Ladies and gentlemen, we have lost management line connection. Please stay connected while we reconnect them. Ladies and gentlemen, thank you for patiently waiting. Good day, and welcome to Cholamandalam Investment and Finance Company Limited Q2 FY 2024 conference call hosted by Kotak Securities. As a reminder, all participant lines will be in the listen-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 and then zero on your touchtone phone. I now hand over the conference over to Mr. Nischint from Kotak Securities. Thank you, and over to you, Mr. Nischint.
Good morning, and sorry for the technical glitch. Just continuing, you know, we just 2024 performance of Chola. We have with us Mr. Vellayan Subbiah, Chairman and Non-Executive Director, Ravindra Kundu, Executive Director, and Arul Selvan, President and CFO. I would now like to hand over to Mr. Vellayan for his opening comments.
Thanks so much, and sorry for the delay. The key financial results for the quarter, we'll just go through and a half. Disbursements for the quarter were at INR 21,502 crore, which is up 47%. And for the half, it's up by INR 41,557 crore. Yeah, it is at INR 41,557 crore, which is up 39%. Total AUM stood at INR 133,775 crore, which is up 46% year-on-year. And net income was at... For the quarter was at INR 2,367 crore, which is up 39% year-on-year, and for the half, it's up at INR 4,493 crore, which is up 35% year-on-year.
The PAT for the quarter was at INR 762 crore, which is up by 35%, and for the half year, it is INR 1,489 crore, which is up by 32% year-on-year. Just, the board of directors of CIFCL approved the unaudited financial results for the quarter and half year. Just some quick highlights. Both disbursements and AUM was robust in Q2 due to all-around growth in demand. We're seeing a pickup in replacement demand from end-user segments in the auto sector, and that supported the growth for Vehicle Finance. The loan against property business witnessed a healthy revival due to growth in demand from the SME segment, and Home Loans continued to register above-average growth due to revival in earnings of self-employed non-professionals.
The new segments of CSEL, SME, TSL, and SBPL also continued to register growth, though on a smaller base. In Q2, Chola launched a composite QIP issue of equity shares, INR 2,000 crore at a price of INR 1,180 per share, and compulsorily convertible debentures, which is INR 2,000 crore, at a face value of INR 1 lakh. Overall, aggregating to INR 4,000 crore. The funds from the investors were received in the first week of October 2023, and the allotment has been completed on 5th October 2023. Some quick performance highlights. The aggregate disbursements in Q2, we just talked about, which is basically INR 21,542 crore, as against INR 14,623 crore in the same quarter, which is a growth of 47%.
Disbursements were INR 11,731 crores in Q2, as against INR 8,502 crores in Q2 of FY 2023, which is a growth of 38%. Loan against property disbursed INR 3,192 crores in Q2 FY 2024, as against INR 2,246 crores in the comparable quarter last year, which is a growth of 42%. Home Loans, affordable Home Loan and affordable LAP disbursed INR 1,575 crores in Q2 FY 2024, as against INR 743 crores in Q2 FY 2023, which is a growth of 112%, and obviously, the percentages is abnormally high because of the smaller base. SME disbursed INR 1,945 crores, registering a 32% growth over INR 1,473 crores in Q2 FY 2023.
CSEL disbursed INR 2,853 crore as against INR 1,579, which is a growth of 81%. And SBPL disbursed INR 240 crore for the quarter. AUM stood at INR 133,775 crore, compared to INR 91,841, which is a growth of 46%. So the PBT growth in Q2 was at 35%, and for H1 was at 31%, and the PBT ROA was at 3.2% for the quarter, and for the half year was at 3.3%. ROE for the half was at 19.8%, as against 18.3% in the previous year.
The company continues to hold a strong liquidity position with INR 11,000 crore as cash balance at the end of September 2023, including INR 1,400 crore each invested in G-Sec and T-bills, which are shown under investments. So the total liquidity position of INR 13,569 crore, including undrawn sanction limit. The ALM is comfortable with no negative cumulative mismatches across any time bucket. Consolidated PBT was at INR 1,065 crore as against INR 762 crore, which is a growth of 40%. In terms of asset quality, stage three was reduced to 2.96% as of September 2023, from 3.06% as of June 2023. GNPA as per RBI norms reduced to 4.07%, as against 4.3% in June 2023.
NNPA, as per RBI norms, has dropped to 2.59%, in for September, as against 2.82% in June. NNPA is below the threshold of 6% prescribed by RBI as a threshold for PCA. Capital adequacy, as of 30th September 2023, was at 16.62%, as against the regulatory requirement of 15%. Tier one was at 14.66%, and tier two was at 1.96%. Post the capital raise, the capital adequacy is above 20% for 5th October 2023. So Nischint, we'll stop with that, and we'll be happy to turn it over to you for questions.
Sure. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Puneet from Macquarie. Please go ahead.
Hi. Hi, Vellayan. This is Suresh from Macquarie. So let's address the elephant in the room, which is the new business loans NPLs, Vellayan, because it's gone up from INR 28 crore last year last quarter last year last quarter from that level to INR 190 crore. I know there is a base effect here, but if I were to look at this number on a llagged AUM basis, it's 4% Vellayan. It's a stupendous increase. Are you not worried about this case increase in this segment?
Yeah, so two things, Suresh. Obviously, you know, just to give you a sense, there are two things happening here. One is the reporting format has changed, right? Because what used to get logged as CG and how we've logged, you know, that before. So Arul, why don't you explain here on this?
Yeah, see, the NPAs are increasing in the CC a little bit, but still they are very much well within the industry norms. We have always said in the earlier quarters, the NPAs, they are much lower, and they were even lower than our secured businesses. So that's where it will increase. But in the overall scheme of things, these NPAs are much lower, and we have already provided more than 70% for this, and the net NPA is always properly, you know, much lower. So we will continue to watch this portfolio and do this.
But Arul, December is 66% of QOQ, 4% on a last day even basis. Are you still telling it is in line with your expectations? So it really looks like going a little out of proportion.
No, it is within our expectations and within our, you know, plan number.
You feel these numbers will change or they will go up from current level?
It may not go up. We are doing a certain, you know, corrective actions with regard to different segments, as you know, Suresh. One is the partnerships, and then we have the traditional line. So, in the, in the traditional line, we are much, very much within control, and that is around 0.82%.
Suresh, the way we should look at it, right? We should kind of break it down into two lines, right?
The partnerships is well.
Yeah. The traditional line, we're at 0.82% in terms of Stage Three gross assets. In the partnerships, partnerships has gone up. Go ahead, Arul. Why don't you just give some details?
The proportion of the book is the traditional line is put 3/4 of the book, and the partnership is 1/4 of the book. On an INR 8,000 crore book, we have INR 6,600 crore in the traditional line, which is we are having a NPA of around 0.82%. And in the partnership, which is the INR 2,200 crore, we have a NPA of around 4.7%.
Yeah, 4.7%. Suresh, to your point on how we're going to react and how we're gonna manage this, obviously, we are concerned on the partnership side, right? And obviously, we will kind of be more cautious on the partnership side, which is what has run up. The partnership at 4.7% is the highest Stage Three that we have in the overall book. And therefore, we will be cautious on that and how we manage, including growth on that. But on our regular, which is like, Arul said, which is 3/4 of our book, on our regular, we're seeing a 0.8%. So even on a lagged AUM basis, on the regular, it's okay. But the partnership is what is of concern.
The partnership is protected by FLDG.
Correct. Partnership is currently protected by FLDG, but it's still of concern.
It is protected by FLDG only to the extent of 1%, right?
No.
FLDG has a different, you know.
FLDG will be at 5%, per the regulatory norms, but we will also have certain hold on them with regard to, you know, continuing or extending the service cost, et cetera.
Suresh, you are right, and that the partnership business is what we're being cautious about, and we will continue to be very cautious about that.
So the last question on early vintage delinquencies, you know, the recent report talks about the fact that, you know, the early vintage delinquencies, delinquencies within three months or six months of a loan, really shot up in certain small ticket loans. Are you seeing that kind of a trend? Because early vintage delinquencies is one of the leading indicators of stress forming in the portfolio. Have you seen that trend in any of your business loans within three or six months by default?
Suresh, the early default and non-starters are under control, and the delinquency in the fintech business is there from the beginning itself. Earlier, the FLDG accounting was different, therefore, that was not coming up. Therefore, that is not a concern for us. Early default and non-starters are enormous.
Thank you.
Thank you.
The next question is from the line of Avinash Singh from Emkay Global. Please go ahead.
Yeah, hi. Good morning. Thanks for the question. Two questions. First one, again, continuing on that, your FLDG arrangement with the partners. Technically, I mean, as I mean, as the quality develops, depending upon your, you know, the stage three or different stage development, you will provide the credit cost. And whatsoever the FLDG recovery that will come to your other end lines. Am I getting correct there? That's number one.
Yeah, you are right. You're right.
Yeah.
Yeah, go ahead.
Second one is, more if you can provide some color on the yield development, not with external factors, because of course, externally it all depends on what we have. But I mean, given your product mix, I mean, growth exhaust different channel at a specific scale, based on the product change that will happen over the next, you know, three, four quarters. I mean, of course, our housing technically will be slightly lower. Within vehicle also, I mean, the growth outlook would be different. How are you seeing sort of, you know, your yield movement due to product mix changes shaping up over the next three, four quarters?
If you see that the quarter two of the last year was 13.6% in terms of total income , and it has gone up to 14.3% now. So this income has not increased in the line of the increased cost, which is the reason there is a drop in the NIM from 7.6% to 7.4%. That is correct. But what is happening is that in the Vehicle Finance, we are having a marginal book yield significantly higher than the book yield of, say, 14.3%, maybe 15.3%. We are now acquiring the book. But the effect of the 15.3% comes with a lag, and that will start showing up after two-three quarters.
So we will, by the end of this quarter, we will start hitting the number what it, it used to be in the past in terms of the NIM, because the, you know, income has to go up to the extent of the cost that is going up. So coming to the product mix, the product mix is three types of product mix. Within the company, we have a product mix of, let's say, Vehicle Finance and another product. So there are two types of products which we are doing it. One is fixed rate and the, you know, floating rates. All the floating rates book, which is pertaining to loan against property or housing loan or SME, has been already been increased to the extent of what is required to be done.
Now, within the Vehicle Finance, product mix is depending on the used and new, and now our used business has gone up to, say, 33% as against the 25% of the mix which used to do it in the past. So that is going to increase the overall yield of the book of Vehicle Finance, which is at the end will increase the total income book of company, and it will take another two quarters.
Okay. Thank you.
Thank you very much. Ladies and gentlemen, in order to, the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we will request you to rejoin the queue, and be brief in your questions. The next question is from the line of Ashwani Kumar Agarwalla from Edelweiss Mutual Fund. Please go ahead.
Good morning, sir. Just two questions here. How do you see the growth in the Vehicle Finance industry, especially as tractors HCV and LCV, because we have seen very good traction in the last three, four years. Don't you think we are at the peak of the cycle for all these segments? Even your disbursement has gone down, has slowed down.
So in tractor, if you see that in Q1 was like, you know, - 2% growth, and then Q2 has come with - 6% growth. So as of now, in tractor, in half yearly, we are - 4% growth. So and in the month of October also, we have seen that tractor is actually declined by 4% further. So now we are hoping that number onwards, only thing will improve. So whatever it improve, it cannot go, you know, beyond, say, 3%-4% of the growth in the current year, or maybe it will be a flat growth.
So what about HCV, LCV?
So heavy commercial vehicle now, and half yearly, it has reached to be 10% growth. Light commercial vehicle has reached to 3% growth. We are projecting the current one in the month of October, HCV has done very well. It has gone up 14%+, and light commercial vehicle also has gone up. So considering HCV and LCV and small commercial vehicle is still degrowing, in the month of October, it is a flat growth. So at industry level, for the entire commercial vehicle, as on 30th September, it has been 1%+ over the last year, three times. So we are hoping that the industry will be having single-digit growth, maybe a higher growth, up to 7%-8% max, or maybe 5%-7%, 8%.
So now just one question related to this only. Out of the total AUM, more than 60% is in the Vehicle Finance, which there is, is an issue. So we have talked about AUM growth of roughly 26%-27%, more than 20%. So how is that possible with the growth slowdown in the main segment?
On a Vehicle Finance, if you see that the commercial vehicle grew by 1%, we grew by 6%. Our total disbursement has grown in commercial vehicle by 15%. So little bit market share growth of 5% plus market growth. Plus the AT plus the growth is giving us 15% growth in new segment. The major growth is coming from new vehicle. As I mentioned that we are growing, our disbursement mix has gone up to 34%. And there are other products like two-wheeler, three-wheeler, and car categories. So together, we have grown 35% with the help of those products.
Okay. Thanks a lot.
Thank you. The next question is from the line of Abhijit Agarwal from Motilal Oswal. Please go ahead.
Yeah, good morning, sir, and congratulations on a good quarter. Sir, I think just briefly catching up on this, several businesses in the CSEL segment, you've already explained that last part of it is coming from partnerships. So coming to your commentary, you also said that some corrective actions. So just wanted to understand, have you made any changes in our approach or strategy in the CSEL segment?
Abhijit, the large part of the business of CSEL is actually coming from the traditional, which is 78%, and 22% is only the partnership. Partnership, as we mentioned, even in the last quarter call also, that we are not adding any new partner. We are continuing to do it, and we are also helping the partners to correct their filters so that the NPL can come down further, although it is being corrected significantly.
Abhijit, were you saying a large part of the issue is coming from, from partnerships, or the large part, large part of the portfolio is coming from partnerships?
Large part of the coming from partnerships.
You're right. Okay. So you're right. Okay. So now, sorry. Now, yeah. So what is your question around that?
Sir, I mean, you were saying that you're already taking corrective actions in this CSEL segment. So I wanted to understand, I mean, how are you changing that approach to CSEL segment?
So there are two things like Ravi said. We kind of... We're slowing down that segment, that's a partnership segment, significantly. And we're also going to constantly evaluate which partners we continue to have in our portfolio. And, you know, basically, obviously, if we're not seeing good performance on the loans, whether we should continue in those partnerships. So those are the two things, slowing down and reducing the number over time.
Got it, sir. And my last question is, and maybe first question, questions to Dussehra. So how has the festival Dussehra demand been? And the second one is for Sunil, sir. So how are we thinking about the provisioning cover on Stage Three loans online?
Dussehra, last month we celebrated, it has been good for the commercial vehicle, passenger vehicle, three-wheeler and construction equipment. Two-wheeler and tractor were, actually not, done there. Tractor and two-wheeler are likely to improve from, November month. And, you know, for the second half, we are expecting better growth in commercial vehicle. As you've seen that there is only 1% growth in first half. As against that, the second half will be, you know, double-digit growth, which will help commercial vehicle to reach, you know, between 5%-8%, as I mentioned. Passenger vehicle is growing at the rate of 7%, and the growth in the October month is also good, which is, which is going to support, you know, the passenger vehicle growth to double digits.
So, that is the growth, and as I mentioned that, when you gain a little bit more market share in the case of commercial vehicle and passenger, passenger vehicle, what we have achieved now, like, for example, now we are up by, you know, 30 basis points in terms of market share in commercial vehicle and passenger vehicle. Disbursement growth is coming to 20%. And, the additional growth which is coming up, to take the overall growth to 35% is being led by the two-wheeler used vehicle and, you know, three-wheeler and construction equipment. And so what is your second question?
Provision coverage.
Yeah. Provision coverage, as you would have seen, Abhijit, has been improving, and we are now at around 47%. My view is to hover between 45%-50% as we move forward in the next few quarters. It will depend on the PD LGD and the product mix.
Got it. That's all from my side.
Okay.
Thank you very much, and all the very best to you and your team.
Thank you.
Thank you. Thank you. The next question is from the line of Prashanth Sridhar from SBI Mutual Funds. Please go ahead.
Hi, sir. Thanks for taking my question. So the yield in these new businesses seems to have gone up significantly from 20% to around 27%. One, if you can explain this, and now that you've been conservative, should we expect this to go down?
So, see, so what we are saying is that in the case of the partnership, which is 1.5% of the total portfolio, we are actually evaluating the partner, where the, you know, NPAs are higher. So in spite of we are basically protected, we, we are guiding it to ensure that the filters are high. So not that 1.5% disbursement will go down and impact the overall yield. That is what is the-
No, but I think his point is that the yield is going up.
Yes, sir.
He's saying the yield is going up in those businesses. How much does the yield move up?
No, no. No, no.
So, are you concerned that the overall yield will come down if we, we slow down the partnership business, or you're saying that the yield in the partnership business has gone up?
No. So I'm saying that the total yield of other businesses seems to be increasing, and now that you plan to be conservative, where should we sort of expect the average yield in this business to stand?
So again, right, I mean, I think, you know, you're over indexing on the fact that, like we're saying, our total partnership portfolio is at INR 2,000 crore. Okay? That's INR 2,000 crore on an AUM of INR 133,000 crore, which is about 1 point, right? So definitely kind of us slowing down in that business is not going to affect overall yields or swing overall yields at all. Right. So if that's your question, then that is the response.
So, the yield on the other business, we would expect it around 24%-26% on average. Is that fair?
No. Where, where are you getting your yield data from? Because we've not shown any yield.
The income at the company level is around 14.3%, and this has increased from 14.2% in the previous quarter, that's Q1. And that will go up only because it will go up, only because of the mix changing.
Okay, sure. So maybe, if you can just help us. So in the other businesses, how would the yield have moved in the last two or three quarters?
Other, the other businesses, we have not yet started, you know, disclosing the yield and the line items. As we said, we will-
Actually, we can tell you.
Actually, the page number, if you go to loan against property page number, yield is given 11.7%-12.7%. So there is a increase in 100 basis points.
You're asking for new businesses, or what are you asking?
Right. Right, new businesses.
So the new businesses is a mix of two different, you know, one certain high-yield businesses like CSEL and SBPL high yield but low volume. SME are, you know, high volume but low yield. So it's a mix, and it will all come to the similar levels of around 14%, if you have consideration. We will start disclosing this from next financial year. I, I think independently, each business is, they are not disclosing.
Sure.
Yeah. Go ahead. Go ahead. Okay, go ahead.
So the way we arrived at it is, so you've given the gross income on vehicle, LAP, and Home Loan, and we have the total. The balance as others, and then taking it as a-
This is the same mistake even last time, you know, somebody did with regard to the provision.
Credit cost, yeah.
There is also a treasury income there. So don't assume that all of the rest of the income is only from the new business.
Sure.
So, treasury, we have a transfer price model. Anything beyond the transfer price is considered as treasury income. So, I think, can we wait for us to disclose-
Got it, yeah.
the details before giving, you know, trying to get this arrival?
Sure. No, fair enough. And, out of the 13, eight are touching a CSEL , how is the entry on the remaining business? Anything over there for us to worry about?
Actually, SBPL volume is so small, it's around 0.2% or something. It is 1% and SBPL is 0.2%.
Sure. Thank you so much, sir.
Thank you. The next question is from the line of Abhinav Anchal from SBI Life. Please go ahead.
Good morning, sir. I have two questions. One, on when we are showing the segmental information, we are seeing a decline of 20-25 basis points in cost of funds across the three lines, but the company level, the cost of funds are flat. So can you help us understand what is happening when we are showing the segmental cost of funds?
Yeah.
The second part is,
Sorry, go ahead. Go ahead, please go ahead.
Yeah. And the second part is that we are seeing very strong traction on the used vehicle side, almost 10% sequential growth in disbursement. So can you give us some color on the used vehicles, tell me that which class of vehicles we are financing, what is the percentage of vehicles we are financing, and what is the outlook here for, let's say, the next couple of years?
First point, I will answer and I will request Ravi to give you on the second point. First point is the pricing to the individual businesses goes based on the transfer price, which is declared at the beginning of the month. So the transfer price, we will be giving based on what is our treasury's assumption in the market. So that will be transfer price, and between this and what is the daily interest, there will be some differences which goes into the treasury change, as well as other investment. So whenever we have surplus funds, because we are holding the cash for LCR purpose, et cetera, those things are investment income that that comes into the treasury pool. So these are the ones which get into treasury income.
So that transfer price from that is the cost of funds in what you're seeing in the segmental is based on that, transfer pricing. So that will be different. So overall, cost of funds in the reported for the company is actually different, incurred by the company. I'll request Ravi now to answer the used vehicles point.
So used vehicle, we mentioned in the past that we will be focusing on that, and this year is a market of the used vehicle. Last year, new vehicle purchase was venture, and then now people are selling their vehicle, and this is a replacement demand which wakes up, and that will help the industry to basically see new vehicle also getting sold. So the used vehicle is coming from HCV, LCV predominantly, then followed by passenger car and then used tractor and used construction equipment . All put together, it is 34% of the total disbursement, close to INR 3,400 crore. And these businesses are going to go up only, and growth momentum is very good, and it is going to be changing in this side.
We have always clarified that we have been doing business of used only for the vehicle, which are less than 10. So major, major vehicle which are coming to us for buy and sell or refinance are five-10 years old vehicle.
Okay. Thank you, sir.
So, Abhinav, are you done with your questions?
Yeah, I'm done. Thank you.
Okay. Thank you. The next question is from the line of Shweta Daptardar from Elara Capital. Please go ahead.
Thank you, sir. Congratulations on this day. I just have one question. So this quarter, we saw credit cost around 1.6%, and during the fact that in addition to increase from the new business segment, you also mentioned the links which are there. What is the normalized credit cost for the overall business going forward? Thank you.
So we had already, you know, indicated that, in, in their calls, that our over a cycle, we will be in the range of around 1%. So maybe, we, we could, we may land up slightly higher at around 1.1% or 1.2%. We, we expect in Q3, Q4, good traction on the Vehicle Finance, and, other portfolios to reduce this, percentage. And sales should be in the range of around 1%-1.2% this year.
Okay. Just one question I just want to confirm. Did you mention TV volume growth to be 8% for the full year at this point?
What volume growth? We couldn't hear you. What is the question?
TV volume growth. What was that 8% growth in TV for earlier, for 2024?
That is, in our previous mention, that industry likely to grow in single digits, because as of now, growth is 1%. So it will improve over the period of second half, and it will go between 5%-8% is our expectation.
So that's the volume growth, right, for the full year? The industry volume growth. Okay. Okay. Thank you.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, p lease limit your question to one question per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question is from the line of Saptarshee Chatterjee from Groww Mutual Fund. Please go ahead.
Good morning, sir. Thanks for the opportunity and congratulations. So if you can give some ballpark indication, what will be the ROA for the new businesses? And if someone, like, if we assume that the, like, ROA, as you have said earlier, that the ROA for the new business are higher than the company level ROA, then if I see pre-COVID also, pre-COVID, we are making around between 3.1%, 3.5%, 3.6% ROA. Now also, even after—Sorry. Go ahead. Go ahead. Yes. Yes. So now if we see after, like, new businesses are now around 11% of our AUM, still lower, but we have achieved some bit of diversification, but our ROA has not, improved much. And going forward, like, one can expect only credit costs to move up from here as your book matures.
I wanted to know your perspective, like, whether the structural ROA improves as we grow our new businesses, or it will be remaining in the similar line?
So, the comparison between COVID period and now, there are two important elements. The cost of funds was very low, and we have also passed on some benefits on the yield, especially with regard to Vehicle Finance book. We spoke about it, because where we cannot correct the yield on the fixed rate book. So this section will happen, so that is going to be NIM creative and therefore, ROA creative. Our expectations are we have sort of bottomed out on the, or peaked on the cost of funds. So here onwards, there should be reduction in cost of funds, so that should also be NIM creative. I'm not wanting you to build too much expectation on that. This could be in the range of around, you know, 5-10 basis points from each of them contributing. Credit costs will come lower.
If you again go back to pre-COVID, you will always see Q1 and Q2 are the quarters, especially in Vehicle Finance, where you will see higher credit costs, because these are, you know, months where activity levels are much lower, and especially for vehicle operators. And they tend to have better earnings in Q3 and Q4, where we will have better traction in collecting overdues as well as regular EMIs. So, that's where I am meaning by when I spoke on the earlier question also, which is from current 1.3%, it will come down to 1.2% or 1.1% is the overall credit cost we are expecting. So we are confident of keeping the ROA around 3%-3.5%, which is what we have...
We always, you know, say that we are endeavoring to reach it, and we are confident that this year also will reach the 3.5%.