Broker’s call: PB Fintech (Buy)
PB Fintech: Jefferies upgrades with 1,540 target; quarterly revenue up 35%, EBITDA miss on higher costs, strategic non-insurance growth and cost alignment discussed.
Target: ₹1,540
CMP: ₹928.10
PB Fintech’s September quarter revenue grew by 35 per cent y-o-y, ahead of Jefferies expectations. However, adj. EBITDA at ₹220 crore (+39 per cent y-o-y) was a miss due to higher expenses.
PB discussed levers to offset regulatory risks, including building non-insurance revenue, improving productivity, and aligning costs with NPVs. PB highlighted the risk of slower 2H growth, as GST tailwinds are behind.
Total insurance premium grew 38 per cent y-o-y, with core new health and term growing 42 per cent (o/w health +46 per cent). The renewal take rate improved by around60 bps to 7.9 per cent on account of a higher share of health renewals and the transition to a “Combined Operating” model. Management expects PB Health to reach a monthly revenue run-rate of ₹40-50 crore by Mar’26, equivalent to ₹500 crore annualised, with the business broadly around break-even.
Total expenses ex. ESOP grew by 35 per cent y-o-y vs JEFe of 29 per cent, led by higher advertising and promotion expense (+59 per cent). This led to Sep’26 qtr. adj. EBITDA missing our est. by 3 per cent. Paisabazaar sequential momentum was muted: Credit disbursal were broadly flat q-q as the company kept marketing growth subdued.
We cut FY27e PAT by 3 per cent to account for higher opex.
Our SOTP-based PT of ₹1,540 based on 26x Dec’28e EV/adj. EBITDA.
Source: BusinessLine Markets
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