PB Fintech shares surge 5% today, turn multibagger in 7 months; Is it time to book profits?

Shares of PB Fintech surged as much as 5 per cent during the trading session on Tuesday as the parent company of PolicyBazaar and PaisaBazaar turned into a multibagger in just seven months. The stock has been at the radar of brokerage firms after positive management commentary at analysts' meetings.

PB Fintech's management highlighted the operating efficiencies, growth in underlying markets and market share gains that will help in improving operational performance in the upcoming years. The management is also positive on  market share gains and operating leverage will contribute to 29 per cent CAGR in revenue over financial year 2023-2026, they said.

Brokerage firms, both domestic and global, continue to remain positive on the PB Fintech. While some see more steam left in the counter, while others suggest a limited upside potential in the counter. The stock has crossed the target prices of various brokerage firms.

PB Fintech highlighted how it uses data and technology to find the market gaps; help in product innovation along with partners; provide superior customer profiles to partners; and improve customer experience through claim support and aftersales service, said IIFL Securities with buy rating and a target price of Rs 750.

"We believe this is a key competitive advantage for PBFI in underpenetrated markets. We forecast PB Finech to deliver 29 per cent revenue Cagr over FY23-26; and reach 15 per cent Ebitda margins by FY26 - driven by strong growth in underlying markets, share gains and operating leverage," it added.

Shares of PB Fintech gained about 5 per cent to Rs 727 on Tuesday, hitting its new 52-week high. The company was commanding a total market capitalization of more than Rs 32,500 crore. The scrip, which settled at Rs 698.45 on Monday, has risen about 13 per cent in the two sessions.

Shares of PB Fintech have more than doubled investors' wealth in the last seven months as the stock has risen more than 105 per cent from its 52-week low at Rs 356.20 in November 2022. The stock has rallied more than 60 per cent in the year 2023 so far.

PB Fintech exhibited its insure-tech capabilities in its virtual analyst meeting. The company leverages technology to support its insurance partners in product development and fraud detection; this enables its partners to cater to new customer segments and improve their profitability, said Kotak Institutional Equities.

"Operating efficiency is improved by documenting (voice to text) its vast telephone calls and using the same for better insurer and customer outcomes. The meet reinforced our conviction on PB’s domain capabilities that will keep it ahead of peers," it added with an 'add' rating a fair value at Rs 725 apiece.

Among the global brokerages, Morgan Stanley expects PB Fintech's margin to cross the 20 per cent mark by financial year 2027 and that higher renewal business will lead to improved profitability. The brokerage has an overweight rating on PB Fintech and a price target of Rs 810. CLSA has maintained an outperform on PB Fintech with a target price at Rs 720, which has been met.


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