First question is from the line of Renish Bhuva from ICICI Securities.

Congrats on a good set of numbers. Sir, just two questions. One on the medium-term strategy. I do understand you might have spent only 10 -15 days , b ut if you can just broadly guide us, how do you think about the sector's medium -term growth and where does Aavas stand in terms of growth the outlook? And maybe what is your aspirational growth target for FY27 and FY28? That's my first question, sir.

Thank you so much for that question. I'll take them separately. I'll take your second question first, which is long -term growth strategy. Our aspiration clearly is to consistently deliver 20% -plus AUM growth, largely to outperform industry. On your question of short - and medium-term growth, I think me and the team are very clearly focused on sharp execution of our already laid down strategies for growth. When I mean sharp execution, I mean the following which is: getting the product and customer suite along with its pricing right; second, looking at the channel composition today in the sourcing funnel and tweaking that for optimization. Third, we've invested in geographical expansion, and other than Rajasthan, getting the high potential states like Maharashtra, Gujarat, UP, Southern states quickly climb up to their potential because they are now well staffed; last but not the least, managing leakages, leakages in funnel, which is what do you source as login, sanction, disbursement, and is it weekly disciplined into an order which follows a particular pattern of percentages. All in all, sharper execution, resulting in consistency of performance and getting bo th product, channel and geographies into their right slots.

Got it. Now, just a follow -up on that . So where do you see ROE settling? I mean, execution obviously is also linked to yields, opex optimization, etc. From an exit 15% ROE, where do you see ROE also moving ahead?

So, as I mentioned on your second question, which is long-term growth strategy or if the question still pertains to the fact of long-term indications, I think high teens is where our eyes are very clearly set on ROE.

Okay. Got it. And sir, my second question is for Ghanshyam Sir. So, though we witnessed a Y-o-Y spread expansion, when we look at the sequential movement, it is down 15 basis points, largely due to PLR cut in March. But now, we also intend to further PLR cut of 10 basis points maybe in June? So where do you see ultimately spreads settling? Otherwise, ROA will again moderate in H1FY27.

Thank you for the question. As you see, on a full-year basis, we have come down 62 bps in overall cost of borrowing, and which is largely stabilizing at that level. And we reached a spread of 5.2%. As Manu mentioned, and along with all team, we talk about the right placement of product at the right price. So, that will help us going forward a slight improvement in the yield placement of product and cost of borrowing stabilizes at this level. We're very confident to maintain the spreads 5%+.

Okay. So , my observation is, with 15 bps PLR cut, yields are down 20 bps, which essentially means that the book yield is converging towards disbursement yield, which is lower as we have been highlighting. So just wanted to understand how your disbursement yields will move ahead, which will ultimately take care of your blended yields.

Thank you so much for articulating that clearly. I think that is well established with us. And going back to my previous answer, I would like to repeat that there is enough headroom to place the product on risk-adjusted pricing. We are in the assessed income group. Every transaction is unique. And hence, I'm confident of the fact, along with my team, that the right placement of the right product will help bridge this gap.

Next question is from the line of Kunal Shah from Citigroup.

So, a couple of questions on the growth side. You articulated aspiration to get towards 20%+. And we are seeing the network expansion. This quarter, again, larger part of the network expansion was in Gujarat, Tamil Nadu and UP, wherein we would have added like, say, 8 to 10-odd branches in each state. So, would that be the strategy maybe in terms of expansion? And we have seen almost flat branches in Maharashtra, MP and Rajasthan, maybe 3 branches getting added as such. So, do we see that a larger part of the expansion would be coming to these states in terms of the branches and even in terms of the incremental growth? So that's firstly on geography. And secondly, on the productivity side, maybe what are the initiatives we are taking incrementally just to ensure that productivity and maybe the disbursements per sales officer, that also inches up? So, if you can highlight in terms of what your near-term strategy would be in terms of inching productivity up?

Thank you so much for those two specific questions. To answer your first question on geography. Yes, we are continuously focused on adding branches in states like UP, Gujarat, Tamil Nadu, where we find the perfect balance of potential as well as risk, which we are ready to underwrite. So that's a balance to look at. So, we will continue doing that. On the second question of productivity, I'd like to answer that in a fork approach of two points. The first is, is RO enabled and understands what source, sources first time right, is assessed based on our risk adjustment assessment . And then, any flow -through, which is from login to sanction, sanction to disbursement, those handover gaps, at efficiency levels today, can be moved up 15%, 20% by concentrating on every branch productivity end-to-end and not purely looking at a bucket whic h is only either logi n or end result of disbursement. Secondly, it is important for us to rebuild the muscle, which is when I mentioned in the previous question about channel management, where this sourcing coming from into the funnel is. And hence, in a branch network where there is 10 -12 years of experience available for local market expertise, the muscle of direct business is a focus that all of us, together as management team, are going to continuously work upon, which reduces dependency or if I can say it, it kind of gives more control on consistency of what comes in and hence, what goes out. So those two would be my specific answers to these questions.

So, in terms of indirect sourcing, would we want to take that proportion up? Or maybe still the focus will be more on direct sourcing, as you mentioned, like since we have the control out there?

I'll answer that by saying and I'll give you an analogy on, say, for example, Rajasthan being our primary state. When we say that we are investing in other state does not mean I'm disinvesting in Rajasthan. And hence, similarly, when I look at and the team looks at channel management, it does not mean we degrow some channel. It's about rebuilding muscle into channels where we have direct control. So, it's largely about being very clear about focusing on direct and getting that muscle built up ag ain. Indirect continues the way it continues. It's an important part of the ecosystem. We value that part of the ecosystem. We just want to continue building our own strengths, which is direct sourcing through channels like CSC, develop our digital avenues, which is the website, our own app, which has a referral program. So, it's a step-by-step continual journey. But yes, I would pause the answer there for further questions.

Sure. And one last one with respect to yield. So , you also indicated in terms of risk - adjusted pricing to be optimized. So , have we started increasing yields in any of the product segments, any of the profile? How are we looking at it? And when would that journey start in terms of yield optimization? Has it been rolled out on, say, a pilot basis? And when do we see the full-fledged rollout of that happening?

So, as we speak, there is no better way to start a good deed than today. So, it has already started in the financial year. As I mentioned, it's a progressive journey that we have the expertise of underwriting risk very well. You've seen in the last many years that the quality of the book is pristine. And hence, our ability to buil d that muscle on risk - adjusted pricing across 435 branches is a journey which is already on its way. It's not something which has to be thought very differently. It's just about those boundary cases which need to be looked at, paused and focused to be got back to the core area that you serve. It's always the distraction of a business which becomes the attraction. And that is what me and my team are going to kind of -- we don't want to be distracted by attraction. We have core strengths. We must deepen them.

Next question is from the line of Abhijit Tibrewal from Motilal Oswal.

Just one question and maybe just trying to paraphrase what some of my friends earlier in this call have asked. If you look at the last 2 years, we grew below 20%. So, if you could, first, articulate where was the problem? When our peers with large balance sheets were able to grow upwards of 20%, why were we not able to grow? Was it an execution problem? Was it a competition problem? That is the first thing I wanted to understand. You have articulated product placement, geography, so if you could add some nuances around it in terms of channel, are we going to do more of DSA sourcing going forward? When you speak about geography, what are the plans to maybe add more states in Southern India? Could you just start with that?

Sure. I'll take the two questions one by one. The first is about your question about the past. Every human being, including me, becomes wiser in hindsight. So , I would start answering by saying at every point in time, my predecessors and the management team have done their best in those times. Times are different. Variables are different. Looking progressively ahead on growth, my response would go back to the earlier two questions that we are focused on not only looking at sustainable growth, we are also investing continually in geographies like South, Gujarat, UP, where we see potential balanced with quality of the book. So, my answer very clearly remains, this is a vastly untapped market. Growth rates are there. We must make sure that we assess it right, price it right for our growth. On your second question of sourcing, largely between direct and indirect sourcing, as I mentioned earlier, direct sourcing has always been the branch-driven model, and it has been our strength. We are attempting very quickly to rebuild. Don’t forget cycling even if you pick it up after many years. So, it's a strength that we have, and we are just going to polish it and double down on it. The second is, it's not about reducing channel partners. Channel partners are an important source of the ecosystem. We value them. We continue doing that. As I mentioned, if there ever have been, when I look in hindsight, if there are cases which are external to boundaries, cases which don't suit our NIM profile, we will try and make sure that we are not attracted by distraction. I hope I answered your question as I'm happy to have the question again.

Yes. That answers my question. And just one last thing. You spoke about right product at the right price. And maybe earlier in the call, you also said that there will be an effort to improve the yields at which we operate. So just trying to understand , Aavas, for at least the whole of its listed history, has been a franchise which has been very strong on asset quality. Credit costs have remained benign. Are we now planning to move to a slightly different customer segment or a product segment, which would mean while the risk-adjusted yields go up, or the yields go up, commensurately the risks also go up? And at the same time, I mean, we might see credit cost also inching up. Now, why I ask this is, in your press release, I remember reading that you continue to guide for less than 25 basis points in credit cost. Wherever we talk about a yield increase, there is a commensurate increase in risk as well. So just trying to understand that trade-off.

I'm very thankful to you for having picked this question. It gives me and my team a big opportunity to vehemently, assertively mention that increase in yield by no manner suggests increase of risk. I will repeat that, increase of yield by no standards equals mathematically to increase of risk. We take pride in the fact that our micro market knowledge is muscle exceptionally built over time. We continue to be very vigilant about it. We are not overconfident. But we are confident on the fact that our placement pricing, based on every individual case, has scope of improvement. And we have already started that in practice and are seeing some early results. Having said that, this is a journey. Nothing changes overnight. Overnight always has problems of breakage or the engine jamming. It's a journey. But yes, answering the question once again, we are not going to get into more riskier segments. We continue to maintain our guidance on credit costs.

Next question is from the line of Gaurav Khandelwal from JPMorgan.

I've got a couple of those. First one is a follow-up on the yield part. So, 20 bps decline in yields in fourth quarter, 15 bps on back of the PLR cut, but can I also understand the competitive dynamics in that? Is it largely a function of the other part of the yields declining because of competition being too high? That's one. And the other part to this question is, are you seeing some of the bigger HFCs now trying to enter some of the ticket sizes, ZIP codes that you operate in, primarily also because they are being pushed out from the prime mortgage side, so they're wanting to come into your ZIP code? Any thoughts around that, please?

I think Q4, the number which you are referring has an impact of reducing 15 bps PLR, which is effective on 1st of March. So, you can see a large impact, what you're referring to the number, is on account of that. And rest, obviously, this quarter is a good number, growth quarter where competition comes in this quarter. Everybody in competition wants to underwrite maximum business in that quarter. So, we also fall into the same category. But if you see larger picture for the full year or coming year, we have deep market presence, and we don't see a competition which has, let's say, impact on yield placement. It's more largely as Manu said, we have to be conscious while underwriting the case to have a right placement of yield on that asset.

Got it. And my other question is on your opex, if I look at cost to assets or cost to AUM, in last 3 years, that had been declining, but FY26, it's moved up again Y-o-Y. Where do we see this settle? I understand you are still investing in some of the new states and there's some branch expansion. But where do , on steady state, where do we see this number settling? And could you highlight some of the use cases on tech-led efficiencies that you've been talking about?

Yes, we agree with you. Our opex efficiency, in two years, continuously, had shown an improvement. This year, we had higher opex than last year. It has two factors: We have invested in the branch expansion, which has led to higher manpower because we firmly believe that we must invest in the branch expansion, which will give us a better growth momentum than what we have done in the past. So, we have invested there. And those branches will start to give the results in the next full year. And apart from that, the CVC came and brought a long-term retention plan of new ESOP and PSOP schemes basically, which has also given us some extra cost in the last full year basis. Thirdly, what we thought of, growth for which we have invested, we have missed that growth during the year. That has also had an impact on us because denominators are not there where we thought of, invested in the branch expense and people investment. We are hopeful and confident, along with the entire team, and Manu is also on Board now. So, we hope we will grow back in the next year, that will bring down our opex to AUM ratio. And we maintain that once we reach a double size of the balance sheet, it will be somewhere 2.75% opex to AUM ratio.

Next question is from the line of Raghav Garg from AMBIT Capital.

I have a few questions. One, see, when I look at your number of loans disbursed data, right, that disbursement value divided by the disbursement ticket size, for full year and even for the last 3 quarters, which is cumulative of Q2, Q3, Q4 because I think you had some problems in Q1, the volumes have not exactly grown. On a full year basis, the total number of loans disbursed are flat. And in home loans, in fact, you've declined on a Y-o-Y basis in terms of volume. What are you doing to improve that? Because I see that your employee base has expanded, your branch network has expanded and still the volumes are down. I just want to get some sense of that.

Thanks for that observation. It is very clear to us that this is an area of immediate attention for all of us . On which, as we laid down our FY27 plans, we've taken our numbers in April have been, for us, quite effective. There is also a slight change in the sense that realization of an instrument in the customers' banking account is now the order of the day. Some of these have now settled down very well. And hence, we see that progressively, the investments having been made in both people, as well as branches, along with our technology efforts, as I mentioned in the call earlier, sharper execution focus should start sweating these assets out. And productivity per person, as well as revenue per person deployed on the field, i s going to be a metric that we will track hawkishly ourselves against as we move quarter-to-quarter.

Understood. So, as you're saying that your volumes should increase and volumes, either per person or on a per branch basis should increase, ideally that should lead to better cost absorption, right, from a unit cost economics point of view.

Yes.

So then, what are you guiding for in terms of opex to assets or opex to AUM, whichever way you want to guide for? Sorry, if I missed that guidance, but generally, what kind of levels do you see yourself achieving there, not just for FY27, but on a steady state basis? Can it go below 3%?

I think on a 2-to-3-year platform, yes. We are shooting for something below 3%. However, as I mentioned, it's a journey. And this journey, both in terms of market, as well as either tailwinds or headwinds, will have some nuances quarter-to-quarter.

Understood. And how do you think about your ticket size strategy or ticket size segment? Because say, when I look at other mortgage loans, which are essentially all the non - home loans, there, the ticket size has increased quite substantially Q-o-Q and even on a Y-o-Y basis. So how are you feeling about your ticket size strategy going ahead?

So, from a strategic perspective, I don't think we are changing our customer segment or geographical segment by anything, including, and I'm repeating, at the cost of our credit understanding and credit cost guidance. ATS, both tactically and strategically, ideally should be moving only from an inflation perspective. The productivity lever is to be applied to the number of customers coming in and growth there. The advantage of the ATS should just flow into the P&L. That's a consequence, not a strategy.

Understood. Very clear. Just one more thing. Why are your overall repayment rates higher even though your BT out rate has declined? Why is that happening?

Sorry, I missed the question. Please, if you could repeat?

So, I'm asking when I look at your calculated repayment rate on an overall basis, it's about 20% versus 17.5% in Q4 of last year and 16.5% in Q3. Even though your BT out rate has declined, why have the repayment rates gone up?

This has 3 components. One important component which we keep monitoring month after month is balance transfer to, peer group, which is less than of our guidance. As a management team, we want to keep control at less than 6%. This year, also, we have closed at 5.5% on a full year basis. No doubt, customers sometimes get extra money, and they pay back , there's part closures or, extra EMI they pay. Only largely on that account, we have slightly higher repayment during this year. Otherwise, balance transfer to BT, very much in control, which is less than 6%, very precise for this year, 5.5%.

Understood. So essentially, it's just customer prepayments.

Yes, because customers can get extra money. They want to pay more EMIs or part payments, which we accept.

Next question is from the line of Shreepal Doshi from Equirus Securities.

My first question is on technology and digital platform that we have developed over the years. So, do you feel that there is further investment required on that front to make it more aligned with the industry requirement and to bring down debt and then also smoothen the overall functioning?

No. We have made a good investment in the sales force, as well as the life cycle management, Oracle FLEXCUBE. Then we have best -in-class Oracle ERP system with Fusion. All I think, most of the capitalization has been done. We do not see any further investment in the entire module. Yes, one of the collections is one of the best we have seen in last so many years, 1-day past due, and as well as collection . But we want to have a more technology -driven collection, which will bring down our per unit cost down. So, we have some investment we'll make in the collection software, but which is not so material amount. Yes, what we've invested, it will need some small investment every year like AI, GenAI, need to further sharpen our underwriting, acquisitions, collections and which will save us some other cost also basically, opex, which we've invested here some amount, that will save some other opex, manpower opex, manpower efficiency, bring the savings in that company.

So, nothing major as such on the tech and digital side. The majority of our opex will be towards branch expansion and network expansion broadly, right?

Yes.

Got it. The second question was pertaining to how you are seeing the ground trends in terms of business momentum, as well as bounce rates, delinquency in the early part of 1Q? And how are we sort of planning or positioning ourselves to face the unfolding situation because of the Middle East war and the impact of inflation going ahead for our customers broadly?

We are also keeping very close watch on what is happening on the quality or maybe market trends based on this Middle East war. But thankfully, as of now, we are not seeing any kind of trend either in bouncing or in our collections. In fact, bouncing in the month of April was less than the previous month. And this year, April is better than the previous year April. So, at the same time, we are also keeping an eye on ground feedback that if some check is getting bounced and if it is from a profile where we've envisaged that it might have been affected because of this war or anything. And the reason , if it is linked with the macroeconomic challenges. But so far, we have not seen anything. Of course, we are keeping an eye, very close watch because ultimately, all of us are going to get affected if the petrol prices have gone up by Rs. 10 or something. So, it is going to get affected. But as of now, thankfully, nothing has happened.

Sir, any profiles that we have filtered which we will, let's say, not do or maybe do more checks in certain profiles? Any customer profile that you have filtered, keeping in mind the current situation?

It is as your guess as mine. So , the immediate visibility comes to, travel , tours and hotels, restaurants, and maybe even anything that is related to energy -related things, will be directly affected. But one thing I can tell you is that we are not financing the profile we, which are directly affected like chemical factory or anything who is into energy. Our clients are the Tier 2 kind of a person who is getting affected or will get affected. As of now, not. But yes, we have kept some 5 -6 profiles, which are, as per our general guess, might get affected, and we are keeping track on their bouncing, 1+ or whatever. So, that is what we've been doing as of now.

Just to add, it's a very diversified book over a period of time. And hence, that's the strength of the retail business. There's no concentration risk at all.

Ladies and gentlemen, we will take this as the last question for the day. I now hand the conference over to the management for the closing comments.

Thank you. Ladies and gentlemen, as we conclude today's earnings call, I would like to sincerely thank each one of you for your time, continued engagement and support. The progress we have made reflects the strong efforts by our team, the trust of our shareholders and the confidence our customers place in us. I must also thank our regulators, NHB, for always being with us, guiding us, strengthening us as we progress into the growth journey. Looking ahead, we remain optimistic about the opportunities in front of us. With our focus on disciplined growth, prudent risk management and customer -first credit -led approach, we find ourselves well positioned to deliver sustainable growth and consistent long-term value for our shareholders. Should you have any other questions or require additional information, please feel free to reach out to Rakesh Shinde, our Head of Investor Relationships. Thank you once again for your continued trust and partnership. Thank you and have a very good day ahead.