Aptus Value Housing Finance India Ltd (NSE: APTUS) Q3 2025 Earnings Call dated Feb. 03, 2025
Corporate Participants:
M. Anandan — Executive Chairman
P Balaji — Managing Director
Analysts:
Mona Khetan — Analyst
Rajiv Mehta — Analyst
Unidentified Participant
Amit Khetan — Analyst
Yash — Analyst
Niharika — Analyst
Kushan Parikh — Analyst
Rajnikant Shah — Analyst
Nidhesh Jain — Analyst
Siraj Khan — Analyst
Jayesh Shah — Analyst
Nischint Chawathe — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q3 FY ’25 Earnings Conference Call of Aptis Value Housing Finance India Limited hosted by Dolat Capital Markets Private Limited.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms Mona Khetan from Dolat Capital Markets. Thank you, and over to you, ma’am.
Mona Khetan — Analyst
Thank you, Alari. Good morning, everyone, and welcome to the earnings call of Aptus Value Housing Finance. This is his Q3 and nine months FY ’25 performance. We have with us the senior management from Aptus to share industry and business updates.
I would now like to hand over to Mr Anandan for his opening comments, after which we can take-up the Q&A. Thank you, and over to you, sir.
M. Anandan — Executive Chairman
Thank you,. Ladies and gentlemen, good morning to all of you. I’m Anandan, Executive Chairman of the company. I welcome you all to this call to discuss the company performance for the quarter nine months ended December 24. I have with me Mr P. Balaji, MD; Mr Shiti Manawarel, ED and CBO; and Mr John, our CFO.
At the outset, I’m delighted to share that we have crossed certain key milestones in terms in terms of right now loan crossing a INR10,000 crore loan book, crossing 150,000 customers and almost 300 — we just crossed 300 branches at-work.
At Aptus, we believe in strong growth without losing focus on the quality of loan book and good financial metrics. Very happy to recall that Aptus had a very good nine months of FY ’25, supported by business growth, stable asset quality and continued focus on high productivity. Strong business model, distribution network, deep penetration in-markets, customer sensitivity along with appropriate tech support and diversified product income stream have enabled the company to achieve good business results. Our network stands at over INR4,100 crores, indicating robust capital adequacy. This coupled with good support from banks, NHB, mutual funds and BFI on the bottom side and with the strong on-ground demand for both home loans and small-business loans gives us the confidence to pursue strong growth, scalability in the coming years with sustained profitability.
Further, to support the vision of reaching loan book of INR25,000 crores AE by AEM by FY ’28, we will continuously strengthening the organization by way of investing in new branches, relevant technology and strengthening the company with adequate manpower across all functions, more particularly in the middle-management.
I would now hand over the line to Mr Balaji to discuss the business focus, operating and financial parameters. Thank you.
P Balaji — Managing Director
Thank you, sir. Good morning, friends. As we have been explaining in the earlier calls, we will continue to focus on key strategies, namely growing disbursements and loan book in the housing loan and small-business loans, considering the large headroom available in the low and middle-income segment entire three and four cities. Expanding operations in the states of Orissa and Maharashtra and increasing penetration in existing geographies by opening new branches. Strengthening the analytics and digital adoption, about 21% of our business in Q3 FY ’25 has come from customer app, construction ecosystem app and social media channels. Our focus shall be to increase the leads through these channels in addition to the physical branch network.
We continue to focus on productivity, collection efficiencies, OpEx and cost of fun. The new mobile-first lead management software has set us well and is bringing in good improvements in terms of streamlining our processes, service delivery, lesser bounds, improved collection productivity, better regulatory compliance and improving overall efficiency. We are continuously monitoring the functioning of this new system to bring in more improvements.
Now coming to the major performance highlights, OEM grew by 27% year-on-year to INR10,326 crores. Disbursements during the year increased by 21% year-on-year to INR930 crores. We have 298 branches as on 31st December and as we speak, we have reached the branch network of 300 of this. 10 branches are in the states of Maharashtra and and the balanced 288 branches are in, AP, and Karnataka. Total branches added for the nine months were at 36. Total live customers crossed 1,52,000, which is a 27% growth year-on-year. NPA was at 1.28%.
Now coming to the asset quality, collection were at 99.35% and our 30 plus GPD marginally improved to 6.21% as on 31st December as compared to 6.24% as on 30th September. Net NPA was at 0.96%, provision coverage ratio maintained consistently at 1.03% as of 31st December 2024, we are a total provision of around INR105 crores, including a management overlay of INR55 crores. And this — when come — when completed as a percentage of NPA works out to a coverage of 80%, NIM was at 12.94%, opex to assets were at 2.61% despite investments in new branches, technology and HR. Profit-after-tax was at INR54 crores, which is a growth of 24% year-on-year. RAA was at 7.7% and return-on-equity was at 18.54%, which is one of the best-in the industry.
Now coming to the funding. During the quarter, we diversified — diversified our borrowings further by ensuring aggregating to INR325 crores to mutual funds. Of the total borrowings, 54% are from banks, 18% from NHB, 15% from NCBs issued to mutual funds and RFC and the balance is in the form of securitization. We have sufficient on-balance sheet liquidity of INR998 crores, including undrawn sanction of INR590 crores from banks. As you know, we have not done any direct assignment of loans and front-ending of income on account of this.
Just before I conclude, happy to share that we have received the copy agency license from IRDA during the quarter. Now with these remarks, I open the floor for the question-and-answer session.
Questions and Answers:
Operator
Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rajeev Mehta from YES Securities. Please go-ahead.
Rajiv Mehta
Yeah, hi, good morning. Congrats on a good stable quarter. My first question is an observation related to employee cost, so which has been stable in last three, four quarters despite sizable AUM increase and addition of 36 branches. So why is this? And can you also share the employee count now versus one year back and some color on attrition trends? And typically, what is the variable component in a monthly salary of a sales officer.,
P Balaji
Your voice is not very clear, but anyway, I will answer your questions to the extent I heard and after that we can make the clarification. First of all, if you look at the salary cost, it has been stable quarter-on-quarter because if you look at our disbursements, it was INR935 crores last quarter and it is INR930 crores. So because of that, the volume-related incentives were not — it does not increase. So that is one reason. And of course, the number of employees in the sales, I think that increased by 100 and in the collections have increased by 30 compared to the last quarter. And all these additions have happened during the end-of-the quarter and maybe to that extent, the cost catching-up will come in the 4th-quarter. So this is broadly the reason why the costs were flat and what is the next question Rajiv?
Operator
Hello, Rajiv, please go-ahead. Since there is no response, we will move to the next participant. The next participant is Palak from IES Securities. Please go-ahead.
Unidentified Participant
Yeah. Hi, sir. Thank you for having — giving me this opportunity. So my question was more towards the borrowing front. So wanted to know that out-of-the total borrowings, how much of our borrowings is linked to one month MCLR, three months three-month MCLR and EBLR,.
P Balaji
So if you look at our total borrowings, fixed is around 47% and 53% is variable. And of the 53% variable, 30% is linked to MCLR and 23% is linked to-market related rates. So if you look at how much is linked into one year MCLR, of this 30%, almost 15% to 16% is related to one year MCLR. Three-Month is almost 6% and six months is the balance. So that is the breakup on the borrowings.
Unidentified Participant
Okay. So the rest, 30% is linked to MCLR and 23% is linked to couldn’t hear you.
P Balaji
23% is linked to the market rate, either a treasury bill or a deposit rate.
Unidentified Participant
Okay.
P Balaji
That’s benchmark.
Unidentified Participant
Okay, okay. Thank you, sir. That’s it from my side.
Operator
Thank you. The next question is from the line of Amit Khettan from Labyrim Capital. Please go-ahead. Amit, please go-ahead with your question and unmute yourself in case if you have muted yourself.
Amit Khetan
Hello.
Operator
Yes, Amit, please go-ahead.
Amit Khetan
Yeah, am I audible?
P Balaji
Yes.
Amit Khetan
Yeah, hi. Sorry, thanks for taking my questions. A couple of questions related to your branch network. So if I look at our existing states, right, the top three states of Tamil Nadu, Anza and Kelangana. We have some 250-odd branches right now. How do you see this — for these three states, what’s the potential over the next three to five years? And specifically for TN, has the market sort of saturated because we haven’t really grown our branch network significantly over the last three to four years.
P Balaji
So first, I’m say the branch network. Currently, the Tanada branch network is around 88. And I mean, if you look at it, every 50 kilometers in Tamnado, we will have a branch and we are preparing to add six or seven more branches in this year in this quarter and also in the next year. So to that extent, the growth in-branch network might be limited in, but actually there is no problem with the market. The market has good potential to grow. And so with this branches, we are very confident of what is in the growth which we are promising. So that is the first thing and we’re coming out of it. And if you look at our strategy of growth, we will be opening around 35 to 40 branches every year. And in the next year, the branch metric will be growing mostly in the, Maharashtra and and Karnataka. Because if you look at coastal Andhra Pradesh, at least Andre Prash, it is almost 130 branches are there and I think we are every 50, 50 kilometers there, we are having a branch there. So again, the branch network might not increase much, but the loan book growth will come from the market that is available. So this is broadly the plan with which the growth will be coming in the next three, four years.
Amit Khetan
Understood. Understood. And second question again would be related to the newer fleets, right, which is Maharashtra, Urista and Karnataka. What’s your experience been in terms of competition, opportunity size and the customer behavior based on the growth that we have seen so-far?
P Balaji
Yes. If you look at it, I think Maharashtra and the branches opened in Maharashtra and have settled well. And we have clocked the loan book as of now of INR27 crores which is a very good number because considering the time they have taken to open the branch and then expand. This is a very fast-growth there and we are able to get good customers and the customers — the repayment is also behaving very well. So we are very confident of growing more more branches in this space and also the loan growth there. And as regards the competition, in, there are not many players. Of course, in Maharashtra, there are players, but they are opening branches close to. So where there are not many players, but still we need to see when we are opening branches in the other places, we need to look at competition at that point in time.
Amit Khetan
Got it, got it. And just a follow-up on that. Karnataka three years back was about at a similar scale as Telangana. Why has the scale-up there been relatively slow relative to?
P Balaji
No, if you look at, the loan book growth is around 27%, which is good. So it is basically the number — the growth in other states are slightly higher. That is where the composition of AUM is pretty maintaining maintained at around 8%. But if you look at, we are having good promise. We are happening — we have open more branches in this year, next year also we’ll be opening more branches and there is good growth in the loan book and also the disbursement in that place.
Amit Khetan
Okay. Okay. Got it. Thank you.
Operator
Thank you. The next question is from the line of Yash from Citigroup. Please go-ahead.
Yash
Hi, sir. Thanks for the opportunity. Sir so first question is on the write-offs, which looks like
Operator
You’re not — you’re not…
P Balaji
Your voice is not clear.
Yash
Yes. Hi, sir. Is it better now?
Operator
It’s just too much of — there’s a crackling noise on your line, Yash.
Yash
Okay, slightly better now.
Operator
No, not quite.
Yash
Is it better now?
P Balaji
Okay. Yeah, we’ll go to it. Yeah, we’ll see.
Yash
Sorry, sorry for this inconvenience. Sir, one first question was on the — the calculated write-offs slightly elevated during the quarter. So any change in the policy? I believe our policy was more of write-offs in 24 months DPD.
P Balaji
And we are talking about the credit cost, right? There is a slight increase there. See, I will answer it in this way. If you look at the util provision slide, if you look at the EPL provision slide, in this quarter, there is an increase in provision of almost INR5175 crores. But the debt in the P&L is around INR12.5 crores, which is INR13 crores, that’s what mentioned. So the difference is almost INR6 crores that has got debited in the P&L, that is basically because of technical write-off, which means we have this accounting policy of more than 24 months NPA where we technically write it out in the books of accounts, but the recovery efforts will continue because the customer will be there, the property is also there. So this needs — this INR13 needs to be studied with the recovery that is happening on the income side, which is around INR5 crores. So if you look at the net credit cost as compared to the previous quarter, previous quarter it was 0.38% and now it has reduced to 0.32%. So it is basically — so we are actually — it’s seeing improvement in the bad debt recovery as well. So that is the thing and we are not seeing any problems in the collections or in the red bad debt recovery.
Yash
Okay, okay. Got it, sir. That’s very helpful. Sir, second is in the expansion in our workforce, so we’ve seen to have added more on the collection side and the branch operations side or the overall operation side. So is — is it in-line with our focus areas or because the number slightly looks higher compared to our branch additions?
P Balaji
No, I will tell you why this is getting at hand. See, one thing is we need to — we are guiding the market with 30% — 25% to 30% loan book growth in the next two, three years. So what happened is we need to prepare the organization for the next level. So I’ve already started preparing the organization by employing more salespeople and also on the collections so that with — even if the bounce rate is the same, the number of collections is has to happen because of the growth. So we need those collection officers in-place. So we have already appointed whether we can take care of the next year as well. So that is the reason why the numbers have gone up. And still if you look at it, the productivity per sales officer is higher if you look at any other company, any NBFC or HSE for us. For a 10,226 crore loan book, these are the since of this INR3,192.
Yash
Got it. So sir, our even our disbursement growth in the range of 25% to 30% should hold in the medium-term?
P Balaji
Yes.
Yash
Okay, got it. Sir, that’s it from my side. Thank you so much.
Operator
Thank you. The next question is from the line of Rajiv Mehta from YES Securities. Please go-ahead.
Rajiv Mehta
Sir, am I audible this time?
P Balaji
Yeah. Yes, Rajeev.
Rajiv Mehta
Is it better, right? Okay. Thank you. On — sir, this — so again, just coming back to asset quality. And when you look at the collection efficiencies, we are still running 30 40 basis-points below normal level that we used to have. So any particular issues for this slightly lower collection efficiency, is it pertaining to the particular locations if you would want to pinpoint where the collection efficiency is slightly lower than optimal levels? And a follow-up is whether you know, generally in Q4, we are able to pull-back 30 plus and even the NPLs by a significant extent. So can one expect that collection efficiencies and recovery will improve and hence that usual pullback will also play-out in this Q4?
P Balaji
So first of all, let me explain about the collection efficiency. If you look at the September quarter and this quarter collection efficiency has inched up a bit. I think it was 99.25 last quarter and it has become 99.35 now. That is actually resulting — resulted in Stage 2 assets slightly improving. So that is one thing which has helped us. And on the team, we are not seeing that we see the call,
Operator
Sir. Your audio is not clear. Could you come a little closer to the microphone, please?
P Balaji
Actually, I’m very close to the answer. Anyway.
Operator
So I’ll, I’ll disconnect and reconnect your line. Please stay online. Thank you for patiently holding. We have the line of the management reconnected. Hello, sir, please go-ahead.
P Balaji
Yeah. Is Rajiv on the line?
Rajiv Mehta
Yes, sir, I’m there.
P Balaji
Yeah, Rajiv, see, we were talking about this collection efficiency. If you look at the quarter, it has slightly improved as compared to the previous quarter. But of course, we should also bear this in mind, this quarter was slightly seasonal in nature. In November, Tamil Nadu was affected by floods in some parts. And of course, there were speed of holidays in October. Basically, both big festivals came in the same month. Usually it comes in different months. So because of that, some impact was there, but I’m not seeing on-ground problem in terms of collections. So definitely, like what you told, in the 4th-quarter, there will be good improvement both in the collection efficiency and also in the Stage II assets and of course in the NPA.
Rajiv Mehta
Got it. Got it, sir. And on this Tamil Naru, so now I think after seven, eight quarters, you’ve added branches in Tamila this time in this quarter. So then can one presume then with the issues related to team stability and we had some attrition issues there, are they all sorted-out and hence you are confident of adding branches now? And can one also expect acceleration in growth in this state?
P Balaji
Yes, that is what it is see, actually, whatever corrective actions we have taken have started to bear fruits and that is giving us confidence to open more branches. So that is why we opened three or four branches in the last quarter and this quarter we’ll be opening two branches. And next year, we are opening around six branches. So that is giving us a good confidence and we will be back to the growth path in Tamil Nadu as we have been saying, there is no problem in the market. It is basically our internal issue that has got sorted-out and our AUM has grown by 11% and as compared to the nine months of the previous year. So we can see more at least 15% growth in this quarter itself, I mean as compared to the previous year.
Rajiv Mehta
Just one last question, sir, on the write-offs. So I know that we have a certain write-off policy and — but the write-off quantum has gone up. So there was no deviation from policy, right? We have not taken any accelerated technical write-offs, right?
P Balaji
It is basically some of the assets reaching this 24 months NPA, correct. And that is why it has gone up. But we need to look at it from the recovery part. So that is our guess. Yeah.
Rajiv Mehta
But the recovery from write-offs are going well, recoveries from the written of pool are going well?
P Balaji
Yes, yes. If you look at the P&L account, I’ve told — I was written separately, record for the quarter is INR5 crores as compared to INR1 crore last quarter.
Rajiv Mehta
Okay. Okay.
P Balaji
That’s there in the presentation. It might not be there in the financials because it gets clubbed with other income. But that’s why this — to answer this query only, I have answered — I’ve clearly told in the presentation, as bad as recovered, I brought in a separate line there.
Rajiv Mehta
And can you quantify the written pool?
P Balaji
What is that?
Rajiv Mehta
The total written-off
P Balaji
Is around INR20 crores as of now. Yeah. That’s also technical write-off.
Rajiv Mehta
Yeah, yeah, technically look at it. Okay. Sir, that’s it. Thank you so much and best of luck.
P Balaji
Yeah. Thanks.
Operator
Thank you. The next question is from the line of Mona from Dolat Capital Markets. Please go-ahead.
Mona Khetan
Yeah, hi, sir. So couple of questions from my side. Firstly, on the OpEx base. So if you look at for nine months, the OpEx ratio cost to assets has come down to almost 10 bps versus last year. So with productive productivity coming in, do we expect cost-to-income settling at lower levels or this could be just a temporary lift?
P Balaji
No, our cost to assets is already at the lowest as compared to the other companies. Yeah. So we will be maintaining at these levels and I think we have been guiding around 2.7% and that will be the ratio that will be maintained. So this quarter, because of this salary — because disbursements were flat, the salary cost didn’t catch-up. So there can be increase in the salary cost in the next quarter. So to that extent, there will be an increase, but still ours will be the best OpEx to assets ratio in the company in the — as compared to others.
Mona Khetan
Got it. And I understand some of the recovery from write-offs are going to other income and therefore the reported credit cost of provision started at higher. So where-is our credit cost likely to settle at from a guidance perspective going-forward?
P Balaji
From the guidance perspective, we have been guiding 0.35% to 0.4% as credit cost that will continue.
Mona Khetan
Okay. Okay. So from a full-year perspective, while this quarter we have a slightly higher credit cost, it would still be around INR40 basis kind of numbers.
P Balaji
Yes.
Mona Khetan
Got it. And where-is our one plus VPD for this quarter and previous quarter if you could share slightly improved.
P Balaji
Earlier, it was at around 8. Now it has become 7.9 though it is not a — I mean, we have to improve a lot on that, but currently it is at 7.9%.
Mona Khetan
Got it. And just finally on the — on the distribution of insurance products, how much could it add to our other income on a monthly or quarterly basis as we move forward?
P Balaji
See, we have just received the corporate agency license now. We are still in talks with two or three insurance companies. So it will come — we’ll communicate this once this is getting finalized.
Mona Khetan
Got it, sir. Thank you so much. I’ll come back.
Operator
Thank you. The next question is from the line of Niharika from Anand Rathi. Please go-ahead.
Niharika
Hello, sir. I have just two primary questions. What proportion of your book is linked to the PMA by Yojina, if you could help us with that? And the second question would be, what kind of behavior are you seeing in the sub-10 lakh category of the book?
P Balaji
First of all, PMAY 2.0, this needs to stabilize a bit because the software from the government is also still not ready. We are in talks with NHB and then and then getting the software from the government stabilized and then only this can work fast. So we are still assessing that. And then maybe next quarter, we’ll be able to give a clear picture on how PMAY works for us. And the second-quarter, what is the pattern you are talking about less than 10 lakhs about the credit score or what is it that you want to know?
Niharika
Just what is the kind of behavior that you’re seeing in that part of the portfolio in terms of collections? How has the asset quality been there?
P Balaji
So if you look at our average ticket size, it is between INR8.5 lakh to INR lakhs across products. So everything is less than 10 lakhs and we are seeing good behavior in this category. If you look at our collection efficiencies, it is around 99.35% and our bounce ratios have also reduced and there are no collection issues as we have been telling. And it has been behaving well. The portfolio has been behaving well.
Niharika
Okay. And sir, just a follow-up question, what is the kind of growth rate that we’re expecting for FY ’26 in terms of the overall book?
P Balaji
See, we have been guiding disbursement growth of around 25% to 27% and loan book growth of 30% and we are very confident of maintaining that.
Niharika
Okay. Thank you, sir. Thank you so much for taking my question.
P Balaji
Yeah. Yeah.
Operator
Thank you. The next question is from the line of Kushant Parik from Morgan Stanley. Please go-ahead.
Kushan Parikh
Thanks for taking my questions. My question is largely around the insurance license that we have gotten. Essentially, we’ll be looking for both credit life as well as the health insurance? And also around that, if you could just provide some statistics in terms of how much credit life penetration do we have amongst our customers and what is the potential there? And also from an overall insurance penetration amongst our customers? I mean, just trying to understand the potential of this to accrue to the company.
P Balaji
See, we have received the corporate agency license now, but before that also, we had a tie-up with an insurance company for the credit life and the coverage is around 75% to 80% because we are not making it compulsory for the customers. We have given the option to the customers to take their credit life cover. But we explained the benefits of the credit life cover because if something happens, the loan amount gets covered. So based on that, the credit — the customer opts for this insurance and the conversion is around 80% there. And with the corporate agency coming in, we’ll be giving more options to the customer on the credit life and also the property insurance.
Kushan Parikh
Understood. Understood. And will we be doing health insurance as well from a distribution
P Balaji
To do any other product other than these two.
Kushan Parikh
. Okay. Understood. Thank you. That is my only question.
Operator
Thank you. The next question is from the line of Rajni Kant Shah, an Individual investor. Please go-ahead.
Rajnikant Shah
Yes, sir. Thank you for the opportunity. I just wanted to ask a little medium-term question from a three-year perspective, say, financial year ’28. So how much confident we are to achieve 7% plus ROA while we achieved INR25,000 crores AUM as guided in financial year ’28 and if we are confident, what range of ROE can we expect?
P Balaji
No, if you look at it, see, if I go — if I’m going to reach a INR25,000 crores loan book, obviously, the ROE cannot be at 7% because the leverage is going to come in because we have a capital adequacy ratio and a low leverage, we have a high capital adequacy ratio. With the result, we will not come into the market for any equity raise. So that borrowings will be the sourcing thing for the purpose of growth that we are contemplating up to FY 2028. So what does that mean? So this 7.7% ROE will maybe fall down to 6% or 6.5% at that point in time. But the 18.5% ROE will — is likely to go beyond 22% at that point in time. So this is the broad path with which we’ll be growing. And I think we’ll be going this way.
Kushan Parikh
Yeah. Yeah, yeah. Fair enough. That was very useful.
Operator
Thank you. The next question is from the line of Nidhesh Jain from Investec. Please go-ahead.
Nidhesh Jain
Thanks for the opportunity, sir. Hi, sirai. Sir, two questions. First is on this quarter, we have seen a slightly better growth in the SBL segment. SBL has grown faster than our overall AUM growth. So do you expect this trend to continue? And have you made any changes in the SBL business?
P Balaji
No, if you look at — I would like to answer it from the product mix point-of-view. If you look at the — is that December ’24 product mix, HL is 61% and Quasai home loan is 14% and small-business loan is around 21%. This was 15% Quasai home loan in September and 20% in the Quasi small-business loan. So actually speaking, there is not much difference in the mix. So this mix will be continued. If you look at the housing loan — HFC composition, we are moving towards more housing loans. Earlier it was 70% that has become 72% now. So this broadly will be the mix that will be maintained. So maybe in 1/4 small-business loan might be high, but in second-quarter will be high. But broadly this mix of 61%, 14% and 21% will be maintained.
Nidhesh Jain
Okay, sir. Second question on the insurance side, sir. So as of now, what sort of commission that we were getting on these on the insurance policy that we are setting?
P Balaji
And we’ll talk about it later. Basically I’ll call you again.
Nidhesh Jain
Okay. And last is on the AUM per branch. So you’ve shared AUM per branch for three year-plus vintage branches. Can you share the same number for five-year plus vintage branches? I want to understand as the branch vintage increases,
P Balaji
Should be around INR65 crores and about INR65 crores to INR70 crores,
Nidhesh Jain
INR5 crores. Yeah. Okay. Okay. Yeah, sure. Thank you, sir. That’s it from my side.
P Balaji
Thanks,. Yeah.
Operator
Thank you. A reminder to all participants, you may press star in one to ask a question. The next question is from the line of Rajiv Mehta from YES Securities. Please go-ahead.
Rajiv Mehta
Yeah, sir, thank you for a follow-up. I just need what is the incremental you know rate for home loans are blended for Q3, what was it? And how do you see the incremental trends in funding costs in-going into 4Q and maybe Q1 of next year and whether can we maintain spreads at the current level in the next two quarters?
P Balaji
If you look at it, that the incremental rates on the housing loan, we have not changed any rates. So the rates are between 14.5% to 15.5 on the home loans. So that is what it is getting maintained. So now we are talking about the cost of funds. The cost of funds for the housing finance company is ranging between 8.5% to 8.7%, which is the same as the last quarter. So we are not seeing much increase. But on the NBFC, we have seen a slight increase from 9% to say 9.1% or so. And this is likely to continue in the 4th-quarter as well. But we don’t know if the rate cuts is going to happen, then my 23% of my borrowings will get repriced immediately. To that extent, there can be some good news on the spreads, but if you look — if the rate cut doesn’t come, there can be a 0.1% decrease in the NIM because of the increase in the interest-rate.
Rajiv Mehta
Yeah, thank you.
Operator
Thank you. The next question is from the line of Siraj Khan, an Individual investor. Please go-ahead.
Siraj Khan
Hello. Am I audible?
Rajiv Mehta
Yes, yes.
Siraj Khan
Thank you for the opportunity. So sir, first question is on the spread and the AUM and the yield. So we are starting to grow in the state of Orissa and Maharashtra. Orissa being — Maharashtra being very highly penetrated and the competition is also there. So my question is, can the yield come down because we’ll be facing more competition? And as that book will start to grow, so will the yield come down and therefore spreads?
P Balaji
No, I don’t think that will happen because when we ventured into Telangana and Andhra Pradesh, at that time also the competition was there and we were able to get these rates of 15.5% or 14.5% to 15.5% on the HL and around 17% to 18% on the Quasai home loan and also 21% on the small-business loans. So we are not seeing that kind of pressures even in the branches which we have opened as of now. So we are — I don’t think that will happen. If it comes to that level, we might have to revisit at that point in time. But as of now, we are not seeing that kind of pressures.
Siraj Khan
Yes. Okay. Okay. Thank you. And also with respect to the branch expansion, so do not catch how many branches we’ll be opening specifically in the state of Maharashtra?
P Balaji
Another 10 branches is being planned both in the states of Maharashtra and in the next year.
Siraj Khan
Okay. And a related question is actually since we like we are very — we are having a lot of opportunities in the southern states of AP Telangana, Andhra Pradesh has grown very fast at FY ’21, the book has more than quadrupled. So is there still juice left in these states or will the new states or perform at the same levels? I want to understand that.
P Balaji
No, actually, we have just the tip of the iceberg in terms of the market size. So still the market opportunity is there in the states already we are operating in, plus the new states. So the growth for the next few years will come like this. First is we — the business from the new branches in new states, business from the existing branches in the existing states, then increase in productivity of people at the branches, say, if people are logging in four files per month per sales officer if that can be increased to five. Similarly, having optimum number of people at the branches. Suppose if the budgeted level of staff strength in a particular branch is five and they have only four, we’ll be employing one more who will contribute to the growth. So all this — and of course, one more thing is the increase in the ATS without having on the — without any problem on the installment income and the LTV. So suppose if the current eight years is around INR8.5 lakhs, if you increase it to 9.5 lakhs, then that growth will come from that as well. So all this will contribute to this growth guidance of around 30% on the AUM for the next three, four years.
Siraj Khan
Understood. Thank you for the great answer. And just one last clarification. You had said that there was INR20 crore write-off in the pool, yes. Yeah. And there was another INR6 crore — I was just confused. So there was a INR6 crore technical write-off also. I was just not able to understand that now.
P Balaji
INR20 crore is the total value of the write-off over the years.
Siraj Khan
Okay.
P Balaji
INR5 crores the write-off for the quarter.
Siraj Khan
Yeah crores the write-off of Q3 or nine months?
P Balaji
This is for the INR6 crores for the three months.
Siraj Khan
Okay. Okay. Understood. Thank you, sir.
P Balaji
Nine months is — sir, as of date, it is INR20 crores, sir.
Siraj Khan
Okay. Thank you. Thank you, sir.
Operator
Thank you. The next question is from the line of Jaysh Shah from OHM Portfolio Equity Research. Please go-ahead.
Jayesh Shah
Hello. Thanks for the opportunity. Sir, I just had one question given our spreads and the yields, how does the regulator look at it because there was some concern by the previous RBI governor that the rates are very-high that are being charged by various NBFCs. Now, of course, we have the new regulator, but how would you comment on this? Or have you seen any question from the regulator on the overall yields?
P Balaji
Yeah. Let me understand — let me explain this. See, if you look at the FY ’24 year, the inspection by both NHB and RBI has got completed and they have not raised any query on the interest rates that is being charged. So we are getting an impression that what we are charging is not very-high. Then the second thing is we have also done an interfirm comparison of all the NBFCs and HFCs. We are in-line or less than what other people are charging. So to that extent, we are not seeing any inputs or comments from RBI on reducing the interest rates which is being charged by us.
Jayesh Shah
Okay. Thank you, sir. That’s all. Thank you very much and best questions.
Operator
Thank you. The next question is from the line of Nishint Chawathe from Kotak Institutional Equities. Please go-ahead.
Nischint Chawathe
Yeah. Thanks for taking my question. It’s essentially on your medium-term growth target. Just curious that when you’re looking at such a larger book, will the product mix be similar? Are you going to have such larger proportion of fixed-rate loans? And in that case, how would you sort of manage the liability side of the balance sheet? I think as what we can see is that as your balance sheet keeps on growing, the overall share of fixed-rate borrowings does keep on coming down. So if you’re going to have a similar — similar ratio of fixed versus floating, probably you might have some kind of a mismatch a few years down the line.
P Balaji
See, that I would like to answer by way of the leverage, see, if you look at the leverage, which is very low, even if I have to grow to INR25,000 crores, the leverage is going to be 3 or 4 times only. So to that extent, the interest rates the interest-rate risk can be handled. And we’ve — I mean it is not that first of all, it is not that we don’t want to give a variable-rate of interest to our customers. It is basically the fixed — the requirement of fixed-rate is coming from our customer requirement, stating that they don’t want any change in the EMI or in the tenure of the loans. So that is the reason why we are giving this fixed. But based on the leverage, I think we are better-off managing this fixed-rate of interest going-forward.
Nischint Chawathe
Got it. So basically, it’s the leverage that gives you comfort and if there is any kind of a swing, you’ll absorb it. But broadly what we are trying to say is that the loan book composition and the step-down structure, I think those things will remain as they are.
M. Anandan
Yes, yes.
P Balaji
Yes non-home loans anyway, it is fixed by other players also now
Nischint Chawathe
Got it, got it. Got it. And is there any commentary on the growth trajectory that you’re looking at in each of the companies from the regulators.
P Balaji
No, if you look at — I would like to comment on a consolidated basis, this 30% will be there. And the product mix, which we explained earlier, that will also continue because in the NBFC, the loan book itself is only INR2,600 crores. So obviously, the growth — even if I grow by INR1,000 crores, the percentage will be high. So we cannot — we cannot benchmark based on that rate, right? So it will be based on the mix and also the overall guidance of 30% AUM for the next three, four years.
Nischint Chawathe
Got it. But just curious, last one, just curious, do you really need a step-down subsidiary now? I think you’re managing the 60% ratio on a consol basis anyway, right? So would you want to continue with the structure?
P Balaji
Flexibility, right? It is not — I mean, we were lucky enough to get the license from RBI on the NBFC. We would like to have this as a — we would like to continue with the NBFC, but this is also giving us product diversification and income stream diversification. So we would like to definitely continue with this with clear demarcation of products which gets booked in HFC and also which is getting booked in the NBFC. And there are no common customers between the NBFC and the HFC. So there is actually no overlap. All the customers are unique. And going-forward, we’ll have a separate structure for NBFC with the business ahead and credit and branches also will be having a separate in itself.
Nischint Chawathe
But eventually, if you have to collapse structure, is there any part of the business that can be — cannot be done in the HFC or anything of that sort.
P Balaji
See, basically the small-business loans, see, if you have an NBFC structure, the small-business loans, we find that the market for the small-business loans is also huge. And because of this 60% on the total asset criteria, it restricts our ability to do the small-business loans. By way of having an NBFC, I don’t have that constraint. So to that extent, if the NBFC has been useful to us and we’ll be booking small-business loans in that.
Nischint Chawathe
Got it. Just a clarification today, even on a consol basis, you are at 61%, right? So today,
P Balaji
31% is on the loan book, yeah.
Nischint Chawathe
And on an AUM basis?
P Balaji
No, no. If you look at the total assets, it will be different, no, because the cash balance and everything gets included.
Nischint Chawathe
Okay, got it. Got it. On the loan book basis, you are at 61, but if you got it. Got it. Yeah, got it. Perfect. Thank you very much.
Operator
Thank you. The next question is from the line of Kushant Parik from Morgan Stanley. Please go-ahead.
Kushan Parikh
Thanks for taking my question again. Just a couple of datakeeping questions. On the asset quality front, just wanted to understand what would be the end losses or LGD that you would have from the written-off pool essentially? And secondly, another datakeeping question that I want to understand was the BT out rate that we had. And if you could just give some color around the BT out part? Yeah.
P Balaji
See, first of all, if you look at the ultimate loss, the loss given default, since our LTV is between 40% to 45%, the principal write-off is absolutely nil or maybe it will be very, very minimal. That is the first thing. See, what will happen in a housing finance company, if a customer is not there or if a property is not there, then we might be forced to write it off. But in our case, the customer and the customer and the property is there and because of that, we are able to recover the money because this is the first time house owners. So they are living in that house. So the moral responsibility to pay-back the loan is very-high in these customers. So we are able to get the money back. So ultimate loss to that extent will be very less and that is what is the loss given default, okay. That is — this is similar in terms of SBL also because that is also a secured product secured by self-occupied residential property. So the loss given default is almost nil as for all the products which we are in.
Then the next level — next question on the BT out, it is around 2.5%. See, what happens is our pre-closures is around 7.7% to 8% on the average loan book. Of that, almost 4% to 5% gets pre-closed out of own source of the customers. Normally, these kind of customers because of their business, so because of their business, they get cash flows — bulk cash flows and when they receive these bulk cash flows, this — what they do is to settle the loans settle the housing loan first. So that is why the BT out is less and it is around 2.5% for us.
Kushan Parikh
Got it. Just a couple of follow-up questions. So on the BT out one, first, with the — with a scenario of a rate cuts, do you envisage the BT out rate to inch up for us as given we are a fixed-rate borrower — sorry, fixed-rate lender? And the second question is around the LGD. So I mean, I understand that on the principal side, given the low LTV, the LGD would be little, but what would be the IRR on such loans?
P Balaji
See, we are not writing-off any principal or interest. We will be waving off some of the charges when these NPAs are getting settled, which normally we accrue on cash basis. So, yeah. So we don’t — so actually the IRR will be the same as the contracted rate except for the delay in the payment. So that is the only thing.
Kushan Parikh
I understood. And on the?
P Balaji
No, I didn’t understand that question. Can you…
Kushan Parikh
Sorry, I’m trying to understand that in a rate cut scenario where the floating-rate peers would largely be cutting their lending rates, do we see this BT out rate increasing from the 2.5% going-forward or how will we manage this?
P Balaji
This is — if we have been operating for this company for the last 15 years, the rate cycles both high and low has always already been experienced by us and this BTOut rate is around 2.5% consistently right from the beginning. So we are not seeing that kind of an increase. But if — because of the rate cut, if it is going to increase, if the BT out is going to increase, we’ll have to do more business. So that’s how we need to look at it.
Kushan Parikh
Understood. This is helpful. Thank you.
Operator
The next question. Thank you. The next question is from the line of Siraj Khan, an Individual Investor. Please go-ahead.
Siraj Khan
Hello. Thank you for the follow-up. So sir, my question was with respect to the yield difference. The HL business and the non-HL business, what is the difference between the yields of the two?
P Balaji
Yeah. No, I didn’t understand what was the question.
Siraj Khan
What’s the average interest-rate on non-housing loans see, if the house —
P Balaji
We have three products. One is the housing loan, we charge between 14.5% to 15.5%. We have this Quasai home loan, we charge between 17% to 18%. We have the small-business loans we charge between 20% to 21%.
Siraj Khan
Okay, okay. And sir, the average ticket size of each of — each of these segments
P Balaji
The average ticket size is around 8.5 lakh to INR9 lakhs on the both Quasai home loan and the housing loan. This one is around INR7.5 lakhs.
Siraj Khan
SBL.
P Balaji
Both, but SBL is around INR7.5 lakhs. It is 8.5 lakh to 9 lakhs on the housing loans and the home loans.
Siraj Khan
Understood, understood. And on — again, to come back on the geographical expansion, sir, why are we not — because we are so overcapitalized and why are we not going because we have now spent a good amount of time in Maharashtra, approximately closing all three years now. So why are we are not increasing the number of branches at a faster rate in these states? And in Karad and Maharash, we have seen…
P Balaji
First of all, once again, let me explain. Maharashtra, we have been there lonely in the last nine months. The first branch was opened sometime last March. Yeah. So we have been there only in — only for the last nine, 10 months, okay. So we are having great expectations from Maharashtra and the business is also doing well. We will be opening more branches, but it will be a slow and steady progress. It will not be like I’ll open 100 branches in Maharashtra.
Siraj Khan
No, no, not 100, but like…
P Balaji
No, I mean, I think that’s only at. No, no. First of all, it’s only nine months over. We have opened 10 branches, okay. So it will be — it will be like that.
Siraj Khan
And in Karnataka, despite the issue, which I was also seeing for other companies, did we face that and issue in also?
P Balaji
It is across companies we have this ICATA issue, but we are more in the peripherals, not in the city. So to that extent, this issue is minimized. And of course, what we tell our customers is because of, what is happening is there is a delay in the disbursements. Suppose if the disbursement turnaround time for us is seven days, in Karna Data, it will become 15 days. So what we are telling the customer is plan well in advance to get the and then come to us for a loan and then we give the RTGS disbursement immediately. So that is how we are handling this and we are seeing good results in the Karnataka disbursements.
Siraj Khan
Okay. And final statistical question, sir, what is our locked into sanction ratio and in percentage and in number of days and sanctioned reimbursement?
P Balaji
If 100 files gets locked-in 85 gets sanctioned.
Siraj Khan
85 gets sanctioned 85%. Sanction to disbursement
P Balaji
Sanctioned disbursement will be around from 85% 80% gets disbursed
Siraj Khan
Of the 85%, 80% will get disbursed. Okay. And the days in number of days so from login to the disbursement, the approximate number.
P Balaji
Log-in to sanction is around one to two days. Sorry, sanction to login is around one to two days. Days and sanction to disbursement takes around seven to eight days because the legal legal documents needs to be vetted, so that takes a little bit of time to discuss.
Siraj Khan
Thank you, sir. That was very helpful.
P Balaji
Yeah.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing comments.
M. Anandan
Yeah thank you, Mana, and for organize this conference call. I would like to pay my sincere gratitude to all the analysts and investor who have taken time to present us today. Please feel free-to contact with us in case you have any further queries. Thank you.
Operator
Thank you, ladies and gentlemen. On behalf of Dolat Capital Markets Private Limited, that concludes this conference. You may now disconnect your lines.