PB Fintech shares rise 3% after posting fourth consecutive quarterly profit in Q2
PB Fintech's shares rose 3.2% to ₹1,698 after reporting a net profit of ₹51 crore in Q2 FY25 as against a loss last year. However, shares later fell 2.5%. The company's revenue grew 44% year-on-year, driven by strong demand in the insurance sector.
Stock Market Today: PB Fintech, the parent company of Policy Bazaar and Paisa Bazaar, witnessed a 3.4% rise in its share price to ₹1,696 apiece in early morning trade on Wednesday, November 6. This boost came after the company announced its fourth consecutive quarterly profit on Tuesday, driven by strong growth in its new health and life insurance business. However, the stock could not sustain its morning gains and was down by 2.5% to ₹1,604 per share as of 10:15 a.m.
The company reported a net profit of ₹51 crore in the second quarter of financial year 2025 (Q2 FY25), a significant improvement from the loss of ₹21 crore posted during the same period last year. Its consolidated revenue for the quarter stood at ₹1,167 crore, reflecting a 44% year-on-year (YoY) increase from ₹812 crore in the previous year quarter.
Core insurance revenue during the quarter rose 41% YoY to ₹624 crore. This growth can largely be attributed to the rising demand in India’s underpenetrated insurance sector, which is benefiting from improving financial literacy and increasing income levels, as noted by analysts.
"Our core health and life insurance businesses are growing ahead of expectations. In anticipation of this steady growth, we have invested ahead of sales in operating expenses, which we expect will pay off in the second half of the year," the company said in its Q2 FY25 earnings filing.
However, credit card revenue fell 8% YoY to ₹143 crore in Q2, mainly due to a shift in the product mix between secured and unsecured credit. Despite this, the business has remained adjusted EBITDA positive since December 2022.
The company is now operating at an annualised rate of ₹17,000 crore in credit disbursal and about 5.8 lakh credit card issuances. Its total credit score consumer base now stands at 47.7 million.
The company has also continued to strengthen its position in new initiatives, reporting an 87% YoY revenue growth to ₹400 crore. The adjusted EBITDA margin improved by 14 percentage points, moving from -26% to -12%, its Q2 earnings filing showed.
Stock up over 100% In CY24
The company's shares have experienced a remarkable surge this year, rising from ₹794 per share to their current trading price of ₹1,607, marking a notable gain of 102%. The stock's upward trajectory began in January when it first surpassed its IPO price after two years, and the rally continued through September, peaking at a record high of ₹1,966 per share.
At its current price, the stock is trading 64% higher than its IPO price of ₹980 apiece. Moreover, from its all-time low of ₹356 apiece in November 2022, PB Fintech has soared by a staggering 351%, showcasing the company's strong performance and investor confidence.
The company is engaged in providing integrated online marketing, IT consulting, and support services largely for the financial services industry, including insurance. PB Fintech operates Policy Bazaar, India's largest digital insurance marketplace, and Paisa Bazaar, which provides services related to lending products.
It plans to expand its offerings with the launch of PB Money, a personal finance management platform that will help users manage payments, investments, and insurance.
In its recent report, global brokerage firm Jefferies highlighted that digital brokers like PB Fintech are benefiting from rising insurance penetration and the growing consumer preference for online channels.
As the operator of India's largest online insurance platform, with over 90% market share, PB Fintech is expected to achieve a 30% CAGR in premiums from FY25-27E. Additionally, strong operating leverage in its renewal book could drive 5x EBITDA growth, according to Jefferies.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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