Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Bajaj Finserv Limited (NSE: BAJAJFINSV) Q4 2026 Earnings Call dated Apr. 30, 2026
Corporate Participants:
Ramandeep Singh Sahni — Group Chief Financial Officer
Tarun Chugh — MD & CEO
Tapan Singhel — CEO, Bajaj Allianz General Insurance
Vipin Bansal — Chief Financial Officer
Ganesh Mohan — MD, Bajaj Finserv Asset Management Limited
Ashish Panchal — MD and CEO
Analysts:
Raghvesh Sharan — Analyst
Unidentified Participant
Unidentified Participant
Sanketh Godha — Analyst
Divij Punjabi — Analyst
Nidhesh Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Bajaj Finser Ltd. Q4FY26 analyst 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 0 on your Touchstone 4. Please note that this conference is being recorded. I now hand the conference over to Mr. Raghavesh from GM Financial.
Thank you. And over to you Mr. Raghavesh.
Raghvesh Sharan — Analyst
Thank you Ranjan. Good evening everyone and welcome to the Q4FY26 earnings conference call of Bajaj Conserve Ltd. First I would like to thank the management of Bajaj Finserve for giving us the opportunity to host this call. As always we’ll have opening comments from the management team post which we will open the floor for Q and A. From the management side Today we have Mr. Sri Nivasan, President Insurance and Special Project Bajaj Princev Ltd. Shadamandeep Singh Sani, CFO Bajaj Princev Ltd. Mr.
Tapan Singhal, MD CEO Bajaj General Insurance Ltd. Mr. Tarun Chubh, MD CEO, Bajaj Life Insurance Ltd. Mr. Avais Karmali, CFO Bajaj General Insurance Limited Mr. Vipin Bantar, CFO Bajaj Life Insurance Limited Mr. Ashish Panchal, MD and CEO Bajaj Finserv Direct Limited and Mr. Ganesh Mohan, MD, Bajaj Finser AMC. With this I would hand over the floor to Ramandeep sir for his opening comments. Thank you sir.
Ramandeep Singh Sahni — Group Chief Financial Officer
Thank you for the introduction. Good evening everybody. We welcome you to this conference call to discuss the results of Bajaj Finserve Limited BFS for Quarter 4 FY26. As before in this call we will largely be concentrating on the consolidated results of bfs. The results of our insurance operations through Bajaj General and Bajaj Life. Our emerging companies which include Bajaj Finserve Health, Bajaj Finserve Direct, Bajaj Finserve Asset Management Company and lastly we’re material the standalone results of Bajaj Finserve itself.
Our two other subsidiaries Bajaj Finance and Bajaj Housing Finance have already had their conference calls and hence we would pursue only very high level questions on these companies. To start with a few hygiene points. As a word of caution, we affirm that any statements that may look forward looking statements are just estimates and do not constitute an assurance or indication of any future performance result. Let me also give you an update on the basis of accounting which we use at a Finserve level as required by the regulations.
Bajaj Finserve prepares its financials in compliance with Indian accounting standards referred as India. The insurance companies are however currently not covered under indas. They have prepared their India’s financials only for the purpose of consolidation with with FinServ. Accordingly, for Bajaj General and Bajaj Life, standalone numbers reported are based on non India’s accounting standards which is referred as Indian GAAP as applicable to the insurance companies currently however on the subject, as per the recent regulations from IIDI, insurers are now required to transition to India’s from FY27.
However the said regulation also allows insurers to seek a forbearance of for a year keeping in mind the level of readiness of each one of those. Accordingly, both insurance companies plan to seek forbearance for a year and would transition to India from 1st of April 2027. Now moving to an update on our joint venture with Allianz, I’m happy to confirm that in March our insurance subsidiaries I.e. Bajaj General and Bajaj Life have completed the buyback of the balance 3% Allianz take our insurance businesses now 100% Bajaj made in India, made for India and made by India.
The buyback not only concludes the buyout of Aliyaan stake, but it also is expected to strengthen the ROE and ROEV of both the insurance subsidiaries going forward. Post the buyback, the 100% holding of the insurance subsidiaries by the Bajaj Group is split as follows. 77.33 is held by Bajaj Finserve, 18.1% by Bajaj holdings and about 4.6% by Jamnah Lal Sans Private Limited. I’ll now jump into the high level results for the quarter on a consolidated basis which have been put out in a press release dated 30th April.
The consolidated total income grew 6% to about 38,508 crores versus 36,434 crores for the same quarter last year. However, you may please note that the income for the quarter looks a little depleted because of the high impact coming from the MTM on the fair value through P and L portfolio held by insurance companies as the total income includes investment income and some of the investments by the insurance companies are held at FATPL basis due to the geopolitical tensions there is a temporary MTM impact impacted the revenue and if we gross up the MTM impact and the revenue the revenue growth will actually be 14% as compared to the 6% reported by us.
Similarly, the consolidated profit after tax also grew at about 5% to 2,539 crores as against 2,417 crores for the same period last year. Again excluding the temporary MTM losses of the insurance companies, the consolidated profit after tax actually grew at a large 24% as compared to the 5% being reported by us. So just to summarize, both the revenue and the bottom line for the quarter being reported are largely impacted by the MTM impact, which we believe is temporary in nature due to the geopolitical risk.
And if we gross it up excluding these MTM implications, the revenue growth and the PAD growth are very healthy at 14% and 24% respectively. Now I’ll just deep dive into each of the respective companies to give a texture on the companies itself. Let’s start with Bajaj General on GWP growth basis for the quarter the growth was muted at 4322 crores as against 4326 crores for the same quarter last year. This is largely on account of tactical decision made by the company on reducing its exposure to crop motor amid the elevated pricing pressures which we’ve seen in the market in the last quarter.
However, if we exclude bulky crop and government health businesses, the GWBS in fact increased by 8.3% as against the market growth and when we refer to market it’s the multi line growth of 11%. And here we know that the multi line growth was backed by some of the players seeing EOM stress and hence they may not be comparable at this point. Underwriting losses stood at 96 crores for the quarter versus about 3 crores for the similar quarter last year impacted largely by elevated claims arising from our government health business.
This essentially arises from the fact that the loss ratios on these schemes are higher in the initial months and then they taper down. So it is kind of a timing variance. And also the lower crop business which we’ve done in the last quarter given the stress we saw from a pricing perspective, the combined ratio for the quarter was elevated at about 113.6% for the quarter as against 4.8% for the same quarter last year. Now this essentially came from the fact that we did a treaty within the last quarter on government health basis, but it was done on retro basis from the third quarter which meant that the NWP for the period was depressed because of backdation of this treaty and hence the elevated combined ratio.
However, if you look at the combined ratios excluding the bulky businesses which is Government health and crop the combined ratios actually improved for the quarter versus the same quarter last year on a full year basis. However if you see the combined ratio which nullifies the impact of these timing variances, the combined ratio on old basis which is the non one by n basis is reported at a very healthy 101.9% which we believe will continue be continue to be amongst the best in the market. The ROE excluding surplus capital which is at about 200% solvency stands close to 19% for the period.
PAD growth also remained flat for the quarter for the same reasons which I mentioned earlier the fact that there was a timing variance on government health schemes claims being booked and we did lower crop business which led last year same quarter was very profitable. On AUM we ended the year at about 35,529 crores as against 33,122 crore for the same period last year a growth of 7.3%. However, it’s important to note that both AUM and solvency for the period have been impacted Due to the one time impact of the buyback of the 3% Allianz take which we’ve done which for The General Insurance Company was close to 1590 crores.
To summarize, these operating results including the mine ratio and ROE underscore Bajaj General’s disciplined focus on delivering balanced and profitable growth supported by strong risk selection, robust distribution, prudent underwriting and continued emphasis on exceptional customer service in the most difficult and highly competitive market. We will now move to Bajaj Life. Bajaj Life’s financial outcomes have been in line with the plan for transition to sustainable and profitable growth as was highlighted in the mid of last year.
The impact of change in strategy continues to be reflected in the fourth quarter results as well. The retail weighted receipt premium for the quarter grew at about 9.7% from 2,328 crores to about 2,550 crores largely in line with the industry growth. However, what’s important to note is our retail protection contribution in the overall retail business has grown to 8.4% with overall growth of 67% for the period. Similarly, the group protection business has registered a very healthy growth of 42% for the quarter.
Moving to the bottom line parameters, our VNB for the quarter grew at a very healthy 29% up from 549 crores to about 709 crores for the quarter. The NBM is for the quarter up to 24.5% as against 22.1% reported for the same period last year, an expansion of about absolute 2.4%. These outcomes are despite the gross GST impact of about 5% on NBM for the quarter and about 2.9% on a YTD basis. The GST impact on VNB has been largely mitigated on exit basis in March 26. We can now clearly see that the benefits of our revamped Strategy Bajaj Life 2.0 are clearly visible in the financial outcomes.
As has been depicted earlier on the back of continued strong renewal premium growth of about 18%, Bajaj Life’s GWP grew at 21% for the quarter. However, it’s important to note that persistency dips were observed against certain cohorts in line with the market. However, the management is working on it to bring it at the similar levels we’ve seen in the past. On an overall basis, the retail weighted receipt premium product mix for the quarter was very well balanced at par with 25%, nonpar and savings, nonpar savings and annuity at 24%, term at a very healthy 8% and Ulips at 42%.
The profit after tax also registered a very healthy growth of 78% up from 41 crores for the last quarter last year to about 73 crores for the quarter being reported now. Bajaj Life ended the quarter with the AUM of 1,33,500 crores up about 8%. Again. This was along with the solvency impacted by the buyback of 3% of Allianz’s stake which for the life company was close to 1200 crores. Overall, the quarter for Bajaj Life is in line with the expectations and on the right trajectory of sustainable and profitable growth.
Finally, both the insurance companies continue to be financially strong with solvency for Bajaj Life at 266% and Bajaj General at 300% and hence are very well poised to weather any external adversity. We will now move to the lending businesses. I’ll start with Bajaj Finance a very strong quarter across all key metrics including volumes, AUM new customer addition, credit cost and profitability. The number of new loans booked for the quarter was at about 1.3 crores as against 1.07 crores for the same quarter last year, a growth of about 21%.
The company’s diversified business model has enabled it to cross the record milestone of AUM of rupees five lakh crores and a strong AUM growth of about 22% at 5,9975 crores. The net total income grew by about 21% to 14,209 crores up from about 11,750 crores for the same period last year. PAT was close to 5,500 crores for the quarter. If you look at the OPEX to net total income ratio after adjusting for the loan losses and provision reclassification which the company has done, the ratios are flattish at about 33.2%.
There is a slight increase which is visible sequentially due to the cascading impact of the new labor code which we had seen in quarter three and accelerated gold loan branch expansion. We have also been investing in AI implementation and that also impacts the ratios to some level. However, both growth however we are seeing acceleration in both growth and improvement in operating efficiencies due to the AI investments we’ve been making. Loan losses and provisions for the quarter were at about 2008crores as against 2167crores for the same quarter last year before the additional ECL provision.
It increased by about 8% to 2125 crores up from 1970 crores for the same period last year. In quarter four we saw a net decrease in stage two and stage three assets at about 430 crores reflecting a continued improvement in portfolio quality and the outlook on credit costs going forward. The GNPA and NNPA stood at a healthy 1.01% and 0.4% respectively as against 0.96% and 0.44% for the same period last year. The capital adequacy remains strong at 21.55% and the Tire 1 capital was 20.67%. I’ll now move to the mortgage subsidiary of BFL Bajaj Housing Finance Ltd.
Again a very good quarter on disbursements. AUM operating efficiency, asset quality and profitability a stable quarter with aum growth of 23% driven by good momentum in disbursements. However, this was backed by some portfolio attrition growth was very well distributed across all the business segments. Home loans for the company grew at about 18%, loan against property grew 24%, lease rental discounting grew 44% and developer finance grew 13%. The net income sorry, the net interest income grew 15% to about 945 crores as against 823 crores for the same period last year.
The operating efficiencies continued with OPEX to net total income at a healthy 19.2% as against 21.8% for the same period last year, healthy asset quality continued to be maintained with GNPA and NNPA at a very small 0.27% and 0.11% respectively. PAT grew by 14% to 670 crores for the quarter. However, this excluded the one time impact of tax credit which the company had taken last year of 34 crores. The PAD growth would have indeed been 20%. The Capital Adequacy Ratio stood at 22.46% as of 31st March with Tire 2 Capital at 22.01%.
In summary, another very strong quarter for both our lending companies Bajaj Finance and Bajaj Housing Finance Ltd. Now let me give you update on our emerging companies. I’ll start with Bajaj Finserve Health. For the quarter Bajaj Finserve Health logged in about 6.5 million healthcare transactions as against about 5.3 million transactions done for the same quarter Last year Bajaj Finserve Health continued its expansion of the provider network which includes about 130,000 plus doctors, about 15,000 plus hospitals and about 6,500 plus lab touchpoints.
Utilizing this network strength and its tech platform, Bajaj Health is able to offer an integrated opd, IPD and wellness experience to both retail as well as corporate customers. During the quarter the revenue for the company grew at a very healthy 41%. So in all overall a good quarter for Bajaj Finserve Health. Moving to Bajaj markets during the quarter, the disbursements for the quarter were at about 2047 crores as against 1800 crores for the trailing quarter which is quarter three of FY26. The company ended with a total unique partner count which are the partners available on the platform of about 103 in number.
The operating revenue for the company however for the period has indeed de grown to about 95 crores down from about 129 crores for the same period last year which is attributable to decrease in loans and transacting customers during the quarter. And as has been indicated earlier in the past quarter this essentially was a planned degrowth because we had planned a migration of our new system which is being used by the frontline sales and the migration is now complete so so we believe that the growth year on should be behind us.
Further we have also changed the revenue structures within the company where some of the revenues and move on a trail basis which now provides stability and predictability and a non linear future revenue. The business model also has been aligned with the RBI Digital lending directions for LSPs which came into effect from 1st of November 2025. Now moving to Bajaj Finserv Asset Management Company the AMC continued its good run recording a AUM of about 26,820 crores at the quarter end and it retained the 26th spot amongst all the mutual fund companies in India.
In terms of aum, the closing AUM was heavily impacted as we knew due to the geopolitical tensions. However, if you look at the average AUM for the quarter it was a healthy 30,627 crores as against 20,133 crores average for the same quarter last year a growth of 52%. The equity mix is in the AUM stands at about 59% and the non group share of AUM constitutes about 94% of the total AUM. This is just to sum up the performance on all our companies before we open for questions. Considering the paucity of time I would request the audience to kindly keep their questions brief so that we can cover more queries during the call.
With this I invite questions from the audience.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question, maybe a star and one on a 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 comes from the line of Shreya Shivani but Nomura please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. I have two questions. First is on the life insurance entity Nonpar savings mix has reduced. Just trying to understand if you can give us a flavour of how were the markets for the non par product in the year that has gone by. Was there any pricing pressure that you’d like to highlight? What is your strategy for FY27? My second question is on the general insurance piece so sorry the motor TP piece over there so the reserving triangles looks like the release in TP in FY26 has been higher.
I’m coming to about 800 crores versus usually the 600 to 700 you’ve done in the last couple of years. So any color you can give around what has happened here and sorry I’ll squeeze in one more question. This is on Bajaj Direct so good to hear that the migration etc is completed. I just want to understand as we enter into this year and there are of concerns around some of the business loans and what can Happen etc. Are there, are there any measures we are taking to tightening anything from our end?
Yeah, those are my three questions. Thank you.
Ramandeep Singh Sahni
Vipin, you want to take the first one on nonpar savings? Vipin or Tarun, whoever.
Tarun Chugh
Let me just step in. Thanks for your question. Nonpar, the way we see it as a bucket of non par plus annuities because annuities are the same cast structured differently. Our annuity actually doubled from 5% to 10% in the financial year and yeah overall non par did come down from 21 to 16 but overall if you look at it broadly we are 26 to 26% both in both these tasks. If you look at it, the market has actually looked at more higher age customers coming in and which is where I mean the way we look at the market is when the higher age customers would rather have more annuities than have medical based products.
And we are seeing a consistent shift in the market towards annuity and I think this is a very healthy time because usually the customers above the age of 50 have more money in their pockets and hence are able to take more such product, more health and life products. Our ticket size in annuities is actually doubled in the last year. So that is, that is the healthy one. You should expect that when we talk we will fundamentally look at these two buckets together because they intertwined actually if I might say on the nonpar market as to what’s been happening the as you’re aware below 5 lakh and below there is a tax benefits rate available and whenever our tax post tax returns between fixed deposits and nonpar savings actually comes to about approximately 2% this gap comes to around 2%.
The industry gets a lot more tailwinds in the nonpar saving plans. If there is liquidity in the banking sector and post tax FD returns, look at this kind of a gap with below 5 lakh ticket size we will expect the non power savings to continue. So it’s really an impact on the market. There’s nothing to do with the pricing etc. As of now from our side there’s fundamentally a strict two higher range brackets. I hope that answers the question.
Unidentified Participant
Yeah, yes, that was useful, thank you.
Ramandeep Singh Sahni
Want to take the question on TP releases?
Tapan Singhel
Yeah. So if you look at TP release is a factor of how the book develops and TP the long tail book. So as the claims development happens and compared to reserving, how is it developing and what has to be seen. So and if the numbers you mentioned, I don’t see that there’s a Huge shift in terms of the deals happening, which means that the company has been adequately reserved over time. And as the book keeps on developing and claims are getting paid and the new keeps happening. It’s a natural phenomena.
I don’t see any change in the philosophy of forest provision.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of praise chain with Mozilal Oswal, please.
Unidentified Participant
Yeah, hi. So just wanted to understand on the general insurance front, you know, how do you see the product mix evolving and you know the the overall profitability of the entity going ahead into FY27. So how do you see this kind of moving?
Tapan Singhel
So if you look at it and actually interesting question. Let’s look at last year the industry combined ratio actually moved up by about 6 to 7%.
Unidentified Participant
While if
Tapan Singhel
You look at Bajaj General combined ratio last year now. So even though industry deteriorated by about 67% combined ratio Bajaj General still no was where it normally remains close to 100 is what Endova always is to be there industry 121% or so. So if you see the gap it has been huge. And that’s why even the fourth quarter I think Raman was mentioning as we saw the combined deteriorate. I think we in places where we felt the pricing is not appropriate and that we have been doing all these years where we go slow, where we see that the prices appropriate from a customer perspective to be served as the one that we like.
So next year again depends on how the industry moves. But if you look at in fact one of the quarters last year industry combined issue it has 128% also. No, I think
Operator
So
Tapan Singhel
Fundamentally as a company our philosophy remains the same. We are a company which is there for hundreds of years. It is not a company which we are looking at short term in terms of making it up. So it will always do proven always. We have customer obsessed to always find optimal market where to go and keep on going. And that’s what we have been doing. And for the next year also the philosophy remains the same.
Unidentified Participant
I think even product mix, you know, the government led businesses on health insurance on health or either the crop business. The approach is there an approach towards. As
Tapan Singhel
I said. No, no. I think I’ve mentioned this on a lot of previous calls also the approach is simple. Wherever the pricing is appropriate in which we serve the customers well is what we write. Now if you tell me that I make an approach right now and say this is what I’ll write and the prices are prepared for that. Why will write that? Bajaj General is one of the large insurance company in India which means that we write all product lines and we have a decent market in each one of them. The variation just happens depends on how the market behaves in which product line where we get more aggressive or pricing goes below what we feel comfortable there, we reduce where the pricing is appropriate, we increase.
So we can never know. Kind of tell you that next year this is exactly what we shall do. We’ll move prop up or move this up. But in all lines of businesses you will see that we are on the top companies in where we position ourselves. So that is how we shall continue depending on the pricing of the particular product line. In the years to come we shall move on that basis.
Unidentified Participant
Got that, thanks. And on life insurance this just trying to understand VNB margin trajectory from year on, what kind of VNB margin should we think and what kind of product mix that you would be targeting for FY27 given the market uncertainty right now continuing in April, do you think that a product mix kind of which has moved slightly away from the loops, not a big one, but for the full year, or do you think that trajectory will continue and the margins can kind of continue to improve on a full year basis?
Tarun Chugh
Okay, let me just give you a little bit of a strategy part and Vitin can jump in to give you specifics. That directionally all our product segments are not now profitable. So the fact that there is uleip, ULIP is now profitable. So this is a discussion we had had about 18 months back and now the growth is actually not a bad sign. It’s a good sign fundamentally as the product mix is moving. We’ve had this entire cultural shift in all our businesses including agency which have very, I’d say very well picked up the term plans.
And I think that has been the significant needle mover in terms of product mix. We expect the trajectory of term to only increase from here on and that should impact our VNB margins only positively. As you know, term, while maybe a little lower ticket size, if you are able to sell more of core term then it is only what helpful to the VNB margins. So that’s what is moving. Vipin, if you’d like to add anything, do so.
Vipin Bansal
No, I think Tarun that sums up fresh to be more specific, the margin expansion that we are talking about and this is, you know, after accounting for the GSE impact that we had called out. I think as we had said earlier, it’s a Combination of our channel product mix, the way we are able to manage the kind of products we are offering and we do apply some agility there. Obviously the cost effort that we have taken, that is contributing about 150 rupees to the margin. So while all of that is there in terms of product mix, we have always maintained that we would want to have a PAR at about 25% plus minus annuity plus non past savings.
Again in the 25 to 30% range term we would aspire to be 10% plus and ULE will be about 40%. So I think that’s the mix, that’s the stable mix we would want to be operating at. I hope that answers your question.
Unidentified Participant
Yeah, definitely. I just. Last one question on amc. At what scale of AUM do you think that this business will break even and what tenure? What should be the target for us in our model from a breakeven perspective? And what are the new segments that you are kind of investing in? Pms, aif, sif, all these products, Something which you are developing as well.
Ganesh Mohan
Yeah. So on the AMC side, what I would say is the break even for us would be close to about 1 lakh crores with the continued mix on equity versus debt versus passives. At this point we are actively considering both the PMS as well as the sif. So within the next one one and a half years we will be launching both these business lines.
Unidentified Participant
I got that, thanks.
Operator
Mr. Chen, are you done with the questions?
Unidentified Participant
Yeah, thanks. Thanks.
Ramandeep Singh Sahni
I think we missed one question from Shreya. Maybe Ashish, if you can answer that. The question was on the concerns on quality of loans. If you can just take that please.
Ashish Panchal
Sure. So as a marketplace we get a ringside view of the prevailing risk and resultant countermeasures by various manufacturers and therefore they adjust the share of business that they take various manufacturers from our marketplace from time to time as a distributor. However, from the total throughput point of view, while our mix across manufacturers changes depending upon their risk measures, this doesn’t affect us being a distributor. Having said that, we have seen that two years ago the risk was much higher in the market as you can see from bureau report.
And therefore the resultant manufacturer actions, especially in business loans were high. Even last year they were significant. Over a period of time we have seen portfolios behaving better. But anyways we are insulated from any balance sheet and P and L impact of such risk behaving adversely the manufacturer’s portfolio. Having said that, we choose our manufacturer partners very, very carefully and therefore our Volumes are not affected and hence revenue is not affected. I hope that answers the question.
Shreya,
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Sanket Koda with Evan Despart. Please go ahead.
Sanketh Godha
Yeah, thank you for the opportunity. My first question is on life insurance. So if I exclude impact, the margin for the year was at 22 percentage. And you said that most of the mitigations have been done with respect to GST negative impact by end of the year. So is it fair to say that in next year if the first mix remains broadly the same, we will end up reporting a 22 kind of a margin for the next year? That’s my first question.
Vipin Bansal
So Sankat, let me answer that. So when we say we have mitigated, what that really means is for us we exited March. And I’m saying for the month of March we have mitigated almost 90, 92% of the GST impact. A residual impact of 30, 40 bits does exist. But I think now that’s part of our cost structure. Now the question on what do we mean by mitigation? What we mean by mitigation is we have changed some of our products that we sell in the market. There has been a change in the kind of products or the product mix.
If I could say cost optimization continues for us and we have renegotiated some of our commercials with our partners. Now if that continues, then that 4.5%, that annualized impact of GSE that we talked about, that has been mitigated, I’m not sure of 22% that you were referring to. So if you can just help me understand that.
Sanketh Godha
No, no. In the BNB walk, the margin, what we mentioned before, GST impact is 22%. So I’m assuming given we will work with the same no GST impact broadly and then with the same product mix, are we going to report closer to 22 margin in the next year?
Vipin Bansal
Okay, so let me clarify. So that’s not the way to read it. When we looked at the walk, we actually showed the gross GSE impact. All the mitigants of that are part of our walk in terms of the new business mix and the profile that we are talking about. So the dent of 242 crores that you see is the gross dent, the mitigation of it. And let’s assume that it’s 100% mitigated as a March end, that benefit is sitting in the 636 bars if that that’s what you’re referring to.
Sanketh Godha
Because the benefit will be there for the entire year next year. So then then, then then then we will be probably assuming same business gets repeated in FY27 then the margin what we are looking at is something. That’s the point I’m asking for FY27
Tarun Chugh
That’s Sankhet. Let me step in on that. We will you will not hear any affirmation or otherwise from us on margins if you are going to indicate like this please.
Sanketh Godha
Okay, sorry. I understood that
Tarun Chugh
Directionally we can tell you we are in the positive trajectory and all those changes are resulting in the positive margin. But we’re not going to indicate any margin. But yeah it’s positive.
Sanketh Godha
Understood. Understood. Thanks thanks. That’s. Thanks for that answer. And the second question probably was that is on the growth because second half we probably operated on Dalit 2.0 basically comparing with the previous base. So our growth came back to around 15. So is it fair to say that this is the kind of growth we will end up and if that is the case that heavy lifting will be done by agency channel because that the channel took the maximum hit last year. So is it fair to say that the second half growth is more like growth going ahead and will be done by agency panels.
Tarun Chugh
You should see a better growth than what you saw in our second half. That much I can say. And all our businesses are in now a growth trajectory various reasons. On the bulk partners, the bank assurance side, we’ve added three significant partners in the last 18 months. Federal AU and Yes Bank. Now that should start kicking in. We already have a very significant base of small and medium partners which have been growing quite well. So that trajectory is is positive. And I can see that the bank assurance team is adding a lot more value to its partners by selling risk products as well.
Now that is working for both parties on the agency side of the business. Yes we did reconfigure. We actually stretched our reconfiguration if you remember in December when I told you because we felt that there was more and more buy in for our term plan and that the ticket size of term is obviously lower. So we recorded a 8% growth Q1Q for the last two quarters for agency. This I would say is a little understated. You should expect it to be better also because the fact that the product mix is now largely set and the input parameters that we are seeing in agency like the number of partners we are adding, number of distributors that is plus the number of policies we are adding in agency the trajectory is only positive.
Then we come to our proprietary sales and direct channel. I think that is been a healthy contributor and we continue to innovate with data and technology there and see how we can work with customers and the data we already have to provide more and more targeted products. And that trajectory was also undergoing a change given the fact that we did not grow as expected in proprietary sales last year. But all that growth will be back so you should expect a high growth.
Sanketh Godha
Understood, understood. And lastly one data keeping question on the EV side. The assumption change of 51 crores is predominantly related to this operating parameter whether it’s mortality or persistency.
Vipin Bansal
So Sangeet on the portfolio basis I think assumptions are holding good. You would see there has been a dip in our persistency and that’s what largely is reflecting assumptions.
Sanketh Godha
Understood, Understood. And lastly one question on general insurance. So broadly I just want to understand this reinsurance strategy. I. I know that we did a lot lot of government businesses and our reinsurance retentions are closer or our retentions are closer to 40 to 43 percentage. So. But, but. But even if I exclude that we typically are little higher on. On feeding business now. So whether we will revisit the strategy or. Or we think that this will continue even going ahead even in other line of businesses.
Given, given. I understand that government businesses are lumpy and we need to rely on reinsurance indexing.
Ramandeep Singh Sahni
You want to take that?
Tapan Singhel
I didn’t. Yeah, I didn’t get your question. See, reinsurances is not a strategy. It is how you build your book. And wherever you see no volatility or large risks and those you reinsure. So depends on the book competition that you have. And if you look at retail, most of it no you would keep on your books. So if you look at be it government health, be it crop or be it commercial lines of business, they would be reinsured. And then accordingly you decide how to do so. The balance sheet actually predicted in terms of any volatility in terms of larger.
So that is how all the good companies write their reinsurance. And also they look at the ratings of reinsurance so they have to be well rated reinsurance in times of any big losses. The reinsurance is able to support that which in the past also we have seen when floods or be it Bombay floods, we were always regularly purchasing. But our ratio cat is also double that of what the industry looks for in terms of the year to return perspective which would be there. So fundamentally it’s a. It’s a very well arranged to Take care of any eventuality.
So and also depending on the lines of business myth that you write and how you put it together. So what is your apprehension in that
Sanketh Godha
It’s not an appreciation set question was that even in the retail lines, especially motor we compared to our historical past we feel more these days. So whether that approach would be revisited or we think that’s still a good thing to do,
Tapan Singhel
It depends on how the market moves and what lines of businesses. Right. That’s why the approach does not change. The approach remains the same depending on how the market moves. What line of business I think is how the reinsurance operates? Know it is. It’s a common bat. You don’t see a strategy in terms of know how you reinsure your book. You will always reinsure book in the strategy I mentioned to you in terms of wherever the high volatility you have high reinsurance coming in. When you have more stability then the reinsurance not comes down.
When you have large risks then the reinsurance know again high where the PML move high then you have no reinsurance high. When it comes down the reins out. When you have cat losses happening, then the reinstance for that moves up when they come down and your chance of capitals are lower then accordingly adjust your books on that basis. So I think the basics of insurance or basics of writing business is the same. It’s a combination of various things. How does the market move? What is actually writing?
What lines of business writing besides how much insurance do you buy in what kinds of business? How do you put that together?
Sanketh Godha
Understood. That’s useful. Thanks for your answer,
Ramandeep Singh Sahni
Sanket. Your answer actually lies in the commercial outcomes if you look at it. So you know at what price do we really get the reinsurance? What am I reinsuring? Like Tapan said, essentially our exposure looks higher on the seeding side because we write a lot of bulky business which is crop and government health as you rightly highlighted. On the other side we also write a lot lot of large risk. And that essentially because of our banker tabs we get a lot of these large accounts. So a combination of all of these actually translates into what a reinsurance strategy is.
Now in the end, whether I’m making money out of it or no is what finally really matters. Right? And our combined ratio vis a vis the industry will answer that question. So that’s where we stand today.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Divij Punjabi with Banyan Tree Advisors. Please Go by.
Divij Punjabi
Yeah, hi, thanks for the opportunity. I had three questions. One was on the general insurance side. So just wanted to understand how are we seeing the comparative intensity playing out in motor and group health lines of business. Second is on the life insurance side, what is or how are we looking at the expected impact of the change in the commission structure that is expected to come in the next few months. And lastly, what is our strategy on the alternative business? So there was some news around Bajaj Alternatives wherein we are looking to raise about $1 billion.
So if we can talk about that it would be helpful. Thanks.
Tapan Singhel
So if you. Hello, the question on motor and GMC
Ramandeep Singh Sahni
Competitive intensity. Yeah,
Tapan Singhel
On the query. Exactly. If you. If you look at the market and I mentioned this previously, the combined natural industry has moved by about 7 percentage point and 1 quarter. It moved to 128 and moved to 121. Now that always happens when the compute intensity is high in the market. I think that is where the combined issue starts moving up. So to the point that you mentioned, yes there is competitive intensity in some businesses like Motor, gmc, even in fire also there will be competitive intensity.
And I think for the last quarter because of the EUM guidelines, I think a lot of companies which were above 30 they wanted to ramp up their numbers so that they can come within 30 of the UM guidelines. If you look at it and pick up companies which have in the um over 30 and look at last quarter their regression, you will be able to understand how it moves. And then companies have good eum. You would watch, you know that they would you know uh, portion in terms of where they are. So a lot of things depends on how the country decides to play that on.
In such environment the computer intensity does move up. And that is why if you’ll see from a company’s perspective that we would slow down as I mentioned earlier, in places where we see computers moving on, when you see the pricing is right, then we move up because we have no pressure of em. I think we are one of those companies who have a comfortable expense of management and we are well within it in terms of where we put together. So we just don’t write business to get our EM right. Business where it makes sense.
Right.
Tarun Chugh
Okay. On the life insurance side the question was on commission. We haven’t yet received any message from the irda. There is no draft circular yet. So a lot of this will be discussing hypothetically. But what I do understand is that the mood seems to be more on back ending commission from front ending. I don’t know about the reduction of commission. If there’s any plan, nobody’s really got any whiff on this till we get something from them. In either case, if this is executed to the T, it should only the sector.
It should bring down the EOM pressures. It should help the entirely the persistency ratios. It should help customers getting a better proposition. And that is the whole intent of IRDA to be able to pass this benefit to the customer. So we just wait for that until that comes in. It’s really very difficult to say anything beyond this this point.
Ramandeep Singh Sahni
Okay, on the alts one I’ll just try to summarize. See this was one of the white spaces we had identified. See being a financial services powerhouse we realized that alts business is something which is growing pretty healthily globally also and not only in India. And we identified that as a white space last year and we had called it out the investor day that this is an area we will venture into. So in the last six to eight months we’ve actually built up the team and as we speak we are planning to file, sorry, start the PMS part.
To start with we’ve already got approval from sebi. We should launch the listed equity and PMS very soon. On the other side we are trying to launch some CAD tools and Cat 3 AIFs for which we have filed for approval with the regulator for a private equity AIF and a real estate AIF. And hopefully you know, in the next quarter or so we should get approval for that as well. So that’s currently what we’ve done. The idea is also to get into some bit of listed equity for which we will soon be filing for approvals.
And yeah, so this is where we stand today. I think in the next two quarters is where we will actually start rolling out our new products. That’s a strategy as of now and also the idea is that we get into a gift city structure to attract some NRI and foreign investors to take arbitrage of the tax benefit structure as well. Well, so that’s where we are currently beyond this. I think in the next few quarters we will talk start talking about it as and when the business is launched.
Divij Punjabi
Thanks, that was very helpful.
Operator
Thank you. Reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Nitesh Jain with Investec Discovered.
Nidhesh Jain
Thanks for the opportunity. So my first question is on life insurance. So on persistency, what is happening in your view on at the industry level and for you also that persistency after improving post Covid for four or five years. This year we are seeing decline across the companies on persistency. And how do you see persistency trends going forward?
Tarun Chugh
Yeah, so that’s very good question and that’s something that worries all of us and is the focus segment of the sector overall. If you look at it, there was a set of products which were introduced by a few market leaders about 12 to 18 months back. These products were early gratification products for the customer. And we did see people then not continuing once they did get benefits already available. Now that we were all expecting lower persistency in the sector and we have just seen the result of that.
The swing has been more than the expectation. But largely it is just one bucket that has impacted the entire sector. So while we’ve grown by we’ve degraded by about 1.8% we expect that the sector has actually grown even further. We had this product with us earlier but we did not launch it till it was becoming imitable. That we have to do it in the market because distribution was just lapping on this product. I think we hopefully the the entire sector has learned its lessons and we don’t do something like this again.
As far as we are concerned, we’ve stopped selling this product and since October has anyways been bringing it down. At the same time has it impacted profitability more? Because the persistency was already baked in in the entire process. But these kind of things should largely be avoided in the sectors the way I would answer that question.
Nidhesh Jain
Sure, sure. Secondly that if you look at the data in terms of household preferences, so protection, annuity, I think they are growing at a very healthy pace. But on the saving side what we are seeing that the preference towards mutual funds and equities has been increasing and it’s not just one year trend. It has been a quite secular trend for last four, five years. So in that context and life insurance deposits are losing share in the household savings. So in that context how as a industry or as a large life insurance company, how do we plan for next, let’s say five years.
Because I think every year the share of household savings towards insurance is gradually at a very, very gradual pace. But it is declining for sure. So how we stay relevant for common savings to capture the savings pie of a household?
Tarun Chugh
Okay, well that’s a very good question. And I’m sure most people awake the way we have already the way we looked at it although is very different. We have ridden the SIP market in Bajaj Life as well. We today sell a lot of our unit plans in what we call as see. So it’s a trademark that we’ve taken. It’s a systematic in systematic out plan where you put in money every month into your lips and over a period of time take the benefit of staying in the market for longer and take the benefit of then getting equivalent to monthly benefits over a period of your lifetime for under two 50,000 ticket size.
This product also has all tax breaks available. So it’s actually a very sweet spot and it’s something that is going for us. We’ve looked at the entire market and nobody’s been able to run this distribution within the annual mode products. We expect that to bring in a lot more of the benefits that SIPs in market do bring in. As for the rest of the product architecture, a lot of that is on structured benefits available to customers and we are largely linked to life goals whether they are on child saving, whether they are on long term savings and of course mortality and the risk of longevity.
These risks are real. And while in a lot of our spaces the mutual fund market is also pretty much playing and which is why we see the group has. Bajaj Group does have another mutual fund and a life insurance company. We play in the same space sometimes of course but it’s a product with a different within a different caste and a different benefit. So an annual product for example is something that people cannot produce but life insurance companies with their long term guarantees and that as you see as a trend has been going up.
Now that’s a very healthy trend I would say because nobody else can offer that. So there’s some unique spaces we have and largely in structured products. We expect those to just keep growing as there is more wealth in the hand of Indians
Operator
Which is
Tarun Chugh
A positive trend in that case. The rest of course is also linked to the distribution we keep creating and there is still so much more scope. If you notice the life insurance sector is possibly invested most in terms of number of branches, frontline sales and the number of advisors that we have. I think that should only just keep growing in the future so that will always remain a positive for the sector.
Nidhesh Jain
Sure, thank. Thank you. And my two questions on the other businesses which is fincer markets. So if I look at Finsor market that revenue has been quite flattish for a long time. It’s a digital business. Ideally it should grow at a pretty healthy pace I think. But I think last 15, 16 quarters the revenue has been flattish. So what is the strategy here and what is going on here?
Ramandeep Singh Sahni
Ashish, the
Ashish Panchal
Company has. Okay, I’ll break this into two parts. The company has two divisions. What we call as Bajaj markets as customer facing name is our marketplace in BFSI and there we have 100 plus manufacturers as our partners across lending, insurance, AMCs, credit card offered by banks and so on so forth. There the revenues grew healthily up until FY26 wherein as Raman said in his presentation, owing to our migration of platform and owing to the need we compliant to RBI’s new DLD guidelines, we had decreased revenues for one year.
But the revenues are coming back onto track in FY27 as per our plan. Also the nature of the revenues is changing. Now we have a few partnerships which have trail revenue which provides it stability and non linearity which will lay out as the quarters pass by. And you shall see that our stated aim of breakeven very soon probably by the end of this year is a possibility as the quarters pass by within this year. The second reason is that over the last four years we have invested in building a technology services business.
It is a business that leverages the group’s technology capabilities and by that I don’t mean only our companies but across all group companies. We offered these technology solutions to companies within the group. Then we went outside of the group to rest of the companies in India and offered it to some of the companies. Then we went to Middle east and now we have established a subsidiary in US and therefore this phase of investment in technology services as a parallel business as per the long range strategy that we have for the company has also meant that outwardly looking the revenues look flattish but both the businesses are poised to deliver and you shall see it in the coming quarters.
Nidhesh Jain
Sure, sure. And lastly if you can share the number of paying users in Bajaj Prince of Health, I think Bajaj Prince of Health is showing decent growth now. But what is the count of paying users there?
Ramandeep Singh Sahni
We are just looking at the data. Maybe we can take just give it to you offline. You don’t have it handy.
Nidhesh Jain
Sure. So thank you. That’s it for my site.
Ramandeep Singh Sahni
Thanks.
Operator
Thank you. The last question comes from the line of Nishin Chavate with Kotak. Please go ahead.
Tapan Singhel
Hi, just thanks for. Thanks for the opportunity. Just continuing with Health. You know when do you. You know based on the current business when do you really expect a breakeven?
Ramandeep Singh Sahni
I think we are about two years from that is what we have envisaged. See if you look at the business model, the way we’ve built it over a period of time and I think we called it out during our investor day Also from the scale perspective, I think we’ve achieved a significant, significant part of it. You’re seeing that the growth is healthy. 40, 50% quarter on quarter number of transactions are just moving up. I think it is the point at which the operating efficiency start kicking in. And what we did in the LRS was that I think 24 months from now we should start seeing operating breakeven.
That’s where we stand today. Now this is where I mean it’s basis current estimate now closer after we do the next year’s lrs, maybe we’ll give you a more finer number in which quarter of which year will be break even. Sure.
Tapan Singhel
And in sensor markets, you know, are you also looking at a sort of an aggregator model like. Like probably what a Pesa Bazaar is doing?
Vipin Bansal
Ashish
Ashish Panchal
As,
Vipin Bansal
As a marketplace, both Paisa Bazaar
Ashish Panchal
As I understand it, and us are not too different online. And they have various manufacturers signed up with them. We do have our own set of manufacturers who have signed up with us offline. I’m not sure what you mean by aggregators. That is generally the term used by DSA or in the offline world. We have our own omnichannel methods, but those are mostly to complete the customer journey and to assist the customers to come online. So if you mean doing a DSA business purely offline, then no, that’s not the plan.
Tapan Singhel
Got it, got it. You know, just talking about ifrs, you know, you did mention that you kind of, you know, work out your numbers, you know, under IFRS 17. So I was curious, why would you sort of not declare those numbers or not follow the IFRS 17 guidelines from June?
Ramandeep Singh Sahni
See Nishant. As you know that there is a lot of ambiguity around certain assumptions which one has to take while drawing the IFRS numbers. For example, you know, level of aggregation currently also different companies who are reporting to IIT are following different methodologies. And so given the quantum of lack of clarity which is there today in terms of standardizing things across various constituents, I think it’s too early to start publishing these numbers. See, if we were a monoline player then it was fairly easy.
We could have done it. But for a multi line player like, like ours taking a call without having any clarity from the regulator or the industry as such, you know, even the council can decide may not be the right thing because we will end up reporting something and then you have to tweak it a little later. So as an industry at a council level, we’ve been, you know, working jointly with the other insurers to bring some kind of of uniformity in terms of various decisions one has to take. Now either the regulator can decide and let us know for which I am told that a committee has been formed and soon we should get some clarity on some of these matters or as an industry we will have to take a call.
So this is just one example then there are many more things, you know like for example what are the tax repercussions on whatever calls we will take on one, on the opening adjustments, what will be the tax repercussions? So there are multiple such things on which clarity is still awaited and hence we don’t believe it’s wise to go live before clarity emerges either from the regulator or from the council and there’s uniformity across players. So this is where we stand today and hence you would have seen in most of the companies who announced their results have anyway said that they are seeking forbearance for a year barring some of the monoline ones because they are relatively in an easier position.
But amongst the multi line players in GI and even the larger players on the live side I think everybody is in a similar situation and awaiting clarity. And hopefully from 1st of April 27 you will see most of us start publishing the numbers.
Tapan Singhel
Okay, just one small one. On the, on the health side, right. On the retail health side we have seen a fair amount of you know, growth in retail health business. You know post the GST cut, you know how do we, you know how has been the trend with you? Because we just get to see the overall growth number. We don’t get to see the split between new and renewal. So which would give some color on that,
Ramandeep Singh Sahni
Where you want to take that?
Tapan Singhel
I’m there on that. If you look at the retail health. So that’s it. Overall if you look at the movement that happened, if you look at our own company, I think quarter four,
Unidentified Participant
Quarter four the total health growth for the company was standing at 30 versus the industry at 18.1
Tapan Singhel
Detail
Unidentified Participant
Was 17. Right.
Tapan Singhel
Industry is whatever it is but ours was over the industry. But health is an important piece from countries perspective also that will be there. But initially yes there was an upside but overall I feel coming back to normal. Got it, got it. And just one last one, you know the wealth business comes under which company or which vertical.
Ramandeep Singh Sahni
So the wealth company is being set up under Bajaj Finance.
Tapan Singhel
Got it, got it, got it. Thanks. Those were my questions and all the best.
Ramandeep Singh Sahni
Thank you Nishan.
Operator
Thank you ladies and gentlemen. That was the last question for today. We have reached the end of question and answer session. I now hand the conference over to the management for closing comments.
Ramandeep Singh Sahni
Thank you for all the nice questions and I think there was one question which is lying unanswered and Nitesh will just reply to that offline. Thank you everybody and have a good evening.
Tarun Chugh
Thank you.
Operator
Thank you. On behalf of Bajaj Finserve limited that concludes this conference. Thank you for joining us. You may now disconnect your links.