On an overall basis, you once again posted a very strong set of numbers helped by Bajaj Finance, general insurance. Give us the key result highlights. What according to you aided this kind of strong performance that you have in the quarter gone by?
Sanjiv Bajaj: If we look at this business by business, you will notice that in Bajaj Finance our consumer financing grew over 40% this quarter whereas mortgage was just about 16-17%. So very clearly, both as a combination of weather due to which AC sales went up as well as part of the, I would say preponement in sales and destocking as a result of GST has helped us see additional volumes towards the end of June and the strong tailwinds have helped the consumer business which is the largest part of the book, grow. While our commercial and our rural businesses from small base continue to grow well because we are so small. So there are enough opportunities out there. If I move to Bajaj Allianz General Insurance, unlike last year where we had big swings in growth because of crop insurance, this year the crop insurance in the first quarter is not much. You will see it happening in the second quarter, but we have grown across our segments and we know motor and health are the main segments there but it has helped us by growing across segments that we have seen a strong growth in our top line. We normally grow over here in midteens but we have grown our GWP as you have seen 29% and our PAT over 60%. So it has been across lines. The life businesses particularly interesting. I have been talking about this over the last year or two that we have remodelled our agency. We are remodelling the other part of the business. What we are doing is focussing a lot more on the longer term, individual policies and our individual rated business again from low base but has grown over 120% not 20%, but 120% to Rs 278 crores from Rs 100 crores in Q1 of last year and this has provided a big jump on new business premium and overall premium. So we are finally seeing each of these businesses grow at a very healthy rate albeit for different reasons.
Given how your stock has moved, can I safely assume that it is status quo with your JV partner? I mean at this price Allianz will not want an exit or something.
Sanjiv Bajaj: That is a question that you have to ask Allianz. All I can say is as you can see businesses are touch wood doing quite well and Allianz continues to be a 26% partner with us. From what we know and we have just recently done our board meetings they are happy but beyond that what are their next steps is something that they need to decide and which I think they will do and maybe this is where they will stay. As I have said in the past also that there has been stuff that has come in the media but as you know there is nothing from Allianz and as far as we are concerned also, there is nothing new that they have to tell us.
Are you happy to have them as your long haul joint venture partner for next five to ten years? Are you happy with this arrangement? Are you happy with this JV?
Sanjiv Bajaj: Absolutely. We are very happy with the current arrangement. We would not have got into this business if it was not for them. They are long-term solid partners. Having said that, the business in the last 10 years run on their own. Both the partners get involved in strategy. We get far more involved because we are here on the ground and that works very well because Allianz works in a fairly federated way as well. So they do not get involved with businesses on day-to-day businesses and this balance has worked well for us over the last so many years. So to your question yes we are very comfortable with the current relationship.
Let us talk about Bajaj Finance and just want to understand what kind of improvement are you witnessing now in the consumer finance business, now that this GST transition is sort of almost settled and what is the kind of quarterly disbursement growth that you foresee in the future quarters ahead?
Sanjiv Bajaj: With the GST, I think it is just still very very early days. We should wait a couple of quarters to see how it pans out. For example, after all the destocking in the higher sales, we saw last weeks of June, July first 10 days were very slow, that has picked up now. But it is still far below what we have seen on average the last few quarters but that is because what we are seeing right now is noise. We have to let this settle down. Beyond that we have to see how long it takes for the SME business to align themselves, get themselves registered. Many have done so for GST because that is also a large part of the lending that we do. I would expect and whether it takes two, three, four quarters, at the end of that a significant boost to come for financing and insurance but we are talking about financing right now through the GST implementation because we are just formalising so much more of the business. As far as we are concerned, given the multiple lines of business that we are in in Bajaj Finance, our ability to grow if each business is doing well both on our top line opportunity as well as on risk is very high, is very strong and that is why you can see a 35% to 45% growth in the last few quarters because we mostly had tailwinds. We do know that the market is getting more competitive. A lot of NBFCs want to try and copy a model that we have built over last 10 years, not easy to do that but nonetheless they will try to copy that and we also know that we are still in a good cycle, in a good credit cycle. So the model that we have built always assumes that a few lines of ours could come under stress and we should very early on put the brakes on there and continue to grow the other lines and that is why we keep saying that a 25% AUM growth and 20% net income growth is what we think is steady state, what our model can deliver through the bad and the good times. Of course, in good times like now had far outdelivers, in the bad times it could be a little lower.
I have always admired the way how you have really managed to create this business and I am sure you must be flatted with the fact that others are trying to copy your model because imitation is the best form of flattery that is what Aditya Puri once told me when we said Sir lot of people who are trying to copy model of HDFC Bank. So I am sure you must be delighted that others are trying to follow the model of Bajaj Finserv.
Sanjiv Bajaj: Of course, we are happy to see that. We are happy to see the position that we are in. It does create pressures. It sreates pressure on people. It creates pressure on expectations, creates pressure because of stock markets which I do not understand but which I do see. But equally importantly we derive comfort from the fact that based on what Aditya Puri there is still only one HDFC Bank and given the fact that we are continuously trying to do better than what we were doing yesterday, I am sure there will only one Bajaj Finance.