Repco Home Finance Limited ($REPCOHOME)

Ladies and gentlemen, good day, and welcome to Repco Home Finance Limited Q4 FY '26 Earnings Call hosted by Yes Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Mehta from Yes Securities. Thank you, and over to you, sir.

Thanks, Swapnil. Good evening, everyone. Thank you so much for joining this fourth quarter and financial year ending March 31, 2026 call of Repco Home Finance. We have with us from the management team, Mr. T. Karunakaran, MD and CEO; Mr. P.K. Vaidyanathan, Whole-Time Director and Chief Development Officer; Mr. M. Raja, Chief Business Officer; Mr. A. Palapandi, Chief Operating Officer; Mr. Ankush Tiwari, Company Secretary and Compliance Officer; and Ms. Shanthi Srikanth, the CFO. With this, I pass on the call to Mr. Karunakaran for his opening remarks, post which, Swapnil, you can open the floor for Q&A. So over to you, Karunakaran, sir.

Thank you, Mr. Rajiv. Good evening to all, and I'm extending a warm welcome to this earnings call to discuss the performance of our company for the financial year '25, '26 and [indiscernible] forward. Our Board yesterday approved the financial results of our company for the financial year '25-'26. Post approval, we have uploaded our financial results and PPT containing our performance in our website as well as stock exchange websites. I believe you would have a chance -- had a chance to go through our performance results and whatever the PPT we have uploaded in the stock exchanges and our website. For those people don't had a chance to see our results, I would like to go through our performance quickly before opening the floor for Q&A. Coming to the business, we have seen substantial improvement in the disbursement side, both quarter-on-quarter as well as year-on-year, we have seen improvement. During the quarter ended March 2026, we have disbursed INR 1,186 crores. Of course, this is the highest disbursement in our company. In the whole year, we disbursed INR 4,148 crores. Again, this is the highest disbursement. During the same period in last financial year, we have disbursed INR 3,284 crores. Our disbursement in '26 is up by 26%. If you compare disbursement of March quarter with the December quarter, December quarter, we have done a disbursement of INR 1,064 crores and March quarter, we have done INR 1,180 crores. We have seen 12% growth in the disbursement. Overall, quarter-on-quarter and year-on-year, we have seen substantial improvement. Again, this financial year, September, December as well as March, we crossed INR 1,000 crore mark disbursement in the quarter. If you look at contributions of loan disbursements state-wise, Tamil Nadu remained highest out of total disbursement of quarterly as well as yearly disbursement, almost 60% of the disbursements are coming from Tamil Nadu. Last quarter, that means December to March, we have seen disbursement improvement in Karnataka, Maharashtra, Telangana and Madhya Pradesh -- going forward, I'm expecting more disbursement from these states. If we look at loan book mix, we have not seen any changes in loan book mix. Out of total loan book, 71% of the loan book is HL and 29% is the non-HL. Total loan book at end of the financial year stood at INR 15,880 crores as against INR 14,496 crores in the last financial year, we have seen growth of about close to about 9.5% or 9.6%. Even salary versus nonsalaried, we have not seen any change. As end of the March, out of total loan book, salary class accounted for 46% and non-salary class accounted for 54%. These are the from disbursement as well as AUM side. In respect of yield, overall yield as end of the March stood at 11.9% as against 12% in December '25 and 12.07% in March '25. If you ask the breakup of yield, that also we have not seen any changes in the yield by assets or even profile mix. Salaried class yield stood at 11.36% and non-salaried class yield stood at 12.27%. I'm getting a yield of 11.16% from home loan and 13.44% from non-housing loan. This is the yield I'm getting from HL non-HL and salaried class and non-salaried class. I mean, '25-'26, we disbursed INR 4,148 crores. Out of INR 4,148 crores, INR 700 crores is approximately INR 700 crores gone to meet out the regular repayment and about another INR 2,000-odd crores gone to meet repair -- I mean, prepayment preclosures BT out and all. So net increase in our overall loan book is about [Technical Difficulty].

Karunakaran, sir we are unable to hear you.

There was some network issue.

Yes. It's about INR 1,300-odd crores. In December quarter -- in March quarter alone, we have seen incremental in loan book to the extent of INR 485 crores as against INR 360 crores in December 2025. [indiscernible] from loan book BT our or under control. And on average, we have experienced about INR 35 crores to INR 36 crores per month BT out. BT in is per month is about approximately about INR 45 crores to INR 50 crores per month. This is our experience in last financial year. Net in net, that means BT out net to net, the gain almost on an average about INR 15 crores to INR 20 crores gain we got in a month in last financial year. Coming to asset quality, we have seen reduction in NPA. As end of the March '26, our NPA stood at INR 405 crores, which was about INR 475 crores in the corresponding period of the previous financial year. Even quarter-on-quarter also, we have seen reduction in NPAs end of the December, NPA was about INR 450 crores. GNPA, last year our GNPA was -- at the end of the '25, our GNPA was 3.26%, which we brought it down to 2.55% as end of March 2026. Even we have seen substantial corrections improvement in Stage 2 assets also. At the end of the financial year 2026, our Stage 2 assets stood at INR 1,115 crores as against about INR 1,410 crores in the corresponding period of the previous year. The overall book, the Stage 2 assets stood at almost close to 7%, whereas the same was close to about 9.5% in the previous financial year. We have seen improvement in all the buckets, I mean, SMA 0, 1, 2, 3, all those things we have seen substantial improvement. The cumulative provision for all NPA as well as standard assets stood at INR 343 crores as end of the financial year 2026. Almost we are maintaining a provision coverage ratio of 55%. We are doing provisions as a conservative basis. As per our -- we are following an Indian Accounting Standard model. As per model, we are providing more as per the model, we need to provide in and around 26% to 27% for NPA accounts, whereas we are maintaining about close to 55% as a conservative and prudent manner. And additionally, the provision what we have made under IRAC norms is much -- I mean, Ind AS thing, much, much higher than IRAC provisions. Then coming to new loan, the book-wise performance, new loan book, that means loans given post 2022 is doing good. The overall NPA in the new loan book is about close to 1%. Even Stage 2 assets in the new loan book is about 3.9%. Coming to the borrowing side, we started at the year beginning, we started diversification in our liabilities. During the current financial year, I mean, '25-'26 financial year, we have issued a commercial paper to the extent of about INR 150 crores. In last quarter, we have done one pass-through certificate -- and December last -- I mean, Jan to March, we have issued an NCD to the extent of INR 125 crores. As end of the March, our borrowing -- overall borrowing stood at INR 12,250 crores. Out of total borrowings, almost 6.2% of the funding is coming from National Housing Bank and 85% of the funding is coming from banking system and about 5.39% is coming from Repco Bank. CPs accounted for about 1.2% and pass through certificate pass-through certificate and NCDs accounted for almost 2%. Our cost of fund at the end of the year stood at 8.56%. I'm very happy to share that National Housing Bank has sanctioned INR 600 crores refinance facility to our company. In the yesterday Board meeting, they approved the sanction. Very soon, we are going to execute the document and going to avail going forward, I'm expecting it will help me to help the management to reduce our cost of funds. This is from borrowing side. Profitability side, yes, few new expenditure items and certain one-off items affected our overall income and expenditure and profitability of the company. I would like to list such items. Effective from April 2024, as advised by the regulator, we have changed the interest calculations method. We have switched over to daily balancing method. Because of the change in the interest calculation method, our interest income is down by INR 11.53 crores in the current financial year. All of you are aware that labor code was implemented with effective from November because of implementation of labor code, we charged 15 crores to P&L to comply with the new labor codes and one-off expenditure like Silver Jubilee year, this is '26 is silver Jubilee year for us. We celebrated Silver Jubilee year in first quarter, and we conducted the review meeting in person. Such expenditure will cost INR 5 crores. And again, CSR expenditure normally we used to do 2% of the average profit of last 3 years. In the financial year '25, '26, we increased to 5% -- on account of this, we additionally charged INR 15 crores. If you would have 2%, it will be INR 10 crores. Since we have increased from 2% to 5%, the cost is -- we had additional cost of INR 15 crores. All the items put together, it's come approximately INR 46 crores. Otherwise, my profit would have been more by INR 46 crores in the current financial year. Our Q4 profit stood at INR 129.11 crores as against INR 108.77 crores in the December quarter. Our overall year profit stood at INR 453 crores as against INR 449 crores in the last financial year. Ratios wise our NIM stood at 5.38% as against 5.15%. These are the from profitability, our ROA stood at 3%. Cost of fund, I already told you it's 8.56% and yield on advances, I already told you it's about 11.9%. So thereby we are maintaining a healthy spread of 3% and NIM of 5.38% and cost-to-income ratio stood at 28.71%. These are the from profitability and ratio side. Network, we are having 242 branches, including sat centers and branches. In the financial year '25-'26, we opened 9 offices across the country. And coming dividend, all of you are aware that we have already declared an interim dividend of about 45%. And yesterday Board meeting, Board has declared 30% final dividend subject to approval of the shareholders. So our total dividend for the financial year '25-'26 is 75%, which is highest dividend what we declared in the RHFL history. And this is all the things I want to tell before opening the floor to Q&A. And again, I take this opportunity to all our valued customers, all shareholders, analysts, rating agencies for bankers, investors for continued support. Now I open the floor for Q&A.

[Operator Instructions] We'll take our first question from Vikas Kasturi of Focus Capital. I think we have a connection issue from Vikas. We have our next question coming in from Amit Mehendale of RoboCapital. Yes, we can hear you.

My first question is on the loan book. Our earlier aspiration was to do about INR 25,000 crores of loan book by FY '28. Are we still on track on the earlier aspiration?

Yes. Last year, I remember my first con call, I said INR 4,000 crores disbursement in the financial year '25, '26. Yes, we have done a INR 4,000 crores disbursement. Current year, we are having a target of -- we said we want to achieve a disbursement of approximately INR 5,000 crores disbursement -- and I'm expecting a prepayment of about prepayment as well as repayment of about INR 2,940 crores. Out of INR 2,940 crores, approximately INR 2,060 crores will go to AUM, remaining will set off by -- used to set off my prepayments as well as repayments. So my year-end target for the current financial year is about INR 18,000 crores. That means in a nutshell, we want to disburse about INR 5,000 crores, and we want to take it up to our AUM to INR 18,000 crores. Yes, another 2 years down the line, yes, we'll be in a position to achieve INR 25,000 crores AUM.

So basically, in FY '29, are we saying that we are -- we have about a year of delay. So in 3 years, we will get there?

Yes, yes.

And how much of inorganic loan book growth are we expecting?

No. Right now, yes, we want to do some book buying, not on very big way or aggressive manner to test the things we may do this financial year about INR 25 crores to INR 30 crores, not more than that. Majority of the my book is from our own -- not buying from the market.

Sir, actually, sir, if you look at it, our loan book growth is significantly below our disbursal growth. And that problem exists for some period of time now, either through BT out. So how do we see that going forward? I mean, unless that problem is solved, the loan book growth will become a challenge.

Yes, we have taken a lot of steps to arrest BT out. Now the BT out are fully under control. The average BT out as of now is about INR 30 crores to INR 35 crores per month. BT out are really under control. Of course, to retain a good customer, we have reduced our interest rate also because of our spread also slightly came down.

And Amit, to add more to that, say, considering that my portfolio or my organization has been in existence for the past 25, 26 years, I have quite a vintage book. So as you are aware in the market, my mortgage loan gate-to-gate is not more than 7 to 8 years. So I will have to expect and accept rundown of my book because of maturity alone. Even if I'm going to control my BT or the takeovers, my natural runoff of book will happen. We'll have to increase our disbursement speed, and that's exactly what we are planning to do and we are doing.

Second thing, in addition to Mr. Raja, majority of my loan books are nonsalaried class customer. Substantial portions we link to non-salaried customer. The of non-salaried class customer, business class people is as and when they are having a surplus cash flows in the business, they will come to us prepay and close the loan as and when they require the loan, they will come to us. We have also experienced that those who are invest -- they avail the loan for investment purpose, for example, buying the second house, third house or something like that. After sometimes, they are selling, pre-closing the loan. That is also we have experienced in the last financial year. The only way left with this prepayment preclosures in the 25 years of old company, it is very difficult to avoid market also that's very much competitive. So the only way we have left with is to increase the book is to disburse more aggressive in the disburse at the bit. But at the same time, we don't want to dilute quality in the disbursements, which is evinced from our performance of new loan book.

Right, sir. And my second question is on CSR. Are we going to continue with the 5% spend going forward?

Right now, we don't have any plan. We want to stick it in and around 2% to 3%. I'll come out -- I'll answer your question in next my con call. Right now, I'm not in a position to give the exact numbers. Right now, my idea is about 2% to 3%, not more than that.

Right, could you elaborate why was it suddenly raised from 2% to 5%?

You know well that last year is a silver jubilee year. So we have done this thing. We will also get a brand visibility. See, we are spending, we will get a brand. That is brand visibility will get, which will improve my business, such only be invested in...

[Operator Instructions] We are taking our next question from Shubhranshu Mishra of PhillipCapital.

This particular number that we are talking about in terms of, sir, INR 2,000 crores of BT out prepayment, which was for the full year, what is the proportion of prepayment and what is the proportion of BT out here? And in this monthly run rate, sir, of BT out and BT in that we are doing, where is our loan going out, sir, which all HFCs or banks are taking up these loans, if you can name them? And from where are we getting this BT in, sir?

Yes. Shubhranshu I'll take this question, Raja here. See, most of my BT outs are going to my public sector banks, obviously, because of my rate of interest and the difference in the same. My BT ins are coming from HFCs mostly from the segment of self-employed profiles. So that is what we have been witnessing. And I believe that will continue because the public sector banks are now getting aggressive and they are more concentrating on taking over a vintage loan. That is where we are bleeding. And when you ask about the percentage of BT in and BT out, net to net between BT in and BT out, my BT in are more than my BT outs. So as of today, I am enjoying on that, yes.

No, no, sir. That is what I asked. In the opening comments, I think what was mentioned is that there was INR 2,000 crores of BT out and prepayment. I wanted a split between prepayment and BT...

Okay. So BT in, as my boss said, on the BT out, I'm experiencing almost INR 30 crores to INR 35 crores per month. So for the year, it is almost what around INR 400 crores per month for the year. For the year, I'm having a BT out of INR 400 crores. And the balance is my repayment and prepayment and preclosures.

Repayment...

I will clarify like this. See, last year, we got a principal rundown of about approximately INR 2,670 crores, okay? Out of INR 2,670 crores, scheduled repayment since scheduled principal repayment is approximately about INR 700 crores. Remaining thing, approximately about INR 2,000 crores, INR 1,900 crores is principal repayment, prepayment, pre-closures, everything put together, of which BT out is about close to INR 400 crores. I hope I'm clarified.

Yes, sir. But what is the repayment and how much is prepayment is what I'm trying to establish, sir?

Prepayment, that means partial prepayment, it is roughly about INR 256 crores. Full payment is about INR 1,700 -- INR 1,650 crores, INR 1,675 crores.

Entire foreclosure of loans of INR 1,700 crores, sir.

Yes, yes.

And this is a normal run rate, sir, which happens each year?

Yes, it is a norm. Yes, we compared with the same number with the previous financial year, it is a normal thing. Of course, BT out is controlled in '25-'26 compared with '24-'25, BT out is controlled -- well controlled in '25-'26. Other prepayment preclosures it's almost similar. I told you the majority of my borrowers are non-salaried trust customer. As and when they have the cash flows, excess surplus cash flows in the system, they will come to us pre-close and they will take a new loan at a later date.

Understood, sir. And one last question is just a data keeping question. Sir, if you can repeat the yields on salaried, nonsalaried and HL and non-HL, sir.

Yes. See, out of INR 15,879 crores is my loan book as end of the March 2026, of which salaried class is about INR 7,410 crores. Non-salaried class is INR 8,470 crores in terms of percentage, salaried class is 46% and non-salaried class is...

Sir, the yield...

You're asking about yield? Yield, approximately, I'm getting 11.36% from salaried class customer and non-salaried class customer, it's on an average, it is about 12.25% to total 12.27% depends upon the profile of the customer, it will vary.

And HL and non-HL, sir?

HL approximately it's about 11.16%. Non-HL it is about 13.44%.

Understood, sir. And the difference between our yield and APR is ballpark same or there is a difference -- a substantial difference in APR and yield?

It's almost same, sir.

We'll take our next question from the line of Vibhor Talreja of Nest Amplifier.

Sir, the question is very similar. Look, congratulations on the Silver Jubilee. But as investors, for the last decade, we are sitting at 25% loss at a time when the index is up 3x. On the AUM growth for the last 5, 6 years, the CAGR is 6%, 7%. Even this year, the guidance was INR 16,200 crores, we have ended up at INR 15,850 crores or something. And while we are continuing to do disbursements, the AUM growth is much lower, which is where most of the other questions were. I heard the guidance this time also at INR 5,000 crores, which is higher, but the AUM growth at INR 18,000 crores. One is the sanctity of this, but I don't have many questions. I just wanted to share that one has been a long-term shareholder, but it has been a very difficult journey. And the entire market is not recognizing our efforts, and they are not visible. That's why we are trading at 5x, very much unlike the entire market. And now we don't have an asset quality issues. So our asset quality is doing phenomenally well. Our NNPAs are reducing. The credit costs are 0. But I'm sure as management, you would have seen that, but sometimes it takes us to be a shareholder to realize the pain so that we are putting in all the best efforts because sometimes it's BT out, sometimes it's principal repayment, sometimes it's the kind of customer, which should be there for all housing finance companies. But we have seen that especially at the scale we are and the bank advantage we have, most companies have grown phenomenally better in a year, in a 2-year, in a 3-year, in a 5-year and a 10-year phase. But somehow none of that happens. And we disclose very good data and numbers. We are very good proactively disclosing the numbers, but the AUM growth just doesn't come in. And that is what is the big game changer in a lending business. I'll pause here. And if there are comments that I should keep in mind, I would like to, but I just wanted to mention what I just shared.

Yes, you are right. We also have that pain. We stand with you. But yes, our AUM growth, as we are looking at an organic growth, we are required to manage all the parameters and all the variables in the market. Like, as I said, because of a vintage book, I have no other choice if a customer comes in for a pre-closure after 5 years, 6 years, 7 years, I will have to accept it. Though I try to retain him. We do have a retention policy and all those things. But still, as you rightly pointed out, our book growth is getting restricted because of the vintage of the book and the closure. I also, as my boss said, because we being more of a self-employed kind of a profile, customers do come in for bulk repayments quite often. And we cannot and we should not stop them also. So my -- the only choice I have is to run faster, that is to increase my disbursements, which, yes, we are trying to do it by also reducing our cost of funds so that I can get into more of an retail game. We are planning and strategizing, -- we'll have to wait for the future.

Any update on how this quarter is turning out to be given we are in end of May?

Yes. This is going as per schedule. We are having a plan to do disbursement of about INR 1,000 crores. We don't -- we want to maintain the momentum or we want to maintain the trend of doing more than INR 1,000 crores in a quarter. This trend will continue. Yes, we are taking a lot of efforts to arrest preclosures and prepayment. Mr. Raja rightly said, we are a 25 years old company. It's very difficult to manage prepayment and pre-closures. Yes, we are -- we would like -- going forward, we'll be very aggressiveness in the disbursement. One thing I want to confirm you that for the sake of growth, we will not dilute our standards and underwriting standards and quality in the assets, which is clearly from the performance of the new book. Yes, we are putting efforts to arrest the preclosures. Let's see. We are expecting improvement going forward.

We'll again allow Vikas Kasturi of Focus Capital to ask his question. Vikas, would you like to...

Am I audible?

We can hear you. Please go ahead.

Last time, I did not get the unmute button. Sorry about that. So sir, hearty congratulations on this great quarter and a great financial year. Like you said, the highest ever disbursement on a quarterly basis as well as an annual basis. And the GNPA is also you brought it down exactly like you said. Sir, I have been listening to all the questions and your answers as well. And I want to ask a question on the rundown itself. But I want to give you a data point, sir. From FY '22 to FY '26, so last 4 years, you have disbursed around INR 13,500 crores, right? And -- but on the Slide 25, you -- our AUM from '22 onwards is only INR 10,000 crores. So roughly about INR 3,000 crores of rundown has happened on the new book as well. So that is about 25%. So I'm just saying, sir, rundown is happening not just on the legacy book, it is happening on the new book as well. And so while you've been saying because of vintage, there is rundown, what explains the rundown in the new book, sir?

As I was saying my customer profile being self-employed, I do get a lot of bullet payments or part prepayments. So that is something that we cannot avoid and we are required to take it up. Your observation is right. So though there are no major preclosures in the recent book, but there are a lot of part prepayments and that is what is being observed by 25%.

Correct, sir. Even in the last financial year, you have disbursed INR 1,100 crores, but the new book AUM has gone up by only about INR 800 crores. So there is -- so you can see that there is a rundown even in the new book, which is happening, sir.

Yes, you're right. Your data points are right. But from an answering perspective, it dwells more on my principal repayment upfront repayment because if it's a shorter term, my principal repayment will be faster and also because of my part prepayments because we allow part repayment even on the third month and fourth month of the loan. So I cannot do much about it.

In addition to that, we are following a robust credit underwriting standards, legal scrutiny, valuation scrutiny and all. Once my borrower approach any other financial institutions and say, I've taken your loan from Repco Home Finance, they will close the eyes and take. That's also a lot of prepayments is because of our quality in the asset, we are getting a lot of prepayments or taken over by other institutions.

We have Pawan Kumar of Edelweiss with his question now.

Congratulations on good performance. I have 2 questions, one on disbursements, another one on the -- when we will see the GST reduction.

We are unable to hear you.

So on the disbursement, when you say we'll go to 250 branches. That's one second, sir. Am I audible?

You are audible, but we are not getting the full question. Can you please repeat it?

Yes, sir, just when you say 2000 -- I mean, INR 5,000 crores of disbursement, you are saying you will do INR 1.67 crores, INR 1.7 crores per month from branch, right? So that is approximately you are talking about like less than 13 loans. And you have like 5, 6 relationship managers. Can you walk us through the numbers, how it will work out?

You're talking about per branch disbursement, right? Say, per branch per month disbursement, it depends on the branch category because we do have branches across the geographies like urban, semi-urban and rural also. So the same standard cannot be applied to all branches. But having said that, my average disbursement per branch per month is anywhere between INR 1.5 crores to INR 2 crores. And in a given branch, I'll be having 1 BSM and 1 BH. So that is the kind of relationship or sales force that I have. And we are in the process of improving the productivity also. But I think we are at an optimum level with 1 BH, 1 BSM and maybe one runner boy or something like that is what we are looking at INR 1.5 crores to INR 2 crores. Of course, this year, you can look at increased productivity. Having said that, that is what we are running for.

Sir, can you give the split of that 1,600 employees that you have? Like how many of them would be in branches and how many of them would be actual sales managers? Or as you said, it's only 240 sales managers, 1 person per branch?

There are 240 branch heads and almost 180 branch sales managers. And we do have a regional setup and the corporate office also. So the exact breakup, maybe I'll pass it on to you through my team. On the credit vertical and operations vertical, we'll have to do a full bifurcation. Anyway, I'll share that data with you. From a sales perspective, branch heads will be 1 per branch, as you rightly said. And BSM, we almost have 180% to 185%.

Sir, okay, basically 2 salespeople, right, between branch head and sales managers. And you are expecting them to do almost 10, 11 loans per month at INR 1.5 crores to INR 2 crores.

Yes.

Isn't that asked too much like.

So in our kind of organization, we are -- with our DNA, we are used to do that kind of numbers. Because we have a branch, we have a processing setup also. So they source and we have a team in the branch to process the files.

Sourcing is entirely internal, right?

Yes, yes, yes.

Sir, isn't hiring more salespeople a solution because all the other companies operate at like 3, 4, 5 salespeople per branch and then they are able to -- like Aptus is doing higher disbursements at a much lower AUM compared to you. And their geographical footprint is almost similar to you.

Yes, we can add on more salespersons, as you said. That is one of the approaches. But again, we are very, very conscious about our cost to income and overhead.

But your yields are so low, like among -- like even you say your self-employed is high. It's only 50%, 53%. Your yield is lowest among the affordable housing finance people. So I mean like if you can add employees, I see like a great scope.

Yes, yes. We have noted. We already have it in the back of our mind, but it takes a bit of a time to get it implemented. Thanks for the notifications, yes, we are noting it down. We will be working towards it.

Okay. So my second question is on the Stage 2, like really great performance from bringing it down to 7% from 9.7% last year. So FY '27 and Stage 2, can we look at something like a 4% kind of a number or a 3% kind of a number?

Actually, this is Vaidyanathan. Actually, we plan to reduce below 5% because last year, we have reduced around 2.7%...

Correct.

We wish to reduce below 5% at par with the industry, but we hope we will reduce it more. Because we are having a separate collection team, and we have strengthened the collection verticals. Now we have started to focus on the rollback of accounts. Last year, if you say the absolute numbers, we have rolled back around INR 300 crores from INR 1,410 crores to INR 1,115. So this year also, we have assigned a separate vertical for reducing the flow from B0 to B1. The initial stage itself, we want to restrict. So going forward, we can reduce the Stage 2 accounts below 5% before the end of this financial year.

Got it. Sir, can you explain the success...

Sorry if you have a follow-up question, please rejoin the queue. We have a few other participants as well. We have our next question coming in from Saurabh Dhole of Fyers Assets.

I just have one question. With respect to the dividends, you had a payout ratio of about 10%, if I assume full year earnings of 74 EPS. What is the outlook that you have on the payout? Or was that just a onetime 25-year celebration because of which the payout was increased and it will now go back to its original trajectory?

We continue. We want to maintain this trend. It's not a one-off thing like other what I discussed in my con call. We want to -- as a management, we want to give -- we want to continue this trend.

Okay. And again, it will have an interim plus final kind of a pattern because typically, Repco is in the -- just a final dividend is what.

That's what in mind. Right now, I'm not in a position to answer your based on the numbers and other things, it will be decided. I'll be in a position to give exact thing on next to my con call. But we want to continue this trend. We don't want to go back.

We'll take our next question from Prithviraj Patil of Investec.

So I just wanted to understand the pricing strategy and the cost of funds. So if I look at cost of funds on a Y-o-Y basis, they have gone up by 10 basis in a declining repo environment. And also, if I look at the yield, the yield on assets that we report has gone up from an 11.7% in Q4 FY '25 to around 12%. So I just wanted to know our pricing strategy and how we think of yields going forward or the cost of funds going forward?

Cost of funds have consistently reducing it from the 8.75% last year financial year, we have brought it to 8.5%. So there is a consistent reduction in our cost of funds. And going forward, if at all repo is increased by RBI, our cost of fund might go up. Otherwise, not much of a change we expect. The yield side...

See, right now, my yield is about 11.90%. It was about 12.07% in, say, March '25. We are -- of course, we are following a risk-based pricing model. Majority of my borrowers are non-salaried class customer. We will ascertain based on the risk profile, the price will be determined. You know that we are sitting on a very tight and competitive environment -- it's very difficult to maintain about 3.34% the spread what we reported in previous quarters and to retain the good customer, we have to case by case, we have to reduce our rate of interest, number one. Number two, in this current financial year, we have reduced our benchmark rate-wise. July 1, we have reduced 10 basis points. And again, February 1, we have reduced our 10 basis points. All put together, we have seen reductions in the yield. Want to grow. It is not possible to maintain a good -- I mean, spread -- good spread and growth, it will not come together. Want to grow, we need to sacrifice some portion in our spread. For current financial year, we would like to maintain a spread of in and around 3.2 to 3.25%.

We'll take a follow-up question from Saurabh Dhole of Fyers Assets.

Yes. Sir, with respect to this NHB sanction that you have basis this particular transaction, by how much will your cost of funds go down by?

We expect it might go down around 10 bps to 15 bps around.

We got a INR 600 crores refinance. We are yet to avail. We want to give clarity in availing a refinance from NHB it's because we will get a cost benefit. Of course the cost will be decided at the time of availment, what kind of book debts we are giving to them, whether it is affordable segment, nonaffordable, whether it is urban, rural, so many factors are there. My guess is we will get a cost benefit of in and around 10 basis to 15 basis points immediately. That is my guess.

Okay. And overall cost of funds will go down by...

Overall cost of fund our actual borrowing with public sector bank is around 80%. Public sector bank, majority are the MCLR-linked loans. So much of reduction might not happen from that side, provided the repo exchang, they may also increase. So I cannot give any indication at this moment. The NHB will help us in reducing the cost of fund for 10bps.

Rightly said, we are not expecting any reduction in bank borrowings. Yes, that NHB repayments will help me to reduce our cost of borrowing around at least 10 basis points in this quarter. My guess is next quarter, I'm not expecting any reduction in cost of maintaining this cost of funds will be really challenging.

We'll take our next question from Rajiv Mehta of Yes Securities.

Can you hear me now?

Yes, yes.

Yes, very quickly, I think you touched upon Karnataka that the growth has improved. But when I look at Q-on-Q growth as reported by you, it's 0% growth. Y-on-Y, it's not grown. There is another large market, which is AP, which is again growing very slowly. So when you combine these 2 markets, they are 20% of the book, but the growth is not coming through in these markets. So when do we see in these geographies contributing towards growth and hence, the overall disbursement number looking better? Or is it like we have not added enough people on the sales front in these markets and which is why the growth is not coming about. So if you can just give us some idea about whether these geographies will come back to growth and whether they can incrementally add to your disbursement volume per month or on a per quarter basis?

Rajiv, I'll take this question. See, on the Andhra -- when I'm talking about Andhra Pradesh, yes, there was a requirement of team alignment which we have done in the last quarter. That is Q4, we have already done that, and we have put a specific leadership there. So this year, I should see growth from that. And on the Karnataka front, the e-Khata issue is now fizzling down. So I should expect a lot more growth from Karnataka. And more than Karnataka, Andhra and Telangana, now we are seeing very, very green shoots from my Maharashtra, Madhya Pradesh and Rajasthan markets. So my non-TN is poised to give me good numbers for this year.

No, no, I get that. So then -- so how are you -- so but I have not seen you adding more sales people, I think, off late in recent quarters because when I look at your total employee count in the last 3 quarters, I think it's stable. So is it the fact that you are waiting for more productivity to first manifest and then add people in certain regions? Are you even thinking about adding having 2 salesperson in a branch besides the BSM -- sorry, besides the branch head. I mean, see, the whole issue is that since you have a pretty high run rate of prepayment, partial prepayments and then preclosures even from own money because of your customer profile, we need to push the disbursement run rate per month per quarter much, much higher. And for that, we'll require people, will require pricing as a strategy or maybe we'll require new distribution. Can you please elaborate what...

Rajiv, in non-TN branches, now we have done a major rejig of all my branches. So we are looking at high-performance branches, and we have also put in place a city sales manager kind of profile. And now we are looking at adding more feet on street. That is my direct sales team and others, we are looking at increasing my feet on street, which will be a low-cost grassroot level employee. So along with all these efforts, we expect the business to increase multifold in these regions and which should be evident in the coming quarters. If not in Q1, at least in Q2, I'm looking at a much, much higher contribution from non-TN states, Rajiv.

Not which states? Non-TN, yes.

Non-TN, non-TN states.

Correct. Just one last thing from my side. Yes, did we have any -- since you recovered a lot of NPAs and resolved them, roughly about INR 40-odd crores because INR 5 crores was a write-off, INR 40 crores was NPL resolution and recoveries. Were there any one-off interest recoveries also associated with it, which got booked in the revenue line in this quarter?

We have done in a lot of cases.

But the block of NPL resolution was higher in this quarter of INR 40 crores. Generally, it is -- so would the interest recovery element or number be higher, much higher in this quarter?

Actually, Mr. Rajiv, you know well that we are following -- I mean, Ind AS. In Ind As, even NPA accounts also we are recognizing as and when it's accrued. It's due for accrued, not like IRAC. IRAC norms, once the account becomes NPA, we will not recognize whatever the NPAs already recognized, we have to reverse, in this case...

Okay. So you were already recognizing.

Right, right, right, right. Net of provision we recognized so that the impact will not be there. Because of recurring NPA, my revenue will not go up substantially.

Got it. So I'm done. I think if there are more questions, we can take 1 or 2, yes.

Rajiv, due to paucity of time, we will take that as the last question for today. And on behalf of Repco Home Finance Limited, this concludes today's conference call. Thank you all for joining us, and you can now click on the leave icon to exit the meeting.

Thank you, Mr. Rajiv. Thank you for all participants for actively participating in this con call. Thank you.

Thank you.

Thank you, everyone.