Max Financial Services Limited analyst Q&A

We will now begin the question-and-answer session. The first question is from the line of Avinash Singh from Emkay Global. Please go ahead.

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?

You raised a very good question and if you go to the Page #12 of our investor release, you will find that we have given Q1 and Q4 numbers for last for four, five years just to give you the confidence that because we come up with true margins, which means we take all the costs for the quarter and because Q1 genera lly is the lowest in terms of sales, generally margins are subdued and they range between 17% to 20%, 21%, that's been the trajectory for the last many years. As every quarter passes because the leverage that we get on the business , and I would like to highlight everybody that our 1st Quarter VNB is 254 crore. If you were to look at our last year's total VNB is 2,000 crore. We are talking about 10% to 12% VNB in Q1 only. Hence I will tend to not read too much into this margin drop because as we go long, the leverage will kick in and the margins will improve. You asked a question about what's going to be the impact of Q2. I think I did mention to you about Q2 numbers. It is going to be an industry thin g though Max Life Insurance will play as we go along. However, I am reasonably confident that with all the efforts that we are putting, the product mix will get rebalanced. And I am not really hinting at any permanent shift or permanent impact on our overall margin delivery capabilities. So, I will just request that you'll remain patient and see how it evolves. I am very confident that it will pick up.

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?

We have a game plan actually. We have multiple products that need to be refiled. I don't know if you know that, but if the product which has been withdrawn on 30th September and the replacement product has not been filed, it will have to go through the approval process from IRDA I, it will no longer be us e and file. So, we are very keen that by 30th of September we complete the entire replacement exercise. As you can understand, being such a mature organization is heck of a task. The surrender guidelines also come with different guidelines about different forms, free look cancellation period being extended, etc., So, we have a phasing approach. We will begin replacing our products somewhere from 15th of August to 30th of September in different tranches. So, that's how we are going to approach it, Avinash ji.

The next question is from the line of Swarnabh Mukherjee from B&K Securities. Please go ahead.

A couple of questions. First, again just focusing on the margin part, I just wanted to understand whether you are still confident of achieving around a 26% kind of a margin guidance which you have provided earlier, because I think you highlighted that growth is fairly strong in Axis in July, but Axis, I think whatever we have seen in the disclosure this time, banca has largely focused on ULIP as a product category? And also wanted to understand how the commission dynamics are playing out in the proprietary channel because there the product mix is much far more balanced despite growth in retail protection we haven't seen that outcome playing out in the market. And thirdly, you have also mentioned the headcount increase in the distribution side. Is this cost going to remain in our P&L going forward? And if then what can be the impact on the margin in the subsequent quarters and hence on the overall guidance, if you could give some more color on? An d secondly, on the Axis Bank part, if you could highlight how our counter shares are trending right now are we still at that range or what is the dynamics you are seeing in the Axis channel in terms of the multiple manufacturers who are now empaneled, what is the situation if you could highlight?

Thank you for the question. Let me take the easier one first, the Axis Bank counter share. Like we mentioned to you, we expect ourselves to remain in the range of 65% to 70%. I am very happy to confirm that we are in that range and we expect to remain in that range. So, as things stand, last month or so. our counter share has been in the range of 68% to 70%, overall for the quarter between 65% to 70%. So, really inclusion of other bank partners on the counter is not really significantly impacted our counter share and I will keep at that level. You may recall that for the year, our forecast was we will hit a VNB number of teens, and I remain confident about it in that number. And I had made that forecast or shared that forecast before the discussion on surrender income guideline. My guidance was for the year, we will outlook anywhere between 25% and 26% margin as against 26.5% last year. And the forecast was we will have teen kind of VNB growth for the year now. Of course, things have changed since then. If there was no surrender income guideline change, I would have perhaps reconfirmed the same guidance and I am pretty confident that we will get there, but we have to navigate the regulatory changes, which is not just a financial change, but also a significant change with respect to administrative effort, which needs to be put in with respect to product filing or change in commission structures, etc., So, we have to see how it goes and hence I will say it will be a bit dynamic, but we are going to work very hard to come as close as possible with respect to the guidance that we gave you.

Just a follow up, just focusing on the 2nd Quarter, if you could comment on the commissions levels, how they are playing out? And also, on the increased distribution and the fact that Axis is growing faster, how can we think about the margin for that?

So, specifically on the commissions and OPEX, so OPEX has grown by 14% as I stated in my opening remarks. And of this, 14%, 8% growth is largely to do with headcount increase plus the wage bill increase that happens on inflationary case. This incremental headcount, where is it getting deployed? A significant portion of this headcount is getting deployed in our own channels, whether to expand the agency channel or to expand the direct selling team plus supporting all the new partners that we have been actually signing up. Now, the new partners are not necessar ily fired to the full potential at this point in time and that will take time. But that investment is required in the distribution side to build that momentum. We have done a fair bit of investment, and I think as the years kind of progress by, there will be a productivity improvement trend that you will start seeing for Max Life. With respect to commission, the first-year commission has increased by around 60% for the 1st Quarter. A large part of this commission increase is actually coming out of two areas . One is because of the superlative performance in the e -commerce channel. We have seen an increase in associated commissions come through and also the new partners in the group credit life segment that we are actually building and making our portfolio more robust on that side as well. So, that's largely the areas where the com missions actually have increased. Otherwise, across other partners, the total cost of acquisition has remained constant. The operating leverage benefit does play out. I think as in the opening remark, as in the first question that was asked, we have an effect where we actually booked the actual OPEX in the quarter and as sales builds up during the quarter, we will definitely see an improving trends on margin.

The next question is from the line of Supratim Datta from Ambit Capital. Please go ahead.

So, I had three questions starting with the first one on Axis Bank, just wanted to understand when you're saying like 19% growth, is it for the first four months or is it only for July? And the improvement in the momentum in July, is it driven by any particular product launch in that counter or any change in effort? That's the first point that I wanted to understand. The second was on the surrender charges, you talked about the impact and the movement towards new products. Just wanted to understand when you're talking about the 100 to 200 basis points, does it take into account the current surrender trends that you're seeing, or does it take into account also that post the new product launches, there could be an increase in surrender, that factor into this 100 to 200 basis points? And thirdly, when I look at your product mix, obviously, there has been an adverse product mix which shift towards ULIP, I completely understand the strategy there. If I compare your 1st Quarter FY25 products mix with 1st Quarter FY23 product mix, it was broadly similar, but the margin is roughly around 350, 360 basis points lower. So, just wanted to understand is this 350, 360 basis points lower margin. is it a function of only the OPEX investments that we have made in the last two years which will deliver productivity gains say over the next 12 to 18 months or is there something else also that is actually here?

I will take the first two questions, and I will request somebody to take the third one. The 19% growth rate on an adjusted sales basis is YTD July for Axis Bank; they grew about 45% in the month of July. So, we saw increased momentum as a result YTD July is 19%, the 8% numbers that we have reported for 1st Quarter has increased to 19%. There is a good surge. Of course, it came at the back of some new product interventions that the open architecture partners did. On the question on surrenders, it's a bit o f a crystal ball gazing whether higher surrender charges will increase surrender or not. I mean we will see how it goes, but intuitively speaking, surrender might increase a little bit if the surrender benefits are improved for the customers. There will be two things that will happen. I think there will be very significant efforts towards validation at the time of sale, ensuring that the customer is going to continue. So, all the players I expect will ramp up their efforts to ensure that people who are buyi ng policies are extremely serious about continuing, #1. And I think the retention efforts or renewal efforts will become significantly high. So, because of that, my sense is that the overall impact will be limited. But just to confirm to you, the 100, 200 basis points delta that I am mentioning does assume some increase in surrenders. So, we have factored that in just to be conservative while giving an estimate. That's the best foot forward and we have to see how it goes, but it does sans lack of increase or say assume that the surrenders remain at the same levels, this guidance will be on the lower side. That's the way I will put it. Amrit, if you could take the third question?

I might not have actually at this point in time exact FY23 to '25, but I can give you some directional answers. Yes, your observation is correct that one part of the answer definitely is the increase in OPEX, that has actually happened over the last two years. But then there are slivers of additional plays also which are happening. So, there is a sliver of the channel and product mix being sold during that quarter and this quarter especially on the unit linked designs, there's a sliver of that as well. And then inherently at that point in time, the annuity contribution largely in the business was coming out of single premium. As we have diversified the overall annuity mix, there is an intrinsic reduction in the margin of the annuity product as well, which comes in play. And as we have been speaking about protection margins, so some bit of a shave off there. So, it's a combination of these 3-4 attributes of the correlation that we are trying to drive. But the large answer stays in OPEX and also the fact that unit linked designs being sold in proprietary versus partnerships.

We will take the next question from the line of Shreya Shivani from CLSA. Please go ahead.

I have two questions. First you just mentioned refiling these products between or pulling these products back between 15th August to 25th September. So, last year 2nd Quarter was already a high base for you. On a total APE basis, it was a 36% YoY growth quarter. So, should we expect some disruption in growth in this quarter going ahead, how are you looking at it, will majority of the growth in the coming quarter be completely driven by ULIPs and protection and PAR and non-PAR will remain very subdued? Second, you've shared a data point on breakup of th e proprietary channel. That eCommerce is now 37% of the mix there and direct is 18%. What was this in last year 1st Quarter?

Of course, I do agree that the base was very high, but we are seeing great sales momentum across all the channels. If you have to go by the data of July, I think I am very happy to share with you that we saw growth across all channels, not just bank channels, so be it agency be it direct, be it eCommerce, be it are the new banks that we have signed, YES Bank, Axis Bank is seeing growth across. So, I am very optimistic about the growth outcomes of Q2. It's very hard for me to tell you exactly where we will land up, but we are going to leverage every potential opportunities to drive growth. With respect to channel mix, last year, of course, we have seen good growth in the eCommerce channel. But Amrit, if you have access to what were the mixes last year do you have?

So, 20% eCommerce within the proprietary sales which she mentioned 37% for this quarter, that number was 20% last year.

Of the 18, how much was direct last year in this quarter?

It does remain at 20% approximately.

On the agency count, you were at 1,02,000 something as of March '24. Have we had any substantial agent addition this quarter or are we focusing more on agent activation of all those who have already been added?

I think generally the focus on agent activation and I at my level focus more on active agents and top performing agents than the total agent count, but the agent headcount at June ’24 end, 1,06,860.

We will take the next question from the line of Madhukar Ladha from Nuvama Wealth Management. Please go ahead.

So, just quickly, first, on your overall growth guidance, so as I understand in the beginning of the year, VNB growth, you're saying mid-teens sort of a number but obviously the surrender values can have some impact on the margins. And from a top line perspective, how are we seeing the year play out? Second, on your EV, can you quantify what is the magnitude of economic variance in Q1 because back -of- the envelope there seems to be another negative variance in this quarter. Could you confirm if that is correct, and if that is the case, then what is really causing that? And thi rd, sort of our calculations indicated that if nothing is done on the new surrender values, the company level margin impact could be in the range of 300 to 400 basis points, but what you're talking about is lesser, right about 100 to 200 basis points. So, I wanted to understand what are you exactly building in 4Q and what the difference can be between my understanding and your understanding?

Always, you ask very sharp questions. So, let me try to answer number one, number two and then number three is going to talk about number. #1, #3, Amrit will give you the EV variance on non-operating. I think the VNB growth was expected to be mid-teens without surrender. So, I stick to that and if we end up being at a low margin, I think we will cover it up with higher sales growth. That's our current position and as every quarter moves, you will see some of that play out. The second thing that I will definitely make is there's only so much that has to be read in Q1 numbers. Like I mentioned to you, this is 12% VNB quarter for us of the total VNB. So, I think the journey is long and we are going to be quite focused on ensuring that the overall margin numbers pick up and we are in the range that we have given as guidance. When surrender guidelines come, you would have picked up from the industry, it will have impacts on the industry with respect to several things changing and just to clarify, it may mean some changes on distribution compensation, not just in terms of volume, but the phasing to ensure that we are protected with respect to lapses and the burden is shared with the distribution partners. It may mean some changes on maturity policyholders returns, it may mean for us to of course refile, add new features, it may mean that overall we look at our expenses with the different light and some of those actions like I mentioned to you are quite non-financial, they touch the business and hence I will say that 100, 200 basis points is the residual thing that I am expecting to be there which is the run rate that we should hit by the end of this year. However, I am reasonably sure that with the series of changes that they're going to make, we will be able to nullify. So, that's our position. With your estimate of 3% to 4% and me saying 1% to 2%, like I mentioned to you, of course there is pieces of work that all the businesses will undertake. Being a life insurance person, I must say these are the changes that will be industry-wide like it happened in 2009 when ULIP regulations change, they will have changes in the industry. And overall, I think the impact at the end of the day when we have made many changes are expected over next one or two quarters to be in the range of 100 to 200 basis points but again, as I mentioned to you, some of these changes are non-financial, they touch the business and making those changes in the business has a lead time and everybody is going to take that lead time. So, I am very optimistic at this point in time that we will be able to nullify with the set of initiatives that we have identified already and nullify the impact over six to 12 months period post the implementation date. On your question on embedded value and the economic impact, Amrit, do you want to take that?

As I mentioned in the opening remark as well that on the non -operating side we have a positive non-operating variance of 276 crore. A predominant portion of this is coming out of equities, but there is a positive on the debt side as well. So, both equities and debt, the non -operating variance is positive and a total of 276 crore. Even on the operating side, even though you didn't ask reiterating that operating side as well, the operating variance is a margin positive number.

We will take the next question from the line of Paresh Jain from Motilal Oswal. Please go ahead.

Firstly, just extending the point on surrender charges, you have the best -in-class persistency especially on the one year, on the 13 -month in terms of number of policies. In spite of that, we have a relatively larger impact as compared to some of the other peers that have mentioned the impact. Just wanted to understand where is this higher magnitude coming from, whether it is our persistency or surrender profit assumptions in our VNB numbers or is it coming from the product mix or is it coming from the IRR that we offer? So, that would be my first question. Second is from a product mix standpoint, how is July being compared to the 1st Quarter, has it been any meaningful difference in terms of non -PAR share again moving higher and ULIP share going lower and in case we sustain the kind of growth momentum that we have seen in the month of July for the other two months as well what kind of VNB margins can we look at in Q2? And my last question is on the mix of partners that we have at Axis Bank today. So, are you seeing similar level of growth across partners because at some point if some of the other players kind of group after there could be some wallet share loss at Axis or is it fair to assume that the focus will still be on growing Axis Bank and maintaining that wallet share between 65% to 70%?

You asked two or three questions. Let me just say, it's very hard for me as you can understand for me to comment on the impact on other people. Of course, being in the industry, I have a view, but it's very hard for me to comment on the impact on other people. My estimate is impacts are more or less similar because the large part of the impact is going to come from the allowance on surrenders in year one, which until now was not there. And if people are in the similar ranges on persistency, in fact, we bein g at the better place, I would expect that pretty much everybody's being reasonably impacted. Just to highlight that our IRR is not very aggressive, they are in line with the market and the assumptions are already in line with respect to this in our experience. The majority of our policyholders who stopped paying premium choose to remain in a paid-up mode and on slide 30, we have given you guidance or actual data on how it looks. So, there are of course multiple elements of the business, there is impact on annuities, there is impact on return on premium, protection plans and all that has to be taken care of. There is an impact of course on health policies and we write reasonable health policies because the reviewability clause on health is going away. So, there are nuances on proportions, there are nuances on percentages, there are nuances on assumptions which is how at least we have determined for ourselves. I am reasonably sure around the numbers that I am telling you, it's very hard for me to take a guess on other people. Margin in Q2? I think we are making positive progress and at least from my perspective, the first thing is to preserve the counter share. We don't want to see counter share and for example there are product interventions, I mean if you really look at how it operates on open architecture counters, every day is a new day, you have to really fight it out. I am very happy that with all the interventions on a run rate basis, we are trending at 68% to 70%, which is the good part. I think Max Life Insurance is not new to open architecture. We have been on open architecture counters now for four years. For a large part of these four years, we have maintained our counter share. I am reasonably confident that we will remain at 65% to 70%. While it does take effort, of course, with the support of Axis Bank, not just as our large distribution partners, but also our promoters as well as the good work that we do, we will be able to preser ve. I am seeing good growth on the other bank counters also. I mean, if you look at until July, the private industry growth rate is 26%, while there is a bias towards ULIP, which has been a key driver. But overall industry itself is growing so fast, all the bank partners are growing so fast. and in the other bank partners that we have signed up month-on-month, we are increasing our share on counter, the six or seven new bank partners that we had signed up. Our overall counter share cumulatively on those counters have gone up to close to 22%. Every month I have been seeing our counter s hare in crease by a percentage or a percentage and a half and I am seeing good growth because of the low base effect. So, suffices to say that this growth is pervasive, and it is in the prop channel, it is in the bank channel, it is everywhere.

My second question, which was more specific to the 2nd Quarter. What is the kind of mix that we would have done in July, would it be similar to 1st Quarter and in case the growth kind of persists what we are seeing, and the product mix also remains similar, what could be the Q2 level margins?

I will see a positive movement; however, it will be unwise for me to get into the product mix issue, which is not market information. Market information is sales because those numbers are published by IRDA I. So, I will request that we review that as we conclude Q2.

The next question is from the line of Ajox Frederick from Sundaram Mutual Fund. Please go ahead.

Sir, you mentioned about tactical push which you made in 1Q. So, I am assuming that's regarding ULIPs. Just want to clarify that.

Predominantly yes.

And sequentially has product margins come off for ULIPs in 4Q versus 1Q?

It's a bit of a factor of which channel sells the product. If you ask apples -to-apples, Banca versus Banca, then the margins have actually only marginally improved, largely to do with the rider attachments that we are doing in our product. But because of the mix of the eCommerce ULIP sales that we have done, there is a sequential decline, but that's more to do with channel product combination. And as Prashant also mentioned in the opening remarks, the way we sell our unit link in the eCommerce channel is a combination of a capital guarantee plus a unit link design. So, it needs to be seen in a holistic perspective and that combination itself is a margin-accretive combination.

Second question is regarding our Slide #19 , where you mentioned about Axis emerging vertical and agency new models. So, what are these specifically? Within Axis, are they different distribution styles, what are they exactly?

So, this chart actually just kind of speaks about that we are not only just investing on the traditional way of how Bancassurance has been run, but also have been investing over the last two years in various verticals which are beyond the traditional branch banking vertical, which could mean the tele -calling setups, the virtual calling setups, it could mean the direct -to-consumer businesses that the bank actually runs. It has an approach towards corporate salary and small and medium enterprises. So, these are channels where traditionally we have not been present as an insurance seller. But we have kind of created muscle and capability to go and start selling in these channels as well and they're becoming meaningful contributor to the overall sales mix and actually demonstrating robust outcome. That's what the Axis emerging channels mean. Agency new models is actually this is new capacity that we have created certain farming constructs within the agency models, we have the variable agency channel constructs, we have specific proposition for top advisors i n the market, for which we have created specific capacity. So, it's a mix of capacity plus new styles of actually approaching the agents, which is actually aiding in the overall mix of agency growth.

So, these are slightly non -linear versus what the underlying distribution channels is?

That's right. This is also to demonstrate to you where the distribution capacity is being invested, how is that momentum of growth picking up and how that has every sequential quarters improving, how improvement in these particular investments is coming through.

But I am assuming this must be very small at this point in time within the.

It will be around 10% from an Axis perspective, around 5% for the agency channel for today.

The next question is from the line of Sanketh Godha from Avendus Spark. Please go ahead.

Amrit, you highlighted that the products that you sell on eCommerce channel are capital guarantee ULIP in nature. So, I just wanted to clarify again, you mentioned this product has invariably a better margin profile than overall ULIP what you sell. Is it my understanding right?

Say that again. Sorry, I missed the last part.

All ULIP is not necessarily capital guarantee. There is a significant portion of ULIP which is capital guarantee, that capital guarantee proposition is better.

So, the reason why I am asking this question is that the predominant portion of the growth in ULIP seems to have come from eCommerce channel . So, whatever growth you have delivered in 1st Quarter in ULIP in eCommerce channel, whether that channel itself is having a better margin profile compared to what ULIP you do in other channels?

I will get into the specifics of channel and their specific margin profile, but I can confirm to you that the eCommerce channel as a whole actually has a strong margin profile despite the proportion of ULIP live that is running in it.

You said that 45% growth has come from Axis Bank in the month of July and that is our overall growth also for the month. So, which means that you have defocused on this eCommerce channel little relatively compared to the old traditional ones. Just wondering if eCommerce is a little lower than the margin profile because of the channel mix it should play out going in subsequent quarters.

The proprietary momentum of growth has maintained. Obviously, there will be one month over another month where in the previous quarter we had a launch of a fund offer which actually helped galvanize momentum. So far we haven't done it. So, the eCommerce numbers have become slower, I mean, they come down from 200, but still very, very respectable growth momentum. But overall proprietary momentum for the month of July is also holding up. For the month of July, both the proprietary momentum has been maintained from a growth perspective and the Banca momentum actually has picked up, which has ensured that now whatever you are seeing as 9%, 10% growth on Banca has actually got trued up to 19% levels.

Sorry, why I am asking this question is for the simple reason that given the mix in the distribution mood in same favor of pop in the current quarter and margins depleted, and if it reverses in subsequent quarter means Banca comes back little fully compared to pop channel whether the margin profile will look better even if the same product mix you do in the current quarter?

Look, that answer is actually a yes for Max Life always because every consequent quarter, even at the same product mix, I will keep lifting up the margin profile. There's a big operating leverage kicker that we always get. So, if your question is that even if I run the same product mix that I ran in Q1 and Q2, will the margins improve? Answer is yes.

My question, Amrit, is not that. That I understand it will improve the margin structure in 2nd Quarter because of the operating leverage. My question was that even if distribution mix moves away from prop and moves in favor of Banca which you said in July the growth is very strong, not just because of the -

You indirectly alluded to the point that the surrender rules will have somewhere between 100 to 200 basis points impact on the margins if you don't make any change. This 100 to 200 basis points impact what you are highlighting is largely related to the first-year payout or you have also factored in a behavior change of the customer with respect to paid up behavior from subsequently onwards?

This question was asked, and we did respond that when we have given you an estimate of 100 to 200 basis points, we have assumed an increased surrender rate as well than what we are actually experiencing today because there is a value that is occurring in the first year itself. So, we have made that assumption when we have given you that. But I am reiterating that, and which is what our Slide #30 actually shows that for the non-participating design products, our experience or persistency is 91% in the first year and then subsequent to that, 90% of them still they stay with us and we have shown that particular trend. On this, we have assumed a worsening when we have given you 100 to 200 basis points. Now it can be argued both ways that maybe it might not worsen given the kind of controls and the deferment of commission structure that will come into picture. But at this point in time, just doing a simplistic view of the fact that there is an increased surrender value which could create an incentive for higher surrenders. We have assumed that in the competition provided to you.

Just this additional one percentage Axis Bank stake increase or 0.98 percentage, this will be primary in nature, or it will be secondary?

So, it's right now envisaged to be secondary.

Full year guidance, last year at the end of the fourth quarter you gave it to be in mid-teens to high -teens. So, even the surrender thing will have its own nuances, you believe that the growth guidance will be maintained and if you intend to maintain the growth guidance given there will be teething problems with respect to traditional plans, it is natural to assume that ULIP will drive that mid-teen growth or a little high mid-teen growth for you in the current year?

I will stay away from giving guidance. If there were no regulatory changes, the guidance is what the guidance which was given at the beginning of the year, which was close to 25%, 26% margin mid -teen kind of VNB growth rate. It's a large-scale change coming our way at industry level. I am 100% sure that within the period of three to six months we will be able to completely mitigate the negative impact of these regulatory changes, but because the situation is going to be very dynamic, it is very hard for me to tell you exactly where we will land up. We will try to come as close as possible to the guidance that was given at the beginning of the year.

The next question is from the line of Nischint Chawathe from Kotak Institutional Equities. Please go ahead.

We are not breaking it at such granularity, Nischint. The only idea and that's the reason you see we have not necessarily put a number there. But needless to say, obviously, that growth is lower than the average growth that has been indicated for the channel in the presentation.

I mean the only point is that Axis is somewhere sort of guided that ULIP kind of have a similar counter share but at the same time they're adding new partners. So, does it mean that you are kind of maintaining that counter share because of the fact that they are adding new channels or is it something that your counter share in the traditional channels is going to be whatever?

I think that's a fair question that you ask. So, if I exclude this channel and kind of speak about branch banking liability vertical, the core verticals where the sale happens, the counter share has remained stable. We will remain in the range of 65- 70%.

At least at my level, I meant I review it by every different channel. And by the way while we have seen 27% growth of whatever growth in the overall channel, this is just a 10% share or 10% to 12% share of the total sale. It is growing fast and we want to build it where at this point of time in the overall sales number, it is a smaller number.

And can you talk a little bit about the new agency model, I mean, are these variable cost agency models?

We are experimenting with several new things, going to Tier-2 cities with a slightly different model of servicing as well as training. It is also APC which is a variable cost model. We added two or three different things to our main agency channel, and these are actually those subsidiary or additional agency models, a bit different from the core agency model that we have put in.

Now I think Axis is almost closer to 20% or 19%. So, what happens like do you want to give some update on the timeline when you're approaching the regulator?

: I think we will wait until they go up to 20% and we will come back separately with an update as and when it is available.

Just a data keeping question. You mentioned the breakup of proprietary between direct informers and others or agency essentially at 18, 37 and 45 for the 1st Quarter this year.

That's in the presentation itself. It is there as a part of a presentation, Nischint.

No, no, I am just asking, what was it last year?

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the Management for closing comments. Over to you sir.

Thank you, everyone, ladies and gentlemen, for being on our call and for your interest. We do look forward to such more interaction. Have a good day. Thank you.

On behalf of Max Financial Services Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.

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