Fusion Finance Limited (FUSION) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Fusion Finance Limited Q1 FY '27 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand over the conference to Mr. Hanishi Shah from Adfactors PR Investor Relations. Thank you, and over to you, ma'am.

Good evening, everyone, and thank you for joining us on the Q1 FY '27 Earnings Conference Call of Fusion Finance Limited. We have the company's senior management team with us on this call. Before we begin, I would like to remind you that certain statements made in today's discussion may be forward-looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available in the Q1 FY '27 investor presentation, which has been uploaded on the stock exchange and the company website. I now hand over the call to Mr. Sanjay Garyali, MD and CEO of Fusion Finance Limited. We'll begin with the proceedings. Thank you, and over to you, sir.

Good evening, everyone, and thank you for joining us on Fusion's Q1 FY '27 Earnings Call. The last 18 months, there is a significant change that's happened in the microfinance industry. The bottom segment, which constituted of heavily leveraged customers are ones who did not have a steady income stream moved out of the formal MFI sector. The customer who remains is, in our view, better place to service our obligations and navigate the external headwinds than she was at the start of the previous cycle. Fusion has used the same period to reshape its portfolio, more selective on customer acquisition, more granular on where we grow and more technology-led on how we manage the business. Q1 gives us increasing confidence this strategy is working. Business momentum strengthened, disbursement grew 88% year-on-year to INR 1,783 crores, while AUM grew approximately 4% sequentially to INR 7702 crores. On the quality front, approximately 85% of the customers disbursed in Q1 had just one other lender besides Fusion and 37% were new to Fusion. A figure that moved closer to 40% in June with a similar trend into July. This is in line with what we have been saying about 40-60 ratio on new versus existing. Last quarter, we described the methodology we use to categorize MFI branches by credit quality, operating performance and growth behavior. That framework is delivering the outcomes we expected, helping us decide with more precision where to grow, where to calibrate and where management attention is needed. The result shows in portfolio quality. Collection efficiency remains above 99.75%, risk and growth decisions are increasingly now embedded at the branch level, letting us intervene early when portfolio behavior shifts. We are also evolving how we manage harder bucket collections. Until last quarter, external agencies handled roughly 30% of the hard bucket recoveries. We have now moved that capability fully in-house, combining AI with our own collections and branch teams. We [indiscernible] run 2 models on hard bucket collections, one dedicated collections team engaging customers directly towards a resolution; and two, AI handling initial identification and contact before the branch teams takeover. This transition hasn't caused us recovery performance. In fact, we continue to deliver upwards of INR 35 crores quarterly from the 60-plus DPD book and INR 21 crores from this -- of this is from the written-off portfolio. That gives us greater control over customer engagement, less dependence on external agencies and a more scalable recovery model. The same discipline is shaping in our network. In FY '27, between now and Q3, we expect to open around 50 new MFI branches while rationalizing about 100 existing ones. The goal isn't just on branch count. It is the right branches in the right markets, serving the right customers. Turning to how we are extracting more value from a distribution franchise we have already built starting with MSME. MSME collection efficiency remains above 99.3%, giving us confidence to move into calibrated expansion. Disbursements moderated in April typically a seasonally soft month for mortgages, but May and June returned to Q4's average monthly levels. We continue to deliver on our right to win with no deviations on cash flows. In early Q1, we had identified 200 existing MFI branches in attractive MSME catchments where we would want to source secured business. The customer segments stay distinct, but we will leverage existing real estate for MSME sourcing. We are starting with around 50 of these locations in this quarter and will expand progressively based on our performance. We are also [indiscernible] Tamil Nadu for MSME for the first time using our existing MFI retail infrastructure, but with a separate MSME team and independent underwriting and credit processes. Within MFI, our PQM model is delivering encouraging value across roughly 250 branches. In parallel, we are also launching an individual loan product across these branches for a select more engaged segment of MFI customers, lower on leverage, higher business vintage and an established repayment track record with Fusion. This isn't simply a larger ticket MFI loan. Initial assessment originates with MFI, but credit evaluation has a close oversight from the MSME credit team. We will scale this gradually based on portfolio behavior with potential for individual loans to reach around 10% of MFI disbursements over time. Together, these initiatives let us extract more value from an existing distribution franchise while keeping customer segments and credit architecture clearly differentiated. We have also identified specific MFI customer segments where we can increase share of wallet, and we are developing differentiated products for them. Most of this would be either launched while we are talking or would be launched in the next fortnight. Technology is another area where the conversation at Fusion is changing. In Q1, our AI-enabled platforms handled over 6 million customer interactions, reaching more than 1.1 million customers, inbound calls are now quality monitored using Gen AI, improving consistency while lowering calling costs. This is translating into earlier risk identification more consistent customer engagement and higher productivity. Our new LOS and LMS platforms should strengthen these outcomes further I'm very happy to share with you that the initial pilot on migration has been very encouraging and has got thumbs up from the field teams. Now to the financial outcomes, GNPA improved from 3.21% to 2.51% and credit cost further declined to INR 40 crores, in line with the 2% annualized expectation. The seventh consecutive quarter of reduction. Reported PAT for Q1 was INR 62 crores and ROA of nearly 3%, again, in line towards the 4% end of the year ROA that we plan to achieve. On a like-to-like basis, PBT rose from INR 37 crores in Q4 FY '26 to INR 62 crores in Q1 FY '27, up approximately 67% sequentially, our trades third straight quarter of improving core profitability. There is an important shift underway within these earnings. The first phase of our earning recovery was driven largely by normalizing credit costs. The next phase should increasingly be driven by average AUM growth and operating leverage. We remain focused on reaching that INR 10,000 crores of AGM by the year FY '27, calibrated around portfolio quality and broader operating environment. FY '26 was about rebuilding Fusion, FY '27 is about showing what the rebuild Fusion can deliver. Q1 is an encouraging start. Our focus now is consistent execution through rest of the year. With that, I will hand over to our CFO, Mr. Krishan Gopal, for the financial performance in greater detail.

Thank you, Sanjay, and good evening, everyone. I am pleased to present our quarter 1 financial performance. This quarter reflects strengthening across profitability margins, asset quality and capital with discipline and well-capitalized growth. The improvement in our book is clearly evident in our strong asset quality metrics. Asset quality continues to improve during the quarter. Our gross NPA stood at 2.51% as of June 30, '26 compared with 3.21% in the previous quarter, while net NPA stood at 0.47%. This improvement was driven by strong collection efficiency, healthy recoveries and seasoning of a higher-quality portfolio. Credit costs declined from INR 56 crores in Q4 '26 to INR 40 crores in Q1 of FY '27, marking our seventh consecutive quarter of credit cost reduction. The company has also significantly strengthened its balance sheet over the last few quarters. Our focus has been on 3 key priorities: maintaining a strong liquidity buffer, reducing the cost of funds and diversifying our funding franchise. These initiatives are now clearly visible into our funding matrices, ALM position and margin profile, creating a stronger platform for sustainable growth. As of June 30, '26, we maintained INR 1,880 crores of liquidity in addition to our own balance sheet liquidity, we have approximately INR 2,300 crores of undrawn sanctioned facilities available for utilization. Further, we have a strong funding pipeline of approximately INR 2,000 crores, together, these pot us with significant liquidity cushion and hence, our funding flexibility and position us well to meet our obligations. Our capital adequacy ratio stood at 36.95%, comfortably above the regulatory requirement. This strong capital position provides us with a sufficient headroom to support our future growth while maintaining a prudent capital structure I'm pleased to report that there is no financial covenant breach as on this quarter end. Our marginal cost of borrowing reduced from 12.6% in Q1 of FY '26 to 10.1% in Q1 of FY '27, representing an improvement of approximately 250 bps points year-on-year. On a sequential basis as well, marginal costs reduced by 20 bps from 10.3% in Q4 FY '26 to 10.1% in Q1 FY '27. While the reported average cost of borrowings stood at 10.6%, the underlying cost trajectory is more encouraging. After adjusting the INR 4 crore NPM impact or to avoid that INR 4 crore impact our normalized average borrowing cost was approximately 10.3% in Q1 FY '27, which is current quarter, compared to 10.4% in Q4 FY '26, which is just the previous quarter. This MTM impact is expected to be not there next quarter onwards. Our external credit rating remains strong with A- table from Crystal A table from care and A- table for Micra, while our PTC program carries ratings of up to AA+ so. Our funding franchise is also well diversified across private, public sector banks, foreign banks, NBFCs, DFIs and foreign portfolio investors and across multiple instruments, including term loans, PTCs, direct assignment, DCBs and NCDs. We have received sanctions of approximately INR 480 crores under credit guarantee scheme of MS52 from both private and public sector banks, with a further INR 520 crores currently in the pipeline, primarily from private sector bank. These sanctions under CGS scheme are at an attractive pricing, which is considerably lower than our current marginal cost of borrowing. We feel we can create a significant value through this with disbursement to identified segments where credit cost is expected to be around 100 bps lower than the median credit costs. These sanctions under CGF scheme will further strengthen our funding diversification and increase the share of public sector banks in our overall borrowing profile. Coming to our margins, NIM for quarter 1 FY '27 is at INR 236 crores, that is 11.93%, compared with 10.29% in quarter 1 FY '26, representing an improvement of approximately 160 bps year-on-year. On a sequential basis, NIM improved by approximately 49 bps points from quarter 4 FY '26. Our pre-provisioning operating profit stood at INR 102 crores in quarter 1 '27 compared with INR 87 crores in quarter 1 of FY '26. This demonstrates the underlying earnings strength of the franchise and reflects the tangible benefits of the operating efficiencies we have systematically built over the last year. On ECL provisions, we recorded provisions of INR 40 crores during the quarter under the ECL model. We also had a INR 74 crore reversal on account of write-offs. This translates into provision coverage ratio of 81.5% on Stage 3 assets and 64.5% on stage 2 assets, supported by a management overlay of INR 19.5 crores. This quarter, we have not released any amount from the management overlay. Last quarter, we have released INR 10 crores from the management [indiscernible] As a result of improving asset quality and better operating efficiencies, profit before tax for the quarter stood at INR 62.4 crores, up 67% sequentially. Return on assets on PBT improved approximately 3% annualized, while return on equity stood at approximately 10% annualized reflecting gradual normalization of business performance and improving earnings quality. Overall, with the strengthened leadership team, robust capital backing and new book that is performing well and 7 consecutive quarters of improving asset quality. We begin FY '27 with confidence and discipline. As we enter FY '27, our focus will remain on maintaining financial discipline, enhancing operational efficiency and further strengthening our funding franchise to support our long-term sustainable growth ambitions. We will continue to pursue growth in a calibrated manner, ensuring that our provisioning and capital buffers remain aligned with the evolving risk environment. With improving asset quality, robust capital adequacy, strong liquidity and diversified borrowing profile, we are confident of delivering a sustainable and responsible value creation over the long term. Thank you. With that, I would like to open the floor for the Q&A session.

[Operator Instructions] The first question is from the line of [indiscernible] from CLSA.

Congrats on the strong numbers. Before my questions, I just have a couple of clarifications because don't I didn't hear some things correctly. So firstly, sir, you mentioned you've reduced management overlay provision by INR 10 crores. That was last quarter, right? Or again, have we done it in 1Q?

So can you ask all your questions together, then we will answer. Yes. One is management yes.

So that was one, second I didn't catch your comments on branch openings. You said you will close some, but you'll also open some if that you could reiterate because we've actually been shutting branches in the last 2, 3 quarters, so that is there. Secondly, where does NIM really settle over the next 3, 4 quarters, given our cost of funds trajectory plus we took those yield hikes. And lastly, you mentioned that we've changed hard market collection until last quarter, 30% was done by external agencies now it's our own team. So is it the sales guy who is doing it? Or do you have a separate collections team for this purpose?

So I suggest we will take only your first 2 questions because you asked 4 questions. So first, the management overlay clarification of INR 10 crores that Krishan will clarify.

So management overlay this quarter, Q1, we have not released any amount. So in the INR 62 crore profit, there's no management overlay release. Now coming to the last quarter. Last quarter, we released INR 10 crores of management overlay in the P&L. So that's the actual position.

And on the branch opening and shutting, see, there are -- if you look at -- we have clarified in the past also that there is a certain amount of branches, which are present in markets where the headroom to grow is not there. And that is the -- so these are all branches which are performing below par and lesser headroom. So like I said, there are between about close to 100 branches, which we will shut down between now and Q3, and there are about 50 to 60 new branches that we will open. So net, we would be about 40 to 50 branches down.

And on the NIM question.

If you also look at it -- if you look at more from a, let's say, an AUM perspective, we have given an AUM target of INR 10,000 crores this year, and we are saying we will grow at about 20%, 25% CAGR. So for INR 12,000 crores of AUM between MFI and MSME, technically, we do not require more than 1,350, 1,400 branches. So there is no point having more than that right now because you understand that both MFI and MSME branch takes just about 1 month. MSME takes about 1 month to set up, MFI takes about 15 days to set up.

Understood. Understood. If you could which is..

For the other questions, if you can come back in the queue.

The next question is from the line of Rajiv Mehta from Yes Securities.

Congratulation on very good numbers. So my first question is on the AUM growth target of INR 10,000 crores. So now again, in the context of the approval rate, when you look at an MFI to approval, it have impact come down in this quarter, it could be seasonal also, and it could also be a function of maybe some sort of leverage that can be in back in the industry. So in that sense, see, a lot of heavy lifting of growth will have to be done by MFI this year because MSME will scale up smoothly and initial loans you will be launching later. So to do the heavy lifting of growth in the current year through MFI, with current level of accrual rates, how would that be possible? Will you do more sourcing? Or would you think that the approval rate will itself we move up from where they are.

Right. Any other question, Rajiv, or this is?

Yes. And you also spoke about offering more differentiated products, additional products to select identified MFI customer and you said that few of them have already launched and then some you'll be launching in the next 4 nights. So can you also slightly elaborate on it.

Yes. Absolutely. So I'll take your first question, which is, let's say, for INR 10,000 crores of AUM, the disbursement that we require technically about 44% to 45% happens or the disbursement happens in H1 and about 55% happens in H2. Let's say, if we divide it like this. Now if you recall, there is a guardrail that we had built when West Asia crisis and all the fuel concerns had were there. We had introduced a guardrail Fusion+2 saying that new to Fusion, we will not do 2 lenders other than Fusion. So because of that, essentially because of that guardrail, there was a drop of about 3% to 4% on the approval rate. And these were customers, this was specifically an area that we wanted to avoid because there was no clarity how the West Asia crisis would phase out. But I think we've been -- the collection efficiencies have been exceptional and we have looked at how the fusion plus 2, specifically the new customers that we had acquired over the last 6 to 9 months, have there been any deviation during the last 4 months while this crisis was going on. And it's been pristine and impeccable. And so what we have done is that in all our category A branches, that's about 80% of the branches. We have gone back to fusions 2 and only on lower category branches, we are continuing to keep this guardrail. So that is why you saw the approval rates drop a little. However, there is a preapproved base that we have looked at, which is the customers which we have lost. And in the last 15 days, we have been experimenting that what is the propensity of onboarding of these customers. So the first one week of August has been very encouraging. And our problem was less on the new customers. If you see in the last 2 quarters, the new 2 fusion has been progressively increasing as a percentage. So we were what, 3 quarters back about 25%. We were at 37%. Just to give you a number, if we aggregate June from quarter 1 June was close to 39% and where we are talking July was 42%. So new customers is progressively increasing. What we were experimenting with was that on the existing customer segment? Is there anything else that we need to do. I think in the last 15, 20 days, there are like partially what you asked that the new products or the differentiation that you're doing. So the differentiation is basis the categorization of branches. The ticket size we were offering to the customer and whether there is a credit person in that -- so we have told you that there are about 250 branches there. We have credit and these are all large branches. So between these 3 we are already in the first 7 days of August, seeing the run rates climb up on the existing customers. So we are pretty confident that in terms of what we are expecting in H1 that about 45% of the disbursement that is required to reach to 10,000. We don't need to rely on the individual loan. And you're absolutely right, individual loan will start giving us results only in Q3 onwards and that, we don't plan to do INR 100 crores in a month. So we are fairly on track on the AOP on both Q1 and the 40 days that have gone in Q2 so far.

Okay. And on the collection, I mean, in this recent 2 months of July and August, the collection efficiency that you have disclosed mean holding up for the current market, you need holding up for the bucket 1, 2, 3 as well in terms of lesser flows in those markets?

Absolutely, Rajiv. So -- and the confidence is coming from there. So all the confidence that I'm giving you on scale up on existing customers is coming because collection efficiency continues to hold very strong. So it continues to be upwards of 99.7%. And there is no state where there is any impact we see anywhere across any of our 5, 6 large states where we have a higher concentration.

[Operator Instructions] The next question is from the line of Hari Srinivas from Unifi Mutual Fund.

Congratulations on a good set of numbers. I just had 2 questions. I'm just referring to Slide #22, credit cost is about INR 40 crores. If you say credit cost on other financial assets, -- could you please an update on what what does mean other financial efforts mean that is -- and I just had a question on the bad debt record. So in FY '26, we had about INR 54 crores for the entire year. And in Q1, we have had a strong start of about INR 21 crores. So are we seeing this trajectory improving going forward? Or how is that panning out? So this was my first question. And I just put my other question on sir, on the industry at an industry level, every player is moving towards targeting very high-quality borrowers because all the other sites are moving into that less than 2 MFIs, 3 MFIs borrowing. So how are we able to reach out to new customers? Are you trying to reach out to a larger set of customers? Or how do we expect the growth to happen there from where the growth comes from?

Right. So I'll let Krishan take the question on credit cost, and then I'll explain collection expectation and what are we targeting as customer segment.

So on the credit cost, the other financial instruments, et cetera. So there are certain receivables, like the insurance receivable in case of debt cases. So we have strengthened the provision there. So that is a small line item apart from the credit cost, which is lying in the other credit cost.

Okay. So on the collections, there are -- so like I explained, we have moved from external agencies to completely in-house, and we are seeing sustained recovery there -- so there are 2 things, 2 models that we are building. One like is the warm body who are actually going and connecting. But the challenge that we were facing was that how do we reach out to, let's say, the entire write-off book. where we are recovering from. And having people on the ground for every customer at every branch is not a viable opportunity. So right now, there are 4 partners that we have engaged. These are all AI partners, and we all understand that because there are linguistic issues, it was not easy to work with these partners and set up these voice bots. But I think I can tell you that now we have 95% capability to manage this language scale. And we are using AI to reach out to the customer to understand that whether we can then through a warm body do the entire collection. We feel that there is an opportunity of about INR 600 crores. If we take a rough settlement of about even 30%, that's about INR 180 crores to be done. If you, let's say, take 15 to 18 months, we are talking about INR 10 crores every month. So right now, we are still averaging about INR 7 crores. So I think there will be more use of technology and data around this and with same set of people. We will be -- you will continue to see higher delivery and sustained growth on write-back from there. Two, on the industry that you are mentioning, see, there are 2 ways to look at it. One, if you see the -- while the -- even if the demand is static, the supply is shrinking. There are selective players in the market who are able to offer who have the capital who have scaled up their operations who have built up the right infrastructure. So it is not that everybody can go out and offer loans with clear credit guardrails that are present right now. So within the MFI segment also, there is a huge demand. If you look at our bifurcation, the challenge that we are -- we have been able to do a decent job on new customer addition, which means that the new disbursements that we are doing, continuously, the new customers are increasing. And I gave you the numbers for June, which is close to 40%. In July, so this is continuously increasing. And I think it is also because the capital is scarce and it is with selected players. I think that's also our role to play. On that front -- where do we see the other growth coming from, is that within the MFI sector, there are high-performing customers or customers with very low leverage. The challenge was that income assessment was a problem all these years. But I think the confidence that we have got through the PQM team, which we are servicing 250 branches right now. That is giving us very healthy signals so that we will continue to scale up. And we will -- you will see that eventually, we will have 2 businesses. One is MSME, which is shopkeepers and retailers in Tier 3 and Tier 4 markets. These are nonrural businesses, semi urban, Tier 3, Tier 4. The other is the MFI where while what we are talking about right now is MFI, JLG, MFI JLG, let's say, lower leverage customers then we will also subsequently move into -- we have launched the individual loan product. And not right now, but towards the end of the year or next earlier, we will also look at a secured offering for these customers. But like I'm saying, the credit will be differentiated. The moment that ticket size goes up beyond 90,000 the credit will come in very strong. So that will be a constant factor across all the growth other than -- and I think we -- the growth number that we are talking about or we are seeing a 20%, 25% CAGR growth. I don't think that's a challenge at all. While for this year, we have taken a little higher growth target because of the lower base. But there is confidence in our strategy and how we are going, that 20%, 25% CAGR growth, it is on the cards.

[Operator Instructions] The next question is from the line of [indiscernible] from PL Capital.

Congratulations team for a great execution across all the parameters. My first question is around liquidity. So we have around INR 1,900 crores of liquidity with capital adequacy upwards of 35%, 37%. When can we expect this excess liquidity drag to grow rates up. And this is also important, especially given that we have seen the cycle bottoming out across the board, we have seen collection efficiencies improving. And also now that we have a fair bit of idea in terms of monsoon and Western Asia conflict. When can we expect this drag to normalize? So that's one. The second one is on the MSME business. Just broadly, how do we -- since the MFI business has now settled down what's the strategy to increase or improve the size of the MSME business? And how do we see that over the next 3 to 4 years? -- in compared then to the MFI business? Or will we not sort of number in terms of the size of the businesses in, say, FY '29, FY '30.

So Krishan will take the first one on liquidity. Excess liquidity and...

So on the liquidity front, we have -- you're right, we have capped slightly higher liquidity during quarter 1. However, after these geopolitical things and positivity from the -- we have already addressed this. We have not borrowed broadly anything in the month of July, and we have brought it INR 1,880 to about INR 1,400 crores. And -- our plan is in July a total borrowing was...

Less than INR 50 crores.

Less than INR 50 crores.

So automatically comes down to around INR 1,400 crores.

And this is the level which we want to close the Q2 and this is in line with our internal policy to keep 2 months disbursement liquidity, which comes to about INR 1,400 crores, INR 1,450 crores. So this issue is already addressed, and that was in response to the West Asia crises.

On the MSME business that you asked, so we currently at about INR 800 crores of book -- and we are roughly doing about INR 50 crores a month. So ticket size is about INR 7.5 to 8 lakhs. The important thing is that last 6 months, the collection efficiency has being upwards of 9 to 99.3%, which gives us the confidence that the strategy that we have been using on credit, which is what we've been saying that we don't want to be taking cash flow calls we are better off giving a little higher LTV. I think that has paid off, and we are getting that confidence. So there are 2 ways: one, there we have -- within our existing 90 branches, there are about 25, 30 branches where you will see productivity significantly going up. There are some specific state differentiations that we have introduced. The second thing is that I explained in my call that there are 200 branches of MFI where we'll be leveraging the MFI real estate for acquiring MSME business. Now these branches are in MSME catchments. So we will not be going to rural markets. It will be semi-urban Tier 3, Tier 4 shopkeepers, retail outlets. The branches are in -- the real estate is in MSME catchment. And these will operate as Javan spoke to the main MSME branch. To start with 50 such branches are being taken up immediately. And we will keep adding. But 200 branches we have identified across North and Central, where we will be scaling on -- so the way you should look at it is 90 branches of ours, which are like completely dedicated MSME and another 200 branches for which we don't require any high level of OpEx, which is our existing real estate, just we will operate as a bespoke 1 dedicated person in each of those 200 branches. So you will see this scaling up and our view is that we want to eventually take it to 15% next year and then 20% in the next 2 years. So MSME, we are doing multiple things, but clear, but the clarity is whatever we do, the clarity is that no deviation on cash flows. And we are creating a right to win in each of these markets. So MSME, you will see initially 15% and then 20%.

The next question is from the [indiscernible].

Sir, can you just confirm what is the current value of deferred tax assets on our book and whether any recognition will happen only in -- and the second question would be, what's your view on credit guarantee schemes like CFMU and whether they -- how do you think about that they form a part of your business plan going ahead?

You will take that, [indiscernible] So on the DTA front, we -- our unrecognized DTA amount is around INR 290 crores. And now the plan is as and when the profit accrues, we will utilize that rather than utilizing in 1 shot like we did in the last quarter. So technically, this amount is sufficient for the next 2 years tax outflow. So we expect PBT to be equal to PAT for next 24, 26 months. So on the -- yes, so on the credit guarantee scheme, I'm assuming you're referring to the credit guarantee scheme for the borrower and not the credit guarantee scheme that has been introduced for the banks. Right. So on the credit guarantee scheme for borrowers, we had not registered so far. We plan to register, we have initiated all the documentation. So there are some formalities that we need to complete. But there are 2 or 3 markets we have identified where we don't know whether over the cycle is variable, but we also want to pilot and experiment. So there are 2 or 3 markets where we will be initiating this by end of this quarter, most probably.

Sir, can you quantify how much percentage of your book, you might pilot? Like is it going to be 5% less than that?

Yes, it will be less than 5% because this is -- this will be more on the fresh disbursement.

The next question is from the line of Vishal an individual investor.

Sir, I have only 1 question. The monsoon is coming and everyone is talking about [indiscernible] I think our customers are pleased tier. So based on the your guidance of INR 10,000 crores realistic?