PB Fintech's PAT likely to rise 110% QoQ, margins to improve, say analysts

PB Fintech, which owns and operates PolicyBazaar is all set to release its second quarter (Q2FY25) results on Tuesday, November 5, 2024. 

 

Brokerages tracked by Business Standard estimate the revenue of PB Fintech to grow by 35.15 per cent year-on-year (Y-o-Y) on an average to Rs 1,096.9 crore as compared to Rs 811.6 crore a year ago. On a quarter-on-quarter (Q-o-Q) basis, revenue is forecasted to grow 8.5 per cent.

 

The revenue is expected to increase on the back of a gradual recovery of unsecured personal loans.

 

Further, PB Fintech's bottom line or profit after tax (PAT) for the quarter ended September 30, 2024, is estimated to be Rs 40.2 crore, on an average, as compared to a loss of Rs 20.2 crore a year ago. On a quarterly basis, the PAT is expected to grow 110.4 per cent on an average.

 

Analysts and investors will keep an eye on management's commentary around recent decisions to foray into healthcare.

Here's how analysts of various brokerages expect PB Fintech to fare in Q2: 

JM Financial: Analysts at JM Financial expect the company to maintain its growth trajectory, forecasting a 52 per cent Y-o-Y growth in insurance premium with core insurance premium growth of 42 per cent Y-o-Y. 

 

They believe new initiatives could see a sharper ramp-up at 81 per cent. Paisabazaar, owned by PB Fintech, disbursals are expected to decline 2 per cent Y-o-Y, however, improve 29 per cent sequentially with the gradual recovery of unsecured loans as well as some early traction in secured loans. 

 

Further, revenue is expected to grow 43.6 per cent / 7.6 per cent Y-o-Y for Policybazaar / Paisabazaar, as take-rates are likely to decline in insurance and improve in credit disbursals. 

 

Overall, the revenue is expected at Rs 1110.2 crore as compared to Rs 811.6 crore a year ago which implies a 36.8 per cent rise. 

 

The group contribution margin is estimated at 29.1 per cent as compared to 30.4 per cent in Q2 and 28 per cent in Q1 with core contributing margin likely to further get dented with a sustained rise in new health insurance. 

 

Additionally, the brokerage expect the adjusted Earnings before interest, tax, depreciation and amortisation (Ebitda) margin to expand 280 basis points (bps) Y-o-Y and 190 bps Q-o-Q basis to reach 4.4 per cent, as strong topline growth delivers operating leverage. 

 

Also, Ebitda margin is expected to improve to -1.6 per cent as compared to -11 per cent a year ago. 

 

B&K: The brokerage expects PB Fintech to continue its trajectory of healthy topline growth coupled with improving performance in terms of bottom line. 

 

Analysts at B&K expect revenue for the second quarter at Rs 1083.6 crore as compared to Rs 811.6 crore a year ago which translates to 33.5 per cent rise in the top line. 

 

Adjusted net profit is expected at Rs 37.8 crore as compared to a loss of Rs 20.2 crore a year ago.