Ladies and gentlemen, good day and welcome to Aptus Value Housing Finance India Limited Q2 and FY 2026 earning conference call hosted by Dolat Capital. As a reminder, all participants' 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 this conference call, please signal an operator by pressing star, then zero on your touch-on phone. I now hand the conference over to Mona Khetan from Dolat Capital. Thank you, and over to you, ma'am.
Thank you, Danish. Good morning, everyone, and welcome to the earnings conference call of Aptus Value Housing Finance India Limited to discuss its Q2 and FY 2026 performance. We have with us the senior management from Aptus to share industry and business updates. I would now like to hand over to Mr. Anandan for his opening comments, which we can open the floor for Q&A. Over to you, sir.
Thank you, Mona. Good morning, ladies and gentlemen. I am Anandan, Executive Chairman of the company. I warmly welcome you all to the earnings call to discuss our performance for the quarter and half-year ended September 2025 Q2 FY 2026. Before we begin, I hope all of you had a wonderful Diwali, wishing you continued happiness and prosperity in the year ahead. Before I start the detailed presentation, just one small update. Mr. Balaji could not join the call today due to a sudden medical emergency in his family. He has conveyed his apologies and looks forward to interacting with you in the next few days. I am today joined by Mr. C T Manoharan, ED Chief Business Officer, Sanjay Mittal, our CFO and during the year, as you know, we broadened our shareholder base and further diversified institutional shareholding, enhancing the market liquidity and participation from long-term investors.
With a vision to reach INR 25,000 crore in the medium term, we aim to build on the current momentum and sustain a 25%+ growth driven by our expanding footprint and consistent execution. As we have consistently shared in our earlier interactions, our strategy continues to revolve around four key pillars. I am pleased to note that we have seen good progress across each initiative. The following are the key pillars that we have been sort of discussing in recent times. One, in terms of expansion beyond several markets, as you know, we are steadily expanding our presence in Maharashtra and Odisha, where our early experience has been encouraging. Both states witnessed healthy traction in disbursements and customer acquisition, supported by a contiguous branch expansion model. As of 31st October 2025, the total branch count in these two states stood at 15, including four new branches added during the month.
Second initiative is our digital enablement and process efficiency. Our new origination system, what we call crore, has gradually stabilized across the branches. It is already enabling stronger process control, improved data accuracy, and better monitoring. In parallel, we are witnessing noticeable process improvements across legal, credit, sales, collection, contributing to smoother execution and enhanced efficiency. The other key initiative that we are working is in diversified product and customer base. Our balanced growth across housing and small business loans continue to support portfolio stability and earning consistency. As you know, we've catered to a diverse base of self-employed customers across tier three and four towns, which helps sustain steady demand and credit quality across market cycles. The other major initiative of the focus on productivity and operational excellence, we remain focused on enhancing the productivity and operational efficiency.
Data-driven insights and systems-led improvements are enabling teams to deliver high output, improve service quality, and cost efficiency, strengthening the foundation for scalable growth. With that, I would now like to move on to the key operating and financial parameters. Business and growth, our disbursements in Q2 for the states grew 24% QoQ to INR 963 crore. Our disbursements in H1 over on a year-annual basis to grow about 8%. The disbursements growth of 0.3% YoY in Q2 2026 was largely influenced by our calibrated conscious increase in the minimum login ticket size of over INR 700,000 per proposal, along with apart from some temporary weather-related disruptions. The year-on-year growth, however, is at 22% YoY and 4% QoQ. Profitability and efficiency, we have the profitability efficiency. During the quarter, the total income grew by about 27% YoY to INR 534 crore.
The NIM rose 27% to INR 399 crore in Q2, a growth of 27%. Our OpEx as a percentage of year-on-year remained stable at 2.7% for the quarter. The OpEx, both as a percentage of assets and cost-to-income ratio on both the parameters, you know we are one of the best in the industry. Our credit cost, sorry, our operating profit growth came in at about 27% YoY to about INR 312 crore. The credit cost was increased to 50 basis points in H1, mainly due to a certain accounting policy change, but we have now decided to go for a 100% technical write-off of outstanding beyond 500 days. Earlier, we were following a practice of 100% write-off beyond two years. That two years has now been reduced to 500 days.
Profit has grown, as I mentioned a while ago, to about 24% to INR 277 crore, translating to an ROA and ROE of 7.9% and 20%, which I'm sure all of you must have noticed is one of the best in the industry. We are able to consistently improve our financial metrics quarter- on- quarter. The profit hence for FY 2026 rose 26% to about INR 446 crore. On the asset quality and asset quality side, our GNPA has gone up slightly by about 6 basis points to about 1.55%, and our net NPA is at 1.17%. We have strengthened our collection organization in this regard at the state level and also at the HO level, whereby a lot more closer follow-up of collections will be pursued with an intent to reduce the GNPA further down.
On the funding side, the cost of borrowing improved to about 8.42 from 8.62, about 20 basis points less on QoQ basis. In fact, our latest borrowing, which was done, was around about 7.9%. The borrowing mix comprises of about 56% from banks, 13% on a consolidated basis, and about 20% for the HFC alone is from NSB, about 18.7% MCD, and the balance is through securitization. As part of our ongoing focus on liability diversification, we have executed a direct assignment transaction of about INR 170 crore during the quarter and about INR 300 crore for the half-year. We maintain a strong liquidity of about INR 1,700 crore, including about INR 1,100 crore of underwrite bank sanctions. Now, with these remarks, I open the floor for Q&A session. Thank you.
Thank you, sir. Ladies and gentlemen, we'll now begin with a question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use headsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question comes from the line of Rajiv Mehta from YES SECURITIES . Please go ahead, sir.
Yeah, hi, good morning. Congrats on good collections performance, and thank you for taking my question. Sir, first is on disbursement and collections. Can you tell us how the disbursement and collections performed in September and October? Just wanted to check what is the latest monthly business run rate since we have been adding distribution, and also what is the latest collection trend, because in Q2, it seems that your early stage collections were better. Just wanted to understand what was the exit trend in September and how October is playing both in terms of disbursement and collection.
No, actually, as you must have noticed that in Q1, we actually Q2 has grown over Q1 by about 24%. This increased trend, this is despite the fact in this period, we have taken a call to not to log in any loan of assigned lower than INR 7 lakh with a specific purpose to keep in mind that we would want to maintain clear distance from a microfinance kind of business. Also, going forward, we would want to really keep moving our profile and quality of the customers better. We have taken a call not to really log in any, actually from 1st of July, we stopped taking in any proposals of less than INR 7 lakh. Despite this issue, we have seen a good growth in disbursements in the second quarter.
That we are able to see that in the month of October as well, which has given us the confidence to be able to maintain a reasonably good QoQ growth in the third quarter onwards. As far as the collections are concerned, as I briefly mentioned, that we have really strengthened our organization, not that we feel the collection, because we have really gone for the pick and choose steps, where up to 12 EMIs, which will be the responsibility of the branch team, branch manager, and the sales officer who generated the proposal, to be totally in charge of the first 12 months collection. After 12 months, it moves on to the collections team. Within the collection teams, up to 180 days, anything outstanding between 90 to 180 days, sorry, yeah, it moves into the collection team.
After 180 days, in addition to the collection team, there is an independent legal recovery team also we take over. For this, we have clearly identified the job responsibility at the branch level, at the cluster level, state level. We have strengthened our middle management staff at the state level very strongly. These series started seeing very positive impact on our collections improvement. That should really help us moving forward, that should help us really improve on collections, not only improve collections, but even reduce our NPA.
Okay. Sir, this below INR 7 lakh ticket size portfolio, which you stopped logging from July 1st, what is the current proportion of this portfolio in the current overall AUM? Have you seen worsening of asset quality trend in that particular segment and portfolio, and this is why you have stopped logging that in? Because overall asset quality is fine, seems to be fine, but you are saying that below INR 7 lakh portfolio is something that you will not focus on incrementally. Just wanted to understand what is the underlying asset quality trend in that particular portfolio and what is the proportion in the overall AUM?
Actually, I just want to highlight this decision has been taken not really based on the portfolio performance or in terms of lower collections or higher NPA. No. I know our NPA percentage or the collection efficiency is reasonably good in that. It is not really taken for so much on the consideration of higher or difficult collections or higher NPA, no. It is really taken with a very clear purpose of, with an objective of moving to a better quality, a better profile customers. Where, in fact, we have now started very actively, very closely in our PD, in our credit bureau data analysis, in the account aggregated data analysis, with the purpose of clearly improving the profile of our customers itself.
In fact, we have done the data scrubbing, and on that basis, we have done the data scrubbing for our entire portfolio, including INR 7 lakh, including around less than INR 7 lakh. That is satisfactory. In other words, I just want to differentiate between the two. Clearly, we would want to move away because what happens is that now when you propose earlier use of logging proposals like INR 5 lakh, INR 6 lakh which to some extent started coming closer to the microfinance type of customer profile. Our intention to move on to INR 7 lakh is more with an objective of improving the profile of our customers going forward rather than exact in any particular issue in terms of delinquency or NPA.
Dear sir, thank you so much. I have got more questions. I'll come back. Yeah.
Thank you, sir. A next question comes from the line of Renish from ICICI Bank. Please go ahead.
Yeah, hi sir. I am just two things on my side. Not only payment cost front, right? In our quarter, we always used to maintain or diagnose the procedure.
W hy is this not clear?
Is it better now, sir?
Not really. Can you speak a bit closer to the mic?
Yes, give me a minute. Is it better now?
Yes. Slightly better.
Okay. So just two things. One on the credit cost front, right? You know last quarter, we used to violate the credit cost between 30 to 40 basis point. Now what has changed is.
Sorry, it's not very clear. Do you want to try again, and maybe we'll take the next question?
Yeah, sure.
Thank you. The next question comes from the line of Kunal Shah from Citigroup. Please go ahead.
Yeah, hi sir. Thanks for taking the question. Firstly, on the growth side, now eventually we have seen AUM growth being at almost 22%. The asking run rate for what we have been guiding in terms of more than 25% really calls for maybe the uptick on the disbursement side on an average to say, when you look at it, almost like 30%-40% higher than where we are in Q2. Firstly, maybe what is leading to that, maybe the overall repayment run rate has been quite volatile over the past couple of quarters. It has gone up again in this quarter. How will we push towards the disbursements to get to more than 25% AUM growth run rate, yeah?
Actually, Kunal, we are very confident of pursuing this 25% run rate in the AUM. In fact, despite the fact our disbursements are not disbursed lower in the first half for a couple of reasons, like I've explained in terms of the cut-off in our loan proposal, size of the loan, INR 7 lakh and above. Also, certain weather rainfall-related issues in certain quarters, certain clusters that we operate. Also, to some extent, the new Seva software that we've introduced has taken a bit of time to settle down, which has now completely come on board. This gives us the confidence to really, and on top of it, this year we are planning to add 40 branches, of that 21-22 branches have been added largely in the third quarter, I would say the second quarter.
With all these actions in terms of our new branches that are coming into being, and B is that in terms of completely settling down our Seva software. And three, in terms of the impact of the initial impact of the sales staff at the branch level to get adjusted proportions of only INR 7 lakh and above, that got settled down already. We have introduced it from July 26, July 1st, it got now settled down. We are seeing the greater fully acceptance level coming in from October this month onwards. This makes us believe that we can definitely look for, in fact, our experience in the month of October validates some of these assumptions and gives us the confidence that we will be able to very comfortably move towards 20+ growth, of course, despite the challenges around.
Sure. Volatility in the repayment rates over past, maybe this quarter it was higher, so have we seen a slightly higher BT out?
No, on the BT out, BT. Basically, actually, no, not really. Because our BT continues to be around 7% kind of thing, 7%-7.5%. As we said earlier, around 5% is really the customer paid money out of their own source, either out of a redemption out of a local cheat or really the money that they've saved from the businesses, that kind of thing. In fact, we have also checked this data after six months when we went back to the credit bureau and checked whether these customers have taken loan from anyone else, and they have not taken. Almost 98% of them, they have not taken the loan. In other words, that seems to be money genuinely coming from the customer own source themselves.
That means only about around 2.5% is really the actual BT going to either the banks, particularly smaller banks, or some of the slightly higher level housing companies, mainly based on the in terms of maybe slightly better interest rates and things like that. There is no major change or behavioral change apart from on this 2.5%.
Yeah. So when you look at it earlier, you used to say 2%-2.5% through the cycle. This quarter, it was 7%-7.5%. When you do the analysis, maybe people have, maybe most of them have not taken the loans from others. It is more like a prepayment which has happened.
No, again, I'm saying the 7.5% of the 5% came from their own source. It has not gone to any other financier, including the bank. So what has been loan transfer is only 2.5%. This number is annualized. It's not for the quarter.
Yeah, got it. Yeah, sure. Got it.
Enough for the quarter. We do a detailed analysis of this 7.5% in terms of what money came from the own sources and what is the extent of loan transfer to other banks or the housing companies.
Got it. Lastly.
After six months, we also check the credit bureau.
Yeah, yeah, got it. Lastly, this write-off of INR 13 crore, you mentioned it is the change in the policy which has already provided because when you look at it, it is really hitting the P&L. Not able to get the context in terms of was there provisioning also done because this INR 13 crore number seems to be on the higher side and credit cost is also high. How should we look at it? Maybe are we largely done with the write-offs or this could be an ongoing process and credit cost can continue to be relatively on the higher side? You mentioned you have moved from two years to maybe 500 odd days. To that extent, maybe can this continue for the next few quarters?
No, no. Actually, you are right. Our credit cost has moved up from 20 basis points to 50 basis points. If you look at our ROE 3, there was a presentation for the half year, our credit cost has moved from 0.2 to 0.5. There is an increase in the credit cost to that extent. Now, this increase of 30 basis points is mainly arising out of a concept called a specific decision taken by the company. Earlier, we are going for what we call the technical write-off, meaning any outstanding beyond two years, we are writing off 100%. Instead of two years, now we have reduced it to 500 days. In other words, any outstanding beyond 500 days, it will be written off 100%. That has been contributing to.
The provisioning was not done. The question is, yeah, I understand that. The only question was, on the provisioning side, it is still having the impact on P&L. So were these not entirely provided loans?
No, it is not. On the provisioning side, as the initial sheet we have given, there is on the provisioning side, depending upon stage one, stage two, NP accounts, whatever, for example, in stage three, whatever 20% provision that we've been providing consistently, we are providing. Stage two, also the provisioning data is given. On top of the provision, we continue to carry our management out here for around INR 48 crore-INR 50 crore. That's what the number is given. It is not about credit cost comprising of both a provisioning element and a write-off element.
Got it, got it. Yeah. Thanks, thanks a lot.
What comes in the debit of the P&L account, credit cost comprising of provision, as well as the normal provision, as well as the write-off, both. To add you, 500 days, generally, we have provided 25%. Now we are stepping it up to 100%. I think this is specifically the view of us.
Perfect. Yeah, that's it.
Also, Kunal, let me also add one more point. In our, considering our product mix, particularly slightly non-home loans, slightly as a percentage going up. Also, our pricing per se provides for, we have consciously provided 0.5% as the credit cost in our pricing of the products. One thing, in the past, it was not, we were only actually getting a charge of 25 to 30 basis points. Then, to be on the conservative side, we said we will take it up to 50. That is one of the reasons why we have consciously gone for this decision of writing off beyond 500 days rather than waiting for two years.
Got it. Thanks, thanks a lot, and all the best, sir.
Thank you, sir. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit the question to one question per participant. Should you have a follow-up question, please rejoin the queue. A next question comes from the line of Nidhesh Jain from Investec. Please go ahead.
Thanks for the opportunity, sir, and good morning. Sir, our company is doing quite well on asset quality and profitability. On growth, disbursement growth numbers are weaker than, I think, what it should be. In that context, sir, if you can share some data that what percentage of your disbursements in the past has been coming from below INR 7 lakh loan, so that we can adjust, we can see what is the impact of this change in our disbursements. If you can give some data on how is the disbursement run rate in October, which also can give us confidence that we should be able to show improvement in growth in coming quarters.
Actually, I'll go by, as far as the growth is concerned, disbursements concerned, let me put it this way. Q1 of FY 2025 and Q1 of FY 2026, if we see, there is a good growth. There's a growth of about 14%. Q1 of 2025 and Q1 of 2026. When we come to, let's say, Q2 of 2025 and Q2 of 2026, the growth is really, it's only about 3%. Now, when we come to the half year of 2025, half year of 2026, the growth in disbursements is about 8%. If you see the growth in 2026 Q2 over Q1, it is around 24%. In other words, our Q2 2026 has grown by 24% over Q1 of 2026. Not only that, we are seeing that improvement continuing in the month of October.
I won't be able to give you the specific numbers of October, but we are very confident for a very good growth rate, reasonably good growth in the third quarter, after looking at the October numbers. There will be a good QoQ growth in Q3 over Q2 of 2026. Again, let me tell you, this is despite the fact, effective July 2026, we have taken the call of not taking the proposals of less than INR 7 lakh. Prior to that, whether, let's say, in the current year first quarter or the numbers in the previous year FY 2025, it includes our disbursements where we are taking the proposal even of the size of INR 50 lakh, INR 6 lakh, INR 7 lakh business. To answer your question, yeah.
What is the percentage of such disbursals in the previous quarters if you can quantify that?
No, I don't have the number. I can quantify it and share it out offline. The point is that, as I mentioned, this call has been taken primarily looking at, we want to be clearly away from the microfinance kind of profile of customers. We all know that microfinance loans are sizes around INR 3 lakh kind of thing. We would want to be very clearly away from it. When we've done the scrubbing of all our existing customer data, even what we have done in the past of less than INR 7 lakh, our repayment profile-wise, it is normal as the other profile, other customers, INR 7+ lakh . Despite that, we have taken this conscious call of not pursuing that because going forward, we want to work on improving our customer profiles, loan profiles better.
Sure. Second question is on the credit cost. If you can quantify the impact of one-off write-off policy change in this quarter.
No, it's not one-off. This is a policy call, accounting business policy call we have taken. Going forward, we will be charging off anything about one year. After 500 days, we'll be charging off. Yeah.
In this quarter, the impact would be much higher because suddenly the loans which were in the bracket of 500 to two years, on that, we have taken an accidental charge. That flow through will not be the same quantum from the next quarter, right? So.
Yeah, fair enough. Yeah, true. We'll follow a consistent accounting policy.
Sure. From next quarter onward, then we should again expect the credit cost to come down because there is a slightly higher credit cost because this is the first time we have charged a pool of loans. From next quarter, do you expect credit cost to come down from Q2 or is this now the new run rate?
I would not want to really give a specific comment on that. But you are saying, logically speaking, it should come down, yes.
Sure, sure, sir. That's it from my side. Thank you. Thank you.
Thank you, sir. A next question comes from the line of Shweta Daptardar from Elara Capital. Please go ahead.
Thank you, sir, for the opportunity. A couple of questions. You clearly mentioned that we are one of the best in OpEx to assets and operational efficiency. Also, we'll be relying more on productivity going forward. Could you just throw some light on branch productivity aspects, wherein if you can just put out a number on loan files per officer and how that has been improving? Of course, you have dealt with tech initiatives, but more so on the human capital or physical aspects part, which can contribute to productivity, which will help us maintain this kind of strong OpEx to assets number.
Actually, our OpEx as a percentage of year yield, which is around 2.7%, is not there just for this year or this quarter. It's been there like that last almost 10 years. Okay? In other words, there is very consistently, despite the fact, while the ratio remains at around 2.7%, our investments in branches, our investment in IT has been going up to support the growth in business and manage our risk better. Despite that, we are able to maintain our OpEx as a percentage of year yield or our cost-to-income ratio broadly in this region, mainly through the consistent improvement in productivity, not only at the field level by the sales officers, but even other than the. Because of the customer-facing jobs, as you know, it includes sales, it includes collections, it includes the credit, legal, and also the HO staff.
In other words, we look for while definitely the file productivity of the sales officers is tracked on a monthly basis, on an everyday basis, or weekly basis, monthly basis. Equally, we are also able to bring in productivity in all of our support functions and the HO functions also. Similarly, every aspect of our operating costs, also we see our costs are really monitored and tracked for improving, getting a better output or better results for the money that we spend. In other words, it's a productivity that is all pervasive. As a culture, we've been normally is all known that we follow a maybe slightly frugal way of working, a culture that we follow that helps us.
Coming back on the sales productivity, currently while today, our login productivity is around 3 to 3.1 file per sales staff at the branch level, which is there are some branches which are doing higher, some sales officers are doing higher, some branches they are doing lower, and it is average what is given. We are working in that area of improving that from the current level.
Okay, sir. Second question is on ticket size. Because you mentioned you have done data scrubbing and also you evaluated and have decided to move and shift towards slightly higher ticket size. Going forward, have you put a threshold kind of thing wherein your average ticket size will be retained or will revolve around those levels, say, INR 9 lakh or INR 8.5 lakh-INR 9 lakh, which has been the case for now over two years? Any thresholds on ticket size beyond which you would not like to exceed and maintain your core focus?
No, actually, it is like this. Today, my average login ticket size is about INR 10 lakh. And our average sanctioned disbursement size is about INR 9 lakh. And as you know, being affordable housing finance, we have really kept our normally, our loans, we normally keep it less than INR 30 lakh. The range that we operate is really now is about from, let's say, INR 7 lakh to around largely INR 15 lakh-INR 16 lakh. Another range. If there are good customer profiles, we will go, but not beyond INR 30 lakh. In other words, we have really taken a conscious call because given the market that we address in terms of tier 2, tier 3, tier 4 cities, and given the profile of the customers who are largely self-employed, we have taken this in terms of we will not look at loans generally beyond why we can.
As you know, there is nothing like legally our NSB guidelines does not prohibit us to do even much higher value. We have, and the company has taken a call that we do not want to do any loan beyond, let us say, INR 30 lakh. Less than INR 30 lakh also, we have chosen by and large, we will be confident, very happy between INR 10 lakh-INR 20 lakh. Okay, the INR 10 lakh, now we are at INR 7 lakh. Progressively, our plan is really increase it by INR 1 lakh average ticket size per year. If it is INR 10 lakh login today, we may look at INR 11 lakh next year and maybe INR 12 lakh thereafter. That is the way we go. This also reflects partly the inflation that takes place in the construction cost. It is not really taking a higher risk in that sense.
Yes, very elaborate answers, sir. Very helpful. Thank you so much and all the best.
Thank you. A next question comes from the line of Shailesh L. Kanani from Centrum Broking. Please go ahead.
Yeah, good morning. Thanks for the opportunity. My first question was with respect to our stopping of disbursement below INR 7 lakh ticket size. I appreciate the fact that we are doing it to stay away from MFI customers. In the past, our commentary has been that there is not much overlap, no overlap as such with MFI customers. To be honest, our asset quality has been better vis-à-vis peers, right? Why this move when the disbursements are kind of a little bit lagging than our earlier assumptions? If you can just elaborate something on that point, sir.
As I mentioned, the decision to log in only INR 7+ lakh transaction, it is actually, in our view, it is the right decision for the company going forward. Yes, it has met with a short-term impact of our disbursements growth slightly not impacted in the, let's say, second quarter, maybe second half as well. That is very temporary according to us. In fact, now we started seeing our entire team has down the line has accepted that. Now in October, we got back to everybody now got adjusted to, got recanceled to, got started working. Okay, hereafter going forward, this company is going to do only INR 7 lakh or no more. Now, the point is the INR 7 lakh is more than the point in INR 7 lakh. The objective of the decision is really long-term.
The objective is progressively we want to move towards a better category, better quality credit-wise customers. They will have, this is also, they will have more credit bureau data, better credit bureau data, and also they will have better account aggregated data. Also, because for things like, for example, even PD, from a manual discussion of PD, now we are planning to go for an audio-video PD, which means that the customer should be able to communicate, talk, and things like that. In other words, the decision of the company is to keep moving towards better quality customers. At the same time, these quality customers are located in tier 3, tier 4, and largely self-employed.
Thanks for that elaborate answer. Basically, there is no early signs of stress in the book. Is that a right assumption?
No, no, it is not. Actually, we have done the customer scrubbing of all our INR 1 lakh-INR 70 lakh and above customers. 55% of our customers, they do not have any additional loan other than Aptus. 20% of the customers, they have one more loan in addition to the Aptus loan. We see only close to 5%. In fact, our customers where some interface with the MFI customers is only around 1.5%. When we looked at the same thing in terms of the loan size-wise also, there is no significant difference. We have not seen, even on our day-to-day operations, collections, and all, we do not see any significant difference in less than INR 7 lakh. Despite that, as I think I have repeated several times on this, credit delinquency is not the reason, at least for us.
We are wanting to move to a better category, better class of customers.
That's interesting.
Also the transaction size because we are also realizing that this is a home loan of 15 years, effective tenor of 10-11 years. We do not want to get into INR 5 lakh-INR 6 lakh where your EMI will be less, your collections have to be more, and they will keep growing.
That's very helpful. Thanks a lot. Just a related question, as you mentioned in the earlier question as well, as we move towards a little higher ATS and we are not doing anything less than INR 7 lakh, does it impact our blended needs in any case going ahead one year, two years down the line?
Actually, as I mentioned, we are not significantly increasing our ATS. Our intent is really, as I told you, last year our login was average INR 9 lakh. This year, our average login is INR 10 lakh. Next year, we are planning for INR 11 lakh. Thereafter, INR 12 lakh. This is really a normal increase, some of it normal increase, partly on account of inflation also. In other words, there is no significant, our ATS is not going to move up from INR 10 lakh to INR 15 lakh to INR 20 lakh to INR 25 lakh No, we are not working on that.
That part I understood. I just was wondering, as we stop below INR 7 lakh does it impact the blended yield in case we are getting higher yields in that category? I'm just trying to understand that.
No, no, absolutely no because we've actually, okay, thanks for your answer the first time. No, we charge the same rate on all the customers.
Yeah, yeah. That's okay.
We charge really based on the loan size, yeah.
Yeah, yeah. Okay. Sir, last question from my side. If you can share the disbursement figure, an absolute figure for the month of September, if not for October, but the quarter gone by, if you can share the number.
I don't want to get into this monthly weekly, please. Yeah.
Okay, sir. Thanks a lot and best of luck, sir.
Thank you. Ladies and gentlemen, a humble request to everyone that the management will be able to address questions from all the participants in the conference. Kindly please limit the question to one question per participant. Should you have a follow-up question, please rejoin the queue. A next question comes from the line of Sameer Bhise from Dymon Asia. Please go ahead.
Yeah, hi. Thank you for the opportunity. First of all, congratulations for a stable set of numbers in a difficult environment, especially given what's happening with respect to the weather changes, etc. I had a quick question from our medium-term goal of INR 25,000 crore of balance sheet in terms of loan assets. Just wanted to get your sense on how confident is one to reach this number given the current macro setup, or would you require a meaningful pickup in macro to kind of reach there? Or given with current setup, current productivity numbers, current branch addition plans, we remain confident of hitting that over the medium term. That's one. Secondly, as the prior participant Nidhesh asked on the credit cost impact due to policy change, one is obviously the flow part, and secondly, it's the stock part on the current set of assets.
Is it fair to assume that the impact on this quarter was mainly due to the stock impact on the policy change and flow impact incrementally should be lower? That's it. That's all from my side. Thank you.
I'll answer the second part first. Yeah, the current cost in the current period increased largely on account of this accounting policy change. Okay. So because of that, the current cost will come down. While we will consistently follow the accounting policy of writing off dues beyond 500 days, the policy will follow. We are confident of maintaining our collections, improving our collections, working on our NPA to reduce it further. I won't be able to specifically say because if it is 50 basis points, suppose it becomes 52 basis points or 55 basis points, another 5 basis points variation. I don't want the question to be asked. Saying that you said 50 basis points, now it has gone to 55. It can be 50, it can be 45, it can be lower also.
The point is that, as I mentioned again, we are working. Look at our NIM, look at our ROA, look at our ROE. My credit cost goes up by 5 basis points. My pricing also provides an additional basis point. That is not getting too much unreal. Let me tell you that there is more than substantially different. If at all, maybe there could be some on the reduction only, I mean, on the lower side only. It is more really. It may not come to be very significant reduction because we have decided to practice policy for in future as well. Let's not look at it as a one-time one, and it is not going to happen next year. Because of that, our credit cost will come down, let's say, from 50 to 30. No.
I won't be able to commit to that.
Sure. And secondly on growth, sir. Yeah.
See, on the growth, again, I think we have discussed. Again, we are looking at this INR 25,000 crore year-on-year in the medium term as our immediate goal. We are really strengthening the organization in every aspect, whether at the field level, at the cluster level, at the HO level, and in every function, be it in sales, marketing, and every other function. Not only that, the emerging compliance requirements, also we are investing in our functions, whether internal audit, risk management, or compliance functions. The entire organization is gathered, and we have made substantial investment to be mentally prepared, organizationally prepared for this INR 25,000 crore at the immediate term. In fact, again, based on our estimated year-end, year-year, if you really block out, if you really grow at a rate of about 25% CAGR in the next three years, we will cross even INR 25,000 crore.
It will come down around INR 26,000 crore also. I always said that there could be a way where we are very confident of achieving this goal, but there could be a variation in terms of one quarter maybe earlier, one quarter maybe later. That is about it.
Great, sir. Thank you and all the best.
Thank you. A next question comes from the line of Kushan Parikh from Morgan Stanley. Please go ahead.
Thanks for taking my question. Just a couple of questions. One is I just wanted to check on the incremental yields. I mean, given that we are getting a benefit on the borrowing cost side, have we taken or are we looking to take any PLR cuts on our incremental yields? Also, wanted to understand on the growth side, this quarter, I mean, we laid out that the BT outs have not really changed from the long-term trends. However, I mean, when we just look at on a quarter-on-quarter basis, the runoff in the portfolio has increased from INR 373 crore to INR 463 crore. I mean, is this, I mean, is the INR 463 crore number the normal rendering that we should take going forward as well in terms of the runoff from the portfolio? Yeah, these are my two questions.
See, actually, our growth really, our year-over-year growth largely depends on our disbursements. We do not see any concern, at least as of now, or we have not seen this concern in the last 16 years. We have not seen this kind of concern, BT concern, in the last five years, 10 years. We are in the current year or the foreseeable future because the BT rundown really seems to be within a reasonable range. We are not seeing any excessive flow or variation in that.
Our challenge in our loan book growth, AUM growth, is more in terms of our ability to enhance the disbursements rather than get excessively worried about the BT because, having said that, we very closely monitor the BT, and we get into the reason and logic in terms of why did this BT happen and where the funding came from. Is it and why is it because of additional loan somebody offered? Is it because lower rate somebody's offered? We do an exhaustive analysis for every BT. At least at this point in time and for the immediate future, we do not see the BT as a major issue for us. What we see as a major challenge for us is really how do we really, to attain our goals, how do we really work on increasing the disbursements, including through improvement, normal smaller improvements in our ATS.
Understood, sir. On the incremental yields?
Incremental yields?
Incremental.
We do not actually, okay. Actually, we do not have, we are not seeing any pressure issue, compulsion, regulatory adversary issues on our lending rates. Whether it is by and large, we do about 15.5% for the home loan. We do for lab around 17.5% for the lab. We do around 21% for the SME. We do not see much of an issue there. As you have seen, we are able to maintain a consistently higher than industry-level realization, of course, partly helped by our product mix coming through our subsidiary companies, the SME business, where our lending rate is 21% as opposed to the home loan of 15.5%. Having said that, actually, in the last of the Q2, we did make some slight optimization that earlier we were charging in the home loan for home loan 15.5%. For the home extension and renovation, we are charging 17.5%.
That we have aligned it, and we are transferring home loan given by NSB. We have aligned that also into a home loan rate of 15.5%. The share of the extension or those is only smaller. It is about 3%-4%, about 5%-6%. That maybe does not impact our yield, but then optically, we are able to present ourselves better on the field. Same way in terms of the SME, it was earlier 22%. We have optimized it to 21%. Again, optically, it goes well with the we understand the regulatory and things like that. Again, it is a minor tweaking that we have done. This has not affected our yield. In fact, our yield for the quarter, for the half-year, is good, very good. In fact, much higher than you must have noticed, much higher than any of our competitors.
No, fair enough. I mean, just one last more longer-term question. I mean, we've had two big changes in terms of moving from INR 7 lakh ticket size and also the new write-off policy that we have. Given that that is not going to impact yields or credit costs in a very significant way, is it fair to assume that we still are aiming to maintain or improve our 20% ROE target?
We are very confident of not maintaining, improving the 20% ROE. We are very confident. Yeah.
Understood. Understood. That's all from my side. Thank you.
Thank you. Ladies and gentlemen, we request you please kindly limit your question to one question per participant. The next question comes from the line of Gaurav Singhal from WFM Asia. Please go ahead.
Thank you. Yeah, hi. Thanks for taking my question. I think most of the questions have been answered, but maybe one more. In this direct assignment income, we have a pretty big jump in this quarter and also we started with recently. Maybe can you share our philosophy on direct assignment? I'm guessing it also helps with the principal business criteria. What is the philosophy on how we should?
Philosophy on direct assignment.
Basically, on the direct assignment, we have started while most of the companies, listed companies in particular in the housing finance space and the NBFC space, they are doing direct assignment for several years now. At least five, six years if you can recall. We are really consciously a bit conservative on that. Looking at it in a broader sense in terms of going forward from our AUM point of view, from the additional and newer source of funding, and also from the point of view of the principal business criteria as applicable to HL company, we thought it is our interest to look at the direct assignment as well. Going forward, we will have part of our portfolio going and being offered under the direct assignment.
Having said that, in the current quarter, we have done a direct assignment of about INR 190 crore. In the first quarter, we have done about INR 130 crore. Cumulatively, we have done about INR 320 crore of direct assignment, which on our loan book of INR 11,700 crore comes to about 3%. Going forward, we may look at, while we have the board authorization to go direct assignment up to 10% of the loan book, we may look at around 6%-7%, not beyond that.
Okay. Thank you.
Thank you, sir. Ladies and gentlemen, due to time constraint, that was the last question for today. I now hand the conference over to the management for the closing comments. Thank you, and over to you, sir.
Thank you. Thank you, Mona, for organizing this conference call. I would like to pay my sincere gratitude to all the analysts and investor friends who have taken time out to listen to us today. Please feel free to contact us in case you have any further queries. Subalaji and Amit will be there to be in touch with you. Thank you.
Thank you, sir. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.