Bajaj Finserv Limited analyst Q&A

Thank you very much. We will now begin the question -and-answer session. Anyone who wishes to ask the question may press * and 1 on their handset telephone if you wish to remove yourself from question que you may press * and 2 . Participants are requested to used handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question que assemble. We will take our first question from the line of Avinash Singh from Emkay Global. Please go ahead.

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.

I will request Tapan to take the first one on retention please.

Thank you Raman. So, I think in your question lies the answer. You mentioned that with the CBR rules changing and you also mentioned our strong capital and strong solvency which we have. So, I think that is where the answer lies. Strong capital or strong solvency . It doesn't really matter, if the CBR rule changes none of the fact gets more difficult, we have enough to be able to retain also and we have enough writing competence and which we have demonstrated over so many years to write good risk. On retention if it makes sense, then it's good to retain. If you look at the overall results, I think it is perfectly fine as of now , the balance is pretty good in terms of what we retain, but as you rightfully said, if there is a shortage of capacity because of strong capital base, Bajaj Allianz will still continue doing good and will be able to handle this very well.

Avinash, I will just add to that. On our retention, if you see in the past, it has been on the lower side vis-à-vis the others in the market because of the bulky businesses we've been writing, especially in the last two years, we've written a lot of crop and government health. That is one reason. The second is we write a lot of commercial business also and there you see that the growth we've been registering on commercial lines, which are some of the large risks. There also, because of the risk being very large, our retentions are on the lower side. That's one reason you see some anomaly vis-à-vis others in the market.

Avinash, just to add to what Raman and Tapan said, basically the aggregate retention for a composite insurance Company is just a summation of the parts. We have multiple lines of business, the product mix changes, and we have always been strong in the larger corporate and the commercial lines. Therefore, line -by-line if you see I don't think our retention is lower at any time, but the mix of multiple businesses, some with lower higher retention will eventually determine what the net retained premium is. We will move to Tarun for the product mix and the margins question.

Yes. Thanks, Raman. Avinash, you're right. Regulatory changes are largely behind us. In terms of product mix, you'll see more in line with what you saw in Q4 with a higher growth in protection. As far as group protection is concerned, we believe we are all waiting and watching how the interest rate change impact happens and whether we have higher growth in lending, and that is what is going to decide how credit life really grows and that will impact the industry equally. We are now well positioned because we are well diversified, not just dependent as we used to be a couple of years back in any one segment. So, that should help us. In terms of VNB margin project trajectory, we believe that's a good point. You saw the change expansion already in Q4. Beyond what you heard Raman talked about, we have also taken significant calls on cost structures, looking at more productive investments, removing wastage, inefficiency and in some places significant cost cuts. This is helping us leverage to an extent. You saw that operating leverage show up in Q4. We expect VNB margin trajectory to be far steeper and hence a high growth in VNB margin versus what you would see in the revenue side. I hope that answers your question.

I will just add to what Tarun said, Avinash. While one is obviously structurally doing more term & more group, which is margin positive on an aggregate basis, but we are confident from BFS level that the actions that BALIC has taken, also structurally improved the margins of the other lines of business. Therefore, that may fully play out only in FY'27, but you should start seeing the benefits by second half of next year. So, with more than margins, we continue to concentrate on improvement in VNB and the growth in VNB being better than the growth in the rated premium.

Thank you. Thank you.

Thank you. We will take our next question from the line of Swarna bh Mukherjee from B &K Securities. Please go ahead.

Hi, sir. Thank you for the opportunity. For BAGIC, I just wanted to understand the combined ratio outcome. I just wanted to understand the combined ratio outcome because the loss ratio while it has been benign, can see that motor, TP and fire loss ratios are lower. So, if you could g ive some comments on that ? And on the expense side, again, there has been quite a n increase. So is this primarily coming due to the fact that most of the growth this quarter has come from the broker segment and correspondingly outgo has been higher. So, if you could just break down that, that would be very helpful for BAGIC? On BALIC, first of all, Congrats on the outcome , I think very strong numbers which you have reported compared to what we are reporting historically. wanted to understand that right now how much of cost overrun is baked into the margin like if we were to absorb later on, what could be the possibility , if you could give some color on the structural nature of the margin for our product mix? And secondly, if you could call out the reasons for the operating variance and assumption changes in the EV Walk. And then just a small question on Bajaj Health. There is a segment mentioned international where I think a lot of large shares of claims are coming. Just wanted to understand our nature of offerings here , who will be the customers if you could give some color and whether the claims outcome is unfavorable?

So, we will start with BAGIC first, I will just try to answer that and hand over to Tapan or Anckur thereafter. I think what's relevant and what I mentioned earlier also, if you look at the underwriting loss for the quarter it is very very low at only about Rs.3 crores, almost close to zero. So, what you're seeing as elevated combined ratio is actually an outcome of GWP not being there in the quarter because of the 1/N regulations and the anomaly in the crop and government health distribution of premium during the year. So, I think that's causing a stress on the expense ratio for the quarter because that's the way the combined ratio is calculated. But I think when you see the underwriting loss, it's a Rs.3 crores. That I thought I will just highlight that before I hand over to Tapan or Anckur.

I think you have covered it very well.

Just a follow up in terms of commissions, etc., there is nothing very incremental even due to the channel mix change?

No. So, I think what has changed and what I highlighted earlier also was that the growth on motor and retail health has been on the higher side for the quarter and there obviously on new sales , the commissions are on the high side. So, the mix of new has moved up and that's where the commission is looking high. So, it's only a mix variant, there's no incremental payouts which we are doing. This should get normalized when you look at the whole year numbers.

And the overall EOM is well below the regulatory allowance. So BAGIC has the leverage subject to market conditions and the businesses they want to pursue and if things are improving, I think they have the levers available to them to go back into growth into the preferred segments. Okay. We will move to BALIC, Tarun or Vipin?

So, I think the first question on overrun. So, all the overruns are accounted when we report our VNB margin. So, I didn't understand the question, but all that we in cur, even if there are overruns, all of them are accounted for and they're reflected in our VNB margin. In terms of operating variance, there were fewer new segments that we started writing a year and a half back and some of them have produced a little lower persistency than what we had generally experienced while they are still profitable to similar other products, these are new segments that we have been testing. And on ULIP side also beyond 61st month, we have seen some surrenders and all of that coming , maybe that's because of market upside. I think those are the reasons . Purely on mortality, if that was your intent, on the mortality side our experience is in line with expectations. So, there are no variances there.

Okay. Understood. If you could highlight on the international business?

On international side, if you see our stated strategy in India is to have lot of volume, and we handle considerable volume, and our aim will be to convert that transaction volume into capabilities which we can probably offer to international insurers. In that direction, we already have two customers internationally. As we speak, in last quarter, we have serviced those two insurers. Our focus just now is less on business development but more to harden our capabilities which can be utilized by international insurers. We do fair bit of transactions there. But because in international markets, OPD is 70% of total value disbursed by insurers and we have obviously over a period of the last six years created lot of capability around OPD. That's why the number of transactions is very high internationally. But we are just scratching the surface . As it is widely known while India is 16% of global population, India is less than 1% of healthcare spend of the world. Now, while these statistics are very colorful, we are very optimistic given that we process a lot of volumes in India , o ur competency set in technology in AI would create a proposition for international market as we continue to create this capability and service our customers , we will be able to actualize the benefit of these revenue streams. I hope I have explained what you are looking at unless you have any clarification on this.

Yes, sir. Just one small query was that, in terms of profitability, if I had to think about the domestic versus the international piece, how will it stand?

So, in terms of profitability, obviously, international is significantly higher, but actually it's not a very apple-to-apple comparison. The investment in creating capabilities is completely absorbed by domestic business. So, it's not an apple-to-apple comparable. It's like international business for us is actually cream part of the overall business architecture and profitability in longer term also will always remain higher in international business. All of us know that India is a very extremely cost conscious as well as competitive market. So going forward also we believe that international will be significantly higher on profitability. But the market size there is tremendous. So, it's not that we are pricing ourselves too high. It's just that those markets have the ability to pay more. The key for us is how do we create capabilities on what we internally call as sandbox in India, and how we are able to convert that into capability which can be sold internationally. Profitability will always remain higher internationally.

I think just to add what Devang said, the 2.8 million claims that we serviced, it's a fairly sizable number, that kind of volumes you never get internationally in some of the countries. Therefore, this is the bread-and-butter of our business that is the one which helps us as it grows, we will continue to invest in capability and we want to make a gold standard product in terms of technology service, in terms of integration, digital, AI, all of them linked together with the data science built in for handling abuse management and various other things in terms of understanding the medical field better and better as we do more transactions. I think it's a very long-term business. Over the next 15 - 20 years, we believe this is going to be a very large play in India . Today, we have a lot of fintech’s, some hospitals, there are insurance companies, there are people and all of them doing bits and pieces of these. But as we see the next 15-years, we see the size of the opportunity being very large. And once we build the capabilities over the next few years, we think we should probably be in a better position than many others because we have the brand to match it up as well.

Understood, sir. Thank you so much for the detailed answer. Thank you and all the best.

Thank you. We will take our next question from the line of Madhukar Lad ha from Nuvama Wealth Management. Please go ahead.

Hi, good afternoon, everyone. Just had a couple of questions. First, on BALIC, the margin improvement has been very good. Congratulations on that. But in terms of growth, I see that growth is slowing down, which is as per what we had discussed earlier as well . But moving on into FY26- 27, how do you see AP E growth and VNB growth panning out , some sort of sense over there will help us. Second, on the operating variance and assumption change, I understand all of this is related to persistency or is there any other element of mortality or expenses also? So those are my questions on BALIC. On BAGIC, the underwriting performance has been quite good this year. However, if we look at GWP growth, it's a little bit slower. I am guessing losing out on market share in a few segments. Any comments around how do you look at that? I sense the growth in motor also has been a little lower than the industry. So, some color around market shares would be helpful. Thanks.

Yeah, to start off. I think the VNB margin I know this is the second time we're getting this response from these questions. Ye s, the VNB margin is looking good and honestly that was to be expected. We've been saying this as a guidance in our last two calls that we will be making a significant strategic shift, which we did make and we have ensured that our VNB margin is now moving up in the direction, but as Sreeni said, while we look at margins, there is a lot of noise in the margins from the group business, hence the VNB is what we will be focusing and talking about more. In terms of growth, BALIC has been, in the last five years, the fastest growing Company in the country; we've had a C AGR of 30%. And we consciously took a pause , when the entire sector just changed the traditional plans only, we relooked at every plan that we had ; ULIPs, Tulip which is a term ULIPs that we have nowadays and traditional plans as well and we looked at redesigning, restructuring our products entirely. So, while. 50% of the products change d in the market, we changed 100% of our products. This was to result and I think it was a call which on hindsight has gone correct because we did foresee that with so much of surrender value changes happening and 50% of the products changing, 3 million advisors, all bancassurance branches, having to undergo training, there will be a slowdown in the sector for the second half, which is exactly the way it panned out, hence we timely chose this time to plan more on a far more significant one-time structural change, which we've done. Now, that change, on anything that we had to do on margins, is behind us. Now, we have to work on frugality, ensuring that we are cost -efficient and that will ensure that the direction of V NB margins remain high. So, your second part of the first question is on, will the margins be growing, or will the top line be growing? As far as the top line is concerned , if I just get into a little bit more detail , the bancassurance business has picked up from where it left, and the transition has been a lot smoother. Proprietary sales have signaled a little bit more time, because we changed all the ULIP plans as well, which nobody else changed. And that was a significant part of the product mix, which has of course resulted in them going a little slower, although it remains still the fastest growing business for us. The agency side has required to have a lot more discussions with advisors because we changed the compensation and that I think will be taking a little bit more time to settle in. So , the growth we expect, which has been muted for particularly agency, shall remain slightly muted even in Q1. But having said that, for us, it is unique because we were one of the fastest growing in last year, and H1 as well; we grew by 31% and while our peer set was far, far lower. So that high base effect will also come in. So, we will have to look at it and put in perspective from that. And as Sreeni mentioned, H2 onwards you'll see growth for top line also starting to come up significantly. But you should expect overall for us a higher growth in VNB in this coming year, and I think that's the message I would like to leave you with. Your second question is on variances. Although very clearly Vipin has touched on it, but just to mention because you were specific, there is no impact of mortality or expenses on these variances.

Okay, great. Thank you for the detailed answer. And on BAGIC?

Yes, on BAGIC, if you look at the overall numbers, we were a bit surprised on your comment that we have lost market share. If we look at the year’s numbers and Raman explained the ‘1/N’ impact, that is why this is, and we have a disproportionate higher share of the market of long-term business. So, I think that is what gives you this perception. IRDAI publish segment wise numbers. If you look at it then I think, be it commercial lines, be it motor, be it retail health, be it government health, the only two lines of business where our share would be lower than the market ; one would be crop insurance which we had mentioned earlier that if you look at this time in crop and I remember a couple of years back, everybody was shying away from crop and to the question we were answering is that crop business, we understand and we do it and we will continue doing it and then when people saw that we did it well, everybody is into the crop business currently and obviously when we see lot of intensity in some business and pricing is not what we feel is appropriate. There we go slow a bit. So, crop insurance I think we would have a lower market share, and, in miscellaneous, it is because the cattle business we have gone slow because lending has gone slow not because we have slow intensity with lending on that business . Barring, these two, I think we would have been ahead of market in all lines of business. So, that is where the actual question is. Anckur or Raman, do you want to add anything?

Maybe I can just talk about it; I think one thing which is playing out is the proportion of long-term business for us versus the market has been on the higher side. So, on an average the long-term business which is impacted by the 1/N regulation for us was 7% of our GWP , for the market it has been 3%. That's why the numbers look a little odd, but Madhukar like Tapan highlighted, if you look at the full year numbers, the growth on GWP has been about 5% both for us and the industry. If I exclude the impact of government health and crop, we have grown at about 8%, industry is growing at about 7%, we've grown 1% higher. If I actually negate the impact of ‘1/N’, we have grown at about 12% and the industry has grown at 9%. Now if I break that further into retail segments, which is what you were referring to , on motor, in fact our growth has been in line with the industry ; industry has grown at 7.9%, we've grown higher at about 8.5%, on retail health industry has grown at 8%, we've grown at about 13% , commercial lines, which is a summation of fire, marine, liabilities, all of that put together - industry i s flattish ; i t's grown only 1% , we've grown at 8 .5%. So, what Tapan highlighted actually, the stress is looking only from the 1/N part and also the loss of some business on crop which we mentioned earlier, we will do that business only if it makes commercial sense and we know most of the people are doing it only to get arbitrage on EOM today. So, to answer your question, I think from a top line perspective, we've outperformed the market almost in all segments this year.

Ok Understood Thanks a lot

Thank you. We will take our next question from the line of Manish Dhariwal from Fiducia Capital Advisors. Please go ahead.

Good afternoon. Am I audible? Yes, please go ahead. Thank you for this opportunity. So my question was at two levels. One, the group has taken this decision of buying the 100% of the two insurance businesses and now your approvals and all , the thing has sunk in , earlier, it was going to happen sometime, now it's happened , now you ensured the execution part is happening , I want ed to understand over a period of, say, about three or four or five years, it's a long term question , how would the flavor of these two businesses undergo a change like you did mention about some international forays, which I am sure earlier there may be some restrictions, Allianz being a partner, already being a global player, so if you could just give us some long -term perspective on both the insurance businesses that you run?

Sure, I think when we look at the opportunity spectrum in both the insurance businesses, it is very large, while both the businesses continue to remain very competitive, and we expect more competition to come in the future . In the long run, it is a game of balance sheet size, capital and brand. We have already done the hard work over 20-years and if you see most of the people who are coming in recently are finding it more difficult because of the level of competitive intensity to get to the minimum scale that is required for a viable insurance business. As far as the decision of Allianz to exit is concerned, it is a decision of Allianz to exit, and we have executed the SPA and it does give us the opportunity now to use the Bajaj brand and the capabilities that we have at the Bajaj Group to play the opportunity spectrum in insurance business. Clearly , in a joint venture, there are always restrictions, there are shareholding patterns and there are difficulties in dilution , there may be difficulties in various acts, strategic initiatives that you may want to take , if it is not viable for both the shareholders to go ahead with that. We think there are three or four things that we mentioned. The first is, we now have 100%, a lot more leeway to look at strategic opportunitie s which may involve dilution, maybe we can look at other business initiatives including for example in the GIFT City, we can look at the pension business , potentially, we can look at international foray as well because this is a sign of a very large amount being put up as domestic capital and we have fair confidence that this capital will yield the shareholders a very good return over the years to come. So, there are many levers that will play out and we are not short -term players, and we are a more than 100-year-old group and therefore we have the patience and resilience to be able to play it with the aid of the surplus capital and the power of the brand that we have or we lacked a little bit in flexibility we get that as well now.

Yes. Yes. Thank you. Thank you. And some bit of favor on the health business, the way like the number of transactions is increasing, Vidal acquisition happened, so steps are happening, like more and more hospitals and the footprints expanding, when are you seeing this to emerge a meaningful business say three years, four years, five years where the numbers actually make an impact on the balance sheet?

Yes. Let me take that first before I pass it on to Devang. As I said earlier, we believe healthcare services, the entire spectrum of healthcare from tooth -to-tail is going to be a significant industry in India. We have a significant proportion of the population which requires government schemes to be able to support healthcare. We also see that the insured population is much smaller because of the higher price and the fact that insurance today covers only hospitalization and there is a missi ng middle, and all of these are continuing to grow. Therefore, we believe there's a long-term opportunity. We already have made the most difficult part of building the network for the OPD services. It is easier said than done because it's a significant amount of effort capital and time and then you have to build a model out of it, with the TPA, with our insurance Company in BAGIC and the OPD capability and the initial foray into international business that we already have, we believe we have all the tools available now, but we need the volumes to be able to further sharpen our capabilities. So, we are very confident as BFS . The value may /may not come from the traditional way of measuring profits in terms of profit and equity, but in the long run value will emerge because of the size of the opportunity and how long we remain invested in the business and our intention is to be remaining invested in the business.

I think your question was about relevant for numbers . Of course, we are very proud to have very large companies in the group which contribute a substantial portion of consolidated revenue. See, our view as a group about health businesses, health remains one of the largest spend item for Indian consumers and it will only grow further in percentage spend of Indian households in coming years , point #1. Point #2, health has right for disruption in our view with injection of new technologies specifically AI, because there are certain nuances of health business which are very suitable for usage of AI. Globally, health thrives on unstructured data because every patient is different. And third point is, India has tremendous population and hence in technology word if I say humongous training data. This can be put to use to service Indian consumers and also to monetize those capabilities globally, but it has longer gestations , so number relevance is a matter of spreadsheet work. W hat we are focused on is that we add value to Indian ecosystem and take those capabilities globally to add value to some of our international customers. So , it's a longer journey, but as a group, in my view we are extremely suitable because we are long-term players in anything we do to solve this problem over a period. So, it's a very contextual question. An answer would require a lot of spreadsheets, and we are not focused on that relevance on spreadsheet.

Thank you. Thank you. That helps.

Thank you. Ladies and Gentlemen before we take the next question would request participants to keep their questions brief as we have other participants waiting for their turn. We will take the next question from the line of Umang Shah from Banyan Tree Advisors. Please go ahead.

Thank you. Sir, just one question on BALIC. How much of our AP E would be coming from the largest banca partner that we work with?

So, the largest one contributes to about 22% of our business.

Sure, sure. And sir, with that player now looking to acquire an insurance Company that we compete with, would you be looking to reduce your presence there or would that business be coming at a lower profit than other channels?

See, we we're talking of Axis very clearly here, right? The player has had an investment already and they were declared promoters of that Company, which was the intent I guess from them for a long time. And they were very clear when they added us as a partner that they would be going ahead and adding a lot many partners in the bank itself for life insurance. And despite the fact that they already have their own Company, we are still maintaining 25% plus/minus 1% here and there of the market share in the bank. And as far as margins are concerned, we don't talk about margins individually for players. These are bilateral transactions.

Sure, sir. Thank you so much.

Thank you. We will take our next question from the line of Sanket h Godha from Aven dus Spark. Please go ahead.

Yes. Thank you for the opportunity. Sir, I have two, three questions on BAGIC first, Sir, if we look at our tender-based business, is almost 25% of our total GWP. See, honestly, the predictability of the growth of this particular number looks very difficult for us to estimate. S ir, I just wanted to understand how confident you are which is 25% of your business will repeat again next year and suppose if you don't win then you have a game plan probably to substitute that business with some other line of business. Just want to understand the thought process and the continuity on growth given tender-based business is 25% of our total GWP. That's one thing . And second is on reinsurance acceptance because the rates are little better, so there are couple of insurance companies which have already alluded that, they might be little aggressive with respect to accepting as a reinsurance business which could help in GWP growth. So, do you have any thoughts on those lines of the business? And lastly on data keeping on BAGIC, can you give two, three figures advanced premium number, duration of our bonds and yield-to-maturity on the bonds? Yes, that’s from BAGIC

Let’s look at when we talk of bulky business, tender business, whether it comes, doesn't come. You understand the nature of the insurance business, it comprises of two, three parts and it is an inherent part of business; one is retail, second would be tender based. Tender-based is not only in terms of when you talk of government or you talk of crop, it's also there in commercial lines of businesses. A lot of large risks also are tender based in the Indian market. And if you look at the segmentation, the tender-based business in the total industry portfolio would also be close to about , if I am not wrong about 30% or so or more , 30%, 35%. Now, if you're a Company with among the largest number of customers in India, if you are a Company which is top three including government companies in India in terms of top line, if you're a Company which is among the best in India, you will reflect what the market is. If the tender business is close to about 30% - 35% business and you have 25% tender- based business I think it’s perfectly fine. Because you can't be a large Company and say that I will not have t ender-based business at all. Now the second part of the question is that how will it play out? Now, we have been doing it for so many years. I don't think that something is new, some tenders we win, some tenders, we lose, its inherent part of business. Sometimes if we lose lot of tenders then for that part of business market share may drop for some time, like we did in crop this time and we found the tenders being very aggressive in terms of the pricing, which was about 30 %, 40% lower, we reduced our presence . We never exit any business and we are always there, we are still on a leading crop insurance even today and we will be there and we will keep on participating in that. As a large player , you would be present in all lines of businesses , you would be having a substantial market share in all lines of business. And what makes sense in terms of our underwriting principle, that is where we will be disproportionately higher where it does not make sense will be lower in the market and this keeps on changing , it is not like written on stone. It keeps on changing, but this is inherent nature of business. That's something which one does not have to really be surprised about and we look at each line of business separately, each product separately and each we should write well and serve the customers very well. If you look at our grievance ratio and these are publicly available data at IRDAI, we have been among the least grievance ratio in the country for so many like over a decade , every quarter, every time. This is a principle of business . That was your first question. Second question was on BALIC?

I was asking about a couple of companies are doing more reinsurance acceptance compared to what we've been doing in the past.

What people are talking about is not reinsurance acceptance, it was writing commercial lines of the businesses. See , reinsurance companies , make treaties and that is just kind of a plan in way of projecting the balance sheets. There's no question of reacceptance by the companies. Now they will look at commercial lines of businesses. But as R aman mentioned, if we look at last year , industry was growing at about less than 1%, we were doing at 8%, eight times industry growth in commercial lines of business and we have been doing that. So why would we slow down? I think whenever the pricing is right and where we can serve the customers well, we understand the risk, we would have a disproportionate market share there. So, I don't think that any change of stance would happen. Thank you.

Got you. And that data keeping question advanced premium, duration of bonds and YTM?

Advanced premium is closer to Rs.2,500 crores.

And duration of our bonds?

It is around 5.5.

And current YTM?

The realized rate is slightly in excess of 8% it is 8.03%

Okay, Perfect. Thanks. And may be one question on BALIC. See , this strategic shift probably impacted meaningfully the agency channel as you alluded and that's almost till the first half it was more than 40% of our GWP. You are fairly confident that the reset is already done, or it will take some bit of more time and therefore the growth probably in this channel will be little back ended or you believe that in FY26 agency might be a little muted because of the strategic shift what we have done on the BALIC side. So just 1 question and if you can give your contribution of Axis Bank? That's the second one, yes.

I will answer the second one first, Axis is 22% of our business and overall, if you notice that most of our peers their largest bank is upwards of 40% to 50% to 60% as well, and it was a studied strategy that we shall not be dependent on one ban ca partner and I think that's how the ban ca partner also wants it. So, I think that strategy has played out quite well and we'd like to have all businesses to grow at their healthy pace and not be overdependent on one. Coming back to agency, agency is a 1,50,000 agents’ business and we've been looking at changing the product mix for some time and finally we've landed up doing it in the second half of the year. It required a lot of reset and that reset is in place. We are seeing positive green shoots come in, in terms of activity, productivity, which are the usual bits of first indicators, engagement from agents has been reasonably on the upt ick. We added about 57,000 agents last year and we opened 60 offices, largely these offices are used by the agency itself. We are continuing to grow in the way we are hiring more agents. So that is only going to be positive as we go ahead in time. In terms of growth rate, I did mention that we did have significant growth in the first half last year. In fact, even agency in H1, grew by 23%. So that higher base is going to impact I would say mathematically, the expected growth rate from the agency, which is obviously going to be muted in the first half. And in second half, you should see a significant climb back in , again, because mathematically it was ba d for the entire sector , b ut even otherwise my indicators would be more on number of agents getting active, the segment of agents getting active , how many policies are they doing, whether they're consistent or not, all the usual distribution parameters which you look at and they're all in I would say the green shoots are visible and directionally, we are feeling a lot more confident because don't forget agency has been our mainstay all this while and agency shall remain a very strong part of our growth engines.

Perfect. Perfect. That answers my questions. Thanks.

Thank you. Ladies and gentlemen, we will take that as the last question for today . I now hand the call over to Mr. Ajit Kumar from JM Financial for closing comments. Over to you.

Thank you to all the participants for joining the call and special thanks again to the management team of Bajaj Finserv for giving us the opportunity to host the call. Anything else, Sreeni sir, you want to add?

No, nothing else. I think first half we still believe the geopolitical and external environment will continue to be, we need to watch, it can be volatile, but we are very cautiously optimistic about H2 of the coming year when we should come back to growth. So, we are using this opportunity on finAI, in BFL and looking at our OPEX cost in BALIC and the margin profiles restructuring the business on the surrender charges and in the case of BAGIC, we are waiting to continue our calibrated growth with the focus on strong underwriting performance. Platform businesses, we want to see them achieve more scale in terms of number of transactions, both Finserv direct and the health business. The mutual fund can be depending on how the market is. The AUM growth can be a bit volatile, but we believe that we continue to differentiate in terms of each of our funds and we will continue to build on distribution and the systems from here. So, this is largely what we are looking at over the next 12 - months.

Thank you, sir. On behalf of J M Financial Institutional Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.