Bajaj Finserv Ltd Q4 2025 Earnings Call Transcript

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

Question: Avinash Singh - Emkay Global - Analyst : Yeah, good afternoon. Thanks a lot for the opportunity. Two questions. The first one on Magic. Now your capital position is very strong, and also there have been some changes regarding the cross border insurance regulation and all. Do you see, I mean, your retention strategy changing from here? Because I mean, if I see typically, of course you have been writing crop and all that but you also partly explaining that, but your retention has will lower despite the fact that your capital position, yeah, is very strong. And now they kind of at the margin some changes required to this cross border insurance and all. So do you see yourself kind of a changing your retention strategy or increasing your retention going forward? That's my question on Magic. And on Valik, now a lot of -- I mean, regulatory changes are already kind of behind, in terms of your regulation or UN regulations going forward. I mean and also that the markets are now more sort of I would say balanced than the buoyancy it had in last year. What kind of a product mix and corresponding the trajectory of [VMB] margin you see from here onwards. Thanks?

Question: Avinash Singh - Emkay Global - Analyst : Thank you.

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Hi, sir. Thank you for the opportunity. In for that -- I just wanted to understand the combined ratio outcome. So first of all, the loss ratio looks, very benign this quarter, but I see that the motor and the fire loss ratio has.

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Yeah, is this better?

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Yeah, sure. Thanks. So I just wanted to understand the combined ratio outcome because the loss ratio and it has been benign. I can see that [motor TP] and fire loss ratios are lower. So just wanted to check about the reserve releases there, which [cos] are. I mean, where you felt the need to be there is a particularly looks from the triangle that is accessing the '24, there has been a bit of a deal. So if you could give some comments on that. And on the expense side, again, there has been quite a increase. So is this primarily coming due to the fact that you know most of the group this quarter has come from the broker segment and the outgo has been higher. So if you could just break down that would be very helpful. For that, I mean that sir first of all, congrats on the in the outcome I think very strong numbers which you have reported compared to what we are reporting historically. Wanted to understand that right now, how much of cost overrun is based into the margin like I -- if we were to absorb later on what could be the possibility if you could give some color on the structural nature of the margin for our product mix. And secondly, if you could call out the reasons for the operating bars and the assumption changes in the work, so these are for that you can that just a small question on. That's health, if there is a segment mentioned international. Where I think a lot of -- a large share of claims are coming. Just wanted to understand our nature of offerings here who will be the customers if you could get some color and whether the claims outcome is unfavorable in this. Yes, that's all. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 6:30AM, BJFS.NS - Q4 2025 Bajaj Finserv Ltd Earnings Call

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Like this is just a follow up I mean in terms of commissions, et cetera. There is nothing very incremental even due to the general exchange.

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Got it, sir.

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Okay, sir, understood. This is a good highlight the health.

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Yes, sir. Just one small query was that in terms of the profitability, if I were to think about the domestic versus the international, how will it stand? Devang Mody - Bajaj Finserv Ltd - Chief Executive Officer, Bajaj Finserv Health Ltd., Group Head - Strategy, Bajaj Finserv Ltd No, sir, in terms of profitability, obviously internationally is significantly higher, but actually it's not a very apple to apple comparison. The investments in creating capabilities is completely absorbed by domestic business. So it's not a apple to apple comparison. It's like international business for us. It's actually [cream] part of the overall, business architecture. So -- and the profitability in longer term also will always remain higher in all of us know that India is a very extremely cost conscious as well as competitive market. So going forward also we believe that international will be higher on profitability, significantly higher on profitability, but the market size there is tremendous, so it's not that we are pricing ourselves too high. It's just that those markets have ability to pay more. The key for us is how do we create capabilities. On what we internally call this whatever we sandbox in India, how are we able to convert that into capability which can be sold? The profitability will always remain high interest.

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Understood, sir. Thank you so much for the detailed answer. Thank you and all the best.

Question: Madhukar Ladha - Nuvama Wealth Management - Analyst : Hi, good afternoon, everyone. Just had a couple of questions. First, on Valik, the margin improvement has been very good. Congratulations on that. But in terms of growth, I see that growth is slowing down, which is as per what we had discussed earlier as well. But moving on into FY26, '27, how do you see AP growth and [BNB] growth panning out? Some sort of sense of their, will help us. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 6:30AM, BJFS.NS - Q4 2025 Bajaj Finserv Ltd Earnings Call Second, on the variances -- operating variance and assumption change, I understand all of this is related to, persistency, or is there any other element of mortality or expenses also? So those are my questions on ballet. On Magic, the underwriting performance has been quite good this year. However, if you look at GWP growth, it's a little bit slower. So we are -- I'm guessing, losing out on market share in a few segments. Any comments around how do you look at that and I sense that growth in motor also has been a little lower than the industry. So some color around market shares would be helpful. Thanks.

Question: Madhukar Ladha - Nuvama Wealth Management - Analyst : Okay, great. Thank you for the detailed answer and on Vajik. Unidentified Participant Yeah, so on Vajik, if you look at, no -- if you look at the number, we bit surprised on your comment that you would have lost market share. Look at your number and I explained the one by and that is why this is. And we have a disproportionate higher share of the market of long term business. So I think that is what gives you this perception. Otherwise, if you look at segment wise, you don't know if I have I did that's probably segment wise number. To look at it then, I think be it commercial lines, be it motor, be it retail health, be it no government health, it'd be at the only two lines of business where our share would be lower than the market one would be crop insurance which we had mentioned earlier that if you look at this time in crop, and I remember a couple of years back everybody was shying away from crop. And the question I was answering is that crop business, no, we understand and we do it. And we continue doing it and then when people saw that we did it well, everybody's into the crop business currently and obviously when we see a lot of intensity in some business and pricing is not what we feel is appropriate, then we go slow a bit. So crop insurance, I think we would have a lower market share and in this cleanness it is because the cattle business that we had, which we have not gone slow because the lending has gone slow, not because that we have store intensity with lending on their business so manage that I think would have been ahead of market and online of business. And you pick up the yearly number actually ahead of the market is the one by one, which is playing out in spite of -- no, letting go of some crop business and letting -- not letting go because of lending being less in the cattle business, that being a bit less. So that is where the actual question is. [Tarun], you want to add something or Raman, you want to add something?

Question: Madhukar Ladha - Nuvama Wealth Management - Analyst : Great. Understood. Thanks a lot, sir.

Question: Manish Dhariwal - Fiducia Capital Advisors - Analyst : Yeah, good afternoon, am I audible?

Question: Manish Dhariwal - Fiducia Capital Advisors - Analyst : Yeah, so thank you for this opportunity. So I -- my question was, at two levels. One, that the organization, the group has taken this decision of buying the 100% of the two insurance businesses. Now -- and now, your approvals and all -- I mean the thing has sunk in earlier it was that. It's going to happen sometime now it's happened now you're insured execution part is happening. I wanted to understand how over a period of about three to four or five years. It's a long term situation how would the favor of these two businesses undergo a change like you did mention about some international forages which I'm sure earlier there was maybe some restrictions Allianz being a partner already being a global player. So if you could just give us some long-term perspective on both the insurance businesses that you run?

Question: Manish Dhariwal - Fiducia Capital Advisors - Analyst : Thank you. And some bit of favor on the health business, the way like the number of transactions are increasing, wider acquisition happening. So steps are happening, like more and more hospitals and the footprints expanding, how -- when are you seeing this to emerge and a meaningful business say three years, four years, five years where the numbers actually make an impact on the on the on the balance sheet?

Question: Manish Dhariwal - Fiducia Capital Advisors - Analyst : Of course we have numbers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 6:30AM, BJFS.NS - Q4 2025 Bajaj Finserv Ltd Earnings Call Devang Mody - Bajaj Finserv Ltd - Chief Executive Officer, Bajaj Finserv Health Ltd., Group Head - Strategy, Bajaj Finserv Ltd Yeah, we are very proud to have very large, companies in the group which contribute, substantial portion of consolidated revenue, and, so, see our view as a group about health businesses health remains one of the largest spend item for Indian consumers and it will only grow further. In percentage spend of Indian households in coming years. Point number one. Point number two, health has ripe for disruption in our view with ingestion of new technologies, specifically, yeah, because there are certain nuances of health business which are very suitable for usage of AI globally health thrives on unstructured data because every patient is different. And third one is India has tremendous population and the -- in technology world, if I say humongous training data. This can be put to use to service Indian consumers and also to monetize those capabilities globally, but it is a health risk has longer gestation, so number relevance is a matter of spreadsheet work. What we are focused on is that we add value to Indian ecosystem and Take those capabilities globally to add value to some of our international customers. So it, it's a longer journey, but as a group we are, in my view we are extremely suitable because we are long term players in anything we do. To add, to solve this problem over a period of time. So it's a very contextual question. Number answer would require a lot of spreadsheets and we are not focused on. That relevance on spreadsheet, yeah.

Question: Umang Shah - Banyantree Advisors - Analyst : Hi, sir. Am I audible?

Question: Umang Shah - Banyantree Advisors - Analyst : Yeah, thank you. Sir, just one question on Valik. What would be -- what -- how much of our AP would be coming from the largest bank of partner that we work with?

Question: Umang Shah - Banyantree Advisors - Analyst : Sure, sir. And sir, with that player now looking to acquire an insurance company that we compete with, would you be looking to reduce your presence there or would that business be coming at a lower profit than other channels?

Question: Umang Shah - Banyantree Advisors - Analyst : Right? Yes.

Question: Umang Shah - Banyantree Advisors - Analyst : Yes.

Question: Swarnabha Mukherjee - B&K Securities - Analyst : Sure, sir. Thank.