25 April 2019 PAT of INR2.5b beat our estimates by 18%, while NII was largely in line with estimates. Lower opex and credit costs led to the PAT beat. Disbursements (INR66b) rebounded from a sluggish 3Q, almost reaching a record peak, despite tepid gold loan disbursements. The two key As a result, AUM grew 3% QoQ (7% YoY) to INR296b. We believe there is scope for further operating leverage benefits to play out over the medium term. While yields were sequentially stable, cost of funds declined 50bp to 8.9% leading to 20bp QoQ improvement in spreads; we await management clarity on the same. maintains 44% ECL provision on its GNPLs and 6.7% overall ECL on its loan book. Overall credit costs for the year were 2.7%, which is modestly higher than the long-term average. new MSME underwriting model is likely to result in better asset quality; however, we have not factored in any meaningful improvement in our numbers yet.