PolicyBazaar shares drop 10% amid plans to foray into healthcare

Shares of PB Fintech, the parent company of PolicyBazaar, an online platform for insurance and lending products, fell as much as 10% to an intraday low of ₹1,545.05 on the NSE on Thursday. The decline follows news that PB Fintech is reportedly planning a foray into the healthcare sector by launching its chain of hospitals, sparking investor scepticism and adding pressure to the stock.

PB Fintech extended its losing streak to four consecutive sessions on the NSE today, dropping 21% from its 52-week high of ₹1,966.5, reached on September 20. Shares are currently trading at ₹1,614.60, down 6.24% from yesterday’s close of ₹1,722.05, marking the steepest decline within the NSE Nifty Midcap 100 index, which is down 0.56% at 60,125.05.

In an exchange filing yesterday, PB Fintech confirmed that it is exploring opportunities in the healthcare sector. The company emphasised that aligning interests between insurers and hospitals could enhance the claims experience for customers and improve insurance penetration. However, it was noted that there are no concrete updates to share at this time.

“We believe if claims were a quicker and smoother experience it would increase the number of people buying health insurance. It would be much better if interests were aligned between insurers and hospitals to give customers amazing claims experience and we believe that would grow insurance penetration…We are exploring this area in our last analyst call. We continue to explore but have no decisions to update. A decision if and when arrived will be informed to the stock exchanges,” the exchange filing read.

Recently, reports citing sources suggested that PB Fintech is planning to enter healthcare management services, adding a new offering for customers alongside its core business of selling insurance policies from multiple insurers across both life and non-life segments. PolicyBazaar has also reportedly partnered with various insurance providers to offer telemedicine-specific products, expanding its portfolio in the healthcare space and complementing its existing insurance offerings.

In Q1 FY25, PB Fintech posted a consolidated net profit of ₹60 crore, marking a significant turnaround from the ₹11.4 crore loss in the same quarter last fiscal. This also marked the company’s third consecutive profitable quarter. Revenue surged 52% year-over-year, reaching ₹1,010 crore compared to ₹666 crore in the same quarter last year. The adjusted EBITDA margin saw notable improvement, rising from -31% in Q1 FY24 to 12% in Q1 FY25.

However, the company's credit business experienced some moderation during the quarter. Loan disbursals totalled ₹3,140 crore, down from ₹3,542 crore in the same period last year, and the number of credit cards issued on behalf of banks fell to 1.3 lakh from 1.4 lakh. PB Fintech, commonly known as PolicyBazaar, offers financial solutions through its flagship brands, PolicyBazaar and PaisaBazaar.

Despite the recent downturn, PB Fintech's stock has surged 129% over the past year, resulting in a market capitalisation of ₹73,643.51 crore, and it remains a little less than double its IPO price of ₹980.