Ladies, and gentlemen, good day, and welcome to the Earnings Conference Call for Satin Creditcare Network Limited, hosted by JM Financial Institutional Securities 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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Mistry from JM Financial Institutional Securities. Thank you and over to you, sir.
Thank you, Harvish, and good morning, everyone. On behalf of JM Financial, I welcome all participants on the call and thank the management of Satin Creditcare Network Limited for the opportunity to host this call. For today's call, we have with us the members of the management and leadership team. From the management team, we have Dr. HP Singh, Chairman and MD, Mr. Jugal Kataria, Group Controller, and Ms. Aditi Singh, Chief Strategy Officer. I now hand over the conference to Dr. HP Singh for his opening remarks, post which we will open the floor for Q&A. Thank you and over to you, sir.
Thank you, Mayank. Good morning, everyone. Thank you for joining to discuss our company's performance during Q4 and financial year 2024-2025. As we have stepped into a new financial year, we do so with a sense of satisfaction, determination, reflection, and a continued focus on long-term value creation. We are pleased to walk you through Satin's performance over the past year. Before we begin, I trust you have had a chance to review our quarterly results and investor presentations. If not, they are readily available on our website and stock exchanges. There is a saying that sometimes disruption is the only way to shake us out of competency and force transformation. This sentiment perfectly captures the spirit of FY 2025, a year many in India's microfinance sector might remember as a testing period, others as a wake-up call. The MFI industry stood at a critical juncture, facing formidable challenges.
Institutions had to navigate a shifting landscape. Clients experienced heightened vulnerability, and the sector as a whole was compelled to rethink long-held assumptions. It forced the sector to pause, reflect, and reset. These disruptions served as a catalyst, driving deep introspection, operational recalibration, and a renewed focus on fundamentals. While the immediate impact was tough, it reinforced our belief that true strength is built long before it's tested. It's embedded in the model, not forced in the moment, a belief that has guided us at every step. At Satin, we have always identified the undercurrent early and aligned ourselves to face them head-on. As we often say, we never wait for the storm to hit; we prepare for it. That's why our approach has always been rooted in building a future-ready, sustainable model. We plan five years ahead, not just five quarters.
What you see today is not an overnight outcome. It is a result of decades of discipline, consistent execution, and bold decision-making. Take demonetization for an example. Despite our high exposure in Uttar Pradesh, where PAR1 peaked at around 45%, we remained focused and methodically brought delinquencies under control. During COVID, while stress spread across the sector, our credit costs remained amongst the lowest, as highlighted by multiple analyst reports. During the SAN crisis, rather than exiting the market, we deepened our commitment, reinforced controls, and today, I can proudly say Assam stands as one of our best-performing states. Every step we have taken from managing crisis to building internal systems has contributed to the strong foundation where we stand today. This long-term mindset, this purpose-first approach, is what allowed us to navigate FY 2025 with steadiness and strength.
While many were firefighting, we were executing a plan already in motion, and today that difference is visible in our performance, in our stability, and in the trust we continue to earn. Our performance isn't the result of a single breakthrough. It's the cumulative impact of years of strategy, structure, and staying true to our vision. We made tough calls when they mattered. We stayed disciplined when the easier part was to chase growth. We chose quality over scale, relationship over transaction, and systems over structure. Because of that, we didn't just shield ourselves; we carved our own path, positioned ourselves to lead, and laid the foundation for a legacy defined by foresight and purpose. For a deeper look into these strategic initiatives, please refer to slide five of our investor presentation.
As a result, we are proud to be emerging as one of the top performers in the industry once again. We delivered our 15th consecutive quarter of profitability, reinforcing the strength and consistency of our financial performance. For the full financial year, our standalone tax stood at INR 217 crore, with INR 41 crore reported in Q4 FY 2025. We're also pleased to report that our performance remained closely aligned with our stated guidance. Year-on-year AUM growth stood at 7%, while credit cost for FY 2025 was well-managed at 4.6%, comfortably within the guided range of 4.5%-5%. Before we get into the operational and financial details of the reporting year, we would like to share that Guardrails 2 has been fully rolled out across our operations. Our internal policies and systems have been realigned accordingly to ensure consistent and responsible underwriting across our operations.
With this new framework in place, we are confident the industry will soon reap the fruits of its implementation in the form of greater transparency, improved asset quality, and stronger stakeholder protection. Additionally, it will help us keep a close check on how much debt each household is taking so that the clients do not become overburdened, supporting long-term financial stability for them. We would now like to draw your attention to slides 19 and 20 on the asset quality update. Since November 2024, we have witnessed a sustained and meaningful reversal in PAR10, a clear sign of recovery and discipline taking hold across the portfolio. PAR1 improved significantly, declining by 192 basis points from 6.8% in September 2024 to 4.9% by March 2025.
We also saw a positive shift in PAR 90 at 3.7%, highlighting our ability to arrest forward flows, a result of strong client engagement, early intervention strategies, and a risk management framework that continues to deliver. Further, this improvement was visible across geography, particularly in our top four states: Uttar Pradesh, Bihar, Assam, and West Bengal. Among these, the top four states which together account for approximately 61% of our own book portfolio report an average PAR 90 of.
Sir, please hold on. I think there is a problem. People are not getting to hear you.
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Yes, ma'am.
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It shows that it has been running. Okay, just give me one moment. Yeah, I will just check.
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Ma'am, is the hold music still audible? Hello?
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Yeah.
Hello?
Mayank, can you confirm? Shweta, Mayank, Subbiji? Because Shweta is also getting messages. We are getting.
Yes, I can hear you.
Okay. Because I do not think anyone then could hear any opening remarks about our upcoming event.
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I think, Alarik, you could not connect the call.
The call is showing as connected, ma'am. Is it fine now? I mean, are you still able to hear the hold music?
No, we are not hearing any music.
We cannot. People who are on the call, they are.
Okay. Just give me one moment. I will get this sorted. Give me one moment, please.
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What if you repeat otherwise?
Okay, sure. Do you want me to take it from the start now?
Yes, I think it makes sense. Otherwise.
Sure. Sure.
Ladies, and gentlemen, good day, and welcome to the Earnings Conference Call for Satin Creditcare Network Limited, hosted by JM Financial Institutional Securities 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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Mistry from JM Financial Institutional Securities. Thank you and over to you, sir.
On behalf of JM Financial, I welcome all participants on the call and thank the management of Satin Creditcare Network Limited for the opportunity to host this call. For today's call, we have with us the members of management and leadership team. From the management team, we have Dr. HP Singh, Chairman and MD, Mr. Jugal Kataria, Group Controller, and Ms. Aditi Singh, Chief Strategy Officer. I now hand over the conference to Dr. HP Singh for his opening remarks, post which we will open the floor for Q&A. Thank you and over to you, sir.
Thank you, Mayank. Good morning, everyone. Thank you for joining to discuss our company's performance during Q4 and financial year 2024-2025. As we have stepped into a new financial year, we do so with a sense of satisfaction, determination, reflection, and a continued focus on long-term value creation. We are pleased to walk you through Satin's performance over the past year. Before we begin, I trust you have had a chance to review our quarterly results and investor presentation. If not, they are readily available on our website and stock exchanges. There is a saying that sometimes disruption is the only way to shake us out of competency and force transformation. This sentiment perfectly captures the spirit of FY 2025, a year many in India's microfinance sector might remember as a testing period, others as a wake-up call. The MFI industry stood at a critical juncture, facing formidable challenges.
Institutes had to navigate a shifting landscape. Clients experienced heightened vulnerability, and the sector as a whole was compelled to rethink long-held assumptions. It forced the sector to pause, reflect, and reset. These disruptions served as catalysts, driving deep introspection, operational recalibration, and a renewed focus on fundamentals. While the immediate impact was tough, it reinforced our belief that true strength is built long before it's tested. It's embedded in the model, not forged in the. A belief that has guided us at every step. At Satin, we have always identified the undercurrents early and aligned ourselves to face them head-on. As we often say, never wait for the storm to hit; we prepare for it. That's why our approach has always been rooted in building a future-ready, sustainable model. We plan five years ahead, not just five quarters.
What you see today isn't an overnight outcome. It's the result of decades of discipline, consistent execution, and bold decision-making. Take demonetization, for example. Despite our high exposure in Uttar Pradesh, where PAR1 peaked at around 45%, we remained focused and quickly brought delinquencies under control. During COVID, while stress spread across the sector, our credit costs remained amongst the lowest, as highlighted by multiple analyst reports. During the Assam crisis, rather than exiting the market, we deepened our commitment, reinforced controls, and today, I can proudly say Assam stands as one of our best-performing states. Every step we've taken from managing crisis to building internal systems has contributed to the strong foundation where we stand on today. This long-term mindset, this purpose-first approach, is what allowed us to navigate FY 2025 with steadiness and strength.
While many were fighting, we were executing a plan already in motion, and today, that difference is visible in our performance, in our stability, and in the trust we continue to earn. Our performance isn't the result of a single breakthrough. It's the cumulative impact of years of strategy, structure, and staying true to our vision. We made tough calls when they mattered. We stayed disciplined when the easier path was to chase growth. We chose quality over scale, relationships over transaction, and systems over structure. Because of that, we didn't just shield ourselves; we carved our own path, positioned ourselves to lead, and laid the foundation for a legacy defined by foresight and purpose. For a deeper look into these strategic initiatives, please refer to slide five of our investor presentation.
As a result, we are proud to be emerging as one of the top performers in the industry once again. We delivered our 15th consecutive quarter of profitability, reinforcing the strength and consistency of our financial performance. For the full financial year, our standalone tax stood at INR 217 crore, with INR 41 crore reported in Q4 FY 2025. We are also pleased to report that our performance remained closely aligned with our stated guidance. Year-on-year AUM growth stood at 7%, while credit costs for FY 2025 were well-managed at 4.6%, within the guided range of 4.5%-5%. Before we get into the operational and financial details of the reporting year, we would like to share that Guardrails 2 has now been fully rolled out across our operations. Our internal policies and systems have been realigned accordingly to ensure consistent and responsible underwriting across our operations.
With the new framework in place, we are confident the industry will soon reap the fruits of its implementation in the form of greater transparency, improved asset quality, and stronger stakeholder protection. Additionally, it will help us keep a close check on how much debt each household is taking so that clients do not become overburdened, supporting long-term financial stability for them. We would now like to draw your attention to slides 19 and 20 on the asset quality update. Since November 2024, we witnessed a sustained and meaningful reversal in PAR10, a clear sign of recovery and discipline taking hold across the portfolio. PAR1 improved significantly, panning by 192 basis points from 6.8% in September 2024 to 4.9% by March 2025.
We also saw a positive shift in PAR 90 that stood at 3.7%, highlighting our ability to arrest forward flows, a result of strong client engagement, early intervention strategies, and a risk management framework that continues to deliver. Further, this improvement was visible across geography, particularly in our top four states: Uttar Pradesh, Bihar, Assam, and West Bengal. Among these, the top four states which together account for approximately 61% of our own book portfolio reported an average PAR 90 of 3.3%, comfortably below our national average. While we did see a slight deterioration in Bihar's PAR 90, primarily due to the impact of Gurzar Mukti Udhian and client migration, we are actively addressing this situation through strengthened engagement and targeted collection strategies within the regulatory framework and enhanced guidelines already in place.
However, it's worrying that PAR1 in Bihar improved slightly, panning at 6.6% in Q4 FY 2025 compared to 6.8% in December 2024, an early indicator of stabilization. Coming to the states which are Punjab, Rajasthan, Maharashtra, Odisha, and Jharkhand, we've begun to see early signs of recovery. While challenges remain, the early signs are encouraging, showing a clear reversal. To build on this momentum, we are further strengthening our underwriting processes in these geographies, ensuring that new client acquisition is more selective and risk-aware. It is safe to say that our strong geographic presence continues to anchor the overall resilience of our portfolio. Complementing this narrative is our conservative and forward-looking provisioning strategy, which further strengthens our ability to withstand volatility and safeguard asset quality. As of March 2025, we hold on-book provisions of INR 280 crore, representing 3.3% of the on-book portfolio, double the RBI requirement of INR 144 crore.
We have also continued to enhance our state-to-state coverage ratio, which stands at 62.3%, up from 60.4% a year ago. Additionally, we recovered approximately INR 38 crore against write-offs during FY 2024, made possible by the relentless efforts of our teams on the ground who rose to the occasion when it mattered the most. Furthermore, zero DPD collection efficiency for the month of March 2025 stood at 99.8%. In terms of growth, we continue to expand in a calibrated and sustainable manner. As of March 2025, our consolidated assets under management grew by 8% year-on-year to INR 12,784 crore, while the standalone AUM increased by 7% year-on-year to INR 11,316 crore. For FY 2025, we disbursed INR 10,663 crore on a consolidated basis, a growth of 1% year-on-year, while standalone disbursement stood at INR 9,837 crore, up 1.5% year-on-year. It's worth noting that FY 2024 was a stronger year for the industry.
In contrast, FY 2025 posed a tougher operating landscape. Yet, even in a more demanding environment, we surpassed our previous year's disbursement figure, a reflection of our structural strength and consistent execution. Even incremental growth in a challenging year is a very strong indicator of long-term stability and strong leadership. I'd like to briefly touch on the current developments in Karnataka and Tamil Nadu. The new proposed bills by the respective state governments aimed at curbing coercive recovery practices are intended for unregulated financials. While we are a well-regulated RBI-licensed NBFC, we are still taking steps, even though these states represent only a small portion of our overall portfolio, with Karnataka at INR 69 crore and Tamil Nadu at INR 227 crore. As a precautionary step, we have consciously curtailed disbursements in these regions.
We continue to monitor the situation closely and remain committed to maintaining portfolio quality through proactive and region-specific measures. Our network continues to deepen its reach. On a consolidated level, we now operate 1,568 branches across 529 districts in 29 states and UTs, while on a standalone basis, we have 1,454 branches. This extensive footprint provides us with a strong distribution platform to serve underserved markets, and reinforces our commitment to financial inclusion. Our client base stood at 3.36 million on a consolidated basis. Moving to the financials for FY 2025, our consolidated revenue grew by 16.1% year-on-year to INR 2,602 crore. On a standalone basis, revenue stood at INR 2,377 crore, reflecting a 15.9% growth. Our pre-provisioning operating profit came in at INR 754 crore on a consolidated basis, growing 3%, while standalone pre-provisioning operating profit came in at INR 736 crore, up 5.3% year-on-year. These results reflect our continued focus on operational efficiency.
On a consolidated basis, our net interest margin stood at 12.61%, with the standalone figure at 13.03%. These margins reflect a stable performance in a year marked by sector-wide pressures and a narrowing spread due to asset quality challenges and declining yield. The margin of yield loss during the year was primarily due to higher GNPA in FY 2025 compared to FY 2024, along with increased interest reversal on write-offs. Our GNPA level remained well under control as of March 2025. Moreover, operating expenses were temporarily elevated due to sector-specific headwinds, standing at 6.49% consolidated and 6.31% standalone for FY 2025. We continue to focus on operational efficiency and expect margin stability to improve as the environment normalizes. On a consolidated basis, ROA and ROE stood at 1.69% and 7.53%, respectively. On a standalone basis, ROA stood at 2.07% and ROE at 7.86%, respectively.
Coming onto the borrowing front, we continue to operate on a strong and well-balanced funding base. Given our marginal cost of borrowing decline of 68 basis points, it stood at 11.2% for FY 2025 as compared to 11.9% for FY 2024. During the quarter, we successfully raised a $100 million syndicated social term loan through external commercial borrowing, ECB, further diversifying our lending base. Despite the challenging environment, we not only secured this funding but also onboarded 14 new lenders, signifying a clear reflection of the trust and confidence we've built among our stakeholders. The company's financial position on a standalone basis remains very strong, with CRAR of 25.9%. As of 31st of March 2025, the company has adequate liquidity of approximately INR 1,217 crore, coupled with undrawn sanctions of INR 1,243 crore.
Robust liquidity position ensures that the company is well-positioned to meet all debt obligations comfortably without dependency on external equity, thereby enhancing investor confidence. On the ratings and recognition front, we are proud to share several key milestones. We received the SQS2 Sustainability Quality Score from Moody's rating for our social financing framework, reaffirming our commitment to ESG excellence. We are also recognized among the top 25 best workplaces in BFSI 2025, the top 50 best workplaces in Health and Wellness by Great Place to Work India, a reflection of our people-first culture. Additionally, Satin Creditcare Network Limited ranked 12th globally and received the Platinum Award in the Financial Diversified Services category for our FY 2023-2024 annual and integrated report at the prestigious Vision Awards by League of American Communication Professionals USA. This accolade reflects our commitment to transparent communication, high-quality reporting, and global best practices in stakeholder engagement.
I want to briefly speak about our people. We have proactively implemented multiple employee welfare initiatives to improve engagement and retention. We believe in nurturing internal talent and providing growth opportunities within the organization. Our leadership team, built over the years, continues to show exceptional commitment and strategic vision. At second, our vision that Bharat Banks Better is deeply personal and is a commitment we pursue tirelessly. Our commitment is to ensure that every household, every entrepreneur, and every aspiring dreamer in rural India has access to responsible, reliable, and inclusive financial services. In doing so, we are proud to contribute to the broader vision of Viksit Bharat, develop self-reliance in India, and where growth reaches the last mile. In closing, we are moving up with confidence and remain focused on our mission and the road ahead.
Our performance this year is not just a reflection of financial execution but of the strength of our people, the trust of our clients, the resilience of our systems, and the strong support of our stakeholders. Let me give you and run you through the financial and operational highlights of the company. Starting with the consolidated highlights, we have a customer base of 3.4 million as of 31st of March 2025, with presence spanning 1,568 branches across 529 districts in 29 states and UTs of India. Our top four states contribute to 56% of total yield as at Q4 FY 2025, and the states are Uttar Pradesh, Bihar, Assam, and West Bengal. Coming to standalone highlights, our average ticket size of airline lending for the year stood at INR 53,000 crore, as against INR 47,000 crore for FY 2024. We have a well-diversified customer base of 3.29 million clients, with 76% rural exposure.
Pan India presence stood at 1,454 branches. Shareholders' equity stood at INR 2,843 crore as of 31st of March 2025. GNPA as of March 2025 stood at 3.7%. The overall provision coverage ratio increased to 89% versus 83% in March 2024. Total borrowing stood at INR 7,887 crore as of 31st of March 2025. Debt-to-equity ratio as of 31st of March 2025 stood at 2.8x. As of 31st of March 2025, 97.4% of our districts have less than 1% of the agent. An update on subsidiaries: as a one-stop diversified financial services provider for rural India, our subsidiaries working collectively are expanding their financial access. Leveraging our strong microfinance outreach, we provide affordable housing and retail and SME loans to clients who have completed two or more loan cycles without and require higher credit score.
Satin Housing Finance Limited has now reached an AUM of INR 920 crore, which grew by 22% YOY, having presence across 19 states with INR 9,221 crore. SHFL has a 100% retail book, GNPA of 2.8% on 31st of March 2025.
Your PIN for your passcode has been confirmed. Please wait while you are joining.
Hello? Hi, Alex?
Yes, sir. Yes, sir.
Can you continue?
Yes, yes. Please go ahead.
The company has 32 active members, including NHB Refinance, CRAR of 52.2%, and gearing of 2.1x. That of FY 2025 stood at INR 4 crore. Fair rating of A- stable from ICRA and Infomerics. Satin Creditline Limited, the company's MSME lending arm, has reached an AUM of INR 548 crore. We are running down the business correspondent book and focusing on building retail MSME book going forward. MSME on-book portfolio grew by 58%, CRAR of 37.6%, and gearing of 2.3x. That stood at INR 7.5 crore. 21 active lenders, including banks, impact funds, et cetera, and a credit rating of A- stable from ICRA. Lastly, thank you for joining us today and for walking alongside with us as we build a very strong and more inclusive and more sustainable future. With this, I would like to open the floor for questions. Thank you.
Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 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. The first question comes from the line of Pranav Gupta from Invesco Alpha Investment Management. Please go ahead.
Hi. Good morning.
Please go ahead with your question.
Yeah. Hi. Am I audible?
Yeah, Pranav. We can hear you.
Yeah. Hi. Good morning, and thanks for the opportunity. Just a couple of questions. One is on the yields bit. You mentioned that there was an interest reversal in this year, obviously because of higher slippages. Could you quantify the interest reversal? Is this the largest quarter?
Can you hear me?
I think he's asking about yield decline. Is that right?
Can you ask it again? I think it's very clear.
I'll just repeat my question.
Yeah.
We saw interest reversals in this year and quarter because of higher NPS appreciation. Could you quantify the interest reversals? Is the entire yield dip in this quarter because of that, or is there any other factor?
So.
When I said, your voice was slightly unclear, but in case your question is overall yield declined during Q4 FY 2025, is that correct?
Broadly, yes. He wants the number of interest reversals.
You know.
The number of interest reversals for the quarter.
Before we give you the number, we want to clarify that the gross yield is not the interest income. It is the total top line, which includes the DA income, the TG income, MTN gains and losses to every DAUN. If you are seeing numbers from quarter- on- quarter, there could be some swing on quarter- on- quarter. If you see the overall yield for FY 2024 versus FY 2025, we are broadly online. For your information, the interest reversal for Q4 is INR 15.5 crore. This is for?
INR 27 crore for the year.
INR 15.5 crore is for Q4, and INR 27 crore broadly for FY 2025. Hope that answers the question.
Sure. The second bit is on the cost front. You mentioned it in the commentary as well, that obviously this year operational costs were slightly higher because of probably higher collection efforts and so on and so forth. How should one think about cost to average assets going ahead, given that if you look at any metrics, branches per employee, person per employee, all these not just for you, but for the industries as well as the.
Understanding that. How should one think about cost to average assets going ahead?
That's a surprise. The answer to this is very simple. For us, what is the pressing need right now is to have a good asset quality. I think for us, that is probably the need of the heart. That is the reason why our OPEX has increased, basically by various measures of putting in extra people and maybe more things which we've also put in into line and such. We feel that this probably will be elevated at least for some time more now because it's not just that you just put in people and just take them out the moment stability starts happening. It'll take a while before we are able to do it. I think we've reached a technical peak, and we are working very hard to increase our operating efficiency moving ahead.
We definitely will probably see that FY 2026 will technically have a lower overall operating expense ratio as what it was. I think the last year probably is like a different year in terms of how it has happened. Going forward, definitely, I think we will get this also under control once things stabilize across every sector.
Right. Is it fair to assume that we probably settle at a slightly higher number than previous year's averages, given that customer acquisition now becomes a larger part of the growth going ahead?
See, the growth is a sector factor. Looking at portfolio asset quality becomes a different factor. Our sense is that we've got everything under control for us. I think we've reached practically the peak what we had to reach during the last year. Now it's only a question how we are able to look at various things across the sector and try and bring it down. It definitely will come down during this year.
Understood. Thank you so much.
Thank you.
Good luck.
Thank you. Thank you, sir.
Thank you. The next question comes from the line of Shreyas Pimple from JM Financial. Please go ahead.
Hello. Am I audible?
Yeah, yes. You go ahead.
Yeah. Thank you so much for the opportunity, sir. My first question was on the yields. It seems like that the securitization income has dropped in this quarter. Could you throw some light on securitization demand in the market, and how much securitization would you like to do in the coming quarters?
I think you're talking about direct assignment transaction where the goes in the yield. There is enough demand in the market depending upon our own strategy. We decide how much direct assignment transaction we want to do in a particular quarter. The number is broadly in the range of 22-25% at the end of any quarter. In terms of demand, we have done some transaction during this quarter, which was lower than the previous quarters because we have raised a good amount of money through ECB routes and other transactions. Maintaining the liquidity, we decide how much we want to raise. As of today, we have not experienced any demand issue from the industry.
As you just said, we took a cautious call of reducing this in terms of our portfolio size. That is the reason why there has been a drop in the income, which does affect the gross yield assets. I think overall, if we really look at it, the best factor to look at is you should look at NIM. They probably remain flat at this level.
Right. Thank you so much, sir, for this. Secondly, on the cost of funds, how much benefit do you see coming in from the rate cut cycle? We see that in Q4 you have already reduced your cost of funds by a bit. Can you throw some light on that, please?
I think it depends on the overall ecosystem as well. As the overall rate starts going down in the market, I think we'll start getting a benefit with a lag. Our cost of fund has gone down in a difficult year from 11.9% to 11.2% this year. We feel that as in the overall ecosystem, the rates will go down. We'll get benefit probably with a lag. In case it's 50 basis points more, probably with a lag, we'll get that benefit.
Shreyas, just to add up to that, I think it is more important to maintain liquidity and get your tap running. I think rather than just looking at interest rate because I think that is probably the need of the heart and the way I think the narrative is there.
Yes, sir. Sir, I just wanted to know the mix of floating to fixed borrowings in the borrowing mix.
About 65% of the borrowing is on floating rate.
Understood. Understood. That is very helpful, sir. Last question was on the return metric. We see that our ROA has dropped in this year, of course, because of the anomaly that we saw in this year, majorly because of higher OPEX, a little compression in NIMs. What factor do you see contributing to increasing the ROAs going ahead in FY 2026, FY 2027? What are the key things that you are focusing on, sir?
Sir, I think first of all, it's to complement us that we got a positive ROA. I think that's more important rather than I think looking at NIMs and everything. It's compression everywhere, which is going our own senses. We want to see that our ROAs remain maintained by looking at credit cost to a larger extent. That's what our focus area is. NIMs, as I said, will remain practically stable. There is no the thing we've grown also in the year where profitability, I think growth was a big factor to really navigate. We've done that. Our main focus remains entirely on containing our credit cost, and that is where we are probably looking at. Risk, I think, is a factor and a byproduct of how we are able to contain our credit cost.
Understood. Understood. Just the last part on growth, would 15-16% be a fair assumption for growth in the coming years?
We are not giving a guidance right now. We just want to see how the first quarter pans out, to be very honest. There will be growth. That's what I can tell you. How much is something which is right now very debatable. We are putting in guardrails. We've already put in guardrails. We are looking at credit cost. We are looking at the entire matrix of how we evolve in terms of this whole scenario in the micro and sector quarter. There will be growth. That's what I can assure you. How much is, again, a matter of, I think, scientific ways what we will try and look at it. We'll address that maybe probably post the first quarter.
Sure. Sir, thank you. Thank you so much for the opportunity and congratulations on the good set of numbers. Thank you.
Thank you so much.
Thank you. A reminder to all participants, please restrict yourselves to two questions. If you have any further questions, you may rejoin the queue. Thank you. The next question comes from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Yeah. Am I audible, sir?
Yeah, yeah. You are, please.
Yeah. Thank you very much, sir, for this opportunity. Just wanted to understand, I mean, your PAR 90 has peaked out, and even the provisioning in credit cost is coming down. Will it be right to say that in quarter- on- quarter we would see the credit cost improving only? I mean, not the quantum, I mean, not the absolute quantum, but on a percentage basis, yeah?
See, Deepak, I think it's fair to look at it when you look at it entirely as such. There would be possible fluctuations which would happen quarter- on- quarter. I think that's probably the fair part where I can say that I will not be able to comment on quarter to quarter basis as such. One thing which I'm very certain, which I can probably say with certainty, is definitely for us, we've been able to contain our credit cost in the last year. We hope to do better than what we've done last year because we know how we are doing it. If you look at quarter by quarter, I think I will not be able to probably give you a right answer. That's not fair on my part because these things happen quarter- on- quarter. The first quarter always muted.
There's always work on heat waves and definitely this thing. Now, how much is the quantum? It's something which we already have taken adequate measures to work on that, and we are working on it basically. I think it'll be fair to only tell you our credit costs would definitely be less than what we've done last year, basically. That is the only thing which I can probably say with certainty.
Any guided range you can provide? I mean, last year you had provided 4.5%-5% for FY 2025. Any guided range for FY 2026?
As I said, wait for just one quarter. We're just trying to recalibrate and understand everything in the entirety as such. We give our guidance definitely post the first quarter because we also did it last year also. We gave it practically, I think, after the first quarter.
Yes, we gave after the first quarter.
Yeah. I think it will be a bit quarterly for us to give it, but we'll give it.
Right. Fair enough. No problem. My second question is on your guardrail. I mean, we are already more than 40 days into this guardrail implementation. What are the initial signs? Are you seeing any further stress increasing due to this implementation? How is the ongoing situation? If you can help us with that.
See, that much I can say. Our rejection rates have jumped up by another 3%. That is the only thing which I am able to see and which is there. That does not affect us too much. Basically, an increase of 3% of overall rejection rate, I think it is okay with us. We knew how much this was coming into.
Okay. In terms of your efficiency, collection efficiency, any impact?
Because of this?
Yes.
No. No, absolutely.
Okay. How has been April month collection efficiency? If you can throw some light on that.
It's been fair. I probably will not be able to give you much guidance on that. It's been fair. We look at the entire quarter in its entirety. Picking out one month technically does not give us the answer to what we are also trying to tell you or try to find ourselves. It's been fair.
Okay. It's been fair. Okay. Understood. That's very helpful, sir. I mean, yeah, all the best.
Thank you.
Thank you so much.
Thank you.
Thank you. The next question comes from the line of Rishikesh from RoboCapital. Please go ahead.
Yeah, hi. Thank you for the opportunity. Sir, can you share the slippages and the write-off number for Q4 and what it was year- on- year and quarter- on- quarter?
The write-off number for Q4 was around INR 38 crore. You also need for the whole year. Whole year would be INR 301 crore.
Can you also share what it was for last quarter and last quarter same year?
Last quarter as of FY 2024. FY 2024, my credit cost.
So Q4.
FY 2024, my credit cost was 2.35%. While the year closed at 1.45%.
My question was not with respect to credit cost, but with respect to the slippages and the write-offs.
The slippages this quarter was INR 32 crore.
Wait, you said FY 24?
FY 2024, the write-off. FY 2024, the write-off was INR 41 crore for the quarter four. It is lesser if you see year- over- year for the same quarter. The write-off is slightly lesser. Again, INR 41 crore, we wrote off INR 38 crore this quarter.
Slippage is for the quarter, you said it's INR 32 crore, right?
INR 32 crore is the slippage for the quarter. The total write-off for FY 2024 was INR 127 crore.
The slippage number for last quarter, can you please share that?
Last quarter, meaning FY 2024?
Quarter.
I don't have my sheet.
No, no. Meaning Q3 of FY 2025.
I'll share that offline with you. I think we shared it in the last earnings presentation. If you go to the transcripts, you'll find it there. I don't have it handy right now.
No problem. I'll just.
Okay.
Thank you.
Thank you.
The next question comes from the line of Ajay Prakash from Larsen & Toubro. Please go ahead. Jay Prakash, please go ahead with your question. Unmute yourself if you are on mute.
Hi. Have you connected?
Yes, please go ahead.
Yes. Thank you for the opportunity. Sir, you have Odisha, INR 364 crore portfolio, approximately 4% portfolio. The collection efficiency is very down. This is the major district you are affected in Odisha.
Your voice is very feeble. Ajay Prakash, your voice is very feeble.
Okay. Sir, you have INR 364 crore portfolio in Odisha. The collection efficiency is very less, INR 87.3 crore. Which is the major district in Odisha where you are affected most?
Which district?
Where are you affected most, which district?
I do not have very granular detail on which district probably is there. But if you look at the overall PAR numbers, it has improved from December 2024 quarter to my March quarter. I think that is the most significant. INR 364 crore of Odisha is close to about 4.2% of our onbook. And PAR 1 over there stands at about 11%, where PAR 90 is about 8.6%, which reflects in the collection efficiency which is there.
Sir, what is the basic reason in Odisha? You are at higher PAR 1 in Odisha. Can you put some light on this?
Odisha is a stress state. As I mentioned earlier, it's a stress state. It's a general phenomenon which is there in the industry. I think it'll be better if you compare this with the industry numbers. I think then you'll probably get a better answer. That is the reason why it's been there.
Okay, sir. What is the April fee percentage of 0.0 plus?
I will not have that handy.
Okay. Thank you so much.
Thank you. The next question comes from the line of Anant Mundra from Myt emple Capital. Please go ahead.
Hello. Yeah. Thank you for the opportunity. Sir, what is the reason that our consolidated PAT is lower than the standalone PAT?
We revalued our investment into subsidiaries. There is some change in the tax rates for capital gain on investment. Because of that, there has been some gain in the standalone financials, and that gets neutralized in the consolidated financials because we eliminate the holding subsidies there.
All right. All right. So none of the subsidiaries are loss-making?
No, not at all. I specified, I think INR 7.5 crore was the PAT for.
Yes, you did. Yes.
Yeah. INR 2 crore was FHFL. Yeah.
Got it. Got it. Also, I mean, if I see your Q3 presentation, you had declared the, I mean, the book value mentioned there was INR 232 crore. And at the end of Q4, it's mentioned as INR 230 crore. Is this also due to the accounting change that has happened?
230 is the consolidated book value. Standalone book value has increased.
Consolidated is 230. Yeah. Standalone would be at.
Yeah. Higher by 25, 26.
Just one second. I can give you the standalone now.
258.
28.
Yeah. There's a 28 difference between.
Standalone is 258.
Got it. Got it. Okay. I think this 230 number in the last quarter in the presentation was mentioned as 232, I think.
Standalone.
That was standalone, I think. 230 was standalone.
That was okay. Okay.
I don't have it right now, but I think that it would be that only.
Okay. Okay. I'll connect with you offline in case there's still confusion. I'll have it shared. We had a management overlay of INR 15 crore until the previous quarter. Has that been consumed?
Yes. We have consumed that. We have back-tested our model. Because of that, PD has slightly gone up. If you see the overall coverage from last year March versus this year, the overall coverage has gone down, but we have utilized that. We have tested the model, and it is, so to say, fine. We have got it validated from external reputed consultant as well.
Okay. Okay. The final question was that the other income that has reduced this quarter, is it primarily due to the DA income that comes in?
No. That small amount of money, we got some carbon credit last year, which we have not received this year. That is a marginal difference. Otherwise, it's a small number.
Got it. Got it. Okay. That's it from mine. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Ms. Aditi Singh to give her closing remarks. Over to you, ma'am.
Thank you, Alarik. Good morning, everyone, once again. Since we are at the end of the call, I would like to personally highlight one important point. One of the major challenges our nation faced this year was the impact of climate. It affected countless people's livelihoods and businesses, and it is an issue that deserves serious thought and sustained attention. As responsible individuals and institutions, we must ask ourselves, what role can we play? What actions, big or small, can we take to move toward a more sustainable and resilient future? We, at Satin, try our bit through green lending practices, promoting digital transactions, reducing our operational footprint, or simply being more conscious of how we engage with the things around us.
I just wanted to highlight this aspect, which should be talked about more while the earnings call gets all discussing about the numbers, but these factors do play a silent role. If you have any other questions that remain unanswered during the call, you can get in touch with Ms. Shweta Bansal from the IR team or myself. Our details are there on the company's website. As of now, the annual performance we've delivered this year is the outcome of patience, powered by the right strategies, right execution on the ground, and guided by clear long-term goals. On behalf of the entire Satin family, I extend my heartfelt thanks to our board members, investors, lenders, and every stakeholder who continues to believe in our journey. Thank you and have a good day.
Thank you, ma'am. Ladies and gentlemen, on behalf of JM Financial Institutional Securities Limited, that concludes this conference. You may now disconnect your lines.