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LIC Housing Finance Ltd
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Ladies and gentlemen, good day, and welcome to the LIC Housing Finance limited Q4 FY '18 Earnings Conference Call hosted by Axis Capital Limited. [Operator Instructions] I'll now hand the conference over to Mr. Praveen Agarwal from Axis Capital. Thank you, and over to you, sir.
Thank you, Ali. Good afternoon, everybody, and welcome to this earnings call of LIC Housing Finance. From the management team, we have Mr. Vinay Sah, MD and CEO; and Mr. Sudipto Sil, Deputy CFO. I would request Mr. Sah to take us through the key highlights of the results, post which, we'll open the floor for Q&A. Over to you, Mr. Sah.
Good afternoon. At the outset, I would like to extend a hearty welcome to all of you for this postearnings conference call. As you would be aware, LIC Housing Finance declared its Q4 FY '18 numbers last Monday that is 23rd. The key highlights of the quarterly results are as follows, revenue from operations for the quarter at INR 3,901 crores, up by 7%. Total loan disbursements including local developers for the quarter was INR 17,402 crores, up 15% year-on-year out of which individual home loans clocked investment of INR 10,838 crores, a growth of 17%. Loan portfolio at INR 1,66,363 crores (sic) [INR 1,66,323 crores], up by 15%. Net interest income of INR 1,004 crores against 1,040 crores during the same period last year. Profit after tax INR 539.33 crores against INR 529.19 crores in the same period last year, a growth of 2%. Gross NPA at 0.78% as compared to 0.43% over March 2017. Individual loan NPAs stood at 0.42%. Net NPA stood at 0.43% as compared to 0.14% as on corresponding date of the previous year. Dividend recommended at 340%. The quarter under reviews saw demand sustained from previous quarter levels. Overall disbursements for the quarter recorded a growth of 15% with home loan disbursements at over 17% and was well spread out across geographies. Good growth was in the Western, Central and some location the Eastern and Southern part of the country. Apart -- amongst the metros, we are seeing strong growth at the Mumbai, Pune, Hyderabad and a pickup in NCR as well. Total disbursements for the year touched nearly INR 15,000 -- INR 50,000 crores showing a growth of 19% with core home loan disbursement clocking the growth of 20%. In FY '18, we had created 2 regional headquarters, one at Bhopal and another at Patna, covering state of NPH, of [indiscernible] Bihar, [indiscernible]. It is encouraging to note that these regions have clocked growth rates between 30% to 40% during the year. At the post Q2 con call, we had expressed our optimism in the affordable housing segment. We started showing signs of pick up in Q3 itself. During the fourth quarter, we have seen very good traction in affordable housing segment. About 12% of our incremental disbursement in the individual categories are in PMAY CLSS loan categories of INR 1,819 crores out of INR 15,136 crores. For the year, in terms of number of accounts, we have served more than 21,600 customers in this category totaling over INR 3,100 crores during the financial year with nearly half the number that is INR 10,300 crores coming in the second half of the year itself. In project finance segment, we have seen some signs of higher demand during the -- during FY '18, disbursements in this segment recording a growth of 33% year-on-year, and went up to INR 4,266 crores from INR 3,207 crores a year back. Post implementation of RERA, we are beginning to see the new launches increasing gradually. Our approach to this segment continues to be selective on case-to-case basis. The loan book growth continued to grow at a steady pace of more than 15% year-on-year. Individual loan segment growth was at 14%. The home loan book showed a growth of nearly 11.5%, highest in several quarters. As far as the composition of the loan book is concerned, retail home loans stood at nearly 81%. Project finance accounted for a little bit of [ 9% ]. The balance is comprised of other products like LAP, mostly to salaried segment and LRD. Prepayment rates have remained stable. In the fourth quarter, there has been a sequential improvement in the overall GNPA as compared to Q3 levels. There has been no further additions of NPA in the project finance segment, whereas there is been an improvement in the [ fixed ] quality in the retail loan segment. The GNPA and the retail category continues to be one of the lowest in the sector at about 0.42%. Total provisions including standard assets provisions are nearly 96% of the gross NPA. Recovery efforts are in full force on the few delinquent accounts in the project financing. Here in the fourth quarter, there has been a steep hike in the G-sec, yields with the benchmark tenure G-sec climbing by more than 60 bps, one way throughout the quarter, til about the last week of March. However, despite such increases, we have been able to achieve a decline in our overall cost of funds by a marginal 1 bps during the quarter. Our incremental expense continued to be around 225 bps. During our interactions, post Q3 numbers, we had indicated that margins have bottomed out. In Q3 -- in Q4, there has been a sequential increase NIMs by 16 basis points over Q3 FY '18 and the NIM currently stands at 2.49%. The interest rate scenario continues to be quite dynamic with significant [indiscernible] through there have been a pause on policy rates by RBI. Keeping in sync with interest rate scenario, we have increased prime lending rate by 20 basis points this month, which should support margin recovery. Towards the end of Q3, we also conducted a review of the fee structure on different products and services. This has resulted in higher fee income generation in Q4 by over 60% over the corresponding period of the previous year. This month, we have further increased fees across all product category. This should assist in increase in noninterest revenue. During the year, we started a number of initiatives in the technology space, especially in the area of cloud convergence and mobile applications for our several partners to assist the [ serious ] service delivery to our customers. Going into the new financial year, we are optimistic of the growth opportunities. For the year, we are planning to open 23 new marketing offices, which is nearly 10% of our existing branch network and the highest addition in a single year in over 5 years. Most of the new offices that are proposed are in smaller centers including that 3, 4 locations in the state of MP,] [Jalandhar ], Bihar and Uttar Pradesh. With this introduction, I would like to thank you and welcome you once again to the conference call. I will now take your queries.
[Operator Instructions] The first question is from the line of Kunal Shah from Edelweiss Securities.
Yes, actually with respect to the growth on the individual side, so it's been slightly volatile in terms of the individual as well as LAP. LAP on a higher base seeing some kind of a decline. But now being almost like 15% of the portfolio, how do we see in terms of the overall LAP growth going forward? And even in terms of the project developers move, so is it more a kind of a one-off? Or maybe given you are post RERA, we would look towards building up this portfolio?
LAP segment, as I said, the growth -- last year actually it was very good. So current year, if you compare it to the higher volumes that we did last year, the growth translate into about 9%, 10%. For project, it's not a one-off case, number one. Number two, project what we're seeing ahead is, as I've been saying throughout last year also, good projects we are open to. And post RERA, some comfort has come to us also. And we'll be -- we'll continue have more of growth rates and projects considered this year also.
Okay. So will it be like a significantly higher a growth given a very low base, which we are having today and the opportunity which is there?
Last year, the -- if you see the compilation of our book, last year we were projected to have a share of 3.8%. This has going to nearly 5% this year. And other growth rate, you can see in project it is about 33% in disbursements. Incremental growth if you see in project will bring more -- incremental share, sorry. So that would be around -- if I see, that could be around 8%, 8.5% of project for the year. But overall, book share is about 5%.
And how about the resolution out there in the existing stress on the developer book? So what's like the best kind...
Kunal, you're not clearly audible. Can you a speak little loud please?
So with respect to the resolutions on the stressed developer loan book. So when could we actually see something crystallizing out there?
I have burnt my fingers last year after this -- I mean, around the same time when I had my first con call, I said one of the accounts will get resolved in Q1. But what has happened is, it is still not got resolved because it's -- the money has, in fact, come to the court and the orders can come even today or maybe -- so we are waiting and I can't -- today sitting here today, I can't give you a confirmed date about it. But it can come. Regarding some other accounts also, we are in a fairly advanced stage of negotiations. I see that if not more than a couple of big accounts, they can resolved by the end of Q2.
By the end of Q2?
Q2, yes.
Okay. Lastly in terms of the fee income. So this is more sustainable since there has been structural rise across the [ R ] products. So this is not much to do with the developer book buildup getting reflected in terms of the overall fee income book.
Everything, everything. Developer book also, individual also, we have rationalized it somewhat.
Okay, so then this -- maybe, say, in FY '19, on a base, which is definitely in FY '18, should we see a relatively higher fee income growth? Because that's, maybe, it was under pressure over last 2-odd years, so should we say like that [indiscernible] run and [indiscernible].
Yes, yes. The fee income also, we are expecting as compared to previous years, we will have good growth rate. Good hike.
The next question is from the line of Shubhranshu Mishra from Motilal Oswal.
Within construction finance, just wanted to understand, what are the average ticket size and the number of deals that you've done this year versus FY '17?
Current year, in project finance, we did -- that, numbers I'll just give back to you. Total was 80, specific 80, 88 as against 73 last year.
Okay. And average ticket sizes?
Ticket sizes would be 4,200 is the disbursement amount. INR 40 -- INR 4,950 crores would be the average ticket size.
Right. And just one more thing, sir. What percentage of this construction finance book is domiciled in the top 5 cities?
Nearly 70%.
Nearly 70%, sure. And one more data point question, sir. How would you split your home loan disbursements in terms of new sale, resale and balance transfers?
See, out of 45,000 we did, nearly, say about, 45% is new sale. And about 30% -- a little less than 30% would be resale.
Right, sure. Sure, sir. And could you help me with the prepayment rates that you've witnessed in the fourth quarters, sir?
Fourth quarter, in fact, it has gone down slightly but not very significantly. So it still hovers around 9.8%, 10%.
And what was it in third quarter and fourth quarter of last year?
The third quarter was about 10.8%.
Right and 4Q '17, sir?
'17 was around the same, 10.1%, 10.2%. From that level, it has gone down.
Right, sir. Sure and just one last question I want to speak. Given the data consolidation, which is happening. Do we expect our ticket size increase on the construction finance base going forward in FY '19 and '20?
No, we would love to do it but there are actually -- see you maybe know, the full final shape of RERA has come up only in some of the states. So even this [indiscernible], the authority has not yet been set up. They posit in the state legislature but so that overall -- but yes, I do see that with RERA coming in, the project comfort that we want also will be there, and it may translate into better ticket sales also.
The next question is from the line of Digant Haria of Antique Stockbroking.
What proportion of the new loans that we are organizing our floating rate in nature?
Nearly, you can say that 55% also is floating.
And to that this is significant change in strategy versus what, like we have been following for the last 4, 5 years. So now for the next, 2, 3 years, should we expect that this margin royalty should come down because NICs margins, they have always been volatile. We are always trying to predict it and only one thing is certain that we go wrong. So just wanted to know that now should next 2, 3 years, be much more relatable as far in margins are concerned?
Last con call, I think after Q3, I did mention of it. If we see the total overall of our book, so now nearly 75% is floating, when we see the asset side. And liability side as we see, it's about 78% is fixed. So now with the -- any, even a slight increase in interest rates, and I'm getting in that making it account for our floating book, that is something, which is -- which I see is a very good thing for us.
Right, sir. And okay, so yes, I think it's fairly clear that now I think we won't see such margin volatility at the end, maybe we benefit once the rate...
As we've said before, last year, we had brought down the P&L by 20 basis points, which was effective July '17. So now current ones in April, we have again increase it by 20 basis points, the brands and index. So that will affect some of our back book -- full back book as of late for floating cases.
Right, sir. Okay, and what do FY '19, given your -- where your individual loan growth starts beating your overall loan book growth because it's almost 2, 3 years that our individual loan growth has been lagging this, and you know probably, we have been growing lower than even the system growth rate. So will FY '19 with...
I hope so because -- but this year also we have done it. Our core loan -- your retail loans, we have shown a growth rate of 20%, 20.4% to be precise. And overall growth rate is, if you see, only retail is 17.7% and total -- all disbursements is 18.8%.
Sir, I was referring to only individual home loans, which is like 11% Y-o-Y growth.
I were talking about incremental disbursement. Overall, yes. It has been in the range of about 11%. Overall, it has been in the range of about -- if you see retail about 13.8%. So we will see that overtaking that, may be tough, but then all our efforts would be made to take it higher, and it will certainly go up is what we believe.
The next question is from the line of Manish Shukla of Citigroup.
The 20 basis points and TLR increase in April had overall one-digit growth rate and 75% floating rate -- book. And does it get repriced in first half or will it be gradual throughout the year?
No. It can start right now. The first of them.
The entire 75% book? What is...
Impact including percentages of 75%, yes.
So it will that will be repriced let's in the first quarter?
Yes, yes, yes.
Okay. And can you go through what changes you did for the fee income in the previous quarter and what in this quarter in terms of the rates that you were charging earlier what do you charge now? The fee structure that is...
You're talking about rewriting fees or the processing fee?
You said that the increase of fees across the board. So what are the...
We had a relook. Earlier, it was 5,000 up to 1 crore and 10,000 beyond that. Now we have made it 0.25%, subject to maximum of 20,000 in one group and 50,000 in the other group.
And any changes on the project finance side, please?
Project finance is -- well, it depends from proposal to proposal. That defined a processing fee earlier also, it was not there but there also we have internally tried to rationalize it and instead of having add off charges, thereby our regional managers were able to finalize things. So most of the things are coming to us, and we see that we take at least 0.5% or something in -- I mean depends on case to case. In fact, I mean, last year what we have, very consciously, done is focusing on the processing fees and the rewriting fees and other things.
And fees LAP [indiscernible]?
Can you repeat please?
Fee on the LAP book, where you are [ struggling you are ] same as retail loans?
Yes.
Okay, then the project loans, as you said, your comfort for doing project loans probably goes up [indiscernible]. I'm assuming that could be planned for the most lenders. Do you believe that will bring down the yields in that segment more relative to what you're doing right now so, for example, let's say the spread between current financing and retail is roughly 400 basis points today. Can that spread narrow because of competition?
No, see on RERA, this -- the competition more or less defines this -- what rates are finally offered to the developer. So post RERA, I don't see getting much affected. It continues to be the standard but...
Okay. Your mix has changed in favor of [ royalty ] loans and loan against property, yet your incremental yields are declined. What could drive that and an incrementally, the last year was 10.8. This year, it is 9.8 and full year basis despite a mix shift in asset mix towards higher ending assets.
No, see that -- if you see it some of this comparison, the last year point of view, our yield is whatever we are getting is during this particular, it's not that last year we did too much of project and other things. Number two is that last year, if you remember, sometimes in the month of June, we brought out that 8.35% lending rate product for it. So that also had effect on this.
But at the same time, your LAP loans and project loans should get much higher yields right, right? So on a blended basis, where...
That share has not gone up. You see that share has not gone up that drastically.
Okay. Last question, for the quarter, can you divide the individual displacement between retail and lending, home loan [ in Q4 ]?
Retail was [ PRR ] quarter was INR 10,000 -- as I said in my opening remarks, it was INR 10,838 crores, project was INR 2,266 crores, and LAP and other things there, INR 4,200 crores also. Total of INR 17,400 crores.
The next question is from the line of Dhaval Gada from Sundaram Asset Management.
Just one question. Can you share the incremental yields on individual home loan LAP and developer for the quarter?
Yes. Actually, if you see the individual loans, incremental yields will be in the range of 8.7. And this is the core that is the pure mortgage home loans. For the builder loans, it is around 30.
Okay. And LAP was?
LAP was around slightly less than that, 10.7 of thereabouts.
Okay, so broadly unchanged from last quarter?
Yes. There has been no reduction in the pricing in Q4.
The next question is from the line of Sangam Iyer from Subhkam Ventures.
Just wanted a small clarification first. Did you mention in your earlier remarks that you're looking at the project mix moving to 8.5% of the overall loan book?
No, no, no. I said that incremental, if I see, only for the year disbursements, so project constitutes about 8.5%. But overall, book has gone up from 3.8% last year to about 5%, basically.
Correct. So is the current ones that we are seeing of 81.5 and 40, is that the kind of mix that you would go see in the next year's loan origins with the growth coming?
Yes. We are quite focused on project cost.
So once again, the overall growth that we are referring to next financial year, sir?
We -- that starting with the basic materials. Last year also, we starting wanting the 15% overall growth. So we will, again, stick to that only for the time being.
Wouldn't the base effect of the headwind that we had last year because of RERA, et cetera, now that that's behind us, wouldn't that actually have provide us as the tailwind in terms of incremented projects and incremental approach coming through, which could actually help us grow beyond the 15%, in the base of it?
No, no. The difference, as I said, earlier, this is what we started. We -- incrementally also, we have targeted a 15% growth rate for disbursements. There, we landed overall at around 18.8%. And if we see the back book growth, overall, it was 15.1% and there, the core also was 11.2%, which again is one of the highest.
Okay. So sir, just a small question on the fee hikes that have -- that you've taken across the product categories. Given that, predominantly, all the banks since origin focused on, et cetera, are actually looking to increase the housing loan component in [ retail ] environment and the differentiating factor could be the preliminary increase of the set of the whole year. So in such a scenario of hyper-competition that is kind of building that system for the retail pipe, how do you see the passing on of this incremental fee hikes that you're taking?
I -- this revision, we have done after taking into consideration the same that is existing in the current market by all competitors, banks. Earlier actually what we found out was that probably we were missing on this, missing on this aspect. We were not very particular about the view of the rates had not happened for practically a very long period of time. Now most of the banks that you see as on date are charging upwards of 0.25%. Some of them are charging -- State Bank, in fact, I should not name it, but they are charging 0.35%. Some of the banks are also charging 0.50%. So we are trying to rationalize it somewhat. So I don't see the hike is, number one, is too much for the customers and it is quite reasonable and [ being accepted ] by the customers.
Okay. And do you see any further pressure on your overall yields going forward incrementally? And -- because the assumption being that it generates no growth for them, because if that goes up then, obviously, the pressure eases up For you on the yield front.
No. As I said, the plan [ PLR ], we've already increased from April by 20 basis points. So this will affect the 75% of our floating book, so we are bound to grow.
The next question is from the line of Nishant Shah of Macquarie.
One quick question on your fee income. Could you give us a split of the fee income, what percentage is core fee income, what percentage is any insurance cross-sell if you are doing anything?
No, insurance cross-sell, nothing.
Okay, may I ask, why not? Like do we have plans to enter into any relationships with other insurance companies, if LIC doesn't have a suitable product?
No. We had a product on that end, which was not doing well, and probably, because of the higher amount of PMIs translates into. So currently, we are looking into a product but that will come only we'll get through our suitable one.
Okay, sure. And just one quick question on your cost of funds. So the incrementally, for FY '19, what could be your cost of funds? I think we exited the quarter at about 8.3 but what would be incrementals for FY '19?
That is not incremental, Nishant. That is actually...
Yes, that is...
Incremental was 7.55 for the year.
Correct, so 7.55 was incremental for last year. Anything on FY '19, what...
As for FY '19, [indiscernible] should remain around these levels. There could be -- I mean, it depends upon the RBI policies. As of now, it appears to be remaining stable at this level.
The next question is from the line of [ Prashand Bhuttar ] from [ AGIS ].As there no response, we will move the next question from the line of Aditya Jain from CLSA.
This is Prakhar. Just wanted to take some clarity on what is the stock of your existing borrowings that will come up for maturities in FY '19? And as of now, what would have been the cost of this work?
I think around 21,000 or so and would be 8.4, 8.3.
And in April or in May, what would have been the profit, which you have raised, incremental funding?
As of April, we have just done a couple of small [ CP transacts ] and they have come up in the bottom of 7.3.
Okay, okay. So do you think on the INR 21,000 crores repricing, there is a possibility that even with the rate hike, you will be able to [ rate ] at lower cost?
Yes, most likely. Because 8.52 is the contracted rate and as a matter of fact, now we should be in a position to raise it, it's kind of funded at lower than 8.5.
Okay. In terms of maybe NPA side, you had mentioned in your opening remarks about the corporate accounts, which is driven by the courts, have received funds but is due to come. Can you just remind us about what is the quantum of this loan? And what is that is holding back the payment coming back -- coming to LIC Housing Finance?
See, it is around the principal outstanding balance, INR 42 crores. Around INR 40 crores to INR 42 crores. And we're expecting that not only we will collect the principal but also at least INR 25 crores, INR 30 crores of interest on that. And that account is 100% provided.
Okay, okay. And NPA classification about INR 660 crores is the individual NPA. How much of that will be on LAP and how much of that will be on housing range?
Housing would be around INR 525 crores, balance is INR 130 crores, INR 135 crores is LAP.
Okay, and the LAP book features haven't really changed, right? You were doing a small ticket loans to existing customers for really long period of time. Has that base features sort of changed with very low [ NPVs]?
Yes, [ NPVs ] continues to be very -- quite low. And yes, the basic type of borrowers remain the service class, mostly service class.
The next question is from the line of Bunty Chawla of B&K Securities.
One quick question, your incremental spreads have come down to 2.25%. So can we expect this to increase in Q1 FY '19?
Yes, actually the incremental may have come down partly because of the sharp rise in the borrowing cost in the fourth quarter. There you would see sequentially the cost of borrowing is almost 20 basis points. But post last week of March there has been some reduction in the cost of funds and also as I already mentioned, you have increased the pricing on our products, so that should ease the -- or improve the incremental effects.
Okay, have you seen -- the borrowing costs have increased but we all know that Q1 basically, the margins have improved by 16 bps. Although increment spreads of...
That is because of collections, et cetera.
Sorry?
That is because of higher levels of collections.
Higher level of collections. Okay, that was the main reason for that. Okay, so can you say that 2.49% kind of a thing can we expect similar margin in Q1 as well?
Yes, right now, if you look at it, we will get a substantial benefit from the increase in the PLR. This will be around 70%, 75% of our loan book, so that it still should help us in stabilizing the margins.
But incrementally, given the cost of funds might also increase similarly, no?
No, it doesn't look like. As of right now, it looks like the incremental cost might be slightly lower than the Q4 levels. It's really wait-and-see about what happens on the bond market with a lot of volatility also coming in the place. [indiscernible] which has come in, in the last few days of [ proceeds ].
Right. And can you give me any internal targets for developers from the portfolio has increased from 4% to 5%. Any incremental targets -- internal targets for us to reach 6%, 7% or 8% next 2 to 3 years kind of a thing?
No, as I said, before also we are open to going aggressively to project loans. So at the most, 7. Percentage-wise it will not very increase that significantly. But yes, we are showing and looking towards the share maybe 1% or 2% more.
The next question is from the line Rahil Shah from AMBIT Capital.
This Pankaj. Sir, my question is on your rate where you said that you increased your PLR by 20 basis points, but if I check your rates on your website I know that the home loans it's still at 8.35. So is it?
PLR affects that back book of the existing loans and product internal changes what we have done is that the 8.35, I can say, this is typically our kind of a rate which is we are now -- earlier it was applicable to women borrowers under INR 30 lakhs, now it is applicable to women borrowers under INR 10 lakhs. And the second line as, which we were having at 8.4, that we have increased to 8.45. So these are -- the product actually remains the same. But the rates given there have been changed. So that 8.35 will, for publicity purposes, it will remain like that.
So if I understand it correctly, you have not raised the rates from your borrowers, right?
We have that's what I'm saying.
Pankaj, I think, what you mention is that earlier the 8.35 was available only for loans up to INR 30 lakhs with special conditions, [ MEDI ]. Now it is available for only for INR 10 lakhs. So if you look at it, there has been an increase for loans above INR 10 lakhs after INR 30 lakhs also. Now moving on to the next category. It's a reclassification of the various plans.
That we were giving an 8.4. Now we are giving that at 8.45. And beyond INR 30 lakhs now we have increased it to 8.50.
Now my question that now you've raised rates for all borrowers in the market rates as well as your rates for new borrowers were only increased by 5 to 10 basis points. Don't you think your prepayment rates will go up drastically because of this?
No. Actually it will not because the differential between the back book and incremental rates have come down. Over the last 1 year if you see, post our reduction in the PLR and subsequent huge amount of repricing which has happened on the move. If you see on the back book, the weighted average yield on the back book right now is much closer to 9%, which was in the range of 9.6% to 9.7% about a year or 15 months back. So the gap between the incremental lending and the back book has narrowed down to the minimum in the last 2 years now. It is a minimum in the last 3 years.
And do you think this gap will further narrow down?
I think, if there's a further increase in the lending rates in the system, then rationalization will happen. But most of the -- actually post the monetization, when the rate of interest has actually come down, there was a lot of prepayments and repricing, which happened on the back book. But that itself as reduced the gap.
And sir, you are increasing your disbursement in developer loans. But if you see your past experience here one of the highest NPAs in this particular loan book and compare your peers, right? Have you changed your procedure, systems or anything in order to grow at such a high pace?
We had to look into our full SOPs. The developer loans until -- whichever have gone into NPA. We have no issues as far as the securities are concerned. So that will take some -- resolution will take some time but we're very positive that it's not -- it isn't a case of writing off later on. And all the loans have been provided [ worth ] only.
If you look at the overall numbers, see actually, we are adding on 220 to 230 lives on accounts out of these 5 or 6 other really delinquent or big delinquent ones. This gives us account for almost 70% to 80% of the total gross NPAs in the project side. So if it is not to say that the effects of the underwriting capabilities or the underwriting qualities is not good.
Okay. And finally your retail NPAs, they almost doubled year-on-year basis. Though, in absolute terms still very low but if you look at the last 10 to 11 years projects, after 10 years of continuous improvement, this is the first year you have seen an increase in NPAs here. So anything changing here? Is it because of external environment or your product mix shifts, any color on this?
Mainly, because of such things that we agree with, we needed the experience some pressures on this front. But again, it's something, which is manageable. In fact last year only, sometimes in Q3, we created a separate set of people in all our offices to be aggressively operated, and you see that we have at least reduced on the December levels -- Q3 levels as far as the even the core NPA growth. And going ahead also, probably we are looking at these NPAs also coming down substantially.
And to answer your other part of the query regard to the composition, we just, if you want in a nutshell the MPL on the various segments. There, the [ SPS ] and all the -- on the home loan side, around the non-home loan side is almost identical.
Okay. And last one you said that 12% of your incremental business are coming from affordable housing, the PMAY scheme?
Yes.
Now what I heard is that what industry as discussed in the last 3, 4 months, the subsidy is not coming into account.
No, no. That's not the case. We have filed for and apart from those cases, where there are some requirements, some further data is to be given some data inconsistencies. We are getting subsidy.
The next question from the line of Umang Shah from HSBC.
I just have one question. Our OpEx this quarter has gone up about 52% sequentially and the cost to income has also crossed 20%. Is there any one-off in the employer on the other expenses? Or this is just a normal business expense?
See, this partly is -- it actually is a normal business and the cost-to-income right now is hanging around 17-ish. We always between 15 and 16. So there is a small uptick but mostly it is in line.
Okay. So ideally, would it be fair to say that on a full year basis, it should remain about 16, 17 and indeterminately during particular quarter you might see some volatility?
I will feel that the range should be between 15 and 16.
The next question is from the line of Nischint Chawathe of Kotak Securities.
Just one question from my side. In terms of the recoveries that you are looking at on the developer loan book, are these more recoveries from developers? Or is it kind of more of a transfer on loan taken over by somebody in competition?
The resolutions, do you say?
Yes.
The resolutions, are not the ones -- the resolutions will come from the developer mostly. [ It's a goal ], usually don't happen once the project becomes NPA. But because usually don't happen. 99.9%, that won't happen.
Sure. And just wanted to get the NPA number. You said NPA in your housing is around INR 525 crores.
Yes.
And around INR 114 lakhs.
INR 135 lakhs.
Next question from the line of Kunal Shah of Edelweiss Securities.
One more question, broadly in terms of the overall growth. If you look at last 2, 3 years or certain quarters. The 8 in terms of the individual loan, including the [ lakh ] had been around 14-odd percent. Given on the your home loan, say, we are at almost like 13, 14. So there is a clear loss in the market share when you compare it with the industry as such, and when you look at our years and sector, everyone has been growing in phases to maybe like a few of the players are actively, they are growing at more than 25%. So given the funding cost advantage, branding everything, at any point in time, would we look at, say, growing higher than the industry average? Because there are opportunities, other players are doing it. They are also maintaining the overall asset quality at the similar level. So what would take it may be in terms of getting a relatively more aggressive and trying to get the market share, but not at the cost of profitability so we are not seeing any kind of impact on the profits as well? So when does that stance change on what would it really take it to -- for that kind of a change in strategy.
No, current year, we are looking at growth rates, which should be better than the industry growth rates, number one. Number two, as a matter of strategy, as I mentioned in my opening remarks, the first thing that we are doing is opening of 23 new marketing offices. Now that will increase our spread also. It will bring in more numbers and out of these 23 marketing offices, some 6 or 7 are at centers where we already have a branch. But our rates start at Tier 2, Tier 3, where we don't have a physical office presence. So this is intended to do that. Number two, we are also thinking in terms of having a new vertical, which is equivalent to a direct marketing sort of a vertical, which is in a very advanced stage of implementation, maybe by the end of Q1, it will be in place. So that also we are attempting to see that we get more volumes and growth rates are matching the industry growth rates.
Okay. And anything on the self-employed side because there is opportunity out there as well. Okay, so are we looking on the...
No, we are doing those loans. It's not that we don't do it at all. If we see amount-wise still about -- you can say 75 or 76 is our salaried. Incrementally if you see 76 would be about salary class, maybe more also. And about 12%, we are doing from [this group also].
Okay, so within individual it would be 75, 15?
More than 75%.
But 12% is coming from self-employed.
12%, yes. And that business on self-employed, that's separate as we have categorized.
Apart from the LAP[indiscernible].
No, I am talking about total book.
Okay, so we should see a relatively higher growth this year onwards, maybe, compared to the industry average?
Yes.
The next question is from the line of Nidhesh Jain of Investec Bank.
My question is are incremental yield that you mentioned that some [hover around ] incremental yield [ 8.7% ]. What are the incremental yields for the month of April and are these yields annualized or are they are on a project basis.
As far as the yields in April are concerned, April yields will slightly better because we have revised the rates in itself. Second [indiscernible] especially. [ Second ] yield will be around 10 basis points higher.
And this 8.7% is annualized yield or is on current rate.
It is incremental for the year or yes -- last year?
Sir, last quarter you mentioned that home loan incremental yield is 8.7%.
Yes, so that is not annualized.
We have the last question from the line of Ritika Dua of Elara Capital.
Two questions, but firstly if you can again repeat disbursement mix between individual and LAP. And the second question if I could get the interest write-back for this quarter.
Disbursement you want for Q4?
Yes, just for the quarter.
Core is INR 10,838 crores. Non-core is INR 4,298 crores and project is INR 2,266 crores. INR 17,402 crores.
And sir, if you don't mind, these numbers are last year same quarter was -- if you can also share.
INR 9,200 crores was core, INR 4,700 crores was non-core and INR 1,232 crores was project.
And just a last question interest rate.
Sorry? Can you repeated it?
Interest write back this quarter.
Write-back, like...
You said you had recoveries so...
Oh, recovery from write-offs. That would be around 3 or 4 points, not much.
That was the last question. I'll now hand the conference over to the management for the first comments.
Well thank you very much to all of you for participating. As I said after at the end of Q3, probably as far as the NIM margins are considered they were at the lowest. They will go upside. They have gone for upside and we will continue working to see that they improve in the coming quarters disbursements. Q4 disbursements were one-off. I think if we don't see growth but if we see the volumes in fact INR 17,400 crores is the best ever disbursement in any quarter for our company. So that was also an [ upside ]. We will continue to build projects also. Q4 was very good for us. We did INR 2,200 crores on projects, which showed a growth rate of more than [ 80% ] and that also. So there also. Projects will contribute a good amount in the coming [ fiscals ]. Thank you all the best to all of you, also.
Ladies and gentlemen, on behalf of Axis Capital Limited, that concludes this conference call for today. Thank you for joining us, and you may now disconnect your lines.