Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PB Fintech Ltd (BOM:543390, Financial) reported a 69% year-on-year growth in new premium for the health and life insurance business, indicating strong performance in its core segment.
- The company's total insurance premium for the quarter reached INR5,450 crores, with an annual run rate (ARR) of almost INR22,000 crores.
- New initiatives grew by 87% year-on-year and are now contributing positively without incurring losses.
- The company achieved a 90% customer satisfaction (CSAT) score, up from 87% at the time of its IPO, reflecting improved customer service.
- PB Fintech Ltd (BOM:543390) reported a significant improvement in PAT by INR72 crores, reaching INR51 crores for the quarter.
Negative Points
- The company experienced slightly higher operating expenses, which increased by about $4 million to $5 million for the quarter.
- The credit business faced challenges, with a year-on-year decline of 8%, despite a 9% quarter-on-quarter increase.
- There is a slowdown in the unsecured credit segment, impacting the Paisabazaar side of the business.
- The company anticipates a potential base effect issue in fiscal year '26, which might affect growth rates.
- PB Fintech Ltd (BOM:543390) is facing challenges in the credit business due to elevated delinquency numbers at the industry level.
Q & A Highlights
Q: What corrective actions are planned for Paisabazaar, and what is the outlook on credit disbursals?
A: Naveen Kukreja, CEO of Paisabazaar, explained that the slowdown in unsecured loans is lasting longer due to high growth in previous years, regulatory guidance, and elevated delinquency numbers. The company is investing in secured growth, with secured loans now contributing 34% of disbursals. Operating expenses will be moderated to align with revenue expectations.
Q: How is the core insurance business performing, and what are the expectations for contribution margins?
A: Sarbvir Singh, Joint CEO of PB Fintech, noted that both life and health segments are growing strongly. The contribution margin is impacted by the growth in fresh health insurance, which has lower first-year margins. The company expects a similar improvement in contribution margins in the second half as seen last year.
Q: What is the growth outlook for PB Fintech, and how does the company plan to manage potential base effects in future growth rates?
A: Yashish Dahiya, CEO, stated that while current growth rates are high, the company targets a medium-term growth rate of 30%. The focus is on maintaining strong growth without compromising on operational efficiency.
Q: Can you provide an update on the PB Health initiative and its potential impact on PB Fintech?
A: Yashish Dahiya clarified that PB Health is not a Policybazaar subsidiary but a separate venture aimed at improving claims experience. Policybazaar's involvement is to benefit from improved customer experience, potentially driving higher insurance sales. The venture is still in the planning stages, with no final decisions on structure or investment.
Q: How is the PoSP business performing, and what is the company's strategy in this area?
A: Yashish Dahiya explained that the PoSP business is focused on scale rather than high margins. The business has grown rapidly and is now profitable, with a focus on expanding into smaller geographies and improving platform capabilities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
