26 October 2019 Core PBT of INR3.8b was largely flat QoQ/YoY and in line with our estimates. However, given the lower-than-expected tax rates, PAT beat our estimate by 6% (+19% YoY to INR3.0b). 2QFY20 was one of the toughest quarters since the liquidity crisis. The quarter was characterized by slowdown in MSME disbursements (down 44% YoY), leading to 19% YoY decline in total disbursements to INR52b. The company is taking a cautious stance on MSME disbursements. Thus, AUM growth declined 2% QoQ (flat YoY) to INR297b. Yield on AUM declined 100 bp YoY to 19.1%, while cost of funds increased by a similar quantum YoY to 9.9%. The company also securitized INR14b+ during the quarter via PTCs (INR9.3b) and direct assignments (INR5b). In 1HFY20, disbursements have declined 10% YoY to INR115b, while core PBT has grown 5% to INR7.6b.