PB Fintech is preparing to reshape parts of its business as proposed insurance distribution reforms raise questions about its future operating model. The company has set an internal target of 1,000 days to adapt while maintaining its customer proposition and aligning with the regulator’s objectives.
According to a brokerage report, management has not yet disclosed the specific changes it plans to introduce. The uncertainty remains a concern for investors, despite the company’s stronger-than-expected September-quarter results.
Quarterly performance beats estimates
PB Fintech reported a net profit of Rs 192 crore for the September quarter, 13% above the brokerage’s estimate. EBITDA also exceeded expectations by 12%, while the EBITDA margin reached 9.92%, against the forecast of 9%.
The margin improved by 25 basis points year on year as expenses outside contribution fell by 140 basis points as a share of revenue. Contribution margins remained unchanged.
Premiums across Policybazaar and its other insurance platforms grew 38% year on year to Rs 9,385 crore. Core insurance premiums increased 46%. Core premiums excluding savings products have grown faster than total core insurance premiums for 7 consecutive quarters.
The insurance platform’s take rate remained stable at 18.5% compared with the previous quarter.
Insurance and credit business trends
Management expects some slowdown in term and health insurance premiums during the second half of FY27 because of a higher comparison base following the GST cut. However, it remains confident about the 2-year compound annual growth trend.
Premium growth in the first half of FY27 stood at 31%, above the brokerage’s full-year estimate of 25%.
Paisabazaar’s overall disbursals fell 45% year on year in the September quarter and 42% in the first half of FY27. However, core disbursals grew 22% and 27%, respectively. The company is adjusting its strategy through PB Connect, and the brokerage said core disbursals should be monitored to understand the underlying business trend.
The credit segment’s take rate increased 88 basis points year on year but declined 30 basis points sequentially as core disbursals remained flat.
Brokerage maintains neutral view
The brokerage retained its Neutral rating on PB Fintech with a target price of Rs 1,100. It said the quarterly performance was healthy, but uncertainty around proposed insurance distribution reforms remained the bigger concern for investors.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream LinkedIn | The Mainstream Facebook | The Mainstream Youtube | The Mainstream Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.