Shriram Finance Limited (SHRIRAMFIN.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to the Shriram Finance Limited Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Mr. Umesh Revankar, Executive Vice Chairman, for opening remarks. Thank you, and over to you, sir.

Yes. Thank you. I'm Umesh Revankar here, Mr. Parag Sharma, MD CEO; and Sundar, Board Director and CFO, along with Sanjay are with me. We can now after the initial remarks. So good morning. to everyone. And I would like to share a few of my thoughts here. As you know, the Sedan had a merger of 2 listed entities in 2022, Shriram Transport Finance Company, which was mostly focused on vehicle and equipment financing. Sriraman and finance over into SME, two-wheeler and gold financing. We merged with the purpose that we will have a larger branch network, better reach and multiproduct. The multiproduct other strategy, which we adopted -- and thereafter, post COVID you would have witnessed that we have been growing at around 17% -- 16% to 17% even some quarter reaching 18%, 19%. So the growth rate has been quite good, satisfactory. And we were able to really use the multiproduct strategy in all the branches. We have 3,225 branches. And we have been able to activate many of the branches or most of the branches I can say, for multiproduct. With this kind of growth, we have been looking for a strategic partner to raise capital. And in this process, we have been talking to many of the interested investors who were also are keen to participate in India's growth story. What is very important for us is the India growth story and the investor having the comfort of coming for a long-term haul. And in this process, we interacted with the MUFG. As you know, MUFG is 1 of the top bankers in the world. They are the tenth largest in asset size. -- with $2.8 billion in asset. The proposed partnership with MUFG will be with stake in the sense, the professional allotment given to them. So fresh capital would be coming in with approximately USD 4.4 billion -- that is the proposal and Board -- both the Board, MFG Board and SFL Board have approved the proposal. And we have already sent the notice for the AGM, and that is with you. Some of the things which you would like to highlight here is -- we believe with the large capital coming into SFL, we will have a long-term growth strategy -- and we would be able to grow significantly higher than what we have been growing. We have been growing at around 167. We would like to grow another 3% to 4% more, that is anywhere between 18% to 20%. It all depends upon the economic activity. Last quarter, the GDP growth in India, if you have witnessed it is growing around 8% plus, which is a very positive sign -- and we believe this is going to be a long-term happening in India, the way things are moving. The GST reforms also have given some kind of a positive consumer consumption push, and we believe gated demand will follow. And we also believe that growth rate -- credit demand in India will grow around 2.5x of the GDP. There's approximately 20% we should be able to grow on par with the credit demand and maybe in certain quarter and certain segments, certain geography, we would be able to grow much faster. There are a few things which we have in plan. We have been all these years financing to small vehicle operator and machinery owners, agricultural household, the for attractors mechanization of agricultural activity through mechanization. SMEs we have been either to doing smart ticket lending. We believe with our knowledge and experience in this field, we can upgrade to little newer vehicle and bigger ticket. We don't have to really go into unrelated businesses with the addition of new capital. The additional growth, what we can provide by having additional capital, that itself will be sufficient for our growth. From where we are getting this confidence is basically, when a large strategic partner comes into -- we believe our balance sheet being very strong, the borrowing rates will come down. Additionally, with rating upgrade Further, the rates will come down. And overall, we believe the 100 basis point advantage will get over the next 2 years on our borrowing cost. Our liability side will get re-rated on the borrowing. And that -- some of this will get passed on to the customers, especially the customers who are moving away from us for better rate to either bank or other peer NBFCs. So retention and attracting few new customers would be sufficient for us to keep growth momentum and grow at around 20%. The immediate impact of the capital inflation will be our gearing increased around 4.3%. That is leveraging will come down to 2.6 -- and we expect that to -- as we keep using capital that will keep increasing. The ROA part of it because the capital and lower cost, the ROA will expand from a current 2.8% to around 3.6% over the period. And the ROE, which will come down in next year because of the additional capital to around 13.5% will start growing year after. And we would be able to go back to the current ROE by '31, that's around 5 years from now. So we should be able to have a growth momentum, better ROE, better ROE. And we also expect the credit cost to come down, even though we don't want to give -- we have been always a conservative we don't want to give a very high positive picture on this. But around 10 to 20 basis point improvement in credit cost is a possibility because we would be able to retain our top customers, best paying customers for a longer term. So these are all the positives of the investment -- and I think this is the base -- and of course, the other advantages, which I would like to highlight the MSG has an investment in Morgan Stanley with 23.7%. And apart from that, they have investment into for Asian countries, that is Philippines, Vietnam, Thailand and Indonesia. And their experience in these countries have been good. They have a very strong digital play. -- that we should be able to take certain advantage of the platform, what they have built in these countries. And since they have the experience of investing in Asian countries, it will be very comfortable management for us. We -- as per the understanding, they will have 2 board seats. And the -- we also expect certain advantage in funding support, capital market support treasury solution. These are the broad understanding we have. But as we move together, we should be able to work out on a lot of mutually beneficial advantages. These are the broad numbers. And I think the rest of the information you already have, we are happy to go in for Q&A.

[Operator Instructions] We take the first question from the line of Maria from Mama Wealth Management Limited. .

Yes. Congratulations, sir. I had a couple of questions. Firstly, what was the ROE indication that you gave? I could not catch that properly. .

See, right now, our ROE is around 2.8%. We expect it to improve to 3.6 .

Okay. So my questions were that just in terms of growth, where do you see the share of new CVs settling. What would -- what do you think would be an ideal mix for your new CV. And if you could guide to a margin trajectory, say, over the next 1 year and maybe even longer term? Would we see it crossing 9%? How does it work? .

See, basically, what happens is the interest rate -- the borrowing cost reduction will be much steeper and for the entire book. And we will be onboarding a few customers for new vehicles. That means maybe around 5% of my customer would be new vehicle customer. Since my borrowing cost comes down by nearly 100 basis points, A few of the customers I am able to retain by reducing my lending rate. It will not have any impact on the net interest margin. In fact, my net interest margin is likely to expand from here. Exact numbers, I'm not able to give you immediately. Sanjay will be able to help you out of that. But you can imagine 100 basis points coming down for the entire book over than 2 years. And very few customers I'll be able to offer new vehicle lending rate -- even there, since we will be giving to select few that will not have any impact on the margins or spreads. .

Sure. But sir, what will be the ideal proportion? Like I mean, how much do you want to increase the proportion of new vehicles to? .

Yes. So basically, the -- our new vehicle market share is very low. It's around 3%, including the passenger vehicle among the new vehicle, overall new vehicle sales, which we would like to double it in the next 3 years. .

It. And the ROE target, I'm not target, but the indicative ROE is for 2 to 3 years, is it?

Over the -- it will start improving from the next year and it will have over the 4 years. .

Ver4years Okay. Yes. Okay, sir. And all the best. .

We take the next question from the line of Piran Engineer from CLSA. .

Congratulations on this landmark deal for the Shriram Group and the Indian financial sector. Sir, my first question is some of the management changes we did 2 months ago. Was this in lieu of this deal? And should we expect any more changes over the next course of the next few quarters?

No, see, the management changes were the normal management changes. There is nothing surprised here. So as the term came to end of the earlier Managing Director the new Managing Director and CEO has come Mr. Parag Sharma, and he will continue for a longer time. And there is nothing in anticipation of this deal, we have done. .

Okay, understood. And sir, also, like you mentioned that in the vehicle segment, you will go into the higher ticket, lower-risk segment. Should we expect something similar in MSME where you get into higher ticket LAP -- right now, you're operating in the INR 10 Lakh, INR 12 Lakh -- but that's still a more niche market, the INR 50 lakh, INR 1 crore segment, should we expect you all to enter into that also?

No, we will not go into large ticket semi lending. We will never get into lab lending. We will do only the SME business lending. -- we are very clear. However, yes, we will have additional security of property, either commercial property or residential property. That will continue. But we will not get into large ticket and will not get into lab.

But if I may ask, why will you not do that now that your cost of funds is likely to be competitive with the good players? .

See, we -- as I have been repeatedly saying that we are a conservative company, we do not wish to play for a long-term lending. -- lap momentum, call it a relap it goes into 12 to 15 years longer lending. -- which we would like to restrict to 5 to 7 years only and only for a term loan and for the business purpose. And based on the cash flow.

Understood. Understood. And even this vehicle -- new vehicle segment that we are talking about doubling market share that will come primarily from new vehicle loans to existing customers. We will not go into the open market to source new vehicle loans aggressively. Is my understanding correct? .

Yes, yes. at right.

Got it. Got it. And just my last question. Could we -- now that we're sitting on INR 40,000 crores of cash, any potential M&A that we could be thinking of? .

No. So we'll not be looking into any kind of inorganic growth. .

Thank you. We take the next question from the line of Avinash Singh from Emkay Global Financial.

First question, again, repeating on that, of course, you have provided some color about, I mean, now with the fire capital, in terms of accelerating growth, I mean, in terms of product, customer and geography. I mean on the product side adjacencies you explained, where you would like to go. Now in terms of your geographic footprint, you have been relatively more into the rural amrut I mean does now your cost of funding becoming very, very competitive would you like to kind of venture more messily into urban and metros as well as, I mean, going after the prime customers also, we have some of that. I mean, typically, the NBFCs or banks have been operating. So I mean, do you have certain plans around this customer and geographic adjacencies -- and secondly, on MUFG, I mean, of course, the filing and everything says for now, they are kind of a public investor. But now given the kind of direction of this investment and strategic importance -- is there a plan from their side to, I mean, kind of been turning into the copter sense like that? .

See, basically, we would like to remain in our geographies where we are. We don't want to -- we don't want to get into metros at a we would prefer to be in this Melba rural market. And the -- as I was telling that we would prefer to retain my existing customer and definitely, I will create more reach in the North Central and East, where our footprints are a little less. We would be expanding. We have a rural center there. we would be converting those into branches. So naturally, my reach in these geographies are going to be better. Even if you see the way each states are growing in India, South seems to be growing much faster, and the GDP per person also is much higher and also to some extra invest but there is a scope in the east and north and central to grow. Especially, we believe that central and not are likely to grow much faster -- and there is enough indication for us that they are catching up with South maybe in the next 5 to 10 years. And that is where we believe the suit part and the maximum growth we should be able to get -- the second question would be .

On MUFG, there's no discussion whatsoever for any further stake -- they will be classified as non-promoter and have 20% stake. There is no discussion whatsoever for any further increase as of now. And this is huge capital which is going to take some time for us to deploy. There's no need for any further capital or discussion for their stake in cities. .

We take the next question from the line of Pratik Kothari from Unique PMS.

Sir, 1 question, irrespective of this large capital, we had the wherewithal products, the customer segment, et cetera, to kind of accelerate growth. But like you mentioned, for the last 3, 4, 5 years, we have been growing at this 15%, 16%, 17%. So is it just this incremental capital, which kind of now makes us more aggressive and want to because the reverse would have been what we would expect when you are growing at 20% and you need capital and since you entered in got capital. It seems that it was where you got capital and hence, now we want to grow faster. .

See, basically, everything falls into your cost of borrowing. And with this new capital, our cost of borrowing will come down and that will help us to get into certain segment or sector customers. And therefore, the growth rate is higher. So it is not that we can grow at 20%, yes, the current borrowing cost and attract capital. It is not -- so therefore, we have -- we were looking for a partner for making a ground that our total liability cost borrowing cost comes down. with peers in the market. .

And also over the economic environment, the current GDP growth is good and possibilities and opportunities are there. we'd like to take advantage of that and then grow faster. .

Correct. And sir, this 100 bps of cost of fund improvement over 2 years, decides highlight the time line, what happens very quickly, what happens 2 years out in the assumptions behind the same.

I think 2, 3 things. One is the incremental liabilities and replacement of the current debt takes 2 to 3 years. That is why we said it will happen over a period of time and not immediately. So whatever debt gets replaced, maturity will be around 2, 2.5 to 3 years. So that is why we give this 3 years' time line. And growth like for growth, whatever liabilities we raised additionally, that will definitely come cheaper, but that will be around 20% growth only for liabilities also. -- but replacement of debt, which normally takes a longer period for getting the pricing benefit. .

So the thought behind this is to, right? So 1 is a larger institutional partner backing us and to potential rating upgrades. So the 2 of this fall in place and we think 100 bps is what we can get. .

I think that is the thing. And in fact, other thing also other way is also the -- because of RBA action rate cuts, the benefit is anyway flowing in. .

So I thought this 100 crore was over and above that. .

So this assumes the RBA rate cuts, which is yet to pass . It assumes that also. But . Yesterday, also 1 rating agency has upgraded us to AAA. -- we expect other rating agencies, actions also being there. So let us I think we'll wait and watch. But we factor in all the positives and then say, 100 basis point improvement. .

It. And sir, last on this $200 million noncompete that the employee trust kind of got -- if you can just explain what is this the rationale something on this? .

See, basically, the promoters, part of the in the SOT, there should not be starting a similar business because you would have seen that normally, whenever there is any investment -- there is a noncompete plus for maybe a year or 2. But this gels and there is an understanding that we will not start any similar business by the promoter group. That is SOT -- that's why this payment is made. .

But sir, this is unfair to the other minority, right? It's just this 1 cohort of investors who get something I mean I understand the reason behind it and usually noncompetes part of things, but to get such a large amount, just to 1 cohort, this seems off as a minority investor. .

It is paid directly by the investors. .

And there is no price which has reduced because of this investment. -- as per the table determent pricing, whatever was the preferential issue rate is what is paid, which is not discounted at all. So that full money comes into Utsira Finance. .

No, fair. But the -- 1 of the cohort of investors got a larger -- large, I mean, if you do the per share calculation, what But a different amount than what the others got what Serafina on. So . I mean agreed to at the same, but I mean the promoter has been at a different rate. .

Promoters are not selling anything. It's a fresh capital that is coming.

We take the next question from the line of Shubhranshu Mishra from Phillip Capital.

And congratulations on this deal. So just the stock exchange notification that was originally put out, there were 2 other points, which you answered earlier, but I'm just reiterating it. AFG can second up to 3 of its personnel as senior management. up to 6 months of the completion date. And there is a nonbinding MOU to explore framework to identify beneficial business opportunities, which implies that there could be senior management changes. -- or they can have their own people come in. Second is that there can be acquisition targets. You've answered these 2. But if you can just clarify these 2 points from the stock resale notification itself.

Yes. See, basically, the understanding is that none of the secondaries would be either KMPs or senior management. They will be #2 or #3 level only. So none of the KMPs and senior management change is uncharged at this level, all discussed. .

Areas of synergy. .

Area of synergies basically since they have investment in other Asian countries, we would like to see how their investment have progressed. And depending upon the some sharing of the information would be there. It can be that they also learn from our experience here in India. -- and we can also learn from their experience. It's mutually agreed. And I believe on the digital platform, there will be some advantage. -- because they have a very robust digital platform in the Asian countries. And even though India is 1 of the leading in the digital call network and the digital transactions. As we believe that the other Asian countries have done much better in certain areas. -- we would like to really know from that and possible adopt here. .

Great. One last question is that they also was a significant stake in DMI Finance. -- which is into digital lending and consumer durable lending, which could be a complementary business for us as well. In the future, there's a case that we'll see the merger of BMI finance into Shriram Finance.

No, we don't see that opportunity, the chance because it's a purely fintech company, and we have never -- we did not discuss. In fact, they are invested in BMI through their fund, 1 of their fund called Ganesha fund and not directly from the bank as planned as their investing year. .

And we don't want to explore that complementary business also in the present construct, consumer durable financing fintech partnerships, so on and so forth. .

Nothing was discussed, and I don't see any kind of change there. .

Best of luck as happen here. .

We take the next question from the line of big Debra for Motilal Oswal Financial Services Limited. .

Congratulations on this transaction. So just a couple of questions. So what is the time line that we're looking for the completion of this transaction? And once the transaction is completed, -- but in what time frame can we expect this equity is to win that work? .

Basically, 14 is the AGM date. And after that, we need to apply for RBA approval, a formal approval from RBI and -- we expect it to take 2 to 3 months, but it can be faster also. It all depends how these things move. And we would be happy to get it in this financial year. But at the MAX, it can be epi. So we are happy to receive as early as possible. .

Sir, basically, minimum of 2 to 3 months is what you're expecting on this transaction to that complete .

There is something called minimum. It can be a we are just giving you outer time .

Sir, the other thing is, I mean, yesterday, we reported -- we already have a taking up from care and maybe dates will follow seat in the coming quarters. After that, I mean, with a AAA credit rating from [indiscernible] multiple visibility is what is the steady state leverage that we can operate at? I understand it will take a few years to get there. But what is the steady state leverage At which we can operate. .

See, as we have an international rating, we have to have a capital adequacy of 20. So we always see the sweet spot for us is anywhere between 4 to 5x. -- maximum 5 and 4 is ideal. And for reaching that 4x leverage, it may take maybe 5 to 6 years. But we are happy in this -- I think the sweet spot is 4 to 5, and we should -- or I should say 4.5 should be the exact at .

Got it, sir. So then a couple of times earlier in the call, we shared that over the next 2 years, we are expecting 100 basis points impact or benefit on our blended cost of funds. So perhaps I can just briefly explain where is it that the bigger benefit will come from? Will it come from the debt capital markets, should coming from the bank borrowings? And how much of this benefit will be retained versus pass from the customers to be market .

Yes. I think 2, 3 fronts where the larger benefit will come. I don't think there is much of a differential when it comes to the bank borrowing between AAA and AA. There is different -- definitely a lot of differential between the capital market borrowing what we have and also the retail deposits. Retail deposits for us is around 26%, 27%. So as and when we reduce the rate there and the capital market, which is close to around 23% of our liabilities, both this will have benefit and that should happen over a period, as I mentioned, around 2.5 to 3 years. .

Got it. And sir, how much of this do you think can be retained versus what could be passed on to the customers, so that we gain market share if you grow at a higher rate. .

See, basically, we would like to retain my existing customers who are growing and becoming larger. How many of them, I can tell you around 30% of my customer over the period move out because they grow their business and they want the new vehicle or larger ticket. And if we are able to retain that itself is significant. We don't have to really look for a new customer to grow my business. .

Got it. And sir, lastly, we spoke about now maybe targeting a 20% kind of for the AGM [ CAGR ] with this equity infusion and like you said, even if you end up retaining some of our existing customers who move out, we can very well gain there. I'm just trying to understand, I mean, we've discussed already a lot in terms of our focus on maybe eventually into newer series maybe a bigger MSME playbook. But in terms of product segments, which are those product segments, which will consume most of these growth capital that has come .

See, vehicle being 70% of my book, automatically, the larger capital will flow into that all commercial vehicle, construction vehicle plus your passenger vehicle is put together 70% of my book. And then the 2-wheelers, we are already a #1 player in the market. and we'll continue to remain #1 there. I don't really see a big change in the 2-wheeler our market position. Probably we'll be able to grow on the what we call a bigger bike that is -- which we were mostly focusing on our transportation kind of a bike we may get into a little bigger bike Otherwise, there may not be a big difference there. But in the SME, I see a huge opportunity, but we'll be very cautious. As I was explaining you we will not get into a lab. We will do only SME cash flow-based lending. But definitely, we'll go for secured lending, at least for some more years, we believe until the SME segment becomes much well understood by us, we will get into secured lending. .

This is very useful. Thank you very much, and I wish you [indiscernible].

We take the next question from the line of Viral Shah from IIFL Capital. .

Congrats on this landmark and investment, sir. So I have 3 questions. Third one, more of a clarificatory question. So first of all, you have mentioned all to 100 bps reduction in cost of funds. Now if I tie in this with the lower leverage that we will have post this money coming in, and also the lower credit cost that you guided, do you think you are being too conservative on the ROE numbers that you are guiding for, sir? -- because just mathematically, when I added all these 3, the numbers seem to be much higher, the RA uplift, at least of course, in the intervening period, I'm not talking obviously on a steady-state business, like-for-like leverage, et cetera, which will still be at least 6, 7 years down the line. .

The 3.6% as said at the end of 5 years. Interim, yes, when the capital comes in, the ROA will go up significantly. It may go up to 3.8 in -- but it will slowly as we expand our business, it will come down to 3.6. So whatever I'm trying to say is at the end of 5 years. .

Okay. Got it, sir. Sir, secondly, on the growth front, you mentioned the growth acceleration from 15%, 16% to 18%, 20%. And this seems to be just incrementally on back of lending for new vehicles and debt to for retaining customers. Do you think this is the kind of -- just on back of this, we can achieve this growth even say, in the next 1 to 2 years? .

Yes. We are quite confident the GDP growth rate, it gives us that kind of comfort and scope for growth. Now 8% growth in the last 2 quarters is very positive for us and the credit demand because of the increase -- today's headline also you would have seen that manufacturing is 1 of the highest in the month of November. So I think there is enough demand for us to grow. So as I was telling you that just retaining my customer, I'll be able to grow 20%. I don't have to really do acquire a new market or a new customer or do something totally different to growth. .

Got it. And sir, lastly, on the leverage, you mentioned the sweet spot of 4.5x. Just wanted to clarify, are you referring to the debt to equity or the asset to equity .

Debt to equity.

We take the next question from the line of Shreya Shivani from Nomura. .

Congratulations on this historic deal. Sir, I have 2 questions. My first question is just focusing on your product mix, while you've explained very well that your new customers itself -- your existing customers themselves can support growth. But where would the vehicle nonvehicle mix be for you. It has been at about -- if you include 2-wheeler in the vehicle. It has been at about 80-20. Will that over 5 years, will you take -- will you keep it at 80-20? Does that shift to 50-50 or any other number if you can help us understand how the diversification within your book takes place? And my second question is on the MUFG, the 3 set of people who will come in Will they -- is there any clarity on which business segments would they come in to be a part of One, you mentioned how you want to deliver the digital capability. So 1 can expect something like that can come in there. But is there any other area where you expect these people to review the new set of people to come in and be a part of certain business segments. So those are my 2 questions.

Basically, on the overall proportion, I don't see there is any change because as you rightly said, including two-wheeler and construction equipment and farm equipment it is 80-20. That is 15% is SME and another 5% is gold and the personal loans. So overall, that proportion will continue to remain -- but maybe, yes, we would be a little more aggressive in the gold financing because we have a reach which we need to take an advantage. There will be certain push for gold finance. That will increase maybe another 2% more -- so gold finance going up by 2% more can bring down our proportion to 78-22. So it will be just 2 to maybe 5% variation could be there within this segment. broader segment, not the small segment. That's how I think it will play out over the 5 to 6 years. The second question is a second. See, second is, right now, they have not indicated where they would like to put -- but there are many things when the MUFG also is -- have regulatory requirements there. in Japan. And therefore, they also have to understand our accounting and some kind of a reporting would be there because it's a significantly large investment into India. So we believe it will be mostly on this account maintenance and maybe reporting and digital -- these are the areas. On the business front, it may take more time because they need to understand the businesses in India and slowly. But 1 thing they have -- we have made it very clear it is neither be a KMP nor a senior management. It will be someone who will be wanting to learn business in India and understand the IndAS environment. and help in the more of an information flow and the digital play.

Got it. Sir, but there is still a possibility that some of them could come into some business segment and secondary also, right, not just in these 3 account maintenance and reporting that you're talking to. That is still a possible there's no restriction on that, right? .

I can't put any restriction. But yes, definitely, if they want to learn something in India, and we use that in Indonesia, definitely welcome. -- that's how any investment has to be for learning new things. Because Indonesia also has a very active NBFC sector. And there are a large number of financial institutions there beyond the bank. Of course, they have invested in the bank. But they also -- the bank also has NBF sorry, subsidiary. That's how we understand. .

Got it, -- this is very useful. Thank you and all SP-5 Thank you. .

We take the next question from the line of Umang Shah from Kotak Mutual Fund. .

Congratulations on the deal and the much integrated rating update. Sir, just 1 question and a couple of clarifications. First is on the noncompete. If you could just help us understand this better. what is the duration of the noncompete? And the non-compete, does it just apply on SOT or even the members or beneficiaries of the SOP, which could be current or past senior management within the group? .

No, it is basically the -- for SOT, -- that is the promoter growth. And there is nothing like a time line we have decided that we will not have any other business started by the matter over on time. .

Okay. Okay. And any of the members or beneficiaries sorter than technically become part of this agreement, right? .

There are part of the SOT. Anyone who is part of the SOT they will not be able to start any business matters. Okay. .

Okay. Understood. Okay. Sir, the other 2 clarifications. One is once all the regulatory approvals are in place, the 4-odd billion comes -- the money comes into the company in 1 shot? Or are there any milestone-linked investments? .

No, it's one shot.

Okay. Perfect. And sir, the last 1 is listening to your commentary, it appears that your ROE target for the next 5 years appears a bit conservative -- even if I build in the cost of fund advantage and maybe a little bit of credit cost benefit, ideally, we should hit our ROE targets much sooner compared to what you're guiding for. I mean it's fair to be conservative, but is my understanding correct? Or am I missing something here? .

See, we are a conservative company. We'll be thinking conservative only. We don't have any other way to think. So you should give us a guidance on other personalities .

All right. Okay. No problems . I got it. Thank you so much, and wish that -- thank you. .

Ladies and gentlemen, we take that as the last question. I'm going to cut the question-and-answer session. I now hand the conference over to Mr. Umesh Revankar for his closing comments. .

Thank you, everyone, to come online today. Now these all holidays and no, no. Many of you is a holiday season. And I wish you the new wishes. -- plus 1 thing I would like to remind you, we have sent notices and I request everyone to positively participate in the work for us or for the resolution and participate. If you have anything to discuss feel free to talk to Sanjay. And we are open to discuss one-on-one at any point of time on any issues. Thank you very much, wish you all the best for the new year 2026.

Thank you. On behalf of Shriram Finance Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. .