Medi Assist Healthcare Services Ltd (NSE: MEDIASSIST) Q2 2025 Earnings Call dated Nov. 14, 2024
Corporate Participants:
Niraj Didwania — Senior Vice President, Strategy
Vikram Jit Singh Chhatwal — Chairman and Whole Time Director
Satish V. N. Gidugu — Chief Executive Officer and Whole Time Director
Sandeep Daga — Chief Financial Officer
Analysts:
Senthilkumar Natarajan — Analyst
Madhukar Ladha — Analyst
Arul Selvan — Analyst
Chintan Sheth — Analyst
Vinayak Mohta — Analyst
Nikhil Poptani — Analyst
Mohit Surana — Analyst
Kunal Gandhi — Analyst
Darshan M. Bhandarkar — Analyst
Chinmay Nema — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Medi Assist Healthcare Services Limited’s 2Q FY ’25 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. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Niraj Didwania, Senior Vice President, Strategy, at Medi Assist. Thank you, and over to you, sir. Please go ahead, sir.
Niraj Didwania — Senior Vice President, Strategy
Thank you. Good evening and a very warm welcome to each one of you to Medi Assist Healthcare Services Limited earning conference call for six months ended September 30, 2024, H1. The results of the company, the press release and the investor presentation have been uploaded to the exchanges, to our websites and also being distributed through our mailing list.
Please note, any forward-looking statements are to be relied upon based on your own judgment, and all financials and operating numbers discussed on the call are unaudited and/or management estimates. Hence, investors should refer only to uploaded financial statements of the company.
Without further ado, I would now like to hand over the call to Dr. Vikram Chhatwal, Chairman and Whole Time Director of Medi Assist.
Vikram Jit Singh Chhatwal — Chairman and Whole Time Director
Thank you, Niraj, and a warm welcome, and a good evening to all Medi Assist shareholders and other participants joining from India and from across the world. My name is Vikram Chhatwal. With me, I have Satish Gidugu, our CEO; Sandeep Daga, our Chief Finance Officer; and Niraj Didwania, who heads Investor Relations.
As we discuss the financial results for quarter two and the first half of FY ’25, I would like to take a moment to reflect on the broader landscape of health insurance in India. The regulatory environment continues to evolve with a strong emphasis on safeguarding policyholder interests, while encouraging innovation, competition and sustainable growth across the industry. This is in line with the insurance regulator’s vision by the Centenary of Insurance for All by 2047. And Medi Assist believes that we will be able to support the continued expansion of the general insurance sector.
Health insurance remains the largest segment within the general insurance industry, now accounting for about 39% of the total gross written premium in the industry. On a year-on-year basis, driven by a 7.5% expansion in group health and an 18.3% growth in retail health, and if I were to club both group and retail together, the industry has registered a 14% year-on-year growth. As a company, we remain committed to placing the policyholder at the center of our operations, continually enhancing industry service to ensure a seamless and rewarding experience. Our customer-first approach has been the driving force behind our success and we remain focused on creating value streams, while strengthening our position in existing ones that sets the stage for sustainable growth and continued success of our company.
I would now share the key highlights for our company’s performance for the first half FY ’25. The total premiums under management that we administer as a company stood at INR10,583 crores as on the September 30, 2024, registering a growth of 18.1% year-on-year. Within this, if I were to break it up, on the group side, we registered and administered INR9,343 crores, a growth of 15.6% year-on-year. On the retail side, our premiums that we administered was INR1,240 crores with a growth of 41.2% year-on-year. From a market share perspective in terms of health insurance premiums administered, which accounts for group and retail — excuse me, group and retail club of the total health premiums in India, our share stood at 19.2% of the market as of September 30, 2024 as against 18.5% as on September 30, 2023. Within this, again, the group segment market share stood at 28.4%, up from 27.3% for the same period in the previous year, and the retail market share was at 5.6%, up from 4.7% for the same period in the previous year.
I would like now to hand over the call to Satish Gidugu, the Chief Executive Officer of Medi Assist, to share a business update and key highlights for the period with you.
Satish V. N. Gidugu — Chief Executive Officer and Whole Time Director
Thank you. Thank you, Dr. Vikram, and a warm welcome to all Medi Assist shareholders and other participants. Thank you all for joining this call.
We are pleased with our steady growth in what is seasonally a soft quarter for the industry. As the synergies from acquisitions continue to accrue, our margins are seeing an uptick, and further to regulatory initiatives in expanding access to health insurance, we are upbeat about the prospects of the health insurance ecosystem and also the opportunities for Medi Assist to play a pivotal role in the system. We have focused on delivering technology-backed solutions to significantly enhance policyholder experience, while eliminating fraud, waste and abuse in health claims.
Moving on to the business highlights for H1 FY ’25. We have maintained a retention of group accounts at 94.3% for Medi Assist, including all of the groups that we have onboarded from the acquired companies. Now, this was possible partly because of our relationships with all of the insurers that offer the group products today. In fact, as the group customers switch insurers, make different choices of who they want to work with, we continue to remain a preferred benefits administrator, and one of the metrics is the group segment that — premiums that we have administered for non-PSU insurers grew by 30.4% year-on-year, while the segment itself grew at 23.8% year-on-year. And as a result, the increase in share of non-PSU insurers in our portfolio went up by 300 basis points year-on-year in the group segment.
Mayfair We Care, our international benefits, recently won the contract for administering the Overseas Mediclaim Policies for a period of three years for the PSU insurers, thereby further strengthening our thesis on managing the overseas benefits for [Technical Issues] those covered by the Indian insurers. And as already disclosed earlier, Medi Assist Insurance TPA Private Limited, our wholly-owned subsidiary, signed agreements to acquire 100% equity shareholding of Paramount TPA, and is awaiting regulatory approvals as we speak today.
And with respect to technology highlights for the company, as we briefly spoke about it in our last call, that we continue to invest in technology, digitization, data sciences, machine learning to solve what we believe are two critical access for the industry. One, elevating the policyholder experience and, two, fighting fraud, waste and abuse in the industry on behalf of the insurance companies. We did some more work in this area. We have continued our improvements in AI-powered fraud detection engine capabilities, increasing detection of fraud cases with much higher rates for investigations all through the first half and specifically even during the Q2. In fact, when we look at the savings that we deliver to our insurer partners on account of detecting and preventing fraud last year, we grew that number by 60% in the current H1.
And Raksha Prime, our capability that we launched to estimate and predict out-of-pocket and to simplify the entire discharge experience for our membership at network hospitals, the predictive models continue to improve. In the first half of this financial year, we facilitated over 38,000 express discharges, and most of them taking place even before the bills got generated because of the accuracy of our machine learning based prediction models for out-of-pocket. In fact, this project — this is a program that we run, won the Best Team Project in AI/ML Health Insurance at the DevOps 2024 Awards.
And we took one more step towards improving policyholder experience absolutely in line with the spirit of the regulator’s most recent master circulars. We launched what we call as an Instant Resolution feature. This is a feature using technology engages with the policyholder, provides a very detailed and clear explanation of benefits that they have procured from the insurance company and how those benefits have played out in adjudicating a claim and determining the payability and the payout value of the claim. We now allow policyholders to give us feedback, ask questions, provide additional information before the claim is finalized and the payout actually hits their account. We believe it is critical to create the policyholder awareness and simplify their understanding of the policy to elevate policyholder experience.
And lastly, in commitment to transparency, we have now started publishing a lot of operating metrics in near real-time on our website to demonstrate how we are doing on parameters or specifically the service parameters that are very critical for the policyholder experience. When you go to our website, you can see in real-time how our discharges are trending, how the admissions are trending right now for the day, for the week, for the last three months with absolute comparisons about how we have been improving as an organization each day in delivering superior experience to the membership that we have been entrusted to manage by all of our insurer partners.
Thank you for your attention so far. I would now like to hand over the call to Sandeep Daga, our CFO.
Sandeep Daga — Chief Financial Officer
Thank you, Satish, and a warm welcome to all the participants. The key highlights for H1 FY ’25 are as under. Total income was INR360 crore, which is a growth of 15.4% over the corresponding period of the previous year. The revenue from contracts with customers, excluding the other income, which we call as operating revenue, was INR348.5 CR, resulting into a growth of 15.4% over the corresponding half year of the previous year. Revenue from the contracts with customers included 9.8% from government business and 4.7% from international benefits business. EBITDA, excluding other income, was INR73.7 CR, resulting into a growth of 18.1% year-over-year and a margin of 21.1% on operating revenue. Profit for the period was INR40 crore, which resulted into a growth of 65% on the reported PAT year-over-year and a margin of 11.1% on total income.
Key highlights of the balance sheet and operating matrices as on September 30, 2024 were as follows. The net cash balance in the books was INR300.9 CR. The net worth for the group was INR498.5 crore. Return on the net worth was 8.0% for first half FY ’25 and 16.0% annualized. Return on capital employed was 9.6% for first half FY ’25 and 19.2% annualized. Revenue per average headcount on the non-government contracts was INR7.0 lakh for the first half and INR14 lakhs annualized.
Thank you. I now hand over the call back to Niraj.
Niraj Didwania — Senior Vice President, Strategy
Thank you, Dr. Vikram, Satish and Sandeep. We can now open the call for questions from the participants.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Senthilkumar from Joindre Capital Services Limited. Please go ahead.
Senthilkumar Natarajan
Good evening, sir. Am I audible?
Operator
Yes, sir. You are audible, please go ahead.
Senthilkumar Natarajan
Yeah. Sir, my first question on employee expenses. Actually, this quarter, now I could find a 28% increase in employee expenses. What is the reason for that?
Vikram Jit Singh Chhatwal
Thank you, Senthil. I will ask Sandeep, our CFO, to respond to that.
Sandeep Daga
Thank you, Senthil, for your question. The people cost has currently increased on account of four, five reasons. One happened to be on account of the merger of Raksha with Medi Assist last year. So, last year, only one month cost of Raksha was included in the financials, whereas in the current year, almost six months’ impact has been baked in. Secondly, last year, there was an increment, which was rolled out during October 2023. Current year, the impact of those increments happened to be baked into the current financial year, which results into roughly around 6% increase in the headcount cost. There is a one-time payout on the bonus — retention bonuses, which has been paid out to the employees, which resulted into roughly around 2%-odd increase over the last years. Basically, these are the three, four components, which has resulted into the manpower cost increase, notwithstanding the fact that since the business scale has increased 15%-odd, there has been a BAU increase in some headcount in our claims processing team, which has resulted in the approximately 4%, 4.5% increase.
Senthilkumar Natarajan
Yes, sir. Understood. Thanks. And my second question is, I could see this receivable part, which was increased from INR178 crores in FY ’24 to INR214 crores now. So, what is the reason for this, sir, increase in receivables?
Vikram Jit Singh Chhatwal
Go ahead, Sandeep.
Sandeep Daga
Thanks, again, Senthil, for your question on the receivables. Look, what happens is, ours is an annual renewal business. Since most of the renewals which took place in the first quarter and the second quarter of the business gets billed to the customer. And once we receive the corresponding underlying premium registers for the insurance companies, we are then required to raise invoices on the insurance companies and collect the payment against those invoices. So, looking at the increase in the business and the scale to the tune of 15.5%-odd, there has been a similar increase in the receivables as such. But one of the matrices which we continue to focus upon happens to be the DSOs. If you look at the DSOs between September ’23 and September ’24, we have been able to fairly compress our debtors’ cycle, which got reduced from 135 days last year to almost 113 days this September. So, from the period endpoints from September ’23 to September ’24, we have been able to reduce and bring in efficiency with our collection cycles, as a result of which the DSO got reduced to 113 days.
Just to share with you, as on June ’24, we were at a closer to 128, 129 days. So, effectively speaking, quarter-on-quarter basis, it has come down to 113. Because it is an annual recycle business, we expect, based on the past trends, that by March, it will hover around 100, 103 days as such.
Senthilkumar Natarajan
Yes, sir. Yes, sir. Understood. Thank you, sir. I’ll join queue. Thank you.
Operator
Thank you. The next question comes from Madhukar Ladha from Nuvama. Please go ahead.
Madhukar Ladha
Good evening. Thank you for taking my question. First, on the revenues, see, the revenue growth is just 12% year-over-year. And last year, we had only one month of Raksha’s revenue. So, shouldn’t the revenue growth have been stronger in this quarter? That’s my first question. And also, on our group premium for 2Q, and I don’t know whether this is the best way to look at this, but if I do a H1 premium under management number minus Q1 premium under management number, and then similarly for the base quarter also if we do the same thing, then the growth in Q2 FY ’25 over Q2 FY ’24 in group premium under management is just 1%. I want to know whether is that the right way to look at this or am I missing something that’s — at least that’s what my numbers seem to suggest on Excel? Third, on your balance sheet, your intangible assets have also grown substantially by almost INR34-odd crores. So, maybe you could explain that and probably that is also what is resulting in higher depreciation or higher finance cost also. Right? So — and finally, can you also give me a split of the revenues in the base quarter, 2Q FY ’24, of domestic non-government, government and international? Yeah, those would be my questions. Thanks.
Vikram Jit Singh Chhatwal
So, thanks, Madhukar. First, start on the revenue growth and the group premium growth, I will ask Niraj to step in and respond.
Niraj Didwania
Thank you, Madhukar. So, when you compare our revenue from H1 last year to H1 this year, the mix has changed. In fact, we have actually seen a slight challenge in terms of the revenues from Mayfair. If you just exclude the Mayfair revenue growth itself, and you will see that we had reported Mayfair as a mix in the past as well. Excluding Mayfair, the revenue growth also will then track to a 15%-odd number. So, it’s a very healthy year-on-year revenue growth. The mix has changed because we’ve had some slowdown that we are seeing in organic growth in India. We’ve also seen some challenges and slowdown in Mayfair for the first half, but those numbers are also improving.
In terms of the premium growth, when you compare our last year’s H1 premium, while there was Raksha only for one month, the entire six months’ premiums for Raksha were added on the reporting number. That’s why when you remove that, you’ll see again a very healthy growth on group premiums being 15%, retail being about 40%, and aggregate being about 18% growth on premiums on a like-to-like basis. So, we have to do a like-to-like comparison there because the last year’s premiums are a little overstated because we reported Raksha on gross basis, although the acquisition was only done for one month.
Vikram Jit Singh Chhatwal
Thank you. Thank you, Niraj. Sandeep, would you be able to answer the balance sheet question on intangible asset growth?
Sandeep Daga
Yes. So, thank you, Madhukar, for your question. The intangible asset has increased by approximately INR34 crores. This is spanning on account of our investment into the technology assets. There were certain softwares, where we had invested some money, which is going to give us some benefit for the period or the perennial period of four to eight years’ time. Those assets helps us process the bills faster, improve the customers’ experience by processing the claims as and when we receive it from the hospitals and the members. So, primarily the investments into the software has resulted into the intangibles going up by almost INR34-odd crores.
Vikram Jit Singh Chhatwal
And I would also just add, Madhukar, for your information that this is predominantly based on the India piece that Satish, our CEO, spoke to you about for waste and abuse, Raksha Prime and the volume of work that we are doing there in automation and in AI. It also includes investments in works that we have been doing for building the global platform of global benefits that we have within the company, which Niraj referred to in his conversation on Mayfair. So, essentially, I think these are long-term investments that we are making towards building both the capabilities in India, which is primarily supported by global footprint and capabilities of managing Indians across the world.
There is a last question, which was the split of revenues, FY ’24 versus FY ’25, and I’ll ask Niraj to answer that.
Niraj Didwania
So, Madhukar, the Q2 revenue split, government has contributed about 10.2% and international healthcare benefits business continues to be at 4.7% for pure Q2.
Madhukar Ladha
Last year, right? 4 point, you said, sorry?
Niraj Didwania
I have given you —
Vikram Jit Singh Chhatwal
Last year versus this year.
Niraj Didwania
So, last year, international benefits business was at 5.85%, which is in this H1 at 4.7%.
Madhukar Ladha
Got it. It’s 5.85%, you said? 5.85% —
Niraj Didwania
5.85%, and government business — government key business was at 9.8%. This is H1 ’24. And current, we have already published in the investor deck.
Madhukar Ladha
Got it. Got it. Yeah. Okay, okay. Thanks. Thanks, Niraj.
Operator
Thank you. The next question comes from Arul Selvan from Independent Advisors Private Limited. Please go ahead.
Arul Selvan
Hi. Can you hear me? Am I audible?
Vikram Jit Singh Chhatwal
Yes.
Arul Selvan
Yes. Hi. Thank you for giving me this opportunity. I just had a couple of questions. The first question is with respect to your independent directors being, we got the news that they resigned on the same day. Any particular reason why both your independent directors resigned on the same day? I understand the first reason that I think someone got appointed by somebody else. Any color as to why the other independent director resigned on the same day?
Vikram Jit Singh Chhatwal
Thank you, Arul, for that question. I’d ask Niraj to respond.
Niraj Didwania
Yes. Hi, Arul. So, like you identified, Mr. Srinivasan had to step down because of a conflict of interest. He has been appointed as a CEO on an insurance company both as operating CEO. With respect to Mr. Anil Chanana, he has also indicated to us his preoccupation and also his personal commitments. So, we respected that, and that is why, coincidentally, it actually happened together, Mr. Srinivasan just got appointed between the last quarter and this quarter. So, that happened in this quarter. And Mr. Anil Chanana had indicated his preoccupation and personal commitments because of which he requested to set out.
Arul Selvan
Okay. Just one last question. I didn’t understand fully the previous participant’s question. I didn’t understand the answer to your previous participant’s question on how often — how does the billing cycle work? I think you indicated that the contracts are renewed on an annual basis. Right? So, once the contracts are renewed, can you just give us a sense of how often are the bills raised and are there any differences between how often you get — how quickly you get paid between government insurers, PSU insurers, non-PSU insurers and any other kinds of clients?
Vikram Jit Singh Chhatwal
So, Arul, Satish, our CEO, will respond.
Satish V. N. Gidugu
Yeah. Thanks, Arul. So, I will try and simplify this. These are annual policies that we serve. Not all policies start and end on the same day. Right? So, typically, let’s say, in a particular month, a corporate has renewed a policy, let’s say, for INR100 crores of premiums. Let’s say, our rate on that policy was 3.6%, which means we make INR3.6 crores of fee. Typically, insurers collect their premiums in advance. Then at the end of each month, typically, they give us a summary of all the premiums that they have collected for which we are the designated PPA. So, that’s what we call as a premium register. That sort of gives us the right to bill in some ways. In many corporates, especially the medium and the large corporates, where there is a large employee base that has a lot of voluntary participation enrollments, typically sometimes this process takes between 15 and 30 days, and it could probably then result in a lag of an additional 30 days in us getting the final premium register. So, on an average, we think of us getting the right to bill in 30 to 40 days after a particular policy is — 40 to 60 days in — after the policy is incepted. That’s what we call as the unbilled DSO. Then another 30 to 40 days to collect once we bill. That’s our bill DSO, which is what Sandeep, our CFO, was referring to, saying we are around 113 days collectively. And then typically at the end of the year, we’ll look more like a little over 100 days between billed and unbilled.
Arul Selvan
Okay. Excellent. And the point about any differences in the number of days it takes for you to collect the cash with respect to your PSU insurers and non-PSU insurers?
Satish V. N. Gidugu
No, no. No change at all. Our bill DSOs will consistently just between 30 and 40 days, we collect fairly well. And it also reflects in the cash balances that you see.
Arul Selvan
Okay. Excellent. Okay. Thank you. Thank you very much, and all the best.
Vikram Jit Singh Chhatwal
Thank you.
Operator
Thank you. [Operator Instructions] The next question comes from Chintan Sheth from Girik Capital. Please go ahead.
Chintan Sheth
Thank you for the opportunity. Hope I’m audible?
Vikram Jit Singh Chhatwal
Yes, you are, Chintan.
Chintan Sheth
Yeah. Thanks for taking my question, and congrats on a decent set of numbers. Couple of questions. One is on, you mentioned about the Paramount acquisition, we are awaiting the regulatory approval. If you just revisit the timelines by when we can expect a consolidation of the numbers to happen, by when you are expecting? Second is, good to know that Mayfair got this contract from the PSU insurer for ’24 to ’27. If you can just highlight a bit about the commercials, a bit about how to look at Mayfair’s revenue, because the international, sir, as you mentioned, has declined because of some softness we are witnessing in the first half. How should one expect internationally piece moving going forward? That — these are the two questions.
Vikram Jit Singh Chhatwal
Great. Thanks very much, Chintan, for your questions. May I request Satish to respond to the first question on Paramount?
Satish V. N. Gidugu
Yeah. Hi, Chintan. Satish here. Thank you for your question. So, while we cannot specifically comment on when we will receive the regulatory approval, in the past, in the acquisitions that we have concluded, historically, we have seen approvals between three and four months on the whole. So, we are hoping to see a similar kind of a timeline.
Chintan Sheth
So, most likely by this year-end is fair to assume?
Vikram Jit Singh Chhatwal
It’s safe to believe that somewhere in Q4, if the timeline hold.
Chintan Sheth
Right. Got it. And —
Vikram Jit Singh Chhatwal
— Mayfair piece, I’ll request Niraj to respond.
Niraj Didwania
Hi, Chintan. So, yeah, we also are excited about Mayfair winning this contract. Right now, the overseas medicals as a percentage of the health insurance industry is up 2%, so it’s not a very large market. It’s a huge capability building that they have done. So, at this point of time, it’s difficult for us to give you any commercials on what this could translate in terms of premiums or revenues for Mayfair. The contract has actually come at the fag end of Q2. So, we’ll start seeing numbers only Q3 onwards. So, we’ll probably try to give you any color on it in the future. Right now, very difficult to put any numbers to this contract.
Chintan Sheth
This is interesting because the contract is coming from the insurer, not from the — any group client, right, this contract?
Niraj Didwania
So, it is the insurer, and these are retail and individuals who buy policies. So, this is not a group business.
Chintan Sheth
Not a group. So, that’s a great win on the retail side as well. Right?
Vikram Jit Singh Chhatwal
That is correct, Chintan. Essentially, we find this overseas Mediclaim, which is the travel insurance policies that every individual would typically purchase when he or she travels outside of the country. Yeah.
Chintan Sheth
And last piece on the industry being — getting consolidated, the fewer players are there as a TPA services and the underlying need for TPA has been increasing day by day because of the regulatory push by the government or regulator to process the claims faster. Do you see or do you — is there a case for the rate revision to happen favorably for the TPA maybe two, three years down the line when things normalize and industry is on a growth path?
Vikram Jit Singh Chhatwal
Chintan, I think I would not be able to prophesize on what will happen to rates. I clearly will be able to say to you that the market continues to gravitate towards using TPA services, and that trend has seen no change in the quarter-over-quarter conversations historically that we’ve had with you.
Chintan Sheth
Okay. I’ll jump back in queue. Thank you.
Vikram Jit Singh Chhatwal
Thank you.
Operator
Thank you. The next question comes from Vinayak Mohta from Axia India. Please go ahead.
Vinayak Mohta
Hi. Good evening. Am I audible?
Vikram Jit Singh Chhatwal
Yes, you are.
Vinayak Mohta
Yeah. Hi. Good evening, sir. Congrats on a decent set of numbers. There were a couple of things I wanted to understand. The first thing I wanted to understand, who exactly owns the customer in this entire value chain? As in today, if we are doing group business, so the clients would be the likes of Infosys, Wipro, et cetera. So, in this industry, is the case where clients are coming to us and asking you to go ahead and find the best policy for them? Or are they going directly to the insurance companies and then the insurance companies are selecting you as the preferred PPA? How does this work? Who owns the customer in this case?
Vikram Jit Singh Chhatwal
Thank you, Vinayak, for your question. I’d request Satish, our CEO, to respond.
Satish V. N. Gidugu
Hi, Vinayak. So, in the India TPA business portion of our business, as per the regulation, we are an intermediary tasked with servicing the health insurance. We don’t distribute, we do not place risk, we do not place business. We are purely on the servicing side. Our principal who pays us the money, he is the insurer. All intermediaries are remunerated directly by the insurance company. We cannot book revenues from anyone else. However, our charges obviously are part of the overall charges and the premiums that the policyholders pay. Now, the regulation gives policyholders a right to ask for a choice of their TPA from the list of TPAs that the insurer has the relationship with. Our group historically has exercised that exceptionally well because for them it’s a benefit first and a claim later. So, the groups have been fairly vocal in expressing their service level for specific asks, how they would like to be serviced. And as a result, based on performance, based on evaluation, based on experience, the policyholders have increasingly made their own choice of who they want to work with. That’s where our right to win in group also comes from. And, of course, there could be multiple sources of getting new business. Insurers typically place business with us or groups could ask the insurers we want to work with Medi Assist or some of the key brokers in the industry that they help customers or corporates make decisions, they also play a role. They have a bit of an advocacy role that also helps in this process.
Vinayak Mohta
Understood. So, sir, in this case, what I am given to understand is that we remain a very important intermediary in the entire value chain out here. In that case, when you are providing services, which cannot be replaced by any — by maybe the insurance provider or the broker, then why is it the case that our take rates continue — have continued to decrease over the last three to four years now? Because from my understanding, if we have that kind of a service that we are able to provide and we are able to make life easy for the insurance company, then why would we not be able to sustain our take rates on the revenues front as a percentage of premium?
Satish V. N. Gidugu
So, Vinayak, Satish here again. I think it’s a mix of multiple concepts. I will try and explain two or three of those. One, the take rate is a bit of a derived number as much as you see it as a leading indicator. And there are multiple kinds of benefits today that are being offered, especially in the group business when you see a significant movement in the take rates. The employers typically provide a base cover, which sometimes includes employees, spouses and probably his children. Then employers are increasingly making multiple other benefits that are well negotiated, made available to employees. For example, you could cover parents, but you have to pay as an employee. You could buy outpatient cover, but you have to pay. You could top up your insurance and increase the cover, but you have to pay for it.
Typically, in groups, there is a significant uptake on these add-on benefits, but not 100% of the employees opt for these benefits. Right? So, as the mix is changing, you also see sort of take rate changing, but internally we track as a team on what is the effective equivalent of per member per year and what is our yield, and that becomes sort of internal North Star on the quality of revenue and the business. And many times, the take rate is sort of means to the end. Right? Because in corporates, where the per life premium is very high, a smaller take rate could still get to a higher yield and vice versa. So, I think that’s on why the take rate sort of looks the way it is.
I think the second and the more important thing that we have focused on is, one is, of course, perhaps the retention is a North Star metric. In an annual renewal business with over 10,000 corporates, we manage a 94.3% retention. And, of course, as corporates stay with us, as they continue to grow their organic growth, same-store growth accrues to us, which is a significant factor. But at the same time, because it’s an annual renewal business, the corporates are back to the negotiating table every year. And one of the biggest challenges that they have is medical inflation that they have to manage. So, from all reports that you see, the medical inflation is in the mid-teens in the country. So, which means that every time you are in, you pay that much more to get the same benefit. So, that’s where as Medi Assist one of our key focus remains that we manage medical inflation at a portfolio level. We do — that’s where we do a significant amount of work in building cashless network and enabling our corporate accounts and clients to get more without having to spend more, and that’s what actually gives us the right to win.
And as long as they are able to manage their inflation, some of these conversations on take rate do not exist because the value that we deliver on the entire portfolio from managing inflation far exceeds the fee that we charge. In fact, if you recollect from our RHP, the savings that we deliver back to our insurer partners on account of discounts and the fraud, waste and abuse that we prevent exceeds the revenues today that we get from the insurers. And when — so, that’s sort of the symbiotic piece in the way this business works. Sorry for the long-winded answer, but I hope it gives you a sense.
Vinayak Mohta
Yeah. No, I get that. So, in that case, then what I am trying to understand is that there are two factors which will make you a very strong player within the industry. So, in the sense, from a TPA standpoint, the first thing is that you are able to provide — you are able to be a very large cost saver for these insurance partners. So, point number one, do you have any numbers that you could give on that you are able to save them X percentage of cost because they are already working on a very thin margin on the combined ratio? So, even if you are able to save maybe 2% to 4% for them, it becomes a very large — you become a very important part of that channel.
And secondly, like in USA, do you believe that you — India will eventually move into a position, where TPAs own the customer and TPAs have a lot of bandwidth to optimize and bring about those services to the company specific as in what they want? So, in that case, what happens is TPAs become a very important part of the customer and then the insurance companies are relatively in a weaker position. So, do you think you will eventually navigate towards that end from a longer-term perspective?
Satish V. N. Gidugu
Yeah, that’s a very interesting question. I think there is — let me just go back to the first question on the value that we create, which I think you articulated better than I could ever. But if the medical inflation historically has been 12%, 13% annually, we have delivered an inflation in average claim size at 5% or sub-5% over the years. So, that’s sort of where the first value proposition comes. The second part, like I said, is often the discounts and the network efficiency and the fraud, waste and abuse savings that we deliver is nearly 2x the revenues that we deliver. So, you could then back-calculate the impact that the insurer has at a portfolio level because these can’t be generalized. Right? These are very portfolio-specific or account-specific [Indecipherable] on this. Clearly, I think, for us, the real focus right now is, I think it’s not about owning the customer, it’s not about somebody else relying on you. But today, if you look at our business in the group and retail, we serve upwards of 5 crores of Indians in our group and retail business. We touch nearly 23 crores of citizens in government business. Right? And for us, the real focus right now is to be the platform of delivering capacity for supporting expansion of health insurance penetration in India because we believe that with the government’s vision for insurance for all by 2047, we would need platforms of our scale and size, where the service delivery can be taken for granted and the insurers can focus on product innovation and distribution and policyholder satisfaction, and that sort of remains our focus area.
I will ask Dr. Vikram if he wants to chip in and add anything else?
Vikram Jit Singh Chhatwal
Nothing. Thank you, Vinayak.
Satish V. N. Gidugu
Okay.
Vinayak Mohta
I had two more questions. Can I ask that or should I come back in the queue?
Operator
Vinayak, sir, may we request you return to the queue?
Vinayak Mohta
Sure.
Operator
Thank you so much.
Vinayak Mohta
Thanks.
Operator
The next question comes from Nikhil Poptani from Kizuna Wealth. Please go ahead.
Nikhil Poptani
Hello? Am I audible?
Vikram Jit Singh Chhatwal
Yes, you are, Nikhil.
Nikhil Poptani
So, hi, sir. [Indecipherable] ask you, is the take rate going below —
Operator
Sorry to interrupt. Nikhil, sir, you’re sounding muffled.
Nikhil Poptani
Hello? Am I audible now?
Vikram Jit Singh Chhatwal
Yes, you are, Nikhil.
Nikhil Poptani
Hello? Hello?
Operator
Yes, sir. Please go ahead.
Nikhil Poptani
Yes. So, my question is regarding the take rate. Is our take rate going below 2.5%?
Vikram Jit Singh Chhatwal
Sorry, Nikhil. We are not able to —
Operator
Nikhil, sir, may we request you to use the handset mode, please?
Nikhil Poptani
Hello?
Vikram Jit Singh Chhatwal
Yes, Nikhil.
Nikhil Poptani
Hello?
Vikram Jit Singh Chhatwal
Yes, Nikhil. Please go ahead.
Nikhil Poptani
Yes, sir. So, my question is regarding the take — sir, is our take rate going below 2.5%? And if we remove the exceptional item from the last year, our profitability has also not grown even that much. So, can you allude on that?
Vikram Jit Singh Chhatwal
Yeah. So, I will just ask Sandeep to respond to that, please. Thank you, Nikhil.
Sandeep Daga
So, thanks, Nikhil, for your question. The last year’s profit had some exceptional one-time items. Like some one-time tax gains, inter-tax gains, et cetera, which we got and some Ind AS adjustments on the revenue because of the Raksha merger with Medi Assist. So, it was the one-time gains, which we got last year. And in the current year, there have been some one-time exceptional provisions in the payments, which we have accounted for. If you were to remove the impact of the exceptional items, our profit would have grown by almost 18%, 19% year-on-year for the H2 of this year versus H2 — H1 of this year versus H1 of last year.
Nikhil Poptani
Okay, sir. And can you just allude on the take rate? Like, is our take rate going lower than 2.5%?
Satish V. N. Gidugu
So, I will take that question, Nikhil. I think there is only a portion of our business that is subject to premiums and take rates, while it is a significant portion, not all of it, right? The government revenues, the international benefits and even some of the group and retail portfolios that we run are not subject to a take rate kind of a conversation. I think we continue to be very close to the 3% take rate. It moves based on the seasonality and the specific corporates that renew in that customer. And like I mentioned in response to a previous question, the kind of add-on benefits and kind of participation in some of those incremental, but lower ticket benefits, right? So, we continue to focus on quality of revenue from our per member per year perspective. And that’s one of the — definitely quality of revenue is one of the drivers for the sustained and improving margins.
Vikram Jit Singh Chhatwal
Thanks, Nikhil.
Nikhil Poptani
That’s it from my side. Thank you.
Satish V. N. Gidugu
Thank you.
Operator
Thank you. The next question comes from Mohit Surana from HDFC Asset Management Company. Please go ahead.
Mohit Surana
Hi, sir. Good evening. I just had one question. In terms of our profitability, if you could sort of indicate any timeline where we get to our targeted margin levels of 24%, 25% at a company level? Thank you. That’s it from me.
Vikram Jit Singh Chhatwal
Thank you, Mohit. I will hand over to Satish.
Satish V. N. Gidugu
Mohit, I think it’s hard to put a time, but I think a couple of qualitative things I can share. We have sort of the lowest we went was slightly lower than 21% when we bought in Raksha and then we had multiple integrations going on. As of now, with all of the portfolios, we have sold for the retention, which is still 94.3% on the consolidated base. So, that sort of synergy is already in from a revenue perspective. Including Raksha headcounts, you would know their lower profitability of all the TPAs that we have acquired, including Raksha headcounts, we have improved our revenue per average headcount from last half to this half. And with all of the synergies beginning to kick in, we’ve already seen a marginal improvement and uptake in our margins and we expect to continue to sort of accrue margins. Right?
From where we intend to get to, I think I would like to remind that this is a growing industry with a huge opportunity out there from taking the lead in setting benchmarks for policyholder experience and the kind of work that we do in investments in fraud, waste and abuse prevention, and improving our market share. So, it is likely that some of the improvements we create in the margins are clubbed back into the business as investments for growth and scale. But absolutely, the focus is on continuous and margin expansion, and that remains a priority at this point in time.
Vikram Jit Singh Chhatwal
Also just — Mohit, just to add, I think in our previous dialogues with all of you, we typically shared the view that it takes between three and four quarters from the time when we acquire a business to be able to normalize the margin profile. As we have demonstrated in this quarter, we have retained higher than the typical retention rates that we have in our business. And I think that the continued upsell that you see in the margin reflects the fact that from a cost perspective, the synergies are beginning to accrue. We will continually hope to see that journey continue.
Mohit Surana
Okay, sir. Thank you. That’s it from my side.
Vikram Jit Singh Chhatwal
Thank you.
Operator
Thank you. The next question comes from Kunal Gandhi from Yashwi Securities. Please go ahead.
Kunal Gandhi
Hello? Congratulations on a decent set of numbers, sir. My question is related to the regulatory environment that Medi Assist operates in. So, is there any regulatory cap or a maximum limit that we can charge on the premiums collected that have been imposed by the IRDAI?
Vikram Jit Singh Chhatwal
Thanks, Kunal. I will ask Niraj to respond to that.
Niraj Didwania
Hi. Thanks for the question, Kunal. So, as a TPA, we are under no regulatory obligation from any of the authorities to cap any of the fees that we can make. The only restriction we have is our fees are only from the insurance company as a TPA. We cannot charge any of the other stakeholders, but that’s in our TPA business. The parent company also has ancillary businesses, including our software services health management, where we do have other revenue models and other customers.
Kunal Gandhi
Okay. That answers my question. Thank you. All the best.
Vikram Jit Singh Chhatwal
Thank you.
Operator
Thank you. The next question comes from Darshan M. Bhandarkar from Banyan Tree Advisors. Please go ahead.
Darshan M. Bhandarkar
Hello? Hello?
Satish V. N. Gidugu
Hi, Darshan.
Darshan M. Bhandarkar
Hi. So, my question was on claim service. Of the total claim service that we have done, how much is the leads for online and offline?
Vikram Jit Singh Chhatwal
Darshan, if I understand your question, of the total claims that we have administered, how many are online versus offline?
Darshan M. Bhandarkar
Right.
Vikram Jit Singh Chhatwal
And when you mean online versus offline, you specifically mean — if you could explain that to us, please?
Darshan M. Bhandarkar
Like the claim, there online means where we have operated that claim through the system, through our software, and offline means where we are using this personnel, where they are working on ground with this [Speech Overlap]
Vikram Jit Singh Chhatwal
Darshan, the simple response is that we don’t bifurcate our business like that. Technology is the mainframe of our administrative framework. And so, collectively, I would answer that by saying that 100% of our claims are processed with and through the technology platforms that we have built.
Darshan M. Bhandarkar
Yeah. Thanks.
Operator
Thank you. The next follow-up question comes from Madhukar Ladha from Nuvama. Please go ahead.
Madhukar Ladha
Hi. Thank you for taking my question again. So, you mentioned that there were some one-off items in the base period and in the current first half. Can you quantify some of this? Because you are saying that if we were to remove that, then the PAT growth would be almost 18%. That number is quite good and quite big compared to what is actually getting reported, which is just like — which is a negative 10%, right, on PAT? So, that would be helpful. And also, with the split that you gave, I can see the domestic non-government business then has grown 17% in the first half. How — can you quantify Raksha’s impact in the base period and in the current period so as to figure out what the organic growth has been in this business? Yeah.
Vikram Jit Singh Chhatwal
So, Madhukar, I’ll [Indecipherable] I’ll let Niraj respond to this. Just to let you know that we don’t actually — when we consolidate portfolios and run them together, and in a 12-month renewal cycle, everything is organic whether it came from either Raksha or was intrinsic to us as a business in our portfolio represented by the 94.3% up from about 94% in the similar period last year to 94.3% now in H1 FY ’25. But on the first part, I’ll hand over to Niraj to respond.
Niraj Didwania
Madhukar, given we have one last question, we would like to take, can I request you to connect offline on the couple of questions and satisfy that?
Madhukar Ladha
Sure, sir. Okay.
Niraj Didwania
Thank you so much.
Operator
Thank you. The next question comes from Chinmay from Prescient Capital. Please go ahead.
Chinmay Nema
Good evening, sir. Sir, could you give some sense around your wallet share with your clients? How has it fared over the last two, three years and in the H1 also? Because my understanding is that typically all insurance companies work with the top two, three, at least with the top two, three TPAs, if not more. So, barring the acquisition, have you been able to increase your wallet share with these companies?
Vikram Jit Singh Chhatwal
I’ll hand over — thank you for that question. I’ll hand over to Satish.
Satish V. N. Gidugu
Yeah. I think a couple of things. One, multiple insurers work with multiple TPAs, often 10 to 15 TPAs as an insurer. And that’s a matter of choice for each insurer. Right? Number one. And number two, from a wallet share perspective, of course, there is — there are the TPAs and then there are — there is work that the insurer does on their own in-house. But if I sort of don’t combine all of that, and you look at from a group or a retail perspective, we today, as of H1, done about 28.3% of all group premiums in the country. And we work with all insurers who manage group portfolio. And different insurers have different strategies on how they distribute work. But our market shares at the country level, right, for the group premiums has been steadily increasing over the years and then currently stands at 28.3%. And this is across all insurers. Right? And similarly, in retail, today, we manage about 5.6% of India’s retail in a very fragmented and sort of in-house heavy market, we still manage a 5.6%, which is a very sizable portion across about half the insurers that we work with on the group side. So, I think the way we look at it is how many insurers we work with and how much of the work we are sort of able to take over.
Chinmay Nema
Okay. Just wanted to confirm the premium under the management of 18.1% that we have reported for the — this half year. Is this purely organic?
Satish V. N. Gidugu
Well, like Dr. Vikram said in the previous call, I think the way this works is like we said, we run an annual renewal business. Right? So, every time we acquire another TPA, the moment we become the owners, it’s our complete responsibility to deliver service to that customer from that moment on. The renewal could be just an hour away or one day away or 365 days away. We run it just — I mean, it is for us an organic business because it is already part of the portfolio, often with the same insurers that we already work with. Right? So, the retention is 100% our responsibility. So, yes, it has an element of premiums that are coming from the TPAs that we have acquired. But for us, it’s a purely organic view from the time the customer is ours. In fact, that’s the expectation that even the regulator has that we take 100% responsibility for every policyholder from the moment we become the administrators.
Chinmay Nema
And from a guidance perspective —
Operator
Sorry to interrupt. Chinmay, sir, we have exceeded the conference time. So, may I request you to take this offline with Niraj, sir, please?
Chinmay Nema
Sure.
Operator
Thank you so much. Ladies and gentlemen, I would now like to hand the conference over to the management for closing comments.
Niraj Didwania
Thanks, everybody, for your active participation. We are available offline to address any further queries you may have.
Vikram Jit Singh Chhatwal
Thank you, and have a good evening.
Operator
[Operator Closing Remarks]