One of India's largest private lenders. In fact, we'll have to see what the internals say about the asset quality front. We will also be tracking the con call for you. But at the moment, this is what we are gauging. The net NPA ratio has come in at 0.8% and the gross NPA ratio has come in at 1.15%.
Remember just a couple of moments ago, Yes Bank had also announced its results and that bank also reported a result that was quite stable in nature especially with regards to its net asset quality. But at the moment if I take you through the key numbers, in the first glance you would see that HDFC Bank has mostly met street expectations and what was estimated.
Taking you through Yes Bank because we can see that on your screen, net profit rose by 44.7% at 1,680 crore rupees versus 738. The bank, Yes Bank, as compared to HDFC has done exceptionally well because if you look at the main metrics over there it has risen quite a bit. NII also grew by 15.9% and operating profit also saw about a 23% jump and this is on a year-on-year comparison.
On a quarter-on-quarter basis as well, the numbers looked healthy for Yes Bank. The gross NPA ratio came in at 1.3% versus 1.5%. Net NPA ratio came in at 0.2% versus 0.3%. In fact, there was a significant drop in the NPA ratio as well. Gross NPA came in at 365 crore rupees versus 415 crore rupees. Provisions, however, rose 288 crore rupees for Yes Bank versus 219 crore rupees.
But let's go back to HDFC Bank because we're getting the internal details as we speak. I have my colleague Push joining us at the moment. Push, HDFC Bank seems to have mostly met analyst expectations. What exactly are you reading?
Yeah, Malika, that's right. HDFC Bank has reported 19,222 crore of net profit for the quarter ending March as against the estimate of 19,530 crore. It has actually posted its gross NPA numbers have improved quarter-on-quarter. It stood at, GNP ratio was at 1.15% as against the estimate of 1.2% in Q4 whereas net NPA stood at 0.4% in line with the estimate.
The net interest income stood at 33,820 crore. Net interest income is the difference between interest expended and interest earned. So it is also higher than the expectation, slightly in line with the expectation of 33,000 odd crore rupees. In terms of provisions they have risen 18% to 2,610 crore versus 3,193 crore year on year. The bank as you are aware has already posted a double digit rise in both its loan and deposits in the reporting quarter. Back to you Malika.
Right. Thank you so much for that lowdown on HDFC Bank's Q4 earnings. As he mentioned, while the bank has mostly met street expectations, the jump in net profit as well as the NII and the provisions seem to be healthy. In fact, we will have an expert join us soon on what they think about the results.
But as I mentioned before as well, the bank's results were especially in the spotlight because of the recent resignation that made a lot of headlines as well, regarding M. K. Sharma's resignation as part-time chairman of the bank. For now, the asset quality especially in light of macroeconomic risks due to the Iran war does not seem to have taken that big of a hit. It seems to be stable at the moment because we didn't see quite a bit of a change over there.
Gross NPA as you can see on your screen has come in at 1.15% versus the estimated figure of 1.2%. The net NPA ratio as I was alluding to before has come in at 0.4% versus the estimated figure of 0.4%. So if you see it has clearly matched what we were expecting out of the net NPA number. So a steady performance that has been seen for HDFC Bank in Q4. But we will slip into a short break. Stay tuned. Lots more coming up.
Most important is you have to be bullish when actually markets are bad. In a bullish market to be bullish is not a big deal.
Should we look at blue chips with the same awe that we used to?
So even if you have the bluest of blue chip and if the valuations are upwards of 50-60 times and the companies are glorifyingly growing at 5%, just run.
The argument is being made that because of geopolitical factors etc. valuable companies in India are available at rates they haven't been for several years.
That is what you should have independent mind. Market is going this side, left side, you should go right side.
By what logic am I going to sit there and talk to JD Betrebel and believe that the world is going to move to cloud kitchens as a word hadn't even been defined yet. Ajit Feno furniture rental. We gave him $6 million. He took $4.5 million of that and bought wood and nails and started making furniture. Most companies we give money to turn around and give the money to Google and Meta and start buying advertising. But the chaos that we live in here on a day-to-day basis enables so much great opportunity.
You've been on both sides of the table, right? Asking for funds and then giving them out as well.
A friend of mine and I had an idea that let's build a digital music business and this is pre forget iPhone, pre iPods, right? So, and you talk about timing and the importance of that. We were so early.
There's no real compulsion for you having to come to India and start a business here.
And if my job at IA was find new opportunities for us to leverage what we know to build, look why don't we go build everything we own. So in June 2005 again not knowing anything about anything I moved to India with a Blackberry, a laptop, a sample term sheet, sample diligence book.
India has set itself an ambitious climate target and according to estimates we would need anywhere between $1.5 trillion to $2.5 trillion in investment over the next just 4 years to meet our climate targets. So the critical challenge now is how do we make green investment not just viable but inevitable. And to unpack this I am joined by an exceptional panel of experts.
I have Vat Pande who works at the intersection of policy, capital and global climate strategy. I have with me Joti Kirit Parik, one of India's foremost voices on energy policy and sustainable development and Arjunat who brings deep expertise on climate economics and India's transition pathways.
I'll begin with you Vad and my question is that we often hear that capital is not the constraint and there is global liquidity which is just looking for the right climate aligned investment and yet in countries like India we still have a finance gap. So what is the real bottleneck today? Is it capital availability, is it risk, is it ROI, what is it?
Thank you Sach and great to be here. The climate panel is always a good one to be on. Maybe just to start by saying that the whole climate finance agenda can sometimes be anxiety inducing but I would say that we need to solve the climate finance problem really in our own self-interest. And by that I mean that India is probably the country which is on the one hand the most vulnerable to climate change and CW and Iradi have done some fantastic work on unpacking that but we are also the country that probably has the most to gain if we can solve the climate finance problem.
In our earlier panels, we talked about the whole energy security issue, but also jobs of the future, economic competitiveness and resilience, resilient cities. So, it's in our self-interest to solve this problem and we should approach it with that mindset and not so much from the old sort of negotiating mindset of what can we get from the international community so to speak. Number one.
Number two, I would just say that I think it is correct that we don't have a money problem. We actually have more like a plumbing problem. A phrase that I learned from Nandan Nilik and he used to talk about this a lot. But by that what I mean is that there is a lot of capital globally which is interested in investable opportunities including in the climate arena. We need to channelize that capital by providing investable, predictable investment opportunities that make sense for investors.
And in that context and to your point of bottlenecks, I think there are three things. One is just the policy certainty, regulatory unlocks, wherever they are missing. Of course, we've done a lot, but there's still much to be done and I'm sure we can unpack that a little bit. The second is bankable projects which are ready to invest. You know, it's one thing to say we want money for solar, we want money for this, but where are the projects? Are they enough projects where investors can come in, put in their capital with capital structures that actually make sense? That's the second thing.
And then the third is catalytic capital or what some people call blended finance which is really about using small amounts of public or charitable money to unlock large amounts of commercial capital. And maybe just giving you a very quick example, today we've talked a lot about solar energy today but today a solar plant that is set up in India say in a state like Rajasthan has to pay a premium of about 80% in the cost of capital relative to a plant which is set up even in cloudy Germany, right? Which is ironic.
And the answer which is offered is oh there's perceived risk and perceived risk premium or I would say a risk tax that we have to pay because of currency fluctuations or offtake issues that sometimes arise. And in this situation if there was an ability to provide de-risking instruments like guarantees or first loss measures or currency hedging you will see a lot more investors come in, right? So I think this whole notion of catalytic capital to de-risk is what we need to solve. It's the fundamental thing. We can unpack this a little bit more. It's hard but it's doable and if we can do it I think there's no other country today placed in the world especially amongst emerging markets who is poised to benefit from this because we have 6% plus growth in a volatile world. We have an aspiring middle class which is rising. We have 70% of our infrastructure which is still to be built. We are ahead on our Paris targets. So we have everything going for us if we can crack this.
Of course I'd love to come back to you to unpack this further. But before that I'll take a question to Dr. Parik. You know many panelists before us said that if there is policy stability then finance will follow. But my question to you is what kind of regulatory architecture should we have to ensure that all stakeholder priorities are considered and taken into consideration?
Well, India is growing in size of the renewable market and the regulatory system is responding to that. It has developed many innovations over the time compared to earlier and now we have reverse bidding and we have power markets and we have power price discovery.
US ICICI Bank has also come out with its Q4 results and the profit has beaten estimates. This is India's second largest private lender that has announced its Q4 results. In fact, the total income has risen 2% net interest income has also risen by 3% on a quarter-on-quarter basis. I have my colleague Push joining us in the studios to take us through the key numbers. Push, it looks like a stable quarter not many voluptuous surprises but how does it look?
Yeah. Malika, that's right. A very stable quarter from ICICI Bank. The PAT like you mentioned has beaten the estimate. Q4 FY26 PAT is at 13,710 crore. Total income like you mentioned has gone up by 2%. Net interest income which is a key monitorable is up 2% at 43,275 crore. NII is up around 8% year-on-year to around 23,000 odd crore. Operating profit has risen by around 3% YoY and 5% QoQ. These numbers are broadly in line with the estimates, in fact better than estimates and the asset quality has also further improved with the gross NPA ratio at 1.4% versus 1.53% down 13 basis points quarter on quarter and net NPA also has improved it's down four basis points quarter-on-quarter to 0.3%.
The bank is hosting its media call in sometime and we'll get back to you with further details.
Okay so stable quarter. We have Danad Vya, research analyst at BFSI Access Securities joining us at the moment to help us decode these numbers. Ma'am, thank you so much for joining. On the forefront, ICICI Bank seems to have done really well in Q4 because it seems to be like a stable quarter especially on the profit front it has beaten estimates. What do you have to say, your first readings?
Yeah hi good afternoon. So yes stable set of numbers largely in line with our estimates. Of course a beat on PAT because of significantly lower provisioning. What comes out as a positive in this quarter for the bank is that finally we are seeing some improvement in credit growth which has now moved up to roughly about 15 and a half 16 odd percent. That's been range bound in about somewhere between 11 to 13 odd percent in the last four to five quarters so yeah that comes out as a positive.
Okay and I would also like your comment on how the bank has been able to manage keeping a healthy margin despite the low rate cut environment that we're currently in because macroeconomic conditions have not really been in favor of the banking ecosystem. Although that was also the case with regards to Yes Bank as well as ICICI Bank that reported its good Q4 because net NPA ratios have come in quite decent. What's your saying on that?
Yeah, so overall margins have been managed well be it for ICICI or also for HDFC. At the start of the quarter also we assumed we expected that the larger banks will be able to maintain their margins with even though the residual impact of the December rate cut would reflect in the yield this quarter there would be some support from the deposit repricing that would happen. So yeah that helped banks maintain their margin so far.
From an asset quality standpoint, clearly we expect that slippages must have declined on a sequential basis. We are seeing ICICI post an improving trend in terms of asset quality and we believe that this would be across segments. So it would be a broad-based improvement in asset quality for the bank. Yeah.
Okay. So do you think and I asked this question to another expert when I had a conversation about Yes Bank as well and so the same case goes for ICICI. You spoke about the bank being able to manage a healthy asset quality but given the conditions that we are in do you think this asset quality is going to be sustainable and how does ICICI bank position itself amongst its peers such as HDFC as well?
All right. So probably it would be early days to point out any specific stress that would come up in any of the bank segments. Q4 obviously has not been a problem. However, we expect that any prolonged war could have some impact on asset quality for not only ICICI but we could face that across the banking system. Our expectations were mainly stress would be mainly in the MSME segment and some part of corporate loans where there's an exposure to oil sensitive segments. Yeah.
Okay. And ma'am lastly when it comes to the con call is there anything that you're sharply focusing on?
Yeah so we would want to watch out for commentary on growth, credit growth going forward and also on the margin trajectory of how the bank expects to see its margins especially in the first half of the year.
Okay ma'am I understand why you would be tracking margins because we just discussed that. What's the rationale behind especially focusing on credit growth?
So ICICI has been lagging in terms of credit growth like I mentioned a while back in terms of credit growth which has been fairly muted at about 11 to 13 odd percent. Also we would want to watch out for trends, I mean fairly decisive trends in terms of how unsecured credit has picked up for the bank because things on ground seem to be getting better. The stress seems to be waning for the unsecured segment. So how does that pick up also the secured retail, how does that fare going into the next year should be our monitor.
Okay. Ma'am the bank also has a diversified retail heavy loan book with a strong digital franchisee as well. Do you think this has somehow been able to give buoyancy to the bank's profit especially in Q4?
Yeah. So we would want to watch out how much has the core retail grown. But yeah that possibly could be a reason why a possible improvement in the better yielding unsecured loans could also have provided some comfort on margin.
Okay. I also want your comment on the interest expense because that has decreased by 4%. Although the NII has come in at 22,979 crore rupees which is up 8% on a YoY basis, interest expense has taken a little bit of a fall of about 4%. Is that something to be worried about?
The interest expense that would probably have some element of the residual cost of the residual deposit pricing that would have been seen in this quarter. Okay, that's possibly better.
So you did mention that you're going to look at credit growth and margins in the con call especially but given how ICICI bank has performed in the last couple of quarters it has maintained a steady growth but some of the other, the margin has been a bit under pressure. Now going forward especially in light of ICICI bank, HDFC bank and Yes Bank coming up with its results do you think ICICI bank as a sole entity and on a standalone basis will be able to sustain good margins and might also see an improvement?
So of course the entire banking pack has seen margin pressure emerge in FY26 and that's because of the rate cuts, the impact of the rate cut. Going ahead we expect slight improvement in margins. Though most banks have not passed on the December rate cut especially on the deposit side. Better growth and especially and hopefully improving growth in the unsecured segment should support some margin improvement going forward.
Okay. Why are you expecting growth in the unsecured segment especially with regards to ICICI bank? Has it done well in that segment in the past? Are you expecting it to continue that trend or is there going to be some change that you're referring to?
Not particularly ICICI bank, in general as a pack for the past say year, the segments especially the unsecured segments have been facing asset quality challenges because of which lenders had slowed down growth meaningfully. So personal loans as a segment or credit cards which is particularly for ICICI, so yeah if that picks up overall growth should also look better and some support for margins could be expected.
Right, thank you so much ma'am for having the patience to answer all my questions. That's Danad Vya, research analyst BFSI at Access Securities on ICICI bank Q4. But now we have Parak Takar, head fund manager of Port Capital here on this edition of Earnings Edge to especially help us make sense of how all the three banks that have announced their Q4 results today have done in his view. Thank you so much Mr. Takar for joining us on the phone line. Let's start with ICICI Bank. I'll revise the numbers for you as we were discussing.
ICICI bank on a standalone basis and on a YoY comparison level total income has risen by 2% has come in at 50,584 crore. Interest income has come in at 43,275 crore rupees up about 2%. Interest expense has taken a bit of a downfall 4% down. And NII has increased by 8% net interest income at 22,979 crore rupees. Net interest margin has come in at 4.32% to be specific versus 4.3% on a quarter-on-quarter basis so not much of a change there. Your first comments on ICICI bank sir?
So it's a solid number. Hello?
Yes sir I can hear you yes yes you're on.
Yeah yeah so ICICI bank is absolutely solid numbers. First of all in a quarter where there was a repo rate cut of 25 bps to show improvement in margins QoQ from 4.3 to 4.32% is absolutely amazing. Most importantly even after the deposit cut of 25 bps and the fact that ICICI bank already had a very high margin base so to show improvement on that is fantastic. I think NII growth is also outpacing what was the expected number. PAT number is also ahead of expectation. All in all, I would say that ICICI bank ticks all the boxes and fantastic numbers and valuations are also extremely appealing and as usual asset quality is rock solid.
Okay. So rock solid asset quality as well as stable numbers as you said plus valuation also seems favorable.
And most importantly margin. I think the entire street was factoring in a little bit contraction of margins because of 25 bps repo rate cut in Q4 and ICICI bank had a very high base of margins so on that margin to show expansion, at least show little expansion in the margins 4.32 over 4.3 is absolutely commendable after maintaining the asset quality at such a level. So credit cost should be around 50 bps or below that. So absolutely amazing numbers.
Okay okay so we'll have to see how the stock reacts on Monday but let's now focus on HDFC bank because asset quality for HDFC bank in Q4 also has improved. I'll take you through the key numbers very very quickly. Gross NPA ratio for HDFC bank has come in at 1.15% versus 1.24% last quarter. Net NPA ratio at 0.38% versus 0.42% last quarter. So a sequential improvement in terms of asset quality.
If you look at key financial metrics beginning with net profit that's come in at 19,221 crore rupees versus the estimated figure of 19,530 crore rupees. Again an improvement there. Gross NPA has come in at 1.15% again beating estimates at 1.2%. PAT has increased by over 9% at 19,221 crore rupees. Net interest income at 33,820 crore rupees. Net interest income has in fact grown 3.2% on an annual basis. Operating profit has also increased by 4.8%.
However, and also on a positive note although that the operating profit has risen by 4.8%, provisions have seen a downtick of 18.3%. That currently stand at 2,610 crore rupees versus 3,193 crore rupees. So, sir, those are the numbers of HDFC Bank. What are your first comments on this?
Yeah. So, HDFC bank I think the name has remained same. I have to check that number. But everything else was given in the business update itself. There was nothing to look for into this result except for the fact that margins and asset quality. And asset quality as we all know HDFC bank and ICICI bank and SBI are right now scoring phenomenally well on the asset quality side so there was nothing to look forward into HDFC bank's results apart from the fact that yes asset quality has maintained pristine as usual and margins I think almost has remained stable. If there is some improvement with the margin I think 3.42 I think that should be decent enough.
But remember HDFC bank has a lower margin base which is around 3.4% while ICICI bank has 4.3%. So to maintain margin on that 4.3 level of high base is always very difficult which ICICI bank has managed to do.
Right. Right. So HDFC bank particularly with regards these results come in the context of M. K. Sharma's resignation that had taken some investor dampening had been seen especially with regards to the sentiment surrounding this stock. How do you see the stock reacting on Monday post these results?
So I would say it depends on geopolitical issues also how they, for example yesterday there was announcement that Iran will open the Strait of Hormuz till ceasefire exists between Israel and Lebanon and today morning there was some denial that if the blockade continues then they will not reopen the Strait of Hormuz. So let's see how crude oil and other macro things open tomorrow Monday. But I would say that if the macro factors are as it was yesterday night then I think definitely from this valuations of around 1.5 times book and around 11x on FY28 earnings after subsidiary value I think both stocks should react very well.
In fact HDFC bank ADR was up yesterday 4% ICICI bank ADR was up 2% yesterday. But I would say that from these valuations if the macro stabilizes both stocks can only go up.
Okay. So both HDFC and ICICI bank. So my last question to you on HDFC Bank, one that the provisions have decreased by more than 18% at 2,610 crore rupees. So how do you read this downtick and second what are some specifics that you are focusing on in the HDFC bank con call?
No actually see on con call definitely I would love to have the wider presence of the board, Mr. Keki Mistry and all on the board on the call and of course basically in my personal view it has got nothing to do with the chairman's resignation and all but I think what market wants is that more and more transparency, more and more clarifications apart from numbers also. So I would like to say that if more people can participate from HDFC bank side on their call it will be more transparent and hence investors confidence will further improve.
Right that's very important sir with regards to investor confidence. Thank you so much Parak Takar, their head fund manager at Port Capital joining us to give us a brief on how he reads both ICICI bank and HDFC bank's Q4. But let's now go across to the cabinet briefing being addressed by union minister Ashwini Vaishnaw.
Baleshwar Padra Jakapur Haraspur triple line all the way from Kolkata or Niche Baleshwar, Badra, Jakapura, Haridaspur, Katak, Bhineseshwar, Korda or complete stretch complete four lining projects.
Vijay Vishaknam Vishaka either sort or all the way up to Chennai is complete stretch. Kolkata station basically area station Raj Mandria Nidulu station four lining project. Third and fourth line.
Chennai clearly explain section Chennai high density network section 198 km route length project 9,889 crore rupees project. The districts benefited East Kavari, Konasima, Kakinada, Anakapali, Vishakapatnam sorry districts benefit. GP 4.3 km 4.3 km bridge comp 58 major bridges, 416 minor bridges, 73 underpasses flyovers or viaduct complete raised elevated railway line 2.7 km fully fitted high density high speed or total 458 km track length.
That was Union Minister Ashwini Vaishnaw giving some key announcements including that of the sovereign maritime fund that has been allotted a huge corpus of 13,800 odd crores. Remember entity profit had also given a hint to all of you about this happening. But that's all the time we had on this edition. Stay tuned. This is Malika Arora.
Most important is you have to be bullish when actually markets are bad. In a bullish market to be bullish is not a big deal.
Should we look at blue chips with the same awe that we used to?
So even if you have the bluest of blue chip and if the valuations are upwards of 50-60 times and the companies are glorifyingly growing at 5%, just run.
The argument is being made that because of geopolitical factors etc. valuable companies in India are available at rates they haven't been for several years.
Yes, that is what you should have independent mind. Market is going this side, left side, you should go right side.
By what logic am I going to sit there and talk to JD Betrebel and believe that the world is going to move to cloud? Cloud kitchens as a word hadn't even been defined yet. Ajit Feno furniture rental. We gave him $6 million. He took $4.5 million of that and bought wood and nails and started making furniture. Most companies we give money to turn around and give the money to Google and Meta and start buying advertising. But the chaos that we live in here on a day-to-day basis enables so much great opportunity.
You've been on both sides of the table, right? Asking for funds and then giving them out as well.
A friend of mine and I had an idea that let's build a digital music business and this is pre forget iPhone, pre iPods, right? So, and you talk about timing and the importance of that. We were so early.
There's no real compulsion for you having to come to India and start a business here.
And if my job at IA was find new opportunities for us to leverage what we know to build, so look why don't we go build everything we own. So in June 2005 again not knowing anything about anything I moved to India with a Blackberry, a laptop, a sample term sheet, sample diligence book, and they said, 'Good luck. Call us if you find anything.'
We weren't the right investor for something like Quick Commerce. I would say Danzo did an amazing job as being a brand that people loved. Really did a great job of creating a brand. They did a bad job of thinking about the economics of the business.
Hi, we're talking about your money matters on NV Profit and my name is Alex Matthew. You know, I found the data that came through from the mutual fund industry in the form of the AMFI monthly flows very interesting this time around. It showcased that in the month of March you had a significant inflow into the equity category and this is over 40,000 crore rupees on a net basis and you continued to see slightly more diversified funds and here I'm talking about both in terms of market capitalization as well as in terms of asset class get a sizable allocation.
In the equity category you had flexi cap funds that got over 10,000 crore rupees on a net basis and you continued to see a few pockets in the hybrid category that got a lot of inflows. But if you zoom out and look at FY26 that's a full financial year ending in March as a whole then you will see that the diversified hybrid category has actually gotten a lot more inflows than it has in the past few years and particularly in one pocket which is multi-asset funds.
How have they performed? How have they performed vis-a-vis other balanced advantage, other hybrid funds rather and balanced advantage is one of them we're going to talk about that and what your strategy should be going forward as well. Adita, who's a co-founder of Wealthy.in is joining me to talk about this. Adita, thanks so much for taking the time.
Thanks, Alex. Pleasure to be here always.
Were you surprised and we'll get into the conversation on hybrid in just a bit, but were you surprised with both the SIP number as well as the inflows into equity mutual funds in the month of March?
Not at all actually. And I think so we are a platform that empowers distributors and we ourselves saw actually our best ever SIP numbers posted in March and I think that just goes back to the fact that today investors are being educated by distributors, by platforms like yours, by AMFI everyone in unison that when markets are dipping and others are selling it's time to buy more.
So I think that line which we heard from Mr. Buffett many times and when others are greedy you become fearful, others are fearful you become greedy. Retail investors showing that greediness in month of March actually speaks volumes about the maturity that our investors are showing in this market and I was actually not at all surprised. I was expecting it to be a very good month for SIPs and net inflows just because of overall volatility that we saw.
Okay let's talk now specifically about hybrid. Let's lay the context Adita why are we talking about hybrid in that I think in a sense the flows data for the month of, not for the month but for the full year ending March of 2026 will give some color and perspective on why we're talking about hybrid today and it's eye-opening right because and you've shared that data with me it's equity plus hybrid a large amount of money flowing into multi-asset funds aren't they?
Totally. And you know it's like I mean multi-asset is the largest category now in hybrids.
And again obviously one big reason for that is the returns that multi-asset allocation funds have given because you know as an investor that's probably the first thing you see what is the one year, three year, five year return. So clearly you know multi-asset allocation funds are the best performing category the last one year and two years and so that obviously brings that much more attention.
We saw we also have discussed that you know gold ETFs for example saw record inflows. So obviously that behavior that we as investors chase recent markets, recent returns that continues but thankfully this chase is resulting into adoption of a framework asset allocation which I think most of us as industry participants wanted industry to move towards right that we should go beyond just equity equity equity and start talking about asset allocation as a framework because historically you analyze asset allocation is what drives your majority of returns.
While returns I would say is still the primary driver of adoption of multi-asset allocation funds but I think overall it's pushing us as industry parts and industry overall towards talking more about asset allocation and how today it is possible due to this product category called multi-asset. I want to talk about so let's do this right because and you've rightly pointed out that the tendency is to run after returns and in this case at the very least a positive decision is being made because the switch to multi-asset funds will have relatively better consequences down the road and we'll talk about that as well Adita but before we do let's talk about the numbers.
And you've shared the performance over one year, three years and five years for multi-asset, aggressive hybrid, dynamic asset allocation which is balanced advantage funds and the Nifty total return index and what does that showcase to you?
So I mean I would actually look at three-year picture because three-year picture is a better picture to look at. So Nifty50 we have obviously all know it's you know 12% returns in last three years. And dynamic asset allocation funds are actually close to Nifty performance in fact slightly lower they're at only 10%. So which I think the first one about dynamic asset allocation that shows that dynamic asset allocation is supposed to be dynamic and figuring out which category of stocks whether they are large cap, midcap, small cap, where to divert money that probably hasn't really worked out.
So I think dynamic asset allocation as a category that's why you see inflows also right they are probably the least in terms of inflow contributions. Aggressive hybrid funds have done, that means that they have done close to 13 and a half percent. Multi-asset allocation funds by far they are at 17 and a half percent in last three years.
But I would say the biggest thing for me or biggest reason to probably use multi-asset allocation funds is that if you look at there is this ratio called downside capture ratio which means that when markets fall, when equities fall how much of the downside is my fund capturing. So for example if it's an aggressive fund it will probably end up falling more than the market but the most interesting aspect of multi-asset allocation funds is that not only they have given the best returns in last three years they also the downside capture ratio is just 27%. Which means that they are falling only borderline. It's not exactly true but you can think of it as a way that if Nifty50 is falling by 100 bucks they probably are falling by much lesser.
So that because ultimately we all know that behavior is the most important. I want to understand that because my understanding is exactly that if the Nifty50 is falling by 10% in a particular time frame then this falls by 2.7%. Is it not that?
It's not exactly that but it's you know it's an indication that for example if I will capture only 27% of downside. So it's a ratio it's not exactly percentage but you know it will probably be in historical terms will probably be close to that it will probably be 3, 3 and a half percent if not 2.7%.
Okay. So very but I don't want to talk about that and the other metric of course is volatility which is defined by standard deviation right to say that in a given time frame and if you're talking about so this is category average for three years you shared the standard deviation you said that 9 to 11% is what you experienced for multi-asset funds and 13 to 15% was what you got for your large cap benchmark which is your Nifty 50.
And just for the benefit of those people that are not students of mathematics and who don't necessarily understand the definition of standard deviation, can you describe what it means with a simple example for the return profile and the experience of an investor?
Right. So let's you know obviously this is a very popular curve we all study as you know normal distribution curve. Probably it's the best gift of mathematics to the markets right. And let's assume that we're in a class of let's say 100 kids right and let's say the average or normal distribution is normal distribution the average let's say height is 5 ft right but there are people who are beyond that 5 ft there are people who will go much beyond 6 ft and there are people who will also go beyond 4 ft.
So what essentially standard deviation measures is that what percentage of your people or your results are actually beyond that. So there's also this minus 1 sigma, minus 2 sigma right so essentially we are trying to capture minus 2 sigma that at the extreme ends that out of your let's say 100 kids what are the extreme ends on 5% on the positive side of average and 5% on let's say on the other side of the average you're trying to capture really the extremes that on the extreme if my average height is 5 ft where do my extremes lie.
So similarly here for example if my average is 8 and a half percent you know it actually is moving between like 10 to 15% on this side and 10 to 15% on this side whereas in multi-asset allocation funds the range is much narrower.
But I'm seeing volatility.
Just and just to drive home that point you're talking about a three-year average return for multi-asset funds of 17.43% and a standard deviation of 9 to 11%.
Which is that even for the underperformers you're actually going to have a situation where they've deviated to the extent of 11% on the downside potentially.
This could even be on the other side, right? It could be 11% upside when the return is 17. So basically they've deviated from that 17.43% average to the extent of 9 to 11% either down or up. Correct.
Yeah. Yeah. Yeah. Correct. That's correct.
And so why are we talking about standard deviation? It is to say that if you have a lower standard deviation and a relatively higher return when you compare two comparable investment options then the one with the higher return lower standard deviation is superior to the one with the lower return and higher standard deviation. Right?
Yeah. I would probably explain it in a simpler way that let's say if I have a fast bowler and both fast bowlers take as many wickets but one guy bowls more wides I would probably keep that bowler out of the team.
So standard deviation is something similar that there are funds which are going way beyond range which is acceptable to me as an investor because as we all know more deviation in my returns that I see when I open my portfolio the more likely my blood pressure is to sort of go up or down equally.
So you talked about a fast bowler, but I think I can give you an example of an opening batsman who scores very quickly and can score once every five matches or seven matches rather than somebody who scores has a higher average and is scoring more consistently and gets the job done more often than not. So, either you have an exciting once in five matches performer or you have a more consistent performer, whatever you choose, right? Is that appropriate?
That's appropriate. That brings me to the second point that that's why you also need that one batsman who can just be explosive but your core has to be stable.
Right. Multi-asset has actually become for me personally something that is core of my portfolio now.
So but why is that and why is it especially in the last three years Alan it's important to identify this right because you have multi-asset allocation funds as a category that is interpreted very differently by different fund managers.
If you take an ICICI Prudential multi-asset fund then they have allocation towards commodities but they have it through derivatives they have equity they have fixed income they have possibly arbitrage and they also have derivatives of commodities. If you look at White Oak Capital then they've used equity they've used arbitrage they've used fixed income they've also used gold arbitrage and they've used gold ETFs right.
They used in InvITs like they are probably the I think 13-14% of portfolio is now real estate through InvITs.
Exactly and so you have those that also stick to gold and silver ETFs and you have fixed income and you have equity you have some that are taking a slightly different interpretation on the way that they manage the fixed income as well. So, given what we know about the way that different fund houses construct this, why is it that as a cohort, they have gained more and lost less when the market has fallen?
Yeah, I think gained more primarily because all of them had exposure to commodities, right? So, gold and silver both like for example, Kotak multi-asset was very big on silver, right? They were loaded up others were still in gold right and they captured that rally right so and they obviously have fallen less because everybody has some part of their portfolio in debt like in my case they had very less equity they only had 30% equity right now is only 35% equity right so multi-asset obviously you are absolutely right.
And that's where I think it's become probably a place where fund managers are looking for the best talent in house because it's not easy to run a multi-asset strategy. But when I'm thinking of myself as an investor it is great for me because see what we have traditionally spoken about always is that Indians are big less on equity and big on fixed income and debt gold right that has been the traditional case that's why when we are talking to them about mutual funds we largely speak about equity because we believe that gold and debt is already sort of covered as part of their overall savings or investments that they have.
But if you look at today there is a large set of investors. I'm sure people who are watching your show as well, people like me as well where we don't really have exposure to any gold or fixed deposits. All of our money is through mutual funds or stocks directly. And therefore us people like us, it's very hard to do asset allocation because it looks great in theory but I have to buy a fund, sell a fund, taxation, I forget. But having a multi-asset takes care of me as an overall like for example White Oak has real estate as well. So if I want real estate exposure as well. So people who are fully invested through financial products now multi-asset is actually a boon to them because it allows them to really diversify. To really sort of have exposure to all asset classes without wanting to own asset classes traditional way.
Right. And also you're right that the big problem then remains which fund manager do I choose because it's not that is a problem. You mentioned that this is something that you would put in the core and traditionally you would talk about a passive equity allocation veering towards the large cap side that you would put in your core. And so from what you've just described, you're replacing that now with a multi-asset fund which has equity and can actually go pretty aggressive on equity if the situation demands it. But you have more flexibility from the perspective of the fund manager to choose when that tactical allocation should come through.
And so Adita from an allocation standpoint my question to you is this. A multi-asset fund is not going to take care of your asset allocation for you. And so therefore what is the kind of allocation that you would want to give to this as part of your core portfolio?
Somebody who's doing the SIP for the first time you know my recommendation is today flexi cap/multi-cap plus multi-asset.
So that you get your equity exposure through best flexi cap managers and plus multi-asset it can be 50/50, 60/40, 70/30 you know and in SIP it doesn't really sort of you can decide as your funds start delivering returns you can decide which one to sort of go for. But even if people who are sort of at 1 crore portfolio and want to make their life simple you know they can actually just I mean it's a radical call but they can just say that okay I will have just two or three multi-asset funds in my portfolio to take care of my asset allocation for the rest of my life.
We'll actually start to see that it's not yet happening because you know we have had stellar equity returns but you know I mean I'm sure in couple of years we'll see portfolios which are just multi-asset and we will see multi-asset managers becoming more and more distinct you know while.
So follow-up question therefore and it is said in certain other categories that the comparable strategies exist so there is a high
Degree of duplication, right? If you look at large cap equity as a category actively managed, the potential for portfolio duplication exists, or even midcap for that matter, because 65% of the portfolio is only from 150 stocks. So the possibility of a replication of portfolio exists between two fund managers, whereas in small cap there is a lesser chance of that taking place. In multi-asset in particular, there's likely to be a very divergent approach to managing. So therefore, is it appropriate to have more than one multi-asset fund? How do you approach the strategy?
Yeah. No, so definitely, because once you let's say have two funds, let's say I decide for myself that okay 60% equity and then 40% depending on where the markets are. Now why do I need two funds? Because for example in our case also when we saw the data is that DSP for example is good at global allocation, whereas the other two AMCs might not be good at global allocation. So that's why having a two-three fund style helps you sort of get the right kind of exposure across different asset classes. Because the ultimate goal of multi-asset is to diversify, right? To sort of ensure that the goal is not for it to be the best return product, probably the goal is to have a good return product with the least volatility.
But let me ask about that, because since you mentioned return and return expectations, just because you've gotten what, 18%, 17.5% over the last three years, it does not mean that you're going to get that. In fact, if anything, this is not a product that gives you stellar returns. That is the role of equity in your portfolio.
So you shouldn't be having 17% return expectations. What should your return expectations be?
I think return expectation from equity probably is 12%. Other asset class is maybe 10%. So it will be somewhere between 12 to 10%. But there will be, as I said, periods where globalization maybe gives you much higher returns. So I would say that the long-term returns will be lesser than or similar to equity, but the upside is that you will get much lesser deviation from your mean return, which is probably going to be between 11 to 12%, maybe 10 to 12%. So I would actually put it down slightly lower than equity in terms of return expectation.
And particularly because gold and silver can go through their own cycles. You could have a situation from what, 2012 to 2019-20, when gold does nothing, right? And you can have a period over three years where it can give you stupendous returns. But just to come to the nub of the issue, which is how do you choose and what do you select from your perspective and your study, and these are not recommendations. If you were to narrow down some of the strategies that you like and why, what would they be?
Very tough question, as you rightly said that you know, can't take names. But I think I would essentially sort of figure out the calls that fund managers have taken, and again that can be looked at through numbers. We can look at downside capture ratio, standard deviation, and through the rolling returns. So these are the three things. But as I said, I would definitely want slightly different. So I would want probably, as I said, maybe equity will become something that I'm getting fed into my portfolio through a more traditional equity strategy. So in multi-asset, I said probably I'll go with a fund manager that has probably exposure to more asset classes. Maybe I would look whether there is real estate or not. Ideally, maybe global allocation is there as well, but we all know there are constraints or limits there, so hard to predict. So right now I would probably look at something like how White Oak is also doing it, because they're very distinct from the rest of the market. So it's something that gives me the true diversification that I need as an investor, especially as an investor who doesn't own real estate otherwise or gold otherwise or pre otherwise.
Yeah, that's a fair point. All right. On that note, Adita, thanks so much for taking the time. Appreciate that you've spent this time with us and it's a very interesting topic.
It is, and I'm sure it will only get interesting from here. We have a lot to look forward to in multi-asset.
Absolutely. Thanks so much for taking the time.
We've been getting a lot of questions about how your salary structure is going to change in the new financial year with the introduction of the new wage code and the new income tax act. And so we decided to put it in the numbers, to put an example on the board and to discuss it. I'm joined of course today by our in-house chartered accountant Mahima Vajrajani and she's actually put this example together. So before we start, just a couple of things that you need to bear in mind. Most important thing is that for the purposes of the calculation of your provident fund contribution, the definition of wage changes in the new wage code. It is accounted for as 50% of your gross salary and that's where most of the change comes into play. There are also a couple of other changes with regard to your allowances or your perks and we'll get into that in just a bit. But for the purposes of this calculation, Mahima, we're talking about the old tax regime. Let's go through it.
Right. So, old tax regime. Yes, that's correct. What we've done here is for simplicity we have taken CTC as 10 lakh rupees. Now that the definition of wage core has changed, earlier it was around 30% where the structure was supposed to have basic, now it's gone up to 50% and accordingly all of these components will be structured. So earlier where HA was 1 lakh 50 here, now it'll be at 2 lakh rupees. Special allowance at 2 lakh 50 in the old case, now we'll be at 1 lakh 50 in the new structure. And perks, which we were talking about, that includes your meal, your mobile allowance etc., will be at 1 lakh 15 both the cases. But there are certain tax changes which have happened. Earlier they were partially exempt, now it is fully taxable. And there's other allowance components which had a chance in the old structure will not have any.
Simply because your basic goes up, right? And ultimately, by the way, this is just for explanation purposes. The exact details of your slabs or your structure could be a little different, but the tax implications are also interesting, right? Because we've talked about gross salary, the exemptions, ultimately you're talking about ATC, ATCD, all of that that you're taking in. Mahima has assumed two lakh here, it's just 50,000 rupees here, or rather, it's 50,000 here. The standard deduction is 50,000 and that's 50,000 rupees there as well. The tax before rebate is set at 25,000. It's a little higher there and the final tax is between 0 and 10,000 based on what you're claiming as deductions here, and it could be anywhere between 20,000 and 40,000 rupees there ultimately as a result of that. And Mahima, you've taken the wider end, right?
The wider end, the 10,000 case in this, where the high tax could be 10,000 here and 40,000 here. And accordingly your in-hand will change because overall 10 lakh minus 10,000 minus the overall provident fund contribution, which is 12% of three lakhs basically from both the sides. So 24% overall comes out to be 72,000. So your in-hand will eventually come out to be around 76,500 in the earlier case.
But this is important. This is the most important change, which is your provident fund contribution from this case to this case goes from 72,000 rupees to 1 lakh 20,000 in a year. And that means that your full year in-hand drops to 9 lakh 18,000 approximately based on tax and provident fund contribution by both employer and employee, and it goes down to 8 lakh 40,000 in this case, which works out to 76,500 rupees per month here and 70,000 rupees per month here. That is where most of the change takes place. And ultimately, this was old tax regime. In the new tax regime, where a 10 lakh salary does not attract tax, there would still be a change because Mahima, this would still be 5 lakh rupees and this therefore would still be 1 lakh 20,000. There would not be a tax implication, so to that extent your in-hand would rise just a tad bit.
And so therefore the difference between this and this would not be as dramatic. Point is that you're contributing more for your retirement benefits with this change that takes place, but you're going to have to be willing to take a little bit less in hand every month.
Hopefully, this has explained a few question marks for you. If you've still got questions, write to us and we'll try and get them answered. That brings us to the end of this edition of Your Money Matters. Thanks so much for watching. This is NDTV Profit.
Most important and you have to be bullish when actually markets are bad. In bullish market to be bullish is not a big deal.
Should we look at blue chips with the same awe that we used to? So even if you have the bluest of blue chip and if the valuations are upwards of 50-60 times and the companies are glorifyingly growing at 5%. Just run.
The argument is being made that because of geopolitical factors etc., valuable companies in India are available at rates they haven't been for several years.
That is what you should have independent mind. Market is going this side, left side, you should go right side.
By what logic am I going to sit there and talk to Jibet rebel and believe that the world is going to move to cloud? Cloud kitchens as a word hadn't even been defined yet. Ajit Feno furniture rental. We gave him $6 million. He took $4.5 million of that and bought wood and nails and started making furniture. Most companies we give money to turn around and give the money to Google and Meta and start buying advertising. But the chaos that we live in here on a day-to-day basis enables so much great opportunity.
You've been on both sides of the table, right? Asking for funds and then giving them out as well.
Friend of mine and I had an idea that let's build a digital music business. And this is pre, forget iPhone, pre iPods, right? So, and you talk about timing and the importance of that. We were so early.
There's no real compulsion for you having to come to India and start a business here.
And if my job at IA was find new opportunities for us to leverage what we know to build, look why don't we go build everything we own. So in June 2005, again not knowing anything about anything, I moved to India with a Blackberry, a laptop, a sample term sheet, sample diligence book, and they said good luck, call us if you find anything.
We weren't the right investor for something like Quickcommerce. I would say Danzo did an amazing job as being a brand that people loved. Really did a great job of creating a brand. They did a bad job of thinking about the economics of the business.
Hi, I'm Tamana. Watch me on NDTV Profit where I break down the day's biggest business stories. What happened, why it matters, and what it means for your money.
Hi, I'm Ned Sha. Watch me on NDTV Profit for the most incisive market intelligence and meaningful corporate conversation.
And I'm Alex Matthew. Markets, mutual funds, insurance, personal finance. I help you cut through the noise and make smarter financial choices. And here's where you can watch us.
He has been tracking markets for over a decade, spots the trends before they hit the screen. And he is now bringing his analysis to the show that the market watches. Watch Shahad Dubet on Know Your Company. A show that puts the most traded stocks under the scanner. We dissect the company so that you, the investor, don't have to get the management to answer questions relevant to you. Watch Know Your Company weekdays at 11:30 a.m. to understand your next big bet.
Banking heavyweights HDFC Bank and ICICI Bank report a healthy performance in Q4. ICICI Bank's margins improve while asset quality remains stable. On the other hand, HDFC Bank sees a steady profit growth while net interest income also rises.
Hours after Iran declares a crucial Strait of Hormuz trade route completely open, Iran's parliament speaker asserts that the passage through the Strait of Hormuz will be conducted based on the designated route and with Iranian authorization. US President Trump insists Strait of Hormuz blockade remains until Iran deal is complete. Expects quick resolution. Iran warns Trump that Tehran will close the Strait of Hormuz if the US continues its naval blockade.
Crude gives up war gains as supply fears ease. Brent slides over 9% to near $90 a barrel after Iran signals a temporary Hormuz reopening.
Global market zooms after Iran announces opening Strait of Hormuz. Wall Street ends at a record high on Friday as S&P 500 notches first close above 7,100 while NASDAQ posts its longest winning streak since 1992.
Hello and welcome viewers. This is Profit 360 on NDTV Profit and I'm Malika Mishra. Along the next half an hour, we'll bring you latest on markets, national as well as international news. Let's start with focusing on earnings. Bank heavyweights like HDFC Bank and ICICI Bank have both reported a healthy performance in Q4 and my colleague Push joins us with a lowdown on how first HDFC has done in Q4. Push.
HDFC Bank has reported a robust set of numbers for Q4 FY26. The bank's Q4 net profit is above estimates at 19,221 crore. Its gross NPA and net NPA ratios have also improved. Gross NPA ratio stood at 1.15% as against 1.2% last quarter. Whereas net NPA ratio is more or less flat at 4% in Q4. The bank's net interest income, which is the difference between interest earned and interest expended, stood at around 33,820 crore, broadly in line with the estimates. And the bank has also decided to pay a special dividend of Rs 13 per share to its shareholders. And the bank's board has also said that they will consider raising around 60,000 crore rupees via debt instrument over the next 12 month period. The bank however has not sought or it has not informed exchanges of whether it has sought a reappointment request from the RBI, which is something we will be tracking in the media call in few minutes from now.
Right. And ICICI Bank also announced a good quarter with profits beating estimates, margin improved and asset quality remained stable in the last quarter of FY26. Push joins us back with all the key highlights. How did ICICI Bank go?
ICICI Bank too has reported a robust set of numbers beating the estimates for Q4 FY26. Net profit, the bank has posted a net profit of 13,720 crore as against the estimate of 12,930 crore in Q4 FY26. The gross and net non-performing asset ratios have improved with GNPA ratio improving to 1.4% as against the estimate of 1.5% and net NPA ratio improving to 0.3% which is broadly in line with expectations. The bank's net interest income stood at 22,979 crore as against the expectation of 22,712 crore. The bank has posted robust business growth for the Q4 reporting quarter with overall advances rising by around 16 odd percent to 15.54 lakh crore rupees in Q4 whereas total deposits were up around 11% to 17.95 lakh crore rupees in Q4 FY26.
Thanks for that viewers. Let us now cut across to ICICI Bank's Q4 call FY26.
The retail loan portfolio grew by 9.5% year-on-year. Including non-fund outstanding, the retail loan portfolio was 41.7% of the total portfolio. The mortgage portfolio grew by 13.2% year-on-year. The business banking portfolio grew by 24.4% year-on-year. Growth in the domestic corporate portfolio was 9.3% year-on-year at March 31st, 2026. About 71.9% of corporate loan portfolio was rated A minus and above at March 31st, 2026. Moving on to asset quality, net NPA ratio was 0.33% at March 31st, 2026 compared to 0.37% at December 31st, 2025. During Q4 2026, there were net additions in gross NPA of 1,174 crore rupees. Gross NPA additions were 4,242 crore rupees in Q4 2026. Recoveries and upgrades of NPA excluding write-offs and sale were 3,680 crore rupees in Q4 2026. Gross NPA written off were 1,768 crore rupees in Q4 2026. There was a sale of NPA of 112 crore rupees in the current quarter. Provision coverage ratio for non-performing loans was 75.8% at March 31st, 2026. Total fund based outstanding to all borrowers under resolution as per various RBI regulation was 1,496 crore rupees. Loans and non-fund based outstanding at performing corporate borrowers rated double B and below was rupees 3,519 crore rupees at March 31st, 2026. Total provisions during Q4 2026 were 96 crore rupees, 0.5% of core operating profit and 0.03% of average advances. The bank continues to hold contingency provision of 13,100 crore rupees at March 31st, 2026. Customers are at the heart of what we do and providing them a safe environment is paramount. I would like to share some of the recent initiatives on our customer-centricity approach. Enhancing our digital banking platforms. We have redefined our digital platforms to better align with customer needs. In our mobile banking apps, iMobile, the My Loan section has been redesigned for a more streamlined experience. Customers can now view all loans and statements in one piece, check overdrafts and access the no objections or no due certificate and income tax certificate with ease. Blogs and FAQs have also been added in for additional guidance. We have revamped the user interface of InstaBiz, our mobile banking app for business, and our corporate net banking platform. The redesigned interfaces simplify navigation and provide a more comprehensive view of all the sections on InstaBiz. Role-based dashboards for makers and checkers help speed up transaction approvals and improve traceability. We are also making banking more convenient for NRI customers. NRI customers can now access Money2India, our money transfer platform, through iMobile app. This feature is available in US, UK, Canada, Europe and UAE, making cross-border banking more accessible. We have also launched iMobile Global, a unified banking app for NRI customers. It is currently available in UK and will soon be expanded to other international geographies. The app provides a consolidated view of both domestic and NRI savings accounts. As part of our initiative to further simplify banking, we have introduced various features on iMobile. Customers now can instantly access, download and share the digital cancelled cheques directly from the app without the need of a physical chequebook. It makes account verification and payment setup effortless. We have also enhanced the inward remittance experience. All the key details a recipient in India needs to share with an overseas sender including purpose and currency are now consolidated in a single document with an option to download and share. Through these initiatives, we continue to make meaningful steps to improve service quality and support customers in their everyday banking needs. Going forward, we will continue to operate within a strategic framework while focusing on micro markets and ecosystems. The principles of fair to customer, fair to bank, one bank, one team and return of capital will guide our operation. We focus on building a culture where every employee in the bank serves customers with humility and upholds the value of brand ICICI. We aim to be a trusted financial service provider of choice for our customers and deliver sustainable returns to our shareholders. With this, I conclude my opening remarks and we'll be happy to take your questions.
Thank you very much. We will now begin the Q&A session with Mr. Batra and Mr. Banerjee. Anyone who wishes to ask a question may press star and one on their telephone. If you wish to remove yourself from the question queue, you may press star and two. Today's announcement is on the bank's financial performance. Hence, we would like to request you to ask questions related to that. Please write to the corporate communications team separately for any other queries. Due to time constraints, I request all of you to ask two questions at a time. If you have additional queries, you may join the queue again if time permits. Thank you. We'll take the first question from Mayetti from Times of India. Please go ahead.
Yeah. Yeah. Congratulations on the milestone profits. I had a couple of questions. Firstly, did you all have to make any, were there any losses on account of these RBI measures to put limits on the forex transactions? And secondly, there was a report that ICICI Bank is facilitating payments to Iran. Just wanted to check because wouldn't that expose you to any kind of risks since there's a sanction?
So first question is on... I'll just answer the first question. There was, I mean the accounts if you have seen, there's been a treasury loss of about 106 crores in Q4 compared to a loss of about 157 crores in the previous quarter and a gain of 239 crores in Q4 of the previous year. These primarily reflect market movements. Of course, the bank had some open positions on onshore market which were required to be reduced as per RBI guidelines and treasury income of this, of 109 crore loss does reflect the impacts of the widening of spread post issuance of these guidelines.
Koshik, here on the second question about the Iranian oil, I would rather request you to concentrate on today's topic which is the quarterly numbers. We can discuss other questions separately. Thanks. Next question.
Thank you. We'll take the next question from Joel Rebello from Economic Times. Please go ahead.
Sir, thank you. Can you hear me clearly?
Thank you. Sir, I just want clarification before I ask my question. There's a 90% drop in provision year on year. I just wanted to understand because that's a huge drop. Can you explain why this 90% drop has happened? I know asset quality is good and everything but if you can explain because it's a huge drop.
So you're talking about the drop. I think yes, the total provisions during this quarter has been less than 100 crore compared to of 891 in the US. We have seen some improvement in quality of the portfolio and also certain corporate recoveries which have come from return of accounts. And we have also not utilized the contingency provisions. So I think we are very careful about our asset quality, but adjusted for these one-offs etc., and normalizing for agri loans, a normalized credit cost has been under 50 basis points for FY26. So we will see how it goes forward but we do expect to maintain a healthy trend line and we are monitoring the current economic environment very carefully. There's nothing specific to call out.
Okay. So basically if I say that the drop in provisions was mainly because of asset quality being good. Is that correct? My understanding is that.
Which is one of the aspects. The second is we had certain recoveries from the return of account. So it is both these.
Okay. My second question is to do with deposits, sir. We have seen deposit rates falling quite substantially in the last six months or so. With the current situation that we are in, liquidity and everything taken into account, how do you foresee deposit rates going? Do you think that the rates could go up?
It's very difficult to make this, but I mean, at the end of it both lending rate and deposit growth move in tandem. Of course some of it happens with a lag. So as far as we are concerned, we are just focused on money in the bank. So we try to get both current account savings account and deposit accounts. And our focus has been largely around quality customers and try to become the primary banker and try to get a good share of customers' wallet. So we do hope that continues and this happens across a range of customers whether from retail, business banking or corporate banking. How the interest rate moves is largely dependent on macros and given the uncertainties at this point of time it's very difficult to make a long-term call on this.
All the very best. Thank you so much.
Next question is from Ankur Mishra from ET Now. Please go ahead.
Good evening gentlemen. I want to get your comment on the net profit numbers per se which has grown 8.5% YoY. How much is it driven by lower provisions versus operating income growth?
Sorry, you've come again. You're talking about the... Our core operating profit for the year has grown by about 7.7% and for the quarter at about 5.1%. The profit before tax for the year grew by 5.8%. And the profit after tax for the year again grew by about 6.2%. So I'm just talking of the yearly numbers. For the quarter you will see that the core operating profit grew by 5.1%. There has been a decline in provisions which I just talked about by 89%. And profit before tax excluding treasury has been about 10%. So there's been hardly any change on the treasury income line.
Right. Does that answer your question? On the NIMs, you have maintained 4.32%. Have actually margins peaked in this cycle? And overall on the growth also, including advances growth in the current scenario, you think that will be sustainable?
You know, of course the interest rates, we have been able to maintain margin. Very difficult to say about the future given the fact that the NIM trajectory will depend on number of factors including geopolitical developments on the domestic economy, liquidity, deposit rate and of course competitive intensity. We do expect NIMs to be range-bound in FY27. From our perspective, we continue to focus on risk-calibrated operating profit which we have been saying for a long period of time. And as the Indian economy continues to grow, we should be, we do have the liquidity, the capital to leverage our franchise for good quality customers. We'll remain focused on this but at the same time we are mindful of the developments that are happening on the geopolitical side and we'll keep a close watch on this. So our approach on risk-calibrated growth will continue as it has been in the past and within this framework we do see reasonable opportunities coming our way.
Thank you. We'll move on to the next question from Shukla from NDTV Profit. Please.
Good evening Mr. Batra. I have two queries for you. First is on the momentum of your, you have posted a strong loan growth in Q4. What would be your guidance in terms of both loans and deposit growth in FY27? The other question I wanted to understand, you are the second largest private bank and have a fair view of how macros will be impacted, the second and third order impact from the Middle East conflict on banks' balance sheet. Can you give us some color? There are expectations that the petroleum prices may rise, input cost may rise, there could be supply chain issues. Eventually it will end up on the layman, the end customer. Do you see a material sort of impact on banking industry in the next financial year in terms of asset quality and what are the pain points?
Very difficult to make a forecast in this day where forecast validity is not even a day at this point of time. But given the overall scenario, there has been an immediate impact on market yields which you are aware of. There has been an impact on currency, metal prices and some of this is reflected in the numbers for the Q4. Of course, during the Q4 there was a very little period of the West Asian conflict. We will continue to monitor these indicators. The impact on economic growth and potential credit demand will depend on the duration of the conflict. Of course, even RBI has mentioned that there is some amount of uncertainties on account of supply shock. We do hope things become better sooner. As far as we are concerned, we do have a strong balance sheet in terms of liquidity, provisioning, capital and a good technology architecture and we will continue to leverage our franchise and grow within our risk parameters and we will continue to monitor developments across. So given the scenario, I think we have been saying we look at risk, we look at profitability, we look at good quality customers and what falls within our framework we will continue to grow within that area.
Thank you. We have a next question.
Yes please. We have a next question from Hamsini Kalpik from Money Control. Please go ahead.
Hi sir. Am I... Can you use your handset mode please?
Yes. Good afternoon. Two questions from my end. One is that for most of the gone by fiscal, FY26, growth in single digit and heading to growth in single digit, should we assume that these growth levels are the new normal for ICICI considering the operating environment we are in? My second question on home loans. The business banking segment particularly, this has been growing at a healthy 17% plus run rate for most quarters of last fiscal. Given the geopolitical tension and this is a segment where people are saying given tariffs and the war impact etc., one needs to watch out for quality. What is your commentary on the business banking segment, how do you expect this particular business to sort of shape up in FY27? These are my two questions. Thank you.
I mean one, I just want to mention that we continue to see strong growth on the asset size and deposit mobilizations. The profit growth is also a function of the interest rate cycles as you are aware. So that aside, if coming back to the advances that you really talked about, I think the advances reflect the strong momentum of economic activity in the country which has been supported by policy measures and a fairly stable policy rate. So within this framework we have seen growth in mortgages. We have seen in rural portfolio we have also seen some pick up in personal loan. During this quarter we are seeing even some pick up in corporate loan. Yes, we have seen healthy growth in the business banking and from our point of view we look at a completely integrated approach. We look at coverage, we look at delivery, we look at technology and for good quality customers there are opportunities and from our perspective we look at customers on a 360-degree angle and a total relationship value. So within that framework, within our risk thresholds we are happy to grow within the overall environment. Of course as you rightly said there are developments and the impacts of that could be, as and when they become more visible we will be cognizant of it and take appropriate action both in terms of growth as well as our risk measures. So we keep track of these developments very closely.
Is pricing in the favor of the bank right now, sir, both on the corporate as well as on the retail front? Does pricing power continue to rest with bankers or are customers able to negotiate better deals on certain instances?
No, it's a competitive environment and within the competition you have to find the right price and from our perspective whenever we get, we need to ensure that we get a good quality customer and a fair pricing. As long as both of these are met we are happy to grow.
Thank you. Thank you. Next question is from Cheyen Go from Mint. Please go ahead.
Hi, thank you sir. The first question is are you witnessing your corporate customers delay investments as a result of the uncertain situation? Are they holding back on investments?
It's too early to call out. It's too early frankly, it's too early to call out. I mean just look at the quarter gone by. I mean most of the developments have happened in the month of April. If I just go back to what has happened on West Asia, I think we have to remember that the long-term story of India remains intact. We cannot deny that the developments of West Asia will have some kind of an impact in overall but given the overall framework I think corporate India will get back to growth. You can see that reflected in all the forecasts by RBI or even IMF. I mean, will there be a bit of an impact on the GDP growth in FY27? The answer is yes but it is still going to be growing and within that there will be enough opportunities for both corporate India and for us to grow.
Okay. The second is on your co-lending arrangements. See, what I wanted to understand is the NPA ratio there is much higher than your other portfolio, regular portfolio which is slightly above 1%. Here it's close to 5%.
I don't think so we give co-lending NPA ratios separately.
You have given the total portfolio and given the amount of NPA there which is on page eight of the financials.
Sorry. Where are we? I think we can get back to you separately. I don't...
It's just there on page eight of the exchange filing.
Viewers, that's all the time we had on this edition. Before we go on the break, in fact what you were listening to is the ICICI Bank conference call and like many media persons asked the management whether they see any impact, material impact of the West Asia conflict on their books and the management did say that while their growth remains stable, they will keep their risk measures in mind as developments in the Middle East take place. But that's all the time. Thank you so much for watching. This is Malika Mishra.
Most important and you have to be bullish when actually markets are bad. In bullish market to be bullish is not a big deal. Should we look at blue chips with the same awe that we used to?
So even if you are the bluest of blue chip and if the valuations are upwards of 50-60 times and the companies are glorifyingly growing at 5%. Just run.
The argument is being made that because of geopolitical factors etc., valuable companies in India are available at rates they haven't been for several years.
Yes. Yes. That is what you should have independent mind. Market is going this side, left side, you should go right side.
By what logic am I going to sit there and talk to JetRebel and believe that the world is going to move to cloud? Cloud kitchens as a word hadn't even been defined yet. Ajit Feno furniture rental. We gave him $6 million. He took $4.5 million of that and bought wood and nails and started making furniture. Most companies we give money to turn around and give the money to Google and Meta and start buying advertising. But the chaos that we live in here on a day-to-day basis enables so much great opportunity.
You've been on both sides of the table, right? Asking for funds and then giving them out as well.
Friend of mine and I had an idea that let's build a digital music business. And this is pre, forget iPhone, pre iPods, right? So, and you talk about timing and the importance of that. We were so early.
There's no real compulsion for you having to come to India and start a business here.
And if my job at IA was find new opportunities for us to leverage what we know to build, look why don't we go build everything we own. So in June 2005, again not knowing anything about anything, I moved to India with a Blackberry, a laptop, a sample term sheet, sample diligence book, and they said good luck, call us if you find anything.
We weren't the right investor for something like Quickcommerce. I would say Danzo did an amazing job as being a brand that people loved. Really did a great job of creating a brand. They did a bad job of thinking about the world.
India will add 400 million urban residents by 2047. Think about that number for a moment. 400 million people. That's more than the entire population of the United States. And that population is going to be moving into Indian cities in the next two decades. Every road, every building, every drainage system, every cooling solution that we build for them will either lock in decades of emissions or lay the foundation for a climate resilient nation. So the choices we make in the next 10 years are in the truest sense irreversible. And today's panel that we have with us here today brings three perspectives on what getting this right actually requires. We're joined by Arti Nan, a senior adviser with the United Nations Environment Program, India's cooling program. Because in a country where temperatures already hit 50 degrees Celsius, cooling is not a luxury. It is a survival question. Shishir Priyadi is a president of Chintan Found research foundation and a former director at the World Trade Organization. He brings a rare combination of environmental and economic lens to urban sustainability. And with us, Dr. Samir Bhattager, a partner at KPMG India, working at the intersection of ESG and infrastructure, translating sustainability commitments into balance sheets and boardroom decisions. Thank you so much all for joining us today on this very very important discussion especially when we talk about the fact of so many millions of people who are going to be shifting into our cities and how cities need to expand and we're all seeing the construction boom that is currently taking place. So Mr. Priyadi, I'd really like to start with you because when we're talking about infrastructure and we agree there's a need to shift from climate neutral to climate intelligent infrastructure and this is something I think we're all agreed about that we need our cities to be more climate conscious, but what do we really mean when we say that? For the young people here, for those who are viewing this, what does that mean when we say this?
Thank you so much and thank you NDTV. Lovely to share the stage with Arti and Samir. Look, let me start with a very basic point. You know, the minute we talk of infrastructure, what is the first thing that comes to mind? You will feel concrete, steel, you know, that's what we are building. And certainly the things that will use that concrete and steel would be even regarded as even bigger polluters. So the minute you think of infrastructure, it's necessary for the growth of the country, but the first picture in your mind is one of pollutants and obviously not sustainable. So I think the biggest point, so far we've done for decades, and people trust me are more intelligent on the panel than I am. So don't listen entirely to me, but what we've done for years is we've got infrastructure and then tried to make it climate neutral. You know, we'll construct a road, we'll have a building, we'll have a cement factory or whatever is required, then try and make it climate neutral. And there our success has been good at times, marginal at times and quite poor at times. I think what is required is this sea change in the whole conversation. That we don't need climate neutral infrastructure. What we need is climate intelligent infrastructure as you're asking. Now what is climate intelligent infrastructure? One which is not based on historical data but which is looking at what you need ahead. It's not because we needed something which was a more efficient infrastructure but what is it that we need in 20 years time. Similarly the second very very important part of a climate intelligent infrastructure would be to embed technology into that infrastructure. Technology that will make your infrastructure more efficient. It'll recover the initial higher cost as just been talked about. But much more importantly, it'll not be set in stone. It'll allow adaptability depending on the kind of infrastructure. And finally, the third point which will certainly make it far more intelligent is you don't make it just climate neutral in the context of sustainability. You also make it resilient. So you've got infrastructure which is climate neutral but has got resilience built into it whether it be to local climate conditions etc. But the list can be long but I'll stop for the minute here so that just to get all of you thinking over the course of the next 35 minutes how important it is to bring in the word intelligent infrastructure into the debate of climate.
That's right. And Miss Nan, I'd like to come to you next. And the global sustainability architecture is only as strong as its national implementation. So what does UNEP's work in India reveal about the gap that we currently have in the country when it comes to international sustainability frameworks and the on-ground infrastructure reality?
Thank you. Thank you so much for having me on the panel and with such great co-panelists. There's no straightforward answer to this because UNEP works across a spectrum of areas. You know we are looking at circular economy and infrastructure. We are looking at heat resilience to sustainable cooling. We are looking at sustainable building materials and each of them are not just governed by the overarching frameworks like the sustainable development goals but they all have their own internal frameworks, sector specific frameworks. And in some India is actually a leader, at least a regional leader. For example clean energy as Miss Chundra was just saying that we are really far ahead of the curve and there are others where we are lacking. The gap sometimes exists not in the ambition but in the implementation and that happens because of a varying number of factors. One is the informal nature of even our urban infrastructure and it's very difficult then to regulate it and to track. So bringing any new regulations for it is not easy and then tracking any improvements or sliding backwards is not easy. Secondly, there's a data gap which is not helping us in implementation or not helping us in implementation as fast as we would like it to be because the data is not always there to measure our baselines and benchmarks and how we are proceeding and progressing. So that's a problem and I think it's also the institutional capacity which is not helping us in implementation and it is not as if both the public and the private sector is not investing in building these capacities but it is just the scale of our country and the diversity of the 400 million, I work more on urban infrastructure, I think 300 million people are still in what you would call vulnerable levels. And I think 60% of our country would be urbanized. They need that infrastructure. So the scale is huge. It's diverse. There's a mix of rich and poor. And the cities do not have the capacities and the institutions whether it is public or urban or rural or private. They do not have that capacity that is required to achieve the scale and the ambitions that we have set. But we are moving towards it. We try and work across multiple states.
Right. In fact, I wanted to ask you ma'am, in your dealings with local governments, local administrations. Do you find them conscious of this concern that we again and again hear at NDTV when we have these conferences which we talk about, but are they at their level concerned and very conscious of this?
Very concerned. It's their biggest concern. They want help. Whenever UNEP goes, it's like can you help us in doing this, can you increase our capacity. A lot of the funding that we have within our programs is dedicated to fund, you can call it training, capacity building. They want internal capacities to be built, institutionalized, embedded, but they also want the private sector to be trained to take up this work further. And they also want a lot of civic engagement and be enabled to undertake that citizen and civic engagement. So yes, I would leave it at that. I mean we are there in certain cases but there's a gap.
Right, and which is why conferences like this are very important that people learn more about these issues and the need to be engaged. Dr. Samir Bhagar, let's now talk about the private sector and ESG due diligence is rapidly reshaping how infrastructure projects are financed and appraised. So what are the most significant ESG gaps that KPMG is seeing in Indian infrastructure projects and how are global capital providers responding to this?
Thank you for having me on the panel today and I think it's a very interesting question around ESG or sustainability due diligence for projects. Yes, there are established frameworks and when we look at large projects they will undergo the required diligence in terms of environmental standards and how they conform. But I think when we talk about infrastructure it's also about doing that, what happens to the smaller projects. Because the minute we talk about the core infrastructure itself, the cost of capital in India per se for infrastructure is expensive. The minute we talk about various compliances, as was mentioned in the first panel, that around 60% of business is in theme sector, right? A lot of our cities are still small in scale and size. A lot of our city projects other than let's say a large metro are very small in size including some of the water supply and such projects, right? So when the scale is smaller, the cost of ensuring a lot of the project administration work etc. is also quite expensive for them. So while the larger projects are undergoing those, the question of what happens to the smaller ones in the smaller cities and again as my predecessor mentioned, Arti mentioned, what is the...
Capacity of the local agency as well as the private sector and the advisers to undertake diligence of these small projects across the city. Do we have enough skilled people to undertake that? So that's a challenge we're seeing in terms of scaling up of the skilling to undertake these kind of assessments. And because data is not available and data is still dispersed and we do not have a large history of data. So it's something which while we would look at digital technologies and probably AI helping in quite some extent to this, until we have reliable data and established baselines and models, automating these processes on diligence is going to be a challenge. So that's one problem that we face. But when you talk about the second part about global capital providers, yes, they do see projects which have a better green coefficient actually responding with directing more funds to. There is an uptake but the question what...
Because internationally they're a lot more conscious of this and we'll only get involved with projects and with people who are also meeting those parameters.
Correct. So the big ones still probably get that attention but I would also want to take how do we kind of bring attention to the smaller ones and that's why probably aggregation so that they can come to a scale and to a platform is something what would be required to kind of accelerate the pace of adoption in the rest of the country and not just limit it to a few large cities or state capitals.
Most important and you have to be bullish when actually markets are bad. In bullish market to be bullish is not a big deal.
Should we look at blue chips with the same awe that we used to? So even if you have the bluest of blue chip and if the valuations are upwards of 50, 60 times and the companies are glorifyingly growing at 5%. Just run.
The argument is being made that because of geopolitical factors etc. valuable companies in India are available at rates they haven't been for several years.
That is what you should have independent mind. Market is going this side left side you should go right side.
By what logic am I going to sit there and talk to Jade Deeprebel and believe that the world is going to move to cloud kitchens as a word hadn't even been defined yet. Ajit Feno furniture rental. We gave him $6 million. He took $4.5 million of that and bought wood and nails and started making furniture. Most companies we give money to turn around and give the money to Google and Meta and start buying advertising. But the chaos that we live in here on a day-to-day basis enables so much great opportunity.
You've been on both sides of the table, right? Asking for funds and then giving them out as well.
Friend of mine and I had an idea that let's build a digital music business. And this is pre forget iPhone, pre iPods, right? So, and you talk about timing and the importance of that. We were so early.
There's no real compulsion for you having to come to India and start a business here.
And if my job at IA was find new opportunities for us to leverage what we know to build, look why don't we go build everything we own. So in June 2005 again not knowing anything about anything I moved to India with a Blackberry, a laptop, a sample term sheet, sample diligence book and they said good luck. Call us if you find anything.
Talk to me about Danzo. We weren't the right investor for something like Quickcommerce. I would say Danzo did an amazing job as being a brand that people loved. Really did a great job of creating a brand. They did a bad job of thinking about the economics of the business.
Hi, I'm Tamana. Watch me on NDTV Profit where I break down the day's biggest business stories. What happened? Why it matters and what it means for your money.
Hi, I'm Ned Sha. Watch me on NDTV Profit for the most incisive market intelligence and meaningful corporate conversation.
And I'm Alex Matthew. Markets, mutual funds, insurance, personal finance. I help you cut through the noise and make smarter financial choices. And here's where you can watch us.
He has been tracking markets for over a decade, spots the trends before they hit the screen. And he is now bringing his analysis to the show that the market watches. Watch Shad Dubet on Know Your Company. A show that puts the most traded stocks under the scanner. We dissect the company so that you, the investor, don't have to get the management to answer questions relevant to you. Watch Know Your Company weekdays at 11:30 a.m. to understand your next big bet.
New year, new power panel, India market open, now in its boldest lineup. This is where the trends get tested and stocks get conviction.
I'll recommend a buy call on a stock only when I'm fully convinced on the stock.
Mr. Pradesh, you know, coming back to you and we're talking about, you know, infrastructure and how we're going to be developing going forward and being more climate conscious and our infrastructure being more, you know, climate conscious, climate intelligent. Now, the question comes about costs obviously and you know a green development or being sensitive to the environment and but developing at the same time. It raises concerns about how you know this will be a lot more expensive and how you know so how do we reconcile sustainability with cost and competitiveness especially in a fast growing economy like ours.
You know, by the time this panel finishes, you guys will be convinced that this person knows probably the least because you put 20 people into a room and you ask them that what is the biggest challenge to ensuring the greening of infrastructure. 19 out of the 20, that's provided I'm in the room, 19 out of the 20 will say it's money. They are not wrong but very unfortunately the way it has been projected it has become a green versus a non-green dialogue and I think there is a big dichotomy there it does not need to be framed like this and I'll give you two examples one from well my childhood days but the other from the WTO days I spent 25 years with the world trade organization and we wanted to modernize the border transit procedures between countries that did not have access to the sea and therefore ports and their goods for exports had to move through the borders of another country where those goods were not meant to be used or imported into. The absolute for years on the answer that was given to us we can't do this because modernization of the trade facilitation border measures requires money. But the point was that once done, it repaid the cost within such a small period. Why? Because you had and I'm talking about global cost, not necessarily the cost of the country which put in it. Suppose you had a truck which was waiting there for a week before it could get cleared. Suppose you had people there who simply because the trucks were waiting you had to have security guards there. Then there were lots of additional expenditures which got so easily cut. So very often it is true green infrastructure the greening of anything will require definitely will require more upfront costs but you will get the benefit of it very very quickly. And if I really want to drive home the point, I know it's not the best example and apologies I keep breaking into occasional Hindi perhaps because for 25 years I couldn't use as much Hindi in Switzerland. There was one thing which you know and again I repeat with apologies it's not the best example but I'll still use it. As a growing up child, we were told I don't know if you guys have heard of it or not, but literally, trust me, this holds for green infrastructure. You might end up spending more money initially. Not only will your cost will recover quicker, but very importantly, if you now look at it as an economic issue, don't look at it as a sustainability issue, look at it as an economic issue. And if you look globally where things are going then certainly the entire concept of value chains will get linked to sustainability and if you've got sustainable green and intelligent infrastructure which is transporting what you're producing to where it is to be exported to trust me it'll be a huge boon. So yes, it is a cost but it a cost we'll bear and a cost that we'll very soon recover.
Right. I think the English saying would be pennywise pound foolish perhaps.
Even better. Miss Nen, if there's something you'd like to add to that and also the role of multilateral bodies in catalyzing green standards adoption, you know, beyond what you're already doing, advocacy and what sort of technical and financial instruments does UNEP deploy in emerging economies like India?
Completely echo what Shishi G said it's finance, it's critical as well. You know, I think India's investment needs are huge and it's a big challenge. But coming to your question, advocacy is just one aspect. The secretary general about two years back laid the road map for UNEP on climate action and that was you look at climate science support that protect the vulnerable especially workers and women and lastly enable a switch to clean energy and that's what we work towards. So we help a lot of subnational and local governments that is cities and municipalities in establishing the climate science which is basically the evidence for a further action that is research for example we did recently with in the city of Chennai. We spent one year in understanding the urban heat patterns of the city and we work with some of the leading research institutions in India public and private but also global institutions. So you know establishing the evidence and presenting it to the stakeholders is very critical. Secondly and not just UNEP but even other players in this sector. We are looking at helping the government test innovative solutions whether they are in the test labs or they're ready for commercialization or in early commercialization state. It's very very important to boost the confidence of the users to be able to use these solutions that we have already. And we spend a lot of time very recently we worked with the government of Maharashtra to ensure that they have some innovative solutions for cooling in housing under Pradhanri Aasioja and it helped them to the extent that they have scaled up and adopted it across all their new upcoming projects. So that is very critical and that is something that we do a lot capacity building training of all formats and also financing mechanisms. So we are trying to see how we can converge CSR funding, unlock international climate adaptation funds for India that targeting and unlocking adaptation funds which are available through various multilateral bodies is very very critical especially to set up the models and also we are trying to work to unlock business models with the private sector whether it's on impact investment or is it on pay as you go pay for your services models we are trying all of these and advocacy then comes once you have set the examples once you have proven the concept that is when advocacy comes in.
Right and if you can tell us more about adaptation and also when we're talking about these 400 million people are going to shift to cities and how our cities have to develop is there any way we can prevent that from happening using green infrastructure in rural areas or making sure that there is no need for them to make that shift to urban India.
So in terms of global climate adaptation funds, there are multiple which are available to countries like India, prominent being GEF, the global environment facility which helps bring in funds as grants as well. But also as credit lines that can be used by all kinds of actors from you know the national government to the subnational government and to cities and so on and so forth. It is just that you have to prove the scalability and replicability of your solution and that is where I think you would also be aware that cities and you know all those who are involved face the problem they're unable to always prove the scalability and replicability of the solution and no investor wants to invest in something which does not have a long-term future and a good bottom line you know whether it is green or blue infrastructure or whatever so that becomes very very critical. And in terms of training and other things and advocacy we build further on that after that.
Well, thank you so much and lots to think about I hope when we talk about you know green infrastructure and how we want to develop how we want the country and the cities to develop going forward. Thank you so much all in a big round of applause please for the panelists.
Most important and you have to be bullish when actually markets are bad. In bullish market to be bullish is not a big deal.
Should we look at blue chips with the same awe that we used to? So even if you have the bluest of blue chip and if the valuations are upwards of 50, 60 times and the companies are glorifyingly growing at 5%. Just run.
The argument is being made that because of geopolitical factors etc. valuable companies in India are available at rates they haven't been for several years.
That is what you should have independent mind. Market is going this side left side you should go right side.
By what logic am I going to sit there and talk to JetRebel and believe that the world is going to move to cloud kitchens as a word hadn't even been defined yet. Ajit Feno furniture rental. We gave him $6 million. He took $4.5 million of that and bought wood and nails and started making furniture. Most companies we give money to turn around and give the money to Google and Meta and start buying advertising. But the chaos that we live in here on a day-to-day basis enables so much great opportunity.
You've been on both sides of the table, right? Asking for funds and then giving them out as well.
Friend of mine and I had an idea that let's build a digital music business. And this is pre forget iPhone, pre iPods, right? So, and you talk about timing and the importance of that. We were so early.
There's no real compulsion for you having to come to India and start a business here.
And if my job at IA was find new opportunities for us to leverage what we know to build look why don't we go build everything we own. So in June 2005 again not knowing anything about anything I moved to India with a Blackberry, a laptop, a sample term sheet, sample diligence book and they said good luck. Call us if you find anything.
Talk to me about Danzo. We weren't the right investor for something like Quickcommerce. I would say Danzo did an amazing job as being a brand that people loved. Really did a great job of creating a brand. They did a bad job of thinking about the economics of the business.
Hi, I'm Tamana. Watch me on NDTV Profit where I break down the day's biggest business stories. What happened? Why it matters and what it means for your money.
Hi, I'm Nidat Sha. Watch me on NDTV Profit for the most incisive market intelligence and meaningful corporate conversation.
And I'm Alex Matthew. Markets, mutual funds, insurance, personal finance. I help you cut through the noise and make smarter financial choices. And here's where you can watch us.
He has been tracking markets for over a decade, spots the trends before they hit the screen. And he is now bringing his analysis to the show that the market watches. Watch Shad Dubet on Know Your Company. A show that puts the most traded stocks under the scanner. We dissect the company so that you, the investor, don't have to get the management to answer questions relevant to you. Watch Know Your Company weekdays at 11:30 a.m. to understand your next big bet.
New year, new power panel, India market open, now in its boldest lineup. This is where the trends get tested and stocks get conviction.
I'll recommend a buy call on a stock only when I'm fully convinced on the stock.
With a tickle a big buy.
And when the street wants the levels, he brings the chart. Charts speak the truth and I deliver the levels with no frills.
Parag Takar and Kosh Bhora are now part of the morning crew with the Mana.
Hello and welcome to Voice presents the great business story transforming India in association with NDTV Profit. I'm Nut Alvar Suri. As artificial intelligence reshapes industries worldwide, companies are rethinking how products, infrastructure, and entire ecosystems are designed. Vessel Systems is driving this transformation with its 3D universe, combining AI and virtual twin technologies to power the next phase of industrial innovation. And joining us today on our broadcast is Deepak Eng. He's the managing director of Desau India. Hi Deepak, great to have you here. How does our system see platforms and digital ecosystems shaping the future of industries not just in India but across the world?
So you look at India the way the growth what we are seeing in India be it be the GDP what we are talking and we being going to be soon the third largest economy. So this requires definitely one element is nothing but the technology what we are going to leverage for supporting industries. So this is where do systems not only helping in India but globally helping organizations through our virtual twin experiences the 3D universes to ensure that the technology is leveraged in their daily day-to-day activities to build right products and right solutions.
Right. And specifically in India you've been here for about four decades or so. So how has that panned out and how have you helped industries grow to where they are today?
So over the period of last 40 years the different generations has evolved in actually positioning this application in an enhanced way for organizations to leverage more and more then followed by not only the end object but can I actually associate with other elements which is nothing but project management product data management that's the reason where do systems coin the PLM product life cycle management followed by multiple levels of improvement today we talk about 3D universes and virtual twins.
Now in the AI era, is AI truly embedded at the platform's core or is it more of an enhancement in a layered sort of setup?
DO systems was involved or is involved and continue to get involved with most of our customers or all the customers in terms of helping them to create their IPs. Now the applications or the solutions what we actually do or what we offer them helping them to innovate further. This is where we have our Katya is the design application. Similia is the simulation application manufacturing execution system and logistics and all happening with our the digital manufacturing solutions and also helping end customers to do that. All these applications actually layered in one single platform which we call it as 3D experience platform and this platform embedded with AI which is integral part of it. Now this platform is not new. It's been there from last 15 years and all our customers are leveraging it. Now we have embedded our AI companions to ensure that we are helping our customers to do their job more faster and help them to innovate further.
How does the designing solution meet very different needs that each sector has?
We have actually created our industry solutions what we call the applications are actually embedded with the knowledge knowhow the templates of each industry what we serve. So if I have to give you a count, we support 61 different segments like it can be energy and materials industry within energy and metal industry you have multiple segments. You have high-tech industry. Within high-tech industry, you have multiple segments like semiconductor, data center. Then you have wide goods manufacturing company and as you rightly said in life sciences you have personalized patient care, medical devices and then pharmaceutical companies and in manufacturing you have automotive, aerospace, consumer package goods and many more. So all these industries and all these segments what we do is we have created industry solution experiences. That means we understand what does it take an organization to create their end object. So the end object is nothing but the product what they offer like what you said different industries right. So for those end objects we actually have curated solutions catering it different level in their value chain. So as be it be design, manufacturing, simulation that means as an organization if I get these solutions I can actually use right applications in their designing stage, manufacturing stage and simulate and see what the product is behaving before it gets manufactured. So that means our solutions are ready with industry specific requirements.
Now we have programs like the make in India, the designing in India which the government is very focused on. But how do you see DAW at the center of all this?
Our applications and softwares were used extensively for design and simulation for many many years. Now we started to see the progress in India. The more spent on research is happening the more innovative ideas which actually kind of was more of like you know vision is getting converted and to support all this do systems virtual twin experience is actually fitting very apt for that. Now you touch upon a very important topic which is manufacturing. Now for that we hear a lot like you know most of the companies are expanding to set up their new plants new increasing their capacities. So this is where our manufacturing solutions are actually taking shape. So we have seen a tremendous progress from last 6 years on the investments both from the companies on their new manufacturing setups from us providing the right solution for their manufacturing execution system logistics operations and planning. This is where do systems is actually helping to connect your design manufacturing and put together build a virtual twin for them to leverage the AI when it comes to adopting it.
Now earlier when we were talking Deepak you told us about something that's very interesting that's AI companions. Now in simple terms what does this mean? How are they different from generative AI tools that essentially are dominating the market today?
You take any action whether it is in engineering or research or even your creation of the datas. So today we talk about the agents helping them to create right it can give you the answer but it will not have the right IP I mean whatever IP you have it will not capture and then process it. So what do systems has done we were fortunate with more than 400,000 customers globally leveraging our technology on applications and also 3D experience platform we know the knowledge knowhow we know their knowledge knowhow so we have created three virtual companions. One is called Aura which takes care in our 3D experience platform crawls across your IP or your data organization help you to build dashboards help you in collaboration to work faster because it's nothing but an agent which is supporting you to do that activity. Then we have Leo. Leo is engineer. There is a element of research also right you have to have continuous innovation. Maybe for example if I say I want to build this product or a component with a new material which is more sustainable because we talk a lot of topics on sustainability less carbon footprint. So now we have marry a virtual assistant which actually tells you a component looks nice. Now if I change this material what will be the implication? It will automatically perform all the actions whether the component actually has a right strength the stress analysis then assembly sequence. It does everything after creating through virtual companion and gives you the result much faster. So it is very well embedded in our applications.
All right. Now as AI and twin technologies actually mature, what are the three biggest disruptions that you see and give us a sense over the next decade or so what will those disruptions look like?
According to me in our area which I have to talk about in next decade or so having everything in the virtual world will be mandatory for example because the business also talks about that there is close to around 12 billion market for creating virtual twins alone in next 5 to 6 years. That means in 10 years it's going to be more. So that means the world is going to have the replica of the world in a virtual world for simulating and then creating for the better life. This is one thing which I can see in next 10 years what things may happen. Once you have that there are endless possibilities your simulations will be faster. Your smart cities will become more smarter. Then you know how to communicate and what kind of new designs you need to put in. It will help to simulate these kind of high level innovation where you never know you may be flying an aircraft passenger sitting without a pilot.
Tell us a bit more about your personal story as well because every leader who leads an organization brings with him certain core values and certain stories that he actually grew up with. So tell us a bit more about yourself.
I'm from Mysore and then I did my specialization in tool and die making where it's a practical oriented course I should say 6 years 5 and a half years of college in a shop floor. The education journey which helped me to become a little stronger in terms of interacting with customers and always I had a passion in terms of meeting people knowing them I mean that kind of nature helped me to get a right job which is nothing but sales. So I joined DO systems in 2011 and in 2020 I took over as a managing director of Daso systems. So overall for me personally at every stage I believe in learning learning something new and more importantly everything is fine but I am a people person so I like my colleagues I like the way with I interact them the way with I communicate with them because at do systems India we are fortunate that we are growing on higher double digit from last 5 years. So this can only happen when you have a right team in place and right growth mindset in place. This can happen when you work as one team and then one group and I've been fortunate to interact with them like a colleague and then see where all we can actually add value together to help our customers and help do the systems globally as well.
Adep it's been a very insightful conversation. Thank you very much for joining us on NV.
Thank you. It was pleasure.
Most important and you have to be bullish when actually markets are bad. In bullish market to be bullish is not a big deal.
Should we look at blue chips with the same awe that we used to? So even if you have the bluest of blue chip and if the valuations are upwards of 50, 60 times and the companies are glorifyingly growing at 5%. Just run.
The argument is being made that because of geopolitical factors etc. valuable companies in India are available at rates they haven't been for several years.
That is what you should have independent mind. Market is going this side left side you should go right side.
By what logic am I going to sit there and talk to Jibet rebel and believe that the world is going to move to cloud kitchens as a word hadn't even been defined yet. Ajit feno furniture rental. We gave him $6 million. He took $4.5 million of that and bought wood and nails and started making furniture. Most companies we give money to turn around and give the money to Google and Meta and start buying advertising. But the chaos that we live in here on a day-to-day basis enables so much great opportunity.
You've been on both sides of the table, right? Asking for funds and then giving them out as well.
Friend of mine and I had an idea that let's build a digital music business. And this is pre forget iPhone, pre iPods, right? So, and you talk about timing and the importance of that. We were so early.
There's no real compulsion for you having to come to India and start a business here.
And if my job at IA was find new opportunities for us to leverage what we know to build look why don't we go build everything we own. So in June 2005 again not knowing anything about anything I moved to India with a Blackberry a laptop a sample term sheet sample diligence book and they said good luck call us if you find anything.
Talk to me about Danzo. We weren't the right investor for something like Quickcommerce. I would say Danzo did an amazing job as being a brand that people loved. Really did a great job of creating a brand. They did a bad job of thinking about the economics of the business.
Hi, I'm Tamana. Watch me on NDTV Profit where I break down the day's biggest business stories. What happened? Why it matters and what it means for your money.
Hi, I'm Ned Sha. Watch me on NDTV Profit for the most incisive market intelligence and meaningful corporate conversation.
And I'm Alex Matthew. Markets, mutual funds, insurance, personal finance. I help you cut through the noise and make smarter financial choices. And here's where you can watch us.
He has been tracking markets for over a decade, spots the trends before they hit the screen and he is now bringing his analysis to the show that the market watches.
Hello and welcome to VoiceW presents the great business story transforming India in association with NDTV profit. From a bold vision in 1986 to a global presence today, Balaji Railroad Systems Private Limited has helped shape the future of rail infrastructure. What began as a railway consultancy in India has grown into a trusted engineering partner delivering complex railway, metro and transportation projects across the world. Today I have with me three formidable gentlemen. First up we have Sunil Shvastav MD. Thank you so much for joining us today.
Then Manuranjan Pashad, director corporate affairs. Thank you so much for joining us.
And finally V. Ramak Krishnan, director strategy. So Barcel started in 1986 and what was the dream behind starting this company and for someone who doesn't know what would you say Barcel actually does in a railway or a metro project?
The founders of Barcel had spent all their professional life working for the railways. So post retirement they only thought it fit to contribute back to the industry by providing professional advice advisory services to mainly users of the railway system which could be the infrastructure organizations like ports, mining companies and power plants and that's how the whole Barcel came into being. So that was the founders's vision. We are on the project railway project we are read from the planning stage to the entire life cycle of the project or the railway system we are associated. So our work starts normally in the planning stage in terms of conceptualizing a particular railway system assisting in feasibility options looking at technology options then we get into the actual engineering part of it if it's kind of feasible then we do the engineering we help the client in procurement we help them in identifying contractors and then we take up the supervision part of it till the train starts running. So the next part is much more important because you also need to make it sure that it's running safely, it's running efficiently and is a sustainable system. So that is where planning for the operation and maintenance is where we come in. So our whole our job is literally not over till the railway system is surviving. So that's what we do.
Vir Krishnan sir, you've completed over a thousand projects, right? And what would you say are your top three or four standout ones that make you really proud?
Probably you know all of you would remember the latest one which Prime Minister Modi inaugurated last year that is Bombay Railway vertical lift bridge and we were the project management consultants for this. About 72 m in length. It lifts up 22 m so that the large ships can pass through. It's on the sea. That makes it even more rather difficult. I move on to the next one which I think every one of you would have heard about in the last few years. Vande Bharat and probably which you may not know is Vande Bharat has a manufacturing facility which was set up in Lur Maharashtra with a Russian collaboration. Barcel was the sole project consultant for this.
Let me deep dive or dive straight into the key aspects of the full year financial FY26 performance. We had estimated a system credit growth to be around 10-12 to 11-12%. We did 12% up from 5.4% last year. As you can see there is a positive momentum as we had expected. Deposit growth at 14.44% continues to grow faster than credit which is what we have always been doing. The growth rate is better than the system growth rate yet again. Net income growth clocked at 11%. EPS growth of 10% versus 3% last year. The ROA continued to be stable at 1.9% due to efficiencies from declining cost to income ratios and a focus on quality growth reflecting in lower credit costs. We would like to remind the sizable investments we have made over the last five to six years which will bear fruit in the coming years. These investments were despite significant witnessing significant events like co complex and one of the largest mergers in corporate history. Distribution nearly doubled to 9,700 branches. The number of customers nearly doubled to over 100 million customers. Our tech investments more than quadruple to around a billion dollars. The merger with mortgage company HDFC Limited is an investment for the future. The bank navigated the same in a stable manner and over the last 3 years despite changing economic outlook and regulatory stance. The above is going to provide operating leverage in future. Sometimes all of us have short memories and forget the core business foundation which remains our mort and strength. Customers at 100 million and we continue to acquire about 6 to 8 million customers per annum. This will be the funnel for future growth. Almost about 42% of our customers are less than 40 years of age. Thus enabling us an opportunity to engage through their life cycle which would be the future engine of growth. We continue to be market leaders in our core franchise offerings. Our modes such as cash management especially in the capital market segment where 35 to 40% of our account settlement is with us almost 40 to 50% of the bankers to issue escort settlements are with us almost 18 to 20% of exports go through the bank about 13 to 15% of the country's imports go through the bank 35 to 36% of credit cards are acquired on our terminals. We have almost about 22 to 22% of the credit card issuances of the market with us. The almost about 26 to 28% of credit card spends in the market are with us. We have dominant salary relationships in most of the private sector corporations. We are amongst the top two MSME banks in the country amongst the top two mortgage banks in the country. We are the top wheels bank which is auto and transportation business in the country. The above despite intense competitive environment for a long period of time reflects excellence in execution capability of the bank.
Let me just recount some of the strengths of our financial parameters. We have a strong capital position at about 19.7%. Our asset quality has been healthy for a long period of time over three decades of business cycles. Currently, our gross NPA is just about 1.15%. The bank has been creating large provisioning buffers enough to absorb any shocks or future shocks that may arise at any point in time due to any certain unscheduled events. We have almost about 125 basis points of our total book which are these provisioning buffers. The loan deposit ratio is not a constraint at all. The regulator has come out and talked about it. We have demonstrated our ability to gain market share on deposits every year. In fact, for the last 5 years, we've gained about 30 to 50 basis points over the last 5 years. Hence funding is no more a binding constraint. In fact, we have been building granular and sustainable deposit franchise which is reflected thus you know if you were to define granular as less than 3 crore time deposits almost we have moved from a 31% of the net incremental inflows of total deposits in FY25 to a 47% of net inflows in FY26. That shows how we are focusing on granular and sustainable buildup of deposit franchise. Of course, having said that the bank will continue to improve its quality of deposit franchise and especially on the current and savings accounts as well in future. In fact, all of you know that we witnessed a very unprecedented event in March recently. But its strength and resilience was seen with stable and strong deposit flows. Of course, it is also helped us by the kind of unequivocal statements that the government of India, the Reserve Bank of India and SEBI came out with it and we are grateful and thankful to them.
But our most important strength which is something that we'll be harnessing in future is going to be our leadership in the technology space. We have been focusing on building each of the three or four layers. The first one being our modern front end. A large share of our investments have gone through improving the digital front-end experience. We've been focusing on upgrading our acquisition and service journeys. The objective being to have a very seamless experience to our customers. In fact we have launched our new mobile and net banking platforms in the financial year. We have 60 million registered customers on our new net mobile banking. But what we are very excited about is in this age of digital frauds I think we provide one of the most safe and secure mobile platform in the country. It is OTP less authentication. We have a smart lock which is enhanced security where you can lock your funds and investments and we have a kind of a full stack UPI enabled wallet. A combination of that will make your funds minimize the kind of digital fraud that may happen in future. The efforts have increased digital adoption to 97% for payments and service transactions and 92% for acquisition of journeys.
The next layer we've built is the intelligence layer. This is going to be an extremely important one because this is the layer which will make our AI ready first. We have decoupled our front end and backend through this modern API gateway and orchestration layer and like that we have a strong foundation for the emerging agent-driven AI model as well. The fourth one is the backbone the database data backbone. You know AI is only as strong as its data. So we have built a robust data foundation anchored by one single source of truth which is the enterprise customer information file. This is a kind of an information innovation and transformation that the bank has built and it will start to provide a huge amount of benefits in future. We went live with our lakehouse architecture recently and this will be visible while not always visible externally this work is essentially to our long-term scalability and AI aspirations but what I'm extremely excited about is the big story which is where we have built a unified AI platform inhouse. This AI native platform that spans the entire organization allows us to deploy AI agents quickly without building custom interfaces between systems. This will it supports multiple foundation and open models and includes a unified evaluation model for strong governance, compliance and security. The rapid deployment of AI agents at scale will place us among the small group of Indian and global banks with such advanced in-house capabilities. We already have five use cases in production and 14 more in development. The above leadership position will enable us to harness efficiencies across the organization and will be a key driver to enhance return on asset over the next 1, 2, 3 years. Our guiding principle is return on assets, loan growth and deposit growth and quality of the balance sheet from a risk perspective. All of it should culminate in a consistent earnings per share growth which is going to be the anchor for all of us to look out for.
I know a lot of you have been keen to know some of the other matters that arose during the month. So let me also take on the subject matter relating to the resignation of former part-time chairman and the Dubai branch related matter. As all of you are aware I and the members of the board did provide statements both the 18th March 2026 event. The government of India the Reserve Bank of India and the SEBI came out with statements in favor of the bank. The legal review is in process. As and when this happens, we shall provide a summary of the same. The audited financial statements of the bank for the year ended March 26, which was just released today carry notes which are self-explanatory. On the Dubai branch related matter, the same has been covered in the notes to accounts as well. There is an event which has happened post the 18th of March on 23rd of March 2026. The NCDRC order was also released that the order highlights that the complainants were not retail or not uninformed investors and they had a clear intent to pursue high yield high-risk investment products. So I do not know whether we would have any further update that can be provided about two subject matters. So I think I have covered most of what I had to say. I would now request the question and answers from all of you all. Thank you so much.
Thank you very much.
Please open up for questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press R and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press R and two. Participants are requested to use handsets while asking a question. Please note participants are requested to restrict to two questions per participant and kindly join the queue for a followup. The first question is from P. Shukla from NDTV Prophet. Please go ahead.
Good evening. Mr. Jagishan, thank you for attending the call. I have two specific queries with regard to you mentioned how the legal review of the resignation by former MD spending but what markets were also eyeing was whether the bank's board will go ahead and apply with the Reserve Bank of India for a reappointment of your tenure which I believe ends later towards this calendar year. Can you provide us some clarity Mr. Jagdishan whether you are keen on continuing with the bank and what is the board's view on this particular matter and I also wanted to understand that you have posted above average above industry average deposit growth in the FY26 till now your guidance was that next year you will outpace banking industry in terms of loan growth and deposit growth you will post higher than industry standard what can we expect now upwards of 12-13% sort of a credit growth and 14% the stable sort of a loan growth and deposit growth in FY27 and any color on margin sir if you could help us understand when will you reach that 4% figure so it has been static it has been stable at around 3.4% 4% between the last quarter and this quarter.
A lot of questions are being asked but I will let my colleague because it's pertaining to me. Let my colleague Kaiz sort of respond to one of the questions of many many more. Let me respond to your first question and then I'll request Shini to respond to the balance as I got your question with regard to the reappointment of Sashi Jagdishan. The NRC and the board is completely seized of the matter and this will be taken up in due course as the necessary process would require. So let me assure you that this is a matter which is engaging the NRC and the board.
Let me take the others and maybe I'll have my colleagues supplement it wherever needed. You spoke about the growth expectations if you just notice we had given a kind of a glide path in the past and if you look at it we have grown our advances to about 12% up from 5.4% 4%. So I reiterate the positive momentum is on. Now obviously you are all looking out or fishing for a number with obviously with a lot of uncertainties in the horizon especially on what's happening in West Asia. I would rather prefer to say that we would I think the trajectory is in the right path in terms of positive momentum and we shall calibrate that as we get more clarity from the macro indicators over a period of time. As regards the deposit growth I think we have adequately demonstrated for quite some time that deposit franchise is very solid and resilient. We have always ensure that the deposit growth is much much higher than the loan growth. I think that speaks about our thought process. Three is the quality obviously you can define quality in two ways. One is in terms of how is your retail composition or granular and sustainable composition which is where we have always maintained around 82 to 85% of our deposits in retail. And that continues to be the kind of proportion that we have been witnessing for a very very long time. And within that if you notice the system has been focusing more and more on sustainable deposits and one of the indicators that we see is the you know if the less than 3 crore deposit ticket size which is supposed to be very granular from our perspective that proportion has grown from 31% of the total inflows net inflows that happen in FY25 to about 47%.
In FY26, the other aspect which I'm sure all of us are focused on is the low-cost current and savings. I think we have done reasonably well in terms of growth this year as compared to last year, but we don't have visibility of our incremental deposit market share on the current and savings because we do not have industry numbers as of now. It'll take a bit of a lag before we get the industry numbers, but our endeavor is to focus more on that over the next one, two, three years, and you will start to see that progressively moving up. So we do have strategies around that, and that should enhance and enrich our deposit franchise even further. Margins. Ashwini, you want to comment on the margins part of it in terms of trajectory?
So one is that the policy rate transmission on the asset side is largely there, and both the magnitude of the change comes in a relatively short period of time. Similarly, the policy rate transmission on the funding cost, which is the deposits and other effects, there's a lag effect on that, and it is dependent upon various market dynamics, available liquidity in the market, customer choices, external effects, influences, and so on. So the NIM trajectory can be rangebound up or down in a shorter time period, but over a longer time period, we expect it to be stable to moving because of the opportunity space and the cost of funds that we have. However, as we focus on margins, it is about the returns. Wherever there is margin resiliency or up and down that happens, we have that space both from a cost and credit point of view to focus on the returns, and that is how our pricing models work to get optimized returns, not necessarily optimized line items. So at the end, it is about the returns, and that is the focus which we have.
To add to what Ashwini is saying, if you look at the financial year FY26 on a full-year basis, the margins have actually dropped, and that is something that he's already explained because of the faster transmission downwards on the asset yields and the deposit rates have actually lagged that transmission. But yet our return on assets continue to be stable in a 1.9% range. And that is what he's trying to say because we have juiced our efficiencies both from an operating cost level and also from the quality growth in assets which has led to a lower credit cost as well.
Next question is from the line of Akta Suri from Z Business. Please go ahead.
I'll translate my question in English also. I'm saying that as soon as the news about your AT1 bonds misselling in Dubai happened, there were constantly news and cases posted on LinkedIn and social media also where banks are, at your branch level also, there has been misselling to an extent that customers are being told that if you want a loan, you have to buy an insurance. And when told that this is not an RBI rule, they're saying that okay, then go to RBI and get the loan only. So basically, not just at Dubai level, at Indian branch level also in India there are cases of misselling, bad customer service. So what is the bank trying to do to improve that?
No, thank you for asking this question. I think there is a certain wrong perception about the way we sell our third-party products. I think we are probably one of the pioneers in the kind of guardrails that we have introduced in the sale of such products way back as 2015 and 16. And if you see some of the processes that we have laid out, it includes a pre-verification, including a geo-tagging checks and confirmation on the video whether the customers understood the product, etc., so that it's not a coercion or coercive sales. So that's part one. Part two is we do have product guardrails in terms of which are the segments that we will not sell to. We have a clear definition of the exclusions that we have where we don't sell to marginal segments or we don't sell to the senior citizens beyond a certain age. Our processes are rather robust, and I think at some point in time we shall publish some of these in the public domain. But you can probably check it out from the CP grants or the public website on the insurance sale, of which we are probably one of the lowest. And I think maybe a subset of that is what will be pertaining to HDFC Bank, and even more from a misselling perspective, I think we are one of the lowest. But I can assure you that at some point in time, considering the fact that you raised these kind of questions, we shall be publishing it in the public domain. It's very important to correct this perception. And of course, we are not perfect because we deal with about 215,000 people across 9,689 branches in the country in 4,000 towns. Sometimes there will be some amount of exuberance from these people, but we do address them rather swiftly and very sternly if at all there is any event of misselling. But frankly, if you look at the last 10, 11 years of data, the actual data shows a completely different picture, which is we don't see any kind of a malaise in our intent or even in terms of the actual execution of that particular process. So let me stop out there. I think some of these are anecdotal references which come on. I think one of the learnings that I take away from this is to probably get into some of the responses from some of the questions on these or the references on these social media in a far more intense way. Thank you.
May I ask my second question?
Sir, I know you just mentioned that your reappointment will be taken up and there'll be a due course. So is there any meeting that we can keep a track of regarding the news, when will it be discussed, which board meet, when by NRC?
No, I think there is a timeline within which we are to have this process completed, and as we move forward, there are certain disclosures that we would be required to make, and when we make those disclosures, it will be available to all of you.
Thank you very much. I'll request to come back for a follow-up question. Next question is from the line of Ritu Singh from CNBC. Please go ahead.
Mr. Jagdishan, it's a welcome change to have you address the media. I think it's the first time since you've taken charge as the CEO that you're addressing us on an earnings call. If I may start by asking about that, what drove that change? And secondly, since you spoke about the Dubai matter in some detail, you referred to the court ruling which, from our understanding, purely deals with the subject of jurisdiction. Besides that, in terms of the action taken by the banks, we understand about 16 employees, past and present, were taken action on in some form or the other. Would you now be able to say that the matter is closed, that the action that the bank had to take has been completed? And any timeline you could give us on the legal review as far as the former chairman's exit is concerned, any update on that front?
So on the first question, obviously, our philosophy has been that we always listen to our customers and stakeholders. So I have listened to you all, and that's one of the reasons why I'm doing this. So thank you for that. But it does not mean that I will get on to this so-called interaction on an ongoing basis. I thought this is a full-year FY26 event, which is a full-year event, and it was appropriate for me to come here at this juncture. And probably, of course, it had also some certain events which had happened in the recent past. So it was important for me to provide that kind of visibility as well. On the second aspect of it, on the NCDRC matter, you're right. One of the first things that they talk about is jurisdiction, that India is not the jurisdiction for that complaint, and it has to move to the overseas jurisdiction where the event had happened. But having said that, they go on to spell out there because they have the entire history of the case of the complaint, and therefore it was very interesting for us to see, I think if I'm not mistaken, between clause 46 and 66 of the order. And if you really look at it, it's sort of, I had just summarized it to say that which highlights, which is what I said in my opening remark, that the complainants were not retail or uninformed investors, and they had clear intent to pursue high-yield, high-risk investment products. And of course, it goes on to say a lot more things, but I've just summarized into a small statement. So maybe you may want to look at that aspect as well.
That is on the chairman's exit, when the legal review would be completed, and that Mr. Keki Mistry's appointment is only for a three-month term. How soon will we be hearing of the bank's decision?
No, even on the legal review, as I had mentioned, this is in progress. Obviously, the volume of data that the council have to go through is rather voluminous, and that's why probably it's taking time. But as and when it sort of comes out, I think the bank will come into the open to provide a summary of the same. Frankly, I don't have visibility of when that's going to get over, but I wouldn't say it's going to take too long. At the same time, I'm not sort of expecting too short a period as well. As regards the chairman appointment, as I had mentioned in the previous calls, both Kaizad and I were there, we are all rooting for Mr. Keki Mistry for the post. But of course, we do believe that there are certain processes that we need to conclude before we can even put forth for the deliberations in the NRC and at the board, and before we can provide recommendations to the regulator. I think that process we do have sufficient time for that, but it's in progress, and the board, as Kaizad was mentioning, like in my matter, they are seized of this matter, and this will be taken up in due course.
Thank you very much. Requested to come back for a follow-up question. Request to all the participants, kindly limit yourself to two questions per participant. Next question is from Nina from Bloomberg. Please go ahead.
Yes, ma'am. Yes, please, you are.
Hi, I just wanted a clarification regarding your previous statement. You said that the board and NRC both would root for Mr. Keki Mistry to continue as chairman beyond the three-month period that's been granted. Am I correct in assuming that?
No, let me sort of clarify that. I think the two whole-time directors, which is Kaizad and I, are rooting for it, but obviously the board will take its own decision. The committee and the board will take its rather collective decision, taking into account all matters of fact that are available from a regulatory perspective, and then basis that, I think they will recommend the right name to the regulator as well. It could be Mr. Keki Mistry. It could be anyone else.
Okay. My second question relates to the forex impact on your treasury book because of the RBI measures. What is the kind of impact that you all have seen on your book, especially from the treasury income side, from the entire forex regulatory order that the RBI put out recently?
So, you know, this number is not in the public domain, but there has been an impact. There's been a part impact up to March, and there will be a small impact up to the 7th of April as well. But that's not anything too significant for us to put it up as a separate disclosure. It's already subsumed in the financials, and a part of it is reflected in a slightly tepid revenue growth in the forex income for the full year.
Next question is from Saloni Shukla from the Economic Times. Please go ahead.
Yeah, good evening, sir. So just to get some sense on the advances growth, so while you've said that you will grow in line with the industry this year and then from next year upwards from there, the retail growth versus business banking and corporate has been rather tepid. So could you give some color on that? That would be my first question. And my second question, sir, is that last month you had indicated during the analyst call and through a media interview with us that you want Mr. Barucha to take a much wider role and you will also be doing some reshuffling of the top management. So if you could give some sense on where that has progressed. Thank you so much.
So, I'll request Kaizad to talk about the asset part of it because he handles that. So let me first deal with that. I think if you really look at the growth numbers that we have put out in the pack that has been sent, you will see that we have accelerated from where we were last year in terms of our retail asset growth. Specifically, we have seen good traction across our retail assets in the last three quarters, starting from the quarter ended September to December to the recently completed quarter in March. We continue to have one of the highest disbursements that we have done in the mortgage business. We continue to be amongst the leaders in the auto loan business, and we are very much in line with our disbursements in the unsecured business between PL and BL. If you also see our business banking, which comes in the MSME space and is part of the mid-market consumer bank, we have grown our book by 20%. And in the MSME space today, we are number one in the country in 15 states and amongst the top two in 25 states. So that tells you the kind of positive momentum and traction that we have seen come back in the retail book across the wheels business, across the mortgages business, as well as on the personal and business loan side. We've also seen a fair amount of growth in the commercial vehicle segment. However, the value growth has been a little tempered because of the GST cut that was seen in the overall wheels business. So from a disbursement and a unit point of view, we've seen good traction, and we are positive about how we are placed in each of these businesses and how we also continue to see it moving forward. And as regards some of the reorganization, of course, I've done about a couple of times during the last five and a half years. I look out for this. I believe that such changes, restructuring, reorganization at the leadership level provides cross-pollination of knowledge and practices, and it helps in energizing the organization and bolstering leadership depth because that's one of our strengths. We have levels of depth which probably some of you may not have witnessed or may not be visible to you all, but the two of us have a strong visibility of that. As regards Mr. Barucha taking on higher roles, I'm sure you know he's here. You can convince him as well. But having said that, I guess in due course we should be looking at some amount of reorganization. Thank you.
Thank you, Sachin, and great to be here. The oxygen panel is always a good one to be on. Maybe just to start by saying that the whole climate finance agenda can sometimes be anxiety-inducing, but I would say that...
You know, we need to solve the climate finance problem really in our own self-interest. And by that I mean that India is probably the country which is on the one hand the most vulnerable to climate change, and CW and Iradi have done some fantastic work on unpacking that, but we are also the country that probably has the most to gain if we can solve the climate finance problem. In our earlier panels, we talked about the whole energy security issue, but also jobs of the future, economic competitiveness and resilience, resilient cities. So, it's in our self-interest to solve this problem and we should approach it with that mindset and not so much from the old sort of negotiating mindset of what can we get from the international community, so to speak. Number one. Number two, I would just say that I think it is correct that we don't have a money problem. We actually have more like a plumbing problem. A phrase that I learned from Nandan Nilikani and he used to talk about this a lot. But by that what I mean is that there is a lot of capital globally which is interested in investable opportunities including in the climate arena. We need to channelize that capital by providing investable, predictable investment opportunities that make sense for investors. And in that context, and to your point of bottlenecks, I think there are three things. One is just the policy certainty, regulatory unlocks wherever they are missing. Of course, we've done a lot but there's still much to be done and I'm sure we can unpack that a little bit. The second is bankable projects which are ready to invest. You know, it's one thing to say we want money for solar, we want money for this, but where are the projects? Are there enough projects where investors can come in, put in their capital with capital structures that actually make sense? That's the second thing. And then the third is catalytic capital or what some people call blended finance, which is really about using small amounts of public or charitable money to unlock large amounts of commercial capital. And maybe just giving you a very quick example, today we've talked a lot about solar energy, but today a solar plant that is set up in India, say in a state like Rajasthan, has to pay a premium of about 80% in the cost of capital relative to a plant which is set up even in cloudy Germany, right? Which is ironic. And the answer which is offered is, oh, there's perceived risk and perceived risk premium or I would say a risk tax that we have to pay because of currency fluctuations or offtake issues that sometimes arise. And in this situation, if there was an ability to provide de-risking instruments like guarantees or first loss measures or currency hedging, you will see a lot more investors come in, right? So I think this whole notion of catalytic capital to de-risk is what we need to solve. It's the fundamental thing. We can unpack this a little bit more. It's hard but it's doable and if we can do it, I think there's no other country today placed in the world, especially amongst emerging markets, who is poised to benefit from this because we have 6% plus growth in a volatile world. We have an aspiring middle class which is rising. We have 70% of our infrastructure which is still to be built. We are ahead on our Paris targets. So we have everything going for us if we can crack this.
Of course, I'd love to come back to you to unpack this further. But before that, I'll take a question to Dr. Parik. You know, many panelists before us said that if there is policy stability then finance will follow. But my question to you is what kind of regulatory architecture should we have to ensure that all stakeholder priorities are considered and taken into consideration?
Well, India is growing in size of the renewable market and the regulatory system is responding to that. It has developed many innovations over the time compared to earlier and now we have reverse bidding and we have power markets and we have power prices every 15 minutes and there's deviation settlement mechanisms and so on. But I mean, in terms of finance, there's not one pool for finance that is ready to be taken by people or banks or anything. It's the whole system which has to be affordable and that has to go by, first of all, the whole affordability issue is somewhat by, you know, we are aiming for that. For example, LED became affordable by EESL's aggregating techniques, so that they bought millions of bulbs and brought down the prices from 800 rupees to 100 rupees or around that. Similarly, people are not paying for electricity, so politicians' interference is making problems. Banks have to mobilize their green bond situations and so on. So everybody has to, the whole climate has to support it. It's not one organization or the other but the entire system has to move towards affordability and it is being done but gradually and slowly. Now, we thought that okay, we will put up a lot of solar plants and wind power, but now the situation is such that power market shows less than a rupee price during the daytime and nighttime sometimes touches 10 rupees because there is no solar power or sometimes there's no wind power. So we need to even out these things by demand side mechanism. So that's where the consumers come into the picture and this whole field of renewables is, you know, we call it prosumers, means consumers themselves produce energy and they respond and they have to respond to the markets, to the prices and to their own investments and looking for opportunities to participate. And India has also taken care of Surya Ghar so women can participate, farmers can participate through agriculture pumps and so on. So that way, you know, awareness spreads and the consumers are no longer turning switches on and off. They are aware of where their electricity is coming from. Is it green or not? This type of awareness is increasing and we are doing this for our own energy security, our own clean energy. And I must say that it's not just the commitment to global bosses who are now busy bombing the world, but it's more commitment to our own people who need energy security and who need clean air. These commitments are more existential in nature. So we are doing it for our own purposes and security and not to answer people.
Absolutely. Point taken. I'll move to Arjun with the same question, that is, you know, we've spoken about policy stability. We've spoken about the need for innovative finance models, but before that, what is the regulatory architecture that India requires to accelerate green investments?
So I think firstly it's worth acknowledging that India has had considerable success in facilitating the flow of investment. Just as an example, the FDI into renewable energy in FY25 was triple of the pre-pandemic level and this is despite the rupee depreciating by about 20% in that same duration. So it's worth acknowledging that generally the ecosystem that's been created has been quite conducive. Now, based on your question, the regulatory architecture, I mean, ultimately there are various types of financing challenges and I think Vat sort of referred to the bottlenecks that exist. In some cases money is flowing on competitive terms but the scale of financing needed in a short time is so large that conventional sources of debt capital, particularly debt capital because a lot of these investments particularly in clean energy are debt intensive, may not be sufficient. So they maybe need to unlock new sources such as the bond markets, right? To supplement existing debt capital from banks and NBFCs. So in those terms, policy solutions such as credit enhancement in the bond markets. So the honorable finance minister announced in the last year's budget a pass-through credit enhancement facility for corporate infrastructure bonds that is to basically address that specific bottleneck. Right? There may be other types of challenges in the ecosystem through certain sectors. Capital may be flowing on onerous terms because of perceived risks. So there again, certain types of, and this may be because of limited track records of performance, technology performance, sectors such as storage, in some cases electric mobility where the cost of capital may be higher compared to the ICE powered counterpart. So again providing some element of guarantees to establish that track record becomes important. So these are some sorts of specific interventions. From a larger policy and regulatory perspective, it is eventually about accurately pricing in climate risk because we've discussed over the course of various deliberations today, India is one of the most climate vulnerable countries. In fact, CW research says 80% of India's population lives in populations that are in districts that are highly vulnerable to hydrometeorological disasters. So and also intuitively we know that let's say every dollar invested in resilience results in $6 worth of savings or there are various varying figures but effectively what's necessary is the appropriate codification of this in regulation that can help impact the cost of capital. Now financial supervisors both globally as well as in India are at various stages of facilitating this translation between understanding the true value of investments in resilience, the benefits of investments in decarbonization and appropriately pricing those benefits, right? And it is a journey, right? You've had the ESG disclosures by the capital markets regulator, the draft stages disclosures for banks and NBFCs under the RBI for climate-related financial risks. And of course there are various other mechanisms, we talked about the carbon markets as well, basically about appropriately pricing each unit of emissions and every dollar invested in resilience. So ultimately it is a suite of measures that the ultimate objective of which is accurately pricing each unit of emissions that is emitted and the value of each unit of investment in resilience because if this is codified through a structured framework, the cost of capital of investments that currently seems unviable because those benefits are not being factored in may become more lucrative and eventually that may support the flow of capital. So that is from a broader policy and regulatory perspective the types of measures and the direction in which they have to be headed.
Question to Vat. You know, you worked with the executive of this country for some time and therefore I would want you to look to give me this answer from your experience of working with the government. What is that one thing that the government can do now to unlock large inflow of capital?
I wish there was a silver bullet, so instead of saying one, I'll give you two plus one. Two is things which are already happening which just need to be pushed to the next level. These two are a green finance taxonomy for India. I think many of us would have heard of it but I think great work has been done to bring it and it's now been released in the public domain last year. It needs to be now finalized and detailed guidelines by sector issued because taxonomy really determines where investors put their money. The second is the Reserve Bank of India. I think Arjun mentioned this. There's a climate risk information system that the RBI has announced so that banks can get an assessment of the vulnerability of their portfolios to climate risk. That also has to be the next step on that in terms of operationalizing it for the banks has to be done. So these are things I think 90% of the work is done. We just need to push them out of the door. My pet one for this since you asked for one new idea is to have some sort of a national green bank. A green DFI for India and what I mean by this is an institution that can cut across different sectors and focus on doing three things: one, creating an aggregated pipeline of investable projects that investors can look at, decide whether I like it, don't like it, and so ease the process of discovery of pipeline of investable projects. Second, provide the kind of catalytic finance de-risking instruments that I was discussing earlier. You know, so in a certain project, let's say in Tripura, there's a project which has to be done but the risk perception of a northeast state is very high, so can there be a guarantee which can be provided by that bank that allows commercial investors to come in, so some sort of de-risking instruments. And third, to act as an interface between the Indian financial system and the international investors. There are lots of institutions trying to do green finance in India and doing a fantastic job but I think they're all doing it in different domains. NABARD is doing rural green infrastructure, PFC is doing power sector infrastructure. We don't have an integrated development finance institution and a national green bank.
You're talking something like an NIF only for green projects?
For green, yeah. And this is not my idea. This has been suggested quite a lot in the global discourse. Many countries like Brazil, UK have something like this already in place. I think this will accelerate the momentum that we need on the plumbing of climate finance.
Right. You know, I'll open up this panel. I have three related questions and please take your pick as to which one you want to answer. One is straight from what Vat was just mentioning, that is, are emerging markets like India being unfairly benchmarked on ESG standards which were designed in the west for the west. That's the first question. Secondly, can India shape its own frameworks? We know a large part of work on that has been done. I mean, how can we push that? And the third question is how effective are multilateral funds which have been announced from time to time but in reality we only see money just about trickling from there. Whoever wants to take whichever question.
Vat, let me start with you. Yeah. So maybe let me start with the idea of the green DFI because in the Indian policy ecosystem the NITI Aayog just last month suggested the idea of a national green financing institution which is exactly the sort of integrated approach and this can be most effective if it interacts with the existing ecosystem in a complementary manner because there are existing institutions that are already lending. So if it can provide the complementary services such as the aggregation, such as the blended finance, that would facilitate that. In terms of the global discourse, at the UNFCCC there is a concept of CBDR, common but differentiated responsibilities, that sort of acknowledges the fact that globally historically it is the developed countries that have been the major polluters on a per capita basis. So therefore at least on paper there is an acknowledgement that there should be a differential approach towards decarbonization with developed countries supposed, you know, in theory taking a more accelerated pathway to give more breathing room for developing countries. In practice, of course, that doesn't necessarily materialize, but of course, developing countries can credibly claim some additional breathing room given the fact that developed countries have in the past been the major polluters. However, in practice, of course, it is in all our interests to accelerate decarbonization for a variety of economic reasons as well. In this context, while there can be a variety of interventions, one approach potentially, given this is India's, India is taking on the BRICS presidency, is for countries in the global south to sort of come together. So one potential proposal that we had sort of developed last year and submitted to the UNFCCC was the idea of a global south focused green bank, an idea of the NGFI but basically anchored by let's say the BRICS countries. So let's say an AIIB or an NDB where India, China, Brazil have higher representation, teaming up with let's say a GIFT IFSC which is India's international facing finance center, setting up such an institution over there, servicing not just India but a variety of other developing countries. So that helps address the challenges across potentially the BRICS countries, the global south as a whole as well. And finally, in terms of whether the frameworks in India should be different from their counterparts internationally, well, of course, there may be some requirement for bespoke solutions in the Indian context. Broadly, there should be some mapability or interoperability between global ESG frameworks and Indian ones because ultimately what you need is the seamless flow of capital because what you don't want to create is frictions in the flow of international capital into India. So from that perspective while we may have certain frameworks that may be tailored to Indian context there should be some formula for mapping or interoperability, should be aligned to the international framework to facilitate the flow of capital and not create additional barriers.
Absolutely. Not create additional bottlenecks there. You know, large corporations have easy access to capital but what about MSMEs? You know, what should be India's strategy to decarbonize MSMEs? Whoever wants to go first.
So I have two points. One builds on the idea of the green DFI because you know there can be various sort of barriers to small MSMEs accessing capital. There could be the creditworthiness, there could be untested credit history etc. So to some extent the types of guarantees that can be provided by a DFI can facilitate some flow of investment. Right? But that is initial. What should be more durable is a durable business case for MSMEs to participate. Now what can be that durable sort of incentive? One is that MSMEs that are part of global supply chains. Global supply chains like the likes of Toyota or other car manufacturers or any other supply chains themselves have their own decarbonization targets. So what they expect is that their own suppliers and partners including MSMEs also have to embrace decarbonization. So now that opening up opportunities to participate in global supply chains can be the incentive to basically push MSMEs in that direction and complemented by appropriate support through the proposed NGFI where necessary to address specific bottlenecks can give the initial impetus to set the sector in that direction.
Gentlemen and madam, thank you very much for your time, for taking our time and joining us today. Thank you.
Good evening. You're watching Profit 360 with me, Shanti Singh. And over the next few minutes, we'll get you all of the latest updates from within the country as well as across the globe. But first things first, let's quickly take a look at a couple of earnings that have actually come out today. Banking heavyweights, HDFC Bank, and ICICI Bank have reported a healthy set of numbers when you talk about the fourth quarter. In fact, let's go across to P who's waiting by with the fine print when it comes to both of these banks.
A very strong set of numbers by HDFC Bank in their Q4 results. The bank has posted net profit of Rs 19,221 crore in Q4, higher than the estimate of 19,053 crore rupees. Both in terms of margins and asset quality, the bank's performance has improved and the bank's board today also decided to extend a special dividend of Rs 13 per share and said that they will raise up to 60,000 crore rupees via bonds in the next financial year. We also from the management side there are a couple of important commentary coming in which includes firstly the bank's MD, Mr. Jagdishan, saying that the legal review of former bank chairman Mr. Chakraborty's resignation letter is being conducted and will be completed in due course. He also said that the investors who had invested in the bank's AT1 bonds were not of retail nature and everybody was aware what are the risks associated with such high yielding instruments. Mr. Kaizad Bharucha, the HDFC Bank's board member, also said that the process for the reappointment of a new CEO is underway and the bank's NRC is fully seized of that matter both with regard to chairman and CEO appointments. They will be made in due course. Sashidhar Jagdishan also mentioned how the board, in his opinion and Mr. Bharucha's, are rooting for Keki Mistry who was appointed as interim chairman to continue as a full-time chairman of the bank. The bank's CFO, Mr. Srinivasan Vaidyanathan, said that in the long term, bank's margins are likely to be stable or improve and Mr. Jagdishan also alluded to the fact that the investments made in tech over the last 5-year period are now bearing fruits and it will help the bank's ROA to improve in the next two to three years.
Absolutely and thank you so much P for joining us with all of those details. Do stay with us and we'll come back to you when it comes to ICICI Bank. When you take a closer look at HDFC as well in terms of the con-call highlights, it's very important to take a note of what the management then is saying about the CEO reappointment. Let's in fact go across and listen in to what they have to say about this particular reappointment as well.
A question with regard to the reappointment of Sashidhar Jagdishan. The NRC and the board is completely seized of the matter and this will be taken up in due course as the necessary process would require. So let me assure you that this is a matter which is engaging the NRC and the board.
So there you go. That's a word coming in as far as HDFC Bank is concerned. But like I said, good set of numbers as far as ICICI Bank is also concerned. When you talk about the asset quality that in fact has remained steady, healthy profit growth is also what you're looking at. But P is standing by with a detailed fine print when it comes to this one.
ICICI Bank has posted a robust set of Q4 numbers beating the estimates. The bank's Q4 net profit stood at around 13,720 crore as against the analyst estimate of 12,930 crore. The bank also reported improvement in both its margin and in its asset quality as well with lower slippages if we compare it to the last year. The bank's total advances, it's a big highlight, that they grew almost 16% year-on-year to 15.54 lakh crore. These numbers, this sort of a loan growth, double-digit loan growth, we have not seen over the last one or two year period. And the bank's business banking, corporate banking, even rural and retail banking segments have done well in the reporting quarter. Q4 as we understand is the busiest quarter for all the bankers. The bank's deposit also kept pace although the growth was slower than advances at 12%, overall deposits stood at 17.95 lakh crore which provides a comfortable CD ratio to the bank. The bank said it is trying to focus on getting low-cost CASA accounts to its franchise quality customers, customers who will prefer the bank as a primary banking partner. The bank management also said that it saw around 109 crore rupees of trading hit on their other income because the overall the RBI's measures taken with regard to the NDF open ceiling, mandating it at 100 million, and apart from that the overall fall in the bond yields, this cumulatively weighed on the bank's trading income although the hit is not as major as Q3 FY26, the loss was slightly even higher. And finally, the bank said that it does not see material risk to its business because of the West Asia conflict. It says that it is keenly monitoring the development. However, in Q4, it did not really see any material development to its core business metrics because of the West Asia conflict.
Absolutely. And thank you so much P for giving us all of those details when it comes to the earnings fine print as well. But let's also take a closer look in terms of some of the commentary as well coming in from the bank especially when it comes to loans and deposit growth and let's go across and listen into a snippet of the commentary that they had to give about this as well.
Given the overall scenario there has been an immediate impact on market yield which you are aware of. There has been an impact on currency prices and some of this is reflected in the numbers for the Q4. Of course during the Q4 there was a very little period of the West Asian conflict. We will continue to monitor these indicators. The impact on economic growth and potential trade demand will depend on the duration of the conflict. Of course, even RBI's Governor has mentioned that there is some amount of uncertainties on account of supply shock. We do hope things become better sooner. As far as we are concerned we do have a strong balance sheet in terms of liquidity, provisioning, capital and a good technology architecture and we will continue to leverage our franchise and grow within our risk parameters and we will continue to monitor developments across.
There you go, so that's the word coming in from the management. They're not penciling in much of an impact when it comes to the Middle East conflict right now. So that's ICICI Bank for you but it's also Yes Bank that reported a largely stable set of numbers when you talk about the fourth quarter. Of course, the asset quality has improved here also. But let's also go across to Shubha who's standing by with the earnings fine print for this one.
Good set of numbers coming in from Yes Bank for quarter four FY26 and the net interest income of the company has improved by 16% and currently stands at 2,638 crores. Now this growth was aided by reduction in interest, lower interest expense and reduction on cost of deposits. Net interest margin has also gone up by 10 basis points on quarter-on-quarter basis and stood at 2.7% and this was on back of deposit repricing, higher share of CASA and lower high-cost borrowings. Operating profit has also seen a growth of 23% as operational expenses has declined in the growth rate. As a result, PAT has also gone up by 45% and stood at 1,680 crores. Taking a look at the asset quality, it has also improved and the GNPA stood at 1.3% and the NNPA stood at 0.2% on a quarter-on-quarter basis. Now, management has with this met the return on asset and NIM guidance given in the previous quarters. Now taking a look at the key points from the con-call, the bank is aiming for a 13 to 15% of loan growth next year and also the bank has given an objective to improve the return on assets by 25 to 50 basis points over the period of next 2 to 3 years. Also, bank is aiming for a net interest margin of 3.25 to 3.5% over a period of 2 to 3 years.
Absolutely. And thank you so much for joining us with that earnings fine print when it comes to something like a Yes Bank also. So all three of these banks are going to be very important to watch out for on Monday as well. But in terms of something else that you're watching out for, Prime Minister Modi will be addressing the nation at 8:30 p.m. today. There is no confirmation yet on the subject of the address. So that's really triggering speculation on what the PM would be speaking on. But the timing of the address, that's very important right now because it comes a day after the women's reservation bill failed the parliament test amid opposition backlash over the government's approach. Now the prime minister's last address to the nation, mind you, was on September 21st, 2025 when he briefed the country on GST 2.0 reform. So that's the latest coming in. Of course, that's something that we definitely be watching out for and that's also something that you should be keeping an eye on.
All right, so that's what you're marking on your calendars as well in terms of that very important speech. But let's also move on and get you the word and the latest on the developments that are moving fast in the Middle East. Iran in fact has announced that the Strait of Hormuz is effectively closed once again and that's in response to a US blockade on Iranian shipping and ports. So as a result you do have two Indian flag vessels that were forced back from the Strait of Hormuz. While sources have confirmed that the crew suffered no injuries or damage luckily, it is clear that the celebration of the strait being completely open did not really last all that long. In fact, the latest coming in on this is news that Iranian ambassador is summoned by India's MEA over the Hormuz firing on India flagged oil vessel. In less than 24 hours things have gone back to really how they were. This means that the control of who passes through the strait still remains with Iran and very much so. Let me take you through what's happened in a straightforward order right now. So last night, Iran's foreign minister announced the strait was fully open again for all commercial ships. So that's one announcement that you're looking at. Let's also shift focus and shift the spotlight onto President Trump in terms of commentary coming in from him. He's overnight made several statements. He's welcomed the reopening on social media, yet made it clear that there's a US blockade on Iranian ports that will stay in full force until a complete deal is done, including handing over Iran's enriched uranium, which he has in fact called nuclear dust. In fact, let's also listen into what he exactly then had to say about the ceasefire and if he's planning to attack Iran again or not.
If you don't have the deal by Wednesday when the ceasefire ends, will you extend the ceasefire or will you? I don't know. Maybe not. Maybe I won't extend it. But the blockade is going to remain. But maybe I won't extend it. So you have a blockade and unfortunately we'll have to start dropping bombs again.
All right then. So there you go. That's the latest commentary coming in from Trump as well. But this particular blockade that he's talking about that didn't sit well with Iran at all. Iran in fact has made it clear that the passage through the Strait of Hormuz is going to be conducted based on the designated route and with Iranian authorization. Moreover, you do have Ismail Baghaei, the spokesperson of Iran, also writing on X, and I quote here, 'Enriched uranium is as sacred to us as the soil of Iran, and it will not be transferred anywhere under any circumstances.' End of quote. As you can very clearly see, he's emphasizing the importance of enriched uranium when it comes to Iran. And that's the commentary coming in there. The bottom line is that ships can only move on routes approved by Iran and the Strait of Hormuz is back to its previous condition effectively. So that's the entire timeline that you're really piecing together there and that's the latest coming in in terms of all of that and that's something that you're looking at. But when you talk about Brent as well that in fact has slipped to near $90 after Iran signaled Hormuz is open triggering an unwinding of the war risk premium as well that you've seen even as prices ease right now you do have physical supply damage that still keeps crude in the $85 to $90 band so that effectively what that does is that it reshapes winners and losers across India's energy stocks as well. In fact, Parth is standing by with some more details.
So, we have seen how the Middle East war has impacted the supply of crude all over the world. But to put things into perspective, let's have a look at the data provided by the International Energy Agency. Well, they've said that the global oil supply dropped by 10.1 million barrels per day in the month of March. And not just that, the global inventories have also fallen by 85 million barrels in the same month. Also the stocks that were outside the Middle East Gulf region have also been depleted by 205 million barrels. So this is a huge disruption coming in and this disruption will now take several months to reestablish itself to the normal levels of exports and production. Now let's have a look at what the analysts are estimating. They're saying crude to remain at the range of $85 to $90 per barrel for the next 12 months. Pre-war levels of crude were around $70 a barrel. And not just crude prices, the gas prices are also expected to remain elevated at the range of $15 to $18 versus their pre-war levels of $10. So this is a huge thing coming in that the higher energy prices are going to become the new normal for the world going forward. Now let's have a look at some of the companies and sectors that are going to be impacted from this. Starting with the oil marketing companies, they will see their marketing losses ease further. Also, their LPG under-recoveries are going to shrink in the upcoming quarters as well. Now, let's have a look at some companies like Reliance Industries which will see an uptick in its profit margins and also the export duty rollback which was recently done by the government of India will provide a nice tailwind to the company increasing its profits going forward. Also some companies like ONGC and Oil India will also see a growth in their earnings as the crude has dropped from its peak levels of $120 in the range of $85 to $90. But there are some companies that will be impacted negatively as well starting with Petronet because they are heavily reliant on their gas imports from Qatar's LNG plants. It will increase their input cost which will put a pressure on their margins and earnings as well. Also the city gas distributors which are companies like IGL and MGL will see their gas costs go up and see some pressure on their margins as well. So these will be the key companies and sectors that investors need to monitor going forward along with the developments in the Strait of Hormuz.
All right, thank you so much for getting us that entire analysis as well, Parth. Let's also shift focus onto another very important update. The death toll in the Vedanta power plant accident in Chhattisgarh's Sakti district has risen to 23 and that's after another injured worker succumbed during treatment. Now a central team from the department of industrial safety has reached the site and has begun a detailed probe following the state boiler inspector's report as well. You do have this explosion that occurred on 14th April and 14 injured workers are still undergoing treatment at various hospitals. Investigators are now examining safety lapses and sequence of events leading to the tragedy as well. In fact, we do have Sanjay Paruti, industrial safety leader and expert in process safety as well as accident investigator joining us on the show right now. Sir, thank you so much for taking time out and joining us this evening. Right now, first things first, what I wanted to ask you is that why is there a thorough probe that is important and what is the need for this probe to really be covering all of these important aspects right now?
Hi Shishi, thank you for inviting me as an expert on this topic. So I would like to tell you that Vedanta boiler accident is not the only single accident happening in India. There are several accidents that happened in series in the last year. If you see, a lot of people died. So if an investigation happens, accident investigation happens, we can reach to the root cause of the incident. So as the investigation is under process, we may get to know various aspects why the accident has happened. But I would like to draw the attention of the people on various aspects particular to this case and in general to other cases why in India this is happening. So particular to this case, what I believe, although it is in the media, the accident has happened because of high pressure, overpressure has taken the boiler to the explosion part because a tube has got leaked and there was a steam leakage and there was a fuel accumulation. So due to the dominant effect a lot of other series of incidents have happened and then a serious major explosion has occurred. So this is related to process incident but majorly if we see why the tragedies are happening. So this is basically absolutely failure of various elements. One is the process failure element that risk management has not been done or it has not been implemented properly so that the accident could be prevented. The people mainly in India focus on mitigation part that after the accident has happened let's do the accident investigation while in India the culture should be that risk assessment should be done and all the preventive measures should be taken so that accident can be prevented. So it's a cultural issue. So there can be various other factors also that workplace factors can also be there, human factors can also be there, process factors can also be there, maintenance factors can also be there. So there can be a lot of system issues also that complete safety management system gaps can also be there. So there can be behavioral or cultural issues can also be there. Let's wait for the accident report and see what are the main root causes.
No absolutely, it looks like it could be a confluence of factors and very difficult to pinpoint exactly what it could be at least at this point in the investigation. Speaking of preventive measures that you've highlighted, what safety mechanisms like alarms, interlocks or shutdown systems are meant to prevent this and where do you think gaps can really be occurring then?
When we talk about the preventive strategy, so in preventive strategy the first part is that there are two types of things. One is the process. Process in this is a typically a process incident. So in the process we do need to carry out the HAZOP study. HAZOP study is mainly about hazard and operability study of particular process operations. And the second type of risk assessment is the workplace risk assessment which is about hazard identification and risk assessment of activity-based risk. So when we talk about the preventive strategy in the process so we need to see that there should be proper alarms, there should be basic process control system, there should be emergency process shutdown system, there should be, so these are the part of the preventive strategy. So when we go to the mitigation strategy so there should be passive systems like fire protections or there should be relief valves or there should be rupture discs. So these kind of controls are maintained or if the mechanical integrity part like the maintenance procedures are up to date and the people are well trained, they're qualified, they're certified and the integrity inspection checks are done on time and the right kind of...
Material is put or the process is typically operated at the design intent. It is not away from the design intent. These are all the preventive mechanisms that can be taken into the study.
No, absolutely. And thank you so much for brilliantly summing that up in terms of what are the exact measures that are usually there that are in place to be preventing a tragedy of this magnitude as well. But sir, before we let you go, I also wanted to get a sense of what key lessons you think we should be taking or the industry should be taking away immediately to reduce the risk of similar such incidents.
I think as I see in the because I'm from the same industry I see that the people are putting already a lot of efforts and even government laws are coming. I think the main thing is that all the company top management should be very committed towards the safety of the people and the business as well as their brand name because safety should be the first priority and we can say to sum up this that safety first and production must. So these two things I think will give you a better advantage and the risk assessment should be done and it should be implemented well and all even not only the top management even the officers managers or even the workers contractor workers they should follow the safety rules they should know the safety rules they should know the process they should know the standard operating procedures.
No absolutely and thank you so much for helping us out with all of those insights sir. So there you go. That's the kind of lessons that you're picking up from a tragedy of this magnitude. But that's all that we could pack for you on this edition of the show. Thank you so much for tuning in. But as we do that, do remember that at 8:30 you do have PM speech and that's something that you should be tuning to as well.
Most important and you have to be bullish when actually markets are bad. In bullish market to be bullish is not a big deal.
Should we look at blue chips with the same awe that we used to?
So even if you have the bluest of blue chip and if the valuations are upwards of 50 60 times and the companies are glorifyingly growing at 5%. Just run.
The argument is being made that because of geopolitical factors etc valuable companies in India are available at rates they haven't been for several years.
That is what you should have independent mind. Market is going this side, left side, you should go right side.
By what logic am I going to sit there and talk to JetRebel and believe that the world is going to move to cloud? Cloud kitchens as a word hadn't even been defined yet. Ajit Feno furniture rental. We gave him $6 million. He took $4.5 million of that and bought wood and nails and started making furniture. Most companies we give money to turn around and give the money to Google and Meta and start buying advertising. But the chaos that we live in here on a day-to-day basis enables so much great opportunity.
You've been on both sides of the table, right? Asking for funds and then giving them out as well.
Friend of mine and I had an idea that let's build a digital music business. And this is pre forget iPhone pre iPods right so and you talk about timing and the importance of that we were so early.
There's no real compulsion for you having to come to India and start a business here.
And if my job at IA was find new opportunities for us to leverage what we know to build look why don't we go build everything we own so in June 2005 again not knowing anything about anything I moved to India with a blackberry a laptop a sample term sheet sample diligence book and they said good luck call us if find anything.
We weren't the right investor for something like Quickcommerce. I would say Danzo did amazing job as being a brand that people loved. Really did a great job of creating a brand. They did a bad job of thinking about the economics of the business.
Hi, I'm Tamana. Watch me on NDTV Profit where I break down the day's biggest business stories. What happened? Why it matters?
Welcome to the town hall with Ramdev Agarwal, someone who has always been very positive on Indian markets and I would say first of all Ramdev G welcome to the NDTV profit studios.
We think it's been too long since you made it to our studios but we're happy to have you here and of course our team is here to ask you questions as well. We've opened the lines to our viewers as well so whoever wants to ask you questions has the opportunity. I hope that's okay with you.
No, that's fine. But please don't ask me about any individual stocks. That's about it.
That of course we know the rules. So we know the rules guys. You know what questions to give. Ram a very warm welcome and I think it couldn't be a better time to talk to you right now because you've always been optimistic bullish about the Indian markets and in the last 10 days those who had faith have been rewarded.
Yeah, I mean see in anything that is most important and you have to be bullish when actually markets are bad in bullish market to be bullish is not a big deal.
What's big deal about it when market is up 3%. If you're not on the buy side, even if you're short, you'll say I'm bullish, you know. So, you have to be bullish when chips are down.
But were you bullish say 10 days ago when chips really looked down? There was a point at where we were thought we brink of maybe a nuclear war and India seemed to have been suffering the most as far as equity markets are concerned. Were you bullish even then?
Yes. See because see there are two types of dialogue when you have 10 months dialogue it's a very different thing when you have 10 year dialogue very I mean in your own mind different things will come up you know if you want to be right or wrong in 10 months time or 3 months time or tomorrow or day after then I mean god knows what to see probably just about who's buying selling and those kind of stuff but when you are buying for 10 years 20 years I typically think that I'm buying for 25 years you know I mean it's different that I'm not right every time but I always by thinking that it's 2025 you kind of bet so the dialogue is very different actually in my mind it is dialogue is very different and that keeps me if you see my last valuation study which we did just now see the what is the summary of the report the summary of the report is the world is becoming wealthier year after year if you see last 50 years 75 years world is becoming wealthier India is becoming wealthier at double the speed world is becoming wealthier at 7% nominal dollar. We are becoming wealthier at 14% nominal dollar. Now 14% is not double of 7%. If you take a 10 15 year profile so India is emerging very rapidly. Of course other countries are also emerging like
It's also a base case which is the reason why India is emerging more rapidly.
That is also one of the same that also allows me to be emerging for next 50 years.
You know so it's a very long story and there are very few compounded country predictable countries like one is of course nothing can beat us is one and the only one you know like in last 15 20 years US has gone from 30% of total global market cap share to 50%. You imagine the world is growing at 7% in that US went from 30% to 50%. Sir FI see they for 10 year 10 months they want to be right in the next one year two years I don't care I want to be right on 10 year business.
So you're saying that the average investor should not worry about the FI figures today we were earlier this morning speaking with a prominent market voice and he said exactly this that the conversations he's having with his friends who manage India for global funds is that I'm office. No one is looking at India right now globally.
Why aren't they seeing all of these points that you are talking about? I mean India for them is very small. See like if there is one micro cap where the lot of excitement is happening I don't care because in my scheme of things that 100 200 C company or 300 C company I cannot buy enough so I don't bother about what's happening in that company. India in their mind is something like that and particularly if you're sitting in US which is now $70 trillion market cap where single companies are bigger than India but would you bother about an India or would you bother about thousands of companies in India so it has become like that and US is doing extremely well thanks to this AI and AI capex and whatever is happening there is crazy I mean it looks scary how mean if they have 55 60% of the global market cap can they go to 70 75% types. That's the kind of run. If you look at internet based businesses, they are the only guys. There's nobody.
From a 10-year perspective, how are you looking at AI? Are you looking at it at the next big thing? We should be worried because you know that's the horizon or is it something which is being overestimated right now?
It's very tough to say for me. But it's a very big development. These kind of times happen every 15 20 years. I mean we saw the mobile phone coming in then we saw internet coming in then we saw the internet and mobile coming together that exploded everything out here I mean literally everything payment and your road everything is out here and more and more things are coming. So we have seen that advent and now AI will do its own magic in what way consumer AI we have seen you know where you can get your essays right for your son you can get your letter well written those kind of things are done but the enterprise AI is a very different ballgame and that's where enterprise and government AI is not that easy nut to crack it's not that easy as people are talking about that will also require a lot of intelligent people to run it you can write your own essay on your own But you can't run a company with you can't give in one instruction and the company will be run. So yes you might do your things faster but it's also not the situation that requirement of AI or software are limited. One of the funny thing or best thing is when things become cheaper particularly software becomes cheaper demand is unlimited literally infinite. So in say today if there are million projects are there in the system and the million projects could be said 20% or 30% faster in execution there are 10 more million projects waiting to happen so what do you do with that so I think eventually demand will explode that's my sense right now for a year year and a half there'll be readjustment of the old model and new model and then eventually the new model will explode I mean once the software is developed once the way enterprise will adopt Yeah, if that is clear, I think all the projects will be done by the same services companies.
So you think IT companies will survive, thrive and come out smelling of roses which
Survive for sure. How much they'll thrive, it depends on their own adaptability and at what pace diffusion of the technology happens through enterprises.
Okay. So in fact we have viewer queries coming in. I'm not going to hog all the questions from Ramdeo. So don't worry all of you viewers will get a chance. So will our team over here. But there is one quick query which has come in while we were talking. If you had to hold only five stocks or sectors for the next decade, would they what would they be? And Ravi specifically saying is it a right time to invest in IT space given the AI disruption? Nothing stock sector specific but you know this is there's always a debate about it and we get both views.
Yeah. So in IT I've been saying for last 2 3 years since I advent of this AI that it is headwinded. See I met somebody very senior from Microsoft. He said the era of headcount driven model is over. So if you have half a million people working for you, you don't need another half million to double now your revenue. So one part of the engine of Indian IT is kind of gone where they used to add people at 15 20% every year. So that's gone. So will they be able to increase the productivity of the people at profitability per person at that pace? But I'm not competent to answer that. So I would still say the sector is headwinded. I would be very cautious unless I have extra insight. I would not put in more money.
Okay. Cautious on IT. Let's get some questions in house. Alex is starting off first.
So Ramdeo G always a pleasure listening to you and the question I have is more strategic in nature or tactical in nature which is that often times over the course of the last decade we've spoken about fill it, shut it, forget it, patience etc. and looking at the long-term horizon. But the reality is that we remember the winners of that strategy to say that in the '90s you had an Infy that came in and now look at what Infy has done, right? But you don't remember those that have fallen by the roadside. Is there a pitfall holding on to companies that have been relative underperformers valuation wise because they can have a hole in your portfolio as a result of that? When do you pull the plug?
It's a I mean you have to see fundamentally in investing you have to understand what you're doing you know what stocks you're buying why you are buying how what is the source of value where is the price and where is the value that understanding is constant in not constant because the value is continuously changing as the company is growing the value of the company is growing see like when we got listed we were 100 cr today we are 40,000 crores and we are growing at 25% so my value I Hope I'm able to grow my value. So long as the value of the company is growing, you are pretty comfortable. Even if price is fluctuating a little bit, if the value of the company is not growing, then obviously you have to take your call.
But even blue chips, you're happy to sell.
Blue chip, red chips. I'm talking about your company, you know. So let's I'm going to actually take you up on that. Forget about blue chips, red chips. Do you think that that classification and definition has changed over the last few years? You have midcap companies which are at huge market cap and value and that old way of just looking at blue chips with the depth of the Indian market right now is also changing.
