Moneyboxx Finance Ltd (BSE: 538446) Q1 2026 Earnings Call dated Jul. 28, 2025
Corporate Participants:
Deepak Aggarwal — Co-Founder, Co-Chief Executive Officer and Chief Financial Officer
Analysts:
Mamta Nehra — Analyst
Mihir Shah — Analyst
Sunidhi Joshi — Analyst
Varun Mishra — Analyst
Unidentified Participant
Darshan Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Moneybox Finance Limited Q1 SY26 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 this conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Mamta Nehra from the MUFG in time India Private Limited. Thank you. And over to you ma’. Am.
Mamta Nehra — Analyst
Thank you. Good afternoon ladies and gentlemen. I welcome you to the Q1 FY26 earning conference call of Moneybox Finance Limited to discuss this quarter’s business performance. We have from the management, Mr. Mayur Modi, Co Founder, Mr. Deepak Agarwal, Co Founder, Mr. Viral Sheth, Finance Controller. Before we proceed with this call, I would like to mention that some of the statement made in today’s call may be forward looking in nature and may involve risk and uncertainty. For more details kindly refer to the investor presentation and other filings that can be found on the company’s website and stock exchanges. Without further ado, I would like to hand over the call to the management for the opening comments and then we will open the floor for Q and A. Thank you. And over to you sir. Thank you.
Deepak Aggarwal — Co-Founder, Co-Chief Executive Officer and Chief Financial Officer
Thank you. Mamka. Good afternoon everyone. This is Deepak Agarwal, co founder of Moneybox Finance and I’m delighted to welcome you all to the Q1FY26 earning conference call of Moneybox Finance. Joining me on the call today are Mr. Mayur Modi, Co Founder, MSR Real Estate. Before we dive into the details of our performance, I would like to begin by briefly touching upon the broad economic environment. India’s economy remains resilient and on a strong growth trajectory with the Asian development bank projecting GDP growth of 6.5% in 2025 and 6.7% in 2026 driven by gradual increase in domestic demand, revenue, a strong services sector and monetary easing. Despite global headwinds, India continues to outperform major economies. Inflation shows encouraging signs with retail inflation easing to a six year low of 2.1% in June marking five straight months below the RBI 4% target while wholesale inflation dropped to 0.13%. The RBI has responded proactively cutting the repo rate with 5.5% this quarter, a cut of 50 basis points and lowering the cash reserve ratio by 100 basis points, shifting its policy stance from accommodative to neutral. The rural economy is showing signs of revival supported by surplus monsoon rains and improved agricultural prospects which are expected to boost carat sowing and rural consumption. Meanwhile, the ambiatric sector is stabilizing aided by RBI’s rollback of higher risk rates on bank lending and stronger governance across the sector especially in microfinance. At Moneybox Finance our core mission is to support underserved small and micro entrepreneurs. We have significantly boosted our branch presence within a short time span. We now have a strong Pan India presence with 1.63 branches across 12 states. Our physical model, a smart mix of physical branches and digital support, has proven to be both scalable and efficient. Today we are backed by 32 lenders including 11 leading banks. I’m pleased to share an exciting update. We have recently launched a new product Salvage Lab that is loan against property for salvid individuals. Until now we have mainly served self employed and within E commerce. With this new product we will also cater to salaried customers looking for secured loans. This marks an important milestone for us not just to expand our reach but also to diversify our product base and strengthen our asset portfolio. We are making strategic shifts in our customer segment to strengthen and diversify our portfolio and reduce sector specific risk exposures. The share of livestock based disbursement has reduced from 64% in same quarter of last year to 47% in Q1 FY26 as we focus more on non livestock and upper tier micro enterprises. At the same time there is clear shift in etiquette sizes distribution loans below 3 lakhs have come down from 80% in Q1 of last year to 50% while loans in 5 to 10 lakh range have grown four fold from 5% of the disbursement in Q1 of last year to over 20% of disbursement in Q1 of current year. This reflects our move towards higher value lending aimed at improving revenue per loan and reaching a more stable credit worthy customer base. These changes align with our goal of responsible long term growth. Now let’s move on to Q1FY26 financial performance. I’m pleased to share that our asset under management grew by 23% year on year reaching 918 crore up from 746 crore in Q1FY25. This includes an on book portfolio of 689 crore which constitutes 75% of our AUM and a managed book of food traffic roads accounting for the remaining 25% on AUM by states fund. Madhya Pradesh continues to lead accounting for 31.3% of our total AUM followed closely by Uttar Pradesh. Our Q1 is typically a muted quarter for us, especially in light of new changes which we have bought. We recorded disbursement of 92 crore compared to 106 crore in Q1 of FY25 reflecting our continued focus on financial inclusion. Moving ahead, we are strategically shifting our focus towards higher ticket loans of 5 lakh and above while enhancing our portfolio quality. In Q1.FY 26 customers with a credit bureau score of 750 and above made 20.3% of our disbursement versus 5% last year and remaining in the single digits in the earlier quarters. This shows our strong focus on careful lending and improving overall credit quality. Also, the share of customers with credit scores above 650 has gone up from 50% to 70%. This reflects our better credit checks and focus on lending to safer low risk borrowers. Now speaking about our successful business transformation towards secure lending, I’m happy to share that we have made a significant progress in the strategic shift. Secured disbursement accounted for 64% of the total disbursement in Q1 of FY26, a substantial rise from 36% in Q1 of FY25. Our secured loan book now forms 49% of our total assets under management as of June 2025 up from 27% in Q1 of FY25. This shift represents a deliberate and well executed move to strengthen our secured portfolio. We are confidently targeting a secured lending share of around 70% by March 2026 which we believe will play a critical role in ensuring more stable asset quality, stronger risk mitigation and reduced default rates. Moving to our total income which grew by 29% year on year reaching 59 crores in Q1 of FY26 up from 46 crore in Q1 of FY25. Our net interest income also witnessed healthy growth rising by 26% to 39 crore compared to 31 crore last quarter same year talking about our net interest margin which is now around 14.36% for this quarter. That said, our profit after tax for Q1 of this quarter was 24 lakhs as compared to 4.30 crore in Q1 of last year. This dip in profitability was mainly due to muted disbursement growth during the quarter but largely because of operating profit being absorbed by higher credit cost. Turning to cost efficiency, our operating expenses higher than 12.8% in FY26. Again, this increase was mainly due to lower than expected disruption growth during the quarter and last year. As such, however, vision is a key priority and we are targeting to bring OPEC below 10% over the next few years supported by stronger AUM growth in coming quarters let’s take a look at our lending and borrowing spreads. Our average lending IRR for quarter stood at 26.12% compared to 29.03% in same quarter last year. Effectively this is the real number of average spending IRRs today 28.50 but the dip is because of non acquisition of interest income on the GMP portfolio. On the borrowing side we have made a good progress. Our average borrowing IRR has reduced to 12.48% as a result, interest spread came at 13.65% and mints to that healthy 14.36%. In Q1 of FY26 our average cost of funds stood at 12.5% while the marginal cost of funds was at 12.1%. You will see that over a period of five years, every year we have reduced the average cost and the marginal cost by approximately 1%. Looking ahead, we expect our cost of funds to gradually decline and move into single digits in the medium term supported by favorable regulatory environment which is cut in the repo rates, improvements in our credit rating and increasing scale of operations. Lastly, speaking about our returns, our return on Equity stood at 0.1% and return on assets at 0.4% for the quarter largely due to higher credit cost which is declining every quarter. We believe profitability will improve as credit costs start to normalize and growth and operational efficiency pick up in coming quarters. In Q1 FY26 our on book GNPA rose to 7.28% and our on book net NPA increased to 3.78% largely driven by flattish AUM growth but increase in NPA though at a decreasing rate. This rise in stress is largely due to ongoing credit cycle, but we expect asset quality to improve as slippages begin to normalize in coming quarters. Our provision coverage ratios remain steady at 450% which reflects our cautious and balanced approach to risk management. Our credit cost for the quarter increased to 3.65% in line with the increased stress level. Talking about collections, our efficiency in the current and up to 30 days past due ducket is 97.2% though there are some minor fluctuation. We have worked hard to improve our collection system to keep things stable and ensure better recovery. After nine months of effort, we now have a dedicated team of 100 field staff and 50 telecollege focused only on connections. We have also set up a legal team which has already filed 226 cases in FY25 compared to none in FY24. This year we’ll see a very, very significant jump in the legal cases. All these steps clearly show our stronger push towards recovery and legal action to maintain good asset quality. Additionally, hiring leadership at all levels and a strategic shift in manpower reflects enhanced organizational structuring to support new business goals and operational efficiencies. Now talking about capital raise initiatives in Q2FY25 we announced a total equity raise of 176 crore comprising 53 crores in equity and 113 crores through warrants of this, 91 crore has already been received in September 2024 and remaining 85 crores is expected to come by March 2026 which has helped us maintain a strong CRR of 28.4%. Our liability mix is now well diversified with 42% from debt capital markets, 33% from domestic institutions and only 5% from banks. We also maintain a very strong liquidity buffer of 165 crores as of June 30, 2025 which reflects strong confidence from all secured lending lenders including debt, capital markets and banks. In addition, we raised 82 crore via NCB arranged by wind in Q1 of FY26 bringing our total NCB raise to 237 crores in just 4 months, which effectively shows the confidence of the market on the debt side. This reflects strong market confidence in our model and fuel our mission to expand access to credit for microentrepreneurs across rural and semi urban India. I’m pleased to announce that we have successfully launched our proprietary CATL AI solution in March 2025. This cutting edge technology is a major step forward in digitizing and automating cattle verification for secure rural lending. It helps us uniquely identify cattle, prevents duplicate funding and even predicts animals age through images captured right in the field. What’s more, our real time app works even in offline environment, making it faster and more efficient for field teams and ensuring quick loan approvals for our customers. This innovation not only enhances accuracy but also strengthens risk control and improves the overall lending experience. As we move forward, we remain focused on navigating an evolving global and domestic environment. Strengthening collection efficiency and increasing AUM is a key priority supported by rural recovery and potential tailwinds like income tax exemptions that may boost consumption. Our strategy centered on strong underwriting, increased secured lending, exceptional Lender support, higher loan sizes, risk diversification, enhanced leadership team and a broader product portfolio is building a more resilient and balanced business model. These pillars are set to enhance asset quality, risk management and drive growth. With this, we can now open the floor for Q and A. Thank you.
Questions and Answers:
Operator
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 their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mihir Shah from Rigby Enterprises. Please go ahead.
Mihir Shah
Hi sir. Good afternoon sir. My first question was that we’ve been saying that we have tightened the collection guidelines and everything and we are focusing a lot on that. But sir, why does the 30 plus bucket still keep on increasing month on month Even though like 60% of our 50% of our portfolio is now insecure?
Deepak Aggarwal
Thank you Mayor. The reason is that because the bucket is increasing because one on the side, the AEM has not increased. So that’s one of the reasons. But you still have incremental fresh bounces which move towards npa. So that number is decreasing, you know, every quarter. That number is coming down from 18 crores in December to 13 in March to 10 in last quarter although that number is decreasing towards NPA. But you know, you will always have fresh flows, you know, to some extent. Having said that, you know, as so one is that the team has improved so you know, versus the worst scenario in September and October. Things are much better now. But having said that, you know Q1 is generally a weakest, you know, time for our portfolio which has been historically built that way, you know, we feel that you know, going forward things are starting to improve and you know as AEM also grows you will see especially starting Q3 that you know, GNP number will start decreasing.
Mihir Shah
Got it. And do we have a breakdown for secured versus unsecured in on these numbers?
Deepak Aggarwal
In terms of NPA?
Mihir Shah
Yeah.
Deepak Aggarwal
It’s about 80, 20. So I mean in terms of overall GNP 20 is coming from the secured book and 80% is coming from the unsecured book.
Mihir Shah
How do the write off start kicking in for this year and what will, what are your expected credit losses for this year?
Deepak Aggarwal
Credit cost for this year. So in terms of, in terms of percentage we are looking at around 3% credit cost this year and like the write off start kicking off this year.
Mihir Shah
And like do we have like I mean we have a 50% provision but after NP do we have a collection rate like we that matches that or is it slightly higher or lower?
Deepak Aggarwal
It is slightly. In terms of collection it is slightly lower. But having said that you know these are very recent measures in terms of you know setting up one is the legal recovery team which we have very, very recently done. So as I said that, you know till December of last quarter we only had 10 cases filed. Last quarter we had two cases, 116 cases filed. And this year the target Is to reach 3 to 4000 cases filing especially on the higher cost amount. So that gives a lot of benefit in terms of collection. And you know we are already seeing that, you know where we are reaching deliverable warrants level. Those customers are coming and you know taking out money although the number is very small. Plus we have very recently built on 90 plus collection teams and, and that is still coming up. So. So going forward we expect that you know, the numbers will improve in terms of post entry collection.
Mihir Shah
Got it. So do we have a number on that so that it will help us you know approximate the write offs for the year in terms of write off?
Deepak Aggarwal
Yeah, I mean post NPA how much are we able to get back like what percentage of in terms of among workforce industry? So that’s what I’m saying that you know it keeps on changing. So like you know in the month of March we could recover about 2.5 crores of the 60 crores in NPA. And the number is around post NPA is definitely in crores but it keeps on fluctuating. But you know the expectation is that as we go for legal measures and as we strengthen our team in the 90 plus bucket and you know agencies are getting employed. Rajasthan we started with agency last month, for this month we started with np. So as the team comes in place, you know the efficiency there will improve and on the overall basis as I said that, you know take a few weeks here and there but the costing on the overall trade cost. So like this quarter we took about 5 crore plus of Rise up and balances the ECL provision. So but in total expect a cost of around 3% for the current year.
Mihir Shah
I have none of our like most of our recent raises not being from banks, are we seeing lesser interest from the banks?
Deepak Aggarwal
So okay, the thing is that one, whatever we have raised from from MCD recently has been at a very reasonable price. So you know we raised 83 crore in Q1 credentials which is at 12%, 12.1% to be exact. And even in the March what we raised at it was at around 12.5% but very, you know at a four year range with 18 months moratorium. So one is that entities are not coming expensive. The second is the bank’s portfolio will increase. Because Q1 banks are relatively slow in the second quarter we really expect you know, bank funding to increase. So we never had so much discussion with banks in terms of lending. You know what we have now despite some elevation in the credit cost. So because relatively we are still better and we are really seeing that stu2 will see a lot of bank funding coming in.
Mihir Shah
Got it. Like you have any target for ROE and AUM for this year.
Deepak Aggarwal
In terms of Aum I can tell you that we are targeting at least 1400 crore for this year and we will have a positive RO in roe. Let’s see how the context proceeds.
Mihir Shah
All right, thank you.
Operator
Yeah, thank you. The next question is from the line of Sunidi Joshi from KP Capital. Please go ahead. Suniti, are you there on the line?
Sunidhi Joshi
Hello. Hello. Hello. Please go ahead. Yeah, thank you for the opportunity. You mentioned the marginal cost of funds at 12.1% with expectations of it dropping to single digits. So can you help us understand the key drivers behind this expectation?
Deepak Aggarwal
So you will notice that every year you know, some conception. So like you know in first year of operation we borrowed at 2018 rate of interest and 10% FLDG. So every year cost has been clearly coming down. Even if you see the last four year trend, the incremental cost of borrowing is coming down. So this year we have already, you know, with one bank we already have 11% and we are in this month or next month we are expecting that rate come to come down to 10%. So I’m seeing that range that you know now banks are coming in the range of say 11.5, 11.7 incrementally. We will be getting that rate even in this year, you know, even when the rating doesn’t improve this year, this year, I mean at least in H1. So this is as you grow your engine, as you achieve scale and improve credit rating. So pricing has to come down. With all the peers at the relatively larger bucket, the pricing is in between, incremental pricing is in between nine and nine and a half. So this is the way it comes down. And you will see that every year we have a track record of bringing the cost down incrementally from banks. I believe that we should be able to get maybe less than 11.5 this year as well. And as the earlier high cost debts get repaid and new loan starts coming so costing will decrease. So over two to three years, you know, on an average lending borrowing we expect to go to.
Sunidhi Joshi
Okay, understood. And another question, Q1 disbursements decline year on year from 106 crores to 92 crores. What disbursement do you anticipate for the rest of FY26 and what sectors of democracies with tribal.
Deepak Aggarwal
So yes businesses have declined. A large fact is one is the subdued market environment also all that you know our strategic shift towards, you know you will see that. You know that light shop businesses have decreased from 64% to 47%. That you know higher score customer has been increased, higher ticket loans have been increased. So there is strategic shift in how we are building our portfolio going forward. So that that requires some changes at our field level at a ground branches level. So some shift in thinking. In the month of May we discontinued loans below 3 lakhs for a new customer. Other than where we have some guarantee from Rabu foundation to build a catalog book other than that. So those changes also because these are the hard decisions we have taken. So they also impact the growth. Having said that the way we are seeing the logins coming in the month of July, we believe slowly and steadily these numbers will improve. And that’s where we are saying that because the ground team is very large with us now with 163 branches presence and 1,000 people in the direct sales. We believe that you know 1400 crores will be achievable. So. So that number in terms of businesses will increase every month.
Sunidhi Joshi
Understood. Thank you and all the best. Thank you. The next question is from the line of Hitanji Agarwal from ABS Investment. Please go ahead. Hi. Thank you for the opportunity. So my first question is with over 20% of Q1 SI 26 disbursements going to customers with credit score above 750. So how are you building your scaling, how are you building and scaling your credit sourcing framework to continue attracting such profiles in like semi urban and urban rural markets.
Deepak Aggarwal
So one thing here is that you know, shift of mindset, you know, which helps so all I mean you know the way some of the new branches touching. So if you see the six new states like you know Gujarat, Bihar and four states in south they have built with that mindset only that you know you have to secure only secure customer with a better credit ratings. So now you know on the ground that shift is coming also with, you know, solid laptop coming in, so these customers have a better, higher score. So I think there are multiple steps which we take in terms of, you know, adding the field staff, which are from the secured background, the VMs which are from the secured ground. So, you know, you start from the ground level, from the relationship manager and going up to the, you know, highest level. The guys have to be working from the secure background. So next is in August we will have a chief business officer also joining. And for almost two and a half decades, we have worked only on the secured loans. So to answer your question, it’s a change which you require at the organization level, at every level to take place. And that’s showing them end up showing up. So when you compare the divisions of last quarter, same year versus this year, they are very, very significantly different.
Sunidhi Joshi
Okay, okay, that’s great. So just one last question. Like the gross NPAs have risen to 7.28% and net NPAs to 3.78%. So what are the key reasons behind this increase and how do you plan to bring them down? And just to follow to this one, like, how does your asset quality, quality is in comparison to your peers, NBFCs in rural lending space?
Deepak Aggarwal
Okay, to answer your first question, see why the number is increasing. See, for this you will have, every month you will have some amount of incremental npa, you know, some customer flowing into NPA which increases that number. And you know, when the AUM has been, you know, not growing as much, so you will see that as a percentage, you will see that rise. So had the AUM being increasing, you will see the same percentage which we expect that, you know, going forward as we grow our aem, so that percentage will stabilize and then starts declining. So that’s one area. Second is that incremental NPA is decreasing. As I said that, you know, once we see what was the flow in December quarter, March quarter and June quarter. So every quarter that flow in terms of absolute amount is decreasing. The third is that in terms of recovery, we are bringing new changes. So you know, as you hire, as you hire telecommers, as you hire, you know, full staff, the first focus becomes that, you know, so now when I say hundred people, there are 40, 45 people in the X bucket itself and the large part of it is in 30 to 90 bucket. So you know, you first try to control that and then, you know, the recovery side, we have started appointing agencies, state cluster collection managers, cluster collection managers to improve the collection there and session going legal, I think as Market improves, especially with the secure because a very large part although secured or unsecured, we have seen that once at certain level, say at a billable warrant level, people really come to the branch and pay. So that number will increase bank more. So the way we analyze, 97% of our customers who are in the NPA bucket are still there in their homes. So you know we have always taken a strategy earlier that you know we are funding to customer who is at his residence only. So. So those customers are available there.
Sunidhi Joshi
Okay.
Deepak Aggarwal
So that I believe will help us, you know because it is not a digital lending per se where we have not, we are not able to reach or you know, branch doesn’t have a connect. So as market improves with Monsoon, as we know the crop environment improves, the aggregate income improves, these loans will come back. You know, especially when you have in maybe in around 80, 90% of my loans, say 80% of my NPA funding cost is about 1 lakh. 1 lakh rupee. 1 lakh 10,000. So these customers will pay up, you know and will not remain, you know like to go to jail or you know, get into legal issues and you know ultimately they will come at anything.
Sunidhi Joshi
Okay. Okay, that’s great. Okay, that’s all from my side. Thank you.
Operator
Thank you. The next question is from the line of Varun Mishta from ah Investments. Please go ahead.
Varun Mishra
Hi sir, thank you for the opportunity. I had a couple of questions. So like you mentioned the 23 growth in the AUM with a clear shift towards the secured and higher loan tickets. So could you elaborate more on the strategy and like how are we expected to see that in the long term profitability like we see the below 3 lakhs. The segment has seen a degrowth which is good as we move towards the higher ticket sales. So could you leverage? That would be great.
Deepak Aggarwal
It’s largely a change in the overall strategy. See one is that you know you keep on pivoting as you grow. So you know as, as I said that first year we borrowed at 20% IRR. Now incrementally we are borrowing at 12 from NBFCs and at around say 11 and a half from banks. So one is as your cost of borrowing declines, you have far better option to move to a customer which will give you a better security which will have a better security credit, various score and a larger ticket size. And with the secure loans you have a higher sustainability because it’s a seven, you know more than from five year kind of loan. So the sustainability is more foreseeable. So that’s the part which we are doing that, you know, as the balance sheet is becoming stronger, we are able to raise lower cost of fund. We are improving the debt in terms of, you know, customers now a lot of customers. We have done few cases as high as 25 lakh rupees loan to a customer wherein his VST sales should at about 6 crore in a year. So we never had that portfolio two years back because it’s such a large part of it is cattle. Now even with the cattle thing we are moving towards higher ticket. So there is a part wherein we are saying that you know, we have some, you know, first loss fees guarantees wherein we are doing less than 3 lakh ticket but largely we are moving towards the last ticket which is visible. So more and more of SME kind of lenders, well diversified in terms of their. And especially you know, in last two years, you know, there has been some rural stress, you know, because of floods and all. So you know these Customer in Frontier 1 areas are in that sense better off. And so you will see that, you know, all the rural lenders, I mean in the last one year specifically and especially which is MFI, they have won a decline of almost 30% for most of them. And also overall credit cost which includes the GNP right of standing at almost 30% wherein we are at 10% for a complete last one year including everything, you know, what has moved to GNP and everything. So that way I’m saying that you know one, our portfolio was much better than mfi. But yes, because of the real exposure, especially to the agri space to some extent there have been bit of, you know, higher delinquencies which I feel now improves. But you know, on this quality of customer portfolio, as I explained in the, you know the last question that we are moving ahead with a better customer. So you will see now more and more, you know, so as you’re already saying that for July itself we had a 70% reservation in secured portfolio and maybe cattle will constitute 40% this month. So that shift will continue and in next two years, maybe say next year it will be more like a secured lender. You know, earlier, you know people were looking at it as more of MFI plus. So that scheme of things is changing. So it is more secured and higher ticket size and with the customers having no exposure to mfi, I mean at least majority of customers will have no exposure to NFI over a period of two to three years.
Varun Mishra
All right, so answer like as you mentioned, the cost of boring has been like declining for Us. So like, would we see this as upward trajectory in terms of the higher ticket phases?
Deepak Aggarwal
Cost of boring. Now you mentioned the cost of borrowing is coming down, which leads us to having a. Like to move towards the higher ticket sizes. So can we see this nick going further? Any improvement? No, for sure. You will see this every quarter on quarter. You know, Q1 is very, very significantly, you know, if you see our presentation, you know, we have specifically mentioned, you know, how the book is behaving now. So on the slide number 13, you will see that, you know, in terms of disbursement, wherein we dissolve only 19% in 3 lakh and above. So every quarter we have, you know, improved it and this quarter, you know, from 19 to 50. So, you know, every quarter we have changed it. So this will continue. This will continue.
Varun Mishra
All right, so answer. I had one more question regarding the launch of a new app, the Catal AI. So it has been like the. Could you like throw in some light about what the app does and how can we see that letters improving our business in terms of disbursements and everything?
Deepak Aggarwal
This is a cattle AI app. We have been working for almost a year now on this. We have already captured almost more than 2 lakh cattles in our portfolio. So what it does is one, it creates a unique ID for all the cattle which we have funded historically and which the new customers, new borrowers, you know, so it’s a muzzle, using a muzzle technology to make an identification of cattle. Right now it has capability one to do a unique identification. So if, if there is pain cattle in my existing portfolio, it will show up. So, you know, what, what could happen in, you know, there are a couple of things we noticed, you know, which happens in a cat portfolio that, you know, some kind of, you know, duplication happens. So maybe, you know, if you have given one brother and you know, next time his, his brother shows the same cattle or within the neighbor shows the same cattle. So this, this application will help us one, identify the unique cattle. Currently it is also giving a guideline on the age of the cattle and going forward as we develop it, it will also show if the cattle has any visible disease which can be seen through skin, through teeth. So, you know, by looking at these. So this will help us because it’s a large portfolio and the customer will also be happy seeing the report in terms of identification of disease, etc. And definitely in terms of credit quality, it will help helped us a lot.
Varun Mishra
All right, sir, that’s all from my input. Thank you and all the best. Thank You.
Operator
Thank you. The next question is from the line of Ankita Deshpandia from VSH Advisory. Please go ahead.
Unidentified Participant
Hi. Thank you for the opportunity. Am I audible?
Okay.
Yes. Yeah. So I have a question like. We have observed a significant decline in the share of livestock based loans from 64 to 47%. Could you kindly elaborate on the specific challenges within the livestock sector that may have been contributed to this shift? And additionally what measures are being implemented to mitigate risks, expand into newer custom.
Deepak Aggarwal
So one, one is that currently the portfolio has not shifted. So earlier we used to have about 66% of the portfolio into cattle space. Now it is 63% at the portfolio level. So what has declined from 64 to 47% is the disbursement in the last quarter, which will continue. And so, so, you know, one reason is definitely is that, you know, building a more diversified portfolio. So you know, earlier for our lender, although you would see that every year there’s a lot of contribution, there’s a lot of support. But you know what, we thought that, you know, sticking to one particular segment with 2/3 of the portfolio is not the great strategy. So we have to diversify. So that’s one idea is coming from the diversification of the portfolio. Second is that in the last, specifically in the last one year. So if you see our track record in Covid 1, Covid 2, lumpy skin disease. We have not seen any major delinquency in the catalog portfolio. It continued to do well each year, only the last year what we have seen because of the flood and you know, impact of mfi, which is also, you know, other than, you know, some over leverage. It is also driven by mfi, you know, rbi. So there have been new guardrails, you know, which, which you know that. So MFIs are not able to lend, you know, to that extent, which was earlier happening. Although some signs of improvements are seen now. So you know that customer was getting impacted. So one, one also that shift is that, you know, because in this livestock portfolio there is NFI lending which is meant also that will help. So we are taking multiple steps. As I said, there is somewhere below 3 lakhs for a marginal customer who has 4, 5 cattle. We are working under a guarantee program wherein a part of our loss can be covered and then at a higher ticket size. Now we are taking there are salaried customers who have salary also with cattle also. So we are moving also towards from 5 cattle to 10 cattle, 12 cattle with stronger aggregate kind of customers. So it will remain you know, and then you said about. So I’m saying that cattle will remain a good part of our portfolio. But on a prudent basis we wanted to bring down the concentration towards cattle portfolio. So that’s one area and even in the cattle, as I said that, you know, cattle AI we are doing, we are taking multiple steps. You know we now have very high level veterinary services guy to ensure this portfolio tracking and productivity improvement. The second on your side that in terms of other portfolio what you will see is that we are moving towards better collateral value, better quality of assets which we get and better customer in terms of civil score as well. So NTC has declined with us. You know earlier we used to have 30% NTC, now it’s about 20% NTC. So that has declined. And Jira store is quite, you know, visible. Especially you know if you see the quarter one data. You know we have really made a significant effort in terms of, you know, securing a higher credit bureau customer.
Unidentified Participant
Got it, Got it. So that’s it from it. Thank you so much for answering. Thank you.
Operator
The next question is from the line of Darshan Shah from MNS Associates. Please go ahead.
Darshan Shah
Hi sir. Thank you for this opportunity. My first question regarding your AUM concentration, I think Madhya Pradesh is the highest at 31%. So are there any new geographies pan India that you are targeting to diversify your portfolio and reduce the concentration risk.
Deepak Aggarwal
So we have a very, very, you know, in terms of geographic diversification now we are very well diversified. So we are presence in 12 states and you know, incrementally you will see that you know, share of mother is declining. So as you know south takes up shape. So just to tell you that out of 163 branches about 25% are in MP. So one is directionally, you know, quarter on quarter the share of NP will come down. So it will happen organically. Right now we don’t have that plan of further diversification for this year. But yes, you know, incrementally you will saw this decline to 25% over here.
Darshan Shah
And so second was on this collection efficiency. So it was a two part question in collection efficient efficiency. When I look at your presentation, one is what happened around you know, September, October to like peak of March 25th where it almost peaked from 96.5 to 99.4 30 dpd. That was my first question. The second question was the follow up there obviously would be that what is then happens if it’s come down from the peak from 99.4 it’s now to 97. So I just wanted to understand these two phases in the collection efficiency. What happened, what you know, measures that you deployed there that it increased a lot and now that you’re also seeing it come down.
Deepak Aggarwal
One is that obviously March becomes a better quarter every time. And you know we introduced from February we introduced tele calling efforts across, across all buckets and you know it really helped, you know, given to, you know, almost a U turn. Having said that, yes, quarter one has suffered a bit. We really don’t have a very, very clear answer to that. You know, how it happened. But what we are seeing is that each quarter the number is declining, the absolute number. So you know what, I had a flow in MPA versus in June, it’s kind of 45% less than that flow to NPA in December quarter versus June quarter. So that number is declining. We still have that portfolio of build up earlier but there has been some pain around that. But we really feel the way things are happening, rural marketing is showing signs of improvement. So that money will come up, you know, a lot of that will come up and scenario will improve for the first time in July. The number of logins which we have seen is really, really high. Although I would say that because our processes have become very hard and you know, they are new so people are adjusting to that, you know, RC visit in every case which is 5 lakh and above. So every process has been a little more cautious. But you know the way now the logins are coming. We believe that things will improve in coming quarters and very significantly improve in coming quarters. So I think it is one year which was we started seeing pain starting July last year. I think going forward things will move northward side. So I’m not saying that in terms of GNP it has peaked maybe 1/4 more. But as we grow the AUM and collection starts falling in place, things will improve but we are taking a lot of steps which are in the right direction. As I said, ticket size, the bureau score, the kind of customer which we are picking up. So everything is moving in the right direction. And these things you will know take time. It’s not a one month job but every month we are making significant, you know, changes to improve this.
Darshan Shah
Lastly finally on the cost to income part, usually your cost to income is you know, around the 70s. I think in Q1 if I see your operating expense is around 22 and net income if it’s 331 and now this is now 30 and 30, it’s around 70, 80%. So I just wanted to check in red articles on, on, you know, on your company with you having debts in the branch and a lot of support that you give over and above your financing, livestock, artificial insemination, vaccination and zero cost. I just wanted to understand besides your traditional operating cost, how much do these additional kind of helping and services build up in that amount in that. And that is why are we seeing that the cost of cost to income is elevated. And secondly, all of this additional help that you give to your lenders, but ultimately does it translate to you getting lower GNPAs or better stickiness from a similar peer? Because then the customer is also much more appreciative of the fact that. Two questions from my end on this part.
Deepak Aggarwal
Okay, so the one part is that in terms of cost, so you know, for this year for this veterinary services, I see a cost of around 1.5 cr. Last year it was about say 1.2 cr. So one is that impact is there, but not very large impact. But you. But when I see that, you know, kind of, for example what we got from Jabu foundation in terms of almost 2.25 crore of first loss fees guarantee as a grant, it happens because of these initiatives which we take. So we had some study from Dell which helped us. There is something which is very close in terms of Gates Bridget foundation which is happening. So you know, these things. One is that, you know, you know, in future it will help on the ESG part of it, you know, you know, getting, you know, because when you’re doing these kind of activities, there’s a lot of support, you know, so I’m not seeing that that cost to increase further, you know, so now on, if we increase that veterinary base, it will largely be supported through, you know, some or the other, you know, grants or funds. So that’s one part of it. Obviously you can, you are able to track it more. So like the Catal AI app. If we did not had the presence of veterinary doctors in advances, it would have been very difficult to build this, you know, database. So you know, this machine learning thing required us to take images of 2 lakh cattle to, you know, read the stage. So you know, in terms of, you know, you can also, you know, because you know, if you have to deliver an IT product, we need people. So that way also it helps. And obviously when you have these guys, you know, and also yes, there are a lot of customers, you know, now, you know, when we had a 2/3 of cattle base. So it’s a lot of, you know, whenever the veterinary doctors are there customer would like to take a long. These services are complementary so it increases everyone and that has been helping us, you know, it helps us a lot during the Lungiskin disease, you know, wherein, you know, customer could have been guided about, you know, what steps to take. So one is on the ESG sites, which is a very, very large domain area in terms of how we do business. But also, you know, these have, these definitely have potential economic benefits as well them the way we do it. You know, on the agri side there, there are a lot of things, you know, now we have one guy who’s very, very senior, you know, and to drive, you know, what to grow, which results, how to improve the productivity. So that will definitely help.
Darshan Shah
Got it. That is really helpful. Thank you.
Operator
Yes, thank you. We will take that as our last question for today on behalf of Moneybox Finance Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.
Thank you.