Q1 26/27

Jul 20, 2026

Summary

APE rose 19% YoY, VNB grew 29% to ₹124 crore and margin reached 21.1%, despite GST costs and agency investment. Management expects growth to continue, with GST pressure easing and agency mix expanding over time.

Ladies and gentlemen, good day and welcome to the Canara HSBC Life Insurance Q1 FY27 earnings conference call hosted by Motilal Oswal Financial Services Limited. As a reminder, all participant lines will be in 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 touchtone phone. I now hand the conference over to Mr. Kartikeya Mohata from Motilal Oswal Financial Services. Thank you, and over to you, sir. Yeah. Thank you. Good evening, everyone. It is a privilege to host the senior management of Canara HSBC Life Insurance for the Q1 FY27 earnings conference call. From the management, we have Mr. Anuj Mathur, MD and CEO, Mr. Soly Thomas, Deputy CEO and Chief Distribution Officer, Mr. Tarun Rustagi, the CFO, Mr. Nitin Agarwal, the appointed actuary, and Mr. Amit Jain, the Head of Investor Relations. I now hand over the call to Mr. Anuj Mathur, MD and CEO. Over to you, sir. Yeah, thanks, Karthikeya. Good evening, everyone, and welcome to the Q1 FY27 earnings call of Canara HSBC Life Insurance. We welcome you all in this call. The financial results along with the investor presentation is available on our website as well as on the websites of both the stock exchanges. To begin with, the Indian economy continues to demonstrate resilience amid a volatile global environment, supported by steady domestic demand and a strong financial sector, underpinned by a healthy balance sheet and robust capital buffers. Against this backdrop, the life insurance industry has sustained steady growth, reflecting the enduring need for protection and long-term saving solutions. While the overall environment remains stable, pockets of uncertainty persist, and we remain watchful of evolving demand trends. In this context, our focus continues to be on staying agile, deepening customer engagement, and innovating to address the diverse and changing needs of our customers. Against this backdrop, we are pleased to report a strong performance with WPI growth of 18% year-on-year and APE growth of 19% year-on-year, in line with our stated guidance of 18%-20% growth. Importantly, our growth continues to outpace the industry, enabling us to maintain a steady industry market share at 1.8% and 2.6% amongst private players. At the same time, we remain focused on broadening our reach and strengthening distribution-led growth, reflected in 19% year-on-year increase in the number of policies sold. We will continue to target a similar growth trajectory as reported in this quarter while striving to exceed our targets through a dynamic product mix aligned to evolving customer preferences and market opportunities. On product mix, we remain focused on our traditional franchise, resulting in share of traditional products in our overall APE increasing to 64% compared to 51% in Q1 FY26. We continue to see GST's positive tailwinds through protection business with a healthy growth of 42% year-on-year, with share of overall APE rising to 13% versus 11% in Q1 FY26. There is a good growth out here. Credit life also remains a key growth driver, registering a healthy growth of 40% plus year-on-year, led by steady growth both in home loans as well as education loans. We continue to see encouraging traction in the individual protection business and remain optimistic about its growth prospects, supported by increasing awareness amongst customers and positive impact of the GST rate changes. Friends, our annuity business also maintains a steady growth trajectory, with APE growing 14% year-on-year and this segment contributing to 14% of our overall APE in line with the previous year. We remain focused on growing our deferred annuity portfolio as it is not only delivering superior long-term value for our customers, but also enhances earnings visibility and supports the sustainability of our business over longer periods. Friends, given the volatility in equity markets, we maintain a measured approach towards the ULIP segment while continuing to capitalize on select pockets of demand where customer interest remains healthy. Consequently, our unit contribution reduced by 13% year-on-year. As we move ahead in the year, we believe the underlying demand for units is likely to improve in the second half as the market conditions stabilize and investor confidence strengthens. Accordingly, we will continue to pursue our strategies of maintaining a balanced product mix, enabling us to cater to diverse customer needs while driving sustainable and profitable growth. Our company has witnessed healthy new business premium growth of 24% in this quarter. Further, renewal premium has grown by almost 22% year-on-year, which is a very decent growth for the quarter. This performance was supported by sustained improvements in customer retention and engagement across our key cohorts. Our 13M persistency improved to 85.9%. This is compared to 84% in the corresponding period last year. Our 60-plus month persistency remains stable at 55.3%, reflecting the strength and durability of our in-force book. These trends underscore the quality of our customer franchise, the effectiveness of our sales and servicing practices, and our continued focus on fostering long-term customer relationships. Friends, our agency channel is also performing as per our plan. We have onboarded over 1,000 agents and have collected a premium in APE term of INR 15 crore during this quarter. We will continue to scale up this channel in a phased manner, remain confident of further growth throughout FY27. Now let me take you through some of the key financial metrics. Our value of new business for the quarter stood at INR 124 crore, registering a growth of 29% year-on-year. Despite the GST impact and our ongoing investments in the agency channel, we reported a healthy VNB margin of 21.1%, which is higher by 150 basis points over Q1 FY26. The margin improvement has been led by a favorable product mix shift towards protection and a favorable benefit of the yield curve. Profit after tax for the quarter has increased by 20% at INR 28 crore. This increase is despite GST impact of almost INR 20 crore. Our embedded value, EV, grew 15% year-on-year, reaching INR 7,383 crore with an operating ROEV of 19.7%. Our total expense ratio for the quarter stood at 20.7% compared to 19.6% in the corresponding quarter last year. This increase is primarily attributable to the GST change. Without this, the expense ratio would have been flat on a year-on-year basis. Our solvency ratio is comfortable at 198% and remains well above the regulatory requirements. Coming to customer centricity, we continue to see improvement across key metrics, which measure customer centricity. Our claim settlement ratio remains best in class at 99% in Q1 FY27. We are also happy to announce that we have been accorded as India's best workplaces in life insurance for the year 2026. We also feature amongst India's top 100 companies to work for in 2026. In terms of closing remarks, just to summarize, our new business premium has seen a healthy growth of 34%. Our APE has grown by a healthy 19%, which is higher than the industry growth. We have seen significant improvement in our 13M persistency at 85.9%. Our VNB at INR 124 crore has seen a growth of 29%, and VNB margin at 21.1%. In terms of growth in number of policies, we have seen 19% growth in number of policies in Q1 FY27 over previous years, and we are very much on track on our diversification agenda through growth of agency and other channels. We remain constructive on the outlook for the life insurance industry and are well-positioned to leverage the opportunities given our diversified product portfolio, customer-centric approach, and strong distribution franchise. As customer preferences and market dynamics continue to evolve, we will stay agile, innovate proactively and strive to outperform our medium-term objectives. With this, thanks to all the participants for taking out time in this evening call. With this, we are now happy to take any questions that you may have. Over to you. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Mohit Mangal from Centrum. Please go ahead. Great. Thanks for the opportunity and congratulations on a good set of numbers. My first question is basically on the, one second. My first question is basically on the VNB margin. The expenses impact dragged down the VNB margin by 190 basis points. I think if you can just substantiate on that and kind of break down this 190 basis points, then that would be helpful. Okay. First of all, thanks, Mohit, for asking that question. I will request our Appointed Actuary to give further details of this. Yeah, hi. The key reasons for the improvement in our VNB margin is actually driven by the favorable product mix and better volumes than last year. From March? Yeah, sorry. From March, this is one of the reasons that the drop has also been out of expenses, because as you are aware that last year, last quarter, there was no GST impact, whereas this quarter, there is obviously a full impact of GST. So that is the primary reason. Other than that, we have actually done better only. In terms of product mix also, there is slight falls in the product mix also from the last quarter. So if we just compare the last quarter Q4 number. Other than the full year number, there is a better improvement in product mix that is improving and the negative is only driven mostly by the expense on GST. Okay. Yeah. Fair to assume that 190 basis points is due to the GST impact. Nine ninety. I think we are referring VNB margin drop from 31st March 2026 full year numbers to this number. I am looking at the VNB margin drop given on a slight rally of the second week. Oh, yeah. Okay. June 25 to June 26, we are seeing an improvement. Yeah. Although I was looking just at the expenses impact, which is 190 basis points. In respect of the expense impact in the work that we are talking about, yes, that is primarily driven by the GST part. How do you feel for the rest of the year? Will this kind of continue, or will this decline going forward? This is expected to decline going forward. Over the year, we expect it to actually neutralize because firstly in Q1- Last year there was no GST impact whereas in this Q1 there is a full year impact. September onwards, even last year there was an impact. That was still being much reduced impact comparison this year. In addition, whatever tailwinds we are also getting on account of GST in terms of higher protection mix. That will also help reduce this impact. By the end of the year and the other operations or the savings that we have been doing at RM on OpEx side, that will also materialize. To the extent of that, we are expecting this impact by the end of the year to become quite negligible. If we can quantify any kind of guidance for FY 2027, then that could be it. I think that will not be relevant, because by the year end anyway, we mentioned in the beginning itself that this year the GST will become a BAU. For the first two quarters, we have to show this because of the comparison versus last year. By the year end, you will see that this impact, like Nitin has just mentioned, that it will further reduce because of the various initiatives which we have taken, and also in terms of the growth in the protection business. There is no guidance we want to provide on this. What we can simply say that it will not be discussed and talked about going forward because that will not become relevant once you reach the year end. Understood. This is helpful. My second question is that the share of ULIP went down very dramatically. Is this pure market related or a deliberate attempt to diversify the product mix? Yeah. Partly it is because of the market, because we have seen the last quarter in terms of market was quite choppy, volatile. And partly it is also efforts on part of the management because last year also we said that we would like to increase our traditional mix. This emanates from the customer profile we have, Mohit. If you look at our overall customer profile, we have customers in Tier 2, Tier 3, Tier 4 cities where we have seen more demand coming now in this kind of uncertain environment for traditional products. I'll say partly it is because of markets and partly because of our efforts to increase our traditional mix in line with customer appetite for products. Right. This is very helpful. My last question is towards the product. I think we, across the industry and even our company, have given a very strong growth in the protection. Just wanted to know basically, is this more structural or is it due to GST related? And secondly, have you seen any kind of a change in the pricing of retail protection products? See, there are a couple of factors which are helping us in increasing our protection share. One, as you rightly pointed out, it is the positive tailwinds which are coming from the GST waiver, which is there on protection. So that's definitely helping. Number two, it's also, again, our efforts to increase our protection mix to actually penetrate deeper into Tier 3, Tier 4 cities, which is also helping us in growth of number of policies. If you notice, our number of policies have grown by 19% in this quarter. So it's an effort which we are making to increase our protection business. And obviously the GST change last year, which got in September, is definitely helping. Broadly, these are the factors. And in terms of pricing, I'll say that it's more of increased appetite now. Even with the reinsurers, they are showing interest to write more protection business. As a company, our focus is on increasing our protection mix. There are number of factors which are resulting into this, and it's a deliberate strategy of the company to increase protection mix, to increase number of policies. Understood. This is very helpful. Thank you and wish you all the best. Thank you. Thank you. The next question is from Sanket Khura from Avendus Spark. Please go ahead. Thank you for the opportunity. One small basic clarification on the margins, how you report. Is margin reported in the current quarter based on last year cost assumption or is it mark to market based on the quarter? The reason why I am asking is this that because the business seems too low in one Q, the operating leverage will be typically there and as the quarter becomes bigger and bigger, you get the operating leverage benefit and margin expands. Just wanted to understand how do we assume cost while reporting the margins on quarterly basis, basically? Yeah, thanks, Sanket. Yes, you are right. We are expecting to get operating leverage through the year because we do report it on the actual OpEx for the quarter when we calculate the margins. Understood. Which means that as you rightly highlighted that GST negative impact will wane as the quarters will progress and you get the operating leverage benefit during the quarters. I do not know whether you maintain the same product mix or not. If you maintain the same product mix, then there could be a meaningful delta improvement in the margins. That is correct. No, I think we follow more balanced product mix. I think the current number which you are seeing in Q1 could be skewed towards traditional more. But I think over a period of time in this financial year, we are likely to see more balanced product mix. Sir, is it fair to say that last year you were around 61% in ULIPs, so broadly you will end up with a similar number for the full year? Maybe not exact number, but broadly around 50 for ULIP and 50 on non-ULIP kind of a number? The range is between 45%-50%, because as I mentioned earlier also, depending upon the customer need and certain external factors, it may vary in this range. This is what we feel, that 45%-50% is the range within which annual mix is likely to be there. Got it. Sir, the second question is that your annuity has slowed down a bit, relatively compared to what you were usually reporting. Is it fair to say that your non-par growth consumed into annuity, or is it probably you see that both markets are independent and they can grow in silo? If that is the case, what led to a bit of slowdown in annuity? That is one thing. On protection, that ₹74 crore, if you can give a breakup into individual and group protection, that will be useful, sir. Okay. First of all, I would like to mention that one quarter is a very short time to assess whether annuity has slowed down or it is at the same level. I think the numbers which I have, we have not seen any drop in the annuity business. It is stable at around 14% in terms of the overall top line. Yeah. You will see that this is, Sanket, it is, Tarun, it is going to grow because first quarter is a first beginning of the year and the annuity business is expected to go back to the same level because we have a clear segment where we sell, which is a Canara channel also and HSBC channel also. So we are expecting that overall percentage will increase. On your second point, which is with respect to the breakup, it is actually 30-70. 30% is individual premium and 70% is contributed by group. Understood. Sir, maybe again, I am just asking, given Canara Bank has slowed down in the current quarter relative to other banks, maybe you can answer the way you want it, that the Canara Bank slowdown is predominantly because of the weak demand and the other channel growth is largely because of your non-par contribution growth. Because HSBC Bank reporting almost 42% growth seems to be meaningfully very big. Just wanted to understand what is happening in HSBC Bank and what led to a bit of slowdown in the Canara Bank. Okay. Again, I will start by saying that one quarter is too short a period to make an assessment about the full year. But what we have seen in Canara is actually a shift towards more of traditional products and typically in traditional products, non-par particularly, the ticket size reduces. I think that is one reason. In fact, I will ask, I will request our Deputy CEO and CEO, Swaminathan, to further elaborate on this. Yeah. See, basically, if you look at the trend, post-March, we have seen the customer shift towards traditional and that is what we have capitalized in AMJ, keeping in mind the sentiments of the customer, specifically keeping in mind view of political situation in few of the markets which is predominantly higher contribution towards in Canara, which is south-based. Basically, if you look at Kerala, Tamil Nadu, Andhra, wherein you have a good NRI base, but there is more of a group or a job, wherein we have seen the trend that those people want to invest towards the traditional and hence the ticket size has got reduced. Having said that, if in the coming months, if that trend changes, definitely we will like to go for the as Anuj has already said, that we are looking around anything between 45%-50%. Understood, sir. Lastly, sir, given economic variance which was probably negative for the full year last year has come back, I see your sequential growth of 2% is little on the lower side. Am I missing anything? Is it because of the dividend payout that number looks little lower or in general, economic variance did not recoup back to the extent what we wanted? You are right. It is primarily driven by because again, for a quarter, little bit of economic variance also when you annualize it that way it becomes a bigger number. So primarily driven by some level of economic variance which is still to be recouped mostly on the net worth side. While on the VIF side we have managed to recoup but on the net worth side, depending on the security there is still some amount that is to be recouped. But over the year we do expect us to again maintain this operating ROEV that we have showcased earlier. We expect that to be maintained over the year. Understood. Perfect. That is it from my side. These were my questions. Thank you. Before we take the next question, a reminder to participants that you must press star and 1 to join the question queue. Ladies and gentlemen, to ask questions, you must press star and 1. The next question is from Gaurav Nigam from Tunga Investments. Please go ahead. Yeah. Thank you, sir, for taking my question. To start my first question, sir, in light of the recent Supreme Court judgment on the claims to be given to homeowners, I just wanted to recheck this point. Will anything change for us on the reserving side for our existing set of policies? No, I think reserving we already allow for the mortality assumptions baking in enough prudence so I don't expect any major, any kind of deviation or any increase in the reserving side from that. Okay, great. Thank you, sir. My second question is, in light of the growth ambition we have as we continue on to grow and also diversify out from banker to also non-banker, how should we think about the expectation on the total expense ratio going forward for us? I understand that Q1 is looking high because of GST, but I just wanted to get a broader trend over the next 1-3 years on the total expense ratio. If you actually observe, our expense ratios are actually into top quartile and we will continue to maintain it. Even though we are expanding our channels, our top line is increasing. At the same time, we are a very cost-conscious organization. So we maintain the overall cost within that range. Even if you notice this first quarter, the cost ratios, if you exclude GST, is almost flat, right? Even with the addition of agency channel in this particular quarter. So we continue to maintain the cost efficiencies and as the top line is increasing, we will continue to see the improvement in the cost ratios. We will remain into the top three companies in terms of the cost ratio. Sure. We have been maintaining that 21% kind of range. Should we consider that as the barometer even going forward? Sorry, I just could not get a clear answer there from you in the simple terms. No. In terms of the cost ratios direction, it will improve. It will not remain at that 21% because our top line is increasing at a faster rate than the cost. Okay, understood. As the year progresses, the volumes also go over Q2, Q3 and Q4. So that way, I think the percentage is likely to go down. Okay. Got it. Just a quick question. We have a 3-year detailed EV disclosure of the company. I just wanted to understand for the last 10 years of the company, did we ever report negative operating variance? Can you give us a reason in case we reported what was the reason for those operating variance of the company? I think we've been reporting the last 5, 6 years only and internally we'll be calculating. The only reason we've generally seen the negative variance in the operating really is primarily on account of the COVID. The COVID years, yes, there was a negative variance on the mortality side, but that was I think across the industry that was there. That was one-off. Post that we've typically been seeing positive variance on the operating lease end. Thank you. The next question is from Nidhesh from Investec. Please go ahead. Sure. No problem. Thanks for the opportunity. First question is on if you can share the channel-wise growth on a year-on-year basis or channel mix from last year Q1. That will help us in terms of understanding how the channel group is panning out. That is one. Secondly, if you can also give some color on agency roll out, where we have added agents, how is the productivity panning out and what is, let's say, 2-year, 3-year view on the agency channel in terms of contribution to our overall APE. These are the two questions. In terms of channel for this first quarter, the Canara Bank is flat versus last quarter. We explained the reason why because we were focusing on traditional and there is also some impact due to this geopolitical NRI base premium side. HSBC has grown over 40% and other channels have also grown. That's the channel growth. Basically, Canara and HSBC is almost contributing 80% of our business because the Canara was flat this quarter. There is a higher contribution from other channels. Agency is doing very well like we mentioned that this quarter they have reported ₹15 crore APE and it will continue to grow. In terms of next three-year prediction, we expect that agency should be contributing around 5% of the total volume and including agency, the alternate channel which is right now around 10%, is expected to be around 15%-20% contribution. That's how we are planning to diversify overall channel mix. What we also need to understand, the overall growth is expected to be there. The Canara, HSBC, RRBs are also expected to grow in the same line. Within that increased pie, the alternate channel, including agency, is expected to contribute around 15%-20%. The alternate channel includes agency. This is 15% right now that will contribute 20%. That's what you are saying? No. Right now the alternate channels, which is having a very small proportion of agency, mainly our direct force plus defense plus digital. These are the three channels contributing almost 10% of the volume. This 10% is expected to grow to 20%, where agency is expected to be contributing around 5% in next year period. Sure. Understood. What is the drag on margins because of agency rollout or how do you see that, let's say this year and over the next 2 years? Currently it's about 2%. Next 2 years again should be in similar range, about 1%-2%. Obviously, it keeps coming down as the fixed costs incur now over time as the volumes grow, this is expected to go down. Currently it's about 2%. Overall, in next 2 years you can expect that agency will drag around 2% of the margin because of the initial business strain. Then as per our models, we are expecting that agency will start contributing on a positive margin side from the fourth year onwards. This is just the first year, and then we have another couple of years where we'll see a negative strain, which is going down. Overall, in next 2-3 years, the strain will be around 2% on the overall margin. 2% is 200 basis points, right? 200 basis point drag on Yeah, 200 basis points. But at the same time, our overall, other than agency, the margin is expected to grow. We are expecting that our margin would be reaching what is a market-consistent margin in three to four years' period of time, including the strain, after adjusting the strain from agency. Sure. Thank you. That's it from my side. Thank you. The next question is from Raghuish Sharan from JM Financial. Please go ahead. Hi, sir. Thanks for taking my question. I have a couple of questions. First, on that agency piece, you mentioned the strain of around say 200 basis points per year. I just wanted to understand how will it move quarter by quarter? Because we are on an actual cost basis, the assumption would be it will be highest in the first quarter, but given that we are growing that way as well, it can also increase through the year. Second, in the last year, what we have seen is the individual protection has grown substantially higher than the credit life business for us. In this quarter, both have grown at a similar pace around 40-odd percent. So what would you attribute this to? Is 40-odd percent the kind of trend growth we can expect? Or do we expect growth to pick up in, say, individual business or credit life business thereon? Yeah. Okay, let me answer the first question. What I mentioned was overall 2% strain in next 2-3 years. It's not every year because the strain will reduce. What is also going to happen is in agency, as we grow, the cost of acquisition as a percentage will reduce because you will be having a better productivity. The product mix will also shift towards traditional, which is a typical product mix for agency channel. So you'll see that the strain will reduce over a period of time, and that's why we are confident that in 3-4 years' period of time, the agency will start contributing on the positive way in the margin side to the organization. Then you'll see, obviously, it is plus plus from the business other than agency. This was on the first. The second question was related to- Protection split. Protection split. The group credit life, we expect that the trajectory will be in the range of 35%-40% growth. On the individual protection, we are also expecting a significant growth. What we expect that overall percentage of the protection business by the year-end would remain in the double-digit numbers. This is something which we are targeting. So both will grow. The proportion, obviously, there is a good demand right now because of the GST effect, and we expect that is going to continue on the individual side. To add to that, typically in Q1, we see our protection mix on the higher side because of PMJJBY. This is a government scheme where we get premiums typically in Q1. Of 13%, if I have to talk about, 6% is on account of PMJJBY and the remaining is between credit life and retail protection. These two elements, credit life and retail protection, may increase over a period of time, quarter-on-quarter. Okay. For the last year, the proportion of PMJJBY was around? For the full year last year. In terms of percentage or the number of lives? Yeah. In terms of percentage of the total business, lives. We'll share that number offline with you separately. Yes, sir. Thanks for the update. Thank you. The next question is from Chirayu Maloo from Kotak Institutional Equities. Please go ahead. Hi. Thanks for taking up my question. My question is on commission regulations that are being discussed in the industry. What impact you're assessing, if any, if this comes through? What are your thoughts on this? Yeah, I can answer this question. Once I see the draft regulation right now, I think it's all media speculation. We are waiting for the draft regulations to be issued by IRDAI, then only we can comment in terms of impact. But one thing which I would like to mention, I think I've said this in the past calls also, that in our business because of bancassurance and Canara HSBC Life Insurance Company, our commission rates are quite moderate. We don't expect a major hit to fee income for the bank from this. But again, we'd like to wait for the regulations, at least the draft to come, and then we can comment on. Understood. Thanks. That's all from my side. Thank you. The next question is from Kartikeya Mohata from Motilal Oswal. Please go ahead. Hello. Yeah, sir, I have just one question. In agency channel, since agency channel is less on protection side, less selling protection, how do you aim to protect margins there in that segment? Okay. We have our Chief Agency Officer also here, Dinesh, and probably he will talk about the mix and then margin, maybe you can handle him then. Yeah. Hi, good evening. Currently, agency contribution is around INR 15 crore. As we see our distribution going up in subsequent quarters and subsequent years, the product mix improvement will happen and the term contribution will start improving quarter on quarter basis. I think that is the idea. I think in agency, the product mix is aligned towards more traditional and even the protection is expected to increase there. That is how that will also help the margin and agency over time. Okay. Also if you could provide a guidance on APE growth and margin for the full year, some color and how will it be improving towards the end of this year? See, at this point in time, we will not like to give any guidance right now because, number one, I think the overall markets are volatile. The geopolitical situation is like that. But as I mentioned in the beginning of the call also that we expect our overall growth trajectory to be on similar lines and in line with the guidance which was given in the past. Sure. Thank you, sir. All the best. I hope your question is on overall growth and not specifically about agency, right? Overall growth, yes. Overall growth. Yes, that's the guidance which we sort of maintain. Yeah. Thank you. A reminder to participants that you may press star and one to join the question queue. The next question is from Prayesh Jain from Motilal Oswal. Please go ahead. Yeah. Hi, sir. Just on the HSBC channel, you have seen a strong growth. Do you think that is sustainable over the medium term, given that we have new branches getting added and many other categories of customers that are likely to be added, which were not earlier available to you? How should we think about the growth coming in from the HSBC channel? Praesh, again, I'll say the same thing that one quarter, we cannot make an assessment for the full year. But yeah, in terms of growth which we have seen in HSBC coming in the backdrop of increased number of branches, increased number of relationship managers also who sell insurance. I think some of these factors will help us in terms of growth. But yeah, for one quarter it is 40% growth, but overall, I think it will be in line with the guidance which we have given in the past also. Okay. Sir, the other question was on the distribution channel again. How well you are entrenched with wealth managers or wealth management companies, and do you think that non-par as a product is seeing incremental traction and whether we are getting some market share in those distribution channels? If I've understood your question correctly, it is not in context of HSBC only, it is in wider context that how we see non-par segment growing as part of wealth proposition. Right, sir. Yeah. See, overall, we feel that non-par actually offers a good opportunity for customers to lock in. Currently, if you look at the yields also, they are quite supportive. So we feel that non-par is a very strong proposition overall, if you look at. I feel that the contribution of non-par will continue to be where it is currently, what we are seeing. I think non-par as a segment will continue to do well. Okay. Last question is on the agency channel again. Yeah At what level of APE from the agency channel would you say you would be able to break even? I understand Tarun has guided that over the next few quarters and all the impact of the drain would come down. Just wanted to understand what level of APE do you think you can break even on this one and it will start contributing to absolute VNB? Currently, the overall thing which we have mentioned is that it will take us four years to be VNB positive. That is what we continue to stick to. Got that. All the best sir. Thank you so much. Thank you. Before we take the next question, a reminder to participants that you must press star and one to join the question queue. The next question is from Siddharth Rajpurohit from Systematix Group. Please go ahead. Yeah, good evening. Hope I'm audible. Yeah. Thank you for the opportunity, sir. You stated that the growth has also been driven by penetration in tier 1, tier 2 markets. Can you give more information on the same? Because I assume that you already would be present in the bank's existing branches. So can you give more detail on this penetration part? Sure. Praveen, maybe you can provide these details. If I look at our growth in tier 2, it is normal in terms of the percentage. 31% contribution comes from tier 2, and tier 3 contributes 22%, and tier 1 contributes 47%. How are we trying to deepen our penetration? See, what we have done is specifically, we have a category predictions net specifically in small, medium branches, which is more into tier 2 and tier 3. Then we are focusing specifically the penetration with respect to the protection plan. Do we also have a variable annuity product? If yes, then what will be the contribution in the annuity? Currently, we do not have a variable annuity product. Okay. We have an annuity product both on single pay as well as limited pay. Okay. Do you see any opportunity out there in this product? See, currently our annuity take-up is already at a decent level, but we are flexible. We are looking at it. If the market, it feels a need for it, we will build something. Okay. Can you give a full year VNB guidance? Full year VNB guidance, we are expecting to continue- VNB margin. Yeah, VNB margin we expect it to continue growing as we are. As Anuj mentioned that we would not like to give a range guidance because there is obviously volatility in the market and geopolitical condition. But yes, we are expecting to see growth over the year. We had, I think in the last call, we stated that because of say, uncertainty, industry growth could get slower. What is the assessment now? I think as of now with limited period which we have seen, we have seen decent industry growth. We continue to remain bullish on it, but it is very difficult to predict in this kind of market in terms of exact numbers. But yeah, last three months have been really good from the growth perspective for the industry. Okay. Thank you. Thank you for taking my questions and all the best. Thank you. Thank you. The next question is from Mohit Mangal from Centrum. Please go ahead. Yeah. Thanks for the follow-up, sir. I have a couple of questions. The first question is towards the branch activation, right? Last call you said that the branch activation improved to 54% for the entire year from 50% in 2025. The branch activation defines it at least 10 policies. Just wanted to know, we are 3 to 4 months into this year, how does branch activation stand up these days? Currently we are at 44% in overall and if I look at specifically the categorization of yearly and yearly which is your metro and semi-metro markets, there we are hoping around 79% and 62%. This is just the first quarter, as we mentioned that Canara is right now versus last year, it is flattish. We expect that this particular penetration and activation will increase over a period of time and we expect that we will show improvement in the branch activation. We share also some guidance around that what we are targeting by the year-end. As the year progresses, we will be able to meet that kind of activation. Wonderful. That's helpful. My next question is towards the persistency. I think the number of 13-month persistency improved, even the 60-plus months was flattish. Fair to say that surrender norms did not have any impact on us? You're talking about on the traditional side? On the overall side. Norms. Yeah. Yes. I think, yes, as of now again, little early for the true impact of the surrender norms to come through. But as of now we do not see any significant impact of that and our persistency improvement is also happening on the back of our ULIP business, which is also showing a significant improvement. Wonderful. Thanks a lot. Thank you. Thank you very much. That was the last question in queue. I would now like to hand the conference over to the management team for closing comments. Yeah. Thanks a lot. And once again, thank you everyone for being part of this call and as I said, as a company we are progressing quite well and we'll continue with this trajectory. So once again, thank you very much. Thank you very much. On behalf of Motilal Oswal Financial Services, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.