Bajaj Housing Finance Limited (BAJAJHFL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Bajaj Housing Finance Ltd. Q4 FI26 Earnings Conference Call hosted by IIFL Capital Services Ltd. 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 phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Viral Shah from IFL Capital Services. Thank you, and over to you, Mr. Shah.

Thank you, Nirav. Good evening, everyone. This is Viral Shah from IFL Capital. Welcome to the 4Q F526 earnings conference call of Bajaj Housing Finance Ltd. On behalf of IFL Capital, I would like to thank the management of Bajaj Housing Finance for giving us this opportunity to host the call. From the management team today, we have Mr. Atul Jain, Managing Director, Mr. Gaurav Kalani, Chief Financial Officer, and other senior members of the management team. We will have opening comments from the management team, post which we will open the floor for Q&A. With that, I would like to transfer the call to Atul for his opening remarks. Over to you, Atul.

Thank you, Virad, and the ISPF team for hosting this call. A very good evening to all the participants I have with me Gaurab, our CFO, Jasminder, Vipin, and Pawan, SBU heads for Prime, Mayor Prime, and commercial, along with the other senior team members. Now, I'll be referring during my conversation on the Investor Deck, which we have uploaded on our website and on both the stock exchanges. I hope you had a chance to go through the same. I'll take approximately 10 minutes to quickly cover important panels on the deck with focus on key updates for the quarter, and thereafter we'll open the forum for Q&A. Moving to first panel number three. Overall, a good quarter across AUM, asset quality and operating efficiency, where AUM grew 23%, crossing 1,40,000 crore of AUM during the quarter. PVT grew 20%, while PAT was up by 14% due to one-tank tax benefit of 34 crore in Q4, FI25, excluding which normalized PAT growth also would have been 20% for Q4, FI26. OPEX to NTI has improved to 19.2% in the last quarter, compared to 21.8% in last quarter of FI25. While asset quality has remained stable with GNP at 27 beeps, which is stable sequentially, while year-on-year there was an improvement from 29 beeps to 27 beeps, net NPS remains at 11 beeps and annualized trades costs at 19 beeps during the quarter. Geographical network of the company now spans across 226 branches and 182 locations. The company maintains comfortable capital adequacy, position with car at 22.46%, and PBC at 60.88%, both above regulatory thresholds. I'll move to the next panel, which are having quarterly financial indicators. We've already covered overall AUM growth. AUM addition during the quarter was 7,294 crores, as against 6,370 crores in Q4-FI25. At a product level, for home loans AUM grew 18%, 24% in LAP, 44% in lease entry discounting, and 13% in DF. DF AUM growth was subdued as we continue to see higher cash flows from the funded projects. Portfolio composition remained well diversified with home loan being dominant products with 54.1% mix, LAP at 10.8%, LRDA at 22.4%, and DF at 11.5%. Disbursements on a wire-wire basis grew 23% from 14,250 crores to 17,506 crores. On a sequential basis, disbursement growth for this quarter was 6%, which improved against 4% growth in Q3. So Q3 to Q2, the sequential growth in disbursements was 4%, while Q3 to Q4, it was 6%. Last year, in the Q4, we had seen higher sequential growth versus Q3. At 13%, it was driven by two REITs and large commercial transactions. I move to the next panel. Well diversified with money market composition at 49%, bank borrowings at 41%, and NHB refinance at 10%. Gross spreads overall have modulated by 10 BIPs to 1.7% in Q4FI26, comparing to 1.8% in Q3FI26 on a sequential basis. This was pertaining to portfolio yield reduction by 14 BIPs from lower acquisition pricing as well as portfolio attrition of a higher Partially offset by 4 BIFs due to the benefited cost of funds, thus resulting in the spread compression of 10 BIFs. Interest margin for the quarter dropped by 12 BIFs sequentially from 4% in Q3 FI 26 to 3.8% in Q4 FI 26, largely due to moderation in net interest income, as I explained above. Opics to NTI, which we have covered in the previous panel, improved to 19.2% in Q4 FI 26. I'll move to panel 6. Asset quality continue to remain healthy with GNP in line with Q3, FI26 at 27 bps and NNP is also able sequential at 11 bps. Annualized trade costs for the quarter was 19 bps as compared to 11 bps in Q4, FI25. This is only on account of on a y-o-y basis we have strengthened our provisioning coverage on stage 2 assets. If we exclude the strengthening of provision which you can see in the provisioning coverage at stage 3, we have improved our If you exclude that, then the overall credit cost would have been 10 beefs against 11 beefs of last year, by and are stable. Profit after tax as called out grew 14% from 587 crores to 669 crores, while excluding one-time impact it grew 20%. Annualized ROE was 2.3% in Q4 Fi 26 compared to 2.4% in Q4 Fi 25, while ROE was stable at 1% in Q4 Fi 25. As of March I will move to panel number 7. This is a new panel in the deck to share and update on actual performance as against the FI26 as we had shared in July 25. All metrics were in line or better against the initial assessment as the company performed well across EUM growth, OPEX, asset quality, and return metrics. EUM growth was at a higher end of assessment range at 23% for the year amidst competitive intensity and also increased portfolio attrition. Company managed NIM moderation with 7 BIPs as against our initial assessment of 15-20 BIPs on account of higher fee income and assignment income than planned. OPEX to NTI improved to 19.7% against 20-21% of initial assessment. Asset quality also improved with GNPA remaining at 27 BIPs and NNPA at 11 BIPs against 35-40 BIPs and 15-20 BIPs respectively what we had estimated. ROA and ROE were also ahead of the initial assessment for the year when we published the assessment in July 25. I'll move to panel 19. I have talked about majorities of quarterly metric on the previous panel. In terms of other metrics, net interest income grew 15% in Q4 F26, while net total income grew 20% on YOY basis, quoted by higher P and assignment income. Coming According to full year performance, net interest income grew 25% to 3752 crores in FI26 and net total income increased to 4391 crores, a growth of 23% over the previous year. OPEX grew 16% to 867 crores. Pre-provisioning operating profit was up 25%. Overall PBT grew 20% and PAD by 18%, excluding one-time impact of tax benefit last year PAD was also up 20%. OPEX to NTA improved from 20.9% to 19.7. This is a full year against a quarter number what I was saying. Improvement of 120 beeps on a year-on-year basis. Credit cost for the full year was 17 beeps against 7 beeps in FI25. Last year we had an overlay release of 60 crores in FI25. If we exclude, then the credit cost for FI25 would have been 13 beeps. And if we exclude the strengthening of provision, what we have done in stage 2, we would have been by and last stable in the credit cost for the current year versus the last year excluding overlay release. ROA has called out stood at 2.3% against 2.4% and ROA at 12.1% in FI26 compared to 13.4% in FI25. FI25 was a partial year for the capital birth. Capital birth happened during the middle of the year. That is where the amount of capital on an average deployment was lower. Moving to panel 21. On the portfolio yield, it has contracted by 14 BPs on sequential basis as I called out earlier. Co-op reduced by 4 BPs resulting into moderation of 10 BPs in the spread. Other metrics we have already covered on the previous panel. I'll move to next panel, which is 22 panel. The company continued to have a diversified borrowing mix with focus on longer-term funding, enabled by highest possible credit rating of AAA's table, and relationship with 18 banks. Sequential basis, bank borrowing mix has improved by 1.4%, or 140 bps, CP by 110 bps, and NHB refinance by 120 bps, which was a reduction of in NCD mix of 370 bps. So 140 bps of a bank increased, CP of 110, and NHB refinance of Moving to panel 25, portfolio mix remains well-diversified across products with sequential increment in LRD by 50 pips and LAP by 10 pips, offsetting reduction in homerooms by 50 pips and construction panels by 10 pips. I'm on panel 27. Now, this new panel we adapted last time to provide an update on Sambhav housing, which covers our product constant and target metric. Dedicated front-end teams are deployed for both near-prime and affordable businesses with differentiated underwriting models. We have centralized hub-based model for near-prime while having a regional ups for affordable. Sambhav loans now are acquiring range of 400 into 425% of average monthly disbursements during the quarter, the quarter gone by. And business is well on track to achieve 600 plus of a monthly disbursement over next 12 months as we called out in the last update. Business is operational across 73 locations at 72 tier 4 locations. This business has an ATS of 28 lakhs with solid customer segment mix at 68% and customer having SIBL score of greater than 750 at around 65% in quarter 4 FY26. I'll move to panel 31. Stage 1, assets increased by 1 BIPs on a sequential basis from 99.36 to 99.37. Stage 2 improved by 1 BIPs, sequential to 36 BIPs. GNPA in line with 27 BIPs and NPA I'll come to the last, which I'll cover as a panel with panel number 32. Healthy provisioning coverage across products, which is above 50%. In terms of sequential movement in product Thank you very much.

We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the attached on telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use hand steps while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Participants, you may press star and 1 to ask a question. The first question is from the land of Shabrancho, Mishra, from Philip Capital.

Please go ahead.

Hi, Atul. Hi, Gaurav. So, quickly, what if the home loans are the percentage of Asian, nearly 54%, that's because I think in the last quarter we were at around 50.7. The second is, we'll be growing the non-home loan part a little faster. My sense is that we still have a BTO of pressure on our book. So, how do we look at the prepayments? What are the levels of prepayments? And of that prepayments, what would be part payments, foreclosures, and what is the actual DT out from the customers? And who is this DT out going to? Who are the major competitors where it is going to? Thanks.

Thanks, Shubhraanshu. So the first question on the IHL, I think IHL we... 50.45. 50.45, because that's not home loan, there's an IHL definition, which is a regulatory definition, where we are required to be 50% of the total assets, which includes the investments and the cash flow for what we hold. So that number is 50.45%, which is a regulatory number, which is different from the home loan composition of the balance sheet. Your second question that non-Homelan had been growing faster, yes, prepayments in HL, quarter 4 had been the same trend as it had been on the quarter 3, so it has not come down, and the BT out rate also remains in the same range of what we had, that is attrition is 20, BT out would be in the range of 10%, BT out range will be 10%, so out of a total attrition of a 20%, BT out will be 10%, The rest would be on account of a sell-down, sale of property by the customer, or the part payment, or the natural attrition, because on the lower interest rates, customers have increased their EMI. The reason for non-homalian, because at an industry level as well, if you look at, this is the data which we got last published on, IHL growth in the industry is close to 9.5%. So, at a 9.5% IHL growth, and if our ambition is to grow much faster that, which we have put out at 21 to 23%, naturally, the opportunity in the non-HL will be better or higher, which we can manage through still the PBC mix by ability to assign out the non-HL portion, which is precisely the strategy what we have followed during the last one and a half, two years.

Who are these competitors who are getting BT out?

So, this is largely the banks. Public sector banks are the largest companies, followed by HDFC or ICAC. So, the largest is public sector banks. I don't have the mix right now, but I think the largest part of the loin share is public sector banks.

Understood. Just one follow-up question on the IHL part. It has been contracting despite doing the assignment of the non-HL. So, one, are we likely to get some kind of a regulatory observation because it's been contracting? It's just a speculative question I'm asking. Second is that, can we also do portfolio buyouts of individual home loans, which props up this

The question is, because the regulation says 50 and 60, as long as you are above 50 and 60, there is no ticker from a regulator which can be there on the number what should be there, because that's a regulation. So we remain, there has not been any single month because this regulatory report has to be submitted every month, not at a quarter or a year. We have been submitting this report at every end, every month, and there is no single month till now in our history. We have not maintained the regulatory requirement. And yes, that portfolio acquisition can be pursued, co-lending can be pursued. We have looked at in the current year, we will look at a co-lending to add on to that. But that co-lending or the full purchase cannot address a very large part. Because see, our overall acquisitions are very high. Our acquisition growth in the home loan also had been very high. Thank you very much. We are looking significantly to keep on expanding in our sum of loans as well as in the prime housing. So, we will focus largely on organic, but inorganic in terms of a portfolio, we are looking at it, but that doesn't, that won't move the needle. That's what I'm saying.

Understood. Thank you so much, sir. Best of luck for answering the questions. Thank you. Thank you.

Thank you very much. Ladies and gentlemen, you may press star and one to ask the question. Next question is from the man of Kaurav, Khandilwal, from J.P. Morgan. Please go ahead.

Hi, good evening. Thanks for taking my questions. I've got a couple of those. First, on the margin decline by 12 basis points, a lot of this came from asset yield decline. Can we know which product segments you drove this? Was it largely home loan, or have you also seen some sort of decline in the corporate, On the non-home profit side, and what was the lowest sourcing rate in home loans in the quarter? That's my first question, and I've got one more after this.

Yeah. Hi, Gaurav. So, two questions we have asked. So, margin decline of our 12 beeps is largely led by lower acquisition price, and also 15 beeps of a pass-through what we have done in our PLR in December. So, the full impact of that 15 bips of a pass-through, what happened in terms of, in December, came in the current, also 25 bips on the repo side. Yeah, and 25 bips on the repo side, which repo cut was in November, because there is a 15,000 crore, 17,000 crore of a portfolio, which is repo link. That pass-through had happened in December, because the November policy cut happened, 1st December. Then the PLR cut of 15 bips had happened in mid of December, which have passed through on the current year, current quarter, the full impact on the margin has come. Now, the home loan versus non-home loan rate differential in terms of yield. Yes, quarter four in home loan, the acquisition front, the yields have compressed because of a competitive intensity. Q4 is normally a high competitive intensity market and the yields, the acquisition prices come down to a certain extent, but it is also resulting from a change of a mix. If you look at, see the largest mix or the highest margin product in our balance sheet is construction finance or developer finance. That has grown 13% versus one of the lease, versus home loan which is lower margin or a lease rental discount which is a lower margin has grown faster. So the change of a mix, it is not an individual product but a change of a mix also which plays a bit of a role in terms of a margin movement. The lowest sourcing is in line with whatever public sector bank lowest sourcing will happen. I will not have the exact number, but in the prime housing, we exactly compete with all the banks, including SBA, HDFC, up front. So, it would be absolutely in line with whatever the banks are happening.

Got it. And given what we know right now, is it fair to assume that at least for first quarter, the yields should broadly remain stable if not fall down?

So, yields in quarter one, there would be slight compression we will see there also. While cost of one side also, we will see some marginal benefit of 3 to 5 basis points, but on the yield side, we may see a slightly higher effect.

See, because the current acquisition pricing in month of April, we have not seen the banks moving the needle on there. The current acquisition pricing remains in line, more or less in line with what was quarter four. A slight uptick in small compression may or may not be there. It would be by and large sideways. That's what I can say.

Got it. Okay. And the other question is slightly on the medium term.

In the interest of transparency, since you asked on a quarter one, through the year we are likely to see some compression because largely the new acquisition, as the old acquisition keeps on attracting, normally interest rate reduction cycle impact is not only in the current year but in the next year as well. Because the book which has got accumulated during the last year is a lower margin book and a lower priced book. And the book which is going out is a higher price book. So through the year, we will see some contraction in the margin, which will get partially offset by OPEX efficiency and partially offset by lower loan losses. Because last year, we have strengthened our provisioning coverage both on stage 2 and stage 3. Normally, otherwise, the 17-bit would have been a 10-11 bit. So, some benefit you will get from there, some benefit you will get from better OPEX efficiency, which, to a large extent, offset the impact on the yield compression. For the year, it will happen. Quarter 1 can be sideways from Quarter 4. But for the year, as the portfolio keeps on going up, new portfolio, which is at a lower rate, keeps on going up, there will be some impact.

Well, thanks. This is very careful, and this brings me to my next question, Because we ended the year at 2.3 ROA, your medium-term guidance is 2 to 2.2. So in that case, given what you're saying, some limb compression offset by cost efficiencies plus hopefully better credit costs, plus leverage should also increase slightly in FI27. In that case, FI27 could be another year when you are above the medium-term ROA guidance. Is that a fair conclusion?

We should be towards the upper end of the medium-term guidance. It may not be that. Leverage doesn't have an impact on the ROE. In fact, it compresses the ROE. But ROE, it will improve to a certain extent. But we should be in the medium-term range with a bias towards the hitting the upper end of the medium-term range in the ROE, which is our computation. But of course, I must follow the current times are very volatile. We will come with a, we last year also gave our full year assessment along with the quarter one call. This year also we will give a full assessment for the year along with the quarter one call. But I am answering broadly because I thought the interest of transparency, since you asked for Q1 and I said the Q1 is largely going to be stable, I did not want it to lead to impressions saying that we are saying go forward also stable because we estimate in full year it will have some impact. So that's where I just elaborated on the question.

So, effectively, then some decline on margin is what will take us to closer to the 2.2 ROE mark from the 2.3 ROE mark.

Yeah. So, 10 weeks of a kind of a differential in ROE is likely to happen in case of a… But, see, there are many ifs and buts. That's why I said that quarter one we will do. If there is a policy rate change from the regulator, we generally will not have an impact. Because then the ability to pass on will be there. We are assuming a scenario where the money market rates are higher, but the policy rates are not moved up, so our ability to pass through is not there. Now, if the ability to pass through is there, which is in case of a policy rate change scenario, then that scenario will not apply. That's where I said, Gaurav, we'll wait for quarter one, because there are too many balls in the air as of now, so we'll wait for quarter one.

Absolutely, I understand. I'm sorry. The final housekeeping question, what is the duration of your money market borrowing.

We generally borrow between three years to five years. Generally, we borrow three to five years with some part of ten years. But last year, I think, generally it was three years and five years. We generally borrow three years and five years.

This is just the money market?

This is NCDs.

Yeah, no, exactly, sir. I wanted to know the money market duration. How short is it?

No, no, CP is hardly two, three percent of the book. CP is how much of the book on 31st? Five percent of the book. That's three months to one year. That I don't know. Average would be around five, six months.

Okay. Got it. Okay. Thanks for that. Thank you.

Participants, you may have started in one to ask a question. Next question is from the line of Raghav from Ambed Capital. Please go ahead.

Hi. Good evening. And thanks for the opportunity. I have a few questions. One, can you give me the segment by Onbo P.H. for the full year, If you can divide this, you know, between home loans, LAP, developer finance, and LRD, that would be very helpful.

So, broadly, at a portfolio level, Raghav, home loans would be around 850-860 corridor, LAP would be around 150 basis points above that, LRD around 798% corridor, and developer finance would be 11.5-11.75 corridor.

And can you help me understand at what rate are you borrowing from the NCD market? I think the last issue that you would have done in January was priced at 7.1%. What would be the incremental rate on NCDs if you were to borrow today?

Incremental rate, Raghav, works in two ways. So, like, let us say in December, November, January, we would have been borrowing only fixed and not covering it through our ORs. Now, in last month, whatever we have borrowed as a three-year NCD, the coupon rate is 7.6. However, you match it with OIS because now then you convert fixed to floater. So, the rate is, there is OIS opportunity. So, in the current scenario, where the fixed pricing is higher because of volatility in the market, we largely take the fixed money and then convert through the OIS to a floater, which is completely competitive. Competitive with the bank rate, so tell me.

So, does that effectively result in a lower overall cost of funds?

Much lower. Much lower, but the book gets converted to floating. So, it's not a fixed money, but you get it converted to a floating near to repo. It gets converted to in a floater sub 7%.

And then, I think for this quarter, your cost of funds is somewhere around 6.99 or 7%. I think that's what I saw. I think you mentioned that you expected to go down further. Now, how would that happen that your cost of funds will decline further?

It will be marginally sideways, like we are saying sideways, 2-3 bps of a reduction should come because there is some reset of the boring, like there is an NHB reboring, and also the maturity of a older, higher cost N2Bs in the first quarter, which even in the new rates, when it gets substituted, there is some release which comes. Partially, it will get offset from a higher cost of new borrowing in the quarter 1, which we are seeing in the current market there. But still, at an overall level, we should see a minor reduction, sideways, but a minor reduction towards a minor reduction in the cost of in the quarter 1 from quarter 4.

And just last question, the incremental average would be plus 8, plus

average, because this is inclusive of near prime, affordable prime, everything put together. So incremental will be 8 to 5, 8, 10. I think that there will be credit competition, but not resulting equally to ROE competition, because partial offset into the loan loss and partial day, but still ROE competition of around 10 days. But that will depend, like I called out in earlier call also, depend upon how does the policy rate environment happens. We are assuming no policy, that we don't have an ability to pass on the cost of fund to the market. If we have an ability to pass through, then the impact can be positive.

Understood. And say, for example, there is a reparate height. Do you think that considering the comparative intensity out there and the moderation in real estate sales is so high that even though there may be a reparate height, the industry will still not want it?

In case of a policy rate height, in any case, we are assuming that what we normally see from month of May onward in the year, generally the rate is tend to harden up from what it That's a normal pattern in the industry. Leave that aside as well, but if there is a policy rate hike, it has never happened that there is no pass-through has happened. The pass-through may not be full, pass-through may be 10-15 weeks instead of a 25 weeks, but it is not a scenario where banks or anyone will not pass-through when there is a policy rate hike. There's a transmission of a hike in the cost, which gets reflected in the portfolio, not exactly apple to apple, not 25 to 25 pips, but let us say 15-20 pips, which will be there.

But portfolio will completely get reprised, so a large portion on the repo side of the repo rates increase, then it will.

And in case there is a repo hike, the spreads would not compress, would that be the right understanding?

Yes, because the ability to pass through the cost of fund, because today we are assuming whatever the incremental cost of fund in the money markets is there, because in absence of a repo rate hike, we will not have an ability to pass it through. That means we are factoring the scenario there, we are absorbing that impact, but in case of a policy rate hike, then that ability to pass on is there, so there will not be a compression.

That's all from my side, and thank you for all the answers. Thanks, Rathabh.

Thank you. Participants, you may press star and one to ask a question. Next question is from Manu Viral Shah from IFO Capital. Please go ahead.

Yeah, hi, Atul. I have three questions. One is, first of all, if we assume, let's say, there is no repo rate hike, do you, first of all, see any need and requirement for, say, reducing the PLR rates further, given what is currently there in the market, competition, elevated GSEC yields, etc.?

So, Viral, if there is no repo rate hike, I think the scenario of a cut-off rate is over because if we are looking at two cost of funds to marginally inch up, the marginal cost of fund is already up in quarter four, and it is, given the April also, it's looking up, and even on the portfolio repricing, what we are looking at is not sideways, what we called out, and from a quarter four, it will start to inch up in case there is no money market remains as it is. So there is no pass-through further is what can be invested in the current scenario in case of a, until and unless the market, because in these days, I don't know whether you should be predicting markets or not. So if the markets completely turn on their head and there are, so we don't know. But on the normal scenario, there is no, in case of a, I don't think there is any cut scenario further in the PLR, which is invested as of today.

Got it. And on the OIS piece that you mentioned, the one that you are using to, say, convert the fixed into floating, how will this behave in, say, a rate hike scenario? And secondly, basically, what is the share of currently, say, on a behavioralized basis, the floating rate loans, or rather the borrowings, I mean?

Floating rate borrowings are today, that is including the OAS portion. So, 63% is the floating rate borrowings, which includes the OAS portion. Now, this gets converted to fixed to floating meals and it remains, if you are holding till maturity, it behaves like a floating rate book. So, whatever the policy rate movements is there, that will move on from there on.

Got it. Atun, my second question is with regards to the stage 2 PCR increase that we did, was it purely just a strengthening measure, or are you seeing any trends in terms of, say, early delinquencies, etc.? Because some bureau data analysis was showing early bounce rates. Not now. This is still a 3-4 month old scenario and thing that I am referring to. But do you see any of those things in your portfolio? And secondly, is it about the stage 2 PCR increase?

So, in our portfolio, in all the metrics, whether it's the first bounce or first 12-month bounce, early bounce, whether it is prime, non-prime, affordable, LRD, in any case, we don't have LAP. All the bounce metrics also are showing a downward trend. We map our portfolio, bureau spread, bureau, at a portfolio level, on a quarterly, we do a scrub to see where portfolio stands. It is showing improvement quarter on quarter, every quarter, including on March 26th, it is showing improvement. So there is no micro-level stress we are seeing. Given an overall macro scenario, we just thought that instead of creating any other overlay, then which creates another problem, we just thought that it is better that internal stage 2 assays, because stage 2 assays in any case we know are in, they are not stage 1, they have moved to a certain kind of a difficulty level. Just to protect ourselves, we just thought that we will increase our stage to cover. From a prudence point of view, from the current market scenario, current macro environment. No micro input has gone in this.

Got it. And for April month also, you are seeing similar trends in terms of bounce rates, etc. Absolutely same. Absolutely same.

Got it.

And my last question, just more of a data-keeping question. What's the size of the Sambhav book now? Last quarter we mentioned around close to 5,000 crore plus, and the mix of it between affordable and near prime?

So, close to 9,000 crore is the Sambhav AVM now. 9,000 crore is the Rambha AVM, roughly. You asked for the mix of near prime and affordable. I have to do the mix. I have to do the mix. I'll come back to you later. Ravi will inform you later. Sure. Thank you so much. Generally, we generally look at it as a sum up put together. So, but roughly you should take 70-70, right? I don't want to give you a wrong number. Got it, got it.

From the line of Omkar, from Ascendancy Capital, please go ahead.

Thank you. I think all my questions are answered. Thank you.

Thank you, Omkar. Thank you. Next question is from the line of Abhijit Sebreval, from Mohit Ilal Aswal, please go ahead.

Yeah, good evening, sir. Thank you for taking my question. Actually, this is one question I have. I've heard from leaders like you that whenever interest rates or policy rates stabilize, the propensity for BPO comes down. Probably that's more a function of the aggression from these PSU banks coming down. So what I'm trying to understand is why you mentioned that you guided for a 10 basis points decline in ROA, where the margin decline could be offset by OPEX efficiencies, credit costs. Just trying to understand, is the competitive intensity today at a point where even without policy rates moving up, the large HFCs who are catering to the prime customers can take a rate hike?

So, Abhijit, we, in the prime market, the market which we operate, it is the banks which set the rate. It is SBA and SJFC were the rate setters. We are not the rate setters. So, we have to follow the market pricing, what they are doing. But your observation of whenever the policy rates are stable over a period of time, BTO rates go down. That is what we are estimating. We estimate the quarter four was an exception because normally, as per The normal process, it should have gone stabilized by February, March. February, it should have, because November was our last cut, three months after the rate cut, last cut, should have stabilized. But quarter four, February, March, we saw significant high intensity competitive activity in the market on the pricing side from both public sector banks as well as the private sector bank, which is showing us that in the Q4, our BTO rates have not declined from what they were in Q3. But our estimate would be that April is largely a spillover from March because a lot of sanction letters, a lot of checks get cut in the March from the bank's point of view, which get deposited in the April. But my sense would be that now we should see starting down of a BT out rate from May onward. To a certain extent, I think my knowledge of financial systems is that it should go down. Of course, but in now, as far as the prime housing is concerned, we consider irrational competitive activity as a feature, not as a novelty. So, we prepare for that scenario. That's the scenario which we called out. We said that we did not guide it for that. I'll just put a nuanced view. I said that as of today, we estimate that is, but we said that we'll guide for in the quarter one, as we come to the quarter one result, because we'll have a far better clarity on the macro issue, on the global scenario, and also what is the stance of the regulator or the super, in terms of policy rates or where it is hedged to. Because if the policy rate hikes are there, like we called out, then we may not have a margin of depression. So there is, but we are today estimating the policy rate hikes are not there, but the money market remains elevated. But we will come with the full guidance in the quarter one, along the quarter one results.

That is fair. And the only other question I had is, while you mentioned that March, the Money market rates, particularly NCTs, the rates were elevated. I mean, that same thing continues in April as well, or in April you've seen the right pull-off.

Money market continues to be at a significantly elevated portion even today as well. Because it is linked to the Ruby, as a Ruby, largely Ruby, and expectations of, you know, if you look at the OIS today, it prices in a 75 bps kind of a rate hike scenario, Which I am not fully certain. I will not say that is my estimate of a 75 pips high. But OAS market, which is a money market, so that's why money market looks ahead. So it is pricing in a significant uptick in the policy rate, if I have to say so. Because the OIS rates and the money market rates are implying a significant uptick in the policy rates as it moves forward. But we have to wait. I think if the scenario settles on, my own assessment, if the scenario settles on, in a matter of weeks, we should see normalization of market fast. But we have to wait for the market to...

So what about banks? Are they also lending at maybe 5-10 basis points higher than the rate at which they were lending, say, in January 5th?

So by large, the same price. The same.

So they are not increased their pricing, but you can lead the money market.

The difference is because the banks normally land at a floating. So till the rates don't move up, they will not move there. But money market works ahead, looks ahead because it is at a fixed. So that's the differential. So money market and the banks normally behave in a different manner because the underlying is different. One is floating, one is fixed.

Just to conclude this, then that means on the liability side, if I look at the cost of borings, they have largely bottomed out and from here in the subsequent quarters, there is a good probability that the cost of borings now inch up.

Yeah, so it will depend upon whether the money market prices remain elevated, let us say, after this quarter one as well, because quarter one, we are likely to see the similar, even if the money market price remains elevated, the offset which we get from the higher cost maturities will mean that we will be either at the same price or a marginal tone down of the cost of fund for the quarter one. Quarter 2 onward depends upon how do the money market, either, see, one thing has to move, either the policy rate will move or the money market rates will come down. That's what, Abhijit, I'll say, after there is a stability in the macro factor. Either there is a policy hike, rates hike, or the entire rates move up, or the money market starts becoming normalized. So, we'll have to wait for the quarter to pass, Abhijit, for us to, and the geopolitical market to get stabilized, for us to have a firm view saying that which side of the which side the market is leaving but we are by and large our portfolio is floating so our ability to pass through the cost impact is there to that extent.

This is very very useful and thank you for basically answering all my questions. I wish you and your team the very best.

Thanks. Thank you. Thank you.

Next question is from Kodak Securities. Please go ahead.

Hi. You know, just looking at the trends in fee and assignment income, I mean, both the line items, for last two years, we have been sort of consistently ahead of the overall loan growth. So how should one think about it? Kind of, you know, continue to sort of see acquisition in these two line items?

Yes. So, loan growth nation, we would want to be significantly ahead. We always want to grow 2x of industry. That is what we always stated, and we want to grow, and we want to continue. There is no change in the growth stance of the company. We remain very comfortable with wherever the portfolios are there. And that, of course, I am, a general caveat I am giving that, that we will wait for how the overall macro and overall economic situation goes. But as of today, based on the current scenario, we remain significantly upbeat and significantly in the growth mode. So we want to grow much faster than what is there and which is either in line with what we have been growing or even we want to grow a bit faster than what we have grown during the last year as well, as far as the current year is concerned. Assignment Income is a function of the growth mix, home loan growth mix versus a non-home loan growth mix. If we have a higher home loan, because we have leverage levels available for us to be able to leverage our balance sheet more. That was the reason for the assessment when last year we gave out an assessment that our assignment income is going to be lower because we said that if our home loan portfolio growth is able to sustain our overall growth without our assigning, we will not like to assign because we have the, Right now, the bid is available to go for more leverage and in the process earn more ROE. However, if it comes to that situation where home loan BTO rates are not climbing down and the home loan growth versus the non-home loan growth remains a bit subdued, then to balance that, assignment will be a balancing factor initially always to continue to grow all portfolios, whatever we can grow, minus the IHL growth, what we can organically grow in the home loan. Have I answered your question?

Sure, just on fee income, actually.

Fee income versus... So, fee income last year was 200 crores, and this year it was 297 crores, broadly driven by insurance income and some part of foreclosure income.

But broadly expected to grow in line with the overall loan?

Yes, with the growth in the business. Yes, perfect.

That answers my question. Thank you very much. All the best.

Thank you. A reminder to all the participants, you may press star and 1 to ask the question.

A final reminder to all the participants, you may press star and 1 to ask the question. As there are no further questions, I will now have the conference.

Thank you, Nero.

Thank you, Atul, Gaurav, and Bajaj housing team. Atul, do you want to make any closing comments?

No, no. Thanks, Viral, and thanks, everyone on the call, for patient listening and giving us a portion to tell about what we did. Thank you all very much.

Thank you very much. On behalf of IIFL Capital Services Limited, that concludes this conference, thank you for joining us, and you may now disconnect your lines. Thank you.