Brokerages across the board have voiced concerns over PB Fintech, the parent company of Policybazaar, diving into the healthcare sector. Brokerages pointed out that this foray into the healthcare space marks a shift for PB Fintech from its current asset-light model into a more asset-heavy space, a stark contrast that raises red flags.
Morgan Stanley also emphasised that it’s too early to assess any potential financial impact from PB Fintech's healthcare venture, as management has yet to provide further details. The firm believes investor sentiment toward the stock will largely depend on the scale of capital outlay—whether it’s a one-time expense or a recurring commitment.
Another aspect highlighted by Morgan Stanley which will be detrimental in investor reaction to the stock would be whether the company takes on the foray as a solo venture or partners with other firms and what it envisages as benefits to revenue and insurer-partner relationships. Morgan Stanley retained its 'equal-weight' call on the stock with a price target of Rs 1,375.
Bank of America Securities has a slightly more optimistic view of the new venture, going by the limited cash burn undertaken by the company in the past. The firm highlighted the management's intention to stay disciplined with its latest venture.
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On the other hand, even though CLSA does see entry barriers for new entrants in the healthcare space, it believes that hospitals can generate healthy returns of 15-25 percent, which is significantly higher than PB Fintech's current investment yield.
The brokerage continues to estimate Rs 1,000 crore net profit for PB Fintech in FY26 itself, earlier than the company's guidance of achieving that feat in FY27 as it sees a strong momentum in its health and savings business.
As for PB Fintech's core business, BoFA sees strong business momentum banked on the company's dominance in the online insurance space. The brokerage has a 'neutral' rating on the stock with a price target of Rs 1,975.
At 3 pm, shares of PB Fintech were trading over two percent lower at Rs 1,647.30 on the NSE.
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