PB Fintech tumbles 5% despite strong Q4 results; Brokerages maintain bullish stance

Shares of PB Fintech, the parent company of Policybazaar and Paisabazaar tumbled over 5 percent to Rs 1,178 per share on May 8, despite the firm reporting profit for the second consecutive quarter in Q4FY24. Brokerages reiterated their recommendations to ‘buy’ shares of the online insurance aggregator, anticipating a sustained strong growth momentum moving forward.

Citi retained a ‘buy’ call on PB Fintech, saying that the firm’s Q4 performance captured sustained growth in new business. The brokerage firm raised the target price to Rs 1,435 from Rs 1,150 apiece, indicating over 15 percent upside from current levels.

Morgan Stanley also shared an ‘equal-weight’ call on PB Fintech and set target price at Rs 1,010 per share. Analysts believe that the core business beat was led by strong insurance new business growth and now investors’ focus will be on sustainability of premium momentum, pick-up in credit business.

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PB Fintech, which managed to break-even in the previous quarter, once again swung back to black in Q4FY24, reporting a net profit of Rs 60.19 crore as against a loss of Rs 9.34 crore in the year-ago period. The company’s consolidated revenue also increased by 25.3 percent YoY to Rs 1,089 crore in Q4FY24 from Rs 869.1 crore in Q4FY23.

The insurance firm’s for Q4FY24 amounted to Rs 5,127 crore, marking an annual recurring revenue (ARR) of Rs 20,000 crore in insurance premiums. This growth was led by expansion in new health and life insurance segments. New premiums, too, saw a notable increase of 47 percent YoY in the March-ended quarter.

ALSO READ: PB Fintech reports second straight quarter in profit at Rs 60 crore in Q4

Going ahead, analysts at Citi see strong momentum in PB Fintech’s long-term EPS accretive segments. “We see pick-up in phygitally originated business mix, steady EBITDA margins at Paisa, and strong traction in PSOP business,” they added.

The stock of PB Fintech soared over 56 percent so far this year, outperforming 2 percent rise in the benchmark Nifty 50 index.

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