L&T Finance Ltd (NSE: LTF) Q1 2026 Earnings Call dated Jul. 21, 2025
Corporate Participants:
Unidentified Speaker
Sudipta Roy — Managing Director and Chief Executive Officer
Sachinn R Joshi — Chief Financial Officer
Analysts:
Unidentified Participant
Mahrukh Adajania — Analyst
Kunal Shah — Analyst
Bhavik Dave — Analyst
Avinash Singh — Analyst
Shweta Daptardar — Analyst
Nischint Chawathe — Analyst
Abhijit Tibrewal — Analyst
Chintan Shah — Analyst
Presentation:
operator
It. It’s. It. Sam. It’s. It’s. It’s. It, Sam. It. It. Ladies and gentlemen, good day and welcome to the LNT Finance Limited Q1 FY26 earnings conference call. 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 call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. We have with us today Mrs. Sudipta Roy, Managing Director and CEO, Mr. Sachin Joshi and Mr. Raju Dhoti, COO and other members of the senior management team.
Before we proceed, as a standard disclaimer, no unpublished price sensitive information will be shared during the call. Only publicly available documents will be referred to for discussions during the interaction in the call. While all efforts would be made to ensure that no unpublished price sensitive information will be shared in case of any inadvertent disclosure, the same would in any case form part of the recording of the call. Further, some of the statements made on today’s call may be forward looking in nature. A note to this effect is provided in the Q1 results presentation sent out to all of you earlier.
I would now like to invite Mr. Sudipta Roy to share his thoughts on the company’s performance and the strategy of the company going forward. Thank you. And over to you, sir.
Sudipta Roy — Managing Director and Chief Executive Officer
Thank you. A very good morning everyone. I welcome you all to the Investor call for Q1FY26 and the start of the financial year 2025. Joining me today on the call are our CFO, Mr. Sachin Joshi and our Chief Operating Officer Mr. Raju Dhoti and other members of the senior management team of LNT Finance. Similar to previous calls, today’s call is divided into two sections taken up sequentially by myself, followed by our CFO, Mr. Sachin Joshi who will be talking about the overall business metrics and financial performance post documentary. We’ll be happy to take questions on the call.
Before we delve into highlights for the quarter, I would like to give you some flavor of the current macroeconomic scenario and sectoral outlook. The Indian economy remains one of the few bright spots in an uncertain global economy. With a healthy pace of growth of 6.5% in FY25. Consensus projections indicate a similar growth trend of real GDP at 6.5% in FY26 as well. Strong domestic growth catalysts, sound macroeconomic fundamentals and prudent fiscal and monetary policy support are driving this overall macroeconomic stability. The monsoon season is progressing well with cumulative rainfall in the country at 10% above the long period average till 15th July.
80% of the geographical area has already received normal to above normal rainfall. The water storage level is 83% above normal and 96% higher year on year. Kharib sowing is at a 7% increase over last year and Monday arrivals of rabic crops were 19% higher year on year. Monday prices are ruling above their respective MSP for many major crops. Strong cash flows from the Ruby season and hazy monsoon progression have kept rural sentiments hopeful of another year of bumper harvest. This augurs well for our rural businesses which constitute a significant portion of our portfolio Consumer demand signals in Quarter 1 FY26 remain mixed.
The quarter recorded contraction in passenger vehicle sales and low growth in industrial output on one hand and pickup in retail sales, volume surge in toll collections and strong PMIs on other. Domestic inflation has been steadily declining with the headline CPI inflation recording a six year low of 2.1% in June 2025. The Reserve bank of India lowered policy rates by a cumulative 75 basis points in the quarter and injected durable liquidity through a set of suite of liquidity measures. These measures have turned durable liquidity into surplus and are also contributing to faster transmission of monetary policy to the financial and credit markets.
Easing financial conditions along with restoration of lower risk rates in the quarter should also help improve credit growth prospects further into the year. Overall, we remain cautiously optimistic about strengthening demand signals, prudent policy support and huge potential for credit growth in the Indian economy. Coming to this quarter’s highlights, I’m pleased to inform that our diversified franchise has enabled us to achieve a quarterly PAT of rupees 701 crore up 10% QQ and 2% year on year with the highest ever consolidated book of rupees 1 2,334 crores 314 crores, delivering an ROA of 2.37% up by 15 basis points QQ.
Our robust business model coupled with risk calibrated growth across all retail segments led to an overall quarterly disbursement of rupees 17,522 crores, a healthy growth of 18% year on year, which was driven by a strong performance across all our business lines. The retail book now stands at rupees ninety nine thousand eight hundred and sixteen crore reflecting a growth of 18% year on year. The growth reflects the strength of the retail franchise aided by our strong execution engine, early dividends from technology investments, proactive portfolio and prudent risk management. Our Rural Business finance vertical showed a positive momentum in disbursement growth during the quarter resulting in a growth of 10% QoQ on the back of improved collection efficiencies.
The collection efficiencies in our operating geographies have been continuously showing signs of improvement and growth in disbursements. However, in Karnataka we have seen a gradual recovery from the lows in collection efficiencies of the previous quarter. Full normalcy may take a couple of more months longer than we originally anticipated on account of flow forwards arising in Q4FY25. The board in Q1FY26 approved an utilization of rupees 300 crores of macro prudential provisions to speed up the process of normalization in Karnataka. We are currently proactively boosting our collections by bringing down our accounts per collector through manpower addition and educating borrowers on the merits of prudent trade behavior through our community outreach programs.
We’d also like to add that the Tamil Nadu legislation has had a negligible impact on our business. As an interim update, I would like to mention that the month of July 25th we continue to see further improvement to our collection efficiencies, especially in the State of Karnataka. In the last quarter’s call we had announced our foray into the Gold Loans business through the acquisition of the Gold Loan business of Paul Merchants Finance Private Limited. I am pleased to inform that the technology systems and the people integration was achieved in a short time frame of around two months leading to an amalgamation of almost 130 branches, 700 employees and 1300 crores a book.
Gold Loans, a high yield secured product will add significant value to our retail business franchise going forward. We foresee that this business will serve as a big cross sell opportunity to our 65 lakh rural group loans and MFI and Farm Equipment finance active customer base and the customers forming a part of our existing customer database of 2.6 crore customers who have currently gold loan outstandings of almost 16,000 crores. We envisage that our field force of 20,000 plus officers will first multiply the Gold loans lead generation process and direct incoming business to our branches in the coming quarters.
We also plan on expanding our geopresence through branch expansion and with 175 additional locations focused on areas with high cross sell potential. By the end of FY26 we plan on establishing a distribution strength of 300 plus gold loan branches. Many of these branches will be in our new format Sampurna branches which will sell other products like microlab SME loans and parcel loans apart from Gold loans apart from North Our expansion locations will be focused in our traditional areas of strength in the Eastern and Southern states. Our Digital Large Partnerships initiatives established with Amazon, Pay Cred and Phonepe has picked up pace in the last quarter with overall personal notes disbursements for the quarter from the aforementioned channels reaching Rupees 651 crores and about Rupees 1236 crores life to date while keeping a strong focus on credit and risk guard risk, extensively leveraging the partner trust signals, we’ll continue to keep expanding our origination momentum with existing partners while fostering new partnerships, some of which will be announced soon.
I would now take some time here to share an update on the various technology initiatives for the quarter. Project Cyclops are a proprietary AI ML based credit underwriting engine that was operationalized in quarter one FY25 and implemented across 100% dealerships in two wheeler finance business has been upgraded to generation three based on Kubernetes architecture. Today 100% of our two wheeler disbursement takes place through this engine and we have been seeing very encouraging trends from this implementation quarter after quarter with the net non starters for the portfolio reducing to 0.34% for June 25 from 2.36% in December 2024, an improvement of 200 basis points in a short period of five months.
Project Cyclops, which has been under phase one’s implementation in the farm equipment finance business, having been extended to 20% of our tractor dealerships with 24 live scorecards, will complete full implementation in the month of August 2025. Similar to two wheelers, the initial performance reads from the pilot in the farm business is extremely encouraging. The full implementation of Project Cyclops in our farm business is expected to be completed by Quarter 2 FY26. Project Cyclops has been simultaneously rolled out in SME finance during the quarter and full deployment is expected to be completed by end of quarter two FY26 as well.
We have initiated extension of Project Cyclops to a personal loans business with full implementation by quarter 3 FY26. In the last call I had spoken about Project Nostradamus, our next transformative technology initiative for FY26. It is a state of the art first in industry AI driven automated real time portfolio management engine leveraging traditional as well as alternate data. I’m pleased to share with you that the implementation of this engine is on track with creation of multiple data dashboards for early warning and proactive portfolio management. We expect the beta launch of the product Nostradamus to take place in September 2025.
Details about the same are available in slide 31 in the Investor presentation. It gives me great pleasure to share that LNT Finance has been assigned its first ever international rating. S and P Global Ratings has assigned ltf, bbb Long Term and a three short term Issuer Credit rating. The outlook on the long term rating is positive. Fitch Ratings has assigned LTF Long Term, Foreign and Local currency Issuer default ratings of BBB with a Stable Outlook rating by Reported International with a stable outlook. These long term ratings are investment grade and are at par with India’s Sovereign credit rating.
This opens additional pathways for diversification of liability origination at competitive rates from global markets. Now I’d like to share an update on our quarterly performance against the Laksha 2026 goals. I am pleased to share that the retailization has increased from 97 to 98% from last quarter to this quarter against a lakshya target of 95%. We had set ourselves a retail book growth target of 25% CAGR over the four year plan period against which as of June 30th our retail asset book growth stood at 28% CAGR. Given our outlook of the business environment and the list calibrated growth in RBF and two wheeler business, our year on year retail book growth for the quarter stood at 18% supported by a strong performances in the pharma finance disbursement with a 16% year on year growth, a 65% year on year growth with personal loans disbursement, a 24% year on year growth in housing loans and a 30% year on year growth in SMA finance disbursements.
We continue to maintain our focus on sourcing more prime and near prime customers who exhibit credit resilience which led to the prime customer share in our two wheeler disbursements increasing to 84% in the month of June 25th which stood at 53% for the month of March 24th. Our journey towards building a prime dominant portfolio which showcases resilience across business cycles continues with a strong focus on credit and risk frameworks. On the third milestone which is the asset quality front where we maintained retail GST3 and NS3 levels closer to the threshold levels of 3% and 1% respectively.
Despite the macro challenges and the segment specific challenges in the microfinance segment, our console GS3 and NS3 stood at 3.31 and 0.99% respectively. On the fourth and last milestone of ROA, we have achieved an ROA of 2.37% which is an improvement of 15 basis points over the previous quarter. This has been achieved despite microfinance industry challenges and risk calibrated disbursement across all lines of business, we remain committed to continuous improvement in IO trajectory as the segment headwinds in the microfinance sector dissipates. In customer acquisition, the focus continues to be on expanding our customer base, both deepening our reach in existing segments and broadening our geographical footprint.
While our approach in rural business finance was carefully calibrated to the macro environment, we are actively reengaging disbursement activities expecting a gradual return to full momentum as conditions improve. Our two full of finance is seeking renewed focus with policy changes expanding to reactivated dealers to better serve prime customers. Pharma finance is gearing up for increased activity this Kharif season and our personal loan strategy is highly risk calibrated, ensuring responsible lending. With home loans and loans against property witnessing a seasonal dip, we also expect our new gold finance vertical to add towards this positive momentum.
This quarter we were able to add a total of 5.5 lakh new customers. Further details around customer acquisition and repeat share are available on Slide 16 and 17 of the Investor presentation. In terms of sharpening Crate underwriting, Project Cyclops continue to be extended to other products As I mentioned earlier, a fully capacitized Model Risk management team has been set up to mitigate any potential risk arising from over 100 plus machine learning models that are being used in Project Cyclops and we expect the number of machine learning models to double over the next one year as we rely on the expertise of the Model Risk management team to ensure continuous monitoring, validation and recalibration of the model.
In terms of futuristic digital architecture, we also have set up an independent machine Learning operations team and we will expand its capacity over the next couple of quarters to ensure smooth build and implementation of additional Cyclops Nostradamus and Collections models. Additionally, in our Bangalore Engineering center we have set up an LCF labs to enable our engineers to experiment on innovative use cases in a sandbox environment. Our new home loans Neo2 platform has reduced average data capture time from 30 minutes to 10 minutes and we continue working on optimizing the digital sales interface apps on all lines of business to enhance field executive productivity.
During the quarter, the beta version of our AI powered SME underwriting copilot was deployed which interprets bureau reports using custom trained in house LLM models leading to faster and accurate SME loans underwriting turnarounds on brand visibility, we continue to focus on targeted customer engagement through integrated marketing campaigns where we launched our Business loan campaign featuring iconic Indian cricketer and our brand ambassador Jaspreet Bumra.
Our AI powered digital microsite LTF gamechanger.in was launched as a part of the business loan campaign and has received excellent customer engagement stats. We also briefly ran campaigns for personal loans and Gold Finance. During the quarter following our Gold Finance acquisition, we have rebranded all the 130 Gold Finance branches and I’m delighted to announce that the second edition of our flagship BFSI AI event race 25 with the theme Accelerating Financial Services with AI is scheduled to take place on the 7th of November 25th at the Jiowal center in Mumbai.
On the capability building front, I’m pleased to share that we have been recertified as a great place to work affirming our commitment to building a high trust high performance culture. This time Our score improved from 82 in FY24 to 84 in FY25 driven by increased employee participation which rose from 73% to 89%.
We are committed to fostering an environment where every employee feels valued, empowered and inspired, making us truly an employer of choice in the financial services sector. As part of the strategic acquisition of Paul Merchants Finance Limited gold finance business, we successfully onboard 700 employees into our workforce. Swift and seamless Employee transition across 130 acquired branches ensured zero disruption to operations. We continue to standardize our branch infrastructure and this quarter we inaugurated new revamped regional offices in Kolkata and Rajkot. These efforts also underscored our dedication to providing a modern and efficient workspace that supports our expanding operations and talented teams.
I will now request Mr. Sachin Joshi, our CFO to take you through the financial updates.
Sachinn R Joshi — Chief Financial Officer
Thank you Sujitha. As always, I’ll be walking you through the financial performance of the company for the quarter. Coming to quarterly performance, the consolidated NIM plus fee for the first quarter stood at 10.22% as against 10.15% in the previous quarter I.e. q4 FY25 consolidated PAD for the quarter stood at 701 crores up 10% QoQ and 2% YY. Quarterly retail disbursement stood at 17,522 crores up 18%. YOY retail book stands at 99,816 crores again up 18% YOY. Our consolidated book stands at 12314 crores up 15%. Year on year, consolidated ROA stands at 2.37% up 15 basis points QoQ and consolidated ROE at 10.8% up by 73 basis points Quarter on quarter.
Talking about retail businesses, Rural Business Finance registered quarterly disbursements of 5618 crores delivering a strong momentum with 10% growth quarter on quarter with focus on acquiring lower leverage customers and geo diversification. The book size reached rupees 26,600 crores up 3% year on year in the first quarter. In the pharma finance vertical quarterly disbursement stood at 2,200 crores in the first quarter up 16%. YOY increased crop yield and favorable monsoon is fostering positive rural sentiments and resulting in improved retail demand. The book size reached 15,756 crores reflecting a growth rate of 11% year on year.
Urban Finance which comprises of two wheeler personal loan and home loan left starting with two wheelers this business registered a quarterly disbursement of 2,128 crores in the quarter down 19% year on year. The book size increased to 12,331 crores up 3% year on year. Notably 84% of two wheeler disbursements in June were from the prime segment which reflects our focus on quality growth and risk adjusted returns. Personal loans business we achieved quarterly disbursement of 1942 crores translating into a growth of 65% year on year with the book size at 9382 crores an increase of 41% year on year. The double digit growth is aided by scale up of fintech partnerships, home loan and LAP. Here we achieved quarterly disbursements of 200780 crores up by 24% year on year with a book size of 26464crores an increase of 33% year on year.
Growth in the segment supported by newer partnerships and strong network of distribution channels in SME business the quarterly disbursement stood at 1,273 crores up 30% year on year the book stood at 6,964 crore up 56%. The growth in business volumes was driven by an increase in direct sourcing and existing strong network of distribution channels. During the quarter we acquired Gold loan portfolio of rupees 1335 crores. This was done on June 9th and in the following 20 days we disbursed further amount of 195 crores. The closing book stood at 1360 crores at the end of first quarter.
Let me now hand over the call back to Sudipta to make his closing statements.
Sudipta Roy — Managing Director and Chief Executive Officer
Thank you, Sachin. In closing, I would like to state that we expect the pace of disbursement to accelerate in the remaining quarters of the year along with our focused execution on all risk and technology initiatives. Our investment in our state of the art credit engine project Cyclops, which has already started giving early dividends, will continue and I am confident that this will solidify as we complete implementation across all lines of business. Project Nostradamus is nearing an advanced stage of completion and we are confident of deploying the beta version in quarter two, FY26. As an organization, we have already started working on the Laksha 2031 plans and will be sharing the same at the start of FY27.
We are focused on transformation of the organization towards the technology first risk aware, bottom line driven culture with a heads down execution mentality. We are hopeful that this will translate into a consistently positive outcome trajectory in the years to come.
I thank you all for taking time to join us today and I would like to throw the floor open now for questions.
Questions and Answers:
operator
Sure. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Also, we would like to request participants to please limit your questions to one per participant. For follow up questions, we request you to rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Maru Khadajanya Sonawama. Please go ahead.
Mahrukh Adajania
Hello. Congratulations. I have a couple of questions. Firstly that where do you now expect credit costs to stabilize? As in that or put it the other way around the 3 billion of drawdown that happened this quarter, was it all towards Karnataka? Is that issue behind us? So now you can continue to see gross and net credit costs come down sequentially because we are also moving to prime. And I mean is the Karnataka pain now fully behind because we don’t have additional buffer now to draw down? That’s right. So that’s the first question. And secondly, where do you see long term yield stabilizing? Because Cyclops is doing very well.
It’s been extreme extended to many products now. So obviously we are moving prime. We are shifting customer segments. So where would yield settle? What will be the maximum downside to yields from these levels?
Sudipta Roy
Okay, thanks Manuk. On the first question, you know Karnataka is stabilizing fast. You know, with every passing month you know, collection efficiencies are ranging from our gradual 20 to 30 basis improvements with every passing month. And you’re right, you know, a large amount of the sort of flow forwards that was accounted for by the macroprudential provisions this quarter came in from Karnataka, which was obviously, you know, an event that the industry had not planned for. Right. I think overall the Karnataka sort of collection sluggishness will take another, according to me, another three to four months to fully stabilize.
Which brings us to about October 2025. Right. I do believe that Karnataka should have stabilized by October 2025. As I said in my call, we are putting in additional collectors in Karnataka. We are trying to bring down the accounts for collector in Karnataka. And overall also we are trying a lot of community outreach programs and you know, sort of telling our borrowers about the need to maintain good credit scores so that, you know, their access to credit is not hampered in any way. All of those results are bearing fruit. But I do believe that, you know, that should happen sometime around September.
October is what my sort of sort of estimate is. And also you have to note also keep in mind one thing that the MFIN guardrails which went into full implementation, the industry is also trying to settle to that. Right. So, you know, the industry has seen the long tail of that settlement. And given the fact that monsoons are good and we expect a good credit crop, I do believe that H2 will be a more of a normal quarter more of Q4. But you know, in Q3 we’ll see signs of normalcy coming in in this business.
As regards to your question on the macro protection provisions, yes, you know, our objective is to use as less as possible. You have to be as users, prudent as possible. And though we, though we believe that there are conditions preceding precedent which, you know, which satisfy, that usage exists even in Q2, which is primarily the Karnataka ordinance and some flows forward from the previous year’s events as well. However, as a management, it would be our objective to be as prudent as possible in using that on your guidance of long sort of where do we see credit cost? 13 our objective is to get to a trajectory about 2.3 to 2.5% right towards Q4 of this year is what we intend to get to.
And given the fact that the outcome of Project Cyclops is very, very encouraging and we expect that that should be achievable unless there are any unforeseen shocks in the middle in terms of the sort of the yields, etc. The way we look at it is a little different. You know, I get asked this question that saying that, you know, you’re going prime, so will it be, will it have an impact on your yields? Yes, going prime will have some impact on yields. But the fact is that I look at overall risk adjusted yield as a guiding factor.
And I do believe that risk adjusted yield will continue to remain stable or probably improve as our risk cost starts to squaring down. And in terms of yields though, there might be a couple of, you know, notches, maybe 30, 40, 50 basis points, you know, tempering of yields over a period of time. But our risk adjusted, our risk cost will improve further, probably giving rise to a 50 to 100 basis points improvement in risk adjusted yields. So that is the way I look at it. Right. And you know, frankly, as an organization we are moving away from the practice of we look at yields obviously.
Definitely. And our objective is to improve yields. But as an organization, we are also looking at risk adjusted yields very, very carefully. And the entire philosophy of the business teams have been moved towards improving the risk adjusted yields rather than focusing on yields alone.
operator
Thank you. The next question is from Kunal Shah from Citigroup. Please go ahead.
Kunal Shah
Yeah, thanks. So firstly again, coming on to contingency buffer, looking at the collection efficiency trends across the product segments, maybe there is not a significant improvement which is happening compared to that of fourth quarter. Then is it fair to assume that the balance to 75 crores will also get utilized given this collection efficiency trend? Else maybe managing credit cost in 2.3, 2.5% would be difficult. And second question is in terms of the repeat customers, particularly in MFI that is continuously inching up like there is like almost 5 percentage points increase in count as well as say in terms of the value term.
So and we are the only player in the MFI segment that has grown the book over past couple of quarters. So is it like more kind of a refinancing which is happening to the existing customer? And if you can highlight in terms of the time lag which is there between the repayment and the disbursements, because I think the general concern is whether like maybe the repeat disbursements is leading to improvement in the collection efficiency. Yeah, thanks.
Sachinn R Joshi
Okay, first I would like to dispel that notion because we do not, you know, give first and foremost thing, we give only one loan to an existing customer. Right. And that too after 9 or 12 months of season. So for us, that question does not arise. For us, one customer is one loan that is very, very Clear. The second thing that you should note in mind that you know we have a very strong LTF only LTF customer base which is almost close to 48% right now. Right now the fact is that in the event that our portfolio quality has been outsizedly better than the industry, there is a lot of attention on our customer pools.
There is a lot of attention on our customer pools from all our competitors. Now if I have to preempt that I have to reach my customers earlier than you know, from a strategic point of view treat my customers a credit worthy customers a little earlier than our competitors reach and to a certain extent, you know, if our LTF exclusive customers once a repeat top up, right. We are rather better off it in giving you know to that customer much faster than anyone else. So that you know, the associations don’t increase and you know, you know, sudden leverages don’t increase.
Right. From a strategy point of view. But also that has also if you see our last 8/4 trajectory, we actually we have been trying to bring down our repeat down repeats actually came down for a couple of quarters because we are focusing on much more of new customer additions. It is only in the last two quarters that we have seen a slight uptick in repeat which will again we will try to normalize as some of the conditions of the microfinance industry improves and as we sort of step up our distribution in the new geographies which is AP Telangana, you know, western UP and we have recently entered re entered Assam as well.
So as new customers start flowing into our pools, you know the repeat also will start going down. Right. So that is I consider that as a temporary phenomena and it should normalize within the next one or two quarters. The first question that you asked is in terms of macro prudential provisions and food etc. And as I said as an answer to Maru’s question, as a management, you know our objective is to be as prudent as possible. You know we really want to make sure that our collection efficiencies are pushed up this quarter and we really do not need to use macroprudential provisions to a significant extent.
However, as I said, certain amount of the conditions precedent which has led to some of those flows exist and frankly at this stage it is too premature to indicate on possible utilization in Q2 and can be only ascertained in the quarter end in consultation with the board and the auditors. However, as I said July collection efficiencies continue to trend upwards across all regions including Karnataka. We are having good monsoons we are hopeful that, you know, good crop will add to more amount of liquidities and the sort of the last scale of disruption because of the full implementation of the MFIN guidelines will settle this quarter.
So. And we are increasing collector workforce across many of our large markets just to bring down the accounts per collector so that an average collector is able to focus on a smaller number of accounts and reach higher efficiencies. So overall we are working on all fronts and we are very hopeful of reasonably good outcome by the end of next quarter and the quarter.
operator
Thank you. The next question is from Bhavik. Dave from Nippon Mutual Fund, please go ahead.
Bhavik Dave
Hi. Hi sir. Just two questions sir. One is on your Cyclops implementation, right? Like we’ve done that partially for palm finance and we haven’t seen a material drop in your disbursement, right? So just wanted to understand will there be some disruption in terms of disbursement in these two products as the entire Cyclops gets implemented? Because we’ve seen that during the two loan implementation. Just wanted to understand what is different this time around where disbursement vessel holding up.
Sudipta Roy
Yeah, thanks Arik. Is that your only question or is there a follow up question?
Bhavik Dave
Yeah, second question is on the personal loans, right? We’ve started to inch up in terms of the partnerships, the very partnerships that we have. Just wanted to understand how the economics different from like doing it maybe via DSA or in house versus doing it via digital partners, right? Because my guess is that you’re trying to maybe make this a larger part of the book. So just wanted to understand from an economic perspective in the sense the cost of acquisition and also the credit cost. I’m sure credit costs early days. But how would you want to maybe look at profitability in this digital acquisition implementation that we do? And the last question is on the macro credential provision, right? I just wanted to understand at what point do we start building buffers in terms of micro credential? Maybe we utilize most of it that is left over the group.
But at what profitability do you think you will want to maybe build this up? Because in good times is when you build it and maybe utilize it when times turn back like that we had in fr25. Just wanted to understand what is the thought process in terms of building these in the future. What will lead you to build on. Thank you. Yeah, okay, thank you. So first question on Cyclops. Cyclops has been fully implemented in two wheeler, fully implemented in December and we have now almost six months of 100 operation on cyclops. In two wheeler, cyclops and two wheeler and I think all businesses will go through this trajectory. The first three months which is implemented we see a dip in approval rates because it cleans out the sort of the dodgy burgers. Right. But over a three month period the system understands and system compensates. So if you see and then we slightly fine tune also because we continuously watch it as we go along.
This quarter our two wheeler dispersance actually went up compared to, you know, Q4 and the early start to, you know, Q2 also has been strong. Right. So in terms of Cyclops in two wheelers it’s fully stabilized and we are getting incredible benefits out of the tool in terms of leading indicators pointing towards much, much more lower risk costs in SME in tractor business it has been implemented in about 20% of the volumes and the leading indicators there also are very, very encouraging. It will be fully completed by end of actually we are targeting August 10th filling which, you know, probably by September and middle we should be able to sort of implement full in farm Again there has been a 17% increase in rejection rates.
However, the team is compensating by, you know, moving into a larger number of dealerships and trying to make sure that sort of the throughput remains higher. So again here we will sort of compensate. What happens is typically also cyclops actually boost LTVs also because we are far more confident in taking certain calls which we are not able to do previously. And some of the LTV boosting data we have put in our investor presentation as well. So overall on an overall basis I think it remains events with the sort of the bad borrower was cut out and over a period of a quarter or a quarter two, the volumes build up.
And we are very, very confident that as Diwali comes, which is also a big market for big period for the tractor business, I think the volumes will shoot at that particular point in time. With fully stabilized Cyclops personal loans and SME are getting implemented. SME it has been implemented in five markets. We are learning from it, we are fine tuning it. I do not foresee much of a drop in SME volumes because in SME business just, just like we have done on the personal loans business, we are implementing the digital partnerships with large partnerships. And as you can see, the large partnerships have given us a massive kicker in the personal loans business or personal loans business because of the digital partnerships have grown 65% year on year.
And to a certain extent we expect that strong growth trajectory to continue both in personal loans and SME as Well, even with implementations of Cyclops. So yes, from a growth point of view, even with Cyclops implementation, we are very, very confident that the growth trajectory will continue and the growth trajectory will continue in a very risk calibrated fashion. In fact, the successful implementation of Cyclops has given us a lot of confidence actually to scale up in the markets that we were previously hesitant to scale up because we were not sure of the risk outcomes, especially in the two wheeler business.
Two wheeler business, traditionally we have not been present in Rajasthan in two wheeler business, we have not been present to that extent in Madhya Pradesh because we were not completely confident of the outcomes in these two markets. After Cyclops has come in, we are significantly sort of expanding in these two markets and we are very, very satisfied with the results that we are having. So overall, Cyclops on the long term will boost disbursements rather than curtail disbursements in a very, very risk calibrated fashion. In terms of personal loans economics, the personal loans economics to the large partners, with each partner we have a different model of economics.
Some of the our objective in most of these partnerships is outcome based economics. That means, you know, we set targets of disbursements and we set targets of risk. So it’s not that it is only a disbursement only, it’s a risk plus disbursement sort of calibrated outcome and basis. Certain of those thresholds, the economic stack up. So overall, see in a DSA channel, your cost of acquisition remains around 3 to 3.5%. What I can say without going into extreme specific, because it is very specific for each and every partner. The origination costs and the economics are far lower than what we would do in a throughout DSA channel.
In fact, as a matter of fact principle, we run the business on what we call a three to one metrics. That means channels that have 3% acquisition cost, channels that have 2% acquisition cost, channels that have 1% acquisition cost. And our objective overall the period of time is to get to 50% of our acquisition volume from the 1% and 2% channels. Especially in the SME business which has got a very, very large DFA component. So overall our focus is to make sure that all these channels are as efficient as possible. And the initial leading indicators of the volumes arranged through these channels is that risk is holding, yields are holding.
Right. So, and we are now building volumes. So overall we’ll continue to build on this. As I said in my call, in my opening comments that we’ll announce a few more large partnerships this Quarter. Right. Which have significant potential to scale up on whatever we have already done. And I do believe in the period to come, large deal partnerships will contribute to about 50 to 60% of our personal loans origination. In terms of the macro potential buffers on building them up, we would like to build back the macro potential buffers as fast as possible, probably, but that depends on, you know, sort of.
You generally build macro prudential buffers in a situation where you have probably an extra dollop of profitability. Right. Because that’s when you look at doing that or when you get. When you get some extraordinary gains which you have probably not accounted for. As you are aware that we have a large amount of wholesale business which is currently in the process of resolution, especially in the commercial real estate and many of them are in advanced stages of resolution. Right. So what we have decided as an organization that the cash flows that we accrue from the resolution of those assets right post the sort of the HR structures resolving the extra cash flows, which we are very certain according to calculations we’ll get from it will go back to build the macro prudential buffers.
Right. At an organization level. One of the other thoughts that we have is that if this time we build macro prudential buffers will not build at a business specific level, but we will build it at an umbrella proto level at an organization level with a large focus on unsecured businesses. So that is what our strategy is. So Obviously, yes, across FY27 and FY28, our focus will be to build back those macro prudential provisions as fast as possible.
operator
Thank you. The next question is from Avinash Singh from MK Global. Please go ahead.
Avinash Singh
Yeah, hi, good morning. Thanks for the opportunity. So just I mean referring to your media interaction, I mean a 2.8% kind of exit ROA you were referring to. I just wanted to Clarify if that 2.8 kind of a thing corresponds to the 2.37% number for this quarter. The question coming that because of Cyclops implementation and also that, you know, lap on home loans increasing and also you were alluding to the two point.
Sudipta Roy
Yeah, the 2.8%. You know, I meant near 2.8% in FY27. So I’d like to clarify that, you know, quarter four exit, we should be around anywhere between the corridor of 2.5% odd. Right. So the 2.8% trajectory will probably be achieved sometime around FY20.
Avinash Singh
This kind of a cliff. Because I was a bit confused that 10 to 10 and a half percent moon, you were added into your office at 4.2% looks stable and on a, you know, after macro the credit cost is close to 2.23%. That also is a kind of a near term, I would say stable rate. So then the 2.8%. Yeah. Because that there was some confusion. Thank you. That answer my question. Thank you.
operator
Thank you. The next question is from Shweta Dutadar from Elara Capital. Please go ahead.
Shweta Daptardar
Thank you sir. And congratulations on a good quarter. I have two questions. While if I look at repeat disbursement share which is steadied now at 49% and even in value terms around 45% and you just alluded to the fact that in the earlier question that microfinance could be the largest share there. But going forward, how are you marrying the fact that this also forms the base for growth as well as you are curbing the risk emanating from overlap across the businesses such as microfinance or unsecured lending? That’s one question. Second is considering we have sizable presence in Bihar, so are we building in any kind of traction on macro prudential provisions or maybe that will that be part of our discussions whenever the board meeting or that happens.
Although past precedences do not trigger a worry but currently the dynamics are definitely slightly distinct. Thank you.
Sudipta Roy
Thanks Shweta. You know, on the repeat I obviously repeat overall, you know, overall detail repeat is currently if you see the numbers, you know, last quarter it was at 49% overall and this quarter also it has remained at 49% overall. However in rural group loans it has gone up by about 5% odd in terms of, in, in terms of, you know, count and in terms of again in terms of value also it has also gone up by about 5%. I obviously our objective is that and I explained in detail in my previous answers as to you know, why, why that has happened.
Right. However, what we intend to do is that we over the period of time as situations normalize as new sort of customers from the new markets like Western Rupee, Eastern Maharashtra, ip, Telangana, Assam, etc, you know, start flowing in, you know, I see that proportion start reducing. We’re still building our distribution in these new locations where we are disputing and these are relatively leverage locations. So I do believe that over a period of time, over the next two quarters you will see the repeat going down. Right. So that is what you know, I would like to give an answer to the, the first question as an answer.
Yeah, Bihar on Bihar again, you know, Bihar. You know, collection efficiency is pretty Pretty stable, right? You know, though we are keeping a close watch, it’s pretty stable. And you know, overall as an organization we have certain thresholds of exposure in one single market. So we are very careful that the lunar we do not reach those thresholds. Right. So. And as. And frankly in Bihar also over the last couple of quarters we have slowly increased our manpower strength to bring down our accounts per collector. And this quarter also we will be, you know, continuing the trend to bring down our accounts per collectors even further.
So that there is a very granular and focus on maintaining the collection efficiencies. So Bihar continues to be very, very stable for us. But yes, we always watch that. Actually Bihar traditionally we have got more worse from natural calamities and floods etc. Than any other thing. And we are hopeful that at least this year. Because last year there was a bad flood in Bihar. We are hopeful that at least there won’t be a repeat of the same this year as well.
Sachinn R Joshi
Just wanted to add Sachin here. Shweta and Kunal. I don’t think you should be really worried about increase in repeat. Because these are the times when you know the MPIN guardrails have actually got implemented on three financiers, right? So the repeat customers, especially the exclusive customers. 48% of our total 26,000 crore. These are the customers who have been with us in for second, third, fourth cycle and all. So we have enough information on them. We have enough behavior. There is a lot of goodwill among these customers. And till the time we maintain the guardrails which we have been since April 2020.
I think we would not want to give up on our customer. Build huge customer base which we have created with a lot of pain over last 10 to 15 years. And this is the time to ensure that this customer base which has been loyal with us should remain with us. And new customer you try to go for at this point of time, unless it’s a new geography or geographies which have very little leverage, the risks are very high in ultimately getting into the same customers who have been perhaps delaying and defaulting with other financiers. So I think the strategy at this point of time is to ensure that our customer base does not get disintegrated in any manner.
operator
Thank you. The next question is from Nishin Chavate from Kotak. Please go ahead.
Nischint Chawathe
Yeah, hi. Just two questions. One is on security. We almost have 5000 crores plus.
operator
Nishant, we can’t hear you very clearly. If you could speak a little louder.
Nischint Chawathe
I believe the Reduction last year was around 12, 13%. So is that the pace or tax. Rate or how we think about it? And the other one was on disbursements. Where this quarter if you look at. X of gold loan book purchase disbursement growth was around 8%. Is this disbursement? Yeah. Am I audible now? Yeah, yeah, yeah, sure. So is this, you know, decline in disbursements or. Sorry, this weakness in disbursements, is this because of company specific factors in terms of, you know, the migration of portfolio or is it because you can see some general weakness in the economy?
Sachinn R Joshi
So Nichin, on the first point on Assad, we had mentioned on our earlier calls also that the resolutions of these Assad’s which are currently around 60% provided for, you know the book is right now 5500. It has been coming down but I think significant resolutions are in advanced stages with NCLT and the resolutions are expected in FY27 and 28. Significant part of these projects will actually see the completion and we should be able to. And we had also mentioned Sudipta in the earlier one of the conversation also mentioned that we expect certain, you know, projects will be resolved in our favor which means that the provisions which have been taken against such projects may get released only to be utilized to rebuild our micro prudential provision.
So yes, the progress has been there but a bit slow at this point of time. 27 will see a significant amount of, you know.
Sudipta Roy
Yeah. On disbursements. Further, I’d like to take the question, you know, you’re right because you know, the disbursements, you know, grow this quarter. If you look on a QQ basis. Actually the disbursement of farm was very good on a QQ basis. Factors grew quite well on a QQ basis. Even you know, microfinance also grew reasonably well on a QQ basis. If I were to look at, you know, on a QQ basis, pharma finance grew by 25% even a month. Microfinance business grew by about 10%. So you see same time last quarter which is the quarter previous to this quarter we were averaging around 1600 crores per month in rural business finance this quarter we have averaged around 1800 crores per month.
And we are hopeful that as and when the collection efficiencies move upwards, as they are with every passing month, we should be able to get that to a 19002000 crore trajectory. Right. To a 1900 to 2000 crore trajectory as soon as possible. Preferably towards the near term, towards the Festival season in Tula Finance. If you see on a Q of Q, we have grown by about 15%. So that growth has been pretty strong. The reason you probably see a dip in the overall growth rates is that personal loans actually this quarter was probably a little lower growth rate primarily because we had a very good growth rate in Q4 of FY24.
But with Amazon and Phonepe now, the volumes now stabilizing this quarter, we are also looking at a strong growth rate in personal loans as well. So overall I do believe that the situations in the market are slowly improving. The sort of the mini cycle we saw in some asset classes, especially unsecured in microfinance, show signs of dissipation. Have they fully dissipated yet? No, I think it will take another two quarters for the industry to see full dissipation. Anyway, credit was also squeezed, as you can see from all the civil dashboards that credit disbursement across the industry had got squeezed.
So I do believe that the restoration of that is a two quarter process for us. We have seen good momentum this quarter. I expect Q2 to continue that momentum though Q2 has some seasonal fluctuations in view of Shradd etc. That happened in September before the festive season puts in. Q2 normally is a tight quarter for most lenders. However, I do believe that we, you know, we will see decent growth in Q2 as well. But I do believe that H2 will be very, very good, especially starting with the festive season and in Q4. That is the, that is the way I look at it.
I see a more of a level out Q2. I see good acceleration in Q3 and I see, you know, pick up pace in CO4, if that answers your question.
operator
Thank you. The next question is from Abhijit Tibriwal from Motilal Oswal. Please go ahead.
Abhijit Tibrewal
Yeah, hi. Am I audible?
Sudipta Roy
Yeah, you’re audible.
Abhijit Tibrewal
Thank you for taking my question. So firstly sir, on asset quality and credit costs, if you could just help us understand how is the two wheeler and the captor portfolio behaving now? That is one and somewhere earlier during the call you spoke about credit costs declining to 2.3 to 2.5% by basic quarter four. Q so just trying to understand, I mean earlier in the past earnings calls we’ve spoken about benefits from Cyclops leading to a structural improvement in credit costs for us. So what could that credit cost look like from FY27 onwards? Also we have discussed a little bit on SR.
So since I just wanted to understand the number of 5500 crores and the 50% provision. So is the gross SR outstanding roughly around 11,000 crores now. And also you spoke about FY 2728 where we can see some resolutions happening in our favor and which will subsequently be utilized for macro credential provisions. So any, any ballpark estimates of what recoveries we are expecting from SR over FY 2728? And lastly with regards to gold loans, I think Sudipusar spoke about setting up branches and we aspiring to get up to 300 branches. So I mean over what period this will be done and will this mean that at least in the near term Opix will remain? So just some of those questions.
Thank you.
Sudipta Roy
I’ll take the two wheeler and go loan and then Sachin can give the additional details in the. For the size. Right. In terms of numbers. Right. So let me tell you at the onset that I’m very happy with the way the two wheeler and the tractor sort of risk numbers are spanning out in two wheeler especially as I said, you know our prime share has reached 84%. Right. And and the two wheeler gross non strata rates as well as net non starter rates have gone down. We have given an index representation of the bounces in I think slide, it will be on slide 15 or 16.
I think it will be on slide 15 or 16. Yeah. So two wheeler we have given it, sorry, slide 27. Slide 27 in the investor day. So you can see that if indexed on April was 100, you know, if you know out of 1,000 customer, 100 customers are bouncing now only 72 are bouncing. So this is portfolio bounce. That means, you know, and still if you see we have some portion of the sort of the legacy portfolio left which will probably, you know become much smaller in volume by say Q3 of this year. So overall two wheeler, you know this cost is progressing very, very, very well.
And I do believe that you know we will see probably a very low risk cost regime in two wheeler to set in post Q3 for us as the legacy portfolio still dwindles in size for tractors also similar trajectory, you know tractors if you see our net non starters in tractors are at a historical low actually in the Cyclops portfolio we have seen net non starters as low as 0% actually. Right. So two wheeler interactor also the overall sort of cleanup has happened and if you see slide 28, you know in terms of index representation of net non starters, you know in April 24th if it was 159% we are down to 38%.
So that will Tell you the extent of improvement that has taken in the two wheeler business. And if you see the two wheeler sort of charts in terms of, you know, collection efficiencies as well in chart 38. Is it 38 or 37? Yeah, sorry, 37. No, chart 38. Right. You can see the collection efficiencies now. You see in the June last year we are at about 91.8% collection efficiency which has gone up to a 93% collection efficiency. You can see that it has significantly gone up and we expect that this trajectory to continue and on almost a 16,000 crore book, 120 basis points improve in collection efficiency is significant in terms of credit cost.
So we expect that both the Twilio business and attractive business to have significant contribution to profitability in terms. Yeah, the two wheeler is the next page if you can see two wheeler also, you know, collection efficiency in two wheeler is, is at 38.98.5. Right. Which is in slide 39 top up and which, which was 98% same time last. And this number is actually going up quite steeply. So April is a seasonal blip because what happens is that many of the outsourced collection agencies actually post the DFSI industry sees this April, what I call the April blip.
But overall I am very satisfied with the way these two are progressing. In terms of the gold loans, the 135 branches, which I said new branches will happen before March 31. Right. Of this financial year. We are working on that. We have a fair amount of. We have figured out understand that, you know, we acquired a business which had actually fine tuned the process of branch addition. Right. So the branch cost, the cost of branch addition is not really extremely expensive, but it’s quite economic because the process has been fine tuned by the team which was managing this business in foreign merchants over a period of years.
So obviously yes, 175 branches will take a little bit of the cost, but we do not expect that to be significant enough to show up materially significantly in our cost numbers overall as an organization, we are also running a massive productivity as well as a cost improvement exercise internally. And we are hopeful that we should be able to absorb this cost quite effectively. Right. So our focus is that we expand very, very quickly in our markets of strength, especially where we can use some of the feet of the street that we have, especially in the MFI business as well as in the tractor business to sort of cross sell gold loans to our existing pool of customers, either existing customers or our customers who have been previously with us and sort of build in a new model where you know, we sort of lead generate in the field and send the customer for fulfillment towards the near branch.
So that is what we will be wanting to do and we are reasonably confident that we should be able to do that. You know. Before that I think Abhijiti also wanted to know the traction of how credit costs will pan out between 2.3 to 2.5. So see the credit costs the first first quarter of course we have used and when we, when we talk about this range this is of course after taking into account the macro prudential provisions. During our earlier couple of calls we had mentioned that the two wheeler, PL and tractor businesses the for specific reason since the like, for example we had stopped the, you know, repoing of 90 plus per tractor. Similarly two wheeler and PL for the challenges which were faced from the urban side, you know, had led to increasing credit costs.
And we had mentioned that this will last for at least two to three quarters. We are seeing some kind of stabilization as far as PL is concerned. Tractor has actually started showing an improvement after last two to three quarters. Two wheeler we I think have still a quarter or two to go. And as Sudipta mentioned, Q4 we will start having the seasoning of the book which has come through. Cyclops will start showing its impact. So Q4 we will start seeing the full benefits of Cyclops on the two wheeler portfolio. Till that time the book which was generated through our source through the earlier models will also become very insignificant.
So keeping these in mind, I think we should for the full year we are expecting that we should be somewhere in the range of about 2.3 to 2.5. We should exit I would say by. With 2.5 but with the average for all the four quarters we should be somewhere around 2.4, 2.5 for the full financial year.
On the SRS piece. The, you know the overall book which was sold off to ARCS post receipt of cash was about 14,000 crores over a period of time. And against that we have during various points of time created provisions at the time of transfer. Also we had announced about a year back, you know, setting aside about 729 crores. All that put together we have about 8400 crores which is set aside which comes to about 60%. So the 5500 is the net carrying value as of 30th of June if that clarifies.
operator
Thank you. The next question is from Chintan Shah from ICICI Securities. Please go ahead.
Chintan Shah
Yeah sir, thank you for the opportunity. So sir, one question on the MFI PAR portfolio. So our part 31 to 90 portfolio so that has been more than 1 percentage since the past three quarters. So current quarter and it has been actually increasing since the past six quarters only for this quarter it has declined to 1.2 versus 1.4 previously and simultaneously also we have utilized the macro credentials since the past 3/4 wherein the part 31 or 90 has been about 1:1 percentage. So when do we see this portfolio coming down below 1%? I understand it could be due to Karnataka or Bihar IT etc and this used to be 0.5% is almost a year ago in Q1FY25.
So yeah. When where this could normalize by the year end. Yeah that’s the first question.
Sudipta Roy
Yeah. So you know if you see. Thanks Shan for the question. If you see we already saw the inflection point of the curve between par one to 90 this quarter. Right. If you look at at all the buckets up. Right. So and first like I like to say that there is no issue in Bihar. Right. Bihar is normal. There is no issue in Bihar. Right. So Karnataka. Yes, Karnataka. The speed at which we thought it would improve probably did not happen in Q1. But again we are seeing it picking up pace. We are seeing it picking up pace and as I said our objective has that been to bring down the account per collector ratio in Karnataka as well.
So there are people are more focused. So you know we have increased the number of people so that the account per collector has also come down so that we the same number because what has happened is the K window of collection is reduced because there is some time till sometime to sometime you calculate you cannot go beyond 5pm etc. So we need the larger number of collectors to reach the same amount of customers within that period of time. So that that is what we have been focused on and that’s what currently work is going on.
So I do believe that this quarter will see further improvements and again you know MFIN Cardres came into being you know in the first quarter fully. So obviously that took the market is taking time to settle as well. Right on that. So Overall I think Q2 will be the settling period and in Q3 we’ll see the normalcy. So the curve which you saw the inflection point in Q1 will continue to trend downwards in Q2 and probably by middle of Q3 it will probably come close to normal. Right. Again you know I’ll put a caveat here.
You know in the sense that you know, all these are sort of in the place and we are hopeful that you know, you know, the Karnataka event came in a short period of three weeks and the fact that the industry was not prepared for it. Right. And in a short period of three weeks we saw a collection of ISS tank. So all these numbers in the cave carrier, the things are settled. Right. And there are no more sudden surprises. Right? That is the right.
Sachinn R Joshi
So just to add, the only positive thing we can share is that the dip which went down to almost 200 basis points plus in the month of February, the recovery has been there maybe from the, you know, pre, pre February times when the collection efficiencies were 99% plus. I think we would be about 50, 60 basis points away. And as we speak, July also has been, you know, trending positively. So yeah, I think we’ll have to just wait and watch. But the other geographies, you know, have already stabilized so we should not see, you know, any reversal of what, what you were pointing out the in terms of the past, you know, 0 to 30, 30 to 60 beyond this in a very significant manner. That’s.
Chintan Shah
Just a follow up on that. Also typically do we have any ratio means as in this month is the part that you 90 percentage of the portfolio. So how much typically that flows into 90 plus or how much can be rolled back. So any data points to share that.
Sudipta Roy
Yeah, actually this works only in a normal, you know, environment. In today’s environment, like Sudipta mentioned, if the collection efficiencies are slowing down, we’ll just put more people to see that the collections are done. So, so it will, it will. Right now the challenges are in only specific pockets, specific states. We will have to address it by using different, different techniques. So there is no specific science that. Okay, you know, if 31 to 50 under normal circumstances we can possibly mention about, you know, what, what will be the reverse flow which will happen but roll forwards.
Right now the moment they touch 90 plus hundred percent gets provided for. So that ensures that whatever risk is seen already gets captured. In terms of provisions, one thing which we can say is that the Karnataka challenge is not in terms of ability to pay, but the intent to pay. And a time will surely come when these customers would need money and they’re looking at the their bureau scores getting worsened. They will not get money anywhere and the chances of recovery will be high when they come back asking for fresh loans. This is the expectation we have.
operator
Thank you very much. We’ll take that as the last question. I would now like to Hand the conference back to Mr. Sudipta Roy for any closing comments.
Sudipta Roy
Thank you. You know, I thank everyone who has joined us today. So it has been Q1 has been a tough quarter for all around for the industry as well as well as for us. But what we are reasonably satisfied with the outcome, obviously a lot of work remains to be done which will be done across the rest of the year. One thing I would like to assure is that we are focused on making sure and as I mentioned in many of my media interviews, that we are building a risk first organization and many of our technology sort of investments in the initial phase has been focused towards making sure that our risk guardrails are strong and bulletproof.
So now that we are reasonably confident of some of the efficacy of the early technology steps that we took last year, this year we will, as the conditions improve, I think we will have the confidence enough to be the first of the block in terms of growth and all the growth drivers, all the growth thrusters are now being positioned into place for that event to happen. We are seeing very fast improvement in the operating environment in all lines of business, both rural as well as urban. And I am very, very confident that Q2 will be the inflection point in terms of the risk outlook of the industry and we will see better term, better outcomes in Q3 and Q4.
Right. With that, I would like to wish you a very good remaining part of the day and I will, me and my management will be very happy to give you, interact with you when we meet one on one and probably provide more flavor of our execution story. Thank you so much. And with that we will end the call.
operator
Thank you very much on behalf of LNT Finance limited that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.