Housing & Urban Development (NSE:HUDCO) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Housing and Urban Development Corporation Limited Q2 FY 'twenty seven Earnings Conference Call hosted by Ashika Institutional Equities. 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. Please note that this call is being recorded. I now hand the conference over to Ms. Rati Pandit from Ashika Institutional Equities. Thank you, and over to you. Thank you, Yashashree. A very good afternoon to everyone. On behalf of Ashikash Institution Equity, we welcome you all to the Q2 FY twenty seven earnings conference call of Housing and Urban Development Corporation Limited.

0:49 We are pleased to host the senior management of the company represented by Sanjay Kulshreshta, chairman and managing director,, director corporate planning,, director of finance, and, executive director of finance. I now hand over the call to chairman, sir, for his opening remarks, post which we can have the floor open for q and a. Thank you, and over to you, sir. Thank you, Ichika. Good afternoon, friends. At the outset, I will extend my warm greetings to all the investors and the stakeholders. I also take the opportunity to wish everyone a very happy and prosperity value. May the festival bring happiness, prosperity, and new opportunities.

1:37 So if you see the journey of the HUDCO during last two, three years, the times were very happening. There were a lot of commitments from the government of India, not only towards the towards the financial supplementation, but also towards the policy side. There are a lot of announcements in the budget regarding lot of missions and a lot of programs. If you if you see the bottom line and the thought of the government of India is that for the big city, we need big cities, the developed cities. And for developed cities, we need lot of capital infusion, a lot of planning, and lot of emphasis towards the reforms and the governance. So during h one of the '27, HUDCO has delivered a strong performance because of all the reasons I had mentioned.

2:26 During the first half of FY twenty seven, it reflects the sustained business momentum and improved operational efficiency. The disbursement of the loan stood at around more than 35,000 crores, which is around 37% more than the previous financial year, and our loan sanction has reached to 1... More than 1 lakh crores during the first half yearly. The the pipeline is very strong regard... Regarding the disbursement, and we are completely aware that lot of disbursement will be planned in times to come. The loan book has grown by 29%, and that it has become INR 1.86 lakh crores. Revenue from operation has also increased by 26%. The net profit has also increased by 31% during half year.

3:14 Asset quality continued to improve, and we are very aggressively working towards the resolution of the balance assets also so that we can use that capital. Our gross NPA has declined to around 0.7%, and net NPA is just above zero, that is 0.04%, and we are committed to become zero NPA company very shortly. We had also worked towards cutting down of cost of funds and by taking various measures and various steps, not only towards the policy, but also we are taking benefit of this RBI's web window. Our blended cost has been very stable in respect of the turbulent markets, which is now at around 7.07%, which reflects our continued focus on resource optimization despite a rising interest rate regime and elevated corporate bond yields.

4:11 These achievements reflect our growth strong fundamentals, prudent risk management and consistent execution of growth strategy. You may all be aware that there are a lot of geopolitical issues, which are there in the there in the international domain. And because of the... These uncertainties, there are a lot of uncertainties in the money market, be it the pricing of the dollar or the crude or tightening of the monetary policy, including the raising of the repo rates by the RBA. So all these wins are coming for us, and we are targeting that how to resolve that our continual growth will become at the optimum level, and we will be we will be continue to find our growth growth state as we were doing recently.

5:09 We are very consciously pursuing to diversify our funding strategies, leveraging multiple resources. It may be domestic. It may be international, optimizing our cost of funds. At the same time, we are we are we are also addressing that there should not be any risk perceived while taking the international loans, and that's why we are taking full advantage of our base web window. Our resource monetization strategy is closely aligned with our asset management, so we are fully aware that we need to we need to balance our asset management as well. By continuously optimizing our borrower mix... Borrowing mix and the funding cost, we aim to strengthen our competitive edge in lending operation, protect margins, and ensure sustainable growth.

5:58 Our endeavor is to translate resource mobilization efficiencies into the competitive lending rate, thereby creating long term value for our stakeholders. If you see the infrastructure story of the government of India and our country, India, there are a lot of emphasis there on the urban ecosystem and how to create a very viable, bankable, and sustainable urban infrastructure. So it is not only about the trunk infrastructure on which the government of India is extending lot of missions and a lot of programs, starting from the PMAY that is ensuring the housing for all across the country, and PMAY one was very successful, and now the PMAY 2.2... Or PMAY two point o is also launched. Along with the housing, we are also aware that there are a lot of missions towards water. That is number one, number two. The smart city missions was there. Soksh Bharat Mission is also there. Alongside government is pushing the mobility also, be it metro, rapid rail, or or air networks to run programs or industrialization to various programs, be the food part. So so a lot of things we are we are transforming, and everything if you see is enforcing the view that the the creation of the urbanization.

7:17 We are very fast in our organization. Our pace is very fast, and it has been estimated that by 2050, our urban population, which is... Which will be doubled by 2015. So so there is a big challenge towards the urban ecosystem for creation of this infrastructure, which is not only for the facility, but also it will create a growth engine for the country because around 60 to 70% of the GDP is coming from the urban networks only. With this challenge, government has also announced the urban challenge fund, wherein the one lakh crore is a subsidy or the grant portion that the government has decided, and another one lakh crores has to be infused by the state government.

8:03 So for 2 lakh crores, it will be the private participation has to be seen. So in other words, you can say it's a 50% VGA for the urban infrastructure that the government of India in association with the state government has announced. So it will unlock lot of private capital. It will also leverage lot of assets which are there with the ULBs or with the cities. Government has also came out with the FAST loans. It's a fifty year interest free loan to the state, which is primarily be used for the urban ecosystem. The sixteenth finance commission has also raised a lot of grants for the state, which we also have... Which will also become a driver in the growth story of the urban networks. So the the the the objective of the government is to create the growth engine, the cities as a growth engine, redevelopment of the cities.

8:55 And alongside, there is one program which is also announced, which is city economic reason, wherein the main city will be identified, its economic activity will be identified, and other cities will be developed with backward and integration, backward and forward integration of this economic activities. For that also, a lot of funds have been earmarked in the budget. So if you see HUDCO is at the epicenter of starting from the housing to the infrastructure across the country. Lot of programs are supplementing the efforts of the HUDCO. That's why this is the main reason that our loan book is continuously growing, and this story is just started. It may it may be continuing from... For another few years, and we will be supplementing by efforts of the government for creation of the developed nation by 2047.

9:48 So we are a sector agnostic company. So across the sectors, we are financing. Other than that, we are financing the new satellite towns or magnet towns or industrial towns as well. Then the ring roads or the mobility also we are supporting in a big way. We are also working on our SDG structure so that the SDG and the ESG in... Structure so that whatever loans we are extending, they will be compliant with the ESG guidelines so that our international stakeholders will not have any issue regarding the finance. We are very closely working with the multilateral banks like World Bank, ADB, KFW, AIIB, NDB. So they are also supporting our our point of view and the objective of the nation.

10:35 So I'm very, very, very sure that the way the company is going and supplementing the efforts of the... We had already achieved around 1.86 lakhs of the loan book. We are targeting that during this year, this financial year, we will be around 2 lakh crores loan book. And by 2030, we had given an initial guidance two years back that we will be achieving around 3 lakh crores loan book. So we are working on that. We are trying that our spreads will be maintained at around 2% and NIMs will be at 3%. All the financial ratios are very well under control, which is supporting the business model of the company. Government is also supporting since we are a 75% owned government of India company. So it's a it's a company of the strategic importance, and we are working towards repurposing of HUDCO... Within HUDCO also and creating lot of strength, not only through the recruitments of the new officers, but also through the capacity building across the company.

11:38 We had started the Urban Invest window recently last year. It's you, I win. So you win, I win. It is primarily to to identify the assets of the ULBs to create the the project, then their restructuring, and then their financial closure. And at every step step, there will be a capacity building of these state entities and their officers. So we are focusing to become a purely a three sixty degree kind of output oriented and outcome oriented company in terms of the urban infrastructure. So with this, I will not take lot of time. Thank you so much, and we are open for your question and answer. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch First question is from the line of Sanket Cheddar from DAM Capital Advisors. Please go ahead.

12:50 Yeah. Hi, sir. Congrats on a good set of numbers. What I wanted to understand is we are fairly certain about the growth looking at the disbursement and sanctions momentum, but I wanted to get more sense on yield holding while we pursue this growth for next couple of years and thereby margin. So how would you how would you suggest an outlook on both of these things? Cost of funds, I leave it to the market dynamics and hence not not bulging on that. But how would you see your yields moving and have the margins over next one, two years? So, Sankirt, good morning. How are you?

13:38 I'm good, sir. So if I understood current... Correctly, you are asking about how we will be sustaining the interest expense and the net interest margin. So Yeah. So I can assure you and the investors' opportunity that our spreads will be around 2%, and we will be maintaining on year to year basis. There may be a slight corrections during the year because of the market fluctuations, cost of borrowing, the timing of the disbursement, the resets which are happening across the across the loan portfolio because we reset on trans to trans basis. So there may may be a temporary temporary slowdown for our price spread, but I can assure you that it will remain 2% at the end of the financial year, and we will be sustaining across the journey the the spreads of the 2%. And similarly, the names we are we are we are targeting that it should be at least 3%, and we are maintaining that. And if you see, without this EBR of 20,000, presently also, our spread is 1.96%, which is just around 2%, and our net interest margin is 2.93.

14:57 So for other... For the sake of other knowledge, I can tell you that 20,000 crores in our loan book is is a loan to the government of India, which has a spread of only 40 basis points. So if you reduce this this amount, then the the spreads are around 2%, and the net interest margin is currently at 3%. And when is that moving out, sir, in terms of the repayment schedule? 2829, it will be it will be out from this. That's why 2829. Okay. Oh, okay. Okay. Sure, sir. I think... Yeah. I just wanted to know that. And the other thing which we didn't have in this quarter, which is transition losses due to the currency movement, as we had highlighted last year that from hands on, we won't be seeing that, and that would stay, right, going ahead as well.

15:56 It's a very fiscal amount, so it will stay for Zero. It is zero. Yeah. So it has been zero now. So there will not be any loss towards it. Going forward also, we don't foresee any any losses on foreign currency translation because now our loans are, you know, remaining maturities, basically, five years and sufficiently has most of the exposure... Foreign currency exposure, which we have today is covered under RBA swap window, which is... Which allows for full, you know, full protection against the currency fluctuations. Only thing is small portion of FCNR is there, which is... Which will be maturing in 2028. So going forward, we don't foresee any losses on foreign currency moment.

16:46 Okay. Okay. So then lastly, just... I joined the call a couple of minutes. Have you spelled out any disbursement target for this year? Disbursement target? Yes. We have kept the internal target of 65,000 crores. And during h one, we had we had already achieved more than 35,000 crores. So another 30,000 crores is left in our target. That would be minimum. Right? It can... You can exceed that target. Yeah. It's a target depending on the pace of the project because we didn't disperse like this. So it will be the project progress on the basis of that. This 30,000 crores has been estimated.

17:31 So in case the phase of the project is expedited, then just, of course, the disbursement may hide. But I don't see any reason to correct this figure of 65,000 crores as of now. Okay, sir. Sure. Thanks a lot. Thank you. Next question is from the line of Devraj from Forensic Investing. Please go ahead. Okay, sir.. Sir, just want to know the previous participant. Right? So whatever is our lending book, right, asset book, that is we can reset, right, that interest at a particular... For six months or nine months, something like that? You have to extend? Only a reset There is a one year reset that we are extending to all our loans. So it's a transfer by one year. So once one trans completes its one year, then it will be reset it as per the MCLR.

18:25 And our MCLR, that is the benchmark rates are revised on quarterly basis. Okay. Okay. So, basically, whatever... If there is a increase in our borrowing cost post one to one and a half year, it will be reset. Right? So there won't be any comparison in the names. Yeah. Yeah. There will not be... It is only one year, so there will not be any comparison. Whatever we will be... The cost will be hiring, it will pass on to the borrower at that interval. Okay. Noted. And, sir, regarding the resolution. Right? So, sir, is it possible to know that how our organization keeps such a minimal net NPS? Right? And if there's any resolution, you know, what we encounter some difficulty in that thing?

19:15 I don't say it's a difficulty in resolution because we are very, very aggressive and continually working towards not only the one time settlement, but also aggressively pursuing advanced or the or the valuation levels or it's a it's a two way kind of resolution that we are working. It is not alone the courts or the decisions of the courts that we are relying, but we are evaluating. We are discussing with our borrowers, understanding their issue, and settling their their projects, sir. Because these projects are way back dispersed the twenty years or thirty years of the time. So a lot of things has been changed. So proactively, we are discussing with them. And if you see during h 01/27, we have a recovery of 32 crores and resolved around $3.59 crores. In 2526, we had recovered around 403 crores and resolved around 660 crores. In 2425, we have a recovery of 416 crores. So if you see, we are we are very aggressively resolving these assets, recovering our money, what is possible within the framework.

20:25 And most of these cases which are balanced, the the orders had already received, they are under various stages so that the money will come. Some of the project has gone to the liquidation. So time to time, we are started getting the monies also. So I'm very hopeful that this minuscule amount of 1,200 crores, mostly it is pertaining to the NCLT and the DRT. So most of these amounts will be will be resolved in a year of the time, and we are very strongly pursuing with the consortium partner as well as the NCLT process. Great, sir. Yes. And I'm sure we're thankful to the management, right, for such a great support. But, sir, we don't face challenges in government and semi government organization, right, for recoveries., can you please come again? Your voice is not Sir, see, this resolution is private entity. Right? But in government and no... And semi government, right, some for example, this... So we won't give such a challenge, right, in the recovery.

21:31 So most of these, around 95% of these... The loans are to the private sector entity, and that's why we are... We have a lot of discussions with the state of private sector players, and most of these are from the private sector side of. Okay. But, sir, in case Some of the assets have been backed by mortgage. It was around twenty twenty five sold assets. Now the value of the assets have gone up substantially. They're very sure that we'll be recovering the amount. Okay. Okay. Noted, sir. I will join back in the queue. Thank you, sir. Oh, thank you. Thank you. Next question is from the line of Harsh Alsogi from Ashika Institutional Equities. Please go ahead.

22:19 Hi. Thanks for the opportunity. Am I audible? Yeah. Yeah. You are audible, Harsh. Yeah. So I just have three questions. So firstly, I mean, we've highlighted in our presentation that there's a 3 lakh crore opportunity under finance infrastructure, which consists of housing and urban intra. So which sectors should we primarily I mean, which sectors are we primarily going to focus on there? And second question being under the PPP project financing, have we commenced our sanctions I mean, sanctions and disbursements? And the last question being, what is our outstanding what is the number for outstanding sanctions? And in how much time do we expect to convert it to disbursements?

23:04 So yes, those were my three questions. Okay. Yes, Harsh, actually, if you see, we had kept a target of INR 3 lakh crores of the loan book. But the opportunity is very unique in urban sector as for the World Bank report. It requires around $2.50 lakh crores by 2050. So we had taken our share till 2030 of the loan book of 3 lakh crores on which we are working so that our ratios should not get disturbed. Secondly, you had asked regarding the PPP. We had already started sanctioning of the projects. We had sanctioned one redevelopment of the biggest slum project that is in Mumbai, Harabi. The... It is in the it is in the advanced stage of the documentation, and we are very hopeful that during this quarter, the disbursement will start. Other than this project, no disbursement has been started under the PPP mode, but we have sent in around 9,000 crores of the PPP projects. It may...

24:03 They are primarily from the redevelopment of the slum, the road sector, and one is from the renewable energy side also. Regarding... Third question was regarding the outstanding pipeline for the Outstanding pipeline Outstanding. Yes. Okay. Yeah. There is no doubt of the outstanding pipeline. If you see, every half yearly, we are sanctioning around 1 lakh crores. Last half yearly also, we had sanctioned 1 lakh crores. We have a pipeline of projects which are sanctioned around between 3 to... 3.5 lakh crores to 4 lakh crores. And since we have long gestation periods starting from the three years to the five years of the time, so the conversion will will take some time regarding the disbursement and the loan. Okay. Thank you. That's that's right. Yes, sir.

24:51 Just one small bookkeeping question. If you could provide the cost of borrowings for banks, bonds, and ECB respectively. Yeah. Yeah. Yes, ma'am. Yeah. ECB, I mean, we have raised... During the current financials so far, we have raised $2,000,000,000, and effective landed cost after hedging is slightly less than 7%. It is around roughly 6.75%. Coming to the bonds, bonds, as you see, both the bond rates are quite elevated these days for the last two two and a half months. It is hovering around 8%. So we have we have not raised any money through bonds in the last quarter.

25:38 We raised... In the first q one, we raised around 2,200 crores through bonds. That was roughly seven seven point two five, roughly. Yes. But after that, the yields have gone up, so we are not resorting to, and we are waiting for the right time to go for bonds. From banks also, we are able to raise money at around 7.25%. Okay. Thank you so much, sir. I'll join back with you. Thank you. Next question is from the line of Nimmin Doshi from Fortress Group. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. First, coming back to your yield, sir, if I see, there has been... On a y o y basis and a sequential basis, you have seen some compression in yield.

26:29 So what gives us confidence, or are we seeing that the repricing is yet to happen and and and will happen in next few quarters and will be packed with our spreads of 2%? Because cost of funds, we don't see much of a relief anyways from the... Either from the bond market or from the. So what gives us the confidence that we'll be able to maintain or end the year with a 2% spread? Yes. Thank you, Mr. Doshi. I think that is a relevant question, and we all know that the cost of fund is increasing. We have taken several measures. One, as my colleague has already informed that we are very aggressive to take the benefit under this RBH web window. We had already borrowed around 2,000,000,002 billion. We had already taken at a average price of around 6.5 quarter to seven. Around 6.5 quarter to seven.

27:27 It was... It is in between that. So the total amount we are targeting is more than... Slightly more than 3,000,000,000. So other loans are also tied up, and the disbursement will come before December 31 or before the closure of this window. So if you see the total loan book is 1.86, and our total borrowing is around 1.65. And out of that, around 35,000 will come at around 6.5 to 6.75. You can say 6.75. This will create lot of a lot of... This will this will reduce lot of pressure on us regarding the borrowing side. So that's why we are very aggressive on this. Secondly, we have increased the MCLR after the gap of two years. So we had already started increasing our MCLR by 15 basis points. We had already increased, and I have already mentioned that our loans are being reseted on a yearly basis. So we had estimated that around 20,000 crores of the loan will be restricted during this half yearly. So that that will also increase our bottom line.

28:34 Other than that, whatever we are discussing with the with the states, our negotiations are being done, and now we are changing our pattern from one year reset to the quarterly reset in in some of the cases. So we had started implementing that idea that the reset should come on every quarter to quarter basis. So that... There are few few more things that we are discussing, but I can assure you that with all these measures, because our resets are happening, so there will not be any question regarding the passing passing of this increased loans. And our states also understand because they are also issuing the SBL. So everybody knows that the pricing is increasing, so there is no problem regarding the resets and the the transmission of this higher cost to our borrowers.

29:21 Okay. So can we can we say that this quarter, the more or less from a reclining front would have worked out and from now on to the I'm sorry, ma'am. Your audio is not very clear. Can you use your handset mode, please? Am I audible now? Yes, sir. Please go ahead. Yeah. So I was just saying, if... Can we say that the yields are more or less bottomed out and we could see increase in yields from here on for the next two quarters? Yeah. They will be increasing. Rather, I can say that we will be maintaining 2% of spread and 3% of the name. Because if you see our position, we want to create that kind of infrastructure. Got it. Got it. And so when you say 3% spread... 3% NIM, when when I see... When I look at your other operating income and other income, we haven't seen that of a growth. I mean, the disbursements are growing upwards of 30, 35%, whereas your other income and operating income are still more or less in the same line with the NII growth. So where do we see the incremental 1% spread over and above this NII spread. So how do we see this other income gap going with it? It is... Mister Doshi, it is not the other income. It is a return on our equity, and that is creating the higher names. Other than that, other income, we are also working towards the monetization of our assets,

30:52 but I will not talk about that. I think there is some disconnect also. I think... I mean, as far as that keeps... Our target for spread is 2%, and NIM is 3%, which we are presently also maintaining and going by the cost of funds, which we we are able to have and the yield we are we are having or we are expecting to further increase by another... I mean, the transmission effect of 15 basis points will also give a result in the q three of the financial year. And the impact of ECB, which we raised, that also will be, you know, reflected in the q three results. So what Swarish saying, target is 2% for spread and NIM's target is 3%, and we are very close to it, and we are...

31:41 We will maintain that. Got it. Got it. And and lastly, sir, on on your tax expenses, how should we see the tax rate going ahead for us? Tax rate? Tax rate will be the same in the future also. So 20% or or or currently, it is at 15.5? 21%. It is roughly 21%. Okay. Okay. Got it. Got it. That's it from my side. Thank you, and all the rest. Thank you. Next question is from the line of Divyam Doshi from nine two three Capital. Please go ahead. Hello, sir. Very good morning. I just wanted to ask one question that RBA has placed us in the upper layer in August, I think. So what effect does that mean for us? And does that affect any pending of ours?

32:37 So as you all know that RBA has notified recently, Douglas, regarding this list of the upper layer entities, and HUDCO is one of them because our loan book is 1 lakh crore. So if RBI talks about the upper layer, it is regarding the more compliances. Exposure limits has to be monitored and approved by the board in case we are extending from 25%. So since we are recently created MBFC, IFC, the impact on the company may not be so much because we are starting from the clean slate and whatever we were doing, we were doing actually complying the regulation of the the upper layer from the day one. So I don't think any impact will come, but, yes, the compliance will be more from the RBA side, and I don't think more than that. Just minor exposure Minor exposure months, that is 25% can be done and 5% can be done by approval of the board.

33:41 But we are not in that position since our loan book is not so big. So that kind of issue will not be there with the company. So I don't see any bottom line, but, yes, compliance has to be done by the company. Okay. Okay. And one more question, please. At... How is our private business doing? Private, we had recently started. I think we had discussed and a lot of discussions for one and a half years, and we have came out with our guidelines. And recently, we had sanctioned a few projects. One is the redevelopment of Haravi, wherein it is in the advanced phase of documentation. We have sanctioned some project... Road project as a part of consortium also. HAM project. HAM project and one project in the energy sector. So total sanction is 9,000 crores, but the disbursements have not yet started.

34:35 Okay. And when will be the disbursement? Maybe in, like, this quarter, are trying the disbursement should start. Okay. Okay. That's it. Thank you so much, and all the best. Happy Diwali. Thank you. Happy Diwali. Thank you. Next question is from the line of Devraj from Forensic Investing. Please go ahead. Sir, in the... This is non sovereign lending. Right? So what is our strategy, right, which are incremental lending to the non sovereign parties? So if you see the non sovereign loan lending, we had started, but we are very, very sensitive towards the fact that there should not be any risk towards financing of these PPP projects. And whatever we will be doing or we are doing started, it will be in the PPP, and we will see that a strong concessional agreement should be there. The entities should be very strong.

35:28 The appraisal mechanism should be very strong. The monitoring should be very strong. So we are not compromising towards the asset quality. At the same time, there is a there is a prerequisite that this... The entity should be in the investment grade, then only we will be funding these kind of projects. So there is no target for funding of the PPP project. At the same time, you will see that the good entities will come... Good projects will come, which are backed by good concession agreement or regulatory arrangements, like, in the power sector. So all these kind of things we are looking, and there is a third party due diligence also. Are we are... There is a condition of third party appraisal by the... By some, say, reseller kind of agency. Then there is a PMA, then there will be a TRA. So lot of lot of protections and the risk mitigations may that we have taken while extending any credit to the PPP partners.

36:23 Okay. And so risk will get adjusted. Right? Risk premium will be more there. Lending rate will be more than relating. Obviously. But it's a... You know, it's a very competitive market, but, yes, of course, the risk premium with respect to the state government will be more. Next question is from the line of Harsh Ulusogi from Ashika Institutional Equities. Yeah. Thank you. Sir, can we provide some guidance on ROE and which constituents of DuPont will drive it? And I have another question. Are we, I mean, expecting credit costs to be negative going forward as well until then, which year will this continue?

37:13 Yeah. Regarding ROA, we are trying to maintain between two to 2.2%, and definitely, we will be maintaining that kind of ROA. But we all know that when there is a accelerated growth in the company, sometimes ROI comes down and when the loans are settled, then ROI will come again to the... Between that margin. So we will be maintaining... And I think this is one of the industry's best figure in the industry regarding the ROEs. Regarding the cost, yes, I think for a year or two, there will be some negative cost. Some resolutions will be happening, and there will be some reversal because the provision coverage ratio is around 95%. So there will be... Definitely, there will be the reversal for for a year or two.

38:03 Sure. Thank you. You. Our next question is from the line of from Hajika Institutional Equities. Please go ahead. Yeah. Actually, just one question. How is the fashion and the and whether we some further sanctions to come under that. And, also, we have given a guidance of 3 lakh crore AUM by next year. So are we likely to revise the guidance now that the... We have almost a 2 lakh crore book? Yeah. So these are my questions. So I think you you had you had asked regards to the PMA y 2.2. Slide disturbance in the line.

38:51 Are we audible? Yes, sir. You're audible. I have muted, Rati, because there was some disturbance. You can go ahead, sir. So regarding PMAY PMAY one point o was started in 2014, and there's a lot of impact across, and it's a multiplying effect towards the water, roads, seaways, and everything. So we are funding in that... On that front also. Yeah. Under PMAY in totality, PMAY one and two, PMAY two, we had sanctioned the amount of around 58,000 crores, and we had released around 48,000 crores. P m... Under PMAY two, around 20 lakh dwelling unit has already been sanctioned, and government has a target to sanction around 40 lakh units during this financial year. But if you see the total investment, which is required is around 4 lakh crores in another times to come. So definitely, our loans will be... Will also be extended towards this EMI way counterpart requirement of the states.

39:54 But all... Only thing is that, finally, if in case the state wants that kind of one... Counterpart requirement, then only they will come to us. Otherwise, states are arranging themselves this kind of money through SDS. So in case any state wants, we will be supporting this cause of the moment of India commitment towards this PMAY. And we are discussing with lot of states, but good states are arranging their own money through SDL because it is the cheapest form of the money for for this non renewable sector of housing. But other than that, they are taking our assistance towards a road or rain roads or port or airport. So our funds are primarily used for these kind of bugs, which have a multiplying effect on the economy of that particular state. Fine. Thank you.

40:40 I now hand the call over to management for closing comments. Over to you, sir. Thank you so much, and thank you for having faith in us and whatever we are doing. But I can tell you with full assurance that we will be very transparent while declaring the guy... Any guidance to the market. We need to spread names for our loans or... And we will be very, very conservative not to take the risk, and at the same time, we're very... We will be very, very competitive in in financing good projects. We are repurposing ourselves so that we will become the primary player which will guide the urban infrastructure for the country. And that's why we had started repurposing us. We have started strengthening within the organization also because we believe that if our organization is strengthened, then only we will be continue to grow like this.

41:37 Towards the risk side also, we are working very aggressively that there should not be any risk. There should not be any new NPA. At the same time, we are very serious on the compliance fact that there should not be any lack of compliance towards our base. Then we are very, very aggressively pursuing and working with the state government, strengthening our regional offices so that the monitoring of the projects... So whatever projects we are monitoring, they should be monitored well and the disbursement have a kind of pace so that it should not go out of pace. We are continuously working that our disbursement will be on the quarter to quarter basis so that the market will understand this is a disbursement, and we will be lending at this figure at the end of this financial year. We are very proactive in innovating kind of resource management and also with the ALM and cutting down our cost of funds so that the optimum pricing of the loans can be done. And we are monetizing our assets also.

42:35 A lot of assets we are monetizing and around one lakh square meters of the space we will be creating in the next three years of the time, and we are expecting that income will start coming from that. On the future side, a lot of new ideas we are working here. We are setting up a strategic business group also. So that... Because if you see in urban landscape, lot of transformation is being done, and we have to change on day to day basis. So that's why all this flexibility we are creating, all these resilience we are creating within the automation to be fit for any of... Any any kind of market requirement to customize our needs and requirements in line with the solution for the urban local bodies. Thank you so much.

43:21 Thank you, members of the management team. On behalf of Ashika Institutional Equities, that concludes this conference. Thank you all for joining us today. You may now disconnect your lines. Thank you. Happy Diwali. Happy Diwali. Wish you the same, sir. Thank you.