Thank you, Nirav, and good evening, everyone. On behalf of Ambit Capital, I would like to welcome you all to Q1 FY27 earnings call of City Union Bank.

We have along with us Mr. R.

Vijay Anand, MD and CEO, Mr. V.

Ramesh, Executive Director, and Mr. J.

Sadagopan, CFO. I will now hand over the call to Mr.

R. Vijay Anand, MD and CEO, for his opening remarks.

Over to you, sir.

Thanks, Jignesh. Good evening, everyone.

I have been joined by my ED, Shri Ramesh, and CFO, J. Sadagopan, and other senior colleagues in this room.

Hearty welcome to all of you for this con-call to discuss the unaudited financial results of City Union Bank for the first quarter of FY 2026-27. The board approved the results today, and I hope you all have received the copies of results and the presentation.

Before we get into the results, it's truly a great honor and privilege to lead the 122-year-old franchise. I thank the board, regulator, and shareholders for approving my candidature.

My sincere gratitude to my predecessor, Dr. N.

Kamakodi, for his mentorship and steadfastly supporting the smooth transition of leadership. At this juncture, I want to congratulate our director, Professor V.

Kamakoti, who was conferred with prestigious Padma Shri award in recognition to his contribution to the nation. I hope you all have received the notice of the Annual General Meeting to be held on 14th August '26, which will happen face-to-face at Kumbakonam and also through the virtual mode.

On behalf of the board, I invite you all to participate in the AGM. During Q4 FY26 con-call, we have stated our expectations for FY27.

With respect to advances, we should be 2-3% over and above the credit growth of the industry. Our focus on MSME will remain same.

Gold loans and secured retail will be an additional enhancer, but MSME proportion will continue to dominate. Our business through the third party, which is DSAs, on an overall bank book, we envisage only 1-2%.

Our focus on secured products will continue for the year. Our long-term average numbers with respect to PAT, ROA, and NIM will hold good, and we hope the positive moments will continue.

These were the discussions we had at the end of Q4. Largely, we are in line with the expectations conveyed in the last quarter call.

During the last financial year, we have achieved double-digit credit growth in all the four quarters. For Q1 FY27 as well, we have achieved 25% credit growth quarter-on-quarter, the highest credit growth rate in June to June, and our advances had increased to ₹67,645 crores from ₹54,020 crores in Q1 FY26.

As stated in our earlier calls, with improved efficiency level aided by gold loan growth coupled with digital lending process, we have achieved consistent credit growth, and we hope that current trend will continue. Deposits: our deposits stood at ₹79,342 crores for Q1 FY27 as compared to ₹65,734 crores in Q1 FY26, registering a growth of 21%.

As you all know, we always measure by average CASA, nor by terminal deposits. The average CASA grew by 22% in Q1 FY27 to ₹20,062 crores compared to ₹16,478 crores in the corresponding period last year.

Sequentially also, it has improved since Q1 FY26, that is for five quarters consecutively. Our CD ratio for this quarter is at 85%, which is the level we indicated in our last call as well.

With respect to the benefit given by RBI on FCNR deposits till now, the bank has mobilized a fresh deposit of ₹150 crores. Asset quality: on asset quality front, for the current quarter, the total slippages is around ₹195 crores, while the total recovery is ₹206 crores, consisting of ₹182 crores from live NPA and ₹24 crores from technically written-off accounts.

The trend of recovery more than slippages continues, and we are confident of maintaining recovery more than slippages for the next quarter as well, which is the current quarter. Our gross NPA have reduced to 1.73% in Q1 FY27.

Both gross NPA and net NPA in both percentage and absolute terms is reducing quarter by quarter for the past 12 quarters continuously. When compared to Q1 FY26, the GNPA has reduced from 2.99% to 1.73%, which is almost 126 bps reduction.

Similarly, in our net NPA, we have reduced to ₹405 crores, and the net NPA percentage is to 0.61% in Q1 FY27, while the net NPA was at 1.2% in Q1 FY26, which is a reduction of 59 bps on YoY basis. Again, overall SMA-2 to total advance for the second quarter, it is less than 1%, it is there for the past three quarters, which is less than 1%.

Based on our discussions with cross-section of our borrowers from various industries, we learned and observed that the domestic consumption remained largely insulated from the impact of West Asia crisis. For the Q1 FY27, PCR, provision coverage ratio, with technical write-offs, stood at 85%, which has improved from 79% during the corresponding period last year.

For the current quarter, PCR without a technical write-off has improved to 65% compared to 61% during the corresponding period last financial year. For the past eight quarters or so, we are steadily and continuously improving our PCR.

Our interest income had grown by 24% in Q1 FY27 and increased to ₹1,985 crores from ₹1,605 crores in Q1 FY26. Our yield on advances stood at 9.79% for the current quarter, which is equal to our Q4 FY26 level, which was almost 9.8.

On the cost side, our cost of deposit stood at 5.56%, which is marginally lower than 5.6% in the previous quarter, that is Q4 FY26, which is due to repricing benefit. Our NIM for Q1 FY27 stood at 3.78%.

With the term deposit rates on the verge of rise due to high demand, we expect the cost of deposits may slightly increase in the next few quarters, which will impact the NIM levels around 5 bps, but once the situation eases, it will come back to normal. Hence, we expect largely the NIM to be in the range of 3.65% to 3.7% in the next few quarters.

During Q1 FY27, the bank invested around ₹700 crores in mutual funds, which generated an income of ₹12 crores. This income has been classified under other income.

Consequently, the yield on investments have declined to 6.42 in Q1 FY27 from 6.61 in Q4 FY26. Had the mutual fund income been recognized under interest income instead of other income, the yield of investments would have been 6.67 rather than the reported figure of 6.2 for the current quarter.

Our operating profit had grown by 29% and stood at ₹581 crores compared to ₹451 crores in the corresponding period last year. By the way, this is the highest operating profit achieved by us.

We had achieved a PAT growth of 25%, and our PAT stood at ₹383 crores in Q1 FY27, which is again the highest in our bank history, as against ₹306 crores in Q1 FY26. Our cost to income ratio for Q1 FY27 have reduced to 45.42% from 46.15% in Q4 FY26.

As we have discussed earlier, our cost to income ratio will be in the range of 47% to 48% for few quarters. The ROA is in tune with our long-term average, and it is at 1.57% in Q1 FY27 compared to 1.55% in the corresponding period last year.

To sum up, with our best efforts, we have achieved consistent double-digit growth for the past two years. We will continue to explore various avenues of advances growth in addition to our core strength of MSME.

We are very conscious in improving our credit growth through only secured lending while venturing into other avenues to achieve credit growth at least 2-3% over and above that of the industry. Our deposit growth is aligning with our credit growth, which is helping us to maintain the desired CD ratio.

We expect the NIM to hover around 3.65% to 3.7%. ROA is expected to be in our current level of 1.55% plus.

Our PAT growth will continue with business growth and better asset quality. Our cost to income ratio will remain in the range of 47% to 48% for FY27.

Thanks a lot. Open to questions, if any.

Thanks for the opportunity. My first question is slightly longer term if I look at FY27-28, right, what will be the levers for NIM—

Hi, sir. Can you hear me now?

Better.

Hi, sir. My first question was on margins.

Of course, you gave the guidance that cost of funds is expected to increase in the next couple of quarters, but if I look at slightly longer term, FY27, FY28, what will be the levers for margin improvements because what I am seeing is the yields on the lending side are sort of stagnant or improving not so materially. Is it fair to say that the only lever for margin expansion is the cost of funds?

Or how are you looking at it?

I think broadly we focus on MSME, gold loans, as you would be aware. I think we are maintaining a decent rate on gold loans, which will continue to give the returns as expected.

Retail is also picking up nicely for us in secured lending. Broadly to explain, in gold loan space, we are around 10% to 10.5% for agri and 11% to 11.5% for non-agri.

Broadly, we are at 9.6-9.7 in our LAP book in retail, and we are around 9.3-9.4 in MSME. We are slightly confident of maintaining this.

Traditionally, you would be aware that we are not the highest payers in deposits, we will maintain the same cost of funds in terms of deposits as well. Hence, this trend should continue, and more or less, we should be there with 3.7-3.75 range on a long term.

Sir. My second question was what led to the increase in cost of funds for this quarter?

Repricing, we have done better repricing, and

borrowing costs

has come down.

72 to 94

has increased.

Yeah. That's largely because of the borrowing costs, right?

Right.

Sir. Thanks a lot, sir.

Congrats for a good set of numbers, sir. My first question is on the gold loan.

Sir, as everyone is expanding and taking market share of the gold loan, how do you see the competition going forward, and what would be the strategy to continue growth in this segment?

Yes. Thank you, sir.

Broadly, the competition is there in all the spaces, not necessarily on gold loans, but every type of firm, whether it is banks or NBFC, typically they have their own customer base and the kind of customers. I think we are predominantly branch-driven customer base, and we get the customers who walk into the branch and pledges and do the transactions.

I think we are at 30-31% as we speak today, and we expect it to be in the same range of 31-32%. We don't expect it to grow up, and hence, we don't see much threat to gold loans from the competition at this juncture, sir.

Got it.

The second is on the MSME. Currently, the system MSME is growing pretty strong, but we are growing at 15% range.

What are the reasons for this growth, this 15% growth? Is it going to continue this range, or is there any specific reason for the MSME growth?

The market is good, the consumption is good, and the funding is also the function of asset quality. The asset quality has been given benefit to us, and even if you see MSME, bank like us have ₹900 crore of repayment per month.

Every quarter, we almost come down by ₹2,700 crores. In spite of that, we could move this engine quite faster basis the consumption and the market and the asset quality, and we envisage this to grow 2-3% more than the system growth.

That's our expectations on this.

I'm asking specifically MSME. I think the system-level MSME is going faster, I think more than 20%, but our book is growing at 15%.

Is it from reason like you're maintaining asset quality, or is it like you're a bit cautious in terms of lending? That was my question.

We were always cautious on lending, it's not. If you see, there are a couple of reasons, I would say.

Okay. One is ₹900 crores of repayment per month, and most importantly, only in this quarter we have seen this that our unutilized portion, which our utilization used to be 73% on an average, this has come down to 70%.

The utilization level has dropped from 73 to 70, and we are also slightly cautious on pricing now. I think combination of these three factors you would have seen some drop, but actually, I would say that it is not a drop because with ₹900 crores of repayment and utilization coming down by 3%, I think we are very fairly poised for a good growth, and pricing we are conscious of what we have taken a call.

Got it, sir. Thank you.

Thanks.

Hi, sir. This is Sonal Mehta.

I hope I'm audible.

Hi. You're audible.

Hi, sir. Great set of numbers, sir.

Congratulations. My first question was with regard to sort of credit cost and the slippage numbers.

I wanted to understand the industry is actually going through a purple patch, especially the MSME industry, and there are not too many write-offs on the gold loan side. From a one- or two-year perspective, what should be a number that we should be comfortable with in terms of our slippage and also our credit cost guidance going forward?

If you see credit cost at a steady state, we should be around 0.4. That's a number we see.

Once it stabilizes, we don't envisage to go up much for sure with respect to credit cost. The other question was on right-off, is it?

The recovery continues to be more than slippages. We have been doing this for the last 10 quarters almost, and we expect this continue for this quarter as well.

We don't see much change to this. Our slippages, whatever we have committed in the last year, that what we will achieve this year, I think we are on track.

₹700 to ₹750 crores was the number which we discussed. I think the slippages would be in the same range.

Okay. From a one-year, two-year guidance also, this is the slippage number we should be around?

Even on a percentage basis as well, like around 1%, 1.25%?

Yeah, 0.4 credit cost and 1- 1.2-1.3% should be the number. You're broadly right on this, yeah.

Got it, sir. Thanks for this clear.

Thank you, sir, and all the best.

Thank you.

Thank you for the opportunity, and congrats on a good set of numbers. Sir, my question is again on the growth.

If I'm correct, you have guided for above-system growth by a couple of 200-300 basis points. If that is to be kept with the mix intact between gold and non-gold, MSME needs to grow much higher, sir, right?

Closer to 20, around 20% or 18-19%, which is not happening right now. How do you plan to catch up during the rest of the year?

Not just MSME, if you could also talk about other products outside gold. How do you ensure the mix doesn't change as you achieve your growth target for the entire year?

If you could help with some numbers on MSME guidance.

I will broadly categorize into three. We have three major sets of products: one is MSME, one is gold loans, one is retail.

As we said in the previous calls as well, we would be on the gold loan between 31-32%, MSME would be around 55, yeah, 55-60%, and remaining would be 10% of the book should be retail secured. That's what broadly the plan is.

We aren't changing the goalpost much. Probably if I would have got the utilization of the same level what was happening for the last at least 10-12 quarters, we would have been another 2% more, I think, 2-3% more in MSME.

That would have happened because traditionally we used to be 73-74% on our utilization. As I said before, this has come down to 70, we had a drop of 3-4%.

It's again the utilization is a function of the business utilized, how much they're utilizing, and how is the business growing. That's going to continue.

In terms of MSME growth, as I said before, we will not hesitate to grow. Probably the asset quality is fantastic.

I think the growth on MSME is going to be 2-3% more than the credit system growth, and we are quite confident of that.

Sir. Sir, the next question is on the branch rollouts.

You have up-fronted this year's branch rollouts, and we see OpEx growth is coming healthy, 15.5. How should we think about the rest of the year on the OpEx?

Given where you are on the OpEx, why is the ROA guidance to 1.55 from 1.65? Is there anything that we are missing in the ROA tree?

Largely the branch opening is done, as you rightly said, but our hikes are from July. As we speak, the staff hike is from day after tomorrow, we expect the cost to move up.

That's precisely the reason why we said our CIR would be in the range of 47%, if you see our commentary. We are quite confident of maintaining the cost to income at 47%.

We are currently at 45 as we speak. In terms of ROA, I think we wanted to be realistic in the numbers what we commit.

With 1.6-1.65 ROA, I think that's a number which we are looking at in terms of the exit ROA. My other income should also comfortably move up.

That's round the corner. Considering this, I think if you see Q2, Q3, Q4 of last year, we were in the range of ₹259 crores, and in the Q4, we moved to almost close to ₹300 crores, if you see our Q4 other income.

We are currently in this quarter at ₹243 crores in the other income. With 243 to 300-320, even if we replicate the same last year's performance and retail just picking up, I think 1.65 ROA is visible.

There is a visibility for 1.6 to 1.65, yeah.

Sir, you said that is the exit ROA, right?

Exit ROA.

Okay. Full year, you're expecting in between 1.55

to 1.6? 1.55 to

1.65. Understood.

Thank you, sir, and congratulations once again for a great set of numbers.

Thank you, sir.

Hi, sir. Thank you for the opportunity.

I just wanted to understand our cost of funds has inched up this quarter despite the moderation in cost of deposits. Can you explain that?

Sorry, I could not hear.

Cost of fund?

Sorry, if you can just repeat the question, sorry.

Right, sir. The cost of funds has inched up during the quarter despite moderation in cost of deposits.

Can you help us understand that?

Sir, that is mainly because of the other borrowing,

and

refinance whatever we availed. The Q4 cost was around ₹72.50 crores, which has increased to ₹94 crores during Q1.

That's the main reason.

What would be the borrowing cost for the bank?

₹94 crores for the quarter.

Got it. Sir, second question, if you can spell out the treasury gains during the quarter.

If you can? Sorry.

Treasury gains. Treasury gains.

See, the total treasury gains, it is around

₹52 crores

for the current quarter. Last Q4, it was ₹29 crores.

Got it, sir. Thank you.

Hi, sir. Good evening.

Congrats on a great set of numbers. Just a few questions.

One is, have we participated in the ECLGS scheme? Have we sanctioned anything, and have we disbursed as well?

We have participated. As we speak today, last quarter it was ₹200 crores, and till today, we are at ₹800 crores.

It's pretty decent.

Sir, in terms of context, how much will be the portfolio eligible in terms of the portfolio?

We expect ECLGS to be in the range of ₹2,000 to ₹2,500 crores totally under this scheme. ₹2,000 to ₹2,500 crores.

We would have sanctioned everything, or is it that this is just the eligibility what we're going to do it as it comes? Got it.

Based on the merits and whoever is eligible, they will be entitled for this scheme.

Right, sir. Sir, second question was on the SMA side.

I think you mentioned that for multiple quarters, we have been less than 1%. Any particular rise quarter-on-quarter or any trends in that where we could know that the stress is rising as a trend, or this West Asia crisis is not a problem for us?

I think

West Asia crisis, I think it was not a big issue as of now. Whatever we speak is as of now for us.

I think ECLGS is something which was fabulous, which came at the right time because there were not any stress. I have been meeting customers.

We have gone and met multiple customers on this space. I think most of the customers have not shown any stress, and it's only the working capital cycle for that ECLGS has helped them to come back to normal.

As such, we have not seen any stress, and our numbers are also speaking on the same. One, the visit what we did for the customers is comfortable.

Second, the backing up for the same is percentage of SMA-2 to advances is less than 1%, and not only SMA-2, even SMA-0 and SMA-1, we are seeing of the lowest. Quarter on quarter, I think we have not seen much stress on this space because of West Asia crisis.

Sure, sir. Third question was on utilization levels.

You mentioned that it has actually dropped this quarter given that whatever is happening in the economic standpoint of view. It is surprising that the utilization levels have gone down actually.

Just because you mentioned that the ECLGS requirement came in at the right time, why would utilization level drop? Any analysis on that?

Utilization is normally a function of the business, how it goes, and what is the requirement required. It's good.

If somebody is very conscious of how they're utilizing, then from a credit perspective, you feel comfortable. Typically, when the market is good, the utilization will be as high as 80%, 75% to 80%, and for a industry which is probably not in great and the margins are lesser, it will be around 60%.

On an average, you get 75%, 73-74% to be on the utilization. If somebody is conscious of what they're utilizing, I think it's a good sign.

We keep monitoring this very closely, and we don't see it as an issue. If you're a primary banker and if you're monitoring where the money is going and where the money is coming from and if you can understand them better, I think more or less the kundli is there with you, and you feel more comfortable.

I think we have not seen much cycle, sir.

Right. Lastly, sir, our fee income this quarter looks slightly lower than what we have built in the last one year.

As you mentioned that it builds up over the year, but looks like 15% year-on-year, 19% decline, looks like a little bit lower. Any thoughts on that because that is also an important lever for ROA to move?

Hopefully, we'll catch it up, Q2, Q3, Q4. Hopefully, we'll catch.

That will be driven by higher disbursements, or will it be driven by any other fee income line item? What will be the driver in your view?

Broadly, the factors contributing to other income would be proc fee and suit recovery and the insurance income. I think if these three can deliver, we will be as per the plan.

Proc fee is a function of what we disburse, which is functional to the business. Suit recovery, again, is from what they what we collect from write-off recoveries.

Insurance income is something which we always keep it at last because we really don't push that much. It's a function of what is happening in these three heads broadly.

Other than that, treasury income is something which we So even the last quarter we last year we started the same almost with the same number, and we could scale it up till almost ₹390-400 crores. We expect this to grow as well in the quarters to come.

We are quite confident of that, hopefully.

Got it, sir. Sir, last question.

I couldn't get the treasury income number, sir. I missed that number.

Treasury income, I think 52, 52.54. 52.54 is the number.

52.54. Okay.

Got it, sir. Thank you so much, and all the best.

Thank you.

Hi, sir. Thanks for taking my questions.

Firstly, on the yield bit, looks like the yield increase is driven by gold loans because the portfolio yield there is higher. Some peers had highlighted that because of the strong increasing competition in this segment, they had to cut down the yields.

Have we cut out any yields in our portfolio for the gold loan bit, or are we still going with the same yield?

We haven't changed any rate of interest for gold loans. We are at the same rate, and we continue to do the same.

We have not seen much to it.

Got it. Also, on the utilization levels that you commented that they are dropping down because just extending other participant's question, could competition be a reason for utilization levels coming down because across other peers, we hear that working capital utilization levels are going up because of the demand, higher treasury yields, everything?

Any comment on that? Also, what would be the MSME disbursement growth YoY or QoQ if you could highlight that?

Competition cannot be a function for utilization, that too when you are a primary banker for majority of your book. Utilization again is a function of a business needs, and it's just not that the utilization keeps on rising because, as I said couple of minutes before, the type of industry, the demand, the supply, and other stuff.

Some of the businessmen were also really cautious on what was happening in Q1, and people are really gung-ho about the future business prospects considering the European agreement which has been signed, particularly in the textile space. We are really not much concerned on the utilization level.

We are confident that this would slightly go up above the threshold as well, considering the future prospects of the European agreement what textiles have signed with India with Europe. That that part is we are quite confident.

What was the second question? You asked a second question Disbursement, we don't have the figures.

I can share it

Compared to last quarter, we really don't track disbursement because we we majorly track on utilization and the book. If you want, I'll request Raghu to send this separately to you.

Should not be a problem. Raghu, you have got by any chance?

Otherwise, we can send it to you separately. Disbursement, we really don't track because we track on utilization and the book.

Sure, sir. No problem.

We can take that offline. That's it, sir.

Sir, sorry, last bit on the ECL bit. What are we planning, I guess we are giving a guidance of 1.6-1.55% ROAs.

Are we planning to make ECL provisions throughout the year, or what is the plan there basically?

Predominantly, you would be aware that we are completely a secured player, we we we we have Accha, I just got the data from Raghu before I answer this. Our average MSME disbursal is around ₹3,500 crores per month.

Per quarter, sorry. MSME disbursal is ₹3,500 crores per quarter, and he wanted the last year comparison.

Probably you can give it separately. He should send you the mail separately for that YoY comparison.

Coming back to ECL, I think largely we are secured players, we we have more or less to be 0.45% of the loan book to be on ECL, and which should not disturb us much because, we are we are one of the banks with a very decent capital adequacy ratio, and our consumption should not be more than 0.6-0.65% on the CAR. With 0.45%, we expect the figure to be there, and with 0.65% consumption from the capital adequacy, I think nothing much we need to worry for at this juncture.

Right. Got it.

Anything on the flow basis if you have done analysis incrementally, that will be negligible, right, because it's a secured book?

Very very negligible, immaterialistically not a big number.

Got it. Perfect, sir.

Thank you so much,

sir. Thank you, sir.

Hi. Good evening, sir, and congratulations on the quarter.

Sir, first question, sir, I wanted to know if Dr. Kamakodi sir is associated with the bank in any form or manner, and did he apply to become a non-executive director?

Did you get any visibility there?

Thanks, Jai. Thanks for the question.

Dr. Kamakodi continues to be a good friend for us.

We definitely have a good discussion, and he will be on the CSR. We have a separate CSR foundation, as you would be aware, and he continues to head the CSR foundation.

With respect to non-executive director, I think we should ask only him. I haven't asked till now.

Probably, I will check it up with him and come back to you for sure.

Sure, sir. Secondly, sir, on SMA, right,

Sir, if you can quantify the SMA-0, 1, and 2 numbers as of June for our bank?

We are at 1.2 on SMA-0, 0.7 on SMA-1, and 0.9 on SMA-2.

Okay. Right.

Total 2.85, yeah.

Right. This is broadly stable, right?

This is broadly stable last since from last

This has been coming down. If you see, Jai, you remember we used to be around 10.78 in September '24.

We dropped down to 7.12 in June '25. From 7.12, we are at 2.8.

That's the kind of asset quality which has been built in over the period of a year.

Right. Sir, if let us say 1 year back we were at 7%, then when you do your ECL calculation, right, the slippages is very low, the book is secured, but because we have let us say higher percentage of SMA-1 plus 2 earlier, the assessment is as of now is only 65 basis point of capital required, right?

That is the assessment on ECL as of now.

Exactly right. There is a drop of ₹150 crores close to the assessment what we have done.

Probably if we would have simulated this ECL a year back, our requirement would have been another ₹150-180 crores more. Probably 0.45 would have become 0.6-0.65%, and our capital would have dropped by 1% or so, 0.9 0.9% or so.

That's the benefit which we have got on the better asset quality.

Right. Sure, sir.

Secondly, sir, on the loan mix, we have loans to business enterprises, right? How is it different from MSME?

What is

Business enterprises is a non-MSME.

Then there are large industries also. What is this business enterprise?

Is this service, non-service, manufacturing?

When there is no URC, we consider this as a non-MSME loan, which is 18 826, what has been shown. Large industries and services are predominantly MSME only, and these are quite large corporates kind of stuff.

If there is no Udyam registration, then it will fall into business enterprises.

Correct, which will be a non-MSME loan.

Right, sure. Sir, lastly, on gold loan, we have average yield at 10.6%.

Have you increased it, let's say, over the last 1 year, or this is broadly stable, there is no change in the pricing?

Last 1 year, we have increased around 25 bps, 20-25 bps we have increased in the last 1 year. Okay.

Now, sir, let us say gold loan growth is still very strong. Why can't you increase this by, let's say, 100 basis point and let the growth fall?

There seems to be less elasticity here. If you want to calibrate the gold loan growth, you can actually increase the pricing, or that is not really possible?

It's not that not possible. Predominantly in agricultural sector, we are really there for the genuine need for the customers who want to harvest.

After harvesting, who wants to take it to the mandi, and from that mandi who wants to sell. Genuinely, we are there in the agricultural space, really we don't want to burden them.

That's one one set of thought process. The second set is NAGL, I think we are quite comfortable with what we are doing at 10.5-11.

We really don't want to go overboard and do this for the customers. Probably, we might look at 0.1, 0.2 if necessary, and if all the other players increase it.

Just for the sake of this, we don't want to do this. Okay.

Sir, is there any difference in yield between retail and agri jewel loan, or they are broadly similar?

Agri gold loan is lesser, 100 bps lesser it could be. That's what I said.

Genuinely, we are there for agri, we lend it at at least 100 bps lesser than what we do it for others.

Right. Sir, why is there the non-agri gold is very strong, right, roughly 40-45% versus agri gold loan?

Agri, I believe, is linked to your PSL and agri requirement. Any reason why the retail gold loan growth is still very strong?

Retail gold loan predominantly is always strong because, a, your consumption, when it goes up, this is the cheapest source of fund from a player like us because they end up in paying 10.5-11% or 11.5% to be precise. The number two is you want the money in the next 1-2 hours, I think this is the best form of product which can get them at a very less cost.

NAGL, which is non-agri jewel loan, is always going to be a demand-driven product compared to agri. Agri is more for a specific use, and non-agri is for consumption, it can be for emergency, or it can be for your business needs.

You have various things coming out, hence it's always going to be there, Jai, like this.

Right. Sir, What was the

second? Sorry, Jai.

One more thing. It is also the function of a increase in branches.

We used to be at 700, we moved to 800, and now we are at 1,000 as we speak. When it's a branch-led product, agri is a branch-led product, when your distribution goes up, your business also goes up, and it is a function of 700 to 1,000 branches what you are seeing now in the uptick.

In spite of that, we are saying we are at 31, and while we have the capability to grow more even at this current rate, we would be more comfortable with 33. I think the slide number 24 says it all, rather we build a book which is quite comfortable rather than getting into overboard.

Right. Last question, sir, again how do you benchmark the let's say per-gram limit for gold?

Let's say if the per-gram limit is 14,000 today, you do 75% of that, or you apply some moving average, or there is some floor, ceiling, or this is a daily continuous changing rate?

We don't change it daily. We see the price movement at least for a month or so, and then we change the price.

The change of price is not the function of when the price goes up, immediately we move up. Just to give you a overall perspective, at a current market price today, our average LTV is at 62%, to be very precise, 62.07%.

When we see this market going up for the next, say, 2-3 weeks, then we think to increase the rate. In terms of drop, we are quite cautious.

We see how steadily the rates are dropping, and immediately we come into this. To answer, while we landed at 65% LTV today, our price is at 62.

At a 5% drop, we will be at 65% LTV, under the 10% drop, we will be at 69% LTV, at a 15% drop, we will be at 73% LTV, under the 20% drop, we will be at 78% LTV. I think broadly we are comfortable in this prices.

Right. All right, sir.

That is very, very helpful. Thank you, and all the very best.

Thanks, Jai. Thanks a lot.

Hello. Hi, sir.

Congratulations on a great set of numbers. My first question was on the asset mix part.

This large industries that you have noted, it is a small portion of the book, but is it related to the ECLGS disbursements?

No. It is a proper funding.

It's not a ECLGS one.

Okay.

Just to give you a clarity, we classify this as a large industry when the turnover is above ₹750 crores and above. That's how we have classified.

It is a function of that clock or disbursal what we have done for this.

Sure. Why is that, sir?

Sorry, we lost you. We're sorry.

I was saying the quarter-on-quarter surge that is there in this book, what can we attribute it to?

We could not hear you, sir. We could not hear you properly, sir.

Am I audible now?

It's better. Please.

Yeah. I was asking there is a sequential surge in this book, can you explain what is letting it

to? Which one, sir?

Large industry?

No, we were at ₹2,2500 crores in 31/12, we dropped down to 15, and we moved to 19. One is the pricing, because of lower pricing, we closed the cases, and utilization level, function of two things: one is utilization level, other one is the rates were not conducive, they wanted to exit, we said fine, those customers exited us because of the yield pressure.

We don't want to reduce the rate, and number two is on utilization level. These are the broad things.

Sir, secondly, I missed the interest paid on borrowings, that was ₹94 crores this quarter, right?

Yeah, 94, yeah.

Sure, and how do you see the cost of deposits and cost of funds going from here? The

cost of deposit slightly moderated to 5.56 from 5.60 in Q4. Going forward also, probably it may be in the range of 5.6 to 5.7, and the borrowing cost of present status of ₹94 crores to continue for the next two quarters.

Sure. That was all from my end.

Thank you, sir, for all the answers. Thank you.

Thank you.

Hi, sir. Thank you for taking my question.

Firstly, specifically in the agri gold loan, what is the LTV? Is it similar to the overall LTV, or is it different?

Agri LTV will be slightly higher, 5% higher. I think 5-7% it should be higher than the non-agri.

Hello? Yeah.

It will be 5-7% more than the non-agri gold loans.

Understood. Sir, second, on the OpEx to assets or the cost to income, considering over the next couple of years, maybe 3-4 years time horizon, considering our aspiration to grow ahead of the system, how much potential do you think we have for positive operating leverage from here on?

Cost to income?

On the cost to income or an OpEx to assets basis.

I think 3 years is a long vision, at least for me now. Cost to income, our aspiration is to be less than 45.

That's a number which we are looking at, and all the work are getting for that only. Hopefully, we should be there.

We want to be less than 45.

Understood. Sir, in the MSME and LAP specific segments, any thought process regarding maybe moving higher or lower on the ticket sizes going forward, or you would like to maintain the broad ticket sizes?

Our ticket sizes have always been stable. Most importantly, we aren't chasing higher ticket sizes.

When I say higher ticket sizes, we really are not keen to do about ₹10 crores from a lot of perspectives. However, for my existing-to-bank customer base is a track we are looking at, our ticket sizes are broadly going to be more or less in the same range.

We don't expect it to go up. We are more comfortable with granular.

Understood. Sir, lastly, a data-keeping question, what would be the average LCR for the quarter?

We are at 150. 1-5-0.

150, 150, yeah.

Understood. Thank you so much.

Thank you, sir.

Hi, sir. Congratulations on the quarter.

Most of my questions have been answered. Sir, just one broader question.

We are seeing a lot of the Tamil Nadu-based lenders doing very well on growth, on margins, asset quality, and they're also very positive about the future. Sir, I heard you speak about say the textiles opportunity, but if you could call out say in the MSME, in the industry sort of lending, what are the drivers that is causing such optimism?

If you could just speak a little broadly about that, be it semiconductors, auto parts, what are the opportunities you're seeing that will drive this strong MSME growth? Yeah.

Thanks. It's not only Tamil Nadu, everywhere wherever we are operating, it's pretty decent.

Particularly textile space in Tirupur have been very positive on the momentum, and if you come to this side, Sriperumbudur, you have a big automobile space, which we have a lot to cover, by the way. Our share can considerably go up there.

We are overall positive on consumption. The business is really taking off in other specs as well.

We expect this momentum to continue. Whatever we are talking to the clients, we have been in the paper space, we went to the paper industry, paper industry is also been doing well, in Kangeyam, Paladam, corrugated boxes, these are also in a really good shape.

Hopefully, the trend continues. I think most of us should definitely do well.

Sure, sir. You expect this sort of net slippage trend of 0 to negative, that sort of continuing for the foreseeable future, is it?

We have given it for this quarter. Hopefully, if your words come true, we should continue.

Sir. Perfect.

Thank you so much, and congrats once again to the team on the quarter.

Thanks a lot, sir. Thanks.

Thanks a lot. I think broadly we were in line with the expectations of what our deposit growth is getting aligned with our credit growth, I think which is helping us to maintain the LDR levels at the desired range.

As we discussed during the call, we expect the NIM to be in the range of 3.65 to 3.7. Our ROA is also expected to be at the current level.

We don't see much issues there, and better asset quality, we would like to continue. Better business growth with better asset quality, and we want to maintain the cost to income at the desired level with automation, with AI in some of the spaces which we have invested, and at the operational space, we have invested much in AI.

I think we should get this cost further coming down. Hopefully, we would like to maintain this momentum and continue for this quarter.

Thanks a lot to everyone. That's it.

Thank you.