Policybazaar parent’s loss rockets 15 times in Q3, revenue climbs 73%

PB Fintech Ltd, the parent of digital insurance distributor Policybazaar and loans marketplace Paisabazaar, reported high revenue growth but posted a much higher jump in its losses for the three months ended December 31, the first quarter after it went public.

PB Fintech’s losses shot up almost 15 times to Rs 298 crore during the third quarter from Rs 19.6 crore in the year-ago period.

The sharp rise in expenses that dragged the firm much lower into the loss puddle was due to a tripling of employee expenses, especially ESOP-linked costs. Advertising spends also trebled.

Meanwhile, revenue grew 73% to Rs 367.28 crore during the quarter.

The company’s share price declined 2.3% in morning trade on Tuesday in a Mumbai market that was down 0.57%. The company had declared its financials late night on Monday after trading stopped for the day.

Policybazaar’s shares are now about 11% lower than its initial public offering price and 40% lower than its all-time high touched shortly after it listed in November last year.

Other Key Highlights

1) Insurance premium grew 68% year on year to Rs 1,796 crore; Credit disbursals grew 94% to Rs 1,926 crore.

2) EBITDA loss rose from Rs 22 crore to Rs 318 crore.

3) ESOP-linked costs pegged at Rs 226 crore compared with Rs 24 crore in the year-ago period.

4) Policybazaar has 5.64 crore registered users, of which 1.11 crore have bought an insurance policy at least once.

5) Paisabazaar has 2.55 crore customers who have accessed their credit scores. Of these, 25 lakh have at least one transaction. 

Management commentary

Yashish Dahiya, Chairman and Group CEO of PB Fintech, said Policybazaar’s annual recurring revenue (ARR) is over Rs 8,000 crore, which is a growth of 60% year on year.

“Margins in our existing businesses were maintained at 40%. Renewal revenue is at an ARR of over Rs 210 crore, the renewal book operates at 90% contribution margin and will be the biggest driver of our long-term profitability,” he said.

He also said that Paisabazaar has successfully navigated COVID-19 and is now clocking an ARR of over Rs 8,400 crore.

“Our new initiatives, PB Partners (B2B2C) has become the market leader within six months of launch with an investment of under $10 million. PB Corporate is the fastest growing Corporate/MSME insurance business in the country and our UAE business is rapidly approaching market leadership,” he said.

Dahiya said the company has also invested approximately Rs 200 crore in its brand and the new initiatives, which will be value accretive in years to come.

Alok Bansal, Executive Director and Group CFO, said, “Given the low levels of insurance and credit penetration in the country and increased digitization, we are very confident of our future growth and profitability prospects.”

Aso read: LIC Enters into Marketing Tie-Up with Policybazaar