The fintech major’s consolidated profit zoomed 2.8x to ₹171 crore in the fourth quarter from ₹60 crore in the year-ago quarter. Operating revenue grew 38% to Rs 1,508 crore, while margin surged to 7.5% from 0.5% last year.
Out of the 20 analysts who have coverage on PB Fintech, nine of them have a ‘Buy’ rating, three say ‘Hold’, while eight others have a ‘Sell’ recommendation.
Jefferies has maintained a ‘Buy’ rating on PB Fintech with a price target of ₹2,000, which implies a potential upside of 13% from Thursday’s closing levels. As of yesterday’s close, shares of PB Fintech had corrected 22% from their peak of ₹2,254.95.
The brokerage wrote in its note that PB Fintech’s online premium grew 35% year-on-year, in line with estimates. This growth was driven by a 49% rise in renewals and increased traction in new health insurance (HI) policies, which offset the slower growth in the savings business.
Revenue from the credit business declined 22% year-on-year, but overall core revenue rose 31%.
The company’s contribution margin expanded by over 100 basis points year-on-year, aided by a better business mix. Adjusted EBITDA rose 70%, slightly ahead of expectations.
Jefferies mentioned that the drag from new initiatives is easing. Net profit jumped 184% year-on-year to ₹170 crore. On an adjusted basis, factoring out tax and ESOP costs, the figure was slightly ahead of estimates.
Citi has reiterated a ‘Buy’ recommendation on PB Fintech with a price target of ₹2,150. The brokerage said that the company’s profit stood at ₹170 crore, beating estimates of around ₹150 crore.
Citi mentioned that negligible taxes (16% in 9MFY25), a sharp decline in ESOP expense run-rate, margin improvement, and strong growth in the back book are all contributing to a strong profitability trajectory.
Momentum in the core fresh insurance premium (excluding savings) remained strong, growing 38% year-on-year within the 34-44% YoY range seen over the past eight quarters.
However, a sharp moderation in the savings segment led to a more modest 22% YoY growth in the overall core fresh business.
After three consecutive quarters of 300–500 basis points (bps) YoY decline in contribution margin, Q4 saw a 100 bps YoY increase, largely reflecting reduced pressure from the savings segment, the brokerage added.
On the flip side, Morgan Stanley has an ‘Underweight’ rating on PB Fintech, with a price target of ₹1,130.
The brokerage mentioned that core new premium growth slowed to 21% year-on-year in Q4, below its expectation of 33% and down from 44% in Q3. This was mainly due to weaker growth in the savings (ULIP) segment, though growth excluding savings remained healthy at 38%.
Revenue was 2% below Morgan Stanley’s estimates, while adjusted EBITDA came in at ₹149 crore, 1% above expectations.
The ‘Underweight’ stance is driven by what Morgan Stanley views as a steep valuation of 62x FY27 EV/adjusted EBITDA.
Shares of PB Fintech Ltd. settled 0.90% higher on Thursday at ₹1,770.10 on BSE. The stock has risen nearly 10% in the last five trading sessions, but is down 17% so far in 202.
