While benchmark indices struggled to find direction on November 18, the share price of PB Fintech, the owner of Policybazaar, gained more than 8 percent in trade. At 2:30 pm, the stock was quoting at Rs 402 on the NSE, up by 8.2 percent.
Trading volumes of 16 million shares were four times higher than the 20-day average volumes of 4 million shares.
Foreign brokerages expect a 50 percent upside in the stock. Morgan Stanley has an Overweight rating with a target price of Rs 620 per share. The management has reiterated its profit guidance of Rs 1,000 crore for FY27, and that is what makes Morgan Stanley bullish. “Management has also highlighted its cash losses are near zero,” noted the brokerage.
Initiating coverage on the stock, CLSA has a Buy rating with a target price of Rs 600 apiece. “We expect more than 10 percent compounded annual growth rate (CAGR) in the broader insurance industry over 15 years and see PB Fintech as a key beneficiary of the growing share of online insurance distribution,” it noted.
In Q2, the company’s consolidated loss narrowed to Rs 186.63 crore compared to Rs 204.44 crore loss registered in the same quarter last year. Its revenue from operations for the period jumped 105.11 percent YoY to Rs 573.47 crore, led by strong growth in insurance premiums, credit disbursal and operating revenue.
The company claimed it was growing against the tide. “While there has been an industry slowdown in retail protection sales, we delivered 34 percent growth in health insurance premiums and 29 percent in life insurance new business premiums, which is 2-5 times of the industry,” it said.
On November 11, after PB Fintech’s pre-IPO lock-in expire, Tiger Global Eight Holdings sold 76.13 lakh shares at an average price of Rs 374.09 per share, and another 32.84 lakh shares at an average price of Rs 388.34 per share. Internet Fund III Pte Ltd also sold 51.59 lakh shares at an average price of Rs 375.11 per share.
In other news, PB Fintech has requested Insurance Regulatory and Development Authority (IRDAI) to allow them to reduce commission rates while seeking allowance on matching lower commissions as Bima Sugam, sources informed CNBC-TV18.
Bima Sugam will be an aggregator-like platform for insurance sales and related services. Industry feedback suggests that this platform is likely to charge commissions at a much lower rate than current levels.
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