Sir, just 2 clarifications. One is, you spoke about a INR1,500 crores line from NHB, which we had not availed because the AHF component was much smaller. So just wanted to understand, typically, July to June is the cycle, right, for NHB?
So this sanction that we are speaking about, was it for last year? Or is it for this year?
So thank you and good afternoon to you all, so just wanted to understand that this has indeed been a good quarter. But if I loo k at the disbursements that we've been doing quarterly, very clearly, right, I mean, there is still a YoY growth that we see. So just trying to understand are there products, customers that we were doing maybe one year back that we are not doing now, right, is something I wanted to understand? That is there room for further acceleration in the disbursement momentum? Or, I mean, have we stopped doing certain product segments, which led to much stronger disbursement momentum in the last fiscal year? And so ju st a related question, I mean, is it then kind of safe to assume now that whatever challenges we had seen after the Ambala fraud, none of those things, none of the process level changes, none of the system technology changes that we were doing are now impa cting the business momentum?
So then maybe because you spoke of IT investments on a continuing basis. This quarter, there was a little elevated other opex that you report. So I mean, are there any one-offs there? Or have we kind of front -loaded some of the investments that we talked about in the past? Because I remember in the recent past, you have been guiding at slightly higher opex trajectory whether we look at cost to income or fixed assets?
Good evening everyone. Suresh Sir, I had a question. Somewhere during this call you had guided for Rs.12000 Crores of disbursement next year and 20% kind of CAGAR , so just trying to understand that subsequently while you were answering other participants in the call, did you say that loan growth of 15% or rather still trying to say that we are looking at a 20% loan CAGAR so that the loan book doubles in the next four years?
Essentially next year, the growth could be lower than 20%, but over next three to four years, CAGR basis you are looking at 20%?
Sir, congratulations on a good quarter. Sir, first thing is, I mean, in your stand -alone book, the non-gold portion of the book, I mean, I think it's on a very low base, growing very, very fast. So just wanted to understand, I mean, in addition to a salari ed personal loans, what other products are we doing there? And what is the yield maturity of these loans? Also, I mean, the product of personal loans that is often bundled with the gold loan, is it also sitting in the stand-alone book?
Got it. Sir, but almost INR3,000 crores of non-gold book that we have in the stand-alone region that is unsecured, right, largely unsecured?
Sir, first question is on this ARC receipt transaction that you have done. In the notes to your financial statements, you have said that the outstanding revenue of the SR receipts have declined from 595 crores last quarter to about 228 crores or 230 crores as on December. So, sir, if you could just explain, I mean, how is this working? I mean , essentially, when the ARC goes ahead and does the auctions or when you do the auctions, it will reflect as a decline in the SR receipts, is it?
Oommen sir, like you said, whenever these outstanding SR receipts become zero, at that point in time, whatever extra is collected will be classified as income. Because from what I recall, this ARC transaction last quarter was done at par. So, you have received the entire principal.
Sir, I mean I think you've asked -- answered this question a couple of times that, I mean, this ARC sale was done to kind of manage the NPAs, and the fact that, I mean, you are not at a loss, even if there are NPAs. Just wanted to understand, sir, why are these slippages happening? Why is it that customers -- and so many customers not kind of able to repay their gold loan at the end of 12 months, not able to pay them at the end of 15 months and subsequent to that, they become an NPA. I mean what is the underlying stress out there, which is not allowing customers to kind of repay their principal and interest and take their gold jewelry back?
So essentially, the cash flow issue that the customers have is much more pronounced today vis- a-vis what they used to be past because if you just look at the NPA numbers, I mean they are alleviated versus what they used to be in the past.
Again, congratulations, I think, I mean, this has been a good quarter for us, except for maybe some one-offs and maybe slightly higher write-offs. Sir, I mean I had 2 questions here. NIM is something that we are kind of trying to wrap our heads around. I m ean as a franchise, we were not a business model which big NIMs in excess of 3%. If you could help us understand what is it that has changed in the last 1 year that is allowing us to deliver these kind of NIMs, given that if you look at t he sectoral level across HFCs, there seems to be some transient pain, which is there in the margins. Yields have largely maxed out. Cost of borrowing continues to rise. So that is one thing if you can help us understand as well as kind of supplement it with your NIM outlook for the next year. That is one. And the other thing is sir, I mean, your Stage 3 has kind of declined by almost INR2,500 crores. You just explained in your opening remarks that about INR1,100 crores of technical write-offs that you took during the quarter. So where is the other, I mean, decline that we have seen in Stage 3, Stage 2? There were more organic resolutions during the quarter.
Got it. Sir and just one follow -up question on that. I'm just trying to understand this better. So what you just explained I mean, resolution of high -ticket cases and you were able to collect interest on that, and the same thing that is seen on the liabili ty side, we seem to have benefited and maybe done better than many of our peers. So what we suggested this NIM improvement that we have seen in FY '24 is more structural in nature, is the conclusion that I just wanted to draw. And sir, the other question that I had was on the asset quality bit. If I kind of just look at our credit cost for the last maybe 3 years, 4 years post COVID, you lean a little bit on the higher side. I mean, must compliment you versus maybe FY '22, '23 le vels. You have declined in FY '24. So now, I mean, are we going to see that same trajectory, what you guided earlier, maybe 60 basis points in '24 moving towards more 40, 45 basis points for the next couple of years. And sir, if you can also give that segmental NPA breakup that you've given.
Sir, congratulations on a good quarter. I think the only thing where we are a little worried is the growth is not kind of coming in. In your opening remarks, I think you explained some organization-level changes that you've done in the first and second quarter. So just trying to understand, is it just temporary where because of our internal problems the disbursements are not accelerating? Or would you say that even at the sectoral level in mortgages, the demand is a little weak, and to that extent, the competitive intensity from, I mean, banks or some other large HFCs is very high, which is where maybe we took that conscious decision of not kind of growing or disbursing at lower interest rates and so they have impacted your margins ? So that's the first question that I have, sir.
Thanks for that honest answer. Sir, just wanted to understand the thing was on, again, asset quality. I mean , when I kind of look at our provisioning cover, it tends to remain volatile. I mean there are quarters where we see the provision cover coming down. There are quarters where we can see it going up. So I mean, just a limited request if you can have some st ability around just provisioning covers. And sir, lastly, just wanted to understand, from what I recall, we were planning to get into discussions with some ARCs for resolution in your project loans to co -develop loans book. Had this seen any progress? And a related question, if you, too, sir, can help us with the segmental gross NPA across the 4 segments that we have? Thank you, sir.
Congratulations, Manoj and Nutan. Let me congratulate on another good quarter for you and the team. I had just three questions. First one for Nutan, how should we look at cost of borrowings trending? I think you've guided that in 1 -2 quarters, it is going to stabilize. Where are we now in terms of the outlook on cost of borrowings.
Manoj, if I look at the BT Out rate until last year, the number which used to be in the ballpark of 6%, right? Suddenly seems to have moved in this year to 7.5% to 8%. Is there anything you are seeing there? Because you've seen in the past, as organizations grow and mature and other lenders, have more comfort on your originations, the appetite to take the balance transfers of other institutions go up. Anything that you're seeing there on balance transfers?
Congratulations on a good quarter. Sir, just one question. Just trying to understand wherein the presentation also we say that some bit of the PAR accretion that we are seeing is happening because of stronger growth outside our core states and you also suggested that as part of this , increase in our credit cost guidance, some bit of it in terms of higher write-offs is going to come from our growth in the noncore states. So, if you could just provide some more texture with regards to particular states where you are seeing that the PAR accretion is higher or is the credit behavior of your noncore state customers very different from your core state customers?
But then any particular reason? Typically sir, most of the lenders talk about the ECL.
Thank you and good evening, everyone. Sir, just kind of circling back to the cut that we have done in the lending base, about 50 bps. I'm sure you would have followed that I mean, another NBFC shared yesterday that they have also cut their lending rates by 50 bps. So understandably, you have said in your opening remarks as well as in your presentations, why you did that and the pricing policy, which is in place. Just wanted to kind of reconfirm that. I mean, all the noise around RBI saying that the kind of net interest margins and eventually even ROAs that MFIs are making, there's not been any even soft communication from the RBI, right, which is prompting lenders to review their lending rates?
Okay. Sir, my second question was on I mean, again asset quality . You have articulated the impact that was there from the Tamil Nadu floods. But what we have recently started hearing is that MFI players are kind of also looking at calibrating their business growth in a few states. So, for you outside Karnataka, so non -Karnataka, non -Tamil Nadu states, are you seeing higher PAR in particular states where delinquencies are higher and you are maybe looking to calibrate your growth in some of those states if you can speak about a few states if at all?
First, because we were kind of just discussing the fraud, I just wanted clarification, this Rs. 136 crores, has it been classified under GS3 now given that you just said that they were Stage-1 loans, have they been classified under GS3 and 100% provided for?
And sir again, just a clarification, while you explained that there was, like you said, extreme collusion that happened between multiple stakeholders, do you think in hindsight this collusion could even have been avoided had there been centralized kind of a check in terms of someone verifying the KYC document s of customers, vehicles and registration documents of vehicles , someone in a more centralized setup, could this have been avoided?
And again, thank you for providing the enhanced disclosures on that to your businesses. So, I just wanted to kind of take forward what you commented on OPEX. Sir, very clearly, I mean, if I look at the fourth quarter, employee expenses are almost 100% year -over-year. You just explained there are some annual incentives also. So, I just wanted to understand whether the annual incentives are always there in the fourth quarter, or if we kind of keep providing for it in all the four quarters. And maybe a related question here on OPEX is, I mean, very clearly some of the newer businesses, because we were in investment mode over the last two years, were a drag, I would say. But now, how do you see economies of scale in the newer businesses, especially on the OPEX? Arul sir, you have already guided that you want to stick to that 3% OPEX to AUM, but just some more color there will be helpful.
Sir, I think, it was more on the OPEX again. Arul sir, you already guided that there were some annual incentives and CSR expenses, and that for the next year also we want to stick to a 3% OPEX to AUM. Just wanted to understand a lot of the drag on the OPEX, especially in employee expenses, could also have been coming from the newer businesses, given that we are expanding it to a greater number of branches. Just wanted to understand, I mean, for how long will remain in this investment mode in the newer businesses? What is the thought process there? Do we want to offer these three products, C SEL, SMEL, SBPL, across all our branches , is what I was just trying to understand. Just some more color there on the OPEX.
I have two questions. The first one is for Ravi sir. I just wanted to understand what is the view on the vehicle cycle now? You have in the past explained that it is only when push shelling starts to happen is where we start looking at maybe a downward trajectory in the vehicle cycle. Where are we in the cycle today? Whether we talk about passenger vehicles ? I mean, we often keep hearing that the discounts are going up now, especially passenger vehicles. If you could just briefly elaborate on your view on both passenger vehicles and commercial vehicles?
Sir, my last question was on the margin trajectory in vehicle financing. I mean, having said that, we have already seen some rise in the cost of borings in this quarter. So, two sub parts to this question. One is, how do we look at the cost of borrowing spending for the next few quarters? And assuming the status quo on rates, how do we look at cost of borrowings for next year? And given that our vehicle book will kind of continue to reprice , how do we look at margins in the vehicle financing book?
Sir, again, just briefly touching upon these newer businesses and the CSEL segment, you have already explained that a large part of it is coming from partnerships. So, somewhere during your commentary, you also said that you are taking some corrective actions . So, just wanted to understand have you made any changes in our approach or strategy in the CSEL segment?
Large part of the issue coming from partnerships?
Congratulations to the Aavas team for a strong quarter. Just maybe one or two questions, just to explain about the tech transformation. Just wanted to confirm what are those elements of tech transformation which are pending or still in pipeline for this current fiscal year? Why I am asking this is, I mean, is there anything that you foresee in the coming quarters as a nd when we implement the remaining portion of the tech transformation, something which can really disrupt the disbursement trajectory that we saw in the fourth quarter?
And lastly, how should we think about assignment volumes? Basically, we will appreciate assignments along with it in the assignment income, which can lead to some volatility in the P&L. So, how are we thinking about assignments for the next fiscal year?
Sir, first question on disbursements. In the first quarter earnings call, you had shared that large part of the teething issues were behind and things have stabilized in June and June disbursements had grown 17% year -over-year. Sir, but if I look at the second quarter disbursements, they are up just about 10% year-over-year. So what would you attribute this to? Is it that mortgages, especially low er ticket size is going through some kind of a slowdown? Or would you say that this could be the lagged impact of the withdrawal of the CLSS subsidy? Or is it just the competitive landscape, which is attributing to this sluggish disbursement growth? If no ne of these, was it again from teething issues from the digital transformation, which led to lower disbursement growth?
Got it, sir. So by the end of this year, you're suggesting this digital or technology transformation will be completed, including the LMS and the ERP?
Sir, if you look at the gold loan yields that we report, I think in the last two quarters each, it has gone up by 50 basis points. And just trying to understand, understandably second, third quarter are weak quarters for gold loan growth. But what is it that we are doing, which is leading to this kind of an increase in yields in gold loans? And maybe a related question, I mean, with this gold loan yields now going up, is it then fair to assume that what we keep sharing in the last few calls that competitive intensity from banks is coming down is indeed playing out?
Got it. Got it. So essentially, 8% to 10% growth in Gold Loan still possible essentially implies that after two quarters of weak gold loan growth, we are now kind of looking at a good gold loan growth coming in the last quarter of the fiscal year?
Sir, first, if you could help understand what are the one -offs on the interest income line in this quarter?
So, this was, I mean, a negative impact on your interest income.
Yes, thank you. Good afternoon, everyone. So, the first one is on microfinance again. I've seen that you've calibrated your growth a little bit given that we were already growing at a very, very strong clip. So, I mean, is this, I would say sequential decline in disbursements that we've seen in this quarter a conscious strategy or how should we look at it?
Got it. So, where are we tightening things in microfinance? Because, I mean, the ticket sizes are largely the same?