PB Fintech is well placed to benefit from the rising insurance penetration in India, especially through digital distribution and high growth, operating leverage, strong balance sheet and established brand recall among the Indian populace are its key business moats, as per brokerage and research firm ICICI Securities.
This, as per the brokerage, should help the company generate strong free cashflows as it expects the company’s cost-to-income ratio to plateau ahead. ICICI Securities has initiated coverage on PB Fintech shares with Buy rating and a DCF-based target price of ₹940.
“The prime growth driver for PB Fintech should be in the increasing premium income expected in digital medium. Individual new business premium (life) and retail health insurance sourced from online channels (web aggregators + insurer websites) grew at 38% compound annual growth rate (CAGR) in FY16-FY21 vs 12% for non-digital channels,” the note stated.
PB Fintech is uniquely placed to benefit from both life and non-life insurance in India. This aggregate nature provides valuable diversification. PB Fintech (PBF) is poised for high growth in premiums and, in turn, revenues, the brokerage added.
PB Fintech Limited, which operates online insurance platform Policybazaar and credit comparison portal Paisabazaar, is India’s leading online platform for insurance and lending products. The company provides convenient access to insurance, credit, and other financial products.
Shares of PB Fintech made stock market debut in November last year and are down about 34% since listing. The newly listed stock has declined more than 14% in 2022 (YTD) so far.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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