Thank you, Ajit, and JM team for hosting us. A very good evening and welcome to the BHFL Q2 earning calls to all.

I have the entire senior management team members with me. We have uploaded investor presentation on our website and stock exchanges.

Hope you got a chance to go through the same. I'll focus on key updates from the same presentation for the quarter which should take around 10 to 12 minutes, and then we'll open the forum for the Q&A.

Beginning, I'm on panel number 3 on the presentation. Last quarter witnessed two significant milestones for the company.

We crossed a landmark 1.5 lakh crore AUM, driven by strong and diversified growth. Along with that, Sambhav loans crossed monthly disbursement run rate of 500 crore during the quarter.

Overall good quarter across growth, asset quality, and profitability. Disbursements increased by 25% on Y-o-Y basis and AUM growth also was 25% on Y-o-Y basis.

PAT growth was 18% Y-o-Y to 980 crores in Q2, while ROA was 2.2% and ROE improved to 12.7%. Operating efficiency continues to improve with opex to NTI ratio at 19.1% as against 19.7%, which was in Q2 last year.

Asset quality remains stable with GNPA of 29 bps and NNPA of 12 bps, same in line with last quarter. Operational network stood at 223 branches across 182 locations.

Capital adequacy was 21.24% and principal business criteria stood at 60.49% as of 30th September '26 against the 60% regulatory criteria. I'm moving to the next panel, which are quarterly financial indicators.

AUM total stood at 1.58 lakh crore as of 30th September, and a quarterly AUM addition was close to 8,580 crores this quarter against 6,329 crore in Q2 of last year. Product growth across anchor products was good.

Home loans AUM improved to 22% growth in Q2 against 20% in last quarter, while LRD growth was also strong at 39% against 41% growth in Q1. LAP grew 26% and DF grew 13% on Y-o-Y basis.

AUM growth, AUM mix remained well diversified with a higher home loan composition at 53.9%. Disbursement momentum was good during the last quarter with 25% growth, moving from 15,900 crores to 19,900 crores in Q2 FY27.

I'm moving to panel number 5. The cost of funds reduced by 17 bps on sequential basis from 7.2% in Q1 to 7%, close to 7% in Q2 FY27.

It was mainly due to conversion of fixed rate sensitivities to floating rate instruments. We always used to follow this strategy and we had accelerated that strategy in last Q2.

Borrowing mix continue to have a higher money market mix at 56%, followed by bank lines at 35%, and NHB at 9%. Total gross spreads improved by 7 bps because of, driven largely by COF moderation of 17 bps, thereby it was able to offset 10 bps portfolio yield reduction.

NIM moderated slightly by 10 bps sequentially to 3.7% to Q2 FY27. Opex to NTI, as already called out, improved 57 bps from 19.7% in Q2 FY26 to 19.1% in Q2 FY27.

Moving to the next panel. Asset quality was stable during the quarter with GNPA flat on sequential basis at 29 bps and NNPA at 12 bps.

Credit cost overall moderated by 6 bps on Y-o-Y basis to 10 bps in Q2 FY27 against 16 bps in Q2 FY26. Thereby, PAT increased by 18% Y-o-Y to 757 crore from 643 crore in the same quarter last year.

Annualized ROA 2.2% in the current quarter. It was 2.3% in the last year Y-o-Y in Q2 FY26, while ROE improved from 12.2% in last year to 12.7% in the current year Q2.

Now I'll go to panel number 21. Most of the metrics in this panel have already been covered on the previous panels.

Net NTI growth was 15%, if I have to just call out separately what has not been called out, on Y-o-Y basis from 1,090 crore to 1,254 crore. PBT at 18%, 980 crores.

Coming to half-yearly performance, NTI grew 16% to 2,429 crore in H1, while opex growth was 10% on Y-o-Y basis to 470 crores. Both PBT and PAT growth was 20% to 1,908 and 1,472 crore respectively for first half of the year.

Opex to NTI improved from 20.4% in H1 FY26 to 19.3% in H1 FY27, and credit cost was 8 paisa, 8, 8 bps in H1 FY27. ROA for the half year also stood at 2.2% and ROE at 12.6% in H1 FY27.

I'll move to panel number 23. As already called out, portfolio yield moderated by 10 bps sequentially from 8.9% in Q1 to 8.8% in Q2, while cost of funds dropped from 7.2% to 7% in Q2.

Overall gross spread inched up by 7 bps on sequential basis to 1.8% in Q2 against 1.7% in Q1. I have already talked about other metrics which are depicted on this panel.

I'll come to the next panel for treasury. The borrowing mix continues to be diversified, but with higher composition of NCDs at 50.8%, which has improved 430 bps sequentially, which has offset the moderation of 280 bps in bank borrowing, 90 bps in commercial paper, and 60 bps in NHB, as a overall refinancing mix for the company.

Coming to panel number 29. AUM mix continued to remain diversified with sequential increment in LRD by 90 bps against moderation of 70 bps in developer finance and 20 bps in home loans.

Now I'm on panel number 31, which is covering Sambhav Housing updates. Business crossed a critical milestone of 500 crore monthly disbursement run rate in the last quarter with quarterly improvement in disbursement growth.

Now Sambhav constitutes 16% of overall home loan originations in Q2. It is progressing well across all metrics with B2C team deepening its penetration, and new sourcing channels of B2B and D2C are shaping well.

ATS remains stable at 28 lakh, and customer having bureau score greater than 750 increased to 65%. Salaried customers continue to have a higher mix of 66% even in this business.

Moving to panel 36, which is on asset quality. Stage 1 assets improved marginally by 1 bps sequentially from 99.39 to 99.40, with similar reduction in Stage 2 from 32 bps to 31 bps, while GNPA was constant at 29 bps.

Provisioning coverage ratio continue to remain healthy, with Stage 3 coverage at close to 60% at 59.8%. Moving to the next panel, which is the last panel I'll cover before we open the forum for questions.

Product level GNPA: home loan stood at 36 bps in Q2 against 34 bps in Q1, marginally up. LAP GNPA moderated by 1 bps sequentially to 61 bps.

LRD had GNPA of 2 bps due to movement of one retail LRD account to NPA during the quarter, which was in Stage 2 last quarter, which moved to Stage 3, excluding which portfolio quality continue to remain strong. Developer finance GNPA was flat at 12 bps.

Overall NNPA flat at 12 bps on sequential basis with 1 bps increment in home loans to 16 bps, 4 bps reduction in LAP to 21 bps, and LRD NNPA at 1 bps, and DF NNPA moderation of 3 bps sequentially. That's all from my end on the updates from the quarter.

Happy to take questions. Over to you, Ajit.

Yeah. Hi.

Thanks for taking the question. Couple of questions.

One is on developer finance book. Anything to read into it?

Was it higher repayments which have happened during the quarter or we have seen the slowdown in the disbursement momentum itself out there? Because after a long we had seen the decline in the portfolio on a sequential basis.

What would be the strategy out there on the developer book? The second question is on overall margin trajectory given that now there is lot of liquidity with the banks as well and within the prime side have we started to see active competition with respect to the rates?

Would there be more pressure given that repo rate is also being hiked, we will see the pressure on the cost of funds while maybe on the yields would there be a limited pricing power to entirely pass it on? Would the margin pressure be relatively higher than what we had anticipated earlier?

These are the two questions.

Thanks, Kunal. Just to answer the question, the first question was on the DF book.

It was much higher repayments during the quarter coupled with slower disbursements, both. Larger part was higher repayment, which is a project-led cash flows.

The cash flow momentum was significantly higher. That is what resulted to the book to there.

Our strategy remains to grow the book. It is not a strategy call or a cautious call or a conscious call from the company to reduce the growth in this portfolio.

In fact, in the first six months of the year, our sanctions in this business have increased significantly compared to the last year same first half. In this business, sanctions translate to disbursements and the AUM growth at a lagged basis.

Going forward, you should see the business composition increasing. We want to grow this business at a rate of around 15% to 17% of the portfolio.

That has always been our stated stance, and we should see that stance back sooner than later. That's on the DF.

Sorry, just in terms of lower disbursements, what was it tightening of the guardrails or something, or maybe it was just in the normal course of a business?

Normal course. I called out specifically there was no conscious strategy at the company end.

There's no conscious strategy of the company end. In fact, we remain committed to at a strategic level to grow this business significantly at a higher pace than the company pace.

It was just higher attrition coupled with lower disbursements which has resulted into 13%. We hope that we should be back to the growth trajectory very well in the quarter three and quarter four in this business because it remains our largest funnel for home loan business, as well as it remains our largest profit driver.

There is no strategy or a cautious stance at the company end. On the margin trajectory, things are yet to play out.

The repo mix rightfully will result into pressure in terms of cost of fund going up. How much translation happens in the field from the yield perspective on the acquisition pricing, we are yet to see that, because the repo hike has happened seven, eight days back.

Generally by 20th or 25th of the month is when you after 15 days of the repo hike when you start seeing the real acquisition pricing movement by the other leading prime player, which is the banks in this case, how they pass on. If the pass-on through the acquisition pricing is lower, we may see higher BT pressure, which will impact AUM growth, because that is what happened in the last scenario of the interest rate movements.

We cannot give a firm view as of today, because we have to see the market response to the repo rate hike. The banks increasing the MCLR very fast after the repo hike gives us an indicator saying that probably there will be a movement in the acquisition price as well, in the housing loan as well, because we have seen leading public sector banks have increased the MCLR very very fast in terms of as soon as the repo hike was there.

It gives us a indicator saying that where they'll be heading. We have to wait and watch because of a liquidity what is there in the system for fresh acquisition.

That they have to decide. We will get to know that in next five, seven days, Kunal, in the market.

If the acquisition pricing pass-through is not there, it can result into higher attrition pressure on the prime side of the book. To offset that, what we have always stated or had been stating for last four, five quarter, we will continue to expand our presence in the non-prime.

We'll accelerate that if we see in next two, three months more pricing pressure coming in the prime to offset and maintain the growth stance. We will accelerate more on the non-prime side so as to we can continue to balance.

As we swap from fixed rate to floating rate, is it larger part of the optimization already done and how sustainable would this 7% cost of funds be? Otherwise, maybe I think now since we have swapped it to floating and incrementally repo rate are also getting hiked, obviously cost of funds would definitely inch up from the current level.

Yes. Largely we are optimized balance sheet with asset to liability floating almost completely matched.

The flow-through of a repo hikes to the cost of fund should be to the extent of close to 80%, 82% of the hikes which will happen, and the similar flow-through will happen in the portfolio as far as it is concerned. There will not be any margin compression because of that.

That margin compression can be only on the acquisition side, which is on the acquisition side if the acquisition pricing doesn't move up in line with the repo hikes or the repo hike there. From as far as the portfolio is concerned, portfolio will move in line with the cost of funds.

Portfolio rate hikes will move in line with the cost of funds movement.

Okay. Thanks, yeah.

That clarifies. All the best for the future quarters, yeah.

Thanks, Kunal.

Yeah. Hi, Atul and Gaurav.

Thanks for the opportunity. I had two questions.

First is with regards to the insurance commission. I understand, of course, this is a draft.

What I wanted to understand is, of course, first, what do you think is there any scope for say the representation bearing some fruits? More importantly, generally what we hear is that most of the peers talk about being able to offset this via say processing fees or something else.

Now that is also a function of the competitive pressure. Do you anticipate such kind of say offsets being available to BHFL?

That's my first question. The second piece is, Atul, on the Sambhav segment piece, I know you mentioned that in the event of say competitive pressures being more elevated, you anyway are scaling up the Sambhav piece.

Now over here, as I understand, we have a novel say business model wherein we have this more of a hub-and-spoke model, unlike what we have seen for some of the peers. How has the experience been?

Do you anticipate say, are you geared up to do a rapid scale-up of this book? If so, what is the kind of targets we can look at say over the medium term?

Thanks, Viral. Two questions you have asked.

First is on the insurance commission. I'll not like to hazard a guess on how the regulator will respond on the representations what has been made by the various industry players on the commission.

If we have to assume that the final guidelines are the same as the draft guidelines or with a minor modification, the impact on the income would be there. That is visible because that's visible from the numbers as well, which is cross-sell income in the financials.

In Sambhav segment, some offset will happen through the higher processing fee and a bit of a higher margin, because that's what industry will pass through. That's what we will pass through.

In the prime segment, some impact can be offset with better efficiencies, better productivity, some a bit of a higher fee, but not fully. However, I'll call out, Viral, here is that the higher fee or the higher margin will play in a bit of a longer term if the guidelines are there.

In the shorter run, which is a Ind AS accounting, because fees doesn't get accounted for upfront, unlike cross-sell income, the impact on the short-term profitability will be to the extent of there, because we will offset the P&L impact at a I-GAAP level, because we see P&L internally both I-GAAP and Ind AS, while the regulatory accounts or the financial accounts are only in Ind AS. I-GAAP's some bit of a offset is possible.

Ind AS full offset we'll have to see how does the industry move. If the insurance commissions are the way they are, it is for Ind AS accounting for short run for one year, I don't think it's feasible to offset that impact.

If we have to call out specifically, there's a 10%, 11% of the PBT which is generated from the cross-sell income, which is the income in conversation. I think 4%, 5% of can be offset by various methods, whether higher efficiencies or there, balance 6%, 7% impact on the PBT is likely to be there.

Which will also have an impact on opex to NTI in the next year, because if your NTI goes down, the opex to NTI metric what we had been always calling out that we bring it down by 1% every year, we may have a flattish opex to NTI metric next year if assuming these guidelines come. I think that's more than required detailing I have given or you asked for.

Yeah. Yeah.

It's quite detailed. Yeah.

Thank you. Okay.

Second question yours was on Sambhav segment. We follow a centralized underwriting model for Sambhav and to a certain extent regionalized operations center.

It has worked very well for us. Our confidence on the business is growing by the day.

We have been looking to accelerate. In fact, that is the path what we have chosen and we had already in the year beginning, I had said that by year end we should be at 600 crore monthly disbursement run rate.

Basis current trend, I don't see a reason that why we should not be touching or crossing that 600 crore run rate. As far as accelerating is concerned, Viral, we would like to accelerate it much more, but I think we are already accelerating it in a reasonably fast pace.

We will continue to grow this. We have said in the medium next year we will take it to around 20% of the home loan mix.

In a longer term, longer term means I'm saying 3 years, or 3.5 year, 4 year, we'll take it to 30% of our home loan mix. The growth will continue to be there in the business for next 3, 4 years significantly ahead of the prime growth for us to keep on balancing the mix from a margin protection point.

Right. Got it.

Atul, just one more question, if I may. Probably more so for Gaurav.

With regards to the cost of fund side, now I understand you did explain the entire swap piece and the outlook. Just I wanted to understand given that in the prior say the rate cut cycle, we have seen an inadequate transmission by the banks, right?

I'm specifically concentrating just on the bank piece. Do you anticipate in your negotiations, of course, this is something that you would be negotiating on the way up as well, do you have some room to kind of negotiate on the spreads and extract that kind of benefit, which otherwise was not passed through in this cycle on the way up?

Viral, we largely borrow only on EBLR. The mix of a MCLR borrowing is close to 1% or 2% only in our there, if I leave aside NHB refi, because NHB refinance is on NHB PLR, which in any case is efficient funding always, because of a mix of affordable which is fixed for a longer term and normal refinance, which is on a PLR.

It's insignificant. 1% or 2

2%

2.5% of our liabilities are. Rest of our liabilities are always on EBLR.

That's why I said close to 80% as a repo hike, we will see it transmitted to the COF as the repo hike as. Because we are largely on the EBLR, that's why our cost of funds had been efficient always.

We are largely on EBLR.

Right. No.

Just on this piece, what I was referring to is the spread piece. Are you able to say negotiate the spread say lower on this way up rate hike?

We'll have to wait to see that if it is a one hike or a two hike or a three hike, four hike scenario as the scenario evolves. I don't think there is any scope of negotiation on the first hike.

Probably the negotiation scope also opens up from what is available in the money market on the upfront basis versus what you're existing liabilities are priced at. Today in last four, five days, because of overall treasury market and overall money market, I'll not call there a scope available right now basis this hike and basis the money market position what is there post the policy for last seven, eight days.

Vijay, am I right?

Yeah. Yes, yes.

Our treasurer is there. I was just asking him.

It will evolve. It is too early right now for us to say.

If there is a scope available, if the fresh borrowings are at a lower price than the existing borrowing, there is always a scope for negotiation. Right.

Got it.

Got it. Thanks very much, Atul, and all the very best.

Thanks, sir.

Hi, Atul. Hi, Gaurav.

Shubhranshu,

Right. I'm speaking from the handset.

Can you hear me now?

Right. Hi, Atul.

Hi, Gaurav. Two quick questions.

The first one is around the PBC criteria. What percentage of our book now is home loans, pure home loans?

What is the denominator that we use here? Is it just the AUM or are we adding the investments and cash as well in the denominator to calculate the PBC?

Second is that in the ticket size that we operate, do we think that with banks being flush with FCNR, we're going to see hyper competition? Of course, some of the banks have also increased the rates by 20, 25 bips for the inaugural scores of home loans.

How do we look at competition from PSU and private banks going forward in the ticket sizes that we operate in in prime housing? Thanks.

These are my two questions.

Thanks, Shubhranshu. As far as PBC criteria is concerned, we have called out in the presentation we are 60.49 as of 30th September and 50.6 if you have to take individual home loan.

There are two criteria, 50 and 60. 50 being individual home loan and 60 being housing assets.

We are 50.6 in the individual home loans as a criteria. This is a AR criteria.

These are not AUM criteria. The regulatory criteria are inclusive of all investments, everything, all assets.

This is the PBC

definition.

Tangible assets. The PBC update what we provide in any investor call is as per the regulatory definition.

It is not as per our definition. All the numbers what whenever whatever are provided for PBC are in line with regulatory definition, IHL definition of numerator being in the way regulator combines the IHL without minus any VAS loan or any non-top-up loan or minus that, and the denominator is all total tangible assets of the company.

That is your on the question number 1. On the second side, like I called out just in the previous call as well, acquisition pricing pass-through from the public sector banks or the private sector banks, I think we'll get to know more in next 8, 10 days because the repo hike has happened there.

Normally people wait for each other to move hike. One or two banks have moved by 15 to 20 bps is to in my knowledge, 15 bps, 20 bps.

The broader movement in the market and also older sanctions exhaust, when do they decide in ALCO and when do they move, it will be by 24th, 25th, I think the picture will be clearer in the market. FCNR or no FCNR, I think public sector banks and private sector banks we consider competitive pressure in pricing in prime as a feature, not as a novelty.

Something would keep on happening for the pricing pressure in the prime to be extremely high. That's why we started moving our focus on both while keep on growing prime, but grow Sambhav simultaneously for us to keep on competing in the prime, to keep on delivering the growth what we are delivering, along with that offsetting the margin pressure what keeps on coming from the prime.

So, 14, 16%, 14 to 16% in Q1 to Q2 we have moved in composition of Sambhav, like I was calling out in the previous question, I think by year end we should be close to 20% and then over a medium term, we'll take it to 30% kind of a mix of Sambhav.

Understood. Just one follow-up question.

Basically 50.6% on the ARA, which would imply that we are lower than 50% for individual home loans if we take just pure AUM as the denominator. Is that a fair understanding?

Can be. Because it is PBC is on

AUM mix, Shubhranshu, we are at 53.9%.

No,

no. That is that

is total home loan. That is not IHL.

Shubhranshu, you are right. Shubhranshu, you are right.

Home loan AUM is 54%, but IHL AUM is not calculated. If I go by the larger mix of the assigned-out assets are non-HL, which is a purpose of our assignment out because home loan growth during last five, six quarters has been lagging the company growth, at a AUM level, it would not be 50% or slightly tad below 50%.

Because assignment out largely in last six quarters has been only non-home loan assets. The measurement or the regulatory measurement is only AR.

You are asking a question which is outside the regulatory definition. AUM is assign-out is a strategy what we have always followed and we had always called out to maintain PBC.

Right. In this individual home loan, we used to call out what is a top-up loans as well, right?

Does

individual home loan, Shubhranshu, as a regulatory definition doesn't have anything other than money paid purely for buying of home. Understood.

Understood.

No top-up, no fees, no VAS, nothing. That is why if I have to look at a AR level, home loans is 58% at a AR level.

Understood.

But 58% translates to IHL of 50.6% because everything else is stripped out when the regulatory definition of IHL is applied. Understood.

Understood. This was very helpful, Atul.

Thank you so much, Gaurav. I'll take the rest of the questions offline.

Thanks.

Thanks.

Thanks, Shubhranshu.

Hello. Am I audible?

You are audible,

You are audible, yeah. Yes, please go ahead.

Sir, thank you for taking my question. Couple of questions.

First, on the fee income side, sir, we have seen a sharp uptick in fee income in this quarter. Just wanted to understand, maybe we are seeing a pick-up in Sambhav loans, which could have a higher fee income.

Is this the reason or something else? How we see fee income panning out as a proportion in the ROA tree going forward?

That is one. Secondly, sir, can you please call off your incremental rates in NCD as well as the bank borrowing and how you are seeing the benefit?

I think NCDs are currently lower price as compared to bank, or could you please elaborate on this?

Second question I'll answer, Gaurav, and then I'll request Gaurav to answer the first part, which is incremental rate in NCD, which we last did it on, I think, before the policy, one day before the policy on there at 10-year money, post-hedging was costing at around 7.04 for us. That was the incremental post-policy after 6th, because the last issuance what we did was on a 6th.

Post that, we have not borrowed anything, and I don't think after policy, we have borrowed anything from the bank as well. Pre-policy, the NCD money was cheaper than the bank.

That is where when you look at the mix of the borrowing or the treasury mix, in last one year, you will see sharp uptick in the NCD borrowing versus a bank borrowing line, which has gone down. The bank borrowing had been lower focus for last six to nine months, because I think post-January, post-January, February, money market had been more cheaper and a longer money available for us to borrow.

On the fee income, I'll request Gaurav to.

Yeah. Fee income predominantly is higher because of higher insurance income, and also this quarter we had some higher foreclosure income.

These are the two reasons why fee and commission line is higher. Insurance, again, as Sambhav loans are growing, the attachment rates are higher there.

That's the reason along with the disbursement and AUM growth there. So, 25% growth in disbursements, but also because of higher contribution coming from Sambhav loan.

Got it, sir. Very helpful.

Thank you so much.

Yeah. Good evening, sir.

Thank you for taking my question. Just to understand this interest rate and the margin line better, Atul sir, you've been saying, right, that we will maybe get to know after 24th, 25th what are the other peers and largely banks doing.

I'm guessing you're talking about the newer originations, right? Right.

Correct. Correct.

Correct. Okay.

What is it that they're planning to do?

See, portfolio we have to reprice in line with our cost of fund movement. Portfolio repricing is in line with the cost of fund movement.

For the acquisition, what I called out in the first question was that portfolio price through pass-through will be there in line with the cost of fund. What can cause a margin compression further is if acquisition pricing doesn't move and it can cause a bit of additional attrition pressure if acquisition pricing in the market doesn't move in line with the rate movement.

That's what I exactly called out.

Right. Which essentially means that till now, we have not made any PLR changes?

No, we have so

there is a 25% to 30% of the book which is our link to repo. That will get reset at the reset date,

which

typically 7 days after repo policy date is what is our there. For our internal book, which is a FRR book, we have made a 15 bps increase today which will be effective next week.

15 bps increase is done, and the rest of the increase will happen basis there the pass-through in the cost of fund is also on a staggered basis. What is getting through in October and November is getting passed through on the asset side and as what will come through in November and December as liabilities get repriced will get passed on as there.

From a transmission point of view on the assets portfolio, the transmission will be in line with the cost of funds. There will not be any compression in the margin because of the cost of fund movement on portfolio versus pass-through in the portfolio.

Compression, what I talked about, can be if the acquisition price doesn't move in line with the cost of fund movement. Got it.

Got it. This is this is helpful.

This is all I wanted to understand. Thank you so much for taking my question.

Thanks, Abhijit.

Yeah. Hi.

Good evening. Thanks for taking my questions.

Sir, I just wanted to again touch a bit on the interest rate questions. Let's say, in a scenario where cost of funds for us move up and let's say after 20, 30 days, cost of funds move up, but the acquisition rates are still staying low because of whatever reason, led by large banks in the primary mortgage space.

In that case, how will we try to address the trade-off between growth and profitability?

Gaurav, if the COF moves up, like I called out, portfolio pricing moves up. That is in line with whatever COF moves up.

The margins which get crunched, which would be if, let us say, new acquisition pricing from the banks is not moving in line with our COF movement. In that scenario, the balancing has to happen at the company end to maintain overall margin, because in acquisition pricing you have to match or compete with the same larger player.

Then the rebalancing in terms of the acquisition engine that do we accelerate more non-prime or do we accelerate more LAP a bit or we accelerate more construction finance in any case, which you have to. At a company level, there is a margin available, which is what I called out in answer to the first question, saying DF we have gone down in last two quarters, while our sanctions are very healthy, momentum is healthy.

There is an uptick which will at a company level in the margin offset which will come, because the highest margin business today has been least growing in the current first half. That gives us in any case a leeway to offset a bit of a margin pressure if in the prime acquisition pricing doesn't move in line.

Portfolio pricing moves, at best there can be 2, 3 bps kind of a movement here and there if the acquisition pricing doesn't move in line. More impact can come through the higher attrition, which we saw during last year.

Our AUM growth came down to 23% because of the higher attrition. That's why we have not even changed our yearly guidance, 21% to 23% what we have done, while in the quarter one we were 24 and we are as of now 25.

We are yet to see the impact in the market, because acquisition pricing not moving can lead to a higher attrition pressure again largely on the prime housing and some extent LRD, because both of these are most price-sensitive customers. We will just hold our AUM growth forecast to watch out from how does the market play out.

Got it. In this scenario, sir, then the home loan growth will be slightly slower compared to rest of the portfolio and then we'll have to assign out more loans.

Is then that understanding is correct?

That we do on a monthly basis. Home loan non-home loan assets assignment out for last 18, 20 months has been a monthly phenomenon.

Got it. Okay.

The other couple of housekeeping questions. Income on derecognized loans keep dropping every quarter for the last few quarters.

Can I understand that better?

What's happening there?

It's basically quantum of assignment which we do in a particular quarter. Generally, so, this quarter the income is around 40 crores.

Last quarter was 68 crores. That's predominantly driven by lower assignment which we did in this quarter.

It was around 1,400 odd crores of 1,428 crores of assignment which we did in this quarter versus 2,600 odd crores of assignment we did last quarter. Broadly, it is as we have talked about earlier also, we look at PBC and ALM strategies to define how much of assignment we continue to do on a quarterly basis.

That's why it will keep moving. In general, we are in the 11% to 13% corridor always on the off-book side.

Income on derecognized loan also, Gaurav, moves in line with what type of assets you have assigned out. When you assign out LRD assets, the income booking is less compared to when you assign out LAP assets.

There is a bit of a dynamics and how much of an old assigned book has run down also impacts the new income booking, because as the old book run down, you have to write off whatever income you had booked at that time. There are multiple moving pieces.

The asset strategy, the liability strategy remains same that as Gaurav has called out, 11% to 13% of the book will get assigned out and the assignment is a strategy we follow for maintaining PBC, followed by ALM, followed by income booking. Income booking number can change basis of various underlying dynamics, which is the previous book run down, what was the book which has run down, the previous book which has run down in the current quarter, what is the type of a asset which has been assigned out, and what was the acquisition price of that asset.

Because the gap between the acquisition price and the assigned-out price is only what gets booked as an income.

Got it, sir. Thanks for that.

Another housekeeping question is, when I look at the fee-related expenses, and if I, let's say, plot it against the fee income, so, effectively, fee-related expenses divided by fee income, that ratio also keeps dropping. What is driving that reduction there?

Sorry. I'm No, no.

Fee-related expenses is marginal. Those are basically the charges we pay for portfolios we assign.

That's a smaller number. That will continue to remain range-bound.

That won't increase significantly. Fee income is where we continue to see expansion driven by insurance income broadly which drives that line item.

On the income side, expense side won't move significantly, Gaurav.

Got it. Thanks.

Just sorry, the final question. The salary expenses have been increasing quite a bit in last two quarters.

This quarter, it was 19% up year-on-year. Is this clean salary cost or are there any adjustments there as well?

No, this is a salary cost, because since last year, when you look at a Y-o-Y, last one, one and a half year, we had been investing very heavily in Sambhav and our non-top-six market structure, what we had called out last year. You will keep on seeing a bit of a salary cost increase going up Y-o-Y even for next four quarters, because as we are building out the businesses, which is on the Sambhav side, it's a manpower-intensive business.

There is no other one-timer adjustment or a catch-up, nothing.

It's basically with the increase in headcounts effectively.

Increase in headcount, increase in expenses related to the manpower, the senior teams which have coming on board. Y-o-Y will always be So, in next one year, I think after that, it will stabilize at a Y-o-Y basis.

Because when you look at a Y-o-Y, the previous quarter is the previous year doesn't have a full 100% impact, of the people who come on board. For these, like we had called out earlier, this year, we'll continue to invest deep in the near prime and top six plus.

Next year, we'll still continue to invest very deeply in affordable. So, 1.5 saal aapko ye number upar dikhta rahega, Gaurav.

Perfect, sir. Theek hai.

Thank you so much.

Thanks.

Yeah. Hi, sir.

Congrats on a good set of numbers. Just two things, sir.

One around this interest rate cycle, right? Historically have you guys seen any correlation between housing demand during rising rate cycle?

Hi, Renish. First answer, I think it is simpler.

The housing sale in the country was highest in calendar year '24, where the interest rate was highest in the recent six, seven years.

Okay.

Housing demand had been a bit sluggish in '25, '26, when the disbursements grew in industry at a 1% or a close to 0%, when the interest rates were cut significantly. I believe housing demand is a core demand or a core need.

It is driven more less of interest rate because every customer understands it's a variable rate. Today you don't buy a house because interest rate is low, because you know during the currency of the loan, the rate can go up or rate can go down.

At least the evolved buyer or largely the segment of the customer we deal with understand that very well. It is largely driven from the expectation of a real estate price hike where the home loan demand or a housing demand moves up or down.

If you're not expecting the prices to go up, you will always see it sluggish, irrespective of the interest rate cycle. If the market expectation is that house prices will go up, the person will want to lock in today rather than wait for the perfect interest rate of a 50 bps or a 75 bps for him to go and buy a house, because a pricing differential can be very high by the time he wants to buy the house.

Interest rate movement, to my understanding or to my whatever we have seen over the year, is largely linked to home price expectation, not home loan prices.

Got it. Got it.

You're saying the demand elasticity is higher with asset price than the interest rate.

Expectation of asset price inflation or not.

Got it. Got it.

Just related to that, do have also seen any correlation between, let us say, the higher repayment rate when interest rates are going up or that also doesn't change the customer behavior?

The higher repayment rate comes through the BT in any interest rate destabilized environment, whether rates are going down or rates are going up. They remain lower only when the interest rates are stable over a longer period.

Any interest rate cycle, whether up or down, will see always higher repayment rate because of a balance transfer. Now, if I have to give you an example basis of bureau data, you'll see quarter one of the current financial year, home loan industry disbursements growth is 18%, where basis RBI data, home loan AUM growth is 10% in industry.

Now that tells you that it is largely balance transfer which is moving the needle. The repayment rate of a customer themselves paying down or going up or down doesn't move in correlation to the interest rate cycle, because that is again not there.

The BT-out rates move in any interest rate destabilization or a non-stable phase.

Got it. Got it.

I'm just trying to understand, let us say, if customers start anticipating rates to go up, then rather they prepay loans and lowering their EMI. I'm just trying to understand from that perspective.

In the home loan, what we have seen a consistent trend, even when the let us say last year the interest rates were the lowest, the part prepayment rates were highest last year for us in our portfolio. Because customers will pay you the part payment whatever surplus they have, irrespective of the interest rate.

Interest rate for a home ownership and a home loan pay down or a home loan take-up, largely I have not seen it related to the interest rate, because given the variability of the interest rate. Where the interest rate will be lower in the industry when even the income generation also is lower, and customer first wants to pay off the home loan, irrespective whether home loans rates are higher or lower.

That's why behavioral maturities of a home loans always remain far lower than whatever the booking tenors are there, because the priority of Indian customer at least we have always seen to pay down home loans faster, much faster, irrespective of the interest rate scenario.

Got it. Got it.

No, this is very helpful. Just the last keeping question maybe to Gaurav.

What is the floating and fixed rate asset liability mix for us?

It is I think I called out in the earlier question, 88% is both asset and the liability side.

Asset and the liability side. I just missed our commentary on the PLR hike.

Have we hiked PLR rate in the month of October after the repo rate hike?

Yeah, 15 bps.

15 bps. Okay.

Okay. Which is being effective next week,

which will be effective. The decision has been taken by ALCO.

Effective will be later.

Okay.

Being effective today.

Got it. 16th.

The floating rate assets, this assets are linked to what? Is it linked to the PLR or is it linked to the external benchmark or it is mixed?

20 so,

25%, 30% of the assets are linked to the repo, and balance are linked to the internal floating interest rate, floating rate.

Which is obviously linked to PLR.

Yeah.

So, 20 you can say so

from the asset side, out of the 88% assets, largely 54%, 54% of the total, which will mean 60%, 62% of the floating-rate assets are linked to PLR, balance are linked to external benchmark.

Got it. What is the borrowing which is linked to EBLR, the repo or T-bill?

Largely other than 2%, 2.5%, other than 2%, 2.5%, everything is EBLR for us.

Got it. Okay.

This is very helpful, sir. Thank you and best of luck.

Thank you, Renish.

Hi. Good evening.

Am I audible?

Raghav. It will be better if you can speak a bit closer or louder.

You are audible, but we'll have to strain our ears.

Is this better now?

This is much better. This is much better.

Okay. I was looking at your Sambhav portfolio.

You are saying that it's 16% of the total acquisition in home loans. Is this in terms of value or volume?

In value. Value.

Mortgage is a value activity, Raghav. Any number we give is in value.

Count me so this will be much more.

Sure. See, I think last quarter, the Sambhav acquisition mix was 14% in HL.

Now, when I try to back-calculate the total HL acquisition, there is a decline in this quarter. This quarter, I think the HL acquisition is 9,500 crores.

Last quarter, it was 9,800 crores. What is the reason for the HL originations or acquisition declining quarter-on-quarter?

Then in such a scenario, how do you really pass on the interest rates to the customer when the demand is sort of weak, or even when you look at the real estate data, the demand is a bit soft. I just wanted to understand that bit.

We don't read too much in a quarter-on-quarter some this thing, because that at a Y-o-Y level, because the quarter-on-quarter there are movements which will always happen because depending upon the season, kab kya season aaya. Pichle September mein agar Shradh aa gaya to thoda sa home loan ka disbursement prime segment thoda niche ho jata hai.

Y-o-Y, I think home loan overall aggregate disbursements growth remain strong. That's why you see the 22% AUM growth, which is after a long time in home loan we had a 22% AUM growth.

The disbursement absolute number Y-o-Y is less relevant, largely relevant is a AUM growth. Now, AUM growth can happen because of a two factor: either the disbursements keep on growing very fast, which was last year.

Last year, disbursements were growing very fast, but the attrition was growing faster. It was not there.

If the quarter two, the attrition was a bit softer and the disbursements were also a bit softer because of a seasonality impact to a certain extent, but AUM growth was fine. We home loans and any other business in mortgage, we largely track on AUM growth rather than on a disbursement.

Disbursements we quote as a one time in the commentary quarter update when we give, because there are a lot of questions which were always coming on the investor calls on the disbursements, while internally as a company, the only metric we track, whether for business performance or anything, is a AUM growth.

Understood. This number in HL, which I think you for the industry said is up 18% Y-o-Y, how much was the growth for you?

When I look at this 9,500 crore number in HL, how is this versus, say, second quarter of last year?

Just one minute. I'll have to take Y-o-Y disbursements growth HL in quarter-on-quarter.

Like I said that since we don't track this on a daily basis, but we'll have the number. I'll find that number.

If you have another question, you can ask by that time Ravi.

Yeah. I just have one more question.

So, 28 lakh ticket size, is that on portfolio as in AUM, or is that the disbursement ticket size?

Through the door. Through the door.

Okay. It is through the door.

Acquisition. Acquisition in year.

Understood. Okay.

Okay. Understood.

Sure. That's all from my side.

Thank you.

A home loan disbursement growth is 24% Y-o-Y.

Understood. People.

Which is in line with overall company disbursement growth, 25%.

Sure.

No, I'm good. Thank you.

Hi. Thanks for taking my question.

You gave a guidance last quarter, your management assessment for 2027. Would you want to revise it, especially in the backdrop of NIM expansion this quarter?

Hi, Nischint. Nishant, we will not revise the guidance as of now, because there are a bit of a moving pieces.

AUM growth is much faster than the guidance, if that is what you are referring to. Like I called out in two questions earlier, we are yet to watch out what is the interest rate change regime does to the acquisition pricing, because in the acquisition pricing, if it doesn't move in line with the portfolio pricing, we can see again a elevated attrition pressure, which can result into again AUM growth moving down.

In terms of a margin, what we called out around 25 bps kind of a NIM compression, as of today our calculation would be that we should be in that broadly the range even if we stress-test it to a certain extent of a acquisition pricing not growing in line with cost to the extent of only it grows 60%, 70%, then 1, 2 bps further can be the NTI pressure. Basis the moving pieces and basis since the interest rate first hike has just happened and we don't know the future scenarios, we would desist from revising the growth estimates what we have given, because there are two moving pieces.

Volume can be lower because if, let us say, larger pressure players do not flow through in the acquisition prices, and the BT pressure can be higher, which can lead to 25% going down to 22%, 23%, I'm not saying this is what is going to happen, but we don't know how it will play out, because last year we had seen that higher BT-out result had resulted into 2%, 3% of a suppression of AUM growth. That's why AUM growth not being there.

On the margins, we are largely, we gave a 2.1 to 2.3% kind of a ROA range. We are at 2.2%.

Broadly here and there is what our estimate would be as of now. There can be 2, 3 bps of additional compression, which can be if the acquisition pricing pressure is much more severe.

I think it doesn't call for us to revise the guidance as of today. Okay.

Broadly, your guidance of 20, 25 basis margin compression for the year, which obviously means fair amount of heavy lifting in the second half of the year, probably much more than 25, 30, 40 basis points on a sequential basis. I think, what that essentially bakes in is that the acquisition pricing doesn't really live up to the pace at which the benchmark rates are going up.

I think that's what broadly we are trying to indicate.

17 bps 17 bps of a drop has already happened in the year versus last year, if you have to take out of 25 bps what we said. So, 17 bps has happened, and as we keep on seeing there is a moderation in the portfolio yield because the new through the door versus what goes out has been lower.

Now, the spread was able to held back in the Q2. It is a one-time impact, which we said, because of a COF drop was higher.

As we factor in from here onward, because asset and liabilities are perfectly balanced at 88, 88 there, there is no protection additionally in the margin compression will come through the liability movement. Natural compression which will keep on happening because of a newer assets being lower priced than the older asset and the attriting assets being higher priced than the coming-in assets will mean that 25 bps will happen.

It is not being a conservative assessment, Nishant, if I have to say that. In fact, I'm calling out 1 or 2 bps further hit can be there in case the acquisition pricing pressure is significant.

Got it. Yeah.

I know. I understood that.

That's very clear. Just one thing, this 20 basis points reduction in cost of borrowing.

This is a one-off impact or is it something which is now the starting point for the next quarter?

This is starting point. This is a one-time impact which is there, which was because of a one of maturity of certain high-priced earlier borrowings which happened and the substitution happened at a lower rate.

Second, a bit of a vast book, old book also we converted through to a floating. Part of it was due to that.

Part of it is because of a change strategy of not In the last one quarter, we largely were in the money market and converting it there rather than borrowing through the bank, which were a bit higher price. This would be the base for any trajectory movement up.

Quarter three trajectory will be up, because one repo hike has already happened. If December hike also happens, it should be there.

What we estimate if there are three hikes, let us say between October, December, February, it's just a hypothetical scenario. We should see increase in cost from now to exit around 61 bps.

I called out around 80% of the repo hike should flow through the COF. If 20 every 25 bps, around 20 bps should flow through the COF, which will be what will flow through the portfolio as well on the asset side.

Got it. So, 7%, exit September could probably be 7 7.6% exit March assuming the 25, 25, 25 hike.

That's what I think you're trying to say.

Yes. Yes, yes.

So, 75

bps would

result into 61, 62. It doesn't factor in the new marginal cost of borrowing.

So, 2, 3 paisa plus minuses can be there because of the new borrowing which will come. We are talking of the portfolio through the portfolio impact.

The addition new borrowing, it will depend upon the market scenario, how's the market scenario, how's the new borrowings available. That will be a minor impact on the overall cost of fund.

Major impact is on the portfolio flow-through from the repo hike, which will be 60, 61 bps if there are three hikes.

Perfect. Got it.

Thank you very much and all the best.

Thanks, Nishant.

Hi. Thanks for taking my follow-up question.

I only wanted to understand what is the incremental loan yield today, pre the rate hike, which was at 8, 8.1 last quarter? Just want to understand where is that number today?

Gaurav, pre-hike?

8.1. Pre-hike to now.

No,

no, pre-hike the incremental loan hike yield was

Incremental loan.

Q2 versus Q1.

It was similar at 8, 8.1 corridor. Okay.

Okay. Got it.

Far we haven't taken a call on the new acquisition rate,

then I guess That has gone into effect from today, because the PLR hike has happened today. The new pricing also has gone into effect from today.

Okay. That's another 15 basis points.

Close to 15 to 20 bps. On the new acquisition, portfolio is 15.

New acquisition is between 15, 20, and we'll recalibrate it as we see the market how does they move.

Got it, sir. Okay.

Thank you so much.

Thank you all very much for being on the call and giving us a patient listening. Thank you from my side and all the management team to Ajit and all the participants on the call.

Thank you.