Sure. Thank you very much. The first question is from the line of Param Subramanian from Investec. Please go ahead.

Congrats on a resilient performance in what would have been a tough quarter. So , if you could comment a bit about the monthly deposit accretion since it's been 2 months since we had that event. And of course, we've also cut down our SA rates. So how are we looking in terms of our monthly deposit accretion, customer additions, etcetera? And are we back to a normal run rate? Or do you think we will get back to our normal growth pace from, say, first half of next year on deposits?

Yes, yes. See, we have generally seen that when people go through this kind of crisis , it takes about a year or so for things to stabilize. You might have seen it elsewhere. But we are quite confident that this matter is behind us. Q1 FY '27 itself, you will see a strong growth in the bank. The year that went by, we already described it has been flat, but flat also is good news for the quarter that went by. So , like I said, we also cut the rates. But I mean, we've already seen last year or last quarter or last month, that's quite amazing. I already talked of goodwill of customers to us, and I don't know where we're getting such goodwill from but thanks to everybody. If you see last month or so in the month of March, when the news is broken out, February end the news broke, so all of March the news was hot. Number of accounts opened was as high as the previous month of February was equal to January. So new accounts opening is coming perfectly strong. And once customers who took over the money because of the high interest rates when we cut the rates, this quarter onwards, you should see growth right now itself.

So sir, we should get back to, I'd say, normal 20%...

Yes, 5% Q-o-Q, that kind of growth, yes.

No, we always maintain a comfortable with t hat kind of number because the L CRs 114 itself a conservative number. On top of it, we don't need to keep too much margin on top of it. It's a good number. It's quite stable and even during the crisis, it stayed strong.

Yes. Sir, and how do you think about margins going into next year? There is an uptick going into this quarter, but is it largely be steady at these levels?

Yes, Param, thanks for the question. So margin for the full year was at 5.75%. And going into the next year, we expect it to be stable around these levels.

Okay. 5.93% is what we reported this quarter?

No, no. For the full year, I said was 5.75%. I also mentioned earlier that Q4 also had certain impact because of technical reasons, like I spoke of the day conventional logic and so on. But for the full year, the margin was at 5.75%. And into the next year, we feel we will be broadly able to hold around those levels.

Okay. And on opex, we are still holding on to what we talked about 13% to 14% for next year?

Yes, that stays in terms of guidance.

But please note that Q1 could be a little higher. And then Q2, Q3 onwards it could come down. So for the full year, is that, but Q1 will be a bit higher because of a couple of reasons.

Because we have put out some branches, we would have noted about 80 branches in Q4. Q1 also will have impact of increments and so on. So there are some of those factors which could play out.

So when you see Q1 and compare it to Q1 of last year, you'll see a little higher than 13% to 14% that we're talking about. But by Q2, Q3, Q4 it should come down. And by year-end, we should land around the guidance.

Got it. Very useful. Sudhanshu, I think I heard you mentioned initially that the profit for the quarter adjusted for the treasury loss and the broad impact was Rs. 750 crores, that comes to about 75 basis points of ROE in this quarter. Again, I want to check with you all, is there any, say, timeline one should look at for, say, broadly reaching 1% ROA because clearly, our core ROA is improving?

Definitely, the core performance is improving. As you rightly said, if we isolate some of these onetime impacts in Q4. So I don't want to sort of put out a number as such. We all know, right, West Asia crisis is still going on. There are still some moving parts, right? So I would not want to guide on a particular number at the moment. But definitely, from an operational parameter, we have noted that the performance is improving quarter -on-quarter. And even on the credit cost, we feel that the credit cost would be lower than the current year.

Yes. So what credit cost should we broadly work with, yes, that's my last question, for next year?

The next question is from the line of Akshay Jain from Autonomous.

I have 3 questions. So one on asset quality. So what is driving the strength this quarter? So while you have utilized contingent provision, your write-offs are significantly lower? Any other factor you would like to highlight. And again on write-offs, they are down to like around 1,200 levels? Like what is the sustainability of these levels going on? And a related question on asset quality. So it's been like almost 2 months since the war started and we keep getting news on supply chain disruption, raw material cost. So while March was still fine, how are you seeing trends playing in April, especially on the MSME front? And how are you thinking on growth and asset quality in the light of the se disruption? And maybe the last...

Yes. sorry, go ahead.

And maybe the last question on the SA rate, you have changed SA rate this week. So can you let us know the impact on your cost of SA due to this please?

You meant the recent change?

Yes, the recent change, 21st April.

Yes. That change would not translate over too much from the current levels, maybe a few basis points. That's on SA. Moving on to asset quality. In this quarter, of course, many things have played out. I have told that SMA 1 and 2 numbers improved by 10 basis points, which also led to a lower translation into slippages. Of course, MFI drag has been coming down. The slippages have been coming down there. The collection efficiency was quite strong in Q4, which typically happens every year. The collection comes in quite strongly at the end of the year for some reason, I think, across the banking system. So all of th ese trends have been quite healthy. Finally, all of this has to translate into a credit cost, which I just answered to the previous speaker. So net-net, we feel that the asset quality trends would be quite stable. Now as I talk about the crisis, the West Asia crisis, which is currently going on, what we have done is we have undertaken a comprehensive review of our portfolio to asset exposure to potentially impacted sectors, including demand disruption, fuel -related risk and supply chain challenges and so on. We have clearly identified some sectors where we could slightly be more conservative. We don't intend to stop anything, but we are adopting a cautious approach. Accordingly, the immediate impact on the overall portfolio is expected to remain limited at current levels. However, if there is any escalation, which could lead to further material supply disruptions, we will continue to monitor. So we need to see how this plays out.

See, we continue to grow certain portions of the portfolio at a faster pace, right? Like you have noted wholesale banking book is growing at a fast pace, right? The business banking is growing. So some of these are dilutive from a margin point of view, bu t we ultimately want to see what is the contribution to profitability. So even a 5.75% for that matter is quite a healthy number, right? It's one of the highest in the banking system. So you can assume that it's quite range bound in that sense.

The next question is from the line of Piran Engineer from CLSA.

Congrats on the quarter. A couple of my questions have been asked and answered, but need some clarification. Firstly, this treasury impact , the loss of Rs. 160 crores. Now if I adjust for the stake sale in that power company, we would have actually made a profit of Rs. 115 crores. Is that correct?

No, that's not the way. In fact, in the investor presentation, we have clarified that we sold certain equity in a particular group that gave us a loss of Rs. 274 crores. But at the same time, we were holding provision against that. So when we've reported the annual financials, we have reported a Rs. 274 crores loss on top of Rs. 159 crores in treasury line item. We have also reported a lower provision. However, for right comparison, what we have done in the investor presentation is we have grossed up this impact. So the actual loss for treasury for the quarter is about Rs. 159 crores. And this is an old case, legacy case where I said that this was fully provided. So this has no impact to the P&L. So for right now then we did this.

So then the real credit cost for the quarter is Rs. 870 crores or Rs. 870 crores plus this Rs. 270 crores.

Plus this Rs. 274 crores. And that's how when we have quoted credit cost numbers, it has been baked in. So in this case, as I said, it was a much older case, related to the pre-merger time, and this was fully provided. This was, in fact, one of the infra exposure which we had.

Okay. Okay. Okay. Fair enough. I think I might reach out separately...

I did answer the question or I will be happy to further clarify.

I'll get back to you separately. I was a bit confused on my numbers, but this clarifies it.

If you refer to the investor presentation, you'll get the clarity on the payment part.

Okay. Fair enough. Just secondly, is there any further T D repricing left? Or are we done with most of it?

We may get some residual impact in Q1, but it's largely done.

Got it. Got it. And just thirdly, in terms of CASA ratio, we cut SA rates last quarter. We've not seen any impact on CASA. In fact, our CASA ratios improved 40 bps. Do we take this as a more steady state CASA number, like CASA ratio number?

The next question is from the line of Jayant Kharote from Axis Capital.

My question is also similar to I think what Param was asking on the ROA for the next year. If I understand correctly at the se NIM levels and at 1.8% credit cost at 5.75% NIM, it adds up to maybe around 75-80bps, correct me if I'm wrong, which means we are expecting almost 20 basis points of operating leverage translating to ROA through the next year? But also simultaneously, that jaw is slightly slower, which it seems that our growth is now going to be around 20%, not 22% or 21%. And even if I keep touching this beyond 1 or 2 years, if 20% is the growth rate. Are these numbers sounding correct or am I off by anything, which means that you'll have to extract 20, 25 bps on operating leverage this year, Sudhanshu?

No, no, definitely operating leverage improves into the next year. I'm saying as we would have mentioned I think in the last call also next year, we expect the top line to be much better than what we saw in this year. Like this year, top line grew by just 11.2%. And now if you see Q4, the NII grew by about 16%, fee has grown 21%. So into the next year, we feel now that the MFI drag is over. The MFI book is expected to grow and positively contribute to the top line. So on the top line itself, I see it growing at about 18% to 18.5%. And opex as we have guided for 13% to 14%, still the job would sizably look better, right? So which definitely contributes to the ROA. On top of it, I also sort of elucidate on that, even credit cost is expected to come down from 213 basis points in this year to about 170 to 180 basis points. So all of this consumption is expected to positively contribute to the ROA. So it's across all the parameters, I would say, we are expecting some improvement.

One important insight, which many may have missed actually, is how the ROA of the asset side is and liability side? Okay. I made this point in earlier talk, but I'll just say it again. Now by our own internal estimates, we feel that the ROA of the lending business for the next year will look quite strong. And Sudhanshu mentioned the reason, we expect credit cost to be lower than this year, even in absolute terms and NIM to grow naturally, NII had to grow and you see how it will come. Basically, we expect the profitability of the lending business to further improve next year. When we do our internal estimates, The ROA of the lending business to be somewhere in the zone like 1.5%, 1.6% of the loans. But of course, the liability side will still be a drag. But the good news is that the loan side is like rock solid, even if you make 1.5% at this stage of the bank itself of loans, it's pretty good. And obviously, in the next 3, 4 years after that, we'll still get operating leverage. So we should just watch out the liability drag to go away. And liability drag for information has come down to 1% no w. Last year, it was how much Sudhanshu?

1.2%.

So 1.2% come down to 1% and in prior year it was used to be even higher. The trendline is clear. So that 1% should become like 0.8%, 0.6%, 0.4%, 0.2%, that direction should play out properly. I mean we see no doubt in the liability drag coming down to 0 in the next few years. It is just playing out exactly as planned.

Actually, I was comparing with the 4Q number, Sudhanshu. 4Q credit cost and NIMs are better than what we are guiding for next full year credit cost and next full year NIM, right?

Q4 credit cost is at 1.63%, right . Our guidance is slightly higher for the full year into the next year on credit cost...

NIM is also higher than what you're guiding for the next year

No, no. Q4 NIM is higher, but I said for the full year, it's at 5.75%. And next year, the NIM should stay put broadly, right? Q4 NIM is not the right comparison because of the day convention and some of these things I mentioned earlier.

No, no, of course, I was just comparing...

So from an ROA, you may assume NIM broadly stays stable. Fee, we could see some improvement because the traction has been there in terms of fee to average total assets. Of course, the larger break is expected to come out from the operating leverage itself and then on top of it, the credit cost improvement. So all of this should.

Maybe I'll take this offline Sudhanshu, but just sort of to cover it, you guys are still confident on hitting 1% ROA by the end of this year? Is that a takeaway we can work with?

As I said, Jayant, I don't want to guide to a particular number currently because there are a few moving parts, right? But definitely, the operating trajectory is improving quarter-on-quarter, and we expect that Q4 trend broadly to continue into the next year in terms of an improvement i n top line.

Maybe in a kissing distance if I've to call it. We'll get to.

We'll try to be in the kissing distance.

Kissing distance of that and but I can tell you that many people ask us about this ROA of 1%, and many have said that look, this is a benchmark you must cross and we must, but I can only say that our bank would not stop at 1%, just what it play out because from there on also the full juice is yet to be taken out. I mean, the full value is yet to come out because operating leverage will improve for the next 4, 5 years at a stretch now. So it will not stop at 1% whenever it comes there.

Definitely. One last question to you on the capital. Given that our growth trajectory, I mean, clearly, the liability side is not going to stop with this event and we are going to start growing again. So how does the capital adequacy look like? And you th ink you will need more capital by the end of this year, starting next year?

Yes, yes. We definitely think so. And we will give it a reset.

The next question is from the line of Ankit Bihani from Nomura Holdings.

Congrats on the quarter. Most of my questions have been answered. I just wanted to ask how do you see deposit competition playing out going ahead. So while we cut the SA rates at the start of the fourth quarter, but we have raised that TD rates also round about by 25 odd bps. So do we see the competition going ahead, becoming more intense, given that even PSU banks, even the large private bank would have to fight for deposits to sustain the credit growth momentum?

Maybe I'll ask Vaidya to answer that question.

I think I said that before, so I'll not take much time. I think that our bank has developed good technology capabilities, good app. Our branches are there and a lot of hype r personalization happening. So there is a lot of tech in order of making deposits, which is a strength for us. So those strengths, we really believe are like the invisible strength, you don't see them because what you see is rates and branches. This is a very conventional way of most people talk about. There is a third factor which we are running behind the scene, which is culture and technology, which is invisible, and we are strong on those invisibles. So not to worry much, our deposits will grow strong this quarter. This quarter also, this year also will be very strong. I can really to tell you that this month has started off very well. April has started off well. So we are not disturbed.

The next question is from the line of Jai Mundhra from ICICI Securities.

First, a small clarification, you mentioned that 170, 180 credit cost is including the CGFMU recovery, if any? Would you have a number as to how much you are going to claim for this financial year?

No, so we don't want to call out that number. As we noted, we have taken losses on MFI in last 1 or 2 years. So we expect a reasonable recovery to happen on that front in the next year.

Okay. Sure. And secondly, on MFI book now, now this quarter of the book has been flattish. And if I were to maybe include the write- off, then it may have grown. How are you looking at this book incrementally? I mean, would it be I mean when do you think it will hit double digit and maybe similar to overall bank? Or how are you looking at this book?

So definitely, we want to grow this book. We like this book. It contributes to P SL, comes with a good yield and so on. Now with the MFIN guideline coming in, I think some of those guardrails have also been put into place and of course, we are adopting a cautious approach on the ground also the collection efficiency trends have improved, disbursements are picking up. So we would certainly, of course, is coming from a lower base, we would certainly want to grow this by 15% to 20% into the next year. So we will see how sort of the trend sort of stands out. So we want to grow this book.

And any thoughts on creating ECL transitional provisioning? I mean, so far, the asset quality has been holding up very well. I mean, it has been holding very well for the last 5 years. But any thoughts on as we have a small RS. 130 crores of contingent provisions. But I mean, any rough working that you can share as to what could be the transitional required if at all?

We still await the final guidelines and this was expected to come in from April '27, but the final guidelines have not yet come, while most of the banks gave comment somewhere in November, December last year. As I had talked about it in my earlier calls, definitely, when the final guidelines comes, it could mean that we need to park some more capital on the ECL front itself on transition. But we may also get some benefit on account of the EIR approach because today, the sourcing opex is more than the processing piece plus there are also announcements around the change in the credit risk guidelines, which come in from April 1, '27. There is also a guideline awaited in operational risk I think taking all of this together, of course, contingent on the guideline itself which comes. We feel that a transition capital should be largely take n care of, so we'll see how some of the ECL guideline itself sort of comes out.

Okay. Sure. Then last question, while was there any impact of the CLM transition, co -lending model RBI had introduced from January 1, the broad breakup does not suggest anything. But just wanted to check, did you had any changes in your IP or the way you partner with partners for co-lending? Or was it immaterial sort of an event?

I think we have a very small book here in fact. If I recollect, I think we have the relationship with only one counterparty, and that number is very insignificant.

Ladies and gentlemen, due to the time concern, that was the last question for today. I would now like to hand the conference over to Mr. Vaidyanathan for closing comments. Thank you, and over to you, sir.

Thank you. Since we closed sharp exactly one hour, let me say that in case just if anybody hasn't last question to sneak in, we just want to give you the last opportunity, in-case.

We have the next question from Vikas Kasturi from Focus Capital.

Sir, I'm also a shareholder of the company and a long time investor and a first time speaker here. So please pardon my nervousness. So I just wanted to ask you a question, which I've been wanting to ask for last few years maybe. So one is about this financialization of savings because of which a lot of money is going towards re gistering mutual funds. And so in such a scenario, how does the bank plan to continue rating CASA? This is my only question.

Thanks. I'll keep it up. First of all, Vikas, welcome to talk to any of us in the bank, so feel comfortable. Now we understand the financial savings and people are moving to investments, that's a well-known theme. We think that this is a very large market. We are relatively a younger bank, and our book is small. And like I said to one of the earlier questions, we have good capabilities, good digital capabilities, good brand, good culture, employees are very motivated, you can go to any branch and talk to a staff, you'll get a sense. So there are many things in our favor. Well, no doubt, the markets are tight. End of the day, we are part of the system. We are not outside the system. So anything, any broad tightness of the industry affects everybody, affect us also. But overall, we are confident Vikas with things will be fine. I mean we will do strong at this front. We have no doubt in that part. If you're an individual shareholder, let me tell you that you should assume the bank will grow well on deposits Y -o-Y, bank will grow loans Y -o-Y, bank has good margin on an incremental basis. You have to only look count on one thing. You have to only look out for one thing , that our cost income ratio should come down because our liabilities cost to income had to come down. Our liability side cost to income ratio is around 145%. That is what bringing up overall to 73- 74-ish type. So that will come down. You can take it from me, it will come down 14 5 to 100 over the next few years. And when that comes down , bank’s cost to income will come down, bank’s cost to income come down and PAT will go up, things all play out to plan. It's playing out to plan even now. So that's the thing to watch for don't worry too much for liabilities it’s going well.

Sure, sir. I've been an investor since 2019, nothing can scare me.

Thank you, Vikas, really, really grateful to you for that kind of confidence in us. We won't let you down.

Yes sir. Thank you. Wish you all the best.

Thank you and everybody, and thanks to all the investors for participating in this call today, and from Sudhanshu, Sapta and myself and everybody in the bank, thanks a lot for your help and support.

Yes, thank you, everyone.

Thanks, everyone, for joining the call. Thanks.

Thank you so much, sir. Ladies and gentlemen, on behalf of IDFC FIRST Bank Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.