 43 seconds why we do some DA which is only about 284 crores as a merchant uh to meet the agree criteria. It is for nothing else. 44:51 44 minutes, 51 seconds As you know small finance banks can't do any PSNG transactions unless they're short or long in any 44:58 44 minutes, 58 seconds particular subcategory. Um and so this is just to meet that short requirement. 45:04 45 minutes, 4 seconds We are starting to do agri supply chain. 45:08 45 minutes, 8 seconds We had hired the team in last year. Uh we have seen the first transactions actually start now. So I would still 45:16 45 minutes, 16 seconds think we'll do a probably a few days this year because you know the book is expected to grow the asset book will grow about 21% or 19 to 21%. So we will 45:25 45 minutes, 25 seconds certainly need to do our kota of uh SMF and agree. Uh but I do think it'll be not a big number at all. 284 crores in a 45:34 45 minutes, 34 seconds you know already a 36,000 cr book is not a big number. 45:39 45 minutes, 39 seconds Okay. Uh thank you so much sir. That was really helpful and once again congratulations on the great book. 45:47 45 minutes, 47 seconds Thank you. Thank you. God bless you. Thank you. 45:52 45 minutes, 52 seconds Next question is from the line of Suraj Shindai from Yes Securities. Please proceed. Hello. Am I audible sir? 46:00 46 minutes Yes sir. Yes please go ahead. Uh so uh congratulation on great set of number and good evening sir. So my first question is on the recovery side. So 46:09 46 minutes, 9 seconds recovery from bad debt is at around 120 cr. So does this trend seem sustainable to you? So or how do you see in the future as well? 46:19 46 minutes, 19 seconds Um the recoveries I mean if if you look at our last few years uh we've seen similar trends in terms of recoveries. 46:26 46 minutes, 26 seconds So these are primarily from accounts which are either fully provided or technically written off. Um and and just from an accounting standpoint uh some of it can be booked under the revenue line. 46:37 46 minutes, 37 seconds Uh but the bank's credit cost is to be adjusted with these recoveries as if the recoveries were not made and that's really the uh key point. So so I mean 46:46 46 minutes, 46 seconds back to your question uh can we look at a similar trend uh going forward? I I do believe so. 46:51 46 minutes, 51 seconds Okay. Okay. Great sir. And second question is on the cost of deposit have been sliding down. Do we know what is the incremental cost of deposit for the 46:59 46 minutes, 59 seconds quarter given the tightness of liquidity? How do you intend to sustain that uh low cost of capital? 47:08 47 minutes, 8 seconds So uh listen April to be honest has been there is not as much tightness of 47:15 47 minutes, 15 seconds liquidity. I think the trend that is you know in the banking side is 84% of all 47:21 47 minutes, 21 seconds new deposits in banking not Jana is in time deposit only 16 is per coming in kasa so the real hard yard for certainly 47:31 47 minutes, 31 seconds us and I guess lot of our peers is to grow kasa um like I mentioned you know quarter 4 47:39 47 minutes, 39 seconds is when you kind of have the biggest price uh fight amongst banks for deposits 47:46 47 minutes, 46 seconds We have seen our quarterf pricing for deposits in FI26 lower than FI25. 47:55 47 minutes, 55 seconds But because most of the deposits are really March maturities and F maturities, you will see a full impact in quarter 1 this year. So yes, quarter 48:03 48 minutes, 3 seconds one this year cost of deposits will fall. Are we seeing a significant tightness in liquidity? There is no tightness in liquidity which is visible. 48:12 48 minutes, 12 seconds I think uh but do we expect interest rates to decline further? I don't think so. I think we should see at least in 48:19 48 minutes, 19 seconds our head from what we see customers doing and competition doing. You should expect flat interest rates. So no more 48:26 48 minutes, 26 seconds decline beyond Q1 is how I would read it. So Q1 will probably be a lowest point of cost of cost of deposit. 48:35 48 minutes, 35 seconds Um yeah and you know if we can do some better magic in growing CASA beyond the 27 to 30% that we are trying then our 48:43 48 minutes, 43 seconds cost of funds could come down in the further quarters. 48:47 48 minutes, 47 seconds Okay. Okay. Great to hear. And one last question is on the borrowing in the Q4 have gone up significantly around 1,500 crores raised from financial 48:55 48 minutes, 55 seconds institutions. So what is the cost of this uh fund that we have raised and uh why we have raised this uh fund? So 49:03 49 minutes, 3 seconds where do we see the utilizations coming from? 49:07 49 minutes, 7 seconds Sure. Uh so first to answer the first part of your question which is the rate the cost these are been raised from 49:14 49 minutes, 14 seconds Nabad CBA and NHV typically the and these are longer 10ear sort of borrowings and the blended cost of these 49:22 49 minutes, 22 seconds borrowings is around 7% 6.9 to 7% that's the range at which we uh borrow. So essentially what it does is it primarily 49:31 49 minutes, 31 seconds the focus of these borrowings is to enhance our ALM. So because these are 10 years, 8 year and so on. So this helps 49:38 49 minutes, 38 seconds in uh improving our ALM. These are also long-term borrowing. So long-term stable borrowing. That's the reason we raise it. Uh and also there is no CR SLR 49:47 49 minutes, 47 seconds impact on these borrowings. So combination of these three is why we do the borrowing and the rate which I explained is around 6.97%. 49:54 49 minutes, 54 seconds So clearly I mean the rate of these borrowing is lower than our cost of deposit. Uh so that is one uh the tenor 50:01 50 minutes, 1 second is longer and we are fortunate to have the refinance books available. So you know you have to have an affordable housing book uh which meets the criteria 50:10 50 minutes, 10 seconds of national housing bank to get refinance. You need to have the MSME book to get SIB B. You need to get the agree book to meet NH sorry Nabad. We 50:19 50 minutes, 19 seconds have those asset books. uh we could borrow more honestly because it's lower cost than deposit but we also want to be prudent. So we tend to have about 12 to 50:28 50 minutes, 28 seconds 15% of our total book funded through these long-term quasai government uh financial 50:37 50 minutes, 37 seconds institutions and we intend to kind of remain with this percentage even going into next year or rather into this financial year. 50:46 50 minutes, 46 seconds Okay. Okay. Sir last question from my side. What is the guidance on the cost to income ratio for this financial can this become uh can can this come down below 60%. 50:58 50 minutes, 58 seconds Uh we will make every attempt to do it. 51:01 51 minutes, 1 second Uh and I can tell you what will be in its favor. Uh first is like I said you know lot of the big investments that we 51:08 51 minutes, 8 seconds made this year because the cost has been running hard rel to our revenue this year. I think that will that will show 51:16 51 minutes, 16 seconds better results next year. So we don't have to spend so much in cost growth in current financial year. Uh secondly our 51:23 51 minutes, 23 seconds revenue will run much faster. Uh because obviously we have had a very strong quarter four. We are also seeing an unsecured growth which was a challenge 51:31 51 minutes, 31 seconds last year. So if you take combination of those two uh you and of course lower cost of funds this year versus average 51:40 51 minutes, 40 seconds of last year uh we should see better revenue lower cost growth and hence a better cost income. I just want to tell 51:47 51 minutes, 47 seconds you and everybody else on this call that March 24 our cost income was 57%. 51:55 51 minutes, 55 seconds As a management team we always remember that number. Uh it also tells us that where we could be if things settle down 52:04 52 minutes, 4 seconds the way we wish it to be settled down and um yes we would be working as hard as we can to bring this down more significantly uh as fast as we can. 52:15 52 minutes, 15 seconds Okay. Okay. Thank you for s detailed explanation and best wishes for the FI27s. 52:21 52 minutes, 21 seconds Thank you sweet of you. Thank you so much. Thank you. 52:23 52 minutes, 23 seconds Thank you ladies and gentlemen. We will take this as the last question for the day. I now hand the conference over to the management for the closing comments. 52:33 52 minutes, 33 seconds Uh thank you so much. Um folks I think first is to all our uh um analysts investors who are on this 52:42 52 minutes, 42 seconds call um I must thank you for your patience. We it's been a tough uh journey from April 25 to December 26. 52:53 52 minutes, 53 seconds I think those seven quarters have been hard for us and thank you for your patience and belief. Um we did signal that quarter 3 was our bottom quarter. 53:05 53 minutes, 5 seconds Um and quarter 4 just to make sure that nothing was lost in terms of what people should expect. We had given a quarter 53:12 53 minutes, 12 seconds for guidance. That's the only time we've done it and that's the only time we will do it and we've met those guidances. 53:19 53 minutes, 19 seconds Um I think we're exiting the crisis in a much more solid shape with SMA book lower with secured book higher and with 53:29 53 minutes, 29 seconds more diverse businesses because certainly we have seen you know the gold business become a real business of size 53:36 53 minutes, 36 seconds in the last 18 months we have seen used cars quickly r you know ramp up and now become a contributor this year um I 53:45 53 minutes, 45 seconds missed answering a question in the past now that I'm talking about remember what are products to be launched a credit line on UPI we've done all the work we 53:53 53 minutes, 53 seconds do expect that to have some solid uh results that will go live this year our 81 license with FX uh opportunity along 54:02 54 minutes, 2 seconds with trade will go live this year so we do think that we are very conscious on one thing we've 54:10 54 minutes, 10 seconds seen a big cost growth last year we don't want to see that this year so very measured in terms of what we will spend 54:16 54 minutes, 16 seconds on cost and we'll maximize ize our uh growth which we have seen in quadflour and continue same growth through this 54:23 54 minutes, 23 seconds year and u I really would try my best along with the team at Jenna to make sure that we more than meet our guidance. Thank you so much. 54:36 54 minutes, 36 seconds Thank you sir. On behalf of Noama Wealth and Investment Limited that concludes this conference. Thank you all for joining us and you may now disconnect 54:45 54 minutes, 45 seconds your