...Ladies and gentlemen, good day, and welcome to the PNB Housing Finance Limited Q2 and H1 FY 2024/2025 conference call of PNB Housing Finance Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Deepika from PNB Housing Finance Limited. Thank you, and over to you, ma'am.
Thank you, good evening, and welcome, everyone. We are here to discuss PNB Housing Finance Q2 and H1 FY 2024/2025 results. You must have seen our business and financial numbers in the presentation and the press release, shared with the Indian stock exchanges, and is also available on our website. We would like to apologize because we could upload the presentation and the press release just few minutes back due to some technical error. We will try to cover maximum in the updates to be given by the management team. We have the entire management sitting over here, led by Mr. Girish Kousgi, our Managing Director and CEO. We'll begin this call with the performance update by the team. Please note, this call may contain forward-looking statements which exemplify our judgment and future expectations concerning the development of our business.
These forward-looking statements involve risks and uncertainties that may cause actual development and results to differ materially from our expectations. PNB Housing Finance undertakes no obligation to publicly revise any forward-looking statement to reflect future events or circumstances. A detailed disclaimer is on slide 51 of the investor presentation. With that, I will now hand over the call to Mr. Girish Kousgi. Over to you, sir.
Good evening to all the investors. Welcome to the earnings call. Before I get into quarter two and H1 FY 2025 performance, I would like to highlight that our Affordable segment, roughly loan book, has crossed 3,000 crore mark this month, making us the fastest growing HFC in Affordable segment. It is a significant milestone towards the stated target of 15,000 crores Affordable loan book by FY 2027. On the loan book, last year, the retail loan book grew by 14.1%. Quarter one, FY 2025, the book grew by 14.4%, and this quarter, the retail loan book grew by 16.2% to 67,970 crores as on thirtieth September, 2024 . This is against the stated guidance of 17% for the financial year.
The corporate book is at INR 1,531 crores as on 30th September 2024. The total loan book is at INR 69,501 crores, and assets under management is at INR 74,724 crores. The total live accounts serviced by the company crossed 3 lakhs. The Affordable and Emerging market segment shares in the retail loan book is witnessing increasing trend and is at 23% as on 30th September. The Affordable segment has shown a remarkable growth of 300% on a YoY in loan book at INR 2,959 crores. We have crossed 3,000 crore loan book as of now. The Emerging market segment has shown a loan book growth of 22% YoY at INR 1,545 crores.
As per the strategy, the growth in the Prime book is a balancing number, and the Prime book grew by 11% as on 30th September 2024. In terms of reach, we currently have a strong network of 303 branches across 20 states, and we plan to open 15 branches in this financial year, with majority to be opened for Affordable business. With this large presence, we are ready to capitalize the opportunity available in Affordable and Emerging market segments in Tier II and III cities. We had a phenomenal quarter with disbursement of INR 5,341 crore in quarter 2 FY 2025, representing a growth of 28.2% on a YoY basis and 21.5% on a quarter-on-quarter basis. As laid out in our strategy, we continue to focus on Affordable and Emerging market segments.
Both these segments contribute 31% of the total retail disbursement of quarter two FY 2025. The disbursement in Affordable segment grew at a rapid pace of 68.5% YoY to INR 630 crore in quarter two FY 2025. The disbursement for the Emerging market segment registered healthy growth of 31% YoY at INR 1,035 crore. The Prime segment business grew by 23% YoY at INR 3,676 crore in quarter two FY 2025. The company is expected to start corporate business in next few months. The corporate segment will further help us increase and retain business. The incremental yield in the Affordable segment increased to almost 12% in quarter two FY 2025, as compared to 11.4% in quarter two of the previous year. We are consciously increasing the yield in Affordable segment.
The incremental yield in the Emerging market segment is 9.8% in quarter two, which is 45 basis points more than Prime segment. On PMAY interest subsidy scheme, with the government focused on the Affordable segment, that is EWS and mid-income group, and the PMAY interest subsidy scheme, close to 1 crore customers are expected to benefit over next five years. This leads to a huge opportunity for PNB Housing Finance with pan-India presence and special focus on Affordable and Emerging market segments. The company is geared up to source business from all its 303 branches under interest subsidy scheme. On asset quality, GNPA improved by 11 basis points to 1.24% this quarter. Last quarter, the GNPA was 1.35%. During the quarter, we recovered 48 crores from retail written off pool, in comparison to 28 crores in quarter one.
We expect to continue recoveries from written off pool from both retail and corporate book. The company has a written off pool of around 1,250 crores in corporate and 500 crores in retail. Our cost of borrowing has reduced by eight basis points sequentially to 7.84% in quarter two. In quarter two, PAT stood at 270 crores, registering a growth of 22.6% on a YOY basis. Net interest margin increased marginally at 3.68% during the quarter. As compared to previous quarter, we reiterate our guidance is 3.5% on NIM. We will be able to manage NIM at the current level for next couple of quarters.
Our efforts across parameters aided in improving the profitability. Return on assets improved to 2.54% in quarter two, and H1 at 2.45%. Return on equity was at 1.42%, annualized for quarter two. Now I hand over to Vinay to cover on financials.
Hello, good evening to all, and welcome to Q2 and H1 FY 2024-25 earnings call. I am happy to report a strong financial performance across all parameters during this quarter. Driven by strong business performance, with disbursement growth of 28% and loan book growth of 14% and retail loan book growth of 16.2%, our overall PAT has grown 23% year on year and 9% quarter on quarter to INR 470 crore in Q2, FY 2024-2025. Overall, interest income has grown 4.5% year on year in Q2. However, this is colored by declining corporate book over the years. Kindly refer page 35 of the deck, wherein we have shared separate PNL by segment for retail and corporate.
The retail segment gross income has actually grown by 17% year on year, and operating profit, that is pre-provision operating profits, grew by 16.4% year on year in Q2. Cost of borrowings reduced by eight basis points sequentially to 7.84% in Q2. The decline in cost of borrowings is driven by the benefits of rating upgrades, leading to competitive borrowing from debt capital markets. Company also received ECB sanction of $125 million, which is at a very competitive rate. This has ensured that the spreads have improved from 2.1 - 2.2 during Q2. NIMs have also improved to 3.68% during Q2, versus 3.65% in the previous quarter, largely driven by the lower cost of borrowing.
However, we reiterate, we maintain our guidance of 3.5% NIM for the current year. With higher contribution of business now coming from Affordable and Emerging verticals, NIM should start improving from the next year onwards. Gross margin is maintained at 4.1 versus around 4.03 in previous quarter. In Q2 FY 2025, operating expenses have grown by 19% year on year to INR 199 crores. This is largely due to branch expansion done in Affordable and Emerging vertical during Q4 of the last financial year, where we added 100 branches. Excluding fresh investments done in these 100 branches, operating expenses would have grown by around 9%. This fresh investment will definitely help in profitable growth going forward.
On credit cost, as mentioned earlier, it remains benign even during Q2, due to recovery of INR 48 crores from the retail written off pool in this quarter. Overall, credit cost remains a release of 24 basis points for Q2 FY 2025. Our ROA improved by 30 basis points year on year to 2.54%, which was 2.38% in the previous quarter. ROE has also reached to 12% for Q2 FY 2025. Company has maintained average daily LCR of 193% against the regulatory requirement of 55%. We have also maintained SLR of 15% on public deposits as of 30 September, against the regulatory requirement of 13%. The capital adequacy stands strong at 29.16%, with Tier I at 28.1%.
With this strong overall performance during Q2, we are on track now to deliver on our business growth guidance for the current financial year.
Thank you, Vinay. I will now request Dilip, our Chief Sales Officer for Prime and Emerging Business and Deposits to give segment and performance update.
Thank you, Deepika, and good evening, friends. Welcome to the call. Appreciate you are taking the time out late in the evening. I'm delighted to share with you that we had a really good quarter in the Prime and Emerging markets businesses for the company. You heard some of the numbers from Vinay and Mr. Kousgi. You'll see them in the investor presentation as well. Over the next few minutes, let me try and give you some color of these businesses as to what they are and how they have fared in this quarter for us. I'll start with Emerging markets first. We took this decision to reorganize our branches and teams into Prime and Emerging markets, because we believe that these set of geographies or branches have room to, number one, grow at faster pace.
Number two, also give us higher yields on incremental disbursements. So we carved out 50 branches. We started off this business as a separate one about two quarters back. Firstly, let me speak of which are these markets. About 60% of these branches are in South as on date. So we are talking of most of Tamil Nadu, except Chennai, branches in AP, but not Telangana or Hyderabad, all of Kerala. Even in the North, we consciously chose the Tier II markets, so that's some parts of UP but not Lucknow. Large share of Rajasthan, but not Jaipur. So in these markets, our ticket size is around 25 lakhs, whereas our ticket size on the Prime side of the business is about 35 lakhs. So at the end of two quarters, we are very pleased to see how the business has started off here.
Disbursement in these markets, like you heard, has grown at 31% YOY. The book has grown at 22%. It's crossed 12,500 crores. We had set out a guidance saying over the period of 2- 3 years, we will have a difference in yield of 75- 100 basis points between the Prime and the Emerging market side. In 2 quarters, we have already achieved 45 basis points. So the difference in incremental yields between Prime and Emerging markets is now 45 basis points. In fact, in these Emerging markets, we took the yields up by 40 basis points in six months as compared to what it was at the end of Q4. In terms of product mix, NHL gives us about 35% of incremental disbursements in these markets. Again, this is a yield accretive business.
It fetches us a good 100+ basis points of premium over home loans. In these markets, 63%-64% of our business is sourced by our internal team, which is our in-house origination team. About 37% is originated by our third-party distribution DSAs. And when we are doing all this and we are wanting to grow this business more, the asset quality in these set of branches, the NPA level, is on par with those in the Prime branches, if not better. So we are very pleased to have made this decision. It seems to be paying off well. It's taken off very well. We only see this business becoming bigger for the company, along with Roshni in the quarters to come. Mr. Kousgi mentioned that EM, Emerging markets and Roshni are now at about 31% of the company's retail loan disbursements as of Q2.
Now, this number or this metric, by design, will only go up in the quarters to come. Now, coming to the Prime markets. So most largest cities of the country, the metropolitan cities like MMR, NCR, Bangalore, Chennai, Hyderabad, Pune, even the bigger cities like Lucknow, Chandigarh, et cetera, they fall into what we classify as Prime markets. Now, since these markets have a higher share of contribution to the economy itself, they are larger markets for housing loan demand as well. So obviously, we witness more competition in terms of pricing in these markets. That's why the yield on incremental disbursements in these markets will be a little lower. But owing to the sheer size of these markets, they will continue to contribute more to the growth for most lenders, as is the case with us.
So on the Prime side also, on the Prime market side, we had a very good quarter on disbursement, on runoffs, as well as margin improvement. We managed to grow our disbursements by 22+% in these markets. The book grew by about 11% to 52,000+ crores. And on this side of the business, as we're working on growth, we are also working hard on restricting our runoffs. So our runoffs here came down to below 17% on an annualized basis. Now, this is a good 2+% reduction YOY. This improved 40+ basis points QoQ sequentially as well. And while we are wanting to grow in these markets, for bottom line reasons, we are also making the shift down the income pyramid from HNIs or super Prime to the Prime or the mass affluent segments.
So the incremental disbursements are more granular in nature. Just to give you a metric, 97% of the disbursements in these markets stood at loans below three crores, which is much lower than what the company is used to historically. In these markets also, we managed to take the yields up. Incremental disbursements yield moved up by 15 basis points in six months. I'd also like to share an update on investments in new branches. We opened about 35 new branches in quarter four of FY 2024. Happy to share that all these branches are now fully operational. They are active on incremental disbursements for us. They contributed to 10% of the disbursements across Prime and Emerging markets for Q2 for us. This number was 6% in the previous quarter, so this should only go up in the coming quarters.
So to summarize, growth in business is auguring well on the back of investments in geography and technology. We wanted to grow more in the margin accretive businesses, be it Emerging markets, be it NHL. We are seeing that happen. The shift in the customer segment in Prime markets is happening as planned. The shift in the geography mix is also trending in the direction we want. Just to give you an update, across Prime and Emerging markets, 50+% of the incremental disbursements are now coming from non-metros. This is the first time across these businesses and the asset quality for these businesses continues to hold up and improve quarter on quarter.
So we believe that, a good performance in Q2 is a testimony to the fact that we are on the right path, and we'll only move forward on these businesses on all our imperatives, growth, margins, and, asset quality. Thank you, and back to Deepika.
Thank you, Dilip I will now request Anuj Jain, our Business Head for Affordable Housing, to update on the Affordable housing performance.
Thank you, Deepika. Good evening, everyone. It is my pleasure to take you through the excellent outcomes that we have achieved in the last quarter in our Roshni business. We've ended the last quarter at a loan book of INR 2,959 crore, and I'm happy to share that we have become the fastest business in the Affordable housing space to cross the loan book of INR 3,000 crore earlier this month. We have achieved this milestone in the 22 month of our operations. Our journey in the Affordable housing finance space started in January 2023, with Roshni business disbursing INR 5 crore of loans in that month. Executing well on our strategic plan, we reached a monthly disbursement rate of around INR 100 crore per month in about six months' time by July 2023.
We were the fastest in the Affordable housing finance space to reach a loan book of rupees 1,000 crores in just 11 months' time by November 2023. We opened our 100th branch in December 2023. Incidentally, this branch was also our first women-only branch that was set up in Chennai. With increased branch footprint, our loan book growth was even faster from there on, and we ended the FY 2024 at a loan book of rupees 1,790 crores in March 2024. As I mentioned, we crossed 1,000 crores of loan book in November 2023. The next 1,000 crores came even faster, and we crossed loan book of rupees 2,000 crores in the next six months by May 2024. We also opened 60 more branches in Q4 of last financial year.
I'm happy to share that all these new branches have been fully operationalized in the last few months. With these 160 branches across the country, we are catering to 130+ high-potential targeted districts across 13 states in the country. We are operating in the 3 zones, and contribution is evenly distributed amongst all these 3 zones. North Zone accounts for 34% of our business. Contribution from West Zone is about 36%, and South accounts for 30% of our business. We have a national presence, and this helps us in scaling up faster across all regions in the country. In the last few quarters, we have worked hard to expand and strengthen our distribution. We have empaneled close to 2,000 collectors through our Roshni Star Program. We have also empaneled close to 500 channel partners for DSA partnership.
We have also strengthened our vendor support network for legal, technical, FI, and FCU-related checks, with more than 1,000 empaneled vendors across the country. We have also used technology solutions extensively to strengthen our operational framework. The last quarter has been our best ever quarter in terms of logins and sanctions, and we have been able to build a robust pipeline, which will support the business growth going forward. Roshni loan book has witnessed a 3x year-on-year growth, as we have ended the last quarter at a loan book size of INR 2,959 crores, as compared to INR 745 crores that we had at the end of quarter two of last financial year. Quarter on quarter growth in the loan book stands at 25%+ .
Roshni disbursements have also seen a robust growth, year-on-year growth of 58.4%, as we disbursed INR 630 crore of loans in the last quarter, as compared to INR 374 crore of loans, same time last year. While we have grown our disbursement significantly, it is important to note that we have also improved our incremental yield simultaneously. Yields for incremental business have gone up to close to 12% this quarter, as compared to 11.4% same time last year, and 11.58% in the previous quarter. We have been able to improve our yield through an increased focus on higher-yielding segments and products. Self-employed sourcing has gone up to 43% in the last quarter, as compared to 35% last year.
Sourcing from informal income segment has gone up to 29% in the last quarter, as compared to 23% previous quarter. Our non-home loan sourcing has also gone up to 35% in the last quarter, as compared to 25% same time last year. With most of the new branches getting opened in Tier III and Tier IV locations, this will become an additional factor, and we are confident our yield will continue to improve. On the portfolio quality side, we don't see any early warning signs. As I mentioned earlier, we have been able to execute really well on the strategic plan that we have for our business, and we are confident that we will be closing this financial year with a loan book of close to INR 5,000 crores. Thank you.
Thank you, Anuj. I'll now request Jatin Chawla, our Chief Credit and Collections Officer for retail, to talk about credit and collections performance.
Yeah, good evening, everyone. Moving on to cover the portfolio quality and credit. Well, I can say that our PNB Housing is risk first and business next. Credit underwriting plays a crucial role in driving business and building a strong portfolio, ensuring sustainable portfolio quality. This function here operates independently, assessing both the financial capability and collateral through dedicated legal and technical units. The company today manages a robust and seasoned portfolio of around INR 68,000 crores, consistently achieving steady year-on-year growth. With a deep understanding of the various facets of the mortgage industry and the relevant experience of our team, we make informed onboarding decisions. This expertise allows us to build a diversified portfolio, maintaining a balanced distribution across various industry segments, low and mid-ticket size cases being focused, and a healthy mix of salaried and self-employed customer segments.
As the business grows organically, our well-established centralized monitoring mechanism conducts periodic testing of the portfolio on-us and off-us checks , providing an eagle-eye view of our business here. So as we speak, our portfolio shows no sign of stress. Covering the credit process flow revolving around login, credit appraisal, collateral assessment, and finally, the disbursement, each of these stages ensure that the lending process is thorough, minimizing the risk and maximizing the profitability of repayment. Right from the loan application submission, which is done through our digital platform, till disbursement, at each stage of the appraisal, one or the other digital tool deployed by the company is used, be it the e-verification of documents to automated CAMs and bank statement verifications, etc. So this ensures faster and timely delivery to the customer.
Now, moving to the portfolio highlights for quarter two of the current year, the company witnessed business growth, as already mentioned, and increased with respect to focus areas of control. 94% of the fresh sanction volume had ticket size up to 1 crore. 87% of our incremental business had bureau score of more than 700. Having all the checks and balances in place with respect to prudent appraisal and managing early mortality, the delinquency in the business booked in last few quarters is well within the tolerable limits. To give you an idea, as on 30 September, 30+ from last 12 months origination is 0.1%, and the NPA that is 90+ is 0.02%. If I go back and see last 24 months also, 30+ is 0.43%, and NPA is at 0.09%.
That gives us the confidence to enable business growth with sustainable portfolio quality. Now, moving further to collections and recoveries. The company has been witnessing a successful trend over the past few quarters with complete grip on delinquent accounts, various approaches of curing methods put to use, ensuring sequential reduction in NPA quarter on quarter. The strategy which we designed in the recent past and implemented at ground, is yielding desired results as per our plan. Resolutions across buckets have been improving, driven by strategic interventions, both from a process excellence and technology leverage point of view. The focus continues to remain on early delinquency management through leveraging deeper analytics and focus to increase self-curing of early delinquency, deployment of predictive AI models to improve accuracy on pre-delinquency management, and ongoing monitoring and prompt resolution of any early mortality cases arising from the recent acquisitions.
And the next focus area, which is to arrest the vintage delinquency, is control over the NPAs and recovery from the written-off pool. This is being enabled with the use of effective legal tools or measures to restrain delinquency, leverage of end-to-end technology through a collection application which is being used to track the collection field team performance, digital capturing of payments, and enables us to review through dashboards and various analytics. Optimizing the process for one-time settlements and reserve price fixations, etc., strengthened our auctioning process. I will just cover the numbers in a minute to go. And month-on-month consistency of sale of repossessed assets by taking one-of-a-kind industry-wide initiatives, which has really helped us to get to the desired results. Over the quarterly update, the company closed the second quarter building on the momentum we established in Q1.
Performance was robust in Q2, whereby we beat our Q1 numbers on almost all the measurable success metrics. Our ongoing rigor on sourcing saw us take over 300 possessions in quarter two, which is, you know, far more than what we did in quarter one, close to 170 odd possessions Further to dispose of these assets, we successfully sold 134 properties in Q2, as against 98 in Q1, through the auctioning channel. So this vertical, you know, this, this has been a very successful in disposing of the assets as well as the reduction in NPAs by taking one of a kind initiatives, as I talked about, be it marketing, be it creating awareness to dispose of these assets.
In terms of recovery from the technically written-off pool, we collected almost around INR 50 crores in quarter two, as against INR 28 crores in quarter one. So the strong control over recovery and resolution mechanism has set the growth trajectory in terms of robust portfolio with even lower delinquency. Given the proficiency in handling all aspects of collections, recoveries, to sale of assets and overall resolution mechanism over the last few quarters, the company has set a path for reducing NPA further and build a robust portfolio with steady growth. Thank you.
Thank you, Jatin. I'll now request Anubhav, our Chief Technology Officer, to talk about our tech initiatives and its progress.
Thank you, Deepika, and a very good evening to all. PNB Housing Finance technology function continues to evolve on the path of transformation agenda that was initiated in quarter four of FY 2024. I'm pleased to share that as part of our transformation journey, we have upgraded and replaced our key core platforms like CRM, Dialer, LOS, website, and Deposit. We have also introduced additional tech-led channels for sales, collections, operations, and customer service functions. All the new platforms are high-performing in terms of functionality, features, capacity and performance. The new and upgraded platforms are set to deliver long-term robust tech capabilities for our business segments and customers. Our long-term technology vision is to be recognized as a large tech-led digital player in the HFC ecosystem, partnering with various fintech, banks, and aggregators through scalable digital platforms and tech services, which are integrated end-to-end.
All technology investments are aligned to the business strategy and direction and focus on five strategic pillars. The first is delivering a frictionless customer experience. This aims to simplify and enhance experience for our customers across all channels and touchpoints. We have launched a new website that provides far more information and the same is disseminated to our customers and prospects. We have introduced self-service channels like chatbots and WhatsApp bot, where almost 17%-18% of customer requests are being self-serviced 24/7 . Our second strategic pillar is end-to-end sales enablement. Initiatives like introducing a sales mobile app for our frontline, automated lead scoring and allocation have been implemented. We have also introduced a fully functional app for our collection agents to be better equipped with all data and details in a secure manner to improve collection efficiency. The third pillar is creating underwriting at scale.
This focuses on our credit function, where we have built several calculators. Automation for underwriting includes digitization of complete underwriting rules using a robust rule engine, and the same has been implemented and used widely. Our fourth pillar and focus area is to evolve into a data-driven enterprise. We continue to invest in building data analytics capabilities across organizations. We are in the process of setting up a vast data lake to build an integrated analytics view and enterprise and business segments, which will be used for developing numerous analytical models for prediction of risk, delinquency, conversion propensity, and for enabling management reporting across hierarchy for better management and control of the business, and our last pillar of focus is tech innovation and performance.
By delivering superior business capability, we are also focusing on building internal tech skills and capabilities, specifically in areas around cloud, mobility, engineering, performance engineering, tech monitoring, and information security, which are very relevant in the technology landscape of today. In recent quarters, we have automated considerable part of our customer service touchpoints and introduced digital channels for customers to connect with us. As on date, these self-service channels are working well for us and have led to improvement in CSAT, as well as unlocked better productivity for our operations teams. Further development initiatives include introducing modern and integrated LOS platform that has better control, workflows, and improved monitoring capabilities through automation and integrations. During the onboarding journey, we are now more than 80% digitized for the Affordable segment, and we are launching the pilot phase for Prime and Emerging business segments.
Entire field collection team is enabled with a robust mobile app that provides all details of delinquent cases, field tracking, complete payment automation workflow, and associate capabilities for collection agents to leverage. Lastly, we have set up 24/7 information security monitoring capabilities and continue to build resilience on our technology platforms in line with the new and Emerging cyber threat landscape. Information access for users is also controlled using relevant tools which work purely on a zero-trust architecture model. Thank you.
Thank you, Anubhav. Sagar, we can open the forum for this mandate.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles... Our first question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.
Yeah, good evening, everyone. Thank you for taking my question. First of all, congratulations on a good quarter and again, congratulations to Girish, sir, for recently completing, I think, two years at PNB Housing. So first of all, I mean, thank you for, I think, very enhanced disclosures that you are giving in the presentation. I think we also started reading out incremental yields. So I think that's where my first question also was, that in terms of incremental yields that you've given out in Prime, Emerging, and Affordable, what proportion of this increase in incremental yields that you've seen over the last two quarters, what proportion has come from a product mix change?
What percentage has come from an increase in yields that you have been able to take in home loans?
Thank you so much. Thanks, you know, for the compliments. So, the plan this year was to increase the yields on all the three segments, starting from Affordable, Emerging, and Prime. So we started focusing on increasing yields, you know, let's say from June of this year, because quarter one, given the constraints and cyclical, and therefore we started this couple of months late, and we are seeing good traction. So if you look at any of these segments, whether it is Affordable and Emerging or Prime, even this is driven largely by, you know, customer segment, geography, product, and the program mix. So these four things have driven, you know, towards increase in all the three businesses: Prime, Emerging, and Affordable.
Got it. And so I mean, just a related question on yields again. I mean, Emerging, Affordable, I mean, we can understand, but the fact that you're also able to take yield improvements in Prime is itself commendable, given the kind of competitive landscape that we have in the country. So what is allowing us to improve yields even in Prime?
So, as I mentioned, you know, even on the Prime side, you know, we are, we've been, we are and we will be, you know, always exploring opportunities, sub-segments within Prime, and also within Prime yield. It's also a combination of the program and the product mix and customer segmentation within the Prime.
Yeah, to add to what Mr. Kousgi said, Abhijit, the two bigger levers in Prime side of the business which are helping improve yields, is one is shift down the pyramid. So we have vacated the sort of ultra HNI kind of customer segment. We see possibility to charge better premiums when you go down the income segment. That is number one. Second is, a little bit of product mix as well. We're doing a little more NHL than what we used to earlier. We are also trying to see if we can move up that ladder. Combination of these and some of the factors which Mr. Kousgi explained, is helping us increase the yields.
Got it. Thank you. My second question was on margins. When Vinay sir was giving out his opening remarks, I think I heard that. I mean, while margins have been good for the first half of the year, are we still guiding for a margin of 3.5%? So, I mean, should we then conclude that maybe for next two quarters, we could see some yield volatility, and then as per your guidance, things should start improving from the next year onwards?
I think yields will start improving maybe after two, three quarters' time, as I've been mentioning, you know, since very, very long time. We are putting in all the efforts to protect the yield. We have given guidance of 3.5%, that is the threshold. So, you know, yields will be upward of 3.5%, while our endeavor will be to try and maintain, you know, at around 3.4, 3.6- 3.65%.
Got it. Yes. That's good. Sir, the last question again is, I mean, I think you guided that for next 4-6 quarters we'll continue to see recoveries from the retail home. I think, I mean, this was the second quarter where we took a provision write-off, provision writebacks in the P&L. So two things I want to understand in terms of recoveries. One is, when we go for repossessions and auctions in retail, what is the recovery that we see? In other words, what is the haircut that we are seeing in retail when we go for recoveries? And secondly, given that you spoke about almost 1,250 crores of recovery in corporate, and corporate recoveries we know can be lumpy.
Anything happening on the corporate recoveries, and are you expecting any corporate recoveries in the second half of this fiscal year?
Yeah. So as of now, we have INR 1,250 crores recovery in full on the corporate side, and INR 500 crores on the retail side. And if you look at quarter one, quarter two, I think together we've done about 28+ 48 crores from quarter one and quarter two, a little over 75-odd crores. So this story will continue for next four to five quarters. On the corporate side, you know, as I had mentioned in the last earnings call, we were able to recover you know, a debt in quarter one. So in H2, we can expect good recovery on the corporate side, also on the retail.
Thank you. Got it. So this is useful. Thank you so much, and I wish you and your team the very best.
Thank you. I think I had mentioned H2, I think in H2, we are expecting recovery from corporate also, and retail recovery will continue for next 5-6 quarters.
Okay. All right. Thank you so much.
... Thank you. The next question is from the line of Renish from ICICI. Please go ahead.
Yeah, hi, hi, team. Congrats on a good set of numbers. So first question, again, on the credit cost side. So, you know, of course, we do understand that, the revamp of collection, underwriting, structure, you know, is helping us in better recoveries, et cetera. But on a normalized basis, you know, given now property is only 2%, so what kind of a steady state credit cost one should assume, you know, in retail business, especially when, you know, we are, let's say, over next couple of years, Affordable and Emerging will be larger piece than Prime. In a way, you know, these two segments will be slightly more vulnerable than Prime. So what steady state credit cost one should assume for PNB Housing going ahead?
So on a steady state, you know, for example, we have given a guidance, you know, in terms of, retail book growth reaching the 1 lakh growth by FY 2027, with a mix of, 15% in Affordable, 25% in Emerging, and the balance in Prime. So on a steady state, given the mix between these three segments, we should, look at credit cost of about 40-42 basis points.
Sorry, 40-45 basis points?
Yes.
Okay.
40 to 42. 41, 42.
Got it. Got it.
I think on Prime we are expecting, on a steady state, a credit cost of about 18 basis points, on Emerging around 20-24 basis points. On Affordable, since we are focusing on the low risk and within risk segment, we are expecting about 60 basis points. As a combination blended within retail, we are expecting credit cost around 41-42 basis points.
Okay. Maybe I think if we go by this mix and the kind of credit cost you highlighted, I think the blended should be lower, but anyways, I think we'll discuss separately. Second question, again, you know, on the yield side, in the Prime segment. As Abhijit was mentioning, you know, this is one of the most competitive product per se. In that segment, you know, from last two, three quarters, we are seeing this steady improvement on the disbursal as well as the book yield as well. I mean, I do heard that, you know, we are vacating ultra HNI and sort of going down the pyramid.
But, structurally, you know, what are we doing to sustain this kind of a yields, you know, on a more sustainable basis?
Yeah, Dilip, like I said, we are trying to be on the fringes of the outskirts of the city. We are trying to cater to middle income customers. We are trying to do a little more of NHL as compared to earlier. Between these two, three levers, we are trying to fetch higher yields than before, and this is a journey. We've just started off. We have walked about 15 basis in the last six months. We believe there is still room for improvement here. I remember mentioning this in our earlier conversations as well. Even if you take cities like Bombay, Delhi, NCR, the yields that the ultra HNIs give us in the middle of the city are very different from what you get when you go to the outskirts of the city.
Even to catering to salaried middle income customers or self-employed customers gets us better yields. So between these two, three things and a little bit of product mix, NHL, we believe that we will be able to take the yields up. And early results seem to be showing that we are in the right direction. We will be moving ahead on this path.
Got it. So, I mean, does that mean there is a significant change in the ticket size?
Not really. It's in the... It's come down a little. On the Prime side of the business, we are in the range of 35 lakhs. We're trying to be more granular. We used, four, five years back, historically, we used to do many more cases which are sort of 5 crore plus, and that has come down.
Yeah, that's what. Okay, got it. So earlier, maybe we were in crores, now we are in lakhs.
Yeah, a little.
Okay, got it. And, my last question on the, cost of borrowing side. So, despite the rating upgrade, you know, incremental cost of fund has increased, maybe though marginally by seven basis point. But ideally, you know, incremental cost of fund should have come down, right? I mean, post rating upgrade. So what am I missing here?
It is basically, Renish, due to some mix as the bank mix between short term and long term. This keeps changing quarter on quarter. That has led to some impact between Q1 and Q2. We have also got some ECB and NCD traction starting from Q2, which is also playing out from improving the diversity and mix perspective.
Got it. Got it. So basically, just a mix change, which is impacting this. There is nothing much to re-
And also, if you see, you know, we got the rating upgrade in quarter four of last year and quarter one of this year. So that will play out. You know, and also, if you look at the difference between us in terms of cost of borrowing and some of the, you know, leadership companies in terms of cost in the space, I think the gap is not much. So we'll be able to cover the gap and also in next 3-4 quarter time, it's question of time. Now, we are also looking at possible upgrade, and we should further improve the cost.
However, having said that, I mean, overall borrowing cost on the portfolio has improved by eight basis points. So there we have worked across all the groups.
Got it. Got it, sir. No, this is very helpful, sir. Thank you, and best of luck, sir.
Thank you.
Thank you. Next question comes from Nilesh Jethani, from Bank of India Mutual Fund . Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity.
Sorry to interrupt, Mr. Jethani. Your line is breaking in between.
Am I audible now?
This is much better, sir. Please go ahead.
Okay. Thank you. My first question was on the Affordable side. Just wanted to understand, considering this 160 locations that our branches are present, any sense or any understanding, the corporates which are operating around us, what could be typical AUM per branch for them? And of course, what kind of AUM per branch are we aspiring to, when we target to reach this 15,000 crore AUM by FY 2027? That is question number one. Question number two is on, what are you planning to do on the Affordable side? Planning to garner market share in tier II, tier III cities, or we are targeting virgin market, a mix of virgin and market share gain? Just wanted to understand the philosophy.
See, in terms of growth, you know, we had guided 17%, so this could, you know, improve in next couple of years. You know, since we are trying to scale up in all the three segments within retail. Now looking at CAGR in terms of all the three businesses, you know, what we have spoken, so we are expecting to reach a book of about one lakh by FY 2027. So this by FY 2027, today, we are at 303 branches, so in next three years, starting from this year, we will be able to reach to the level of 500 branches.
So this, you know, split is going to be all the branches what we're going to open in future. I think 75%-80% will be on the Affordable side, and the rest will be on the Emerging side. I think 500 branches, 1 lakh retail book by FY 2027. That's the plan. And we plan to grow at about, let's say, this year, we were at 17%, next couple of years will be slightly higher. I think that's the plan. In terms of Affordable, specifically, I would request Anuj to... Yeah. On the Affordable side, we have just tried to set some context.
When we were working on the distribution blueprint for this business, we realized that, you know, there are about 155 districts across the country, out of, you know, 550-600 districts that we had at that point in time. So around 155 districts were found to be high potential districts for our kind of targeted business. And out of these 155 districts, so far, through these 160 branches, we are catering to about 130-plus districts already. These districts are concentrated in about 14-15 states in the country. Out of these 14-15 states, we are already in some form, we are present in about 13 states.
Within these 13 states, and plus there are a couple of more states which we want to target, there is ample opportunity to open about 150- 200 more branches.
Okay. And on the AUM per branch, just wanted to understand, currently the locations where we are operating, our competition would be operating at what kind of AUM? Just wanted to understand, today, our AUM per branch, optically looks much lower, considering the faster growth in branch addition what we have seen. Just wanted to understand, say, from tomorrow itself, hypothetically, we stop adding branches, so what could be AUM per branch potential for us in the current location itself?
I think talking about Affordable, you know, if you see some of the mature branches where we have reached, you know, a little over two crores per month. We've seen that on the Affordable side, on average, you know, branches could reach a potential of about doing 3.5 crores disbursements every month. That is, you know, let's say after 12-15 months from the start. Depending on the vintage of the branch and the location potential, I think the branch should reach at, let's say, about 3.5 crores on average.
Got it. Sorry to again circle back on the question. So you mentioned that in the current branch, current location, there is scope to add even 150 more branches. So this refers to those are underserved areas, or we can capture a higher market share in a different size market? What’s the thought process?
See, it will be a combination of tier II, tier III and tier IV, right? It will be a combination of yield and the volume, so it will be a mix of these two. For example, tier II or tier III would maybe get us more volume, and part of tier III and tier IV give us a better yield. So it's a combination of these two. Which is why I mentioned, I think one branch in a month can reach to the max potential of, on an average, 3.5 crores. So some of the Affordable branches, for example, let's say in cities like Bangalore, Chennai, Hyderabad, you know, could do even 7-8 crores per month.
And some of the branches in Tier IV, they could do, let's say, one to one and a half crores, but the yield is going to be much higher. So it's a combination of both yield and volume.
Okay, got it. Got it. And, one question on the corporate side. Just wanted to understand the plan to, rebuild up or refocus on corporate from next quarter onwards or maybe next two. Just wanted to understand, how different this is going to be versus the earlier approach where PNB used to-
... it's from lot of builder finance or something like that. So how different are you this time?
Two things, we'll be starting to operate, you know, in next couple of months, and this time it will be very different. We will stick to basics, and we focused on ticket size around 200-odd crores. We will not get into chunk PD, and this will be only into construction finance, and in terms of scale and size, corporate business at any given point in time will be less than 10% of the overall portfolio.
Okay, got it. That was really helpful, and thank you so much.
Thank you.
Thank you. The next question is from Harshit Toshniwal from Premji Invest. Please go ahead.
Yeah. Hi, sir. Am I audible?
Yes, you are audible.
Sir, on this Affordable piece itself, that you mentioned that the incremental yield, which we are having, is roughly around 12-12.5% right now. But now, if you look at this segment and the other peers, now, do you think that this is a good enough yield to charge for that customer segment that can cover our OPEX and possible sustainable cyclical credit cost? That is the one. And the second part, sir, also, how much of our new disbursements in this segment is through DSAs, specifically the Affordable one? If you can help on that aspect. And when I say DSA, when you say that in-house, I mean employee sourcing mostly through DSAs, I would also want to look at that mix, the direct versus DSA part.
And third, sir, if you can just give a breakup of the employees between the Prime, Emerging, and Affordable, as on today.
In terms of, see, within Affordable there are three segments. So, low risk, medium risk, and high risk. So if you look at our yield in the first year, let's say in last year, the yield was about 11.2, 11.5, and this year we have guided yield of about 12.6%. And for next year, the yield is going to be more than 13%. So this will be largely driven by, you know, change in segment and change in profile, both salaried and self-employed, right? And we will be focusing on low risk and medium risk, so we will not really focus on high risk segments. And therefore, according to us, I think yield from, Affordable segment would be, you know, a little lower, 13% is what we would focus on.
There could be opportunity at a lower yield, there could be opportunity at a higher yield, but I think our focus would be on low risk and medium risk, and in terms of the next year, it is going to be little lower, 13%.
Sir, just to hear that, at this point of time, when we look at our disbursement, are basically customers who would have otherwise gone to HFCs, like, say, after some hours. So although the larger set of HFCs , our customer segment, they're very overlapping. And the second part was related to this itself, of the incremental disbursement. How much is between, in our case, where we are basically, where basically it's not a new loan, but it's more coming from somewhere else?
So in terms of the customer profile, I think, to a large extent, if we talk about low risk and medium risk, I think the customer segment is same.
Okay.
Number one. Number two, in terms of BT, percentage is about 25%-26%.
Okay.
And, one more question I'd ask in terms of what is the mix between direct and DSA? DSA is 31% in Affordable and the rest is direct.
Got it. Got it. And sir, one last thing, I think on the employee part, you can give the breakup of employees between the, specifically the sales or basically the branch employees within.
See, I, I think, you know, for us, whether it is credit or sales, basically, we have a branch structure. So in branch we have different categories, low potential, medium potential, and high potential. Low potential would have one sales manager, one credit manager, and one ops rep. If it is a mid-size, then we would have one sales manager and probably one ASM and one underwriter. If it is a big branch, then we could have two underwriters and we could have two ASMs and one salesman. This is our structure. In terms of total headcount,
Out of total headcount on, say, sales side, on overall basis, around 25% would be Roshni, Affordable. Rest is between Prime and Emerging.
Okay, 25% would be Affordable. So I remember, sir, you last time mentioned that there were 333 employees in the Affordable segment.
Now we have a little over 400 employees in Roshni.
Okay. Got it. Got it. Thank you.
Thank you. Next question is from Viral Shah, from IIFL Securities. Please go ahead.
Yeah, hi. Thank you for the opportunity to ask. Let me ask the question, and congratulations on a good set of number. So, I'm very sure first question was on the point of with regards to the NIM. I know that this was asked, but wanted to check, given where we are, does it make sense for us to, say, raise the guidance? Or as you mentioned, that this is the threshold, is it after taking into account, say, any impact of potential rate cut?
Yeah, that's right, Viral, the environment is slightly volatile.
... So we are factoring in the impact of the rate cut that can come in. Our endeavor is to maintain 3.6%+ , but yes, as a guidance, we would like to maintain 3.5% for the year.
Got it, Vinay. And, Vinay, as we go ahead, as the mix, kind of, changes, a bit more in terms of borrowings, do you see this, the cost of funds further inching up?
No, not really. Cost of fund, for us, should remain in the similar range. Actually, we, it should see a downward trajectory.
Got it. And, the last question I had was with regards to the asset quality front. So you have given this data with regards to the 12 month and the 24 month MOB, how the delinquencies have trended on 30 and 90+ . Can you help us with whatever this number, say, couple of quarters back? And also, secondly, if you can help me with regard to the Affordable segment of this piece.
See, Viral, the early mortality always has been the focus of the company to monitor the early delinquencies of 12 months, which we have strengthened now to cover even up to 24 months, so if I look back a couple of quarters, I think these numbers are a shade better than the earlier times, and having said that, and even on the Roshni. Roshni is a pretty new book, around 3,000-odd crores. So there is hardly, I think, 10, 12 number of cases into NPAs, which our resolution is in process with sufficient cover available. That's not a significant number as of now.
Got it, Jatin. Jatin, when you said that, these overall numbers are a shade better than what they were, are you referring to, say, versus two or three years back, or are you referring to, say, two or three quarters back?
Around 6-8 quarters back, and this I am talking only on aspect of early mortality. Overall also, as you can see the graph quarter on quarter on NPAs, particularly, coming down each quarter. That is on NPAs, but having said that, the pre-delinquency management has been strengthened because the business is on a growing, growing spree now. We need to have stronger controls to restrict flows. If our flows are restricted and well, we have a well-defined strong mechanism in terms of taking properties to surface and then auctioning it on a regular basis. Almost, we are selling two properties a day now. That machinery will take care.
Got it. That makes sense, and thank you so much, and all the best.
Thank you.
Thank you. The next question is from Omkar Shinde, who's an individual investor. Please go ahead.
Yeah, thank you for taking my question. I have a few clarifications before I ask my question. So we said that, we target one lakh crore revenue by FY 2027, and 15% of it will be Affordable. Was that correct?
Yeah, that's right.
Okay, and two more clarifications. In one of the previous questions, you had said that credit cost in the Affordable segment could be somewhere in the region of 50, which five-zero, or was that 15? I did not get that properly.
Five-zero. Five-zero.
Five-zero. Okay. And now coming to the question. So again, with respect to the branch structure, you had said the small branch will have one salesperson, one credit person for the small branch. So is this also applicable for our Affordable branches? Because now, as you said, 12-15 months is the gestation period for a branch to reach 3.5 crore disbursement per month. So some of our earlier branches would have reached that. So would they still? So where in the small, medium, large would these earlier branches be now? And how, and could you just reconfirm the medium and large structure?
What I had mentioned was for Affordable, and what would happen is that, let's say you open a branch, okay? And, depending on the potential, you will increase the manpower, and then the branch could seek to get, you know, peak level of 3.5 crores. This also has a combination of, A, geography, B, in terms of potential. On an average, we, let's say, you know, we have let us say 300 branches, with a vintage of let us say between 2- 18 months, and on an average, I think the peak could be about 3.5 crores. The branch structure, what I mentioned, was for Affordable.
On the Emerging and on the Prime, so one branch could have multiple liaisons, multiple AOs for the field executive, sales executive, and one branch manager, when it's a branch manager, sales manager, and then you would have team and others.
Understood. So I was asking with respect to that only, from the Affordable segment. So when the branch reaches its peak level of 3.5 , four crores, what is the structure? And, like, is that at that point of time, it is like a large branch or a medium branch? That I wanted to understand.
So, let us say we categorize ABC category, right? A category branches would be doing, let's say, about 6-7 crores. B category branches could be about, let's say, between 4-4.5 crores. And C category branches at its peak, you know, would be at 1.5-1.8 crores only. So it depends on the category of branches, which is-
Understood. Understood.
Related to the potential and the geography, and therefore I always, you know, talk about average.
Understood. Now with respect to sanction to disbursements, what I have seen is on a quarter on quarter basis or from what is mentioned in slide number 20- 21, our sanction to disbursement ratio has dropped to 56% approximately from 75% in Q2 last year. Why is there such a big drop in the sanction to disbursement? And are we going to see such lower effect in the coming quarters for this? I just wanted to understand this.
You are referring to the Affordable business?
Correct. Yes. Slide number 21. So INR 630 crore of disbursement against INR 1,111 crore of sanction. So 56%. So there is a big drop from last year, where it was approximately 75%. So why is there a decline?
Yes, so, there is a decline only because of some process-related changes that we have done in July. But, if I look at my, so the quarterly numbers are lower as compared to the previous quarters. However, if I look at standalone numbers for August and September month, our conversions are back in order, and, from next quarter onwards, you'll be able to see the similar conversions upwards of 70% as we move forward.
Understood, understood. And finally, with respect to the incremental yield, we are at approximately 10%, as per the slide mentioned.
Right.
Where does the incremental yield settle over the next three to four quarters? Because when the rate cut starts to come from RBI, we will also have some, we have very little headroom. So what do you think that the incremental yield and the overall yield will peak out in the Affordable segment?
So when it comes to incremental yield, we are confident. We will move towards close to 13% yield. See, I think the context is today, if you look at, you know, our cost of borrowing is around 7.8, 7.85, right? With this cost of borrowing level, we are talking about Affordable yield of 13% in next year. Suppose, let's say, the rate goes down, let's say, by hundred basis points, so then the 13% will slightly moderate to that extent, might slightly come down. So what we are saying is, we will protect the margin. So for Affordable business on a steady state, the yield is going to be 13%+ , 13 to the 13.0 point, 13.2% , given the current cost of borrowing.
If there is any change in the cost of borrowing, accordingly, the yield will vary.
Okay, understood. And just finally, one last one. The overall OPEX to AUM is also increasing. That is, I think, as a function of us expanding the branches very fast. So where does that finally settle, or say, by FY 2027, when we reach the one lakh crore AUM? Can you guide where in the ballpark range would that OPEX to AUM be?
See, we are expecting it to settle at the current levels of 1.1%- 1.1%, where it is right now. A large part of the upfront investment is done, now it will be a minor investment of 40-50 branches every year, which we will manage through the economies of scale in other business.
Okay, thank you. That was helpful.
Thank you. The next question is from Nikhil Kumar Agarwal, from VT Capital. Please go ahead.
Hi, thank you for taking my question. I just had one question. You said that NIM will start improving after a few quarters, and since cost of funds is going, like, incremental cost of funds is going to be at the current level of 7.8%, and yields are improving across products, then NIM should ideally start improving right now, right? As in from the next quarter itself. So it should do very well, as per whatever you have said about yields and cost of funds. So, can you please shed more light on this?
So there are a couple of things. One is, we will be starting corporate shortly. Once we start corporate business, you know, then that we, it will add to yield. Number one, it will improve margin. Number two, we also have on-book depletion on tenure and yield, and to a very, very small extent, on the Affordable. So that is one, which will again impact the revenue and base of the margin. Number three, we also have a repricing policy, where we try to retain the customer, you know, and switch from a higher interest rate to a slightly lower interest rate. Now, these things would pull the yield down. While on one side, the yield would come down because of a foreclosure, because of repricing. On the other side, we are changing segments.
We are moving more towards Affordable and Emerging. We are increasing, you know, the mix change, which would come at a higher yield. So this would, you know, ensure that the yield will go up. So because I think this balancing would play out in next 2-3 quarters, and hopefully the interest rates are going up.
Okay, so because of the dragging effect of the things that you mentioned, the current yields will be maintained for a few quarters, and then net net yields should start improving after 2-3 quarters, is what you're saying, right?
Yeah.
Got it. And one last, one clarification that you have already mentioned this, but I couldn't get it earlier. You said that once we start corporate book in a few months, the difference between this new corporate book and the one we used to have is in terms of ticket size. So if you could please mention the differential ticket size, that you did mention earlier as well. And the other thing that you said was, so what was the other thing? Ticket size, and the other thing was?
So one is, we will start this business in very few select cities. We would focus on good quality developers, Category A and Category B. Third, we would do largely, you know, construction finance business. We'll keep the ticket size lower. So basically, we would focus on very good quality of developers and good projects. There, the yields could be lower compared to what normally, you know, this business would fetch. We are looking at a yield of about around 12, 12.25%. The yield should be lower, much safer business. So that, these are the changes.
Okay. Yield would be 12-12.25%?
Yeah.
And ticket size would be?
About INR 200 crores.
INR 200 crores, and ticket size in the corporate group that we used to have earlier, that was?
That was about INR 350-400 crore.
Okay, perfect. Thank you so much. Best of luck for the upcoming quarters, and congratulations on a good quarter.
Thank you.
Thank you. The next follow-up question is from Harshit Toshniwal fromPremji Invest . Please go ahead.
Yeah. Hi, sir. Sorry, just one thing which is left. Sir, I'm just trying to do a calculation, that we have 630 crore of quarterly disbursement in Affordable, roughly 200 crore per month, and you said 70% is in-house. So that converts to 150 crore of disbursement per month in the Affordable. Am I right till here?
Yes, you're right.
Then, just one question: is that if, say, you say that 400 employees is what we have, this segment sales force, then that works to something like 3.7 million per employee per month disbursal, which is say 2x , 3x of any other year. So if you can help me, is our direct sourcing, or basically non-in-house sourcing much higher than 30%, or where am I going wrong? Because 3-4 million disbursement per employee per month would mean sourcing of at least 7-8 million.
Harshit, yeah. Harshit, I'll just clarify that. So four hundred employees that we talked about, these are like all the full-time employees in Roshni business. They are spread across sales, credit, operations, legal, technical, all the various functions, right? Plus, on the top of that, we... See, when it comes to our DSA team, the people stream that we have, the sales staff, the frontline sales staff-
Right.
that is managed through our subsidiary, which is PHFL, and that number for sales right now is around 900. So, just to clarify it further, if I take a monthly volume of about, so September we did 275 crore. Out of that, about 59%, close to 70% of business was sold in-house through these 900 people.
Okay.
My average productivity per sales staff, per sales employee, typically is around INR 20-INR 25 lakhs per month.
Understood.
I hope that clarifies?
Yes, that helps, sir, because this 900 is basically our... So it's a 100% subsidiary which does-
Yeah.
- speak for us.
That's correct.
Okay. And, okay, the cost of this will be more the... I just wanted to understand more about the subsidiary. Does this holds purely for PNB Housing Finance in Affordable, or-
Yes.
Do they other?
Yes. No, no, not, not specifically for Affordable. They, they support all the, all the three businesses, Prime, Emerging markets, as well as Affordable.
Ah, okay.
These 900 people are dedicated Affordable business sales staff.
They do business only for PNB Housing.
Yeah.
Got it. Okay.
Thank you. Ladies and gentlemen, we'll take that as our last question. I would now like to hand the conference over to the management for closing comments.
Thank you everyone for joining us on the call. If you have any questions unanswered, please feel free to get in touch with investor relations. The transcript and the audio of this call will be uploaded on our website, that is, www.pnbhousing.com. Thank you.
Thank you very much. On behalf of PNB Housing Finance Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.