Thank you, Leo. Good evening, everyone.

Welcome to the quarter one FY '27 earnings call of Mahindra Finance. To discuss the results, we have with us Mr.

Raul Rebello, MD and CEO, and Mr. [Pradeep?]

, Chief Financial Officer. I would now like to hand over the call to Mr.

Rebello for his opening remarks, post which we will open the floor for Q&A. Over to you, sir.

Thank you, Pradeep, and good evening, everyone. Thank you for joining us for our Q1 FY '27 earnings call.

As always, I would request you to keep the, the result updates which we posted on the exchanges earlier in the afternoon/evening handy. I will be referring to pages in the documents as I walk you through the key updates for the quarter.

Let's move to page number 4 first. I have outlined what we think are the key reflections for quarter one.

We've been for a while now talking about what in our definition is pivoting back to growth for the core business as well as the new engines for growth, and in reflection, I would say we're quite pleased to see our core businesses, our wheels business, whether it's the PV business, tractor, parts of the CV segments, three-wheeler business come back in terms of growth, which is clocked at a 20%. Our new engines for growth, which was SME business, PL, and what's not on this page is the housing business has also had a reasonably good quarter, which gives us confidence on the investments that we've made in the past starting to bear fruit.

On the asset quality side, I would be a little more generous on our comments here. I think it's, we've been, we are reminded that these numbers in Q1, and all of you would be aware that Q1 usually sees some element of seasonality.

We've been able to handle that and overcome an extreme divergence from Q4 or Q1, and our GS3 plus GS2 plus GS3 numbers are at an eight-year low now at GS3 at 3.47 and GS2 plus GS3 at 8.3, which has had a direct impact on my last comment on profitability. If you look at the credit cost at 1.5 for the quarter has also lent itself towards making sure that the ROA numbers are extremely formidable for the quarter at 2.4%.

All in all, the standalone numbers on profitability have delivered a 70% YoY growth. Quickly moving to the continuation on reflections for the quarter, page number 5.

Our NIM numbers saw some stress, the fiscal end of fiscal '24 and '25, and we have been actively looking at the product composition, actively looking at pricing, as well as fee-based income and other initiatives to augment our NIMs. I must also mention that we have been benefited by a COF also leading to last year's right issue adding to the mix to see that NIM number move up towards a zone which we think is the right place it should be.

Anything above 7, 7.1 should be the medium-term number that we're chasing. In terms of, I won't go back to GS2 plus GS3, but if you look at what the page illustrates versus last year, these numbers are coming at a much lower level.

The collection teams have for the quarter been very diligent in making sure that early bucket collections are rendered at a very positive clip. At the same time, we have seen even reversals, play out well from a collection standpoint.

All in all, the AUM growth was at a 13%. Now moving to page number 6.

I'd like to spend some time on this page. In our past interactions, many of you have asked us about how do we how do we see a more resilient Mahindra Finance from a long-term from a participation of various underlying asset categories, and we mentioned the cornerstone for that would be a diversified, a more diversified asset base.

If you go back three fiscals, the pie chart that you see or the 83%, 17% was a very different. It would be mostly plastered with with the wheels AUM.

We're seeing a sequential, good diversification now kick in from the lending franchise having a non-wheels composition. We see this increase over a period of time, not by reducing, the growth in the wheels business, which I wanted to illustrate at a 20% growth, but the real, augmenting of growth will happen from the non-wheels business, which is now growing at a reasonable clip.

We demonstrated a 79% growth across the non-wheels business, which is largely the SME business, the mortgage business, and the PL business that we do on our existing Mahindra franchise. That's the highlight that the diversification is starting to play out, secular growth across vehicle categories, as well as augmented accelerated growth in the new engines of growth.

On the right side of the panel, what you'd see is what we are very encouraged to see, our subsidiaries. We don't actively in the call talk about our subsidiaries, but these are starting to meaningfully now throw up quarterly profit numbers.

The housing finance company, very strong PAT growth, 30 crores posted for the quarter. Our insurance broking business, which does open architecture insurance, motor, life, health, extremely formidable growth, 83% YoY PAT growth.

A relatively newer business, 5.5, 6 years into the offing, the AMC business, also starting to now show some good signs of growth as well as profitability. I'm picking up a bit of pace right now.

On on page number 8, just deep diving into the underlying asset categories of growth. I've mentioned we've seen pretty secular growth across asset categories, but what I would call out here is our jaw of market leadership in the tractor business is starting to even widen.

We have made very, very significant investments in distribution, in partnerships at various dealer counters, and that's starting to bear fruit in terms of a very high share in tractor growth. You'd have seen the FADA numbers that came out earlier in the month.

Rural is growing at a faster clip compared to urban in PV business. That's giving us some tailwinds, and we're seeing some of that also add to the commerce of our YoY growth.

SME at 30% is a is is a reasonable growth. We actually have a desire to grow at a higher clip.

The others, which is a combination of PL, implements, etc., then again a decent clip of 77%. Moving quickly to page number 9.

Here you'd be able to appreciate the seasonal volatility that I was talking about earlier. We've been able to contain that.

I'm not saying that our business doesn't have seasonality. What I'm basically amplifying here is our ability to manage within seasonal variations is improving.

We have a handle on variables that we think we can influence to a larger extent. This 41 bps which we saw last fiscal movement between Q4 and Q1 has been reduced in GS2 to only 11.

The GS3 has also come down from 16 to 4. On absolute basis, basically, if you'd see, June to June, it's 100 bps, close to 100 bps decrease in GS2 and close to a 40 bps decrease in in GS3 numbers, right?

With credit cost pretty much falling from last quarter of 1.94 to 1.5. Overall, seasonal volatility being addressed.

YoY also stock of GS3 reducing. I know many of you do at the back end gross slippages.

If you look at that number also, we have we've significantly reversed the trend on our Q1 numbers. Moving to page 10.

I had called out last time with the clouds that were which were over us in terms of the West Asia crisis with with the some of the ambiguity that was already starting to set in at the onset of Q4 with El Niño and and the commentary on on a possibly compromised monsoon. We decided to be prudent and increase our traditional liquidity buffers to an extent that you see a close to 5,500 crores.

That does have a drag. It has a the existing a departure from the normal quantum of liquidity buffer does have a drag, but we we thought that's the most prudent thing to do.

The second prudent activity was in terms of of the coverage. We took two overlays, one in Q3 and one in Q4, and that's why you see the PCR number at the level they are at 58.1 for the quarter ending for Q1 of this fiscal.

Moving to page 11. This is a page which gives you a good appreciation of the, the DuPont of how independently things are moving.

The big call-outs are here. If you see the ROA expansion, there is a cost of, there are many things moving, but the significant ones are cost of funds and credit costs.

Those are two big ones over there which have rendered a stronger ROA of 2.4. Moving to consolidated financials on page number 12.

While core PAT moved at 70% YoY, I did in my passing commentary talk about our subsidiaries meaningfully adding to the to the mix now. At a consol basis also, we have grown very well, 75% YoY, 927 crores.

There are pages which we basically talk about the franchise, but I will skip most of them and come to to one of the capabilities that like most formidable franchises are building in the AI muscle. I'm moving to page number 17.

For us, Mahindra Finance took a little time to even climb the maturity curve on digital. That was our first first agenda to the first bridge to cross.

We were speaking to most of you, and I'm happy that some of you joined us in our field trips to dealership locations, to our CPCs. I know many of you asked us, and happy to give you, any of if some of the analysts have written to to Urmi and team to facilitate more such field visits to appreciate what we have done over the last two years on climbing the graph on our digital maturity, which we call as the Udaan stack.

I'm happy to tell, to share with you that it's now 100%. Our entire wheels business is done on the phygital/digital stack, which means that productivity, you'd see we're not adding too many manpower.

For the last two, three years, our manpower count has remained flatish, but we are able to squeeze in much higher clips in terms of productivity, which is largely augmented from the Udaan, which is the phygital digital stack. 100% of our disbursements, close to 15,000 crores done in Q1 was on the new stack, which is the LOS of Salesforce, the LMS of FinnOne, and the the, the APIs we have with various other you know kind of toolkits, whether it is the ULI based, whether it is account aggregator, etc., all that coming to bear.

Now the next frontier for us was AI, but AI, we didn't want to get lost in the in the woods. We have a very strong definition of what AI will lift for the franchise, defined on three pillars of customer acquisition, operations, resilient operations, and efficient collections.

On acquisition, we have a a dollar value rupee value target that we're chasing through digital and AI-led acquisition. We're already seeing in Q1, and we talked about it in Q4, a 25% lower cost of acquisition from these channels which are starting to bear.

On operations, we're seeing file cost come down because we've increased our in-house AI agent, which we have coined as samur.ai, now covering from 20% where we gave the last update of our CPC operations which are agentic in nature, that's climbed very quickly to 45%, and we will see much higher coverage in the foreseeable future. On collections, which is again AI-augmented collections from workflow standpoint, whether it is 12 AI vernacular bots that call our customers to remind, whether it is STP, what we have penal charges being collected through AI bots, which once the call is done, tuck in a a WhatsApp payment link.

We're seeing very very strong, rupee value benefits from the collection standpoint. More importantly, this is rendering into some of the forward flow numbers which are coming in much lower.

Our AI vernacular bots coverage has gone up to 20%, and you'll see a much higher clip going forward. My last slide is on page 19.

This is not a new slide. Guys, we've been, I think for the last four quarters, this is what keeps us honest on a daily basis, very key priorities that is cascaded to the length and breadth of the organization.

We have four big themes: defend and grow wheels leadership, which is starting to play out as you saw in the numbers; we have mortgages, SME, leasing, and fee income as a big theme, that's also starting to show in in the NIM profile; we have margin focus, which is also seeing across various asset categories, as I said, most of my business heads now speak only ROA language rather than, just business growth; risk has been, swapped in to by the CRO's office, by the collection head, we're seeing all the investments that we have done in the in the control function play out. Overall, the north star for us is to have a very resilient franchise, ticking all boxes in terms of, very efficient toolkits swapped in from the traditional, moving from only the traditional underwriting to smart underwriting and sales, using the best-in-class digital data levers for overall business and controls to finally see an ROA, ROE outcome which is in line with what we think are the best in category with ROA now improving to a 2.4 and ROE touching close to a 15% ROE.

We do think the investments that that we've been focused on are starting to bear. With that, I'll I'll end my commentary and hand it back to the moderator for Q&A.

Hi, thanks for taking my question, and congrats for a great set of numbers. I have a few timing questions.

One is on the operating leverage side. We have seen a fair amount of improvement, and going by the digital commentary, I would believe that we would continue to reap some fruits.

Just some color or some texture in terms of how much juice would be left and probably if there is any next leg of CapEx which could be required. Just to get a little bit of a handle of how the operating leverage or operating expense ratios play out.

Thanks, Nishant. See, for our traditional businesses, right, the wheels businesses, you'd already be look at two metrics: one is OpEx to average assets and cost to income.

Both these numbers, for the wheels business, there is delta to squeeze out there. As a growing franchise, we are investing in the new categories, new engines of growth, for which we are not shying away from making incremental investments.

There, the OpEx to average assets for let's say a mortgage business or for the new SME business or for some of the new categories of PL, etc., which we're doing, those will naturally see a higher clip. For the traditional businesses, I am encouraged to see the number from 2.8 sequentially slipped to 2.65 or come down to 2.65.

From a YoY, it's almost dropped 10 bps, right? This is largely the main businesses can see.

I want to attribute some of the investments that we made over the last two years in terms of the Udaan stack, the productivity gains that our frontline officers are seeing have played out. Is there scope for it to dramatically change?

We are in a distributed business, we still do a lot of phygital activity, our customer base is rural, semi-urban, self-employed. We will need to keep that OpEx number at a level.

The way we look at it, we don't want to reduce OpEx that creates a credit cost number for us.

Got it. At a planning stage, can we say that your OpEx growth would be whatever, in line or X percent lower than loan growth or something like that?

Definitely. We look at the jaw between revenue growth and OpEx growth, which will, again, revenue happens with AUM.

That jaw has to widen, for sure.

Got it. Just looking at slide number 24, and I'm looking at the line for end losses.

We've seen good improvement in gross stage 2, 3 loans, but end loss ratio remains sort of range-bound between 1.2 to 1.3. How should one think about it?

Does this number come down, does this come down with a lag, or this is a very comfortable number for us?

See, Nishant, I would stand by my earlier guidance of 1.3 to 1.7 overall credit cost. Sometimes, some quarters you'll see provisions going up, but since our business needs to factor both this, provision as well as end losses, I don't have any new metric to offer than saying that the business model to hit our ROA expectations will operate between the band of 1.3 to 1.7.

Sure. Just one last one on the CV business side.

When do you see the disbursements picking up? Or is this by design that you want to lie low right now?

See,

we've got this question in the past, and I've made this distinction on our participation framework shift for the CV business. We were earlier playing in all facets of HCV, construction equipment, LCV, SCV, MNCV.

We have consciously looked at from a NBFC, as well as someone, let's say, with a cost profile that we have, we are actively reducing some of the earlier HCV, CE business of fleet operators considering the overall ROE attractiveness of that business. I don't need to labor the point that post-COVID, that fleet operator segment has migrated more to the bank supplier base because of the cost of fund attractiveness.

While we've recalibrated growth now in the SCV, LCV, but it will take time to play out on our overall numbers, because we were, let's say, shaving off growth on one segment while increasing, net-net, you're not seeing that number go up. I do think in the next few quarters, you will see how our investments in the SCV, LCV business will add to some of the growth going forward.

Inherently, versus the other categories, CV does have its cyclicality, etc., we do taper our growth aspirations keeping in mind medium cross-cycle ROE objectives.

Got it. Thank you very much and all the best.

Yeah. Thanks for taking the questions, and congratulations for good set of numbers.

Firstly, on the growth side, given this entire diversification strategy, the entire tech stack improving the productivity levels, plus maybe getting equal comfort on the asset quality side, when do we see growth going up? It's reflected in terms of the disbursement, but that's again on a lower base of 1Q.

Would there be acceleration in the disbursements and the growth, and how long would it take for us to get towards maybe the mid-teens to high-teens kind of a level on the AUM side?

Yeah. Hi, Kunal, thanks.

I do take your points that last year was a tale of two halves where H1 was pretty much flat growth and H2 was thanks to GST and a lot of other benefits. Naturally, everyone's benefiting from a lower base of last year, right?

I can only go back to in our Investor Day, we basically talked about how do you think about CAGR growth for the franchise between 26th end and '26 to '31, where I did mention that we are looking at the franchise compound at a 16% to 18% growth, right? Now for the 16% to 18% growth, the core business, which is the mobility business, will have to at a lower end compound at a 12%, and the new businesses will have to compound at a 30% plus.

If you look at what's happening for the last two quarters, we're seeing that play out. For example, even the AUM growth for this quarter, the wheels franchise has compounded at a 11% to 12%, and the non-wheels franchise has started compounding at a 28% to 30%.

That's the clip we would like to maintain going forward to get an overall growth in the corridor of 16% to 18%, right, with the current mix that we have. That's exactly what we had communicated at the group Investor Day, and we stand by that objective.

We know from a categories of growth, we will have to really kind of accelerate on the new engines of growth, and we have made investments, and we are confident with the investments that we've made that we'll be able to hit the accelerated CAGR growth of the non-wheels. For the wheels, we've done this for three decades.

We have made investments also, and thank you for joining us for our field trip. You would have seen some of the core businesses that we invested in through the Udaan stack, etc.

Structurally, the mobility business will definitely see industry, and we are aiming for industry-plus growth across the three-wheeler, four-wheeler, tractor, CV business.

That's what. Maybe on the mobility business, why we are still stuck at that 12% growth after taking so many initiatives?

Wouldn't we see a better growth profile out there, maybe 10, 12 on the low double digit kind of a number? Still appears to be maybe I think slightly modest given the initiatives and the productivity which we are improving.

We saw the entire tech stack. Maybe it's improving the productivity quite a lot all across.

Then why not scale up the core mobility business growth as well?

Kunal, the core mobility business which we track from a FADA lens, from incremental business, in all asset categories, we have gained market share, whether it is the PV business, whether it is the three-wheeler business, whether it's the tractor business. CV, we have not gained market share.

For my appreciation on month-on-month diligence on growth, we look at lender market share, and it's easy for me to get that with the bureau data and the FADA data triangulating that. I can give everyone confidence that if you look at Q1, we have gained incremental market share in all categories except CV categories.

Thank you for the opportunity. Congratulations on a good quarter.

My first question is actually going to be on the ROA target. We've had a very good start to the year, and I understand there is seasonality through the quarters, but 2.1 or 2.15 seems like you're way past that.

Where do we see closing our year, maybe 4Q '27 4Q '27 levels? Second is on the monsoon trends.

This one sort of is a follow-up question to the earlier one that we all know the risk to the deficit of monsoon, etc., but any color on what are you seeing on ground, any kind of changes that you have made to deal with it better other than the overlay that you made?

Hi, Shreya. Am I audible?

Can you hear us now?

Should I repeat my question?

No. I heard the questions.

I just want to know whether we are audible.

You're audible.

Thank you for the question. See, we don't give yearly guidance in terms of ROA.

What we had clearly mentioned in FY '24 is we don't think the franchise is doing merit to its self by operating at a sub-2% ROA. We talked about hitting 2, climbing to 2.2, and then getting eventually to 2.5.

We gave a frame for that. We're happy that we're moving in that direction, right?

We're progressing in that direction, but I'm refraining from giving fiscal year-end ROA numbers. Now moving to your second question on how sustainable are these, what are the kind of proactive measures we're taking in an environment which clearly has clouds in terms of, let's say, the oil disruptions, as well as the El Niño and rainfall.

It might be repeating this, but what we have done proactively is two things. For the book that we already have in the bag, what we think is essential is an extreme level of monitoring and actioning.

We have created an extremely high, sensitive monitoring mechanism where we look at each geography, what are the thresholds of stress points that if they are starting to get breached, we activate Plan B, Plan C, etc. The monitoring of stress, as well as actions in terms of collections, etc., is something that we started very early in this quarter, actually, at the exit of Q4 itself.

Some of that is bearing fruit. We are on an agile basis creating collection squads, etc., which are required in locations where we see any stress points starting to bear, and this is a year which is going to be very early part of the year.

This could keep manifesting in different form factors. We have created the capabilities to over-manage the situation for the existing book.

The playbook for the incremental business is creating high entry barriers for businesses which we think are more vulnerable in this environment, and that's where whether it is in the SME business, whether it's in the mobility business, which is let's say operators, logistic operators, etc., which have a higher level of vulnerability, we have kept higher entry bars, or we've asked for more skin in the game for these kind of customers which are coming through the door. That's the playbook we're following.

I completely agree with you. This is a year where we have to not take for granted how Q1 has rendered itself.

We have to be extremely watchful, and there is no complacency in our franchise, at least in a decent Q1. We think it's extremely pertinent to be 100% on the ball in monitoring portfolios, as well as acquiring new business.

Right. Also the elevated liquidity levels that you've pulled it up to in 1Q, that should stay through the year?

Should we expect the cost of fund, which is a 9 bps or so sequential increase, to play out for the rest of the quarters as well?

I'll hand it over to Pradeep soon, but let me tell you that we're looking at the liquidity buffer on a dynamic basis. We have a very active treasury team.

As we read the cost of funds and the liquidity position, we take calls. If we see that we are entering a new domain of stability, we won't shy away from letting go of some of the additional buffers that we created.

I'll just hand it over to Pradeep to unpack it in detail.

Sure. I think we have seen the geopolitical events play out in quarter one, and I think it's again picked up in the recent past in July as well.

On a cautious side, we as of now continue to carry an additional liquidity buffer of close to 5,000 crore rupees. As and when situation improves and we feel that we need not carry this buffer, accordingly, we'll unwind that buffer.

As far as cost of borrowing is concerned, again, we have seen a fluctuation depending on the expected inflation level basis the crude prices and basis the geopolitical crisis. That fluctuates a lot.

You have seen our quarter one cost of funds going up by equity-adjusted cost of funds going up by 10 basis points compared to Q4. We don't see a steep hike in this kind of cost of funds because these are impacted by the incremental cost of funds and not the entire stock cost of funds.

I think overall, we should be in the ballpark in this kind of range, 10% 10 10 basis point plus/minus here and there. Market will determine as and when we move forward.

Thank you.

Hi. Good evening.

Thanks for the opportunity. Great set of numbers.

First question is around, your strategy around, I would say, the non-wheel as well as the fee income. Regarding mortgage or housing, what's the game plan now?

Are you looking to continue doing this business under that your subsidiary, but kind of a changing the mandate of subsidiary to go more of a universal housing than the kind of a rural or low-ticket housing they are doing? Or you plan to do that, the prime or large-ticket housing or LAP within the the parent organization?

That is the one. Secondly, regarding, the fee income side, one that okay, what's your take on the kind of a the actually the perceived risk or talked risk around IRDAI's probably com- upcoming regulation regulating or limiting certain commission income?

Related to fee income also, you had some time back, maybe a couple of years ago, to kind of a capture the prime vehicle you know borrower market by going into co-lending kind of arrangement with large public sector bank, including I guess SBI. What's the sort of a, a status of that?

Is there something progressing or completely you're out? That's a kind of, the entire question around your non-wheel as well as the fee income.

The second question, more around, asset quality, very, very impressive that, okay, now you have kind of a minimized the volatility and kind of a seasonal particularly seasonal volatility. In terms of the disclosures, would would you kind of a try to give something more of a bit of a lead indicator kind of a, the 12 MOB 30-plus or 90-plus in that 12 MOB data to just get a, idea that okay how the particularly the businesses you have originated, how they are improving particularly from the early the non-starter or early bucket delinquency perspective?

Can you just add this kind of a disclosure probably to provide more of a a bit of a lead indicator or some bit of improvement there? Thanks.

Thanks, four questions in that. I'll take them sequentially.

On the housing front, we had specifically mentioned that both the boards will sit on judgment on this by Q2 of this fiscal. Our priority from an operating team standpoint was to get the mortgage house in order, which we have done.

If you just look at the franchise, I think it's firing on all cylinders in terms of growth. They've pretty much buried the past asset quality concerns and at an employee base which is shaved off and now operating at a very formidable level.

The operating metrics of the housing business, I would say we've crossed that bridge. Key highlights, as I mentioned earlier, they hit a 30 crore PAT, mostly by good set of growth numbers, good set of GS3, slippages, etc., all contained well.

That's on the mortgage side. We do two facets of business there.

We do affordable, which is self-construction and some kind of in our non-metro locations because we are a deep geography player, we get that commerce, and we have started, in a calibrated manner, the prime business, which, on consol basis, we think, on a medium to long term, will be not ROA a drag on the franchise. That's on the housing.

On your comments on insurance, I think we don't see the guidelines yet. We know that something is coming regarding a very prescriptive manner in terms of what commissions are going to be, etc., etc.

I would just say that our insurance income today for both our credit life as well as we've activated even non-credit life, right? Our 1,300 branches now are selling retail products.

What we take most comfort is all the products that we do are extremely good for the customer. There is complete consent.

There is products which are for a customer segment which is fraught with volatility and ambiguity. All the products that we do are anchored in what is absolutely good for the customer.

Throughout all our audits, etc., we have been bracketed as a very responsible provider of all the credit and protection products. We're very confident whatever regulation comes, because our products are very clean.

No hybrid or no ULIPs or no very complicated products, we do very basic products. We don't see a very big departure from the fee-based income which we have swapped into the organization over the last two years.

Your third question on co-lending, the guidelines changed, which meant from January 1, there is only one playbook for co-lending, which is a system-to-system integration. We were doing some business with some banks.

We had to unplug that because of the system readiness. I'm happy to share that we have gone live in the PV business with one bank in this quarter.

The numbers are not material, but we have managed to go live. We do see merit, and we will continue to do AB testing, etc., etc., considering we have an access to commerce, but that commerce may not do benefit to our balance sheet.

We are looking at the best way to partner with like-minded folks who can win-win for the customer's overall pricing expectation. On your last comment on credit cost disclosures, I think we have a fairly decent level of disclosures right now on GS2, GS3, within credit cost, how much is end losses, how much is provisions.

I'll reflect on what you suggested and see whether we need to further amplify some of the disclosure elements over there, and if we think there's merit in doing that, we'll kind of edit the pages accordingly. Thanks.

Hi team. Congrats on the quarter and thanks for taking my question.

Just if I could delve a bit more into what sort of underwriting tightening we are doing in the tractor portfolio specifically with respect to El Niño risks, that would be helpful.

Hi, Piran, thanks for that question. Let me just unpack the tractor customer segment, right?

There is a customer segment which is totally dependent on rural cash flows and agri cash flows. Typically what we do there is we do a half-yearly or a quarterly installment because it reflects into their cash flows.

Then there is a large set of customers which are using the tractor for haulage income as well as partly agriculture or rural cash flows. Our underwriting reflects that.

Our underwriting would largely be relevant what you talked about the El Niño, etc., would be those households or those customer segments whose fortunes are very, very tightly coupled with agri cash flows. There, our underwriting scorecards, as usual, assess what the agri output should be to repay the levels that they are borrowing, whether it's a combination of cash crops, MSP crops.

It's a very detailed tool, and maybe we can spend more time offline giving you more color on that. For this group, let me just say that what we see as an El Niño risk is not just rainfall, but it gets amplified overall by rural and agri cash flows.

Rural and agri cash flows is not very simplistically just what is agri output. It's a combination of mandi arrivals, MSPs, a whole lot of things that underpegs that rural cash flow.

Too early in the day to call, but we have enough experience over the last three decades doing tractor underwriting to know and to, of course, augment the underwriting scorecards to keep the right level of approval rates to also we play on LTVs also, right, Piran? In our customer segment, the more skin in the game, the better buffered we are in terms of the credit cost ultimately playing out.

Got it. For the back book, there's nothing more we can do apart from just say augmenting, monitoring, or collections, etc.,

right?

Again, I'm referring to tractors.

You're bang on. We do want to be the last creditor in the list.

We'll show up first. We always say we are fair, but firm in our collections.

Hi. Thanks for the opportunity, and congrats on good set of numbers, Raul.

Just while most of my questions have been answered, can you just help us delve deeper into what is structurally now driving the market share gains for us in some of the subsegments or rather most of the subsegments of vehicles that we mentioned, right? Like what is the strategy that we have over the last probably couple of years fixed, and how should we think about this going ahead?

Of course, there's some I would say potential risk in this year with regards to growth, but structurally, how would you put it?

Thanks. From the ability to gain incremental market share, the biggest vectors over there are improving channel relevance and being hygienic in terms of customer relevance in terms of TAT, product features, etc.

I think what we have concentrated on for the last few years is we were seeing Mahindra Finance slip on the channel relevance specifically because some of the, let's say, the customer TAT, the ability to respond fast with a time to yes, time to money, all of that stuff was the industry had moved or the finance industry had moved ahead of us, right? Thanks to the investments done through the Udaan stack, etc., and I'll invite you, I don't know whether you were part of the field trip, which saw it in action at the dealership or at our CPC, our ability to scale the time to yes and time to money has gone up, which is rubbing off well on the channel relevance.

That's what I would place as one of the abilities structurally to be the financer of choice to the channel and the customer. I must also mention that versus other financers who basically they come in at festive season, they go out, we are a mobility financer who have very well immersed ourselves in the micro market and that dealer ecosystem.

That's now starting to play out. In the last couple of years, we created a program called Key Account Manager for our dealers where we have looking at dealer relevance holistically from trade advance to inventory funding to retail market share to other abilities to deepen relationships.

Because in this business, while some of the lenders have tried to be extremely cute in their channel relevance and higher indexed on customer relevance, we look at it in a combined manner of channel and customer relevance. All the investments that we have made in a couple of years have, I would say, giving us I don't say we've arrived in life.

We've able to climb our graph on both these relevance point, and that's in some ways giving us what we see incremental market share benefit. With these investments, it's not all done.

We continue to invest. Hopefully, we'll keep our incremental market shares also at a formidable level.

Thank you for that detailed explanation, Raul, and of course, I'll connect with you separately. Just as a follow-up, the second question on that insurance piece that you mentioned, how should we think about it with regards to the MIBL subsidiary that we have?

You're talking about the MIBL?

MIBL. You explained the standalone piece.

Yeah. See, we have a corporate agency license and a broking.

Both have, I would say the playbooks are quite differentiated, Viral. Earlier, I would say, because we didn't have a corporate agency, we couldn't exploit revenue pools that existed, right?

We had to have the broking company in a very inefficient manner sit in our branches, etc., and do captive business. We have created a very significantly clean playbook what the corporate agency will do, and the corporate agency largely does Mahindra Finance ecosystem business, and MIBL does open market business, as well as M&M ecosystem business, which is the first-year vehicle motor insurance business, right?

What we have seen the operating team at MIBL deliver very well is the penetration in the first, second, third year of the motor insurance business in M&M ecosystem, as well as they've gone into two, three other OEMs now, created relevance over there. I think the headroom for MIBL in the motor insurance business, there is still significant juice for us to exploit.

You're already seeing that in the numbers. Q-on-Q, they have grown from PAT 21 to 38.

There's a lot of operating focus in motor and commercial lines. I would like to point out in the MIBL business, it was a one-trick pony, just motor insurance.

Now they're starting to see reinsurance, commercial line business all come in. We've got a very good leadership team there, very good second line of leaders, all staying extremely honest to market share increase for the three, four facets of the broking business that they are set their eyes on.

Hi, good evening, and thanks for taking my question, and congratulations for a very great quarter. Raul, I want to check this credit cost guidance of 1.3 to 1.7 that you've given, implementation of tech, AI, etc., how much of this do you expect to get shaved off?

This range of 1.3 to 1.7, let's say over 3 to 5 years, does it come down by 20 bps, 30 bps? How do you see the efficacy of the AI work that you're doing?

Similar kind of question on the cost side, right? There too, you're doing a lot of tech upgrade and higher growth in new businesses.

When do you see that operating leverage playing out? Related to that is the employee base, specially in your standalone.

That's been around 22,000 people, but at the same time, you're seeing higher disbursements and higher growth. At what point do you need to start adding to that, or do you think you'll have enough efficiencies that employee growth lags AUM growth significantly?

Just trying to get a handle on these three things.

Thanks, Abhishek. See, I just want to at the upfront mention that there is sometimes a perception that AI is this magic wand that can shave off at no cost.

For everyone who's starting to soak in the token cost numbers, we need to look at the trade-off between token cost and human capital cost, right? I just want to make that point.

Maybe many of us got lured into looking at in the honeymoon period of AI not being a big token cost guzzler. We have a very conscious view on what's that trade-off on the OpEx front at least.

By virtue our business, most of our business is not just pushing money through an app to somebody's bank account, right? We're not a very prolific PL open market player.

Our businesses have a leg of assisted journeys. Our businesses do have customer segments who are not all 100% digitally savvy.

We've come down on our own graph of OpEx to average assets, cost to income. We've come down reasonably.

I think this 2 point I've always said been in the 2.5 to 2.7 clip is a business model requirement for us. Anything below that significantly might start showing shades of compromise on the credit cost side.

That's my take on the OpEx side. We will use as many tools.

Please visit our CPC to see where the AI tools, not consuming too much, we look at AI more from an ML and our own open stack models so that we're not guzzling on token cost to augment the efficacy of reducing cost per file, reducing some of the traditional cost of acquisition, etc. Now to your question on whether 1.3 to 1.7 if again, AI will drastically shave that number off, I would still stay with that 1.3 to 1.7 for the business model from a medium And this is, by the way, we all know that our businesses have cyclicality, right?

I've given this range across cycles, because I do believe at the lower ends, we'll be able to augment a lot of the tools to come close to the 1.3 number. We're already at a 1.5.

There could be times when things go south, and that's the 1.7 for those kind of times.

Right. Employees?

Employees, in passing, I did mention, which is that we have come down. We think that Nishant had this point, how do we see ROA expansion?

As I mentioned, my growth in revenue has to outpace growth in OpEx. Growth in OpEx is companies like us have largely two costs, right?

We have people cost and we have branch cost. We will optimize between this to make sure that the jaw of revenue growth versus OpEx growth is optimized.

Congrats for the great set of results. My question was about the gross spreads which have actually come down quarter-on-quarter.

What kind of cost of funds that we should expect going forward? This is again a cost of fund that we're seeing for the average for the quarter.

What was that for the month of June? If it's basically, I think to one of the participant you said that you would want to keep the liquidity on a higher side, given the conflicts and so on.

Basically in that case, that should have a bearing on the overall margins for us for the full year.

I'll give some opening commentary and hand over to Pradeep. See, you're right, the sequential and it's a single-digit number, possibly you're not able to appreciate it in total, but if you just look at the big number that has moved between the quarters, it is the loan income, which has fallen by about 25 bps, right?

Now there's a big attribution of that 25 bps completely to the liquidity buffer, enhanced liquidity buffer of 5,500 crores that we're carrying, right? I don't have a crystal ball to gaze to say that this number will completely get shaved off in next quarter, because it's a dynamic.

We are watching overall liquidity. The treasury team, as I mentioned, does watch the liquidity position to take calls whether we need to slide down on that buffer or keep it.

Far, we believe as a prudent lender, it's always good to on the side of caution. We're keeping a buffer right now.

The minute we see things getting better, that number will get shaved off, and you will see that loan income, the 25 bps which is largely attributed to that, also go down and give us a gross spread which is coming back to a more formidable number. Maybe Pradeep can add more color to that.

I think, again, just Raul has already covered this topic, but this fall in the loan income is not attributable completely towards the negative carry. It's more of a denominator impact.

That point, I just want to clarify over here. Negative carry is there for the extra liquidity, but it's not very tangible enough to run this kind of large businesses to absorb the any sort of unforeseen market dynamics.

From that perspective, I think liquidity drag is not that much. It's more of a denominator impact which is kind of dragging us the loan income in terms of percentage terms.

In terms of COF, if you ask me, I think in the earlier question, I've already replied quarter-on-quarter, when the borrowing rates were elevated throughout the quarter, we have seen a 10 basis point of increase in the COF compared to last quarter. Whether the borrowing rates further goes from here or once the situation normalized, we can see sudden amount of softening in the borrowing rates.

I think these are all market dynamics which play out. Overall, I said that it doesn't impact us largely because we are carrying a stock of borrowings, and incremental borrowings are only get impacted because of the rate situation.

All we are quite comfortable with the current range which we already guided for the year, last quarter also. That's how I can put it, cost of funding.

Thanks. That's helpful.

My second question is on the collection efficiency that's trending well in the first quarter. Do you expect that to continue or basically it should improve further into second quarter?

If yes, whether you would want to unlock the management overlay that you have built in a second quarter or maybe after that once you have a better handle on the overall situation?

I think it's too early to call the second quarter. We are, as I said, we have an enhanced monitoring for making sure that the vulnerability sectors are over-prioritized.

Q1 has played out well. Q2 typically has some kind of disruption in certain categories like tractor, etc., which will be more watched this quarter considering the new curveball that is there.

I don't want to kind of call the Q2 number right now. I can just say that we are making sure that we are equipping the teams to over-manage any disruptions.

Good evening, everyone, and thank you for taking my questions. Congratulations on a good quarter.

Raul, sir, just two questions, and basically clarifications on what you have already shared with us earlier. First, on growth, I think I remember you shared that the wheels business should grow at 11% to 12% and the newer businesses should grow at 30%, which would allow us to deliver a loan CAGR of 16% to 18% over the next five years.

Given where growth is today and expected to pick up gradually, is the understanding right that maybe at the fag end of this five-year range that we're talking about, maybe FY '30, FY '31, we are looking at a growth which should be in excess of 18%, 18% to 20% to get to that 16% to 18% loan CAGR?

Yeah. Abhijit, are you talking about disbursement CAGR or AUM CAGR?

No, I'm talking about the AUM CAGR.

So

16% to 18%.

I would stick to the 16% to 18% range because there is a very strong non-wheels assumption, not assumption, but tucked-in ambition in that. The 16% to 18% is itself quite formidable.

I don't want to kind of put my hat on 18 versus 16 at the moment. Investments have been put in place for all the non-wheels business to grow at a very rapid clip.

Teams are also, the leadership teams in these segments have come in. Channel investments, product investments, all of that are well set and also getting set in new markets.

Just read it as the same 16% to 18% that we had mentioned earlier.

Got it. Basically what we're aspiring towards is a 16% to 18% growth by FY '30, '31.

Is that the right understanding or a CAGR, AUM CAGR of 16% to 18%?

CAGR, yeah. CAGR 16% to 18%.

Got it, sir. Sir, the other clarification I wanted to have is that in this call itself, a couple of times we alluded to this through-cycle credit cost of 1.3% to 1.7%.

Given that 1Q typically used to be that quarter which used to be the most problematic in the past, we have started the first quarter with credit cost of around 1.5%. Plus, you had also built a management overlay in the fourth quarter.

Would you think that this year the credit cost can be closer to the lower end of that guided range on credit cost, or do you think that there still is some risk from El Niño or a relatively weaker monsoon this year in some of your product segments?

Too early, Abhijit, to kind of call the full fiscal. I would say while we are enthused with the way Q1, but we are not taking anything for granted, or we're not in any ways complacent, because See, we are not looking at as easy just because there are overlays that we will kind of consume it on tap and keep the credit cost low.

These are very specific overlays come out, and we don't want to in a convenient way dip into it. That's not the nature in which they're set up also.

I would still say just Yeah, if we continue to execute well, we'll be in the lower end of that range. If too many curveballs come our way, we will but definitely be within that range.

Got it. Then just the last clarification that I had is the housing business, I think you mentioned earlier in the call that one is the affordable piece and then the other one is the prime piece.

I think a few quarters back, you were also toying with that idea of doing housing from the standalone entity, and sometime, I think, you had also submitted a proposal to the board to merge the subsidiary with the standalone entity. Any thoughts on that, or right now the focus will be on doing housing business from MRHFL?

No, we mentioned that the proposal has been taken to both the boards by Q2 of this fiscal. Hopefully, we'll give you an update next quarter.

Hi, thanks. Raul, I had two questions.

Within the 30% guidance that you've given for the businesses, given our housing business is a very small business, the TAM is very large, the underlying asset is secured, can that business not grow at a much higher pace or rate, given the context once we have our system and processes are firmly in place, one? Secondly, I understand that we have adequate or more than adequate capital at this point of time.

In this cycle of five years, when do you think you'll come back to shareholders to ask for capital?

On both the questions, on If you just look at the quarterly growth on mortgages, it's growing at a much higher clip than it's a 100-plus clip. Of course, these are early days, so that will moderate.

I I just look at the mortgage growth adjusted to margins. We have to be careful about that.

It's a it's a it's a business where the headroom for growth is pretty large. We are, like you rightly said, currently under-indexed in terms of where we are, and there is scope with our balance sheet and our ability, cost of funds, etc., to participate.

We will continue growing. The 30% is is more consol non-wheels.

There are categories there which we are, which are, let's say, the SME business, etc., which may not grow at the same clip as mortgages. Consol four-year four-year CAGR is is the number that I talked about 30%.

On the second question, which was, sorry, what was the second question? Other than mortgages?

When will you come back to shareholders seeking capital?

Oh, capital. We are currently pretty comfortable in Tier 1 plus Tier 2.

I think Tier 1 is at 16.5, right? We are way above the regulatory requirement.

I don't see us in the next at least six to eight quarters requiring capital.

The second thing, if you look at, we are still at a debt-equity ratio of 5:1 for the Q1 FY '27, and I think in the early also we have guided very clearly that we have to achieve our desired ROE will quite comfortable levering it to maybe six six-plus kind of debt-equity. That also plays out in deciding when to raise capital.

Hello. Thank you for the opportunity, and congratulations on a strong set of numbers.

Sir, first question is on the underlying portfolio health. If I look at the collection efficiency, it is kind of flat at around 95% is.

At the same time, credit cost and GNPL both have declined on a YoY basis. Just wanted to understand what is the improvement is driven by which factors.

Is it due to better recoveries or lower flow forwards, first on that? Secondly, related question on this would be, have we seen any impact of the recent fuel price hike on the cash flow for operators, or any change in the credit behavior due to the fuel price hike?

That's the first question. One last question on the yield front.

While we have been able to expand NIM, but that has been largely driven by cost of funds benefit, and the momentum now seems to be shifting. Now cost of funds has seen an inch up in this quarter, and yields have also contracted by 10 bps QoQ.

What's the kind of outlook on yield? That's it from my side.

Yeah. Yeah.

See, collection efficiency, the metric is generally the numerator is collections from standard book as well as collection from NPA number divided by total dues, right? That's the way to read collection efficiency, which is stayed in range-bound.

The forward flows, which is your stock of GS2 and GS3, the way to look at that is the flow forward from H1 to H2, H2 to H3, H3 to H4. That is the GS2, GS3 number, right?

You had a question on what is the difference between collection efficiency and stage 2 flow forward, or what was the question?

No, sir, I was trying to understand that collection efficiency has been kind of stable at 95% odd levels YoY. Sir, credit cost and GNPL has seen a sharp decline on a YoY basis.

Just trying to reconcile, what is exactly happening for the decline? Is it lower flow forwards or better recoveries?

Yeah.

Lower flow forwards, and even the backward flow from GS3 to GS2 also is happening at a higher clip. It's a function of both, flow forward as well as backward flow, better backward flow.

Okay. Sure.

Got it. On the margins front, if you could just comment.

Yeah.

Pradeep, you want to take the margin front question?

Margin front, again, I think we clarified that on sequential basis, the contraction which you are referring to in the loan income percentages, that is more of a denominator impact, and it's not the actual yields on quarter-to-quarter basis. That's point number one.

Point number two, again, I think I'm reiterating the fact that even there was a quite a good elevation in the borrowing cost in quarter one compared to last quarter four, we have seen a 10 basis point of increase in the cost of funding. The moment we have a, you can say geopolitical crisis going out of our way, and inflation expectation also coming down, which is largely right now driven because of the crude prices and the expected maybe some anticipated rate hikes in the overseas markets.

The moment those expectations are toned down, we can see a you can say reasonable borrowing market. As such, at least we are not concerned about the steep increase in cost of funding going forward.

Thank you for taking my question and congrats on a good set of numbers. Just wanted to know on tractors, the disbursement numbers were quite strong.

Is there any pre-buying or something, is that playing out for tractors? Also, in terms of the end use, is it shifting more away from say agri to say construction and so on?

Is that also leading to greater uptake in tractor disbursement? See,

tractor typically, if you look at the seasons for tractor, Q1 is a strong season because before kharif, before sowing, there's a natural buying behavior that happens. I would say one of the silver lining of late rains this year was that generally what happens is onset of rains, the tractor purchasing comes to a standstill.

Some of the Q1 volumes that you would have seen, some of the OEMs also talk about, is because in certain geographies delayed rains elongated the Q1 buying cycle, which helped both the OEMs and lenders like us get a higher growth number, right? Which anything which happens in Q1 will have a bearing in Q2, you might see a contracted Q2 because of an accelerated Q1.

That's one reason why we've seen in various geographies a stronger Q1 for tractor. Your second question on whether the mix of haulage versus agri, I'm not seeing a big shift in that.

It's playing out as usual for us. It's no big deviation from the past mix.

Thanks a lot. Thank you for taking my question.

Hi. Thank you, sir, for an opportunity.

I just had one quick question, again, following up on the tractors. I do understand that our share in the group, M&M group, has inched up to 46% since the last two, three quarters.

What would be our share in particularly tractor and PV? Do we expect this share to inch up further?

Just a correction there. Our share in M&M is not 46% only for tractor.

It is an overall business. The 46% that you see in our total assets is a combination of PV, CV, tractor, right, not just tractor, and the three-wheeler business also.

That's the 46%. What was the second question?

Sorry, Meghna, I didn't get that.

The first question was, what is our share in tractor and in PV particularly, because that I kind of understood it is the entire asset base? Do we plan to or do we intend to, say, inch up or finance more vehicles from the group company?

I just want to be fair to our disclosure standards. We don't give that very specific cut on PV, CV, tractor.

All I can say is that the way we approach this business, we look at it as a strategic partner, the group's PV, CV, and tractor business. We do not have any discriminatory scorecards for M&M versus non-M&M.

We don't even use the terminology captive. It's strategic partner.

We have certain programs that we run with them. The kind of synergy that we enjoy is earned.

It is not given for granted. We compete with all other financers, but we do have, over the years, developed a certain amount of synergistic benefits which is not predicated on any lowering of commercial guardrails or credit guardrails, right?

We have grown in market share with all the other OEMs also in the PV, CV business. In the tractor business, considering Swaraj and M&M have such a dominant share, we have, in fact, within the Mahindra Finance business itself created there are two entities actually on the ground, there's the number one and number two.

We have even in the Mahindra Finance tractor division, a M&M and a Swaraj division created to make sure that we have ability to attract on a commercial, margin, ROA accretive basis higher market share in both these franchises. Whenever we think it's right time to give more disclosures on PV, CV, etc., we will think about it.

Right now, just take the 46% that we have put there as the overall wheels partnership that we get from the M&M assets.

Thank you.

Hi, thanks for the opportunity, and good evening. Am I audible?

Yeah.

Okay. Sorry, I joined the call a bit late.

I wanted to ask if you've given your disbursements growth guidance for FY '27 and '28, that's my first question, and then I have one more question.

Raghav, I'm sure you know by now we don't give specific year disbursements guidance. We give overall

Sure. See, I was going through your annual report for '26, and every year, the disclosures are pretty good, and you've disclosed that the number of vehicles financed, those have gone up by 5% year-on-year, while I think the industry growth in terms of autos sold was higher.

That implies that the growth in the number of vehicle finance contracts done by you has been lower versus the industry growth. If you can give me some color as to why you lost that market share or why your growth was lower than what the industry saw in terms of number of cars and PVs sold?

Then when next year, you think about your disbursements growth or AUM growth, how do you think about it because it is quite obvious that the volume growth for the industry will normalize lower, right? It cannot sustain at double digit, it tends to be in single digits maybe between 5% to 10%.

Next year, when the autos growth normalizes for the industry, how do you plan to accelerate your AUM growth in that scenario? That's the question.

Thanks.

Sure. See, since you're referring to last year's number from the annual report, let me just tell you how we think about the unit growth.

This 5% number is what you are referring to is across PV, CV, tractor, used, right?

Because every

category has its own growth. If I were to just give you how we look at the unit growth dimensionalized to the franchise, in the PV business, we would have lost unit growth last year specifically because of the segments that we sit out, right?

The extremely low IRR business which happens from the premiumization playbook. As the PV segment has had a huge premiumization play over the last four to six quarters.

We actively sit out of that very, very low IRR business, and that's the PV unit market share that we have lost. When we look at the entry-level cars, when we look at post-GST reforms that happened with some of the entry-level cars, we have from H2 last year till Q1 of this year gained market share, right?

That's how we look at the PV adjusted to margins and returns. The PV business is growing in a decent clip.

We don't look at overall PV over there. In the CV business, we have gained market share in the SCV, LCV business.

We have lost market share in the HCV business, fleet business, CE business, again a conscious call. In tractor, universally, we have grown significantly higher than industry on unit, and on used, we have kept clip with the market.

We have not lost or gained. We have kept clip with the market.

That's the way to think about the unit growth that you mentioned.

That's very helpful. Then I think the other question that I had was when this industry growth normalizes, the volume growth, how are you thinking about accelerating your AUM growth?

Because you'll need the disbursements growth at that point in time as well.

See, the unit growth will always keep in mind what is the margin-adjusted growth that we are looking at. In the PV business, we are happy to see post October of last year some of the segments which has historically been very inactive come back, right?

That favors us. Even if you look at the FADA numbers for rural PV and rural CV, that's been growing at a higher clip than urban.

All of these are tailwinds for a player like us to beat unit and industry growth. We hope that the rural trends play out, and there will not be too much of disruption, that will augment it well for us.

You may have joined the call late. Some of the PV business which has historically been margin-dilutive for us, but we have access to that commerce, we have done very early days evaluation on co-lending, etc.

How can we not miss that action, but participate in that commerce? We will see some of those instruments, if they play out well, we'll use those instruments to augment the overall growth momentum in the wheels mobility business.

Moderator, this is the last question we'll be able to take, please note that.

Hello, sir. I wanted to understand that so our tractor demand has remained

Prachi, your line is

Hello, am I audible?

Yeah. Okay.

I wanted to understand that tractor demand has remained relatively resilient despite the weather-related concerns or the geopolitical concerns currently. How do you currently assess the demand across your key rural markets, which is going forward?

Any changes you've been seeing in the booking trends or the dealer inquiries in case you've been assessing them?

Yeah. Prachi, I did mention earlier on, we saw a little bit of a Q1 departure from normal trends aided by delayed monsoons.

The buying period got extended. We also saw a tailwind for tractor purchases in Q1 was a form factor of very high rural cash flows because of rabi, mandi arrivals and price discovery.

Where the markets that we've seen strong growth was a resultant of, again, people turn up and buy a tractor when margin money, and margin money is generally a reflection of rural cash flows. Rural cash flows is not just agri, it's agri plus haulage plus plus.

Far, that's been the trend that we have seen. We'll have to see how the rest of the year plays out, right?

As in hopefully, with some of the disruptions being the mitigants for some of the disruptions today. For example, I was reading a report about crop insurance is three times than it was four years back.

Even if there are disruptions on, let's say, price, does that serve as a buffer? We are already talking about the government adding its weight on MSPs.

It's not an oversimplified monsoon that just has a direct impact. There are multiple factors that go into it.

We are watching as a very significant player. We are pretty agile in our practices to respond in a manner which is befitting of how local geography issues play out.

Any regional differences you're seeing in the particular of the states where the rainfall has been normal or is very rainfall-dependent?

No, the departure from normal is higher in states like Rajasthan and MP and Gujarat for now, but too early. Monsoons are still in its first stage, which we hope that things can normalize.

At the same time, it's important to look at state coffers. The states which have better treasuries are more equipped to add their balance sheet to cushion some of these disruptions.

To the credit cost, in case there are disruptions, how do we take a this thing that credit cost can go to what level for us?

Prachi, we don't give asset category credit cost. In the call earlier, I talked about 1.3 to 1.7 being the franchise credit cost bands.

Let me also mention that I'm seeing the OEMs play very responsibly. They are not flooding the dealers with huge inventory.

If you look at the dealer stocking, even tractor, it's a very reasonable level. It's not over.

We don't see any perverse practices in a season which needs to be, all players have to be responsible. The OEMs, the dealers, everyone is following the right practices.

Credit cost from a franchise like us, we have given this guidance, but let me also remind you that we created certain overlays in Q3 and Q4 specifically to take care if things go extremely violently south. We are buffered up to smoothen any disruption.

I don't know whether you're following our overlays that we created. They were created, one of the specific reasons was a possible compromised monsoon.

Thank you, moderator. Thank you, Pradeep and Leo.

Thanks.