Analyzing...
Hello! Good morning! Am I audible?
Yes, Dipanjan.
Hi! Good morning. Just a few questions from my side. First, if I look at your contribution margin trajectory versus your EBITDA margin trajectory. There is a clear difference. So just wanted to understand what sort of leverage benefits you're getting on your overheads ex of business acquisition cost. Because contribution margins are down but EBITDA is up, so definitely there is some savings per scale, on maybe brand spends or other expenses. If you can give some colour on that.
The second question would be in terms of your incremental investments in the hybrid strategy, and also new initiatives, in terms of scaling up your Feet on Street or the overall physical presence. How should one think about it?
Lastly, on pb Money and pb Rewards. You have mentioned some pilots that you'll be doing during the course of the year, if you can just elaborate on the strategy behind that. And will there be any cash burn going ahead?
Lastly, two data keeping questions. If you can give the retail Health growth number for the quarter and the second will be just on the renewal ratio follow up. I would assume that in your Core business the renewal ratio is probably up YoY. But the renewal growth rate is just reflecting the trajectory of new business growth rate witnessed in the base quarter. Is the assumption correct?
Okay. Let me try and go through those questions one by one. Of course, if our contribution margins are at about 40% that will have an advantage. Our fixed costs are genuinely fixed except for yes, at times we have to invest for growth. Now, what does growth investment imply? Let us say we are doing the Health business, and you want to start a new focus on a segment, it could be any, it could be various segments. For that we would put together a team and we would start growing it, so there'd be initial investment in that. See any team, any focus, what we have understood, it costs you a couple of crores a year, for that little segment-focused team creation. And then it takes you maybe a year to kind of break-even on that. So there is a bit of cost that comes on the fixed side there. But other than that, our fixed cost definitely fixed here, we will have standard increments at about 10-12%. And I would say, even when we start new businesses, the way we utilize our Management is - most of the Management is ready to think about new businesses, and or
at least we have some proportion of our Management that can think about new businesses. If you think about our POSP business, our Corporate business, our UAE business, most of that has happened through internal Management and I would say, even if you think in the future, we are envisaging internal management to be leveraged more and more for that. So I think, yes, the costs are generally fixed, and they will obviously grow much slower than the benefits that comes in from there. On the renewal part, I know everybody is having a difficult time trying to grasp why 34%, why not higher. For the year we will be at between 45 to 46%. Just for now, we don't give guidance but on that thing it is so precise you can't really get it wrong too much. So leave it at that, just wait out the year and let it play out. But everything's working well. As the biggest source of long term profits, you can imagine how much time we would spend if we thought something was actually wrong there.
For incremental investment in POSP etc., we have said we will break-even in a few years and that is our plan. The Management is going to be incentivized on the basis of profits, but with a 5-7 year time horizon. We don't expect investments to be higher. But listen, we don't want to shy away. As I've always said, there will be a time. We are here to do well in that category; we are very confident of the category. Whenever required, we will invest behind it. We will keep our options open and close to our chest.
pb Money, pb Rewards, Naveen, if you have any update on that.
So like I mentioned in the earlier comment, we are thinking about strengthening the consumer engagement. We've done well in terms of credit engagement and credit management for customers with 46 million consumers taking their credit score, and then a lot of them using that to track their score, improving their credit score. We are extending the thinking on financial management on the back of account aggregator framework. The idea would be to just simplify it for consumers, help them manage their money better, thereby increasing engagement. That pilot is expected to be launched in Q2. We do not expect any significant cost, if your question was around the cost side. The pb Rewards was more around the loyalty and the customer lifetime value and how do we drive or give a higher incentive for consumers to come back to take the second or the third product as and when they need it. So we're thinking through that. I've mentioned, if you see the slide that our pilot is expected to be in Q3-Q4. So again, no significant cost implication from this year perspective. We'll have more clarity when we do the pilot basis the consumer response. And but yeah, from a this year perspective nothing significant from a cost perspective.
See, where do you spend money? You largely spend money, direct cost money, either in branding or operating costs. Those are all within direct costs. When you're building a B2B business, you're unlikely to spend that much. And I say, B2B, because the core brand out there is Paisabazaar and the core brand is built and everything else is working in the background of that. So don't anticipate anything major on any of those add-on mechanisms. We'll obviously give more clarity once we kind of get there. Also on the operating costs, since you asked about field people and all. See whether people are in the call centre or whether people are in the field, it's absolutely fungible. So you'd be very surprised, it's not like people are only in the field. Sometimes we have a mix, where people will be in both the call centre and the same people will go out and have meetings.
Sometimes we will have separate teams, one doing the calling and setting up appointments, another one doing the physical meetings, and somewhere we will have direct, all the way to physical, and it would depend on location, terrain and various other things. Of course, as Sarbvir explained, there's a lot of sophistication going on in terms of which languages, etc. but that is all part of our direct costs of operations. There is no separate investment going in any one of them.
Got it. Just one question on the retail Health growth for the quarter.
There is no surprise that the 78% number is fairly indicative of both Health and Life.
So there is not more than a 2% difference between one and the other.
Got it. Thank you, and all the best.
Thank you, Dipanjan. We'll take the next question from Madhukar Ladha, Nuvama. Madhukar, please unmute yourself.
Hi, good morning! I wanted to just clarify one thing - On the renewal premium growth you mentioned that while for this quarter it's a little bit lower but for the year you're pretty confident that will grow at 45% year over year, and that is for the online business. Did I hear that correctly?
Absolutely. You're absolutely right.
Okay, perfect. Just moving on, if you look at the retail Health industry that's growing, closer to 20% ballpark, however, we are growing closer to 80%. We all know that the number of lives covered are not growing at that rapid a pace. So a lot of the business is churn business, right? I wanted to get a sense of the following - In the new lives that we are getting, what percentage is churn and second, how much of this 80% growth is because of multiyear policies. My guess is that multiyear policies will be more profitable in the first year itself. Then why is our Core contribution margin not improving even more sharply?
So let me clarify on the second part, Madhukar. Our multiyear this year is lower than our multiyear in the previous years. So that is certainly not explaining growth. In fact, if anything, our growth is understated because of that. I'm just clarifying that because obviously, that's something we will track. Churn as a percentage and we clarified this in the past also, as part of our new business is much lower than industry. Somewhere between 50-60% of where the industry is. I guess that kind of clarifies both points. Yes, we are growing and we are very happy about that. But that growth is as it is. If our multiyear was exactly the same as what it was 12 months ago, our growth would be higher, not lower. So yes, we're getting more single year policies than multiyear policies now.
In fact, if I could just add. There are two things that are playing out in health insurance, Madhukar. The affordability is becoming a bigger and bigger concern. So actually, a source of growth for us is the fact that we are able to sell on monthly, quarterly, modes as well. It's not really the multiyear policy that are driving our growth, I would actually say the reverse, that the monthly/quarterly modes are driving our growth. And the second thing that is happening is that we are a source for fresh lives in the industry, and that has always been our story that we are bringing fresh lives into the industry. And obviously, companies can sell other products to them, etc. and of course we can also do that. So, I think our portability is not a driver of our growth. It is the fact that we are bringing fresh people and like I said, part of it is affordability, and part of it is the products. If you look at the products that are available right now on the Policybazaar platform, almost significant portion of them are at an advantage versus the overall market. Because as a company, we are not really focused on ticket size, we are not trying to drive ticket size, attachment, etc. We are actually trying to sell Core Health insurance, and while it may sound strange, is not necessarily every distributor’s thought process. Those are the 2-3 points which you should keep in mind as you think about our growth.
Understood, and just a follow up on the margins. So what will margin differential between like a 3-year health policy that you sell versus a 1-year health policy. We know that the 1- year policy is sort of negative contribution margin.
When you look at an NPV basis, they are the same. I know what we report is a financial number, obviously has to be financial. But what we internally look at is NPV accounting.
They are exactly the same whichever way you do it. So it actually doesn't matter either way. I know what you're saying. From a cash flow perspective, maybe you make a little more money in the in the 3-year policy. So yes, you might make a margin on that compared to a fresh policy. That's something we don't think too hard about here, quite honestly. So eventually, it's about building the renewal base, etc. But again, something that one can spend some time with Rasleen, and try and understand a little more deeply if one is really interested in that. See as shareholders, I would say shareholders would be interested in the NPV, which is where we get interested. Looking at just quarterly numbers may not be the best on that.
Sure. Thanks and all the best. Bye.
Thank you, Madhukar. We'll take the next question from Yash Gandhi, Stallion Asset. Yash, please unmute yourself.
Hi! Thank you for the opportunity. I'm audible?
Yes, Yash.
Thank you. So my first question is that your total premium has grown 62% this quarter, but your revenue has grown less at 52%. I just want to understand, why is that the case?
Ideally, would the revenue and premium grow in sync?
Longer term, you are right, premium and revenue would grow in sync. But, as we explained; in our Savings business, the take rates have reduced in the last 1-2 years. And as Sarbvir explained earlier there were Capital Guarantee products which were a significant proportion, they are reducing, and the ULIP part is growing, which has lower take rates. It's good, you kind of mentioned it that way. Assuming our product-mix did not really change much, from 62% to 52%, actually Savings has grown, rapidly, but that alone would not explain it. It is a decline in the Savings' take rate, which will explain the 10% gap that you are talking about. So see if you think about it, 1.6x sales to get 1.5x revenue. That is on a percentage basis, a decline of about 7%. If Savings was about 20-25% of our business, and that declined by 15%, that would pretty much kind of cover a bulk of the explanation.
Right. So the percentage of Savings you're saying has decreased like in terms of total mix.
No, the percentage of Savings has not decreased. It has increased, but that increase alone would not explain the shift. What would explain the shift is the decline in the margin of Savings. See, Savings might have been at a higher take rate earlier compared to where it is right now. It's an almost 60% of the take rate or something.
Got it, Sir, and my second question is, Health insurance premium has been very high, this year as well last year, but I just wanted to understand why the ARR in your renewal revenue has reported a sequential drop. I'm sorry if this was clarified before, but I just want to understand that.
The question is on quarter on quarter?
Yeah, yeah.
Look, the crazy thing is actually our insurance premiums and revenue in Q4 and Q1 are very similar. That in the insurance industry is unheard of. Like, whose Q1 is going to be equal to their Q4. I think the right number to look at; that's why we put it in the presentation, is the 12- month rolling number. That is the right way to look at it, because that takes care of seasonality and then you see the actual growth quarter on quarter. It would be a bit unfair to compare. Please appreciate half the industry goes on holiday in Q1. So you know, Q1 and Q4 comparison is a bit unfair.
Okay, got it. Thank you. That was it. Thanks.
Thank you, Yash. We'll take the next question from Shreya Shivani, CLSA. Shreya, please unmute yourself.
Yeah. Hi, thank you for the opportunity. I have three questions. First is a data keeping question. Have you shared the premiums for POSP, Dubai, and Corporate business for the quarter and if you can share that, please. Second is on the Health insurance industry. This is more to do with the industry, and how it could impact a distributor such as yourself. A lot of the manufacturers at different point in time, since the past two years have been taking different price hike and you did mention about the problem with the affordability in the business for the end customer. So what has been your experience with the customer behaviour when such price hikes have come in? Or will we start seeing this behaviour change, or any impact from that behaviour only once the renewals from 2nd quarter or 3rd quarter starts kicking in? Do you expect the porting out like the customer may still be on your website, but they may port out from one manufacturer to another manufacturer? Do you expect those trends to pick up, or any concerns if you have around that? And 3rd is on your traditional Saving products which is par and non-par, if you can help us understand if you had any discussion with insurers in change of commission structure or deferment of 1st year commission. Any colour on that will be useful. Thank you.
So first of all, POSP is ~₹1,000 Cr, Dubai is ₹213 Cr, and Corporate is about ₹272 Cr.
The price hikes that happened in the industry are actually something that happened about 15-20 months ago. We've now been through a reversal of that cycle that happened then. It is not as extreme right now as it was back then and our renewal rates have held up. In fact, they are only improving, so we don't see that issue. As I explained, our porting is lower than the market. How do I say it in the simplest form? We are the solution, we are not the problem; is one way I would leave it. I think we have superior disclosures; we have enough data to kind of prove that. We have better sustained claims ratios and we have better claim settlement rates. So, as I said, we are part of solution, not part of the problem.
There is another side of the problem, which is a fee for service model. I think that's unsustainable in any country, not just India, wherever you look in the world, if you have a free flowing fee for service model for healthcare. Essentially, every healthcare provider is looking at room rent per bed. And today you are seeing people having ₹60,000-₹66,000 room rent per bed. That, at a fundamental level, forget about insurance, forget about anybody. Who's the average customer who's buying these insurance policies? This person has an income of ₹6 lakhs to ₹10 lakh rupees a year. That's the bulk of the people who buy these policies. How can a person like that afford to spend ₹60,000 for a
room rent? It's impossible, right? I think our healthcare facilities are really not taking care of that next 20%. It's not an insurance problem. Nothing insurance guys can do about it, right? I think that model needs to be fixed. And we would try to figure out how we can play the most important part in that. Our healthcare today is for the top 4% of the population, we need to figure out how the next 20%-25% of the population is going to be handled. And unless that is done, prices will keep going up year on year because that's going to be an issue.
That is correct. Yeah.
So yeah, I just want to add some colour. You have to understand, Pricing over the last four years - two years they didn't go up at all because of COVID; after two years we had one big sort of round and then now it's much more normal, as Yashish explained. Thereasons we are able to handle these price hikes and yes, they do play a part where they happen, especially when they are very high - there are two things. One is that we are selling a lot of the modular products that are available on our platform. There's a new design that over the last 15-18 months, we have sort of worked with our partners to introduce. In these products, one of the features that they have is that the no claim bonus accumulates very strongly from year to year to year. So there are some which are 5x over 4 years, there are 7x. Now, there are some which are even having unlimited Sum insured. Now, when you have these kind of products, and when their renewal comes up, we actually find that the renewal rates are higher on a NOP basis than any other product. Because the customer, supposing you started with ₹10 lacs and now you're at ₹20 lacs or ₹25 lacs, your ability to change becomes much less, because the person who's going to sell you a fresh ₹25 lacs product will be much more expensive. That is one way that we are handling this thing. And the second, again Yashish touched upon it, is the fact that when you are paying up for a product, you want to ensure that you'll get that service. The promise that we have around claims, the fact that people are getting more and more confident in our ability to handle those claims, is also helping us on the renewal side.
I think these are some of the tangible things that we are bringing to the table on the Health side.
That's very useful, especially this product that you've spoken about, that you've partnered with your insurers. So the insurers are not offering it on any other distributor, it's very exclusive with Policybazaar, is it like that?
As you know, by regulation there can be no exclusive products.
Yeah, you are correct.
The reason that I think we have an advantage on them is the fact that because we have better disclosure, because you are able to price the customer better on our platform, it is more economical to offer these to our customers versus others. But of course, insurance companies are free to offer.
Yeah.
What is a good quality distributor? A good quality distributor is somebody who wants to sell more consumer-centric products, which may at times have even lower take rates compared to other take rates. A good quality distributor is one who does decent disclosure of customers compared to the rest of the market, so that companies really understand the risk at the point of inception, and do not have to put in that effort at the point of claims. And a good distributor will work with insurance companies and with its customers to create products that allow the customer to stay in the same product for a longer period of time. A good distributor is not one who
just keeps porting customers from left right centre. And that's why I said, we believe we are a good distributor. We have enough data to prove. We believe on the claim side we have now put in enough ability to really solve for claims. We are getting a lot of positive feedback for that from consumers.
We believe that is one of the biggest reasons why our fresh growth is what it is. Nothing else explains it. Nothing has changed in our business model, except for the fact that we have gotten much deeper on the claim side. And of course we continue to work. You may have the same product but somebody else may not be as keen to distribute it as you are because you are more focused on those pieces. I think it's not fair for us to say more than that.
Sure. And last question on the traditional Saving products, any colour you can give on any communication from insurers on commission structures, etc.
So obviously, we know we can't discuss anything related to our insurers. I'll just give you a sense, we don't sell participating products on our platform, and non-par is also a small portion of our mix.
And we don't plan to expand into that sector, or right now it's a limited portion for us?
Yeah, right now, we have no plans to.
Okay, thank you so much.
See at a fundamental level whenever lower take rate products become available, you will more often than not find Policybazaar as a distributor jumping towards them and you would find many distributors having an aversion towards them. You can be the best judge on who is going to be the eventual winner. The eventual winner, according to me, will be the one who goes for more and more consumer centric products.
True. Thank you so much.
Thank you Shreya. We will take the next question from Nischint, Kotak. Nischint, please unmute yourself.
Yeah, could you give some colour on your market share in retail Health? You've been growing very fast for the last 4-5 quarters. Just curious to understand, how the headroom would be?
We have our fingers crossed. We just hope this growth continues for the next 3 years. The fact that we just invested $3 million in additional capacity is just showcasing our hope and confidence both, I would say. I hope we are not proven wrong, and we have confidence that we won't be proven wrong. Let's just leave it there. I think there's no point discussing market shares and all.
No, that’s a fair point. But I'm just saying that as a single player how much market share can one have?
I think we are quite small in the big scheme of things. I think we are overall maybe 3- 4% of the overall insurance piece. I think, looking at it in a very segmented granular way, may or may not be the right way. We also worry about those things that you're talking about. They're not for this discussion yet.
I just want to be very clear. We are right now nowhere near any such issue that you are trying to refer to. We are a very small part of the industry. There is a lot of work to be done in terms of getting lot more Indians to be covered. 5.5 Cr Indians have retail health insurance, we are very small. There is a lot of opportunity ahead.
Let me give you a data point, which you perhaps are already aware of. In the US, Health insurance industry is $800 Bn and in India, the Health insurance industry is about $10 Bn. I know the US economy is bigger and their healthcare is bigger. But it's not that same difference, almost 80x is not really explained. My fundamental belief is Health insurance probably needs to be 8 to 10 times bigger, not grow at 15-20%. I think nothing grows in this linear manner. At a very fundamental level, some issues need to be solved for health insurance to be 8-10x of where it is right now. We are working hard to solve those issues rather than worrying about what shares has who become. India is not a country, in my opinion, where you think about these things. You think about how you can change so that the overall structure can change so that it can become 5x-10x rather than worry about okay, who has how much share of what? It doesn't grow that way and I don't think industry will grow that way. In my opinion, either the industry will do well, or it will not do well.
Currently, in my opinion, it is not doing well and that's because of issues. Yes, we are doing well but overall there is an issue, and we all know that. I think that issue needs to be resolved.
If one is kind of looking at around 70+% growth in Health and Life, what would be the increase in lives covered for you?
There is no meaningful increase in ticket size, it's pretty much the same. So there may be some price increase, but an equal amount of multiyear coming down. So actually, ticket size is flat. So precisely, if our total premium has grown by 78%, I would say the number of lives have also grown by 78% for us on fresh business.
Got it. Finally, within your product mix, do you have some thought process on concentration levels and how you would want to toggle around the various products?
See, our focus is what we've always said, coverage for social security for the middle class. What is social security? It is term insurance; it's health insurance; it's child education cost planning; it is pensions; it is all of those. Yes, we also do motor insurance, we also do two-wheeler insurance. We have a tech-platform that does that. But our focus is extremely clear, where we believe the middle class defined as anybody earning between ₹50,000 to ₹4 lacs-₹5 lacs a month or in that band. The 200 odd million people, there is a solution that they require, and that solution needs to cater to their social security. That social security is if they lose their job; if they die; if they fall sick. There are some serious financial consequences of that. We are trying to make sure those consequences don't happen for them, and they are covered for them. That's basically our focus.
I just want to add that we obviously have a fantastic team which runs the business.
We are only representing them, and I think they don't worry too much about the mix. Everybody tries to do their level best to drive the growth of the business that they are running. So if you're running Motor, you're trying to do the best for Motor, you're not really thinking what the health guy is doing. I think we have very fiercely independent teams, and they take their job very sincerely and very seriously. There is no mix that we are trying to reach. We are basically letting everybody do the best that they can, and we try to give them the resources, encouragement and support. That's how I would say, practically the company functions.
Perfect. Thank you very much. Those were my questions, and all the best.
Thank you, Nischint. We'll take the next question from Nidhesh Jain, Investec. Nidhesh, please unmute yourself.
My first question is on the Reinsurance business. Is there an update on the reinsurance business, which we proposed, I think last year?
We got a license, few months ago. We have set up a small team led by one of our strongest managers. He, and along with his team are working on it. I think it'll take us a while to figure out. Our focus continues to be that how can we leverage the fact that we are so big in retail and create better propositions for customers. I think over a period of time, you'll see some progress on that.
This business will be on Reinsurance broking or Reinsurance manufacturing?
No, we are clearly not manufacturers. There are two things we do not do. We are never an insurance company; we are never an NBFC. Those are two things we just do not do, at least as of now. If anything changes, we'll let you know. But there is no intention of changing on those things.
Okay, sure. Second is on the Paisabazaar business. Is there a thought or process to build a similar business to POSP; aggregating small DSAs all across India. If yes, how we plan to do that?
I think in Paisabazaar we are spending a bit of time reviewing the strategy. So give us some time to come back on that. Currently, we have a business which is non POSP, which is mostly unsecured credit. There is a possibility we could build a POSP business on the secured side. There are 2-3 players that exist on the POSP secured side, each doing about ₹600 Cr of revenue. There are three players out there, as I see it. We feel that is an opportunity that we might leverage, but we really want to be very precise about our direction on Paisabazaar before we act from here onwards.
Yeah. Lastly, if you can share the EBITDA and contribution margin of the Credit business for the quarter.
Yeah, it's the same ballpark. If the total is 14%, maybe all is between 10 to 15%, at EBITDA level. On the contribution side again, they are similar. In fact, I would say the Credit business is a slightly higher contribution, as you would expect, because the operating cost on the Credit business is usually lower. The Credit business, if anything, is a slightly higher on the contribution side and slightly lower on the EBITDA side. Okay. Thank you.
Yeah, because there is a cost to running an infrastructure.
Thank you, Nidhesh. We'll take the next question from Jayant Kharote, Jefferies. Jayant, please unmute yourself.
Hi Yashish! Congrats to the whole team for the great set of numbers. Growth certainly looks heady. On the contribution margin, just picking up brains, if I look at this $3 million investment, the actual contribution margin might actually have expanded this quarter to north of 45%. But you also mentioned to another question that the higher contribution or mix change from
Health and Savings would have led to some lower margin. So I'm just trying to marry the two and understand what has happened.
Yeah, we are at this moment focused on growth here. We are confident and hoping and praying that the growth continues. From whatever inquiry base, etc., we can see things feel good and in preparation for that, we don't want to optimize. As I said, as a company, we are in that phase where we are growing like a kid. At this point we don't want to optimize on the input of protein. There will be a time when we do that. It's not right now, but I'm sure that time will come, and that's a very easy thing to do. Trust me, that's a very, very easy thing to do. It's not a difficult thing to do when we want to do it. But it's not something that is the focus right now. But you're right, we spent about $3 million extra in this quarter on the operating cost than we had to if we just had to maintain just this quarter sales. That is, more in anticipation of future quarters, higher growth, etc.
So is it fair to assume next quarter if current growth rate continues, this recovers?
Nothing happens in quarters, don't get into all that. The only thing I can predict very precisely is renewal rates and renewal premium, which I've already done. Nobody can say what will happen in September. We have some idea of what's going on in August and July, but it's very difficult to predict here.
No, I was trying to say about the new OpEx that you have done.
I do not want to get into that business of you what will it be next quarter, and all that stuff. Where we can we are, and we are very open about it. Where we can't, we can't.
Okay, understood. One question, which I’ve asked you last quarter as well, is the renewal take rate. It seems to have again moved up to a very healthy 7%+ number. As the renewals stack up in the next three quarters, you confident of maintaining this one?
That must be just a product mix shift or something.
Yeah, it is a shift between products but there is nothing in it. It's not like we've negotiated better rates or anything like that. It's a very stable equilibrium right now. And yeah, we're just continuing with it.
Okay, thank you. Congrats once again for a great set of numbers.
Thank you Jayant. We will take the last question from Sanketh Godha, Avendus. Sanketh, please unmute yourself.
You can hear me, right?
Yes, yes.
One basic question which I had is that you said that you spend almost ₹25 Cr on creating capacity. Just wanted to understand if this has been done on Core or predominantly on POSP?
On Core, only Core.
Okay. Second question which I had on PoSP Revenue recognition, and to the extent I understand the sector. In the past before EoM, the payout to the PoSP were done by the insurance
companies directly, and you used to get the net part in the top line. Now, the payout is happening at a gross level to the distributor and you guys pay down to the PoSP. So that got effective from which quarter, probably from the second quarter of the last year? I just wanted to understand how things have changed.
Sanketh, while I respect the question. It's an irrelevant question, there's no such change in our system. In our system, the revenue we are reporting are like for like; apple for apple.
There is no game there. If I was to just look at premiums alone, this quarter PoSP premium was ₹1,000 Cr and in Q1, last year, the premium was ₹360 Cr.
So that is what explains it. So obviously, if the premium has grown, there's some revenue also attached to that.
Got it. Lastly, when you said you invested ₹25 Cr in Core. Is it largely to strengthen your offline strategy within the Core?
There is no such precision. There would be both capacity build; capacity is both at the call centre and at the Feet on Street. Please appreciate Feet on Street is about 20% of sales right now. So it's not just feet on street. I'm sure it happens in many ways. You would go into different linguistic centres; you would go into new places. When we say, investing ahead of capacity, it is capacity, which would not have delivered value in this quarter. But obviously our hope is that within 3-6 months that capacity starts to break-even. Not just hope, all our data is pointing in that direction. It is just we have built it up a little faster than we usually would have.
Got it. Lastly, this 78% growth what you said in Life and Health. That is only reflected to Core. It is not a PoSP and Core put together?
No, that is just the Core business, and that is just the fresh business. See; please understand our value driver is our fresh Health and Life business of the Core. Yeah, the PoSP business gives us a lot of volume. It is not a long-term profit driver for the company. Long term, maybe 5% of our profit might lie in the PoSP business, or maybe 10%, but it cannot be more than that. So when the engine works, we feel very happy because the engine working delivers all this Renewals. Renewals are not earned in the same year, as I said; I cannot change my renewals too dramatically. If we say 45, it could be 44 at worst, could be 46 at best. It will not change much more than that in any given year. It is vastly the work of the past engine that is paying up now. But the engine of growth is this. I think that is where we feel good.
Got it perfect. That is it from my side. Thank you very much.
Thank you very much everybody for joining today. We appreciate your time and hope we could clarify a lot of your questions. Thank you. Have a great day!