Ladies and gentlemen, good day, and welcome to SBFC Limited Q3 FY 2026 Earnings Call, hosted by ICICI 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 touchtone phone. Please note that this conference is being recorded.
And now on the conference, over to Mr. Chintan Shah from ICICI Securities Limited. Thank you, and over to you, sir.
Yeah. Thank you, Iqra. Good evening, everyone, and welcome to the Q3 FY 2026 results conference call of SBFC Finance Limited. I would like to thank the management for giving us the opportunity to host their call. From the senior management, we have Mr. Aseem Dhru, Managing Director and Chief Executive Officer, Mr. Mahesh Dayani, Executive Director, Mr. Narayan Barasia, Chief Finance Officer, Mr. Sanket Agrawal, Chief Strategy Officer, and Mr. Rajiv Thakker, Chief Risk Officer. For the call, we will have an opening remarks from the MD, post which we will open the floor for questions.
So now, without much ado, I will transfer over the call to the MD, sir. Thank you, and over to you, sir.
Thank you. Thank you, Chintan. Good afternoon to everyone, and I'm, I'm sorry, I have a bad throat, so I may sound even worse than usual. On, on the horizon, I see the following four things play out. One, Ben Bernanke had said, and now all countries across the world have been spraying money from helicopters. The central banks are finding the link between their interest rate and market interest rates broken. U.S. and India, and then if you, if you, if you see what's happening is that, 125 basis point reduction in repo happened, and the G-Secs yields are firm up by 50 basis points. U.S. also, the same thing is happening.
Now, next year, it looks like the Indian government, between the state and center, will have to borrow over INR 30 trillion, you know, for on, on G-Secs. And, considering all of this, I see that next year, the interest rates may actually beginning to harden, more than soften that we are seeing right now. So there is a change in season that I see, playing out ahead. And, you know, banks also still haven't passed on their rates. I mean, if you look at nationalized banks, their MCLR has come down by not more than about 30 basis points. So, while repo has gone down, the transmission of these interest rates down the line is not happening. They also have their own constraints, on the fight on deposits.
RBI has its own challenge, you know, in terms of managing the velocity of currency. We will continuously this year see the circus of you know, defending the rupee fall, sucking out rupee liquidity, and then injecting that you know, through you know, through the market in instruments, injecting the liquidity back. So this will ensure that the rate of interest this year is likely to either remain same or harden and unlikely to soften going forward. Second, the latest financial stability report of RBI has some concerns flagged. Household debt is increasing at double the rate of financial asset creation.
So between 2019 and 2025, the report says that the household debt doubled to INR 15.7 trillion, while the asset additions dropped from 12% to 10.8% of GDP, even as liability went up from 3.9% to 4.7% of GDP. And now, if you look at end use, because ultimately that's what it is, that if generally retail money is going towards home loans, that is a good place for it to go. That is positive. Unfortunately, what is happening in India is that 46% of the money is actually going towards, you know, asset creation. Balance, you know, and end-use consumption is 46%. So no asset is getting created for 46% of, you know, money.
So half the loans that people are taking , in a sense, fiscal deficit of their own that they are financing. I mean, if you look at asset creation, about 36% of the loan goes towards that, and for productive purposes, which includes things like agriculture, business, you know, and, and, education, et cetera, is about 18%. So we are seeing weakening individual balance sheet. This means that loan growth will slow next year. The third thing, you know, which is the positive thing, is that there is this time. See, the year before, stock markets did very well, so wealth effect was felt by the rich. This time, gold has done brilliantly. So, first time there is a wealth effect that is at the bottom of the pyramid being felt.
And now we are about 35,000 tons of gold. So effectively, what is happening is that the value of this is beating our stock market handsomely. So, there is a wealth effect that is playing out at the bottom of the pyramid, you know, which is a very positive factor. The fourth, you know, positive factor is that, oil is likely to remain well-behaved, and that's a good tailwind, you know, for India generally. It takes a lot to keep something boringly consistent, especially when everything around us keeps moving, and we have, we have to move the boat steady, and headed in the right direction, at the right speed, despite all the crosswinds and currents, that we meet. I'm happy to report, one more nothing to report quarter at SBFC.
I would like to take you back to our JFM of last year, where we had said that Karnataka Ordinance has disturbed our steady portfolio. If you remember the last April call, we had said that what the damage of a quarter takes three quarters to repair, and another three to four quarters to restore. So we are now three quarters down since the damage, and we are seeing that the flow is now contained, but it will still take more quarters to start pulling back to earlier levels. So we continue to guide caution, because there is no change in our stance that we have declared so far. We are on track to end this fiscal year, FY 2026, with an AUM growth of 5%-7% quarter-on-quarter. A 50 basis points reduction in operating costs, you know, and a credit cost, where it is right now, you know, with a 5-10 basis point variation, you know, that can happen.
Now, to end this commentary right now, you know, there is never a right time to do anything, but sometimes you feel it is, you know, you know, it is that time. You feel it. It is a season of change at SBFC, where I hand over the baton to Mahesh Dayani. It is also a season of continuity as I move into the role as a non-executive vice chairman. I hope I can continue to add value to SBFC as a coach, you know, from being a player.
So, you know, thank you so much, you know, and with this, I hand over the call to Narayan, you know, who will take us through the numbers.
Thank you, Aseem. Hi, good evening, everyone. The AUM as of 31 December 2025 is at INR 10,478 crore, with a growth of 29% on a Y-o-Y basis and 5% on a Q-o-Q basis, with almost 100% of our books secured by properties and gold. The MSME AUM is INR 8,497 crore, which is almost 81% of our total AUM, which has grown by 25% on a Y-o-Y and 4% on a Q-o-Q basis. The loan against gold is INR 1,954 crore, is 19% of our total AUM, have grown by 48% on a Y-o-Y basis and 14% on a Q-o-Q basis. We have added 10 branches during this quarter, with a total branch count at 230 as of December 2025.
The yield for the quarter is at 17.78%, with a reduction of 23 basis point on Q-o-Q basis and 3 basis point on Y-o-Y basis. The cost of borrowing is at 8.74% for the quarter, with a reduction of 22 basis point on a Q-o-Q basis and 57 basis point on a Y-o-Y basis. Consequently, the spread for the quarter is 9.04%, which is at the same level on a Q-o-Q basis and has improved by 54 basis point on Y-o-Y basis. The OpEx continue to improve due to enhanced operating leverage, in spite of our consistent investment in our branch network. The GNPA is range bound at 2.71%, with PCR at 46.2%, with a credit cost of 1.29% for the quarter.
The capital adequacy ratio is sufficient at 31.7%, with a tangible net worth of INR 3,306 crore as of December 25. The return on average AUM for the quarter is at 4.67%, with return on average tangible equity further improving from 14.09% in Q2 to 14.56% in Q3. The PAT of INR 118 crore per quarter, thereby reporting a growth of 34% on a Y-o-Y and 8% on a Q-o-Q basis.
With this, we open the floor for question and answers.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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 is from the line of Raghav from Ambit Capital. Please go ahead.
Hi, thanks for the opportunity and congrats on the numbers. I have two questions. One, why have the disbursement volumes declined? So see, first, I would have assumed that it's because of higher stress. And then when I look at the absolute slippage number, or even the GNPA numbers, the stress situation seems to be largely stable, no major spike. Early buckets are also stable, so if stress formation is stable, is it competition which has impacted the disbursement volume? So I just wanted some color there, and then I have another question.
Yeah, hi. This is Mahesh here. I think on a lighter note to begin, I think, it's important to review your past stupidities so that you are less likely to repeat them. And I think quarter three, when we got into quarter three, the outlook way back then wasn't too great, and I think we had called out a little early that this quarter or quarter three is going to be a lot more cautious. Even while we are speaking, the color of, the portfolio quality, South in particular, if you look up the bureau's scores, are yet to be steady. So they're still, flashing amber, and they're still not green. West and North markets comparatively are a lot better.
So most of the impact that actually happened with respect to our disbursal growth came in from the southern and the eastern markets. And, what we did was that we had tightened our filters with respect to bureau scores and also paused some disbursal in some of our key markets, and that's where the big impact is. As you rightly mentioned, that November, December seems to be a lot better than probably what we thought, and the numbers for November, December seem to be encouraging, and we are looking at quarter four to get our disbursals back. But as Aseem articulated in his opening remark, our mood is still very cautious because the bureau numbers are still flashing amber, and it's not green as yet.
So see , your employee base has also been coming down, right? And I would assume that's largely because your outlook has been a little cautious with respect to generating business or doing disbursements. So, once you're disbursing, once you get the confidence, you know, on disbursements and on growing the business, is it fair to assume that your employee hiring will also step up?
Yeah. So if you look at our employee count, our employee count hasn't dropped. Our employee count over the last quarter, in fact, has gone up. The comforting factor is that my distribution and my people are there. The outcome with respect to the disbursal momentum is more internal, that we've done it on ourselves. So as the market tends to improve and as the outlook tends to improve, getting back to the disbursements is not gonna be a challenge. Just to give you a sense that, you know, last year, if you probably just go beyond a quarter, for last year, our disbursements were close to around odd INR 2,600 crores. In the first three quarters, you know, even if I were to add the current run rate, we'll be comfortably at between INR 3,000 crores to odd INR 3,100 crores.
So our disbursal run rate will always be at between 18%-20%-odd. So I don't think we are too, bogged down with the momentum for quarter three, because quarter three was more conscious of stabilizing our flows, and I think that's what we kept reiterating. Looking at the quarter three numbers, it's a lot more, we're in a lot more confident position, both on our 0+ and our 90+. So it gives us the confidence to speak out that quarter four is going to be significantly better in terms of momentum compared to quarter three.
Understood, you know, my bad, I stand corrected. Your employee number has gone up in 3Q. So sorry for misreading that. The other question that I have is that, your Chief Collection Officer has also resigned. Can you give me some color on, who will step into his place and steer this collection ship? And also, can you give me some color on the team strength and maybe the hierarchy, in the collections vertical, you know, from which, we can draw some comfort that despite this resignation, the collections will not be impacted?
So, see, it's a slightly largish bureau collection setup that we have been all through, both for early buckets as well as matured and NPA buckets. So, there are about 550+ people, you know, in collections bureau team on the ground. The new collection officer will be joining by the end of March, you know, so you know in first week of April, he should be there. So, you know, it's down the line, when you know the-- because we have a matrix structure, there is a zonal head, there's a regional head, you know, there's a full setup, you know, below.
So, but we don't anticipate any, you know, disturbance, you know, because of that. We wish him, we wish him, you know, all the very best. He's been with us, you know, for a good period of time. You know, he's seen the entire COVID period, you know, et cetera. So he's done a good job with us, and we wish him the very best for, you know, his next move. But for SBFC, it will be business as usual.
Sure. Thank you. That's all from my side.
Thank you. The next question is from the line of Nidhesh from Investec. Please go ahead.
Thanks for the opportunity. So first question is on ARC sale. I noticed that we have done some ARC sale in this quarter. Is it in gold or SME business?
So this is on MSME business.
Our 1 DPD also number gets deflated because of ARC sale, right, or?
ARCs, the assets which are sold to ARCs are NPA. But yes, since one plus also includes NPA to that extent, yes, what you are saying is right.
Sure. Secondly, can you quantify the impact of labor code? And, I noticed that our OpEx has reduced in absolute numbers, Q-on-Q basis. So what is driving that, and are there any one-offs in OpEx?
So the impact because of the new wage code is INR 2.24 crores for this quarter, and that's a one-time impact. Obviously, there were some excess provisions which are no longer required, and so those were reversed. So it is just a routine expenditure reversal. No, no one time in a way, but obviously a routine expenditure, which we thought will be there, which no longer was required.
So, see the, you know, as we are seeing the environment, you know, ultimately, we have to get efficient. And, the efficiency, you know, is of three things. One is getting your cost of funds down, getting your cost of operations down, and getting your cost of credit down. So, in the current kind of market environment, you know, we believe that at this point in time, we won't be able to reduce our cost of credit immediately. So the first job was to contain it, you know, which we have. The second thing is that efficiencies we brought in by both reducing the cost of funds, you know, which we have, and the market environment has facilitated to some extent, and the cost of operations.
Now, when we, you know, we have been moving a lot of things, you know, to ensure that, we deliver that 50 basis point reduction, in operating costs. So mind you, we are adding branches all the time. So it is not that as an organization, we are matured or we are, you know, we are pausing growth. In fact, this quarter we've added 10 branches. We had a INR 2.3 crore extra provisioning because of the labor code. And, despite that, you know, we've been able to manage, you know, this reduction. Now, this, you know, it may be a one-time, you know, higher number, but, that 50 basis point reduction, through the year that we had promised, you know, we should be able to deliver.
So, we are working on what we should do to bring it down further next year. So, ultimately, it is just about ensuring that the company becomes efficient, uses technology better, automates, you know, things that it can, whether uses AI, where it can, you know, you know, be agent in call centers, et cetera. So there are lots of measures being done in the company to ensure that the operating cost keeps coming down. We now have moved to a cost-to-income ratio of 35%. So this is slightly nice, you know, cost-to-income ratio to have, but we believe we can do a lot better than this. So we will be squeezing cost, even as we are, we're eking out, faster growth.
Sure. And next year also, we should expect 50 basis point cost to--
No, no, next year we'll--
Next year, we'll guide in April, you know, but, it will not be so much, you know, so, so we have delivered this three years, you know, so after IPO, this is the third year. And, we initially had guided it for the year one, we extended it by year two, we extended it by year three, you know, so now by the end of this year, we would have reduced it by 150 basis points. You know, and at 35% cost-to-income ratio, you would agree that, we are not, you know, so inefficient, you know, but yes, there is scope.
We will, you know, try to do better than this, but exact numbers, we will guide when we do our strategic numbers by the end of this month. So we will, we will guide you the numbers in April.
Sure. I also noticed that yield have declined by 20 basis points roughly sequentially, so have we passed on the benefit of rate cut to the back book or is it something else?
So, no. As of now, there's no rate reduction per se, but yes, we have cut down small-ticket LAP, as Mahesh was explaining earlier, that we have increased the bureau scores, et cetera, et cetera. So that is all leading to a slight drop in the yield at an overall level. So this is more like a hygiene. You don't want to take the riskier customer, and so the yield has slightly dropped.
Sure, sir. And last question is on the opening comments that Aseem mentioned, that household debt is increasing at double the rate of financial assets. So how do you see this ending up, let's say, next three, five years? Because if this rate continues, and what we see that all the NBFCs and banks are rushing towards retail lending. So how do you see this ending up for our economy and for the sector?
All right. It'd be beyond my pay grade to comment on this, but what I can safely say is that the quality of applications we are getting has been not very, you know, we are not very happy with it. So, you know, we actually said that we don't want to, below 700 CIBIL, we don't even want to look at a case. You know, when we did that, you know, our logins dropped. Now, logically, it should tell you that your approval rate should be better, you know, because you are not taking in cases that you shouldn't.
But even after that. Our approval rate, you know, has continued to drop. So, you know, and when we look at the leverage of the customer, when we look at trade lines, when we look at the recent borrowing behavior, you know, it tells you that the lenders, you know, have been a little fast and loose, you know, with lending. And, you know, we will have to be careful and protect our interest in what is not a you know, very comfortable market. And which is why I keep guiding that, I'm not yet seeing, you know, comfort, you know, while we are at a place where all the numbers, including NPAs across the system, are looking, you know, at its possible lowest level.
But this kind of a sharp increase in debt usually leads to problems later. And experience has taught us each time, and each time we believe that it will be different this time. But unfortunately, stock market, it may be, but in lending it never is.
Thank you. Thank you, Aseem. That's it from my side.
Thank you.
Thank you. The next question is from the line of Harshad from Premji Invest. Please go ahead.
Hi, sir. Good afternoon. Sir, the question was related to the--s o obviously this quarter, when we look at the numbers, disbursements were a bit more contained. And should we read that the reduction in OpEx to asset is also to do with the fact that a lot of the variable payouts linked to disbursements automatically come down for us, even though AUM buildup continues? So to that extent, if you can help that, I mean, what part of the cost to asset reduction should be linked to more variable costs coming down? And the second point was on if you can help us with the gold loan branches and the gold loan branches.
So, picking up first question, I think, we have 100% direct model. So clearly there's very limited variable that is linked, and if the variable is linked with disbursal, then optically only it's going to come down, but it's a marginal impact. Coming back to-- and in fact, the total headcount, you know, has moved up in line with the number of branches that we've added. So which gives us, your distribution is in place, your staffing is in place. We've consciously tried to tone down our momentum, and as and when we feel confident, we can get it back or we can ramp it back. So our guidance for an overall year-end number at INR 3,000 crore against INR 2,500 crore -INR 2,600 crore holds.
So that's just to calm the nerves on the disbursal for the full year compared to where we've ended on for the first nine months. With respect to our gold, our gold AUM per branch is close to around INR 10 crore now. We're close in INR 54 crore, almost close to INR 2,000 crore, and the number of gold branches is closer to INR 200 crore .
The number of employees attributed to Gold Loan would be how much, roughly?
So we would have roughly around odd eight employees per branch, so that's roughly around 1800 odd employees.
Understood. Got it. Sir, one last question was on the-- in, not this quarter specifically, but if I take our average ticket size and the sort of disbursement per employee, roughly it comes at around 2x5 per employee in terms of disbursal productivity. Now, so if you look at the business in general and all the efforts on automation, et cetera, is this too right now limited because of the fact of the quality of files which we are getting? Or, I mean, practically, this is a limit beyond which the economics won't stack up properly the--h ow can we look at this number improving over time? Because I think our cost to asset reduction journey is also now at a very optimal level.
So from here on, unless we improve the disbursement productivity, our loan growth will gradually start gravitating towards the disbursement growth numbers.
Yeah. So, right point. So I think our count is not two, the count is more leaning towards 1.5x. And that's largely because the login to disbursal ratio has come off, and that percentage has dropped by almost 5%-6%- odd before we entered this financial year. This also goes on to show that despite a higher bureau score, the rejections are still high, which effectively means that the leverage at an individual level or at a business level seems to be elevated, and hence, the conversions are not as high as what they used to be last year. That's one.
Second, as you rightly mentioned, obviously, we need to be efficient. Efficient with respect to our logins and ensuring the e-signs which happen with respect to documentation, which shaves off a significant time and effort, and is going to ensure that the front end probably is able to deliver a lot more. But that is subject to the kind of filters that we apply and the kind of eligible customer base that comes through, or the position of leverage improves moving forward. So what we're clearly looking at it, if you look at the, our entire ecosystem that we've created, right from staffing of the distribution to making, the front end enable, customer onboarding through an entire digital journey is in place.
As we move along, I think we have the capability to improve from here, subject to obviously the ecosystem also being supportive and improving.
Got it. Okay, sir. Perfect. Thanks a lot .
Thank you.
Thank you. Before we take the next question, a reminder to all, if you wish to ask a question, please press star and one. The next question is from the line of Sukrit D. Patel from Eyesight Fintrade Private Limited. Please go ahead.
Good afternoon, team. I have just one question, with strong capital adequacy and steady cash flow, how do you plan to sustain net interest margins while managing funding costs, and credit risk? From a financial process, point of view, how will you structure liability diversification, working capital cycle, and, hedging mechanisms to ensure ROE remains strong and balance sheet, continues to grow in the coming quarter? Thank you.
So, coming to your first question on NIM. So, as the leverage increases in our business, NIM obviously tends to go down, right? But I think the most important element here is to look at the spread. So, if you look at the spread over the last three years or four years, when the market interest rates were going up and the interest rate now coming off, we have been able to continuously look at a superior spread while also making sure that we are able to manage the credit cost. So I think what is important from our point of view is to ensure that we maintain the spread as we go along into the future, and we tighten the belt wherever we are able to, from a credit quality perspective.
Coming to your second question on ROE. OpEx, as you have seen over the last three years, OpEx has improved, and we further would like to continuously look at it and see whether operating leverages can further be improved. So ROEs from here, we have now achieved a 14.5% ROE. For the first milestone is to achieve a 15% ROE. So while we maintain spread with the improved leverage, and slightly better OpEx, ROEs should actually go up from here. The last question you have is on the debt and the mix. The mix has always been improving. Our bank borrowing total is about 50% or so. We have increased our borrowing from NCD market. We have already done that.
We have DFIs now. We have now signed with two DFIs, over the last, year. So gradually we are moving towards a much diversified portfolio. We have now raised money from ECB market. So diversification is going to be key. As we scale from here, we will actually look at diversifying into much more new sources as we go along in future. Our debt equity is still very low. It is, it is around 2x. Capital adequacy is pretty high. Raising debt is not a problem. Liquidity is abundant and, and quite available. So diversification, yes, will be, will be the course of action as we go along.
Thank you. Best of luck for the next quarter.
Thank you.
Thank you. The next question is from the line of Prithviraj Patil from Investec. Please go ahead.
Yes, thanks for the opportunity. So, I had a couple of questions. So the first one is on, do we target any AUM mix for our gold loan business? And, because the mix of gold loans has gone up by 200 basis. And I just wanted to know, is that leading to the operating efficiency that we are seeing in our OpEx to AUM? Thanks.
So, you know, if you were to probably look back a couple of quarters, you would have seen, probably 83 %- odd , 17%, and 1%. The 1% was largely unsecured, which was a legacy book, which we had discontinued, so that obviously has moved, in favor of gold. Gold traditionally has actually been, a high OpEx business. In fact, contrary to the belief that, it would have been accretive on the OpEx side. But yes, this quarter, because of the gold price support, you've seen a gold, AUM increase in line with most of the peers, who have reported those numbers. So one is, obviously, it's profitable, yields are looking good.
You know, costs as such are in line, and I think a lot of our existing MA branches which did not have gold have also started doing gold now. So there is some bit of saving there, which is coming to our advantage. But I think the gold trajectory will continue to build in from here. So if you look at two-three parameters, we are at INR 10 crore per branch. If you look at mid-sized companies who have probably 500-600 odd branches, you would have an AUM of anything between INR 13 crore -INR 14 crore per branch. So even on our existing distribution, if we probably didn't have to add any further branches, you could see an upside of, you know, +30%.
That's the efficiency that will kick in with our existing distribution on gold.
Okay. Thank you.
Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and one. The next question is from the line of Shreya Shivani from Nomura. Please go ahead.
Yeah, hi. Thank you for the opportunity. I hope I'm audible. My first question is on the asset quality trend. I want to understand, your provision coverage for stage 3 has-- I mean, on Y-o-Y basis, it's been up, sequentially, it's been flat. Can you help me understand, if there is any management overlay that we've built into, or is it just a number, purely a mathematical number that the model throws up? My second question is on the lending detail that you gave, that you are seeing even in a profile with a higher than 700 CIBIL, there is over-leveraging and probably more loans which are not towards, asset-creating activity.
So, is that an implication that probably more personal loan, where the end user is not defined, is visible to you in, in the kind of files that you are receiving? Also, is it in certain categories of your customer? Like, because your customers are all MNC borrowers, is it more amongst the trading community or the servicing community, where you see a higher chunk of personal loan maybe? I'm just, I'm just guessing that. Or, any color around that, if you can share with us. Thank you.
So, coming to your first question, on PCR and whether the management overlay increases the PCR. So management overlay has been made, but it has been made on stage two assets, it has not been made on stage three assets. So to that extent, the management overlay, whatever we have made, has not increased the PCR. PCR has generally got increased. Looking at the way the portfolio is moving, et cetera, the PCR numbers are improving. That's all it is. We have not made any special provision, so far as PCR is concerned.
On your second question, see, yeah, most of our customers would be small-time traders. And the thing is that, the end users, most of these customers' end users would be towards the working capital. Now, when Aseem was talking about the consumption, I think he was talking about overall, as an economy, and the numbers which is published by, a report. But our customers, most of the end users which we come across, while the personal discretion is, towards the business and working capital. Apart from the BTs, which is around, 15%- odd of our, book, which, wherein the loans are taken over. And of course, there is apart from that fifteen percent, there is also a part wherein we, fund customers for taking more loans. Not much of our customers, post our loans, would have, significant unsecured borrowing per se.
Some of the things which now, because of this, increased indebtedness, what we have also done is that we have tightened some of the filters and some of the ticket sizes, which are high risk, from FOIR perspective, so as to curtail the lending which we do to these customers.
Sure. And just to follow up over there, you mentioned that most of your customers, after your loan may not be taking a lot of unsecured. So your collection team probably is checking the CIBIL score. I mean, that must be a part of your business process, right? On regular basis to manage that, you know, the outlook that you're sharing, right?
Not collection team per se, but, at the risk level, we keep on tracking our customers, on intervals, wherein we see their behavior. And, specifically customers which are, borrowing outside and, are delinquent. T hese are the risk angles which we look at on a p eriod basis.
Okay, okay. This was quite helpful. Yeah.
And also from the foreclosure requests coming in, we rate these customers as a red flag, so that when the foreclosure requests come or enhancement request comes, these are flagged, so that we don't enhance these customers.
Sure, sir. That's very useful. Thank you for sharing, and all the best.
Thank you. Thank you.
Thank you. The next question is from the line of Nischint Chawathe from Kotak Securities. Please go ahead.
Hi, this is Nischint from Kotak Securities. Thanks for taking my question. I just wanted to ask Aseem, you know, if you will be associated with SBFC in any, any specific role, year and after?
Yeah. So Nischint, you know, the thinking is this, that, you know, while, you know, building the business out, you know, has its own pressure points and its own, you know, immediate deliverables. And, I think somewhere, you know, the culture of the company, you know, we can do a lot better than what we have done, you know? So, you know, I want to focus now some time, you know, building on that part.
You know, and also, you know, the whatever I was doing, you know, in terms of ensuring the governance, risk control, you know, compliances and et cetera, all those, you know, roles also, I would be, you know, handing over. The intention is that, you know, one, t he biggest challenge for any CEO is succession, and that is where a lot of CEOs, you know, even much better and much greater CEOs have, you know, struggled with, post their departure. The real test, you know, of my innings, you know, will be, you know, one year from today. And, you know, the idea is, you know, to ensure that, you know, without any hiccup, you know, the entire transition, you know, happens.
To the best of what, you know, I can, I would be hoping to contribute to SBFC in the role now as a non-executive, you know, vice chairman. And on a lighter note, you know, salary stops, but work doesn't.
No doubt the team will continue to do as well. Thank you very much, and all the best.
Thank you.
Thank you. The next question is from the line of Subhanu from Trivet Capital. Please go ahead.
Yeah, sir, can you hear me?
Yeah.
Hello? Yeah. So, one clarification question from my side. Sir, you mentioned our gold loan mix can go up to 30% also?
Loan mix on what?
Gold.
Gold.
Gold Loan.
No, no, no. So what we said is that the Gold Loan currently is 19%-20%-odd. 19%- odd. We said that, given the, you know, current spurt in terms of the gold prices and the resulting growth, you could see a couple of basis points moving up here and there, but not a 30/70 ratio.
See, our guidance for, you know, gold loan has been that it will be under 20%, continues to be, that. You know, a few basis points here, there, can happen. Now, if, if gold rallies and doubles from here also, who knows? You know, so, that's not in our control. But you know, even co-origination, we have said that it will be about 20%, you know, for origination, and that's what we have kept it at. So the intention is to keep it around 20%.
Okay. Sir, my second question--
He was on the growth of gold.
Okay. So, what is the average ticket size growth, average ticket size in the SME segment this quarter?
10 lakh.
What was the average ticket size?
10 lakh .
10 lakh. My last question is, how much customer are in the SME segment come from Tier 2 and Tier 3 segment?
I think almost, most of them would be Tier 2, Tier 3.
Tier 2, Tier 3.
If I were to hazard a guess, it would be more than 85%-90%.
Tier 2 and Tier 3. Okay, thank you, sir, and best of luck.
Thank you.
Thank you. The next question is from the line of Chintan Shah, from ICICI Securities Limited. Please go ahead.
Yeah. So, I just had a question on growth. So in our earlier remarks, you mentioned the leverage levels are relatively increasing and the household debt is increasing, but so not is the asset creation. So, in this context, how do we see our growth going ahead? Will it be at the lower end of the guidance or probably even we could taper our growth further from there if there is some more leverage happening and if there is a situation of a relatively slow growth or a crisis or as such, yeah?
So look, there is no crisis or, you know, situation. It is, as I said in the opening of the call, we continue to guide that we will be in the same range, you know, 5%-7%, say 1%-2% here or there, I mean, too much shouldn't be read into it, you know. So, 5%-7% quarter-on-quarter growth is, what we continue to guide from what we are seeing right now. If we see that the deal is differently, you know, then we will let you know. At this moment, we maintain what we've been saying.
Sure, sure. Got it. Thank you. So yeah, in terms of our management team, so are we now expecting any other addition at the CXO level in the management or no? Yeah. So for Mr. Mahesh's role.
No, there is internal, I mean, there are internal, you know, talents that we have, you know, there. So, you know, some elevations, you know, may happen within that.
Understood. Got it. Yeah, that is from my end. Thank you, and all the best to you.
Thank you. The next question is from the line of Vivitash Arora, an individual investor. Please go ahead.
Hello?
Yeah, hi, we can hear you.
Hello, sir. My question has already been answered.
Thank you.
Thank you. The next question is from the line of Ashish Sharma from Oaklane Capital. Please go ahead.
Yeah, hi. Thanks for the opportunity. Hope I'm audible, sir.
Yeah.
Yeah. So just wanted some perspective on the credit cost. So credit cost, which has sort of increased given the environment, would it be possible for you to sort of give any outlook on credit costs for FY 2027? I mean, you'd expect credit costs to remain in the similar range?
So look, at the moment, we're guiding for the next quarter, which is in the range of 5-10 basis point up or down. For the next financial year, we'll guide in the month of April. By then, we'll also see the color on what is happening in the South Book, et cetera. So we'll have more knowledge, we'll give you the entire year's guidance in the con call of April.
Okay, perfect. Thank you. That will be all from my side, and all the best, sir. Thank you.
Thank you.
Thank you. Ladies and gentlemen, we'll take this as the last question for today. I now hand the conference over to the management for closing comments. Thank you, and over to the management.
Thank you for taking the time in reading our results, investor deck and the questions. Thank you so much.
Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your line.