Ugro Capital Ltd — Q4 FY26

Ugro Capital Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=ADhrENYup1A Published: 3 weeks ago

0:01 1 second Ladies and gentlemen, Kaye and welcome to the Q4 FI26 earnings conference call of Ugrow Capital Limited hosted by Arara Securities. 0:12 12 seconds As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:21 21 seconds Should you need assistance during the conference call, please signal an operator by pressing start and zero on your touchstone phone. Please note that 0:29 29 seconds this conference is being recorded. I now hand the conference over to Mr. Rahul Chen from Aara Securities. Thank you and over to you sir. 0:39 39 seconds Thanks Roja. Good evening everyone. We have with us the senior management team of grow capital. Mr. Sashindra Nad founder managing director Mr. Shante. 0:51 51 seconds Miss Shilpa But Missu Singh head IR and Mr. Siddhhat Rajan head of strategy. 1:01 1 minute, 1 second Over to you sir please. 1:05 1 minute, 5 seconds Thank you Rahul. Uh good evening everyone. I am Siddhhat Rajan head of strategy in SPN and I welcome uh to you grow capitals Q4 FI26 and full year FI26 1:15 1 minute, 15 seconds earnings call. On behalf of the management team I'm delighted to welcome all of you today. Before we proceed, I would like to draw your attention to the 1:22 1 minute, 22 seconds basis of comparison. FI26 and Q4 FI26 financials are on a consolidated basis, including Profectus Capital and Data 1:31 1 minute, 31 seconds Science Technologies Private Limited, whose acquisition was completed on December 8th, 2025 and March 18, 2026, 1:39 1 minute, 39 seconds respectively. FI25 and Q4 FI25 comparatives are on a standalone Euro capital basis. All yearon-year 1:48 1 minute, 48 seconds references in today's discussion should be read with this change of scope in mind. I will now hand over to Mr. 1:54 1 minute, 54 seconds Sachinad for his opening remarks. Over to you sir. Thank you Sedat. Good evening everyone and thank you for 2:00 2 minutes joining us. Before I hand over to Anoj, let me set the strategic context and 2:06 2 minutes, 6 seconds long-term frame. On February 7, 2026, we communicated a structural realignment. 2:13 2 minutes, 13 seconds The rationale was simple. After three years of building a 317 branch emerging market field network, acquiring my life 2:22 2 minutes, 22 seconds for embedded finance and acquiring profctor's capital, the franchise was ready to stop doing all things and focus 2:30 2 minutes, 30 seconds entirely on two verticals where you grow has proprietary origination, superior data and demonstrabably better credit 2:37 2 minutes, 37 seconds outcomes. The intermediated DSA book book business loan machinery loans prime 2:44 2 minutes, 44 seconds lab was ill dilutive capital intensive in the wrong way and not aligned with what we are building. EM lab and 2:53 2 minutes, 53 seconds embedded finance are the decision was therefore clear is stop the non-focus book and concentrate every unit of 3:01 3 minutes, 1 second capital distribution and management attention on the two vertical build for long-term annut compounding 3:09 3 minutes, 9 seconds when we announced the realignment in February we made five commitments each with measurable FY29 target and each 3:18 3 minutes, 18 seconds track publicly every quarter the first shift EM lab and embedded finance to 85% 3:25 3 minutes, 25 seconds of total EM by 29. Second, take out 220 cr of annualized cost. Third, rundown 3:33 3 minutes, 33 seconds prime intermediated portfolio at 50 to 20% annually. And the fourth, no incremental equity through FY29 growth funded entirely from internal acruals. 3:45 3 minutes, 45 seconds The fifth transition to be study state nutled largely cash ROA of 3 to 3.5% by 3:52 3 minutes, 52 seconds FY29 with negligible contribution from co- lending and direct assignment income. I will close my remarks with this. After 4:01 4 minutes, 1 second one full quarter of execution all five are on track. Anoj will show you the operational evidence. Shilpa will show 4:09 4 minutes, 9 seconds you the financial evidence. I will now hand over to Anoj who will take you through the branch network. the productivity inflection and the 4:17 4 minutes, 17 seconds competitive mode in each of the two focus vertical. Anoj over to you. Thank you Shashin. Good evening everyone. I'll 4:25 4 minutes, 25 seconds cover the operational performance this quarter and walk through the two businesses that are driving our next 4:31 4 minutes, 31 seconds phase. Quarter 4 FI26 is the first full quarter of the realignment in execution. 4:39 4 minutes, 39 seconds Let me give you the numbers first and then walk you through the operational detail behind them. AUM is broadly flat quarter on quarter. That is intentional. 4:50 4 minutes, 50 seconds The non-focus intermediated book is running down as planned while the focus verticals are growing strongly. The mix 4:59 4 minutes, 59 seconds of focus verticals has moved from 33% to 38% of total AUM in a single quarter. 5:07 5 minutes, 7 seconds the fastest quarterly shift on record. 5:10 5 minutes, 10 seconds We are on track. Net total income for quarter 4 grew 51% yearonear and 34% 5:18 5 minutes, 18 seconds quarteron quarter. PAD grew 26% year on year. Quarter 4 also carries a one-time 5:26 5 minutes, 26 seconds restructuring cost of about 25 crores the which was the cost of executing the transition cleanly. Excluding that the 5:34 5 minutes, 34 seconds underlying earnings trajectory is exactly where we said it would be on the cost program. The consolidated opex base 5:43 5 minutes, 43 seconds of Yugo and profctorus combined was approximately 750 crores last year. This will reduce to 490 crores plus in FI27. 5:54 5 minutes, 54 seconds the takeout spans, sales and sourcing structures, underwriting and credit layers, branch and support functions and 6:02 6 minutes, 2 seconds overheads all linked to the intermediated verticals we have already exited. The emerging market lab built 6:10 6 minutes, 10 seconds out is also complete. 317 branches across 13 states up from 127 in FY24. 6:19 6 minutes, 19 seconds The focus is now to from expansion to increasing productivity per branch. 6:26 6 minutes, 26 seconds Vintage branches which are older than 12 months are producing 68 lakhs per month in disbbursements approaching the 6:35 6 minutes, 35 seconds management target of about 80 lakhs per month. Behind them there are about 156 6:42 6 minutes, 42 seconds sub6 month branches which are cued as the next leg of nut growth. Emerging market lap amum was at 3,581 crores in quarter 4 with a GMP of 1.2%. 6:56 6 minutes, 56 seconds Coming to the embedded finance uh business which we do through my life which is structurally different it is 7:03 7 minutes, 3 seconds shorter tenor daily AMI average ticket size of one lakh entirely digital 7:10 7 minutes, 10 seconds embedded within phone pay bat pay and other such payment ecosystems. Credit is underwritten on merchant GMV transaction 7:19 7 minutes, 19 seconds data not on physical proximity which allows us to serve at scale and velocity. 7:26 7 minutes, 26 seconds AUM for this business has now reached 2,280 kores in quarter 4 going 27% 7:33 7 minutes, 33 seconds quarteron quarter 6x growth in 15 months. GMPA is 1.7% which is well within our underwriting expectations. 7:44 7 minutes, 44 seconds active merchant customers stands at approximately two and a half lakhs. 7:49 7 minutes, 49 seconds Yields for this segment are around 24 to 26%. 7:54 7 minutes, 54 seconds Hundreds of millions of digitally transacting merchants in India which are the vast majority without working capital credit matched to their cash 8:02 8 minutes, 2 seconds flows is the target segment for this business. Ugrow through my sublife has the platform integration, data 8:10 8 minutes, 10 seconds infrastructure and a credit capability to serve this segment at scale. Together 8:17 8 minutes, 17 seconds both the businesses secured sec nut income compounding from the branch network and a high velocity yield from 8:25 8 minutes, 25 seconds the embedded platform are complimentary not competitive. Infrastructure is also 8:32 8 minutes, 32 seconds in place. I will now hand over to Silpa for the financial detail. Silpa, over to you. 8:39 8 minutes, 39 seconds Thank you so much Anoj. Good evening everyone. Uh please allow me to take you through the numbers in more detail. 8:46 8 minutes, 46 seconds Interest income was at 415 crores in Q4 which was up 57% yearonear and 26% 8:55 8 minutes, 55 seconds quarteron quarter. Recurring net interest income on our balance sheet is strong. As the focus verticals grow, 9:03 9 minutes, 3 seconds this line expands as a share of total revenue. Collending and direct assignment income was 155 crores up 30% 9:13 9 minutes, 13 seconds yearonear. This line will reduce proportionally as intermediated dispersements stop and this is purely by 9:22 9 minutes, 22 seconds design as we replace it with onbook interest income that accretes to net worth. Fee and commission income for Q4 9:31 9 minutes, 31 seconds was 33 crores covering essentially prepayment income on loans and certain income on uh loan documentation charges 9:40 9 minutes, 40 seconds and service fees. Other income was 25 crores comprising of insurance distribution fees on borrower covers 9:48 9 minutes, 48 seconds that we take income from incidental debt syndication we earn when we arrange financing for MSN customers whose 9:56 9 minutes, 56 seconds financial needs exceed our lending thresholds and fee income earned by data science technologies our wholly owned 10:04 10 minutes, 4 seconds subsidiary which offers data analytics and credit intelligence services to financial institutions s finance cost 10:13 10 minutes, 13 seconds was 284 crores. Our cost of borrowings came down to 10.16%. 10:21 10 minutes, 21 seconds Uh this is for the fifth consecutive quarterly uh improvement that we have shown. This was also down 45 bits year-over-year. 10:30 10 minutes, 30 seconds Each 25 uh each 25 bits point reduction at the current AM scale is worth 35 to 40 crores annualized. 10:40 10 minutes, 40 seconds Opex was at 180 crores excluding the one-time uh cost of 25 crores which was 10:47 10 minutes, 47 seconds related to the exit on the business vertical that we have done. The annualized savings program is on plan 10:55 10 minutes, 55 seconds and the balance will flow through in FI27. 10:59 10 minutes, 59 seconds Credit cost was at 72 crores 1.9% of average AUM analyzed and this is well 11:06 11 minutes, 6 seconds within the expected range that we intend to work on. On asset quality GNPA stands at 2.5% and net NPA at 1.6%. 11:18 11 minutes, 18 seconds We had a good coverage over the uh over the GNPA assets at 45%. Our stage one is 11:26 11 minutes, 26 seconds at 93.1% of the overall AUM and collection efficiency stands at 98%. 11:33 11 minutes, 33 seconds The move from 2.2% to 2.5% GMPA is a denominator effect as the non-focus 11:40 11 minutes, 40 seconds books runs down. It is essentially not a deterioration in the incremental portfolio. We are standing at a healthy 11:48 11 minutes, 48 seconds capital adequacy of 21.2% which is up from 20.8% 8% which we had shown last quarter. Our net worth stands 11:57 11 minutes, 57 seconds at 2,96 crores with a very healthy leverage of 3.7x. 12:03 12 minutes, 3 seconds Our debt stands at 10,782 crores which is well diversified across banks, DFIs and the debt capital market. 12:14 12 minutes, 14 seconds We will essentially not require incremental equity through FY29. 12:19 12 minutes, 19 seconds Our liquidity is comfortable. Our Q4 cash balances which we held uh of about 12:26 12 minutes, 26 seconds 1,800 crores are being deployed. Cost of borrowing will continue improving. 12:33 12 minutes, 33 seconds Thank you for your continued trust and support. We will now be happy to take questions. 12:41 12 minutes, 41 seconds Thank you very much. 12:44 12 minutes, 44 seconds We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to 12:52 12 minutes, 52 seconds remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, 13:01 13 minutes, 1 second we will wait for a moment while the question Q assembles. 13:14 13 minutes, 14 seconds Participants, you may please press star and one to ask a question. Now 13:24 13 minutes, 24 seconds the first question is from the line of Rohitura, an individual investor. Please go ahead. 13:30 13 minutes, 30 seconds Hello sir, am I audible? Yes, you are. 13:37 13 minutes, 37 seconds Sir can you please explain the process of saving rupees 200 to 220 cr annually? 13:47 13 minutes, 47 seconds Uh so uh this 220 crores of cost save uh was was on account of two uh uh 13:55 13 minutes, 55 seconds strategic decisions which we took last year. The first was the acquisition of Profectus. Uh and uh if you recall uh 14:03 14 minutes, 3 seconds the object one of the uh objectives of that acquisition was of opex 14:10 14 minutes, 10 seconds rationalization. So profectus was also in MSM lending business uh with about 3,000 crores of AUM with a very large uh 14:20 14 minutes, 20 seconds workforce. uh Ugrow also had a very similar workforce uh uh uh catering to 14:27 14 minutes, 27 seconds the same business. So uh when we acquired Profus uh there was a duplicacy 14:33 14 minutes, 33 seconds in OPEX and we had identified about 120 odd kores of cost which would which we had taken out at the time of 14:41 14 minutes, 41 seconds acquisition. Additionally, in February, uh we did a realignment in Ugrow's own 14:48 14 minutes, 48 seconds business where we said that intermediated uh prime lower yielding segments uh we 14:56 14 minutes, 56 seconds will stop sourcing and all the cost uh attached to that which included front-end sales and credit and other 15:03 15 minutes, 3 seconds processing costs uh related to uh sourcing of that prime segment uh roughly came to about 100 odd crores. So both those put together is 220 crores. 15:15 15 minutes, 15 seconds All of that has got actioned. Some people are especially on manpower related are serving notice period and uh 15:24 15 minutes, 24 seconds they uh the the full cost uh impact will start coming from this quarter. 15:31 15 minutes, 31 seconds But this is not this was not an ongoing thing. This was a one-time opex reduction exercise. 15:39 15 minutes, 39 seconds So this quarter we we can see your business this impact in profit and loss treatment in Cuban Fle 27 itself. 15:48 15 minutes, 48 seconds So some some impact in Q1 will also start coming while uh uh it it is not a 15:55 15 minutes, 55 seconds one-on-one correspondence that we will we have reduced 220 crores of opex our uh it will immediately reflect all of it 16:03 16 minutes, 3 seconds in in profits uh because it is also associated with the running down portfolio and as we move forward some of 16:12 16 minutes, 12 seconds it will start getting reflected in terms of change in our profit profile. 16:18 16 minutes, 18 seconds While our current lot of our uh current profits are on account of uh the 16:24 16 minutes, 24 seconds co-ending income which we do uh this will replace some of it with the direct nut income but yes some of it will start 16:33 16 minutes, 33 seconds reflecting from quarter one sir can and sir can I have one more question please? 16:43 16 minutes, 43 seconds Yes sir. 16:45 16 minutes, 45 seconds Tell me more about the customer profile which we are targeting and which we are focusing on increasing our area of contribution. 16:57 16 minutes, 57 seconds So uh in emerging markets uh business uh uh we are catering to customers who are 17:04 17 minutes, 4 seconds microme typically with turnover less than 3 crores median turnover of about 1 17:11 17 minutes, 11 seconds cr. uh we do tickets we do only secured loans there with ticket sizes between 7 and a half lakhs to 50 lakhs. Uh this we 17:20 17 minutes, 20 seconds do in tier 2, tier three and tier four uh towns in India through our uh dedicated branches. Our dedicated sales 17:29 17 minutes, 29 seconds team source sources these customers directly on embedded finance. The target segment are small retailers 17:38 17 minutes, 38 seconds uh with turnover range uh between 15 20 lakhs to little higher. These are all retailers who are using some kind of 17:46 17 minutes, 46 seconds payment ecosystem QR codes. We get embedded inside those payment ecosystem apps and through that we read their 17:55 17 minutes, 55 seconds daily transaction limits uh apply our uh data science engine and make an 18:01 18 minutes, 1 second eligibility. So broadly two segments one where we are giving 7 1/2 lakhs to 50 18:08 18 minutes, 8 seconds lakhs of secured loan the other segment of small retailer where the average ticket size is about one lakh but we go 18:14 18 minutes, 14 seconds up to five lakhs ticket size of these loan 18:23 18 minutes, 23 seconds uh come again of these loans one ticket size so so the uh one year the average 18:30 18 minutes, 30 seconds duration is one year and these are for daily repayment. Okay sir. 18:37 18 minutes, 37 seconds Thank you sir. 18:41 18 minutes, 41 seconds Thank you. The next question is from the lion of Samir Dalal from Natwar Lal and Suntock Brokers Private Limited. Please go ahead. 18:50 18 minutes, 50 seconds Yeah. Hello Mr. Sachindraat. Um you know I unfortunately wasn't there for the last call and which is why I'm going to ask this question. And I want to 18:58 18 minutes, 58 seconds understand why such a big change in the strategy on two fronts. One eliminating a part of the business which contributed 19:06 19 minutes, 6 seconds to 70% of your total AUM and uh suddenly moving to such granular I mean such 19:13 19 minutes, 13 seconds small ticket loans where the risk is a lot higher. The second coal lending was something that you always specified. I 19:22 19 minutes, 22 seconds remember you had done a uh an a meet with all the investors and analysts and all of that uh where you said that you 19:31 19 minutes, 31 seconds know we were one of the pioneers in the coal lending and co- lending is such a great opportunity because we can sell down these loans at a lower rate earning a spread without having the capital 19:39 19 minutes, 39 seconds deployed. Why are you taking a call on not to do that part of the business anymore when it was so lucrative and which you were so gung-ho about? 19:49 19 minutes, 49 seconds Yeah. No, thank you. I think so a lot of this we answered in the last quarter call as well. Uh but I will you know for the benefit of those who are joining for 19:57 19 minutes, 57 seconds the first time I'll summarize it. So I think you asked three specific question and I'll answer them in that order. 20:03 20 minutes, 3 seconds First and foremost that why we decided to exit uh from lower yielding what you 20:10 20 minutes, 10 seconds you said probably your understanding of a better credit profiled customer. Uh so I'll answer that first. So you are right was always designed and built for scale. 20:22 20 minutes, 22 seconds Uh when we started in 2018 we started with,000 cr of capital over a period of our 7 year or 8 year of journey we increased our capital base to roughly 20:30 20 minutes, 30 seconds around 3,000 odd cr. The premise was that over period of time the cost of borrowing will keep coming down. What we 20:37 20 minutes, 37 seconds saw in the marketplace over a period of last two two and a half years that the uh cost of liability is a function of 20:45 20 minutes, 45 seconds rating actually parentage plus rating and multiple other factors and we didn't see the same impact on our cost of 20:53 20 minutes, 53 seconds borrowing it has remained flattish or it has come down by you know some some basis point now for the lower yielding 21:00 21 minutes prime DSA customer segment you need a pricing advantage because otherwise the economic value creation was not 21:09 21 minutes, 9 seconds happening. We recognized this uh core challenge around 2 and a half years back and we were internally building the 21:16 21 minutes, 16 seconds branch network to enter into small ticket lab segment and that network we build and took all the opics up front in 21:25 21 minutes, 25 seconds last 3 years itself. And when that got completed and we were confident that now we can pivot the portfolio on that as 21:32 21 minutes, 32 seconds well as on merchant lending we said that this is the time when we should make that pivot. Number two your question with respect to the coal lending we are 21:40 21 minutes, 40 seconds still very gango about coal lending. We still continue to believe that in order to improve the credit flow to deserving MSN and other segment of the market a 21:49 21 minutes, 49 seconds combination of bank and NBFCs is the best combination. However, there is structural challenge uh which we 21:56 21 minutes, 56 seconds recognize over last two two and a half years. Uh co- lending definitely requires asset classes which are lower 22:03 22 minutes, 3 seconds yielding asset classes. Bank by nature actually like to have asset which are lower yielding more sec what they 22:10 22 minutes, 10 seconds perceive more secure. Now whether you do that business in form of a co- lending or whether you do it on your own balance sheet the structural margin still remain 22:19 22 minutes, 19 seconds the same uh while you don't utilize the capital. Point being that if you lend at 14% if your credit cost is 025% and your 22:28 22 minutes, 28 seconds opex is say 3%. And your cost of borrowing is 10 and a half and if your co- lending rate is 9 and a half you are still making only 1% margin right. uh 22:37 22 minutes, 37 seconds and that is not accurative to you know investors, shareholders you know to management and so on so forth and link 22:44 22 minutes, 44 seconds point to that is that while the co-ending you know uh the income volatality on coending is very severe 22:51 22 minutes, 51 seconds and high uh which means majority of the investors and also us would like to see 22:59 22 minutes, 59 seconds a proper nut flow. So when you take the asset on the balance sheet you have an interest income which you calculate while in coal lending it becomes volatile in some quarters it can happen in some quarter it does not happen. 23:09 23 minutes, 9 seconds Second the income or the profit which comes from the coal lending does not accrete the capital adequacy network. So 23:17 23 minutes, 17 seconds suppose in this quarter if we have done say you know 100 cr value of income which has come from the coal lending for 23:25 23 minutes, 25 seconds the purpose of recognizing this income uh for capital adequacy would happen over period of time when this actually 23:32 23 minutes, 32 seconds get realized which means that this business requires more capital. Now you know if you keep raising more capital 23:40 23 minutes, 40 seconds and keep diluting shareholders at low value you know the value creation actually become distract and that's why once we got ready we said that we will 23:49 23 minutes, 49 seconds cali and last sorry before that the entire DSLE intermediated model has now become one big uh an inefficiency has 23:58 23 minutes, 58 seconds come in wherein these loans are churned at a very fast pace there are large vendor which have cost of borrowing advantage they take good quality 24:06 24 minutes, 6 seconds customer from us and then they get transferred. So average maturity of these loans you know keep getting reduced over period of time. So keeping 24:13 24 minutes, 13 seconds all of that in mind and we are not saying that we'll not get do do lending coending will continue to be part of our component but we wanted to increase the 24:23 24 minutes, 23 seconds portfolio yield. uh we wanted to protect the dilution and we wanted to get to NC3 and a half% of ROA and ROA which largely 24:32 24 minutes, 32 seconds contributed by cash generating interest income rather than the co-ending income. 24:37 24 minutes, 37 seconds So you know so this is a 2 and a half year of journey which we are internally preparing once we got ready then we executed it and the results are in first 24:46 24 minutes, 46 seconds quarter itself. Uh so if you look at our you know this quarter disbbursement on emerging market lap uh you know it is 24:53 24 minutes, 53 seconds actually tracking to what we are projecting for FY29. Last but not least you asked this question and you which you said higher and riskier segment. 25:02 25 minutes, 2 seconds Answer it is sir both yes and no. Uh the what you presume or we presume is higher riskier segment. This may be true when 25:09 25 minutes, 9 seconds you look at purely from the lens of GNPA. This is obviously not a customer which has a turnover between 5 cr to 15 cr. This is a customer which this is 25:17 25 minutes, 17 seconds below 3 cr of turnover. This customer has a potential to default higher than what a prime customer would be. So 25:24 25 minutes, 24 seconds suppose we have operated in the G&PA band of two 2 and a half%. Now once we fully mature in this, this would be in a G&PA band of three three and a half%. 25:33 25 minutes, 33 seconds But it doesn't change the credit cost metric because 100% of these loans are secured. They are again secured against self-occupied residential property, commercial property and so on so forth. 25:44 25 minutes, 44 seconds So ultimately even if the default rate is little higher the credit cost would remain in the same band and that's why 25:51 25 minutes, 51 seconds on the credit cost adjusted basis this is a superior business than to do a low yielding business so it is that would only be for the emerging 25:59 25 minutes, 59 seconds market portfolio right Mr. have that because the embedded market lending business would not have the security. 26:07 26 minutes, 7 seconds Of course, you're right. And just to clarify, earlier also we always had a 30% portfolio which was an unsecured business loan portfolio and we are 26:16 26 minutes, 16 seconds replacing that with the embedded portfolio. So it is not that we will we did not had an unsecured portfolio. We had it we are only replacing the 26:25 26 minutes, 25 seconds business loan with embedded merchant lending. Our view is that the embedded merchant lending credit cost is far more controlled than open market business 26:34 26 minutes, 34 seconds loan. Predominantly the way the product is designed it is a it is a one lakh rupees of average ticket size of loan 26:41 26 minutes, 41 seconds done on the basis of the payment data flow bureau score and deeply in deep integration with the payment platform and get repaid on a daily basis. So the 26:50 26 minutes, 50 seconds credit profile the credit cost all of that is if not and also adjusted for the yield business loan was roughly around 26:57 26 minutes, 57 seconds 18 and 19% this is at 26%. So adjusted for the yield and credit cost this is a superior roe business without changing the overall risk profile of growth. 27:09 27 minutes, 9 seconds Okay. So the gross NPA going up to 1.7 says it's within your expected underwriting expect underwriting 27:15 27 minutes, 15 seconds expectations. what would be a number of gross NPA that we can expect to see in 27:23 27 minutes, 23 seconds that business uh and uh before which there would be a cause of concern or something that would uh make you think about this business strategy. 27:33 27 minutes, 33 seconds So, hi this is Anoji. I'll answer this uh question. Uh so when we had designed the product about 18 months back uh and 27:41 27 minutes, 41 seconds this is a one-year tenure business uh tenure tenure loan business on an average uh we had projected a 4 to 4 and 27:48 27 minutes, 48 seconds a half% GMPA here. Uh and after 18 months uh we have seen about six cohorts 27:56 27 minutes, 56 seconds which have completed their lif life cycle uh the G&Ps are 1.7. So uh we are quite comfortable up to 4 4 and a half%. 28:08 28 minutes, 8 seconds And at this point in time it is doing much better than what we had ourselves anticipated. 28:14 28 minutes, 14 seconds Okay. And what can we ex I mean how do you do the credit uh uh gross NPA recognition because this is a daily payback. Now if a person doesn't pay 28:21 28 minutes, 21 seconds back for a command on on the on the 90 days 90 days past d you the the NP recognition exactly 28:28 28 minutes, 28 seconds remains the same but is stamped on a daily basis. 28:33 28 minutes, 33 seconds Correct. So now my question is if you all know you all have obviously have early warning if the person has not paid for 10 days or 15 days uh do you start 28:42 28 minutes, 42 seconds making any provisions for it or you will not make any provisions and can you just run us through how your provisioning cycling would be for these low small 28:49 28 minutes, 49 seconds ticket items which could which are unsecured in nature. 28:53 28 minutes, 53 seconds So uh in in general unsecured we provision a little higher. So at the at the full portfolio level uh for a stage 29:02 29 minutes, 2 seconds three unsecured we are providing about 75%. Here uh depending on which stage it is. So up to up to 30 days he has not 29:11 29 minutes, 11 seconds paid he's in stage one and we will provide about 30 odd%. Uh between 30 to 90 days we will provide about between 50 29:18 29 minutes, 18 seconds to 60%. And after 90 days we will provide about 75 to 80%. 29:23 29 minutes, 23 seconds Okay. Now one last question if I can. um you know at the moment you are growing 29:30 29 minutes, 30 seconds your uh focus vertical by about say 17 18%. And you're talking of running down 29:37 29 minutes, 37 seconds the uh def focus business at about 20% or odd levels. So is it safe to assume that actual AUM growth for the next say 29:45 29 minutes, 45 seconds 2 years would be zero kind of of you know marginally here or there because one side of the book which is the larger side is degrowing whereas the smaller 29:53 29 minutes, 53 seconds side is growing. So at least for the next year there would not really be a growth in the AUM. 29:58 29 minutes, 58 seconds If I may answer this question, I think obviously a lot of people get focused on growth because I presume that you you 30:06 30 minutes, 6 seconds know the general perception is the growth leads to incremental profitability. Uh even if I take your assumptions on the AUM as right but 30:15 30 minutes, 15 seconds those assumption does not translate back you know to the bottom line. So to some sense you are right if you do the math 30:22 30 minutes, 22 seconds with the way we have given the the data 3,500 odd cringing at 25% CAGGR roughly 30:29 30 minutes, 29 seconds around 2,000 cr growing at 25% CAGR and 10,000 cr you know going down for FY27 it would be a flattish and then then 30:37 30 minutes, 37 seconds you'll start seeing little bit of uptick on AM but the underlying the bottom line is transitioning because uh it is 30:46 30 minutes, 46 seconds replacement of a 15% yield portfolio to say 17% % portfolio and that's the transition. So we are you know what we 30:53 30 minutes, 53 seconds have said from we are going from scale to bottom line. So while and we are our DNA is of a scale but that scale was 31:01 31 minutes, 1 second leading to you know very large shareholder dilution not value creative and that's why we are now focused on 31:09 31 minutes, 9 seconds bottom line then just sheer growth and also just to add the the running down portfolio which is the prime portfolio 31:17 31 minutes, 17 seconds is all very long tenure. So it is not that uh it will suddenly come down it will take its own time because typically 31:24 31 minutes, 24 seconds these are 10ear lap loans. Uh so we have estimated 15 to 20%. Uh uh and it will not I don't think it will excavate more than that. 31:35 31 minutes, 35 seconds No I'm not denying that. I'm just asking on a general basis about 15,000 will be probably the ending of FI27 also and 31:43 31 minutes, 43 seconds FI28 may be 161 17 but like Mr. Nat said I think the profitability is what is important also and that if it rises 31:50 31 minutes, 50 seconds that's fine I mean I guess so yeah from that angle is fine. I mean a lot of people are lot of people are listening. 31:57 31 minutes, 57 seconds So obviously when people think a company which has grown historically at 67% caggr and now would not grow at the same 32:04 32 minutes, 4 seconds rate what's the problem but I tried explaining that problem that sometimes you have to choose between just sheer growth versus the bottom line. You need 32:12 32 minutes, 12 seconds both but at this point of time for next three years we think we have to focus on the bottom line which is coming through this transition. 32:19 32 minutes, 19 seconds Fair enough. But only problem when you do that no m this is just my observation I mean not a question but because the bottom line is not growing and if you do 32:28 32 minutes, 28 seconds face some deloquencies and NTAs the NTA percentage as a overall rises because when your B when your numerator is 32:35 32 minutes, 35 seconds rising but your denominator is not it kind of sends out a uh you know a signal of rising NTA and maybe that is also the 32:42 32 minutes, 42 seconds case we are seeing this 1.7 versus maybe 1.5 I'm not sure exactly but and that also and second credit costs also seem a 32:49 32 minutes, 49 seconds bit elev elevated. So the last question I would like to end on is where do we see credit cost stabilizing given for the next two years given we expect our loan book to be more or less flattish. 33:02 33 minutes, 2 seconds So uh uh uh we have estimated this very on a very very granular basis we we foresee credit cost to be in the zone of little less than two in the zone of 2%. 33:14 33 minutes, 14 seconds But not more. 33:16 33 minutes, 16 seconds Fair enough. Those are valid points and we'll keep a track on them. Thank you very much for the time and the answers. Thank you. 33:23 33 minutes, 23 seconds Thank you ladies and gentlemen. In order to ensure that management is able to address questions from all participants, we would request you to please limit your questions to two per participant. 33:34 33 minutes, 34 seconds The next question is from the line of Amitab Sthalia from SKS Capital and Research. Please go ahead. 33:42 33 minutes, 42 seconds Hello. Am I audible? You are Amitab. Please go ahead. 33:46 33 minutes, 46 seconds Yeah. Hi. Hi. Hi. Hi Sachina Anoj uh congrats on a good set of numbers and uh consolidation of prospectus. Uh I just 33:56 33 minutes, 56 seconds wanted to just uh reconfirm the uh the final equity. I I don't know if it I joined late so it may have been uh 34:05 34 minutes, 5 seconds clarified on the call earlier but just what will be our fully diluted equity for the sake of uh full clarity any 34:12 34 minutes, 12 seconds pending conversions of CCDs or what we're seeing in uh now what you're saying is 34:19 34 minutes, 19 seconds sorry only two lakh shares so only two lakh shares is pending conversion 34:30 34 minutes, 30 seconds okay only two lakh shares which is pending conversion somebody's request has not come otherwise what you know what you're seeing is their fully 34:37 34 minutes, 37 seconds diluted uh shareholdings so total outstanding share should be 15 crores 15.29 15.29 29 crores. Yeah. 34:48 34 minutes, 48 seconds Uh okay. That's so what what is uh reflecting in the March balance sheet is your final almost you know uh effectively your fully diluted equity. 35:00 35 minutes Yes. Yes. Two lakh shares to be converted but it's okay. And there's no further dilution of warrants or any anything from the past? 35:09 35 minutes, 9 seconds No. Everything everything is done? 35:11 35 minutes, 11 seconds Everything is done. And uh all your CCDs are either matured or converted. Uh all CCDs are matured and converted. 35:22 35 minutes, 22 seconds Okay. Okay. So there's no um non-interest bearing uh bonds or uh on your books as of now. 35:30 35 minutes, 30 seconds Nothing. Nothing. 35:32 35 minutes, 32 seconds Okay. And uh what is our uh final uh again it might be there in your presentation but just for the sake of uh 35:40 35 minutes, 40 seconds understanding. So uh about the uh your uh net worth your adjusted uh uh net worth what would that be? 2900 35:49 35 minutes, 49 seconds crores roughly is your uh I understand there's some amount which is um 35:56 35 minutes, 56 seconds uh uh I I'm forgetting the exact terminology but there's some amount which is uh reduces your adjusted net worth too. 36:06 36 minutes, 6 seconds If you can just uh help me understand that. No, no, no. So there two two 36:12 36 minutes, 12 seconds different things. So our net worth as of today is 2,96 crores. That's the net worth. I think 36:21 36 minutes, 21 seconds the last in our last conversation we said that for capital adequacy purposes RBI uses a different formula and this 36:30 36 minutes, 30 seconds net worth is you know net off against uh you know income which has come from the coal lending which sits in the network but RBI recognized it for the purposes 36:39 36 minutes, 39 seconds of capital adequacy when the cash get realized. So you might be referring to that but as of today the net worth is 900. 36:48 36 minutes, 48 seconds Okay. So our book net worth as far as the balance sheet is concerned which is gross net uh gross of NPA right of 2900 crores. 36:59 36 minutes, 59 seconds Yes. 37:01 37 minutes, 1 second Okay. And and what is that uh so could you just explain uh this part again please? the RBI uh the capital adequacy 37:09 37 minutes, 9 seconds purpose what RBI recogniz and what this amount how this amount gets realized the differential 37:16 37 minutes, 16 seconds I'll tell you the concept RBI what is it what is what is the capital adequacy in the RBI balance a capital adequacy is a 37:23 37 minutes, 23 seconds buffer which protect lender of of the financial institution against the future credit loss so the principle being that 37:32 37 minutes, 32 seconds the lenders should their money should be repaid and if there are losses access through credits shareholders should absorb it and that's why RBI provided 37:41 37 minutes, 41 seconds framework of capital adacy for banks it is lower and that's why they are much levered and for NBFC it is combined 15%. 37:49 37 minutes, 49 seconds uh you can take it in the form of tier 1 capital and tier 2 capital. Now given that this is a buffer for future credit 37:55 37 minutes, 55 seconds losses, RBI take more conservative view and says that the net worth for the purpose of capital adequacy should be a 38:03 38 minutes, 3 seconds liquid net worth. So that's why things like goodwill intangible assets are taken out from your total net worth. In 38:12 38 minutes, 12 seconds our case also the income taken from the co- lending because you take the NPV value of the differential interest as a 38:21 38 minutes, 21 seconds part of the income but it get realized over the life of the loan. So as and when it get realized it keep getting added back to the network. So this is the difference and the gap. 38:33 38 minutes, 33 seconds Okay. And what would that difference be as on March 31st? 38:38 38 minutes, 38 seconds It's very difficult to you know so the way to simple in simplest term uh you should think of this way our debt to 38:44 38 minutes, 44 seconds equity ratio is roughly around 3 3.7x and our capital adequacy is around 20% right 21.2% 38:53 38 minutes, 53 seconds 21.2%. So theoretically you know uh which means that on a capital adequacy basis we are a five time lever but on a 39:00 39 minutes net worth basis we are four times leverage so that's the difference. Okay, got it. Okay, thanks so much. That uh helps me understand better. 39:12 39 minutes, 12 seconds Thank you. The next question is from the line of Chaitan from Vihan India Fund. Please go ahead. 39:18 39 minutes, 18 seconds Hello. Hi Mr. N. Uh congrats on the good set of numbers. Uh I wanted to ask about uh uh the embedded finance business. uh 39:26 39 minutes, 26 seconds is the are the risk weights on the embedded finance business uh higher than the the previous business that we are 39:33 39 minutes, 33 seconds structuring away from? Uh and uh do our um NPA overall do they include 39:41 39 minutes, 41 seconds repossessed assets and and how do we resolve repossessed assets that we have gotten in the last 5 years? 39:49 39 minutes, 49 seconds Yeah. So uh uh the embedded finance uh risk weight is same uh as uh any other 39:56 39 minutes, 56 seconds loan uh uh as far as regulation is concerned because all all these are MSME loans uh whether they are secured or unsecured which is 100%. 40:06 40 minutes, 6 seconds uh and uh our uh uh uh on the repossessed assets. Yes, we have been uh repossessing assets uh now and have very 40:16 40 minutes, 16 seconds good experience on them for last 3 4 years. Uh typically for assets greater than 20 lakh ticket size uh we use surface. 40:26 40 minutes, 26 seconds uh and uh the typical timeline of resolution in our portfolio uh is between 12 to 15 months uh post uh the 40:36 40 minutes, 36 seconds NPA. Uh so uh it typically takes about uh 3 months uh uh to get the uh SARSC 40:44 40 minutes, 44 seconds order and then about 3 to 6 months for a successful auction. 40:49 40 minutes, 49 seconds While our own experience also is that once uh a a definitive court order is obtained uh in about 40 to 50% cases 40:59 40 minutes, 59 seconds customer comes on the table uh and settles. 41:03 41 minutes, 3 seconds Yes. And so on the unsettled uh when you actually have to physically recover these assets what is the recovery rate net of cost? 41:14 41 minutes, 14 seconds Uh so so far uh in our experience uh we have there's only time value of money uh 41:21 41 minutes, 21 seconds because uh uh the time which it takes for recovery but we have not lost anything uh we have got uh our 41:28 41 minutes, 28 seconds principles back actually the internally we yeah cost do you spend on it as a 41:36 41 minutes, 36 seconds percentage of those assets then uh the uh separately that cost uh would be closer to 1% Okay, great. 41:45 41 minutes, 45 seconds Yeah. Thank you very much. Thank you. 41:54 41 minutes, 54 seconds Thank you. The next question is from the line of Adash, an individual investor. Please go ahead. 42:01 42 minutes, 1 second Uh hi. Uh thank you for the opportunity. 42:03 42 minutes, 3 seconds I had a couple of questions. First is Mr. Nat. Uh given that for the last two two and a half years we were planning to 42:10 42 minutes, 10 seconds move to a high yielding uh book. what was the rational now to acquire profctors whose yield is I think is much 42:18 42 minutes, 18 seconds similar or comp I think the RO is sub 1% for it and today we have acquire after acquisition we are now running down part 42:26 42 minutes, 26 seconds of the book and laying of people so first question is like why make the acquisition when our intent was always 42:32 42 minutes, 32 seconds to move towards higher yield yeah can I answer that first yeah yeah sure I have two other questions so I just hold no problem 42:41 42 minutes, 41 seconds we'll come back to So the reason why we could transition to this is because one of the reasons was because of proctorus. 42:49 42 minutes, 49 seconds As you would as you would remember that we said that we have been building the branch network. This branch network uh 42:57 42 minutes, 57 seconds you know got matured to around 300 odd but the real profitability flow from this branch network would happen over a period of next two years. What profectus 43:06 43 minutes, 6 seconds helped us uh is exactly what when we r so obviously we had this in mind that we have to rationalize. So basically we acquired a full company and the 43:14 43 minutes, 14 seconds portfolio uh profctors had a total cost base of around 200 180 odd cr and we have taken out majority of that cost. So 43:24 43 minutes, 24 seconds now on that portfolio there is a cash generation profitability coming which is buffering for the opex which we have built out. So that is and exactly that 43:33 43 minutes, 33 seconds we replicated for you grow as well. So it is about trans doing three things. 43:38 43 minutes, 38 seconds One adding the a portfolio which we were confident of improving our secured bit and reducing credit cost or managing 43:47 43 minutes, 47 seconds credit cost. Third exact extracting profitability which substitute for the future growth which will come from 43:53 43 minutes, 53 seconds emerging market and also substituting our co- lending income from real cash profitability. So a combination all of 44:00 44 minutes that is was the tactical reason why we acquired profctors also it was an ROE enhancer uh because we paid roughly 44:09 44 minutes, 9 seconds around 1,400 cr cash for a 1200 cr net worth company and on you know year 1 on 1400 cr we are generating around 150 odd 44:17 44 minutes, 17 seconds cr of profitability which was roughly around 10 odd% higher than our existing roe. 44:25 44 minutes, 25 seconds Uh understood. Uh the other question is uh slightly on the bookkeeping side. Uh if I were to remember correctly on the 44:32 44 minutes, 32 seconds terms of the warrants and the CCD uh the CCD had a part of interest being 44:38 44 minutes, 38 seconds repaid I think around 12.5 and 12.5% back when the warrants uh don't get converted. Uh has that payment been done 44:46 44 minutes, 46 seconds and how is it uh flowing through the P&LN? 44:53 44 minutes, 53 seconds Yes. uh those payments towards the uh interest component of the CCDs have been done uh in December itself and uh they 45:02 45 minutes, 2 seconds have been uh adjusted uh from the uh capital reserves. 45:08 45 minutes, 8 seconds Understood. So those payments are already done and even the warrants which are not converted that is also flown through I'm assuming by now. Uh yes. 45:17 45 minutes, 17 seconds Yeah. Uh the last question is if I remember correctly uh the employees and promoters together have around 8.6 45:24 45 minutes, 24 seconds million right uh of uh esops which are therefore vesting. What are the broad terms of this? Is it a fixed price? What 45:32 45 minutes, 32 seconds price is it given that there's been huge variation in the uh price of the last uh one year? 45:40 45 minutes, 40 seconds So in this this time in slide number 20 we have segregated. So I'm defined as promoter which means that I'm ineligible 45:47 45 minutes, 47 seconds for any kind of esophership which is through my company's my family uh has grad little bit increased because 45:54 45 minutes, 54 seconds it was I think it was 1.98% I increased it on 30th of uh uh March uh 46:02 46 minutes, 2 seconds and that's why it touched 2%. Uh and employees have a pool of around 3.3% 46:08 46 minutes, 8 seconds 3.3%. Now this 3.3% is time wasted. Uh so I think so and but obviously you're right the uh the cost 46:17 46 minutes, 17 seconds of or the grant price is much higher I think. So the base of that for two different branches one is 200 rupees and other one is around 130. 46:28 46 minutes, 28 seconds Yeah. 46:30 46 minutes, 30 seconds Understood. Understood. Uh what is the split which is like is it majority 200 or 130 or is it I think it should be half half off half. 46:42 46 minutes, 42 seconds Okay. Oh that's that's helpful. Thank you so much. All the best. Thank you. 46:49 46 minutes, 49 seconds Thank you. The next question is from the line of Rashi an individual investor. Please go ahead. 46:58 46 minutes, 58 seconds Hi I'm audible. You are. Thank you. 47:03 47 minutes, 3 seconds Yes. Hi Mr. Nat. Uh congratulations on a set of good numbers. I mean I have a question regarding the perfected. I mean I think you partially answered that for 47:10 47 minutes, 10 seconds the previous caller but wanted to know the school financing that perfected is doing is that part of what's being stopped or is that still continuing and if so is that a third vertical? 47:24 47 minutes, 24 seconds So uh the school finance uh hi rishi this is anoj uh the school financing uh 47:30 47 minutes, 30 seconds book of prophetus uh uh was primarily a prime DSA source book at an average 47:39 47 minutes, 39 seconds yield of about 13%. Uh so while we don't want to get into that segment uh but it's a product and there's a lot of 47:47 47 minutes, 47 seconds insights uh as an institution. So what we are doing is we are expanding that products uh in our top 50 emerging 47:56 47 minutes, 56 seconds market locations. So we will start doing schools but of a smaller size at a relatively higher interest rates. So 48:04 48 minutes, 4 seconds we'll continue this product uh uh program but with a little different uh perspective and policy. So the target 48:13 48 minutes, 13 seconds schools would be uh from size perspective smaller and uh in tier 2, tier three and tier four towns uh with an average yields of about 16 17%. 48:24 48 minutes, 24 seconds On top of that what Anu said I just want to make sure that listeners of this call and otherwise uh you know so we have a 48:32 48 minutes, 32 seconds big network now 318 location spread across 13 odd cities serving a set of self-employed small business customer. 48:40 48 minutes, 40 seconds The potential of the network is immense. 48:42 48 minutes, 42 seconds Uh and you know in order to improve the productivity we have to funnel more lending product to this network. But what we want to ensure first is to get 48:51 48 minutes, 51 seconds to a minimum level of productivity and maturity for our core product which is loan against property and then gradually 48:58 48 minutes, 58 seconds see what are the adjacency opportunities and we'll talk about that once you know uh in few quarters. But obviously there 49:06 49 minutes, 6 seconds is an underlying strategy thought and execution rigor of adding more things in this network once the network for its core product matures. 49:17 49 minutes, 17 seconds Understood. Thanks. Um and also regarding the recent um uh series and uh that we have done I saw that most of the 49:25 49 minutes, 25 seconds rates were around 300 basis points more than the so far which is roughly around 7%. like uh I think we recently did a 20 49:32 49 minutes, 32 seconds million um uh dollars um what's stopping us or is there a RBI mandate on how much we can borrow in this because the I mean 49:40 49 minutes, 40 seconds the amount is definitely much cheaper than what our cost of borrowing is. 49:45 49 minutes, 45 seconds So there is no uh there is no stopping from regulation on the amount that can be borrowed per se but of course it's 49:52 49 minutes, 52 seconds also availability which matters. Uh so you will see that in the coming quarters the company will be looking for more 50:00 50 minutes such GCBs uh for two reasons. One is to reduce the cost as well as to better our ALM profiling u given the lower profile 50:09 50 minutes, 9 seconds these loans comes with uh and uh just to make it amply clear all the ECBs that we 50:16 50 minutes, 16 seconds take are completely hedged uh for currency and interest rates. So the uh the rate that falls to us is completely landed in INR. 50:26 50 minutes, 26 seconds So what he's seeing and what landed cost would be different right that would be different. So you are seeing a USD pricing that is so far plus 50:32 50 minutes, 32 seconds a spread uh that lands to us uh you know in in in an approximation of about 9.5 to 10%. 50:41 50 minutes, 41 seconds And currently the hedge cost has Yeah. And currently the hedge cost has gone up. So that's why we are holding on to more ECB. Generally on ECBS I think 50:51 50 minutes, 51 seconds so there are two types of market for general understanding. One is commercial ECB lenders which are big banks you know trading hedge funds you know uh global 51:00 51 minutes uh trading books. They are normally lenders for AAA and double A wherein they can just you know do ECBs then hold 51:07 51 minutes, 7 seconds it on balance sheet and then distribute and mature it. Most of the ECB lenders to us are DFI lenders who are lending to 51:15 51 minutes, 15 seconds us because of the impact which we create on the market through MSME financing and others and there is there is not too 51:22 51 minutes, 22 seconds much of the landed cost difference between our domestic term borrowing and ECB other than that we get the tenor advantage most of our DFI ECBs are for 51:31 51 minutes, 31 seconds much longer teners that's why we also prefer that as our ratings will improve we will also start attracting commercial 51:38 51 minutes, 38 seconds enders in ECB as Yeah, understood. Thank you very much. 51:48 51 minutes, 48 seconds Thank you. The next question is from the line of Daril Severe from Crown Capital. Please go ahead. 51:58 51 minutes, 58 seconds Uh hello. Please go ahead. 52:00 52 minutes Good uh good evening team. Thank you so much for taking my question. Firstly, congratulations on a great set of results. Uh so just wanted to ask if I 52:08 52 minutes, 8 seconds understand it correctly. So our primary business that we were having the prime intermediary we are going to run it 52:15 52 minutes, 15 seconds down. So that but currently it going is the more significant portion of the AUM and our emerging market and embedded 52:23 52 minutes, 23 seconds finance which are the lower portion are going to increase right now. So for FI27 52:30 52 minutes, 30 seconds will we have the similar profitability because how would that work? I'm assuming it would be a higher profitability than what we had in FI26. 52:39 52 minutes, 39 seconds So I just wanted to understand uh what would you uh uh how would we quantify like the for in the current year will we 52:47 52 minutes, 47 seconds have like similar AUM but much higher profitability? How would we what would be a ROA target for you know uh FI27 sir? 52:56 52 minutes, 56 seconds Yeah. So there are two things one FI27 is a transition year. In the year of transition there are three things which 53:04 53 minutes, 4 seconds we are endeavoring to do. Uh first obviously you know make making sure that our emerging market network and uh our 53:12 53 minutes, 12 seconds merchant lending network especially the emerging market lab network start maturing to you know uh good productivity which is what we are 53:20 53 minutes, 20 seconds targeting uh from current base to roughly around 60 70 lakh rupees per branch basically. That's point one. 53:26 53 minutes, 26 seconds Second, we are looking to transition and benefit from the cost save and transition our you know co- lending 53:35 53 minutes, 35 seconds income which is currently 25% of our total income to gradually bring it down and you know bring most of our ROS as 53:42 53 minutes, 42 seconds income generated from cash interest income. So our expectation in the combination of the two is that and that's why we have purposefully not 53:51 53 minutes, 51 seconds given any guidance on an ROA for year or year basis and all our guidance is on two-year basis. Uh our still our 53:58 53 minutes, 58 seconds assumption would be that purely the bottom line ROA performance would be marginally better and then it would step up in year 28 29 quite significantly. 54:11 54 minutes, 11 seconds Oh okay fair enough. So basically FI27 will be kind of a transitional year and uh FI28 where the big leap will come in 54:20 54 minutes, 20 seconds because our you know the emerging market will be more settled and we'll be able to you know have a bigger network effect 54:27 54 minutes, 27 seconds right sir so just wanted to know like uh so for us like when you you know uh when 54:34 54 minutes, 34 seconds you will announce result what are the items that you know we should also be keenly looking at because uh as because you're not like in the day-to-day 54:43 54 minutes, 43 seconds business. So what part of it should we you know focus on what are the key performance matrixes that you are also looking at sir 54:51 54 minutes, 51 seconds so in my opening speech itself I said I think there are five things which you know which we track and which you should 54:58 54 minutes, 58 seconds also track. uh first is uh you know uh the portfolio yield shift you know how 55:05 55 minutes, 5 seconds much of so for example our December 2025 the emerging market and merchant lending was 33% of our total portfolio improved to 38%. And by FY 29 it has to be 85%. 55:19 55 minutes, 19 seconds This is the first thing which we track you should also track whether we are in that direction or not I think so the cost realization we have already 55:26 55 minutes, 26 seconds completed. So you you can't track it except that you know people make this mistake wherein they think that you know this 220 cr of cost realization is all 55:35 55 minutes, 35 seconds coming from the penal and should get added. It's not the case. When we say 220 cr of cost realization it is a base cost of what was in profctors and what 55:43 55 minutes, 43 seconds was in lugro. Now on consolvation what was in profctors is not visible to you. 55:48 55 minutes, 48 seconds So the the combined 750 cr of cost is going down to 4 u 490 odd cr. So the tracking number is that that we should 55:58 55 minutes, 58 seconds not breach total cost of around 4 490 or 500 odd cr because we have said very clearly that our opex journey is over. 56:06 56 minutes, 6 seconds So no more incremental opex majority of things are you know this that's why there is an compounding effect. Uh third is rundown of portfolio. So which we 56:14 56 minutes, 14 seconds have said 15 to 20 odd percent. uh whether it is more than that or less than that you know if it is too much more than that which means that amum 56:21 56 minutes, 21 seconds would shrunk very fast and income would drop uh if it is stays it's better uh third is that we have said we don't need 56:30 56 minutes, 30 seconds any equity and then you know that is true and fifth is that you know transition to ROA uh so transition to 56:37 56 minutes, 37 seconds ROA we have said used a term quality of earning so you should see that whether our to out of our total income with 25% 56:46 56 minutes, 46 seconds % is is co-ending NDA. I think so in this year it would remain high but in next year onward it will start tapering 56:52 56 minutes, 52 seconds down. So whether ROAS are increasing and whether the contribution in total income of DA plus CO lending is going down. If 57:00 57 minutes you track these if we track these five things and you know remain near to that then we will achieve our objective and 57:07 57 minutes, 7 seconds you should also track us and question us on that. Uh fair fair enough sir and this last question from four sorry it's 57:15 57 minutes, 15 seconds on slide four of our investor presentation I would definitely recommend that you look through that yeah for sure sir I'll look at it sir and I just wanted to understand because 57:24 57 minutes, 24 seconds like uh the segments that we are you know go are you know trying to go to aggressively are very high yielding so 57:31 57 minutes, 31 seconds is there a possibility that right now maybe we have a somewhat of a first mover advantage or it's our niche but 57:38 57 minutes, 38 seconds seeing this lucrative yield field there will be higher competition and that can you know maybe lower the yields that we 57:46 57 minutes, 46 seconds are assuming. I understand that we have already assumed lower yield in our FY 29 portfolio mix but is there a chance that 57:53 57 minutes, 53 seconds it might be you know even more significantly lower because looking at the yields more competition will come and there might be somewhat of a price 58:00 58 minutes war or to get the good customer how would you look at it sir uh uh so yeah you're right this is Anoj 58:09 58 minutes, 9 seconds u in any case in any business uh especially in lending uh this kind of assumption would be broadly Right. As uh 58:17 58 minutes, 17 seconds things progress uh the cost as the uh the overall yields will face a downward pressure more so in in in prime uh 58:27 58 minutes, 27 seconds intermediated segment where not only the customer but the intermediary was also playing a part. Uh in uh our chosen 58:35 58 minutes, 35 seconds emerging market segment uh while this is also true the market is very very well 58:42 58 minutes, 42 seconds spread out and very large. And second uh the core differentiation in emerging 58:49 58 minutes, 49 seconds market today uh is the branch distribution network. So if you see and if you compare us uh with uh other 58:58 58 minutes, 58 seconds larger players we would be in the top cile as far as number of branches are concerned. That is the reason why we 59:06 59 minutes, 6 seconds invested uh in opening 200 new branches in last two years and have now reached uh a tipping point of about 318 59:13 59 minutes, 13 seconds branches. So uh it is possible uh slowly and surely the there rates should come 59:22 59 minutes, 22 seconds down as market eases up. Uh but that I think has been adequately factored by uh in our uh three-year plan. 59:34 59 minutes, 34 seconds Uh okay, fair fair enough. Yeah, that's it from my side. Thank you so much. 59:39 59 minutes, 39 seconds Thank you. Next question is from the line of Sorup Kumar, an individual investor. Please go ahead. 59:49 59 minutes, 49 seconds Hello. Am I out of you are? 59:53 59 minutes, 53 seconds Yeah. So actually currently what I'm seeing since last few quarters that uh we like either AM is not growing or 1:00:02 1 hour, 2 seconds degrowing. So when can we expect like uh some growth like at least 10 because earlier uh 2 years back or 3 years back 1:00:11 1 hour, 11 seconds it was told that okay we will be going continuously for five years uh 30 plus and then like and then now it is like 1:00:20 1 hour, 20 seconds growing. So when can we we can expect like uh the curve to come back to the growth page? 1:00:29 1 hour, 29 seconds Yes, you're absolutely right. I think so that uh our aspiration has always been to build 1:00:37 1 hour, 37 seconds an business of size and scale because obviously we were motivated by the size of the opportunity in front of us. We 1:00:44 1 hour, 44 seconds were motivated by the core capability of the management and the kind of deployment of data analytics and technology we did. Uh and we were very 1:00:53 1 hour, 53 seconds confident that we or we were you know motivated by the fact that we can build a very large franchise. Having said that 1:01:01 1 hour, 1 minute, 1 second over a period of last two three years as I said you know in answer to few other people what we realized that between 1:01:08 1 hour, 1 minute, 8 seconds choice of a scale versus the bottom line this scale was not delivering the resultant bottom line to us because these were verticals were low yielding. 1:01:18 1 hour, 1 minute, 18 seconds uh these verticals were you know highly controlled by intermediaries and the portfolio was getting churned and uh 1:01:27 1 hour, 1 minute, 27 seconds structurally these verticals require a very superior cost of borrowing which was not coming to us uh because that you 1:01:34 1 hour, 1 minute, 34 seconds know liability sides have gravitated to certain set of NBFCs uh and that's why deliberately we built an infrastructure 1:01:42 1 hour, 1 minute, 42 seconds in last two and a half years took all of the opexics early uh and now transitioning the portfolio so That's our next three years of journey. While 1:01:50 1 hour, 1 minute, 50 seconds the growth why why all of you all all of us like growth because growth means improvement in bottom line 1:01:57 1 hour, 1 minute, 57 seconds profitability. As a existing or a potential shareholder your value creation is directly linked to the bottom line and you know sustainability 1:02:06 1 hour, 2 minutes, 6 seconds of that but in our case growth was not delivering incremental bottom line. So now we would deliver first incremental 1:02:13 1 hour, 2 minutes, 13 seconds bottom line make it healthier would not dilute shareholders and by that time you know the infrastructure would be ready and then it will get to a normal growth 1:02:21 1 hour, 2 minutes, 21 seconds rate cycle again. So what you are see so I think what you should track is the growth rate of our core uh portfolio 1:02:30 1 hour, 2 minutes, 30 seconds which will will grow. So what you should track is growth rate in our emerging market lab business and embedded merchant lending business because both 1:02:38 1 hour, 2 minutes, 38 seconds of them would grow in the range of 25 odd percent. And that's not a you know lower growth that's a very high growth 1:02:45 1 hour, 2 minutes, 45 seconds rate. Why the aggregate growth is looking flattish is because a lower yielding less value acritic portfolio is 1:02:52 1 hour, 2 minutes, 52 seconds being is automatically running down. I hope I have answered you know in some way. 1:02:57 1 hour, 2 minutes, 57 seconds Yeah. Uh yeah thank you. Thank you for the answer. I have one additional question. Uh so now uh like we already 1:03:03 1 hour, 3 minutes, 3 seconds have 300 watt plus uh branches. So uh will the OPEX come down significantly 1:03:12 1 hour, 3 minutes, 12 seconds in the coming quarters? So so uh we are not doing any new investment. So OPEX as a percentage of AUM as the AUM keeps 1:03:22 1 hour, 3 minutes, 22 seconds going up will keep coming down. Uh so yes uh opex uh next year as a percentage of AUM uh uh would come down. 1:03:33 1 hour, 3 minutes, 33 seconds Okay. And what uh so we have acquired uh prospectus. So how many uh branches of 1:03:39 1 hour, 3 minutes, 39 seconds prospectus we are we going to keep keep running or and how many are we running down? 1:03:49 1 hour, 3 minutes, 49 seconds So uh profectus was present in about 28 locations uh and we yugo branches were also present in in those 28 locations. 1:03:59 1 hour, 3 minutes, 59 seconds So in all those locations we are continuing with only one branch. Uh uh some of them are the original prophectus branch where we have vacated our punyis 1:04:08 1 hour, 4 minutes, 8 seconds with the profectus ones which were which were very good and in some we have vacated profectus branches where the 1:04:14 1 hour, 4 minutes, 14 seconds ugro branches were better. So normally for these uh obviously this is also part of uh like running the business right? 1:04:25 1 hour, 4 minutes, 25 seconds That's right. 1:04:25 1 hour, 4 minutes, 25 seconds So yeah so uh so if so just just for the assumption there is must be some notice period and other things. So let's assume 1:04:34 1 hour, 4 minutes, 34 seconds 3 months of notice period or 6 months of notice period. So we can expect uh like these 28 branch means 10% of the uh 10% 1:04:43 1 hour, 4 minutes, 43 seconds of the opex or or the running the business should come down by after two quarters. 1:04:51 1 hour, 4 minutes, 51 seconds Uh so some of that has already got actioned uh uh and some of them is will get actioned in yes so you're right the impact will start coming in. 1:05:04 1 hour, 5 minutes, 4 seconds So I think so go back to go back go I think so we would request you to look at slide number 13 of our presentation we 1:05:11 1 hour, 5 minutes, 11 seconds have taken a one time hit of 25.4 crores so all of the future exit cost has been taken up front in this quarter. 1:05:20 1 hour, 5 minutes, 20 seconds Yeah. So the notice notice that so this this is the part of the we have to pay if we are giving somebody notice period obviously we have to pay right it's like 1:05:28 1 hour, 5 minutes, 28 seconds upfront cost but but we have provision in this quarter itself yeah yeah so I'm talking about savings 1:05:36 1 hour, 5 minutes, 36 seconds so there there should be some savings as well right from this yeah yeah of course so so that is why uh 1:05:44 1 hour, 5 minutes, 44 seconds so uh uh uh for other questions we we were answering the total Opex of combined profusence plus UG grow last year was about 750 crores. 1:05:56 1 hour, 5 minutes, 56 seconds Yeah. 1:05:56 1 hour, 5 minutes, 56 seconds Next year the total opex of the combined entity would be in the range of 490 to 500 crores. So there would be a 200 crores save. 1:06:06 1 hour, 6 minutes, 6 seconds Okay. Okay. So we we can expect that in Q2 at least coming like starting uh start showing some some form of or in Q2. Q2 only. 1:06:16 1 hour, 6 minutes, 16 seconds Yes. Yes. 1:06:17 1 hour, 6 minutes, 17 seconds I'm not expecting Q1 because Yeah. There are other challenges but yeah and one more thing. So now the uh like 1:06:24 1 hour, 6 minutes, 24 seconds integration is successfully done. So can we expect any credit update because it was in rating update? 1:06:33 1 hour, 6 minutes, 33 seconds Yeah. 1:06:34 1 hour, 6 minutes, 34 seconds Uh so uh so we uh we actually last year uh got uh our outlook uh updated recently about two quarters back. So we 1:06:43 1 hour, 6 minutes, 43 seconds are A+ outlook positive. uh our internal assessment is that if we stick to our plan for this year uh there is a very 1:06:52 1 hour, 6 minutes, 52 seconds high chance of a credit rating upgrade next year on the lighter note I would say it's like you know rating agencies also act like uh investors right so you 1:07:01 1 hour, 7 minutes, 1 second do all the hard work but investors say okay we'll see the result and then we will action similarly also if the rating agency you do all the hard work they 1:07:10 1 hour, 7 minutes, 10 seconds continue to come back and say let us see wait for the final result to come in few quarters and then we'll do it. So when you will act, they will act actually while you know they are all interlin. 1:07:20 1 hour, 7 minutes, 20 seconds Yeah, sure. Yeah. Thank Thank you. And yeah like so the results are good and congratulation for that and thank you. 1:07:29 1 hour, 7 minutes, 29 seconds Thank you. 1:07:31 1 hour, 7 minutes, 31 seconds Thank you. The next question is from the line of Mayul Panjuna from 40 Cent. Please go ahead. 1:07:39 1 hour, 7 minutes, 39 seconds Hello sir. Thank you so much for the opportunity sir. currently what is what percentage of our book is uh lab versus non-lap and how do the G&PA uh yields 1:07:48 1 hour, 7 minutes, 48 seconds and the credit cost compare across both these segments. 1:07:54 1 hour, 7 minutes, 54 seconds So our uh total secured portfolio uh which uh which I I am including 1:08:01 1 hour, 8 minutes, 1 second machinery loans also because they behave similarly uh is about 67% of the total portfolio. Uh and uh the GMPPS there are in the range of about 1 and a half%. 1:08:15 1 hour, 8 minutes, 15 seconds uh our uh emerging uh our embedded finance portfolio uh is about uh uh 20 1:08:23 1 hour, 8 minutes, 23 seconds uh 228 yeah about 2280 crores which is about 15 1:08:30 1 hour, 8 minutes, 30 seconds odd% of the total portfolio here the GMPS are about 1.7%. 1:08:35 1 hour, 8 minutes, 35 seconds And uh there are certain products which we had discontinued last year. Uh which included supply chain finance. Uh uh we 1:08:44 1 hour, 8 minutes, 44 seconds used to do uh a relatively liberal uh collateral product within lap which we used to call sati uh and some uh 1:08:53 1 hour, 8 minutes, 53 seconds unsecured loans that all put together uh is about 3.2% G&PA. If you refer to our 1:09:01 1 hour, 9 minutes, 1 second slide 16 in the investor deck, uh we have actually se segregated our emerging market life, emirate finance and other products uh with GMPS. 1:09:12 1 hour, 9 minutes, 12 seconds And sir, what is the credit cost for these two segments? 1:09:16 1 hour, 9 minutes, 16 seconds Uh the credit cost uh in embedded uh finance is almost very similar to the 1:09:23 1 hour, 9 minutes, 23 seconds GNPA. Uh so about 70 80% of GN about 1.5.6% 6% currently. Uh as the vintage 1:09:32 1 hour, 9 minutes, 32 seconds improve uh goes up, it will go go slightly up and then stabilize. On secured loans, actually the credit costs 1:09:40 1 hour, 9 minutes, 40 seconds are uh a percentage of GMPA. So about 30% of uh GNPA 1:09:47 1 hour, 9 minutes, 47 seconds roughly would gets translated into credit cost. 1:09:52 1 hour, 9 minutes, 52 seconds Okay. And sir, how do you see this uh mix in the percentage of uh secured versus embedded finance evolving over the next two to three years? 1:10:02 1 hour, 10 minutes, 2 seconds So we will continue. I mean overall our broad philosophy is uh that that unsecured loans whether they are 1:10:09 1 hour, 10 minutes, 9 seconds unsecured business loans or embedded finance should not go beyond 30 35% of the total 1:10:17 1 hour, 10 minutes, 17 seconds portfolio. So we'll continue to maintain the same mix and sir what was the mix before we changed the strategy you mentioned that 1:10:25 1 hour, 10 minutes, 25 seconds you know because we were not getting good results on the bottom line we have changed the strategy so what was the mix before that between secured and secured 1:10:33 1 hour, 10 minutes, 33 seconds the secured and secured mix was very very similar within secured there was a very large chunk of intermediated prime 1:10:42 1 hour, 10 minutes, 42 seconds lap which was at 13 13 12%. So that only that portion we are reducing and we are 1:10:49 1 hour, 10 minutes, 49 seconds compensating that with emerging market lap. So the product category remains same only the yield profile goes up. 1:10:58 1 hour, 10 minutes, 58 seconds Okay. Sir can you please elaborate a bit on uh because you know I'm new to the company and uh these are all little bit 1:11:05 1 hour, 11 minutes, 5 seconds uh quite techy thing for me. What is the difference between intermediate and emerging? 1:11:12 1 hour, 11 minutes, 12 seconds So intermediated business is uh the DSA business which we 1:11:19 1 hour, 11 minutes, 19 seconds used to do in the top 25 metro towns in the country. So here the sourcing happens via DSAs. Okay. And the target 1:11:29 1 hour, 11 minutes, 29 seconds segment was a customer with turnover between 3 crores to 15 crores. So relatively larger customers uh at a 1:11:37 1 hour, 11 minutes, 37 seconds relatively lower yields. In emerging market we have set up 318 branches in tier 2, tier three, tier four towns in 1:11:46 1 hour, 11 minutes, 46 seconds the country. Uh uh each branch consists of five to six direct sales team. Uh one 1:11:53 1 hour, 11 minutes, 53 seconds credit person, one branch head, one operations head, one collection head and they go and source uh uh this uh uh 1:12:02 1 hour, 12 minutes, 2 seconds microme customer directly. So this is the difference. Sir, so can we expect a huge jump in our uh cost because you 1:12:11 1 hour, 12 minutes, 11 seconds know we have expanded to these many branches plus we have hired people for these branches. 1:12:17 1 hour, 12 minutes, 17 seconds Uh so uh no you don't you shouldn't because we have already incurred that cost in last two years. So all the cost 1:12:25 1 hour, 12 minutes, 25 seconds investment in expanding these branches and hiring people is already over. So no new incremental opics 1:12:35 1 hour, 12 minutes, 35 seconds right but but still there'll be a uh continuous cost for sal for the salaried employees right that's right so that 1:12:43 1 hour, 12 minutes, 43 seconds that cost will continue but that that cost is already part of uh the opex which has been taken and as the aum 1:12:51 1 hour, 12 minutes, 51 seconds built through these branches goes up opex to will keep coming down right so sir when we uh when we have so 1:12:59 1 hour, 12 minutes, 59 seconds if you Sorry, last question. So when we when we had uh you know let's uh go back two 1:13:07 1 hour, 13 minutes, 7 seconds years back did we anticipate that we will move into this kind of branchled strategy? 1:13:13 1 hour, 13 minutes, 13 seconds Yes. And that's why we opened all these branches sir. So we have been building a building a 318 branch network. Most of 1:13:21 1 hour, 13 minutes, 21 seconds our PS have taken roughly around 8 to 10 years to get there. We have got there in period of 3 and 3 years. uh and that 1:13:29 1 hour, 13 minutes, 29 seconds accelerated strategy was because we wanted to make this change at an appropriate time. Uh we were hoping that our cost of borrowing you know 1:13:37 1 hour, 13 minutes, 37 seconds trajectory would go down. If that would have happened then we would have continued all of the verticals but since that was not happening in order to you 1:13:44 1 hour, 13 minutes, 44 seconds know improve the bottom line performance we first we built the opex and infrastructure and then we taken out the cost purely on the opex sense. So if you 1:13:53 1 hour, 13 minutes, 53 seconds look at our slide 13 if you look at our FY26 cost employee cost and other other 1:14:00 1 hour, 14 minutes cost is roughly around 300 plus 285 585 odd cr right and this does not include 1:14:08 1 hour, 14 minutes, 8 seconds the pre-conolidation cost of profctors because consolidation happened only on 8th of December if you take that cost 1:14:15 1 hour, 14 minutes, 15 seconds base also this was 700 K and this we are just guided that would be around 490 odd crores so That is what the you know so 1:14:24 1 hour, 14 minutes, 24 seconds the the business would operate uh the portfolio of emerging market and emerged finance would continue to grow while the opex would remain flattish. So three 1:14:33 1 hour, 14 minutes, 33 seconds core things AUM on the on the front end would look like flattish but underpinning portfolio would shift lower 1:14:40 1 hour, 14 minutes, 40 seconds yielding portfolio would run down higher yielding portfolio would go up and that increase of higher yielding portfolio which is increased in the uh you know 1:14:49 1 hour, 14 minutes, 49 seconds portfolio is not resulting out of incremental opex and that's why there is an operating leverage opportunity. Right 1:14:56 1 hour, 14 minutes, 56 seconds sir, since you spelled out the fire trackers, you know, opening remarks, uh how many quarters do we expect to see a 1:15:03 1 hour, 15 minutes, 3 seconds significant jump in the uh you know, bottom line? 1:15:08 1 hour, 15 minutes, 8 seconds So I think we said that the year of transition is FY27. Uh on FY till FY27, 1:15:15 1 hour, 15 minutes, 15 seconds you should track us on these pillars and whether we are making incremental improvement or not. Uh the real bottom 1:15:23 1 hour, 15 minutes, 23 seconds line, you know, jump. So we have given a guidance of two to three three and a half%. I think so in the transition year we'll be in the range but we'll try to 1:15:31 1 hour, 15 minutes, 31 seconds achieve what you know incremental improvement over FYI 26 uh 27 28 would 1:15:38 1 hour, 15 minutes, 38 seconds be a you know first jump and 28 29 we think the business would fully mature at 3 and a half% which is the top tier ro 1:15:46 1 hour, 15 minutes, 46 seconds performance for most of the lending institution in India. 1:15:49 1 hour, 15 minutes, 49 seconds Right sir I appreciate a lot your elaborate answers and all the best sir. Thank you. 1:15:57 1 hour, 15 minutes, 57 seconds Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to management for closing comments. 1:16:06 1 hour, 16 minutes, 6 seconds Thank you. I want to close with a context on macro factors affecting global economy and its impact on you grow. We get lot of question on that as 1:16:15 1 hour, 16 minutes, 15 seconds well. The global environment is genuinely uncertain. Geopolitical tension, trade policy shift, risk appetite cal reccalibrating. India is 1:16:24 1 hour, 16 minutes, 24 seconds not fully insulated and yet I'm more confident in new growth trajectory today than at any point in our history. The 1:16:32 1 hour, 16 minutes, 32 seconds business we have chosen small ticket secured loan against property in tier 2 and beyond regions of Bharat and 1:16:39 1 hour, 16 minutes, 39 seconds merchant financing embedded in payment flows are not driven by the global macro. They are driven by whether a small business owner in Rajasthan or 1:16:48 1 hour, 16 minutes, 48 seconds Telangana can access formal credit. That demand is structural, durable and largely independent of what happens in 1:16:56 1 hour, 16 minutes, 56 seconds Washington or Basil. The credit gap is 30 lakh crores. Our AM is only 15,334 1:17:02 1 hour, 17 minutes, 2 seconds Kores. We do not need new capital. We do not need rates to fall. We need branches to mature and they will. We need our 1:17:12 1 hour, 17 minutes, 12 seconds merchant portfolio to deepen and it will for the first time since Ugrow's uh start. This company is now generating 1:17:21 1 hour, 17 minutes, 21 seconds capital not consuming it. Every rupee of operating profit accrets to the network and funds the next year of growth 1:17:29 1 hour, 17 minutes, 29 seconds without asking shareholders for a single additional rupee. The management team's focus is singular. 1:17:36 1 hour, 17 minutes, 36 seconds Improve operating metrics every quarter. 1:17:39 1 hour, 17 minutes, 39 seconds reduce cost, increase yield, deliver on the five commitment we have made in February. Two businesses, two large market, one focus institution. 1:17:51 1 hour, 17 minutes, 51 seconds Thank you everyone for attending the call and listening to us patiently and thanks for all the support. If you have any further question, you may get in 1:17:59 1 hour, 17 minutes, 59 seconds touch with Sedhart and Rituk or our IR team at investor relations@youugro.com. 1:18:05 1 hour, 18 minutes, 5 seconds We would be very happy to answer and clarify. Thank you very much. 1:18:10 1 hour, 18 minutes, 10 seconds Thank you ladies and gentlemen on behalf of Aara Securities that concludes this conference. Thank you for joining us and you may now disconnect your lines.