Ladies and gentlemen, good day and welcome to the Q4 FY 2025 earnings conference call of Aditya Birla Capital Limited. 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. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this call is being recorded. I now hand the conference over to Ms. Vishakha Mulye, MD and CEO, Aditya Birla Capital. Thank you, and over to you.
Good evening, everyone, and welcome to the earnings call of Aditya Birla Capital for Q4 of FY 2025. Joining me today are senior members of my team, Bala, Rakesh, Pankaj, Kamlesh, Mayank, Pinky, Vijay, Ramesh, and me. I will cover our strategy, financial and business performance, and Vijay will cover key financial and business highlights, followed by a discussion on performance of our key businesses by our business CEOs. The economic environment remains volatile due to recent tariff measures and geopolitical tensions in the region, which pose uncertainty for growth. During this turbulence, bond yields have softened, and crude oil prices have fallen. CPI inflation has cooled significantly, and RBI has reduced repo rate by 50 basis points, along with a change in the stance from neutral to accommodative, and has also taken various measures to improve system liquidity and stimulate growth.
At Aditya Birla Capital, we continue to focus on driving quality and profitable growth by leveraging data, digital, and technology. We follow a customer-centric approach to build deep understanding of the needs of our customers and provide them simple and holistic financial solutions in a seamless way. Prudent risk management practices form the bedrock of our approach, which has enabled us to protect capital and deliver risk-calibrated and sustainable returns across our businesses. We also continue to strengthen our omnichannel-based distribution network. Before we talk about financial performance, I'm pleased to announce that we have successfully completed the amalgamation of Aditya Birla Finance with Aditya Birla Capital, following all requisite approvals. The appointed date for amalgamation is April 1, 2024, and the effective date is April 1, 2025. Aditya Birla Capital now has two business segments.
First, the NBFC lending business, and second, the investment business, through which it will continue to hold investment in all its subsidiaries and associate businesses. This marks a significant step in our transformative growth journey, increasing our strength and agility as a unified, larger operating entity. With a simplified corporate structure, we now have better access to capital to drive operational synergies, long-term growth, and enhanced value creation for all our stakeholders. Coming to the financial and business performance. One, growth and profitability. During Q4 of FY 2025, the consolidated profit after tax, excluding one-off items, grew by 24% sequentially and 6% year-on-year to INR 865 crore, and the total consolidated revenue grew by 29% sequentially and 13% year-on-year to INR 14,138 crore. For FY 2025, the consolidated profit after tax, excluding one-off items, grew by 8% year-on-year to INR 3,142 crore, and consolidated revenue grew by 20% to INR 47,369 crore.
In our NBFC business, the disbursement increased by 28% sequentially to INR 19,523 crore in Q4 of FY 2025. The NBFC portfolio grew by 20% year-on-year and 6% sequentially to about INR 1.26 trillion. The secured business loans to SMEs grew by 28% year-on-year and 7% sequentially. The corporate and mid-market portfolio grew by 27% year-on-year and 6% sequentially. The unsecured business loans to SMEs grew by 10% year-on-year and 8% sequentially. We have highlighted in our previous quarter's earnings call that given the early warning signals and challenges in the operating and macro environment, we have calibrated our sourcing from certain digital partners and reduced our exposure to smaller ticket-sized personal, consumer, and unsecured MSME loans. This approach has held us in good stead.
Our portfolio quality continues to remain robust, with credit costs improving by 22 basis points year-on-year and 15 basis points sequentially to 1.21% in Q4 of FY 2025. Gross stage two and three loans declined by 71 basis points year-on-year and 47 basis points sequentially to 3.78% as of March end. Our gross stage three PCR was 44% at a similar level compared to the previous quarter. We now believe that the operating environment has stabilized. In the personal loans and unsecured MSME segment, we are focusing on strengthening our internal sourcing channels and acquiring customers through our branches, ABCD app, and ABG ecosystem. Our ABCD app continues to scale up well and contribute about 5% of the personal loans disbursement in March. We have seen the disbursement in the personal and consumer segment grow by 4% sequentially to more than INR 3,000 crore in Q4 of FY 2025.
Further, we are also looking at collaborating with few marquee digital platforms. In these arrangements, while the sourcing will be done by the partners, the underwriting, fulfillment, and collections lie with us. We have also strengthened our retail and SME products, underwriting, sales, and distribution teams. We believe that these actions will help us to grow our personal and unsecured SME loans and gradually increase the mix going forward. The profit after tax of NBFC segment grew by 11% year-on-year and 9% sequentially to INR 652 crore in Q4 FY 2025. The ROA of the NBFC segment increased by 15 basis points sequentially to 2.25% in the current quarter. For FY 2025, ROA of the NBFC business was 2.27%. Going forward, we remain confident of growing the overall portfolio by CAGR of 25% over the next three years.
Further, we expect the ROA to expand gradually, mainly driven by expansions in margins, improvement in productivity, and change in the product mix. Coming to our HFC business, we have created a full-stack franchise focused on both prime and affordable segments. In Q4 FY 2025, we continue to deliver on the strong growth momentum and gain market share as seen in the previous quarter. I'm delighted to share that we have crossed the monthly disbursement rate of INR 2,200 crore in March. This has resulted in our HFC AUM growing by 69% year-on-year to more than INR 31,000 crore. The credit quality in HFC portfolio is among the best in class, with stage three loans declining by 33 basis points sequentially to 0.66%. We have made significant investments in distribution, data, digital, and emerging technologies to sustain the growth momentum in the future.
The ROA of HFC business was 1.46%, and the ROE was 11.03% in FY 2025. Going forward, we expect the current growth momentum to continue and gain market share. As the portfolio scales up further, we expect the operating leverage to kick in and ROA to improve significantly. Our aim is to achieve an ROA of 2%-2.2% in the next 8-10 quarters. Moving on to asset management business, our mutual fund average AUM grew by 15% year-on-year to about INR 3.81 trillion in Q4 of FY 2025. We have seen a positive momentum in sales driven by improved investment performance and strong engagement of our sales teams. This has resulted in our market share improving by 6 basis points sequentially to 5.66% in the current quarter. We added about 2.7 million portfolios during the year, and our total investor portfolios crossed 1 crore as of March end.
Our monthly SIP flows grew by 5% year-on-year in March to INR 1,316 crore, and we added more than 5.4 lakhs SIP accounts in the current quarter. The profit after tax grew by 19% year-on-year to INR 931 crore in FY 2025. Moving on to our insurance businesses, the growth in the life insurance business continues to remain strong. We are the fastest-growing player with an individual cost-share premium growth of 34% year-on-year in FY 2025. Growth was strong across banker and proprietary channels. We continue to be in the top quartile in the industry in terms of 13 and 61st months' purchase density. Post-applicability of new surrender guidelines from October, we have taken steps to realign our commission structure, make changes in product pricing, and increase rider attachments to mitigate the impacts of the new surrender guidelines.
We're happy to share that these changes, along with the high quality of business, have helped us to achieve a healthy VNB margin of 18% in FY 2025. In absolute terms, VNB grew by 17% year-on-year to INR 818 crore in FY 2025. Going forward, we are confident to grow the individual FYP by CAGR of 20%-25% over the next three years and expand the EMG margin to more than 18%. In the health insurance business, we continue to be the fastest-growing standalone health insurer. Our gross retained premium grew by 33% year-on-year in FY 2025, driven by our differentiated health cost model and data-enabled approach towards customer acquisition. Excluding the impact of multi-year guidelines, the growth in GWP was 42%. Our market share among SAHI has increased by about 140 basis points year-on-year to 12.6% in FY 2025.
Our combined ratio improved from 110% in FY 2024 to 105% in FY 2025, and I'm delighted to share that we have achieved a break-even for the first time in FY 2025. For the change in the regulatory guidelines, we were on track to achieve a combined ratio of 100% in FY 2026. However, our endeavor still remains to achieve a combined ratio of 100% at the earliest. Going forward, we will continue to grow our business driven by our differentiated health cost model and gain market share. Two, omnichannel architecture for distribution. Our omnichannel architecture allows customers to choose the channel of their choice and interact with us seamlessly across digital platforms, branches, and DRMs, fostering engagement and loyalty. Our D2C platform, ABCD, went live about a year ago.
It offers a comprehensive portfolio of more than 25 products and services, such as payments, loans, insurance, investments, and helps the customer to fulfill their financial need. ABCD has witnessed a robust response with about 5.5 million customer acquisitions till date. Our comprehensive B2B platform for MSMEs ecosystem, Udyog Plus, continues to scale up quite well with 2.3 million registrations. It has reached an AUM of more than INR 3,500 crore in less than two years of its launch. Udyog Plus now contributes about 21% of the disbursement in the unsecured business loan. ABG ecosystem now contributes about 50% of the disbursement on Udyog Plus. We had around 1,623 branches across all businesses as of March end. We are focused on capturing white spaces and driving the penetration into tier three and tier four towns and new customer segments.
About 60% of our branches are located across more than one [ABC 250] location. Going forward, we will continue with our approach of driving quality and profitable growth. Now, I request Vijay to briefly cover the financial performance of our key subsidiaries for the quarter. Over to you, Vijay.
Thank you, Vishakha, and good evening, everyone. Vishakha covered the consolidated highlights, and I'll cover the standalone financials of ABC and the key business highlights of each one of our businesses. During Q4 of FY 2025, the standalone profit after tax of the merged entity, excluding one-off items, grew by 6% year-on-year to INR 654 crore. For FY 2025, the standalone profit after tax, excluding one-off items, grew by 15% year-on-year to INR 2,714 crore. The tier one CRAR ratio of the merged entity is 15.93%, and total CRAR ratio is 18.22%.
Standalone return on equity adjusted for investments in subsidiaries and associates, and excluding one-off items, is 14.2% in Q4 FY 2025. In our NBFC business, the portfolio grew by 20% year-on-year and 6% sequentially to about INR 1.26 trillion. NIM, including fee income, expanded by 7 basis points sequentially to 6.07% for the quarter. The credit quality of the NBFC business segment continues to be healthy, with a credit cost of 1.21% in Q4. Our housing finance business continues to see strong momentum. The loan portfolio grew by 69% year-on-year to INR 31,053 crore. During Q4 FY 2025, we further infused equity capital amounting to INR 300 crore in our HFC subsidiaries, taking the cumulative infusion during the year to INR 1,200 crore. This infusion was done to support the growth momentum and maximize our share of opportunities, which Vishakha mentioned earlier.
Coming to our AMC business, the average AUM increased by 15% year-on-year to INR 3.8 trillion in the current quarter, of which equity AUM was approximately 44%. Alternate AUM grew by 70% year-on-year to more than INR 23,900 crore in Q4 FY 2025. In the life insurance business, our first-year premium increased by 34% year-on-year, and group new business premium grew by 23% year-on-year. The embedded value increased by 20% to INR 13,812 crore , and the return on embedded value was 19.2% in FY 2025. In our health insurance business, our unique and differentiated health first model helped us to deliver a growth of 33% year-on-year in gross written premium during FY 2025. Excluding the impact of multi-year guidelines, the growth in GWP was 42%. Now, I hand over to Rakesh to cover the NBFC business performance in detail. Over to you, Rakesh.
Thanks, Vijay, and good evening, everyone. The NBFC business grew by 6% quarter-on -quarter, taking the AUM to INR 1,26,351 crore in quarter four. Profit delivery was strong, registering a 9% sequential growth in quarterly PAT. Over the last three years, we have doubled on both AUM and profit growth, which translates to a 30% three-year compounded annual growth. This consistent and sustainable track record has been achieved by building a granular retail and MSME portfolio with strong customer focus and a disciplined approach towards improving asset quality. We aspire to be a top lender of choice for MSMEs. The AUM for business loans to MSMEs grew by 25% year-on-year, which is substantially higher than the industry growth rate for the year. This growth has come largely through scale-up direct sourcing channels through our branches and building scalable digital sourcing platforms.
The MSME segment comprised 56% of our overall AUM as of March 25. We registered our highest-ever disbursement of INR 19,523 crore in quarter four. 49% of this was contributed by business loans to MSMEs, and 87% of this disbursement to MSMEs was secured in nature. We have continued to scale up sourcing through direct and digital channels, which now contribute 39% and 58% of unsecured and secured business loan disbursements, respectively. Udyog Plus, our B2B platform, which was launched two years back, has scaled up and contributes to nearly 30% of the unsecured business loan segment AUM. With over 2.3 million MSMEs registered and a comprehensive product offering available on the platform, Udyog Plus will be a significant sourcing engine for the MSME segment going forward.
In the personal and consumer loan segment, FY 2025 was a year when we exercised caution by tightening our sourcing from high-risk segments. Post all calibrations undertaken, this segment has now stabilized at an AUM of INR 15,532 crore and is poised to grow year-on. In fact, if we look at our disbursement in this segment in quarter four, we registered a 26% year-on-year growth with the share of direct sourcing improving progressively. As Vishakha mentioned earlier, the ABCD app contributed nearly 5% of the overall sourcing in the personal and consumer segment in March 2025. Our focus will be to improve this share progressively.
Further, we are exploring new partnerships with marquee digital platforms, where we will continue to have end-to-end control from underwriting to collections, ensuring complete customer ownership. Thus, with multiple growth levers in place, I'm confident that the personal and consumer loan segment will start registering calibrated growth going forward. In FY 2025, we were agile in responding to changing credit environments and leveraged the opportunity to scale up our secured business across segments. As a result, the overall secured AUM mix at the entity level has improved from 72% last year to 74% this year. The MSME segment contributes significantly towards the secured portfolio mix, where 83% of the overall MSME AUM was contributed by secured business loans, where the asset quality continues to be robust and among the best in the industry.
We continue to operate at a very efficient cost-income ratio of 30.8%. Our OpEx to AUM ratio improved from 2.26% last year to 1.92% in quarter four. This has largely been driven by operating leverage as we continue to spread new branches open in the last 12- 18 months. Our continued endeavor is to improve our asset quality, reflecting the sequential and yearly reduction in GS2 and GS3 by 47 basis points quarter on quarter and 71 basis points year-on-year, respectively. The gross stage three loans are at 2.24%, which has declined 27 basis points year-on-year. As a result of our continued calibration in sourcing and improvement in asset quality, the credit cost has reduced by 15 basis points quarter on quarter to 1.21%.
The credit cost for the year was at 1.31%, which is 19 basis points lower than the FY 2025 number, and is well within our stated guidance of 1.5%. As I mentioned earlier, 74% of our loan book is secured. Our stage three book is well provided with a PCR of 45%. In quarter four, we delivered our highest-ever profit after tax of INR 652 crore, registering a growth of 9% quarter on quarter. Full-year PAC grew by 13% year-on-year and stood at INR 2,501 crore. The ROA for the quarter was at 2.25%, which improved by 15 basis points sequentially. Moving forward, we expect all business segments to grow in FY 2026, with share of retail and MSME segments to improve.
We will continue to leverage our proprietary digital platform, which is ABCD App and Udyog Plus platform, and invest in branches to further improve share of direct sourcing. We expect operating leverage to play out from our investment in emerging locations. As we scale up, strengthen our capabilities, and invest in technology, our primary commitment remains to deliver sustainable returns in the upcoming quarter. With that, I will now hand over to Pankaj Gadgil to take us through the housing finance business.
Thank you, Rakesh, and good evening, everyone. I'm happy to share that we have continued to make consistent progress across all key aspects of book growth, asset quality, and profitability for 11 consecutive quarters now. Fiscal year 2025 has been a landmark year for us, underscoring the strength and momentum of our growth journey. We've crossed a significant milestone, achieving an AUM of over INR 30,000 crore. Asset quality has consistently improved over the last 10 quarters in a row. We have further strengthened our balance sheet by diversifying our liabilities, and business orientation from within the ABG ecosystem has remained steady, contributing to 12% of our retail disbursement. Key highlights for fiscal year 2025 are as follows: disbursements for the full year stood at INR 17,648 crore, an increase of 109% YOY. Q4 disbursements record highest-ever quarterly disbursements of INR 5,820 crore, growing 98% YOY and 23% QOQ.
AUM as of 31 March 2025 stood at INR 31,053 crore, reflecting a strong 69% YOY and 16% QOQ growth. We achieved a highest-ever PBT of INR 419 crore, marking an 11% increase YOY. Stage two and three assets reduced to 1.39%, an improvement of 1 percentage point YOY and 38 basis points QOQ. ROA is at 1.46% and ROE at 11.03% for FY 2025. This performance is underpinned by a strong foundation of governance, digital capabilities, data intelligence, and technology. I would now like to provide some brief updates on a few pillars of our growth. First, on portfolio quality. As noted earlier, gross NPA has improved both in absolute terms and as a percentage now at 0.66%, our lowest level since 2018. This reflects a reduction of 116 basis points YOY and 33 basis points QOQ.
The improvement in asset quality has enabled us to comfortably maintain a stage three feature at 55%, and additionally, over 95% of our collections are now conducted via our [fin collect] platform, supported by a robust collection propensity model. Secondly, moving to distribution, growth has been balanced across both prime and affordable segments, and we are now present in 18 states with 1.5 branches. The average retail ticket size stands at INR 29 lakh, highlighting the granularity of our portfolio. Our active customer base reached approximately 91,200 as of March 2025, representing a 40% YOY increase. Next, focusing on digital reinvention, data, and analytics, we've achieved 100% adoption of our digital platforms and analytic models. This has led to a significant reduction in turnaround times across the customer lifecycle.
At the same time, we've seen a strong improvement in our net promoter score, which was at 79. We have deployed Copilot, leveraging GenAI capabilities to enrich the experience for both our customers and channel partners. These tools help with sales pitches, real-time credit and technical support, and query resolution, all in a more seamless and efficient way. As seen over the last 11 quarters, we have delivered consistent growth across segments alongside continued improvements in portfolio quality and customer advocacy. Our focus remains on the centering of key areas from business expansion, digital reinvention, to asset quality and customer experience, all while enhancing profitability in FY 2026. Thank you for your attention. I now hand over to Bala, MD and CEO of our asset management company.
Thank you, Pankaj, and good evening, everyone. I would like to share the highlights of Aditya AMC's performance as we present the AMC on this call. At Aditya AMC , our overall assets under management on average basis, including alternate assets, stood at INR 4.03 lakh crore, reflecting a 17% year-on-year growth. Our mutual fund quarterly average AUM reached INR 3.8 lakh crore, growing 15% year-on-year. The quarterly equity average assets under management stood at INR 1.69 lakh crore, growing 11% year-on-year. Our SIP book for March 2025 stood at INR 1,316 crore, and we added about 514,000 new SIPs in Q4 FY 2025. Our total investors' folio count crossed 10 million to touch 10.3 million by adding about 2.7 million new folios in the current year.
I'm pleased to share that we have observed positive momentum in sales, driven by improved investment performance and strong on-ground engagement from our sales team. This also resulted in a quarter-on-quarter increase in our average AUM market share. Alternate business plans have continued to enhance our PMS and AIF offering across both equity and trading companies, to better serve the evolving needs of the HMIs and family offices. Following the recent ESIC mandate from Government of India, we commented on the management update portfolio, and if the AUM stood at INR 7,462 crore on average basis for the March ending 2025. Consequently, our PMS and AIF assets witnessed year-on-year growth up to 68%, rising from INR 3,075 crore to INR 11,330 crore. Our offshore assets grew by 14% from INR 10,548 crore to INR 12,070 crore.
At the Gipshati platform, we successfully completed the final closure of the ABSL Global Emerging Market Equity Fund under the LRS scheme, with an average AUM of $65 million, and fundraising is currently underway for other offshore funds which are launched under the ABCD platform. Our passive business has grown, with the total assets now reaching approximately INR 3,700 crore. We are also proud to serve an expanding customer base while surpassing 1.16 million folios. Our diverse product suite, consisting of 23 distinct offerings, is strategically crafted to cater to the full spectrum of investment needs, ensuring we provide a tailor-made solution for every investor using the passive investor. Moving on to the financials for the quarter, for FY 2025, we achieved a profit after tax of INR 931 crore, reflecting 19% year-on-year growth.
Operating revenue is at INR 1,663 crore for the full year, 28% year-on-year, and total revenue for the full year is INR 1,983 crore, which is including other income by 21%. The operating profit before tax was at INR 941 crore, up 31% year-on-year, and profit before tax was INR 1,248 crore, up 23% year-on-year. For Q4 FY 2025, our operating revenue was at INR 429 crore, up 17% year-on-year, and revenue was INR 101 crore, up 14% year-on-year. Our operating profit before tax for the quarter was INR 233 crore, up 21% year-on-year, and profit before tax was INR 305 crore, up 14% year-on-year. We're also pleased to announce the board had proposed a dividend of INR 24 per share for the full year, adding in 13% last year, which is reflecting INR 13 per share, which is reflecting about 70% of the overall standalone profit after tax.
With this, I'll hand it over to Kamlesh Rao, MD and CEO of Aditya Birla Sun Life Insurance.
Thank you, Bala, and good evening to all of you. Quick highlights of the life insurance business. The overall life insurance industry saw balanced growth in financial year 2025. The individual first-year premium grew for the overall industry by 10% and for the private players by 15%. ABSLI for the individual life insurance business grew at 34%, contributed by growth across its proprietary and partnership channels. Along with this, we also expanded our market share by 68% last year. Proprietary channels of agency and direct combined grew at 33% in financial year 2025, driven by better productivity as well as by capacity added last year. The partnership business grew at 34% with robust growth across all our existing partners, as well as the new partnerships in Bank of Maharashtra, IDFC Bank, and Axis Bank, where we managed respectable mind share in our first full year of operation.
We now have 11 bank partnerships, a reasonable mix of large private sector banks as well as regional private sector banks and two PSU banks. We added three banks last year and are happy to share that we have recently entered into a new partnership with Equitas Small Finance Bank in financial year 2025, which will begin business in Q1 of this year. During the year, we opened 60 new branches and invested capacity in new tiers to fuel our growth. In the next year, we intend to capitalize on this and grow largely on the back of enhanced productivity. The year also saw a healthy growth of 24% in the number of new policies sold. In the product mix of the individual business, traditional and term business contributed 65%, and ULIP was 35%.
We are seeing a healthy growth in the annuity segment, with 7% of our business now coming from this growing segment. We launched four new products in the individual life insurance business and also launched a new product on our group platform, a specialized term plan for employees of our group term clients. The new products launched contributed to 12% of the individual business we did last year. In the group life insurance segment, the private industry grew by 5%, the overall industry by 1%, and ABSLI registered a growth of 23% and resulted in our market share expanding by 112 basis points. Better growth was contributed by superior performance, both in the fund as well as our credit life business.
Our captive business attachments have grown significantly during the year. Our group AUM has now crossed INR 26,000 crore as of March 25, with 15% growth and contributes to 27% of the overall ABSLI AUM. Our total premium for the year crossed INR 20,000 crore at INR 20,639 crore, registering a growth rate of 20% over last year, with a two-year carrier of 17%. This growth came from new business as well as our renewal premium growing at 14%. Our digital collections now account for 81% of our individual renewal premium. We continue to work on customer lifetime value, which is reflected in our upselling, which reached 28% and enhanced productivity growth in both our proprietary and partnership channels. Our quality parameters have improved. Our 13-month persistency is at 88% and 61st month at 62%, placing us in the industry's top quartile.
Our OpEx to premium ratio for last year was at 20.4%. Our assets under management now stand at INR 99,486 crore, with a year-over-year growth of 15%. 24% of this AUM is in equity and balance 76% in debt. Happy to share that we crossed the INR 1 lakh crore AUM mark in April of 2025. More than half of this was added in the last five years alone. We continue to outperform in our investment performance in respective benchmarks across all three categories of equity, or debt, or even balance funds, either from a one-year or a five-year perspective. Our digital adoption across the various areas is demonstrated in slide number 47. 100% of our new business customers are onboarded digitally. 83% of all our services are now available digitally, which covers about 67% of our customer transactions. Our customer self-service ratio has now increased to 94%.
We have made significant investments in AI and analytics in areas of sales training as well as customer experience, keeping both our internal employees as well as our policyholders in mind. As we move ahead, we continue to be best in class in our digital infrastructure across prospecting and onboarding in sales, underwriting, and customer service as well as claims. In terms of value and guidance for the future, our solvency continues to remain at a healthy rate of 188%. Our net margins for the year, as per our guidance, is now about 18% last year. We observed significant margin expansion in H2 due to a controlled ULF mix, increasing top-line growth and rider attachments. The reduction in margins from financial year 2024 is largely due to a higher ULF mix and lower interest rates during the year.
As mentioned in the last quarter, we will continue to focus on our proprietary business encompassing agency as well as direct channels, with investments in value-attributive verticals and productivity increase across all cohorts. For our partnership business, we will continue to invest in our bank partners to increase our mind share and drive productivity across all partners. Our guidance is to achieve a CAGR of 20%-25% for the next three years in terms of business growth. Whilst achieving this growth, we intend expanding our current net VNB margins to 18% +, and in absolute numbers, double the value of our net VNB in the next three years, I would say. With this, I hand over to Mayank who will give details of the health insurance.
Thanks, Kamlesh. Let me now share an overview of the performance of our health insurance business. As I've shared in the past, our ABHI has always been differentiated from other insurance players on account of its unique health first model. This model has helped the company grow faster than the market and deliver superior economic success. In line with that, we had a milestone year in 2024, 2025 in many regards, and it is my pleasure to state that the company has achieved its first full year of profit with INR 6 crore profit as per the new accounting regulation. As per the old accounting regulation, the profit for the year would have stood at INR 75 crore. This breakeven in our eighth full year of operation is one of the fastest in the industry, with two times the GWP of the closest competition in the similar phase of their operation.
The profit of INR 6 crore is in comparison to a reported loss of INR 182 crore in the previous financial year. Our combined ratio for FY 2025 thus, as per old accounting regulation, was 102% versus 105% as per the new regulation. This is a marked improvement over 110% reported in FY 2024. This improvement underscores our continued focus on performance optimization and discipline execution, even in a challenging regulatory environment. The recent IRA guidelines on revenue recognition for long-term policies present an important regulatory shift. Whilst the unit economics of the business remain unchanged, the new accounting regulations impact the accounting financials in the short to medium term until we migrate to IFRS.
On the revenue front, the growth momentum witnessed in Q3 continued in Q4, and we clocked a very strong 34% YOY growth, solidifying our position as a fastest-growing SAHI player during the year. For FY 2025, we crossed the coveted INR 5,000 crore benchmark and achieved a gross premium of INR 5,252 crore on the old regulatory mechanism, experiencing a strong 42% YOY growth. The GWP, as per the new accounting norm, stood at INR 4,940 crore in YOY growth of 34%. Our market share in SAHI in FY 2025 rose from 11.2% to 12.6% and increased in market share by 138 basis points for the year. The high growth is driven by a very strong growth in our retail franchise, which registered an impressive growth of 44% for the year.
The growth in retail is driven by all retail channels, with the proprietary channel, which now has an advisor count of 140,000 agents, experiencing a 38% YOY growth. All our major banks and digital alliance partnerships, including Policy Bazaar, have also experienced impressive growth. In fact, we just added Bank of India into our fold. The group business delivered an industry-leading score of 99% with a 40% YOY growth. This score in group-based corporate business is driven by a sharp focus on profitability through careful customer selection and segmentation. We also lead the industry in the outpatient department business in the corporate space. We have one of the most comprehensive suites of retail products, and our flagship product, Activ One, with seven variants, continues to be a big success for us.
Our differentiated health first model has matured further through the year in FY 2025. 9% of our eligible customers are on good health-based incentives, which we call health returns, up from 6% in the previous year, reflecting deeper engagement with our wellness ecosystem. The outcomes for some of the intervened cohorts are also now visible. The percent of customers influenced by participating in healthy behavior has crossed 25% on an enlarged customer base. These customers continue to exhibit lower loss ratios and better persistency, which is shown in slide 58. Overall, this has helped us manage our retail loss ratio better than what we see in the industry. We've invested in building deep capabilities and managing customers with higher health risks as well. Even here, we are seeing very positive improvements in the economics, including claims ratio and solvency.
Our industry-leading claims settlement ratio of 96% and our customer NPS of 60 across five key engagement points reflects our commitment to prioritizing customer experience. To further enhance this and manage claims better, we've invested in a state-of-the-art claims adjudication engine using AI and ML, and we're now processing more than 40% of our cashless claims using this engine. We continue to invest in our industry-leading ActivWell app. The app now provides an opportunity for non-policyholders also to experience our comprehensive health and wellness ecosystem. The year-over-year app download has increased by 125%, with the monthly active user base increasing by 48%. Looking ahead, we remain optimistic about the long-term growth prospects of the industry.
Our differential model will help us in striving to continue to be the fastest-growing health insurer. As we have guided earlier, we continue to be optimistic about reaching less than 100% cost as per the old accounting regulation, and we'll as well endeavor to achieve this as per the new standard also very shortly. Thank you, and I'll now hand it back to Vishakha for a closing remark.
Thank you, Mayank, and we are very happy to take the new questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. We'll take our first question from the line of Avinash Singh from Emkay Global Financial Services. Please go ahead.
Yeah. Hi. Good evening. Thanks for the opportunity. A few questions. The first one is on NBFC margins. So I mean, the P increment has seen a strong increase, but on the core, if we see the net interest income on the margins, are they still kind of weaker? That too particularly in the backdrop of a December quarter that was already pretty low. Can you please help us understand what is sort of keeping these margins at a lower level, particularly, I mean, even when the Q4 growth has come up from your SME segment, I mean, that has grown in Q4. Is it something, I mean, still the margins are under pressure? Going forward, given that, okay, your asset liability are pretty balanced as far as the fixed floating are concerned, that means the rates and benefits will not be material.
How does the margin outlook appear at the moment and what will sort of drive the margin upward? That's the question on margin. Secondly, if I look at the NPA in that business loan unsecured, you have some 45-odd percent guaranteed by central government. That's fine. The spike or increase is QOQ, I mean, it continues for the last four quarters. If we were to kind of, again, go look down further, probably from the disclosure, it seems that the government guaranteed part has a 6.5% kind of a GS3. What is sort of driving this kind of a high NPA ratio in this on the book that is guaranteed by government? I mean, is some sort of a customer profile or some sort of underwriting filter what's driving that? That's on the business loan unsecured.
Thirdly, on the growth side, yes, I mean, on a three-year basis, growth is very, very impressive. If we look back this year, of course, one part was that, okay, on the performance on the newer side, there has been a decline because of various issues. The growth at 20%, but out of that 20%, the 5% is kind of a portfolio buyout, everyone grows close to INR 6,000-odd crore for the full year, INR 6,000-odd crore kind of. This was probably 2%-3%. What is sort of a, I mean, because you have been taking various initiatives, I mean, within Aditya Birla Group, ABCD, direct and all. Yet, I mean, what I would say is that, okay, self-originated growth has been kind of moderating. Again, looking forward, how will this growth appear in FY 2026? Thanks.
The first question was on the yield and the margins. If you look at our yields for quarter three and quarter four, it is quite stable at 12.9, and the margins are expanding from 6 to 6.07. As we had mentioned to you in the last call as well, this is on account of the change in the product mix. Our personal and consumer, which used to be almost 19%, 20% of our overall loan book, has come down to 12%, 13%. That has impacted the yield. We were slightly ahead in terms of the market in taking corrective action. We strengthened and we tightened our underwriting, and that is the reason.
If you see quarter four, it's almost now stabilized, and we are poised to grow in this segment. Going forward, you will see expansion as this segment grows, expansion in terms of the yields and the margins. That's the answer to your first question. In the unsecured segment where you mentioned that there is an increase in the NPA stage three, if you look at the unsecured segment, it comprises three segments, in fact, in a way. There is 20%, which is supply chain business, 80%, which is the term loans where we have business loans and small ticket unsecured loans. Looking at the stress in the industry, we have tightened in terms of, and we had to slow down our sourcing. We have seen some amount of, over the last two, three quarters.
If you see, almost 50% of that portfolio is backed by the credit guarantee and strengthening of the scorecard. Now, I think there is recalibration, which has happened in that segment. Going forward, there will be improvement as we go along. The reason why it looks elevated is because it does not get written off at 180 days, and that's the reason it keeps looking elevated. That's because this is backed by a guarantee from the non-first deed. That was your question number two. The third question was on the growth. If you look at not only the last three years, almost 32% compounded annual growth, which we have demonstrated, and this year, in spite of recalibrating our personal consumer and the unsecured business, we have achieved a 20% growth year-on-year.
As we have guided that in the next three years, we are looking at doubling our loan book. Clearly, that's the kind of momentum which we are looking at going forward as well. In terms of your question on the portfolio buyout, that's a very small part of our overall. We are both on the selling side and the buying side. We look at whatever the opportunity which is there in the market, we evaluate that, we assess that, and that's how. Net- net between sale and buyout, I think the net book is very, very small. If you look at around 5%-6% of the overall disbursement of INR 67,000 crore of annual disbursement, which we have achieved last year.
Okay. Thanks. Okay. Thanks.
Thank you. We'll take our next question from the line of Chintan Shah from ICICI Securities . Please go ahead.
Yeah. Thank you for the opportunity. Sir, firstly, on the NBFC, there is some fixed fee books rising in the unsecured business stage three. What would explain this from 4.1% to 4.7%?
I just answered that question, Chintan. Just answered that 4.1% to 4.7%. This is clearly, if you look at the segment, which is supply chain, 20% is the short-term supply chain business where the credit quality is pretty good. Then we have a business loan and the small ticket unsecured loans where we had, looking at the stress in the industry, and also we saw some bit of, on the backdrop of leverage. We have tightened the underwriting, the scorecards, and the policies. This looks elevated because it does not get written off at 180 days the way we do our other unsecured segment because this is guaranteed by the government and the [Synthetics]. That's the reason why it looks elevated. As we go along, I think this should get corrected. It should come in, yeah, it should get normalized.
Sorry for the repetition. Also, two, three questions on the HFC business. HFC, I think this quarter, the capital adequacy ratio has been around 14.3%. What is the minimum threshold there, or will we be increasing further capital? Firstly on there. The developer book in the HFC business, that has more than doubled on a YOY basis. What are the typical yields here and the average ticket size, and what kind of developers are we dealing with? Because the growth looks quite robust and the yields have declined. Just wanted to get some sense on that. Yeah.
I think the first question, Chintan, you have to repeat as well. That's the second question. The second question was towards the developers that you say.
Yeah. Developers. Yeah.
Growth in disbursements has been quite uniform. If you see retail also, retail has grown by 94%, actually. And developers have increased by 130%. On both the sides, the growth is quite significant. That is where the 9% year-over-year. That's the first part of the question. The type of developers that we typically source, it is a fairly granular portfolio between 280-300 developers that are there in the book. The average exposures that we'll have on developers will be in the range, the ticket size will be in the range of about INR 25 crore-INR 30 crore. That's the ticket size. Typical projects where the cost of construction will be anywhere between INR 200 crore-INR 250 crore will be the typical developers that we'll be financing.
That is how it is. I think last time I had also spoken about this, that in this business, like you rightly said, I think monitoring is very critical. We do this with a platform that we have launched. Actually, I have not seen many companies using it, but we have created one, which is called Synthetics. That platform allows our developers to undertake many of the activities on their side digitally, and most importantly, for our team to also monitor the portfolio both event-based and also frequency-based. I think this is how we are monitoring the portfolio and monitoring the growth. Could you repeat the first question? I think you said something on 14.3, if you could.
Sure. Yeah. I will . On the yields also, I think if you would just help us with what would be the typical yields in the developer book?
Developer book, the yields are anywhere between 13%-13.25%. That is the yield that is there for the developers.
13%-13.25%?
That is right.
Sure. On the retail portfolio, what will be the blended yield?
It will be about 10.25%.
10.25%. Sure. Firstly, I had mentioned on the capital adequacy ratio, that is around 14.3%. What is the minimum threshold or the regulatory requirement? How much capital are we looking to infuse in FY 2026? Yeah.
Total CRAR requirement is 15%. On that, we are at 16.54%. During the year, we will increase INR 200 crore. Internally, by the regulatory guideline, it is 15%. I think we are comfortable in that range of between 16% and up to 17%. That is the internal guideline that we have. Actually, let me rotate it here. The year-round cap ahead is 14.3, and we have sufficient headroom to raise even subjects from the market. Whatever growth capital in the HFC will be required during the next year, we will also support from ABC, from the operating and the holding companies. No worries on the capital requirement of the HFC for meeting the growth requirements.
Okay. Just lastly, on this ROA front, we had mentioned that ROA would increase up to 200-220 for the next 8-10 quarters from 146 currently. What would be the key drivers? Would it be OpEx or yields or credit costs? Could you throw some light on that? Yeah. That is it from my side.
If you see the financials which have been provided, you will see that the NI is 5.07. The OpEx to average loan book is 2.94. The credit cost is 24 basis points. That is how the ROA today is 1.46. The improvement in ROA will essentially come with operating leverage. What is OpEx to average loan book, which is 2.94? The endeavor in the next 8-10 quarters is to reduce that by between 120-130 basis points. This will naturally come with the book building and declining of the growth which is there. Credit costs will be range-bound. Anyways, it is at 24 basis points. In my assessment, they will be in similar range. In fact, the NIMs from 5.07 may come down by 30 basis points. The net would be 100 basis points difference, 130 less 30, and that's 100 basis points.
Post-tax, we should be able to get about 60-70 basis points additionally over where we are. That is the broad calculation of our ROA which Vishakha mentioned in her opening.
Sure. Sure. Just a follow-up on this. Basically, the OpEx has almost increased by around 50%, 47% odd in this year for the HFC business in FY 2025. It means the large front-loading of the expense or the initial CapEx has been done, and now productivity and efficiency should follow. Right? Is that a fair assumption?
That is right. That is very correct.
Sure. Sure. That is it from my side. Thank you for answering all the questions. All the best. Yeah.
Thank you. We will take our next question from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.
Yeah. Thank you for taking my questions, and good evening, everyone. First thing on NBFCs, just trying to understand, sir explained earlier that as the mix of PNC, personal, and consumer in the loan mix improves, we will see yields improve and margins improve. Just trying to understand over the next maybe one to two years in a declining rate environment, why one tailwind will be improving proportion of PNC in the loan mix. How are we placed on the liability side, and how will that impact margins is one thing I wanted to understand. The other thing is on NBFCs, I think we've guided for, again, this year, doubling the loan book over the next three years. Just trying to understand, will the existing product suite suffice, or are there any newer products that you would look to pilot to double this doubling of the [loans] next three years?
I think, yeah, I'll take your second question first because I think doubling of the loan book, the way we have the entire range of products on the personal consumer side and also in the MSME side, we might look at one or two more products, but the way we are looking at, we want to spread our existing branches, the branches which we have set up in the last 12 to 18 months, and also branches which we will open in the next 6 to 12 months. That and also the digital assets which we have created both on the personal and consumer side and for MSME side, the Udyog Plus, which we have set up.
We want to spread out the channels, the platforms which we have created, and also the productivity as we, if you look at these branches, a lot of branches have been opened in the last 12 to 18 months. I think the productivity should get improved. That is how we are looking at doubling. That is even the guidance is for three years in terms of doubling. There might be a slowdown looking at the environment the way we did it in the last year, looking at the environment and the leverage going up. We really recalibrated our strategy for unsecured loans. Going forward, in the next three years, we are quite confident that we should be able to deliver the numbers within the range of products which we have, with addition of a few products and just spreading out the infrastructure or the platforms which we have created.
What was the first question? Cost of funds, if you look at our liability borrowing, 65% is floating and asset is 71% floating. In a way, it is very, very balanced. In terms of as we grow, as we grow personal and consumer segment, short-term unsecured loans, primarily they are secured in nature. As we get these, they are fixed in nature. Fixed in nature, as we keep getting the benefit on the cost of funds and it will get locked in for two, three years, our margins should expand. Also, the product mix, more than I think the product mix only should help us improve our yields and margins. That is how we are looking at margins going forward.
Thank you. Just a next question, while we are at around 12% personal consumer loans in the mix, and like you said earlier, at the peak, we were at around 20%-21%. Is the idea, while we go in a calibrated manner, the intent will be that over a course of time, take it back to 20%? I mean, how would the interplay be on the ROAs on the HFC? I think we guided for 2%-2.2% over the next 8-10 quarters. How should we look at ROAs in the NBFC release?
The statement, I think, guideline or whatever which we have in terms of the product mix, is 75% of our loan book has to be retail and SME, and 25% is on the corporate side. That should help. Within that, if you look at retail and SMEs, as you rightly mentioned, personal and consumer can go to around close to 20%, and unsecured business will again grow. Both these segments growing and the margins improving, that will expand our ROAs. In terms of guidance on the ROA, we will, I think, wait and see how the next couple of quarters goes, and then we should be able to. We are looking at expanding the ROAs from here on.
Got it. The last question that I had was on our HFC business. I mean, just trying to understand this principal business criteria which says that 60% of the company's total assets should be dedicated to providing financial housing. Where are we placed in the PBC, in our housing business? Just trying to understand in terms of mix, we have seen, I mean, over the last one year, very good traction on the CF side, the construction finance side. Maybe over the next two to three years, how are you looking at this mix evolving, particularly the CF side and the affordable businesses that we have?
Right now, on the PBC, there are two criteria. One is on URL itself. There, we are placed. We have to be at 60%, we are at 61.1%. When it comes to Indian housing loans, it has to be higher than 50%. We are 52.4% on that side.
The idea is that, of course, even in the developer financing, if the financing is for residential projects, it gets classified as HL on that side. On the mix, right now, we are at a mix of 14.3% for the CF business, and prime is at about 47%, and 38% is affordable. The mix is going to be in that similar range only. It will be that range of 45%-47% of prime, 30%-40% of affordable, and between 14%-15% of developers. That is the percentage. The objective, obviously, is to leverage the opportunities which are coming in on both the housing and on the lab side, and ensuring that we are ahead of the regulatory percentages on PBC.
Got it, sir. This is useful. If I can just quickly, just one last question. We've done exceedingly well, almost a 70% kind of a YOY growth in our housing business. Just trying to understand, I mean, are we a little aggressive in the market, especially when it comes to housing loans, and particularly in those projects where we have given construction finance? What I'm trying to understand is usually kind of when we look at other housing finance companies, more often than not, the LTVs are in that range of 75%-80%. For us, are those LTVs higher than our peers' set? Is that also something which is helping us get faster growth?
I think the first question is that we've been always talking about in the last almost 6-8 quarters that we have built capacity in the housing finance business. Building capacity and the platforms that we have earlier spoken have improved the productivity of teams. Significant increase in capacity, and that also shows in the OpEx, which was earlier brought out by one of the other questions that I answered. It is a function of capacity and productivity that has helped us in growing this business. On the LTVs, there are, of course, clearly there are regulatory guidelines around LTV, so there is not too much of a play which is available in the housing sector. We have seen the last two years on the way LTVs have progressed.
I can give you comfort that our LTV, if I say all cohorts put together, is in between 50%-60% in 2024 and 2025. We have not seen a change. The growth is coming on the back of capacity, productivity, and 12% of our disbursement, we have been seeing we have been able to leverage the EBC, EBG ecosystem as well. That gives us an opportunity also to improve our growth versus the competition in the marketplace.
Got it. This is very, very useful. Thank you very much for patiently answering all my questions. I wish you and the team the very best.
Thank you. We'll take our next question from the line of [Samir Bisit from Diamond Asia]. Please go ahead.
Yeah. Hi. Thanks for the opportunity and congrats on a good set of numbers. Just wanted to ask on the flow rates on the unsecured business loans. Rakesh, could you comment it? We understand that headline GS3 is slightly higher, but some understanding on flow rates would be helpful. Can I just come back on the flow rate for business segment which you are talking about? Yeah. The unsecured.
I can come back to you on this.
Sure. And secondly, how should one think on credit cost incrementally? I mean, you have mentioned that the environment has improved and you are more confident to grow on the unsecured piece. Would that mean, obviously, it means a lower credit cost for next year. How should one think about it? That's all from my side.
On the business loan, the earlier question, the flow rate is 0.8. That's how it's stacking up quite well. We should see some improvement there. In terms of your question, okay. The only one, the only one, it's credit cost. The credit cost, which you see in a difficult environment also, but last year when the unsecured stress was seen in the industry, we have reduced our credit cost from 1.5% to 1.31%. Yeah. We have clearly demonstrated that we had the agility to move away from low ticket, unsecured, where the customers were leveraged, to move away from that and build our secured business.
We have clearly demonstrated that we have strengthened underwriting. We have put all the criteria in terms of looking at the leverage, how many, I think those are the inputs which have gone into that scorecard. Clearly, we are looking at sustained credit cost over the next year or so. We have been tracking the portfolio not only on the bounce rate, but the first EMI bounce, second EMI bounce, and tracking each and every cohort very, very closely. We have strengthened our collections infrastructure, preemptive telecalling for customers on collections. I think a lot of actions which have been taken, and we are quite confident that post-calibration. Also, we have cut out the higher risk segment from our underwriting and sourcing. We have cut that out, so we should be able to sustain the credit cost next year as well.
Okay. Fair enough. The flow rates that you mentioned, is it fair to assume that they have been largely stable? They have been largely stable.
Yes.
Okay. Fair enough. Thank you and all the best.
Thank you. We'll take our next question from the line of Gaurav Kochar from Mirae Asset. Please go ahead.
Yeah. Hi, sir. Good evening. Just wanted to understand a little bit about the unsecured personal loans. You mentioned that last one year you have been a little cautious on this portfolio, and the share has come down from 17% to 12%.
Going forward, while you've indicated 20% over the next three years, I just wanted to understand its dynamics on yield. Let's say if we improve the share by 200 or 300 basis points in the coming year, what kind of yield does this portfolio run at? Just to understand how much can it benefit on margins.
This portfolio runs at closer to 18%-19%. I think a 200 basis point improvement in the product mix should help us expand our margins. That's what I stated earlier. In terms of absolute margin expansion, I think we can just simulate that.
Sure. Thanks. Coming to the funding mix, if I look at almost half of your borrowing is from banks, [if we look at working capital ], that's about 57%. What percentage of this liability would be linked to Repo? What would be the other piece? Let's say MCLR. Is it one-year MCLR or six-month MCLR? If you can give some split of your borrowing.
Primarily, most of our borrowing from the banks is three-month MCLR and one-month MCLR and not one-year MCLR. So that Repo would be, I think, quite low in terms of closer to around 10% or so.
Sure. Coming to let's say today we've seen a 50 basis point rate cut. Let's say this may take for banks to reprice, it may take about six months to nine months on the MCLR front. As and when it happens, can we expect let's say this half of it at least flowing through in this year, your cost of funds at least from the bank borrowing side, half of the rate cut benefit flowing through in FY 2026? Is that a fair assumption?
As the rate comes down, yes, the benefit should come to us. Apart from the bank loans, I think we have the MCDs, the money market which we borrow from, I think that is at a slightly lower cost. That is another short-term borrowing because we also have short-term assets on the supply chain and on the consumer loan side. There are many avenues to improve our borrowing mix and reduce our borrowing costs.
Understood. Just final question, the merger with the holding company, is there any sort of benefit on either funding cost or maybe some operating synergies that you can speak about that can benefit us over the next two to three years?
Gaurav, on the part of the merger we had explained earlier also that funding because we are anyways ABFL was also AAA rated and from CRISIL, ICRA, all the rating agencies, and ABCL is also AAA rated.
There will not be any benefit as such going out of the rating or something, but definitely we have, it is a large unified NBFC now and an operating company with better access to capital. Also, the larger benefit of the merger was on account of release of capital. Close to about INR 3,000 crore-INR 3,500 crore worth of capital got released, which was collected. That has helped us to take care of at least one to one and a half years of growth requirement. I think that was the major benefit. Other than that, we have always operated on a lean model at the Goldco. Synergies will of course be there in terms of the horizontals that we carry at Goldco, but largely the benefit will be of being a large unified operating NBFC, direct access to capital, and also the capital release that we explained.
Understood. Perfect, sir. Thank you. Thank you so much. All the very best.
Thank you. We'll take our next question from the line of Nidhesh Jain and from Investec. Please go ahead.
Thanks for the opportunity. First question is on the ABCD app. Can you share some data around customer engagement? What is our monthly active users? And some business data as well. What is the quantum of disbursements that we have done? What is the quantum of mutual fund AUM or life insurance premium, health insurance premium that we have generated in FY 2025 from that?
Currently, we are tracking the number of customers that we've onboarded. Of course, we've also spoken about the number of VPAs that we've had on the customers' web experience, the app. As we've just completed a year at the launch. Last year, we launched it on 1,600. I think in the subsequent quarters, we'll come up with the GME numbers and also the questions that you may be asking.
Just to give some clarity here, Nidish, for now, you can say that the origination on the personal loan on the NBFC side and having created the journey for the personal loan, a large contribution to the housing loan and also to the asset management business in that order. We are also looking at growing the insurance and the rest of the businesses also on the app. As Pankaj said, the numbers we'll be able to share in the subsequent quarters.
Sure. You mentioned 5% of personal and consumer loans have come from this app. Can you quantify in INR crore?
At INR 100 crore run rate per month, Nidhesh. I think we'll keep it.
Okay. Okay. Sure. Sure. Secondly, can you share stage one and stage two PCR movement from FY 2024 to FY 2025 for NBFC and housing finance business? In percentage, from what was stage one and stage two PCR.
Nidhesh will come back to you on this.
Sure. Sure. Lastly, in the life insurance business, can you share the reason for positive operating variance and positive assumption change variance for FY 2025?
Positive operating variance is largely on account of better experience in lapses and contribution of group business profit. That is largely the contribution coming on the operating variance side. On the assumption variance, basically persistency, lapses in some of our products, specifically non-PAR, and also on portfolio or mortality experience has been better. Typically, what we do is we look at consistency of that variance that we see over a year or two before actually taking the benefit of that. We got some higher on account of assumption variance, but operating variance for us has always been positive over the last few years. A combination of both of this is the explanation of your operating variance as well as the assumption variance.
Sure. Sure. What would be the margin expansion because of the assumption changes for the current year?
Basically, if you look at the large contributor, still comes from the net VNB of the portfolio. If you're asking me in the bridge, then I'm saying we would have got roughly about 100 basis points extra on account of the assumption variance change.
Sure. Sure. Sure. Thank you. That's it from my side.
Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to Ms. Vishakha Mulye for closing comments. Over to you, ma'am.
Thank you so much for joining us. If there are any more questions, all of us are available. We will get in touch, and you can contact any of us. Thank you.
Thank you. On behalf of Aditya Birla Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.