Thank you, Bharat. Good day everyone and welcome to the earnings call of LIC Housing Finance.

From the management team we have Mr. Tribhuwan Adhikari, MD and CEO; Mr.

Sandeep Kumar, COO; and Mr. Lokesh Mundhra, CFO.

I would request Mr. Adhikari to share his opening remarks, post which we will open the floor for Q&A.

Over to you, sir. Yeah.

Thank you, Praveen. A very good morning and welcome to all of you to the post-earnings conference call of LIC Housing Finance Limited.

As you are aware, LIC HFL declared its Q1 FY 2027 results yesterday. Before discussing our financial and operating performance, let me briefly touch upon the evolving macroeconomic environment.

The global macroeconomic environment continues to remain uncertain due to heightened geopolitical tensions, particularly the renewed escalation of the US-Iran conflict, which has led to volatility in crude prices and global financial markets. While major central banks continue to adopt a cautious policy stance, the Indian economy remains resilient, supported by strong domestic demand, healthy government capital expenditure, and a robust financial sector.

Inflation remains broadly within the RBI's comfort zone, despite potential upside risks from higher crude oil prices, and India's GDP is expected to remain among the strongest globally. Against this backdrop, the market expectations currently indicate that the RBI is likely to maintain the repo rate at its present level over the near term.

While the recent geopolitical developments have introduced upside risks to inflation through higher crude oil prices, the RBI is expected to carefully balance inflation management with the need to support economic growth. A stable domestic interest rate environment should continue to support credit demand, particularly in the housing sector, while also benefiting funding costs and asset quality across the industry.

With that backdrop, let me now take you through our financial performance and key business highlights for the quarter. Total revenue from operations was ₹7,062 crore, as against ₹7,169 crore for the corresponding quarter of the previous year.

Outstanding loan portfolio stood at ₹3,22,098 crore as on 30th June 2026, against ₹3,09,587 crore as on 30th June 2025, reflecting a growth of 4%. Out of this, the individual home loan portfolio stood at ₹2,71,979 crore, as against ₹2,62,411 crore, up by 4%, and comprises 84% of the total portfolio.

Total disbursements for the quarter were ₹15,014 crore, as against ₹13,116 crore, up by 14.5%. Out of this, disbursements in the individual home loans were ₹12,119 crore, as against ₹11,247 crore, up by 8%, and non-housing individual loan segment were ₹1,975 crore, as against ₹1,647 crore, up by 20%, whereas project loans or the wholesale finance were at ₹872 crore, compared with ₹156 crore in Q1 of FY 2026, up by 459%.

Net interest income stood at ₹2,075.52 crore for Q1 of FY 2027, as against ₹2,064.71 crore for Q1 of FY 2026. Net interest margins for Q1 FY 2027 stood at 2.58%, as against 2.68% in Q1 of FY 2026.

Profit before tax for the quarter was ₹1,888.43 crore, as against ₹1,699.16 crore in Q1 of FY 2026, up by 11%. Profit after tax for the quarter stood at ₹1,488.32 crore, as against ₹1,359.92 crore for the same period in the previous year, up by 9.4%.

In terms of asset quality, Stage 3 exposure at default stood at 2.14% as on 30th June 2026, as against 2.62% as on 30th June 2025. Total provisions as on 30th June of current year stood at ₹4,398 crore, reflecting a provision covering of approximately 48%.

The company also conducted a sale of a stressed asset through ARC for a cash consideration of ₹140 crore during Q1 of FY 2027. On the funding side, our cost of funds stood at 7.28% as on 30th June 2026, as against 7.50% as on 30th June 2025, and 7.27% as on 31st March 2026, reflecting a reduction of 22 basis points Y-o-Y.

Our incremental cost of funds stood at 7.06% for Q1 of FY 2027, as compared to 6.86% for Q4 of FY 2026, and 6.97% for Q1 of FY 2026. Despite the elevated interest rate environment during the quarter, our cost of funds remains largely stable, reflecting the strength of our diversified borrowing profile, prudent liability management, and timely access to multiple funding sources.

With this brief introduction, I would like to invite you for your queries. Thank you.

Yeah. Hi.

Good morning, sir. Thanks for the opportunity.

A couple of questions. First, on overall growth and margin trajectory.

If we look back, the kind of a five-year data if presented, the growth and margin, both have not been coming the way you would have thought. If we look in the context of industry and particularly from your peers who are reasonably active into prime housing as well, they have done reasonably well.

Now going forward, what are you going to do different that gives you a kind of that belief that the growth and margin trajectory from here onward could at least alter or could be materially better than here, what has not worked for last nearly five-odd years? The second is on if I were to look at developer finance.

Of course, your exposure is very limited. Again there also, if you look back nearly four, five years, there was a reasonable, I would say, opportunity for many of the lenders, housing finance and NBFCs owing to HDFC getting merged into HDFC Bank.

A lot of your peers have kind of leveraged upon that opportunity. In this round at least, you seem to have missed that bus.

Now from here onwards, what kind of opportunity you see in that developer finance, particularly from the risk-adjusted return perspective, because the past track record for you in this segment is not so great? Thank you.

Avinash. A very good morning.

Yeah. I'll take your growth question first, the part related to growth.

Yes. You may be looking at the AUM growth of 4%, and that is why you say that growth has not been satisfactory.

If you look at our disbursement growth for quarter one, as I said, the disbursement growth is, as per our standards, pretty okay, 14.5% growth as compared to year-on-year, which we had in the beginning in the Q4 earnings call, I had given an indication or guidance that first quarter would be growing at 15%. More or less, our growth is in line with the guidance.

I think by growing at 15%, traditionally our growth has been what, sub-10. Right?

We do see some traction as far as growth in business is concerned in the quarter. Looking into Q2, of course, this is the first month, July.

We are still back on track. Q2 also, in fact, we are targeting a 15% growth in Q2.

I think as far as the disbursement front is concerned, I think we should do well this year. The guidance we have given of a 10% to 12% growth, we will be able to achieve that.

Yes, the book growth is going to be gradual. It is not going to happen overnight.

Because apart from the loans which get added up due to disbursements, there are a lot of exits also by way of maturities, by prepayments, part prepayments, full prepayments, and of course BT-out. In quarter one, our BT-out is at ₹3,000 crore approximately.

BT-in is about ₹1,500 crore. Net BT-out is about ₹1,500 crore.

I think this is okay. This is in line what we'll expect.

You will be witnessing a good disbursement growth this year. The book will grow gradually as disbursements grow.

Now coming to your margin call, yes, margins indications in the beginning of the year was 2.6% to 2.7%, provided everything remains okay, geopolitical, economics, etc., etc. We have ended the quarter at 2.58%, 2 basis points below the lower end of the guidance at 2.6%.

Anyway, this was expected because last year there were a lot of rate cuts in the overall book, as well as the new borrowing book which we had to introduce because of the rate cuts by RBI. In keeping in line with the reduction in repo rates of banks due to the rate cut.

Since we're competing largely with banks on the IHL, individual home loan front, we had to be competitive. That has to some extent impacted the margin.

Again, this year also like last year, it's going to be let me say a war, a tug-of-war between high growth and maintaining our margins. We would be of course looking to try and do both at the same time, grow our books through higher disbursements and more of retentions, and at the same time maintain our NIMs at the guided level of 2.6% by probably focusing on better borrowing cost.

We're also looking at a product diversification strategy which has been on for the past two years. It is gaining ground.

We are slowly trying to reduce our share of individual home loans, and probably get into the what we call the non-individual home loans, basically meaning the LAP and the LRD segment. There has been traction on that.

That book is growing, right? Also, yes, on the other front, this year we'll be looking at, as I said in the beginning of the year, inorganic growth through direct assignment and co-lending.

The policy is on the final stages. We should be, I think in Q2 we should be starting this direct assignment and co-lending business.

That would also give us some book growth, and we will be also looking at increasing our margins. That is about the margin part of it.

Developer finance book, yes, it is a small part of our book, not too much of thing. Yes, last year was a disappointing year from the developer finance perspective.

Throughout the year, we could do about ₹1,950 crore of disbursement in developer finance. This year, the start has been good.

First quarter, I think we have done about ₹850-odd, ₹872 crore of disbursement in the wholesale book or the developer finance book. Growth is very high at 450%, largely to do with the low base of last year.

Yes, we are interested in the developer finance book, but again, cautious, steady. The other part of it is we're also looking at margins from developer finance book, which is right now under extreme pressure.

The big builders, the very good builders, they are demanding prices sub-8, which we feel as a company that it is not in our interest to do developer finance at 8% or sub-8, right? We need margins from there.

We are looking at good-quality, Grade B builders. Till last year, we had this overhang of the developer companies or the builders being minimum-rated BBB or above.

This year, this is going to go, not yet gone completely, but this year this is going to go. We have a credit risk policy for developer finance which is almost ready.

It's going to the EC and the board in the coming month. I think that overhang will go.

That will help us get into slightly lower-rated builders. We need to be careful that yes, we choose the good ones with a good track record, so that again we do not get into the sort of kind of problems we had in the past.

Developer finance book should do well. We have set a modest target of about ₹4,000 crore for the current financial year.

Expectations are of course that we would probably be doing ₹7,000 crore to ₹8,000 crore in developer finance. I hope that answers all three parts of your question.

Avinash, again, I's Lokesh Mundhra, CFO. I supplement what our MD has said.

Though portfolio growth is 4%, but in absolute terms you'll find it is more than ₹12,500 crore plus. Being a largest housing finance company, definitely if you compare in a percentage terms, then definitely it will be less.

In absolute term, it's a very good very good growth. Secondly, in terms of my disbursement growth, 14% growth on year-on-year, so that is in line with our expectations.

Thanks. In developer finance that you are targeting, any sort of kind of a range of per project or per builder exposure, what kind of a typical ticket size that okay, you want to say that, okay, we'll not go beyond that ticket size or something of that sort in mind?

No. I don't think we have any ticket size in mind.

We are willing to consider all sorts of ticket sizes, right? Right from probably at the low end, small developers wanting small loans of ₹25 crore, ₹30 crore, right up to big developers asking us for ₹300 crore, ₹400 crore.

That also we are interested. I think what we'll be looking at in developer finance is the kind of rates which these borrowers are willing to give us, right?

Going to probably a Lodha or a Wadhwa or a Puravankara or a Shobha who's demanding sub-8, and I don't think that is what we are looking at. We are taking calls on probably not going for that just for the sake of building the book, because we want margins.

We want some margins in the developer finance book. Right now, we are lending at probably 10.5% in the developer finance book.

We would be wanting rates closer to that.

Got it. Very clear.

Thank you.

Yeah. Hi, good morning.

Thanks for the opportunity. I've got a few questions.

My first question is, sir, previously your philosophy was more on protecting margins at the cost of growth, and given your comments just now, is it fair to assume that the philosophy is now evolving to chase growth rather than margins? How should one think about that?

Okay. Gaurav, no.

Last year I had given an indication that given a choice, I would like to protect margins as compared to growth. This year, I would say we would try to balance growth along with margins, right?

It is not going to be that we are going to shun growth and look only for margins. We are trying to grow the book because that is important from the long-term perspective.

At the same time, margins are important to me because it is no use growing the book at lending rates which probably do not help my spreads, help my margins, on and so forth. We have to look at the best of both worlds, trying to protect the margins, as well as trying to grow the book through higher disbursements and a better retention.

Got it. The other question I have is on costs.

If I look at the Y-o-Y cost growth, that's actually quite high in first quarter. Can I understand what is driving this year-on-year cost increase, and is it also to do something with initial investments in hiring more people that you had mentioned last quarter and setting up your tech architecture for enabling digital co-lending and DA models?

Just want to understand what is driving the high year-on-year increase in costs.

Yeah. We have been hiring.

Yes, we have been hiring, but it is not significant that should increase that that should really sort of disturb my cost. The main cost is main main reason for the increase in cost which you see is a gratuity provision of ₹22 crore which we had to make due to increase in the G-Sec yield.

This is a one-off. This is a one-off which has happened in this quarter, an increase in the gratuity provision of the employees due to an increase in G-Sec yield.

Otherwise, the costs are all well within range. Yes, the IT spend has not yet taken place.

It will happen. There is a significant IT spend which is to come in the year during the course of the year.

It has not yet happened yet, but it will probably come between Q2, Q3, and Q4.

Got it. Thanks for that.

Just a final question, there is a significant drop in non-interest income. What I want to understand is, is there some adjustment in recovery item where you have excluded that from non-interest income and adjusted that with provisions, because we were not expecting a provisions write-back, and could you also give us more color on the NPA account recovery which has happened and how much is the provision released on back of that?

Okay. Regarding the other income which you see a drop, there has been a slight accounting change, right, in the current quarter, which our auditors wanted us to do.

Until last year, recoveries from written-off NPA accounts, for current quarter it is about ₹31.87 crore, was being added to other income. This year, this has been submerged under the impairment I would say head.

Basically these ₹37 crore of recoveries, which last year would have gone into other income, has now come under the impairment head. That is why you see this slight anomaly.

Got it. In that context of this, what's your guidance for full year on this new credit costs?

How should we think about this for the full year? Also, for FY 2027 entire year, should we think of 15% as the disbursement growth rate?

Coming to credit cost, right now it is -5 basis points, right? The credit cost guidance which we had given at the beginning of the year was about 10 to 15 basis points.

Yes, we are definitely in line to achieve that. The asset quality has been improving quarter-on-quarter.

This quarter, of course, there was one big one-off of ₹180 crore of NPA which we sold to an ARC for ₹140 crore. That was a big one-off.

There will be similar recoveries coming in Q2, Q3, and Q4. A lot of our big legacy loans are in very advanced stages of resolution.

You could expect some big reduction in NPA because of resolution of this. For the quarter, the recovery from NPA accounts was ₹540 crore.

Last year, it was about ₹307 crore. There has been an increase.

The asset quality is going to improve. Right now, GNPA is at 2.14%.

Guidance for the year is 2%, less than 2%. We're definitely going to achieve that.

In fact, we'll do much better than less than 2%.

The 10 to 15 basis points credit cost guidance is before the recoveries number?

That was at the beginning of the year, yeah. That took into account the various kind of recoveries we expected during the year.

Okay. Got it.

On disbursement target for the full year?

Disbursement target right now 14.5% growth. Quarter two, we have given you an indication about 15% growth.

For the full year, we stick by our guidance of 10% to 12% which we had given in the beginning of the year.

Got it. Okay.

Thank you so much. Those were all my questions.

Very helpful.

Thanks for taking the question. Firstly, with again touching upon the provisioning aspect.

That upgrade of restructured account which was going to happen and there was expected to be maybe the provisioning release from there, is that also included in this provisioning line item? If you can just highlight this entire breakup of ₹165-odd crore, how we are getting to this number, because you mentioned recovery from return-off account is also considered out there.

That would be very helpful in terms of the breakup, yeah.

Coming to the first question, yes, that big restructured account of about ₹500 crore is not included in this. Though as per the decision of the executive committee, the account was restructured from the 1st of May 2025.

Technically speaking, that one-year period should have expired on the 1st of May or the 30th of April 2026. Somehow, our auditors were of the view that since the first payment came in a little bit late.

Of course, it was as per the restructuring schedule. The payment did not happen exactly on 1st of May.

The first payment happened later. They have not allowed us to consider that as upgraded, but that will happen in Q2, Q2 or Q3.

That big restructured account is not in the reporting of Q1. The second part of your question was the Kunal Kunal, can you come again?

What was the second part of it?

This entire write-back is primarily on account of the recovery from return-off. It's not on the provisioning release of this restructured account?

No, no,

no. The restructured account is not appearing in the reporting of Q1.

Got it. This payment which you have received, what portion of this ₹500 crore has been received till now, and in terms of the release of the provisioning, would it be in terms of the actual payment, or maybe now given that one year, because last time you were confidently saying that one year will be done and we will upgrade it?

Should we see it on the payment, because now you are saying Q2 and Q3 as well, it appears like it depends on the actual payment that we will do the provisioning release?

No, there is some difference in the point of view of the management and the auditors, statutory auditors. Otherwise, personally if you ask me, technically speaking, one year is the cooling-off period.

The executive committee had restructured this account on the 1st of May. We feel that it should have been taken as updated in the current quarter, but somehow auditors have a different point of view.

We are still discussing with them, trying to iron out the issue. This quarter, it has not happened.

It could happen in quarter two. That is what I'm saying.

Payment received, quantum?

For the restructured account?

Yeah.

Now, there are two accounts I'm talking of. One is a big account which was sold to an ARC in the current quarter.

That I got it. That is ₹140 crore.

I'm talking about this restructured, you said payment happened later, how much of money have we already received from that, yeah?

This is as per the restructuring schedule, no? I do not have the exact schedule right now,

but

this is restructured over a 1.5-year period.

Restructure

usually like that. The entire money doesn't come upfront.

It is restructured to come in bits and pieces over a defined timeframe. All those recoveries are coming in.

As per the restructuring, the first payment which came in which I think, I don't have the exact date, I think it was December, right? It was in December.

Our contention is that since the executive committee of the board restructured it on the 1st of May 2025 with a repayment schedule starting from December till up ahead, we should take it as restructured from the 1st of May. Somehow they have a different point of view.

There's a discussion going on. Let's see.

If it gets resolved, it will come into Q2.

Avinash,

sorry, Kunal. Kunal here.

Sorry. Yeah.

We have received the amount as per the restructuring schedule. Nothing is overdue.

Got it. Got it.

Perfect. The other question was on yields, particularly the pressure on margins of 22-odd basis points with cost of funds remaining stable.

What is actually leading to it? Is it we have shown that yield on advances have declined, but was there a BT-out pressure, and since we have increased maybe the BT-out rates as well?

Has that impacted, because I think you mentioned ₹1,500 crore of net BT-out, and what I recollect, last quarter was ₹1,150 crore. Was BT-out also slightly higher during this quarter compared to that of the last quarter and creating some pressure on yields?

Yes, BT-out definitely. BT-out is part and parcel of this business.

Last year, it was particularly severe because banks, they are linked to repo rates. The moment RBI reduces repo rates, the entire book gets restructured to lower rates, whereas in HFCs, we have a relook depending on cost of funds, credit cost, and all other things.

We do take our time in reducing the rates across the board. Definitely, there was a BT-out pressure last year.

If you see Q2, Q3, and Q4 of last year, almost ₹34,000 crore of BT-out took place. Current year, our net BT-out, as I said, is ₹1,500 crore, slightly up from about ₹1,300 crore, ₹1,200 crore, ₹1,300 crore which is there.

That is expected, right? Nothing to do on that, though of course we have outlined a strategy to probably not let customers go.

We have certain rewriting rates in place. There is a defined policy on rewriting.

We are flexible. Now, this year we intend to be flexible with the policy in the case of prime customers, very good customers, big-ticket customers, and we are willing to bend our policy to accommodate lower rates of interest.

Because in a BT-out, what happens, a high-rate loan goes out, and what the competitor organization offers is the lending rate which is much much lower than the sort of rewriting rate. Again, we are flexible on that.

We have formulated a policy where we are tracking each and every big BT-out, negotiating with the customer, talking to the customer, and wherever we feel that the customer is a prime customer, strong customer, a big-ticket customer, we are offering him rates which are, I would say, comparable to what he's getting elsewhere. That is one thing which we are doing.

The other reason for decrease in margins, I think last year somewhere around about in April, we had a complete 25 basis point cut on the overall book. That was not factored in in Q1 of last year, because as per our rules, one-third of the book gets repriced immediately, two-thirds get repriced after the first month of the next quarter, which that means last year happened in 1st of July.

Out of a ₹3 lakh crore book, probably ₹1 lakh crore got repriced immediately in April. The remaining ₹2 lakh crore got repriced from the 1st of July.

That would also have an impact in Q1 year-on-year, because decrease in the spreads and the NIMs.

Got it. Got it, yeah.

Thanks. Thanks and all the best, yeah.

Hey, thanks for this opportunity. Just some bookkeeping questions.

What's the incremental disbursement yield in the first quarter of this year?

In the first quarter of this year, our disbursements were ₹15,014 crore, as against ₹13,116 in the first quarter of last year.

The yield on this disbursement. I

beg your pardon?

The yield on that disbursement this quarter.

The NIM?

Yield. What's the incremental disbursement yield?

Yield. Okay.

Figures I have given you, ₹15,014 crore, up by 14.5%. This is in line with our expectation of 15% which we had guided during the Q4 conference Q4 results conference call.

We are on track, 15% growth in Q1. We are on track of what we expected.

Going forward in Q2, we expect this momentum to continue, and we expect the company to register 15% growth in Q2 also.

No, the disbursement yield as in interest yield on this ₹15,000 crore of disbursement. What's the yield on that?

You're talking about

the loan rates,

incremental?

The incremental yield on our disbursement this quarter.

Am I audible now?

Yeah.

What's the incremental disbursement yield this quarter, as in that 15,000 crore disbursement, what yield on average is that?

You want incremental yield on whatever we have disbursed in this quarter?

Yes. On average, yeah.

Incremental yield for this quarter is 8.25%.

8.25%. Your overall portfolio yield, I'm looking at slide, is 9.12%, right?

No, we could not get you.

The incremental yield is 8. 8.2%, and if your overall portfolio book yield or that book yield is 9.2% as of 1Q 2027, shouldn't the margin continue to compress, because there's 100 basis points gap between your new yield, incremental yield, and your book yield?

Cumulative yield is 9.12% as on 30th June '26.

There's 100 basis points gap between your incremental yield and your book yield, cumulative yield. How are we maintain a margin going forward, because as you disperse more, and the repayments come, the book yield will trend down towards the incremental yield, right?

No doubt about it, there was some pressure on our cost of borrowing, but our strategy is definitely we are now focusing on the other housing loan portfolio, which is giving almost 150 bps extra if you compare with the IHL portfolio. That portfolio is growing at around 20% in this quarter.

We are hopeful that IHL which was grown by 15% in this quarter, and portfolio diversification from IHL to OHL, other than housing loan, means your LAP and LRD, that is the high-yielding segment. I think that segment will compensate our overall yield for the year.

The composition of your

Thank you.

Hello. Good morning, good afternoon now.

Can you tell me last year, and I'm talking about disbursements only, last year in project finance, we had a disbursement of roughly ₹2,000 crore. This year is there a target or sanctions pipeline which you follow, or is it more transactional, and when it comes to you through your team, that's when you decide whether to underwrite or not?

How do you approach this?

Yes. Last year, ₹2,000 crore of disbursement, a very muted year as far as developer book was concerned.

This year in the Q1, in Q1 we have disbursed about ₹872 crore. There is a growth of more than 450%.

Target for the year in the developer book is ₹4,000 crore. We are aiming at ₹4,000 crore, but we are expecting somewhere around about ₹7,000 crore to ₹8,000 crore.

The process is transactional, yes, as and when the borrowers approach us for loan, we do the credit appraisal, see what rates they are asking, and then take a call whether from the credit perspective, risk perspective it is doable, and also whether from the rates perspective is it in our interest to offer them that loan at whatever rate they are asking.

Sir, is there a sanction pipeline, or is there no sanction pipeline?

There would be some cases which were sanctioned last year. Because see, developer finance is basically construction finance, right?

This is dependent on the stage of construction. Any building coming up in the initial stage, plinth level construction complete, probably we disburse what, 25% to 30% of the entire sanction.

As and when the construction So

how much is the sanction, sir? Is it ₹7,000 crore was the sanction, is it?

Last year No,

no. Last year, the sanction was closer to ₹5,000 crore.

Then sanction does not translate into disbursement, right? Supposing we sanction a loan at 9.5 to say a Shobha in Bangalore.

From our point of view it is sanctioned, but Shobha supposing is asking me at 8, and probably I'm not okay with it. That sanction automatically

I would say I understand that competitively things change, but if you have a sanction today, there would be some predictability of it converting into a disbursement, or that depends on when the disbursement comes up?

No, if a loan is sanctioned, of course there are some pre-disbursement conditions if something is required, and we send that

only when the condition Just to explain the reason I'm asking is that you have a ₹4,000 crore target for the year. I just want to know what is the predictability.

You will achieve ₹4,000 crore, or that is dependent on when that disbursement comes up and whatever commercial terms are acceptable or not. It may not be ₹4,000.

It may be ₹2,000. You can't say right now.

This ₹4,000 would include probably about ₹700 crore, ₹800 crore of sanctioned amount where the disbursement would be made in the current year, right, what we have already sanctioned in the previous financial year. The rest of it would be new sanctions, new files which was during the year.

We are expecting a 100% achievement of this disbursement target of ₹4,000 crore. In fact, what we are aiming for is a disbursement of around about ₹7,000 crore to ₹8,000 crore.

Understood. Got it, sir.

You will maintain 10.5 over there lending rate, that will be your cut-off broadly?

That is not a benchmark, but that is somewhere where we would like to be, right? It is no use growing your book at 8%.

Exactly. Exactly.

Internally you want to stick to roughly 10.5 plus/minus something just so that profitability is maintained. Understood.

In LAP and LRD, sir, again similar question. Last year you did about ₹10,000 crore.

This year you've done ₹2,000. Is there again a target for LAP, LRD put together for the year?

This year, the target is ₹15,000 crore.

15. Got it, sir.

What is the incremental lending rate over there in LAP and LRD?

LAP and LRD is about 9.4.

In LAP?

In LAP and LRD. We call it the NHI and the NHC segment.

Yeah. Both of them are similar, 9.4?

Yeah. Overall the LAP and LRD book is 9.4.

That is your incremental rate, right? That is your fresh disbursement rate.

Incremental.

Got it.

Got it.

Yeah.

Abhishek, I'm intervening in between. For this NHI segment, LAP and LRD, my cumulative yield is 10% plus, but my incremental yield is 9.43% for this quarter.

Okay. What is the cumulative yield currently on the book?

LAP and LRD?

No, no, LAP and LRD.

It's more than 10%.

More than 10. Got it.

Sir, finally on your credit cost, I didn't get the exact breakup, but how much is actual credit cost and how much is recovery for the quarter? Can you give that breakup?

Recovery from NPAs for the quarter is ₹540 crore. No,

no, the stuff that is coming into your P&L, sorry. The ₹165 crore provision, how much of that is provision and I think there's a net write-back, right, ₹164 crore if I remember correctly?

How much is the recovery part or right-back part and how much have you actually provided?

You're asking recovery from right-back? No,

no. There is a P&L entry of ₹164 crore, right?

That is a write-back total, if I remember correctly. Hello?

Okay. ₹132 crore is from ECL.

Okay. Okay.

This 164 of recovery in the ECL is ₹132 crore from ECL and ₹32 crore from recovery.

Okay. I'll take that offline.

No problem. I got my answer.

Thank you so much and all the best.

Hello. Am I audible?

Abhijit. You're audible.

Yeah. Hi, sir.

Good afternoon. Sir, just two things.

One is, I think earlier in the call you had said that while this quarter you reported margins of 2.58%, for the full year, we are now guiding for the lower end of the margin range which you had given earlier, which is 2.6%, if my memory serves me right. All I'm trying to understand is, don't you think that what we have discussed in this call earlier as well, that margin pressures will likely continue given that the overall portfolio yields for us are about 9.2%, 9.14% thereabouts, 9.12% to be precise.

What we have acknowledged is the incremental yields on the business that we are doing is about 8.25%. Pressure will be there on yields.

On the cost of borrowing sides also, if you could just enlighten all of us that what is the maturity that is coming up this year both on the NCDs and the bank borrowing side, at what rate are they coming up, and what is it that you expect it to get refinanced at? I'm just trying to understand that interplay between pressure on yields which will be there.

While I heard you that we're trying to make some changes in the product mix, trying to increase NHI, NHC, but that is a much smaller proportion of your book and will take time for it to make any meaningful improvement in the portfolio yields. Just that bit if you can help us understand.

Abhijit. Your first question was my incremental cost of borrowing.

It is 7.06% for this quarter. Second question was how much amount is going to mature in this year.

It is around ₹17,000 crore. Average cost of that is around 7.38%.

Got it. Which you expect to get refinanced at maybe 7.1?

Is that a fair assessment?

Yeah. Can you come back, please?

What was your

What I'm trying to say is this ₹17,000, ₹18,000 crore that you just said at 7.3% or 7. Yeah.

You expect it to get refinanced at a lower rate? Yeah.

Almost now rate scenario is definitely it is on slightly on higher side, but what I said, my incremental borrowing cost is 7.06% during this quarter. Probably I am hopeful that I will get it at a lower cost at what rate it's maturing.

Got it. Sir, then safe to conclude that at least cost of borrowings do not inch up from here at the margin.

Your portfolio weighted average cost of borrowings for your liabilities comes down in the coming quarters?

It's almost in line, but it may increase by 3, 4 bps on cumulative basis. If you compare that my cumulative cost of borrowing it was 7.27% last year, it has increased hardly 1 bps only.

Correct. You expect it to stay there or increase by 3 to 4 basis points, is what you said?

3 to 4 bps bps maximum.

Got it, sir. This is useful.

Then the only other question was a data keeping question. In the earnings call, you share your Stage 3 segment-wise.

Can you do it for all of us?

Abhijit. You can note it down.

You want it group-wise, right? Individual loans, HC and project, etc.?

Yes.

Individual loans, Stage 3, the EAD is ₹2,967 crore. What else do you want?

You want the provisioning also?

Yes, sir. Either this or the percentage numbers that you put out for IHL, NHI, NHC, and project loans.

Percentages is like this. You want the GNPA or you want the EAD?

Abhijit, you tell me clearly what do you want.

Sir, I want the GNPA, the Stage 3 numbers that we give segment-wise.

Stage 3 in individual, the total EAD is ₹2,967 crore, and the percentage is 1.09%.

In

HC and project, it is ₹2,819 crore, and it is 20.53%. NHI is ₹1,113 crore, and it is 3.06%.

Overall, ₹6,899 and 2.14%.

Got it, sir. Just one follow-up on that.

IHL, you have actually seen it move from 1.03% to 1.09% this quarter?

That's right. Increase of 3 basis points is there.

Got it, sir. That answers my question.

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

Yeah. Hi, sir.

Can you hear me?

I can hear you, Rishi.

Hi. I'm new to the company, I just had some more questions on the business front rather than just this quarter.

The first question I had, sir, you had mentioned in this Q3 FY '26 call that y'all are exploring the possibility of bringing in an external CEO, non-LIC individual, probably someone from the industry, and discussions are ongoing with LIC. Just wanted some further updates here if y'all have anything which you can share with the wider audience.

Are you sure I said this? Because I don't think I ever said that.

In your Q3 call, I think it was mentioned for the first time that y'all are exploring the possibility of an external leadership.

No. This has never been discussed.

Okay. That's not happening.

All right. Second, I wanted to understand, sir, on the affordable housing finance business, you mentioned an external team, completely external team, non-LIC Housing Finance people to run it.

Over the next two, three years, you all want to build it up, and this year you all are assembling the team. Just wanted to know, are we on track, and what budget have we all set aside?

It is still a work in progress. It has not been rolled out as yet.

Yes, but expected that with the concurrence of the board and the NRC which is going to give me the sanction for additional staff, we will be taking it up in the current year. Sir,

how much budget are you all keeping aside for this over the next two, three years? How much OPEX you all are willing to fund, how much loan book are you all willing to take exposure to, any guardrails around that?

Yes, there will be guardrails because the affordable business is a risky segment, there will be definitely credit-related guardrails will be there. We have not set any target for business or anything of that sort.

As I said in my last call, let the child be born and then we see how to groom him and develop him, right? We have not taken any targets for affordable business right now.

Yes, we are doing affordable business, but not with this structure which we had in place, or which we discussed in Q4, the con-call of Q4. It is a work in progress, but expected to take off somewhere in this year with the concurrence of the NRC and the board.

Okay. Got it, sir.

Third question, sir, I wanted to understand till last year or the year before that, you all had some ₹7,000 crore worth of loans which were written off and under process of recovery. Just wanted to understand how much of that amount has been recovered and how much do you expect to recover over the next two, three years realistically?

Out of ₹7,000 crore, I believe approximately ₹3,000 ₹3,000 crore would be the amount in technical write-off what we call.

It is not written-off strictly.

We still consider it to be a part of our book and we aggressively pursue all legal and other methods of recovery. In the current quarter, I think we have recovered about ₹37 crore from this pool.

Most of these are your legacy loans, most of it from the developer finance book. These loans are in various stages of resolution, I would say, right from your SARFAESI, I would say, legal recourses, to cases in DRT where we are expecting decisions, NCLAT, NCLT, and also some of these cases are in negotiations with the borrower themselves for an one-time settlement, OTS what we call.

This year we would expect some good recoveries from here, from at least to the tune of ₹500 crore to ₹600 crore. ₹180 ₹180 No, this was not from a written-off account.

Yeah.

Okay. So ₹500, ₹600 crore this year.

Then, do you think another ₹2,000 crore over the next two years can be recovered out of this?

Definitely. We'll be targeting more, but definitely ₹2,000 crore.

Okay. Got it.

Sir, my fourth question, over the last few years, you all had implemented Project RED, and now you all are venturing onto this new IT straight-through process, if I'm not wrong. Just to understand, Project RED, what benefits are you all seeing today?

How should one think about will we see loan growth acceleration, will we see reduced BT-outs, will we see reduced cost to income or lower GNPAs on back of Project RED? Again with the straight-through process, I think it's more automated underwriting.

Do we expect faster processing, faster TAT? I'm just trying to understand, we're spending this much.

How does an investor measure your success? Is there some targets that you all are setting where we see that this tech investment is actually helping us?

Then the latest this year, how much do you expect to spend on IT? Finally, if you were out to measure yourself against, say, a Bajaj Housing or a Can Fin Homes, where would you say you would be on the tech capabilities as say a percentage of their capabilities, if you've done some assessment?

Yeah.

I think Project RED was basically a complete overhaul of our LMS and LOS. Right?

The earlier system which we had was CARS. This was implemented in 2012.

This was, I would say, okay. For its time it was okay, but then coming into the new digital world, we found that it was not adept or not in tune with the current requirements of the digital world, the various apps we have, the various APIs we needed to link.

We went in for a complete overhaul of our both the LOS and the LMS. That is complete.

That has happened in 2023-24. Now we are integrating our various, I would say, apps and applications and the other tools which we have to improve the customer experience, improve our service delivery, improve our turnaround times, improve the way and methods of working.

One of them you talked about was the STP process, where we're talking of complete digital onboarding, digital credit appraisal. That has been implemented somewhere around about Jan or February of last year.

Four months of experience we have. Yes, we had very tight guardrails around that, which resulted in a smaller number of cases being eligible to go through the STP process.

We are currently reviewing that, and based on our experience, we are, I would say, assured that, okay, whatever guardrails were put in place, whatever risk-mitigation measures were in place are working, and now we can afford to relax it a bit. In the first quarter, almost about ₹960-odd crore have been disbursed through the HOMY app, which is also an onboarding platform.

All these new digital things which help us reduce or cut back on our manpower, or rather redeploy our manpower, if I may use the word, there's not going to be any retrenchment or anything of that sort. Whatever excess manpower we get by way of introducing this digital initiatives, they are going to be redeployed in other productivity areas so that the productivity goes up.

That is a work in progress. Another thing this year what we are looking at, we are looking at a complete data lakehouse project, whereby the entire data of the company is going to be, I would say, consolidated and used effectively for data mining, data drilling.

AI is going to be integrated into that so that it helps us in generation of leads, it helps us in our what you call EWS, early warning systems, for collections, for NPAs, and for a whole lot of other systems. That is going to start this year.

The tendering is already over, and very shortly we are going to issue the contract to the successful vendor, which I will not name right at this moment. These are the things in progress.

If you say compared to Bajaj and Can Fin, yes, I do agree they are probably slightly ahead of us at this moment, at the current moment, but we will catch up with them. No doubt about that, we will catch up with them.

Our systems have to be equally robust and even more robust than systems which at least Can Fin has. Bajaj is, of course, the benchmark in the industry, in the housing finance industry, if I may say.

This is a work in progress. It is going on in all fronts and we are expected to do well.

This will result in reduction of costs, will result in I would say generation of additional manpower for us, which can be used for productive purposes.

Got it, sir. If you could just quantify how many

This is Sonal Minhas and I would just like to continue from the question that somebody in the queue was just asking. Sir, when will these software products start adding meaningfully to the top line and the growth of the company?

That's one. Secondly, also that from a preparedness perspective that if you want to lend, let's say, at individual loans at higher yields, what is the preparedness required from a people, systems, and from a mindset perspective?

Because it's a different EG of customers that you need to lend at. Just want to understand subjectively what is the preparedness for that.

As regards the digital preparedness, it's not a sort of a one-time job or a one-day job. This is a continuously evolving process.

Digital systems are put in place, various things like onboarding of customers, for credit appraisal like the STP process we have done, for generating EWS, for helping us reduce our delinquencies, reduce our NPAs. This is a complete work in progress.

Now with AI coming in, a lot more new tools coming in, we are exploring those also. There cannot be an end date to that.

It is a continuous process. It will keep on happening.

The ultimate aim and objective is that make the experience for the customer much much much better. Number two, make it very cost-effective for the company to do its business and probably reduce the overall costs which contribute to the margins of the company.

This is an ongoing process, right? The second part of your question, what was it, Sonal?

Sir, I was asking that maybe a timeline would help in terms of understanding when would the growth of AUM would be at par with the names that we were just talking about, Bajaj, Can Fin, maybe couple of other names. Is there a broader guidance of when can we expect, let's say, a double-digit growth number or a higher growth number in terms of AUM growth once this preparedness is there and ready internally?

Yeah. See, if you look at our peers, for example, I do not know the Bajaj numbers, probably their book growth will be somewhere around 20%, 25%.

Yes. If you look at us, yes, 4% growth seems very very very low.

As CFO was saying, we've added almost ₹12,000 crore, ₹13,000 crore to our book in the quarter, in the first quarter, right? Now, because my base is huge, ₹3 lakh crore, as probably Bajaj being half of mine.

Naturally, on the same growth, Bajaj would be showing a double growth than mine, right? Matching the peers until they reach our size is probably going to be difficult.

Yes, I agree to that. Definitely, yes, we cannot be satisfied with this 4%, 7% growth which we have been demonstrating over the past 3, 4, 5 years.

Definitely, we need to start off with a double-digit growth and probably inch towards 12%, 13% consistent growth over a period. This year, we are hell-bent on trying to give a growth of close to 8% to 10% in the book, and at least a 15% growth in the disbursement.

That we can start our journey of growth both in the disbursement, as well as on the book, which we have not been showing for the past 3 to 4 years.

Got it, sir. Thanks for answering, sir.

Thank you.

Hi. Good afternoon, sir.

Just a couple of questions. I just wanted to check regarding the guidance.

I think earlier the guidance for disbursements was around 16% and growth was around 10% to 12%. Is that being revised to around 8% to 10% growth and disbursements of around 15% currently?

Also, just one more question on the disbursement side. I think last quarter, you had mentioned that in April, you were seeing around disbursement growth of around 21%, right?

Then what happened in May and June so that the disbursement growth for the overall quarter dropped to 14%? The last question on credit costs is that I think the guidance was around 10 to 15 bps for FY '27, but considering the accounting change that was carried out in this quarter, is the guidance for credit costs still in that range or it would be lower than that?

These are my questions. Okay.

Coming to disbursement, yes, one month is not an indicator of what is going to happen in the long term. Yes, April, I think when we talked, we were showing probably a 21% growth.

The guidance we had given for the quarter was 15%. We have almost been there.

14.5% is what we have achieved. Again, as I said, guidance for quarter two also stands at 15%.

Yes, some months could be good. July could be good, August could be slightly lower than July, September could be good.

Let us take it for the quarter. 15% is what we had guided, and 14.5% is what we have achieved.

For the year, our guidance for the book growth was double-digit, and for the disbursement growth, it was between 10% and 12%. We continue to maintain that.

Credit cost right now is -5 basis points. For the year, we had given guidance of 10 to 15 basis points.

Yes, and we stick to that guidance of 10 to 15 basis points for the year.

Finally, the actual AUM growth guidance is around 8% to 10%, and disbursements for the full year is 10% to 12%?

Yeah. Okay.

All right. Thank you.

Thank you. Thank you, friends, a lot of insightful questions.

Yes, I know the concern is on margins and on growth, these two aspects. We are very well aware of that.

As far as the growth, I said the disbursement has picked up in Q1 and we are optimistic that the trend will continue in Q2. As far as the margins is concerned, it's going to be challenging, considering the fact that our segment is basically what the banks peddle in, we are basically competing with banks.

We need to continue to compete, keeping an eye on the sort of margins we get or the spreads we get on our business. The other thing is the diversification strategy which we are pushing hard, showing traction, showing green shoots.

These things, I believe, will help us in achieving our guidance of 2.6% on the NIM parameter which we had given. Q2 is going to be a good quarter.

As of now, from what I see as of now, Q2 should be a good quarter for the company, and should be a quarter which will help us accelerate our journey to achieving the guidance we have given to all of you. Thank you.

Thank you for your participation.

Just I want to supplement something more. Our disbursement started growing in double-digit, and definitely this quarter is really great in terms of my PBT and PAT.

Then my asset quality is also improving gradually. The return on asset for this quarter is again improved by 9 bps.

We are definitely hopeful that this year will be definitely do something extraordinary by end of the year. Thank you very much.