Home First Finance Company India Limited (HOMEFIRST) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Home First Finance Company, India Limited, Q2F527 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sunil Anjano, Head Treasury and Investor Relations of Home First Finance Company, India Limited. Thank you, Vanuva, to you, sir.

Thank you, Ikra. Good evening, everyone, and welcome to Home First Finance Company's earnings conference call for the quarter ended September 30, 2026. Our investor presentation, press release, and historical Excel fact sheet are available on our website. The presentation and press release are also available on the stock exchanges. We hope you have had the chance to go through them. Joining us today, Mr. Manoj Vishwanathan, MD and CEO, Mr. Ajay Khaitan, Deputy CEO and CBO, and Ms. Rinku Sumani, CFO. I now invite Manoj to take you through our performance and outlook. Over to you, sir.

Thank you, Sunil. Good evening, everyone. Before we begin, I would like to welcome Ms. Rinku Sumani, our new CFO, to Home First, and we look forward to our contribution to the company's continued growth and success. With that, let me turn to our performance for the quarter. Home for second quarter performance is earning capacity. Aum increased by 29.1%, gross stage 3, and lower operating cost ratios, 1% year-on-year, and 6.3% sequentially. Quarterly disbursement reached 1,705% growth, an increase of 32.2% year-on-year, and 4.7% sequentially. This expansion in the business translated to profit after tax of Rs. 170 year-on-year, and 6.5% sequentially. Supported by a 31.9% growth in net interest income and improved operating efficiency at 4.2%, while return on equity improved by 40 basis points to 14.9%. The relationship between growth, portfolio quality, and profitability is central to how we assess our performance. I will take you through each one of these, along with the investments and funding capacity, supporting the next phase of growth. Taking six branches and taking our network to 181 branches and 379 touch points. Customer reach with branch productivity and disciplined execution. Thank you. The combination of stable early delinquencies, lower broad stage 3, and contained credit cost remains a key differentiator for home first, sharpening underwriting and supporting scalable growth. Our digital first foundation and structured data have prepared us well in the life cycle. Stocks and creditors on 100% of the loan files. The bank statement to cash flow view in about a minute. And the talk actually reads all documents that form basis for underwriting and other operational activities. Together, they are shortening turnaround times and lowering document handling costs, while every credit decision stays with our underwriters. We will move from these three-point solutions to one shared data and location platform and extend AI into sourcing, collections, and servicing in phases. The financial performance for the quarter stood in 67 crores, registering a growth of 18.4% year-on-year and 5% sequentially. And disbursement yield stood at 13%, reflecting consistency in pricing discipline and quality customer acquisition. On the liability side, our cost of borrowing remained at about 7.8%, while the incremental borrowing cost remained at 7.8% at 5.2%, while net interest margin remained at 6%. Our cost-to-income ratio improved to 30.8% compared to 32.7% in the preceding quarter, reflecting continued improvement in operating productivity as we scale our business. It was compared to 2.8% in the previous quarter. 21% year-on-year, 238 crores, business model as the portfolio scales. 170 crores, registering a growth of 29.1% year-on-year, and 6.5% sequentially. 2.2% and ROV improved to 14.9%. Overall, we continue to focus on improving operating efficiency while investing in the capabilities required to support our next phase of growth. Moving to provisions and asset quality, credit costs remained contained at 40 basis points, 23.6%, continuing to maintain management overlays, 6.4% as of September 26th. Providing an additional cushion against grants to support our growth, banks accounted for 58% of our funding, while NSP contributed 14%. During this quarter, we executed direct assignment transactions of 281 crores. During the quarter, taking the co-learning portfolio to 593 crores, or 3.3% of the AEM. Along with partners, we are strengthening the infrastructure and operational capabilities to unlock the full potential of the co-lending channel, enabling wider customer reach, capital efficient growth, and enhanced operating productivity. In the category, our capital position provides capacity to support the business as it expands. The business was 39.8%, with Tier 1 capital at 39.4%, compared to 42.6% and 42.2%. Networks stood at 4,600 at 446 as of September. Number of certified homes to succeed the ESG and Financial Inclusion Award in the NBFC category at Assochamps 21 Annual Summit and Awards for Banking and Financial Sector Companies. Looking ahead, our focus is on converting the capacity we are building into sustained portfolio growth and earnings. This means maintaining underwriting and collection discipline as we expand, managing margins through asset pricing and funding decisions, and improving productivity while continuing to invest in the franchise. As we progress on our growth journey, our priorities remain clear. Delivering consistent, profitable, and risk calibrating our franchise and creating a sustainable long-term value for our stakeholders. We will now

begin the question and answer session. Anyone who wishes to ask a question, If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Grainish from ICICI Securities Limited. Please go ahead.

Yeah, hi sir. I've commented on a good set of numbers. So, just two things. So, one, on our NPN Gujarat exposures, right? So, many lenders have highlighted that some districts in NPN Gujarat are affected by droughts. So, just wanted to understand what is our exposure in this drought-declared area, and also, how do you see the assessment and asset quality spanning out, you know, in particular for this area?

Got it.

So, quality, I can understand, but let us say, on the development front, would you want to tighten your child's filters for some time in those areas, and in that case, do you see any impact on the development relatively getting into second half?

See, on credit filters, you know, if we are taking a customized call on each customer, we find any customer who has dependents on that, then we will take appropriate calls.

Got it. Last clarification, while calculating FYR, do we consider angry income for any of the customers, or we just don't give any weightage to angry income?

There will be, very rarely, because we don't, you know, get customers from that segment. Mostly our customers are people who have, you know, left their villages or small towns and gone to larger cities for employment.

Got it, got it.

And so just how does it spread, right? So now since we are entering a rising rate cycle and we have already seen, you know, few players raising KELA rate, Is it trying to assume that spreads have bottomed out and from here on we will see going right?

See, we are running a fully floating rate book and we are committed to maintaining a 5 to 5.20 spread, which is what we have always articulated. The borrowing costs are turned on to the customer eventually. I mean, ultimately...

So we are confident of maintaining a 5.2% spread and do you foresee any upside risk to that spread? Because historically, you know, we have been operating at 5.5% spread also. So just wanted to understand, let us say, if a rising rate cycle gives us some opportunity to, you know, pass on that higher risk to the customer in that case, including your spreads. Do you feel that is absent risk in a relative cycle for us?

No. See, 5.5% or upwards, you know, there was only a short phase post-COVID when we were getting that kind of spread. Due to sharp decrease in borrowing costs during that period. And even while we were not sustainable, we should be able to maintain it.

Okay. This is very helpful, sir. Thank you. Thank you.

Next question is from the line of Shepal Doshi from Equalist Securities. Please go ahead.

Hi, sir. Congrats on a good set of numbers. My question was on the PLR increase. So, while we have not taken any hike as yet, while the systemic rates have gone up, so when do you plan to take that? And with respect to margins also, this quarter, there was some marginal decline. But overall, where do you see margins stabilizing for the full year?

So, see, right now, we have not taken any PLR increase because our borrowing costs have also not moved up post the PLR change, post the report rate change need to be set, and, you know, when we can reprise customers, etc. So, broadly, we will follow that framework.

You know, the spirit of the guideline is that...

The second question

was on the insurance distribution fee related to draft circular, so it does contribute to our P&L also in a decent form. So, how do you see that impacting us and what levers do we have there?

Should I change in the pricing or should I change in the fee?

Got it. Thank you so much for answering your question and good luck to the next call.

Thank you. Next question is from the line of Ajeev Mehta from Yes Securities. Please go ahead.

Yeah. Hi. Good evening. Congratulations on good numbers. My first question is on this growth and the execution rhythm that we are now demonstrating. Are we confident that we will maintain this execution rhythm in the coming quarters? As you don't seem to be seeing any demand or asset quality issue at this point in time.

Last year, since last three quarters, we are experiencing very good momentum and very good stability in the teams across various regions in the numbers that we are talking about.

And consequently, you know, this ROE improvement directly that we have been now also delivering about 20-30 basis points every quarter, given that the credit costs should remain stable in your assessment of asset quality, then the ROE improvement will also be very consistently coming through, right, every quarter?

ROE improvement of the… 25, 30 basis points per quarter?

Yeah, I mean, but is there a target for exit ROE, say, for next year, for quarter, say, for 28 exit ROE, are we looking at 16, 16 and a half number, kind of a number there?

Yeah, yeah. So, see, this quarter we had 40 basis points improvement in the ROE numbers. But broadly, the ROE that we are targeting is, we were targeting an exit ROE of 15% this year. So, looking at the numbers now, it looks like that, you know, that should 15% exit for this year, the 16%.

Okay. And just one thing on the ease. See, when I look at your origination ease, they've been stable at 13%. Despite the fact that when I look at the mid-shift in the book, more of the book is moving towards more than 25 lakh loans. So, which means that origination point of view, you've done more business on the relatively high ticket size, but your origination yield is not dropping. Okay. So, are we able to get good yields even in a slightly relatively high topic segment because of the assessed income profile of the customer and hence there's no dilution in the incrementing yield?

Yes, you are absolutely right and which is what we have been also trying to convey since some time that borrower profile remains the same and borrower's incomes have, you know, over time increased. It remains the same in getting a loan. We are also able to get good yields from that. So, the compression in yield, you know, in the 25 life plus segment compared to a less than 25 is very, very marginal.

Okay. Then why did our book yield fell? I mean, in this quarter, I mean, by 10 basis points, because the incremental yield is stable at 13%. Previous quarter, the book yield was 13%. But we still saw a drop of 10 basis points. And then if I were to read that with, say, your BP also, you know, remaining low at 4, 4.5%. Did we reprise some of the loans, And, you know, so as to control the VTE number?

No, it's not like that. It is our new customers.

Thank you. Best of luck.

Next question is from the line of Chantan Shah from Citigroup. Please go ahead.

Yeah. Hi, sir. This is Kunalo Bhaiya. So, a couple of questions. Firstly, on net, when we look at it overall in terms of the proportion and the growth, It's been lagging the overall AUM growth now almost at 22-odd percent and closer to 15-odd percent of AUM. So how should we see it now going forward? Maybe in terms of like maybe the stance on the left, are we now comfortable with the environment and start to grow? Or we will keep it measured at closer to 15-odd percent of AUM only?

So, we had, you know, the broad guardrails that we have agreed as a company is that 80% will be housing and the remaining 20% we can do other products. So, the lab will remain within that 20%. So, as of now, it is running at a slightly slower pace.

The only reason is like now, asset quality is also stabilizing broadly. This time we saw OnePlus, DPD, R overall, GS3 being managed quite well. So, would that give you much more confidence in terms of again getting on to the growth in life or it will be still like a home loan driven growth?

See, we want to remain strongly committed to home loan growth, which is what is reflecting in the numbers or the stronger growth in home loans. But we do keep LAB as a kind of, you can say, advantage that we have or a headroom that we have. We can, you know, it can increase by another 5%, maybe a spread increase of maybe 6-7 basis points.

So that is something that Yeah, especially in the rising interest rate environment that could help support the margins as well. So that was the question. Is it like maybe now would that be the time or maybe we would still want to wait and see?

Yeah, because we are still not seeing any pressure. We are able to originate housing at very good rates. So there is no need to use that, you can say, you know, what do you call it, red room and lab. I mean, we can use it, I mean, we can keep it for a later date.

Okay, sure. And secondly, on OPEX, so this time, there was a decent decline on the OPEX ratio, both cost to income, cost to asset. So, is there any one-off within this? No doubt you won't have a higher base, but in general, also, we saw some optimization. So, is there further scope to optimize the OPEX as we pick up on the growth side? We are at almost 27 odd percent now. And if it sustains or if it improves from the current level, should we see further levers on the OPEX or maybe it would continue to be at a similar level?

On OPEX, again, see our commitment is to reduce by 10 basis points every year. We would like to, you know, push that down by 10 basis points year on year. That is what we are working towards.

Okay, and one last data point, this bounce rate increase in October, anything to relate into this, or this would be more, I mean, getting into the festive, we generally see some deferments, which is linked to the bounce rate higher in October compared to that of September, and it should stabilize as we get to the December end.

Sir, the bounce rate figure is, you know, it's also a function of which day the particular, you know, fourth of the month falls in. So, if it's a Saturday or, you know, Sunday, then the bounce rate is slightly higher. If you see last October, we are not, I mean, we are not...

Got it. Perfect. Yeah. Thanks. Thanks and all the rest. Yeah.

Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, Please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. We will take our next question from the line of Abhijit Dibriwal from Motilal Oswal. Please go ahead.

Yeah, good evening, and thank you for taking my question. Manu, just trying to understand the momentum has been really good last couple of quarters, especially in terms of originations, the growth has been maybe tracking slightly higher than what we had may be targeted at the beginning of the year. So I'm just trying to understand in the past, you had spoken about some of the changes that we are doing in the team. So I mean, would you like to comment on what exactly have we done? Are those things moving in the right direction now? Because I think I mean, if I look at our AUM mix based on the geographical mix, except maybe Tamil Nadu, where the lower, the loan growth, the AUM Stability in the team.

So, we have stronger teams in each of these states, and the teams are in place now, and it should get further strength. Stability in the team, slightly lower attrition that we are currently experiencing.

Anything in Tamil Nadu, where you are maybe working on the team, and you expect things to improve, or are there any other reasons?

No, in Tamil Nadu, the teams are in place now. Last year, there were a couple of regions where there was no leadership actually.

Got it. And lastly, Manoj, I mean, I think towards the end of your opening remarks, you have been clarified that your tenor is still 20-20, you have been available for appointment. I'm just trying to understand this thing kind of keeps coming back to us, Tangman, again, that what are your plans to, I remember you had clarified earlier and clarified again today. I'm just trying to understand, are there some conversations happening around maybe you taking up a role which is more strategic in nature at the board level and then maybe someone else takes up a more operationally intensive CEO role? So, are there conversations like this which are happening or, I mean, what we keep hearing, something we can safely ignore?

So, there is no such conversation going on since several years.

Got it. This is useful. Thanks so much and I wish you and your team the very best.

Thank you. Next question is from the line of Siddhaj Jain from Investec. Please go ahead.

Thanks for the opportunity, sir. First question is on branch addition plan for this year and next year. What are our plans to advance this year and next year?

Branch additions, we normally do at a run rate of about 20 to 25 branches a year.

Next year, we also plan to scale up UP as a state, right? Are those plans on track?

Yes, yes. The plans are on track. UP, again, we are strengthening the team. So, we will, you know, we are on track to...

Can you ask me, what is the count of active connectors for the quarter?

1,400.

Thank you. That's it for my time.

Thank you. Next question is from the line of Ajit Nepal. From MSA Capital Partners, please go ahead.

Yeah, an audible? Yes. Yeah, thank you so much for the opportunity. Great set. Congratulations to the team. Just wanted to double click on what Vigil asked a few turns back. So, when I look at the growth, X-South, all our geography are going above 25% Y-O-Y. And when I look at the South markets, Tamil Nadu, Andhra Pradesh, Talangana, and a lot. They're all going at, other than Karnataka, all are going at sub-teens, and Tamil Nadu is going at single digit, which you've already answered. So, is there any specific geography-related issue in the southern markets today? Is it because of higher competition or a credit call that you are taking internally?

No, it's not that. I think southern markets are slightly different in the sense that it is largely a self-construction driven market. So the dynamics are a little different. Disversal is also quick. So that is, I think, one of the basic differences.

So where I'm coming from is that if all these geographies had also grown, the growth that we would have posted would have been much larger. So where I'm coming from is that because if Tamil Nadu starts growing, and if the other two geographies, that is Andhra Pradesh and Telangana start growing, so can we say that we can post better growth in the upcoming quarters?

Then, see, that's the nature of a diverse country, you know, where we are operating in multiple states. So, there is always a drought in some place. There is some rain in some place. Those things keep happening, like we are experiencing now. Saying 25% growth is something that we are experiencing.

Understood. Wishing you and the team all the very best. Thank you so much for taking all my questions.

Thank you. Next question is from the line of Paresh Chaudhary from Latent Advisors PMS. Please go ahead.

Hi, thanks for the opportunity. So, as you have mentioned previously in the call, that growth has been pretty broad-based. So, I just wanted some colour on the fact that we have closed a couple of branches in Rajasthan and also exited a district. So, if you could give some colour on that.

We just not meet our expectations in terms of the pace. You know, then we end up closing those. It's not meeting our expectations.

And, sir, secondly, on the ECL coverage of Stage 3, there's a slight uptick. So, how should I read into it?

We keep updating our numbers on the, you know, and our expected credit loss. So, this is just a reflection of that.

Okay. And, sir, if you could give the breakup of apartments as a percentage of AUM, which we previously used to give, that would be helpful.

I mean, the row houses, which are also developer-led, would be around 30%.

And service construction and only plots? And, sir, if you could just help me with one more number of DPD-90. DPD-90.

Do you stay ready?

Thank you, as a percentage of you are. That's his own message.

Thank you. Next question is from the line of Sonal Gandhi from Asian Market Securities. Please go ahead.

Hi, thank you for taking my question. So I have just two questions. One is only co-lending transactions. So, you know, if I look at the number of the transactions that you've done for the quarter, it's just 1.8 crore versus 46 crore last quarter. So we were expecting this number to pick up. So, what exactly is happening on the co-lending side, and how do we see this number moving ahead? And second, I'm not sure my line was a bit badly, since this is already covered, but, you know, if I look at your employee cost, so that is down about 7% on a future basis. And when I look at disbursements, you know, it is up 5% on a future basis. Now, how do we see, you know, I mean, the sustainability of this cost income or OPEX to assets number because your discloseness are growing, but your employee cost is coming down, especially given that the attrition has been so high in the past. So, what should be the number that we should look at here in the second half of this year? And so, why is it that the employee cost is so low?

Okay. So, first, to address the issue on the co-lending part. Yes, this quarter, the co-lending transactions were quite low. And I think last call also we had articulated that we are working through a set of new guidelines which we had issued and we are working with our partners to get that implemented. So that took us a bit more time than anticipated and hence the transaction did not go through this quarter. But we are almost at the stage where, you know, these are getting at rest. So we should definitely see an uptick in numbers in the co-lending in quarter three. As far as employee cost is concerned, see, generally during quarter two, quarter three, there is a lull in terms of new employees who are joining. So, which is why you are seeing those numbers like that. Productivity, I mean, quarter one, and then the cost goes up a bit. After that, it stabilizes for a couple of quarters. Then again, in quarter four and quarter one, again, there is the next batch which joins. So, that's the cycle because we basically hire from campuses. So, there is a campus hiring cycle that we follow. That is the reason for those. As I mentioned, we are basically, this year, we are looking to deliver 2.6% out of X2 assets. And broadly, we are committed to a 10 basis points reduction in that on a year-on-year basis.

Thank you. Next question is from the line of Kaurav Purohit from Systematics Group. Please go ahead.

Hi. Thank you for taking my question. So, first question is on top-up contributions. So, of the 1,700 crore or disbursements in the second quarter, how much is coming from top-ups? And if you can share, you know, how this contribution has trended over the last three, four quarters, that would be very helpful. Second question is a data-keeping question. So if you can share with us the average ticket size of disbursements in the second quarter. And third one, a more strategic question. So BT outflows have declined materially over the last two quarters. Do you see this as a structural trend, and do you think it is sustainable around this 4% mark? And I'm sure, you know, customer persuasion would be a big factor in bringing this down materially. So what has changed in the last two quarters, you know, that we have been able to manage this around this level, while in the past it has been slightly elevated? So these are the questions.

Yeah, so talk about dispersals. We have put in place a set of measures and initiatives to reduce this. We used to be at about 5% to 6%. We have brought it down to about 4.5, so we don't want to read too much into it at this point. It will be in the 4% to 6% range, the balance transfer.

The average ticket size of the first person Q2?

The efficiency is around 15-16%, sorry, 15-16 lakhs. So that trend will be there, you know, and we have always conveyed that, you know, over a period of time, gradually there will be an uptick in ticket sizes, you know, Because the aspirations and expectations of customers is to slightly larger properties and larger ticket sizes. So that number will keep inching up over time, but more gradually.

Got it, sir. Just one follow-up on the BT out part. So is top-up the main reason that, you know, customers are paying back, or you are offering them lower rates or both? So which is the more crucial factor here?

So, one, I mean, primarily the customer and understand. Then the next step is, you know, obviously pitching the customer with the request of offer. Then, you know, the step comes in terms of, you know, offering a rate break. So, it's a change we have put in place, which is yielding results. So, it is not just one.

Fair enough, sir. Thank you. Thank you for taking my question.

Next question is from the line of Aditya Miglani from Bournemouth Capital. Please go ahead.

Hi, Manup, sir. Congratulations on the great set of results. Just wanted to understand one thing. Given the one repair rate hike that has already happened, would we consider sort of absorbing it in our spread, given that we were still on the higher end of the 5 to 5.25 range, and not do a PLR cut? Or would we only do a PLR cut if probably we see another 25-day repair rate hike?

PLR increase, right?

PLR increase, yeah.

PLR high-cap.

So, yeah, I mean, see, we broadly will be following the new draft guidelines that RBI has issued, which is that the final rate to the customer has to be benchmarked to the borrowing cost. There can be some additions to the borrowing cost. There has to be a significant change in the borrowing cost for us to be able to transmit it to the customer. So if there's only maybe 2-3 basis points, high basis points, it is also logistically not feasible for us to reprise the customer, reprise the customer just by 4-5 basis points. 10-15 basis points a moment in our borrowing cost, at that point we will take a decision to change the PLR and transmit it.

To understand, just the one repo rate hike still now doesn't fully warrant a PLR increase as of now in your view, right?

Correct. I mean, it will be, the PLR increase will be ultimately a function of our borrowing cost moment. So, as you can see, between last quarter and this quarter, there is no borrowing cost moment change in the…

Thank you.

Thank you. Next question is from the line of Ravi Naredi from Naredi Investments. Please go ahead.

Thank you very much to give me the opportunity. I would like to ask you, which event are you waiting now? AUM to cross 20,000, profit to rise to 650 to 700 crore, net NPA to come down below 1%, or mass, what is in mind of our senior staff to reach any of this target?

You know, AUM target, 25% AUM growth is what we are targeting, so 20,000 crores, 27.

How do you hedge ECB borrowing and what is the cost of hedging?

Sir, we use derivatives to hedge our positions when we borrow from ECB markets, so cross-currency swap is something that we use to hedge our positions. The cost fluctuates from, you know, time to time, broadly between 3-3.5%. Thank you.

Next question is from the line of Vivek Singh from Raise Securities. Please go ahead.

Hi, sir. Thanks for the opportunity. Sir, my question is on the asset quality front. If you see, in the past 3-4 quarter, despite the macro challenges, the asset quality front has remained quite strong. In fact, it has improved marginally over the last 4 quarters. So, just wanted to get your sense what has changed on the ground. So, has there been any change in terms of the collection effort or in terms of the borrowing profile? And also, if you give some sense in terms of the improvement is largely due to the lower slippages or improvement in the rollback rates?

And for the improvement, I think it's maybe just a period of, without any major, at least in the Indian market, the asset quality. Second question is concerned, largely it's coming because of a slower pace, and that is what is contributing to a lower pace.

Okay, sir. And sir, there's also a concern going around that a lot of the Dalekin customer are resorting to other credit like Gold Loan and PL to become current, to pay a fair yardage and become current. So, have we done any kind of scurping of the portfolio to see if the account has them resorted to any such credit facility to pay their dues?

Yes, sir. We have seen any significant changes in the ratio of customers taking other products. So, significant change in that. When they are at the point when they take the loan from us, it definitely changed too much.

And, sir, in terms of your state-state provision, because if you see for over the past three quarters, it has been hovering around 23%, despite some challenges on the macro front, the inflation is on the rise. So, when was the last time that the ECL assumptions were recalibrated?

Sir, ECL assumptions, we are now recalibrating every quarter.

Okay. Yeah, that's it for Mathai. Thank you, sir, for taking the question.

Thank you. Next question is from the line of Varun Dubeh from Shair India. Please go ahead.

Sir, I just wanted to understand what would be the rejection rate in this quarter as of the previous quarter.

I'm so sorry to interrupt. Varun, we are not able to hear you. Can you use your handset mode, please? Yeah, this is better. Please proceed.

Yes, thank you for taking my question. Just wanted to understand what would be the rejection rate. I mean, the leads to disbursement rate this quarter versus the previous quarter haven't been any increase in the rejection rate and also wanted to understand, will you be slowing down on your disbursement, especially in the draw-throwing areas?

The rejection rate broadly stays in the same band. We have not seen any fluctuation in recent times. And as I mentioned earlier, we don't have much exposure to a dependent on manufacturing sector. We don't have exposure.

Okay, sir. Sir, one more question I just wanted to, you know, understand. I mean, last quarter you did 25% AEM growth. This quarter it was 27%. But you're still seeing that by March 27, your target of AEM growth is 25%. So, I mean, whether you're too conservative or, I mean, this 27% in this quarter was a one-off. How do you deal with it?

So, we are basically working towards a 25% growth target, which effectively means that we have to hit a 20,000 crore number by March 2017. We grew a little faster. So, there will be a 1 out of 2%.

Congratulations on your set of numbers.

Thank you, sir.

Thank you. Next question is from the line of Vivek Singh from Ray Securities. Please go ahead. I think your line is animated. DMA, please go ahead with the question.

Hello. Am I audible now?

Yes, you are audible.

Yes, sir. Sir, just a data-keeping question. What will be the share of repair and renovation in the overall portfolio? Share of repair and renovation?

Repair and renovation is around 1%. Thank you.

Okay. Next question is from the line of Hadid Tepal from MSA Capital Partners. Please go ahead.

Yeah. Thank you so much for giving me an opportunity again. Manoj, sir, just wanted to understand. So, when I look at the disbursement growth over the last eight quarters, it has been a tale of somewhat two halves. And we are sounding optimistic now, but if we were to just qualitatively state what was wrong earlier and what is happening, what good is happening now, what has changed, that we are seeing growth momentum back again, because on the ground also you are seeing some strong momentum. And with all the negative news surrounding us, that is, condensation slowdown, El Nino impact, the rise in oil prices. So, just wanted your take on it. What are you hearing from the ground?

Continue, and Tamil Nadu, in some of our markets, we have...

Understood, understood. Sir, the next question is more internally. Certainly, so when we talk about AI, and we saw this quarter as well, our OPEX to asset ratio coming down. Going forward, do we see, so you already said that the productivity benefit will be 10 basis points, but do you see that our efforts with AI, there is some potential room to increase our OPEX to asset ratio?

A certain number, which is the 10 basis points reduction year on year.

Because what I'm saying is that you're among the few people who are deploying AI on an institutional level and well. So just wanted to understand from you if there was an optionality or not. And yeah, you've answered all my questions. So again, wishing you all the very best. Thank you.

Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Manoj Vishwanathan for his closing remarks. Over to you, sir. Thank you very much, sir. On behalf of Home First Finance Company, India Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.