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Informist, Friday, Sept. 25, 2026

 

MUMBAI – Brokerage Motilal Oswal Financial Services reiterated its "neutral" stance on PB Fintech with a revised price target of INR 1,210 on the stock. This comes after the stock hit its lower circuit at multiple levels Thursday and ended 36% lower at INR 1,207.20. The stock plummeted in the aftermath of a consultation paper put out by the Insurance Regulatory and Development Authority of India, which sought to limit commissions earned by insurance distributors, among other measures to overhaul the insurance distribution framework.

 

If the IRDAI proposal is implemented in toto, it could result in a 30% hit to the company's core online insurance revenue in the financial year 2027-28 (Apr-Mar), the brokerage said, citing comments by the PB Fintech management during a call with sell-side analysts. This likely fall in core revenue is partly on account of a sharp potential fall in the company's general insurance economics. The net premium valuation of the general insurance business vertical could take a hit of 60–65% from current levels, the brokerage flagged in its key takeaways from the call. The company's life insurance net premium valuation is expected to be "in the same neighbourhood" but not the same, according to the company's management. However, the management believes potential savings of 10-15% and new prospective revenue streams such as reinsurance broking could offset some of the impact.

 

The management foresees no impact in FY27, expecting the proposed measures by IRDAI to be implemented from FY28, which it described as a "year of challenges and discovery". Among major risks, the management flagged the impact on health insurance renewal commissions, highlighting the uncertainty on whether the cuts would apply retrospectively to existing business or only to new business.

 

Accounting for a potential 30% hit to the company's FY28 online insurance revenue, Motilal Oswal's earnings estimates for the company for FY28 would decline 46%. This is without factoring any adjustments to the company's expenses or additional revenue streams highlighted by PB Fintech's management. However, assuming the company is able to cut down its employee and advertisement costs by 20% compared to current assumptions, the earnings cut would be about 30%, the brokerage said. Until the final regulations are announced, the brokerage expects PB Fintech's stock to continue underperforming.

 

Several international brokerages also cut their price targets for the stock. HSBC Securities changed its recommendation to "hold" and cut the price target by 45% to INR 1,150, according to media reports. The brokerage expects IRDAI's proposed measures to have a material impact on the company. The brokerage cut its estimates for the company's earnings per share by 56% for FY28 and 17% for FY29. Jefferies and Bank of America Securities cut their price targets on the stock by 25% to INR 1,540 and by 28% to INR 1,410, respectively, according to media reports.

 

At 1435 IST, shares of the company were at INR 1,161.60, down 4% from Thursday, on the National Stock Exchange. The stock has fallen more than 38% over the past two sessions. Nearly 39 million shares of the company have been traded so far on the exchange compared to over 15 million shares traded until the same time Thursday.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Shruti Nair

Edited by Rajeev Pai

 

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