PB Fintech Rated 'Neutral' By Motilal Oswal On Coverage Initiation — Details Inside

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Motilal Oswal Report

We initiate coverage on PB Fintech Ltd. with a Neutral rating and a one-year target price of Rs 2,000 on the basis of DCF-based valuation (implying Sep’27E EV/Ebitda multiple of 58x).

We believe PB Fintech holds a strong position in two of India’s most underpenetrated financial services segments, complemented by embedded optionality from new initiatives that offer further long-term convexity.

We expect consolidated revenue to post a 35% CAGR over FY25-28, driven by a sustained momentum in core online businesses and the monetization of new verticals.

Adjusted Ebitda margins are expected to expand meaningfully, from 2% in FY25 to 13% by FY28, driven by operating leverage in the core business and stabilization of early-stage investments.

We expect PB Fintech to post a strong FY25-28 revenue/Ebitda/PAT CAGR of 35%/156%/56%, factoring in a strengthening position in the under-penetrated credit and insurance industries.

However, we believe the stock is fairly valued, and all the positives are priced in at current levels. The possibility of commission restructuring by insurance companies due to the loss of input tax credit post GST exemption, poses a key risk for the company’s top-line growth. 

Rising competition from both digital-first players and incumbent insurers’ direct channels could erode market share. Additionally, any cut in distributor commission due to the loss of input tax credit post GST exemption could impact revenue growth.

However, stronger persistency and renewal monetization in PLB could drive earlier-than-expected margin expansion. Faster digital adoption in insurance and lending may accelerate market share gains.

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