PB Fintech shares pare early losses after second quarterly profit; Macquarie sees over 50% downside

PB Fintech shares swung between losses and gains in Wednesday’s deals after the company's Q4 earnings were released on the previous day. At around 10:10 am, shares of the online services company traded higher by 1.46 per cent at Rs 1,261.45 per share on the BSE, while its day’s high and low prices were Rs 1279.55 and Rs 1160.45 per share, respectively.

For the quarter ended March 31, 2024, the company posted a consolidated net profit of Rs 60.59 crore as against a net loss of Rs 8.95 crore a year ago. The company, which reported its first-ever profit in the December-quarter, has been cutting marketing and promotional expenditure in a bid to focus on profitability, the Reuters report said.

The company’s revenue from operations rose more than 25 per cent to Rs 1090 crore rupees, as revenue from its largest segment, insurance broking, more than doubled.

In the reporting quarter, the company registered high insurance sales as taxpayers buy policies to avail tax rebates at the financial-year end.

Should you buy PB Fintech after Q4FY24 earnings?

After the company’s Q4 financial results, Morgan Stanley continues with its equal weight rating with a target of Rs 1010. The brokerage said that the company’s Q4 beat is led by much stronger insurance business. Disbursement growth was weaker at PB Fintech due to tighter credit supply. Adjusted EBITDA margin scaled to a new high, noted the brokerage. Investor focus will be on the sustainability of premium momentum and a pickup in the credit business, it said. 

Citi continues with its ‘buy’ rating and the most bullish target set at Rs 1435, implying a potential upside of over 15 per cent. Meanwhile, Jefferies also has a ‘buy’ call on the counter with a target set at Rs 1150.

Nevertheless, defying the otherwise bullish view, Macquarie maintains an ‘underperform’ rating on PB Fintech with a target of Rs 610, suggesting a potential downside of over 50%.