Q3 25/26

Jan 21, 2026

Summary

9M WPI rose 20% YoY and VNB grew 37%, while reported margin reached 19.7%. GST and Labour Codes affected results; management expects FY26 GST-related VNB margin impact of 185 bps after mitigating actions.

Good day, and welcome to Canara HSBC Life Insurance for nine-month and FY 2026 results quarter three conference call hosted by Motilal Oswal Financial Services Limited. As a reminder, all participant lines will be on listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then Zero on your touchtone phone. I now hand the conference over to Mr. Paresh Shah from Motilal Oswal. Thank you, and over to you, sir. Thank you, Dhanesh. Good evening, everyone. It's a privilege to host the senior management of Canara HSBC Life Insurance Company Limited. From the management, we have Mr. Anuj Mathur, MD, and CEO, Mr. Tarun Rustagi, CFO, Mr. Nitin Agrawal, Appointed Actuary, and Mr. Amit Jain, Head IR. I now hand over the call to Mr. Anuj Mathur, MD, and CEO. Over to you, sir. Hi, Paresh. Good evening to everyone. Anuj here. First of all, thanks a lot for joining for this call slightly late in the day, but thank you very much. Our results are now updated on the website of the company as well as both the stock exchanges. That already is there. We've also circulated our investor presentation containing key business highlights and happy to share further insights during this call. First of all, I would like to talk about some of the key developments in the insurance sector, and then I'll touch upon the company performance. If you look at this quarter, when I say this quarter, I'm talking of October to December period. Actually, we have witnessed good reforms with the passage of Sabka Bima Sabki Raksha, this amendment of insurance laws till 2025. This legislation is expected to accelerate India's journey towards universal insurance coverage by 2047 while unlocking significant opportunities for investors. A key development here is the increase in FDI limit from 74% to 100%, which is likely to attract long-term capital into the business and deeper participation in the sector. Alongside measures such as enhanced policyholder protection, simplified business processes, stronger regulatory framework, I think all these factors together provide a very compelling growth story over a period of time for insurance sector. If I talk about the macroeconomic front, India's GDP growth remains robust, underpinned by structural reforms implemented over the last few years. Reflecting this momentum, several institutions, including the Reserve Bank of India, have revised the growth forecast for the country to 7.3%, which reinforces the confidence which is there in the country's long-term trajectory. While the global environment continues to be marked by volatility and geopolitical tension, India's strong fundamentals and reform-driven resilience position, I think India is a very attractive investment destination. Within that, insurance is well poised for the growth. Some of the things which we saw towards the end of September in terms of GST involvement are presenting into positive tailwinds for the industry. Friends, now I would like to discuss about the company's business performance for this 9-month period, which ended on December 31, 2025. Talking about our overall growth, I am very happy, delighted to share that as far as our company is concerned, we have seen our individual weighted premium income, which we call as WPI, has grown at a healthy pace of 20% year-on-year for the 9-month period, which ended December 31. If I talk about quarter-on-quarter or year-on-year, Q3 of last year versus Q3 of this year, we have seen growth of 29%. This is led by sustained demand in the unit linked business, along with focused strategy on increasing protection and annuity. I will cover this aspect in a little bit of detail during the conversation. We continue to outperform both private players, which grew by 22% year-on-year, and the industry, which grew at 10% year-on-year during this period. We have actually outperformed the industry, and also the private players during this period. As I mentioned, the green shoots of GST led demand are now visible, with our retail protection business growing almost 3 times quarter-on-quarter. While credit life business continues to see healthy growth of 50% during the quarter. This is again a very positive development. We have seen good growth in our credit life business as well. We believe there is a structural uptick in this segment and hence expect that demand will continue to rise. Talking about our annuity business. Our annuity APE continued to grow at a healthy pace of 34% year-on-year for the 9-month period. Within annuity, we continue to focus on deferred annuity, which offers a more holistic solution to customers and profitable segment. This is something which we covered in the past also in terms of retirement as a segment, and we are quite bullish on it, and we have seen very good growth towards, in this quarter in our case. Talking about customer preference. We have seen that customer preference has been towards unit linked products, which has led to steady growth of 23% year-on-year for the 9-month period. Our unit linked products are not only ensuring wealth creation, but as we started offering riders along with the unit linked products, also providing policyholders to have enhanced protection cover through various options. This rider attachment is also helping us in enhancing our margins on unit linked products, and this is something which we have mentioned in the past also that riders, and I am going to talk about the overall protection strategy also in the next few minutes, is actually helping us in terms of our margins. Talking about renewable premiums, we have maintained strong momentum, recording a 34% year-on-year growth for the 9-month period, and 43% year-on-year for Q3. This translates into further improvement in our persistency across all the cohorts. Happy to share our 13-month persistency has risen to 85.6% from 82.5% in FY 2025. There is a very healthy increase here. Similarly, if I talk about 51st month persistency, it has improved to 59.5% compared to 57.57% in FY 2025. These consistent improvements underscore the strength of our customer retention, the quality of sales, the sales practices, and the long-term sustainability of our growth trajectory. Also, I would like to mention that we launched our agency business in October 2025, and it's actually building up. We're very happy with the initial success. There is early momentum, which is encouraging. As planned, we will scale up the agency branch infrastructure in a phased manner. We are on track, and this is something which we launched about three months back. Now let me take you through some of the key financial metrics. Our value of new business for nine months, so this is absolute VNB, stood at INR 413 crores. It has grown 37% year-on-year. Despite the GST impact, we have been able to increase our new business margin, which stood at 19.7% for the nine-month period, which ended on 31st of December, reflecting an almost 200 basis points improvement year-on-year. Some of the key factors which have resulted into this healthy margin, I am going to talk about. One, we have seen good growth in our individual protection business, and this is something where we are seeing benefits coming from GST. Clearly positive tailwinds coming into play, which is helping us to expand our individual protection business. And we have also seen a sustained growth in private life, something which I touched upon earlier also, that we are seeing good growth in our private life business, which is a profitable segment. Number two, higher rider attachment in the ULIPs. We have been able to grow our ULIP business. But at the same time, we have been able to attach protection riders with it, which has helped us in terms of our margins. And the company will continue with this strategy going forward also in terms of rider attachment. Number three, higher volumes, which aided in higher fixed cost absorption. Costs are, if I look at the insurance industry assets, majority of costs are fixed in nature. If you're able to scale up the business, you see a positive impact on VNB, and which is what we are seeing that because of higher volumes, this has aided us in our VNB margin optimization. Number four, longer premium payment term under ULIP business. That also we have seen that we are able to sell longer premium payment policies, which helps in margin enhancement. And then number five is the favorable movement from the yield curve. That is something which the entire industry has witnessed, and that is again a very positive thing. These were the key reasons for VNB optimization. Now, I'd like to also touch upon the expenses side in terms of how we have done on our operating expenses. We continue to rationalize our expenses, which is leading to a structural improvement in our expense ratio. Our total expense ratio for 9 months as of 31st of December 2025, has improved to 18.7%. This is an improvement of 130 basis points over the same period last year. That is on the cost front, that we have been able to improve our cost ratio. Talking about our embedded value, EV, Indian embedded value, that has grown by 17% year-on-year, reaching INR 6,858 crores with operating ROEV of 18.2% on rolling 12 months basis. That is on the embedded value front. Moving on to other financial metrics. If I talk about profit after tax for 9 months, ended on 31st of December, it stood at INR 92 crores, which is an increase of 8% year-on-year. This is after factoring in the GST impact as well as the impact on account of new Labour Codes. We have seen in this period, we were actually provided for the additional ask which was there on account of new Labour Codes of about INR 9 crores. So that has been factored in, and accordingly, we have calculated our margins. If we exclude our one-off impact from new Labour Codes, our PAT stood at INR 101 crores, which is an increase of 19% over last year. So INR 92 crores is factoring in this one-time impact, and if we adjust for that, then it is INR 101 crores, which is actually 19% increase over the previous year. Our solvency ratio currently stands at 191%, and we have also taken approval from our board to raise subordinated debt of INR 250 crores, which will help us to further boost our solvency. As I mentioned, our focus is on protection. For that, whatever is required in terms of raising subordinated debt, improving solvency margin, all of that is being done to support both the new business and overall channel expansion. Just to conclude, and then you can ask questions if any. We remain firmly optimistic about the long-term growth prospects of the Indian life insurance sector, underpinned by our robust growth trajectory and strengthening financial position. We expect individual protection to continue its upward trend. While bancassurance remains a key driver of our success, we are strategically investing in alternate distribution channels to ensure sustainable and diversified growth. I am going to stop here, and me and my colleagues are all here to take questions. Over to you. Okay. Thank you. So open it over to him. Yes. Thank you so much, sir. Ladies and gentlemen, we will wait for- We will now be giving the question and answer session. Anyone who wishes to ask a question must press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, I request you use hands-free while asking your question. Ladies and gentlemen, we will wait for a moment while the questions are assembled. Our first question comes from the line of Sukrit Dipatil from Eyesight Interest Private Limited. Please go ahead. Sukrit Dipatil, you may please proceed with your question. Sukrit Dipatil, please proceed ahead with your question. As there is no response from Dipatil, we will move forward to the next participant. Our next question comes from the line of Sarna Mukherjee from B&K Securities. Please go ahead. Hi, sir. Thank you for the opportunity, and congrats on a good set of numbers. Two, three questions from my side, sir. First of all, I just wanted to understand the math behind VNB because the roll forward that you have provided this quarter in terms of VNB between last year and same, so between 9 months and 9 months last year. There, broadly the impact of new Labour Codes and GST is coming to around INR 40 odd crores. I just wanted to understand, largely this would be pertaining to this, I think around INR 5, 6 odd crores was where last quarter, apart from that, around INR 35 odd crore would be pertaining to this quarter. In that case, if I were to add this back to INR 35 odd crores to your this quarter's VNB number, which is essentially very close to INR 100 odd crores, then would the core margin, and could the core VNB be somewhere around this INR 230, INR 235 odd crores? Would that be a right number to look at, sir? If you have any further questions, first you can share the questions, and then I will request my colleague, Oder, to respond to the VNB question. Sure. That was one question. In essence, I think that kind of highlights that maybe our core margin is closer to 23%. I just wanted to understand if my thought process is correct in this. Second is, in terms of the GST cost impact or whatever we have accounted for in here, how do we see this getting mitigated subsequently? What are you doing to do that if there are negotiations with distributors? How are we positioned during that process? If you could give some color on that. Second is, in case of your savings products. I could not find in the presentation a breakup between PAR and non-PAR. If you could highlight on that. Plus, I think the product mix that you have given in 9 months, FY 2026 is around, ULIP is around 60%. While I think in 1H, what you had reported the ULIP mix was for 1H, 50 odd percent. Am I missing something or if you could highlight why this dent is so significant. In terms of persistency, last question would be in terms of persistency. This improvement that we are seeing, is this an outcome of a change in product mix or would this be a function of your saying even within product categories also persistency improving? These are my four questions, sir. Right. Maybe, Nitin, you can first answer the VNB question. Yeah. Hi. The math on the VNB is that effectively from new Labour Codes till GST impact on VNB actually takes about an impact of INR 40 crores. That is what when you add it back to your current reporting margin of 19.7%, it roughly adds up to about 2%. Which is what the margin, so this margin of 19.7% would actually become somewhere around 21.7%. That is how the margin would play if you were to add back these two impacts. But Tarun- If I might interject once. Okay. Sir, most of this impact out of the INR 40 crores, INR 35 crores is this quarter, right? Last quarter you had reported around INR 5 crores to INR 6 crores in terms of GST impact. This is widely the impact. This is not a quarter impact because we are not doing a quarter-on-quarter walk here. This is a total impact so far since December 2025, what we have recorded. This is the overall impact. This is not a quarterly impact. Okay. Just to understand, sir, that this is driving not only for the new business, but also some changes that you might have taken into account of the back book written business. That is right. That is part of the management action where we have taken some management action. For the back book, only the renewal commissions would have gotten impacted. The initial commission would only have gotten impacted in this particular quarter. On the renewal side, we have actually taken management action and able to absorb most of it through discussion with the distributors. To that extent, the impact primarily even now and future will come from the initial commission itself. I just want to add on your question. So INR 21.7 is the resulting number or adjusted VNB. GST impact is the next quarter, which is JFM. We are expecting more impact on that because some of the actions which we have taken will take a full blown impact or effect will come next year. This is a permanent impact. Just making you understand that once this impact is there, it is resetting the baseline. So right now, until and unless there is a product change, complete change in the product construct, it is not possible to come back and get this margin back in the product. Overall, since you have covered and just mentioned and touched upon the VNB, the analyzed impact last time when we shared was 225 basis points without management action. What Nithin mentioned that one of the critical action which we have done and it is now effective, is agreement on absorption of the GST cost on the renewal commission side. That has been agreed and it is effective now, and therefore we are able to reduce. Along with that, some other actions like on the operating expense side, rationalization of expenses, vendor renegotiation. After doing all these things, we expect that this year we could see an impact of 185 basis points vis-à-vis 225 basis points, which we mentioned earlier. So the overall impact will be around 185 basis points on the VNB margin this year, FY26. This is on the VNB side. Another question you were having is on the GST action we have taken. We have already covered and mentioned to you major impact was benefits which we got was or we were able to counter the GST impact through the renewal commission adjustment. In terms of first year commission, we mentioned last time also, our product commissions are very reasonable with the distributors, so we are not expecting any change in that. There will be some more impact which will be positive. That will be coming from mainly on the expense rationalization rather than on the commission side. You also ask about the saving product and the participating product mix. So saving product mix is around 13% and participating is around 5% for this nine-month period. In terms of persistency, we are seeing the improvements in all LOB, not only one river change in the product mix. All the cohorts, all the line of business, which is participating, non-participating, unit links, we are seeing improvement in persistency and that has resulted into the overall performance in all cohorts. Improvement in all cohorts. Actually, efforts which have been paid by the team in terms of persistency improvement, which is showing in the numbers. It is part of our company strategy which is helping us in terms of higher persistency outcome. I hope we have answered all questions or anything else you want to know. No, I think, sir, broadly addressed and very clearly addressed, sir. Thank you so much. No, that is fine. Next question please. Thank you. Our next question comes from the line of Nishant Tavaney from Kotak Institutional Equities. Please go ahead. Yeah. Thanks for taking my question. Actually, just taking forward from the previous participants. One of the questions that was asked was the APE mix. First half was around 50% of ULIP and I think 9 months we have put in around 60%. I think the question was, is that the right reading and was ULIP significantly stronger in this quarter? Yeah. As I mentioned, we saw good demand coming in for ULIP and we saw that in terms of the volume spread which we had in this quarter. But if you see our past also in terms of our mix, within last year also we saw that in JFM period January, February, March, we had good credential mix which resulted in overall for the year's number being at number 2. This time again following the same strategy, we expect our traditional mix to improve from now onwards till 31st of March. We are launching new products also during this period, which will help us to improve our traditional mix. We expect that by the end of the year the ULIP mix should come down to about 55% and PRAD should move up to 45%. So, that's what we see in terms of our product mix. Okay. Got it. I think again on the margins front, mathematically if I try to calculate the impact of GST for this quarter, I know you called out the number of 2.25, and I think now we are saying that we will probably end the year with 1.8. But if I try to mathematically calculate the ratio for this quarter, it works out to around 2.8. Is it just a product mix change that is causing an impact or am I reading the numbers rightly? What I am simply doing is I am looking at the GST impact of 9 months minus first half, which works out to be the GST impact for third quarter divided by the APE of third quarter. I think what you need to do is because for the 3 months the business volume that we have seen, that has also resulted in higher GST impact because it is linked to the eventually commission and acquisition objects. So that is where the number that you are seeing is fleeting like that. But if you do the math will be done on a FYTD basis. On an FYTD basis, whatever the impact that we have seen in this quarter will actually have to be divided by the premium ATE that we have written for the full year. So it is not just the numerator, it is the denominator changes. I think probably what you are doing type of results in the you cannot just mathematically calculate that way, I think. So if you remember last year that was reported was based on a different ATE calculation. Whereas this year, obviously, because the entire impact for this quarter is coming for the business that has been written this year, this quarter, and before the volume is different that has been written higher. This is why the number that you are calculating is higher. But effectively for the full year, we do expect the number to be in the range of around 185 basis points after allowing for all the management action that we are intending to do. Sure. Sorry to be too and fro, but any specific reason why unit linked is so strong in the third quarter for you every year? Is it like you follow MBAT or any of that because of which unit linked is so strong for this quarter? I think it was mainly coming from one is the market is performing and reasonably well has performed. The market has performed. We saw that the demand for unit linked continues and we are maintaining that we are focusing on managing the balanced product mix, not focusing on or pushing any particular product. Unit linked demand continues in this particular quarter similar to last year. Therefore, the increase in APE on the unit linked side is observed. But just to take care of the margin side and just to ensure that this particular increase in unit linked demand is not impacting our margin, a couple of action which Anuj mentioned and that will continue. If you actually see the protection business also has gone up this quarter. This quarter has seen improvement in the protection business both on individual side and group. Along with that, the rider attachment is almost touching 90%. 90% of the policies we are able to attach the riders. If you recall, in the last call we mentioned that right now we are only attaching one rider. As we are launching more riders, more variants also, we are expecting that the attachment of the riders will improve in terms of number of riders and the profitability. What we also need to see is this is also giving one more advantage to the policyholder also, that they can take a higher coverage by paying a small amount of premium. It is a win-win situation for both policyholder and for also the company in terms of improving the margin. Just to add to what Tarun just mentioned. I think cost base is also very important. If you are able to manage your cost well, if your expense ratios are low, which you have seen in case of another insurance company, that if you are managing your business very efficiently, you can generate higher margins even if your unit component is higher. I think we should not take it that unit is a bad thing. I think as long as company can manage the margin, can meet the customer outcome, I think it is a good option to have. We believe that because of our cost structures, because of other efficiencies we have in our business, this is actually a good business along with focus on protection as Tarun mentioned, riders, retail protection is actually helping us to grow our market share also and at the same time take care of the margin. Just one, again, if you could give some flavor in terms of the momentum that we have seen in protection. How do you see that going ahead? Do you see this kind of moderates a bit? Do you see it fizzles out? What is the thought process for the fourth quarter? Will protection continue to show similar growth? Or how should one really think about it? Yeah. I mean, the ratio of protection has gone up from 4 to 7, so. Yeah. Q3 versus Q2, obviously the base was lower. We will see that momentum is continuing and we are targeting similar kind of a sale. Just to give a direction that we are targeting to touch overall double-digit number in terms of overall protection, which includes group also. Over a period of time we are expecting that our protection business will be double-digit contribution in the overall sales. That will be contributed equally from the individual protection and the group side of our protection. It will help us in terms of enhancing the margin further on this area. If I can ask, how does the current 7% break between group and individual? It's almost 50/50, almost 4% and there. Which used to be significantly tilted towards group earlier. But this year we have seen a momentum on the individual protection along with the significant growth on the group protection. Therefore, absolute amount if you see in terms of percentage, if you see it's still 7%, but absolute amount is almost three times of what we saw in last quarter. So that absolute amount is helping us in terms of enhancing the margin. Got it. Just finally, last one is on the hedging side, any change in the hedge coverage or Any update versus last quarter? Yes. We have, as last time also we mentioned, we are consciously working on the hedge ratio. We have increased the hedge ratio further from last time, and that is also helping us in our interest rate sensitivity that we have been showing. That is moving in the right direction. Sure. Thank you very much, and all the best. Thank you. Thank you. Our next question comes from the line of Sankeet Goheraj from Avendus Spark. Please go ahead. Yeah. Thank you for the opportunity. Sir, maybe it is kind of a similar question. There is kind of seasonality in Q3 when it comes to growth because one year's growth was 11% and 9 months is 22%, which means Q3 is 37%. I think it was a similar trend in 2022 last year. First, just wanted to understand why there is kind of a seasonality to Q3, any specific reason? It is kind of a thing which will continue forever, given the business is designed or distribution channels are designed in that way. If you can give a bit of color there, it will be useful. Right. Yeah. Sankeet, Anuj here. Yeah. See, this is part of sales strategy, that every quarter or every month, you will try to do something differently. We actually have been doing this, that in certain periods, we actually focus on a particular segment. This is what has happened in 2022-2023 that we came up with an NFO, and that actually helped us in terms of getting more business. That is there for this current period. For the next year, again, we will create our seasonality based on what we think is appropriate as per the market and as per the customer need. Yeah. We try to kind of spread it much more kind of, I will say, over the quarters rather than in a particular quarter. As I mentioned, it is part of sales strategy that you decide, okay, in certain periods, we will try to focus more on top line and then subsequently we like to focus more on the margins and try to grow it. This was part of the sales strategy. Every year, we will change our sales strategy as per market needs. Okay. Understood. The second question is probably on the GST thing. The way I understood is that for the 8 or 9 days of the business in second quarter, the annualized impact was 225 basis points. In the third quarter, which for 9 months looks like 160 basis point. If I want to annualize only 3Q, impact on the margin due to GST, if you can quantify that number, whether 160 will translate into what kind of a number? If you annualize that for the full year, it might be stopping at 185 compared to 225 you started at 9 days of 2Q business. No, actually 225 was not for the 9 days business. 9 days business for September, till September, the impact was 30 basis point because of- No, annualize, I said. Annualize that 9 days business. If you continue to do in that way, it would have been 225. It was not the linear annualization because there was some product mix, seasonalization, and also our renewal book and some of the action we had taken. So we did not consider that. That's why it was not straightforward annualization of that. So that number, when we calculated without management action, because that point in time, we were in the discussion with distributors and also with vendors, and also working on how to rationalize cost. It was expected to impact our VNB margin for 2026 by 225 basis points. But after doing the action and rationalization of operating expenses, renegotiation of some of the contracts with the vendors and also important thing which we are able to do is work on the renewal commission side, which has a longish impact because it is going to have a positive impact on the MVA value also. We are able to reduce this 225 basis annual impact to 185. We expect that by year-end, we will have this impact. Obviously there are some few more actions which are work in progress. We have not counted that. There is a possibility that it might be plus/minus 5% here and there, five basis points or 10 basis points here and there. But this is what our current calculation says that, when we start a new year, which is at FY27, this impact would have been taken care and then obviously this will be a fresh start. Understood. Sir, unlike a few peers which reported impact of GST only for the incremental business and the renewal impact for the business which was done from April 1 to September was directly adjusted in the EV. We did not do it in that way, right? We rooted entirely through the VNB of the current year. Is that the correct understanding? We did that. In the EV walk which you saw, there was an impact of around INR 20 crore, which was mentioned, and that was actually taken care of all the invoice books till September 30. We took that impact, and that impact is expected to maybe five to 10 basis points. Additional impact can come because there is some renewal book with some of the distributors which might be having some GST impact continuing. But we are not expecting that to go significantly. So that impact has already been taken. Sorry again. My understanding from the way you explain, it seems that the 160 basis points impact in the full year margin is only for the business done from last week of September till last week of December. That is the way I am understanding, right? Yes. That impact, which is INR 160, for the full year it should stop at INR 185. Yes. Okay. Understood. The next question I had was that, sorry, Mr. Kaushal, on protection when you said 4%, you mean to say out of the 7%, 4% is individual or group? Yeah. So 3.5 and 3.5 kind of a 50/50 mix is there between individual and group. Okay. In credit life, just I want to understand that it is predominantly sitting in Canara and what is our attachment rate for the disbursements done in Canara Bank or HSBC Bank in that sense? Yeah, major is Canara, and we are seeing our attachment rate actually going up, hovering in the range of about 45%-50%, is what we have witnessed so far. Lastly, Nitin, if hypothetically assume if you fully hedge your book, say, at some point in time, then given the hedging cost, it will naturally have impact on the margins. Just wanted to understand, hypothetically assume by end of the year, if your intention is to fully hedge the book, what likely impact it will have on the margin? Actually, the impact is quite immaterial. From the hedging cost perspective, we have seen that the cost impact is quite immaterial. As I mentioned earlier also that the hedging has also helped our interest rate sensitivity and now we are heading towards getting closer to zero. Okay. Fine. I understood that one. Lastly, on bancassurance, can you give the mix on this 93% of the total APE in WPI you mentioned is bancassurance. Can you break down that 93% or 100% of the bancassurance into Canara, HSBC, and other banks? Yeah. Canara is almost contributing 75%, and HSBC another 12%. The RRB shares have gone down because of various structural changes happening with that particular channel. So that is around 5%. So that gives you a total bancassurance of 92%, 93%. Understood. Yes. That is sufficient. Thanks for your answers. Thank you. Next question comes on the line of Vinod from Nirmal Bang. Please go ahead. Yeah, thank you for taking my questions. Most of the questions I had were answered. Just wanted to know on this channel mix, what proportion of your business which is coming from Canara Bank is say non-Tier 1, as in say Tier 2, Tier 3, and so on? This is specifically for business from Canara Bank. On HSBC, I assume most of it will be from Tier 1 cities. Is that understanding correct? HSBC operates primarily in Tier 1 cities. Canara, just give us few minutes, we will just tell you the exact number in terms of how much business has come from Tier 1 and how much business has come from Tier 2 and Tier 3. Just give us few minutes, we will just come back to you. Yeah, sure. That was the only question I had. Thank you. Bye. Meanwhile, should I take the next question? Yeah, please. We will provide that information offline. Okay, no problem. Our next question comes from the line of Sugri Sithipathu from ICICI Centurion Private Limited. Please go ahead. Good evening team. I have two questions. My first question is, with premium collections growing strongly and total income yearly double, what specific initiatives are being taken to sustain this momentum over the next 12 to 18 months? How do you see Canara HSBC Life strengthening its distribution network and digital channels to capture a larger share of India's life insurance market? That's my first question. I'll have my second question after this. Thank you. You see, persistency is an outcome of sales quality and there's lot of focus in our company on sales quality. Persistency, honestly speaking, is a lag indicator of sales quality. Specifically, we have made extra efforts to reach out to the customers, provide them additional options to pay premium, regular follow-up with the customers, and also an outcome of good performance on the fund performance side. All these things have helped us to improve our persistency and I think some of these things are sustainable over a period of time. But yeah, after touching the current persistency which we have seen, which I've talked about, of close to about 86% on 13 months basis. I think there will be improvements, but yeah, over a period of time it will be more gradual. We have moved from 83.4% previously to 85.6%, but we are conscious of sales quality and we feel that persistency should improve from here, but the percentage increase could be lower. That's on the persistency front. Anything else you want to know on persistency front? Otherwise, we'll come to the digital part of it. No, you can complete. Okay. All right. In fact, if you look at our persistency across cohorts, it has improved. It is an outcome of efforts being made and customers being happy with their product outcome and all that. Now talking about, I think your question was, if I've understood correctly, is that how we are going to grow business using digital means, right? Am I correct? Correct. Yeah. Actually for us, this is something which we clearly see as a big opportunity to optimize the business. In fact, in our IPO roadshow also and also separately in the last investor call also, I remember we had mentioned about what we are doing using the bank's digital assets. We see a big opportunity there because Canara Bank is actually focusing a lot on digital assets and we clearly see an opportunity in terms of reaching out to the customers who are otherwise not coming to the branches. Internally, there is a clear strategy in terms of how we can use digital assets, how we can use data analytics to reach out to these customers who are otherwise not visiting the branches. We think that over a period of time, this is a big opportunity which is in front of us to leverage on digital assets, both through ourselves as well as the digital assets of the bank. That's how we are going to focus upon. Separately, our digital business, which has Policybazaar, our direct website sales, there also we are seeing good traction. Our products are quite competitive and we are seeing a good amount of protection business coming through that. Thank you. My second question is to Mr. Tarun Rastogi. With net profit slightly lower despite strong revenue growth, how are you approaching cost discipline and capital efficiency? Could you outline how the company plans to balance investment in technologies and distribution with maintaining profitability as premium inflows scale further? Thank you. Yeah. So see, in insurance business, as you are aware that the profit, it is a statutory profit, depends on what kind of a product you are selling and generally there is a strain. There is a strain which is there. As the product mix will shift from one, let's say there is a product which we are able to sell which is having a lesser strain, you would see a higher profit emerging during that particular period. Also as our renewal book is increasing and improving, there is a renewal profit which are coming now in the books. In terms of investment to technology, that we will continue to maintain it. The answer to continue to maintain and continue to focus on technology and other initiatives is to grow the business, generate more profit from that. There are some cost levers which we have pulled, which is helping us. You can call it some kind of a discretionary cost also. Those levers we are able to pull and therefore we are able to maintain or reduce the cost and that will be a long-term cost saving. Then again, the technology must be invested. Couple of years back, if you see our technology investments or spend has been there for quite a few years. Those were basically to automate some of the processes and we have started seeing the benefit of those processes or those automations. That is bringing more efficiency and better cost numbers for us or operating expense numbers for us. These are the few things which we are doing and we think these are the sustainable saves which we are generating. We will continue to operate and invest in technology and some other initiatives which might have some impact in very short-term periods, but medium to long-term periods, it is going to benefit us from the efficiency perspective. Thank you for the guidance and I wish the entire team best of luck for the next quarter. Thank you. Thank you. Ladies and gentlemen, anyone who wishes to ask a question would press star and one on their touchtone telephone. Our next question comes on the line of Prayesh Jain from Motilal Oswal. Please go ahead. Praesh, you may please proceed with your question. Yeah. Good evening and congratulations on numbers. Just on HSBC, they were allowed to open new branches. Where have they started opening those new branches and what are the other layers on HSBC which are not available to us and can start coming to us down the road? Right. They have already launched four new branches. They are operational. In fact, some business has also started coming from these four new branches which they have opened in the last month or so. They are also planning to open another 3 to 4 branches in the next 3 to 4 months. So additional business will come from these branches. So that is in terms of new branches. So, they are on track in terms of launching new branches. So that is there. Now in terms of other business opportunities within HSBC, one is on the GIFT City where we have a branch now. We have a product which is there available, operational. HSBC is just waiting for their distribution license to come from IFSCA and once that starts, that is another revenue stream which we feel in terms of because HSBC has very good NRI base. That is where we feel that will also help us. Plus, the bank is also deploying additional relationship managers because in HSBC it is a pure bancassurance model wherein bank is deploying their relationship managers to source business. So there is good focus in terms of increasing penetration within the premium segment. And the other channels are sub-channels within HSBC, sub-channels in terms of they have this ultra HNI segment, which is private bank. So there also they are focusing, and we expect business to come from that segment. Bank is also quite aggressive now in terms of new customer acquisition through EBS, employee banking solutions. So we see that these are the few avenues through which we will be able to expand our business within HSBC. Sorry. Thanks for that clarification. Just on the VNB margins. So had this GST impact not been there, we would have been somewhere about 20%-21% margin. Is that a fair assumption? Yes, that is correct. Right. Now, to top on to it, you have just started spending on agency. Is there any cost related to agency during this quarter because we had launched in October? Has that put any pressure on margins in this quarter and possibly cloud extent scale-up from here on that channel to kind of put pressure on margins? This was very marginal, so this has not really had any major impact on our margins for this quarter. Yeah. Yeah, but how do we see this scaling up from Q4 onwards and then flowing on into FY 2027? Krish, this agency business like Anand mentioned in the opening commentary that we will be scaling up in a phased manner. We are very, very carefully expanding this channel, going to expand this channel. You are absolutely right, there will be some strain on the margin in the initial period. That is being taken care and by couple of things which we are working upon and some of these things have started giving us results. One is on the increase in the protection business overall, which I mentioned that we are expected to touch double digits. So that is going to help us further improve the margin both on the individual side and on the group side. The second thing which is also helping us in terms of improve the margin is on the MUT side which is also growing at a reasonable growth, showing a reasonable growth, and continues to have because there is a specified segment which we have identified within HSBC and Canara where this product is suitable. The third thing is with the scaling up of the business and the volume. Some of the operating efficiencies and the lever will kick in and that will also help us in terms of improving the margin. Within unit link versus this current year, next year also the riders strategy is going to continue and that is also going to help us in terms of improving the margin. These three things along with managing the cost and improving the top line will help us to improve the margin from the current level, which is going to help us in terms of absorbing some of the strain which will come from the agency channel. Yeah. The reason I asked that question was the fact that, Tarun, when we were discussing these things at that time, we didn't have the GST thing coming in. Now there is an additional, and you mentioned that it's a rebate of the VNB margin trajectory. Does that in any way kind of alter your plan for agency channel scale-up or the methodology in which you will scale that up? Not exactly because what we were earlier, when we were talking about these things, we were not expecting that individual protection is going to increase and help us in terms of improving. Overall protection business you mentioned and that was mainly coming from the group side. Now the similar and significant or equal contribution is also contributed by individual protection and we have a very, very competitive product giving us good margin and also there is a good uptake which we have seen in last 3 months period. That is expected to continue. That will give us a further uplift in the margin, which will help us in terms of absorbing some of the GST costs. At this point in time, yes, there is a rebate from the VNB margin, but if you look at from the medium to long term perspective, we are expected to continue on that trajectory which we discussed earlier. Got that. That is it from my side. Thank you so much. Thank you. Thank you. As there are no further questions from the participant, I would like to hand the conference over to the management for the closing comments. Thank you and over to you, sir. Great. Thank you very much for participation in this call and if there are any further questions then Amit from our investor relations is available to answer queries. Thank you very much once again. Thank you. Thank you, sir. On behalf of Motilal Oswal Financial Services Limited, let's conclude this conference. Thank you for joining us and you may now disconnect your lines.