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PB Fintech target price cut to Rs 1,100 as FY28 profit forecast slashed by 72%

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PB Fintech target price cut to Rs 1,100 as FY28 profit forecast slashed by 72%

PB Fintech target price cut to Rs 1,100 as FY28 profit forecast slashed by 72%

The revised target price by Nomura implies an upside of 5.8 per cent from PB Fintech’s closing price of Rs 1,040 on October 7. Insurance premium estimates for FY28 and FY29 have been cut by 13 per cent and 19 per cent, respectively, while EBITDA margin is expected to fall to 7.9 per cent in FY28 before recovering to 18.2 per cent in FY29.

FY28 and FY29 net profit estimates cut 72 per cent and 51 per cent, respectively. Insurance premium estimates lowered 13 per cent for FY28 and 19 per cent for FY29, assuming exit from the POSP business. A two percentage point increase in health insurance commission caps could raise the fair price to Rs 1,335. Entry into traditional savings insurance products could lift the fair price to Rs 1,366, against the base case of Rs 1,100.

PB Fintech ’s target price has been cut to Rs 1,100 from Rs 1,590, with the Neutral rating retained, as proposed changes to insurance distribution rules are expected to weigh on earnings. Nomura has also cut the fintech firm's FY28 and FY29 net profit estimates by 72 per cent and 51 per cent, respectively, assuming the company exits its point of sales person (POSP) business and adjusts to the proposed commission caps. 8 per cent from PB Fintech’s closing price of Rs 1,040 on October 7. 2 per cent in FY29, according to Nomura.



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