Piramal Enterprises Ltd
NSE:PEL
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Piramal Enterprises Ltd
Earnings Call Analysis
Q1-2025 Analysis
Piramal Enterprises Ltd
In the first quarter of FY '25, Piramal Enterprises Limited reported a net profit of INR 181 crores, an increase from INR 137 crores in the same period last year. This uplift reflects the continuing upward trajectory of the company, primarily driven by its retail and wholesale lending operations. The company's total Assets Under Management (AUM) grew by 10% year-on-year to INR 70,576 crores. Notably, the growth AUM skyrocketed by 51% year-on-year, now representing 82% of the total AUM, compared to just 34% at the end of FY '22. The retail segment demonstrated a healthy 43% year-on-year growth, achieving an AUM of INR 50,530 crores, while the newly introduced wholesale lending sector increased by 132% year-on-year.
The growth business experienced a robust increase in Net Interest Income (NII), reporting a 34% year-on-year growth, fuelled by the impressive AUM expansion. The Net Interest Margin (NIM) stood at a healthy 6.7%. Furthermore, efforts to manage operational expenses are showing results; the OpEx ratio to AUM has declined by 104 basis points to 4.6% year-on-year. This operational efficiency contributed to a stunning 48% year-on-year increase in operating profit, reaching INR 375 crores for the quarter.
The asset quality appears solid, with retail 90-day delinquency rates maintained at 0.6%, while there were no delinquencies reported in the wholesale 2.0 segment. However, gross credit costs increased to 1.6%, up from 0.8% in the previous year, partially due to a one-time write-back in FY '24. The incurred credit cost in retail is estimated at 1.6%, and is significantly lower than the 2.1% of the same quarter last year.
Piramal has been actively running down its legacy wholesale AUM, with a significant reduction of INR 1,597 crores to a total of INR 12,975 crores, a decrease of 50% year-on-year. The company aims to diminish this figure to below 10% of the total AUM by the end of FY '25. This strategy reflects a careful approach to mitigating risk exposure associated with these legacy assets.
The merger of Piramal Enterprises Limited and Piramal Capital and Housing Finance Limited is advancing as scheduled, with the board's approval already secured. The scheme has been filed with stock exchanges and awaits necessary regulatory approvals. Additionally, Piramal has diversified its borrowing strategy, with securitization now accounting for 12% of total borrowings, up from 3% a year ago. The company successfully raised $300 million through a sustainability bond that was significantly oversubscribed.
The retail lending segment showcased remarkable growth, with disbursements up 19% year-on-year, reaching INR 6,816 crores. The flagship mortgage segment, which includes housing and loan against property, grew 37% year-on-year to INR 34,104 crores, accounting for 67% of retail AUM. This growth comes despite facing a regulatory impact that temporarily affected around INR 255 crores in disbursements. Importantly, the mortgage book's asset quality remains robust, with low delinquency ratios.
Looking ahead, Piramal Enterprises indicated a medium-term goal to further reduce operational expenses to a range of 3.5% to 4%. The company remains optimistic about its strategies in both retail and wholesale lending, projecting continued revenue growth. However, challenges from rising costs of borrowing may impact short-term Net Interest Margin (NIM) metrics. The firm maintains a confident outlook for medium to long-term NIM improvements, banking on a combination of higher yields and lower financing costs as part of their overall strategy.
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Ladies and gentlemen, good day, and welcome to Piramal Enterprises Limited Q1 FY '25 Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Ravi Singh from Piramal Enterprises Limited. Thank you, and over to you, Mr. Singh.
Thanks, Nirav, and hello, everyone. Welcome to our earnings conference call for Q1 FY '25. Our results material has been uploaded on our website, and you may like to refer to them during our discussion.
The discussion today may include some forward-looking statements based on management's expectations that are subject to uncertainty and changes and must be viewed in conjunction with the risks that our businesses face.
On the call today, we have with us Mr. Anand Piramal, Executive Director, Piramal Group; Mr. Rupen Jhaveri, Group President, Piramal Enterprises; Mr. Jairam Sridharan, CEO of Retail Lending and MD of PCHFL; Mr. Yesh Nadkarni, CEO of Wholesale Lending; and Ms. Upma Goel, CFO, Piramal Enterprises.
With that, I would like to hand over the call to Mr. Piramal for his remarks on the Q1 performance. Thank you, and over to you, Mr. Piramal.
Good evening, everybody. Welcome on this call to discuss our Q1 FY '25 results. Before we go into details, a summary of the overall direction of trends in Q1 FY '25. Our growth business, which comprises retail and wholesale 2.0 has sustained momentum. It now contributes towards the bulk of our overall AUM and net profit.
And our Part B, our legacy discontinued business in wholesale further run down during the quarter without any incremental debt credit. In Q1 FY '25, the company has reported a net profit of INR 181 crores versus INR 137 crores in FY '24. Our total AUM grew by 10% year-on-year to INR 70,576 crores.
Within this, growth AUM grew by 51% year-on-year to INR 57,601 crores. It's now accounts for 82% of our total AUM versus 34% at end FY '22. Within the growth business, the retail AUM grew by 43% year-on-year and now stands at INR 50,530 crores. Total AUM 2.0 is up 132% Y-o-Y to INR 7,071 crores.
Now some comments on the operational performance of the growth business. In Q1 FY '25, the growth business reported an NII growth of 34% year-on-year, led by 51% year-on-year AUM growth. There has been an increase of -- in the cost of funds on expected lines. This was account of the movement in market rates and an increase in leverage. The NIM of growth business was at 6.7% in Q1 FY '25. OpEx ratios are a key driver of profitability improvement in the growth business.
It was encouraging to see OpEx to AUM declining by 104 basis points year-on-year to 4.6% in Q1 FY '25. Operating profit thus grew by 48% year-on-year to INR 375 crores. Asset quality was strong with retail 90-day delinquencies, steam contained at 0.6% and no delinquencies in wholesale 2.0.
Q1 FY '25 gross credit costs, excluding the recoveries was at 1.6% versus 0.8% in Q1 FY '24. Please note that the credit cost in Q1 FY -- in Q1 FY '24 benefited from a onetime write-back of 1.3% due to the change in the ECL policy. Thus like-for-like gross credit cost is 1.6% in Q1 FY '24 versus 2.1% in Q1 FY [indiscernible] 1.6% in '25 versus 2.1% in '24 in the same quarter. Group PBT stood at INR 205 crores versus INR 233 crores in FY '24. This represents a PBT ROA of 1.5% in Q1 FY '25.
In Q1 FY '25, our legacy discontinued AUM declined by INR 1,597 crores to INR 12,975 crores. The book is down 50% year-on-year and down 70% since the end of FY '22. These AUMs are now 18% of the total AUM. We Continue our efforts to run down -- run them down to below 10% by end of FY '25.
The merger of PEL and PCHFL is progressing on track, following the Board approval, the scheme has been filed with the stock exchanges. After the receipt of approvals from exchanges, SEBI and RBI, the NCLT process will[indiscernible]. On diversification of borrowings, securitization is about 12% of overall borrowings versus 3% at the end of Q1 '24. Following the $100 million social impact loan in May -- in July it raised $300 million through our main U.S. dollar-denomination sustainability bond, the issue received a 4x -- it was oversubscribed by 4x.
By capital base, Piramal in among the top 4 private sector diversified NBFCs. Our retail business has growth of INR 50,000 crores in AUM, making us one of the large NBFC retail -- one of the largest NBFCs in the country and among that lead the market leaders in affordable housing finance. Our strategy has been to build a lending franchise, which is well diversified, dominates -- one that dominates the chosen segments, while serving budget customers in private markets and leads the industry in the use of digital technologies.
With these comments, now I hand over to Jairam, Yesh and Upma to discuss some of the business highlights. Thank you.
Thank you, Anand. Ladies and gentlemen, jumping into a discussion on retail lending. In the first quarter, AUM in the retail business grew by 43% year-on-year. First quarter disbursements stood at INR 6,816 crores, growing by 19% year-on-year. Our flagship mortgage business comprising housing loans and loan against property, grew 37% year-on-year to INR 34,104 crores, and it contributes 67% through the retail AUM.
As you are aware, there have been some regulatory changes in this space, and those -- during the course of the first quarter, those changes resulted in a temporary impact of about INR 255 crores in mortgage disbursements in our first quarter. The mortgage book continues to experience very strong asset quality and has low 90 DPD ratios of 30 basis points.
This quarter, we have shared some more granular information on the composition of our retail portfolio, along with product and risk information. You will see these reflected in Slides 11 and 15 and 16 in our investor presentation. Growth was strong in all retail products with AUM and used car loans, up 150% year-on-year, in salaried personal loans, up 195% year-on-year and business loans up 62% year-on-year.
In one area, we have seen some shift in the way the market has behaved and correspondingly, our own market positioning has changed, and that is in digital loans. Over the last 5 quarters, we have been driven by a view of all sorts of emerging risk signals in the digital loan segment as early as November 2022.
We spoke about emerging risks in this area and the need for us to calibrate our growth in that space. We started reducing our disbursement growth there at that time. If you look at Slide 11, you will find that over the last 5 quarters, disbursements in digital lending are down by over 50%.
Digital loans AUM is currently INR 3,500 crores, and it represents 7% of retail AUM or 5% of total AUM. As we have been able to slow down this part of the business well in time, we have seen our risk performance over the period being relatively benign as you will see in some of the risk charts in the presentation.
If you look at Slide 13, we have shared a new disclosure this time on our emerging cross-sell franchise. You will notice here that we have been able to staff a sizable proportion of our customer base for future cross-sell. Current levels of cross-sell for us are still relatively modest at 7% of disbursements in this quarter. However, you should expect to see this improve steadily in the quarters to come.
On the asset quality front, retail has shown robust performance with overall 90-plus days past due contained at 60 basis points versus the 80 basis points same time last year, and the 50 basis points in the fourth quarter of the previous financial year.
In addition to scaling and managing risk, we are equally focused on driving profitability improvements. Over the last several quarters, we have seen a consistent decline in the retail businesses OpEx to AUM.
At the end of the first quarter, OpEx to AUM stood at 4.9% versus 7.3% in the last quarter and 6.5% -- sorry, 5.3% in the last quarter and 6.5% at the end of March 2023. We expect OpEx to AUM to keep moderating over the medium term and reiterate our goal of 3.5% to 4% in the medium term.
With that, I will hand over to Yesh to walk us through our wholesale lending business.
Thanks, Jairam, and good afternoon, everyone. In wholesale lending in the 2.0 part of our business, we are building a granular high-quality and profitable portfolio. Our 2.0 AUM grew 11% Q-o-Q to INR 771 crores across real estate and corporate mid-market strategies.
We disbursed INR 1,572 crores in the first quarter. Our total repayments during the period stood at about INR 846 crores. Our wholesale 2 point loans -- 2.0 loans are performing well, are in line with or ahead of our underwriting as reflected in the prepayment track record of the portfolio. There has not been a single day -- a day of delay in wholesale 2.0 portfolio since the inception of the business in 2022.
The average ticket size in this book stands at about INR 74 crores across real estate and CMML parts. We will further build this book in a calibrated manner, while capitalizing on the market opportunity. Our discontinued legacy wholesale AUM was down 50% year-on-year to INR 12,975 crores. Our focus is to bring the legacy AUM to below 10% of total AUM in FY '25 and make it further insignificant in FY '26.
With that, I hand over to Upma to cover the financial performance.
Thank you. Thank you, Yesh. Moving to our financial performance. In Q1 FY '25, we reported consolidated PAT of INR 131 crores -- INR 181 crores versus INR 137 crores in Q4 of FY '24. Due to assessed carryforward losses, the tax rate at Piramal Capital and Housing Finance Limited was linked, at Piramal Enterprises level, we have group applicable tax fees.
At the consolidated level, our tax rate comes out to be 27.6%. Our GNPA and NNPA ratios were 2.7% and 1.1%, respectively. Our net worth stood at INR 26,863 crores with capital adequacy at 24.4% on consolidated balance sheet. In Q1 FY '25, our cost of borrowings were flat quarter-on-quarter at 8.9%.
We continue to focus on diversifying our borrowing mix, including securitization and international borrowings. Our fixed to floating rate debt mix improved to 52:48, and we'll continue to see further improvements over coming quarters. Our ALM is well matched with positive gaps across all buckets.
With these comments, I would like to open the floor for questions. Thank you.
[Operator Instructions] The first question is from the line of Kunal Shah from Citigroup.
So firstly, on the provisioning part, both on wholesale as well as retail. So in retail Stage 2, we have now created the coverage of almost like 12-odd percent compared to that of 3-odd percent. So what is actually driving that?
And secondly, in terms of the wholesale, we have indicated that we utilize the management overlay of INR 260-odd crores. But besides that, when we look at it in terms of the overall decline in the provisioning, is it purely because of the rundown in the overall wholesale AUM of, say, 11-odd percent on a quarter-on-quarter basis?
Yes. So thanks, Kunal, for your question. See, the -- on retail, this is the -- what you noticed the Stage 2 -- increase in Stage 2 provision coverage. It's a call that we have taken as part of our annual ECL regrounding exercise. Every year in the first quarter, we reground the ECL. This year, as we updated all the data for the industry and our internal data, it was clear that 1-year PD numbers were all coming down. We made the choice to actually increase provisioning levels in Stage 2 because otherwise, the jump of provisioning from Stage 1 to Stage 3 were quite high.
So we thought it was a right conservative thing to do to actually strengthen the balance sheet for the future by improving coverage in Stage 2. So in fact part of the regrounding exercise of ECL, we incorporated that, and that's what you see reflected. You're absolutely right. Our provision coverage there used to be a little over 3.25%. We increased that to about 12% at the full portfolio level differentiated by product. That's what -- so that's a result of the ECL regrounding thing.
On wholesale, yes, you're right, there's a usage of a couple of provision pools that were available. There is also -- there's also was -- yes, there's also a write-off on the book, which reduces provisions as well because once you technically write-off on account, the provisions against it also disappear, right, which is the -- which you see reflected as well. So they are both reflected in that number that you mentioned.
Okay. So write-off would be closer to like INR 250 crores, INR 300-odd crores?
Yes, correct. INR 260 crores.
INR 260 crores. Okay. Got that. And second question was on the yield side. So we are seeing the increase in the disbursement yields across the product segments with housing MFI as well. So is there the rate increase, which has happened, or this is purely the shift within the portfolio? And similarly, when we look at it on the wholesale side, there is a decline, say, on the Stage 1, Stage 2 pool, which we are seeing. So is it like the rundown which has happened that was on a much higher yielding portfolio. That's the reason we are seeing this kind of a decline in the wholesale areas as well.
I'll come to your wholesale 2 question in a minute. I can -- in wholesale, I don't think we have seen any meaningful decline in...
Wholesale 1?
In wholesale one, it's just a mixed thing. In the wholesale one, is the only part of the business where you get actual yields are Stage 1 and Stage 2 loans, right, which has now reduced to 50% of the entire wholesale 1 book, right? So if you see payback from Stage 1, you will see average yields come down of the wholesale 2 book. That's what we saw this quarter, we had a good, steady quarter in terms of payback from our Stage 1 and Stage 2 loans in the legacy book. So that's what is reflected in the yield number. If you look at our Page #23, you will see in the top right box, that we show that the Stage 1 and Stage 2 loans are at an average yield of 10.25.
Yes. I was just referring to that, it was like more than 11 in the last quarter. So what is actually leading to this?
Yes. That's just a mix thing between the various accounts within there.
Yes. And just the organic recovery, right. So...
There's nothing specifically that has happened there. And of course, we're not booking any new business there. And if anything, RPLR are all going up, not down. So it's just differently who pays down during the course of the quarter. If a higher-priced account pays down, which is kind of what happened in Q1. So the average yields come down a little bit. So that's what you're seeing here, nothing more than that. Yes.
On retail?
On retail, there have been both the things that you mentioned, the mix -- the mix has shifted within the secured lending. See, overall, secured versus -- secured versus not the secure part of the business have actually done more share-wise in Q1 compared to Q4. So in that -- to that extent, yields should have come down. However, within secured, we have been able to move a little bit more towards higher-yielding businesses.
So that has actually helped. But we have also increased pricing starting April 1 on most of our secured product lines. So that is also reflected in the disbursement yields that you mentioned and why you see, for example, housing disbursement yields at 11.5% when you saw them a good 30 basis point lower in the previous quarter. So that's all-internal mix shift between various product variants in the business.
I will also note, this is not a Q1 thing. But in Q2, from a Q2 perspective, I will note that starting August 1, we have increased our RPLR by 25 basis points. So that is another indication to you of where yields are headed, given what we are seeing on the cost of borrowing environment.
Okay. And this will be on the entire portfolio?
All the variable rate part of the portfolio. Yes.
Yes. Okay. Got it. All the best.
Next question is from the line of Shreya Shivani from CLSA India.
Yes. Sir, first, I wanted a clarification on this one particular slide where you've given the retail customer mix between different geographies and like the metro adjacent's Tier 1, Tier 2, Tier 3, there's a big change versus the last year's PPT. Is this just for the customers that you've acquired in '24? Or is it for the entire portfolio?
No. No. This is just for the in the last year.
Okay.
Historically, we have shown the full portfolio, but we wanted to give you a more recent mix of what we are booking right now, and that's what we have given here is basically a last year's bookings. Based on that, we have updated these charts.
Correct. Correct. So incrementally, you are focusing more on the non-metro geographies is what this data point really pointing us, right, in the retail segment across the product segment?
That is correct, correct. And places like Mumbai and Delhi NCR, DHFL had a very strong presence.
Correct. Correct.
We are not as focused on the big market. So you will see a lower footprint for us in those markets compared to the old DHFL portfolio.
Got it. So this is your pure -- purely customers acquired by you in the past 1 year, where you have the greater focus on Tier 1 cities? Got it.
Correct.
And maybe I joined late, but did you share on the management overlay that you've utilized this quarter INR 260 crores odd. What -- towards which segments? And have you given some color about that?
Yes, that's in our old wholesale legacy business.
Okay. So it's towards the old wholesale legacy business?
Yes.
The entirety of it, right?
Yes. Entirety of it.
[Operator Instructions] Next question is from the line of Gaurav Agrawal from Nine One Capital.
Gaurav, we're not able to hear you.
Yes, am I audible now?
Yes, you are.
Yes. Sir, just looking at the few numbers from the last presentation to this presentation. So you're talking about the legacy book first. So I think we were carrying around the INR 2,500 crores or [indiscernible] these provisions last year -- last quarter, I mean, and now it stands INR 2,002 crores. So if I look at the difference, it is INR 500 crores and the rundown that we are seeing is around INR 1,600 crores. So does it mean that there's a 30% kind of an LGD for the rundown that happened in this quarter?
You can do that math. Like it's not. Yes, that's -- it's okay. You can do that, math. Yes.
Okay. Great. And sir, now coming to the remaining part, which is INR 7,000-odd crores, which is left. And if I assume the similar kind of an LGD of 30%, we need to provide for around INR 4,000 crores of provisions. Now against that, we are already carrying INR 2,000 crores of provisions. INR 1,700 crores of AIF gain that we expect to get in the next 2 years, including this one. And then there are some Shriram's stake sale, which help us to realize around INR 2,300 crores odd. So is that math, correct? Am I getting all of these things, right? Or is there any divergence in your [indiscernible]?
Your math is very correct. You've said everything that we would like to say. Thank you very much.
Perfect. Now sir coming to the AIF gains that we expect to get. Are you on track to achieve INR 1,200 crores kind of gains for this year? Or is there any difference?
No. No. We are absolutely working on recovery of the AIF assets.
Okay.
As is the case with wholesale assets and particularly the assets that we are in the AIF bucket, these are sort of lumpy repayments. Some of these assets actually need fair degree of work on the counterparty RBI assets. And therefore, there might be some ups and downs as we go along, but we continue to stay put with our guidance where we said that we would collect about INR 700-odd crores of AIF gains this year. So we stick with that.
Okay. Understood. And sir, just lastly, if I may squeeze, any time line on the Shriram value realization in this year?
No, man, it's a big transaction, we will see. We will stay in the market. We will find if whenever the timing is right in terms of getting the right counterparty, we'll do it. This is not something that we can disclose in a public forum about our timing.
All the best.
Next question is from the line of Vinod Jain from WF Advisors.
Congratulations for the good numbers. My first question is why dividend income in the first quarter is nil as against INR 76 crores in the previous year first quarter?
Vinodji, in the last year first quarter, we still had a sizable stake in Shriram Group of Companies both of these [Foreign Language] So that's what you are seeing is because that stake is not there, the dividend income does not show up.
All right. The second question is about the gross nonperforming asset and net nonperforming assets. The ratio has, of course, worsened over the quarter-on-quarter. But what is the view going forward?
Here to some extent that in Q1, you do see a little bit of worsening of some of these ratios. It's a very minor take, nothing significant that has happened. We have not seen any material worsening of any account on our portfolio, neither in retail, not in wholesale.
The environment has remained very stable, you have seen all our risk numbers that we have disclosed in our presentation. You will see that from a fundamental standpoint, fundamentals continue to be up. We have not seen any material deterioration. Let's see, the environment is shifting. You have seen what's happening in the market in terms of credit costs, et cetera, of all NBFCs and banks in this quarter, be under a little bit of pressure.
We are watching the environment. Our numbers have held up very well in Q1, but we don't want to jinx it by speaking too soon about the future. Let's see how it goes. So far so good.
Similarly, the NIM has also gone down quarter-on-quarter marginally. What is the view again here on the -- going forward?
[Foreign Language] NIM [Foreign Language] because our cost of borrowing will -- is continuing to rise because all the banks are still increasing pricing. So [Foreign Language] So cost of borrowing, you can see [Foreign Language] it is at 8.9. And if anything, there's a slight upward bias to that number. And our book is now getting more and more levered, right? So as the leverage increases, anyway, cost of funds [Foreign Language] for another quarter or 2.
But if you look at the medium term to -- medium to long-term, you still maintain your FY '28 projections?
Yes, or more like in the medium to long-term, our NIM should be higher than what we were able to show there, both by higher yields and importantly, by lower cost of borrowing over time. So it will happen. Short term is going to go in the other way.
Next follow-up question is from the line of Shreya Shivani from CLSA.
Yes. I have a follow-up question on the business loan segment. So of all the INR 4,700 crores of that segment, is there a breakup between how much is microfinance and business loans, because I'm assuming merchant BNPL would still be a smaller part of it, right?
Yes. See, our microfinance is a very small business for us. [Foreign Language]. So see, the microfinance portfolio is about INR 1,400 crores, something like that total. And the rest of it is business loans to...
Okay. Okay. So the biggest stress that we're seeing for the past continuous quarter actually comes from the pure business loan and not from MFI or anything, right?
Yes. MFI also has seen pressure.
Yes.
In fact, in relative terms, MFI has seen more pressure than business loans have. However, MFI is a smaller part of the book. So it doesn't impact our numbers as much. It's mostly the core business loans that have seen. Having said that, like, I will reiterate that the business loans are being done at almost 20% yield. So the kind of delinquency numbers that you're seeing on that page, they are more than priced in into the product.
[Operator Instructions] Next question is from the line of Kishan Rungta from Emkay Global.
Sir, just referring to the Slide 16, overall asset -- retail assets were 90-plus DPD is quite stable. But if I just look at business loan and the other unsecured loans, the 90-plus delinquency has seen a bit upper trend. So is -- how do we look at it? And how do we see the unsecured segment growing going forward?
Yes. That it's -- you've seen this across the industry. It's an important area to keep watching. Of course, these businesses have been at extraordinarily low delinquency rates for a long time. In business loans, for example, you are seeing 140 basis points of 90 DPD. As I mentioned to the previous caller, this is a business being done at 20% yield.
So we are -- you should be expecting a much higher delinquency rate than what we are seeing right now. We have seen in the market a little bit of reversion to the mean of the long-term means. The market has been at below mean for very long, and we are seeing a slow reversion to that mean. We are seeing a little bit of that in our portfolio as well.
However, we have been able to sort of -- being a multiproduct business has given us the opportunity to increase from other part of the business at a time when this part of the business starts facing some pressure. So you've seen us actually gravitate little more towards housing and LAP in the last quarter and that has helped keep the overall delinquency rates in check, as you rightly mentioned.
So as a multiproduct platform, that's always the game we are going to be playing, which is -- we will keep calibrating different businesses up or down based on where the risk levels are. As you can see here in the digital loans, for example, on Page 16, digital loans were up. 4 quarters ago, we noticed, 5 quarters ago that, hey, these things -- this is not looking that great. We started reducing the volume. We reduced the volume to -- by roughly half over the course of the last 4 quarters.
And hence, you have not seen the impact of that high -- the high delinquency on our portfolio level delinquencies, which have remained steady. That's the kind of game you need to keep playing -- depending on which part of the market is going up and which is going down. So it's a very, very dynamic situation. We will not hesitate to calibrate businesses up or down based on market realities.
[Operator Instructions] Next question is from the line of Sameer Bhise from JM Financial.
Just one question on the Stage 3 changes in absolute terms. So while retail Stage 3 has changed by, say, INR 100-plus crore, a few crores, here and there. The balance is coming from legacy or wholesale 2.0.
No, all from legacy. There is no Stage 3 in wholesale 2.0. There's no Stage 2 either in wholesale 2.0. Yes.
Okay. Okay. All the best.
Next question is from the line of Arpan Agrawal, individual investor.
My first question is the repetition of the question that I've asked during AGM. Sorry for repeating it, but I'd like to know managements thought on this question.
So for context, so I have numbers for FY '23, '24. So retail AUM grew by 50% during that period. The share of unsecured disbursement during that period was 40% of total retail disbursement and our potential customers, the Bharat customers may not have complete documentation.
So essentially, they're landing -- lending at a fast pace with a significant proportion of it not secured by collateral and our potential customers may not have complete documentation. So given this, how do we maintain the quality of our retail loan book?
Yes. Arpan, it's a good protective question. First off, I'd say, keep looking at our numbers, keep us honest by tracking our delinquency performance. We are one of the few large NBFCs that show product level delinquency numbers, right. Not everybody does it. And the reason we do that is, if so the investors like you can keep us on it on whether we are doing a decent job in managing that risk.
We believe that by building the right kind of models, analytic models by having the right underwriting policy and framework in place, and by being very agile about which segments we dial up and dial down, we can manage the portfolio well. But it's a daily battle. This is not a big strategy thing that we can decide. And based on that, we will just automatically have better quality portfolio.
We make decisions every day. Last quarter, to give you an example in the quarter that just passed, we made about 100 policy changes in the course of 1 quarter. So we practically make a small policy tweak every day. So we make tens of these things all the time. And it's through the accumulated effect of all that and the discipline of constantly looking at the product level risk and index level risk that we are -- that we believe we'll be able to manage it -- manage the overall risk well. We've been able to do that well so far over the last few years. Let's hope that continues.
I have a follow-up question. So this -- how do you interpret this 90-plus DPD ratio. So I understand the numerator, it is the loans which have -- which have passed due between 90 and 179 days, but what is the denominator of this ratio?
0 to 179 days. Everybody from 0 to 179 days. That's the denominator.
Got it.
0 to [ 129 ].
Okay. Makes sense. I have one question on Slide #37. So it has a column of sharing disbursements, which totals to 94.9%. So I want to know what accounts for the remaining 5.1% of disbursement.
We do some small direct assignment-type transactions in [indiscernible], which will show up there as well. And [Foreign Language] loan against shares, loan against securities, loan against mutual funds, this is a small product, which are still in infancy, which we don't show here.
Got it. I have one small request. I'm not sure if it's feasible or not, but if we can keep some time gap between the -- like the time at which the presentation is uploaded in the investor call, I think that will be very helpful to digest presentation and then ask questions.
We would like to do it too, and we know it's the right thing to do from an investor perspective. Unfortunately, days like today when there are multiple results, it's hard to -- it's hard to find the right time slot. So logistically, it becomes kind of hard. But I take your point that we should give investors time to digest the results before holding the call. We will do our best.
[Operator Instructions] Next question is from the line of Sachit Motwani from Motilal Oswal.
Am I audible?
Sachit, sorry. You're not audible.
Can you hear me?
Sir, can you seapk with the handset, if you don't mind.
Is it better now?
Much better. Much better. Thank you.
Yes. I just wanted to check, the reduction in land and receivables from by INR 250 crores on a Q-o-Q basis, what led to this reduction, was it from a write-off or anything?
Yes, it was write-off of one land asset.
Sorry. Write-off of one land asset?
So this is a -- you might recall that last quarter, we had made a significant provision, and we had set some money aside for a deal that we told you was in the offering. But the deal was happening at a rate which was lower than the rate at, which is the asset was held on our balance sheet. So we made the provision last quarter, the deal consummated during the course of the quarter, and we ended up using that provision and writing the asset down.
Okay. Got it. And my second question is what's the outlook on the SR book now? We've reduced it down by INR 300 crores in Q1. So how do you see a rundown of this SR book happening over the next 1, 2 years?
So look, on the SR book, on the wholesale side, we continue to engage with the ARCs where we only a trust, the underlying trust [indiscernible] through them, we continue to engage with the counterparties to actually find solutions and resolution of the underlying loans.
And you know these are nonperforming assets, clearly, that have been issued historically in terms of performance, and we have to work on a number of parameters, which we'll continue to go on right now. Our intention is that in the next 2 to 3 quarters' time we recover material part of the resource. However, given the nature and the complexities involved, we're not able to really give a concrete guidance on how this book will [indiscernible].
Yes. If I may add just a quick sort of summary note on what you have said. The way you should think about this is that the directionality of the SR portfolio will be downwards. It will reduce. However, we cannot guide a specific pace at which it will come down. It's very deal specific.
Understood. And as of date, how much is marked down by?
See, original from -- you take the markdown from original book value at which it was carried from there, it is 60-plus percent. So we -- INR 100 asset got sold at INR 40, and of that INR 40, we took 15% as cash and showed as cash on only, the remaining 85% is shown as SR value gain. So it's well marked down in that sense. But it's still -- these are big bulky assets. We'll see how it goes. It's very well marked down though.
[Operator Instructions] Ladies and gentlemen, we'll take that as a last question. I'll now hand the conference over to Mr. Ravi Singh for closing comments.
Yes. Thanks, everyone. Please reach out to me and Investor Relations team if you have any further questions. Have a good day. Thank you.
Thank you very much. On behalf of Piramal Enterprises Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.