Thank you, Aleric. Good evening, ladies and gentlemen, and welcome to Home First Finance Company's earnings conference call to discuss the financial results for the quarter ended June 30th, 2026.

We hope you have had the chance to review our investor presentation and press release, both of which are available on our website and the stock exchanges. As per our practice, we have also uploaded an Excel factsheet containing historical data on our website for your easy reference.

From the management, we have with us today Mr. Manoj Viswanathan, MD and CEO, and Ms.

Nutan Gaba Patwari, CFO. With that, I now invite Mr.

Viswanathan to share his insights on overall performance and outlook. Over to you, sir.

Thank you, Sunil. Good evening, everyone, and thank you for joining us.

We have begun FY27 on a strong note, with healthy growth in disbursements and assets under management, robust earnings growth, stable asset quality, and continued investment in our distribution and technology capabilities. I'll start with the business and financial performance.

AUM stood at ₹16,938 crores as of June '26, growing 25.7% year-on-year and 6.7% sequentially. Disbursement at ₹1,628 crores is up 31% year-on-year and 3.6% sequentially.

Profit after tax increased by 7% sequentially and 34.5% year-on-year to ₹160 crores, supported by 38.2% growth in net interest income. Return on assets improved by 10 basis points sequentially to 4.2%, while ROE improved by 50 basis points to 14.5%.

With respect to distribution, people, and portfolio mix, during the quarter, we added 4 branches, 1 each in Gujarat, AP, Tamil Nadu, and Madhya Pradesh, taking our network to 175 branches and 373 touchpoints. We made a net addition of 133 employees, largely in customer-facing roles, taking the total headcount to 1,988.

Our origination yield remained healthy at 13%. Individual housing loans continue to account for 83% of the portfolio, underscoring the granular and secure nature of our core franchise.

Asset quality remained stable during the quarter. Our 1+ DPD remained flat at 4.7%, 30+ DPD remained flat at 3.2%, and gross Stage 3 remained flat at 1.8%.

The branch network continued to deliver strong performance during the quarter. Maharashtra, Gujarat, and MP remained our largest markets, leading overall business contribution, while maintaining healthy growth and portfolio quality.

In TN, a strengthened team is building growth momentum while maintaining stable asset quality. Rajasthan, UP, and southern states gained further traction, reflecting encouraging business momentum.

The remaining markets continue to deliver consistent AUM expansion with stable asset quality. Overall, the network remains well-positioned to sustain profitable growth while preserving portfolio quality.

Technology remains one of Home First's key differentiators, central to how we source, underwrite, service, and scale the business. Our digital DNA, built consistently since inception, has created a strong foundation for accelerated AI adoption across the value chain.

The same digital-first approach has given us clean, structured data going back to day one, the high-quality training ground that modern AI systems demand. Our AI strategy is anchored on three outcomes: elevating customer experience, enhancing employee productivity, and driving structural cost efficiencies.

In line with this, we have operationalized Q, our in-house AI-orchestrated omnichannel customer communications platform. We have also deployed in production a bureau analyzer and a contextual bank statement analysis model, which have improved underwriting efficiency and reduced turnaround.

AI-led interventions in lead qualification, legal and technical valuation, income analysis are currently in pilot and will progressively move to production as we scale our intelligent underwriting stack. Under our green homes initiative, we have certified a further 100 homes during the quarter, taking the cumulative number of certified homes to 550 as of June 2026.

The affordable housing opportunity remains compelling. Demand across our markets is healthy, and our growth is supported by disciplined underwriting, a granular portfolio, stable asset quality, and scalable operating platform.

We remain confident of delivering 25% AUM growth while maintaining a focus on profitability, portfolio quality, and operating efficiency. As disclosed to the stock exchanges, Nutan will step down from her executive responsibilities effective from August 31st, 2026.

Over the past 8 years, Nutan has played an integral role in Home First's evolution from a growth-stage affordable housing finance company to a scaled publicly listed institution. Her contribution has helped strengthen our financial architecture, governance standards, capital position, and organizational capabilities.

On behalf of the board, the management team, and everyone at Home First, I would like to place on record our sincere appreciation for her leadership, commitment, and contribution to the company. The board is evaluating candidates and will conclude the CFO appointment soon.

With that, I will now hand over to Nutan to take you through the financial performance for the quarter. Over to you, Nutan.

Thank you, Manoj, for the kind words. As always, let me now go through the financial performance for the quarter.

With respect to income, yields, and margin, total income for the quarter was ₹540 crores, up by 18.6% on a YoY basis and 7% QoQ basis. Portfolio yields ex-co-lending stood at 13.1%, while disbursement yields was at 13%.

This reflects continued pricing discipline and quality of new customer acquisition. On the liability side, proactive management of our borrowing mix led to a further 10 basis points sequential reduction, bringing cost of borrowing down to 7.8%.

Incremental borrowing cost during the quarter remained favorable at 7.6%. Consequently, spread, excluding co-lending, remained healthy at 5.3%.

Net interest margin was 6%, up from 5.9% in the previous quarter. Coming to operating efficiency and profitability, cost to income was at 32.7%, an increase of 70 basis points sequentially.

The marginal increase in opex is owing to increments and fresh hiring, supported by slight reduction on account of lower administrative expenses. Reported operating cost to assets was 2.8%.

As we continue to invest for growth, we expect this ratio to broadly remain range-bound within 2.6%-2.7%. Pre-provision operating profit was ₹224 crores, up 32.9% year-on-year.

The growth in pre-provision profit demonstrates the operating leverage in the franchise as the balance sheet scales. Profit after tax increased to ₹160 crores, up by 34.5% year-on-year and 7% sequentially.

Return on assets was 4.2% and return on equity of 14.5%. Moving to provisions and asset quality, credit cost for quarter one was 40 basis points.

Provision coverage on Stage 3 assets was 23.4% as of June '26 compared to 23.9% in quarter four. We continue to maintain management overlays over and above expected credit loss requirements.

Including these overlays, total provision coverage was 45.3% as of June, providing prudent balance sheet protection. Regarding borrowings and funding profile, our funding profile continues to be diversified and cost-effective.

As of June '26, 57% of the funding was from private and public banks, 14% from NHB, 21% from assignment and co-lending. The balance from NCDs, ECB, and NBFC.

During this quarter, we executed direct assignment transactions of ₹285 crores, co-lending disbursements of ₹46 crores, taking co-lending book to ₹617 crores, 3.6% of the AUM. We remain focused on scaling this channel by strengthening the enabling infrastructure.

Co-lending broadens our customer reach and supports capital-efficient growth and productivity. Coming to capital adequacy and liquidity, as of June '26, our capital adequacy ratio was 42.6%, with Tier 1 at 42.2%.

This compares with total capital adequacy of 44.1% and Tier 1 of 43.8% as of March '26. Net worth stood at ₹4,483 crores, and book value share was ₹429 as of June 2026.

With a strong capital position, a diversified funding franchise, and a scalable operating platform, we believe Home First is well-positioned to sustain profitable growth and create long-term value for all stakeholders. This concludes our opening remarks.

We will be now happy to take your questions.

Thanks for taking the question. Firstly, encouragingly, if we look at it, this quarter, the growth has been primarily led by home loans.

That's growing at almost 7-odd percent quarter-on-quarter vis-à-vis LAP that would have grown at 5-odd percent. Even in terms of the disbursements, have we seen the shift more towards the home loan?

Just the related question, if we look at it in terms of the ticket sizes, that proportion has been rising, maybe almost, say, more than 320-odd basis points over last two quarters. Is it more on the home loan side or this is more on the LAP side?

Yes, origination of home loans has been higher, and disbursements has also been higher. Yes, there has been a slight shift towards more home loans in this quarter.

Ticket size is also, it's largely to do with home loans only. LAP has not been a very strong focus area for the company in any case.

We are very focused on originating housing. LAP ticket sizes remain the same.

Housing loan ticket sizes have moved up marginally.

In terms of disbursements, if we look at it, say, 31% year-on-year, 3.6% quarter-on-quarter, how much would be home loan within this in terms of the growth?

Primarily made up by home loans only, because, as you can see, the LAP growth has been lower than home loans. This largely is coming from the home loan only.

Okay. Got it.

Second question on the employee side, we would have added, say, almost 10-odd branches over last two quarters. Employee count is still going up by almost more than 280-odd or so.

Obviously, there would be some branch-related, but then maybe any of the, I would say, the operating centers wherein we have staffed the higher number of employees either on the collection side, underwriting side, if you can just highlight that, yeah?

See, in our case, the structure of the branch is basically there is a branch manager and the relationship managers. They carry both sales as well as collection responsibility.

There is no specific function as such. The number of people whom we have added, mostly about 130 people we have added in the last quarter, largely they will be in the branch function only.

Origination as well as collections, both.

Okay. More to see to it in terms of maybe the few branches which will get added if we have recruited some people, maybe estimating that there will be new branch additions also which will happen.

Is it more of a front-loading of the employee at the branches?

Not entirely, Kunal. If you were to look at the data on the basis of two quarters that you talked about, we've added 10 branches, and we have added 280 people.

One, employee per branch in quarter three was 10, and employee per branch last quarter was 11. One new employee per branch is itself 165, and then we've added four branches, so that takes it to 44 people.

Just the sheer addition at one person per branch and four new branches itself is about 200 people.

In fact, at every branch, we would have added one more guy, be it on the RM. On an average.

Got it. Perfect.

That answers the question, yeah.

Hi. Congrats on a good set of numbers.

Sir, just first thing on the spread side, right? Incremental spread is now running at 5.4%, largely driven by lower cost of fund at 7.6%.

Just wanted to understand how do you see the incremental spread moving, going ahead? In a sense, whether this 7.6% incremental cost of fund is sustainable or is there any one-off in this quarter's?

No, there is no one-off. See, the cost of borrowing has come down to some extent in the last couple of quarters.

We run a fully floating rate book. If there is any increase in cost of borrowing, we will increase the pricing accordingly.

See, we are committed to maintaining that 5% to 5.20%, 5.25% basis points spread. Depending on how the cost of borrowing moves, we will move the rate to the customers as well.

Do you expect PLR cut in maybe next couple of months?

PLR cut.

PLR cut is unlikely, I think, at this point, because the whole West Asia crisis, etc., is still uncertain. I don't think there will be a cut.

At least, that's not our expectation.

Got it. In that sense, then the book spread ideally should converge towards incremental spread, right?

Then the improving trajectory should continue if we are not intend to cut PLR. Is that the right understanding, or am I missing something here?

Renish, just to add, you talked about one-off first. When you look at the marginal cost of borrowing at 7.60%, it is not a one-off, because we've not taken any NHB drawdown.

If you see our NHB draw outstanding was ₹354 crores at the end of March, it's ₹354 crores at the end of June also. We actually plan to take that drawdown in Q2.

There is no one-off in that. However, there has been, of course, the market has moved a lot on the borrowing side, and we will need to keep track of this.

Over time, on a book basis, the right way to look at is the spreads will remain range-bound between 5% to 5.25%, which is our long-term guided number.

Between 5% to 5.25% is what you've been always guiding. Got it.

In a sense then, this spreads are not sustainable.

5.40% is incremental. Even today, the book spread is 5.30%, and a long-term guidance has always been 5% to 5.25%.

The question of sustainable is a bit unfair.

Got it. Okay.

Got it. My second question is on the BT-out rate, right?

So 4.5% in Q1, of course, is lowest in past many quarters. How one should read this data point?

Is this just a one-quarter phenomenon, or do you see a sort of competition is rationalizing their disbursement plan, and also not trying to gain market share at the cost of spread? How does one should look at this BT-out rate?

See, BT-out, as we have been talking about it for the last few quarters, we have actually put in place a set of internal, processes to control the BT-out. Right from branch manager meeting up the meeting up with the customers who want to do BT-out, pitching a top-up to them, and things like that.

There is a protocol and, waterfall of activities that we carry out with each customer, and that has started giving us good results. Whether it will sustain at 4.5%, difficult to say.

Of course, it has been an extraordinarily good quarter in that sense. We should we should be able to control it, in that 5-ish 5% to 6% kind of a range.

Because

this has been the first quarter where we have actually brought it below 5%, difficult to say whether that will sustain. Definitely, we should be able to, we've got traction on this process, we should be able to kind of control it in that 5-ish 5-ish range.

Got it. Nothing to read from an industry landscape perspective.

These are all internal initiatives which is helping us.

Competitive intensity remains the same in terms of BT-out, the interest in taking out BT-outs, etc.

Got it, got it, got it. No, this is very helpful, sir.

Thank you, and best of luck. Thank you.

Thank you.

Thank you.

Hi. Thanks for the opportunity.

Sir, my first question is as ticket size increases, the share of more than 25 lakh ticket size has increased from 14% to 18% now over last 1 year. How do you see sustainability of spreads and ROA from a medium-term perspective?

That is first question. Second is what is the guidance for opex to AUM for the full year?

Because this quarter, I think, on a YoY basis, we have not seen material improvement in cost ratios. What is the guidance for full year?

Third question is the co-lending momentum has been weak. What are the reasons for that, and how do you see in coming quarters about co-lending disbursements?

Yes, thanks, Nidhesh. See, on the first question regarding ticket size increase and spreads, what we have been always saying is that the customer segment that we are addressing remains the same.

It's just that incomes are going up and aspirations are going up. As a result, the ticket sizes are going up.

We don't expect too much of a spread compression because of increase in ticket sizes, because at the end of the day, we're addressing the same customer. If we see our ticket-size-wise spread distribution, we don't see too much of a difference between, say, a 25-plus versus a less than 25.

That is point number one. We are committed to maintaining the spreads, the 5% spreads on an overall blended basis.

Second is on the opex to assets. Yes, this quarter, there was a slight uptick, but again, there we should expect year-on-year 5 to 10 basis points reduction.

I think full-year guidance would be in the region of 2.6% to 2.7%. On co-lending, again, I think first quarter, because of change in process and change in the policies of co-lending, there were certain hiccups.

I think those are getting addressed gradually. We are seeing more and more partner banks now aligned to the process, and I think those numbers should stabilize going forward.

Sure. The last question is what is the count of active connectors for quarter one?

Around 4,100. Just a moment.

4,200.

4,187.

Around 4,200.

4,200, okay. Thank you, sir.

That's it from my side.

Hi. Good afternoon.

Congrats on good numbers. Just wanted to understand this disbursement growth and momentum in the last couple of quarters.

When I see even Y-o-Y number, the growth is very good. You just said that it's coming largely from home loan, and we are also moving towards higher ticket sizes.

Is there a volume versus value split available? Is it purely driven by value migration towards higher ticket sizes?

The average ticket size of disbursement going up is driving this disbursement growth, or is there also volume-led improvement, which is your productivity improvement on a per RO basis?

Not a productivity improvement, but there is obviously increase in units as well. I would put it at around 50-50.

50% of the growth is coming from increase in units, and 50% is coming from ticket size.

Okay. We are seeing that execution on the ground, in terms of volume productivity per month per branch officer, or per branch, or per loan officer, that is improving, right, for us?

Marginally, yes. Marginally improving.

Okay.

When I look at your origination spread, despite we shifting segments incrementally every quarter by quarter, your origination yield is actually stable. How should we understand the competitive environment from a yield pressure point of view?

Because the way we are moving towards slightly higher ticket size, generally a marginal compression should have been expected, but it's pretty much holding on.

That all goes back to the fact that we are addressing the same segment. Customers are facing the same challenges in terms of being unable to get loans from larger lenders, etc.

They're willing to pay that premium that we charge. Which is why there is no major compression in the spreads or in the yield.

Marginal compression, yes, over time there would be marginal compression, because these are customers who are buying larger properties. For them interest rate is important for them.

That is something which is more longer-term and which can be addressed through improvement on the opex side. That is why maybe over a longer period of time, we'll see a marginal reduction in yields, but that can be compensated on the opex side.

The last question is on collections. When I look at your collections also in this quarter, in terms of flow rates, they have completely normalized, and they are pretty strong across all buckets.

While there is a lot of effort to improve productivity and to grow disbursements, and since your relationship officers share the responsibility of business as well as collection, while the business is improving, your collection is also improving. Your bounces are pretty much similar in terms of bounce rates.

Is this a lot of auto cure happening in the collections among customers, or is there a separate effort being put to ensure that the bucket collections becomes better and the flows are reduced? No,

bounce rates have marginally improved over the last two quarters, as you can see. As far as collection is concerned, yes, quarter one generally is a definitely difficult quarter, and we have generally seen in the past a small uptick in the delinquencies.

This year, yes, it was stable, or it actually improved in some of the buckets. I think it just goes back to more data-driven collections, because now we have a wealth of data on customers.

We are able to also use some AI interventions, some automated calling and things like that, which also eases up the work for the relationship managers, because, as you mentioned, they are carrying the load of both sales and collections. Some part of the collections, which are little softer collections, etc., we are able to do through automation to ease the load.

I think all these factors have contributed to this good quarter.

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

Good evening, sir, and thank you for giving me a chance to ask questions. Just wanted to understand the movement of your net interest margins and spread in coming quarters, because of late, we have seen many of the banks increasing their MCLR rates.

With the tight liquidity in the system, what could be the movement of your NIMs and spreads going ahead in coming quarters? Should we see some compression, a 5 or 10 basis points, as one of your peer has highlighted the same?

No, so, see, we are running a fully floating rate book. If there are changes in borrowing cost, we will be able to pass it on to the customers.

To the extent that we've got an improvement in cost of borrowing, we have passed on some of that to the customers, which is why you're seeing a small reduction in our yield if you see over the last two quarters. It is all back-to-back, based on our cost of borrowing.

We are committed to maintaining the yield of about 5% to 5.25%. Based on rate movement, we will convey the same thing to the customers.

Thank you, sir. Thank you.

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

My question was on the credit bureau score of our customers. If you look at that score over the last 3 years has increased from 730 7 738 to almost 750 levels.

Consequently, we've seen, let's say, aspects like credit history, NTC, average ticket size also moving up in the direction, let's say, credit history is almost 88% of the customers having credit history now versus 74% during three prior to 3 years. New-to-credit customer is merely 12% now versus 26%.

It indicates that we're moving in a direction wherein the credit bureau score of our customers is only going up, or at least we are picking up those customers wherein the credit bureau score is relatively better. Incrementally, how do you see this moving?

Will we stabilize here and target this customer segment only, or will we continue to move up the bureau score? Because in that situation, while we have been able to control our BT-out, with better credit bureau scores of our customers, they become easy prey to better cost-of-fund players also, right?

Just from that standpoint, wanted to understand the strategy on this front.

See, on the bureau scores, new-to-credit customers, the numbers are diminishing every quarter. That is more of a market phenomenon, because more customers are getting access to credit.

Even with small loans like consumer loans and two-wheeler loans, they end up getting a bureau score. By the time they are ready for a housing loan, they already have a bureau score.

That number keeps diminishing every quarter, and eventually, probably we'll have very very very few customers in the country who are first-time borrowers in that sense. As far as the improvement in scores are concerned, the 738 moving to 750, etc., obviously, as a company, we would want to keep improving the profile of our customers.

The philosophy or ideology is that, yes, we should keep moving up the curve as far as credit quality is concerned, but without sacrificing the yields and spreads. Which is why if you see, we are not really sacrificed the spreads.

We have been maintaining the committed spreads of 5% to 5.25%. In fact, we are slightly higher than that.

The idea is to mine the data in such a way and do analytics in such a way, and capture customers in such a way that we are able to maintain the spreads, but at the same time, gradually improve the credit profile of the customer. That is the philosophy.

Got it. Sir, the second question was on the employee efficiency aspect.

While the ticket sizes have gone up, at the RM level, the KRAs include the number of files also that they originate and get sanctioned, or is it purely on the, let's say, the amount that gets disbursed at the RM level?

At RM level, there are both factors in the KRA: the number of transactions that they are doing, number of loans that they're originating, plus the value, total value of disbursements they're doing. Both aspects are there in the KRA.

Got it. Sir, could you give some color on that, has that moved up over the last 3 years?

Not really. It is fairly stable.

We have not managed to improve that too much. If you see at an employee level, which we track at an employee level, it is around ₹3.5 crores ₹3.5 crores per year at an overall employee level.

At a sales employee level, that number would be probably more like ₹5 crores, ₹5 to ₹5.5 crores a year.

Got it, sir. Got it.

All right, sir. Thank you so much for answering my questions.

Good luck for the next quarter.

Hi, sir. The first question was, you mentioned that for the higher ticket size customer segment, they are facing challenges to get loans from other lenders, and that's where, let's say, Home First is coming in.

What would be those, given that let's say CIBIL score is also good, and given that the ticket size they are also targeting is higher, I'm guessing more formal income. What are the challenges that let's say these guys are facing, and does it lead to a situation that let's say 1 or 2 year down the line that they are ripe for a BT-out to be targeted by a bigger lender, because now there is a repayment track?

No, just to explain that a little better, if you were to, let us say go back to when we started the business, that threshold level of what was called as higher ticket size used to be 15 lakhs, right? Less than 15 lakhs was seen as the sweet spot for lenders like us, affordable housing lenders.

Gradually, at that point, the banks were offering loans for customers above 15 lakhs. If we were to access a customer in that ticket size, then, yes, this question would come up that he's a bank customer, how are you able to lend to them, etc.

Slowly that threshold has moved up, is what we are trying to convey. It reached 25 lakhs at some point, and now it is going further up.

Banks have also raised their threshold for lending to customers, they are more interested in customers who are maybe 50 lakhs-plus, 75 lakhs-plus, because there are enough numbers of them, and that portfolio is also growing. We have access to a lot of customers within that 25 to 40 to 50 lakh range who are struggling to get loans from the bank because of various factors.

The same factors that existed for customers below 15 lakhs 10 years ago. For example, let's say fragmented salary slips, or salary slip is not being issued, or let's say the person has misplaced his Form 16, salary credit in the bank is there, but documentation is not there, or one person is formally employed in the family, but the other people are not formally employed.

Combination of things, there are maybe 20, 30, 40, 50 combinations which could be there, which make them ineligible in a bank, or not even ineligible, it makes it more difficult for them to get a loan from a bank. They'll have to go frequently, they'll have to spend more time trying to get the loan, whereas we are able to provide it more seamlessly and in a more convenient way for the same customer.

Got it. Understood.

The second question was that the CIBIL score that we have mentioned in our deck, is it at the origination time or is of the AUM? Because after the home loan anyways CIBIL score will go up, so.

It's origination time. This is at the time of origination.

Got it. The last question would be the NPA for home loans and LAP, if you can separately mention?

NPA for home loans and LAP are broadly in the same range. It's not very different.

Our LAP portfolio is fairly small. It's about 13%, 13%-14% of the portfolio.

Broadly, it's in the same band only.

Understood. Sorry, just one last question.

How much of our borrowings are, let's say, floating rate-linked or they are completely floating rate-linked? You

on the borrowing side?

Borrowing side.

Except for a particular scheme of NHB where the loan is fixed for 7 years, the rest of the portfolio is all floating.

Got it. Understood.

Understood. Thank you.

That's all.

Hi, am I audible? Hello?

Hi, am I audible?

Yes, yes, please go ahead.

Hi. Congrats on a decent set of numbers.

I just had one question regarding the LTV. I've seen that the loans which have the LTV of above 80% are increasing as a percentage of your total gross loan portfolio.

Can you just give us some insights as to why this has happened, that would be very helpful?

See, 80%, this 80%-plus portfolio is generally the portfolio originated from, in the apartment segment. We are getting more traction in, places like Bombay, Pune, and, larger cities across Gujarat and Maharashtra where this portfolio is increasing slightly.

As a result of which you are seeing that seeing the LTV go up at the at the time of origination.

Let's move to the next question.

Yeah.

Sir. Sir, it is a very fantastic result, I can say you.

My point is 1+ DPD is 4.7%, 30+ DPD is 3.2%. Please devise any mode, this percentage fall below 2%, our GNPA and NPA fall drastically.

This is my point.

Sir, this is the number, 4.7%, 3.2%, this is a number that has been following a certain trend over the years. This is based on the kind of customers that we are onboarding, our underwriting process, collection process.

It basically follows a certain trend. It would not be possible for us to dramatically reduce that.

If we have to dramatically reduce the 1+ and 30+, then we have to either change the customer segment or our underwriting methodology. That's the only way we can change those numbers very very dramatically.

We can't change that, I know, because the margin, interest margin will come drastically, right.

Thank you,

thank you, sir. Thank you.

Thank you, sir.

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

My question is on the stress which was earlier there in few pockets, in Surat, Tirupur, right, like from the segments which were affected because of global prices. As the war is kind of still on, right, just want to understand qualitatively if the stress is kind of now you see lesser stress from those pockets, or do you still see some stress in the books, from specifically from those pockets?

I think some of the stress build-up was because of the tariffs, which is actually now been addressed. Post the start of the war, we have not really seen any stress build-up, and so we are not seeing even today, we are not seeing any impact of the war on collections.

The tariff impact has died down by now. Some of those pockets which were affected by tariffs, like Tirupur, etc., they are kind of on an improvement mode at this point.

Got it. Got it, sir.

Sir, I think, let's say given that you're saying that stress should ideally it's lower than what it was couple of months back. What would you guide towards, let's say, the DPD 30+ or GNPA as of FY27, given that these things would be behind?

Broadly, we should be, see, the first quarter is a important barometer. Generally, what happens is first quarter there is an uptick in the delinquencies, and then it takes a couple of quarters to kind of bring it back to the same March figures.

This time, the first quarter has been excellent in terms of collections. Hopefully, that trend should continue, and we should be able to keep these numbers stable across quarters.

Got it. Got it.

Very interesting. Sir, on the bit of BT-outs, right, the 4.5% number is very interesting, right?

As you've already guided that it would be in the 5-ish range, right? Given that the difference is kind of large, right?

Do we also see of circumstance where this could be in the 4-ish range? Qualitative question.

If things really go well, yes, it could go down, but unless we see this trend for two, three quarters, I would not commit to that number. As of now, we are hoping for a 5% kind of a number.

Yes, if we are able let's say all the processes that we have put in place, they continue to become pretty successful, then, yes, we can look forward to lower numbers.

Got it. Sir, just very quick follow-up question on this one only.

All the efforts or the processes, internal processes, which you mentioned in the call itself previously, when did you start applying those processes? Was it this quarter, the previous quarter, when exactly?

Because it's Couple of quarters back. I think we first mentioned it about maybe 5 to 6 quarters ago.

Got it. It has been an ongoing process.

Okay. Got it.

Got it. Thank you, sir.

Thank you for the opportunity. Very good set of numbers.

Sir, firstly a quick data point, what is our sanction ratio, login to sanction ratio? Not able to hear you.

Am I audible now?

You were saying that there was a good volume growth and value growth in this quarter for the 31 31% disbursement growth. What was the number of files growth that you saw in this quarter and the sanction ratio for this quarter?

What is the first question? I didn't get it.

Can you repeat your question, Vijay?

What is the sanction ratio for this quarter, the login to sanction ratio? Also, what was the volume growth, the so if we disbursed like 100 files in last quarter, last quarter Q1, then what was the percentage growth in Q1 now?

Percentage growth of volume of files.

Sure.

Login to sanction generally follows a very regular trend. Depending on the channel, on overall basis, login to sanction is around 40%.

60% of the cases get declined. That is a very similar trend across quarters.

As far as originations are concerned, we would have seen about 10% to 15% growth. That's why I said out of 30% growth, about 50% would have come from origination growth and 50% from value growth.

Okay. Sir, with respect to our geographical growth, what I'm seeing in the trend is Madhya Pradesh has grown very fast, while Tamil Nadu, which was a good state, that has kind of gone down.

What is the reason behind this? Are we losing out market share in Tamil Nadu?

Is there a problem in that state? What are we doing good in Madhya Pradesh that we have grown so much?

Book has almost 4xed in 2 years.

Some of the challenges related to the tariffs, etc., we were facing in Tamil Nadu, plus we also had some team-related problems. Those things are behind us now, and we should start expecting good growth momentum in Tamil Nadu also.

In MP, we were successful in building a good team, and so that helped contribute to the growth momentum. Because year to year, certain states do well and certain states have certain struggles or hiccups.

That is all about it.

Thank you.

Two follow-up questions. If I look at a deck, the number of districts served in Tamil Nadu reduced from 25 to 24.

Now given that, let's say, exiting a home loan which has been given for a long tenure is not easy, what led to this, and how should we think about this one district that we have exited, that no origination, I'm assuming, but how do we figure out the servicing part and collection part?

Servicing collection, see, typically there will be 100 or 200 accounts in a district. See, also what happens is sometimes a particular branch falls in a certain district, but it would be closer to a branch from a different district.

We then would decide to service it from that branch. That's all.

Got it. What led to exit in this district, like high NPAs or saturation or?

It could be the,

see, we monitor the portfolio from an early stage, so, the first if the first 100 loans don't show us the show us the correct trend, then we kind of put a, let's say, you can say, put the brakes at that point of time till we understand the situation better.

Understood. The second question was our average ticket size is increasing.

Is the target, let's say, what we expect from the relationship managers also increasing, or that is remaining at a similar level? The underlying question being that if the targets are similar and the ticket size is increasing, then the loans approved or sourced at employee level will reduce mathematically.

Is it a rejection ratio that is why let's say lesser loans per employees, or top of the funnel itself is getting selective?

Their KRAs include both number of transactions as well as value. Of course, the expectation is that the productivity should increase.

The origination per relationship manager increases. That's a more gradual process.

It also depends upon number of new versus old relationship managers, attrition rates, etc. You may not be able to see that at an overall level, because it depends upon the mix of relationship managers as well, because older relationship managers have a higher target, etc.

Yes, the expectation is, of course, that the overall productivity per relationship manager should go up through this if there's a ticket size increase.

Productivity, you are mentioning from AUM or number of loans?

All of them. Because they are also responsible for collections.

The total AUM per employee, AUM per branch, disbursement per branch, disbursement per employee, all of them.

Got it. Maybe just a different way of asking, of higher ticket size, how does the approval rates differ?

Approval and then final approval to disbursement.

When we say higher ticket size, it's only a very gradual migration. We are talking about we were always doing ticket sizes of 2 ₹25 lakhs-plus.

The ratio has gone up, that's all. If you see maybe 2 years or 3 years back, the 25 lakh-plus used to be about 12% to 12% of the portfolio.

Now it's 18% of the portfolio. It's a very gradual movement of ticket size.

The origination process or the approval rate, etc., remain largely the same.

Got it. Understood.

That's it from my side. Thank you, and all the best.

Thank you.

Yes, sure. Thank you.

I had another question. Actually, sir, from an analyst perspective, I think we read every other peer, high-quality peer also in the space.

See that Home First specifically, we take a lot of pride in being tech-first, kind of tech leaders, right? Relatively just want to understand what key metrics or things, as an analyst, should we see that differentiates us from other high-quality peers on the tech front?

Would it be the loan aggregation percentage or some specific number which we can anchor to, to understand how substantively we are leading on the tech front?

Ultimately, the deployment of tech will be for improving the customer experience, which is basically turnaround times, it will be for efficiencies, so that is basically improvement in cost, and improvement in quality, which is basically the delinquencies. At a very very high level, these would be the three metrics to track: so opex, delinquencies, and customer experience.

It would be too early to kind of attribute improvements to AI or tech. It will be a more gradual improvement.

If you see our metrics, on the cost side, they already reflect our high-tech approach. We run a fairly efficient operation with a low cost compared to our peers or compared to the industry.

Over a longer period, you will see those trends emerge on all these three aspects.

Sir, actually I've actually been tracking these three elements which you mentioned, right, of course, not the customer experience, but I think NPS in the presentation is what you've mentioned for the customer experience bit, which usually others don't share, right? On the other fronts, agree that opex to AUM is the lower for us, not all others have.

Are there more qualitative aspects also which we as an analyst can kind of anchor ourselves to, to understand if we are tech leaders, or doing better on tech relatively?

The other metrics are, for example, the disbursement per branch. The ability to disburse a higher amount per branch or per employee, or the ability to manage a larger AUM per employee or per branch, is also again can be attributed to tech.

We'll have to think through specific metrics which can be directly attributable to the deployment of technology. Off the bat, I can think of some of these metrics.

Okay. Got it.

I think NPS is the metric, right, for the customer experience if we had to track one metric? How fulfilled or satisfied the customer are, the NPS which you mentioned at 79 for this quarter, that's the right metric to look, right?

The customer experience is one of the metrics. NPS, that's a more quantifiable metric.

Then in terms of overall customer experience, it's something that you can probably through branch visits or customer visits also, you can find out.

Got it. Do we internally also benchmark the same number for other peers also?

Just from a, let's say, market understanding perspective, just to be on top, is that something we do?

On the customer experience, it's not very quantifiable. It is more anecdotal.

We keep understanding from the market what is the turnaround time in the market and what is the customer experience, etc. That is more anecdotal.

There is nothing which is quantifiable in that sense.

Got it. Sir.

That's helpful. Thank you.

Hello. Thank you for the follow-up.

Sir, my question was I calculated the repayment rate. It is coming at 14.3%, and it is lower than last year.

Average for last year was around 16%. Where do you think the repayment rate, overall run-down will be?

Because BT-out was also lower. What will be the trend for run-down rate?

This number, it's not difficult to predict. Broadly, we take a 16% to 17% repayment rate.

If we have an exceptionally good quarter in terms of BT-out, then the number will come down, as you're seeing in this particular quarter. Otherwise, we generally assume a 16% to 17% in our calculations.

You are not seeing any as such different behavior in prepayment from customer, like customer making more prepayment or lower prepayment or anything of that sort?

There is no behavioral change in that sense.

Okay. One last one.

The way we have seen good growth in Madhya Pradesh, which other state will you be targeting for faster growth? Because I think you were mentioning you are seeing good growth in Rajasthan.

Is that the next state that we are going to target for fast growth? Which specific state are we looking?

Because other states' contribution who are below Madhya Pradesh is single-digit, like Telangana is 8%, and Rajasthan is almost 7%. Which specific states are we going to target for faster growth in the coming quarters or year or long term?

I can give you a more longer-term view. The states that we are targeting for more aggressive growth would be eventually UP, because that's a large state.

Rajasthan, we are already well-penetrated, which is why I'm not mentioning Rajasthan. UP is a state where we have still a lot of potential to penetrate.

That will be one of the states to look out for in the medium term. Medium term in the sense next 1 to 3 years.

Similarly, the southern states, which are Tamil Nadu, Andhra, Telangana, these three states, we will be targeting these states for better growth in the coming years.

UP, TL, AP, and TN is what you are saying. UP is highest potential.

That's right.

Thank you.

Thank you, everyone, for joining us today and for your continued interest in Home First. We hope we have addressed all your questions.

For any further queries, please reach out to Sunil Anjana or write to us on [email protected]. Thank you, and have a good evening.