LIC Housing Finance Limited (LICHSGFIN) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the LIC Housing Finance Q4FI26 Investors Conference Call, hosted by Axis Capital Limited. 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 touchstone floor. Please note that this conference has been recorded. I now hand the conference over to Mr. Praveen Agarwal from Access Capital Limited. Thank you and over to yourself.

Today with us we have Mr. Atrivarana Adhikari, MDN CEO, and Mr. Lakesh Mundra, CFO, to discuss the results. I would request Mr. Adhikari to share his initial remarks on the results, post which we will open the floor for Q&A.

Welcome to the call.

Yeah. Thank you, Praveen. Good morning, and welcome to all of you to the post-learning conference call of LIC Housing Finance Limited. As you are aware, LIC HFL declared its Q4 financial year 26 results yesterday. Before I start the highlights of the Q4 results, I would like to outline a few developments in the economy of the last quarter. Over the past few months, the global economy has been navigating heightened geopolitical uncertainty arising from the evolving situation in the Middle East. The conflict has resulted in volatility across global financial and commodity markets, particularly in crude oil prices. Concerns around supply distributions and logistic bottlenecks have led to intermittent spikes in crude prices. The increase in oil prices has exerted pressure on the Indian rupee and could potentially impact imported inflation if the situation persists for an extended period. However, India's macroeconomic fundamentals continue to remain relatively resilient. Supported by healthy GDP growth, stable financial sector conditions, adequate foreign exchange results, and continued government focus on infrastructure and capital expenditure. Against this backdrop, the RBI maintained a wait-and-watch stance in the first MPC for FY27 and flagged further escalation of the conflict, elevated energy prices, weather-related events, including the emergence of El Nino conditions. Slowdown in exports and heightened volatility in the global financial markets as a downside risk to domestic growth. While liquidity conditions have remained broadly adequate, the RBI continues to closely monitor inflationary trends, global commodity prices, and external sector developments while balancing the growth inflation dynamics. Coming to the housing finance industry, despite external uncertainties, Domestic mortgage demand has remained reasonably resilient. Structural drivers such as urbanization, favorable demographics, rising income levels, increased aspiration for home ownership, and continued policy support for housing continues to provide long-term growth visibility to the sector. With this, we present the financial highlights of the company for the quarter as follows. Total revenue from operations, 7194 crores, as against 7281 crores for the corresponding quarter of the previous year. Outstanding loan portfolio stood at 3,20,707 crores as on 31st March 2026, as against 3,07,732 crores as on 31st March 2025, reflecting a growth of 4%. The individual home loan portfolio stood at 2,70,893 crores as on 31st March 2026, as against 2,61,562 crores as on 31st March 2025, up by 4%, and comprising 84% of the total portfolio. Total disbursements for the quarter were 21,019 crores, as against 19,156 crores for Q4 FY25, up by 10%. Out of that, disbursements in the individual housing loans were 16,672 crores for Q4 FY26, as against 15,383 crores for Q4 FY25, up by 8%. And non-housing individual loan segment were at 3,348 crores, as against 2,676 crores, up by 25%, whereas project loans were at 847 crores, compared to 875 crores in Q4, financial year 25. On the net interest income front, net interest income was 2,222 crores for the quarter, as against 2,102 crores for Q3 of FY26 and 2,165 crores for Q4F of FY25, showing a sequential growth of 6% Q on Q and 3% on YOY basis. Net interest margin for the quarter stood at 2.80% as against 2.69% for Q3 of FY26 and 2.85 for Q4 of FY25, and for the full year, it stood at 2.68% as against 2.73%, which was well within the guidance given at the beginning of the year. EBT, profit before tax for the quarters to that 1,934.24 crores, as against 1,769.58 crores, a growth of 9.31%. Profit after tax for the quarters to that 1,497.41 crores, as against 1,367.96 crores for the same period previous year, up by 9.46. And path for FY25-26-25-95. 0.15 crores, as I guess, 5,429.02 crores for FY2425, showing a growth of 3%. Dividend was declared by the board at 500 rupees, that is 10 rupees per share. In terms of asset quality, the Stage 3 exposure at default stood at 2.16%, as against 2.47% as on 31C25, and 2.45% as on 311225, reflecting a sequential as well as year-on-year improvement in the sale. Total provisions as on 31 March 26 is 4,569 crores, with Stage 3 provisioning cover at 50.08%. The credit cost for Q4 of FY26 is two basis points, and the full year, it is 18 basis points. The company also conducted sale of a stress asset through ARC for a cash cancellation of 70 crores during Q4 of financial year 26. On the funding side, the cumulative cost of funds stood at 7.27% as on 31st March 26. As against 7.73% as on 31 March 25, showing a decline of 46 basis points on year-on-year basis. Incremental cost of funds also reduced significantly from 7.73 in financial year 25 to 6.94 in financial year 26, a decline of 79 basis points, and Q4 of FY26, it stood at 6.86 as compared to 7.66 for Q4 of FY25. During March 26, the interest rates were elevated due to the war in West Asia, which resulted in a shoot-up of crude oil prices and the fall of the INR at record level. However, we managed to reduce our interest expenses by more than 150 crores as compared to Q3 of FY26. We also got to reprice some of our outstanding bank borrowings during the last financial year. In the last financial year, 25-26, we raised fresh loans from banks and financial institutions amounting to more than 45,000 crores and raised more than 10,000 crores for LHB at very competitive rates. Out of the total incremental borrowings of financial year 25-26, around 82% were at floating rates. Out of the total outstanding borrowings, share of the floating rate borrowings today stands at 52% as of 31-3-26. As compared to 45% as on 31-3-25. On the technology initiative, the company has launched a project in February 26, which we call the straight-through process. This is basically a machine-enabled credit appraisal process enabling automated underwriting of loans. This initiative is expected to significantly reduce... Manual intervention in the sanction process and enhance overall customer experience through much reduced turnaround times. With this brief introduction, I would like to invite you for your queries. Thank you.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star, then 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and do. Participants, you are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is ended. A reminder to all, you may press star and 1 to ask a question. We will take the first question from the line of Maruk from Tara Capital. Please go ahead.

Hello, sir. So can you talk about your growth outlook in terms of what disbursement growth in individual home loans you expect next year, and even your margin outlook? Your margins did expand in 4Q, but from year on. And then your stage 3 ECL has gone down. So if you could comment on what level you would like to keep it at.

Okay. Thank you, Maruk, for your question. We are coming to the first thing regarding the growth estimates. Well, honestly, Maruk, right at the moment, we are sitting in a very volatile geopolitical situation, right? West Asia crisis going on. Nothing seems to be moving as such. Of course, a lot of initiatives, ceasefire and all that have been taken. On top of that, India itself is being impacted, the energy crisis, as we may call it. The sort of pressure, inflationary pressure on all the other things. So honestly, growth would depend on the geopolitical situation and the economic situation. Yes, growth in last year has been muted. 4.4% was the growth for the full financial year, largely contributed by intense pressure in the housing finance industry. As you are aware, the housing finance, basically we are into the individual home loan segment. Where we are competing with banks and with the repo rate cut of 100 basis points by RBI. The bank's repo rate was immediately reset because their rates are linked to the repo. We had to frantically... Take a call on reducing our rates also, that did impact, of course, there was a time lag, a delay, and us reducing rates, so there was, the impact was felt in the business inflow into the company. So it was a very competitive year last year, which, and the competition did impact the, I would say, the growth, which we received, 4.4% as against double-digit growth, which we were alluding to in the beginning of the year. But yes, that is the way it is going to be. And in the beginning of last year, I clearly said that given a choice between protecting margins and going for growth, I would prefer to protect my margins than really go healthier, skelter for growth. So that is how we have been able to protect our margins. Going forward, honestly speaking, yes, what we are, right Right at the moment, it's difficult to guess what the situation is going to play out. Throughout the year, Q1, definitely, we are targeting a 15% growth for Q1. Going forward, definitely, if the conditions are what they are, a 10 to 12% growth is what I am expecting this year, and I'm pretty sure we'll get there this year. On the margins front, 2.80 was the NIM for the quarter. 2.68 was the NIM for the entire financial year, well within the guidance of 2.6 to 2.8, which we had given in the beginning of the year. February and March were reasonable months. Yes, February, I would say. January and February were good months for us, where we were able to borrow. At very competitive rates of almost 6.8%, but thereafter, February and March, especially March with the West Asia crisis evolving and growing, there was a pressure on the borrowing costs. The costs are still, I feel, elevated. But I think in Q1, we will be able to maintain a margin of 2.6 to 2.7. For the year, difficult to predict right now, but assuming that things remain normal, I would say for the year, a margin of growth, a sort of, a name of 2.5 to 2.7 is what we are aiming to achieve. On the ECL front, yes, on the asset quality front, asset quality has been improving quarter on quarter. Our GNPA ratio has come down from 2.47 at the end of last year to 2.15 at the end of FY5-26, and NNPA is down from 1.22 to 1.08. The provisioning requirements are reducing. As regards settlement, no major big settlement was witnessed except for this one settlement of 70 crores, which we could do in the month of March. So the big ticket settlements are still in various stages of negotiation, expecting, yes, advance information. There is one big account which has been resolved, but as per the Guidelines of RBI, we have to wait for one full year before the, let us call it the resolution of the settlement can take effect in our books. That settlement happened in the month of May of last year, so this year in the month of May, current year, the effect of that settlement will be felt in our books. So asset quality is definitely going to improve much, much Further in the coming financial year, better than what we witnessed last year.

Okay, sir, and I just have one question. So, may I please ask if your successor has been identified?

Yes, my successor has been identified. In fact, a very unfortunate incident took place. The successor who was identified earlier, suddenly passed away on the 9th of May, Mr. Sanjay Jaya, who was the appointed CEO and designated to take over from me. He suffered a sudden hurt on the 9th of May and passed away. Now, we have another successor in place, Mr. Sandeep Kumar. He has joined us just yesterday, and he will be taking over from me on 31st of August, 2026.

Okay, sir. Thank you so much. Thanks a lot.

Thank you. We will take the next question from the line of Kunal Shah from Siddiqui. Please go ahead.

Yeah, thanks for taking the question. So, firstly, when we look at it in terms of the overall repayment and prepayment rate during the quarter, it's been slightly higher outside of the HL loans, particularly on the left side. So, if you can just highlight in terms of how the trends have been in BT out, how has been the repayment rates in the home loan, and why the repayment or runoff rates were quite high in Q4, despite I would believe like there would have been some improvement on BT out during the quarter as you indicated last quarter.

Well, Kunal, yeah. Good morning. If I talk about the prepayment, yeah, prepayment is a natural phenomena in the housing finance industry, right? Along with every EMI, some amount of principal does come in, and then people having extra cash or extra money to spare, they do try to spare off their outstanding loans. So, if I talk about the last quarter, the prepayment has basically been, see, on an average in the company, the prepayment is about, what, 2,000-odd crores every month, right?

Yeah, yeah, no, no. Yeah, I cannot just say about a supplement. For the last quarter, the net BT was around 1,203 only. Pre-payment, by way of lump sum payment for the customer, it is a normal phenomenon of the industry. So, important is what BT or ICT we have paid. So, that is, it is not in an alarming situation. It is quite normal during this quarter.

So, this compared with Q3.

And if I compare BT of Q3, in Q3 BT, 8,916 loans went out of our books, amounting to 2,157.29 calls, right? And in Q4, the figure came down to 6,480 and 1,187.71 calls. So approximately near about 1,000 crore reduction in BT out in Q4. It is not that BT out has increased. In Q2 and Q3, the BT out was significantly higher. Q2, it was 2,838 crores. Q3, it was 2,157. Q1 was 1,341, and Q4 was 1,187. So BT is more or less settled at about approximately, if I round it up to about 1,200 crores in a quarter.

And you know, Kunal, for repricing of this inspection we have issued somewhere in last week of Tuber, so after a Tuber beta out is checked to a great extent. So in the last Q4, it is not so much material.

Got it. So when we are looking at say 10-12% disbursement growth for the full year, so in fact you are suggesting closer to almost like say 73 to 75 or 1000 crores of disbursements for next year. And looking at the current run rate, in fact, still the loan growth would appear to be in a mid-single digit or so. Maybe earlier you have been guiding for taking it towards 8 to 10 odd percent, but is there any possibility, would there be any levers, are there any initiatives which you are taking in order to pull that up or we should see nearly like a mid-single digit growth continuing for a while given this geopolitical situation?

Yeah, Kunal, if I talk about the book growth and the disbursement growth, yeah, disbursement growth was impacted in Q1, Q2, and Q3 of last year, right? If you look at Q4, our disbursement growth is 10%. So this was where we wanted to be for the full financial year, but somehow it happened in Q4 only. And this has continued in the April of Q1 of this year. In April, I have a disbursement growth of almost 20.87%. So, the growth is picking up. Yes, as regarding the levers, yes, we have looked at what we really need to do to really achieve this so-called elusive double-digit growth, which we have been alluding to in the past two, three years. Two, three things we have identified this year, which is going to be totally different from what we have been doing in the previous years. Number one is... All this while, 36, 37 years of our history, we have always been focused on sourcing housing loan assets, or rather the organic... Thank you. Initiative or one step, which I think would help us grow our business as well as our book, number one. Number two is what we are looking at. Traditionally, we have been sourcing business through our agents, right? 90% of my business comes in through them. Apart from them, we have just two corporate agents. One is our own subsidiary, LIC Financial Services Limited, which approximately does about 10% of the total business of the company. And the other is an individual entity or a company called SP Enterprises. This year, what we are looking at, there are a lot of business aggregators available in the market, people like Antromeda and others. We are consciously going to engage with them and try to engage them to source business for us. That would probably give us some volume of business, 4,000, 5,000 crores is what I'm looking for in the first year. That is one. And number three is we have been focused. We have been trying to do affordable business, but it has not taken off in any big way. Yes, we were cautious about it. Consciously, we were going slow because we were aware of the high risk in this segment. And the other thing was that since in the last 36, 37 years, we have never done affordable. It's true meaning of affordable. We've mostly been comfortable doing. IHL, individual home loans to the salaries and the self-employed class. So, this year, a decision has been taken that we need to set up a separate, affordable vertical, something like what P&B has done, the Roshni vertical of P&B. We'll be setting up a similar vertical. The process will start very shortly. It will be completely new, and totally people will be onboarded from outside, because I believe people in our company, we are not attuned for that. So we'll be hiring people from outside. It will be a complete separate vertical, wherein the entire sourcing, the entire... Credit appraisal, the entire recovery, the entire collection machinery will be handled by people who are attuned with, who are experienced in doing affordable business. So that is another. And the fourth is we are increasing our feet on the street, our resources in the marketing We have achieved, we have received an approval of onboarding about 200 people for the marketing vertical. The process will be completed by the end of Q1. These 200 people are about 6%, 7% of the total employee. I have a total employee strength of 2,500, so this 200 will be about 7-8% of the total employee strength. So this also will add to my feet on the street and actually my business push, which I intend to have. So these whole five things which I talked about should give me at least a double-digit growth in the current financial year.

So this is on disbursements? This is on disbursements, yes.

Yeah, on the book growth side, yes, one area we are looking at, or one area we have not been very focused on was on the BT out, right, people moving out. Last year, BT out for the company as a whole was about, what, 12,778 crores. So that's approximately a rundown of almost 1,000 crores per month. This is one area which we need to focus. We have set up a separate, I would say, department, which we are calling Business Retention Department. This year, people have been put in place, and they will be completely focused on the BT out. Any case going out, we'll have to go through this particular, for the people in this department, and we will try whatever is possible on our part, including compromising on the rates we offer. Thank you very much. Hold back business or retain the business which we have because retaining business is always profitable because people going out are not only a drain on the income of the company, but also sourcing new people is slightly more costlier proposition as compared to retaining existing customers.

And, Kunar, net business transfer is around 7,000 crores. Looking to the size of the company, the portfolio is more than 3,20,000 crores. So, net VT out of 7,000, around 7,000 is very normal, I think, looking at the industry practices.

Got it. Got it. Yeah, thank you. Thanks a lot and patiently answering all the questions. Thank you.

Thank you. We will take the next question from the line of Sangeet Cheda from TAM Capital. Please go ahead.

Yeah, hi, sir. Just wanted to check the 10 to 12% guidance that you gave is on a loan growth, right?

Yeah, 10 to 12% is on the book.

On the book, okay.

Yeah, like when I was out, 73,000 crores disbursement is what we are targeting in retail. 4,500 crores disbursement is what we are targeting. That is the budgeted disbursement which the board has given us. 73,000 crores in the 4,500 crores in construction finance or the wholesale book. So total taken together is about, what, 70, here, about 78,000 crores. That is what the budget of the company is this year. So if we get that, that will give us near about a 15% business growth, and that would definitely translate with all the steps we are taking, including retention of portfolio department which you opened. We expect that the BT out, 1,000 crores per month should come down significantly, and that should give me a loan book growth of double digits, 10 to 12% what I'm talking about.

Yeah, so since we are out of the rate cut cycle, you expect the BT out to come down and hence the guidance of 10-12 percent, is it fair to say?

Right? Now, can you come again, Sanjeev?

No, since we are now at the present or out of the rate cut cycle, where usually during the rate cut cycle, we face a lot of BT out, and now you expect that to come down, the pressure of BT outs. Is that the right assumption for next year?

Yeah, at the moment, I think that the rates are more or less fixed. I think there's not going to be, I'm pretty sure, there is not going to be any more rate cut in the prevailing circumstances. I don't think RBI has any leeway to that. On the contrary, there is a possibility if things go, if the situation turns from bad to worse and this West Asia crisis prolongs for another two to three months, you may, I see, I see there could be a possibility of a rate hike, right, in reason. So again, this rate war, you see, the problem with us now, we are competing with banks. My IHL portfolio is 82%. We have brought it down from 85 to 82 at the end of this year. We are trying diversification into the LAP and LRD segment. But, yes, we are still 82% IHL. And IHL also, it is a prime segment, basically, civil score 750 and above. So that is exactly the, I would say, the domain, the territory of banks. So, competing with them on the rate front is proving to be very, very difficult on our part. Banks have an inherent advantage of cost of funds. Their cost of funds are slightly lower. And the likely thing is that we borrow from banks, right? So, basically, we are competing with our lenders, which is a difficult proposition. So, hopefully, yes. Hopefully, I think... The rates are settled. Going forward, let us see what the RBI does, and we will have to match. See, the problem is our banks are totally repo rate linked, right? So there is an advantage for us in an increasing rate cycle. The moment repo rate goes up, bank rates will immediately go up. We do have some opportunity, probably one month and a half. Time frame where we can sit back and probably not immediately hike the rates and probably going for a rate hike at a slightly later stage, which can give us this one month, one and a half month advantage over the banks. So let us see how it plays out, and we'll be waiting for an opportunity and try to cash in on that.

And Sankir, I want to add one more thing. The BT out for the month of March is negligible. BT out, BT out, net BT out, so BT out was 11,000, and the BT in was 1011. So, net BT out is hardly 100 cores. So, looking at the size of this company, 100 cores, BT out, net BT out is insignificant for the company.

Hmm, hmm. This was actually the same.

Yeah, Sanket, yeah, why this is not very clear?

Yeah, I was saying relatively you are right that banks will always be more competitive on cost of funds, but within our peers or the NBSP side of companies, since we have a higher share of capital market borrowings, our cost of funds in some will be relatively slower, right, in a rising interest rate scenario.

Yes, yes, yes. Our cost of funds is definitely much, much less than that of NBFCs. We are AAA rated, which is the highest rating you can get in the industry. So our borrowing costs for the year was 7.27 cumulative and 6.94 incremental. This is the overall rate at which we borrowed in the last financial year. So we expect, yes, as far as the thing is concerned, we will definitely be getting lower rates as compared to NBFCs and other HFCs. So we'll try to take it at an advantage. But again, the problem, as I said, we are competing with banks. So even a borrowing cost of, incremental borrowing cost of 6.94 as compared to the borrowing cost of a bank, including CASA, which probably would be 5.5. And I just feel on the higher side. So we have a little bit of more tightrope walking to do as compared to banks. But yes, we have to be competitive, as I said, because it's because of the line of business, the segment in which we operate, IHL. We have to be competitive. We have to compete with banks, and we'll do that.

Thank you. This year, our maximum borrowing is from banks and at floating rates only. So, almost 82% we have borrowed at floating rates, especially from banks. There is a substantial reduction rate of interest. On an incremental basis, we have banks borrowing at 7.85%. This year is 6.90% only. So, a lot of cost benefit we've got in the current year.

Good morning, everyone. You know, what I was alluding to is that since we have a lot of NCDs, NCDs do typically have a 3-year, 5-year maturity, so in that context also our rate, even if the rate increases, our rate increase will be relatively slower or far as. The last question I wanted to have is that if you can tell us something about April disbursements in terms of how it is versus last April, any sense if you can give.

Now, disbursements in terms of what, Sanket?

April, disbursements in the month of April, how they have paired with last year, like, for quarter, you were saying 15%, but April to April, the disbursement growth would be what?

Yeah, I told you, April to April, my disbursement growth is 20.87%.

Oh, okay, okay, okay. Sure, sir, those were my questions here. Thank you, thank you, thank you.

Thank you. We will take the next question from the line of Abhijit Dibriwal from Modena Roswal Financial Services. Please go ahead.

Yeah, operator, am I audible?

Yeah, I'm not audible. Please use your handset mode.

Yeah, is this better now? Yeah, better. Yeah. Good afternoon, sir. Thanks for taking my question. Sir, two things. One is, during your opening remarks, you have shared that. Domestic mortgage demand has remained reasonably resilient. And then we also shared that almost 20-21% kind of a growth in this burst means that we see in April this year. Just trying to understand, I mean, out of a few real estate companies, developers who've reported, we have started seeing some acknowledgement that footfalls have moderated a little bit. Conversions are now taking longer. Customers are taking longer to make a purchase decision. So just trying to understand have you started seeing any of that in April and May because your growth in April tells a very different story. So, just trying to understand, I mean, what is your view on this?

Yeah, Abhijit, yes. Last quarter also, we grew by 10%, which was significantly higher than the growth in Q1, Q2, Q3. And carrying it forward, in April, we have shown a growth of almost 21%. Right now, the impact of either the West Asia crisis or the, I would say, slightly The reduced outlook for the economy has not yet played out in us. And I think typically the reason is because of the segment we operate in, right? We are mostly into IHL, salaried class mostly. And number two, we are basically, our ticket size is on about 32 lakhs of rupees per loan. So basically we are operating in the middle class segment. So right now in this segment, not seeing too much of an impact. But if this crisis continues, the energy crisis continues, inflation goes up, definitely there will be an impact. The other part of it is, which has me worried also to some extent, is the impact of AI, right? In India, we've been hearing a lot about AI, especially in the Western world. Right now, the impact, yes, there have been layoffs in India, but not to that extent. So going forward, we'll have to be very, very cautious and I would say on our feet and toes in assessing the impact on AI because some of the large centers where I do business, LICHFL does business, are basically centers which revolve around the IT industry, centers like Bangalore, centers like Chennai, centers like Hyderabad, Gurgaon, Pune. So these are centers where a big chunk of my business comes in from. And these are centers which are totally, I would say, revolved around or evolved around the IT industry. So if AI, the impact of AI does impact these centers, it is definitely going to impact my business also. So that is the worry for me. Yes, basically, the share crisis is a worry. Because basically, if you look at the housing thing, especially the segment idealism, the middle-class segment, it is all sentiment-based, right? If I go to buy a house, being a middle-class man, I would first need to be very sure about my future, my future earnings, my capacity to repay. So if there is any doubt, any hesitancy, I would defer the decision to... Purchase a house or take a loan, et cetera, et cetera.

So that could play out.

That could be maybe what is playing out when the developers are saying that we are witnessing slightly lesser footfalls or lesser interest. And the other part of it is most of the developers, at least the big developers, if you see, they are into the semi-luxury and the luxury segment of the market. This is an area where we don't operate in. So there also the sentiment plays a big hand if a person or a businessman or anybody with money sees that. My future income is protected. He's definitely going to go for a 3 crore, 5 crore, 10 crore, even a 100 crore camellia. So that could probably be the reason. Right now, touch wood, we have not been able, we have not felt the impact as such. Going forward, keeping our fingers crossed, hopefully nothing happens.

Got it, sir, that's useful. Sir, the other question I had is I am hoping we have not made any PLR changes in this quarter, which is yet to reflect in the reported years, right?

No, no, we have not made any PLR changes as yet, but yes, considering our cost of borrowing, which has increased in the months of March and April also, probably in the month of June we will have to take a call on what we need to do. Definitely at these rates at these levels of borrowing costs will be difficult to maintain the PLR at the rate at which we are maintaining.

Got it. But just on that, I mean, from what I understand, mostly in the HFC space, we are price takers in the mortgage segment from banks. So unless there is a repo rate increase. Do you think a PLR increase can be pushed through to customers?

Well, if you're analyzing the banks, at least the quarterly results of banks, the NIMS of all banks are under pressure, right? Equity situation tightening, though right now I have said that it is more or less adequate, but I think in the coming times, unless RBI intervenes in a big way, the liquidity situation is going to be tighter. So, again, I think banks also need to take a call as what they need to do with their NIMS, and similarly, if they increase, then being in a competitive segment, yes, as I said, we have a leeway of probably a month, a month and a half, but within a month, a month and a half, we'll also have to increase if you want to protect our margins. Got it. Thank you.

Good thing. Our cumulative cost, as on 31st March, was 7.27, but as of now, there is not an increase in that cumulative cost. Otherwise, there is a dip of at least two bits in that cumulative cost of bonding. As of now, I don't think there is any need of increasing PLR, any risk. Let's see first quarter, then definitely we'll renew it, and then accordingly we'll take a call.

Got it, sir. Got it. And then the last question that I had is... I mean, have you taken any technical write-offs?

Sorry to interrupt. In between, Abhijit, I would request you to kindly rejoin the queue again for my questions. Thank you. Before we take the next question, ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants in the question queue, we request you to kindly limit your questions to two per participant. If you have a follow-up question, please rejoin the queue again. We will take the next question from the line of Ranesh from ICASF. Please go ahead.

Yeah. Yeah. Hi, sir. So, my first question is on the name. So, when you look at the spreads, actually, it fell sequentially and largely due to, you know, continuous asset in contractions. So, just wanted to understand how do you see asset yields, you know, moving, going ahead? Also, considering, you know, we want to restrict BT out. And also, at the same time, we are thinking to modify Taylor, you know, in the next couple of months. So yeah, anything on the asset tail, what do you see, let's say, in the year, Tom?

Yeah, Aral, talking of spreads, we ended the year with a spread of 1.94 and when compared to last year, the spread was 2.06. So yes, definitely there was actual basis point compression in the spreads. But this was expected. We were expecting this because of our competition with banks, the low lending rates, the BT out, the rewriting. And rewriting happens when a customer applies for rewriting at a lower rate as compared to an existing rate. So rewriting almost 40,000 crores of... Business got rewritten, where the rates got reset. We had to reduce our rewriting rates also to keep them in line with the market. Yeah, so it's going to be a challenge maintaining NIMS, I'm telling you. Yeah, but what we are trying to do, cautiously, for the past two years, we've been trying to diversify our business from the predominantly IHL segment into the LAP and the LRD. And I would say I am... I'm reasonably satisfied. In two years, we've been able to increase the proportion of our LAP and LRT business to around about 15%. Last year, it was at about 12%. So this year, there's a 3% increase. Yes, nothing great if you talk about the percentage increase, but definitely a directional. And if you realize, if you understand, right, see changing, you can change products, you can change everything, but changing culture is very, very difficult. So predominantly IHL dominant culture and moving it to LAP and LRD is going to take some time. It's going to take some time, but we are definitely there. We would ideally like to have at least 25% of our business in the coming two years from LAP and LRD, which are marginal creative segments.

So that is the way forward.

And the other thing, the affordable, of course, it will take time because we are setting up the vertical this year. So I expect another two to three years where we can get into the affordable. And the third part is the construction finance. Right, last year was not a very good year for us. There was a negative growth in the wholesale book, largely because of our restriction imposed by the board on We are processing wholesale loans where the developers are rated BBB and above. So that we have addressed. We have now come out with our own credit rating model, wherein this tip of BBB will be removed. And I think in the next month onwards, I think we should have a fairly level playing field for construction finance. Also, that will give us some, because construction finance are, lending rates are slightly higher in construction finance. I think it's more about 11, near about 11%. Right. So, that should help me protect my margins.

Got it. Sir, but if I recall, LRD and IHL yields will be very similar, right?

No, LRD is slightly higher than IHL. We do not, if my IHL starts at 7.15, of course, that is for the top bracket, top-notch, 800 plus Sibyl. My LRD would be starting at 9.25. Right, so there is a big... And that would be what, closer to 10? Starts at 9.25. Average, I would say, would be around about 9.75. On an average, I think LRD would be at 9.75.

And LAP?

LAP would be at 9, average would be about 9.3, 9.4, lower than LRD.

Oh, LAP is lower than LRD.

Yeah.

Okay. Okay. And so, just lastly, on this affordable piece, is there any target in our mind that, you know, let us say by 28, we want to scale this hook to this girl or something?

Ranish, no, right now, no target. Right now, we are planning for the baby to be born. Now, whether he becomes an IS officer or a pilot or an astronaut, we'll see after.

Thank you very much. Thank you.

Thank you. We will take the next question from the line of Subranjshu Mishra from Philip Capitan. Please go ahead.

Hi, sir. So this growth that we are targeting of 10 to 12%. How do we decompose that segment wise? And how much are we expecting for individual home loans? How much for lab? How much for construction finance? Also, if you can give me segment wise yield on books and segment wise DS3 numbers. Thanks. Segment wise yield on books and The number is across three numbers for segment-wise.

Okay, just look at the segment. Yeah, talking about this 20% to 12% growth in the book, as I said. Yes, retail, we will be targeting about near about, I think, 15%, right? That is what the budget is for. The budget of 73,000 crores, last year we had done 66,000 crores. So the budget is around about 15% for retail. Project Finance, we have reduced our budget from 10,000 crores, because last year we just did about 2,000 crores, we have reduced it from 10,000 crores to 4,500 crores, but honestly, I heart says that we should be able to do more, because now, as I said, we have come out with a new credit rating model, which does not put this obstacle or limitation of triple B rated companies, so I should be able to get a fairly wider pool. To source my business from, although we have set it at 4,500, I expect at least 6,000 to 7,000 crores from my project team to come put together. LRD, last year we have witnessed a growth of LRD and LAP, we have witnessed a 25% growth. That is not contributing to too much of my book right now. But LRD and LAP, I would say, I would expect this 25% growth rate to continue. In fact, I would expect it to accelerate because slowly, slowly, as we've been doing it for the past two years, there has been a visible momentum shift. No, 15% growth in retail, and ultimately, at least... That's the minimum target which we have to achieve this year.

So, Pranshu, just I want to add, you wanted to know the segment twice each, so just in the cumulative yield on the IHL is around 9.03% for the cumulative yield, and for non-housing in the user that is 10.05%. And for other... And project loans, it is 10.56% on cumulative basis. And in totality, it is 9.21%, our cumulative is for the as-on 31st March 26th.

And DS3, sir?

What rate? Block phase 3, segment-wise? Yeah, IHL is 9.03%, cumulative is as-on 31st March 26th. No, no, no, no, no, no. Pardon?

Stage 3. Yes, sir, yes, not stage 3, segment-wise.

Stage 3, segment-wise. You mean, stage 3, stage 3 NPA, you mean? Correct, yes, sir, yes, sir, yes, sir. Just, just, segment-wise. So, stage 3. For individual loans, it is 1.03% only, individual loans, and for NSC, it is 20%, 20% plus, 21.02%, or NHI, it is 3.5.

Right, right. And sir, if I can just squeeze them one last. 3.02%, sir.

3.51. NHI is at 3.51%. Non-housing individual.

This is basically your lap and halage. This is 3.51.

And in totality, phase 3 is 2.15%.

Understood, sir. And if I can just squeeze in one last question, sir. So, LIC holds a large stake in IDBI bank, and of course, it holds us as well. If there is any discussion at the board level of a merger, then we get that cost of fund advantage as well, right? So, we don't have to compete with the banks anymore.

No, no, no. That has, I think, your... IPAM has already run with no merger of IDFC, no, sorry, IDBI with LIC. They are not allowing that, though, ID... But isn't that logical, sir?

This will, you know, reduce the pressure of the funds, sir?

No, no, agreed. If you have some lobbying skills, you can lobby with RBI and tell them to permit, as well. Regulator has to permit, no, Subranshu?

Professor, we are the right person to answer this question, and basically it belongs to LEC. Because the regulator has to permit.

The regulator is not permitting, neither RBI nor IRDA. Understood, sir. Understood. This is very helpful, sir. Thank you so much.

Thank you. Before we take the next question, a reminder to all the participants, kindly, let's take your question to one more participant. We have the next question from the line of Kaurav, Ghad Elwal from J.P. Morgan. Please go ahead.

Hi, good morning. Thanks for taking my questions. I've actually got two questions. One, on the corporate NPA resolution, how much is the amount pending? What is the size of the resolution that you expect to book in May? And any more clarity on when can we expect rest of the resolutions to take place, sir?

Well, if you look at the corporate NPA, our page... Prina, just a minute. Where is this again? No, that is 20.91%, he is wanting this volume, volume, volume of total NPA, a breakup of total NPA.

So, Gaurav, Gaurav, yes, for the corporate and budget of our NPA, exposure and deposit is under stage 3 is 2837 crores.

Okay, and any timeline?

And the corporate NPAs, as I've been saying, corporate NPAs, these are a difficult piece to resolve because most of these are companies and they have their own legal teams. They're very adept in putting a spanner in the works. Yeah, but then a lot of work has gone in last year, especially the big NPAs in the corporate sector, which we have. And we did resolve one, 70 crores through ARC sale in March of last year. There are others lined up, and I believe Touchwood Q1 of the current financial year should be good. Another piece of news in advance is that we have gone in for a resolution in one of the big corporate NPAs where the resolution has been finalized in May of 2025 as per RBI directives and guidelines. The effect of that resolution can only be taken after a curing period of one year, so May 2026 is when that resolution, the effect of that resolution goes into my books, so that would reduce my NPA as well as reduce my provisioning significantly. I cannot give you the exact figures right now, but overall, I think corporate NPAs are... Well, on the way. Just keeping our fingers crossed, lots of cases in the DRTs and the NCLTs, which usually takes time, as you know. But again, many of the people whom we have taken to NCLT and DRT are wanting to settle. Of course, the moment we get a proper settlement price, which is, I would say, acceptable to both. Then the resolution does happen. And on top of that, ARCs, yes, we are pursuing ARCs. There have been just two ARCs sales so far, but we are trying to rework our ARC policy, try to be slightly more accommodative when possible, and try to offload bigger chunks of our retail NPAs, especially in the retail segment, and specified NPAs or difficult NPAs in the corporate segment. So all put together, all these three efforts would result in a significant improvement in my asset quality, provisioning requirements, and the overall improvement in the asset quality.

Thanks for that. That's very helpful. But if I just look at the bigger, the larger picture, how are you internally thinking about the ROA in FY27? So we ended the year at 1.78 in FY26. From your comments, margins likely NIM is going to go down. You're going to do more of third-party distribution. So that's an addition in the cost. BSA loans would cost anywhere between 50 to 100 basis points on disbursements as a percentage of the disbursement amount. Credit costs at best stays flat in FY27 or potentially moves up. In that context, how shall we think about ROA for FY27?

No, credit costs, see, as far as NIMS are concerned, yes, we have given you a slightly lower guidance, but we would be looking at maintaining the NIMS at this level, because, again, you'll have to see, yes, cost of borrowing is up, but then, as I said, we'll have to take a call on the cost of lending also, and that should happen quickly, number one. Number two, ROA 1.78 for the year, right? This year, what guidance should I give you? 1.75 to 1.80 in the ROA? Under the existing circumstances, if things improve or think better, we'll be looking. The target given by the board is two. Target given by the board is two. Right.

Got it, sir. Okay. And any plans on increasing dividends?

Well, dividends we have maintained it last year. We had increased it from 450 to 500, right, 10 rupees per share.

Yeah, but going forward, any discussions at the board level? Because if ROA, well, if ROA, let's say, is flat up in F527, ROEs have been declining. So has there been any discussion on whether you want to increase payout to hit that 15%, 16% ROE mark?

Well, yes, there was a discussion in the board yesterday on this. Yes, certain board members were of the opinion that we should increase dividend payout, and other board members were of the opinion that maybe we could find other ways of, let me say, rewarding investors. But nothing, no decision has been taken. But let's see, going forward, how it goes, how it goes, because this is a call to be taken by the collective board altogether.

Perfect. Thank you so much.

Thank you. We will take the next question from the line of Rakesh Kumar from Valentis Advisors. Please go ahead.

Hello.

Hello.

Yes, you are audible. Please proceed.

Yeah, yeah, thank you. So, firstly, the question with respect to affordable housing. So, what is the credit composition that we are looking at, like, so, like, you referred the name of PNB housing, like, where we have seen composition rising from 2.7 to 9.4 from, like, year 24 to year 26 March. So how do we see affordable housing mix changing or, like, you know, increasing because it is not there right now? So how do it look like maybe one year down the line?

Rakesh, honestly speaking, see, the baby has not yet been born, right? So we are first looking, getting the baby born and then seeing whether it is healthy or not, how it shapes up. So honestly speaking, right now we have no... Targets in mind for the first year. Yes, eventually we do realize this is a segment as a company we have to be in. We also realize that this is a segment which is completely new to us. And so we are cautious that we should not jump into it head first and burn our fingers or burn our heads, if I may say so. So we will be taking a thing. We'll be setting up the vertical, and I said this vertical has to be run by people who are experts or who have experience in running or working in the affordable segment vertical, right, affordable segment. So, honestly speaking, yes, in the long run, we would expect this segment to contribute significantly to the business of the company. But right now, we have no targets. We have not set any targets.

Got it. Just one small question. Like, you know, if we look at, again, in the declining interest phase, we have seen, like, our funding costs, you know, going down by 46 slips, and credit yield going down by around 58 slips. So, assuming, like, you know, from the next year onwards, if we see rising interest rate scenario, so would we see the reverse, like, and to what extent possibly?

So, looking into the very competitive scenario which we are in, right, competing with banks, so I do not see a major reversal happening with the interest rates going up, because, yes, interest rates going up, It does give the housing finance companies the benefit of slightly... Higher rates or higher spreads or higher margins. But then again, if you have to compete with your competitors, you cannot do things which are completely different from what they are doing until and unless you are able to enter into segments into which your competitors are not very comfortable with or not very, I would say, focused on. So that is precisely what we are trying to address from the two fronts. Number one, knowing very well that IHL is our forte, we are not going to, I would say, dissuade people from doing IHL. Rather, we would say we would try to encourage people to get into LAP and LRD more. We have done that. The rate of commission we are paying on LAP and LRD is slightly higher differential as compared to IHL. And there has been a visible shift, as I said, about 15% business coming in from there as compared to 12% of last year, so 3% increase in one year. Going forward, as this momentum picks on, people become more comfortable with selling LAP and LRD. I expect this percentage share to increase further. So, these are margin creative, right, as compared to IHL, because IHL is something which is giving me the lowest margins and lowest spreads. So, these are margin creative, so that is the segment we are trying to focus on, but cannot happen overnight. We have a company for 36 years doing IHL, we cannot suddenly expect them to suddenly shift to whole hog to LAP and LRD. It's going to be gradual, but definitely, directionally, we are there. We would like to increase the pace, of course. That will probably give me a slightly better spread and maybe they help me to maintain my margins, which I have declared this year. My name's.

Dracish, I want to write one more thing. You know, our spread is 1.92%. If you see the industry average, it is on a better side. So if we are able to maintain this similar spread, then I think that definitely our margins, our name would be better in the current coming Thank you very much.

Ladies and gentlemen, we will take that as the last question, and with that concludes the question and answer session. I now hand the conference back to the management for closing comments. Thank you, and over to you, sir.

Yeah, thank you, friends. Thank you for joining us on this conference call. We have outlined what we feel are going to be our strategy or our process in the coming financial year. And as I said in the very beginning, with the volatile situation, the geopolitical uncertainty in the markets right now. We are keeping our fingers crossed. We are looking at whatever is happening in the geopolitical world and also on the economic front in the country. Hopefully, things should turn out for the better because, again, we are a global – this is a global – this crisis affects the entire world. I'm sure the world leaders would get together and try to get out of this crisis rather than sticking on to their egos. So, hopefully, we started the year well, and we have... Hopeful. Not only hopeful, I think we are positive that this year is going to be a better year than last year. Looking forward to meeting you at the end of Q1 and discussing and analyzing the situation further. Thank you all. Thank you for participating in this conference call.

Thank you, members of the management. On behalf of Access Capital Limited, we conclude this conference. Thank you all for coming with us today. I am in our Disconnect Your Life. Thank you.