PolicyBazaar Shares jump over 15% in just two days

Shares of PolicyBazaar Fintech, which runs insurtech startup Policybazaar and lending platform Paisabazaar, continued their winning streak for the second straight session. The shares jumped as much as 8% to INR 466.95 during Friday’s (November 25) intraday trading on the BSE. On Thursday, PB Fintech’s shares rose 7.8% to 432.20 after WF Asian Smaller Companies Fund bought a 1.5% stake in the startup worth INR 271 Cr in two separate bulk deals. PB Fintech shares have surged about 15% in two days.

An insight into PolicyBazaar Fintech

“The PB Fintech IPO came out with unrealistic valuations, similar to other new-age businesses during the period of technological euphoria. As the easy liquidity cycle turned with unexpected speed, we saw a sharp fall in all new-age business stocks”, said Santosh Meena, Head of Research, Swastika Investmart, adding, “PB Fintech has fallen roughly 75% from its high. The sharp jump in losses in FY21 and H1FY23 gave momentum to the fall in stock prices.”

“Being market leader with 90% market share in the digital insurance market under Policybazaar, and 50%+ market share in the digital consumer lending market under Paisabazaar, it has a high efficient asset light business model to scale it multi x, hence considering these rationales, we believe it’s a right time to look into this story with limited calculated downside risk and followed by strong upside in long term,” stated Prashanth Tapse, Research Analyst Sr VP Research, Mehta Equities.

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Policybazaar Fintech stock shares

JM Financial assigns the stock a ‘buy’ rating with thetarget price of Rs 910, a 126% upside. “We expect the company to achieve profitability in Q4FY23 as Q4 is seasonally a very strong quarter for insurance,” it said.

“I believe the worst is over for some of these new-age companies, as US bond yields appear to be peaking and investors seek valuation relief after a free fall. We are seeing some hedge fund buying in PB fintech in the last few days, which is an encouraging sign. There is still uncertainty about their long-term outlook; therefore, conservative investors should stay away from such companies, while aggressive investors may buy this stock, where Rs 600 looks like an imminent target,” added Meena of Swastika Investment.

“On long term PB Fintech has bright prospects going forward with all industries growth rationales and discounted valuations, risk seeking investors can consider accumulating this only for the long term with a possible 15-20% upside from the current levels and near term there would be some volatility due low confidence in loss making new age tech businesses,” said Tapse of Mehta Equities.