Piramal Finance Limited (PIRAMALFIN) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY 2027 Earnings Conference Call hosted by Piramal Finance Limited. [Operator Instructions] Please note that this conference has been recorded. The result materials are available on the exchange and the company's website, and you may refer to them during the discussion. Please note that today's discussion may include certain forward-looking statements, which must be viewed in conjunction with the company's risks and uncertainties for the company's basis. These statements are based on the management's current expectations and are subject to uncertainty and change. On the call today, we have with us Mr. Anand Piramal, Chairman; Mr. Jairam Sridharan, MD and CEO; Mr. Rupen Jhavedi, Group President; Mr. Yesh Nadkarni, CEO; Wholesale Lending; Mr. Vikash Singhla, CFO; are Mr. Ravi Singh, Head IR Strategy. I now hand the conference over to Mr. Anand Piramal for his comments. Thank you, and over to you, sir.

Good afternoon, everyone and thank you for joining us today on this call to discuss Q2 FY '27 results of Piramal Finance. I hope you and your families are enjoying the ongoing festive season and I wish you all happiness and prosperity. An important announcement before we get into Q2 results discussion. I'm delighted to welcome Mr. Dinesh Kumar Khara, who joins today as an independent director for a 5-year term. Mr. Khara has been 1 of the most respected CEOs in the financial services sector during his tenure the market cap of SBI moved from $20 billion to $90 billion at a CAGR of 47%. During his career, particularly as Chairman of SBI, the strengthened 1 of India's most important financial institutions and expanded access to formal banking and credit for millions of Indians. His experience, judgment and deep understanding of financial services will be invaluable, and we look forward to his counsel and guidance. With that, let me now begin with a few observations on the macroeconomic environment and take you through our performance during the quarter. India's financial sector has remained resilient and geopolitical appeals, NBFC gross NPAs have declined significantly over the last few years, alongside robust credit growth. Particularly among upper level upper via institutions. This resilience reflects the strength of the broader Indian economy, international institutions like IMF have revised India's GDP growth projections for FY '27 and FY '28 upwards supported by robust consumption, capital expenditure and stable ForEx results. However, rising global inflation will exert pressure on India's cost of capital, H2 FY '27 is likely to see a broad-based increase in borrowing costs in line with the RBI shift from a neutral stance took calibrated tightening. Nevertheless, we do not expect any notable slowdown in borrowing activity with liquidity conditions remaining adequate. Emerging global risk weren't close monitoring, particularly rising U.S. and Japanese sovereign bond yields and the prospect of crude oil prices remaining high for longer, which could amplify inflationary pressures and tighten global financial conditions. Moving on to our company's Q2 performance. Our growth AUM now stands at 98.5% of total AUM. In Q2, growth AUM increased by a healthy 30% year-on-year. Total AUM grew by 24% year-on-year to 113, 112 crores. FY -- Q2 FY '27 RoAUM of growth business was at 2% annualized 34 bps on higher than 1.7% RoAUM in Q2 FY '26. In Q2 FY '27 or back was up 67% year-on-year to INR 545 crores with underlying growth business, PBT of INR 538 crores. Thus, our H1 FY '27 is also up 67% year-on-year and crossed the INR 1,000 crore mark. Asset quality was stable and healthy across both our retail and wholesale businesses and we share more details later on this call. In Q2, we completed a total equity fundraise of INR 3,850 crores, including a QIP of INR 2,100 crores and preferential allotment of volumes of INR 1,750 crores to the promoter group. This was our first fundraise as Piramal Finance, and we are encouraged to see the response to QIP in terms of demand from investors and eventually put an eventual participation of several marquee domestic and international investors. In September, we completed 5 years since the merger of DHFL in September 2021. In every possible way, this merger has proven to be transformational one for the company. It provides us a platform on which we could steadily build up further the acquired product suite of mortgages and real estate lending has expanded to more than 10 key product categories, diversified across secured and unsecured retail and mid-market corporate lending. In 5 years, post the merger our branch network and employee base has further grown by 3x while AUM have grown 5x in 5 years from INR 23,000 crores to INR 100,000 crores for the growth business, making us 1 of the fastest-growing retail finance stories in the country. While a large part of what we recorded on day 1 of the merged balance sheet has naturally run down in print of this arguably is the most -- on sequential FS mergers of India is visible across our businesses, balance sheet and P&L. In these years, we made gains of more than INR 3,000 crores on DHFL stress book, the large pool of long-term low-cost fixed rate borrowing rolled over from erstwhile DHFL continues to support our liabilities base. There is a tax shield of INR 16,000 crores of assessed carryforward losses, mostly arising from DHFL, still available to us. As the youngest NBFC among India's Apero NBFCs, we are privileged to be serving over 6.5 million customers across semi-urban India, combining physical distribution with technology and AI in our processes. With a AA+ rating and demonstrated retail-led diversified business model at scale, we are confident in our ability to deliver steady and healthy earnings growth. With that, I'll hand over to Garam to share more details on the results.

Thank you, Ana. Good afternoon, everyone. I will begin by providing some details on our performance for the quarter, our progress against strategic priorities and some special topical matters for this quarter. Let's start with growth on Slide #4. At the start of the year, we had guided for a 25% AUM growth in financial year '27. Over the medium term as well, we expect our AUM to double every 3 years implying an AUM of INR 1.5 lakh crores by FY '28. Against these aspirations in Q2 FY '27, our AUM was up 24% year-on-year to INR 113,112 crores. Growth AUM was up 30% year-on-year, while the legacy book came down by 69% year-on-year. With our growth AUM at 98.5% of the total AUM now and scaling up at 30-plus percent year-on-year for the past several quarters. We remain on track for our FY '27 and FY '28 AUM growth expectations. Our retail AUM growth remained strong. The strong pickup seen in Q1 and disbursement growth continued to get even stronger in Q2. Disbursements were up 34% year-on-year in the second quarter. Retail AUM grew by 30% year-on-year to INR 97,462 crores. Our mortgage business comprising housing loans and loan against property grew by 27% year-on-year to INR 64,650 crores. Mortgages account for 57% of the company's AUM. If you look at Slide 25, which has product level details. You will note that there are substantially higher growth rates that are visible for mass affluent housing loans and larger ticket as business within our HL and lab books. With our rating upgrade, our ability to serve these segments is significantly higher. With risk performance under control, AUM growth in our 4 unsecured product categories personal loans, unsecured business loans, digital loans and rural micro loans, all gained momentum. These AUMs were up 46% year-on-year to INR 23,764 crores and now form 21% of the company's AUM. If you look at Slide 31, you will see that our customer franchise grew by 26% year-on-year to 6.5 million. With the uptick in unsecured disbursements, both our overall customer franchise and our cross-sell franchise growth have been improving. Our sourcing from cross-sell in unsecured disbursements was at 30% which we expect to keep improving over the coming years. Our cross-sell portfolio, of course, comes with significantly lower OpEx and credit risk. In the second quarter, we did not add any full-service urban branch. We did instead, expand our network for gold loans and rural loans. The gold loans network expanded to 100 branches from 67 in the previous quarter, and we aim to have 200 gold loan branches by the end of March 2027. On the rural side, we expanded from 178 branches last quarter to 203 branches by the end of this quarter. The company's total branch network now stands at 838. Wholesale AUM was up 24% year-on-year in the second quarter to INR 13,978 crores. The mix between real estate and mid-market lending stands at 68-32. Moving on from growth towards profitability. I'd like to start from Slide #5. I return on AUM for our growth business increased to 2% per annum in the second quarter versus 1.7% in Q2 FY '26. Leverage i.e. AUM to equity was at 3.6x in the second quarter compared to 3.7x in the first quarter. In the second quarter, of course, we completed a capital raise that Anand mentioned, we have structured the race in a manner so as not to take a very large hit on leverage in that quarter with continued on growth, leverage should continue to progress towards our goal of 4.5x to 5x in the medium term. Let's go now into some of the components of our return on AUM, starting with margins. The company's net income margin was flat quarter-on-quarter at 6.5%, which you can see on Slide 50. This is very close to the level for our overall growth book net interest margin at 6.8%. And of course, it will get closer still as the legacy book goes off our portfolio. Cost of borrowing. Of course, a lot of attention has been placed justifiably on the liability side of NBFC books. I'd like to draw your attention to Slide 16, 17 and 18 for a discussion on our cost of borrowing. Our incremental cost of borrowing at Piramal Finance continues to decline steadily following our domestic rating upgrades to AA+ between January and March 2026, Cost of incremental long-term borrowing has declined from 9.36% in H1 FY '26 to 8.67% in H2 and further to 8.46% in H1 FY '27. We have roughly INR 37,500 crores of long-term borrowings which are due for maturity in the next 18 months. If you look at Slide 17, the bottom left chart shows that our current incremental cost of borrowing is meaningfully lower than the carrying cost of these borrowings that are going to mature and retire over the next 18 months. This continues to provide us a strong tailwind on the cost of borrowing side. Our market-linked borrowings are less than 1/3 of our total borrowings. We also have variable rate liabilities which are slightly lower than our total variable rate assets, as you can see in the top right chart of Slide #16. This again positions us well in a rising rate environment. Despite the way market rates have moved in recent months and the RBI's recent and likely upcoming repo hikes, we believe that our overall cost of business at Piramal Finance on a stock basis, will continue to be at similar or lower levels over the next 12 months -- cost the borrowing, I'm sorry. Moving to retail income. Slide 22. You'll see the total retail income was 14.6% of loans versus 14.7% in the first quarter. This is largely -- the small delta is largely driven by the higher number of days in the second quarter versus the first quarter. Other income was stable Q-o-Q -- if you recall, in Q1, we had made and disclosed to consider strategic choice to perform fewer debt assignment transactions, resulting in a reduction in our income line and an increase in ongoing annuity. Moving on to insurance. Following the 23rd September consultation paper from IRDAI, we had disclosed on 24th September, our initial assessment of how our insurance commission income is likely to be impacted. The company currently exclusively distribute life insurance products of America Life Insurance, where we have 50% stake as a promoter. If the consultation paper is implemented as it is, with an effective date of 1st April 2027, we estimate a gross reduction in insurance commission, potentially having 18 to 24 basis points of impact on FY '28 return on assets. However, that is at a gross level. Any improvement in economics of Primerica Life Insurance will flow back proportionately to Piramal Finance during consolidation. Thus, the company has a natural hedge and a clawback available in the way the company is structured. Apart from this, there are other levers that are available to the company as well. For instance, rationalization of sales incentives for selling of insurance and other forms of product clawbacks. We believe this can significantly cushion the impact on profitability on a net basis in FY '28 and beyond. In the near term, the company remains confident of meeting all our earlier stated FY '27 profit growth guidance of 50% profit growth year-on-year. OpEx -- retail OpEx to AUM declined by 5 basis points on a quarter-on-quarter basis to 3.48%. You will see this on Slide 22. You will notice that we have not consistently reduced our OpEx to AUM for almost 4 years. While we are now well in the target range of retail OpEx to AUM, the ratio continues to move downwards. The continued productivity gains for our employees and branches, we believe, have the potential to take retail OpEx to AUM to further lower levels over FY '27. The reduction in retail OpEx to AUM has driven growth business OpEx to AUM down 33 basis points year-on-year to 3.2%. At a company level, our cost-to-income was 52% in the second quarter, down from 61% in the second quarter last year and 65% in second quarter of FY '25. As you will see on Slide 52. Tech and AI have been key enablers of both our growth and our productivity enhancements. Slides 33 and 34 show some details of our enterprise AI strategy, which we have called piramal.ai. On Slide 33, the dashboard that we regularly share shows progress of AI use cases across all aspects of our business, such as sales, underwriting, collections, audit and compliance, customer experience and people management. Like every quarter, this quarter, we have put a spotlight on 1 area heavily impacted by AI. And this time, on Slide 34, we have covered customer experience, cx.ai. Most impactful use cases of AI in customer experience have been Genii powered automation of routine service e-mails allowing human agents to focus more on cross-sell to these customers leading to a 5x increase in cross-sell productivity of human agents, it versus what it looked like before AI took over e-mail response. We are our self-service AI assistant, interact with customers across WhatsApp Piramal app, resulting in 6.3 lakh interactions in the second quarter for queries payments and new loan offers. We have also generated 20% of our total cross-sell leads during the quarter. Our conversational AI part box resulted in INR 102 crores of PL cross-sell in the second quarter and INR 172 crores of end-to-end collection of overdue BMIs and fees in a human-free manner. You can see how cx.ai is boosting our productivity, digital engagement and cross-sell. Moving to risk. Credit risk across the portfolio continued to see the strength that we witnessed in Q1. All risk metrics, both early and late across both secured and unsecured continue to look very strong. Our overall retail 90+ delinquency is at 0.7%, stable in a narrow range of 0.6% to 0.8% over the last 4 years. Growth business credit cost was down by 10 bps quarter-on-quarter to 1.5%. Unsecured in particular, shows risk at multiyear lows and delinquencies at 1/3 of peak levels. There are 4 additional dimensions which I would like to share specific risk and sights on. First, in the IT sector. In the last quarter, I had mentioned emerging risk challenges in home loans for IT sector customers from South India. That situation persists. The good news, however, is that it has not spread to other adjacent segments. The second is on the monsoon impact the weak monsoon does not seem to have had a negative impact on agri income customers, at least so far. Bounce rate in this customer segment was the same as in the first quarter FY '27 and 110 basis points lower than the second quarter FY '26. Leverage at the customer level, overall leverage levels continue to be low, we have indeed seen some increase in leverage in digital lending business in Q4 and Q1, but that has subsided back down in the second quarter. As of this quarter, leverage of customers applying for loans from us is lower than it was 2 years ago in every single product category. The fourth dimension on which I want to add some risk inside is on gold loans. This is an merge important area of emerging risk in our mind, which is a rapidly increasing presence of gold loans from customer files. 2 years ago, on our portfolio, depending on product, 20% to 25% of customers had an active gold loan outside. That number is now above 35% in all product categories. Secondly, in financial year across the industry, approximately INR 4.7 lakh crores of gold loan disbursements happened to customers in deep delinquency, i.e., more than 90 days past due. Today, presence of a gold loan on file is not yet an indicator of higher risk in the portfolio. However, we believe that these data points that I just shared are worth noting and tracking. Lastly, along with growth and profitability, we have been equally focused on predictability and consistency. If you look at Slide #6, our second quarter PAT of INR 545 crores, has kept up the steady and predictable earnings trajectory over the last 8 to 10 quarters. Our trailing 12-month EPS growth is currently running at 155% year-on-year. We disclosed long-term 4-year plus quarterly data across most key parameters, showing the discipline and rigor that go into delivering predictability and consistency. Our risk chart, for example, cover both vertical and horizontal risk across the portfolio and across individual products for 4-plus years. With the transformation journey of the last 5 years since DHFL merger behind us, the recently concluded capital raise demonstrating the confidence of promoters and other investors and the strong performance in the first 2 quarters of financial year '27, we remain confident of meeting our near-term FY '27 and medium-term guidance on growth, profitability and stability of earnings and risk performance. With that, let me hand over the call to Yesh to discuss our retail business.

Thanks, Jairam. As of September 2026, the wholesale book stood at INR 13,978 crores, which was a growth of 24% year-on-year. Real estate to CMML mix stood at 68-32. Average ticket size of the book was INR 55 crores and average yield of the portfolio was 14.1%. During the second quarter, we disbursed INR 2,615 crores across 91 separate transactions, including 41 new transactions and 50 transactions, which were sanctioned in the previous quarters but were partly discussed during this quarter. Prepayments continued to be elevated as we received INR 1,889 crores or about 72% of the disbursed amount during the quarter. Due to higher rate of prepayments to date, about 74% of our contractual repayments due in FY '27 have already been paid by borrowers to us as of today. The strong prepayment trend continues as we have seen over the past few quarters as well and is proving to be a growth headwind for our wholesale business, but it also highlights robust portfolio performance. Typically, our legacy AUM decreased significantly by INR 780 crores or 32% quarter-on-quarter, leading to an AUM of INR 1,673 crores, which is now just 1.5% of our total AUM as Jairam to earlier. With sharply falling share of legacy book, we expect to discontinue its separate disclosures after the December quarter. The chunky reduction in legacy book in Q2 was PBT-neutral. We carry ECL provision of INR 459 crores on the legacy book. With this, I'll hand over to Vikash to cover financials.

Thank you, Yas. Moving to our financial performance. In Q2 FY '27, we reported consolidated net profit of INR 545 crores as against INR 327 crores in Q2 FY '26, which is up by 67% year-on-year. Pro forma PBT for growth business stood at INR 538 crore in Q2 FY '27 versus INR 344 crores in Q2 FY '26. The net income margin for company level is at 6.5%, which is up 35 basis points year-on-year and flat quarter-on-quarter. Growth business NIM was 6.8% versus 6.9% in Q2 FY '26 and 6.8% in Q1 FY '27. The capital raise in Q2 had a positive impact of 5 basis points on our NIM. Our total income thus grew 33% year-on-year to INR 1,767 crores. Operating expense growth was contained at 13% year-on-year. pre-provisioning operating profit, thus grew by 64% year-on-year to INR 846 crores. Growth business credit cost was 1.5% versus 1.6% in Q1 FY '27. In Q2, along with the election in legacy book, we had operating loss gain of INR 90 crores from recovery in legacy business. With this, company's overall credit cost was at 1.1% versus 1.8% in Q1 FY '27. Our total GNPA and NNPA were at 2.4% and 1.7%, respectively. Our networth stands at INR 31,180 crores. Our capital EPC is at 20.1% at the end of September 2026. In Q2, the QIP added almost 200 basis points or capital adequacy. It also had a positive impact of 5 bps on our RoAUM, and it led to reduction of just 0.1x in our Q2 leverage. We are confident to stay comfortable on capital adequacy over the next few years while funding our growth and expanding the leverage. As discussed in previous quarters, there are opportunity of non-dilutive regulatory capital reaching our balance sheet, likely over next 12 to 24 months. That, combined with our recent capital raise, implies and runway for growth capital for some years. With these remarks, I would now like to open the floor for questions. Thank you.

[Operator Instructions] We have the first question from the line of Shreya Shivani from Nomura Securities.

I have 2 questions. First is on the cost of funds. Now that we are officially in the rate hike cycle. What is our view on what product segments will we be passing on the higher rates to our end customers? When will we do it? Will we wait for another NPC before we take that decision? Any color around that would be helpful. My second question is on the yield movement. So there has been a significant sequential decline in the legacy book. However, the yields were sort of flattish between 1Q to 2Q. Is it fair to say that once it's completely out of the base from 3Q onwards, it will start showing up in the yield? Any thought process around that? And sorry, 1 more question. The third question is while asset quality trends, which is Slide 23 is stable. But if you see the vintage risk, there is a slight pickup in probably the digital loans and the housing loans, I guess the housing loans probably is explained by the IT sector employees, is that correct? Any other color around that would be useful.

Perfect. Great question. Thank you, Shreya. Question number one, cost of funds and passing it on to customers. See, we -- unlike banks, NBFCs are on a PLR regime, we will pass on rates when our PLRs increase, which will happen once our cost of borrowing falls. So essentially, wait for our cost of borrowing to fall, which will take a little bit of a lag. After that, there will be a little bit of a lag before we pass it on to our customers. In the last cycle, we saw the lagged impact on our cost of borrowing to be almost 1 year and then about a 3-month further lag for us to actually pass things on to our customers. 50% assets roughly are going to be of this variety where we can pass on mostly our home loans and loan against property customers. So I don't expect anything being passed on yet. We need to first see the impact on our cost of borrowing. If it's as increasing, then we will go ahead and increase rates. Otherwise, you shouldn't expect to see much action on that front. Your second question was on risk, right? NIM aluminum, Okay, yes. and what happened to yields and why didn't yields go up if legacy book came down. To some extent, your hypothesis is getting, but also there's a simpler explanation which is more -- which is a simple technical explanation, which is that number of days in this quarter was higher by 1 day compared to the previous quarter. That takes away almost 11 basis points of yield is calculated for the retail business. And since mostly, our book is retail, that shows us the compression in NIM. It's not real. So don't worry about it, it's just optical based on the number of days. Your third question was on risk and particularly, you spoke about Sorry

Slide 24 vintage risk.

Vintage risk. See, the digital loans, there is nothing that's real, like this is -- the Q4 was low, otherwise actually there is nothing much there. The risk is looking very good. And by the way, digital loans, 90-plus percent of our lending is on FLDG. So anyway, it's not credit risk on our book. Whatever increase happens here, unless we breach the 5%, it's basically on the partners book, not on our books. So I'm not worried at all on the digital lending side. Your cash on housing loans is absolutely the right one. that is appropriate to look at. That is a real increase that has actually happened there. There is 1 big case. There's a INR 4 crore case from Q2 of FY '26. Which turned out to be fraudulent, which is there in that number. So that number has ticked up because of that 1 case. I expect that number to come back down in Q2 because we are seeing the Q2 numbers at the 9-month level, they are looking a lot better. So I expect that, that number will come back down. But that 1 is a real uptick driven by 1 fraud case.

Right. That's useful. Sir, on the commentary that you made on the that you know the gold loan disbursements are towards customers in deep 90 plus, et cetera. Any thought process around your own strategy? I mean how are you thinking about it about your own team.

So depending on how you count on a gross disbursement basis, anywhere from 15% to 22%, 23% of gross disbursements and gold loans over the last year have happened to customers who are 90 days plus past due or at least 1 of their life trades. It's a shockingly high number. That number for Piramal for October so far is less than 1%. We do not disburse loans to customers who are more than 90 days past. We just don't do it, even though that's almost a fit of the market today. So of course, we are a very, very, very small player in gold loans, we just started. So -- but we -- this is not an area where we are going to compromise. So it's less than a percent of our disbursements.

The next question is from the line of Renish from ICIC Securities.

Congrats team for a good set of numbers. Sir, just 2 things again on this vintage risk slide. So when we look at HL&Lab for both these segments, we have seen a very stark increase in 90 plus on sequential basis. So just wanted to know what is happening here. I mean I heard you on this trade issue on the tie side, but more specifically the lab what is happening. And also when we look at the use car also, there is some increase. So just wanted to understand why our new book asset quality is basically inferior to over period-end book quality?

I'm not sure where like -- see, if you look at paper, you can see the small uptick in housing loans and kind of lap as well. Everything has been going down. So like overall, as you can see, the overall numbers are down, not up. So new business quality is all significantly better than it has been. -- let us understand your question.

Yes. So I will just maybe repeat my question. So sir, I'm referring to your Slide 23 and even in that slide, if we look at the used car loan, right, which is 5% of the book there last 3 quarters, our 90-plus is 1.2%, which is

Correct.

But when we -- when I look at the vintage risk slide, the same -- I mean the same used car There'll be -- the plus is actually running higher than the book already, I mean, the period-end book I'm just wondering, does that mean the incremental business is being booked at inferior 90-plus because

No, I understand what you're saying. This is a different metric. So see, when you look at a food stock what happens is you have clients who are days -- kind of Verones on book, 1 month, 2 months, 3 months, 7 months, all the way to 9, 10, 11, 12 and then 23, 24, 25, et cetera. 12-month book is about the peak of where risk is going to be at its peak, right? But the full formula when you see it, it will have both the peak as well as a bunch of non-peak vintages out there. And hence, the portfolio numbers are going to be lower than that, because it's an average of many, many guys. This metric, the horizontal metric essentially just shows 1 vintage, 1 tranche and looks at them when their risk is like you to have peaked, which is around 12 month mark and say that of risk.

Okay. Okay. Got it. So it's on a rolling basis, right?

It's on a rolling basis, absolutely right. analysis

Got it. Got it. Got it. No, I thought it just I think full 12 months and not ruling but I understood completely setting this so much. And again, going back to the sales question, what share asked on the NIM side, right? So again, when we look at the growth business NIM, which is at 6.8% and when we look at the company, NIM, it is 6.5%. And also as per our Slide number 51, the legacy book share is just 1.5%. So just wanted to know, optically maybe over the next 2 to 3 quarters. So your growth NIM should be the company NIM, which is obviously 30 basis points higher. So does that give you a natural hedge against the rising rate cycle and hence, despite the rising rate, our NIM actually should expand from here on. The only reason being legacy book coming down.

That is absolutely correct. Mathematically, that is bound to happen.

Okay. Okay. Got it. So we are not too worried on the rest cycle.

Not really. I mean, I don't want to be too talking about this. But there is no -- in our business, there are 2 natural hedges that exist from this -- on the rate cycle. One is the legacy book. The other is our recent ratings and hence, ratings up, hence, our incremental cost of borrowing being significantly lower than what our book is and what our retiring debt cost is. These 2 things are material items, which provides a natural hedge against a rising rate cycle.

Got it. Got it. And maybe just last thing. So given we also had 1 of the largest prime housing arena increasing their PLR rate just in the month of October. And if that happens, then, is that upside risk over me?

Not real I don't expect us to raise rates for customers. [Foreign Language] It thought it would be unfair for me to just pass on a rate increase to customers when I'm not seeing that great increase [Foreign Language].

We have the next question from the line of Ashit Tibrewal from Motilal Oswal Financial Services.

So first, a clarification. If I look at our consolidated P&L, we had reported loan loss provisions and payable loss INR 300 crores, while if I look at our growth business, there, the credit costs up or INR 400 crores.

Correct.

So just trying to understand, is there some giveback from the legacy book? Or is it some other business subsidiary, which is contributing to this?

No, no, it's all legacy book. Legacy bookExactly the right date that we come, which we're using to create other buffers as well.

Got it. revenue. The second question that I had was around liabilities, while in the last 2 participants, you remember the last book margins and how they could trend in a rising rate cycle. But I could also see 1 of your slide, you have mentioned you have about INR 29,000 crores of debt coming up for maturity next year, which are at a higher rate than the incremental cost of borrowings. So isn't that should at least that maturing debt should bring down your cost of borrowings because is expected of where your incremental is -- there is also a

Yes, yes. So my [Foreign Language]. So my gross cost of borrowing of the stock will come down.

Great. Got it. This is also clear. And lastly, sir, now if I look at this quarter, we have reported a 2% kind of RoAUM for our growth business, and we had given out an exceed quarter target of about 2.5%. And the long-term goal is to take it above 3%. So now with the retail OpEx OEM already settling below 3.5%, credit cost stable at 1.5%. What are going to be the key incremental levers to bridge this gap from current 2%, 3% over the longer term. Basically, what I'm trying to understand is how much of this improvement can come from operating leverage, margin expansion, product mix, credit costs?