Just some qualitative observations from the Q2 FY ’23 Earnings Conference Call. Management appears to be cautious and mature. Some of the answers they gave speak highly of their leadership skills :
When asked if as a result of new software “operating leverage in terms of opex coming down as a percentage of assets or income whichever way you look at”.
“I mean, no. Sir, that is always a hope. And as Jayendrabhai would put it that cost-cutting and finding efficiency is always a constant endeavor. However, you will find us to be quite lean overall, how much extra lean that we can become, I think the idea is to always find a balance. If your goal is to become the leanest and the most cost-efficient company in the industry, you might get some good short-term results but that means is you are not investing enough. Your people might get frustrated. Your retention might suffer and a lot of other things might happen.”
On being asked if the new software will result in the loan officer being able to handle a higher volume of clients, customers?
“It could, but I’m not exactly sure whether that should be the goal because higher per person capacity also comes with its own set of risks when something goes wrong. So when the delinquency and stuff rise, one person is not able to manage such a large case load. And the group sizes also have been overall in the industry going slightly lower as years go by. But what will help us in the future is moving more towards the cashless repayment. And in that case, yes, an FO will be able to handle more customers, but that will be a whole new model. Under the current model, I don’t think that is our overall goal is to increase the case load for FO, although that might be an ancillary benefit down the road.”
In summary, they are not in the league of making grandiose claims. They also show respect to people. A different league from, say Axis bank with its alleged toxic culture…that’s another story.
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