The first question comes from the line of Roy Menes from Flagpoint Capital.

So just 2 questions from my side. The first question is that, obviously, we are seeing a significant divergence between the asset AUM growth and the NII growth. Can you give us a guidance or some sort of indication in terms of how will it trend going forwa rd? Because I'm assuming that you are investing in secured businesses, more prime customers, et cetera, because of which the divergence is quite high. But FY27-FY28, how would it trend is something that I wanted to ask was my first question.

Yes, I think not a specific guidance, but I'll give you an answer, which will give clarity. AUM growth because you see a diversification and our acceptance in the market of distribution. So, we are sticking to whatever guidance we have given on the AUM growth. It is moving better than expected, and it should continue on a robust scale from here on quarter-on-quarter. Now why you find a difference in NII? Because if you recall, I had said that the earlier STPL, which was at a very high rate, which was creating a high interest- NII at that time or boosting it. We had for 6 -7 months, slowed it down considerably from 1,000 to 150-200 levels and recalibrated it. But over the last 2 months, it started to inch upwards because the bounce rates there have actually improved considerably to 1/3 level. It's a very robust business for us now and we have now started calibrating it upwards. So, the future guidance is , it's going to inch upwards, but we're not giving any specific number to it right now. And that gap will start getting narrower, and it will be a strong strength for us because we managed not only to calibrate it well, it's actually turning out to be a big strength area for us from here on, not just for 1 year, but probably for a couple of years.

Sure. That is helpful. My second question is, obviously, this year, the credit costs have been elevated. Again, I wanted to understand, I think I missed this part, what is the write -off for the full year? And for FY27 and even FY26 because that might be a stabilizing year. For FY27, any guidance on the credit cost and full year write-off number, if you can share that?

So, our full year write -off numbers are ₹1,548 crores, and however, if you look at the Q4, the write-offs have significantly come down as compared to the write -offs which we have done in 2Q2FY25 and Q3FY25.

Right path in terms of credit costs?

So, see, in the last 10 months, all our credit underwriting for incremental businesses, which we have risk recalibrated, every signs are showing better than industry trend. However, I would like to see the seasoning it out in the next 3 to 6 months before we put it out as a regular information to all of you.

Just to give you a sense that every business that we have come in after the 10 months that we've been here, the calibration is showing better than industry across products. So, we are very clear because risk first is not just English for us. This is the way the business, we not only have capability to grow AUM, we have very serious capability to conduct risk railroads well calibrated enough that you will see scale of business and risk well calibrated. So, this area, as an MD, I can tell you that we'll only get better and better, and we'll probably strive to be the best - in-class on risk.

The next question comes from the line of Chintan Shah from ICICI Securities.

So firstly, on the Opex piece, I think strong growth on Opex-to-AUM has also inched up for this quarter, and we have guided that it would be higher for another 2 quarters post it, it settles down. So, any broad ballpark number on what could be the prudent level which we are looking at Opex would settle in this ballpark rate? So that would be helpful on that. Yes, first is on that.

See, Chintan, sorry, you finish. Sorry, I thought you finished, sorry over to you.

Sir, should I ask all together?

No, no, let me answer the operating cost piece first, you can ask your next question. Would that be fair? See, on the operating cost, we've already guided for around ₹50-odd crores a quarter. Now the minute you launch 6 businesses, and you launch 400 new branches, there will be a temporary percentage to AUM increase, while our AUM is going to be very robust. But as a direction, a year down the line, which means March, 12 months later, we are internally aspiring to see a decline of the operating cost to the percentage of AUM. So, I've set a prudent measure, prudent levels reflecting operational efficiencies and scale. Internally, we put on ourselves that we probably should be in a position to have an operating cost with a slight declining trend. 2The reference stands corrected to ‘the write-offs which we have done in Q3FY25’.

Okay. Sure, sure. And secondly, on the capital, if I look at the capital consumption, so we have almost consumed 1,100 bps capital during the year. And now we are around 22% on capital adequacy. So, in this year, can we see, given the strong growth momentum which you're looking at and the limited ROE profile, do we expect any fundraise in the near term?

I think if I look at the crystal gaze, and we probably would look at early next year.

Sure, early next year means calendar year, yes, right?

Yes. We'll see calendar or financial year.

Okay, sure.

We're not giving any guidance on that, Chintan, let's just keep that open.

Sure, sir. That is fair. And just lastly, on this environment, if we see many players, they have been reporting some inch up in the asset quality in some line there. But given that we are growing at a very stronger pace and getting market share, so do we see any risk to our growth or probably if things are to go back, do we trim our loan growth estimates from here on? Could that be a possibility?

See, if you look carefully at the minute details other than the fact that this management team has a fantastic credibility with the distribution, which is playing out very well with our growth. We are also, if you notice carefully investing in digital journeys. We're investing in 24x7, across the salaried, we're working on something on the business loan, which are probably the first of its kind. We've launched 6 businesses. All these 6 businesses, even if you look at the base effect, you might see the percentage of AUM growth on the robust level and the whole idea of diversification was, one, from a risk perspective, which is priority one. When you have 10 to 12 products, the diversified risk is substantially more manageable at all times in years to come. And the second is if you want sustained profits and sustained growth, you need a representative pool of businesses to help you grow. So, our confidence is that the base we are at and the kind of products we have launched I think the guidance is, if you notice also, Chintan, every guidance that we gave even 10 months ago, despite the multiple challenges, as a team, I think we've stood by or exceeded most of them. And that's going to be our endeavor from here on as well. We see robust growth ahead. And I think if the economy is operating at healthy rates the way it is right now, I don't see any concern.

Sure. And just sir, lastly...

The asset quality -- gets stronger, both on the quality of risk and asset building.

Sorry, over to you.

And just lastly on the ROA for FY27. So, any ballpark range on what kind of ROA are we looking for FY27 or FY26, given that it would be a robust year? And the ROA range probably for the secured business and the unsecured business, if you could just give any ballpark ranges that would be helpful. That's it from my side.

See ROAs will, in my view, keep improving because remember one thing I've said that our new STPL book also, we've started building, which is fairly decent ROAs. Our business loans are moving up quarter-on-quarter. So, I think we are very optimistic. I've given a clear guidance of 3%-3.5% in 3 years from the day I joined, it's 10 months gone, so you can subtract and do the math. We are looking at 3% -3.5%. So, I think you will, at some point, start inching upwards. The AUM, I can assure you, are all being constructed at 3-plus percent ROAs and fairly robust sensitive to the ROA models that we are trying to build. So, I think it's more about mixing of the portfolios and gradually with every quarter getting better.

Sure, I think this is very helpful, yes, so I think that's it from my side.

Even our guidance for profit for FY26-27 looks clear and strong, which we had given last quarter. I'm just reassuring that it looks fairly on robust scale.

Sure. This would be largely on the back of lower opex and improving credit cost, right?

Yes. So opex in 4 quarters, I think , we should measure of that opex in my limited view every March for the next 5 years, and we'd like to keep an efficiency improving every year. That's going to be our internal passion, internal what we assess is something we could pull off. And I think we are working on a very well -calibrated model and fairly tightly measured. And every step that we take, we are trying to make sure that our commitment stands strong. Now with 10 months, you can measure as well on all the commitments we gave and what we've achieved so far.

The next question comes from the line of Abhijit Tibrewal from Motilal Oswal Financial Services Limited.

Just wanted to understand 2 things, sir. First thing first, I mean, how are we thinking about distribution? I recall when we had put out the press release for the launch of our gold loan business, we had spoken about, I think, 300 to 400 branches that we p lan to add. But how are we thinking about approaching the distribution for the other 5 newer businesses that we have launched? That's the first question. And the second thing is, sir, when you joined, you had spoken about opex to the tune of about ₹50 crores higher for the next 6 quarters. Is it going to be the same trajectory? Or are we looking at maybe accelerated opex for the first few quarters and which is where we talk about opex to AUM declining significantly by the exit quarter, Q4 of this fiscal year?

All right. Let me start with your second question because I gave some color to it just some time back. I think on the operating cost, it might go slightly higher in the next 2 quarters, and then it will start tapering down is my assessment. And like I said, Q4 this financial year, we should be able to get fairly prudent levels vis-a-vis this March to next March, and we should be on pretty solid expectations in terms of efficiencies and scalability that we are trying. That's one. Your first question was regarding distribution of each of the businesses. See, each of the businesses, if you see carefully, has a very distinct distribution. For example, branches which we are opening are going to be gold loan branches. So even if you see these branches, they have a headline of gold loans. So, they're going to be focused gold loan branch. If you look at each of the business, consumer durable is more at a point of sale. We are focusing on Tier 2, Tier 3 cities. And we've received very robust feedback and promising start that we've had. Our risk calibration is very tight. So, at the point of sale, I've said around 10,000 to 12,000 outlets is what I'm looking at within the 4 quarters. It will give us massive visibility and business. If you look at Kirana stores, it's going to be shopkeeper loans. We could have 1 to 3 people depending on the catchment running a unified direct channel, just sitting there, not customer - facing, but utilizing the space for business loan, LAP and Kirana sto re, which we will utilize it for good ROA combined business. And commercial vehicle, obviously, the business runs at dealerships, and that's the point of sale like you have consumer durable dealers. Commercial vehicles, we've given you an idea about a couple of them that we've already started business in a robust manner, and we are scaling that up. So similarly, I think each business has a very precise plan. On the personal loan side, we are focusing a lot, not only on the DSA network, but we are very excited about the 24x7 product for top corporates and the scale we are building. So, as I talked to you, we're already seeing business happening every month on an end-to-end fully digital. And if you see the micro details of the industry, most banks, or for that matter, most of the industry players are not able to pull this off. At Poonawalla Fincorp, we've already managed to walk this road for an external customer. And like I said that one of the biggest strengths of Poonawalla Fincorp will be using digital journeys, risk-first approach, risk analytics and AI, in our assessment of external customers with technology. I think that's going to be a very strong tech competing edge for us. And this is not a theory anymore. We can see this monthly, daily, business run rates have started kicking in. So, I hope that gives you a quick sense.

Sir, and just one follow-up on the?

I said we are not seeing any surprises. We are on course to what we decided to achieve and whatever guidance we are giving you, seems to be we are walking that road. Statistics will all fall in place as long as we keep galloping on whatever we are promisin g you. I see that as a strength. Now with 10 months down the line, it's much easier to see ahead. It's a clear road ahead for us now, the way I see it in my limited view. Sorry, over to you.

Got it. Got it. And sir, just one last question that I had on the opening remarks that we gave. I think during the call, we shared that 80% of the residual STPL book is now zero DPD, and we are not expecting any additional stress from the residual STPL book. So, suffice to say that, I mean, going forward, maybe in the next couple of quarters, there will be no accelerated write - offs or higher credit costs coming out of the residual STPL book?

I think if you carefully go through the transcripts of what Shriram explained, 2 things in my understanding, which we look fairly confident on. One is we've not done anything which is called accelerated write-offs. We've just had normal flows. There's been no surprise this result per se in terms of the way we move quarter -on-quarter in terms of whatever guidance we gave and whatever confidence so far we've been ex uding. I think the worst is behind us in a limited sense, he told you the credit cost technically in the quarter is visibly down. He said 80%, if I'm not mistaken, is looking zero DPD of a book, which is probably 7.9% or 8% of the total. So that used to be, I think, 24%, 22% or something.

21%.

21%, and it's down there, and I'm expecting that to rapidly reduce as we proceed in this quarter. And I think , I heard him say that this is -- we look totally in control. And I think collection efficiency is rapidly improving. And I think the best test is you've seen the credit cost decline itself probably validates that. To answer to your question, I think the worst is behind us. And like I said, the horses on the courses. And I think we're galloping with a clear view ahead is my assessment.

Got it, sir. That's all from my side. And I wish you and your team the very best.

Thank you so much.

Ladies and gentlemen, we take that as the last question and conclude the conference of Poonawalla Fincorp Limited. Thank you for joining us, and you may now disconnect your lines.