Shares of Indian new-age tech company PB Fintech, the parent company of PolicyBazaar and PaisaBazaar, have been on the rise for the last eight trading sessions, delivering a fabulous return of 30%, moving from ₹402.45 apiece to ₹523, pushing the stock price to a 5-month high.
The stock, which had been steadily declining since reaching a 52-week high of ₹840 per share in April of last year, continued to fall in 2023, losing 4.41% of its value in the last month. However, the stock has gained momentum since the start of February on the back of the company's improved performance in the December quarter, which exceeded analyst estimates.
PB Fintech is engaged in providing integrated online marketing and IT consulting and support services, largely for the financial services industry, including insurance. PB Fintech operates PolicyBazaar, India's largest digital insurance marketplace, and PaisaBazaar, which provides services related to lending products.
In Q3 FY23, the company's net loss narrowed to ₹87 crore as compared to ₹298 crore in a similar quarter of last year. During the July-September quarter, the company had posted a net loss of ₹187 crore.
The revenue from operations during the quarter surged to ₹610 crore, an increase of 66.21% from ₹367 crore in the corresponding quarter of last year. The operating expenses also came in lower at ₹744 crore in Q3FY23, down from ₹800 crore in Q2FY23.
The company's revenue increased 5.2 times in the first nine months of the current fiscal year compared to the same period four years ago.
The company's core business adjusted EBITDA was positive for the quarter at ₹26 crore, ahead of the company's expectation.
The company's credit disbursal grew by 57% YoY, and its insurance premium increased by 70%. Over 33 million customers have accessed credit scores on its platform.
According to the company, 75% of cards issued in the October-December quarter were end-to-end (E2E) digital, and co-created products such as the step-up card and duet credit card are gaining traction.
"Our New Initiatives revenue has grown 3.7x, while the adjusted EBITDA loss is roughly the same this quarter as compared to the same period last year. This explains that we have grown while building efficiencies," said PB Fintech in a stock exchange filing.
The company said its agent aggregator platform PB Partners continues to lead the market in scale and efficiency of operations. It has the highest proportion of non-motor businesses and is present in 14,300 pin codes across India. In addition to that, the company's UAE business has grown 167% YoY.
The company is confident of being adjusted EBITDA positive by the end of this year and delivering the first full year of positive PAT in 2023–24.
Meanwhile, the company saw its foreign institutional investor (FII) holdings reach an all-time high of 48 percent in the December quarter. In the same quarter of the previous fiscal year, FIIs owned a 16.3 percent stake in the company.
Among some key foreign investors, Mirae Asset Emerging Bluechip Fund increased its stake in the company to 1.98 percent in Q3FY23 from 1.65 percent in Q2FY23, Trendlyne data showed.
Following the company's Q3 performance, global brokerage firm CLSA has maintained a “buy” rating on the stock and lifted its target price to ₹660 apiece from ₹600 earlier. Similarly, Morgan Stanley also raised the target price to ₹705 apiece from ₹620, maintaining an “overweight” rating on the stock.
12 analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
