#RevenueSurge

[secretstalks]

Policybazaar growth strategy and financial results

PB Fintech, the parent company of Policybazaar, reported robust financial performance for the April–June 2024 quarter. The company's revenue surged 52% year-on-year to Rs 1,010 crore, a notable increase from the previous year. Additionally, PB Fintech achieved a net profit of Rs 60 crore, reversing a loss of Rs 12 crore from the same period last year.

Despite the profit, PB Fintech opted to reinvest Rs 25 crore into its core online insurance business, aiming to enhance its capacity for growth. CEO Yashish Dahiya likened the company's growth phase to that of a child's, emphasizing the importance of not curbing growth investments. This strategic choice meant the company could have posted a higher net profit of Rs 90 crore but chose to prioritize expansion.

The company experienced a significant 61% year-on-year increase in total insurance premiums, reaching Rs 4,871 crore. This growth was primarily driven by strong performances in the health and life insurance segments. New premiums are growing at an impressive rate of 78%, double that of renewals.

However, the quarter saw a sequential revenue decline of 7.5% compared to January–March 2024, which Dahiya attributed to a seasonal uptick in health insurance purchases or renewals before the fiscal year-end.

In terms of expenses, employee benefits rose by 18% to Rs 455 crore, and advertising and promotional spending increased by 23% to Rs 245 crore. This rise in expenditure follows a period in FY24 when the company had reduced advertising costs to focus on profitability.

Policybazaar's impact is substantial, representing 15-20% of insurance claims submitted to healthcare facilities. The company plans to leverage this scale by establishing direct relationships with hospitals and is set to introduce a new product, although specifics were not disclosed. Dahiya highlighted a shift towards valuing customers based on their lifetime value, starting with their insurance premiums.

In addition to Policybazaar, PB Fintech operates Paisabazaar, a lending platform. Paisabazaar's business grew by 8% during the quarter, which was below the projected 10% growth. The platform facilitated loan disbursements of Rs 3,100 crore, marking a 25% decline from the peak of Rs 4,139 crore recorded in the previous year. Paisabazaar is focusing on improving its secured lending segment, such as home loans and loans against property, though progress has been slow.

PB Fintech also wrote off Rs 44 crore related to its investment in MyLoanCare, an NBFC previously linked with Paisabazaar. Dahiya admitted that the company had overextended by acquiring a 70% stake in MyLoanCare, suggesting that a stake of 22-35% would have been more appropriate.

Looking ahead, PB Fintech will not distribute cash to shareholders via dividends or buybacks until March 2026, despite having cash reserves exceeding Rs 5,200 crore. The company also announced the appointment of Dhruv Shringi as an independent board director. Shringi, the founder and CEO of Yatra, previously worked with Dahiya at Ebookers.

Following the earnings announcement, PB Fintech’s shares rose 8%, reaching a new 52-week high of Rs 1,552 on August 7.

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