Q1 VF stress + Q2 Cobrapost gone.

On outlook, beyond the overlay buffer, what is the trajectory getting into FY27 for AUM growth and credit cost? Anything particularly on Vehicle Finance where credit filters have been tightened or screening improved?

First, on the credit filter side, we have been continuously working to improve the Gini coefficient of our underwriting tools across all divisions. This will help us further reduce credit costs. For this financial year, we continue to maintain our committed growth trajectory of 20% to 23%. We are also expecting our net credit cost to decline from 1.6% pre-overlay to around 1.5%. Consequently, our return on assets should improve, moving closer to a pre-tax ROA of 3.5%, as previously discussed.

On credit filters - sorry, didn't get that exactly. And no further overlay needed? Is INR200 crore sufficient given current dynamics?

Ravindra: We have been working on improving our underwriting tool, specifically the Gini coefficient, which helps us validate the accuracy of our credit decisions. This initiative has been in place for the past year and has already helped us improve asset quality across CSEL, CD, and the Vehicle Finance segments, particularly in the fourth quarter. Arul: Yes, this is more of a precautionary measure, considering the global uncertainty and the potential for higher credit costs. As of now, however, there is no need for any additional overlay.

For April '26 Tata and Eicher have reported good CV volume growth. Should that be taken as a proxy for ground sentiment? Or do you see risk to CV sales momentum sustaining? Could that be a risk to your growth guidance?

Not only has the commercial vehicle segment shown strong performance, but the passenger vehicle segment has also reported good numbers in the month of April. We have had the opportunity to review our own performance as well, and our sales, credit, and collections have been very strong compared to April 2025. As of now, at the ground level, we have not observed any change in customer behavior.

On Gold Loan - average exposure per customer comes to INR5-6 lakh. What ticket sizes are you doing in Gold Loan and what yields are you charging? How are you positioning versus other gold loan NBFCs?

Our average loan ticket size in Q4 has declined. When we started, the average ticket size was around INR 3 lakh, and it has now come down to approximately INR 2 lakh. In the gold loan segment, customers typically take more than one loan. As a result, total customer exposure can vary between INR 5 lakh and INR 6 lakh per customer. Ravindra: So, ticket size is INR2 lakh now. It had started with INR300,000, it has come down. And yield has gone up now to 15. Ranjit: So the yield is healthy as compared to our competitors. Our strategy is to get as much granular as possible, get into more of the retail customers.

On the CSEL piece - we are starting to see genuine turnaround on asset quality and growth. What is incrementally the growth potential? Opex levels have also gone up - where are we investing? What can be a steady state ROA outlook for FY'27 and '28 in CSEL?

CSEL currently operates across two business segments. The first includes unsecured personal loans, business loans, and professional loans. The second includes consumer durables financing, mobile lending, and direct-to-customer financing. Loan losses declined to 5.2% in Q4, and we expect this trend of improvement to continue. With a Q4 ROA of 2.3%, we believe that pretax ROA should comfortably cross 3% during the current financial year. Disbursement growth stood at 39% in Q4, and we expect the combined CSEL portfolio to reach approximately 20% asset growth by Q4. Operating expenses were higher in Q4 primarily due to the payment of CGTMSE insurance. The one-time impact seen in Q4 - around 6% - will not recur, and operating expense ratios are expected to normalize closer to 4.5%. Overall, we expect ROA to increase from around 1.6% in the previous year to 3% or higher going forward.

On CGTMSE - what percentage of PL is covered? And around INR10,000-INR12,000 crore asset right (ex-CD)?

As of now, we have covered around 70 percentage of our assets. And we continue to improve that. Probably, we may go up to 80% to 82%. That is what our plan is, to cover the asset in unsecured business. It is only BL portfolio that we are going under CGTMSE, and it will be around INR3,000 crores to INR3,500 crores. Ravindra: The business loan portfolio stands at around INR 5,000 crore, of which approximately 80% - about INR 3,500 crore - registered as part of CGTMSE last quarter.

On asset quality in April - how are bounce rates trending across vehicle finance, home loan, LAP?

Ravindra: The largest benefit is expected to come from the Vehicle Finance segment. Balraj: We have just closed the month of April. Early defaults and non-starter accounts are significantly lower in April 2026 compared to April 2025. These levels are broadly in line with the April-March trends seen in 2024 and 2025, and we have not observed any meaningful deterioration. Typically, we see some level of deterioration moving from March to April, but this year the trend has been more favorable. Second, even at the first-cut level, our net credit loss numbers are lower than those recorded in April last year. Overall, the trends so far have been encouraging.

On ROA tree - last 2 years ROAs at 2.3-2.4% from VF were tough. With FY'27 credit cost at 1.5%, what levers are on the ROA tree (vehicle, CSEL fintech run-off) that can lead to ROA expansion this year or next?

This is Arul here. We expect NIMs to largely remain stable at around 8%. While the newer businesses will deliver higher yields, this benefit is likely to be offset, on a conservative basis, by a marginal increase in the cost of funds over the course of FY27. Operating expenses are expected to remain broadly stable in the range of 3.0% to 3.1%. The key improvement will come from net credit losses, driven by both the Vehicle Finance and CSEL segments. This should result in an improvement of around 20 basis points. Currently, our ROA stands at about 3.3%, after factoring in a management overlay of approximately 9 basis points. If we exclude this overlay, our underlying net credit loss is around 1.6%. Even with a modest improvement to 1.5%, we should comfortably achieve a pre-tax ROTA of around 3.5%.

On ARCs - what is the approach in coming year? Particularly for SBPL where SARFAESI cannot apply?

Our focus will be to use ARCs in cases where we are unable to pursue recovery through SARFAESI. This would typically apply to loans with ticket sizes below INR20 lakh, whether from the home loan portfolio or SBPL. These broadly fall under two segments. SME and LAP - where ticket sizes tend to be larger. In such cases, we will predominantly rely on SARFAESI for recovery, and the use of ARCs is likely to be limited.

Within vehicle financing book sub-segments, April trends look good but are there any product sub-segments or geographies where you are seeing anything unusual? And till now, no impact of the war?

Over the last three years, we have faced challenges stemming from both geographical and product-specific factors. This is why we have consistently described the period as a down cycle for the vehicle segment. From Q4 onwards, however, we have started to see a meaningful improvement. Last year, at this time, Chola's growth was primarily driven by three engines - LAP, SBPL, and Home Loans. Today, all eight business engines are contributing to growth. Within Vehicle Finance itself, we are diversified across segments, and at the Chola level, we are diversified geographically as well. This diversification positions us well to manage and absorb the uncertainties that exist in the market.

At around 6.94x gearing and 20-23% growth guidance, when will you raise capital if needed? 19.2% CRAR - will we consume capital for growth or are internal accruals sufficient? Internal policy on gearing ratio?

We closely monitor our capital adequacy ratio and have clearly articulated our guidance in this regard. If our Tier 1 ratio were to approach 13%, we would certainly begin evaluating equity-raising options. However, in a scenario where we are delivering a pre-tax ROTA of around 3.5% and growing at a pace of less than 23% to 25%, we believe we should be largely self-sufficient in meeting our capital requirements through internal accruals. That said, if attractive growth opportunities arose, we would not hesitate to consider raising additional capital to support and strengthen growth. Any such decision would be taken in consultation with our promoters and senior leadership.

On vehicle loans this year, what is the disbursement and AUM growth that you're looking at? Even with disruptions, confident on this level?

In Vehicle Finance, we expect the current momentum seen in Q4 to continue. Based on this, we are guiding towards disbursement growth of around 15% to 20% and asset growth of approximately 18%. Yes. That is what Balraj is committing.

On the Fintech book - how much is left to run down? Have you changed any PD-LGD assumptions in the overlay? Does run-rate credit cost change?

The amount is expected to be in the range of INR 300 to INR 400 crore. However, this will have a relatively long tail, as it will be spread across the entire year, given that these are exposures outstanding for more than one year. No, we have not made any changes to the PD-LGD assumptions. If we were to change the PD-LGD, there would be no need for an overlay. The overlay has been determined based on our past experience during similar situations, such as the COVID period and the phase of elevated diesel prices. To appropriately capture the impact of developments that occurred post-February, we chose to factor them in through a management overlay rather than altering the underlying PD-LGD assumptions.

On HL yields - the 50-bps jump - is this from assignment income/up-fronting? And the CGTMSE cost this quarter would be roughly INR40 crores?

Assignment income is not credited to the respective business portfolios; it is disclosed separately. Also, we have not assigned any part of the home loan book. The assignments relate only to certain other portions of the portfolio. This primarily arises from ARC accounting, where the ARC receipts are recognized as income, while the corresponding net credit losses are higher. When these two effects are netted, the overall ROTA remains largely unchanged. CGTMSE cost - INR38 crores. Ravindra: Page number 72 footnote is there. 0.39% is the NIM gone up because of that.

On home loans - what would it take for HL disbursements to pick up? Has been INR1,800-2,000 crores range for 7-8 quarters now.

The key point is that, as of now, we are maintaining a steady book growth rate of around 23%. We expect Q1 to be slightly better than this level. For the current year, we expect disbursement growth in the range of 12% to 15%, while maintaining steady AUM growth of around 25% or higher. Four years back, our presence was largely concentrated in the southern region. Over the last three years, our scale-up has led to a pan-India footprint. Looking ahead, we expect the coming year to be a phase of meaningful scale-up in disbursements, along with improved operational efficiency. This should enable us to sustain a ROTA of 4.2% or higher. Ravindra: We remain confident of achieving asset growth of 25% or higher in the Home Loan and LAP businesses. In addition, our other mortgage segments - SBPL and SME - are expected to grow at a rate exceeding 30%. Taken together, growth in the mortgage businesses will continue to be the primary driver of overall company growth. We are comfortable reiterating our guidance of maintaining overall company growth in the range of 20% to 23%.

On Vehicle Finance - if fuel prices go up 10% tomorrow, how much do you need to increase freight rates to offset that and maintain steady profitability per truck?

There are essentially two types of customers to consider, to begin with, HCVs account for only about 5% to 7% of our overall Vehicle Finance portfolio, which is a relatively small proportion. The bulk of our business is in small commercial vehicles, light commercial vehicles, passenger cars, and construction equipment, where fuel price fluctuations have a much lower impact. Even within HCVs, the impact is primarily on long-haul transporters who consume significantly more diesel. For example, a long-haul operator may run around 6,000 kilometers over 20 days, with an average fuel efficiency of about 3 km per litre. This translates into diesel consumption of roughly 2,000 litres. If diesel prices increase by INR20 per litre - around a 20% to 25% rise - it results in an additional fuel cost of about INR50,000. Typically, a long-haul transporter's net income after all operating expenses is around INR1 lakh. Even with this increase in fuel costs, they are still left with about INR50,000. Our exposure, however, is predominantly to small road transport operators who operate within a city or within a state. For these operators, passing on increased fuel costs through freight rates is relatively easier.

Why will fuel price not impact LCV operators? Is fuel cost a smaller proportion of revenue than for heavy?

They do not operate over long distances like 6,000 kilometers. Their operations are limited to shorter leads. In addition, they are market-load operators who source loads from the open market and are able to pass through fuel cost increases relatively quickly through freight rates. Arul: Daily pricing, it's like a daily pricing. Ravindra: Pricing in this segment is daily. It is not fixed or predetermined, and operators adjust freight rates dynamically rather than having to work within a fixed pricing structure.

LAP PBT as percentage of total PBT is roughly 30-31%, which is quite high versus previous 5-6 years where it used to be 19-22%. Any reason it's here or likely to come off?

They have been growing their book at a healthy pace, and costs have also remained low. This is encouraging, and we are quite pleased with the performance. We would like to continue on this trajectory going forward. Yes, it will stay at around 30%.

On branch addition - what are plans to add branches in vehicle, home equity and home loans in FY'27?

The key point is that we already have the Vehicle Finance branch infrastructure in place. For us, this is primarily an extension through additional manpower. We are planning to open around 60 new branches in Q1 and another 40 branches in Q2, taking the total to approximately 100 Home Loan branches in the next financial year. Arul: These will be shared branches of Vehicle Finance. Unique branches would be the gold loan branches, which should be in the range of around 300 plus. Ravindra: Gold loan is adding 360 more. Today we are at 119. 480 HL will increase another 100, LAP will add 100. Similarly, CSEL and CD are also likely to add 100 branches.

On Vehicle Finance - HCV has seen very strong growth this quarter. Are we seeing similar trends in April? Competition from banks in this segment, especially newer side?

As of April, we have recorded growth across all segments. We have seen growth in passenger vehicles, two-wheelers, heavy commercial vehicles, and light commercial vehicles. Across all product categories, we have also been able to increase our market share. Ravindra: As of now, we have not seen any significant change. The situation remains at a similar level to where it was earlier. Balraj: We have not observed any significant change in competitive behavior over the past four to five months. Even in April, there has been no noticeable shift.

On cost growth - FY'26 employee cost was around 27% YoY. Going forward, with investment in gold loan and newer businesses, how should we look at overall cost growth vs AUM growth? When does operating leverage kick in?

We believe it will take another year or so before we start seeing meaningful operating leverage, as we are currently adding new branches across most of the businesses we discussed earlier. As a result, we expect operating expenses to remain around 3% of average assets on an overall basis. There may be some quarter-to-quarter fluctuations, but broadly, this is the level at which we expect to operate for now. There is a significant capital outlay involved, as these are exclusive branches and require new hiring. Unlike Vehicle Finance, we cannot rely on fresh or entry-level hires; we need experienced personnel, particularly from businesses such as gold loans. Additionally, there are parallel initiatives on the IT front, including investments in AI-driven capabilities, which are also adding to costs.

CSEL is doing good, Vehicle finance pain is now out, growth confident. With INR200cr overlay already on credit cost, why still guide 1.5% credit cost? History has been 1-1.4%. Why not 1.4%? Are we being conservative?

For this year, our credit cost guidance is 1.5%. If we achieve this level, then next year the expectation would naturally be to improve further, say to 1.4%. In that sense, credit cost improvement is a continuous journey year after year. We do not want to over-promise or set aggressive targets upfront; let us first see how much improvement we can deliver this year, and based on that performance, we will aim to improve further in subsequent years. Some of our high-yield businesses - such as CSEL, consumer durables, digital, and mobile lending - are structurally designed with higher net credit costs. Historically, this has been in the range of 1% to 1.2% but redefining a steady-state level will take time. Once all eight businesses are fully scaled and stabilized - over the next one to two years - we will be in a much better position to clearly define our long-term ROA and net credit loss levels. For now, we are comfortable holding our guidance at 1.5% for the current financial year, while continuing to work toward further improvement.