Aditya Birla Capital Ltd (NSE: ABCAPITAL) Q1 2026 Earnings Call dated Aug. 04, 2025
Corporate Participants:
Unidentified Speaker
Vishakha Mulye — Managing Director & Chief Executive Officer
Vijay Deshwal — Chief Strategy Officer and Head of Investor Relations
Rakesh Singh — Managing Director and Chief Executive Officer, Aditya Birla Finance Ltd
Pankaj Gadgil — MD & CEO
Kamlesh Rao — Managing Director and Chief Executive Officer, Aditya Birla Sun Life Insurance
A. Balasubramanian — Managing Director and Chief Executive Officer, Aditya Birla Sun Life AMC Limited
Mayank Bathwal — Chief Executive Officer, Aditya Birla Health Insurance Company
Analysts:
Unidentified Participant
chintan shah — Analyst
avinash singh — Analyst
abhijit tibhal — Analyst
kushan parikh — Analyst
puneet bahlani — Analyst
Presentation:
operator
Good. Day and welcome to the aditya birla capital limited q one fy twenty six earnings conference call as a reminder all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes should you need assistance during the conference call please signal an operator by pressing star then zero on your touchtone phone i now hand the conference over to miss vishakha muliye maryland and ceo aditya birla capital limited thank you and over to you ma’ am.
Vishakha Mulye — Managing Director & Chief Executive Officer
Good evening everyone and welcome to the earnings call of aditya birla capital for q one of fy twenty twenty six joining me today are senior members of my team balak dakish pankaj kamlesh mayank pinky vijay ramesh and deep i will cover our strategy financials and business performance and vijay will cover key financials and the business highlights followed by a discussion on the performance of our key businesses by our business ceo the global macroeconomic environment continues to remain uncertain due to tariff related negotiations and geopolitical tensions in this global backdrop the indian economy presents a picture of strength stability and opportunity cpi inflation has softened significantly over the last six months and the progress of monsoon shows encouraging signs for a strong tariff output rbi has reduced repo rate by fifty basis points has taken various measures to improve system liquidity and stimulate growth at aditya birla capital we continue to focus on driving quality and profitable growth by leveraging data digital and technology our customer centric approach enables us to provide simple and holistic financial solutions in a seamless way prudent risk management practices form the bedrock of our approach which has enabled us to protect capital and deliver risk calibrated and sustained sustainable returns across businesses we also continue to strengthen our omnichannel based distribution network coming to the financial and business performance for the quarter one growth and profitability during q one of fy twenty six the consolidated profit after tax grew by ten percent year on year to eight hundred thirty five crore rupees and the total consolidated revenues grew by ten percent year on year to eleven thousand three hundred and thirty three crore rupees in our nbfc business disbursement increased by eighteen percent year on year to fifteen thousand eight hundred and fifty one crore rupees in q one of the current year the nbfc portfolio grew by twenty two percent year on year and four percent sequentially to about one point three one trillion rupees we had mentioned in our previous quarter’s earning call that we have taken several proactive interventions over the last few quarters in unsecured loan segments that is personal and consumer loans and business loans to sme’s by tightening the underwriting norms calibrating the sourcing and reducing the exposure to the smaller ticket size loans now talking about personal and consumer loans the environment seems to have settled we have put in place several building blocks to pursue the growth we strengthened our internal sourcing channels and our products underwriting sales and distribution teams and recalibrated our sourcing from digital partners i’m happy to share that these steps have resulted in disbursement in the personal and consumer segments growing by twenty eight percent sequentially and sixty five percent year on year to three thousand nine hundred forty seven crore rupees in the current quarter we will continue to monitor the macroeconomic conditions in this segment closely however there are still uncertainties in the smaller ticket size unsecured msme segment and we continue with our cautious approach towards the growth and tighten our underwriting norms in this portfolio disbursement in the unsecured loans to sme grew by one percent year on year and decline of eight percent sequentially the secured sme’s and corporate and mid market segments continue to show steady growth the secured business loans to sme’s grew by twenty seven percent year on year and four percent sequentially the corporate and mid market portfolio grew by twenty eight percent year on year and four percent sequentially our portfolio quality continues to remain stable gross stage two and fee loans declined by seventy five basis points year on year and eight basis points sequentially to three point seven percent as of june end about seventy four percent of our portfolio is secured and the provision coverage on stage three loans is forty one point two percent as of june end further about fifty three percent of our stage three three loans in unsecured sme business loan segment are covered by the central government’s guarantee scheme our credit cost in the current quarter is one point three percent and we expect that it will remain in a similar range for fy twenty six the profit after tax for the nbse segment grew by eleven percent year on year and six percent sequentially to six hundred eighty nine percent in q one of fy twenty six the roa of the nbsc segment was two point two five percent which is at a similar level compared to the previous quarter coming to our hsc business we had created a full stacked franchise focused on both prime and affordable segments in q one of fy twenty six we continued to deliver on the strong growth momentum and gained market share as seen in fy twenty five our disbursement grew by seventy six percent year on year to more than five thousand four hundred crore rupees during the fourth quarter this has resulted in our hsc portfolio growing by seventy percent year on year and eleven percent sequentially to thirty four thousand six hundred five crore the credit quality in hsc portfolio portfolio is among the best in class with a stage three loans declining by ninety seven basis points year on year and four basis points sequentially to zero point six two percent the net stage three ratio was zero point three percent we are seeing benefits of the investments made in distribution data digital and emerging technologies over the past two years in the form of operating leverage kicking in the opex to assets improved by thirty two basis points sequentially to two point five nine percent in the current quarter the roa of hse business increased by fifteen basis points to one point five nine percent and roe increased by one hundred thirty two basis points to twelve point two seven percent moving on to the asset management business during q one of fy twenty six our average aum grew by fourteen percent year on year and six percent sequentially and crossed four trillion rupees equity aum increased by eleven percent year on year and seven percent sequentially we have seen a strong momentum in the net sales and an improvement in the performance of our funds with eighty to eighty five percent of the aum and in the top two quartiles for the six month return the profit after tax grew by eighteen percent year on year to two hundred seventy seven crore rupees in q one of fy twenty six moving on to the insurance businesses the growth in the life insurance business continues to remain strong our individual first year premium growth of twenty three percent year on year in q one of fy twenty six was significantly higher than the private industry growth of eight percent our market share increased by about sixty basis points year on year to five point one percent we continue to be in the top quartile in the industry in terms of thirteenth and sixty first month persistency the high quality of business along with a well carbonated product mix and product construct and an increase on the rigor attachments are led to one hundred and ten basis point year on year increase in a mip vnb margin to seven point five percent in the current quarter in the health insurance business we continue to be the fastest growing standalone health insurer our grossness in premium grew by thirty percent year on year driven by a differentiated health first model and data enabled approach towards customer acquisition excluding the impact of multiyear guidelines the growth in gwp was forty percent our market share among the sahees has increased by around two hundred basis points year on year to fourteen point five percent in q one of fy twenty six our combined ratio has improved to one hundred eleven percent in q one of fy twenty six going forward we will continue to grow our business driven by our differentiated health first model and again market share coming to our omnichannel architecture for distribution our omnichannel architecture allows customers to choose the channel of their choice and interact with us seamlessly across digital platform branches and vrms fostering the engagement and loyalty our b two c platform abcd went live about a year ago it offers a comprehensive portfolio portfolio of more than twenty five products and services such as payments loans insurance investments and help customers to fulfill their financial needs abcd has witnessed a robust response with about six point four million customer acquisitions till date a comprehensive b two b platform for msme ecosystem udyoplus continues to scale up quite well it has reached and an aum of three thousand six hundred and fifty eight crore rupees in two years of its launch udyopolis now contributes about thirty percent of a year of unsecured business loans abg ecosystem now contributes about thirty seven percent of the disbursement on udyoplus we added sixty seven branches during the quarter and we had one thousand six hundred ninety branches across all different businesses as of june end we are focused on capturing five spaces and driving penetration into tier three and tier four towns and new customer segments we now have over one thousand co located branches across more than one abc two hundred fifty locations going forward we will continue with our approach of driving quality and profitable growth now i request vijay to briefly cover the financial performance of our key subsidies for the quarter over to you vijay.
Vijay Deshwal — Chief Strategy Officer and Head of Investor Relations
Thank you vishakha and good evening to all of you vishakha covered the consol highlights. I’Ll now cover the standalone financials and. Key business highlight for abc during q. One of fy twenty six the standalone. Profit after tech grew by three percent year on year to six hundred and seventy six crore rupees on a standalone basis the tier one ratio is fifteen point six two percent and total capital adequacy ratio is eighteen point one one percent standalone return on equity adjusted for investment in subsidiaries and associates is fourteen point four percent in q one of fy twenty six in our nbfc business the portfolio grew by twenty two percent year on year and four percent sequentially to about one point three one trillion rupees nim including fee income was five point nine seven percent for the quarter the credit quality of nbfc business segment continues to be healthy with gs two and gs three loans improving by eight basis points sequentially to three point seven percent as of june end roa of the nbfc business segment was two point two five percent our housing finance business continues to see strong momentum the loan.
Portfolio grew by seventy percent year on. Year to thirty four thousand six hundred and five crore rupees during q one fy twenty six we further infused gross equity capital amounting to two hundred fifty crore rupees in our hfc subsidiary this. Is done to support the growth momentum. And maximizing our share of opportunities which vishakha mentioned earlier we are seeing operating leverage kicking in with opex to aum improving by thirty two basis points sequentially the roa of our hfc business increased by fifteen basis points sequentially to one point five nine percent in q one of fy twenty six coming to our. Asset management business fourteen percent year on. Year and six percent sequential to more than four trillion rupees of which equity aum was approximately forty four point seven percent alternate aum including real estate grew two point six four times year on year to thirty nine thousand seven hundred eighty four crore rupees in q one fy twenty six in the life insurance business our first year premium increased by twenty three percent year on year the. Net dnb margin increased by one hundred. Ten basis points to seven point five percent and absolute net vnb increased by twenty seven percent year on year to sixty six crore rupees in our health insurance business our unique and differentiated health first model helped us to deliver a growth of thirty percent year on year in gross return premium during fy over fy twenty five excluding the impact of multi year guidelines the growth in gwp was forty percent i now hand over to rakesh executive director and ceo nbfc to cover the nbfc business performance thanks.
Rakesh Singh — Managing Director and Chief Executive Officer, Aditya Birla Finance Ltd
Vijay and good evening everyone the nbsc business grew by four percent quarter on quarter and twenty two percent year on year making the aum to rupees one. Thirty one thousand two hundred twenty seven. Crores in quarter one fy twenty six profit delivery was strong registering sequential growth in quarter the quarterly pack in quarter one we disbursed fifteen thousand eight hundred and fifty one crores which is eighteen percent higher year on year of the total disbursement secured business loans to sme was thirty eight percent personal and consumer segment was twenty five percent and corporate and mid corporate was twenty thirty percent in the personal and consumer loan segment we have been on the calibration journey since last few quarters we reached an inflection point last quarter where degrowth was arrested i’m pleased to share that the disbursement in this segment expanded sixty five percent year on year and twenty eight percent quarter on quarter and the aum grew by six percent sequentially to sixteen thousand four hundred forty six crores this was supported by our disciplined approach to customer segment selection a revamped underwriting policy and proprietary journey designed to deliver superior customer experience and maintain end to end control throughout the lending life cycle from underwriting to collections while we believe the environment is attaining stability we will continue to monitor the trends in macroeconomic environment as vishakha highlighted there are still some uncertainties in the macro environment in the small ticket unsecured msme segment where we continue with our cautious approach towards the growth and tighten the underwriting norms for this portfolio unsecured loans to sme’s declined eight percent sequentially the aum for secured business loans to sme grew four sequentially and twenty seven percent year on year the growth has been largely driven by scaling direct sourcing efforts through our branch networks talking about credit quality our gs two and gs three book declined by eight basis points quarter on quarter and seventy five basis points year on year to three point seven zero about seventy four percent of our book is secured and has stated book is well provided with a pcr of forty one point two percent about fifty five percent of our portfolio comprises of business loans to sme’s of this forty six percent is secured while the asset quality continues to be robust on the back of strong cash flows and collaterals in the sme secured segment and is amongst the best in the industry the unsecured sme business loans portfolio is about nine percent of our overall nbse portfolio of this supply chain financing with the underlying trade is about one point six percent of the overall loan book business loan is six point five percent and small ticket unsecured loans is one point three percent the credit quality of the supply chain and business loans continues to be resilient in terms of bounce rate forward flows and delinquencies as we have highlighted in our previous calls we have taken several proactive interventions in small ticket unsecured loan segment that is personal and consumer loans and business loans to small and micro businesses over the last few quarters we which vishakha also highlighted in the opening remarks we have been preemptive in making these interventions and will continue to have a cautious approach in the small ticket unsecured business loan segment which we would like to reiterate is less than one point five percent of the total portfolio the gross fee stage in the unsecured business loan segment was at five point four percent and the provision provision coverage is thirty five point seven percent further about fifty three percent of our stage three in this segment is covered by central government’s guarantee scheme as a result we believe stage three loans in this segment are adequately provided for in the personal and consumer segment we have largely run down our legacy portfolio sourced from digital partners the credit quality indicators such as bounce rate forward flow rate and delinquency rates in the portfolio are now stacking up well stage three for personal loans and consumer loan segment has improved by thirty basis points sequentially and seventy basis points year on year to two point five percent as of june twenty fifth the overall credit cost has reduced by thirteen basis points year on year to one point three percent and we believe that credit cost for fy twenty six will be in the similar range moving to profitability our interest net interest income has increased by nine percent year on year and four percent sequentially to eighteen fifty nine crores net interest margin including fee was at five point nine seven percent in the current quarter our office to aum ratio improved eighteen basis points sequentially and twenty three basis points year on year to one point seven four percent and this has largely been driven by operating leverage as we continue to sweat out our new branches open over the last twelve to eighteen months in quarter one we delivered profit after tax of rupees six hundred eighty nine crore registering a growth of six percent quarter on quarter and eleven percent year on year the roa for the quarter was at two point two five percent moving forward we expect the mix of retail and msme segments to improve and we will continue to leverage our proprietary digital platforms which is abcd app and udio plus and invest in branches to further further improve share of direct sourcing as we scale up strengthen our capabilities and invest in technology our primary commitment remains to deliver sustainable returns in the upcoming quarters with this now i will hand it over to pankaj for housing finance Business
Pankaj Gadgil — MD & CEO
thank you rakesh and good evening to everyone on the call i am pleased to share that qlfi pendulum is yet again a strong quarter for us in terms of disbursement good growth and asset quality the key highlights for q one fy twenty six are disbursement for the quarter stood at rupees five thousand four hundred four crores a seventy six percent yoy increase versus rupees three thousand sixty eight crores in q one of fy twenty five now we are amongst top three private housing finance companies in terms of disbursements the abg ecosystem accounted for fifteen point four percent of retail reimbursements in q one fy twenty six aum as of june twenty fifth reached r’s thirty four thousand six hundred and five crores reflecting robust growth of seventy six percent bioi and eleven percent qoq.
Profit before tax at rupees one hundred. Fifty four crores up eighty two percent bioi and twenty seven percent stage two and three assets reduced to one point three four percent improving one hundred and twenty nine basis points by oi and five business points qoq roa stood at one point five nine percent and roe at twelve point two seven percent for the quarter as communicated earlier last year was a year of strategic investments for us and we are now beginning to see the operating leverage play out this is reflected in a thirty two bps sequential improvement in operating expenses as a percentage of average loan book our cost to income ratio reduced by five hundred thirty basis points qoq and roa improved by fifteen basis points qoq with this.
We remain well on track to achieve. An roa of between two to two point two percent over the next eight quarters in magnolia guidance for more detailed financials please refer to slide thirty let. Me now provide a quick update on. A few aspects of our growth during the quarter aum growth is at three thousand five hundred fifty three crores versus rupees nineteen seventy nine crores in q one fy twenty five this growth has been well balanced across both the prime and affordable segments our portfolio remains well diversified with retail owners at present fifty five percent lap at thirty percent and ca at fifteen percent we expect to maintain the construction finance book within this range our average retail ticket size stands at rupees thirty lakhs reflecting the graduality of the portfolio happy to share that as of today we have crossed one lakh active retail customers on asset quality los nt has improved significantly from one point six percent in june twenty fourth to zero point six two percent in june twenty twenty five which is a reduction of ninety seven basis points our phase three provision coverage ratio stands at fifty two point four percent proactive pre.
Delinquency management measures powered by analytics and. Strengthened by digital collection infrastructure continues to support improvements in asset quality next moving to the liability side the share of ncds in our funding mix has increased from twenty seven percent in q in q one fy twenty five to forty five percent in q one fy twenty six term loans correspondingly reduced from thirty seven percent in q one fy twenty five to thirty one percent in q one fy twenty six our cost of borrowing has improved by eleven basis points qoq and now stands at seven point six nine percent in line with reduction in cost of borrowings we have passed on a fifteen basis point net cut to our retail customers effective from july twenty twenty five on the digital front we continue to see higher adoption of our digital platforms by employees customers and channel partners we’re also seeing early traction in adoption of ai copilots for employees resulting in higher productivity in summary we have delivered strong consistent performance across all business segments supported by growth in vum improved asset quality advancing digital capabilities and increased profitability thank you for your attention with that i will now hand over to bala maryland and ceo of our asset management company
A. Balasubramanian — Managing Director and Chief Executive Officer, Aditya Birla Sun Life AMC Limited
thank you pankaj and as i present the amc analyst call abso amc have witnessed this healthy business momentum in qr fy twenty six the next is for the first quarter length is that twenty five driven by improved fund performance across categories and various ongoing initiatives to increase the engagement of the market participants also mention our overall market share over the last two quarters we achieved a significant milestone by crossing four lakh crore in mutual medium during the quarter with our quarterly average aem reaching four point zero three lakh crore the robust fourteen percent year on year growth demonstrates the unwavering commitment to attend the growth our overall asset management including alternate assets stood at four point four three lakh crore growing by twenty one percent year on year the quarterly equity average aem was at one point eight lakh crore growing by eleven percent year on year our fip contribution for june twenty fifth was at eleven forty crores with thirty eight point six lakh accounts our sap aem contributes around forty percent of our total aem referring to the stickiness of the assets the total number of industrials full year for june twenty twenty five stood at one point zero six crores witnessing fourteen percent year on year growth on the equity investment front we are witnessing a consistent improvement with strong returns delivered across multiple categories while patient plan performance continues to be a robust across the category we continue to focus on expanding our product offerings to meet the investment needs of our diverse and growing investment detail on the alternate side we are continuously enhancing our pms and aif offerings across equity and fixed income segments to serve snis and family offices strong interest in our aif offering and growth summit events that we have been doing across the country giving us the good opportunities or in the respect of the esic mandate we commenced managing debt portfolio and its aam to twenty percent to sixty crores for the water ended june twenty june thirty first twenty twenty five continuing our pms and aif assets witnessed an impressive eight times those rising from three thousand three hundred and sixty eight crores in q one fy twenty five to r’s twenty eight thousand six hundred forty seven crores in q one fy twenty six as the present we have completed the first close of our adsl structure opportunity fund till two income project and also preparing to launch absl india equity innovation fund building a comprehensive product portfolio address the evolving client needs and accelerates our cms ai business growth our offshore assets stood at ten thousand five hundred and eighty eight crores in q nine fy twenty six under gypsy platform we have the fundraising activity for the india as engagement fund absl flexigap fund and absl global blue chip fund at passive plan we have reached thirty six thousand four hundred crores in aum as of june twenty twenty five at twenty two percent year on year growth with twelve point three lakhs polios across fifty two distinct products we continue building scale through innovative etf index funds and funda fund launches while driving acquisition via digital platform and distributors moving on to the financials q one fy twenty six revenue from operations is at four hundred forty seven crores up sixteen percent year on year q one fy twenty six operating profit is at two hundred fifty four crores of twenty one percent year on year q one fy twenty three profit before tax is at three hundred seventy two crores up twenty two percent year on year and qn fy twenty six the profit after bank was two hundred seventy seven crores up eighteen percent year on year with this i’ll hand it over to kamlesh rao mdn ceo Of i insurance
Kamlesh Rao — Managing Director and Chief Executive Officer, Aditya Birla Sun Life Insurance
thank you bala and good evening to all of you the individual new business premium for the life insurance industry grew by five percent and for the private players by eight percent ebsni crossed the highest individual premium growth of twenty three point four percent in q one of ranch twenty six among the top ten players and expanded market share by about six percent. Growth for. The first quarter was across channels with the proprietary channel showing a growth of nine percent while the partnership business grew at thirty four percent robust business growth across all our existing partners as well as the new partnerships in bank of maharashtra idfc bank and axis bank where we have increased our mind share in the current quarter agency business had a slow start in april and then gradually caught up with double digit growth in the next two months our growth was slightly better compared to the agency performance for the entire industry for q one which remained largely flat during this period during the quarter we have added seventeen branches continuing our focus on expanding the proprietary business on the partnership side we now have twelve bancar tie ups and the most recent one equitas small finance bank started business setups from june twenty fifth onwards in the product mix of the individual business traditional business including protection contributed sixty nine percent and europe was thirty one percent we launched two new products during the quarter one in the participating portfolio called akshay plan and second in the protection segment named the supertrump plan akshay power plan contributed to twenty percent of our mix in the individual business portfolio while the super term plan which was launched in june took our protection mix to four percent we have bundled all desirable features in one term plan including risk management services and have launched our digital campaign for this product we will continue recalibrating our product mix in line with customer demand and our extensive product suite will ensure that the demand of the customer are well catered to in the group life insurance segment both the private and the overall industries saw modest growth of three percent absli reported a fifty one percent decline this was largely strategic for the traditional fund business wherein we have decided to slow down the momentum on account of the reducing interest rate scenario as large acquisitions now would bring down the ytm of this portfolio the group fund business across the industry remained largely flat during this period in the group business we continue to be at ranked number two in the unip aum in the industry with an aum size of thirteen thousand five hundred plus crores credit life business also had a growth of twenty percent with attachment ratios going up in on the group term life business we continue remaining focused on expanding the margins and have done well in this quarter group aum contributes to twenty seven percent of the overall aum at ets alliance renewal premium grew by eighteen percent with growth across individual and group segment our total premium for the quarter stands at three thousand five hundred ninety four crores down ten percent from last year again on account of lower group traditional fund business as planned and mentioned earlier our digital collections now account for eighty one percent of our renewal premium we continue to work on customer lifetime value which is reflected in our upsell ratio of thirty percent on quality parameters our overall customer nps now stands at sixty two compared to fifty five last year same time whilst the thirteenth month and sixty first one cohorts have seen a marginal diploma all other cohorts of persistency of twenty fifth thirty seventh and forty ninth have gone up we continue being in the top tier in terms of persistency for the quarter our opex to premium ratio stands at twenty seven point six percent which is higher than last year again due to the lower group traditional fund business as brandon mentioned earlier absli crossed a total aum of one lakh crore in april twenty fifth and now stands at one three thousand eight hundred six seventeen crores a yoy growth of fourteen percent twenty five percent of this area is in equity and the balance seventy five percent in debt we continue to outperform in our investment performance in respective benchmarks across all three categories of equity debt or even balance funds either from a one year or a five year perspective our digital adoption across various areas is demonstrated in the investor deck in slide forty six one hundred percent of nimble blue customers onboarded digitally eighty three percent of all our services are now available digitally sixty seven percent of our services are stp and our customer self service ratio now stands at ninety three percent as we go ahead we will continue to be best in class with our digital infrastructure across prospecting and onboarding and sales underwriting and customer service as well as claims during the quarter we raised two hundred crores via subject to fund our business growth our solvency continues to remain healthy at one hundred and ninety two percent our net margins are now at seven point five percent one hundred and nine basis points higher than last year same time we observed margin expansion due to a controlled unit mix value accretive growth in our partnership business as well as increased rider attachments we maintain our guidance to expand net pmp margins through this year to achieve an eighteen percent plus for the year we also maintain our guidance to grow individual fip at a cagr between twenty and twenty five percent for the next three years and in absolute numbers double the value of our next enb in the same time period with this i’ll hand over to mayank md and ceo of our.
Mayank Bathwal — Chief Executive Officer, Aditya Birla Health Insurance Company
Health insurance thank you kamlesh and i will now share an overview of the performance of our health insurance business we had a very strong start to the financial year twenty four in the first quarter maintaining our track record of consistently outpacing the market growth while sustaining the momentum group profitability in q one fy twenty six without the multiple accounting norms we achieved a gross premium of around four hundred sixty one crore delivering a strong forty percent variable on a one by one one by n basis our gross revenue stood at one three five seven crores in a thirty percent growth there’s a market share among psych has increased from twelve point five percent to fourteen point five percent in the accounting rate an increase of two hundred basis points including the multi year accounting you know impact of multi year accounting norms we on an accounting basis we achieved the highest market accretion as shown in slide fifty three amongst all sizes highlighting our underlying growth momentum we registered a strong growth moment across both retail and group businesses the retail business registered a growth of thirty nine percent in the first quarter the growth in retail franchise is driven across all our retail channels proprietary channel with an advisor count of over one point five lakh regions experienced a twenty six percent ymy growth all our major banks and digital alliance partners have also experienced strong growth in excess of fifty percent to further expand our pse position we have now successfully onboarded bank of india our corporate business delivered a strong forty one percent growth in q one driven by our focus and disciplined strategy in this segment at times we are asked on our relatively higher proportion of group business which i’d like to reiterate in our strategic choices in this segment are to create a very sustainable group business we understand amongst the very few players to have a profitable.
Group business in the industry we do. This by playing a very specific corporate in the very specific corporate segments like lit corporate and sme and also specific industries more so in the services sector as we now take our differentiated health first insurance model to corporates also we will only further improve our competitive health. We are also pleased to report that. Our net loss for the first quarter stood at thirty six crores as per new counting norms as per the old norms the net loss stood at twenty four crores which is fifty percent lower in the same period loss of fifty one crores last year our combined ratio for the first quarter as for all accounting dilution is at one hundred seven percent versus one hundred twelve percent on a comparable basis these improvements underscore our continued focus on new technomics and that overall profitability ahead of market has been demonstrated last year by one of the fastest great units of scale we are operating on we strongly believe our over growth and superior unit promise are driven by our digitally enabled and differentiated health first business model with our consumers experience for flagship product active one this model gives us a selection advantage with larger share of the more health conscious customers and then based on a very hyper personalized but scale health engagement access to a deeper understanding of the health profile of our resource base in q one fy twenty six nine point one percent of the eligible customers earned good health based incentives up from zero point six percent last year reflecting deeper engagement with our wellness ecosystem these customers continue to exhibit four percent lower loss ratio than ten percent benefits these are shown in slides fifty six and fifty seven similarly when we invest in managing our customers with high health risk their loss ratios improved by more than four point nine percent overall this has kept our retail loss ratio well in control in our bid to expand the scale of impact of the model we continue to innovate for example in our recent collaboration with a leading wearable brand in india we now have customers who get access to wearables as part of our product offering and those further helping us getting access to a larger pool of customer we hyper personalized scale health engaging with our customers is mainly enabled by industry leading customers active health and this now provides an opportunity for non policyholders also to experience our comprehensive and compression ecosystem given our large data focus we have now we have been investing consistently in our data analytics play to consistently create efficiencies that across the entire business life cycle we have given some examples of the key use cases across sales customer engagement and claims in slide sixty two looking ahead we remain optimistic about the long term growth prospects of the health insurance sector which continues to have large scale differentiated business model will help us blend well line in the market as we have guided earlier we will continue to strive for one hundred percent core expert accounting solutions in the current year itself thank you and i now hand it back to vishaka for approving remarks thank you mayam this concludes our remarks on our q one s five hundred twenty.
Six performance and we will be happy. To take any questions.
Questions and Answers:
operator
Thank you very much we will now begin the question and answer session anyone who wishes to ask a question may press star and one on their touchstone telephone if you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question ladies and gentlemen we will wait for a moment while the question queue assembles the first question is from the line of mister chintan shah from icici securities please go ahead sir.
chintan shah
Yeah thank you for the opportunity and firstly congratulations on good good set of numbers so yeah firstly on this unsecured msmeps where we have told you there are some uncertainties in the portfolio and we are seeing some kind of stress and adopting a cautious approach so just wanted to understand what is our customer profile here typically how much will be the unsecure self employed professional mix in the total pool and secondly on the guarantee scheme which we are highlighting fifty three percent of the portfolios covered on the guarantee so how does this guarantee actually work and how much what is the typical timeline to get the money and what is the final cost which you have to bear in case of your guarantee that’s the first question.
Vijay Deshwal
So. Your first question on the unsecured sme if you look at our total book is twelve thousand crore out of that one point six percent of supply chain which is short term underlying trade or invoices so very low risk then we have six point five percent which is business loans which where the portfolio performance is very very good in terms of bounce rate or forward flows or delinquencies are looking pretty good the small ticket unsecured loan we call it stul that is around one point three percent of our overall loan book we had started taking action some two three quarters prior and we have tightened our underwriting and underwriting collection scorecards so all of that we took a proactive action on this portfolio so that’s the only portfolio where we are slightly cautious at this point in time in terms of your second question how much is the guarantee portfolio if you look at the state c portfolio in unsecured business close to fifty three percent of the state fee is guaranteed by the cgtsme or the government guarantee which we spoke about how much of that gets covered seventy five percent of the principal gets covered by the.
Guarantee. And timeline it takes between twelve to eighteen months in terms of getting the refund and all that time and i think our track record has been pretty good on this and we have been getting the refund and the claims from the cgtsm.
chintan shah
Sure and so on this portfolio when can we see normalization of reimbursement so where do you see the kind of normalcy kicking in for this portfolio so if you look at.
Vijay Deshwal
Our business loans we will continue to grow our business loan portfolio in that segment that’s holding up very well and is performing and that’s quite quite a whole portfolio we have been doing that business for the last eight years or so that’s holding up quite well from our bounce rates forward flows and delinquencies so we will continue to grow that business loan portfolio we will continue to grow the short term unsecured business what we are tightening is the small ticket unsecured loan and we will continue to watch that and see how it really how it performs.
So the small ticket lab is how much of the total. So that’s close to seventeen hundred odd crores which is there on the total portfolio and it’s not that the performance we are watching it we have taken all the corrective action in terms of tightening and we have slowed down the. Sourcing in that segment
chintan shah
so basically the. Risk is only on that seventeen hundred crores portfolio where we envisage some uncertainties or where we are cautious right yeah.
Vijay Deshwal
From a sourcing point of view yes in terms of portfolio this is the portfolio this would have been underwritten twelve eighteen months back or twenty four months back so so yes we are watching It very closely
chintan shah
yeah and tenure would be three years typically right yes and so just now on the housing part just one last question actually exceptional performance on the housing portfolio and the growth has been quite robust but now given the repo rate cut and probably some players have also highlighted there are higher instances of bt out particularly in the prime portfolio so how are we seeing the competition panning out and only i think the more the growth for us is also led by the developer pool rather than the prime pool so yeah any thoughts that could grow slow down over the remaining part of the year and what could be what growth kind of trajectory could we be looking at for housing portfolio yeah thank you
Rakesh Singh
for Us the growth is coming in all the three segments affordable you know prime and develop yes you’re right with the repo rates you know going down naturally some elevation you know in the portrait that we saw in the prime segment and you know those ratios overall only you know prime are in the range of about fourteen percent of the opening book but you know since we are a full stack player the balancing act you know also happens in the affordable informant therefore you know we don’t see a very significant change as far as the foreclosures are concerned and also btouts.
Are concerned in fact still the bt. In that we track was in bt out ratio the ratio remains quite similar to where we were in the month of quarter three so coming to your next question which is how do you see growth panning out i think what we have been articulating earlier is in the last eight quarters i think what we have done is we have built capacity and with the advent of you know six digital platforms that we have across the customer life cycle we are seeing you know in combination the capacity. That we have built productivity is you. Know significantly coming up and as you would have noticed fifteen point five percent. Of our business that we do disbursements. That are coming in you know are also from the abc and abg ecosystem so i think we are very well placed to take you know advantage clearly you know the market share gain is what you know we are getting so riding on the you know fourteen fifteen percent growth which is there in the industry and with the capacity and you know productivity moving up for us combined with the abg ecosystem and with the right eye on portfolio quality i think. You know we can see the growth. Momentum you know remaining you know quite consistent for us.
chintan shah
Sure so this is very helpful and thank you and all the websites joined back in the thank.
operator
You thank you the next question is from the line of avinash singh from mk global please go ahead sir.
avinash singh
Yeah thanks for opportunity few questions the first the first one is on you know nil i mean in the lending business the nil is still falling so now based on what is happening sort of you know on the your borrowing side and how your kind of a business mix is changing can you provide some kind of a guidance that if this name has bottomed out and what sort of what sort of trajectory should we expect i mean as we exit this financial year and in that context only you know question is that now we have kind of you have tried to increase you know or other of that your disbursement in consumer finance and pl has bottomed out you are starting to increase but there remains some bit of a debate among various lenders that the consumer leverage is still higher so how do you see i mean your path going forward in this consumer and pl and the second question is you know your current capital adequacy is i mean near eighteen percent so tier one would be slightly lower at what kind of a growth you are envisaging and at what juncture you will be looking to raise capital thanks.
Vijay Deshwal
So thanks avinash your first question was on the mim if you look at mim as an outcome of the product which we have the mix of higher yielding unsecured loan that is personal and consumer loans and business. Loans to sme was at twenty two. Percent as of june twenty fifth and this was at a similar level of march twenty fifth the personal and consumer business as we just mentioned has grown well in terms of in quarter one and the consumer segment grew if you look at twenty eight percent sequentially and the portfolio has grown by six percent so we expect that as this portfolio grows and our unsecured business which is business loans grows our margins should start improving so in the next few quarters you will see margins improving from here on your second question was on plc personal loans and consumer loans and leverage at a client level still high so i think avinash we were ahead of the curve in terms of tightening recognizing that there is a leverage which is going up we build the leverage in our in our underwriting in all our metrics in terms of tracking and unsecured inquiries all of that we build it over the last four quarters quarters and we track customer leverage very very closely and in this segment if you look at our we have largely run down our legacy portfolio sourced from the digital partners we have tightened our underwriting norms as i mentioned and reduced the exposure to small ticket size segment in this portfolio given that the environment in this segment is stabilizing and we are seeing that the credit quality indicator which i had mentioned in my opening remark that bounce rate forward flows and delinquencies are stacking up quite well we track in terms of femi which is first cmi default second third so we really track this portfolio very very closely and we will continue to watch this portfolio as.
We grow. On the capital question yes our tier one ratio is fifteen point six two and total cape add is at about eighteen point one one during. The quarter we infused two hundred fifty crore in our hse subsidiary which is. The only company which in a way needs capital infusion because asset management company retail returns dividend and in our insurance company we have dairy partners and if at all there will be very minimal capital requirements so i would say that looking at the overall capital plan for us we are sufficiently funded for our growth requirements for next nine to twelve months and we look at any capital situation post that.
avinash singh
Thank you.
operator
Thank you the next question is from the line of abhijit tibhal from motilal oswal please go ahead sir yeah thank you for.
abhijit tibhal
Taking my questions and congratulations on a good quarter so the first thing is a clarification where you said that there are three products that we are doing in unsecured msme which is your supply chain finance then we do business loans and then we called out small ticket unsecured loans so i’m just trying to understand it is only in this small ticket unsecured loans where we are seeing some stress building up otherwise in business loans that we do in unsecured msme we are not seeing any stress building up as yet which you called out is about six point five percent of The portfolio
Vijay Deshwal
yes abhijit you’re right we are not seeing any interest in any other portfolio and in this portfolio also. Rakesh mentioned that whatever it’s like anticipated there is nothing which is out of the way and the portfolio is well within our controls adequately provided so we don’t see any undue worry here it’s in control.
abhijit tibhal
Got it and then i mean i think on one of the slides and also in your opening remarks you spelled out that close to fifty two percent of your stage three in unsecured msme is covered in the government schemes so at the overall portfolio level what is covered under these government schemes.
Vijay Deshwal
Upwards of fifty percent is covered on. The overall portfolio on the business
abhijit tibhal
and Got it and then one last question that is that if i look at your secured businesses close to sixty percent of your secured business has lapped so i was just trying to understand what are we seeing in the lap portfolio today because given how things have moved right in the last twelve eighteen months from credit cards to pl to mfi to micro lab to unsecured msme just trying to understand is there anything that you are seeing today in the lab segment it’s a this is lap as a segment over the last eighteen months has seen very very strong growth across the industry so that is one and the related question in our hfc business are we doing micro lab or in the nbfc are we doing micro lab and if yes how big is that portfolio microlab.
Vijay Deshwal
So abhijit first your question on lab if you look at touchwood i think the performance is very very strong both in terms of overall performance and this is our olfactory portfolio this is almost your old portfolio so very vintage portfolio and this portfolio has seen difficult cycles whether it was demonetization or the nbfc crisis or covid and it has stood the test of the time and is very very strong in terms of the performance even if you see the time period which you just mentioned both at stage two and stage three has come down significantly so very very good this is backed by the cash flows of the customer and the collaterals of the customer so very good performance and has been stacking up very very.
Rakesh Singh
Well so on the hfc question lab i mentioned the ticket size new for labor is about fifty one lakhs so it is a very small proportion that is the micro lab and if you see the slide which is there which depicts the composition you know of lab that we’ve got you would see that in the affordable segment lap is over nine point six percent so very small subset of nine point six percent and to you know also speak you know on how we are seeing this of course the growth is being strong we monitor the portfolio both onboarding in terms of the bureau scores you know we monitor the portfolio in fact we have created our own comprise score which ensures that quality of customers are voted in and then of course back that up with very strong oposs analysis not only for our own portfolio also look at what portfolio we have created as to how the customers are behaving outside and i also spoke about the pillar request in and also digitalization also post delivery management which is you know overall helping in managing the portfolio so we are not seeing you know any different you know trends in the lap portfolio buyers in the housing segment.
abhijit tibhal
Got it and sir then if i can just squeeze in one last question if you could also share what is the write offs that we did in the quarter in nbfc nhfc and if you could just answer that and i had a follow up question on this.
Vijay Deshwal
We do not. Disclose write offs as of now so i think we will stay with that.
abhijit tibhal
Sure and then lastly i mean how much have we recovered in cgt and sme scheme so far in other words how much has been claimed so far and how much has been the recovery.
Vijay Deshwal
I think this is ongoing in terms of depending on every quarter whatever came which we put up it goes through its own verification and everything and then so i think we see it over the period of full full year and full cycle we can share that later With you sometimes
abhijit tibhal
sure and like you suggested it typically takes between twelve to eighteen months right mister raviji yeah yeah.
operator
Sure thank you thank you the next question is from the line of kushan parikh from morgan stanley please go ahead.
kushan parikh
Sir thank you thanks for taking my question just a data question if you. Could share the litigation during the quarter for the nbse as well as the total stage one two and three ecl. That would be helpful yeah thank you.
Vijay Deshwal
Page one two and three segment wise we provide that and we have provided this time as well.
kushan parikh
Sorry i’m talking. About the provisioning against stage one two and three.
Vijay Deshwal
That we do not as of now we don’t publish that but i think what we have given for sure is the stage wise whatever are the stage one stage two stage three across various segments and also the provision cover that we carry at those for those segments. Sure.
operator
Thank you the next question is from the line of mister puneet bahlani from macquare please go ahead.
puneet bahlani
Sir yeah i just firstly on the nbfc better the unsecured business have increased and the pcr at thirty five appears to be low i know like over fifty percent is government guaranteed but my understanding is it might require some hello yeah my understanding is hello.
operator
Yes sir please go ahead yeah my understanding is.
puneet bahlani
It would require some level of provisioning right even if it’s government guaranteed so thirty five percent for even the you know for the unsecured appears to be a bit low and over time like if i look at fy twenty four like it was at two point nine percent the npas it has gone up to five point four percent now and so what is the tenor of you know receiving these claims so that you know when we can remove this from our npa pool as in does it take twelve to eighteen months or more than that if you could give any comment on that and thirdly on the housing finance bit there has been a big improvement in opex this quarter is it primarily driven by operating leverage or is there any component that is like you know we have saved on some opex component if anything you could highlight on that yeah thank you that’s all.
Vijay Deshwal
Puneet your first question was on the provision coverage on the unsecured business as i mentioned seventy five percent of the principal is guaranteed so we believe that. Thirty five point seven or thirty six. Percent pcr is quite sufficient in this but at some point in time we believe that the claim is delayed or claim is not coming in we will have to evaluate we will do that but at this point in time because of seventy five percent of the principal is is guaranteed bring this provision coverage. Is sufficient .
puneet bahlani
so how much time does It take for the claim to come. In.
Rakesh Singh
As i mentioned it’s anywhere between. Twelve to eighteen months okay got it. On the question on on housing finance like you rightly said if you look at the operating expense you know for quarter four and quarter one in absolute amounts it is one hundred and ninety four crores or one hundred and ninety crores so four crores are additional and as you will know that you know in the last year when the group grew from eighteen and a half eighteen months foreign crores to about thirty one non crores the expenditure for generating the business most of it gets you know booked in the year in which the disbursements happen and as you will see the proportion of new disbursements to the overall book as because the book is also increasing as the proportion keeps reducing you start seeing operating leverage even more that is the reason why earlier as well when we’ve been speaking about how the roas will stack up we’ve been speaking about this two point nine one percent which was the earlier opex on average loan book in quarter four how that we foresee will come down to one point six percent in the next is one hundred and thirty base points of reduction and we’ve already seen a shift in one quarter itself to one hundred and thirty one you know thirty two basis points and that is how.
puneet bahlani
It will stand up got it got it got it thank you so much.
operator
Thank you due to time constraints we will take this as the last question i now hand over the conference to miss vishakha for closing comments thank you.
Vishakha Mulye
Very much for all who joined the call and if there are any other questions all of us are available please. Do reach out to us thank you.
operator
So much thank you so much ma’ am on behalf of aditya birla capital limited that concludes this conference thank you so much for joining us and you may now disconnect your lines. It.