Good evening, a very warm welcome to PB Fintech Limited earnings call for Quarter Three, Financial Year 2023, 2024. Today, we have with us Mr. Yashish Dahiya, Chairman and CEO of PB Fintech, Mr. Alok Bansal, Executive Vice Chairman, PB Fintech, Mr. Sarbvir Singh, Joint Group CEO, PB Fintech, Mr. Naveen Kukreja, Co-founder and CEO, Paisabazaar, Mr. Mandeep Mehta, Group CFO, PB Fintech, and I'm Rasleen. I will now request Yashish Dahiya for the introductory address. Thank you very much, Rasleen. Before I start, I know this is an investor communication, but I just wanted to take 30 seconds to really thank our team for in every area doing much better than the market is, much better than the industry is. I obviously want to thank the current and the past team, because obviously everything is building on top of of works. As I interact with our team, I cannot but feel the sincerity, the patience and the trust that each member demonstrates in building the business every day. Thank you very much. Coming to the results, we had aimed for a full year PAT breakeven in the financial year 2024, and very happy to announce that we've already achieved that within the first three quarters, with the strongest quarter yet to follow. This quarter, we were at a PAT of INR 37 crores+, which is a 4% margin, up from a loss of INR 87 crores. That's a 124-125 crore delta. For the year, that makes us PAT positive and about INR 4 crores of PAT, a swing of INR 482 crores from last year. PAT for the same period with seasonally strongest quarter yet to come. So our revenue for Q3 was INR 871 crores. Now, for the core business marketplaces, the online marketplaces, Policybazaar and Paisabazaar, which we refer to as core businesses, our growth is 39%, and we've grown to INR 593 crores in revenue. Our adjusted EBITDA has improved by INR 50 crores for 2024. This is very much in line with the guidance that we provided just after IPO, that look, our adjusted EBITDA will keep growing at INR 150- INR 200 per year every year. For the last six to seven quarters now, we have every quarter grown by more than INR 50 crores. So that means overall, the adjusted EBITDA is growing at more than INR 200 crores every year a nd that happened on the back of revenue growth. So just to shift on that, as I look at, for the first nine months, the revenue growth of, you know, a business that would be about INR 500 crore, of which almost INR 170 crore would have flown all the way down to the adjusted EBITDA line. I think that's the strength of the business that, you know, with scale, there is operating leverage a nd there's a renewal piece with obviously much higher margins. We are very pleased that our health and term insurance businesses, which are the bulk of the long-term value, we've witnessed a 44% YOY growth. I just wanted to clarify, within this, health is almost 20% higher than this, so health has shown a much higher growth than term. Our total insurance premium for the quarter was INR 4,261 crore, which is now at a INR 17,000 crore ARR. It's starting to give us good scale. If some of the people have recollected, our view was that, when the year 2027 hits, we should be about INR 35,000 crore. At that time, when we did it, we were much smaller, so it looked like a large number, but now it's starting to look very real. Our growth over the last two years is about 2.5x. Over the next three years, getting to 2x does not seem like a very big task. Out of INR 593 crore of revenue for the core online business, credit-linked revenue is INR 145 crore. Our renewal or trail revenue ARR is now INR 454 crore, up from INR 317 crore, and this is the part that operates at a very high margin, and obviously contributes towards adjusted EBITDA. We continue to improve our customer onboarding and claim support services and maintain insurance CSAT of 88%. While we disclose 88% and whatever, we actually measure this in decimals, and do appreciate it's very difficult to change this in decimals because, you know, it's now from 88.4%- 88.7%, et cetera, et cetera. Credit business growth has sustained well, however, we are expecting a 10% lower growth rate. So please appreciate, right? If we were expecting 40%, we would expect 30% growth in this business for perhaps the next quarter. We expect it to come back to normal growth after that. This is, you know, to do with the unsecured credit part, where RBI has put in some guidances, et cetera. Credit business has been Adjusted EBITDA positive since December 2022. Now, I just wanted to clarify right here, right? We don't have any credit risk issue, or we don't have any issues of that sort. However, suppliers have tightened their logics, and getting new suppliers in their place does take a bit of time. That's why the 10% growth delta. We are now at an ARR of INR 14,000 crore disbursement and about INR 560,000 crore issuance on an annualized basis. Total credit consumer base is now 41 million. This accounts for 75% of the sales, because it's mostly on, you know, communication with these 41 million people... 75% of cards have been processed end-to-end digitally. We continue to strengthen our leadership. If you recollect, after IPO, we really started investing in our new initiatives. We continue to strengthen our leadership there. Our new initiatives are now breakeven on a contribution basis for the last quarter. PB Partners, our agent aggregation platform, which is the bulk of new initiatives, continues to lead the market in scale and efficiency of operations. We have moved the business increasingly towards smaller and higher quality advisors, with 56% jump in number of advisors across using our platform. It has the highest proportion of non-motor business and is present in more than 17,000 PIN codes across the country, which is more than 90% of the PIN codes in the country. We continue to see improving efficiencies in the business. In fact, I'm very confident we will see profitability in that business in the you know, nearer term. However, in the same breath, I would say that profitability or loss will always remain. Going forward, what we will realize is the core business profitability ability will totally dwarf both the profits and loss of the new initiatives. Our UAE premiums have grown at 2.4x. Happy to take questions now. Thank you, Yashish. Please use the raise hand feature to share your question. You will then be requested to unmute yourselves. We'll wait for a minute for questions to queue. We'll take the first question from Sachin. Thanks, Yashish. Good day, everyone, and congratulations for a good set of numbers. I have three questions. First question is on your cost. Just wanted to understand, should we look at this cost as a new normal, or is there some one-off? I'm generally asking from, selling and marketing expenses, which are down on a QOQ and YOY basis, and so are your employee expenses. I presume it's a factor of ESOPs going down, so that's where your employee expenses have gone down. Anything else which is largely, reducing the total employee benefit expense? There should be nothing abnormal in that. Our headcount actually increased by about 535 people. Our salary increased by about INR 10.828 crore. Our ESOP expenses are just as scheduled. We were overcharged near IPO, which is why everybody beat us up. A s the years go by, you guys will start asking us this question more and more, that your ESOP charges are too low, because they will actually become too low. But that's just the reality of life, you know? T he ESOP charges will just keep coming down every year because that's just the schedule, right? So the schedule took about 45% of the CAC cost of five years in the first year, then about 25%, and then about 15%, and finally it'll become about 4%, by the fifth year. 9% and 4%. E very Q2 - Q3 is when this change happens, which is why I've been saying since pretty much when we did IPO, that we will break even in Q3, because we always knew this charge is going down. So yeah, that's it's a pretty straightforward thing. Got it, Yashish. Ad and promo expenses are here expected to stay- Oh, no, nothing, nothing. See, I would say, you know, we don't decide on our ad and promotion expenses in any way except what the market expects at that particular time, but nothing, nothing abnormal about them. No, Sachin, I'll just add that you should look at our ad and marketing plus other expenses together, for a fair comparison versus last year. So if you do it that way, then you'll find that the delta is not as much. But still, you know, overall, EBITDA or adjusted EBITDA, you see a big delta, right? At the end of the day, your total costs have also- So I will, I will make a statement there. If anything, our results, compared to our actual performance, the way I read it, is a bit depressed, b ecause when you look at present value results, which is how the management looks at our. We've always looked at our accounts on present value. Just to explain to everyone, present value looks at renewals value and fresh business value, and then evaluating our business, versus current year, you know, stat results. So the stat results, whenever we do more health business, and as I said, health has grown at least 20% more than our normal growth for the rest of the business. That puts a negative delta in our contribution. Simply because in the first year health, we make zero contribution, while overall our business obviously has 45% contribution. So the more health we do in the first year, our contribution goes down. So for the last two quarters, we have been. From a stat results perspective, it has been hurting us. So if, if it was, if you normalize this, probably we would have had a 2% higher margin and a 2% of revenue as a higher EBITDA, is what I would say. Thank you. But, yeah, it's okay. Again, next year we'll get the benefit of renewals, so it's fine. Thank you. It's just pretty clear on that. My second question is, when I look at your core Policybazaar business, and generally look at how insurance business has grown on a QOQ basis, clearly your fresh business has grown much faster than what industry has shown growth. So any color you could give in terms of, is it health? Is it, is it ULIP, something specific which is growing better as compared to industry? I'll take that, Sachin. This is Sarbvir. Each of our businesses, I believe, has grown faster than the industry, and I think we've consistently maintained that that is our goal also. I think there are different, obviously, reasons, but if I were to call out some common themes, I think one is the fact that our segmentation is every quarter gets stronger, so we are able to bring the right product for the right customer, and this is true in term savings and health. T he second thing I think, which is there, is that as our customer experience has been improving, and especially on the claim side, I think there is an element of, I would say greater credibility that is getting established Policybazaar, and that is helping our conversion. F inally, the quality of our business that we source because of the declaration, because of the risk control, et cetera, that we have, allows us again to, you know, produce better products and process, because in insurance, process also matters. So I think these are the three factors that are leading to, you know, growth being strong. Thank you, Sarbvir. Very, very clear. My last question is on Paisabazaar. Yashish, you know, well taken, your comments on, in opening remarks with suppliers are tighten, and we could see a 10% slower growth delta. But the key question is, you know, how do you guys look at it? I mean, is there something where you guys need to think that they're structurally different in the business now, what it was few years back? Given how, let's say, Policybazaar has scaled up in a meaningful manner, any general thoughts in terms of if you want to look to revisit some of the parts of the business from the next 5- 10 years perspective? No, absolutely. So, I will actually take that before Naveen takes that. So because me and Naveen have been discussing this for the last few months now. While we believe that the current business is strong and will continue to be strong, but since you mentioned from a five-year perspective, yes, we are having a very strong review of strategy and figuring out which way do we take it a nd hopefully, we will have more clarity on that as we proceed. But, Naveen? Yeah. Sachin, on the, I think what we are doing currently, and which is essentially, credit, and within that, unsecured is a dominant share and credit cards, I don't see a fundamental issue at all. If you, if you look at any industry numbers, right, the level of under-penetration, the household debt to GDP, and then you look at the entire financial sector in terms of where is the margin in the industry, whether it's the banks or the NBFC, that's in the unsecured and credit cards, and there is reasonably good demand. There's been, of course, a recent guidance by RBI, which has led to review of portfolio by various organizations, and we do see a, like Yashish mentioned, we do see a short-term recalibration, which basically means a slightly lower growth, versus what we would have targeted. So we were, for example, growing at about high 40s in the first half of the year, early 50s. We are still at about 36%, by- Just to clarify one point here, because it may be a misunderstanding. The smell we are picking up from our partners is it has nothing to do with the quality of portfolio than to do with complying with the fact that a regulator is saying there is an issue, so relook at everything. Yeah. Yeah. That is what is more driving the action- Yeah. rather than anything else. Absolutely. So what we do expect is that once the a little bit of recalibration happens in one or two quarters, things will come back. Of course, there's a pricing increase which might sustain because the risk weights have increased. But we've seen over a period of time that given the demand/supply gap still and under-penetration, the demand is fairly price inelastic to a certain extent. So don't see any concern from a long-term growth perspective on the strategy right now. We are looking at other areas, like Yashish mentioned. It's a little early to talk about other areas before we kind of finalize our strategy on expansion. Yeah. There are multiple directions we are thinking in, in terms of do we do this, do we do this? What has... We are obviously, we are, we are behaving like owners, right? So we are not just behaving like management. We are, we are behaving like owners, so we are, we are calibrating the risk/reward and seeing what is the right thing for us to do, where we will achieve success as well. So, yeah. Got it. Thanks, Naveen and Yashish. We'll wait for further updates as and how you guys provide. Thank you so much. Thank you. Thank you, Sachin. We'll take the next question from Sachin Dixit, JM Financial. Thanks, Yashish. Congrats on great set of results, Yashish and team, and this journey to path profitability, I think, has been due for some time, and you reached there. Coming to question, so while I do understand that margin in new business, or sorry, the core business, would have been a bit tepid, casting that health insurance accounted for higher mix. What drove the sharp improvement in, in new initiatives breaking even, right? It, it was at 9% loss, last quarter, and what drove that shift? We've been improving continuously. Yeah, I think, Sachin, if I could take that. See, in our new initiative also, we have been explaining every quarter that we have been improving the overall, you know, economics of the business a nd one of the things that we've called out is that we are moving more and more towards retail agents. So having smaller agents, you know, who do smaller amount of business, but having more of them. So if you see this quarter, the growth in number of agents is at 56%, which is, you know, a fairly robust number. S econdly, as this shift has, you know, transpired, we have now reached a point where, you know, the business is generating contribution and, you know, slowly is going to start covering its costs as well. So that is the main reason. It's a in each of our businesses. I would say that we have been on a path, and that path, you know, continues every quarter and kind of, you know, is getting us there. So there's no, like, a sudden jump or sudden change in anything. It's a, you know, slow and steady progress towards having a robust retail-driven agent mix. I think when you shift your mix from, let's say, large partners to agents, it's expensive because you need to deploy people, you need to spend more in reaching out to people. You need to do all of that. But once you do it very rapidly, you see the benefits as well. So parts of it are cycles. So maybe last quarter, what you saw was we had done the right work, but the result was the bad result. Effectively, relatively, I'm saying, right? So internally, in our reviews, we were actually very happy with the performance of the company, of the new initiatives. But externally, when you look at the results, you may have felt it was, you know, there was not a significant improvement in the margin in the last two quarters, I would say. T hen you saw the improvement coming in because that, what work was done in the last quarters, the benefit of it was, has probably come through now. S ee, you guys have been hearing me. One year ago, you would not have heard me say very confidently that, "Look, you know, very confident that in this business we will make profits." Now, I am super confident. I'm not confident of the timing, but I'm super confident it's gonna be sometime in the vicinity of where we are, like, you know, few years, we're gonna see it. I have zero confidence... And probably sooner than that. So very confident of the way we are taking the business. I think the biggest reason for that, we're not trying to impress anybody. We're doing it because we generally believe it's the right thing to do. We've been taking to the retail direction, which actually has margins, which has margins, and you can—but this will never become very profitable. See, because the core business profits will, will start to now rise very rapidly. E ven 20 years from now, this business will not give a huge amount of profit. It'll give you scale. So on that, we haven't changed. Right. Yeah. I was basically asking in context of last quarter only, and you, I think you clarified that the results did not show it, but in this quarter we have seen the improvement. So coming to core, right, and, as you mentioned, right, you will get benefit of renewal in the core business a nd core business, we have seen that the contribution margins are roughly stable around this 44%, 41% for a while now. Where do you think these numbers can, like, plateau around? Can these be 50% upwards of contribution in core? Can we reach those numbers? Plateau is very far away, and I don't want to talk about plateau. If you really ask me, honestly, I think plateau is probably at least 10 years away. So that will probably give you a guidance of where we are going to head. I'll give you some data points, right? W e also, you know, we don't want to talk too much about these things at this stage. If you look at the industry, and you look at the fresh versus renewal mix of the industry, I think we are a INR 700,000 crore-INR 800,000 crore industry, of which fresh is about INR 150,000 crore industry, for everything put together, and I'm including all kinds of businesses, right? For us, the ratio is one is to one, and obviously the fresh margin is much, much higher. So, sorry, the renewal margin is much higher. So obviously we will also eventually, when our growth comes down, we will tend in that direction. Plus, we have huge amount of future efficiency that is going to come from our operations and our marketing and various other things. So I think we are very far away from a plateau. I think we've given guidance on our, you know, profit numbers till 27, et cetera. We are very confident of those. We... yeah, I think these will improve from here onwards. You're probably seeing the, perhaps the lowest margin we'll ever have on a contribution basis. Sir, just one final question, if I can squeeze in. We saw Zomato recently- I'll give you one data point to look at. Yeah. Our incremental revenue and our Adjusted EBITDA. Incremental Adjusted EBITDA is 34% of the incremental revenue. That probably gives you some indication of the minimum that we can achieve. This is while a bulk of our new revenue is also health. Like, health is a little now, right? Now, it may continue to outperform for the next three, four years. We don't know. I hope so, because that is hugely value accretive. If that does, then, you know, that does have some implications because it'll also be then outperforming at scale. So if something is outperforming at scale and has zero margins, then, which is, which is what new business of health is, then, yeah, it will have some impact, right? It'll, it'll put some pressure. Right. Right. Thanks. Just one question, in terms of ESOPs, right? As you mentioned, like, your ESOP cost is going to decline sharply. Are you thinking of any significant ESOP grant in the future, considering that Zomato recently did one, so- See, we have given a guidance. Okay. We have given a guidance on this, that you can assume our long-term ESOP cost, ESOP charge, to be about INR 100 crore, growing at maybe whatever the inflation rate is. So let's say, you know, growing at 5%-7% every year, but that is going to be our long-term ESOP cost. Today, we are still at INR 350 crore. This year we'll be at INR 350 crore. So significant reduction from where we are. INR 330 crore, it's okay, yeah. INR 350 crore, INR 330 crore, same thing. You know what I mean, right? But the point is, you know what I'm trying to say, right? INR 100 crore, INR 105 crore, don't hang me here. The point is, yeah, but basically that's the, that's the nature we are looking at, and of course management needs to be rewarded. That's why I started by thanking the management, right? We can't not reward them in the future. So of course we have to reward them, and, I think INR 100 crore is sufficient to do that reward. Obviously, Alok and me need to be rewarded much less in the future. We, we were rewarded for the past, and we don't need to be rewarded as much in the future. Naveen also, because part of it was past, part of it is future. So the future, everybody will get rewarded in a very shared manner. I think that should be about INR 100 crores a year. That's, that sounds about right. We have done a lot of mathematics that looks about right. At the right time, we'll let you know also, but there is nothing wrong in letting you know, right? That's basically what it's gonna be. Fair enough. Thanks so much. Yeah. Thank you. So, do you remember in that INR 330 crore, me, me, me and Alok, ours might be INR 160 crore or something of that sort. I don't know, right? So that automatically actually makes the real number, you know, INR 120 crore, whatever, already. So it's not, it's not very far off from where we are right now. So this year is actually a pretty, pretty good indicator of what our ESOP charges in the long term will actually be b ecause this is that median year in those five years where we are seeing what the average should be, if you cut out the founders. There's a big difference here in terms of the exchange value of those shares. You know, in the past, we had given all the shares at the par value. Going forward, it will always be linked to market price. But I'm talking about the cost. Yeah. that the company will bear there. So, yeah. Understood. Yeah, sure. Thanks. Sorry, just to clarify on that, since Alok... And I don't want any confusion whatsoever. I want to be a very straightforward communicator. There's a Black-Scholes valuation to issuing stocks at par, and when I'm talking about INR 100 crore, I'm talking about the Black-Scholes valuation of those stocks, and that's the real valuation, so that's okay. It's not a big deal. Got it. Yeah, thanks. Thank you, Sachin. We'll take the next question from Nidhesh Jain, Investec. Hello. Hi, Nidhesh. Hi, Nidhesh. Yeah. Actually, I have a question. Thanks for the opportunity. The question is, Go ahead. Go ahead, Nidhesh. Please, Nidhesh. Yeah. Yep. So, the first question is on capital allocation. How do we think about returning capital back to shareholders, given that we have turned profitable and we are already generating a significant amount of cash on a yearly basis? We've actually started to think about it. We don't have any decisions yet. But yes, more and more conversations. We should hear something by the end of this year, or? I have no clue. You will hear once we've decided. We haven't decided, and we don't have a timeframe on deciding. Sure. Secondly, if you can share the EBITDA margins of the credit business for the quarter. 8%. 8%. Yeah, I know it. Yeah, I know it. The policy was either at 14%, this is at 8%. The insurance part is at 14%. Mandeep is holding his head. It's at 14% and 8%. Sure. Ju st to clarify, the Paisabazaar business, we are still saying that will, should grow at 30% YOY in Q4 and next year? Naveen? Yes, sir. C redit card business will grow at 30% YOY, c redit business. Credit business. Credit business. Yeah, so- More than that, yeah. If you, the industry, I, in my estimate, and again, a lot of external estimates also, is expected to grow anywhere between 13%-16%, from a long-term perspective, next five years, a nd we have, in the past, grown and always maintained that we, as a marketplace, who is totally digital, expect to grow or aim to grow at between 2x and 3x of the industry. So at 30%-40%, depending on macro, sounds about right. I would honestly be disappointed if we are less than 40%, but I think we'll be at around 40%, but let's see. Yeah. Sure. Sure. Thank you. That's it from my side. Thank you, Nidhesh. We'll take the next question from Dipanjan Ghosh, Citi. Hi, Dipanjan. We'll just move on because- Yeah, I, Chair, we'll take the next question from you. Yeah. Yeah. Okay, thank you. Thanks for the opportunity and congratulations on a good set of numbers. Sir, I have two questions. First is just data keeping. Can you help us with POSP premium, Dubai premium, which I believe you've said is 2.4x YOY, corporate premium, and the ESOP charge for the quarter? M y second question is, sir, there is a current discussion in the insurance sector about this new regulation on surrender value, and there are multiple things going on. One of the things that we've picked up is the ICICI Pru Life launched a new product, an annuity product, where they are giving very high surrender, 100% refund, but they've made the commissions on a trail basis. So now that two of the most important products of this industry are undergoing some sort of structural changes, which may impact commissions also to some extent. So any view on this that will be helpful for us to understand? So first of all, on the numbers, POSP is at INR 800 crore, Dubai is INR 194 crore, corporate's doing about INR 300 odd crore. What else did you want to know? You want to know the ESOP charge? ESOP. ESOP. That's published, I think. INR 65 crore. INR 65 crore. I think Sarbvir should answer the question on the surrender value, et cetera, but I will make one little statement before Sarbvir comes in. See, we have been asking the industry for a long, long time about having a long-term payout mechanisms, which is what you are talking about, you know, trail-based, et cetera, et cetera, AUM-linked payouts, et cetera, and we very much welcome that. We almost sell... You know, there are two types of products. We sell one type, which is far more consumer-centric. S o these are industry things I don't think we need to comment on, and there's a lot of industry discussions that have bigger implications for other channels than for us... but on the whole, I think we should turn out quite okay. Sorry. No, no, of course. So just the corporate number is INR 365 crore for this quarter. On the surrender values, I think as Yashish said correctly, we, Policybazaar always focuses on customer-centric products. So that's why if you see our ULIP mix is very high. We have been selling deferred annuities for a while. We are selling this GIFT Pro product. This is something that we totally believe makes sense for the customer, and we are very happy to be paid on a trail basis, because it makes sense if we are, you know, if the customer continues, if the persistency is high, then we get paid more, and I think that's exactly what we want. We want our quality of business should be rewarded over a period of time and, you know, rather than having to just talk about first year. So we are very much in sync with this change. The rest, I think, is an industry issue, which I think is a complex issue, I would just say, and I think I'm sure the industry is working towards it. Nothing has happened yet, so I just want to clarify on the surrender value, nothing has happened yet. It's a discussion point, and, but I feel that we are on the right side of it. Got it, sir. So my question primarily was around the ICICI Pru product, which is going to be on a trail basis. Are you suggesting that you already are selling that product from your website? Of course, of course, yes. Yes, absolutely. We, we are already selling it and, you know, we, we love that product. Got it, sir. Those will be my two questions. Thank you so much. This is useful. Thank you. We'll take the next question from Madhukar from Nuvama. Hi, congratulations on a good set of numbers. I have a couple of questions. First, on the data keeping part, have you spelled out the renewal premium for the quarter and for nine months b ecause, maybe I've missed it? Renewal premiums for the nine months are about INR 5,900 and INR 4,700. So INR 5,900 new, INR 4,700, INR 4,800 renewal. INR 5,900 and... so basically almost INR 6,000 new and INR 4,800 renewals. For the quarter, it is about INR 3,400 and about INR 1,900. Right. It's in that range. Yeah. Yes, yes. INR 2,400, sorry, INR 2,000, not 34. Did I say INR 3,400? Yeah, INR 2,400 and INR 1,900. Yeah. That's it. I wish it was INR 3,400, it's INR 2,400. Yeah. I n your opening remarks, you had also given the credit business revenue. Was that INR 144 crore? If INR 144.5 crore. INR 144.5 crore. INR 145 crore. INR 145 crore. Okay. Now, coming to, you know, when I look at the ARR, for the insurance business on a QOQ basis, it's at about INR 359 crore versus, I think, what, INR 345 crore last quarter. So, my sense is that this number should have probably grown faster. So are we seeing some stagnation or some higher drop? No, no, I'll explain. We have... you know, at some level, we'll either have to take all the analysts through a deep session on this or or you'll have to just trust us on this. So we've done the analysis. See, there are multi-year policies whose proportion keeps changing from year to year. L ast year was higher than this year on multi-year policies a nd the second thing is last year, our health insurance growth was low, and thus you are seeing the impact of both multi-year and the lower growth in this year. This year, the multi-year is lower than last year, and the growth is high. So next year you'll see a different outcome. I just want to clarify, and you can't look at this quarter-on-quarter, because our renewals this quarter have nothing to do with our renewals last quarter. Last year it was INR 280 crore, for insurance it's INR 359, which is lower than what would have happened if things were exactly the same, like, in the sense last year was, last year was perhaps the lowest growth year for health in the last five years. This year is probably the highest growth year for health in the last five years. So, you know, that is basically what's playing out a bit. But this year and, and there's a multi-year part, which is, it was higher last year. Got it. And- But we can... All I can assure you is we have done deep dives on this, because you're gonna appreciate, right? This is the bulk of our value, and we do deep dives on this. T hings are kosher here. I'm very happy to kind of at some point have an analyst session and take you guys through how things look. Maybe Rasleen can do that. But you know, we have done it, and we have—I've obviously spent a huge amount of time trying to understand renewals, and things look better than the past. So our renewal rates are actually better than they've ever been. Got it. You know, we get the Adjusted EBITDA margin, you know, on the credit business, like you've just given that, a nd if 85% is the margin on the renewal revenue, then if I just do some rough calculation, it suggests that the new business that we write, the Adjusted EBITDA margins would be sort of negative even on the core platform business. Am I right or am I going wrong with this? No, no, you, you would be right, but you cannot look at it that way. In health, the new business is only 20% of the net present value of the- Largely because of health, that means. Yeah, yeah. So health makes up... No, no, but even in the other products, there is a 15% extra that comes because of renewal business, right? So I don't think you can go that way.... In health, I'm telling you, in the, on the new business, if you look at it, we'll have an, we'll have a significantly negative EBITDA margin. At the contribution itself, it is zero, right? Right. So by the time you get to EBITDA, the EBITDA has additional costs, right? So you cannot look at it that way. A lot of people have tried to look at it that way. That's like looking at the bogies running without the engine. You're saying if the engine runs alone, it'll make a loss. Yeah, of course it'll make a loss, because there'll be no bogies it is carrying. But the engine is supposed to carry the bogies. They are, they are a parcel of it. The bogies can't arrive without the engine. I cannot get renewal business without fresh business, yeah. So how-- You realize my effort in doing the renewals business is negligible, but I cannot get it without doing the fresh business, and that is the biggest issue we've had with NPV for the last 15 years. I've been explaining to even our pre-IPO investors every time. They said that health business is a loss-making business, because obviously they used to look at the fresh business and they say, "Why are you doing this business?" You, you've got to be nuts, right? Everybody is very professional in the whole thing, yeah. So obviously it's a, it's a fairly profitable business, but it comes from adding up the renewals. The NPV, at an NPV basis, you'll get about 2.7x. Yeah. I get that. I get that, Yashish. Just wanted to get, like, this is primarily because of the health business. The- T he second thing is, you're looking at it at the EBITDA level. Yeah. You're not looking at the contribution. You've got to look at the contribution level. Look at the contribution. At the EBITDA level, you've got the costs of me, Sarbvir, you know, Alok, Mandeep, everybody. Yeah. Let's say if I were to look at the contribution level, then apart from the health business, are there other lines in the insurance- Motor? Motor? Which there'd be negative contribution? No, no, nothing. Sorry, or zero contribution. No, no, nothing else. Nothing else. Nothing. Only health would be, zero. Health, on a first-year basis... See, okay, so let me explain, so that this is very clear. Our NPV to direct cost in health comes out at whatever, let's say 4x, right? I'm just making that up. Let's, let's not get into the exact number. Let's say it's 4x, right? But my revenue collection divided by NPV is only 20%. So you've got 20% divided by 25%, which makes your first-year revenue divided by direct costs, 80% a nd that means we actually made a loss in the first year. That cannot be a decision-making factor, right? Yes, of course. That's pretty close to what the reality is. Got it. But that's true only in health, is what I'm saying. Yeah, of course. The other businesses, even in the first year, would be contribution positive, or- The way we look at it h ealth has a very high NPV by a first year revenue. Others do not have that significant a gap, right? Most of general insurance will be about 1.6, and life insurance is about 1.1, 1.2. But health has multiple fold. So you're absolutely right. Got it. Got it. That answers my question. Thanks a lot, and all the best. Sure. Thank you, Madhukar. We'll take the next question from Nidhesh, Investec. He might have been waiting for some time. Uh, hello. Hi, Nidhesh. Hi, hi. My question has been answered. Okay. Thank you. We'll take the next question from Varun, Kotak Securities. Hi. So I had a question regarding the, what do you call, the take rates. So if you look at the revenue, it has grown by 7% quarter-on-quarter, while premium was up 23%. Obviously, there has been some decline in take rate, but how much of this, this is because of the trail-based commission, and are there any other things that are playing out here, like higher UAE business and? Our take rates by business are largely stable. There was a mix shift. We did more savings business in Q3, so that was one of the reasons why the take rate will optically look or is lower. I shouldn't say optically, it is lower. The second thing is, within the savings business also, as you must have seen in the industry, ULIPs are doing much better than other products. F or us, ULIPs are always been a big portion of our business, and they have become bigger. So that again, has some implication for the take rate. So the main reason is the fact that savings has done well, and within savings also we've sold more ULIPs. So that is the main reason. Other than that, every other line is the same in terms of take rate versus last year and last quarter. Our take rate don't change. Our take rates don't change too much, but in the savings business, year-over-year, not quarter-over-quarter, but year-over-year, there is a higher percentage of ULIPs. The second part is on the quarter-over-quarter. In the first half of the year, we were growing, our savings were growing slower. In the second half, half of the year, the savings seems to be growing much faster. Okay. W ith regard to the, what do you call, competitors, so Bima, I guess, is not going any, that much progress, but recently there's been some news about ONDC starting to distribute insurance products. Do you see any competition increasing on that time? We welcome, you know, all government efforts to increase insurance penetration, and we support all of them. I think our job is not to just grow Policybazaar. Our main mission is to grow insurance in the country, and I think all these efforts by the government expand insurance in the country, and we are very, very supportive of them. Yeah, I think it's just that simple a nd we would like to see them all succeed. Thanks. Thank you, Varun. We'll take the next question from Rishi, IIFL. Yeah. Can you guys hear me? Yeah. Yeah, Rishi. Great. Thank you for the opportunity. Just one question firstly on the POSP business, how has the economics changed in it over the past, say, four to six quarters, in the sense, especially on the payout side, that we end up paying to the agents versus what we are able to get from the insurance companies a nd has the change in regulations around EOM played any kind of role in that? Rishi, I would say that largely the dynamic is the same. I don't think the dynamic has changed a lot. There are a couple of people who are very active on the consolidator side, who've raised capital, and they are spending a lot of money on the consolidator side and, you know, trying to buy business over there. As I've told you earlier also, we are focusing on the retail side. T he economics are better. A gain, we have to invest against that because you have to deploy people, you have to deploy technology, product, et cetera. So we've been doing that, and I think this quarter the results are showing. EOM has generally helped everybody because it has made everything simpler and, clearer, and I think that has helped us also. We are a 100% compliant organization, so unlike some players in the industry, we don't do any of the other stuff. I was just thinking, right, because all of you guys look at a nd this, this message would even be to the private investors. One of the things that people can look at in order to see if the companies are doing genuine POSP or some kind of consolidation business, or some kind of large consolidator business, is just look at premium divided by employees. Nobody can do too much magic different from each other. So if you have extremely high premium per employee, that is indicative of some kind of large consolidation happening. It's just one way to look at things. I'm just trying to give some guidance, of course. But yeah, our focus is entirely in building the retail business because that's where we see the value, because it's the individual small agent who can get value from a platform in using their technology, their services, their claims assistance, et cetera, et cetera, and thus be able to share a part of his revenue with the partner. A lso for the insurance companies, it adds value. If you know you can bring 100,000, 200,000 small agents onto the platform from across the country, then they don't need to deploy as much in terms of their own branch network, their own regional network, so they can afford to pay you more. See, I think what's happening in the regulation is fixed costs and variable costs, because of EOM, are becoming blended, right? So whether you pay as commission or you pay as branch network costs, it's pretty much a cost to you. It's an expense. I think that blending implies, you know, POSP, on its efficiency, is able to do quite well, at the retail level. But if you're just buying business, that is not your business, it will just go away at some point. So I think, the retail is the right strategy, and that's what we're focusing on. Understood. W hat would be the mix today in terms of segment, motor, health, on the POSP side? I think that's a bit too much detail given the fact that all our other, you know- Competitors don't have to declare that. Yeah. We would like to, you know, keep some cards close to our chest here. Yeah. But I think we've stated in our note also that we have the highest non-motor business in the industry. Yeah, yeah. Understood. J ust lastly, this is maybe tilting towards the capital allocation. Today, one of the, you know, the financial services company, which also runs life and non-life insurance, has announced an acquisition of a TPA. Now, you know, for a business like ours, something like a TPA seems to be, I mean, prima facie seems to be something which could provide synergies. I mean, do you have any thoughts around that? See, a TPA is a word, it's a regulation, et cetera, et cetera. But if you look at it, we have a 40-odd percent stake in Visit Health. So yeah, we are—we have been there for one and a half years. Visit Health is a brilliant platform. If, say, that's there, now, you know, we'll see. So we've been doing what we've been doing. Okay. Thank you so much. Yeah. Thank you, Rishi. We'll take the next question from Shrinath, Bellwether Capital. Hi, Shri, please go ahead yourself. Hi, Yashish, am I audible? Yes, you are, Shrinath. Yeah. Just wanted to find out what's actually working for the health insurance business. Last quarter, and I'm guessing this quarter too, growth has come, really strong. The sector growth has kind of, kind of tapered off a bit and largely driven by pricing. So how is it for us? Is it, pricing-driven growth? Is it... Are we, you know, selling more unique policies a nd what is driving the growth? Is it the claims part, which we had worked on, offline, porting of policies? You know, anything you could... Or is it the upper funnel, organic upper funnel itself has taken off in terms of lead generation, or is it coming out of conversion? If you could spend some time and help us understand what's driving growth in, health insurance for us. Yeah, so first, I'll tell you what is not driving our growth. Our ticket size has not changed year-on-year, so that is not a factor in our growth at all. What is driving is actually each of the factors that you mentioned are part of the answer, I think- I was going to give you a very short answer, which is karma. But, but, I think Sarbvir said exactly that in a slightly more different way. Yeah. Yeah. I think each of the things that you said is true, top of the funnel, our conversion, the fact that we've worked on the customer experience. I think what I assume Yashish is referring to as karma is the fact that single-mindedly we are focused on the quality of the business. So at times, you know, even when conversion has gone the other way for us, because we are asking more questions, we are having a verification process, et cetera, et cetera, which sometimes in the short run can act as a brake against business. But over a period of time, it really creates this virtuous loop where better customers come to us, they find value in what we are doing, the fact that then the claims experience is better, et cetera, et cetera. So I think that virtuous circle is kicking in, and I feel that last year was an aberration because of the fact that the comparison with COVID was very tough. So that, I think, hid the fact that we had done a lot of work. See, the fact of the matter is that work doesn't happen over three months, right? Work takes, you know, many, many months and many quarters, but it shows up only after a certain period of time and I think right now that is what is happening. It's showing up, but it, it's, it's the work effort of the team over, I would say- Last two years. two years, not, not just this quarter. I can tell you what's changed in the last two years, because I was kind of running it directly two years ago, and now Sarbvir is running it directly. You were directly there because the direct person celebrates every day. You know, the indirect person celebrates once in a month, or once in a quarter. I think what we used to celebrate was volume. What we now celebrate almost every day is claims, customer service. I can see that huge change in the organization where what's really being celebrated is that, and that is what eventually karma is. What I'm also seeing is a huge focus on disclosure, which is always there. So I wouldn't say that's a last two-year story. That's a long-term story that we've had much better disclosure a nd the third part is really the on-ground you know teams that we have built over the last two years. P lease appreciate, for the last two years we've faced higher costs because of these. On the claims management side also, there's no revenue that's coming out of handling more claims. We just have cost. But all of that is eventually coming back in terms of you know better experience. When I talk to customers, they tell me two things: basically, your person is explaining it better and you know love the in-person contact at times. Second thing is, you have the 30-minute claims support, and we have seen so many occasions where you have actually intervened and got better claims experience to our customers, that both of those are starting to become real and word of mouth. W hen that starts to happen, it becomes quite nice. Just a follow-up here, Yashish. Is there any kind of numeric stuff you guys have on claims settlement? You know, what has been the rate of change of improvement, one, and, Sarbvir, what would be the delta on conversions or even if you would say, time taken for conversions by our team, the call center or the in-person, is there a significant delta even there, which is probably what's popping growth? Anything you could qualitatively give us? Yeah, that, that becomes too much detail to get into, you know, and we, we would rather stay away from that at this stage. Some of these things, Shrinath this is Alok here. Yeah. As we said earlier, take time. See, there are three things which you also mentioned. One is the brand pull that the customer is coming to us, right? Now, that doesn't happen overnight. It takes 16 years of building that brand through word of mouth, through, you know, obviously, doing what you do on a day-to-day basis. Once you get that customer coming to you, you get good disclosures. But that is just maybe 60% or 70% of the good disclosure part. You also put a huge amount of tech and data, all the stuff that we do in terms of catching any potential fraud. Now, that helps create your book in a very, very different way and a very, very high quality book for your partner, the partners who will get aligned to you. Everything is underlined by an operating layer, which is the sales layer, service layer, renewals, endorsements, claims, all put together, feet on street. Now, that again takes very, very long. There will not be a change which will happen in any quarter over last quarter, but if you look back after three years, you'll see a huge change. That is exactly what I meant, that, you know, when you look at numbers, sometimes these numbers will not even reflect year-over-year, and sometimes what is looking bad is actually good. Like last year, when we looked at the POSP business, it was looking slightly not as great, but now it's looking much better. But sometimes just the effort takes time to go through, and I think we are getting the benefit of the effort in the last 6-7 months, and it's continuing. On the health side, we're getting the benefit of our efforts over the last two years. I can clearly see that. Thanks, guys, and congratulations on the wonderful performance on such a high base on health. Fantastic stuff. Thank you. Thanks. I'll get back. Thank you. Thank you so much. Thank you so much. We'll take the next question from Harshit, Premji Invest. Hi, Harshit. Hi, hi, Yashish, congratulations on a great set of numbers. Yashish, this is on POSP itself, so just want to understand that if a particular POSP agent comes on our platform, but he leaves after, say, one year, then whatever business he did in that one year, that will still be on our books. So in the sense that, if it's a motor business, then I'm not sure, renewal revenue is an advantage, but in all other businesses, we'll have that renewal advantage for- Let us be- year, one-year contract. Let us be very, very clear. No, just one second. We want to be crystal clear on this, have no doubt whatsoever. In the POSP, we are a tech provider. We are not a commission maker. The business belongs to the agent. It is not our business. Us trying to call it our business is not right. It is their business. We get a fee for our service, which is the convenience we are providing to the agent, and the distribution volume we are providing to the supplier may also, because it's... So for the supplier, it's compared with handling agency plus branch network, regional network, regional management, management network, et cetera, et cetera, and the effort that goes into that, right? For the agent, it is compared with what benefit we... But this thing that you can get more on fresh and less on renewals and all, no, that is n ot true, and no agent will be stupid to give you their business. See, in insurance, people have been doing this business, and it's very precious to do this business. It's very. It takes a lot of effort. So nobody's going to give you a health business by taking, let's say, let's say our commission rate is 19%. Nobody's going to give you a health business for 19% and forget about renewals. T hey'll come to your house and take that money in, that's obvious. Whether they are with you or without you. I don't think that is something that- No, that's- Yeah. That's true, Yash. The reason I asked this was to ensure that is there a way to improve the stickiness of that retail agent which we are sourcing right now b ecause if, for example, in a business like health, if it is more that the code in which the business has been registered is through PB Corporate. I'm just trying the code, PB Partners, just the code in which the business is registered. So, and he knows that he has done a lot of business in the first year, second year, then he would be more willing to stay with us if that is a clause. So just from that perspective, to ensure there are stickiness. There are schemes, et cetera, you would run, which is very akin to running agency. I think the point is very clear, that you have to retain the agent. As Yashish explained, the customer is not our customer, but the agent is our customer. Exactly. We have to retain the agent, and the way you retain the agent is by providing platform, proper timely payout, fair and timely payout. So these are the three things which make an agent stick to you. A s Mandeep is saying, that currently our retention is 76%. So that shows that people are, you know, valuing our platform, and they are, you know, very- We are very early in that business. Very early. It's only, it's only our second year, right? Right. It's very, very early for us. Got it. Got it. Fair point. I think one thing you repeated this number, if you can just tell me again, the new and renewal premium for this quarter. Sorry to just ask again. INR 2,418.63. Okay. INR 2,418.63. Thanks. Thanks a lot. Thank you, Harshit. We'll take the next question from Puneet. We'll try to be shorter in our answers now, yeah, because I know there are quite a few people waiting and... Okay. Hi, Puneet. Yeah. Hi, am I audible? Yeah. Yeah. So just two questions. One is a data keeping question: What were the Paisabazaar revenues this quarter? INR 145 crore. Credit. That's correct. Credit revenue. Credit revenue, not Paisabazaar revenue. Yeah, credit revenue. Yeah, yeah, got it. Credit revenue. That's right. T he second part, on the... we have seen costs come down. I'm sorry, I missed the opening remarks. Could you just explain, like, do we expect these expenses to be the new normal? Your advertising and marketing expenses have come down, so- Yeah, we just... Puneet, we just answered this question. Yeah, in the sake of time, we will take one new question, just hear the recording. We've just given this answer 15-20 minutes ago. Next, please. Thank you. Thank you. Hi. We'll take the next question from Rahul. Rahul, please unmute yourself. Hello, is my line audible? Yes, please. Yes, Rahul. Yeah. Hi, hi, this question is for Yashish and Alok. You know, you have delivered similar or better in last four quarter, the way you've been guiding and you've been delivering time. So, congratulations for a very strong execution. What I'm trying to understand, where your incremental bandwidth in the last six months or maybe in the near future would go? Is it towards any newer initiative that you may expand into, o r is it continue to do the execution side of it, or more in terms of how you would increase your technology? Maybe you'd know, reducing the call center guys with chat or anything like that. So where are you spending most of your time now? Yeah, I don't think the team requires us to get into whether you know we are increasing the efficiency of our call center, et cetera, et cetera. We have quite a interesting business mix and a lot of strategic things that we need to keep managing. So yes, we continue to be active managers there, and we also continue to expand into new opportunities. I think you also know we have things going on in terms of account aggregation. You know, we are looking at the reinsurance brokerage. We are looking at you know... There are a few other things I'm not allowed to announce yet, because we haven't announced them yet, or we haven't acted on them, or we don't have board approval yet. But we're looking at, let's say, payment aggregation services. We're looking at all these. We're looking at lots of services, and so, yeah, when you see those, things coming, there are people like us also, like, you know, yeah, we do make it a point, we earn our living. So yeah, that's really what it is, yeah. Otherwise, we have an amazing set, amazing team. Since Sarbvir has come in, my Policybazaar people whom I used to manage directly tell me: "We are so happy Sarbvir is coming. He's a much better manager than you are, you were." So, that area I've been thrown out of, and I'm very happy with that because he's a friend of mine, right? Sarbvir is a friend of mine. He was my senior in IIT, and he's been my friend for the last, whatever, 30 years, more than 30 years. So yeah, I'm very happy and, you know, he's somebody I looked up to. So I'm very happy, right? But there are things we are doing. Don't... I wouldn't worry about that yet. Yeah, yeah, yeah, I'm sure they're doing an excellent job. Just one more question. I think you answered in a different way on the capital allocation part. I know that you would share the thought at the right moment, but isn't it a good idea to at least look forward to, you know, do a buyback, at least to an extent? We may have plans to dilute over a period of time, so that at least our base remains intact, because you just said every year there would be an ESOP charge because you would be continuously awarding that to your employee. So is that something which is in your mind or you should consider at some point? We have a pretty clear this thing in our mind. Yeah, I think we do not need so much cash. At some point it will get returned, there is no doubt about it. But when it's appropriate, we'll announce it and we are not very acquisitive, so it's very unlikely that we're gonna make acquisitions. But then again, you know, we might change our mind. So we are pretty open-minded people, so we'll see a nd we'll of course keep updating you. It's an opportunity that we have that we have the amount of capital that we have, and we have the position we have, and more importantly, we have the team we have a nd I think we'll see. The reason I mention team is because the team also means opportunities. So let's see, let's see. I don't want to open our cards out yet. A quarter of PAT per day is a very good start, but eventually we are focused on delivering INR 1,000 crore in FY 2027. So let's get there, and then we'll see. Yeah, and we will get there, obviously. Just like we got here, we'll get there as well. I think it's a, it's a very straightforward business, so no doubts there, but I think, yeah, that's- So Alok, in a way, in a way, as you said, that INR 1,000 crore, is it like we should not ask this question till that point? Is that a kind of a hint there? No, no, see, there's nothing to hide, but, you know, we are very clear that let's focus on what is most important for us. From the business perspective, scale, growth, and profitability have been the focus area, and we have already committed to the market that we want to deliver INR 1,000 crore PAT in FY 2027. You know, once you deliver those things, a lot of things become very easy to explain, but it's a still evolving business. Even though we have been around for 16 years, the business is still evolving in multiple ways. We have never been crazy step on capital. We don't expect that behavior to change in the company. But yes, if there's a good opportunity, why not? But whatever happens, we will come back to investors and communicate. Whenever we are very clear on whether it's buyback, whether it's dividend, whether it's acquisition, whether it's investing, but as Yashish said, right now there's no very clear concrete plan, and we are focused on FY 2027. Yeah, there is a concrete plan- Sure. There's not a formal concrete plan. That's all. Sure. Thank you. In my mind, of course, there's a very clear concrete plan. But yeah, that's not board-approved, and we cannot speak about it yet. So... Much appreciated. Thank you. Thank you, Rahul. We'll take the last question from Bhavya Kotak. Hi, Bhavya, please go ahead yourself. Hi, thank you, sir. I just wanted your comments on, you know, the premium per policy. Just back of the hand calculations suggests that, it's jumped a lot in this quarter, especially. Is it because of the savings business, as you- Yes. -mentioned earlier? Yes, the savings, the savings business is about three times higher premium per policy than the health or term business. So obviously, that would... But the health has also grown, but the savings has also grown, and both of these are the higher side of it, right? Two-wheeler policies will be much lower premium per policy. So, but look, the important thing is, has the premium per policy of savings grown o r has the premium of per policy of health grown o r has the premium policy of term grown? That answer is no. It's just a mixing. Right, sir. S ir wanted your comments on the phygital model, basically the stores that you've opened. So could you just qualitatively, you know, talk to us about the advances that you've made over there? So what are the unit economics? Is it, you know, better, or we expect some, you know, accretion because of that? It is. One last housekeeping question is POSP premium and disbursement. Thank you. So on the phygital model, it's been a game changer. Totally credit Sarbvir with having thought this up and implemented it. In fact, even in the early stages of implementation, I didn't have questions once he was there, but before that, I always had questions on the phygital model. But it's worked beautifully. T here's one more person actually I would like to credit, he may not be here hearing, it's actually Naveen Tahilyani, because I do remember the conversation when Naveen actually gave Sarbvir this idea. So I wouldn't totally credit Sarbvir. He's credited that he picked up that idea and implemented, but it was actually Naveen Tahilyani's idea that, you know, you guys should think about phygital. So I do want to credit him. I hope this information gets to him, because he will feel good about hearing that he had such a big impact on us. So thank you. INR 801 crore. I think the number you want, it is INR 801. Okay. Thank you very much. Thank you. We will close the call now. I know there are a few people who we have not been able to answer. Sorry about that. Just reach out to Rasleen with your questions, and we will answer them, you know, properly. We were answering questions properly right now also. But thank you. We close the call now. Yeah. Have a, have a-