Tamilnad Mercantile Bank Ltd — Q4 FY26

Tamilnad Mercantile Bank Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=M5fHaGB2Rvk Published: 2 weeks ago

0:01 1 second [music] 0:02 2 seconds Ladies and gentlemen, good day and welcome to the Q4 and FY26 earnings conference call hosted by Tamil Nad 0:11 11 seconds Merkantile Bank Limited. This conference may contain forward-looking statements about the company which are based on the 0:19 19 seconds beliefs, opinions and expectations of the company as on date of this call. 0:25 25 seconds These statements are not the guarantees of future performance and involve risks and uncertaintities that are difficult 0:32 32 seconds to predict. As a reminder, all participant lines will be in the listenonly mode and there will be an 0:40 40 seconds opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an 0:49 49 seconds operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. 0:57 57 seconds Today on the call we have with us the following management representatives. Mr. Sali S Nyer, managing director. Mr. 1:06 1 minute, 6 seconds Vincent Manachari Deasi, executive director. Mr. Sanjay Kumar Goel, Chief 1:13 1 minute, 13 seconds Financial Officer. I would now like to hand the conference over to Mr. Sali S. 1:19 1 minute, 19 seconds N the managing director from Tamil Nad mercantile bank. Thank you and over to you sir. 1:27 1 minute, 27 seconds Yeah thank you and uh uh good evening to all of you. Uh 1:33 1 minute, 33 seconds today we have come out with our yearly results uh for FI26 and uh before I 1:41 1 minute, 41 seconds really get into that I really I want to take you back to our call after my quarter 3 results. 1:49 1 minute, 49 seconds uh that was in January of the FI27 wherein we had given certain guidances. 1:56 1 minute, 56 seconds I I would like you to um look at those guidances that we have given. What we have stated uh in the con call in 2:05 2 minutes, 5 seconds January after the Q Q3 results Q3 FI26 results is that uh that 2:13 2 minutes, 13 seconds what we have stated is we will grow the SCASA by 15%. 2:18 2 minutes, 18 seconds In quarter 4 we have stated that the dep uh deposits growth will be in the 13 to 13.5%. 2:25 2 minutes, 25 seconds Advances growth will be in 16 to 17%. 2:29 2 minutes, 29 seconds Total business would grow uh 15% plus net interest margin will be 3.90 to 3.95%. 2:37 2 minutes, 37 seconds ROA will be 1.85% plus and roe will be 14% plus and GNPA 2:45 2 minutes, 45 seconds will be less than 1%. So that's the guidance we gave. In fact, we gave guidance for our quarter two and quarter one also. And you will recall that we 2:54 2 minutes, 54 seconds have exceeded all the guidances. Quarter one guidance, quarter two guidance and I just stated the quarter 3 guidance and 3:01 3 minutes, 1 second we will look at where we stand in respect to those guidances shortly. 3:06 3 minutes, 6 seconds So coming back to the FI26 and uh it it has been a year of transformation for us 3:13 3 minutes, 13 seconds and it's something that I stated in FI25 at the close of FI25 itself that we have unleashed a lot of transformation 3:21 3 minutes, 21 seconds journeys automation uh automation technology intrusion structural changes etc. and that the impact of that will be 3:30 3 minutes, 30 seconds felt in FI26 and more specifically I stated that it [clears throat] will be felt more in the quarter 2 of FI26 and 3:39 3 minutes, 39 seconds where do we stand in when we close the year uh very clearly we have been able to lay the foundation for growth uh kata 3:48 3 minutes, 48 seconds share decline has been arrested and reversed uh it the quarter also saw the highest deposit growth in last 39 3:57 3 minutes, 57 seconds quarters that is 10 years. It's the highest advanced growth recorded in the past 40 quarters. Business growth when 4:05 4 minutes, 5 seconds we close the year uh is 9.35% over the last 10 years compounded annual 4:13 4 minutes, 13 seconds growth rate what we achieved in the last 10 years FI26 we have grown 9.35% over that. So that's the transformation that 4:22 4 minutes, 22 seconds has been achieved and this all comes with the credit portfolio where the quality continue continuously has improved onput PCR is at 10% high credit 4:31 4 minutes, 31 seconds cost is under control the lowest G&P again in the last 40 years why I'm saying 40 years is because 40 quarters 4:39 4 minutes, 39 seconds sorry not years 40 quarters why I'm saying is the 40 quarters are numbers available and we we see that it is the lowest in the last 40 quarters and the 4:47 4 minutes, 47 seconds lowest ever SMA percentage and we come those numbers uh a little later business uh the presence of our footprint has 4:56 4 minutes, 56 seconds also expanded 44 branches be opened 15 of them outside Tamil Nadu the 12 CLC's are set up uh the liability arms were 5:04 5 minutes, 4 seconds introduced digital transformation is nearing completion all these are happen are actions that happen in FI26 5:11 5 minutes, 11 seconds so what the impact on the on the on the market the shareholder value delivered has gone up 50% in the last 12 months 5:19 5 minutes, 19 seconds market capitalization cost to 10,600 crores. The shareholder funds after the result is uh is about 10,000 crores with 5:28 5 minutes, 28 seconds a book value of 638 and and the board also has declared or rather recommended a dividend of 125%. 5:37 5 minutes, 37 seconds uh for FI26. So now coming back to what I just stated earlier in my my opening 5:44 5 minutes, 44 seconds uh uh statement on the guidances look at the guidance of Kasa growth we we stated 5:50 5 minutes, 50 seconds that we will go 15% flux FI26 and that growth eventually is 22.35%. 5:58 5 minutes, 58 seconds Kasa stands at 17,365 crores that is at 22.35% 6:04 6 minutes, 4 seconds uh yearon-year growth your total business is at 17.37 that's 6:12 6 minutes, 12 seconds 7% and total business aggregation on 31st March 26 to 1 lakh 15,91 crores and 6:21 6 minutes, 21 seconds against our guidance for the year is 15%. So 17.37% achievement against our guidance of 15%. 6:31 6 minutes, 31 seconds We said we stated would be in the 13 to 13.5% we ended up with 14.94%. 6:37 6 minutes, 37 seconds Uh the advances we said we would be in the 16 to 17% we ended up with 20.32%. 6:44 6 minutes, 44 seconds This 20.32% is also after selling up,000 crores to the IGPC in the bank participant certificate. If you add that back, it is actually 22% plus. 6:58 6 minutes, 58 seconds So this uh the the uh the business the strong business growth has also resulted 7:05 7 minutes, 5 seconds in strong profitability uh parameters the net interest income is up 24.04% 7:14 7 minutes, 14 seconds is at 704.45 crores. Operating profit for the quarter was 29.29% yearon year. 7:21 7 minutes, 21 seconds Net profit is 373.65 crores which is 28.01% 7:27 7 minutes, 27 seconds 28.01% yearon year RO A R O A where we had 7:35 7 minutes, 35 seconds even a guidance of uh 1.85% plus as is actually 2.05%. 7:44 7 minutes, 44 seconds and roe where we said it will be 14% plus we have actually able to break the 15% mark and it is at 15.03%. 7:52 7 minutes, 52 seconds So all these uh you know growth that we have delivered in excess of the guidance we have given has come back on the strong business growth uh particularly 8:01 8 minutes, 1 second the advances growth and uh all these are conflicting look at 8:08 8 minutes, 8 seconds the kasa share that we have kasa share we had touched 26.44% 8:15 8 minutes, 15 seconds on 31st of March 25 it is up 1.7% now to 28.14%. 8:22 8 minutes, 22 seconds For the quarter the net interest margin 4.18%. 8:26 8 minutes, 26 seconds Uh the cost to income ratio is at 44.80%. 8:30 8 minutes, 30 seconds Federal cost I think has largely been met by resolutions or the or the provision right back. It stands at one basis point. 01 0.01%. 8:41 8 minutes, 41 seconds GNTA as a consequence of the kind of efforts we have taken is at 0.73%. 8:48 8 minutes, 48 seconds and net NPA is at 0.18%. 8:53 8 minutes, 53 seconds So, and SMA I'm including SMA 01 and 2 is at 1.29%. So, this is down 1.26% 9:03 9 minutes, 3 seconds from last year. So, portfolio at risk one day is at 2.02%. Which is SMA 012 9:13 9 minutes, 13 seconds and NPA together is only 2.02% 02% of the advances portfolio. I think that I 9:20 9 minutes, 20 seconds wonder if any other bank has been able to uh get to that kind of a number in in India. So the PCR uh on book PCR is uh is 74.89%. 9:34 9 minutes, 34 seconds That's a full 3.87% 87% over last year over 31st of March 25 number and TCR with technical write off is 96.14%. 9:48 9 minutes, 48 seconds If I get into some of the granular details deposit current account I mentioned the total deposit grew at 14.94% 9:55 9 minutes, 55 seconds the breakup is here current account has gone up 25.62% 62% we did a lot of initiatives here the uh the the TBG was 10:04 10 minutes, 4 seconds brought in last year and that has now begun to kick in and 25.62% is the result savings bank again is 21.04% 10:12 10 minutes, 12 seconds that's a good story that we have to say uh and the CA overall is at 22.35% term depos deposits per se is like I said has grown 14.94%. 10:23 10 minutes, 23 seconds So it is a it is a growth strengthened across the quarters you know quarter after quarter we have been growing the 10:30 10 minutes, 30 seconds ka has been moving up the deposits have been growing every quarter we have bettered the previous quarter's growth so that's the story that PMB is putting 10:39 10 minutes, 39 seconds on the table today on the advanced side uh retail agree MSME and has all grown 10:49 10 minutes, 49 seconds on in fact on a yearon-year basis retail which is largely driven by uh the the bold portfolio is up 52.33 10:57 10 minutes, 57 seconds agriculture 8.03 MSME is another story that we have MSME if you recall has been degoing 11:06 11 minutes, 6 seconds until as as late as the first quarter of FI26 it has now turned around and has 11:12 11 minutes, 12 seconds delivered a 14.88% 88% growth y. So that's another story that we would like to see and this story will get 11:19 11 minutes, 19 seconds strengthened in FI27 as well. So overall the advances have grown 30.32%. As I 11:27 11 minutes, 27 seconds said this advanced growth of 20.32% is coming after we have sold off,000 crores 11:35 11 minutes, 35 seconds of our portfolio in the through the IBPC route in Q4 of FI26. Now if you take 11:42 11 minutes, 42 seconds that also into account the real advances growth is 22.57 uh 7%. 11:51 11 minutes, 51 seconds Again uh the last three four quarters the advances have been consistently moving up. Uh the the growth every 11:59 11 minutes, 59 seconds quarter is measuring the previous quarter for the first time. We have also 12:07 12 minutes, 7 seconds showcased the profitability uh the the the ROA of our advanced portfolio retail advanced portfolio. Uh the yield is at 9.98%. 12:17 12 minutes, 17 seconds Uh the NPA there is 0.13% and the ROA is 2.21%. So this is a good portfolio with a with a very very comfortable ROA at 12:26 12 minutes, 26 seconds 2.121%. Agree advances again driving on the gold loans is at 2.04% ROA. uh where 12:34 12 minutes, 34 seconds the NPA thanks to the gold prices is at just 0.16% another big story where we have a growth 12:41 12 minutes, 41 seconds of 14.88 88 yield that is at a good 10.52% resulting in ROA of 2.58% on a portfolio basis. 12:54 12 minutes, 54 seconds The gold portfolio is something that you know the gold prices are something that we watch 24 by7 and uh uh the 13:02 13 minutes, 2 seconds sensitivity if you look at the uh the slide number 14 of what we have sort of uploaded into the exchanges 13:10 13 minutes, 10 seconds uh our ability to withstand a gold price reduction is 25%. 13:18 13 minutes, 18 seconds It does the gold price reduction of up to 25% can easily be absorbed by our current portfolio. The portfolio LCB is 13:26 13 minutes, 26 seconds just 53.25% from 37 26 uh portfolio yield is 10.11%. 13:33 13 minutes, 33 seconds a good yield uh for a gold portfolio and the gold uh 13:43 13 minutes, 43 seconds uh gold loan share in the overall overall advances is 46.44%. 13:50 13 minutes, 50 seconds And again here let me also tell you that uh we the LTV is calculated not on the gross weight of of the portfolio but on 13:59 13 minutes, 59 seconds the net weight that the gross weight to net weight you know difference is about 9.33%. So that also adds to the question 14:07 14 minutes, 7 seconds which I mentioned earlier that our ability to withstand a gold price reduction to 25% without causing a 14:14 14 minutes, 14 seconds stress is is is enhanced by this uh the gross weight you know uh difference of 14:21 14 minutes, 21 seconds 9.33%. We are also in the process of setting up asset resolution branches to manage the portfolio uh and agree agree 14:31 14 minutes, 31 seconds portfolio apart from you know the the the MSM stress also to manage the portfolio LTV margin calls and auctions 14:40 14 minutes, 40 seconds of gold if and when there is a need in Sunday any any breach of LTV up to 90% 14:47 14 minutes, 47 seconds will trigger a margin call and our counter action including options uh will will will kick in and if you 14:55 14 minutes, 55 seconds look at the portfolio risk for gold it is just 12.31% which is just about five basis of the overall golden portfolio. 15:03 15 minutes, 3 seconds To summarize the golden portfolio that we have is literally gold standard unsecured portfolio we we have stated in 15:12 15 minutes, 12 seconds the last quarter as well that the previous quarter we are this is a bank that has been lending on on a secured 15:20 15 minutes, 20 seconds basis uh we have not been on the unsecured space at all and the unsecured space is just 54 crores which is about 15:28 15 minutes, 28 seconds 10 basis point of our overall advanced portfolio practicing ally practically negligible 15:37 15 minutes, 37 seconds on the export credit I think west Asia crisis we we have our own exposure to the west Asia countries is just 50.95% 15:46 15 minutes, 46 seconds which is just 10 basis of our overall portfolio so to that extent it is limited if the war carries on the impact 15:53 15 minutes, 53 seconds on the indirect impact is something that we are making an assessment of we certainly hope the government will step in with the package if the crisis 16:01 16 minutes, 1 second continues Uh finally on the on the on the financial performance itself 16:08 16 minutes, 8 seconds u as I said you know the quarter performance interest income has been riding on core business I think the core 16:15 16 minutes, 15 seconds business revival the growth uh of advances you know touching 20% or rather including IPC at 22% 16:23 16 minutes, 23 seconds has has helped us you know uh uh give give a give a give a net profit number of 28.01% 01% growth and that's riding on interest income of 15.55%. 16:37 16 minutes, 37 seconds Uh non-interest income of 20.67% and containing the expenditures at 11.58%. 16:45 16 minutes, 45 seconds Let me also add here that uh you know uh normally we give a performance based 16:52 16 minutes, 52 seconds incentive to our uh to our employees and that is given for a year in the 16:58 16 minutes, 58 seconds following year. for the first time. So in for FI25 we gave it in in the in FI26 17:06 17 minutes, 6 seconds in quarter one of FI26. For the first time we have made a break with that practice and the PPI the performance 17:14 17 minutes, 14 seconds based incentive for FI26 which has been computed at 49.80 we have accounted for in quarter 4 17:23 17 minutes, 23 seconds itself or quarter 4 of FI26 itself. So the net profit that you are seeing here 17:29 17 minutes, 29 seconds 28.01 is after accounting for the PBI 49.80. So remember the quarter one we 17:38 17 minutes, 38 seconds accounted for the PBI of F525 and quarter four we have accounted for the PBI of F526. 17:45 17 minutes, 45 seconds So two counts of PBI accounted for one year and the net profit that we showcase 17:52 17 minutes, 52 seconds today 28.01% 01% is after accounting for the PBI of 49.80 17:59 17 minutes, 59 seconds which like I said ordinally should have been taken up in absorb in F527 18:06 18 minutes, 6 seconds if you if you normalize for that the cost to income ratio is just about 39.0 54% for water and uh and and your 18:15 18 minutes, 15 seconds operating profit you will see has jumped to 41.62 62%. 18:21 18 minutes, 21 seconds So all these are translating into higher shareholder values. Our net worth of the capital and reserves has crossed 10,000 18:28 18 minutes, 28 seconds course for the first time. Uh book uh book value per share is 638. Earning per share is 23.6 18:37 18 minutes, 37 seconds and like I said earlier ROA is all this has impacted the ROA which is cross 2% for water flow and it's at 2.05%. 18:48 18 minutes, 48 seconds And return on equity of course is again um has broken the 15% mark and it is 15.03%. 18:58 18 minutes, 58 seconds And the balance sheet likewise has improved to 75.29.60 6 and the point is the 75 70,000 75,299 19:09 19 minutes, 9 seconds crores of balance sheet is today the consists of more than 10,000 crores 19:15 19 minutes, 15 seconds of uh capital which points out to the resilience of of the balance sheet itself the fact that we have 13% of our 19:22 19 minutes, 22 seconds balance sheet is actually funded by by by capital gives us the ability to take in a higher CD ratio 19:34 19 minutes, 34 seconds Uh going on to the asset quality um I think I think we have been known 19:41 19 minutes, 41 seconds for maintaining a high level of asset quality and that gets reflected in the quarterfall results as well. Your GNPA 19:49 19 minutes, 49 seconds is at 0.73% NNPA at 0.18%. So today the net NPA that 19:56 19 minutes, 56 seconds we hold is just about 97.41%. 41% so 97.41 crores 20:03 20 minutes, 3 seconds provision cover on book like I said earlier is 74.89 and overall is 96.14%. 20:13 20 minutes, 13 seconds Asset quality consistent improvement across quarters I think that is something we we have showcased in in the presentation that we have uploaded uh 20:21 20 minutes, 21 seconds page number 23 23 and it is like I said uh is at 97.41 41. So this 97.41 of or 20:31 20 minutes, 31 seconds the NPA number which is 388.21 which is the gross NPA number. If I look 20:37 20 minutes, 37 seconds at the gross NPA number of 388.21 which is 0.73% which has a provision of 229.98 20:46 20 minutes, 46 seconds crores 20 2289.98 crores which is a PCR of 74.89 89 is 20:54 20 minutes, 54 seconds covered by collateral average collateral of 127.52. 20:59 20 minutes, 59 seconds So when we resolve these NPA we run 88.21 where we have provided 229 much of 21:06 21 minutes, 6 seconds what we have provided 229.98 we expect it to come back uh thanks to the 21:11 21 minutes, 11 seconds collateral cover that the GNPA currently has. 21:19 21 minutes, 19 seconds slipage again is under control. I think uh uh an SMA like I said earlier is trending 21:28 21 minutes, 28 seconds down and today 31st March 26 it is just 686 21:37 21 minutes, 37 seconds crores SMA we are talking about SMA 1 SMA 0 SMA 1 and SMA 2 and all three 21:46 21 minutes, 46 seconds combined is just 1.29% 29% this I did mention earlier that par portfolio risk 21:52 21 minutes, 52 seconds one day is 2.02% for the bank including SMA and NPA together is just 2.02%. 22:01 22 minutes, 1 second The stress asset is also on a downward trajectory 218 cr is where we stand today. U along with the G&P the stress 22:09 22 minutes, 9 seconds number is just 1.14%. Let me also tell you this standard restricted advances are also covered which was contracted 22:16 22 minutes, 16 seconds during the COVID period are also covered to an extent of 250 crores of provision right and that 250 crores of provision 22:24 22 minutes, 24 seconds we have not returned back we are maintaining it and we hope to adjust it against the expected credit credit loss 22:31 22 minutes, 31 seconds when that kicks in or kicks in on the 1st of April 27. So our calculation 22:37 22 minutes, 37 seconds shows that as on 313 26 the the change in knobs from current Iraq to new ECL 22:46 22 minutes, 46 seconds which like I said will kick in on first of April should have a 279 crores impact the 250 crores the provision that we 22:54 22 minutes, 54 seconds hold in the book COVID book which stands today at 218 and which we hope to taper down further by by the 31st of March 23:03 23 minutes, 3 seconds 27th should largely uh cushion this impact uh of ECL additional ECL requirements. 23:13 23 minutes, 13 seconds Of course, RB has also come out with the LCR requirements I think is it is going to benefit us to the extent of what 4%. 23:22 23 minutes, 22 seconds [clears throat] 23:22 23 minutes, 22 seconds and on the ratio the cost of deposit has you know quarter on quarter and 23:32 23 minutes, 32 seconds sequentially has moved down from 5.83% to 5.71. So some of our earlier higher price deposit that we have contacted is 23:41 23 minutes, 41 seconds getting retriced and that is having a bit of a challenge a bit of a positive impact. It has come down while the yield on advances is down only six basis which 23:50 23 minutes, 50 seconds is holding on and that is one of the reasons why the core business is actually kind of giving us the kind of 23:57 23 minutes, 57 seconds uh you know profit that uh the bank has delivered for quarter four. 24:05 24 minutes, 5 seconds So the NIM is at 4.18% as a consequence uh and it is up sequentially for 4.04% 24:13 24 minutes, 13 seconds and NIM for the overall year is at 3.98%. 24:23 24 minutes, 23 seconds So the capital equation is 33.73 again uh thanks to the fact that our risk 24:29 24 minutes, 29 seconds assets are just about 20,000 crores thanks to a large amount of gold loan portfolio our capital equity is at 24:38 24 minutes, 38 seconds 33.73% cost income ratio contained at 44.80% despite the fact that 24:46 24 minutes, 46 seconds uh the entire PBI of 49.80 8 crores that we we should have accounted for in FI27 24:53 24 minutes, 53 seconds we accounted for in its entirety in quarter 4 of FI26 25:03 25 minutes, 3 seconds so the control and of course uh during the 25:11 25 minutes, 11 seconds year we have also opened 44 branches one one thing we have not been able to deliver as per our commitment We did 25:19 25 minutes, 19 seconds promise to the investor community that we will open 50 branches in a 526. Uh we have been able to open only 44 branches. 25:28 25 minutes, 28 seconds 15 of them have been opened outside the state of Tamil Nadu. So 30% one third of the branches are outside the state of Tamil Nadu. Uh seven branches are also 25:36 25 minutes, 36 seconds in the process being opened but we uh uh beyond the 30 I mean it it has gone beyond the 31st of March 26th. So net uh 25:46 25 minutes, 46 seconds impact is uh we have been able to open only 44 branches. So and uh the other uh the structural changes that we have 25:54 25 minutes, 54 seconds brought in the branch openings we are now deploying the branch managers in advance to drive uh you know to local 26:02 26 minutes, 2 seconds market penetration and business development. So uh the the structural changes that we have brought in bear uh 26:10 26 minutes, 10 seconds there has also seen uh the business for the new branches opened actually move up significantly in FI25 the new branch in 26:19 26 minutes, 19 seconds a on an annualized manner analyzed basis the business for new branch was just 26:25 26 minutes, 25 seconds about 19.57 crores in FI25 we have because of structural changes and posting uh you know uh 26:34 26 minutes, 34 seconds branch managers choosing the centers carefully we have been able to deliver in FI26 per branch business of 40.16% 26:43 26 minutes, 43 seconds 1.6 6 crores. So new branches opened since this thing has now started contributing significantly in FI26. It 26:51 26 minutes, 51 seconds has contributed 15% to the incremental growth and the digitization drive. I think I've spoken extensively on whatever we are 27:00 27 minutes trying to do on the digital strength you know some complete transformation we are trying to bring in and that also has a solutary impact you know releasing 27:08 27 minutes, 8 seconds bandwidth in the branches and one of the parameters we have mentioned here uh the transaction count 27:16 27 minutes, 16 seconds in a 525 our branches across the counter did 2.64 27:23 27 minutes, 23 seconds 64 crores the 26.3 million transactions across the count of F525 27:30 27 minutes, 30 seconds even after increasing the number from 578 branches to 6 22 branches that is 44 27:37 27 minutes, 37 seconds branches incremental opening 44 branches this count the transaction the manual transaction count 27:44 27 minutes, 44 seconds across the counter and the branches have come down from 26.3 million to 240 27:52 27 minutes, 52 seconds million So that's something that will eventually release is releasing bandwidth for further growth. 28:02 28 minutes, 2 seconds Uh so the modernization is also underway and we have taken a lot of HR initiatives and uh uh during that it's 28:10 28 minutes, 10 seconds all it's all summarizing it's all you know converging into into into into business growth and uh we are happy to 28:18 28 minutes, 18 seconds say that um uh FI26 has been clearly an year of reckoning 28:26 28 minutes, 26 seconds and uh we have uh uh we stand today facing FI27 with much greater confidence 28:34 28 minutes, 34 seconds as as um as you know in in April of 26 28:41 28 minutes, 41 seconds um today we are in a much much stronger position and stronger to pace the coming year. Yeah, I think I'll stop here and 28:50 28 minutes, 50 seconds we will open ourselves to question and answers. Like I said, I my CFO is here, my ex director is here, my CFO is here, my head of resource mobilization 28:59 28 minutes, 59 seconds deposits here, and also my head of credit is also here. And uh we are now open to uh questions from you if any. 29:08 29 minutes, 8 seconds Yeah, thank you. 29:11 29 minutes, 11 seconds Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. 29:21 29 minutes, 21 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 29:31 29 minutes, 31 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 29:40 29 minutes, 40 seconds Our first question comes from the line of Tingut Hara from Green Edge Wealth. Please go ahead. 29:47 29 minutes, 47 seconds Uh thank you for the opportunity and uh congratulations sir. uh you know it has been uh you know it has been you know your under you know under promise and 29:56 29 minutes, 56 seconds overd deliver continues even in this quarter more strongly. So congratulations sir. Um three three questions from my side. 30:04 30 minutes, 4 seconds Uh so first is uh that uh you know if we you know you said we are on a very strong footing for FI27. Would you like 30:11 30 minutes, 11 seconds to guide anything in terms of uh you know the load book growth uh uh for this year because I think the macros have you know turned a little bit sour because of 30:20 30 minutes, 20 seconds the war in Middle East. Yes, despite that you know of West Asia crisis the US 30:27 30 minutes, 27 seconds tariff is still to completely know we are out uh what we are stating for FI26 30:33 30 minutes, 33 seconds as you FI27 as you just mentioned that we would like to under uh understate and overperform or under guide and 30:41 30 minutes, 41 seconds overperform I think we'll continue that but despite that we are reaching out a tad higher on the deposit then we are 30:51 30 minutes, 51 seconds saying that in FI27 we will grow at at least 1% higher than what we did in FI26. 31:01 31 minutes, 1 second Okay. Okay. So sir you are saying credit growth will be at least as much as what we saw this year uh like FI26 what was the loan growth? 31:09 31 minutes, 9 seconds Yes. Yes. I'm coming I'm coming to that. 31:11 31 minutes, 11 seconds So I think that we should be in the in the 16% kind of number for deposit growth and that the advances that we did 31:19 31 minutes, 19 seconds of 20% is something that we will defend in the current year as well. 31:23 31 minutes, 23 seconds Right. Right sir. So that's great to know. The second question is that see gold loans was your durand for last year right? Gold loans was something which 31:32 31 minutes, 32 seconds helped us a lot. Uh you know what will be the durand for FI27? Will it again be gold loans or you see some other you know segments also sticking? 31:41 31 minutes, 41 seconds Now we are having our dura 2 also coming up. I think that is where if you look at I've also showcased that our MSME has also been giving a good ROA. 31:50 31 minutes, 50 seconds I think we have put it um in this as for the first time we are looking at you know we will give more 31:58 31 minutes, 58 seconds gran granular data on the profitability parameters of specific portfolios you know going forward in the next quarter 32:06 32 minutes, 6 seconds onwards but this time we have made an attempt and our MSME like I said grew 32:11 32 minutes, 11 seconds 14.88% yearonear right and the ROA there the yield is at 10.52%. So this is one 32:18 32 minutes, 18 seconds portfolio we will be looking to cushion the impact of gold loan you know slowing down of the gold loan growth and like I 32:27 32 minutes, 27 seconds said initially that in the first quarter we did uh there was a actual deg growth so it is from the quarter two it started 32:34 32 minutes, 34 seconds picking up the quarter 2 quarter 3 and now quarter four we ended up with 14.88% 88% and this is something that you will see this is a story you need to watch 32:43 32 minutes, 43 seconds for FI27 space we are putting our systems in place your loan management system CLC's 32:51 32 minutes, 51 seconds the credit management centers are in place the loan management system bend live I think the phase one is there is been done and phase two we should be 32:59 32 minutes, 59 seconds doing it in the first quarter we should get the phase two also done which means to answer you dura 2 is going to be Amazon 33:07 33 minutes, 7 seconds right brilliant It's very good to hear that uh sir all the best and you know last question is one data point that in the last quarter in our retail you know in 33:16 33 minutes, 16 seconds our retail we had 6700 crores of gold loans what would that number be for this quarter 33:24 33 minutes, 24 seconds you have the gold loan number yeah ICU given very good disclos but just this break up between retail and agric we'll add that also next time in 33:34 33 minutes, 34 seconds fact uh we wanted to tell the world that no the gold portfolio is is is is in fact our 6,500 33:42 33 minutes, 42 seconds 6,500 right it is 67. 33:48 33 minutes, 48 seconds No sir, it was great. You put on disclosure that you are setting up some you know auctioning centers in case there is a price fall and you know the overall LTV. So 33:55 33 minutes, 55 seconds we are taking all the counter measures in advance. So we want to be prepared because we did see a slight you know 34:03 34 minutes, 3 seconds price coming down you know as as a consequence of the initial stage of the war. So we want to be fully prepared. We are put in place systems where you know 34:12 34 minutes, 12 seconds for margin calls can be had. We are uh you know in a centralized call center. 34:18 34 minutes, 18 seconds We are also putting you know um um we are looking at creating asset resolution 34:24 34 minutes, 24 seconds branches specifically in addition to um in addition to the normal recovery 34:30 34 minutes, 30 seconds that happens across uh you know also to tackle the gold loan delinquency. Let me also tell you on the gold loans um we 34:39 34 minutes, 39 seconds have the portfolio LTV I think if you have seen it I think I did mention is always 53.25% 25%. 34:45 34 minutes, 45 seconds Yes sir. It's there in the slide. I've seen I've seen it. Yes. 34:48 34 minutes, 48 seconds And to answer you on the on the on the retail it is 6,57 crores. 34:53 34 minutes, 53 seconds Yes sir. In housing was 4,000 last quarter that would have also grown right this quarter. 34:58 34 minutes, 58 seconds Uh no housing loan has not in fact our housing loan dispersements sorry sanctions have crossed 22%. So there is 35:06 35 minutes, 6 seconds always a lag between the sanctions and dispersement. While the sanctions have gone up uh the go the housing loan 35:13 35 minutes, 13 seconds portfolio itself is you know slightly uh degrone from last time. 35:18 35 minutes, 18 seconds Okay. Okay. Okay sir. Yeah sir. Then I the retail gold loan portfolio is also degrone right. It was say 6,700 crores last quarter. It is 6,500 crores this quarter. Right. So it has grown by 200. 35:28 35 minutes, 28 seconds Yes sir. I'll tell you the reason is that you know RBA had come out with the regulation saying that you know we have 35:37 35 minutes, 37 seconds a sizable gold loan portfolio. You look at you if you look at the slide 24,790 crores of gold loan portfolio and I just 35:47 35 minutes, 47 seconds mentioned that retail is 6,500. So the rest remaining is about 18,000 plus is agree gold 35:56 35 minutes, 56 seconds right came out with with with rather a directive that you know up to 36:03 36 minutes, 3 seconds two lakh you have to cannot get collateral. So there was a shift from 36:10 36 minutes, 10 seconds agreed gold loans to retail loans in the third quarter. But subsequently RB came and clarified that if you are taking it 36:19 36 minutes, 19 seconds on a voluntary basis you can take it from farmers also for agree golden purposes agree purposes right. 36:29 36 minutes, 29 seconds So in quarter three we had a increase in the retail gold and that has been somewhere replaced by agree gold loan in 36:36 36 minutes, 36 seconds quarter four. So both are now you know sort of you know with agree gold loan growing faster than your retail goals. 36:44 36 minutes, 44 seconds Yeah. 36:46 36 minutes, 46 seconds And now we can grow along with everyone else, right? Once the gold zone keeps growing, we have grown. But just this reclassification bit created some 36:53 36 minutes, 53 seconds confusion. So as a portfolio, we don't I mean from a from your perspective, investor perspective, the color of the 37:01 37 minutes, 1 second loan doesn't matter whether you call calling an agree gold loan or whether we call it a resale gold lo 37:09 37 minutes, 9 seconds it is giving us the 10.10.11% 0 10.11% is the combined need. Right. Right. Perfect sir. Thank you so much. 37:18 37 minutes, 18 seconds Wish you all the best. Thank you. 37:22 37 minutes, 22 seconds Thank you. The next question comes from the line of Vun from Share India Securities. Please go ahead. 37:30 37 minutes, 30 seconds Good evening sir and congratulations once again on your superb set of numbers. Your company has been delivering quarteron quarter and you have set a new benchmark inside a 37:39 37 minutes, 39 seconds benchmark for yourself. So can you throw some light on the slippages number? No doubt it's down on a year on your basis around 31%. I was just looking at the 37:48 37 minutes, 48 seconds bifircation. There are slippages in agree portfol around 19 crores. So what is the reason for this? If you can just 37:55 37 minutes, 55 seconds throw some light on this and also you were highlighting that your home loan portfol has degrown from last time. So can you just put a number? How much has it degrown? 38:05 38 minutes, 5 seconds No. What is the second question? How? 38:12 38 minutes, 12 seconds Yes. Yes. As coming back to the first one, you are slippage right? Yes sir. 38:25 38 minutes, 25 seconds Where is it gone? 38:28 38 minutes, 28 seconds This is your new one that will recognize. No. Yeah. You want to say that? 38:34 38 minutes, 34 seconds Yeah. In fact uh the slipage in agree this is agree processing unit and there 38:41 38 minutes, 41 seconds was a single account totaling 16 cr and that has resulted in a 19 cr and let me 38:48 38 minutes, 48 seconds also tell you that's a clear visibility on the recovery of that account and I think uh most probably by when we 38:56 38 minutes, 56 seconds reassemble for the next quarter this would have been recovered to that 39:03 39 minutes, 3 seconds let me also add to that that from a u record of recovery angle this is a standard asset. 39:12 39 minutes, 12 seconds Okay. Which means is actually is is being serviced but we as part of our clean up because you know the activity 39:20 39 minutes, 20 seconds at top we have even though it was standard we have actually taken a call to make it 39:28 39 minutes, 28 seconds downgraded it because we have also checked so that we can move ahead with the resolution of it in the first quarter the GST turnover although RB is not 39:36 39 minutes, 36 seconds asking us to go that far matter of abundance precaution we have gone that far and also class. 39:46 39 minutes, 46 seconds expecting a reserve. 39:50 39 minutes, 50 seconds I think I think you said next quarter we when we meet we'll accept some right. 39:58 39 minutes, 58 seconds We are talking about quarter one of 27. Okay. Okay. 40:06 40 minutes, 6 seconds Yeah. And what is the next question? 40:09 40 minutes, 9 seconds What about the housing loan portfolio that has been like I said 40:16 40 minutes, 16 seconds is something that we are focusing we are focusing back I think we started the focus back in quarter quarter four uh 40:23 40 minutes, 23 seconds and like I said the sanctions have actually moved up 22% 22%. But for that 40:30 40 minutes, 30 seconds to get translated into into into actual dispersements I think you will see this going forward. uh otherwise and bodon 40:39 40 minutes, 39 seconds the other aspect of bodon is from an ROA perspective it just delivers 1.01 01. So from from a priority angle, this has 40:47 40 minutes, 47 seconds taken a little bit of uh pri lower priority, but we are we are we are in the game to push this up. 40:58 40 minutes, 58 seconds Okay sir. Okay. Uh one last question I just wanted to ask you sir. I mean just as you said that you had an aim of 50 41:05 41 minutes, 5 seconds branches for FI26 but you have open IP so around 44. So what could be the branch addition number for FI27 sir as 41:13 41 minutes, 13 seconds you go ahead we are proposing 60 branches in FI27. Okay. 41:20 41 minutes, 20 seconds I hopefully in FI 27 April, sorry. 41:26 41 minutes, 26 seconds Right. FI 27 April when I when I take this call again. Hopefully, we should have met that. You know, FI26 is one of 41:34 41 minutes, 34 seconds the only perhaps the only myth that we had is that we promised 50 branches to ourselves and we were able to open only 44 and but for FI27 we are actually promising 50. 41:46 41 minutes, 46 seconds Okay. Okay. Great sir. Uh thank you for giving that number sir and uh once again thanks a lot for giving me a chance to ask question and best of luck for your future sir. Thank you very much. 41:56 41 minutes, 56 seconds Great. 41:58 41 minutes, 58 seconds Thank you. The next question comes from the line of Lakshmi Narin from Tonga Investments. Please go ahead. 42:05 42 minutes, 5 seconds Yeah. Uh thank you. A few questions. Uh so there has been a write off of close to 150 crores this year. Uh we just want 42:12 42 minutes, 12 seconds to know across how many accounts is this and does this include the uh Andra account which was uh more than 125 130 42:20 42 minutes, 20 seconds crore uh uh MPA and uh second question is that uh there in the other segment 42:29 42 minutes, 29 seconds question can you repeat I think how many of no sorry I I think I think 42:38 42 minutes, 38 seconds the the we had two rounds of write house right okay and uh I think first was in 42:45 42 minutes, 45 seconds the quarter two and the second was in this quarter four where is that one sec one sec okay I get you that I'll just get you that and let me tell you the 42:53 42 minutes, 53 seconds Andra bank sorry not andra Andra bank Andra account that you are I don't know from where account but let me tell you 43:00 43 minutes Andra account is not part of that uh that write off yeah I got it here yes so 43:07 43 minutes, 7 seconds uh we have in in fact if you look at it We have written off 149.69. It is not part of it. The one the one you are 43:15 43 minutes, 15 seconds referring to. It is a series of accounts. It has been written off in two lots. Like I said 664 in quarter 2 and 60 83 in quarter 4. 43:25 43 minutes, 25 seconds And uh of course it's I must admit that you know that write off has helped us reduce it. It's part of the balance sheet management that we all any bank 43:33 43 minutes, 33 seconds does. But going beyond that if you look at it your cash recovery from upgradation is 90 103 crores. If I take 43:42 43 minutes, 42 seconds you to my slide number 22 97 + 6 103 crores against a fresh addition of 85. 43:50 43 minutes, 50 seconds So there is an actual reduction an absolute amount reduction in the NPA itself despite you know despite the 43:58 43 minutes, 58 seconds write off that you mentioned of 149. So come back that andra and account is not there. 44:05 44 minutes, 5 seconds In the GMPA of around 198 crores in the others um you know how is it concentrated? Is it that that Andra 44:12 44 minutes, 12 seconds account is actually part of this uh you know okay can you say yeah the concentration 44:20 44 minutes, 20 seconds of this 198 is it two or three accounts are more than 150 crores and the balance is less. No, I think it is one account 44:27 44 minutes, 27 seconds with 164 crores and then a small few of the residual amounts are still there in the earlier resolutions that have happened. So which are undergoing 44:36 44 minutes, 36 seconds resolutions now I think a couple of them are already in the NCL also. 44:41 44 minutes, 41 seconds Got it. S I think in in previous calls I mean if I had heard right you alluded that uh there could be a right back of 44:49 44 minutes, 49 seconds uh some of these NPA because there the collection would be strong. So uh is it on track or and how are you thinking 44:56 44 minutes, 56 seconds about uh these large uh uh you know GMTAs? Is there a possibility of right back? 45:03 45 minutes, 3 seconds One if you look at my my my credit cost right where is my credit cost? 45:16 45 minutes, 16 seconds You know my credit cost is uh practically not there right? The reason for that is the credit 45:25 45 minutes, 25 seconds the reason for that is the credit cost which I which I just mentioned that 85 crores of slippage happened because but 45:34 45 minutes, 34 seconds that the cost the credit cost or the provision cost of that has largely been met by the recovery being happening. So that is the reason why credit cost is 45:43 45 minutes, 43 seconds low and u right and uh this this large account 45:51 45 minutes, 51 seconds that you mentioned hopefully we are hoping that this get resolved this year 45:59 45 minutes, 59 seconds what other question sorry no I I was just asking this for the for the right back uh I mean do you expect 46:06 46 minutes, 6 seconds uh any full recovery of this you will notice some some some uh you know interesting about coming back if 46:14 46 minutes, 14 seconds our luck holds you know some of these items uh you know you really need luck you know particularly when the legal 46:21 46 minutes, 21 seconds system in the country takes know the kind of time it does so hopefully uh we should be able to tackle it this year 46:30 46 minutes, 30 seconds got it got and one question on gold loan uh so this uh I just want to understand what is the LTV at origination uh 46:37 46 minutes, 37 seconds because I see that there are different LTVs for different classes of loan seekers. Um right so there are so I just want to understand what is a goal loan 46:46 46 minutes, 46 seconds uh LTE origination blended and second uh when you actually do it do you actually uh include the interest acured when you 46:53 46 minutes, 53 seconds actually calculate the LTV because these are all bullet payments I understand. So how does that work? 47:00 47 minutes The LTV that you see in the slide is not the principal LT LTV. It is the uh 47:08 47 minutes, 8 seconds principle the dues on that particular day which is principle of per interest. 47:14 47 minutes, 14 seconds Okay, that is the first clarification I want to give you. and the and the normal LGB is uh is 75% that you give and we 47:24 47 minutes, 24 seconds have a certain different kind of not it is actually not on the on the market only that's about only consumption 47:32 47 minutes, 32 seconds number sorry and that is the reason 47:39 47 minutes, 39 seconds our our calculation of NTV is not strictly in comparison to what the market Yes, because you know we have 47:49 47 minutes, 49 seconds built in you know certain system where cushions are available. I think if I if I if you go to slide number there is a 47:57 47 minutes, 57 seconds golden slide that is it 48:04 48 minutes, 4 seconds yeah you see the gross weight you see the net weight right 48:11 48 minutes, 11 seconds 37.38 tons of gross weight portfolio we have gold loan is covered by 37.38 of 48:17 48 minutes, 17 seconds tons right and the net weight is 34.19 which is 9.3% over the LGB is not on the 48:25 48 minutes, 25 seconds gross weight that we calculate. It is on the net weight and it you get it. That is one of the reasons 48:34 48 minutes, 34 seconds why despite you know the gold prices being where it is our portfolio is able to sustain a 25% reduction. 48:43 48 minutes, 43 seconds Got it. Is it safe to assume that at origination the same number is there like you know if uh if say uh uh 48:50 48 minutes, 50 seconds somebody is taking gold loan today uh is that number between around 54 to 56%. 48:56 48 minutes, 56 seconds No no no no that will be in the 75 to 75%. 35 and it it varies for example some of the 49:06 49 minutes, 6 seconds gold load will be slightly higher and the LTB is actually calculated on the maturity value not on the on the principal not under principle 49:14 49 minutes, 14 seconds not under principle you get it no including on maturity I I hope I I don't know whether I made 49:22 49 minutes, 22 seconds no I think my question is that what my question ish my question my question What is the LTV at origination now? 49:33 49 minutes, 33 seconds Because this is at the at the blended book you're giving but what is the standard LPV because I understand the LTV. Yeah. 49:41 49 minutes, 41 seconds One let me tell you what you are seeing here is a blended rate because in in some sense perhaps will not have a much of a meaning when there is a reduction 49:49 49 minutes, 49 seconds price. I'm not saying that I'm talking about the LTB that we say it is it is 75% and 80% in some cases 49:58 49 minutes, 58 seconds is not the LTV is not the principal LTB it is the LTB at maturity let me give you an example if you are talking in 50:06 50 minutes, 6 seconds terms of you know 80% LTV in some cases we actually give 80% LTB also and it is 50:13 50 minutes, 13 seconds a oneear loan the 80% LTV is what is the amount he has to pay after one year and 50:22 50 minutes, 22 seconds is based on what has to pay after one year. For example, if it is a 10% your your you know your your LTB the current 50:30 50 minutes, 30 seconds LTB at which you give today's loan could be 72%. 50:34 50 minutes, 34 seconds Okay including interest it will become 80%. No. Correct. Correct. 50:39 50 minutes, 39 seconds So LGBT is always calculated on the maturity. 50:44 50 minutes, 44 seconds If it is 6 months, the NTV will be slightly higher. If it is one year, the LTV will be lower. 50:51 50 minutes, 51 seconds That is one of the reason why they able to sustain a 25% you know sensitivity. 50:59 50 minutes, 59 seconds Other banks which is on you know on the rate the day it is given and then the interest is added to that. We add the 51:06 51 minutes, 6 seconds interest to arrive at the LTV. Let me put it that way. Okay. 51:11 51 minutes, 11 seconds Got it. And and as the other participant mentioned, maybe uh in the next time you can actually give the retail uh uh loan 51:19 51 minutes, 19 seconds uh you know split across segments and also gold loan split across uh various things like RAM 51:27 51 minutes, 27 seconds to be more and more transparent. I think we continuously do that. 51:31 51 minutes, 31 seconds Yeah. And and do you actually track your market share growth uh across branches and uh um you know uh across your 51:38 51 minutes, 38 seconds regions? What has been your market share growth in terms of assets and liabilities? 51:43 51 minutes, 43 seconds We do track it now. In fact, not only track it, it has now become a component of the performance based incentive. 51:51 51 minutes, 51 seconds You know I did mention earlier that we [clears throat] gave a you know gross performance based incentive which we have absorbed this year in the in 52:00 52 minutes quarter 4 which if we had not absorbed we had got the earlier faces it would have been higher you know the cost would 52:06 52 minutes, 6 seconds have been higher that PBA component that that we we we calculate also has a 52:13 52 minutes, 13 seconds component of the local growth local market growth be my branch 52:21 52 minutes, 21 seconds So now we started tracking what is the growth in the branch versus what is the growth the industry has in the same location. 52:31 52 minutes, 31 seconds Got it. Uh sir on the on the technology spend can you just help me understand how much you have spent in technology last year and how much you intend to 52:39 52 minutes, 39 seconds spend in this year and how much you're capitalizing on how much you're expensing. 52:44 52 minutes, 44 seconds I my technology spend this year is uh is 15.80% higher. you have that exact 52:51 52 minutes, 51 seconds number. Let me also tell you that technology spent in the year will not give us proper reflection because many of these are milestone payments and 52:59 52 minutes, 59 seconds these are you know happening. I can tell you that despite that I can tell you that 15.80% 800% we have our spend has 53:05 53 minutes, 5 seconds been higher than last year and much of 53:13 53 minutes, 13 seconds I don't know that number yeah 53:20 53 minutes, 20 seconds thank you the next question comes from the line of dingata please go ahead 53:29 53 minutes, 29 seconds yeah sir thank you for the opportunity again uh so This this question was you know mainly again on gold loans that uh 53:36 53 minutes, 36 seconds that in in our retail gold loans we generally have 11% each right which are slightly better than agri gold loans. Is that correct? 53:48 53 minutes, 48 seconds Your uh retail gold loan the rate of interest is better than the agri gold loan. 53:54 53 minutes, 54 seconds Right. Right. Right. So and in all the new branches we are offering that right. 53:58 53 minutes, 58 seconds So, so if you know there is no branch where gold loan product is not offered, right? We are we are well spread across our branches. 54:07 54 minutes, 7 seconds We our intention is to offer it across all the all the branches but some of the branches you know metro etc. I know 54:13 54 minutes, 13 seconds there may not have much of a in much of a demand for it but the product is an offer across. 54:21 54 minutes, 21 seconds Okay. Okay sir. Thank you. Sir and lastly on the margins like you know we have had like a sh very good improvement like first two quarters uh you know the 54:30 54 minutes, 30 seconds margins were flat or struggling because you know the whole interest rate cycle was against us. Uh this quarter especially has been very strong like is 54:37 54 minutes, 37 seconds is this quarter margins sustainable or or or you know you feel that you know it depends on macros and how the deposit rates. 54:45 54 minutes, 45 seconds It depends on various factors. You did mention macros is will have an impact on it. And this time because the loan growth was good. 54:55 54 minutes, 55 seconds There has been a movement you know we had some surplus cash which was going at lower you know lower yield that has 55:03 55 minutes, 3 seconds moved into a higher yield gold sorry loan portfolio. So that has added you know so the um the pull up has come the 55:10 55 minutes, 10 seconds growth in the advancers portfolio and uh and also simultaneously some of the highriced the deposit we have taken is 55:18 55 minutes, 18 seconds getting repriced you know so we have got the benefit of that and if you ask me whether this will sustain I I at this 55:25 55 minutes, 25 seconds kind of level it's going to be very difficult to sustain but still we we believe we'll be able to defend 3.90 to 4% name Okay. 55:36 55 minutes, 36 seconds Okay, sir. Okay. I think sir that is that is good for today. I I know I I could ask a lot of questions. Thank you so much and all the best. 55:43 55 minutes, 43 seconds Yeah. Thank you. Thank you. 55:45 55 minutes, 45 seconds Thank you. Participants please restrict yourselves to two questions. If you have any more questions, kindly rejoin the queue. 55:54 55 minutes, 54 seconds The next question comes from the line of Parth Good Kutka from 361 Capital. Please go ahead. 56:01 56 minutes, 1 second Yeah. Uh hi sir. Thanks a lot for the opportunity. Uh so my first question is uh what proportion of your deposits are yet to repric. 56:13 56 minutes, 13 seconds I think by the first quarter our original high would we have what we have taken at 8% will be fully retested. 56:21 56 minutes, 21 seconds Uh but having said that you know deposit is a challenge for all the across the industry. uh so u significant impact of 56:30 56 minutes, 30 seconds that repricing may not occur in the first quarter that is what we anticipate because you know resource because to 56:37 56 minutes, 37 seconds keep the advances mission running we have to you know uh uh we'll have to increasingly focus on the resource 56:45 56 minutes, 45 seconds mobilization and given the challenges that the industry has u we don't expect that 56:52 56 minutes, 52 seconds pricing benefit uh to really acrew to us in this quarter which means that we may have to our we may have to continue contracting term deposits. 57:03 57 minutes, 3 seconds Okay. Okay. Okay sir. Fair enough. And my second question was sir when I look at your investments to NDTL uh ratio 57:10 57 minutes, 10 seconds it's it has come down from 32 to 25% and still you know there is some scope to uh you know uh uh reduce that further. 57:19 57 minutes, 19 seconds So are are we are we thinking on uh that line uh that you know can move from investments some funds from investment 57:27 57 minutes, 27 seconds we will always like to keep a cushion for contingencies that is there I think uh you know that is something that uh you know in terms of we use and borrow 57:36 57 minutes, 36 seconds against that the fact that it has reduced from 22% to 25% as you just mentioned is one of the factors that has 57:43 57 minutes, 43 seconds helped us you know drive the profits up uh but uh um no We will certainly continue to have maintain a reasonably 57:52 57 minutes, 52 seconds good cushion there and that is where this focus is back on the deposits and like I said 16% deposit growth for the 58:01 58 minutes, 1 second year is something that we are committed to okay fine thanks a lot sir 58:08 58 minutes, 8 seconds thank you the next question comes from the line of promote from my invest buddy please go ahead hello 58:17 58 minutes, 17 seconds congratulations on the ninth set of numbers. Um I wanted to ask you about the succession planning for the uh next 58:27 58 minutes, 27 seconds base one right like how are you taking care of that and uh certainly yes so 58:36 58 minutes, 36 seconds yeah I'm sorry I didn't get that succession planning where are you talking in terms of HR succession planning or 58:44 58 minutes, 44 seconds uh like for like the next CEO right like who will be the next CEO and things like that like uh do we have a plan in place for that? 58:56 58 minutes, 56 seconds Absolutely there is a plan. 58:58 58 minutes, 58 seconds No, I if you're talking term of the succession planning, we have a detailed succession planning going to the next four five years. 59:06 59 minutes, 6 seconds Okay. 59:08 59 minutes, 8 seconds Right. And uh another thing is about uh like the uh cyber security right. So 59:15 59 minutes, 15 seconds yeah like uh there is claude mitos coming up and there was a internal meeting as well. So is that covered like we are uh safe on that side. 59:30 59 minutes, 30 seconds Oh yeah yeah I think I think cyber security you know as the as the investments in IT and automation goes up 59:36 59 minutes, 36 seconds we have to be wary of you know cyber you know cyber fraud cyber attacks etc. And that is something that this bank is 59:44 59 minutes, 44 seconds investing in in preventing. And we have a 24x7 boardroom looking at uh this 59:51 59 minutes, 51 seconds aspect. And we have just got ourselves a a a call center AI based call center. 59:56 59 minutes, 56 seconds And we have also contracted with one of the best names in the world. I think largest names in the world in terms of supporting us for cyber from a cyber 1:00:05 1 hour, 5 seconds security angle. So we are on the job there. I think we are fully alive to it. 1:00:10 1 hour, 10 seconds um you know the the there is a repeated audit of our own system to see that they 1:00:16 1 hour, 16 seconds are foolproof. Uh apart from that 24 by7 you know um such frauds and attacks are being washed by washed on by us. 1:00:29 1 hour, 29 seconds Thank you so much like thanks uh congratulations again on the great set of members. Thank you. Thank you. 1:00:37 1 hour, 37 seconds Thank you. The next question comes from the line of park from ICICI direct. Please go ahead. 1:00:46 1 hour, 46 seconds Good evening sir and thanks for the opportunity. Uh sir I had one data giving question. So I wanted to ask you 1:00:54 1 hour, 54 seconds u in your advances mix what is the difference between EBLR MCLR and link. 1:01:01 1 hour, 1 minute, 1 second Can I get the number? 1:01:03 1 hour, 1 minute, 3 seconds MCLR and you have you have one portfolio linked to MCLR and portfolio linked to REO right? 1:01:12 1 hour, 1 minute, 12 seconds Yes. Yes. 1:01:13 1 hour, 1 minute, 13 seconds Benchmark rate and internal I think it is 50/50. 1:01:17 1 hour, 1 minute, 17 seconds basically because I was seeing your um advances yield so it was it has declined 1:01:24 1 hour, 1 minute, 24 seconds by 10 basis point right and the rate cut was around 125 basis point just I want to know the 1:01:31 1 hour, 1 minute, 31 seconds reason behind how why it was so low you don't hold me to this okay I tell you 1:01:40 1 hour, 1 minute, 40 seconds uh the rate cut is actually passed on to the MSM segment I think I think there I think we have if you the uh uh the yield 1:01:49 1 hour, 1 minute, 49 seconds has come down but where we have you know prevented from passing on or rather repric the the rate of interest or 1:01:58 1 hour, 1 minute, 58 seconds increase the rate of interest in the consumption gold loans. 1:02:02 1 hour, 2 minutes, 2 seconds Okay. Yes. So there though it is linked to MCL right though it's linked to MCLR 1:02:10 1 hour, 2 minutes, 10 seconds we have you know strategically been looking at it pricing it you know slightly better so that you know the 1:02:19 1 hour, 2 minutes, 19 seconds overall yield remains uh at at the appropriate band. 1:02:26 1 hour, 2 minutes, 26 seconds Okay. Thanks a lot. 1:02:28 1 hour, 2 minutes, 28 seconds Thank you. Yeah. The next question comes from the line of Daran Deorra from Indest Group. Please go ahead. 1:02:37 1 hour, 2 minutes, 37 seconds Yeah, thank you for the opportunity and uh personally congratulations on a great set of results. Um secondly also uh 1:02:45 1 hour, 2 minutes, 45 seconds appreciate uh the higher disclosure uh that you all have started from this quarter especially the you know the uh 1:02:53 1 hour, 2 minutes, 53 seconds segment wise ROA. Uh firstly I wanted to ask you uh you had mentioned the ROI on gold loans uh you know I I missed that figure. Can you just repeat it? 1:03:02 1 hour, 3 minutes, 2 seconds I think it is 2 what is it? One second I'll give you the number. I thought this was there in the slide but it's now I 1:03:09 1 hour, 3 minutes, 9 seconds see it is missing but I'll just give you that 2.0 or 2.10 something. No. 1:03:20 1 hour, 3 minutes, 20 seconds and 2.05. 1:03:32 1 hour, 3 minutes, 32 seconds It is 2.05. 1:03:34 1 hour, 3 minutes, 34 seconds Okay. So now uh given that uh we're sort of stepping on the accelerator when it comes to MSME growth which I see is at 1:03:42 1 hour, 3 minutes, 42 seconds 2.6% ROA. What would you s I mean what what should we assume as the ROA target for FI27? 1:03:50 1 hour, 3 minutes, 50 seconds ROA target for FI27. Incidentally MSME advances you know when once you start expanding the MSM advances you know you 1:03:58 1 hour, 3 minutes, 58 seconds may have to cannibalize a bit of your ROA. I think that's something that we we are prepared to do that because you know 1:04:05 1 hour, 4 minutes, 5 seconds the 10.52% yield as we expand the portfolio is going to be difficult to be defended. So ROA in MSME advances from 1:04:15 1 hour, 4 minutes, 15 seconds 2.58 that we have showcased is going to come down certainly going to come down and but uh from an overall perspective I'm talking 1:04:23 1 hour, 4 minutes, 23 seconds about you know retail when when once you start pushing the housing loan with where the ROA is sort of not mentioned 1:04:30 1 hour, 4 minutes, 30 seconds here we will give more details of that from next quarter onwards is that 1.01 uh one 1.01%. So when you start pushing 1:04:39 1 hour, 4 minutes, 39 seconds you know various components of the advances you know the ROA will will slightly get moderated and but we are 1:04:47 1 hour, 4 minutes, 47 seconds still looking at uh a 1.9 to 2% kind of ROA for FI27 and 1:04:55 1 hour, 4 minutes, 55 seconds and from an ROE point of view I mean assuming that our leverage goes up a little bit going to go up profits also hopefully 1:05:02 1 hour, 5 minutes, 2 seconds should move up but 15% 15.03 03 is what we did for you know this quarter but I think we should be 1:05:11 1 hour, 5 minutes, 11 seconds looking at you know defending 14 to 15% for FI FI27 okay uh 1:05:19 1 hour, 5 minutes, 19 seconds how do you think around 15% right 14 to 15% in that okay okay 1:05:27 1 hour, 5 minutes, 27 seconds better what we say right okay okay no that that that is understood uh in terms of your kasa again you know great progress there. Um 1:05:36 1 hour, 5 minutes, 36 seconds I see it's gone from 26% uh in FI25 to uh 28%. Do we have a target internally 1:05:43 1 hour, 5 minutes, 43 seconds that we are trying to hit in terms of kasa kasa ratio? 1:05:48 1 hour, 5 minutes, 48 seconds We do have a target but that's a slightly longest target and I don't think I should be looking at but let me also tell you this the number that we 1:05:57 1 hour, 5 minutes, 57 seconds have given 28 uh4%. 1:06:04 1 hour, 6 minutes, 4 seconds 28.14% is something that you will see moving up. 1:06:09 1 hour, 6 minutes, 9 seconds Okay. So that's that's a great step. And last question, uh cost of income, I understand that you have preponed uh certain expenses that you would 1:06:16 1 hour, 6 minutes, 16 seconds typically book in Q1, but uh what can we assume? I'm not asking for FI27. I'm just saying long term like say 2 3 years 1:06:24 1 hour, 6 minutes, 24 seconds down the road as the you know the initiatives you've taken in terms of uh you know the uh straight through processing uh you know the central uh 1:06:31 1 hour, 6 minutes, 31 seconds processing units etc. uh what do you what do you see our what do we see our uh cost of income uh trending towards? 1:06:40 1 hour, 6 minutes, 40 seconds No, I've repeatedly said that we have committed because you we are to you know we have only taken part of your expenses 1:06:46 1 hour, 6 minutes, 46 seconds in IT expenses right and uh we also are looking at opening more branches and 1:06:53 1 hour, 6 minutes, 53 seconds refurbishing some of the branches uh but uh despite all that you know the even after all that what we are we have 1:07:00 1 hour, 7 minutes stated is that the cost to income ratio will remain below 50%. 1:07:06 1 hour, 7 minutes, 6 seconds I think uh you know uh that's what we have committed to uh you know committed to my board and you know when they when when I'm asking for refurbishment of 1:07:14 1 hour, 7 minutes, 14 seconds some of the branches which will entail cost and make it moderate some of the branches so that it gets focused on you know resource mobilization so there will 1:07:22 1 hour, 7 minutes, 22 seconds be some cost coming up and it'll be spread over maybe 27 and 28 uh but like I said we are committed to keep it below 1:07:30 1 hour, 7 minutes, 30 seconds for below 50% and should be in the 46 uh 46 6 47% right at least I'm looking right now it's around it's 1:07:38 1 hour, 7 minutes, 38 seconds around that 44 to 46% around 45% now so you're saying in that slightly higher than than the current 1:07:46 1 hour, 7 minutes, 46 seconds higher certainly it's well well below 50% that's our commitment okay uh great uh really appreciate uh 1:07:54 1 hour, 7 minutes, 54 seconds the results and the commentary and the guidance uh and wish you and your team the best of luck for FI27 thank you 1:08:01 1 hour, 8 minutes, 1 second thank you thank you thank The next question comes from the line of Sakit Kapoor from Kapoor Company. Please go ahead. 1:08:10 1 hour, 8 minutes, 10 seconds Yeah. Namaskar sir. Hope I'm audible. 1:08:14 1 hour, 8 minutes, 14 seconds Yeah. Yeah. Yeah. Thank you sir first of all for the opportunity and congratulations to the team with the oneoff which you have earlier explained. 1:08:22 1 hour, 8 minutes, 22 seconds Our numbers are uh much higher. Our operating profits are much higher than what has been reported. But as as for 1:08:29 1 hour, 8 minutes, 29 seconds the uh if I may conclude to what our earlier speaker and your answers being so we are looking at moderation in both 1:08:36 1 hour, 8 minutes, 36 seconds ROA and and NIMS uh going forward for uh FYI 2627. 1:08:43 1 hour, 8 minutes, 43 seconds So uh this 500 cr plus operating profit uh on a quarterly basis uh do we have 1:08:49 1 hour, 8 minutes, 49 seconds the set uh set of uh uh uh levers that we can defend this uh or this is uh this 1:08:57 1 hour, 8 minutes, 57 seconds will be tad lower since the other parameters are uh going to be trending lower [clears throat] 1:09:07 1 hour, 9 minutes, 7 seconds the 500 crores of operating profit uh I think we did at 522 right Yes sir. Yes sir. 1:09:14 1 hour, 9 minutes, 14 seconds And uh are you suggesting that this will be lower? 1:09:18 1 hour, 9 minutes, 18 seconds Sir, I'm only ask asking you that since you are mentioning that our names and ROA would be slightly lower the averages 1:09:26 1 hour, 9 minutes, 26 seconds would be lower than what we have posted for uh the current quarter. So uh in that trajectory how how confident are we 1:09:33 1 hour, 9 minutes, 33 seconds that this this is a new benchmark on a quarterly basis on the operating profit number if I'm correct. Take me there sir. 1:09:41 1 hour, 9 minutes, 41 seconds Operating profit will certainly be defended. 1:09:44 1 hour, 9 minutes, 44 seconds This number will be defended even for Q1 and situation also. Yes. Yes. Okay. That understanding can be taken. 1:09:52 1 hour, 9 minutes, 52 seconds And so secondly if you could just give us some understanding how uh the nature of the bid pipelines you have especially I think so you are putting the thrust on 1:10:01 1 hour, 10 minutes, 1 second the MSME that will uh that will lead uh the growth lever going ahead. So if you could just give us some colors on uh 1:10:09 1 hour, 10 minutes, 9 seconds what the bid pipelines are currently and taking into account again the the the the inflationary trends because of the 1:10:18 1 hour, 10 minutes, 18 seconds higher crude prices uh uh what do you think sir uh currently uh with with the higher uh GC rates uh how will the 1:10:27 1 hour, 10 minutes, 27 seconds banking space be uh affected uh going going ahead because of these uh higher 1:10:33 1 hour, 10 minutes, 33 seconds because of rates trending higher Yeah. Yeah. I think see rate seems to be hardening in the system. You have seen 1:10:41 1 hour, 10 minutes, 41 seconds the yield actually go up 10 year d going up as far as 7.14% and of course it has retraced some of 1:10:50 1 hour, 10 minutes, 50 seconds its steps. Uh that's a difference we we are seeing a bit of hardening here. uh I think we have to look at how the 1:10:57 1 hour, 10 minutes, 57 seconds inflation works uh going forward particularly after the restation crisis and the impact of the energy enhanced energy prices on the eosystem you know 1:11:06 1 hour, 11 minutes, 6 seconds the raw materials etc. So there could be a bit of hardening here and uh when the inflation is taken the nominal GDP 1:11:14 1 hour, 11 minutes, 14 seconds growth is something that we need to watch and that's going to have a direct impact on the growth in the banking industry as well. 1:11:21 1 hour, 11 minutes, 21 seconds So to that extent uh um I don't know maybe maybe we can we can look at a slight improvement in the growth rate. 1:11:31 1 hour, 11 minutes, 31 seconds Uh so I didn't get your last point. We we are looking at I'm saying that the nominal GDP nor the 1:11:39 1 hour, 11 minutes, 39 seconds nominal GDP growth say real GDP plus your inflation. If the inflation is going to tick up a bit, uh we can see 1:11:47 1 hour, 11 minutes, 47 seconds the growth in the system going up moderated to the extent of recession prices. 1:11:52 1 hour, 11 minutes, 52 seconds Okay. So when we have factored this 20% uh advanced growth or two question yes I'm just the next question. 1:12:00 1 hour, 12 minutes Let me tell you why we are talking about 20%. See the this is not a state bank of India or SFC bank speaking you know when 1:12:07 1 hour, 12 minutes, 7 seconds they look in terms of the growth they will have to factor in the macroeconomic you know require needs and requirements 1:12:14 1 hour, 12 minutes, 14 seconds etc. We are still at a page where our own growth will not impact significantly the competition around. So we can still 1:12:22 1 hour, 12 minutes, 22 seconds knock that extra growth away from the others. That is where our competence for 20% growth comes in. It is not just because the macroeconomic parameters will give you that growth or the leg up. 1:12:35 1 hour, 12 minutes, 35 seconds It is because we are still small. 1:12:38 1 hour, 12 minutes, 38 seconds Thank you. The next question comes from the line of Sesh Gupta from Maximal Capital. Please go ahead. 1:12:45 1 hour, 12 minutes, 45 seconds Good evening sir and uh congratulations on a good set of numbers sir. First question is on your advances growth 1:12:52 1 hour, 12 minutes, 52 seconds guidance. So you know if you look at the past year in PMBB we have had many years of uh you know 8 to 10% sort of a 1:13:01 1 hour, 13 minutes, 1 second growth. This year of course we have done a very good job on that. But uh if I look at the overall advances growth 1:13:08 1 hour, 13 minutes, 8 seconds roughly around 72% has come from gold loans. Um now this also has been a year 1:13:15 1 hour, 13 minutes, 15 seconds where you know gold loan prices have gone up so much. So assuming let's say gold prices don't don't increase from 1:13:22 1 hour, 13 minutes, 22 seconds here on then uh you know what kind of growth rate can we assume because then we will have to only grow by tonnage. Uh 1:13:31 1 hour, 13 minutes, 31 seconds so what can be the realistic growth in such a scenario where gold prices don't go up as much as like in FI26 they went uh so much higher. 1:13:42 1 hour, 13 minutes, 42 seconds You're right that FI26 go the advanced growth has been to a very large extent 1:13:49 1 hour, 13 minutes, 49 seconds driven by the go loan. I think that's but if you look at carefully the MSM space which was which actually 1:13:58 1 hour, 13 minutes, 58 seconds degrew in quarter 1 we ended up with the 14 almost 15% growth in MSM. Now I can 1:14:05 1 hour, 14 minutes, 5 seconds tell you I can tell you that the MSM u uh the machine that we have put in place is beginning to fire. So whatever gold 1:14:13 1 hour, 14 minutes, 13 seconds loan regrowth or the moderation in the I I don't expect a deg growth here but the moderation the growth that will happen 1:14:20 1 hour, 14 minutes, 20 seconds once the um your gold loan prices stabilize uh will be we are we we are confident that can be made up through 1:14:29 1 hour, 14 minutes, 29 seconds improvement in the MSM group and we are also looking at other aspects particularly you know the the car loan 1:14:37 1 hour, 14 minutes, 37 seconds which is beginning to make some some headway the housing loan is beginning to climb back. You know, there are other 1:14:44 1 hour, 14 minutes, 44 seconds elements that is also uh beginning to fire which we should uh we should uh uh which should help us in in sort of 1:14:52 1 hour, 14 minutes, 52 seconds moderating um you know which should you know take take over some of the moderation that the gold one match uh bring about. Yeah. 1:15:02 1 hour, 15 minutes, 2 seconds Okay. So this net weight of 34 tons so how has that grown in the last one year? 1:15:09 1 hour, 15 minutes, 9 seconds I think how much we not done in year see we just quickly made a snapshot of it then we'll have to 1:15:17 1 hour, 15 minutes, 17 seconds look at you know how it is moving this the first time we have actually got these numbers out now we will start 1:15:23 1 hour, 15 minutes, 23 seconds tracking on a on a net basis also thank you ladies and gentlemen that was 1:15:31 1 hour, 15 minutes, 31 seconds the last question for today I would now like to hand the conference over to Mr. 1:15:36 1 hour, 15 minutes, 36 seconds Suli S Nir the managing director from Tamil Lad Merkantile Bank for their closing remarks. 1:15:43 1 hour, 15 minutes, 43 seconds Yeah, thank you and thank you all all all for joining this call. Like I said, 1:15:49 1 hour, 15 minutes, 49 seconds FI26 has been a year of reckoning for us and we have consistently tried to deliver much more than we what we 1:15:58 1 hour, 15 minutes, 58 seconds promised I think and that's something that we are aiming to do in FI27 also. 1:16:03 1 hour, 16 minutes, 3 seconds uh FI27 we are hope we are facing with much more uh as a bank much more I would 1:16:10 1 hour, 16 minutes, 10 seconds say confidently because many of the initiatives that we have taken I think quite a bit of initiatives that we have taken the HR initiative a complete 1:16:18 1 hour, 16 minutes, 18 seconds transformation from a uh legacy based ID based structure pay structure into a CTC based pay structure 83% uh is on 1:16:28 1 hour, 16 minutes, 28 seconds CTC now the PBI has been completely revamped the PBI is the performance based incentive is today uh looking at 1:16:37 1 hour, 16 minutes, 37 seconds growth as the only uh driver for the incentive uh you know there's a lot of automation that has happened the LMS 1:16:45 1 hour, 16 minutes, 45 seconds loan management system phase one has gone live the D digital engagement hub we are revamping uh you know quite a bit 1:16:53 1 hour, 16 minutes, 53 seconds of uh uh action is happening on the IT space and all these is has resulted in in you know unleashing some of the 1:17:02 1 hour, 17 minutes, 2 seconds productive energy, productive gains that is resulting in the number that you saw in FI26 and that it is giving us the 1:17:11 1 hour, 17 minutes, 11 seconds confidence to face FI27 much more confidently and uh 6 to9 months we hope some of these initiatives or rather all 1:17:19 1 hour, 17 minutes, 19 seconds the initiatives currently in would have been completed and uh you know the productivity gains as a result of those 1:17:27 1 hour, 17 minutes, 27 seconds initiatives will be made available. So FI27 we expect overall to be a better year than FI26. Thank you 1:17:35 1 hour, 17 minutes, 35 seconds once again for all for joining us in this conc call. Thank you. 1:17:40 1 hour, 17 minutes, 40 seconds Thank you sir. Ladies and gentlemen on behalf of Tamil Nad Merkantile Bank Limited that concludes this conference call. Thank you for joining us and you may now disconnect your lines.