Good day, welcome to PB Fintech Earnings Conference Call for Q3 Financial Year 2022-2023. We have with us Mr. Yashish Dahiya, Chairman and CEO, PB Fintech. Mr. Alok Bansal, Executive Vice Chairman and Whole-Time Director, PB Fintech. Mr. Sarbvir Singh, President, Policybazaar. Mr. Naveen Kukreja, CEO, Paisabazaar. Mr. Mandeep Mehta, Group CFO. Ms. Rasleen Kaur, Head Corporate Strategy and Investor Relations. As a reminder, all participant lines will be in the listen-only mode. Anyone who wishes to ask a question may enter star one on their touchtone phone. To remove yourself from the queue, please enter star two. Should you need assistance during the conference call, please signal an operator by pressing star zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Yashish Dahiya. Thank you. Over to you, Mr. Dahiya. Thank you very much. Welcome everybody. I first of all just wanted to make a very small correction. Sarbvir is not president of whatever. He is the Joint Group CEO. It happened a month ago, so that obviously needs to be published out. Before we begin our performance update, I would like to, you know, obviously welcome all of you, and especially the ones who've joined us for the first time, and like to reiterate how our business is structured. Policybazaar and Paisabazaar, which are jointly classified as existing businesses, are India's largest marketplaces for insurance and credit products. These contributed to almost all of our revenue still, the full year 2021. In FY22, we expanded into new areas and geographies and collectively refer to all those activities as new initiatives. Our revenue in the first nine months of this year is 5.2 times our revenue in the same period, four years ago, which was 2019. The revenue grew at 91% year-on-year, and our existing business has now been profitable for four straight quarters. For the quarter, our revenue grew to INR 610 crores, up 66% year-over-year. While the PAT losses have reduced to just under a third of what they were, which were INR 258 crores and are down to about INR 87 crores now. Our existing business, adjusted EBITDA has increased by INR 67 crores for the quarter year-on-year and INR 164 crores for the nine months of the year as compared to the same period last year. The reason we explain this EBITDA is because we had at one time sort of given a soft guidance of INR 150-200 crore increment in EBITDA happening almost automatically every year. Just wanted to clarify that that's been happening pretty much every quarter in the last three, four quarters. Now, what is this growth driven by? This is driven by three things. First is the growth in renewal income. The reason I mentioned that first is because that's the most secure part of the business and growth in new business and growth, and then the higher efficiencies on new business. Just to explain, last year for the same quarter, the same quarter, our ARR on renewal revenue was INR 210 crores. Now it's INR 315 crores. I just want to spend 30 seconds on this. You can see that it has grown by INR 105 crores in the year. It took us the first 1four years of our existence to get to INR 210 crores, and then one year it increases by INR 105 crores. Ideally, this should not be a flat increase. This should start to become an exponential increase as time progresses. But even at this flat increase, with all the operating increments, you know, margins are over 85% for this. This has given almost a INR 90 crore delta just because of this aspect that should keep happening, right? We are now at an annual run rate of about INR 12,000 crores of insurance premium. We continue to improve our efficiency, which is on the premium per inquiry, which has reached INR 1,563 for the nine-month period, which is the highest ever. I think the biggest heavy lift that's been happening in the company is on servicing and the claim support. We have a CSAT of 88%, but this is. While this is great, it is not really representative of the amount of customer appreciation. See, insurance usually tends to be a complaints category. The number of appreciations we receive for the claim support is quite extraordinary. Our existing business, the insurance marketplace, Policybazaar, and the credit marketplace, Paisabazaar, grew to INR 425 crores in Q3. Of the total revenue, credit linked revenue of this was INR 107 crores. Credit business has continued to grow well, and we're very happy that it's broken even in December 2022. We are now at a run rate of INR 12,700 crores of disbursement and INR 5.2 lakh or about 0.5 million credit cards issued on an annualized basis. 33 million customers have accessed their credit score on our platform. 75% of the cards issued in Q3 were end-to-end digital. This really helps us in improving margins. Co-created products like Step-up Cards, Duet Cards are continuing to gain traction. Talking about our new initiatives. We are 3.7x of last year on revenue, but our adjusted EBITDA loss is pretty much the same as it was last year. If you, those of you who followed us would know that in Q4 last year we had peaked and we had reached losses of almost INR 90 crores. Of actually more than INR 90 crores. We are down to INR 54, and I think this should keep declining. PB Partners, our agent aggregator platform, continues to lead the market in scale and efficiency of operations. It has the highest proportion of non-motor business in the country, out of all its competitors it competes with, and is now present in 14,300 pin codes across India. The UAE business has grown 167% year-on-year. So it's grown to 2.67x. We have said, already claimed this, that our EBITDA has grown at INR 164 crores for the first nine months of the year. Please notice that the PAT has grown or whatever, the PAT loss has reduced by more than INR 200 crores, that is not really reflective of the business reality. The business reality is this. This is the thing that's gonna consistently keep changing, right? We stay confident of being adjusted positive, EBITDA positive, for Q4 this year and deliver a first full year of PAT in 2022, 2023, 2024. Happy to take questions now, yeah. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets when asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shreya Shivani from CLSA. Please go ahead. Hi. Thank you for the opportunity and congratulations for a good set of numbers. Ms. Shivani, sorry to interrupt you. The audio is slightly low. Please increase the volume of your line. Just a second. Is this better? One second. We can hear you loud and clear, yeah. Okay. Okay, great. Yeah. Congratulations on a good set of numbers. I have three questions. First is data question. Can you give us the breakup of the insurance premium of INR 3,028 crores into POSP and existing business premium? Within the existing business, can you give a breakup of the new and the renewal? This is the first question. Second question is on the POSP business specifically. The contribution margins have been quite good this quarter at, it's reduced quite a lot. It's only at minus 15%. Where you see the margins settling in the next couple of quarters? My last question is more to do with the structural change in the industry, with the new tax laws coming in and non-par savings getting taxed above INR 5 lakh premium. Can you give us a little detail about what is the share of your savings business, particularly your non-par business, which was largely hit? Since all of these are related to Policybazaar, I will, pass the mic to Sarbvir Singh. Hi. In terms of the breakup of the, I think the first question was on the breakup. Our PoSP business was about INR 500 crores. Dubai was about INR 80 crores, and our corporate business was about INR 300 crores. I think that's the level of breakup that we normally share. That will allow you to kind of, you know, see. The growth was fairly strong, you know, across businesses, this quarter. Sure. Sure. The second question, sorry, was? POSP is at - 15%, so there's been some margin improvement. Where do you see this in the next couple of quarters? If you notice, we have been sequentially every quarter improving our margin profile. Two things are driving this. One is that a proportion of non-motor business, which is health and life business and commercial line, continues to grow. Now we are a significant market leader in that part of the business. Now motor business also we are becoming increasingly more and more efficient. I think you should see this sort of improvement into Q4 and as we go forward into next year. At some point, obviously, the rate of change will not remain the same. But the idea is very much to put the business on a very sustainable path. The last was the structural change from the tax regime, which is not crystal clear yet. What is our share of business coming from that? Our share of the business. See, we are a company which caters to the middle class. Our share of the business from these policies is very small. They are, like, sub 1%. For us this, you know, on the PoSP side, we do have some high value policies. Again, it's not a very material thing when you look at the overall number. For us, this is not going to be big one way or the other. Neither is it going to be big from a share perspective, nor will we have an impact when this, you know, rule comes into play. I think we did check. There were 762 policies or something which were more than INR 5 lakh for us in the year, or whatever period. Right. It's not a very significant number for us. We don't really cater to the wealth segment. We mostly cater to the middle class. I don't think middle class people pay INR 5 lakh premium. Got it. Just one question got left out. The POSP agent count right now, last quarter it was at 1,000,000 agents, I guess. It's little more than that. It's grown from that number. Honestly, beyond a point, the agent count is not necessarily reflective of anything, if you ask me. Yeah. What we really want is the number of agents who repeat sustainable business with us. I think that is the number which is the most important number. We can take this offline. Maybe Rasleen can help you if you have any other questions on this. Sure. Okay. Thanks. Thanks a lot. Thank you. Thank you. The next question is from the line of Subramanian Iyer from Morgan Stanley. Please go ahead. Hi. Thanks for the opportunity and congrats on a good set of numbers. A few more data-keeping questions. One is, if you can split your revenues into credit and insurance. I think your credit revenues is about INR 4.5 crores. If you can split it between credit and insurance. That we already did. INR 107 was credit-linked revenue. The rest is all insurance. Got it. Sorry, I probably missed it. The other question I have is on the adjusted EBITDA as well. Your existing adjusted EBITDA is INR 26 crore. How does it split into insurance and credit? Credit is less than INR 1 crore both ways. You know, what I'm saying is it's less than INR 1 crore negative. It's about INR 40, 50 lakh rupees negative. In December it was positive. It kind of made a loss for the first two months, and then in the last month it made profit. It's almost all insurance. INR 26 is the insurance, whatever, EBITDA. Adjusted EBITDA. Yeah. Lastly, so you mentioned that the premium under the new initiatives is about 80 crores and which translates into the existing business being about, say about 2,050 crores odd. Can you just split it into new and renewal? That will help. Yeah, we don't do it, but it's almost equal. It may be little more in renewal, whatever, but little more in new. It's almost equal. It's been almost equal for quite some time. The growth rates are also similar. I'll give you some things, right, which you guys can. Which are important for you other than kind of worrying about exactly each number. See, we focus on health and life, so I think that part is important to you. On health and life, we have grown at about 30%. Very, very close, whether it's 29 or 30 point something, it's about 30% and I think that's what's relevant. In the industry scenario where things are not been... We've grown at more than double the rate of the industry. I think, the rest of it is fairly immaterial, you know, if you really think about it from many perspectives. We will disclose more. We've told you we'll disclose more from January next year. Sure. Got it. Yeah. I mean, the only purpose of asking that was because we need to connect. So your renewal commission is about INR 80 crore odd, so we needed something to kind of check. Yeah, so that was the purpose of asking that. The other question is how is your offline business doing in the one that is connected to your online lead generation in terms of contribution to the main business? I will pass that to Sarbvir. The offline business is now contributing in the relevant areas, which is life and health again. About 20% of our premium comes from the offline business. We now have presence in almost 60 cities. We have centers in seven big centers in seven cities. I think, I think last time also we spoke, we have about 1,000 people deployed on the offline side. Right now we basically invested in this over the last three quarters, and now we are basically trying to or we are improving the productivity of this force. So far I think it's going really well and, you know, it's doing what we wanted it to do, which is to deliver incremental conversion over and above what we can convert from the call center. Just wanted to add there. Sorry, Sarbvir Singh. We have 62 locations where we are where we have a physical office or presence. Otherwise, we are present in 125 cities we cater to. There's a lot of definitional issues here. What is a city? What is a town? Et cetera, et cetera. You know, suffice to say 125 locations is where we do sales and in 114 cities we are serving claims. I really think, and I'm emphasizing this again, I covered it in my main speech also. The big heavy lift that's happened in the last 1 year has been in the claims support area. Some of those, you know, are quite telling. When we are receiving those, appreciations from people, they are very, very telling. They are helping the morale in the company as well. Of course, eventually this will lead to very good word of mouth as well. Got it. Thanks and wish you all the best. Thank you. Thank you. The next question is from the line of Sachin from ASCA. Please go ahead. Hi. Thank you for the opportunity. Yeah. I have two questions. First question is on your costs. Usually employee expense and advert expense is lower. I presume employee expense is lower mainly on the back of ESOPs. Is there anything else you can kind of let us know that you're planning on employee expense? I think it would be ESOPs. There is no material. It's more ESOP accounting, which we were telling you guys last year also that look, our ESOPs essentially go like first year 700, second year 350, 400. The third year they become 160, then they become 70, then they become 30. Yes, that would be the biggest impact. Otherwise, there's no material change in number of employees. Correct. Is it fair to assume that your core employee strength as well as your advertisement, you know, will remain low or relatively low as a% of revenue going ahead? You know, we've said this repeatedly, we are doing a certain amount of advertising, that is more like a platform approach that we do a certain amount of advertising every quarter. You don't need more than that. You just don't need it. To some extent, we've always said that, you know, you can't read. Our advertising is just a way of communicating to the customers that we exist and to keep reminding them. Insurance you've to keep reminding people that you are there, and it's an important product, both. It's an important product and Policybazaar is an important place to be, and similarly for the credit guys, right? To a large extent, that tends to become a fixed cost from here onwards. The changes you see would be sometimes 5% down, sometimes 5%-10% up. It's not like you need to increase in line with revenue. I think that's becoming very clear as we proceed. You can see, right? We are growing our core businesses at double the rate of the industry. It's not like our growth has slowed down. It's not like anything, but our, you know, those costs are not increasing. Or in fact, they're declining by a few percentage points. Correct. Yeah. Second question is on, you know, as well as our EBITDA margin being positive. Just to understand any one-offs are there in this quarter, and, you know, should we see a sustainable, you know, positive EBITDA margin at least going ahead? Naveen, please. No, no, this is very much sustainable. It's, December is the first month where we've hit the break-even point. You should see that in the next quarter we'll have some positive and then continue to increase as a percentage and both absolute number also. Very much sustainable. Naveen, can you help us get a little bit more idea of drivers in terms of what drove the profitability and, you know, the comfort on, you know, sustainability? In terms of the drivers, I think Yashish has referred to that from an insurance perspective. The similar drivers are playing out. If you see, in the last 12, 15 months since, you know, the COVID fear has subsided, the credit industry has started growing back at a pre-COVID rate, which was about 20% or so, give or take, for the overall credit industry. What's happened, which is different from pre-COVID and, that helping a platform like us is that digitization has started to become real on the ground. The percentage of one of the metrics that we mentioned was 75% of the cards that were issued in the quarter were end-to-end digital. This number was almost zero if you go three, four years back. What happens is that as things become more and more digital, we see lesser drop-offs, as a customer doesn't need to move from one platform to another platform or needs to go physical. That improves our conversion. And as we have increased our credit score customer base, that's allowed us to go work with the lenders to create better, more seamless pre-approved programs, which also converts and gets approved at a better rate. Overall, which you'll be seeing that in the improvement in the margin. If you look at two years before or even 1 year before, the percentage margin has gone to a fairly healthy, 40s kind of range. As we grow our overall revenue at, you know, which is growing at about 87% or so, if you look at nine months data, and if the margin stays healthy at 40%+, and your fixed costs, which Yashish referred to, are growing at a much lower ratio, the money flows down to the EBITDA, which is what we're seeing from a nine-month perspective. Yeah, I will like to give you this picture very clearly to every person because all of you need to appreciate the business. Our revenue, let's say nine months. Let me give you a quarter view and a nine-month view. If you look at a quarter view, our core business only, I'm not talking about the new initiatives. Let's leave that out because that will complicate the picture from a digging up perspective. Our revenue increased about INR 108 crores in the quarter, right? Year on year. INR 61 crores was the increase in contributions. Our contribution margins are not 55%. They are closer to 44% for the core business. Where did extra 15%, 16% come from? It has come from the renewal expansion, right? One is the renewal expansion, second is the growth in new business. Of this, roughly half has come from new business, half has come from renewal, roughly. What you see next is of the 61, 67 has flowed into EBITDA. That means your fixed costs have reduced about INR 6 crores. That doesn't give you the full picture, because if you look at year-on-year, you have got a INR 392 crores growth in revenue and INR 648 crores growth in contribution. You notice it's just above 60%. Same story. Our contribution is 44%, so where's the extra 16% coming from? It's coming from the growth of renewals. Renewals are at 85% margin. Renewals have grown, obviously, and that's showing up there. Of the INR 248 crores, INR 164 crores have gone to your EBITDA. That means almost 2/3 of your contribution is flowing to your EBITDA. Yes, there's a fixed cost increase, but the fixed cost increase is INR 80 crores. That is, you know, that's broadly what we've been saying all along. That look, yes, this business has flex, it has renewal growth, which will keep improving the overall margins. Fixed costs are genuinely fixed, yeah. That's all. Thank you. Participant has left the question queue. We'll take the next question from the line of Sachin Dixit from JM Financial. Please go ahead. Hi, Yashish and team. Congratulations on great set of results. I had some questions regarding the omnichannel play, right? Now we are getting leads online, and we are able to convert offline as well, which has been our premium for inquiry work significantly over the year. Can you talk a bit about how are these, say, these improvements in conversion is resulting in some savings, and how does it compare to the cost of doing the offline business? Okay. Let me just take a few minutes before I hand over to Sarbvir. My answer will be more philosophical level, and Sarbvir can probably answer it at a more granular level. See, we are there wherever the customer wants us to be there. First of all, we advertise, and we let the customer know that he or she needs to buy insurance. They come to the website. Most customers have said it's not an entertainment site. They've said, "Yes, we are interested in insurance. We want to buy insurance." That does not mean we will buy insurance, right? Then starts the process of converting them. Some people will buy on the website, some people will buy through the call center. Some people will say, "No, I actually want to meet physically." There are also other examples. You know, I gave this example a few quarters ago on the call itself. I was visiting Bangalore. I spoke to one of our top performers. He said the person was ready to spend, buy a policy for, let's say, INR X on the call. When I went and met him, I sold him a policy of 36 INR X. That doesn't happen all the time. That is an exceptional example. That also happens. People talk about when you go and meet somebody, that person also says, "I've got three more references. For my family, I also wanted to buy this and that." All of the things are happening. Now, please understand, we have run the call center operations for 15 years. We have run the physical operation for just about a year. Obviously we are early in this. Our people are early in this, but on productivity, it is already beating the call center model. You know, you have to take vintage into account before you kind of start to judge things. Sorry, Sarbvir. No, no. I think Yashish covered all the points. I would just say that right now in Q3, I mean, if you look at the numbers, you can see that our contribution margin is going up despite the fact that we are spending on the offline expansion. That basically means that the improvement in ATS, improvement in multi-year policies is more than enough covering the cost of operations. I completely agree with Yashish that right now we are not the most efficient in FOS operations. I think we are very efficient on call center operations. We will become more efficient in FOS, and I think that will only make this picture better. Over, you know, the next 12 months you will see that helping us. Right now also we have absorbed the total, you know, the total offline rollout has been absorbed in the core business, and you can see that the core business continues to do well. That should give you an indication that that part is also becoming more and more powerful. So sorry. What I basically wanted to understand was there will be some savings in marketing costs because the conversion is going up. Right? There will be some incremental cost of doing the offline business. Is net-net are the costs comparable? Is one significantly higher than the other currently? I understand that FOS is still nascent. I'll explain. See, our marketing cost is before the channel comes into play. That is to generate the inquiries on the website. All the inquiries are generated on the website or the app. We do not have people going and meeting anybody or saying, "Please buy insurance." We don't do all that. Right? No cold calling, no cold knocking on doors, nothing. That's where a lot of people get confused with how compare this with the agency model and all those kind of things, right? The marketing cost does not get changed at all. Yes, your premium expands because you're doing higher premium per inquiry, because you are using a further channel which can convert even better, right? Or at a higher premium per inquiry it can convert. On a cost basis, the operating cost is there, and the operating cost has increased. As a percentage of premium, the operating cost has not been increasing. It's actually either been flat or coming down. That is what I said, the efficiency of the physical meetings is already higher than the efficiency of the call center. While we are, you know, as I say, we are mastans in our call center, we are novices in the physical world. The improvement from here onwards will be much higher in the physical world. You won't see as much. Like, you can't say doubling of productivity in the call center, but I think in the physical world you'll probably see a tripling of productivity. Don't take those as guidances, but that's probably what one is talking about. Sachin, see one important thing we had mentioned in the past that according to our research, roughly 2/3 or little higher than 2/3 people who are buying term and health, they come to compare before they actually buy. That doesn't mean that we have the 2/3 market share of those two categories. There's a lot of leakage which happens. Where you want to stop that leakage or reduce that number, that's where we believe our customer percent of buyers who have come to us, who have bought through us, we want to move this percentage towards 35, 40, 50 over the next few years. How do you do that? You have to work on the product. You have to work with your customer to make the buying process easy, which includes this omnichannel strategy that we have. You have to also build more trust around the claims. Hand holding of the customer post purchase. We are investing in all three. It's a continuous process. It's not something which is like a one-time go. Out of these three, build up for the omnichannel is something which Sarbvir mentioned has happened to some extent. Now, it will be incremental from here onwards. The first one year was trying to establish these offices, these 1,000 people. Now that you have got these in place, you want to work on efficiency from now onwards, right? Which is Which is the quality, all those factors. Yeah. Okay, thanks. Thank you. I'll move on to the second question. My second question is with regards to so recently I came across a platform media article wherein PB is launching a wholesale insurance product, right? Where is a combination of savings, term as well as health. Can you talk us through the process of creating such products? Like how are you working with insurers? Who is giving the approvals? How are these products being created? Yeah, this is a great question, and I'm glad you asked it. We are really proud of the work that our team has done to develop this product. It's a product which looks at both health needs, health protection needs of a customer, as well as some life insurance and then a savings component as well. We had this thought that we wanted to. Because we hear a lot from our customers that they are concerned about what they are saving for, right? One of the main things that people are worried about is that in their old age will they be able to take care of health emergencies. We conceptualized this idea along with, you know, in this case we have gone with two partners, Tata AIA and Niva Bupa. The team worked with both the insurers to not only conceptualize the product as to how it would work, but also to tie up the buying experience. I think as Alok just mentioned, one is the product which we conceptualize over here. The second is the buying experience, so that the person when they go through this and I would encourage you to buy this policy, because what you'll find is that the entire underwriting process is seamless. The minute the savings product will be issued, you will get the health policy right away. Everything will come in one jacket for you. You can pay together for it. Any service issue that you have, there is a relationship manager. That relationship manager will handle both health claims or any question that you have on the savings side. It's a completely fully stacked up journey with two insurance partners. It shows, I think what Policybazaar can do. Because at this point, as you know, this is the only way that you can have this product. You know, we have tied this whole thing together. We are really positive and very hopeful that this product will do well. More than this specific product, I think it's the thinking that matters, which is that we saw this problem, that a customer's problem is not health insurance or savings. It's actually a mixture of the two, and we have conceptualized something for it. I think this is not a one-off thing. We have done this for many products in the past also, I feel this is now going to open up a whole new set of, you know, opportunities for us where we will combine, this time we've done health and savings. With this we are working on products in other health plus term, and things like that. You'll see, you know, some of those initiatives coming out. If you think about it at a conceptual level, you know, most middle class families, when they are going through life, at some point an individual becomes a family and then they have children. That is the point where they start to require things like term insurance and health insurance requirement is also there. As the family keeps growing and the children get through college, et cetera, the term insurance remains very, very critical. At some point when the children start earning on their own, the term insurance does not remain important. This is about seven, eight years in the middle before you retire. When the person retires, the only needs become the pension and the health. Why is this crystal clear to me? You know, I grew up as an army officer's son, and all of these requirements were taken care of for my father and for myself. When I came to the civil world, I said, "Okay, how do these people live?" Because those are very, very critical requirements, right? I asked a lot of people, and they all said, "We would be happy to get 20, 30 less salary if these requirements were taken care of." That is the basic difference if you really think about it from a government job to a private job, et cetera, et cetera, right? This has, this has been a deep thing which has been going on for like, at least more than a decade in terms of how. I'm not saying this particular product will be hugely successful or not successful. This is the first attempt and it's not in the perfect shape. I think what Sarbvir said is very important, that it's been brought together through multiple organizations, through us, you know, various things, right? I think we will keep working in this direction. The approach is eventually to solve this problem for the middle class, health, debt, pensions in a holistic manner. I'm sure at some point it will get solved. It takes a lot of effort, but at some point it will get solved. Very impressive. All the best. Thank you. Thank you. The next question is from Chawathe of Nischint from Kotak Institutional Equities. Please go ahead. Thanks for taking my question. When I look at, I'm looking at sequential trends in your insurance premium and your revenues. Actually you shared some data on the PoSP premium. I believe the rest of that growth comes in essentially on the, you know, on the, you know, on the core business, on new business premium. It's a fairly large, you know, sequential growth in this premium division in the business. If I compare this with the revenue of the core business on a sequential basis, that's gone up only something like 3%, 4%. I think what this effectively means is that the calculated fees in the, you know, in the core business has come down. This is- I will clarify to you. I think looking at quarter-on-quarter growth and each percentage point genuinely does not make sense. You know, as you would imagine, it tends to be a bit lumpy. Any growth moving from one quarter to the other happens on a fairly regular basis, not a lot of big gain. I think you should look at this over a few quarters. Even if you look at just two quarters, the growth in revenue is also about 15%. You will come to the right answer, but just look at it over a little longer period than just one quarter. You know, one can't, you know, be that accurate in every quarter it has to grow at 7.5% and grow at 13% for a year. That is not a very feasible expectation. 2, 3% up down does keep happening. As you correctly pointed out, it is not that the premium has not grown. I have explained that the premium has actually. Whichever way you look at it, year-on-year, the growth is 34% and 30% for the life and health fresh business. We've given you those clarifications. Yeah, the revenue can be a little here or there at times. Incentive from somebody which came in one thing which did not come in the next quarter. Don't get too stuck up on one, two percentage points. Just look at it over a few quarters, that's all. No, no. My question essentially was that from a business, composition point of view, you know, was the second quarter and third quarter very different or pretty much the same? No, no, it's just pretty much the same. There's been no material change that anybody needs to be aware of or even we are aware of. Sure. It's like not that we are not aware of things are actually happening. It's just there's nothing. Sure. If I look at the non-core expenses, you know, this number has actually come down sequentially and on a year-on-year basis here and there. Is there anything specific that we should read in this? I mean, are you taking any fixed expenses or? We would have normally expected this ratio to, I mean, this absolute number to go up. Maybe at a lower pace than your revenue, but to actually go up. Definitely remember at the start of the year, we had given some sort of, I won't say guidance, but some idea that our investment in all our new initiatives is going to be very near to our You know, and that number we planned around somewhere between INR 200 crore-INR 250 crore. That's it. We had taken specific efforts. I mean, last year was the first year when these initiatives were launched. We were investing a lot in building the team, learning the stuff around these initiatives. Over quarters, once we got to the leadership, we started focusing a lot more on the efficiency on each of these initiatives. That's what you're seeing on quarter-on-quarter basis. If you look at the JFM and then April quarter and then July quarter and then September, October quarter, every time you'll see that, okay, it comes down. That's just a focus that we clearly laid out for ourselves that we want to make initiatives more and more efficient while not letting go of the leadership. The core business will become more and more profitable. It's already at 6%. If you look at the last three quarters, it moved from 1% to 3% to 6%. Top line is growing. Multiple things happening. On this particular one, we definitely want to become more and more efficient every quarter. We are also very clear. If you just look at a period over a couple of quarters rather than a single quarter, because again, the same thing, right? You may have a particular advertising campaign which might work on a particular day or the next day. Again, look at it over a two-quarter period or something of that sort, because that can make a big change, right? A INR 10 crore advertising campaign running on first rather than 25th, you know, numbers will change basis that. When you look at a, you know, nine-month basis, you will see that the growth is coming and the profitability is coming from growth. It is not coming from cost reduction, which is not our intention either. Costs can stay flat. All we are saying is fixed costs are fixed. If they were not fixed, they would be variable. They're not variable. Sure. Got it. Those were my questions. Sorry, just one last question is, you know, of the total outstanding ESOPs, you know, what is the schedule? I mean, till when what should be to be exercised? What's the portion of You can see the bulk of the ESOPs that you see, they were given in October 2021. As you know, the counting happens in a 12-month phase. Every year for six months you see a very different level of charge of ESOP, and next six months you will see a little different. Which is apparent in this year data also that quarter one and quarter two had a different number, and quarter three had a little different number, which is much lower because the way accounting works, obviously, it is on a reducing manner. We do have some bit of ESOPs remaining from the original approved by the shareholders. Slowly, they are being utilized for old staff and for also new hires. That is not a very big number to make any major change. The bulk of the ESOP charge actually was given on October 21st month itself. That's why, I mean, every year, third quarter there'll be a significant drop compared to quarter one, quarter two. We've given some guidance on this that look longer term, As a longer term, I mean, beyond the five years. Beyond the first five years, we expect ESOP charges to be roughly about INR 100 crores a year. That's my guess. Right? Even now if you take the founders out of it's probably something in that range. It may be INR 150 because, you know, yes, there was an IPO and you would have a little appreciation and all of it has not been rewarded actually. One should look at the remaining is the accounting part, which, of course, you know, feel free to take that into consideration for now because in another one year it'll be. This number of 100 and there is right now all of 100 odd, it will become maybe 65, 70 next year. It's the same quarter. It will reduce to maybe 30. You know, there is nothing that we are doing. It's just the way accounting works. Sure. Actually my question was, you know, what proportion of these VSOPs are linked to a particular, you know, market price or market cap and, you know, especially those which are given to senior management and, you know, won't be exercised till you reach the maximum market cap or price. That would be roughly 55%-60% of the approved shareholder, as per the approved 21 scheme. 9.80. You can assume about if you have the number of shares, INR 1.1-1.2 crores. Somewhere in that range. Yeah. 1.2. Got it. That's clarified. Thank you very much. you can separate between Perfect. Perfect. Thanks, then. Thank you very much. Thank you. The next question is from the line of Dipanjan Ghosh from Citi. Please go ahead. Hi. Good evening. Congratulations on a good set of numbers. A few questions from my side. On your PoSP business, you have mentioned that 12% is non-motor. I would assume that you have some renewal commissions to get from the manufacturer in this portion of the business. Just wanted to understand the pass through that you do to the PoSP partner on the renewal side. Is that renegotiated every year or does that get pre-decided at the start? Second on Paisabazaar, your renewal revenue seems to have been in some correction. I just want to get some understanding of how the products are structured and what are the controls out there. Lastly, two derivative questions. If you can give me the current pass through rate on the PoSP and the PoSP premium number I missed at the start of the call. First I'll take the PoSP part and then give it to Naveen for Paisa. On the PoSP part, we said that PoSP has done about INR 500 crores of premium in this quarter. We obviously do not discuss the pass through rate of PoSP publicly. In terms of the non-motor business, it's significantly more than 12%, so I'm not sure where the 12% number came. It's much more than that, more than double of that number actually. I think your question was. Sorry, what was the other question? I don't think you want to disclose. I'm sure you don't want to disclose it, yeah. What is your renewal structure? On the renewal, I just want to explain one thing to you, that we protect the renewal. That means if an agent has given us the business, whether the person renews directly from us or comes back through the agent, we protect the renewal. What we pay them, et cetera, et cetera, those are all commercial considerations, and I'm sure you would appreciate best not to call it publicly. Naveen, you also be careful how much you want to discuss publicly. Other people are also learning from you. Nischint, on the trail piece, thanks for asking the question. As you can see from the presentation page 47, that this is a co-created and co-branded product is a strategy that we undertook as lending started recovering from COVID. Because we realized that as a distributor, if we had a back book revenue like lender, that'll help us greatly in times of stress or credit turn times. What happens is in a co-branded or co-created product, our revenue is upfront is of course lower. The trail is linked to, in a credit card like product, is linked to spend. We get a percent of usage on a monthly basis as a trail. As you have noticed that over the last 12 to 15 months for credit cards, but last five months in personal loans, the percentage of business on trail has increased, and that's reflecting in the increase in the trail revenue. Which also links back to the question on profitability being sustained. As we build the back book or the trail revenue that flows at about 90% margin, and hence it adds to the overall profitability. Sure. Thanks, Naveen. Sir, so the PoSP part, I think my question was not, you know, on the numbers but, you know, on your, I understand your renewal commission is protected irrespective of where the, you know, the customer renews from. I wanted to get some sense on the pass through that you do to the PoSP in renewals. Is that renegotiated every year? I would not like to go there. Honestly, if I were to be very honest with you, I think the answer is not super material to our overall results. You know, it's really more a thing to give the agent confidence that, you know, we will never ever do anything which affects their interest. That's the main thing. The rest of the stuff is not super material to the whole business. Sure. I just wanted to add one thing on Naveen's answer. I think what you have to note is Naveen was in this year, he had committed to breaking even on Paisabazaar, and he achieved that. He achieved that while building the renewal revenue. What you must appreciate is, as he builds renewal revenue, because it's multi-year revenue, that actually reduces his revenue for the current year. Because this is actually the year when he started to build it out. From a P&L perspective, it actually adversely impacts him. If he had not done this, he probably would have had maybe a few INR crores of extra revenue with the same business. That would have been. I'm just. That is very important. That is, I think, the biggest thing that, you know, you will actually invest in. Yeah. No, no. Thanks for the answers, and all the best. Thank you. The next question is from the line of Srinath V from Bellwether Capita l. Please go ahead. Hi, guys. Just wanted to understand the implication of the new tax structure in the income tax. There, there's a prevailing understanding that a large part of, you know, taxpayers will move into the new structure. What would be the impact overall on our business when 10(10D) and both life and health lose exemption, on investment broadly for us as well as for the industry, not just from a premium standpoint, but more to understand how useful was, you know, the exemptions on investment in conversion. Would lead times or conversion times get impacted, as these, you know, sorts of inward brought? Thank you. It's a very interesting question. As you know, this is really a behavioral economics question more than something that we can forecast. What I'll just share with you are some of the things that we have found out. We have found that people buying for tax reasons has become. Earlier if you asked three years ago or four years ago, why are you buying health or, you know, simply health insurance, tax would show up. Today, tax doesn't show up in the top three, four answers. It shows up in the fifth or sixth answer. In savings, yes, it will show up in the third or fourth. I think it's really hard to say today exactly what will happen. My personal view is yes, there will be some impact, definitely on the savings side. It may not be very material. I think on the health insurance side, perhaps because of COVID, I think the why you buy health insurance has become very deeply ingrained. The tax, while welcome, I think is not a huge factor on the health side. Health and term. I think health and term will be far less impacted. The protection will be far less impacted than the savings side is our guess. Rest we have to see. Yeah, we have to see. Yeah. Would it be a fair assumption to make that we would be better off compared to the agency channel because of the pull factor? Yeah. I believe, you know, one, I want to comment on this. I learned something recently. I would actually mention the person whom I learned it from. I was talking to Mr. Tapan Singhel another day, who's the CEO of Bajaj General. I said, "Sir, you don't get into all this. You know, you are always very encouraging to everybody." I was meaning a genuine praise. He said, "What we have noticed is when the industry grows, we also grow." We also are growing at 2x of the industry here. If the industry grows, we are all very symbiotic. You know, you'll be very surprised. When agency grows, we also grow. When we grow, agency also grows. Everybody grows together. If we all don't grow, then we've all got, you know, death written on our faces. You know, I wouldn't worry too much about channel one growing or channel two growing. We're all gonna grow together. You know, to me that was a great lesson. It is not either/or. The customer will buy from multiple places, and we all help each other. Thanks, guys. Have a nice day. Thank you. The next question is from the line of Arpit Shah from Stallion Asset. Please go ahead. Hello. Mr. Shah, please proceed with your question. Yeah. I just wanted to understand the contribution margins in the existing business because in the last three quarters we see the contribution margins have stayed around 45% despite additions of, let's say, the renewable revenues and the productivity that has been gaining from the offline business which is probably higher for the offline business compared to the call center business. I just wanted to understand if this profile and contribution margin is something typical for us or you think there are room, there is leverage to grow this margin going ahead. No, no. They will, they will keep growing. I think, again, you are focusing on very few quarters, and I think you will start to see something very interesting as we, as we move forward in the next few quarters. There is a lot of mixed issues here, you know, Paisabazaar growth, Paisabazaar margins. Various, various things that play into it. There may be some product changes. You know, savings grew a little faster for us in the year. Savings tends to be a little lower margin than some of our protection products. I wouldn't read too much into it. I think, you know, I would focus on the year-on-year trend, and I would stay with that. We haven't seen any. You know, you also please appreciate this is the year when we built up all the capacity, right? I think, you should start to see the advantage of that year onwards. Got it. I just wanted to understand the seasonality of the business. What is typical for% of total yearly revenues? Usually that, you know, insurance we are a little less seasonal than the rest of the industry. That's just the reality because customer somehow is a little more protection-oriented than tax-oriented. Yes, there is seasonality. December usually tends to be a good month. December and January, February, March tend to be four very good months. March tends to be a little stronger than the other months. Around Diwali usually tends to be a lean period, simply because people are spending on other things. This is a discretionary spend at the end of it. If you're buying patakas you know, you don't think about buying insurance at the same time. I think lending is much more non-seasonal from that perspective. There's a little bit connected to motor vehicles and all which sort of is a bit Diwali-oriented. December oriented people like to again, January oriented people like to buy the new models of cars, et cetera. You know, I wanna read. Yes, for us, Q4 tends to be the biggest quarter, which is why I think next quarter will be. You'll like our presentation next quarter a lot more than you liked the last few presentations. We will all get a lot of well done from you guys next quarter. I think, yeah. After that in Q1, we'll be probably 5% below that quarter, which is what happens every year. Then by Q2, Q3, you catch up with Q4 and then you hit the ball out of the court in Q4. Okay. Can you explain how would we reach the breakeven in the Q4 quarter? Basically, let's say, I think we'll be adding around INR 700 crores of revenue in Q4 and behind 45% contribution margin- What is our EBITDA loss this quarter? It is about INR 22 crores. Right. INR 28 crores. Our new initiatives is going to be less loss. How do I tell you? I don't even know what I'm all allowed to say. In January, our core business has made enough revenue, enough profit to cover the loss of the entire quarter of the new initiatives. You know, we are very, very happy about the situation we are in. I think my CFO is telling me I can't speak more, just don't worry. Got it. Got it. Last question, can you, let's say, guide us. I'll share one more little thing with you. We had a plan for the core business profit. It seems like we'll get 1.5x of that for the quarter. I'm not even telling you what our plan was. I am not telling you anything, but I'm telling you what the internal story is and why I'm sitting very confidently. It's not even a question, yeah. Next quarter will be fine. Got it. Can you explain the quality of recurring revenues in the presentation compared to recurring revenue? Because, half year of last year numbers talking about this recurring revenues in the present. Of course, you know, the business on this recurring part was only started a year or a year and a half, maybe about a year ago. The thinking was very clear. You would sacrifice some upfront revenue. You know, today if a person takes a credit card and does not use it, we would still get paid then. If a person takes a credit card and uses it quite a bit or the same thing on a loan, if a person takes the loan and kind of pays back very quickly or takes four years to pay back, there are different, you know, implications for the bank or the NBFC, but there was no implication for us. We've in a way got some skin in the game on the usage part. The good thing, I would say the same thing from an investor's perspective or from whatever perspective, whoever is an investor here, is that actually the upfront revenue is reduced. The first year, I think the hit of it, and that's what I explained, that with that hit in a year when Naveen was to be given also, I think it's a very commendable thing. It is the right thing for the organization because he could have easily not done this and shown a higher revenue. Benefit of this will come in the next year because these renewal revenues will obviously become larger by then. You can see every month, quarter-on-quarter, this number is growing very fast. We're showing the percentage of disbursements and cards showing the revenue. Sorry. Sorry, what is that? Yeah. No, you can see that in, on chart 47, what Yashish was mentioning, that we are showing the percent of disbursements and card issues and how that's growing, percent on trail revenue. Does that answer your question? Yes. Just one last question. I think in the last call we had carried around INR 6,000 crore PAT at FY 2027. Given the numbers that we have seen in this quarter, that number looks pretty much easily achievable for FY 2027. Would you like to revise that guidance to let's say INR 16,000 crores? We only say things which are easily achievable. You know, please understand, when I say something, my reputation is on the line on that. I'm not worried about whether share price is a bit right. Yashish and we have the reputation on the line more than even Policybazaar's reputation. If I'm making a INR 1,000 crore number, I will not say it unless I'm very sure it's gonna happen. Unless if, of course, if we get nuke or something, that's a different issue altogether. Okay. Given your peer who is just done a buyback, are we looking at a buyback? We don't talk about anybody. Please don't get us into those thinkings. We already see having a roadmap of INR 12,000 crore of profitability. Beyond that, we have, as we said, there is no specific answer on that yet. We have not even considered it at any level. Got it. Got it. Thank you so much. Best of luck. Thank you. Ladies and gentlemen, we'll take the last question from line of Prateek Poddar from Nippon India Mutual Fund. Please go ahead. Yeah. I just wanted to check with you if you could give a breakup of your premium. I mean, the existing insurance business premium which you called out that the split was 50/50 between you and Tinable, 50/50 between health, savings and. Hello? We don't give those yet, yeah. We've told you guys we will probably start doing it from next year, but this so far we don't give it out. Okay. If you have any specific questions, you know, Prateek is the right person. Sure. Sure. Sure. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Yashish Dahiya for closing comments. Thank you very much everybody for attending. I know it was a bit late for some people on a Friday evening or Friday morning, whatever your local time is. Thank you very much for attending and, yeah, we'll speak to you again after three, four months and hopefully have a much more stronger update. Thank you. Thank you.