Good evening. Thanks for the opportunity. A couple of questions , first one is on margin. If we look the shift of around 16% between par and non-par mix, the margin is still holding up, it's a commendable performance. Is it kind of supported by the product level margin changes, due to higher rider attachment, changing PPTs, or due to some support from yield curve movement? If I look at that context, a quarter earlier, in your call, you were sounding more confident about margins than APE growth in the first half. But on that note , the margin outcome has not come that great. I mean, if I look at product mix, of course, great. Bur what changed since Q4 results to Q1 that led to this higher acceptance or demand for par.. Second question is on persistency. I noticed a sharp improvement in 61 st month, but let me focus on the marginal worsening of persistency in 13-month. So, if you can help in understanding, what has led to this marginal deterioration in 13-month persistency? And on the note, with the sharp improvement in 61st and maybe some bit of worsening in 13th, is that contributing meaningfully positive towards operating variances?
Questions across 68 calls
Avinash Singh
Emkay Global
HDFC Life Insurance Company Limited
A couple of questions. First part on growth outlook. In the first half, a very strong growth, 24% APE growth. This also has a tailwind for the first 5 months, you're improving share within HDFC Bank channel. Now in the second half, that is going to be part of the base. Also, there could be some frictional issues at least in the initial 1, 2 months with regard to the new product launch and all. So considering all this, what kind of growth outlook do you see for H2, particularly if you were to sort of compare with H1? Because in H2 also, you have some sort of slight benefit also from the favourable base, that is on growth side. In relation to that, you also made a comment regarding buoyant equity market. So is there some s ort of rethink of strategy around ULIP for H2 with regards to growth? And coming to margins, in second half, you will have impact from this new surrender regul ation playing its part. At the same time, with whatever growth-related cost reduction that you will have, how do you see the margins for this H2? I would say that there are a lot of unknown variables for us to sort of take a call on how the margin is going to be; because the growth composition across product segment and particularly the continued probabl e sluggishness around your credit life due to whatever is happening in the u nsecured PL or micro finance segment, so that will also have bearing. So how do you see sort of a margin in the second half?
A couple of questions. First part on growth outlook. In the first half, a very strong growth, 24% APE growth. This also has a tailwind for the first 5 months, you're improving share within HDFC Bank channel. Now in the second half, that is going to be part of the base. Also, there could be some frictional issues at least in the initial 1, 2 months with regard to the new product launch and all. So considering all this, what kind of growth outlook do you see for H2, particularly if you were to sort of compare with H1? Because in H2 also, you have some sort of slight benefit also from the favourable base, that is on growth side. In relation to that, you also made a comment regarding buoyant equity market. So is there some s ort of rethink of strategy around ULIP for H2 with regards to growth? And coming to margins, in second half, you will have impact from this new surrender regul ation playing its part. At the same time, with whatever growth-related cost reduction that you will have, how do you see the margins for this H2? I would say that there are a lot of unknown variables for us to sort of take a call on how the margin is going to be; because the growth composition across product segment and particularly the continued probabl e sluggishness around your credit life due to whatever is happening in the u nsecured PL or micro finance segment, so that will also have bearing. So how do you see sort of a margin in the second half?
HDB Financial Services Limited
Yes. Hi. Good evening. Thanks for the opportunity. A couple of questions. The first one is again coming to that, your asset quality or credit cost. I mean, of course, you alluded partly to the seasonality of Q1, but I mean, if we were to look numbers since March 2024, quarter-by-quarter, I mean, the gross NPAs have gone up, and credit cost also inched up. So, overall, I mean, where do you see, I mean, given that your customer mix, your business segments, at what time, I mean, or like at what levels do you think it's going to peak out? Because the question is that, okay, now, I mean, of course, March ’24, a pretty low level of credit cost. Now, we are nearing 2.5%. So at what point, I mean, given the macro scenario or particular to your business strategy, where do you see th ese peaking out? Because this is not typical seasonality, because even if you look at quarter -on-quarter, it has been just inching up over the last five-odd quarters. So, at what level, I mean, do you start to see sort of that, okay, that has peaked out and it should improve? That's one. Second, if I, of course, you partly, I guess, touched upon this question, if you look at your profitability matrix at the end of the day, I mean, right now, it's a bit subpar. Now, what would be the kind of your realistic goal in terms of ROAs and improvement from here? I mean, if you can just break it down into what kind of improvement you expect from NIM and what kind of expectation, I mean, improvement expectation is from credit cost, because, I mean, given your kind of a business model, Opex will not likely see much improvement. So, how -- what kind of improvement do you see in terms of NIM and credit cost? And what is sort of your target ROA, if one can say? Thanks.
Okay, thank you.
REC Limited
So a couple of questions. First one on AUM growth. So as you rightly said, I mean, these prepayments are part and parcel of the business. Now if we were to look at in this backdrop, the biggest drag right now in AUM growth is distribution-led asset. Now here, my question is that, okay, considering all the schemes, some picking up, some maturing, how do you see this -- the distribution-led AUM to grow? Because last year, it had grown at 2-odd percent only. So how do you see over, say, next 1 to 3 years, how this distribution-led asset will grow eventually, I mean, if the RDSS were to pick up, PMC, so most of it was not to pick and some schemes were to mature? And related to that, coming to thermal, thermal has done okay last year, I mean, despite some resolution impact of 3%, it has grown at 8%. Now if we were to look at the NEP 2032, now the idea is 95 gigawatts of thermal, out of that probably 35, 40 gigawatts will come from a state. Now given that gestation period of nearly 6 years for thermal project, more or less, if we are really serious about this 95 gigawatts, the planning to execution should start in the next 1, 2 years. Now in that context, can you give idea that, okay, which are the state utilities who is going to contribute a large part of this 35, 40 gigawatt that is going to come in the state sector? And what is the kind of visibility here because the thermal growth will again be key for your renewables particularly? So the first question, that thermal growth and distribution. Second, when it comes to your profitability, I mean, some of the projects there will be -- I mean, the interest rate is declining. And also, there have been some noise around your estate-related project, you charging higher interest like a Kaleshwaram project. And once those kind of rate negotiations happen, probably there will be some pressure on your NIMs. And also this credit cost will start to see a more normal as we go past this recovery phase. So how do you see kind of your NIMs and ROAs to be kind of trending, say, after FY '26?
Two questions. The first one is that on conventional generation . The good news there, what I see is that Mahagenco has already floated a tender even for fin ancing of its unit 11 and 12 at Koradi. That is nearly INR10,500 crores kind of a loan requirem ent and it particularly suits into your kind of a borrower criteria. The question here I have is that, okay, I mean, it's a great thing that finally things are mov ing in state utility sector in thermal. But in that bid document, they are kind of what they have said is the interest rate under 9 % . N o w - - a n d t h i s p r o j e c t involves nearly kind of a moratorium of 6 years, I mean, COD pl us 12 months and COD will be close to 5-odd years. So now with the conventional thermal sector, a 6-year kind of a moratorium and under 9% yield, I mean, how does it pan out for profitability if you wer e to fund this one? So that is -- and if this is the case, I mean, across the most state utilitie s, if they -- as and when more and more projects come for financing, then do you see kind of a pre ssure on your margins emerging? Because, I mean, these are conventional projects with long gestation period on moratorium. So this is -- that is where I would like to hear your thought. Second one is more kind of on data. If I look at Slide 21, and you mentioned, including Lanco Amarkantak, there were 3 assets that got resolved. I guess there is some kind of a mista ke here in your -- NCLT is still saying 13 projects where the outside NCLT is saying just one, w here if I recall correctly, all these 3 were kind of under NCLT. And also, if I try to use the PCR of 68% and 50% are 2 categories as given on Slide 21, the total PCR is going up. So there is something, I mean, I guess, miss here. So these are my 2 questions.
Sir, the question was more that do you see t hese ki nd of proj ects getting funded at a 9% or under 9%? Because I mean, these are long gestation period, you have to provide 6-year moratorium. These are not renewable. So question was more on th e rates. I mean, do you see these rates being kind of a viable -- and particularly, if this kind of a rate pressure comes in more and more state utility project, will that put a pressure k ind of on your margins? That was the question. And related to that also here, despite being a brownfield proj ect, this is like the capex or rather cost envisage is like INR10 crores per megawatt. So I mean, yes , so is that the thermal power generation cost also kind of increasing kind of create some kin d of doubt over the viability of the project?
Bajaj Finserv Limited
Yes, good afternoon. Thanks a lot for the opportunity. Two questions. The first one is on BAGIC. Now, your capital position is very, very strong and also there have been some changes regarding the cross-border insurance regulation and all. Do you see , any changes in your retention strategy from here, because I mean, if I see typically, you have been writing crop as explained earlier but your retention has been lower despite the fact that your capital position is very strong and now, they'll kind of add the margin, are there some changes required to this cross -border reinsurance and all. So, do you see yourself kind of changing your retention strategy or increasing your retention going forward? That's my question on BAGIC. And on BALIC, now, a lot of regulatory changes are already kind of behind in terms of your Surrender regulations or EOM going forward I mean and also that the markets are now more sort of I would say balanced than the buoyancy it had in last year. What kind of product mix and corresponding the trajectory of VNB margin you see from here onwards? Thanks.
Thank you. Thank you.
Cholamandalam Investment and Finance Company Limited
Good morning. Thanks for the opportunity. M y question is on opex. I mean, in this Q4, if we see opex as kind of the growth of opex has materially slowed down. I mean that is a bit typical of Q4. So, what were the reasons? And going ahead with some of part of opex seeing increase with launch of gold finance and all, how do we see opex to trend over the next year?
So questions, I mean, related to this employee addition. I mean, that has also led to sort of the expansion in the opex ratios. Now if you can help, I mean, that how has been this breakup of employee addition towards the sales and collections? And also if, I mean, this is what sort of led to kind of jump in opex? Now how do you see the ROE trajectory improving? Because I mean in terms of credit cost, yes, I mean, we are expecting some bit of improvement in the second half, but I mean for the full year, it is somewhere toward the upper end of guidance. Now OpEx goin g towards slightly higher end. And also, I mean, you're borrowing just because of function of your growth will be higher, so how do you see that ROE playing out?
Yes. And if you can just help that, okay, how much of this kind of 7,000 employee addition you have done towards collection side?
LIC Housing Finance Limited
A couple of questions. First one, if you can just provide some color on that ARC sale, what was the gross exposure? What was the net and, of course, cash calculation is given? So that's question number one. Second question around growth once again and not just for the quarter, more sort of a structural. If we see like post-COVID last nearly 4-odd years, the growth in particularly the prime housing loan. Even in salaried class have been reasonably good for the industry, be it banks and others. And even from the developer perspective, developers, the project launches and all particularly had consolidated the top category developer where typically you see your potential customer base, the Cat-A developer, they have also been in kind of an expansion spree in the last 3 4 years. Even in this backdrop, if we go back and look at the growth, the growth has been kind of a challenge. So the question here is that, okay, is it something to do with structurally you are facing issue due to size? Or is it due to competition? Because even if I come to competition, your yields in most of these segments are highly competitive, even very, very close with some of the banks. So a bit if you can provide some color on the structural and direction of growth because I mean, it seems that there is something beyond this typical competition or interest rate that's playing out? These are 2 questions.
Just a small follow-up now again on this affordable piece given, as you rightly said, INR3 lakh crore kind of a loan book and is affordable that ticket sizes are small. They are very, very kind of opex-intensive feet on the street model as opposed to, I mean, typically what so far you have been doing more into Prime segment. So now, I mean, is this kind of a directional change worth it? Particularly, yes, there could be some marginal delta in margins, but even that will be fairly limited because you are sitting on a INR3 lakh crore loan book. And in affordable, if you see today, the biggest player would be total they're sitting with a INR20,000 crore loan book at once. So now you will take time to go there. And in this process, you will have this increased operational intensity and cost and all. So is this kind of a shift in direction worth it, particularly, I mean, in the backdrop that when the Prime, there are not many. I mean, banks are there, but there is definitely a kind of a vacancy created by 1 HFC merging with a bank. So is this your venture into affordable worth it the pain that will kind of move the needle much, whether in the margin profitability or in the growth?
So broadly three broad questions. One, if you can help if I look at your yield for the half year -- first half of this year versus last year, the yield on your asset has gone down substantially almost like 27 -odd basis points. In a market environment where I mean the comp etition has been increasing rates even on the pure home loan because the rates are going up. And if I try to look at your asset mix change, that also is not substantial. I mean, just 1 percentage point move in the developer loan going lower, 1 percentage that also does not explain this kind of a move. So competitive environment also is not kind of that aggressive on the rate side, your asset mix largely stable, just 1 percentage by move here from housing to developers. And this yield is down 27 basis points so where this yield is going to sort of stabilize particularly when the rate cut cycle starts, I mean, next year? So that's question number one. Second would be now on the PCR, if I look at Stage 1 and 2, your provision coverage is dramatically down on Stage 1 and 2, I'm talking year-on-year. So what is sort of they're changing in your ECL model that is leading you to reduce, particularly if I look at Stage 2, almost PCR is going down probably from 7 percentage last year to like 4%. So what is kind of driving this PCR reduction in Stage 2? And lastly, the third question is on your disbursement in developer finance. So last year, of course, you have been very guarded and that is reflecting in how developer finance in your asset mix has come down. But now when I mean, there are some signals that property market probably would be kind of going to slow and all, but you have chosen to accelerate in the developer financing. So what explains this strategy change? And if you can help us understand what kind of risk mitigation measure or selective filter you're applying when you are kind of accelerating now in this developer finance?
Star Health and Allied Insurance Company Limited
The first question is with regards to data keeping. If we look at this impact on GWP from "1/ N " that's close to Rs. 300 odd crore or like say 8% decline in the quarter. If I do sort of a very crude simple math assuming that the average tenure of the long-term policy to be 3 years, is it correct to assume that nearly close to 12% of your entire GWP in this quarter was kind of, impacted by this "1/N " accounting? Broadly, is 12% a figure for 1/N? So, that's question one. Secondly, and this is more from a very fundamental and directional perspective, you have been taking actions in terms of pricing or whatever you can do with your network hospital. Yet the claims ratio remains way beyond the comfort zone for a model as a standalone health insurer. I mean, you would like it to at least go below say 67 odd percent. Currently, you are running at 70 plus for the 9 months. The question is how long do you see your action and the market reality is going to take before we are anywhere closer to the desirable sort of a range in terms of claims ratio? I mean, expense and all are sorted, so, there is not much I think that you can do there. It becomes imperative to do whatever you can on the claim side and there, of course, despite your actions, things are not kind of improving the way you would like to. What kind of a timeline would you see before these things start to play out and the numbers looks somewhere where you could be comfortable relatively?
Just as a follow-up, if it was 9%, then the impact, I mean, because of "1/N" that is coming close to 7-8%. I mean, if it was 9%, then typically you will account nearly, say, assuming that it took 2-3 years, so, 3-odd percent you will account, so, impact should have been lesser, because the impact appears to be close to 8% of your premium. That's why I sort of asked that, if it is higher.
My first question is around your experience so far in the medium term, the doubling of premium and tripling of profit. The doubling of premium is something you are on track probably with what is happening so far . On claim side, the question here is that you have done whatever you could, I mean, you took price hikes across portfolio last year, you have been increasing your agreed hospital network, your fraud detection systems are helping you control cost. You have been taking all the measures, but the outcome is going in the other direction probably because I mean in the post-COVID world there is perhaps a big behavioral shift, one, from the hospitals in terms of the persistent price hikes, that one expected that okay post-COVID would normalize, so that is continuing. Second from the population insured pool, probably the behavioral change in terms of seeking hospitalization even for something that can be taken care at home or OPD but there again you cannot control because that creates controversy and if you say that, okay, this particular malaria case was not to be hospitalized. Now on these two things, I mean, you do not have a control on your hospitals inflation, you do not have a control on this big behavioral shift that is perhaps leading to rising in claims frequency. You have one choice which is price hike, but price hike is so far, not being able to overcome that. Now, what are the triggers, that will make you feel that you can still be on the right track because, you have very limited levers available, so I mean the tripling of profit over the medium term, if there is so much of uncertainty in the near term, how it's going to play out? That's one. My second question, if you can just help me with what's going to be the impact of some accounting changes regarding long-term policy, what kind of a policy gets affected and what could be the impact on growth?
What's your share of this long term premium currently?
ICICI Prudential Life Insurance Company Limited
So, couple of questions. The first one, again, regarding the products composition and margin, I do understand, I mean the buoyant equity market or demand, but I mean, do you have any sort of a product mix in mind, I mean, given that last year this non-linked product has already seen a kind of a retake from the high base of FY2023 and yet it continues to decline in the mix and given the cost structure of the ULIP is not really the profitable one and that is why the margin continues to sort of go down. And if my understanding, of course, you choose not to disclose, but typically, having an idea about composition of non -linked in par and non-par also gives us idea around margin, that is where again if I see correctly, it looks like that the non -par side has rather again slowed down sharply versus par and that all contributing to this margin. So, if you can just help us understand the product strategy and if you can just sort of provide some colour between this, that par, non-par and also the idea on the kind o f a group fund business, why to do it particularly it is coming at a such a wafer-thin margin at least it appears? That's one. The second part is around product. So, you launch this 100% kind of zero surrender value product even before this new regulation came. So, how has been the experience so far and has there been kind of again related to that, any changes in assumption or something that has led to kind of a margin resetting this quarter? I'm asking this question in the backdrop of what had happened las t year quarter because you had to kind of adjust certain assumptions that led to margin drop. So, these are my two questions.
And there is no operating assumption changes or anything that had up, I mean it is just a product mix, no assumption changes that is kind of having any bearing on margins?
SBI Life Insurance Company Limited
Thanks for the opportunity. Good set of numbers, particularly considering the backdrop. A few questions. The first one w ould be more that now, I mean, of course, we have crossed the 9 month. So there should be more clarity around what's happening with your main channel bank SBI Bank and also how agency is performing. And also the impact of surrender regulation of course it is known in reported numbers. So if you can just sort of provide your guidance regarding growth and margin for the full year FY '25. And related to that, if you can just try to quantify if at all, there was some impact fr om this product filing under new surrender regulations. That's the question number one. Second would be agency, of course, the addition and deletion are kind of a pretty regular, but if I see particularly this quarter, somehow agency deletion seems to have picked up, I mean, nearly 50,000-odd. So addition is like a 25,000 per quarter that has been happening for the last 3 quarters. But deletion has certainly picked up in Q3. So what is going on there with the agency? If you can just sort of provide more color. And lastly one more, protection side again I see that individual protection, the decline had kind of nearly arrested more or less quarter has been flat Y-o-Y basis. And if we understand the pickup with the product like the Smart Shield Premier and that of product targeted bank customer is good. But I think the premium growth for individual protection is not kind of still coming into positive. If you can just help understand if there is a significant change in regular protection vis-a-vis a return of premium product on a year-on-year basis?
And if you can just sort of provide so me color on any impact from this surrender regulation changes on the margin? Because I mean in the margin w alk, of course, I mean, that part might be included somewhere in the operating assumption changes or something. So if you can just help understand if there was any impact on the surrender regulation changes.
Two questions. First one, broadly on the growth outlook, we heard you outlining your priorities. Now, if we see the reality, I mean, even the first half, 15% retail AP E growth has broadly come, the challenges were partly also on the group side and even retail within your bank SBI. And you sort of suggested some kind of a strategic shift you are doing within that channel. Now in this backdrop, I mean, the reality of what is happening in the group saving markets or the pricing pressure on GTI, that’s all affecting, credit life depending upon off take of loans, entirely affecting the group business. And on the retail side, what you are sort of doing within banks . So, now, how do you see the growth panning out and also, we have this new surrender that led to some bit of disruption and also, we are getting festive months. So, a lot of externalities as well. How do you see sort of a growth panning out in H2? And within bank, I mean, how will it take this transition and how long this phase will last? I mean, when can we expect sort of a growth to ramp up within banks also? So, a broader sort of your commentary on growth. And second, again, related to the margin, now ULIP, of course, has grown, and thankfully for you also, non -PAR has grown, and that is where the margin has come relatively better. But again, the credit life has been slower, probably group term insurance pricing seeing some pressure, and now you have this surrender regulation. So, how do you sort of, in this backdrop, with changing sort of your product distribution mix and growth trajectory, how do you see that margin to be playing out? So, these are my two questions, thank you.
Poonawalla Fincorp Limited
So, the first question would be from where I left last quarter, I asked Arvind about the provision buffer that was created last year and of course, I mean, we got answer from your other colleagues. So, nearly ₹700-odd crores of our provision on this STPL that you have created and then last year, when Poonawalla has received money from that housing book divestment about ₹1,200- odd crores of that prudential buffer was created. So , what has happened to that? Where is that buffer utilization today? Because with that kind of a buffer and again, this kind provisioning to be done, this raises the sort of very serious quality over the kind of a book that was underwritten over the last 12- 18 months and in terms of what your confidence as far as provisioning on the entire book is concerned, that book is almost that you have inherited. How comfortable are you in the kind of asset quality and will this provisioning be sufficient for that? So , my question is two-fold, okay, of course, your confidence going forward in the existing book and the updates on what happened to that buffer that was created, how will you utilize what and where it is now? That's for the first. Second one would be more on, of course, as you sort of rightly highlighted the team that you have now hired to build a franchise for the future next many years. The question is, how are you finding at the ground, branch and all levels of how they are responding to this entire change in style, change in the top management. For the top management, sort of how you see that the longevity within the organization because, this kind of a transformation at times could be very frustrating because results take time and your incentive sometimes linked to share price, again, that will again take time before your share price start to reflect this. So, somehow the team also start to get frustrated. So, how sort of do you see this transition playing out? And how confident that okay this team is going to stay?
Okay. So, you said that you are carrying a ₹200 crores provision from last year?
Max Financial Services Limited
So, growth has impressed in the first half. And the growth is coming across channels and to be fair even product-wise growth is quite good. Now when you move to H2 , there are kind of a couple of external factors that we get including your surrender regulation changes probably maybe limited, but some disruption on the product side and also some negotiation on the payouts. Additionally, the month of October is a very festive kind of a month where you have the Dasara, Diwali led disruption. So, how are you seeing the growth trend so far? And what sort of expectation will you have that, I mean, in this background? What kind of a growth I mean that you can deliver in terms of the APE in H2 or rather for the FY '25?
One question. Given the way you do account cost for the quarter, your margin trajectory has increased by kind of stepping up over the quarters and eventually the full year margin is far higher and different than Q1 that has been the trend. Now I mean in a few recent years, it was also an ou tcome that I mean like in FY23, you had very, very strong non-PAR saving, in FY22 the growth was slightly weaker. Now, this year, I mean given that the growth trajectory is very strong, the product mix is not so favorable so far, and also in H2, the implementation of the new products in this sort of a new surrender regulation regime . So, how do you see margin trajectory sort of progressing this year, I mean your high growth led by some not so profitable product and in the second half that newer product getting introduced, so how confident are you sort of the margin trajectory panning out over the year?
Just a small kind of related on that. This 30th September is in a way kind of a hard deadline by the regulator to sort of sell the existing product, but you can introduce new product even prior to that. So, how sort of are you planning to launch the product, I mean, the new product is going to be launched only from 1st October or you will start phase wise introduction of the new regime product, or even that?
Mahindra & Mahindra Financial Services Limited
Good evening. A couple of questions. The first one, if I see your geographical breakout or the Kolkata region it seems is kind of slowing down in terms of AUM and disbursements. So is it just the impact of whatever happened in Mizoram and that leading to -- or are you seeing some challenges into kind of a wider geography including West Bengal? So that's in the first. And second, I mean, you had I guess a month -or-so earlier filed around your co - lending arrangement with SBI. So if you can just throw some color on that, the co - lending arrangement, the idea any sort of medium-term target there? And what do you expect to achieve from that?
Any sort of target there say over the next 1, 2 years not in quarters?