Bajaj Finserv Ltd Q1 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Hi, sir, thank you for the opportunity. I have two quick questions on one, which on BAGIC and BALIC. So in BAGIC, I just wanted to understand that we have seen some strong growth in areas like motor TP and tire where we have been hearing that the competitive intensity remains fairly strong. So I just wanted to know your thoughts on what are you seeing in the market? Are you -- you are going after favorable micro markets where you expect the profitability will be better than what you would normally expect in the case of a high competitive intensity, that is what you wanted to ask from you regarding BAGIC and maybe anything you can talk about motor TP price cycle related that would also be very useful. And in terms of BALIC, I just wanted to understand that I think this is what the third quarter relative quarter that I think that the agency channel seems to be growing on a year on year basis. So just wanted to understand that given, that how you have steadily improved on the margins and can be growth is better than the top line growth. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 25, 2025 / 1:00PM, BJFS.NS - Q1 2026 Bajaj Finserv Ltd Earnings Call So I think definitely, this does not in towards a productivity drop is kind of in terms of how and is generated. So if you could give us some color on how the underlying product mix would be on the agency side, keeping this in perspective? So yes, those will be my two questions, sir.

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Yes, sir. Just a quick follow-up, if I may. Yes. So sir, at one point of time, I think so Bajaj General is known as for their best-in-class operating profitability combined ratio has been for many years under 100%. But now we are seeing that this number generally creeps up ahead of 100% run one and run two. So should we think this as a steady state given how situations are there? I mean offline, I understand that there is an impact of one by ending here. But overall, should we expect that maybe this will continue to remain elevated? Or is there any scope that we can go back to a less than 100% scenario over the next two, three years? Tapan Singhel - Bajaj Finserv Ltd - Managing Director, Chief Executive Officer of Bajaj Allianz General Insurance Company Limited As an endeavor for the company, you always maintain a combined with close to 100% is what I always mentioned over time. And that's what it remains, and that is what our endeavor shall always be because our belief is even the market may be at whatever combined ratio, the discipline for business has to be there because good companies with high discipline are the ones we serve customer very well. And this, you can look at data across you'll find that companies with a good discipline of doing business, there deviance ratio is among the lowest in the industry. And if you look at our company and you pickup for the time IDA is publishing deviance ratio. You'll find that deviance in spite of having a large customer franchise. In fact, last year, if you see, we issued close to INR4.83 crore policies. We are the largest policy issuer in the Indian market in terms of number of customers. It is a large customer franchise also, our grievance ratio has been among the lowest continuously every quarter, every decade if you look at. So this case shows that a good company with good discipline serves customers very well. So that is why endeavour is not to lose sight of running a company which is well in spite of how the market behaves. Now will it be below 100%? Will it be over 100%? I think that as the business and things progress. That will always be close to 100% that has been endeavored and that is what we are pushing for. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 25, 2025 / 1:00PM, BJFS.NS - Q1 2026 Bajaj Finserv Ltd Earnings Call

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Yeah, so we are very clear, sir. Yeah, I'll, in the interest of time, I'll, maybe take for follow up of like. Thank you so much and all the best, sir.

Question: Sanketh Godha - Avendus Spark - Analyst : Yes, thank you for the opportunity. Sir, first question is on BALIC. Basically, so as you said, the second half reversal should happen in the growth because the base naturally will be favorable for you. So if that happens then given last three quarters, we have single-digit zone to negative zone. So how much growth we can expect to play out for the full year in life insurance given the second half reversal is expected to happen? That's point number one. And with respect to the growth only if you can even give a color on group business, which has been a bit of a struggle. I just wanted to understand that color, too. And lastly, on life, the margin data, what you witnessed in almost 4% in first quarter compared to the previous first quarter. So is it fair to say that you are 14.5% what you exited for the full year we can experience a similar number to play out for entire year, given growth will come back, your restructuring will play out and even the terms will be improving? So is it fair to say that you can fairly exit that similar delta change for the full year number too? Those are two of my questions on BALIC. Maybe one -- I have one on BAGIC which I'll ask after.

Question: Sanketh Godha - Avendus Spark - Analyst : Okay. Perfect. That answers my question. And maybe two simple questions on BAGIC. I just wanted to understand the outlook on tender-based businesses, maybe in the current year? I know it's a difficult question to answer whether you win the contract or not. But given it is INR5,000-odd crore last year, for you, whether a similar number can be expected in government tender-based businesses in the current year. It's more from a group point if I'm asking this question. And second, a data keeping one, if you can quantify your capital gains in the quarter it will be useful. Tapan Singhel - Bajaj Finserv Ltd - Managing Director, Chief Executive Officer of Bajaj Allianz General Insurance Company Limited So, thank you for the question. So the interesting question because if you look at insurance business, and I think have progressed many times in the past also it's a risk business. There are two things that you would never watch in terms of progressive move on that. First is, if there is certain catastrophes happen, certain huge losses happen. Then those times, the loss ratios move up and for some time as well as a hard market and a soft market and the market would move on that basis. Second is on businesses. So let's say, if you look at tender business. Now what's there is always to be at the right price, if we can get a tender, good. If we don't get a tender, so be it. We are not somebody who in desperation would do business just for the sake of pushing up our top line. Having said that, consistently, we look at over a long time, and we should also see that we have been organically growing company with no acquisition, and we have reached the top three in terms of top line also, we should be there. But the pressure that just for top line, we would not put any price to bring if not happen. So whether it will happen or it depends on how other players will look at it. If you look at the crop business, as I mentioned earlier, I see issues intensity there. The price at which trades are going, we are not comfortable with that. So you're perfectly fine to let it be because you have seen a said earlier, is cyclic. It again comes back at the price that you would want. So I cannot give you an exact answer in terms of how much tender business we shall be getting going forward. But I can give you an answer that we shall be prudent in our pricing, and we shall keep our philosophy of trying to see that we run the business well. That doesn't change which should be there. If it comes in a price range in which we feel it is company for us to run the business, and serve the customer there, we should be getting it. Otherwise, this is not it's perfectly fine, let it go for some time. That would be our safety numbers.

Question: Sanketh Godha - Avendus Spark - Analyst : Got you. And if you can quantify unrealized portion in our balance sheet now?

Question: Sanketh Godha - Avendus Spark - Analyst : Sorry, come again?

Question: Shobhit Sharma - HDFC Securities Ltd - Analyst : Yeah, hi, sir. Thanks for the opportunity. So, I have a few questions on BAGIC. Then I will move to BALIC. So firstly, on BAGIC side. Sir, in the combined ratio, if you can help us understand what has led to a significant increase in the net commission in the expense ratio? Secondly, coming to the motor TP side, there is a significant reduction in the loss ratio. So can you help us understand what has led to this lower loss ratio? Was there any one-off this quarter? And how should we think on a full year basis for this? And on the crop side, do we expect loss ratio to revert to our historical levels? These are my questions on BAGIC then I will ask on BALIC. Tapan Singhel - Bajaj Finserv Ltd - Managing Director, Chief Executive Officer of Bajaj Allianz General Insurance Company Limited Okay. So let's look at crop. The losses will depend on how the weather performs. That is how -- if the weather goes good, and obviously, the loss ratio is lower, if it doesn't perform well, then it goes up. But if you look at an average and the price point at which it is, right now, the way the market has been putting I think to our view, that's below the average losses which happened. So if the year has any kind of movement, then the losses move up. From our perspective, I think the tender at which we had put [crops] were comfortable. So we don't see on an average basis, much movement from what we had on the crop business. On the acquisition cost movement, when you acquire a business, which is comfortable and profitable, there would be a pain on acquisition costs, which should be there. And as retail business moves up, you will see that pain happening there. And that's why you see a bit of movement, but that would obviously be because we are trying to acquire more business, which has a lower loss ratio in that basis. And that's why you see a bit of movement there. On TP, I think it is -- you should look at TP loss ratio in a year, it's a long period, not on a quarterly basis. It depends on how the claims get settled, how the results get released. But overall, you should see on a yearly basis, how it moves not on a quarterly basis. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 25, 2025 / 1:00PM, BJFS.NS - Q1 2026 Bajaj Finserv Ltd Earnings Call

Question: Shobhit Sharma - HDFC Securities Ltd - Analyst : Yeah. Thanks. That was helpful. Coming on to BALIC, sir, overall, we have seen a healthy improvement in margins. But sir, can you help us understand the measures which we have taken on the cost rationalization side? And how should we think about it going forward? And secondly, can you please help us understand why there is a drop in the 13 and 49th month persistency? Is it linked to any particular product or in this segment?

Question: Shobhit Sharma - HDFC Securities Ltd - Analyst : Yeah, thank you, sir. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 25, 2025 / 1:00PM, BJFS.NS - Q1 2026 Bajaj Finserv Ltd Earnings Call