Bandhan Bank Limited (BANDHANBNK) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Bandan Bank Ltd. Q1-FI27 Earnings Conference Call. As a reminder, all participant lines will remain 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 the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Vikash Mundra, Head of Investor Relations, for opening remarks. Thank you. Ann, over to you.

Thank you, Ryan. Good evening, everyone, and a warm welcome to all the participants. It's a pleasure to have you with us today as we discuss London Bank's business and financial performance for the quarter ending June 2026. We sincerely appreciate your time and participation. Today, we will take this opportunity to provide insights into our operational activities, achievements, challenges, as well as offer perspective on market conditions, strategic initiatives, and any notable changes in our business environment. To walk you through these details, we are joined by Mr. Partha Pratim Sengupta, Managing Director and CEO, Mr. Rajinder Kumar Babbar, Executive Director and Chief Business Officer, Mr. Ratan Kumar Keshe, Executive Director and Chief Operating Officer, Mr. Rajiv Mantri, Chief Financial Officer, Thank you, sir. Myself, Vikash Mundra, Head of Investor Relations, and our Senior Managing Team at Bandhan Bank. We are happy to answer any questions or provide additional clarity on the current quarter's performance and our outlook moving forward. Now, I would like to invite our Managing Director and CEO, Mr. Parthaprathim Sengupta, sir, to brief you all on our bank performance. Over to you, sir.

Thank you, Vikash. Good evening, everyone. We are delighted to connect with you today to discuss our Q1 FY27 performance. The quarter was marked by a continued focus on balance sheet quality, business resilience, and execution. While seasonal and external factors remained at play, we made meaningful progress across several strategic priorities and strengthened the foundation for sustainable growth. We will take you through the key highlights of the quarter and our outlook ahead. Traditionally, the first quarter has been the softest quarter for our business, characterized by seasonal moderation in growth and pressure on asset quality metrics. However, I am pleased to share that in Q1 FY27, we demonstrated significantly better resilience compared to the previous years. Despite the seasonal headwinds that typically characterize the first quarter, our focused efforts over the last few years to strengthen the franchise and sharpen execution across business segments have helped materially reduce their impact this quarter. On the asset side, although the EB portfolio witnessed its usual seasonal decline, the moderation was considerably lower than what we have experienced in most of the prior first quarters. Most importantly, healthy growth in our secure non-EEB portfolio enables us to deliver overall robust advanced growth during the quarter, increasing diversification, and enhancing the resilience of our loan loop. On the liability side, reported growth was influenced by our concerns' decision to sequentially reduce high-cost bulk deposits. This strategic recalibration is aimed at improving the quality and granularity of our deposit franchise and to reduce cost of funds. Encouragingly, growth in retail-term deposits, as well as CASA, continue to remain strong, reinforcing our confidence in the underlying strength of our liability franchise. Our profitability performance also underscores the resilience of our business model. Despite several headwinds from elevated funding costs, margin performance remained broadly stable during the quarter, compared to our earlier expectation of a modest improvement. From an asset quality standpoint, performance during the quarter was satisfactory, particularly when viewed in the context of the seasonal trends typically observed in Q1. Looking ahead, our focus continues on strengthening granular deposits, growing CASA, enhancing customer engagement, and improving operational efficiency and asset quality. The quarter reflects the resilience of our franchise and the benefits of our disciplined execution. We remain confident in our ability to deliver sustainable, profitable growth while continuing to strengthen the balance sheet. Thank you. While my colleague and CFO, Mr. Rajiv Manthi, will shortly walk you through the financials in detail, I would like to highlight a few key performance indicators from the first quarter of FY27. Our balance sheet continued to grow steadily during the quarter. Growth advances stood at 1.56 lakh crore, registering a healthy 16% YOY growth, while deposits reached 1.65 lakh crore. The growth in deposits, YOY, was driven by strong momentum in retail deposits and CASA, reflecting our continued emphasis on improving the quality, granularity, and sustainability of our liability portfolio. The strength of our deposit portfolio was particularly visible in the retail segment. Retail deposits grew by over 16% YOY, despite a challenging base, underscoring customer confidence in the bank and the effectiveness of our distribution network. CASA ratio improved sequentially to 29.4%, taking the share of retail deposits, including the CASA and retail term deposits, to 74% of the overall deposit, further enhancing the stability of our funding profile. Portfolio optimization remained a key area of focus. We continue to increase the share of secured lending in the overall book, supported by strong growth across secured businesses over the past year. Our profitability performance reflected the resilience of the franchise. Despite significant headwinds from elevated funding costs, margins remained stable at 6.2% during the quarter compared with our earlier expectation of a modest improvement. At the same time, credit costs continued to trend downward, while asset quality remained healthy. Gross NPA at 3.1%, net NPA at 0.9%, and provision coverage at 86% included the technical write-offs. The quarter also witnessed a healthy improvement in earnings. Net total income for Q1 FY27 stood at 3,524 crore and operating profit at Rs. 1,358 crore. Profit after tax came in at Rs. 502 crore, representing a strong YOY growth of 35%. Our capital position continues to be a key strength. Capital adequacy ratio, including profits, improved farther to 18.2%, with tier one capital at 17.5%, providing significant capacity to support future business growth while maintaining a prudent capital buffer. Let me briefly touch upon the operating environment and our outlook. While our internal execution remains firmly on track, the external environment has become increasingly uncertain over the last few months. Ongoing geopolitical development, particularly in the Middle East, a less predictable monsoon pattern, elevated funding costs, and rising technology-related costs are factors that warrant close monitoring. These developments have the potential to influence customer sentiment, operating costs, and overall profitability across the sector. Among these factors, the impact of higher funding costs, despite no increase in the report rate, is already visible and has started flowing. At the same time, technology-related expenditures have also risen due to supply chain constraints on account of the ongoing war in the Middle East. Further, given the uncertain environment, we are cautious to grow our high-yielding EEV book. We expect this pressure to persist for the next few quarters. The impact of the other factors is not yet evident in our operating performance, but the remain areas that we are monitoring closely, given the uncertainty around the eventual outcome. Against this backdrop, the journey towards our stated aspiration of delivering an ROA of 1.6 to 1.8% by exit of Q427 has become more challenging than it appeared earlier. I would like to reiterate that this is because of the external factors that we are confronting now. While our medium-term strategic objective remains unchanged and we continue to work towards achieving the guided level of ROA, the prevailing external environment may influence the pace at which we get there. Consequently, we think that the realization of this aspiration could extend beyond the timeline we had originally envisaged. As far as our guidance of end of FY27 is concerned, the eventual ROA outcome will be influenced to a meaningful extent by how these external factors evolved over the coming quarters. While some of these have been, particularly elevated funding costs and higher technology-related expenses, have already started impacting the profitability, the impact of the other variables, especially the energy-envisaged energy crisis that may be vulnerable to many of the sectors of the economy, is still evolving and remains difficult to assess at this stage. Based on this visibility available, we believe an ROA in the range of 1% to 2% to 1% to 4% of the exit of Q4FY27 would be probable. I again repeat that this is on account of the external factors that is affecting the economy of the country. Mainly the factors are due to the energy crisis because of the continuous Middle East war and also the unpredictable monsoon. At the same time, we remain focused on improving this trajectory through disciplined execution across the business. As the operating environment evolves, we will continue to adapt proactively and leverage all available levers within our control to enhance profitability. I think that the investors would also appreciate that we have addressed our internal lacuna or gas, whatever is there, in respect of the asset quality, the growth in advances to a large, large extent. And the Q1 figures reflect that we are sequentially improving, even in the EV segment, from quarter to quarter. Our commitment remains unchanged to build a stronger and more resilient franchise while creating sustainable long-term value for all stakeholders. With that, I would now like to hand over the call to our Chief Financial Officer, Sirajib Mantri, who will take you through the financial performance in greater detail. After that, we will be happy to take your questions. Thank you.

Thank you, Mr. Sengupta. Let me begin with our lending franchise, where the quarter's performance reflects the continued progress we are making in building a more diversified, resilient, and sustainable loan book. For advances, as of 30 June 2026, the gross advances stood at Rs. 1.56 lakh growth, representing a healthy 16% growth year-on-year and a 1% sequential increase. This growth was driven primarily by non-EEB businesses, which continue to see strong customer traction and provide greater balance to the overall portfolio. The EEB portfolio stood at Rs. 52,641 crores, while the book witnessed the customary seasonal moderation typically seen in the first quarter. The extent of the decline was significantly lower than what we have experienced in the most previous years. Our diversification strategy continues to deliver encouraging results. The non-EEB portfolio grew by 27% year-on-year and now contributes two-thirds of the overall loan book, underscoring the transformation of our business mix over the last few years. Growth within the secured businesses remain particularly strong. Retail assets recorded 45% year-on-year expansion, led by products such as commercial vehicles, construction equipment, auto loans, and gold loans. Wholesale banking also maintained strong momentum, growing 38% year-on-year, supported by deeper customer relationships and disciplined portfolio expansion. As a result, the secured portfolio increased by 27% year-on-year and now constitutes 57% of total advances. Importantly, the advances portfolio today is significantly more diversified than it was a few years ago. EB group lending accounts for 23% of advances, S-BAL at 11%, wholesale banking at 33%, housing finance at 22%, and retail and other loans at 11%. This diversified mix provides multiple growth engines while strengthening the overall quality and stability of the portfolio. Turning to the liability side of the balance sheet, our focus continues to be on building a more granular, stable, and cost-efficient funding franchise. As of 30 June 2026, the total deposits stood at Rs. 1.65 lakh crore, a growth of 7% year-on-year. While overall deposit growth was moderate during the quarter, this was largely a consequence of our deliberate strategy to reduce reliance on bulk deposits and improve the quality of our funding base. Bulk deposits declined by 13% year-on-year, resulting in their share reducing to 26% of total deposits compared to 32% a year ago. This represents a significant shift towards a more granular and sustainable liability profile. It is also worth noting that the quality of our bulk deposit book remains strong, with nearly 86% of these bulk deposits being non-callable in nature. This provides greater predictability to our funding profile and reduces potential volatility for liquidity management purposes. More importantly, the underlying strength of the retail franchise continues to be encouraging. Retail deposits comprising CASA and retail term deposits grew by 16% year on year, significantly outpacing the overall deposit growth and demonstrating the increasing depth of our customer relationships. Within this, CASA balances rose to Rs. 48,479 crores, delivering a healthy 16% year-on-year growth, and this growth was broad-based across both savings and current accounts, resulting in a sequential improvement in the CASA ratio to 29.4%. Let me now turn to collections and asset quality. At an overall bank level, the collection efficiency, excluding NPAs, remained healthy at 98.9% in June 2026. Within the EV portfolio, collection performance was impacted by the usual seasonality associated with the first quarter, including a concentration of holidays during the month of April. Despite these temporary factors, the collection efficiency for EV for the month of June, 2026 stood at 98.5%. This is collection efficiency x NPA. And this is largely comparable to 98.6% recorded in the month of March, 2026, indicating stability in the underlying collection trend. Additional details on this are available on slide 22 of the investor presentation. Moving to asset quality flows, the gross flippages for the quarter stood at Rs. 1079 crores, broadly stable compared to Rs. 1028 crores in the previous quarter. This is at the bank level. Encouraging the slippages within the EEV portfolio improved sequentially to Rs. 604 crores, down from Rs. 690 crores in Q4-FI26, reflecting the benefits of our continued focus on customer engagement, monitoring, and collections. On early delinquency indicators, the 0 to 90 DPD pool in the EEV segment increased to 3.5% from 3.1% in the previous quarter. This was driven primarily by a temporary increase in the SMA zero bucket following holiday-related disruptions during the month of April. We view this movement largely as seasonal in nature and will continue to monitor it closely. We have provided further details in slide 23 of the investor debt. During the quarter, we also undertook proactive balance sheet actions to reduce our NPA book, including the sale of Rs. 291 crore of housing NPA loans to an ARC and a technical write-off of Rs. 597 crore, further strengthening the quality of the reported portfolio. Consequently, our headline asset quality metrics improved further. Roth NPA reduced to 3.1%, while net NPA remained contained at 0.9%. Provisioning coverage also remained robust. The reported PCR stood at 71.1%, and if we include the security receives-related provisions, the PCR stood at 74.3%. Let me now go through the financial performance for the quarter. Despite a challenging operating environment that Parthas have talked about and a continued pressure from the elevated funding costs, the bank delivered a steady financial performance during the quarter. The benefits of balance sheet growth, portfolio diversification, and improving asset quality are increasingly becoming visible across the various earning metrics. Starting with Net Interest Income, the NII for Q1-FI27 stood at Rs. 2921 crores, registering a growth of 6% year-on-year and 5% sequentially. This performance was supported by Healthy Growth in Advances and a stable margin profile at 6.2%, despite the funding costs had been witnessed during the quarter. Moving to non-interest income, the performance needs to be viewed in context of a high base in the corresponding quarter last year, which included treasury gains of nearly 250 crore rupees in Q1 FI 26, compared with a relatively modest contribution this quarter in Q1 FI 27. Adjusting for the treasury income, the growth in non-interest income would have been 22% year-on-year during this quarter. Encouragingly, the underlying trends across fee-based businesses remain strong. Third-party distribution income recorded a robust 47% year-on-year growth, reflecting improved customer penetration and stronger cost-sell capabilities across our branch network. The processing fee income also witnessed a healthy recovery aided by higher business volumes and improved disbursement activity across key lending segments, particularly notable within the EB portfolio. On the cost front, the operating expenses for the quarter were Rs. 2,166 crores, higher by 19% year-on-year. This increase was largely attributable to increase in the IT costs as a result of the continued investment in technology that the bank is doing, and also annual employee-related expenses, including salary revisions and performance-related payouts. In addition to this, there was a Rs. 61 crore of additional one-time gratuity provision due to the changes in the salary structure driven by the new wage code. This is a one-timer during this particular quarter, and we don't expect this to be repeated. As a result, the operating profit for the quarter stood at Rs. 1,358 crores. Importantly, the moderation in credit costs helped support the overall profitability, tragically. Credit cost continued its downward trajectory and moderated to 1.8% in this quarter, compared to 2.0% in the previous quarter, which is Q4-FI26. And importantly, the credit cost of EEB portfolio during Q1-FI27 came down to 3.3%, which is very close to the guidance that we had provided. Consequently, profit after tax for Q1FY27 stood at Rs.502 gross, registering a strong 35% growth over the corresponding quarter last year. Return metrics also remained healthy, with return on assets at 1.0% and return on equity at 7.7%. To summarize, Q1-FY27 was a quarter of steady progress despite the challenging operating environment. We delivered healthy business growth, further improved the quality of both our asset and liability franchise, maintained stable margin despite funding cost pressures, and continued to strengthen asset quality and capital adequacy. While certain external uncertainties remain, the underlying fundamentals of the business continue to move in the right direction. Giving us confidence in the resilience of our franchise and ability to create long-term value. With that, I will now hand it back to the moderator and we will be happy to take your questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Samir Bisay from Diamond Asia. Please go ahead.

Hi, thanks for the opportunity. So, my quick question is on the guidance that you have indicated. So, broadly, we have done reasonably well in a difficult quarter, which was marked by, say, tight funding cost. Last year, elections in West Bengal, which is the largest state. When we look at this aspirational target, which was earlier 1.6% plus ROA, what kind of conservatism is built here? Does it also involve some bit of risk on asset quality or it is purely due to tighter funding, which may result into the NIM improvement, which we were expecting that may not come? How should one think of this? And secondly, if liquidity were to improve RBI, and generally the sector is betting on FCNRB kind of improving the liquidity and funding rates, could it probably offset some of these pressures? So just wanted your thoughts there. Yeah, that's from my side. Thank you.

So, let me first answer your question that I have very clearly stated in my speech that this is on account of the external factors, and no internal factors, as I would say, has any impact on revising the guidance because, as you have seen, that our credit cost is sequentially coming down, which is one of the worrying factors for us. We are gradually coming out, even in this quarter also, we have made it farther, improved from 2 to 1.8, and I am quite hopeful that going forward also the trade cost would come in. So the two areas where we are little bit concerned because of these West Asia crisis is definitely, as we have seen, that the impact on the entire economy regarding energy crisis. And number two is that you see the resultantly, which is just leading to some durable liquidity in the entire system and for which there is a pressure of interest in the market, although the repo rate has not gone up. And we are finding that banks have started increasing the rates and the deposits, and we cannot also go away from the competition. So the mean what we What we had expected earlier may get somewhat of impact because of the rising cost of funds for that year. This is the major area. Apart from that, the West Asia crisis, we have seen that there is an impact on the technological costs. Most of the vendors, and especially as you see that they are all multinational vendors for that year, they have increased their costs. So whether it is the capital cost on the various infrastructure machines or otherwise, or on the operating cost, they have all increased. We all know that the availability of chiefs, et cetera, all these are impacting the Indian economy for that matter. And as you have seen that my tech cost has gone, I would say, high by 65%. While our focus remains on investment in technology, but as we remain focused in the investments, we also cannot address At the same time, avoid the cost. So these are the, I would say, the two factors, mainly because of the external environment. We feel that it may impact our ROA. We want to be very transparent and clear to our investors. That is why we said that, okay, we take a call, that whatever we are seeing in the economy, because I can also see that the effect of the reduced cost of funds on account of the reduction in reported, That has happened and the benefit of which we have got till Q1 may not be available Q2 onwards because already the savings bank costs, the cost of funds have increased by around 2025 basis points. So considering all the impact of these external factors, we thought that we need to be transparent to our investors. We have done well. This is the first quarter. I can say we started with an ROA of 1%. We are definitely working it on how to improve the RAF further, but we thought that we should be clear to our investors.

I think just to complement, as Asha said, mentioned earlier, that for the medium term, our aspiration is continuing to look at achieving the earlier guidance that we had given. It is the external factors impacting this particular financial year, and which is what we are Thank you.

So, mainly on the OPEC side as well as margin. Just quickly, what kind of portfolio growth do we build as of today in the EEB book? And secondly, if you could provide the slippages break up across segments, I think that's all from my side.

So I think one question I've asked on liquidity. So, liquidity for the bank remains comfortable. I can see even with a CD ratio of 94%, we invented a LCR of 140%, which is quite comfortable for the bank. As regarding FCNRB, we have mobilized T-codes. This is one information I just want to give you. And regarding your second question about the, you have asked for the slippages, NIM Outlook. Okay. Meme outlooks. So you see we, this quarter also, despite challenges, we could maintain the Meme at 6.20%. But as I have told you that going forward, there may be some increase in the cost of the funds, cost of the deposits. So that may moderately affect our Meme. But definitely we are working on it. The portfolio quality, as I've told that the strategy remains the same. We are 35, we will go to one third, that is 33 to 35% of EB. And 65% non-EB book. In this quarter also, you have seen that in the non-EB segment, we have grown by 27%. Our EB has marginally come down, but the moderation has been much, much lower compared to the previous quarters. So the strategy remains the same, and same with the secured, unsecured, 40% unsecured, 60% secured.

I think another question was on the breakup of the slippages. The slippages total for the bank were at 1079 crores during the quarter, out of which for EEB was 604 crores, and the remainder was for non-EB businesses.

Okay, thank you.

Thank you. We take the next question from the line of Byron Engineer from TLSA. Please go ahead.

Yeah. Hi, team. Thanks for taking my question and congrats on the quarter in a, you know, in a turbulent quarter. My first question is, have we started hiking yields in microfinance like our competitors? And if so, by how much?

So, it is same as of the last year. We have not hiked anything during the quarter.

Okay, so in the last two, three quarters, we have not hiked. It's same as last year.

Are we planning to?

Last year, Q4, because of the provisions, we have hiked a little bit, but I know that there is no plans for hiking, and we have not hiked after that.

And how much was that?

It was 100 versus one.

Okay. And by last year, you mean March 26 quarter, right? Not March 25, just to be clear.

It is March 26, it's probably in half. From February, we are white. We are white in the month of February.

Sir, Sarjee, your voice was not out of there. Or maybe it's mine.

I think that it's February. February, we are white it.

Okay, that's right, in 1026 from February.

Yeah.

Yeah. Okay, understood, understood. So, secondly, just in this quarter, retail growth and even our mortgage is slowed down. Something to, like, retail was typically growing double digits QOQ, and it's almost flat, and even mortgage book has slightly declined. Like, what is the reason for both? Are we just taking a cautious stance due to this whole macro, you know, geopolitical environment?

Somewhat, yes. I can say that a little bit cautious growth. In the housing segment, as you can see for that year, we have done a revamping, a completely revamping of our structure. We have segregated the three verticals, so definitely there have been some chasing problems which we were busy in addressing for that year. So, it has affected the housing finance growth. And retail also, we have introduced, why we have introduced some digital products.

On the retail front, Piran, there is one product which is the OD against the term deposits. That is the only product where there is some sort of a decline, which is anyway not part of the strategic focus. The rest of the book, if we exclude that, actually has grown sequentially by a healthy 5%. So, I think, Colleen, double digits to single digits, that's what you're asking. I think that momentum continues, especially in the products, secure products, such as CVC, auto loans, and gold loans. I think that focus is there.

So, growth has been reduced from double digits to single digits, yes.

Understood. And so, just lastly, so I understand you've cut guidance on ROA due to micro headwinds, but today our ROA is 1%. If I adjust for the 60 crore Gratuity provision, which is one time, it will become 1.1. Now, 1.1 becoming 1.4, what really is the trajectory or because NIM is unlikely to improve, if I understood correctly. And credit costs also, we are at 1.8%, which was our guided range earlier, 1.7, 1.8. So then where does the improvement come from, from here? Like, which segments or which line items will drive that?

I think two factors, Piran. One is, you know, we do expect further uptake in the other income to come through. So, we do have, we do expect 10 to 20 basis points improvement to come through other income. And the second is, we expect further continued improvement to come through, albeit marginally, on the credit cost further. The secured mix is improving slightly further through the year. At the same time, I think the improvement that we have seen in the portfolio quality should continue. And as the book rises, we should be able to see the improvement on that front as well. So I think both the credit costs and the other income would be the key deltas. In the earlier guidance, we were expecting some further improvement in NIMS to come through. That is what is definitely getting challenged now because of the external factors as Parthasara talked about. And therefore, over there, we are not building any further upside. I think it will be a great achievement for the bank to hold on to the NIMS that we have achieved during this particular quarter. So I think those are the three key factors to call out.

Other income, yes, definitely. So almost 20 verses from there. And also, as Raheem has rightly said, that we are working still on the trade cost. It may actually take a bit room now.

Got it. But even though we've hiked our microfinance yields, we are still not confident that NIM can expand because it's 30-35% of portfolio.

Yeah. So the focus, unlike last year, was on the quality rather than go with it only with the top line numbers and then have large number of NPAs. So, we have actually done a lot of revamping in our microfinance segment completely, I can say, a new model has been put into place with a lot of guardrails and also new underwriting system. So, that is actually enhancing our quality of the books for the day, I can say. But yes, the growth will gradually come. I can say that we have returned the deceleration, so we have stopped the deceleration that was taking place. Now, hence, going forward, the growth will come, but definitely, as I've told you, that we have our strategy that we will keep the book maximum at 35%. From our experience, what we have gathered, we will not just run after this particular book because it is giving a very high end. So, we need to be very well calibrated, see that the quality of asset, rather focusing more on the health of the book than going, I would say, aggressively. So, a very modest growth is envisaged, which maximum can go up to 33, 34 percent, what we are aiming for it. Definitely, we'll try to grow in that segment.

So in summary, as the rate has gone up, the volume impact is not coming through because the EV book, as we had mentioned, we are still cautious in terms of growth based on the external factors and the risk that continues in the operating environment. As that risk comes down and our operating environment improves, I think definitely we can look at adding up the growth there.

Got it, got it. And if I may just squeeze in one last question, sorry I'm taking too much of the time here, But on PSLC, I think last time, 40% of our MFI book was PSL compliant, if I remember correctly. How much is that number in stock to?

40. It is also today, it is 40% only. I think Surojit, our new EB head, can give a guideline. Yeah, you can come here and see.

So presently, we continue to be at around 40. However, we intend to dial that up. And I think we, over this quarter, we will be comfortably placed in terms of using that week.

Okay. Okay. Understood. Yeah. That's it from my end. Thanks and wish the team all the best.

Thank you. Thank you.

Thank you. Participants in the interest of time and fairness to others, we request you to restrict to two questions per participant. We take the next question from the line of Jayabundra from ICICI Securities. Please go ahead.

Yeah. Hi. Good evening, sir. I have a couple of questions. First is, sir, SMA0 has increased a little bit. Of course, there are, you know, holiday things which will impact our collection in SMA0. But apart from that, was there any other reason and And what, what, how should one look at the SMA0 trajectory and then here.

So, SMA0 again, you are rightly predicted, it is mostly in the month of April.

There were two effects, I can say, one is definitely the election effect of what's going on. This is one and number two, the holidays and consecutively three witnesses were holidays. So, that is, that has impacted our SMA0 book, while some of them has, I would say, have been But the thing is that the total quantum is yet to be repaid. So even though the repayment has happened, the book continued to remain in SMA 0. It has not slipped to SMA 1. If you can look at it that by SMA 1, actually there is a less repaid, which clearly indicates that from SMA 0, the forward rolling has been arrested, but it remained into the SMA 0 book. So, there is no other reason for this May and June as Rajiv has already said the collection efficiency has been quite robust it has almost 99% already and it continues to be at that trend.

Right, but and sir what is the outlook going ahead because the vintage chart shows clear improvement in the newer vintage right even the older vintage are doing reasonably well right. So, apart from the holiday thing is there any other thing which is creating a little bit Let's say delay in collections or? Yeah.

Yeah, sorry. Yeah. No, I take that question. See, if you have mentioned, if you look at the stable book in SMH 0, that's holding. So what happens because of holidays, I miss DMI remains missed. However, it continues to start paying. And he has also put in a very strong delinquency management measures. So, you know, that is not. So the forward is not happening. So, now we are working on making it back. So, to answer your question, we are very confident that the seepages will not go further and it will stay where it is. Moreover, we will try to recover from there. So, it is only for holiday impact, nothing beyond that.

Right. So, sir, if I, if I 24 of the investors.

Yeah, I think the vintage chart, you reckon, was in page 24 of the investor deck and I think you are right, clearly shows the improvement coming through in the recent vintages.

Correct. And even the older vintages are getting plateaued, right? So these things are not seem to be deteriorating. Yes, yes. Okay. So, sir, in that sense, the credit cost, we have a decent, let us say, scope, right? In the sense that if the slippages were to plateau here, or maybe that's, that's,

that's what I even just told for the day that we are expecting an improvement in the trade cost.

Then I am a little bit confused, sir, on the guidance card that if the stable or EB mix of the business is more or less stable and EB grows more or less in line with the overall loan growth, that actually should support the NIMM, right? Even if it is coming at a higher funding cost of 6%, 7%.

So let me just tell you for the year, the mean, our non-EB book has grown by 27%, if you can look at it. And our, in general, the strategy is that our EB book will be maximum 33% of the total growth. So, if I can say that even if we grow at whatever rate for that year, the EB book will be contained at 33% of that, and here's the major challenge what we are facing is, again, the cost of funds because we have arrived at this mean with the expectation that the last year, the reduction in the record rate, it was not immediately, we could not get the benefit Because as you know, the term deposits were getting matured at a later date. We got a benefit in Q4 of last year. We got a benefit in Q1 of this year. But what we are seeing is that already the competition is increasing the interest rates. Even bigger stable banks are also increasing the interest rates in the fixed deposits for that year. And we also need to, or rather we had increased in some segments also, And probably we need to increase for that. We have to just look into it, whatever the credit demand is there. So the mean is definitely the advantage of getting the full benefit will not be available for the full financial year, what we had envisaged earlier. You have said, yes, and the EB book, there will be a calibrated growth. So definitely what the growth that will happen in Q4 of the financial year when the EB book grows the most, We will not get the benefit of interest for the entire financial year for that year. So, considering all these factors, and apart from what Rajiv has said for that year, that the escalation in the OPEX cost. So, OPEX cost, we have to emphasize that it should be 4%, but already we have reached 4.3 in Q1. And this is going to happen and this is going to continue because almost all the vendors, if you look, even on the other consumer items also, the cost has increased and especially the tech cost, the cost of the hardware, the cost of the servers, so everything is increasing, even the operational cost, whether it is cloud or AMC charges or others also have increased substantially. So the effect of all these factors, and we have to invest in technology, and we have decided that we would continue to invest our technology for this. So these are the two areas where we feel that we may get an impact while our strategy is very clear and we are working on it. If these external environments or these external factors do not, I would say that these do get addressed in quicker terms. And then I can say that, yes, probably our guidance, what we have given earlier may hold good. But this is, again, I have told you that we wanted to be very clear and transparent to our investors.

I think just to break out, we have mentioned the...

Chair, I would request you to please join back the queue for follow-up questions. Thank you. Sorry, can you hear me? We take the next question from the line of Anand Dhamma from Luama Asset Management. Please go ahead.

Yeah, so thank you for the opportunity. So what kind of credit growth that we are expecting for the full year should be 15 to 16%? Because if you are seeing a margin, you know, even if you're expecting some margin pressure, should we sacrifice a bit on the growth front? If yes, and what kind of tech costs that we have? So there are some banks who have talked about tech costs as a percentage of overall OPEX. If you can talk about that, what is that for us now? What is that we expect going forward? Now, which is what you've been talking about that that possibly could go up and could lead to some kind of pressures on the other way?

Yeah, so I think that on the credit growth, what we had guided was for the full year FY27, we were looking at a 14% growth rate within which EB we were looking at between a 5% to 10% growth and non EB would be 20% plus. As you've seen in the first quarter, we have seen non EB EIB growing at 27%, overall growth at 16%. So we are definitely in line with the guidance, in fact, doing slightly better. The challenge that we see right now is EEB, which for first quarter has remained flat compared to the last year. And this is where we will try and see how exactly we can step up the growth as the external environment improves further and our growth, which continues to happen in a calibrated manner. So I think that's on the credit growth. On the IT costs, I think we have now gone up to roughly around 8 percent.

Right now it is, including the depreciation, it is around 9.5 percent. So, I mean, The total of X, the industry benchmark for the matured banks, they remain in the range of 10 percent. Given that we still have a lot of IT investment to make, we will try and remain within the range

And this percentage of IT cost to OPEX has been growing up in the last two years.

That is still higher for other banks, but you know, so you talked about your cost of going up. Is it not possible for you to pass it on to the customers, you know, barring I think EB, I I think even in EAB, you have a scope to increase the yields and basically try and protect your margins.

So that's the balancing we are working on it. I can say because you see that our corporate group has reasonably grown by 36% and some of the best names in the industry are now banking with Bundan Bank. Now, definitely, when you are a part of consortium or when you are participating in a multiple banking, my interest rate or eventually the cost of funds cannot be entirely passed on to those customers. It is quite competitive, but you need to be there because your trade quality improves. I would say the risks are much lower. So, definitely, some good books we need to build in positive. Yes, as Rajiv has said, and he has said that our range in the EB book, what we are expecting to go between 5% to 10%. So definitely, if the environment is good, the environment is beneficial to us, we will probably look at 10%. Otherwise, if it is vulnerable, and we can see that, yes, vulnerability is being noticed, we will definitely have to contain the cost.

Sure, sir. Thanks.

Thank you. We take the next question from the line of Ankit Biyani from NoMura. Please go ahead.

Yeah, thank you for the opportunity. So, my question is on the guidance again. So, this was just last quarter's guidance. So, we have lowered our ROA guidance for 40 BIPs. So, okay, I can understand that 20 BIPs could be explained through margin, that there could be funding cost pressure, but what explains the other 20 BIPs? And apart from that, if we see that the system liquidity in generally the commentary that it should improve, given that there would be FD&R related flows, so that should support your funding condition. So why do you still expect funding costs to remain under pressure? So are we assuming that this kind of environment sustained? And when we had given the guidance, then also the macro environment was not very healthy. Your crude was north of $100. Your CD rates were also higher. So, I just want to understand what has changed now that wasn't there during our 4Q on-call towards April end. That's my question.

Let me tell you that the guidance was originally given, I think, sometime in December of 24, when we took over the chart, and at that time, EEV definitely was doing much, much better. If you remember our balance sheet in Q1, Mandan Bank of that financial year, in Q1 and Q2, we posted a very, very healthy profit based on the EEV segment. Q3 onwards, everything went upside down for us. And we were hoping and hoping that, yes, we would be recovering at the earliest, but the recovery actually came mid of November 2025, last year for that year. Well, still after that, we were expecting that, yes, okay, that the industry growth will be taking place, but if you look at the entire industry trend, the growth that has been witnessed in the past financial year, that growth is yet to come. So, I would say it is still growing, but yes, what we have witnessed is that our trade quality has improved in this EV segment. So that was the year, I can say, after that, this West Asia crisis last time also, we were hoping that this crisis would end, and with the treaty being signed, probably there are all signs of positive features in the economy of the world and the economy of the country, but unfortunately, that has not happened. And the greatest impact is the energy crisis. And the sector which gets most affected through this energy crisis is definitely the microfin sector. We all know that. So while we want to grow, we are very watchful, and we do not want to suddenly jump very aggressively what we have did in the past and then burnt our fingers. So we have, that guidance has been clearly given right from day one, and we are continuing with the guidance. This is one fact. The cost of funds, at that point of time, you see RBI reduced the repo rate. We all expected that the cost of deposits would come down, but eventually we can see that even bigger banks have increased the deposit rate. We all know the durable liquidity in the country, which is almost requiring 2.5 lakh or 2.5 trillion rupees for the day, is just moving in the range of 1 trillion rupees for the day. So there is a pressure in the market as regarding the interest rate, and consequently, there is a pressure for increasing the deposit rate also. And this you also have to take into factor that the saving pattern of the Indian household has also changed. So, all this considering the factors, the mean what we had expected during that time is what we are saying that because of these external factors, if these external factors are contained or addressed in the next one month, I can say, and the impact, because whatever the economists say, the treaty was signed, that even though the treaty is signed, today the actual impact will be felt two, three months later for the day. So that is the real picture on the ground, and we have to accept that the cost of funds will be under pressure. What we have envisaged is that we'll get the benefit of the cost of funds throughout the year. We will probably, we have got the benefit in Q1. Q2, we have to see whether we will get, because my savings, bank, cost of funds have already gone up by almost 20 versus point. It has already gone up Q2 for the day. So, it is just the market forces, I can say, for the day, and apart from that, the tech costs, you see, the investments we have already planned, and we do not want to go back. We need products, we need processes, we need a very strong pillars also, like strong LOS for the day. So, all these things, we are continuing to invest on that. We can't go back on this. So, maybe we have to wait for some time when we can leverage from these investments.

I think just to translate into the numbers from what Parthas has said, you know, the breakup of the 40 basis points is roughly around 30 basis points stretch that we see on NIMS and roughly around 10 basis points stretch we see on the OPEX, primarily due to the fact that as we had guided earlier, that our NIMS will continue to increase from the 5.8% level in Q2 to 5.9% in Q3, which we clearly saw, and improved to 6.2. We had a line of sight towards, we wanted to go towards a 6.5% by the end of Q4, FY27. But given the fact that the cost of funds in the industry has gone up due to these particular external factors, that's where our revised guidance is to see how exactly we can maintain. But as opportunities come, we'll try and see how we can improve them as well. But that's the key difference over 30 basis points. And as the tech costs have gone up due to, again, the supply chain constraints, Our guidance was that our optics to asset ratio would be around 4.2%, but we've already seen that it's hovering around 4.3%. So, I think those are the two key factors which are leading to this reduction. But as we said, there's absolutely no doubt of efforts that we are putting in terms of making sure that we continue to work towards the path that we need to focus on.

Okay. And my second question is on the credit cost front. So we have done well on that front. But now, as you have highlighted that the energy crisis, the impact would be much higher for the microfinance segment. So if this continues, what?

Let me give you a clarity. So the question is that till now the country is managing very well, I can say for the day. But the question is that definitely there is a rationalization. If you look at the availability of commercial gas cylinders, it is definitely the flow is not the same as I've been here. So there has been acceleration. Till now, I think the country has been quite managing well. But the question is that, yes, it will lead to escalation of cost, and this segment cannot pass on. So the question is that we may not expect delinquency, but at the same time, we cannot be overaggressive.

And therefore, our credit cost guidance of 1.6 to 1.8 percent, that continues to be enough. So we are not changing that.

Thank you for answering my question.

But, you know, our incomes have not kept pace. So, my question here is that, you know, now have we, you know, are we satisfied that we have enough secure assets and can we work on efficiency? Like, you know, we have too much of DSA sourcing, we pay too high commissions to the DSAs, we use a lot of collection agencies, we pay a lot of money to them. Because, you know, the whole secured book is probably 0% ROAS for us. So, is there any cost efficiency or this operating efficiency which can kick in? Like, you know, are we making any effort there? Because I don't even see our CASA improving because the OPEX has gone towards branch, technology, and this new product.

So, let me tell you very clearly, whatever you have said, we are taking steps in all these areas. We are aware that to start the business, we have to depend a lot on DSS till we come to a level when we develop our own marketing expertise. And now we are in that state, you see. That is why I said that we are investing in LOS. For example, once I connect the LOS, once I get a strong LOS, I can make all my branches as the sales point of retail and the housing assets for that year. So, definitely the DSA cost would come out, come down, and the sourcing will be done mostly by my branches. Even my strength of 4,400 DUs, that also we are having a plan that at least the DUs situated in the metro centers and the other centers, Whether they can also be gradually made a sales point for this product. But I need a strong LOS for that. That's why I'm saying that investments are going on. We cannot stop on that. The leveraging from these investments will not happen right now. You see, whatever the operating costs you have stored, the major part was definitely the employee cost, which we have rationalized to a large extent. And the tech cost at that time was mainly on account of the CBS. So you have to understand that this bank has started CVS only three years back. We were delayed, but we have started. And the last two, three years, the major cost of the tech side was on the CVS. Now we are having the major side on the LOS and also definitely side-by-side somewhat is also going on the CRS. So, leveraging from the LOS investments and to have a completely tech-driven or digital-driven products, which are gradually coming, we have already started three, four products, as you know, that the legacy has come, the Elite has come, the Elite Plus has come, we have revamped our new corporate salary packages, the credit card, we are just waiting to be launched, able to launch probably in this quarter, all that is. So, all these products are also here putting and coming in place and it requires investments, the initial investment. So, this tech cost has been there for the bank to grow, this tech cost has to be there. But yes, the leveraging of this cost will definitely come in the future.

And I think on the point on efficiencies, we are working on efficiencies within the Securebook also. Not all the Securebook comes from DSAs. I think we are trying to use multiple channels. One of the key initiatives in the bank is really driving crop sales So to drive the growth of secured assets through the use of our branches, and I think that will be one of the key areas which will create more operating efficiency.

Yeah, we have a clear plan, right, how we reduce our dependency on the DSA and move to the branch channel. We started the branch channel activation last year. So earlier we were doing 200 crores a month. In the last quarter we already done more than 900 crores of assets on the branch channel. So, that is our focus, activate each and every brass channel, whatever the MDS are said, and simultaneously working on the BU also, we are able to convert all these as a sourcing center. So, definitely the dependency on the other channel will reduce brass figures.

Absolutely right.

So, we just keep on all these.

Yeah, just for us investors, you know, I would think that if all these initiatives work, the cost to income should come down from say current 62% level. So where do you see this light path for next two, three years? Like does it come down to 55 over two, three years?

At least for the next one year, probably it will be high, because till we reach a certain level of business, but yes, then it will come coming down. So I think we were expecting that it should taper down from the 28, 29 from the day. We were expecting to taper down for the day, but yes, then obviously this cost will come down.

So actually the guidance we have given is on OPEX to asset ratio of around 4.2%. Right now it's hovering to 4.3. We will try and put in efforts to bring it down, and we had guided that after two years of investments, which is beyond FI-28, we should start to see further efficiencies to come through. So this is still investment years for us. As MD Sir has talked about, the tech investments are the key investments that we are doing, and as these tech investments are completed, we start seeing the returns coming from there. Then we can start seeing the taping down of OPEX-2 assets.

Right. Okay. Okay. Thank you. Thank you, and all the best. Thank you. Thank you. Thank you.

We take the next question from the line of M. B. Mahesh from Kotec Securities. Please go ahead.

Just one clarification. If you go to these segments like wholesale banking, if you were to just kind of look at the margins of that particular product, how different would it be as compared to the overall margins for the business?

Sorry, Vaish, could you repeat that? Wholesale banking margin.

See, you're building this wholesale banking book, which is kind of going at about 35-40%. Just trying to understand, why are you growing this business, given margins are immediately diluted to what you carry?

The fundamental thing is that the wholesale banking book, we are now only seeing because we are doing the vanilla advance, but that is not our goal. We want to have a wallet shared in this corporate. So the entry is through the advances. So right now, definitely the ROA is less because I have to lend all these big corporates or I would say the better corporates where the risk is much, much lower for that year at very competitive rates. But that is not our purpose. So that's why we are now looking into the other areas. For example, we have just now entered into the forex. Only in the last quarter, we have entered into the forex business. And I think Satish can give the statistic, how many from where to where we have reached you.

So, Mahesh, Satish here, you are able to hear me. Hello. You are able to hear me? Yeah, I can hear you. So, I can only tell you that the book we are building in wholesale banking, it is not being thrown at a very cheap rates. The rates we are doing is quite comparable to the industry average. In fact, it is better than the industry average, the data which we have, and so the yield part is not like it is of the income. As MBC has said, I think we are working on multiple aspects in generating more other income kind of thing, and the effects is one part, and earlier we did not have the whole suite of products

So let me tell you that the purpose of entering into this business is to get the wallet share of this company, or that they used to get other income. So we had till now we did not have the products. So we were doing only vanilla advances. Now we have Yes sir, issuing bank fees, issuing the cash management, so all these things are being done now.

Perfect, so the question I'm asking, yeah. Okay, the point I'm trying to drive is, given the fact that you yourself kind of allude to the fact that margins are under pressure, Sir, between stabilizing margins versus growing this particular book, the trade-off essentially is how much of NII can I generate out of this business versus losing margins or keeping margins out there by not growing that business. Just trying to understand, why are you kind of prioritizing this growth when there is pressure on margins in the business for this year?

So, let me tell you the pressure is on the NII, I do admit, but our aim is to whatever to offset this loss in the interest compared to the other business through the other income. So, where we did not have the capability till now, now we are gradually entering into that segment. So, the purpose is that I can get other income only by through wholesale banking compared to any other vertical.

The problem that we are trying to solve is the reduction in margin appears to be a little bit higher than what we had anticipated. So just trying to check as to whether giving up a bit of growth solves that problem, which we are all trying to solve here. That's the idea that we are trying to solve here. Or you feel that growing is more important. That's all we are asking here.

No, no. Again, I'm telling you for that. The growth is, again, dependent on many factors. The first is that your capability to grow by garnering on mobilization of deposit. But yes, whatever the growth that we are planning, we have already studied that I have very clearly said, that we will grow. We will maintain our share of 35% in the EV segment and 65% in the non-EV segment. We have said that 40% will be in the unsecured segment, 60% in the secure segment, keeping these ratios in mind for that year, we are planning our growth. So it is not that we are very aggressively going. You can look at our balance sheet. We are trying to maintain a very secure growth across all these verticals.

I think if I can just add a couple of points, Mahesh. One is, as you know, microfinance or EB gives a higher rate, higher return. We have seen the amount of volatility that it exercises because of the external sort of vulnerabilities which are there, right? And therefore, as a strategy, the bank is working towards the higher secured mix, which is what we've done over the last two to three years. And I think that consistency is what is key, why exactly the secured book has grown, including for wholesale banking, because it provides a We want to augment those revenues to other income by creating these capabilities, which basically allows us to be able to generate not just a stable set of NIM, but also stable set of other income. The pace of growth is what we will calibrate. As we are hovering closer to the target aspiration of the secured mix, the ability of the bank is to be able to start growing the unsecured a bit more, to be able to balance out between the secured and unsecured. But at this stage, I think we still have a bit more growth that's coming through the secure and we've already talked about EB, which is currently flat, which we want to actually increase to between a 5% to 10% growth. So I think those are the factors which are contributing.

Just one more point, if the corporate sector, the margin may be less, but definitely come with a full ecosystem, right? It comes with a corporate seller, it comes with a render payment. If there is a full ecosystem is there. So, our plan is to cover the full ecosystem so that if we are able to get our income from all the sides. Yes. Other than that, we have to increase also.

Rajiv, just one question. On this IT cost, you had absolutely no headroom to push back these costs for a couple of quarters, is it?

So, as I explained that, given that last three years, we have invested on multiple other technology brand in terms of building some of the new products for wholesale, retail, housing, and also improving our governance standard in terms of getting some of these fraud monitoring and other tools. As you invest in technology, each year the running cost goes up, and also with We've got to make investment on scalability and all of that. And given this whole energy cost, the cheap prices, etc., all of those costs are going up. That is at one level. So you need to have DC, DR, automated DR capabilities. Those costs are also going up. So I don't see the cost slowing down at this point in time, but the pace at which it has grown over the last few years, that pace may be And then after 18 months or so, we should see the outcome of all of these coming in the form of productivity gains. So that clearly is how we see this as. And also to supplement, I think as we said that we want to generate the higher other income for which capabilities are very, very important. I think the pace of IT, if at all, we will not postpone, we would rather be able to get these investments or the capabilities in at the earliest, so that we can start seeing the benefit of that. And I think therefore the focus on making sure that we We actually invest in IT, in technology to be able to generate the returns on that at the earliest.

Mayesh, I would request you to please join back for follow-up questions. Thank you. We take the next question from the line of Rahul Kumar from Vicaria Investment Management. Please go ahead.

Yeah, hi. Just one question. On the slide 23, the collection efficiency, which is shown as for June, is lower than the quarter average. So, which means that, you know, the collection has actually deteriorated over the quarters. So, can you help us understand this thing?

No, I think I can, I can explain that. I think what happens is during the quarter, we also get a recovery of the in-quarter slippages which actually come through. And therefore, the collection efficiency for the quarter will look slightly higher compared to just for the month because it doesn't capture the through the quarter. So, I think it's just a technical difference, nothing else. And comparison for a month versus for a quarter is important.

Okay, okay.

The second question, is there any one-off items in the net interest income or the other income?

No, nothing in the income side. In the expense side, there is a 61 crore gratuity provision because of the new wage act. Okay, bye.

Thank you. We take the next question from the line of Nitin Agarwal from Motilal Oswal Financial Services Limited. Please go ahead.

Hi, thanks for the opportunity. Sir, a few questions. One is on the retail asset, again, wherein you talked about that OD was one product, wherein we saw a decline, but gold loans is also another segment, wherein we have reported a decline, wherein the industry is growing very well. So anything which has driven this?

Yeah, okay. So, my detail asset is addressing Hirak is at this.

Hi, Nitin. Hirak is at this. As far as gold loan is concerned, we implemented the new circular of RBI, and we developed a system. As you know, the entire circular was 180 degree change. So, that has impacted our initial sourcing in the month of April and till mid-May. Now, we are back to normal sourcing. So, this quarter notes, we will take it up on gold. As far as the growth which was talked about, the Q1, the double-digit growth, even Q1 last is a single-digit growth. So, Q1 typically is as guided like it is a softer quarter for us, but Q2 onwards it will be dissimilar to previous quarters.

Okay. Okay. Got that. And secondly, while we are like watching out the overall external macro environment and guided for a slower growth in MFI, but if I look at the recoveries and upgrades This quarter, they are better than the fourth quarter. In fact, they are better than the most of the quarters of FI26. So what has driven this and where is the disconnect in terms of the outlook that we are seeing and talking about and this quarter recovery and upgrade number? So anything to call out this?

Yeah, I can clarify that. Actually, we had done, as I had mentioned, we had done an ARC sale of the housing finance portfolio, amounting to roughly 290 crores. And in response to that, as part of the deal, we have actually got roughly 120 crores of cash recovery, which has come through. So the recovery numbers does include 120 crores of ARC-related recovery that we have got.

So, again, let me just reiterate that we have actually indicated an improvement in the credit cost. So, I don't think that the recoveries will actually slow down. Rather, it will continue at the same phase or even better for the day. What we are emphasizing is that probably the cost of funds, that there will be increasing that cost of funds for the year. So, that's why the prevent, And apart from that is the tech cost. So credit costs will continue to improve, and definitely the recovery will also improve.

Right. But when you talk about the MFI growth at, say, a relatively moderate phase, do you look at Bandhan growing slower than the industry? I mean, what I want to ask is, like, is there still a conscious decision to further reduce the MFI mix from where it is? Or are we letting it flow as per how we are seeing the macro environment moving?

No, so let me tell you that we are the leader and we will be the leader. So this is number one. Number two is that, again, I'm telling you there's no concert growth or there will not be an aggressive growth at the same time. We will definitely look at the situation and as Rajiv We have already indicated that we have a bandwidth of around 5% to 10%. So the question is that we will grow. Definitely if the situation improves, we may grow up to 10% also. So there is no such that we will cut at it. But yes, overall my book will remain 33%, 33% to 35% of the total exposure.

Got it, sir. Thank you so much. I wish you all the best.

Thank you. Thank you. Ladies and gentlemen, we take that as the last question. and conclude the question and answer session. I now hand the conference over to the management for their closing comments.

I'd like to thank all our investors and all stakeholders who have joined the call for continued trust in the bank, and thank you. Thank you.

Thank you. On behalf of Bandhan Bank Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.