PB Fintech Q2 Results Review - Insurance Led Revenue Beat; Higher Opex Limiting PAT Growth: Dolat Capital

Dolat Capital Report

PB Fintech Ltd. reported revenue growth of 44% YoY (our estimate: 26%) led by insurance, up 56% YoY (Core insurance revenue up 41% YoY). However, Adjusted Ebitda margin remained flat QoQ to 4.8% (our estimate: 10.5%) as it incurred further additional Opex (Rs 340-420 million) towards S&M and offline capacity.

Management’s target of two times industry growth (implies ~30% growth) in Insurance remains intact, while it expects sustained weakness in unsecured credit biz in H2 FY25.

Focus remains on prioritizing growth over profitability which may impede PAT guidance moving forward.

We cut our FY25/26E earnings by 22%/3% as despite higher growth traction, profitability gains are slow due to higher-than-expected opex to support Insurance segment growth.

We believe the valuation looks stretched as upside is well captured but does not bake in the risk of growth moderation. Thus, we maintain ‘Sell’ rating with target price of Rs 1,360 which implies 90 times/60 times PER on FY26E/FY27E earnings.

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