Why did JM Financial upgrade PB Fintech to 'Reduce' from 'Sell'? Check TP

JM Financial Institutional Securities has raised its rating on PB Fintech, parent of Policybazaar, to ‘Reduce’ from ‘Sell’. The brokerage has also hiked the target to ₹1,610 per share from ₹1,550. While concerns around goods and services tax (GST) changes, distributor commissions, and execution risks at Bima Sugam have weighed on sentiment, analysts now see risk-reward improving after the correction. 

 

PB FinTech shares have fallen nearly 10 per cent since September 4, 2025, the day GST reforms were announced. At 12:03 PM, PB Fintech share price was trading 0.86 per cent higher at ₹1,693.15 per share. In comparison, BSE Sensex was down 0.05 per cent at 80,386.53. 

Why did JM Financial upgrade the target and rating on PB FinTech?

GST 2.0: Neutral to mildly positive

With GST on individual life and health policies (and reinsurance) reduced to zero, the focus has shifted to input tax credit (ITC). Since the zero GST regime also removes ITC benefits, insurers are likely to take a profitability hit, the extent of which depends on their product mix. Analysts expect this burden will gradually be passed on to customers through higher premiums — a trend that may already be underway. In the near term, however, commission rates could also see some dilution as insurers and distributors share the ITC impact.  Track Stock Market Live Updates

Bima Sugam: Opportunities vs execution risks

Bima Sugam India Federation (BSIF) has been formed as a “not-for-profit company” to establish a Digital Public Infrastructure (DPI) in the form of an electronic insurance marketplace.

 

But execution risks persist — the project has already been delayed by over 2.5 years, and questions remain over funding customer acquisition and assisted-sales support, a critical channel for life and health insurance. For comparison, Policybazaar alone spent ₹15,000 crore on digital marketing and support in FY25.

Outlook

PB Fintech is now valued at 50x Sep’27 EV/Ebitda, assuming sustained revenue growth near Q1FY26 levels. Analysts see upside capped by regulatory headwinds and muted savings demand but acknowledge reduced downside risk post-correction.