Ladies and gentlemen, good day and welcome to Repco Home Finance Q2 FY 2025 earnings conference call hosted by Yes Securities. 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 Mr. Rajiv Mehta from Yes Securities. Thank you, and over to you, sir.
Yeah. Good evening, everyone. Welcome to the second quarter FY 2025 earnings call of Repco Home Finance . We thank the management for giving us the opportunity to host them once again. From the company we are joined by Mr. K. Swaminathan, M.D and CEO. Mr. T. Karunakaran, Chief Operating Officer; Mr. P. K. Vaidyanathan, Chief Development Officer; and Mr. M. Raja, Chief Business Officer. I would request Mr. Swaminathan to give an overview of the company's performance, post which we'll open the call for Q&A. Over to you, Swaminathan, sir.
For the quarter ended September 30, 2024. We are happy to announce that the growth momentum seen in the last few quarters has continued in Q2 FY 2025 as well. The company is progressing on its business parameters and is positive of meeting its scaling numbers. The profitability parameters have improved steadily in the second quarter compared to the period year ago. The structural changes that have been brought in the process across the organization, like delegation of powers, implementation of new software, verticalization, et cetera, are yielding results, and we are confident that we would be able to see the combined effect of all these changes in the months and years to come. Business updates.
We have disbursed INR 867 crores in Q2 FY 2025 against INR 797 crores in Q2 FY 2024 and INR 680 crores in the previous quarter. Our sanctions stood at INR 926 crores in this quarter as compared to INR 860 crores in Q2 FY 2024 and INR 737 crores in the previous quarter. The overall loan book at INR 13,964 crores at the end of September 30, 2024 as against INR 12,922 crores the year back, registering a growth of 8.1%. The ratio of exposure between non-salary and salary segment stood at 52% and 48% respectively. The share of non-housing loan, that is home equity, stood at about 26% of the loan book, and housing loans contributed about 74% of the book. Quality of the loans.
GNPA amounted to INR 552 crores as of September 30, 2024, as against INR 636 crores as of September 30, 2023, and INR 583 crores as of June 30, 2024. Net NPA stood at INR 217 crores at 1.6%. We have a total provision of INR 489 crores with a provision coverage of 61% for stage 3 assets. Our systematic and relentless action on NPA accounts is yielding results. As of September 30, 2024, we hold INR 485 crores of reset portfolio of serving, of which approximately INR 154 crores are in stage 3 and remaining in stage 1 and 2. Profitability. Our NIM for Q2 FY 2025 was at 5.1% against 5.4% in Q2 FY 2024.
The company has been able to maintain a spread of 3.4% by raising NIMs to 12% despite facing stiff competition at our pricing levels. The net profit grew 15% YoY, amounting to INR 113 crores for Q2 FY 2025 as against INR 98 crores for Q2 FY 2024 and INR 105 crores for Q1 FY 2025 respectively. Our ROA stood at 3.3% and ROE at 16% for Q2 FY 2025 as against the respective figures of 3.1% and 16.1% in the year at quarter. Cost-to-income ratio for the quarter stood at 26.4% as against 23.6% of the previous quarter. New software. Phase I of the project comprising of LMS and EDM is stabilized. Phase II of the project comprising software relating to support functions are in various stages of implementation and testing.
A total of approximately INR 27 crores have been spent so far on the new software. As of September 30, 2024, we have 257 touchpoints across 12 states and one union territory comprising of 184 branches and 43 satellite centers with additional two asset recovery branches. We will be touching approximately 250 outlets by March 2025. I will summarize the key financial highlights before opening the floor for Q&A. The loan book stood at INR 13,964 crores. PAT for the quarter was INR 113 crores with a 15% increase YoY. ROA and ROE for the quarter stood at 3.3% and 16% respectively. The core profitability has remained strong with a solid spread and margin of 3.4% and 5.1% respectively. The gross NPA is at 3.96% with a stage 3 coverage of 61% of the principal, and the net NPA is at 1.6%. Way forward.
We have recruited people with experience in sales and collection verticals. With this additional strength, our focus would be on taking the growth numbers to the next level and reducing our overdue numbers, and we are quite positive on this. The company is geared up on achieving the targets set for FY 2025 in terms of profitability, GNPA reduction, disbursements, and AUM. We thank each and every one of you for immense interest in our company's growth story. Thank you once again, and we now open for the question and answer session.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Vikas Kasturi from Focus Capital. Please go ahead.
Yeah. Good evening, sir, and congratulations on a fantastic quarter. Sir, I have two questions. One is, in the presentation that you shared, could you also start sharing some color on how the old portfolio, that is prior to FY 2022, is performing, and the new portfolio, which is being written after FY 2022? I think you have already disbursed about INR 7,500 crores plus in the last two and a half years. So it would be good to know how the two parts of the portfolio are performing, sir. That is one request. The second one is, in the month of May, you had shared some goals for this particular financial year with respect to, you had said AUM of INR 15,000 crores, 250 outlets, INR 3,800 crores of disbursements, and GNPA below 3%. Could you just share your perspective on how are we faring vis-à-vis the goals?
Are we likely to reach our goals, overshoot our goals? Some color on that, sir. Thank you very much.
Thank you, Vikas. See, out of the INR 7,500 crores we have disbursed, INR 50 crores is the NPA of the last three years, 2022, 2023, and 2024. INR 50 crores approximately is the NPA numbers. So NPA percentage is around less than 1%. So the new book, as far as NPA is concerned, is performing reasonably well. As regards goals, we have also discussed internally, so we still maintain our guidance as far as disbursement is concerned. We had told between INR 3,600-INR 3,800 crores. We still maintain that number as far as disbursement is concerned. On AUM, as of now, because of the repayments or the run rate that is going up, maybe instead of INR 15,000 crores, maybe there is a likelihood that we may fall short. Maybe instead of INR 15,000 crores, we may be around INR 14,800 crores or something. This is our expectation.
This is an organic growth. If at all we come across any book buying or any debt transaction that we may encounter during the next two quarters, definitely that is added. Still we will be reaching the AUM numbers. GNPA, we have told INR 450 crores as the GNPA number. We still maintain that. As far as number of outlets are concerned, we have given a guidance of INR 250 crores. I think we already have INR 227 crores outlets. We have already opened two branches this quarter. So we are hopeful that by the year-end, we will be anywhere near to INR 250 crores.
Great, sir. Thank you for your responses. If I may ask one more question, sir. On the liability side, we seem to have majority of our borrowings from commercial banks. In the future, is there any plan to add, say, securitization also as one of the means of raising funds? Could you just shed some light on that, sir?
Okay. Maybe as of now, liability, we are also approaching NHB. The NHB proposal is in the pipeline. Maybe we may get some NHB loans during this current year. We are also thinking of tapping the market through our NCD routes and all. We have got approvals from AGM as well as our board. If times are favorable to us, definitely we will tap the NCD market. We have not got any fixed plans as far as securitization is concerned. Of course, DA may not be there. We will see. Any PTC transactions, if at all anything is coming by, we will have a look. But as of now, we do not have anything on the table.
Thank you. Thank you, sir. Thank you for the responses. I will come back in the queue.
Thank you, sir. We take the next question from the line of Raghav Madhavan from Kotak Mahindra Bank Limited. Please go ahead.
Sir, congratulations on the recent results. Sir, I would like to understand in very similar lines of the previous question. If you can just pick out the last two years' cohorts, and in that, what are the early bounces in delinquency, say, PAR 30, what is the PAR 30 in the last two years' cohort?
Thanks, Raghav. I do not have the numbers right away. Maybe we will be able to share. But to my understanding, the percentage is lesser than the old book. To that extent, I can say, but the exact numbers I do not have.
Okay. Sir, if not, some guidance on typically after what period of time in your loans you would see increase in stress levels coming up. Some guidance on that, would that be possible?
I think that will come across the Can you mute, sir?
Mr. Raghav.
I am hearing something else.
Mike, sir.
Okay.
Raghav, as I mentioned, I am not seeing anything alarming in the new book. Nothing alarming. Of course, overdues are there, but comparatively, as I said, comparatively, the percentage-wise overdues are lesser than the older book. But still, as you say, there should be at least a three-year seasoning before we can straightaway call that the book is holding well. That three-year period is still not over, but as of now, there is nothing alarming. At least there is not much of a serious NPAs or early modalities NPAs.
Understood. So, definitely putting the same question. What percentage of your existing NPA, say, from your NPA, the recent three years NPA which you got into it, and the legacy portfolio is what percentage of that?
That is what I was saying. Out of INR 552 crores, INR 50 crores is of the last three years book. The remaining INR 502 crores are the old ones. Out of INR 7,000 crores, I do not know what is the exact outstanding today, because some repayments also would have happened of the disbursements that we have made in the last three years. I do not know the exact outstanding, present book outstanding of the INR 7,000 odd crores we have disbursed in the last three years. Assuming that INR 1,000 crores have been repaid, so INR 50 crores out of INR 6,000 crores of outstanding is the NPA percentage of the last three years.
From my side. What is the total write-offs for the last 12 months?
INR 13 crores. In the last one year, it is INR 13 crores. This INR 13 crores is only a technical write-off. Entire history of the company, actual write-off may be less than INR 15 or INR 20 crores.
Understood. Thank you, sir. This was very helpful.
Thanks.
Thank you, sir. The next question is from the line of Aniket Kulkarni from BMSPL Capital. Please go ahead.
Yeah, good afternoon, and thanks for the opportunity. To reach our targets of INR 3,700 crore disbursement for FY 2025 as a whole, we have to grow about 30% in the second half on a year-on-year basis, right? Now, given the company's track record on the growth front in the previous quarters, this seems unachievable. If you can give a realistic growth target for the second half and if you can explain why are we finding it tough to grow in double digits where other NBFCs are reporting such strong growth numbers. If you can please explain.
Thanks, Mr. Kulkarni. I could not understand the second part of your question. If the question is related to whether we will be able to reach the number, whether the second half will be better than the first half as far as disbursement, yes, definitely. Two or three reasons. One is, we have started recruiting people for the sales vertical. Those people have started joining and some more people are in the pipeline. These new salespeople, we call them BSM, these new salespeople will be able to deliver because we have recruited them from the market. That is a confidence that we are getting for the improvement in numbers. Historically, this company, the second half will always be far better than the first half, especially the first quarter of a year will not be all that good. But the third and fourth quarter should be reasonably good.
Based on that and based on the new initiatives that the management has taken, we are quite confident that we will be able to do around 2,000 odd crores of disbursement in the second half.
Okay. Thank you. Thank you. No problem.
Thank you. We take the next question from the line of Rudraksh Kalra from MB Investments. Please go ahead, sir.
Am I connected?
Yes, sir. Please go ahead with your question.
Yeah. Hi, good evening. My question to you is, what is your strategy going forward? There are so many competitors like Aadhar, Aavas and there is NBFC and small finance banks, MFIs, everyone getting into the housing finance affordable, particularly affordable housing finance. What is your moat and how do you differentiate yourself from these companies? I would like to particularly know what the moat is for Repco against Aadhar, say Aptus and the other affordable housing finance companies. Thank you.
Thank you, sir. The names that you have mentioned, I think the profiling of the customers they are targeting is slightly different from our customers. You would have seen most of our customers, at least more than 50%, are all documented income customers. Our CIBIL score on an average itself is around 750 on the new borrowers. So that way, we are totally different. On the interest rate front, yes, of course, these companies, the names that you have mentioned, their interest rates are higher than ours. So we are in between pure prime housing finance companies and the companies that you have mentioned. Our minimum lending rate is around 10.10% as of now, compared to the interest rates of the other two ends. This is the differentiator between our company and the other companies.
Okay. The other question, there is another question. Hello?
Yeah.
Hello. Just a second.
Yeah, it is correct.
The other question is particularly towards your business development head or sales head. You guys have said that 15% would be the disbursements around that. I am not sure if I am wrong, but I do not think it is at 15% as of now. So if you could shed light on the strategy and how you are going to go about and reach to the 15% number or somewhere close to that will be really nice.
Mr. Kalra, I will ask Mr. Raja, our Chief Business Officer, to answer this because the points I have already mentioned, what are the strategies and all. In order to reiterate, my friend, Mr. Raja will also add.
Yes. Thank you, Mr. Kalra. Raja here.
Thank you.
Traditionally speaking, in our organization, the H2 numbers have always been higher than H1 numbers. Even though my H1 is not 50%, we normally expect a better business in Q3 and Q4. That is one part of it. The other part, we are already in the process of recruiting persons and resourcing the hardcore salespersons in the market. They are all joined, or they are all expected this quarter. Our sourcing will get better, and we are also adding multiple sourcing channels, like our corporate DSAs, my connectors, my traditional walk-ins. We are focusing on all the sourcing channels. We believe, and we are sure that our business will be better in Q3 and Q4 so that we can meet the committed numbers.
Okay. Just to follow up on that, is this also being done by the other affordable housing finance companies? I am sure pretty much they must also be doing this.
More than me comparing with others, I am giving out my strategy. Yes, everybody would be aggressive, and it is a general trend that Q3 and Q4 would be better, and I hope so.
Cool. Thank you so much. The questions are answered to quite a lot of my satisfaction. Thank you so much.
Thank you. We take the next question from the line of Bunty Chawla from IDBI. Please go ahead.
Thank you, sir, for giving me the opportunity. Sorry I joined late, if I am repetitive for that. In this quarter, what we observed, there has been a higher repayment rate or repayment ratio as compared to last few quarters. If you can explain that part, what is driving this, and how one should see this rate going forward for next two quarters?
This is a valid point, Mr. Bunty. Others have not asked this particular question. I agree with you. I concur with you. The repayment rate has actually gone up. We are now getting a repayment of around INR 200 crores approximately per month. It was around INR 150 crores one year back, something. Per month. This includes a normal repayment of around INR 50-INR 55 crores, as well as prepayments and takeovers. Comparatively, the BTOs are slightly increasing on the higher side, especially in the second quarter it is on the higher side. Maybe because of the competition, especially from bank side. The banks rate, we are unable to compete at the rates that we are being offered by banks. That is one reason. BTOs, in our view, is inevitable because the rate differential between our rates and the bank rate is too much for us to match such rates.
What is the strategy is, one, we have to increase our BTOs, that is one thing. We have to increase our disbursement number so that net to net, we are a gainer. These are all the strategies. And how we are increasing, I think this has already been answered. So way of is how to prevent it. Beyond a point, we cannot prevent. Of course, we have got strategies of calling them, retaining the customers, having our own way of, through a CIBIL check, we are finding out which are the customers likely to go, meeting them, trying to see whether it is possible for us to reduce interest rates so that they retain with us. All these strategies we are adapting.
But despite that, I should admit that some portion of our repayments are BTOs, and we have to limit it, and we have to increase our disbursements to match.
Okay. In that case, our target was INR 15,000 crores to reach by FY 2025 AUM. Is it achievable now?
That is what I said in the initial question. Maybe if the same rate of repayments happen, and if we are going to do only around INR 3,600 crores, I do agree, maybe we may fall short by around INR 100 crores- INR 200 crores of our INR 15,000 crores of AUM that we have given. This is only if it is only INR 2,000 crores. If for some reason we are able to increase, say, for example, the government has announced the new scheme, housing finance scheme. If we are able to get good numbers through this scheme or by opening new branches, the new branches are contributing more or things like that, we may be able to even surpass. Again, these are all organic growth. There is also a possibility that we may come across any inorganic book buying, DA transaction and all that.
That may also add to our things, and we may reach. Worse case scenario, if we go only on this trend, and if the repayments are also on this level, greatly we may fall short by around INR 100 crores, INR 200 crores as far as AUM is concerned. Disbursements, we have discussed with the team also. The team is also confident that we will be doing around INR 3,600 crores to INR 3,800 crores.
Okay. That was very helpful. Lastly, on the margin front, though currently there does not seem to be a rate cut situation, but if the rate cut happens, what will be the impact on our margins for us?
Okay. See, as far as the current rate is concerned, we have also been passing on mostly. In fact, we have increased our MLR by 10 basis points from this month. Already one increase we have done on the month of May. 20 basis points we have already increased in the current year. In case it starts falling, we do not expect that to happen immediately. In case it starts falling, I do not see any outflow immediately. Not only that, we are also replacing every quarter, so any downward movement also will get replaced within three months. The customer will be given an assurance that such rate cuts will also be passed on to him, so he will also get that benefit.
Okay. Thank you. Thank you very much, sir, for that.
Thank you. We will take the next question from the line of Anand Mundra from Soar Wealth. Please go ahead.
Hello, sir. Sir, congratulations on good results. One request, can we get the breakup of GNPA on old book and new book as part of quarterly presentation?
Yes, Anand. Yes. Suggestion is taken, sir. We will definitely take. But what is new book, what is old book? How to decide?
Pre-COVID or post-COVID or when your tenure started, whatever. Because, sir, old GNPA is actually giving a wrong picture with respect to NPA profile of the company. The second question was, is there any possibility of writing off GNPA? Though I know it is recoverable, but so that the headline GNPA number reduces and we may get better credit rating.
See, credit rating is not only written only on GNPA numbers. Credit rating, they analyze various other factors. As far as writing off is concerned, this company has not done any actual write-offs. But technical write-off, yes, we have done. Definitely we will take a view. May not be in the third quarter. In the fourth quarter, we will definitely take a view on the technical write-offs.
Yeah, because there will not be any impact on the PNL, but it will just be a written off because we already have a provision, sir.
Yeah.
Third question-
The company will take a view in the fourth quarter.
Okay, sir. Sir, third question was, what is the reason for increase in depreciation and amortization expenses in this quarter?
There was a small mistake in the first quarter, sir, on the write-off user side.
Okay.
That got rectified in the current quarter. That is the only difference. There was a small error that we rectified.
Okay. This number is slightly higher than the normal numbers, this quarter numbers.
Yeah. You are right, Anand, but if you average, I think it will be same. See, INR 5.50 lakhs was the last quarter. I think INR 2.75 per quarter. I think if you average, it is same every quarter, more or less same.
Okay. Understood. And sir, what is the guidance on credit cost for this financial year?
Credit cost will be marginal or almost nil. It will be very much negligible because of the recoveries we are making. In fact, the write-backs will be more this time because we have already estimated a write-back of INR 15 crores for the current year. We have done around INR 13 crores this quarter. So actual credit cost may not be much. I think we should be able to absorb any new NPAs.
Okay. And sir, are there any slippages in NPA in this financial year, in the first six months? Because of recovery, it may not be reflecting it.
You are right. See, I do not have for the full year. For the current quarter, I can tell. INR 37 crores was the slippage, INR 67 crores was the recovery.
How much was the slippage, sir? INR 67 crores?
INR 37 was the slippage.
Okay.
67% was the recovery.
Okay. And sir, your guidance on disbursement for this financial year, you said it maintain at INR 3,600 crores, sir?
Yes, Anand.
Okay. And sir, any possibility of increasing dividend for the shareholder? The dividend payout ratio is very poor. As such, we have enough capital for growth.
I think I am not the correct authority. It will be decided in the board, but I think 30% is a reasonably good dividend in my view. Still, it will be taken, viewed by the board.
Actually, sir, if you compare it with the EPS, then the percentage number is very low. It can be in respect to if the EPS is much higher, sir. With respect to share price, face value, sir, I think 30% is good, but with respect to EPS, the number is very low, sir. You can propose this to board if at all it is accepted. Yeah.
Yeah.
Your point is taken, sir.
Thanks a lot. When we are proposing, we will say.
Yeah.
Yeah.
Thanks a lot, sir.
Thank you. Before we take the next question, a reminder to all the participants. If you wish to join the question queue, you may press star and one on your touchtone telephone. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.
Yeah. Good evening, everyone. Thank you for taking my question. Sir, first question is, again, I am just trying to understand because historically, your Q2 disbursements have always been slightly lower than Q3 disbursements have always been slightly lower than Q2 disbursements. So if you could just explain why that is the case for us. We do not see it in the rest of the mortgage industry. So, anything unique to us with regards to Geography, Tamil Nadu, Karnataka, where we are majorly present. Is that the same expectation that you have for this quarter as well, that sequentially disbursements might be a little lower than Q2? That is the first question. The second one is, OPEX this time was slightly elevated. I do not know if you addressed this earlier in the call.
Are there any one-off items which are there, which has led to slightly higher OPEX for you in this quarter? Thirdly, I am seeing a very good traction on our fee/non-interest income. Anything that you are doing there structurally, which might improve your fee income or non-interest income profile? Those three questions.
Thanks, Shailesh. This Q3, it is slightly lower maybe in the last three years. I could not get any reason, maybe because of floods, especially in the southern part. Maybe that could be one of the reasons. Second, festival months, both October, big festival months. October, Navratri, and November, Diwali. Actually, both the festivals entered in October. November and December are relatively festival-free. That way, the numbers should go up this Q3. Second one, floods, of course, that is not in our hands. Let us hope that despite floods, we do better numbers this year. OPEX is elevated is only because of depreciation, which I explained in the previous call. Only because of depreciation that were on the right-of-use asset . Only because of that reason, there is an elevated depreciation in the current quarter.
Third one, in the non-interest income, luckily we had some advantages this quarter. One is on the insurance. Insurance commission has gone up. I think you may be knowing. The commission being shared by the insurance companies to finance companies like us. Definitely it is going up. That is one of the reasons. Other than that, in the current quarter, we had a recovery from technically written-off accounts. It was INR 8.43 crores against INR 2.83 crores in the last year. Same way, in FT, we had some surplus funds which we deposited in fixed deposits. That gave us a good income of around INR 15 crores this quarter.
Got it. Just a follow-up on that. Basically, the non-interest income component, which is a combination of insurance commissions and recoveries, they are a little lumpy this quarter and will not recur unless, of course, if we are able to continue the same level of recoveries from written-off accounts as we have seen this quarter.
Okay. Insurance definitely will go up because it is also dependent on the disbursements. The more disbursement I make, I may get more insurance income. Insurance, I do not think there is any reason that may drop. Recovery from technically written-off accounts, yes, last quarter maybe we had a big recovery in some of the accounts. We still have nearly INR 100 crores of technically written-off accounts. Any recoveries we are making in those accounts will help us. We are quite hopeful that because of the recovery efforts that we are making, we will be able to maintain if not INR 8 crores, definitely there will be a sizable income from these written-off accounts. And fixed deposits, we have now decided as a policy to keep around one month to one and a half months of disbursements in fixed deposits.
More or less, the income will continue.
Got it, sir. And sir, sorry to kind of labor upon this. While you said you explained it to the previous participant, why is the depreciation you said has moved up from INR 4 crore to INR 9 crore sequentially?
I could not get you.
You said, right, I mean, the depreciation is higher this time around. So you gave a reason for that. What was that reason?
There was our mistake. There was an error in the first quarter on the amortization of this right-of-use asset .
Got it.
The next quarter there will be a dip in the depreciation. Okay?
Understood, sir. Great. Thank you so much. That is all from my side. All the best.
Thank you.
Thank you. Before we take the next question, a reminder to the participants. If you wish to join the question queue, you may press star and one on your touchtone telephone. We take the next question from the line of Raghav Madhavan from Kotak Mahindra Bank Limited. Please go ahead.
Thanks again. Sir, just wanted to have two questions from my side. On the asset quality part, can you give guidance what percentage of restructured book is at NPA now? And how is the performance of this book? That is one. Second, in general, want to understand in the geographies and market that you are present, how do you see the sector evolving, considering the larger view on the NBFC sector itself of over-leveraging, et cetera. Do you see such similar issues among your borrowers as well?
Okay. See, out of our INR 550 crores, the NPA from restructured book is only INR 150 crores as of now. Because once upon a time, it was around INR 200 crores. It is now only INR 150 crores in September 2024. Out of this INR 550 crores, INR 150 crores is from the restructured book. Okay, is it coming down? It is coming down slowly. It was INR 168 crores in June. It is now INR 150 crores. On the geography, see, the areas where we operate, competition is tough. I think I need not explain. Both in south and the west, almost all the housing finance companies are there. So competition-wise, it is okay. It is tough. But as regards the other issues that the industry is facing, especially the NBFC and MFI industry is facing, HFCs are not affected, I think you may be knowing.
The competition will continue as far as HFCs are concerned. Since we are the interest sector, the other scheme loan issues and all that are not applicable for HFCs.
Understood. Thank you, sir. That is it from my side.
Thank you.
Thank you. We take the next question from the line of Rajiv Mehta from Yes Securities. Please go ahead, sir. Rajiv, sir, your line is in the talk mode. Please go ahead with your question.
Yeah. Can you hear me now?
Yes, sir, we can hear you. Please go ahead.
Sure. Sir, I have a few questions, then I will just quickly cover them. In terms of sales and collection manpower, can you quantify what is the strength of sales now and collection now, and what is the addition plan the next six months?
Yes. Sales is 172 as of now. Collections is 180 as of now. Sales may go by another 20, 30 by year-end. Collections may not be much.
Okay. Understood. You spoke about engaging with DSAs, corporate DSAs and connectors of late. What is the current share in the disbursement, in Q2 disbursement? What is the aspiration of what share they can become?
It's going up. It was around 30% earlier. Now it is going up. In the last month it was around 40%, but overall, I think we may end up around 40% by year-end.
Oh, for the whole year?
Yeah. For the current year, we may end up, because that percentage is going up, because connectors we have added in the current year, so slowly connectors percentage is also going up, and DSAs are also going up. So overall, by year-end, both DSAs, connectors, DSAs, all put together may be around 40% compared to around 30% and odd percent last year.
Understood. Sir, can you comment on the reduction that we've also seen in stage 2 in this quarter? This quarter was not really very conducive, but still we've been able to reduce stage 2. How do we look at stage 2 numbers? Because it's still elevated at 10%, 11% odd. What is the aspiration of taking the stage 2 number by this March and maybe by next March also, now that we have added a lot of collection people for the buckets?
Yes. Our focus now, especially by the collection team, is only on stage 2 rather than even on stage 3. Stage 3 is separately being followed. Stage 2 is our focus area. Whatever reduction has happened, in fact, personally, the team wants to do still better. We are focused and this 10%, we are confident that we will be able to achieve this 10% of the AE. But still, it is on an elevated level compared to all the other peers in the industry. We are hopeful that in the next one or two years we will be on par.
Sure. One last thing on the incremental lending rate. While you gave out the profile of the customer from a credit score perspective being average 750, can you give us the incremental lending rate for home loan as well as for home equity and the incremental ticket sizes for both home loan and home equity?
Incremental ticket size, I can say it is 20%. One minute, the interest rate only I'll give you. Home loan is 11.2% in September. Home equity is 13.8%. Average is 11.8%.
Okay. And incremental ticket size, you said INR 20 lakhs for both?
INR 20 lakhs. I do not have separate thing. Overall, it is INR 20.3 lakhs.
Okay, sir. Thanks so much.
Thank you.
Thank you. We take the next question from the line of Kamal Mulchandani from Investec Capital Services. Please go ahead.
Hello, sir. Just a follow-up question on the previous participant. Did you say that the employees in the sales are only 170?
Yes.
If I'm not wrong, the total employee strength is around 1,325.
Yeah. Correct.
Can you then give the overall breakdown as well?
Yeah, I can tell you, sir. Sales, what we call sales people, the full-time sheet sales team is 170. It is not only they, the branch head is also doing. The branch head is around 200. So 200 plus 170, that is around 370 people are there for sales. The sales vertical, that is the junior level people who will be in the field, it is 170. The branch head also will do. In addition, we also have DSP for our R4, that is separate. All these people will be on sales. Collection is around 180. We also have credit people, we also have operations people, and we also have administrative level at head office, regional level. All put together is 1,250.
Okay. DSP are some separate numbers. How many are the DSP? Sorry?
That is not within this 4,003. 40. 40.
40.
4,325.
Okay, got it. Sir, I may have missed it, but did you just tell what was the BTO rate for the quarter?
The quarter is INR 65 crores.
Okay.
BTE was INR 121.
Okay, got it. And sir, any specific targets? Because you said that you would fall short of INR 100-INR 100 crore for the AUM guidance of roughly INR 15,000 crore. Are there any strategies that we would be able to meet this AUM growth target, maybe, or some strategies to reduce the repayment rate which the team is undertaking?
Definitely, sir. There are so many activities going on to stop this repayment as much as possible. We have engaged, there is one CIBIL Connect. We get triggers, we pass it on to branches, so that branches as well as from head office, we talk to the customer. We keep on engaging with the customers through various call centers and all that. We keep on engaging to get their feedback and all to satisfy them. We also have our own retention policy, thereby, wherever interest rate reductions are requested, we try to meet as much as possible the request of the borrowers. With all that, we are hopeful that the repayment numbers will come down. That said, some of the BTOs are inevitable. The way out is to increase our disbursement numbers as much as possible to meet the repayments as well.
Okay. Sure. That is it from me, sir. Thank you so much.
Thank you.
Thanks a lot.
The next question is from the line of Vikas Kasturi from Focus Capital. Please go ahead.
Hello, sir. Sir, in one of the earlier calls, you had mentioned that the people in stage 3, you were going to auction the properties, and that was going to force them to come and do the repayment. So any updates and progress on that activity, sir?
Sir, it is an ongoing project. It is not that we will do it only in one quarter. It is an ongoing thing. So whenever any NPA account reaches that auction stage, we will immediately go for auction. Sir, I will tell you how many auctions we did last quarter. See, in the current year, so far, we have issued 500 auction notices alone. In addition, possession notices, another 447. So almost 1,000 notices we have issued in the current year itself, in the current six months. In addition to the demand notice of another 1,700. So almost 1,700 notices we have issued in the first half year itself. This is an ongoing thing. It is not that we do it one month and stop next month. We also plan to do it aggressively.
In December, we want to do a mega auction and all that. That way it is happening. As I was telling you in the previous call, the auction success is not only how many properties we auction. It is also dependent on how many borrowers come to us for negotiation and how we are able to negotiate and get the accounts closed. Actually, if you see, the numbers will keep increasing. Only thing is we have to keep on mounting pressure on the borrowers.
Sir, if I may ask, thank you for that explanation. But a follow-up would be, sir, now, a lot of customers would be in the NPA bucket for many years, right? So are there still such people who have been in that NPA bucket for over, say, two, three years?
Yeah. As I was telling also, out of INR 550 crores, the recent NPAs are of only INR 550 crores, which means the pre-COVID is around almost INR 500 crores.
Okay.
These borrowers, in addition to the recovery actions that I have already told, we are also offering them some carrots in the form of a special OTS scheme. In the current year, we have formulated a scheme so that these customers come to us for negotiations. They are also getting satisfied that they are getting some discounts in their schemes. In interest, we are giving some discounts, penalty waivers, things like that we do.
Sir, the part that I am not able to understand is, you said you have sent, say, 1,000 notices. There are still more customers who have been in the NPA bucket for many years. My question is what is stopping you from sending notices to all of them, say, increase the number of notices to, say, 2,000 or 3,000, depending on how many other there are cases?
Yeah. Because, see, it is a process. See, I cannot just like that today I issue a demand notice, tomorrow I issue possession notice. There is a timeline under SARFAESI Act. This is one thing. If I issue demand notice, that is, I need to wait for not less than 60 days. It may be anywhere, three months before I issue the second notice and another one or two months before I go for auction. This is first one. Second one is, there is a possibility that the customers go for any court of party in order to get a stay in that. That way also there is a delay in the processes. These are all things which are delaying.
Despite all that, we are also taking a bit to our lawyers to see that any stays and all are getting passed, so that we go ahead with our recovery action. The auction successes will be more when we take a physical possession. Okay. Compared to, I think you may be knowing there are two things. Physical possession is more effective. For physical possession, again, we have to go through a different administrative route before we take a physical possession. That too takes time.
Got it, sir. Well, thank you for the explanation, sir. Thank you.
Thank you.
Thank you. A reminder to the participants, if you wish to ask a question, you may press star and one on your touchtone telephone. Participants, if you wish to ask a question, you may press star and one on your touchtone telephone. We will take the next question from the line of Anand Mundra from Soar Wealth. Please go ahead.
Sir, just a follow-up question. I missed the point about the other income. One was the incident, other is the recovery from the right of assets. Is this correct?
Yeah. Recovery from technically written-off, sir.
What is the amount of technical write-off assets, sir?
I am sorry, sir?
What is the total amount which you have recovered?
Approximately-
Approximately?
Technically written off total in our book is around, total technically written off book is approximately INR 100 crores today.
INR 100 crores. Whenever we are recovering something, it will come as part of other income.
Yeah, correct.
Okay, thanks a lot.
Thank you, sir. The next question is from the line of Raghav Madhavan from Kotak Mahindra Bank Limited. Please go ahead.
Sir, in the restructured book, what will be your stage 2, sir?
Raghav, stage 2 is approximately INR 200 crores. Approximately INR 200 crores.
Okay.
And 30 million to sitting now.
Okay. Thank you.
Thank you. Ladies and gentlemen, we take that as the last question for today. I would now like to hand the conference over to the management for closing comments.
Yeah, I think almost all the participants, I think the questions they have answered, I think it has covered almost all the points. Once again, thank each and every one of you for showing interest in this company. As we told in the initial beginning, the company is on the growth path. We are quite confident in the coming years the company will reach the heights which it was there a few years back. I thank each and every one of you. I also thank Yes Securities as well as Chorus for making all the arrangements for this conference call. Thank you once again.
Thank you very much, sir. On behalf of Yes Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.