Thank you, Rutuja. A very good evening to all of you.

I welcome you all to the Q4 earnings call of HDB Financial Services Limited. We have with us Mr.

G. Ramesh, MD and CEO, along with myself and the senior management team of the company.

I hope all of you would have had a chance to peruse our financial results, the investor presentation, and the press release which has been filed with the stock exchange earlier today and also available on our website, www.hdbfs.com. We will start with management remarks, and then open up the call for Q&A.

The audio recording for this call will also be available on our website shortly after the call ends. I would now request our MD and CEO, Mr.

G. Ramesh, for his opening remarks, following which I will provide a brief on the financial results and then open up the call for Q&A.

Thank you, Jaykumar, and a very good evening to all of you who have joined us today. As we exit fiscal 2026, I'll begin by highlighting a few key aspects of our performance that underscore our operational resilience and long-term trajectory.

These represent our commitment to execute our mission of serving aspirational India, and sets the stage for continued growth in the coming years. First, our customer franchise expanded to 22.9 million, about 2.5 times since 2022.

Second, our expansive distribution network now covers 1,161 towns and cities of India with 1.6 lakh plus retail and dealer touchpoints. This is the physical distribution; we also have extensive digital presence.

Third, disbursements for Q4 FY26 was the highest quarterly disbursement by HDB, growing 11% as compared to Q3 of FY26. Fourth, book growth came in at 3.4% in the current quarter, along with a marked improvement in asset quality, which sets the trajectory for our growth plans.

We maintained the granularity of our 100% retail loan book with average exposure per customer of about 1.66 lakhs. Robust operational execution with our pre-provisioning operating profit growing by 7.8% and PAT growing by 16.6% sequentially.

On annual basis, our pre-provisioning operating profit grew by about 27%. On the credit and collections front, we had a significant improvement in asset quality across all products.

Gross NPA, which we also report as gross Stage 3-- we don't report two different numbers-- reduced to 2.44% as at March 31st, 2026, versus 2.81% as at December 31st, 2025. Coming to the macros, robust rural demand, sustained momentum in domestic economic activity, and supportive policy measures augur well for the economy.

Regulator kept policy rates unchanged and maintained the neutral stance. Real GDP growth showed resilience and inflation stayed benign.

While GDP growth projections remained largely steady, the West Asia conflict and probable weather disruptions from El Niño may have an impact on growth and inflation. Quick restoration of supply chains and timely conclusion of the conflict remain a key monitorable.

We continue to track the rapidly evolving global situation and its potential impact on our business. Coming to the vertical-wise commentary, as you may recollect, we run our business along three major business lines.

On enterprise lending, Q4 disbursement for this segment grew by about 28% sequentially and 15.4% year-on-year. Our LAP plus EPL book, which is our mortgage business, grew by 3.8% sequentially on the back of a 36% disbursement growth.

Our gold loan book doubled in FY26, with 58-- 7.8% growth in disbursement quarter-on-quarter. We expect positive momentum on our unsecured business loans going forward, where we have seen significant improvement in asset quality.

Collections and portfolio quality for this vertical continue to improve. Asset finance, commercial vehicle and construction equipment book showed moderate growth in Q4.

We saw continued improvement in asset quality in our commercial vehicle business with both early buckets and Stage 3 improving. Our focused approach within CV and CE segment, backed by our extensive OEM partnerships and dealership networks, positions us for strong growth in the coming quarters.

On consumer finance, book for this segment grew by 5.3% quarter-on-quarter and 19.4% year-on-year. This was led by consumer durables followed by auto loans.

We expect momentum to continue in this segment on the back of sustained demand for consumer durables, auto loans, and two-wheelers. Overall, our customized suite of products enables us to provide credit to aspirational India.

Our distribution touchpoints and digital sourcing channels ensure our reach across the country. Focus on digital sourcing channels through our DIY platform, which is do-it-yourself platform, helped us multiply our disbursements by about 2.2x in FY26, and we expect this momentum to continue.

Made significant investments in our technology capabilities including AI, which have started yielding positive results for our customers across our marketing, customer service, and collections functions. One of our initial implementation is in collections through a scalable bot-based intervention for engaging customers who are in the early buckets.

In Q4, over 50% of our customers who needed a nudge were assigned a bot, which resulted in improved collection efficiency of about 25 basis points in the early buckets. As I said, this is still a early stage and we see a lot of improvement going forward.

On the customer service front, we implemented in-house SLM-powered auto sorting and saw 20% reduction in response times, ensuring faster resolution of customer queries. We're currently running five large AI-powered business initiatives across the organization.

We'll continue to invest in technology to drive efficiencies. With that, looking forward to a healthy FY27 with strong growth trajectory, I will now hand over to Jaykumar for an update on the financials.

Thank you, Ramesh. Moving on to the financial performance for the quarter, customer franchise grew by 22.9 million with an increase-- grew to 22.9 million with an increase of 4.3% sequentially and 19.7% year-on-year.

Gross loan book as on March 31, 2026, stood at ₹1,18,493 crores, growing 3.4% sequentially and 10.9% YoY. Secured loans comprised 74% of the gross loan book.

Disbursements for the quarter ended March 31, 2026, was ₹19,922 crores, up 11.2% sequentially, an all-time high, as Ramesh mentioned, for HDB. Branch count stood at 1,730 spread across 1,161 cities and towns.

Net interest income for the quarter was ₹2,399 crores, an increase of 5% Q-on-Q and 21.6% Y-on-Y. Net interest income for the year ended March 31, 2026, was ₹8,968 crores, an increase of 20.4% Y-on-Y.

Net interest margin for Q4 FY26 was 8.2% versus 8.09% in Q3 FY26 and 7.55% in Q4 FY25. Net interest margin for the year ended March 31, 2026, was 7.96% versus 7.56 for the year ended March 31, 2025.

Cost-to-income ratio for our lending business was 39.5% in Q4 FY26, as compared to 41.6 in Q3 FY26. If we were to compare it with after labor cost, that was 39.5, it's largely remained flat, and 42.9% in Q4 FY25.

The ratio for the year ended March 31, 2026, was at 41.1% versus 42.8 in the prior year. Cost-to-assets for the year was at 3.8%.

PPOP, which is pre-provisioning operating profit, for the quarter was at ₹1,675 crores, as against ₹1,555 crores for the prior quarter, a growth of 7.8%. Credit cost for the quarter stood at 2.35%, as against 2.52% for the prior quarter.

Profit after tax for the quarter ended March 31, 2026, was ₹751 crores, as against ₹644 crore for the prior quarter, a growth of 16.6%. Gross Stage 3 as at March 31, 2026, was 2.44%, as against 2.81% as at March 31, 2025.

Provision coverage on Stage 3 stood at 55.53%. ROA on an annualized basis for the quarter ended March 31, 2026, stood at 2.48%, as compared to 2.19% earlier.

ROE on an annualized basis for the quarter ended March 31, 2026, stood at 14.83% versus for the year FY26 at 13.94%. Earnings per share for the quarter was ₹9, and the book value stood at ₹248.9.

Our borrowing mix remains well-diversified with a positive cumulative mismatch across all buckets up to five years. We remain well-capitalized with the total capital adequacy at 21.4% as at March 31, 2026.

We can now open up for Q&A. Rutuja, we'll hand it over to you to open up the Q&A.

Thank you.

Yeah. Good evening, sir.

Thanks for taking my question, and first of all, congratulations on a good quarter. Sir, that's exactly where my question is, that while I think most of us know that we've not seen the impact--

Is it better now?

Yeah. Sir, I said, congratulations on a good quarter, and that's, I think, where my question is.

We kind of, almost all of us know that we did not see the impact of the war in the month of March, but if you could just help us understand, what is it that you started seeing, maybe in the last week, 10 days of March? What is it that you've seen in the first 15 days of April?

Because I think I remember, I think, sir mentioned that quick resolution of the conflict and restoration of supply chains will be a key monitorable. Are we seeing supply chain disruptions?

Are we seeing some impact on CV operators, particularly near vehicle financing business? That is the first question that I wanted to understand.

Thanks, Abhijit. Let me cover off as a whole.

I think it's important to look at it holistically. I think CV is a portion of our business.

Overall, March, while there have been talk in the market, I think March for us went well, and that's clearly reflected in our results. There has been clearly a concern, and we called it out in our opening address, Ramesh mentioned it, that the West Asia conflict remains a key monitorable.

I believe the government is doing a reasonable amount of work to make sure that while there are pressures all across, they're trying to keep things as normal as possible. I think at this point in time, the way we would call it is that I think it remains a key monitorable.

There are certain challenges, but we remain focused on our growth from here on, and over the next 15-20 days, as the situation develops, we will keep monitoring it closely.

Got it, sir. Then, sir, the second question I had is, while you spoke a little bit about the CV ecosystem, and on the same side, you also have this MSMEs and the SME ecosystem, which we all believe and keep hearing and keep reading, could be one segment which could be vulnerable if there are kind of supply chain disruptions, if the earnings of these MSME, SME customers get impacted because of the ongoing conflict.

Were there any thoughts, and a related question at that, if at all you are seeing anything already in the month of April, was there any deliberation around building some contingency provisions or some buffer provision?

Abhijit, the way I would look at it is the results are obviously as at March, and we do continuously discuss as a business because our business is pure retail, right? At this point in time, we haven't seen any specific Level 2, Level 3 impact coming through, is the way I would put it.

Again, I will, at the cost of repetition, the situation remains a key monitorable for us. As and when things develop, I think we will do the needful.

The one good thing is that across the years, I think we remain very strong in terms of making sure with touchpoints on the ground. Across our LAP business, across MSME business, we've called it out in the past that we had challenges, we're over it, right?

We called it out last quarter. We are completely over it as at the March quarter.

The whole focus now on the ground across enterprise lending business, across CV, and across consumer is growth. That's the way I would put it, and that's the way we would like our stakeholders, our people, our investors to work with us on the growth agenda.

Obviously, if things change globally and things change on the ground and there's a Level 2, Level 3 impact, we're well positioned to-- how should I put it-- deal with it.

Got it, sir. Just a follow-up from what you just answered.

If I look at this year, I think we've reported around 11% kind of year-on-year growth in our loan book, and we've seen momentum build in the second half of this fiscal year. Like you mentioned, right, the focus is on growth.

How are we going to approach FY27? Let's keep this conflict aside for a bit.

If things were to become much more peaceful than what it is today, how is it we are going to approach growth in the coming fiscal? That's all from my side.

Thank you so much.

Thank you. The way I would look at it, Abhijit, is that we've always called out that in the medium term, over the three-year agenda that we have, we look at a nominal plus 6% to 7% growth, and we're very focused on making sure we deliver to that.

Perfect. That answers my question.

Thank you so much, and I wish you and team the very best.

Thank you.

Hi, sir. Congrats on a good set of numbers.

Sir, just a couple of things, Jay, maybe slightly repetitive, but please bear with me. On the growth front, right, if you look at FY26 as a whole, barring last maybe 45 days or two months, we are still on the lower side, which is sub-10%.

Obviously, our growth aspiration has always been nominal plus 6%, 7%. Now, as you mentioned in your opening remarks as well, that the stress in CV or maybe unsecured PL is largely over.

How confident we are of achieving those aspirational growth numbers in '27-'28?

Okay. I'll just put numbers into perspective, Renesh.

Our Q2 disbursements were 15,599, and it's on slide 22 in case if anybody wants to refer to. Q3 was 17,917.

Q4 we exited at 19,922, right? The clear aspiration from here on, and the goal and the plan, is to start delivering on this base and forward, right, to be able to achieve our numbers.

We have plans in place. We've started April with the same level of vigor, the same level of conviction within our teams to be able to deliver on the growth agenda that we have.

The first step obviously in there is disbursements. Some amount of math will play in, in terms of how much disbursement relates into how much book.

What I would like the investor community to read into to begin with is the disbursements, because as that starts growing and that starts resulting in the positive book, you'll automatically see the movement towards what we want to deliver.

Okay. You're trying to, let us say, highlight that from Q1 onwards, the improving trajectory which we are witnessing in second half '26 ideally will continue, and that will obviously lead to the kind of growth we are looking for.

Is that the fair assumption?

Yes. Just to make sure we're on the same page, Q1 generally is slower, I would compare Q1 to Q1 obviously, not Q1 to Q4 and say there is a 10% jump on Q4 to Q1.

Obviously, there will be good amount of positivity that you'll see, or we expect to see for ourselves as well. Got it.

Got it. Secondly, sir, I was just looking at the repayment rates, and as per my calculation, in enterprise lending, my repayment rate has jumped to 11%, which used to be average 9% on quarterly basis.

Just wanted to check, is that due to higher BT-out in LAP, or is there a product mix change within enterprise lending which is leading to higher repayment rate?

It may be more of product mix thing. Today we haven't seen anything odd in the month of March than what we see generally in March for LAP, EPL, yeah?

The other thing, as we've said in the past and we continue to focus on, the risk-adjusted portfolio that we look at, right? If you look at growth, right, the enterprise lending business genuinely grew at 20% plus, right?

Ramesh called it out in terms of the enterprise lending business growth, and that's a very positive thing, right? Q4 disbursements grew 27.9% sequentially, right?

That's a very powerful statement for us in terms of our ability now to pump things in and move forward from here.

Okay. Sure.

Thank you, Jay.

Thank you.

Hi, Jay. Congratulations on good set of numbers.

First is with regards to, I would say, the cost of funds and the margins. In Jan, Jay, you had mentioned that now incrementally there is not meaningful scope and room for cost of fund reduction.

Just first wanted to understand what has resulted in this 35 bps improvement on a sequential basis, and more importantly, how should we look at it, I would say, going ahead, especially given the way the bond yields are, and even if say the war resolves, some of that impact is going to be more lasting at an economy level. How should we now look at it incrementally?

That's my first question. I'll come for the second question then after this.

Okay. The way to look at NIMs, and let me start holistically first, Viral.

If you look at NIMs, one of the biggest things we prized ourselves over the last three quarters that we've been speaking is on holding to our rates, right? That's continued in this quarter as well, where across every single product that you look at in our portfolio, we have made sure as a business, as a team, we have held on to our rates.

Very clear on making sure that risk-adjusted return that we make, we do well. There has been a slight reduction of maybe 7-8 bps on the yield side, but that's purely on account of product mix.

You'd see that disbursements on the unsecured book hasn't grown as much, and that's something, as I mentioned earlier, very focused on making sure that grows. Once that growth comes back, the yield should come back and make sure we stay within that 14% plus range.

That is step number one. The second big item on the borrowing side that you mentioned, as we've been speaking, we said that we were confident of our borrowing cost, and we continue to be confident.

What we've done is we've made sure on the borrowing side, we have used certain strategies on borrowing which help us reduce cost. We have made sure we've worked with our partners to keep costs at a bare minimum.

There has been some advantage that we had called out earlier that we don't have any more low-cost borrowings which are to reset. We finished all of that, the last tranche almost finished in October-November 2025.

What that's allowed us to do is that if there were borrowings at 8% plus or even a 7.5%, we've managed to further work on that and make sure we tighten the ability on our side to make sure that the funds we get into the company are at the best rates to enable business to go out and lend, and lend to the right quality customers to ensure we get a good risk-adjusted return. Pretty much sustained that, Viral, and some of these pieces, it's not one particular strategy, it's a combination of various things that we've been working on for the last few years, falling in place, working through it, strategic pieces coming in and making sure it helps us come to a cost of borrowing which we're good at.

That's been the key focus. In the market, has borrowing cost gone up over the last one month?

Answer is yes. The one thing you will see in our borrowing mix is that we still have very low CPs, and that's dry powder that we've kept with ourselves.

We still have a very healthy mix in terms of bank loans, it is not even crossed 50% today. We're making sure that we are very careful with how we borrow, don't let our mix go off, and make sure this is sustainable.

Got it. You expect this cost of funds to broadly sustain even if the broad market rates are?

I would like to think at least for the current quarter, we're good, right? Beyond that, obviously nobody knows what can happen tomorrow morning.

Everything remaining equal, I think we'll be able to sustain it in the near future for sure.

Got it. My second question, Jay, was with regards to, I would say, on growth, and I know a couple of questions you addressed that.

Of course, fully understand that it is first going to reflect on disbursement and then gradually on book. Within that, when I look at the mix, right, first of all, on a YoY basis, the disbursement growth is 13%.

Of course, there is a seasonality just as from 4Q to 1Q, similarly from 3Q to 4Q also there is a seasonality, right? On a YoY basis, the disbursement growth is still 13%.

A, first of all, do you see this picking up to say at least in the corridor of 18% to 20%? The reason why I say this is that the mix of it, the share of or at least the growth of asset finance, which is typically a longer tenor book, is actually reducing, and whereas the enterprise and consumer finance is actually driving this disbursement growth.

For our AUM growth to kind of say materially pick up and eventually at least show up say over a period of time, we would need this disbursement growth to be at least 18% to 20%. Do you see visibility of that?

Yeah. Let me cover a few aspects.

Today, when you look at our enterprise lending and asset finance and the consumer side. In enterprise lending, we have LAP, which is a longer tenor product.

In consumer, we have two-wheeler and auto loans, which are relatively longer period compared to a consumer product. Plus, in the asset finance space as well, we've discussed on multiple occasions over the last quarter that we're very focused on making sure we grow our used business.

We have a lot of plans in place. We've done a lot of homework there, and we're relatively confident that that business also, we will grow well.

Across the board in areas that we wish to grow, that level of confidence is there today. To your second question, I'm very hopeful on a year-on-year basis the number that you mentioned is something which we will work towards, and if everything remains equal, hopefully we'll do well on that number as well.

Right. Can I just squeeze in last question?

Okay.

Basically, on the asset quality front, agreed there has been a, I would say, very marked improvement in 4Q. Just wanted to cross-check on one piece.

There has been a sharp 30 bps increase on Stage 1 PCR. Is this just a annual refresh or there's something else over here which has played in?

No, we've discussed in our previous interactions, Viral, that given that we are a very retail lender with a highly granular book, our provision is driven largely by our product mix, right? It's very granular, it's refreshed every quarter, right?

There's nothing called one-time. We identify homogeneous asset pools for calculation of our ECL, which is driven by PD, LGD of those pools and the segment, subsegment as applicable.

One of the things our provisioning methodology takes into account is the company's historical credit loss experience, current economic conditions, forward-looking information, and scenario analysis. That's built into it in terms of the methodology, and that more or less comes out.

There's nothing specific that I would want to highlight, but we're well positioned in the medium term in terms of the base at which we wish to operate on the credit cost side.

Got it. Basically, this partially does take into account the current scenario that we are in.

The methodology makes sure that if there is any adverse things, to an extent it would take care of those things.

Got it. Thank you.

Thank you for the opportunity. I had a question around the vertical-wise asset quality that you have shared.

Just wanted to highlight, we only have data for three quarters, but just wanted to understand. First is on the asset finance, this gross Stage 3 moved from about 3.1% in fourth quarter of '25 to 4.3% last quarter, and now reversed back to 3.8%.

This is quite dramatic an improvement, while even the deterioration was quite rapid. Can you help us understand what exactly is driving this much faster recovery trends that we are seeing over here?

Is it simply a function of market environment improving or anything that we were talking about, our technology-led collection team, AI-led collection bots making it easier for us or anything that you can highlight on that front? That will be useful.

Similarly on the enterprise lending, in the gross Stage 3 and the PCR, while we called out the stress in this book in the last couple of quarters, the PCR here used to be much higher at about 57%, 58%, 57% or so last year. We've brought this down, it seems a little contrary.

We thought that there would be a little bit more provisioning required over here for this book to clean up. Just some understanding around the provisioning for the enterprise lending book.

Thank you.

Sure. Shreya, let me take the opportunity to make it a little more holistically and give you both your answers as well.

If you look at how our Stage 3 has operated, an important piece is enterprise lending moved from 1.82 to 1.58. It was 1.79 last year, right?

There's been a marked improvement there. Across the board, as I mentioned, a lot of our calculation happens through PD, LGD, and what the underlying book mix is, there's not much that we go in and check as to what account falls under A or B and we do some manual adjustments.

We don't do that. It comes in a automated format.

In fact, I would like to give credit to our IT team and our finance team that they've actually fully automated ECL this quarter, it actually comes out from the system. Now, in doing that, obviously there will be certain loans at a particular stage with different kinds of PD, LGD in different subproducts.

It's purely an outcome. We don't believe there is anything more that we need to do.

I hope I never have to bite my tongue on this one, but there's a lot of work which is gone in to make sure that we're comfortable with the book in enterprise lending and be able to grow from here on with good quality. That's the first one.

On asset finance, as you rightly mentioned, it has moved from 3.14 to 4.3 to a 3.79. Now, as you would remember when we called it out in Q2 and Q3, there was a challenge which the business got hit by, and the recovery has been slightly K-shaped.

What do I mean by that? The accounts that went and got challenged at the end of Q1, their recovery hasn't been very great.

What we've done, I can just share some insights. What we've done is we've made sure we push hard on that recovery to reduce Stage 3, and that's where the business and collections team together have done well.

At the same time, they've worked very hard to make sure flow-forwards reduce. That is a key thing from a future standpoint which gives us the confidence, as Ramesh was mentioning, from a growth standpoint, to be able to grow from here on because what we're onboarding now is good.

You will see that Stage 3 come down, at the same time you'll see the health of the overall book sustain as well. Right, and finally on consumer finance, there also you see good improvement from Q3, while from last March there has been a slight uptick.

That 2.26 is 2.44, but there are lots of strategies in there that we have today to be able to work around this number and hopefully pull it down or maybe stabilize it over the coming quarters. Yeah?

Right. Just a follow-up on that, in the asset finance, you mentioned there's a K-shaped recovery.

The accounts which were challenged in one first quarter, there it has not been great, but the accounts which probably slipped in the last quarter and all, they're recovering at a much faster pace. Is that the way to think about it?

Yes, in one word.

All right. All right.

Thank you. These answered my question.

Thank you so much.

Thanks for the opportunity. Just had two questions on the disbursement side.

If I look at enterprise lending, there has been about 27%, 28% growth on a Q-o-Q basis. What really changed in between the two quarters?

What is it that the company did, which helped us get on a Q-o-Q basis? Second was on the asset finance, if I look at the full-year number, that has been a decline of 3% disbursement.

Just wanted to understand, was it a conscious call just to focus on the credit quality that you've allowed to grow or probably decline this book a bit in terms of disbursement? Also, you've been talking about 50-50 used and new kind of a mix within asset finance.

Going ahead, how should we look at the growth especially in the asset finance segment? Maybe if you could call out in next one or two years how should your AUM look like?

Sonal, two parts. I'll go through EL first.

On the enterprise lending segment, we had called it out in Q1 that we had strategically or tactically looked at focusing on making sure the asset quality comes back, especially within the business loan side. By Q2, we were relatively confident.

In Q3 onwards, we've really started pushing on the growth front. That's come about on the secured business within enterprise lending in a good way.

On the unsecured business, we have the house in order in terms of the backend, in terms of the credit engine, in terms of the criteria that we look at. Now the whole focus is just one, making sure our guys get on to the ground with the confidence that the risk-adjusted pricing that we're talking about, go to the right customer for the needs that they have, support them in their growth, and ensure HDB grows as well.

That's the focus really on enterprise lending. On the asset finance side, you're right.

We've spoken about reaching towards the 50-50 over a four-year period. That's something which I called out earlier as well, that we want to really grow our used business.

On the new side, we will grow at industry rates. On the used side, we're going to push more.

We are much smaller today than a lot of established players in the market. With the kind of network that we have, with the kind of teams that we have, I think the focus is really going to help us push that hard.

It is a key deliverable for us. We will be watching it closely, and I'm sure in three months' time when we speak again, this is something that I'm very hopeful I am able to deliver good amount of positivity on that front.

Sir, on the AUM mix?

The AUM mix today is 38-38-24. I think over a period of time, it could be 38-37-25 or so in the short term.

Every single business that we have remains a key focus area for us. There is nothing that we're deprioritizing.

We're just making sure that as we grow from here on and we double in size over the coming years, the risk-adjusted portfolio is a conscious decision and not something that we have to worry about at some point in time.

Sure.

Hi, Jay. Hi, Ramesh.

Good evening. Sorry, I joined this call a bit late.

If you can just reiterate the growth guidance, both for disbursement and AUM, the credit cost guidance, and the NIM guidance for FY27. Just one data point which I wanted to understand, what is the total quantum of write-off for 20-- entire year '26 and in the fourth quarter '26?

Thanks.

Shubhranshu, first thing, we don't provide guidance on specific numbers. I'll cover it in a manner of what I have been speaking with all investors over the last few quarters.

On the growth side, we're looking towards a medium-term trajectory CAGR-wise nominal plus 6% to 7%. At this point in time, you will see that first coming through disbursements, and then obviously on the book front, it will reflect as such.

On the credit cost side, we've discussed over the last couple of quarters that we wished for it to moderate in the range of 2.3% plus-minus. At this point in time, we believe that going forward, we should be able to work with that number for the medium term.

On the NIM side, we've guided or we've spoken, and depending on how the market goes, of making sure that we maintain an 8% plus. Today, it is 8.2%.

The businesses have been very focused in making sure at no point in time we drop yields, so that's really helping in making sure it stays up. On the borrowing side, again, the teams have done extremely well in making sure our strategies work.

We're at 8.2 today, but an 8% plus is something which we would want to be at every point in time over the coming period. That's something which, when we compare to last year, we had dipped at a point in time.

Going forward, we will make sure that we're consistent in an 8% plus NIM.

The quantum of write-off in this quarter and full-year '26?

We'll pick it up. It will be there in the financials.

I think you can just pick it up offline in terms of the number as such, yeah?

Okay. If I can just squeeze in one last question, the growth in OpEx, how much are we expecting in '27?

My OpEx today is at, whether you count it as a 39.5 or a 3.7, 3.8. I think we will range around 3.7.

Ramesh mentioned about a few AI initiatives that we are running, and we're very keen that we continue to invest in the business from a growth standpoint. At the same time, our chief credit officer is very keen to make sure that on the collection side, some of these initiatives also help us reach out to customers better, in making sure we nudge them in the right way for money to flow back in faster.

Right, similar range. That's very helpful.

Thank you so much. Best of luck.

Thank you.

Hi, sir. Thank you for giving me the opportunity and congrats on a good set of numbers.

My question was on margin front. We've been trying to, let's say, increase the used segment within CV, FE as well as our share of consumer loans is also marginally increasing and we're aiming at further increasing it.

Whereas on the cost of fund side, you highlighted that we would be able to maintain it at current levels for at least medium term. If that happens, then what is the kind of, let's say, margin that we can reach to?

Because if these levers play out, then probably is it possible to do, maybe on a sustainable basis, at an 8.2% margins?

Thank you, Shreepal, and I'm very hopeful that what you've asked is what I can deliver. Just to clarify, what I said is at least for the current quarter, right?

We should relatively be good on our cost of borrowing. There is a lot of volatility today, Shreepal.

What we were borrowing at probably three months ago and today has been slightly different. I'm hopeful that going forward, we will keep it at higher levels, but an 8% plus is a non-negotiable the way we treat it internally today, right?

That is something when we make our two-year, three-year, five-year plans, that is, as I said, a complete non-negotiable. At every point in time, like any good business, we will maximize how we look at our assets in the form of risk-adjusted return.

As I said, the business has been great in terms of making sure that yield stays. The product mix, we've been comfortable all throughout at a 72-28, 72 being secured.

We're 74% secured today. As we grow some of those businesses and that comes in, hopefully that helps us on the top line, and with borrowing costs, and if all stays well, let's hope that we're able to talk about the number in the medium term that you mentioned.

Got it, sir. Just once last question was on the branch network side.

That number has come off. I understand we must be rationalizing some of the branches or maybe consolidating some of the branches.

Do we plan to add branches, let's say, overall in FY27 or let's say in FY28 time period?

Absolutely. I'll turn it round a bit.

We have not reduced a single square footage of usage in the last three quarters that we've been in existence, right? The most important thing, Shreepal, that we're looking at now is looking at branches, and just so that all of you are on the same page, today when we set up a branch, we set up a branch even in 600 square foot and 800 square foot, right?

As a branch grows, we might have two branches in the same vicinity that we've done over a period of time. We're looking to see how do we combine that branch potentially and maybe multiply it in terms of size.

There are a lot of branches today that we've moved from our 600, 800 square foot to a 4,000 square foot, right? That helps us deliver better to the customer.

You need one branch manager, you need one security guard. A very trivial thing which is very important in the working space, you'll properly have toilets.

The employee well-being is better, the feel is better, helps us deliver better to our customers. A lot of those factors have gone in making sure that the space that we have now is properly suited for the next 10 years.

That's something we've been working very hard on. You might see 20-30 branches go up and down.

The focus also is how do we deliver better to our customers. DIY that Ramesh spoke about going two times to maybe five times, etcetera, growth-wise, right?

That does not need branch, that needs technology. As I mentioned, that's something we'll continue to invest in to make sure we deliver on the overall growth targets that we have.

Got it, sir. Thank you, sir.

Thank you so much for answering my question.

Thank you.

Good evening to the team. I have two questions.

My first question to Mr. Ramesh is, how do you see HDB Financial Services expanding its lending and customer financing business in the coming quarters, especially in terms of reaching new customers, improving service quality, and using digital platforms to make borrowing simple?

That's my first question. I'll ask my second question after this.

Thank you.

If you look at our customer franchise, that's grown from about 5 million in 2020 to about 22 million in 2026, right? It was 12 million in March '23, it was about 5 million in 2020.

A key to our growth, we believe, is the customer that we service in India, which is aspirational India. This segment is expected to grow as India grows, as India gets larger economically.

This segment is likely to have the most outsized growth in terms of just sheer number of people who will come into our addressable base. That's the first point.

The second point is that we spoke about our distribution, represented today in 1,161 towns and cities. I can assure you that the 1,161 town that we're talking about is probably as small as what a cluster can get.

I think what we've been able to do is to deliver service standards which are uniform across the country. In our consumer finance business where we work with more than 100,000 retailers, whether the retailer is in a metro like Mumbai, Delhi or whether he is in a small town like Jorhat, the service standards are same in terms of the time it takes us to do a credit appraisal and do a delivery.

By the way, this is true for all products, but I'm taking consumer finance because that's a product where we deliver a credit decision in a matter of few seconds or minutes. That's the second point, in terms of how do we engage with our customers in a very, very transparent and non-discretionary manner.

The third thing is that our extensive distribution means that when we work with our manufacturer partners, whether it's in our commercial vehicles, construction equipment, consumer durables, digital products, or tractors, we have a very strong proposition for them in that we can cover practically the entire country and give them a value proposition not just restricted to 100 or 200 cities, but 1,000-plus cities in India, right? That's a very strong proposition.

It's a strong moat. It's not easily replicable.

Building this kind of distribution takes time, and building consistency and service delivery takes even more time. Right?

The fourth is on our digital initiatives. Today you can go to a e-commerce platform and get a loan through HDB even if you're new to HDB.

Our downloads of our app today stands at 1.14 crore downloads. We have 4.76 lakh daily users on our app.

What this enables us to do is to engage with our customers who are our existing customers to make sure that we're able to tell them about what's happening, what are the offers we have for them, and what else we can do for them so that we have a extensive engagement with our customer base. What it enables us to do is to engage with the customer through their life cycle, and that's really the proposition of our company, that how do we engage with the customers through their life cycle.

Whether it's a consumer loan that they want to enhance their lifestyle, or whether it's a vehicle loan to augment income, or whether it's a loan against property for a capital investment or for a business expansion that they have, irrespective of the use case or the need case, we have a suitable product and that product is a hero for that customer at that point of time. That's the second point.

The other point is on use of technology, right? There are three use cases for technology: one is to reduce time to deliver credit or time to collect or time to service a customer.

I think that enables us to deliver a consistent proposition to customers. The second is to reduce cost, right?

There are certain activities, if I can put them on a digital workflow, I reduce the cost as compared to what I would do otherwise. The third is to improve quality, right?

Given that we originate almost a million customers a month on that or thereabouts, which means that we have to deliver very high-quality service. If I'm going to do 100,000 consumer loans, I have to make sure there are 100,000 payouts, payments go to the dealers without any delay so that we have consistent business coming through.

Whether it's cost, quality, or time, we put out metrics when we put out a technology project and make sure that we deliver on those numbers, and we monitor to make sure that those technology intervention delivers the results that we're looking at. Yeah?

Thank you. My second question to Mr.

Shah is, how do you plan to manage risk in the lending business, such as credit defaults or any compliance changes and market volatility, while keeping the profit steady and ensuring a sustainable growth for the company? Just want to understand your vision on this.

Thank you.

Thank you. The way we look at it, first and foremost, you need to think about us that we are an HDFC Bank subsidiary, right?

Today, every single regulation that comes in pulls it more towards like a bank. The benefit we've had, if I can put it that way, is that every single bank regulation that comes in, we're actually operating on that any which ways.

Within those realms of possibility or boundaries that we have, we have a moat in terms of how we deliver to our customers, and make sure that the customers that we look at clearly have a need for what we do, and we partner with them on their growth. At this point in time, from where we are in the overall credit cycle, where we are with our customers, as we mentioned, we're very focused on the risk-adjusted portfolio, risk-adjusted customer that we looked at, and over the last quarter, it's a testament in terms of us holding on to our top line.

We will continue to do that. We have a wide variety of products.

Each product, each subsegment in that has a focus in terms of which kind of customers they should look at. The credit teams put out details in a very, very granular manner, and that will absolutely continue going forward.

Thank you. Best wishes.

Thank you so much.

Yes, sir. Thank you for the opportunity.

In terms of, sir, customer segment like we are are you seeing in this particular financial year have you seen any major market share gain in the some of the product categories or customer segments compared to our competitors in this particular year? Can you call out some products or segments?

Sorry, Manish, we're not clear about the question. Could you help me understand a little more, rephrase it or help me understand it better?

My question is, sir, I want to know HDB Financial gain market share in particular customer segments or--

Am I audible, sir? Now it is better?

My question is in this particular financial year '26 [unclear] have you increased your market share in some of the [unclear]?

go to the next speaker and we'll come back to you, Manish, because we really can't hear you. If there is something that we miss, then you can obviously get in touch with Gaurav and then we'll come back to you as well.

Hi, Jay. Thanks for a follow-up.

See, just again touching upon this distribution thing, right? For retail business, obviously, the distribution is a key pillar.

Now, when we look at whether it is town and cities addition or physical branch addition over last one year or so, it is actually either flat or there is a decline, right? How are we seeing this internally, and what gives you comfort that we'll be able to achieve our aspirational growth targets with this physical network and also distribution in terms of town and cities?

Renesh, I think one of the things that's changed over the last few years is the amount of digitization of processes. No more does a sales officer carry a file to the branch anymore.

The credit is delivered to where the customer is in most of our product categories, right? In most of our customer categories, credit is delivered to the field.

It is not decisioned in the office. Think of a consumer loan or a vehicle loan, the credit is delivered at the point of sale.

It's not delivered and decided in the office anymore. Which means that I don't have to have a physical office in the vicinity of where my salesperson operates for the person to carry a file every day to the office, right?

When we started our business in 2008, practically every customer application, there would be an application with supporting documents which would be received in the office at the end of the day. Credit officer would look at that file and the process would start then.

Today, the process starts when the customer is met, expresses interest, and shares some basic documents. Those are all scanned in real time through an app that the salesperson carries.

I'm talking about assisted journey. In a digital journey, the customer does all this by himself or herself, right?

The need to have a physical office in the proximity of our distribution network is lower today. I could simply ask the salesperson to visit the office once a week if it's 50 kilometers away, right?

What we've been able to do is to set up more distribution points through our feet on street and through our digital channels than what we could have afforded to do a few years ago. I think the decline you see is really because some of the smaller locations where we had offices, we decided that it's not worth keeping a physical office anymore because that location can be serviced from a second location.

The other thing that I spoke about is that our do-it-yourself has gone up by 2.2 times in one year. Now, a lot of existing customers, right, because they have had good repayment relationship with us, we encourage our customers to come through our app where the offers are available, and complete the journey digitally itself, because that can be done whenever the customer is free, whether it's 11:00 in the morning or whether it's 7:00 in the evening, does not require a personal intervention.

If the customer, at any point of the journey, wishes to engage with the company, there's an option to convert that digital journey to a assisted journey. The third thing that you also have is that today we have a option for customers to even take our loans through e-commerce sites, which again is a fully digital journey.

Distribution expansion is a function of the physical presence, distribution presence which is unassisted journeys, and digital presence which is again unassisted journeys. Today, a dealer can log in a file on our behalf because we have given him a engagement layer, and then the customer's journey can start from there.

It does not require our person to be there. We will use all available methods to expand our distribution and continue to expand that.

I think physical offices, unless there's a certain size that we reach, we take a call on whether we need a physical office or not. As I said, I can have a salesperson working remotely and visiting our branch only once a month, because there's nothing that he really needs to do.

He doesn't pick up payments, he doesn't carry files anymore because it's all digitally transmitted.

Got it. Anything else you want to add, Jay?

No,

no, I think that's great. Thank you, Ramesh.

Also, just to follow up on that, maybe, Jay, if you have time, I don't know, or I can-- No,

I think we're running out of time, Renesh. We can pick up things offline as such, yeah?

Okay.

Sure, sir. Sure.

Thank you so much, sir.

Thank you.

Hello, sir. Thank you and congratulations on the good set of numbers.

Sir, my question is currently on repayments since the start of the war, how has the repayment been in the MSME clusters?

We haven't seen any major disruption, is the way I would put it. Something, Jay, we covered earlier also, that March has been fine for us, right?

At this point in time, I think too early to call out second, third, fourth order impact. We seem to obviously get some positive messages as well.

Let's hope the positive messages translate into positive outcomes. We at this point in time, based on what we are seeing on the ground, would really want to focus on growth and movement forward from here on.

Obviously, that growth complements with the fact that collections remain good.

Sir. Just one more question if I can squeeze in.

On your AI initiatives, it is just for reducing TAT and bringing in new customer or it is for reducing OpEx and reducing expected credit loss as well?

Look, technology initiatives cover all three outcomes, right? One is to reduce time it takes to deliver credit or time to process a loan or time to make a payment to our partners.

Second is improving quality and third is reducing cost, right? All three initiatives, there'll be projects that work on all three, there'll be projects that work on making sure that things work well.

For example, we use AI extensively in our cybersecurity. Now, that's really something that can't be done by human beings anymore, right?

You need technology to help us do that. For example, we have branches which are monitored on a real-time basis.

There could be thousands of CCTV cameras that we have in our branches. Can it be monitored?

Can't be done by human beings, you enable AI to monitor so that a human being only looks at exceptions, right? As I said, one of our core principles is to deliver credit across the country in a uniform manner, whether the customer is in a Tier 4 town, a village, or a metro, now that gets delivered through technology, right?

That consistency in service. Depending on the use case, it could be any of the three, or a combination of all three, or all three at the same time.

Yep. Thank you.

Sir. Thank you, sir.

Sir, one more question from Mr. Manish--

Jay, we're running out of time,

so

that's okay, we can take things offline.

Thank you, sir. Thank you.

Thank you, Rutuja. Thank you very much everybody for your time.

We're quite excited for the quarters ahead, and the performance for Q4 has laid the right foundation on growth and profitability to be achieved over our medium-term goals. Thank you very much, and have a great evening.

Thank you.