PB Fintech Limited

PB Fintech reported a total premium of ₹7,605 Cr for Q2 FY26, marking a 40% YoY and 15% QoQ increase. This growth was primarily fueled by the online protection business, which grew 44% YoY, and the Health business, which saw a 60% YoY increase. Consolidated revenue for the quarter reached ₹1,614 Cr, up 38% YoY, demonstrating robust performance despite external factors like the GST change.

The company achieved a consolidated PAT of ₹135 Cr, representing a substantial 165% YoY growth (2.65x). This led to an improvement in PAT margin from 4% to 8%. Management noted that this profit pool currently stands at 1.77% of the total insurance premium, highlighting the hard-earned nature of this profitability in the sector.

Core Insurance revenue grew 36% YoY, with the Policybazaar segment's insurance Core revenue increasing by 47% YoY, contributing to an overall 39% YoY growth for Policybazaar. While Core Credit revenue was down 22% YoY, it showed signs of bottoming out with a 4% QoQ increase, and Core online disbursals grew 9% QoQ. The Savings category, however, remains stressed, though management anticipates its growth will return in the coming quarters^⏳.

New Initiatives demonstrated strong performance with a 61% YoY revenue growth. Adjusted EBITDA margins for this segment improved significantly from -12% to -4%, achieving a 5% Contribution margin. PB Partners, the agent aggregator platform, continues to consolidate its leadership, now boasting over 380K advisors and driving growth from Tier 4 and 5 towns.

The UAE insurance premium grew 64% YoY, with the business consistently profitable for the last three quarters. This segment is aligned with Health and Life products, similar to the India business, and leverages a unique value proposition for cross-border customers. Management indicated that the UAE business is a significant contributor to the New Initiatives' Contribution Margin.

Management emphasized increasing renewal rates as a key driver for long-term profit growth, with quarterly insurance renewals revenue reaching an ARR of ₹758 Cr, up from ₹516 Cr in Q2 last year. The company is also focused on improving customer onboarding, claim support services, and maintaining insurance CSAT consistently above 90%, aiming to carry more customers into the future.

PB Fintech reiterated its long-term aspiration of achieving approximately 3% PAT as a percentage of premium by FY30. New ventures like Pensionbazaar and PB Money are currently in the 'drawing board stage' with minimal incremental investments (less than half a million dollars combined), and management does not expect significant results from them for at least a year.

Management addressed the GST change announced on September 22nd, noting that their team swiftly found solutions to ensure sales were not negatively impacted. They are engaged in constructive conversations with insurance companies regarding distributor commissions, aiming for a 'win-win' outcome for consumers, insurers, and Policybazaar, emphasizing their role as a large source of quality fresh business.