Laxmi India Finance Limited (LAXMIINDIA) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Lakshmi India Finance Ltd. Q1 FY27 earnings conference call, hosted by GoIndia Advisors. As a reminder, all participants will be in the lesson-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 a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Deepak Baird, Managing Director, Lakshmi India Finance Limited. Thank you, and over to you, sir.

Good afternoon, everyone, and thank you for joining us for Lakshmi India Finance Limited Q1 FY27 Earning Call. On behalf of entire management team, I would like to welcome our investors, analysts, lending partners, and the stakeholders. Joining me today are Mr. Gopal Krishnan Sain, our Chief Finance Officer, Mr. Piyush Somali, who heads our Treasury function, Mr. Kuldeep Singh, our Chief Business Officer, and Mr. Sanjay Uja, who heads collection. I would like to begin to say that quarter 1, 2027 has been a strong start to the year of Lakshmi India Finance. The quarter reflects continued momentum across the business with healthy growth in our loan book and disbursements, improvement in margins and profitability, furthering strengthening of our liability franchisee as well as capitalized balance sheet. At the same time, we remain conscious that as we scale, maintaining the quality of our portfolio and discipline, our underwriting will remain the most important priority for us. Our asset under management stood at 1721.7 crore as on Q1 27, representing a growth of 28% year on year. Our own book increased by 31.7% to Rs. 1,626.9 crore. Disbursement during the quarter stood at 232 crores compared with 166 crore in Q1 FY26. Reflecting continued healthy business momentum, our MSME franchisee remained the core of our business with MSME. AUM of approximately 1395 crore at the end of the quarter. Our customer base also expanded to approximately 43,946 customers while our branch branches network increased to 194 branches across six states. The expansion of the network continues to be supported by our cluster-based approach. With a focus of building density in our existing market with selectively entering new geography. We remain particularly focused on semi-urban and ruler market across Rajasthan, Madhya Pradesh, Kuchera, Shatishgarh, Uttar Pradesh, and Maharashtra. Where we continue to see meaningful opportunity to serve, underserved, MSME, and self-employed borrowers. The quality of growth is also reflected in our financial performance. Net interest income increased by 39% on year to year to Rs. 47.1 crore. Profit before tax increased by approximately 72%, 21.9 crore, while profit after tax increased by approximately 70% to Rs. 16.4 crore. Importantly, our ROA improved to 3.45% from 2.75% as compared to year to year. Our MIM expanded to 11.36% compared with 10.43 a year ago. The improvement has been achieved despite of broadly stable portfolio yield with the key drive being the continued improving in our funding cost. Our average cost of borrowing declined by 67 bps year to year to 10.66%. This is an important area of progress for a company. Over the last several quarters, we have been steadily strengthening our lenders' relationship, improving our borrowing mix, and increasing our access to bank funding. We believe the benefit of this strengthening liability franchisee will continue to support our margins and profitability as a business scale. Our network stands for 482.8 crore as on June 30, 2026, while our capital adequacy ratio remains stronger at 25.32 with Tier 1 capital adequacy ratio at 24.82. Our debt-to-equity ratio stood at 3.1 times, and on net basis, after considering the liquidity position, net debt-to-equity is 2.57 times. We also maintained the liquidity at approximately 255.9 crore at the end of the quarter. Our ALM position continued to remain comfortable with cumulative surplus across maturity buckets. On the borrowing side, the quality of our lender franchisee continued to improve. During quarter one, we have raised approximately 296 crore of borrowing with banks accounting for more than 84% incremental borrowing. We have added new banks like ICICI at a very cheaper price, best price in fact I can say, and during this quarter. The increasing participation from banks together with our diversified lender base and improved credit rating from A- to A is an important validation of the institute's strengthening we have built over the last few years. Let me now address asset quality, which remains one of our key priorities as we grow. Our gross NPA stood for 2.08% and net NPA stood for 0.93% as on June 30, 2026. Importantly, both metrics improved sequently from March 2026 level. Stage 2 asset almost moderate during the quarter and at the same time credit cost of the quarter was 3.69 crore. Or you can say 0.95% compared with 0.58% in Q1 FI26. The increase was predominantly attributed to our vehicle financing portfolio. We have started monitoring the segment closely with our core MSME and construction portfolio continues to show the more moderate credit cost profile. Our overall portfolio remains secured, and our underwriting framework continues to combine centralized credit assessment with local market knowledge, physical verification, collateral assessment, and cash flow evaluation. Collection also remains highly branch-led and field intensive with a strong focus on early identification of stress and proactive engagement with borrowers. We believe this combination of secured lending, conservative underwriting, and localized collection provide us with a strong foundation to manage portfolio quality as we scale. Our strategy for FY27 remains unchanged. We intend to continue growth the business at the calibrated and profitable pace, while improving productivity from branch network that we have already built, and meaning part of our growth opportunity will come from the maturation of the branches open over the last two years. Particularly in a newer market such as Uttar Pradesh and Maharashtra. Along with increased density in our existing market, at the same time, we will continue to selectively add branches where we have attractive market opportunity and where our underwriting and collection capability can be replicated effectively. We are not looking to grow simply for the sake of balance sheet expansion. Our objective is to build a scalable, high-quality lending franchisee with sustainable return. Our investment in technology, credit infrastructure, collection, and branch-level operating capabilities are designed to support this objective. With the strong start of the year, we remain comfortable with the medium-term framework that we have communicated earlier. We continue to target AUM growth approximately 30 to 35% annually. As our newer branch mature and operating level improves, we remain confident in our ability to deliver strong profitability growth. We have earlier indicated PAD growth of approximately 40-45% for the current financial year, while Q1 PAD growth has been significantly ahead for this range. We believe this is prudent to maintain our existing guidance at this stage and assess the performance over the next few quarters before considering any revision. Our focus remains on delivering growth while protecting asset quality, strengthening our liability, franchisee, and improving returns over time. To summarize, quarter 127 has been a strong quarter for Lakshmi India Finance. We have delivered healthy growth, expended margin, significant improved profitability, further strengthened our capital and liquid position, and continue to deepen our banking relationship. At the same time, we remain watchful on asset quality, particularly within the vehicle financing portfolio, and we will continue to prioritize underwriting and collection disciplines. We believe the combination of our branch-led model, strong presence in underserved Tier 2 and Tier 3 market, prioritizing secured portfolio, improving funding franchising, and strengthening capital base provided us with a solid platform for next phase of growth. With that, I would now request Gopal to take you through the financial performance in greater detail.

Gopal, over to you.

Thank you, sir, and good afternoon, everyone.

I will take you through the key financials and balance sheet performance for Q1 financial year 27. Net interest income increased by approximately 39% year-on-year basis to Rs.47 crore. Operating expenses stood at Rs.29.9 crore compared with Rs.22.4 crore in corresponding quarter last year. The increase in operating expenses reflects the investment we continue to make in our branch network, employee-based technology and operating infrastructure as we build the platform for future growth. Despite this investment, the strong growth in net interest income resulted in significant operating leverage with profit before tax. Increasing by approximately 72% to Rs.21.9. Back for the quarter stood at Rs.16.4 growth, representing growth of approximately 70% year-on-year basis. Our return oversets improved to 3.45% compared with 2.75% in Q1, financially 26. Our return on average network was 13.86%. The moderation in ROE should be viewed in the context of the significant strengthening of our equity base following the IPO and subsequent internal accruals. Our portfolio will remain broadly stable at 2.6%. At the same time, average cost of borrowing declined to 10.66% from 11.33% in Q1 financial year 26. As a result, our name improved from 10.43% to 11.36%. We believe the improvement in our funding profile is an important structural driver of our profitability. Our assets quality, gross NPS stood at 2.08% compared with 2.13% in March 26. Net NPS stood at 0.93% compared with 1.09% at the end of March. Assets reduced from 46.6 crore to Rs 44 crore during the quarter, while Phase 3 stood at 33.5 crore. Reduit cost was 3.69 crore or 0.95% of average gross norm. Our PCR stood at 55.22%. Our liquidity position remains comfortable at approximately Rs.255 crore. Our A&M continues to show a cumulative surplus across the maturity buckets with a cumulative surplus of approximately Rs.420 crore at the five-year bucket. We believe the combination of strong capital, liquidity, and well-matched A&M profile provide us with adequate financial flexibility to support the growth plan for financial aid 27. Ready? I will hand over to Mr. Fyush to discuss our borrowing profile and funding plan.

Thank you, Gopal, and good afternoon to everyone. I will briefly take you through our liability profile and the progress we have laid on the funding side. Our average cost of borrowing for Q1-FI27 declined to 10% 66 dibs, compared with 11% 33 dibs in Q1-FI26. The decline in borrowing costs has been a key contributor to the improvement in our name during the quarter. Our focus continues to be progressively increasing the share of the banking funding and diversification of our liability franchisee. As of June 30, banks accounted for approximately 70% of our overall borrowing mix. While bank contribute more than 84% of the incremental warrants during Q1 FY27. During the quarter, we have raised approximately 296 Crore across nine facilities. We have added ICIC bank as a new lending partner during the quarter and continue to deepen our relationship with existing banking partners. Our Q1 Gaurang includes facilities from IDFC First Bank, Suryodha Small Finance Bank, Bajaj Finance, DCB Bank, ICIC Bank, Kenra Bank, KBV Bank, and Union Bank of India. The majority of these facilities were raised at rates around 10% to 10% 44 bits, reflecting the continued improvement across access to competitive funding. We also continue to actively negotiate rate reduction on our existing facility as repayment track record and lender relationship mixture. Going forward, our focus on the liability size remains consolidation of our existing lender mix towards banks, exposing new source of funding such as external commercial borrowing and trade guarantee battery structure. Continued use of direct assignment and increasing or focus on PSL qualifying lending, such as MSMA ticket size below 20 lakhs and vehicle loans. We continue to believe there is another 20 to 25 basis point of reduction available in our cost of borrowing over the coming quarters, assuming global rate conditions remain stable, which They currently are giving the RDI neutral stance. We believe the combination of our A-rated profile, strong capitalization, diversified lender base, and consistent repayment track record position us well to support our targeted balance sheet growth. With that, I will hand over to Mr. Kuldi for the business and operating update.

Thank you, Pius, and good afternoon, everyone. Our operating model continues to be branch-led with sourcing, underwriting, collection, all happening at the branch level, supported by our central credit and technology teams. As on 30th June, 2026, we operate at 184 branches across six states. Addition of 25 branches over the last year, Uttar Pradesh, where we added 10 branches this year, and Maharashtra, where we added 6 branches, are our two newest geographies, and both are progressing as per our expectations. Customer base grew to around 43946 from 37122 a year ago. This is 37% of our borrowers continues to be first-time borrowers in line with our positioning of serving MSME, small traders, transporters, self-employed customers that are largely underserved by banks and fintechs. On product mix, MSME remains our largest vertical at around 1395 crores of EVM. Followed by vehicle finance at around 131 crores AUM, followed by construction and loan against property at around 90 crores, wholesale lending at around 58 crores, personal loans at around 49 crores. Our overall AUM has grown at CAGR of 32.68% since financial year 23. On technology side, our sourcing, underwriting, servicing, and collection process are now largely digitalized. Through our LOS, LMS platforms, CKYT integration, RCU-based, field investigation, and digital collection through e-natch, autodialer, and payment aggregators. The only manual step remains in our process is physical signing of loan agreements, which we expected to move to e-sign shortly. On the vehicle's finance sector, Vehicle finance credit cost that Gopal mentioned from our operations standpoint, this is specific to the segment and not a broader underwriting issue. We have tightened acceptance criteria and increased fuel follow-ups frequency in this book specifically, while continuing to grow our other secure products as planned. Going forward, our focus remains Thank you very much, sir.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue...

Am I audible?

Yes, sir.

Auditor?

Yes, sir, you are audible. First question is from the line of Dipesh J. Sancheti from Mania Finance. Please go ahead.

Hi, am I audible?

Yes, please proceed.

Yeah, the branch network has expanded from 159 to 184 over the past year. How are the new branches performing versus a mature network, and what is the expected gestation period for them to reach steady state gestation?

So, hi, this is Kuldee. The branches which we have opened last year, the number was 25 branches. Out of 25 branches, one is already in the break-even space. And if we talk about the maturity, this is linked with the break-even only. So, the branch expenses and the branch income. If we calculate both, it comes around seven to nine months to take the break-even stage, where the AUM of a branch at around 1.5 to 2CR. See, we have actually categorized our branches into three categories, Tier 1, Tier 2, and Tier 3. So, tier 1 is having a broader resources where 5 to 6 ROs are there, the branch manager, DO, and other staff. Then the tier 2 where the 5 to 6 ROs. Then branch manager, then DO, and tier 3 is having few to five ROs and branch manager and DO. So there are three categorization which are based on the population and the potential of that particular market. So depending on the category, it ranges from 1.5 croats to 2 croats when it achieves to the break-even.

Am I audible?

Yes, sir, you are audible. Mr. Sancheti?

Mr. Sanchetti, can you hear us?

I can hear you. Yes.

I'm saying that you are targeting at 30-35% AUM

growth alongside 3.5-3.75% ROE and 13.5-14% ROE.

Over the next 3-5 years, what needs to change for Lakshmi India to transition from a regional NBFC into a larger pan-India MSME franchise? And what do you see as the biggest constraint in this ambition? So, we started with the Rajasthan way back in 1990, and then after when it comes to the NBFC in 2010. So, after Rajasthan, we opened branches in Gujarat, then after in MP, then after last year, last to last year, we opened UP, and last year, we opened Maharashtra. So, we are continuously growing in terms of the branches as well as in terms of the new territory. So, this year, we will probably move into a new state as well as growing into the existing states. So, by this, we'll grow up every year. We'll grow up in new states, one or two new states. So, definitely, it will move to the pan-India presence. But what is the aim for the new branches for it to, I mean, self-sustain or get into profitability? See, the profitability I explained already, it takes around 7 to 9 months to come over the breakeven. So, this is the tentative guideline. Some of the branches even profitable within 5 to 6 months and some takes 9 to 12 months also. But the average breakeven achieves in 7 to 9 months. No, but what is the, I mean, what is the loan given amount

at which it will break even? Yeah, so that is what 1.522 crores, once the EUM is built of a branch, then the branch comes on the, start coming on to the profitability.

Okay, and is the management really, I mean, happy with the kind of ROA we are doing? Because I think for a smaller, you know, NBFC like ours, this is just too small a number of ROE.

ROA is almost 3.45 right now, and I believe if you compare it with the company, so we are very stable with it, and we are improving it, and as we scale, as we are scaling also, so it takes time to build up, but yes, if you want to see the graph, it is on an improving side. So, we are targeting 3.5 to 3.75. So, I believe by end of the year, we will achieve that target. Right. Okay. All the best, guys. Thank you.

Thank you. Next question is from the line of Vineet Sharma from Param Capital. Please go ahead.

Thank you for the opportunity, sir. Just wanted to understand a little bit more on the growth strategy, both on the product and market side. So, firstly, on the product side, would it continue to be with the share of MSME increase going forward, or would we be scaling the other products as well? And on the market side, we saw some expansion in UP, MP, Maharashtra happening in this quarter. So, how would the overall geographical distribution evolve as the EVM scales up? If you could share some light on both these aspects. Thank you.

So, this year, we are planning to expand into 30 to 35 branches across the existing states. And in part of one, we have already added 10 branches. And as far as the product size, definitely the MSME would be the focused product and simultaneously we are looking for the other products also. So we continuously doing the research and analysis for the new product addition. So recently we have added a prime MSME product which ranges from 25 to 50 lakhs. With some improved credit guidelines, with the asking of the documents are more into this segment, and continuously we are also searching for new products, and going forward in future years, we probably will add some new products also.

So, with adding to this, our main focus will be on a secured SME and SME lending. So, and to customers, because since 2000, we have seen that secured business has given a best result in any type of market. So, we have a same strategy that our main core product will be and will be the same secured SME side and with increasing the network across Bharat. So, we have a presence in six states. So, now still there are many states and union territory which is untouched. So, we have a plan to open those territory also and to open more ranches over there in tier 2, tier 3 cities of the state and giving loans to such a self-employed customer over there and so that they can also be a part of a growth of Bharat.

Thank you, sir. That's helpful. Just one follow-up on that. Going forward, say, in a year or two, what would be the proportion of the top state in terms of the overall area? Trying to understand this a little bit more from the diversification perspective, if you could share some light on that.

See, today, out of 194 branches, so the main mother state is Rajasthan. So, percentage of Rajasthan will be a little bit higher, but slowly, the other states like Madhya Pradesh, Gujarat, their percentage is also increasing. So, I believe in coming three to four years, Rajasthan will be major, yes, of course, but yes, other states where we have good presence, we have open branches, so they will be also contributing handsome percentage in total AUM. So, if you want to see, we are very conscious on diversification also. So, we are having that presence in mind that we want to diversify our portfolio state-wise also. So, we are working on it, and coming years, we can see the changes in a percent holding of these states. Understood, sir.

Thank you so much.

Thank you. Next question is from the line of Mikhail Bhatliwala from Lakshya Capital. Please go ahead.

Hi, am I audible?

Yes, please proceed.

Yeah, so credit costs have gone up almost 1% in this quarter. What are the reasons behind this? Is this best coming from newer geographies, newer vintages?

So, credit cost has basically increased in a wheels portfolio. So, we have a wheels portfolio. So, a little bit stress has come from there. Otherwise, the main product what we have is a secured SME and all. So, there the stress is. We can't see the stress. But over to Gopal, if you can add some more points, please.

Thank you, sir. Main reason to increase in credit cost in quarter 1 is related to we have increased 10% extra provisioning on up money via transaction, for which we have already guided in March 26 as well as in December 25. Till date, we have offered 70% of provisioning in our P&R. Okay, this is a case-based study, and this study is considered current stage of case, future expected collection. Due to enforcement of activity, and if he received the collection rights by the help of the court, that time, historical collection experience of the organization, most likely settlement. So, till date, management believe 70% of ECM provisioning is more appropriate for quarter one. And subsequently, on each reporting date, we will observe Further improvement of the case and accordingly. So, main reason is up money. Despite of this, core business of company is remain stronger. Thank you.

Okay. Thank you.

Thank you. Next question is from the line of Davalpandia from Ariza, India. Please go ahead.

Hello, I'm Arun.

Yes, please go ahead.

Yeah, good afternoon, sir. Thanks for the opportunity and congratulations on good set of numbers. So, a few of my questions have already been answered. I have only one question left. From the expanding branches or the expanding states, which state or which geography showed the highest number of, you know, guidance or revenue growth?

So, our main 90 odd branches we have in Rajasthan being mother state. So, yes, of course, the major portfolio consists of Rajasthan. So, and because of the, you can say that the major, because of the major portfolio, the revenue income is also generated from a Rajasthan majorly. But other states, as I told before, that other states are also improving. They are also giving good support in disbursement. So they will also be having a good percentage in future. They will be also contributing good numbers in FAT in the coming years.

Thank you. Before we move to the next question, a reminder to the participants to ask a question, you may press star and fund. Next question is from the line of Shivam Rathod from MB Investments. Please go ahead.

Hello. Hello, everyone.

Yes, please go ahead.

Yes, sir. So, net worth increasing to 483 crores, while CRAR modded from 26 to 25 at the current growth rate. How much balance sheet capacity do you have before incremental equity capital become necessary?

So, basically, our net Libris stands for 2.43 to it, and we have a handsome liquidity also with us in a quarter end, that is 255 perot. So, to further increase in AUM, of course, this is a capital-oriented business. So, we have to raise the capital. So, we have a plan to raise capital in the next financial year. We will start, next financial year, mid, we will start the process and all. And we have a plan to raise further capital by around 300 odd crores. And by that time, I believe our leverage, we can easily extend to our leverage to 3.5 to 4 percent. And so that we can have a good ROE also by that time. And so, by that time, I believe we will be required. And still, Pius, if you want to add anything to it, please.

Yeah, thanks, sir. So, basically, the growth trajectory, Deepak sir, has already addressed that the need of the capital is always dependent upon the once we levered our balance sheet, the capital that we are having. So, tragically, we will be thinking of once the leverage reaches to the level what we have had before going for an IPO, that is around four, four and a half of that, the time will be reaching in, we are seeing that one year, One and a half year down the line from right now. We will be starting the exercises for the fundraising so that the return on equity will be is a factor of debt to equity in the rota. It will be translated into the maximized return on equity that we will be getting so far. Once we reach that stage, definitely we will be having an audit capital of 3,350 crores that we are planning so.

I hope you read.

Is this fine? Hello?

Any questions? Hello? Yeah. Sir, my next question is that what is your growth guidance for FI27 and FI28, and what are the margin guidance?

So basically, we are going on a year basis that is around 30 to 35 percent. We will be maintaining the space of growth going forward as well. The margin depends upon the cost of borrowing and other factors as well, the yield that we are giving to our borrowers. So, in order to address our businesses, we need to squeeze our margin going forward basis, but we need to maintain in the pace of the profitability that we are seeing. So, once the cost of borrowing is inclined, declining phase, we will definitely be giving certain pass on to the borrowers and definitely we will be maintaining this pace of margin that we are having in order to address that business going forward.

Good morning, everyone.

Mr. Shivam, does that answer your question?

Yes, sir. Yes, sir.

Thank you. Next question is from the line of Harkirath Singh from BT Electrocom. Please go ahead. Yes, you are audible. Please proceed.

My first question is regarding the Illinois impact and the global expertise. Are we facing any issues in our portfolio or do we expect it to impact in our Q2?

So, basically, the global war and all this is not much affected to us because our customer base belongs to tier 2, tier 3 cities of a state where they don't have any, like, transactions between the inter-country and transactions are there. So they don't have, but yeah, the crude price increase, especially impact everyone and to our customers also. So that is a little bit, we can see the incrementing cost to our borrowers. And otherwise, if you're going to see the other things are not basically any impact on this. And coming quarters also, we see that the collection efficiency will be well maintained, and in fact, we will try to improve it or much better to do it in the coming quarters.

Okay, and like considering the global uncertainties, so are we aggressively expanding our AEM or are we just conscious regarding our AEM?

So, yes, of course, as I told my speech also, so our main motive is not to increase the balance sheet size. Our main motive is to worry also after disbursement. So, we are taking, we have a risk-based disbursement and all. So wherever the stress we feel in the business area or anywhere, so we take calls, we stop funding or use the LTV, and we keep on discussing on these risk factors across points. So on the risk factor basis, we are taking calls on numbers, on a disbursement, and on a customer base and all.

Okay. And just a final question. What are net slippage in this quarter?

Slippage? 3.26 crore.

Stretch slippage. 3.26 crore. Okay.

Okay. Hello? Okay. Thank you. Thank you very much.

Thank you. Participants, to ask a question, you may press star and 1. Next question is from the line of Seema Abhajaj from RK Consultants. Please go ahead.

Hi, good afternoon, team. Thank you for giving me the opportunity to ask questions. Firstly, many congratulations on great set of numbers. And apologies, actually, I joined a bit late, so my questions might be a bit repetitive. So, our first question is that cost of borrowing declined by about 67 BPS, if I'm not wrong, to roughly 10.66%, and spreads expanded to roughly 11%. So, how much further headroom do you see for funding costs to decline? What is a sustainable NIM range for the business? If you could please let me know.

Yeah, hi Seema, this is Piyush. I'm heading the digital vertical. So the cost of buying is, as of now, you can see since the last 2-3 years, we are always on a declining phase. And the best part is that the rating has been upgraded from E- to A. And we have translated into slightly reduction in the cost of borrowing this quarter as well, but we see in the last 12 months of increment of cost of borrowing is due to 10.48 around as of now. Glendly, it's 10.66%. I mean to say that another 20 to 25 bits that I am seeing so will be further reduced in this year going forward basis depending upon if in case there is a global scenario is intact and there is no RBI height is there. So we will be further reducing our cost of government 0.20 to 0.25 bits. That's one. Secondly, translating to the business, I need to say that giving the relaxation to the borrowers depends upon how the trade and asset qualities are there going forward basis. Once everything is interacted, depending upon, I can say, the management call and the board call as well, we will be passing on to the borrowers as well.

Okay. And so my second question is that operating expenses grew by roughly 34% YOY, with employee costs of 36% versus 51% growth in total income. So as the branch network matures, how much operating leverage do you guys see ahead, and where could the cost to income ratio settle?

So basically, Seema, since we are in the growing phase, actually, so in a growing phase, always, there is an OPEX will be slightly higher in comparison to the larger piece of NDSGs, but you can see since last 12 or 18 months back, we are reducing our overall, I can say, cost in terms of this. But I can say since we are stepping into the new geographies, so OPEX in respect of opening the branches will be slightly, I can say, hype in certain areas. So eventually subsequent benefits will be fall on in the subsequent month only. That becomes part and parcel of the business. So, cost to income ratio is below 50% as of now, but I am seeing so the healthy cost of income ratio that we at death or we internally believe that it will be around 44 or 42% in between of that. We are trying harder, but still it becomes more challengeable during the growing phase as well.

Okay, okay. And my last question is that disbursements grew roughly 40% worldwide to Rs. 232 crores ahead of 28% AUM growth. So actually, how should we read this gap, basically? And does the current disbursement run rate give you confidence that AUM growth can accelerate from here?

Yes, that current trend rate of disbursement giving us the confidence to the AUM growth also. As far as the AUM growth and the disbursements are concerned, AUM growth depends on the disbursement as well as the repayment and the closures of the loan. So that is how you can view the difference of it.

Okay. Okay. Thank you. Thank you so much. So that's all from my saying.

Thank you. Ladies and gentlemen, that was the last question for the day. I now hand the conference over to the management for the closing comments.

Thank you, everyone, for your questions and for your continued interest in Lakshmi India finance. To conclude, quarter 127 has been a strong quarter for us with healthy growth across our businesses, improving strong profitability and continuing strengthening of our capital and funding profile. At the same time, we recognize that sustainable growth in lending requires constant attention to asset quality. We will therefore remain disciplined in our approach to underwriting, collection, branch expansion, and liability management. Our objective remains very clear to build Lakshmi India Panas. Into a scalable, well-capitalized, and sustainable lending franchisee, serving India, underserved MSME, and retail borrowers. We thank all our investors, lenders, partners, customers, and employees for their continuous confidence and support. We are looking forward to interact with you again the next quarter. Thank you.

Thank you very much, sir. On behalf of Go India Advisors, that concludes this conference. Thank you all for joining us and Human Outers Connect Your Lines.