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PB Fintech skyrockets with impressive Q3 profit surpassing expectations.

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TLDR:

Shares of PB Fintech Ltd., the parent company of Policybazaar and Paisabazaar, surged over 14% after its third-quarter profit beat analysts’ estimates. The fintech company reported a consolidated net profit of Rs 37.2 crore in the quarter ended December 2023, compared with a loss of Rs 20.24 crore in the same quarter a year earlier, according to an exchange filing. Key highlights from the report include:

  • Consolidated revenue increased by 7.3% to Rs 870.9 crore, exceeding Bloomberg’s estimate of Rs 851.1 crore
  • Ebitda loss narrowed to Rs 25.5 crore from Rs 90.7 crore, though it was higher than Bloomberg’s estimate of Rs 12.9 crore
  • Net profit of Rs 37.2 crore, beating Bloomberg’s estimate of Rs 24 crore
  • PB Partners business has expanded to 17,100 pin-codes, with Tier 2+ cities contributing 76% of the premium
  • Shares of PB Fintech rose 14.37% to Rs 1,039, the highest jump in nearly two years
  • Of the 17 analysts tracking the company, 12 maintain a ‘buy’ rating

The earnings report indicated that despite tepid growth in the insurance industry, PB Fintech experienced a significant increase in both core and new initiatives insurance premiums. Loan disbursals also grew 18.5% year-on-year, with the company shifting towards smaller and higher-quality retail agents. This resulted in PB Partners business reaching break-even at the contribution level.

Following the positive earnings results, shares of PB Fintech saw a sharp increase, rising 14.37% to Rs 1,039. However, the relative strength index suggests the stock is overbought. Analysts have a mostly positive outlook on the company, with 12 maintaining a ‘buy’ rating. The average 12-month consensus price target implies a slight downside of 4.9%.

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