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Bajaj Finserv Ltd
Earnings Call Analysis
Q2-2024 Analysis
Bajaj Finserv Ltd
A strong growth narrative emerged from the earnings call, positioning the company in a positive frame against the broader industry trends. It was particularly impressive to witness an individual rated new business growth of 32%, significantly surpassing the industry's and private players' average of 13% and 16%, respectively. The term segment showcased a staggering 82% growth, reinforcing the company's expanding market influence. Amidst these developments, the profit after tax rose meaningfully by 21% year over year, effecting a total ascent from INR 160 crores to INR 193 crore.
The company's ability to retain customers is evidenced by the improved persistency rates, with the 13-month persistency reaching 83% and the 49th and 61st month persistency rates climbing to 63% and 50%, respectively. This has directly translated into a substantial 31% growth in renewal premium, highlighting the company's success in maintaining its customer base over time.
Overcoming market volatilities, especially related to unrealized mark-to-market (MTM) losses, the company's core profit after tax witnessed an enhancement by 27%. Even with a reported MTM loss increase, the consolidated profit after tax stood robust, marking a 24% increase year over year.
The impressive business diversification has been clearly paying off, with an advanced premium upsurge of approximately 33% in the first half. The driving force behind this surge is the 2-wheeler business, indicating a strategic market adaptation .
Despite experiencing a slight decrease in business share from 25% to 23%, the company has retained a consistent wallet share within its primary bank partnership at 28-29%. The indication here is that strategic ties remain strong, and the company's investment into new businesses and distribution channels are at early stages with anticipation of future throughput. The narrative continues to suggest a future-oriented growth stance, with the company poised for further partnership expansions.
The combined ratio, a key indicator of profitability in the insurance industry, has been kept close to 100% as a strategic maneuver. However, due to ongoing investments, it is anticipated to modestly exceed 100% in the coming quarters. This approach indicates controlled business expansion with a deliberate balance between growth and profitability.
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Ladies and gentlemen, good day, and welcome to Bajaj Finserv Limited Q2 FY 2023-24 Analyst Conference Call hosted by JM Financial. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sameer Bhise from JM Financial. Thank you, and over to you, sir.
Thank you, [indiscernible]. Good morning, everyone, and welcome to the 2Q FY '24 earnings conference call of Bajaj Finserv Limited. First of all, I would like to thank the management of Bajaj Finserv for giving us this opportunity to host the call. As usual, we will have opening remarks from the management team and post which we will open the floor from Q&A. From the management team today, we have Mr. S. Sreenivasan, CFO, Bajaj Finserv Limited; Mr. Tapan Singhel, CEO, Bajaj Allianz, General Insurance Company; Mr. Ramandeep Singh Sahni, CFO, Bajaj Allianz, General Insurance Company; Mr. Bharat Kalsi, CFO of Bajaj Allianz Life Insurance Company and CEOs of Bajaj Finserv Direct, Mr. Ashish Panchal, and CEO of Bajaj Finserv Health, Mr. Devang Mody. With that, I would now like to hand over the floor to Mr. Sreenivasan for his opening remarks. Thank you.
Good morning, everybody. I welcome all of you to the conference call to discuss the results of Bajaj Finserv Limited for Q2 FY '24, which also is the half year ended September 2023. I must apologize for the slight delay on the technology front and I apologize for that on behalf of the company. As before, in this call, we will largely be concentrating on the consolidated results as well as the results of our insurance operations to Bajaj Allianz General Insurance Company, BAGIC. And Bajaj Allianz Life Insurance, BALIC. And where materials as stand-alone results of our company Bajaj Finserv BFS. Bajaj Finance Limited, BFL, which is another major subsidiary of ours, has already had its conference call on 17 October, 2023. However, if there are any high-level questions on BFL, we would be glad to take that as well. We will not be taking any questions on the status of Allianz's stake in our insurance companies. The status has remained the same as at the end of the previous quarter, and there is no further update on that. Any statements that may look like forward-looking statements are just estimates and do not constitute an assurance or indication of any future performance result. Now remarks on Ind AS, as required by regulation, BFS prepares its financials in compliance with Indian Accounting Standards or Ind AS. Insurance companies are not yet covered under Ind AS. They have prepared Ind AS financials only for the purpose of consolidation. Accordingly, for BAGIC and BALIC, stand-alone numbers reported are based on non-Ind AS accounting standards, Indian GAAP as applicable to insurance companies. Our results, the press release accompanying the results and our investor deck have been uploaded on our website on Friday. And I do hope all of you are aware of chance to go through the same. I will now move on to the business update. I will start with our mutual fund business, Bajaj Finserv Asset Management. Our AMC commenced business in this quarter, launching liquid Flexi cap and arbitrage funds. We have provided an update on this business in our investor presentation, and we'll continue updating you every quarter. The total assets under management stood at INR 5,235 crores at 30 September 2023, with a market position of 29 out of 42. Over the next few months, BFS AMC will be launching other categories of funds, including balance funds, ETFs, et cetera. The start has been good. However, as you may be aware, the asset accumulation in the mutual fund business happens over the long term with SIPs and other formats of investments used by retail customers, we hope to be able to continue the initial momentum going forward. Now for the update on the performance for Q2 FY '24. Macroeconomic conditions were favourable during the quarter with a higher level of business confidence in this conducive environment, our companies have once again delivered a very strong operating performance. Let me start with BAGIC. In the previous quarter, we have explained how some of the initiatives we have invested in, in late FY '22 and FY '23, such as focusing on smaller tier towns with a multichannel model, expansion of distribution, doing more with bancassurance partners and increasing presence in the large ticker corporate segment was starting to bear fruit in terms of growth. I'm glad to report that this quarter to BAGIC continued the momentum that we had an excellent quarter on both the growth and profitability front. Headline gross domestic premium income GDPI increased 53.6% Y-o-Y as we reported already, while core GWP, excluding tender-driven crop and government health business grew 22.4%, both well in excess of the industry growth of 16.1%. BAGIC also has reported a 95.3% combined ratio, measured as defined by the IRDA along with an underwriting profit of INR 37 crores, which is its best performance over the last several quarters. With the aid of higher investment yields supported by strong growth in AUM, BAGIC recorded 39% growth in profit after tax. In Q2, BAGIC continued its growth in motor business, recording strong growth of 20% in the 2-wheeler segment and 17% in private cars. BAGIC continues to be selective on the commercial vehicle segment, where it focuses on the lower risk and profitability, and hence, this segment grew at a muted rate at 6%. Commercial lines which include property engineering liability across MSME, SME and large corporate segment grew 8.6% as rental industry growth of 6%. A note on the earned premium. When growth is strong in the General Insurance business, the earned premium grows less than the gross premium. As premiums are deferred across the tenure of the policies, while costs are written off upfront. As a result, you may note that net earned premium grew only 8% in this quarter, but this unearned premium is expected to get mostly under the subsequent quarters of this year and the first half of next year. Although I must caution here that growth in GWP continues strongly, the additional premium will also take longer to get planned. For Q2 FY '24, the loss ratio was 78% as against 75.5% in Q2 FY '23. The combined ratio for Q2 FY '24, as I mentioned earlier, was a healthy 95.3% as compared to 99.8% in Q2 FY '23 driven by better expense ratios and reinsurance terms is the lowest combined ratio in the last 14 quarters. We expect this will be one of the best among [indiscernible] insurers of companies of comparable size. During the quarter, BAGIC reported an underwriting profit of INR 37 crores as against a loss of INR 18 crores in Q2 of FY 2023. In a market which is intensely price competitive, this operating result, we believe display BAGIC's commitment to a balanced and profitable growth on the back of strong sourcing, claims management and effective customer service, as indicated by low Grievance ratios, high LTAs and low claim repudiation ratios. This balance, we believe, is very important for sustaining profitability in the general insurance space. Profit after tax of BAGIC at INR 468 crore in Q2 FY '24 was higher by 39% as compared to INR 336 crores in Q2 of FY '23. The higher profit after tax was attributable to better underwriting results and better investment performance, including higher profit on sale of [indiscernible]. BAGIC AUM grew by 13% to INR 29,511 crores as on 30 September, 2023 versus INR 26,052 crores as on 30 September '22. The advanced premium from long-term policies was INR 1,643 crores as of 30th September '23, which is higher by 33% over September '22. In summary, an excellent quarter for BAGIC. I must or reiterate that insurance is a long-term business and subject to volatility in claims. We do believe that focusing on core principles of balancing growth with profitability and quality should keep BAGIC in good stead in the coming quarters as well. I will move to BALIC now. In the previous quarter, BALIC reported muted growth in NBV although growth in individual rated business was strong. We had mentioned in our call that we had chosen the relatively flat Q1 for launching a new ULE product, which is low margin, and we cause the NBV growth to be muted. We have further indicated that we are taking steps to balance the product mix. I am pleased to report that with the launch of the AS participating product, BALIC has been able to correct the product mix and return to a healthy NBV growth. During the quarter, BALIC continued its above-market growth trajectory and reported an individual rated new business growth of 32% against the industry and private players growth of 13% and 16%, respectively. The market share in IR&D terms increased from 7.3% in Q2 FY '23 to 8.2% in Q2 FY '24 among the private players, leading to BALIC, maintaining its ranking on a IR%D basis at fixed position and fixed provision based on retail regular LD policies. BALIC's 2 years IR&D year of 32% in Q2 FY '24 is among the highest in the industry. The total number of policies for BALIC grew 23% to 3.16 lakhs in H1 FY '24, which is the third position among private players and with the growth in Q2 being even higher at 27%. Overall, IR&D mix for Q2 FY '24 stood at par 32%, non-par savings 24%, from 4%, annuity 5% and unit 34%. As compared to Q1, par mix has improved by 19% and unit mix has dropped by 8%. In absolute terms, we have seen a significant growth this quarter in the term segment at 82% as compared to Q2 FY '23 and 9% as compared to Q1 of FY '24. During the quarter, growth was broad-based and driven by all the main channels with agency institutional business and BALIC direct growing at 34%, 31% and 35%, respectively. During this year, BAGIC, BALIC started activating several of the recently signed corporate agency tiers, retail small finance banks, South Indian Bank, Development Bank of Singapore, City Union Bank, Tamilnad Mercantile Bank, Punjab & Sind Bank and Jammu & Kashmir Bank. Moreover, with the opening of a rep up within Dubai, BALIC it looks to further strengthen their institutional business. BALIC now has a reasonably large number of bancassurance tie-ups, which should help reduce concentration risk on its institutional business over the next few years. Another point I would like to highlight here is the various initiatives undertaken by BALIC to improve persistency across most cohorts, especially in the later markets. As at 30 September 2023, the 13-month persistency stood at 83%, the 49th and 61st month efficiency have improved to 63% and 50%, respectively. The increase in persistency over the last few years had delivered a strong growth of 31% in renewal premium in Q2 of FY '24. New business value, net of all expense overruns grew by 25% from INR 190 crores in Q2 FY '23 to INR 237 crores in Q2 FY '24, mainly due to a change in product mix and interest rate movement. Profit after tax grew by 21% from INR 160 crores in Q2 FY '23 to INR 193 crore in Q2 FY '24, supported by higher shareholder income, lower debt claims and partially offset by higher new business gain on account of business growth. Overall, a good balanced quarter for BALIC with a strong focus on retail distribution growth. We also saw BALIC bouncing back in profitability from Q1. Finally, both the insurance companies are financially among the most solvent, BALIC 466% solvency and BAGIC 352% and hence, are well poised together any external adversity. Let me move on lending business, BFL and BHFL. Q2 FY '24 was another excellent quarter for BFL, the company delivering on all its long-term financial guidance metrics, the AUM and profit growth, return on assets, return on equity as well as growth in net NPA. Continuing its growth story, BFL acquired 45.8 lakh new customers in Q2 FY '24. The total customer franchise as on 30 September '23, stood at INR 7.66 crore, while the cross-sell franchise stood at INR 4.67 crore. Building on this customer franchise, the number of new loans booked in Q2 FY '24 increased by 26% from 67.6 lakhs in Q2 FY '23 to 85.3 lakhs in Q2 FY ‘24. The company's diversified business model has enabled us to record a strong AUM growth as seen from the total AUM at INR 290,000-odd crores as on 30 September, which is 33% higher compared with the 218,000-odd crores on 30 September, 2022. The quality of the book continues to be very strong with a gross NPL net NPA being 0.91% and 0.31%, respectively, as against 1.17% and 0.44% at the end of Q2 of last year. BFL holds a management and macroeconomic overlay of INR 740 crores as of 30 September ‘23. The company has released INR 100 crores from the overlay in Q2. BFL ended the quarter with a consolidated profit after tax of INR 3,551 crores, which is 28% more than the Q2 FY '23 PAT of INR 2,781 crores. The capital adequacy ratio, including Tier 2 capital as of 30 September, '23 remained strong at 23.19%. The Tier 1 capital stood at 21.88%. Bajaj Housing Finance Limited, the 100% mortgage subsidiary of BFL continues to do well. AUM grew by 29% to INR 81,215 crores as of 30 September '23 from INR 63,931 crores around 30 September '22. Profit after tax grew 47% to INR 451 crores in Q2 FY '24 against INR 306 crores in FY '23. The capital adequacy ratio stood at 22.64%. The GNPA and NNPA stood at 0.24% and 0.09% at 30 September '23. In summary, another very strong quarter for both BFL and BHFL. Now I'll give you some update on our platform companies, Bajaj Markets, Bajaj Finserv Direct, which is also for Bajaj Markets, and Bajaj Finserv Health. During Q2 FY '24, Bajaj Markets attracted around INR 1 crore consumers on its digital platform, of which 2.3 lakh began customers as against 87 lakh and 3.3 lakh customers in Q1 FY '24. The lending unsecured and secured lending of both BFL and partnership business disbursement for the quarter stood at INR 1,658 crores as against INR 1,427 crores in Q1 of FY '24. It also sourced 82,818 cards as against 74,146 credit cards in Q1 FY '24. In all these metrics in our markets have shown quarter-on-quarter growth. In terms of Bajaj Finserv Health, they carried out 12.37 lakh health transactions versus INR 7.2 lakhs in FY '23-- having 3.4 lakh plus monthly active users. For the quarter, Bajaj Finserv Health had 15.74 lakh day users versus 8.09 lakhs in Q2 FY '23 with 4.3 lakh users having renewable products versus INR 2.27 lakhs in Q2 FY '23. Bajaj Finserv Health is also expanding its provider network, which currently includes 103,000 odd doctors, 5,500 lab touch points, 2,000-odd hospitals. Using the network strength Bajaj Finserv Health is able to offer and service differentiated product plans for both retail as well as to corporates for employee health benefits segment. In summary, both our emerging businesses have done very well in Q2 of FY '24. I will now come to the highlights of our consolidated financial results, which reflect all of these and which has been put up in our press release on 27 October. Consolidated total income at INR 26,023crore was up 25% over INR 20,803 crores in the same quarter of previous year. The consolidated profit after tax was up 24% at INR 1,929 crores versus INR 1,557 crores. Under Ind AS, the insurance subsidiaries have chosen to hold a large part of the equity securities portfolio at fair value through the profit and loss account, which results in unrealized mark-to-market gains and losses on investments, getting included in the consolidated profit. The amount was a loss of INR 72 crore in Q2 FY 'M24 versus a loss of INR 21 crore in Q2 FY '23. If one were to exclude the volatile impact of MTM losses and gains, the core profit after tax would have increased by 27% in Q2 of FY '24. Before concluding, let me just highlight the half year numbers as well. BFL recorded top line growth of 34% in H1 FY '24 at INR 49,303 crore. The consolidated profit after tax is a 35% increase of INR 3,872 crores. BFLs consolidated total income at INR 25,882 crores, which is a 34% increase, and a consolidated profit after tax at INR 6,088 crores with a 30% increase. The ROE for the 6 months, not annualized was 12.2% versus 11.7%. BAGIC recorded a 41% increase in premium at INR 11,132 crore, 18% increase in profit after tax of INR 883 crore and an ROE of 8.9% versus 8.6%, not annualized for the 6 months ended 30th September '23. The combined ratio for the 6 months was 97.6% versus 102% in the same half year of last year. BALIC is reported a gross written premium increase of 10%, and IR&D premium growth in excess of 30%. Profit after tax increase of 23% and in NBV increase of 2%, 331 versus 325. Before we open for questions, concerning the positive of time, I would request the audience to keep their questions brief and not repeat questions which have already been answered so that we can cover more queries during the call. With this, I invite questions from the audience.
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Our first question is from the line of Swarnabha Mukherjee from B&K Securities. Please go ahead.
Thanks for the opportunity and congrats on a good set of numbers. So I had a few questions on BAGIC, BALIC. So firstly, on BAGIC, regarding the tender on the government health side, I just wanted to understand in your presentation, you have highlighted that there is an impact that has come in worsening of the loss ratio for the health segment. So if you could call out whether this 8.5-odd percentage point impact is only due to government health or the loss ratios maybe of the 3 health segments separately, that would be very useful. And also, in terms of the invert reinsurance commissions, what would be the quantification as a percentage of NWP that would also be very helpful. In terms of the profits, I think the profits were supported very significantly by the investment income. So I wanted to know whether that would be sustainable or not? How should we think about it? For BALIC, I just wanted to understand the VNB margins on a 12-month roading basis, we are still below what it was last year. So I understand that first half has been largely driven by ULIP and PAT. So how should we think about the second half? Do we plan to push on PAT products? What is the appetite you are seeing on that side? So comments on VNB margin on that and also factoring in the UM guidelines, what would be your strategy for that? And one bookkeeping question on BALIC is, if you could call out the share of Axis Bank in our IR&D and counterargue -- and lastly, one quick question on Bajaj Health. So in the presentation, you see an increase in terms of insurance partners on both life and general insurance side. So if you could highlight who you have tied up with? And what is the kind of scale you expect out of these partnerships?
Thank you. I think it is again Bajaj Finserv Markets, I think we are talking about in terms of increasing the number of partners and health as well. Okay. You have asked a few questions. The first one was on the health loss ratios and the government health scheme on budget. The second was on the investment income and whether it was sustainable. And the third was on the reinsurance commissions and how much it was as a percentage of NWP. In terms of life, you wanted to know why the 12-month rolling margin is still lower than the same period of last year and you want to know what is the concentration of business on access. And on Bajaj Finserv Health, you wanted to know the onboarding of additional partners on the insurance side. So I will first start with Raman to take the 3 questions on the general insurance side, followed by Bharat and then Devang.
So I'll take the first question on the health portfolio. To answer your question whether the loss ratios have worsened in all the segments, answer is no. Actually, if you break the segments in 4 parts. One is retail health. There, the loss ratios have indeed improved versus last year. We had seen a lot of increase in severity in the last few quarters. That is kind of getting negated now because we had mentioned, if you recall in the call 2 quarters back, that we were seeing a lot of fraud happening. And some of that is getting addressed now. So that's why the retail health loss ratios have started coming down. On GMC, the loss ratios have been constant, and they are better than what we used to see pre-pandemic and that trend continues. The other piece is also on retail on the group platform, we also write a lot of credit-linked products. There also the loss ratios have been very healthy and they continue. So to summarize, the only place where loss ratios seem to be higher, are only because of the government health business in Gujarat, which we've retain. And there also, just to give you a flavor, the way that normally these accounts work in the initial part, when we take over the portfolio from another insurer. The first quarter normally has a lot of backlog getting reported. Now some of them, because of the transition from one insurer to the other is not actually due but reported. And hence, you see in the first quarter, the loss ratios normally shoot up. And then over a period of time, they settle down, and that's what we are seeing now also. But the way we do the accounting because these are reported losses but not settled, we will obviously account for it in the financial statements. So that's just to give you a flavor of the health loss ratios. Coming to the investment income, the big chunk of increase you're seeing is coming from the advanced premium moving up. While obviously, the investment performance has been good overall, that's because the yields have moved up in the last few years -- few quarters, I would rather say -- and overall yields for the companies have moved up and hence, that benefit. But the larger chunk comes from the advanced premium moving up. And like Sreeni summarized earlier, the advanced [indiscernible] has actually grown by almost 33% for H1 from about INR 1,250 crores last year same period to about INR 1,650 crores. So that's the big delta we are seeing now whether this sustains actually depends on how much of motor business we write, especially the long-term on or 2-wheeler and 4-wheeler. So it will depend on that. And obviously, the yields depending on the market. Now also, as we've discussed in the past, a big chunk of this growth in advanced premium for us is coming because of the 2-wheeler business, handicap used to run in the past. We don't call it a anticap anymore. Because our market share, which 2 years back on 2-wheeler fresh business used to be less than 4%, and now that's moved up significantly. And this quarter, in fact, that market share was upwards of 9%. So that handicap which was there earlier is now behind us. So barring one OEM, we've now tied up with almost all the OEMs, and that's why you see this significant growth coming in the long-term business and because of that in the advanced premium. So this is just to answer on the questions you radon BAGIC.
Sir, actually, if you could address the reinsurance commission as a percent -- in what commission as a percentage of NWP? And just to clarify, what you're saying is that the impact on loss ratios from the government sense will unwind later on?
I think what Raman indicated is that we have priced the government scheme based on our expectation of loss ratios, and this is also reinsured. I think almost 80% is reinsured, if I'm not mistaken. And therefore, the expected loss ratios do consider in a liability policy, usually, there are claims made basis or claims incurred basis. But in an annually renewable policy like this way claims made, that is any claim reported after the new insurer takes over is treated as part of this 1 year tender. So this is in a way what Raman indicated will price into the product. Now we'll have to wait and see over the next 2, 3 quarters, whether that falls in line with our expectation or not.
Got it, sir.
Also on the RI commission, you wanted to know the percentage, right?
Percentage of NWP, if you could give an indication.
For the numbers, we have to NWP handy, but the RI commission to seeded is about 14.5% for quarter 2.
Okay. Got it, sir. Thank you.
So I'll take the 3 questions on the BALIC part. The first question was on the overall NBN growth on the H1 basis. So see, as we've been mentioning is that, as of now, we are investing into so many new businesses, whether it is signed up with a new partner, which Srinee also covered that we have signed up with 6, 7 more bancassurance partners. We are at the very early stage, where we are as of now investing more than actually the throughput is there. Secondly, if you look at that, we have also started investing a lot more in the D&C channel in terms of our new business lines or the channel within that channel. Again, they all are at a very early stage of the say, business expansion. And in there, NBV or NDM signature is lower. We've always been saying is that, for us, what matters is the NBV growth. And if you look at our NBV growth has been 22% on a rolling 12-month basis also. So to that extent, I think it's a mixture of too many things moving. Within that, if you also look at that, our group protection has not grown, which typically is a higher margin business. That all is playing in, but our NBV strong growth of 22% is there. So that's the one on the NBV part. With respect to Axis Bank, our share in the business has come down from 25% to 23%. But in terms of the wallet share within the excess franchise, we are there and thereabout at 28%, 29%, which is consistent to what it was last year. Axis Bank has been a good growth for us also even in the, say, H1 basis, the bank franchises for us has grown by 14%. Our overall growth is 24%. So the share is coming down, but it is still a good share in terms of our business. That was the second question. Anything else was there second part? Anything else on, sir?
No, sir, on Bajaj Health--
Yes. So I think -- Devang Mody here. So we work with all general insurance stand-alone health insurance as well as life insurance insurers to roll out the health care benefit for their customers. We obviously are very proud to be servicing both our group companies on GI side as well as Life side. In last quarter, we have added one size player. It would be inappropriate for us to name the players as well as one life insurer. And we are working with a lot of them to roll out our proposition to their customers. It's a long run process. We create a proposition. They have to file the product. We have to integrate the systems then they have to take it to their distribution. So we are very happy with the progress. And in coming time, we are confident that we will be able to work with more and more players. I hope it answers the question well.
Thank you. Our next question is from the line of Bhavesh Kanani from ASK Investment Managers. Please go ahead.
Thanks for taking the question. My question was on BALIC -- BAGIC, where we have seen the expense ratio coming down much lower than the surgical trend we have seen. So if you can help us and on the reasons doing well.
So if you look at the expense ratio, if you see first the GWP growth, which we've registered that is extraordinarily high because of the government health business, which we've rated. And that's why you see the ratio factoring in this large bulky business, which has got reported, it's looking like a very nominal number. So that's one reason why the expense ratio is looking abnormally low is what I would say. As we -- as the business gets normalized over a period of time, you will see it the ratio also normalize. And what we've said in the past, the ratio is amongst the healthiest in the market, and we will continue to endeavour to do that. And yes, that's how I would summarize it.
But it's also down on absolute basis year-on-year. And even the base quarter also had a fair bit share, in fact, a higher share of the premium collected in Q2 '23?
Yes, overall, also, if you see -- you're right, if you look at the numbers on totality, expense plus acquisition costs, net acquisition cost is down by almost 7% on a totality basis. But if I see it, excluding the bulky businesses of crop and government has also, it's down by about 1.3% is what I recall. That's largely because of the growth we've registered, but we've not invested that much in business. And that's why you're seeing the ratio improve. And what we've cautioned in the past, as an organization during the pandemic, we had actually scaled down a lot, and we will be scaling up now. In fact, if you look at our employee count, pre-pandemic, we find out -- sorry, during the pandemic, we had gone down to almost 7,700 people. And now we've already reached upwards of 10,000 people. So while the loss ratio -- sorry, the expense ratio this quarter is looking a little lower because of the high growth. But just a word of caution is that for the next few quarters, because we are still investing in manpower, and we had also mentioned that we are getting into the rural parts of the country. So we are adding new branches there. So it may move up a little. But like I mentioned earlier, we will still continue to strive to be amongst the lowest in the industry.
So in fact, we should not be taking this 95% combined as sustainable. What kind of number would you be targeting on a full year basis, sir?
There are endeavours always to be better than the market. Now the market, however, unusually high. We know that the overall market is at 116%, but what we've been registering is close to 100%, and that's why we will endeavour for. And earlier, our journey used to be to aim at less than 100, but because of the investments we are doing now, which I mentioned a little earlier, we will probably be a little over 100% for the next few quarters is what I would guide.
But let me give you -- let me add to what Raman said. I think there are multiple sources here. One is, obviously, how the loss ratio moves. There are different segments, some of which have been favorable, some not so favorable, as highlighted earlier by Raman. And now they will pan out over the next 6 months is one factor. The second is the earned premium growth has been low. So when you look at expense ratio as a percentage of premium, there will be one factor which should result in a higher earnings on the existing business that we have returned. And the third is the investment that we will continue to make. The advantage of the investment is if the growth comes next year also, we will get the benefit of operating leverage. And BAGIC as overall, on an expense ratio, they would like to be among the best in the market. So that journey will continue. And we hope over the next few quarters, we'll be able to make it up. But as a combined ratio, we normally try to say that we would like to be below 100. Because if you want to be at 90%, you have too much of business and the incremental business you give to get the incremental profit is actually we may lose market share or market position. So that is something that we balance have been doing that over the years, and we'll continue to do that.
Thank you. Our next question is from the line of Sanketh Godha from Avendus Spark. Please go ahead.
Thank you for the opportunity. Sir, on group health, given you highlighted that 80% of the business is ceded. So considering the reinsurance commission, do you believe this business is less than 100 combined product ultimately this needs, or it will invariably will be a little higher than the company average? I just wanted to understand the logic of doing the business, are you confident that with reinsurance, it can be still delivered below 100 combined? That's my first question.
A broad answer, which should answer the question unless another one wants to add to it. In insurance, you always do business on expectation of profit. In the same way that customers expect that there will be a claim, and that is why they take insurance. The insurance company also has a certain probability of making money. So I definitely know that I want to lose money now do that business. At least BAGIC would never do that. Therefore, in this business, our whole quotations are based on expectation of profit based on the data that we have on the past year and increased the number of people, the type of investors covered and various other things, the hospital rates that have been negotiated by the state government and various other things. So our expectation is that it should be -- and on a total basis, it is priced to be a favorable combined ratio. I think I'll now give it to Tapan because he is an expert in this subject, and we can add a lot of flavor on how BAGIC approaches this. Tapan?
Yes. But I think what you -- yes, Sreeni, what you said is right. So I don't think anybody writes business thinking that this is how it is going to be. These are difficult complex businesses, and we have expertise to handle government and business, and that's why add new business. And obviously, the outcome will depend on how the year goes by, if you have something like what happened in the period outbreak of some kind of illness or disease. -- the last thing it moves up, if it normalizes, it comes on it's all calculated when we put up the [indiscernible]. So I think you already mentioned it well.
Got it, sir. And the reason I was asking that this government has probably the float is not there because the government pays premium a little later, cash doesn't come in upfront. So it should be substantially below 95% combined to make ROE which company reports. Sir, just wondering whether the pricing is...
Gujarat, we have the condition of the government is paying premium on. So it is there. So I mean, that's why I say there are a lot of things that you add on to it, to look into how the business gets done.
Got it, sir. And on BAGIC one last, on crop, just wondering, given first half, we have grown -- we have declined compared to first half of last year, whether with our ability to maintain the INR 2760 crores of business what we did last year in crop could be sustained in the current year? Or do you think there could be moderation -- and given the competition of UM, you believe crop might slow down for us going ahead?
See, you have to understand our philosophy first and foremost. We have never done business in a desperate manner. I think that is the first thing. We've always done business, the way business should be done. We have lifted opportunities where we can serve our customers well. We have tried to bring innovation. We have tried to bring efficiency, which I'll discuss in the -- just in the immediate past by the previous question. We have tried to see how do we bring much more value to the customer than the end part of. So that's our philosophy. So it has never philosophy to say that no, it is sustainable, not sustainable. And if you see our crop business also, I think if you look at the market rates and if you look at where we have written our business, we'll see that we have written businesses where we are able to serve well and deliver to our farmers and the company as such. So it depends on the tender which come together. So this question, if you say that we feel that we'll be under short, over short, I don't think it's the way we look at any kind of business, be it government business, be it government, be it motor, be it health. It all depends on our pricing, our ability to find efficiencies and deliver to the customer of the highest order in terms of excellence. And that's why you see our resilience ratio has been among the lowest in the industry for like over a decade now. It's not even one of the quarter every quarter over the if you look at our secondary ratios, those are obsessions. So I don't think that we measure ourselves in terms of, let's say, every quarter, every half year, that should we be underweight as our principle. We continue doing business, the way business should be done. That is to summit. So it just depends on how the future tender comes together.
Got you. Got it, sir. Sir, lastly, on BAGIC, one thing on 2-wheelers. So our market share from has gone to 9% on new vehicles. Do you -- just wanted to understand our -- there is more headroom for us to grow at a rate better than the industry? Or at 9%, incrementally, we will be broadly growing at in line with the industry? Because I can see from your quarterly numbers, that compared to 23% kind of a growth, it has moderated to 16%, 17%, whether there is still groom left over to grow at a rate better than the industry in 2-wheelers?
Yes. So as you have rightly seen as companies and the market gets bigger, the growth rate would already start batting down now. If you're 100% of the market, your growth will be or the market growth rate is fundamentally concern perspective. So as somebody gives more market share, the growth rate gets moderated. But our ambition has always been that in businesses that we feel we have to have a good presence. We have a reasonably good presence. So our strategy would remain to grow businesses where -- as I told you in the past, we feel that the pricing is right and we should be able to serve the customers we keep on pushing that.
Got it, sir. Sir, I have one question -- 2 questions on BALIC. So BALIC, just wanted to understand this non-par part or annuity part not growing meaningfully. Is to more to do with macro that is at least the interest rate of the deposits are much higher and that's why we are struggling? Or given the [indiscernible] has become it a little shorter and IRRs you're resizing it. And that product is becoming a unattractive product relatively. So I just wanted to understand because if a product seems to be under pressure for the industry as a whole, is this your understanding of how long power or entry business growth would be incrementally? That's one thing. And second, actually, we try to turn on the poison group protection. The reason for some decline, we have withdrawn from some NFI portfolios because of the price competition or something else we need to read into it.
Sure. Thank you, Sanketh. So on the first part is there -- your question is on the overall non-par savings as well as on the annuity where the linkage to the overall, say, yield curve as well as the pressure in the industry, what you have seen it on the line of business. So there are 2, 3 things it is playing in. So first of all, the overall returns, if you look at the customer IRRs over the last 2 quarters has come down really what it was in the quarter 4 of last year because of the overall change in the yield curve. Within that, there is a little bit of a technical aspect that's saying that the -- maybe the slope of the yield curve has much more flattened, which kind of creates a pressure on what can you buy it in the forward market. So that also reflects in the customer returns. So if the slope is a little steep, you get a benefit if the slope is flat, that also impacts the return which you can declare it to the customers. Despite that, overall interest rate has gone up. That plays it in the pricing part. So I think that is true for most of the places, and so is it for us. And even if you look at in our case, last quarter, we have reduced our -- on the flagship product, our IRR has been reduced by around 18 to 20 basis points, just to be aligned with the yield cover movement. Otherwise, there are only 2 aspects, either you give it to the customer or you say that you were paying everything out of the margin. So it's a very chicken and eggs story where you want to balance it out. But in general, whether it is annuity and non-par savings, I think the overall returns has come down from the customer. And coupled with that above INR 5 lakh, there is no tax benefit. So that business, which used to come in the guaranteed side, which was more than 5 lakhs has actually reduced for us as well as what I've seen it for others also. We did update it to the stock exchanges after the union budget, the impact could be 3%, 4% of that business coming down. So one is that business has come down. Secondly, obviously, the attractiveness of the IRR has come down and like a number size has come down. So those are playing it. But broadly, I don't think so that the choices of the customer has said that the guaranteed business is not in the flavor. If you look at even on an absolute basis, our business would be there and thereabout. But because the company has grown faster, the share is coming down. But at times work is like in quarter 1 for us, we launched a ULIP and Uteco flavors. In quarter 2, we launched a power product, Uteco flavor. So at times, those flavors also plays in. But otherwise, there is no change per I would say, from a customer perception on the guaranteed business. So that should come back or would steam line in the coming quarters. So that's not the concern. The second question, Sanketh, was...
On group protection, basically Y-on-Y slowdown? Is it MFI withdrawn price competition? I just wanted to understand reasons around it.
So like in our case, there are 4 or 5 lines when we talk about group protection. One is the MFI business. And within the MFI business, we have seen a degron -- and this is again a temporary in our case because one of our partners is undergoing a process change. So to that extent, it is already closed by end of Q2. So this will start reflecting from Q3. That's one. The second is, if you look at our group credit protection, that has actually grown marginally. Again, that is more linked to the overall credit uptake by the distributors because it's more like an attachment product. So if anything slow -- slowness happened on the credit uptake, it reflects on the credit protection. The third is the group term life, which is an employer-employee. What has happened over the period after the COVID, prices has actually come down, almost a price correction is before pre-COVID level, which is down by 30% to 40%. All I can tell you, like in Q2, we would have added around 72 new GTL policies versus what it was there in the Q2 of previous year around 40, 42. But on the size is lower and second the same renewal has come out at a very comparatively at lower prices because of the price correction. So that is reflecting in. And in our case, one thing has also changed. PMJJBY, we started doing it from last year. Last year, it came in Q2. But this time it came in Q1 because of the policy is typically from April to March, but because we picked up some policies last year in Q2, so it reflected. So it's like a timing difference. Having said that, those are the 3, 4 variables. I don't see any significant change. It could be a quarter-to-quarter movement, which is playing in. Otherwise, there is nothing drastic change other than NR -- one of our MFI partner businesses slow down. But otherwise, even MFI business for us has gone up significantly during the quarter 2, excluding that one-off adjustment, which will be corrected in October, starting this month.
Thank you. Our next question is from the line of Supratim Datta from Ambit. Please go ahead.
Thanks for the opportunity. So starting off with... [Technical Difficulty] So starting with the BAGIC business. And now on the motor OD side, the loss ratio has improved to around 63% despite the plant losses in Northern India. So just wanted to understand one of your peers has also reported a significant improvement on the motor OD side. So just wanted to understand at the industry level, what is happening? Why has the loss ratios improved significantly? Are you seeing any change when it comes to competition? Or what are the other factors which would have resulted in that? That's the first question. Now coming to my second question on BAGIC. So you have taken the group health is in the government group health business. Just wanted to understand is the Gujarat business is your benchmark. Then would you next year go ahead and bid for more government health projects would that be the strategy? So those are the 2 questions on BAGIC before I get into that BALIC.
So on the motor OD , I'll give it to Raman and Tapan later to expand. But largely, I think BAGIC usually is very good at selecting businesses. So when we see loss ratios and we go to counter or we grow segments of business, whether it is private cars, wheelers or commercial vehicles. BAGIC always is very, very disciplined in the way it looks at data and decides to slow down business where loss rates are high and where the losses are expected to be lower. So that's a disciplined process. Across the market, we cannot say because there are smaller companies which will take a business that we wouldn't write -- so that we'll have to wait for all companies for the disclosure and see where it stands. Largely, I think that is what it is.
I'll just add to what Sreeni said. See, one outlier actually in the current year vis-a-vis last year was that last year, if you recall, quarter 1 was the first full year after the pandemic, and there was this concept of revenge travel and because of which the OD loss ratio has actually gone off the roof. At least in my tenure in the GI company, I had never seen OD loss ratios go so early. And that's why there is this base effect sitting there. But if you look at the OD loss ratios now and if you compare it a few years earlier, I think they're at similar levels. So there not that it's significantly come down from those levels. It's only an impact from last year because last year was largely overstated because of the revenge travel. And on the government scheme, I see, as has been the case and what Tapan always tells the analysts is that we want to be in every line of business, given the fact that we are a GI company, whatever is the opportunity we try to capitalize on that as far as it makes commercial trends for us. And the same way, where people used to challenge us when we started doing the crop business. And I think that's one segment where we've proven everybody wrong and try to make money where everybody else was losing money. So I think the same fundamentals apply here also as far as it will make commercial sense for us, we will continue to stretch further and get into other states also is where we will market.
Got it. And one final question on the BAGIC business. So the 5-year policy, which came into being, that is running off that has started running off. So the first policy is there, 5-year tenor has come to an end. So could you let us know that what kind of reels you are seeing in those policies and how much of your earned premiums typically would be from these policies?
So I don't have the data handy. Maybe we could take it offline and I'll share some detail...
All I can say is the reason the Supreme Court ordered 5-year policies was because there was a very large number of 2-wheelers, we did not have insurance after the first year. Now with this coming in, overall, we have seen an increase in the renewal ratios because these policies do have cover, and within BALIC -- BAGIC, I think we have focused quite a lot on renewing. And our renewal loss ratios for 2-wheelers have gone up substantially. It used to be in the order of 25%, 30% a few years ago. Now we are closer to 40%, 45%. Having said that, whether after 5 years, these people will continue the insurance or not, one has to wait and see. But it is too early to say how much it is you don't have the data handy on.
Got it. That's very helpful, sir. And Last month…
Raman, will share the details. Sure.
On BALIC, just wanted to understand some of the distributors as well as peers have indicated that distribution costs have increased following the change in the AUM guidelines. So just wanted to understand what you are seeing and which channels are seeing a higher demand for payouts. If you could give some color on that, that would be very helpful.
See, as you know that we have many distributors, including banks, brokers and all. We haven't seen any increase in the car just because AUM has been made flexible. So I personally haven't seen and neither BALIC has seen that cost pressure because of the EM being flexible. It is that the flexibility helps us to look at commission, we watch more directly rather than ground level activities. But otherwise, there is no increase per se in the cost of acquisition.
And just a follow-up on this. So as an industry, other life insurance players? Are you complicating with other players and trying to come up with a more rational cost distribution payout structure? Because just to understand how completion would be out going forward.
I think this is you're referring to a newspaper article where there was a discussion going on the group credit protection to have a one unified number, which is a maximum cap. Otherwise, personally, the IB businesses are at a very different stage of either the business model or as well as the majority of the distribution. So somebody like who at a very early stage, they want to pay more and just to grow the business. It's a very different strategy, but somebody who's very mature and have a much more stable business, they may not want to compromise on the margins. So I think having one answer to saying that is the industry working on something like a maximum number may not be the best way to articulate it. But yes, on the group side, there has been an article in discussion going on, but whether this is a right thing or wrong, I don't know. But I did also went through that article, nothing more than that, I know.
I'll just add in the insurance business, I think most of the distribution is captive and there are many distributors, which are very large captive customers like banks and very large brokers and agents and people like that. Therefore, on an individual basis, many of them have multiple tie-ups, which has allowed as per regulation, bring into the late but everybody can have multiple tie-ups now. Therefore, the cost is not a function of how much you pay to one intermediary or particular product and different products are also priced according to different levels of acquisition or management expenses, depending on the scale, the ticket side and various other things. Therefore, from a management perspective, it's largely about managing the product and channel mix to arrive at a reasonable expense ratio that is sustainable and that will deliver sustainable margins for the company. This is true for both BAGIC and BALIC. And this is something both companies are very well aware of, and the IRDA has now brought in some discipline in terms of the AUM, which actually over 3 years, you will see it play out because they have given a 3-year transition period for companies which are above that. And therefore, over 3 years, we will see that everything gravitates slightly lower than what the IRDA has said as a maximum limit. Some people will be much lower, sometimes we higher. So there are multiple -- too many moving parts here. But overall, managing the aggregate cost ratio in line with your plan and how the business is growing, is what the company is.
Our next question is from the line of Madhukar Ladha from Nuvama Wealth Management. Please go ahead.
Hi, good morning. See, most of my questions have been answered. Just one thing I -- on the opening remarks, you mentioned that you've added a lot of bank partners in the life insurance business. We also know that the number of partnerships now possible like each bank has kind of increased from 3 to 9. I wanted to get a sense of how are banks looking at growth? And how many of these new additions are you sort of the fourth or fifth partners? And it's almost like banks are now no longer aiding they are becoming more like brokers as you have more and more sort of insurance partners with there. In that context, how do you see that channel shaping up and your business growth potential from this comment? And quantitative color is the will be appreciated that.
I think you're referring to the life business. In the general business, as you know, we have a very broad and deep network of banca partners. And in all of -- almost all of them, there are multiple partners. So it's not something that we are not using. In the life business, again, we have tied up with a lot of partners. I don't think we are the sole partner in any of them. We are entering as a second or third player. We have invested a lot. We think we understand the banker space better. We think we have the flexibility in our team to be able to address the different sales models of the banks, some of them are centralized, some of them are branch banking-based, some of them have more of the attachment products. So based on that, I think each one is assessed on merit. And we would not enter a relationship just for having a relationship on our name. We have a very clear goal that we have to be among one of the 3 partners in each of these.
Bharat, I can add that. So just to answer that, further, one is that Sreeni rightly said that, we may be the second or the third partner. Most of the places we are enjoying almost one-third or more wallet share, which is driven by the engagement and product offering as well as the tech enablement and support at the ground. Having said that, see, our stated philosophy has always been that we should not be overdependent on one partner that is where we are moving to a more distributed distribution footprint. And one thing which I think we normally don't discuss here is that if you look at our agency today, it is the second largest agency in the country after SBI. The growth is upward of 30%, and which is where we are saying that even if our own channel, whether it is our BALIC Direct, which is growing at 35% plus or so and agency growing at 30%. So we are not only saying that we have to be -- enhance our distribution to banks, all brokers, we have to first enhance our own proprietary channels. So I think it will be a mix of all the distribution engine. So if you look at on a Q2 basis, all the 3 channels, whether it is a bank channel, including broker and online or it is our own channel direct or agency, all have given us 30% plus return -- so I think we understand that business, and that's where we are adding banks also, but we are also expanding our proprietary standardized.
Thank you. Our next question is from the line of Prakash Kapadia from Anived Portfolio Managers Private Limited. Please go ahead.
Yeah. Thanks for the opportunity. We've talked about investments in the retail health segment, given where we are in terms of mix, what could that contribution be like? And post-COVID, what are the inflationary trends in health insurance and price hike typically is on alternate year or based on our experience? That's the first question. Secondly, on our customer facing and caringly yours. How are we ensuring customer is spending more time on the app, what are the new features we've added? And will this eventually lead to being a renewal platform, is that broadly the game plan? And lastly, on Bajaj Finserv Health, is it recruitment tool for Tier 3, Tier 4 cities where new clients get some basic diagnostic or doctor consultation, and eventually, the idea is to upsell health insurance? Is that the right way to look at it? These are my 3 questions.
Devang is here. I will broadly say that, that is clearly not Bajaj Finserv Health us about. It's a healthcare venture. They will offer products and platforms. They will connect providers and users. And it is not an engine which BAGIC use to expand their distribution. BAGIC already as a formable distribution, but they will collaborate on products, on service, on offerings, on various things. So I think Sreeni is pretty much answered. Our purpose is to create platform to carry out health transactions for customers. Now customers could be corporate offering these services to their employees or health insurance or life insurance companies wanting their customers to be given health benefits. So it's not Tier 3, Tier 4. Yes, we service Tier 3 and Tier 4 customers also in case some health insurance companies as customers there. So hope this clarify. It's not about acquiring customers, it's all about enabling transactions digitally and putting that data to use for better healthcare management costs. The other cost retail health, Tapan, I think you can give a flavor on that.
Yes. Sorry if you could just repeat the question, what exactly the retail is that would.
I was talking about investments in retail health and how do you see it panning out?
So if you look at the retail portfolio, in India, currently, if I look at the government it'll be covering what INR 50 crores and the insurance companies will be covering about INR 25 crores, INR 30 crores, there INR 30 crores, INR 40 crores still to be covered if you look at in terms of noncovered, which would be there, which is the so-called missing metal. So retail health in India will grow. It will grow very aggressively. I think for the next decade or so because still the intact coverage happens. Critical of the country also because that is a social security which has to be there, the health infrastructure also grow. So my personal view is that the segment will keep on going. And we have to look at different -- it not just one product. It's a combination of different solutions for our customer, depending on the need and requirement. And innovations like what Devang just mentioned about bringing EBS into it, it's not about expanding or selling the retailers on a basis. I don't think that was intention or the customer centricity that we have as an organization as Bajaj Finserv as a group and as Bajaj insurance company, there's our -- for obsession to see how do we give to the customer a holistic experience. And this was a missing gap in retail and portfolio. The OPD was no company we're really looking at how do we service, that's why I think it has that and from -- if you are a customer for us and if you have EBH, and you have retail health operatives, I think you still feel very delighted to see that you can get reimbursement of OPD plus diagnostic, I think that is the intent. It is from a customer centricity perspective, I think. And retail will keep on investing on that and we'll keep on growing the portfolio because it will be a substantial chunk of business. But it'll go in the right way. We'll go it from a customer sent perspective. We're not an undercut price. We'll not try to just offer a very base solutions, but we're looking at the very holistic solutions going forward. That is how we'd be intent.
Right. And typically, that price hike is alternate year? In the...
So the price hike, actually, what happens is from a regulatory perspective, they look at a 3-year basis in which you should do a price hike. And then the price hike also, if you look at if you are a regulator, you do not want the price to become unfeasible from a customer segment perspective. So it is to the company to see how do they come out with good offering? How do they curtail fraud and how do they put each together, how do they negotiate with hospitals? So the customer service is very good and the price is reasonable. And it is that -- like from a long-term perspective, it should be sustainable.
But with today's digital world wouldn't fraud now no longer be such a concern given that there is KYC, Aadhar, PAN, Trinity, everything seems to be linked. So I would get things to...
So what we are talking with hard frauds, unfortunately, insurance, hard frauds is one aspect. For our other nature is also very high. Let me say -- and we should not call it fraud. I think we have to give the different name. Let's say, go to some hospitals, and you say you're uninsured, they charge you INR 100. The movement you say insured the charge of INR 120. Now what would you define this as -- would you define this as a fraud or would you define this -- so let's say, if you go at uninsured, the number of PPE kits in COVID saw would be charged for you would be maybe 5, 10, if you insured we had seen a bill which is 140 PPE kits with charge. So I think the issue in industry is much broader than just very hard for pure frauds. I think pure fraud is one part of it. Other is also a challenge, how do you negotiate -- how do you put that together. The industry is coming together to solve this also in terms of putting up standards and think how -- if you might be hospital are regulated in India. That is also an issue if I say that.
Right. That is another...
Also, there are many aspects to the statement of yours now you say, so it is not about just one [indiscernible] KYC, which takes her of it. So there are many more aspects to it.
Understood. And on the app, if you could give us some sense is caringly your app going to be the app for renewal also. Can you talk about some features or...
It's already. It's all part of there or you're Sreeni you're saying something.
I think that the currently the app is now undergoing a lot of improvement. I think if you compare the app every day, I think they are looking at new features. It has become a very strong platform for customers to have one account in which all their policies are there. Renewals are done through that to a large extent. Having said that, I think the predominant part of the business and the across the industry is intermediated, and we will -- we believe that it will continue to be intermediated. It is still a long distance the way that people come to you digitally and do everything digitally and do not want an intermediary because there are a large number of products and there are a large number of offerings under each product line and the health line each company will have at least 15, 20 products. So it's not easy for a customer to choose directly in the digital platform and take something. And there are a lot of balancing that has to be done. So [indiscernible] the thing which will drive loyalty, renewal and greater cross-sell and upsell to customers over time, but it will not be a customer acquisition engine at this stage.
Understood. That is my side. Thank you.
Thank you. Ladies and gentlemen, that was the last question of a question-and-answer session. As there are no further questions from the participants, I now hand the conference over to Mr. Akshay Jain from JM Financial for closing comments.
Thank you all for joining the call and the management of Bajaj Finserv Limited for giving us this opportunity to host the call.
Thank you all. All the best, very happy revolving to all of you.
Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.