Nippon Life India Asset Management Limited (NAMINDIA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Nippon Life India Asset Management Limited Q3 FY '23 Earnings Conference Call hosted by Motilal Oswal Financial Services. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Prayesh Jain from Motilal Oswal Financial Services. Thank you, and over to you, sir.

Yes. Thank you, Aman. Good evening, everyone. On behalf of Motilal Oswal Financial Services, I welcome you all to Nippon Life India Asset Management Limited 3Q FY '23 Earnings Conference Call. We have along with us Mr. Sundeep Sikka, ED and CEO, along with the top management team of Nippon Life India Asset Management. I would like to hand over to Mr. Sikka for his opening remarks. Over to you, sir.

Thanks, Prayesh. Good evening, and welcome to our Q3 FY '23 Earnings Conference Call. We have with us our CFO, Prateek Jain; Chief Business Officer, Saugata Chatterjee and Aashwin Dugal; Chief Digital Officer, Arpanarghya Saha; and Fujikake-san, Nominee of Nippon Life Japan. Our detailed investor presentation and press release has been uploaded on the exchanges as well as our website. Before we take your questions, let me share some comments on the recent industry trends and our quarterly performance. In Q3, Indian equity markets remain [ range ] bound with a positive [ bias ] driven by strong corporate earnings, superior growth, economic growth versus peer and [ peaking ] off inflation expectations. However, ongoing global uncertainties, FI outflow and a weak INR USD outlook also impacted the growth momentum and led to some volatility. Despite the mixed overall outlook, the asset management industry maintained its growth momentum, driven by higher retail awareness and improved access of mutual fund products across the length and breadth of the [indiscernible]. The industry assets rose by 5%, mainly driven by higher equity and ETF assets. The base for unique investors grew by 20% to [ 237 million ]. Monthly SIPs touched an all-time high of INR 136 billion, an increase of 20%, while SIP folios rose by 25% to INR 61 million. The consistent expansion of investor base and growth in AUM, driven by SIP and ETF flows indicate the investors' diverse needs and the industry superior capability to fulfill them, vis-a-vis, other financial products. Growing financial awareness and differentiated and transparent product [ suite ] and innovative digital strategies are expected to be the key driver for the growth of the industry in future as well. At Nippon India Mutual Fund, our priority is to be future-ready and capture the long-term opportunity. In Q3, Nippon India Mutual Fund maintained its industry ranking of fourth position. In this quarter, AUM increased by 3% to INR 2,928 billion. At Nippon India Mutual Fund, our core focus remains in on investors' interest. We added 2 million folios in the last 9 months and continue to have the largest base in the mutual fund industry. Our share of industry unique investors was largely stable at 36% with a base of more than 13 million investors. Our annualized systematic transaction book is at INR 123 billion, quarterly flows increased by 45% to INR 29 billion. On a gross basis, 561,000 systematic folios were added in Q3. Our systematic AUM rose by 15% to INR 583 billion. 56% of our SIP AUM has continued for over 5 years, vis-a-vis, 23% for the industry. Also, in volatile markets, folios with lower ticket size have demonstrated longer vintage and better stickiness. 14% of our SIP folios have continued for more than 5 years against industry is 11%. Today, Nippon India Mutual Fund offers industry's best suite of products in passive category. With strong growth in industry's passive assets, our ETF ecosystem is already in place and far ahead of its peers in terms of investor base and mind share. In this segment, we manage an AUM INR 683 billion and have a market share of 14%. Excluding ETF allocations, it goes to 2 specific mutual funds, we would be the largest ETF player in the country. The Gold ETF is the biggest fund in this category with AUM of INR 67 billion in assets. Our share in industries ETF folios rose to 61%. In Q3, we added 137,000 investors and accounted to 99% of the total ETF folio addition in the industry. We have 69% share of ETF volumes on BSE and NSE. Our ETF average daily volumes across key funds remain far higher than the rest of the industry. Our digital-centric strategies are also the keystone for sustainable growth and profitability, along with several digital initiatives such as cart buying, which we took to enhance our partners and invest experience in Q3. We also rolled out Nippon India Mutual Fund WhatsApp Channel, a real-time comprehensive transaction and service suite for our investors. The Business Easy 2.0 app is aimed at driving more meaningful engagement, attention and growth through advisory, detailed analytics and smart insights. In Q3, the digital platform contributed to 59% of our total new purchase transactions. Over 902,000 purchases were executed through digital assets, an increase of 19%. Nippon India Mutual Fund has a well-diversified and a nimble distribution base with a wide presence through 270 locations across the country. As of December 2022, we had over 89,000 distributors empaneled with us. The MFD base rose to over 88,800 with an addition of nearly [ 1,900 ] distributors in this quarter. Now on our financial performance. For the quarter ended December 31, 2022, profit after tax was INR 2.1 billion, an increase of 18%. Operating profit was at INR 2 billion. Operating profit as a ratio of average assets under management was 28 basis points in Q3 FY '23 as compared to 26 basis points in Q2 FY '23. In the past, the company has followed a consistent dividend policy. In FY '22, NAM India distributed its highest ever dividend with a payout ratio of 96%. Over the last 8 financial years, NAM India has distributed a cumulative dividend of INR 36 billion. As we grow organically through our physical and online channels, we remain open to evaluate investments and strategic opportunities that add to the profitability or complement our existing business and ultimately are in the interest of minority shareholders. As signatory to UN-PRI, we have already begun to integrate ESG aspects into various areas of planning, operation, fund management, risk and [ bonus ]. Our goal is to encourage higher adoption of ESG principles within the asset management industry. As a responsible investor manager, we are building a resilient portfolio that will not only provide sustainable returns to our investors, but will also have a positive environmental and social impact. We will also seek at and relevant disclosures in ESG matters from our various investee companies. To sum up, I would like to reiterate at NAM India investor centricity remains the key theme. We strive to deliver a superior experience and sustainable returns to our investors and in the process, add value to our shareholders. We are confident to continue our trend of profitable growth in coming quarters. With these comments, we are happy to take your questions. Thank you.

[Operator Instructions] The first question is from the line of Kunal Thanvi from Banyan Tree Advisors.

I had 3 questions. The first one was on the yields. We saw improvement in the yields both on a Q-o-Q basis and like kind of flattish on a Y-o-Y basis. Can you help us understand the key reasons for the same? And how sustainable the improvement would be given the natural decline in the yield because of the increase in size? That is #1. Second is on the debt side of the business. Again, the industry continued to see outflows during the quarter and our outflows were even higher than that, and we saw market share. Can you run us through what's happening in the industry and how we as a company [ find us ] dealing with this? Because what we remember in last quarter, we have said that we have taken some increase in sizing, like kind of increased the TER, so where we are there in that journey? And finally, third, on there was this article regarding -- news article regarding SEBI's study on the TER for mutual fund industry. So where in -- the regulator is thinking of moving from a scheme-based TER to AMC-based overall AUM based TER. Any thoughts on same would be helpful.

Thanks, Kunal. I think I'll start with your third question and then give it to my colleagues, Prateek and Aashwin, for the [ income of yields ] and [ debt ] outflow. I think with regard to the recent news article regarding [ addition of TER ] I think discussions are still underway. We await the final draft of the regulation. And in this regard, I think we'll avoid making any comment on speculation at this stage. And I think earlier with respect to the yields, I think, Prateek, if you could just take that.

Yes. Thanks, Kunal. So Kunal, we have been maintaining about the yield outlook, if the asset mix remains the same. And also, in terms of the debt returns as and when it increases, we'll be having the probability to increase the TER as well. And also on the ETF side, we'll keep looking at opportunities if we can further improvise on yields. So all the 3 things, the composition has remained more or less the same or rather it has improved on the equity side. We have been able to marginally increase our yields on the debt and the ETF side, which has helped us to maintain the run rate, vis-a-vis, the last quarter or the, vis-a-vis the, corresponding quarter. .

Kunal, regarding the outflows, first, I take what's happening in the industry. So owing to -- we're changing the macroeconomic scenario across the world and central banks tightening yields. We have seen yields move up quite substantially, okay, all over the world, including India. Hence, we've seen outflows from debt funds across the industry, one, to avoid any MTM losses that may rise out of returns. Second, there is some competition also from bank deposits because bank deposit rates have moved up since. So there is some especially short-term money, which is 1 year, 6 months, 12 months, 18 months, 1 year has moved there. And thirdly, because of the rising interest rates, a lot of corporate treasuries have preferred to repay their loan credits to the bank, et cetera. So a combination of these 3 factors has led to industry outflows. However, we have seen slightly higher outflow for Nippon because over the last 2 years, we also had a fairly robust buildup in fixed income assets and some of that money has now moved out. And we are fairly confident as things settle down, yields stabilize over the next 1 or 2 quarters, we should see some of those flows come back into the system.

Sure, sure. If I can ask 2 follow-ups. One was on the increase in the yield for, say, debt and the ETFs. How does one think about the market share impact of the same, like over a medium- to long-term, like when we talk with other plays, we haven't seen any other players taking price -- increasing the TERs and we have done that. How does that reflect into market share? And how we think about it over a longer term? And the second is for the equity side for the new money that we received from the distributors, have you seen any improvement in the net realization, which was very bad, say, in 2021, higher that -- have you seen any improvement there?

So Kunal, that in terms of the yields since there were no NFOs that way, which can have a significant impact on the overall equity yields. The money has come in the existing schemes. And there, we have been maintaining that -- we'll continue to make profitable growth. So we have maintained our payout ratios there. As regards the debt yields are concerned, See, what we continuously monitor is, what is the return generated from our scheme, vis-a-vis, the competition? And what is the net ease in the hands of the investors. And appropriately, we take decision. And the recent redemption if you're talking about, this has got nothing to do with our increase in the TER. And also, wherever we have increased the TER, it is barely 1 or 2 basis points. So I don't see that can be attributed to any kind of change in market share.

[Operator Instructions] The next question is from the line of Sahej Mittal from HDFC Securities. You're not clearly audible.

Is it better?

Yes.

Sir, 2 questions from my side. So firstly, on yield, right? So if I calculate definitely the -- if I look at the segment-wise yields. So for equity even if you have taken a -- even if you have increased your TER for maybe ETFs or debts, even then for the equity segment has seen some improvement and material improvement. This is not a small improvement, so about 1.5 basis point improvement on a sequential basis. So what is driving that? Is this an aberration or some lower commission payout, some adjustment to commission payouts done in this quarter, what is actually driving this? And is this kind of -- are these kind of yields sustainable? That is one. Second is on -- so you talked about using Business 2.0 for data analytics. So I mean, how are you using this? And if you can give us some insights, how is this helping us in better customer retention or improving customer journey? And the third is around our operating expenses. So the expenses have shot up quite materially in this quarter. So what has -- what is driving that?

Yes. So see, in terms of the yields, again, we have been maintaining that, look, one is the composition of our AUM. Secondly, the size of the scheme. Third, the competitive environment. And fourth, how do you receive your new flows. So if you receive your new flows from partners, IFAs and from B30 cities, those are more profitable and more sticky and those are more granular AUMs where we make slightly more margin. And it is the combination of these effects, predominantly that most of our money has come from B30 cities from our partners. And that's where our realization is up on the equity side. With regards to the expenses, there has been some one-off expense on the IT spend, what we have done. So that's not a regular feature. Almost the increment what we are seeing 30% to 40% of that is related to that -- the one-off spend, what we have done. Further, what we have also done is consolidated our office in the last quarter. So we have shifted and have closed down one of our office on the Nariman Point, and we have consolidated our -- even the sales office which used to be Nariman Point in the same place where our corporate office is. So that also has led to some increased expenditure, but these are nonrecurring. So predominantly, those are the expenses. But besides that, now that we are completely opened, and we are seeing good traction in terms of our equity performance, there has been increased travel and activities in terms of our distribution mix, et cetera. So this is all about the -- says about the difference in the expenses.

Yes, this is Aparn. So quickly giving you an insight on the Business Easy -- as we know, data is the new fuel for the -- any kind of work or operations. Business Easy by itself is a very smart and intelligent asset that we have developed in-house, which allows our partners to give the best of choices to their consumers and which also revolves around real-time market movements. So those are particular aspects when they come in and the ease of doing business completely paperless, allows them to connect to a larger denominator of consumers who would want to do things at the click of a button. It's a completely app to web interface or a web-to-web or an app-to-app interface which works together at the same point of time, ensuring that the best of advisory, best of insights, analytics are passed on to the consumer through basic execution and delivery. Thank you.

So one follow-up maybe. So ex of the mix change, which has happened, right, towards equity. So even ex of those changes, yields seem to have improved in equity. So I couldn't quite get that if you can.

No. So as I mentioned the contribution from the...

The share of Banca has increased, right, if you're saying that IFAs are more profitable ones.

So I think we have not changed -- yes. So Saugata Chatterjee's side. See the flows which are coming to us, in equity, like Prateek mentioned, it's cutting across the B30 market. Like you mentioned, the [indiscernible] share is also reason for us. We are seeing an increase in flows across the distribution category either [ MFD ] or banks or the national distributor. The good part is most of these banks also have very deep penetration in B30 market. We are strong there, and we are getting a lot of retail flows coming in from those branches, which are spread across the B30 market of India. Hence, the distribution of equity flows is quite fragmented. Historically, it has been fragmented. Along with that, we also have this big sort of delta, which has come in through SIP. As you know, SIP is a very strong category which we have built up. We have also shared in our initial talk about how the SIP book has grown from roughly around INR 650 crores to more than INR 1,000 crores per month. So those -- all those things aggregate into equity sales. And of course, the margin expansion is happening because of that.

The next question is from the line of Lalit Deo from Equirus Securities.

Just wanted to understand on this SIP flow movement. So sir, if I look at for this quarter, so like we have received about like INR 29 billion in funds in this quarter. Now if we see the movement of AUM, so the -- if we include the fund flow, then the AUM seems to be on a flattish now. So just wanted to understand, have you seen enough redemptions in the SIP close? Or is there like a mark-to-market losses, which we have seen in this SIP AUM?

I'll take this. So Saugata said again. See, you're right, the market share. The [ SIP ] market share now has flattened for us. Rather, it has started inching up. If you take to March, April market share, the March market share and current market share, it has moved from 6.12% to 6.18%. It's a small jump which has happened. But the result in this because of the SIPs increasing every month. Net sales, like we have been mentioning in previous quarterly calls also till the time the net sales for us will not cross the [ 6, 6 ] quarter percentage, our market share jump will be limited. Happy to share the net sales growth every month has started moving up. And currently, as we speak, last quarter, month-on-month, the net sales has now started moving towards the 6% mark. So it's the combination of both SIP inflows plus lump-sum inflows coming in, which is contributing to net sales -- we still have some margin of growth to take place, which would help us to grow the market share. Yes, that's the point from our side.

Sure, sir. And sir, like on the ETF side, can you tell us about like what is the -- what kind of yield do we make currently on the ETF side -- and like, sir mentioned that we have some -- we are looking to increase the TERs in that segment. So how do we see that yield spanning over in the next 2, 3 years? Like how much can we increase in that segment?

So see, we have been maintaining that we make about 9 to 10 basis points net on the ETF side. And we'll continue to explore the products where we can or whether we have a unique position available and where our market acceptability is better than the competition, we'll keep increasing our margins because as our overall ethos remains that we need to do a profitable growth. However, ETF is a vanilla product, and there is not much we can do beyond a point. And therefore, it will be broadly in line with the industry. But wherever we have opportunity, we will try to improve the net realization.

And just to add to it, I think take into account the liquidity we have on the stock exchanges. I think we're in a far better position to increase the yield wherever it is required compared to the competition.

Just as a clarification, just when we talked -- when I spoke about the ETF, this was including our CPSE as well as the -- but this excludes the goal. Just in case if you are putting into the model, comparing to -- because the gold we charge much higher as well as the -- and CPSE again, because it's a government mandate. There, the yields are governed by what is allowed by the ministry.

[Operator Instructions] The next question is from the line of Mohit from BOB Capital.

My first question is basically the unique customers declined during the quarter from 13.4% to 13.2%. Just wanted to know what has happened over there.

See, those can be -- because obviously, as we see some outflows which has happened on the fixed income side as what Aashwin was mentioning and also on the equity side, some redemption would have happened on the lump sum. But I will give you some data point, which would be interesting because if you see on the SIP gross folio share, what we used to be at 5.4% industry, we are now 8.5%. If you look at year-on-year growth, so 8.4% to 8.5%. Similarly, on the net basis also, where if you remember that it is a performance issue, we were seeing higher redemption now. On a net basis, we are almost 12% incremental folio share. So this decline could be marginal.

Also SIP which were discontinued across the industry. But overall, the I think on the overall -- the good thing is overall folios continues to grow.

All right. Understood. My second question is just towards the equity market share. So I mean while we understand that we have maintained 7.3% market share overall. But if I look at equity, I mean, overall, if I look at like 10 to 12 quarters, we have lost market share. So any clarity on that in terms of the equity of an industry is growing faster than us. So any clarity on that?

So I think you're right. I think it's -- we were seeing some redemptions coming in. I think about the last 12 months, I think with the performance coming back, I think we have seen the redemption has almost slowed down and new incremental flow is increasing. And as we mentioned earlier, we started this financial year -- sorry, this calendar year, Jan, with a SIP book of INR 650 crores which made it annualize at about INR 8,000 crores. And now on a monthly basis, this month, we closed at [ INR 1,020 crores ], which is maybe would be about INR 13,000 crores. So I think equity will go up with a lag effect. But I think we are far we feel more further comfortable and confident as we talk now.

[Operator Instructions] The next question is from the line of Akshat Hariya from Multi-Act PMS.

My question again is on yields. So basically, if we see our yield sequentially also have improved by about 3 to 4 basis points. And while you've already explained as the increase that we've seen on the debt and ETF side, what I really wanted to confirm is whether there is any one-off revenue from specially managed accounts or advisory accounts which we've booked in this quarter? And if you could get that number? And also, what would be the comparable number for the previous quarter and the same quarter last year?

No, no. I think somewhere you picked it wrong, our gross realization has been 43 basis points in the [ Q3 '23 ] blended, and it was 42 basis points last quarter. So I think it has more or less remains the same. While on a 9-month basis, we are currently trending at 42 basis points versus 44 basis points. So there has been marginally decline of 2 basis points on a 9-month basis. And it is 1 basis point higher than the sequential quarter.

So any one-off revenue which we have booked for the [ specially ] managed accounts?

No, no, there is nothing. There is no one-off man. As I mentioned in the last call also that as and when the opportunity arises, we'll be improving our expense ratios on the fixed income as well as the ETF and that is what this quarter, there has been the increased realization on fixed income and ETF has helped us to improve our realization -- overall realization.

And sir, my second question was on the yield differential on the stock versus flow. Earlier, when we started this discussion, it used to be around 20 basis points. And in one of the previous calls, we also mentioned that almost 2/3 of our AUM has now shifted to the newer yield, the lower yield. So what would be this differential now? And what percentage of our AUM, which used to be 2/3 is now on newer yields. If you could give some color on that?

No. So if you see this year, the gross flow has not been as significant, but whatever the newer gross flows, which have come in, those are all those basically -- those who have come in the [indiscernible] rate in the equity side. So I think marginally, if you say that earlier, it was 2/3, it would be like almost 70% would have been on the -- 70% of those assets now would be on the newer rates.

The next question is from the line of Prayesh Jain.

Firstly, just a broader question for the industry. So the profit growth for most of the players has been kind of flattish or declining, say, in the last 1 or 2 years. And that obviously has been because of the pressure on yields. How do you see the profitability for the industry, say, in the next 2 to 3 years, do we ever see the profit growth coming in for the industry or for players like us. How do you see this really panning out?

So I'll take this one. I think again from our perspective, the way we see asset management industries are ultimately a volume game. Definitely, I think it's not just about 1 basis point what is going to be the yield. It's going to be how well we execute and how well you can scale it up. So I think from our perspective, I think there will be definitely as there was the opening question, regulatory changes where I think will keep coming up, but we believe that, I think the key to long-term profitability is going to be execution and building scale. And I think our focus will be on that.

And if you look at the last couple of years as well, there has been a pretty strong volume growth wherein the SIP counts haven't reached new highs while debt has been kind of on the negative side for the last, say, 6 months to a year. But the volumes would still have been healthy on the equity side, but still we haven't seen any profit growth coming in for the industry. So even going ahead with volumes kind of being strong, do we see the profitability really so that in a way, I'm saying that the other [ metrics ] which contribute to profitability [indiscernible] basically the yield and of course, can kind of be at levels which can offset the -- which can still benefit -- support the profit growth.

I think it's going to be -- I think before I will give it to Prateek to be part of the question. I think when I talk about volume, it's not going only the volume also, the quality of business that you built up. I think the earlier question when Saugata talked about, the granular business, the small ticket size, all these things, the stickiness is going to be very, very critical. And we strongly believe, I think the long-term business models cannot be built only on higher fees, higher brokerages. I think ultimately, we have to keep adding value to the investor. And we continue maintaining yes, they can even if there may be a little pressure on the yields in short-term, which will come because of disruption because of some competition or some of the new players becoming very, very aggressive. But this is always short-lived. I think from a long-term point of view, execution, and I think the quality of business remains important.

Yes. And secondly, if we look at the debt business, there has been increased flows towards the index funds and the ETFs, the passive side. So how do you see this panning out over the next 3 years when we are expecting actually the long duration or the medium duration assets to gain traction. So in a way, I'm asking is whether the actives will grow faster or do you see the passives on the debt side kind of sticking maintaining the momentum what they have seen and we see the [ yields ] on the debt also kind of staying weak.

It's very difficult to make a prediction with [indiscernible] and debt, whether it's going to be active or passive. But we believe the kind of impact the volume growth that we have seen in the [ passive ] in equity, I think the same kind of trend will not be seen in fixed income. I think in fixed income, active will continue to play a bigger role because -- and I think from our perspective, while we are ready on both the sides, I think we have a strong portfolio on this passive side, on the debt side. But we believe, and I think as the time will tell that active will play a far bigger role than passive in fixed income.

The next question is from the line of Sahej Mittal from HDFC Securities.

Just one clarification. So if [ MF ] AUM mix remains the same on a Q-o-Q basis for the next quarter, maybe in 4Q, say, for hypothetical this mix stays the same. Then should we expect similar yields and same yields or even in the next quarter?

Yes. Of course. See, there is no one-off. See, you have to understand. In terms of -- see, broadly, I'll tell you -- what is -- and...

I'll just clarify because the kind of jumps which we have seen in yields in this quarter -- it seems like there is some maybe one-off this or maybe there is some improvement in terms of what we negotiate with our distributors, something of that sort. Yes.

No, no. So I'll tell you that, look, there is only 1 basis point increase in the yield compared to the last quarter. Also one has to understand that when you are saying that AUM remains the same, but let me share with you that certain of our schemes where our AUMs have grown, and this also goes to answer what Prayesh was asking that what is happening when the size of the scheme goes up, we, as a larger AMCs, we tend to lose a significant amount of our earnings because on the entire stock, our [ TER ] or our chargeability goes down. But we cannot go and renegotiate the total distribution cost on this thing. And therefore, like, for example, if you look at our small cap fund, which has doubled in the last 2 to 3 years, the total TER drop because of this reverse telescopic [ rates ], our TER chargeability has gone down by 15 basis points. So one is the size of the scheme. The asset mix -- and also the mix where it is coming from because, obviously, you share larger proportion compared to IFAs with the [indiscernible]. So that composition also matters. And also that NFOs -- earlier NFOs were the one who was bringing it down now. If it is -- if this AUM comes more granularly into our existing schemes, I think broadly, this realization should continue in the next quarter as well. And of course, one has to keep in mind the regulatory intervention has helped.

Right. So in 4Q, given that we are seeing a drop in AUM, right, because of the mark-to-market, then ideally we should see because the TERs should increase from here on in the next quarter. And hence, our yields should improve even further in the next quarter, right?

Look, I'd rather not comment on...

Mathematically, I'm just trying to understand.

Yes.

Got it. Got it. And just to get a sense on a SIP flow. So what percentage of our SIP flows have a vintage of less than 2 years? [indiscernible] there is 2 years.

We don't have that data readily available with us. We can discuss -- Abhishek will talk to you separately on that.

Sure. And on our OpEx, so could you quantify the one-off for this quarter? And on a sustainable basis, what kind of OpEx can we expect?

So see, the total difference is not that significant. And almost 60% of that is one-off. 40% of that is one-off in IT and the remaining is on the office shift to what we shifted from Nariman Point to Lower Parel. So broadly, the difference, which is there of that 60% amount is one-off, which has happened due to IT and IT spend and non-office movement.

Thank you. Ladies and gentlemen, that would be our last question for today. On behalf of Motilal Oswal Financial Services, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.