Bajaj Finserv Ltd. ($BAJAJFINSV)

Ladies and gentlemen, good day, and welcome to Bajaj Finserv Limited Q4 FY '26 Analyst Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Raghvesh from JM Financial. Thank you, and over to you, Mr. Raghvesh.

Thank you, Angel. Good evening, everyone, and welcome to the Q4 FY '26 Finance Earnings Conference Call of Bajaj Finserv Limited. First, I would like to thank the management of Bajaj Finserv for giving us the opportunity to host this call. As always, we'll have opening comments from the management team post which we will open the floor for Q&A. From the management side today, we have Mr. Sreenivasan, President Insurance and Special Projects, Bajaj Finserv Limited; Ramandeep Sahni, CFO of Bajaj Finserv Limited; Mr. Tapan Singhel, MD and CEO, Bajaj General Insurance Limited; Mr. Tarun Chugh, MD and CEO, Bajaj Life Insurance Limited. Mr. Avais Karmali Karmali, CFO, Bajaj General Insurance Limited; Mr. Vipin Bansal, CFO, Bajaj Life Insurance Limited; Mr. Ashish Pancha, MD and CEO, Bajaj Finserv Direct Limited; and Mr. Ganesh Mohan, MD Bajaj Finserv AMC. With this, I will hand over the floor to Ramandeep sir for his opening comments. Thanks, and over to you, sir.

Thank you for the introduction. Good evening, everybody. We welcome you to this conference call to discuss the results of Bajaj Finserv Limited, BFS for quarter 4 FY '26. As before, in this call, we will largely be concentrating on the consolidated results of BFS, the results of our insurance operations through Bajaj General and Bajaj Life. Our merge companies, which include Bajaj Finserv Health, Bajaj Finserv Direct, Bajaj Finserv Asset Management company. And lastly, where material, the stand-alone results of Bajaj Finserv itself. Our 2 other subsidiaries, Bajaj Finance and Bajaj Housing Finance have already had their conference calls. And hence, we would pursue only very high-level questions on these companies. To start with a few hygiene points as a word of caution, we affirm that any statements that may look forward-looking statements are just estimates and do not constitute an assurance or indication of any future performance result. Let me also give you an update on the basis of accounting, which we use at a Finserv level. As required by the regulations, Bajaj Finserv prepares its financials in compliance with Indian Accounting Standards, referred as Ind AS. The insurance companies are, however, currently not covered under Ind AS. They have prepared their Ind AS financials only for the purpose of consolidation with Finserv. Accordingly, for Bajaj General and Bajaj Life stand-alone numbers reported are based on non-Ind AS accounting standards, which is referred as Indian GAAP as applicable to the insurance companies currently. However, on the subject, as per the recent regulations from IDI, insurers are now required to transition to Ind AS from FY '27. However, the set regulation also allows insurers to seek a forbearance for a year, keeping in mind the level of readiness of each one of those. Accordingly, both are insurance companies plan to seek forbearance for a year and would transition to Ind AS from 1st of April 2027. Now moving to an update on our joint venture with Allianz. I'm happy to confirm that in March, our insurance subsidiaries, that is Bajaj General and Bajaj Life, have completed the buyback of the balance 3% Allianz Stake, baking our Insurance business is now 100% Bajaj. Made in India, Made for India and Made by India. The buyout not only concludes the buyout of Allianz stake, but it also is expected to strengthen the ROE and ROE of both the insuring subsidiaries going forward. Post the buyback, the 100% holding of the insurance subsidiaries by the Bajaj Group is split as follows: 77.33% is held by Bajaj Finserv, 18.1% by Bajaj Holdings and about 46% by Jamnalal Sons Private Limited. I'll now jump into the high-level results for the quarter. On a consolidated basis, which have been put out in our press release dated 30th April. The consolidated total income grew 6% to about INR 38,508 crores versus INR 36,434 crores for the same quarter last year. However, you must please note that the income for the quarter looks a little depleted because of the high impact coming from the MTM on the fair value through P&L portfolio held by our insurance companies. As the total income includes investment income and some of the investments by the insurance companies are held at FATPL basis, due to the geopolitical tensions, there is a temporary MTM impact, impacted the revenue. And if we gross up the MTM impact on the revenue, the revenue growth actually be 14% as compared to the 6% reported by us. Similarly, the consolidated profit after tax also grew at about 5% to INR 2,539 crores as against INR 2,417 crores for the same period last year. Again, excluding the temporary MTM losses of the insurance companies, the consolidated profit after tax actually grew at a large 24% as compared to the 5% being reported by us. So just to summarize, both the revenue and the bottom line for the quarter being reported are largely impacted by the MTM impact which we believe is temporary in nature due to the geopolitical risk. And if you gross it up, excluding these NTM implications, the revenue growth and PAT growth are very healthy at 14% and 24%, respectively. Now I'll just deep dive into each of the respective companies to give a texture on the companies itself. Let's start with Bajaj General. On GWP growth basis for the quarter, the growth was muted at INR 4,322 crores as against INR 4,326 crores for the same quarter last year. This is largely on account of tactical decision made by the company on reducing its exposure to crop and motor amid the elevated pricing pressures, which we've seen in the market in the last quarter. However, if we exclude bulky crop and Government Health businesses, the GWP in fact, increased by 8.3% as against the market growth. And when we refer to market, it's the multiline growth of 11%. And here, we know that the multiline growth was backed by some of the players seeing EOM stress and hence, they may not be comparable at this point. Underwriting losses stood at INR 96 crores for the quarter versus about INR 3 crores for the same -- similar quarter last year, impacted largely by elevated claims arising from our Government Health business. This essentially arises from the fact that the loss ratios on these schemes are higher in the initial months and then they taper down. So it is kind of a timing variance. And also the lower Crop business, which we've done in the last quarter, given the steps we saw from a pricing perspective. The combined ratio for the quarter was elevated at about 113.6% for the quarter as against again 4.8% for the same quarter last year. Now this essentially came from the fact that we did a treaty within the last quarter on government health basis, but it was done on retro basis from the third quarter, which meant that the NWP for the period was depressed because of mandation of this treaty and hence, the elevated combined ratio. However, if you look at the combined ratios, excluding the bulky businesses, which is government health and crop, the combined ratio has actually improved for the quarter versus the same quarter last year. On a full year basis, however, if you see the combined ratio, which nullifies the impact of these timing variance is the combined ratio on an old basis is the [indiscernible] basis, is reported at a very healthy 101.9%, which we believe will continue to be amongst the best in the market. The ROE, excluding surplus capital, which is at about 200% solvency stands close to 19% for the period. PAT growth also remained flat for the quarter for the same reasons, which I mentioned earlier, the fact that there was a timing variance on Government Health schemes, claims being booked and we did lower crop business, which last year same quarter was very profitable. On AUM, we ended the year at about INR 35,529 crores at against INR 33,122 crores for the same period last year, a growth of 7.3%. However, it's important to note that both AUM and solvency for the period have been impacted due to the onetime impact of the buyback of the 3% Allianz stake which we've done, which for the general insurance company was close to INR 1,590 crores. To summarize, these operational results including the mine ratio and ROE underscore Bajaj General's disciplined focus on delivering balanced and profitable growth supported by strong risk selection robust distribution through underwriting and continued emphasis on exceptional customer service in the most difficult and highly competitive market. We will now move to Bajaj Life. Bajaj Life's financial outcomes have been in line with the plan for transition to sustainable and profitable growth as was highlighted in the mid of last year. The impact of change in strategy continues to be reflected in the fourth quarter results as well. The retail weighted received premium for the quarter grew at about 9.7% from INR 2,328 crores, to about INR 2,550 crores, largely in line with the industry growth. However, what's important to note is that our retail protection contribution in the overall retail business has grown to 8.4%, with over growth of 67% for the period. Similarly, the group Protection business has registered a very healthy growth of 42% for the quarter. Moving to the bottom line parameters. Our VNB for the quarter grew at a very healthy 29%, up from INR 549 crores to about INR 709 crores for the quarter. The NBM for the quarter, up to 24.5% as against 22.1% reported for the same period last year, an expansion of about absolute 2.4%. These outcomes are despite the gross GST impact of about 5% on NBM for the quarter and about 2.9% on a YTD basis. The GST impact BNB has been largely mitigated on exit basis in March '26. We can now clearly see that the benefits of our revamp strategy, Bajaj Life 2.0 are clearly visible in the financial outcomes as we depicted earlier. On the back of continued strong renewal premium growth of about 18%, Bajaj Life GWP grew at 21% for the quarter. However, it's important to note that persistent dips were absorbed against certain cohorts in line with the market. However, the management is working on it to bring it at the similar levels we've seen in the past. On an overall basis, the retail weighted received premium product mix for the quarter was very well balanced at par with 25%, non-par and savings -- nonpar savings and annuity at 24%, term at a very healthy 8% and [indiscernible] at 42%. The profit after tax also registered a very healthy growth of 78%, up from INR 41 crores for the last quarter last year, to about INR 73 crores for the quarter being reported now. Bajaj Life ended the quarter with an AUM of INR 133,500 crores, up about 8%. Again, this was along with the solvency impacted by the buyback of 3% of Allianz stake, which for the life company was close to INR 1,200 crores. Overall, the quarter for Baja Life is in line with the expectations and on the right trajectory of sustainable and profitable growth. Finally, both the insurance companies continue to be financially strong with solvency for Bajaj Life at 266% and Bajaj General at 300% and hence, are very well poised to weather any external adversity. We will now move to the Lending businesses. I'll start with Bajaj Finance. A very strong quarter across all key metrics, including volumes, AUM, new customer addition, credit cost and profitability. The number of new loans booked for the quarter was at about INR 1.3 crores as against INR 1.07 crores for the same quarter last year, a growth of about 21%. The company's diversified business model has enabled it to cross the record milestone of AUM of INR 5 lakh crores and a strong AUM growth of about 22% at INR 509,975 crores. The net total income grew by about 21% to INR 14,209 crores, up from about INR 11,750 crores for the same period last year. PAT was close to INR 5,500 crores for the quarter. If you look at the OpEx to net total income ratio after adjusting for the loan losses and provision reclassification which the company has done the ratios are flattish at about 33.2%. There is a slight increase, which is visible sequentially due to the cascading impact of the new labor code which we had seen in quarter 3 and accelerated gold loan branch expansion. We have also been investing in AI implementation, and that also impacts the ratios to some level However, both growth, however, we are seeing acceleration in both growth and improvement in operating efficiencies due to the AI investments we've been making. Loan losses and provisions for the quarter were at about INR 2,008 crores as against INR 2,167 crores for the same quarter last year. Before we did the additional ECL provision, it increased by about 8% to INR 2,125 crores, up from INR 1,970 crores for the same period last year. In quarter 4, we saw a net decrease in stage 2 and stage 3 assets at about INR 430 crores, reflecting a continued improvement in portfolio quality and the outlook on credit costs going forward. The GNPA and NNPA stood at a healthy 1.01% and 0.4%, respectively, as against 0.96% and 0.44%, for the same period last year. The capital adequacy remained strong at 21.55% and the Tire 1 capital was 20.67%. I'll now move to the mortgage subsidiary of BFL, Bajaj Housing Finance Limited. Again, a very good quarter in disbursements, AUM, operating efficiency, asset quality and profitability. A stable quarter with AUM growth of 23%, driven by good momentum in disbursements. However, this was backed by some portfolio attrition. Growth was very well distributed across all the business segments. Home Loans for the company grew at about 18%, loan against property grew 24%, lease rental discounting grew 44% and developer finance grew 13%. The net income -- sorry, the net interest income grew 15% to about INR 945 crores as against INR 823 crores for the same period last year. The operating [indiscernible] continued with OpEx to net total income at a healthy 19.2% as against 21.8% for the same period last year. Healthy asset quality continued to be maintained with GNPA and NNPA at a very small 0.27% and 0.11%, respectively. PAT grew by about 14% to INR 670 crores for the quarter. However, this excluded the onetime impact of tax credit, which the company had taken last year of INR 34 crores, the PAT growth would have indeed been 20%. The capital adequacy ratio stood at 22.46% as of 31st March, with Tier 2 capital at 22.01%. In summary, another very strong quarter for both our lending companies, Bajaj Finance and Bajaj Housing Finance Limited. Now let me give you an update on our emerging companies. I'll start with Bajaj Finserv Health. For the quarter, Bajaj Finserv Health locked in about 6.5 million health care transactions, as against about 5.3 million transactions done for the same quarter last year. Bajaj Finserv Health continued its expansion of the provider network, which includes about 130,000-plus doctors, about 15,000-plus hospitals and about 6,500-plus lab touch points. Utilizing this network strength and its tech platform, Bajaj Health is able to offer an integrated OPD, IPD and wellness experience to both retail as well as corporate customers. During the quarter, the revenue for the company grew at a very healthy 41%. So in all, overall, a good quarter for Bajaj Finserv Health. Moving to Bajaj markets. During the quarter, the disbursements for the quarter were about INR 2,047 crores as against INR 1,800 crores for the trailing quarter, which is quarter 3 of FY '26. The company ended with a total unique partner count, which are the partners available on the platform of about 103 in number. The operating revenue for the company, however, for the period has indeed degrown to about INR 95 crores, down from about INR 129 crores for the same period last year. which is attributable to decrease in loans and transacting customers during the quarter. And as has been indicated earlier in the past quarter, this essentially was a planned degrowth because we had planned a migration of our new system, which is being used by the front line sales and the migration is now complete. So we believe that the degrowth here on should be behind us. Further, we have also changed the revenue structures within the company where some of the revenues and move on a trail basis which now provides stability and predictability and a nonlinear future revenue. The business model also has been aligned with the RBI digital lending directions for LSPs, which came into effect from 1st of November 2025. Now moving to Bajaj Finserv Asset Management Company. The AMC continued its good run recording an AUM of about INR 26,820 crores at the quarter end. And it retained the 26 spot amongst all the mutual fund companies in India in terms of AUM. The closing AUM was heavily impacted, as we know, due to the geopolitical tensions. However, if you look at the average AUM for the quarter, it was a healthy INR 30,627 crores, as against INR 20,133 crores average for the same quarter last year, a growth of 52%. The equity mix in the AUM stands at about 59%, and the nongroup share of AUM constitutes about 94% of the total AUM. This is just to sum up the performance on all our companies. Before we open for questions, considering the post of time, I would request the audience to kindly keep their questions brief so that we can cover more queries during the call. With this, I invite questions from the audience.

[Operator Instructions] The first question comes from the line of Shreya Shivani, with nNomura.

I have two questions. First is on the line Insurance entity. Non-par savings mix has reduced. Just trying to understand if you can give us a flavor of how were the markets for the non-par product in the year that has gone by. Was there any pricing pressure that you would like to highlight? What is your strategy for FY '27? My second question is on the General Insurance piece. So sorry, the Motor TPPs over there. So the reserving triangles looks like the release in PP in FY '26 has been higher. I'm coming to about INR 800 crores versus the INR 600 crores to INR 700 crores you've done in the last couple of years. So any color you can give around what has happened here. And sorry, I'll squeeze in one more question. This is on Bajaj Direct. So good to hear that the migration, et cetera, is completed. I just want to understand, as we enter into this year, and there are a lot of concerns around some of the business loans and what can happen, et cetera. Are there any measures we are taking to tightening anything from our end? Yes, those are my 3 questions.

Vipin, you want to take the first one on noncost savings within our turnover?

Let me just step in. Shreya, thanks for your question. non-par where we see it as a bucket of non-par plus annuities because annuities are the same cost structured differently. Our annuity actually doubled from 5% to 10% in the financial year. And, Yes, overall non-par did come down from 21% to 16%. But overall, if you look at it, I mean, broadly, we are 26% to 26%, both in both these costs if you look at it. The market has actually looked at more higher age customers coming in. and which is where -- I mean, the way we look at the market is when the higher age customers would rather have more annuities than have medical-based products. And we are seeing a consistent shift in the market towards [indiscernible], and I think this is a very healthy time because usually, the customers about the age of 50 have more money in their pockets. And hence, are able to take more such more [indiscernible] health and life products. Our ticket size in annuities has actually doubled in the last years. So that is the real one. You should expect that when you talk, we will fundamentally look at these 2 buckets together because they're interlining. Actually, if I might say on the non-par market as to what's been happening, the -- as you're aware, below INR 500,000 and below, there is a tax benefit rate available. And whenever our tax -- post tax returns between fixed deposits and non-par savings actually comes to about approximately 2%, which is [indiscernible] the industry gets a lot more tailwinds in the manpower saving plans. If there is liquidity in the bank sector and post tax of the returns look at this kind of a gap below INR 5 lakh ticket size, we will expect the non-par savings to continue. So it's really an intact market. There's nothing to do with the pricing, et cetera, as of now from our side. Is fundamentally to high range brackets. I hope that answered your question.

Tapan, you want to take the question on TP releases?

Yes. So if you look at the TP release is a factor of how the book develops and TP is a long-tail book. So as the claims development happens and compared to reserving, are you developing what are on we see. So -- and if the numbers you mentioned, I don't see that there's a new shift in terms of what things happening. It means that the company has reserved over time. And as the book keeps on developing and claims are getting paid on the [indiscernible]. Is the natural [indiscernible], change in the philosophy our provision.

Next question comes from the line of Prayesh Jain, with Motilal Oswal.

I just wanted to understand on the general insurance front, how do you see the product mix evolving and the overall profitability of the entity going ahead into FY '27. So how do you see this kind of moving?

So if you look at it any impressing question, let's look at last year, the industry combined ratio actually moved out by about 6% to 7%. If you to look at Bajaj General combined ratio, its volatile versus last year. So even the industry to [indiscernible] by about 6% to 7% combined ratio. Bajaj General was where it normally remains close to [indiscernible]. So if you see the gap, it has been huge, and that's why in the fourth quarter, I think [indiscernible] as we saw the combined [indiscernible], I think we -- in places where [indiscernible] pricing is not appropriate and that we have been doing all these years where we go slow when we see that the prices appropriate from a perspective serves well as the one that we feel right. So next year, again, depends on how the industry moves. But if you look at impact on the quarters last year, industry demand issue as 128% also. I think -- so fundamentally, as a company, a philosophy [indiscernible], we are a company which will be 100 years, which is not company which we are looking at the short term in terms of making it up. So it will always be [indiscernible] always your customer objects to always find open market where they don't keep on growing. And that's what we have been doing for the next year also last year in the same.

Indian product mix, the government-led businesses on health or either the crop business approach? Is there an approach towards...

As I said, No. I think I have mentioned this a lot of previous calls also. The approach is simple. Where are the pricing appropriate and which we serve the customers well is what we write. Now if you tell me make an approach right now and say this is what I'm right and the pricing are prepared for that. Why is it that. Bajaj General is a large insurance company in India, which means that we write all product lines and we have a decent market in each one of them. The relation this happen depending on how the market [indiscernible] product line, where we get more aggressive on pricing goes below what we feel compatible. There you reduce where the pricing is appropriate, we'll see. So we can kind of tell you that next year, this is exactly what we should do will, move or move these. But in all lines of businesses, you will see that we are on the top companies in value position ourselves. So that is how it will continue depending on making the particular price line in the years to come, we shall move on that basis.

Got that. And now Life Insurance is just trying to understand BNB margin projected on year on what kind of E&D margins should we think and what kind of product mix that you would be targeting for FY '27. Now given the market uncertainty right now continuing in April, do you think that the product mix kind of -- which has moved slightly away from -- it's not a big one, but for the full year? Or do you think that trajectory will continue and the margins can kind of continue to improve on a full year basis?

Okay. So let me just give you a little bit of a strategy part and Vipin can jump in to give you specifics. In this is that directionally, all our product segments are now profitable. So the fact that there is a ULIP is now profitable. So this is a discussion we about 18 months back. And now as [indiscernible], the growth is actually not a bad sign. It's a good sign. So fundamentally, as the product mix is moving, we've had this entire culture shift in all our businesses, including agency, which are very, I'd say, very well picked up the term plans. And I think that has been the significant leader mover in terms of product mix. We expect the trajectory of term to only increase from here on, and that should impact our VNB margins only positively, as you know, while maybe a little lower ticket size. If we are able to sell more of core term, then it is only what helpful to the VNB margins. So directly that's what is moving. Vipin, if you'd like to add anything?

No, I think, Tarun, that's [indiscernible] to the more specific the margin expansion that we are talking about, and this is a continent GST impact that we had called out. I think, As we see, it's a combination of the product mix, the way we are able to manage the kind of [indiscernible] we are offering, and we do apply some activity there. Obviously, the cost even get taken that is contributing about [indiscernible] to the [indiscernible]. So while all of that is there. In terms of product mix, we have also maintained that we would want to have par at about 25% plus/minus annuity plus nonpar savings again in the 25% to 30% range, down, we would aspire to be 10% plus annually will be about 40%. So I think as the -- that's a stable mix, we would want to be operating at. I hope that answers your question.

Yes, definitely. And just last one question on AMC. At what scale of AUM do you think that this business will break even and what tenure -- what should be the target for us in our model from a breakeven perspective? And what are the new segments that you're kind of investing in [indiscernible], AIS, SRFs, all these products, something which are doubling as well?

Yes. So on the AMC side, what I would say is the breakeven for us would be close to about INR 1 lakh crores with the continued mix on equity versus debt versus passes, At this point, we are actively considering both the PMS as well as the SIF. So within the next 1, 1.5 years, we will be launching these business lines.

I think we missed 1 question from Shreya. Maybe Ashish, you can answer that. The question was on the concerns on quality of loans. If you can just take that, please?

Sure. So as a marketplace, we get a ringside view of the prevailing risk and resultant countermeasures by various manufacturers. And therefore, they address the share of business that they take various manufacturers from our marketplace from time to time. As a distributor, however, from the total throughput point of view, while our mix across manufacturers changes depending upon the risk measures, this doesn't affect us being a distributor. Having said that, we have seen that 2 years ago, the risk was much higher in the market, as you can see from Bureau report. And therefore, the result and manufacturer actions especially in business loans were high. Even last year, they were significant. Over a period of time, we have seen portfolios behaving better. But anyways, we are insulated from any balance sheet and P&L impact of such a risk behaving adversely in the manufacturers portfolio. Having said that, we choose our manufacturer partners very, very carefully. And therefore, our volumes are not affected and hence, revenue is not affected. I hope that answers the question there.

Next question comes from the line of Sanketh Godha, with Avendus Spark.

My first question is on Life Insurance. So, if I still get the impact, the margin for the year was at 22 percentage. And you said that most of the mitigations are being done with respect to DSP negative impact by end of the year. So is it fair to say that in next year, if the first [indiscernible] mining will end up reporting [indiscernible] kind of a margin for the next year? That's my first question.

Vipin.

Sanketh, let me answer that. So when we say we are mitigated, what that leading means is for us, we exited March. I think for the month of March, we have mitigated almost 90%, 92% of the GST impact, [indiscernible] impact of 30, 40 bps does exist. But I think now that's part of our cost structure. Now the question on what do we mean by mitigation? What we mean by mitigation is we have changed some of our products that we sell in the market. There has been a change in the kind of products or the product mix, if I could say. Cost optimization continues for us, and we have renegotiated some of our commercial partners. Now if that continues, then that's 4.5% that annualized impact of GST that we talked about, that has been mitigated. I'm not sure of 22% that you were referring to. So if you can just tell me understand that.

In the D&D walk, the margin, what we mentioned before [indiscernible]. So I'm assuming that given we will work is the same where do you see impact broadly? I mean then with the same product, are we going to report closer to 22% margin in the next year?

Okay. So let me clarify. So that's not the way to read it. When we look that we book, we actually showed the gross GST impact. All the mitigants of that are part of ably work in terms of the new business mix and the profile that we are talking about. So the debt of INR 242 crores that you see is the gross debt the mitigation of it, let's assume that it's 100% mitigated as a March-end. That benefit is sitting in the [indiscernible] bar, that's what you are referring to.

So Vipin, because the benefit will be there for the year next year, then we will be probably assuming same business get replicated in FY '27, then the margin what we are looking at is [indiscernible] that's the point I'm asking for FY '27.

Sanketh, let me step in on that. We will -- you will not hear any affirmation or otherwise from us on margins, if you're going to indicate like this, please?

Okay. Sorry, I understood that.

And directionally, we can tell you we are in a positive trajectory. And all those changes are resulting in the positive margin, but we're not going to indicate any margin. But yes, it's [indiscernible].

Understood. Understood. And the second question probably was that is on the growth because second half, we probably operated on [indiscernible] 2.0 basically continuing with the previous base. So our growth came back to around -- so is it fair to say that this is the kind of growth that we will end up? And if that is the case that heavy lifting will be done by agency channel because that's the channel maximum [indiscernible] last year. So is it fair to say that the second half growth is more like growth going ahead and may be done by [indiscernible]?

You should see a better growth than what we saw in our second half that much I can say. And all our businesses are in our growth trajectory, various reasons. On the bulk partners, the bancassurance side, we've added 3 signing partners in the last 18 months. Federal, AU and YesBank. Now that should start kicking in. We already have a very significant base of small and medium partners, which have been growing quite well. So that trajectory is positive, and I can see that the bank assurance team is adding a lot more value to its partners by selling risk products as well now that is working for both parties. On the agency side of the business, yes, we did reconfigure. We actually stretched our reconfiguration, if you remember, in December when I told you, because we felt that there was more and more buy-in for our term plan and that the ticket size of term is obviously lower. So we recorded an 8% growth Q-on-Q for the last two quarters for agency. This, I would say, is a little understated. You should expect it to be better also because of the fact that the product mix is now largely set. And the input parameters that we are seeing in agency like the number of partners we're adding customer, number of distributors, plus the number of policies we are adding an agency. The trajectory is only positive. Then we come to quite sales and direct channel. I think that is been a healthy contributor. And we continue to innovate with data and technology there, and we can work with customers and the data we already have, to provide more and more target products and that target trajectory was also going -- undergoing a change given the fact that we did not go as expected in proprietary sales last year, but all that growth will be back. So you should expect a higher growth.

Understood. Understood. And lastly, one [indiscernible] question. On the EV side, the assumption change of INR 51 crores is predominantly related to which operating parameters, whether it's mortality or persistency?

So Sanketh, I think assumptions are holding good. You would see there has been a dip in our persistency and that's what largely [indiscernible]

Understood. Understood. And lastly, one question on general insurance. broadly, I just want to understand this reinsurance strategy. I know that we did not a lot of government businesses and our reinsurance recognitions are closer -- or our rating on a closer to 40 to 43 percentage. So -- but even if I exclude that, we typically are a little higher on feeding business now. So whether we'll repeat the strategy or we think that this will continue even going ahead, even in other lines of businesses, given and I understand the pro business is a lumpy and we need to rely on reinsurance investments.

Tapan, do you want to take that?

Yes, I don't get your question. See, reinsurances not a strategy how you build your book and wherever you see volatility on large risk. [indiscernible] Those ratios. So it depends on the competition we have. And if you look at retail, most of it you keep on your on [indiscernible]. So if you look at the government as the crop of these commercial lines of business, they would be reinsured. And then accordingly, you decide how to [indiscernible]. So the balance sheet as predicted in terms of the volatility in terms of large risk. I think how all the good companies are right the reinsurance and also to look at the rating revision. So they have to be a well-rated [indiscernible] in times of and big losses, the reinsure to support that. Just in the past also, we have seen some reagent large be it [indiscernible], we were always review [indiscernible] is also double that of what the investor looks for in terms of the [indiscernible], which would be [indiscernible]. So fundamentally, it's a very well range we can take care of any eventual looking and also given the lines of business needs that you [indiscernible]. So what is your apprehension in that?

It's not [indiscernible]. And my only question was that even in the retail epicenter, we contact our historical part, we still in more on whether the approach would be revisited or we think that's still a good thing to do.

It depends on how the market moves and what lines of business is right from [indiscernible] That send the approach has not changed. The approach to meeting depending on how the market grows, what line of revenue is writing is how the [indiscernible] operates. It's a comment on that. you don't see a strategy in terms of how you reinsure your book. You will always ensure mentioned in terms of where were the high volatility, you'll have high [indiscernible] coming in. When you have more stability in the insurance come many large risks and the reinsurance on [indiscernible] high where the payments move higher than we have the regional side. When it comes down, the reinsurance even so any of cash loss is happening. [indiscernible] for that moves up when they come down and we transfer catalysts are lower than accordingly [indiscernible]. So I think the basis for the insurance or basis of writing business is the same. Is the combination of does the market move, what is actually liking, what line of [indiscernible]. Besides how much reinsurance do you buy in more kind of tee -- how do you put that together.

Sanketh, your answer actually lies in the commercial outcomes, if you look at it. So at what price do we really get the reinsurance, what am I reinsuring? Like Tapan said, essentially, our exposure looks here on the seating side because we like write a lot of bulky business, which is crop and government health, as you rightly highlighted. On the other side, we also write a lot of large risk and that essentially because of our bank taps, we get a lot of these large accounts. So, a combination of all of these actually translates into other reinsurance strategy is. Now at the end, whether I'm making money out of it or no is what finally really matters, right? And our combined ratio vis-a-vis the industry will answer that question. So that's where we stand today.

Next question comes from the line of Divij Punjabi with Banyantree Advisers.

I had 3 questions. One was on the general insurance side. So just wanted to understand how are you seeing the competitive intensity playing out in water and group health lines of business? Second is on the Life Insurance side. What is -- how are we looking at the expected impact of the change in the commission structure that is expected to come in the next few months? And lastly, what is your strategy on the alternatives business. So there were some news around Bajaj alternatives, where we're looking to raise about $1 billion. So if you can talk about that, it would be helpful.

So if you...

Yes, Tapan, the question on motor and GMC competitive intensity.

Yes, on the [indiscernible] yes. If you look at the market, as I mentioned previously, the combined national industry has moved by about 7 percentage points on 1 quarter, move to INR 128 and move 131. Now that always happens when the intensity is high in the market. I think that is where the combined issues are moving up. So to the point that you mentioned, yes, there is company intensity in some businesses like motor, GMC, in fire also, there is [indiscernible] And I think for the last quarter more because of the UM guidelines, I think a lot of companies say above [indiscernible]. They wanted to ramp up their numbers so that they can come within either if you look at it and pick up companies which are in the AUM over 30 and look at last quarter, the recession, you will give an however it move. And then companies are good [indiscernible] Position in terms of we [indiscernible] So a lot of things depends on how the company decides to play that one. In first in mind in the continent does move up. And that is why you'll see from a company's perspective that we would slow down, as I mentioned earlier in places that we see [indiscernible] and then I think you're right, then we move up because we have no pressure of AUM. I think we are 1 of those companies or comfortable expense for management, and we are well within in terms of where we put together. So we just the right business to get our AUm right, we like business where it makes sense right.

Okay. On the life insurance side, the question was on commission. We haven't yet received any message from the IRDA. There is no drop circular yet. So a lot of this will be discussing hypothetically. But what I do understand is that the mood seems to be more on back-ending commission from front-ending, I don't know about the reduction of commission if there's any plan. Nobody has really got any reforms until we get something from them. In either case, it just executed to the team. It should only benefit the sector. It should bring down the AUM pressures, which should help the entirely persistency ratios, it should help our customers getting a better proposition, and that is the whole intent of IRDA to be able to pass benefit of the customer. So we just look for that until that comes in. It's really very difficult to say anything beyond this on this point.

Okay. On the oil [indiscernible], I'll just try to summarize. See, this was one of the white spaces we had identified being the financial services powerhouse. We realize that in oil'sl business is something which is growing pretty healthily globally also and not only in India. And we identified that as a white space last year, and we had called it out the Investor Day that this is an area we will venture into. So in the last 6 to 8 months, we've actually built up the team. And as we speak, we are planning to file -- sorry, start the PMS part to start with. We've already got approval from SEBI we should launch the listed equity and BMS very soon. On the other side, we are trying to launch some CAD II and CAD III AIF for which we have filed for approval with the regulator for a private equity AIF and a real estate AF. And hopefully, in the next quarter or so, we should get approval for that as well. So that's currently what we've done. The idea is also to get into some bit of listed equity, for which we will soon be filing for approval. And yes, so this is where we stand today. I think in the next 2 quarters is where we will actually start rolling out our new products. That's the strategy as of now. And also the idea is that we get into a give city structure to attract some NRI and foreign investors to take arbitrage of the tax benefit structure as well. So that's where we are currently beyond this. I think in the next few quarters, we will -- start talking about it as and when the business is launched.

Next question comes from the line of Nidhesh Jain with Investec.

My first question is on Life Insurance. So on persistency, what is happening in your view at the industry level and for you also that persistency after improving both for 4, 5 years? This year, we are seeing decline across the companies on persistency. And how do you see persistency trends going forward?

Yes. So that's a very question, and that's something that worries all of us and is a focus segment of the sector. Overall, if you look at it, there was the set of products, which were induced by a few market leaders about 12 to 18 months back. These products were early gratification products for the customer. And we did see people than not continuing once they did get benefits already available. Now that we were all expecting lower persistency in this sector, and we have just seen the result of that, it's the swing has been more than the expectation. But largely, there's just one bucket that has impacted the entire sector. So while we've grown by -- we give it by about 1.8%, we expect that the sector is actually doing even further. We had this product with us earlier, but we didn't launch it until it was becoming imitable that we have to do it in the market because distribution was just tapping on to this product. I think we -- hopefully, the entire sector is loan to close and we don't motile this. Again, as far as we are concerned, we stopped selling this product. And since October has anyway been bringing it down. At the same time, has it impacted profitability more because the persistency was already baked in in the entire process. But these kind of things should largely be awarded in the sectors. [indiscernible] I would answer that question.

Sure, sure. Secondly, if you look at the data in terms of household pieces, so protection any, I think they are growing at a very healthy pace. On the savings side, what we are seeing that the preference towards mutual funds and equities has been increasing, and it's not just a 1-year trend. It has been a quite secular trend for last 4, 5 years. So in that context and life insurance deposits are losing share in the household savings. So in that context, how as an industry as a large bet insurance company, how do we plan for next, let's say, 5 years? Because I think every year, the share of household savings towards insurance is gradually at a very gaps, but it is declining for sure. So how we stay relevant from a savings to capture the savings pie of a household?

Okay. That's a very good question. And I'm sure most people [indiscernible]. The way you've already -- the way we've looked at it all is very different. We have ridden the SIP market in Bajaj Life as well. We today sell a lot of our unit plans in what we call as CSO. It's a trademark that we take. It's a systematic out plan where you put in money every month into [indiscernible] and over a period of time, take the benefit of staying in the market for longer and take the benefit of then getting equivalent to monthly benefits over a period of your lifetime. For under INR 250,000 excise, this product also has all tax rates available. So it's actually a very sweet spot and it's something that is growing for us. We've looked at the entire market and nobody has been able to run this distribution within the annual mode products. We expect that to bring in a lot more of the benefits that second-market in in. As for the rest of the product architecture, a lot of that is on structured benefits available to customers. And we are largely linked to life goals, whether they are on child savings, they are on long-term savings and cost mortality and the risk and longevity. These risks are real. And while a lot of our spaces, the mutual fund market is also pretty much playing and which is why we see the group has -- whether the group does have another mutual fund and a life insurance company, we play in the same space sometimes of course, but it's a product in within a different task, and a different benefit. So an annuity product, for example, is something that people cannot produce but life insurance companies with a long-term guarantees. And that, as you see as the trend has been going up. But that's a very healthy trend, I would say, because nobody else can offer that. So there's some unique spaces we have and largely in structured products. And we expect those to just keep growing as there is more wealth in the hand of intense because you see is a positive trend in that case. The rest, of course, is also linked to the distribution we were creating, and there is still so much more scope. If you note in the life insurance sector is possibly invested most in terms of number of branches from time sales and the number of advisers that we have. Having that should only just keep growing in the future. So that has always remain a positive for the sector.

Sure. And my 2 questions is on the other businesses, which is Finserv markets. So if I look at Finserv market, that revenue has been quite flattish for a long time. It's a digital business. Ideally, it should grow at a pretty healthy pace. I think that I think the last 15, 16 quarters, the revenue has been flattish. So what is the strategy here? And what is going on there?

Ashish?

The company has -- okay, I'll break this into 2 parts. The company has 2 divisions. What we call is Bajaj markets as customer-facing names is our marketplace in BFSI. And there, we have 100-plus manufacturers as our partners across lending, insurance, AMCs, credit card offered by banks and so on and so forth. There, the revenues grew healthily up until FY '26, wearing as Raman says in his presentation owing to our migration of platform and owing to the need we compliant to RBI's new DLD guidelines, we had decreased revenues for one year, but the revenues are coming back on to track in FY '27 as per our plan. Also, the nature of the revenues is changing. Now we have a few partnerships which have trailed revenue, which provided stability and nonlinearity, which will play out as the quarters passed by. And you shall see that are stated in of breakeven very soon, early by the end of this year is a possibility as the quarters pass by within this year. The second reason is that over the last 4 years, we have invested in building our technology services business. It is a business that leverages the group's technology capabilities. And by that, I don't mean only our companies, but across all group companies, we offered these technology solutions to companies within the group, then we went outside of the group to the rest of the companies in India and offered it to some other companies. Then we went to Middle East. And now we have established a subsidiary in U.S. And therefore, this pace of investment in technology services as a parallel business. As for the long-range strategy that we have for the company, has also meant that outwardly looking, the revenues look flattish, but both the businesses are poised to deliver, and you will see it in the coming quarters.

Sure, sure. And lastly, if you can share the number of paying users in Balaji Finserv Health. I think Bajaj Finserv Health is showing decent growth now, but our converting account of paying users there.

We are just looking at the data. Maybe we can take this -- give it to you off-line. [indiscernible] give it in -- we don't have it handy.

The last question comes from the line of Nischint Chawathe, with Kotak.

Just continuing with health. When do you -- based on the current business, [indiscernible], when do you really expect to breakeven?

I think we are about two years from that is what we have envisaged. So if you look at the business model the way we've built it over a period of time, and I think we called it out during our Investor Day also. From the scale perspective, I think we've achieved a significant part of it. We are seeing that the growth is healthy, 40%, 50% quarter-on-quarter number of transactions are just moving up. I think it is the point at which the operating efficiency start kicking in. And what we did in our LRS was that, I think 24 months from now, we should start seeing an operating breakeven. That's where we stand today. Now this is where I think it basis current estimate. Now closer after we do the next year's LRS, maybe we'll give you more final number in the quarter of which year will be a breakeven.

And Finserv markets, are you also looking at sort of an aggregator model like probably what a [indiscernible] is going?

Ashish?

As the marketplace most Pesa Bajaj, as I understand it, and are not too different online. And there, they have various manufacturers signed up with them. We do have our own set of manufacturers who have signed up with us. Off-line, I'm not sure what you mean by aggregators that is generally the term used by DSAs or in the offline world. We have our own omnichannel methods but those are mostly to complete the customer journey and to assist the customers to come online. So if you mean doing a DSA business pure offline, then no, that's not the plan.

Got it. Got it. Just talking about IFRS. You did mention that you kind of worked out your numbers under IFRS 17, so I was curious why would you sort of not declare those numbers or not follow the IFRS 17 guidelines from June?

See Nischint, as you know that there is a lot of ambiguity around certain assumptions, which one has to take while drawing the IFRS numbers. For example, in the level of aggregation currently also different companies who are reporting to our idea following different methodologies. And so given the quantum of lack of clarity, which is there today in terms of standardizing things across various constituents, I think it's too early to start publishing these numbers. So if we were a monoline player, then it was fairly easy. We could have died. But for a multiline player like us, taking a call without having any clarity from the regulator or the industry as such, even the council can decide may not be the right thing because we will end up reporting something and then you have to tweak it a little later. So as an industry, at a council level, we've been working jointly with the other insurers to bring some kind of uniformity in terms of various decisions one has to take. Now either the regulator can decide and let us know for which I am told that committee has been formed and soon, we should get some clarity on some of these matters or as an industry, we will have to take a call. So this is just one example. Then there are many more things like, for example, what are the tax repetitions or whatever calls we will take 1 on the opening adjustments, what will be the tax repercussion. So there are multiple such things on which clarity is still awaited. And hence, we don't believe it's wise to go live before clarity emerges either from the regulator or from the council and there's uniformity across players. So this is where we stand today. And hence, you would have seen in most of the companies who have announced the results have anyway said that they are looking for bearings for a year, barring some of the monoline ones because they are relatively in an easier position. But amongst the multiline players in GI and even the larger players on the life side, I think everybody is in a similar situation and awaiting clarity. And hopefully, from 1st of April '27, you will see most of us start publishing the numbers.

Just one -- small one on the health side, right, on the retail health side, you've seen a fair amount of growing retail health business post the GST cut. How do we -- how has been the trend with you because we just had to see the overall growth number, we don't get to see the split between new and renewal. So if could give some color on that. Where you want to take that?

Avais, do you want to take that?

[indiscernible]

The retail was 17%?

[indiscernible] Industry whatever in, but also over the investor world for them. But health is important things from countries or also to [indiscernible] Will be there, but initially, if there was an upside. But overall, I will be coming back to normality the businesses.

Got it. Got it. And just one last one, the Wealth business comes under which company or which vertical?

So the Wealth company is being set up under Bajaj Finance.

Thank you. and gentlemen, that was the last question for today. We have reached the end of question-and-answer session. I now hand the conference over to the management for closing comments.

Thank you for all the nice questions. And I think there was one question which is in unanswered, and Nidhesh we will just reply to that offline. Thank you, everybody, and have a good evening.

Thank you.

Thank you. On behalf of Bajaj Finserv Limited, this concludes this conference. Thank you for joining us. You may now disconnect your lines.