IndusInd Bank Limited (INDUSINDBK) Earnings Call Transcript & Summary

Ladies and gentlemen, good evening, and welcome to Indusind Bank Limited Q1 FY '27 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Rajiv Anand, Managing Director and CEO of Indusind. Thank you, and over to you, Mr. Anand.

Thank you. Good evening to everyone, and thank you for joining us. I'm also joined here by our 2 EDs designate, [indiscernible] Sankar has also our CFO, ViralDamanya. I will begin with a broader operating environment and then share how the bank is progressing on its strategic priorities. -- despite an uncertain global backdrop, India's economic momentum has remained resilient, supported by strong macro fundamentals and a stable financial system. For the banking sector, this continues to provide a constructive backdrop even as funding discipline, risk selection and execution quality remains important differentiators. Against this backdrop, Q1 marked a clear inflection point for the bank. Having substantially completed the balance sheet and earnings calibration undertaken over the past year, we have now entered the next phase of our journey, focused on accelerating sustainable risk-adjusted growth from a significantly stronger operating foundation. The progress made across deposits, asset quality, profitability and capital position gives us confidence that the bank is well positioned to deliver stronger growth, improving profitability and better returns in the coming quarters. We will now move to the key highlights of Q1 and then cover business-specific progress and financial performance. The balance sheet pivoting towards growth. Our end-of-period deposits and advances grew 3.7% and 3.3% Q-on-Q, respectively, reversing the moderation witnessed through much of the last financial year. Deposit franchise continues to strengthen with average retail deposits growing 4% Q-on-Q and share of retail deposits as per LCR, further improving to 49.5% from 47.9% Q-on-Q. On the Asset side, we resumed growth in the wholesale book under our revised risk return framework, while the SME and retail portfolios were broadly stable. Within retail, we saw steady disbursements across segments. However, Q1 seasonality kept the outstanding portfolios flat Q-on-Q. Improving asset quality trajectory. Importantly, growth momentum was achieved without compromising portfolio quality and provides an early indication of the underlying traction now emerging across the franchise. Annualized net slippage improved further to 1.5% versus 2.43% Y-o-Y and 1.7% Q-on-Q. With microfinance asset quality improving materially and moving steadily towards more normalized operating levels. We undertook write-offs of INR 1,435 crores during the quarter. As a result, both gross NPA and net NPA improved to 3.25% and 0.95%, respectively with stable PCR Q-on-Q. The improvement is now visible across portfolios and early stress indicators reinforce our confidence that the corrective actions and underwriting changes implemented over the last several quarters are translating into structurally strong credit outcomes. Building a AI-powered bank, we believe AI will be a key competitive differentiator for the bank. Our focus is on embedding AI deeply into customer engagement, credit decisioning, risk management and employee productivity, enabling superior customer outcomes, faster decision-making and improved operating efficiency at scale. We continue to scale AI adoption across the bank with over 12,000 employees already receiving training on AI. Our AI-powered knowledge management platform IndusCompass serves 15,000-plus monthly active users and delivers over 55,000 responses every month while our enterprise chat platform has 12,200 monthly active users generating around 875,000 interactions each month. AI and machine learning are increasingly embedded across our customer credit and risk management journeys. Multiple ML models enable personalized customer engagement while our suite of 50-plus ML models evaluate nearly half a million applications loan applications every month, helping underwriters make faster and more consistent credit decisions. AI is also a key enabler for our risk management framework. Our ML models, monitor transactions for around 40 million customers on an early basis, strengthening fraud detection, financial crime prevention and overall operational resilience. Financial outcome for pre-provisioning operating profit, PPOP, stood at INR 2,773 crores, growing 8% Y-o-Y and 21% Q-on-Q. Even adjusted for a one-off income tax interest recovery, the PPOP growth was robust at 8% Q-on-Q, supported by balance sheet growth and ongoing optimization of operating expenses. Provisions declined further to INR 1,384 crores with continued improvement in asset quality outcomes. As a result, profit after tax improved sharply to INR 1,037 crores from INR 594 crores in the previous quarter, reflecting the meaningful improvement achieved across growth, asset quality and improving operating performance. Excluding the one-off gains, ROA improved to 0.63% and we remain firmly focused progressing towards our immediate target of an ROA of 1%, supported by improving business momentum, lower credit costs and continued operating leverage. Our capital adequacy is healthy with a CET1 ratio of 16.1% and CRAR of 17.15% providing ample capacity to support future growth. Let me now take you through individual businesses. On vehicle finance, our book now stands at INR 99,718 crores, growing 3% Y-o-Y by remaining stable Q-on-Q. Overall vehicle disbursements for the quarter were INR 1,832 crores, and our disbursements, excluding 2-wheelers, also grew 3% Y-o-Y, in line with the loan book. As mentioned in earlier calls, we continue to calibrate our two-wheeler distribution and underwriting. This, along with the impact of GST change in Q2 last year contributed to overall disbursements falling 4% Y-o-Y. The annualized net slippage for the quarter was down at 2.01% versus 2.29% Y-o-Y, supported by tighter underwriting in 2 wheelers tractors and maintaining diligence in the other segments. -- the slippages were higher Q-on-Q due to seasonality. Our overdue book remains range bound, and we expect asset quality trends to improve in H2 as seen in earlier years. We continue to advance our digital transformation agenda through deeper sales force adoption across key product segments. We also rolled out process and compliance automation initiatives, expanded digital sourcing capabilities and progressed our straight-through processing agenda. Looking ahead, our focus will be on strengthening market leadership through digital and AI-led customer journeys, expanding our presence in underpenetrated geographies and deepening our customer engagement through cross-sell of liabilities and retail banking products. We continue to see opportunities to gain share across key vehicle segments while improving productivity and turnaround times. Rural banking. Let me now turn to our rural banking portfolio, where we have seen encouraging progress during the quarter, particularly in micro nodes. Asset quality trends in the micro loan portfolio further improved meaningfully with key indicators such as fresh slippage, collection efficiency and overdue levels moving closer to normalized levels. Gross slippage moderated to INR 191 crores versus INR 884 crores Y-o-Y and INR 504 crores Q-on-Q, while the 31 to 90 DPD book declined to 0.6% versus 2.2% Y-o-Y and 0.9% Q-on-Q. Disbursements were at INR 5,200 crores, broadly in line with the previous quarter despite a seasonally weaker Q1, the overall microloan book stood at INR 16,305 crores, declined 3% Q-on-Q. Around 74% of the portfolio is now covered under the CGFMU Credit Guarantee including Q1 disbursements, which are currently under process of being covered. Beyond micro finance, we continue to make good progress in diversifying our rural franchise. Our merchant finance portfolio grew 11% Y-o-Y to INR 8,095 crores, serving over 575,000 borrowers and while affordable housing portfolio grew 21% Y-o-Y to INR 2,889 crores. Kisan credit card and other route products stood at INR 4,128 crores, with microfinance tests now moderating meaningfully and portfolio quality improving steadily, we believe the business has reached an important turning point, creating the opportunity to gradually pivot from repair towards growth while maintaining underwriting discipline and diversification initiatives. Consumer banking assets. We continue to reshape our consumer banking franchise with a greater emphasis on secured loans while maintaining a disciplined approach towards unsecured products and portfolio quality. We have strengthened our leadership team with experienced talent that has successfully built large-scale retail asset franchises. We have also invested in enhancing our distribution, analytics and technology infrastructure across customer journeys to support sustainable scale. Overall, consumer banking assets at INR 31,617 crores grew 2% Q-on-Q -- the actions taken over the recent quarters are beginning to gain traction, reflecting in consumer asset disbursements growing 16% Q-on-Q. We expect the resulting momentum to increasingly translate into stronger portfolio growth over the coming quarters. Secured lending has been a primary growth driver during the quarter. Our home loan portfolio grew 38% Y-o-Y and 6% Q-on-Q to INR 6,089 crores, while the gold loan franchise continues to scale up with the book crossing INR 100 crores. in unsecured lending, we have maintained a selective approach prioritizing portfolio quality while investing in customer retention, analytics, sourcing and cross-sell opportunities. Personal loan book at INR 9,930 crores degrew 4% Q-on-Q and credit card loan book at INR 9,418 crores, degrew 3% Q-on-Q. Asset quality improved with annualized net slippage at 4.19% versus 5.76% Y-o-Y and 4.22% Q-on-Q. Over the medium term, our strategy remains focused on scaling secured lending business such as mortgages, gold loans and other asset-backed products while continuing to grow unsecured portfolios through analytics-driven customer acquisition, deeper customer engagement and cross-sell. We believe this approach will drive sustainable, granular risk-adjusted growth across the franchise. SME represents 1 of the most significant medium-term growth opportunities for the bank and will be a key contributor to our growth strategy going forward. During the quarter, our focus was on strengthening the franchise of franchise operating model and execution capabilities under the new leadership team to create a stronger foundation for future growth. We launched several initiatives to deepen our presence among SMEs and emerging businesses with a greater focus on transaction banking, trade finance, supply chain solutions and ecosystem-led client acquisition. The underlying business momentum in SME remains encouraging net of migrations to wholesale banking. Our LAP portfolio grew 8% Q-on-Q and business loans grew 4% Q-on-Q. The actions taken during the quarter positions us well to accelerate growth, deepen client relationships and improve cross-sell opportunities in the periods ahead. Our focus remains on becoming the preferred banking partner for entrepreneurs and emerging businesses through ecosystem-led acquisition, transaction banking, supply chain finance and sector-focused solutions. Moving to the Wholesale Bank. We successfully reaccelerated growth in our wholesale bank franchise during the quarter following the completion of portfolio optimization and operating model enhancements undertaken over the last 1 year. Our average wholesale bank loan book grew 7% Q-on-Q, marking an inflection point following the portfolio optimization and recalibration undertaken over the last year. Growth was broad-based with all 3 subcategories, mid-market, large corporate and institutional banking groups showing healthy Q-on-Q traction. The portfolio -- the proportion of A and above rated customers of wholesale banking portfolio was steady at 82%. With business momentum picking up, our corporate and SME fee grew 28% Q-on-Q. Our focus continues on building sustainable fee income streams with transaction banking fee contributing 55% of the overall wholesale and SME fee incomes. Asset quality in the wholesale portfolio continues to be robust with annualized gross and net slippage improving to 0.17% and 0.09%, respectively. Overall, our focus remains on building high-quality relationships across corporate, institutional and government segments while selectively participating in sectors aligned to India's structural growth opportunities. We believe a combination of disciplined lending, deeper transaction banking engagement and a higher fee penetration will drive sustainable growth and profitability for the franchise. Now coming to liabilities. Building a granular, stable and cost-efficient deposit franchise remains 1 of the bank's highest strategic priorities, and we made further meaningful progress during the quarter. Average retail assets, as defined by LCR now stand at INR 1,90,166 crores, growing 4% Q-on-Q. The share of retail deposits now stands at the highest ever level of 49.5% in versus 46.2% Y-o-Y and 47.9% Q-on-Q. The share of CDs and total deposits and borrowings in total liabilities were steady at 5.9% and 7.9%, respectively. Liquidity position improved during the quarter with average LCR at 127% versus 118% Q-on-Q. Cost of deposits improved by 12 basis points Q-on-Q to 5.5% in reflecting the benefits of the improving deposit mix and optimization initiatives undertaken over the past few quarters. The improvement was driven both by SAR and TDD pricing downwards. We have a strong NII deposit franchise with a market share of approximately 3.6%, much ahead of our natural market share in overall deposits. This positions us well to participate in the ongoing FCNRB mobilization efforts. Our affluent banking, along with NRI franchise now contributes INR 85,000 crores of deposits for the bank, which grew 3% Q-on-Q. Our efforts on streamlining and strengthening the product offering continues this quarter as well, especially on the senior citizens proposition, mobile app enhancements, et cetera. These, along with other customer engagement initiatives has resulted in robust new-to-bank acquisition run rate for the quarter. Overall, our strategy remains focused on deepening primary banking relationships across retail, affluent, NRI, SME and entrepreneur segments. We continue to leverage our distribution network and digital capabilities to drive granular deposit growth, improving funding quality and further strengthen the liability franchise. The continued increase in the retail deposit share reflects the strength of our franchise and provides a significantly stronger foundation to support future balance sheet growth. Let me now hand over to Viral to take you through the financial performance.

Thanks, Rajiv, and a very good evening to everyone. So let me start with the balance sheet and then I will share more highlights on the profit and loss. So our average advances grew 2% sequentially from Q4, and that's driven mainly by wholesale banking and secured retail segments. Average deposits inched up by 1%, supported by healthy retail deposit growth. Average CD ratio was at 83% versus 82% quarter-on-quarter and the share of average borrowings in total liabilities continue to be steady at around 8%. Moving on to the P&L. Reported net interest income for Q1 stood at INR 4,685 crores, and if you adjust for a one-off interest recovery on IT refund of INR 284 crores. Normalized Net interest margin was at 3.35% versus 3.39 quarter-on-quarter. The decrease of 4 basis was largely due to changes in portfolio mix towards wholesale banking and secure retail assets, and that's partly offset by the improvement in cost of deposits. Noninterest income at INR 1,087 crores, that grew 4% quarter-on-quarter supported by improved business momentum. Operating expenses declined 2% quarter-on-quarter to INR 3,698 crores. That reflects the benefits of our ongoing cost optimization initiatives and lower regulatory costs. So as a result, the normalized operating profit at INR 2,489 crores, that grew 8% quarter-on-quarter. And consequently, normalized pepto average loans improved to 3.13% versus 2.93% quarter-on-quarter. The provisions and contingencies for the quarter at INR 1,384 crores was down 21% year-on-year and 7% quarter-on-quarter, and that's driven by reduction in net slippages. We had write-offs amounting to INR 1,435 crores during the quarter, and that is very consistent with our policy. In terms of asset quality, GNPA and NNPA improved quarter-on-quarter at 3.25% and 0.95%, respectively, and the PCR has been maintained at around 71%. Overall net slippages have improved sequentially, driven by decline in micro loan slippages segment-wise details on NPA movement given on Slide 24 of our presentation. The SMA 1 and SMA 2 book was at 11 basis versus basis quarter-on-quarter. Net security receipts declined to 7 bps versus 8 bps quarter-on-quarter and restructured ones has declined to 5 bps versus 6 bps quarter-on-quarter. So the profit after tax for the quarter was at INR 1,037 crores versus INR 594 crores quarter-on-quarter. And that takes the normalized ROA to 0.63 versus 0.45 quarter-on-quarter. On capital adequacy, the bank continues to have a very healthy capital adequacy and liquidity position. Our CET1 was at 16.1%, and total CRER at 17.15 and the average LCR was at 127%. With that, let me now hand it over to Rajiv for his closing comments.

Thank you, Viral. Overall, Q1 marks an important milestone in our journey. We delivered a return to balance sheet growth, further strengthen our liability franchise, continue to improve asset quality and achieved a meaningful recovery in profitability. More importantly, the strategic actions undertaken over the past year have materially strengthened the quality of our balance sheet, earnings profile and operating platform. As a result, we are entering FY '27 position of greater resilience with stronger fundamentals and improving business momentum. Looking ahead, our priorities remain clear: accelerating profitable growth across retail, SME, rural and wholesale banking, deepening our deposit franchise, scaling transaction banking capabilities and leveraging our digital and AI investments to enhance customer experience, productivity and risk management. With strong capital, ample liquidity, improving asset quality and a strengthened operating platform, we are well positioned to deliver sustainable growth, steadily improved profitability and returns and create long-term value for all stakeholders. With this, we can now open for Q&A. Thank you to all of you, and over to you.

[Operator Instructions] First question is from the line of Kunal Shah from Citigroup. .

So firstly, on this entire corporate growth, for last 2, 3 quarters, we have been recalibrating the balance sheet -- and this quarter, the overall wholesale growth is almost 11-odd percent quarter-on-quarter with large corporates at 16%. So how different is this profile maybe compared to what we have already run down? And in terms of going forward, how should we look at the mix between the retail, SME and corporate? Is it like one-off quarter of the corporate growth or we will keep on maybe capitalizing on the opportunity which comes in and corporate might continue to grow at a faster pace?

So I think the growth that we are seeing on the corporate side is a function of the strength that we have built in that business over the last 6 to 9 months. Yes, there are ample opportunities that are available in the marketplace at this point across across mid-corporate, large corporate and corporate. But we will pick and choose those transactions that make sense for us from a risk and return perspective. What is also very important to us is reciprocity, meaning that we will do transactions where the probability of getting reciprocal transactions, meaning transaction banking, current account floats, payment of GST, salary accounts, et cetera. The probability of that is higher than the others. And so therefore, we think of this not as individual transactions as -- but rather as relationship building. And like many other banks, we use a RARA format to be able to assess the profitability on the wholesale side. Given where we are, I think there is ample opportunity for us to grow on the wholesale side. But having said that, I mean, I think the other engines of growth on the SME, the more traditional retail asset businesses, and our core strengths, which have been vehicle and microfinance are also showing strong trajectory to be able to grow. And so therefore, we will obviously want to optimize growth such that we meet our ROA aspirations.

Yes. And sorry, in terms of the profile difference between what was run down and what we are building?

See, the -- if you look at the disclosure that we have made, 82% of the portfolio is A minus and above. And so therefore, even within that framework, we have found ample opportunities for us to be able to grow profitably while containing or managing risk.

Okay. And the second question is on cost of fund side and cost of deposit side. So we have already seen it being down, cost of size also now 4.72, so how much is the further scope of improvement left on the cost side or we have almost bottomed out on the cost of deposits now? .

So Kunal, I think there is still a lot of work that we need to do on the deposit side, both on quantity and quality. I think what we're beginning to see, what we are seeing is really the beginning of that journey. I'm not saying that this will happen every quarter. But I think the work on improving both quality and quantity has begun. I mean we need to -- if you look at the cost of funds gap between us and our closest peer, it's about 150 basis 150 basis or so. Our aim is to continue to close that gap in the medium term.

Also, Kunal, just to add, some of that reduction that you're seeing is not about this repricing, where also a change in the mix. We are doing more R and SBC deposits. So that's helping us lower the cost. It's not only a pricing thing.

So still scope to further get it down?

Yes.

Next question is from the line of Rikin Shah from IIFL Capital.

I had 4 questions. The first one, just going back to the loan growth, all of this growth in the quarter is wholesale. The only thing that trying to get some comfort is accelerating retail and SME is always harder vis-a-vis the wholesale and the vehicle, MFI, SME all are not growing. So what are the portfolio actions that you are doing in these segments, which is pulling back on the growth -- and when do we see that turning or accelerating here on? So that's number one. Second...

Can we do this 1 by one? I mean I may not remember I think both micro finance and commercial vehicles, typically is seasonally weak. And even in that situation, -- if you look at disbursals on the microfinance side, have actually been flat on a Q-on-Q basis. And so therefore, you should see meaningful actualization on the microfinance business really from Q2 onwards. And similarly, you've seen that disbursals on the vehicle finance business, x of 2-wheelers continues to accelerate our medium-term ambition there, we've lost some market share over the last few years. Our ambition there is to get that back. Similarly, if you look at the more traditional retail asset businesses, those were actually de-growing over the last 12 to 18 months. If you see the disclosure disbursements, there are actually up 18% Q-on-Q, and that's really the -- really the beginning and the overall portfolio itself is quite small. And so therefore, in some of these other businesses, it's either been that that these are seasonally weak, and so therefore, have therefore showing up as you rightly described, or they are -- the building blocks are now getting in place the disbursals are beginning to accelerate. So I think you should see over the last -- over the next 3 quarters, many of these are beginning to kick in.

Got it. Okay. The second question is on other expenses. It's down sharply 8% Q-o-Q. So what are the components driving that? .

Sure. Let me answer that. So it's a combination of a couple of factors. First, statutory costs, those have come down. And by that, I mean, DICGC, PSLC, CSR, all of those costs. Second, we have been very focused, and we've talked about that earlier on driving operating efficiency. And therefore, across the line on operating expenses, we've seen that coming down across lines, in fact. So that journey will continue. Operating leverage is a big focus area, and that's really what we think will help us drive some of that ROE journey as well. So the key drivers in addition to that, also some of the disburses, right? Rajiv talked about, some of these businesses growing faster Q3, Q4, Q2 onwards. So some of that disbursal link costs will also start growing later. We didn't see that much in this quarter. So some of that is also explained by lower transaction-related costs. But overall, the journey really is to keep optimizing on fixed kind of operating expenses, redeploy that a bit more towards cost on people costs and investing in IT. So some of that cost will continue being invested in. But overall, the journey on operating efficiency will continue.

So that's actually the third one as well. If you could just provide a bit on how do we reach that 1% target ROA by 4Q from your core ROE of 63 within the current quarter.

So some of that answer lies also in what you've seen in Q1, right? The delta has really come from credit costs, low credit costs and lower expenses. And therefore, depot credit cards has been 60-40 really in that first quarter journey. And I think that will pretty much continue for the rest of the year as well. That's really how I'm seeing it right now. [indiscernible] of 60 and 40 from lower credit costs coming into that 1% journey. Now the building blocks within that [indiscernible], that may change by quarter, implying -- you've seen the NIM lower in this quarter. But as the other businesses start growing, we'll see some of that come back on NIM, but then some of the expenses start growing, as I said, on to net. So there will be some movement in terms of lines. But I think the easy way to think of it is 60-40, 60 people , but again, will firm up as we go through the quarters.

Got it. Okay. And then just the last question. The resolution of equity capital raise of INR 10,000 crores. How should we think about it? Is it just an enabling resolution or you will actually go after some confidence capital? .

So like I mentioned in my commentary, both CET1 and overall capital position continues to be strong. So therefore, this is just an enabling resolution. I mean, we will decide at some point in time whether we require capital or not. But at this moment, it's only an enabling resolution.

Next question is from the line of Piran June from CLSA India. .

Congratulations on the quest firstly, on the asset quality front, in the consumer banking vertical, would you call this a normal quarter? Or are we still reeling from some backlog of stress in personal loans and credit cards? .

Can I get a dip to answer that for you? Yes. So we've guided for the fact that we will slow down on our personal loans and credit cards, where we are correcting the portfolio quality and making a bunch of risk actions. We are now seeing the tail end of that risk that is flowing in. we will slowly starting our growth back, and we'll start getting the risk cost much more in control. So you can treat this as mainly what is emanating from the tail of personal loans and credit cards as a risk.

Okay. So in simple words, our slippages in this business can go down meaningfully in the consumer banking?

Yes.

Got it. Got it. And just secondly, on the deposit front and congrats on a good quarter here. How should we think about how the retail deposit share trends over time as you kick start deposit growth? -- because right now, like our deposit growth is like is like up 1% Q-o-Q, which is obviously not steady state. It would probably be 3%, 4% Q-o-Q. In that case, how confident are you that we can maintain this 50% LCR share? Or would we have to rely more on wholesale versus retail? .

So obviously, our ambition is to first start growing in line with market and then growing faster than market. There could be some lead/lag in terms of usage of as we are seeing asset growth across the system continues to be strong. So we may use some of the wholesale money, and I want to break up the wholesale money into 2 parts, which is franchise where we get some deposits in the normal course of business because we are bankers to SME, mid corporate, large corporates, et cetera. And then there is a larger bid out business. So therefore, the normal franchise money, I'm very happy to take today, tomorrow, next week, whatever. However, we will use the bid-out part of deposits tactically based on how asset growth is happening. But the core of the liability franchise has to be driven by higher and higher retail and SBC deposits.

Got it. And today, after this FCNR announcement, like say, as of today or yesterday, what would be the difference between wholesale and retail TD cost for you all? Incrementally, of course? .

Meaning, SP1 So you mean if I do bid out or whatever it is and exactly let's say, about 50 basis points.

That's it. In that case, why not just bid out more to get more business? I mean because your asset yield is still at a higher rate than what most of your peers do. Even if you have to pay 50 bps more, it still makes more sense to get that deposit and grow faster?

There are multiple issues. You also have to take into consideration the outflow rates retail is at 5%. The institutional part will be anything between 25% or 40%. I'm assuming that we won't take the 100% outflow money from financial institutions. So therefore, 1 has to then weigh out what is the incremental cost of deposits against the kind of yields that you're getting on the portfolio. You don't want to -- we are actually moving away from the more traditional Indusind Bank model of high cost of deposits and a riskier portfolio to a more balanced portfolio, which is more predictable from a profitability and ROE perspective. So therefore, if you want to reduce the volatility on ROA, then reducing the usage of bulk that becomes important.

Next question is from Abhishek Murarka from HSBC.

Team and congratulations for the quarter. So my first question is on the NIM outlook. Last quarter, you had made a comment that in your PPA journey as part of the ROE bridge. More of that journey will be contributed by fee and OpEx, but the way I see it, there's a lot of scope to improve margins, right, especially given your strategy to improve retail deposit percentage, LDR can go up, loan mix itself can change towards retail -- so what is the outlook there for the next 2, 3 quarters? .

So there's a -- I do think of this in 2 parts. There's a short-term journey, and there's a long-term plan, right? So if you think immediate few quarters, as some of the high-yielding businesses start growing and we get back share or mix within the loan portfolio, that NIM does come back. But when you think of it on that 1% journey, it's a very different story. We've already seen NIM drop a bit in the first quarter. We'll have some pressure in Q2, start going back Q3, Q4. So end to end in that 1% journey, that's a much smaller contributor. But we think returns going beyond that, absolutely. I mean, we really have to look at NIM as an opportunity, no doubt about that.

And in that context, from the loan mix you have today, let's say, I don't know, 2, 3 years out, do you have any target mix in mind? . Some 50% retail, SME, operate -- is there a?

So I think what we've been guiding that over the next about 3 or so over the next 3 years, you should see a drop in -- 2 things happened on the wholesale side, some drop on the overall mix. And even within that, a greater focus on SME and SME-mid-corporate, large corporate and less so on the strategic side. And the other businesses will certainly grow much faster than the than the wholesale side. I've also spoken Abhishek, about the fact that we are now looking at our micro finance business more like a rural business rather than just a plain microfinance business. And I think that business can -- we've been guiding that the straightforward microfinance business should be about 7%. We should -- we can do 3% to 4% of of our Bharat superstores and another 3%, 4% of all other products like Micro Lab and such like in the rural space, including affordable housing. And so therefore, that business the rural business, given the quality of the franchise that already exists for us will be -- will then become a meaningful portion. And we are already beginning to see a more -- the more traditional retail asset business beginning to kick in. I think given the size that we are, I think we can see fairly strong growth in that as we go forward. And finally, the vehicle finance business, I think, is a more steady business, steady and more mature business. And broadly speaking, I think some of these segments will grow faster than market. Some of the segments will grow broadly in line with market.