PB Fintech Limited

PB Fintech reported a strong Q4 FY25 with total insurance premium reaching ₹7,030 Cr, marking a 37% YoY increase, primarily driven by new health. For the full fiscal year, total insurance premium was ₹23,486 Cr, reflecting a 45% YoY growth in new core online insurance premium and 48% in new health and life insurance premium. Consolidated operating revenue for Q4 grew 38% YoY to ₹1,508 Cr, contributing to a full-year total operating revenue of ₹4,977 Cr, a 45% YoY increase.

The company demonstrated significant improvement in profitability, with consolidated PAT for FY25 growing from ₹64 Cr to ₹353 Cr, and the full-year PAT margin improving from -58% to 7%. The core business achieved a 16% positive EBITDA for FY25, starting at 14% and ending at 22%, while new initiatives recorded a 2% positive EBITDA margin for the year. Trail revenue, a key indicator of long-term profit growth, reached an Annual Recurring Revenue (ARR) of ₹817 Cr, representing a 42% YoY growth.

New insurance core premium growth in Q4 was 21% YoY, which was below expectations due to a slowdown in the savings segment. However, the health business continued its robust growth trajectory for nine consecutive quarters. Other segments like motor, two-wheeler, and travel returned to over 30% growth. The UAE insurance business achieved a 76% YoY premium growth and turned profitable, contributing positively to the overall performance.

The core credit revenue experienced a 21% YoY decline in Q4, with disbursals for the core online business at ₹2,368 Cr. The credit business's adjusted EBITDA margin for the full year was 7%. Management outlined plans to expand into secured lending areas such as home loans, loans against property, and car loans this year, alongside a focus on tech-led collections to scale unsecured lending.

PB Fintech maintains a strong customer satisfaction (CSAT) score consistently above 90%, specifically 92.1%. PB Partners, the company's agent platform, continues to lead the market in both scale and efficiency, with a strategic shift towards smaller, higher-quality advisors. The company boasts a wide reach, with a presence in 99% of PIN codes across India.

Management reiterated a long-term revenue CAGR target of 30%. They are actively working on diversifying products in the challenged savings segment, including pension and capital guarantee solutions. AI is being strategically integrated across customer servicing, acquisition, and collections to enhance productivity and effectiveness, while maintaining a 'man in the middle' approach for complex sales in life and health insurance.

Operating cash flow for the fiscal year reverted to negative, primarily due to an increase in receivables. This situation is attributed to the 1/n accounting method adopted by insurers and a shift towards monthly payment plans in health insurance. Management anticipates that this trend will normalize^📎 over the next 2-3 quarters, with the company maintaining a strong closing cash balance of ₹5,400 Cr.

PB Fintech is pursuing a long-term strategic initiative in the healthcare sector, aiming to address customer pain points in the claims process. This strategy involves acquiring and integrating hospitals, with current plans to acquire 2-3 operating hospitals and 2-3 shell hospitals in the NCR region. These acquisitions are intended to combine existing revenue and profits with new builds, forming a comprehensive healthcare ecosystem.