PB Fintech slides after weak Q3 show

PB Fintech fell 1.99% to Rs 878.10 after the company reported consolidated net loss of Rs 298.02 crore in Q3 December 2021, higher than net loss of Rs 19.59 crore in Q3 December 2020.

On a consolidated basis, net sales rose 73.19% to Rs 367.28 crore in Q3 December 2021 over Q3 December 2020. Pre-tax loss stood at Rs 298 crore in Q3 December 2021, higher than pre-tax loss of Rs 18.01 crore in Q3 December 2020.

During the period under review, the company's employee expenses surged 211.59% to Rs 394.79 crore while advertising and promotions expense surged 199.86% to Rs 236.02 crore.

Adjusted EBITDA (non GAAP) was a loss of Rs 92 crore, reflecting investment in new initiatives and brand advertising.

Insurance premium grew by 68% YoY to Rs 1,796 crore. Credit disbursals grew by 94% to Rs 1,926 crore. Existing business contribution margin was maintained at 40%. New initiatives revenue grew multifold to Rs 50 crore (up from Rs 3 crore last year) with an initial investment of Rs 41 crore.

PB Partners (PoSP business) became the #1 B2B2C platform in the country in just six months of launch (July 2021). PB UAE business is now a close #2 in a fast growing market.

Yashish Dahiya, chairman and group CEO of PB Fintech, said "Scale is critical to the success of any marketplace we are currently at an ARR of over ₹ 8,000 Cr which is a growth of 60% YoY, we are now growing at scale. Margins in our existing businesses were maintained at 40%. Renewal revenue is at an ARR of over ₹ 210 Cr, the renewal book operates at 90% contribution margin and will be the biggest driver of our long-term profitability."

He added, "Paisabazaar has successfully navigated COVID and now is over ₹ 8,400 Crores ARR. Our new initiatives, PB Partners (B2B2C) has become the market leader within 6 months of launch with an investment of under $10Mn. PB Corporate is the fastest growing Corporate/MSME insurance business in the country and our UAE business is rapidly approaching market leadership. We have invested approximately ₹200 Crores in our brand and these new initiatives which will be value accretive in years to come."

Alok Bansal, Executive director and group CFO, added "Policybazaar premium has grown 45x in the last 8 years and Paisabazaar disbursals are 46x higher over the last 7 years. Given the low levels of insurance and credit penetration in the country and increased digitization, we are very confident of our future growth and profitability prospects."

Policybazaar & Paisabazaar are the flagship platform of PB Fintech and are India's largest online platform for insurance and lending products according to Frost & Sullivan.

In Fiscal 2020, Policybazaar was India's largest digital insurance marketplace among all online insurance distributors with 93.4% market share based on number of policies sold.

Paisabazaar was India's largest digital consumer credit marketplace with a 53.7% market share, based on disbursals in Fiscal 2021. It is also widely used to access credit scores.

PB Fintech was listed on the stock exchanges on 15 November 2021 at Rs 1150, a premium of 17.35% to the issue price of Rs 980. The initial public offer (IPO) of PB Fintech received was subscribed 16.58 times. The issue opened for bidding on 1 November and it closed on 3 November. The price band of the IPO was fixed at Rs 940-980 per share.

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