POLICYBZR — earnings call
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Prepared remarks
– PAISABAZAAR · MR. MANDEEP MEHTA – GROUP CHIEF FINANCIAL
MR. MANDEEP MEHTA – GROUP CHIEF FINANCIAL
OFFICER – PB FINTECH · Management
MS. RASLEEN KAUR – HEAD, CORPORATE STRATEGY & INVESTOR RELATIONS – PB FINTECH PB Fintech May 22, 2023
Moderator · Conference Operator
Ladies and gentlemen, good day, and welcome to the PB Fintech Earnings Call for quarter 4 Financial Year 2022-'23.
We have with us Mr. Yashish Dahiya, Chairman; Mr. Alok Bansal, Executive Vice Chairman; Mr. Sarbvir Singh, Joint CEO; Mr. Naveen Kukreja, CEO, Paisabazaar; Mr. Mandeep Mehta, Group CFO; Ms. Rasleen Kaur, Head, Corporate Strategy & Investor Relations.
As a reminder all participant lines will be in the listen-only mode and anyone who wishes to ask a question may enter star and one on their touchtone phone.
To remove yourself from the queue please enter star and two.
Should you need assistance during the conference call, please signal and operator by pressing star then zero on your touchtone phone.
Please note that this conference is being recorded.
I now hand the conference over to Mr. Yashish Dahiya.
Thank you, and over to you, sir.
Yashish Dahiya
Thank you very much.
Without further ado, we are laying out our performance results for the quarter and year-ended March 31, 2023, which was the last year.
Our revenue grew to ₹2,558 crores, marking growth of 80% over FY'22.
Our Q4 revenue is ₹869 crores, which is 61% Y-o-Y growth.
And our PAT loss reduced from ₹220 crores in the previous year same quarter to ₹9 crores this year.
That's a margin of about minus 1%.
It was minus 41% last year.
On an adjusted EBITDA basis, we were ₹28 crores positive for Q4, which is a 3% margin.
This last year was minus ₹80 crores, which was minus 15% margin.
And both the growth of the core business as well as new initiative loss reduction have contributed to this.
Our existing business adjusted EBITDA increased by ₹54 crores for the quarter and ₹218 crores for the year as compared to the same period last year.
If you recollect, we had spoken about ₹150 crores to ₹200 crores every year kind of increment, so that's ₹218 crores in the last year.
This growth is driven by primarily 3 things, 1. renewal income which is the most robust part of the growth, obviously, because that's sort of done because of our past effort, not for this year's effort, 2. growth of new business and 3. higher efficiencies in new business.
So our annual run rate on the renewal income is now ₹388 crores, which was ₹265 crores last year in the same quarter, this typically operates at about 85% margin and is a significant source of profit growth.
We are now at an annual run rate of about ₹14,000 crores insurance premium.
The operating metric we look at is the premium per inquiry which is now at ₹1,754 which is our highest ever, it is 27% higher than last year.
However, I have to add here that while this is for the full quarter, March has some contribution too because March was an exceptional month from a savings business perspective where certain tax advantages led to higher sales of the savings products than usual.
Our CSAT continues to stay at 88%.
Our existing business did ₹504 crores for Q4 and out of this credit linked revenue was ₹120 crores.
The credit business continues to grow quite decently and has been EBITDA positive now since December 2022.
We are now at a run rate of about ₹15,000 crores disbursal and more than 0.5 million credit card issuances on an annualized basis.
PB Fintech May 22, 2023 Approximately 35 million customers have accessed the credit score platform.
In the credit cards, key theme and lending, key theme is digitization, today 75% of the cards being issued are end-to-end digital.
While this may not seem like a lot but in the past this was not the case.
They were much, much lower.
Until a few years ago, end-to-end digital was almost negligible.
Co-created product strategy is shaping up well with now 6 products we have which are on co- created platform.
Our new initiative revenue has obviously grown quite well that is ₹365 crores in Q4 and the adjusted EBITDA loss on new initiatives is ₹36 crores, again moving from a margin of minus 51% to a margin of minus 1% given where we are right now.
This explains that why we have grown, our losses have come down, so if you recollect our new initiative losses have peaked at ₹90 crores, they are down to ₹36 crores now.
PB Partners, our agency aggregator platform, continues to lead the market in scale and efficiency of operations, has the highest portion of non-motor business, now 34% and is presently in 15,000 pin codes in India.
Our UAE business has grown 2.7x, so new initiatives continue to do well, continue to scale well.
We are fairly hopeful of having a positive PAT in our current year, which is 2023-'24.
And happy to take questions now.
Madhukar Ladha: · For all of life or this is life and general put together?
Understood.
Got it.
And second, I wanted to ask a question on PB Partners.
So now this is the first quarter where we'll see some renewal revenue, correct me if I'm wrong, in PB Partners.
I want to understand what will be the economics on the renewal business in PB Partners.
So the take rates would be equivalent on the renewal business as they would be on the new business on the PB Partners side?
Understood.
Understood.
And I haven't gotten a chance to obviously take a look at your presentation because things were delayed and it's just now -- just come right while the call is on.
What was the growth in new business for term and health?
Have you called that out?
For all of life or this is life and general put together?
That's term and health, right, then 31%?
Even savings.
Okay.
Understood.
Yes.
Understood.
All right.
That's it from my side.
I'll come back in the queue as I go through the presentation.
Moderator · Conference Operator
Thank you.
The next question is from the line of Arjun Vikas from Alpha Wave Global.
Please
Arjun Vikas
Congratulation on great set of numbers.
Just quick questions.
Again, I didn't have a chance to go through the presentation, but I wanted to check if we call out any revenue or growth split on the Paisabazaar side between credit cards and personal loans and other products?
Moderator · Conference Operator
Thank you.
The next question is from the line of Sachin Dixit from JM Financial.
Please go ahead.
Sachin Dixit
Congrats on a great result.
Quickly on the piece on how the savings piece would have benefited in March quarter, right?
So, currently, already sitting 2 months in Q1. Do you see that sort of reversing and on a like-to-like basis there might be a drop in numbers on the premium issued?
Moderator · Conference Operator
Thank you.
The next question is from the line of Nidhesh from Investec.
Please go ahead.
Nidhesh
So firstly, can you talk about -- you mentioned that there are better efficiencies on the new business than our online business.
So can you quantify that how the contribution margin or EBITDA margin in the new business panning out on the insurance side?
Moderator · Conference Operator
Thank you.
The next question is from the line of Arya Sen from Franklin Templeton.
Please go ahead.
Arya Sen
I just wanted to reconfirm that the estimate you gave of additional revenue because of the closing of savings product is ₹50 crores.
Moderator · Conference Operator
The next question is from the line of Amit Jeswani from Stallion Asset.
PB Fintech May 22, 2023
Amit Jeswani
I was just trying to figure out -- so one thing is very clear, that ₹50 crores is the premium, right?
I will just repeat this again. ₹50 crores is just the premium, right.
Moderator · Conference Operator
The next question is from the line of Samyak Shah from Dinero Wealth.
Samyak Shah
Yes.
So sir, could you please talk about the online marketing and consulting business.
So I wanted to understand how the fees are charged in this business?
And how should we look at the revenue growth three years from -- for the next three years?
Moderator · Conference Operator
The next question is from the line of Sachin Dixit from JM Financial.
Sachin Dixit
Quickly any update on Bima Sugam, like, its been a while that nothing has come out from media or anything?
Moderator · Conference Operator
The next question is from the line of Nischint Chawathe from Kotak Institutional Equities.
Nischint Chawathe On similar lines, you have been sharing the renewal premium figure as well, if you could share that for the fourth quarter?
The next question is from the line of Adarsh Sinha from CLSA.
Adarsh
Alok, so the question was on your core business.
The last two years have been tough on the industry protection volumes.
So just wanted to understand your assessment of where we stand in terms of what part of the protection market we are in because hopefully, things recover now, but we've kind of done well in the last 2 tough years in protection.
And the second question is our savings business has scaled up a lot.
If you can give some color or texture on where we are in terms of premiums and broad numbers and what would be the product mix ULIPS non-par is, guaranteed product.
Any sense and color on that.
Thanks.
Moderator · Conference Operator
Ladies and gentlemen, we'll take the last question from the line of Madhukar Ladha from Nuvama.
Madhukar Ladha: · For all of life or this is life and general put together?
Just some data keeping questions.
You mentioned as an answer to my first question that there is a 31% growth in new business streaming.
I just wanted to clarify, this is on the platform business, right?
Core platform business, right.
Second, can you give me the core business renewal premium for the full year FY '23?
Got it.
Okay.
And look, did you give out some of the corporate premium for Q4 of the revenue?
Premium.
Okay.
Got it.
And finally, just wanted to get a sense of the changed commission norms.
Do we expect higher commission payouts for you guys?
Are we seeing any change from the manufacturers in terms of some people getting more aggressive.
Some color on that will be helpful.
Moderator · Conference Operator
Thank you.
Ladies and gentlemen, that was the last question for today.
I would now like to hand the conference over to Mr. Yashish Dahiya for closing comments.
Yashish Dahiya
Thank you very much for attending this call and taking -- giving us opportunity to answer all those questions.
And apologies once again for being slightly late and for ending this call a little later than you may have planned.
Thank you so much.
Bye now.
PB Fintech May 22, 2023
Moderator · Conference Operator
Thank you.
Ladies and gentlemen, on behalf of PB Fintech, that concludes this conference call.
Thank you for joining us, and you may now disconnect your lines.
Questions and answers
Moderator · Conference Operator
The first question is from the line of Madhukar Ladha from Nuvama.
Please go ahead.
Madhukar Ladha: · For all of life or this is life and general put together?
Sir, I wanted to get a sense of March, as you said, was an exceptional month.
Maybe you could give us some color on what -- how much you would quantify as additional insurance sales in the month of March.
And also, my sense is that there could also be some prebuying given the tax incentive expire.
So although the ticket sizes would not have been more than ₹5 lakhs even in the lower ticket size we could have seen some prebuying.
So maybe you could help us understand what you're seeing out there?