PB Fintech doubles Q4 revenue; loss up by 3.4 times

PB Fintech reported a total income of Rs 591 crore in the fourth quarter of the fiscal year (FY) 2022, doubling the revenue of the same quarter a year ago.

The company, which was listed publicly in 2021, is known for its insurance-marketplace PolicyBazaar, and a personal finance platform, Paisabazaar.

However, PB Fintech reported a loss of Rs 219.6 crore in Q4 FY22, which was 3.4 times the loss in the corresponding quarter a year ago.

What happened in Q4 FY22?

PB Fintech's revenue from operations was Rs 540 crore, of which 71 percent came from existing business, and the remainder was from 'new initiatives'.

The existing business is 'EBITDA break-even', according to the management. EBITDA is short for earnings before interest, tax, depreciation and amortisation.

The new initiatives have scaled up by 37 times to Rs 154 crore and grew 209 percent sequentially. The investment in new initiatives was Rs 90 crore in Q4, FY 22.

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OK, what was the full year like?

PB Fintech's total income was Rs 1,550 crore in FY 22, up by 62 percent over the previous year. Again, its loss was Rs 832 crore, up by 5.5 times over the loss in FY 21.

The core insurance business reached breakeven, according to the management. "Credit core business

is decidedly moving towards profitability," it said, in the stock-exchange filings.

Of the operational revenue of Rs 1,425 crore in FY 22, nearly 16 percent came from 'new initiatives' and the rest from existing business. The company has earmarked Rs 171 crore, (3 percent of its cash reserves of Rs 3,700 crore) for new initiatives.

What are the new initiatives?

PB Fintech hasn't spelt them out. But it said it prefers to 'build' than 'buy' in the new areas. "We were not able to identify any inorganic growth opportunity where we felt convinced that buying overbuilding was the right decision for us," the management said.

But there are three new initiatives, of which it described one: a platform for independent sellers of insurance and other financial products. This app enables sellers to sell across products and suppliers, and manage customers.

Started in July last year, this initiative is used in 11,816 out of India's 19,100 pin codes, according to the stock-exchange filing. PB Fintech generated more than Rs 200 crore in monthly premiums in March 2022, it said.

So what?

PB Fintech didn't go for inorganic options that were valued between $200 million and $700million. "We instead attained the leadership position (organically) in under $7 million (in six months)," the stock-exchange filing said.

Broadly then,

PB Fintech's flagship product Policybazaar reported renewal revenue of more than Rs 250 crore in FY 22. Insurance premiums grew 46 percent year-on-year to Rs 6,975 crore in FY 22.

It has nearly 59 million registered customers, of which 11.8 million are transacting customers. Policybazaar has 93 percent of the online insurance-aggregator market in India, remember?

Paisabazaar's loan disbursals were at Rs 9,168 crore in FY 22, up 39 percent over the previous year. It added 5.8 million customers last year.

And PB Fintech will use a tight economic environment to invest and grow new businesses.