PB Fintech shares: Nuvama downgrades Policybazaar parent, despite profit success

PB Fintech, the parent company of Policybazaar and Paisabazaar, saw its shares get downgraded by Nuvama Institutional Equities despite reporting its first-ever quarterly profit. Nuvama revised its FY25 Ebitda estimates to account for slightly higher growth and increased its target price for PB Fintech to Rs 790. However, it downgraded the stock to ‘REDUCE’ due to its rich valuations. PB Fintech reported a consolidated net profit of Rs 38 crore for the December quarter, compared to a loss of Rs 87.30 crore in the previous year’s quarter. Its revenue increased by 43% YoY to Rs 871 crore. The growth in new health premiums and strong revenue growth of new initiatives contributed to PB Fintech’s positive results. Nuvama noted that while the growth of renewal premiums was slightly lower, the growth in new business premiums was impressive. The company also saw improvements in credit revenues and cost control. The management of PB Fintech expressed optimism about turning around its segment of low profitability and achieving higher renewals with premium hikes. Despite these positive results, Nuvama downgraded the stock due to its expensive valuations.