Muthoot Capital Services Limited (511766) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Muthoot Capital Services Limited Q3 FY '22 Post Results Conference Call, hosted by Antique Stock Broking. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Vidhi Shah from Antique Stock Broking. Thank you, and over to you, ma'am.

Thank you, Lisa. Good afternoon, everyone. We have with us the management team of Muthoot Capital, which is represented by Mr. Madhu Alexiouse, who's the Chief Operating Officer; and Mr. Vinod Panicker, who is the Chief Financial Officer. Without further ado, I should now hand over to Mr. Vinod Panicker, who will give us the opening remarks and the financial performance efforts. Over to you, sir.

Thanks a lot, ma'am. Good morning -- good afternoon, everybody. Nice being on a call with all of you once again. Yesterday, we had our Board meeting and this -- that the figures for the quarter ended December 2021 was approved by the Board, and that is what we are today going to present and discuss about that. The year -- over the last 9 months -- during the last 9 months, we have seen certain ups and downs to begin with in the first quarter. Things improved in the second quarter. And we believe that the things have improved or become much better in the third quarter. And based on that, the disbursement of about INR 333 crores in the current quarter versus about INR 304 crores that we did in the same quarter last year -- I'm talking about the retail loans. Last year, there was about INR 20 crores to INR 22 crores of some other loans, which is temporary short-term loans in the same quarter, but the regular retail loan was about INR 304 crores. Same quarter -- in the immediately preceding quarter, we did about INR 310 crores. So this time, it's about INR 332 crores, and we are expecting the fourth quarter to be significantly better than the third quarter in spite of having lost some bit of time in some of the locations due to [indiscernible]. The basis of INR 332 crores, we ended up with an AUM of about INR 2,011 crores, up from about INR 1,080 crores that we had at about the end of the September quarter, but down by 9% versus the same quarter last year when we were at about INR 2,200 crores, which has been reflected in the average AUM, and therefore, a reflection is giving the interest income also. In the interest income, in the current quarter, we had an income of about INR 93 crores versus INR 99 crores that we had in the immediately preceding quarter, and about INR 120 crores in the same quarter last year. The INR 93 crores being lower than the last 2 numbers that I mentioned, has got reasons, a couple of reasons. One is definitely the reduction of the same quarter last year when I did say that there was a drop of over 10% in the AUM itself, and above -- similar amount in the average AUM as well. But more significantly, the -- there was a reversal of about INR 8.7 crores in the current quarter, which was essentially on account of the company treating the movement of accounts into 90%, then coming back into less than 90%. But the belief that the company has is that this comes -- while it is still below 90% -- and in the normal circumstances accounting policy permits us to take income of that, as per RBI direction, we are not permitted to recognize any income on NPA. And therefore, whatever increase happened basis the 11th -- or 4th November circular, we have reversed an income of about INR 8.7 crores. So if that reversal was not there, then we would have reported an income slightly better than the immediately preceding quarter, and -- but still lower than the same quarter last year. On the finance expenses, we spent about INR 36 crores versus about INR 45 crores in the same quarter last year. The drop was about 20%, which is mainly on account of -- or 2 accounts, I would say; through reserving a INR 232 crores reduction in the utilization of funds in the current quarter versus the same quarter last year, which gave us a benefit of roughly about INR 5.5 crores, and about INR 2.5 crores on account of reduction in the interest cost. From our 9.4%, we have been able to bring it down to about -- roughly about 8.72%, 8.73% which has benefited or given us a cost benefit of about INR 2.5 crores. Again, the same -- immediately preceding contracts, we are -- we have been able to speak to the banks and been able to utilize funds of INR 96 crores lower than the immediately preceding quarter, which has given us a benefit of about INR 2.5 crores, and about another INR 50 lakhs of reduction is on account of interest rate reduction that we got. Banks have been very, very supportive. In fact, they stood by us during the last couple of years which have been very torrid for us, and we are grateful to the banks and the other lenders who actually stood by us during such times. Basic is the interest -- net interest income. Net interest income went to about INR 57 crores versus INR 60 crores in the immediately preceding quarter and INR 76 crores in the same quarter last year. The operating expenses was higher in the current quarter versus the immediately preceding quarter by about INR 3.5 crores, which was mainly on account of increased collection cost because of the specific emphasis on collection for the teams being set up, higher incentives given to the dealer -- to the agencies for collection, all this leading to some bit of increase in the collection cost. Most of the other costs have remained more or less same versus the same quarter last year. Also, there was a minor increase of about 5%. On the loan loss provisioning bid, the increase has -- there has been a significant decrease because of the reduced moment to S3. Now, this I will explain to you people very clearly. I would be attention from all of you on this. Movement to S3, this is the old norms -- and this is with the provisioning under the ECL method, that went down significantly. Last time I remember telling all of you that we have made additional provision of about INR 10 crores, because obviously Q3 is -- after coming back in Q2 after the second wave, we were wanting to ensure that now things are going okay in Q3. There are no significant issues. And therefore, in the last quarter, we accepted an additional provision of INR 10 crores, which then we have ensured that we have just not kept too much of additional provisions; we have kept the additional provision -- overall, the additional provision under books. This is besides what is demanded by ECL. We propose under books. On the classification, in terms of NPA, as per the IRAC norm and as per the IndAS, we have -- for the purpose of reporting, we have reported a figure of about 27.8% in terms of IRAC norms for RBI purposes. But if one goes by the older norms, we are still similar to what we were in the last quarter, but there is a minor increase on 19.8%, over 20 point -- 19.8% to 20.4%. That has been the increase. So while we have reported a higher NPA, in the bucketing which is -- has account on this thing, and permitted us to reduce the provisioning in the current quarter to about INR 7.6 crores. We are happy to be showing a positive bottom line after negatives for the last couple of quarters, and we have reported a PBT of INR 6.1 crores versus about INR 18.5 crores that we did in the same time last year, but did a negative INR 10.6 crores in the immediately preceding quarter. On a 9-month basis, we have been able to disburse about INR 789 crores versus about INR 460 crores that we did 9 months last year, and at a book of about INR 2,011 crores versus about INR 2,199 crores at the end of December last year. Income generated was about INR 390 crores and -- versus about INR 395 crores, a reduction of 27% being largely on account of 2 aspects; one is definitely the reduction in AUM by about 10% -- AUM by 10%, average AUM by about 16%, and the balance being on account of NPA which leads to us not recognizing the income on those assets. And I said that earlier also, in my previous presentations also, that, on NPA, we don't recognize income. In fact, in this current quarter, I had mentioned that we don't -- that we did not recognize income even in the accounts which are at less than INR 90 crores bucket. On the collection -- no, on the finance expenses, we were at about INR 115 crores in the current quarter, in the current 9 months, versus about INR 140 crores in the 9 months last year, a drop of 20%, largely on account of INR 262 crores of reduced utilization, which possibly gave us a reduction of about INR 19 crores. And further, because of interest reduction, it gave us a reduction of about INR 9.8 crores to INR 10 crores. We have our reporting at bottom line. I mean, the operating expenses have been more or less in line with what we had in the 9 months last year. Savings that we have been growing was provisioned, which is slightly higher by about 6%, but then broadly at the same level as last year 9 months. This has meant that we report the bottom line of about negative INR 18 crores and -- versus the INR 43 crore positive at the -- that we had for the 9 months last year. I will possibly pause over here. I will request Madhu to talk a bit about the operations, and then we will jointly address any queries that you will have. Madhu? Thank you.

Yes, thank you, Vinod, and good afternoon, once again to all of you, and thank you for joining this call. I'll try to be as brief as possible so that we can have more Q&A time. Like Vinod mentioned, after the second wave, we saw 2-wheeler industry improving month-on-month till September and October. Actually, that is the time when the festive season happens. But in the month of November and December, we saw some kind of challenge both from demand side and the supply side, and the average sale for these 2 months was about INR 10 lakh level. But after the second wave, as we reached October and September, there was a very clear-cut indication that there is demand in the market, and the numbers there, the sales numbers, were actually looking pretty good. In Q3 '21, the -- against a total sale of about INR 48 lakhs, Q3 '22, the industry sales was about INR 36 lakhs. So that is the level of drop that has happened. As I mentioned, there is both demand and supply side pressure. Key thing is that we believe this average INR 10 lakh sale is actually bottoming out. And we firmly believe that from here, I mean, this bottom level of average INR 10 lakh, it should definitely see an uptick as we go through the Q4 and the next year. Third wave definitely has its own impact, but it was at manageable level. It was not a very severe one. And besides few lockdowns here and there -- and things are back to normal now. And hence, we have a very great hope about Q4. The point that I'm trying to mention here is that the auto-related -- auto industry-related problems that we've been hearing starting from 4-wheelers and then the 2-wheeler pressure, I think the time has come when actually it would bottom out, cars are definitely looking slightly better, but 2-wheeler also would bounce back. I had been mentioning earlier that India is the largest 2-wheeler market, and the 2-wheeler is a primary mode of transport for the common man. And this market is still un-penetrated in India. We have about 100 2-wheelers for every 1,000 people, whereas internationally it is much more when you compare to Thailand and Indonesia. And we feel that the potential of this is at least twice. At least 200 per 1,000 is what the potential in India is, double the market that we are talking today. And I feel that, with the emphasis on infra through Gati Shakti, which got announced a couple of days back during the union budget, I think that is one very strong initiative that would push the transportation industry to the next level. And from our perspective, I think the MSP that the government has declared, that would really enhance the cash flow of the customer, which is the need of the hour. So Tier 3, Tier 4 centers, rural areas, I feel that the cash flow level, the income level should definitely improve there, and the 2-wheeler industry should start looking up. The point that I'm trying to make -- and I mentioned earlier, is there a bottoming out? We have a feel that it is bottoming out, and there are various signals and initiatives that would really make this up. From [indiscernible] perspective, if you look at the overall disbursement that we have done in Q3 about INR 332 crores, this is the highest we have done after the COVID pandemic started. And we have seen disbursements improving quarter-on-quarter. Team had been able to reactivate all the business touch points, business and collection touch points, both. And it has improved substantially after the second lockdown. So we are moving towards business as usual, active touch points from where we do business and collections both. And as a result, our market share also improved compared to last year Q3, which was about 0.93 percentage, and this Q3, it is about 1.19 percentage. And I've been telling always to the investor community, in this community, that our target is 1.5% to 1.65%. So we are moving towards that. Long way to go, but definitely we can see a positive uptick there. Besides, now we would start pursuing our expansion plans which we had kept in abeyance. We had informed we will keep it in abeyance for some time, and we'll start pursuing that as we enter into the Q4 and the next financial year. From collection perspective also, we are seeing improvement across all buckets. It is there in the presentation as well, how the collection efficiencies are improving, and bucket zero efficiency in 2-wheeler industry is about 93% to 94%. We are at -- consistently at 96%. That is a very good sign. At the same time, a lot of action has happened in the ground in terms of customer connect programs wherever -- after the second wave and then when we were allowed to travel, meet and touch base with customers, very well-planned customer connect program has been rolled out. These are all measurable action plan which is monitored on a number basis, on a resolution basis. So that has got rolled out. I think from the perspective that all the handicap that we had after the COVID-related pandemic, I think those are waning out. We have only -- we hope to see only positive things happening as we go forward. Of course, Q4 is generally a good quarter for us. And so we believe that whatever plus we have done in Q3 would continue in Q4 as well. We can discuss more during the Q&A session. This is all from my side right now, but any specific questions, we'll take it up during the Q&A. Over to you, Vidhi.

[Operator Instructions] The first question is from the line of Akhil from RoboCapital.

Sir, in the previous con call, you had mentioned the target for disbursements would be around INR 1,900 crores, and right now, currently, obviously, it will be tough to reach that target. So for FY '23 I just want to know would you have a similar target then in disbursements?

Madhu, you're in the call?

Yes. I can give an indicative answer on this, Akhil. Our Q1 was a total washout due to the -- but I can give you indicative number in the sense that during the -- last year, we did around about 7 -- about 1 lakh units we had done, 1 lakh numbers that we had planned, okay, what we had done. And this year, we expect to grow by about 50% from last year. So that is the…

50%? 50?

Yes. Yes. So we are looking at 1.5 lakh units this year, given the industry as of now and if industry really bounces back, then we can look at a slightly higher number as well. Vinod, if you would like to add?

No. See, in terms of absolute numbers, last time I think we did -- last year we ended at about INR 750 crores. And if you have the [indiscernible] goal, that should be INR 700-odd crores to about INR 800-odd crores right now. We should hopefully end the year at about INR 1,200 crores to INR 1,300 crores, which is possibly slightly more than 50% higher than what we did last year. And even in '19-'20, where the last month was actually washed out, we did about INR 1,800 crores. I think that should be the mover that we will possibly want to go for in the next -- in FY '23.

Right. And could you give us any guidance on credit cost, what would be like in FY '23?

In the current quarter, our cost was about 3.99%. We expect the number -- for the current quarter, we expect the numbers to come down as we go forward. In the past we were in the range of about 2.5%. So I will expect it to be in the 2.5% to 3% range on a consistent basis. Next year I am expecting this to be a normal year with no kind of -- none of these lockdowns or anything anywhere. So then I would safely say that we should go back to the previous normal loss of about 2.5% to 3%, might be closer to 2.5%.

Okay. Great. And my last question is just regarding what is the current ticket size?

Current ticket -- average ticket size was about 79%.

79%?

LTV of 79%. The ticket size is INR 76,000.

Sorry, in rupees, how much is it?

INR 76,000 in rupees. In percentage it comes 79%. LTV is 79% in the current quarter.

In the current quarter. Okay. Fine. Great.

[Operator Instructions] The next question is from the line of Sarvesh Gupta from Maximal Capital.

In terms of your gross NPA, we were expecting that -- I'm comparing like-to-like, but still this quarter could have been a quarter where gross NPA numbers could have actually come down. So any reasons why the gross NPA number continues to sort of inch up on a like-to-like basis?

I mean like-to-like basis [indiscernible]. On a like-to-like basis, I did say that it's at 19.8% versus about 20.4%. It's because of the increase that we saw in the month of November, November is a month where we did -- we had -- where we had issues on the ground because of rains in several parts of the country, mainly in the Southern India. And then the NPA has actually shot up in the month of November. But we've actually recovered and brought it down to the -- I mean closer to the October levels after that in the month of December. But then the month of November was definitely a month which actually created issues for us.

Sir, what's the expectation like for the closing of this year and for next year?

Actually I will first talk about the current year. Maybe -- in the current year, we are -- because little bit we are -- on a old norm basis, we are reporting about INR 387-odd crores of NPA. We expect the number to go down to about, let us say anything in the range of about INR 325-odd crore to INR 330 crores by the end of the year. In the last time when we had a call and we had a figure of INR 260 crore, we had seriously expected the number to come to about INR 310 crores, but I believe that we will be in the -- while the teams have taken a much stringent target, I would say that INR 325 crores is something which we would want to commit on saying that this is what we will try and achieve by the end of this year. Next year, we expect things to go back to -- the 3 things to go back to normal, then maybe even when the book growth up significantly the overall, the acute NPA should start coming down. And then we should start maybe talking about the gross NPA basis, the old norm of about 10%, 12% versus the NPA that we are now talking about.

Okay. And in -- I mean, in normal times, you would have probably been at 5%, 6%, right?

We were in the range of about 4%, 4.5% at the gross NPA level, and net NPA was much lower than that. But why I am taking this -- telling the figure of 10% something for the next year also is mainly because of -- we -- while we are expecting things to be normal, we expect some bit of turbulence and some bit of, I would say, corrections, which would be needed on the ground, which could possibly get into the first quarter and the second quarter. So I would say if you basically say that -- I mean, we should -- and even at the AUM level, I think that the next year disbursement, I think that we should want to be at the FY '20 level which is INR 1,800 crores. And before the business -- see that's where the book decreased faster because of the lower tender loans. That would effectively mean that the percentage will remain reasonably elevated. But it should be significantly better -- our NPA should be significantly lower than what we are seeing in the current year or at end of this current quarter. We'll see some bit of benefit or reduction in the next quarter itself, in the fourth quarter itself.

Sir, just a couple of quarters back I guess you were still at 10% to 12%. So I think from there, 1.5 years down the line, if you have the same number, it does look like your NPA would be sticky as per...

I fully subscribe to what you are seeing. June '21, the NPA was at about 17% -- was at about 13%, and -- versus March it was about 12%. So there has been some bit of increase which has been largely due to the AUM not growing, and definitely some bit of absolute numbers also getting headed. But we should in fact in the fourth quarter, be able to go -- we are at about INR 325 crores. We should be in the 15%-16% range by the end of the current year itself at that level.

But March '21 to March '23, you expect to remain at the same percentage of gross income?

Sorry?

From March '21 to March '23, you expect to remain at the same level of gross NPA in terms of percentage?

Yes. It's a lot to do with the kind of growth of NPA that we have seen in -- we saw in the first quarter, second quarter, and some bit of it in the third quarter actually. So bringing it down would be a herculean task, and that's the reason we are -- we will be in the 10% to 12% by March '23.

And typically in your business, after how many months you are reasonably sure that this loan is lost? So why not write it off at least from your books, if that be the case?

Something which we can always consider, but I would say that while we write it off, it may reduce under books because we are -- we can look at it as option, maybe -- something which we don't do. We normally find the answer and we keep it on the books so that it is on the radar of everybody, so that there's a collection effort which goes in great.

No, but sir, the question was let's say after 3 or 6 months if the customer is not paying then in general what is your LGDs in those cases?

The current ECL norms that we have in place is basis the kind of structure that we have seen over the last 3 to 4 years. But how the customer moves from one bucket to another varies at the beginning of the year and where he has gone to at the end of the year. So basis that we have factored in -- in fact, even in -- actually they are factoring in a percentage for 5 years about 48% currently, because we believe that, that is the kind of customers that we deal with. So maybe the percentage -- that is -- maybe that's the reason our provisionings are also higher, significantly higher than what even the IRAC norms determine. Basis the IRAC, we would have possibly been reporting about INR 150 crores of provisioning, whereas we are reporting close to INR 160 crore INR 165 crores of provisioning. That's because we believe that the customers that we deal with are customers who need -- who might, let us say, default, and therefore, provisioning should be adequate. So while we don't remove from the books, we are ensuring that we view treatment -- proper treatment in the books to ensure that there are no inflated bottlenecks in this.

So I'll add a bit here -- Madhu here. See, the -- once the COVID had hit and there were lockdowns, even one and second, I think these customers are not intentional defaulter customers. Out of circumstances, they have -- they could not pay and they landed in 90-plus DPD. These are customers -- and there are many customers in 90-plus who will keep on paying 1 installment or 2 installments or 1.5 installment, and they'll keep on having some kind of relationship with the company. They would make part payment. Though it may not come out of NPA, but still there would be a relationship with the customer in the sense that he'll -- he is not able to get 4 installments or 5 installments together. And in the second lockdown, that was more prominent. Like, second lockdown, the impact on NPA -- around March, we thought we'll come out of it. But after that, suddenly again, there was a jump in the NPA. So how our approach had been collect as much as possible from customer rather than going very aggressive and do repossession and things like that. These are the customers who are not regular defaulters. Like pre-COVID there used to be set of customers who'll default. I mean that was intentional. The vehicle may not be available and things like that. But here is a set of customers who have very good set of their business model. They'll be small shop-owners and things like that. Out of circumstances, their cash flow is impacted. So we have to balance both, in the sense that while there is a segment of customers where you need to go aggressive and do the collection, there is a set of customer -- and you need to have a relationship where they continuously pay your installments and come out of the problem. So we have to balance both. I mean, it is not that we'll straight away write them off, but we'll wait. And this was different circumstances. Everyone experienced this for the first time. And so we have also learned over the time that these are the customers whom we need to keep on collecting the money. And secondly, we feel that, if we go all out, repossess and sell it, there could be repo losses as well. Better to collect the money and bring down the POS levels and ensure that, that account is active and we keep on getting the money, rather than customer totally vanishing or not paying at all, and then we have to get into a very serious kind of recourse like repossession or legal and things like that.

Maybe just to add to what Madhu said, Sarvesh, in the Slide 26 which we have uploaded, if you look at it, we have mentioned that INR 9.2 crores has been collected in Q3, but the account has not moved out of [ FDA ]. Now that is actually reflecting 21,400 customers. So maybe just to add to what Madhu is saying, see, it is not that the customer doesn't want to pay. Possibly, doesn't have the wherewithal to pay you full amount, but he's still paying you. So 21,000 customers out of the -- that you are [indiscernible], then actually someone paid money in the current year -- in the current quarter, sorry. So I would -- and that will continue. So maybe if we renew our market as a write-off and then write it off in the books, we will not be able to have complete focus because -- that's one thing. Second is, the team has taken the -- themselves taken aggressive target and they -- we have actually come up with attractive waiver schemes or some other targets and other things so that the collection happens on the ground. We have seen a robust collection in the month of December. We have seen very good collection in the month of January. We are expecting the same trend to be at least that or even better, or much better in the month of February and March, though not being totally opened up in the beginning of -- because there were some cases where guys were down with COVID and things like that, and they were possibly held up [indiscernible]. It's not the case now. Things are opening up. And we are confident that the numbers will go down. And that is why I was saying that the NPA in absolute terms will go down.

[Operator Instructions] The next question is from the line of [ Vinay Jadwani ], an investor.

I'm audible?

Yes, you are. I didn't get your first name.

Vinay Jadwani.

Vinay?

Yes. Vinay.

Okay.

Yes. My query is regarding the dividend policy. A few years back, the company changed the dividend policy for the sake that it would retain the dividend for reinvestment for future growth. But other companies, other finance companies, even the parent company, Muthoot Finance, they also are growing, and even growing more than the Muthoot Capital actually, and they are still paying dividends also. So when are -- when is the company considering -- this year is the washout year for sure. But in future, is there any time when -- timeline when we can see the change in dividend policy? Since the growth pattern is not -- it's not growing actually now. And for that sake only, the company changed the dividend policy. So would like to know more about the dividend policy in future course.

Vinay, 2 things. One is that we are -- Muthoot Finance is not a current company. We are a separate group as well.

Sir, your voice is sounding very muffled.

Mine?

Yes, sir.

Okay. I'm extremely sorry. Am I clear now?

Much better. Thank you.

I'm sorry. Vinay, first and foremost is, Muthoot Finance is not our current company. It's not a part of the group also. Muthoot Finance is the red Muthoot. We are Muthoot Capital Group. We are the blue Muthoot. First. And definitely, they are making -- they are giving huge dividends. We had actually changed this policy sometime in -- after 2016, where we thought that it is -- let us retain the fund stock both. And that is the time when we -- after 2016 my memory is, we had given any dividend. We hope to start with [indiscernible] in new year, working for better times to come, maybe to see growth in the AUM and in the profitability. Definitely, we didn't want to change our practice. And obviously we want to satisfy every investor. In our case, I would say 62.5% is held by the promoter. So obviously we would -- they would be also keen to take it back. But then in the interest of the company, it was decided that, no, we'll not look at any distribution right now. So I'm sure when things improve, we'll definitely start looking maybe -- this year was like I admit, easy washout, but definitely better times -- there still will be a better time and better time will come, and maybe we will be in a position to change our policy and we will.

The next question is from the line of Vidhi Shah from Antique Stock Broking.

Sir, actually, you mentioned that you were -- like your GNPA by year-end to be around INR 325 crores, so which means that you will see a recovery or at least reduction of NPAs at least to the tune of INR 200 crores. So how do we see these recoveries -- such a sharp recovery coming in Q4? Like I understand it's a strong quarter, but still, how do we see such a sharp recovery coming in?

Ma'am, I mentioned that the reduction to INR 325 crores is basis the old norm. I am repeating that when I'm talking about NPA right now, the target that we have given on the ground is for the current year at least. We'll need to change it because the RBI circular of 4th of November is a reason -- then converting the guy on the ground who is not able to pay even one installment, to convert him and making -- for instance, these are not something which can happen in 3 months or 4 months. That's the reason when I mentioned INR 325 crores, I had very clearly said that it is basis the old norm. So what should affect is -- we will go from about INR 387 crores to about INR 325 crores, which also is a drop of about INR 60 crores, INR 62 crores. So for this trajectory we went from -- there has been a specific, I would say, benefits given to the staff, benefits be given -- benefits given to the agencies. And there's an all-round effort on the ground to ensure that the collections happen.

Okay. Got it. And sir, as per the old norms, the GNPA number that you mentioned, around INR 380 crores, sir, do we see any customers who have still not paid a single EMI in that case? Or in all the customers who are in the stage 3 assets, all customers are at least paying one EMI, or is there any customer -- percentage of customers where they have not paid a single EMI as yet and they're still under GNPA?

There will be -- ma'am, this norm started -- is regular I would say feature of the industry. And there will be some amount of customers -- now, if you look at our own account, we could have -- maybe out of the total NPA, we could have couple of accounts where people have not paid a single EMI. So that's where we can look only at the last 2-3 -- 2-year figures for disbursements. I will definitely have my last count of something of 93 or 100. So there are few still who have not paid a single EMI. But then that is pretty common, that they'll take the money and then when the first installment comes 45 days later, possibly something else has happened because of which this issue has come.

So just to add to what -- just to add to Vinod, Vidhi, so among all the NBFCs and banks who do lending, and especially retail lending, they track the non-starters and first EMI, second EMI, third EMI, FEMI, SEMI, TEMI. And after the pandemic -- had told during the calls also, we have kind of slightly tightened our credit norms as well. So norms that are FSG, we call it, FSG norms, those were the things that did not change. And current portfolio behaves in a similar way what it was pre-pandemic. Okay? So just to assure that because of pandemic and there are problems in the market, and first lockdown came in, second came in, and now there is a third wave, it is -- so we have taken care in terms of our credit delivery, in terms of portfolio management, to ensure that portfolio behaves like pre-pandemic. So existing portfolio would have gone into slightly problem in terms of repayments and things like that. But whatever new business we have done, we have ensured it behaves like pre-pandemic. So just to tell you that, from non-startup perspective, from the portfolio management perspective, from the early delinquency, team has kind of contained that control there. That is within the [ progressible ] limit of the organization.

Okay. Got it. And lastly, sir, our borrowings have been reducing. So do we see any fundraising in the next couple of quarters? And if yes, then will that lead to increasing of cost of funds?

No, no. The lenders have been very supportive. In fact, in times when business has not grown, they have permitted us to have the sanctions in place, but permitted us not to draw. I told them that, no, even if you don't draw right now, it is fine. So the basis that the utilization is addressed, but definitely, with the disbursements expected to go up in the current quarter also, and we are speaking to some of the lenders, we are speaking to some of the other investors who would want to come out of PTC and other transactions. I mean we are definitely going to look at raising at least about INR 300 crores in the current quarter, some of it for the current quarter, a lot of it -- some of it for the next quarter.

Okay. But this shall not see any increase in cost of funds, despite we are raising funds in the current quarter, the next quarter, that will not be any increase in cost of funds and provisions, right?

We intend to utilize a lot of it in that way of disbursements in the current quarter. So we -- even if the cost is seen separately, we will see an uptick in the revenue, which will compensate, or more than compensate for the cost.

Okay. Fine. Got. And sir, what is especially -- how do we see the non-2-wheeler portfolio doing? Like, how is our strategy working out there? And is there any update on -- further updates on the non-2-wheeler segment that we have been growing?

So the non-2-wheeler book is about INR 34 crores as of now, and it has -- the NPAs and collections has remained within the permissible limits. During last few calls, we had said that we had expansion and things like that we have kept in abeyance. We wanted to wait and see how the things pan out. And I have mentioned during my initial call that now we are looking at expanding whatever we had put in abeyance. And used cars is something which would definitely budget it as we go forward. So from the perspective that how the portfolio is behaving, it is within the permissible limits that we have done. Do we have the -- are we looking at growing this? Yes. We are looking at growing this. And we'll come back to the investor community, to the analyst community, once we are ready with our next year's budget, and we'll give a clear-cut action plan on the centers that we are going to operate, and which are the markets that we'll operate. Give us some more time, maybe a quarter's time, and we'll be able to update on that.

[Operator Instructions] As there are no further questions, I now hand the conference over to Ms. Vidhi Shah for the closing comments.

Thank you, everyone, for participating in the call. Madhu sir, will you like to conclude the call?

Sure. So thanks once again to all of you for taking your time to connect with us. I think I have mentioned during my initial discussion as well that 2-wheeler industry definitely is going through the challenging times. And I mentioned about both demand side and supply side, issues are there. But at the same time, what gives us confidence about this market is that how it actually bounced back after the second wave, and we saw at the end of Q2 and starting of Q3 numbers touching about 15 lakhs. And then we have seen a dip in November and December. We feel that this is the bottoming out of this industry, and there are very positive signals from the ground, in the sense that how the customer's cash flow is improving and how the business is improving. And with the movement of people, I think -- and as the schools and colleges open up, economy opens up more, we have all the reasons to believe that Q4 onwards things should look much better what was still September and October. We have actually been able to grow compared to last year. Last year was a very low base, although. But I think that we have all our aggregates in place, all our actions in place to really make it back to what we were at the pre-pandemic level. Vinod mentioned about we want to reach somewhere what we were in 2020. And definitely -- that's definitely a striking reach for us. We'll definitely reach there. And also to assure that in terms of all the initiatives that we've been telling that we have put in abeyance, it is something that we'll definitely open up. And as we go forward, you will see uptick in all those initiatives as well. May I ask Vinod also to add his concluding remarks. Vinod, please?

Mr. Vinod Panicker? Mr. Vinod, we are unable to hear you.

Hello?

Yes, sir. Please.

Yes, yes. Please go ahead, Vinod.

Yes. Sorry. Thanks, Madhu. Thanks, everybody else for being on the call with us. We are definitely happy in the current quarter that we have been able to report a positive bottom line. In spite of us having made additional provision basis [indiscernible] close to INR 9 crores, but we are expecting the fourth quarter to be significantly better than the third quarter. And maybe going forward, seems to be better or grow to the [Technical difficulty] '19-'20 levels, maybe from the next financial year onwards. We are thankful for all the support that we have got from all of you. We request for a continued support. And anybody else has any queries or anything that they have seen in the presentations or something with the presentation doesn't talk about, you please feel free to call us up and speak to any one of us. We are always ready to answer any queries that you have. Thanks once again.

Ladies and gentlemen, on behalf of Antique Stock Broking, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.