PB Fintech gains 2% after Jefferies initiates coverage with 'buy' call

In the October-December quarter, the online insurance aggregator and the parent company of Policybazaar achieved profitability for the first time

Shares of PB Fintech Limited traded 2 percent higher to Rs 950 in afternoon trade on February 12 after global brokerage firm Jefferies initiated coverage with a 'buy' rating on the counter citing multiple levers for growth.

The firm has also assigned a target price of Rs 1,150, implying an upside growth potential of 23 percent on the exchanges. At 1:16 pm, the stock was trading at Rs 949, up 1.8 percent from the previous close on the NSE. It is off the day's high of about 4 percent.

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"Large digital intermediaries offer superior play on Indian insurance and Policybazaar could gain market share from other channels," Jefferies stated in the report. It added that Paisabazaar's growth will moderate after the Reserve Bank of India's (RBI) measures.

Jefferies also expects a 30 percent compounded annual growth rate (CAGR) over FY25-27, and a 5 percent jump in EBITDA over FY23-27. On the flipside, it highlighted regulations and stiff competition from Jio as key risks.

In the October-December quarter, the online insurance aggregator and the parent company of Policybazaar achieved profitability for the first time during the December quarter. The company reported a profit after tax of Rs 37 crore for Q3, driven by strong growth in insurance premiums, improved renewals with higher margins, and enhanced contributing margins. This marks a significant turnaround from the loss of Rs 87 crore reported in Q3 of the previous fiscal year (FY23).

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