PB Fintech shares: Bernstein sees ‘do-or-die’ 18 months, cuts target by 53%; here's why
PB Fintech: Bernstein, while maintaining it 'Outperform' rating, said its revised earnings forecasts and target price reflect the harsher than expected commission cut proposal.
- Sep 30, 2026,
- Updated Sep 30, 2026 10:48 AM IST
Bernstein has slashed its share price target on PB Fintech Ltd by 53 per cent to Rs 1,085 from Rs 2,310 earlier, even as it retained its 'Outperform' rating on the stock, saying the parent of Policybazaar faces a do-or-die situation in the next 18 months.
The foreign brokerage, while maintaining it 'Outperform' rating, said its revised earnings forecasts and target price reflect the harsher than expected commission cut proposal. PB Fintech retains the high growth and expanding margin profile beyond a damaging FY28, Bernstein said.
On Wednesday, the stock was trading 2.25 per cent lower at Rs 1,056.70 on BSE.
PB Fintech's reduced take-rates in the general insurance business cannot cover the current costs, Bernstein said adding that the business will either scale back from general insurance, or PB Fintech has find alternative models to capture value from the lost revenues in the health segment.
"Mitigation strategies exist, but they are hard to quantify/bake-in at this point (we expect some value to be recouped - not in our forecasts). The POSP business will scale down. We continue to like what is left of the business from a growth/value creation perspective (beyond FY28), but the next 18-months will be 'do-or-die' with a wide range of outcomes possible," Bernstein said.
It cut its profit estimates and now value the business at 25 times FY30 profits.
Business model changes needed Bernstein said the business model needs to change under the proposed caps. For now, Bernstein said it does not know whether the regulator will tweak the caps, or what mitigation strategy will be implemented.
"We assume max pain, with no rollbacks from the regulator and do not bake in upside from potential mitigation strategies. We see an arduous path to our revised FY30 net income forecasts (Rs 2,000 crore vs Rs 3,200 crore before regulatory hit). The next few quarters will involve sharp cost control and executing on the planned mitigation strategies," Bernstein said.
Bernstein said it forecast core insurance revenues at the product-level and eliminated the POSP revenues and direct costs from its estimates. It baked in sharp cost cuts in the core business in FY28
"We cut our premia and revenue forecasts to reflect the take-rate compression and the scale down in the POSP business. We also cut direct costs sharply in FY28, with a bounce-back in spending as revenue growth resumes in FY29. We see a path to Rs 2000 crore in FY30, baking in no regulatory rollback and sharp cost cuts. How they respond to the crisis and what upside that could bring is not in the numbers," Bernstein said.
Bernstein has slashed its share price target on PB Fintech Ltd by 53 per cent to Rs 1,085 from Rs 2,310 earlier, even as it retained its 'Outperform' rating on the stock, saying the parent of Policybazaar faces a do-or-die situation in the next 18 months.
The foreign brokerage, while maintaining it 'Outperform' rating, said its revised earnings forecasts and target price reflect the harsher than expected commission cut proposal. PB Fintech retains the high growth and expanding margin profile beyond a damaging FY28, Bernstein said.
On Wednesday, the stock was trading 2.25 per cent lower at Rs 1,056.70 on BSE.
PB Fintech's reduced take-rates in the general insurance business cannot cover the current costs, Bernstein said adding that the business will either scale back from general insurance, or PB Fintech has find alternative models to capture value from the lost revenues in the health segment.
"Mitigation strategies exist, but they are hard to quantify/bake-in at this point (we expect some value to be recouped - not in our forecasts). The POSP business will scale down. We continue to like what is left of the business from a growth/value creation perspective (beyond FY28), but the next 18-months will be 'do-or-die' with a wide range of outcomes possible," Bernstein said.
It cut its profit estimates and now value the business at 25 times FY30 profits.
Business model changes needed Bernstein said the business model needs to change under the proposed caps. For now, Bernstein said it does not know whether the regulator will tweak the caps, or what mitigation strategy will be implemented.
"We assume max pain, with no rollbacks from the regulator and do not bake in upside from potential mitigation strategies. We see an arduous path to our revised FY30 net income forecasts (Rs 2,000 crore vs Rs 3,200 crore before regulatory hit). The next few quarters will involve sharp cost control and executing on the planned mitigation strategies," Bernstein said.
Bernstein said it forecast core insurance revenues at the product-level and eliminated the POSP revenues and direct costs from its estimates. It baked in sharp cost cuts in the core business in FY28
"We cut our premia and revenue forecasts to reflect the take-rate compression and the scale down in the POSP business. We also cut direct costs sharply in FY28, with a bounce-back in spending as revenue growth resumes in FY29. We see a path to Rs 2000 crore in FY30, baking in no regulatory rollback and sharp cost cuts. How they respond to the crisis and what upside that could bring is not in the numbers," Bernstein said.