Fedbank Financial Services Ltd (NSE: FEDFINA) Q4 2026 Earnings Call dated Apr. 28, 2026
Corporate Participants:
Lokesh Kumar Parikh — Head, Investor Relations
Parvez Mulla — Managing Director and Chief Executive Officer
C.V. Ganesh — Chief Financial Officer
Jagadeesh Janardanan — Chief Marketing Officer and Chief Business Officer, Gold Loan
Analysts:
Shreepal Doshi — Analyst
Digant Haria — Analyst
Meghna Luthra — Analyst
Chintan Vora — Analyst
Divyanshu Raj — Analyst
Aravind Ravichandran — Analyst
Rahul Kumar — Analyst
Aditya Khandelwal — Analyst
Presentation:
Operator
Ladies and gentlemen. Good day and welcome to Fed Bank Financial Services Q4 and FY26 earning conference call hosted by Equity Securities. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask question after the presentation. Conclude. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Shreepal Doshi from Equirus Securities. Thank you. And over to you sir.
Shreepal Doshi — Analyst
Thank you. Danish. Good evening everyone. We welcome you to the earnings conference call of Fed Bank Financial Services to discuss the Q4 and FY26 performance of the company. Today we have the entire senior management of the company represented by Mr. Parvez Mulla, MBN CEO Mr. C.V. Ganesh, CFO Mr. Jagdish Dao, CBO Gold Loans. Mr. Shardul Kadam, CBO SCLAB Mr. K. Suresh, CBO Medium Ticket Lab. Mr. Vikram Rathi, Chief Risk Officer and Mr. Lokesh Kumar Parikh, Head IR. I would now like to hand over the call to Mr.
Lokesh. Over to you Lokesh.
Lokesh Kumar Parikh — Head, Investor Relations
Thank you Shifal. Good evening everyone. I would like to welcome all of you for joining our Q4FY26 results earning call. Before we start, I would like to highlight that some of the statements made on this call may be forward looking in nature including those related to our financial performance, business strategy and growth plans. These are based on our current expectations and are subject to risks and uncertainties including broader macroeconomic conditions. These statements reflect our views as of today and may evolve with changing business and market dynamics.
With this note, I now hand over the conference to our MD Mr. Pavit Mullah for his opening comments. Thank you. And over to you sir.
Parvez Mulla — Managing Director and Chief Executive Officer
Thank you, Lokesh. Good evening everyone. I would like to extend a warm welcome to all of you for joining the Q4 FY26 post results earning Call. At the beginning of the year we had listed our priorities as follows. 1. Conserve and allocate capital to businesses with high ROA and ROE. Focus on our twin engine strategy of gold and LAT businesses. Third, to move towards a fully secured lending portfolio. Fourth, expand gold business through branch expansion and increase doorstep coverage. 5. Continue to foster synergies between our gold and LAP operations.
6. Within LAP we will concentrate on a combination of high yield small ticket lamp business and the low risk medium ticket lap business. 7. Expand medium ticket lab with minimal capital allocation. 8. Establish leadership in our STLAB team and build a team for growth and quality. We had promised you that FY26 will be a rebuild year focusing on correcting our credit cost. 9. Continue strengthening our collection infrastructure to effectively manage the delinquencies which had risen in FY25. 10. Aim for increased core income while reducing reliance on DA income.
Use DA as a capital allocation strategy rather than an income generating strategy. 11. Move towards a frugal cost structure and 12 ensure that the credit cost remains 1% and below. These were our promises at the start of the year and against that Our year as well as quarter has performed as follows. On the business front we have experienced a good year with disbursals increasing by 67% to 31,410 crores from from 18,788 crores primarily due to the rise in our gold business. When excluding business loans which we exited in first quarter, our disbursals have grown by 75%.
On the AUM front we have grown 27% with our AUM touching 20,000 crores in Q4 this year. This financial year we have added 4,342 crores to our AUM. When excluding BL, we have observed an increase in AUM of 41%. Gold disbursals for the quarter reached 10,744 crores compared to 7,853 crores in Q3 FY26 and 4,580 crores in Q4 of the previous year indicating a growth of 37% and 135% respectively. We have added 2,447 crores of growth to gold AUM. This quarter the gold business surpassed 10,000 crores increasing 70% YoY and tonnage has grown by 12% YoY to 12.6 tonnes.
Our doorstep gold loan business continues to perform with an AUM increasing by 108% YoY to 1,730 crores. As promised, we have opened 34 new Gold branches this quarter bringing our total to 148 new branches this year and we will continue to expand our branches in FY27 too. Despite opening 148 new branches, our AUM per branch has reached 16.5 crores reflecting an increase of 4.4 crores per branch during this year. Our LTVs on AUM stand at 60.9% portfolio level LTV’s. In our collaborative initiative involving gold and STLAB business we have successfully further merged additional seven branches taking the total to 70 branches this year.
That means 70 branches of small ticket lab business have relocated into the premises of 70 Gold branches thereby releasing the STLAB premises. These Vyapar branches will provide both gold loan business as well as lab business to our customers. At the beginning of the year our capital adequacy ratio stood at 21.9. Now it has increased to 22.4. The measures we have implemented in FY26 to conserve and efficiently use capital are as follows. First, we 100% assigned our business loan portfolio of rupees 886 crores which was executed and de recognized from our AUM.
In addition to improving capital efficiency, it also ring fenced us from further deterioration in the unsecured retail lending market. Secondly, a total of 1,694 crores in direct assignment transactions were executed through the quarter. Releasing capital gold co lending book increased 1131 crores to 2127 crores and rupees 450 crores in subordinate debt was raised in this quarter. These measures will enable us to continue our growth story in FY27. As previously stated, the complete allocation of 886 crores of business loan portfolio in the first and second quarters of FY26 this year now ensures that we maintain a secured on book ratio exceeding 99.5%.
In line with our priority of increasing core income and decreasing DA income, the Net income from DA has increased by 89%, decreased by 89% to 7 crores for FY26 compared to 66 crore for the same period last year. We had promised you that we will not rely on DA income for the PBT. Nevertheless, our operating profit has risen by 11%. If we had sustained a similar kind of DA income, the operating profit would have reflected a growth of 22 or 23%. The MT Lab business has demonstrated stability over the course of the year, disbursing a total of 2,180 crores while sustaining its yields in Q4.
The MT Lab business has disbursed 632 crores reflecting a 16% increase quarter on quarter. Throughout the last two years the company has encountered rising credit costs in the STLAB segment prompting the ORG to strengthen its credit policies and shift towards a system driven BRE. The STLAB business has disbursed 912 crores by during this financial year and 289 crores in Q4 reflecting a 39% increase quarter on quarter in Q3. In this business we have moved Shardul Kadam our CRO as the CBO and SP lab business over FY26 we have hired senior leadership team and stabilized the product.
We are seeing improvements in sourcing quality this year. We expect that to continue as we grow collections. Senior leadership has been onboarded, field team has been strengthened, the collection framework has been verticalized, additional personnel have been recruited. Call center legal and recovery teams. At the end of 26 we have almost 2x the collection personnel that we started with for shoring up collection within the STLAB segment and increasing the PCR in Q3 FY25 along with exiting the deep bucket NPS through that ARC sale in Q1 and the work that we have done in Q2 and Q3 we have limited our credit cost for the year at 0.8% and for Q4 at 0.7%.
We have raised about $250 million in ECB till date. Finally, the key numbers are as follows. In business the AUM reached 20,153 crores translating to a growth of 27%. Excluding BL it is about 41%. YoY Gold reached 10,000 crores 3 10,300 352 crores an AUM growth of 76% substantiated by a tonnage growth of 12%. Mortgage AUM reached 9362 crores and AUM growth of 16%. Disbursals of 11,664 crores in Q4FY26 up 109%. On the profitability and asset quality side, the net interest income for Q4 grew 23.1% and for FY26 it grew by 14.8%.
Operating profit for Q4 grew 24% YoY to 162 crores and for FY26 grew 10.8% YoY to 576.3 crores. Our credit cost for Q4 stands at 0.7% and for FY26 it stands at 0.8%. Our net profit stood at Rupees 100.5 crores in Q4 FY26 and for FY26 it is Rupees 343.6 crores. The gross stage 3 stands at 1.9% versus 2.1% Q on Q and 2% YoY. With that I will now hand over to our CFO Mr. CV Ganesh to take you through the numbers.
C.V. Ganesh — Chief Financial Officer
Yeah thank you Parvet. Thanks everyone for your participation on the call. I will add to what has been covered this far. So I will start with six numbers. VAT of hundred crores 750 plus branches 10,000 crores plus of gold loan AUM 20,000 crores plus of entity AUM 2.6% ROA 14% ROE so these six numbers sum up the quarter. First on the AUM growth we have had a strong aum Growth in Q4 ex BL our AUM grew 15.8% sequentially quarter on quarter. This was led by a 31% sequential growth quarter on quarter in the gold looms.
Just to amplify that with Numbers, in the first nine months of the year our AUM X unsecured business loans grew about 3000 crores. Against that in the three month period of Q4 our AUM grew 2,700 odd crores. Now what this means is that if we exclude the roughly 900 crores of the unsecured book we sold during the year, the secured book has grown a little under 5,800 crores, a growth of approximately 41% year on year. Within this our gold loan AUM has grown 76% year on year. While this has had tailwinds of gold price growth in FY26.
But we have also been able to demonstrate a tonnage growth of 12.25% during the year. So while gold has been the primary driver, this underlines our twin engine strategy in a year where MSME lending has had headwinds as well as this buttresses our conviction in Investing in the 148 new branches, most of which have turned the corner on profitability within the year itself. Second, on yields and cost of borrowing, our yields reduced 12 year on year due to a never before growth in the gold loan book.
When you grow so much obviously there is going to be some impact on yield. Also the back ended nature of the growth resulted in the average yield optically showing a drop of about 28 bits. Our weighted average cost of borrowing was marginally lower in the quarter by 4bps. However, with the leverage increasing to 4.6 in Q4 in the ROA tree you will see interest expenses optically going up by 10 bits. On the interest rate outlook we saw cost of borrowing hardening post February as well as hedge rates on our foreign currency borrowing going up materially with the current geopolitical situation, we remain cautious in terms of outlook.
What did we do? We banked upon liquidity in the quarter to counter volatility caused by the geopolitical situation in the Gulf. While it has optically increased finance cost and optically reduced the net interest income for the quarter, it gives us a hedge against the uncertainty and interest rate volatility in Q1 on asset quality. Asset quality improved quarter on quarter with entity 1 bpd improving to 6% from 7.1% in December and entity 30% dpd improving by 70 bps and entity 60 plus dpd improving by 50 bps over the last quarter.
This is driven primarily by an improvement in the mortgage delinquencies which have improved materially as we have executed moving away from agency led collections to in house collections. GNPA has also declined 20bps quarter on quarter to 1.9% from 2.1 and the net NPA has declined 10bps to 1.3% quarter on quarter. We have been able to hold our PCR flat at about 32.3% now on the profit and return metrics. PAT was up 14.4% sequentially quarter on quarter and 40% year on year boosted by the incremental interest income from the asset growth and lower credit costs.
We crossed the psychological milestone of 100 crore of PAT. This was an important base camp for us in our onward journey from a year of repair. We are cautiously optimistic of an upward journey from here. Our P POP for the quarter came in at 162 crores, an increase of 24% year on year and 9% quarter on quarter. PPOP for the year came in at 576 crore, an increase of about 11% year on year. However, as articulated earlier, if you exclude the DA income of last year which we have consciously dialed down, the core PPOP is up 22% year on year on a full year basis.
The improved delinquencies resulted in credit cost decreasing 10% quarter on quarter, 14% year on year to 0.7% as a percentage of average total assets on a full year basis. Credit cost as a percentage of average total assets is down from 1.7% in FY25 to 0.8% in FY26. Our operating leverage is playing out slowly but surely. OPEX as a percentage of average total assets reduced to 5.5% from 5.9% a year ago and 5.7% in Q3, giving us some green shoots on economies of scale playing out on the expanding balance sheet on a full year basis, FY26 has seen a 20bps drop in opex to average total assets over FY25 as a whole.
The ROA also continued its onward climb at 2.6% up from 2.5% in Q3 and 2.2% a year ago. Our ROE also broke into the teens at 14%. Now on capital adequacy, a 40% growth in AUM depletes capital adequacy and has resulted in a leverage increasing to 4.6 upfront 4 in December 25th. In the beginning of the year we had consciously divested our lower ROA unsecured business to release capital for the onboard client in the secured business. In Q4 we have raised a subordinated debt of 450 crores which has supplemented our capital adequacy by 3%.
Consequently, in spite of the healthy asset growth, Our CRAR at 22.4% as of March is up from 20.5% in Q3. This gives us ample headroom for growth in the coming year. As the numbers over the last four quarters of this year show, we have attempted to build resilience and consistency in terms of asset quality, credit cost and an upward linear trajectory in return metrics. We are deeply grateful for your support in this exercise. With that, I now hand it over to the floor for questions and answers.
Questions and Answers:
Operator
Thank you so much sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question, press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are request to use handsets only while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question comes from the line of Digant Harya from Greenish Wealth. Please go ahead.
Digant Haria
Yeah, hi. Thank you for the opportunity and congratulations for the century. It’s the first time you’ve crossed the 100 crore mark and you know, given that the back end nature of growth and what Ganeshi mentioned that we have built in some liquidity just for a rainy day in the coming quarter. So I think this century will probably remain our base. So congratulations on that. My question, I have two questions only one is on gold loans like you know Parvezi, you mentioned that second half is generally heavy for us and it was exactly like that.
The question here is that you know we have had such strong growth but you know only one thing is that the yields have probably been a Little softer in the last two quarters. So I just wanted to know the growth strategy. Like, you know, is it in the new branches? Just to ensure that we reach break even, we are giving discount schemes in the initial days and you know, like what are we doing on the growth front? Like, you know, the top ups versus new customers versus, you know, other things. If you can just highlight the color of growth.
Parvez Mulla
Yeah. Thank you so much. Thank you for remembering that we had said that we will grow in Q3 and Q4 differently from what we did in Q1 and Q2 because that’s the way our seasonality plays out. Also, if you remember I had spoken about tonnage growth. You’ve seen the kind of tonnage growth that we have delivered. YoY, it’s a 12% tonnage growth and we are very conscious of that tonnage growth. As far as yields are concerned, there are two factors which are playing in here. So if you take about 30bps here and there, which you are comparing, I would break it into two parts.
There could be five to ten bps which we could have done on the yield front. But the balance is because of the back ending of the dispersals. When you have such a large number of disbursals which are happening in the last quarter and there is a back end, that is the effect. So the yield effect is hardly 10bps. And I think Q1 will, that we will cover back. When you are playing in a market which is competitive and when you are pressing the pedal for Q4 and when you are trying to get the tonnage growth, 10bps here and there is okay because we cover it in Q1.
Digant Haria
Right. So it’s only 10 dips. You know, I just thought, you know, the yields at origination like, you know, I understand that, you know, optically, you know, the reported deals may not, you know, reflect because of the back ended nature. But at origination, have we seen any meaningful pressure on the yield and is it because maybe we are doing slightly larger ticket sizes or. There is absolutely nothing like that and the yields at origination still remain healthy.
Parvez Mulla
Yeah. So in the quarter four there tends to be that tendency to play with the origination yield in the sense of different geographical markets. We do that. But overall level it’s steady. What we did in last quarter, that is exactly last Q4, FY25, we did exactly the same thing in FY26. It’s a seasonality play. You will see us Q1 back to the same pockets. The competition pressure that you are talking about is yet to Play out is the way I would put it. The competition yet to get those branches in the spaces that we are operating.
And we are yet to see that pressure play out, although it might. But it has not yet played out. And that is not what has happened. This is unprecedented dispersals and I think we are, we are in the same zone where we wanted us to be.
Digant Haria
Perfect, perfect, perfect. Great for that detail. Second question is that, you know, now you know we have this new guideline of 75% LTV across the life of the loan. So just internally, like you know, what are the process level changes we have done? Because you know, if we don’t do any changes in optically, the NPAs might go up because some customers may just go higher than 75 and you know, so there is no credit cost risk at all. But still, you know, optically the NPAs in the coming quarters or the industry might go up because of this guideline thing.
So, you know, how have we as Fed cena, you know, decided to tackle this or, you know, any insight? Yeah,
Parvez Mulla
So I will see these guidelines have come effective this April. There are two sets of guidelines. The guideline that you are talking about that we have to maintain 75% across the loan, that was an earlier guideline. The revision and guideline which will happen from April 26, we are executing it and I will request Jagdish to elaborate it for you. He will give you all the details that we are doing and how we are de risking what we need to do on the operations side.
Jagadeesh Janardanan
So this margin breach has nothing to do with the delinquencies of the book? Yeah, so that is the first point. And on the margin breach regime, last year we were following 75% regime. Now it is changed to 85% for exposure up to 2.5 lakhs and 80% for exposure up to 5 lakhs. And anything above 5 lakhs it is 75%. So there is room given by the regulator for playing on the LTV. While 90% of the book is less than 75% for Fedfina, we don’t see any impact coming out. And like I said, margin breach, even if there is a margin breach, there is no need of any provisioning or no need of treating it as a delinquent book other than initiating for margin collections with the customer.
Digant Haria
Okay, so it won’t impact the NPF recognition. That’s very good to know, sir.
Jagadeesh Janardanan
No impact, no impact.
Digant Haria
No, no, no. Perfect. That is very helpful. Last question is on, you know, the small lab piece. I See that, you know, we have recruited some really good people on the collection side. So you know, maybe this year we have built the collection team. So, you know, like do we have a little more confidence than last year that you know, FY27, you know, this portfolio may actually grow and you know, deliver maybe positive kind of roas also?
Parvez Mulla
Yes, definitely. I am much more confident than what I was one year ago when we were giving you a guidance that there will be a GNPA number which will increase and we will hold the credit cost. Definitely the collection efficiencies have improved. What we have also changed is the STLAB business had a percentage of collections happening through agencies. We have now moved it to our own people. Our own people have joined us last year and now have spent about three to six months vintage started giving us results.
So definitely we are positive on the STLAB business in terms of the past GNPAs also. And we are also confident about the new book that we have written in the last one and a half years. So I think that piece definitely we are confident about what we are now working on is picking up the growth story. You would see that last year we were hovering around 200 crores. March definitely is a good momentum quarter for everybody. So we did clock 290 crores. But definitely that is where we are working on to pick up the business.
Even on the business front we have hired new people who come in last year and the productivity will start jumping up there too. Although we are taking it under the new credit bre that we have done so it will pick up steadily and we are happy with that.
Digant Haria
Okay. Okay, perfect. Thank you. Thank you everyone for this detailed answer. Thank you and all the best.
Parvez Mulla
Thank you. Thank you.
Operator
Thank you ladies and gentlemen. Anyone who wishes to ask a question, press star and 1. Our next question comes from the line of Meghna Luthra from Incred Equities. Please go ahead.
Meghna Luthra
Hi sir. Thank you for giving me the opportunity and congratulations on a good set of numbers. There are a few questions. One is since our average ticket size and gold loans is, you know, around the 2.7 lakh mark, how has the new KYC rule impacted disbursements? Has it impacted disbursements at all?
Jagadeesh Janardanan
There was no such, no any KYC rule as far as we know can be more specific.
Meghna Luthra
I understanding is that loans above 2.5 lakh have to go through a KYC and most likely the, the, you know, the customers who are coming for a gold loan do not prefer going through, you know, KYC say On the civil or based on the card and other details.
Jagadeesh Janardanan
This is actually with effect from 1st of April 2026, the new regime. So it is not about KYC, it is about the assessment. So for us when the exposure increases 2.5 lakhs we need to do a basic assessment on the income and basically the cash flow of the customer to understand the profile a bit more in detail.
Meghna Luthra
Oh okay.
Jagadeesh Janardanan
We are prepared and after April 1st we are completely on, we are live with our systems, our integration with the credit bureau to understand the public existing obligations not and we don’t see much of an impact. But yeah, there is an impact on the practice of our branches, our staff servicing because that’s a new, new journey for them. But yeah, over a period of a month or so we see, we expect stability there. Yeah.
Meghna Luthra
Okay. And sir, another question was on the co lending spread in the cold loan book.
Jagadeesh Janardanan
Yeah. So our overall book under so PLM is 21 which is around 2,100 crores.
Meghna Luthra
Okay.
Jagadeesh Janardanan
And that gives AVM level spread of around 4% and.
Meghna Luthra
Okay, got it. And another question sir, on other income we are seeing that the dispersant growth was, was very strong during the year. However our fee and commercial income declined on a, you know, year on year basis. So would you like to highlight that? How do we see that moving ahead?
Parvez Mulla
The other income Meghna is actually coming from the lab business and the lab business disbursals, they have not been as strong as the gold business disbursals. So that is where you are seeing that piece.
Meghna Luthra
Okay.
Parvez Mulla
And one more element I think is also about business. You might be seeing if you’re looking at FY25 there is business loans through which I had the fee income coming in which is not there in the year now.
Meghna Luthra
So sir, how do we see this line going forward? Do you think we could see a reasonable amount of growth?
Parvez Mulla
Yes, it will. Because see I am, as I said I’m picking up the disbursals and the disbursals on the SD lab business will pick up. On the medium ticket lab business will pick up and it’s a direct correlation there. So on the rota tree also we are expecting 0.8 to 1% coming from the fee income side. So this should pick up going forward. And also BL won’t be in the base of FY26.
Meghna Luthra
Right, right. And sir, on AUM growth we understand that gold prices, you know, I mean you building in some sort of gold prices in the growth strategy. How do we see the gold loan Book growing during the year and also the. The lamp book, the MT&FT lab book.
Parvez Mulla
Yeah Meghna, so we’ve been giving a overall guidance last year also and we said we will be a 2025% AUM growth company and we’ll continue with that.
Meghna Luthra
And so lastly what would be the incremental cost of funds during the quarter?
C.V. Ganesh
Yeah, right now it is as I said it’s an uncertain environment. Would be hazardous to sort of have a guess around that. We are watchful. As I said We have Tanked upon liquidity. We do not foresee us needing too much of money in the markets at least till the geopolitical situation cools down and then we are hoping Q2 is a new quarter.
Meghna Luthra
Okay, Thank you.
Operator
Our next question comes from the line of Chintan from Isecurities. Please go ahead.
Chintan Vora
Yeah, thank you for the opportunity and congratulations on the strong set of numbers. So diving deeper into this Gold loan also disbursements for gold loan if I look at the number they have almost doubled in FY26 versus FY25. So what is the kind of key vectors which would have contributed to this loan as in branch expansion Plus I think we also have doorstep banking. So what would be kind of the mix how much would be from those banking and how much could that be attributed? So just wanted trying to understand now what could be the run rate which could sustain going forward?
Yeah, that’s the first question.
Jagadeesh Janardanan
So yeah there are multiple drivers. Obviously the first driver is the new branch and existing branches giving more productivity in the existing. So from 12 and a half crores we have reached around 16 and a half crores average per brand book size. Another driver is the doorstep Gold loan. Doorstep Gold loan stands at around 1730 crores AVM which is 17% on the overall AVM. So these are the two major drivers and as we always promised we concentrated on the tonnage and the tonnage has grown around 1.5 percentage for this financial year.
These are the three major drivers.
Chintan Vora
Sure. So sir, but in terms of this EUM per brand so it is almost 16 and a half. So probably peers could be somewhere around at max best pair I think like around 18 to 20 crores or so. What is the maximum stretch I think which we believe could be stretched on AUM per brand. So and what is the branch expansion idea for the next year particularly for gold loans?
Jagadeesh Janardanan
Just to detail there we have opened 148 branches. Even after opening branches our average Overall average is 16.2. But when you see the branches which were there in FY25 we reached around 20 crores of average per branch there. So we are at par with the market as we speak. So the capacity of every branch we have is to accommodate at least 65 crores of portfolio. And that’s the size of the safe room. That depends on the locker, how much lockers we can keep it in the branch. So we are capacitized to reach around 60, 65 crores per branch book.
Parvez Mulla
One way of looking that, looking at that also will be to look at each of the competition and look what is the vintage of the branches you have. So you will have certain branches which are in the range of 2025 crores. They will grow at a particular rate. The 15 to 20 will grow at a particular rate. The 5 to 10 will grow and the new branches will grow at a particular rate. And depending on the geography that you have these branches you will have kind of growth because there will be white spaces available in the western and northern geographies and the southern geographies will be a little dense.
And plus we add the doorstep. That’s how we model our growth story.
Chintan Vora
Sure. And so sir, hypothetically assuming if there is decline, say 1015 percentage in the gold prices, so do we also in that kind of scenario, what could be the growth which would be targeting at overall eum good for gold loans?
Parvez Mulla
Yes. See when we do our budgeting exercise with gold loan, we start with the tonnage growth irrespective of the price. So we will be budgeting for a 10 15% tonnage growth. Our branches are modeled for tonnage growth in terms of the KRAs as well as the drivers as well as the support that we give them. That is how we drive our branches. And we take price as a bonus. And depending on the each of the quarters, there could be ups and downs which could happen. But overall level, even if you have a flattish kind of a price play, next year we still should see a 2022 percent growth on the EVM on the gold side for a flattish price.
Chintan Vora
Sure, sure. And also this on gold loans. Now on the overall AUM trend. So kind of what would be our guidance? So 20% odd guidance remains right on the overall AUM group.
Parvez Mulla
Yeah. 20 to 25%.
Chintan Vora
Sure. And lastly on the margins front, I think if you could just help me with the breakup of the fixed and floating book on the asset and the liability base. So just wanted to understand if there is a rate hike kind of scenario, how are we placed on that frontier?
C.V. Ganesh
Fixed and floating? Yeah. Roughly about a quarter of the book is unfixed. Right. And here I’m excluding the commercial papers we take now, commercial papers we would have six months, one year. Also if you factor commercial paper of a longer duration also roughly 30, 35% would be fixed. So there is some insulation there. Right? Okay.
Chintan Vora
Yeah. On the overall warning, so it is kind of 30, 35% is fixed, including CPS. Yeah. And so on the asset side to largely gold will be the entirely fixed and LAP portfolio.
C.V. Ganesh
It is, I think the way you will have to look at it is that in gold, because of the shorter tenor we have the opportunity to reprice. So you know, I think we have the opportunity and we have the insulation.
Chintan Vora
Understood? Understood. Fair enough. Okay. Okay. So thank you. I think that’s it from myself. Thank you. And I come join back in the queue and all the various for the future quarters.
Operator
Thank you. Our next question comes from the line of Sheepal Doshi from Equity Securities Private Limited. Please proceed.
Shreepal Doshi
Hi sir, good evening. My question was pertaining to the growth side. So as you said that even if the gold price remains steady we would be growing at 20, 22% on the gold side which will be on the back of 10 to 15 gold tonnage growth. But if you look at next year when our trading. Sorry to interrupt you Mr.
Operator
Doshi, but your voice is breaking.
Shreepal Doshi
Am I better now?
Operator
Yes.
Shreepal Doshi
Okay. So next year how are we looking at the mortgage segment growth coming back? Because next year we might not see similar level of gold business growth. So on the mortgage side, if you could give us some clarity on the small ticket lap segment growth or how we are seeing the trends emerging there in terms of not only asset quality related trends but also how our framework, newer framework is helping us on a better growth trajectory going ahead.
Parvez Mulla
Yeah, I mean Sripal, whatever questions I’ve answered, I’ve answered the overall growth, I’ve answered the gold growth. Now the only thing remaining was the mortgage growth. It’s a subtraction, right? Arithmetic.
Shreepal Doshi
But so that stlab as a segment, I mean it was a challenging segment for the industry at large as well. And then while the industry has started to showcase some signs of recovery at least on the bounce rate as well as forward flow rates, are we also experiencing the same? Because on the disbursement side when I look at the numbers it still is broadly sticky at on a quarterly run rate level of 300 crore now.
Parvez Mulla
Yeah, I understand your question. See what I am saying is at a mortgage level we look at that growth within the mortgage team, we have the LAP medium ticket lap and the small ticket lap so that we will leave it for the year to play out. So at the overall mortgage level we still do that growth.
Shreepal Doshi
Okay. Okay so because okay so we would try to maybe cover up the if they continued slowdown we will try to cover up with NT Lab doing relatively better than SC lab.
Parvez Mulla
Yeah that’s how we will as a strategic I mean the the advantage of having multi products is is that right when you have a injured product which has come out of a injury. I agree with you it will take some time to get into the 20 growth story although we will try it but we will also be cautious of the quality that we want. But At the overall level first we get the mortgages to be at that growth and if the gold supports then we deliver the aum growth of 2025% and within the mortgage we see how STLAB plays out in Q1 Q2 and then pick up empty lab accordingly.
Shreepal Doshi
Got it. So why I was asking that question is because that that STLAB as a product also helps us on margin side given the relatively better yield versus the empty lab. So but yeah got got it. Got the answer for the same for next year. With respect to while I heard that you had preluded about it but on the let’s say credit cost and ROI ROE front what is the let’s say FY27 and FY28 target that we have From a range bound perspective you could highlight
Parvez Mulla
FY26 was a rebuild year for us. We had told you it will be a rebuild year and we will work on the credit cost and that was our single biggest promise that on FY20 you will see the credit cost being shaved off and that’s what we wanted it played out in FY27. The credit cost should remain range bound. We should work on the OPEX and between the OPEX and credit cost we should get the upside to see an roe better approximately about 20 to 30bps betterment of ROA from the average ROA that we have delivered this year.
So the trajectory will be in that direction. So if you’re seeing a 2030 BPS improvement on ROA then at a PBT level If I say 40bps that should come from credit cost or opex and since it’s a year after the rebuild year we will toggle between these two and figure out where it has to come from with the rest of the rota tree remaining the same.
Shreepal Doshi
Got it sir. Thank you. Thank you so much for answering my questions and good luck for the next quarter.
Parvez Mulla
Thank you.
Operator
Thank you. Our next question comes from the line of Devanshru from Aquintis Wealth Advisory. Please go ahead.
Divyanshu Raj
Hi sir. Thanks for the opportunity.
Operator
Yes you are.
Divyanshu Raj
Congratulations on a good set of numbers. My first question was where do we see our Yield settling in FY27? So do we. I’m talking about the origination yields. Where do we see them settling? Will they be at this levels or will they improve?
Parvez Mulla
See as far as yields are concerned I think the lap yields have held There could be a 10bps here and there but they have held the medium ticket lap as well as the small ticket lap business and they will continue to hold in the next year. Also the gold business is where you’ve seen some yield play out in Q3 and Q4 and by Q1 you should see some bit coming back. And if the competition is not active and there is a steady state then the gold yield also should come back to the Q2 levels that we had seen in FY26.
Divyanshu Raj
Okay. And that is helpful. My second question is I think we have not mentioned our active customer base and our a new presentation this quarter. So what would that be? And if not that, I think we are doing a run rate of customer acquisition every month. How, what is that exactly right now?
Jagadeesh Janardanan
So on gold last year when we closed we were at an average customer base of 2.56 lakh. This year we are closing crossing 3 lakh active customer base recording a growth of 17% in on biob basis.
Divyanshu Raj
Okay. 3 lakh active customer base I think Q3 we were at 2.7. Right?
Jagadeesh Janardanan
2.667. Yeah, around 2.7.
Divyanshu Raj
Oh. So Q4
Jagadeesh Janardanan
Increase in Q4
Divyanshu Raj
In Q4. Okay. That is quite a healthy run. What would we attribute that to?
Jagadeesh Janardanan
Sorry, 60,000 in Q4.
Divyanshu Raj
60,000.
Jagadeesh Janardanan
So
Divyanshu Raj
We have actually doubled. So we were adding around 30,000 customers per month if I’m not wrong. And now we have added 60,000 this month. This quarter. Right. Okay.
Jagadeesh Janardanan
This is a result of around 148 new branches. Where new branches contributes to whatever disposal that they do that that’s new customers. Right. Okay.
Divyanshu Raj
Okay. So we would attribute that to the new branches that we have added. Any, any other strategy change that we have done, 50%
Jagadeesh Janardanan
Of that will get attributed to the new branches. Rest of the things, rest of it, it is coming from the existing branches.
Divyanshu Raj
Okay, okay, fair. And my other question was are we seeing any, any asset quality stress in the month of April? How is April for us on the side of asset quality and in front on the side of growth.
Parvez Mulla
See as far as water one is concerned across the industry, the collection efficiencies are very different in quarter one. These collection kind of collection efficiencies play out across the industry. But if you’re asking me as far as the industry is concerned and if you’re talking about the environment, whether it is affecting the businesses that we are in, we get a lag effect. So the banks will see that kind of effect first, then it will come to the larger players and then we in the affordable segment will see it because our customer is in the supply chain slightly two, three links links away.
So we will see it later. So right now we are not seeing anything from the customer side.
Divyanshu Raj
Okay. Okay. And the average ticket size that we have right now, where do we see that, you know, see that going? Like I think we are at 2.7 lakhs. Do we keep on continuing to increase that for our tonnage growth or where do we see that going?
Jagadeesh Janardanan
So we see flatten. It’s actually depending on the gold prices. If you see the average ticket has grown from 1.5 lakh to 2.5, 2.6 lakh. This is basically be a price growth scenario. We have seen similar kind of growth in the gold prices. Compare The April price, April 25 price of gold per gram and March 26 price. Similar Kind of growth. We, we have, we have observed that is reflected in the average ticket size.
Divyanshu Raj
Okay. Stabilizes. The average ticket sizes will also stabilize. Okay. So if price stabilizes atf. Okay, Fair. Okay. I, I think yeah, that was quite helpful. Thank you so much.
Operator
Thank you. The next question comes from the line of Aravind Ravi Chandran from Sundaram. Alternates please go ahead.
Aravind Ravichandran
Hi, I hope you know audible. Thank you so much for the opportunity. So two questions. One is I know by seeing you know, early dealing with these improving and you know, according to the presentation. So like I, I can I safely assume that it is primarily because of the mortgages and you know, medium ticket lab segment. Sorry. Yeah, small ticket and medium ticket lack figment. That is my first question. And second question, like you know, like, like we have built the capacity in the mortgages segment over the last, you know, five, six years.
And especially like you know, your disbursements have obviously come down because of you know, multiple reasons. Can we expect growth to come back without meaningful increase in cost? Sorry, that is my second question for next two years at least.
Parvez Mulla
So the delinquency question, it is at an entity level that you are seeing. But we Also have our delinquencies on the mortgages level coming down but that delinquency see at a one plus level yes we have mortgages which has come down but the entity level that you are seeing, it has all the three businesses which is showing. And as far as growth is concerned, yes we are as far as our internal growth had got stunted in the small ticket lab business because of the issue which we faced one and a half years ago.
It was our issue and which we have resolved and are moving forward. So unless there is an environment challenge, we should continue on the same trajectory that the market is operating at. So the dispersal should take the trajectory how the market takes.
Aravind Ravichandran
Yeah. Also my question is also on like you know, can we see revenue growth here like without meaningful improvement in OPEX growth in this particular segment and like what kind of like you know, ROA expansion it could lead to, let’s say Next, over next two to three years. That’s what I understand.
Parvez Mulla
So the ROA expansion which I guided was about 2030 bips on the FY26 ROA, the FY27 ROA, you will see a 2030 bps expansion. And that expansion as I said could come with the reduction in both the OPEX as well as the credit cost. So it could be a play between these two and that is how we will continue in FY28 also.
C.V. Ganesh
So Arvind, I’ll just add on to what Parve said on that. The medium lap for us is a variable cost business. So obviously it is accretive. As soon as we get the business right also we recover more fees than the origination cost. So all of that. Obviously the more medium lap we do, the more profitable it is on the small lab. If you see the volume this year, our belief is it can only get better because the infrastructure is there, the people are there, they’re gaining, the leadership is there. It’s a matter of the execution kicking in.
It’s not a matter of whether, it is a matter of when. And obviously the reason we have invested so much is with the optimism that it will supplement our return ratios. So I think the answer to both is of course, yes,
Aravind Ravichandran
Sure. Thank you. Thank you so much.
Operator
Thank you. Our next question comes from the line of Rahul Kumar from Vancorea. Please go ahead.
Rahul Kumar
Hi, can you help us? The numbers of write offs for the business and in the mortgage business.
C.V. Ganesh
You’re talking about the quarter?
Rahul Kumar
Yeah, this quarter and The previous quarter as well. Yeah,
C.V. Ganesh
So previous quarter I don’t think we had anything this Quarter we would have had about maybe 14, 15 crores roughly.
Rahul Kumar
Okay. Okay.
C.V. Ganesh
The credit cost line reflects the impact of all of these. It. Right.
Rahul Kumar
Yeah. The second question would be would it fair to say that now we are the past point of maximum sleepage in the monde business and then Citrus varus. I think you know, the cred quality in this segment should improve from now onwards.
Parvez Mulla
Yes. See the incremental slippages should show a declining trend if the environment remains steady as because we went through our own challenging situation and our slippages were because of our own reasons. And once we put down those own reasons behind us, the rest of the things should fall in just the way it is operating for the market. So we should align ourselves with the market in terms of the slippages. So we should see a decent story going forward.
Rahul Kumar
Okay. Okay. So Ganesha, can you help us with the figures of modulus Slippage in this quarter and the previous quarter?
C.V. Ganesh
We don’t put it out by segment. Right. But if you see obviously the delinquency metrics improving means that there has been a material improvement.
Rahul Kumar
Okay, got it.
Operator
Thank you. Next question comes from the line of Aditi from Securities Investment Management. Please go ahead.
Aditya Khandelwal
Hi sir. Thanks for the opportunity. Firstly, on the small ticket lab, the book we have of 3,800 Karos. So are we making money currently on this? Considering the credit cost which we have incurred this year and the investment in collection, building the teams. So this 3800 crores book, are we making money on this? Currently
Parvez Mulla
We, as we said, we are reviving. We are very bullish on this particular business. And it will be unfair of us to answer that question right now. And we have told you that we have gone through a tough period on that and we’ve rebuilt that book. So maybe a year later we should be in a better position to answer that question.
Aditya Khandelwal
Understood, sir. But going forward now, this growth in small ticket lab, is it more dependent on how the external environment is for you or it is more on further internal restructuring which we have to undertake. So the growth is going to be dependent on which of these two factors.
Parvez Mulla
External environment will always play out for every company. As far as we are concerned, we are behind with our internal issues. We have already structured the ST lab business. Our leadership team in each of the state is present. They have vintage in those states and they have started delivering decent productivity. And that productivity needs to move up. So we know the tracking that we are doing statewise for the resources to pick up on the stlab side. And we are Monitoring our collections team.
As you know we invested into the collection side for the stlab business, verticalized it looked at the collection efficiency. So all those things are behind us now. So we should align with whatever happens in the market because see we are operating in a volatile environment as far as the world as well as India is concerned and those kind of things I can’t give a guidance on. But the rest of the are internal issues. I am telling you that we are, it’s behind us.
Aditya Khandelwal
Understood, sir. And lastly sir, on fundraise for our debt equity now 4.6. Any particular level beyond which we wouldn’t be comfortable and when would we be looking for a fundraiser?
C.V. Ganesh
See, what you are talking about is an area of competitive advantage for us. We have room there for expansion. I think you should sit back and enjoy the leverage increasing and the ROE increasing. Okay, now we have comfortable covenants. You know, I think I’ll just leave it there.
Aditya Khandelwal
Thanks for answering my question.
Operator
Thank you. Ladies and gentlemen. That was the last question for today. I would like to hand the conference over to the management for the closing remarks. Thank you. And over to you team.
Parvez Mulla
Thank you so much for joining in. Really appreciate. And thank you so much for supporting us.
Operator
Thank you so much sir. Ladies and gentlemen, on behalf of Equity Securities Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.