Max Financial Services Ltd
NSE:MFSL
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
865
1 287.8
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Max Financial Services Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to Max Financial Services Limited Q2 FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mandeep Mehta, CFO, Max Financial Services Limited. Thank you, and over to you, sir.
Thank you, Nirav. Good morning, ladies and gentlemen. Thank you for being part of Max Financial Services earnings call. My name is Mandeep Mehta, CFO for Max Financial Services. Before proceeding with the performance highlights, I would like to introduce my other colleagues who are with me on this call. I have with me Prashant Tripathy, MD and CEO of Max Life; and Amrit Singh, CFO and Head of Strategy for Max Life. Now quick highlight of our business performance for first half of financial year '22. Our consolidated revenue for H1 FY '22 is at INR 15,271 crores, a strong growth of 21% in the most challenging business environment. The consolidated pretax profit for H1 FY '22 declined by INR 45 to INR 135 crores related to the same period last year, primarily due to recovery in investment value in the same period last year on Ind AS basis. Moving on to key business highlights for Max Life. Max Life individual APE has grown by 18% to INR 2,127 crores in H1 FY '22. Market share is at approximately 10%. On 2 years CAGR, Max Life grew by 11%, while private industry grew by 8%. MaxLife achieved highest ever quarterly margin of 29.1% in Q2 versus 19.7% in Q1 by driving balanced product mix during the quarter. NBM for first half of financial year '22 also expanded by 110 basis points to 25.3%, robust business growth at 24% year-on-year. VNB for H1 FY '22 stood at INR 546 crores. VNB grew at CAGR of 22% over the last 2 years. Max Life MCV grew by 18% year-on-year at INR 12,988 crore. MCV on an operating basis has grown by 16.5%, which increases to 18% after excluding one-off impact of COVID-19, including -- and including nonoperating variance RoEV is at 20.5%. Gross premium grew by 21% to INR 8,815 crores in H1 FY '22. Renewal premium also grew by 19% to INR 5,706 crores in H1 FY '22. 13-month persistency improved by 270 basis points to 85.2% and 61-month persistency by 160 basis points to 55%. Claim paid ratio improved by 13 basis points to industry-based 99.35% in FY '21. That claim run rate came down in September 2021 after peak in July '21. Pandemic reserves are at INR 235 crores at the end of September '21. Even though the protection long-term opportunity continues to be attractive, given the ongoing pandemic, cautious approach was taken towards protection with additional underwriting controls. As a consequence, overall protection contribution reduced from 20% in H1 FY '21 to 16% in H1 FY '22. Individual sum assured of new business declined by 20% in H1 FY '22 due to degrowth in protection business. Solvency surplus over 150% of RSM is at INR 1,869 crores with solvency ratio of 211%. Max Life AUM crossed INR 1 lakh crore in quarter 2 of financial year '22. AUM as at September '21 was INR 1 lakh 90 crore, which grew by 29% year-on-year, led by growth in unit-linked funds and control fund AUM. Max Life is now the fourth largest manager of private LI AUM. Par fund size was more than INR 50,000 crores. Max Life is now appointed as sponsor of pension fund for managing assets under national pension scheme and has sought IID permission to set up a new company, or pension fund manager in line with the regulatory requirement. Pension fund subsidiaries formation is underway. Max Life is recognized among the top 100 in India's best workplaces for women on 2021 awarded by Great Place to Work Institute India. MLIC has also formulated an ESG strategy comprising of 4 pillars. Work ethically -- and these pillar are work ethically and sustainably, care for people and community, financial responsibility and green operations. Details of the ESG journey are included in investor release. To sum up, Max Life will continue on its trajectory of driving strong shareholder outcomes with Axis as a new daily partner. Good progress made on 5 pillars of Max Life strategy with predictable and sustainable growth, product innovation to drive margin, customer centricity across the value chain, digitization and analytics as foundation and augment human capital as detailed above. On that note, I will hand over to the moderator to open the floor for Q&A.
[Operator Instructions] The first question is from the line of Sanketh Godha from Spark Capital.
Sir, my basic questions is, if I look at the product mix of 1H FY '21 and 1H FY '22, actually, the product mix has deteriorated because the protection contribution has come down from 12% to 8% and nonpar contribution remained flat. But still, we have 110 basis points improvement in VNB margin, and unit contribution and power contribution has also gone up. So what explains this expansion in the margin despite small depreciation in the product mix? That is first question. I have 2 more, maybe after you answer this, I will ask the other 2 questions.
Sanketh, this is Amrit. I'll take that question. I think 2 levers there, Sanketh. First one is our non-par product and the margin profile of that non-par product. As you will recall, last year, we had switched on to a new product through an introduction of our newer nonpar product design, which actually was a better margin profile, which in the first half, it was launched more around July, August time frame last year. So now for the full 6 months running of that product, that -- the margin profile of that product is slightly better. The second one is a bit more of the channels and product mix play that we have leveraged -- more traditional products being sold by our proprietary channel actually has helped provide a little bit of operating leverage play, which actually has benefited the overall margin profile. So these are the only 2 reasons which actually has caused this improvement in margin profiles.
Got it. Perfect. And the second question which I had was with respect to COVID claims. So we are still carrying the same reserves what we were carrying at the end of June. So sir, just wanted to understand how much COVID claims we have paid in second quarter, both on gross and net basis? And that INR 93 crores negative operating variance, which we are seeing in EV, is largely the amount what we have paid because of COVID in the current quarter?
So we have disclosed the overall claims, Sanketh. Actually, COVID claims, there is always a time lag and it requires a little bit of investigation of tagging them properly. So from a claim perspective, the gross claims, for H1, total claims, is at INR 2,416 crores and net claims is at INR 1,404 crores. You will see net claims increase actually very in line with how the market has kind of experienced. We did see in quarter 2, actually, our net claims were more higher. They were at INR 841 crores versus INR 563 crores in quarter 1. So that's the narrative on the claims side. I will not necessarily provide a specific number for COVID claims because it does take time for the numbers to get tagged in the specifics to come out. But your second observation is also correct. We have kept our reserve -- pandemic reserve position at INR 235 crores at the end of H1. Some bit of this is actually also through the profit generated and profits getting routed into creation of results, which actually can also be seen on the EV box that you rightly pointed out, where the operating variance of INR 93-odd crore largely is coming out of this extra provision that we have created.
Got it. And finally, one data-keeping question. In the past, you used to disclose the absolute crore figure of individual protection and group protection in figures. It will be great if you can disclose it. Because in product mix, what you have disclosed in one of the slides, doesn't include GTL when we report APE -- reported APE, so it gives a better clarity. So if you can disclose those figures, it will be great? And if you can give it for Q1 also, it will be great?
You can derive that, Sanketh, but I'll give that figure. The group APE is around INR 198 crores for the first half. And the individual protection was around INR 175 crores for the first half.
INR 198 crores is group protection only, right?
Group protection, yes.
Okay. Perfect. Perfect.
It's APE of Group Protection and individual APE protection is INR 175 crores.
[Operator Instructions] The next question is from the line of Madhukar Ladha from Elara Capital.
Am I audible?
Yes, sir, you may go ahead with your question.
Yes. So I just wanted to get a sense on outlook for margins and the protection business. So we've seen some bit of slowdown in protection in this quarter -- in individual protection in this quarter and the insurance rates have also gone up. So how do we see this trending out over the second half? And also Axis Bank, as a channel, if I'm not wrong, is -- has grown just about 12% year-over-year. So some comment over there would be helpful.
Thanks, Madhukar. Let me take the question -- take the question on protection. I would like to reconfirm that Max Life Insurance is a long-term view on protection, and we do want to establish ourselves as a very strong protection player. In the first half last year, when the COVID hit us, for the first time, there was huge demand of protection business. And that's the reason in the first half of the year, we ended up selling record protection as a percentage of total sales. However, when this year began, especially in the first half, the second COVID wave came, and we had to restrict the supply a little bit because of restrictions from reinsurance, more friction in the business to make sure that the underwriting norms are elevated. And really, the reduction in protection business is not out of demand, I think it was more out of supply. As we embark on the second half of the journey, as we all can see, that the issues of COVID have more or less settled. The business is going to reduce some of the supply cycle strains. We are in active discussion with reinsurance partners to do that. And we are going to push the federal hard on protection business. And I'm hopeful that in the second half of the year, we will do better than how we did in the second half of the year last year. So that's my view. With respect to pricing, your information is correct, the reinsurance partners across different companies have come up with price revisions. In our case, we are still to hear from our insurance partner. In all likelihood, there may be some price revision. But I will continue to say that India, as a market, offers very, very affordable prices as far as protection is concerned. Principally speaking, Max Life Insurance will like to be in profitable businesses. As you can see from our approach, there's always a good balance that we try to establish between growth and margin, including what you saw in the second half -- second quarter of the year. So that principle will get applied to protection business also. We are going to increase the prices if required to protect our margins. So in your assumptions, you shouldn't assume huge pressures on margin on protection because we will make changes or increased prices to absorb higher price from the reinsurance partners. That's really the summon substance. Long-term intact, second half should be better than first half, supply side constraints being removed and we would like to protect our margins.
Got it. And on Axis Bank?
Sorry. Okay. Axis Bank is a very strong partner, as you see. And exactly 1 year ago, during this period, Axis Bank had done phenomenally well, actually, a large part of our growth that we saw last year was out of Axis Bank. And on a very high base, this growth actually is reasonably good. You should see improvement in growth rates as we move forward quarter-on-quarter.
Right. The other question I had was the Other's channel. That has done very well in this quarter. So that's up. So what does that include? And what's driving that?
This is Amrit. The other is actually largely is -- I'm assuming you're referring to other than Axis actually, which is predominantly the YB relationship that we carry and also set of urban cooperatives and a few partner relationship that we carry. So they were at a very low base actually as compared to last year, which has driven the growth that we have kind of seen. For example, the YB relationship for the first half has grown in the likes of 19%, 20%. Though on a 2-year CAGR, still it's lower, but because it was on a low base, the growth number looks quite robust.
No, but actually, I was not referring to the other banks I was referring to like this proprietary Axis and then other banks and then there is a last sort of miscellaneous category, right?
If you could refer me to the reference point that you are making, I will then probably will be able to answer that which channel you are specifically asking actually. Are you referring to Slide #17.
Yes.
You said Slide 17?
Yes, yes, yes.
It's actually a very insignificant part of the business actually. So maybe I can take this question with you offline because I'm unable to -- what I can give you, as a color is, within proprietary, our e-commerce channel continues to actually demonstrate strong growth. Our specific channel that we have created for cross-sell is actually also doing quite well. And now in sequential months, since the lockdowns are getting opened up, even agencies coming back from a strong momentum. This others that you're talking about, which is almost like a negligible, less than 0% kind of contribution, I will come back to you with the specifics of it, as you speak.
The next question is from the line of Rahul from Lucky Investment Managers.
You have kind of partly answered it in the questions before. But growth has been slightly sluggish last 2, 3 months. October was also pretty much flat. So how do we look at this front going ahead? If you could give us a sense of what exactly has happened over the last 2, 3 months? And how do you look at it, going ahead?
That's a very good question. I think the answer lies in what was happening last year. You recall that Max Life Insurance was firing all cylinders and we were performing significantly better than other people. And the answer lies in your 2-year CAGR, perhaps. So if you see our 2-year CAGR, we are still better than the top players, better than the private industry, et cetera. And we have 2 large quarters. Somebody asked me this question in our last investor call that quarter 2 and quarter 3 will be difficult. We'd like to share that our VNB growth in quarter 2 last year was 41%. In quarter 3, it was 55%. So really, we have a very large business to deal with. On that 41% growth, we have grown 15%. So that, in a way, in absolute terms, might appear a bit lower, but overall in the context of the high base, that's pretty good. As far as our growth is concerned, you're right, coming out of COVID, we did find that our own channels took a while to come up, and we are now seeing reasonable growth for the month of October. For example, our own channels have grown about 18%, 19%. And in the month of October, again, going back, Axis Bank last year had grown phenomenally well. Our October month growth, last year was 50%. So really, some of this has to be seen in that context. I think as the year progresses, starting November, we should start to see more and more growth, number one. Number two, I think there was a bias to drive VNB and margins in quarter 2. Some bit of that, we will -- we'd like to readjust with growth. So we will try to strike a right balance between product mix, margin and growth. And that will definitely have a positive impact on the months coming up as well as in quarter 4. Again, we'd like to say that we have a very large pace of last year -- quarter 3 also to deal with and our performance has to be seen in the context of how we did last year.
Okay, okay. And sir, any sense you could give us on how you're looking at margins, given that you -- if you want to push growth here -- as of now, you said, as you said, the focus was more VNB margin. So where do you see that going, in general? Because you previously guided for 25%, 26% kind of a number.
I will take you to similar numbers, actually 25%, 26%. Between 25%, 26% is where we would like to be similar to last year. And we would like to rebalance the product mix in a manner so that we are hitting this kind of margin as well as are able to drive reasonably robust growth.
The next question is from the line of Abhishek Saraf from Jefferies India.
Am I audible?
Yes.
So many of my questions have been answered. I have just one on the non-par saving side. This quarter, the share of non-par saving is a sparkling 34%. So where do we see this with this kind of a gap of non-par savings that we want to do? Because traditionally, you have said that it should be around 30% to 35% kind of level. Secondly, in this quarter, in October, specially the yield curve seems to have flattened a bit and front end has moved up. So has that in any way affected the demand for the non-par saving [indiscernible] from our side? And could this lead to lower margins in non-par saving versus what we have seen in the past few quarters?
I don't think I got your question right because the voice was a bit muffled. I think the first question was, how do we see non-par savings a guaranteed product in our portfolio? What kind of ranges are we comfortable as we have been reiterating the 30% to 35% level is where we would like this product -- particular product to kind of remain? That's the first point. And I think the second question that you were trying to ask is, from a demand perspective, was that the question?
So basically, what I wanted to say is that, in October, we have seen the yield curve has flattened a bit and especially the front end has moved up. So what implications does that have for non-par savings both from the good perspective of demand side and also from margin perspective?
So Abhishek on that, this is -- we monitor this very closely, almost on a monthly basis. And our decision of how should we reprice, et cetera, is a factor of the yield curve, the kind of hedging rates that we are getting in the market, and obviously, the competing kind of product forms. But within the non-par category actually, we do have multiple levers. We have levers of the payment term variant that we are selling, the nature of the product that we're selling, whether it's an income design, whether it's an endowment design. And I think among all of these mixes, we try to optimize and manage for the margin profile. Where we are sitting today? I think we are quite comfortable on how the margins are getting emerged and even some of these movement that you're seeing on yield curve, we are quite okay that there are offsetting levers that we have to solve for some bit of these. You will also see us do certain set of introductions also in this particular product category, which can also help us offset any of these pressures that can be foreseen in the near future.
Okay. And do you expect this kind of demand at the end in non-par savings to trend further, like, into the next 3 months because you've been [Technical Difficulty] you have been indicating that if yield curve flattens out probably the kind of growth [Technical Difficulty] in non-par savings will not be seen going forward. And because -- I'm asking because non-par savings has been our key anchor for our margins over the last several quarters.
If you look at in the industry, and I think if you go back in time also when the yield curves are more flatter, you would have seen the non-par demand, depending upon who wanted to sell and the kind of supply people wanted to create, there was always demand available in the market. This is a product form which part -- which kind of is a parcel of portfolio strategy [indiscernible] kind of looking to, which is around saying that a component of my assets being allocated are towards guaranteed kind of design. So if your question is, can we keep doing 30%, 35% kind of penetration levels, I have no reasons for us to believe that that's not possible in a market like India, given there are always a set of consumers which are looking for a guaranteed proposition as part of their portfolio balancing that exists. The other additional thing on non-par is, if the interest rate does move up, it also creates an opportunity for us to also reprice it and we can make it more favorable as a product form as well. So these are some levers that are available. I think from a demand perspective, we see no reasons that delivering 30%, 35% of our business sitting in this category could come under any pressure.
The next question is from the line of Ajox Frederick from Unifi Capital.
And sorry for harping on this again. So the growth slowdown was predominantly because of the last year's base having that one particular product, and it was a good move last year, in fact, a fantastic move. One, are we working on some kind of moves like that so that we drop up growth again? That's one. And 2 on protection, if we are cautious on the pure term side, why not we kind of push the return of premium because ours is quite balanced on the protection side and some of our peers are doing pretty well on the return of premium side. So those are the 2 questions, both on the growth strategy.
Okay. Of course, there are a series of product launches planned in the second half of the year. And as we speak today, we are going to launch a very large par design targeted towards all the customers and most channels. So we are going to do that. In the month of November, we have a new non-par design coming up. And in the first quarter next year, we are going to have another ULIP. So there is -- there are a lot of product launches planned in the second half of the year, and I feel very optimistic about the revenues that they are going to create. In the first half of the year, as per the product calendar that we had, we were to get into, in a big way, the protection, health and well-being space. And we launch all those product designs. Unfortunately, because of COVID the kind of push that we would have idly given in a pre-COVID situation we couldn't give for the reasons that we just explained to you. But those are long-term product designs, and they're going to help us as we move. So to answer your question first, very, very bullish about new product launches in the second half of the year, I feel very optimistic about that news. Talking about the on the protection plans, yes, close to about 25% to 28% of our protection is already return on premium. We always like to remain focused on predominant premium kind of product design. But if you heard me correctly, I did say that starting October, November, our view on protection is going to be far more bullish. Now that the fear of COVID is somewhat diluted. Also to talk about some of the numbers we called our customers, protection customers about a month ago, and we called about 15,000 of our protection customers. And we found that about 93% of all the customers had already taken the vaccine, at least one dose. And about 65% to 68% had taken both doses. So the overall coverage and this we are talking about representative sample. Overall coverage of vaccine is pretty good, and we feel quite optimistic about the avenues for driving protection business. So as we speak, we are trying to eliminate the supply side constraints at our end as well as working with the reinsurance partners so that we could go back to the protection levels that we witnessed last year. Like I mentioned, we are a long-term players on protection. On the online space, we are #1 on protection, continuing to remain #1, and our long-term view towards optimizing the outcomes of the business, protection is a big lever.
The next question is from the line of Shreya Shivani from CLSA India.
I have 2 questions. First is on the new product that Amrit spoke about, the new non-par products, which was launched in July, August last year and which has a better margin profile. If you can help me understand, in the non-par mix of 31% in 1H, how much is the share of this new product? It will help us understand how much this product -- how rapidly this has been scaled up? And second question is a data-keeping question. It's on our retail protection. How much of our retail protection is done by our own online channel and how much of it is done by [indiscernible]?
So first question on the new product, which is the Smart Wealth Plan, almost all of it is now Smart Wealth Plan. There is no old product that is kind of flowing. So 100% of the business is Smart Wealth Plan. On the second question on -- you're specifically asking whether e-commerce actually -- the split of aggregators and non-aggregators?
Yes, for retail protection, specifically.
So that would be around 45% -- 40% to 45% would be our own and 55% would be from aggregators space.
Okay. And like, in overall retail protection, which is sold, how much is...
E-commerce, actually.
So you've given me a split between -- split within the e-commerce, the 40%, 45% your own and higher segment from net aggregator, but it is in the entire retail protection that is sold, how much -- both of them combined, how much do they make?
50-50, right now, online and offline.
Okay. 50-50.
Yes.
The next question is from the line of Avinash Singh from Emkay Global.
My first question, not related to really quarter. So first one, on your NPS or fund managers license as well as also you have become part of the Account Aggregator system. Of course, they both are sort of a long-term strategy. We're benefiting actually over long term. So in the near term, any sort of impact on your costs or capital, if at all any? So that is question number one. And second, again, if you can just help us -- of course, we have some sort of a [indiscernible]. But progress or sort of changes in the nonoperational par tax, I mean, [indiscernible] next month, I mean, what sort of approach we have now towards the structural simplification of Max Life and Max Financial as well as sort of any sort of updates on MSI [indiscernible] as well as Axis additional [indiscernible]?
Thanks, Avinash. I think first one, as we indicated in the opening remarks, we -- the PFRDA, the pension fund regulator has actually given us a nod to allow us to become a pension fund manager. And we are in the process of, right now, seeking regulatory approvals from our regulator, IRDAI, and then subsequently, there is a time window and a time horizon provided to set up a subsidiary. As part of our application, PFRDA actually prescribes INR 50 crores that needs to be kind of put in as capital into the business. And you can add another INR 5-odd crores. So INR 55 crores of total capital, we will have to put in, which will get reduced from our solvency from a competition perspective. So that's the kind of commitment that we would need to put into to get this particular business done, which actually, from an overall solvency perspective with 1%, 1.5% kind of implication. It's not a materia one. The second question on structure simplification. As you are aware, we have filed to the regulator on the MHI transaction, and I think corresponding to the regulator, we will not comment on it on the call. It continues to be in conversation with regulators, looking for approval of that particular transaction. Post that transaction, as you are aware, the step-up of Axis transaction is supposed to happen. So we are hopeful, the moment this gets concluded, very quickly, we will step on that transaction.
Okay. On this, a follow-up that initial when that this Axis -- [indiscernible] Axis the initial or the filing had come, of course, they made modification to the plan. So they had certain sort of a milestone-related terms, including sort of within a defined time line. If at all the merger was not to go through for any reason, Axis has the put option. So is in the current agreement also that put option exists?
So the current agreement is very simple, and some of those conditions have been eliminated as we always communicated. And with whatever agreement we have, the time lines, we are well within the time line, we are pursuing it as envisaged at this point of time. And they are all sequential in nature, Avinash.
I mean is there any put option now with Axis or not for their sake?
You mean for what -- for merger?
No, no. So I mean, in the initial agreement, Axis has the option -- I mean, of course, this -- that if at all, the Max Financial merger does not happen for any reason, Axis can sort of sell it's Max Life stake to Max Financial at something like 94% or something of that sort? That sort of they had a put it, that option that, okay, they can...
The current contract has been very simplistic, very simplified. There are some milestones which have to be achieved, but there are no put options.
The next question is from the line of Neeraj Toshniwal from UBS Securities.
Yes. Am I audible?
Yes, Neeraj.
So I wanted to understand your strategic Credit Life with Axis onboard, those very granular but it has been picking up the thinking approach, that is one? Second, on the target product mix, I guess you wanted to pull down Miller as the committee first quarter that we did in the second quarter to be aligned in similar level at the first half. But this is something against the industry which I have been seeing very strong [indiscernible]. So what did you understand? What is our target mix we are looking at and your thoughts on that?
So Neeraj, this is Amrit. I think on Credit Life, we have reiterated multiple times, it's a tactical play for us. It's not a strategic choice. And as the disbursement volume picking up in the industry, we have also seen strong growth actually happening in this particular segment. And Credit Life business actually has grown almost 200% plus in the first half for us. Though it continues to remain tactical, given the kind of margins that we are getting and the long-term sustainability of margin is more important in this particular line of business. And our approach towards this line of business will remain in a similar manner, which is a bit tactical rather than making it a large part of our VNB contribution in structure volumes. On second, on ULIPs, actually, I think if I got your question right, you are saying there is a large momentum of ULIP, which is being experienced. So what's their view on it? I think overall, we will like to remain balanced from a product mix perspective, though some bit of quarters ups and downs will keep happening. Generally, the last quarter is heavier on ULIPs because of being a large quarter and ULIP is typically -- historically have been higher in that particular quarter. We will see some of those trends also pan out for us. We will leverage it to an extent, but we'll remain -- try to remain overall balance. I think the related question always there is from a -- I mean quarter 2 is a 29% margin. And as in a call, someone had asked what the margin outlook would look like, and we said, it could be more than 25%, 26%. It's a mix -- balanced mix of sales and margins and overall mix that we try to optimize for. So we will leverage it to an extent, but you will not necessarily see us swing in large volumes towards ULIP, we will remain more balanced.
And how much you would have provided in this quarter for the reserving that we are maintaining reserves. How much addition we would have provided in this quarter?
So we spoke of it, I think, from the profits around -- near about INR 90 hundred crores has been provided, which you can also see on the EV box that we have provided.
And on the protection price hike, I think you already had a hike in April. So are we starting further hike in our portfolio?
It is a very competitive thing. And we always like to look at how the competition is moving. With the hike that we did in April, we continue to be aligned to the competition. Now on that base, competition is going to increase the prices. Our last hike didn't include the impact of COVID wave 2. So we should expect some bit of price hike. What will be the extent of the price hike, we will be able to determine that after we have concluded our discussions with the reinsurance partner.
The next question is from the line of Dhaval Gada from DSP Mutual Fund.
A couple of questions. First, Amrit, I know you answered this multiple times around margins. But just to be clear, if you could give a sense of the margin differential between the last price hike versus the current one in the non-par savings business, that will help us understand part of the margin movement? And the second question related to margin is, in the current mix, the share of protection is relatively less compared to what our aspiration is. So in that context, as we move to a more normalized environment, do you see the current 25% margin increasing even further by at least a couple of hundred basis points as the protection share improves? Yes, those are the 2 questions.
So Dhaval, actually on specific product level and segment-level margin profile, we don't share. But I indicated the reasons why the margin activity has improved, the non-par product that is now running through and which is a dominant -- which is the largest -- which is predominantly the majority is actually a better margin profile product. And secondly, was leveraging some of product mix plays within the channel segments, actually, the way we kind of wrote a bit more participating designs in our agencies in the first half, actually, created us the leverage play that we got for us, which actually is the reason why the margin profile has improved. On the second question, I think over a longer horizon, if the question is from a margin expansion over a longer horizon, definitely, the answer is yes. I think the mix of protection, annuity, riders, all of these will come in play with respect to expanding the margin profiles as an organization, as an industry as well. However, if you're asking us a near-term question, I think it's the right balancing of product mix, which will also come in play, even though in the second half the momentum on protection will come back. But somewhere also, there will be a balancing act with respect to the ULIP proportion also coming in play, which will have some of those balancing elements kind of come through. The only point that we are trying to reiterate, as we have been saying since the start of the year, given we are on a very high base of E&D growth that we demonstrated last year, our attempt would be to actually ensure that we hold on or expand the margin profile, and hence, land up between 25% to 26% margin profile for a full year basis.
Understood. And just one last thing on protection. So pre-3Q FY '20, the growth momentum was quite strong over the last several quarters, we've seen sort of tapering down 2-year CAGRs are flat on retail protection. So just in your view, when do we see normalization and back to that 3Q FY '20 kind of growth momentum. Any thoughts that you have? Do you see post the current price hike that you anticipate, should -- I mean, in your estimate, when should this normal run rate come back?
The protection CAGR, actually, on a 2-year basis is still actually in the range of 20%, 22% kind of level, actually.
I was referring to retail, yes.
I'm talking about retail only. I'm talking retail. So even retail protection for us, the 2-year CAGR is actually growing in the range of 17% to 20% -- I have been corrected actually. So there is momentum that we see even in the first half. Now in the second half, I think once we -- some of the supply constraints, which we have already actually removed, we have easend underwriting norms. We have increased the sum assureds, the limits that we are taking. Earlier, there was a big embargo on all substandard lives. There has been relaxation given in those substandard lives as well. I think the momentum will start coming back, and you will see the protection momentum improve from here onwards.
The next question is from the line of Abhishek Saraf from Jefferies India.
So sir, this is on protection side itself. So of course, we are expecting that the momentum should pick up. But what is your view on the fact that if prices are hiked across the board, how will the demand be impacted? I think that we are building in not the material impact on demand. But do you think that, that is conversable to react differently. And maybe a person who was buying, let's say, INR 2 crores for the sum assured, he may actually settle in for lower sum assured, given that the prices have gone up materially over the last 1.5 years?
Yes. I mean we are talking about life insurance, we are not talking about commodities, and hence, the demand supply math with respect to price increase doesn't follow the normal process.
Sorry, there's an echo coming.
Abhishek, may I request that you mute your line from your side, please?
Yes, Abhishek. So basically, if you look at the prices. The prices are comparable. I mean, internationally speaking, India still continues to be on the lower side. We haven't seen a huge impact of -- on demand because the prices go up, and we are talking about life insurance, we're talking about life and people are far more flexible with respect to that. At the end of the day, price will be determined by market forces, and we are aware of that. The hypothesis has proven multiple times over the last 2, 3 years that the price increase has -- doesn't have a material impact on demand.
Okay. Okay. And one last thing on the group protect, so are we participating in any of the GTL business because last week [indiscernible]. So are we trying to get into that business in this quarter or any time soon?
So Abhishek, on GTL business, we have participated. All we have been -- all our renewal accounts, we have been honoring those accounts. In fact, the GTL business has also grown around 18% in the first half and in the second quarter, almost 59%, 60% kind of growth. So we have been very selective about it and we have priced for the risk given this is a annual kind of a product. We have price for the risk and we are participating now both on renewal and even on new clients, though keeping the overall risk perspective in consideration.
[Operator Instructions] The next question is from the line of Dhaval Gada from DSP Mutual Funds.
Sorry, just one follow-up on retail protection. So Amrit, you mentioned the 2-year CAGR growth. So I was just trying to understand what's been the volume CAGR on that basis in your view?
Volume -- number of policies?
Yes, number of policies, yes.
Just give me a second. Actually, I don't have that ready. So there is a decline there, Dhaval, from a number of policies perspective over a 2-year CAGR. It's around 7% kind of a decline has happened, Dhaval, there.
I now hand the conference over to the management for closing comments.
Thanks, Nirav. Thank you, ladies and gentlemen, for being on Max Financial earnings call. We look forward to more such interaction in the future. Thank you once again. Goodbye.
Thank you very much. On behalf of Max Financial Services Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.