Religare Q1 FY27: Care Health drives growth, demerger faces RBI pause

Religare Enterprises Limited reported a strong top-line quarter in Q1 FY27, but the bottom line remained weak at the consolidated level.

On a consolidated basis, total income rose to INR 2,358.4 crore in Q1 FY27 from INR 1,876.3 crore in Q1 FY26, a 26% year-on-year increase. Yet the company reported a consolidated loss after tax of INR 46.98 crore, compared with a profit of INR 8.12 crore in the year-ago quarter. Net worth attributable to owners stood at INR 3,061.9 crore, up 20% year on year. Cash and cash equivalents increased sharply to INR 378.3 crore versus INR 140.1 crore last year.

Management repeatedly described the quarter as one of “measured progress” and “putting the house in order.” That framing matters because REL is a holding company across insurance and multiple financial services businesses. In Q1 FY27, the insurance segment contributed the majority of revenue, while financial services remained relatively small and is still in an investment and rebuilding phase.

The consolidated picture: insurance dominates revenue, but profitability diverges

REL’s segment reporting shows how concentrated the group is.

For Q1 FY27, revenue (before inter-segment adjustments) was INR 2,229.7 crore from Insurance, INR 133.1 crore from Financial Services, and INR 1.3 crore unallocated. In other words, the quarter was largely an insurance story.

The consolidated income statement showed total expenses of INR 2,435.1 crore versus total income of INR 2,358.4 crore, resulting in a consolidated loss before tax of INR 76.7 crore.

A key nuance also surfaced in the concall: Care Health Insurance’s standalone results are presented on Ind AS (including Ind AS 117), but management stated that consolidated accounts did not reflect the Ind AS 117 impact due to a one-year forbearance taken by Care. This creates a gap between what investors see in Care’s standalone profitability and what gets reflected in the group’s consolidated profit.

Care Health Insurance: premium growth remains strong, but service ratios are still above 100%

Care Health Insurance is clearly the crown jewel within REL’s portfolio.

In Q1 FY27, Care reported gross written premium of INR 3,247 crore on a full premium basis, up 37% year on year. Management highlighted that the health insurance sector is benefiting from GST tailwinds, citing industry retail health growth of 32% and overall industry growth of 22.4% in the quarter. Care positioned itself as continuing to outpace the market and gain share.

The quarter also came with active balance sheet actions. Care raised INR 150 crore through a rights issue in Q1 FY27 and subsequently raised INR 200 crore of Tier II capital in August 2026. The solvency ratio stood at 1.58 as of June 2026.

Operationally, Care highlighted improvements in customer and service metrics, including a retail renewal rate of 97% (up from 91% in Q1 FY26), a claim settlement ratio of 96%, and materially lower grievances per 10,000 policies (0.28 versus 0.70 in Q1 FY26). On the digital side, it claimed 99.9% of new policies are applied digitally and 85% of cashless claims are processed in under 30 minutes.

Profitability requires more careful reading. Under Ind AS, Care reported profit before tax of INR 163 crore, up 59% from INR 102 crore in Q1 FY26. But the combined insurance service ratio was 102.7%, still above 100%. Management explained on the call that the combined ratio includes non-attributable expenses, which do not sit within the insurance service result line item, and pointed to expenses net of INR 66 crore that bridge the math.

This means profitability in the quarter was supported meaningfully by investment income and net finance result, a pattern common in insurers during growth phases.

Religare Broking: stable revenue, higher profitability, and a push to widen the mix

Religare Broking delivered a comparatively clean quarter.

Total income increased to INR 99.5 crore in Q1 FY27 from INR 94.1 crore in Q1 FY26, a 7% increase. Profit after tax rose 65% to INR 7.5 crore. Assets under custody were INR 47,946 crore.

The company disclosed a clear revenue mix: 47% brokerage, 30% interest income, 16% e-governance, and 7% others. Management highlighted growth in brokerage income (+13%) and interest income (+28%) and also cited a 78% year-on-year increase in the client debit book.

The strategic message was consistent: the business is investing in tech upgrades, enhancing the trading platform and mobile app, hiring across key functions, and pursuing process re-engineering and automation. It also identified growth drivers as increasing traded clients, growing the margin trading funding book to boost interest income, and expanding third-party product distribution.

However, management was not yet ready to lay out a detailed competitive strategy versus larger and more aggressive peers, stating that clarity on the model should emerge in the next one to two quarters.

Religare Finvest and housing finance: heavily capitalised platforms preparing for restart

Religare Finvest is in a very different phase compared with a typical lender.

As of Q1 FY27, net AUM stood at INR 53.1 crore. Yet the balance sheet is sizeable, with tangible net worth around INR 914 to 915 crore and cash or liquid investments of around INR 609 to 610 crore. The company reported NNPA of 0.8% and a very high CRAR of 238.4%.

Financially, Q1 FY27 total income was INR 14.4 crore, down from INR 19.3 crore in Q1 FY26, which management attributed to reduction in the loan book and lower recoveries from the GNPA book. Still, PAT was INR 15.1 crore.

On the call, management said the lending business is being rebuilt with technology transformation and hiring, and that growth is expected to commence in the next three to four months. It also disclosed that the written-off pool available for recoveries is around INR 350 to 400 crore, with management expecting recoveries to play out over roughly the next two years.

Housing finance, housed under Religare Housing Development Finance Corporation Limited, remained stable on AUM but loss-making.

AUM stood at INR 247 crore, with product mix of 66% home loans and 34% LAP. The company reported GNPA of 4.4% and NNPA of 3.3%. Total income for Q1 FY27 was INR 7.4 crore, while operating expenses were INR 12.5 crore, resulting in a loss before tax of INR 5.0 crore.

The key positive development is capital support: the presentation highlighted a strategic capital commitment of INR 250 crore by REL to strengthen the balance sheet and enable diverse funding. Management also highlighted senior leadership appointments and an ongoing IT transformation.

Demerger update: RBI has not acceded to the request, with no stated reasons

The major overhang in the quarter was the demerger.

Management stated that the company received a communication from RBI conveying that the request for approval has not been acceded to, and that the letter did not include reasons. REL said it is engaging with the regulator and will provide clarifications as required.

When questioned on timelines, management declined to provide a timeline and acknowledged that the earlier expected deadline could be delayed. Investors also raised alternate value-unlock structures, including a potential approach involving Care, but management indicated that any value-unlocking route still requires regulatory approval and that the near-term focus is on engagement with RBI.

Key investor takeaways from Q1 FY27

Religare’s Q1 FY27 shows a group in transition.

Care Health Insurance is delivering strong premium growth, expanding its investment book, and reporting higher profit under Ind AS, but the combined insurance service ratio is still above 100%. Religare Broking is profitable and stable, but is still in a repair and investment mode. Religare Finvest and the housing finance subsidiary are positioned as capital-ready rebuild stories, yet their operating scale remains small versus the capital deployed.

The demerger remains the swing factor for near-term sentiment. Until there is clarity from RBI, investors are likely to focus on two tangible markers: whether Care can keep growing while gradually improving service ratios, and whether financial services can deploy their capital into scalable lending growth without compromising asset quality.