Ladies and gentlemen, good day, and welcome to Arman Financial Services Limited Q2 FY24 earnings conference call, hosted by JM Financial. As a reminder, all the 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, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Mistry. Thank you, and over to you, sir.
Thank you, Sagar. Good evening, everyone, and welcome to the Q2 FY 2024 earnings conference call of Arman Financial Services. First of all, I would like to thank the management team of Arman Financial Services for giving us the opportunity to host this call. From the management team, we have Mr. Aalok Patel, Joint Managing Director, and Mr. Vivek Modi, Group CFO. I would now like to hand over the call to Mr. Patel for his opening remarks, post which we will, we can open the floor for Q&A. Thank you, and over to you, sir.
Thank you, Mayank. Hopefully, I'm audible to everybody. On behalf of Arman Financial Services Limited, I warmly welcome all of you to our Q2 and H1 FY 2024 earnings conference call. With me today, we have Mr. Jayendra Patel as well, Vice Chairman and Managing Director, and Mr. Vivek Modi, Group Chief Financial Officer, and of course, our investor relations team. I hope you have reviewed the Q2 and H1 2024 results, press release, and presentation available on the stock exchanges and our website. This year marks the start of Arman's fourth decade in operations. I'm proud to share that for the majority of the last 30 years, we've been at the forefront of serving the underserved regions, promoting livelihood and providing small or microcredit to economically backward individuals who lack access to formal banking and financial services.
Turning to Q2 and H1 2024 results, despite a lot of global geopolitical tensions, the Indian economy has shown remarkable resilience. This highlights the strength and potential of our economy, resulting in positive growth indicators. The Reserve Bank of India's recent guidelines have created a favorable environment for the microfinance industry, offering regulatory support and a conducive atmosphere for microfinance business. This has opened up new opportunities, leading to significant growth and business prospects in the microfinance segment. During the period under review, our company's assets under management, or AUM, stood at INR 2,304 crore, registering a year-on-year growth of 60.5%. It took us three decades to achieve an AUM of INR 1,000 crore, but we doubled our portfolio to INR 2,000 crore in just about 24 months. This is, of course, the power of compounding.
Standalone AUM increased by 46% to INR 359 crore this quarter, compared to INR 246 crore in the same quarter the previous year. Our microfinance subsidiary, Namra Finance, registered a 63.4% AUM growth, reaching INR 1,945 crore this quarter. Our emphasis on sourcing, underwriting, and technology led to strong growth in our MFI and MSME lending business. Consolidated disbursements for H1 FY 2024 stood at INR 1,075 crore, registering a growth of 63.5% year-on-year. Our standalone disbursements stood at INR 165 crore, with MSME disbursements amounting to INR 134 crore. The MFI segment disbursed INR 909 crore compared to INR 540 crore the same period last year. This strong growth can be attributed to favorable credit cycle, positive regulatory policies, and our geographical expansions.
Furthermore, our expansion into new contiguous territories has generated substantial traction in the regions where we operate. The company is currently operational in 10 states with a branch network of 385 branches. We've expanded our footprint further by adding 42 branches in the last one quarter. We hope to get significant traction from these new branches by Q4 of this fiscal. Last year, we ventured into untapped geographies of Bihar and Haryana. Building upon this, in the first half of this year, we have expanded our presence to Jharkhand and Telangana as well, where at present we have operationalized nine and six branches, respectively. In addition to this, we have inaugurated a zonal division with a new zonal office in Lucknow, UP. While staying committed to our core strategy, we expanded into new states as an essential and strategic growth lever for the future.
Regarding our asset quality, we continue to see an improvement. Our gross non-performing assets, or GNPA, have decreased to 2.48%, a drop of ninety-nine basis points compared to the same period last year. At the same time, our net non-performing assets, or NNPA, are at just 0.23%. Now, coming to collection efficiency for the month of September 2023 in our microfinance business stood at about ninety-eight point three percent.... MSME was 98.6%, and two-wheelers stood at 96.3%. In addition, our overall collection efficiency in H1 stood at 98.2%, demonstrating stringent underwriting, risk management, and collection processes. Our digital solutions have automated most of our business processes and have been immensely useful in enhancing customer experiences and also driving efficiencies.
As of thirtieth September 2023, our total borrowings amounted to INR 2,245 crore, comprising a diverse mix of financial products. Excuse me, a diverse mix of financial instruments. We maintain substantial liquidity of INR 269 crore in cash and bank balances, liquid investments, and undrawn CC limits, with a debt-to-equity ratio of 3.4x and a healthy capital adequacy ratio of 35.15% on a standalone basis. For the quarter, cumulative provisions stood at INR 77.1 crore, which is 4.01% of our on-book portfolio outstanding, or POS. Of this, provisions for Arman stood at INR 15.9 crore, and for Namra stood at INR 61.2 crore. Now, let me run through the key consolidated financial numbers for the quarter and the half year ended thirtieth September 2023.
Q2 FY 2024, so for, this is for the quarter, the gross total income stood at INR 160.3 crore, registering a 73% year-on-year growth. Net total income amounted to INR 93 crore, representing a substantial 64% year-on-year growth. Pre-provision, pre-provision operating profit, or PPOP, witnessed a robust increase of 90% over the same period, which stood at INR 69.3 crore. Profit after taxes stood at INR 40.8 crore, reflecting a significant year-on-year growth of 105%. Yields for the quarter stood at about 26%. Net interest margin stood at about 14%. Cost to income for the quarter stood at about 25%. Return on average AUM stood at about 7.3%, and return on equity stood at 34%. For,...
Now, turning from the quarter to the first six months or half year, the gross total income stood at INR 309 crore, registering a growth of 81% year-on-year. Net total income amounted to INR 179 crore, representing a substantial 67% year-on-year growth. Pre-Provision Operating Profit, or PPOP, witnessed a robust increase of 94% over the same period, which stood at INR 132.6 crore. Profit after taxes stood at INR 80.8 crore, reflecting a significant year-on-year growth of 127%. In summary, we are right in, on the right track to achieve our long-term goals. We believe our prudent lending practices, unwavering commitment to the customer experience, and our dedication to the digital innovation will help us achieve sustained growth in the coming years.
With this, I would like to request the operator to open the floor for any questions, and thank you so much for your attention.
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 touchtone phone. 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. To join the question queue, please press stars and one. The first question is from the line of Amit Mantri from 2Point2 Capital. Please go ahead.
Hello?
Yes. Hi, Amit.
Yeah, hi, Aalok. Congratulations on great performance this quarter. So lot of branch expansion has happened in this quarter. So can you talk about, you know, how you're seeing the demand environment? Because I think the branches have been opened across the board. It's not like only in few states you've opened. You also opened in the older states, Gujarat, UP, where you have a large presence, but also in new areas as well. So how is the demand environment overall?
... Yeah, so it's, it's, so Bihar has been doing, really well in terms of demand. A lot of the branches with, not a lot, some of the branches, I would say half of the branches that you see in the older states are, a lot of them are, are split branches. So what we mean by split branches is, once the portfolio of a branch reaches, you know, INR 7 crore, INR 8 crore, INR 9 crore, or it reaches a certain threshold where it crosses our risk, we'll typically split the branch into a new branch, and that has numerous benefits for us, overall.
Demand is, you know, in the, at least in the last couple of months, it's been somewhat stable, so that, so it's not bad per se, but, you know, slightly lower than expected, if I can put it that way.
Mm-hmm. Mm-hmm. Okay, and in terms of asset quality, are you seeing any deterioration in early indicators in specific geographies?
You know, again, it's too early to tell at this point. Yes, there has been some pressure, especially there's been a lot of coverage on the small ticket side, retail loans. You know, there is a few basis points of collection efficiency drop, which we'll be able to see in the numbers for us as well. You know, but it's too early to tell whether this is just random fluctuation or whether this is an early indication or anything like that.
Okay. But even, you know, even if, even if this, a few basis points drop that has happened, that's well within the model of, what is required for the business to absorb, right?
Yeah, yeah, of course. I mean, you know, our long-term expectation is about a 3%, so we are nowhere close to that.
Mm-hmm.
So in a sense, it would make sense if it's slightly increased in the next couple of quarters or so.
No-
I mean, you know, the fingers are crossed that it doesn't, but I really wouldn't be surprised. And I'm not just saying this today, I've always said it, that microfinance is no longer, you know, the 1% or 2% kind of loan loss business. So, let's see how things progress.
Okay. And final question, so now most of the rate increases that have happened post the RBI new regulations, that has been pretty much passed through the entire book, right? So now, I think majority of 90% of the book would probably be at the higher rates post-March 2022.
Yeah, I would Vivek, I mean, 85 or 90, I mean, it is slightly anybody's guess kind of a thing. But yes, largely, majority it would have been the post... Yeah, so it's been about a year and a half. So whatever residual portfolio we'll be having will be probably 10% to 15%, not more. Exact numbers we can look up, but-
Sure.
Yeah.
Oh, okay. Thank you very much.
Sure.
Thank you. I would like to remind participants that if you wish to join the question queue, please press star and one at this time. The next question is from the line of Ayush Agarwal from Mittal Analytics. Please go ahead.
Good afternoon, sir. I hope I'm audible?
Yes, please go ahead, Ayush.
Sir, I just have one question. Firstly, congratulations on a good set of numbers. Sir, I want to understand more about the MSME business, and what are our, you know, plans here to scale up, and what kind of approach do we have in the MSME business? Is it cluster-based or how are we targeting the new customers, since we don't have any, you know... Mostly it is in-house sourcing, all of it is in-house sourcing. So if you can talk a little about the strategy on the MSME side, that will be great.
Yeah. So the primary strategic purpose of MSME when we opened it in 2017 was that, you know, microfinance was basically there to increase household income. I mean, we were serving exclusively women, and the idea was that if you give them, you know, a cattle or money to buy a cattle or a tailor machine or whatever it may be, that they can supplement the household income. But what we found was in the rural area, of course, there were a lot of people who were engaged in these small kind of micro-enterprises, you know, the small or the kiranas or the dhaba walas or the tire shop owners or, you know, the marketplace kind of people sitting there.
And so the idea was that can we, instead of relying on JLG model, service these customers? You know, that was essentially what we were trying to do. And so the strategy was just that, is that to service the customers who are one step or two steps above the JLG bottom of the pyramid. And as you said correctly, it is all self-sourced. As far as the growth and everything is concerned, we are on track. It's just that, you know, it takes time to find that specific kind of customer, and the rejection rates are very high. In this business, they are 70% plus is what our rejection rate stands at right now. So you cannot expect a very, very quick growth that people are kind of used to seeing in microfinance.
You know, the ticket sizes are slightly larger. It's an individual unsecured loan. And so, you know, the growth is probably in line with microfinance, even with a smaller asset base. But, you know, the thought process is that as microfinance matures and the penetration continues to increase, over the long run, our expectation is that these individual-type micro products will start gaining more popularity and traction in comparison to the JLG-type model. And so we are sort of future-proofing in that way as well. Along with that, is of course, it's a fantastic product with good margins, high safety. We've been through, you know, a couple of, or at least one large credit cycle with it during COVID, where it has performed very well, all said and done.
And so our confidence has increased quite a bit, and we'll see how best we can scale it up in the coming quarters and years.
So that's a very detailed answer. But just one follow-up on that. What we also see in the northern and western region is that there are these dairy, you know, farmers who have more than 4, 5 cattle, let's say, and they want a larger ticket size loan. So do you also see a shift from the existing MFI loans, mostly from the dairy portfolio that we have, who have a larger, you know, farm shed and want to avail these loans? Do you see a trend there as well?
No, that is, So I think that's very astute, and, that's a lot of insight. In fact, that is our largest customer base, are the large cattle owners who, you know, are sick of borrowing from three or four JLGs and things like that, you know, and they want to just get individual loans. So, yes, absolutely, you are correct. That is also a large part of the market, that we are seeing in certain geographies, like the Milk Belt of Gujarat, such as Sabarkantha, Banaskantha, Aravalli, Godhra, Panchmahal, Dahod areas, those areas. Yes, absolutely.
Understood, sir. So that's it from my side, and good luck for the future and best of Diwali to you and the team.
Thank you. Thank you so much.
Thank you. Participants, at this time, if you would like to ask a question, please, please press star one on your touchtone phone. The next question is from the line of Prachi Sharma from ACE Capital. Please go ahead. Ms. Sharma, your line is unmuted. Please proceed with your questions.
Hello? Hello.
Yes, Prachi, go ahead. I can hear you.
Yeah. Hi, sir. I just have a couple of questions. I'll just shoot them all together, if that's okay.
That's fine, as long as I can remember them. Please, go ahead.
No problem. Okay. Can you just throw some light on the two-wheeler financing business? Like, I just need an outlook on the same. And similarly, I want to know if, like, since the yield as in is 26.2 and the NIM is 14 now, so what is the outlook on that?
So, specifically on the two-wheeler space, the two-wheeler market has been somewhat in the doldrums since 2019. If you look at the overall sales, you know, the two-wheeler sales in India, which were somewhere around 22 million in around 2019, if I remember correctly, now, I think last year it was closer to 12 million or something like that, or 13 million. So overall, the market has shrunk quite a bit. And, you know, the competition has also increased. And, you know, credit quality is somewhat poor, or at least people are competing on underwriting standards. I'm not exactly sure. And so, we are sitting, waiting and watching, right? So certainly, that has been, two-wheeler has been our bread and butter for quite a long time.
I mean, before we started microfinance from about, you know, 98 to about 2010, that was our primary business, for a long time. So we know what we are doing, and, there is a lot of competition right now in the field, and the sales are quite low. I think even in the festive season, the dealers were not very, very happy. So I don't know much about... I don't think we are gonna see much of a difference this year, but let's see if things improve there. Of course, electric vehicles are starting to penetrate, and, I do see that there might be an opportunity there in the coming years as far as, two-wheeler financing is concerned.
So I don't know if anybody wants to add something to that?
No, Hi, Prachi. All I can say that the electric vehicles, there are about three to four different reasons why the two-wheeler industry is in a shape that it is in. First of all, the price of the vehicle has drastically gone up, is number one. Number two, insurance. Now, the RTO is asking for two years insurance. Another reason is post-COVID, lots of schools and colleges were closed, and hence, it has affected the business because parents are not, or they were not buying the vehicles for their children. Number four probably is the electric vehicle is a brand new technology, and the technology is moving so fast that people are still waiting for the technology to stabilize. The issue is that today you can buy a vehicle...
I'll just give you an example. Today you can buy a vehicle which can give you 160 km on one charge. Tomorrow, six months down the road, you might have some vehicle which is giving you 250 km per charge. You know, so the technology, until the technology stabilizes, people are reluctant to buy. Another thing is a charging issue, that people are where to charge the vehicle. Is another thing that you might have seen in the day before yesterday's newspaper, that the government is thinking of removing the subsidy on the electric vehicles, especially the two-wheelers. So these are all the reasons why, and the manufacturers are also appointing dealers left and right, and hence, the competition for each dealer is without a volume.
It's increasing so much. So these, all these factors are contributing to a fact that the industry is slowing down. Let us see what happens, and we keep our fingers crossed. That's all. What was your second question?
I understood, sir. Thank you. Sir, the next question, should I repeat that question?
Yeah, I told you I'll, it's-
No problem. No problem. I just wanted, like, an outlook on, say, the yield today is 26.2, and the NIM is 14. So I just wanted some outlook on the same.
No, so, see, our yields are pretty stable right now, as I mentioned to the first question from Amit, that most of the portfolio now is as per the new yields, and we have not really increased the interest rates. I don't think there is a lot of scope to increase the rates any further. Probably more of a likelihood that it might decrease in the future. So I would say that the yields are probably stable or as high as that they're gonna get at this point. In terms of the NIMS, again, you know, we are—it's very good NIMS right now. I don't think anybody can argue that at this point.
We have the benefit of having high interests, you know, low operating cost and, I guess cost of borrowing is slightly higher, so should that decrease in the future, maybe we can squeeze out some more NIM. But the credit costs are also low. You have a situation where your OpEx low, your credit cost is low, and your interests are somewhat high, and so therefore, you are getting good NIMS. There's only one entire equation that we can reduce further is the cost of borrowing. The market rates are quite high at this point. But I don't think that it's probably gonna be stable or maybe marginally lower in the future.
This was helpful. I just have one last question.
Yeah.
This is pertaining to the individual business loan, so which at the moment, I think is around 2% of our AUM. I just wanted to know, say, an outlook on these loan products.
Yeah. So this is slightly different than MSME. A lot of the things which we do might be similar, but essentially, we are graduating the microfinance customers who have been with us for multiple cycles into individual cashless loan, right? Or, so what that means is that if a customer's been with us for, let's say, three cycles, and they don't want to do the group liability anymore, and they want an individual loan, and they have matured enough, we'll graduate them to sort of a higher ticket individual loan, under the condition that it has to be all has to be cashless. So we are planting seeds for the future. As I told earlier, you know, JLG, you know, we have good two, three years, four years left in JLG.
But we are thinking that what's next, you know? And I think the next trend is going to be individual loans. Second thing is going to be the collection, the doorstep collections will have to sort of reduce, you know, and for that, we'll have to move towards the cashless collection. So we are experimenting.
Okay, sir. Okay. That's all from my end. If any more questions, I'll just join with you back. Thank you. Thank you so much.
Thank you so much. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Parth Vasani from KK Advisors. Please go ahead.
Hello. Yeah, thank you very much for the opportunity. I just wanted to understand, is there any—I mean, are there any impact on ground or challenges that we are facing in, you know, collections due to upcoming elections in Madhya Pradesh and Rajasthan?
No, I mean, none that have reached my table or anything like that. In the Indian context, there's always going to be some election somewhere or some flood, or famine, or drought or, you know, something on our... There are operations are pretty wide, at this point, and we are quite used to dealing with elections. So I don't foresee any issues, and so far there have not been any issues that has come to my notice. But of course, it makes sense to be vigilant during the... especially when the, when you get to a point that's very close to the election. Especially about things like cash carrying and, disbursements, you know, is it going to the right places and things of that sort, so.
But we have procedures in place for that, and I don't foresee any problems there.
Okay, sir. Got it. Got it. Perfect. That was helpful. So, yeah, that's it for now. Thank you.
Yeah. Thanks.
Thank you so much. The next question is from the line of Mr. Mayank Mistry. Please go ahead, sir.
Hi, sir.
Yes.
So, sir, I wanted to ask on the asset quality. So basically, we can see on the slide number 32, our stage three has shown a little rise as compared to March 2023, right? And it has been. I think it has gone up marginally even this quarter, as against Q1. So, if you could just throw some light on where is this more concentrated from? Is it concentrated to some geographies where there are some delinquencies? And secondly, if you could throw some light on the collection, what are we doing towards collection?
What slide? Slide 32, you said?
Yes.
Okay. And you are saying, what has increased? The PAR or-
PAR 31-90, if you could see.
Yes.
Yeah, our PAR 31-90 has increased to 4.6% for two-wheelers, and other segments are also marginally up.
Correct.
So, yeah. So, any specific reasons or, I mean, is it due to seasonality or what is the factor that is driving this?
So, as I said, Kay, I think one other caller also was asking about disbursement and collection, and I think very openly, there has been some pressure. See, as far as two-wheeler is concerned, that is pretty much where the market right now, and underwriting standards have gone down quite a bit, and there is a lot of pressure there. So, yeah, I mean, definitely the two-wheeler has somewhat deteriorated. I mean, it had improved from last year to by March 2023, and now it seems to be going back again. As far as MSME and micro, and, you know, it seems like they're trending kind of very similarly. Overall, yes, there has been some pressure, and that pressure is across the board.
So I cannot say that it is only in certain geographies or something like that. You know, some places might be slightly more than others, so Bihar and UP are slightly lower, Maharashtra and MP are slightly higher, but nobody's really immune to it, right? So overall, I don't know the reasoning. So if you're going to ask me the reason, I don't know. We are looking into it, and, but there is no one good reason for it. When you are seeing it across the board like that, clearly it is more of macroeconomics than any one particular thing.
If I can add to that, largely Parth, it still kind of does not raise any very strong alarms for us, because generally we are expecting it, especially in the unsecured segment, the NCLs to be over a period of time, upwards of 2%. So, we did... Definitely fell down during COVID, and after March of the kind of COVID, 12 months. But it is well within our range of expectations, as we've been kind of-
Yeah
... regularly talking about.
But you can say it's still below it. I mean, it's still lesser than our overall expectations, which is good, you know. Another reason could be that just the penetration is increasing, right? So as the overall industry AUM increases, obviously, the indebtedness on a per client basis will also increase, and that could be putting some pressure, which you are seeing signs of. Again, we are looking into it, obviously keeping a close watch on it, but cannot pinpoint any good reason right now.
Sure, sir. And anyway, sir, this two-wheeler only accounts for 3% of the book so far. But, are there any shift you are seeing in the AUM going forward from between the segments?
No, I, I think they'll continue to remain, in the short term, probably remain, pretty stable in the mix. In the long run, probably the individual loans might have more weightage, maybe in three to five years about, you know, 1/3, 2/3 kind of a thing. But, in the short term, about we don't expect, the mix to change substantially.
Sure, sir. Thank you, sir.
Sure.
Thank you so much. Would like to remind participants that if you would like to ask a question, please press star and one now. The next question is from the line of Mr. Raj Shah from Tucker Ross LLC. Please go ahead.
Hello. You know, you in the first half, the second half of the year-
Mm-hmm.
I can't understand.
Bit muffle. Okay.
Yeah, I can't understand.
... Slightly stronger for, you know, the industry as a whole. Is there anything that, you know,
Sorry to interrupt. I can't understand what anything you are saying.
Mr. Shah, if you are using speaker mode, may I request you to use the handset to ask the question?
Better now?
Yes.
I don't know. Speak some more.
Hello, is it better now?
Yeah, little better. Please go ahead.
Yeah. So... It's similar for our company as well, in terms of AUM and disbursement growth.
This is really strange, but I missed most of your question since it was... Anyway, I think the phone reception is a problem. Can we move to the next caller, if any, or we can try again?
Mr. Shah, if you can repeat your question once again. Mr. Shah, your line is unmuted.
Hello, is it better?
Yeah. You're dropping in and out there. Operator, please, let us move to the next question, if any.
Sure, sir. A reminder to all the participants, if you wish to join the question queue, please press star and one now.
If no more questions, operator, I think we can conclude.
We have one question, sir. The next question is from the line of Mr. Raghav Garg from Ambit Capital. Please go ahead.
Okay.
Sir, thank you for the opportunity. I think you may have already answered this question, but apologies if I joined the call very late. I just wanted to ask, why the gross NPAs have increased in two-wheeler and the MSME segment?
Yeah. So I think that was the last question. But yeah, I don't have a good answer for that. It is across the... really across all geographies. Two-Wheeler is a small portion of the book at this point, but so let's maybe putting aside Two-Wheeler for a second, but MSME and microfinance have seen, you know, maybe a 20 bp kind of a jump in the 30-90 buckets, and a very marginal kind of flattish to marginal in the GNPA's overall. But I don't know. I mean, I think this is clearly something that all small ticket size retail loans seems to be facing at this point across the board. And
Sir, would your customers in these two segments were they existing MFI customers to you or to say another MFI?
So it depends. I mean, some of them, about 20% to 25%, 30%, depending on what months are you need to meet at the time of disbursement. Others have borrowed from other MFIs as well, in the MFI segment. In MSME also, there could be some level of overlap, because MSME is basically, you know, somewhere in between mainstream and micro. So, you're going to see overlap on both sides. They might have bank borrowings, and they might have, micro borrowings as well, especially the spouses, in case you are lending to a male. But, yeah, it's, I don't know if that answers your question.
Sir, so just, you know, specific to your own company, would you say that this increase in both of these segments or either of them has come from the same customers who probably have an MFI loan from you, or?
No. So-
Or-
There is no, there is no overlap in our own customers. What that, what that means is that... So are you talking about, like, cross-selling that?
Yes. So, you know,
Microfinance loan and MSME, both.
Or, the other way, that I wanted to understand is that, you know, if the NPAs in MSME are increasing today, were these customers at some point in time MFI customers to you? You know, because they wanted a-
No, no.
Okay.
No. So, I mean, these are some-
Customers.
We are just targeting a different subset only. So, in ideal, that might be the case, but in any case, we only do one loan per customer. So we don't try to really cross-sell. You know, unsecured cross-selling, I don't know, like, I mean, because that's... You can do it if you are doing, like, let's say, consumer durables and stuff, right? But otherwise, most customers want as much money as they can get. So after they go through our underwriting process, they get whatever they're assessed at. So it, unsecured loan make just doesn't make a lot of sense to, at least for me. A lot of people do it. I'm not going to say that they're right or wrong, but.
And, sir, any geographical color to this increase in stress? Is it coming from-
Across.
A specific states or a couple of, you know, states, or, how would... How are you looking at it?
No, it's across the board. Certain states are higher than others, like Maharashtra and TN are higher. Bihar and UP are lower. Rajasthan, Gujarat, and others are somewhat average, but it's across the board.
Understood. So thanks for answering the question, and that's all from my side.
Thank you.
Thank you so much. As there are no further questions, I would now like to hand the conference over to Mr. Mayank Mistry for closing comments.
Thank you all for joining the call today, and thank you to the management team of Arman Financial Services for giving us the opportunity to host the call.
Thank you.
Thank you so much.
Thank you so much.
Thank you so much.
Thank you. See you.
On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.