The parent company of Policybazaar and Paisabazaar, PB Fintech, shares surged 3.3% to the day’s high of Rs 1,673.90 on the NSE. However, key brokerage houses have raised concerns about the regulatory environment posing a risk.
Here is a detailed analysis of the investment rationale of top analysts –
Nomura on PB Fintech
Nomura maintained its Neutral call on PB Fintech and retained its target price at Rs 1,590, implying a downside of almost 2%.
The brokerage said that the quarterly performance was robust. However, regulatory uncertainty still looms large. The company’s management remains focused on scaling up the existing business and expanding into new segments.
“We had highlighted earlier that the fair price of PB Fintech could see a 30% hit in case the regulator decides to make long-term policies commissions back-ended. We note that regulation is the biggest trigger for the stock in either direction,” concluded Nomura.
Motilal Oswal on PB Fintech
Motilal Oswal Financial Services cut its price target on PB Fintech t to Rs 1,820, still implying an upside of 12% from the current market price. The brokerage house maintained its ‘Neutral’ stance.
The insurance segment’s 12 million trailing core renewal revenue grew 55% YoY and is expected to outpace fresh business growth, which is also likely to maintain healthy momentum, backed by continued protection demand. The company’s management has maintained its guidance of 3% PAT yield for FY27.
Policy Bazaar continued to deliver volume growth above its guidance of 30%, driven by a GST exemption-led boost in term and health insurance.
Strong momentum in the protection segment, along with stronger renewal growth and productivity improvement, resulted in robust profitability, said the brokerage.
Additionally, the company continues to witness recovery in unsecured lending and stable momentum in retail secured lending.
“We have increased our revenue estimates by 3% and 2% for FY27 and FY28, considering the Q1FY27 performance. Robust operational efficiency has resulted in a 5% and 4% increase in net profit estimates for FY27 and FY28. Uncertainty around commission regulations remains a key risk,” said Motilal Oswal.
PB Fintech share price performance
The share price of PB Fintech has risen 2.2% in the last five trading days. The stock has surged 4% in the last one month and 9% over the past six months. PB Fintech’s share has dropped over 5% in the last one year.
PB Fintech Q1FY27
The company’s consolidated net profit skyrocketed 92.4% year-on-year to Rs 163 crore in Q1FY27, driven by sustained growth across its insurance and credit businesses. The company’s consolidated net profit came in at Rs 85 crore a year earlier.
Its revenue from operations jumped 40% YoY to Rs 1,888.2 crore in the first quarter of FY27, compared with Rs 1,348 crore in the corresponding quarter last year.
On the operating front, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased more than fourfold to Rs 139.1 crore from Rs 34.2 crore a year ago. EBITDA margin expanded to 7.37% from 2.54%, reflecting improved operating leverage.