Please note that this conference is being recorded. I now hand the conference over to Mr. H. P. Singh, Chairman, Managing Director of Satin Creditcare Network Limited. Thank you, and over to you, sir.
Thank you, Aditi. Good morning, everyone. We thank you for joining to discuss our performance during the first quarter of financial year 2024-2025. Amidst the news of flood and heavy rainfall in a few regions, I hope you and your family are safe and keeping healthy. I believe you have had the opportunity to go through our quarterly results and investor presentation. If you have not gone through them yet, you can access them on our website or through the stock exchanges. I'll start the call with the announcement that we have released our annual integrated report for financial year 2023-2024, and it's available on the official website of our company. This year's theme, "Growing with Grit: Conquering with Capability," captures our holistic view of our organization, providing a thorough dive into our resilient business model and integrated reporting.
As we reflect on the performance of the reporting quarter, we acknowledge that it was a challenging period to navigate, marked by the extreme heat waves across regions and disruptions due to the long phase of general elections for a large part of the quarter. This, coupled with the fact that a significant portion of our loans are dedicated to agriculture and allied sectors, and hence, first quarter typically experiences a slowdown due to the harvesting season, and it made it harder to manage. However, we successfully managed these challenges through proactive measures. We identified stresses building up in certain areas and took the necessary steps to address these issues in time, ensuring stability and effective steering through this time. To effectively navigate this seasonally moderate quarter and to proceed cautiously in the upcoming quarters while maintaining a healthy portfolio quality, we have implemented the following measures.
We have instituted a dedicated collection team for different DPD buckets, driven by the findings of our data analysis. Initiated from Q4-2024 onwards, this measure is already showing promising results, positively impacting our portfolio quality. During Q1-FY-2025, we appointed a credit manager for each branch responsible for 100% field verification of all loans disbursed in a month, including existing clients. This measure has enhanced our loan verification process, ensuring accuracy, reducing risk, and improved overall portfolio quality. As of now, this initiative is implemented across 100% of our branches. Our average FOIR per customer for existing clients stands at INR 6,400, which is almost half of the RBI prescribed limit of INR 12,500. This demonstrates our commitment to maintaining a healthy credit risk profile by not over-leveraging our borrowers.
As part of our strategy, we have been disbursing only one loan per client to effectively contain and manage our credit risk per client. Additionally, in an effort to mitigate credit risk, we have decided not to onboard new-to-credit clients in 15% of our identified branches. This measure was initiated from February 24, 2024 onwards. To augment the effectiveness and efficacy of our center meetings, we are calibrating our loan officer's plan to ensure better control of center meetings. This move is driven by our commitment to enhancing operational efficiency and delivering improved service to our clients. We have implemented risk-based pricing strategies based on the vintage and credit history of our clients. This means that the interest rates and loan terms are adjusted based on the client's repayment history and tenure with us.
By considering clients' track record and loyalty, we can offer more competitive pricing to long-standing clients while appropriately managing risk for newer clients. This approach not only rewards our loyal clients but also ensures a balanced approved risk management framework. Commenting on the ongoing concern, we state that as of now, we have not encountered any significant stress in UP and Bihar. However, aligned with industry trends, we are observing some challenges in Odisha and Rajasthan, for which we have already taken proactive measures. As a result of the aforementioned measures, we are revising our guidance on AUM growth to 20% year-on-year for the year FY-2025, sorry, growth of 20% for the year 2024-2025.
Despite the challenges we face, we remain optimistic and are continuously assessing ground developments without revising our guidance on credit costs for now, as we witness extraordinary events in Q1, as discussed earlier, and there are seasonal shocks in our major geographies presently. Based on these events, we shall be able to give credit cost guidance for the year with Q2 FY 2025 results. The guidance we simply recommended by Industry Body MFIN, which imposes a cap on the microfinance indebtedness per client to INR 2 lakh` and restricts the number of microfinance lenders to four per quarter, reflects the industry's commitment to sustainable growth, leveraging the substantial credit advancing opportunities available through the microfinance channels. Over the years, the SROs have been instrumental in strengthening the sector, ensuring its resilience, reinforcing our collective efforts towards a stable and progressive industry.
I'm happy to share that our portfolio is well within the guidelines, as we are a responsible financial services company. In the last 7 months, we have disbursed INR 11 lakh loans, which are all in compliance with the guardrails. Our average FOIR per customer for existing clients is 48% below the RBI's prescribed maximum limit. Continuing our dedication to excellence and innovation in the microfinance sector, we have consistently strived to empower communities and drive financial inclusion. As an evidence to our efforts and impact, we are happy to share that we have been recognized as the Dominant Microfinance of the Year award at the 17th NBFC Incentive Awards 2024. Additionally, as part of our commitment to championing our culture of inclusivity, innovation, and continuous growth, we were recognized among the top 100 companies to work for India 2024 across all industries by GPTW India.
Now, talking about operational performance during the quarter on a consolidated basis, our AUM grew by 23% to INR 11,706 crore. On a standalone basis, the GLP stood at INR 10,485 crore, up by 25%. The disbursement stood at INR 2,114 crore on a consolidated basis and INR 1,997 crore on a standalone basis. Our borrower base grew by 15%, while our branch infrastructure stood at 1,447 branches, up by 10% year-on-year. We also ventured into a new state, Nagaland, making a significant step forward in our mission to fulfill the microcredit needs of underserved communities. This expansion brings our presence to a total of 27 states and Union Territories. We have consistently grown our footprint across the country, harnessed numerous prospects for business growth, and invested in decisive actions that deliver greater shared value for multiple stakeholders, guided by a strong regard for customer needs.
Coming to the asset quality, we observed a temporary increase in delinquency during the first quarter. This was due to the severe heat wave across several regions and operational constraints during the general election, which impacted regular collection and follow-ups in the delinquent buckets. On-book GNP stood at INR 219 crore, which is 2.7% of the on-book portfolio. The company has sufficient on-book provision amounting to INR 200 crore, as on Q1 FY 2025, which is 2.5% of the on-book portfolio. Provision required as per RBI regulations is INR 150 crore. We have adequate measures in place and are working to ensure that delinquency trends should stabilize in the coming quarter. Maintaining a good collection discipline, our collection efficiency stood at 97.9%, and the collection against write-off pool stood at INR 6 crore in Q1 FY 2025.
Coming to our financials now, the company's consolidated net interest income grew by 38% to INR 383 crore, in line with the loan portfolio growth in the quarter. The pre-provisioning operating profit stood at INR 213 crore, registering a growth of 60% on a consolidated basis. The net interest income and pre-provisioning operating profit on standalone basis are INR 353 crore and INR 207 crore, respectively. Our NIM for the quarter stood at 13.4%. The consolidated PAT of the quarter grew by 20% at INR 105 crore, resulting in an ROA of 4% and ROE of 17.2%. This marks the fifth consecutive quarter in which we have achieved an ROE of over 4%, reflecting our strong cross-cycle performance and sustainable profitability.
In line with our steadfast dedication to optimizing operational efficiency and resource allocation throughout our operations, our OpEx-to-average AUM ratio witnessed a consistent improvement, dropping to 5.5% on a standalone basis, decreased by 27 basis points on a year-on-year basis. Likewise, our cost-to-income ratio improved to 41.4%, as against 48.9% on a standalone basis. On the borrowing front, during Q1 FY 2025, the company secured debt funding of total INR 467 crore from OeEB, the Development Bank of Austria, and FMO, Dutch Entrepreneurial Development Bank. Such partnerships ensure our continued ability to provide critical financial services to underserved communities and support our mission to drive sustainable economic growth. The company has ample liquidity of around INR 1,400 crore and a healthy CAR of 27.9%.
I'm also happy to share with you that we have welcomed Mr. Joydeep Datta Gupta, former partner of Deloitte India, and Ms. Jyoti Vij, Director General at FICCI, to our board as independent directors. We are confident that their extensive experience and deep expertise will be invaluable as we continue to strengthen our governance and pursue our growth ambitions. As mentioned earlier, this quarter presented several challenges. However, with prudent strategies in place, we did our best to navigate these difficulties effectively. We focused on optimizing our operations, maintaining strict financial discipline, and enhancing our customer engagement, which allow us to achieve stable performance and lay a strong foundation for future growth. Both of our subsidiaries are profitable and are cutting the path towards future growth.
With the substantial support from the government for the MSME and housing sectors in the Union Budget 2024, we are well positioned to capitalize on these opportunities. This boost will further accelerate our efforts, enabling us to expand our reach, enhance our offerings, and drive sustainable growth across our operations. Now, let me run through financial and operational highlights of the company, starting with consolidated highlights.
We have a customer base of 35.1 million customers as of 30 June 2024, with presence across 1,447 branches and 425 districts of India. Our top four states contribute to 56% of total AUM in Q1-FY-2025, and the states are UP, Bihar, West Bengal, and Madhya Pradesh. The total revenue for the quarter stood at INR 634 crore, up by 37% year-on-year. Coming to standalone highlights, our average ticket size of MFI lending for the quarter stood at INR 49,000. We have a well-diversified customer base of approximately 34.1 million clients, with 76% rural exposure. 55% of our clients belong to first cycle as of June 2024.
Pan-India presence with 1,301 branches across 419 districts. PAT for Q1-FY-2025 stood at INR 103 crore, ROE at 4%, and ROE at 15.1%. The net worth stood at INR 2,770 crore as of 30th June 2024. GNPA as of June 2024 stood at 2.7%. The overall provision coverage ratio increased to 91% versus 66% in June 2023. Total borrowing stood at INR 7,403 crore as of 30th June 2024. Debt-to-equity ratio as of 30th June stood at 2024 stood at 2.7x. As of 30th June 2024, 96.7% of our districts have less than 1% of portfolio exposure. In our constant endeavor to enrich our customers' lives, we provide financing of various products, which include loans for bicycles, solar products, home appliances, consumer durables, water, and sanitation facilities. An update on subsidiaries. Through the collective efforts of our subsidiaries, we aim to extend the spectrum of financial services to our clients.
By harnessing the strength of our microfinance outreach, we endeavor to extend affordable housing and retail MSME loans, specifically to clients who have completed more than two loan cycles with the company and have higher credit requirements. Satin Housing Finance Limited has now reached an AUM of INR 769 crore, which grew by 50% year-on-year, having presence across 12 states with 7,645 customers. SHFL has a 100% retail book. The quality of the portfolio remains intact with GNPA of 1.4% as of June 2024. The company has 27 active lenders, including NHB, CRAR of 49.8%, and Gearing of 2.4x. PAT for the quarter stood at INR 51 lakh, credit rating A- stable from ICRA. Satin Finserv Limited, the company's MSME lending arm, has reached an AUM of INR 452 crore. We are running down the business correspondent book and focusing on building retail MSME going forward.
MSME book grew by 41%, CRAR of 44.9%, and Gearing of 1.4x. PAT for the quarter stood at INR 1.7 crore, credit rating of A- stable from ICRA. I'm pleased to share with you that we are adding a new wholly-owned subsidiary to our offerings in the technology space. This company will aim to provide technological solutions to the financial services sector. This is with our vision to leverage our technological progress and also diversify our revenue streams. In closing, as we forge ahead on our journey of growth and innovation, we are confident in our ability to achieve greater profitability while ensuring operational efficiency. Our strategic vision and dedication to excellence positions us well for a prosperous future. Thank you for your time. With this, I would like to open the floor for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Samir from JM Financial. Please go ahead.
Yeah, hi. Thanks for the opportunity. Just two questions. One is on the operating expenses front. Is it fair to assume that the investment that you have made on collection teams, etc., have led to a sequential uptick in OpEx? And secondly, on yields, how do you think of yields? Would you have reduced interest rates in the last couple of quarters? That's it from my side. Thank you.
So for me, the yield will remain stable in the way we are. They could probably be just, I think, a band of about 0.2% or 0.3%, which will oscillate. But we won't have any kind of a dip in our yields. That's point number one. Point number two, in terms of...
The sequential increment of OpEx.
So OpEx, our sense is that we've put in our collection team during this quarter, so whatever little increase had come has also been factored in. Our own senses, as we go forward, I think this will not have too much of a bearing in our OpEx. I think if you really look at the cost-to-income, I think the ratio we've gone down substantially from 48.9% to about 41.4% right now. So our sense is the OpEx to average AUM, in terms of even the denominator-based increasing, will probably remain stable. There's no significant increase or no. I think there will not be kind of an increase in this OpEx to AUM also.
Sure. And just one final thing. The 20% growth guidance is on a consolidated basis. Is that fair?
Yes. Yes.
That's all. Thank you. Thank you and all the best. Thank you, sir.
Thank you. Thank you.
Thank you. Our next question is from the line of Agastya Dave from CAO Capital. Please go ahead.
Hello. Hello, audible?
Yes, sir.
Yes, yes.
Good morning, Singh sahab. Singh sahab looks like a fairly decent set of numbers given the problems that cropped up this quarter. Sir, I had three questions. One was, can you go into the states which are facing trouble? So there was some trouble in Punjab in two districts. So what is the status there? Amritsar and, I believe, Jalandhar. Then you mentioned that there are problems that even you are seeing in Rajasthan and Odisha.
So can you go into some details whether these are two districts? Are these related to some local political issues, or is there something else going on? What is the actual nature of the problem and how big the problem is? And then you also mentioned that UP Bihar you are not seeing anything. I don't know whether you included those two states because they are substantial for us, or is there actually some problem that somebody else is seeing? So that is my first question, sir.
Okay. So let me start from the major one. The UP and Bihar. Why we specifically mentioned about that? Because there was a lot of talk going on, basically, that there was a news item where you have to go slow on the RBI's thing. I think there was some advisory or something that you have to go slow on UP and Bihar. That is the reason why we wanted to specify our stand in and what is going on in UP and Bihar. That's the reason why we gave it, not because we are seeing any kind of a stress or crossover.
So that answers probably your third question on this. Regarding Punjab, I think, as we said earlier, we are very, very stable across over there. Our collection efficiency, even now, is about 91%. The districts which were there have probably stabilized. In fact, we've started a little bit of a disbursement across over there, which gives us that kind of impetus that we've been able to navigate the crisis to a large extent. And I think it is slowly and steadily coming up off the curve right now.
So that answers your question on Punjab. Odisha and Rajasthan, I think we've heard about, and in various quarters in the sector in itself, that yes, there is some stress which is building up in a few pockets of Odisha and Rajasthan. It's not entirely. But just to give you the scenario, we were already taking those corrective measures, which we enumerated to you during the opening of my earnings call. We've done that.
We are looking at it far more diligently, and we have a handle on it. Our own senses, I think, that it will probably be contained by us. We are probably at it. But it's not something which is probably significant. We just wanted to highlight it so that we want all our stakeholders to be a little bit aware of where there is a slight stress which is coming in. So that is what probably answers your Odisha and Rajasthan. I think all the three we've been able to answer.
Yes, sir. So my next question is, there are a lot of regulatory noises, especially from the governor himself, about the interest rates that the sector as a whole is charging. So are these noises now becoming cringe? Because they are sounding like it. What exactly is the backdrop which is prompting the regulator to use such fairly I don't know what adjective to use for it, but it looks like the regulator is really worried. So what's the background?
I don't use adjectives. Adjectives don't probably give you the right picture. So as you said, if there is no threat as such, I think it's probably somewhere when you are serving these underserved communities, you definitely would like to give them probably the best out of the terms of the interest rates which you charge. And we've also brought it down to our vintage clients. As we said, we've done risk-based pricing across over there. But I think what is more important for us to probably look at it is, and I think this is like an ongoing thing which will probably go on. As we feel our cost of funds go down, as we remain stable on our NIMs, we feel that I think that increase or maybe the better performance in terms of our cost of funds should be given back to the borrowers as such.
But you have to look at the holistic view of the complete picture as such. It's not just the interest rates. It's also how you are able to drive your credit costs. And all the factors put together, you've got a cost of services to drive collection, to reach out to them. This is a doorstep service which is a cost. So I think you have to keep everything in mind. So my sense is, I think all the stakeholders are aware of this. And I think everybody is taking new steps to make it far and far more affordable for our borrowers across over there. And we've also done the same.
Right. So because Governor Das is a very conservative central banker, and he's a very reasonable man, as we have seen over the years. If he's pointing out something, then I was just wondering what exactly I mean, what exactly are they seeing? It's a final question. The final question. In this quarter, consolidated numbers, other expenses, there is a quarter-on-quarter jump as well as a fairly substantial year-on-year jump. So this INR 41 crore, is there anything which is one-off here? What exactly is there? Why exactly is there such a big, big jump? It's sticking out.
But I told you, I don't know what number are you talking about.
This is the other expenses. This is INR 41 crore compared to INR 33.5 crore previous quarter and then INR 31 crore last year. So it's a fairly substantial jump. Plant expansion, this thing. So we're opening it close to about 300-odd branches this year. And we've opened about close to about 70, 80 in this quarter. So I think nothing extraordinary, sir.
Nothing extraordinary. No, no, no. Natural cause of resistance. No one-off? Nothing extraordinary. No, no, no. No one-off. No one-off.
Great, sir. Thank you very much, sir. All the best.
Thank you, Agastya.
Thank you. Ladies and gentlemen, a reminder to all participants, you may press star and one to ask questions. Our next question is from the line of Amit Agrawal, an individual investor. Please go ahead.
Yeah. Hi, sir. Good morning. Thanks for the opportunity. So I had a question on written-off assets. What kind of written-off asset pool we have as of June 2024? And I can see that we are not able to recover much from the written-off assets that happened during COVID and all that. So what options do we have to recover those assets, like selling it to ARCs or giving higher timelines to those borrowers? So I mean, I just want to have an understanding that what happens when the assets are written off, and does it just go away, or do we get a chance to recover in future timelines?
So I think, Amit, you'll have to understand one thing. So our run-off pool is written off only in our accounting books. But for the operational field, it's never been written off. So we've got pool starting from demonetization, which was what, 7 years ago, which my boys still are able to bring somewhat a little bit from there. So for us, as a company, we believe that till the time I think we exist and the borrower exists, if we're able to touch base upon them and get back the money, that is what we do.
That's probably the most soundest of policies which we've been able to adopt for the last 7, 8 years. The write-off pool starting from demonetization till date would be close to about INR 1,200-odd crores, which is there. Now, getting money from this kind of a pool, which is 7 years old, 6 years old, 5 years old, 4 years old, is a very tough task. Half the time, you will not find a borrower. The addresses will not be there. It'll be very difficult to take them out. But in spite of that fact, we've got our dedicated teams, which I think, if I remember correctly, last year we brought in about INR 48 crore-INR 50 crores from that pool.
This year, we've started on a lower loan, but we still brought in about INR 6 crores total from the write-off pool. Our sense is, if you just keep at it, at some point of the time, the borrowers get motivated to probably bring it back till the time we are able to find them. But that's the policy which we follow. I think it has paid us good dividends across the years for us to bring in money from the write-off pool.
So can we not sell it to ARCs? Are there not ARCs who are buying those stress pools?
Well, they will not have the collection mechanism. We would have to do that ourselves. So might as well, when we are doing it ourselves, let us do it by ourselves. Why pay an additional cost or something like that? But that's costly.
Collecting money from the old pool, it's very costly also, right?
Well, it's not costly. So we've got separate benchmarks for us. So far, we see it in a different fashion. So let me just give you a very small example of how to do it. We pay a certain amount of salary to our boy. For us, if we get 3x post that, that's the best we can do across there. And we drive them to get 3x of what their salary is and their operating cost is. So it's never out of pocket for us. And it has always helped us in terms of how we look at our P&L based on these dedicated people to do collection in these markets.
Oh, okay. Okay. Thank you. That's helpful. So my next question is on our subsidiaries, like these housing finance in particular. So housing finance is a big area and big opportunity. Recently, Shriram Housing Finance sold their housing subsidiary. So my one question is, question one is, when can we expect to have INR 5,000 crore AUM in Satin Housing Finance? And how are we going to unlock the value from this subsidiary in future?
Yeah, I think this is a question which probably we've been saying, but I think it has probably not found real penetration in a lot of people to probably understand. I think probably you are another person who's probably saying it in the same. Yes, there is a huge opportunity in housing finance for us, including the MSME lending which you're talking about. Definitely, yes. I think we would probably be crossing the second milestone of our INR 500 crore to about INR 1,000 crore this year in housing finance.
We are looking at, when you said INR 5,000 crore, for us, our bench strength, where we are working on, is that we are able to reset in the next 3 years- 4 years. Definitely, yes. And yes, we'll monetize it at a certain point of time. Definitely, yes, we'll do that because that's what we have brought these subsidiaries up. One, to hedge our risk. Two, because we're moving from unsecured to secured. Two, to look at the cost of capital for us. So we use our capital efficiently so we are able to leverage two of these businesses in a separate subsidiary. And three is, yes, at a certain point of time, definitely, we will monetize these assets to bolster our capital strength on the parent company. When and which, I think it will probably I can't give you a definitive answer, but yes, that is what our thought process is.
So what kind of LTVs do we have in this business?
Well, as you would have it, we do a lot of piggybacking on our microfinance clients in the rural housing, which probably is our core area, and which we've got a USP. LTVs average is close to about 5%-7%. That is where it is. And we feel that's probably pretty good enough for our housing finance in the company to really look at it.
Yeah. Great. Thank you. That's it from my side. Thank you, sir.
Thank you.
Thank you. Our next question is from the line of Rajiv Mehta from YES Securities. Please go ahead.
Hi, sir. Good morning. Congratulations on very good set of numbers.
Thank you.
Sir, first, to understand how the delinquency pool will move from where it is right now. So firstly, if I can know, what is 1 DPD- 90 DPD pool as of June versus what was it as of March? And where do we see it settling in the next two quarters? This is your assessment of the situation.
So 1- 90 pool is close to about 4.5%.
Okay.
There's 1+ . Not 1 to 90. 1 to 90. There's 1+ . Out of that, 2.7% is 90 plus, and the balance is between 1 and 90.
Got it. Yeah. Okay. And sir, where do we see this settling with your assessment of the situation on the ground, whether the improvement will come through immediately or will it take some time? If you can just comment from what you see on the ground.
See, Rajiv, as I said, first quarter was a lot of factors which actually externally jumped in. I think this is, again, a quarter I won't say a quarter, but the month where we are seeing a lot of rains and a lot of flooding across over there. So these are not normal nuances of business which we are encountering right now. That is the reason why we said we will have probably a better handle on all this by, I think, August end or so, and we'll give our guidance across over there. Our own sense is that there is nothing in the business which probably demonstrates maybe a highly elevated credit cost. It's only once we are able to settle down these seasonal disturbances which have occurred, and then we'll get a clearer picture.
But by our own senses, what we are seeing on the ground and the way we are handling it, I think we feel that it is no cause of concern where there would be very high delinquencies or very high credit costs. Let the issues of flooding and everything settle down. I think that's why we said we want to give you and everybody a clearer picture, and we'll be able to do that maybe in a month, month and a half time.
Understood, sir. And just to, again, slightly check on UP and Bihar. So whatever delinquency increase you saw in the first quarter for all the reasons that you mentioned, we did not see much of an increase in the delinquent pool for UP and Bihar as such. We're not seeing any stress at this point in time.
Well, I said this is exactly what is happening. So there has been, again, floods in border areas of Uttarakhand adjoining UP. There has been flood in Bihar also, Muzaffarnagar, specifically. So UP, Bihar is basically when we are talking about it. Again, issues like we've got, I don't know whether you guys will know or not, but there's this Kanwar Yatra going on for the last five days. The roads are closed. The schools are closed. Things are there. So these do have a momentary effect on our collections. But that is what I said.
We're not seeing circumstances in businesses which probably permit to say that we have elevated credit costs. It's related to these factors. When these factors settle down, I think we'll have a far more clearer picture moving ahead. I don't want to comment on anything beyond this. So let this settle down. I hope once it settles down, we'll be far more able to address it also much better with the proactive measures which we've already set in place.
Correct. Just one last thing I wanted to check was on the end-of-term guardrail. I think you just clarified right up front in the call that for us at the portfolio level, there shouldn't be much of an impact in terms of.
S o we've been following guardrails. That's why I've given you 11 lakh clients in the last seven months. We're following guardrails before they even set in. So seven months, we've started to do that. And the FOIR, which is also the thing, our FOIR is half of what we have discussed. So we always take proactive measures as an institution, always. For us, the key question is always portfolio quality. That's what we always emphasize upon.
So my second-level question on this end-of-time guardrail was more under the industry and not specifically the patent because there are maybe there could be certainly customers who were being supported by certain lenders, by the communication lenders, and they used to hold themselves as a regular or a current customer. But now, with this guardrail being implemented by the agents or by even the other lenders in the system, can it happen that a sudden start of customers will start to default because they are not getting the deduction finance on which they were kind of trying?
I don't think so. I think it's again a factor which we'll all have to see. We've been following it. So for us, we feel that it hasn't happened to us. So I will not have any comment on this, to be very honest.
Okay, sir. Thank you and best of luck.
Thank you, Rajiv.
Thank you. Our next question is from the line of Rikita from Purnartha. Please go ahead.
Thank you for the opportunity. So just a couple of questions. One is on the [audio distortion] and obviously, [audio distortion] and sorry.
Rikita, Rikita, Rikita, sorry, your voice is very feeble. Can't hear a thing.
A little louder, please.
Better now, ma'am?
Yeah, it's better.
I'm so sorry. So I'm thinking, ma'am, sir, there's two new things which the management mentioned on the number of lending exposure and also on the ticket size, if maybe if I could put it that way. How are we looking to deal with the same? Where are we today in terms of what number of our customers are actually we are number four or number three for them? So that's the first question. Second, I understand you will be obviously sharing the credit cost guidance a little later. Just if you could still broadly reiterate the guidance, which is as of today for FY 2025, and break the loan growth into MFI and non-MFI. Yeah.
So I'll answer the first part of the question, Rithika, for you first, which is the guardrails. So first of all, for everybody's benefits, whatever MFIN has done is more of a supplementary or clarificatory to whatever the RBI had actually guided us in terms of the household income of INR 3 lakh, in terms of the FOIR of maximum 12,500. Even if you look at the INR 2 lakh indebtedness, it roughly translates to a FOIR of 11,500. So whatever MFIN has done is to simplify it and make it more, I'll say, bite-sized for everybody. So that is what it is.
This is why the 11 lakh loans that Sir had just mentioned, we disbursed, and they are all within the guardrails without them being announced. Now, to answer the other question about the number of lenders, in our presentation, we have mentioned we are the only lender to 31% of the borrowers. For 55% of the so for the next 25, we are the second lender. And for another 20%, we are the third lender. We are looking at our data scrub. We are not the sixth lender for any of our clients.
Yeah. So Rikita, this is what we've what Aditi has just mentioned. And in terms of our credit cost, so as I said, let the current issues settle down. As I said, we do not foresee any, or maybe significant, elevation on our credit cost because we feel that this is due to these factors which have kicked in for the last 3 months-4 months: flooding, seasonal harvesting, heat wave, general election. Let this all settle down. We'll be able to give you a far more clearer picture. But as I said, we really feel on the ground that, yes, we are not facing that elevation of what I think probably which is not there. And what was your other question in terms of this is what it was?
I think this answers her question.
Oh, yeah. Just the second one was on, if you could just reiterate the growth guidance and maybe break it up into MFI and non-MFI. Yeah.
We've not done the thing; we've taken an overall picture. Consolidated is what we always talk about. Our own sense is that for us, it could probably overall on the customer basis.
And because of any which way, the base effect, MFI being the largest piece, it will always override whatever growth the subsidiaries do. So even for now, the subs have grown by 50% and 41%, Rikita. But since still 88% of the business lies in microfinance, so if we grow 20 here, consolidated also, it will be 20 or 21 only at the current pools. So majorly, it will be driven by the core SPNL business.
Thank you, ma'am.
Thank you.
Thank you. Our next question is from the line of Rahil Shah from Crown Capital. Please go ahead.
Hello. Good morning. Am I audible?
Yeah.
Yeah, yeah.
Yes, sir. Hi.
I'm sorry, but I joined the call 10 minutes late. So are you sharing guidance by FY 2025 on ROA and cost to income?
No, we've not shared any guidance in terms of our ROA and cost to income. I think you can probably take heart from what we've shown in the first quarter and maybe extrapolate whatever you have to do. We've not given any guidance. We've just given our guidance for our growth that we'll be doing 20% consolidated growth for this year.
Okay. And credit cost, we'll be sharing later. With respect to this growth, so which particular segments and/or regions are supposed to drive it?
I think it's overall. We're not doing segmentation as such, basically, because normally we grow our existing book by about 10% by the loan number of. So I think we are still.
In regions, you are saying like we are saying we are going to be slow in Odisha and Rajasthan, but we have entered two new states, AP and Telangana, then deep diving in the existing states where we are strong, Northeast is where we are strong, etc. So these are going to be the major drivers for the growth for us.
Okay. And lastly, any branch addition target for the year?
Yeah. So we are doing about 300-odd branches for this year. I think we've already deployed about 100-odd branches in approach of 100 branches in the next 200 more,
200 more.
All right. Okay. Thank you and all the best.
Thank you.
Thank you. Our next question is from the line of Jay from IIFL Securities. Please go ahead.
Hello. Thank you for taking my question. My first question is how does it fit to change QOQ? What is the GNPA and the loan exposure in Punjab and the conversation?
Jay, Jay, you have to be louder. We can't hear you.
Hello?
Yeah.
Can you give the number on your change in stage two loans QOQ? And what will be your exposure in Punjab?
Sorry, sorry. It's not clear. It's still not clear.
I'll get back in line.
No, if you can, I don't know, try to be louder or else.
Hello?
Yeah.
Can you give the number of the stage two loans QOQ? Which number?
Which loans QOQ?
Stage two.
Stage two loans QOQ. So stage two will be 3.5.
So stage two is broadly between 31 DPD-90 DPD to about 1.25% of the total growth.
Okay. What will be your Punjab portfolio currently? And what is your conversation on Punjab portfolio?
In Punjab, the on-book portfolio is INR 336 crore. The impacted branches are only 10, which are around Amritsar.
Okay. And the exposure in which one branches would be?
The exposure on these branches is INR 43 crore. Collection efficiency from the overall state is 91%.
Okay. Yeah. Fair enough. Okay. Thank you.
Thank you.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for the day. I now hand the conference over to Ms. Aditi Singh, Chief Strategy Officer from Satin Creditcare Network Limited, for closing comments.
Thank you, everyone, for taking our time and attending our call and all the questions that you asked. We have tried to answer each and everything. I will still wrap up by saying that we have always been very responsible and very much driven by tech and sources, always prioritize the quality of our portfolio over growth and other factors. So this all has actually helped us fare better or fare pretty decent in this quarter. Still, if you want to discuss anything, you can reach out to us, me and my colleague, Shweta Bansal. You have our email IDs also, and the details are there on the website. Thank you so much. Have a great day. Bye-bye.
Thank you. On behalf of Satin Creditcare Network Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.