PB Fintech shares slip as Motilal Oswal initiates coverage with 'neutral'

PB Fintech shares slip as Motilal Oswal initiates coverage with 'neutral'

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26 Aug, 2025 12:21

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Shares of PB Fintech, the parent of Policy Bazaar, were trading in mild red on November 18 after Motilal Oswal Financial Services (MOFS) initiated coverage with a "Neutral" rating and gave a price target of Rs 2,000, which implies upside of up to 10%.

At 12:05 pm on November 18, PB Fintech shares were trading marginally lower at Rs 1,810 apiece.

Potential commission restructuring by insurers following the loss of input tax credit after granting of GST exemption could pose key risk to revenue growth, said the brokerage.

However, it also noted that PB Fintech is well-positioned for long-term margin expansion and expects EBITDA margin to reach 13% in FY28 from 2% currently.

MOFS said PB Fintech is a dominant player in the digital marketplace for both insurance and consumer credit via Policy Bazaar and Paisa Bazaar, respectively

Secured credit and PB Health are helping company to transition from a marketplace to a multi-vertical platform, said MOFS.

So far in 2025, the stock fell 15%.

"We expect PB Fintech to post a strong FY25-28 revenue/EBITDA/PAT CAGR of 35%/156%/56%, factoring in a strengthening position in the under-penetrated credit and insurance industries. However, we believe the stock is fairly valued, and all the positives are priced in at current levels. The possibility of commission restructuring by insurance companies due to the loss of input tax credit post GST exemption, poses a key risk for the company’s top-line growth. We initiate coverage on PB Fintech with a Neutral rating and a one-year TP of Rs 2,000 on the basis of DCF-based valuation (implying Sep’27E EV/EBITDA multiple of 58x)," said the brokerage.

"Rising competition from both digital-first players and incumbent insurers’ direct channels could erode market share. Additionally, any cut in distributor commission due to the loss of input tax credit post GST exemption could impact revenue growth. However, stronger persistency and renewal monetisation in Policy Bazaar could drive earlier-than-expected margin expansion. Faster digital adoption in insurance and lending may accelerate market share gains," added MOFS.