Motilal Oswal Maintains Buy on Neutral PB Fintech, Targets Rs 1870

PB Fintech Sees Significant Revenue Growth in FY26

PB Fintech, the parent company of Policybazaar, has reported revenue of INR20.6 billion in the latest quarter, marking an 11% beat and a year-over-year growth of 37%. This growth was primarily driven by a 42% year-over-year increase in online revenue to INR12.5 billion, which exceeded estimates by 13%. New initiatives revenue also saw a significant growth of 29% year-over-year to INR8.1 billion, outperforming estimates by 7%.

Key Financial Highlights

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The company's adjusted EBITDA stood at INR2.8 billion, exceeding estimates by 22% and marking a year-over-year increase of 87%. The adjusted EBITDA margin for FY26 was 10.7%, while the core online adjusted EBITDA margin was 25.1%, up from 21.7% in the previous quarter. In contrast, the new initiatives adjusted EBITDA margin was negative at 4.2%, a slight improvement from the negative 6.3% margin seen in the previous quarter.

Outlook and Recommendations

Motilal Oswal's research team has increased revenue estimates for PB Fintech by 2% to 3% for FY27 and FY28, respectively, following the company's strong 4QFY26 performance. Improved cost efficiency has also led to a 2% to 5% increase in PAT estimates for FY27 and FY28. Despite this, the team remains neutral on PB Fintech, with a revised target price of INR1,870 based on DCF valuation. This target price implies an FY28 EV/EBITDA multiple of 53x.