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PB Fintech Ltd
Earnings Call Analysis
Q1-2025 Analysis
PB Fintech Ltd
PB Fintech witnessed a remarkable 78% year-on-year growth in new premium for their Health and Life insurance business. This exceptional growth was achieved despite an overinvestment in operating capacity amounting to $3 million for the quarter, highlighting the company's confidence in sustained growth .
The company's revenue for the quarter grew by 52% year-on-year, reaching over INR 1,000 crores. Profit after tax (PAT) also improved to a profit of INR 60 crores. Notably, the renewal/trail revenue grew to an annual recurring revenue (ARR) of INR 559 crores, up from INR 418 crores last year, operating at an impressive 85% margin .
The credit business experienced a moderation in growth and reported credit-linked revenue of INR 140 crores, which was below the anticipated range of 0% to 10%. The year-on-year growth for this segment was -8%, indicating a need for strategic adjustments. Despite this, the credit business managed to stay EBITDA positive since December 2022 .
New initiatives showed an impressive 2.3x growth year-on-year, with improvements in adjusted EBITDA margin from -31% to -12%. The agent aggregation platform, PB Partners, emerged as a market leader in scale and efficiency, reinforcing its market differentiation .
The company's UAE insurance premium witnessed substantial growth of 64%. This growth was attributed to a strong B2C business model, which is building a solid brand and moving towards market leadership in the UAE .
PB Fintech continued to improve its customer onboarding and claims support services, achieving a Customer Satisfaction (CSAT) score of 89.9%, up from 88% the previous quarter. The company aims to surpass the 90% mark soon .
The fresh health and life business segments are identified as the main value drivers for PB Fintech. These segments are growing at 78%, with renewal rates expected to be robust throughout the year .
The company invested INR 25 crores in building capacity, anticipating that this will start to break even within 3 to 6 months. This investment is part of their strategy to support future growth. Management remains confident about maintaining a healthy growth trajectory in the upcoming quarters .
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A very warm welcome to PB Fintech Limited Earnings Call Q1 Financial Year 2024, 2025. Today, we have with us, Mr. Yashish Dahiya, Chairman and CEO, PB Fintech; Mr. Alok Bansal, Executive Vice Chairman, PB Fintech; Mr. Sarbvir Singh, Joint Group CEO, PB Fintech; Mr. Naveen Kukreja, Co-Founder and CEO, Paisabazaar; Mr. Mandeep Mehta, Group CFO, PB Fintech; and I'm Rasleen. I hand over the call to Yashish for the initial address.
Thank you very much, Rasleen. As you were taking all our names, I was in a jovial mood today. So I was just thinking, obviously, it's the same people. Nothing has changed. It's obviously the same Yashish, same Sarbvir, same Mandeep, same Naveen and same Alok. But yes, I think it wasn't that funny.
But anyway, so today we share our performance update for the quarter ended June 30, 2024. We are extremely thrilled with our Health and Life insurance business, which are a bulk of our long-term value, which are witnessing a combined growth of 78% year-on-year in new premium for Q1 financial year '25.
I just wanted to pause at this moment and kind of give you a sense of the overall picture, right? I think every organization has a stage, there is a growth stage, there's a maturity stage and perhaps there is a death stage at some point. I believe we are still in the very, very early days of our growth stage.
Just to put in perspective, we haven't had growth like this in a very long time. And this is on the core business itself, right? So -- and in anticipation of that growth, we have built up some additional capacity. So we probably overspent by about4 $3 million this quarter in terms of actual operating capacity, but that's a sign of our confidence that we believe this growth could carry on. That's why we've done that. Of course, things might turn out different, but let's hope for the best.
Our total insurance premium for the quarter was INR 4,871 crores. New core insurance premiums grew at 66% for the quarter. Core insurance premium grew 46% for the quarter, with the core insurance revenues growing 40%, credit-linked revenue was INR 140 crores.
I think the slight disappointment in this quarter compared to where we thought it could have. We thought credit would end up somewhere between 0% to 10%. That's what we mentioned. But it's actually below that. Yes, so credit is at INR 130 crores, but it is at lower than 0 for the year. It's about minus 8% or so. And so that is something that we need to repair quite quickly.
New initiatives grew 2.3x. So new initiatives have really surprised on the positive, 2.3x growth. And I just wanted to kind of, again, lay the landscape out here. Last year, if you noticed in the same quarter, we hadn't grown so much. And what we had actually done and what we explained at that time was we had moved from large consolidated into smaller and smaller partners. And so we had gone more granular in terms of our distribution base.
And now, of course, that granular distribution base is growing. And so it is now 2.3x and what you would notice is the losses are actually lower than last year. And in terms of percentage, they were 31% (sic) [ minus 31% ] last year and today, they are about minus 12%. So there is a significant improvement in the percentage of revenue.
Our revenue for the quarter grew 52% year-on-year to just over INR 1,000 crores, and PAT improved to a profit of INR 60 crores. But once more, as I mentioned, we are in the growth phase. We are not trying to optimize profits. Again, as I clarified, this could have easily been INR 90 crores or so, but it is INR 60 crores. And that is the overinvestment in operations.
Our renewal/trail revenue is at an ARR of INR 559 crores, up from INR 418 crores last year. This typically operates about 85% margin. Once more don't worry on the renewals at all. They are in very good shape. And as the year progresses, you'll see that very clearly. We -- in fact, they're the highest they've ever been.
We continue to improve our customer onboarding and claims support services. And this is something we track very diligently. The insurance CSAT is now at 89.9%, and I'm really hoping we cross 90% soon. We were at 88% last time we reported, and we were 87%, I think, a few quarters ago.
Credit business has seen moderation in growth. However, continues to be EBITDA positive, which it has been since December 2022. But we really need to think hard and figure out how we grow this business. Our total credit score, consumer base is now at about 46 million consumers.
We continue to strengthen our leadership in new initiatives. As I said, growth to 2.3x, 131% year-on-year, with adjusted EBITDA margin improving from minus 31% to minus 12%. PB Partners, our agent aggregation platform, continues to lead the market in scale and efficiency. And I think I would say, if I look at the last 6 months, that differentiation in scale growth and quality growth on competition versus PB Partners is now becoming strikingly clear, which is what we were trying to explain, I would say, in the last 6, 7 quarters, but that's now actually playing out.
We have moved the business increasing towards smaller and higher quality advisers and most diversified across different lines of business. We are present in 18,000-plus pin codes, covering over 95% of the country. And this business really helps us because if you notice, this is where a bulk of this business is still motor insurance and that kind of product, which our core business is increasing on the health and life side, whereas this business is really increasing on the motor side.
Our UAE insurance premium has grown 64%. I must say I'm very pleased with the way the UAE business is going. It is growing beautifully. It's an absolute B2C business, building a strong brand and vying for leadership in the UAE market. Our core health and life business, as I said, we -- yes, so we're happy to take questions now. Thank you.
Thank you, Yashish. We take the first question from Sachin Salgaonkar from Bank of America.
I have 3 questions. First, again, following up on Paisabazaar or credit, it looks like the industry recovery towards unsecured is also slow. Any general thoughts in terms of how much time we could see from a recovery perspective or any plans to completely revisit what you're doing from a business perspective out here?
This is Naveen. Like you said, we are seeing industry moderation for the last few quarters, driven by the advisory from the regulator on the unsecured specifically and also equally driven by the changes in the processes at the industry level to strengthen the overall ecosystem.
Our sense right now is that at -- on an annual level, the growth will come back because, again, if you look at the fundamental level, GDP growing at about 11% normally and retail credit growing a little higher. And within that, unsecured a little higher than secured because of NIMs and margins. The industry should get back to growth in H2 is our estimate. And hence, we expect to resume our growth trajectory also in H2.
We are, meanwhile, also strengthening our secured focus. So we expect the secured business to outgrow -- grow at a much faster pace than unsecured and our longer-term strategy is for the secured business to come to about half of our overall businesses, currently stands at about 15-ish percent. That's the -- we are also evaluating a couple of other channels like PoSP or distribution. But that's right now at an evaluation and building -- background building stage.
Naveen, a quick follow-up, what's the right to win in the secured lending for you guys as a fintech because you end up competing with the traditional guys who have been in this space for many years?
Sure. So the rights to win would be similar as it is in unsecured. What we offer is a transparent choice, options to consumers and go -- over a period of time as we have developed the unsecured ecosystem, we go deeper than any other individual player that can offer that option to the consumers.
So those parts will remain similar. What is different in secured is, of course, the last-mile fulfillment, which in unsecured is moving digitally, faster in credit cards followed by unsecured. And as account aggregator system stabilizes, it is expected to move even more digital.
In secured, the last mile continues to be offline. So we will build fulfillment capacity, and we are building working on that for the last couple of quarters, and we'll start to see some results in Q2 and H2. And that, I think, will be the differential. In terms of our ability to fulfill, we already see good demand in secure. It's just that we were not able to fulfill that in a digital fashion, and the industry is not yet there from a digital perspective. So we're building now the offline capacity.
And Sachin, to your first point, yes, at -- with Naveen in the Board, we are also rethinking our -- not rethinking our strategy, but we have been really trying to figure out how do we make this a more sticky business rather than only an unsecured credit platform. There is value in unsecured platform and that will continue to be there. But the unsecured every few years, there is a big fluctuation in supply, and that makes it a little challenging at times.
So I think we are really thinking through what is the way there. Whether secured is the way. See, if you look at the European market, out there, secured is the largest part of what fintechs do from a lending perspective. So there is a value there. Remortgage market is largely on what you would -- you basically call fintechs. And so that is a market you would be quite large in.
But I would say, maybe in the next quarter or 2, you will have a lot more clarity on the direction of Paisabazaar. But our hope is we come out with a stronger direction compared to where we are right now.
Sachin, just to add one more point. Our credit score business continues to be super strong and is a way for consumers to experience our brand, as a first kind of product that we invariably do. And that has, over a period of time, help us build engagement and hence, cross-sell and increase the lifetime value.
We are working in the background on increasing the -- strengthening the engagement part by launching more personal finance products, riding on account aggregator framework. Right now, it's at a development stage. So hopefully, I can share more details same time next quarter.
Absolutely. I think it's going to be a data-led strategy one way or the other. I think that's where it will play out.
My second question is I just wanted to check if there is any one-offs in employee expense or ESOP because that appears to have moved on a Q-o-Q basis out here?
In the operating cost? I explained, we have spent out about $3 million, about 25 -- sorry, no, that is -- that's a tax cost, right? There's a tax cost. There was a GST cost of INR 25 crores, which we have paid. That is a one-off.
Got it. And this came both in employee as well as ESOP, right?
Not in employee. Not in ESOP. This is in other expense.
This is in other expenses. This is not in employee or ESOP. This is in other expenses. So Sachin, very simply on operating costs, I explained we have overinvested from a capacity point of view. So leave that out. In other costs, there is a INR 25 crore, which we have paid on account of GST, and that is what you're seeing. It's a one-off.
And last question, what I have is regarding your perhaps possibility of a shareholder returns. The way we look at it, your new initiative business is scaling. There's no big M&A, which you guys are looking to do. And with the core business growing, clearly, you guys will be generating a decent amount of cash going ahead, plus there's a good cash on balance sheet. So, Yashish, any thoughts of potential shareholder returns, not immediately, but let's say, 12 to 18 months down the line?
No, I think as I said, that is something we want to evaluate after, I would say, March '26. It is not on the cards anytime soon. We are -- we continue to invest but you're absolutely right. Today, the business is not -- the current business clearly does not require the amount of capital we have on the books.
Thank you, Sachin. We'll take the next question from Sachin Dixit of JM Financial. [Operator Instructions]
Congrats on a great quarter. My first question is that I'm seeing some sort of a divergence between our take rates on insurance business versus the contribution margin that we are seeing in the existing business? So I believe if my understanding of commissions is right, then health and term as business mix grow, ideally, we should see higher take rates happening because I believe in the first year itself, both of these will be probably our top 2 sort of take rate categories.
We are still seeing a decent dip on a Y-o-Y basis in terms of take rates. While on contribution margin, I do understand the logic that contribution margins can take a hit if health gains in mix in a particular quarter. So I do understand the [ dip ] here, but what is and explain the dip in take rates.
So I think, Sachin, there are 2 points, the take rate is changing because of the mix towards savings products because we sell a lot of ULIPs. And I'm sure you must have heard from all other industry players also that right now, consumers want market-linked products, and that has always been our strategy. So I think because we sell more ULIPs, their take rate is lower and hence, the overall take rate goes down.
The contribution margin actually is just -- is around the same number, just off a little, and that is largely because of the health fresh business. When health fresh grows, the first cost is actually -- almost it comes at 0 contribution because we invest in anticipation of the renewal/trail revenue. So because of that, whenever health fresh will grow strongly, you will find there will be a small impact on the contribution, and that's what it is. So that's why these 2 are slightly different. And what you're calling divergence is because of this issue.
So health and term continuing in the same take rates as before, nothing has changed. On savings, our take rate would have come down simply because the product mix has shifted much more towards ULIPs compared to how we were in the past.
On the contribution side, health growth, which of course, is part of that health and life growth and very similar numbers across both of them. Out there, you get a first year contribution, which is 0, right, versus, on average, what is about 40% or so. And so whatever is your delta in health growth versus your overall business because overall business growth would be lower than that. That has an impact.
But in the take rate, there's nothing to worry about from any product category, except for savings, where the take rates are lower compared to last year. And it is because the savings is becoming a big category, that will have an impact in the overall take rates.
Understandable on that piece. Basically, what I was trying to refer to that our new business in core has grown by 66% Y-o-Y. Health and life, as you have highlighted, have grown at 78%. So they have certainly gained in mix, which explains the contribution margin as you highlighted, like it's a 0 contribution margin in year 1 in health. So that's why contribution. Other -- can you explain like how much is -- have ULIPs grown on a Y-o-Y basis, have they really gained in mix because 66% was...
I'll explain. Suppose savings has 25% of our business. And in savings, let's say, the margin has reduced by 15%. I'm just making up that number, right? I don't have the exact number. I could give you the number, we are seeing to provide those. Then obviously, 25%, 15% you will have an impact of about 4% coming down straight away, right? And you see that across the board because the savings margin has come down. It's not that the savings margin is lower than the rest. It is just the savings margin has come down from last year.
I mean I'll probably take it offline, but my issue is that ideally in business mix health and life have grown and savings has actually declined in overall mix, even if margins have dipped slightly, life should take care of that. Anyways, I'll move to second question.
This is on basically -- do you have basically underwritten -- sort of written off some investment in MyLoanCare Ventures. I know it's a small investment. But can you please highlight like what was the [indiscernible] expectations from this business?
So MyLoanCare was an investment that we had made. It was one of the original 3 investments that we made. If you think about it, we made one in YKNP, one in Visit Health and one in MyLoanCare. I think in hand sight, the mistake we made there was we took too much equity. We took 70% stake. And I think another mistake, this other sweet spot for us is not that. The sweet spot for us is really 22%, 35% because if you go beyond 50% the founder somehow believes that it's not their company anymore.
And I don't want to delve into it, but it was more of a -- essentially, the founder saying, it's your company so you manage it, and the founder left. So once the founders left, we don't run the company because that was not our purpose for investing. Our purpose was -- we always wanted to be a founder-led company. And I think that is really, well, our mistake. Whatever that early learning was, I think in the future you should not see us making such an investment, unless it's strategic for us in some way. We were a financial investor. And yes, I think as a financial investor, you should not take such a large stake. I would just call it an early learning.
Sure. And what was the nature of business under MyLoanCare ventures?
MyLoanCare was a NBFC and a tech-based NBFC, which was supposed to build its own business. And we, of course, had no intention of going on investing forever behind building a book. That was not our intention.
Thank you, Sachin. We'll take the next question from Ashwin Mehta, AMBIT. [Operator Instructions]
So one question, Yashish, in terms of renewal ARR, there seems to be a dip this quarter and even in terms of the Policybazaar business, it seems there's a slight reduction. So what is driving that reduction in terms of renewal ARR, this is the first time that we've seen something like that.
Yes. Sarbvir can answer it in as much detail as required, but we obviously spent a huge amount of time on this. Our renewal rates at every level, R1, R2, R3, everything is doing much better than before. R1, R2, R3 are first year renewal, second year renewal, third year renewals, renewals of multiyear policies. Everything is doing much better than before.
It is just our growth in health is really [indiscernible] quarter phenomenon. And so what you are seeing is the impact of the slow growth 12 months ago or so. I don't even know whether I should say this, but I think this was the last quarter where you would see slow growth on the renewal side and next quarter onwards you should see pretty strong growth in renewals.
And that is just a question of how they appear, right? There are 2 ways to think about it, right? There is multiyear policies, single-year policy. There's a lot of complexity in it. And that's why I'm saying, do not try to understand the renewal rate from outside in. It will be a fairly complicated exercise. But the renewal rates themselves are very robust.
And so what you should see for the year because it's something we really know. For the year, we'll get about 45% or so. It is just the first quarter was at about 34%. Next quarter will be 40-something percent and then it will be higher and higher. But it's just how it plays out.
Sarbvir, do you want to add any specific there.
No, I think you covered it. The only thing I'll just say is that ARR is a moment in time. If you look at the rolling 4 year -- sorry, 4 quarter numbers, you'll find that, as you would expect, they continue to grow. So they are on Slide 12, and you can actually see the numbers over there. So ARR is just a moment in time and it's a reflection of, as Yashish explained, somewhat slower growth last year.
But as you look at the 4-quarter rolling average, you'll find that the growth is quite significant and will continue to strengthen because our fresh business strengthened last year every quarter from Q2, Q3, Q4.
See at a very fundamental level, if there is ever a problem in renewals, you will definitely hear it from us. Like -- right now, the renewals are in like superb shape. There's really no problem. And that is a very, very granular level. You are, of course, very welcome to get into the granularity with Rasleen, but it's a complicated exercise. And then one doesn't want to get into that level of explanation, that's all.
Sure. So what you're saying is basically you saw second half of the last year being pretty strong in terms of health, and that's continued.
Absolutely.
As you get -- go through the year, there should be an improvement. And the last question.
Let me put it very simply, right? I did not expect our fresh to be outgrowing our renewals. We're in a very lucky place that that's happening, right? If you ever spoke to me in the last 3, 4 years, I always said, nobody can predict fresh growth. But renewal growth, we can predict very accurately, right? It's just we're in a very strange position where our fresh is growing at more than double the rate of our renewals, which is a very luck place to be in at this scale. It is one of the top next asset earlier.
Yes, got that. Understood. And just if you can just remind me, I missed the part in terms of what's the [ credit ] revenue this quarter?
INR 130 crores here.
Thank you, Ashwin. We'll take the next question from Srinath, Bellwether Capital. [Operator Instructions]
I just wanted you to spend some time on the savings business and the progress. We set up the off-line channel. And on top, we are kind of under-indexed on market share on the savings business. So how has it been progressing over an 8-month -- 18-month period from a volume perspective, from a product mix perspective? How successful has the conversion to off-line win from this product perspective, if you can help us understand how this is progressing, that would be great.
Sarbvir, please?
Yes, sure. So I think I will take it in 2, 3 parts. One is the, as you said, we were under-indexed on the savings side. Savings is a very large market. And I think if you see in the last, I would say, 4 quarters, we have made significant progress. I think our market share probably doubled. It was a very small number. So it was -- it has doubled from there.
And I would put it out to 3 things. One is, as you said, that we took an off-line strategy in savings first about 2 years ago. It was the first business to do that. So that first kick we got was from being able to have higher productivity and output from the offline side.
The second productivity which came last year or over the last 12 months is our regional expansion. So when we went offline, we do 2 things. One is that we had feet-on-street and we also set up centers. So we now have 12 centers all over the country. And these centers essentially have people who speak on the phone, but in the regional languages.
So the language opportunity took a while to come through. The first year was -- the productivity was not that great. But in the second year, the productivity has significantly improved to the extent that now our regional language capability, productivity is actually better than our Hindi productivity.
That's also obviously because of the quality of leads, et cetera, that they are getting. But so what is happening is that 2 things kicked in, both the physical and then the regional side.
The third thing that has happened from a product mix perspective is that we always used to say we were always a ULIP shop. But we have a capital guarantee product as well, which we sell in the domestic market.
NII is largely a pure ULIP. And I think one thing that we learned over this journey is that the customer who comes to Policybazaar is a more evolved customer. That person has a greater understanding of financial products of insurance and interest in the matter. So you have to sell them the best products. And that's why if you see, today we are selling again, some of the lowest cost ULIPs.
In fact, many of the ULIPs that we sell are lower cost than mutual funds. And we are selling these. And I think our customers have come to appreciate the fact that we are offering very attractive products. Of course, the fact that the market is doing well, is helping us. So I think if you put these 3 points together, physical expansion, regional calling and then the fact that we are selling even better products, I think has led to this, I would say, rural growth over the last 12 months.
How would our market shares be trending in ULIP sort of wheel, given that the traditional savings product seems like much more push and customer friendly in that sense. So if you were to only look at ULIP, how are our market shares currently? And how has it progressed over again, 12 to 18 months? Any color you can share, that would be great.
Again, as I said, 2 things have happened are obviously ULIP sales have gone up and ULIP as a percentage of the industry has also gone up, right? If you see the ULIP mix is probably at its highest, at least in the last 4, 5 years.
So I would say that we can sort of -- Rasleen can take you through the numbers in more granularity. But overall, I would say that our share of ULIP has gone up and ULIP share of the industry has gone up, which is leading to us doing much better on market share in the industry.
Sure, will catch Rasleen on that post. One question on health. Given that it is my rough estimate that about maybe 15% to 20% of retail claims at the hospital level should be coming from our customer base. Can we directly engage with hospitals to provide some extra service or some value addition for our customer base? How are we looking at the fact that now we have gained some sort of scale economics from an administration point of view or a claims point of view? How can we leverage all this to do something better?
So all I can say is in the last 6 months, I've probably spent more than 50% of my time on that, me and Alok, on that particular problem and that particular matter. And we have also discussed at the Board level, we are starting to develop a very clear path in the direction we are headed.
Just give us maybe another quarter or so, I think we will have a very good solution out there, which will focus a lot more -- see, at a very fundamental level if we kind of say what I have to say, right? I think today's health care model is focused on revenue per bed.
We believe the model of the future will be one that focuses on lifetime value of customer. And the lifetime value of the customer starts from the insurance premium that they pay and the value you derive is that minus the total health care expenses that exist.
Now how that gets divvied up, what is the distributor, what is for the insurance company, what's for the hospital, et cetera, et cetera, is a question mark for everybody. But I think unless one develops that at some level, we will have a challenging time in the next 10, 15, 20 years. And that's as I said, those are kind of issues, people like me really get paid to think about and that's what we spend time on. We've had some good discussions. It's too premature to kind of get into what and how you get, but it would -- our effort is to make the life of the consumer much easier. That's it. And you're right, the scale does help.
Thank you, Srinath. We'll take the next question from Dipanjan Ghosh, Citi. [Operator Instructions]
Just a few questions from my side. First, if I look at your contribution margin trajectory versus your EBITDA margin trajectory, there is a clear difference. So just wanted to understand what sort of leverage benefits you're getting on your overheads ex of business acquisition cost because contribution margins are down, but EBITDA is up. So definitely, there is some savings per scale on maybe brand spends or other expenses, if you can give some color on that.
And the second question would be in terms of your incremental investments in the hybrid strategy, and also new initiatives in terms of scaling up your feet-on-street or the overall physical presence, how should one think about it?
Lastly, pB Money and Pb Rewards, you have mentioned some pilots that you'll be doing during the course of the year. If you can just elaborate on the strategy behind that. And will there be any cash burn going ahead?
Lastly, two data keeping questions. If you can give the retail health growth number for the quarter? And the second will be -- just on the renewal ratio follow-up, I would assume that in your core business, the renewal ratio is probably up Y-o-Y, but the renewal growth rate is just reflecting the trajectory of new business growth rate witnessed in the base quarter? Is the assumption correct?
Okay. Let me -- okay, Naveen -- sorry, we can go through those questions one by one. Of course, if our contribution margins are at about 40%, that will have an advantage, our fixed costs are genuinely fixed except for, yes, at times, we have to invest for growth.
Now what a growth investment imply, right? Let us say we are doing the health business and we want to start a new focus on a segment, it could be anybody, it could be various segments. For that, we would put together a team, and we would start growing it. As there will be initial investment in that.
See, any team, any focus what we have understood it costs you a couple of crores a year for that little segment focused team creation, right? And then it takes you maybe 1 year to kind of breakeven on that. So there is a bit of cost that comes on the fixed side there. But other than that, our fixed cost is generally fixed here.
We will have standard increments at about 10%, 12%. And I would even say, even when these are new businesses, we -- so the way we utilize our management is most of the management is ready to think about new businesses and -- or at least we have some proportion of our management that can think about new businesses.
As we do new businesses, if you think about our PoSP business, our corporate business, our UAE business, most of that has happened through internal management. And I would say even if you think in the future, we are envisaging internal management to be leveraged more and more for that.
So I think, yes, the costs are generally fixed and they will obviously grow much slower. The benefit comes in from there. On the renewal part, I know everybody is having a difficult time trying to grasp, why 34%, why not higher? For the year, we will be at -- between 45% to 46%. Just for now, we don't give guidance, but on that thing it is so precise you can't really get it wrong much.
So leave it at that, just wait out the year and let it play out. If you're really interested spend 1 hour or 2 with Rasleen, but then get into the full depth, right? Then actually get into what are multiyear policies, what are single year policies. I don't even know if Rasleen wants to discuss that, but then get into all of that.
But on everything, things working well. This is one of our -- as the biggest source of long-term profits, you can imagine how much time we would spend if we thought something was actually wrong there. What were the other questions?
Sorry, incremental investments.
Incremental investment in PoSP, et cetera, I think we are -- we have said we will breakeven in a few years, and that is our plan. The management is going to be incentivized on the basis of profits. But with a 5- to 7-year time horizon, we don't expect investments to be higher, but listen we are not going to shy away. As I've always said, there will be a time, we are here to do well in that category, right?
We are very confident of the category. Whenever required, we will invest behind it. We will keep our options kind of open and close to our chest. PB Money, PB Rewards, Naveen, if you have any update on that.
So like I mentioned in the earlier comment, we are thinking about strengthening the consumer engagement. We've done well in terms of credit engagement and credit management for customers with 46 million consumers kind of taking their credit score and then a lot of them using that to track this score, improving their credit score.
We are extending the thinking on financial management on the back of account aggregator framework. The idea would be to just simplify it for consumers, help them manage their money better, [ leasing ] engagement. That pilot is expected to be launched in Q2.
We do not expect any significant cost, if your question was around the cost side. The PB Rewards was more around the loyalty and the customer lifetime value and how do we drive or give a higher incentive for consumers to come back to take the setting of the third product as and when they need it.
So we're thinking through that. And I've mentioned, if you see the slide that our pilot is expected to be in Q3, Q4. So again, no significant cost implication from this year's perspective. We'll have more clarity. When we do the pilot basis, the consumer responds. And -- but yes, from a this year perspective, nothing significant from a cost perspective.
See, where do you spend money? You largely spend money either in -- I'm saying direct cost money or upfront money, branding or operating costs. Those are all within direct costs. When you're building a B2B business, you're unlikely to spend that much. And I say B2B because the core brand out there in Paisabazaar. And the core brand is built and everything else is working in the background of that. So don't anticipate anything major on any of those add-on mechanisms. And we'll obviously get more clarity once we kind of get there.
Also on the operating costs, since you asked about field people and all. See, whether people are in the call center or whether people are in the field, it's absolutely fungible. So you'd be very surprised, it's not like people are only in the field. Sometimes we have a mix where people will be in both the call center and the same people will go out and have meetings.
Sometimes, we will have separate teams, one doing the calling and setting up appointments, another one during the physical meetings. And somewhere, we will have direct all the way to physical and it would depend on location and terrain and various other things.
And of course, as Sarbvir explained, there's a lot of sophistication going on in terms of which languages, et cetera, but that is all part of our direct cost of operations. So there is no separate investment going in any one of them, in which we [indiscernible].
Yashish, just on the retail health growth for the quarter?
There is no surprise that the 78% number is fairly indicative of both health and life. So there is not more than a 2% difference between one and the other.
Thank you, Dipanjan. We'll take the next question from Madhukar Ladha, Nuvama. [Operator Instructions]
So I wanted to just clarify one thing. On the renewal premium growth, you mentioned that while for this quarter, it's a little bit lower. But for the year, you are pretty confident that it will grow at 45% year-over-year, and that is for the online business. Did I hear that correctly? Or...
Absolutely. No, no, you're absolutely right.
Okay. Perfect. And then just moving on -- so if you look at the retail health industry, that's growing closer to 20% ballpark. But we are growing closer to 80%. Now -- and we all know that the number of lives covered are not growing at that rapid pace. So a lot of the business is churn business, right? Now I wanted to get a sense of in the new lives that we are getting, what percentage is churn?
Second, also, how much of this 80% growth is because of multiyear policies. And my guess is that multiyear policies will be more profitable right in the first year itself, right? So then why is our core contribution margin not improving even more sharply?
Clarify the second part -- let me clarify the second part, Madhukar. Our multiyear this year is lower than our multiyear in the previous years. So that is certainly not [indiscernible] growth. In fact, if anything, our growth is understated because of that. So I'm just clarifying that because obviously, that's something we'll track.
Our churn as a percentage and we clarified this in the past also as part of our new business is much lower than industry, somewhere between 50% to 60% of where the industry is. I guess that kind of clarifies both points.
Yes, we are growing. We are very happy about that, but that growth is additive. If our multiyear was exactly the same as what it was 12 months ago, our growth would be higher, not lower. So yes, we're getting more single-year policies than multiyear policies now.
In fact, if I could just add, there are 2 things that are playing out in health insurance, Madhukar The affordability is becoming a bigger and bigger concern. So actually, a source of growth for us is the fact that we are able to sell on monthly, quarterly modes as well. And so it's not really the multiyear policy that are driving our growth, it is -- I would actually say the reverse that the monthly quarterly modes are driving our growth.
And the second thing that is happening is that we are a source for fresh lives in the industry. And that has always been our -- if you think about it, that's always been our story that we are bringing fresh lives into the industry. And obviously, then companies can sell other products to them, et cetera. And of course, we can also do that.
So I think our portability is not a driver of our growth. It is the fact that we are bringing fresh people and like I said, part of it is affordability, and part of it is the product. So if you look at the products that are available right now on the Policybazaar platform, almost, I would say, a significant portion of them are at an advantage versus the overall market.
Because as a company, we are not really focused on ticket size. We are not trying to drive ticket size, attachment, et cetera. We are actually trying to sell core health insurance. And that, while it may sound strange is not necessarily every distributor's thought process. So I think that -- those are the kind of, I think, 2, 3 points, which you should keep in mind as you think about our growth.
Understood. And just a follow-up on the margins. So what will be like the margin differential between like a 3-year health policy that you sell versus a 1-year health policy? So we know that the annual policy is sort of negative contribution margin.
See when you look at an NPV basis, they are the same. We, internally, I know what we report as financial, number obviously has to be financial, but what we internally look at is NPV accounting. They are exactly the same whichever way you do it. So it actually doesn't matter any -- either way.
I know what you are saying but okay, from a cash flow perspective, maybe you make a little more money in the 3-year policy. So yes, you might make a margin on that compared to a fresh policy. That's okay. That's something we don't think too hard about, yes, quite honestly.
[indiscernible] 70% to 85%.
Yes. So eventually, it's about building the renewal base, et cetera. So -- but again, something that one can spend some time with Rasleen and try and understand a little more deeply if one is really interested in that. See as shareholders, I would say, shareholders will be invested again -- interested in the NPV, which is where we guys are interested, right? Looking at just quarterly numbers may not be the best on that.
Thank you, Madhukar. We'll take the next question from Yash Gandhi, Stallion Asset. [Operator Instructions]
So my first question is that your total premium has grown 62% this quarter, but your revenue has grown less at 52%. So I just want to understand why is that the case? And ideally, would the revenue and premium grow in sync?
Longer term, you're right. Premium and revenue would grow in sync. But as we explained in our savings business, the margins have -- sorry, the take rates have reduced in the last 1 to 2 years. And that was, as Sarbvir explained earlier, there were capital guaranteed products, which were of significant proportion.
They are reducing and the ULIP part is growing and the ULIP has lower take rates. And it's good you kind of mentioned it that way. Assuming our product mix did not really change much from 62% to 52%. Actually, savings have grown fairly rapidly. But that alone would not explain it.
It is a decline in the savings take rate, which would explain the 10% gap that you're talking about. So see, if you think about it, 1.6% sales to get 1.5x the revenue, so that is on a percentage basis, a decline of about 7%. If savings was about 20%, 25% of our business and that declined by 15%, that would pretty much kind of cover a bulk of the explanation.
Right, right. So the percentage of savings you're saying has decreased in terms of total mix?
No, the percentage of savings has not decreased. If anything, it has increased a bit, but that increase alone would not explain the shift. What would explain the shift is a decline in the margin of savings. See savings might have been a higher take rate earlier compared to where it is right now. It's at -- it's almost 60% of the take rate or something.
Got it, sir. And my second question is health insurance premium has been very high this year than the last year. But I just want to understand why the ARR in your renewal revenues, it has reported a sequential drop. I'm sorry if this was clarified before, but I just want to understand that.
Sequential means quarter-on-quarter?
Yes. Yes.
Look, the crazy thing is actually, our insurance premiums and revenue in Q4 and Q1 are very similar. That in the insurance industry is unheard of here. Like whose Q1 is going to be equal to the Q4? So I think the right number to look at, that's why we put it in the presentation, it's a 12-month rolling number. That is the right way to look at it because that takes care of seasonality. And then you see the actual growth quarter-on-quarter. It's like -- yes, it would be a bit unfair to compare. Half the industry goes on holiday in Q1. So Q1 and Q4 comparison is a bit unfair.
Thank you, Yash. We'll take the next question from Shreya Shivani, CLSA. [Operator Instructions]
Okay. I have 3 questions. First is a data keeping question. Have you shared the premiums for PoSP, Dubai and corporate business for the quarter? And if you can share that, please.
Second is on the health insurance industry. So this has more to do with the industry and how it could impact the distributor such as yourself. So a lot of the manufacturers at different point in time since the past 2 years have been taking different price hike, and you did mention about the problem with the affordability in the business. Affordability for the end customer.
So what has been your experience with the customer behavior when such price hikes have come in? Or will we start seeing this behavior change or any impact from that behavior only once the renewals from second quarter or third quarter starts kicking in for you guys.
Do you expect the porting out like the customer may still be on your website, but they may port out from one manufacturer to another manufacturer. Do you expect those trends to pick up or any concerns if you have around that?
And third is on your traditional saving products, which is par and non-par. If you can help us understand, have you had any discussion with insurers in change in commission structure or deferment of first year commission. Any color on that will be useful.
So first of all, for your health-keeping question, PoSP is about 1000 -- sorry, not health keeping, data keeping. Health is so much in my mind these days.
Yes, yes, data keeping.
PoSP is INR 1,000 crores odd. Dubai is INR 213 crores and corporate is about INR 272 crores, right, so that we get that out of the way.
See, health is very -- okay. So first of all, -- the price hikes that happened in the industry are actually something that happened about 15 to 20 months ago. We've now been through a reversal of that cycle. So that happened then. It is not as extreme right now as it was back then.
And our renewal rates have held up. In fact, they are only brewing. So we don't see that issue. As I explained, our porting is lower than the market. So how do I say it in the simplest form, we have a solution, we are not the problem is one way I would leave it. And I think we have superior disclosures.
We have enough data to kind of prove that, we have better sustained claims ratios, and we have better claims settlement rates. So as I said, we are part of the solution not part of the problem.
There is another side of the problem, which is fee-for-service model. I think that's unsustainable in any country, not just India. Wherever you look in the world, if -- you have a fee -- a free flowing fee-for-service model for health care. Essentially, every health care provider is looking at room rent per bed. And today, you are seeing people having INR 60,000, INR 66,000 room rate per bed.
That -- at a fundamental level, forget about insurance, forget about anybody. Who is the average customer who's buying these insurance policies? This person has an income of INR 6 lakh to INR 10 lakh a year. That's the bulk of the people who buy these policies, right? But how can a person like that afford to spend INR 60,000 for room rent, whatever, it's impossible, right?
So I think our health care is not -- facilities are really not taking care of that next 20%. It's not an insurance problem. This is -- nothing insurance guys can do about it, right?
Correct. Correct.
I think that model needs to be fixed. And we would try to figure out how we can play the most important part in that. But I think that model does need to be fixed.
And what we need to do is our health care today is for the top 4% of the population. We need to figure out how the next 20%, 25% of the population is going to handle it. And unless that is done, prices will keep going up year-on-year because that's going to be an issue.
So that is correct.
So I just want to add some color. Pricing, you have to understand over the last 4 years, 2 years, they didn't go up at all because of COVID. After 2 years, we had one big sort of round and then now it's much more normal, as Yashish explained. The reason we are able to handle these price hikes. And yes, they do play a part where they happen, especially when they are very high, is 2 things.
One is that we are selling a lot of the products that are available on our platform if you see. They are essentially modular products. There's a new design that over the last 15, 18 months, we have sort of work worked our partners to introduce.
In these products, one of the features that they have is that the no claim bonus accumulates very strongly from year to year to year. So there are some, which are 5x over 4 years, there are 7x. Now there are some, which are even having unlimited sum insured.
Now when you have these kind of products and when their renewal comes up, we actually find that the renewal rates are higher on an NOP basis than any other product because the customer, supposing you started with INR 10 lakhs, and now you're at INR 20 lakhs or INR 25 lakhs, your ability to change becomes much less because the person who's going to sell you a fresh 25 lakh product will be much more expensive. So that is one way that we are handling this thing.
And the second, which is, I think, again, Yashish touched upon it, is the fact that when you are paying up for a product, you want to ensure that you'll get that service. So the promise that we have around claims, the fact that people are getting more and more confident in our ability to handle those -- that claim is also helping us on the renewal side.
So I think these are some of the -- right now, I would say, tangible things that we are bringing to the table on the health side.
That's very useful, especially this product that you've spoken about that you've partnered with your insurers. So the insurers are not offering it on any other distributor or it's very exclusive with Policybazaar. Is it like that?
No. As you know they are -- by regulation, they can be no exclusive product. So these products are offered. The reason that I think we have an advantage on them is the fact that because we have better disclosure, because you are able to price the customer better on our platform, it is more economical to offer these to our customers versus others. But of course, insurance companies are free to [indiscernible].
Shreya, what is a good quality distributor? A good quality distributor is somebody who wants to sell more consumer-centric products, which may at times have even lower take rates compared to other take rates. A good quality distributor is one who does decent disclosure of customers compared to the rest of the market.
So that companies really understand the risk at the point of inception and do not have to put in that effort at the point of claims. And a good distributor will work with insurance companies and with its customers to create products that allow the customer to stay in the same product for a longer period of time.
A good distributor is not one who just keeps porting customers from left, right, center, right? And that's why I said, we believe we are a good distributor. We have enough data to prove that. We believe on the claims side, we have now put in enough ability to really solve for claims. We are getting a lot of positive feedback for that from consumers. We believe that is one of the biggest reasons why our fresh growth is what it is, but nothing else explains it. Nothing has changed in our business model, except for the fact that we have gotten much deeper on the claims side.
And of course, we continue to work. So you may have the same product, but somebody else may not be as keen to distribute it as you are because you are more focused on those pieces. I think it's not fair for us to say more than that.
Sure. And sir, last question on the traditional savings products. Any color you can give on any communication from insurers on commission structures, et cetera.
So obviously, we can't discuss anything related to our insurers. I'll just give you a sense. We don't sell participating products on our platform. And non-par is also a small portion of our mix.
And we don't plan to expand into that sector? Or right now, it's a limited portion for us?
Yes. Right now, we have no plans to do that.
See, at a fundamental level, whenever lower take-rate products become available, you will more often than not find Policybazaar as a distributor jumping towards them. And you would find many distributors having an aversion towards them. You can be the best judge on who's going to be the eventual winner. See the eventual winner according to me will be the one who goes for more and more consumer-centric products.
Thank you, Shreya. We'll take the next question from Nischint, Kotak. [Operator Instructions]
Yes. Could you give some color on your market share in retail health. You've been growing very fast for the last 4, 5 quarters. Just curious to understand how the headroom would be.
We have our fingers crossed. We just hope this growth continues for the next 3 years. We are -- the fact that we just invested $3 million in additional capacity is just showcasing our hope and confidence both, I would say. I hope we've not proven wrong and we have confidence we won't be proven wrong. Let's just leave it there. I think it's -- there's no point discussing market share or not.
No, the fair point, but I'm just saying that a single player, how much market share can a single player sort of -- I know you are a...
I think they're are quite small in the big scheme of things. I think we are overall maybe 3%, 4% of the overall insurance piece. I think looking at it in a very segmented granular way may or may not be the right way. So I'd say, yes, we also worry about those things that you're talking about. They're not for this discussion yet.
No, I just want to be very clear. We are right now -- we are nowhere near any such issue that you're, I think, trying to refer to. We are a very small part of the industry. There is a lot of work to be done in terms of getting a lot more Indians to be covered, right? 5.5 crore Indians have retail health insurance. So it's very small. There's a lot of opportunity ahead.
Let me give you a data point that you perhaps are already aware of. In the U.S., health insurance industry is [ $800 billion ]. In India, the health insurance industry is about $10 billion. I know the U.S. economy is bigger and their health care is bigger and all that stuff. But it's not that same difference of almost 80x is not really explained.
So I think my fundamental belief is health insurance probably needs to be 8x to 10x bigger, not grow at 15%, 20%. I think nothing grows in this linear manner. So at a very fundamental level, some issues need to be solved for health insurance to be 8x to 10x of where it is right now.
And we are working hard to solve those issues rather than worrying about, okay, what share and who become -- it's too. India is not a country, in my opinion, where you think about these things. You think about how you can change so that the overall structure can change so that it can become 5x 10x rather than worry about, okay, who has how much share of what and so it doesn't grow that way according to me. And I don't think industry will grow that way.
In my opinion, either the industry will do well or it will not do well. Currently, in my opinion is not doing well, and that's because of issues. Yes, we are doing well. But overall, there is an issue, and we all know that. And I think that issue needs to be resolved.
And if one is kind of looking at around -- I think you mentioned around 70-plus percent growth in health and life and more or less similar, as I said, roughly 70-plus, what would be the increase in lives covered for you versus, let's say...
There is no increase in ticket size -- there is no meaningful increase in ticket size. In fact, there is actually -- yes, it's pretty much the same. So there may be some price increase, but an equal amount of multiyear coming down. So actually, the ticket size is flat. So if our -- precisely if our total premium has grown by 78%, I would say the number of lives have also grown by 78% for us on fresh business.
And just finally, within your product mix, do you kind of have some thought process on concentration levels and how you would want to target around various products?
See, our focus is what we've always said, coverage for social security for the middle class. What is social security? It is term insurance, it's health insurance, it's child cost planning, child education cost planning, it is pensions. It is all of those. Yes, we also do motor insurance. We also do 2-wheeler insurance. We have a tech platform that does it, but our focus is extremely clear where we believe the middle class defined as anybody earning between INR 50,000 to, let's say, INR 5 lakh a month, maybe INR 4 lakh a month.
In that band, 200-odd million people, there is a solution that they require, and that solution needs to cater to their social security. That social security if they lose their job, if they die, if they fall sick. There are some serious financial consequences of that, and we are trying to make sure those consequences don't happen for them, and they are covered for them. That's basically our focus.
Yes. And I just want to add that the way -- see, we have obviously, a fantastic team, which runs the business. We are only representing them. And I think they don't worry too much about the mix and all that. Everybody tries to do their level best to drive the growth of their business that they're running. So if you're running motor, you're trying to do the best for motor. You're not really thinking whether what the health guy is doing.
So I think they are very fiercely independent teams and take their, I think, job very sincerely and very seriously. And so there is no mix that we are trying to reach. We are basically letting everybody do the best they can and we try to give them the resources and encouragement and support. So that's how I would say, that's how practically the company functions.
Thank you, Nischint. We'll take the next question from Nidhesh Jain, Investec. [Operator Instructions]
On the reinsurance business. Is there any update on the reinsurance business which we proposed last year.
No, we are -- so we got a license few months ago, we have set up a small team led by one of our, I would say, one of our strongest managers. He and along with his team are working on it. I think it will take us a while to figure out. Our focus continues to be that how can we leverage the fact that we are so big in retail. How do we use that retail and create better propositions for customers. And, I think, over a period of time, you'll see some progress on that.
And this business will be on reinsurance booking or reinsurance manufacturing?
No, no. We are clearly not manufacturers. There are two things we do not do. We do -- we are never an insurance company, we are never an NBFC. Those are two things we just do not do at least as of now, any changes, we'll let you know, but there is no intention of changing on those two.
Okay, sure. Second is on the Paisabazaar business. Is there a thought process to build a similar business to PoSP aggregating the small DSAs all across India and if, yes, how we plan to do that?
So I think Paisabazaar, we are spending a bit of time reviewing the strategy to give us some time to kind of come back on that. Currently, we have a business, which is non-PoSP, which is mostly unsecured credit. There is a possibility we could build a PoSP business on the secured side. There's a possibility we could just -- there are 2, 3 players that exist, right, on the PoSP secured side, each doing about INR 600 crores of revenue There are 3 players out there as I see it. And we feel that is an opportunity that we might leverage. But what we really want to be very precise about our direction on Paisabazaar before we act from here onwards.
And lastly, if you can share the EBITDA and contribution margin of the credit business for the quarter?
We're not sharing.
[indiscernible] separately. We only share breakup for EBITDA.
I think in the similar...
The same ballpark, yes. It's in the same ballpark. There is -- yes -- I think insurance is higher. Just looking at the number, insurance is higher. There is -- but it's okay. It's still a ballpark here. So if the total is 14%, maybe all is between 10% to 15% here.
At EBITDA level on the contribution side, again, they are similar. In fact, I would say the credit business is a slightly higher contribution as you would expect, because the operating cost in the credit business is usually lower. So the credit business, if anything, is a slightly higher on the contribution side and slightly lower on the EBITDA side. Yes, because there is a cost to running an infrastructure and the cost is there.
Thank you, Nidhesh. We'll take the next question from Jayant Kharote, Jefferies. [Operator Instructions]
So I was just joking. On an annual basis, Sarbvir, and Naveen's costs are quite similar. But of course, Sarbvir's business is about 4x bigger. So that automatically makes [indiscernible] at Paisa a little harder. But I'm sure Naveen has a team as well as Sarbvir has a team. Sarbvir's team is bigger. But it's about twice the size, it's not 4x the size. So anyway I'm just sharing that every business has to have a certain amount of fixed cost.
Congratulations the whole team for the great set of numbers, growth certainly looks healthy. On the contribution margin and just picking up brains, if I look at this $3 million investment, the actual contribution margin might actually have expanded this quarter to north of 45%. But you also mentioned to another question that the higher contribution and mix change from health and savings would have led to some lower margins. So I'm just trying to marry the two and understand what has happened.
Yes. We are -- at this moment, we are focused on growth here. And we are confident and hoping and pray that the growth continues. And from whatever inquiry base, et cetera, we can see we are there. Things feel good. So in preparation for that, we don't want to optimize. As I said, as a company, we are in that phase where we are growing like a kid.
And at this point, we don't want to optimize on the input of protein. There will be a time when we do that, it's not right now. But I'm sure that time will come, and it's a very easy thing to do. Trust me, that's a very, very easy thing to do. It's not a difficult thing to do when we want to do it.
But it's not something that is the focus right now. But you're right, we spent about $3 million extra in this quarter on the operating cost. Then we had to if we just had to maintain just this quarter sales, that is more an anticipation of future quarters' higher growth, et cetera.
So is it fair to assume next quarter if current growth rate continues, this recovers?
Yes, nothing happens in quarter, don't get into all that, right? The only thing I can predict very precisely is renewal rates and renewal premiums, which I've already done. Nobody can say what will happen in September. We have some idea what's going on in August, but -- and July, but we can't. It's very difficult to predict here.
I was trying to say the new OpEx that you have done this...
No, I don't to get into that business, what will it be next quarter and all that stuff. No. Where we can we are and we are very open about it. Where we can't, we can't.
Understood. And one question, which I've asked you last quarter as well as the renewal take rate, it seems to have again moved up to a very healthy 7% plus number. As the renewals stack up in the next 3 quarters, you're confident of maintaining this one?
That must be just a product mix shift or something...
Yes. Yes. it's a shift between products. But there's nothing in it. Not like we've negotiated better rates or anything like that. It's a fairly, I would say, stable equilibrium right now. And yes, we're just continuing with it.
Thank you, Jayant. We will take the last question from Sanketh Godha. [Operator Instructions]
So one basic question which I had is that -- you said that you spent almost INR 25 crores on creating capacity. Just wanted to understand, this has been done on core or predominantly on PoSP?
Core, core, core. Only core.
Okay. Okay. And one second question, which I had on PoSP revenue recognition. To the extent I understand the sector, in the past before EoM the payout to the PoSP were done by the insurance companies directly and you to get the net part in the top line. Now the payout is happening at a gross level to the distributor and you guys pay down to the PoSP. So that got effective from which quarter probably from the second quarter of the last year, I just wanted to understand how the things have changed.
So, Sanketh, while I respect the question, it's an irrelevant question from. So there's no such change in our system. In our system, the revenue we were reporting the revenue we are reporting are like-for-like apple-for-apple, there is no game there. If I was to just look at premiums alone, this quarter, PoSP premium was INR 1,000 crores. In Q1 last year, the premium was INR 360 crores. So that is what explains it, right? So obviously, if the premium has grown something, there's some revenue also attached to that.
Got it. And lastly, when you said you invested INR 25 crores in core. Is it largely to strengthen your offline strategy within the core? Or...
Yes, there's no such precision. There would be both capacity build. Capacity is both at the call center and at the feet-on-street. Please appreciate feet-on-street is about 20% of sales right now. So it's not just [indiscernible] and I'm sure it happened in many ways, right? You would go into different linguistic centers. You'd go to new places. And when we say investing ahead of capacity, it is capacity, which would not have delivered value in this quarter.
But, obviously, our hope is that within 3 to 6 months, that capacity starts to breakeven, [indiscernible] that's all our data is pointing in that direction. And yes, I think it's just that. It's just we picked up a little faster than we really would have.
Got it. And lastly, this 78% growth what you said in life and health, that is only reflected to core, right? It is not a PoSP and core put together?
No, that is just the fresh -- that's just the core business, and that's just the fresh business. So please understand our value driver is our fresh health and life business of the core. The PoSP business gives us a lot of volume. It's not a long-term profit driver for the company.
Long term, maybe 5% of our profit might lie in the PoSP business, right, maybe 10%. It can't be more than that, right? So when the engine works, we feel very happy because the engine working delivers all these renewals. Renewals are not earned in the same year. As I said, I can't change my renewals too dramatically. If we say 45%, it could be 44% at worst, it could be 46% at best, right? It won't change much more than that in any given year.
And it's vastly the work of the past engine that is paying up now. And -- but the engine of growth is this. So at a very fundamental level, when we look at our NPV dynamics, that is growing at 78%. And I think that is where we feel good.
Thank you very much, everybody, for joining today. We appreciate your time and hope we could clarify a lot of your questions. Thank you. Have a great day.