SBFC Finance Ltd (NSE: SBFC) Q3 2026 Earnings Call dated Jan. 24, 2026
Corporate Participants:
Aseem Dhru — Managing Director and Chief Executive Officer
Narayan Barasia — Chief Finance Officer
Mahesh Dayani — Executive Director
Analysts:
Unidentified Participant
Chintan Shah — Analyst
Raghav — Analyst
Nitesh — Analyst
Harshit Toshniwal — Analyst
Shreya Shivani — Analyst
Ashish Sharma — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to SBSA Limited Q3FY26 earnings call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Chintan Shah from ICICI Securities Limited. Thank you. And over to you sir.
Chintan Shah — Analyst
Yeah, thank you Ikra. Good evening everyone and welcome to the Q3FY26 results conference call of SBFC Finance Limited. I would like to thank the management for giving us the opportunity to host their call from. We have from the Senior Management Mr. Aseem Dhru, Managing Director and Chief Executive Officer Mr. Mahesh Diani, Executive Director Mr. Narayan Barathea, Chief Finance Officer Mr. Sanket Agrawal, Chief Strategy Officer and Mr. Rajiv Thakkar, Chief Risk Officer. For the call we will have an opening remarks from the MD post which we will open the floor for questions. So now without much ado I will transfer over the call to the man to MD sir or thank you and.
Chintan Shah — Analyst
Over to you sir.
Aseem Dhru — Managing Director and Chief Executive Officer
Thank you. Thank you Chintan. Good afternoon to everyone and I’m sorry I have a bad throat so I may sound even worse than usual. On the horizon I see the following four things play out. 1 Ben Bernanke had said and now all countries across the world have been spraying money from helicopters. The central banks are finding the link between their interest rate and market interest rates broken. US and India if you see what’s happening is that 125 basis point reduction in Repo happened and the G Sec yields are formed up by 50 basis points. US also the same thing is happening now.
Next year it looks like the Indian government between the state and center will have to borrow over 30 trillion rupees on G Secs. And considering all of this I see that next year the interest rates may actually beginning to harden more than soften that we are seeing right now. So there is a change in season that I see playing out ahead. And banks also still haven’t passed on their rates. I mean if you look at nationalized banks their MCLR has come down by not more than about 30 basis points. So while repo has gone down, the transmission of these interest rates down the line is not happening.
They also have their own constraints on the fight on deposits. And RBI has its own challenge in terms of managing the Velocity of currency. And we will continuously this year see.
Aseem Dhru — Managing Director and Chief Executive Officer
The circus of.
Aseem Dhru — Managing Director and Chief Executive Officer
Being defending the rupee fall, sucking out rupee liquidity and then injecting that through market instruments, injecting the liquidity back. So this will ensure that the rate of interest this year is likely to either remain same or harden and unlikely to soften going forward. Second, the latest financial stability report of RBI has some concerns. Flat household debt is increasing at double the rate of financial asset creation. So between 2019 and 25, the report says that the household debt doubled to 15.7 trillion while the asset additions dropped from 12 to 10.8% of GDP even as liability went up from 3.9% to 4.7% of GDP.
Now if you look at end use, because ultimately that’s what it is, that if generally retail money is going towards home loans, that is a good place for it to go. That is positive. Unfortunately what is happening in India is that 46% of the money is actually going towards asset creation and end use consumption is 46%. So no asset is getting created for 46% of money. So half the loans that people are taking are in a sense filling fiscal deficit of their own that they are financing. I mean if you look at asset creation, about 36% of the loan goes towards that and for productive purposes, which includes things like agriculture, business and education, etc.
Is about 18%. So we are seeing weakening individual balance sheet. This means that loan growth will slow next year. The third thing which is a positive thing is that there is this time, see the year before stock markets did very well. So wealth effect was felt by the rich. This time gold has done brilliantly. So first time there is a wealth effect that is at the bottom of the pyramid being felt and we are about 35,000 tons of gold. So effectively what is happening is that the value of this is beating our stock market handsomely.
So there is a wealth effect that is playing out at the bottom of the pyramid which is a very positive factor. The fourth positive factor is that oil is likely to remain well behaved and that’s a good tailwind for India generally. It takes a lot to keep something boringly consistent. Especially when everything around us keeps moving and we have to move the boat steady and headed in the right direction at the right speed despite all the crosswinds and currents that we meet. I’m happy to report one more nothing to report quarter at sbfc. I would like to take you back to our GFM of last year where we had said that Karnataka ordinance has disturbed our steady portfolio.
If you remember the last April call we had said that the damage of a quarter takes 3 quarters to repair and another 3 to 4 quarters to restore. So we are now 3 quarters down since the damage and we are seeing that the flow is now contained but it will still take more quarters to start pulling back to earlier levels. So so we continue to guide caution. There is no change in our stance that we have declared so far. We are on track to end this fiscal year FY26 with an AUM growth of 5 to 7% quarter on quarter, a 50 basis points, reduction in operating cost and a credit cost where it is right now with a 510 basis point variation.
That can happen now. To end this commentary right now. There is never a right time to do anything but sometimes you feel it is that time. You feel it. It is a season of change at SBFC where I hand over the baton to Mahesh Diani. It is also a season of continuity as I move into the role as a non Executive Vice Chairman. I hope I can continue to add value to SBFC as a coach from being a player. So thank you so much and with this I hand over the call to Narayan who will take us through the numbers.
Thank you.
Narayan Barasia — Chief Finance Officer
Aseed hi Good evening everyone. The aum as of 31st December 25th is at 10,478 crore with a growth of 29% on a YY basis and 5% on a QoQ basis with almost 100% of our book secured by Properties and gold. The MSME AUM is 8497 crore which is almost 81% of our total AUM which has grown by 25% on the yoy and and 4% on a QQ basis. The loan against gold is 1954 crore is 19% of our total AUM have grown by 48% on a yy basis and 14% on a QoQ basis. We have added 10 branches during this quarter with a total branch count at 230 as of December 2025.
The ease for the quarter is at 17.78% with a reduction of 23 basis points on QoQ basis and 3 basis points on YOY basis. The cost of borrowing is at 8.74% for the quarter with a reduction of 22 basis points on a QQ basis and 57 basis point on a YY basis. Consequently the spread for the quarter is 9.04% which is at the same level on a QQ basis and has improved by 54 basis points on yoy basis, the OPEX continue to improve due to enhanced operating leverage in spite of our consistent investment in our branch network.
The GNPI is range bound at 2.71% with PCR at 46.2% with a credit cost of 1.29% for the quarter. The capital adequacy ratio is sufficient at 31.7% with a tangible net worth of 3,306 crore as of December 25. The return on average AUM for the quarter is at 4.67% with return on average tangible equity further improving from 14.09% in Q2 to 14.56% in Q3. The PAT of 118 crore for the quarter thereby reporting a growth of 34% on a YY and 8% on a QQ basis. With this we open the floor for question and answers.
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 2. 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 Raghav from Ambit Capital. Please go ahead.
Raghav
Hey. Hi. Thanks for the opportunity and congrats on the numbers. I have to questions 1 why have the disbursement volumes declined? So see, first I would have assumed that it’s because of higher stress. And then when I look at the absolute slippage number or even the GNP numbers, the stress situation seems to be largely stable. No major spike. Early buckets are also stable. So if stress formation is stable, is it competition which has impacted the disbursement volumes? Just wanted some color there. And then I asked another question.
Mahesh Dayani
Yeah, hi, this is Mahesh here. I think on a lighter note, to begin, I think it’s important to review your past stupidity so that you are less likely to repeat them. And I think quarter three, when we got into quarter three, the outlook way back then wasn’t too great and I think we had called out a little early that this quarter or quarter three is going to be a lot more cautious. Even while we are speaking, the color of the portfolio quality south in particular, if you look up the bureau scores are yet to be steady.
So they’re still flashing amber and they’re still not green. West and north markets comparatively are a lot better. So most of the impact that actually happened with respect to our disbursal growth came in from the southern and the eastern markets. And what we did was that we had tightened our filters with respect to bureau scores and also paused some disbursal in some of our key markets. And that’s where the big impact is. As you rightly mentioned, that November December seems to be a lot better than probably what we thought and the numbers for November December seem to be encouraging and we’re looking at quarter four to get our disbursals back.
But as Aseem articulated in his opening remark, our mood is still still very cautious because the bureau numbers are still flashing amber and it’s not green as yet.
Raghav
Understood. So see, your employee base has also been coming down. Right. And I would assume that’s largely because your outlook has been a little cautious with respect to generating business or doing disbursals. So once a disbursal, once you get the confidence, you know, on disbursals and on growing the business, is it fair to assume that your employee hiring will also step up?
Aseem Dhru
Yeah. So if you look at our employee count, our employee count hasn’t dropped. Our employee count over the last quarter in fact has gone up. The comforting factor is that my distribution and my people are there. The outcome with respect to the disbursal momentum is more internal, that we’ve done it on ourselves. So as the market tends to improve and as the outlook tends to improve, getting back to the disbursals is not going to be a challenge. Just to give you a sense that, you know, last year if you probably just go beyond a quarter.
So last year our disbursals were close to around 2,600 odd crores in the first three quarters. You know, even if I were to add the current run rate, we’ll be comfortably at between 3,000 to 3,100 odd crores. So our disbursal run rate will always be at between 18 to 20 odd percent. So I don’t think we are too bogged down with the momentum for quarter three because quarter three was more conscious of stabilizing our flows. And I think that’s what we kept reiterating. Looking at the quarter three numbers, it’s a lot more, we’re in a lot more confident position Both on our zero plus and our 90 plus, which gives us the confidence to speak out that quarter four is going to be significantly better in terms of momentum compared to quarter three.
Raghav
Understood. And you know, my bad, I stand corrected. Your employee number has gone up in pre Q. So sorry for Misreading that. The other question that I have is that your Chief Collections Officer has also resigned. Can you give me some color on who will step into his place and steer this collectionship? And also can you give me some color on the team strength and maybe the hierarchy in the collections vertical, you know, from which we can draw some comfort that despite this designation, the collections.
Raghav
Will not be include.
Mahesh Dayani
So see, it’s a slightly largest collection setup that we have been all through both for early buckets as well as matured and NPA buckets. So There are about 550 plus people in collections team on the ground. The new collection officer will be joining by the end of March. So in first week of April you should be there. So. Down the line because we have structure, there is a zonal head, there’s a regional head, there’s a full setup below. So we don’t anticipate any disturbance because of that. We wish him all the very best. He’s been with us for a good period of time. He’s seen the entire Covid period, etc. So he’s done a good job with us and we wish him the very best for his next move. But for SBFC it’ll be business as usual.
Raghav
Sure. Thank you. That’s all from my side.
operator
Thank you. The next question is from the line of nitesh from Investec. Please go ahead.
Nitesh
Thanks for the opportunity. So first question is on arc sale. I noticed that we have done some arc sale in this quarter. Is it in gold or SME business?
Aseem Dhru
This is on MSME business.
Nitesh
So R1 DPD also number gets deflated because of arc sale. Right? Or so.
Aseem Dhru
So ARCs. Yeah. The asset which are sold to ARCs are NPA. But yes, since one plus also includes NPA to that extent, yes, what you. Are saying is right,
Nitesh
sure.
Nitesh
Secondly, can you quantify the impact of labor code? And I noticed that our OPEX has reduced in absolute numbers on a Q on Q basis. So what is driving that and is it. Are there any one offs in opex?
Aseem Dhru
So the impact because of the new wage code is 2.24 crore for this quarter. That’s a one time impact. Obviously there were some excess provisions which no longer required and so those were reversed. So it is just a routine expenditure reversal. No, one time in a way. But obviously a routine expenditure which we thought will be there, which no longer was required.
Aseem Dhru
So see as we are seeing the environment, ultimately we have to get efficient. And efficiency is of three things. One is getting your cost of funds down, getting your cost of operations down and getting your cost of credit down. So in the current market environment, we believe that at this point in time we won’t be able to reduce our cost of credit immediately. So the first job was to contain it, which we have. The second thing is that efficiency has to be brought in by both reducing the cost of funds which we have and the market environment is facilitated to some extent and the cost of operations.
Now, when we had been moving a lot of things to ensure that we deliver that 50 basis point reduction in operating costs. So mind you, we are adding branches all the time. So it is not that as an organization we are matured or we are pausing growth. In fact, this quarter we’ve added 10 branches. We had a 2.3 crore extra provisioning because of the labor code. And despite that, we have been able to manage this deduction. Now this, it may be a one time higher number, but that 50 basis point reduction through the year that we had promised we should be able to deliver.
So. And we are working on what we should do to bring it down further next year. So ultimately it is just about ensuring that the company becomes efficient, uses technology better, automates things that it can, uses AI where it can be agent, call centers, etc. So there are lots of measures being done in the company to ensure that the operating cost keeps coming down. We now have moved to a cost to income ratio of 35%. So this is slightly nice cost to income ratio to have. But we believe we can do a lot better than this.
So we will be squeezing cost even as we are eking out faster growth.
Nitesh
Sure. And next year also we should expect 50 basis point.
Aseem Dhru
No, no, no, no. Next year we’ll guide in April, but it will not be so much. So we have delivered this three years. So after ipo, this is the third year and we initially we had guided it for the year one, we extended it by year two, we extended it by year three. So now by the end of this year we would have reduced it by 150 basis points. And at 35% cost to income ratio, you would agree that we are not so inefficient. But yes, there is scope. We will try to do better than this.
But exact numbers we will guide when we do our strategic numbers by the end of this month. So we will guide you the numbers in April.
Nitesh
Sure. And I also noticed that yield have declined by 20 basis point roughly sequentially. So have we passed on the benefit of freight cut to the back book or is it something else?
Aseem Dhru
So no. So as of now there’s no rate reduction per se but yes we have cut down small ticket lap as Mahesh was explaining earlier we have increased the bureau’s cures etc etc so that is all leading to a slight drop in the yield at overall level. So this is more like a hygiene, you don’t want to take the riskier customer and so the yield is slightly dropped.
Nitesh
Sure sir. And last question is on the opening comments that Aseem mentioned that household debt is increasing at double the rate of financial assets. So how do you see this ending up, let’s say next three, five years because if this rate continues then and what we see that all the NBFCs and banks are rushing towards retail lending. So how do you see this ending up for our economy and for the sector?
Aseem Dhru
It will be beyond my pay grade to comment on this but what I can safely say is that the quality of applications we are getting has been not very we are not very happy with it. So we actually said that we don’t want to below 700 Sibyl we don’t even want to look at a case. When we did that our logins dropped. Now logically it should tell you that your approval rate should be better because you are not taking in cases that you shouldn’t. But even after that our approval rate has continued to drop. And when we look at the leverage of the customer, when we look at trade lines, when you look at the recent borrowing behavior, it tells you that the lenders have been a little fast and loose with lending and we will have to be careful and protect our interest in what is not a very comfortable market.
And which is why I keep guiding that I’m not yet seeing comfort while we are at a place where all the numbers including NPAs across the system are looking at its possible lowest level. But this kind of a sharp increase in debt usually leads to problems later. And experience has taught us each time and each time we believe that it will be different this time. But unfortunately stock market it may be, but in lending it never is.
Nitesh
Thank you. Thank you. That’s it from my side. Thank you.
operator
Thank you. The next question is from the line of Harshit from Premj Invest. Please go ahead.
Harshit Toshniwal
Hi sir. Good afternoon sir. The question was related to the so obviously this quarter when we look at the numbers, dispersants were a bit more contained. And should we read that the reduction in OPEX to assets is also to do with the fact that a lot of the variable payouts linked to disbursements automatically come down for us even though AUM build up continues. So to that extent, if you can help that, I mean what part of the cost to asset reduction should be linked to more variable cost coming down? And the second point was on if. You can help us with the gold. Loan branches and the gold.
Aseem Dhru
So picking your first question, I think we have a hundred percent direct model so clearly there’s very limited variable that is linked and if the variable is linked with dispersal then optically only it’s going to come down. But it’s a marginal impact coming back to in fact the total head count has moved up in line with the number of branches that we’ve added. So which gives us your distribution is in place, your staffing is in place. We’ve consciously tried to tone down our momentum and as and when we feel confident we can get it back or we can ramp it back.
So our guidance for an overall year end number at 3000 crores against 25, 2600 crores. So that’s just to calm the nerves on the disbursal for the full year compared to where we ended on for the first nine months. With respect to our gold, our gold aum per branch is close to around 10 crores. Now we’re close in 54 crores, almost close to 2000 crores and the number of gold branches is closer to 200.
Harshit Toshniwal
The number of employees attributed to gold loan would be how much of me?
Aseem Dhru
So we would have roughly around 8 odd employees per branch. So that’s roughly around 1800. Audience.
Harshit Toshniwal
Got it sir. One last question was on the not this quarter specifically but if I take our average ticket size and sort of disbursement per employee roughly it comes at around 2 Pfizer if he is employed in terms of dispersal productivity. Now.
Harshit Toshniwal
If you look at the business in general and all the efforts on automation etc. Is this too right now limited because. Of the fact of the quality of. Files which we are getting or practically this is a limit beyond which the economics don’t stack up probably how should we look at this number improving over time? Because I think our cost to asset reduction journey is also now at a very optimal level. So from here on unless we improve the disbursement productivity, our loan growth will gradually start gravitating towards the disbursement growth number.
Aseem Dhru
Yeah, so right points. So I think our count is not two, the count is more leaning towards 1.5 and that’s largely because the login to disbursal ratio has come off and that percentage has dropped by almost 5 to 6 odd percent before we entered this financial year. This also goes on to show that despite a higher bureau score, the rejections are still high. Which effectively means that the leverage at an individual level or at a business level seems to be elevated and hence the conversions are not as high as what they used to be last year.
That’s one second. As you rightly mentioned, obviously we need to be efficient. Efficient with respect to our logins and ensuring the E signs which happen with respect to documentation which shaves off a significant time and effort and is going to ensure that the front end probably is able to deliver a lot more. But that is subject to the kind of filters that we apply and the kind of eligible customer base that comes through or the position of leverage improves moving forward. So what we’re clearly looking at it. If you look at our entire ecosystem that we’ve created, right from staffing of the distribution to making the front end enable customer onboarding through an entire digital journey is in place.
As we move along, I think we have the capability to improve from here, subject to obviously the ecosystem also being supportive and improving.
Harshit Toshniwal
Got it. Okay, sir, Perfect. Thanks a lot.
Aseem Dhru
Thank you.
operator
Thank you. Before we take the next question, a reminder to all, if you wish to ask a question, please press star and 1. The next question is from the line of Sucrit Tea Patil from ISIGHT Fintrade Private Limited. Please go ahead.
Unidentified Participant
Good afternoon, Ratim. I have just one question. With strong capital adequacy and steady cash flow, how do you plan to sustain net interest margins while managing funding cost and credit risk? From a financial process point of view, how will you structure liability diversification, working capital cycles and hedging mechanisms to ensure ROE remains strong and balance sheet continues. To grow in the coming quarter? Thank you.
Aseem Dhru
So, coming to your first question on nim. So as the leverage increases in our business, NIM obviously tends to go down. But I think the most important element here is to look at the spread. So if you look at the spread over the last three years or four years, when the market interest rate was going up and interest rate now coming off, we have been able to continuously look at a superior spread while also making sure that we are able to. Manage the credit cost.
Aseem Dhru
So I think what is important from our point of view is to ensure that we maintain the spread as we go along into the future and we tighten the belt wherever we are able to from a credit quality perspective. Coming to your second question on roe, opex, as you have seen over the last three years, OPEX has improved and we further Would like to continuously look at it and see whether operating leverages can further be improved. So ROEs from here we have now achieved a 14.5% ROE for the first milestone is to achieve a 15% ROE.
So why we maintain spread with the improved leverage and slightly better opex. ROEs should actually go up from here. The last question you have is on the debt and the mix. The mix has always been improving. Our bank borrowing total is about 50% or so. We have increased our borrowing from NCD market. We have already done that. We have DFIS now. We have now signed with two DFIs over the last year. So gradually we are moving towards a much diversified portfolio. We have now raised money from ECB market. So diversification is going to be key as we scale from here.
We will actually look at diversifying into much more new sources as we go along in future. Our debt equity is still very low. It is around 2. Capital adequacy is pretty high. Raising debt is not a problem. Liquidity is abundant and quite available. So diversification, yes, will be the course. Of action as we go along.
Unidentified Participant
Thank you. Best of luck for the next quarter.
Aseem Dhru
Thank you.
operator
Thank you. The next question is from the line of Prithviraj Patil from Investec. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity. So I had a couple of questions. The first one is on do we. Target any AUM mix for a gold. Loan business and because the mix of gold loans has gone up by 200 basis and I just wanted to know is that leading to the operating efficiency. That we are seeing in our OPEX to eu. Thanks.
Aseem Dhru
So you know, if you were to. Probably look back a couple of quarters, you would have seen probably 83 odd percent, 17% and 1%. The 1% was largely unsecured, which was a legacy book which we had discontinued. So that obviously has moved in favor of gold. Gold traditionally has actually been a high OPEX business. In fact, contrary to the belief that it would have been accretive on the OPEC side. But yes, this quarter because of the gold price support, you’ve seen a gold AUM increase in line with most of the peers who have reported those numbers. So one is obviously it’s profitable, yields are looking good and cost as such are in line.
And I think a lot of our existing MA branches which did not have gold have also started doing gold now. So there is some bit of saving there which is coming to our advantage. But I think the gold trajectory will continue to build in from here. So if you look at 2, 3 parameters we are at 10 crores per branch. If you look at mid sized companies who have probably 500, 600 odd branches, you would have an AUM of anything between 13 to 14 crores per branch. So even on our existing distribution, if we probably didn’t have to add any further branches, you could see an upside of 30% plus and that’s the efficiency that we’ll kick in with our existing distribution on gold.
Unidentified Participant
Okay, thank you.
operator
Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star and 1. The next question is from the line of Shreya Shivani from Nomura. Please go ahead. Yeah, hi.
Shreya Shivani
Thank you for the opportunity. I hope I’m audible. My first question is on the asset quality trend. I want to understand your provision coverage for stage three has, I mean on yoy basis it’s been up sequentially, it’s been flat. Can you help me understand if there is any management overlay that we’ve built into or is it just a number, purely a mathematical number that the model throws up? My second question is on the login detail that you gave that you are seeing even in a profile with A higher than 700 Sibyl there is over leveraging and probably more loans which are not towards assets at creating activities.
So is that an implication that probably more personal loan where the end user is not defined is visible to you in the kind of files that you are receiving? Also is it in certain categories of your customer like because your customers are all MSME borrowers, Is it more among the trading community or the servicing community where you see a higher chunk of personal loan? Maybe I’m just guessing that or any color around that. If you can share with us. Thank you.
Aseem Dhru
So coming to your first question on PCR and whether the management overlay increases the pcr. So management overlay has been made but it has been made on stage two assets have not been made on stage three assets. So to that extent the management overlay, whatever we have made has not increased the pcr. PCR has generally got increased. Looking at the way the portfolio is moving, etc. The PCR numbers are increasing. That’s all it is. We have not made any special provisions so far. PCR is concerned.
Narayan Barasia
On your second question, most of our customers would be small time traders and the thing is that the end use, most of these customers end use would be towards the working capital. Now when Aseem was talking about the consumption, I think he was talking about overall as a economy and the numbers which is published by report but our customers Most of the indus which we come across, while the personal discussion is towards the business and working capital, apart from the BT’s, which is around 15 odd percent of our book which wherein the loans are taken over and of course there is.
Apart from that 15%, there is also a part wherein we fund customers for taking our loans. Not much of our customers post our loans would have significant unsecured borrowing per se. And some of the things which now because of this increased indebtedness, what we have also done is that we have tightened some of the filters in some of the ticket sizes which are high risk from FOIA perspective so as to curtail the lending which we do to these customers.
Shreya Shivani
Sure. And just a follow up over there, you mentioned that most of your customers after your loan may not be taking a lot of unsecured. So your collection team probably is checking the Cibil score. I mean that must be a part of your business process, right? On regular basis to manage that. You know the outlook that you’re sharing, right?
Aseem Dhru
Not collection team per se, but at the risk level. We keep on tracking our customers on intervals when we see their behavior. And specifically customers which are borrowing outside and are delinquent. These are the risk angles which we look at on a periodic basis.
Shreya Shivani
Okay. Okay. This was quite helpful.
Aseem Dhru
Also from the foreclosure request coming in, we rate these customers as a reg flag so that when the foreclosure request comes or enhancement request comes, these are flagged so that we don’t announce these customers.
Shreya Shivani
Sure, that’s very useful. Thank you for sharing and all the best.
Aseem Dhru
Thank you.
Narayan Barasia
Thank you.
operator
Thank you. The next question is from the line of Nishin Chavate from Quoted Bank. Please go ahead.
Unidentified Participant
Hi, this is Nishant from Kotak securities. Thanks for taking my question. I just wanted to ask Aseem if you will be associated with SBFC in any specific role you’re in after.
Aseem Dhru
Yeah. So Nishin, the thinking is this that. While. Building the business out has its own pressure points and its own immediate deliverables. And I think somewhere the culture of the company, we can do a lot better than what we have done. So I want to focus now on time building on that part. And also whatever I was doing in terms of ensuring governance, risk control, compliances, etc. All those roles also I would be handing over. The intention is that the biggest challenge for any CEO is succession. And that is where a lot of CEOs even much better and much greater CEOs have struggled with post their departure.
The real test of my innings will be One year from today. The idea is to ensure that without any hiccup the entire transition happens. And to the best of what I can, I would be hoping to contribute to SBFC in the role now as a non executive vice chairman. So. On a lighter note, salary stops but work doesn’t. No doubt the team will continue to do as well.
Unidentified Participant
Thank you very much and all the best. Thank you.
operator
Thank you. The next question is from the line of Subhanu from Triad Capital. Please go ahead.
Unidentified Participant
Yeah, so can you hear me?
Aseem Dhru
Yeah,
Unidentified Participant
Hello. Yeah, so one clarification question from my side. Sir, you mentioned our gold loan mix can go up to 30% or so.
Aseem Dhru
Loan makes on what?
Unidentified Participant
Gold?
Aseem Dhru
No, no, no. So what we said is that the gold loan currently is 1920 odd percent. 19 odd percent. And we said that given the you know current spurt in terms of the gold prices and the resultant growth, you could see a couple of basis points moving up here and there but not a 30, 70 range.
Aseem Dhru
See our guidance for gold loan has been that it will be under 20%. Continues to be that a few basis points here there can happen. Now if gold rallies and doubles from here also who knows. So that’s not in our control. But even co origination we have said that it will be about 20% of origination and that’s what we have kept it at. So the intention is to keep it around 20%.
Unidentified Participant
Okay. Okay, so my second question
Aseem Dhru
was on. The growth of gold.
Unidentified Participant
Okay. So what is the average ticket side growth, average ticket site in the SMA segment this quarter? How much? My last question is how much customer are in the SM segment come from tier 2 and tier 3 segment.
Aseem Dhru
I think almost most of them would be tier 2. Tier 3. If I was to hazard a guess it would be more than 85, 90%. 2 and tier 3.
Unidentified Participant
Okay, thank you sir and best of luck.
Aseem Dhru
Thank you.
operator
Thank you. The next question is from the line of chintan Shah from ICICI securities Ltd. Please go ahead.
Chintan Shah
Yeah, so I just had a question on growth. So in our earlier remarks we mentioned the leverage levels are relatively increasing and the house household debt is increasing but so not is the asset creation. So in this context how do we see our growth going ahead? Will it be at the lower end of the guidance or probably even we could taper our growth further from there if there is a some more leverage happening and if there is a situation of a relatively slow growth or a crisis or as such.
Aseem Dhru
There is no crisis or situation. It is as I said in the. Opening of the call we continue to guide that we will be in the same range. 5, 7%. See 1, 2% here, there. I mean too much shouldn’t be read into it. So 5 to 7%, quarter on quarter growth is what we continue to guide. From what we are seeing right now. If we see that the deal is differently, you know, then we will, we will let you know. At this moment we maintain what, what we’ve been saying.
Chintan Shah
Sure. Got it, Got it. So yeah, in terms of our management on chain. So are we now expecting any other addition at the CXO level in the management or no? Yeah. So for Mr. Mahesh’s role.
Aseem Dhru
No, there is internal lab. I mean there are internal talents that we have, you know, there. So, you know, some, some, you know, elevations, you know, they may happen within that.
Chintan Shah
Understood. Understood. Yeah, that’s it. From myself. Thank you. And all the best.
operator
Thank you. The next question is from the line of Rivertash Arora, individual investor. Please go ahead.
Unidentified Participant
Hello.
Aseem Dhru
Yeah, hi, we can hear you.
Unidentified Participant
Hello sir, my question has already been answered.
Aseem Dhru
Thank you.
operator
Thank you. The next question is from the line of Ashish Sharma from Oakland Capital. Please go ahead.
Ashish Sharma
Hi. Thanks for the opportunity. I hope I’m audible, sir.
Ashish Sharma
Yes. So just wanted for some perspective on the credit cost. So credit cost which has sort of increased given, given the environment, would it be possible for you to sort of give any outlook on credit cost for FY27? I mean you expect credit cost to remain in the similar range.
Aseem Dhru
At the moment we’re guiding for the next quarter which is in the range of 5 to 10 basis point up or down for the next financial year. We’ll guide in the month of April. By then we’ll also see the color on what is happening in the South Book, etc. So we’ll have more knowledge. We’ll give you the entire year’s guidance in the con call of April.
Ashish Sharma
Okay, perfect. Thank you. That will be all from my side and all the best. Thank you.
Aseem Dhru
Thank you.
operator
Thank you ladies and gentlemen. We’ll take this as the last question for today. I now hand the conference over to the management for closing comments. Thank you. And over to the management.
Aseem Dhru
Thank you for taking the time in reading our results investor deck and the questions. Thank you so much.
operator
Thank you very much on behalf of ICICI securities limited. That concludes this conference. Thank you all for joining us today. And you may now disconnect your lines.