Ladies and gentlemen, good day and welcome to Bajaj Finserv Limited Q2 FY 2025 earnings conference call, hosted by JM Financial. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Raghvesh from JM Financial. Thank you, and over to you, sir. Thank you. Good morning, everyone, and welcome to this Q2 FY twenty-five earnings conference call for Bajaj Finserv Limited. First of all, I would like to thank the management of Bajaj Finserv for giving us this opportunity to host the call. As always, we'll have opening comments from the management team, post which we'll open the floor for Q&A. From the management side today, we have Mr. S. Sreenivasan, CFO, Bajaj Finserv; Mr. Tapan Singhel, CEO, Bajaj Allianz General Insurance Company; Mr. Tarun Chugh, CEO of Bajaj Allianz Life Insurance; Mr. Ramandeep Singh Sahni, CFO of the General Insurance Business; Mr. Vipin Bansal, CFO of the Life Insurance Business; Mr. Ashish Panchal, CEO of Bajaj Finserv Direct; and Mr. Devang Mody, CEO of Bajaj Finserv Health. With that, I will hand over the floor to Mr. Sreenivasan for his opening comments. Over to you, sir. Thank you. Thank you very much. Good morning, everybody. I welcome everyone to the conference call to discuss the results of Bajaj Finserv Limited for Q2 of FY 2025. As before, in this call, we will largely be concentrating on the consolidated results as well as the results of our insurance operations through BAGIC and BALIC, and where material, the standalone results of your company, BFL. Bajaj Finance, which is another major subsidiary of ours, has already had its conference call. However, if there are any high-level questions on BFL, we'll be glad to take that as well. I will also take you through some of the key developments from some of our other subsidiaries, including our AMC, our marketplace business, as well as our healthcare business. Before I go into the call, with respect to the news article published in the mainstream media and the disclosure that we made regarding the intimation by Allianz to us of their decision to exit the joint venture, we have already put out a press release. There is no significant additional information that I can provide you at this stage. We will, as and when things evolve and as required under the applicable law, we would make disclosures as and when it is ready. Therefore, I would request you in this call to focus on the operations of our companies, and we will be glad to provide any clarification that you need in this aspects. The only thing I would say that the last several years, we have built two solid businesses in life and general insurance business, and we have always held some focus on equity stake, and this will continue to be, Bajaj will continue to be the dominant shareholder in this business, in the times to come. Any statements that may look like forward-looking statements are just estimates and do not constitute an assurance or indication of any future performance at all. As required by regulation, as you are aware, BFL prepares its financials in compliance with Indian accounting standards or Ind AS. The insurance companies are not yet covered under Ind AS. They have prepared Ind AS financials only for the purpose of consolidation. Accordingly, for BAGIC and BALIC, the standalone numbers reported are based on non-Ind AS accounting standards or Indian GAAP, as we call it, as applicable to insurance companies. Our results, the press release accompanying the results and our investor deck have been uploaded on our website within half an hour of our results. I would like to draw your attention to the newly revamped investor deck. There is an executive summary and significantly more disclosures. We do hope you appreciate this and look forward to your feedback for further improvement with that. Coming to the, I will now start with the results. Our total it has been generally a very good quarter for growth across all our businesses. Our consolidated revenue grew 30% for the quarter, and for the half year, it is 32% YOY. We ended the quarter with 33,703 crores of total revenue. The profit after tax was up 8% YOY for Q2 and 9% YOY for H1, and we have a surplus funds now in Bajaj Finserv of 3,546 crores, which is 28% higher than last year. Coming to the individual businesses, BAGIC's gross payment premium for the quarter, the headline number is down 20%, but it is predominantly because of a large government health business which got shifted to Q3, so we hope this will get stabilized in Q3, but nevertheless, the underlying growth is significantly above market. BAGIC had a profit after tax of 494 crores, which is 6% higher and a combined ratio of 101.4. The life insurance continues to deliver market-leading growth, growing the individual retail new business at 34% YOY. The NBV, the new business value, was higher by 3% YOY. The NBM is down by 3.8%, as you may have seen from our disclosure of other companies, the NBMs have dropped across the industry, and I'll come to the reasons soon. Gross written premium was higher by 23%, and our AUM at 122,178 growth is 25% higher as well. Coming to the consolidation results of BFL, the strong growth, 29% on AUM, total income up 24%, 13% growth in profit after tax, and, the gross NPA 1.06% and net NPA 0.46% continues to be, among the best in the industry. The ROTA was 4.48%, which translates to an ROE of 19.08%, annualized. Our newly listed subsidiary, Bajaj Housing Finance, ended with 26% growth in AUM, 18% growth in net total income. The profit after tax at 546% growth was higher by 21%, and the credit performance continues to be exceptional at just 12 basis points of net NPA and 29 basis points of gross NPA. The ROTA of 2.5%, given that it is a low risk, low margin business, is quite satisfactory. It translates to an ROE of 13.03%. Coming to some of our smaller businesses, the stock broking business, which is under Bajaj Finance, had a very good quarter again, 78% growth in revenue from operations at INR 121 crores. The profit after tax is up by 185% at INR 37 crores. The AUM at INR 5,430 crores was largely the margin trade finance AUM, and an ROE of 10.03%. So for our emerging startup company, it has already reached a level of profitability we are comfortable with, but we see good runway for growth in the coming years. The marketplace and tech services business, again, 30% growth in the revenue from operations. The profit after tax is down to just INR 6 crores for the quarter as against INR 18 crores. The health tech and TPS services, again, had revenue from operations at INR 233 crores. We are comparing the previous year because this year we acquired Vidal, and therefore, the year-on-year growth is very high, but it's not comparable after acquisition. The profit after tax was negative INR 32 crores, within our plan, of course, and the cumulative capital we have increased in the business is INR 1,086 crores. The asset management business again had an AUM growth at about INR 17,000 crores, and as I speak it is about INR 18,000 crores. It had a revenue from operations of INR 10 crores, and as you know, the asset management business, the revenue comes over time as the asset builds gradually over time. Coming to the highlights for each of the individual businesses. Bajaj, muted industry growth across various segments. Given that excluding crop and government health, which are more volatile, and particularly the crop insurance has been subject to significant price compression as well, with the new 80- 110 and 60-130 schemes. Bajaj's gross written premium actually increased 11% in the core business, which is higher than the industry growth of just 4%. Combined ratio continues to be good, but it was affected by natural claims, which is higher than last year from 95.3 to 101.4. Excluding that, the combined ratio was below 100 at 99.7. And on the nat cat claims, as I told you, there was an underwriting loss of 38 crores and an underwriting profit of 37 crores, and we hope by the second half we do get an opportunity to recover that. The solvency margin is very strong at 10% and 12% and the regulatory normal, 1.2%. Banking market, beating growth. Market share has increased to almost 9% of the private sector, now 8.9%. In Q2, Bajaj ranked sixth among private players and third on retail NOPs. I think this is a very significant move over the last couple of years, that Bajaj has been acquiring new customers and the number of policies, in new business that grown, is now number three in the market for the quarter. The new business value grew by 3%, notwithstanding the margin pressures, and predominantly the margins were down across the industry because of the significant increase in the sales of units, which are lower margin business for the industry as a whole, we have seen from some of the other companies that published their results, that's an industry phenomenon, but given that the growth in NBV with these margins is actually quite reasonable. Coming to Bajaj Finserv Health, the integration work has commenced for acquisition of Vidal Health, and the consolidated revenue for the quarter is INR 233 crores. Clearly, as a pure health tech startup, the amount of revenue is very encouraging, and as we continue to integrate Vidal, we see a lot of runway for growth for Bajaj Finserv Health. Bajaj Finserv Direct, clearly the INR 6 crore negative profit in the quarter, we do see very good visibility that, you know, in the next couple of quarters, we might actually break even. On a cash basis, we may break even a bit earlier as well, and the loss has narrowed to INR 6 crores, as I told you. The AMC, I've already mentioned, and Bajaj Finance capital adequacy remains strong, 21.69%. Tier 1 capital is 20.9%. Atul and I have already covered the IPO. The IPO was one of the most successful in the history of the Indian corporate sector, and they have also taken on significant capital adequacy, which will help them play the emerging and the growth in the housing markets quite well in their quarters to come. With that, I hand over the mic to you for Q&A, and we look forward to questions and our. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Prakash Kapadia from Spark PMS. Please go ahead. Yeah. A couple of questions from my end. You know, on the health side, typically, when we are, you know, looking to scale, what are the combined ratios on the retail and group side? Or what are thresholds for, you know, scaling that business? And what is your experience being on, you know, the government side of the health business? Because, you know, if I try and look at our GDPI growth, it's, you know, in the first six months, it's de-grown partly due to health, TP and, crop business not growing. So, you know, what will bring back GDPI growth, in the medium term for us? Those were my two questions. Okay. Before I hand it over to Tapan, I think if you look at Bajaj Finserv over the last twenty years, when we started business, people said, "Don't do motor business." Everybody was very interested in the very attractive corporate business, which was under the tariff, very cushy tariff in hindsight. But from the first year, we started making profits. Similarly, over the time, we have entered into businesses, we have entered crop business, we are going to rural markets, we have gone government health, and we have a very clear focus on underwriting profit throughout combined ratio and risk management. This business is not just about GDPI growth, it is a combination of growth and how you maintain profitability and risk is more critical to this business. Now I hand over to Tapan to take on the question on the crop, government and the retail health. Yeah. Very good morning. So if you look at it, our growth, if you see the core growth is much over the market, you know? And we have done this part of seeing what has de-grown. But if you also remove the bulky business, growth is very comfortably over the market. I think, Raman, correct me if it is wrong, but the market grew in the second quarter at about what? 4% and we grew 11%. 11%, yeah. So our growth is about what, Raman? Three times. Almost three times. Ah, three times the market, you know? So I think it is wrong to see from a perspective that de-growth is happening. And again, if you look at it, the government health business has shifted to October booking, which was last year booked in this quarter. If you add that up, our growth again is very comfortable for the half year and for the quarter. It is at least, like Srini mentioned, about 250%, 300% of market growth, which would be there. So I don't think that there's any de-growth happening anywhere. What you are seeing at a micro level de-growth is what we are doing willingly. If you look at the TP de-growth that we see, commercial lines of businesses, with no TP price hike happening for the past three years- Right. And the combined ratio is shooting up. So we have reduced our exposure there. If you look at, let's say the retail health, we're growing at market, you know, because again, the retail health combined ratio for the industry is under stress. So we are not really getting very aggressive, there on that basis. Crop, if you look at, there has been about a 50%, 40% fall in prices in crop for the market. So obviously, we have now reduced exposure. Now, if you see, this has been our strategy for 23 years. It has been nothing new or surprising. We've been consistent with it. Where we see stress in the market, we reduce exposure. Where we see opportunity, we increase exposure. That is why if you look at our combined ratio, which has always been among the best in the industry. Okay. And if you look at our ROE too, you know, in the business return on equity, usually we have excess capital. Our solvency is highest at 300+, Remove the excess capital, unless I take it to 200 or even 100, you take it 150, our ROE be touching 30%. At 200% of solvency, which is still better than most, our ROE is clearly over 20% consistently. So you have a business which is delivering at an ROE, which is clearly on the higher side of 20% consistently without the excess capital. It is a business which has been able to be agile, to be able to manage, you know, in terms of opportunities, and still the growth is much over the market. So that is what, the summary is of the current scenario. So hopefully I answered your question. We would be comfortable with the government health side of the business. What has been our experience? Obviously, you said it is getting different to the- ... As I said, I never give you, you know, in calls micro numbers. But broadly, as I said, if you look at the combined ratio as a company, it will still be among the lowest in the industry, no? And the ROE over 20% if I remove shareholders. So, as a company, we do business that we, you know, feel has strategic importance for a long-term growth of the company and we will look at it. And lastly, you know, in the- I think for the risk of repetition on previous calls, the P&C business is a business of how you manage your risk across P and C. And within that, in India particularly, you have different types of businesses. There are retail business, there are government-subsidized businesses, there are group businesses, and this is where is a big tactical element as well, because the market is very dynamic. The pricing changes very dynamically, and therefore, how fast you adjust and how you hold on to your basic risk parameters is what defines a good company, and that is what we try to do all the time. Right. Any sense on, you know, the TP price hike? You know, it's been almost the third year now, no hike from the government. So any sense what and when is there any possibility of- No, we should- TP price hikes we are representing? We should not be blaming... We should not be blaming the government, I don't think, I think. See, the process of TP price hike is, data is sent, from the industry to the regulator. The regulator looks at it, and if he, the regulator feels that there's merit, and they look at the micro level of increase in certain section and decrease also in certain section, then they recommend it to the ministry. And on that, the ministry looks at the merit and then takes a call. I think this is the process. It's a transparent process. The industry has representative with the regulator. The regulator now will be seeing a different merit in it, and they would push it. So that is how the process gets done from industry perspective. There'll always be representative. But the regulator look at the overall environment of the price, of the commission, of the combined ratio, and then see, you know, where the merit would be, and then they will recommend basis. So it's a process. As of now, I think for the past years, they did not see a merit in the increase, and that is what happened. This, the industry has recommended. Let's see how it goes on. Sure. Got it. I'll join back if I have more questions. Thank you. Thank you. Thank you. The next question is from the line of Mayank, from Emkay Global. Please go ahead. Yeah, hi, good morning, everyone. Thanks for taking my question. So two questions. First, on the motor side. The motor business has been growing at a slow rate. Any outlook on the second half of the year and any change in strategy which would be in the motor segment going forward? And secondly, I mean, how are the trends in the motor OD in terms of renewals versus the new auto sales which is being done? And my second question would be for BALIC. In BALIC, the group protection segment has grown by 25%. Just wanted some color on how the credit life and GTI businesses are performing for the H1. Okay. If you look at the motors business growth. See, as I mentioned previously, the commercial vehicle with the stagnation in TP price hike and the frequency of accidents happening has moved up, you know, in terms of the TP accidents compared to the time when COVID was there. And in fact, pre-COVID also, it's moving up. With the frequency going up, the severity, you know, moving up on commercial vehicle space. That's why we have, as mentioned earlier, slowed down our exposure in that line of business. Now, if we see a price hike coming in, then obviously our strategy would change. If we don't see, then we would be cautious in that business. And that's why you see our growth lower than the, you know, market growth in motor. But that is, as I said, this is fine with us. We do it for so many years. If we find some business doesn't make economic sense, then we slow it down, and if it makes, then we increase it. So the future statements depend on do we see a price hike or we don't see price hike in terms of what we should do in motor over the term for the life. Yeah. So, the question is around the growth term side, the credit life side particularly. So I think, directionally, we were-- we've been commenting on this, every quarter, that particularly last year, four quarters, we were focused on de-risking ourselves because we largely used to work with two, three partners, and they used to consume a big part of our, share. That, hence the task for us this year is, will remain, that we get onto more lines of credit life business, and, get more and more partners on boarded. Plus that, we can diversify ourselves. As a result, I'm happy to say that today we have about eighty partners, and about... within this, about twenty-two banks with who we are already on the credit life side. But having said that, there has been, while we've grown because of a smaller base last year, the color is different shades within this business. Some of the profitable parts of the businesses have de-grown, and some of the businesses which consume a little bit more time in growing, and of course, may not be as profitable as the rest, are growing faster. Hence, this balancing act, the balance will emerge as we go. As you may be aware that the credit life businesses for most insurers have slowed down, but I won't really jump in joy for the growth that we've shown yet because of the base effect. I think we are just getting back to where we ought to be. On the whole, there is a lot more competition emerging in the credit life side, and as a result, margins for credit life will remain sedate as we go by. Thank you for such a detailed answer. Just a follow-up for Tapan. Just wanted to know, I mean, how are we doing in the motor OD segment, the renewals versus the new car segment? Oh, it has been consistent. I think we improved on that. But again, if I look at the numbers from industry perspective, we're among the best. Okay, thanks. Thanks. Thank you. The next question is on the line of Supratim Dutta from Ambit Capital. Please go ahead. Hi. Thanks for the opportunity. My first questions are on the Bajaj business. So Tapan, you highlighted, you know, the challenges in the retail health segment. Just wanted to understand, if you could elaborate that, what are the real challenges in this industry, and how do you see these challenges being resolved going forward? That would be my first question. And, you know, a second part to this would be, if you could split the loss ratios in, on the, in the health segment between retail, group, and government, you know, that would give us some clarity about how things are moving in this segment. Now, the second question on the Bajaj business was, again, on the motor side. You know, I understand that, you know, you have, you know, done fairly well, you know, on the motor business. You were early in the TP business, and now you are slowing down there. But overall, the outlook, you know, for the TP segment as well, seems to be weak based on, you know, commentary from some of the auto OEMs in the second half of this year. So in this, you know, in this scenario, how do you see this book growing going forward, and what could you do to offset this slowdown? Is there opportunities for market share gains or, you know, vendor share gains in certain OEMs? So if you could give some color on that, that would be very helpful. I have a few questions on health, but I'll get to that after this. The final question, I'll explain the different portfolios and the strategy behind that. At the humble request, and I've said this in the previous calls also, this call also, please don't ask questions on micro level of claim ratio bifurcation. Those I would restrain my comment on because the business is strategic, and now when you start giving micro level claims ratios, it opens up to the entire market, and that's what never in the past also done that, nor will I do that. Whatever is available in terms of the loss ratio, it is in the public disclosure of GI business. I think, you know, if you look at it, go to the website and get that. But now let me come to the retail health and the challenge in retail health. So if you look at health, and this is globally a phenomenon of the health business and India specifically. The outgo happens at hospitals, no? And hospitals are not regulated in the Indian context. The inflation on the expenses at the hospital level, medical inflation, and you all are aware about it, moves up much faster than the price which gets built in in the retail health portfolio. And there are also quite a bit of fraud which keeps on happening in this space. If you increase the price too dramatically, then it hurts the end consumer, you know, because unlike motor, whereas the vehicle ages, your insured value comes down, so the price actually comes down. In health, as a person ages, the price starts moving up, you know, and the inflation also happening starts moving up. So the price is a very sensitive part of the health portfolio from a customer perspective, and rightly so. Well, the problem in outgo is that, you know, you have a medical inflation which keeps on moving much faster than the pricing which against them, and you also have a fraud happening. So the way the industry is trying to handle this is two prongs. One, a health exchange is being set up with the government, NHA in process. Every insurance company has plugged into, you know, that health exchange. And hospitals are a bit reluctant to plug in as yet, but talks are with them. Because that will bring transparency, you know, in terms of claims. The industry wants to pay claims as soon as possible, immediately. But the transparency, also the documents and the procedures, you know, being put on exchange, so there's a flow of things happening, but it is lacking from hospital as of now, but conversations are on to see how do we, you know, get them on board. So that would, one, bring in more transparency to the system, which would be better in terms of overall seeing how things move. The other issue would be if you look at in terms of the expectation from the customers and the regulator to the industry, that you should be covering everything, every possible means of treatment, any means of you know different segments of the society, and nothing should be missed out. And you should be serving the customer in a way that they have the least of you know difficulty, which is a very fair ask from the leader. But you put all that together, it's also a cost of servicing to the customer, and that also moves up you know in terms of costs that the companies bear. So when you put all this together, it is not something which you can easily say that, you know, it will at any point of time be able to generate a substantial amount of profit in terms of the business which has to be, but it is a substantial amount of business, so you have to be there, and you have to make yourself more efficient, much more, you know, better in terms of servicing customers and build a good brand. This is summary of the retail health that you asked me, in terms of, you know, how it is and the challenges which is there, how, you know, the companies have to keep on overcoming it at a company level, at an industry level, and to be able to provide very good service to the customers in terms of it's a very sensitive portfolio. You can see the individual in terms of their own health and all, so you have to be very sensitive toward that and provide the best service. If you look at Bajaj, we're the first to set up the RMs at hospitals, you know, people standing there for our customers to take care of them. When somebody is ill, they would really get confused. Some of the major hospitals have people there. We're also looking at digital RM servicing the customers. We also came out with very interesting products for senior citizens, which actually has a provision that there's availability, right? If somebody falls, there is emergency, they press that, we send ambulances over, get them picked up, taken to hospital, you know, we have green channel there, get them treated, get them back. We also came out with Global Health Cover that it is not that people are getting treated in India, so it's limited to India. You can get treated anywhere in the world. You know, so we have done a lot of innovation, and we're trying to bring the best product and, and look at, interesting, businesses, the models in which we try to see that we're not only just pure, paying claims, but also ensuring that we are able to take care of the customers, you know, beyond then take care the emergency of the customer. So it's, it's a constant, improvement and constant, push, but this is in short the retail health story. On the motor, your, question was, sorry, I missed that. So I was asking about the second half, you know, how are you looking at growth, given, you know, the commentary from OE suggest that, you know, it's going to be Yeah. So if you look at motor growth, overall the industry also has come down. So you have rightfully, the sale of, the vehicles have been low, and that has an impact in terms of, the growth of motor business as well. And I said, if, the TP price does not happen, and with the inflation of, costs, you know, in terms of, TP and other moving up, that actually is the reason why, you know, you have to still look at segments which, make sense and be there. So you have rightfully seen that, and let us see how the second half builds up this. Right now, there is stress in the sale of, new vehicles in the country. But as a company, we have a substantial share in the new vehicle sales, so I don't think I would see a huge difference from the current level of growth, which will happen either plus or minus. But that is a forward-looking statement. It just depends on how things move, TP price hike, you know, how does the sale of vehicle moves up or not. It is subject to lot of these parameters, you know, how the second half will look like. Got it. Mayank, thanks a lot for, you know, the detailed explanation on the retail health side. You know, if I could just ask, you know, two follow-ups here. So one is, do you see a need for different structures to emerge on the retail side in terms of products? You know, maybe, you know, something like a capitation, which is there in the U.S., something, you know, that kind of a model to get better value distribution between the insurance company and the hospital. And two would be, you know, do you see GST anywhere there is talk around, you know, GST rates coming down? Would that be a relief enough to, you know, really, drive growth, you know, or, you know, make this product a bit more attractive for insurance companies to sell? GST will play a role, and that has been the demand in the industry a long time, and we are actually seeing positive feelers, at least from the senior citizen and the low, you know, some insured coming right now, but let's see how it emerges, which I believe is good, at least for senior citizens, because as it is health, it gets, you know, more expensive as you age, so the extra relief for the senior citizen would actually make a huge difference, because that is where the health requirement is very high also, and we're focusing on that. To your point, health business will emerge, you know. It is in a constant state of churn, and we are seeing some good models of either Discovery in South Africa or most to some extent follow the U.S. models are there. This churning will keep on happening, and evolution will happen in the health portfolio, but one has to build it in a very long-term basis. See, in motor business, you can say no to a renewal. In health, the regulation, you can't say no to a renewal, you know? So you have to be very cautious of building a very good book, you know, which sustains and stays for, you know, like forever with you, kind of stuff. Okay. Thank you. Thank you, Makan. Just one question on, you know, the life business. I understand that, you know, you have grown very strongly this quarter, but, you know, given, you know, how the markets have been, you know, over the last 15 days, and, you know, considering that, you know, some of the commentary from, you know, some of the consumer companies suggest that there is stress building in the middle income households, you know, how do you see, you know, this ULIP growth sustaining going forward? And if it does not sustain, then how comfortable are you that, you know, to, you know, shift this growth to other products? You know, yeah, or if you could suggest, you know, give some color on that, that's really helpful. Right. Well, it's a good question. Yes, last quarter has been an abnormally good month in terms of top line, and hence, when top line comes with easier selling products, they do lead to a bottom line hit. So I'd be happier if we had got a more balanced product last quarter. What you'll see is that we've been working on our product mix, trying to get it balanced all the way through. Broadly, if I was to indicate the ballpark of ULIP, the way it has changed the market, so when the market, the BSE Sensex, crossed eighty-two K, our ULIPs were moving closer to a, to a very high level of almost 60% of our product mix. This, then we trained our teams, got them focused on a broader set of customer needs. We were able to actually control it, if I can use the word control, but I believe balance is the best word here, to what remains our usual mix. If you go back and look at how our quarters may move or how the years end up ending, we land up balancing a product mix over a period of the four quarters in a year. But we do let customers and distributors sell the flavor of the month. As markets are now kind of cooling off a little bit, we will be back to predominantly traditional product mix. That's where Bajaj has always been. Bajaj is largely a market leader in the mid segments already. Yes, I have been listening to the commentaries that there is an issue around the mid segment. But at the same time, if you look at the way people have money to spend the way other indicators are moving, it's a mixed bag. I don't think it's a clear indication that people are kind of cash-strapped, because spending on homes has gone up. Stamp duties have been higher. You see, middle class coming out and spending a lot more on travel. So it's not that there is we are seeing any significant risk. Our products usually are well thought through. It's a very high involvement product and do remain resilient to you know to minor volatility of such bits. This would largely spill out more from the credit life business, but not necessarily in the long-term saving plan. I think what you will see is our mix getting more and more balanced to what we are usually accustomed to have, and last year was quarter one, where we had a significant ULIP. This time it's in quarter two, but good thing is, the best quarters of the year are yet to be you know kind of pronounced, and they're coming in, and as our mix balances out here, overall, I think the year should be a lot more comfortable, and we don't have an issue on demand on longer-term traditional plans, because traditionally, that is what we've BALIC has been known for anyways. Got it. You know, thanks a lot for this answer. Just one, you know, question on that. You know, while traditional products will become larger in the second half is what I understand, but there is also an impact from surrender charge, you know, higher surrender charge and, you know, negotiation of some of the commission contracts with your, you know, partners. So if you could give some color on that, you know, how do you see that play out? You know, what would be the impact on the higher surrender value and how are negotiations with your partners going ahead? If you, that would be helpful. That's last one, sir. Thank you. Yeah, that's a fair, fair question to ask at this juncture. The surrender value, yes, did put us in a tizzy. I'll admit it, and has also put distributors in a tizzy because it's more than anything else, because of surrender value, the cost of distribution, the cost of commissions have to come down. Only then can you know or they have to plateau out in such a way that the first year's commissions have to come down. I think the distributors have been quite in sync with manufacturers, and they realize this. And the fact that this was going on for almost like six months of discussion, this has already seeped into the bloodstream of the sector and it had its time. So while there will be some small aberrations here and there, but largely most distributors have either taken a commission cut, or a deferral. And I'm not just saying it for BALIC. I'm saying it for the entire sector. BALIC, of course, is led also from the front as always. And it is kind of getting shared. This entire bit is getting shared. And as we go ahead now, we will see more and more. I'd say leveling out of commissions relatively. And that should help persistently, because you get your second year, third year, higher commissions versus what they used to be earlier, only if you're more persistent. More persistent you are, the lesser the probability of surrender. And it is I think, it is relatively been a very well-informed bit. I'd also like to thank the regulator that they could come up with this and, because it is largely publicized, distributors have basically been in sync with the manufacturers as well. Got it. Thank you. Can we move to the next question, please? I think there are others waiting in queue. Thank you. The next question is from the line of Dhaval from DSP Mutual Fund. Please go ahead. Yeah, thanks for the opportunity. I had a couple of questions. Sorry, I missed the opening few minutes of Srini's commentary, but just on this news flow around Allianz looking at exit. Just, I wanted to understand how are we thinking about, you know, sort of this event in terms of, let's say if we were to buyout funding of this event. I mean, some perspective around that would be useful. How are we thinking about it? And then the other question was relating to the life insurance business. You know, directionally, not maybe near term, but just directionally, we wanted to get closer to the listed peer group in terms of VNB margins. I mean, I just want to get some perspective that you know, maybe our pace of change may have got derailed in the current year with the product mix and the regulatory changes, et cetera. So, is that still on track in the next two years or so, FY 2027, do you think we will be getting there? Or, there is any change to that thought process? Yeah, those are the two questions. Thank you. I'll take the first question. I think you, as you correctly said, you missed my opening remark, in which I had said that we have made an announcement. It is Allianz's decision to exit. They have informed us. Beyond that, we have nothing more to communicate at this stage. So there is no further question that is taking this call as well. The second question, I think Tarun will take it. Yeah. So, uh- Another good question. I'd say that, yes, some delaying for a quarter, or two here and there, should be the only outcome of this. Because, like I was answering the previous one, distributors have realized that, this is a situation where they'll have to bear as much of the brand as the manufacturers are. And there has been multiple actions we've taken. So that, that should ease the, impact. Yes, directionally, we are committed to moving our NBM margins or... But normally we look at VNB, because NBM margin is not captured in Ind AS. The NBV is what we look at, and that is what you will see moving in directions. A slight, I'd say, aberration for the quarter, because more because of ULIP, not because of surrender value piece, last quarter. But the trajectory remains up, and we should be, we are in shape to start moving in the direction of the rest of the company, among the top three or five companies that have been. And you will see us getting there, because traditionally, as you may have seen, BALIC is a turnaround case. We have moved in from single digits to double digits already, and now we are with teens, and nobody is more keen than the team and me to ensure we get to where the rest of the players among the top cohorts that we have, the one we compare ourselves with. We are, we are committed to getting there. Sorry, Tarun, just if I may take a follow-up on this one. So, you know, like, the market share change that has happened over the last few years, now we've got to a particular size, I mean, in terms of, like, rolling twelve-month AP market share would be about 5.5% plus. So from that perspective, the incremental pace of market share change may moderate, and we are seeing that, you know, in terms of the steepness of the market share gain has started, you know, more moderating. So how do you insulate the this current position and then ensure that the gain still continue? Because, historically, we've seen in case of, you know, some of the other companies, like, Tata AIA or Kotak, and even in Max, you know, they get to this point, and then they start sort of losing ground, and then again, there is a one, two years of course correction. So just on growth, to ensure that this VNB margin comes through, how are we sort of looking at navigating this size and ensuring that we don't falter on that? Thanks. So it's not about first of all, I must comment that I think you've done your homework quite well. And yes, other companies would have moved naturally, and not necessarily the steepness would have continued. So one needs to understand that steepness is also a base impact, right? So when you're small, it was steeper. If you look at the number of thousands of crores we had, possibly that would remain similar. And in percentages, maybe not percentages growth may not always remain the same as the size gets to be larger and larger. What we are committed to is how is this market share coming? It's coming from the more profitable products and more customer-friendly products. And are we growing our base of customers? Are we is that distributor capability enhancement in the right trajectory? You have all these input parameters that, if you monitor, directionally, we shall remain only positive. The pace of growth of top line is essentially an outcome of all these things taken in conjunction. And you shall see that. Like, for example, I'm -- while the numbers say what they say, I'm particularly very happy to let you guys know that we are now the third largest company in the life sector in terms of the number of policies we sell in the private sector. So we are punching way above our weight class there, and that gives us capability to upsell. As you know, Bajaj Finserv Group is particularly known for such capability, and this is what we are always enhancing: that are we getting into more households? Are we getting into more cities? Are we adding more distributors who are active? How does the quality of sale go? Because all of these, if they are there, directionally, the growth shall remain. Trajectory be positive. We've always committed that we'll be twice the growth rate of the industry, and which is what we've always been mostly more than that. But it is important that with that, the bottom line also moves faster, not to wait one this quarter, but faster than the top line. Thanks a lot, Madhu. Thank you. The next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead. Yeah. Hi, everyone. So firstly on Bajaj, and, you know, and so kind of linked to the tariff hike as well. So, you know, we've seen the motor TP loss ratio for you and one of your core competitors a significant improvement in loss ratios over the last couple of years. And, so in that sense, you know, whether... First of all, what are the reasons that is kind of driving this loss ratio improvement? And secondly, when the, you know, the regulator or the government kind of decides the tariff hike, is it specific to, you know, more to link to loss ratios or it's because acquisition cost is all company strategies rather than, you know, driven by anything else? In that sense, does the loss ratio play a meaningful role, and in that sense, the probability of price hike goes down, given the trajectory that we've seen? That's a question on BAGIC. On BALIC, you know, if you look at the industry where we are getting more granular with the agency channel and direct channel reporting very strong growth for even your counterparts on the private side, how does the kind of, you know, structure with respect to, the infrastructure capacity that the companies would have or the industry would have, will have to change, and the investments will continue over the longest period of time, keeping the costs elevated and, so the margins possibly could be restricted? Yeah, those would be my questions. Thanks. Well, directly, the first one on- Yeah. TP rate hike and how important loss ratio is, and do you see any trend in that evolving? Yeah. So if you look at it, and I mentioned earlier in my, in the call, also in the previous call also, that it is a balancing of portfolios, you know? And I did mention that commercial vehicle, we have been kind of conservative on that line of business. Mm-hmm. So if the mix changes, then loss ratio will change, no? Yeah. So you have to see an overall loss ratio, yeah? Mm. So if you are changing the mix of, class of business, which is higher loss ratio- Mm-hmm, mm-hmm. and you're moving the mix of businesses, you know, lower loss ratio. Mm ... then overall your loss ratio will improve, no? It, that is how it goes, and you see that we have been doing it now for quite some time, you know, the mix- Mm. Because obviously, as I mentioned, that it from our perspective, if we don't see the price to be appropriate for certain class of business, so in those class of businesses, we will become underweight. And the ones which are better, we keep on moving that business. Mm-hmm. And that's why broadly you see the change in the loss ratio one. Secondly, if you see also the COVID times, when COVID happened, then actually the frequency had dropped. But it's very unpredictable. So quite a few companies had dropped the ratio looking at the frequency, while we have still held it because of the unpredictability. Mm. Then the reserving and also put the unpredictability part, you know, to account for that. And as it gets more predictable, so that ratio that you put for unpredictability also comes down over time. Mm. So mostly loss ratio movement will happen with your selection of business happening, you know. I think that is how it reflects on the business. Now, another point on the overall loss ratio, again, segment-wise, it's different for motor business. Some do require a price hike, some requires a price decrease also, no, which have improved over time. Mm. That is what the industry has recommended. Also, the industry recommends based on, let's say the frequency will increase, and if it will increase today, currently, then if you extrapolate the next six months from now, with all the cases coming out a year from now, it is going to move up, so if the price hike has to happen, then you take also into consideration the future movement, you know, based on the experiences currently. This is what the industry pushed forward as their logic in terms of why the prices, you know, at certain section not sustainable, and in certain segments, they should come down also. Industry recommends both. Okay. Then the regulator has a view on how they look at it, you know? So I hope this answers your question. Yeah. Thank you so much. As in life insurance? Yeah. So again, another good question. So there was a time when we had more new verticals coming, more bank partners getting tied up with us. I mean, literally in the last six, seven years, from near three or four banks, now we have close to 34, 35 banks now with us. So investment phase was significantly higher, and usually this takes a little time to get to productivity levels. And we've been pretty much being transparent in telling you that we were setting up more new verticals than we were you know reaping from these at that time. Mm. But as we are now stabilizing, at least in terms of the amount of new businesses that need to set up, which tend to build a new hierarchy, new vertical, higher costs, higher systems, that is, that is now not such a significant part of the growth. Now where we expect the growth to come is as we reap these relationships which have come with us, and it's more horizontal investment now. So while we've added 40 branches this year, and we are now about 562 branches, the growth shall come in. Incrementally, this is about 9% more branches, 8-9% more branches that we used to have earlier. But these are horizontals, so these don't require new verticals, new hierarchy, new non-production costs, and no new significant systems to be added in this. So we will be starting to see the cost ratios getting better as we go ahead, and the other is, of course, more productivity is coming in, and we call it smart productivity, where, you know, we are doing a balanced product mix that is going through with customers. Hence, you are not at risk of market volatility, which is what you will see as we go ahead, and hence the answer to even the earlier question that come up, that hence the impact, positive impact on VNB growth. Will start coming in because the scale will be there, but it doesn't need to be built from scratch anywhere. Understood. So it was more specific to agency and direct channel. While on the institutional side, I understand you would have built in a lot, so capacity with respect to infrastructure, like for agency and direct channel, where you will need to add manpower for, servicing, for, you know, major other elements of the business. Do you think that, you know, further, another so this gets delayed by another one or two years? So would we need further investments in manpower? Yeah, yeah. See, further investment in manpower is also for courses that will be required. I'm not saying it won't be required. But, I think given the sanity around the product mix, given the fact that, we are already scaled up, we don't need to invest in convincing people to become our distributors, it is more adding lesser and non-productive costs. So if you're adding producers, that is a good investment too, right? Mm-hmm. Then adding support staff to make it happen. You know, you do need a basic amount of actuaries. You need a basic amount of finance people, a basic amount of admin people when you're starting off. Yeah. But once you are adding distributors or you're adding or reducing part of manpower, that's only positive. In fact, I would say agency and the direct channels are now getting to be a lot more profitable, as we are seeing year-on-year, with the product mix getting stabilized and not swinging to one direction. That is what is going to help us grow our VNB more and more. Got that. Thank you so much, and all the best. Thank you. The next question is from the line of Sanketh Godha from Avendus Spark. Please go ahead. Yeah. Due to paucity of time, this will be our last question, and please make it short. Thank you. Yeah. Thank you very much. On general insurance, I have a question. You highlighted in the call that you are seeing pricing pressure in crop and maybe in commercial lines, like, fire. So, will you attribute this largely to EOM? So this will continue till next year because EOM compliance is needed to be compliant by next year. So the pricing and the profitability of this segment might be under pressure for the sector as a whole, is the first question. A counter question to the same thing is that, if EOM is the point which is leading to the pricing pressure in the commercial line, then it should have been ideally delayed in favor of motor business because the payouts are higher. So naturally, the price war, or at least payout war, should have moderated in that business. But we understand from you that we are seeing a different trend there. So just wanted to understand how you are looking at the space. That's on general insurance. One thing on general insurance, if you can quantify non-motor, long-term business in our portfolio in GDPI, that's not motor. On general insurance. On life, I know you indirectly answered that question on the commission, VNB margin. But given we ended at first half at 9.2%, and given we are now going through the surrender rules, what kind of an exit margin we should be assume? We reported last year, 14.6%. Whether is it possible to get closer to that number or we will be off, given we have a product mix challenge and then also the regulatory headwinds. If you can give a bit of color on the margins would be useful. And second housekeeping question is the negative operating variance in the EV walk is related to what? Yeah. I think the first question was on crop insurance, the EOM and others. I think Tapan or Ramandeep can take it. The second was a little bit more technical question on life. I think Tarun can take that. Thank you. Now, if you look at, first statement is, we don't feel any pressure on anything, I think. So, because we are growing much over the market, and, we have a combined ratio, which is among the best in the market. In terms of number of policies, last year we sold, you know, 33,460 lakh policies. It should be there. So I don't think we'll feel pressure on things. It's business, it's strategic, and it will move well. If I take you back to, you know, a couple of years back in the call, the question that I would always get asked is nobody is doing crop business. You are doing crop business. It doesn't make, you know, sense for others. I would keep on saying that, no, we will see that. And then, if you look at the results in crop, we did, you know, normally well. And then obviously the results are good, everybody jumped into the business ship there, and then the results, you know, the margins, you know, would get narrower. It's a natural part of any business across globally, not only insurance, any business, where people would see margins, they would come. EOM does play a role because, it is very clear the EOM has to be. But for Bajaj Allianz, I think we have been safely under the EOM norms, and still are very comfortable because we are much, you know, I think we are not even close to thirty, we are much below that. So we are one of the well run companies. So I don't think there is any pressure on EOM to make a decision, from our perspective. Some players in the market may have, that is their outlook, their call. They would figure out what is good for them and what is best for them, and accordingly, they will strategize and try to acquire business. But business movements happen based on how people see where the profit margins are, what is the competition, service to the customer, and what they can deliver best on that, and that moves. But if you look at the GI business globally also, there's nothing which remains permanent forever, you know? It's cyclic, you know. Some part of business will have discounting happening. Some part of business will have, you know, hardening of rates happening, and it happens cyclically. Look at the insurance market also, they have softening, hardening. It's part of our business, you know? So I think these circumstances do not put pressure on us, because part of the business and how do you be agile to figure out, you know, and have the vision to see what would be the right business mix to have. And we keep on making those business mixing and growing the business and ensuring that you serve your customers well. Develop good array, innovate, and do that. So it's part of business. I don't think we should read too much or see permanently in any part or any strategy. Tapan, the reason I was asking that question was that whether this, other than cyclicality, the EOM has also played a role, in pricing pressure because- Let's say I can't talk for other companies. For us, EOM has no pressure, I told you, and you would be knowing that since you have studied it so well. We are much below thirty, and we are comfortable, and we don't have any greed. So our decision-making will have nothing to do with the pressure of EOM. No, I think for us- ... And you know that, and you see that. Now, for me to come in and company else's strategy is not fair, because they would be using the best strategy for their company, and I respect all my friends, you know, in different companies. I'm sure they are thinking through what is best for them. But if you ask me, if I had to do a strategy in terms of, you know, making a business call just to correct PM, that in my view is a very short-term strategy. I would know or not do that. I would make strategies to run my business well for a very long time. So insurance is a long-term business. It's not fly-by-night business. If you enter the insurance business, I have a vision for hundred years minimum when we are thinking of doing something. So just making strategies to correct PM in short term cannot play out, no? It will always be very short term, it will always hit you again, no? In a very short-term basis. So I would personally not, you know, do things just to correct PM on a short-term basis. Got it. Ramandeep, if you can answer the long-term non-motor business to GWP contribution? So I'll answer that indirectly. See, while we don't disclose such granular numbers, but I'll give you an indicative number. If you look at our advanced premium growth, which is largely driven by the long-term businesses, that has grown at 20%. So that indicates, you know, that we are still growing in those lines of business at a healthy pace. Sorry, Ramandeep, my question was not with respect to motor. I was more keen to understand non-motor long-term business. Okay. Yeah, that's okay. That will be closer to, I think, see. Last year I remember the number was closer to thousand crores. But for this year, some of the businesses have slowed down in that segment, so I'm assuming you're asking in context of the new regulation. Right. For H2, I think the number for us will be closer to about 500 crores, if I'm not wrong. Got it. Perfect. Thank you. Thank you very much. On live or, sorry. Yeah, it is- Yeah. So I'll just get in on the live bit, Sanketh. So there are two questions. I'll answer the first, and Vipin will take on the next one, on the EV. But just on the VNB margin directionally, I've in a way already answered it. But just to be a little bit more specific, within a year, you would see that we have a higher swing, within our peer set. And usually the first two quarters are more today, and Q3, Q4 tend to be getting better because productivity, because second half is usually skewed towards better product, better product mixes as well sometimes. As well as a lot of the hiring that we do usually happens in Q1 and Q2, and the productivity is really start kicking in only in Q3, Q4. So I don't have any major concerns on the exit numbers. The team is committed to maybe delivering better than this, but as we are closing out on all negotiations and discussions around the deferrals, commission reductions, I think we'll be in a little better place to put you know, a kind of a broad theme that is gonna be better or is it gonna be whereabouts in another month or two, because everything is now getting discussed in closed industry. But we are, we remain positive, is all I'll say, because you asked a question on the regulatory bit and the direction of the Indian. Right. But is it fair to assume that it could be potentially 100-150 basis points lower compared to what we reported last year, given the product mix and the regulatory side? See, if I was a scaled-up company with margins having peaked out, yes, I would be concerned. But we, our margins are only just propping up in the last two, three years, so I don't think for us to beat that, this number is tough, despite whatever. Mm-hmm. Got it. Yeah, so because our trajectory was a lot steeper than this, our peer set, so our aim is to get to that direction. Let me just say that to you at this juncture. I'll ask Vipin to comment on the technical things. Yeah. Negative operating, yeah. Yeah. So I think the question was on operating variance. I think there are no major items. I think you know on a we have about 9,300 crores or 50 crore variance. Some of it is purely the way you know your persistency behaves, some of it is there, and we might cut both sides. You know some products, better persistency can cut both sides. On one product, it could be favorable, on other it could be. But it's a small variance, nothing that worries us honestly on this side at this point in time. The reason I was asking, Vipin, was that given our persistency has improved across cohorts and we are at a better scale, operating leverage should also play out. Is it largely related to mortality? Was my concern, just to- No, no. So if your question is mortality, it is, that's not the reason for this variance. ... Okay, perfect, perfect. That's it from my side. Thank you very much. Thank you. The next question is from the line of Nischint Chawathe from Kotak Institutional Equities. Please go ahead. Yeah, hi. Thanks for accommodating my question. You know, this is essentially on you know, a little bit understanding of you know, the surplus capital or surplus cash that we have versus the you know, the deployment that we are looking at over the next couple of quarters. So if you could just help us sort of understand that. I believe you said somewhere closer to around INR 3,500 crores of surplus cash is what we are sitting with, and maybe if you could help in terms of you know, how that is getting deployed in various businesses. Okay. This is at the BFL level, and as you know, over the last few years, depending on the solvency, increased solvency of both Bajaj and BALIC, we have been taking dividends from both Bajaj and BALIC. BFL also now has been a consistent dividend payer for the last few decades, so that is a primary source of cash flow, and we'll continue to build on that as we go along. Of course, we have demands primarily from the mutual fund business and from our healthcare business for some amount of capital. At the moment, we are not envisaging capital requirement for our marketplace business. As we go into the future plans over the next few quarters, we will give you that situation, but we are not seeing that at the moment. And if we have any surplus capital, we may put a bit into our venture funds as well. So this continues to be our plan, but over time, we should see, as the cash surplus grows. We also have a commitment over the next seven or eight months to contribute to the draft issue warrants. That balance, 75% is due. We will be investing in that. That's about INR 900 crores. Sure, got it. And very rough ballpark, you know, the investments that we're looking at in health and, you know, AMC. I mean, if any number that you could give. But I think between the two, we should be, at the moment, looking at. We will know clearly by February, but as of now, we are not looking at more than about INR 500-600 crores over the next year and a half, till March 2026. Both the companies put together? Yes. Yes. Okay, got it. I think that answers my question. Thank you very much. Based on the last year's AOP, so I cannot comment on next year's AOP until February. So I can't give a commitment now, but this is what it looks like. Perfect. Perfect. No problem. Thank you very much. Thank you. Ladies and gentlemen, this was the last question for today's conference call. I would now like to hand the conference over to Mr. Shreyas. Thank you to all the participants for joining the call. And a special thanks to the management team of Bajaj Finserv for giving us the opportunity to host the call. Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you. Thank you. Thank you, everybody.