Thank you very much. We will now begin the question and answer session. Our first question comes from the line of Dev Dey with HorsePower Securities.

Heartiest c ongratulations to you for maintaining the performance up to the level expected by us. And excellent set of EPS numbers. So again, I would like to ask you about the road map in future. So what would be the net order loan book you are targeting by the end of this year?

Yes. So now Dev ji, thank you very much for this question. What we are looking at is , what sort of funding resources we have, and that gives us a lot of comfort as to our liquidity available. So now moving forward, we endeavor to grow at a little above what the industry would be growing at and which is what makes us happy is, it could be in the range of may be 15% to 17%.

And my another, question would be just a few days ago, your Board has passed a resolution regarding the raising of capital, if I am not wrong?

Yes. So as far as the capital is concerned, this is an enabling or enabler for us to keep in readiness. But at the moment, we have sufficient cushion to grow for the next maybe 3 or 4 quarters . But at the same time, we are keeping ourselves open, and this is a market where we keep looking at opportunities. And if there is an opportunity for increasing our capital cushion, we would definitely not mind doing that. And that is where we kept the enabler in place.

And we also have this thought process within ourselves that if our peers are better capitalized than us, is there a point where we should be looking at increasing our own capital, but at the moment, we are comfortable. That's the point I would like to make.

Okay. So, by the end of this year, are we going to see, very pleasant picture by the end of FY27? What is the view of management?

Dev ji, I didn't get you. What was it you said?

By the end of 2027, will we be able to give a very pleasant picture about this Bank?

Yes, we are quite confident the way we are seeing the last few quarters.

Sure. Let’s, hope for the best.

Our next question comes from the line of M. B. Mahesh with Kotak Securities.

Good afternoon sir, 2 questions. One is on the entire FCNR Deposits, just wanted to understand how are you looking at that underlying opportunity? And where are you positioned on it currently?

On the FCNR, Mahesh, a couple of things I would like to mention. One is there is a very strong demand that we see. And this comes from 2 aspects. One is the aspect of the pure Deposits that come in. And second is the aspect of leverage. On both of these, we are seeing very strong demand. And for the leverage part, you may be aware that we need to have certain limits in place. And whatever limits we have already got, we have filled them also on the leverage part. As of now, we have decided that we'll keep it to 9% - I mean 9x. And going forward, we may change the leverage also if we feel that the market would look at us that way. If there is an expectation that we should raise it. But otherwise, as of now, we are keeping it at 9x. Though I cannot give a specific number to it, Mahesh, we are quite ahead of the market, I would say, or some of the other banks.

Sir, just one clarification. On this product, would you be getting any support from your largest investor at this point of time? Or is it still a very arm’s length kind of a transaction that is happening on the ground? Second is that how...

Sorry, I'll answer this. For this particular transaction, we are not having a constraint of any arm's length. And we are in the process of working out certain limits. So, we are looking actually at getting something out of that.

And how easy or difficult is it on the ground today? Or if I were to ask, what is the constraining factor for this product not having picked up as much as one would have expected it to be.

So, if you just think about what's playing out, there are 2 macro themes playing out. One, the borrowing spreads globally have inched up, let's say, for the overseas financial institutions to take a macro view on India for a 5 -year period, the spreads are higher now. That's number one. Number two, it's also a function of where the Global liquidity is sitting. As you think about it, it's not that it is equally available everywhere because ultimately, some overseas geography or in a set of geographies will have to fund India for the size that we're looking at, for which the risk limit has to go up by that much leverage. So, it is a function of the process of the risk review and the limits getting set up across different institutions for a period of 3 years to 5 years in a manner that is also commercially viable and conducive is I think that play is underway, and therefore, it has not been as fast as one would have expected because there are also macro themes of geopolitical issues going on.

Perfect. Vinay, sir, you have seen this company now for close to 5 months. And could you tell us in terms of having seen this now for a little longer, the issue that we are seeing from the outside is that the margin is the key problem, there are two sides. One, we understand the cost side. There is also a problem on the yield side. So, do you have some thought process on how does this improve from here onwards? Or do you think that you will still need some more time to give an answer to this?

No, answer I have and of course, this is one of the most important priorities for us also as I came in here. And both these initial thoughts which I had, the drivers of how do I expand the margin, and they're working fairly well, what I have seen in the Q1 . See, basically, you are also aware that since previous financial year April, we have actually substantially come down on the Cost of Deposits. And that has played out very well for us without actually resulting in any attrition of Deposits, right . So, this is something which gives me a better pricing power. The Cost of Deposits going down, the Cost of Funding going down gives me a better leverage on the type of Assets we are picking up. And also at our discretion, we are also looking at products which are increasingly giving us more yield, right. So, I think that way, this is something which is not too much of a worry for us right now for the NIM expansion.

Okay. And you do have any number in mind for, let's say, in FY28, where do you want to see the margins?

Yes. I think north of 3% is something we would be able to achieve.

Hello. Namaskar sir.

Namaskar, Narendra ji.

Thank you, sir, first of all for giving me the opportunity to speak. Sir, we have been observing for some time that our Bank is not able to grow the CASA Deposits ratio as it should, whereas a Bank of our size like IDFC First Bank is growing CASA very well. So, what are the reasons for that? Please look into it because sir, I think that in the coming time, there are many large-sized multiple IPOs coming like NSE, Jio, etc., and a large number of investors will deposit their money in our Bank to subscribe to those IPOs. So, sir, let's plan something like our Bank's cut -off time for filling IPOs is 3:30 PM, whereas IDFC Bank gives it until 4:30 PM and State Bank of India keeps the time until 5 00 PM. So, sir, why don't we plan such a thing to increase our CASA? Like sir, I told you a year ago as well, IDFC Bank has increased its customers by doing aggressive marketing and from there you see how its CASA Retail has grown. So, sir, let's also plan something like this by increasing our timing and aggressively taking Retail customers to growth, so that when large IPOs come, once a customer has opened an account in our Bank and kept a balance, then they don't transfer to another Bank very quickly. Please pay attention to this, sir. This was my suggestion that the Bank can grow well in Retail from here, sir.

Sir, thank you very much for your suggestion, and we will definitely work on it. Thank you.

Because there is a lot of trouble, sir. Many times, for us as well, in the last moment, many IPO subscriptions are left, so it causes a lot of trouble, sir. Please pay attention to this, sir.

Definitely. Thank you for your suggestion, sir. We will definitely work on it.

Our next question comes from the line of Sajal Raj from Zenflow Finance Private Limited.

Good afternoon sir, my first question will be Advances have grown faster than Deposits this quarter. So how do you plan to balance loan growth with Deposit mobilization going forward? Should we expect Deposit growth to catch up over the coming quarters?

Thanks for the question. So, Advances growth for us is, yes, certainly higher, but we said that in our opening remarks as well that we always go through some transient flows or movements on the end of period balances. And therefore, a metric that we internally track is actually the daily average balances. And if I see the daily average balances for both Advances and Deposits for June quarter versus March quarter, the CD ratio actually has remained the same. So, there's not

been a worsening CD ratio. In fact, both growth rates for Deposits as well as Advances are in line. Number two, and it's a very important principl e question that we will continue to focus on liability-led Balance Sheet expansion. The idea is never to really aggressively pursue Assets in the absence of a Deposit construct. And you would have seen that over the last 3 years, our singular focus has been to continue to improve the quality of our Balance Sheet. So, improving the CASA ratio, getting the higher share from Branch Banking or Retail Deposits have been areas of focus, and that's getting reflected in our Cost of Deposits as well. So, if you look through the last 3 years, our Bank actually has possibly delivered the best outcome on Cost of Deposits as compared to the industry at large. So, I think that's an area that we are absolutely focused on. And I think your point is absolutely well taken that Deposit growth will be an important constituent, and we will make sure that we are not accelerating on Advances in the absence of Deposits.

Our next question is from the line of Shreyas Pimple from Nomura.

Good afternoon sir and thank you so much for the opportunity. My question was on SR recovery. In this quarter, we had SR recoveries of around INR 86 crores versus last quarter of around INR 446 crores and higher in the previous quarter. Can you explain what is the reason for lower recoveries this quarter?

So, Shreyas, thank you for the question. So, on Security Receipts, I think absolutely a right observation. We have had SR redemptions at INR 86 crores as compared to INR 450 crores. We have also been saying that the face value of Security Receipts, which is now outstanding at INR 1,500 crores, it's coming down, right. So, the recoveries that are going to come through are going to be a little bit more unpredictable, not that there is no stored capital or stored value sitting in the Security Receipts book. It is still very much there. So, we have a face value outstanding of INR 1,500 crores. Against that, actually, the NAVs are upwards of INR 2,000 crores and NAVs are today's present value. So, if you actually look through from a Gross Recovery standpoint, the number could be slightly higher than that. But the resolution is a function of what J.C. Flower does, their execution, and we have no control on the pace or the timing of those executions. So we will go through these periods where one quarter could have a higher Security Receipts resolution. In another quarter, we may have a much lower. But at a very structural level, we said that during fiscal '27, we do believe, let's say, anywhere between INR 800 crores to INR 1,000 crores for the full year should be a number that we expect to come through. But as I said, I want to caveat that, it's finally a function of what J.C. Flower does. So it is possible that we could get higher than INR 800 crores to INR 1,000 crores. It is also possible that we could also be slightly lower.

But our sense is INR 800 crores to INR 1,000 crores should be a reasonable probability to ascribe for fiscal '27.

Yeah. Thank you so much for that explanation. My second question was on one -off in Net Interest Margins. You highlighted that INR 119 crores of interest on IT refund. If we remove that, the margins are down around 6, 7 basis points according to my calculations. Can you explain, I mean, what are the things that will help us improve margin from here on?

So Shreyas, I think one clarification is that Interest on Refund actually forms part of our Non-Interest Income and not part of the Net Interest Income. Although it is Interest on Income tax refund. We do not include that as part of the NII line. And therefore, it's also not part of the Net Interest Margin computation. So to that extent, there is actually no adjustment. Our Net Interest Margin continues to be stable on a Q-o-Q basis.

Understood. Thank you so much for the explanation. Those were my questions.

Thank you.

Thank you. Our next question comes from the line of Jai Mundhra from ICICI Securities.

Sir, I wanted to check on your capital raising plan. We have a Board approval in place. And we also have a court case, which is pending. The outcome is still pending. We have a decent 14% CET-1, but just wanted to check your time line and quantum. And would this have any bearing from the court case?

So Jai, first quick clarification, which is your second part of the question, whether this capital raise has a linkage with the Board with the AT1 case. So we follow a practice of having an enabling approval in play. And that is something we've continued f rom last year. So we had the same approval for fiscal '26. We also have the same approval effectively for fiscal '27, actually till the date of AGM. So it is not a trigger of any particular event or court case. I think that's the first clarification. The second point is at 14% Core Equity Ratio, we do believe that we have reasonable capital for at least the next one year of growth. What gives us that confidence is also because we do have the Deferred Tax Asset (DTA), which is available to us. So one, the ROE structure itself is improving. So let's say, a ROE of about 8% to 8.5% is accreting to my capital. But more importantly, the effect of DTA on that ROE is also playing out, meaning the Bank is able to actually grow at anywhere between 12% to 13% of Risk-Weighted Assets and not consume capital, right.

And therefore, even if the growth were to be in excess of 13%, let's say, 15% to 16%, the quantum of consumption of capital is lower. So the limited point I wanted to make is we believe 14% is reasonable for the next 4 quarters of growth. Having said that, capital is a subject that the reason we keep an enabling approval is because sometimes capital you want to look through raising capital, which can take the 14%, maybe in line also with some of the peers because it also adds to buffers, right . And we've kind of track some of the other banks, that's the way, let's say, r ating agencies also look at us. More buffers are always good. And that's something we've worked on over the last three to four years. So if you go back to our last capital raise, we had actually raised it when our CET-1 was at about 11% to 11.5%. This time around, clearly, we don't want to drop to those levels. We will raise it, let's say, in the 13% handle. So we want to keep adding to our buffers as well. So whenever we think that opportunity is right, available with right players that is in the interest of our shareholders, we do want to keep that optionality available to us, hence, an enabling approval.

Sure. Thanks Niranjan that is very helpful. And regarding the court case, of course, this is a matter and we will be hearing from the court itself. But has the Bank - I mean, there's no pending provisions, right? I mean if it comes, it comes, right? there's no backup for in case the decision is adverse, right? That is how it should be?

So there is no adjustment to our financial statements on account of this court case at this point in time.

Right. Okay. Secondly, on the Retail growth, right? So overall growth has been strong. We are now 18%, which is slightly higher or maybe similar to system. But that seems to be driven by Corporate in a large part. Retail is still 7% types. So what is your strategy now Retail Slippages also seem to be multi -quarters low. How should one look at the Retail growth for, let's say, FY27?

Retail is actually on a very strong wicket and largely one of the reasons being that the Slippages are under control. And last one year, we have really worked on the platform, scorecards and also policy refresh. So from here onwards, the trajectory from being flat to a 7%. So this is one journey which you look at from a book perspective. But on an incremental basis, actually, this is a business which is growing between 25% to 30% depending on segment to segment. Where our portfolio remains flat for a year or so, the book takes some time. But on the momentum on the fresh business, we are in a very steady state at a good state to be in a good range of 25% to 30%. Now this will start reflecting in the subsequent quarters when it comes to the book growth point. But right now, we are very, very strong on the disbursements.

Okay. Sure. So I mean, can we reach like mid -teens number by FY27? That is how at some point of time, the disbursement will translate to loan growth, right?

Yes, sure. Absolutely. We are working towards that as well.

That's helpful. And secondly, on recovery target, sir, I mean, if you can specify either from SR Recovery and Overall Recovery, we used to have an INR 5,000 crores-odd- number. But of course, after that, a lot of recovery has already happened. So what would be your sense for FY27 recovery numbers?

So the other recoveries that we were talking about, one of the reasons we were talking about the gross recovery number at that stage was because some of it was also predicated from the corporate resolution. To be fair, I think we would not ascribe a lot of value now to the corporate resolutions because that story is behind us. So what we now sit with is really the J.C. Flower ARC and which, like I mentioned, as compared to last year, about INR 1,500 crores, at least we do believe that anywhere between INR 800 crores to INR 1,000 crores is something we should see in fiscal '27 also playing out. On the Retail Recoveries and Upgrades, that is anyway now forming part of the Net Credit Cost structure at the NPA. So we are now segregating that and grossing up to give you a headline number on the Recoveries and Resolutions. So I would say a very focus for us is really on the core ROA now. We said this last time as well. Our objective continues to improve the core ROA meaningfully. Our expectation is fiscal '27, we should see a 15 to 20 basis points expansion in the core ROA. And if the resolutions, let's say, the external factors on bond gains and trading with all of those elements also play out, I think we should be able to also deliver the fully reported 1% ROA for fiscal '27.

Right. That is very clear. And Niranjan, lastly, if you have the Expected Credit Loss (ECL) transitional estimate as to what could be the onetime transitional impact for Bank as you transition to ECL next year? Thank you.

So Jai, again, we've not publicly disclosed those numbers yet because we are in the process of putting that together. The ECL number, we've said for us has an offset component from the Security Receipts. So for us, if you allow us the benefit of Security Receipts, actually, there is no impact on ECL. However, what's going to happen is that the ECL adjustment for Security Receipts will not be allowed in the Balance Sheet. So we have to keep taking that through the P&L for the year. So at the gross level, there is likely to have some ECL impact. We don't expect that to be very material. Also adjust or take into account the fact that the new circular is also coming in on credit Risk-Weighted Assets from 1st April. So when we kind of look at both these circulars

together, which is the ECL transition impact and the new Capital Adequacy - credit risk weights, we do believe that the impact, if at all is not going to be material on our core equity. So I think that's really the headline message, but we will come back during the course of this year as we firm up these numbers so that we can give you a better visibility of what impact could play out.

So now, that is very helpful, Niranjan. Thank you and all the very best.

Thank you Jai. Thank you very much.

Our next question comes from the line of Shreyanth KT with Sundaram Asset Management Company. Please go ahead.

Hi. Good afternoon team. I hope all of you are doing well. Just a quick question. I believe you had called out earlier that you're going to be more cautious in the Commercial Banking MSME segment. But then I saw that the Slippages have gone up actually. So could you point out is there any specific segment or cohorts you're seeing stress? And like what is the situation on the ground and impact from the recent Max situation?

So our Commercial Banking portfolio continues to be of high quality. And the Slippages are quite controlled in Q1 as well. And while we continue to assess and monitor the portfolio very closely for any impacts of the West Asia war, but happy to report that there is very limited impact on the portfolio and the clients have managed this crisis very, very well. So in a nutshell, the portfolio quality continues to be very good.

Okay. Perfect. And quickly one more. Just on the Retail, again, you’ve already answered some of my questions over there, but just a few more things. One is what products are you planning to be more aggressive on going forward? And where are you being more cautious? That's one. And second, the disbursement number being lower, is that just seasonality or can it be attributed to any other reason?

So, I'll take the second question firstly. On the disbursement, on a Q -o-Q basis, it is actually the seasonality because March typically is very high, plus there is an element of co-lending or partnership -led disbursements that kind of come through. But at an organic level, I think we continue to be quite similar levels this quarter as well. If I were to, however, bring your attention to the Y -o-Y growth in disbursements, that is actually close to 30%. So, we're quite looking at continuing to focus on growing the disbursements because we know, it is a matter of time before the disbursements will start resulting into the book growth because right now, the run -off factors are also there. But as the run -off start tapering because we had slowed down the loan book between '23 to '24, '25. We started slowing that down.

So as the run-off starts slowing down, these disbursements will start also resulting into a book growth. And we do believe, I think that's about 3 to 4 quarters from now, that we should be able to deliver a double-digit growth as well on Retail.

Okay. Perfect. And regarding the product strategy within Retail?

So, from our side, there is a multi-product. So, to begin with, when you think about us, Shreyanth, you have to think that we are an all -weather universal structure of Assets. It's not that we are dependent on any particular product. So, when Retail has been slower, we have the ability to work through the Corporate engine or the Commercial Banking engine. So likewise, within Retail, we also operate with multiple products. And therefore, it's also sometimes a function of where we see this growth tapering off. So, for example, Personal Loans, we had slowed down quite meaningfully over the last 2 years, but we are now again growing that book. But there are certain channels through which we are growing faster than other channels. So, I think that's one part. The second, there are certain products like Loan Against Property (LAP), where we will continue to do because we did well in the past, and it's a product that will continue to grow. Then there are products that we are now calling it as franchise products, where , as and when our customers will need, let's say, a Home Loan or an Auto Loan, I think these will be products that we will also be willing to offer to these. So, you combine all of this, and add to it the fact that we also have co-lending structures in place. It is going to be quite diversified product mix. I think certain guardrails with which we operate is, for example, the secured, unsecured. So we will not allow a whole lot of unsecured to be dominant part of this. So typically, let's say, it's a 75 -25 ratio, we will ensure a 75% secured versus 25% unsecured kind of Retail. So, I think that's really the broad theme. So, I'm not sure if you got the gist of the answer, but I think, it will continue to remain largely diversified.

Okay, perfect. Thank you so much for answering all the queries and wish you the best of luck going forward.

Thank you.

The next question is from the line of Rama Subbareddy, an Individual Investor. Please go ahead.

So, my question is like recently, Board has approved a capital raise of INR 16,000 crores where 10% equity dilution. So how do you ensure that the existing shareholders will not be impacted with that kind of capital in the future? Because if you see earlier, right, we were like okay, basically, you have given a lot of discounts fo r the new shareholders such as PE investors. And even SMBC also, they got in good price.

So in future, when you are raising this equity, so how do you ensure that existing shareholders are not going to be impacted? Because we have been staying for the last 6 years and you have not paid any dividends. And still we are expecting the Bank will deliver the good numbers and been waiting for so many years. And you have to take care. So that is my concern. So, can you please address?

Thank you very much for the question. And first and foremost, thank you very much for being a patient supporter of the Bank over the last many years. Our objective clearly has been to solve for what we think is the right strategy and the right quality of the Bank. And you would see that over the last 2 to 3 years, the performance of the Bank has continued to improve. We had always stated that the Bank will deliver an ROA to exit FY26 with 1%. I think we've delivered that as well. And there are clearly signs of sustenance that's playing out as well. Now as the Bank continues to grow, there will be need for capital because when we compare our Core Equity Ratio compared to others, the other banks are also higher than us. But there are going to be levers that the Bank will continue to use to make sure that we are not compromising or it is not coming at the cost of shareholder value. I think that's also an important factor that we consider when we think through elements of capital raise. Having said that, what I want to clarify, which I did in one of the previous questions, is that this resolution is an enabling resolution that we are seeking. This was a resolution that was also approved by the shareholders last year, and we are only refre shing that enabling resolution. This resolution only gives the Bank the optionality to trigger a capital raise in the event we believe that the raise is going to be beneficial for the Bank for its growth and ultimately for creating value for its shareholders. And that's really the objective with which we have gone about taking this resolution.

Thank you.

Our next question is from the line of Sunil Choksey with Indus Equity Advisors.

Congratulations on stable results. Sir, I have a little different question than normal analysts would ask. Prospects for India, Japan businesses are getting better every day. Infrastructure financing, Japan is taking a big lead in India, be it bullet train, maybe now shipbuilding, many other aspects. Trade is concerned, India is likely to do much better with the country. And there are certain other specific government-related industry like defense and many other aspects also taking place. Can you throw some light that being a preferred partner in our Bank, we have some scope of business growth in the Indo -Japanese business corridor?

Thank you, Choksey sir. Thank you for this question, which you said is a little different to what normally we get in the analyst meet. See, a couple of things which we observe now is that the Indo -Japanese corridor itself is getting strengthened, year afte r year. And particularly after the recent meeting, inter -government meeting, which happened and also between the Prime Ministers as well as the trade teams, we see a lot of traction happening, much more than what has been seen in the last few years, I would say. And now with also the agreements that are in place, the corridor gets busy, that's for sure. Now the aspect of how we would be leveraging our partnership with SMBC is something we have already started working upon. We already have some Memorandums of Understanding (MOUs) in place. And eventually, our endeavor is to get the max that happens in this corridor between these two countries, should happen through our Bank. So this is our endeavor, and that's what we are already working towards. And there are certain specifics which at this point of time, I'm not able to mention because of confidentiality reasons. But otherwise, we are very strongly working on these aspects, be it trade or be it investments or what you rightly said that there's a lot of infrastructure investment that is coming in from Japan into the Indian projects. And there is also a lot of interest that is seen from the Japanese corporates establishing some project or the other in India, be it in the form of a wholly owned subsidiary or a joint venture or even some distribution channels out. I hope that answers.

Yes, that answers. At least there is some visibility visible in your comment.

Definitely. Definitely.

It means that we have a very good partner where the Government of India ’s new scheme for FCNR (B) by RBI is visible. I am quite sure that we should be doing well because people tap Japan very often for the yields and the rate. No doubt the Japanese are looking upward trend right now. FCNR (B), we should be doing much better than most of the other banks. I had missed the question because there were too many calls at the same hour. So, pardon me for that. Sir, any color which you think you woul d do on a leverage trade or a straight deposit?

Yes. So in fact, you're right that this question had come up in the earlier part of this. But then what we are looking at is a max leverage of 9x at this point of time rather. So we will perhaps be sticking to that. And we are seeing a lot of interest that is coming in from various geographies, and one of which is towards the East also, importantly for us. And now whatever limits we had for the leveraging, one aspect is, of course, getting the Deposits, the straight one is to one sort of a Deposit, there is a pureplay FCNR (B) Deposit. That is something which we are absolutely no constraint. We are getting quite a bit, which happens in our Branch Banking franchise.

The leveraging part is something which we are also looking at fairly strongly, and we see a good growth that has already happened. And further growth will depend on the limits which we get from some of our partners or the foreign banks. Thank you, Choksey sir.

Thank you, sir. Thank you for answering all my questions and good luck for the years.

Thank you so much.

Ladies and gentlemen, we will take that as a last question for today. I would now like to hand the conference over to Mr. Vinay M. Tonse for closing comments. Over to you, sir.

Yes. Thank you very much. And to all the participants in this call also, I would like to convey our sincere appreciation for coming in and joining us, knowing fully well that today is the day of many Bank results that are coming up. Thank you very much.

Thank you. This brings the conference call to an end. On behalf of YES Bank, we thank you all for joining us. You may now disconnect your lines.