Rental and ECL-refresh narratives buried.

New account addition significantly lower than previous year. How do you see this going forward?

We have mentioned during our previous earnings call that we will target acquisition of 9 lakh to 1 million for the quarter, and we have ended this quarter with around 9.17 lakhs. So we are on track, and we have said that the growth will be calibrated. We look at the next quarter acquisition to be somewhere in the similar range. And continue with adding high-value, good quality customers.

Cost-to-income ratio at 57.2%, 6% higher than previous year. How do you see this going forward? It used to be 51-52%.

We expect the cost to income to be in the range of 55% to 58% for the next year as well. The change has largely been on account of the corporate spends, because the corporate spends this year have been way higher than what they were last year. They basically add a few percentage points on the cost to income. Next year, growth will be a very BAU kind of a growth, we don't expect a very significant increase in the cost to income because of the corporate spend. There's normally a passback involved in the corporate spend on account of which the cost goes higher. Overall, the business is profitable, but the margins are comparatively thinner.

How should we think about cards-in-force growth slipping to mid-single digits? Is it underwriting tightening or are applications slowing down?

Applications are definitely not slowing down. Overall, I think the issuers have seen in the last couple of years, some asset quality issues. So there's more tightening, which has happened on the underwriting side. It's normally the existing customers, credit-tested customers who are getting new cards issued by another new issuer. So yes, there is a little bit of a caution, which has resulted in comparatively muted growth in the industry.

On revolvers — hypothetically if revolver falls to 20 or below, how do we protect profitability? Do we cut rewards or hike revolver fee?

We have not indicated a specific number as to where it's going to go. There will be a downward bias. Last 2 years acquisition, as we have been saying, we have been selective. So they are showing a lower revolving behavior. Our first attempt that we will do is to compensate it through the installment lending portfolios rather than cutting a rewards program. The installments lending would be our first chosen preference. We would like to invest heavily there to get the asset build up there.

For next 1 to 2 quarters, is there still kind of a downward repricing room left on our cost of funds?

Our borrowings do reprice anywhere in a 60- to a 90-day bucket. So yes, there will be some repricing that will happen over the next quarter or so. I don't know about whether the repricing will help us in a declining cost of funds. It all depends upon where we see the rates given the macro environment.

Other income two quarters at INR200cr run rate vs prior INR100cr — any one-off or sustainable?

In the other income, there have been some one-offs as well, which we have disclosed in the exchange filing on account of certain provision release and another provision around the tax matter, where that number has been added to the other income for FY26. Therefore, when you look at year-on-year for the quarter, that number is higher.

70% borrowings linked to T-bills — assuming rate stays here, where do cost of funds head?

That's right. T-bills or repo rates about 70%, 75% of our borrowing is floating. Should stay stable in that case.

Cost to income — adjusted Q4 at 60%. For FY27 55-58% guidance — confidence at lower end vs higher end?

You're right that this particular quarter had a one-off, which obviously added to the denominator. As we look at FY27, there are various initiatives on to ensure that the expense lines are contained. There are initiatives on to ensure that we actually book higher revenue line items, both on the interest income and the fee income. We do think that this number should stay between 55 to 58.

Corporate spends would be in the base — why would cost-to-income remain elevated next year?

The fact they're already in the base would mean that the variation in the cost to income between this year and next year will not be very high. But because they are part of our business and contributing both on the numerator and the denominator will keep the actual metric high. You won't see a big jump the way you saw it between last year and this year. If you go 2 years back, you saw a cost to income higher than present number. So it saw a very big decline, when the corporate spend went off.

INR47 crore credit cost reversal — is reversal pattern likely to continue?

We wrote back INR47 crores this quarter. But as we mentioned, INR220 crores of management overlay is being retained. The overall ECL number is a function of stocks in Stage 2, Stage 3 and the provision rates. Stage 2, Stage 3 stocks have gone down substantially on account of which we have taken a small write-back of INR47 crores, but we are still holding buffers to be ready and resilient for any stress which may emerge in the environment because of the geopolitical risks.

INR100 crore increase in management overlay — is it on account of the ECL refresh or incremental provisions through P&L?

Whatever provisions we are making, it is not because of the asset quality at all. You can see our Stage 2, Stage 3 is going down. So there is no additional provision for that asset quality. However, because the ECL model is still under refresh and the geopolitical environment is also uncertain. So whatever provision ECL model is giving, we have kept INR100 crores additional this quarter for the future. Yes, every provision is from the P&L. The profit will be higher by INR100 crores.

PIDF and GST one-offs — which P&L line items?

The PIDF actually was reduced from the expenses because it was a provision that we were carrying along with the expenses. And since the expense didn't happen or the payment didn't happen, it has been reduced from the expenses. The GST has been is a part of the other income line.

Open market above 50% on both CIF and new sourcing. EMI pool — what % is PL on CC? On dividend — bottom line grown 13% yet we are giving dividend?

On the banca and open market, the strategy has been consistent that we would try and do 50-50 from both the channels. If possible, 55% from banca and 45% from open market. However, our tie-ups with digital partners like PhonePe, Flipkart, Tata Neu, IndiGo are working in a very good direction. On a consistent long-term basis, our strategy is to remain 50% to 55% banca and 45% to 50% open market. On installment lending, we have never given the breakup of PL on CC. There are three kinds: PL on CC, point-of-sale instalment, and outstanding-to-instalment conversion before payment due date. On dividend — shareholders and investors are very critical and important stakeholders and they need to be rewarded for their capital, belief and the trust. Our asset quality issues have abated, we don't have any capital adequacy issues. We are underleveraged actually. INR2.50 per share is a pretty decent dividend.

How is rent as a spending category looking?

Rent as a category used to be very large till 2 years back. We started levying a fees on it. For us, rental spends is a very low spending category as of now. So there is no impact on us of any kind. In fact, when guidelines had come in that the third-party websites or apps should do the KYC for the landlord and without that they should not allow the rental payment. By that time, our rental payments were already low. So all the growth that you see is actually despite rental de-growing to a large degree.

EMI has been pretty weak this quarter. Is EMI one of the offsets we should be looking for towards offsetting lower revolver in FY27/28?

During the festival season, a whole lot of instalment lending at the point of sale happens. In the month of September or October, a large quantity of spends gets converted into instalment. The average tenure is around 7.5 months, 8 months. So by the end of February, March the first slot of 6-month tenure cases come up for full completion. That is why you see a decline on the instalment asset, but this is typically a trend over years. Some amount of revolving, we would be able to offset with instalment lending, not fully. We'll have to see at other mechanisms. We were doing Apple offer last year. This year, for the last quarter, it was not there. So there was some amount of impact. But these are transient and can be taken care of within the next 3 to 6 months.

Salaried/self-employed breakup in new sourcing?

During the quarter, 70% was salaried. We were quite selective in our selection of the customer due to our asset quality or other portfolio management. So in the last quarter, it was shown that good customers are from the salaried one. That's why we onboarded them. It is not as that we are declining self-employed customer, but whatever good customers are coming, we are onboarding them.