PB Fintech sheds 4% even as Q1 net loss narrows to Rs 12 cr

The stock opened higher and hit a 52-week high at Rs 816, before slipping into the negative zone in intra-day deals on Tuesday.

Shares of PB Fintech, the parent company of online insurance aggregation platform 'PolicyBazaar' digital loan and credit card platform 'PaisaBazaar' dropped 4 per cent in Tuesday's intra-day trades to Rs 765 post its Q1 results.

In fact, the stock opened higher and hit a fresh 52-week at Rs 816 before slipping into the negative zone. At 10:00 AM, the stock quoted 3.8 per cent lower at Rs 768 on volumes of around 49,000 shares on the BSE. Meanwhile, the S&P BSE Sensex was down 0.1 per cent at 65,900.

According to a release issued by the company to the BSE after market hours on Monday, PB Fintech's net loss shrinked to Rs 11.90 crore in the quarter ended June 2023 as against a net loss of Rs 204 crore in the corresponding quarter a year ago.

The company's core online business revenue jumped 39 per cent year-on-year (YoY) to Rs 516 crore, while consolidated revenue grew by 32 per cent YoY to Rs 666 crore. Consolidated EBITDA was a positive Rs 23 crore as against negative Rs 66 crore in the year ago quarter.

On the credit business, the company clocked an annualized run rate of Rs 16,000 crore disbursal, and 5.8 lakh credit card issuance, the release stated. 75 per cent of the disbursals were from existing customers. The UAE business grew by 2.6 times.

The company said it is convinced about the future potential of this business and committed to it, and was confident of being significantly PAT positive for the year.

Further, the company informed that it will be infusing a capital of up to Rs 700 crore in PolicyBazaar Insurance Brokers, its wholly-owned subsidiary in FY24 and FY25.

Similarly, it would infuse Rs 200 crore each in PaisaBazaar Marketing and Consulting Private and PB Fintech FZ-LLC in one or more tranches over the next two financial years.

Recently, Investec, an investment banking firm, has initiate a BUY on PB Fintech with a target price of Rs 1,000. 

PB Fintech's EBITDA/ PAT margins will continue to expand for years due to a) rising share of renewal revenue (costs are already incurred) and b) operating leverage on fixed costs (branding, head office etc.), the firm said in a note.