PB Fintech Limited

PB Fintech reported a strong Q1 FY26, with consolidated operating revenue growing 33% YoY to ₹1,348 Cr and total insurance premium increasing 36% YoY to ₹6,616 Cr. Consolidated PAT saw a significant rise from ₹19 Cr to ₹85 Cr, with the PAT margin expanding from 2% to 6%. Management emphasized that its current strategic focus is entirely on growth, with profits being an outcome rather than an optimization target, aiming for a ₹1 lakh Cr premium by 2030.

The insurance segment was a key driver, with core online insurance premium growing 35% and core insurance revenue up 37% YoY. Health insurance was a standout, growing 65%, one of the highest rates in the last nine quarters. Renewal and trail revenue on a last twelve-month rolling basis reached ₹725 Cr, up 43% YoY, while the insurance quarterly renewal revenue (ARR) stood at ₹673 Cr, up 47% YoY. Management expects insurance revenue to grow in the '45%ish range' for the foreseeable future, highlighting its importance for long-term profit growth.

The core credit business faced headwinds, with revenue down 22% YoY to ₹102 Cr and disbursals at ₹2,095 Cr. Management acknowledged that the credit business is currently under stress, having moved from a period of high approval rates. However, they expressed confidence that the business has 'bottomed out' and expects 'healthy growth resuming from Q3' after focusing on building back-end operations and product maturity in the first two quarters of the fiscal year.

New initiatives, including PB Partners and UAE business, showed robust growth of 50% YoY, with adjusted EBITDA margins improving from -12% to -6%. The UAE business, in particular, grew 68% YoY and has been profitable for the last two quarters. Paisabazaar is strategically expanding into secured lending and monetizing its 5.3 Cr customer base with new savings products like bonds, fixed deposits, and upcoming mutual funds. Management acknowledged Paisabazaar's current financial challenges but expressed strong confidence in its team and future potential to become a 'very, very strong player'.

PB Fintech is actively building a comprehensive healthcare service layer, encompassing tech solutions, digital GP services, and solutions to keep patients out of hospitals. This is a 'slow build' with management expecting 'some impact' to become visible in about a year. The company aims to play a meaningful role in transforming the Indian healthcare industry by guiding consumers towards appropriate care pathways, narrow networks, and better claim experiences, acknowledging the broader industry's challenges with declining penetration and stress on claims.

Management indicated that fixed costs are not expected to grow faster than revenue, projecting them to grow at 'about 2/3rd of our revenue growth or so' over the year. For tax, an effective rate of '8-10%' is anticipated for the next 18 months. The company also clarified that ESOP charges, while increasing and decreasing over time^⏳, are linked to long-term share price performance and profitability of new initiatives.