PB Fintech Limited

Yashish Dahiya for his introductory address. Management

Thank you Rasleen. Good morning all. Sharing our update for the last quarter

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₹7,030

date for the last quarter and the year FY24-25. Our total insurance premium for the quarter was at ₹7,030 Cr, up 37% YoY led by growth in new health. With this, the total insurance premium for the year was

37%

ast quarter and the year FY24-25. Our total insurance premium for the quarter was at ₹7,030 Cr, up 37% YoY led by growth in new health. With this, the total insurance premium for the year was ₹23,486

₹23,486

, up 37% YoY led by growth in new health. With this, the total insurance premium for the year was ₹23,486 Cr, with a growth of 45% in the new core online insurance premium and 48% in the new health and lif

45%

n new health. With this, the total insurance premium for the year was ₹23,486 Cr, with a growth of 45% in the new core online insurance premium and 48% in the new health and life insurance premium. I j

48%

ium for the year was ₹23,486 Cr, with a growth of 45% in the new core online insurance premium and 48% in the new health and life insurance premium. I just wanted to make a little comment here, as I lo

₹619

a little comment here, as I look at our insurance revenue over the last 5 years - in 2021 we were ₹619 Cr; in 2022 we were ₹984 Cr, and I won't go through the whole list but we are now at ₹2,573 Cr and

₹984

I look at our insurance revenue over the last 5 years - in 2021 we were ₹619 Cr; in 2022 we were ₹984 Cr, and I won't go through the whole list but we are now at ₹2,573 Cr and if I do the CAGR for 5 ye

₹2,573

we were ₹619 Cr; in 2022 we were ₹984 Cr, and I won't go through the whole list but we are now at ₹2,573 Cr and if I do the CAGR for 5 years and talking about just the core insurance premium, our CAGR for

43%

o the CAGR for 5 years and talking about just the core insurance premium, our CAGR for 5 years is 43%. The new insurance core premium for the quarter is up 21% YoY, and we don't feel very happy about

21%

surance premium, our CAGR for 5 years is 43%. The new insurance core premium for the quarter is up 21% YoY, and we don't feel very happy about that. However, if you exclude savings, now for the last 9

30%

We have seen other parts of our business-like motor, two-wheeler and travel returning to the above 30% growth which it wasn't for some time. We continue to improve our customer onboarding and claim sup

“Will be great to have some light on that as well?”

“Lastly, just on the expense structures, if you can just spell out how the expenses have been bifurcated, the employee, advertising and the other expenses between direct & indirect and existing & new initiatives, for sort of our modelling purpose going forward.”

“Some of our own renewal claims ratios will also start to move upwards because we were not able to put as much effort in that, and we will be getting in the same range, or maybe just lower, a tad lower than other channels, because we are putting in that effort.”

“I know it's a difficult question to answer but if you were to talk about sort of growth going into FY26 and FY27, maybe in the near term; then how should we sort of think about that, any changes over there?”

“Management: See if I look at our last five years now, as I said, our core business has been growing at a CAGR of 43%, which is ahead of my expectations honestly.”

“If you've asked me in FY21, I thought we would be here maybe 6 months to 12 months later, because I always think the revenue CAGR should be about 30% or so and that's what we've always thought.”

“From a long-term perspective, we believe 30% is the right CAGR for us to sort of plan for.”

“In fact, I feel confident this will be so for the year, or for a large part of the year at least.”

“One, in the answer to your previous participants question, you mentioned that savings is challenged but if you can give us some colour on the savings contribution either to premium or top line, how should one think of it for FY25, or Q4 that would give us some colour on the trajectory that we should kind of forecast or think of going into the next year.”

“So that opportunity exists, and I think PB Money will be the backbone to use the data to advise customers on how to manage money better, and that should be a rapid area of growth for us this year.”

Sachin Dixit

3

Sanketh Godha

3

Neeraj Toshniwal

2

Madhukar Ladha

1

Shreya Shivani

1

Srinath v

1

Sachin Dixit

in the presentation that renewal is 85% contribution margin. This quarter, we noticed you have changed the language to being 80%+ contribution margin. Any particular reason for that? Management: Look, there is a science to it and of course, there's a lot of allocation of costs. I'll explain what that means. Initially what we were looking at was the cost of doing the renewal in terms of payment gateway costs, our calling costs in creating that sales. Because if you look at our cost base, there is marketing cost, there is sales cost, there is a call centre cost, and the sales cost has got a loading of management, etc. However, there are costs beyond that. There's customer service cost, there is claims management cost, and we've been investing in those very heavily over the last 2-3 years. Now there is no difference between the claims cost on a fresh business and renewals business, and if you actually get smart about it, the claims support come more in the renewals business than in the fr

Sachin Dixit

Great year, and all the best. Thanks for the responses. Management: Thank you Sachin. We'll take the next question from Madhukar Ladha from Nuvama. Madhukar, please unmute yourself.

Madhukar Ladha

Hi, good morning. A couple of questions from my side. We're seeing a lot of changes in the health segment with IRDAI saying 1/n; the whole method of reporting and there's a lot of pressure and talks on deferring commission pay-outs for long term health. I wanted to understand from your viewpoint, how has that played out in those negotiations with insurance companies. Second, given the pressure, I'm hearing that there is probably going to be some reduction on renewal commissions as well. Some comment even on that, if there are any talks going on, and if we felt anything on that side. Lastly, just on the expense structures, if you can just spell out how the expenses have been bifurcated, the employee, advertising and the other expenses between direct & indirect and existing & new initiatives, for sort of our modelling purpose going forward. These would be my questions. Thanks. Management: Thank you very much for that question. First of all, we should not miss the wood for the trees. Heal

Shreya Shivani

Got it. Thank you so much. This is very useful, and all the best. Management: Thank you, Shreya. We'll take the next question from Manas Agrawal, Bernstein. Manas, please unmute yourself. Manas Agrawal: Hi Yashish, thanks for the candid answers. I actually wanted to ask two things on a medium term/long term strategy perspective. One is, you're talking about propping up savings in various ways. One clear way to do it is par and non-par where you don't operate, and a large market in terms of TAM, so any thoughts on that? The second is slightly more philosophical - on AI. It can affect both customer servicing and customer acquisition. Acquisition side, we've seen Google say search is changing; SEO will change as a function of that. How you guys are thinking about it? On the servicing side we've started seeing some start-ups operate collections for banks using voice bots, replacing call centre operations. So is that a threat or is that an opportunity. Wanted thoughts on that. Management: I

Neeraj Toshniwal

My question is on the contribution margin. The expansion in contribution margin is quite decent. So, wanted to understand, has there been any reduction in incentive pay for the POSP Agents in this quarter, which has helped increase in contribution margin. That is first question. Second question is on the cost. Employee cost that has gone down, so is the advertisement; while other expenses have increased significantly, if you can throw some light over there that will be helpful. Management: Sarbvir can answer more specifically, I would just say, please don't look at anything QoQ, because we should just look at it on a 12-month rolling basis, that will give you a much better picture. Otherwise sometimes you will see the impact of incentives from other places, etc. playing up and that's what I always said. Management: Neeraj, I explained in the beginning of the call that we have been growing our call centre capacity or our sales capacity over the year and in Q4 we kept that flat. That is

Sanketh Godha

Okay, got it. And one data keeping question. On the credit side, if you can break up that ₹7,652 Cr, and ₹20,460 odd Cr into new initiative disbursements, and the core that would be useful. And lastly, if you can spell out the adjusted EBITDA margin for the credit business in the quarter. Management: See on the new initiatives, I think it was a scale up of the last 5 months for the year. Roughly new initiatives contributed to 40% and the core is 60% for the year. For the quarter, it will be roughly 70:30. I think new initiatives is largely pass-through kind of business from a revenue perspective. So that is why you would see that though year on year the disbursals went up by about 38%, the revenue shrunk by about 14%. And you know that's what it is. Management: Just to be clear, our new initiatives in Paisabazaar is at a very, very early stage right now, and it is largely lumpy. In a sense, what I said right now - easy POSP, hard POSP. Right now, it is the easy POSP. We want to be clea