Assurance vie simulation – Transcription révisée de la conférence téléphonique ou de la présentation des résultats de M & MFIN.NSE 15-May-20 11:45 GMT


Mumbai 16 mai 2020 (Thomson StreetEvents) – Transcription modifiée de la téléconférence ou de la présentation des résultats de Mahindra et Mahindra Financial Services Ltd Vendredi 15 mai 2020 à 11 h 45 min GMT

Mahindra & Mahindra Financial Services Limited – VP du Trésor et des Affaires générales

Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe

Elara Securities (India) Private Limited, Division de la recherche – AVP, responsable de la finance diversifiée et analyste

Batlivala & Karani Securities India Pvt. Ltd., Division de la recherche – Analyste de la recherche

Mesdames et messieurs, bonjour et bienvenue à la téléconférence sur les résultats du quatrième trimestre et des exercices financiers de Mahindra Finance organisée par ICICI Securities. (Instructions de l’opérateur)

Veuillez noter que cette conférence est enregistrée.

Je donne maintenant la conférence à M. Abhijit Tibrewal. Merci, et à vous, monsieur.

Abhijit Tibrewal, ICICI Securities Limited, Division de la recherche – Analyste de recherche [2]

Merci Steven. Bonsoir à tous. Je suis très heureux d’avoir parmi nous aujourd’hui, l’équipe de direction de Mahindra Finance. Nous avons avec nous, M. Ramesh Iyer, vice-président et directeur général; MV Ravi, directeur exécutif et directeur financier; M. Rajnish Agarwal, vice-président exécutif, opérations; M. Dinesh Prajapati, vice-président principal, Trésorerie et affaires générales; et M. Rajesh Vasudevan, SVP accounts.

Ils sont ici pour discuter du Q, de la performance de l’entreprise au T4 FY ’20 et des perspectives commerciales à l’avenir. Nous aurons une session de questions / réponses après cette discussion.

Permettez-moi maintenant de céder la parole à notre invité d’honneur de Mahindra Finance.

À vous, monsieur Iyer, de partager vos remarques liminaires sur les résultats.

Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [3]

Bonjour. Bonsoir à tous. Tout d’abord, des excuses sincères pour avoir retardé cet appel de – nous étions censés le recevoir à 17 h 15. Nous avons 1 heure de retard, principalement en raison de notre incapacité à transférer les résultats aux échanges, et cela l’a un peu retardé. Néanmoins, mes sincères excuses et merci beaucoup de vous joindre à cet appel.

Je n’entrerais pas vraiment dans les numéros d’articles en ligne. Cela doit déjà être avec vous. Et grâce aux questions et réponses, nous pouvons réellement les gérer. Mais je voudrais plutôt raconter où nous en sommes, ce que nous voyons sur le terrain et où voyons-nous aller d’ici.

Donc, la première chose est d’abord, je pense, cela fait maintenant plus d’un mois que le lock-out est et très heureux d’annoncer qu’environ 500 de nos succursales sont déjà en place et fonctionnent, et qu’elles ont été ouvertes dans les zones verte et orange du pays. Et comme je l’ai dit, ils sont prêts à travailler, et nous avons commencé à assister à des rendez-vous, tant pour demander de nouveaux prêts que pour le remboursement des versements. Cela nous donne donc une grande confiance dans le fait que les choses commencent à redevenir normales. Et sur une période de temps, c’est sûr, ça va se calmer et les choses vont commencer à arriver.

Nous pensons très fermement que, compte tenu de la bonne récolte de cette saison, la plupart des États, le cash-flow agricole se maintient. Et nous en sommes déjà témoins à travers des collections, même pendant cette période.

Au moment où nous parlons, si nous regardions le pourcentage de nos consommateurs qui a effectivement opté pour l’offre de moratoire, je pense qu’environ 75% de plus ont pris le moratoire, mais ceux qui n’appartenaient pas, en grande partie, à la communauté agricole, où ils estimaient que leurs flux de trésorerie s’amélioreraient et ils seraient en mesure de payer. La vraie question était: comment viendront-ils payer et comment irons-nous chercher? Et donc, lorsque nous leur avons donné des options de dépôt dans les banques ou de virements numériques, et cetera, certains d’entre eux ont choisi cette option. Et avril a été témoin d’une collecte décente, et mai, 15 jours de collecte ont déjà égalé ou légèrement dépassé même ce que nous avons collecté en avril. Donc, dans cette mesure, nous sommes extrêmement confiants et heureux que les consommateurs reviennent à la normale, même sur ce front.

Nous l’avons déjà dit et nous continuons de tenir bon, même avant l’impact COVID, nous avions dit, toute normalisation des volumes d’affaires, nous ne pourrions voir qu’après octobre, c’est-à-dire la saison des festivals. Et il semble que cela ne commencerait qu’à cette époque, car le BS-IV ou BS-VI sur le devant du véhicule est toujours en cours de tri, et par conséquent, les gens peuvent décider d’acheter de nouveaux véhicules. Le côté tracteur montre déjà de la traction. Nous pensons que le segment des véhicules d’occasion sera certainement celui qui présentera une meilleure traction au cours de cette période. Les gens veulent acquérir un véhicule d’occasion plutôt que d’investir dans un nouveau véhicule. Cela pourrait donc devenir une histoire de redressement ou pourrait devenir une histoire, qui émergera beaucoup plus rapidement. Nous pensons donc que, alors que les choses vont commencer à se produire, mais au moment où nous pouvons commencer – parler de normalité en termes de volumes, et cetera, nous verrions clairement que ce sera après octobre, où nous commencerions à voir cette. Il s’agit de moments où nous pensons que nos priorités sont de veiller à ce que les employés reviennent en toute confiance au travail et qu’ils n’aient aucun problème de sentiment ou de peur avant de retourner au travail. Il y a donc beaucoup de programme d’engagement des employés en termes de notre programme de communication, et cetera.

Au cours de cette période, nous nous sommes définitivement concentrés sur les domaines où nous pouvions vraiment contrôler et réduire les coûts. Et dans l’un de nos appels précédents, j’avais mentionné que c’était notre domaine d’intérêt. Nous avons identifié environ 8 ou 9 domaines ciblés où nous pourrions réduire les coûts, et certains d’entre eux réduisent le coût de notre loyer d’agence. Nous sommes en pourparlers avec différents propriétaires et nous recevons des signaux très, très positifs de leur part d’accord pour réduire les loyers de 20%, 25% environ. Voilà donc un domaine de concentration très clair.

Je pense que nous examinons tous les contrats externalisés que nous avons pour la sécurité ou pour les BPO, et cetera, et nous pensons qu’il existe des opportunités très claires pour que nous puissions renégocier les prix autour de tout cela. Nous sommes donc convaincus qu’avec tous nos efforts vers des programmes de réduction des coûts sur une période de temps, nous en verrons les bénéfices cette année, alors que nous progressons tout au long de l’année et atteignons la fin de l’année. Nous en verrions un avantage décent. Si je dois juste mettre un chiffre autour de cela, nous pensons qu’une économie de 40, 50 points de base avec tous les efforts mis en place sur une base annuelle est certainement possible. Ce sera donc un domaine très ciblé.

En ce qui concerne les collections globales, comme je l’ai dit, alors que le côté de la ferme a commencé à répondre positivement au remboursement, et cetera, je pense que le côté des véhicules commerciaux, le modèle de taxi agrégateur, qui dépendent du conducteur, principalement les entreprises qui sont dépendants du conducteur, où les conducteurs sont retournés en tant que migrants dans leurs villes d’origine respectives, pourraient prendre un peu plus de temps pour rebondir, en tant que potentiel de gain.

Même si les choses devaient se normaliser, disons, le lock-out doit être levé d’ici la fin mai environ, au moment où les gens reviennent au travail et remettent leur véhicule en rémunération et commencent à gagner et à rembourser, pourrait prendre un autre environ un quart. Nous devrons donc vivre ce point douloureux pendant encore un quart au moins avant de pouvoir dire que tout est revenu à la normale.

C’est dans cette direction que dans les comptes de mars ’20, nous avons pris une provision supplémentaire prospective basée sur ce que nous pensons être probablement sur le marché. Nous croyons que nous avons adopté une position agressive pour prendre cette disposition, et nous pourrions en bénéficier à mesure que les choses commencent à changer. Et nous pourrions obtenir l’avantage de renversement au fur et à mesure.

Jusqu’à présent, nous ne sommes pas entendus et nous ne pensons pas que les clients puissent vouloir céder leurs actifs et des choses comme ça. Je ne pense pas que ce sera l’histoire, parce que la plupart de ces actifs rapportent des actifs, ce sont des produits vitaux pour bon nombre de nos consommateurs. Nous verrions un retard certain, mais nous ne les voyons pas en défaut ou un abandon en découlerait.

Donc, si je dois donc conclure d’où vont les affaires ou où seraient les collections, je pense qu’après un quart ou deux, les choses devraient paraître beaucoup, beaucoup plus normales. Et comme nous avons adopté une position agressive en termes de provisionnement supplémentaire, et cetera, cela devrait nous être très avantageux dans cette direction.

Nous ne voyons pas trop de concurrence se produire pendant cette période, car si vous n’avez pas vos succursales physiques et des choses comme ça dans ces domaines, il n’est pas facile pour quelqu’un de venir maintenant et de commencer une entreprise. Et donc, nous pensons que les acteurs existants bénéficieront des volumes, alors que les volumes globaux devraient certainement baisser. Je pense que l’année ’20 sera une année, qui ne peut être comparée au passé et faite référence, que ce soit une croissance ou une décroissance. Je pense que l’année ’20 devra être analysée d’un point de vue, comment l’entreprise revient à la normale et quels sont les principes fondamentaux de l’entreprise qui fonctionne en faveur et quels sont les changements que nous sommes prêts à apporter à faire fonctionner en faveur.

Ainsi, le mouvement numérique en termes de donner aux consommateurs la possibilité de rembourser numériquement ou même d’exiger numériquement des prêts, que nous pouvons analyser, évaluer et leur fournir, sera certainement l’un des domaines ciblés à partir desquels vous verrez des changements notre côté.

Nous pensons également très fortement, étant donné une base de clients très importante et un personnel très local, pensez, faites, a une connaissance très locale, sera un avantage supplémentaire pendant cette période, car nos clients existants peuvent vouloir des prêts à court terme, que nous avait lancé en tant que programme, même 6 mois, 8 mois en arrière, pour notre client existant avec d’excellents antécédents. Et je pense que c’est quelque chose qui nous aidera à grandir pendant cette période, mais nous serons très sélectifs sur qui nous voulons fournir un tel produit, mais le faisons – nous voyons cela comme une opportunité.

Je pense que le domaine important pour se concentrer vraiment sur ces clients sera également le côté responsabilité en termes de bien, comment sommes-nous préparés du côté responsabilité. Et je tiens à confirmer que, même si cette situation devait continuer de la même manière pendant les 6 prochains mois, nous sommes très, très à l’aise de déclarer que nous avons des dispositions adéquates pour la liquidité et que nous serions en mesure de faire face à tous nos passifs. , y compris les paiements d’intérêts à temps. Nous serions en mesure de faire face à tous nos coûts fixes à temps. Nous ne voyons pas de problème sur le plan des flux de trésorerie, même si vous deviez supposer que la situation actuelle devait se prolonger sur une plus longue période.

Je pense que ce sont des moments où il faut avoir un contrôle absolu sur ce qui se passe, mais plus important encore, il faut être très clair et avoir des pratiques éthiques et de gouvernance très élevées. Ce n’est pas le moment de prendre des raccourcis sur quoi que ce soit. Je pense que nous ne subirions aucune de ces pressions. Je pense que nous veillerons à ce que ce que nous faisons soit absolument transparent du point de vue des consommateurs. Et nous pensons que cela nous placera en tête de nombreux en termes de nos relations avec les OEM, en termes de relations avec la communauté des concessionnaires, ainsi qu’avec notre clientèle existante.

Lorsque nous parlions, bien sûr, l’autre domaine de coûts que nous examinerions également concerne les employés. Nous n’envisageons pas une réduction des effectifs ou une baisse de salaire comme option à envisager. Mais refondre le salaire et changer le mix entre fixe et variable est une option sur laquelle nous travaillons très fortement. Et nous pensons que cela aiderait l’entreprise à économiser des sommes substantielles.Si la performance globale devait souffrir en raison des conditions du marché, l’entreprise pourrait ne pas avoir à encourir ce type de coût.

Donc, le thème plus large que j’essaie de diriger clairement est de mettre en place des contrôles appropriés et de s’assurer que le coût est bien maîtrisé, la liquidité est correctement ciblée et, par conséquent, une liquidité adéquate est mise à disposition pour faire face à tous les passifs, y compris les coûts fixes. exigences, pour se concentrer sur la croissance de l’entreprise dans les domaines d’opportunité, où nous pensons que le client a besoin d’un véhicule, qui est un moyen de subsistance et un produit de gain pour lui.

Et enfin, pour nous assurer que dans les zones où les gains commencent à se produire, où les clients commencent déjà à gagner, nous veillons à ce que nos versements soient bien collectés et contrôlés. Et compte tenu de tout cela et de la position que nous avons prise pour que des provisions plus élevées soient déjà constituées, nous qui pensons que l’année 2020 verrait une amélioration supplémentaire de la qualité de nos actifs, une meilleure couverture de nos ratios NPA et une meilleure gestion des notre garantie.

Avec tout ce thème, nous penserions que l’année 20 serait, honnêtement, une année de correction et d’investissement, ce serait une année de réexamen des processus et de contrôle des coûts que nous envisageons, et elle finirait comme un an, où nous aurions construit une plate-forme substantielle pour pouvoir évoluer à partir de là dans la nouvelle ère qui s’ouvrira après cette situation, qui, selon nous, pourrait commencer après le festival.

Je pense que je m’arrêterais là-dessus en tant que mes premiers commentaires, et nous sommes ouverts aux questions, que nous prendrions tour à tour.

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Questions et réponses

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Opérateur [1]

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(Instructions pour l’opérateur) La première question vient de la lignée de Mahrukh Adajania d’Elara Capital.

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Représentant de l’entreprise non identifié, [2]

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Monsieur, quelle serait votre liquidité totale au bilan en ce moment? Et combien auriez-vous amassé au cours des 2 derniers mois? De plus, quels seraient vos remboursements jusqu’en septembre et jusqu’en décembre?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [3]

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Dinesh, voulez-vous répondre rapidement à cette question avec les données?

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP du Trésor et des Affaires générales [4]

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Oui. Nous avons également partagé notre présentation. Nous avons environ 4 500 crores d’investissements liquides disponibles à ce jour. Et nous aurions collecté au cours des deux derniers mois plus de 3 000 crores INR à travers différents modes sous forme de prêt à terme, titrisation LCD tous ensemble. Nous avons même donné une calendarisation des échéances, qui arrivent de mai à septembre, si vous pouvez vous référer à notre présentation.

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Analyste non identifié, [5]

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Sûr. Et jusqu’en décembre, auriez-vous le montant approximativement?

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP du Trésor et des Affaires générales [6]

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Je vais devoir revenir en arrière et vérifier – vérifiez, mais en gros – à peu près chaque mois, il y aura une maturité de près de 1 000 crores INR.

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Représentant de l’entreprise non identifié, [7]

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Dinesh, vous pouvez le partager hors ligne, avec tous les investisseurs plus tard.

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP du Trésor et des Affaires générales [8]

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Sûr. Sûr.

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Analyste non identifié, [9]

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Et combien auriez-vous récolté grâce au TLTRO, les 2000 crores INR, non?

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP du Trésor et des Affaires générales [10]

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Non. D’avril à la date actuelle, nous avons collecté environ 675 crores INR.

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Analyste non identifié, [11]

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Désolé, 675 crores INR. D’accord. Et le reste, ce sont tous des prêts à terme, et pourriez-vous partager les taux différentiels sur les emprunts ou le coût marginal d’emprunt, tout à l’heure par rapport à la période antérieure au COVID?

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP du Trésor et des Affaires générales [12]

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Enfin, les obligations que nous avons levées sur le TLTRO se situent entre 7,5 et 7,65%

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Analyste non identifié, [13]

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D’accord. Et les prêts à terme?

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP du Trésor et des Affaires générales [14]

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Les prêts à terme sont liés au MCLR. Quel que soit le MCLR actuel.

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Opérateur [15]

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La question suivante vient de la lignée de Ritika Dua d’Elara Capital.

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Ritika Dua, Elara Securities (India) Private Limited, Research Division – AVP, Lead of Diversified Financials & Analyst [16]

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Donc, tout d’abord, sur le moratoire – je suis désolé, j’ai manqué un peu de vos remarques liminaires. Quel est donc le pourcentage de vos emprunteurs qui ont demandé le moratoire? Et la deuxième question est, une certaine compréhension du provisionnement que vous avez pris, que vous avez partagé, nous pensons que c’est évidemment de nature assez conservatrice, peut-être une certaine compréhension de ce qui est derrière le chiffre?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [17]

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Donc, en termes de pourcentage de clients qui ont opté pour un moratoire, je dirais environ 75%. Et comme je l’ai également quantifié en disant que, en grande partie, la communauté agricole ainsi que les professionnels de l’utilisation personnelle comme les enseignants locaux, les médecins et ce genre de personnes qui ont pris. Ceux qui ont un revenu fixe sont ceux qui n’ont pas opté pour le moratoire.

En ce qui concerne la logique ou le raisonnement derrière ce type de provisionnement, je pense que nous l’avons envisagé sous 3 ou 4 angles. Je pense, premièrement, que nous avons examiné différents segments, qui sont les segments de clients qui peuvent prendre un peu plus de temps pour revenir à la normale, compte tenu de la situation actuelle. C’est un. Donc, comme je l’ai dit, les véhicules commerciaux ou l’agrégateur de taxis sont le genre de segments qui, selon nous, pourraient prendre un peu plus de temps, d’ailleurs. Quiconque est dans le secteur du transport de passagers, au départ, les gens résisteraient à voyager dans ce genre de mode avec plus de personnes. Donc, par conséquent, le volume des affaires pourrait baisser, ou le nombre de passagers voyageant pourrait baisser. Nous avons donc considéré cela comme une approche.

La seconde que nous avons considérée comme une approche est, étant donné que pendant cette période d’un an, nous aimerions davantage associer les clients et ne recourir à aucune sorte de reprise de possession, et cetera. Cela pourrait donc signifier aller de l’avant, il pourrait y avoir une baisse du véhicule, le prix peut arriver, à un stade ultérieur si vous décidez de reprendre le véhicule. Nous avons donc pris en compte une possibilité qui en découlerait.

Le troisième que nous avons examiné provient d’une zone. Quels que soient les clients qui se trouvent dans les zones rouges et dans ce type d’applications, nous avons même fait un approvisionnement un peu plus agressif, car la zone rouge, selon nous, prendrait certainement un peu plus de temps qu’évidemment le vert et l’orange. Donc, en rassemblant tout cela, nous avons une sorte de sentiment, il est nécessaire que le pourcentage d’ECL passe de 30 à 35, et dans certains cas, jusqu’à 40, dans la zone rouge, et cetera. Et cela nous a amenés à ce nombre, que nous avons prévu.

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Ritika Dua, Elara Securities (India) Private Limited, Research Division – AVP, Lead of Diversified Financials & Analyst [18]

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Monsieur, juste une chose, sur la zone rouge, monsieur, n’importe quel nombre là-bas, quel pourcentage de nos succursales ou quel pourcentage de clients y a-t-il aujourd’hui dans la zone rouge?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [19]

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28% à 30% de nos clients ou succursales ou actifs, peu importe comment vous l’appelez, environ 28%, 30% seraient en zone rouge. Mais il est, encore une fois, important de comprendre que la zone rouge ne signifie pas que tout ne va pas se passer là-bas, non? Il faudra donc peut-être un mois de plus que peut-être ou 2 mois de plus qu’une zone verte. Donc – mais oui, c’est environ 28% ou 30% de nos clients qui seraient à cet endroit.

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Ritika Dua, Elara Securities (India) Private Limited, Research Division – AVP, Lead of Diversified Financials & Analyst [20]

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D’accord. Et le nombre de 75% que vous avez mentionné était-il auparavant comme une valeur?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [21]

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Désolé?

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Ritika Dua, Elara Securities (India) Private Limited, Research Division – AVP, Lead of Diversified Financials & Analyst [22]

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Le nombre de 75% que vous dites en termes de moratoire, c’était comme …

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [23]

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En termes de valeur et de nombre, ils seraient plus ou moins les mêmes. Peut-être 2%, 3% ici et là.

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Opérateur [24]

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La question suivante vient de la lignée de Karthik Chellappa de Buena Vista Fund Management.

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Karthik Chellappa, Buena Vista Fund Management, LLC – Analyste d’investissement [25]

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Le crore de provisions INR 560 qui est pris pour COVID, comment cela se répartira-t-il géographiquement? Je veux dire quels sont les États qui contribuent à la majorité de cette disposition?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [26]

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Je pense que l’Est aurait contribué un peu moins parce que l’Est a beaucoup de zones vertes. Mais comme autrement, je pense que le nord, l’ouest et le centre enlèveraient presque 60%, 70% de cela peut-être. Mais c’est plus que la géographie, comme je l’ai dit, nous avons considéré la zone rouge comme une approche. Nous avons examiné diverses applications, qui risquent de souffrir comme deuxième approche. Et notre approche de partenariat de ne pas vouloir retirer les actifs, mais plutôt de donner du temps au consommateur pour gagner et rembourser est l’approche 3 – ce ne serait pas – nous n’avons pas vraiment examiné l’état pour dire, mais certainement, une fois que vous regardez la zone rouge, la vitesse entre en jeu automatiquement. Dans ce contexte, je pense que l’est serait le plus bas et l’ajout du sud, de l’ouest, du centre et du nord pourrait presque enlever une part égale, peut-être.

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Karthik Chellappa, Buena Vista Fund Management, LLC – Analyste d’investissement [27]

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Et monsieur, est-ce un cas où vous avez identifié un certain stock de prêts et avez immédiatement pris une couverture de 40%, 50%. C’est donc la confiance qui vous donne, c’est au deuxième semestre je pense, dans la mesure où cette disposition devrait être adéquate? Ou est-ce comme un niveau de provision inférieur à une option d’achat d’actions plus importante?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [28]

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Non. Comme je l’ai dit, non, nous avons appliqué les 3 critères, non? Et si ces hypothèses devaient en quelque sorte commencer à s’améliorer, alors l’avantage en découlerait pour nous. Maintenant, si l’hypothèse devrait se concrétiser dans 3 mois, 4 mois, 6 mois, nous devrons attendre et voir comment les choses s’ouvriront. Mais clairement, nous pensons que, comme, par exemple, nous avons pris dans la zone verte, disons, l’application de transport ou l’application du moment des personnes, nous pensons que cela pourrait tourner beaucoup plus vite que dans une zone rouge.

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Karthik Chellappa, Buena Vista Fund Management, LLC – Analyste d’investissement [29]

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D’accord. Génial. Et monsieur, à ce stade, vous n’avez pris aucun moratoire d’aucune banque – monsieur, vous n’avez profité d’aucun moratoire d’aucune des …

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [30]

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Non, nous n’avons pas pris. Nous n’avons pas pris.

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Karthik Chellappa, Buena Vista Fund Management, LLC – Analyste d’investissement [31]

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D’accord. Et le commentaire sur les tracteurs, je pense, était – à la marge était positif. En ce qui concerne vos autres classes d’actifs, qu’il s’agisse de véhicules utilitaires, de voitures ou de flottes, qui selon vous seront les plus rapides à récupérer et qui seront les dernières. Probablement, je pense que CV est le dernier, mais …

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [32]

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Le CV pourrait être le dernier, mais même dans le CV, le LCV et le camion simple, les opérateurs conduits par le propriétaire rebondiront plus rapidement que l’opérateur de la flotte, car le problème de l’opérateur de la flotte sera également lié à la disponibilité du conducteur. Par conséquent, cela pourrait prendre plus de temps. Je pense que les opérations de taxi – les opérations de taxi agrégateur, car elles sont très semi / urbaines, axées sur l’urbain, pourraient prendre un peu plus de temps. Mais les rebonds les plus rapides comme, le tracteur est d’abord, peut-être, suivi du ramassage, suivi du 3-roues, du transport de marchandises, des petits transporteurs de paquets, je pense que ce type de segments rebondira plus rapidement. Il ne faut donc pas oublier que dans l’Inde rurale, le mode de transport des personnes reste entre les mains d’opérateurs privés. Il n’y a pas trop de transports en commun.

En règle générale, ce qui se passerait, c’est que le nombre de personnes voyageant actuellement avec ces véhicules diminuera. Et cela pourrait, honnêtement, devenir une opportunité de vendre plus de véhicules. Et puisque cela pourrait éventuellement être une opportunité temporaire, les gens peuvent regarder un véhicule d’occasion à cette fin, plutôt qu’un nouveau véhicule à cette fin. La demande de véhicules devrait augmenter. Ça c’est sûr.

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Karthik Chellappa, Buena Vista Fund Management, LLC – Analyste d’investissement [33]

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Je l’ai. Très clair. Monsieur, juste un suivi de plus …

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Opérateur [34]

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M. Chellappa? Monsieur, désolé de vous interrompre, monsieur, mais pour tout suivi, veuillez vous demander de rejoindre la file d’attente, s’il vous plaît.

(Instructions de l’opérateur) La question suivante vient de la lignée d’Umang Shah de HSBC Securities.

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Umang Shah, HSBC, Division de la recherche – Analyste des finances [35]

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Je voulais juste comprendre. Ainsi, la réconciliation entre les maisons à prix élevé et l’Inde AS qui a été donnée dans la présentation, il semble y avoir un déficit dans les dispositions de l’étape 3. Mais évidemment, il y a des dispositions excédentaires à l’étape 1 et à l’étape 2. Alors, comment devrions-nous y lire? Je veux dire, devons-nous en quelque sorte créer un écart par rapport aux dispositions de l’étape 3 dans les trimestres à venir?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [36]

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Non. L’étape 3 est donc basée sur la perte de crédit attendue. Alors vraiment, on n’a pas à le remplir, non? Nous avons pris des dispositions supplémentaires à l’étape 3, en supposant ou en estimant que la perte attendue pourrait légèrement augmenter dans la situation actuelle, et c’est ce que j’expliquais que, si les situations s’amélioraient plus rapidement, nous pourrions même bénéficier de l’inversion sur une période de temps. Ce ne sont donc vraiment pas des comparaisons. Je veux dire quand RBI voulait que nous comparions les deux, c’est pour s’assurer – parce que plus tôt, il n’y avait pas d’étape 1, d’étape 2 en soi, si vous regardez vraiment. Par conséquent, ils voulaient s’assurer que les dispositions générales ne soient pas en deçà. Et s’ils devaient échouer, ils voulaient que nous fassions une provision supplémentaire, si besoin était. Donc, dans notre cas, puisque nous portons déjà une provision plus élevée que ce que nous aurions autrement fait sous le régime précédent, ce besoin n’est pas arrivé là.

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Umang Shah, HSBC, Division de la recherche – Analyste des finances [37]

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D’accord. D’accord. Et juste une question sur les coûts d’exploitation. Étant donné qu’il y a une très forte baisse des OpEx ce trimestre, y a-t-il des reports de coûts, ce qui s’est produit?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [38]

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Non. Il n’y a aucun report de frais. Comme je l’ai dit, du côté des gens, clairement, s’il y a des programmes d’incitatifs, si la performance n’a pas été là en mars ou en février, quel que soit le mois, alors ces incitatifs ne doivent pas être payés, ni au concessionnaire, ni aux employés ou personne d’ailleurs. De même, comme je l’ai dit, nous avons mis l’accent sur la réduction des coûts au cours des 6 derniers mois. Je ne dirais pas que tout est déjà mis en pratique, mais les avantages ont commencé à affluer à coup sûr. C’est donc le deuxième, non? Et le troisième, je pense que nous avons expliqué même je pense lors du dernier appel ou peut-être quelque chose avant cela, qu’il y avait ce coût fixe provenant de la gratification ou autre chose, ce qui – en raison de la refonte de la compensation qui a été faite. Une fois reformulé, je pense qu’il y a un avantage à en découler. Mais il n’y a absolument rien de différé, qui viendra nous frapper au cours des 2 prochains trimestres ou quelque chose comme ça. Rien de ce genre.

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Opérateur [39]

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La question suivante vient de la lignée d’Anubhav Agrawal de ICICI Bank.

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Anubhav Agrawal, [40]

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Je voulais savoir quelle est l’efficacité actuelle de la collecte sur différents produits? Et comment est-il passé de la situation pré-COVID à la situation actuelle?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [41]

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Non. Je ne l’ai donc pas par produit, mais je peux vous dire qu’en avril, notre efficacité était de l’ordre de 15%, 16% par contre, nous pensions qu’il serait pratiquement de 0. Il y a donc des gens qui ont choisi de payer par ACH et par dépôt direct, et cetera. Et d’après ce que je comprends, un pourcentage décent proviendrait de personnes qui tirent des revenus de la ferme. Donc pour nous, May s’inquiète, dans les 15 jours, nous avons déjà atteint la collection que nous avions en avril. Nous nous attendons donc à ce que le mois de mai soit pratiquement le double d’avril, ce qui est un excellent signal du marché. Là encore, les collectes proviendraient en grande partie des flux de trésorerie agricoles, principalement dans des États comme MP, UP, et cetera.

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Opérateur [42]

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La question suivante vient de la lignée de Nischint Kotak.

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Nischint Chawathe, Kotak Securities (Actions institutionnelles) – Directeur associé et analyste principal [43]

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Je voulais juste comprendre que la GNPA a généralement baissé pour vous entre le troisième et le quatrième trimestre, mais d’une manière ou d’une autre, cela ne s’est pas produit cette année. Je veux dire, faut-il vraiment y penser?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [44]

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Non. Très honnêtement, nous nous attendions à ce que nous fermions le GNPA exactement comme l’année dernière. Mais malheureusement, la majeure partie de mars a été vaincue. Et nous naviguions en fait très, très bien vers le même et tout à coup vient tous ces événements, et ça reste bloqué. Ma très forte conviction est que, une fois que nous sommes sortis de cette situation, vous pourriez voir une chute brutale de ce qui se passe alors que les conditions du marché se normalisent. C’est donc – je pense, quelque chose que nous aurions pu faire en mars, a été, par la force, reporté. Parce qu’en mars, ce qui se passe, c’est plus maniable, même la libération de repositionnement est très élevée, parce que nous ramenons les actifs, le client vient s’installer et le reprend. Aucune de ces activités n’a donc pu être exécutée en mars. Et nous savons tous que le mois de mars pour nous, même au cours du quatrième trimestre, mars est un mois extrêmement important. Je pense donc que nous aurions perdu, en partie, sinon plus, une possibilité de correction de 1,5% du NPA brut, c’est certain.

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Nischint Chawathe, Kotak Securities (Actions institutionnelles) – Directeur associé et analyste principal [45]

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Et c’est peut-être la même tendance dans le secteur du logement?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, MD et membre de la direction du groupe [46]

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Oh oui. Logement, encore une fois, même si le client avait de l’argent, non, il aimerait bien stocker sans savoir quelle est la prochaine à l’avenir. Donc là aussi, vous verrez une correction similaire se produire lorsque les choses s’ouvriront. Mais malheureusement, cela s’est produit en mars. Par conséquent, nous avons dû naviguer jusqu’en mars, et si nous devions nous retrouver dans la situation en avril, nous aurions en fait parlé d’un nombre très différent.

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Nischint Chawathe, Kotak Securities (Actions institutionnelles) – Directeur associé et analyste principal [47]

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Sûr. Et juste une chose, la couverture Stage 3 à 31%. Donc, cela inclut les crores INR 500?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-président, directeur général et membre de la direction du groupe [48]

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Oui oui. Je veux dire, sur 500 crores INR, peut-être que 400 crores INR seraient passés à l’étape 3. Rajesh, n’est-ce pas?

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Rajesh Vasudevan, Mahindra & Mahindra Financial Services Limited – VP of Accounts [49]

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Oui. INR 474 crores. Around INR 270 crores.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [50]

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Oui. So out INR 574 crores, INR 474 crores would have gone into Stage 3 to push up the coverage to 31%.

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Nischint Chawathe, Kotak Securities (Institutional Equities) – Associate Director & Senior Analyst [51]

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And your Stage 1, Stage 2 coverage quarter-on-quarter is stable. So does that mean that the Stage 2 numbers are stable quarter-on-quarter?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [52]

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No. So once you get some moratorium benefit, then they stayed there. It didn’t move forward.

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Nischint Chawathe, Kotak Securities (Institutional Equities) – Associate Director & Senior Analyst [53]

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D’accord. And most of the extra provision has been pushed into the Stage 3 category?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [54]

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Oui. This is why I explained, how we went product wise and zone wise and application wise.

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Nischint Chawathe, Kotak Securities (Institutional Equities) – Associate Director & Senior Analyst [55]

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Sûr. C’est ça. And just one final question, if I can? And this is on the expenses side. There has been a sort of a sharp decline, so how should one think about it?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [56]

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No. So as I said, the company’s focus has been on the cost, definitely. And we’ve been trying to explain as to when would we start to get the benefit and I must tell you that this is not over yet. We are still focusing on, as I said, on 3 or 4 major items of cost savings. And as the confirmation, none of the expenses, which reflected as reduction here, is something which is in the nature of postponement. Aucun d’entre eux. So there, actual reduction that has happened. And we are focusing on at least 3 or 4 very strong areas of production, which we will see going forward, we will get the benefit of it through the year.

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Opérateur [57]

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(Operator Instructions) The next question is from the line of Deepak Poddar from Sapphire Capital.

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Deepak Poddar, Sapphire Capital Management LLC – Portfolio Manager [58]

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Am I audible?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [59]

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Oui. But with some disturbance. But go ahead, you are.

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Deepak Poddar, Sapphire Capital Management LLC – Portfolio Manager [60]

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And so I just wanted to understand in terms of — your comment was the demand scenario over next 6 months, how do you see demand scenario shaping up?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [61]

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No. So as I said, in the order of possibility, I think tractor demand is already beginning to be seen. So for us, the small pickup, the small 3-wheeler for goods carrying, the LCV will be the segment which will see traction for sure. We would start to see pre-owned vehicle definitely showing good demand and traction, but supply may not match that demand, I may — I would believe so. And on the commercial vehicle side, it will be a single truck or owner-driven truck will possibly show some traction. I would put it in that sequence, but commercial vehicle would definitely take much longer. The passenger car purchase could take longer. But commercial applications, small vehicles or midsize vehicles could show faster traction. Tractor would definitely show much faster traction.

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Deepak Poddar, Sapphire Capital Management LLC – Portfolio Manager [62]

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Compris. And — but you still be targeting growth in this year, FY ’21, maybe in single-digit growth or a double-digit — low- double-digit growth?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [63]

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Je ne sais pas. You will compare this growth to which year because April, May, June, July virtually would be low volume or no volume kind of a month as I see from the market. So if we’re able to look at month-on-month growth over previous year, post October, one can see some stabilization. But otherwise, we would like to look at 2020 as a year where things not go well at the marketplace and they’re beginning to improve from October is the only way we will look at growth, not growth as comparatively previous year as a percentage and fixed method.

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Opérateur [64]

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The next question is from the line of Sanket from B&K Securities.

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Sanket Chheda, Batlivala & Karani Securities India Pvt. Ltd., Research Division – Research Analyst [65]

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Sir, I just missed the cost part, which we — the fund which we raised under TLTRO. So It was 7.5 to…

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [66]

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7.8. Dinesh, check, 7.5 to 7.8, right?

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP of Treasury & Corporate Affairs [67]

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It’s 7.65.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [68]

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So Dinesh said, some — 7.5 to…

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP of Treasury & Corporate Affairs [69]

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7.5 to 7.65.

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Sanket Chheda, Batlivala & Karani Securities India Pvt. Ltd., Research Division – Research Analyst [70]

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D’accord. And sir, what would be your SMA-2 as a percentage of total book will be, can you give the number?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [71]

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Rajesh, do you have that with you? SMA-2 to percentage of total book. We’ll just give it to you, somebody will just pull it up.

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Sanket Chheda, Batlivala & Karani Securities India Pvt. Ltd., Research Division – Research Analyst [72]

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D’accord. And sir, last one, so this increased provision that we have made of INR 474 towards this Phase 3, that is mainly on the back of thinking that expected credit loss will go up, the loss — even defaults will go up. But no provisioning has been done for an incremental dealing versus that might come up in the next 2, 3 quarters. Est-ce correct?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [73]

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No. So therefore, we’re seeing the moratorium has been given up to May, right? And we definitely expect that between June, July, August, the customers will start paying their installment. May not all 3 installment, but at least out of the 3, they may pay 1 or 2. So they are not expected to move up in the ladder. But whereas the ones which are already in the zone beyond 90-day, to whom no other concessions have been given and they are in the same market and earning the same type of money, right? Therefore, we do expect that their buildup would be a little more. And by the time they either repay or they surrender or we retake the asset and sell, et cetera, there could be some delinquency that could arise out of that.

But if things were to start to improve, like every year, we see out of our NPA of closing, at least 40%, 50% of it gets sold during the same year. So we have — we believe that, that could take a little longer or a little stretched. And we have, therefore, estimated and made a provision. And that’s why I keep repeating myself that if we were to start collecting from those accounts, the benefit of the reversals could be higher.

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Opérateur [74]

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The next question is from the line of Roshan Chutkey from ICICI Prudential Mutual Fund.

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Roshan Chutkey, ICICI Prudential Asset Management Company Limited – Associate VP and Analyst [75]

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Firstly, sir, what percentage of our cars and UV segment are the tourist operator segment where the business potential has kind of got deteriorated significantly? And similarly, if you can share what percentage of our customers are the farmer segment, taxi segment, like you said, which is doing extremely well, I mean yes, where cash flows are very strong in this case. So if you can just share some numbers around that.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [76]

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So I — my numbers may not be exactly right, but I’m kind of — based on various reviews that have captured some numbers. But I think the taxi segment should be around 10%, 12%. The farming would be about 25-odd percent. The self business or whatever you call it or self-employed, if you may call, including traders would be around 15%, 18% would be the broad kind of a breakup.

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Roshan Chutkey, ICICI Prudential Asset Management Company Limited – Associate VP and Analyst [77]

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And the rest would be?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [78]

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It will be made various category, like contractors would be there like fleet operators would be there. So then it all splits itself into 5%, 3%, 7% of different difference. There could be mix. Some who are in farm plus college, right? So then we don’t put them under farm community. So like tractors, there are a large number of tractor owners who have 3, 4 months of farming and another 7 months of contracting.

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Roshan Chutkey, ICICI Prudential Asset Management Company Limited – Associate VP and Analyst [79]

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Droite. And of those 9%, 10% of our city back in business, how many would be — what percentage would be single-truck operators?

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP of Treasury & Corporate Affairs [80]

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Roughly 4%. Roughly for particular population, roughly — conservatively (inaudible).

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Roshan Chutkey, ICICI Prudential Asset Management Company Limited – Associate VP and Analyst [81]

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D’accord. And sir, why do you think that pre-owned vehicles will do better?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [82]

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For very simple reason that it — let’s say that earlier 1 vehicle carried 7 people or 10 people. If they today are going to carry only 3, the number of vehicles — because the number of people are the same, right? It’s just that in one vehicle, the number of people are going to reduce. So the number of vehicle required will go up.

Now nobody is going to forecast that this is going to be a permanent reality, that in this country, only 4 people will travel in the rural India. But for next 6 months, 1 year, that could become the necessity. So instead of buying a new vehicle for this purpose, people will buy a pre-owned vehicle and put it to this use. And then they’ll continue to remain in that business because the investment is not very high, right?

So — and similarly, in many semi-urban locations, where people may not want to use public transport, some may use 2-wheeler to go on their own. some may use a small car, a pre-owned car to travel on their own. Because at this stage, with a little uncertainty into the future earnings, right, many people may decide that, « I need a vehicle, but I don’t want to invest so much into new. » So therefore, they may look for buying a pre-owned vehicle. Now when I say the pre-owned vehicle demand will go up, one should not estimate that the pre-owned vehicle will replace the entire new vehicle buying.

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Opérateur [83]

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The next question is from the line of Piran Engineer from Motilal Financial Services.

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Piran Engineer, Motilal Oswal Securities Limited, Research Division – Research Analyst [84]

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Most of my questions have been answered. I just have a couple. Firstly, you mentioned that you lost an opportunity of 150 per GNPL collection because of COVID. Is that because you couldn’t auction the vehicle? Or what is…

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [85]

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Non non Non. See, ours is a very physical model where either customer comes to pay or we go to collect, right? And then suddenly, everything comes to a grinding halt and the customer has the money, but we can’t go and collect nor is he in a position to come and pay. There will be a very small percentage which will come from repossession and auctioning of the vehicle and all that.

But in rural India, in tractors and kind of a product, typically, what happens, if you bring back the tractor, they come. They may even borrow from their, what you call, family or whatever, and they come and settle the account. So these kind of settlements also could not happen during this period.

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Piran Engineer, Motilal Oswal Securities Limited, Research Division – Research Analyst [86]

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But sir, then if it couldn’t happen, they would have been put under moratorium. So ideally, it would not have…

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [87]

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Non non Non. They are already an NPL. They cannot be given moratorium. These are accounts which are in 90-day-plus, which get settled — see what happens, they get municipality payment settlement, [AWD] settlement. Contract builds from the state government gets settled, right? So then they come and settle their due. That’s all the last quarter, especially the March is a very big month because all the government payments get released during those periods. And you see hell lot of people settling their account during that period.

And that’s the time when they also have a business demand. So when you take back their vehicle, they come and settle. Now this could not happen. Otherwise — see, typically, what happens is if you look at any year for that matter, December end, our outstanding NPA number, suppose it is 100,000. You will see them come down to 80,000, 74,000 number by March because those accounts get settled.

So I’m not talking of 2 EMI, 1 EMI guy not paying. So they would have anyway been frozen. I’m talking of people who are in NPA, who would have normally paid but could not pay. That’s why that 1.5% difference will come.

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Piran Engineer, Motilal Oswal Securities Limited, Research Division – Research Analyst [88]

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D’accord. D’accord. J? ai compris. And sir, second, just help me reconcile the numbers. About 25% of the customers did not take a moratorium, am I right?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [89]

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Oui. Don’t hold me by 25%, it could be 22%. It would be around that number.

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Piran Engineer, Motilal Oswal Securities Limited, Research Division – Research Analyst [90]

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D’accord. But the collection in April was still around 15%. So there is still a decent number of customers who did not take a moratorium and still did not pay in April.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [91]

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So you take the farmer — no, no, no. So you take the farmer. When you told him that you don’t take moratorium, but this will be the interest. He says, « I would rather not take moratorium but come and pay you end of April or beginning of May when I get my harvest money. » So the 25% will not reconcile to everybody surely will repay.

The 25% who did not take will have 3 or 4 categories: Some who have money, who will pay. Some who have money but will not use electronic means, but they can’t physically come and pay, so they will continue to remain in outstanding but did not take moratorium. There will be a certain category of people saying, « Why should I take moratorium and pay so much interest? I would rather pay you 1 month panel interest and come and pay you when things open up. » So you will have a mix of category in the people who have not taken moratorium. So please don’t correlate people not taken moratorium should have all paid in April.

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP of Treasury & Corporate Affairs [92]

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There are tractor customers whose EMI may not fall due even in April.

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Piran Engineer, Motilal Oswal Securities Limited, Research Division – Research Analyst [93]

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So then it won’t be then the denominator of the 15% calculation either?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [94]

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Yes, yes, yes.

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Opérateur [95]

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The next question is from the line of Tejas Mehta from Old Bridge Capital.

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Tejas Mehta, [96]

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So I have one question, and then on the reverse migration that you have seen. So a lot of people, a lot of laborers have moved back from cities to — back to their villages. So this is basically a positive challenge of 2 kinds. One is whatever income that you would have transferred from cities to villages or to the hometowns, that will go away completely at least in the near term. And then there would be an extra burden on their whole family who are living in the rural bank, whether they are farming community or whatever it is.

So in this kind of scenario, do you think that there would be a stress on the cash flow of all the rural banks? And therefore, the demand for vehicle, they may push back or the repayment would be too much that — to try and manage their own situation, which would basically mean that for you, the recovery would be much longer than what we may be expecting?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [97]

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D’accord. So firstly, this assumes that a lot of laborer who are earning in city transport the money to rural to discharge liability that has been created in rural, right? That’s a fundamental assumption, or the money that gets transferred there is to acquire more assets. These are the 2 bases on which your question is dependent, right?

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Tejas Mehta, [98]

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Oui.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [99]

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Oui. But the laborer who earns here does not earn so much that he sends money there to either buy assets or judicial liability. This laborer who sends money there is for the family to regularly survive and consume with that money, right?

So this — the assumption of will asset buying suffer, will recovery suffer, may not happen. But if you look at it a little more positively, if these laborers have gone back to their respective home town, right, they have all been used locally during this farming situation as a laborer. So they have actually earned some money locally. And even yesterday, I was seeing the Finance Minister addressing that MGNREGA scheme. They can also enroll there and they can start to earn something and all kinds of stuff.

The third thing is if these are migrant labor from here, they will engage them sell only in labor. But if the migrant drivers and others have gone back, they may start buying some small vehicle for their daily livelihood. They may put an LCV. They may put a small, what you call, Bolero-type vehicle, pick-up vehicle, and they will start to earn something. So one way to look at it is that it can even push up demand in some pockets if the driver community has gone back from here, starts to buy vehicle there.

So far as the laborer is concerned, I’m not able to see a situation that they were earning so much here that this money was being spent there for either a repayment or for acquiring of more assets. But definitely, what can happen is, again, my guess on this, this laborer’s income stopping from here can push that family into some kind of a need for borrowing from either microfinance kind of a body or from a money lender or from their families temporarily until the person gets reemployed. So this kind of small-ticket loan need can go up to meet even their daily needs.

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Tejas Mehta, [100]

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D’accord. Génial. And sir, would you be able to shed some light around the activity at the APMC level that currently have gratuity levels being good or a bit faltering on the — at the APMC level?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [101]

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I think, again, honestly, I’m not tracking it very closely. But these are some mixed news that you get in some pockets. They are very active like before. But in some pockets, like outskirts of Mumbai and (inaudible) whatever, there seems to be a lot of restrictions. So I think you have to correlate it to they are closer to which town or city and what is the COVID situation in that location.

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Opérateur [102]

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The next question is from the line of Abhishek Murarka from IIFL.

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Abhishek Murarka, IIFL Research – VP [103]

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So sir, my question is your business is basically going to remain cyclical if it is predominantly vehicle related. And in the past, you have tried organically to do SME housing or consumer durable more recently. But the deal with organic efforts is that they generally take long and also depend on the external environment. So in the current environment, would you think of any inorganic mode to either make the standalone business more structural or to become part of some larger, more structured business yourselves? Any thoughts on that?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [104]

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So look at — first of all, culturally, any M&A opportunity we will look at should fit into our strategy, right? And we should have had that as our intention to be in that business. So which means, once again, if we look at M&A opportunity, more or less, we will look at around the same space in which we are there, which means if you have a problem, you’re multiplying your problem by taking somebody like that.

Now you say that, no, that’s not the route we want to take. Let’s get into something else altogether. Now that something else altogether as an opportunity should be so large that it becomes a game changer for you, right? Now you can pick up a company with, say, INR 5,000 crore assets, let’s say, they are in lab, right? Then what are you acquiring? Your — that’s not in your strategy because you have not gotten into lab business. And you are getting a size which is not a game changer because you’re running already a INR 70,000 crores, INR 80,000 crore vehicle balance sheet, right? So that INR 5,000 crores will come and only take away some of your mindshare of focusing on something of that type.

So that’s the reason we felt that it’s always good once you get to certain large site, it is good to organically grow. And if you get an opportunity to acquire in the same space that you are with a high-quality asset and in a good time, then one must look at it.

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Abhishek Murarka, IIFL Research – VP [105]

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Sir, the other way to look at it would be that you’ve become part of another structural business or larger business, where the cyclicality comes down, anything…

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [106]

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Somebody else to acquire us?

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Abhishek Murarka, IIFL Research – VP [107]

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If that is — maybe anything, what would you do to basically make your business less cyclical? Now acquiring, as you said, is obviously challenging. Is the other option something that you’re thinking about at all? Or is that not an option at all?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [108]

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I think that we are not looking at that as an option. I think we still think that the marketplace in which we are, the semi-urban rural market, there is enough headroom to grow in the product lines that we are in. We are still not controlling our market with a very large market share or whatever, right? And we would look at, over a period of time, more products to our customers, which in a way could either reduce our cost of operation or somewhere begin to become like an anti-cyclic approach.

But I think with a large balance sheet, we would like to focus on this and remain a leader in this business because we have now learned also how to handle this cyclic issue. I mean it’s not that it’s killing the balance sheet. We have not found it difficult to raise money. Our ratings are not suffering, right? As we do go through this pressure of earnings and once we bring some stability to that with a better mix, right, because it was very loaded towards, let’s say, a tractor or a UV kind of a business. We then added cars to slightly balance it. Then we added commercial people to balance it, then construction equipment then pre-owned vehicle. Now we will also balance it by evening it out geographically. So 2 ways of derisking we will do is to make each product of a certain size and each geography to be of a certain size, then it will start playing the derisking model.

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Abhishek Murarka, IIFL Research – VP [109]

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Sûr. Sûr. And any capital you would be requiring additionally this year?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [110]

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We would love to raise capital, and we pray that the market conditions improve fast for us to be able to do that. With this kind of growth rate, what will we do for more capital, we will have to wait and see.

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Opérateur [111]

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The next question is from the line of Shweta Daptardar from Prabhudas Lilladher.

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Shweta Daptardar, Prabhudas Lilladher Pvt Ltd., Research Division – Research Analyst [112]

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Sir, you expressed your optimism on pre-owned vehicle segment, and that also reflects in our increased share mix for the past few quarters now. But if I even look at the competition, most of them have been whining for this particular business segment. So how is the competition flaring up for us? How are we combating it? Is there any specific geographies that we are targeting? And how about the market share vis-à-vis other players?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [113]

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So I will just give out one number and that should explain all your questions. I think we see something like 200,000 customers mature, let’s say, every year, or 30,000 customers mature every year for us who would try to sell their vehicle and buy a new vehicle. So we have got a very strong program now in place to transact for that customer. If I’m a customer of Mahindra Finance wanting to sell my vehicle, then Mahindra Finance will help me to sell the vehicle to whomsoever is wanting to buy, which we will finance. And we will also then look at the customer who’s selling as a customer to buy the next new vehicle. So with one transaction, we are able to get one of our vehicle kind of business. So that’s going to be one approach.

And then you talked about competition. I think if you look at urban center and if you look at using of intermediaries and brokers, then there is enough competition. But we are in the semi-urban rural market, where even today the transaction is between customer to customer. And the broker in-between is just connecting 2 customers and not really owner of acquiring this vehicle and trying to sell like a urban city.

So our participation is being the link between the seller and buyer. And to start with, we want to do this with our existing customers who are in business to sell their vehicle and then buy a new vehicle. And that number itself still is very, very large.

And the third, of course, very clearly is since we have so much of relationship with all the OEMs and the exchange program that they run, when they try to sell their exchanged vehicle, that becomes an additional business volume, which we will try to process.

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Shweta Daptardar, Prabhudas Lilladher Pvt Ltd., Research Division – Research Analyst [114]

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Sûr. Sûr. Secondly, how about the car segment? What percentage of your car segment is led by aggregators? Because due to COVID-related outbreak, there would have been large labor exporters, right, which is you highlighted. What percentage of the car portfolio would be aggregated?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [115]

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(inaudible) you are in this call. You can answer this question. Ola, Uber, Zoom, redi-GO together will be what? 8%, 10%, I don’t know.

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Unidentified Company Representative, [116]

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Of the total cost, Ola is 10%. So we have 2 million customers. So roughly 80,000 to 90,000 customers will be aggregated.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [117]

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So 8%, 9% will be aggregated models, and not all concentrated in just Mumbai and the Bangalore. They are widespread across various cities.

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Opérateur [118]

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(Operator Instructions) The next question is from the line of Gurpreet Arora from Aviva Insurance.

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Gurpreet Arora, [119]

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Sir, do you think the 3-month moratorium is sufficient for your customer set? And related question to this is when you say 75% of your customers have taken moratorium, have all 75% taken full 3-month moratorium? Or is there a variation? That’s one.

Second question is why have you not taken moratorium from banks? And last question is how far are we away from 2% OpEx to asset ratio, which you have highlighted earlier?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [120]

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You are the smartest of the question raisers because they said you have to come back in the queue, you raised all questions together.

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Gurpreet Arora, [121]

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I hope to get the answers also, sir.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [122]

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D’accord. So let me answer the OpEx thing first. 2% that we are aiming at is really a dream and a stretch. And we believe that — and last time also I said that it’s not all overnight. But then a year or 2, we will work hard towards that. But to some extent, asset growth also has to help us in that. If asset continues to decline, I think the cost will look to be the same or steeper.

So — and as I outlined, the 5, 6 initiatives or area where we are looking at, when we get the full benefit of the technology interventions, digital use, I think the cost for sure will come down. When we get the benefit of cross-selling that we are planning to do for pre-owned vehicle of existing customers and create more customers, that will bring down the cost for sure.

So I think 2%, we would continue to remain focused. And you will see at every stage, there is a decline in cost visible, which will give directionally to reach that 2%, right? So that’s for sure. What was your second question? I’m sorry, this was one.

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Gurpreet Arora, [123]

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Sir, the first question was that — I mean is the 3-month moratorium period sufficient for your customers?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [124]

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So my personal opinion on this is moratorium should not be the approach to customer at all because there will always be a share of cultural change in customers’ mindset to reap it. So in fact, we — even as an association, we are pushing the regulator to look at rescheduling as a possibility so that you really look at the need of a customer, and it could be very different for different customers, right?

So is moratorium 3 months good enough for commercial vehicle? Définitivement pas. For tractor, more than adequate, right? So I think do we all believe that on 31st of May, the moratorium period ends and from 1st June, everybody is going to repay on time? I want to tell you that, that’s never going to be a reality. It will take people another 60 days, maybe 90 days or whatever.

So from the point of view, 90 days is insufficient, but moratorium is definitely not the answer. Rather give more time by rescheduling the customer and understand his real need rather than putting this habit of not to pay types. Because if somebody takes another 3-month moratorium when he starts to earn, he will still not come and start to repay. But if you reschedule somebody’s account, you will actually look at when he is likely to start to earn and you will give him only a 45-day moratorium. In some cases, you may even give a 120-day moratorium. So the short answer is 90 is not good enough, but moratorium definitely is not the answer.

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Gurpreet Arora, [125]

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And sir, why have you not taken moratorium on your bank loan?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [126]

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No. So we have sufficient funds or cash flow situation to be able to repay our liability. So therefore, we don’t feel it’s necessary to take moratorium. We would rather raise fresh loans which could come to you at a new rate. If you take moratorium, you are extending the same loan, which could be contracted earlier at a higher rate. So you get 2 benefits: One is you repay on time and maintain your track record. Second is you raise fresh loan at a new rate rather than recasting the whole loan at the old rate.

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Opérateur [127]

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The next question is from the line of Anish Jobalia from Banyan Capital.

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Anish Jobalia, Banyan Capital Advisors Private Limited – Senior Research Analyst [128]

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So I just wanted to quiz on the tractor segment, where you say that you’re seeing a lot of traction. So my question is what are the growth — what is driving this? Whether this demand that you are seeing is temporary or perennial? And whether this demand is across the geographies?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [129]

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So across the geography or not, it may not be all states, but relevant major states are showing the demand, whether it’s UP, whether it’s Punjab, MP, parts of Maharashtra, parts of Rajasthan. I think clearly, we are seeing relevant states are showing the demand. And it’s at the back of the rabi crop being good and the kharif expected to be good after monsoon. So it’s farm driven and I said somewhere in-between. We still don’t see haulage application or a contracting segment buying tractor big time yet. But definitely, the farmer community is buying, so based on good harvest now and expected good harvest the next season.

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Anish Jobalia, Banyan Capital Advisors Private Limited – Senior Research Analyst [130]

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And the second question is, if I can, I just wanted your view on the housing product. Just some comments around that would be very helpful.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [131]

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Housing? Sorry, some comments on what?

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Anish Jobalia, Banyan Capital Advisors Private Limited – Senior Research Analyst [132]

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I mean your housing subsidiary…

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [133]

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Yes, yes, yes. So housing subsidiary, in fact, even in one of the earlier calls, we have mentioned that, I think — I don’t know if Anuj Mehra, the CEO, is in this call. But we had consciously decided to go slow on disbursement and more focus on recovery because that was one area of concern and largely cost from Maharashtra and our assets were also really concentrated in Maharashtra.

As we speak now, we were like Mahindra Finance, even in housing, we were seeing substantial improvement commencing to happen in the fourth quarter and then we hit this unfortunate time. And they have also taken a view to make a higher provision in order to be better covered. We do believe that with the monsoons being good and the harvest, this round has been good. Once Maharashtra opens up, we would see corrections beginning to happen even in the housing business.

We are now looking at opportunities of growth in states which are in green zones. And they have been able to source funds from NHB under the refinancing route, et cetera. So you will start seeing some growth beginning to happen there, but the focus will continue to remain in bringing down the net NPA to even lower than where they are. Maybe another 2% to start with will be the first benchmark pattern. And that we believe will happen as Maharashtra opens up post this COVID lock order.

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Opérateur [134]

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The next question is from the line of Vivek Ramakrishnan from DSP Mutual Fund.

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Vivek Ramakrishnan, [135]

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I think one after another, my questions got answered especially the one subject that — asked the question that I had. But since I got the chance, is it time for you to look at product adjacencies that you might have been considering, possibly even start buying out portfolio from other NBFCs who will be struggling for liabilities and will not have the strength that you have? And just this one question, sir.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [136]

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When you say adjacency, what product comes to your mind quickly?

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Vivek Ramakrishnan, [137]

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Sir, like for example, you mentioned microfinance, and you’re very well in rural. In 2-wheeler finance, for example, a lot of their customers are going back there buying — maybe buying scooters and so on, so those kind of areas. Or is it in buying somebody’s performing portfolio?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [138]

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So 2-wheeler is something that we will look at because for 2, 3 reasons. One is we ourselves have put — starting to put together a strategy for how to get into 2-wheelers because we did see large number of our own dealer relationships are also in 2-wheeler business, and we did see that as one possible opportunity. In this round, we do see 2-wheeler bounce back as the next best possibility. And third is you are right, that our own existing customers, all of them have a 2-wheeler. And we do believe that they may be the ones who may look for adding more 2 wheelers to their family, if they all believe to travel alone. So I think 2-wheeler is something that we would look at.

Microfinance is something which long back, we had gone deeper to understand whether we should or we should not. If at all we get into microfinance, we would rather create a vertical to get in and become of a size rather than trying to buy some small portfolio. And if at all we have to do some portfolio, we would rather look at refinancing some microfinance NBFC but nothing of that type at this stage.

So any business that is not in our road map for growth or as a strategy, we would rather not look at them. And the 2-wheeler comes within the vehicle family, and therefore — and a lot of ecosystem support available. So we may look at that as a possibility.

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Opérateur [139]

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Ladies and gentlemen, due to time constraint, we take the last question from the line of Subramanian Iyer from Morgan Stanley.

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Subramanian Iyer, Morgan Stanley, Research Division – Equity Analyst [140]

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A couple of questions from my side. So one is what was the loss of business case in the month of March from a collection perspective given that the lockdown started pretty late in the month? And the second question is what are the outcomes that you’re budgeting from a collection efficiency perspective in the coming months? And if I can maybe — okay, I have 1 more question but maybe after these 2.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [141]

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D’accord. So the number of days that we lost when look at it from the lockdown time to the month end, it would have been 12, 13 days. But the beginning of this problem had already come in. So I think in terms of active days lost in March would have been at least 15, 18 days, if not more. And that’s very substantial from a March perspective given normally things starts to shape up from 10, 12 and most towards 25, 28 for things to settle down. So that — maybe about 15 or 20 days is what we lost in March. That is very clearly.

In terms of efficiency, as I said, April, our expectations are 0, but we had about 10-odd percent, 14% of whatever collection. This month, we do expect that, that would be going beyond 20%, 30%. And then gradually, I think each month, it would add about 5%, 10% before we can say it has at least reached about 70%, 80% by September, October and so on.

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Subramanian Iyer, Morgan Stanley, Research Division – Equity Analyst [142]

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Got it. And the last question is just more of a number question. When I look at your IRAC Stage 3 provisions, the implied coverage works out to about 37% and your Stage 3 coverage for the Ind AS is about 31%. So what does it imply exactly in the sense that does it mean that these loans are quite aged because the IRAC provisioning is well over 33%, which is generally — it is — basically, these assets are a year or 2?

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [143]

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So I know technically, Rajesh can answer better. But in Ind AS, what it really reflects is that we don’t expect the loss to be higher than this is what we cover under Ind AS. For sure, we’re looking at both historic as well as way forward.

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Rajesh Vasudevan, Mahindra & Mahindra Financial Services Limited – VP of Accounts [144]

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Oui. On the IRAC, you compare the total provision. I think the NPA provisioning, which is not correct. The Stage 2 provisions are quite higher in India. So when you see it, you have to compare total. Even the RBI says you have to compare at a total level and not at a stable level. So we have…

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [145]

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In fact, IRAC gradually moves from Stage 1, 2 to 3 whereas in the Ind AS, it comes to Stage 3. 1 and 2 is not recognized for calculating the coverage.

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Rajesh Vasudevan, Mahindra & Mahindra Financial Services Limited – VP of Accounts [146]

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So as the standard asset requires only 0.4% of…

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Dinesh Prajapati, Mahindra & Mahindra Financial Services Limited – VP of Treasury & Corporate Affairs [147]

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So if you see on a total level, we are more — the provision under Ind AS is more than direct. And we have not created an impairment reso as required under the new guidance they have issued on March 30.

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Subramanian Iyer, Morgan Stanley, Research Division – Equity Analyst [148]

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Oui. The point on the total coverage is taken. My question was more from a perspective that — sir, I was a bit surprised that even under Stage 3, your IRAC provisioning is…

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [149]

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They are 2 different methods, right? There is — with the aging, you increase your provision under IRAC, whereas under Ind AS, it’s a common rate, what we apply to all of it.

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Opérateur [150]

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I now hand the conference over to Mr. Abhijit Tibrewal for closing comments.

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Abhijit Tibrewal, ICICI Securities Limited, Research Division – Research Analyst [151]

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Thanks, Steven. Many thanks for the Mahindra Finance management and all the call participants for a very vibrant discussion today. Have a great evening. Thank you all.

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Ramesh Iyer, Mahindra & Mahindra Financial Services Limited – Vice-Chairman, MD & Member of the Group Executive Board [152]

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Je vous remercie.

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Opérateur [153]

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Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.

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