Earnings Call: Q2 2022

Oct 22, 2021

Ladies and gentlemen, good day, and welcome to the Q2 FY 'twenty two Earnings Conference Call of LIC Housing Finance, hosted by Axis Capital Limited. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Praveen Agarwal from AXIS Capital. Ladies and gentlemen, over to you, sir. Good day. Thank you, Stephen. Good morning, everyone, and we welcome the management of LIC On this call, we have with us Mr. Viswanath Gaur, MD and CEO and Mr. Suneet Kothree, our CFO, to take us over through the results. Mr. Gaur, we request you to share your key highlights for the quarter gone by and thereafter we'll open the floor for Q and A. Over to you, Mr. Gaur. Thank you, Praveen. Thank you, thank you. Very good morning to everyone of you, and I welcome to this post earnings investor call of LIC Housing Finance Limited. As you are aware, LHSFL declared the Q2 FY 'twenty two results yesterday. Before Beginning, I wish you and your near and dear ones a very, very good health and safety With gradual improvement in the pandemic situation and increased pace of vaccinations, It is heartening to note that normalcy is returning to our lives, which is also reflective of the pickup in business activities and the economic growth. With the greater relaxation of restrictions, sentiments have also improved very significantly. It is in this backdrop that our business was conducted In the Q2 of FY 'twenty two, the key highlights of this quarterly results are as follows: The total revenue from operations INR 4,708 against INR 4,969 crores for the corresponding quarter of the previous year with a decline of 5.25 percent. Outstanding loan portfolio stood at INR 2,37,663 crores against INR 2,000,000,349 crores as on 30th September 2020. It is expecting a growth of 11%, out of which individual home loans have reported growth of 15%, And now it comprises a little more than 79% of the total portfolio. It is up from 76% a year ago. The total disbursement for the quarter was INR 16,000 INR. Out of that, The disbursements in the individual home loans were INR 14,330 crores against INR 10,373 crores with a growth of 38%. Disbursements in project loans were INR 353 crores. The net interest income for the quarter was at INR 11.73 crores as against INR 12.38 crores. Net interest margins for the Q2 FY 2022 stood at 2% as against 2.2% for the Q1 of FY 2022. Profit before Tax for the quarter stood at INR308.95 crores as against INR 119.26 crores. Profit after tax for the quarter stood at INR247.86 crores as against INR790.90 crores for the same period previous year. Loan disbursements during the quarter were extremely robust with the total disbursement at INR 16,110 crores, recording a growth of 29%. Individual Home Loans 2 continued its strong growth and posted INR INR 14,330 crores against INR 10,370 crores in the Q2 of FY 2021, a growth of 38%. Growth was uniformly spread across all geographies and across both large and smaller centers, especially Type 2, Type 3. It is extremely encouraging to note that we have achieved 132% of the pre COVID levels in terms of our 2 good disbursements when we compare it with Q2 of 'nineteen, 'twenty. On the portfolio growth front, The total portfolio recorded growth of 11%, and now it stands at INR 2,370,660 crores. With increased focus on the home loan segment, the growth required in the home loan portfolio was at 15% for the quarter. In terms of asset quality, Stage 3 exposure at default as on 30 September 2021 stood at 5.14 percent as against 5.93% as on 30 June 2021. In our earlier Interaction with you after Q1 results, we have assured our stakeholders that we strongly believe that the peak has been marked and subsequently asset quality would improve. It is very much heartening to note that Stage 3 assets have declined by over INR 1500 crores from Q1 of FY 2022 levels on account of strong effort put in by all the concerned. We have now a very strong confidence and conviction that The coming quarters will show greater improvements. This quarter, despite reduction in Stage 3 assets, The provisions have been increased to reflect higher PCR. Total provisions as on 30 September 2021 stood at INR 5,354.9 crores, reflecting a provisioning covering ratio of INR 43.72 on C3. It is up almost 12% by 9.72% as of June 2021. OTR during this quarter stood at INR 2,141 crores, lower than Q1 of INR 2,350 crores. We have been very closely focusing on the collection efficiency. That has also shown improvement and now stands at 99% for regular accounts, The highest since the pandemic broke out in March 2020. On the funding side, we have witnessed reduction in the overall cost of funds by 12 basis points During the Q2 FY 2022, despite a hardening in the bond yields during the same period, incremental cost of funds has come down by 13 basis points and stood at 4.9% for Q2 of FY 2022. Net interest margins for the quarter stood at 2% As again, it's 2.2% over the last quarter, the decline being attributable due to income reversals on OTR accounts, The incremental spreads continued to remain at healthy levels and stood at over 230 basis points during the 6 months ended 30th September. During this quarter, the company completed the deferral issue of equity to its promoters, LIC of India, amounting to INR 2,335 crores. This will add to the Tier 1 capital of the company. During the quarter, the company also tied up with the India Post and Payment Bank for distribution of its home loan products. With this brief introduction, I would like to invite you for your queries. Thank you very much. Thank you very much. We will now begin the question and answer session. The first question is from the line of Abhijit Debrewal from Muthila L Oswal. Please go ahead. Yes, sir. Thank you for taking my question. Sir, I have two questions. The first one is on your NIBs. So you reported a 20 digit points Q2 decline. And sir also suggested that these were income reversals in OTR accounts. So firstly, if you can kind of briefly explain Why these income reversals on OTR accounts? What were the nature of, I would, these restructuring, which Warrant income reverses and what was the quantum of income reverses that we have taken during the quarter? Can you come up with your second query so we can address both of them together? Yes, sir. Sir, maybe in the next 2 weeks, I mean, Now, I mean, I understand we've kind of discussed during the last earnings call as well that employee expenses will go up, But what is the nature or what is the run rate of employee expenses that we can kind of expect going ahead? And lastly, on your Your provision during the quarter, while we highlight that our Stage 3 numbers have actually kind of improved on the Q2 basis. But what is it that kind of warrants increase in provision cover? I understand we used to run a high provision cover During the past quarter, but sir, why I asked this question is, I mean, during every earnings call, when we kind of ask you, I mean, we typically get to understand that based on your assessment, at that point in time, the provisions were adequate. But what has changed, I mean, during this quarter that, I mean, you think that, I mean, there is a need to improve the PCR While asset quality has actually improved or should we think of it like this that because we are still working on that Perficient Equity Capital raise, we were not able to take kind of take provisions and which was taken during this quarter. No, one thing just I would like to I think your questions were 2, 3 questions were there. As far as the provisioning is concerned, I'd like to clarify you that Because every quarter, of course, last year or last quarter, if you see the provisions were higher side, probably around more than INR 800 crores. This quarter, it is slightly less to INR 600 crores. Here, what happened now, the OTRs, especially where our OTR is nearly 3.5%, almost 12. It is more than 3% of our loan book size, if you look into that. And mostly now in this quarter, it has happened on the retail segment. So nearly INR 200 crores were added this year after this quarter compared to earlier quarter. It has come down. But overall, the provisioning of 3% and 10% minimum required to be made On the whole, the OTR and moreover, the Stage 3 OTR were taken care of full. So what happened, we are adequately provided for, So no need to have any, what do you call, future, any some sort of, what do you call, uncertainty. So our now NPAs now, we are very comfortable that compared to last Quarter, the actually, what we call the NPA amounts have come down by more than INR 1,000,000,000 crores if you look at in the retail segment itself. And in the project, mainly in the developer side, our loan book is only 6% and odd. So there what happened more or less not much of addition to the NPS update. So we are very comfortable now as far as the what you call the asset quality is concerned. Last time also, we told you very clearly that the worst was behind us. The similar way now it has been proved that, yes, the recovery now we have improved. And then our teams are still under, what you call, improvising our even all the levels at our collection efficiency also. Now if you look at the regular cases where our collection efficiency is more than 99% also. So I'm very sure that the provisions what we have made are adequate enough so that what happened, the provision current ratio also will be more than 43% now. And then as far as The other two items are concerned. I think CFO will tell you. Yes. Yes, Abhishek, actually, Two things. Of course, what our investor mentioned about the provisioning also, if you see there has been a secular improvement in the GNPA, but Of course, there has been an increase in this provisioning cover. So as a result of that, around INR 600 crores of provision has happened. The other thing is that your query was regarding the margins. See, actually margins, if you look at it, there has been a reversal of interest. Now what happened, I'll explain to you. This at the end of September, The total amount of loans under one time restructuring 1 and one time restructuring 2 put together is around INR 7,300 crores. Now for that INR 7,300 crores OTR, because of the OTR given, there is a recalculation of the IRR and the effective interest rate, Because of this, there has to be an interest reversal which happened. This is a notional entry that has happened because of the OTR impact, And that is the reason why and the impact of it to the tune of around INR 250 crores for the quarter ended September. The corresponding figure as of end of June with INR 1300 crores of OTR was around INR 116 crores. So around 135 crores of extra reversal of interest has happened in the Q2 itself. Now what is the impact of it on the margins? For every INR 100 crores of loss of net interest income, the impact on NIM is to the tune of around to 17 basis points. So for INR 135 crores of such reversal, the impact on the net interest margin in terms of basis points will be Clearly in the range of around 22 basis points, 23 basis points. What is also to be noted, very important thing is that sequentially, there has been an improvement in spreads. As OMD mentioned in the beginning of the discussion that there has been a reduction in the cost of funds both on the incremental side and both on the cumulative side by around 12 to 13 basis points between 1st July 30th September despite the fact that Interest rates have been hardening in the system. Sequentially, there is a drop in the interest cost, which has resulted in an improvement in spreads. But because of this reversal of interest income, that is the reason why there is A drop in the reported net interest margins. 3rd question regarding expenses. Your third question was regarding the expenses. I think expenses, there has been a couple of onetime which has happened in Q1 last quarter that we had explained because of the payment of arrears. This time also there is an impact of actuarial valuation on Retire benefits were at INR 45, INR 46 crores. So if you net it off, then the normal increment in The other expenses should be in the range of around 15% to 20%. That should be an ideal run rate. Okay, sir. This is useful. And so because this interest income reversal on the OTR book is notional in nature, Would you say that because interest kind of continues to accrue, you will maybe see some interest income write back in the coming quarters? As and when these accounts come out of OTR. Right, sir. Thank you. And sir, lastly, if you could just And more important to note is that Now the OTR has ended? Yes, yes. So when these accounts come out of OTR, we can expect some income write back from these OTR accounts. Correct, correct. And so lastly, if you could share color on the segmental asset quality, which you kind of typically shared during the earnings call? Yes. I will read out the comparatives. Our MD will just give the comparatives. We'll request everybody to note so that we don't have to exit it again. As far as the position under the end of September is concerned, IHL segment, Phase 3 comes to 2.25%. And in the non housing commercial, it is 14.83%. So non housing individual, it is 9.76%. So this is as far as individual total is concerned. Then in the project that is the developer book size, there the NPA levels sorry, the stage fee is at 23.94. Then overall, if you see our total NPA gross NPA compared to last quarter From 5.93, it has come down to 5.14 now. So, Vijish, to suggest Developer book resolutions were not there, ma'am. With the developer book, maybe small, 1 or 2, they're not having much impact. All right. Thank you so much. I will come back in the question. Please confirm. Thank you. The next question is from the line of Aditya Jain from Citigroup. Please go ahead. Thank you. Could you tell us the current classification of the research rate loans? So the total outstanding research rate loans, about BRL 7,300. Where are they classified now in Stage 1, 2 or 3? See, most of it is either in stage 1 or stage 2. Because when we are doing OCR, Sir, the condition of OTR is that they have to be standard assets. Got it. And is it okay It's assumed that it's largely in Phase 1 as you said in the last quarter or is there a sizable amount that's reached to? Yes. Got it. Okay. And so like you've done in this quarter in Stage 3, increasing the coverage, is there a view on the Stage 2 assets That the coverage there, is it enough? Or would you take another chance to keep that up also to create more security cushion? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] No, but there the in the stage 2, the provisioning provided is adequate considering the underlying valuation, it is adequate. Got it. Thank you. Thank you. The next question is from the line of Zohann from Point 72. Please go ahead. Hey, thanks so much for the opportunity. Sorry, just on the yield as a new part, It seems like Q on Q decline is about 35 bps. So Increase in interest reversal this quarter is INR 185 crores, right, which caused about 20 20 bps of that decline. So why any in terms of like commission and also What accounts for the remaining 15 bps also of decline g on q? No, I think, Zon, what I I understand from your observation that this quarter the NIM is 2%. What it was in June was around 2.20%. And what I mentioned in my earlier discussion is that for 100 and 35 crores of interest income reversal, the impact is around 22 to 23 basis points. So that actually takes us notionally adding back to more than last what it was in the June quarter. Now Now what is to be also noted is that the total impact of reversals In totality, it's INR 250 crores. The increment is INR 139 crores. So if you add back a INR 250 crores notionally, then the Actually, it says much higher. Right. Got it. I missed that. Right. And just on the home loan deal side, Do you not give us any color on what's our current average home loan yield versus because I think our new rate is at 6 As far as the rate is concerned now, the 6.6% is the entry level water offering really going on well. In the year, volumes are picking up very well in the last quarter. You can see good growth rate is there. In the disbursements also, I think we have shown more than nearly already where is the pre COVID levels as far as the quarter is concerned. And that way, good traction is there across. And then this 6.6 is also due because it is into the, what we call, civil scoring. So our actually selection will be very, very Sound enough to take care of the 6.6 is what we are offering only to the selected customers, that to the best customers Based on a credit score. Okay. So got it. I understand. So lastly is on this coverage, For the additional coverage, do you think are we comfortable with current level of coverage or we are given the capital raise, we are More comfortable to continue to increase the coverage going forward. And if that's the case, do you have like a target or ballpark number The storage, I think, now it is full it is very much adequate what this level going by the valuations. It is I think earlier was only 34,000,000,000, now it has come to 43%. Almost a 9% increase is there. And mainly, it will take care fully what do I know at this level. I think we from our side, it is almost all fully provided for The NPS also you see now they have reduced. Another favorable point is over the last quarter, the Volume of even nonperforming assets also have come down by nearly INR1500 crores that also added to this. It's a very good positive trend. So further, Progyny may not be much on the higher side. Got it. Understood. So we have you couldn't cover right now. Sorry, just a follow-up. Sorry to come back to the leading question. Maybe I'm missing something. I don't really understand this well, but If I look at the increasing OTR, so last quarter, I think 1 percentage point also of the book. And this quarter, we have about 80 bps of increase in OTR. All we have left would be just this quarter. Why was the income reversal this quarter be higher than the last quarter ago? The reason is that the total the income reversal is on the total outstanding OTR, which was which has increased by 50%. So earlier, the interest was only for 3 months on INR 5,300 crores. Now it is for the 6 months, And for the 6 months, it is INR 7,300 crores. I see. Got it. So that means The pressure of the income reversal may not increase quarter on quarter going forward since we are already kind of Our restructuring is peak, but the income reversal, absolute amount will still be there going forward. Is that the right way to understand? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] No, the OTR scheme has now ended. No more additions will be there, one thing. Secondly, the OTR things also may be Coming out of that, because we are now what we call we are after this, all the borrowers, so that what happens, people can avail, then who are now actually the income levels are better off. Now what we call, people are getting salaries in time. But definitely, when our book is actually, our portfolio is mostly on the salaried structure, we are very, very sure that Many borrowers will come out of the OTR in this quarter, certainly because they are in that stage 2, even stage 3 also definitely come to stage 1. That way there will be an improvement. I think we don't see much of the multiple requirement of the reversal on the higher side. Got it. I understand. So just to understand perfectly, so as far as the account is In the OTR, it will still have income reversal. But once they start to come out of the OTR, I. E. OTR start to decline, Then the income results during that quarter will start to decline. It's a long way to understand it. Yes, I think, see what we mentioned is that there will be no further addition to the OTR pool. It is actually coming down. Thank you so much. Thank you. Thank you. The next question is from the line of Subranjum Misra from Systematics. Please go ahead. Yes. So just want to understand this with the interest of our fleet. I think we can only do interest of ourselves as per entire Stage 3, most of our OPR is in stage 1 and stage 2? No, no, no, no. That is not correct. That is not correct. Whenever there is a restructuring which happens, It changes the term, the total tenor. So the moment that happens, the IRR, effective interest rate on the IRR also changes. And when that happens, obviously, there is a derecognition of the income which has to happen to reflect that change. Wait, sir. But as for Indes That is Indes only. I'm talking of Indes only. Okay. Okay. This has happened not because of a stage 3 impact, but it has happened because of the fact that the effective interest rate has changed Because of the elongation of the term. Got it. Got it, sir. And sir, what is the state of the book Between the top seven cities and other cities, sir? See, if you look at the our portfolio also mostly even the traction now where we have In the last quarter, nearly 50% more than 50% is coming from the Tier 2 Type 3. So if you look at the metro cities and all So the number of offices and the split up book is That you will find in the presentation. If you want, I can just repeat the number. You want the number of offices? Yes, one is not very clear. Just giving you there are 85 offices in the top seven cities and 197 offices in the Other cities, top seven cities are the Mumbai Metropolitan, the NCR, Pune, Chennai, Hyderabad, Kolkata. And add to that, our recent tie up with IPBB also will make our reach far, far better in Thai 2, Thai 3 especially. What I'm trying to understand is what is the split of the book, what the offices in top 7 cities and the other It's coming to 50. You see, our book size, if you look at geographically also, Top 7 cities account for nearly 58%. If you look at the present year, what happened now, 43% of the business has come from Top 7 Cities and 53% has come from the others. And just one clarification from the notes that there are 2 48 accounts which come from It's in OPR 1, which have been when we start to do OPR 2. In fact, Actually, the average ticket size there is roughly around 72 lakhs, which means that the average ticket size in Otilac 2 would be around 35 lakhs, sir. What is the difference here, sir? Why is the 55 higher in OPR 1 and why is it lower in OPR 2 6? See, actually, if you look at the way the OPR has happened, Majority of the corporate account OTRs have happened in the Q4 of last year and the Q1 of this year. Whereas in the Q2, the large ticket project loan cases were very, very small, hardly some 4, 5 cases have come, Whereas good amount of retail loans have come for OTR in Q2. In the Andalandhi, OTR 2. Right. Sure, sir. Thank you. The next question is from the line of Kunal Mehra from MLP. Please go ahead. Good afternoon, gentlemen. Thank you for the opportunity. One question, given the incredible step up in OTR2, would you be willing to share with us How the LDR 2 and 1 book split between the individual housing, commercial on individual non See, I have we have got the details of the individual and the project. I do not have the IH individual Home loans, non housing, corporate and other breakdown. Just to give you if you want quarter wise, I can give you quarter wise. 1st quarter, about INR 2,070 crores was under the builder loan category And about INR 275 crores was at the retail category, which comprised mostly of The non housing corporate and the non housing individual and home loans, these are the 3 categories there. In the second quarter, deposit loan was only INR 62 crores, Whereas INR 2,078 crores, that is INR 2,078 crores was in the individual category comprised Of all the 3 subsegments, that is NHC, non housing commercial NHI, non housing individual and IHL, which is individual home loans. And that's really helpful. Thank you. And if I was to qualitatively ask you about this 2078 prospect In the individuals between the non housing, commercial non housing individual and individual housing, directionally, Which one would be the largest contributor, is it? And the reason I'll be transparent. The reason I'm asking is I'm trying to handicap the odds That move forward and we have another one of these slip on account of the nature of the underlying asset versus the stress they're Experiencing in the real economy. This is mainly due to the retail only. All our 2,078 course, what you have mentioned now, the OTR 2 The last quarter is only from the retail shipment. The ticket size may be around 25 to 30 lakhs, that's the average size that we pay. Got it. And therefore, sir, given that the dominant cost share is retail, it is 25 lakhs, it is arguably non salaried retail. When you reach No, no, no, not salary. What I would say It will be salary retail also. Our loan book, if you see, in the individual housing loan also, more than 75% of our individual house loans are all salary class only Because all our civil based all things are there. So and then moreover, our teams are working to bring out these people also out of OTR. So with the necessity of this, some concessions given. And then going forward, actually, these numbers will come out of the OTR, Sadat will give a lot of Philip. If you look into the collection efficiency also now, for the regular account, salary is 99%. The best we have seen is the, I think you have briefed our level like that. So I just to give some a little bit more Your query is that probably you would like to know why there has been so much of people going for OTR 2. Now let us look at the backdrop on which the OTR II was announced. It was at the time of the second wave of the COVID. At that point in time, it's something which we had shared earlier also. At certain times, it is from the customer, individual customer or even for the Commercial customers, what is more important at that point in time is to preserve cash. So as and when an OTR offer has Come from the government that through the regulator, they have opted for it. Now what is the probability that they will come out? If you look at The earlier year last year, the monetary year, now 80% plus of people who had opted for monetary amount of at that point in time I have come back on full recovery, I mean, on full updated mode. So as and when the external situation improves And it has already started improving. More and more people generally come out of these kind of OTRs also Even if you look at the Q1 Q2 moment also, actually those account which are there in the moratorium in Q1 and they have come out. Some of them have come out and upgraded even 1,000,000,000. That is also positive. Got it. And of those accounts that came out Between Q1, Q2 from the OTR, was there any accompanying write back of the notional income reversal or Look, just now, as of now, this is the if you look at the statutory disclosures that we have made, total amount of Exposure there was out of 700,398, right now, because the OTR 2 was mostly invoked towards the end of the quarter, There has not been much scope for people to come out of the OTR2. As of 30th September only, the implementation was going on. Now progressively, We will see the outstanding as compared to the invocations coming down. Got it. It will happen mostly in the individual segment, it will Definitely, there is a positive on that. Okay. Thank you again, gentlemen. Appreciate your time and patience. Thank you. Thank you. Before we take the next question, a reminder to the participants, please limit your questions to 1 per participant. Should you have any follow-up, may be requested to rejoin the queue. The next question is from the line of Kunal Shah from ICICI Securities. Please go ahead. Yes. Hi. So the question is with respect to the stage 2 breakdown. Last time you highlighted in the corporate developer it was INR 2,400 crores out of INR 12,000 crores. So how has been the momentum stage to between the corporate and the non corporate? And also if you can share the individual non housing breakup of INR 35,000 crores, how it has moved this quarter? See, first of all, the non housing individual and non housing commercial. In June, The non housing commercial total was INR 14,300 crores and non housing individual was INR 20,501 crores. So it was around INR 35,000 crores 34,800 crores. As of September, The non housing commercial is INR 13,600 crores, so it has come down by INR 700 crores, whereas the non housing individual has remained more or less at that level, Slight increase of INR 200 crores, INR 20,500 crores. And total, if you There has been a decline in the non housing commercial and non housing renewal between June September. Then stage 2 breakup. Stage 2 breakup for I'll give you comparable stage. First of all, is that in stage 1 In the non housing commercial, more or less, it has remained the same. In Stage 3, there has been a decline, as we mentioned in the beginning. And Stage 2 also, there has been a decline From 13,000 sorry, INR 13.62 crores, it has come now to INR 12.92 crores in Stage 2. I'm talking June to September figure. And from INR 19.27 crores, it has come down to INR 1507 crores. So there is a INR 400,000,000 reduction in the stage 2 also and consequent increase in stage 1. Sorry, sorry. Stage 2, there was a decrease? Somehow, yes, it was decreased by INR 400 crores in the non housing individuals. Non housing individual? Yes. Okay. And the corporate amount is the amount is Non housing corporate also, There has been a reduction by almost INR 70, INR 80 crores in Stage 2 itself. Okay. So that's it, on the balance sheet. Yes. So Stage 3 and Stage 2 both have come down in both these categories. Okay. And just again to clarify in terms of this restructuring, so not the provisioning on this restructuring, we can say through environment. I missed out on the project. Project also Stage 2 has been reduced. Stage, as we mentioned, has come down marginally. Stage 2 has come down from INR 2,490 crores to INR 1553 crores and stage 1 will be INR 9,500 crores to A little more than INR10,000 crores. Perfect. So INR2490 is becoming INR1500 in Stage 2 on the corporate developer? Yes. Okay. Okay. And overall provision on the restructure is rooted to impairment allowance even in this quarter? Yes. As you the disclosure is Yes. Yes. Okay. Good. It is that, as we mentioned last couple of times, it is an appropriation to now Yes. Okay. Thanks. Thank you. The The next question is from the line of Dhaulagadda from DSP Mutual Fund. Please go ahead. Sorry, two questions. 1, Sunita, can you just give me absolute stage 3 for NSE, NHI and IHL? Just I just wanted to reconcile the number And we have given the beginning of the call, I think. The percentage is absolutely free, if possible. You want us to repeat the same numbers? No, no, the absolute number. I think you gave the percentage. I'm just trying to reconcile the absolute For non housing, indulgent, non housing commercial and indulgent home. Page 3, from 2.6, it has come down to 2.25. Absolutely, absolutely positive. I'll take it offline. That's okay. Yes, Because you've already given all these numbers so many times. Yes. And the second question was regarding margins. So just to Summarize, you're saying that next quarter, I think most of the accounts are out of OTR. We should on an underlying issue We didn't say it is out of OTR. We said that there is no further OPR scheme available. Okay. So on margins from next quarter, Yes, you will still bring 1, yes. So it was 2.22, 2.23 based on the interest income reversal. So how should one think about underlying margins next quarter? The underlying margin is more what is more important is to see the trend in spreads because that is what will be reflective of the overall Efficiency in profitability. Spreads have increased sequentially. There could be some notional entries of reversal of interest, but if you see the operating spreads have improved sequentially. Right. So my question is when should we see margins to normalize to like pre-four-twenty one levels, if you do? Pre, sorry? Pre March 21 levels. So when should margin is the underlying question? So we've seen a couple of quarters where OTR has Correct. Before that, whatever was the margins, say around in the range of around $2,500,000,000 to $2,350,000,000 that was the ballpark range which we had been holding before this implementation of the OTR. So we should, in a couple of quarters, certainly see those levels come back. Understood. Okay. Thank you. And there will be stability in spreads and improvement in spreads to the extent of the interest rate movements, but overall, there will be stability of spreads. Understood. Thanks all the best. Thank you. Thank you. The next question is from the line of Nishant Chawatay from Kotak Securities. Please go ahead. So just to take it up from the earlier question, what you're saying is that this INR250 crores is going to be ongoing impact When these loans come out of OCR? No, it will come down, see, because outstanding loan of the OPRs are also going to come down slowly. Okay. Okay. There are additional lumpy there. Our model is closed now. What the add is now That's right. So INR 250 crores is the base impact that we can see this quarter. This is the highest. Probably Next quarter, it goes down to It will start reducing. Yes, that's right. And when do you think this kind of completely gets over? Maybe in a couple of quarters. It will significantly recede for the next couple of quarters. So on the expenses side, of the staff expenses of around INR 147 crores, is there a one off over there? There is a one off around INR 47 crores, which has happened because of the actual evaluation of the retiree benefits. Total of INR 47 crores is the amount which is there. And INR 100 crores, the establishment expenses, I think that Between 90,000,000 to 100,000,000 will be the ballpark. Perfect. Perfect. Thank you very much and all the best. Thank you. Thank you. The next question is from the line of Viral Shah from Credit Suisse. Please go ahead. Hi. So just a follow-up on the previous question. In fact, actually more of a clarity there. So you are saying this reversal impact in your P and I, which is impacting the margins, is something which will continue every quarter, But the quantum will be there? It will keep on coming down, yes. Okay. Understood. All other questions are asked. Thank you. The next question is from the line of Piran Engineer from CLSA. Please go ahead. Yes. Hi. Thanks for taking my question. I just wanted to understand why would the effective yield change because of the elongation of the term of the loan in restructuring? Because of the change in IRR. No, no. But sir, if you're extending it by 3, 6 months, wouldn't you charge the same IRR for that IRR's impact will be completely different. India's reporting is based on effective interest rate. No, I get that. But in that sense, if you are extending, let's say, for 3 months for an OTR, It would not be an interest free extension of 3 months, would it? So it is not interest free, but there is no cash flow, And there is an extension of term. So the term which was 17 years will become 19 years, the term which was 5 years will become 7 years like that. So it's sort of a loss of interest on interest in a way because of those no cash flow? Yes, correct. Okay. And just to clarify, I know this has been asked many times. We reversed INR135 crores this quarter. INR115 crores was the sum of 4Q and 1Q? In 1Q, there was nothing almost because the OTR started actually towards the end of 1Q. Okay, okay. What about then the interest write backs from the reduction in NPL? That would have actually positively helped our In Indes, it doesn't matter. No, sir. Sir, we will not get into so much of technical discussion. If there is any specific, you can Okay, okay. That's fine. No, that was all I had. Thank you. Thank you. The next question is from the line of Saurav from JPMorgan. Please go ahead. Yes. So, Heathu, just one clarification on this Note 6, this corporate restructuring of 5 It is developer plus IHL plus NHC. Okay. So that developer is about INR 20.78 crores as you pointed out earlier. Sorry? Yes. Of this developer loans is INR 20.28 crores of that INR 20.8 crores was in the In the Q2 itself, only Q2. Okay. And in Q1, it was very low, right? So the total is about 20 2017 was the retail in Q2. 2074 was Q1. Yes. So of this, the total developer I gave out all the money. You want a project? No. So there's a total developer book restructure will be about INR 2,100 crores. It's my question So, 2,100 close where you got, the 2,100 close is the OTR done in the Q2, Under OTRQ? Plus Q. Of the 141 crores. Okay. Okay. Alright. And okay, fine. You will find that disclosure given in the published numbers. Very clearly, it is mentioned the category wise. Perfect. It is there in notes to the results, point number 6c. Full table is given. Thank you. The next question is from the line of Umang Shah from Kotak Mutual Fund. Please go ahead. Yes. All my questions have been answered. Thank you. Thank you. Thank you. The next question is from the line of Sushmit Bhatodia from Ooyala Loveland Asset Management. Please go ahead. Hi, good morning. Sir, if you can speak a little bit about the competitive Sir, request Ladies and gentlemen, the line for the management is reconnected. Mr. Portoide, you may please proceed with your question. Hi, good afternoon. Good afternoon. I wanted to know the competitive scenario and are you seeing balance transfer out? I just wanted to understand how is it looking? Is there a lot of BT out that's happening or vis a vis the earlier trend? Yes. Now because this quarter, you have said that our traction is very good, especially in the disbursements in the individual home loan segment, We have shown tremendous growth. Nearly INR 16,000 crores have been the divestment in this quarter itself. I'm showing a growth rate of almost 132 percent over the, what you call, last one. We are already reaching the 3 cold levels there also. And again, if you look at the portfolio also, there is a 15% addition. That growth rate is very good. It is very good, especially in the Indian housing bond segment. On the way forward, actually, now the rates are at the highest level, 6.6%. And even the Offers given by some builders here and there in some states. Add to that, even the property rates also more or less maintained. And then with all these things now, the initiative by the government for vaccination trial really has helped us a lot. So people are now in Position to move out very freely then select the properties after visiting them, especially on weekends and all. We are having Lot of what we call positive mood also, we are highly hopeful that the next quarter will be the best one Our power outage in this quarter, of course, the last quarter also has been the best lease pay for company that also was there as per the disbursement assumption. So how much balance transfer have you had in the last 6 months, if I may ask? From our side, I think it must be not more than maybe within 1% to 1.5% range maybe, not more than that. Okay. And sir, any progress on the Swamy Resolutions? It's now been nearly 3 to 4 quarters. Where is it? What are the status? They are more or less same stage only. There is not much of a fraction we are seeing there. Okay. Okay. Okay, sir. Thank you and all the best. Thank you. The next question is from the line of Krishan Barrick from HSBC Securities. I had one question. Just wanted to understand what the outstanding provisions are there currently on the restructuring of INR 7,000 crores and what would be the incremental provisions coming over there as well as what how are we looking at overall credit costs So overall credit cost last year was around 60 basis points, year before that was around 48 basis points. Current year, it is more than 100 basis points, but what we believe is that with the further reduction in expected reduction in the NPLs going forward in the next two quarters, it should again rationalize and we should reach somewhere where we were towards the end of I mean, towards the end of this year to wherever it was, by and large, last year, that is as far as the credit cost outlook is concerned. As far as the provisioning is concerned, this provisioning is on the IGAP. As per the IRAC norms of the Reserve Bank, 10% has to be provided on restructured book. Full letter has been made. And for that provision on restructuring book, We should assume they will not come in unless the asset slips into lower budget. So as of now, since there is No change in the NPA position. There will not be any further restructuring required on that book. What year ended, no. We did not operate it. Okay, understood. And if you could just let us know, is there an increased level of prepayment on the lab book in this quarter? And any particular reason for that? No, there is no such Let me pronounce trend only in the lab book or anything of that sort. Okay. That particular Line of business is disbursement is not happening as it was as it used to happen earlier. Okay. So Okay, understood. And are we looking at any further improvement in incremental cost of borrowing from coming in The cost of borrowing from coming in 3rd quarters or this should be the bottom pretty much, the current quarter? See, overall, if you look at the interest rate scenario in the country, then you will note that the yields have already started bottoming out and Bond yield GSA yield has actually gone up, but despite that, we have been able to show some improvement. Some little bit of elbow is still left. And of course, depends upon the stance taken by the central bank on the interest rate scenario. Sure, understood. That's it. That's awesome. Thank you. The next question is from the line of Hitesh Gulati from Haitong Securities. Please go ahead. Yes, sir. Thank you for taking my question. Sir, of the OTR booked 3.5% that you mentioned, So is there any overlap with the Stage 3 assets? First of all, it is not 3.5%. It is 7,300 crores, so it will be around 3.1%, number 1. Number 2 is that there could be some overlaps, but it is generally on the lower side. Most of it will be in Stage 1 or 2. Okay. And sir, last quarter, at the result time, you had mentioned that there was some resolution of INR 100 crores in July in some developer books. So has that been taken care of? And you mentioned there are some small distributions or what is the state of the business? Yes. So that was INR 100 crores, I think. Yes, it is committed. It has got 100% but that is not from the developer group, that is the non housing commercial. Okay. Okay. So in terms of there is no negative. Very small, very small accounts are there, very insignificant. Very small two digit About 2 digit amount will be the solution. Okay. So thank you. That's information. Thank you. The next question is from the line of Kunal Shah from Carnelian. Please go ahead. Hi, sir. Most questions have been answered. Just one question, sir, with the kind of capital adequacy ratio we have, And I understand you're looking at good momentum on the current aspect. How do you see Any requirement of capital or how should one be there? As of now, capital is adequate After the promoter infusion, as of now, the category is adequate. Okay. So we don't believe there's going to be any further need for capital? That we have not said. We have said that at this point in time, it is adequate. Okay. Okay. And just one additional question on the Employee expense part, right? So you said there will some accrual impact of INR 45 crores, INR 46 crores that is there in this quarter. So, once we continue for the coming quarters as well or how should one look at the subsidiary impact? I said it's one time. It's one time. So okay, okay. Thank you, sir. Thank you. The next question is from the line of Marukarjania from Elara Capital. Please go ahead. Yes, hi. Sorry to hop on the same thing. But if you look at your interest reversal of 2.54 on a book of 7,300, then it roughly works out to 3.5%. As there is no response from the current participant, we move to the next question from the line of Sushank Varma from Axis Mutual Fund. Please go ahead. Hi, sir. I had one query on this cumulative number of provisioning, this 5,354 crores. Does it include the provisioning on restructured book of approximately INR 700 as well as the COVID related INR300 provision that we have made? If COVID related provisioning is there, INR314 crores is included in the ECL provisioning. OTR provision is made under IGAAP, Under IRAC norms of Reserve Bank of India under IGAAP. Okay. So it will not be included in the 5,300 order number? It is there. It is reflected there and the balance is transferred to the impairment result as an appropriation. Got it. Got it. Thanks, Rohit. Thank you. Thank you. We take the next question from the line of Chandrasekhar Sreedhar from Fidelity International. Please go ahead. Hi. So this is just to complete, I think someone has asked your previous question. So if you look at the interest of us, it was It's INR 250 crores which are annualized. This is worth almost a 7% interest, which is have you given like a 1 year waiver? There is no waiver. There is a moratorium. Monetary and waivers are completely different things. Right. Okay. So then you're saying, so in that case, then there should be a writeback which will come sometime later, right? That is precisely what we are saying. Okay. There is no waiver. Please make it very clear. There is a difference between moratorium and waiver. Right. Okay. And just secondly, can you just remind me on just over the next 12 months, how much of your bond book is up for Repeat. Not able to hear. Can you please repeat? Just over the next 12 months, the bond book which is up for repayment? Yes. Yes. Thank you. Thank you. Ladies and gentlemen, due to time constraint, we take one last question from the line of Marukar Janya from Melara Capital. Please go ahead. Yes. Hi. Sorry, can you hear me now? Yes. Hi. So just finally on this restructuring thing, So what would be the average 10 hours restructuring? I mean, my average modest outcome in restructuring, 1 year, 2 years. 2 years. Oh, so that is why the interest reversal looks a bit high, that way? Because it's too early? Yes. It is on a valuation based upon the effective interest rate. Got it. Okay. Thanks a lot. Thanks. Thank you. I now hand the conference over to the management for their closing comments. Over to you, sir. Thank you. Thank you, Praveen. Thank you for attending the call and our best wishes to all of you looking forward for a great evening the days to come and the trailing this quarter, and I also wish all the members and also you all people all a very, very happy Diwali to all of you. Thank you. Ladies and gentlemen, on behalf of AXIS Capital Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.