Cholamandalam Financial Holdings Ltd — Q4 FY26

Cholamandalam Financial Holdings Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=5wI-a80oueo Published: 5 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the Chola Mandalum Financial Holdings Q4 FY26 earnings conference call. As a reminder, 0:11 11 seconds 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 0:19 19 seconds you need assistance during this conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. 0:31 31 seconds I now hand the conference over to Mr. 0:33 33 seconds Park Jarivala from DAM Capital. Please go ahead. Thank you. Uh good afternoon everyone. 0:40 40 seconds Welcome to the queue for FIR26 earnings call of Chola Mandalam Financial Holdings Limited. From the 0:48 48 seconds management we have Mr. Sraran Rangar Rajan, non-executive director Chola Mandalam Financial Holdings, Mr. N 0:55 55 seconds Ganesh manager and CFO Tula Mandalam Financial Holdings Mr. Li Surya Narayarayan managing director Tola 1:03 1 minute, 3 seconds Mandalam MS general insurance Mr. Rajiv Kumar Swami managing director designate Tola Mandalam MS general insurance and 1:13 1 minute, 13 seconds Mr. Santos Pande CFO Chola Mandalam MS General Insurance I'll hand over the call to the management for the opening 1:20 1 minute, 20 seconds remarks post which we can open the floor for Q&A. Over to you sir. 1:25 1 minute, 25 seconds So good afternoon to all of you and uh come to our earnings call. I'm um we 1:34 1 minute, 34 seconds have our colleagues. I'm happy to introduce uh Rajiv Kumar Swami who is 1:41 1 minute, 41 seconds well known in the industry who would uh take over from Surin who has done a 1:48 1 minute, 48 seconds exemplary job uh bringing Chola Chola general insurance to a creditable 1:56 1 minute, 56 seconds level and he's also kind enough to address today's earnings call and u 2:03 2 minutes, 3 seconds since you have got already covered very well Chola finance site. This call will largely focus on the Chola general 2:11 2 minutes, 11 seconds insurance performance side and then there will be an opening remark by Suri and then later on we'll open up for Q&A. Thank you. 2:25 2 minutes, 25 seconds Good afternoon. Um this is Surin Naray and welcome to the uh earnings conference call. I'll now proceed with 2:32 2 minutes, 32 seconds the overview of the performance of Chols for the quarter and year ended March 26. 2:40 2 minutes, 40 seconds In line with the one byN method of accounting and reporting of GDPI with respect to long-term non-motor business, 2:47 2 minutes, 47 seconds Chola MS recorded uh GDPI of 20048 crores for Q4 and 7,762 crores for the year ended March. 2:59 2 minutes, 59 seconds As you are aware, July suffered the loss of crop insurance business consequent to the retender which impacted the quarter 3:07 3 minutes, 7 seconds 4 GDPI by 124 crores and over 590 crores for the year 3:14 3 minutes, 14 seconds with the base effect of 1 by N reporting coming to an end as at end of H1. The growth in non-crop business is visible 3:23 3 minutes, 23 seconds from H2 together with reinsurance inward business. Uh the GWP for quarter 4 was 3:30 3 minutes, 30 seconds 2349 crores and 8,94 crores for the year. The premium received in advance on 3:39 3 minutes, 39 seconds long-term non-motor products for the year was 410 crores with a market share of 3.3%. 3:47 3 minutes, 47 seconds In motor, the principal line of business, the market sharehod 5.25%. 3:53 3 minutes, 53 seconds Within motor, the company for the year had a composition of 49% 3:59 3 minutes, 59 seconds plus in cars, 40% plus in CVS and about 10 12% in two wheelers. 4:07 4 minutes, 7 seconds The company for the year secured about 24% of its total motor premium from new vehicles which proportion was uh higher 4:17 4 minutes, 17 seconds in cars uh moderate in CVS and the lowest in two wheelers. The company has adopted a cautious stance with respect 4:26 4 minutes, 26 seconds to growing the two-heer book particularly new vehicles in the context of absence of motor third party premium increase over the last four years. 4:36 4 minutes, 36 seconds The EOM for Chols for the full year stood at 30.46% which measured without 1 byN works out to 29.12. 4:48 4 minutes, 48 seconds As you are aware, FI26 was the last year of the glide path. The company complied with the requirements on one basis. Uh 4:57 4 minutes, 57 seconds the company is amongst the top three players in terms of the operating expenses component of the EIN. 5:05 5 minutes, 5 seconds The claims ratio for Q4 and the year were at 81.3% which is higher than the levels in the corresponding periods of the previous 5:13 5 minutes, 13 seconds year. The motor OD claims ratio has risen for many players in the industry and has been rendered higher for Chols 5:22 5 minutes, 22 seconds reflecting the competitive intensity in the industry. 5:26 5 minutes, 26 seconds OMS continues to be prudent and conservative in its provisioning for motor TP losses with the level of 5:33 5 minutes, 33 seconds provisioning of 10% higher than many of its peers. 5:38 5 minutes, 38 seconds Recognizing the rising severity in court awards in third party claims and the continued absence of increase in motor 5:45 5 minutes, 45 seconds third party premium sol stepped up its uh motor third party reserving in the year. This has rendered the overall 5:52 5 minutes, 52 seconds company claims ratio higher than the previous year by about 2.71%. 5:59 5 minutes, 59 seconds Operationally, our proportion of compromised settlements in motor third party claims continues to be robust. 6:07 6 minutes, 7 seconds Consequently, the combined ratio for the year was at 115.2 6:13 6 minutes, 13 seconds and 112.2 without the 1x effect. The combined ratio of 112 includes the impact of the motor third party 6:21 6 minutes, 21 seconds reserving augmentation. The investment corpus as at end of the year was about 19,50 crores uh without the fair value 6:31 6 minutes, 31 seconds change. The company had a marktomarket gains of 137 crores in equity and a 6:38 6 minutes, 38 seconds deficit of 112 crores in the debt portfolio as at the end of the year. As you're aware, the marktomarket gains 6:45 6 minutes, 45 seconds position in equity was rendered lower due to the market meltdown from the geopolitical uncertainty. The position 6:54 6 minutes, 54 seconds has reverted to a level of about 302 crores as of yesterday. 7:01 7 minutes, 1 second The uh PBT for the year was 454 crores. 7:06 7 minutes, 6 seconds After absorbing labor code related graduity provisioning and a small marktomarket impairment provisioning on 7:13 7 minutes, 13 seconds equity investments, the return on equity for the year on average net worth was at 10.4% 7:21 7 minutes, 21 seconds and the 3year average roe pegged at about 14.4%. The solveny ratio was at 1.96 times. 7:30 7 minutes, 30 seconds uh the board of the company after a careful evaluation has decided that the company will seek forbearance for 7:38 7 minutes, 38 seconds transitioning statutory accounting to INDAS from April 1, 2027. 7:44 7 minutes, 44 seconds This is to ensure a calibrated transition. It is fairly clear that there would be a significant drop in combined ratio in the year of adoption 7:53 7 minutes, 53 seconds but would level out over the years. Uh as was mentioned by uh Mr. Rashidan, I'm 8:00 8 minutes happy to welcome Rajiv, an industry veteran who will be taking over from me effective June 1st in steering the 8:09 8 minutes, 9 seconds company forward. My heartfelt thanks to all the analysts for their incisive queries and comments which has kept our us on our toes in all our interactions. 8:20 8 minutes, 20 seconds We'll now be happy to take any questions that you may have. 8:25 8 minutes, 25 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 8:33 8 minutes, 33 seconds star and then one on the touchstone phone. If you wish to remove yourself from the question queue, you may press star and then two. 8:42 8 minutes, 42 seconds Participants are requested to use handsets while asking a question. 8:48 8 minutes, 48 seconds Ladies and gentlemen, we will wait for a moment while the question assembles. 8:52 8 minutes, 52 seconds Again to register for a question, please press star and then one. Now 9:10 9 minutes, 10 seconds participants, you may press star and then one to ask a question. 9:22 9 minutes, 22 seconds Your first question comes from the line of Sankit God from Aventus Park. Please go ahead. 9:29 9 minutes, 29 seconds Yeah. Yeah. Thank you for the opportunity. Uh sir my my first question is is more on growth. Uh uh so we we we 9:38 9 minutes, 38 seconds we uh the G GDPI actually the direct premium has declined in the current year. GWP growth is predominantly because of the reinsurance acceptance. 9:46 9 minutes, 46 seconds Um now given we are UM compliant uh uh will will the approach to the business 9:53 9 minutes, 53 seconds going ahead uh will be uh little different whether whether the focus will be more on direct business uh uh and and 10:02 10 minutes, 2 seconds if if that is the case which lines uh will will you will try to recover back uh a kind of market share to to deliver 10:10 10 minutes, 10 seconds growth in in in the next year. So that that's my first question sir. 10:17 10 minutes, 17 seconds [clears throat] 10:17 10 minutes, 17 seconds Yeah. So thanks uh Shankit. As I mentioned in the call, we were impacted by the loss of crop of about 598 crores for the year. 10:28 10 minutes, 28 seconds Yeah. 10:28 10 minutes, 28 seconds And that was the last year of the tender and as we are all aware government of India's guidelines are expected any time 10:36 10 minutes, 36 seconds and the next cycle of tender across the country will open up. Chola MS will be participating in the crop business. 10:44 10 minutes, 44 seconds U across the states and therefore what was lost will definitely we certainly hope to get 10:52 10 minutes, 52 seconds it back in the crop side and since we've had a good experience over the years on the direct side of crop 11:00 11 minutes business we should be looking at even growing that piece of business and and and any other line of segment 11:07 11 minutes, 7 seconds like like maybe you you chose to slow down your motor segment a bit especially the only part to to any any revisit to 11:15 11 minutes, 15 seconds that business uh given given naturally we are I mean honestly that was the reason why I said even compliant whether whether we'll be if crop come back and 11:23 11 minutes, 23 seconds and and whether we will do the lines which were traditionally very strong uh in in a way which uh we used to do in 11:30 11 minutes, 30 seconds the past clearly see the the other aspect of the topline drop was also the conscious 11:38 11 minutes, 38 seconds reduction in two wheeler you would have seen the percentage drop over a period from 19.6% we have just come down to 11:46 11 minutes, 46 seconds about 10.6 and the quantum of two wheeler volume reduction was at least at least over uh 11:53 11 minutes, 53 seconds 225 crores last year. cooked while that part of the two-heer portion uh may 12:01 12 minutes, 1 second moderate to an extent further but you are not going to see uh the similar level of drop and you will see that we have been growing in the car side 12:09 12 minutes, 9 seconds steadily continuously and the commercial vehicle book is now is fairly stable at about 40 to 42% of the overall motor 12:18 12 minutes, 18 seconds composition so I think there we will continue to grow uh our market share it's not that we have lost in uh in the 12:27 12 minutes, 27 seconds motor it's still at about 5.25 despite the um drop and conscious drop in two wheelers. So that will continue to grow 12:35 12 minutes, 35 seconds and as a strategy we we our market share if you had to look at the two segments of OD and TP our market share in the OD 12:45 12 minutes, 45 seconds has been growing up and TP has been uh moderated in fact we lost about half a% 12:53 12 minutes, 53 seconds market share in TP and uh grew the motor OD market share to about 5.89%. 13:00 13 minutes So this is the tweak that is happening in the motor side and uh we also have plans to grow the commercial uh space. 13:10 13 minutes, 10 seconds We have secured a good level of reinsurance capacity during the year u with favorable terms. Of course the 13:18 13 minutes, 18 seconds underlying pricing component in the commercial side is not something that we would have liked but from our position 13:25 13 minutes, 25 seconds from our uh smaller uh market share position there is certainly scope to grow and diversify our book on that front. 13:35 13 minutes, 35 seconds Understood sir and and sir the second question is is from roe perspective see see when when we chose to slow down our 13:42 13 minutes, 42 seconds tp sorry two bill business our kind of a leverage uh which used to be 6 plus x uh 6.2 to say last year it has dropped to 13:50 13 minutes, 50 seconds 5.5 on on top of it our combined also deteriorate maybe maybe there is a bit of conservatism there with respect to motor TP but still still it is higher 14:00 14 minutes compared to the last year so so so if we I'm just asking if if if we choose not to do two wheelers or or not to scale up 14:08 14 minutes, 8 seconds the two wheeler business leverage remaining lower then then heavy lifting of improvement in the roe will be driven more by combined ratio improvement so so 14:18 14 minutes, 18 seconds just just wanted to understand from that perspective um if if leverage remains at 5.5 um uh 14:25 14 minutes, 25 seconds honestly your your combined on on the IAP basis should go to closer to maybe maybe 108 109 to deliver 16 17% so so so 14:35 14 minutes, 35 seconds just want to understand that part of bit where where the liver will come from uh in in in improvement in the core 14:44 14 minutes, 44 seconds see actually if you look at it uh the current year in terms of the claims ratio I admit has been bad for us. uh 14:51 14 minutes, 51 seconds more in the OD side see TP is something what we are doing uh prudently there and that reserving it's not that there is a 14:59 14 minutes, 59 seconds loss in cash flow it is still the cash is still with us it's only an accounting provision that we have made but the OD 15:06 15 minutes, 6 seconds is where while it has risen as I mentioned in the opening remarks for everyone ranging between 5 to 7% for us 15:15 15 minutes, 15 seconds the delta has been about 10 so and that is an area of correction uh for which we have already commenced the 15:23 15 minutes, 23 seconds necessary activities to bring down the uh loss ratio. Uh over a period of last 15:29 15 minutes, 29 seconds 2 to 3 months we have seen about 7 to 8% improvement in the uh price realization for us which gives us the confidence 15:37 15 minutes, 37 seconds that over the next 6 months we should start seeing the uh reduction in the uh 15:43 15 minutes, 43 seconds motor loss ratio. So that uh given the proportion I also talked about an increase in 15:51 15 minutes, 51 seconds market share with respect to the OD side that should help us in bringing the combined ratio back to a controllable 15:59 15 minutes, 59 seconds level and to look at a an ROE uh which is uh towards 16:10 16 minutes, 10 seconds Okay. Okay. Understood sir. And and lastly lastly on on on long-term plans uh just just want to understand your 16:19 16 minutes, 19 seconds strategy there uh incrementally uh whether it will be function of how um will change the new maybe it's spoken about how the new reg new regulations 16:28 16 minutes, 28 seconds will come um I just just want to understand a bit of their given given we were very typically strong player in the long-term plans 16:36 16 minutes, 36 seconds see in the long-term side we continue to do the level of business that we were always uh doing which is why you find 16:45 16 minutes, 45 seconds that uh in the information deck that the uh premium received in advance position that we carry in the balance sheet in 16:52 16 minutes, 52 seconds the non-motor side is only gone up. So I think as at March we have something like about uh 570 crores or so uh is what we 17:02 17 minutes, 2 seconds are carrying which has moved up from 250 crores as at the previous uh March 25. So there we continue to stay 17:12 17 minutes, 12 seconds focused notwithstanding the fact that we absorb the costs up front and uh we do not feed the long-term on reinsurance. 17:22 17 minutes, 22 seconds So there is some value that is getting built into the balance sheet uh which is real. 17:28 17 minutes, 28 seconds Understood sir. And and lastly last one point if uh though we have taken four year ends uh if we officially the in fi 17:37 17 minutes, 37 seconds will adopt officially ifs uh every player will do so. So, so they whether whether there will be some uh a 17:44 17 minutes, 44 seconds different approach to the reinsurance uh um uh business or reinsurance uh exceeding of the especially the retail 17:52 17 minutes, 52 seconds line of businesses or or long-term line of businesses uh uh so so that uh uh so that the benefit what typically every 18:00 18 minutes insurance companies gets on on reinsurance commissions inward uh to with with respect to the long-term plans might change in D accounting. So, so 18:08 18 minutes, 8 seconds just wanted to understand whether whether it will meaningfully change uh the uh reinsurance strategy especially on the retail lines I understand that 18:16 18 minutes, 16 seconds wholesale lines uh it's it's it's more of about risk management but but from retail lines point of view I I just wanted to understand that please see you 18:24 18 minutes, 24 seconds should by from the numbers you will understand that uh intrinsically cholas is a company where retention levels are 18:31 18 minutes, 31 seconds high so our retail retention um on a weighted basis would be somewhere are at about uh 78 plus 18:40 18 minutes, 40 seconds even the overall including the blended commercial and retail is at about 72. So it is at about 78 plus and uh even when 18:51 18 minutes, 51 seconds FRS comes with the DAC coming in on both both the commission and the reinsurance commission side uh my belief is that 18:59 18 minutes, 59 seconds it'll only benefit the net position will only be a benefit. 19:05 19 minutes, 5 seconds Uh understood s perfect. Uh that's it for myself. Thanks. Thanks for the answers. 19:12 19 minutes, 12 seconds Thank you. 19:14 19 minutes, 14 seconds A reminder to all the participants, if you wish to register for a question, you may press star and then one. 19:40 19 minutes, 40 seconds participants to register for a question please press star and then one. Now 19:50 19 minutes, 50 seconds the next question comes from the line of Panti Chavla from Ask. Please go ahead. 20:01 20 minutes, 1 second Sir, we are not able to hear you clearly. You are sounding. 20:18 20 minutes, 18 seconds Yeah. Am I audible now? Is it clear? This is this is much better sir. Yes. Thank you. 20:23 20 minutes, 23 seconds Yeah. Thank you for giving the opportunity sir. Uh one question as you uh rightly said next year we will be 20:29 20 minutes, 29 seconds moving towards IFRS. So if I take the current number of FI26 on claims ratio as 81.2%. 20:39 20 minutes, 39 seconds While going towards the IFRS similar number what will be the co similar number in IFRS 20:46 20 minutes, 46 seconds accounting per se I can only broadly give you an overview. 20:54 20 minutes, 54 seconds So you will find that as a motor dominant business the provisioning that they have on the MOTP side is fairly 21:03 21 minutes, 3 seconds large and and motor TP will have a discounting element as you move into IFRS 21:13 21 minutes, 13 seconds that will bring in a significant amount of benefit back into the P&L and if you want to explain more you 21:22 21 minutes, 22 seconds Yeah. Yeah. While uh transitioning on the day one, so entire liability the present value will get calculated on the 21:31 21 minutes, 31 seconds day one. There will be a a big uh uh change in terms of the actual liability versus the future liability. So to that 21:38 21 minutes, 38 seconds extent it will be first opening will go to the uh net worth of the company and later on whatever the new liability get 21:45 21 minutes, 45 seconds added there the difference of the future value versus the present value will come to the P&L. So to that extent the 21:53 21 minutes, 53 seconds benefit to the P&L will come if you can uh so you have guided for the 22:04 22 minutes, 4 seconds ROE of around 15% right our target is to achieve it so can we say that uh uh next year it is possible to achieve that ro 22:13 22 minutes, 13 seconds of 15%. Being uh beneficial which we are getting from IFS point of view. Yeah, 22:20 22 minutes, 20 seconds just to clarify, we will be transitioning to IFRS from April 27. So 22:27 22 minutes, 27 seconds 25 26. Yeah. So we are not migrating to if I thought I make that clear. 22:34 22 minutes, 34 seconds Okay. So it's in FI28, right? Yes. Yeah. Okay. Okay. That was very helpful. 22:41 22 minutes, 41 seconds I was have a confusion. And sir on the uh expense ratio uh what is uh as you rightly said we have achieved the target 22:49 22 minutes, 49 seconds by in this how one should see this ratio going forward it will remain stable or we should see uh decline in this how one 22:58 22 minutes, 58 seconds should see this point of I think the way one should look at it is uh even for a moment assuming that the 23:07 23 minutes, 7 seconds regulator doesn't bring in any change in the regulations from now the 30% % would be the norm and there is no further 23:15 23 minutes, 15 seconds glide path. The glide path came to an end with 2526 256 right therefore all players will have to 23:23 23 minutes, 23 seconds necessarily combine and will have to comply to this level certainly 23:31 23 minutes, 31 seconds what this thing has helped us over the last 3 years is to do significant belt tightening which has helped us reduce our opex proportion quite significantly. 23:42 23 minutes, 42 seconds So I did say earlier in the opening remarks that we are amongst the top three in terms of the percentage at that level. I don't see any reason why that 23:50 23 minutes, 50 seconds advantage will get fritted away in the next year or in the coming years. So that part of the efficiency that has 23:57 23 minutes, 57 seconds been brought in is for real and for the future as well. 24:03 24 minutes, 3 seconds Of course on the balance portion which is the larger portion is certainly on the commission that we pay out to the intermediation there. We would certainly 24:12 24 minutes, 12 seconds look forward to what the regulator is going to bring about in the expected change and we can only say that uh any 24:20 24 minutes, 20 seconds reduction that the regulator mandates can only benefit us from here on. 24:26 24 minutes, 26 seconds Okay. It will be positive for us if any regulation comes into the picture. 24:33 24 minutes, 33 seconds Okay. Okay sir. That was very helpful sir. Thank you. Thank you very much. 24:41 24 minutes, 41 seconds Thank you participants. You may press star and then one to ask a question now. 24:59 24 minutes, 59 seconds A reminder to everyone if you wish to register for a question please press star and then one. 25:05 25 minutes, 5 seconds Your next question comes from the line of Krashna Koka from SDS. Please go ahead. 25:22 25 minutes, 22 seconds Ma'am, your line has been unmuted. Please proceed with your question. Hello. Am I? 25:28 25 minutes, 28 seconds Uh, no ma'am, we are not able to hear you. 25:34 25 minutes, 34 seconds Hello. [clears throat] Yes, please go ahead. 25:38 25 minutes, 38 seconds I had one question on our solveny ratios. This year it's on 1.96 earlier versus the historical levels of 25:46 25 minutes, 46 seconds you know around in the range of 2 to 2.15. So how should we read this and 25:52 25 minutes, 52 seconds what is our what would be uh you know uh or how should we read this and how will 26:00 26 minutes we improve our levels going forward. 26:05 26 minutes, 5 seconds The solveny uh computation is a function of the premium growth as well as the 26:12 26 minutes, 12 seconds claims growth. So this year you would have seen that the claims growth is higher from in terms of a claims ratio. 26:21 26 minutes, 21 seconds Therefore it has pulled in more capital with bringing the solvency level down 26:29 26 minutes, 29 seconds from 2.18 to 1.96 as we discussed earlier. So with the improvement in the claims ratio it should again move back. 26:37 26 minutes, 37 seconds Still the company is profitable and it is adding shareholders have been considered not to take a dividend. So the money is getting flowed back into 26:46 26 minutes, 46 seconds the business to support growth and solveny levels. So it is it can only 26:52 26 minutes, 52 seconds move up from that level and if you could provide more color on the motor business with respect to the 27:01 27 minutes, 1 second renewable and fresh business and how how it performed in FY26 and what is our 27:08 27 minutes, 8 seconds strategy for the upcoming year 27:14 27 minutes, 14 seconds move to uh yeah the uh page 54 four three which is the motor piece. So the 27:22 27 minutes, 22 seconds big picture if you look at the motor is that uh we continue to have that we've been fairly steady in terms of the 27:29 27 minutes, 29 seconds market share and being amongst the top five private sector players in the motor business and you will find that the cars 27:38 27 minutes, 38 seconds is something that which has been going up from 35 39 42 and 49. So that's the 27:45 27 minutes, 45 seconds kind of proportion mix which is being there. We will continue to stay focused on cars. Um and over the years we have 27:55 27 minutes, 55 seconds also seen the growth in agency coming up. So now the now that a good base has been built up in the agency the the 28:04 28 minutes, 4 seconds focus will now be on pushing up the renewal rate. Uh more importantly we are also u as a key strategic initiative 28:14 28 minutes, 14 seconds uh very soon we should be launching uh Chola exe an operating app for our sales 28:22 28 minutes, 22 seconds personnel and channel partners. uh this app will help us build a very structured partner engagement and also do good 28:31 28 minutes, 31 seconds performance management of not just our staff but also the productivity levels uh across agents and simplifying the 28:39 28 minutes, 39 seconds transaction. Um we feel that this app will put us on par with the new age companies in terms of uh the digital 28:48 28 minutes, 48 seconds offerings that we can give to our channel partners. So I think that should also give a philip to our renewal 28:56 28 minutes, 56 seconds ratios. We know that uh efficiency in operations and operating digitally certainly gives a leg up in terms of 29:04 29 minutes, 4 seconds renewals. Uh we certainly hope to encash on that as well. 29:11 29 minutes, 11 seconds uh more on the uh more than underwriting business if you underwriting part any uh 29:18 29 minutes, 18 seconds you know any strategy way ahead to reduce underwriting losses. 29:26 29 minutes, 26 seconds See um it's obvious that the industry has seen the motor uh combined ratio levels 29:34 29 minutes, 34 seconds uh inch up. It's a combination of the competitive intensity, the kind of 29:41 29 minutes, 41 seconds pressures that are there in the motor side and the absence of any TP price 29:48 29 minutes, 48 seconds revision coming into the market for almost four to 5 years. Even though the 29:54 29 minutes, 54 seconds inflation level both in terms of minimum wages as well as the medical inflation 30:01 30 minutes, 1 second is uh been there and is real. We are seeing a minimum wage increase which is there and we are also likely to see a 30:10 30 minutes, 10 seconds central minimum wage prescription by the government in the near future. So these can have an in inflationary effect on 30:18 30 minutes, 18 seconds the motor TP uh loss levels for the industry as such. And u while the 30:26 30 minutes, 26 seconds industry has been clamoring for a two-way correction in the motor third party pricing one rationalization 30:33 30 minutes, 33 seconds reduction where required and increase were required we've not been getting it though I think multiple representations at company 30:42 30 minutes, 42 seconds level at industry level has happened uh both to the regulator as well as to ministry I think that is something uh 30:49 30 minutes, 49 seconds which we honestly look forward and we are prudent in terms of our reserving recognizing this and as I 30:57 30 minutes, 57 seconds mentioned in the opening remarks operationally we continue to be efficient in terms of uh our own uh 31:04 31 minutes, 4 seconds compromise settlements are in tracking and monitoring peging the uh severity 31:09 31 minutes, 9 seconds inflation levels fairly to lower levels uh on the do you think the motor 31:19 31 minutes, 19 seconds portfolio requires a pricing the structure in to improve our underwriting performance. 31:31 31 minutes, 31 seconds Yeah. Again as I mentioned in the last two to three months on the motor OD side we have affected 31:38 31 minutes, 38 seconds uh a pricing correction uh whereby we are seeing somewhere about 7 to 8% improved pricing uh on the OD side which 31:48 31 minutes, 48 seconds should help us going forward in bringing down the motor loss ratios TP of course it's a government decision we would only 31:56 31 minutes, 56 seconds uh wait and continue to uh persevere with both the regulator and the government in trying to achieve this. 32:15 32 minutes, 15 seconds Rasham, do you have any further question? No, thank you. 32:19 32 minutes, 19 seconds Thank you. Reminder to all the participants, you may press star and then one to ask a question. 32:27 32 minutes, 27 seconds The next question comes from the line of Ritika Dua from Bandan. Please go ahead. 32:32 32 minutes, 32 seconds Yeah. So, just one question. Uh I uh guidance on combined ratio would help. Thank you. 32:45 32 minutes, 45 seconds [clears throat] 32:46 32 minutes, 46 seconds So uh Rajna. Hi uh Rita sorry this is Rajiv Kumar Swami here. So uh I think as 32:53 32 minutes, 53 seconds uh Suri had mentioned we are on the commercial side of the business seeing you know some amount of pricing 33:00 33 minutes pressure. So while it is more about uh managing line sizes at this point in time on the commercial business and 33:07 33 minutes, 7 seconds increasing spread uh I think from an overall group perspective we typically don't give guidance uh from a 33:16 33 minutes, 16 seconds forward-looking perspective uh but uh as I think the team has mentioned that the intent would be from 33:24 33 minutes, 24 seconds medium to long-term perspective maintain the 15% plus ROE guidance. So whatever it takes whether it is managing float 33:32 33 minutes, 32 seconds income or combined ratio we will work towards getting to that objective and you know things will need to evolve 33:42 33 minutes, 42 seconds once we get a little more clarity on what the regulator does on EUM uh because if there is a reduction on 33:50 33 minutes, 50 seconds the intermediation costs what could potentially potentially happen is that premiums may come down and which may reduce 33:58 33 minutes, 58 seconds uh you know the float So we'll have to navigate things. Uh so would not want to venture into giving any guidance on what we would do on 34:06 34 minutes, 6 seconds combined but yes we will endeavor to remain at the 15% plus ROE levels. 34:15 34 minutes, 15 seconds Sure. Thank you. Sure. Thank you. 34:22 34 minutes, 22 seconds Participants if you wish to register for a question please press star and then one now. 34:48 34 minutes, 48 seconds As there are no further questions from the participants, I now hand the conference over to the management for closing comments. 34:56 34 minutes, 56 seconds Yeah. Uh thank you all. Uh and uh I'd like to wholeheartedly thank uh Suri for 35:03 35 minutes, 3 seconds handing over a very solidly built foundation and I endeavor to not only protect but to build further on that 35:11 35 minutes, 11 seconds franchise and uh look forward to interacting with many of you in person and looking forward to more incisive questions and your guidance on how we 35:20 35 minutes, 20 seconds can make our disclosures better. Thank you once again. Thank you. Thank you. 35:27 35 minutes, 27 seconds Thank you on behalf of Chola Mandelum Financial Holdings. That concludes this conference call. Thank you everyone for 35:34 35 minutes, 34 seconds joining us and human artist connect your lines.