Poonawalla Fincorp Limited (POONAWALLA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Poonawalla Fincorp Limited Q2 FY ' 26-'27 Earnings Conference Call. We have with us today Mr. Arvind Kapil, Managing Director and Chief Executive Officer; Mr. Sunil Samdani, Executive Director; Mr. Shriram Iyer, Chief Credit and Analytics Officer; Mr. Harsh Kumar, Head, Artificial Intelligence and CHRO; and other senior management officials. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Shabnum Zaman, Company Secretary of Poonawalla Fincorp Limited. Thank you, and over to Ms. Zaman.

Thank you. In line with good corporate governance practices, please note this presentation may contain forward-looking statements regarding the company's future business prospects, strategies, estimates and profitability. But it is important to note that these statements are based on certain expectations, assumptions, anticipated developments and are subject to various risks and uncertainties. The actual results may differ significantly from what is stated in the forward-looking statements. is and related to these statements include fluctuations in earnings, our ability to manage growth, competition, economic conditions in India and abroad, changes in law, rules and regulations relating to any aspect of the company's business operations, general economic market and business conditions, attracting and retaining skilled professionals as well as government policies and actions. Now I would like to hand over to Mr. Arvind Kapil, Managing Director and Chief Executive Officer of the company.

Thank you, Shabnum. A very good evening, everyone, and welcome to our quarter 2 financial year '27 earnings call. Thank you for joining us. As we step into the festive season, let me begin by wishing all of you and your families a very happy and prosperous times ahead. I'd like to open with a statement of where our stands. This quarter, in my view, marks an inflection point in establishing a self-sustaining earnings engine through the structural improvements across 4 key dimensions. We've delivered disciplined AUM expansion while enriching NIM and fees income optimization. Currently, continuous credit quality refinement, coupled with collection infrastructure has driven credit costs lower, translating into a structural lift in our return on assets, ROAs. Accelerated by our maturing AI and digital led, these foundational gains, in my view, reinforce the compounding power and long-term sustainability of our franchise. Now I think on to our quarter specific numbers. AUM at the end of quarter 2 financial year '27 stands at INR 4,008 crores. The new products we've launched have contributed 28% of the disbursement this quarter versus 26% the previous and 24% the previous to that. They continue to scale steadily and add to the predictability of our future earnings. As I've said in my previous calls, our growth isn't just about chasing volumes. It's about raising the margin per unit. We therefore track 6 key performance vectors very closely, and they continue to move in line with our plans and expectations. The first, our portfolio yield has increased by approximately 45 basis points over quarter 1. So it's now at 14.08%, demonstrating effective disbursement yield on to the portfolio yield. Our disbursement yield by itself as well has further expanded by approximately 20 basis points over quarter 1 financial year '23, driven by our product mix. Just a quick reminder that this follows on top of approximately 50 basis point expansion in disbursement yields we had reported last quarter. Now moving on to the next point. Quarter to financial year '27, if I take times fees, that's expanded by 16 basis points to 9.6% and of 9.10% in quarter 1 financial 2. We have now sustained net income of over 9% over 3 quarters, reflecting our structural choices or product mix. customer segments and channels. Growth will be in my assessment would be a credit cost this quarter, which has declined by 25 basis points from 2.4% to 2.9%. Our GNPA for quarter 2 stands at 1.2% versus 1.37 million, the previous growth. While these are outcome metrics, we track the quality of our incremental cohorts very closely as we indicated. The 6 MOB 30-plus of the most recent cohort is approximately now 0.35%, approximately 32 basis points lower than the 0.67% that we had last quarter, which is by itself 41 basis points lower than the previous quarter. This keeps a firm downward bias on a credit cost. I wish to emphasize the assumption 6 OB3 numbers are computed excluding gold loss demonstrating the due nature of our credit calibration and collection reforms. OpEx to AM for the quarter stands at 4.15%. It reflects reinvestments that we have front-loaded collection capacity, AI investments and our on-load branch rollouts. This quarter movement sits within the 10 to 25 basis point range we had guided for. As a result, we've achieved 375 crores and profit after tax, recording a 22% growth quarter-on-quarter. Our ROA has moved up to 2.18%, reflecting a 20 basis point improvement over the previous quarter and approximately improvement over quarter 2 financial 6. Beyond these numbers I want to spend the next few minutes and 5 aspects that define this quarter, which I believe will define the quarters again. First, robust product traction and expansion of our distribution. Our quarterly performance reflects high-quality growth across our entire product portfolio. A key driver of this performance is the seamless market adoption of our recent product launches. Each of them continues to build scale quarter-on-quarter and distribution footprint continues to strengthen. Few highlights probably to give you some sense on the ground level field, personal loan, prime personal loans are digital prime 24/7 a first of its kind, now contributes to 42% of the peer disbursements compared to 38% in the previous quarter, providing a significant operating leverage. This increase in share comes into of a growing book. Our average monthly disbursement stands at about INR 57 crores, having grown by 8% quarter-on-quarter. If I can hold on, for example, our quarterly disbursements grew to INR 1,066 crores versus INR 875 crores in the previous quarter. Growth has been driven by a combination of expansion and maturing of existing branches. We launched 90 new gold loan branches this quarter alone, bringing our gold loan network to 550 branches from 60 at the end of quarter, we remain on track to add a total of approximately 400 new branches in this financial year. If I net commercial vehicles, despite the back row, the global fuel prices on certainty, we ended quarter 2 with an average monthly disbursement of INR 127 crores. On the distribution side, we scaled up to over 1205 channels, partners up from 1,100 in the earlier quarter to expanding the geographical footprint of 190-plus locations across 30 states. This gives us a strong foundation for continued growth in this segment. If I take education loans, average monthly dispenses have grown to INR 218 crores. We have significantly strengthened our origination capabilities, expanding our consultant network to 700 partners. Our instant sanction platform continues to drive digital adoption in the education loan segment with around 35% of sanctions now processfully digitally. Our consuma durables franchise has successfully scaled to 20,000 dealers across 360 locations, resulting in a total quarterly disbursements of INR 606 crores and over INR 433 crores in the previous quarter. We are now beginning to see expansion in the relationship of our earlier loans to cross-sell other loans. The second important point I want to highlight at this junction is that our margins and our scale are expanding together. Crucially, our top line expansion is not coming at the expense of profitability, we're experiencing margin expansion alongside balance sheet growth. In the same quarter at which our AUM grew by approximately 10% and NIMs fees improved. Our credit cost decreased and our ROE crossed the 2% mark. Even after front-loading significant investments into collections, which we believe is yielding very good results, our new branches, our OpEx remains within the range that we are happy with. Third important point at this junction, which I'd like to share with you is risk calibration and improving asset quality, which is, I believe, the most important thing for a finance company. Our portfolio is seasoning very well and the metrics are very encouraging across all buckets. We've registered a broad-based improvement across stage 1, stage 2 and stage 3 assets during the quarter. Stage 1 has improved by 26 basis points to 97.9%. Stage 2 has improved by 9 basis points to 0.94% and Stage 3 has improved by 17 basis points or 12%. Our Stage 2 portfolio improvement is a clear validation of our risk management capability. It reflects precise credit calibration pair with high-efficiency collections and lower roll forward drinks achieved through judgment organic calibration without curbing the growth. Collection continues to move from strength to strength, consistently delivering higher execution across markets and building a strength for us. Fourth, important point is the deep tech AI automation executed on the enterprise scale to give you a quick sense, our technology transformation accelerated significantly this quarter. We're not merely experimenting with artificial intelligence. We are operationalizing it across the enterprise now. And I've been across all departments. We've identified 42 new AI use cases this quarter, taking a total AR project count of 143, of which 84 have been successfully implemented. These projects span across every co function of the business and is also increasing the enhanced knowledge levels across all departments. This quarter, we've deployed agents and enterprise-level scale across our digital loan fund. Agents in the form of chat bots, video books and voice bots can converge seamlessly with the customers across application funnel. Total disbursements generated through chat bots and voicebox have been increasing every month. and we're very excited about that. The fifth important point, our multiproduct cross-sell engine. Yes. Our cross-sell engine has been set up and is now beginning to fire. Adoption across our product lines has commenced in line with our strategic road map as cross-sell penetration deepens across our existing customers will serve as a continuous multiplier unit economics and operating leverage. The logic is simple. We have built a growing customer franchise, a set of products that serve different teams on the same households of business digitally. The cost of acquiring a customer's paid once every additional product that the customer takes from us improves the return on that cost. In summary, finally, this quarter marks a very firm step in our journey towards sustained predictive and profitability. ROA has strengthened to 2.18%. Payment fees has expanded and disbursement yields continue to rise. Credit cost GNP and moved favorably with improvement across all 3 stages in a solid manner. All elements we admissaged are moving in line with both our plan and every word, we have said thus far, and we are clearly moving from strength to strength towards a solid foundation of risk-adjusted returns. Thank you for your continued trust and partnership. With that, let me hand over to Shriram to walk you through our current performance and trajectory this quarter.

Thank you. Thank you, Arvind. Good evening, everyone. Over the past few quarters, our strategic focus on this first underwriting and dynamic portfolio calibration has transitioned from an operational framework into visible compounding visits. What we are seeing today is not just incremental asset quality control, but a fundamental outperformance driven by the tight in between our upfront credit selection and enhanced collection efficiency. What truly sets our asset quality performance apart is not just static underwriting, but our agile closed loan architecture. . We execute a dynamic comprehensive credit calibration cycle based on changes reflecting in sourcing funnel and early risk indicator. Ground-level underwriting signals and real-time collection intelligence are far directly back into our risk decisioning engine. This feedback loop creates an unmatched operational synchronicity allowing us to refine policy parameters dynamically at early stage behavior before it turns into a default and doubled down on high-performing subsequents. The direct quantitative validation of this high-frequency calibration is evident in our slippage metrics this quarter. Our Stage 1 slippage ratio improved by 16% quarter-on-quarter while our Stage 3 slippage ratio delivered a matching 16% quarter-on-quarter improvement. By continually sharpening our underwriting lenses dramatically, we are converting real-time field data into predictable, lower credit cost and structural balance sheet resilience. When you look believe our headline asset quality metrics, the true strength of our portfolio lies in the quality of our fresh originations. Our early risk indicators provide compelling proof that our disciplined risk outflows architecture is working right as a front. Specifically, our 6 MOB 30-plus indicator for Q2 FY '27 has dropped to 0.35% a marked improvement over the preceding quarterly cohort. This isn't just a static data point. It reflects a deliberate structural elevation in our origination feeders. Because each new vintage enters our book at a better credit quality that downward slope of early stress is flattening sequentially. As these pristine new cohorts mature, they infuse the broader balance sheet with higher resilience. What we are witnessing today is a compounding benefit of high-quality origination flowing into a progressively more seasoned, predictable and structurally resilient credit portfolio. Let me highlight the key trends. The GNPA has shown a sequential improvement to 1.20% in Q2 FY '27 versus 1.37% in Q1 FY 271. NLP has improved to 0.61 in Q2 FY '27 versus 0.7% in Q1 FY '27. Quarter-on-quarter improvement across Stage 1 Stage 2 and Stage 3 asset composition continues in the current quarter, underscoring our calibrated growth approach and robust debt management framework. Stage 1 composition in Q2 FY '27 is at 97.86% versus 97.6% in Q1 FY '27. Stage 2 composition in Q2 FY '27 is at 0.94% versus 1.03% in Q1 FY '27. Our Stage 3 composition in Q2 FY '27 is at 1.20% versus 1.3% in Q1 FY '27. The quarterly credit cost has improved to 2.19% for Q2 FY '27 versus 2.40% for Q1 FY '27 versus 2.5% for Q4 FY '26. One of our strategic outcomes for risk is a high-quality new vintages age, they enhance overall maturity and predictability proving that our asset quality gains are structural rather than transit. The calibrated underwriting secures already at the front. Collections and Recovery engine ensures resilience across the life cycle. The new collections, not as reactive back of this operation, but as a core capability driven by data, technology and targeted execution. To that end, we are actively scaling our investments in a 2-pronged collection strategy. First, on the technology front, we are deploying advanced predictive analytics, dynamic behavioral segmentation and AI-assisted decision-making. But analyzing real-time payment patterns and early bounce indicators, these models route accounts to the most efficient resolution channel instead, whether that is intelligent automated reminders, dynamic digital payment links or tailored nut flows. Second, technology is paid with specialized human capital. We are structured dedicated expert manpower teams segmented by product category, stage bucket and delinquency cycle, whether it is an early-stage digital nudges, high-velocity mid-stage resolution or specialized legal and field recovery for late stage buckets, every product vector from LAP gold loans to Sarafelismanaged by teams specifically for those risk dynamics. This dual approach, AI intelligence precision at scale, combined with specialized field expertise is driving sharper execution efficiency lower roll forward rates and protecting our net credit cost as our balance sheet continues to scale. To conclude, the structural decline in our credit cost reflects a fundamental improvement across all the stages from improving stage 1 and 2 assets to accelerated Stage 3 resolutions. With our latest motivation cohorts, demonstrating superior fixed mobi performance, we are truly moving from strength to strength and our confidence and the resilience and quality of this portfolio is on a high. Thank you so much, and I hand over to Harsh.

Thank you, Shriram. Good evening, everyone. Today, I'm excited to report continued momentum in our Enterprise Air program. Last quarter, I described what we are building as an AI brain for the enterprise. This quarter, let me make that picture more precise because it truly reflects how the architecture hasn't matured. We are not building 1 single brain. We are deliberately building multiple specialized brands. sitting on 1 common governed layer, we have ensured that our intelligence is not dependent on a single point of failure. Think of it the way our people experience it, what a user sees and works with an AI operating system, the interface. Behind it, the specialized brains do the thinking, and that is engine. Governance is a new system that keeps every action safe and within bounds. And a flywheel underneath makes each new capability faster and cheaper to build than the last. Every project we deliver adds to the system, which is why our AI capability compounds rather than Fragmin. We measure progress on 3 things: literacy across every department measurable impact from every deployment and an ever wider range of problems we solve. Everything that follows is that system getting smarter. As we speak, our Air portfolio has grown from 101 to 143 projects across every core business function. Of these 84 are now live in production and 59 are underway. We delivered 34 of this in this quarter alone, our fastest quarter yet. What matters is how. Over the last few quarters, our focus has shifted from building individual AI solutions to building a platform that lets us create solutions repeatedly, safely and at scale. This is platformization. Our agents and components are now reskilled, retooled and reuse rather than rebuild each time. A capability built for 1 problem becomes a reusable asset for the next. Every connector, every workflow, every governance control is built once and used multiple times over. You can see it in this quarter is 44%. Some came through last quarter pipeline. They were conceived and delivered within the same quarter because they were built on platforms like MyBot rather than from scratch. And that is the operating system taking shape, and the flywheel we spoke about last quarter, now accelerating. Each new project begins ahead of where the previous 1 ended because output is growing faster than the resources behind it. This shows up as a genuine operating leverage. . Let me come to our guardrails because governance is what earns us the right to operate at this speed in a regulated environment. Last quarter, I took you through our AI governance and security framework, I'm pleased to report it now runs as a fully operational governance and testing engine. Every air deployment passes through the same standardized life cycle in 3 layers. First, before we go live, our red team stress test every solution, attack scenarios, security and data risk business continuity. So it's a production ready from inception itself. Second, ad deployment, every solution ships inside our security and compliance framework with governance checkpoints built into the deployment workflow itself. Third, after go-live, we monitor performance, reliability and emerging curabilities continuously with automated response and a dedicated illustration containment framework of adversarial testing secure data sourcing and inference controls. All of this operates within RBS 73. Innovation and governance scaled together, they are not competing priorities for us. Let me take you through where this showed up in the business. I'll take a few examples, but each one, a new skill that added to the brain. First, customer acquisition and conversion across our digital lending funnels, extend and prime personal loans, we have deployed conversational agents, chat bots, voice bots and video agents. They engage customers through the journey, answer queries and help them complete their application. As adoption grows, the volume of disbursement influenced by air let channels keeps rising month-on-month. AI is truly becoming an active revenue contributor, not only a productivity tool. A new advancement this quarter is our voice bot dialer, which reaches out and holds a natural conversation stakeholders at scale, internal to. Second, MyBot, which has taken its first real step from a knowledge assistant to an agentic platform. When we launched it, MyBot job was giving an employee access to knowledge, spread across our system and documents. Today, through an agentic integration layer, it also acts it involves workflows, complete routine tasks and service requests on a user's behalf within clearly defined guarded. What encourages us most is the adoption. This quarter, several departments built and deployed their own action-oriented agents on my part vessels on the same government platform through the same checks. Business users are becoming AI builders, not just consumers. Third, our AI marketing factory, 14 specialized creative agings generic content across campaigns, channels, products and segments, more than 2,200 assets to date increasingly weighted towards video with over 140 videos produced. The outcomes are what matters. AI generic campaigns are delivering 1.5 to 2x higher click-through rates supporting outreach to more than 15 lakh customer leads every month at more than 60% lower cost than traditional agency model. Let me close with where we go next. The last phase of our journey was about debt, proving value, building the platform, getting AI into every function, we now have that bit. The next phase is depth. AI enhance of every employee and every role, embedded in every court process as a daily partner in how work is done and decisions are made. That is how we move from deploying AI solutions to becoming an AI-native enterprise. I look forward to reporting further progress next quarter. Thank you, everyone. Now I would like to hand over to Mr. Sunil Samdani.

Thank you, Harsh, and good evening, everyone. Let me take you through the financial highlights for the quarter. The assets under management stood at INR 748 crores, reporting a strong growth of 10.4% quarter-on-quarter, driven by continued momentum in precede products. On the liability side, as part of our debt strategy, our focus on long-term borrowing continues. The share of borrowings from long-term sources stands at 88.9% , this number was 88.5% in Q1 of FY '27. Our net interest income, including fees and other income continued to grow healthy standing at INR 1,589 crores for Q2 of FY '27. This is up 12.3% quarter-on-quarter and 75.6% year-on-year. Net interest margin, NIM for the quarter at 9.26% is an improvement of 16 bps quarter-on-quarter and 86 bps year-on-year. Our provision coverage ratio stood at 49.4%. This resulted in a profit after tax of INR 375 crores during the quarter, which is up 21.8% qu-on-qu.ity ratio stood at 4.3x at the end of the quarter. Capital adequacy ratio continues to remain healthy and comfortably above the regulatory requirement at 1.68%, which the Tier 1 capital 17.15%.adroom coverage ratio at September 30, 202ainqu10%. -- liquidity front, we remain comfortable with positive cumulative mismatch across all buckets and a surplus liquidity of INR 6,526 crores as of September 30, 2026. Thank you. And now I would like to open the floor for questions.

[Operator Instructions] First question i from the line of Sura as from Sundram Mutual Fund .

Two questions. One, on this operating leverage, far you are saying that operating elevates in play with more and more on cross-sell. So if you can give some more color here in terms of where we are in the journey and where we are we lining to be latest products for customers. So what is that number now versus or maybe even 2 years any choices. And I say, what would be our latest target savings here? And when do we reach there. So that is question #1. . Second, in terms of, say, the product level profitability, how things are set in terms of new products that you have launched over the last year or so, how many are profitable and probably how many will be profitable this year versus next year and so forth. And in interproduct let's say, overall ROA higher than the company level. And once, let's say, all the new products and profitable, how do you see the overall blended ROA. So yes, I think that again as a ton. .

All right. Let me adept. I could partially hear you. I think there was a fair amount of noise, but I think there were 2 parts of the question you're asking is operating leverage has kicked in and how this will probably play out over the next 2 years. I heard you. Next is you want a net profitability kind of sense on how our products are doing. Let me cover a sense in both of you -- both of them and then maybe you can add. See, when you do a substantial amount of launches, which we did 1.5 years back, you put in an adequate amount of fixed cost to kind of build the kind of operating leverage that I'm talking about now. But remember 1 thing that you're running operating leverage on the infrastructure that you've constructed, with the investments you're doing it, which is why you see quarter-on-quarter, your ROEs are moving up. But simultaneously, we will be investing in more branches. We are investing in our new businesses. whether it's consumer durable to probably double our customer franchise this year strategically or we want to kick start, each of the businesses like education loans, personal on prime between physical and digital, and meta is growing well. That also gives us both the cross-sell piece from here on which has started in a small way, but probably quarter-on-quarter, we'll keep expanding. It's going to be 1 fundamental booster for your operating leverage. And the second will be our digital journeys, which are very strong when it comes to us. They also create very strong operating levers for us because our cost structure there becomes an advantage versus the physical distribution. So yes, across businesses at cross-sell and digital, we are experiencing an operating leverage, which should keep playing out. And remember, DM fees, the portfolio and disbursement deal itself creates a sort of a winning edge. You have almost Beneva conservatively or well over 20 basis points despite showing an ROA of 2.18%. So I think it should be very visible where we are playing out. Even OpEx costs on an annualized basis, looks moving exactly and close to a plan. But yes, we would be not just investing in products. You should keep in mind, we also very favorably investing to structure collections cost quarter-on-quarter in a very prudent and outcomes are also very encouraging. As far as the profitability, I said, I think if I remember right, I think I mentioned 28%, now the contribution of the dispersed is new products. New products is a combination of some of which probably breakeven in a year's time, like old branches for us probably breakeven in 13 months. But remember, we are investing in 300, 400 branches every year. So that also continues. The existing ones are obviously becoming substantially more productive -- but if you want a sustained profitability in model, which can be easily predicted for years to come, we are very committed to that model, which is why -- not only are we growing our ROEs, growing operating leverage and creating a margin expansion on NIMs, on credit cost as well as on the OpEx cost. If you look at it annually and quarterly, we are building a structure where all 3 are moving strength to strength. But remember for that, we also invest in AI. There's a fair amount of investments done. And we won't shy away from sensible investments. I want to be very honest about that. It's not about just managing every metrics. It's about creating a sustainable profitable model that we are committed.

Just 1 follow-up. I mean if you have the number handy already, I can run it offline, do you have -- I mean, what is the product per customer right now versus a year back or 2 years back? .

Remember 1 thing, you won't have our product per customer journey, like I said, is just starting. Like I told you that we are just about starting our cross-sell journey, which probably every quarter will start moving into incremental to compounding story. So that's a phase we have just started into because the first stage is to launch businesses. The second stage is to institutionalize their distribution. Third stage is where the cross-sell comes in. So we've entered that phase. And the operating operating leverage comes out of multiple stuff, like I shared with you, it comes all of the efficiencies of your fixed to volume efficiency, it comes out of your AI cost. It comes out of our entire model of cross-sell, which I just mentioned to you. So I think our product for level will be more relevant to figure a year down the line, which is every quarter will keep improving on a compounding scale. .

Next question is from the line of Pranay Mata from Investec India.

Firstly, congratulations on a beautiful set of numbers. I think you guys have delivered as promised from day 1. Congratulations to you and the team. I have 2 or 3 questions. I'll start with credit cost. Where do you think it is settled? And secondly, in terms of asset quality, I think you guys have done a phenomenal load. I wanted to understand going forward, how will your product mix be changed? Given 18%, I think, has come from new products this time on. So how will that be panning out over the next few quarters? That's it from my end for now. .

Thank you so much, Pranay. On the credit -- of course, we've reached a substantial -- I would call it, the first level of milestones of 2.19%, which looks more structural and stable. If you look at various vectors and maybe our open soon in the next minute or so. But let me give you an idea that the way we look at credit cost is very strong calibration mix and very strong collections. And if you look at the 4 vectors, which is your stage 1, stage 2, stage 3. Stage 2, in my experiential assessment gives a very strong indicator of the calibration levels despite the volume growth of any finance company. Normally, Stage 2 is very difficult to compress if you're growing at a healthy rate of road. The only way you can do that is very strong credit quality and calibration. And I think it's very clearly giving us the confidence of where we are reaching. If you look at the 6 MOB that we normally give on a like-to-like basis, it's gone down. I think almost close to 0.35 from 0.67 is a substantial reduction there, almost 41 basis points. It has a very clear downward bias. And I think this itself -- the reason we took out gold also in that data was gold was the lowest rent cost generally the custom. So even without that, the kind of downward trend looks very visible to where we are standing. So I think Shriam, do you want to add anything in terms of how you feel about the credit cost?

Yes. I think the credit cost we stated, you've seen the slope and we expected and in line with what we had planned for. And I guess this will gradually stabilize given the portfolio calibration run and strength of the collection set up. Further, we believe that our portfolio diversification with a prudent mix of secured and unsecured supports inherently lower risk and more stable way patterns, right? As the MD just spoke about 6 MOBs so casing a strong sequential improvement. One more data point can also give you some kind of -- if you are confident that the MOB 90 plus for origination September 24, has also seen an improvement of over 53% compared to the portfolio originated 12 months prior to September 2025. So I think in my viability, we are looking not better than what we had actually planned for -- and we expect that this will stabilize.

Coming back to your products, just 1 more comment. I think our unsecured book is really playing out really strong and giving a lot of confidence on both calibration and collections. But coming back to your question on new products, I don't fully remember your question, but you said that 20% of disbursement this quarter, some of the things that is looking exciting for us in the new products is that the digital part contribution is definitely moving up despite the credit cost moving down giving us the confidence on our filters. It's also giving us the strength at investing in, whether it's gold, whether it's education, whether it's loans against property, whether it's business loans, each of the business distribution is growing really well. Our customer franchise and the consumer durable seems to be helping us almost doubling approximately on versus the previous year. And that's where we'll get the funnel for the kind of cross-sell in terms of the way we grow that from here on. And remember, we are fairly experienced in that part of the game in terms of how optimizing cross-sell and creating that operating and cost advantage to wear on -- on that. So that's probably a quick sense to you. Thanks, Pranay.

No, that's perfect. Thank you so much for such a detailed explanation and all the best for your quarters going forward. Thank you so much. .

[Operator Instructions] Next question is from the line of Abhijit Tibrewal from Motilal Oswal.

I can't hear you sorry. I can just hear your voice. I can't hear what you're saying. .

Is it better now?

Yes, much better, yes.

Yes. So sir, I mean, firstly is in case of a data seeking question. Firstly, now that we have entered into a rate hike cycle, I just wanted to understand what is our mix of fixed and on diabetes? And what is the consistency of our cost of borrowings to, let's say, 50 basis points hit.

Can I request you to repeat because there are parts of it, we just could hear you clearly. .

Yes, yes, sir. I remit myself on again. I'm saying now that we are in a hike cycle, interest rate rates happen that cycle. I just wanted to understand what is the mix of our floating and fixed rate liabilities and what is the sensitivity of our cost of borrowings to, let's say, 50 basis points hike in therapeutic? .

Yes. I think Sanjay want kick started and .

So Abhijit, rising interest rate scenario, obviously, there can be a part movement in our cost of borrowing. But a couple of things I'll just like to put across. One, I think we are well placed in a diversified burn mix to contain the rise in our cost of borrowing a minimum and which is also visible from last 3 months of tightening cycle may not have been okay increasing repo rate, but interest rates have gone up in the environment. And the increase in our cost of borrowing was minimal. Second is, I think we should be able to pass on the hike, okay, depending on the product and the market dynamics. And third, obviously, the change in the business mix, which you are already seeing in the results of it. So overall, I think we are well placed where it doesn't impact our profits.