Religare Enterprises Q1 FY27 earnings call

Religare Enterprises Limited reported a consolidated revenue of INR2,358 crores for Q1 FY27, marking a 26% year-on-year growth from INR1,876 crores in the prior year. However, the reported PAT was negative INR46.9 crores, with a negative PBT of INR76.73 crores, primarily attributed to different reporting standards. The company emphasized that Q1 FY27 was a quarter of deliberate and measured progress, focusing on building a strong foundation for its businesses.

Care Health Insurance (CHI) demonstrated strong growth, with Gross Written Premium (GWP) increasing by 37% year-on-year to INR3,247 crores on a full premium basis. The retail business grew even faster at 45% year-on-year. CHI is now the second-largest standalone health insurer in the country, with its retail health market share expanding to 12.6% of the industry. The company aims to improve its combined ratio to 100% within the next two years and maintain a solvency ratio of 1.7x, having raised INR150 crores through a rights issue and INR200 crores in sub-debt during the quarter.

Religare Finvest Limited (RFL) is in a rebuilding phase, well-capitalized with a net worth of INR915 crores and a healthy cash balance of INR600 crores. The company reported a PAT of INR15 crores for the quarter, though total income decreased to INR14.4 crores due to a reduction in the loan book and lower recovery from the GNPA book. RFL maintains a stable collection efficiency of 98% and a low NNPA of 0.8%. Management expects to commence new business activities within the next three to four months, deploying its cash reserves.

Religare Housing Finance (RHFL) is focusing on restoring and rebuilding its franchise, targeting self-employed and informal segments in semi-urban markets. The business has a capital base of INR180 crores and an AUM of INR247 crores, with a healthy capital adequacy of over 121%. Despite reporting a loss of INR5 crores for the quarter, management is optimistic about the segment's growth potential, supported by strong structural tailwinds and government initiatives.

The broking business delivered a strong rebound in profitability, with PBT growing 53% year-on-year to INR10 crores. Total income increased 7% year-on-year to INR99.5 crores, driven by 13% growth in brokerage income and 78% growth in the client debit book. The company is investing in its tech platform, talent, and product ecosystem, aiming for productivity and efficiency gains. Management indicated that a clearer strategy for market differentiation would be articulated in the coming quarters^⏳.

Religare Enterprises received communication from the Reserve Bank of India (RBI) stating that its request for approval for the demerger scheme has not been acceded to. Management confirmed they are engaging with regulators to understand the reasons and explore alternative solutions, reiterating their commitment to delivering stakeholder value. They clarified that the RBI's observation is not about merging privately held NBFCs with those within the Religare fold, but rather related to the demerger scheme itself.