Earnings Call Transcript - XNSE:CAPITALSFB 2026-10-30

Operator

Ladies and gentlemen, good day and welcome to Capital Small Finance Bank Limited, Q2 and H1 F527 Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 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. Sarvjit Singh Samra, MD and CEO, Capital Small Finance Bank. Thank you and over to you, Mr. Samra.

Sarvjit Singh Samra, CEO

Thank you, Ranjit. Good morning, everyone, and thank you for joining us on Capital Small Finance Bank's earnings call for the second quarter and first half of financial year 27. I hope you and your families are keeping well. Our financial results and the investor presentation are already on the stock exchanges and on our website. Let me quickly introduce the team with me on the call today. I have with me Mr. Munish Jain, our Executive Director, Aseem Aharjan, our Chief Financial Officer, Raghav Adderwal, Chief Credit Officer. For branch banking, Sahil Vijay, our Chief Treasury Officer and Investor Relations League, Bharti Bhavuta from our Investor Relations Team and our IR Advisors SGA. I will begin with an overview. Let me begin, as usually I do, with few words on the environment we are operating in because the sector is entering a phase wherein the quality of growth, the strength of your deposit franchise, and how well you navigate a shifting rate cycle really start to matter. In the first half of the year has been a healthy one for the system. Credit growth stayed strong on the back of retail and MSME demand, and deposit mobilization has picked up well. As end of the September, banking industry credit grew at around 19.4% year-on-year against deposit growth of about 17.8%. The other big development was of course monetary policy. In its October review, the Reserve Bank raised the repo rate by 25 basis point to 5.50% and moved its chance to calibrated tightening. This was on the back of some emerging inflationary pressure, higher energy and food prices, alongside an economy that is still growing well. The signal from the central bank is fairly clear. From now, rate cuts are off the table and the path head will depend upon how inflation and growth play out. For us as bankers, this shifts the focus. Until recently, the question was how quickly rates would come down. Now, it's about managing a rate environment that may stay higher for longer. The cost of deposits Liability book reprices and our ability to protect lending spreads will be the things that drive profitability from here. And through all of it, discipline underwriting, comfortable liquidity, and picking the right loans will be what lets us keep growing without letting asset quality slip. These are not new disciplines. They are how we have always run the bank. And in an environment like this, granular retail deposit and real customer relations matter more than ever. For a bank like ours, rooted in semi-urban and rural markets, the ability to raise deposits through a branch network we have built over decades. And to go deeper with customers, we already know, is genuine and durable advantage. So when I look at where we stand, I am confident our model is well-suited to this environment. A deep presence in core markets, an almost entirely secured loan book, and a relationship-led way of banking give us solid base to keep growing while staying measured on risk. Our priorities quite simple remain the same. Grow the franchise, strengthen the deposit base, and protect the quality of the balance sheet. With that backdrop, let me take you through how the bank performed in the second quarter and the first half of financial year 27. I will touch on the headline numbers and then hand over to Manish for further details. A gross advances stood at 9,755 crore as of September 30th, 26, up 23.4% year-on-year and 7.5% over the previous quarter. Disbursements for the quarter were Rs 1,095 crore, up 36% year-on-year. On the liability side, total deposit grew to 10,831 crore, up 16.2% year-on-year and 2.2% over the previous quarter. CASA stood at 3,734 crore or 34.5% of total deposits. Compared with 33.9% a year ago. Growth LPA declined to 2.3% at the end of September 26, compared with 2.47% in June 26, and 2.70% a year ago. Average credit to deposit ratio stood at 85.4% during the quarter, compared with 81.5% in the corresponding period last year. Looking ahead, our priorities are clear. Keep the momentum going in our core lending segments. Make the deposit trenches deeper and more stable. Improve productivity and stay firmly focused on asset quality. In a shifting rate environment, we believe discipline, consistent execution will count far more than simply chasing scale. On that note, let me hand over to Buneesh, who will take you through our financial and operating performance in more detail. Over to you, Buneesh.

Speaker 4

Thank you, Mr. Samra, and good morning and warm welcome to you all on the call. Let me walk you through the key business and financial highlights for the quarter and the half-year ending September 30, 2026, and then spend a little time on the progress we are making on our strategic priorities and vision 2029 roadmap. Business performance and advance profile. Starting with advances, as of September 30th, our gross advances stood at 9,755 crores, that is a growth of 23% to zero near and 7.5% over the previous quarter, an acceleration from where we were in Q1, and a reflection of steady execution, healthy demand across our core segments. Disbursements stayed strong throughout the quarter and stood at 1095 crores, up 36% year on year. That tells the demand is holding up well across our segments and that our distribution and underwriting engine is working efficiently. Our book remains firmly secured and around 97% is secured. Over 76.7% of the portfolio and 89% of the non-corporate book is backed by immovable property or own FDRs. This is very much by design and is single biggest reason over asset quality hold up the way it does. The book is also granular with the average ticket size of about 19.53 lakhs against 17.1 lakhs in Q2, FY26 and well-diversified. As of September 30th, our portfolio continued to remain well diversified and business loan segment is presently the largest segment, which increased to 28% of the book against 23% a year back, which was 27% at the end of the last quarter. Mortgage were about 24% of the advances, a little lower than 26% a year back and 25% a quarter back. Agriculture 26% against 27% a quarterback. And corporate exposures stay deliberately constant at around 40% where we lend only to well-rated borrowers. On asset quality and risk management, let me turn to the asset quality and which I know always a big focus area for us. Gross NPA come in at 2.36% and improvement of 11 basic points over the previous quarter and 34 basic points over a year ago. Net NPA improved to 1.12% from 1.14% last quarter and 1.38% a year back. I would highlight this. This improvement has come in a quarter that has its own share of weather-related stress in our core geography, which to us is the clearest validation of our secured, carefully underwritten approach. Credit cost for the quarter was 0.18% broadly in line. Just as importantly, our early warning indicators are moving the right way. SMA 1 and SMA 2. Accounts were around 1 to 3.31% of the advances, down from 4.78% a quarter back, and 4.42% a year back. That reflects proactive collection and much closer monitoring of the book. And as we grow, protecting asset quality stays right at the top of our list. We will keep lending the way we always have. Secured, granule, with careful customer selection and strong collection and we are increasingly using data and technology to sharpen our early warning systems. All of this keep us firm on track towards our goal of taking net NPA below 1% without letting growth come at the cost of the balance sheet. Deposit and liability franchise coming to the liability size, our total deposit crossed Rs. 10,831 crores, up a healthy 16% zero-on-year and 2.2% on quarter-on-quarter basis, which to us is really a measure of the trust our customers continue to place in us and the strength of our retail franchise. Our average credit to deposit ratio for the half year was 85.4, up from 81.5 a year ago, which shows we are deploying our funds efficiently. CASA stood at 34.5%. It is a touch lower than what we had last quarter, and that is seasonal and in line with what the whole industry is seeing in a high-term deposit rate environment. But it remains higher than a year ago, that is 33.9% a year back, and this continues to anchor the stability of our funding. The cost of deposit stood at 5.68% against 5.92 a year back now. Going forward, building our granular retail life deposit base stays one of our key priority, especially as we enter newer market. We will keep deepening. Customer relationships, pushing CASA, and fine-tuning our funding banks. Together with disciplined liability management, we believe this is what we protect our margins and profitability as the balance sheet grows. Let me come to the profitability. Pre-Provisioned Operating Profit, Beepop. Watch. 68 crores, up 31% year-on-year, and profit after tax is at 92 crores, is at 46 crores, up about 31%. That is a healthy outcome driven by steady operations and continued cost discipline. Our net interest margin held steady at 4.24% against 4.04% year-back. In a quarter where the rate environment actually turned, improving margins speaks to the resilience of our core earnings and we benefited from the reprising of the term deposit we had flagged in the last calls. Our net interest income grew by 24% on year-on-year basis and stood at 139 crores against 112 crores in Q2 FY26. Non-interest income grew 25% to 30 crores On efficiency, our cost-to-income ratio is 59.8% and improvement from 61.7% last year, even as we continue to invest in branches, technology, and people. In other words, the operating leverage benefit is expected to begin soon. Return on assets stood at 1.39% against 1.26% a year back and 1.3% a quarter back, while return on equity at 12.23% against 10.22% a year back and 11.2% a quarter back, supported by consistent profitability and prudent balance sheet management. Improving our profitability and return ratio is a central part of our roadmap. over newer branches, seasons, relationship deepens, and over business skills. We have expected Geographical diversification, which continued to build nicely. As of September, our network stood at 222 branches across five states and two union directories. Strengthening over footprints in rural and semi-urban markets, that remains central to our long-term growth. It is worth mentioning that deposit share in the home state has increased to 1.3% of the industry as on June 30, 2026 against 1.17% as on March 31, 2025. Markets out in Punjab are becoming a real growth engine for us. Advances here grew by over 39% year on year this quarter, comfortably ahead of our overall loan growth of 23%. That tells us our model travels well-visioned our home market. These markets now make up to 26% of our advances and 8% of our deposit, which tells customers in these new geographies are increasingly choosing to bank with us. We are having 47 branches outside Punjab, that is 21% of our network, and they are contributing 26% of our advances. Encouragingly, business for a branch in these markets That is the out of Punjab market are continuing to show upward trajectory with business per branch has started hitting 80 crore plus for branches with a longevity of 5 years and above, against 72 crores at the end of Q4 FY26. Overexpansion stays deliberate. We go into markets where we can genuinely replicate our relationship-led model without diluting underwriting standards. And we are equally focused on getting more out of our existing branches and deepening every customer relationship we have. We have 77% branches in Shuru, which contribute 75% to the deposit, and interestingly, 23% of our urban and metro branches contributing 46% to the advances. A quick word on capital and liquidity, both of which remain strong. Our capital equity ratio closed at 20.8% with tier 1 capital at 18.5, giving us ample leg room to fund our growth with no immediate need to raise the fresh capital. Our average liquidity coverage ratio stayed strong at around 216%, which give us sufficient leg room for the growth. We will continue to keep comfortable capital and liquidity buffer as we grow so that every bit of balance sheet expansion rests on a resilient footing. Before I close, let me briefly reiterate where we are headed under our Vision 2029 roadmap. We continue to target a loan book of over 16,000 crore plus and a network of more than 300 branches by FY29. The way we get there is clear. Go deeper. Getting more stronger in our existing market. Target expansions resort Punjab, make branches more productive, and keep investing on process region systems. There are really three things that drive this journey. First, Accelerating growth, with lifting the contribution from our newer markets. Second, improving operating leverage as our branches mature our business game scale. And third, one we never compromise on, keeping the balance sheet clean, through secured, gradual, lending and disciplined undertaking. Importantly, this is not about scale for its own sake. It is about making sure growth turns into sustainable, profitable, and better return ratios. And we believe our relationship-like model, strong retail deposit franchise, improving diversification, and disciplined approach to risk give us a solid foundation to deliver exactly that. With this, We will be happy to take your question, and I request the operator to open the floor. Thank you, and wishing you all a happy and prosperous festivity.

Operator

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touch phone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Chitain Parmar with Aurum Edge. Please go ahead.

Chitain Parmar, Analyst — Aurum Edge LNP

Good morning. Congratulations to the team on a very good set of numbers. Can you hear me? Am I audible, please?

Speaker 4

Yeah, you are completely audible, Mr. Parmar.

Chitain Parmar, Analyst — Aurum Edge LNP

Okay, thank you. So my question is Specifically on, you know, basically, the agriculture sector. This year, the monsoons have not been very good. Now, do we see any impact on that? Our collection efficiency has been very, very good till day. But do we see, you know, it going down a bit because of these sectors? If you can throw some color, what are the – because the back probably should come now.

Speaker 4

Yes, I just take this question and give you a bit backward also. If we talk about the agriculture, what we do in agriculture? We are a lander in agriculture to the middle income group within the agriculture segment. That is the farmer whose financial need is anything between 5 lakh rupees to 25 lakh. And to a farmer who is a progressive farmer that is cultivating 2 or 3 crops in a year. And our agriculture segment is primarily, presently, concentrated in Punjab and Hariya. Now, if we talk about the agriculture geography in which we operate, in addition to the rainwater, If I talk about the other irrigation opportunities available in Punjab and Haryana, one is the canal water. Over the last two to three years, we see a very good progress. The canal water has start reaching to the farm level. Second, last year we seen a very good rainfall, which resulted in increasing the water tables. And with that thing in sight, and with availability of tubules and the irrigation facilities throughout Punjab and Haryana, with the deficit rainfall, the impact on the agriculture was not visible in the geography in which we are lending the agriculture. Just there, we keep on hearing some impact in some other segments of the country. And the same is also being visible from our slippage as well as our SMA1 and SMA2. Even if we talk about the current year, we have a gross slippage for the full H1 1.11% on annualized and net slippage of 0.24%. With our credit cost of 0.18% for Q2 and 0.24% for the H1. So, with our SMA profiling continued to show by an improvement trend, with our SMA 1 and 2 continued to be the lowest ever, now we have a SMA 1 and 2 of 3.31% against 4.42% a year back, and at the end of the last year, the same number was 4.92. So, all the data points are pointing that there is no challenge which we are seeing on the agriculture side from the deficit rainfall. And we have seen such cycles earlier also. Even if we look history, we have seen the same cycle in FY23 when there was a deficit rainfall. Then we seen a much larger cycle in FY16. If we look into the data flow of those years, which is available on slide number 12 of our presentation, that even those period, we are able to hold firmly on our credit costs as well as the slippages. So, with our understanding of the market and careful selection of the borrower profile, I believe, and our secured lending franchise is helping us keeping our asset quality in control despite the various macro and natural calamitical variables. This is what overtake and depending upon the data and otherwise.

Chitain Parmar, Analyst — Aurum Edge LNP

Perfect, perfect. So my second question is on basically the geographical spread. So we have, you know, majority of our branches in Punjab, and Ariana is probably the state where we have seen some more maturity compared to the other states and all. Now, if you can throw some light, you know, see, I can say that, you know, you have been superb in Punjab. There is no doubt about that. But what I want to see or understand is, can we replicate it? And maybe Haryana will give a picture on that, that, you know, things are ethnic. Your numbers on other states are quite decent. The only thing I want to know is, you know, what is the status of, you know, deposits, cost of funds in the other states as compared to Punjab, and also I want, you know, what is the potential of Punjab and Haryana, specifically, at least from a growth perspective, you know, Punjab can... Hold how many branches or potential of how many branches and same for Ariana. If you can throw some light on this, that will be great.

Speaker 4

Firstly, as I understand some of my investors are looking forward for more drill about Punjab versus Out of Punjab, so my request is you can please turn to the page 26 of our presentations, in which we are giving some more details about both the Punjab and Out of Punjab businesses and the crosses, various other aspects. Let me reiterate. If we talk about Punjab versus out of Punjab, we are presently having 21% franchise out of Punjab, which is contributing 25.7% to our advances and 8.2% over deposit. If we talk about the quarter, we grown 23% on a bank level basis on advances and Punjab book has grown 19% and out of Punjab book grown at 39%. And deposit grown 16% on bank level basis, Punjab book has grown 17% and out of Punjab book grown by 12%. And if we talk about the other quality matrix, over GNPA in Punjab is 2.88 and out of Punjab it is 0.87 and bank level it is 2.36. KASA bank level being 34.48, Punjab it is 35.3, out of Punjab it is 25.32. So if we talk about the Punjab versus out of Punjab and if we talk about even the branch productivity, branch productivity out of Punjab is now making up to the productivity within Punjab. So, all the metrics are moving in the right direction both within the state of Punjab and out of state of Punjab. But with this, I want to share one more important data points. Even within the state of Punjab, over market share, if I talk about the deposit first, over deposit market share against the whole of the industry has improved to 1.3%, which was 1.17% at the end of 31st of March 2025. So over last 15 months, we improved this market share by 13 basic points. I am not talking about incremental, I am just talking about the outstanding. So outstanding being a longevity-based number, so we are gaining our momentum. And Punjab is a liability book of 7.45 lakh crore. Haryana being a liability book of 10 lakh crore deposit. So these two states have a huge money and we just need a small little moment to take care of our aspiration. So the opportunity available in the geography in which we are phenomenally high. And we are gaining the momentum both within and out of Punjab, and we are keeping our eye and ear open to get the opportunity wherever it comes.

Chitain Parmar, Analyst — Aurum Edge LNP

Perfect, perfect. And small question, last one. Do we use CGTMS and if yes, what is the coverage and what is the cost?

Speaker 4

As far as the present status is concerned, we are primarily a secured lander. So being a secured lander, CGTMS is not required by us because we are not an unsecured lander. So, our book is purely collateralized. If I exclude the corporate loan book, we have a 92% collateralized loan. So CGTMS is not what we are requiring and neither we are doing. But just we are keeping an eye open for any enhancements to a client who may be very old with us. We are evaluating various possibility that how we can leverage it without increasing the risk matrix. So that's again I saying we are not comfortable in going in a standalone unsecured business. We want to continue to be a secure franchise where we see the enough opportunity and potential to growth is there. Which we are demonstrating now with each Quarantine Quarter.

Chitain Parmar, Analyst — Aurum Edge LNP

Thank you, Sarvjeeji and Muneeji and all our team members. Thank you for answering my question. We wish you all the best.

Operator

Thank you. Thank you. A reminder to all the participants that you might press star and one to ask a question. Next question comes from the line of Shriya Spinelli. With Nomura, please go ahead.

Shriya Spinelli, Analyst — Nomura

Hi, good morning, team. Thank you so much for taking my question. My first question was on net interest margins, both on asset side and liability side. First, on asset side, how much of the book that we have currently is repo-linked? And as we see increase in repo rates, how much improvement in yields we can see. On the liability side, is there still cost of fund pressure in the environment, or how are we looking at cost of deposits? As repo rates increase, what will be the difference between increase in yields and increase in cost of deposit so that it can aid our NIMS. So if you can help me explain that, please.

Speaker 4

Surely, if I come to firstly the statistical point, we have to talk about the Zee Loan advances. Zee Loan advances for Q2 FY27 remain at 11% against 11% last year Q2. So we have seen a repo rate hike in October. So the benefit of that has not been poured into the zero in advance in Q2. That will be coming in the coming period. But if we talk about the cost of deposit, cost of deposit has improved by 23 basic words, which was around 5.9% in last year Q2, which is now 5.68. So, there is a good improvement in the cost of deposit from Q2 versus Q2, that is the year on bigger, bigger. And so, accordingly, our net interest margin has increased to 4.24% against 4.04% last year Q2 and 4.21% immediately last quarter. Since the benefit of the repricing of the deposit has accrued primarily in Q1, so we are not seeing much benefit coming in the current quarter from the deposit repricing, but we are able to form up our ZLON advances, which is 10B sequent improvement from the last quarter. So that is the way the movement happened. Now if we talk about the intrastech environments you turn and how our balance it look like. If we talk about the balance sheet, we have around 52% fixed rate advances and 48% floating rate advances. So we can say around 50-50 each. So 50-50 each is typically fixed and floating. And if we talk about the floating, floating is a fair balance of the MCLR link as well as the link with the EBR. So, EBR link portfolio will be typically around... 13% to 14% of the portfolio is EBL link, which is the EBL link where the benefit will be immediately pouring in and the MCLA link portfolio will be getting repriced as and when we repricing over deposit. So that will be getting the benefit passed on to the advances. So, in an upward interest rate environment, what is the benefit for a balance sheet like us, when a deposit is typically for a fixed rate, and even if we are increasing the deposit cost, that will be coming for the incremental book, whereas in the advances, in addition to the incremental advances, the benefit will be also pouring into the existing 50% of the book gradually. So, this will be always an advantageous balance sheet in an upward interest rate regime, in a mid-term till the time it gets stabilized on both sides of the balance sheet. So, EBR-based increase, we can see some benefit with the 25 basic points impact, which will be implemented from 1st of November, since we follow a month-end philosophy, the EBR change in a month is implemented immediately, at the beginning of the next month. So, with the 1st of November, auto-increase will be happening to all the portfolio of the linked with the EBR for that particular site.

Shriya Spinelli, Analyst — Nomura

Thank you, sir. That is very helpful. The second question was on growth, the 16,000 crore target that we have set for ourselves for FY29. If I look at the run rate of 23%, 23.5% for, let's say, FY27, the two-year run rate over FY27 to 29 then becomes around 22% to 23%. With a balance sheet size that we have and the loan book size that we have currently of around 9,700 crores, don't you think this is slightly conservative on our side? Do you think that we can grow faster than 22% given the size that we have?

Speaker 4

As far as the growth forecast is concerned, currently in the beginning of the year, we have given a guidance of 20 to 22% and we are talking H1N 23%. So, we look forward for a positive biasness to the growth engine. Yes, since bankers have growth is variable which is linked with a lot of macro factors. And predicting a macro factor for the three years is a difficult task even in the present environment. Yes, we are growth hungry and we want to achieve, overachieve what we committed. So, with that thing inside, firstly, we are quite confident of what we are committed for FY29 and rather our run rate is better than the overall run rate. Since Q2, FY26 to FY29, our run rate is better than the run rate which is required. So, let me put it very clearly. We are a growth hungry organization and we believe the complete foundation is available to grow. We have all the system, all the processes, all the team, all the infra, all the capabilities. So, with the macro-environmental comfort, if some good market opportunity comes, there will be a good growth will be coming. So, we are not keeping this number to restrict our growth, but to challenge us to improve our growth. So, that is how we look at this particular number. So, yes, we are growth hungry and look forward for growing the balance sheet at the most appropriate growth rate.

Shriya Spinelli, Analyst — Nomura

Sure, so that's helpful. My next question was on the universal bank aspiration. I know it's a long-drawn process, and we are at the initial stages of scaling up the bank, but some of the banks that, you know, have started with us in the year back in the day have scaled their books, I just wanted to understand your aspirations on becoming a universal bank and a pan-India bank, which is recognized in the entire country, and what are the steps, if at all, that we are taking? Like, you know, we'll have to expand our product portfolio, not just stick with the secured loans, etc. What are the aspirations? Where do we see the bank? Maybe 10 years down the line, if you can throw some light on that.

Speaker 4

Let me put one thing. Getting a universal license is one of the biggest aspirations me and my whole of the team, including my big boss, we all are carrying. So we aspire to be universal bank. So our strategy and our alignment, our business alignment is in that direction. If I talk about our thoughts about it. We believe to get this universal bank, we need couple of things. One, right systems and processes, which we are confident that we are in the right shape. Second, diversification. We are a full diversified landing portfolio. Rather than a monoline business, we have a four to five different buckets, not the products. So each catering to a different economic need and different segment of the people. May it be business segment, may it be agriculture segment, may it be the mortgage segment, may it be the consumption segment, may it be the corporate lending segment. So we are being present in all the buckets, in all the functionalities. So diversification, and we are continuing to improve our diversification with this passing quarter, strengthening our underwriting capabilities for every diversification rate, so that we are well equipped to take up that particular universal banking thing. Third is scale. So, we have given a vision of FY29 that where we want our AGM to be 16,000 odd crores, so if we're talking about the AGM to be 16,000 odd crores, it translates into a balance sheet of anything between 21,000 to 23,000 odd crores. So, with 21 to 23,000, one side of the balance sheet, I believe is the rightful size to go and apply to the regulator for the universal act. So, we believe by FY29, when we achieve the scale, we achieve the efficiency ratios, that is 1.6% plus VOTA, 15% plus ROE, size of branches, 300 plus branches, with the business of more than one side of the balance sheet, more than 21,000, 25,000 crore types. So, that is the right size to go to the regulator to look forward for our aspiration of the next stage of the journey. So, that's the way Vision 2029 is very important for us. So, we want to rather than just giving a top line number, we are given the number which includes the quality matrix, profitability, ratio analysis, distribution, as well as diversification. So, all those matrix have been put in place. Vision 2029 is a stepping stone towards the next aspiration that is a universal bank. So we are quite aspirant and over all of the efforts and targets are making us reach towards the universal and to give that particular growth we are talking. But one thing I like to mention, in the interim till we get the universal, the present model in which we are operating as a small finance bank, given we are a granular and middle income group based lender with the market available significantly for a middle income group, the present model is not restricting overgrowth. So, we believe that in FY29, we can scale in the present model in a very significant and efficient manner and look and aspiring to convert ourselves to Universal Bank post FY29 when all this matrix comes. So, that is our thoughts about it, about the Universal Bank. And I also request Mr. Samra, please add on something if I am missing something on this particular piece.

Sarvjit Singh Samra, CEO

That is how we aspire. We feel that from here till our vision of 29, nothing stops us for a growth metric. So I think as Manisha said, that would be most appropriate time, but we feel that to go for the next level, that is a universal bank license.

Operator

Thank you. Mr. Pimple, please rejoin the queue for more questions. Next question comes from the line of Sagar Shah with SparkPWF. Please, go ahead.

Sagar Shah, Analyst — SparkPWF

Yes, thank you for the opportunity, and first of all, many congratulations to the management of Capital Small Finance for hosting this great set of numbers, and secondly, excellent disclosures. Sir, my first question was related to our diversification. Diversification has been on a very great path, actually. Outside, I'm talking of outside Punjab. Now, almost 23 to 24% of our advances constitute outside Punjab, actually. So, now on our vision, 2029, what kind of ratio are we targeting? Within Punjab and outside Punjab, what kind of ratio in terms of advances in deposits are we targeting? That is my first question. And my second question was related to our consumption and other loans. When we talk of auto loans, gold loans, still our interest yield actually is much lower than even our corporate loans or even our actually on even as compared to SAP loans. So what is the reason? Is the reason about competitive intensity or is it something else? Because normally these are very high, a little bit high yielding yields as compared to that what we have seen in the industry. These are my two questions, sir. Thank you.

Speaker 4

Thank you, Mr. Shah. First of all, if I come to the question number one, as part of our Vision 2029, we are targeting to that we need to have 30% plus branches outside the state of Punjab. Today, it is 21%. Over 21% of the branch is presently out of the state of Punjab, and we intend to increase it to 30% by f.29. So, consequently, there will be a parallel movement in our advance. Advances today, if I talk about advances, which is 27%, 25.7% out of Punjab with 21% branches. So, we believe that with the 30% branches out of Punjab, our out of Punjab book shall be anything between 32 to 37 odd percent. That is what we believe by FI29 will be the ballpark number. Point number two, if I talk about the consumption, let me tell you what we do in consumption. Consumption, which is presently constituting 7% of the portfolio, is typically the second or the third hook. What I mean by this? Consumption is not our start point. Consumption is a second or third hook to our existing customer who may be our business loan customer, who may be our mortgage customer, who may be our agri customer, or who may be availing some facilities from us already. So this is the vision that our vision is to be the primary banker for our customer, that he can take care of his, we can take care of his all financial needs. So accordingly, this is a lending to a tested client. Rather than an untested and a news universe, these are the second, third hook, which may not be collateralized, but he has some other collateralized exposure with me, and which is working satisfactorily over a long period. So that's why the yield here is relatively lower, and since it is not a very high given product, so this is continued to be 7% for a while now. You will talk about this particular portfolio, it is 7% constant from FY24 or FY25 onwards till date. So with a very mild, it continues to share 7%. And this also include a very sizable portion of the loan against FDRs. So if I talk about this 7%, there will be around 1.5% to 2% which will be loan against our own FDRs. So, which is pulling down that particular yield down. So, overall, we are quite mindful of the pricing, that the pricing, including the out of the 7, around 25 to 30% being FDR loan, which will be 7.5 to 8% carry. So, with that thing in sight, so, this is the pricing look like this. But, this is a low risk. Add-on product, and which you can look into. If you look into our slide number 9 on the presentation, you look at the net NPE of the consumption lending is 0.47, and across all the life cycles, which tells you the story, what sort of consumption lending this is. So, that is the way.

Sagar Shah, Analyst — SparkPWF

Yes, sir, I got your point related to your grip on the business, actually. It's a cross-sell product that you're referring to. But my point was, don't you think that it's now time for the bank where we have actually already tested certain geographies, where we have a good know-how about the geographies to directly pitch a customer through dealer financing for auto loans, for gold loans, actually for fresh customers rather than testing. Don't you think it's now time for the bank actually to go for some aggressive approach rather than going for existing customers?

Speaker 4

Yes, Mr. Shah, we are quite watchful of this and we are running some pilot projects internally already that what to, how to expand it, how to expand it and fast track this particular subsets within this particular product. So, being that I am not authorised to share more details about that particular thing, but I can tell you, we are already working on this to look forward for pressing the pedal within sub-products within this particular landing. And we are evaluating a lot of such stuff to accelerate our growth. So, that I said, we are a growth-heavy organisation. But also, I'd like to clarify, in addition to the consumption, we have lots of buckets. Which are growing now very steadily. And we want to ensure that our consumption loans start growing at a rate faster than that also. So consumption loan which is growing 6.89% quarter on quarter and 21.9% year on year. I know the base is low, so this growth is almost equal to the growth of the overall of the portfolio. So it is growing as per the portfolio being an add-on product. Yes, we are much full of it and evaluating all the operations and opportunities available within the products.

Sagar Shah, Analyst — SparkPWF

Okay, okay. Thank you so much, and thank you so much for the clarity, and all the best for this purpose.

Speaker 4

Thank you, Mr. Shah.

Operator

Thank you. A reminder to all the participants, that you might have a star and one to ask a question. Next question comes from the line of Shreepal Boshi. If Iguilis, please go ahead.

Shreepal Doshi, Analyst — Equitas P2

Hi, sir. Thank you for giving me the opportunity and Congress on a decent quarter. My question was on the draft circular by Ireda. So, how do you see impacting us? Because one of our key theses for RO expansion was also driven by or aided by improving other income or improving the overall other income component. So, how do you see, you know, this draft circular and our overall aspiration being, let's say, impacted or it could be derailed?

Speaker 4

First of all, let me put two, three points here. Since that being in a still draft stage, let it come to be from a discussion paper to a draft stage first. So today we are in a discussion paper document to a draft stage document. So that is the one journey. And we have already started working on the same. If you look into the Q2, Q2, our Banker Commission has come to the number 2 and our other fee income has start surpassing the Banker Commission. Our Banker Commission out of the 30 crores of non-fund is 10.2 and our other fee income are 20 crore pass. So, Banka is constituting around 33% of the non-bank. And within the Banka, it is not just about the insurance, it is include all the products, B, B3 and 1, all such products are available, MTSS, all these products are part of this particular, which we are doing for our partners. So, we are quite watchful of this and we have already started working internally on the various options and opportunities available to diversify or to other product lines, to other fee incomes and how to reduce the dependency on this. But just presently, instead of changing the gear in right now, we have internally opted to wait for the current quarter end and see how the regulatory environment look like. Maybe a draft comes which will give us some time secretary to come. But we fully recognize this aspect that our fee income, which is presently 0.92, which is 0.92 against 0.82 last quarter and 0.86 last year same quarter. So we are already, the increase is coming not from the banker, but increase is coming from the other fee income. So, we are quite watchful and mindful of this. And internal deliberations and alternate courses have already been started and work has already been started. But we will look forward for a gear change, as in when some drafts come, so that we get a visibility, what is actually going to happen, so that we can move it. We being a retail franchise, distribution is there, but this particular income, there may be some component change in the percentage of the earnings, but which will also increase the volume. So, I will not see that it is a complete impact. Yes, there will be some impact, but not material for the balance sheet like us, and specifically when we are in a growing engine. So, that is my thought about it, and I am waiting for a draft at least, not if the final, at least the drafts are going to come, and so that we can look into what is happening.

Shreepal Doshi, Analyst — Equitas P2

Gaurav, sir, currently how much does it contribute to our ROA?

Speaker 4

So typically there is a multiple ways of looking into the ROH matrix. Since we are talking about the gross income, gross income versus the net income, what is the costing involved. So that is a lot of factor with the tax component being there. So I think that total component of this will not be typically, so all on gross basis, it shall be. Anything between 12 to 13% of the total PBT or PBT or PBT. So that is what our senses about this. But that is on an overall basis. So I am not saying we have very very high dependence and we are looking forward for alternate measures also. So there is a lot of options available to move it to the other fee income, to move it to the other activities. So, as in again, reiterate Sripalji, we are waiting for the draft to come and accordingly, we have already had a lot of strategical decisions which we have taken and how we will respond if the regulatory environment changes. So, we have already prepared a lot of responses internally to ensure that road time impact is minimized to a larger extent.

Shreepal Doshi, Analyst — Equitas P2

Got it. Got it, sir. So, sir, since you have highlighted about other avenues to cover up for the impact that we will see from this, could you please elaborate on, you know, what sort of other products or other avenues that you are or you have shortlisted or you are working upon? Because, you know, it is very critical not only from defending the income from the distribution of insurance, but also from the ROA aspiration that we have.

Speaker 4

As we talk about, Shepalji, our next growth journey in ROA, which is 1.39 to 1.6, is typically two figure, that is the NIM and the OPEX. Here we are not targeting anything much from the non-interest income. If I talk about our original plan versus the updated plan basis, this change. So the one thing is constant, that 1.39 to 1.6, transition will be two variables. One is the NIM, second is the OPEX. So, non-intrust income, we were always saying that it will continue to be around 1ish or 0.95 to 1, which is now 0.92. So, we are not saying that it is a larger play for our road tax pension. Our larger play will be NIM as well as the OPEX only. So, but we have a lot of other play to shift the banker commission to, I will say, there is a lot of way we can, it is not like that, that is the only earning which we can deal from servicing the customer. There are a lot of ways. The customer, typically, a banking relationship is a trust and a service-related organization. So, there is a lot of fungibility available. So, a lot of transcripts, there are a lot of ways that can be made up. So, which we will evaluate. At this stage, giving any answer to this will be too early and too premature. Till that time, we will have a look at the draft first. Let the draft come, which will be giving us a better visibility on how the regulatory environment will come. But we have internally prepared a lot of responses to all the scenarios, so which we can counter all the scenarios very, very quickly and immediately, so that the impact on NOTA is minimized.

Shreepal Doshi, Analyst — Equitas P2

Got it, sir. Got it. Sir, I just had one another question, if I could squeeze in, which is on the way we are growing in non-core geographies. So, just wanted to understand what has been our, like, how different is our deposits or liability strategy in states like Rajasthan and, let's say, even NCR region versus the typical Punjab-Haryana belt. Given that in these markets, the newer markets that we are entering, there are a large number of players with deeper penetration and bigger franchises already present. So what is our differential strategy there versus the core state strategy that we have?

Speaker 4

Sripalji, we follow the asset first approach in the new geography. In the new geography, where we go, we always follow the asset first approach, rather than a deposit first approach. We believe liability will follow the trust. Firstly, we build the brand recall there, and rather than concentrating on the deposit, we concentrate on the brand recall, trust buildup, and the asset first approach. So, deposit franchise will always follow the trust. So now, Haryana has started contributing in a decent way to our deposit. And with the expansion in the newer geography, which I call it is showing a seed for our deposit for the period to come. Now, the asset first philosophy with the liability following the trust. Here are the two simple metrics which we follow. So that as we're moving there and we're becoming the primary banker of the business segment, and we are primarily entering more into the business segment in the Rajasthan and NCR, the two states you mentioned. So where we are entering into the ecosystem, and with the ecosystem increase, then the deposit franchise will start reaching to their grassroots levels. So these are the two simple philosophy which we follow and which is giving us the results. So rather than fetching the deposit or targeting the deposit on the day one in the unsensitized geography, we follow asset first, let the trust build up, let the deposit follow the trust, and we are having a strong capability that is from the state of Punjab and state of Haryana to fund our deposit requirement. If I talk about state of Punjab, state of Punjab is a deposit book of more than 7.5 lakh crore and Haryana is more than 10 lakh crore deposit book. So, the aspiration to get over deposit growth is available in these two tastes for the entire period. Till that time, now, Haryana start contributing. Till that time, Rajasthan and Delhi will start contributing in a bigger way to the deposit side.

Shreepal Doshi, Analyst — Equitas P2

Got it. Got it, sir. Got it. Thank you so much for the detailed answers and good luck for the next quarter, sir. Thank you.

Speaker 4

Thank you, Shreepalji.

Operator

Thank you. Next question comes from the line of Aditya with Securities Investment Management. Please wait.

Aditya, Analyst — Securities Investment Management

Hi, sir. Thanks for the opportunity. Sir, I had a question on your cost of the callers. RBI, I had cut by 125 BIPs, but now if I look at your post-op deposits, it has fallen just 22 BIPs from 5.9% to 5.68%, which is pretty low as compared to some of the other banks. So what is the reason for this?

Speaker 4

Since we have a deposit, it is a different pricing model. Our deposit cost is, other than looking into the absolute value, my request is if we look into the absolute reduction, if you look into the overall basis, what our cost of deposit is. We are talking about a 5.68% cost of deposit, which is well comparable with the universal commercial banks also. So at that point of time, with that particular scale, so we were never paying a very high interest on deposits. But if we compare the parallel comparison we do with the advances, there is no compression on the yield. The yield last year Q2 was 11 and today also 11. So, we are seeing a one-side reduction. So, the deposit reprising is the one big reason and deposit reprising will be a CASA heavy organization. Over 34 to 37 percent of the deposit being CASA where the deposit reprising is not going to happen. So, over 60 to 62 percent of the benefit is coming which is giving us this particular benefit. With the reprising that benefit accrued which was typically topped up from 5.92 to 5.68 and last quarter it was 5.6. So that are the one factor I like to mention. So it is nothing that we are already a cost competitive lender, deposit taker. So I still feel the cost of deposit we have is a very, very competitive and very, very strong strength of us. 5.68 being for the quarter is one of the biggest, one of the very good number to boost off, rather I will say about the cost of deposit.

Aditya, Analyst — Securities Investment Management

No, sir, I completely agree. Cost per deposits is pretty good, but just wanted to get a sense. So, is the rate differential between us and some of our peer banks in core geographies, so has it increased, which could, you know, benefit us in garnering more deposits? Because they might have cut the deposit rates at a higher rate as compared to us.

Speaker 4

That may be a possibility because we were never paying much higher rates. We were always paying a particular premium over the leading universal commercial private sector banks. We were paying a very, very limited premium over the universal private sector banks since we followed the trust-based liability approach. So our premium is always 25 basic points to 35 basic points over top-led private sector universal banks. And we are following a similar philosophy right now. Maybe some of the peers have changed their pricing philosophy, so they may have got some temporary benefit out of it, but we are constantly following the same practice which we are following earlier, and that particular benefit has continued to come and will continue to come as we move forward also, and it is not just the pricing, it is other metrics also, what is your ADS, what is the rollover ratios, what is the granularity of the deposit, we are 90% plus retail deposit, we continue to have 34% plus CASA, we continue to have 90% plus CASA, 20% plus all over. So all those metrics are also very watchful metrics from the liability standpoint. How the liability is boosting? What is the average ticket? ETS of the term deposit is around 12 lakh rupees. Average ticket size of saving is around 50,000 rupees. So all these metrics are also very, very important metrics. Our deposit share in our home state of Punjab within 15 months increased to 1.3 on outstanding against 1.17 at the end of March So, all these metrics are the metrics, which are very very important metrics to see what is the strength of the deposit franchise of the entity.

Aditya, Analyst — Securities Investment Management

Understood, sir. On the agri piece, our share which used to be about 35% 2-3 years back, it is now around 26%. So how do you look at the agri piece? Would this share of agri loans keep continuing going down?

Speaker 4

We are typically doing Agri in the state of Punjab and state of Haryana only. We are not doing Agri in other than Punjab and Haryana. We have identified Punjab and Haryana as our Agri lending products. So, with over diversified diversification, when we are entering into the other states, like out of Punjab, Uki is also growing, so agriculture is consequently getting slightly lesser growth. But agriculture continues to be our primary growth level, and the current quarter, we grow it by 6.23%. If we talk about the quarter and quarter growth of the agriculture is concerned. So, with our diversified diversification, it is as part of our diversification agenda to have optimized number and we see the momentum available presently is of an indigenous-led business root. So, that particular business loan book is growing at a much faster pace. So, that's the way that is gaining their share. So, business loan book which was typically 23% a year back, now is 28%. So, consequently, there has been some compression in the Agri from what we were a year back to today. So, that is what we see about Agri. So, both the factors are playing and that is the way the things are moving. So, with that particular play, but otherwise, these three products Agri, Mortgage and Business. These three products are typically constituting 77% to 82% and which will continue to maintain a similar pie over the period to come also.

Aditya, Analyst — Securities Investment Management

Understood. Sir, but what I was coming at was because Agri is the highest yielding product for us. So, if the share reduces, how should we then look at the NIMs for us because that is one of the important levers for us to improve our ROE. So, how do you look at the NIM piece, directly?

Speaker 4

We are having a similar yielding product in the mortgage, that is LAP. If you look into the pricing within the LAP, that is also almost identical to the Agri. So, we understand that particular dynamics and accordingly over pricing of the growth level within the mortgage lab is also delivering the similar returns and even if you look into the MSME business. So, despite there was a compression in the deposit market, advanced market pricing, so we are able to maintain the right pricing matrix. So, we are quite understanding this matrix and quite watchful about our NEMEX pension. So, we are confident and to maintain or increase our NEMEX pension as we move forward.

Aditya, Analyst — Securities Investment Management

I understand, sir. Is there a scope for NIM to expand further? Because one of the levers was the improvement in CD ratio, which we have seen an improvement from 80 to now above, you know, above 87-88%. So, going forward, would the NIM remain at similar levels or there is a scope for expansion over there?

Speaker 4

I still believe there is a good lever available for expansion. Our average CD ratio for Q2 is 85.4%. So, there is a sufficient opportunity available for average CD ratio expansion. So, the average CD ratio, which is 85.4, I see there are other opportunities available to improve it by 2 to 3 basic points minimum. I'm not talking about the one quarter or two, but I'm talking about the medium term, that is one and a half to two year basis. So there is a sufficient opportunity available for the NIM expansion over that particular, over the next one and a half to two years. Good improvement, I can sense, and a good matrix will be coming from the NIM expansion, which will be taking us towards a rota journey of 1.6 from 1.39 where we are today. So NIM has a opportunity available for expansion from the CD ratio expansion again, still available is there.

Operator

Mr. Aditya, please reach out to the queue for more questions. Next question comes from the line of Satindar Singh Bedi with Pion InfoTech Limited. Please go ahead.

Satindra Singh Bedi, Analyst — EON InfoTech Limited

Yeah, thanks for the opportunity, and many congratulations, Mr. Samra and team. I think you are executing very well on your 2029 vision, and last 12 months, I think you tracked very well on that. My question, Mr. Jain, is regarding, so this 1.6 ROA vision that we have, so where do you see NIMP tracking on that ballpark, and where is the operating cost, because you've indicated these are the two main ads that you expect to contribute towards that 1.6. So what is the ballpark NIMP that should be there, and what is the operating cost by FY29? Second was regarding roadmap for any new product launch that we have. So you've given us a financial roadmap for FY29, but any product launch roadmap that I think would help. These are my two questions. Thank you.

Speaker 4

Yeah, Mr. Bedi, first of all, if I talk about our transition or I will say the journey from 1.39 to 1.6, this will be driven by two factors. One will be the lending must pension. Second will be the OPEX margin. NIM, which is presently 4.2, I believe that there is opportunity to take it from anything between 4.3 to 4.35, so we have around anything between 7 to 10 basic points advantage available from NIM, and strongly from the series of expansion. We are presently having an average series of 85.4, we want to take it to the mid to high 80s. So that will give us some good liver available without changing the pricing of the deposit or advances. That liver is available. So that is the one. And second, if I talk about the cost income, cost income which is present around 60%. Now I believe with the growth, the way the balance sheet is growing and the middle management to senior management cost is there and the fixed cost of the administrators already been spent. So with now with every increase in the business, we will be seeing some benefit pouring in from the cost income or I can say effects to the asset issue. So that my remaining component, which is, I am talking about, we are still talking about 2029, which is 2 and a half years away. So I believe there is a good opportunity available for the OPEX-led expansion. OPEX still, I will not say that we are very, very confident, we are happy. I still believe, yes, we are a growth engine. So growth engine will resuscitate in expanding move. So, but with the OPEX-29 also, I will continue to have a high cost income. I am not saying we will be optimized. So our optimization may be coming post that period. But FY29, we will be still seeing a good cost income improvement, even if we talk about the NE matrix. Our cost income, which we have improved from FY21 to FY26 first, now we are taking the next journey from that particular FY26 to FY29. So, that particular journey will be there. So, my chance is to NIM by 7 to 12 basic points and OPEX again by 8 to 15 to 20 basic points. These are the two drivers which will be helping us in building up the journey of the road expansion from the 1.39 to 1.6. Just the other lever non-interest is also there. I am not saying completely non-available. That will not be a very larger lever, but there will be some portion contribution by that also.

Satindra Singh Bedi, Analyst — EON InfoTech Limited

Okay, and so we are talking of an operating cost of, let's say, 280 to 285 bits in FY29 as a percentage of average assets?

Speaker 4

Yes, we can safely take that. Today, we are around 3.05.

Satindra Singh Bedi, Analyst — EON InfoTech Limited

Okay, okay, okay, fine. And any new products or launches?

Speaker 4

Yes, we are constantly, with each year, we are improving products. Rather than the product, we typically distribute showing the distribution on a bucket. Within the MSME, we have multi-products like CC, OD, WCTL, BLAP, term loan, project financing. So each year, we are putting in place multiple new products within each segment. So, all improvement in the existing product. So, we are quite watchful about what is happening at the ground level. We follow firstly a practice in which we follow at the beginning of each half year. We call it town hall meeting where all of our business leaders come. We understand what is the market dynamics, what is the pressure, what is the challenge we are facing, and then we redefine our products. So, product innovation is a constant thing. We will continue to have a product innovation on a diversification basis. Just we are evaluating earlier, as I said, some sort of consumption-led products also to faster the growth also. So, these are the something which we are evaluating, but very early stage of evaluation. So, we are evaluating that and deepening more on our business loan products. Business-owned products, after we enter into Rajasthan, now we are very limited, we have seven branches, we are leading that market well, and depending upon the market requirement, we may be responding with our product innovation for that geography, so that we can increase the penetration in that geography, which is a constant thing, which we are and which we will continue to do constantly, not that of IFI 29, each year end we improve our products to respond to the market needs.

Operator

Thank you. Mr. Bedi, please rejoin the queue for more questions. Next question comes from the line of Sripal Doshi with the Equitas P2.

Shreepal Doshi, Analyst — Equitas P2

Hello. Hi, sir. For giving me the opportunity once again. My question was more from understanding the AGRI piece. So while you highlighted that in the state of Punjab and Haryana, we have seen canalization helping us or rather helping everybody in that state. But how do you see at India level? Like, because we are one of the, let's say, expert and larger players in agri-loans, at least in some of the key states, but your study or your interaction with, you know, players, how do you see at India level some of the key states like Maharashtra, Karnataka, even Gujarat, Rajasthan, that belt in terms of drought or in terms of weak monsoon? And how well do you see the canalization or availability of, let's say, water there overall?

Speaker 4

Sripal, I appreciate you are asking this question. Let me put a caveat here. I have more data dumps available to the geography I am operating. I can give you a lot of data dumps about Punjab and Halyana, about agriculture, what are the do's and don'ts within Agri. We are evaluating the other geographies. I can say I started studying about Rajasthan since that is a new territory, but up to now my initial study results are not that encouraging. So, we have not opened the gates of agriculture in Rajasthan. We are not doing agriculture within the Rajasthan. So, at this point of time, I can say this much only. So, but I have a very limited, since we don't have any presence or aspiration, immediate aspiration to being in Maharashtra Karnataka, also I have a very limited, I have the reader information, like a reader, like any other reader for the agriculture side. I sense there is a good deficit this time, and with the deficit being a widespread, with a lot of districts being covered in a deficit. As part of my travel, I also observing the canal water outreach in Rajasthan is not that great, but with the indoor water, I can sensing there will be a good monitorable change is visible, which is possible within Rajasthan, which is monitorable for me to open the gates for agriculture in Rajasthan. So I am presently also keeping it close, eye on the macro and the... I will say the infra-developmental aspiration of the states on this particular canal water irrigation. So, this is the best answer I can give for my assessment about the agriculture. But Punjab Hayana are doing well. And I can tell one thing, we were expecting maybe some sort of the deficiency in the productivity per acre. But on the contrary, It is the up to now early trends, it is same or slightly better than last year. So, which is a positive surprise for me. I am also very positively surprised. I was expecting high heatwaves may have some impact, but my initial data flow of the first 15 days of the agri procurement or 20 days of agri procurement are positive, which is giving me a higher productivity than either the constant productivity or higher productivity in the last year. No geography within Punjab out of the 26 district, I've just come to know about one district in which there is a productivity lesser than the last year. In the 25 districts, the productivity is showing to be same or better than the last year. Which is against the overall belief, which we all believe in the high heatwaves and the lower productivity things will be there. But the actual data is showing different outcomes.

Shreepal Doshi, Analyst — Equitas P2

Got it. Got it, sir. Got it, sir. Thank you so much for that detailed answer. And good luck and happy Diwali in advance. Thank you.

Operator

Thank you, Shepal. Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question-and-answer session. I now hand the conference over to the management for closing comments.

Sarvjit Singh Samra, CEO

Thank you all for joining us today. I hope we have been able to answer most of your questions. If you have any further queries, please feel free to reach out to our investor relations team or to LCA, our investor relations advisors. As we head into festive season, I wish you and your families a very happy Diwali and a prosperous year ahead. Thank you and have a good day.

Operator

Thank you. On behalf of Capital Small Finance Bank Limited, that will conclude this conference. Thank you for joining us. You may now disconnect your lines.