Good evening everyone, and welcome to the Q3 FY26 earnings call of CreditAccess Grameen. Today we have with us the senior management team of CreditAccess Grameen, represented by Mr.

Ganesh Narayanan, Managing Director and Chief Executive Officer, Mr. Gururaj Rao, Chief Operating Officer, Mr.

Nilesh Dalvi, Chief Financial Officer, and Mr. Saip Sharma, BGM Investor Relations.

On behalf of HDFC Securities, I would like to thank the CreditAccess Grameen management team for giving us this opportunity to host the call. I will now hand over the call to Mr.

Ganesh Narayanan for his opening remarks, and then we'll open up the floor for Q&A. Over to you, sir.

Thank you, Deepak. Just checking if it's audible for everybody from the

Thank you. Thank you all for joining the call today.

Let me start by wishing you all a very happy and prosperous and fruitful new year. Today we are here to discuss our third quarter and the first nine months of FY26 business performance.

Our performance this quarter reaffirms the strength and stability of our business model. We are witnessing a very clear normalization in the asset quality trends across operating geographies, enabling renewed focus on growth.

Our exit collection efficiency stood at 99.71 in December 25, while monthly PAR 15 accretion declined sharply to 18 basis points in December 25 from 47 basis points in September 25. Jan 26 continues to show similar trends.

The improvement is visible across our operating geographies, with Karnataka showing a notable recovery, with asset quality reverting to its historical levels, supported by tighter credit oversight. The disbursements for Q3 FY26 stood at 5,767 crore, increasing by 13.4% YOY, with the exit month December crossing 2,200 crore mark.

As a result, we have seen sequential portfolio growth of 2.6% to 26,566 crore and 3.3% QoQ adjusted for accelerated write-offs at 181 crore. Borrower acquisition remained central to our growth strategy as we added 2.1 lakh borrowers in Q3 FY26 and 6.4 lakh during the nine-month FY26 period, of which 50% came outside of the top three states.

While October 25 saw a temporary lull in business momentum due to festive seasonality, the momentum accelerated meaningfully thereafter, with December 25 recording 90,000 new borrower additions. We continue to maintain a healthy new-to-credit ratio of 39%, as reflected in the increase in the share of unique borrowers to 43.4% in December 25 from 26.4% in August 24, positioning us well for quality growth ahead.

We added 50 branches in the quarter, taking our infrastructure to 2,222 branches. The retail loans portfolio continued to scale steadily, with its share now at 14.1% of AUM at the end of third quarter, versus 11.1% in the second quarter, reflecting structural progress.

While part of the increase is optically driven by slower normalization in the group lending book, importantly the expansion is driven by a shift of quality mid-made customers towards individual business loans to meet their growing credit needs. Our employee base remained firm quarter on quarter at 21,701 employees at the end of December 25, and employee attrition moderating to 30.3% in the nine-month FY26 versus 35.2% in nine-month FY25.

As indicated in slide 10 of the investor presentation, the de-risking trend has largely played out, with improved guardrails in place over the last six quarters. The DMP of borrowers with greater than three lenders nearly stood at 4.9% in December 25, versus 25.3% in August 24, while the DMP of borrowers with greater than two lakh unsecured indebtedness stood at 7.8% as of September 25, compared to 19.5% in August 24.

The average total unsecured debt of CA Grameen borrowers and the average monthly obligation has increased 20% quarter on quarter. PAR 15+ in cases of borrowers with greater than three lenders stood at 20.4% as of mid-December, versus 19.5% in mid-September, while PAR 15+ with borrowers greater than two lakh indebtedness came down to 6.9% as of mid-December from 9.1% in mid-September.

The implementation of improved guardrails has meaningfully strengthened the overall quality of the microfinance ecosystem, as visible in slide 11. PAR buckets 0 to 30, 30 to 60, 60 to 90, have clearly improved on a sequential basis, led by lower new borrower acquisition, while PAR 90 witnessed forward flows in Q3 FY26.

In order of 259 crore worth of loans in Q3, which includes 181 crore of accelerated write-offs pertaining to 180 bps non-performing account, leading to additional credit cost of 59 crore in Q3 FY26. The credit costs for Q3 FY26 stood at 343 crore, which includes 59 crore due to accelerated write-off and 37 crore due to additional impact due to increase in ECL rates.

The provisioning rates for the past quarters are stated in slide 12, helping quantifying the increasing various stages. Excluding the impact of ECL provisioning rates and accelerated write-off, credit costs non-annualized stood at 96 bps for Q3 FY26.

This is in line with our new PAR 15+ accretion of 109 basis points during Q3 FY26. and FY25 credit cost guidance of 4 to 4.5% reflects a new PAR 15 accretion rate of 30-35 basis points per month.

If we are able to demonstrate a monthly PAR 15+ accretion rate of 20-25 bps, it would translate into lower credit costs in the future. We shall monitor the monthly PAR trend for the next three to four months for revisiting our credit cost assumptions.

We continue to hold 132 basis points or 335 crore higher provision towards PAR 90 and 280 bps and 736 crore higher provision compared to IRAC provisioning norms. Our collection efficiency excluding arrears stood at 95.5% in Q3 FY26, PAR 90 stood at 2.9%, DMP of 4.04%, and net NPA at 1.36%.

Both predominantly mature 60 DPD. The operating profitability continues to gain strength, driven by improving yields and lower average cost of borrowings.

We incurred a one-time impact worth 18 crore on account of new labor code pertaining to the employee benefits provisioning. It is important to note that the company actually moved towards the 50% salary levels, including VA and basic, to meet this guidance proactively, leading to this impact during this quarter.

Net interest income grew 13.4% year-on-year to 977 crore with portfolio yield of 21%, versus 20.7% in Q2 FY26. Average cost of borrowings continues to trend lower, reflecting disciplined liability management, having declined 26 basis points quarter on quarter to 9.4% at the end of Q3 FY26.

In Q3 FY26 we raised 3,917 crore with a marginal cost of borrowing, which stood at 8.9%. Our foreign borrowing stood healthy at 24.3%, moving closer to the medium-term target of 25 to 20% by FY28 as we scale up.

We maintain ample liquidity at 2,097 crore, amounting to 8.4% of our total assets. Our funding position remains strong with 3,451 crores of sanctions in hand and 5,781 crores sanctions in pipeline.

Yield increased by 60 basis points quarter-on-quarter to 13.9% in Q3 FY26. Cost to income ratio stood at 34.1 and adjusted figure stood at 32.3, excluding the labor code impact.

PBT stood at 68 crore in Q3 FY26, while adjusted figure stood at 699 crore. PAT doubled quarter-on-quarter to 272 crore, while adjusted figure stood at 266 crore, translating to an ROA and ROE of 3.5% and 13.8% respectively.

If the labor code impact is excluded, the ROA would have been 3.7% and ROE would be at 14.6%. We would also like to update you all on our Grameen Mahila, our customer and digital handle.

With close to one million downloads, the platform is seeing strong adoption and reflects an increased shift in how our customers choose to engage with us. It enables instant lift-to-know KYC checks for group loans, generates targeted leads for retail offerings, and seamlessly integrates collections into a cashless ecosystem, playing a key role in achieving 22% collections in the month of December 2025.

This also helps us build more trust and transparency amongst our customers. With normalized asset quality, a stronger balance sheet, and a motivated team, we are well positioned to achieve robust business growth and improving return ratios.

Together, we are confident in nurturing business that consistently delivers returns, enhances stakeholder value, and sets new benchmarks of excellence in the industry. Thank you for listening.

We will now open the floor for questions and answers. Thank you.

Hi. Good evening.

Thank you for the opportunity. I have three questions.

Congratulations on a great set of improvement numbers that we are seeing in the quarter. I was just wondering while Karnataka and Tamil Nadu have done, the improvement has been quite good.

Can you give some color about trends in Uttar Pradesh, Bihar and Madhya Pradesh compared to the April 24 number that you had given us last year? They are still probably 15-20 basis points higher currently.

Anything that has... what is the trend over there?

That will be my first question. My second question is on the state of Karnataka, while you guys have reported great numbers, etc.

Some of the non-MFI lenders commentary earlier this quarter, or maybe even closer to December, was that the credit discipline in Karnataka state, which got disturbed after the MFI ordinance came into place, which impacted our retail loans also, is still not back. I am quite surprised with the great improvement that we are seeing in Karnataka.

Some comments around that would be helpful. My third question is, while you guys have done quite well on the cost of funds, there was a media article, and I understand it may be more relevant for some other NBFC-MFIs, which did mention that the bank borrowings, the lines are drying up for many NBFC-MFIs.

Even if the lines are available, they are coming at a significantly higher cost of funds. If you can speak to us about any challenges or any areas that we are struggling with with our bank borrowings or our bank relationships.

Those are my three questions. Thank you.

Okay. Thank you, Shreya.

With respect to trending in states like UP, Bihar and MP, all states, as demonstrated in our slides, are continuously coming down. However, we have also earlier indicated that our non-core states generally have slightly higher trend cost than our core states.

Right? I think this is playing out.

It’s just a matter of time. We are consistently seeing that all states are trending downwards.

Just to actually, I should simply refer to the earlier data for these states. As I see April, May, June 25, UP, Bihar was around...

April 24 data,

April 24 data, which you used to give us last year, you had given those numbers. April 24 data.

I was just comparing with...

Fair enough.

I think we are very much close to it, but we have come out of a large cycle. Maybe some more, maybe in the upcoming months we should see this trend getting better.

Sure, okay.

If I compare it on a year-on-year basis before the crisis, those numbers were around 42-50 bits in UP, Bihar and MP, which is now in the range of 25 to 30

bits. Y-o-y is quite good.

With respect to April 24, I felt there is still more improvement that is a possibility in these states, right?

Yeah. Karnataka spiked up faster, is coming back faster also.

That is also been the behavior that we have seen, because that’s our core state. Other states I think all of them are trending downwards.

It’s just a matter of time. We’ll have to see for the next three, four months where it settles down.

With respect to credit discipline in Karnataka, I think we have strongly come back. We have to watch the next two quarters.

January is trending with a similar nature, and we are seeing such improvements across microfinance, mortgage as well as unsecured lending. Karnataka is coming back very, very strong to normalcy.

It’s only a question of time if others are indicating that it has not come back to normalcy. Maybe a few more months others will also come.

You should appreciate that Karnataka is our home state, and probably in 30 kilometers we have a branch, and we’ve been here for last 20 years, and probably we have a little more connect than the rest of them. I think things will follow.

Sure.

The third point with respect to bank borrowings, I think when the industry is going through a credit cycle, it is natural of the banks to pull off a little. Fortunately some of us have never had this situation because our diversification strategy has a very important role to play here.

I think we are one of the few NBFCs which has bank term loan borrowing dependency of less than 16%. We have been continuously able to access bank funds.

It has not impacted us during the entire credit cycle, right? We continue to access more funds as we move ahead.

Sure. I think this is useful for any follow-up question, I'll get back in the queue.

Thank you.

Good evening, sir. Hope I am audible.

Yes, sir.

Thank you, sir. Sir, first thing on the industry, most other players talk about a very high rejection rate today, especially after the implementation of APR guardians.

If you just help us understand how have our rejection rates trended over the last maybe two-three quarters. That is the first question that I have.

The second question that I had was that maybe next year onwards, maybe FY27 onwards, we look to start growing at 20-21% thereabouts. With this, what will be the split of the growth that we come from MFI and what growth can we expect from retail finance?

Just trying to understand the way things are today very, very clearly. You mentioned earlier, December, we saw very good improvement in PAR accretion, and you mentioned, continues in January as well.

I am hoping that gives you a lot of confidence to start accelerating on disbursements and growth. Which is where that question of how are you thinking about the split between MFI and retail finance, or does it still remain fungible in terms of growth?

Lastly, sir, you just mentioned about Karnataka came back very, very strongly. You rightly said, your home state as well.

I just had one observation and just wanted to pick your brains on this. Josh, as well as other MFIs, have been talking about very strong recovery in Karnataka collection efficiency, and the ones who are still not seeing improvement, can it be a little bit to do with the fact that MFIs have already written off a large part of the loans which are problematic in nature, and which is where on a zero DPD collection efficiency or expected collection efficiency is looking very good, while for some others, right, who have not written off, they still are facing problems in Karnataka?

Okay. Let me try and answer all your three.

I think the first and second are also likely linked to each other. Rejection rates definitely, yes, they have gone up.

Current approval rate for new borrowers, so that is new borrower entry rate around 55-60%, and our existing renewal rates are around 45-50%. Just for comparison, it used to be around 65% before the bad rates.

It has fallen significantly. That also means that you will have to put more effort in acquiring customers to maintain some amount of growth rate in microfinance.

Yes, since we are coming out of the cycle, and another quarter of performance will give us the confidence to accelerate in the next year for sure. However, as we had indicated in our medium-term goals, the growth rate of microfinance would be lingering early teens, and the rest of the growth will come from retail, right?

We are also seeing that retail is actually outperforming our guidance a little bit, growing a little more faster than what we anticipated. It's possible that retail may have a little more share than what we anticipated in this growth trajectory.

That's something that we will see over the next few quarters, I think. With respect to Karnataka, what was the question?

I just had it. We discussed Karnataka, you were saying that there are other players who have not done write-off.

That's why the collections are looking lower. I believe that was your question.

Yes, sir. All I was just trying to understand is, there are today players who are there in predominantly the small-ticket lap segment, who still talk about weakness in Karnataka.

While if I look at us and a few other players who are present in MFI segment, we have been talking about Karnataka having come back in a big way. Can it so happen that a lot of the problematic pool for us in Karnataka has already been written off, on a next bucket basis collections are indeed looking good, while for some others, right, because the problem pool is still there, they are still not able to see that recovery.

I get your question, but I think you may also have to see what is the new borrower addition there again. I'm not sure, I don't have the data right now.

For us, I said, across retail lending, including mortgage, as well as unsecured, Karnataka is showing a sharp reversal. I said, it's taking time for some people, probably it's just a matter of time.

It does look like at ground things are coming back to normal.

Got it. Just one last clarification on your opening remarks.

You had shared that FY27 credit cost guidance of 4 to 4 and a half is factoring in monthly PAR accretion of about 30-35 basis points. In case, you mentioned, if the PAR accretion is lower than that, then there are downside risks to this credit cost guidance.

It's possible for it to watch it for a few more months and probably by May we will come back with a clearer guidance. It's too early.

It helped good in December and Jan. We'll have to watch it for a few more months to ensure that the pattern is stable and it is going to remain.

Maybe it looks like that, but we'll have to come back with some guidance in May.

Got it. This is Yusuf.

Thank you very much and I wish you and your team the very best.

Thank you.

Thank you for the opportunity, sir. Retail finance, can you give some more details of the portfolio?

My question is on retail finance. Can you give some more color on retail finance, that how much of the book is secured and how much is unsecured?

We have seen very strong growth in this business. If you can also share some data about client profile, how much is unique to Karnataka and what is the total, let's say, sector outstanding on those customers, etc.

Sure. The retail finance portfolio today roughly comprises around 3,780 crores, of which we have two types of unsecured loans extended to customers, graduating customers.

One book is a product called Unnati loan, which is a profile of customers are significantly higher income earning. They are able to demonstrate better cash flow.

We are able to visibly see proper business premises with scale and size, etc. That book is around 1,700 crores.

We also have a lighter version of the individual lending product, which is 1,600 crores. They could have higher income, but if we have certain difficulties in ensuring that it is demonstrable or the income is not clear or is not visible to the level that the customer is saying, we graduate them towards slightly lower ticket size.

That is around 1,000 crores. Both these books together is around 3,300 crores.

Both these books, PAR 30 is well under control, under 2% as we speak. We have 266 crores of mortgage business loans.

We have a home loan book of roughly around 200 crores and a two-wheeler book of around 13 crores. In secured loans, we are at a PAR 30 loaning 2% once again, right?

These books, while they are new, they have done about two years, they've only worked so far, yes.

The secured portfolio will be around 500 crores?

Yes, it's 500 crores.

Secondly, can you give some guidance on the margins, setting margins should keep on improving? What is the trajectory that you foresee for next year in terms of margins?

Yeah. Nidhesh, we should see some improvement in margins because even as you saw in third quarter, the NIMs have improved because there has been around 30 basis improvement in yield on account of lower interest reversals and the cost of borrowing is down by 20 basis.

Maybe for next year we should see the yields anywhere between maybe 14-14.5% in that range for some time because borrowing cost incrementally we do see dropping by 10 basis every quarter for at least next two to three quarters. Then it should settle down.

Also one thing we need to understand is the current NIM profile is basis the current credit cost trend what we are seeing, because we have taken a pricing increase in third quarter. This is the current credit cost trend.

Maybe going forward if we are able to see a relatively lower credit cost trend, then obviously it will translate into lower pricing benefit to the customer. From that perspective, maybe try to maintain our ROAs in the 4.5 to 5 percent range.

NIMS will vary depending upon how the underpinning risk is shaping up. As of now, considering the current trend, we believe NIM should be around 14 percent range for some time, and then they may again revert basis our changing pricing.

Sir. Understood.

Thank you.

Hi, good evening. Congrats on a very strong performance.

Sir, my first question is on the new customer acquisition. That count is slightly even lower than Q2, and the industry has been continuously deleveraging.

When do we see this new customer acquisition picking up for us? Because eventually that number has to go up and keep growing for us to even grow higher in the VLB model.

Because as we see that the ticket sizes of the portfolio is increasing, largely because of bulk of the growth coming from the renewal and existing customer, but eventually in the longer run, this lever has to pick up of new customer acquisition. What is the outlook on that?

Okay. I think new customer acquisition will pick up traction in Q4 itself.

We believe we should see something significant improvement as we move ahead, because you have cleared historical para now, and the dealer sentiments are a lot more positive now, and people have more time to do business. There are specific efforts that are targeted towards increasing the fee numbers, and I think in Q4 itself we should be able to demonstrate that the run rate is picking up.

Can you segregate December resultsman number, and can we further build upon that number as a run rate in Q4?

We did 2,200 in December, and we should hopefully do slightly better in Q4, because Q4 essentially comes with our best performance. We will try and see if we can meet our historical Q4 numbers similar to those.

Just last thing on the credit cost. This quarter’s credit cost will have some impact because of higher ECL provisioning rate, which I believe, will remain.

You also had some balance or residual accelerated write-off of 187. Which will not repeat in Q4, right?

That impact will not be there in Q4.

Yeah. We did accelerated write-off only in October.

It’s from there, right? We are not anticipating anything in Q4.

However,

If there is leftover... yeah, there will be implied write-off for November, December.

Would that be the normal write-off run rate now?

Yes. We should see probably Q4 will have similar credit costs as that of Q3, and it may take some more time to see where it settles down.

Yeah. Rajiv, maybe I’ll add a couple of points here.

Largely, whatever new delinquencies which came up in the first quarter, that is month of April, May, June, those delinquencies will come for write-off in the fourth quarter, because we do the write-off after nine months. You may get some indicative trend, maybe in line with whatever new PAR, which came out in the Q1.

Maybe 70-80 percent of that may come for write-off in fourth quarter. Anyways, we have 70 percent provisions on that, the residual will come for ECL.

On the ECL front maybe we should see, as we had indicated in the second quarter call, we should see the stage 1 provisioning in Q4 closer to 1.5. That should happen in fourth quarter.

Got it. Perfect.

Thank you so much.

Yes.

Hi, sir. Thank you for giving me the opportunity.

My question was on the retail portfolio.

Yeah. Am I audible now?

my question was on the retail portfolio. That portfolio is quite diverse in terms of the product bouquet.

What is the kind of, let’s say, the benchmark in terms of margins and credit cost and ROA on a BAU basis that we are trying to reach to over the next two to three years' time period?

Okay. I think we discussed this earlier, Shreepal.

Thank you for the question. Most of these products are very close to the pricing of microfinance, right?

Except for housing, where the average interest rate is around 16.7 percent, and mortgages anywhere north of 21 percent similarly home. All of them should have similar margins as that of microfinance.

As we discussed, over a period of time, it will actually be a little more contributing once we reach a certain amount of scale and we are able to kind of see the benefit of operating leverage.

Got it. I’ll just look at that aspect in the call.

The other question was on the microfinance side. What is the range of ticket size disbursement that we are doing for more than six years and three to six years customer vintage?

Microfinance starts anywhere from 25-35,000 depending on the... and we can go all the way up to 1.5 lakh depending on the vintage of the customer and the credit history.

Got it. I have more questions.

I’ll come in the queue. Thank you so much.

I would also like to add customers with greater than 1 lakh outstanding is less than... it’s almost in single-digit percentage.

It is generally not that high.

More than one lakh ticket size customers would be as you said, what...

more than 10 percent?

Got it, sir. Thank you.

This is again, time assuming this will be more because of the high delinquencies seen October, November, and December credit cost ideally should have been much lower. That’s what our PAR 15 acquisition trend suggests.

In that case, our FY27 credit cost ideally should be lower than what you have guided for, right? Yes.

That’s what we want it to be here, right. I’m the thing, it’s too early, just December, January we’ve seen.

We have maintained the trend. If we are able to maintain the trend in February, March, April we come back with a better guidance in May, right.

Give us a few more months of visibility to ensure that we are trending on the right direction. It does look like there is a possibility that it can be lower than that at this point of time.

Got it. It is right to assume that at least the January-February trend is as good as December?

It is as good as December. Got it.

Lastly, again on the AUM growth side, obviously Q4 should be our strongest quarter, and this quarter as well we are seeing book growth, right, for this book, compared to all the quarters. What is the aspiration level for us in FY27?

If you have to break that into, let's say JLD versus non-JLD, what are our internal plans in terms of AUM mix and growth for FY27? Okay.

When we look at microfinance growth, early days, maybe 10, 11, 12, we'll have to finalize our business plans a few months from now. It does look like retail will have a stronger growth momentum probably contributing.

We should be able to reach something over 20% that we want to grow to, beyond millions somewhat. That's something that we are working on.

It will be a good mix of both retail and microfinance, but microfinance will be lower compared to its cycle level, for sure. Got it.

May I ask one last question, if possible? Yes.

Yes, sir. Again on the retail finance side, right, I was just looking at the outstanding per borrower, which is steadily coming down, right?

It fell from 40% to 90-2,000-odd rupees was 1.65 lakh earlier. I just wanted to understand what have we changed in the fourth quarter, which is leading to this steep fall in the outstanding per borrower in retail finance?

Right. It's basically because of the second variant that I spoke about, which is called Vishesh individual loans, where we have seen that the income has gone up beyond 3 lakhs, but we have not seen the level of demonstrability of the income by the customer.

We look at size of the business, we look at cash flow, we look at whether there is cash flow in the bank statement. We underwrite about 3 lakhs in individual loans, but a smaller ticket size.

Average ticket is around 80,000 rupees, because eventually our average ticket is falling. Even if you see our main graduation product, which is Unnati, the average ticket is still around 1.7 lakhs.

Margins those average ticket is around six and a half, seven lakhs. Got it.

Basically you are highlighting that incremental growth in retail finance is actually coming from daily customer, but for all regulatory purposes, we are conducting. Around 10-12% of our customers every year move from graduating to retail finance is our estimation at this point of time.

In that graduated customer, the ticket size will be higher, no? Yes.

There are two types of graduation. One is where there is clear demonstrability of the customer with respect to the cash flows, business has to be visible, there has to be certain signs, the living standards should be certain of certain category.

There are a few other credit parameters that are important. Where you underwrite a larger ticket size.

If some of these are not available but you still see the income is greater than 3 lakhs, then that's a smaller ticket size. No graduation but with a smaller ticket size, no?

That's the reason. Got it.

Then in that case, the customers will stay coming center meeting? Or how you will show the card?

For individual individual products, the customers have access to the center meeting as a payment point, but they are not a part of the JLD. Got it.

You basically move out from the JLD part? Yes.

Got it.

Ramesh, just to add, see lastly, hello? Please.

Yeah. Ramesh, what we assess is basically the customer profile, maybe every year around 4 to 5% customers will move into the mid-ticket individual loans into Vishesh loan, and maybe 2 to 3% moves into the high-ticket Unnati loan market.

We should see that 5 to 6% or 5 to 7% transition happening from JLD to retail. That's where the balance 10 to 12% growth comes from retail and overall we cross 20% growth.

That's the scheme of things. I'm assuming interest rate will be about 25%.

It will be. Got it.

Cool. Thank you and best of luck, sir.

Thank you.

Hi, sir. Good evening.

Sir, I wanted to confirm firstly, did I hear correctly? Growth target for FY27 would be 22%?

I said, maybe we will give some more clearer guidance in May. However, we need to do at least a 20% growth every year to reach our medium-term goal.

Hence, with things getting to normalcy, we believe that even next year we should be able to. We'll have to come back with a confirmed guidance in May.

Understood. Secondly, sir, I wanted to understand if I look at the quarter-on-quarter trend in PAR 90 plus, while 0 to 90 has come down quarter-on-quarter, there has been some stickiness in 90 plus.

Basically, how should one interpret this increase in slippages in Q3?

Basically it means that customers who are going to stage 2 and stage 3, that flow forward rate has remained same, right? However the new acquisition is reducing, hence what will flow forward going forward would also reduce.

I hope I answered your question. New PAR acquisition rate is important to note because even if you see our PAR 15, we provide quite heavily after PAR 15, right?

That is based on our historical experience that once a customer is not paid for 15 days, then he does move to the next stage predominantly. That's why you provide around 66.5% in that case, right?

That means that so far PAR acquisition rate was also quite high. All those cases moving forward, the new acquisition for the last two months is quite stable and so that is going forward in stabilized.

That is what we try to show in the second graph in the PAR sheet. You will see another early buckets have started dropping, hence going forward you are simply dropping the late buckets.

Got it, sir. Thank you.

tier 2, tier 3. Predominantly tier 3 there because we are doing business only in our catchment, right?

We are not in any Tier 1, Tier 2. We are not even present much in taluka headquarters.

We'll be below that. Most of our business will be in Tier 3, probably some bit in Tier 1.

Okay. Sir, one more follow-up on the same.

Where do we see our retail finance book going? Currently we are at 14%.

Do we see somewhere around 16 to 18% in the medium term, or this is where you would like to be? See, at the current growth rate, it does look like that.

Then, I said earlier, we is also looking at 40% because our margins are looking strong. Once we start showing margin growth, we moderate the rating.

I said, we had guided around 15% for 2028, but I think we will inch up a little further to that, is what we... Okay.

Thank you. Thank you so much, and best of luck.

Hello, can you hear me?

Thanks for the opportunity. Just a couple of questions.

First is on the ROA guidance of 4 to 4.5 that you mentioned. That is the annualized ROA we are looking at for FY27, or it's going to be more an exit ROA?

We are talking about annualized guidance for next year should be... The indicator is somewhere around that.

We will come back with guidance in May what we are seeing. At least it looks like stable period, credit cost stabilizing, and normal guidance is also that we will be in that range, right?

No extraordinary event present, this should be a similar range. We will have to come back to you in May.

Sir, but you have already done 3.8 in current quarter. Your guidance looks very conservative, given that you will not be having a significant credit cost going forward.

Is it fair to assume that it's a conservative number, or you want to kind of grow your volume rather than the ROA?

It's not like that. What we are saying is that our principal is that our ROA may be around 4.5%, right?

Hence, even though there is an opportunity, there could be a momentary increase for a quarter or two more than, the estimated return. If you are actually making more returns, we would moderate our pricing, is what we are saying, right?

You should assume that as a company we will be in the range of around 4.5% ROA, even in a good time.

To labour on the same question. My question is, you want to have a kind of fix the ROA between 4 to 4.5, but then have a larger volume.

Is that the percent you would want, or you would still shoot for a higher ROA?

I don't understand. Can you just help me understand this?

No, I'm asking the question is, you want to improve the absolute bottom line number, higher bottom line number, but however maintain ROA of 4 to 4.5. You don't want the ROA number to go up significantly.

See, Rajakumar, the way we are looking at it is that if you see historically, we have had a cross cycle ROA of 3.5 and ROE of around 14-15%. Going forward, with better ability to price the risk, we would want to do a cross cycle ROA of 4 and ROE of around 16-17% on a cross cycle.

Maybe in a good year, it may cross 4.5% and ROE may inch closer to 20. In a bad year, like what we have seen in this year and the previous year, it may be in the range of around 2.5%.

If the ROA crosses certain range, for example, you may see a couple of quarters wherein it reaches closer to 5%, then obviously we have to revisit our pricing, because at any point in time, we always ensure that we give the best pricing to our customers. From that perspective, pricing is always a derivative of our credit cost, operating cost, and borrowing cost.

That is what we will keep overing. Now growth is a different parameter.

We have already defined that we will be looking for 20% plus growth. Both the parameters will go hand in hand.

As of now, we have not reached the stage wherein we have to cut pricing to do higher growth, because the segment where we are operating, there is already a lot of scope to provide formal source of credit. We do see there is good potential for growth with, while maintaining our margins and profitability.

Okay. Thank you so much, sir.

Sir, if you permit me, can I ask one more question?

Please go ahead.

Yeah. Sir, this question is on the unique customers that you have added.

You have added significant customers. That's what the presentation stated.

My question is, what would be the age profile of those customers? Are they very young customers, or they are middle-aged?

Because the reason for asking this question is, if they are really unique, new to credit, then they should be really young people, right?

I understand. Unfortunately, I don't have this data in hand.

I will share it across with.

Yeah. Okay.

Thank you so much.

Thank you. Thank you, Vishal.

Thank you all for being a part of this discussion, and we are hopeful of closing Q4 once again with a strong performance and move towards good normalcy on next year. With you, Vishal.

Thank you so much.