SUMMARY
Shares of PB Fintech jumped over 9% to INR 708 during the intraday trade, before shedding some of the gains to end the day at INR 698.45 on the BSE
The rally in the shares followed PB Fintech’s meeting with analysts on Friday and positive commentary by brokerages on the stock
Kotak Institutional Equities maintained ‘add’ rating on the stock with a fair value of INR 725, while IIFL Securities has a ‘buy’ rating on PB Fintech with a price target of INR 750
Shares of PB Fintech jumped almost 9% during the intraday trading on Monday (June 26) to touch a 52-week high of INR 708 on the BSE.
The shares of the fintech startup rallied following its meeting with analysts on Friday and positive commentary about it by brokerages.
“The meet reinforced our conviction on PB’s domain capabilities that will keep it ahead of peers,” said Kotak Institutional Equities in its research note.
The brokerage said the startup exhibited its insuretech capabilities during the meeting. PB Fintech has built multiple tech tools in-house, which helps the company in better flexibility and lower response time to changes in the marketplace, it noted.
PB Fintech operates insurtech platform policybazaar
, which has witnessed a sharp growth in insurance premium over the past few years. In FY23, its insurance premium stood at INR 11,589 Cr, registering a 66% growth year-on-year (YoY).
As per Kotak, PB Fintech accounts for 20% of the total term insurance market in India and 33% of policies sold by the company are in the curated/co-originated products category.
The brokerage maintained its ‘add’ rating on PB Fintech with a fair value of INR 725.
Meanwhile, IIFL Securities said that the key competitive advantage for the company is the underpenetrated market.
Robust use of data and technology would be the biggest growth driver for the fintech player, analysts at the brokerage said. PB Fintech is poised to deliver 29% revenue CAGR over FY23-26 and reach 15% EBITDA margins by FY26, driven by strong growth in underlying markets, share gains, and operating leverage, IIFL said.
It must be noted that PB Fintech broke even on a consolidated basis in Q4 FY23 and posted a consolidated adjusted EBITDA of INR 28 Cr in the quarter as against a loss of INR 80 Cr in the corresponding quarter of FY22. The startup also said it is hopeful of achieving net profitability in FY24.
The brokerage has a ‘buy’ rating on PB Fintech and a price target of INR 750. It also stated that Paisabazaar offers customers a wide choice and ease of comparison in India’s underpenetrated and fast-growing digital lending market.
It must be noted that PB Fintech’s lendingtech vertical Paisabazaar achieved breakeven in Q3 FY23.
PB Fintech shed some of its early gains later in the day to end today’s session at INR 698.45, up 7.5% on the BSE. With investor sentiment turning positive on new-age tech stocks, shares of PB Fintech have rallied over 15% in June so far.
Meanwhile, the broader equity market saw a lacklustre start to the week. While Sensex ended marginally lower at 62,970, Nifty 50 rose 0.14% to end at 18,691.20 today.
Prashanth Tapse, senior VP (research) at Mehta Equities, said the market was primarily influenced by negative Chinese growth cues and a hawkish stance from the Federal Reserve.
