Thank you, Rudra. Good evening, everyone, and welcome to the Q3 FY '26 results conference call of Utkarsh Small Finance Bank.

I would like to thank the management for giving us the opportunity to host their call. From the management side, we have Mr.

Govind Singh, Managing Director and CEO; Mr. Sarjukumar Praveen Simaria, Chief Financial Officer; Mr.

Amit Acharya, Chief Risk Officer; Mr. Virender Sharma, Head MicroBanking; and Mr.

Sourav Ghosh, Head Consumer Banking. Now without further ado, I would like to hand over the floor to the MD sir for his opening remarks, post which we can open the floor for questions.

Thank you, and over to you, sir.

Yeah. Thank you, Chintan.

Thanks a lot. Good evening to all of you, and thank you very much for taking time to join us for our quarter three FY '26 earnings call.

This third quarter of FY '26 has been a period of recalibration, resilience, and cautious optimism. The operating environment continues to evolve shaped by regulatory transition under MFIN Guardrail 2.0 and the lingering effects of legacy stress.

While these dynamics have presented near-term challenges, they have also reinforced the importance of discipline, diversification, and forward-looking transformation in our business model. We are navigating through a landscape that demands agility.

The regulatory recalibrations introduced particularly the borrower-level leverage restrictions have reshaped the microfinance ecosystem. These changes while designed to foster long-term resilience have temporarily slowed recovery sentiment and kept overdue accounts elevated.

Yet as we have consistently emphasized, our strategy is not about chasing short-term growth at the expense of stability. It is about building a fundamentally stronger institution, one that can withstand cycles, deliver sustainable returns, and create enduring value for all the stakeholders.

Our approach this quarter has been deliberate. We have chosen stability over speed, quality over quantity, and resilience over short-term expansion.

The same is reflected in the contraction of our JLG portfolio, which declined by approximately 16% during the quarter. While this has contributed to a 3.9% year-on-year reduction in our overall gross loan book, it is a conscious recalibration designed to strengthen collections, moderate risk, and lay the foundation for sustainable growth.

At the same time, we are encouraged by strong performance of our microbanking business loans, MBBL portfolio, which grew by 80% year-on-year and 38% quarter-on-quarter, now represents 19% of our microbanking loan book. This segment targeted at graduating JLG customers with proven repayment discipline has demonstrated superior asset quality and collection efficiency.

With penetration still below 10%, we see significant headroom for expansion, and we expect MBBL to become a cornerstone of our microbanking strategy in the years ahead. Operational discipline has been reinforced through several initiatives.

We have expanded our collection workforce for JLG and MBBL business to nearly 1,300 as on December '25, operationalized a centralized call center for overdue accounts, and split larger microbanking branches to improve oversight. These measures are structural interventions designed to embed resilience at the grassroots level.

Training program for new frontline staff focused on core processes such as center meetings and customer onboarding are ensuring that execution remains consistent and robust, reflected in our improved X-bucket collection efficiency of 99.1% in quarter three FY '26. Beyond microfinance, our non-JLG lending business have maintained healthy momentum, growing by 28% year-on-year and 8% quarter-on-quarter.

MSME loans expanded by 24% year-on-year to ₹4,275 crore supported by our newly started micro LAP segment with disbursement yield of around 18%. Housing loans grew by 13% year-on-year to ₹965 crore, while our BBG, business banking group, portfolio fully secured against immovable collateral grew by 22% year-on-year.

These segments not only diversify our portfolio, but also deliver attractive yields reinforce our pivot towards secured assets. In the CE and CV segment, the loan book contracted by 3% year-on-year to ₹1,102 crore.

However, disbursement yield improved by over 30 basis points rising from 12.5% in quarter three FY '25 to 12.8% 12.5% in quarter three FY '25 to 12.8% in quarter three FY '26. Notably, the share of used vehicles in disbursement increased to 35% to around 35% in quarter three FY '26 from less than 15% a year ago, reflecting our overall strategic pivot towards more resilient and asset classes.

This diversification is not incidental; it is intentional. Our JLG exposure has been consciously moderated to around 33%, and including BC JLG, around 35% of the gross loan book as on December '25 down from nearly 88%, and including BC JLG, 90% in March '20.

Secured lending now comprises 50% 50% of our overall loan book, up from 41% a year ago. This structural shift will eventually lead to a fundamentally stronger bank with less cyclicality in credit cost and multiple avenues for growth beyond JLG loans.

We are seeing healthy traction on cross-sell on both sides, asset products, that is MSME, housing, and micro LAP through our liability-focused general banking branches, and deposit account for our asset customer, essentially more product per customer. This multi-product engagement is enhancing customer stickiness and improving wallet share.

With healthier, diversified portfolio and improved underwriting standards, the bank is getting resilient and is now poised for a better trajectory for the period coming ahead. Through a more disciplined lending approach, we are already focusing on streamlining the portfolio growth.

On the liability front, we delivered 5% year-on-year growth in the total deposits driven by strong traction in retail term deposits, which grew by 24% year-on-year and 3% quarter-on-quarter. Our CASA deposits increased by 16% year-on-year and 3% quarter-on-quarter resulting in an improved CASA plus RTD ratio of 82% as on December '25 from 70% as of December '24, reflecting our conscious effort to reduce reliance on bulk deposits and build a granular, low-cost deposit franchise.

CASA ratio has improved to around 22% as on December '25. In line with RBI repo rate cuts, we have trimmed interest rates for savings as well as for term deposit across various buckets in a phased manner, ensuring a balanced approach to market competitiveness, cost of fund optimization, and overall margin stability.

These calibrated actions have driven a gradual reduction in our overall cost of funds by around 20 20 basis points quarter-on-quarter from 8.3% in quarter two FY '26 to 8.1% in quarter three FY '26, and it is expected to reduce further as repricing takes effect. The bank continued to deepen its liability franchise through focused product segmentation and targeted customer outreach driving penetration in newer, innovative offerings.

The quarter also marked the launch of NRI services, which has delivered encouraging traction within its first month. Alongside product expansion, the bank enhanced service excellence by strengthening digital capabilities to elevate customer experience.

The overall strategy remains centered on improving the quality of account sourcing with stronger emphasis on value-add acquisition and greater product penetration per customer. We are consciously aligning deposit growth with disbursement pace ensuring that liquidity remains prudent and sustainable.

Deposit growth to accelerate in line with revival in disbursement, which has shown a meaningful improvement in quarter three FY '26. This pickup in disbursement is expected to improve the portfolio base in the coming quarter vis-a-vis supporting the stronger deposit trajectory.

Our CD ratio declined to 79% as on December '25 against 92% as on December '24. We ended the quarter with surplus liquidity of approximately ₹4,700 crore, which is higher than our usual liquidity requirement and LCR ratio of 207%.

In terms of risk diversification, we registered with CGFMU for credit guarantee coverage on our eligible JLG and MBBL portfolio with effect from January 17, 2025. Accordingly, incremental JLG and MBBL disbursement from then onwards are getting covered under credit guarantee, which will help de-risk our exposure and support portfolio stability.

Around 35% of our microfinance book for disbursement till quarter two FY '26 is already covered under CGFMU, and counting quarter three FY '26 disbursement, around 50% of microfinance book is covered. We have tightened underwriting and reduced exposure to riskier segments.

MFI stress is moderating aided by calibrated disbursement and improved borrower discipline under new guardrails. Pre-qualified loans to existing customers with no delinquencies are streamlining field operations and exploring innovations across products like unsecured business loans, individual loans, etc., will enable us to gain a higher wallet share of our existing customers with strong repayment track record while preserving credit discipline and robust risk management.

Asset quality remains a critical focus. We believe stress has peaked.

X-bucket collection efficiency in the JLG segment improved to 99% 99.5% in the month of December '25 up from 98.7% in the month of September '25, the highest in three quarters of FY '26. Fresh NPA slippages has reduced significantly during quarter three FY '26 as compared to quarter three FY '25.

These green shoots are indicating that our corrective actions are beginning to take hold. Overall SMA pool have also reduced in quarter three FY '26.

We acknowledge, however, that legacy stress remains and it is still to be provided for. This has kept credit cost elevated and weighed on near-term profitability resulting in a net loss of ₹375 crore for the quarter.

However, we see that fresh NPA accretion are declining meaningfully for the few months with asset quality improving further from quarter four onwards as a consequence of these measures. Despite the losses, our capital adequacy ratio remained strong at 20.1% as on December 31, 2025, comfortably above the regulatory thresholds.

The successful rights issue of ₹950 crore in November '25 has further strengthened our Tier 1 capital base to meet our future capital requirements underscoring investor confidence in our long-term strategy. During the quarter, the filing of petition with NCLT is completed on December 26, 2025, for approval of scheme of amalgamation of holding company into the bank, that is reverse merger.

The first hearing has happened on January 15, 2026, and the order is awaited. Our Utkarsh 20.

2.0 technology transformation project is already delivering benefits in automation, productivity, and risk control. Digital underwriting is helping us avoid lending to over-leveraged borrowers, while 360-degree control parameter mapping is strengthening monitoring across the credit cycle.

These initiatives are not just about efficiency; they are about future readiness. We also recognize the importance of our people.

During the quarter, we incurred a one-time impact of ₹9 crore due to new labor law codes, LTIPs, ESOP grant, etc., pertaining to employee benefits obligations. While this has weighed on near-term profitability, it reflects our commitment to compliance and employee welfare.

Training programs, productivity initiative, and organizational agility remain central to our transformation journey. Looking ahead, FY '26 is shaping up to be a year of strategy recalibration.

We are prioritizing operational efficiency, disciplined execution, and organizational agility. For the next two to three years, the bank targets loan book growth of 25% to 30% with a well-diversified portfolio with secured lending comprising more than 50%.

By the end of FY '28, we aim to maintain a NIM of around 8.5% and deliver an ROE of around about 15% as mentioned in the previous calls also, supported by efficient operations and moderate growth. With sectoral headwinds and regulatory transitions may continue to influence near-term performance, we remain confident in the resilience of our franchise and the strategic direction we have charted for FY '27 and '28.

In conclusion, quarter three FY '26 has been a quarter of challenges, but also of progress. We have moderated risk, strengthened collections, diversified portfolios, and reinforced our capital base.

We are building a bank that is resilient, disciplined, and future-ready. The trajectory we are shaping is one of the sustainable growth and long-term value creation.

We thank you for your continued confidence and support. With this, let us move to question-and-answer session.

Thank you for patient listening.

Am I audible, sir?

Yes, you are audible. Please go ahead.

Thank you very much for this opportunity, sir. Sir, just wanted to understand now on the credit cost, you mentioned though near-term challenges are there, but over the period, you expect improvement and even the stress in MFI book is reducing.

What's the steady-state credit cost we are looking at? How should the credit cost trajectory we look at in coming quarters in fourth quarter and in FY '27?

Hi. This is Sarju here, CFO.

FY '27 and even FY '28, I guess we are looking at around 3% to 3.5% credit cost because we'll have GNPA, NNPA both at a tolerable level. '28 certainly will be under 2.5% of credit cost.

This is part of the measure that led us to believe that with the pain going behind us, we'll be back to ROE of 15% on the back of the NIM of 8.5% and [unclear].

Sorry to interrupt you, sir, but there's a lot of disturbance in the background.

Let me repeat that. Hello.

Please repeat that,

sir. I was saying we are looking at a credit cost of 3% to 3.5% for the coming year.

FY '28, 2.5%?

Yes, that is back in

What about ROE and ROAs, sir, for both of this year,

FY I guess as we mentioned, Govind-ji mentioned that for '28 it's something that we are going to mention the guidance of ROE of around 15%, and that could be again it's a two-year guide, '28 guidance, and ROA of around 1.75%.

That's 15% ROE you're looking at ROA of 1.75%, right?

That's right.

What about next year, FY '27?

FY '27 would be around 10-ish. That's the number we are looking at, which is ROE.

No, I missed that number. Can you just 10

10% ROE.

10% ROE. Okay.

Gradual improvement. We'll be, as I said, '28 will be the back to

normal year. '28 is the normal year that we are looking at, right?

That is right.

Okay.

While '27 also, yes, we are looking for profitability in '27 itself. The trajectory will go back to profitability of good old days at '24 in '28.

Understood, sir. Sure.

I think that's it from my side. All the very best.

Thank you.

Thank you.

Can you articulate the level of CET1 you will be comfortable before you come for next capital raise? Right now it's 17.1% as far from your presentation.

No, it's 20.1%.

Currently, our capital adequacy is 20. 20.1%.

Tier 1 is 17.1%. That's right.

17.1%.

I'm just focusing on Tier 1, it's just 17.1%. Till what level you can go, as you will grow you will consume capital, till what level you can go before you have to raise capital again?

No,

I think at least for next 12 months we don't have to go to market, for capital. This will be because, I mean as you mentioned, worst is over.

We'll, back in the trajectory of profitability in next quarter next I mean quarter one of next year. Capital, some some support for capital will come from there.

Our our estimate is that for next 12 months, we may not we need not go to market for capital.

Do you have in your modeling what's the lowest it will go this Tier 1 in your planning cycle where 12 months you don't need to raise capital, but as you grow you will consume some capital, right?

Typically, overall we will be in the range of 17% to 17.5% from this 20%. That is we don't want to go below that.

Though we don't have any specific number for quarter one, Tier 1, but around 15% of Tier 1 and around 17.5% of overall capital, that is what we intend to be, do not go below that level.

Great. This Tier 1 of ₹2,433 versus your net worth if I look at your balance sheet, what explains the difference if you can just give me broad high-level idea, what items typically creates that difference?

I guess the net worth that you're looking maybe from the financial is the net worth that is RBI computed. There are risk weightage and haircuts out there.

The book net worth is ₹3,000 crore as we speak.

Correct. What are the key major haircuts which as per RBI calculations accounts for it?

That's basically risk weightage by products that goes. There is a formula for each product.

That becomes the reason for haircut. That's the CRR computation by RBI.

Generally, you would have around, say, 70%, 80% of the net worth which will be equal to CRR network.

Got it. Now coming to this slippage component.

Last quarter you had about ₹426 crore of slippages, and now collection efficiencies have materially improved for you. What is that kind of monthly run rate you are currently running at with this 99.5% collection efficiency, but you do have an SMA pool which is about ₹240 crore.

How much is the monthly slippages you are experiencing in December or in January, whichever data you have?

There has been a significant change and positive change. October was little tough month for us and we saw it was almost similar level of quarter two the efficiency.

From November onwards, we have seen a significant improvement in what we called X-bucket or 0 DPD. It has not been below 99.5% in any of these months, say November, December, or January.

That is a range. It is above 99.5% overall.

We have seen a good improvement, and in fact, this quarter, some of the negative impact in terms of stress level or in terms of provisioning or in terms of profitability. Higher impact got because of the October where there are a series of holidays and the collection got little impacted for that particular month because you are aware there are three large festivals were there during that period.

That explains the reason for, you can say little poor October for us. If you look beyond that in terms of overall collections, in terms of disbursement, in terms of X-bucket collections, I think on all parameters things have improved significantly.

As I mentioned, it has not been below 99.5% in any of the periods after that. In fact, January has been even better than that.

We are expecting that we are almost at the normal level of 99.6% plus right now and which continues to be there.

Got it. Do you have a number monthly basis Sorry, go on.

Obviously, the slippages also come down because of that. Some of the numbers if you have look at, if JLG October slippages 1 to 90 was around 370-odd 8 crore, by January it has come down to 163 crore.

You can imagine the numbers have really significantly come down. That is the change we have on consistent basis.

This is JLG 1 to 90 pool you just mentioned?

JLG 1 to 90 pool, yeah.

That has significantly reduced between October and January?

Significantly, significantly. Even 1 to 30 because October we had a challenge, it was almost ₹170 crore.

Now it is below ₹50 crore, actually. Normal course, ₹50 crore, we are able to manage on our day-to-day operations also.

I can use the word near-normal as far as the stress level in JLG is concerned.

Got it. Only then thing you have to take care of is the existing SMA pool or existing net NPA which you need to provide for.

Is that fair?

Existing net NPA you have to take care of that wherever there has been partial provision. I think that is what because these are almost normal numbers for any microfinance institution or any SFB.

Yes, but we need to take care of. Where also we are finding improvements.

Yes, you are absolutely right.

Okay. You also did this ARC sale of few accounts.

Can you explain which pools did they belong to?

Sorry, ARC? No, I think we did previous quarter, not that.

Previous quarter.

Previous quarter.

This quarter, are you able to see any ARC sale? Because

No, nine 9-month only I saw. Maybe this

Yeah. Yeah.

9-month is there. It was done in the previous quarter with an ₹11 crore of income on other income line, which is an realization from sale of SR, security receipt.

Right, right. Which segment these accounts belong to?

Were they retail, wholesale? What were these accounts for?

You sold?

It was one of the NBFC portfolio, Aviom Housing Finance. That was one case and that is where we did one ARC sale.

In the current book you have on this NBFC portfolio, what are your observations in terms of any account which is in the monitoring phase or anything? No, no, our PAR 1 is zero for our NBFC book.

Entire book is on zero PAR. PAR 1, I'm talking PAR 1, not any other PAR.

There's not been single day PAR in any of my NBFC book today.

Is there any rating change in any of these NBFCs?

It keeps on changing.

Any on negative side, not on positive side.

There's one NBFC where they have been downgraded to double B, and except that if you see, by choice we do not increase much of the NBFC portfolio and we are maintaining below 8% for last more than 12 months the entire portfolio. Our portfolio close to 70% is up to rating A and above companies only.

Got it. Which NBFC was that which got downgraded to BB?

TrueCap

was the company.

Okay. Thank you.

Very helpful, and wish you really best.

Thank you. Thank you.

Thank you so much for the opportunity. Now I have some few questions, sir.

My first question was related to our deposit growth actually in this quarter. Our deposit growth sequentially has actually been declined.

What are the reasons for the same, may I know, actually, this very low sequential growth? That was my first question.

Normally in deposit growth, as I mentioned in my initial speech also, because there have been less deployment of money because of de-growth of microfinance, our funds requirement was very, very low. If you see what we did, we have you can say restructured the whole liability business in sense there are more than ₹2,000 crore of institutional term deposit we have repaid and we have not renewed those cases, whereas our retail term deposit and CASA has gone up by almost same amount.

The idea was not to increase because as I mentioned, we are almost more than 4,500 is my liquid cash, as on 31st December. We don't want to increase our deposit base, but we are changing the mix of deposit from institutional to retail, in fact.

That is what we have done during this period.

Sir, you have borrowed more ₹400 crore, sir, in the quarter sequentially, if you see. I understand that because of the lack of asset growth, the deposit growth is very tepid.

I understand that point. Then what was the need for incremental borrowing sequentially, actually over ₹400 crore, ₹420 ₹414 crore to be precise?

I'll just check, but this must be some treasury transaction, made on the balance sheet date. Otherwise, we are not into borrowing at all.

That's must be some transaction done by treasury for you can say some counter transaction. Maybe give me a few minutes, I think I'll be able to respond to that also.

We are not into borrowing at all. In fact, not today, for few years now, we have not borrowed anything in the market.

It might be some transaction, bilateral transaction on those one or two days, that is the only reason, might for one day or two days. Otherwise, we don't require this at all.

I got your point on that. You can give the clarity later.

Actually, because that will have a negative bearing on the cost of funds. That was my concern.

Now my second question is what is the GNPA and PCR on our JLG and our CV portfolio?

On JLG portfolio, our overall PCR stands around 68.5%. On CV, CE portfolio, the PCR is around 34% being the secured portfolio.

That is how it is.

The NPA of 24.5%, we have provided around 68% of the assets, right, 68% of the assets? In the next few quarters, are we looking to provide 100% of that?

See, we have the policy where on JLG especially, once the account turns into NPA, we provide higher than the prescribed norms as per IRAC, and we have been following this for years. As per those norms, a little higher provisioning we already do as per the IRAC norms, and we follow that.

We'll keep on increasing every quarter when the bucket movement happen, the 15% gets added in the each of the buckets. That is how the provisioning will keep on increasing.

You write off after 365 days?

Correct. Yeah, 90 300 NPA for 365 days.

You're right, yeah.

Okay. In the microbanking portfolio, what is the exposure of Utkarsh plus three lenders right now, sir?

What is the portion? What is the percentage of the assets?

On a Utkarsh plus three lenders, more than three lenders is close to 7% now in our own portfolio.

Out of ₹6,046 crore, around 7% is that Utkarsh plus three, around ₹423 crore, right?

Yeah. Yeah.

Okay. Basically, and what is the asset quality on that?

Means how is the book shaping in that front, sir? Can you provide a color?

It was 25% 1 plus is close to 25%.

No, no, what was last one year back?

December it was 25%.

Which has come down to 7%, as you can hear.

It has come down to 7% now.

Okay. In the other unsecured retail lending, your actually incremental disbursement is seeing a decline year-on-year.

If you talk of CE and CV portfolio, from 187 it has come down to 57. From housing, it is from 102 it is just come down to 78.

Around for MSME it has also relatively come down. As compared to microbanking, it is actually it has been almost 2.4x growth in the disbursement growth, I am saying, microbanking business loans.

JLG, obviously, the disbursement have been coming down. Your other retail lending is also actually is not growing right now.

When you talk of ROE of 10% for FY '27 and 15% for FY '28, which is in line with some good banks, which segments actually are exactly going to help you in that metric? Sir, related to that question, how is the digital underwriting is going to shape and how is that helped you actually in the other segments, and how it is going to help in the future?

In terms of product, yes, there was big focus on the collections and JLG in interim period. Now we are seeing a good traction as far as the non-JLG disbursement is also concerned.

It is improving month-on-month basis. Just broad numbers, obviously we don't have detailed numbers, but if you look at, when we talk of October last year, we have around 800 crore disbursement, but in by November we have around 1,000 crore.

It's a mix of all these things, 1,100 crore in the month of December and January has been more than 1,200 crore. There is now I think we are back on the track as far as the disbursement concerned, and we are seeing a month-on-month increase.

That is one part. Second part is that the LAP in various forms has been our key product, like we mentioned LAP, when I say micro LAP, it is around where the sweet spot is 8 to 10 lakh type of cases.

That is what we have been doing. We have started the gold beside the LAP in form of MSME, HL, retail LAP, and even when I talk of BBG, this is also a LAP product.

LAP is certainly going to be a large product from Utkarsh side going forward also. The growth because these products are having a very low base right now and we expect that these will be growing much much faster than even the JLG and microbanking type of books though those are with us.

Largely LAP is driven by in various things, as I mentioned micro LAP and other things is what we will be focusing upon. Besides obviously we have a belief in microbanking part also largely from starting with JLG and then going to individual lending also.

Okay. In our housing of ₹965 crore outstanding portfolio, how much is affordable housing, sir?

It should be we are present right now more than 80 centers and the majority of them are covered under Tier 2, Tier 3 centers. If what we call a affordable housing is up to ₹25 lakh or ₹30 lakh of the loan amount, and that should constitute around 30%.

30%, okay. You didn't answer one question, sir.

What is the GNPA of our CE and CV loan, sir? You mentioned about PCR.

As on December, it was 12. Just a minute.

I think 12.2% was the gross NPA as on December.

For commercial equipment and commercial vehicle loans?

Putting together, yeah.

Are we running down that portfolio, sir? Because it has also from compared to FY '25, 9-month FY '26 is down also by around more than 10%.

What we have done, we are not growing that book right now, and we have done few changes in the underwriting and process part. We are seeing that the portfolio that we have created during last maybe for 12 to 15 months, it is behaving properly.

There are old portfolio where we had done a lot of changes. That's why growth may not be there because whatever are the collections, we are trying to keep with disbursement within that level only.

Including, we are doing lower ticket and higher yield on second-hand vehicles also in the same segment. We have stopped some of the geographies where we are finding the delinquencies are higher.

We are seeing good results for this. Our expectation is next one quarter or so, we should see the start the decline of stress level or the NPA level for wheels also.

Especially, as I mentioned, whatever new portfolio we have created during last 15-odd months, it is behaving very well. This is the older portfolio where in which we have made a lot of changes now.

We have created a separate team to take care of that also. In fact, after JLG, this is one segment where we had little challenges, which we are addressing right now.

We are seeing a good traction for a few months in that also.

This is a completely secured portfolio?

Against the hypothecation of the vehicle, asset-backed finance.

Okay. Fine, sir.

I now have some few questions. I'll take it offline, sir.

Thanks so much, and all the best, sir.

Thank you.

Thank you.

Thank you, sir, for taking my question. I have two questions.

One is regarding your cost-to-income ratio. Where do you see it going forward in FY '27 and FY '28?

What will be the share of your JLG versus non-JLG portfolio in FY '27 and '28?

I'll take this. Cost-to-income ratio, you would obviously since you asked for '27, '28, you understand that the income, the denominator, given the slippages is low and therefore appears high.

We are looking at a cost-to-income ratio somewhere around 75% kind of, which is 110 today, bringing it down to, say, 57% in FY '28. Trajectory will come down from 110 to, say, 65, 75 to 57 in FY '28.

We are looking at doing the same at the same cost higher top-line. We're not going to be investing in extension in terms of branches.

It's productivity and at the same cost higher disbursement and lower cost that will see us the cost-to-income ratio coming down.

No branches would be added? It's just the productivity going up of the branches?

Just to add that, since '21 after COVID, we have opened quite a number of branches. Currently, we have more than 1,100 branches across the country.

3 331, we have general banking branches around 770 770-plus branches which are the microbanking branches. We have enough network of branches in 27 states and UTs.

In fact, we don't intend to go for new product lines also through branches because we have enough number of product lines. Our idea is, and that is what we have been discussing that we will not add branches right now other than in case we have to split some branches where a large branch of microbanking, otherwise we don't intend to open new branches.

We'll have limited number of branches where we're operating for our MSME or HL or for wheels and those businesses. Wherever we have to expand, we add those locations from the existing branches for those businesses also.

That is the idea. We understand that we'll be able to get a big cost optimization also because I don't have any additional costs other than the manpower cost for opening new locations for my existing businesses.

That is what we expect. One, my cost of funds comes down in next two years' time, also my cost of operations will come down through this strategy.

That is what we're working on right now. To your second question, JLG, I think, should be around 30% of the portfolio as you go on.

Somewhere around 30 or mid-25 to 30. Only the JLG portfolio we're talking.

Got it, sir. Sir, what about the NIMs going forward since you are increasing the share of retail deposits and CASA deposits?

How do you see the NIM going forward in FY '27 and '28?

So '28 we have indicated around 8.5% type of NIM. As I mentioned, because our cost of fund is expected to go down from here, and we have already seen a little reduction, and when our fixed deposits also get repriced, this will further go down.

That is one part. As I mentioned, the operational efficiency in multiple counts because we launched our transformation project 2.0 where a lot of thing getting automated and we'll get benefits of that, and plus as I mentioned, we're not going to open branches, but do expect that 25% to 30% growth of in the balance sheet in next two years' time, annual growth in balance sheet.

Without adding much in terms of manpower. In fact, even we had enough manpower for middle and senior management at the bank level.

Whatever manpower is required will be at the frontline only, first two levels only. My cost of fund will come down, my cost of operations will come down, and overall efficiency will go up and that will compensate for the differential.

Our expectation is in the range of 8.5% or so NIM if you look at the towards the end of FY '28.

Got it, sir. Got it, sir.

Thank you.

Thank you.

Good evening. When can we start our gross AUM growing?

Can we expect that in quarter four?

Sorry, can you just repeat? We could not hear properly.

Can you repeat the question, please?

When can we start seeing the growth in terms of the AUM? Can we expect that in quarter four or quarter one?

No, no, as far as AUM growth is concerned, we will see from this quarter itself. In fact, in January also, we have seen a I mean good growth, maybe around close to ₹250 crore to ₹300 crore of, of AUM growth.

At least on pre-write-off basis, we should see a good growth in the quarter four because now our JLG is also growing. Because the pain is over, JLG is growing, microbanking is overall growing, and other portfolio also growing.

We should expect a good growth in quarter very difficult to define what is a good growth, but we should have seen we should have a reasonable growth in in quarter four. Obviously, quarter one will be much better from from that perspective.

This growth is expected in all segments, including the JLG segment where we are, de-growing for many quarters now.

Okay. Are we expecting any low loss on PBT basis for quarter four or it will remain green?

Quarter four, maybe it is little too early to talk about the numbers. We do expect that, as I mentioned, the provision are coming down significantly, the portfolio growth is going to happen, the balance sheet will grow from here, and all the ratios will improve significantly.

What will be the final number in terms of PBT or PAT, I think it's very difficult to tell today.

Okay. I'm just asking if it will be in positive or negative.

Can we give color on same?

I'm sorry, sir, but it may be difficult today because only one month is over. I think two months are there.

We are seeing that the trajectory should be much much better from here onwards. That is what I can tell today.

Sure, thank you.

Yeah.

Hi, sir. Good evening.

Govind sir, firstly a few questions on the MFI portfolio. This 99.6% collection efficiency roughly that you are running at in January, do you expect any disruption to that in February or March?

That is one. Along with that, if you can share the microfinance slippages in the quarter and the PCR for the entire MFI book including JLG and individual.

Okay. I'll ask Sarju and Amit to talk, but one thing I'm sure, Ashlesh, now, the way we have seen cycles and we have seen month-on-month because this may be monthly against demand, but we are tracking this on daily basis and our experience that it should not go below 99.5% from now onwards.

That is what we can assure all the investors now. Because we have seen all these things after that.

The geographies where we are present and we don't see any disruption coming in because of the stability of all the activities. Normally, in quarter four, JFMs are normally better ones.

There we don't expect any disruption coming on. We are hopeful of quite a stable collection efficiencies as also attrition is under control and the manpower there.

We are hopeful of continuing with the same numbers in that sense. PCR coverage on the JLG book is close to 68.3%.

Sorry. Honey, he asked including MBBL, the entire MB book as on December '25, PCR stood at 69%.

Yes. Understood, sir.

Along with that, if you can also share microfinance slippages? While you do that, let me ask one more.

On the MFI book, the disbursements in the JLG book were still weak in this quarter. Do you expect that also to pick up?

Secondly, the MBBL portfolio is seeing good disbursements. Do these MFIN guardrails apply to that business as well?

You have to say? Okay.

Your first question, JLG portfolio will also start seeing a positive turn and that has started happening in this quarter. We will see a book growth over there because that's what we are looking at, number one.

MBBL is a slightly different product where the guidelines are different and it's a individual credit assess program. It is not a program which is governed through that MFI guidelines, but more of a credit and business models that's how we assess the customer on a FOIR-based things.

It doesn't come under that part of the business. Just to add, in MBBL, the credit underwriting is separate from the business and the sourcing team.

It is led by our National Credit Head and the full-fledged zonal, regional, area manager, credit manager structure is there. For each and every case, the credit guy goes and conduct the personal discussion and assessment of income and expenses, and then he does the entire underwriting and the eligibility part also.

It's very separate from the business.

Got it, sir. This staff cost, which has been quite high, now that your X-bucket collections and SMA book in microfinance have declined quite materially, do you expect the staff cost to also decline meaningfully in the next quarter?

Ashlesh, I want to break in two parts. One part is, when I'm talking of my overall cost, this cost has gone up in recent past because, one, there are some additional costs involved.

There's some incentive cost involved. There's a collection cost involved also.

Our sense is that the cost for JLG will not go down, I'm talking employee cost, for a simple reason because now we have a collection team. In fact, our expectation is that it will stabilize here only, but I should be able to get a much better collection because now one portion is taken care.

My normal collection has got stabilized. We are focusing in through a big way in the write-off and in NPA collections.

Our idea is I'm not try to control cost on the employee for JLG or for MB. Rather, I'll try to get revenue of these people, which is expected much much better in terms of P&L and in terms of overall trajectory, it should play much better for us.

It's difficult to talk of numbers only, but my sense is on each month basis, my collection from NPA and write-off will go up significantly from here. My cost of employee may not go down because of that reason.

One more thing what will also happen, Ashlesh, our portfolio number will grow, as Virender just mentioned. We are seeing in the month of January that portfolio has first time actually grown after my sense is almost 12, 13 months gap.

We have started growing that portfolio also.

Understood, sir. Last question from my side on the liability side.

The cost of term deposits which you report for 9 months FY '26, that is higher than the 1H number. What is the reason for that one?

Along with that, if you can just give the MFI slippages number, please?

One of the reasons, if you know that we are reducing the institutional side of the borrowing. They generally are short-term at lower fund.

Once you reduce that, your coverage of TD becomes retail, which comes at a bit higher rate. That's a long-term.

That's necessary because even we are moving from unsecured to secured. From ALM point of view also, we need to do more retail and keep that stable.

The impact largely comes because the decline in the institutional is significant. Calibrated thought process because obviously as disbursement pickup, we'll go back to that bucket of borrowing, but at the moment, that's the reason for the cost being a bit elevated given that the short-term fund that we had taken earlier that we have at the moment stopped taking.

Also, you wanted this slippages in

In microfinance. Combined JLG plus individual is also okay, if you can share.

This you need for quarter three?

Yes, sir.

Yeah. It was close to ₹266 crore.

No, JLG was ₹272 crore out of ₹426 crore.

Does it include individual also?

MBBL milake hai ya uske alawa hai, puch rahe hain?

MBBL

MBBL quarter three, yeah. Ashlesh, we'll confirm you.

I am just not able to figure out Give you a separate

Yeah. I'll connect with you separately, sir.

Thank you very much.

Sure. We'll do that,

yeah. Thanks, Ashlesh.

Thank you.

Hi. In your microfinance NPAs, how much were covered by CGFMU scheme, and for that do you intend to make some provision or keep it as it is because it's covered under guarantees?

We are close to 50% of portfolio is covered under that right now because we started around a year back and within one year, my current portfolio, and it is for both for JLG as well as for individual business loans, around 50% of portfolio is covered. Currently we don't take any benefit from the provisioning angle.

We are provisioning as there is no coverage at all, and we are not taking any benefit of that. That is our you can say use as our policy.

We'll not take advantage of that. Whenever something happens, we'll have to look at that part.

Currently, we are not taking any benefit of that. So

50% of your book is covered, but what about the ₹751 crore net NPA? Then how much of those are covered by CGFMU?

There may not be very significant number. I don't have the exact number right now, but I can share separately also.

You can message us, we'll separately share because most of our NPA are from the legacy book. In our new book, anyway NPA levels are very, very low, and we are seeing if you look at MOB 8, 9, 10, 11, obviously there will be some NPA, but NPA numbers are very low.

Most of our NPAs are from the legacy book. I don't have the exact breakup right now in front of me.

Okay. This micro

Sure. Thank you.

Okay. Thanks, Chintan, and thanks everyone for joining this call.

As I mentioned, we are in the right trajectory right now. We have seen good traction, good growth in all aspects, in all parameters.

That is what is expected to continue from here in terms of disbursement, in terms of bringing cost of fund down, from bringing cost of operations down, and growing our conventional JLG book as well as the new book that we have started. That is what we are expecting, and that is how we have seen January month also.

This trajectory will continue. Thanks very much for your patience listening, this interaction, as well as for your support.

Look forward. Thank you very much.