Axis Bank Limited (532215) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Axis Bank conference call to discuss the bank's financial results for the quarter ended as on 30th June 2026. Participation in the conference call is by invitation only. Axis Bank reserves the right to block access to any person to whom an invitation has not been sent. Unauthorized dissemination of the contents or the proceedings of the call is strictly prohibited and prior explicit permission and written approval of Axis Bank is imperative. [Operator Instructions] Please note that this conference is being recorded. On behalf of Axis Bank, I once again welcome all the participants to the conference call. On the call, we have Mr. Amitabh Chaudhry, MD and CEO; and Mr. Puneet Sharma, CFO. I now hand the conference call over to Mr. Amitabh Chaudhry, MD and CEO. Thank you, and over to you, sir.

Thank you, Michelle. We welcome you all to a discussion on Axis Bank's financial results for the quarter ended June 2026. We have on the call our ED Subrat Mohanty, Munish Sharda and Neeraj Gambhir and other members of the leadership team, too. While the global macroeconomic environment stays fragile and susceptible to geopolitical and trade-related uncertainties intermittent moderation energy prices and normalization of supply chains are keeping sentiment like where it was when we reported our quarter 4 financial year '26 results. India meanwhile, continues to stand out as one of the fastest-growing major economies the country has navigated recent geopolitical disruptions with notable resilience, underpinned by robust consumption, strong investment activity and the government's sustained focus on infrastructure and capital expenditure. In this favorable year evolving macro environment, Axis Bank remains steadfast in its commitment to build a stronger and a more resilient franchise. We continue to deliver a growth while further strengthening our balance sheet, improving productivity and deepening customer relevance across businesses. Now let me talk briefly about the progress we have made on each pillar of our GPS strategy. Starting with growth, our growth momentum remained firmly intact during the quarter as we continue to gain market share across advances and deposits, both on a year-on-year and quarter-on-quarter basis. Our total advances grew 19% year-on-year and 2% quarter-on-quarter within which wholesale grew 38%, SME 25% and retail 8% on Y-o-Y basis. Retail disbursement trend continues to sustain and remain encouraging, supported by our focus on sourcing quality customers. maintaining underwriting rigor and scaling distribution through effective execution across multiple distribution channels. Our SME franchise continues to deliver strong and diversified growth with digital and analytics serving as key enablers of scale. These capabilities are enhancing sourcing, speeding up credit decisions and improving customer experience while supporting disciplined and scalable growth. Wholesale Banking growth remains broad-based, driven by sectors benefiting from strong transaction flows. Our relationship [indiscernible] strategy, continued scaling of bit corporates and conglomerates and deeper on Access engagement are enabling us to gain wallet share while certainly improving yields and relationship economics. Moving on to the deposits. We continue to sustain faster than industry growth as year-on-year on QAV basis, our total deposits grew 18%. Term deposits grew 21%, CA grew 13%, SA grew 14% and total CASA deposits grew 13%. Sequential momentum in deposits was also strong on a QAV basis with total deposits growing at 6%. CASA growing at 5% and term deposits growing [indiscernible] deposit is attracting strong interest from NRI customers, and we see it as a meaningful opportunity to augment our deposit base through our NRI franchise and our proactive outreach to banks across overseas markets. Our cost of funds declined by 35 basis points year-on-year and 2 basis points quarter-on-quarter. Our effort main focus on further strengthening the deposit franchise to increase generalization and a more stable liability mix supporting a resilient and well-diversified funding base. We continue to see strong momentum in both customer acquisition and engagement our new-to-bank franchise is scaling with improving quality and premiumization, evidenced by an 18% year-on-year increase in [indiscernible] average balances. The corporate salary segment continues to be a strong growth driver, with 30% Y-o-Y increase in average and to be balanced in salary accounts, while the existing bank salary book also grew at 18% year-on-year. reflecting continued strengthening of our corporate salary franchise and customer deepening. Burgundy continues to be our key driver of optimization with assets under management up 20% year-on-year and 11% quarter-on-quarter, including AUM for Burgundy Private, up 16% year-on-year and 12% quarter-on-quarter. The strength and consistency of our proposition was further recognized with [indiscernible] honored at PW and Will Tech Awards, 2026. On profitability, our focus has been on building a more sustainable earnings profile driven by disciplined execution, operating leverage and ongoing efficiency gains. Our NIM for quarter 1 financial '27 at 3.46% is our cycle bottom. With the [ FCNR ] deposit depository in the near term, we will focus on growth and deployment of the original liquidity raised through this route. Our cost to assets declined further to 2.2% and down 21 basis points year-on-year and 8 basis points quarter-on-quarter through continued improvement in operational productivity. For the quarter, our consolidated ROE was 1.56% and ROE was 14.5%. On sustainability, we stay focused on quality, balance sheet resilience, building future-ready technology platforms and investing in people and capabilities to deliver sustainable outcomes at scale. Our GNPA was at 1.28%, declining 29 basis points year-on-year, and NNPA was 0.39%, declining 6 basis points year-on-year while the net credit cost was at 0.63%, down 75 basis points year-on-year. We successfully raised [ 600 million ] in additional Tier 1 and [ 300 million ] in senior debt instruments further strengthening our capital position and funding profile. The AT1 saw interest from high-quality long-holding investors, the transactions reinforce our credit standing and enhances financial flexibility. We introduced regular updates on our AI transformation journey last quarter, reflecting the growing role of AI across the franchise. Please refer to Slide 13 and 14 for details on the progress made. [indiscernible] enterprise AI operating model is designed to systematically embed are in the functioning of the bank by adopting a capability platform-led approach. The core idea is simple, build capabilities once, govern them centrally and deploy them many times across the enterprise. This will enable us to create reasonable assets that can be leveraged across businesses, functions, products and customer journeys, driving consistency, speed and scale. Our investments in digital AI and innovation to continue to gain [indiscernible]. During the quarter, we were named Best Digital Bank and the financial express India's Best Bank of us one of the best AI-driven customer experience initiative at the 14 days of Customer Experience Award, 2026 and received the platinum award at the Infosys Finacle Innovation Awards 2026 for leveraging next-generation technologies to drive innovation and corporate banking. These accolades reinforce the progress we are making in building a technology-led customer-centric franchise. At the heart of our strategy, continues to be a relentless focus on customers. Through our customer official initiative, Spark, we are leveraging digital capabilities, analysts, analytics and AI to simplify journeys, and hence customer service outcomes and build deeper, more meaningful customer relationships. Our digital enablers are now helping consistently enhance customer interaction through AI and CX platform. [indiscernible] handled queries, while 3.9 lakh customer service interactions were enabled through [indiscernible] during the quarter. We remain watchful of evolving uncertainties, including implications [indiscernible] on the macro. We are confident in the strength and resilience of the franchise we have built with a robust balance sheet, disciplined risk culture and a dose growth engine we are well positioned to capitalize on opportunities and deliver sustainable growth that outpaces the industry. With that, I will now hand over to Puneet to discuss the financial performance for the quarter.

Thank you, Amitabh. Good evening, and thank you for joining us. The salient features of the financial performance of the bank for Q1 FY '27 across operating performance, capital and liquidity position Asset quality, restructuring and provisioning is as follows: Net interest income at INR 14,646 crores, year-on-year growth of 8%, 1.3% Q-o-Q growth. fee at INR 6,166 crores Y-o-Y growth of 7%, granular fee 90% of total fees. Expenses at INR 9,722 crores Y-o-Y growth of 5%, expenses declined sequentially by 7%. We delivered a positive operating jaw on both operating revenue and core operating revenue. Cost of assets at 2.2%, declined 21 basis points year-on-year and 8 basis points Q-o-Q. Operating profit at INR 11,659 crores, up quarter-on-quarter, core operating profit at INR 11,122 crores, Y-o-Y growth of 10% Q-o-Q growth of 8%. Net credit cost at 0.63%, down 75 basis points Y-o-Y. In rupee terms, cost was down by 46%. PAT at INR 7,114 crores, up 23% year-on-year, 1% quarter-on-quarter. GNPA at 1.8% declined 29 bps Y-o-Y. Net NPA at 39 basis points declined 6 basis points Y-o-Y. Our provision cover is healthy at 70%, standard asset coverage at 1.24% improved 12 basis points year-on-year all provisions by GNPA ratio at 161% improved by 2,318 basis points year-on-year. Annualized consolidated ROA at 1.56%, annualized consolidated ROE at 14.52%, subsidiaries contributed 5 basis points to the consolidated annualized ROA and 36 basis points to the consolidated annualized ROE for the quarter. The bank's CET1 including Q1 FY '27 profit stands at 14.64%. Net -- we net added 26 basis points of CET1 in the quarter. The bank's provisions aggregating INR 8,244 crores, including standard asset provision created in Q2 FY '26 to regulatory guidance have not been reckoned for regulatory capital competition. Consequently, they represent an additional buffer over and above reported capital ratios, translating into an incremental capital cushion of approximately 52 basis points. This reinforces the bank's balance sheet strength and enhances our ability to navigate uncertainty while continuing to support growth and shareholder value. We reiterate we do not need equity capital either for our growth of protection pillar. We raised AT1 aggregating [ $500 million ] during the quarter and [ $100 million ] post quarter end to date. AT1 raised till quarter end added 34 basis points to overall capital adequacy in the quarter. The fresh AT1 raised till date places us comfortably to call back the existing AT1 on its contracted call date, subject to receipt of regulatory approvals. Net interest income and margins. Net interest margin for Q1 FY '27 was 3.46%, declined 34 basis points year-on-year and 16 basis points Q-o-Q. The Y-o-Y NIM decline of 34 basis points can be attributed to 19 basis points due to the full impact of the 125 basis points repo cut in the current quarter, versus 25 basis points of repo cut in the same quarter last year, net of benefit of cost of funds due to liability repricing, 16 basis points due to change in balance sheet mix through the last 12 months. The year-on-year net interest income growth was 8%. The difference between the Y-o-Y net interest income growth of 8% and the Y-o-Y advances growth of 19% can be attributed to 6% due to full impact of the 125 basis points repo rate cut in the current quarter versus only 25 basis points repo rate cut in the same quarter last year, net of pricing benefit on liabilities, and the balance, 5% due to change in balance sheet mix. The Q-o-Q NIM decline of 16 basis points is attributed to 3 basis points due to net interest reversal, net interest income reversal attributable to agri seasonality in slippages in Q1 versus Q4, 4 basis points due to change in balance sheet mix during the quarter, and the remaining 9 basis points due to change in pricing of loans. The cost of funds declined 35 basis points year-on-year and 2 basis points quarter-on-quarter. Lower-yielding RIDF declined to INR 5,725 crores year-on-year. RIDF comprised 0.1% of our total assets at June 26, half of what they were at June 25. At June 25, we were at 0.84%. Our [indiscernible] assets stood at 1.30%, total wholesale fee grew 18% year-on-year, in line with growth in advances, reflecting the improvement in the quality of the franchise. Trading income and other income stood at INR 580 crores, declined 62% year-on-year, mainly on account of us having booked realized gains on government securities and bonds in Q1 FY '26. Operating revenue for the quarter stood at INR 9,722 crores, growing 5% year-on-year and declining 7% sequentially. The Y-o-Y increase in operating expenses is INR 420 crores. The increase can be attributed to the following reasons, 38% is linked to volume, 44% to technology and growth-related expenses and the remaining to BAU. Our staff cost decreased 56% year-on-year. The Q-o-Q decline in operating expenses is INR 744 crores. Of this, INR 271 crores is due to onetime items in staff cost. Our Q-o-Q period-end headcount declined by 609 in absolute numbers. Operating expenses other than staff were down 9% Q-o-Q, largely driven by lower statutory costs. and lower volume-linked expenses on a sequential basis. Technology and digital expenses constituted 11% of our total operating expenses. We opened 20 branches in the quarter and 417 branches year-on-year. Net credit cost for the quarter was INR 2,079 crores. Annualized net credit cost for the quarter is 63 basis points, declining 75 basis points Y-o-Y. During Q4 of FY '26, the bank had proactively strengthened its balance sheet by volatilely enhancing the prudent provisioning framework for standard assets based on an assessment of the evolving and unpredictable macroeconomic and geopolitical uncertainties. The bank has created an additional onetime provision of INR 201 crores during Q4 FY '26. The bank has not drawn down any amount from the set provision during Q1 FY '27. Hence, the said provision remains at INR 201 crores at 30th June 2026. This provision continues to be prudent and consciously in nature and does not reflect any deterioration in asset quality or adverse credit trends in the bank loan or investment portfolio as on reporting date. The cumulative non-NPA provisions at 30th June stands at INR 15,608 crores, comprising prudent provision for standard assets at INR 7,013 crores, restructuring provisions at INR 184 crores, standard asset provisions at higher than regulatory rates of INR 1,854 crores and additional onetime standard asset position of INR 1,231 crores, weak and other asset positions of INR 5, 326 crores. Moving to growth across our liability and loan franchise, Amitabh has already discussed the growth in loans and deposits. We gained 10 basis points market share in the loan franchise and 20 basis points market share on a year-on-year basis on the deposit franchise. Our loan book is granular and well balanced with retail advances constituting 54% of overall advances, corporate at 34% and CPG at 12%. Please refer to Slide 17 and 18 for details around the quality of our liability [indiscernible] slides around our own franchise. 74% of our loans are floating rate, 45% of our fixed rate loan book matures in 12 months. breakup of the floating rate loan book by benchmark type and MCLR repricing frequency is set out on Slide 9 of our investor presentation. In Q1 retail disbursements grew 18% year-on-year. disbursement growth in home loans was 24% year-on-year, vehicle loans was 21% year-on-year, retail Agri was 16% year-on-year and personal loans was 23% year-on-year. Moving to performance of our subsidiaries. Detailed performance of our subsidies is set out on Slide 49 to 56 of the investor presentation. In Q1 FY '27, the domestic subsidiaries reported a net profit of INR 546 crores, growing 21% year-on-year. The return on investment in domestic subsidiaries was approximately 41%. Axis Finance. Axis Finance assets under finance crossed INR 50,000 crores, growing 21% year-on-year. retail plus MSME book constitutes 70% of the total loans of Axis Finance. Q1 FY '27 PAT grew 29% year-on-year to INR 244 crores and the capital adequacy ratio stands at 21.56%. Asset quality continues to remain strong with net NPA at 0.39%. Moving to Axis AMC. Overall, quarterly average assets under management grew 10% year-on-year to INR 3,69,030 crores. Q1 PAT at INR 134 crores grew 3% year-on-year. Axis Securities revenue for Q1 FY '27 of INR 410 crores and Q1 FY '27 tax stood at INR 96 crores, up 8% year-on-year. Axis Capital PAC stood at INR 65 crores, up 72% year-on-year, and we executed 8 ECM and 3 non-ECM deals in Q1 FY '27. Moving to asset quality, provisioning and restructuring slippage GNPA and NPA and PCR ratios of the bank and segmentally for retail, CPG and corporate are provided on Slide 42 of our investor presentation. Gross slippages for the quarter were INR 5,566 crores, of which retail was INR 5,176 crores. CBG INR 266 crores and our wholesale bank at INR 124 crores. Our gross leverage ratio for the quarter declined 134 basis points year-on-year. For the quarter, 31% of gross slippages are attributed to linked accounts of borrowers, which was standard when classified or have been upgraded in the same quarter. Net slippages for the quarter were INR 3,440 crores. Net slippages segmentally were INR 3,204 crores retail; INR 210 crores CBD and INR 26 crores in WBCG Net steppage ratio for the quarter declined 121 basis points year-on-year. The recoveries in written-off accounts for the quarter was INR 961 crores, up 6% year-on-year. Net slippages for the quarter adjusted for recoveries from written of food was INR 2,479 crores. Segmentally, retail was INR 2,614 crores. CBG was INR 136 crores, and our wholesale bank was negative INR 271 crores. In summary, we continue to make progress towards building a stronger and more sustainable franchise. We remain vigilant in monitoring the macroeconomic and geopolitical environment, inflation, liquidity and our cost of funds, along with their impact on our businesses. We thank you for your patience, and we would be happy to take questions.

[Operator Instructions] The first question is from the line of Chintan from Autonomous.

Can I get some color on the 9 basis points of pricing of loans that you gave in the quarter-on-quarter NIM bridge. What is this exactly -- is this kind of a kind of pressure -- incremental pressure on loan yields that is impacting. And also, if you can discuss the nature of these corporate loans. What is the kind of tenor? What is the kind of products that we are writing in? Is this something that kind of reverses once the capital markets become more accessible to the corporates. So some color on that would be helpful. And second, on the funding side, it seems like a lot of this corporate loan funding is being driven by wholesale funding, your LCR retail proportion has come down a bit. CASA systematically weaker but a little weaker. Is this kind of matching up of temporary corporate loans with temporary wholesale funding, which can go away over time as this demand goes away?

Chintan, thank you for your questions. I'll respond to it in parts. I think the one thing we can definitely tell you is we are lending on the corporate side at positive spreads. And at [indiscernible] that we feel comfortable with. So effectively, from a funding perspective, as long as we are able to lend at positive spreads, we're happy to undertake that lending. They are meeting our risk thresholds. Second, please do appreciate that 91% of our corporate lending leads to A- and above rated corporates. So we are lending to the higher end of the credit spectrum. Over the last 5 quarters, we haven't slipped down the credit spectrum at all. So the growth is high-quality corporate lending that we are undertaking. We feel comfortable with it if the opportunity presents itself. We will continue to pursue that strategy. The second part of your question was 6 basis points -- sorry, 9 basis points of pricing on loan. Chintan, my request would be think about it this way. we had roughly a percentage point shift in mix last quarter. We had also called out last quarter that period-end growth was higher than average growth. So there has been a spillover of last quarter's corporate loan pricing impact into the current quarter. We've also roughly had about a percentage point shift of mix in the current quarter. Both of these play through pricing on loans. In general, pricing on loans has been competitive for us as well as the rest of the industry. I think your last question on your last question on CASA. I think we've held up reasonably well, both on Period and CASA as well as average CASA. In fact, numbers that I see, I think our Q-on-Q performance on CASA, on average has been better than most in the industry. I hope I've covered all of your questions. I'm happy to take a follow-on.

Just 2 quick follow-ups. On the -- you said 4 basis points from balance sheet mix. So I would attribute the corporate mix shift towards that 4 basis points, and 9 basis points in pricing of loans. So should that be spread compression, but it doesn't sound like that. So I just want a clarification on that. And the second point on the corporate volumes. Are these temporary in nature? [indiscernible] how are corporates coming to Axis Bank because it's better for them for the moment? And once bond markets kind of normalize they might go back away. So just trying to understand whether these corporate balances are sticky or they kind of become a headwind to growth as they are [indiscernible].

Chintan, Vijay here. So these are across project finance, term loans and working capital. Some of these loans will transition into bonds as [indiscernible] but we believe that these loans have been given for in case of working capital, obviously, to take care of their shorter cycles in case of project finance and term loans for longer terms. And we expect them to remain with us. And because these are across sectors, which as energy, commercial real estate [indiscernible] metals, and we don't expect transition as soon as the bond markets become at to. But in the natural course, they will transition when the assets mature. And typically, that's how we have seen the market behave over several years.

Since you're asking questions on temporary -- we are -- we have been in business for a long period of time, and we are doing a combination of loans across as we just pointed out around working capital term loans, et cetera. So there is no specific bunch of temporary period loans, which have been created in this quarter, which will kind of somehow run off very, very quickly. Normal ratio is around a typical wholesale franchise. That's what we maintained to clarify.

[Operator Instructions] We'll take the next question from the line of Mahrukh Adajania from Tara Capital. .

My first question is again around NIM. So your cost of funds seems to have bottomed out. Now where NIMs go from here? As in that we had the structural NIM target of 3.8%, which we thought would be achieved over, say, maybe 12 to 15 months is what I recall. Where do we stand on that soft guidance? That's my first question. And then my second question is on OpEx. So obviously, you've called out and you've been -- you've given many, many details on OpEx. But what would be a normalized run rate for OpEx because you are seeing some productivity gains, you are seeing some reversals. So what would be a normalized level. So those were my 2 questions.

Thank you for your question. This is Subrat. On the direction of NIM, we have not changed our structural NIM guidance of [indiscernible] including the time period that we have mentioned in the past, like Amitabh mentioned, we think this is the bottom of the cycle in this quarter, which in some ways from our perspective would mean that from here on, the effort will be to continue to move towards the structural NIM guidance that we have during the time period that we had suggested earlier. Amitabh also mentioned that there is an FCNRB opportunity coming up during this quarter, which would mean that there might be surplus liquidity, which we'll try and deploy in terms of making sure that there is the right way to deploy and get growth on the back of that liquidity. On the guidance on cost. See, the work on efficiency and improvement on productivity has been ongoing over the last 4 to 6 quarters. So if you look at where the cost to assets have trended, over the last 6 quarters or so they have been trending downwards. We don't offer a specific terminal cost-to-asset ratio guidance. From our perspective, there are opportunities to continue to improve the productivity within the franchise. We have some opportunities on the upside in terms of productivity at the branch level. The technology investments that we have made in the past are bearing fruits. Additional investments are happening in AI. So like we have mentioned in the past, we'll see over the next 18 to 24 months, will continue to be on this path. But no specific guidance on cost to asset [indiscernible].

Okay. Also just one last thing. On your foreign loans, they've grown quite sharply. So -- if you could...

These are, again, as we have earlier said also, we've been very selective about both sectors and clients. And wherever we have seen opportunities to participate, which meet our internal thresholds [indiscernible] and also give us an opportunity for reciprocal floats and fee, we will continue to participate. Where in this case, the opportunity presented in foreign currency loans. So that's what it is, yes.

Just to clarify there on foreign currency loans, this is purely opportunistic. There are clients that are relationships, sometimes they bunch up in a particular quarter or so. No specific directional change in terms of how the portfolio mix is going to be. So some of this is purely opportunistic at this point in time.

The next question is from the line of Rikin Shah from IIFL Capital. .

I had a few questions. The first one, again on margins. So this 34 basis points of NIM expansion in [indiscernible] 12 to 15 months basis, your guidance, could you just provide a walk of how much of that can come through a reduction in the wholesale loan share reduction in wholesale cost of fund and the decline in the overseas loan share. So what could it be helpful to at least contextualize and get some confidence as to how this margin improvement comes through? That's the first one. The second question is on OpEx. There is a disclosure that there was some onetime write-back was it around INR 220 crores? And what exactly is this number a write-back? The third one is on the upgrades and recoveries, which seem a bit weak in this quarter. Why was that? And how should we think about potential recoveries from technical slippages over the last year here on. And maybe if I can just add one more question. It's on whether would you like to increase stake in Max Financial Services to 30% given RBI off let has allowed some banks to increase their stake to 30%?

Rikin, thank you for the question. I'd probably answer 3 and then request so glad to come in on the fourth. Your first question on the bridge back to in -- as part of my opening remarks, I had said that we've just about 16 basis points due to change in balance sheet mix over the last 12 months. So if you look at that change in balance sheet mix. We have consistently said that we do think we have the ability to recalibrate the balance sheet over a period of time. Retail disbursements have started growing. So that 16 basis point call out was to give you a [ quasi ] indication of the actionables that can be undertaken. The balance sheet mix is both segment advances as well as rupee non-rupee that was discussed as part of an earlier response. Moving to your second question on OpEx and what are the one-offs in OpEx. If you recollect, when we reported last quarter, we had taken about INR 129 crore charge for provident fund liability given by government security rates were at the end of that quarter. Government security rates were adversely impacted because of the de administrative action at quarter end. [indiscernible] rates have eased through quarter 1. And therefore, the charge that took place in quarter 1 has been a substantial part, ended up giving ourselves reversal. So Q4 charge has ended up giving us a reversal in Q1. So that's 1 large item. The second large item is around gratuity. And the third item effectively is we true up variable pay, and there was an Axis variable pay provision that we've to up. Those are the 3 items that aggregated to the quantum of one-off that I have called out for you. In fact, we've been transparent. And if you look at Slide 12 of our investor presentation, we've actually given you a Q-o-Q decline reported as well as normalized for [indiscernible]. I think your next question was on [indiscernible]. Okay. On upgrades and recoveries, Rikin, I think the simple point I would make to you is we stopped calling out technical versus nontechnical I think you should draw comfort from the fact that Q3 credit costs and Q1 credit costs are very similar. They both have seasonality. They both have meaningful improvement on recoveries from the technical pool. So I think that should give you comfort. We remain comfortable that slippage is attributable to technical criteria will not result in an economic loss for the bank. I'll hand over to Subrat for the [indiscernible] question...

Before Subrat, you comment on Max Life Puneet, just a clarification on margins, sort of 35 basis points of potential improvement that we are talking about 16 basis points is the balance sheet mix reversal, where does the balance come from?

Rikin, you've got -- I'm not going to lay out the entire bridge for you. Let us work through some of these numbers. effectively, please appreciate that 19 basis points of margin have been lost year-on-year because of repo rate cut. So effectively, even if I had held book static, I would have lost 19 basis points of margin. 16 basis points of margin is books mix change as of today. Effectively, like we said, retail disbursements continue to grow -- and as retail disbursements and retail growth picks up, you'll see some recalibration come through. The balance, we will find a way to bridge over time. We would not want to give you an exact itemized bridge because that flexibility we'd like to retain with ourselves. .

So Rikin, on Max Life stake, yes, there is an opportunity based on the clarification that RBI came up with in December. We are engaging internally. We will go through the process internally in terms of making the pros and cons of increasing the stake and then go back to the regulator and check if they are open to this idea. As you know, in the past, we were always keen on having a higher stake at that point in time, the regulations didn't allow us to. So this particular evaluation will happen, and we'll let you know based on some of the internal conversations and Board approvals. After that, we will inform you at the right time.

The next question is from the line of Kunal Shah from Citi Group.

Yes. So when we are talking about in terms of the change in the balance 6 mix, do you think it will have impact on the growth as well, maybe as we try to -- the margins and maybe the overall non-rupee proportion is to come off a bit and retail has to grow would we see some pullback on the growth side? Ex of FCNR bank will be there in the very near term. But otherwise, from the current run rate, do we see some normalization in the growth as well?

Kunal, we don't offer outlook on current run rate. I think what we've consistently said is we feel comfortable that we'll grow at industry plus 300. We haven't walked away from the industry plus 300 over the medium term as part of our commentary on the limit. So we will reiterate the fact that -- we still believe we will continue to grow at industry plus 300 as we find ways to recalibrate margins.

Sure. And in terms of the overall overseas portfolio, so this doesn't include any part in terms of either the FCNR or the leveraging part of it. So that's definitely not there in this entire book? And if you can just highlight in terms of how we are assessing the opportunity out there and how much we would be raising in terms of this entire FCNR window?

Kunal, had some affirmative statements which I would like to confirm or deny, you said the overseas book has no FCNR. We will comment on FCNR growth as part of when we know the quantum has been raised. The color of the overseas book, I would request you to look at Slide 30 of our investor presentation. I'll just read out the same features. 98% of that book is rated A and above, and 64% of the outstanding is to the top 10 conglomerate. So it's a very high-quality book that we run on the offshore side.

Okay. So in terms of the quantum rise till now under the FCNR window?

Kunal, we're not calling that out yet. Please allow us to report FCNRB numbers once we have concluded quarter 2. We've offered qualitative commentary on what we think we can do on FCNR. We believe that we'll lock above our organic market share on FCNR. We are not providing numbers on what we've raised until June or what we expect to raise until September.

The next question is from the line of [indiscernible]. .

So to talk on the margin part. You talked about the potential reversal of that 16 basis point mix change in the next -- in the last 1 year. But as a result [indiscernible] wholesale growth and then 8% of retail growth. So should we expect -- how much of that can we reverse because the reverse that we need to grow retail at 30-odd percent and wholesale [indiscernible] right? So how much of that mix change back should we expect in the next 1 year or so?

See we don't offer very specific details on how the mix change will evolve over the next 1 year. I think we have made this point consistently that you should look at our retail disbursement growth trends over the last 3 quarters, including this quarter, where it has been about at about 18%. That disbursement trend will eventually translate to book growth, which is happening gradually. So the work on making sure that is mix change reversal has been on for the last 2 quarters. And we'll see as we go forward, the disbursement strength in the retail side, will help us towards that. But we don't offer specific milestone-based numbers on how this will reverse itself over the next year.

Got it. And just a follow-up on the previous participant question on the basis points pricing change in fact . Sorry, I'm still confused because there's 4 basis points of mix change. And then what's the 9 basis point about is it Q-on-Q margin?

So the 4 basis points of mix change comprises asset plus liability mix change because mix change could also be placements, investments and advances, please appreciate it could be proportionality between earning assets. It could also be proportionality of earning assets to total balance sheet. So that's the quantum that is sitting in the balance sheet mix change. there is a liability mix change that is also sitting in the 4 basis points of balance sheet mix change. Now the 9 basis points of pricing change is a full impact of pricing of loans in the last quarter visible on yields in the current quarter, repricing of contracted loans. And given where incremental growth is coming from, the incremental loans compared to headline yield are because of the segment of which they're being lent to are being priced lower. So we've seen a price compression across loan categories given market competitive intensity which is sitting in the pricing 9 bps. And we've seen balance sheet mix change across assets and liabilities, that's sitting in the balance sheet mix change. I hope that clarifies all.

Sorry, on the retail disbursement, may I have the absolute retail disbursement number because we have a usual disbursement growth in the 18%, 20% in the last 3 quarters. So the book growth seating seems like a rather small pace from 6-odd-percent to 80% of the 3 quarters.

We don't disclose specific product-wise disbursement rupee values. I think if I was to give you something for you to look at, to collaborate our commentary. If you were to look at Slide 22 of our investor presentation, I look at year-on-year growth for current quarter, and plot next to it year-on-year growth for each product category that we reported last quarter. In all of the product categories, you would see an improvement in year-on-year growth. That should give you some comfort on the fact that the disbursement growth is translating into book growth with the lag.

So let's assume -- sorry, for to assume that mathematically, the disbursement will maintain at 18%, 90% of retail book, right? From how long did it take from 8% retail growth go to your average loan growth of 17%, 18%? How long does that take just mathematically.

My request is we can take the mathematical questions offline. Very simply put, whichever way I asked the question, I'm not going to guide product-specific growth. The growth is very simply, we have only 1 headline guidance on growth, which is 300 basis points above industry. I'm happy to answer this question as much granularity on how you should think about the arithmetic. But as a management team, we regret we will not provide segment-specific or product-specific growth numbers.

The next question is from the line of Piran Engineer from CLSA.

Just going back to -- I mean again, a mathematical thing, if NIM had declined 16 bps and our assets -- average assets, average interest-earning assets, whatever grew 3%, 4%, then NII should have declined, right, but it still grew. So what am I missing here?

Could you repeat. Sorry, Piran. Thank you for the question. Could you just repeat that again? I didn't fully catch the question.