Muthoot Capital Services (NSE:MUTHOOTCAP) Q2 2027 Earnings Call

0:00 Good afternoon, ladies and gentlemen, and welcome to the conference call of Muthoot Capital Services Limited, arranged by Concept Investor Relations to discuss its Q2 and H1 FY 'twenty seven results. Before we begin, let me mention a quick short cautionary statement. Some of the statements made in today's earnings call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements made on the management are made on management's belief as well as assumptions made by the information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward looking statements in making any investment decisions.

0:52 The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and the financial quarter under review. Let me now introduce you to the management. We have with us today Mr. Matthews Marcos, Chief Executive Officer and Mr. Ramanteep Gill, Chief Financial Officer. Please note that this conference will be recorded. I would now like to hand the floor to Mr. Matthews Marcos, Chief Executive Officer. Thank you, and over to you, sir. Thank you, Neeraj, and good afternoon, ladies and gentlemen. Thank you for joining us for the Muthoot Capital Services earnings call for the second quarter and H1 for September 26.

1:40 Let me begin by wishing all our shareholders, investors, lenders and business partners a very happy Dhanteras and Diwali and a great festive season ahead. Talking about the first half of the year, it's been a period of consolidation, strengthening of our institutional capabilities and building a stronger foundation for a sustainable growth. But we have, along with that, made meaningful progress across several important areas like asset quality, credit underwriting, diversification of our funding and of course as usual on technology. I wish to highlight some of the developments that we were able to achieve during the first half of the year. Firstly, our institutional strength and credit standing got a boost with the rating upgrade to AA from Brickworks.

2:26 This reflects the company's improving financial performance, discipline, governance and strengthening business fundamentals. It's a very, very important milestone for us because it reimburses our ability to access diversified funding sources, including going PAN India for our FD product. We as you are aware that we are a deposit taking NBFC, and we were restricted to accepting deposits from the state of Kerala alone. But with this AA rating and through the digital platform, we are now allowed to go Pan India, and we have already launched our Pan India FD campaign. Secondly, on the business performance and growth. So the vehicle finance industry has witnessed a very healthy momentum in H1, though there were apprehensions about the war and increasing oil prices, etcetera, but the industry has beaten all odds and shown a 21% growth in the first half of the year.

3:21 Two wheeler segment has recorded about 16% growth and both passenger as well as commercial vehicle has registered very healthy growth rate in H1. And against this industry backdrop, we achieved a cumulative disbursement in excess of INR1200 crores. More details on the numbers will be given by CFO, Ramandeep. Our commercial vehicle and construction equipment disbursements increased significantly by over 100% and so has been the case with our used car financing. Though the base has been small, but we've been able to make very significant strides in both these businesses and those continues to be our core area of focus going forward, while two wheeler will continue to be the warhorse.

4:08 Another milestone that we crossed in H1 was that our AUM crossed INR 3,500 crores as on September, reflecting a continued expansion of our core lending franchise. We are also consciously working towards a more diversified portfolio and channel mix by increasing the share of partners, various getting into more OEMs by getting into preferred financial tie ups as well as increasing the product diversification. This is an important indicator of the improvement in our origination quality and collection effectiveness. We have also strengthened our early warning mechanism, improving collection interventions and focusing on resolution of the existing stress portfolios.

4:57 Moving forward, our asset quality and collection remains a very, very important priority for us and we have made encouraging progress in strengthening our collection. Collection efficiency in all our buckets have improved and the most heartening part is that our forward flow to NPA has reduced by 31% over the last year same time. So we earlier we were in the last year, we were we had a forward flow of about 0.78%, which has come down to 0.5%, which is a very, very significant improvement. We have also made significant progress in strengthening our liability franchise. Our deposit grew deposit book grew by over 100% and largely because of the online intervention that we started in the beginning of this year.

5:45 And with us going Pan India, as I mentioned before, this will further add weight to that. On technology, we've been continuously investing and with the help of AI, we've been able to bring in house lot of the scorecards, BREs that we were currently outsourcing to various vendors. What it has done is that our time to market has significantly improved. Earlier, whenever we would want to make a change in any of our policies on the BRE's front, it would be it would attract a change request with the vendor and the request would be placed to the vendor. There will be a commercial involved and there will be an internal approval to be taken. And therefore, all of these would delay the time to market. Now on the entire two wheeler piece, all the BREs and the scorecards have been moved in house with our own data science team.

6:40 And the risk separation has been much better than the scorecards built by the vendors earlier. So we are very I think it's a very, very significant milestone for us in that respect. This quarter, we will be also bringing all the BREs and the scorecards for commercial vehicles and used car also in house. And the time line that we have taken internally is December for that. Looking ahead, our priorities for the second half are accelerating disbursement, improving productivity across our channels, including dealer and alternate channel, scaling our commercial vehicle construction equipment and used car businesses and building our Pan India FD franchise.

7:26 At the same time, we will remain disciplined on credit quality, collections, operating costs and capital efficiency. We don't intend to pursue growth at the expense of asset quality. Our emphasis will always be on a profitable growth, supported by stronger underwriting and better risk management. With that opening remark, I would like to hand over to Ramandeep Gilhuza, our CFO, for taking you all through the financials. Thank you very much. Over to you, Ramandeep. Thank you, sir. Good morning, all. So in this quarter, the company has done new fresh business of INR $6.77 crores. We'll do a detail as well, which has taken the company overall AUM to INR 3,500.

8:15 With this 25 percentage year on year growth has been achieved by the company. During this after this INR 3,530 crore of AUM, the total balance sheet size of the company has reached INR 4,154 crores, making the total life customer base to INR 586,441. The company is operating with total borrowings of INR 3,354 crore as of September end with a borrowing cost overall borrowing cost of 9.52 percentage. In this quarter, the shareholders' fund, we have reported at INR $6.83 crore and the part of the company was INR 0.11 crore. Now with this, coming to the asset quality, which we have reported, the GNPA has been reported as 4.61 percentage, while the NNPA with is 2.75%.

9:08 The company has an unchanged PCR, which is 50 percentage as compared to the previous three quarters. In this quarter, the as we said, the core lending, which we are not doing from last year or so, the only active partner was brief finance that has also been closed in Q1 itself. So the balance of the entire core lending book has been dropped down to INR $3.82 crores, while it was INR $7.91 crores same time last year. So this has been dropped by 52 percentage. This contribution from the AUM, the significant contribution has been done by bipolar channel, wherein INR 122 crore has been contributed in this quarter, while the co lending, as I said, has been dropped down by INR 115 crores, which we are working as of now.

10:06 The second best contribution came from the CV side, which is INR 70.23 crores is the growth and then followed by the used car channel, which is approximately INR 40 crore. So with this, the with this growth, the company's portfolio has been evenly spread across various geographies, while the South is contributing approximately 40 percentage of the total outstanding portfolio. The remaining portfolio has been evenly spread in West, North and East locations. This asset quality, we sit on a book of two wheeler stand alone, which was INR 2,636 crore. The company has reported a GSP of INR 135 crore. While for used car, which is having a book of INR $2.15 crore, the company is reporting a GNP of approximately INR 4 crore.

10:59 With construction equipment and CV, the overall book outstanding is INR $3.50 crore. On that, the GNP of the company is close to INR 3 crore. With that, the total GNP reported by the company comes to INR 145 crore. And then there is an up money case, which we have reported six months back, which comes to INR 15 crores. So the total GNPA comes to INR 160.11 crores. In this quarter, the percentage of my GNPA was 4.61%. As compared to the last quarter, it has gone up. But last quarter, we also did one ARC deal. And whereas in March quarter, it was INR 6.84 crore. While doing the apples to apples comparison, last year, the GNP was 5.76 percentage. And in this year, it was 4.61 percentage.

11:49 Now we try to analyze the asset quality of the organization that from where the asset quality is getting good and from which sources, we are not able to get the good asset quality. So with that, the first thing, the entire business that has been sourced in this quarter, so this is the first quarter in last forty eight months, wherein the company has sourced the entire business through its MCSL only, and there is no contribution by any partner through co lending or through Poplo. In this so when we just when we try to analyze from which channel the asset quality has gone up, from the dealer channel, which is our topmost channel of the organization and is contributing INR 2,453 crores to the overall AUM of the company.

12:42 This channel is contributing 4.56% as the GNPA, while the group relationship, which is contributing INR $4.22 crore, this channel, it is contributing 5.70% as my GNPA. And while other channels put together, it is contributing around 0.34%. While as compared to the four wheelers for my CV portfolio, on a total portfolio of construction vehicle, construction finance, this CV and CE, my total outstanding book is INR $3.56 crore. On that, the G and P comes to 0.35 percentage, while for my used car, the portfolio outstanding was INR $2.15 crore. On that, the G and P is 1.31 percentage only.

13:30 The company has taken our receipts from the installments, which has been received by the company, comes to INR $70.03 crore for this quarter. Out of those installments, INR $2.95 crore, which is 42 percentage, comes from bank and electronic mode, while INR $2.85 crore, which comes which constitute 41 percentage of those installments comes through NACH and remaining has been has come in the form of cash. So 83% of the installments comes through bank electronic board or NACH. While deep diving the financial of the company for Q2, we have seen that, yes, the impairment expense for this quarter has come to 21.44 crores.

14:17 Like I have also shared a slide with the investor it will be the first quarter wherein what we have planned for impairment was INR 7 crores higher. But the forward flow of the company was significantly lower in this quarter, which comes to 0.50 percentage on my total standard AUM as compared to 0.85 percentage same time in last year and 0.67 percentage in Q1. So this forward flow means that the fresh NPA for the companies are significantly going down. The only thing is the recoveries from the old NPA, which the company is making strategies to work and so that our overall impairment cost, at least for the upcoming quarters, should go down.

15:08 And so this analysis on the average of the company, the company is operating at a PBT ROA of 1.04 percentage, while the profit after tax ROA of 0.75%. In this quarter, the company has also done two DAs as well. That has also been reported as a Note four to the results that we have shared. The overall borrowing cost of the company in this quarter has gone down, specifically the bank loans, which has gone down by 0.61 percentage and the other costings are gone down by 0.15 percentage. Incrementally, the company has borrowed INR 1,003 crore in this quarter. That is contributed by bank loans INR 200 crore, NCDs INR 400 crore, the PTC and the securitization of INR $3.53 crore and fresh fixed deposit is INR 85 crore.

16:00 This is the first quarter wherein the fixed deposit in fresh collection has comes to more than INR $3.50 crore as compared to the previous quarter, which was in range of 18 percentage. Total deposit book, we have reported at INR 155 crore, marking a year on year growth of approximate two fifty percentage in the fixed deposit book. The company has also filed the structural liquidity and the ALM to the RBI. And in both the statements, we are not finding cumulative mismatch under any stage or any bucket. The liquidity position for the upcoming months, wherein in October, we have done a business of INR $30.06 crores, while we expect the same and that was the highest level for October.

16:47 And this is the first time the company has been able to scale up to INR 300 crores in a month. In November and going forward, we are expecting 400 plus INR 400 CCR of the fresh business. With that, the fund planning of the company has already been done. Whatever is the new funding is required and that those pipelines has already been blocked. On the overall yield for the with the investments with the collateral deposits and the unencumbered and the unencumbered deposits with these banks, the company is yielding a 6.79% while maintaining a liquidity of 148%. So that's it from my side. Over to you for the questions. Thank you very much. We'll now begin the question and answer session.

17:47 Session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask the question. Ladies and gentlemen, you may press star and one to ask a question. First question is from Manav Harshil from FinOptical. Please go ahead. Hello, sir. Congratulations, sir, to the team on a good set of numbers.

18:35 Hello? Yes. Yes. Yes. Thank you. So my first question is our own retail book has grown by, like, 25% year on year, and disbursements were up to 21% this quarter. So what is driving this growth and what AUM we are targeting by the end of FY 'twenty seven? Thanks, Harshita. I will take that question, Raman. The changes that we have made in our as I mentioned in my opening remarks, we have revamped our credit underwriting now by building bringing in an origination scorecard, which was completely built in house from our data science team. And that has resulted in our approval rates going up significantly.

19:22 Our approval rates are hovering around 45% to 50%, which was much lower than the industry the... Sorry to interrupt. Harshal, can you please mute your line from your side? Yes. So with the implementation of that, our approval rates have gone up to in excess of 70%, closer to 75%. And that has resulted in us gaining market share in the last couple of months. And as CFO mentioned in his presentation, the October numbers have been very encouraging. The overall retail in October, vis a vis last year, October was about 32% down. So last year, October, there was an overall sale of about INR 30 lakh units of vehicles, which has come down to INR 20 lakh units.

20:12 One of the reasons for that is also because last year, both the festive occasions of Navratri and Diwali Zantira came in the same month, and therefore, October was an inflated number. This year, we expect that number to happen in November. However, on a lower base of INR 20 lakhs, our overall disbursements have gone up significantly higher. And that is because of the interventions that we have brought in our BREs and our origination scorecard. On the question of AUM, we have crossed INR 3,500 crores, and we would expect anywhere to end or exit the year closer to a INR 4,200 crore range. That's our focus there.

21:03 Okay, sir. So and our two wheeler yield has gone up from like 20% to 22% over the past year. Like what has helped you improve this pricing? And can you maintain this level going forward? So actually, our internal MCSL yield has always been around the 21.5% to 22% mark. But what was pulling down the overall yield was that we had a significant share of co lending all this while. And as again, as mentioned by the CFO during his presentation, we have stopped we have taken a conscious decision to stop co lending business overall. And that book is book has become reduced by over 50%.

21:49 And that's the reason why the higher yield is reflecting in our books. So whatever is our MCSL book, that is more or less reflecting in our overall yield, whereas earlier, the co lending share, which was at a lower yield, would pull the overall yields down. So we will be able to sustain this yield going forward. Okay, sir. And sir, one last question on commercial vehicle disbursement grew like 62% and used loans grew 36% this quarter. How big do you want these segments to become in your overall book over the next two years? Over the next two years, car and CV should occupy more than 50% or closer to 60 of the overall book.

22:35 That's the focus for us. Because these two are longer larger ticket size loans, longer tenure loans, which will help us build our AUM faster. And of course, at a risk level, much lower riskier as a product compared to a two wheeler loan. Thank you. Happy Diwali to you too. Thank you. Next question is from the line of Bhavesh Chien, Individual Investor. Sir, first question is, our public deposits have grown drastically It's like reflecting a strong traction in our deposit mobilization.

23:31 So how do you envision the growth in the upcoming quarter and years? There are two reasons for the public deposit to grow. One is, of course, as I mentioned that our I mean, we've got a rating upgrade to AA, which enables us to go PAN India. While that's been a very recent change, but during the beginning of the year, we launched our online FD platform. So that made us much more accessible to the customers. Earlier, a customer would have to walk into a branch of ours to place an FD. And there also, we were not soliciting FD from all the branches because we had restriction of doing it only in Kerala. So branches were not exactly sourcing locations. We would finally, FDs were booked in only in the head office. And those kind of restrictions used to keep our overall access to customers restricted.

24:26 But now with us going online, having a full end to end journey on our website with a video KYC on all, the accessibility has increased. And of course, our rates are better compared to banks and other NBFC, which has helped us grow. And we will continue to focus on this product because this helps us diversify our liability franchise and also have more control because this is a very, very granular deposit. Our average ticket size here is only about lesser than INR 5 lakhs, okay? And that will help us already. And even it comes at a much lower cost than our current borrowing rate. So we'll continue to focus on this. And I'm sure that this going Pan India, we should be able to really grow this book fast.

25:21 Sir, got the clarity on public deposits. Sir, my next question is on bank borrowing cost. It has also come from seven basis points. So how much more can it come then? And can you guide us going forward for the upcoming quarters? Sure. So bank borrowing cost? Yes, sir. Okay. So bank borrowing cost has gone down. We have seen that 0.61 percentage reduction we have already taken. Now with this rating upgrade, I am expecting another 0.25% to 0.30%. But market these days, I market these days behaving in a way wherein we are not expecting some cost to go down. Still, we'll put all our efforts and that our target is extremely simple that whatever is the next funding that we'll receive from the bank, it has to be lower than the previous funding which we have received.

26:16 So with that target, I am expecting another 0.10 to come down by March end. Got it, sir. Thank you so much, sir. Happy Diwali to Muthoot Capital team. Happy Diwali to you. Happy Diwali to you too, Rajesh. Thank you. Thank you. Next question is from the line of Amit from Robo Capital. Please go ahead. Thank you. Actually, was looking to get NII numbers quarter on quarter and year on year and compare that to the growth of loan book. And I was trying to sorry, I joined the call late, but I was trying to find the same in the presentation. I couldn't find it.

27:06 So if the quarterly financial parameters and you can you can see that there is a fourth row, which is saying NII that we have shared. So last year, same time, I'll just read read it out for you. Last year, same Sorry time to interrupt you, sir. I don't see any P and L in the presentation, where I can compare quarter on quarter year on year for all lines. It is there. Sir, it is there. Parameter is there. I'll just so I'll say it to you. No problem, sir. So it is last quarter, is 72.15 crores, while in this quarter, it is it comes from INR 94.46 crores. So there has been increase in the NII by INR 16.80 crore. That is the change. Okay. And how was it last year, same quarter last year? Same quarter last year, was 72.15.

27:59 And Q1? So that is Q1, it was 77.66. And now to INR 94 crores. INR 94.46 crores. I'll tell you the this is because of two things, why it is increasing. Number one, we already did we did one DA transaction as well. So that upfront interest of around INR 14 crores is there in this transaction. So if you may make it down, it will be around INR 80.46 crores, still around 11%, 12% higher than what we have reported in the last year same time. Right. So I think the NII is not growing in tandem with the in line with the advances of loan book growth. Is that fair to say? How and when can we see the same type of NII growth like suppose the loan book is growing at 25%, we would like to see NII growing at 25%.

28:58 Sir, that's one thing. Like if loan book is growing by this space, NII can't grow like this. I'll tell you why. Because the loan book is a function wherein a function of the sourcing plus there are repayments as well. For example, a two year loan for a two wheeler, okay? So today, if I do INR 200 crore for a two wheeler business, 150 crore would be my repayment. So around that INR 150 crore, I will not get any sort of interest income. I will be only receiving INR $2.50 crore as an incremental sourcing. On that only, I will be able to receive the incremental interest income. Okay. So maybe that is the reason wherein my NII might not and then the another reason sir, since as you have seen finance cost is going down quarter on quarter, okay. And the interest income and the yields.

29:51 Like in last quarter, if you see Q2 of last year, my co lending portion was around 25 percentage of the entire book. So the blended yield was only 18.5 percentage. Now that portion is as an incremental portion is almost zero now. And then the total holding of the co lending books comes from 89%. So I am expecting so even if you see the blended yield has also gone up by 2%. Maybe when the effect of the entire book will go down because that book is sold at around 12% to 12.5%. So maybe the effect of the entire book will go down in the upcoming two, three quarters. And then we will be able to see pure increase in the tubular business from the MTSL.

30:39 On contrary, what has the impact of that tubular business increase on my interest income. So I think at that point in time, you will be able to see the interest income proportionately growing with my two wheeler book. I hope that will answer your question. Yes, sir. Correct. So let me just clarify for next year. So let's say we are at 80 crores now. And if you take it on the run rate basis, we may end up the year, let's say, $3.30 crores, INR $3.35 crores of run rate for NII. Now how do you see how do you see the loan book growth for FY 'twenty eight? Like suppose the loan book grew we finished the year at INR 4,000 crores, INR 4,200 crores range. How do you see the loan book for FY 'twenty eight in percentage terms? And then how do you see I the impact on understand, sir. So what so if you see now if you see the book now, if you see the investor slides, the third slide says that the loan book mix.

31:40 So right now, if you see on a loan book of INR 3,500 crores, that portfolio of corporate loan or I will say portfolio of the loans which are yielding lower comes to approximately INR 400 crores. Now that INR 400 crores effect will go down, say, for example, it will go down as INR 200 crores in next three quarters. Now next financial year, when you see the opening book as INR 4,200 crores, On that INR 4,200 crore, you will be receiving pure interest income, which is a higher yield on the interest income last financial year.

32:29 Sir, after you said off, we lost your audio. Can you repeat that one sentence again, please? Sorry, sorry. I'll just take it up now. So in the two quarters, say, now the overall AUM INR 3,500 crores, okay? Of that, the lower yielding AUM contains around INR 400 crores approximately. Now that INR 400 crores will get down, say, in approximately four quarters. So by March, that INR400 crore would be outstanding is INR200 crore in the entire book. So with INR4200 crore of the total outstanding, the INR200 crore would be my lower yielding and INR 4,000 crores would be my higher yielding interest. If you compare that with my March 2026, now what happened in March 2026, my AUM, which I have closed at around INR 2,600 crore, of that eight INR 100 crore was my lower yielding, which comprise of my corporate loan and my co lending.

33:30 So it was around 40 percentage. Now that has that will be gone down to 7% to 8% in March 2027. So going forward, I will be earning the higher interest of that 2,000 crore of income. So maybe in next financial year, we can see that the growth of the NII would be much higher than what we have seen in this year. So I hope I am able to answer your question mathematically. Thank you. Muth, I'll request to come back for a follow-up question. Next question is from the line of Divya Jain from Safira Capital. Please go ahead. Hello, Am I audible?

34:19 Yes, Divya, but your voice is breaking a little bit. What kind of do we expect for this year and next year? One second. I didn't hear you properly. The freight cost, she's asking the the freight cost. Okay. So shall I take that? Yes, yes, take it. Sir, sorry, Tim. So we are already at a PBT ROA of one percentage and the next six months, so now this season has been started for the company from October onwards. So we are expecting whatever we have sourced in the first six months, that will be multiplied by two. And then so as the jump can be seen in the interest income.

35:06 Also, the parameters for asset quality has been arrested by the company. As I have said that the forward flow of the company to the NPA has gone down to 0.50 percentage, while it was 0.87 percentage in last year and 0.67% in my Q1. So with that, the impairment cost is going down quarter on quarter. Right now, we can see that as of H1, INR 28 crore was my total impairment cost. Now that cost, I will not say that it will become INR 56 crore as an additional cost. It will not be like that. So we want to arrest that cost and it has to be sub-two percentage as we close our March 2027 results.

36:01 Dubeya, we are unable to hear you. Due to no response, we move on to the next participant. Next question is from the line of Shethi Jawarma from Rest Assured Wealth Advisors. Yes. Sir, previously, we had mentioned few calls away that the ultimate goal of the company is sometime to hit a 4%, 4.5% ROA blended ROA type return. So my understanding was I wanted to understand if we take a net yield of, say, 12%, we'll be able to manage the OpEx and NPA within 6% to 7% because currently, it's looking like a very difficult glide path to that type of NPA for two?

36:56 Yes. You are right that our goal is about 4%, and we stick to that number. Currently, what is happening is that we have two new businesses, which is in an investment phase, which is used car and CV. Both the businesses stand alone don't make profit because it's investment time that we are adding manpower there, we are putting credit collection, sales infrastructure there. And therefore, it is a it's burning cash, both these businesses. Also, we have made a lot of investment in IT, which is why today, the entire heavy lifting is being done by the two wheeler business. Gradually, as the businesses these two businesses grow, we expect CV to breakeven by the end of this year and car to breakeven by, say, first quarter of next year. And that's when we will see the actual impact on the ROA.

37:56 Just one more question. Sir, recently, there was a presentation being done on account aggregators where they had mentioned a slide where loans were sourced via accounts aggregator versus non accounts aggregator. And for our product lines, the NPA ratios experience there was much better because of much higher data touch points. So what is the management's opinion on this? Should we, in future, look at AA seriously? Or we will rely on our own data sets and our own points? That was my last So we are already using account aggregator for almost a year now. And in fact, on the two wheeler business, we have almost 40%, 45% hits from the account aggregator. And on car and CV, we have in excess of 65% hit.

38:44 So it's a mandate. Every customer, we put in through the account aggregator mode. But the failure rates are higher on a two wheeler profile. And therefore, we have been able to reach about forty percent, which also, I think, is a very good number compared to the industry. Many two wheeler players don't use account aggregator. Currency already reached 65%. So we've been using account aggregator for quite some time or at least a year now. Does that answer your question? Yes, yes, sir. Thank you so much. Happy Diwali. Thank you. Happy Diwali to you too. Thank you, Shitej. Next question is from the line of Rahul Sahoo, Individual Investor.

39:31 Go ahead. Am I audible? Yes, Rahul. Yes, go ahead. My name is Rahul. I just have a couple of questions. As the Phoenix ARC tool has already seen about 77% of its security received redeemed. So are the recoveries coming better than expected? And could this lead to any write backs in the coming quarters? Yes, you are right. The recoveries are much better than expected. And write back, Raman, you want to take that on the write back? At what point in time we will be ready for a write back? So we are expecting this Phoenix pool to get recovered, honestly, as of September of next year. It would be 100% recovered.

40:21 Then when that when I say recover, which means the original pool size was INR $2.35 crore, of that my security receipt was only INR 102 crore. So the balance sheet will always say INR 102 crore, on that INR 102 crore, we'll be able to recover the finish. Now the remaining pool between INR 102 crore INR $2.35 crore that we originally sold, whatever recoveries will come, that will come only to MCSL. And if you see the trend, the recoveries from this pool, even for last six, seven months, it is around INR $2.2.5 crores itself. So which means that in next year also, we want to continue the same momentum. And these customers also exist. So which means that the position is required, which we are doing also. So yes, by next year, after next year, September 2027, we are expecting a good amount of chunk from all three ARCs.

41:12 First, yes, ARC one will get closed. Then ARC two, next financial year, I'm expecting it will also reach to somewhere close to 80%, 85% of repayments. Okay, sir. One more question. You now have over around point eight lakh live retail loans across 23 states. So which new states or region do you see as the biggest growth opportunity going forward? So we would want to go deeper into the existing states as of now because there is still a lot of scope there. We still have we still are hovering around a 2.5% to 3% market share in two wheeler and much smaller in other two businesses. So we still have scope to go much more deeper into the existing space. We will consolidate our positions there and then look for any further expansion. I think we are adequately covered as of now.

42:08 Okay, sir. Thank you. Happy Diwali. Happy Diwali to you too. Thank you very much. Ladies and gentlemen, we'll take that as the last question. I would now like to hand the conference over to Mr. Mathias Marcos for closing comments. So thank you, everyone, for joining this call. Once again, as we go into the festive season, let me take this opportunity to wish all of you and your loved ones a very happy Dhanteras and a happy Diwali and lot of prosperity ahead. Thank you for showing your confidence in Muthoot Capital Services and request you to continue to stay invested. And from the management side, we are working hard to ensure that the company does well in all the parameters and really becomes a North Star. Thank you very much for joining us today.

43:02 And once again, best wishes to all of you. Thank you. Thank you very much. On behalf of Muthoot Capital Services Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.