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Ladies and gentlemen, good day, and welcome to Aavas Financiers Limited Q3 and 9 months FY '20 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involves risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sushil Agarwal, Managing Director and CEO of Aavas Financiers Limited. Thank you, and over to you, sir.
Yes. Good morning, everybody. Thank you for participating on the earning call of Aavas Financiers Limited to discuss our performance for the Q3 and 9 months FY '20. With me, my team is there. So Ghanshyam Rawat ji, CFO; Ram, Chief Business Officer; Ashutosh Atre, Chief Risk Officer; Himanshu from Investor Relation team; and other senior colleagues of management team are also here. And also, on the call, we have strategic growth adviser, our investor relationship adviser. The result and the presentations are available on the stock exchange as well as our company website, and I hope everyone has had a chance to look at it. I'm happy to inform you that company is consistent in delivery of its operating metrics with AUM growth of 36%, disbursement growth of 15% and PAT growth of 55% on a year-on-year basis. We continue to scale up our business operations by consistent growth through distribution. Now we have 245 branches as of 31st December 2019. Out of it, 35 new branches, we have added in the last 12 months. We also have a very granular approach of -- and retail franchise. Today, we have 97,000 plus active loan accounts, registering a 41% year-on-year growth on this number. At the same time, we endeavor to maintain the best-in-class asset quality, GNPA less than 1% and one-day pass due number less than 5% and a strong and consistent profitability, ROA, of 2.5% and above. At Aavas, we give special emphasis on customer experience because we believe that, that will be the key differentiator in the future. So as we believe it, it can be a differentiating factor, and our steadily increasing customer base is testament to the same. Right from first day, it has been our motto that we are in this business to upgrade the life of our customers. I'm happy to share with you that last quarter, we launched our first TV commercial, which revolve around the same theme of how we enable our customer upgrade their life by owning their dream home. We believe such campaigns help in improving the recall value with the customer, as also suggested by the Net Promoter Score conducted by NFX. This agency helps us getting the customer survey and how customer feels us, where we need to improve. So on the basis of some suggestions, we are working on those things. With an eye on -- for the future, we will continue to make investments to bring -- build a strong brand also. Further in view of our continued effort for employee retention and motivation, we have granted 3 lakh ESOPs under ESOP 2019 Scheme to the eligible employees. I would now hand over line to Ghanshyamji, CFO, to discuss the various business parameters in detail.
Thank you, Sushilji. Good morning, everyone, and warm welcome to our earning call. In this quarter, I start with the borrowing. Company has borrowed an incremental amount of INR 6,177 million at 8.73% for average maturity 133 months. As of December '19, our average cost of borrowing stood at 8.68% on an outstanding amount of INR 60,776 million, with an average maturity of 137 month. Our long-term crediting continued to be AA- from CARE and A+ from ICRA. Despite the highest short-term rating, A1+, we continue to maintain our zero exposure to commercial paper as a prudent borrowing practice. IGAAP and Ind-AS reconciliation has been explained in detail for PAT and as well as net worth on Slide #33 and 35 over presentation. Key important parameters. As of December 31, 2019, total number of [ live accounts ] stood at 97,000 plus, year-on-year growth 41%. Total number of branches was 245, 35 new branches added in last 12 months. Employee count 3,100 versus 2,500 in December '18, 23% growth. Au under management grew 36% year-on-year to INR 71,951 million as on December 31, 2019. Important product-wise breakup. There is no significant change in what we have seen in the last few quarters. Our breakups are here: Product-wise breakup, home loans 73.9%; other mortgage loans 26.1%. Occupation-wise breakup, salary 34.9%, self-employed 65.1%. Disbursement increased by 15% year-on-year to INR 20,682 million for 9 months '20. Spreads were maintained above 5% at 5.06 as on December 31, 2019. Average borrowing cost of 8.68% against the average portfolio yield of 13.74%. Borrowing, access to diversify and cost-effective long-term financing, strong relationship with all multi-let institutions. Important breakup of the borrowing, 44.1% from term loans, 28% from assignment and securitizations, 13.4% from national housing bank and 14.6% from debt capital markets, majorly from multi-lat institutions. Assets quality, one-day pass due stood at 3.39%, gross NPA stood at 0.57% and net NPA stood at 0.46% as on December 31, 2019. We endeavor to maintain one-day pass due below 5% and gross NPA below 1%. Product-wise, GNP, home loan 0.59%, other mortgage loan 0.53%. Profitability. PAT registered 55% year-on-year growth to INR 1,893 million for 9 months FY '20. ROA was 4.05% and ROE was 13.03% for the 9-month period. We endeavor to maintain ROE 2.5% and above. As of December 31, 2019, we are well capitalized at INR 20,356 million. Our book value per share stood at INR 260. Now with this, I open the floor for Q&A.
[Operator Instructions] The first question is from the line of Kunal Shah from Edelweiss.
3 questions. Firstly, in terms of the disbursements. So if you look at the overall disbursement growth, that's up to sub-10-odd percent level. So definitely, the environment would be challenging and the real estate sentiments are weak, but how do we see it panning out for us going forward? And secondly, in terms of the investment in networks. So we have added branches this quarter quite aggressively. And even on the employee side, it's up quite significantly. So what are the investments we are looking? Is it like, they are more or less done ? Or there would be further investments that would happen? And thirdly, in terms of the mortgage NPLs, that's inching up and normalizing. Where do we see the normalized level of GNPLs?
Kunal, on the disbursement side, as far as disbursement numbers are concerned, we are on track on annual budget side. This year, we envisage to do the numbers around INR 275 crore per month average, and I think we are on the right trajectory. We have built in capacity according to our next 1-year requirement also in this quarter. On the demand side environment, we don't see any weakness in our segment. In fact, today morning, we were discussing the demand flow is getting increased. If you'll see a number of customer-wide accounts also, it is on a very good growth side, 41% year-on-year also. Even on the quarter-to-quarter also, the growth side is there. In terms of investments, so as a company philosophy, we are -- want a consistent performance. And for that, we will continue to grow investment in our distribution, like branches and people. We will continue to grow investment in our technology piece and analytics. And at the same time, now since we have a large customer base, we are also investing in customer experience side. Apart from this, since now we have a scale and we think that at this point of time, we should also invest in brand recall with the customer. So we started also investing in the TV commercials and whatever brand recall we can create for the company. So while the investment, it will be a continuous journey, according to growth requirements, we will keep on investing. It's not like that, whatever we have done and now it will not happen. Again, for the branch opening philosophy, you know we always tell that we open our branches in the second half of the year. So continuing that legacy, first 6 months, we have opened only very few branches. Now most of the branches for this year has happened. Another 7 to 10 branches will open in the Q4. Then NPA side. Again, we don't differentiate between the products. At company level, our philosophy is that we will keep on our conservative approach towards the business in terms of customer acquisition, then underwriting, then legal risk, technical risk, fraud risk. And we are further strengthening our -- all these departments with the help of technology and analytics. And you have seen that journey that, over the period of last 3 years, our one-day pass due number has down from 7% to 3.39%. Same way, housing and other mortgage products right now, it's 0.59% and 0.53%. We will endeavor always to maintain it less than 1% in our business segment, but the customer ticket side is still 8%, 8.5%, 9%, which gives us more confidence that whatever we are doing is in the right way. In the mortgage side, we focus mostly on mortgages on a self-occupied residential property with lower LTV amounts and proper cash flow assessment. So we'll continue our efforts to further better our learning in this space, and we want to continue consistent performance on that side.
So on employees, how many have we added on a gross basis? And what was the attrition rate?
So normal -- Kunal, so normally, say, like, we have opened 35 branches. Normally, each branch has 10 to 15 employees. So whenever branch will increase, accordingly, 400, 500 employees got increased from that number. So if you see, last year 9 months to this year 9 months, we have added 600 employees, out of which around 400, 500 employees are on account of branch increase and rest is a normal distribution-wise growth and some of the areas of the risk where we want to increase our presence and trust. So accordingly, those numbers are there.
And what is the attrition rate?
So Kunal, attrition has 3 elements. So we have 3 layers of employees in the organization. One is senior management team, second is supervisory level and third is branch levels field team. So at managerial level, we have very negligible, you can say, attrition level. Supervisory level, it is also very less, less than 5% over a period of year. And at the ground level, since we hire very fresh guys because of areas where we work, we don't get mostly trained manpower, so we work with them. But again, there, it's a little bit high attrition rate at the ground level.
And number, 20, 30, how would that be?
So Kunal, right now, I don't have the exact number. Maybe after the call, either we will publish it for everybody or I will give you call on this number. But it is around 2% per month approx.
The next question is from the line of Dipanjan Ghosh from Kotak Securities.
So again, 3 questions from my side in continuation to what Kunal asked. So the reason for disbursements, I was just trying to get some color on to was it that -- so you told, it's not because of [Audio Gap]
We are not able to hear your voice.
See on the liability side. And you said...
Dipanjan, you need to repeat. We were not able to hear you out.
Yes. Your call got dropped between.
Hello?
Yes.
Yes. Now you start, please.
Sir, basically [indiscernible]
Mr. Ghosh, your voice is breaking. I think -- can you come in the coverage area, please? So since -- Mr. Ghosh maybe requested to come back in the queue for a follow-up maybe after -- once you're in a coverage area. The next question is from the line of Abhijit Tibrewal from ICICI Securities.
Sushilji, I had a question for you that -- I mean, till now, we used to guide that we typically do about 40% of our annual disbursements in the first half and about 60% of our annual disbursements in the second half. And now with 15% disbursement growth in 9 months, I mean, where do you think where we'll be at the end of FY '20? And what is it that you're looking for, for the next 2 years in terms of disbursements?
Abhijit, right now also we are on the same numbers. So first half is 42% for us and second half is the remaining number.
Okay. Sir, but what that would mean, if we are talking about for 50 -- doing 58% of the annual in the second half, that is -- that means fourth quarter is going to be very heavy, I mean, in terms of disbursements?
So traditionally, Abhijit, it happens that way because you know we open our new distribution branches in second half and that adds to capacity. So yes, so it is as per the normal trend of last 7, 8 years, no changes for us.
Okay, okay. So but that would mean we would be able to do about anywhere around INR 1,152 crores, INR 1,200 crores in the fourth quarter?
I will not quote the number, but you can do your math.
Okay, okay. All right. And sir, I mean, I'm just extending Kunal's question. I mean are we not seeing anything on the demand side? I mean because the Q3 numbers look a little muted in terms of disbursements. Is there any color that you would like to give in terms of the demand environment really?
Abhijit, demand is, if you will ask, it is on a very higher growth side for us. So normally, we used to have INR 1,000 crores per month new files coming in. Right now, we are at INR 1,300 crores, INR 1,400 crores per month. So demand has increased substantially for us. But looking at the business model we have, we've become more conservative. When demand is more, we need to add. We don't want to be inconsistent. So we will continue our consistent business approach. So we will go by our way -- the way we do the business. We will keep consistency in the disbursement numbers, AUM growth numbers because, ultimately, the asset quality is the matter. And we want to be long term players. So we don't want to take short-term opportunities which comes into the market.
Sure, sir. And sir, I would like to congratulate you for the superior asset quality that you have maintained until now. Just wanted to ask just 2 last questions. So what is our budgeting for the disbursement growth for the next 2 years, FY '21, '22?
So Abhijit, as we have told, we want to be consistent, and we have given a guidance that we will be increasing our AUM by 25% CAGR. So accordingly, you need to do your math.
Great, great, great, sir. And just 1 Last question. This 3 lakh ESOPs that we have allotted, they were predominantly to the key management personnel or how was the distribution like?
No, it has a large pool. The guys who are not part of the earlier pool and some of the guys who are part of earlier pool also. But basically, it's -- majorly, it's a supervisory level.
The next question is from the line of Karthik Chellappa from Buena Vista Fund Management.
I have 3 questions. The first one is your commentary on the NPL of the other mortgage loans. You have indicated that your target is to keep it below 1% and you have a very low LTV and it's self-occupied property. But given that it has been inching up in the last 2 or 3 quarters, can you give us some color on which states are contributing to this rise in the other mortgage loan NPL segment?
Karthik, since you know, the mortgage book we have started somewhere post demonetization and this book is now 3 years journey with us. Though we can assume that this book is not seasoned but yes, the numbers are rightly around 0.5% NPA. In this book, there is no major difference, if you will say statewide and other performance. But yes, since process takes time in surfacing, so whatever accounts get NPA in April, mostly tends to become resolved in Q3 and Q4. That's where you will see. Year-on-year basis, yes, last year, it was 0.3% and now this year, 0.53%. But if you will see consecutive quarter-on-quarter basis, it has further improved, I think, rather than -- so last quarter, it was fine.
Got it. Perfect. Sir, my second question is again on the disbursement growth...
The last quarter it was 0.62%, and this quarter, this number is 0.53%, but we still maintain that it's a risk-reward proportion. So this lab book has an average yield of around 15.5%, plus 16%. So we say that up to 1% NPA is acceptable limit, but we will do all our best efforts on underwriting and collection to give you better than those numbers, always.
Okay. Got it. My second question is on the disbursement amount per se. Although the headline disbursement was up 6% in the third quarter, I believe, if I just do the numbers, within home loans, that disbursement growth number was even weaker. Now given that you indicated that the demand pipeline and your pipeline of applications remain strong, was it purely a function of just capacity because we have added barely something like 6 branches in the last 9 months? So was that one of the reasons which contributed, let's say, to the relatively weaker disbursement growth in home loan?
Yes. To some extent Karthik your point is right, because there is a delay of 1 or 2 months in capacity enhancement and now that has happened. So -- but second thing is, again, how you plan. So we -- the way we plan it, I think, we're on track. There is nothing to be seen that were very high growth or low growth. Overall it's a 15% growth, year-on-year versus anywhere we have 17% to 20% growth in the disbursement side. I think we will be able to maintain that number, and there is no issue on that side.
Got it. Perfect. Sir, just 2 data points that I need. Can I have the gross NPA in percentage terms for the salaried segment and self-employed segment for this quarter?
Yes, just give me 1 minute. So salaried is 0.34%
0.34%.
Yes, salaried is 0.34% and self-employed is 0.7%. Average is 0.57%.
Okay. 0.34% and 0.7% And lastly, the incremental yield, which Ghanshyamji alluded to in his opening commentary, of 13.74% for this quarter. What will the incremental yield be on home loan and other mortgage loans separately for this quarter?
Yes, 2 minutes. So Karthik, the incremental is -- trajectory, there is no change. Last quarter also salaried was 12.5%, this quarter also salary is 12.5% and -- HL -- sorry, HL 12.5% and this quarter is again 12.5%. And non-HL last quarter was 15.3%. This quarter is 15.6%. It has increased by 30 basis points.
The next question is from the line of Dipanjan Ghosh from Kotak Securities.
Am I audible now?
Yes.
Yes, sure. So just coming back to the same point on disbursements. So you mentioned that you are maintaining a conservative stance on growth, even though you're seeing a strong demand. So I would like to know what is the major reason behind this? Is it like you're seeing some incremental asset quality concerns or some specific geographies where you are cautious? Like, why is there a conservative stance? I want to get some more color on that.
Dipanjan, as now we are in 10 years of operation and as management, we decided that growth-wise, we will be consistent, and we'll focus more on the asset quality and underwriting on this side because we want to keep our DNA of risk-led organization rather than the opportunity less organization in the business. Yes, and according to business requirement, we create our capacity and business. And accordingly, we do the business. So first 6 months, we added 6 branches. And as we are doing last 8 years, we open our capacity in second half of the year. And then the business numbers -- so normally business numbers are 40% in first half and 60% in second half. And we are on right path according to that number for this year's number also. And demand side, as you know, market is already exists, but some of the players are not there. So yes, demand is there, but the kind of segment which we use together like we don't fund land loan, we don't fund high-ticket lap, we don't fund under construction properties, we don't fund investment houses. So we are continuing the same legacy. But somehow, demand is coming from the side where we are not comfortable. That's where we are keeping our conservative approach intact.
Sure. 2 more questions. So basically, one, if I see your repayment rate seem to have increased during the quarter. Can you shed some light on that?
Repayment rate...
So if I just do a calculation on your...
Yes, so Dipanjan, this repayment has one element of subsidy received from the Government of India. So this quarter, we have got a major subsidy amount of INR 52 crores. If you remove that element, then the prepayment rates are intact. Even it is better than last quarter.
I mean last question. So you mentioned about some of the players not existing in the market from -- but from -- you know sir, doing some ground research, we find that some of the smaller banks and the new NBFCs, smaller NBFCs, the kind of [indiscernible] increased presence in some of the home states. So are we seeing some competition from the smaller banks for this entity?
When we are in the market, Dipanjan, there will always be competition. So I think then some players will go, some players will try to fill up that gap and the market opportunity will always be existing. But some of the smaller players or small finance banks, we are yet to see their presence in the area where we work. And I think given our borrowing cost trajectory, given our expertise on underwriting side, we have a small -- not big, but we have a small edge over all those competitors right now in the market.
And small data keeping question, sir. So if you could give a broad idea about your incremental disbursements growth from the key states, like, I want to get a color on which states are contributing to majority of growth and how it has changed over the last, let's say, 2, 3 quarters or maybe 4 quarters.
So Dipanjan, now, we have 250 branches. And new states, wherever we have new -- opening new branches, yes, they need to come up to the curve. And existing states are performing in a consistent manner. And mostly disbursement percentages are happening in ratio of number of branches we have in the state because overall our ticket size is almost same. So -- yes, so like Rajasthan has 80 branches, earlier out of 160 branches, Rajasthan used to have 70 branches. Now we have 250 branches and Rajasthan has 80 branches. So Rajasthan's share is now 1/3 of the branches. Accordingly, in the business also, their ratio is coming down and the existing states are on a consistent number. So Rajasthan, then -- after that, Gujrat, Maharashtra and MP comes. After that, NCR and new state comes.
But -- so like -- but is the growth rate similar to 6%? Or like it vary -- I'm sure it will vary across states?
If you will take a base, then always new state growth in percentage term will look more, but I don't see my business that way. We see that every branch productivity should be around INR 1.5 crores per month. To that extent, I think we are on right trajectory.
The next question is from the line of Aditya Jain from Citigroup.
Just one data point expected. The remix within in home loan [indiscernible]
Mr. Jain, your voice is breaking.
[indiscernible]
I'm sorry to interrupt again. Mr. Jain, your voice is breaking. We can't hear you properly.
Let me get back in the queue.
Sure. We take the next question from the line of Akshay Gavankar from Motilal Oswal Securities.
Congratulations for the good set of asset quality. Sir, just a data keeping question, we had some 3,000-odd employees at the end of FY '19. So is it fair estimate to assume with the current expansion in branches that the current employee strength is somewhere around 3,800 odd?
So Akshay, we have given the numbers. As of last year, December '18, we were having 2,500 employees, and as of December '19, we have 3,100 employees. So, it's an increase of 600 employees.
Okay. And sir, could you please give us the split between as and how it is between sales, credit or collections?
So normally, we say [Foreign Language] so it should 2:1 ratio. So business team should be 2 and rest of the team should be all together, put together, it should be 1.
The next question is from the line of [ Omkar Kulkarni, ] an Individual Investor.
Yes. You have mentioned your target about of keeping ROA above 2.5%. I would like to know the gearing ratio which we are currently operating at? So that we can work out the ROE projection.
So when we say 2.5% ROA, we say it's normal at the gearing level of 6.5% to 7% -- 7x. Right now, our gearing is less. That's where our ROE is high.
Yes. So what are you targeting in terms of ROE, say, next 2, 3 years?
So it depends on the gearing level, but now for next 2, 3 years perspective, we will not raise any further capital. So every year and the way the -- 25% growth number if we are targeting, you can do the calculation that ROE will increase. Our current ROE is around 13%. And the capital which we raised in the IPO, again has not put to utilization in the business because after the liquidity crisis, most of the -- so we increased our liquid fund amount. So earlier, we used to keep INR 600 crores, INR 700 crores, now we are keeping INR 1,000 crores plus as a cash. So if you remove that, then anyway, our ROE numbers are upward of 15% at this point of time also. Yes. So with every -- each year performance, you can assume that the ROE will increase by 1 -- some percentage number. It will be enough, but a little too early.
So you expect around 0.75% to 1% ROA expansion every year?
ROA [Foreign Language]
ROE, yes.
Yes, it might be, yes, yes.
As Sushilji mentioned, as we -- as a management, we generally don't give our forward-looking guidance. As you always mention that we are long-term consistent growth player, we focus on more on the quality and business capacity built-up generation to serve the rural semi-urban market. We -- I think that will be more appropriate answer from our side.
Correct. But in order to be a consistent long-term player, a good company needs to have a good ROE. Otherwise, there is no use of -- just like burning capital, which you're not doing currently, but that's why I'm asking.
The next question is from the line of Dipan Mehta from Elixir Equities.
Yes sir, congratulations on good set of numbers. My question is regarding the state-wise concentration of loans. So I think around June 2018, we had 46% from Rajasthan. How has that number progressed for the last quarter? And if you could also just briefly give us an overview of which are the states now which are contributing?
Just give us some time. So Rajasthan is 43%.
And the next state?
Then we have Maharashtra, Gujrat, MP, are around same level.
That would be how much?
Around 15% to 17% each.
Okay. And sir, what is the overall target in terms of state-wise diversification because, obviously, having such a huge contribution coming from a single state high-risk associated risk factors.
So see, you need to go with our philosophy. We do take a 5-year block, and we developed 4 states. So in the first 4 or 5 years of operation from 2011 to '15, we developed Rajasthan, Gujarat, Maharashtra, MP and some part of NCR. And when we reached 60% to 75% of tehsil level penetration, the next 5-year block, which is right now fourth year, we started developing Chhattisgarh, Haryana, UP, Uttarakhand. So most of the branches in last 4 years are opening here. And the existing states are getting the contiguous distribution basis branches. So you are working and you're covering 50 kilometers radius, you cover 7, 8 towns. When a town gets a substantial size of customer, then we open a branch there. Then from there, again, we will continue to do 50 kilometers radius. But AUM is accumulation of business, which you've done in the last 10 years. So Rajasthan has 10 years business, Gujarat, Maharashtra, MP has 9 years business, and rest of the new states are having 1-year, 2-year, 3-year, 4 years of business. So I think from concentration risk on this side, we should see incremental business wise, how each branches are performing. So I've told in my last question answer also, now we have 250 branches and almost average branch -- average business per branch is INR 1.25 crores to INR 1.5 crores. And that's how we should see the concentration risk.
Okay. Sir, one last question. So therefore for the quarter, supposing for the December quarter, can you give us a geographical breakup, what would be Maharashtra -- so Maharashtra, Rajasthan? How has that changed?
No. So it's consistent. Nothing has changed, mostly.
Mr. Mehta, do you have any further questions? The next question is from the line of Abhijeet Sakhare from Goldman Sachs.
Am I audible?
Yes.
Yes.
Sir, first question is coming back to disbursement growth. Just from previous conversations, haven't we indicated that we have sort of adequately capacitized for 2, 3 years out in terms of branches or bench strength? So just wanted to check the impact on disbursement from lack of capacity in this quarter itself?
No. So it's not that way, Abhijeet. So we should not see number from that perspective. We should see number from the perspective that in a quarter, maybe 15 days here, 15 days there, some festival here, some festival there, some holidays here and there, but overall basis it will see 9 months. We are consistent, 15%, 16% growth, and that's what will lead us to whatever AUM growth we are planning. Distribution and capacity growth is an integral part of the business, that will keep on continuing. Say, last year, whatever we have done, maybe it's sufficient for this year and next year. This year, again, we are doing because business is a growing concern. So we cannot stop our investment in distribution, capacity enhancement, technology, manpower and those things. Yes, it will cease some quarter or last quarter versus this quarter. So yes, there might be less. But as a management, we think that we are on right track of adhering this year's number and the growth which we have projected is in line for us.
Sir, second was any sense on the balance transfer levels over the last maybe 9 months or so? What trends are you seeing in the home markets and in the newer locations?
So on the balance transfer side, the number is -- so it is less than last year's number. But the composition has changed, earlier the balance transfer used to happen more by HFC. Now it is 65% plus are from the nationalized banks and 35% side from the HFCs and NBFCs. Last year, it used to be reverse. Nationalized bank and mainstream bankers were around 40% and HFCs and NBFC were 60%. But overall, if you will see, last year, first 3 quarters, the BT out number was INR 206 crores and vis-Ã -vis this year, first 3 quarters, the BT out number is INR 163 crores. So just 20% less than the last year number.
Got it. Just a clarification on this, is balance transfer more on the fixed state customer side or any particular deviation or [indiscernible]
No. So it doesn't work that way because anyway BT out number are very less and across the 240 branches. So on the both segments, it happens normally.
All right. And just last question is...
So that's where you will see, though disbursement number is less, but AUM numbers are matching because the portfolio attrition is on the lower side.
Understood. And last one is, what is the current card rate on the fixed rate as well as on the floating rate of the average salary disbursement deals?
So we -- I think we have already told on that call that our salaried is around 12.5% and nonsalaried is around 15.5% -- 15.7% rate. And card rates are already published on the website and so -- because we have different products and different cards, so some 8 to 10 projects. So maybe you can take from there.
The next question is from the line of Tanush Mehta from Dalal & Broacha.
Sir, firstly, congratulations on good set of numbers. Sir, my question pertains to the branch setup. So just on a brief idea, like, what would be our cost per branch? And when would be breaking even like our branch sort of...
So we have 4, 5 category of branches according to the town potential and the branch potential of delivery numbers. It is based on census data statistics and our analytics department works on it, but there are 4 category or 5 category of branches. Normally, our branch takes 6 to 12 months to break even. And as of 31st March, we were having 215 branches. And out of those, around 90% plus branches are positive ROE branches as of 31st December.
Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Sushil Agarwal for closing comments.
Yes. Thank you very much, everybody, for patience listening and asking questions, so that the doubt can be cleared. To summarize now, so we aim to be one of the key enablers in broadening and deepening of credit facilities to unserved and underserved customers in the semi-urban and rural area market, which provides a huge potential waiting to be tapped. Our deep understanding of this segment and our in-house execution model will enable us to fulfill the aspiration of our customer and helps make us a strong brand. In order to continue our DNA of working at the ground, very close to the customers and as evolving process to new employees and branches, so we again emphasize that senior management or our employees, so top 100 employees should meet 50 customers each in the next 6 months. So that will give us more customer insight, that will keep us grounded. And we will keep our DNA. So now we are completing 10 years in some time. So for another 10 years, what we want to do, what are the customer behavior changes, we will also learn. In that context, we made this new initiative that top 100 employees will meet 50 customers each including CEO, Chief Business Officer, Chief Risk Officer. For that to protect the company against the new risk environment, which is the cyber threat. We as a company are building a strong internal framework around cybersecurity. And we'll have more investment on this side in coming next 1 or 2 quarters around it. Thank you. Thank you for your time. For further information, you'll be requested to get in touch with Himanshu, who is heading the Investor Relationship team or SGA, our Investor Relationship Advisor. They would be happy to help you and happy to take your further questions. Thanks. Thanks for your time.
Thank you very much, sir.
Thank you.
Ladies and gentlemen, on behalf of Aavas Financiers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.