Ladies and gentlemen, good evening and welcome to the Home First Finance Company India Limited Q3 FY26 earnings conference call. 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 this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sunil Anjana, Head of Treasury and Investor Relations of Home First Finance Company India Limited. Thank you, and over to you, sir.
Thank you, Swapnali. Good evening, ladies and gentlemen. Welcome to Home First Finance Company's earnings conference call to discuss the financial results for the quarter ended December 31st, 2025. We hope you have had the chance to review our investor presentation and press release, both of which are available on our website and stock exchanges. As per our practice, we have also uploaded an Excel fact sheet containing historical data on our website for your easy reference. From the management, we have with us today Mr. Manoj Viswanathan, MD and CEO, Mr. Nutan Gaba Patwari, CFO. With that, I now invite Mr. Manoj Viswanathan to share his insights on overall performance. Over to you, sir.
Thank you, Sunil. Good evening, everyone, and thank you for joining us today. We are pleased to present the performance for Q3 FY26, which reflects a strong business momentum, robust profitability, along with stable asset quality, and with improving early delinquencies. Let me share the Q3 FY26 highlights. AUM growth remains strong, growing at 24.9% year-on-year and 5.3% quarter-on-quarter to reach INR 14,925 crores. In this quarter, we added two branches, with the latest additions comprising one in Karnataka and one in Madhya Pradesh. We have six to eight branches in the pipeline, and at least six branches will be added in Q4. Disbursements for the quarter stood at an all-time high of INR 1,318 crores, up 10.5% year-on-year and 2.2% quarter-on-quarter. Monthly disbursements crossed INR 500 crores for the first time in December 2025. Our origination yield continues to be healthy at 13.1%, with an 83% share of individual housing loans.
Asset quality matrices remained healthy and range-bound. We continue to focus on early buckets and resilience. 1+ DPD is at 5.3%, an improvement of 20 basis points on a quarter-on-quarter basis. 30+ DPD remained flat at 3.7%, with Stage 2 reducing by 10 basis points. Gross Stage 3 is at 2%. This has increased by 10 basis points quarter-on-quarter, and we are confident that this will improve going forward. As the early delinquencies have improved, overall collection efficiency has also improved. Moving to state-specific updates, starting with the largest state of Gujarat. In Q1, we had flagged off an anticipated impact of tariffs. However, we are pleased to report that Gujarat has successfully overcome this on account of the overall economic vibrancy of the state. We continue to witness strong growth and stable asset quality in Gujarat.
In Maharashtra, we have successfully re-established a strong growth trajectory, especially in the larger and more competitive markets of Mumbai and Pune. This impact can be seen in the strong AUM growth in this state. In Tamil Nadu, we faced both tariff-related delinquency issues as well as churn in the team. We have made good progress in stabilizing the team, and we expect a strong turnaround in the state in FY27. Regarding UP, we have adopted a calibrated approach. We are in the process of setting up a strong team in order to capitalize on the large potential in the state in the coming years. We can expect the state to be a large contributor for us from FY28 onwards. With respect to the other key states, Karnataka is emerging out of the Khata overhang and has clocked a strong growth this quarter.
Rajasthan, MP, AP, and Telangana continue to deliver growth as planned. Technology remains the backbone of our company, complemented by a focus on developing in-house solutions that drive innovations and operational efficiency. To enhance operational efficiency and reduce costs, we have developed an enterprise-grade document management system that enables secure, structured, and scalable document management. This system handles high volumes with robust security, tracking, and safe archival for optimal storage and performance. Digital adoption continues to be strong and a key area of our focus as we grow. 81% of our approvals in Q3 were facilitated via the account aggregator framework. More than 80% of our loans are digitally fulfilled through e-agreements and e-NACH mandates. 96% of our customers are registered on our mobile app, with 85% of the requests now raised digitally.
In addition, several AI pilots are in progress, and we expect these to deliver results in the coming years. During Q3, we received 70 additional green homes, taking the total to 310. The Pradhan Mantri Awas Yojana II scheme saw further traction. As of date, we have received around 4,500 customer applications. Of these, 103 customers have already received the first tranche of the subsidy, with an additional 15 cases approved where the subsidy will get credited shortly. We expect the scheme to pick up traction with increase in customer awareness and streamlining of the process. As we move toward FY27, we are positioned to achieve 25% AUM growth driven by enhanced distribution technology adoption supported by diversified funding and robust risk management. Lastly, I also wanted to address the topic of my continuity at Home First.
There could be some rumors and speculation on this topic, which I want to state are completely baseless. I would like to strongly reiterate that I do not have any plans or intent to move out of Home First. With that, I now hand it over to Nutan to take you through the financials in more detail. Over to you, Nutan.
Thank you, Manoj. Thank you for that. Let us start with the key financial metrics. Total interest income for the quarter stood at INR 429 crores, up by 20.5% YOY and 4.8% QOQ. Portfolio yields held constant at 13.4%. Disbursement yields for the quarter were at 13.1%. With proactive management, we were able to contract our cost of borrowing ex-co-lending by 10 basis points at 8%, supporting our ex-co-lending spread of 5.4%. Net interest margin for the quarter was at 6%, up from 5.4% in the previous quarter, supported by gearing, optimized liquidity position, and lower cost of borrowing. Provisions arising from the implementation of new labor code have been recorded, and these one-time expenses of INR 3.3 crores on account of gratuity provisions have impacted OPEX and earnings of Q3 FY26. Reported cost to income was 32%, up by 10 basis points on a QOQ basis.
Excluding the gratuity provision impact, it would have been 31%. Reported operating cost to asset was at 2.7% for the quarter. Excluding gratuity provision impact, this ratio stands at 2.6% for the quarter. We expect this ratio to remain range-bound within 2.6%-2.7% as we focus on growth and expansion. Our profit after tax increased to INR 140 crores, up by 44% YOY and 6.3% QOQ, with return of assets of 4% and return of equity of 13.7%. Excluding gratuity provision impact, the earnings growth in Q3 FY26 has improved by 46.6% YOY and 8.3% QOQ, with return on assets of 4.1% and return on equity of 13.9%. We also had a QIP of INR 1,250 crores earlier in April. Pre-money adjusted ROE for Q3 stands at 17.1%. Moving to provisions and asset quality, credit cost for Q3 stood at 40 basis points.
Provision on stage three has increased to 22% as of December from 21% in the previous quarter. We continue to adopt a conservative approach to provisioning, maintaining a provision overlay above ECL requirements. As of December 25, our total provision coverage is 40.4%. Moving to balance sheet and capital position, our funding profile continues to be well-diversified and cost-effective, reflecting our prudent financial management. 57% of the funding comes from public and private sector banks, 16% from NHB, 20% from assignment and co-lending, and balance from NCDs, ECB, and NBFCs. During Q3, we executed direct assignment transactions of INR 215 crores. Our disbursement under co-lending business increased to INR 101 crores for Q3, taking co-lending book to INR 585 crores, or 3.9% of the total AUM. Co-lending would continue to be an important part of our strategy to strengthen our ability to cater to higher ticket size segments.
We aim to take co-lending contribution to 10% of AUM as we scale. Coming to capital adequacy and liquidity, our capital adequacy ratio as of December 25 stands at 49% as compared to 48.4% in Q2. This increase in capital adequacy is due to lower cash held in mutual funds. Our net worth stands at INR 4,180 crore, up 73.6% YOY and 4.1% QOQ. Book value per share as of December is 402. With that, we conclude our opening remarks and are now happy to take your 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, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abhijit Tibdewal from Motilal Oswal Financial Services. Please go ahead.
Quarto. First of all, thank you so much for kind of reiterating towards the end of your opening remarks that you don't have any plans to move out of Home First. I think that is very, very reassuring. Like you said, I mean, we also kind of used to get questions around the continuity and your plans. First things first, thank you so much for that. Now kind of moving to business, very, very clearly, I think disbursements are starting to pick up. I have two questions here. First thing is, I mean, disbursements, while they have improved sequentially, maybe they're still a shade lower than what we were expecting, what we were penciling in. So what is it that is leading to this?
Is it a higher competitive intensity, or was it in the nature of, I would say, some weakness in asset quality that we were seeing until last quarter, which was making us go a little conservative on more businesses and disbursements? If you could explain that. And the other thing is, now that, I mean, asset quality looks like stabilizing, your one-plus has actually improved sequentially. 30-plus is now stable. And so to that end, are we getting a higher confidence to start accelerating the business from here? And you have already put out in the press release that next year we will look to grow at 25% year-over-year. For the fourth quarter, at least, what are the internal targets that you're working with?
So the target is to end the year at 25% AUM growth. And again, for the next year, we are given the guidance of 25% AUM growth on AUM. And as you rightly mentioned, yes, the first half of this year, there were certain issues that we were grappling with because of the environment. And as I've mentioned in my detailed statewide discussion, there are certain states where we were going through certain issues, etc., which are now gradually stabilizing, and which is the reason for the, you can say, renewed confidence in disbursal numbers. And some of the overhang which was there because of the MFI delinquency, etc., is also now coming to an end. It's kind of tapering off, as you can see, in overall market environment. So these are all the reasons why we are feeling more confident.
We are also seeing that uptake in numbers internally, in origination numbers, etc., which will eventually translate into disbursal. That is the reason we are feeling more confident about the disbursal numbers for Q4 as well as for next year.
Abhijit, have you completed the question?
Yeah, yeah. I was on mute. Thank you so much for bringing that up. I was just saying that this spillover of MFI space, like you mentioned, at least in affordability, is coming to an end. So just trying to understand in your detailed comments, you spoke about maybe 3, 4 states where we are seeing things improve. Gujarat, you mentioned the impact of tariffs, which was earlier anticipated. I think Gujarat has successfully managed it, Gujarat being one of our top states. So just trying to understand, I mean, at least this increase in bounce rates, that doesn't bother us, right? I mean, I think that is a little bit more of a behavioral problem, right, rather than of an asset quality issue.
Correct. So we are gradually seeing that divergence between bounce rates and actual collections. If you see last quarter, also the bounce rates were elevated, but then the collection was far better than the previous quarter. So to some extent, it is becoming more of a behavioral issue where customers have multiple accounts, so they end up missing the payment in one account, then they immediately transfer the payment from some other account. So we have been talking about this for the last couple of years, but I think now that is coming out very clearly. And so collection efficiency is kind of getting disconnected from the bounce rate itself.
Got it. Lastly, Manuj, I mean, on asset quality, again, given that you've seen some stability in this quarter, you think for Q, again, a seasonally strong quarter, and given where we are, you think we can start looking at an improvement in asset quality, even in stage three, from this quarter onwards?
Yes, we should see that in this quarter. Generally, Q4 is, in any case, good. But what gives us more confidence is that we managed to bring down our early stage delinquency also quite substantially this quarter. So that is giving, whereas if you see the same quarter last year, it actually had got elevated. So better collection efficiencies in Q3 is giving us the confidence that this thing, the stage three, also should start moving down.
Got it. Have you made any PLR changes in the last quarter or effective January?
Yes, effective from 1st January, we have reduced our PLR by 10 basis points, and we have passed on that benefit to customers from 1st of January.
Got it. That's all from my side. Thank you so much for taking all my questions, and I wish you and your team the very best.
Thank you.
Thank you. The next question is from the line of Shripal Doshi from IQURIS. Please go ahead.
Hi sir. Thank you for giving me the opportunity. My question was on the PLR front. So we've already taken 10 basis points, but given the competition in the market, and I think even the last quarter, the BT Out rate had increased, so are we planning or is there any plan to further take a rate cut in the quarter, or how is that aspect likely to shape up in the next, let's say, three to four months' time period?
So the PLR is a function of our own borrowing cost. So that will work in sequence. So as our borrowing cost comes off, we should be able to pass on the reduction to customers. So as of now, because this decision was actually taken in the middle of last quarter, so hence the board decided that 10 basis points, because based on the reduction that we have experienced, we have passed on 10 basis points to the customers. If there's further reduction, yes, the board will decide how much to pass on in the coming quarter. So the reduction in PLR is more, to be basically fair with the customer. It is not directly intended to reduce the BT out. BT outs generally happen when there is a huge difference in the rate which the customer is getting compared to what they're experiencing with us.
Minor reduction in PLR is not going to really materially impact the BT out rates.
Okay. So then in that case, to Nitin ma'am, what is the overall cost benefit that we've already seen from the 125 basis points rate cut that we have seen at systemic level? And what is it that is remaining?
So Shripal, I'll take you back to the overall benchmark-led rates that we have. So RepoLink rate is about 15%. External benchmark is about 30% in total. So to that extent, we've got the benefit. Out of the 125 basis points in total, we would have now gotten the benefit of about 40-50 basis points. As we all know, the credit deposit ratio of banks are what they are, and the MCLR of banks are just about starting to come off. So moving forward, we should expect a little bit of a reduction to maybe 5-10 basis points every quarter for the next two, three quarters is what we expect. And this is that we will have to go back to see how the rates are looking like, what we are getting, and eventually look at the PLR.
I would think that we will not do any more PLR in this quarter, which is Q4 of this year. Anything from here on will be next year only.
Got it. Got it. The other question, ma'am, again, was on the liability side only. So on the NHB borrowing, what is the sanction pool that we have there, and what is the borrowing rates that you're seeing from that avenue?
We got an approval this year of about INR 900 crore. We've actually put that in the liquidity position slide last quarter and this quarter also. In terms of pricing, pricing remains pretty comparable to the banks. We are now in that broad region of 7.5, and it's a good pool of liquidity for us, and we want to expand on that as well as the banks both.
Has there been a PLR cut at the NHB level as well or not yet?
There has been. Yes, there has been.
Okay. Okay. Got it. Thank you, ma'am. Thank you so much, and good luck for the next quarter. I'll come in the queue for more questions.
Yeah. Thank you, Shripal.
Thank you. The next question is from the line of Rajiv Mehta from Yes Securities. Please go ahead.
Yeah. Hi. Good evening. Congrats on good performance. So my first question is on Tamil Nadu. I think you spoke in the initial remarks that the team is in place. So when do you expect the productivity from the team to come through? And can you also comment about the competitive intensity impacting the volume recovery out there? And are you also budgeting that in FY27, disbursement in Tamil Nadu would outgrow that of the company?
I think the recovery should, it will recur and take probably another 2 quarters, Rajiv. So probably from Q2 of this year, we should expect the turnaround in Tamil Nadu, I mean, the coming years.
Okay. And Manuj, were there any underwriting changes done across markets because of the difficult macro that we saw? And can such changes be released, giving you better approval rates or helping you in recovering your disbursement volumes in FY27?
Not really. So underwriting changes, since it's a home loan product, generally the impact of your underwriting is visible after maybe 18-24 months. So when, and generally these things become more visible when there is some stress in the economy, like what we saw over the last 12-18 months. So when we realize that this is likely to happen to a specific cohort of customers, then generally you do not reverse those changes. I mean, to give you an example of, let us say, customers with, let's say, a certain type of bureau score are going to default in a certain situation. So then you would not reverse that going forward, I mean, unless there's something really, really changes in the environment. And these are ongoing changes.
As we keep discovering, let's say, new cohorts which may be defaulting, it can happen on both sides, positive as well as negative. When we realize there are certain cohorts which are behaving well, we kind of double down on those. Certain cohorts which are not doing well, we kind of restrict those profiles. This is an ongoing process, and there is no immediate knee-jerk reversal that we are going to carry on.
Understood. And the last thing is on the originating yield. The origination yield has actually come down by 20 basis points on Q basis. Now, is this largely a function of the incrementally doing higher tickets in our own books as well, or is it also the thought process that whatever decline we are seeing in the marginal cost of funds, we are concurrently passing it on the new lending?
Yeah. So it is more of the latter. So because the marginal cost of funds has dropped by about 30-40 basis points, so that is likely to reflect in new origination as well.
So broadly, our book rates should kind of stabilize, I mean, around 5.2%-5.4%, and you would want to kind of prioritize growth and push volumes for any incremental benefits?
Yeah. We have always maintained that the book spreads will be 5-5.20 is what we have always maintained.
Yeah. That's a long-term number. Yeah.
Anything more than that, we will basically follow a fair practice of passing that on to the customer.
Got it. Thank you so much, Rajiv.
Thank you, Rajiv.
Thank you. We have the next question from the line of Raghav from Ambit Capital. Please go ahead.
Hey, hi. Thanks for the opportunity and congrats on this quarter. I just have two questions. One, I wanted to ask what will be your disbursement target for FY27? I'm estimating somewhere around INR 6400 crore-INR 6500 crore. Is that a fair estimate? That's about 18% higher versus FY26.
Raghav, we are not giving a specific number for disbursement for next year because there are multiple levers by which we can reach our AUM growth target. We are not giving a specific disbursement number.
But you would have done your budgeting or some sort of numbers, right, for FY27? So is that a fair estimate of around INR 6,500 crore for next year, or do you think that?
Yeah. Raghav, when you do the budgeting, there are multiple scenarios, and multiple scenarios involving a lot of business factors. There could be more than 20 factors contributing to the AUM final growth number. We want to keep those variables flexible and under control. What we want to guide the market is to a AUM number and then deliver that number. So that's how we are thinking.
Fair enough. When reducing the repayment rates, be under consideration. Say for example, if you want to deliver a 25% growth on the AUM front, then do you also have some strategies around reducing your repayment rates next year?
Yes. It will be one of those many variables, yes.
Understood. So fair to say that what you're looking at is probably the FY25 repayment rate, the way that we calculate, should be lower compared to FY26, right? That's a fair assumption to make.
I can separately run the model discussion with you, but like I said, we want to stick to the AUM guidance of 25%.
Understood. Then, besides the standard PLR cut, I think you've partly answered that. Any further PLR cuts will be considered only from next quarter onwards, if at all, right? Do you sense that there will be a requirement for you to cut the PLR given the competitive intensity in the affordable home loan segment, the moderation in volume growth? In this light, do you think that you'll be required to take a PLR cut further?
Because a lot of the business is now becoming you have to react much faster. Therefore, it will be very difficult to say what could be reality on the ground 4, 6, 8 months down the line. And hence, the whole SPED guidance of 5.25, the whole AUM growth guidance as well, we want to stick to that and then let the rest of the interplaying forces be with the internal teams and then deliver on the guidance. So today, it will be very hard to say what could competitive pressure look like in July or in October and how we would choose to react to that.
Understood. On another aspect, see, I saw your employee number that's down quarter-on-quarter. Is that because of high attrition that's continuing for the larger industry as well as for you? What are you doing to control that? That's my last question.
Yeah. So attrition has remained in that broad 35% range. What we are seeing, yes, you're right, the overall number quarter-on-quarter is down. We actually have about 250 people who are joining us. It's just got delayed between December and January. So we expect that number should increase in March when you see the numbers next time.
Understood. And sorry, one more related question to this. See, generally, out of the 1,700 crore sorry, 1,700 employees that you have, there would be different cohorts wherein there is going to be a set of people which is highly productive, and then there is another set of people which is not as productive. Is it usually the ones which are less productive getting weeded out or are leaving to join other companies, and therefore you're left with the more productive ones? And that's something that's going to be an input to your AUM growth or disbursement growth next year. Is that the right way to think about this or not really?
Yeah. That's how we think about it. The aim is to retain the more productive salespeople. So all our efforts in terms of reward recognition, etc., work towards that, retaining the more productive people. But some of them also do alright because of various other reasons. Some of them want to go to a larger brand or they want to take up a more senior role or some other kind of role, etc. So those factors are also at play. But yeah, of course, internally, the efforts are on to maintain the more, I mean, retain the more productive employees.
Understood. Thanks a lot, and that was all from my side. Thanks.
Thank you. We have the next question from the line of Aditya Pal from Asian Markets Securities. Please go ahead.
Hello. Aditya?
Yes. Aditya, how are you?
I'm good. All well. Thank you so much and good performance.
Thank you.
Just a couple of questions to you and Manuj. So over the last couple of quarters, we've gone from saying 27%-30% AUM growth to 26, and now today we are saying 25% odd AUM growth for 2026 as well as 2027. Now, this is the guidance I agree, and the branch additions are also not keeping up the pace to what we had said a couple of quarters back. What are we seeing on the ground? As in, is there any change because now the cycle has turned somewhat, the current cycle? So do you see any green shoots now going forward, maybe say exiting December?
So let me just straight away take the question on the guidance that you referred to. So the guidance we had given was INR 20,000 crore by March 2027. With 25% growth next year, we will hit about INR 19,600-INR 19,700 crore. So essentially, the overall impact in a medium term is about INR 300 crore of AUM. And we all know how the credit cycle has been in the last 12 months. So it would not be very fair to say that we are dropping numbers quarter-on-quarter. I think we need to look at numbers in the medium term and whether the business is geared to take on challenges and do the right things when the cycle is difficult. So I think that's how I would like to address the first part of your question. The second part, you talked about the branch additions.
Branch additions, again, take place on a regular basis. Yes, this particular quarter, we had 2 branch additions, but come March, we are expecting 6-8 branch additions. So again, it's not a linear number. Aditya, I will request you to consider that.
The last part, I think you were talking about green shoots. Yes, I think the aim is to convey that, yes, we are seeing those green shoots. We have got over some of the challenges that we had in some of the markets, and we are seeing green shoots. We are seeing, I mean, we are feeling more positive about our origination as well as disbursal numbers for the coming quarters. Definitely want to put it out there and convey that.
Understood. Understood. Thank you so much for this detail. So the other part is asset quality. So I definitely understand that last quarter, we tightened our credit filters. And even after tightening our credit filters, which would have definitely led to higher ejection rates, we posted this good disbursement growth. Now, because of our tightening of credit filters, do you see that this is the peak in terms of 1+ DPD as well as the GNPA?
Yes. 1+ DPD already has turned around, and the GNPA also should start moving down in the coming quarters.
Perfect. Perfect. Wishing you and the team all the very best. Again, great set of performance. Congratulations.
Thank you. Thank you.
Thank you. We have the next question from the line of Prithviraj Patil from Invest Tech. Please go ahead.
Yeah. Hi. Thanks for the opportunity. I just wanted one clarification. The DPD, we are given the cost of borrowing X of full lending. I just wanted to know what that metric is and how do you calculate?
So we give two lines to three. One is the total cost of borrowing, which includes the total bank borrowings, the assignment transactions, the co-lending transactions. Because the optical spread in a co-lending book is low, we started giving the cost of borrowing excluding co-lending and the spread excluding co-lending as well. So what we basically do for that INR 530 crore pool, whatever the cost of borrowing is, we take that out and recompute the cost of borrowing, and we put it in a separate line for full disclosure.
Thank you. We have the next question from the line of Devyash Gupta from L&T PMS. Please go ahead.
Hello. Yeah. I'm audible?
Yes.
Yeah. Hey, hi Nutan and Manuj. A couple of data keeping questions. What will be our LAP AUM mix and what would be the NPA for the two respective line of businesses?
Sorry. Your question is LAP AUM mix 15%. What is your second question?
The NPA mix between the HL NPA and LAP NPA?
LAP will be about 1.4. HL will be about slightly above 2 just because it's a higher book.
Sorry. Higher book as in?
6 is higher.
Sorry. I didn't get it. Can you repeat?
So LAP basically, to answer your question, LAP NPA will be slightly lower than the HL NPA.
Got it. Understood. And the second question was any early read on the CLM 1? How is it impacting us or the customer experience and any from our industry as well as Home First specific?
You are referring to the new co-lending guidelines, if I'm right?
Yeah. Yeah.
The co-lending guidelines have become effective 1st January 2026. We are in this transition mode as we speak. Some banks are ahead. Some banks are taking some time. In my view, we will take another two weeks to fully settle the process, but it is a matter of transition, and we will rather be done with it quickly. As we speak today, we are still undergoing conversations with some banks. We do expect that one out of the three banks, we will do a transaction this month as well.
Does it mean that, let's say, at least the period, at least in the first month, our co-lending disbursal is a bit slower, and we expect to ramp it up in the next two months?
Yeah. But I also have to add that some variations on a month-to-month basis are normal.
Got it. Understood. Understood. This is helpful. The next question was that, if I remember, last con call only, we said that UP, there are four or five big cities, and Mota Mota, the market is not as big. But in the opening remarks, we mentioned that we expect UP to we expect to make UP a big chunk by big business by FY28. So has there been a change in strategy or product or anything? Some light, if you can shed on that?
No. So UP was part of our plan. If you see, 2 years ago, when we started our expansion into North, UP was part of our plan. But some of our early experience in UP was not so good, and hence, we kind of decided to take a more careful approach. In terms of size of the market, it is large. And yes, as you are mentioning, it is right now, there are three or four large cities which have a larger amount of business, and then it is more fragmented. But however, that will not deter us from going into UP. It is one of our key markets which we have for future.
It's just that by the time we kind of put together the team and create the foundation for expansion to UP, it could take us another few quarters, which is why we have mentioned in the call that in FY28, it would start becoming a large contributor.
Got it. Just two more questions. First is, I think, in the deck, we mentioned that our average CIBIL is around 747. This is origination at the time of origination or after? Because once someone takes a home loan, then CIBIL score anyways goes up.
Correct. So that time of origination, at the time of origination.
Got it. Understood. And the last question was that the increase in GNPA, let's say, looking at the stage three absolute growth year-on-year, has been faster than the increase in the AUM, which is also therefore reflecting in the higher NPA percentage. Now, given that, let's say, some green shoots and, let's say, overall, let's say, the pain being done, how should we expect, let's say, in the next few quarters, this ratio? Should we expect GNPA to come down with some flowbacks, or is it just that the growth of the book will more or less make the denominator big, and therefore, the percentage will come down?
No, both will happen. The absolute value should also come down. Because of the denominator going up, there will be some impact on that as well.
Got it. Understood. And is it through any specific collection effort or just generally reduction in size, and therefore people are expected to pay back and expecting it to revert? Or we are doing much more for collections? Or anything specific more for collections?
No. In some markets where delinquencies are elevated, obviously, there is a greater collection effort. But for us, collection is the entire team is tasked on collection. So it's kind of part and parcel of the day-to-day activity for every branch, every employee in the branches. And also, to some extent, because of the, you can say, green shoots in the economy and the overhang of all this delinquency going away, some customers also kind of proactively come forward to settle their accounts and repay and come back to normal.
Understood. Understood. Got it. I'll join back the queue for any further questions. Thank you and all the best.
Thank you.
Thank you. We have the next question from the line of Chintan Shah from ICICI Securities. Please go ahead.
Hello. Yeah. Thank you for the opportunity. So I had a question on this AUM growth. So on the disbursements, we have clocked around INR 500 crore disbursements per month. So I just wanted to understand, but in terms of the tariff-impacted states, which was Tamil Nadu and Gujarat, so had we tightened our underwriting filters, or had we done any changes to our underwriting policy due to the problem related to tariffs? And now, have we loosened the filters? Also, what is the kind of what is actually driving this INR 500 crores and makes us confident that this will be sustainable? Yeah.
No. So as I mentioned, the tightening of filters is an ongoing process. It's just that when there is an event in the environment, economy not doing well, some of these trends emerge much faster. And it helps us to take those decisions on which segments to tighten and so on, which we did over the last few quarters. So the growth is not coming from relaxing those norms. The growth is coming from increased distribution and maybe just a bit of better momentum in the environment. So not from relaxing of credit filters.
Sure. Sure. So in case, but are we also planning to relax those filters? And if we do, then could it further accelerate the growth then?
No. We are not looking to relax those credit filters because the credit filters, as I mentioned, the impact of the credit filter comes only after 18-24 months. So we have already realized that a certain cohort will not behave, then there is no, it doesn't make sense to kind of relax the criteria on that cohort.
Sure. Sure. And do we have any limit on a maximum exposure to a single state, any internal ceiling or limit?
No. At the moment, we have not set any limit for a particular state because if you see our market share in each state, it is still in low single digits, which is why we have not set any cap for any state. So in any state where we are present, there is obviously other player. There are obviously other players who have much larger share, including banks. So which is why we have not, at this point, put any cap on any state.
Sure. One last question. In future or in the coming years, do we intend to further reduce ticket size at any point of time to just get into a higher yielding segment like INR 6-8 lakh ticket size, or this is the current ticket size will only continue?
No. So our proposal always has been that as the country grows and incomes grow in most of these states, the availability of housing in these lower ticket sizes is shrinking. So we have always said that every year, the ticket sizes will grow by 3%-5% as a natural progression. And so we will continue on that path. We are not going into lower ticket sizes.
Sure. Got it. Got it. Thank you and all the very best for the future quarter. Thank you.
Thank you. We have the next question from the line of Mitesh Jain from Invest Tech. Please go ahead.
Thanks for the opportunity and thanks for the clarification on rumors around management changes. First question is on management change only that to Manuj, that you will be continuing as an executive role as MD and CEO going forward as well, right?
Absolutely.
Thank you. Thank you for that. Second is how is the approval rate has changed, let's say, last year to this year? Is there a drop in approval rates that we have witnessed?
Not significantly because the way we operate is that if any credit screens which have to be implemented, new credit screens have to be implemented, we convey that to the front-end teams. A lot of that, you can say, elimination happens in the front-end itself. By the time the proposal comes for underwriting, it's already gone through those screens. At the head office level, there is no significant change in approval levels.
Sure. What are the plans to add for branch addition in FY27, and which are the states which you are looking to add branches?
So we have about 6-8 branches in pipeline. It's kind of spread across several states. So I think there are a couple of branches coming up in the north, Uttarakhand, Delhi. I mean, I think they are basically split across the various states. So I think 1 or 2 branches in across 4 or 5 states.
Yes. I think that is for Q4. Any planned addition for FY27?
No. FY27, again, we are looking to add about 25-30 branches. It will, again, follow the same path where we are concentrating. So MP will be one of the states. MP, Andhra Pradesh, Madhya Pradesh, Tamil Nadu, Maharashtra. I think these would be front runners next year in terms of branch additions.
Sure. UP will pick up in FY 2028 is the plan.
That's right. That's right.
Lastly, a data-keeping question on what is the count of active connectors for the quarter?
Count of active connectors is around 3,600.
3,600. Okay. That's it from my side. Thank you.
Thank you, Mitesh.
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants in the conference call, we request you to kindly limit your questions to two per participant. If you have a follow-up question, please rejoin the queue again. We have the next question from the line of Maulik Chaudhary from Monarch Networth Capital Limited. Please go ahead.
Hello, sir. Am I audible?
Yes.
Yes.
I just have one broad question. There was an article in Economic Times four days ago stating that sales in affordable housing have declined. Just wanted to know your take on the overall loan demand momentum.
Yeah. So the affordable housing, we'll have to kind of narrow down the definition to understand where it is shrinking and where it is growing. So as we have always said, the lower ticket sizes in affordable housing. So if you look at ticket sizes less than INR 10 lakh, there are markets where that is shrinking. And the growth has moved to the ticket sizes between INR 10 lakh-INR 40 lakh, which is a natural progression of country progressing, incomes increasing, and so on. But of course, different states are in different stages of this evolution. There are some states where they are already at average ticket size of INR 15 lakh or INR 20 lakh+. In some states, there are still properties available between INR 10 lakh-INR 15 lakh. So that is the statewise there are differences.
But yes, if you were to look at an overall commentary, the ticket sizes below INR 10 lakh are shrinking. That's because of the increase in incomes in most of the pockets in the country. So I think in order to keep track of affordable housing, we will have to index the ticket size by about 3%-5% every year to account for inflation.
Okay. Okay. Okay. Thank you. Thank you so much. That is all.
Thank you.
Thank you.
Thank you. We have the next question from the line of Bunty Chawla from ASK Wealth. Please go ahead.
Thank you, sir. Thank you for giving me the opportunity. Actually, I have joined late. If I am repeating, sorry for that. What is the situation in Tamil Nadu as such as we have seen? One of your peers has said that there has been some issue from the ordinance point of view. How you are seeing the situation currently and any changes in terms of disbursement and all we have taken there?
Yes. So the ordinance issue is several months old now. And of course, it had some temporary impact on collections. Besides various other issues which Tamil Nadu was going through, besides including tariffs or some overhang of microfinance, delinquency, etc. But as I mentioned in my opening speech, we have stabilized the team, which we had a challenge with last year. And now, gradually, we are building the portfolio over there. So we should start seeing good traction in Tamil Nadu from quarter two of FY27.
Okay. So during this quarter, how was the growth in Tamil Nadu, if you can say, stabilizing down, up, something like that?
It's still growing. Tamil Nadu is still growing, but obviously not at a pace that it used to grow earlier. So growth has been very muted.
Okay. So now situation has been under control, means has changed from last year?
That is right. That is right. From last year, there is, you can say, substantial difference in terms of at least in terms of stabilizing the teams.
Okay. Any change in terms of focusing on different ticket size or in different areas in Tamil Nadu where the situation is much better? Is it a way thought process, or is it completely on that now the team is stable, now we can grow again?
Yeah. Now that the team is stable, we are looking to, again, reestablish our growth. Ticket sizes, in any case, we were not focusing too much on the lower ticket sizes below INR 10 lakhs. So largely, the focus will be on core affordable housing the way we see it, which is between INR 10-INR 40 lakhs.
Okay. Okay. Okay. That was very helpful, sir. Thank you. Thank you very much.
Thank you. We have the next question from the line of Maran from Money Stories Asset Management. Please go ahead.
Yeah. So hi, team. I have two questions. The first question is, is it that recently the bounce rates and Gross NPAs and Net NPAs have marginally increased? So I wanted to understand what is the core reason for that. And my second question is regarding the loan book and the borrowing percentage of fixed and floating population. So because in this falling interest rate environment, I wanted to understand if the yield of the borrowing versus the yield of the loan book, is it an advantageous question or not for us?
So bounce rate, yeah, if you see last 2, 3, 4 quarters, they have moved up by about 1%-1.5%. But we have not. At least last quarter, we had the collection efficiency was much better. So that is why we are slowly starting to see divergence in the bounce rate versus the actual collection efficiency. So customers have other accounts where the money is parked, etc. So they end up bouncing the payment, but then they pay off immediately. So bounce rate is not. It's no longer a strong reflection of how the collection is going to go in that particular month. As far as fixed versus floating is concerned, our entire book is floating rate. We don't have fixed rate loans for the customers.
Got it. Okay. So how will it affect in terms of borrowing and lending?
On the borrowing side also, we have everything we have floating rate borrowing. It's a back-to-back floating one.
Okay. Got it. Thank you.
Thank you. The next question is from the line of Siraj Khan from Ascendancy Capital. Please go ahead.
Hi, team. Thank you for the question. Just a clarification. Can you call out the login growth, also the number of logins that you have clocked during this quarter? Because there has been a little bit of a noise. I mean, yes, you've said that the affordable housing piece is starting to come out of the woods. But what was the login growth if that number could be called out?
Login growth.
Origination unit. Yes. Origination has also been growing. So we don't normally mention that number in the discussions. But yeah, I mean, so ultimately, the disbursal, there is a certain disbursal rate. If 100 cases get logged in or originated, there is a certain disbursal rate, which is kind of constant. So it's a function of the disbursal goes up, that means origination also has gone up.
Okay. So if you could give me the funnel, then what will be the login to disbursal funnel? So if 100 were logged in, what would be the disbursal rate? Just to get a...
80% is the disbursal rate, to be clear.
Sorry?
80% is the disbursal rate, disbursal to origination. We are not talking about logins. So we are talking about origination, but the number of loans that get sanctioned or approved.
Understood. Understood. Understood. And the 250 number of employees that has been mentioned that are going to join in Q4, which particular cohort is this? Mostly sales, collection? What is this? What I'm trying to understand is over the last three, four quarters, what we've seen is the per-employee disbursement number has been around the INR 30 million mark. If the number will add up, that will get impacted. But is the INR 30 million number the peak number, or is there aspirationally something higher that we target for core employee disbursement for us?
Yeah. The aim is always to improve on that number. It has been static at least last 5-6 quarters. Of course, last 5-6 quarters have also been difficult from an environment perspective. Definitely, I think if there are tailwinds and the environment improves, that number can also improve. As of now, we are budgeting on the basis of the 30 million number.
Understood. Understood. And just a final quick one. With respect to the growth that we are seeing in MP, I mean, which is one of our fastest-growing states, Tamil Nadu is coming out of, as you are saying, from the MFI issue, and other certain states are also recovering from, say, for Karnataka coming out of the E-Khata thing. The 25% that you're looking at is like a conservative piece because what I want to understand is in the growth wave, are we entering towards the trough of the wave at the bottom of the wave, or we are coming out of the trough and going up towards the growth wave? I'm trying to understand how the swing might happen.
We are basically seeing we are giving a projection or a guidance based on how we are seeing it today. Of course, if let's say 6 months down the line, there is more bullishness in the market and there is a greater momentum, then of course, we will revise our guidance at that point of time.
Understood. Understood. And so quick one. We have seen approximately a 2.1% drop in our approximately 3% drop in our less than INR 15 lakh portfolio on ticket size basis. It has correspondingly increased in the more than INR 20 lakh. So is this more so driven by on the ground, or part of it is down to the natural inflation? Because the 25% growth rate that we are targeting, I think you said 5% would be from ATS. Then what will be the balance 20% coming from in respect to this whole?
See, we are open to customers coming in all of these segments, right? We are not declining customers from any of these segments. So this is more of a natural phenomenon that we are observing in the market. So as you see across the years, the lower ticket sizes, the proportions are reducing, and it's increasing in the higher in the medium or higher ticket sizes. So it's more of a natural phenomenon of what is coming through the door. We don't have any particular policy which says that below a certain ticket size, you'll decline the loan, etc., etc. So it is, like I mentioned, natural progression. So in some states, incomes have risen, so customers are aspiring for larger ticket size or larger homes. So it's just what is coming through the door.
Understood. So I was not saying that you are declining, but you are not categorically pushing for a higher ticket size. It is just whatever is on the merit. Even though if it is higher ticket size, you are going with it.
Absolutely. So we are open to see. We obviously don't. We are not competitive in the extremely high ticket sizes where banks are active. So we don't actively pursue those ticket sizes. But what is broadly, let's say if you go by the RBI definition of affordable housing, which is all the way up to INR 55 lakhs in metros, we are open to customers in that entire range, right? So customers who are facing a difficulty in getting loans from larger lenders is whom we are facilitating. So we are open to all of those customers. And so typically, now the customers are coming from slightly higher ticket sizes. The lower ticket sizes, the market is shrinking.
Understood. Just I'll jump back into Q, but your outlook on the yields, how do you see the yields moving? Thank you very much.
So yields, as we mentioned, we should be able to maintain the spreads between 5%-5.2%. So I mean, of course, it will move depending upon the rates in the market. But spreads, we should be able to maintain between 5% and 5.2%.
Oh, okay. Okay.
Thank you. A reminder to all to restrict your questions to two per participant. If you have a follow-up question, please rejoin the Q again. We have the next question from the line of Shubhankar Gupta from Equitree Capital. Please go ahead.
Hi. Am I audible?
Yes.
Yeah. Sure. So I'll continue. So I think two or three questions from my end. I'll make it quick. Just want to understand, MP actually has gained a lot of share, nearing 10% of overall gross loan book. So just want to understand what is enabling this sort of growth in MP? And is it a model which we can learn from and apply to, let's say, states like UP?
Sorry. Which state did you refer to? We could not hear you properly. MP, you mean?
Yes. MP has gone to around 10% now, 9.6%-9.7%.
Yes. See, this is when we are operating in multiple states, we always have certain growth drivers. Certain markets are going through some challenges. I mean, so which is the whole advantage of diversification? Which is why we are present in 13 states. Other than Gujarat, and most of the states are kind of equal contributors to our business. This is the advantage of the diversification. We find that certain states, there is more industrialization or urbanization happening at a rapid pace. Incomes are going up rapidly. Overall, law and order situation is improving more rapidly. The demand for affordable housing also kind of goes up fast. It also, to some extent, depends upon the team. You may have a stronger team in one state versus another state. The things go better in a particular state.
So I mean, there will be a few states which are hiring this year. Some state is hiring next year. So that's the whole advantage of diversification.
Thank you.
Was there actually a greater point? I just want to understand. So one is external elements which are not in our control. I was talking more from the internal elements which, okay, there are stronger teams which are brought in the state or some other factors which have contributed to, let's say, this state gaining more than others was my key question.
Yeah. But what we have realized over time is that each state has its own characteristics. So when we try to kind of cut and paste something that has happened in one state into another state, it never works.
Achcha. Okay. Okay. Got it. Well, that's fair. That's fair. That's helpful. Second question is on the lead generation strategy. I saw that builder ecosystem has gained a bit there. I just wanted to understand, is there some cohorting within the Pareto of lead generation, which is connectors? And how do you strategically look at cohorting within this and then kind of using it to increase lead generation?
So our aim is to have a very granular connector network. When we are analyzing connectors, our main focus is to drive to particular two metrics, which is that the number of connectors which are handled by a relationship manager, can we drive that number up? The number of active connectors. These are two metrics that we drive actively. We are not really interested in trying to maximize the business from a connector because then that leads to aggregation and a different model, which is an aggregation model. We try to increase the number of connectors which are handled by relationship managers, the capacity of a relationship manager to handle more connectors, and the number of active connectors, overall number of active connectors.
What will be the key, let's say, steps or acquisition strategies to increase the number of active connectors or even connectors?
So one is just addition of the denominator itself, which is just adding the total number of connectors. And the second part is the activation. So activation is the process of identifying which connector can be who is dormant. So somebody who has given us a loan or referred a loan to us in the past but has gone dormant. So how do we activate that person? What has stopped them from referring cases later on? So that is the whole science behind it.
Well, so actually, I'm getting you are saying that there is a whole funnel for connectors, acquisition, activation, and probably retention also. What I'm asking is, within the acquisition funnel or the bucket, cohorting, what are the strategies or the ways you're looking to acquire these connectors? Is it digital mediums, physical mediums, and within that also, is there further segmentation? What is acting well here?
The acquisition is largely physical. So each relationship manager is tasked with acquiring connectors. That is something that we have found to be most effective at this stage. At some point, if there is a digital or centralized process, we will adopt that. I mean, some pilots are going on. But at the moment, physical acquisition by the relationship manager is the most active method of getting connectors.
Got it. One last question for you, sir. So there is a change in the early delinquencies, as mentioned. Just want to understand, what are the major steps you have taken over the last two, three quarters which have led to this change in early delinquencies?
Steps to see. I mean, when the environment is stuck, we basically try to increase the collection intensity. We increase the step of the monitoring at a relationship manager level, number of visits, and so on and so forth. So some of those steps have paid off. And improvement is also a reflection of how the environment is easing off. I mean, our efforts kind of yes, our efforts were elevated for a couple of quarters, but then the environment easing off combined with our efforts has helped to reduce the early delinquency.
All right. Thank you so much, sir. Thank you for answering so patiently.
Thank you.
Thank you.
Thank you. We have the next question from the line of Ravi Naredi from Naredi Investments. Please go ahead.
Thank you very much for giving me the opportunity. Mr. Manoj and Nutan Gaba, your entire team is doing fantastic work. And your confirmation, you will remain with the company, will play a new confidence in the company. Sir, my only question is there. Can you give a figure in December 2025 quarter, how much money we write off completely in auction of house property to conversion? And can you give this figure for nine months also?
Yeah. So Ravi ji, for the quarter of December, we have not done any write-off, which is a complete write-off. For the first two quarters, we have done. My sense is it's in the range of INR 4 crores-INR 5 crores, but allow me a minute, and I will confirm that number to you.
Okay.
3.3 crores in quarter one. INR 10 crores total.
Total is?
Yeah. Total INR 10 crore per year.
Yeah. Okay. Okay. Thank you very much, and all the best.
Thank you, Ravi ji.
Thank you. We have the next question from the line of Rohitesh from an individual investor. Please go ahead.
Hello?
Yes.
Yes, sir.
We can hear you.
Sir, what are the disbursal trend in January month?
Sir, January is still not closed.
January is.
Current trend, 220 days trend?
Strong, sir.
Okay. Thank you. Are there any specific states which are contributing for the NP and GNPA?
Yes. So as we discussed in the past, Tamil Nadu has been one of the more difficult states for us last year. Other than that, at a state level, we don't have any challenges. There would be obviously specific branches where there are challenges in some states. But as a whole, we faced a challenge last year in Tamil Nadu.
No, this quarter only. GNPAs are increased from last quarter. In this quarter, which states are having a higher stress?
Sir, the stress continues in Tamil Nadu. The stress that we had, which was building up, so the higher delinquency, some of it is coming from Tamil Nadu only.
Is the stress due to tariff issues?
Yes.
Yes. Tariff issues have also contributed to it.
Okay. That's it from my side.
Thank you.
Thank you.
Thank you. We have the next question from the line of Devyansh Gupta from Latent PMS. Please go ahead.
Hi. Thanks for allowing me another question. Just one question I had. Let me know if my understanding is not correct. Typically, home loans will have a higher LTV compared to a LAP. Given our NPAs are higher in home loans, let's say, even historically, as well as, let's say, as the stock right now, the simple mathematical assumption would be that the stage 3 LGD or ECL number should go up.
Yes. Yes. But what we will have to do is not look at a single year. We will have to look at a one-cycle trend, which is at least seven years. And when you look at that, ultimately, it depends on what the equity of the customer is. So it's not a very mathematical formula on a one-year basis or a one-quarter basis.
Also, within housing loans, there are different products which are at different LTVs. So LTVs are high in certain apartment products, but then when it comes to resale or self-construction, the LTVs are actually low. I mean, they could be as low as 50% itself.
Yep. Let's say if you are doing a PPC plot purchase plus construction on plot. But my understanding was that we had more or less exited from the apartment-led credit, right? We were not doing apartment-led.
The entire Gujarat is largely apartment-led only.
Got it. So then understood. So basically, there is no change in ECL model or any assumptions which might be leading. It's just purely driven by various factors of the loan characteristics. Is that a fair understanding?
All of that gets reflected in the ECL model.
Absolutely.
The changes in the portfolio, the changes in the LGDs from time to time, all of it gets reflected in the ECL model.
Got it. Just one last question. What would be a GNPA as a GNP on a managed book? Because the GNP that we report is more on the on-book GNPA.
1.8.
0.8.
1.8. 1.8.
1.8. Yeah. 1.8, which means that then it's a fair assumption that mostly home loans are taken away in DA. And also, probably more creamier or better-profile customers are in the managed.
It's a bit of a vintage. It's a vintage issue also. So what happens is the lower vintages go off in the assignment, and higher vintages remain with us. So that difference also comes through.
Got it. You were saying fresh vintages go away.
Yeah.
The old vintage. Over a period of time, though, it will equalize only. You know what? Jitna aapke paas hai, you are also doling it away.
Correct. And it will take some time because the assignment started after COVID. So probably it should get normalized in maybe next two years.
Got it. And then ideally, then we should see a 1.8 kind of number. Is that the correct understanding or is 1.8 will become true?
At some point, there should be a convergence. I mean, there will still be some difference because of the quality of the book. Because by definition, the assignment book is taken away after a certain seasoning, right? So in that seasoning, the quality is already checked in that seasoning, and then the book is then assigned. So that difference will still remain. But yes, there will be a greater convergence in a couple of years.
Got it. Understood. Thank you.
Thank you. We have the next follow-up question from Siraj Khan from Ascendancy Capital. Please go ahead.
Thank you for the follow-up. Can you just give me a breakdown of the AUM with respect to apartment? How much is apartment? How much is P+C? How much is self-construction? Would that be possible to provide?
Sure. Sure. Sure. We can give you that. So apartments on AUM is around 16%, right? Self-construction is around 26%. And yeah, anything else you wanted to know?
Plot plus construction and major loans.
Plot plus construction will be part of the self-construction group, which is 26%. Yeah.
Only plot or only construction?
Only plot will be very small. It is about 1% to put.
Okay. And just a quick one on the BT out rate. So QOQ, we can see that the number has fallen. I mean, last quarter, it was 7.6. Now it is 6.6. What do you look at the number with respect to the BT out overall runoff? Because what I've seen from the ground, speaking with some of the people on the ground, some of the affordable housing and some housing finance companies are doing 12% or sub-12% rates in this quarter and in parts of and a little bit in the last end of the last quarter. So I mean, the yield outlook question was purely because of that. Because if you're seeing less than INR 15 lakh or less than INR 20 lakh customers being offered 12, maybe even sub-12 rates, then that creates a question mark with respect to the whole spread and the entire RO region.
Yeah. So this is something that we have been also flagging off since last several quarters, that there are the balance transfers are fairly aggressive even in the affordable segment now. And the rates being offered by various affordable housing players are also fairly aggressive. It's something that we had flagged off. However, we have also, you can say, reinforced or renewed our efforts for retention in order to prevent balance transfers. So hopefully, I mean, at least in this quarter, it has yielded some results, and we have managed to reduce the balance transfers. So this record will be on to speak and counsel the customers and reduce the balance transfers.
Steady-state BT out rate that you feel safe for 2026, 2027?
Yeah. Our aim is to kind of continue this success that we have had in this quarter. If the effort that we have put in this quarter continues to give us results, then it will, yes, stabilize around 6-6.5.
Okay. Finally, an aspirational overall thing. We've seen some of our peers slowing down post the recent INR 20,000 crore mark. You're saying that you'll be reaching the INR 20,000 crore mark in a couple of years' time. Yes, because the base is higher, the growth rate is moderate. But what do you think is a sustainable steady-state growth for you and what you are looking? A longer-term frame, this is the question. Where do you see the book and what is a sustainable growth rate and a sustainable ROA that you see? Just a big picture question.
Yes. So as we had mentioned, the INR 20,000 crore number by March 2027. And as we discussed earlier in the call, we may only miss it by maybe one or two months. Similarly, our, you can say, guidance or our vision or projection for 2030 is INR 35,000 crores. So that is where we want to get to. That will be in the region of around 20%-23% AUM growth year-on-year if we have to get to INR 35,000 crores.
Understood. Understood. Thank you very much. I mean, this is great. A couple of suggestions on the facts sheet. I mean, if you could start giving the statistics with respect to those numbers of the sanction ratios and etc. I mean, it's a very useful number that we can really, as analysts, see. If you could add that number into the facts sheet, it would be great.
A number of approvals?
Yes. The approval ratio, like logic to sanction or sanction to disbursement, that ratio would be really helpful. Thank you very much.
Thank you.
Thank you, sir.
Thank you. We have the next question from the line of Aditya Pal from Asian Markets Securities. Please go ahead.
Just wanted to understand the qualitative aspects of 1+DPD as well as GNPA. So you answered a few data points to previous participants. The nature of these customers, is there any commonality between these customers that are not paying? It can be either vintage. It can be income profile. It can be state level.
See, most of the customers default because of some unforeseen event in the family. Okay. It could be largely medical events, accidents, some major illness. So that is a big contributor. Another contributor is, of course, losses in business, loss of job, and so on. So these are the key contributors to the default. And if this is combined with, let us say, some weakness in the property value, that's where the NPA and losses take place. If the property is strong and there is a lot of equity for the customer in the property, then they typically either sell the property or settle and square off the loan. But if there is a weakness in the property, as well as there is obviously the weakness in the income, then we end up with NPA. So that's the.
So I think that aspect, but that is something which is business as usual. But my question more to do with, if you look at from a one-year basis, obviously, there has been a macroeconomic issue, and we all knew that the country went through a rough economic or credit patch over the last 18-24 months, over the last 15-18 months. But is there, as in the company for Home First, now our 1+DPD over the last 12 months went from 4.5% in FY25 Q1 to 5.5% last quarter and 5.3% this quarter. Who are these customers, and what is it that the economy or the customer profile that needs to turn for you to come back to say closer to a 5% or sub-5% rate that we were doing historically? And same color for NPA.
NPA, there has been a 30 basis points jump over the last 12 months. I think a large part of that chunk would be Tamil Nadu, if I'm not wrong. You can correct me if my understanding is wrong. So that is what I want to understand. I completely agree on that there would be family issues. There would be medical emergencies. There would be a decrease in house prices. But those are business as usual, and that is something that all the affordable housing finance across cycles will go through. But this cycle was a bit different. So that is why I wanted to know the color.
So what will change things is basically one important thing is easy availability of credit, right? So which is important for a customer in the lower income segments. So typically, when there is a stress in the family, like somebody has lost the job or there is a sudden medical expense that has come up, they need immediate cash flow from some other source. I mean, if you are expecting them to continue to pay the home loan EMI, then in order to, you can say, attend to their other problem, they will have to get immediate cash flow from somewhere. So which was earlier available because there were a lot of companies providing quick personal loans and so on. But that dried up over the last 12-18 months.
As a result of which, some of these customers were kind of left high and dry, you can say. So when there is a sudden crisis, they don't have anywhere to turn, anywhere to go to. So they had to then stop their home loan payment and kind of dip into that as a last resort for their emergency needs. So that is something that when it changes, and we know that it has changed over the last 3-4 months,
customers find it a little easier to kind of tide over that phase of 2-3 months when there is a liquidity problem for them. So that is one of the important things that can change in the economy. I mean, what can obviously change at a macro level is obviously there is more job creation. There is higher income or wage inflation or income inflation. So that then helps the customer to create a financial cushion for a difficult situation.
Understood. Understood. And out of this INR 250 crore of gross NPA that we have, how much would be because of Tamil Nadu or for that matter, because of tariff-related stress? We already commented that we are seeing a good turnaround in Gujarat. So now Tamil Nadu and the city in Tamil Nadu, district in Tamil Nadu is the only pinpoint to pull.
Yeah. So see, Tamil Nadu is as a percentage of the AUM, it is about 12%. So the ratio of NPA will be slightly higher, probably around 15%-18% of the NPA cohort.
Understood.
Yeah. And at least in some pockets, it's largely because of the tariffs. So for example, Tirupur has a much higher NPA ratio because the economy there has been under stress.
Understood. Understood. Thank you so much and wishing you all the very best again.
Thank you, Aditya.
Thank you. Thank you.
Thank you very much. As there are no further questions from the participants, that concludes the question and answer session. I now hand the conference over to Mr. Manoj Viswanathan for the closing comments. Thank you and over to you, sir.
Thank you, everyone, for participating and engaging in the call. We hope we have been able to answer the questions to your satisfaction. In case you want to reach out for further questions, you can always reach out to Sunil Anjana or write to us at investor.relations@homefirstindia.com. Thank you so much.
Thank you very much. On behalf of Home First Finance Company India Limited, that concludes this conference. Thank you for joining with us today. I'm Yumina. Disconnect your line.