PB Fintech shares: Nuvama increases target price; retains 'Reduce' call

Nuvama Institutional Equities has raised its target price for PB Fintech Ltd (parent of Policybazaar and Paisabazaar) shares to Rs 1,550 from Rs 1,510 earlier while the domestic brokerage maintained the 'Reduce' rating. It said the company's new core insurance premium growth was just 20.6 per cent year-on-year (YoY) as savings business slowed sharply.

Despite this slowdown, Nuvama noted the company witnessed significant renewal premium growth of 50.2 per cent YoY in Q4 FY25 (January-March 2025 quarter), contributing to a 44 per cent YoY rise in core insurance revenue, adding that this highlights the resilience of PB Fintech's revenue streams.

"With scale, core adjusted EBITDA margin improved 492 basis points (bps) YoY/688 bps QoQ (quarter-on-quarter) to 21.7 per cent. New initiatives' revenue jumped 50.2 per cent YoY led by 41.4 per cent YoY growth in premiums. For Q4, adjusted EBITDA margin rose +361bp YoY to 9.9 per cent, driving overall adjusted EBITDA to Rs 149 crore. APAT (adjusted profit after tax) improved to Rs 170 crore (+183.5 per cent YoY)," the broking firm stated.

"PB Fintech continues to deliver strong growth in core term and health fresh premiums. Given strong growth and margin focus, we are increasing FY26E/27E adjusted EBITDA by 4.8 per cent/4.9 per cent. Consequently, our TP increases to Rs 1,550 (earlier Rs 1,510); retain 'REDUCE'," Nuvama also said.

Overall, while PB Fintech faces challenges with slowing new business premium growth, its strong renewal and core premium performance, along with strategic initiatives, have positioned it well for future growth.

A drop in PB Fintech's renewal margin from 85 per cent to 80 per cent has been attributed to a revised allocation of costs such as marketing, sales and call centre expenses, Nuvama underscored. As of March 2025, PB Fintech's core business premium stood at Rs 16,140 crore.

Shares of PB Fintech slipped 3.74 per cent to settle at Rs 1,694 on Monday.