Good afternoon, everyone, and warm welcome to Q1 FY 2027 earnings call for Capri Global Capital Limited. This is Hardik Doshi, Head - Corporate Finance & Investor Relations.

Before we begin, let me read out a brief disclaimer for today's call. The discussion on today's call regarding Capri Global Capital Limited's earnings performance is based on judgments derived from the results declared and information on business opportunities available to company at this time.

The company's performance is subject to risks, uncertainties, and assumptions that could cause results to differ in future. In that context, participants on today's call are advised to consider the same while interpreting the results.

The complete disclosure is available on slide 65 of the earnings presentation. Participants are requested to kindly take the note of the same.

Format of the today's call would be opening remarks by the management team followed by Q&A. Let me now introduce the management team for the Capri Global Capital present on the call today.

With us, we have Mr. Rajesh Sharma, Managing Director and Promoter; Ms.

Divya Suthar, Executive Director - Business Strategy; Mr. Kishore Lodha, Chief Financial Officer; and Mr.

Sanjeev Shrivastava, Chief Risk Officer. I would now request our Managing Director, Mr.

Rajesh Sharma, to present his opening remarks on the results. Over to you, sir.

Yeah.

Thank you, Hardik. Good afternoon, everyone.

I hope you all are doing well. We announced our unaudited financial results for the first quarter of FY 2027 on 27th July.

I trust you have had the opportunity to go through our earnings presentation, which is also available on our website. Before I move on to the financial and operational highlights, I would like to touch upon the broader operating environment and key developments during the quarter.

Uncertain global geopolitical situation, energy security, oil and gold price volatility, rupee depreciation, and volatile capital market led to overall macro environment being soft for the quarter. However, Indian economy continues to be resilient and better placed amongst global economic economies supported by its relatively higher GDP growth expectation, strong consumption-driven demand, large employable workforce, and faster adoption to rapidly evolving technology landscape.

Amidst this soft macro environment, I am pleased to share that Capri Global has delivered yet another quarter of robust growth and profitability while safeguarding its asset quality. One of the major developments on the technology front is that we have now collaborated with OpenAI to bring enterprise-grade generative AI across key business functions to transform the way we serve our customer, empower employees, and build an AI-native lending institution.

Some of the other developments during the quarter were we established our first GMTN program for USD 1 billion global medium-term note, which will enable us to diversify borrowing mix going forward. Besides this, to establish our brand presence and to support our expansion plan in South India, we have now collaborated with renowned actor Nayanthara as our brand ambassador.

With this backdrop, I am glad to share that Capri Global continued track record of delivering strong performance quarter-on-quarter in Q1 FY 2027, delivered robust growth while achieving highest ever quarterly profit after tax of ₹353 crore, a 102% increase year-on-year basis. Let me now come to detailed business and earnings performance for the quarter.

We continued our strong momentum across all our lending businesses in Q1 FY 2027. Our consolidated AUM stood at ₹40,112 crore, reflecting a robust 62% year-on-year and 10% quarter-on-quarter growth.

Gold loans grew an impressive 111% year-on-year, and MSME grew at healthy 24% year-on-year, while housing loans rose 42% 42% year-on-year. Disbursements for the quarter rose 31% year-on-year to ₹11,114 crore on account of growing customer base and widening distribution networks.

Our growth remains granular, diversified, and retail-led, with our customer base now exceeding 7.6 lakh. For our gold loan business, we delivered strong and well-balanced performance, in line with our strategic objective of growth driven by geographic expansion and branch productivity, while maintaining focus on effective risk management.

Gold loan AUM saw robust growth to ₹19,179 crore, a sequential increase of 13% quarter-on-quarter despite the correction in gold prices, primarily led by healthy customer demand and improving branch productivity. Collateral weight in custody increased from 19 tonnes to 20.2 tonnes, an increase of 6% quarter-on-quarter, and number of active customers increased by 11% quarter-on-quarter.

Following the addition of 89 branches in Q4 and 196 branches in Q— FY 2026, our gold loan branch network during the quarter stood steadily at 1,000 branches, allowing those branches to mature and contribute to productivity. Our aggregate branch productivity continued to see strong gains and has increased now to ₹19 crore per branch versus ₹17 crore per branch at the end of previous quarter.

Our branch expansion plan for the year is underway, and we expect to add 150-plus branches by end of Q2, reflecting our commitment to expand our presence in Southern and Eastern India. On the employee front productivity front, while our AUM has increased significantly, our employee base increased only by 14% year-on-year, thus resulting in a significant improvement in employee productivity to ₹3.4 crore AUM per employee versus ₹1.8 crore a year earlier.

Despite the gold price volatility during the quarter, our efforts in controlling asset quality proved effective, with gold loan gross NPA at 0.3%, amongst the best in the industry, underscoring our focus on portfolio performance for the gold loan business, combining growth through capitalizing on vintage of existing branches while maintaining discipline on asset quality amid gold price volatility. Our MSME AUM grew to ₹6,779 crore, up 24% year-on-year, and disbursements stood at ₹616 crore for Q1 FY 2027, up 32% year-on-year, led by steady execution and network expansion.

Our branches that opened in Uttar Pradesh in Q3 FY 2026 are scaling up well and have started delivering ₹18 to 20 crore disbursements per month. We are further expanding our footprint into Telangana and Karnataka, with 16 branches scheduled to become operational from Q3 of this year.

Within MSME, our micro-LAP business, which enabled us to serve emerging self-employed borrowers with smaller ticket size requirement, is seeing steady growth, with AUM rising to ₹876 crore at the end of Q1 FY 2027. On this segment, we implemented higher threshold for sourcing and selection of customers leveraging our data science capabilities, for example, a BRE and bureau scorecard gating criteria to disqualify non-eligible customer upfront.

On our housing, AUM stood at ₹7,815 crore, delivering a year-on-year growth of 42%. We continue to see resilient demand across the affordable housing segment, where rising income levels and low interest rate regime are driving demand for housing loans.

Our expansion into high-potential Southern India states such as Andhra Pradesh, Telangana, and Karnataka, with 30-plus branches in the last quarter, is showing good traction, with disbursement volume scaling up to ₹65 crore per month. This strategic expansion is step towards geographical diversification, increased portfolio granularity, and risk diversification while supporting improvement in yield over time.

Further, our yields in housing finance segment have been improving as a result of our continued focus on self-employed customer segment, which now comprises about 75% of AUM. Our construction finance AUM saw healthy growth of 40% year-on-year to ₹6,332 crore spread across 291 active projects, with an average sanction ticket size of ₹41 crore and outstanding portfolio ticket size of ₹20 crore.

The book remains granular, secured, and well-diversified by geography, reflecting our focus on working with mid-sized developers in metro and tier-1 cities. We continue to emphasize disciplined underwriting through rigorous due diligence and escrow-based cash flow management, ensuring a risk containment approach.

Our total branch network remained steadily at 1,433 branch branches locations in Q1 FY 2027, with plans to open around 400 branches for the current year. We will continue to invest in expanding our network and geographical footprint in line with our goal of becoming a large-scale, pan-India retail lender.

Now coming to earning per share earning performance, let me now provide an update on our core earnings. Our blended yield and spreads on net advances improved further in the quarter to 17% and 7.8% respectively, driven by increasing share of high-yield products, increase in our gold loan yields, and improvement in cost of borrowing.

Our net interest income for Q1 FY 2027 stood at ₹736 crore, up 79% year-on-year, driven by strong loan book growth and margin expansion. In line with our focus on building a diversified and resilient earning profile, we continued to strengthen our non-interest income stream in Q1 FY 2027, generating recurring quality fee income.

Non-interest income grew 28% year-on-year to ₹217 crore, contributing 23% on our net total income for the quarter. This strong increase was largely driven by growth in commission on insurance and car loan distribution.

In our insurance distribution business, we generated net fee income of ₹42 crore during the quarter. The continued investment in technology and digital transformation, established insurance insurance partnerships, and distribution capabilities is helping us strengthen Capri Care, our digital platform, as a scalable and customer-centric insurance platform.

Capri Care further expanded its product portfolio through the launch of 14 life and general insurance products in partnership with leading insurers, strengthening the platform's ability to offer comprehensive insurance solutions. A significant milestone was the expansion of the Capri Care as an open-market insurance distribution platform.

The growing POSP network has enhanced insurance accessibility beyond the lending ecosystem, providing seamless access to the distributors, connectors, and partners associated with the Capri Group, enabling efficient onboarding, policy issuance, and customer service at great scale. Going forward, we will continue to increase our insurance offerings for gold loan, housing, and MSME customers, while expanding into cross-sell of retail health and motor insurance through digital channels.

This digital-first approach is expected to drive higher insurance penetration and meaningfully enhance fee income contribution over time. Our co-lending and DA AUM surged 74% year-on-year to ₹801 ₹8,126 crore and 4% quarter-on-quarter, now accounting for 20% of total AUM, reflecting our strategy of capital-efficient growth.

Co-lending volume slowed down during the quarter and grew by 4% quarter-on-quarter on account of new co-lending guidelines coming to effect and requirement of partner banks to move to CLM 1 model. Of our 11 partner, 6 banks are already moved to CLM 1 model.

We have completed tech integration for new in arrangements with CLM 1, and we are in the process of migrating other partner banks as well. To further enhance capital efficiency, we are also leveraging direct assignment and PTC instruments, which is showing a good demand.

Given higher share of gold loan and the PSL nature of our loan book, our income from co-lending and DA for the quarter stood at ₹65 crore, from down 8% year-on-year, driven by lower disbursement volumes. Our car loan distribution business grew strongly, with origination of ₹3,282 crore in Q1 FY 2027, up 43% year-on-year.

With growing footprint and deep relationship across 13 partner banks and financial institutions, we have built a scalable platform with pan-India network, which has potential to monetize further for distribution of other products. On the expenses front, our operating expenses remained flat quarter-on-quarter.

This was mainly driven by only modest increase in number of our employees by 156 employees on account of branch and optimization, in line with our guidance and conscious effort towards improving operational efficiency. Our cost to income ratio further improved to 44.2% in Q1 FY 2027 compared to 49.4% in Q4 FY 2026.

This sharp improvement signifies the benefit of investment in technology, a vintaging branch network, and rising productivity, and improving operational leverage across our businesses. As a result of margin expansion, operating efficiency improvement, and strong traction in fee income, our pre-provision operating profit surged 17- 1% year-on-year to ₹532 crore for the quarter.

Further, we have continued our strong profitability momentum in Q1 FY 2027, delivering a robust PAT of ₹353 crore, up a strong 102% year-on-year. Our return ratios considerably improved during Q1 FY 2027, with return on average equity at 19.1% versus 13% a year before and return on average asset at 4.1% versus 3.2% a year before.

Coming to asset quality, now look at the trend on asset quality. Our gross Stage 2 assets increased by ₹385 crore, largely driven by increase of ₹373 crore in the gold loan, which is a low-risk in nature.

As a result this, our gross Stage 2 ratio for the quarter increased to 3.8% from 2.8% in previous quarter. At consolidated level, our gross Stage 3 ratio at 1.1%, and net Stage 3 ratio stood at 0.6%, which is amongst the top quartile in the industry.

During the quarter, our gross Stage 3 assets increased by 74 crore quarter-on-quarter, mainly on account of ₹31 crore increase in construction finance. Our gross Stage 3 ratio for the other segments largely remained in range of range-bound, with the gold loan at 0.3%.

Our impairment cost for the quarter stood at ₹62 crore, up by 16% quarter-on-quarter, and was 0.7 on average total assets, which is in line with our historical average of 0.6% to 0.8%. During the quarter, we increased PCR on construction finance segment to 70.5%, and PCR on consolidated level increased to ₹43— increased to 43.3%.

This is in line with our prudent provisioning policy of maintaining healthy PCR across segments and keeping buffer for evolving macroeconomic conditions in the form of management overlays. Coming to capital, liquidity position, and borrowings, let me now talk about our liabilities side.

Our borrowing increased by 73% year-on-year, and incremental borrowing sanction limits were around ₹3,868 crore during the current quarter. We added 5 new lenders relationship during the quarter, taking the active relationship now to 40-plus.

We also continued to diversify our core our borrowings mix by raising funds through capital market borrowing, such as non-convertible debentures and commercial paper, which now contribute to about 10%. During the quarter, we raised ₹3,868 crore from bank borrowing and ₹1,271 crore from non-convertible debentures and commercial paper.

As a result of our active effort on repricing existing borrowing, MCLR reduction, and optimize ALM through ALM through charging mix, our cost of borrowing has been consistent improvement quarter-on-quarter. Our balance sheet remains robust, with comfortable leverage ratio of 3.7x.

Capital adequacy ratio for the both entities remains quite healthy at 24.7 for the Capri Global Capital and 27.8% for Capri Global Housing Finance, thus providing headroom to support growth across business segments. Our liabilities are long-tenure, and our assets are short to medium-tenure, placing us in a favorable position on the ALM front, with cumulative surplus across all buckets.

Liquidity remains comfortable with over ₹4,037 crore in cash and bank balance, investments, and undrawn credit lines. Coming to technology, this quarter marks an important milestone in our technology journey.

AI had moved beyond being a capability we were building to become a capability that is delivering measurable business outcomes across organization, origination, underwriting, collections, and customer engagement. Today, every customer interaction is analyzed by AI, not merely sampled.

During the first quarter of FY 2027 alone, the platform analyzed 6.7 lakh customer calls, converting every conversation into structured intelligence. Beyond compliance monitoring, it identified customer behavior patterns, repayment intent, emerging risk signals, fraud indicators, and sentiment shifts, generating insights that strengthen underwriting, optimized collection strategies, improve customer engagement, and support targeted coaching for front-line teams.

Beyond digital interaction, we have also created a rich layer of physical intelligence during the quarter. Over 2.64 lakh geotagged field visits were recorded across sales, credit, personal discussions, technical evaluation, and collection activities.

Every visit is digitally verified and a location stamped, creating high-end high-quality field intelligence that strengthen fraud detection, validate process adherence, enrich underwriting and collections data, and provide a more comprehensive view on borrowers' behavior than digital interaction alone. Together, this creates a continuously expanding data ecosystem where every transaction and every field interaction feeds back into AI models.

AI volume scales the platform, becomes progressively smarter, enabling faster decisions, stronger risk management, and improving operating efficiency, creating a compounding technology advantage that strengthen with every customer interaction. Collection is where our AI platform delivers its most tangible financial impact.

Kronos 4.0 is now deployed across the entire collection portfolio, continuously predicting repayment behavior, prioritizing customer outreach, and optimizing the next next best recovery action through a self-learning decision engine. Every customer interaction feeds back into the model, making each subsequent intervention and more precise and improving recovery outcomes over time.

Supporting this is our in-house omnichannel engagement platform, whose throughout throughput has increased more than threshold, from 166 to 529 messages per minute, reducing campaign execution time by 53%. In the first 12 days of June alone, the platform reached over 1.3 lakh customers with a 95.5% delivery rate for pre-due communication, demonstrating its ability to execute large-scale, highly targeted engagement with speed and consistency.

Layered on top is our multilingual AI voice platform operating across 9 Indian languages, which analyzes every customer conversation for repayment intent, sentiment, risk signals, and promise to pay, while continuously enriching our collection intelligence. Field recovery has also become technology-led, with our geotagged collections visits providing complete visibility, stronger governance, and measurable execution on the ground.

The business impact is already evident. Nearly 90% of inbound payments across the organizations are digital, with MSME and housing finance exceeding 93%, reflecting a decisive shift towards more efficient, lower-cost, and data-led recovery journeys.

Further, approximately 35% of collections across the MSME and housing finance verticals are now managed through technology-enabled solutions, and the direct digital engagement with customers create a scalable collection engine that simultaneously improve productivity, lower service cost, strengthen risk management, and continuously enhance model performance on transaction volume grow, creating a compounding operating advantage. Underlying all of this is our API-first microservices architecture, processing nearly 70 million actionable API transactions every month and enabling real-time orchestration across origination, services, and collections.

As transaction volume increases, our AI models continually learn and improve, creating a compounding advantage rather than a static technology platform. Most importantly, these are not technology metrics.

The trans- This translate directly into faster turnaround times, lower operating costs, stronger control, and better collections, the four operating lever levers that ultimately drive profitability. Because every one of these systems improves as it processes more transactions, the advantage compounds with scale, making our technology platform an increasingly meaningfully competitive differentiator for the business.

In addition, as part of our collaboration with OpenAI, over the coming months, we will explore the implementation of secured AI-powered deployments and workflows tools to enhance customer service, knowledge management, and the operational processes across its branch network. In summary, four quarters ago, AI at Capri was about building capability.

Today, it is delivering measurable business outcomes. Before we open the floor for question and answer, let me sum up.

We're delivering a strong performance in Q1 FY 2027, with healthy AUM growth across our key lending segments, is supported by a diversified and predominantly retail secured plate portfolio. Profitability improved further during the quarter, driven by all-round performances across all metrics: robust AUM growth, improving margins, strong growth in the fee income, and opening leverage from our existing branch network, while asset quality remained resilient.

With a strong capital position and continued investment in technology and distribution, we are well-positioned to scale proficiently and confident of revi- revising our AUM target of to ₹65,000 crore by FY 2028 and consistent return on average equity of 19% to 21% and return on average assets about 4.2% to 4.7%. We shall now be happy to take questions.

Yes, please.

Hello, congratulations on a strong quarter. I just had couple of questions.

On the Stage 2 increase, can you please split the ₹384 crore sequential rise by segments? Is it recent origination or is it seasoning on older vintages?

Also why has the coverage been cut from 11.8% to 9.4% while the pool grew from 47%? What changed in the loss estimate and any mix shift into gold?

Thank you.

Thank you for your first part of the question related to Stage 2. Out of ₹385 crore which is increased in Stage 2, ₹10 crore have increased in MSME, ₹15 crore have been increased in housing.

Construction finance, it has been decreased by ₹13 crore. Gold loan, it has increased by ₹373 crore.

Thus, total increment in Stage 2 by ₹385 crore. Gold loan primarily it has gone up because the gold prices have on the lower side, and quarter-on-quarter basis we're seeing the 4% decline in the price, and that had resulted in more Stage 2 cases.

Thank you, sir. One more question on the project finance.

So ₹125 crore under DCCO extension, is it inside or outside the 0.7% construction finance GNPA? Also is it real slippage or just the new norms?

It is outside, and the construction finance GNPA is not 7%, 0.7.

0.7. Point 7.

0.7%, yes, sir.

It is outside the—

DCCO cases are not considered as NPA. They are still considered as standard.

All right. Thank you so much.

All the best for the next quarter.

Thank you.

Congratulation to the Capri Global, one of the leading NBFC. My question is Ms.

Divya posted one statement about the weak monsoon will impact on the gold loan increase. My question is if the monsoon comes stronger, then it will decrease the requirement of the gold loan?

What you say is, yeah, if the monsoon is weaker, some of the microfinance and marginal farmer will go for the requirement to meet their cash gaps by way of adopting the gold loan. However, I think the normal growth will keep coming, and in any case we've seen that on a steady state basis growing at 25% of book is absolutely possible.

Plus, we'll keep on adding the branches. The more new branches will add the more growth.

The growth will happen by two accounts: number one, from the existing branches in normal case about 25% assuming that there's no growth in the gold loan prices, plus the new addition of the branches will further add to this.

Thank you.

Hello, sir. Good afternoon.

I had a couple of questions. Earlier you had indicated plans to add around 350 dedicated gold loan branches during FY 2027.

However, the branch additions in quarter one appear to be relatively modest. Could you provide an update on the rollout plan?

Our rollout plan will be in Q2 quarter two about 150 branches, and then by balance Q3 we will add another 250 branches. Total 400 branches we should be up and running by Q3.

That is the plan, and I think plan is on the track.

Okay. Are you still confident with achieving the full year branch expansion target?

Should the addition be more back-ended?

I think as we predicted, as we communicated earlier, that branch expansion now we have revised upward to 400 branches, and that will be completed on or before December 2026.

That helps, sir. The gold loan yields have improved to around 18.6% this quarter.

Do you believe the current yield is sustainable, or should we expect some moderation of compared competition increases?

As a change in strategy, we have gone for the smaller ticket size and accordingly we changed our incentive plan to bring the attention on the smaller ticket size where the yield improvement is possible and which had taken place. I think next quarter also we will see some improvement in the yield, and current improvement have happened to about 18.5%.

I think another 50 to 75 basis further improvement will happen in the yield.

That helps, sir. Also the cost of funds declined by around 10 basis points during the quarter.

Given the current interest rate environment and your evolving borrowing mix, what scope do you see for reducing funding costs over the remainder of FY 2027?

I think FY 2027 we don't see much scope in the cost of fund reduction from this level. However, diversification perspective, we are already approached public issuances of the bond, capital market, raising the commercial paper, raising the refinancing from institutions and then bank borrowings.

Now some point of time depending on the market condition and we will also have set up the GMTN program, we can access that offshore dollar bond market. There'll be enough diversification effort have taken place, and we'll see that overall bank borrowing percentage will come down, but as regards the cost is concerned, I think cost will remain more or less stable during the remaining quarters.

Sir. Thank you so much and all the best.

Good evening. Am I audible?

Am I audible?

Thank you so much for the opportunity. My first question was on gold loan mix.

Gold loans now account for nearly 47%, 48% of the overall AUM. Considering the recent volatility and correction in gold prices, how do you see the optimal portfolio mix evolving over the medium term?

Do you have an internal target for the gold loan contribution to the overall loan book?

I think in the medium term, overall AUM mix should be about 55%.

Sir, got it. Sir, my next question is on MSME portfolio.

As a percentage of overall AUM has gradually declined over the last few quarters, could you elaborate on the key reasons behind this trend? Is this largely function of faster growth in gold loans or have you relatively more selective in MSME underwriting?

It was primarily because we were opening the new branches in the gold loan, and we wanted those branches to achieve profitability fast. All the credit line allocation of capital was towards the gold loan segment.

Keeping the overall growth in the range of about 50 50% to 60% annual growth, we have kept the gold loan on a higher priority, and accordingly we have kept a measured way of growth in the MSME segment.

Sir. Got it, sir.

That's it from my side. Thank you so much, sir.

Am I audible now?

Congratulations on very good quarter, sir. I had two questions.

Firstly, earlier we had targeted FY 2027 AUM target that was ₹47,000 crore, and now we have given ₹65,000 crore as FY 2028 target. Is it correct to assume that we are also increasing FY 2027 target and with an average of adding ₹3,500 crore each quarter?

Hello?

I think FY 2027 we we are on course to achieve ₹50,000 crore, and by FY 2028, ₹65,000 crore. You are right that quarterly basis— So, quarterly basis, it can be in the range of about ₹3,000 to ₹3,500.

However, the last two quarters are always higher than the the first two quarters.

All right. Can you please provide a product-wise breakup of the disbursements?

We will give you those data offline.

All right. Thank you so much, sir.

Hello, sir. Very good afternoon to you.

Sir, just a question on the organizational continuity. Sir, as we have seen over the past few years, we have observed a fairly elevated level of leadership transitions across the organization.

Could you help us understand how the board thinks about leadership succession and retention and whether the current phase of organizational evolution is now largely behind us? More importantly, what gives you the confidence that the company has reached a point where investors should expect greater stability and continuity in the senior leadership over the medium to long term?

I think if you see in totality, all the business heads who drive the revenue, they are quite stable. If you look at our presentation, corporate presentation on the website, which clearly say that gold loan business head since the day we started it is there.

Construction finance business head is since there almost about more than 9 years. The housing finance Chief Business Officer almost 10 years with us.

As far as MSME is concerned, the earlier business head was about 7 years. After that, he has transitioned to somewhere else, and we have got the replacement.

We cannot say that on the business side there was any churning. As far as the risk side is concerned, Vaibhav Shah on the credit side almost more than 7, 8 years with us.

CRO Sanjeev Shrivastava, who have joined almost 3 years with us. If you look at all this, barring one or two position, all the position, and that is quite normal that 10%, 20% churning in leadership happens, that is quite natural.

Sir,

can the board state that these leadership transitions were unrelated to any structural or— No. Plus, second,

our Head of Internal Audit, CCO, and CFO, when our housing subsidiary have achieved scale, and to comply the RBI regulation, the moment ₹5,000 crore AUM is achieved, you have to have a separate CCO in the housing finance. We have internally transferred from parent NBFC to the HFC.

These three positions of Head of Internal Audit, CCO, and CFO have been transferred from here to there. It is not that they've moved out.

You have to look at in totality. I believe that if you look at all the numbers together, transitions are normal, and taking in account all these internal transfer, hardly it is very few positions as compared to industry or otherwise.

Sir, in the last couple of years, you have seen multiple CEOs churning up, and still the position is vacant. When can we see the CEO coming up for the longer term in the—

There's no CEO position vacant, and there's no plan to bring any CEO.

Sir. Thank you for answering me.

All the best for the future.

Thank you.

Good evening, sir. Hello?

Yes, go ahead.

Sir, you had previously guided towards achieving a medium-term RoA of 4.2% to 4.7% and RoE of 19% to 21%, with RoA already crossing the 4% mark in Q1. Could you share the expected timeline for achieving these ranges on a sustainable basis?

'28.

By FY 2028. FY '28 consistently.

I think we are quite confident to deliver this on a consistent basis despite remaining on the expansion phase, 400 to 500 branches a year.

Sir. Sir, another one.

While the car loan business continues to report healthy year-on-year growth, origination volume and values have moderated subsequently during the quarter. Is this primarily driven by a strategy of prioritizing profitability over growth, or are you witnessing some moderation in demand or increased competition intensity?

How do you see this business evolving over the next few quarters?

I think in car loan origination, there is a distribution of car loan sourcing through our employee and dealer network and passing on to the banks through technology platform. In that, we follow the unit economics.

At the cost of profitability, we are not increasing the volume. There are some players who do the cash burn and grow their volume, but we are following a philosophy not to do the cash burn, and every transaction should result in some profitability.

We will not chase the only growth. Growth has to be for the profit region.

Keeping in that philosophy, I think our growth in the car loan is happening to the extent which is not causing us any kind of loss. You will see in next couple of years, this margins will improve because some point of time we are going to launch the used car loan product also as a pilot and then full-fledged.

We are not growing the book only for the sake of numbers. Okay.

Thank you so much, sir. Thank you for answering.

Hello. Congratulations on a good set of numbers, sir.

I have some follow-up questions. First is that spreads have expanded to approximately 7.8%, right?

Which is significantly above historical levels. Should investors consider this to be a sustainable level, or is there still scope for further improvements through product mix optimization and lower borrowing cost?

I think we believe that our spread will remain in this region only, in the range of about 7.8% and maybe around 8% some point of time when gold loan proportion cross 52%, 53%. That is the time we can see about 8%, it should stabilize around that level.

Sir. My next question is related to cost to income.

The cost to income ratio is improved meaningfully as operating leverage continues to play out. With significant branch expansions planned during the year, how should we think about the trajectory of the cost to income ratio over the next 12 to 18 months?

I think next 12 to 18 months, cost to income ratio should remain in this range. It will not go further down, keeping in mind that we are going to add more branches, and the more branches expenses will get offset in the larger volume from the old branches.

Cost to income ratio, if we are able to maintain this 44%, 45%, I think this is good achievement and this will support us better RoA and RoE.

Great, sir. My last question is given the recent corrections in the gold prices and the possibility of further volatility, how do you assess the potential impact on gold loan disbursements and AUM growth, yields, and asset quality?

Additionally, what risk management measures are in place to mitigate these risks?

Gold loan being a short-term product, and the gold prices does not fall in one go 10%, 15%, 20%. There is a set automated system-driven margin call alert, and then some point of time when LTV breaches beyond a level of 85%, the auction notices are issued.

With that mechanism in place, I think it has proved to be well controlled and well behaved when the gold prices have fallen. We have seen in last 6 months, gold prices have remained very volatile, and quarter-on-quarter basis also if you see there's a fall in the gold loan prices.

We don't see that despite fluctuation, there'll be any risk on the asset quality side. The further fall in the gold loan prices might affect some kind of a growth, but we're still operating with 1,000 branches and intend to add more and more branches.

I think that will not impact beyond a point to us.

Thank you, sir.

Sir. Congratulations on the good set of numbers.

My first question was regarding the loan-to-value ratio for our gold loan, and secondly till what extent are we protected from a fall in pricing of gold?

Can you repeat the first part of the question again?

What is the average loan-to-value ratio for gold loan?

Average gold to loan ratio at the disbursement basis is about 71%. If you look at the slide number 7 of the presentation of the earnings, you will see that.

That is displayed in slide number 7, man. Disbursement basis is about 71%, and this 29% margin is good enough margin from the risk perspective.

Okay. Thank you.

That answers my question.

Hi. Can you hear me?

Yes, please. Yeah.

Sir, my question is regarding the asset quality. There was a deterioration in the construction finance book where the GNPA increased from 0.3% to 0.7% this quarter on a Q-o-Q basis.

Can you please elaborate a little more on the reason for that and what can be the outlook on the asset quality going forward?

If you talk about the construction finance, there's one particular account have slipped in the NPA, and we have also taken the provision of about 70% in that account. That is the reason that asset quality in this quarter have gone up.

We have seen the cycle in construction finance that within 6 to 9 months, we are able to recover these account, which are backed by strong collateral of project. We find some other project developer to take over the project and get out of the account.

That we have shown repeatedly in the past in many occasion. In even the current quarter also, we've seen the strong recovery of about ₹30 crore from the past old NPA account.

This is normal, and on a steady-state basis in long-term basis, I think we will not see any kind of volatility in construction finance. During the interim period, some accounts slip in the NPA and that they again get recovered, but some point of time then some other account happens.

This is an continuous exercise and continuous process. This keep happening, and we keep recovering from old account.

Okay. Nice to know that.

Thank you, sir. Regarding the overall asset quality of our loan book, what is the outlook for the remaining quarters of this financial year?

Are we seeing any stress in any particular segments like MSME, or what's the overall outlook on the asset quality front or the guidance from your side?

Since we are into 100% collateralized secured segment, we have seen that last few quarters, the collection efficiency have been very good, and company have invested heavily on their own collection team of 525-plus team. We've invested in the technology, data science capability, and culturally also we built very strong collection culture in the company.

We believe that there'll be not much surprise in the collection side. If current gross NPA are about 1.1% and net NPA is about 0.6%, I think this is a very, very good numbers.

We don't see any reduction from here, but at the same time, the kind of yield level we are lending in all these products, our own benchmarks are GNPA of about 2% and net is 1%. These numbers are much below that, and so it reflect that our good performance in terms of asset quality and collection efficiency.

Sir. Thank you.

Thanks for answering my questions.

I thank you for participating in the earnings call today. I would reiterate we are committed to delivering strong and consistent performance quarter-on-quarter, and are glad to revise our AUM guidance upwards to ₹65,000 crore by FY 2028 at 30% plus CAGR, with return on average equity of 19% to 21% and return on average assets of 4.2% to 4.7%.

Should you have any questions, you can reach out to us or our IR advisors, and we shall be happy to answer your queries. Thank you once again, and have a happy week ahead.

Thank you.