Ladies and gentlemen, good afternoon and welcome to the First Quarter FY 2026 Earnings Conference Call of Edelweiss Financial Services Ltd. 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 star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Priyadeep Chopra, President of Edelweiss Financial Services Ltd. Thank you, and over to you, ma'am. Thank you very much, Sagar, and good afternoon, everyone. A very warm welcome to our earnings call today. Today we're on the call, we have with us Mr. Rashesh Shah, the Chairman of Edelweiss, and Ms. Ananya Suneja, Chief Financial Officer of Edelweiss Financial Services Ltd. We hope you've all had a chance to review the investor presentation that we filed with the exchanges yesterday. During the discussion, we will be making references to this. Please do take a moment and review the safe harbor statements in our presentation. We will make statements today that may be forward-looking in nature and hence may involve certain risks and uncertainties. With that, I'll hand over the call now to Rashesh to begin the proceeding. Thank you, and over to you, Rashesh. Hello, everybody, and thank you, Priya. Good afternoon to all of you for this earnings call at the end of the first quarter of FY 2026. As quite a few of you know, we usually do the analyst call now every quarter as our story has become more and more stable, and there is not a lot that is happening on a quarter-to-quarter basis. I think now, given all the things that are going on in the world, and we have also had quite a few things that have happened in Edelweiss in this quarter, we thought we'll do this special earnings call at the end of the first quarter. Good to see all of you. First of all, thank you to all of you for being on this call, for giving us your feedback and your support over the years. As I said, a lot has been happening. Obviously, the Indian economy, we are all following, we all effectively get impacted by the Indian economy. The economy seems to be growing well, but there are hesitance of slowdown happening. Fortunately, the Reserve Bank has been aggressive. They have cut rates. They have injected a lot of liquidity. That at least puts some tailwind behind the growth issues that we have. We remain positive, but a lot of the liquidity transmission is still going on. Usually, in India, the liquidity gets transmitted from the Reserve Bank to the financial system and from the financial system to the real economy. It's still going slowly, and we think it will still take another two to three quarters. By the time this liquidity that RBI has injected cuts is done, which should be December onwards. I think along with the good news on liquidity, obviously, growth has been a challenge. Corporate earnings have been slowing down. CapEx has been low. One of the drivers, given households are slightly more indebted, government spending has been the driver for the last few years, but also now that is getting more stable. Corporate earnings, corporate investments have been slow, and exports, obviously, have been affected by all the global things that are going on. I think growth is a challenge. Hopefully, liquidity will offset some of the growth issues we have. Obviously, the tariff issue, a lot of investors have been wondering. It has been top of our mind. It is in the newspapers all the time. I think our analysis at Edelweiss has been that out of the 50% tariff, 25% is linked to the Russian oil, which is actually a much smaller issue. Economically, it appears to be a larger issue. I think India approximately will import about 800 million bbl of Russian oil. The calculation is that now the advantage of Russian oil is not more than $3 - $4 per barrel. It used to be about $20 per barrel, but the price has been shrinking. The gap has been shrinking. Now a lot of analysts feel that this is worth only $3 billion- $4 billion per year economic advantage. This for a country like India should not be a big thing on which we fight. Of course, the optics are important. Our strategic importance is important. All those issues will come about. The Russian oil issue is a $3 billion- $4 billion issue. The other 25% will also hurt our exporters. I'm hoping that the U.S. trade team is going to come to India in the end of August. Negotiations are still going on. Fortunately, the Indian government has not taken any hard stance up till now. We do think this should get resolved, and things should only improve from here. Hopefully, it does not get worse. We all keep our fingers crossed. With that, we come to the Edelweiss update for the quarter, as you all would have seen. Good, robust profitability, growth in the underlying businesses. The consol PAT was INR 103 crore, which is up about 20% YoY. For us, more important is the PAT from the underlying businesses, the seven businesses we have. That is at INR 179 crore for the quarter, which is up 23%. There has been a good scale-up in alternative asset management and mutual funds. The profitability in insurance is also improving. We are going closer and closer to breakeven. You would have seen our consolidated net debt has come down by INR 4,800 crore, which is a 31% fall. As with our story in the last many years, we have been bringing our consult debt down. From a peak debt of about INR 50,000 crore, we are now close to about INR 11,000 crore. I think consult debt bringing down has been part of our strategy. It is a pivot to more asset-led, more asset management insurance, more asset-led credit businesses than a very large balance sheet business. We continue to do that. We have strengthened our balance sheets. All the businesses are well capitalized. The liquidity is prosperous, as you can see in slide 15. All the capital adequacy, solvency ratios in all our businesses are very, very healthy. We also continue to add retail customers. Retail has been an important part. We now have 11 million customers, which is a growth of 31%. We have an internal target of going to 50 million customers by 2030, and we keep on pushing on that. Our customer assets now stand at INR 2.3 trillion. Of course, we all earlier had the Edelweiss Wealth Management, which became Nuvama, and those customer assets have gone away. After that, we have about INR 2.3 trillion customer assets. Before we go into some highlights on the businesses, I just want to spend five minutes on the key priorities that we've been highlighting. Our first priority has been growth in underlying businesses. As we've seen, they've been growing very nicely. Two years ago, the underlying businesses' PAT was INR 108 crore for the quarter, which is now INR 179 crore, which includes insurance and houses also. If you look at slide 9 in the investor deck, there has been almost a 30% growth in the PAT of the underlying businesses. This is the heart of our efforts. We are confident we have an internal target of maintaining a 25% PAT growth of underlying businesses. As we speak about the businesses, we'll see more color. Our credit businesses have been held back in the last few years. As you know, we have a lot of equity in those businesses. Because we are focused on the wholesale book cleanup, we have not grown. Even the housing finance business, Nido, which was not affected by the wholesale book cleanup, had also been held back because while we were cleaning up the wholesale book, while we were repaying debt, we didn't want any book fraction. Nido has also held steady for the last few years, strengthened the platform, invested in partnerships. Now we expect the credit businesses also to start calibrated growth with our asset-led strategy, which includes co-lending, and all the recent RBI guidelines, which were announced two days ago, are very positive in that light. Also, because all our businesses are asset-led and capital-led, they also now are able to throw out a lot of free cash flow. That free cash flow helps the corporates. The whole corp gets dividends from that. Even in this year, by now, we have got more than about INR 500 crore of dividends from the underlying businesses, which, as you will see, is important for our reduction in corporate debt. For the insurance business, we reiterate that we are on track to break even by FY 2027. The insurance quarterly losses have come down. Obviously, we still expect this year to be a loss collectively for the insurance businesses. In 2027, we should break even. The other important part has been corporate PAT. If you look at our PAT, our consol PAT has two parts: the underlying business PAT and the corporate PAT. Corporate PAT, obviously, has been a drag on our earnings. Even now, it is running at about -INR 400 crore per year. Largely, this is due to the interest cost that we are carrying. This interest cost that the corporate pays on its borrowing is partially offset by stake sale and capital gains on that. This is a drag that is there. As we reduce the debt, this drag will also go away. We have very voluntarily taken on this because the last few years, as we pivoted, as we unbundled, we made sure all the underlying businesses were well capitalized. We ensured that they were not starved of growth capital and growth investments. The corporates took on a little bit more burden. We also took the burden of helping clean up the wholesale book in the NBFC. This is now behind us. I think 31st of March, 2025, we formally feel that we have cleaned up the wholesale book. Still some recovery is a mess, but there are no underlying drags of that wholesale stress issue, which is holding us back. Now that that is behind the corporates, we take some onus on that for centering the businesses underlying and for cleaning up the wholesale book in NBFC. Fortunately, that is behind us. We started to reduce the corporate net debt. Since March 2019, it has come down by INR 29,000 crore for consolidated debt. We constantly focus on that. As you would have seen on slide 23, we plan to bring down the corporates just by stake-saling businesses, dividends from businesses, and we have some properties and all which we can sell. Collectively, all of this, we think we should be able to reduce the corporate debt by about INR 3,500- INR 4,000, INR 4,500 crore over the next couple of years. Our balance sheet and equity position continues to remain very comfortable. In fact, for the first time, we feel we have maybe overcorrected a little bit on liquidity, and we are now looking to replace some of the debt and reduce the liquidity we are holding. That should also help us improve our corporate tax as we repay the debt. Both the drags on our PAT last year's trends, the two drags on the PAT were insurance losses and the corporate debt cost. They both have been coming down in the last couple of years, and the next couple of years, we want to bring that down. That will result in our healthy consolidated tax growth because the underlying businesses will continue to grow. Our third priority after the PAT of the business debt has been on EAAA lifting. As you may remember, I'll give you a little bit of color. We had filed for the DRHP in March, in December 2024. We were hoping to do an issue by April 2025. In March, we received feedback from SEBI. This feedback was mainly on the classification of the revenue lines and has no impact on the overall PAT or any of the consolidated PAT expense numbers. Everything remains the same. The issue was, if I can give a little bit of color, as an alternative, we are the first alternative asset manager who can file for IPO. In an alternative asset management business, it's slightly different from a regular mutual fund business. In an alternative asset management business, you have three drivers of your revenue. One is your fee income. One is your variable income, which is linked to performance and threshold and other rates and all. The third is your investment income. Unlike in the mutual fund where investment income is very, very small because your compulsory investments are small, in alternative funds, your investors expect you to invest anywhere between 3% - 10% of the corpus as you are investing. Along with your investors, you also earn return on this investment anyway, which is part of the core earnings. In India, the mutual funds only take the fee income as income from operations and they treat both the other performance-related income as well as the investment-related income as other income. Internationally, most all the asset management firms take all three as income from operations, which is what we used to do. We've been working with SEBI, and it's actually been a very positive experience because SEBI has been very proactive because they want the alternative industry to grow. They want a lot of alternative managers to lift. They wanted to figure out what is the best way of classifying this income. I think with guidance from them, now it has been agreed that both first two income, fee income and income linked to the performability, is on both income from operations, while investment income is other income. We have reclassified our income along those lines. We also reclassify our expenses in these three buckets because we want to give real color to the investors that there are three buckets: fee income, performance-linked income, and investment income. There are different expenses for that. We have been strengthening that, and strengthening our articulation of that. We have used this time because the business continues to grow to strengthen the long-term strategy of the business. We are now looking at a 10-year plan, hitting alternatives and really growing even faster than we thought in India. We are putting together a 2035 kind of a plan vision, articulating it internally. Along with that, also investing in leadership strengthening for that plan. As you would have seen, my colleagues, Amit Agarwal and Subahoo Chordia, have now become CEOs of the business. We elevated them. They both have been running the underlying funds for quite a few years. Both of them have been in Edelweiss from 2008 onwards and have been part of the Edelweiss growth story. Amit Agarwal runs what we call the private credit part of the EAAA business, and Subahoo runs the real assets part of the EAAA business. These are two verticals we have. Elevating them as CEOs of the business has also been part of strengthening the organization and strengthening the leadership of the organization. We expect to launch, we are targeting the EAAA IPO for April 2026. Earlier, it was planned for April 2025. Now it has effectively got postponed by a year. We are working backwards to April 2026. We can do it earlier, but usually, January, February, March is a very busy quarter for our management team and all. A lot of fundraising happens in Jan-Feb-Mar. For all of you who are in the asset and wealth business, you will know that almost 40% of the activity in India is in Jan-Feb- Mar. Usually, Jan-Feb-Mar is also the period where a lot of international meetings also happen because after Christmas, actually, after Thanksgiving and Christmas, a lot of the international investors are available to meet after January. We do not want to do the IPO in January to March. We are now currently targeting for April 2026. We are also doing the IPO not for liquidity. As I said, our liquidity is stronger than what we think we require. We want EAAA to be listed as an independent institutionalized platform. We also think EAA will be strongly positioned to be a leader, plus also pursue inorganic growth opportunity because there will be a lot of consolidation in the alternative asset management space in the next five years. We think alternatives as an investment class have truly arrived, and EAAA will actually be one of the pioneers in that. That's the update on the three priorities. On the business updates, you would have got a chance to see the slides. I won't spend too much time on that. In our alternative asset management business, we have private credit. There's INR 38,000 crores of AUM, and in enterprise, in the real assets, we have about INR 21,000 crores. We have been very strong in realizations because, as you know, it's easy to invest. It's very hard to exit. We have very strong DPIs, as you call it, which is a distribution per investment, which a lot of investors like more than IRR. They also look at DPIs very closely. Our mutual fund continues to grow well, and in the mutual fund, we are focused on the equity AUM, which is now at INR 72,600 crores. It's a 38% growth by AUM. We continue to focus on growing our equity AUM. The profitability of the mutual fund has also been very strong. The first quarter, they've done almost half of what they did for the last four years. Our asset reconstruction company business is acquiring small amounts of new assets, but the last focus is on recoveries. We recovered INR 4,753 crores in this quarter, which has been a big one. We usually recover about INR 8,000 -INR 1 0,000 every year, but we've already recovered INR 4,700 this quarter. It's been a very good quarter from a recovery's point of view. We also acquired another INR 200 crores of retail new assets, so AUM has grown on the retail side. The profit is steady. As you all know, there is not a lot of AUM growth. The focus is on recovery of the AUM. Our NBFC and housing finance have been steady, but now we're starting to see growth. I think the first quarter, there has been a significant growth in reimbursements in both NBFC and housing finance. The highlight on NBFC is the wholesale book is now reduced by another 39% YoY, and now the wholesale book is only INR 2,400 crores. Insurance business, on the GI business, Zuno, our growth is pretty decent. The industry is not growing very well because car sales are low, but still, we managed to grow at 11%. Our AUM in the life insurance business has grown by 16% this quarter. Overall, friends, to complete, our businesses are growing well as per plan. We expect the PAT growth of the underlying businesses to continue to focus on getting that 25% CAGR. Our corporate debt will come down as planned, and with that, there'll be a consistent improvement in consolidated net debt. We continue to invest in making the organization strong by investing in leadership, technology, and innovation. You would have seen product innovation, whether it was direct bonds, whether a lot of products in insurance, whether in EAA, in private credit, and real assets. We've been very, very focused on innovation. That continues to be a very, very key area of attention for us. We will continue to add new customers. We are 11 million customers. We are growing at 20%. We want to keep doing that, go towards the 15 million customer target we have, which is a large one for us, but still, from an India scale point of view, it will be relatively smaller. It will be a good target to achieve. Finally, EAAA IPO, which a few of you have been asking us, we will target to do the IPO in April 2026. Again, thank you a lot for your attention. Now we'll open it up to Q&A, if any. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star then one on the touchstone phone. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star then one. Participants may press star then one to ask a question. Our first question comes from the line of Raghvesh from JM Financial. Please go ahead. Hi, sir. Thanks for the opportunity. I have a couple of questions. First, on the EAAA business, our ARR and AUM has grown at around 20% CAGR since FY 2022. Recently, the growth has come down to somewhere around 5% - 6%. Is it due to the industry dynamics, or is it anything specific to our business? If I can ask a second question after, you can say it again. If I continue on the ARC piece, now that business is running at a 91% kind of cash, which is quite high. Is there room to optimize there, and can we see some kind of circular tax being returned to us in the form of a dividend or a buyback? Or does that business actually need that 91% cash and the capital? Thank you. That's my two questions. Thank you. Actually, both these are very interesting questions, so thank you for picking them up. On the EAAA ARR, we will maintain a 20% - 25% ARR growth. What happens in ARR, the way ARR is calculated, it gets impacted on the positive side with new fund closures. We expect a lot of the funds that we were raising last year also to close this year. Last year, because the international market was slow and because the Indian equity market was very strong, a lot of the funds that we launched are getting closed now. As the funds get closed, the ARR revenue goes up. You might make efforts for one whole year, but only at the closure of the fund, it gets added to your ARR revenue. We expect to maintain our same steady 20%- 24% growth. It's not something you can monitor on a quarter or quarter or two-quarter basis. The other thing that impacts ARR revenue are your exits because we have had quite a few exits. As you would have seen, it's been a great year for exits because, obviously, a lot of people are also prepaying, and they are raising equity to pay off the private credit loans and all. An exit is good. Exits do bring your ARR revenue down. From a risk point of view, exit is where you are making your returns and all. In the April, May, June quarter, there have been two or three big exits. As you would have seen, even in ARC, recovery has been very strong because there's a lot of equity capital that is coming into special situations and stressed assets, which is taking out the creditors on those stressed assets. We expect that we will still maintain the same ARR growth that we have. We have quite a few fund closures ahead of us in this year. On the asset reconstruction company (ARC) side, you are right. They have excess capital. They have currently almost INR 3,500 crore of capital, and they are making INR 300 -INR 350 crore of profit every year. We do think that they have about INR 1,500 -INR 2,000 crore of excess capital that is there. We have started paying out the dividends from there. In the first quarter, ARC paid out about INR 650 crore of dividend, out of which INR 350 crore came to us. We own 60% of the company. We do expect to rationalize the excess equity in ARC. They also did a small buyback in the month of March. I think buyback and dividend will be one way because if not anything, they will still add about INR 800 - INR 1,000 crore of retail earnings in the next three years. We need, I think if you ask me, I think in two years down the line, the ideal ARC equity should be INR 2,000 crore, INR 2,000 -INR 2,500 crore. Anything more than that is excess for us. We need to rationalize, and it helps the corporate because it gives us the dividends to also rationalize our debt. That means somewhere around a 45% -50% kind of number is what you are comfortable with in ARC. Yeah. The other thing about ARC is almost INR 1,000 crore of free cash flow every year. Thanks for the answer, sir. Thank you. Our next question comes from the line of Kartikeya Mohata from Motilal Oswal Financial Services. Please go ahead. Hi. Yeah, thank you for the opportunity. I have two questions. First, your client is in the mutual fund business. It remains around like 5 basis points. It is significantly below the industry average. What are the structural or operational factors behind this low yield, and what are your plans to improve this? The second question that I have is on the housing finance business. Both the AUM and profitability in that business are largely flat over the last four or five years. Now that you've reduced the wholesale book, what is your strategy to scale the investments and drive growth? Yeah, thank you. On the mutual fund, you're right. About 5 basis points is very low profitability. I think industry average is about between 10 - 15 basis points on average. Of course, there are some which are even higher than that. We have a five-year plan. It actually has quite a few components. You would have seen that our profit, even 5 basis points, is an improvement over where it was a year ago and where it was two years ago and where it was three years ago. There is a steady state. We were spreading our distribution. We use a lot of bonds where the, obviously, profit yield is pretty low. As we build our equity AUM, which is now INR 72,000 crore and growing at 28% a year, the PAT yield of equity assets is obviously much higher than the PAT yield of non-equity assets. As we are building the, I mean, if you even track the ratio of equity AUM to total AUM, it is now very close to 50%. We were at about 20% to 25% a few years ago. As we are improving that, you know, we do think in the next five years, we should get to the industry average PAT level, which reaches about 14 - 15 basis points. It will take a little bit of work. We are tweaking our strategy. There are a lot of products there. There are products with 3 basis points of profitability and there are products with 30 basis points of profitability. You need to rationalize your product portfolio, your brokerage, your scale. As your TER keeps on going up, then up to a point, it is good. Then it becomes bad. Then again, it's good from the fee point of view. It's a very dynamic situation, but I can only assure you that on a quarter-on-quarter basis, we keep on improving this. The fight is not great from an industry-related point of view. It is a huge improvement from where we were, and we'll continue that over the next few years. There's a clear focus and strategy on that. On NBFC and Housing Finance, as you know, we've been treading water for the last few years because our primary focus was on the wholesale book. We didn't want to ride two horses at the same time. We were focused on cleaning up the wholesale book. The idea was that the NBFC MSME business, as well as the affordable housing finance business in Nido, keep them steady state, keep them on even keel. Now that the wholesale cleanup is over, we are starting to step up on that. In NBFC, our strategy is to focus on MSME. We have had an MSME business for the last eight years. The book has done pretty well. We are now scaling it up. I think last year, we had total disbursement because of the RBI order and other issues. We had about INR 500 crore of disbursement last year. This year, we are already targeting about INR 1,000 crore disbursement, and we want to grow that. The disbursement in the SME and MSME space will continue to grow. We have got three products out there. We have a GM Secure Business Loan, which is a small part of the business. We have a Secure Business Loan, and we have a Micro Secure Business Loan, which is about INR 5 lakh to INR 20 lakh of a product. All these three products have been doing well. Our main focus is on the Secure Business Loan and the Small Ticket Business Loan. We continue to be focused on that. I think that we will see some growth, but we have obviously a fair amount of capital allocation out there. We just now have to slowly and steadily, with our partners in Poland, model to grow that business. Okay. That's very good. Thank you. Thank you. Our next question comes from the line of Siddharth Shah, an investor. Please go ahead. Hi. Good afternoon. Thank you for taking my question. I just had one, maybe to better understand the economics of EAAA. I think quarter- on- quarter, the ARR AUM has been broadly flat. You mentioned some explanations about that. The revenue was up about 20%. How should we read into that? Is it that there was a lot of carry income, which in turn meant our funds did really well, and the performance was good? Yeah. I think that I see that, as I explained, the ARR revenue in EAAA is going to be volatile on a quarter-on-quarter basis because it is very lumpy. You close a fund, you get increase in ARR revenue. If you exit a couple of investments, your ARR revenue comes down. Last five, six months, especially this quarter, especially it's been in June, has been very good for exits. A lot of the, I mean, we had a fairly good investment in things like Balarpur and all, which all got exited because the markets are very good. The unified market has opened up place. These banks are coming back into a lot of this funding and actually taking us out. In a way, it's a good thing because that does reduce the risk on the portfolio. Any deal that is more than two years old, we are always happy for any prepayment. We are always happy to, you know, to get exit on that. We obviously don't want to get exited in one year. We usually have a, you know, things like and all, which make sure we earn return for a couple of years. Even if it's a three-year loan which gets repaid after two years, we are more than happy. I think one is that. The other is there are a lot of funds closures along the way which are going to get closed now in this quarter, Q2 and Q3. That will bump up the ARR. We always guide people to look at ARR AUM as a 4 - 6 weeks average because that smoothening is required because there'll be one quarter, you might see a 30% growth in ARR revenue. ARR is not directly linked to your profitability. In fact, ARR, your exits actually help your profitability because the carry income comes in. Usually, it's a slightly complex situation. Then your ARR revenue falls because of exits. Your tax improves. ARR is only one of the factors you look at. It's to see the growth in the business. The profitability in the business is actually driven a lot more by exits and how you deploy that ARR revenue. Even if you have closed a fund, you may not earn much because your ARR revenue has gone up, but the fee income is not started. I think, we always say that ARR over a 4 - 6 quarter average, we will continue to grow at 20% - 25%. That is our plan. That is in the works. On the profit growth, we've been growing at between 25% - 30%, and that we want to maintain on that. Part of the profit will come out of carrying, but almost 70%, 75% will come out of the fee income. Got it. That was very helpful. Thank you so much. Maybe one more question. I don't know if I missed it earlier. Now that RBI is kind of listing and they've filed the DRHP, has that changed anything around how we think about our asset reconstruction company? Obviously, we had EAAA and then the mutual fund. Is there anything that we are thinking about from a strategic aspect around EAAA or the asset reconstruction company? I'm happy you're asking this. I think we are also trying to see the ARC IPO and all. I will be candid. The ARC business is a deeply cyclical business because, you know, as you know, the NPA cycle in banks is also highly cyclical. I mean, from 2011, 2012 to maybe 2021-2022, we saw a big buildup in NPAs. In the last three years, there's been a huge build down of NPAs. I don't think until 2027, we will see that kind of a, you know, I don't even know by then, but there's usually NPA buildup and the NPA buildup is a five, seven, eight-year kind of a cycle. ARC is a player on that cycle because ultimately, ARC's mandate is to buy best assets from banks and NBFCs and then dissolve them. As you have seen for the industry as a whole, in the last few years, you might have profits, but you might not have growth in AUM. A lot of profit gains here also happen because of your exit. For us also, and for RCL also, a lot of the profits are happening because of exits. You get your incentives and other fees and all that which comes in. A lot of ARC assets, if you don't recover cash fees for six months, you know, they're actually worth of that. When you have new cash, you get all the accumulated fees out there. There is a lot of profit that will be there for the next couple of years in this industry as we are also maintaining INR 350 crore of a profit. I think growth in AUM will start coming from 2027, 2028 onwards. We are trying to figure out whether a deeply cyclical business, eight years, is good for the public market because it's not a business which can every year show the same kind of growth because the NPA buildup in the banks will be highly cyclical. Got it. Thank you so much for answering that. Thank you. Our next question comes from the line of Sujal Chandelya from Wallfort PMS. Please go ahead. Yeah. Thank you for the opportunity. I had a couple of questions regarding Juno business. Juno has seen some moderation in GDPI growth over the past two quarters, and losses have narrowed meaningfully, around 60% decline in FY 2025 and 38% YoY decline in this quarter. What are the key drivers behind this trend? Second question, just to double-check on a few things, do you see break-even achievable by FY 2026 end? I wouldn't promise by FY 2026 end. I mean, I'll be happy. As you very correctly pointed out, a lot of the loss is also linked to growth. The faster you grow, the more you grow, the more is the loss because your last part of the spending is also on the customer acquisition. You spend money to acquire the customer, and then you get the profit of that customer over a period of time. The first quarter has been because I think investment income has been robust, plus the growth has been slightly more muted. The reason the growth has been muted is if you see the GI industry, there are two big verticals, what is called auto and health. At Zuno, we are very focused on auto. We are very small on health. We have not built out a big practice around health and retail health. We are a small business out there. A large part of our business is on motor. Even in motor, we do a lot of OD. Motor sales have slowed down. Although there is a fairly healthy growth in renewal in motor as well as in used cars in motor, which also we are also focused on. The new car sales have been low. I think it's been about 3% or so. As a result of that, the entire industry motor insurance has been slowing down. In spite of that, we have maintained a good growth. If we grow faster, we spend money. Our idea is to maintain an 18-20% growth and break even by 2027. If we grow lower than that this year, our losses will be lower. I would prefer not to have that. I would want to grow at 18-20%, have the loss for FY 2026, and break even with the same growth in FY 2027. Okay. That's helpful. Thank you for your answer and all the rest for future quarters. Thank you. Our next question comes from the line of Rohan Mehta from FICOM Family Office. Please go ahead. Hello, am I audible? Yes, you're audible. Please go ahead. Perfect. What's your update on the stake change in the asset management business? Is this still expected to take place in the calendar year 2025? That's the first question. Secondly, sir, after publicly made interviews, the company had planned a 10% - 20% stake change to raise about INR 1,500 - INR 2,000 crore. Assuming the lowest possible valuation of INR 1,500 crore while shedding 20% stake, the EAA business is effectively then valued at an implied market cap of INR 7,500 crore. My question on that is, would you consider this conservative, or would you like to revise this number down at this stage? You have asked a very interesting question. On the stake change question update, as we said, we will do the EAAA IPO in April 2026. That is, I can delay it. I think because of all the reasons I explained, the reclassification and all that. On the mutual fund stake sale, we are on track for doing something in this year. We have quite a few conversations going on. The mutual fund stake sale that we spoke on the last call also is, hopefully, it will be done in FY 2026 because even after we close the agreement and announce it, we still have to get the approval from Sodi and others. We expect that it should happen in 2026, as we had announced earlier. EAAA should be, we should aim for an IPO in April 2026. That's the update on that. On EAAA valuation, as you saw last year, we made INR 230 crore profit. We said we are confident the business profit will grow at about 25% - 30% a year. We are focused on targeting that for the next few years. Fortunately, a lot of these funds are eight-year funds. Though on a quarter-to-quarter, you can't say how it will be. On a year-to-year basis, you can easily see the profit stability because of the fee income, the travel income, all of that are fairly predictable. Also, when you have the performance fee, there is also cost attached to it. If the performance fee comes, you pay the employees their share and all that. If it doesn't come, it doesn't impact profitability in a big way. I think it's a very good model where employees also have a lot of skin in the game. On that basis, we expect that EAAA profit will grow. All the valuations that we give were for last year because we were planning this IPO in April 2025. Now, if you go to April 2026 and you guys are the market experts, you guys know how the value compares. An alternative asset management firm, leading one, which has a last-year profit of INR 230 million, you know, growing by 25% a year, how should it be valued? We allow the market to decide that. We have a range in mind, but we want to sell only 10% - 15%. You know, we are not so focused on getting the best possible valuation. Our idea of doing the IPO and getting it listed is to make the platform institutionalized, independent, get a good, you know, investor base, communicate with them, and also get ready for inorganic growth opportunities because when you have the currency, you can use the currency. That's our objective. We will see how the actual valuation of that turns out. As I said, all of you are much better experts on how to value something like this than I can ever be. Thank you for the clarification. On slide 23, which you spoke about in your opening remarks, I just wanted a clarification. Out of the property and other investments, worth INR 2,000 crores, what is the value of other investments currently, and what exactly does it include? The other investments are a few investments in our funds, in EAAA funds and all that. We have co-invested alongside a lot of a few deals in the earlier years. Those are the credit investments. We have some property investments also. We have the Edelweiss House office building, Kohinoor House, we have Alibaug property, and our online trading center. Out of that INR 2,000 crores that we have put, about two-thirds should be property, including our office property, Edelweiss House, Kohinoor House, and Alibaug properties. 1/3, about INR 600-INR 700 crores, should be the investments in our funds, investments in co-investment alongside properties. Got it. On the same slide, you have also mentioned stake sale in businesses. Given that the amount shown is INR 3,000 crore and the word is plural, businesses, does that mean the 30% stake sale, which you are planning to do in the mutual fund business, is inclusive as well, along with the 20% stake sale in EAAA? Does that together just raise only INR 2,000 crore? I think as you raised, you know, smartly done the math. Our idea is to raise INR 2,000 crore. We don't have to sell 30% and 20%. We will calibrate that. As I said, a lot of conversations are going on. We are comfortable selling lower. In fact, our preference is to sell as little stake as possible and get to this INR 2,000 crore number. The INR 2,000 crore number is more like what is our intention. If you sell 10% of one and 20% of others and still get there, we are happier. In the next, as I said, EAAA, the plan is April 26. The business is growing well, and we are very confident. That is at its own valuation. Whether we sell 10% of EAAA or 12% or 15% or 16% or 18% will depend on our need to get to this INR 2,000 crore and the mutual fund also. We will sell it A plus B equal to our idea will be to get to INR 2,000 crore. Again, INR 2,000 crore is an indicative number. Our idea out here is between the three, you know, property, dividends, and stake sale in business. If you can get to INR 5,000 crore, INR 5,500 crore, then we have enough space. We also have quite a few interests in other businesses, like housing finance, insurance, all that. When we say stake selling in businesses, we're keeping our options open. We are actively pursuing EAAA IPO and the mutual fund stake sale. A lot of others, we are passively open to it. We keep on getting PE funds and other strategy investors keeping on coming. Opportunistically, on those businesses, also something comes about. We will evaluate that. These two, mutual fund and EAAA, are what we've announced, and we are actively pursuing that. Right, sir. Just to clarify. Sorry to interrupt. Mohan sir, may we request you return to the question queue for any follow-up questions, as there are several participants waiting for their turns? Sure. Sure. Absolutely. Thank you so much, sir. Our next question comes from the line of Niranjan Kumar from Equirus. Please go ahead. Sure. Thank you for giving the opportunity. Sir, corporate level net debt stands at around INR 6,350 crore, which is significantly higher than the aggregate net debt of INR 4,570 crore. These are across operating entities, right? Why is corporate level debt so much higher, and what are the reasons for taking this debt? As I said earlier, corporate, as you know, under RBI also, it can be 2.5 times yield. Even a holding company can be 2.5 times yield. Corporate debt at the peak pre-ILFS was about INR 14,000, INR 15,000 crore also. Over the last few years, we have brought down the corporate debt because it was already high at that time because that is what a holding company does. Holding company is equity and can borrow and invest in the business. The corporate debt, if you ask, it should have come down to lower even faster. In the last few years, our larger focus was on, A, strengthening the equity and the capital adequacy of our businesses. As you've seen, all our businesses are very, very strongly capitalized because when we unbundled, we made sure that everybody had enough equity because we didn't want to operate the businesses, make them independent, and have them starve of equity. We have given them equity, and we have made sure that the corporate took the burden of that. The other one that the corporate did over the last few years is we made sure that the NBFC debt came down. We made sure that whenever the NBFC needed liquidity, we had surplus liquidity. We borrowed and gave them liquidity. We had the interest cost that got added on that. The corporate, ideally, what is currently INR 6,300, as you said, should have been about INR 4,000. As you can see, we have dividends coming from business of INR 1,500. We have property. We have an office building and all of that, which is also funded with debt because it is an office building. Given that, all of that, we should have been at INR 4,000. We are about INR 2,000, INR 2,500 higher because of all this last new year, the post-ILFS, because our credit costs also went up. We had to borrow at a slightly higher rate. Plus, when ILFS happened, for five years, we did take some extensive borrowing from private credit funds and others to just hold extra liquidity. The last five years, we have held about INR 2,000 crore of surplus liquidity at the holdco just for emergencies if anything goes wrong. When COVID happened, when everything else happened, we would have adequate liquidity at all points of time. There was a crisis of liquidity that we faced because the whole core said, "You know what? Any underlying business, you have a shortfall for INR 300 crore, INR 500 crore for the short term, we will have it." There will be no cash flow mismatches at all. This excess liquidity of five years that we held, we had maybe INR 1,000 crore additional cost on that because we were paying a high interest rate and earning a lower yield because we had taken this as a liquid fund. I think if I use that five years, we have created more value in the businesses by doing all the things that we did. The corporate maybe has paid INR 1,000 crore extra cost of holding the extra liquidity, which I think has been worth it given the uncertainty that has been there for the last few years. Now we are over that. We do not need to hold that excess of surplus liquidity when all the businesses are now fairly stable and they have their own growth capitals enough for that. Thank you, sir, for that in detailed explanation. Now, another question. In the investor presentation, you have talked about some potential levers for corporate debt reduction, right? Can you give some details about the stake sales and dividends that you have mentioned? I think I just spoke earlier that there are two stake sales in the mutual fund, one and one in EAAA. EAAA, as we have said, will do the IPO in April 2026. Mutual fund, I have also in detail explained where the process is. We should be able to do it in 2026. Between both the asset management business, we should sell, as we have said, between 10% - 20% in EAAA and between 10% - 30% in mutual funds and raise the INR 2,000 crores that we want to raise. On the INR 1,500 crores dividend over three years, in this first quarter itself, we got more than INR 500 crores from our underlying businesses. The INR 1,500 crores dividend is not a problem. The property and all also, I mean, they are hard assets. They can always be liquidated. There is enough demand for that. Given all of this, we remain confident that about INR 4,000- INR 5,000 crores of the corporate debt can be reduced through asset sales, stake sales as well as other sales, and the dividend we get. Maybe after three years, the terminating corporate debt will be INR 1,000- INR 2,000 crores, which is very easily manageable. Even the current debt is not unmanageable. It's just as an earnings debt because of the interest cost on that. Thank you so much. Thank you. Our next question comes from the line of Aakash from Dron Capital. Please go ahead. Hello. Am I audible? Yes, sir. You are audible. Please go ahead. Yes. I just have two questions, both on the life insurance part. The first question would be the life insurance business has posted profit in Q4 FY 2025 and Q1 FY 2026. Are these indicative of structural profitability, or are they just one-off events? They are not. I think I expect even continue to lose money in the insurance business as it's coming down. Our life insurance business, even this year, should have a loss of about INR 80 crore or so. The first quarter has been profitable because of some investment gains, as you clarified out there. It is at a stage where a INR 20 crore investment gain in a quarter suddenly looks profitable from a loss because the losses have come down. This is a business which used to lose about INR 300 crore a year, which we have now brought down to under INR 100 crore a year. We remain on track to be break-even by 2027. This business will break even by 2027. We can break even earlier also if we slow down growth. As I clarified earlier, in both the insurance businesses, we want to maintain a certain level of growth and still break even because if you grow at 0%, you will break even in a quarter because all loss is for acquiring customers and acquiring business. Any business that stops acquiring customers and growing can easily break even. We want to, in the life insurance business, grow at about 13% - 15% a year and break even. In the general insurance business, we want to grow at 18% - 20% a year and break even. I hope I clarified that. Understood. The second question would be on the premium part. The premium growth remains below the industry averages. What's contributing to this underperformance? How do you plan to address it? It is not underperformance. As you know, the industry growth is not how it is indicated because that is the health insurance part of it. We are not in health insurance. We are in the motor. Even in motor, we are in what we call the medium car segment. We do not do intercity. We are mainly intercity. We are a very small player. I mean, as you can see, the whole industry, we are a small player in the industry, but we are very focused. We are very niche. The segment in which we are, the auto sales, the car sales have been coming down because of everything that is going on in the economy. The auto sales have grown only by 2% - 3%. As a result of that, I think this part of the industry is not growing more than 2% - 3%. We have still grown at 11% or so. We really want to maintain that. As I said, our annual target is an 18% growth in this industry. Understood. Thank you for taking my questions. This was really helpful. Thank you. Ladies and gentlemen, we'll take one last question. The question is from the line of Shobit Sharma from HDFC Securities Limited. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, my question is your AMC business. Sir, on the AMC side, we have seen our equity growth has been very, very, very encouraging of around 38% odd. If you look at our revenue growth, that has been somewhere close to around 11% - 12% odd. Is this because of our lower yields which we are charging on our equity funds, or is there something else to relate to this? Can you help us understand the yields for the equity side for current quarter and last year, same quarter? I think our equity funds, what we currently have at about INR 72,000 crore, our yield is currently averaging about 28% - 30% in that average for this quarter, the 28% -30%. Industry usually is at about 48% - 50%. We are lower than industry in this category, in that sense. That is why our yield is lower, but our profitability has been good. If you see the profit for the quarter, we made almost the same profit in the quarter as half of what it was in the last year. Our equity yields are improving. We used to be at about 24, 25 basis points. We are now at about 28, 30 basis points. Our focus is going to be on that. Also, if we add a non-equity AUM in this quarter, then it will not improve the yield as much. I think it's a constantly moving target of your funds when they cross a particular threshold, the DR comes down. Our guidance is to focus on profitability rather than on quarter to quarter yield. On year to year, I think yield makes sense. On a quarter to quarter, I think profitability is a much stronger indication of how the business is doing and equity AUM for us. The equity AUM has grown at 38%. Our profit has also grown at about 40% or so. We are focused on that. Okay, sir. If I have a few questions on your life insurance side, if I may ask you, sir? Yeah. Yeah. Sir, on the life insurance side, can you help us understand what kind of segment are we catering to? What is the sum assured bands we are operating at? How are we generalizing the premium business driven by the agency channel or the corporate agents? What would be our aspiration onto the life insurance business side? Our approach to life insurance is that it's an investment and a savings business. It's not just a mortality business. We also don't do much of ULIP. ULIP, in terms, is a lower part for us. Par and non-par are the two product categories we are really focused on. Non-par is obviously a strong opportunity, and par is our product. We are stronger on what are called traditional products. ULIP is a good product, but it's mainly good if you have bank distribution, and it is a very good issue, again, but it's not as profitable. It's very capital. It does use up a lot of P&L capital. We are focused on par and non-par. Of course, we have ULIP We also have some insurance. These are the four product categories for us: Par and non-par in the main category. We are about one-third bancassurance, about 30% bancassurance, about 40-45% agency, and the balance is all other channels: brokers and corporate agents and direct and exit agents. We have now currently a good mix with these agents, which are about 40% and another 30%, which is non-par, and another 30%, which is exit agents. Sir, what's our aspiration on that side of business? We focus a lot on product innovation. We do focus a lot on agent productivity. We always have every year one market product, which is very unique. It's one of its kind. It's a new product. That also measures a lot of the pull factor. As I said, we want to grow them. We want to be known as one of the leading offers of par and non-par products because that is where a lot of investment and savings need is being catered to. Like I said, we don't do unit because we think there are enough other people doing it, and there are good mutual funds available for investors, insurance buyers. Some insurance also we do, but for very, very specifically when you understand the risk recovery. Our main is to offer good investment solutions for people who are retiring after 15 or 20 years. That's our client base, and we offer a lot of innovative products. If anybody studies our products, they'll see that there is a lot of product innovation that we are focusing on. Our idea is that our focus on par and non-par understands the needs of the market of a very, very select target. Innovative We're not using insurance. It's about providing investment solutions for people who are planning for the next 20 and 40 years of their life. Okay, sir. Thanks. That's it from my side. All the best. Thank you. Ladies and gentlemen, we'll take that as the last question. I now hand the conference back to Ms. Priyadeep Chopra for closing comments. Thank you all for your time today. Your questions nudge us and get us to think. Please write to us at Edelweiss Investor Relationship for any other questions and feedback or any additional information you may need. Thank you all for your time. Have a great day. Thank you, Rashesh. Thank you. Thank you. Bye-bye. Thank you very much. Ladies and gentlemen, on behalf of Edelweiss Financial Services, that concludes this conference call. Thank you for joining us, and you may now disconnect.