Yes, yes. You want to ask second question or?
You can finish your questions.
Questions across 4 calls
Umesh Revankar
Firm not listed in source transcripts
Shriram Finance Limited
Chintan, to add to that, there will be some upsurge in used commercial vehicle and even passenger vehicle maybe in the next fiscal, '27 because the new vehicle cycle has started in '22. And that to come into the market and having a larger market will take a little time. So right now we are growing at around 12% to 15%. But maybe in a year or two that growth rate can further improve as the market expands.
See it is not affected I should say. It is basically adjustment time, because industry is undergoing some adjustment. And maybe temporarily customers may go into a pawn broker for raising money, which is temporary. But everything will come back because all the industry is adjusting. And everyone has been the same wicket. So that will help actually. I feel the industry will go faster post this adjustment. So that will be helpful. And also we are adding more branches to gold lending, because as Chakravarti rightly put it, each of the branches need a certain kind of security requirement to start gold loan. As we add more number of branches, the growth will come back.
Can I ask on a few different areas? So, first question would be that we are seeing slippages and gross stage 3 loans increasing kind of for multiple players in the sector. What would you say is the reason that you haven't seen a similar deterioration? This slippage has actually improved as a percentage. It is a 5.3%. Just trying to understand why it has improved, but everybody else is seeing a deterioration. As a industry, if you look at, there are deterioration in certain geographies and certain segments. Mostly, as RBI has been talking, unsecured loans, MFI loans, and that too in certain geography, there has been higher slippage. I feel it is basically the local economic activity being a little weaker. That could be the reason.
There were some fees paid in the current quarter due to increased two-wheeler and other loans wherein which was sourced through the direct sourcing agents. And there were also some costs incurred on our branding front, so apart from these it was a normal increase. Do you think we shouldn't expect similar increases in the next few quarters? Yeah, it will not be to this level, but there will be some increase, no doubt. Some inflation, okay. And then finally, a quick one, how do you think asset quality and cost of risk trends develop over the next 6 to 12 months? What do you see in your portfolio that gives you reasons to what are the risks that you see and what are the trends that you see in your portfolio? We don't really see any further improvement in our asset quality. There may not be anything adverse now because the economic activity being very strong, the foundation of the country is very strong and government spend on infrastructure is likely to improve in the next 2 quarters. That will help the economic activity to improve. And the festive period with good monsoon and good kharif crop, better MSB price, all are likely to be very positive for next two quarters. I don't really see any possibility of deterioration. So, we are targeting to improve our stage three to around 5% level.
See the net interest margins have improved. One is the liquidity which we are maintaining at 4- 5 months, now it has got down to 3 months, that is negative carry is reduced. That is one of the reasons and also the certain products which gives higher yield, we have been able to increase it that also has given, so the product mix and reduction of the negative carry that is the reason for the expansion of the NIM. It should continue depending upon the product mix what we lend that is one. And on CV we have grown 12%. In fact, if you recall, we have been telling that CV will continue to grow between 12 % and 15% and the other products will grow faster. That is the strategy we have adopted, and we are going as per the strategy. So, CV will continue to grow and continue to remain mainstay, but the other product will c ontinue to grow faster, but here if you observe the passenger vehicle have grown faster, so it is between the passenger and CV, the passenger has taken a little faster growth because of the bigger demand coming from Tier 2 and 3 towns for passenger vehicle s. So, overall, I feel the growth of all segments will continue to remain strong.
New CVs, we are taking a position on new CV. It has continued to remain reasonably strong. In fact, we started growing on new CV in the last quarter, then continued in the first quarter and now also it continued to grow, but it will not be a significant number in the overall scheme.