PB Fintech Ltd

Thank you very much, Rasleen. Good morning to all. Thank you very much for joining. I just wanted to start today by acknowledging and thanking our team not just for this quarter, but for the continued years of very good work. And what I mean by very good work is staying focused on what is right for the consumer, putting that at the centre of everything we do and at the same time delivering every plan. I know we are broadly on plan, but every plan becomes waste the moment you get punched the first time, and our team takes multiple punches every day and continues to hit plans which is never easy. I just wanted to acknowledge that right up, and that goes for the entire 23k of us. Thank you very much.

Our total insurance premium this quarter was ₹6,616 Cr, up 36% YoY. This was led by growth in the core protection business, but specifically, Health, which grew at 65%, which is one of the highest in the last 9 quarters. The core online insurance premium grew 35% with 46% from Health and Term, which is the protection area. Our consolidated operating revenue grew at 33% to ₹1,348 Cr for the quarter and core insurance was up 37% YoY. The core credit was down 22% year on year. Our renewal and trail revenue of the last 12 month rolling basis is at ₹725 Cr up from ₹506 Cr last year, so about 43% YoY growth. This you're seeing at a very consistent rate, moving at about 43%. For instance, the Quarterly Renewal revenue is that an ARR of ₹673 Cr right now, up 47%. This is only for insurance. So the insurance quarterly Core revenue is at ₹673 Cr up 47% YoY. So what you're seeing is the insurance revenue has actually been growing at about 47% right now. I don't expect it to be at 47% forever. This would be somewhere in the 45%ish range for the foreseeable future. This is a key driver of our long-term profit growth. From a rolling 12-month perspective, the delta between four consecutive quarters has been increasing consistently, and is now ₹218 Cr at an overall level. Steady growth continues for our core new insurance premium net of savings business. This is another metric which

we have been highlighting for some time. If you take the savings part out, our core business has been growing at ±40%, now for 9 quarters, and we were at 42%, this quarter. Our Savings business has grown at more than 100% at times, and is currently at about -5% YoY. We continue to improve our customer onboarding and claim support services and the insurance CSAT is consistently above 90%.

Our credit revenue for the quarter is ₹102 Cr and disbursals are at ₹2,095 Cr for the core online business.

We continue to strengthen our leadership in new initiatives with a revenue growth of about 50% YoY with adjusted EBITDA margins moving from -12% to -6% with a 5% contribution now.

PB Partners, our agent aggregation platform, continues to lead the market with 350k advisors. We have moved the business increasingly towards smaller and higher quality advisors and the growth is much higher in that segment. We are now present in 19k Pincodes covering 99% of the Pincodes in India.

Our UAE business, along with our Health business, is another star outperformer in the group. They've been growing at 68% YoY and they have now been profitable for the last 2 quarters, so that's starting to become quite consistent. Our consolidated PAT for PB Fintech grew from ₹19 Cr, excluding exceptional items last year, to ₹85 Cr, basically from 2% to 6% margin.

We'll take the first question from Sachin Salgaonkar, BofA. Sachin, please unmute yourself.

Thanks, Rasleen. Hope I'm audible. Thank you, Management. I have three questions. First question - want to understand again how is management thinking in terms of balancing between growth and profitability. Clearly, as Yashish indicated for last 7 quarters, we are seeing 40%+ growth in terms of core business. But when I look on a YoY basis, your core online EBITDA margin is largely flattish at 14%. Should we sort of look at this business that it's

matured from a margin perspective and management is focusing in terms of growing at 30-40% odd percent plus going ahead. Or should we also continue to see a margin improvement plus the growth out here? So that's question one.

Let me pause here and pass it on to you guys.

Q1 is actually fairly straightforward. Our focus for the time being is entirely on growth. Yes, we will deliver profits, but they will be an outcome. We are clearly not optimizing for profits right now. There will be a point when we will perhaps optimize for profits. I hope that is as late as possible. Don't get me wrong here, because this is not meant to be a statement of any sort. We are a profitable company. We will keep becoming more profitable. But that will be a natural course for a while. Of course, if we wished, we could have a lot more profit right now but our bias is entirely towards growth. So whenever there's a call we have to make on - can we make this investment and maybe there's a doubt that it will help us in terms of growth or not, we will more often than not make that investment and err on the side of having taken on extra cost, and not being able to deliver the growth rather than having the growth opportunity, and not being able to deliver because we did not take on a particular cost. So that's the state we are in. Now, just to specifically get into whether that's a sign of us maturing, or that's a sign of us being young, I think that's a sign of us being young. You could take it whichever way, because I think there's an easy part which is to deliver the higher profits which we can do at any stage. But it's clearly not the stage to do that. It's like a 14-year-old kid. Do I want the highest performance from him today, or do I want him to train and have a lot of protein so that he grows into the future and becomes a far stronger adult. I think we are in the stage where we are still growing into becoming a far stronger adult in the future. And that is why, when we talk about 2030, we start talking about a ₹1 lakh Cr premium, we're not talking about profitability, because for us, that is the North Pole goal that we want to achieve growth and we want to achieve a certain scale. Profits will automatically come.

Got it, very clear Yashish. That was question one. Question two to Santosh. Wanted to understand if there is any change in strategy at Paisabazaar since you've taken over. Clearly market, especially on credit lending on Unsecured, continues to remain soft. And I know you guys were exploring and focusing a bit more on Secured. So it would be great to understand from you broad changes in strategy since you've taken over Paisabazaar.

Three things. One, that we are growing the Secured area, and you'd see that Secured has actually come up well. From a disbursal overall perspective, we are growing YoY. I would say we have a lot of existing customer base, about 5.3 Cr

customers are on our platform. We wanted to monetize our traffic for other products as well. So you'll see us doing savings, we've already launched bonds, we've already launched Fixed Deposits. You will also see us do mutual funds in a while. I think that is another area that we are investing in. And third I would say, is building a lot of alternate data sources to basically sharpen our risk ability. Our ability to underwrite better and help our partners underwrite better. That is one area we are heavily investing in. I think the sharpness in risk and being able to qualify a customer better for credit that is the third area that you will see us do a lot of work in. You will see us now doing collections, you're seeing us now doing bill payment, etc, a lot of that really builds up from a deep risk capability.

Thank you. Last question. Of late, there appears to be some increase in competitive intensity from some of the smaller players and platforms in the new initiative space. Wanted to understand are you guys seeing any competitive intensity and any impact of that which could be visible on the numbers?

I think you may be speaking about the POSP platform, so I'll just defer to Sarbvir on that.

Sachin, I would say this has been a very competitive space all around. I don't see anything very dramatic that has changed over there. I think there's a whole bunch of people who've been competing and the basis of competition has to shift. We have to focus on more granular business and work with smaller partners and add value to them. I think that's the race. If you ask me honestly, it's no longer a competitive issue. It's issue of, can we add value to our agent partners, and how much so that we can all have better economics.

Sachin, I just wanted to add there, more from outside in perspective. I believe every market with scale starts to become more and more real. So that market in a way started with any scale is equal and any scale is okay. I think slowly the understanding is coming within the investor community as well, that look, granular business is better, and business quality is important, and I think people are being able to assess that better. For us, quite genuinely, and me and Sarbvir were discussing this before our call as well. As the market matures towards reality, we benefit because in reality, we are actually a player that does the right things, anyway. I would say that's the kind of stated play. I think the market is becoming more and more real, and that plays to our favour.

Very clear. Thank you guys and all the best.

Thank you, Sachin. We'll take the next question from Suresh Ganapathy, Macquarie. Suresh, please unmute yourself.

Thanks, Rasleen. Just one main question is now that Health is done so well, and of course Term has always been doing well for you guys. What would be now your market share in these two products Yashish. If I were to take retail Health premiums overall in the industry, what would be PB Fintech's share, and also on the retail Term? Roughly, if you can state those numbers.

I'll try to but I'll state something else a little before that, because I've been thinking deeply about this. The year Policybazaar started, the total Health and Term business in the country for retail was about ₹200 Cr. If we thought market share at that time. Actually there was an investor that time, Suresh. I won't name them. But they said, “Listen, the total market is ₹200 Cr. If you guys are 30% of this market, that’s ₹60 Cr opportunity. Why should we invest ₹20 Cr behind a business like that and so they left it out.” Another investor did not know what the Health and Term market was, and so they did invest, and they kind of reaped the benefit. I think we are not in the market share game and I think that's a very important statement to make. We are in the “market creation” game. Since you asked the question the very specific answer would be, I think, in Health we would be (of the fresh retail business) somewhere about maybe 15%ish or so. And in Term we would probably be a quarter of the business in the country. But quite genuinely, we don't think in those terms. We just think in terms of our own scale. I'll tell you how we think about it. We think in India there is this 300-400 million people who earn sub of about ₹1 lakh as a family, and they can't afford the current healthcare solution, because everything is getting hard. Claims is getting hard, prices are getting hard, everything is tough for them. We hope we can play a very meaningful role in enabling Health insurance for them with our partners. In so doing it, make Health insurance a much larger industry than it potentially can be in the next 4 or 5 years, and should we be a participant in that, we should have a significant part of that growth. But that is really how we think. I think currently, it is a little stuck as an industry. But yeah, 15% and 25%, those would be the real numbers. And in Savings you would be how much?

Maybe 2% or so. About 5% of the non LIC, maybe, but about 2% overall.

Okay, 5% of non-LIC, that's clear. I know these questions keep getting asked. But you guys have done a very good job about your growth being at 36%. I know you guys have also been realistic, you believe medium term we should grow twice the industry, may be closer to about 30%. The problem that

I have got is that you're already 25% of the term market and I don't think the term market is growing beyond 15% and so should be Health. When you are already at such a high market share, and the industry growth rate itself is curtailed. It is becoming difficult to digest that you can even grow at 30% when the overall market growth is stunted to some extent. Is my assessment right or how do you look at?

That is a very fair way of thinking about it, and I wouldn't expect any outside person to think any differently but that is not how we have ever thought about.

That's the point I was trying to make. When we started in 2008, the total business was only ₹200 Cr, and nobody expected it to grow very rapidly. I'll make one statement. I'm sure you have a market projection, let's say, of the next 10 years, for both Health and Term. Whatever that market projection is, our belief is Policybazaar alone will be bigger than that market projection over the next 10 years. But now that is the gap right. The gap is we are coming at it from - There is an opportunity out there; we feel we are better placed at solving that opportunity, and that opportunity is solved; the market will actually grow much faster. There are two parts to the market, and we believe we are a contributor to the growth of the market. So as we become bigger and bigger, the market actually does start to grow faster. For example, you heard one of the public players go out there and say that, look our digital business is growing at 73%. Yes, we are growing but the digital business of the entire industry is growing and somewhere, this is a phase shift. That part of the business is perhaps going to grow faster, because perhaps it has better disclosures; perhaps it has better cost controls at the back-end. There are things that are happening which make it a more viable business. All I'm trying say is there's a more sustainable way of doing business, and that sustainable way doesn’t have a scale problem. And there's one kind of non-sustainable which does have a scale problem.

There's one last question on the Savings thing. I'll just squeeze in. So you are right now, 2% of the market but it's stuck around that for quite some time, right? And the growth has not been great here. I mean, that's an enormous opportunity, because 80-85% of the market is Savings business.

What's wrong here, or what's getting stuck here as to why you're not able to do this at a faster rate?

Suresh, I'll just answer that question once, and then I'll hand over to Sarbvir. At IPO, we were point 0.4%, we're at 2% now. In these years, we have moved from 0.4% to 2%. I think Sarbvir is perhaps better placed at why we are at 2% and not at 15%, like Health, etc.

Thanks Yashish. I think Suresh, it's a very difficult question to answer on an open forum. I would say that you have to look at it from a relevant perspective.

If you look at ULIPs, if you look at the better-quality products that are sold, I think our share is more meaningful, and we always believe and in line with what Yashish was explaining on Health and Term, that in the end, the better- quality products will win, and they will become a greater and greater part of the market. And as that happens, our growth will also come. I think it's an enormous long-term opportunity. Like we have entered the Pension area in the last 12 months. I think slowly but surely we are building a very robust business on that side, and you would agree that Pension is a very big opportunity in the country, and it is coming. It is going to be an issue for the next 10-15-20 years.

So I think we are building such anchor legs. We are selling very high-quality products. I would encourage you to look at a slide that we have in the deck, which actually shows that some of the low cost products that we sell, on a cost basis, are lower than mutual funds. From a time when your ULIPs were discredited and there was a concern around cost structure, etc, to a point where they are now in the long run, actually better than mutual funds. I think we are moving. It will take time for these lower quality products to come through, and when they come through I think all these questions about market share, etc. will become less relevant. It's a game of patience, is how I would look at it. Thanks so much, Sarbvir.

Thank you, Suresh. We'll take the next question from Sanketh Godha, Avendus Spark. Sanketh, please unmute yourself.

Yeah, thank you for the opportunity. Just again, on that Health point.

See, we know that underlying industry is not growing. So you delivered 65% growth in the current quarter. Is it fair to tell that large part of your growth was driven because you have a higher contribution to long-term policies, because that materially improves the growth for you? On that line just wanted to understand, given, you have chosen to take commission in a deferred way in the long-term policies. Is it fair to say that your take rates, because you are chosen to take in a deferred way, will be better when you recognize on upfront basis on revenue? That's my first question.

Sanketh on the revenue part, I will defer to Sarbvir. I just wanted to answer one question, not just for you, but for everybody. When we say we've grown at a particular rate, our number of transactions has actually grown at faster than that. So that lays to rest all kinds of questions like, has ATS grown faster, have

you done multi-year policies more than last year? All of those questions get laid to rest. I will answer one last thing which just came to my mind. It's not because one customer is buying three policies because that can also happen.

It’s simply because we are adding more customers than ever before, and our number of customers added is growing at a faster rate than our premium growth because this is something we obviously check. Sarbvir can answer the question on the commission side and the cash flow side.

So Sanketh, as Yashish explained. I'Il just reinstate simply, there are no games in this 65% number. This is based on number of policies going up, number of lives covered going up. Our multi-year share is roughly the same as it was last year, in fact, in decimal points here and there. If I were to actually answer your question, maybe the real question that you're asking as to what is driving this growth, then I would say that three things. One is, customers have seen the value that Policybazaar brings in terms of comparison, in terms of having more efficient products. They are buying those products. They are getting a better customer experience, both in the policy issuance process and at the point of claims, and that is in turn creating a positive word of mouth. If you see, our marketing is totally talking about how people are being benefited at the point of claim. I think it's a virtual circle right now, and as Yashish said right up front, I would say that our teams are doing an outstanding job. We have set up regional presence, we have Feet on Street team. I think every part of the business is firing, and I think that's why you are seeing the results. So far, it looks like it's a very robust performance.

Okay, thanks for that one. And the second question just wanted to check on the new initiatives contribution margin, which every quarter seems to be improving. Today, it is at 5.3% for the Q1. So can you give a bit of colour of this 5.3% broken down into POSP, UAE, and Corporate. Where this delta improvement in the contribution margin in new initiatives is coming from. Maybe if you can break this 5.3% number.

Sure. I'll explain. See, there are three aspects to it. I don't know if we want to give out all the specifics right now. UAE has become profitable, and so obviously that contributes to the to the margin. In fact, UAE and Corporate kind of balance each other, so they together become very close to 0. POSP has been improving in margins, it has been growing in scale and improving in margins.

And it's just the quality of business they are doing, and they're constantly transforming towards smaller and smaller partners. I would say, look, if you want directionally, there's a likelihood that next year we should be very close to, numbers which have become meaningless from a profit or loss perspective

both from a new initiatives perspective. But we don't want to hold ourselves to it. As I have always said we could end up being a bit counter cyclical in this, because we do want market share, and I don't think we will hold ourselves back for any short-term profit delivery target. We will always do what we think is best for the long-term strength of the business. So yeah, that's the sort of story there.

The reason I'm asking - this 5.3% can improve to, by end of FY27, to around 7.5%-8%, or you assume this number to hold up at the current levels?

I would say next year you should expect it to be about 0. I don't know, were you asking from a more short-term perspective than next year?

Even in long term, say FY30, the contribution margin or EBITDA margin, how do you look this business to play out?

Maybe a few percentage points. There isn't that much margin. I've explained this, and you know this very well, Sanketh. Please understand POSP business is basically a pass-through business. It's somebody else's business which you are providing them a tech layer for but your revenue accounting is essentially for the entire business. So you are getting a commission of, let's say ₹100 but of that ₹85-₹90 is going to somebody else. So eventually, as a percentage of revenue only about 10-15, whatever is staying with you, and in that you have to incur all your costs. So it can't be like the core business. But yes, it can deliver something, and I would say, let's see, we're not putting pressure on that but I would suspect, maybe something like a 5% should appear at some point but whether it happened by 2030 or 2029 or 2031, I don't know.

Okay, so basically long term you believe this is a 5% adj. EBITDA margin business in that sense.

Let's see, let's see, but yes why not?

Got it, got it. And lastly, a few data keeping points. If you can give a premium breakup of POSP, Corporate and UAE. UAE we have but maybe POSP & Corporate if you can give. And second in new initiatives, revenue of ₹514 Cr, can you break it down into insurance and credit.

Yeah, Corporate is ₹430 Cr. POSP is about is almost ₹1,300 Cr.

New initiatives, revenue of ₹514 Cr broken down into credit and insurance.

That much I don't have. Maybe Rasleen can answer that offline.

Okay, perfect, that’s not a problem. That's it for me. Thank you.

Thank you, Sanketh. We'll take the next question from Shreya Shivani, CLSA. Shreya, please unmute yourself.

Hi, thank you for the opportunity. Just on the data keeping question you had given us the PB Connect revenue last quarter of ₹55 Cr. Have you shared the equivalent number for Q1? And my second question is on the ESOP cost.

So, we were following a certain trajectory, the ESOP cost, which has come in at about ₹55 Cr. Can you help us understand what would be the outlook for the next 2 years probably? Now, my two main questions, apart from this is. First is on the non-ULIP savings business, and we had indicated that we are considering certain other sectors or certain other segments where we would want to expand into. Can you elaborate anything incremental on that? And my second question is, while I appreciate the part that you are prioritizing growth, and for that your expenses are up in this quarter. But what I see is that your expenses outside contribution has picked up faster than the expenses within contribution. So just wanted to understand, how does this pan out when you start the year? How does it pan out that if it is for growth; shouldn't have been the expenses within the contribution that should have scaled up and just trying to understand. How does the math work out? Thank you.

Thank you. So PB connect is ₹43 Cr this year. So it was for ₹50 something, and there's a bit of seasonality in that. On the non-ULIP, we had an aspiration to grow into Pensions. Please appreciate Pensions was almost 0 last year, it's about 15% of our Savings business now and getting bigger. Of course, we have Child plans. When you think about ESOP charges. Basically, if the management performs which I think we are all working very hard, and we will; then the management must be rewarded. I have zero doubts there. Now the only thing we can say, and that's what came across in our ESOP thing is we will only get rewarded when over a long period of time, over a 5-8 year period, the stock price also does. Of course, we're getting rewarded in terms of our basic compensation but our ESOP compensation is largely linked to our share price performance over the long term. So we are aligned with investors in that respect, and yes, it will over time, increase and decrease. That's okay. But it will be associated with that sort of price movement. Then we have new initiatives.

In new initiatives, because they are not yet profitable, the management team’s long term incentive planning is linked to the profitability of those business, so the only number that matters to the management. But this is not from a short- term perspective, it's with an 8-year view. Their entire ESOP is, or whatever you want to call it Long Term Incentive Plan, is all linked to those businesses

becoming profitable and significantly profitable, because that is when they make serious money. On expense planning, what you have as a contribution and non-contribution line. There's also brand out there, and sometimes in a brand one month we may do something extra one month, we may not do enough. But over the year the cost will not grow in line with our revenue. It will grow at maybe about 2/3rd of our revenue growth or so.

Increments is something that hit every year, but they hit in the Q1. So when the increments happen, you can have some impact coming from that. That is how it is. But otherwise, if there's any detail, I'm sure Rasleen can provide that.

But that is how the planning happens. Of course, before the beginning of the year, we do have a plan. Obviously, we don't just have a plan, we kind of have a multi-year plan usually. And we give out some of those numbers to the market, like we did about 4 or 5 years ago, about a 2027 profitability. Today we are broadly starting to talk about our 2030 premium numbers. But more than that, we don't put out in the market in terms of our short-term business plans, but of course, our intent is not to have our fixed costs growing faster than our revenue, of course not.

Got it. Sorry, I didn't understand on the Pensions you mentioned that you've already started scaling up the business versus it being at 0 last year.

That's the only product that you've decided to go ahead with.

At a fundamental level, when you think about insurance, there are five products that matter to social security. I'll talk about all five. First is Health and Pensions, because you can fall ill, and if you get older you need to cover yourself for Pensions. The second is Term and Child education. If people die early, then they can have a problem with their family costs, that is Term insurance. And just in case something goes wrong, people haven't planned adequately for their children's education, that can get affected. These four, and then to some extent Credit is another enabler of social security in various situations. These are five products we focus on. Now, ULIP was a somewhat market linked opportunity, it did have a component, but our intent was always to sell more Child education and Pension plans, and I'll hand over to explain that there's been a beautiful transition in that over the last year.

I think Shreya the way to think about it is that product is a means to an end.

And I think ULIP, we believe, is more efficient, and in a growing country like India, equity is a better long-term solution. So if you are trying to save money for 10 years, 20 years, 30 years, then equity is the most efficient solution, and you can look at Indian equity returns. I'm sure you guys know better than us

that over the last 10 years, on any rolling basis, you will find that they tend to converge around 14-15%. So that is the basic philosophy that we have. In that philosophy, we try to offer products for Children education, as Yashish just explained, we have created a Pension line where we are talking about long term savings for Pension products. These are accumulation products, then they have an annuity component. You can have straight out accumulation if you like.

Then the third thing that we have focused on is protection of capital. For a lot of people, the concern is they want the upside of the market, but they also want to protect their capital that they are investing. So we have a capital guarantee solution which is comprised of a ULIP as well as a fixed return non- par product. So I think these are broadly, I would say, the three big areas that we focus on. Over time, we will look at, especially as Paisabazaar gets into the savings area, we will look at forming more complete solutions for some of these areas. I think that's the direction we are going. Right now, we have no particular interest in going down other Savings insurance products.

Understood. So just one follow up. So in this Pension product, there's a slide where you've mentioned how many partners you have in the Savings, and in Health insurance, etcetera. So almost all of the partners are offering the Pension product, or it's just at nascent stage, and you're doing it with some partners. It's not 14 insurance partners. Is that a correct way to think?

Shreya it's pretty much everyone. I think it's over 10 already, and whoever is left is slowly come on board. I think everybody sees this opportunity, and I think we are presenting an attractive way of accessing that audience.

Alright, this is very useful, thank you, and all the best.

Thank you, Shreya. We'll take the next question from Dipanjan Ghosh, Citi. Dipanjan, please unmute yourself.

Hi! Good morning, everyone. So just few questions from my side. First, would it be possible to quantify the sort of sales personnel or Feet on Street really supporting that journey, and how that have scaled up over the past few quarters or years. Second on the POSP side of the business, if you can quantify the mix between Motor and non-Motor, and if there is a strategy to increase a non-Motor portion as your granularity of the franchise on the PB Partners side increases. Third is on the Paisa side. You have mentioned at the start of the call that you will be introducing mutual funds out there. When we see the broader space, it seems that most of the platform players are kind of converging towards the stage where the focus is on mass wealth advisory sort of a

proposition. So would broking be on the radar for you guys. So those are my third questions.

Actually, Sarbvir is better placed at answering at least the first two, and then we will come to Paisa. So both the hybrid and the POSP.

We have about, I would say, almost 25% of our sales team present in over 200 cities where we offer Feet on Street capability; about 30% of our business comes from there. Yeah, of our Health and Life; assisted business I would say.

So I think that was on the FoS side. I think the second question was on PB Partners and granularity. I would just say two things on that. One is that the percentage of business that we are doing with smaller agents is growing, I would say every month and the contribution of them to the business is now almost 2/3rd or more of the business comes from people who are doing very small amounts of business every month, and that to us is the most important metric as we go forward. The second metric that matters is that what are other things that these people are doing. One of the powerful parts of a platform is for an agent to be able to do other things. So if they sell Motor insurance, which mostly people do on our platform, can they sell some Health insurance, can they sell some PA cover, etcetera? So I think that part of the cross-sale is also continuing to grow every month. Those are the two things I would say at this point, I mean wouldn't want to get into too much detail beyond this.

For Paisa, I'll just hand over Santosh to kind of answer the question about mutual funds and more on that.

On the Mutual Fund side, the industry is growing at 20% rate. There's still a lot of adoption coming. From a Paisa perspective, because, we have a very young customer and that customer needs both saving solutions and credit solutions.

So, having both on one platform makes the platform far richer from an engagement perspective, solutioning perspective, and also that when these customers come to our platform we already know how much do they save. We already have a PFM product called PB Money. So we did have access to what was the money lying in the bank account. All we are doing is educating people - Why do you want to keep money growing at 2.5%-3% when you can invest in equity, especially when you're young and take benefits of the country that we are in and make money, at least 12-15% CAGR is something that this industry can generate for you. It is an extremely consumer centric product. Just with bonds being launched a month back, we are already a ₹1 Cr AUM without any marketing spend. I think that also raises the confidence that there is customer

who's wanting to look at good saving solutions, and I think Paisa should be that platform.

See, I think it's very, very early days. Paisa right now has dual challenge as I see it. One is they have a current quality of operations and a current quality of business which they are transforming very rapidly. And second is, there is a future platform that's being built. I would encourage some of you to spend time on the PB Money part of Paisabazaar. It's in early stages. But you see account aggregator platforms have really levelled the playing field in terms of what you can offer to consumers from access to their own banking data and access to their own investing data perspective. And to some extent Paisa is leveraging that to build up a platform with its own consumer base without further marketing. But, as I said, early days, I think this is going in many ways – Corporate Bonds, Deposits, Mutual funds, there could be some Pension element here, the various pieces coming along. At this point. Not a major revenue driver, the big revenue driver continues to be Lending. I'll just share one thing. Businesses have financials and businesses have the soft part of it, not the soft part of it, I call it the harder part of it. As I interact with Paisa's partners and now I've been interacting with quite a few. What I hear across the board is that your focus on quality of book has changed. They feel far more comfortable with us as we distribute for them into the future. And that is the soft change one is seeing. Also from a platforms perspective, what you're seeing is a lot of the back-end platforms that Policybazaar had built which have a lot of integrated capability in them, are somewhere being leveraged by Paisabazaar now because the Paisabazaar platforms were not of the same quality in terms overall ability. Policybazaar is perhaps one of the world's best sales platforms, whereas Paisabazaar was an early stage in that. A lot of changes are happening in the background which should make good sense. But on this part, very early days, so I wouldn't account for too much in terms of what's going to happen in mutual funds or investment products.

Yeah, just one small follow up to Sarbvir. You mentioned 25% of your sales team is deployed in these 200+ cities. What would this similar number would have been, let's say, last year?

It's been growing.

Maybe even 20%, maybe I don't know. See now, it is not growing at a very dramatic pace anymore. I think what is happening is it's deepening a lot more.

So which city, what kind of people, what mechanism. So in some cities the call centre person is taking calls and also doing physical meetings. In some cities,

we would have dedicated people who are only doing Feet on Street who get appointments. So it is a mixed model. What you can see is, it seems to have settled. On the assisted businesses, about 30% of our business is seems to be coming from physical meetings. This might grow a bit, I would say, if you look 3-4 years out, maybe it's 50%.

Got it. Thank you everyone and all the best.

Thank you, Dipanjan. We'll take the next question from Nischint, Kotak. Nischint, please unmute yourself. Yeah. Hi, hope I'm audible.

Yes, you are audible.

Thanks, just two questions. One is, what was the receivable figure as on June. I know you don't share the entire balance sheet, but if you could just share this number.

Rasleen can provide that to you. But I'm trying to understand the question behind the question. So look there is going to be till September, a little bit of drag on cash flow from normal course. That is because the collection is on 1/n basis. This is a cycle that's playing out since last September; it will play out till September this year. The other point is, of course, our Health is growing very rapidly, and that is where this 1/n has some impact. But at our scale, it's not material enough. It's just being digested in the flow, is what I would say, but Rasleen can share the exact numbers. Nischint Chawathe Sure, the other one was on tax rate. If you could guide, your tax rate is, I think, closer to 7-8%. So what sort of a tax rate would be for this year, and the next year. If you would give some guidance on that.

Yeah, Mandeep has got an opportunity to speak here.

Hi Nischint. So our tax is, primarily, if you track Policybazaar, you will notice that we have accumulated losses, the carry forward losses benefit which is available to us right now. And whatever tax we are paying is largely on our investment income which we drive from investing our surplus funds. So otherwise, there's no special tax rate to us. This is normal nominal rate of tax which is applicable to all businesses. It's just a combination of business profits, other income and carry forward losses.

But yeah, some where about 8-10% is, I think, the right number to assume for the next 18 months or so.

And the profitability guidance that you have shared in the past, that assumes 8-10% tax?

Have you seen ever heard us change our long-term guidance? No.

That's it. If we haven't changed now, it is so close to that. Why would we change it? No, I'm not saying change.

It stays exactly the way it is. Nothing ever changes. Please appreciate we don't give short term guidance. We usually give these 4 years or 5 years out. Let me give an example. Right now, we're saying we want to do ₹1 Lakh Cr of insurance premium in 2030. What if we do 95? Is that bad? Not really. If we do 105, if you do 110. Is that great? It's okay. The point is: we observe, we should be there, we put out a goal which is sort of feels good to everybody and we should be about there. Yeah, it's okay. I think then we feel confident that should be fine.

There will be no challenge there. Now, if people in their own mind assume it's going to be much more than that and much less than that, that's their minds working. That's not us saying anything. I want to point out one thing, and in this you will face challenges. Like just to give you the operational part of it.

Paisabazaar, in the year 2024 had a ₹64 Cr profit. They may barely hit ₹64 Cr in 2027. Now, when I put that out, obviously, I thought in my back pocket I had ₹200 Cr of profit from Paisabazaar. Because if it's gone from now, maybe the quality of that wasn't as strong, and that is why we are facing a challenge. But these things will happen, and we have always factored in sufficiently when we give our long-term guidance, for a few hits here and there. What I take heart from is not that gap on the Paisabazaar, what I take heart from is the quality of business is actually improving and now we have control over that quality of business. But I'm just trying to explain to you how, when you're managing stuff, some things will go wrong, and you have to always factor for that in and still achieve your plans. So, your plans will always have a bit of buffer.

Got it. Got it, fair enough. Thank you very much, and all the best.

And please appreciate. You know our Health growth is not helping our short- term profitability. But that doesn't mean we don't do it. It will be almost Harakiri to not do our fresh Health growth. That's true. That's true.

Yeah, thank you Nischint. We will take the next question from Nidhesh Jain, Investec. Nidesh, please unmute yourself.

Nidesh, I, 100% agree with whatever Yashish said. There's always tempting to make predictions for this year, next year, and all that but the truth of the matter is that at this point we have a favourable fresh to renewals ratio. Quality of our book is better than, I would say, average. We are actively managing the book, whether in the short run, in terms of disclosure, in terms of looking at different cohorts; how to manage that with our partners. The final thing I would say is that all that we are doing on the PB Health side, in a way, is going in that direction, that where we are saying that the industry will go more and more towards preferred networks, work more with providers who are providing a more efficient outcome both from a consumer perspective as well as from an economic perspective. I think over a period of time, we are part of the change that the industry is going towards, and the direction that the industry is going, and I think in that scenario we will get our fair share of what is what is due to us, and I don't, particularly at this point see that being a huge challenge. Having said that, if we don't act and we don't move in the direction that we ought to.

Then definitely, what you're saying is right, that there will be pressure on everything. I think that's how we look at it. It's a dynamic thing versus a static view of the world, and I we are moving directionally to solve these problems.

From contribution perspective, it will be closer to 30%; on adjusted EBITDA margin basis, it will be -20%.

I think till about July, August last year, we benefited because of very high approval rates in the industry. Today we are on the opposite side of that. We have bottomed out clearly. We are on a month on month growth course.

However, this is an issue you will see somewhere with our Savings business and with our Credit business. We are being benchmarked with our high marks. Our high marks were last year, August, September, and of course those were great positions. But we've been now benchmarked against that, and that's fine. I'm sure next year we'd be benchmarked against these lows, if anything, these may or may not be lows, so I think we are good to take that, and we'll move in that direction. As I said on the Saving side, the great news is Pensions, Child plans becoming much bigger part of the of the channel. On the credit side, the big advantages we are now becoming very good quality partners with our suppliers. I'm increasingly hearing from our suppliers that listen on your old book, I want to pay less, but in a new book maybe we can pay a little more, and that's a great sign, because that implies they are more comfortable with the quality. Of course, it's early days, but the focus is much deeper in terms of getting data pieces together, etc. But yes, there’s stress right now.

Sorry if you're looking at the core business because I was talking about just the insurance part. But if you're looking at the credit business, I think the insurance part is stable. I think it's at 43%. It's the credit business which is on the on the negative and that is what has caused the problem. The credit business has lost about 15% on the contribution margin.

claims. It's all been in the news. There's nothing I need to say there. That's the reality of the situation and they are looking for solutions, and that is where I believe exactly what Sarbvir said, that somewhere Policybazaar is coming out as their hand holder who can help at the point of claims, who can help at the point of issuance, who can give them the right guidance, who also keeps them on the right path in terms of disclosures and overall is part of the solution, and as that grows, the industry doesn't have a lack of opportunity. Our solutions may have had challenges with circumspectness, with covering all the different angles. As we start to cover all the different angles, and a solution does appear, I don't think that has a challenge in terms of growth. So somewhere, you're going to see a big transformation towards a more viable, more growing, more stable industry. We were discussing, in 10 years, our nominal GDP for the country is triple. There is no reason why insurance should not have been, 6x or 10x, given the under-penetration levels. And I think that's absolutely achievable as long as the right solution gets created in a very circumspect manner. That's a challenge. It's not an easy, trivial problem to solve.

One other thing Sachin, just think about insurance as a product. Eventually, you're getting into a contract where both sides have to be truthful. And if the disclosures are not up to the level it's required, that impacts the whole claim experience as well. So, it's a very tough situation for the industry, you're right.

People need to get this product early on in their career, in their journey but somewhere they think of the product very, very near to the actual claim incidents, and that obviously doesn't help anyone. So it will be more about education, it will take time. We do what we do, as Yashish said, I mean in terms of creating awareness, in terms of fraud control, in terms of higher disclosures, now trying to help customer with that claim for last couple of years; trying to look at the network hospital; everything. We are still a very small part of the total industry, so, we can do what we can do.

immediately something which is going to impact in next quarter or two quarters. It's planning for next few years of how we see industry shaping up, and we need to be ready when that opportunity appears. So this will take time, I think in about a year time, you'll start to see some impact. You'll have to give us almost a year from now.

And Sachin, just to kind of answer that question. We already have a consumer base. What should we be doing with our consumer base. People who are not very well, we should start working with them and trying to make sure they take the right steps to stay out of hospital. We should start to guide our people at the point of renewals towards narrow networks. We should start to guide our people/our consumers towards using hospitals appropriately in terms of different care pathways, at home care, day care, secondary care, tertiary care.

I think you will see us acting on all those steps, which apps are absolutely integrated into making health insurance more viable for the same consumers, and giving them a great walk-in/walk-out experience. Now please do appreciate whatever I said all of that does not necessarily require us to be in the physical infrastructure. So, you will see the whole thing playing out. There are a lot of actions that will happen even before the physical infrastructure comes into place. And I think, as you see the next few quarters, you will hear a lot more action happening from our side on that front along with our partners.

I think we, as an industry, need to work together in solving this problem.

Hi, morning. Thank you for taking my question. So first if I calculate the core insurance renewal take rate. I'm not seeing any improvement over there.

I would have expected some improvement over there, given that over the years we've been selling more Health. So, what exactly is causing this drag. Second, if I look at the indirect costs of the new initiatives, that have grown pretty sharply in this quarter. So, my calculation suggests that's grown about 41% YoY.

I wanted to get a sense of what is driving this and on a continuing level, what should that sort of number be? Third Health business is growing really well for us and we're saying that new business Health growth is at 65% YoY. I wanted to get a sense of what is the porting business over here and how much of the porting is from within our customer base opting for a new sort of insurer? How much of the porting is from outside our customer base who are coming to us? Those would be my three questions.

I have some data keeping questions also, which I'll go later.

On the renewal take rate. FY24, we were at 6.5%; FY25, we were at 6.7%; now, we're at 6.9%. These are not going to change dramatically, but they are sort of on the way up, if anything, and that is reflective of the fact that Health is becoming a larger part of the renewal base. In APE terms, it remains pretty stable, because our renewal rates of Life are also very high. And what happens is that Health, the vintage renewal take rates are obviously lower than the first- year renewal take rate. So actually, there are lots of puts and takes Madhukar.

I think you're going to a level of detail which is hard to model from the outside.

So that's the only reason, otherwise as Yashish said, they have inched upwards over the years.

Over the years, yeah, that's right. But I was just looking at it on a YoY basis like Q1 to Q1. But I get your point.

I would encourage you to look at these things on a rolling 12-month or a year over year basis. It's very hard to model months. Understood, understood. Got it.

I think both the indirect costs on new initiatives as well as the port questions I would defer to Sarbvir. But on the port, I would essentially say, we are part of the solution, we're not part of the problem, but I'll kind of leave you there.

First of all, for our own base, we don't port. We do not encourage customers to renew with another insurer. That's why, if you see the same insurer renewal rates in Health are extremely high. We do not do any kind of porting at that level. Number two on the fresh business, I can give you an exact number: 82% of the business that we did was from “New-to-Insurance” customers. They may have had a corporate policy, but they did not have a retail health insurance policy. I think that should give you a sense and this number, actually, if anything has grown. We have less porting now externally, than we had last year.

Madhukar, we are the beautiful solution. We're not the problem is all I would say.

Thanks for that. On the indirect costs on the New initiatives?

I would say Madhukar, we are very acutely conscious that, especially in the PoSP business, it is a business where costs have to be controlled. Yashish explained, very well upfront, that it's a fixed business. You'll have to cut the cloth to what you have. I think over a period of time all other costs will be controlled, and will come down in any given quarter, it may have been up or

down, depending on some investment in people, some investment that we may be doing towards something. It's nothing more than that.

Alright and just some data keeping questions. Can you give us the renewal premium breakup of POSP, UAE and Corporate?

Yeah, sure. POSP would be about ₹180 Cr. UAE would be about ₹111 Cr and Corporate is a huge ₹292 Cr. That's the beautiful part about the Corporate business, and I think that's where I'm taking a lot of heart over the years. Our renewal rates are very strong. So ₹292 Cr of renewal. Just to kind of put this in perspective, if you look at our total business last year, same quarter, from Corporate is ₹272 Cr and we've done ₹292 Cr of renewals. So, if anything, our premium from the ₹272 has grown, which is a signal of how the Corporate business kind of is edging and it's largely built on renewals.

Right. Great. Thanks for this and all the best.

Thank you, Madhukar. We'll take the last question from Prayesh, Motilal. Prayesh, please unmute yourself.

with their cohort of customers, they would work towards improving the lifestyle of these people, so they stay out of hospitals. In case they do need to get go to hospital, they break them down into care pathways, and they say, listen, if you have malaria, you don't really need to be in a hospital, the chances are you will probably catch a bug in the hospital which would be more serious for you. Maybe at-home care is much better, and so you need to invest in that.

And for that there is infrastructure that needs to be built. Maybe there are day- care centers. So if you need an operation, a bulk of those should happen at day- care centers so that people can come and go back. Today, a 24hr insurance thing is there, that look, if you're not hospitalized 24 hr, pre-hospitalization, post-hospitalization, the coverage rates could be challenging. So the industry has to go through a transformation. To the specific question, of course, every partner in the industry is doing this. There is no doubt the entire industry is moving towards a narrower network, towards a more managed care approach.

We cannot have as an industry, a conflict of interest with our suppliers. Our suppliers currently have a conflict of interest. They make more money, when we lose money. Essentially as an industry, whenever we lose money, our partners make more money. So that imbalance can somewhere only be corrected if you have some active role in that, and you'll have an active role if you're adding value to your customers. So yes, that's the journey we are on, and every partner is with us in this. There is no doubt about it. We are with our partners in this. Like it's not just us. It's the whole industry.

First of all, is this a second attempt at mutual funds, if I recollect well?

Paisabazaar earlier also had some mutual fund business and is this new avatar, or what is it? And second you have so much competition on the direct side with these discount brokers, giving all the tools for investing as well as advising. So what is the right to win that you would have to kind of grow this business?

the PB money app that we have, we can get consumers, and our attempt is to give an array of offers, which goes from corporate bonds to bonds, to mutual funds, to some of the insurance products, and, yes, mutual funds also. But that said, it is very, very early days for us to comment on whether we will be successful, what is our right to win. Unless Santosh, you have a different answer on this.

No, absolutely, I think the fact that Mutual Fund is a large part of household savings for the country today. I think that gives lot of confidence that we should be in this area and PB Money is now far more mature as a business to be able to talk about savings as a holistic solution, and I think mutual fund sits very well as part of that solution. And over time, we'll have an answer of right to win. I don't think we have that answer very clear upfront today, but there's a play for another partner, and if we execute well, this will definitely be a business to win.

Yesterday, Alok and I were also discussing this. As I look out into the medium to long term, I actually see Paisabazaar now in a position where it will become a very, very strong player. I have a lot of confidence. I, at a fundamental level, and again, this is something I was discussing with Alok. Businesses don't succeed or fail because they are great businesses, they succeed or fail because the people are very aligned to building them for the long term, and those people are of great quality. And I feel more confident than ever that we have that alignment and we have that team now, which is moving in absolutely the right direction. Rest, I could be proven wrong here, but I think that's our bet here, and let's see, how we fare on it. It's very early days right now.

We are in dumps right now, as far as Paisabazaar is concerned. We couldn't be in a worse position from a financials perspective, but we couldn't be in a better position from a team perspective. Rasleen's saying, time out.

Thank you everyone for joining. For any residual questions, please reach out to us on investor.relations@pbfintech.in. Have a good day.

Thank you guys. Thank you very much everyone.