Capri Global Capital Limited (531595) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the Capri Global Capital Limited Q4 FY '25 Earnings Conference Call, hosted by Go India Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Hardik Doshi from Capri Global Capital Limited.

Hi. Good afternoon, everyone, and welcome to Q4 FY'25 earnings call for Capri Global Capital Limited. This is Hardik Doshi, Head, Corporate Finance and Investor Relations. Let me read out the disclaimer for today's call. Today's call regarding Capri Global Capital Limited's earning performance will be based on judgments derived from the declared results and information regarding business opportunities available to the company at this time. The company's performance is subject to risks, uncertainties and assumptions that could cause results to differ materially in future. Given these uncertainties and other factors, participants in today's call may observe due caution while interpreting the results. The full disclaimer is available on Slide 41 of the earnings presentation. Participants are requested to take note of the same. With us today on the call, we have Mr. Rajesh Sharma, Managing Director of the Company; Mr. Partha Chakraborti, Chief Financial Officer; Mr. Sanjeev Srivastava, Chief Risk Officer; and Miss Divya Sutar, Director, Business Strategy. Let me now request our Managing Director, Mr. Rajesh Sharma, to present the opening remarks. Over to you, sir.

Good afternoon, everyone, and I hope, you all are doing very well. We announced our audited financial results for the fourth quarter and full-year-ended March 31, 2025, on May 5. I trust you have had an opportunity to review the earnings presentation, which is available on our website. I am pleased to report that Capri Global Capital has closed FY '25 on a strong note, delivering our best financial performance, backed by robust growth across our core segments, while maintaining disciplined risk and cost management. Our strategic focus on under-penetrated customer segments, backed by a digital approach and operational excellence, continues to yield tangible results. We've expanded meaningfully across all our core businesses, MSME, affordable housing, gold loan and construction finance. With over 1,111 branches and a growing base of more than 7 lakh customers, our reach into Tier 2 to Tier 4 markets have never been so stronger. Alongside our lending business, we have also seen strong progress in non-interest income streams, which together contributed more than 27% over net income for FY '25, led by insurance distribution and car loan origination. These asset light income streams enhance our capital efficiency and provide high ROE upside while enabling deeper customer engagement. Technology continues to be our core enabler. From loan origination to collection, our in-house developed end-to-end digital journey including application for sales mobility called Pragati app for customer app called Capri Loan app, collection app called CollectXpress and LoanXpress for valuing a property or technical app and in delivering faster turnaround times and deeper customer insights. In the Gold Loan segment, we have operationalized rapid sub-30-minute disbursal with fully digitized customer journeys and AI-powered security infrastructure. Our use of advanced data science, including AI and machine learning based underwriting scorecard, risk based pricing and real time collection dashboards, is driving sharper portfolio performance and enhancing operational productivity. I shall now move to the commentary on business and earning performance. We closed FY '25 with a strong momentum, delivering a consolidated AUM of INR 22,857 crores, marking a robust 46% year-on-year growth. This performance reflects the success of our diversified strategy across secured retail lending segment. The Gold Loan business continued to scale at an accelerated pace supported by a strong branch network and a seamless digital experience growing over 130% year-on-year. Our Housing Finance vertical also maintained its upward trajectory, driven by healthy demand in affordable housing across Tier 2, Tier 3 cities, posting over 24% growth during the year. Our disbursement for Q4 FY '25 stood at INR 8,389 crores, growing by 41% year-on-year basis. Notably, our portfolio remains largely retail and fully secured. With over 100% of the book backed by collateral underscoring our disciplined approach to risk and our commitment to financial inclusion through responsible credit. Our co-lending platform continues to demonstrate strong momentum and strategic relevance. As of FY '25, our co-lending AUM stood at INR 4,079 crore, accounting for approximately 18% of our total AUM compared to 12% a year ago. We have meaningfully enhanced the acceptance ratios and throughout across co-lending programs by streamlining our onboarding and credit assessment workflows. Co-lending remains an efficient tool for high ROE generation, capital conservation and liability diversification. We continue to build a well-diversified and secured retail portfolio with MSME and housing finance together comprising 46% of our total AUM. As of March 2025, MSME AUM stood at INR 5,278 crores, while Housing Finance AUM reached INR 5,202 crores, growing 24% year-on-year. MSME growth is being supported by the scaling of Micro LAP across 84 branches. Both segments maintain an average disbursal ticket size in the range of about INR 22,00,000, ensuring granularity and asset quality. With a continued focus on underserved markets backed by tech-enabled credit underwriting and branch expansion, we expect sustainable growth ahead in these segments. Our Gold Loan AUM grew sharply to INR 8,042 crores in FY '25, reflecting a robust 130% year-on-year increase, driven by strong customer demand and rapid branch-level scale up. With a network of 803 specialized branches across 10 states, we achieved an average AUM per branch of INR 10 crores, where over 95% of our branches surpassing INR 5 crores of AUM. The business continues to benefit from a fully digital loan journey, AI-powered security system and high customer retention with repeat customer now accounting for over 50% of the portfolio. As we deepen our geographic footprint and scale through co-lending tie-up, we expect Gold Loan to remain a high growth and high yield contributor to our secured lending portfolio. Our Construction Finance AUM grew to INR 4,133 crores, marking a strong 58% year-on-year increase supported by sustained demand in the residential real estate market and a healthy pipeline of affordable housing projects. We maintain a granular and well-diversified book comprising over 282 live projects with an average sanctioned ticket size of INR 2.7 crores. The business continues to focus on mid-size residential developers in metro and Tier 1 cities, offering construction-linked funding solutions through a robust diligence and escrow-based repayment and monitoring mechanism. Let me now provide an update on our core earnings. Our yields and spreads expanded further in the quarter to 17.3% and 7.8%, respectively, primarily on account of expansion in yields for housing loan and gold loan. Our net interest income for Q4 FY '25 reached INR 381 crores, marking a 49% year-on-year increase and FY '25 reached at INR 1,332 crores, marking a 35% year-on-year increase, driven by margin expansion and robust growth in our loan book. Our non-interest income continued to scale meaningfully in FY '25, contributing nearly 27% of our net income. This growth was led by 3 strategically important verticals: car loan distribution, co-lending and insurance. Our Car Loan Origination business generated INR 96 crores in net fee, backed by disbursement of INR 10,700 crores. With a presence across 803 locations in 31 states and union territories and partnership with 12 banks and NBFCs, we have established ourselves as a key sourcing partner in the space, offering speed, reach and consistent volume. In insurance, we tied up with 18 leading insurance across life, health and general category and closed the year with a net fee income of INR 73 crores. Our focus on digitally-enabled embedded insurance journeys and a cross-sell initiative, especially in Tier 2 and Tier 3 markets will drive this income stream going forward. Meanwhile, co-lending income stood at INR 165 crores, supported by rising disbursal volume and partner banks. Together, these fee-driven verticals are creating scalable capital-efficient growth level levers and enhance operating leverage and deepen customer relationships across the platforms. Our distribution network remains a key enabler of scale and reach with our branch count expanding to 1,111 and employee base crossing 11,400 by the end of FY '25. Having made such significant upfront investment in physical infrastructure over the past 3 years, our current priority is to drive higher productivity per branch and extract benefit of economies of scale. This shift is already yielding results with our cost-to-income ratio improving meaningfully from a peak of 70.5% in Q4 FY '24 to 54.8% in Q4 FY '25. We expect this trend to continue as our branch network matures, tech adoption deepens and operating scale improve across core lending verticals. As a result, our pre-provisioning operating profit increased significantly by 132% year-on-year to INR 254 crores for Q4 FY '25 and by 61% to INR 734 crores for FY '25. Our asset quality continues to hold steady, supported by the secured nature of our portfolio and measured approach to risk. During the fourth quarter, credit cost remained well-contained at INR 18 crores with full-year number at INR 101 crores, in line with our expectation. We saw a steady improvement in delinquencies with gross Stage 3 asset shift at 1.5% ending Q4 FY'25 versus 1.9% year-on-year and net Stage 3 at 0.9% ending Q4 FY'25 versus 1.1% year-on-year. We have maintained a provision coverage ratio of 41.7% on Stage 3 loans, reflecting our prudent stance. These outcomes are a result of consistent efforts in strengthening our collection system using sharper risk filters at origination and ensuring closer monitoring as we scale. We continue to maintain a strong liquidity position of more than INR 1,827 crores through cash and cash equivalent and undrawn credit lines across CGCL and CGHFL. During FY '25, we got new credit lines of INR 7,625 crores sanctioned for CGCL and CGHFL. Our capital adequacy ratio for both CGCL and CGHFL remains strong and stood at 22.8% and 26.9%, respectively. Our continued focus on scaling high-margin businesses and focus on cost efficiency is now reflecting in our bottom line. In Q4 FY'25, our consolidated net profit rose to INR 178 crores, an increase of 115% year-on-year and 39% quarter on quarter. For the full year, profit stood at INR 479 crores, up 71% from the previous year. These gains also translated into improved return ratio with ROE and ROA for the quarter at 16.9% and 3.6% and of 12.6% and 2.8% for the FY '25. In addition to enhancing our in-house development application, we are making investments in implementing generative AI for better underwriting assessment, fraud detection and cost efficiency. We continue to strengthen our collection process through using data analytics for channel location's strategy based on customer's past repayment behavior, monitor real-time collection, optimize route maps for field agents and use AI-based live tracking for higher productivity. This has resulted in robust average collection efficiency of around 99%. Lastly, we continue to focus on driving improvement in turnaround time, enabling us to meet our customers' expectation faster through hassle-free and timely disbursements. ESG continued to be a core enabler of our long-term strategy embedded across operations, governance and stakeholder engagement. This year, we were recognized with an S&P Global Corporate Sustainability Assessment score of 49, well above the industry average of 30 and ranked a 99 percentile globally on financial inclusion with a score of 75, a reflection of our deep commitment to underserved markets. On the environmental front, we have adopted responsible e-waste practices, invested in low-carbon digital infrastructure and aligned operations with the UN Sustainable Development goals. Socially, we continue to foster the inclusive, safe workplace through training, wellness and diversity programs. On the governance front, we have put in place robust oversight framework guided by a well-balanced Board and external expertise, ensuring that our decisions remain transparent, accountable and in the long-term interest of all stakeholders. With that, I conclude my opening remarks. We shall now take the questions.

[Operator Instructions] The first question is from the line of [ Sohail Gilani ] from ULJK Financial Services Limited.

Very good. Congratulations on a good set of numbers. The first question I have is about our loan book growth. We have grown at a very high rate, and we've reached INR 8,000 crores AUM in the last few years from 2022. So how would you say the journey has been? How have we been able to accelerate this growth at this rate?

So you have seen that we have added the capacity and capability both, capability by putting our collection processes, automation and driven by data science tools and invested on our training and giving -- imparting how to use these tools to -- on our 525-plus people in the collection. Investing on the technology side, we set up a tech center of 150 people on the technology side and 25 data scientists. And on capacity-wise, we have expanded branch network and added the more product. So growth is coming because of all these reasons. And I think our branches, which were if you look at 4 years ago, it was just 120, which is now 1,111 Branch. So, because of those expansions and upfront investment done, they have started yielding the results.

Got it. Got it. And also, in terms of the business per branch, we are at around INR 9 crores per branch right now. That itself is much more higher than the competition, so any comments on that.

You mean the branch -- the competition is having higher or we are having higher?

We are having higher.

Okay. So our per branch gold loan AUM is almost, now in March, is in the range of about INR 10 crores. And I think it is because of that right selection of the branches and right way of servicing the customer so he keeps coming for repeat business by building their digital journey and also our customer service, which is quite transparent, where without using pen and paper entire disbursement happens. I think because of that, we are able to build this AUM, and I see there's a lot of potential still exists ahead on ground to continue to remain on this growth path.

The next question is from the line of Shalin Kapadia from IIFL Capital. Due to no response from the current participant, we will move on to the next participant. The next question is from the line of Jay Mistry from Equirus Securities.

Congratulations on a great set of numbers, sir. So, I had 2 questions. The first question was on the yields of the gold loan, which are now at approximately 22% level. So, like with competition increasing and there's some regulatory scrutiny also hovering, so how does CGCL retain -- would be retaining such yields in the current environment? And like to maintain these yields, would we be any way compromising on LTV or asset quality front for the coming future? That was the first question. And on the second question, sir, we are seeing that our construction finance vertical has seen a quite uptick in the last couple of quarters, so like what would be the key drivers for this acceleration? Like are we adding new developers? Or is it because of penting up of demand or something? So those are my 2 questions, sir.

So regarding the yield of the gold loan, I think more the retail portfolio we build, the yield can be around that level. Of course, it depends on the overall market as well as the demand and underlying interest rate scenario. But in the near future, we don't see any sharp decline in our ROI of the gold loan offering. And whether these are high or will it impact our future growth? If you look at some of the competition, they are in the similar range. And it will depend on company to company what strategy they drive and how they want to do it, but it has no direct impact and bearing in relation with the asset quality or LTV because LTV is about 71%, which is overall ceiling of 75% within that. And in regards to asset quality, you have seen that now our gold loan portfolio is -- average maturity is not more than 6 months. So, every loan is getting closed within that period of time, and those impacts are coming if there's any asset quality issues. So we have seen that asset quality have remained very stable, so there is no surprises on that part. Coming back to Construction Finance, the book is still in about INR 4,100 crores. And a couple of last quarter, we have seen that there was a lot of good demand in terms of realization and the sale of those projects, and we have seen good traction. But overall, Construction Finance will always remain on a consolidated level, not more than 20%. So by following that, while the growth has been good, so is the collection, so is the asset quality. And that gives the confidence that overall, if the economy continues to grow, this Construction Finance will also continue to grow by maintaining a healthy book.

The next question is from the line of Mayank Mistry from JM Financial.

I had 2 questions. First is that our geographical presence seems more focused in North. So is it because that the competitive intensity is high in south or our only focus is on North? Or should we see the company expand its wings in south going forward? And my second question is that in the gold loan book, how much would be our consumption led and how much would be income generation? Because as per latest guidelines, I think there would be some more difficulties in the consumption-led gold -- consumption-led loans. So would you throw some light on this?

Yes. Mayank, so as regards our expansion strategy, it is very clear that we so far have been very active in north and west. But recently, we have entered in the south by opening Micro LAP branches. This year, we'll be entering the south by adding more housing finance, MSME and gold loan branches. So in the second half, you will see that these segments will have the branch network in Southern Andhra, Telangana, Tamil Nadu, Karnataka. So we'll grow in that segment also -- that geography as well. Now coming to bifurcation of the gold loan between the self-employed nonprofessionals or for the purpose of consumption or for the purpose of business, so while exact data I may not be able to give you right now, but by and large, these people who borrow money, they are running some kind of a business. Now at the moment we're tracking that whether he is using the money for business purpose or consumption purpose, of course, now that new guidelines have come, but essentially all these loans are taken by some microentrepreneur. And how many percent is going to business that is not yet trackable. Now once that guidelines, which are draft, finally get notified, we will adopt in our underwriting norm and underwriting standard as well as the customer onboarding process noting that for what purpose he is borrowing the money. And that time probably you'll get the precise number.

Okay. Okay, sir. And one more question is on the card origination. So I would like to know how is the risk split in this business. I mean, does the CGCL take the whole risk in its book and while the fund is being disbursed by the bank? Or how does this business work exactly?

So this is a pure fee vertical where we just originate the lead and share. There's no capital involved. There's no risk involved. So, there's nothing. You purely will get the fee income. The loan disbursement is decided by the bank, their underwriting rule. Our job is to just generate the lead and share with them. If they sanction or they reject it, it is up to them. But every case which is sanctioned and disbursed, we get to get our fees on that origination. It is a pure DSA arrangement.

The next question is from the line of Satyaprakash Pandey from Haitong Securities.

I have 2 questions. First is your spreads improved quarter on quarter due to higher yields, but cost of fund is gradually rising, approximately 9.5%. What's your view on the spread sustainability if systemic liquidity tightens further or if credit rating don't improve materially?

So cost of fund, I think is already this year, we've seen that Reserve Bank of India has started releasing the liquidity and rates have gradually -- repo rate have come down. We clearly see there is no single way of interest rate going up based on these indicators. And we believe that rates will soften on our incremental borrowing. And in regards to the rating upgrade, now annual results have come out. We will approach the rating agency, and they will take you what is -- where it fits into. So interest rate going up, there is no scenario. In case we get rating upgraded, of course, then there will be risk-weighted change, and of course, incremental borrowing on immediate basis we will get. Our cost of funds come down on existing borrowing. Whenever the interest loan gets -- reset happens, that is the time when the interest rate is reset for the lower side being upgrade of the rating...

Okay. That's helpful. My second question is, can you break down the internal movement of accounts between Stage 1, 2 and 3 over the past 3 quarters? What sector or geographies are seeing higher migration risk? And how are you adjusting underwriting filters accordingly?

So I will ask my colleague, Ravish, to take this question up.

So Stage 1 and 2, gross is around -- the numbers are in millions so it is INR 1,84,917.

So if you refer to the Slide Number 26 of the earnings presentation.

Yes. So should I call out numbers?

No, thanks. I will refer that and take it from there.

Okay.

So if you refer to the Slide 26 of the earnings presentation, there is a detailed breakdown of Stage 1, 2 and 3 along with the ECL provision for each of the stages for the last 5 quarters, including PCR and -- yes.

The next question is from the line of Shalin Kapadia from IIFL Capital.

I have 2 questions, please. So, with increasing digitization, how are you addressing the emerging risks such as algorithmic bias in the credit scoring model or cybersecurity threats in loan disbursal and repayment ecosystems? And secondly, sir, in a scenario where RBI further tightens the norms on LTV or co-lending exposure, what contingency frameworks are in place to preserve margins, liquidity and disbursal momentum without raising the risk thresholds?

So I'll take the second question first, is regarding the co-lending that recently RBI has come out with a draft guideline. It talks about how the LTV should be calculated and what are the other measures in terms of whether the end use of the loan, other aspects is to be done. So if you talk about LTV-related norms on the gold loan, I think that is going to benefit the overall sector, everybody, where LTV will become little conservative for the bullet repayment loans. As regard to other aspects, I think that is only improving the compliance, that is not going to reduce their demand or the cost part of it. Of course, initially, once the new guidelines come on the technology side with our banking partner, some alignment between the 2 organizations about the technology platform of API and other has to be done. But that is not going to change the earnings and the rate of interest and how the customer is serviced. That is more on the compliance and more on the customer being given the joint statement and the common yield and all that. And as regards to the increased digitization and cybersecurity threat, I think we already have engaged our consulting partner, which include KPMG and BCG on the technology side, and we are using a few vendors to meet those requirements on a continuous basis. Recently, we have appointed internally E&Y as an accounting firm, an assignment to strengthen the overall system. So that is ongoing. Now technology is going to be not a one-time affair. It is a continuous basis, getting changed, getting upgraded and keep on going. So I think if you see that we are spending close to about INR 90 crores to INR 100 crores a year on our technology, data science and other teams on this aspect. So we are heavily invested on this. And that becomes a part of it, no need to especially focus that something has to be done. It is an ongoing affair about upgrading based on the recent trend, guidelines and regulations.

The next question is from the line of Shreepal Doshi from Equirus Securities.

Sir, I joined a little late, so I had this question on LTV. I don't know if you already answered. So within gold, there are couple of trends that are emerging. Firstly, the ticket size that we are targeting is inching upward. Secondly also the LTV, now typically with this new regulation coming in wherein regulator is asking to have a 75% LTV, being monitored throughout the loan tenure and yet our LTV has increased during the quarter. So just wanted to understand the implication of this LTV norms by the regulator. And also, our strategy on ticket size within gold going ahead.

So our ticket size, gold is going to remain more or less so granular that it will be in the range of INR 1,00,000 only. And it is not going to change dramatically. Second thing is that about LTV norm, the RBI is saying that in bullet repayment cases, these are the draft guidelines, you must calculate the interest which is going to accrue as a part of LTV, thereby it means that your loan amount will be on the lower side. So LTV will get effectively reduced to that extent. So overall, it is a positive for while the gold has not depreciated in a drastic manner, but whenever in the future it happens, at least it creates an extra safety buffer LTV for these kind of loan-to-value loans. Since it is being applied to overall everyone, so the entire gold loan lending sector will adjust to these regulations, and it is not going to have a long-term impact, maybe initially you have to adjust it. But since being these loans are always getting reset in 4 to 6 months and loans are getting foreclosed because tenures are not longer, it is not going to have a longer impact. Had these loans been 10, 12 years to adjust, it creates a case of recovering that kind of amount to bring that LTV down. But being these are shorter period of loans, it doesn't pose a risk. So I believe the entire sector will adjust to these norms.

Got it. Sir just 1 follow-up here with respect to -- so what percent of our book would be -- gold book would be this bullet repayment book?

So I do not have exact number as of now. In case you require, we take it out and give separately. But we run various schemes where the interests are also offered monthly by choice or by options or by design. And some of the cases are on a bullet repayment basis, but that bifurcation is not available because we have not segregated that way. It is required specifically, we can carve it out and give it to you.

Got it. Sir, just from the -- like more from the trend perspective rather than from numbers perspective here, so the question is that at system level, would you say that majority of the loans that the NBFCs are doing would be more or less bullet repayment as an option? And one more clarification that I needed here. So when they say bullet repayment, is it like anybody paying interest component at -- let's say, even if you did a 12-month annual product, and if the customer makes interest repayment to me, let's say, at the sixth-year-end -- sixth-month end, even that will be classified as a bullet repayment only, right?

So to give precisely your answer, there are various options and schemes customer has to choose. And if the loan has been given on a monthly repayment basis and he doesn't pay and repay the bullet, that will not classify as a bullet repayment scheme. Bullet repayment scheme, on the day one it is decided they will not pay any interest, they will pay at the end of the repayment and interest together. If somebody is paying quarterly interest or monthly interest, will not qualify in the bullet repayment nomenclatures. Now, there are various lenders who also follow the process. If their customer has option to switch, initially they take the bullet, but they end up paying monthly or quarterly as and when. So -- and they are allowed to switch from one scheme to other by paying nominal charges of INR 500 or something like that depending on what are the design of that scheme is. So to pinpoint who is doing what and what is that everybody's percentage is it's difficult to say at the moment. But I think when common regulation comes, this is not something that will affect one player or other. And everybody will adjust. And ultimately, gold loan market, if you see, growth is coming from informal segment to formal segment. Gold loan segment, you're talking about, if you look at new players are coming, old players are continuing to grow 20%, 25% and new players are also growing. Thereby, it means there is a clear-cut market opportunity gap exists. It is not that 4 new players have come in and the new player -- the old player market share have gone down or absolute AUM have gone down. Even some of the largest players are growing at the pace of 18%, 20% year after year.

But, sir, our tonnage is not so solid, right? Like at system level also, like, I mean -- but I'll take that question separately. But just, sir, one question here was that so now incrementally, we have to classify a loan from day zero itself that it will be bullet repayment or it will be monthly repayment, and then, accordingly decide the LTV. However, that switching option which industry currently had, like, typically, at the time of disbursement, you give him a monthly repayment option, and then, the customer moves to a bullet repayment, and then, the interest rate changes typically. At the time of disbursement if it is 11% per annum, it gets shifted to probably 20%, if he's going for bullet repayment as an option. So now you believe now the incremental policy will be that on day 0 you will have to decide monthly or bullet repayment, and if he's going for monthly and then trying to switch to bullet, he cannot do that. Is it so?

He can do that provided he adjust to the new norms of LTV if and when they are declared. So, suppose -- put your question straight, suppose you have INR 1,00,000 of loan, if it is given at the 14% percent rate of interest for 6 months, then 7% is the interest LTV will get adjusted. So it is instead of 75%, INR 75,000 of loan, you are supposed to give only INR 68,000 of loan to him. So only that much adjustment has to be done.

Right. Right. Got it. So that much principle repayment that the customer will have to do if he wants to switch that.

Yes.

Got it. Got it, sir. This is very helpful.

The next question is from the line of Bhavin Pande from Athena Investments.

So if we look at Slide 17, a non-interest income has moved up significantly sequentially, almost 2x of last quarter. So what are the components that have contributed to this kind of a bump up? And also, what was the share of the insurance distribution business in this?

Hardik, you take this question. Yes.

Yes. So, in the fourth quarter, you see the bump up in the other non-interest income. There is a component of insurance income also in that. I will give you the exact number how much it is. So around INR 34 crores of -- out of those INR 101 crores or INR 102 crores that you see, INR 34 crores is coming from the insurance. And as you would have known that, we started doing insurance selling from fourth quarter of last financial year. And since then, the insurance income has been kind of on a strong upward trajectory. For the full year, we have a net fee from the insurance of around 73 crores.

Okay. And other sources that also contributed apart from insurance, if you could expand on those?

Yes. So in total, our non-interest income is comprising of 3 components. One is car loan, net car loan origination fee. That was around INR 24 crores for the fourth quarter FY '25. The other component is co-lending income, which was around INR 55 crores. And the co-lending income is proportionate to the growth rate. So the higher the disbursement, the higher the loan book growth. And also, the percentage of AUM that is under the co-lending. So if you see from third quarter FY '25 to fourth quarter FY '25, a percentage of co-lending AUM has remained flat. So this increase that you see from INR 29 crores to INR 55 crores is largely coming from the higher disbursal and the growth in the loan book. And the third component within the non-interest income is the insurance fee income, which as I mentioned is INR 34 crores for the fourth quarter FY '25 and INR 73 crores for the full year. And apart from that, there are other components, like treasury income, which is more like an investment income.

Okay. That was really helpful. And sir, when we look at Micro LAP and Solar Rooftop kind of businesses, how have they performed specifically in this quarter? Also, we have seen some sort of subdued performance in the MSME portfolio as compared to other segments, so what would be the strategy around these 2 segments and overall MSME book from a strategic vantage point going forward?

So our focus was on MSME that we have grown, and Micro LAP has been added. Since we are more focusing on the gold loan and we wanted to contain our growth within 50% range, there is a matter of bold direction. So we have diverted all our credit line towards the high yield product, which is the gold loan. However, this year, we are going to add more branches in Micro LAP and MSME. And this year, we intend to grow that segment, again, the normal growth about 15% to 20% kind of a growth in that MSME segment. And that segment will yield a good amount of profit because that we understand very well, we are doing that segment since last almost 30 years. So this year, you will see lot of branch additions happening in that and growth will be back.

[Operator Instructions] The next question is from the line of Varun Kumar, who is an individual investor.

Congratulations for the good numbers. I just wanted to ask what will be the outlook for FY '26 regarding growth?

So you are -- you wanted to know overall outlook or only gold?

Growth outlook. Growth outlook.

Okay. So growth outlook, we will be in the -- we will continue to grow our book in all segments. And I think what we are aiming, and earlier also we told, that next year we are going to be growth in the range of 27% to 30% kind of a range, and we intend to reach INR 50,000 crores of AUM book by FY '28. And we already have invested in technology in collection. And now building the branch network and our tech center is already built, all the technology, and keeping the pace ahead of others, so I think INR 50,000 crores reaching by FY '28 should be feasible. We are working on that. If you talk about our ROE, while we will remain in the growth phase, but 1.5% to 2% ROE we intend to generate from pure fee income play. And about overall ROE, we should be in the range of about 16% despite these new branches, OpEx will get absorbed. So on a steady state, our ROE could have been higher. But yes, since we wanted to grow, couple of 200 basis kind of impact of that will come. But we'll maintain the steady state ROE in the range of 16% in the next 3 years.

[Operator Instructions] The next question is from the line of Arup, who is an individual investor.

What kind of leverage ratio are you comfortable with? And do you have any QIP plan in mind for the next 1 year?

Hardik will take this question.

Yes, sure. So I think in terms of the leverage, currently, we are around 3.5x on a debt-to-equity basis. We will not go above forex kind of a leverage, and that is something that we have maintained historically also. In terms of the fundraising plan, we have taken the Board resolution, as you would all of you guys know, for the INR 2,000 crores. And the timing of the fundraising would be based on the market conditions. So we continue to evaluate that, but I think the exact timing would depend on the market conditions and how things play out from going from here onwards.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Yes. Thank you. As we move into FY '26, we believe our core strategy focused on secured granular retail lending positions us well to capture sustained demand across MSME, affordable housing, Micro LAP, gold loan and construction finance. Each of these segments offer large, under-penetrated opportunities in our distribution footprint. Combined with the disciplined underwriting and deep product expertise, gives us a clear advantage. We will continue to invest in technology and analytics, not only to improve turnaround times and risk assessment, but also to drive better productivity and customer experience across the board. With a fully secured book, improving operating metrics and healthy asset quality, we feel confident in managing credit cost even as we scale. On the liability side, we are seeing strong engagement from lenders and remain well positioned to secure diversified and cost-effective funding as we grow. As the Indian economy continues to grow strongly and the market for retail lending continue to expand further, we are confident of capturing the huge opportunity available to us to grow strongly at 27% to 30% CAGR and deliver sustainable ROE of 16% plus by FY '28. Thank you once again for your continued support, and we look forward to continuing to engage in the quarters ahead.

On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.