Ladies and gentlemen, we will now begin with the question-and-answer session. The first question is from the line of Mahrukh Adajania from Nuvama. Please go ahead.

Hi. Welcome, Rajiv. It is good to have you on the call. Just a couple of questions. So, now that you have spent a few months, what is the rebalancing in the book you would like to do, maybe in favor of a few assets, in favor of a few lending segments, any such thoughts? I mean, basically, I know you will share your detailed strategy at some point in time with us, but just wanted to get a sense of what kind of normalized margins would you be looking at in a one year out or two year out time period?

So, Mahrukh, from a rebalancing perspective, I think the two big engines of growth are our vehicle business and microfinance and to some degree, our corporate lending business as well. But having said that, our muscles on the MSME space is relatively weak. And that is a space that that we are really looking to double down on. Two is if you look at many of the traditional retail asset businesses, home loans, affordable housing, gold loans, agri financing, etc. , all these are currently subscale. And these provide us huge opportunity for us to grow as we go forward , n ot jus t in terms of diversification, granularizing and also meeting our PSL objectives. The first medium-term objective is to get to 1% R oA. And that is what the aim will be. And there are multiple levers for us to be able to do that. I think there is ample scope for us to reduce cost to assets. We need to get better productivity in the branches for us to be able to grow our liability franchise and reduce cost of funds as well. And I think as we look to diversify our portfolio, we should be able to get a different path to 1% RoA from what IndusInd has seen historically.

Got it. But what would be the timeframe to reach 1% RoA?

I think the exact timeframe is too early to call, Mahrukh, but, like I said, I am in the process of building a three year plan along with the current team members and some of the new members who are joining us. Just give us a little bit of time and we will give you more granularity as we go forward.

Sure. And then just in terms of credit costs, you did accelerated write-offs. So, would it be the end of these accelerated write offs and would you see recovery in credit costs or lower write-offs going ahead , would there be a substantial reduction in credit costs in the second half, because your slippages seem to have stabilized and if MFI improves, maybe they come down more?

Hi. Viral here. Let me try and answer that. So, let us put this into two buckets. One is the accelerated write-off and credit costs that you see in the current quarter. And that is as you mentioned pertaining specifically to the microfinance portfolio. Now, that brings us to a level of PCR, which we are currently comfortable with. But we would continue to look at that closely in the next couple of quarters. Yes, slippages have been high in the past couple of quarters. We do see early signs of that stabilizing, but this is an area we really have to watch here on for the next two quarters. Kind of early to conclude that we start improving, but that is really something we are looking at fairly closely. It is a portfolio we have calibrated down. So, we do think it should start s tabilizing and hopefully at some point slippages start coming down.

Got it. Thank you so much. Thanks a lot.

The next question is from the line of Harsh Modi from JP Morgan. Please go ahead.

Hi. Rajiv, thanks. The question here I guess that Mahrukh also asked is kind of how do we think about is this the worst or we should brace ourselves for at least a couple more quarters of really tough numbers? And how do we start forming any views for FY27 given the scale of challenges? I know you said you will have some detailed comments later on, but anything that you can help us with would be great? Thank you.

So, like I said, there are enough levers for us to be able to grow. And I also mentioned the fact that the macro environment is also getting benign for us to be able to grow across the various parts of our businesses. The levers are there. The ability is there. The intent is there. But I think the key challenge really is to be able to ensure that we get our hands around the process controls, fill some of the management gaps as well, and be able to do all the right things as we go forward. So, I am not in a great hurry to push the growth levers, because it is important for us to first stabilize the platform before we are able to do that. So, I think it will just take a little bit more time.

Right. Can I ask a question slightly in a different way? If I think about, let us say, the costs as well as the write -offs, from my understanding of what Viral said right now, it seems there is a lot more to go in terms of write-offs. And even if we are at 70% PCR, there is a possibility that the Bank may remain close to very limited profitability if at all for the rest of the year. Is that a fair assumption, given the scale of problem that you still need to manage and would rather try to clean it up in FY26 rather than push it out to FY27?

No, that is too pessimistic an approach. I am not in that camp. Like I said, as we go forward, I do see growth in the books. And so, therefore, the income stream should be stronger. Fee income should be stronger. And so, therefore, to that extent, I am not that pessimistic.

Right. And so if I could just push on that a bit, in terms of confidence of depositors, confidence of employees with the headline loss, what are the few steps you would have taken and you are taking to manage the fallout?

I think that is an important question. It is very important for us to communicate, which we are in the process of, both to customers as well as to our own employees . The fact is that much of this loss has come from the accelerated provisioning side rather than anything that was damaging, like what we saw in March of 2025. The core PPOP is actually stable on a Q oQ basis. NIMs are broadly stable. The book is broadly stable. And that should give confidence in addition to the fact that all our capital numbers continue to be strong. I am confident that we should be able to communicate this confidence to our employees as well as our customers.

Great. Thank you.

We will take the next question from the line of Rik in Shah from IIFL Capital. Please go ahead.

Thanks, Rajiv. So, just a few questions. The first one is if you could just elaborate on the key hires that you have made after joining the Bank and flag what are the key vacant positions which are yet to be filled ? That is number one. Secondly, the slippages even outside of MFI are still a tad elevated and even on overall basis flattish Q oQ. When do you expect this to start improving? And continuation on this is while we have taken some accelerated write-offs in the quarter, the net NPA ratio is still 1% versus 0.6% a year ago. So, would not we still be required to continue with this accelerated write-offs to bring down the net NPA? That is the second. And third is on margin. Of course, we will wait for your detailed outlook in terms of where the medium -term trends stabilize. But just a clarification that if there are no further rate cuts, should we think that margins are at the bottom and from here onwards at least no further contraction shou ld be expected?

So, let me take the first question. During the quarter, we saw Viral, our new CFO joining, our new head of internal audit , Pragati, our new legal counsel Anand Vardhan and our new head of business transformation Pankaj Sharma have joined. And they have been in the Bank for anything between, let us say, 15 -20 days to about 30 -40 days. As we go forward, during the course of the next three months, a new head of HR, a new head of digital are expected to join. And in the medium term, there are a few others, senior hires that we are looking at as well. We have also got a new head of marketing, Sheran, who is sitting here, who I forgot to mention. She has also joined . Because there is a lot that we can do from a brand perspective as well. So, she then becomes a critical hire for us as well. So, some of these people are already on board. Some of them, I mean, it is like effectively like one or two people joining pretty much every month from here on.

Just on this, Rajiv, how about various business heads both for the assets and liabilities , are there still any gaps for the businesses?

Yes, there are gaps on the business side as well. We are in the process of closing those out. There is nothing that I can update you on this at this point in time.

But what businesses would this be broadly just?

Both on the corporate and retail side. We are also hiring a new CEO for BFIL, who should be joining in November as well. So, in subsegments of our retail and corporate businesses, there are some new hires that we are looking at. The last question was around margins. I think the way to think about this is that, while the cost of funds has come down, the fact that disbursements on the microfinance side has been relatively muted, has impacted yields on the asset side. That one lever itself as we s tart to grow that business going forward should ensure that that margins begin to improve. And as we recalibrate our overall portfolio, both on the retail and corporate side, I do believe that there are levers for us to certainly hold the current margins. But certainly the intent is to improve margins as we go forward.

Got it. And just the last one on that write offs, which I mentioned, given that net NPA ratio is still higher at 1% versus 0.6% a year ago. So, do the write-offs continue essentially?

So, I think as I mentioned earlier, there are two pieces to this. One is the accelerated write-off. So, obviously, that is not something you will keep seeing in the subsequent quarter. So, the delta that you see this quarter, Rs.872-odd crores unlikely that you will see the same level of maintenance or provision of credit costs in the subsequent quarter. So, that will surely come down if you take current quarter as a base.

Thank you.

The next question is from the line of MB Mahesh from Kotak Securities. Please go ahead.

Hi Rajiv. Two questions from my side. One, why was the accelerated provisions made for the quarter in MFI?

So, let me try and explain some of the drivers on that increase. So, it has basically got to do with the slippages that we have seen over the past couple of quarters. They have been elevated. And we thought we really needed to up the coverage ratio on that portfolio. So, it is basically accumulated impact of the fact that slippages have gone up over the past quarter. So, you see some of that translating into credit losses. And we have tried to improve the coverage ratio itself on this portfolio. So, it is the aggregated impact of these two that you see there.

Okay. Rajiv, just one question. There is constant news that keeps coming quite often in the media on some of the practices at the Bank. I am trying to understand how much of a change that you would need to make below the leadership level, looking at what you have seen in the organization at least in the last few months?

So, firstly, let us look at this at multiple levels. One is that whatever happened within the Bank, all the financial impact was taken in March '25. Thereafter, investigations, etc., have happened. Some of it has moved into the legal world with law enforcement agencies, etc., And that is a process that will continue as we go forward. Needless to say, the Bank is fully cooperating with law enforcement agencies as we go forward. Based on all the investigations that have been done, staff accountab ility has been established and staff action has been established, some people have been asked to go, some people have been docked, etc., That is a process that is by and large being completed as well.

And Rajiv, is it fair to assume that there are no pending monetary related impact that is still yet to be identified?

I think that is a fair comment.

Okay. Perfect. Thank you.

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

Hi, team and congrats Rajiv and Viral on your new role. Just firstly, in this quarter, can you comment on, a), quantify what are the slippages in MFI? And b), just comment on CV CE slippages also?

Piran, we have given those details. Vehicle is Rs.694 crores gross slippage , microfinance is Rs.1,083 crores, other retail is around Rs.697 crores and corporate is Rs.64 crores.

Okay. And what was CV last quarter if you do not mind?

Vehicle finance last quarter was Rs.743 crores , microfinance Rs.888 crores, other retail Rs.692 crores and corporate Rs.245 crores.

Okay. Fair enough. And secondly also, Rajiv, you mentioned that you would scale up home loans irrespective of the cost of funds disadvantage. So, what exactly, like why would we do that firstly, what am I missing here?

What you are missing is the absolute size of that business that we have. I think that business for us is about Rs.5,000 crores give or take. And so therefore given that size, we can actually pick and choose both in terms of the kind of customers we want to lend to and the price that we want to lend to. And so therefore obviously we do not want to compete with other banks and NBFCs in the prime and super prime areas. But I think given the size of business we have, there is ample opportunity for us to be able to grow profitably within this business at least into the medium term. And more importantly, it feeds into our liability franchise as well. And that is probably even more important as far as I am concerned.

Sorry, just to be clear, you are not referring to affordable housing here , you are referring to mass housing?

Yes, I am.

And honestly, how much does it really feed into the liability franchise? Because the guy who is taking home loan from you, a regular fellow, not an affordable housing guy, already has a Bank account. And I think even at HDFC and all, they open new SA accounts but the money there is equal to one month of EMI. So, maybe 30-40,000 bucks. So, is that really a needle mover?

See, I think when you look at it on an individual account basis, the way that you put it, it perhaps may not be material. But as it continues to grow and the Bank has this particular customer on its portfolio, the ability to open the account improves , the ability to cross sell other products improves quite dramatically including, for example, our personal loan or credit card, business loans as well. So, the fact that we can do more with that customer, is unquestioned.

Understood. Okay, fair enough. That is it from m y end. Thank you and wish you all the best.

Thank you.

The next question is from the line of Kunal Shah from Citigroup. Please go ahead.

Hi, Rajiv. So, again, firstly, maybe the question was asked with respect to net NPA. And during the last earnings call, it was indicated that we would want to get towards 0.5 %- 0.6%-odd. But maybe the new CEO would take a call. So, what would be your reading? Maybe would you really want to get to that number or you are comfortable with 70% coverage and need not be necessarily in this year? How are you looking at the overall Net NPA number?

I am certainly not comfortable at one plus. And I think we need to get to in the vicinity of 50-60 basis points in the medium term. I think that we certainly need to get there.

Okay, so that call still continues even with you. So, that we will get it in the medium term?

Yes.

And even outside of MFI, this Rs.1,500-odd crores, the overall write-offs are like Rs.2,500- odd crores. So, Rs.1,000-odd crores run rate compared to maybe a relatively lower number. So, what is actually leading to that? So, was it like the accelerated write -off in other segments as well? And still we do not see GNPAs coming down despite this kind of write-offs in the other product segments. I think where you share in terms of the consumer banking GNPA, it is rising across the board. And in fact, even like MFI after the write-offs have seen a rise, maybe it is because of the book itself coming down, but other portfolios are not showing any improvement as such.

I think maybe if you look at again these two in comparison, the escalation or the increase has clearly been on the microfinance portfolio and the others it is not a substantial increase. We are watching that. And we really think that probably going to stabilize in the next couple of quarters. So, not really a big concern at the moment, but something we are watching.

Okay. And Raj iv, with respect to your 1% ROA, where do you eventually see in terms of the potential of the franchise to deliver the fee -to-assets? Again, like this quarter it has been off. Maybe you would tend to believe that MFI, the processing fee out there would have also impacted. But there are a few more line items wherein the fee income is still down sequentially on a low base of first quarter. So, where do you see fee -to-assets settling for the Bank over the medium term?

I think this is a franchise which can deliver fee -to-assets in the vicinity of about 1.5%. It may take a little bit of time, but I think there are enough levers for us to be able to get there.

Okay. 1.5% or maybe over a period of time?

Yes. 1.5% over a period of time.

Yes. Got it. Okay. Thanks and all the best and wish you all a very happy Diwali.

Thank you, Kunal.

The next question is from the line of Chintan from Autonomous. Please go ahead.

Hi. Thanks for taking my question. Can I check with you how the gems and jewelry book is doing? It is one of the areas that the US tariff is impacting. Are you seeing signs of stress? The anecdotal hearings on that industry are not great. So, that is why I wanted to check.

So, one is we have a preeminent position in the gems and jewelry business. We have been in this business for many years. Two is we do business pretty much with the cream of the gems and jewelry side of the business. And so therefore, like I mentioned in my commentary as well, we have no NPA, SMA-1 and 2 as we speak.

Okay. And kind of early signs. What are you watching in this space to ensure that you stay on top of the credit risk there? Because there is an impact. It is very palpable. So, how do you kind of stay on top of this credit risk?

So, this is like any other portfolio. We monitor this portfolio very closely. The underwriters look at it regularly, the coverage team looks at this regularly. I have met most of the very large promoters within this space to understand what they are doing and what is the impact on their businesses. They clearly understand that tariffs are an issue, but they too have mitigants for them to be able to manage this. One is to be able to move some of this manufacturing out of India. Two is to refocus some of their businesses away from the US, which is a large market for them, to other parts of the world, including India, where demand continues to be fairly strong. And three is to move to the higher caratage, which then is probably more profitable from their perspective as well. But in the short term, yes, they are seeing pressure in terms of their overall businesses. But these are businesses that have been around for many years and these are players who have been in this business for generations.

Okay. Thank you for that. Can I ask a second question? I mean, we have spoken about sustainable NIMs and stuff in the call. Can I just check the 14 bps NIM movement seen in the quarter? Could you just go through the moving parts there? What caused that impact? There is something coming from MFI, but if you can talk through the moving parts, that would be helpful?

Let me take that. So, there was this one-off recovery impact last quarter. So, we first got to factor that. The impact of the microfinance portfolio going down, that is roughly 20bps on the NIM. So, I think these are the two moving parts which you need to factor in.

Twenty from MFI. And what did you say the other one was?

The one-off recovery in the first quarter, 11bps.

Okay. And then the final question is, when I look at your LCR retail deposits, your end-of- period number is 2.1% different from the average number last quarter. We do not have this quarter's number yet. I am just wondering why should there be an end -of-period impact in a LCR retail deposit book , b ecause it is kind of normal to expect that in a corporate book, just curious why such a big divergence between these two numbers?

Just a movement between the quarters. Depending on what kind of flows move in, move out during the quarter. Given there was a bit of volatility in the last six months, sometimes some of the large affluent customers move in, move out. That moves the averages a bit different way versus the end -period number. But otherwise, you are right. In normal course, the difference between period end and period average broadly remains the same. But we have been a little bit in the exceptional situation in the last six months.

Okay. Fair enough. Thank you. And then final point, on the BFIL Qualified Audit Report, what are the issues there that led to that Qualified Audit Report if you could just throw some light on that? You have covered some of the points, but I wanted to ask it as a direct question.

Let me answer that. Some of the issues which you mentioned in the subsidiary entity in terms of quantum and scale are really not material. Also, these are all pertaining to past periods and there is no incremental financial impact. Whatever loss was there , it was booked in past periods. It is basically got to do with the nature of the business. Some of these are inherent. And yes, there is some improvement in internal controls that we need to see with that particular entity. But I think it is very important to highlight that there is no new financial impact coming out from those issues. It is all the past. The only thing we look to do is enhance the controls and the governance framework specific to that subsidiary entity. Again, nothing really impacting the Bank. It is important to highlight that.

Okay. Thank you.

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

Thank you for the opportunity. Just one bookkeeping question. The microloan book is down 25% Qo Q, that is almost like Rs.7,000 crores. Could this help us understand the flow, what got repaid, what has slipped among the set of numbers for the movement? That is my first question.

Yes, so our opening book was Rs.28,300 crores. We disbursed around Rs.1,300 crores. We wrote off Rs.1,580 crores. And then there was change of some provisioning and repayments were around Rs.6,700 crores for the last quarter.

Understood. If I understand the disbursements over here, how should we think about that over the next two quarters, because since the repayments amounts are going to be large, where do you assume this book comes off sharply now?

So, like I had mentioned earlier as well, we have tightened some of the underwriting standards that we have within this space. We have increased the scrutiny. And the approval rates by definition have dropped as well. And that is somewhat reflecting in the lower disbursals. I do believe that as we get into the current quarter and as we get into the next quarter, disbursal amount should be significantly higher than what we have been able to achieve in the current quarter.

Thank you. And the second question is on the vehicle book. You did mention in the opening remark that the festive uptick you are already seeing on vehicle. So, should we assume the asset quality there is stable and that gives you the confidence to now pursue disbursement growth aggressively there?

Yes. I think that is a fair comment. We do believe that asset quality should be stable and we will certainly look to participate as demand comes back.

Thank you.

The next question is from the line of Nitin Aggarwal from Motilal Oswal. Please go ahead.

Hi. Good afternoon and thanks for the opportunity. I just have one clarification to ask, Rajiv, around the gems and jewelry business. So, when we speak to credit rating agencies, there is a fair bit of rating downgrades that have happened in that space like it is almost double-digit in proportion to the total rated clients that they have. So, has there been any such events in our portfolio that you see?

No.

Okay. Sure. That is it from my side. Thank you so much.

The next question is from the line of Himanshu Taluja from Aditya Birla Sun Life AMC Limited. Please go ahead.

Hi, sir. Thanks for the opportunity. Just a couple of questions. Can you just comment around any other segments where you are not comfortable to grow? And apart from vehicle, what could be your core segment of growth? The second question, is there any further tightening or requirement towards increasing the provision coverage in any of the segments? Like this quarter, you took some higher provisioning on the MFI. How do we expect this provisioning tightening in the coming quarters as well? And thirdly, if you have done anything from your understanding, if you can put any lumpy fee which is still and where can come and you can take as a calibrated approach? Yes, that is all. These are the three questions at my end.

So, are we uncomfortable in any of the spaces? My answer is not really. Second is, will we increase PCR as we go forward? Our intent will always be to ensure that we are fortifying the balance sheet at all points in time based on multiple levers, including loss -given default rates, etc. , And so, that is an ongoing process. I did not understand the last question.

Sir, the last question is around the fees. Any lumpy fee which can be calibrated where you have done any understanding according to you? Is there any feature in the fee income which can take certain calibration further?

No. All the fee income is all franchise fees across both the retail and corporate side of the business. Our intent will be to grow this in a granular fashion.

Okay, sure. Sir, can we say along with this vehicle, MFI and the gems and jewelry will remain our key portfolios for the growth?

What I have said was that these are domains that IndusInd Bank has built its capabilities and distinctiveness. I see no reason for us to reduce our presence in these spaces. But having said that, I see huge opportunities in areas like the MSME sector, in the retail asset businesses for us to grow businesses significantly. Therefore, it is quite possible that as we get into the medium-term, while some of the other businesses may grow much faster, the proportionality of these three businesses could potentially reduce. That, in a sense, will be the aim of the Bank as we go forward to build a more diversified portfolio, less cyclical and more predictable business as we move forward.

Sure. Thanks a lot. Thank you.

Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Rajiv Anand for closing comments. Thank you and over to you.

Thank you. And thank you to each one of you. And let me also take this opportunity to wish each one of you and your families a very happy Diwali.

Thank you, members of the management . On behalf of IndusInd Bank, we would like to thank you for joining us and you may now disconnect your lines.

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