Interestingly, unlike many other tech stocks, the PB Fintech stock price performed very well over the last one year, buoyed by the fintech’s financial profits and overall growth of the business.
For context
September last year around this time the stock was trading at around Rs 760.
Understanding the stock movement
There was selling pressure on the stock after a CNBCTV18 news report said that the company could get into the healthcare business with its own hospital chain.
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Late evening on Wednesday, the Gurugram-based company issued a clarification to the exchanges saying that it is evaluating some opportunities in the healthcare space but nothing has been finalised.Industry insiders pointed out that investors were spooked at the fact that the fintech which runs an insurance and credit marketplace wants to get into the healthcare business which is fragmented, has high operational costs and faces extreme competition. Interestingly, in January this year, the reverse happened when the insurance regulator granted a health insurance licence to Devi Shetty’s Narayana Health. Shetty runs the Narayana group of hospitals.
Industry insiders pointed out that investors were spooked at the fact that the fintech which runs an insurance and credit marketplace wants to get into the healthcare business which is fragmented, challenging and has extreme competition.
Adding context
Policybazaar, the insurance marketplace run by PB Fintech has been a big believer in the need for greater health insurance penetration in the country. The company spoke about this in the quarterly analyst calls as well.
Yashish Dahiya, chief executive officer, PB Fintech, said on August 7, after its June quarter earnings that there is a need for the healthcare industry to calculate how much value the healthcare service provider, the health insurance industry and the insurance distributor adds to the life of a customer.
“Those are the kind of issues people like me really get paid to think about. And that’s what we have been spending time on. We have had some good discussions. It’s too premature to kind of get into what and how yet; our effort is to make the life of the consumer much easier,” Dahiya had said then.
Company statement
PB Fintech on Wednesday clarified: “We believe if claims were a quicker and smoother experience it would increase the number of people buying health insurance. It would be much better if interests were aligned between insurers and hospitals to give customers amazing claims experience and we believe that would grow insurance penetration.”
But it clarified that such conversations are yet to mature.
Growing health business
In its June quarter results, PB Fintech said that its health and life insurance premium collection grew 78% year-on-year (YoY). Its overall insurance premium collection grew to Rs 4,871 crore.
The advantage of life and health products is that they are sticky, consumers tend to be associated with these products for their lifetime and Policybazaar gets a loyal customer base. Also, the company positions itself as selling these products which help keep Indians safe. Citing market data, PB Fintech said that 66% of Indians incur healthcare costs from their pockets. In the June quarter, PB Fintech reported a profit after tax of Rs 60 crore and total revenue of Rs 1,010 crore.
