Ladies and gentlemen, good day and welcome to the City Union Bank Limited Q3 and Nine Months FY 2026 Earnings Conference Call hosted by Ambit Capital Pvt Ltd. 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 the star then ZERO on your touch-tone phone.
I now hand the conference over to Mr. Jignesh Shial from Ambit Capital Pvt Ltd. Thank you, and over to you, sir.
Yeah, thank you, Rituja, and good evening, everyone. On behalf of Ambit Capital, I would like to thank the management of City Union Bank for allowing us the opportunity to host Q3 FY 2026 and nine month FY 2026 earnings call. We have along with us Dr. N. Kamakodi, MD and CEO, Mr. R. Vijay Anandh, Executive Director, Mr. V. Ramesh, Executive Director, Mr. J. Sadagopan, CFO, and the management team of City Union Bank.
I'll now hand over the call to Mr. N. Kamakodi, MD and CEO of City Union Bank, for the opening remarks. Over to you, sir.
Good evening, everyone. Dr. N. Kamakodi here. Hearty welcome to all of you for this con call to discuss the unaudited financial results of City Union Bank for the third quarter, nine months ended 31st December 2025 for financial year 2026. The board approved the results today, and I hope all of you have received the copies of the results and the presentations. As you all know, my tenure as MD and CEO of the bank will—the 15 years will be completed on 30th April. As you all know, this is my 59th quarter today, so we have one more quarter to go. Based on the regulations currently in force, let's say I have to complete my tenure on 30th April.
Keeping that into account, our board has sent the list of candidates to RBI, and once we receive the further approval, we will be in a position to communicate to you all the status. So far, everything is going as per the planning, and all so far so good. We are also happy to note that our net worth has crossed the INR 10,000 crore mark today, which is an important milestone in the history of the bank. We are also happy to inform you one of our board members, Professor V. Kamakoti, who is also the director of the IIT Madras, had been honored with the country's prestigious Padma Award, Padma Shri, for his significant contributions to our country's science and technology sector. We are happy to share with you all.
Also, we have a new induction to our board today. Shri K. Subramanian, chartered accountant and also an executive with almost 38-39 years' service with the Tata Consultancy Services, had been inducted into our board. Let's say we expect a good contribution from him in the future. Other details are available in the presentation. So with this, I hand over the mic to our executive director, Mr. R. Vijay Anandh, who will discuss the numbers, and also we will be discussing the questions and answers at the end.
Over to R. Vijay Anandh.
Thank you, sir. Good evening, all. During last con call, we had shared with you our expectations for the current financial year as below. We could see the visibility in achieving mid-teens to high-teens growth, at least 2%-3% over and above that of the industry. Our deposit growth is aligning with credit growth, and this will continue. CRR cut is giving positive impact, and we are expecting some positive bias in the NIM during Q3 and Q4. ROA is expected to remain at our current level of +1.5%. Our cost-to-income ratio remains in the range of 48-50 for financial year 2026. For the current quarter, nine months ended FY 2026, our performance is more or less aligned with our expectations, whatever we have shared with you all. You could see we have surpassed on some counts advance growth.
We had registered 21% advance growth in Q3 financial year 2026 Y-o-Y, and our advance have increased to INR 60,892 crores from INR 50,409 crores in Q3 FY 2025. This growth is consistent starting from Q1 FY 2025, and we had achieved double-digit credit growth all the quarters up to Q3 FY 2026, which is the rate for the last seven consecutive quarters we have achieved this double-digit growth. In Q3 alone, our advances had grown over by INR 3,300 crores, which is more or less similar to our Q2 growth. Also, the growth of 21% is the highest credit growth after financial year 2018, which is almost after 28 quarters. As given earlier, we will continue with the targeted growth of mid-teens, which is 2%-3% over and above the system growth. At the same time, we will not let go of the opportunities when we encounter.
The focus continues on core MSME, gold loans, and secured retail. Deposit front: our deposits also had a growth of 21% similar to advances, and our deposits stood at INR 70,516 crore for Q3 FY 2026 as compared to INR 58,271 crore in Q3 FY 2025. Our average CD ratio for Q3 FY 2026 stood at 86%. The CASA percentage to total deposits stood at 27%. The daily average CASA grew by 3% between Q2 FY 2026 and Q3 FY 2026, and 19% year-on-year, which is Q3 FY 2025 and Q3 FY 2026. As you know, we had received double-A rating last quarter, which enhanced our opportunities to participate in the wholesale deposit market. To test the waters, we went for a Certificate of Deposit for INR 49 crore in Q2 FY 2026 and around INR 1,150 crore in Q3 FY 2026 to get a feel for the market.
Anyway, our focus will be on granular retail deposits, and this participation in the CD market is purely to get an experience. Asset quality status: In the asset quality front, we are continuing with the trend of recoveries over and above slippages as we have seen in the last several quarters. For Q3 FY 2026, the slippage is around INR 193 crore, while the total recoveries are INR 219 crore, consisting of INR 164 crore from live NPA and INR 55 crore from technical write-off of accounts, resulting in reduced NPA figures. Our gross NPA percentage had reduced to 2.17% from 2.42% in Q2 FY 2026 and 2.99% in Q1 FY 2026. Both gross NPA and net NPA, in both percentage and absolute terms, are reducing quarter by quarter for the last 11 quarters or, say, close to three years on a continuous basis.
When compared to Q3 FY 2025, the GNPA had reduced from 3.36%, which is almost 119 basis points reduction. Similarly, our net NPA number had come below the INR 500 crore mark and decreased to INR 469 crore, and our net NPA percentage to 0.78% in Q3 FY 2026 as compared to 1.42%, resulting in 64 basis points reduction in net NPA on a year-on-year basis. Net NPA was at 1.2% in Q1 FY 2026 and 0.9% in Q2 FY 2026. We are now at 0.78%, showing a substantial sequential decrease. In our last con call, we have stated that our overall SMA, including SMA 0, 1, and 2 put together, are in a decreasing trend for the past few quarters. The total SMA numbers for Q3 FY 2026 stood at 3.68% compared to 5.06% in the last quarter, showing a significant improvement in these numbers.
Overall, SMA 2 to total advance had come down below 1% and stood at 0.95% in Q3 FY 2026 as compared to 1.34% in Q2 FY 2026 and 1.59% in Q1 FY 2026. As we speak today, we are at 0.95% for this quarter. For Q3 FY 2026, PCR with technical write-off stood at 83%, which has improved from 77% in Q3 last year. Starting from Q1 FY 2025, we had been increasing our PCR without TW to bring it closer to the industry levels. For the current quarter, PCR without technical write-off had improved to 64% compared to 59% in Q3 FY 2025. Interest income: our interest income had grown by 19% in Q3 FY 2026 and improved to INR 1,756 crores from INR 1,479 crores in Q3 FY 2025. For nine months ended FY 2026, our interest income stood at INR 5,014 crores as compared to INR 4,301 crores, showing 17% growth, INR 5,014 crores compared to INR 301 crores.
Yield: On the yield front, our yield on assets stood at 9.73% in Q3 FY 2026 as compared to 9.81% in Q3 last year. Compared to Q2 FY 2026, the yield has marginally improved by 7 basis points. For nine months - FY 2026, the same is 9.73% as against 9.74% in the similar period last year. On the cost side, the cost of deposits has reduced by 14 bps sequentially due to the repricing benefit and stood at 5.57% for the quarter compared to 5.71% in Q2 FY 2026. As a result, our NIM has increased from 3.63% in Q2 FY 2026 to 3.89% in Q3 FY 2026. Faster repricing of deposits and an increase in gold portfolio with a fixed rate is driving this improved NIM. For the nine months ended FY 2026, the NIM is at 3.69% as compared to 3.59% for the same period in FY 2025.
We expect a stable NIM for Q4 as well, with 10 bps ±. The other income for nine months FY 2026 has increased by 16% from INR 748 crores to INR 647 crores last year. Further opportunities on treasury profits are getting limited, which we are working hard to compensate through other means like insurance income, processing charges, etc. Our operating profit had grown by 18% in Q3 FY 2026 and stood at INR 513 crores compared to INR 436 crores in Q3 FY 2025, which is in tune with 21% business growth. For year to date, that is, nine months ended FY 2026, it had improved to INR 1,435 crores from INR 1,238 crores for nine months ended FY 2025, registering a 16% growth. The total PAT had grown by 16%. For nine months ended FY 2026, it stood at INR 967 crores as against INR 836 crores in the corresponding period in FY 2025.
On Q3 FY 2026, our PAT was at INR 332 crore as against INR 286 crore in Q3 FY 2025. Cost-to-income: our cost-to-income ratio for Q3 FY 2026 stood at 48.56% compared to 49.16% in Q2 FY 2026, showing some decrease, while for nine months ended FY 2026, it stood at 48.62%. ROA. Our ROA for Q3 FY 2026 is at 1.53%, and our nine months FY 20 26 ROA is at 1.55%, which is over and above our long-term level of 1.5%.
To sum up, we have achieved consistent double-digit growth in all the four quarters of FY 20 25 and also three quarters for the current financial year. We would end up in high-teens growth for FY 20 26, which will be over and above the industry-level growth. Our focus continues to be in the areas of core MSME, gold loan, and secured retail. Our deposit growth will be aligned with the credit growth, with a focus on CASA and granular deposits.
The effects of the CRR cut will have some positive bias in the next quarter as well as in our NIM levels. ROA is expected to remain at our current level of +1.5%, and our cost-to-income ratio remains in the range of 48%-50% for financial year 2026.
Thanks a lot to everyone. Happy to take the questions.
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 the 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. Participants to ask a question, please press star and one now. The first question is from the line of Sameer Bhise from Dymon Asia . Please go ahead.
Yeah. Thank you for the opportunity, sir, and congrats on a fantastic set of numbers. Just wanted to understand the provisioning breakup for this quarter. Given that it is slightly higher on a sequential basis, does it also involve any floating or standard asset provisions? I can also see that PCR has gone up, but if you could elaborate the thought process here, I think it will be helpful.
See, Like said, we had INR 74 crore provision for NPA vis-à-vis INR 40 crore for the last quarter. The provision for tax is almost stable at 85 both year, and the standard assets provision increased from INR 7 crore to INR 22 crore. See, the logic is, when I hand over, I have to reduce the NPA level as much as possible. We have achieved our targeted ROA of 1.5% plus, and we are going for higher provision to improve the coverage ratio and also reduce the net NPA numbers.
Yes. Okay. Fair enough. Thank you so much. And secondly, if one were to look at incrementally, how should one look at slippage ratios going ahead? Because we are entering, we are now on a reasonably strong growth trajectory, and also the share of retail assets continues to inch up. So if you could comment on that, especially for FY 20 27, if you can share some thoughts, that will be great.
See, basically, for many quarters now, the total recoveries of live NPA and the technical write-off of NPA together are more than the slippage numbers. And using that and also having, let's say, some incremental provision, let's say, we were slightly behind the PCR in terms of gross and net NPA percentage even last year, which we have caught up to a greater extent. Whenever we feel that gross NPA and net NPA numbers are comfortable and we can go for higher profits, we will be taking the call, and we will be reviewing that situation. And probably Vijay will also concur with me. Based on that decision, the incremental credit provisioning will be decided.
Sure, sir. Okay. That's all from my side. Thank you and all the best. Congrats again.
Thank you. Participants to ask a question, please press star and one. The next question is from the line of Anand Dama from Emkay Global. Please go ahead.
Yes, sir. Thank you for the opportunity and congratulations for a good set of results. What is basically driving up our margins? We saw your interest on advances actually shooting up this quarter despite most players reporting a rate cut. Is it that last year or basically earlier on we had a lot of interest reversals, which is not happening now, or the incremental loans are basically coming at better yields? The MCLR-related regulatory issues that we had, that also seems to be largely behind. So what basically explains the jump in the interest on advances that we are seeing at this point of time?
So, sir, basically, we had a repricing on deposits, as mentioned in my commentary. Almost INR 14,200 crore got repriced. This is from the deposit side. And from the advances side, we have moved to a fixed rate in gold loans. So that is now stable. And in MSME also, we are targeting the numbers, what we are supposed to, as well in retail secured. I think the combination of these factors is helping us in getting it right.
Do you expect the interest on loans to go up further?
I don't think so, sir. Quite difficult.
Okay. Your cost will keep coming down?
Yeah. One more thing which you have to keep in account, Anand Dama, the reduced CRR ratio also is helping us, and also we are operating at a slightly inched-up average CD ratio. All are helping us to have a better margin.
Okay. That basically gives you confidence that in the fourth quarter, margins should be largely flattish?
Yeah. That's why we have, as usual, we have given ±10 basis point band.
Sir, how should we look at FY 20 27? Should the margins be in the range of about 3.9%, or should it inch up further from there?
Ask for one quarter at a time, Bas. You are still not sure how the, let's say, RBI rate cuts are, let's say, how it is going to move and all. We thought it is by and large. I mean, there are multiple factors which we have to look into. But whatever that happens, our endeavor is to, let's say, have it, let's say, that 3.75%-4% is what we had done in the previous cycle for a few quarters. That stability is what we are targeting and trying to work out.
If assuming there are no rate cuts, then you should expect a stable to better margins next year?
Yes. Yes.
Secondly, what is driving up your other OpEx during the current quarter? It was INR 254 crore versus INR 230 crore last quarter. Is it more related to business, or there was some one-off over here?
No, I think it's almost same. It looks flat. We had INR 455 crore in Q2, and we are at INR 484 crore. So majorly, it's going to be technology expenses and salaries. Nothing much.
You've largely taken the labor code in stride , right, this quarter itself?
See, fortunately, let's say, right from the beginning, the changes in, let's say, you have to calculate based on the basic plus DA. We are not getting impacted because right from the beginning, our calculations on the retirement benefits and all are almost, I mean, everything is based on the basic plus DA basis only. It was not purely based on the basic. And also that both the things should come above 50% is also not making any impact to us. The only thing is, I mean, impacting us in a minor form is, let's say, the gratuity you have to give for even one year, unlike what it was 10 years in the past, for which we don't expect a big impact and all. We have not yet got the, let's say, actuarial calculations and all from our, let's say, LIC, which is managing our fund and all.
Expecting those things, we have made a marginal provision of INR 2 crore for the current quarter.
Okay. And, sir, the ECL provision you made last quarter, this quarter you've not made any ECL provision?
This quarter also about INR 45 crore we have made.
Okay. In your PPT, it is not.
This quarter, we have not made any incremental provision for ECL.
Okay. So you expect you're going to make it next quarter?
Yeah. See, basically, after that SMA numbers are coming down, we are seeing some moderation. And based on the requirement and the clarity, we will be taking that. We are, let's say, just keeping a tab on that and trying to look out how we can take it forward.
Sure. And, sir, lastly, the RBI supervision would be over by now, hopefully. You would have got the final report. Any observations over there in terms of PSL or anything else that you want to highlight?
No. I think if you remember, we had that hit about three years back. After that, this year's cycle is over, and nothing so far so good, and nothing to declare to market.
Great, sir. Great. Thanks. Thanks a lot, sir.
Thank you. The next question is from the line of Parth Gutka from 360 One Capital. Please go ahead.
Yeah. Hi, sir. Thanks a lot for the opportunity. So my first question is, your gold loan portfolio within agriculture has declined on a 2% on a Q-o-Q basis. So anything to read into that? That's my first question. My second question is, what proportion of the deposits are yet to be repriced in quarter four? And my third and the last question is, within the overall advances, last time around, you quoted that there's a INR 500 crore renewable energy portfolio, which is slightly higher in yield than your core MSME portfolio. So just within the overall advances, what proportion is this higher-yielding portfolio, and what would be that proportion, say, two, three quarters down the line? Yeah. Those were my questions. Thank you.
So gold loans, we don't expect much. It's an agricultural gold loan which has come down. And it's, again, based on the season, harvesting, and other things. So we don't expect that. I think it should be back to normal. So nothing much materially in this. With respect to the next question of repricing of deposits, another [Foreign language]
[Foreign language]
INR 10,782 crore to go. This is the repricing which is going to happen in the next couple of quarters. So this is on your second question. Sorry, I missed your third question. I'm sorry, sir.
Yeah. So third question was, so last time in the last quarter's con call, you had mentioned that you have started doing the renewable energy portfolio, which was around INR 500 crore as of Q2. And there were certain other segments where you're earning slightly higher yield than your core MSME portfolio. So just trying to understand, what are those segments, and what would be the proportion of those segments, say, two, three quarters down the line?
See, let's say, I think you are linking what we got from the IFC when we sold, that is, the purpose is kept for the solar. And many of our customers are asking, and there is a slow and steady progress. And our expectation is that we should be able to complete that before the completion of the calendar year 2026. So the progress is slow and steady without much issues so far.
Okay, sir. Thanks.
Thank you. The next question is from the line of Pritesh Bumb from DAM Capital Advisors. Please go ahead.
Hi, sir. Good evening. Congrats on a great set of numbers. Just a few questions. One is that what is the growth outlook from here on? So we've seen a very strong loan growth. You had guided in the last quarter that we may also do something around 18%-20%. It's more than that. So how do you see that from here on?
Sir, as I explained in the summary, we are expecting it to mid to high-teens. So we will continue to grow like this. Mid to high-teens , I think you can expect it from us.
Sir, if I want to ask a follow-up on that, is what CD ratio we are comfortable on from here on? It was 86% almost.
We want it to be between 85% to 86%. That's a number which we are looking at.
Okay. 85%-86% is where we are comfortable at.
Yeah.
Right. So can you give some data on this? How much is EBLR fixed, MCLR, as a share in our loans?
See, the EBLR around 48%, MCLR around 17%, and 32% by way of fixed rate for gold loans, and 3% towards gross NPA.
3% for what?
NPA. Non-Performing Asset.
Okay. Got it. And last question was on write-off. We've seen write-off going up a bit quarter to quarter, last quarter. Of course, quarter on quarter, it has fallen. But as a number, still looks like we're doing about plus INR 1,000 crore. What is the thought process there, and what is entailing that write-off?
See, as I told for, I think, one of the earlier questions, Kamakodi here, we want to, let's say, the thought process involved is like this. One, wherever we have made maximum provisions and all, we are using this opportunity to, let's say, reduce it so that the management of gross and net NPA will be better. And number two, it also helps in the, let's say, taxation purpose also. So considering both, and you can also see that we continuously have a decent stream of recoveries from the written-off assets. Even this year also, we had a very reasonable sum. So this technical write-off is one instrument which we are using for quite some time, and we feel comfortable with that. And our future also, we feel we will be continuing with the same methodology.
Sure, sir. And, sir, if I can squeeze one more, our tax rate has been consistently lower at about 20%, and we managed to keep that for some time. So can that continue for some time more? Is there some room there? You mentioned about write-off.
Yeah. It will go as far as we are, let's say, once again, depending upon how much write-offs we are doing and how much incremental provision we are making. So it will take a comprehensive step. On, let's say, all these parameters put together. This will, let's say, probably continue for at least another two, three, or four quarters, maybe even to the completion of the next year. And further future will be depending upon, let's say, increase in your NPA, let's say, slippage cycle, which we hope we should be another not less than four, five quarters away.
Sure, sir. Got it. Thank you so much, and all the best for future.
Thank you. The next question is from the line of Rohan M from Equirus Securities. Please go ahead.
Good evening, sir. Thanks for the opportunity, and congrats on a good set of numbers. Sir, in the previous reports which have happened up till now, we have been able to manage by not transferring the entire cut to the borrowers. So for the 25% cut that has happened in December, will that be a complete transmission, or we will be able to manage with a lower cut? And has that got reflected in the yields this quarter?
Yeah. Whatever the rate cut which has happened by December, this has completely got transferred to the customers, and there is nothing much left in EBLR.
So effectively, 25 basis point has got transmitted?
Yes. For all the loans which are in EBLR. So we have said 30% in, 30% in gold loan. Those portions will not get this thing. So that's why the overall impact will be less than, let's say, whatever, let's say, 25 basis point. And just to give you our overall annual impact because of this rate cut comes to about INR 45 crore, which translates into about INR 11 crore per quarter because of this last rate cut, whatever we had. And one thing is that in this third quarter, it has happened only towards the, let's say, last one month or so.
But this impact will be there for all the three months in this current quarter, but you will be having that compensation from the benefits we are getting on the repricing of term deposits, which Vijay Anandh gave a figure of about INR 14,000 crore-INR 17,000 crore or something like that. So with that, taking both these things into account only, we are let's say, we said based on their expectation that our NIM will be by and large stable, may even have an upward bias, but will be in the band of ±10%.
Sure. Sir, just on the yield on the MSME portfolio, how would it have moved in the last nine months vis-à-vis March to December?
Average MSME?
Average yield on MSME?
MSME, we are maintaining at 9.5%. The yield is more or less the same. So there is nothing much materially. Broadly, no changes in the quarter, sir.
In March, also, it would have been at a similar level? In March?
By and large.
By and large, yes, same. Nothing.
±10-15 basis points.
10-15 bps. Nothing materially, not a big difference, sir.
Sure. Sir, on the standard asset provision of INR 22 crore this quarter, is it only linked to the increase in the balance sheet, or is there any other component here?
Only increase in the balance sheet.
Sure. And, sir, with the reduction in SMA, where do we stand on the ECL requirement, ECL provisions versus the requirements?
So, I mean, we have, in fact, discussed about this in the, I think, last quarter, or I think even on the second quarter, we discussed that at length. And we are seeing, let's say, negative bias even in that requirement in the last couple of hours because of the lower SMA numbers. You can probably get details from the, I think, last quarter or first quarter.
Last quarter.
Last quarter only. Yeah. Last quarter, we have discussed at length on these numbers.
Right. Sir, but as for the assessment as of 3Q end.
Yeah. And I also clearly said I will not be giving any exact number till other banks give the exact numbers. I stand to that statement. I will not be one of the first banks to give that. But what I can directionally, I have given everything possible with which you can make your own assessment. And after I declared that, there is still downward bias on that requirement, is what I can add.
Sure, sir. Sure. Thanks. Thanks a lot.
Thank you. The next question is from the line of Subramanian K from Itus Capital . Please go ahead.
Hi, sir. Good evening. Congrats on a good set of numbers. My first question is, what are the segments in retail facing competition, and how is the yield for each segment has changed after the rate cut?
So, sir, retail, our major focus is on LAP and home loans. And of course, we are leveraging our rural branches for affordable home loans. LAP, I think we are down by 20-25. It's what we used to do before. What advantage we are getting is our DSA sourcing, so-called third-party sourcing, is negligible. We don't go beyond 10%-15%. So that's giving us a benefit. So as we speak, the LAP is around 9.5%, 9.4%, 9.5%. Affordable in rural, we have been consistent basis the brand sourcing, and that's giving us a double-digit yield. So in home loans, we are always at around 8.8%-9%. That's been our core thing.
Just to add to Vijay Anandh's comments and also just to give you a right perspective to your question, after the rate cut in the, let's say, RBI rate cut, at industry level, we are not seeing any, let's say, equal or substantial reduction on the new files procured. So by and large, let's say, old rates are holding up because of, let's say, liquidity position in the overall industry. And we had a few weeks when we could even what do you call, negotiate increase in the rates also.
Okay. Thank you.
But overall speaking, yeah, on weighted average basis, there is some downward push, but it is not, let's say, exactly correlating with the 25 basis points rate cut. It is somewhere in between.
Okay. Got it. Yeah. My second question is on the deposits. So deposits are currently growing at a low-teens base. So going forward, how do you think this would be growing at a high base?
See, we have given adding the CD and other things; both have grown by about 21% is what you are seeing from on point-to-point basis. And for us, what we have seen is that it is not that every quarter the growth rate of deposits and growth rate of advances will match. There are fluctuations here and there. As explained by ED, Mr. Vijay Anandh, the focus is on for us is on retail term deposits and also granular CASA. And we don't have anything to currently suggest that, let's say, the deposit growth will not be matching with the credit growth or whatever it is. Both deposit and credit growth on overall business basis on what do you call, one-year full basis, as suggested by ED, Mr. Vijay Anandh, it will be in, let's say, in fact, earlier, we used to say it low to mid-teens. Now we are saying mid- to high-teens. Some amount of positive bias we are able to see.
And we don't get any threatening now to suggest that we will not be having sufficient deposit growth and all. That could be quarterly aberrations. To manage that liquidity position only, we have made trials on the Certificate of Deposits and understood the process and all and keeping it as a backup. One or two quarter liquidity management can be done by that. But overall growth rate of our business will be from the retail term deposits, granular CASA, and also on advances front, MSME, gold loan, and secured retail.
Oka Okay. Thank you, sir.
Thank you. The next question is from the line of Param Subramanian from Investec. Please go ahead.
Hi, sir. Good evening. Thanks for taking my question. Firstly, on the quarter-on-quarter OpEx growth, so there is no meaningful change in our channel sourcing or payments to DSAs or any such thing, right, because the quarter-on-quarter OpEx growth is up. And if not, what is driving this? Some color and how we should think about this going ahead. Yeah.
Very, very negligible for DSA payout, as I said a couple of minutes before. The DSA sourcing is hardly from 10%-12% for us. So there is no DSA.
Just to give you a perspective, in third quarter, there will be a provision for the Diwali bonus and things like that. Last year, if you look into our salary increase between Q2 and Q3, it was, let's say, depending upon where we give, it was between 178-196. About INR 18 crore growth was last year. It happened in the fourth quarter. And some amount of quarterly aberrations will be there based on when we give our, let's say, the variable pay and other things for these things. So there is an increase of about on salary between Q2 and Q3, about INR 6 crores -INR 7 crores, and about INR 30 crore increase in the overall operating expenditure.
In that, depreciation also increased from INR 25.7 crore to INR 29 crore, another INR 4 crore. Like that, in different items, another item basically on GST taxation payment. So it increased from INR 12.25 crore in the Q2 to INR 21 crore in the Q3, about INR 9 crore. So this INR 35 crore, INR 29 crore incremental cost, the breakup is coming from about Q2 to Q3, breakup of increased salaries about INR 3 crore -INR 4 crore. The GST payment by about INR 8 crore -INR 9 crore. And depreciation about INR 4 crore -INR 5 crore. Like that, it is getting segregated among multiple headcounts. But depending upon the situation, it is overall cost-to-income ratio, whatever we had indicated during the year beginning, it is holding up and feel, in fact, there is a small reduction in the overall cost-to-income ratio also.
Fair enough, sir. So largely, all business as usual. So nothing as.
Yeah. Nothing abnormal in the pattern between Q2 and Q3.
Okay. Fair enough. Sir, next, on the gold loans, if you can tell us what is the LTV on sourcing, roughly, and on book also?
At the onboarding time, it's around 65%. When you add the interest for the one-year period for all the non-agri gold loan, it comes to 72% or 73%.
72% including the interest. Okay.
Yes.
Okay. And on your book basis, on average, roughly, you would have an idea?
Now, after the increase in the gold price, it's worked out to around 55% to the overall portfolio.
Okay. So fair amount of equity is there. Okay. That part is clear. Thirdly, sir, how to think about growth going into FY 20 27? I mean, I heard in the opening commentary, we are clearly surpassing our normal trend line. This is our best growth since FY 2018, as you called out. But how to think about growth going into next year?
So we have given what do you call, a lot of sentences on this question asked. And you are asking a question for which we don't have any ready answers with us. But what you can infer is that earlier, we said we will be growing from low to mid-teens. So now we say mid to high-teens. So this is the sum and substance.
Okay. Fair enough. Congratulations on the quarter, sir. Thank you so much.
Thank you. Participants who wish to ask a question, please press star and one. Anyone who wishes to ask a question may press star and one now. The next question is from the line of Gaurav Jani from Prabhudas Lilladher . Please go ahead.
Thank you, sir, and congrats. Just one question on the gold book, right? You mentioned 30% of your total book is gold, right?
Yes.
Okay. And that is fixed rate. So what will be the tenure of these loans?
For agree, it may be in the range of 18-24 months. Whereas for non-agree, it's around 12 months.
Okay. So within 12 months, these can be repriced?
Yes.
Okay. That's it. Thanks.
Thank you. As there are no further questions from the participants, with that, I now hand the conference over to management for closing comments.
Thank you all for attending this conference. If you have any more questions, you can always contact Mr. Jayaraman or our ED, Mr. Vijay Anandh. As I explained to you, I have successfully completed my 59th quarter. So far, so good. Things have been working out well. I think going from here, on every parameter, you will start seeing improvement. With these few words, I once again thank you all for joining. Also thanks to Ambit for arranging this. Thank you all.
Thank you. Ladies and gentlemen, on behalf of Ambit Capital Pvt Ltd, that concludes this conference. Thank you for joining us. You may now disconnect your lines.