PB Fintech stock jumps on strong Q2 earnings; Morgan Stanley reiterates equal-weight call

Over the past 12 months, PB Fintech stock has soared 131%, more than doubling investors' capital, while Nifty rose 23% during the same period

Shares of PB Fintech gained up to 2% on November 6 as Morgan Stanley reiterated its bullish call on the stock after the company reported positive earnings for the quarter ended September 30, 2024.

The Policybazaar and Paisabazaar parent reported a fourth straight quarter of profit, fuelled by the high growth in health and life insurance premiums. Its operational income grew 44% year-on-year to Rs 1,167 crore during Q2FY25, and net profit grew to Rs 51 crore compared to the Rs 21 crore loss it had reported in the year-ago quarter.

The company reported a 69 percent growth in the health and life insurance segment with a total insurance premium collection of Rs 5,450 crore during the quarter.

Meanwhile, PB Fintech's credit business saw a decline in revenue even as its loan disbursal remained flat, which it attributed to a change in product mix between secured and unsecured credit.

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Morgan Stanley has issued an 'Equal-weight' call on PB Fintech stock with a target price of Rs 1,375 per share. The firm noted that PB Fintech continues to show strong revenue momentum, with revenue and adjusted EBITDA both surpassing their estimates.

Adjusted EBITDA margin remained steady on a quarter-over-quarter basis, suggesting consistent operational performance. While the valuation appears expensive, Morgan Stanley believes the strong revenue performance may provide near-term support for the stock.

During the quarter, PB Fintech share prices fluctuated widely amid reports that it was planning to invest in healthcare providers. Earlier in an interview with Moneycontrol, the Group CEO Yashish Dahiya clarified that it will only be a minority investor in healthcare and will not run hospitals.

As of 1:15 pm, PB Fintech shares were trading 1.8% higher at Rs 1,672.90 on the National Stock Exchange (NSE). The stock has rallied approximately 109% this year, significantly outpacing Nifty's 10% gain.

Over the past 12 months, the stock has soared 131%, more than doubling investors' capital, while Nifty rose 23% during the same period

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