Q1 2027 Aptus Value Housing Finance India Ltd Earnings Call

August 1, 2026

Speaker #1: Good morning, ladies and gentlemen. I'm Danish, the moderator for this conference call. Welcome to the earnings conference call of Aptus Value Housing Finance India Limited.

Moderator: Good morning, ladies and gentlemen. I'm Danish, moderator for this conference call. Welcome to the earnings conference call of Aptus Value Housing Finance India Limited, to discuss its results for the quarter ended 30 June 2026. This conference call may contain forward-looking statements based on the company's beliefs, assumptions, and expectations as of today's date. These statements are subject to risks and uncertainties, and actual results may differ materially. At this moment, all participants are in the listen-only mode, and there will be a question and answer session. At this time, if you have a question, please press star followed by one on your telephone keypad. Please note that this conference is being recorded. We have with us today Mr. M. Anandan, Executive Chairman, Mr. P. Balaji, Managing Director, Mr. C.T. Manoharan, Executive Director and Chief Business Officer, Mr. Sanjay Mittal, Chief Financial Officer.

Operator: Good morning, ladies and gentlemen. I'm Danish, moderator for this conference call. Welcome to the earnings conference call of Aptus Value Housing Finance India Limited, to discuss its results for the quarter ended 30 June 2026. This conference call may contain forward-looking statements based on the company's beliefs, assumptions, and expectations as of today's date. These statements are subject to risks and uncertainties, and actual results may differ materially. At this moment, all participants are in the listen-only mode, and there will be a question and answer session. At this time, if you have a question, please press star followed by one on your telephone keypad. Please note that this conference is being recorded. We have with us today Mr. M. Anandan, Executive Chairman, Mr. P. Balaji, Managing Director, Mr. C.T. Manoharan, Executive Director and Chief Business Officer, Mr. Sanjay Mittal, Chief Financial Officer.

Speaker #1: To discuss its results for the quarter ended June 30, 2026. This conference call may contain forward-looking statements based on the company's beliefs, assumptions, and expectations as of today.

Speaker #1: These statements are subject to risks and uncertainties, and actual results may differ materially. At this moment, all participants are in listen-only mode, and there will be a question and answer session.

Speaker #1: At this time, if you have a question, please press star followed by one on your telephone keypad. Please note that this conference is being recorded.

Speaker #1: We have with us today Mr. M. Anandan, Executive Chairman; Mr. P. Balaji, Managing Director; Mr. C.T. Manoharan, Executive Director and Chief Business Officer; and Mr. Sanjay Mikkal, Chief Financial Officer. I would now like to hand the conference over to Mr. Anandan for his opening remarks.

Moderator: I would now like to hand the conference over to Mr. Anandan for his opening remarks. Thank you, and over to you, sir.

Operator: I would now like to hand the conference over to Mr. Anandan for his opening remarks. Thank you, and over to you, sir.

Speaker #1: Thank you, and over to you, sir.

Speaker #2: Yeah, thank you. Good morning, ladies and gentlemen. I am Anandan, Executive Chairman of the company. I warmly welcome you all to this earnings call.

M. Anandan: Yeah. Thank you. Good morning, ladies and gentlemen. I'm Anandan, Executive Chairman of the company. I warmly welcome you all to this earnings call. As you know, the Indian economy continues to exhibit strong underlying momentum and created a supportive environment for credit growth, including for affordable housing finance. Aptus delivered a good start to the year with assets under management growing by 21% YoY. Disbursement reached a good level during the quarter and the growth was broad-based across geographies and distribution channels, with continued demand from our targeted customer segment. Profitability remained healthy during the quarter. Net total income increased, supported by business growth, improving operating leverage. Return on assets remained healthy, while return on equity slid a little over 20% ROE. Spreads remained largely stable.

Munuswamy Anandan: Yeah. Thank you. Good morning, ladies and gentlemen. I'm Anandan, Executive Chairman of the company. I warmly welcome you all to this earnings call. As you know, the Indian economy continues to exhibit strong underlying momentum and created a supportive environment for credit growth, including for affordable housing finance. Aptus delivered a good start to the year with assets under management growing by 21% YoY. Disbursement reached a good level during the quarter and the growth was broad-based across geographies and distribution channels, with continued demand from our targeted customer segment. Profitability remained healthy during the quarter. Net total income increased, supported by business growth, improving operating leverage. Return on assets remained healthy, while return on equity slid a little over 20% ROE. Spreads remained largely stable.

Speaker #2: As you know, the Indian economy continues to exhibit strong underlying momentum and has created a supportive environment for current growth, including for affordable housing finance.

Speaker #2: Aptus delivered a good start to the year, with assets under management growing by 21%, while disbursements reached a good level during the quarter. The growth was broad-based across geographies and distribution channels, with continued demand from our targeted customer segment.

Speaker #2: Profitability remained healthy during the quarter. Net total income increased, supported by business growth and improving operating leverage. Return on assets remained healthy, while return on equity was flat, with a lower 20% ROE.

Speaker #2: Spreads remained largely stable. Our margins remained resilient during the quarter, despite rationalization of pricing in certain lending segments and prudent liability management, including a reduction in cost of funds.

M. Anandan: Our margins remained resilient during the quarter, despite a relatively sharp pricing of certain lending segments and prudent liability management, including reduction in cost of funds. Asset quality remained broadly in line despite continued business growth. Credit costs broadly contained at 60 basis points during the quarter, reflecting resilience of our underwriting framework and disciplined portfolio monitoring. Looking ahead, we remain optimistic about the opportunities in the affordable housing finance sector. We are seeing good business momentum across our markets and are confident of delivering 22% to 24% AUM growth as guided, while maintaining our focus on operating efficiency. With that, I would now like to hand over the call to Mr. P. Balaji, our Managing Director, to take you through the business focus and key operating and financial parameters. Thank you.

Munuswamy Anandan: Our margins remained resilient during the quarter, despite a relatively sharp pricing of certain lending segments and prudent liability management, including reduction in cost of funds. Asset quality remained broadly in line despite continued business growth. Credit costs broadly contained at 60 basis points during the quarter, reflecting resilience of our underwriting framework and disciplined portfolio monitoring. Looking ahead, we remain optimistic about the opportunities in the affordable housing finance sector. We are seeing good business momentum across our markets and are confident of delivering 22% to 24% AUM growth as guided, while maintaining our focus on operating efficiency. With that, I would now like to hand over the call to Mr. P. Balaji, our Managing Director, to take you through the business focus and key operating and financial parameters. Thank you.

Speaker #2: Asset quality remained broadly in line despite continued business growth, with product costs broadly contained at 60 basis points during the quarter, reflecting the resilience of our underwriting framework and disciplined portfolio monitoring.

Speaker #2: Looking ahead, we remain optimistic about the opportunities in the affordable housing finance sector. We are seeing good business momentum across our markets and are confident of delivering 22 to 24 percent AUM growth as guided, while maintaining our focus on operating efficiency.

Speaker #2: With that, I would now like to hand over the call to Mr. P. Balaji, our Managing Director, to take you through the business focus and key operating and financial parameters.

Speaker #2: Thank you.

Speaker #3: Thank you, sir. Good morning to all. To begin with, I am happy to convey that we have started April 27 on a positive note.

P. Balaji: Thank you, sir. Good morning to all. To begin with, I am happy to convey that we have started FY27 on a positive note. The strategic initiatives that we outlined during our last earnings call are progressing well and have contributed to the continued improvement in our business momentum. We remain focused on balancing growth with profitability while maintaining our credit discipline. Overall, the quarter reinforces our belief that the affordable housing segment we operate in remains structurally robust and continues to offer a significant growth opportunity. As outlined during our last earnings call, we continue to make steady progress on the strategic initiatives aimed at accelerating our growth momentum. First, branch expansion. We continued to expand our distribution network, and during the quarter, we opened 33 branches, taking our total branch network to 322. Next is strengthening customer acquisition.

Balaji Parthasarathy: Thank you, sir. Good morning to all. To begin with, I am happy to convey that we have started FY27 on a positive note. The strategic initiatives that we outlined during our last earnings call are progressing well and have contributed to the continued improvement in our business momentum. We remain focused on balancing growth with profitability while maintaining our credit discipline. Overall, the quarter reinforces our belief that the affordable housing segment we operate in remains structurally robust and continues to offer a significant growth opportunity. As outlined during our last earnings call, we continue to make steady progress on the strategic initiatives aimed at accelerating our growth momentum. First, branch expansion. We continued to expand our distribution network, and during the quarter, we opened 33 branches, taking our total branch network to 322. Next is strengthening customer acquisition.

Speaker #3: The strategic initiatives that we outlined during our last earnings call are progressing well and have contributed to the continued improvement in our business momentum.

Speaker #3: We remain focused on balancing growth with profitability while maintaining our credit discipline. Overall, the quarter reinforces our belief that the affordable housing segment we operate in remains structurally robust and continues to offer a significant growth opportunity.

Speaker #3: As outlined during our last earnings call, we continue to make steady progress on the strategic initiatives aimed at accelerating our growth momentum. First, branch expansion.

Speaker #3: We continue to expand our distribution network, and during the quarter we opened 33 branches, taking our total branch network to 372. Next is strengthening customer acquisition.

Speaker #3: We continue to diversify our sourcing channels through the expansion of our connector network and an increased focus on digital marketing initiatives. The connector channel contributed 8% of our disbursements during the quarter, and we continue to see encouraging traction from this sourcing channel.

P. Balaji: We continued to diversify our sourcing channels through the expansion of our connector network and increased focus on digital marketing initiatives. The connector channel contributed 8% of our disbursements during the quarter, and we continue to see encouraging traction from this sourcing channel. The next one is the increasing average ticket size. Our continued focus on increasing the average ticket size, supported partly by inflation and calibrated customer collection strategies, is helping us onboard higher quality customers while maintaining healthy business momentum. The next one is the customer quality and pricing. A calibrated reduction in the lending rates on select loan ticket sizes, together with our strategy of increasing the average ticket size, continues to support customer acquisition while helping us onboard higher quality customers. Going forward, we remain focused on the disciplined execution of these initiatives. During the quarter, the last year's quarter was guided has been achieved.

Balaji Parthasarathy: We continued to diversify our sourcing channels through the expansion of our connector network and increased focus on digital marketing initiatives. The connector channel contributed 8% of our disbursements during the quarter, and we continue to see encouraging traction from this sourcing channel. The next one is the increasing average ticket size. Our continued focus on increasing the average ticket size, supported partly by inflation and calibrated customer collection strategies, is helping us onboard higher quality customers while maintaining healthy business momentum. The next one is the customer quality and pricing. A calibrated reduction in the lending rates on select loan ticket sizes, together with our strategy of increasing the average ticket size, continues to support customer acquisition while helping us onboard higher quality customers. Going forward, we remain focused on the disciplined execution of these initiatives. During the quarter, the last year's quarter was guided has been achieved.

Speaker #3: Increased, the next one is the increasing average ticket price. Our continued focus on increasing the average ticket price, supported partly by inflation and calibrated customer selection strategies, was helping us onboard higher quality customers while maintaining healthy business momentum.

Speaker #3: The next one is the customer quality and pricing. Our calibrated reduction in lending rates on select loan ticket prices, together with our strategy of increasing the average ticket price, continues to support customer acquisition while helping us onboard higher quality customers.

Speaker #3: Going forward, we remain focused on the disciplined execution of these initiatives. During the quarter, the last year's quarter guidance has been achieved. In terms of growth, Q1 disbursements grew 36% year on year, providing confidence in achieving the April 27 ADM growth guidance of 22% to 24%.

P. Balaji: In terms of growth, Q1 disbursements grew 36% year on year, providing confidence in achieving the FY27 AUM growth guidance of 22% to 24%. July 2026 disbursement also was good, and that increased by 25% as compared to July 2025 disbursements. Branch expansion, we have added 33 branches during the quarter against a full year target of 60 to 70 branches. Spreads, yield modulation remained in line with expectations and was fully offset by a lower cost of borrowing, resulting in stable spreads. Operating expenses to AUM remained at 2.7%, within the guided range of 2.6% to 2.8%. Credit cost stood at around 0.6%, in line with the guided range of 0.5% ± 10 basis points for FY27. Profitability, ROE remained above 20%, consistent with our profitability guidance.

Balaji Parthasarathy: In terms of growth, Q1 disbursements grew 36% year on year, providing confidence in achieving the FY27 AUM growth guidance of 22% to 24%. July 2026 disbursement also was good, and that increased by 25% as compared to July 2025 disbursements. Branch expansion, we have added 33 branches during the quarter against a full year target of 60 to 70 branches. Spreads, yield modulation remained in line with expectations and was fully offset by a lower cost of borrowing, resulting in stable spreads. Operating expenses to AUM remained at 2.7%, within the guided range of 2.6% to 2.8%. Credit cost stood at around 0.6%, in line with the guided range of 0.5% ± 10 basis points for FY27. Profitability, ROE remained above 20%, consistent with our profitability guidance.

Speaker #3: This gives us July 26 disbursements, which were also good and improved by 25% compared to July 25 disbursements. Branch expansion: we have added 33 branches during the quarter, against the previous target of 60 to 70 branches.

Speaker #3: Spreads, yield, and modulation remained in line with expectations and were fully offset by a lower cost of borrowing, resulting in stable spreads. Operating expenses to ADM remained at 2.7%, within the guided range of 2.6% to 2.8%.

Speaker #3: Credit cost stood at around 0.6%, in line with the guided range of 0.5% plus or minus 10 basis points for April 27. Profitability, ROE, remained above 20%, consistent with our profitability guidance.

Speaker #3: Based on the progress made during Q1, April 27, we remain confident of delivering our April 27 guidance across growth, spread, operating cost, credit cost, and profitability.

P. Balaji: Based on the progress made during Q1 FY27, we remain confident of delivering our FY27 guidance across growth, spread, operating cost, credit cost, and profitability. Our growth is anchored on the following strategic pillars. One is diversified mix, geographic expansion, productivity, and digital excellence. One more thing which is important is product expansion. We are also evaluating opportunities to broaden our lending portfolio beyond home loans and SME loans through the introduction of a new lending product. Together, these pillars continue to strengthen our franchise and position us well to deliver sustainable growth while maintaining our profitability and asset quality. Now moving on to performance. AUM grew by 21% year on year to INR 13,648 crores. Disbursements grew 36% year on year to INR 1,053 crores. Branch network stood at 322 branches.

Balaji Parthasarathy: Based on the progress made during Q1 FY27, we remain confident of delivering our FY27 guidance across growth, spread, operating cost, credit cost, and profitability. Our growth is anchored on the following strategic pillars. One is diversified mix, geographic expansion, productivity, and digital excellence. One more thing which is important is product expansion. We are also evaluating opportunities to broaden our lending portfolio beyond home loans and SME loans through the introduction of a new lending product. Together, these pillars continue to strengthen our franchise and position us well to deliver sustainable growth while maintaining our profitability and asset quality. Now moving on to performance. AUM grew by 21% year on year to INR 13,648 crores. Disbursements grew 36% year on year to INR 1,053 crores. Branch network stood at 322 branches.

Speaker #3: Our growth is anchored on the following strategic pillars: one is diversified mix, geographic expansion, productivity, and digital excellence. One more thing which is important is product expansion.

Speaker #3: We are also evaluating opportunities to broaden our lending portfolio beyond home loans and SME loans through the introduction of a new lending product. Together, these pillars continue to strengthen our franchise and position us well to deliver sustainable growth while maintaining our profitability and asset quality.

Speaker #3: Now, moving on to performance. AUM grew by 21% year on year to ₹13,648 crore, disbursements grew 36% year on year to ₹1,053 crore, and the branch network stood at 322 branches.

Speaker #3: Now, coming to asset quality, the collection efficiency stood at 98.52%, primarily impacted to an extent by seasonality and some modulation in collections within the NDFC portfolio.

P. Balaji: Now coming to asset quality, the collection efficiency stood at 98.52%, primarily impacted by an extended seasonality and some modulation in collections within the NBFC portfolio. Consequently, our 30-plus DPD stood at 6.87% as against 6.21% in Q4 FY26. Encouragingly, collection performance has improved in July, with the 30-plus DPD declining by nearly 20 basis points. We expect this positive trajectory to continue as our collection initiatives gain further traction. The GNPA stood at 1.7% as against 1.52% in Q4 FY26, while net NPA stood at 1.29% as against 1.15%. The credit cost for the quarter remains within our guided range of around 0.6%. The credit cost for housing finance company came in at 0.2%, while the NBFC reported around 1.4%. Aptus is one company with two businesses and two benchmarks.

Balaji Parthasarathy: Now coming to asset quality, the collection efficiency stood at 98.52%, primarily impacted by an extended seasonality and some modulation in collections within the NBFC portfolio. Consequently, our 30-plus DPD stood at 6.87% as against 6.21% in Q4 FY26. Encouragingly, collection performance has improved in July, with the 30-plus DPD declining by nearly 20 basis points. We expect this positive trajectory to continue as our collection initiatives gain further traction. The GNPA stood at 1.7% as against 1.52% in Q4 FY26, while net NPA stood at 1.29% as against 1.15%. The credit cost for the quarter remains within our guided range of around 0.6%. The credit cost for housing finance company came in at 0.2%, while the NBFC reported around 1.4%. Aptus is one company with two businesses and two benchmarks.

Speaker #3: Consequently, our 30-plus DPDs stood at 6.87%, as against 6.21% in Q4, April '26. Encouragingly, collection performance has increased in July, with the 30-plus DPDs declining by nearly 20 basis points.

Speaker #3: We expect this positive trajectory to continue as our collection initiatives gain further traction. The GMTs stood at 1.7%, as against 1.52% in Q4 April '26, while net NPS stood at 1.29%, as against 1.15%.

Speaker #3: The credit cost for the quarter remained within our guided range of around 0.6%. The credit cost for the housing finance company came in at 0.2%, while the NBFC reported around 1.4%.

Speaker #3: Aptus is one company with two businesses and two benchmarks. Our housing finance business should be compared with HFC peers, and our NBFC business should be compared with the NBFC peers.

P. Balaji: Our housing finance business should be compared with HFC peers. Our NBFC business should be compared with the HFC peers. Each has a different operating model and risk profile. Therefore, consolidated asset quality should always be assessed in the context of the portfolio mix. Now, coming to the profitability. During the quarter, net income margin grew by 19% year on year to INR 441 crore. We maintained ROA sustainably to 9%, driven by declining cost of funds to 8%. Our OPEX as a percentage of AUM remained at 2.7%. Profit grew 19% year on year to INR 261 crore, translating to an ROA of 7.8% and ROE of 20.4%, which is amongst the highest in the industry. Coming to the funding. During Q1, we raised approximately INR 870 crore on a consolidated basis, primarily through a mix of term loans, securitization, and direct assignments.

Balaji Parthasarathy: Our housing finance business should be compared with HFC peers. Our NBFC business should be compared with the HFC peers. Each has a different operating model and risk profile. Therefore, consolidated asset quality should always be assessed in the context of the portfolio mix. Now, coming to the profitability. During the quarter, net income margin grew by 19% year on year to INR 441 crore. We maintained ROA sustainably to 9%, driven by declining cost of funds to 8%. Our OPEX as a percentage of AUM remained at 2.7%. Profit grew 19% year on year to INR 261 crore, translating to an ROA of 7.8% and ROE of 20.4%, which is amongst the highest in the industry. Coming to the funding. During Q1, we raised approximately INR 870 crore on a consolidated basis, primarily through a mix of term loans, securitization, and direct assignments.

Speaker #3: Each has a distinct operating model and risk profile. Therefore, consolidated asset quality should always be assessed in the context of the portfolio mix. Now, coming to the profitability, during the quarter, net income margin grew by 19% year-on-year to ₹441 crore.

Speaker #3: We maintained our spread sequentially at 9%, driven by a declining cost of funds to 8%. Our off-book assets as a percentage of AUM remained at 2.7%.

Speaker #3: Profit grew 19% year on year to ₹261 crore, translating to an ROA of 7.8% and an ROE of 20.4%, which is among the highest in the industry.

Speaker #3: Coming to the funding, during Q1 we raised approximately ₹872 crore on a consolidated basis, primarily through a mix of term loans, securitization, and direct refinance.

Speaker #3: Our liability profile continues to remain very diversified, with 60% from banks, entities at 14%, securitization at 18%, and the balance through energy funding. We continue to maintain a strong equity position, with total liquidity of ₹1,973 crore as of June 26, including ₹1,251 crore of unavailed bank transfers, providing us ample headroom to support growth.

P. Balaji: Our liability profile continues to remain well-diversified with 60% from banks, NBFCs at 14%, securitization at 18%, and the balance through NCD funding. We continue to maintain a strong liquidity position with total liquidity of INR 1,973 crore as of June 26, including INR 1,251 crore of undrawn bank sanction, providing us ample headroom to support growth. Now, with these remarks, I open the floor for the question and answer session.

Balaji Parthasarathy: Our liability profile continues to remain well-diversified with 60% from banks, NBFCs at 14%, securitization at 18%, and the balance through NCD funding. We continue to maintain a strong liquidity position with total liquidity of INR 1,973 crore as of June 26, including INR 1,251 crore of undrawn bank sanction, providing us ample headroom to support growth. Now, with these remarks, I open the floor for the question and answer session.

Speaker #3: Now, with these remarks, I open the floor for the question and answer session.

Speaker #1: Thank you so much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your telephone keypad.

Moderator: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on your telephone keypad and wait for your turn to ask a question. If you would like to withdraw your request, you may press star and one again. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Nischint Chawathe from Kotak Securities. Please go ahead.

Operator: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on your telephone keypad and wait for your turn to ask a question. If you would like to withdraw your request, you may press star and one again. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Nischint Chawathe from Kotak Securities. Please go ahead.

Speaker #1: And wait for your turn to ask a question. If you would like to withdraw your request, you may press star one again. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Speaker #1: Our first question comes from the line of Nishant Chavate from Kotak Bank. Please go ahead.

Speaker #2: Hi. Hi. Thanks for taking my question. I just wanted a little bit of guidance on how this year is playing out. One thing is that the disbursement growth is pretty impressive at around 36%.

Nischint Chawathe: Hi. Thanks for taking my question. Just a little bit of a guidance on the way this year is playing out. One is that the disbursement growth is pretty good, around 36%. There have been challenges throughout the last four to five quarters. One is, A, what are the drivers and what is the thought process come forth in terms of how this plays out over maybe the next two, three quarters, if you have some color on July, et cetera. I think even on the asset quality front, if you could give some color. I know you mentioned that DPD was down around 20 basis points, but, A, what exactly are the drivers and how do we expect the year to really end? I think those are my two questions. Thank you.

Speaker #2: You know, there was there have been challenges throughout the last four, five quarters. So one is, A, what are the drivers? And, you know, what is the what is the thought process comfort in terms of, you know, how this plays out over maybe the next two, three quarters, if you have some color on July, et cetera.

Speaker #2: And I think, even on the asset quality front, if you could give some color. I know you mentioned that 30 DPD was down around 20 basis points, but what exactly are the drivers?

Speaker #2: And, you know, how do we expect the year to really end? I think those are my two questions. Thank you.

Speaker #3: First is on the growth. Like we have explained earlier, the growth will come from expansion of new branches in new states and expansion of new branches in the existing states.

P. Balaji: First is on the growth, like what we have explained earlier. First, the growth will come from expansion of new branches in new states and expansion of new branches in the existing states. Plus, the increase in average ticket size by at least INR 1 lakh as compared to the last year. That will also provide momentum for the growth. Next thing is the connector channel which we have developed. That has actually gained traction. As I told you, during the Q1, 8% of the disbursements was through connector channel, and this will be augmented in the Q2, Q3, and Q4 as well. The other one is we have also optimized the lending rates on certain housing loan ticket sizes. That is also likely to provide momentum for the growth.

Balaji Parthasarathy: First is on the growth, like what we have explained earlier. First, the growth will come from expansion of new branches in new states and expansion of new branches in the existing states. Plus, the increase in average ticket size by at least INR 1 lakh as compared to the last year. That will also provide momentum for the growth. Next thing is the connector channel which we have developed. That has actually gained traction. As I told you, during the Q1, 8% of the disbursements was through connector channel, and this will be augmented in the Q2, Q3, and Q4 as well. The other one is we have also optimized the lending rates on certain housing loan ticket sizes. That is also likely to provide momentum for the growth.

Speaker #3: Plus, the increase in average ticket price by at least one lakh as compared to last year—that will also provide momentum for growth.

Speaker #3: Next thing is the connected channel, which we have developed. That has actually gained traction. But as I told you, during the first quarter, 8% of the disbursements was through the connected channel, and this will be augmented in the second, third, and fourth quarters as well.

Speaker #3: And the other one is the we are also we have also calibrated we have also optimized the lending rates on certain housing loan ticket prices.

Speaker #3: That is also likely to provide momentum for the growth. And that's what has actually happened in the sense if you look at our July '25 disbursements, it is July '26 disbursements.

P. Balaji: That's what has actually happened in the sense, if you look at our July 2026 disbursement, it is 25% more than the disbursement as of July 2025. All these things are likely to result in good growth, and that's what we are foreseeing. That is on the growth. Next thing is, obviously, with this kind of disbursement growth, the AUM growth also will catch up, and that's what is giving us confidence that we'll be able to achieve the guided range of 22% to 24% AUM growth. Now, coming to the asset quality. As I told you, the credit cost in the HFC was at 0.24%. This is in line with any other Housing Finance Company, and the quality of the book is behaving very well there.

Balaji Parthasarathy: That's what has actually happened in the sense, if you look at our July 2026 disbursement, it is 25% more than the disbursement as of July 2025. All these things are likely to result in good growth, and that's what we are foreseeing. That is on the growth. Next thing is, obviously, with this kind of disbursement growth, the AUM growth also will catch up, and that's what is giving us confidence that we'll be able to achieve the guided range of 22% to 24% AUM growth. Now, coming to the asset quality. As I told you, the credit cost in the HFC was at 0.24%. This is in line with any other Housing Finance Company, and the quality of the book is behaving very well there.

Speaker #3: It is 25% more than the disbursement as of July 25. So all these things are likely to impact, resulting in good growth. And that's what we are pursuing.

Speaker #3: That is on the growth. Next thing is, obviously, with this kind of disbursement growth, the ADM growth also will catch up. And that's what is giving us confidence that we'll be able to achieve the guided range of 22 to 24 percent ADM growth.

Speaker #3: Now, coming to the asset quality, as I told you, the credit cost in the HFC was at 0.24%. This is in line with any other housing finance company.

Speaker #3: And the quality of the book is behaving very well there. And if you look at the NDFC, there was a small hitch in terms of collection during the back end of June 2026.

P. Balaji: If you look at the NBFC, there was a small hitch in terms of collection during the back end of June 2026, and that is what has resulted in the collection efficiency dropping down to 98.5% and DPD going up to 6.87%. We have already taken corrective steps in terms of the NBFC collection, and we are very happy to tell that in July 2026, the stage 2 has almost reduced by 15 to 20 basis points. This will continue, and going forward, the credit cost range of 0.5% ± 10 basis points will be maintained, and this will be there for the next three quarters.

Balaji Parthasarathy: If you look at the NBFC, there was a small hitch in terms of collection during the back end of June 2026, and that is what has resulted in the collection efficiency dropping down to 98.5% and DPD going up to 6.87%. We have already taken corrective steps in terms of the NBFC collection, and we are very happy to tell that in July 2026, the stage 2 has almost reduced by 15 to 20 basis points. This will continue, and going forward, the credit cost range of 0.5% ± 10 basis points will be maintained, and this will be there for the next three quarters.

Speaker #3: And that is what has resulted in the collection efficiency dropping down to 98.5%, and 30-plus DPD going up to 6.87%. But we have already taken corrective steps in terms of the NDFC collections.

Speaker #3: And we're very happy to tell you that in July 2026, the stage two has almost reduced by 15 to 20 basis points. So, this will continue.

Speaker #3: And going forward, this credit cost range of 0.5%, plus or minus 10 basis points, will be maintained. This will be there for the next three quarters.

Speaker #2: Are there any specific factors that you would want to call out because of weakness in collections, or, you know, what really happened in the first quarter with the NDFC?

Nischint Chawathe: Any specific factors that you would want to call out because of weakness in collections or what happened really in the Q1 in the NBFC?

P. Balaji: Repeat the question, sorry, Nischint.

Balaji Parthasarathy: Repeat the question, sorry, Nischint.

Speaker #3: Repeat your question, sorry, Nishant.

Speaker #2: Yeah. So, any specific factors that you may want to call out, you know, which were the reasons for weaker collections in the NBFC in the first quarter?

Nischint Chawathe: Yeah. Any specific factors that you may want to call out which were the reasons for weaker collections in the NBFC in Q1?

Speaker #3: So, actually, first of all, let's be very clear: there is no problem with the quality of the customers whom they have funded in the NDFC.

P. Balaji: Actually, first of all, let's be very clear, there is no problem with the quality of the customers whom we have funded in the NBFC. It's basically some commitment which was there at the end of June. 26 June, that was a thing. Again, if you look at the credit cost of 1.4%, that compares with the NBFC or with other NBFCs in the same line of business. Actually, there is no problem with the quality of the customers. Only thing is some commitment which was there at the end of June, but they're not able to meet it. That is where there is a slight deterioration in the portfolio quality. That is getting corrected in the month of 26 July, and we'll come back strongly this quarter.

Balaji Parthasarathy: Actually, first of all, let's be very clear, there is no problem with the quality of the customers whom we have funded in the NBFC. It's basically some commitment which was there at the end of June. 26 June, that was a thing. Again, if you look at the credit cost of 1.4%, that compares with the NBFC or with other NBFCs in the same line of business. Actually, there is no problem with the quality of the customers. Only thing is some commitment which was there at the end of June, but they're not able to meet it. That is where there is a slight deterioration in the portfolio quality. That is getting corrected in the month of 26 July, and we'll come back strongly this quarter.

Speaker #3: It's basically the some commitment which was there on the end of June so at the end so June 25th, that was a thing. And I think if you look at the credit cost of 1.4%, that compares with the NDFC of any other with other NDFCs in the in the same line of business.

Speaker #3: So actually, there is no problem with the quality of the customers. The only thing is that some commitments which were there at the end of June, we were not able to meet them.

Speaker #3: And that is where there is a slight deterioration in the portfolio quality. But that is getting corrected in the month of July 25th, and we'll come back strongly in this quarter.

P. Balaji: Again, just to add, the data company-wise, the parent company in HFC business, pursuing HFC business, the quality of portfolio, overviews, NPA data, credit costs compares favorably with all other comparable housing companies. Equally, our NBFC data also is comparing well with other NBFCs of similar size or comparable NBFCs. On a combined basis, on a consolidated basis of HFC and NBFC, the combined data got increased by just 20 basis points, primarily on account of while it compares well with other NBFC business, but still, on a combined basis, our data-wise it is higher. That's what we are going to work strongly to reduce it from there.

Balaji Parthasarathy: Again, just to add, the data company-wise, the parent company in HFC business, pursuing HFC business, the quality of portfolio, overviews, NPA data, credit costs compares favorably with all other comparable housing companies. Equally, our NBFC data also is comparing well with other NBFCs of similar size or comparable NBFCs. On a combined basis, on a consolidated basis of HFC and NBFC, the combined data got increased by just 20 basis points, primarily on account of while it compares well with other NBFC business, but still, on a combined basis, our data-wise it is higher. That's what we are going to work strongly to reduce it from there.

Speaker #3: Then just to add, you know, the data company-wise, the parent company in the Excel business, pursuing Excel business, the quality of portfolio overviews, NPI data, credit cost compares favorably with all other comparable housing companies.

Speaker #3: Equally, our NDFC data is also comparing well with other NDFCs of similar size, or comparable NDFCs. But on a combined basis, on a consolidated basis of Excel and NDFC, you know, the combined data increased by just 20 basis points.

Speaker #3: Primarily on account of why? It comes out well with other NBFC business. But still, on a combined basis, our data shows it is higher.

Speaker #3: That's what we are going to work strongly on to reduce it from there.

Speaker #2: So probably, you know, this is kind of more of a month-end or a seasonal trend, is what you're suggesting. I mean, that's how I would read it, rather than saying that this is...

Nischint Chawathe: Probably, this is kind of more of a month-end or a seasonal trend is what you're suggesting. I mean, that's how I would read it.

P. Balaji: Yes.

Nischint Chawathe: rather than saying that the

Balaji Parthasarathy: Yes.

Nischint Chawathe: rather than saying that the

P. Balaji: Absolutely. Yes.

Balaji Parthasarathy: Absolutely. Yes.

Speaker #3: Absolutely. Yes.

Speaker #2: Okay, got it. Got it. Got it. Got it. Thank you very much, and all the best.

Nischint Chawathe: Okay. Got it. Thank you very much, and all the best.

Speaker #3: Thank you.

P. Balaji: Thank you.

Balaji Parthasarathy: Thank you.

Speaker #1: Thank you. A nice question comes from the line of Amang Shah with Kotak Mutual Fund. Please go ahead. हाँ, बोलिए।

Moderator: Thank you. Our next question come from the line of Umang Shah with Kotak Mutual Fund. Please go ahead.

Operator: Thank you. Our next question come from the line of Umang Shah with Kotak Mutual Fund. Please go ahead.

Umang Shah: Hello. Hi, am I audible?

Speaker #2: Hello. Hi, am I audible?

Speaker #3: Yes. Yes, Amang.

P. Balaji: Yes, Umang.

Balaji Parthasarathy: Yes, Umang.

Speaker #2: Yeah, yeah. Good morning, and thanks for taking my question. Sir, my question is also related to the asset quality point. Now, we do understand that Q1 is a seasonally weak quarter, but our headline ratios, in terms of 30-plus and 90-plus, are also higher on a year-over-year basis.

Umang Shah: Good morning, and thanks for taking my question. Sir, my question is also related to the asset quality point. We do understand that Q1 is a seasonally weak quarter, but our headline ratios in terms of 30 plus, 90 plus are also higher on a YoY basis. Is there anything lumpy out here which has led to this? The second question is that if you could, while the blended collection efficiency has dropped to 98.5, if you could just split it out as to how much collection efficiency has dropped in the NBFC business.

Speaker #2: So is there anything lumpy out here? Which has led to led to this and the second question is that if you could while the blended collection efficiency has dropped to 98 and a half, I mean, if you could just split it out as to how much collection efficiency has dropped in the NDFC business?

Speaker #3: Yeah. If you look at the collection efficiency, the housing finance company is around 99.5, and this one is around 97.5. That's the difference. So, adding up to this, on a consolidated basis, it is around 98.52.

P. Balaji: If you look at the collection efficiency, the housing finance company, which is around 99.5, and this one is around 97.5. That's the difference. Adding up to this, on a consolidated basis, it is around 98.5 too. Regarding the increase in the NPA, actually we are not seeing that kind of a lumpiness in this quarter or year-on-year basis. In fact, this is what we have also guided in the same 1.49% was the NPA as of June 2025. That has become 1.7%. This will definitely be brought down with the kind of efforts that is being done. This is broadly on account of the NBFC NPA getting increased.

Balaji Parthasarathy: If you look at the collection efficiency, the housing finance company, which is around 99.5, and this one is around 97.5. That's the difference. Adding up to this, on a consolidated basis, it is around 98.5 too. Regarding the increase in the NPA, actually we are not seeing that kind of a lumpiness in this quarter or year-on-year basis. In fact, this is what we have also guided in the same 1.49% was the NPA as of June 2025. That has become 1.7%. This will definitely be brought down with the kind of efforts that is being done. This is broadly on account of the NBFC NPA getting increased.

Speaker #3: But regarding the increase in the NPA, actually we are not seeing that kind of lumpiness in this quarter or on a year-on-year basis. In fact, this is what we have also guided—the same 1.49% was the NPA as of June 2023.

Speaker #3: That has become 1.7%. But this will definitely be brought down with the kind of efforts that are being made. And this is broadly on account of the NDFC NPA getting increased.

Speaker #2: Sure. So, this is not specific to any particular region or any particular cohort of customers, or anything like that.

Umang Shah: Sure. This is not specific to any particular region or any particular cohort of customers, or anything like that?

Speaker #3: No, no. No.

P. Balaji: No.

Balaji Parthasarathy: No.

Speaker #2: Okay, understood. And sir, just one suggestion. I do appreciate that, I mean, on the call, you are trying to emphasize a lot more on the HFC and the NBFC business, where you would want us to sort of compare both the businesses separately.

Umang Shah: Okay, understood. Sir, just one suggestion. I do appreciate that on the call you are trying to emphasize a lot more about the HFC and the NBFC business where you would want us to sort of compare both the businesses separately. Just a suggestion, if we could also start giving data points for both the businesses separately, it would help us as investors and analysts to kind of compare it in a more meaningful way.

Speaker #2: But just a suggestion—I mean, if we could also start giving data points for both the businesses separately, it would help us as investors and analysts to kind of compare them in a more meaningful way.

P. Balaji: Yes. Umang, we have already decided, we have already discussed from September 2026 onwards, you will get data for both the companies in the investor presentation.

Balaji Parthasarathy: Yes. Umang, we have already decided, we have already discussed from September 2026 onwards, you will get data for both the companies in the investor presentation.

Speaker #3: Yes, we have already, Amang. We have already decided. We have already discussed that from September 2026 onwards, you will get data for both the companies from an investor perspective.

Speaker #2: All right, thank you so much. And we sure request.

Umang Shah: All right. Thank you so much, and wish you all the best.

Speaker #3: Okay.

Speaker #1: Thank you. The next question comes from the line of Amit Khetan with Yes Securities. Please go ahead.

P. Balaji: Thank you.

Balaji Parthasarathy: Thank you.

Moderator: Thank you. Our next question comes from the line of Amit Khetan with YES SECURITIES. Please go ahead.

Operator: Thank you. Our next question comes from the line of Amit Khaitan with YES SECURITIES. Please go ahead.

Speaker #2: Hello?

Rajiv Mehta: Hello?

Speaker #3: Yeah, Amit.

P. Balaji: Yeah, Amit.

Balaji Parthasarathy: Yeah, Amit.

Speaker #2: Yeah. Can you hear me?

Rajiv Mehta: Yeah. Can you hear me?

Speaker #3: Yes. Yes, Amit.

P. Balaji: Yes, coming.

Balaji Parthasarathy: Yes, coming.

Speaker #2: Yeah, yeah. Hi. No, this is Rajeev here, sorry. So, just to clear this point on asset quality—you said that towards the end of June, some of the NBFC customers couldn't pay and couldn't honor their commitment.

Rajiv Mehta: Yeah. Hi. No, this is Rajeev here. Sorry. Just to clear this point on asset quality, you said that towards the end of June, some of the NBFC customers couldn't pay and couldn't honor their commitment. In July, they have not only cleared the June dues and they've also honored their July commitment as well. Now they've kind of rolled back their bucket, right? On an ongoing basis, your collection efficiency which was, say, 97.5 in NBFC now should be coming back to normal of what, 98.5, 99 in June, July?

Speaker #2: But in July they have not only they have not only cleared the June dues and they've also honored their July commitment as well. So now they are back to they have kind of rolled back their bucket, right?

Speaker #2: So, on an ongoing basis, your collection efficiency, which was, say, 97.5% in NDFC, now should be coming back to normal of, what, 98.5%, 99%.

Speaker #2: I mean, in June, July.

Speaker #3: Yes. Yes. Definitely. Definitely.

P. Balaji: Yes. Definitely.

Balaji Parthasarathy: Yes. Definitely.

Speaker #2: Got it. So, incrementally, you will not see flow-forwards from the NDFC portfolio, you know, in July and August.

Rajiv Mehta: Got it. Incrementally, you will not see flow forwards from the NBFC portfolio in July and August?

Speaker #3: Okay. Yes.

P. Balaji: Correct.

Balaji Parthasarathy: Correct.

Rajiv Mehta: Yes. Okay. From a growth point of view, again, you said that July disbursements were higher 25% Y&Y in your initial remarks. I think from last July, you also stopped doing below INR 7 lakh loans also. You stopped doing below INR 7 lakh ticket sizes from last July. On an adjusted basis, on a like-to-like basis then, how should we look at your disbursement run rate going ahead? 35% in Q1 was also because of a lower base last year. July is 25, but you still have a lower base. When the base normalizes, how should we look at your disbursement growth?

Speaker #2: Okay. And on this, you know, from a growth point of view, and again, you said that July is worse than for higher 25% year-on-year.

Speaker #2: In your initial remarks. But I think from last July, you also stopped doing you know, you know, this you know, below 7 lakh loans also.

Speaker #2: I mean, you stopped doing below ₹7 lakh ticket sizes from last July. So on an adjusted basis, I mean, see, on a like-to-like basis, then how should we look at your disbursement run rate going ahead?

Speaker #2: I mean, see, 35% in one quarter was also because of a lower base last year. But July is 25%, but you still have a lower base.

Speaker #2: But when the base normalizes, how should we look at your disbursement growth?

Speaker #3: See, this quarter, minimum 25% to 30% increase over the last quarter, year-on-year basis, will be happening this quarter. Yeah, impact of less than 7 lakh is also coming down.

P. Balaji: This quarter, minimum 25 to 30% increase over the last quarter, year-on-year basis will be happening this quarter.

Balaji Parthasarathy: This quarter, minimum 25 to 30% increase over the last quarter, year-on-year basis will be happening this quarter.

P. Balaji: The impact of lesser INR 7 lakh coming.

Balaji Parthasarathy: The impact of lesser INR 7 lakh coming.

Rajiv Mehta: Yeah. Impact of lesser INR 7 lakh will be coming down. Yeah.

Speaker #3: Yeah.

P. Balaji: Customers. Lower customers.

Balaji Parthasarathy: Customers. Lower customers.

Speaker #2: And the disbursement is also now happening on NDFC. I mean, on the NDFC side, you have not kind of calibrated on disbursement, right? Because everything has come back to normal.

Rajiv Mehta: The disbursement is also now happening on NBFC. On the NBFC side, you have not kind of calibrated on disbursement, right? Everything has come back to normal.

Speaker #3: Yes, see, that's what we told. Actually, there is no problem with the quality of the customers. It is just one small hitch that happened in the backend in June.

P. Balaji: Yes. See, that's what we told. Actually, there is no problem with the quality of the customers. It is just one small hit that has happened during the back end of June. There is no way that we are reducing the business in the NBFC.

Balaji Parthasarathy: Yes. See, that's what we told. Actually, there is no problem with the quality of the customers. It is just one small hit that has happened during the back end of June. There is no way that we are reducing the business in the NBFC.

Speaker #3: So there is no way that we have reduced the business in the NDFC.

Rajiv Mehta: Mm-hmm. Sir, one thing on the funding side, two things. NHB proportion in the funding is at its lowest in many, many quarters, and I don't see any NBFC sanction in the pipeline also. What is the reason? Second is the unavailable sanction from banks, as we see in the liquidity slide. What will be the cost of these sanctions when you draw?

Speaker #2: And sir, one thing on the funding side—two things. I mean, the NHB proportion in the funding is at its lowest in many, many quarters.

Rajiv Mehta: Sir, one thing on the funding side, two things. NHB proportion in the funding is at its lowest in many, many quarters, and I don't see any NBFC sanction in the pipeline also. What is the reason? Second is the unavailable sanction from banks, as we see in the liquidity slide. What will be the cost of these sanctions when you draw?

Speaker #2: And I don't see any NDFC sanction in the pipeline also. So, what is the reason? And second is the unavailed sanctions from banks, as we see in the liquidity slide.

Speaker #2: What will be the cost of these sanctions when you drop?

Speaker #3: Yeah. First of all, let me talk about this NHB. See, what is happening is, we have also applied to NHB for a ₹500 crore refinance facility.

P. Balaji: Yeah. First of all, let me talk about this NHB. See, what is happening, we have also applied to NHB for a 500 crore refinance facility. The indication from NHB is that the cost of funds that they are going to give will be around 8.2% to 8.3%. Whereas in the housing finance company, we are able to raise money from the banks or in terms of securitization or FGB at 7.8% to 7.9%. It makes more prudence to borrow from these sources rather than going to NHB. If NHB is able to offer competitive rate of interest, then we'll go to NHB, otherwise it will be from the other sources. That is on the NHB borrowing. Next thing is this 1,257 crores of sanctions which is there.

Balaji Parthasarathy: Yeah. First of all, let me talk about this NHB. See, what is happening, we have also applied to NHB for a 500 crore refinance facility. The indication from NHB is that the cost of funds that they are going to give will be around 8.2% to 8.3%. Whereas in the housing finance company, we are able to raise money from the banks or in terms of securitization or FGB at 7.8% to 7.9%. It makes more prudence to borrow from these sources rather than going to NHB. If NHB is able to offer competitive rate of interest, then we'll go to NHB, otherwise it will be from the other sources. That is on the NHB borrowing. Next thing is this 1,257 crores of sanctions which is there.

Speaker #3: But the indication from NHB is that the cost of funds that they are going to give will be around 8.2% to 8.3%. Whereas, in the housing finance company, they are able to raise money from the banks or through securitization or NCDs.

Speaker #3: At 7.8 to 7.9%. So, it makes more sense to borrow from these sources rather than going to NHB. But if NHB is able to offer a competitive rate of interest, then we will go to NHB.

Speaker #3: Otherwise, it will be from the other sources. So that is on the NHB borrowing. Next thing is this ₹1,257 crores of sanctions which is there.

Speaker #3: In the case of HFC, the sanction rate is around 7.9% to 8.1%. In the case of NDFC, it is around 8.1% to 8.25%.

P. Balaji: In the case of HFC, the sanction rate is around 7.9% to 8.1%. In the case of NBFC, it is around 8.1% to 8.25%.

Balaji Parthasarathy: In the case of HFC, the sanction rate is around 7.9% to 8.1%. In the case of NBFC, it is around 8.1% to 8.25%.

Speaker #2: Got it. Thank you so much.

Rajiv Mehta: Got it, sir. Thank you so much. Best of luck.

Speaker #1: Thank you. The next question comes from the line of Amit Khetan from Labanam Capital. Please go ahead.

Moderator: Thank you. Our next question comes from the line of Amit Khetan from Laburnum Capital. Please go ahead.

Operator: Thank you. Our next question comes from the line of Amit Khetan from Laburnum Capital. Please go ahead.

Speaker #2: Hi, sir. Thank you for taking my question. So, a couple of questions. First, you’ve talked about getting into new lending segments. Now, there are merits to being a company focused on a single segment.

Amit Khetan: Hi, sir. Thank you for taking my question. Couple of questions. First is on the, you've talked about getting into new lending segments. There are merits to being a company focused on a single segment, and the addressable market for affordable housing is pretty large. What is the rationale for getting to these new segments and which products are under consideration?

Speaker #2: And the addressable market for affordable housing, lab, is pretty large. So, what is the rationale for, you know, getting into these new segments, and which products are under consideration?

Speaker #3: See, this new product segment is in a formative phase. We are in the process of discussing which products we want to get into.

P. Balaji: See, this new product segment is in a formative stage. We are in the process of discussing on which products we want to get into. We'll be able to give more color in the next quarter con call because this is the thought process which is there in the company. We'll discuss it internally and then give you more color in the Q2.

Balaji Parthasarathy: See, this new product segment is in a formative stage. We are in the process of discussing on which products we want to get into. We'll be able to give more color in the next quarter con call because this is the thought process which is there in the company. We'll discuss it internally and then give you more color in the Q2.

Speaker #3: We'll be able to give more color in the next quarter on the call, because this is the top product in the company.

Speaker #3: So we'll discuss it internally and then give you more color in the second quarter.

Speaker #2: Got it. But can you explain what is the rationale for getting into new segments? Because, you know, our growth opportunity in the single segment is pretty huge, right?

Amit Khetan: Got it. Can you explain what is the rationale for getting into new segments? Because our growth opportunity in the single segment is pretty huge, right? Why now?

Speaker #2: So why now?

Speaker #3: Yeah, yeah, sure. You know, we are looking for—you know, shall we look at our next level stage of growth? Let's say, from 15,000 to 25,000.

P. Balaji: Yeah. We are looking for our next level stage of growth, let's say from 15,000 to 25,000 or from 25,000 to upwards of 50,000 over a period of time. We felt there is a strong need apart from strengthening our distribution because online associates, et cetera. There is a need to diversify the product range also. We see opportunity, particularly in the NBFC business because in the HL, we'll continue to be largely in HL, and after meeting the basic requirement of HL, the gap available in non-HL in HL company is limited. The NBFC-wise today, we are operating to the SME and to some extent to that. There is a large scope for to look at the add-on products, particularly even to our existing customers.

Balaji Parthasarathy: Yeah. We are looking for our next level stage of growth, let's say from 15,000 to 25,000 or from 25,000 to upwards of 50,000 over a period of time. We felt there is a strong need apart from strengthening our distribution because online associates, et cetera. There is a need to diversify the product range also. We see opportunity, particularly in the NBFC business because in the HL, we'll continue to be largely in HL, and after meeting the basic requirement of HL, the gap available in non-HL in HL company is limited. The NBFC-wise today, we are operating to the SME and to some extent to that. There is a large scope for to look at the add-on products, particularly even to our existing customers.

Speaker #3: Or from 25,000 to upwards of 50,000 over a period of time. We felt then a strong need, apart from strengthening our distribution, because of online associates, etc.

Speaker #3: There is a need to diversify the product range also. So, this is where we see opportunity, particularly in the NBFC business, because in HL, we'll continue to be largely in HL. And after meeting the prime and basic requirement of HL, the, you know, gap available in non-HL in the HL company is limited.

Speaker #3: But the NBFC-wise, today we are offering to the SME and to some extent to LAP. Now, there is a large scope to look at add-on products, particularly given to our existing customers.

Speaker #3: We have today over 200,000 customers availing unsecured, security-based, or non-security-based financial products from other vendors. Now, we have a very good experience with this one customer.

P. Balaji: We have today over 200,000 customers availing the unsecured or security-based or non-security based products, financial products from other vendors. As we have a very good experience with each one of our customers, and we see an opportunity for us to introduce appropriate products in our NBFC to expand. That to support our growth, apart from the distribution, we are looking at very closely the products also. The income stream we want to augment.

Balaji Parthasarathy: We have today over 200,000 customers availing the unsecured or security-based or non-security based products, financial products from other vendors. As we have a very good experience with each one of our customers, and we see an opportunity for us to introduce appropriate products in our NBFC to expand. That to support our growth, apart from the distribution, we are looking at very closely the products also. The income stream we want to augment.

Speaker #3: And we see an opportunity for us to introduce appropriate products in our NBFC to expand. So, to support our growth, apart from the distribution, we are looking very closely at the products also.

Speaker #3: The income stream we want to augment.

Speaker #2: Understood. But does that mean that, you know, we’ll slow geographic expansion and go much deeper into our existing geographies with more products?

Amit Khetan: Understood. Does that mean that we'll go slow in geographic expansion and much deeper into our existing geographies with more products?

Speaker #3: Yeah. As I mentioned, the distribution will cover the geographical expansion continuing. And, you know, our direct sourcing through our branches, through our field staff, will continue.

P. Balaji: No, as I mentioned, the distribution will cover the geographical expansion continuum and our direct sourcing through our branches, through our field staff will continue. Online will continue. Business associates will continue. That in terms of largely as you know it is around distribution in some form or the other. Physical, online, offline with their own staff. Apart from that, the other way in terms of our helping the company to scale up further is really product expansion. That's where we are looking at an opportunity to be there in our NBFC company to augment the products in the NBFC business. Particularly to leverage our existing customer base, which is also growing at almost about 20% per year. Our customer base itself is growing, so that we should be able to leverage the new product as well.

Balaji Parthasarathy: No, as I mentioned, the distribution will cover the geographical expansion continuum and our direct sourcing through our branches, through our field staff will continue. Online will continue. Business associates will continue. That in terms of largely as you know it is around distribution in some form or the other. Physical, online, offline with their own staff. Apart from that, the other way in terms of our helping the company to scale up further is really product expansion. That's where we are looking at an opportunity to be there in our NBFC company to augment the products in the NBFC business. Particularly to leverage our existing customer base, which is also growing at almost about 20% per year. Our customer base itself is growing, so that we should be able to leverage the new product as well.

Speaker #3: Online will continue, business associates will continue. But that is, you know, that's in terms of largely, as you know, it is other—physical, online, offline—with their own staff.

Speaker #3: But then, apart from that, the other way in terms of our helping the company to scale up further is really the product expansion. And that's where we are looking at an opportunity to be there in our NBFC company, to look at augmenting the products in the NBFC business.

Speaker #3: Particularly to leverage our existing customer base, which is also growing at about 20% per year. Our customer base is also growing, so we should be able to leverage that with our new products as well.

Speaker #2: Understood. My second question is on asset quality. If you could give some color in terms of ticket sizes—how the asset quality varies, say, between some of your book on sub-₹7 lakh, and, you know, maybe ₹7–10 lakh, and ₹10 lakh plus.

Amit Khetan: Understood. My second question is on asset quality. If you could give some color in terms of ticket sizes, how the asset quality varies, say, between you have some book on sub seven lakhs and maybe seven to 10 and 10 plus. Is there a difference in the credit behavior and how are the NPAs between the different ticket sizes?

Speaker #2: Is there a difference in the credit behavior, and how are the NPAs between the different ticket sizes?

Speaker #3: Yeah. We have not seen that kind of a differential behavior in terms of ticket sizes, except for the bounce rates. I mean, as we already communicated, when we look at less than 7 lakhs, the bounce rates were 2 to 3% more as compared to greater than 7 lakhs.

P. Balaji: We have not seen that kind of a differential behavior in terms of ticket sizes except for the bounce rates. As we already communicated, when the less than seven lakhs, the bounce rates were 2% to 3% more as compared to the greater than seven lakhs. Other than that, we are not seeing the kind of difference in the asset quality when you look at the ticket sizes.

Balaji Parthasarathy: We have not seen that kind of a differential behavior in terms of ticket sizes except for the bounce rates. As we already communicated, when the less than seven lakhs, the bounce rates were 2% to 3% more as compared to the greater than seven lakhs. Other than that, we are not seeing the kind of difference in the asset quality when you look at the ticket sizes.

Speaker #3: So, other than that, we are not seeing any significant difference in asset quality when you look at the ticket sizes.

Speaker #2: Got it. Lastly, our opex hasn't gone up a lot while we've added, you know, 33 branches this quarter. Is that because these branches were added towards the end of the quarter?

Amit Khetan: Got it. Lastly, our OpEx hasn't gone up a lot while we've added 33 branches this quarter. Is that because these branches were added towards the end of the quarter?

P. Balaji: Yeah. To a certain extent, yes. Of these 33 branches, 10 to 12 branches were opened before 31 May and the balance was opened in the month of June. The rent and all those costs will get reflected in H2. We have a track record, even last year we added about 30 branches and that has not really resulted in our OPEX going up in any significant way. In fact, coming year, we are planning around what, 60 to 70 branches. We have already added 33 in Q1 and plan to add another 25 in Q2 as well and the balance will get added subsequently. Some of these branches get added to the real estate way, Baroda and so.

Balaji Parthasarathy: Yeah. To a certain extent, yes. Of these 33 branches, 10 to 12 branches were opened before 31 May and the balance was opened in the month of June. The rent and all those costs will get reflected in H2. We have a track record, even last year we added about 30 branches and that has not really resulted in our OPEX going up in any significant way. In fact, coming year, we are planning around what, 60 to 70 branches. We have already added 33 in Q1 and plan to add another 25 in Q2 as well and the balance will get added subsequently. Some of these branches get added to the real estate way, Baroda and so.

Speaker #3: Yeah. To a certain extent, yes. Of this 33 branches, 10 branches, 10 to 11, 10 to 12 branches were opened before May 31st. And the balance was opened in the month of June.

Speaker #3: That's the rent, and all those costs will get reflected in the second quarter. Yeah. But we have a track record. Even last year, we added about 30 productive branches, and that did not really result in our opex going up in any significant way.

Speaker #3: In fact, coming here, we are planning around, what, 60 to 70—60 to 70 branches. We have already added 33 in the first quarter, and we are planning to add another 20 to 35 in the, you know, the second quarter as well.

Speaker #3: And the balance will get added subsequently. And some of the branches get started in the New York State, where Barra and Versa. But despite this, given our consciousness in terms of operating cost—in fact, not only the investment in the branch network—we’re also enhancing our investments in IT.

P. Balaji: Despite this, given our conscious efforts in terms of operating costs, in fact not only the investment in branch networks, we are also enhancing our investments in the IT. Despite that, we are very conscious of our cost of operations, both as a percentage of AUM as well as as a percentage of the income. That way we have a very clear advantage in the competition today that we will continue to maintain despite these investments in the infra, in branches, and IT.

Balaji Parthasarathy: Despite this, given our conscious efforts in terms of operating costs, in fact not only the investment in branch networks, we are also enhancing our investments in the IT. Despite that, we are very conscious of our cost of operations, both as a percentage of AUM as well as as a percentage of the income. That way we have a very clear advantage in the competition today that we will continue to maintain despite these investments in the infra, in branches, and IT.

Speaker #3: But despite that, we are very conscious of our cost of, you know, revenue, as well as as a percentage of the income. So that way, we have a very clear advantage in the competition today that we will continue to maintain despite these investments in the infra, in branches, and IT.

Speaker #2: Got it. Lastly, if I can just ask you, can you give some color on how acquisition in the industry is evolving? Has it improved, or does it continue to remain the same?

Amit Khetan: Got it. Lastly, if I can just ask you, can you give some color on how the attrition in the industry is evolving? Has it improved or does it continue to remain the same?

Speaker #3: If you look at the acquisition, at the senior level, absolutely there is nothing. And in the case of middle management also, it is only maybe 5–6%.

P. Balaji: If you look at the attrition at the senior level, absolutely there is nothing. In the case of middle management also, it is only maybe 5% to 6%. In the case of a branch manager, it is around 10% to 15%, but at the field level it is around 40% to 45%. Earlier it was around 50% to 60%, it has come down to 45%, but still it is high. We have introduced retention incentive insurance schemes for these employees and all those kind of things to retain people. Still if people come and open branches in the states where we are operating, the first thing they will do is to poach our field officers. That is a challenge which we need to wrestle with. That is why we are also launching the alternate channels so that there is less dependence on people itself.

Balaji Parthasarathy: If you look at the attrition at the senior level, absolutely there is nothing. In the case of middle management also, it is only maybe 5% to 6%. In the case of a branch manager, it is around 10% to 15%, but at the field level it is around 40% to 45%. Earlier it was around 50% to 60%, it has come down to 45%, but still it is high. We have introduced retention incentive insurance schemes for these employees and all those kind of things to retain people. Still if people come and open branches in the states where we are operating, the first thing they will do is to poach our field officers. That is a challenge which we need to wrestle with. That is why we are also launching the alternate channels so that there is less dependence on people itself.

Speaker #3: In the case of the branch manager, it is around 10% to 15%. But at the field level, it is around 40% to 45%.

Speaker #3: Whether it was around 50 to 60 percent, it has come down to 45 percent. But still, this is high. We are high. We have introduced retention incentives, insurance schemes for these employees, and all those kinds of things.

Speaker #3: Retail people, but still, very often people come and open branches in the state where we are operating. The first thing we'll do is to put a team back with us.

Speaker #3: But that's a challenge which we need to work with. That is why we are also launching alternate channels so that there is less dependence on people as well.

Speaker #2: Understood. Understood. Thank you, and all the best.

Amit Khetan: Understood. Thank you and all the best.

Speaker #1: Thank you. Our next question comes from the line of Renish Patel from ICICI Securities. Please go ahead.

Moderator: Thank you. Next question comes from the line of Dinesh Patel from ICICI Securities. Please go ahead.

Operator: Thank you. Next question comes from the line of Renish Patel from ICICI Securities. Please go ahead.

Speaker #2: Yeah. Hi, sir. Thanks for the opportunity. So just one question on the strategy side. Last year, around the same time, you had exited with below 7 lakh products.

Dinesh Patel: Yeah. Hi, sir. Thanks for the opportunity. Sir, just one question on the strategic side. Last year same time sort of exiting below seven lakh products. Now when we are thinking for the product function strategies, naturally we have to calibrate growth in some of the existing products to meet NHB criteria. How one should think about the AUM mix shaping up in near term and is there any impact on ROA at all sort of when you start expanding the product lines?

Renish Patel: Yeah. Hi, sir. Thanks for the opportunity. Sir, just one question on the strategic side. Last year same time sort of exiting below seven lakh products. Now when we are thinking for the product function strategies, naturally we have to calibrate growth in some of the existing products to meet NHB criteria. How one should think about the AUM mix shaping up in near term and is there any impact on ROA at all sort of when you start expanding the product lines?

Speaker #2: And now, when we are thinking about another product expansion strategy, naturally, we have to calibrate growth in some of the existing products to meet energy criteria.

Speaker #2: So how should one think about the AM mix shaping up in the near term? And is there any impact on ROA at all, you know, when you start expanding your product lines?

Speaker #3: So, if you look at the product mix, currently in the original product company, 67% is housing loans, and the balance is non-housing loans, either in the form of quasi-home loans or a top-up or insurance funds.

P. Balaji: If you look at the product mix, currently in the housing finance company, 67% is housing loan and the balance is the non-housing loans, either in the form of quasi-home loans or top-ups or insurance loans. This is likely to continue. Because we still have to maintain this principal business criteria. At this level of product mix, we are comfortably meeting the principal business criteria. The mix will remain the same. If at all any other business will be done, it will be done in the NBFC.

Balaji Parthasarathy: If you look at the product mix, currently in the housing finance company, 67% is housing loan and the balance is the non-housing loans, either in the form of quasi-home loans or top-ups or insurance loans. This is likely to continue. Because we still have to maintain this principal business criteria. At this level of product mix, we are comfortably meeting the principal business criteria. The mix will remain the same. If at all any other business will be done, it will be done in the NBFC.

Speaker #3: Or insurance loans. So this is likely to continue, because we will not— I mean, we still have to maintain this principal business criteria. At this level of product mix, we are comfortably meeting the principal business criteria.

Speaker #3: So the mix will remain the same. So if at all any other business will be done, it will be done in the NBFC. So this is not likely to—we have no one to do.

Dinesh Patel: Yes.

Renish Patel: Yes.

P. Balaji: This is not likely to impact the ROA. Yeah.

Balaji Parthasarathy: This is not likely to impact the ROA. Yeah.

Speaker #3: This is not likely to impact the ROA. Yeah.

Speaker #2: Okay. No, no. But, so the point is,

Dinesh Patel: Okay. No.

Renish Patel: Okay. No.

P. Balaji: Unless the borrowings increase on the delivery basis.

Balaji Parthasarathy: Unless the borrowings increase on the delivery basis.

Speaker #3: Unless the leverage—no, unless the borrowing increases and the leverage increases.

Speaker #2: Got it. Got it. So my point is, in this, you know, this 50 percent mix, you know, which we have currently, when we start adding new products, right, to maintain this mix, you know, naturally the new product lines will grow at a faster pace because of low bays.

Dinesh Patel: Got it. My point is, in this 33% mix which we have currently, when we start adding new products, to maintain this mix, naturally the new product lines will grow at a faster pace because of low base. Hence, some of the existing product lines in NBFC should see lower growth at blended business. Otherwise, we'll miss NHB criteria. Strategically, let us say, which product do you think will go slow in near term or maybe been offset by new product lines?

Renish Patel: Got it. My point is, in this 33% mix which we have currently, when we start adding new products, to maintain this mix, naturally the new product lines will grow at a faster pace because of low base. Hence, some of the existing product lines in NBFC should see lower growth at blended business. Otherwise, we'll miss NHB criteria. Strategically, let us say, which product do you think will go slow in near term or maybe been offset by new product lines?

Speaker #2: And hence, you know, some of the existing product lines in NBFC should see lower growth, right, on a blended basis. Otherwise, we'll miss energy criteria.

Speaker #2: So, strategically, let us say, which product do you think will go slow in the near term, or maybe will be offset by new product lines?

Speaker #3: Yeah, I think we need to be clear here. See, the mix that I was talking about was on the housing finance company. So that mix will continue.

P. Balaji: No. I think to make it clear here. See, the mix which I was talking was on the Housing Finance Company. That mix will continue. Any new product that will be done will be done in the NBFC.

Balaji Parthasarathy: No. I think to make it clear here. See, the mix which I was talking was on the Housing Finance Company. That mix will continue. Any new product that will be done will be done in the NBFC.

Speaker #3: So, any new product that will be done will be done in the NDFC.

Speaker #2: NDFC company.

Speaker #3: NDFC company. Okay. So while the consolidated mix might change, on the housing finance company, this will be the mix. So there will not be any impact on the principal business criteria or on the ROA or the ROE.

Dinesh Patel: NBFC company.

Renish Patel: NBFC company.

P. Balaji: NBFC company. Okay. While the consolidated mix might change, but on the Housing Finance Company, this will be the mix. There'll not be any impact on the principal business criteria or on the ROA or on the ROE.

Balaji Parthasarathy: NBFC company. Okay. While the consolidated mix might change, but on the Housing Finance Company, this will be the mix. There'll not be any impact on the principal business criteria or on the ROA or on the ROE.

Speaker #2: Okay. Okay. So, Michael, even if we go for this product expansion, broadly, there will be no impact on the profitability.

Dinesh Patel: Okay. Naturally, even if we go for this product expansion, broadly, there will be no impact on the profitability.

Renish Patel: Okay. Naturally, even if we go for this product expansion, broadly, there will be no impact on the profitability.

Speaker #3: Yes. Yes.

P. Balaji: Yes.

Balaji Parthasarathy: Yes.

Speaker #2: Okay. Okay.

Dinesh Patel: Okay.

Renish Patel: Okay.

Speaker #3: In fact, it can be more. In fact, it can be more. Yeah.

P. Balaji: In fact, it can be more.

Balaji Parthasarathy: In fact, it can be more.

Speaker #2: Got it, sir. And just one last clarification: again, this 30-plus equity movement, right? So, given we sort of executed that ticket size a year back, and I'm sure the incremental growth would have been towards a better customer pool.

Dinesh Patel: Got it, sir. Just this last clarification on again this 30-plus liquidity moment. Given we exited that ticket size a year back, I am sure incremental growth would have been towards better customer pool. Logically, at least the early bucket should have YoY improvement, right? Sequentially, I can understand that there is a seasonality. If we are exiting this, let us say, the challenging segment last year, and 12 months MoB, I am sure should perform better than a vintage book. In that sense, why 30-ness is not coming down on YoY business?

Renish Patel: Got it, sir. Just this last clarification on again this 30-plus liquidity moment. Given we exited that ticket size a year back, I am sure incremental growth would have been towards better customer pool. Logically, at least the early bucket should have YoY improvement, right? Sequentially, I can understand that there is a seasonality. If we are exiting this, let us say, the challenging segment last year, and 12 months MoB, I am sure should perform better than a vintage book. In that sense, why 30-ness is not coming down on YoY business?

Speaker #2: So, logically, at least the early bucket should have a wide, wide improvement, right? Sequentially, I can understand that there is a seasonality. But if we are exiting the, let us say, the challenging segment last year, then 12 months MOB, I'm sure, should perform better than a vintage book.

Speaker #2: So in that sense, why is the 30-plus not coming down on the wide-wide business?

Speaker #3: Correct. Renish, what you're asking is very logical. But the thing is, this is not because of a deterioration in the asset quality of the customers. It is just that it was a temporary fix during the tail end of June 26th, where some commitment was not delivered.

P. Balaji: Correct. Dinesh, what you are asking is very logical, the thing is, this is not because of the deterioration in the asset quality of the customers or this thing. It is just that it was a temporary glitch during the back end of June 2023, where some commitment was not delivered.

Balaji Parthasarathy: Correct. Renish, what you are asking is very logical, the thing is, this is not because of the deterioration in the asset quality of the customers or this thing. It is just that it was a temporary glitch during the back end of June 2023, where some commitment was not delivered.

Speaker #3: And that has happened in July. That's what I'm saying. Whatever commitment didn't happen as of 30th June, that has been honored in the month of July.

Dinesh Patel: Okay.

Renish Patel: Okay.

P. Balaji: That has happened in July. That was the thing.

Balaji Parthasarathy: That has happened in July. That was the thing.

Dinesh Patel: Okay

Renish Patel: Okay

P. Balaji: didn't happen as on 20 June, that has got honored in the month of July.

Balaji Parthasarathy: didn't happen as on 20 June, that has got honored in the month of July.

Speaker #2: Got it. So, in just a day, this might—maybe.

Dinesh Patel: Got it. In just a day it is quite varied.

Renish Patel: Got it. In just a day it is quite varied.

Speaker #3: Huh. With the very little improvement in July. So, this improvement will continue in the months of August and September as well.

P. Balaji: With the result, there is improvement in July.

Balaji Parthasarathy: With the result, there is improvement in July.

Dinesh Patel: Got it.

Renish Patel: Got it.

P. Balaji: This improvement will continue in the month of August and September as well.

Balaji Parthasarathy: This improvement will continue in the month of August and September as well.

Speaker #2: Yeah, got it, sir. Okay. Okay, got it, sir. So, thank you and best of luck.

Dinesh Patel: Got it, sir. Okay. Got it, sir. Thank you, Anil Bhavsar sir.

Renish Patel: Got it, sir. Okay. Got it, sir. Thank you, Anil Bhavsar sir.

Speaker #3: Yeah. Thanks, Renish.

P. Balaji: Yeah. Thank you, Dinesh.

Balaji Parthasarathy: Yeah. Thank you, Renish.

Speaker #1: Thank you. Our next question comes from the line of Raghav Garg from Ambit Capital. Please go ahead.

Moderator: Thank you. Our next question comes from the line of Raghav Garg from Ambit Capital. Please go ahead.

Operator: Thank you. Our next question comes from the line of Raghav Garg from Ambit Capital. Please go ahead.

Raghav Garg: Hi, sir. Thanks for the opportunity. I have a few questions. One, your tax rate has been lower for the last two quarters, around 20% versus, I think if you look at the previous trend, that is around 23%. Why is that? Going ahead, what should be the normalized run rate on the effective tax rate?

Speaker #2: Hi, sir. Thanks for the opportunity. I have a few questions. One, your tax rate has been lower for the last two quarters, around 20 percent, versus, I think, if you look at the previous ten, that's around 23 percent.

Speaker #2: So why is that? And then going ahead, what should be the normalized rate on the effective tax rate?

P. Balaji: I didn't get your question correctly. I'm sorry. Why is it not clear, Raghav?

Balaji Parthasarathy: I didn't get your question correctly. I'm sorry. Why is it not clear, Raghav?

Speaker #3: I didn't get your question correctly. Why is this not clear, rather?

Speaker #2: So, are you able to hear me now?

Raghav Garg: Are you able to hear me now?

Speaker #3: Yes. Thank you sir.

P. Balaji: Yes. Can hear better.

Balaji Parthasarathy: Yes. Can hear better.

Speaker #2: Okay. I'm saying that your effective tax rate has been 20 percent for the last two quarters, Q4 and Q1.

Raghav Garg: Okay. I am saying that your effective tax rate has been 20% for the last two quarters, Q4 and Q1.

Speaker #3: Yeah.

P. Balaji: Yeah

Balaji Parthasarathy: Yeah

Speaker #2: Versus 23 percent before that. So, why is that? And then, going ahead, what should be the normalized run rate on the effective tax rate?

Raghav Garg: versus 23% before that. Why is that? Going ahead, what should be the normalized run rate on the effective tax rate?

Speaker #3: The tax rate is basically because of the benefit we are getting due to the aggressive write-off policies which we are following. And that's the tax benefit we are getting.

P. Balaji: The tax rate is basically because of the benefit we are getting because of the aggressive write-off policies which we are following, and that is the tax benefit we are getting. That is what has resulted in this, and this will continue. The credit cost is largely on account of write-off rather than provision. On write-off as soon as eligible for the.

Balaji Parthasarathy: The tax rate is basically because of the benefit we are getting because of the aggressive write-off policies which we are following, and that is the tax benefit we are getting. That is what has resulted in this, and this will continue. The credit cost is largely on account of write-off rather than provision. On write-off as soon as eligible for the.

Speaker #3: So, that's what has resulted in this. And this will continue. The credit cost is largely on account of write-off rather than provision. And write-off, as you know, is eligible for the tax elements.

Raghav Garg: Got it.

P. Balaji: tax elements.

Balaji Parthasarathy: tax elements.

Speaker #2: Understood. So, you're saying this will continue, is it?

Raghav Garg: Understood. You're saying this will continue, is it?

Speaker #3: Yeah.

P. Balaji: Yeah.

Balaji Parthasarathy: Yeah.

Speaker #2: Understood. For July, you said that your disbursements are up 25 percent. What is the year-over-year growth in volume terms for the month, like in terms of number of loans?

Raghav Garg: Understood. For July, you said that your disbursements are up 25%. What is the YoY growth in volume terms for the month, like in terms of number of loans?

P. Balaji: These are very specific questions. I will answer when we meet up. I don't want to prepare you.

Balaji Parthasarathy: These are very specific questions. I will answer when we meet up. I don't want to prepare you.

Speaker #3: These are very specific questions. I will answer when we meet up. I don't want to discuss it.

Speaker #2: Sure.

Raghav Garg: Sure.

P. Balaji: Largely, our growth in loan and from customers will be around .

Balaji Parthasarathy: Largely, our growth in loan and from customers will be around .

Speaker #3: Sadly, our growth in the number of loan customers will be around the same.

Speaker #2: Yeah.

Raghav Garg: Yeah. Sorry, how much?

Speaker #3: Yes.

Speaker #2: So sorry, how much?

Speaker #3: No, it would largely be the same. Specifically, we'll discuss that in the meeting.

P. Balaji: No, it will broadly be the same. Specific, we will discuss in the meeting.

Balaji Parthasarathy: No, it will broadly be the same. Specific, we will discuss in the meeting.

Speaker #2: Sure. Last question—the assignment income. That run rate in absolute value terms seems to be stabilizing, or if I look at that as a percentage of the off-book AUM, the margin is normalizing lower.

Raghav Garg: Sure. Last question, the assignment income. That run rate in absolute value term seems to be stabilizing. If I look at that as percentage of the off-book AUM, the margin is normalizing lower. Where should this margin settle on a steady state basis? When I look at other housing finance companies, the assignment income as percentage of assets seems to be somewhere around 11% to 12%. Yours is currently at 23%, and it's been coming down from as high as 40%. Should it stay settle somewhere closer to 12%, 15% mark, or maybe lower, assuming that you probably have a higher yield book versus others or a higher yield product. I just wanted to get some sense there on the margin.

Speaker #2: Where should this margin settle on a steady-state basis? Because when I look at other housing finance companies, the assignment income as a percentage of off-book assets seems to be somewhere around 11% to 12%.

Speaker #2: Yours is currently at 23 percent, and it's been coming down from as high as 40 percent. Should it stay somewhere closer to the 12 to 15 percent mark, or maybe lower?

Speaker #2: Assuming that, you know, you probably have a higher-yield book versus others or a higher-yield product, I just wanted to get some sense there on the margin.

P. Balaji: It should come down to around 12% to 15%.

Balaji Parthasarathy: It should come down to around 12% to 15%.

Speaker #3: It's come down to around 12 to 15. It's just come down to around 12 to 15 percent.

Speaker #2: Understood. Thanks a lot. That was all from us.

Raghav Garg: Understood. Thank you a lot. That was all from my side.

Speaker #1: Thank you. Our next question comes from the line of Sukrit D. Patil from ICEYE FinTrade Private Limited. Please go ahead.

Moderator: Thank you. Our next question comes from the line of Sukriti Deepak from ICICI FinTrade Private Limited. Please go ahead.

Operator: Thank you. Our next question comes from the line of Sukriti Deepak from Eyesight FinTrade Private Limited. Please go ahead.

Speaker #2: Good morning to the team. I have two questions. The first question is for Mr. Manohar Reddy. Beyond the regular outlook, what are the top two to three execution priorities you are focusing on in the next few quarters?

Sukriti Deepak: Good morning to the team. I have two questions. The first question to Mr. Manohar. Beyond the regular outlook, what are the top two to three execution priorities you are focusing on in the next few quarters? Alongside that, what do you see as the biggest risk in borrower demand shifts, interest rate movement or competitive pressure, and how are you preparing to manage them while strengthening Aptus' position in affordable housing finance? That's my first question. I'll ask my second question after this. Thank you.

Sukrit Deepak: Good morning to the team. I have two questions. The first question to Mr. Manohar. Beyond the regular outlook, what are the top two to three execution priorities you are focusing on in the next few quarters? Alongside that, what do you see as the biggest risk in borrower demand shifts, interest rate movement or competitive pressure, and how are you preparing to manage them while strengthening Aptus' position in affordable housing finance? That's my first question. I'll ask my second question after this. Thank you.

Speaker #2: And alongside that, what do you see as the biggest risk in borrower demand shift—interest rate movements or competitive pressure? And how are you preparing to manage them while strengthening your asset position in affordable housing finance?

Speaker #2: That's my first question. I'll ask my second question after this. Thank you.

P. Balaji: Once again, we didn't understand the question. Can you please repeat it? Sorry about it.

Balaji Parthasarathy: Once again, we didn't understand the question. Can you please repeat it? Sorry about it.

Speaker #3: One second. We didn’t understand the question. Could you please repeat it? Sorry about that.

Speaker #2: Yeah, I'm asking about the concrete plan of action that you may be implementing, like expanding branch networks, strengthening digital lending, or diversifying borrowing segments. And also, the risks you see in borrower demand, interest rate cycles, or competition.

Sukriti Deepak: Yeah. I'm asking about concrete plan of action that you may be implementing, like expanding branch networks, strengthening digital lending or diversifying borrowing segments, and also the risk you see in borrower demand, interest rate cycles or competition. I just want to understand both on how you plan to grow and how you are preparing to handle challenges that could slow down the growth process. Thank you.

Sukrit Deepak: Yeah. I'm asking about concrete plan of action that you may be implementing, like expanding branch networks, strengthening digital lending or diversifying borrowing segments, and also the risk you see in borrower demand, interest rate cycles or competition. I just want to understand both on how you plan to grow and how you are preparing to handle challenges that could slow down the growth process. Thank you.

Speaker #2: I just want to understand, both how you plan to grow and how you are preparing to handle challenges that could slow down the growth process.

Speaker #2: Thank you.

Speaker #3: First of all, the competition will be there—we cannot rule that out. So, branch expansion will be happening, as per guidance. We have guidance of about 60 to 70 branches this financial year.

P. Balaji: First of all, the competition that will be there, that we cannot rule out. Branch expansion will be happening as guided. We have guided about 60 to 70 branches this financial year, of which already 33 have been opened, and another 20 or 23 will happen in this quarter and the rest will happen in Q3. Branch expansion, we do not have any challenges. The growth will come, whatever branches we are opening, obviously new sales officers will be joining there. To that extent, number of sales officers will go up and to that extent, business will also go up. We don't find any challenges in the growth from the new branches. That will go as per plan.

Balaji Parthasarathy: First of all, the competition that will be there, that we cannot rule out. Branch expansion will be happening as guided. We have guided about 60 to 70 branches this financial year, of which already 33 have been opened, and another 20 or 23 will happen in this quarter and the rest will happen in Q3. Branch expansion, we do not have any challenges. The growth will come, whatever branches we are opening, obviously new sales officers will be joining there. To that extent, number of sales officers will go up and to that extent, business will also go up. We don't find any challenges in the growth from the new branches. That will go as per plan.

Speaker #3: Of those, 33 have already been opened, and another 20 or 23 will open in this quarter. The rest will open in Q3. So, with branch expansion, we do not have any challenges.

Speaker #3: And the growth will come. Whatever branches we are opening, obviously new sales officers will be joining there. So to that extent, the number of sales officers will go up.

Speaker #3: And to that extent, business will also go up. So we don't find any challenges in the growth from the new branches. So that will go as per plan.

Speaker #2: Thank you. My second question.

Sukriti Deepak: Thank you. My second question.

Sukrit Deepak: Thank you. My second question.

Speaker #3: So we are not.

P. Balaji: We are not. Yeah, continue.

Balaji Parthasarathy: We are not. Yeah, continue.

Speaker #2: Huh? No, sorry, sorry, sorry. Please, please continue. Please continue.

Sukriti Deepak: Sorry. Please go ahead.

Sukrit Deepak: Sorry. Please go ahead.

Speaker #3: No, regarding the risks we are on, we are seeing for the growth, we are not seeing that kind of a risk, because we always believe that there is good opportunity for growth in the affordable housing segment.

P. Balaji: Regarding the risks we are seeing for the growth, we are not seeing that kind of a risk because we always believe that there is good opportunity for growth in the affordable housing segment and also in the NBFC where we are located.

Balaji Parthasarathy: Regarding the risks we are seeing for the growth, we are not seeing that kind of a risk because we always believe that there is good opportunity for growth in the affordable housing segment and also in the NBFC where we are located.

Speaker #3: And also in the NDFT where we are located, in the new geographies, and also in the existing geographies. Of course, competition is there, but still, the market is there.

Sukriti Deepak: In the new geographies.

Sukrit Deepak: In the new geographies.

P. Balaji: In the new geographies, also in the existing geographies. Of course, competition is there, but still the market is there and we still believe that we can still grow. To have this sustainable growth, as explained by Chairman, we are also getting into the new products. Definitely growth is not an issue considering the fact that we are guiding 22% to 24%. I hope I answered your question on these risks. Also the competition, again, as Manohar told, there are people, there are companies who are opening branches in the states where we are operating. What we are doing is, when somebody comes and tells that people are opening branches, we also say that there is business opportunity available in these existing states. We are also getting into states where the competition is not very intense.

Balaji Parthasarathy: In the new geographies, also in the existing geographies. Of course, competition is there, but still the market is there and we still believe that we can still grow. To have this sustainable growth, as explained by Chairman, we are also getting into the new products. Definitely growth is not an issue considering the fact that we are guiding 22% to 24%. I hope I answered your question on these risks. Also the competition, again, as Manohar told, there are people, there are companies who are opening branches in the states where we are operating. What we are doing is, when somebody comes and tells that people are opening branches, we also say that there is business opportunity available in these existing states. We are also getting into states where the competition is not very intense.

Speaker #3: And we still believe that we can continue to grow. To achieve sustainable growth, as explained by the Chairman, we are also getting into new products.

Speaker #3: So this is what it is. So definitely, growth is not an issue, considering the fact that we are guiding 22 to 24 percent. So this is not— I mean, I hope I answered your questions on these risks.

Speaker #3: And also, regarding the competition, as one of us mentioned, there are companies who are opening branches in the states where we operate.

Speaker #3: But what we are doing is, when somebody comes and says that people are opening branches, we also say that there are business opportunities available in these existing states.

Speaker #3: But we are also getting into states where the competition is not very intense—for example, Odisha. And also in Maharashtra, at the locations where we have opened branches, the competition is not very intense.

P. Balaji: For example, Odisha and also in Maharashtra, there are the locations where we have opened branches, the competition is not very intense. This is how the progress will happen, and of course, we will be following a contiguous branch expansion strategy and going deep into a particular state.

Balaji Parthasarathy: For example, Odisha and also in Maharashtra, there are the locations where we have opened branches, the competition is not very intense. This is how the progress will happen, and of course, we will be following a contiguous branch expansion strategy and going deep into a particular state.

Speaker #3: So this is how the problems will happen. And of course, we'll be following this contiguous branch expansion strategy and going deep into a particular state.

Speaker #2: Thank you. Can I ask my second question?

Sukriti Deepak: Thank you. Can I ask my second question?

Sukrit Deepak: Thank you. Can I ask my second question?

Speaker #3: Yeah, please.

P. Balaji: Yeah.

Balaji Parthasarathy: Yeah.

Speaker #2: Yeah, my second question is to Mr. Mittal. Again, along similar lines, while the business guidance was just now mentioned, we want to understand from a financial point of view.

Sukriti Deepak: Yeah. The second question is to Mr. Mittal. Again, along the similar lines, while the business guidance is just now mentioned. To understand from a financial point of view, what key risks or challenges you anticipate in the coming quarters, and what specific measures are being taken to manage margin, liquidity, and balance sheet strength, especially areas like borrowing costs, asset quality, and regulatory compliance. Thank you.

Sukrit Deepak: Yeah. The second question is to Mr. Mittal. Again, along the similar lines, while the business guidance is just now mentioned. To understand from a financial point of view, what key risks or challenges you anticipate in the coming quarters, and what specific measures are being taken to manage margin, liquidity, and balance sheet strength, especially areas like borrowing costs, asset quality, and regulatory compliance. Thank you.

Speaker #2: What key risks or challenges do you anticipate in the coming quarters? And what specific measures are being taken to manage margins, liquidity, and balance sheet strength—especially in areas like borrowing cost, asset quality, and regulatory compliance?

Speaker #2: Thank you.

Speaker #3: So first, coming to the margins front, we have reduced the rate of interest income a little bit. We are protecting that by effective borrowing.

Sanjay Mittal: First, coming on the margin front. As we have little bit reduced the rate of interest income, that we are protecting by effective borrowing. We expect the gross spread to remain at 9%, and since our leverage is also being stable around, we expect the NIMs to be around 13%, 12% and 13%. Our means are protected from that perspective. In terms of operating cost, we are very frugal. We have consistently delivered 2.7%, and in spite of increasing branches, the way we manage the operating cost, I think there might be a 2.7% to 2.8% range, but we are very strongly managing our operating cost and that we are very confident on managing that. Regarding the credit cost, that is one little aspect where we are working on.

Speaker #3: So we expect the gross space to remain at 9 percent. And that since our delivery is also being stable around, so we expect the means to be around 13 percent, 12, and 13.

Speaker #3: So our means are protected from that perspective. In terms of operating cost, we are very frugal. So we have consistently delivered 2.7%. And in spite of increasing banks, the way we manage the operating cost, I think it might be in the 2.7% to 2.8% range.

Speaker #3: But we are very strongly managing our operating cost, and we are very confident about managing that. Regarding the credit cost, that is one little aspect where we are working on. Definitely, Balaji should also emphasize that collections is one of the key things which we are trying to manage.

Sanjay Mittal: Definitely, Balaji has also emphasized that collections is one of the key things which we are trying to manage, and we expect that to also range in between INR 0.50, INR 0.60. These are the

Sanjay Mittal: Definitely, Balaji has also emphasized that collections is one of the key things which we are trying to manage, and we expect that to also range in between INR 0.50, INR 0.60.

Speaker #3: And we expect that to also range between 50 and 60 percent. So these are the things or aspects in the financials which we are looking at.

Sanjay Mittal: These are the seeing our assets in the financials, which we have looked into. In terms of liquidity, what we have been doing is, we have been keeping enough liquidity for two, three months. Since our leverage is very low, we are able to negotiate with the bank and bring them to our price what we want and what rate of interest we want. We are not in a hurry. We are not levering. That is the most important aspect of our balance sheet. We can wait and bring the lenders at our terms and at our rates rather than asking or offering rate what banks are asking. Yeah.

P. Balaji: Seeing our assets in the financials, which we have looked into. In terms of liquidity, what we have been doing is, we have been keeping enough liquidity for two, three months. Since our leverage is very low, we are able to negotiate with the bank and bring them to our price what we want and what rate of interest we want. We are not in a hurry. We are not levering. That is the most important aspect of our balance sheet. We can wait and bring the lenders at our terms and at our rates rather than asking or offering rate what banks are asking. Yeah.

Speaker #3: In terms of liquidity, what we have been doing is, we have been keeping enough liquidity for two to three months. And since our leverage is very low, we are able to negotiate with the bank and bring them to our price—what we want and what rate of interest we want.

Speaker #3: We are not in a hurry. We are not leveraged. That is the most important aspect of our balance sheet. So, we can wait and bring the lenders on our terms and at our rates, rather than accepting the rates that banks are asking.

Speaker #2: Yeah, thank you. And based on...

Sukriti Deepak: Thank you and best wishes.

Sukrit Deepak: Thank you and best wishes.

Speaker #3: Just to add to what Kendra said, we are also asking about the risks that could arise in the second quarter or third quarter.

P. Balaji: Just to add to what Sanjay said, you were also asking about the risks that can come in Q2 or Q3. The one thing which I am seeing is if you look at our total borrowings, 66% is variable and 34% is fixed. Of this 66%, 35% is linked to repo rate and 31% is linked to MCLR. Basically, there is an increase in the repo rate. There can be some impact, but we have also computed it. It is just the impact is likely to be 0.06%. That also will not be a major impact in terms of maintaining the margins of the spreads.

Balaji Parthasarathy: Just to add to what Sanjay said, you were also asking about the risks that can come in Q2 or Q3. The one thing which I am seeing is if you look at our total borrowings, 66% is variable and 34% is fixed. Of this 66%, 35% is linked to repo rate and 31% is linked to MCLR. Basically, there is an increase in the repo rate. There can be some impact, but we have also computed it. It is just the impact is likely to be 0.06%. That also will not be a major impact in terms of maintaining the margins of the spreads.

Speaker #3: The one big thing which I am seeing is if there is I mean, if you look at our total borrowing, 66 percent is variable and 34 percent is fixed.

Speaker #3: Of this 66 percent, 35 percent is linked to the repo rate and 31 percent is linked to MCLR. So basically, there is an increase in the repo rate.

Speaker #3: There can be some impact, but we have also accounted for the risk. It's just that the impact is likely to be, or not be, 6 percent.

Speaker #3: So that also will not be a major impact in terms of maintaining the means or the spreads.

Speaker #2: Thank you. And best wishes.

Sukriti Deepak: Thank you, and best wishes.

Sukrit Deepak: Thank you, and best wishes.

Speaker #3: Thank you.

Speaker #2: Yeah. Thank you.

Speaker #1: Thank you. Our next question comes from the line of Ankit Shah from White Equity Investment Advisors. Please go ahead.

P. Balaji: Yeah, thank you.

Balaji Parthasarathy: Yeah, thank you.

Moderator: Thank you. Our next question comes from the line of Ankit Shah from White Oak Capital Management. Please go ahead.

Operator: Thank you. Our next question comes from the line of Ankit Shah from White Oak Capital Management. Please go ahead.

Speaker #2: Thank you for taking my question, sir. Our calling home loan LAP has been growing faster than the home loans over the last year or so.

Ankit Shah: Thank you for taking my question. Sir, our quasi-home loan, LAP has been growing faster than the home loans over last year or so. Have we optimized lending rates more in that segment? What is the reason for this higher growth rate?

Speaker #2: So, have we optimized lending rates more in that segment, or what is the reason for this higher growth rate?

Speaker #3: Are we talking about the housing loans?

P. Balaji: You're talking of the housing loans?

Balaji Parthasarathy: You're talking of the housing loans?

Speaker #2: Yeah.

Ankit Shah: Yeah. The optimized rates.

Speaker #3: Yeah, and the optimization. Yes, we have optimized on certain ticket prices, and we did that not so long ago—in April only—and that too, only for incremental housing loans.

P. Balaji: Yes, we have optimized for certain ticket sizes and that too in HFC only. Yeah, in HFC only, and that too only incremental housing loans.

Balaji Parthasarathy: Yes, we have optimized for certain ticket sizes and that too in HFC only. Yeah, in HFC only, and that too only incremental housing loans.

Speaker #2: Yeah. So the question was, our LAP is growing faster than housing loans. So what would be the reason for that?

Ankit Shah: Yeah. The question was, our LAP is growing faster than housing loans. What could be the reason for that?

Speaker #3: Well, if you look at it, last year our HSB lower book grew by 18%. And NDFT lower book grew by 29%. Now, in this quarter, HSB lower book has grown by 20%.

P. Balaji: If you look at it, last year, our HFC loan book grew by 18% and NBFC loan book grew by 27%. Now in this quarter, HFC loan book has grown by 20% and NBFC loan book has grown by 24%. We'd like to concentrate more on the housing finance and grow that book. Also concentrate on the NBFC by introducing new products and also the existing product score.

Balaji Parthasarathy: If you look at it, last year, our HFC loan book grew by 18% and NBFC loan book grew by 27%. Now in this quarter, HFC loan book has grown by 20% and NBFC loan book has grown by 24%. We'd like to concentrate more on the housing finance and grow that book. Also concentrate on the NBFC by introducing new products and also the existing product score.

Speaker #3: And NDFT loan book has grown by 24 percent. So we would like to concentrate more on housing finance and grow that book, and also concentrate on NDFT by introducing new products and also improving on the existing product score.

Speaker #2: Sir, my question was on the parent company side only. Within the parent company, between the home loans and the Cozy Home loans, or LAP.

Ankit Shah: Sir, my question was on the parent company side only. Within the parent company, between the home loans and the quasi-home loans or LAP. LAP has been growing faster than the home loan product. I'm asking for the reason for this difference, not the NBFC.

Speaker #2: So, LAP has been growing faster than the home loan product. So, I'm asking for the reason for this difference—not the NBFC.

Speaker #3: No, correct. But that Cozy Home loan has a lower base, so that base of it will always be there, right?

P. Balaji: No, correct, the quasi-home loan has a lower base. That base effect will always be there. Similarly, the fourth category, HFC is smaller.

Balaji Parthasarathy: No, correct, the quasi-home loan has a lower base. That base effect will always be there. Similarly, the fourth category, HFC is smaller.

Speaker #2: Okay, my second question is a simple booking question. In the past, we've been giving the advances split in the IP in absolute numbers. This time, we have changed it to percentages.

Ankit Shah: My second question is a simple booklink question. We've, in the past, been giving the advances split in the IP in absolute numbers. This time you have changed it to percentages. Because of this, Odisha and Maharashtra numbers are looking a little off. Can you give the absolute split of the advances?

Speaker #2: So, because of this, Odisha and Maharashtra numbers are looking a little off. Can you give the absolute split of the advances?

Speaker #3: I mean, I can ask Amit to contact you and give you the exact numbers on the state rates, lower book. Actually, if you just work out the percentages, it will come.

P. Balaji: I can ask Amit to contact you and give you the exact number on the state wide loan book. Actually, if you just work out the percentages, it will come. Original loan book in Maharashtra and Odisha, INR 162 crores.

Balaji Parthasarathy: I can ask Amit to contact you and give you the exact number on the state wide loan book. Actually, if you just work out the percentages, it will come. Original loan book in Maharashtra and Odisha, INR 162 crores.

Speaker #3: What is the loan book in Maharashtra and Odisha? 162 crores. Yeah, put together. Put together, Maharashtra and Odisha. Now, we have talked about about 1.2 percent.

Ankit Shah: Yeah.

P. Balaji: That is correct. Put together. 16 in Maharashtra and Odisha, now we are fresh about INR 160 crores. Which is about 1.2% down only.

Balaji Parthasarathy: That is correct. Put together. 16 in Maharashtra and Odisha, now we are fresh about INR 160 crores. Which is about 1.2% down only.

Speaker #2: Okay, this is helpful, sir. Sir, my last question is: the difference between the AUM and the advances has dropped by ₹115 crore in this quarter.

Ankit Shah: Okay. This is helpful, sir. Sir, my last question is, difference between the AUM and the advances has dropped by INR 115 crores in this quarter. What could be the reason for this?

Speaker #2: What would be the reason for this?

P. Balaji: What? Difference between?

Balaji Parthasarathy: What? Difference between?

Speaker #3: What? Difference between?

Speaker #2: The difference between AUM and the advances book—that used to be ₹1,175 crores.

Ankit Shah: The difference between AUM and the advances book. That used to be INR 1,175 crores.

Speaker #3: Yeah, you are right. Yeah, it's basically 13,648 minus 12,691. It's almost 957 crores. Basically, the assignment is what we have done.

P. Balaji: AUM and assignment.

Balaji Parthasarathy: AUM and assignment.

Ankit Shah: Yeah.

P. Balaji: It is basically INR 1,368 minus INR 1,161, which is almost INR 957 crores.

Balaji Parthasarathy: It is basically INR 1,368 minus INR 1,161, which is almost INR 957 crores.

Ankit Shah: Since then.

P. Balaji: After this, basically the assignment is yet to be done.

Balaji Parthasarathy: After this, basically the assignment is yet to be done.

Ankit Shah: Yeah. If we do assignment.

Speaker #2: Yeah. So, if we do the assignment—yeah—so if we do the assignment... so, yeah. Okay.

P. Balaji: Yeah.

Balaji Parthasarathy: Yeah.

Ankit Shah: If we do assignment to Yeah, okay.

Speaker #3: So because of this—no, no, one second. Let me clearly tell you. If you do a direct assignment, that gets added in the asset center management.

P. Balaji: No, one second. Let me clearly tell you. If you do a direct assignment, that gets added in the assets under management, but it gets out of the balance sheet assets.

Balaji Parthasarathy: No, one second. Let me clearly tell you. If you do a direct assignment, that gets added in the assets under management, but it gets out of the balance sheet assets.

Speaker #3: But it gets out of the balance sheet assets.

Speaker #2: Right.

Ankit Shah: Right.

Speaker #3: Next thing is, if the balance sheet asset also gets reduced by the ECL provision, and also the processing fees that are yet to be recognized, okay?

P. Balaji: Next thing is, the balance sheet assets also get reduced by the ECL provision, and also the processing fees that is yet to be recognized as revenue. Okay. Both are the causes for the difference.

Balaji Parthasarathy: Next thing is, the balance sheet assets also get reduced by the ECL provision, and also the processing fees that is yet to be recognized as revenue. Okay. Both are the causes for the difference.

Speaker #3: So those are the costs for the difference.

Speaker #2: Got it. Thank you for taking my question.

Ankit Shah: Okay. Got it. Thank you for taking my question.

Speaker #1: Thank you. Next question comes from the line of Rajiv Mehta from Yes Securities. Please go ahead.

P. Balaji: Thank you.

Balaji Parthasarathy: Thank you.

Moderator: Thank you. The next question comes from the line of Rajiv Mehta from YES SECURITIES. Please go ahead.

Operator: Thank you. The next question comes from the line of Rajeev Mathur from YES SECURITIES. Please go ahead.

Speaker #2: Yeah. Hi. Hi. Thank you for allowing the follow-up. Sir, just two questions. First, on trade cost, your guidance of 50–60 basis points for the whole year.

Rajiv Mehta: Yeah. Hi. Thank you for allowing a follow-up. Sir, just two questions. First, on credit cost, your guidance of 50, 60 basis points for the whole year. I just want to understand from two perspectives. One is this write-off. You said that you have started doing aggressive write-off, so is this an acceleration of policy, and would this remain an ongoing policy of write-off? Second, when you look at stage 1 provision also, you've drawn down from that provision of stage 1, and now it is 24 basis points. It used to be 40 basis points 6, 7 quarters back. How should we look at your credit cost guidance in view of how the write-off policy will happen, and how the stage 1 provision coverage will be maintained going ahead?

Speaker #2: Just want to understand from two perspectives. One is this write-off—you said that you've started doing aggressive write-offs. So, is this an acceleration of policy?

Speaker #2: And would this remain an ongoing policy of write-off? And second is, when you look at stage one provision also, I mean, you've drawn down from that provision.

Speaker #2: Of stage one. And now it is 24 basis points. It used to be 40 basis points, six or seven quarters back. So how should we look at your credit cost guidance in view of how the write-off policy will happen?

Speaker #2: And how will the Stage 1 provision coverage be maintained going ahead?

Speaker #3: What is happening? First of all, this credit cost at 0.6 percent will be maintained for the year. And regarding the stage one provision, which has got reduced, basically, the behavior of the customers in terms of repayment in the stage one category has been very good as per the ECL model.

P. Balaji: What is happening, first of all, this credit cost at 0.6% will be maintained for the year. Regarding the stage 1 provision which has got reduced, basically, the behavior of the customers in terms of repayment in the stage 1 category has been very good as per the ECL model. That's why this percentage coverage has got reduced from say 0.3% to 1.7%. Whereas we saw some deterioration or some increase in the stage 2 assets, we increased the provision coverage there. That's the whole logic.

Balaji Parthasarathy: What is happening, first of all, this credit cost at 0.6% will be maintained for the year. Regarding the stage 1 provision which has got reduced, basically, the behavior of the customers in terms of repayment in the stage 1 category has been very good as per the ECL model. That's why this percentage coverage has got reduced from say 0.3% to 1.7%. Whereas we saw some deterioration or some increase in the stage 2 assets, we increased the provision coverage there. That's the whole logic.

Speaker #3: And that's why this percentage coverage has reduced from, say, 0.3 percent. Whereas, since we saw some deterioration or some improvement in the stage two assets, we increased the provision coverage there.

Speaker #3: That's the whole logic.

Speaker #2: And on the write-off, is there—I mean, have you switched to a policy of doing it?

Rajiv Mehta: On the write-off, have you switched to a policy of doing?

P. Balaji: That policy will continue. Of anything more than 500 days will get written off.

Balaji Parthasarathy: That policy will continue. Of anything more than 500 days will get written off.

Speaker #3: This policy will continue. For anything more than 500 days, we'll get a refund.

Speaker #2: Okay. 530 DPD, right?

Rajiv Mehta: Okay. 530 DPD, right? Okay.

Speaker #3: Okay.

Speaker #2: Yeah, got it. And just on collectors—you said 8% contribution in disbursement. So, two things: what is the number of collectors right now, and what can the number go to?

P. Balaji: Yeah.

Balaji Parthasarathy: Yeah.

Rajiv Mehta: Just on collectors, you said 8% contribution in disbursement. Two things, what is the number of collector right now? What can the number go to? Also their proportion in disbursement, maybe say next year.

Speaker #2: And also, they are supposed to be in disbursement—maybe say next year.

Speaker #3: Well, actually, right now we have got across 333 branches. We have around 1,000 connectors, averaging 3 to 4 connectors per branch.

P. Balaji: No, actually, we have got right now across 333 branches, we have around 1,000 collectors. Average three to four collectors per branch.

Balaji Parthasarathy: No, actually, we have got right now across 333 branches, we have around 1,000 collectors. Average three to four collectors per branch.

Speaker #2: Okay. Thank you.

Rajiv Mehta: Okay. Thank you.

Speaker #1: Thank you. Our next question comes from the line of Shubhi Gupta from 3Net Asset Management. Please go ahead.

Moderator: Thank you. Our next question comes from the line of Shubhi Gupta from Girik Capital. Please go ahead.

Operator: Thank you. Our next question comes from the line of Shubhi Gupta from Girik Capital. Please go ahead.

Speaker #4: Hi, sir. Thank you for taking my question. I'm sorry if this has already been answered. Sir, if you could just give me the breakdown of the slippages that have occurred?

Shubhi Gupta: Hi, sir. Thank you for taking my question. I'm sorry if this has already been answered. Sir, if you could just give me the breakdown of the slippages that have occurred.

Speaker #3: What are the slippages? I'm not able to understand your question.

P. Balaji: What is the slippage? I'm not able to understand your question.

Balaji Parthasarathy: What is the slippage? I'm not able to understand your question.

Speaker #4: So, any slippage that has happened in this quarter, and if you could give me any breakdown for this?

Shubhi Gupta: Any slippage that has happened in this quarter, and if you could give me any breakdown for this.

Speaker #3: Yeah. Slippages, that's what we have told. Stage two, from 6.21 percent in March, has gone up to 6.87 percent. And NPA has also gone up from 1.52 to 1.7 percent recently.

P. Balaji: No, slippage is that what we have told. Stage 2 from 6.21% in March has gone up to 6.87%. NPAs also gone up from 1.52% to 1.7%, increase in NPA, which is in credit cost format, which one becomes slippage. I'll give the number to you, maybe tomorrow.

Balaji Parthasarathy: No, slippage is that what we have told. Stage 2 from 6.21% in March has gone up to 6.87%. NPAs also gone up from 1.52% to 1.7%, increase in NPA, which is in credit cost format, which one becomes slippage. I'll give the number to you, maybe tomorrow.

Speaker #3: I'll give the numbers to you.

Speaker #4: Sorry, sir?

Shubhi Gupta: Sorry, sir?

P. Balaji: No, the numbers will be given to you. You may contact our investor relations with Amit. He is able to give the number.

Balaji Parthasarathy: No, the numbers will be given to you. You may contact our investor relations with Amit. He is able to give the number.

Speaker #3: So the numbers will be given to you. You may contact our Investor Relations, Mr. Amit. He'll be able to give you the numbers.

Speaker #4: Okay, sir. Okay, sir. Thank you.

Shubhi Gupta: Okay, sir. Thank you.

Speaker #1: Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks.

Moderator: Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you. Over to you, team.

Operator: Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you. Over to you, team.

Speaker #1: Thank you. And over to you, team.

Speaker #3: Yes. Thank you, everyone, for attending the con call. I would like to express my sincere gratitude to all analysts and investor friends for taking the time to listen to us today.

P. Balaji: Yes. Thank you, everyone, for attending the con call. I would like to pay my sincere gratitude to all analysts, investor friends for taking time and for listening to us today. Please feel free to contact us if you have any further queries. Thank you.

Munuswamy Anandan: Yes. Thank you, everyone, for attending the con call. I would like to pay my sincere gratitude to all analysts, investor friends for taking time and for listening to us today. Please feel free to contact us if you have any further queries. Thank you.

Speaker #3: Please feel free to contact us if you have any further queries. Thank you.

Speaker #1: Thank you so much, Mr. Anandan. Ladies and gentlemen, thank you for being a part of the conference call. If you need any further information or clarification, please email amit.singh@aptusindia.com.

Moderator: Thank you so much, Mr. Anandan. Ladies and gentlemen, thank you for being a part of the conference call. If you need any further information or clarification, please email at investorrelations@aptusindia.com. Ladies and gentlemen, this concludes your conference for today. Thank you for using First Call Conferencing Services. You may now disconnect your lines. Thank you and have a pleasant day.

Operator: Thank you so much, Mr. Anandan. Ladies and gentlemen, thank you for being a part of the conference call. If you need any further information or clarification, please email at investorrelations@aptusindia.com. Ladies and gentlemen, this concludes your conference for today. Thank you for using First Call Conferencing Services. You may now disconnect your lines. Thank you and have a pleasant day.

Speaker #1: Ladies and gentlemen, this concludes your conference for today. Thank you for using Coast Call Conferencing Services. You may now disconnect your lines. Thank you, and have a pleasant day.

P. Balaji: Thank you.

Munuswamy Anandan: Thank you.

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Q1 2027 Aptus Value Housing Finance India Ltd Earnings Call

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