PB Fintech gains over 4% after posting 185% profit jump in Q4 results; brokerages stay bullish

Shares of PB Fintech, the parent company of Policybazaar and Paisabazaar, rallied more than 4 percent in intraday trade on May 16 following the release of robust Q4 earnings for the financial year ended March 2025. Investors cheered the company's strong profitability, improved margins, and sustained momentum in its core online insurance business, prompting positive reactions from leading brokerages.

The insurance aggregator reported a consolidated net profit of ₹171 crore for Q4FY25, registering a massive 185 percent jump from ₹60 crore in the same quarter last year. The company’s revenue from operations surged 38 percent YoY to ₹1,508 crore, up from ₹1,090 crore in Q4FY24.

Policybazaar Core Drives Growth

PB Fintech's flagship platform, Policybazaar, contributed ₹877 crore to Q4 revenues, reflecting a 31 percent year-on-year growth. The company attributed the overall revenue uptick to consistent margin improvement across segments. In terms of premium, PB Fintech reported a 37 percent YoY growth to ₹7,030 crore, driven primarily by new health insurance sales, even as savings business saw a slowdown amid weak market conditions.

The consolidated PAT for FY25 surged 448 percent to ₹353 crore from ₹64 crore in FY24, with profit margins improving from 2 percent to 7 percent. The company's closing cash balance stood at ₹5,406 crore, reflecting a strong liquidity position.

On the lending side, credit revenue fell 21 percent YoY in the quarter, but loan disbursals remained solid at ₹2,368 crore for the core online business. For the full year, lending disbursals stood at ₹20,465 crore, a 38 percent YoY rise.

Meanwhile, PB Fintech’s “New Initiatives” segment clocked 50 percent YoY revenue growth, with adjusted EBITDA margin improving to -6 percent from -10 percent a year ago, contributing 4 percent to total revenue.

Analysts Maintain ‘Buy’ Ratings

Brokerages remained upbeat on the company’s outlook. Jefferies retained a ‘Buy’ rating with a price target of ₹2,000, implying a 13 percent upside from Thursday’s close. The brokerage noted that online premium grew 35 percent YoY, led by a 49 percent surge in renewals and stronger traction in new health policies, offsetting softness in the savings segment.

Citi also reiterated a ‘Buy’ recommendation, raising its price target to ₹2,150. It highlighted that Q4 profit of ₹170 crore exceeded its ₹150 crore estimate. Citi also pointed to improved margins, lower ESOP expenses, and negligible tax outgo (16 percent in 9MFY25) as key tailwinds for PB Fintech’s strong profitability trajectory.

After three quarters of contribution margin contraction, Q4 saw a 100-bps YoY improvement, thanks to reduced drag from the savings business, the brokerage added.

Stock Performance and Outlook

Following the results, PB Fintech shares jumped 4.3 percent to an intraday high of ₹1,854.70. The stock remains 18 percent below its 52-week high of ₹2,254.95 but is up 60 percent from its 52-week low of ₹1,161.40 touched in May 2024.

Over the last year, the stock has gained nearly 40 percent, including a strong 11 percent rise so far in May, building on previous monthly gains of 8.6 percent in March and 2.2 percent in April.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.