Paisabazaar is PB Fintech’s Achilles heel
Subscribe to enjoy similar stories. The September quarter (Q2FY25) result of PB Fintech Ltd was a mixed bag. Revenue from its core business of online insurance broking through Policybazaar.com grew 41% year-on-year to ₹624 crore.
The surge was aided by a 49% rise in insurance premiums collected online. Revenue rose at a slower rate than premium, indicating that take rates were lower, possibly due to an inferior product mix. For example, the commission on unit-linked insurance policies (ULIPs) tends to be lower than that on other life insurance products.
However, the overall performance of insurance broking was satisfactory. On the other hand, the core non-insurance business – Paisabazzar.com – saw revenue decline 7.14%, from ₹154 crore in Q2FY24 to Rs143 crore in Q2FY25. This could be a fallout of the slowdown in unsecured lending after the Reserve Bank of India tightened lending norms and raised the risk weights for personal and credit card loans from 125% to 150%.
Paisabazaar.com earns fees by providing a lending and credit card issuing platform to other financial entities. Management said it would focus on secured lending to compensate for the slow growth in unsecured lending. Also read: Titan faces pressure in solitaire Further, adjusted Ebitda (before employee stock option or Esop expenses) soared to ₹56 crore from ₹13 crore a year ago.
Esop expenses fell from ₹102 crore to ₹64 crore year-on-year. Management expects Esop expenses to flatten going ahead. The company posted profit before tax (PBT) of ₹60 crore against a loss of ₹21 crore a year ago.
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