PNB Housing Finance Limited analyst Q&A

Thank you very much. We will now begin the question-and-answer session. We will take our first question from the line of Ashwini Agarwal from Demeter Advisors LLP. Please go ahead.

So, my first question is with the net interest income drop, right? You have the yield compressing and the cost of borrowing going up. Now, I understand some of the yield compression is because of the change in mix, corporate going to retail and leaning towards salaried. So, I have multiple questions here. One is that, how do you get the drop back up or do you think that this is the new normal? Number two is linked to that; this is the AA+ rating, what does that do to your cost of borrowing? What should we expect the net interest margin or the spread to look like both for the 4th Quarter as well as for Fiscal Year ‘25? That's my first question.

So, as you rightly mentioned, yes, there are certain impacts of the corporate book running off and moving towards the safer segments. Going forward, there are two reasons, you know, why the spreads can improve. One is on the cost of borrowing front. As you mentioned, the ratings have improved. Plus, we have also got access to the NHB funding now. So, these two factors should help us in improving the cost of borrowing. Even if you see the incremental cost of borrowing, it has been declining. And we should see some benefit of this coming up in the next one to two quarters. Even on the rating part, now that we have got an upgrad e, we would be working with most of the banks to revise the spreads and get some benefit on the existing borrowing as well as on the new borrowing. That is one. Second, as the Roshni mix improves, there is going to be a kicker on the yield. And secondly, as Girish mentioned, we would be moving towards an emerging market segment within Prime to get or target higher yield segments. So, that will also give a kicker over the next few quarters. So, this is how we are trying to manage.

Just to add to what Vinay said, on Roshni, as I mentioned, we will be operating in a lot of the segments which we have not till now. So, that would start from April. So, we expect to take the yield up from 11.5% in Roshni to about (+12.5%).

So, if I think about, you know, could you quantify the benefit on cost of borrowing both from the NHB refinancing that has become available to you as well as the rating upgrade? I mean, quarter on quarter, the cost of borrowing declined by one basis point. I mean, what do these two events mean to cost of borrowing?

So, one is, see, on the NHB, there is a sanction of INR 3,000 crores and we have taken the first tranche. So, there is the difference, if I have to compare now with my cost of borrowing and the rate at which we get from NHB, which is blended for refinance and affordable housing. So, now there will be a gap of about 60 to 70 bps. So, that is the gap because earlier this gap is to be slightly higher. Now with repricing, so, the gap is going to be around 60 to 70 bps. So, that is number one. And number two, as we mentioned, now we are engaging with all the bankers, and it is a constant effort to get the rate repriced on the lower side. And on the business side, the mix will keep changing because we just started Roshni about a year back and now, we are going to start emerging market verticals. These two would operate at a very different yield. On Roshni, as I mentioned, we have a plan to take the yields up minimum by 100 bps and this is from April. And even this emerging market, this vertical also will get started from April. So, one, it will help us to grow. Number two, it will also help us to get a better yield. And on the other side, on the cost of borrowing, there is some scope there for us to bring down the cost.

Girish, if I recall, what you had said almost a year ago was that over a period of time, the spread will definitely come down from where they were. But you were still confident of keeping them at around 275 basis points, give or take, and net interest margin 375 to 4. bps But you are running much lower than that, especially on the spread part. Where do you think you want to be 1 - 1.5 years from now?

It is like this. See, if I have to talk about margins, I think NIM will be around 3.5% and let's say on the fee it will be about let's say around 30 bps. So, it will be about 30 bps on the fee. In terms of yield by changing the mix and getting into new and starting a new vertical , getting into new segments, so, this will keep changing. The mix will keep changing. So, on NIM will be around 3.5% and on the spread, it depends on the movement but on NIM will be around 3.5% and fee today it's about 25 bps. So, that will be about 30 odd bps and the yield because we are now focused on retail and within retail now, we will be operating in three different segments Prime, emerging markets and Roshni, emerging markets and Roshni will give us a kicker on the yield.

On the spread, do you think 2.5% is an unrealistic target?

See, it all depends on how the interest rate market pans out in next couple of quarters. Obviously yes, you know, at that point in time, obviously, we were at a much higher and even today if you look at ex-one-off, we are at about 2.3 1% and this has, see, today, we should also look at one more thing. See, corporate book is degrowing, right? Even if you have to compare it with last quarter and this quarter , there has been a drop of about 22% on average basis in the Corporate loan book. So, if we take standalone, I think, see, if you have seen even for Quarter 3 some of the companies which have announced results , so there has been a contraction on the spread and yield , right. Now for us the impact was because of whatever reasons we mentioned earlier. I think the point to take away is that we had guided for 60 bps of credit cost for the year and that now looks like 31-32bps for the whole year. A. B, and this would also continue for the years, at least for next year and next to next year. That's number one. And number two, we have a large pool where we have a write-back opportunity, both on corporate and also on retail. So, if you look at the ROA profile, I think it will be 2%+.

Sir, second thing is on the growth. I mean, at the end of the day for sustainable ROE to emerge of, say, mid-teens or slightly higher than mid -teens are 16-17%. We need to see a much better leverage on the book and therefore growth. And this corporate reducing, even when the retail is going up, has been holding down growth. You mentioned that for Fiscal ‘25, your desire is to grow the retail loan book by 17%. And my question is, why not more? Because the market leader has vacated the lower end space of 50 lakhs or less. That's what we hear from the street and from your competitors. And from whatever we can observe, there is a lot of real estate activity. So, what's holding down growth or why are you growing only at 17% and not higher given how strong your balance sheet is?

Very good question. So, actually, if you see where we were a year back, you know, obviously, we had to move a lot of pieces. We did a right issue, raised capital. We brought down corporate GNPA. We brought down retail GNPA, you know, as a strategy both by collection, OT S, sale of property and one-off. Right? So, this is a transformational journey and now we are almost about one year since we started this journey. Now, to answer your question, I think the growth could be more, but we want to balance growth with profitability. So, that is the whole point because end of the day, growth is important, profitability is important. So, we need to manage both of these things. Given the fact that we are still through the transformational journey, you know, obviously, we need to work on a lot of things and that's the reason 17% growth.

Thank you. We have our next question from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.

Sir, first, if you could help understand what are the one -offs on the interest income line in this quarter?

Abhijit, one-off in the current quarter is on account of MCLR changes that have happened on the securitized pool. So, that has given a one-off of around INR 16 crores in the interest income line.

So, this was, I mean, a negative impact on your interest income.

Negative impact. Right. And on the interest cost line also, there was a one-off of INR 12 crores, which we had to pay at the time of maturity of certain ECBs, which was not amortized earlier.

So, I mean, that was my second question . I mean, you have already given in your presentation almost INR 12 crores on account of ECB hedging. So, very clearly in your borrowing mix, you can see that there are ECBs which have got retired in this quarter and because of its impact of INR 12 crores, but please correct me if I am wrong from what we have always understood, the ECBs, which are raised by NBFCs and HFCs, they have to be fully hedged. So, at the time of maturity, why was this out go of INR 12 crores?

No, it was fully hedged. There was a minor difference of some paisa in the rate at which it was taken versus the rate at which it was hedged. That was more of an operational delay, which we had to bear at the time of maturity. So, this was only specific to deal that got matured in this quarter.

And Sir, in terms of guidance and what you have said until now, from what I could make out, for FY '24, you have moderated the retail number guidance to 15%, but you have maintained for FY '25, the retail number guidance at 17%. Likewise, on credit costs, you are suggesting that having seen nine months of this fiscal year, we could potentially be doing 31 to 32 basis points in this fiscal year and then for the next year as well, you are now guiding for a similar level of credit costs of 30 to 35 basis points. Is that correct?

Yes, it's correct.

Correct.

So, the last part of the branch additions will come in the 4th Quarter.

No, in fact, a lot of work has happened in quarter three in terms of identifying the premises and all of those things are done. We declare branches open only when it is ready and when we, you know, after intimating and once it is ready and when we start the operation. So, we by March will be at 300 branches. So, a lot of work has happened in quarter three.

And sir, last question that I had was on the disbursement momentum that we saw during this quarter, sequential decline, something we not usually used to see among HFCs, disbursement decline from the second quarter to third quarter. I think in your opening remarks, you were trying to talk about some disruption that you have seen. So, if you can just re cover that again, what kind of led to a sequential decline in disbursements? The related question I had was on slide number 21, where you have given your P&L reported as well as excluding one-offs. I mean, very clearly in this quarter, what really changed led to a 20- 21 basis points compression in margins or 20 basis points compression in spreads where very clearly we have not really accelerated disbursements. So, was this more in the nature of trying to retain customers so that the book run -off is lower, wherein you had to offer lower interest rates to customers because this is just one quarter that I am talking about, not full year. What really led to this kind of a compression in margins in spreads or yields for that matter?

So, I think let me take the first question. So, what I had mentioned was in this quarter, in quarter three, we had certain challenges which were both internal and to a certain extent external. I think it was more internal. As I mentioned that we had, I spoke about West, how the market share is changing. I spoke about the South, how it is changing, that had an impact. Now we have fixed in terms of leadership, in terms of team, in terms of trade policies, all the tweaks, because we had to ensure that the portfolio what we build is of the same quality. That is one reason. And second, we also had an impact in quarter three, because for us Chennai floods had a bit of an impact and to a certain extent on pricing, what you said that in terms of retention, in terms of book depleting a nd also I think to a large extent talking about the yield as I mentioned that corporate book is depleting. So, these were the reasons, and which is why I was mentioning that , directionally we want to ensure that A there is growth and see if you look at one year back, we were at about 0 or negative and now on retail we have reached a stage of 13.2%. So, it looks like this year we'll end up with around 15% maybe give or take 25 bps, 30 bps now which is why I'm saying that for the coming year the growth is going to be 17% why not more I answered that why not more because we need to manage both profitability and growth. Second question, I'll request Vinay to address.

So, the second question first is with respect to the mix change. So, if you see the last quarter our average corporate book was around INR 3,000 crores which has now come down to around INR 2,200 crores. So, while we resolved this one NPA account last quarter that was also giving some income. So, that has led to a drop or change in mix from corporate to retail. Second, with respect to as you rightly said due to address competition in certain select geographies we have booked business at a slightly lower yield in this quarter to address the competition. These are the large two reasons for the drop that you see.

Vinay sir just trying to understand this t he first thing that you said about change in m ix from corporate to retail l ast quarter there was interest income that was booked from the corporate NPA account which got resolved and because it got resolved last quarter, this quarter there was no contribution from that corporate NPA account in interest income?

Yes, correct

Because the recovery was both (P+I) Principle plus Interest. So, there we had an upside on the interest.

Thank you. We have our next question from the line of Renish Bua from ICICI Securities. Please go ahead.

Sir, just two questions from my side one on this write-backs which you are expecting over the next two to three quarters. So, can you please quantify I mean what kind of write-off we have, and you know how much of that is on the block or let's say very close to resolution?

So, I won't be able to quantify, but yes on the corporate side we have a total pool of about INR 1,700 crores. On the retail we have over INR 500 crores. So, we have an aggressive strategy for write-back. So, you will see that panning out from this quarter onwards. So, why I'm saying this quarter is because in corporate we've been working since last one year and on the retail side we had to move all t he accounts to the stage of auction a nd then of course we will start realizing that and therefore I'm saying it will start from this quarter and it will pan out in next three to four quarters time. So, we have a good pool b oth on corporate and retail. So, there will be a good opportunity on write-back.

No, it is not large. What I mentioned was there is one NPA account incorporate so that we are expecting resolution in Quarter 4 and from the write off pool w e have few accou nts which we are working on. So, which will materialize.

When we say this credit cost guidance of 35 basis point this is after considering this write-back or this is x write-back?

So, I had mentioned that first 9 months you've seen credit cost of 32 bps . So, Quarter 4 would be similar trend and c oming it also would be similar trend and this is n ot netting off from the write-back.

So, write-back will be the up side risk or let us say downside risk to our credit cost guidance?

That is right. So, I think to put another word that write-back opportunity is not budgeted t hen when we said that coming year credit cost will be on similar lines.

Sir, again just circling back to the yield slide on 21 wherein our asset yield has moderated from 10.48% to 10.29% which is sort of adjusted for the one -offs. So, this entire reduction is purely because of the competition or let us say is there something else is also there let us say we are shifting from a sub -prime to prime or maybe prime to super prime customer se gment. I mean how one should break up this?

In terms of segment change the yields will improve. So, today if you look at our yield it is comparable or maybe slightly better than some of the other companies. If you look at the yield let's say on retail, it is actually comparable or slightly better. So, when we say that we will get one is in terms of scale up there will be a good traction in Roshni in Quarter 4 and coming year number one. Number two as I mentioned we'll be starting a new vertical called emerging market that is from April. So, these two will there'll be a lift in yield and the third thing is that on Roshni as I mentioned that we will also be focusing on certain segments, certain programs which we are going to open from April. So, will overall yield from Roshni will be 12.5% from the current 11.5% and emerging market will give us a yield upside from the prime of about let's say 35 to 40 bps.

No, I think directionally I got you, but I am just more specific for the q uarter-to-quarter movement wherein our asset yield has dropped from 10.48 % to 10.29% so what is driving that I mean it is purely because of the competition or is there something else?

No, there I mentioned one is corporate is degrowing. So, as Vinay mentioned that last quarter average corporate book was INR 3,000 crore and now it is INR 2,200 crore which is a significant drop and that would have an impact on yield so that is one coupled with we also I told you that it could be one is market second is in terms of book retention. So, all these three as a combination no there was impact on yield, but if you see largely, it is the corporate degrowth and since the book is now degrowing the impact would keep reducing over a period of time.

And sir last question from my side on the NIM side so adjusted for one off our NIM stands at 3.65% in this quarter wherein non guiding, but maybe we are expecting NIM to settle around 3.5% which is still 15 basis point lower than the current NIM, so where do you see this NIM contraction happening it is because of the cost of borrowing will reprice in coming quarter or do you see the competition will keep on impacting the yields?

Actually, it is balance of both yield an d cost. So, around 3.5 % is what I mentioned. So, yield will definitely because of change of mix yield will better and also cost of borrowing the expense it will come down. So, as a combination of these two initiatives I had mentioned the yield.

So basically, we are expecting NIM to contract, when we say 3.5% because our current NIM is 3.65%, so if we are expecting our cost of borrowing will come down and maybe let us say in the best-case scenario yield will remain where it is not factoring the higher yield, so in that case our NIM should sustain at current level 3.65%?

You are right so NIM will be around 3.5%.

Thank you. We have a next question from the line of Kunal Shah from Citi Group. Please go ahead.

The question is on the borrowing side so if we look on the deposit now what would be the strategy with respect to deposit raising given even in the harmonization it was highlighted with respect to the public deposit on there so that’s particularly the question?

So, in fact, as you might be aware there is a draft circular issued by RBI and till 29th of February there is time for all the companies to give their feedback and comments. This is that the circular would be finalized and probably it might get circular ized maybe in a month or two. So, as of now if we have to see that 1.5 down from 3 times, I think there is enough headroom for us to grow on deposit. So, however we need to see what the final circular says and then we need to align to that, but as of now considering the current NOF there is enough headroom to grow. Even our SLR is 15.5% as against 13% required.

So, maybe slight we are marginally higher than the requirement, but still in terms of incremental irrespective of whatever comes out in the final guidelines would there be a change in strategy in terms of b ringing the mix of deposits down we have started to rais e from the bond market as well this time CP's were also raised. So, how are we looking at the overall borrowing profile?

No, I am only saying the cost of deposits for us is now lower. So, the idea would be to grow our book. So, it all depends on the final circular, but I think as of now because the deposits long term sticky instrument where we can leverage, but however it all depends on the final circular. As of now there is enough headroom as of now the plan is to grow deposits not very aggressively, but definitely to grow the book.

And secondly in terms of the bala nce transfer so just coming back to the question on yields in terms of the decline outside of the one-offs. So, was there any balance transfer or maybe in terms of slightly downward repricing of the book which whatever happened, or this is purely the mix- change which is linked to this?

It is a combination because balance transfer has been there in the past as well and it is on a continuous basis. The only change is that let's say a year back we were at about 21% run-off now it was down to about 16.5% and out of the 16% there will be a combination of normal EMI payments then for closure, part closure and balance transfer.

So, 16.5% is the overall repayment which we could see from the AUM and the disbursement?

That is the overall run off; BT is about let's say it's around 7%.

Thank you. We have a next question from the line of Sanket Chheda from DAM Capital. Please go ahead.

Most of the questions were answered just I missed this INR 16 crores one-off on yield what was that on account of?

That was on account of securitization MCLR change in securitization that is INR 16 crores.

And secondly on the guidance for this year of about 15% on retail growth so far in YTD we have grown the retail book at about 8.5% in Q4 to be 6% we might need about sequential growth of about INR 6,000 crores of disbursement. So, we think we will do that from say the current INR 4,100 or INR 4,200 run rate?

Two things one is our retail book growth is now 13.2% because corporate we are not doing corporate business now and corporate book is degrowing. So, always the growth was on retail. So, we had guided 17%. So, we are at 13.2% now so this quarter we will cover up it obviously we have to moderate. So, it will be around 15%.

I was talking of YTD, but yes, it’s okay.

I am saying March-to-March.

Thank you. We will take our next question from the line of Abhay Modi from Helios Capital. Please go ahead.

9.6% on the retail book.

9.6% this is the incremental or this is the book yield?

Incremental.

And what percentage is salaried loans for you?

On a book it is 60% and on incremental it is around 63% to 64%.

Thank you. We have a next question from the line of Anusha Raheja from Dalal & Broacha . Please go ahead.

You said that your prepayments are closer to around 16%-odd and that BT out rate is 7 to 8%. So, how are you seeing this number panning out in FY25?

I think BT generally if you look at the trend for the last two years for any company for that matter and given our portfolio composition, I think it should be in the same range about 7% to 7.5%.

And the prepayments are also likely to be at around 16%-odd?

Yes, as I told you, it used to be higher a year back. So, we had lot of strategy around it. We have a strong retention team, and we have a very strong customer -focused retention policy. So, with all of those things we had brought down that from 21% to about 16.5%. So, it stabilized at about 16%-16.5%.

And what’s the outlook on the disbursement growth for the next fiscal?

Disbursement growth we are talking about 22% and book growth around 17%.

Sir, in that scenario if disbursement growth is around 20% to 22% and prepayments are around 16% the loan book growth could be it’s hardly 5%-6% the way the current scenario is because I think disbursement growth is happening, but if I look at the outstanding loan book growth that is just hardly 7% purely because of your prepayment rates being on a higher end, so going for the next fiscal if the prepayment rates are likely to be at the same level and disbursement growth will be at around 20%-22% then how come the loan growth will be on a higher end?

22% is disbursements in growth so that is compared to the previous year disbursement, if you calculate on the book, it will work out to be slightly higher 25%-odd.

And what is the strategy on the emerging market side like which target set of customers you are targeting and some broad understanding there?

On emerging market, the strategy is that we would be in Tier -2, Tier-3 kind of market. So, we have branches already presented there and we w ould have some bit of branches coming from the scale up in the branch network what we're going to do from now till March. So, the customer segment would be little different compared to p rime and also compared to affordable, this is a segment which is in between both Roshni and Prime and therefore here the upside in yield could be about 35 bps to 40 bps from the prime.

And sir lastly on the write -back which you said that as a corporate pool of around INR 1,700 odd crore and retail of INR 500 odd crore and there can be some write-back opportunities there. So, if you can quantify there how much can we expect next quarter and next fiscal?

No, it w ill be difficult to quantify , but definitely yes f rom this quarter onwards th ere will be opportunity on write-back because on retail it is still we can take a number and do it, but on the corporate because these are fewer account, but all I can say that is that we have a plan that starting from this quarter there will be write-back opportunity.

Thank you. We have a next question from the line of Kishan Rungta from Emkay Global. Please go ahead.

So, I had just one question around credit cost I have just said like going ahead like we'll be having like mix of prime, emerging market and affordable and you guided for a credit cost trend similar to current trend. So, is my understanding correct over there?

Your understanding is correct.

So, despite like targeting high yield customer our credit cost is going to be the same in the similar lines?

See if you look at last one year as I mentioned we've been working on a transformational journey, and this was in every single function including collections. If you see all the metrics in collection starting from X bucket, SMA-0, SMA-1, SMA-2 NPA, early bucket, N PA deeper buckets and recovery. I think across there has been an improvement in efficiency and also the book what we are originating is of good quality and also it is important to note that Roshni business is new and emerging also emerging is not new, but yes in terms of little focus on the segment and market is going to be a little different, but still it will be new and the refore what I mentioned the credit cost for coming year will be on similar lines compared to what we have seen this year is the guidance.

The guidance which you have cut from 17% to 15% is it because only because of flood situation or is there any particular other reason for that also?

No, it is not. A ctually, to be honest with you when we had guided this a year back or let's say beginning of this y ear we thought that because w e would really achieve 17% of book growth and 22% of disbursement growth, I think largely because of profitability and the co st we need to moderate this. So, it is not because of the Chennai fl oods. Chennai fl oods is only maybe for Quarter 3 is to some extent otherwise even otherwise let's say Quarter 3 was as usual still I think 17% having seen Quarter 3 would have been a little difficult. There were a lot of moving parts in the last year and especially this year because we need to remember one thing one year back where we were are today and what all has happened in last one year. So, lot of moving parts on corporate side, on corporate resolution, o n the retail side, on the Roshni side, so lot of things have happened. So, we thought we will grow at about 17%, b ut looks like we will not be able to do that. So, therefore moderate 10% to 15%. However coming year 17% we are pretty confident.

Can in terms of NPA situation how do you foresee NPA situation in next year or two?

So, our idea is to bring down NPA on the retail side to a level which would be comparable with some of the best companies in the industry.

And that would be achievable within the next one to two years?

Yes, the next few quarters maybe 4 to 5 quarters we should be able to achieve that.

And in terms of ROA and ROE?

Given the fact that we have r aised capital recently and our leverage is less so then it's a bit of drag on the ROE, but definitely with ambitious growth in mind I think this should improve. On ROA we will be (2%+).

What kind of leverage we would be talking about around 4-5x?

No, we would be comfortable let's say in next few years we should be comfortable around 6 to 6.5x.

Thank you. We have our next question fro m the line of Ravi Naredi from Naredi Investments. Please go ahead.

No, next year we will be 17%.

And sir you have capital adequacy at 29.53% so any plan to raise equity in next few years?

No, we have adequate capital to grow for the next three to four years’ timeframe we don't foresee any such requirement.

Mr. Kousgi you have clean balance sheet of PNB Housing in respect of improved in asset quality from 8.13% to 1.73% and AUM raises INR 60,000 crores from INR 50,000 crore and you have done a remarkable job. So, what is your plan for the next three years can you give some pictures of the company?

Sir as I mentioned now it is a journey. So, what is the journey? Journey is that we actually moved away within retail. We moved away from super prime to prime that the idea was to increase the yield A. B) we started Roshni because we wanted a higher y ield and a profitable business we wanted to build, and we also had the pressure on corporate book depleting which also A ) it impacts growth, B) it impacts the interest income as well revenue. And therefore, now we think that there's an opportunity available on the emerging market and therefore we're introducing emerging market. So, if you see we will have three verticals within retail that is prime, emerging and Roshni. Now the idea is that this will help us in growth A. B) we will be able to raise book at a higher yield on Roshni and emerging market. So, of course I had mentioned th is earlier we would want to keep 17% as per guidance for the next few years because we see good opport unity. One thing I want to mention here i s that last year we had a lot of things to work on. If you see this year we will have fewer things t o work on. Come next year we would I think our focus will be completely on managing growth and profitability.

And sir Carlyle Group have percentage of equity in our company, any plan to induct his representative in Board of Directors?

Sir, today in our board there is two board seats from Carlyle, two from PNB. So, it is already in place.

Thank you. We have a next question from the line of Mohit Mangal from BOB Capital. Please go ahead.

So, couple of questions from my side. First, I'm looking at your borrowing profile. So, I think I mean it's cu rrently at around 71% is floating, two, three quarters back it was around 67 odd percent. So, just wanted to know your color on this that we will settle at the 70-30 or this floating will go up again?

I think more or less it will be at the same level because we have about INR 17,000 crore deposit base and that is why you see this mix. I think this mix would be maintained more or less it will be same.

And secondly on this branch expansion so just wanted to know any impact on the cost I mean as you have aggressively planned to open new branches, so anything on the cost -to-income or something on that front will that increase?

Yes, there will be some additional investment that we would be making for this expansion which is for both Roshni and prime vertical. However, with the growth in business I think some of these productivity benefits should flow in and will help us in absorbing some of that cost partly.

So, cost-to-income can increase?

There could be some impact, but it will be marginal.

See for us opening let us say Roshni branches would only mean … it is basically the branch premises and investment in manpower rest all of the cost because we started Roshni while we were doing prime business. So, there is no incremental cost either than manpower and the branch. As far as emerging is concerned I think there will be no increase in cost at all because it is only culling out some of the branches and the team from the existing set of branches the only thing is the focus would be different.

Thank you. Ladies and gentlemen that was the last question for today. I would now like to hand the conference over to management for closing comments. Over to you.

Thank you everyone for joining us on the cal l. If you have any questions un answered, please feel free to get in touch wi th investor relations. The transcript as well as the audio of this call will be uploaded on our website. Thank you.

Thank you. On behalf of PNB Housing Finance Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.