Max Financial Services (NSE:MFSL) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Max Financial Services Limited Q1 FY 'twenty seven 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. Please note that this conference is being recorded. I now hand the conference over to Mr. Nishant Kumar, Chief Financial Officer of Max Financial Services Limited for opening remarks. Thank you and over to you sir. Thank you. Good evening everyone and thank you for joining Max Financial Services earning call for the quarter ended 06/30/2026.

0:48 Our quarter one FY 'twenty seven results have been released and are available on our website as well as on the stock changes. Joining me today are Mr. Sumit Madan, Managing Director and CEO and Mr. Amrit Singh, Chief Financial Officer of Hacksmith Max Life. With that, let me hand over the call to Sumit to take you through our performance and key developments during the first quarter of FY 'twenty seven. Yes. Thank you, Nishant, and good evening, everyone. As you are aware, quarter one was marked by geopolitical uncertainties and a very volatile macro environment that weighed on the market sentiment. Despite these challenges, the Indian economy remained resilient, supported by some very strong domestic fundamentals. Against this backdrop, we stayed focused on execution, continue to advance our strategic priorities and maintain disciplined risk and capital management.

1:38 To begin with, we achieved a key milestone during the quarter with the completion of Access Bank's acquisition of an additional 0.98% stake in Access Max Life Insurance through an equity infusion of INR $3.81 crores, increasing its shareholding to 19.99%. The infusion enhanced our financial strength, raising our solvency ratio to a robust 198%, while further underscoring the commitment of our promoters and their confidence in our strategy, execution capabilities and long term value creation potential. With that context, let me take you through the performance highlights across our strategic focus areas during the quarter. Following a very successful FY 2026, we have started FY 2027 on a strong note, carrying forward our growth momentum and delivering a healthy performance in the first quarter.

2:30 Our focus remains on building a sustainable and profitable franchise while creating long term value for all stakeholders, including customers, employees, distribution partners and shareholders. In quarter one FY 'twenty seven, our individual adjusted first year premium grew by 17%, outperforming both the private sector and the overall industry growth. More importantly, our growth remains consistent and sustainable with a two year CAGR of 20%, which is well ahead of the private industry CAGR of 12% and double the overall industry growth rate of 10%. Our APE grew by 15% during the quarter, supported by balanced contributions from both proprietary and the partnership channel growing at 1516% respectively.

3:20 Our Proprietary channels continue to be a key engine of growth, delivering a strong three year APE CAGR of 26%, while Offline Proprietary sales recorded 9% growth in quarter one. Our online business continued to lead the market with a 27 APE growth. Within partnerships, APE growth of 16% was driven by 14% growth from Axis Bank and 21% growth from other partners, again underscoring the breadth and the resilience of our distribution franchise. We also continue to make some very strong progress in the Group Credit Life segment, delivering a 57% growth in Q1 FY 'twenty seven. It's also noteworthy that 45% of our GCL business has been sourced from partners we added in the last three years, diversifying our presence in this segment.

4:12 In addition, we have onboarded several meaningful credit life partnerships during the quarter, which are expected to further strengthen growth momentum in the coming quarters. We also continue to expand our addressable market through some very targeted strategic initiatives. During the quarter, we launched our USD denominated offering of Smart Gift Plan, enhancing our ability to serve the growing NRI customer segment. Further, we launched Auras, our exclusive proposition for high net worth individuals designed to deliver a differentiated experience and tailored wealth and protection solutions for this very critical segment of customer. At Axis Max Life, innovation remains a core strategic lever, enabling us to address evolving customer needs while driving the long term value creation for all our stakeholders.

5:01 Our focus continues to be on building a balanced and diversified portfolio mix that supports sustainable growth, improves the product mix and enhances the margin. Q1 FY twenty twenty seven largely reflected a normalization of growth across traditional savings products while maintaining the product mix trends seen over the previous recent quarter. Participating products continued to witness strong traction, growing 48% and contributing 15% of the overall APE. The non pass segment saw a relatively lower contribution compared to the same period last year, reflecting a higher base effect. Despite volatile market conditions, our ULEB business grew 19% supported by the launch of Smart Gifts plan. Prediction remains one of our key strategic priorities.

5:49 During the quarter, we further strengthened our proposition for the self employed customer segment. And as a result, our Protection and Health business grew 44%, led by 57% growth in riders, reflecting increasing customer demand for comprehensive protection solutions. Retirement Solutions continue to represent a significant long term opportunity. Our annuities business delivered an exceptional 116% growth during the quarter. We further expanded our retirement portfolio with the launch of Smart Ride, a variable annuity product that combines guaranteed lifelong income with participation in long term equity market performance, offering customers an attractive balance between security and growth. The strong growth in our protection and annuity business coupled with favorable yield curve resulted in a meaningful improvement in profitability.

6:41 Consequently, our VNB margin expanded from 20.3% in Q1 of FY 'twenty six to 23.2% in Q1 FY 'twenty seven, driving a robust 33% growth in the value of new business or VNB. This reflects the success of our strategy to build a higher quality, more profitable and a sustainable business. Needless to add, at Axis Max Life, customer trust or the Barossa remains the foundation of our franchise, and we are proud to see this reflected across key customer centric metrics. In FY 'twenty six, we achieved our highest ever individual debt claims paid ratio of 99.8%, reaffirming our unwavering commitment to standing by our customers and their families when they truly need us the most. Further strengthening this trust, our InstaClaim service now settles 67 of eligible claims within one single day, delivering a faster and more seamless claims experience.

7:43 We were also recognized as the number one life insurer in customer experience in India in Hansa Research syndicated life insurance Q's 2026 study, improving from the second position held over the previous three years with a customer experience score of 61. These milestones underscore the confidence customers place in the AXIS MaxLife brand and our ability to consistently deliver on that promise. Our thirteen month premium persistency stood at 83%. Additionally, longer tenure persistency metrics, including 30, forty ninth month and sixty one month persistency, continued to improve on both premium and number of policy basis, reflecting the growing quality and durability of our business.

8:29 Customer advocacy also remains strong. Our overall Net Promoter Score increased from 63. Our Net Promoter Score increased to 63 from a baseline of 60 at FY 'twenty five exit. Touchpoint NPS improved by two points to 65, while relationship NPS again increased meaningfully to 61 from 57, all reflecting the strength of our customer engagement initiatives and some very strong service proposition. AccessMaxLive digital technology and AI strategy is transforming the company into a platform led intelligence driven insurer. At the core of this strategy is pervasive intelligence with AI, Gen AI and analytics embedded across customer journeys, distribution, underwriting servicing and employee productivity, all supported by some very agile technology platforms and a modern data foundation.

9:21 In digital commerce and acquisition, we continue to strengthen our D2C franchise through superior proposition discovery, AI led marketing and lead nurturing and optimized onboarding journey. Our digitally empowered distribution platform, mSpace as we call it, equips advisors with recruitment intelligence, personalized engagement, next best action recommendation and performance nudges. The ecosystem now supports 36,000 monthly active users with over 90% adoption, helping us drive improved productivity and sales effectiveness. Through our customer app, customers benefit from AI enabled self-service, wellness offerings, personalized engagement and digital servicing. We have also simplified claims experience across website and customer app to improve customer ease and accessibility.

10:13 With over 10 lakh installs and four lakh monthly active users, the platform is emerging as a key engagement channel across the customer life cycle. AI and analytics are increasingly becoming the operating backbone of Active Max Light. We now have 30 plus AIML models in production across recruitment, sales, underwriting, servicing and cross selling. AI based digital prospecting generated 38,000 recruitment leads. Our AI sales co pilot has supported 27,000 plus sales interactions, recommendation engines have shifted 50% of course to higher value variance and voice analytics has assessed two lakh plus customer interaction. In servicing, the Gen AI e mail bot has resolved 40,000 queries while AI driven cross sell initiatives have delivered INR 58 crores of new business, demonstrating Access MagSafe dot ai's growing contribution to growth, productivity and customer experience.

11:13 To summarize, I would like to highlight we've had a strong start to the year with solid performance across all the key metrics. While global geopolitical developments continue to shape the market dynamics, we remain confident in our ability to deliver on our guidance of outperforming the industry and drive sustained value for all stakeholders. With that, I will now hand over to Amrit, who will provide an update on our financial performance. Thank you, Sumit, and good evening, everyone. Very quickly, some housekeeping numbers. At MFSL level, the revenue excluding investment income grew by 18% to 7,289 and the consolidated profit after that at MFSL stood at INR 180. The gross written premium for Axis Max Life has grown by 19% to INR 7,607 crore, in which renewal premium has registered a healthy growth of 20% and is hedged INR 4,639 crore, which reflects the resilience of our inflows.

12:13 Individual new business, some assured, which is a measure of protection penetration that we're trying to drive within the country has grown by 32 year on year and has touched INR 117,000 crore of common access max type percentage. We continue to hold on to our rank three on individual sum business assured in the private test. Our embedded value end of the quarter stood at INR 30,415 crores, a growth of 15% year on year. The annualized operating ROEV has improved to 14.9% in quarter one FY 'twenty seven. There has been no operating variance during the quarter, and this compares 14.9% compares to 14.3 of the previous year corresponding period. We continue to have remained focused on operational efficiency.

13:01 Policyholder operating expense as a percentage of GWP has improved by 185 basis points year on year to about 16%, driven by focused productivity enhancement initiatives. Despite a healthy business growth, policyholder operating expense increased by only 7% during the quarter. AUM has crossed a significant milestone for the company, surpassing INR 2 lakh crore and closed at INR 203,000 crore at the end of June thirty, twenty twenty two quarter, reflecting an 11 decrease. As Sumit mentioned, BNB margin have improved from 20.1% in quarter one FY 'twenty six to 23.2% in quarter one FY 'twenty seven, resulting a growth of 33% in VNB despite the GST impact.

13:46 As you are aware, on a VNB computation basis, we use the actual expense of the quarter to compute the VNB, and we do have an effect where the VNB improves along as operating leverage kicks in during the quarter. This improvement in VNB is driven largely by a higher production mix and also supported by favorable yield curve movement, which helped offset the GST impact that had come. Appropriately outcomes achieved during the quarter reinforce our confidence in sustaining our E and O, E and margin profile through FY 'twenty seven. Going forward, we remain focused on delivering the ND growth at our base AP growth while maintaining discipline execution and profitability. And with that, we'll request the moderator to open the question.

14:34 Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on your touch tone phone. If you wish to remove yourself from the question queue, you may press star and then 2. Participants are requested to use handsets while asking a question. Your Your first question comes from the line of Swarnabh Mukherjee with three sixty one Capital. Congrats on a great set of numbers. So my two questions. So first of all, just wanted to understand like the margin increase that has happened.

15:27 This has, as you mentioned, only on the back of the production mix improvement? Or anything else to also call out in that, for example, if you could give some color on what would be the impact residual impact, if any, of the GST? And how we should think about it? And also, I wanted to understand that solvency, despite this protection growth has remained flat. So how should we look at it? So if you could explain this, that is the first question. Second is, sir, on overall the structure simplification process, fundraise, etcetera. So Axis Bank had also commented in their call about a potential about looking at a potential staking increase, evaluating that and plus your fund raise plans and structures inclusion, how should we think about all these things given the new development?

16:24 These will be my two questions, sir. Okay. So firstly, on the margin profile, as I said in the remarks that it's to do with the protection enabled growth that we have experienced and also the yield curve benefits that have come through. Now in this 3% approximate increase, you can say 30% is linked to mix around protection and some bit of operating lifting. And around 70%, you can say, is the yield curve, which actually has also helped offset the GST impact. As we had mentioned in the previous call that in quarter four, we had almost taken care of 80% of the GST effect.

17:16 Now that's largely behind us. So from a GST perspective, there isn't any other effect. On the second one around solvency, you would have and Sumit mentioned in his opening remarks that Axis Bank infused around INR $3.80 crores during the quarter, which actually helped us lift the solvency profile of the business. And that's why the solvency at the end of June has come at 198%. Now our solvency is, as you are aware, the regulatory threshold of the solvency is 150. 198% is fairly well above the regulatory minima and also above our internal thresholds that we drive from a risk neutral perspective.

18:06 The approval of the enabling approval of QIP at MFSL was taken as an enabling approval and which is valid until May of next year. And that was largely to support the growth requirements of the company. As at this point in time, we don't see any specific need. I mean, I think, all in position is healthy. We will keep evaluating and you'll accordingly be informed around the remaining future plan. With respect to your question around structure simplification, the final after the insurance act amendment, which happened in December, we're grateful for the regulator to have brought in now detailed regulations around how the structure simplification can be undertaken.

18:57 We are obviously, are technical elements, which require an internal consultation on those with our shareholders. We are in that process. As we had indicated always in the past that we are quite keen in making that happen. I think the good news is that now all parts are paid for this. We will come back to you at appropriate time on our next steps on structure simplification. With respect to the Axis comment, I think there's an as Axis indicated, there's an opportunity which the banking regulations queue up. And you will recall that Max is always was keen on taking stake up to 30%. They are also in their internal process of doing the pros and cons around it. And depending upon how they kind of be, I think both them and us will make adequate disclosures around this.

19:56 That's very helpful. Just one follow-up that any I mean, should we at this point of time think the timelines that what we had we were previously indicated in terms of the simplification process would still hold? Sir, we had already indicated that the moment we file a scheme document, given it's an NCLT process, can take anywhere between six to twelve months. Those time lines hold. I think you should wait for us to indicate after we have done our due consultations internally around a specific year of the time. All right, sir. Thank you. This is very helpful. Thank you and all the best for FY 2027.

20:43 Thank you. Your next question comes from the line of Supratim with Jefferies. Please go ahead. Thanks a lot for the opportunity. My first question is on the cost savings bit. So if I look at the OpEx to GWP ratio that has improved despite the ITC loss. Just wanted to understand that if you could give us some color here, what's driving this? And where are you getting the efficiencies from? Moving to my second question, the off line this quarter, We have been seeing the growth slowdown here over the last two quarters, so just wanted to understand. Sorry. So nothing, sir. We are losing your audio.

21:34 Better now? Yes, sir. It... The audio is betting... Getting chipped in between. We are able to hear you clearly, but it was getting cut. Yeah. Is this better now? Yes, sir. This is much better. Yeah. Sure. I'll just repeat my last question. So on the offline proprietary channel, the 9% growth, the growth slowed down last quarter as well. Sorry, sir. Even right now, the audio got chipped at the end. Yeah. It's it's largely related to the offline channel performance. If you could provide some color there. And on persistency, just wanted to understand what is the pace of the three month persistency drop?

22:20 Okay. I think you asked three questions because we couldn't hear at this side of the line. The first question is you're asking what is driving this improvement obviously GWP. The second question you've asked us, off line proprietary at 9%, anything structural, I guess, your question there. And the third one you've asked us on persistency, if I could capture it, like the reason for the drop in. I think on the first one, we have been on this journey of actually enhancing productivity across our distribution channel. And as you would know, in the last few years, we have been investing heavily on distribution channel. And whenever you invest, there is a period of maturity of the distribution channel where the productivity through coal plant comes.

23:11 To sum it up, overall productivity enhancement that we have experienced on the distribution side is one element. On the nondistribution element, I think when GST came in, impacted us, we collectively as a team started taking many cost initiatives and those can range from simple negotiations to travel related restrictions to being far more careful on advertisement and marketing spend. And those are a mix of reasons why the overall number looks lower. However, I must say that as an organization, we are committed to continuously keep expanding our distribution footprint. Some bit of this will normalize. You should not take this fact that this growth lower growth of OpEx for the quarter to continue in the subsequent quarters as well. There will be some normalization, but definitely, we are looking forward to improving the job between sales growth and operating expense as we get kind of profit.

24:15 On off line proprietary, to be very honest, I mean, it's a small quarter, and there were certain one offs related to certain specific very consciously thought through cancellation that we had to undertake, which actually impacted the number. Had those cancellations not come through, the offline proprietary growth would have been robust. On persistency, persistency, we had explained earlier as well. I think there is there was a specific variant of a product, which actually post its introduction has not panned out to the way that we wanted it to pan out, which started creating certain impact on our persistency numbers. The decision to discontinue that variant was taken in the month of March itself on a very sales every month, but despite it being a sales every month, the decision was taken.

25:06 But some bit of that pain is what is being felt in the persistency. But beyond the thirteen months, you can notice that around 37 after sixty first month, there is an improvement in persistency that has gone. That's very helpful. Just one last thing. I did not get the cancellation bit. So the cancellation was related to agent licenses being discontinued or the policies? There are certain policies that were sourced actually. So didn't feel that those were the commodity prices. We this was a voluntary decision. Because it's a small quarter, some of this kind of comes through in a number. If you remove it, the growth is actually Understood. No, that's very clear. Thank you. Thank you. Your next question comes from the line of Shreya Shivani with Nomura. Please go ahead.

25:56 Yes. Hi. Thank you for the opportunity. Congratulations on a very good quarter. My question is broadly around our distribution strategy, not so much to do with this quarter alone, but how are we thinking about diversifying within our online proprietary, specifically not being dependent on one web web aggregator too much, etcetera. And my sec... Second strategy that I want to ask my question around is you reached a certain size. So from here on for your growth to be at a certain level or for you to expand, you will want to move beyond metro and tier one and tier two cities. How are we planning out the distribution strategy for those markets? I think thank you for the question. We already are making investments as far as Tier two, Tier three markets are concerned across all our channels.

26:49 So we've seen some very good response coming to our products who are brand in some of the smaller markets in the country. So those efforts will continue to happen. On the specific diversification on the online prop that you spoke about devoid of a large aggregator, actually only almost 45% of the sales in quarter one was outside this large aggregator. This number was 38% in the last year quarter one. So this number has clearly grown. Other than the large aggregator, we made some great inroads as per all the other aggregators are concerned. One of the channels which you must note we are exceptionally proud of is the entire D2C engine that we've built. And that's been giving us some very good traffic. The profile of customers coming on to that channel again is very good. The quality of business flows from that channel again is very good. So I think on the online propriety, we are not now dependent only on one large aggregator. It's a number which is well spread across.

27:42 I also feel we've developed a bit of a moat around it. So whichever new aggregator is coming in, their first port of call is to AMLI. That is with courtesy, all the engines we've been able to build, all the integration that we've done across, which is now helping us improve our penetration in all the new aggregators who are also joining the industry. Right. Thank you for that answer. Just a follow-up. So your... First on the tier two, three markets that you mentioned about you're making an investment, that's primarily agents. Right? Or is there any other... Your new partnerships that you mentioned on the group credit life, are those also a part of those investments? And my second follow-up is on the D2C engine. If you can help us understand, I'm assuming that the majority of customers this D2C platform is pulling is from the urban markets.

28:28 Would that be fair to say? Surprisingly, no. In fact, if you look at our online sales, it has a very healthy contribution of customers coming in from tier two, tier three market. It also coincides with the first question that you asked with respect to tier two, tier three and are these only the agents? Answer is actually across, not only agents, but when you look at the banking channel, when you look at the e com channel, there is a very healthy mix of customers actually coming from Tier two, Tier three locations. So I think the concept of some of these customers coming only from urban centers, I think across industries that trend is changing at a very fast pace, and we are no exception. Yes. That's very useful. Thank you so much and all the best. Thank you. The next question comes from the line of Nishant with Kotak. Please go ahead.

29:18 Thanks for taking my question and congrats for a great set of numbers. On the looks of it, it is now very clear that you know, any kind of a capital issuance is off the cards right now. You know, by just looking at the current solvency numbers, you know, I was just curious how long can you... I'm sure Access Bank is having its own discussion in terms of, you know, increasing, you know, further stake in the company, etcetera. But how long can you really wait? Or probably couple of months down the line, you might have to still consider, you know, alternate capital issuance, you know, option. So how long can you really wait for this? Look, I think there is an internal risk threshold that we run.

30:05 And you are also aware that the accounting standard 117 will be in effect now after because we have sort of forbearance on the same will be in effect what are the first difference between them. The regulator is also keen at the same time along with this accounting standard to think about the RBC framework as well, which has a potential to create buffers and releases from a growth capital perspective that sector can get given the efficiency of which RBC will deliver. So it's important to keep some of these elements in mind as well how things kind of progress. And I think next few months and quarters, we'll get more clarity around timelines around all those things. So from a long term perspective, I think that's a very important watch out area.

30:54 But if your specific question is that the 198% that we are sitting at, can we continue running it for more how many more quarters before reaching our internal threshold. I think what you should also understand is that along with that equity raise that access rate in the company, it also provides us additional debt capacity on that money as well. So we will leverage that as well. And I think we can stay above the risk threshold for at least two to three quarters quite comfortable as we see it. Got it. That's helpful. And just another one was on the profile of your annuity and non par business.

31:44 Does the increase in I'm just curious in terms of how the margins would strike up in these two products? And does the swing between nonpart to anything is it in any form margin dilutive? It's I mean, giving not giving a specific number around these because we don't disclose margins at the product segment level. But as a whole, the margin profiles are similar ratio. It's not as if there is a drag getting created of one cannibalizing it to another. They are very similar issue. Obviously, annuity has different flavors and forms, but it will be some of those elements in play. I mean, the individual annuity will behave differently than a two party team and so forth.

32:31 But at aggregate level, the margin are quite competitive. And And then sir, just one last one is that can we read that lower growth in proprietary off line kind of also becomes a little margin accretive? I think we have in the past in conversation mediated that the margin profile of our proprietary channel is actually now healthy. It is higher than the margin profile of the company at the margin. In that sense, slower growth does not mean that it will be kind of adding to the margin, actually that could be an incorrect Got it. Thank you very much and all the best.

33:25 Thank you. The next question comes from the line of Abhinash with MK. Please go ahead. Yes, thanks. Good evening. Great set of numbers. So a couple of questions. The first one on the trend we are seeing so far in terms of the par and non par. Is it going to kind of continue for the rest of the year, or would we see kind of a... Will we see some reversal here? And second, if you can sort of provide some kind of a, you know, color or understanding on your variable annuity product, what kind of a risk that is paid with you and what kind of a hedging mechanism you are using to hedge those risks? I mean, some bit of a clarity there. Thanks, Aniraji.

34:19 I think on participating and nonparticipating from a trend perspective, you should understand that from a product construct, both these product constructs try to solve fairly similar ish consumer needs as well. I mean, over another has higher guaranteed component than the other one doesn't have equivalent guaranteed component, even part has a guaranteed component. So it's from a consumer perspective, these are stories, and these are what you bring to the market from a freshness perspective, how many launches that you do. So it will be, I think, between quarters, etcetera, depending upon what launches we are doing because any new launch always refreshes the distribution machinery. So we will navigate through some of these things.

35:06 We do hope to get the trend even on a non par to at least no longer being such sharp day growth, it should move towards more in the positive and the green as the quarter is going to progress. One reason for that also is a base effect because non par in the last year, same time was higher for us. And as the quarter is going to progress, that will moderate. But more importantly, I think the segments of choices, protection, annuity is there. We continue to remain focused and we're keen that those trends hold and we are able to tap on to that opportunity that India presents with those products. On your second question was on variable annuity product that we have launched.

35:55 That product actually has two components. It there is an element of fixed return. And on top of those fixed returns, there is an element of ability of the annuity to participate in the equity upside in the equity story that the country has to present. Now on the fixed portion of the return, needless to say, there is a hedging strategy that is in play as it follows in other products. On the variable component of the equity side, it's a bit of a participation behavior with IGNIS. The product obviously has been launched with fair bit of deliberation. So in our assessment, it does not bring on any additional risk on to the company because of this particular feature because that is participated by the.

36:46 Okay, clear. Thank you. Thank you. Your next question comes from the line of Prajsh Jain with Motilal Oswal Financial Services Limited. Please go ahead. Yes, hi. My first question is on, there's been so much discussion on the commission regulations, right? And more of a product, which I understand things can really be, you know, very different or whatever. There is out in the media. Can you be different on that or in line with that? But just wanted to understand. I think there are two partners which would be key ones for us where things can be a different one is the the parent bank, Access Bank, as well as the other big web aggregator that we work with. Now, you know, in case of an... In case there is a commission, you know, how how does... Generally, would you expect the behavior of these channels to to change? Or how do you think this this could kind of pan out for us in the in the medium term?

37:55 That's that's question number one. Second is, you know, access has seen some pickup in momentum in the in the the near... In the in the quarter as well as... So how do you see access bank as a channel growing? You know, especially there's a earlier question about Tier two, Tier three growth. That also can we see some Access Bank playing a meaningful role in that segment growth? Those would be my question. I think firstly, on commission regulation, as the regulator had spoken on multiple quorums, they are proposing to bring a draft, and they want to follow a consultative process in the entire industry.

38:47 At a macro level, very frankly, anything the way we see it is that anything which is good for the consumer is good for the entire ecosystem. And we will welcome those regulations, and it is a great initiative by the regulators and they will want to follow a very long term consultative process here, but at least is what we are picking up on the media news aspect as well. So rather than getting a specific into what does it mean to one channel or over another channel, And each of these channels actually are at different efficiency levels for us. And also the nature of the relationship that we have with some of these channels are different factors as a promoter of the company. Hence, rather than giving you any specific response on an unknown thing of what the specific change is, it is better that we wait for some of these draft regulation that is being spoken of as and when they come. But at a macro level, we'll just reiterate that I think whatever is good from a consumer's perspective will always be good for the industry as well, and we are a firm believer in that.

39:57 And we'll work and we'll navigate through some of these things. This is not the first time such things are done quickly. On Axis Bank, I'll request Sumit. Yes, sure. I think on Axis Bank, we've been having some consistently good growth now and this quarter has been no exception. Before I answer your specific question around Tier two, Tier three, also important to highlight and we've discussed this in the previous investor call as well that we've kind of fragmented the bank as a whole. We look at Bharat Banking as a separate segment. We look at emerging channel as a separate segment. We look at branch banking as a separate channel. And recently, the focus has also come around the asset vertical where we are increasing the retail insurance penetration. All that focus that we've been speaking about on the earlier investor calls also, I think everything is coming together now reasonably, in fact, I would say very well. And that's the reason why you see growth coming from the emerging channels and the overdependence on let's say a channel like a branch banking drastically going down. The emerging OA share alone, if you look at in the emerging channel has been at almost 75%.

40:59 If you look at the overall growth as far as quarter one is concerned and we look at affluent channels separately, we look at HNI channels separately, there's been some very healthy growth coming across these channels as well. If you look at RS Banking and Access Bank's presence, if you look at the overall number, 65% of the customers for us at a company level are actually from Tier two, Tier three market. So that gives a bit of a flip to our overall numbers. Have almost around 2,736 Russo branches, which again have added to the pace of growth across Access Bank. Like I mentioned, the Bharat Banking at Axis Bank has also been coming very handy with respect to all the growth. The overall reach for Axis Bank alone is almost at some 3,200 cities with some six ninety two branches.

41:46 We also have the privilege of partnering with some very specific banks, which have improved our presence in these smaller cities and the hinterland of the country. You have a capital small finance bank, which is there in the hinterland of Punjab. You have certain other banks down south, which are catering to our masses in the Tier two, Tier three market. So in those states, I think overall, we are very conscious of the growth that the country is seeing in some of the smaller markets. We are well equipped with our presence, with our technology, with our people to extract the maximum pace out of the advantage, out of the opportunity which exists in these markets. Just one question or one more question. If you could give your guidance on the renminbi margins. Last year, we gave that guidance, and we are pretty much there.

42:35 How should we think about VNB margins for this full year? I think rather than calling it guidance from an aspiration perspective, we have been saying we will want to grow make the V and D grow faster than the AP growth, and we leave it at that, which actually does mean that there would be a constant margin improvement. The year has started to a great start. So let's keep we'll keep our focus on that. We do intend to grow P and B at a faster clip than the NAV goes on. Thank you so much. Thank you. The next question comes from the line of Saman Singh with PhillipCapital. Please go ahead. Yes. Hi. Thanks for taking my questions and good set of users. Congrats for that.

43:22 So just on our APE growing by 48% in the quarter. So wanted to understand what is the, like, PPT profile of that growth. The reason is, like, under Regulation A, first year regular premiums with the PPT of less than ten years, it carries, like, 80% of allowable AUM versus 17.5% for renewal and close to 5% for single premiums. So is the power push... Way of way of expanding your allowable ceiling? Kaman, sorry, can you hear us? Sorry, we are not able to hear you properly. Could you please repeat the question, please, because we were not able to properly comprehend what you were asking? Okay. So did you hear any part of it? Okay. I'll start. May I request you to kindly repeat from the very beginning, please, if you don't mind? Sure. Sure. Sure. Yeah.

44:14 So I'm saying part AP growth was very strong in this quarter, 48% Y o Y. So I just wanted to understand the PPT, premium payment profile of that growth. Because in that regulation eight, if we see the first year regular premiums with a PPT of less than ten years, it's like that is 80% of allowable AUM versus 17.5% on renewal and 5% on single premium. So is this far push a way of expanding your allowable ceiling? And the second component of the same question is, what were your power fund utilization for FY 'twenty six, if you can provide that number? So that is question one. Second question is on the amalgamation.

45:03 So the share entitlement ratio will be struck on a look through economics or with reference to MFSL's stated price? And does the resulting tax table change any shareholders' classification or trigger a fresh regulatory approvals? Yes. So these are the questions. I'm sorry. The last question, we couldn't follow, but I think the first question we understood because your voice is very, very muffled. So I... Maybe maybe my connection because I... Even I'm not able to hear you back. But, anyways, let's continue. Yeah. Please answer the first one. So let let us answer the first question. Yeah. I think as if given our scale, etcetera, expenses or management limits that we operate well within those measures. So that is not the reason why a specific action is taken around anything around participating products, which is what I heard you speak and feel.

46:05 With respect to your question around where is is there any specific trend of PPT within the power of products, nothing like that. It's very secular. It is the business as usual from that perspective across channels depending upon the mix that they are used to. Think that's the kind of growth that we have. The other question, I couldn't understand. Okay. So let me try for the second question. So on the amalgamation of MFSL into MLI, so this is like share entitlement ratio will be stuck on a look through economics or with reference to MFSL's stated price. Are you able to follow me? I think it's a little bit premature to when the scheme of arrangement comes through, obviously, you'll see the specifics and details around it. But having said, you will appreciate that MFSL is a fairly simple structure from a very light operation.

47:05 And largely, the asset that they hold is an equity into the life insurance company, AccessMax Life. So the cooperation, etcetera, fairly will be simple. And if I may use your word, look through kind of values. There isn't like a big adjustment that needs to be done. Okay. And then just a follow-up, small thing. So the capital requirement to FY 'twenty eight, is it fully covered to the INR 1,600 crore QIP? Or it might have been answered earlier, but sorry for that, asking a bit. So what we were trying to explain was that firstly, it's an enabling approval, which goes up to May of next year from a capital perspective and we had while we had taken that approval and the shareholder consent of the same, we had indicated that it is largely to support the growth capital requirements of Access Max Financial.

47:58 Now what we are also seeing is that the developments that are happening around the new accounting standard adoption by the regulator, also the risk based solvency framework, there seems to be progress being made quite strongly in both those assumptions. So we would want to see the outcomes of what the final risk based solvency framework kind of comes through. At a macro level, such a framework does make the insurance company more capital efficient and provides more buffer for growth capital perspective. But it's a little difficult to comment specifically around some of those things given that element is not my point. But I think the regulatory intention is to make more capital efficiency within the sector, thereby providing adequate capital for single growth asset ratio.

48:52 What is your internal solvency sort of bank? We use as methodology, there is a every year depending upon the kind of risk that we have on our balance sheet, we run a certain risk threshold scenario. That number was anywhere between plusminus 180%, 2%. Yes. Thanks for that and all the best. Sorry for the disturbance in time. Thank you. Your next question comes from Sanket Goetha with Aventus Park. Please go ahead. Yeah. Thank you. Thank you for the opportunity. So my my question, again, probably is more on solvency and access then. So so is it fair to say that if access approval of going from 20 to 30 gets delayed, you know, this $60,100 crores of QIP what you are...

49:54 What what you have could could kept it on a brand right now, you you you might do it eventually to support the growth. That's a fair assumption to make? Look, if RBC doesn't come on time, as we had indicated in the past as well, then our assumption is correct. But if there is a development which happens on that framework, maybe the number will hit or not. Understood. And one more clarification, this 198 solvency, what you have reported in the end of the June, includes the subject that you are redeeming. So if you remove that number, I'm believing that you are raising one more round of update to compensate for that coupon rate. Then solvency will be closer to 200,000,000 with the additional debt what you will raise?

50:50 Sorry, can you say that again, Sankit? Sir, what I was asking is that you are redeeming your sub debt around INR $4.80 crores, $4.90 crores as per the result. Will you be raising another round of subject? Because what you reported at June end includes that subject now, given the subject will go away to solvency, it will naturally fall. You are raising another round of subject to boost it up back to 190,200 level? Your observation is correct. We have actually already honored the call on this update. This was done on July 31. And we will recoup and re raise both that amount and also the amount that we got from additional capacity of taxes infusion that happened in the first quarter.

51:38 So yes, we will be doing you. Your next question comes from the line of Vinod Rajamani with Nirmal Bank. Please go ahead. So thank you for taking my question. I had just one question. So to an earlier question, you had responded saying that almost 70% of the margin uplift is on account of yields and 30% is on account of the product mix change. So just wanted to know now in Q so if I look at the yield curve for the of the June curve, so the Q2 VNB will be priced off the June curve. So that's already almost like 50 bps lower at the long end than the March curve.

52:26 So should we expect some bit of unwind on account of this yield change in, say, the Q2 margin? That's the only question I have. Look, dynamic pricing of products depending upon yield curve is a natural process that the life insurance company will follow. Your observation is correct. You are saying that at the end of the June, the curve has moved, which could take away some of some not the entire, but some benefits that were available in the first quarter from a negative perspective. But it's a part of course for insurance company depending on environment, etcetera, you continue doing repricing. But from the aspiration perspective, we hold steady to some of those things that we expect the V and D growth momentum to be faster than the AP growth momentum as we improve the year. And we are working towards some of those aspects.

53:23 Right. But that 70 and seventy-thirty split, that is correct. That's right, right? Yes. There is look, there is a reality of as the quarter kind of progresses, the operating leverage plays out. And typically, if you have a good Hindu start from a mix perspective, the operating leverage payout is also superior. So I mean, doing that, I think you're trying to do that math of 70% will go away and consequently, there could be pressure. I mean, I will not go in that direction because operating leverage in the quarter also helps. Yes. Thanks so much. Thank you. You. Your next question comes from the line of Mitesh Jain with Investec.

54:09 Please go ahead. My question is on annuity. What is driving such strong growth in annuity business? Is it driven by the new product launch that we have done? And is there a do you sense customer behavior change because annuity traditionally has not been large product in India? So is it changing and what is driving that? So we had a few launches of annuity in quarter three last year. And annuity, that particular product that we launched came into the base, which was accepted, very well accepted across distribution channels given the unique retirement need and annuity product also. Some bit of this superlative growth that you are seeing is also coming out of a bit of a low base effect of quarter one. Having said, in the current quarter, we have also launched new variable annuity products, which was asked at the start of the call by someone, which will also give us a positive lift. So it's a combination of product launches on the annuity space, which is actually helping us drive that momentum.

55:20 But yes, I mean, quarter one, the 120% growth numbers have some bit of a pace of success there. Any particular channel which is driving this growth? No, it's a fairly accepted product, yes. Across all channels, access and agency both obviously are leading the way. There are these specific customer segmentation around the silver segment, as we call it, where annuity is becoming quite popular. And I think the team has been able to sell the product well. Also, it coincides with our overall growth across all channels, including the proprietary business. Important to mention that because strategically all channels remain the key in terms of growth. There was a question earlier around propriety also and important to say that some of the input parameters on propriety, which is the offline proprietary still remains strong. And annuity, of course, forms a key part of that bucket as well. If you look at the last thirty six months or so, we've had a very consistent growth as far as offline proprietary channels are concerned.

56:18 And we not only look at the output or the final number as far as offline prop is concerned, but we also follow the input vectors very seriously. If you look at the adviser recruitment, we've actually grown on that parameter. Top adviser premium, again, which is a very critical component of the offline proprietary channel, we've seen a growth of 28%. FLS productivity, and Amrit mentioned about some of the initiatives we've taken around AI and tech. Again, we've seen a 7% growth as far as FLS productivity on the offline proprietary channel is concerned. So I think importantly, whenever we launch a new product, Amit just mentioned about the variable annuity, I think the engine is right now well equipped across all channels, be it access, agency or bank proprietorship as a whole to be able to capture the most out of it. And again, in annuity, it looks like a very sustainable, scalable growth for us.

57:09 Thank you. Your next question comes from the line of Rishi Junjanwala with IIFL. Please go ahead. Yes. Thanks for the opportunity. Can you please give some color on how the competition is faring, especially on the banker channels, access as well as some of the other larger, you know, banker channels, has the couple of unlisted, you know, players become a lot more aggressive in those channels if that is driven by higher payouts or more lucrative product offerings? And how do you intend to counter that? I mean, very difficult to comment on what some of the other players are doing. I can largely talk about some of the strengths that we have and how very I would say in a very consistent manner, we've been at the numero uno position at some of the banks. Our counter share at access always covers around 65% to 70%.

58:11 In Yes Bank, again, we are the number one player. What gives us all the more confidence is the separate vertical we have called strategic alliances where we get into new partnerships. Just as a case in point, across the seven last banks that we acquired, and you will appreciate just the acquisition or signing of the agreement with the bank is only a starting point. It's far more difficult to become a dominant player in any of the newer banks. At least from that perspective, Access Max Life Insurance has done very well. In the last seven banks that we've gotten into a partnership where we've been not being the first, second or the third player, we've in fact been the fourth, fifth or the sixth player. Across these seven banks, we already have a counter share of 25 plus. Four out of these seven banks, we are actually now the number one player. So I think the important point is across all the banks, our story has been very consistent with respect to the growth. In terms of what the competition is doing, I mean, the market is always competitive. It keeps us on our toes. It keeps us demanding more out of one another. But I think we are little ahead as far as some of those discussions across people in technology, product.

59:19 I was just, Sumit, trying to understand if if any of the players are becoming increasingly irrational, you know, in in open architecture banks as well. Thank you. We like the term irrational. We've heard it a few times. All that we can say is you can count of... Count on us as far as the borrower size concerned. We'll never go that route. I would not be it won't be wise or prudent on my part to comment on what some of the other players are doing in the market. Got it. Thank you. All the best. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you. Thank you, ladies and gentlemen, for being on Max Financial's earning call. We look forward to more such interactions in the future.

1:00:05 Thank you once again. Goodbye. Thank you. Ladies and gentlemen, on behalf of Max Financial Services Limited, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines. Thank you.