MUFG INR396.18bn / 20% stake closed April 8.

On segment-wise AUM growth — except CV and farm equipment, most segments are witnessing capital growth in Q4. How should one read this trend? And any updates on entering high-ticket size loans, new vehicle loans?

The numbers have grown right from 10% to 20% in various category especially this increase in sales have happened post reform or post GST reforms or GST rate cuts. The last quarter, especially Jan to March, you saw good progress in the new vehicle sales, and there is also equally demand in used vehicle. This year, we expect the overall growth to be muted. I don't see a big growth in this financial year. But since the demand for used vehicle is likely to remain strong, I think we will have a steady growth. On the farm side, the tractor side, this year, since the monsoons are likely to be delayed and monsoons are likely to be weaker, we expect the demand to come down a little. There is a growth in our new vehicle financing, especially the customers who were otherwise going out to the competition, we are able to retain and finance them.

When we are saying FY '27 growth to remain muted, should we assume that it will be lower than FY '26 growth as well?

We have ended the last financial year with around 12% to 15% growth in most of the segment. If you are able to have the same number of sales this year, flat growth, that in itself will be an achievement. I'm not talking about companies growth muted. I'm talking about sales number is muted, but we will be growing at 18%. We have projected and budgeted 18%, and we'll grow at 18%.

On the opex front, we have seen sharp decline even on Y-o-Y basis. What explains that?

There was some decrease in the operating cost, and it was also aided by a strong NII in the current quarter. We should be in the long-term range, it should be around between 26% to 27%. December number, as you are aware at INR196 crores of additional cost was incurred for providing into the new labour code requirement. That is not there in the current quarter. We were not very aggressive in the increasing the headcount. From 79,000 odd employees, we are at 76,000 employees. We want to increase it closer to 80,000 in the next couple of quarters. The current quarter, we spent less on our branding expenses. There was one change in the accounting estimate wherein the expenses related to the two-wheeler DSA payout. We have decided to defer it over the tenor of the contract. Hence, there has been a dip of around INR50 crores on that account.

On GS2 plus GS3 print — sequential uptick visible across CV, PV and MSME. Have you seen some deterioration?

We are into retail segment. There will be some fluctuations in the cash flow of the retail customers. So we can't construe that it is an ongoing. There are some segments of MSME had some impact. But I think it is now reasonably well controlled. We also have reduced our MSME growth just to keep a watch on this segment. And most of our MSME loans are against the mortgage of property. So we have nothing to really worry about it.

GS3 moves up 3 bps in Q4 — usually unlikely. Was there anything specific?

We are not seeing any kind of what we call challenging situation. Things are quite normal. And since we are lending to all the retail customers. Cash flow mismatches will be there.

Is 18% growth on AUM or disbursement? What is opex/cost-to-asset guidance? How do we look at credit cost given headwinds? Any Japanese directors in executive team beyond Board?

The 18% is on AUM growth opex cost will be on same level at around 26%, 27%. The credit cost as of now, we don't see a big challenge there. But we will be revisiting the number after the first quarter result. It will be mostly dependent on how the higher fuel price as and when it is declared is going to have an impact on the inflation. As of now, we feel there is no change in our estimation on the credit cost. The new directors have joined the Board and there is no change in the way management is functioning. The Board also has recommended Mr. Parag Sharma to continue for approved continuation for next 5 years. Right now directors have come in the Board. We have some people coming in the executive role, but not in the senior management role.

When fuel price increase leads to inflation feeding into transporter impact, does it first impact asset quality or first growth?

When these things happen, the transporters pass on the cost to the customer. They don't absorb the cost. Net earnings of the customers do not get impacted at all. The impact will be when the economy is closed down. When there are not enough activity in the economy, when the vehicles are not fully engaged, then the impact comes. So if the economy revives or keep growing at the same rate, even when the prices go up, the transportation prices, nothing happens to the credit cost or to the transporters business.

55 days into West Asia war — have you seen supply chain disruptions on the ground where truckers are not getting adequate loads?

As of now, we don't really see that, because there are delays in getting raw materials. This is a challenge of supply, but as far as the transportation slowing down, our customers not getting enough growth, there are no indication as of now.

How were incremental cost of funds trending in March compared to Jan/Feb and today in April? Cost of borrowings if we remove credit rating upgrade benefit?

Capital market, we have not borrowed in the last quarter. We did around 7.5 was the last bond issuance we did in the December quarter. If we had to borrow in March quarter, I think we would have borrowed at close to around 770, 775 level. So that could have been around 25 basis point increase in the bond rate. But this is at the AA+ rating level, and we have now been upgraded. So, we have to test the waters with AAA rating. We are, as of now, not in a hurry because of the excess liquidity and maybe looking at borrowing only after maybe four or five months. We have reduced our deposit rates. Overall, I think we should look at lower cost of borrowing in the coming year.

Strong growth seen sequentially in CV portfolio — new CV financing or used? Did we increase market share in used CV?

The new financing has actually gone up. It has improved significantly because sales also has improved. Nearly 20% growth is there in the CV sales. Our new vehicle financing has gone up significantly. Meanwhile, our used also is growing, because we are able to create more penetration in the deeper pockets. Used Vehicle. We are the largest player in the second-hand vehicle. More the penetration, we are able to grow our business.

Across product segments, how are we projecting 18% growth — CV/PV/MSME/tractors?

In CV, it will be around 15% to 18% overall growth. And on the passenger vehicle, it will be more than 20%. Gold definitely is in the our basis is small, the growth will be more than 30%. MSME as I have put 13% to 15%, but we may change the gear in the MSME as the situation normalizes. 18% is broad for full year. So, this particular quarter, the growth may not be 18%, it will be a little lesser because we are very watchful.

Margins — with cost of funds benefit and equity infusion, shouldn't it actually contribute to NIM expansion?

It will be definitely, yes. The NIM will definitely expand. But for the budget sake, we have put it a conservative budget. As we told in the beginning itself, some benefit will be passed on to the customer and some benefit will accrue to the bottom line.

On GS2+GS3 — given below average monsoon plus geopolitical conflict, should we see increase and credit cost risk to earlier guidance?

It depends upon how long the situation continues. The cost of the manufacturing will go up. Cost of the products will go up; the cost of the food prices will go up. If the economy is still growing, when the prices go up and if it's if they're able to pass on to the customer, then it will be a normal situation. It will not lead to any credit cost increase. But if the economy is closed down, then only we have a challenge. It all depends upon how the economy will shape after two months when the monsoon arise if the monsoon is reasonably decent, all these things will be normal for us. But monsoon plays prompt, and then you have a challenge. This also will be reflected mostly after November, December, not immediately.