Jefferies has maintained its 'Buy' rating on PB Fintech with a target price of ₹1,950, implying an upside of around 23% from current levels. According to reports from The Financial Express, the brokerage believes the recent valuation correction has created a disconnect between the stock price and the company's earnings trajectory. The stock has derated approximately 20% over the last six months due to concerns around commission regulations and founder exit, despite largely unchanged consensus earnings.
Jefferies estimates that the price is already factoring in a 10% commission cut from insurance regulations, limiting further downside if regulatory changes remain within expectations. As reported by The Financial Express, the brokerage noted that discussions with industry participants suggest the regulator could either defer upfront commissions or reduce commissions outright. However, Jefferies believes the business model remains largely intact, as renewal profitability is unlikely to change under either scenario, preserving the economics of PB Fintech's business model.
The brokerage expects PB Fintech to benefit from rising insurance penetration and growing renewal premium base, with insurance premiums projected to grow at a 33% CAGR between FY26 and FY29. According to The Financial Express, Jefferies forecasts revenue to increase from ₹6,794 crore in FY26 to ₹15,200 crore by FY29, while adjusted EBITDA is expected to rise from ₹722 crore to ₹2,920 crore during the same period. The company is currently trading at 53 times FY27 estimated EV/Adjusted EBITDA, even as Jefferies expects EBITDA to more than double between FY27 and FY29.
Jefferies believes PB Fintech is well positioned to absorb any temporary cash flow disruption from commission structure changes, with the company holding around ₹5,200 crore in cash. As reported by The Financial Express, the brokerage pointed out that deferred commissions would have no impact on the profit and loss account, as PB Fintech recognises the entire commission income upfront under its accounting policy, although cash flows would be delayed. The strong balance sheet provides ample financial flexibility even if upfront commission payments are deferred.
Jefferies addressed investor concerns around repeated founder stake sales, noting that founders Yashish Dahiya and Alok Bansal together now own 5% of the company compared with 6.3% two years ago. According to The Financial Express, the brokerage highlighted that only five key management personnel have left Policybazaar and Paisabazaar over the past five years and most have been replaced by internal talent. The company expects to deliver robust earnings growth over the coming years, supported by net profit projected to grow from ₹670 crore to ₹2,230 crore between FY26 and FY29.
