PB Fintech's Q2 FY26: A Quarter of Resilient Growth and Strategic Profitability

PB Fintech Limited, the parent company of Policybazaar and Paisabazaar, has reported a robust performance for the second quarter of Fiscal Year 2026 (Q2 FY26), demonstrating significant growth across its core businesses and new initiatives. Despite navigating unexpected regulatory changes, the company showcased remarkable resilience and a clear path towards sustained profitability. The consolidated revenue for the quarter stood at ₹1,614 crore, marking a strong 38% year-on-year (YoY) increase. This impressive top-line growth was complemented by a substantial improvement in profitability, with the consolidated Profit After Tax (PAT) soaring by 165% YoY to ₹135 crore. This translates to a PAT margin of 8% in Q2 FY26, a significant turnaround from a negative 73% in Q2 FY22, highlighting the effectiveness of the company's long-term strategies.

Segmental Performance and Growth Drivers

The growth narrative for PB Fintech in Q2 FY26 was largely driven by its core online insurance business, which saw a 36% YoY increase in revenue. The online protection business, a key focus area, grew by an impressive 44% YoY, with health insurance premiums alone surging by 60% YoY. This strong performance in protection was particularly notable given the GST changes announced in September, which could have dampened consumer demand. Management highlighted that despite these changes, demand remained robust, indicating strong underlying market interest and the company's ability to adapt swiftly.

In contrast, the core credit revenue experienced a 22% YoY decline but showed signs of stabilization with a 4% quarter-on-quarter (QoQ) growth. This segment has faced headwinds due to higher Non-Performing Asset (NPA) rates, which impacted partner profitability and subsequently the company's trail revenue. However, PB Fintech is proactively addressing this by doubling down on risk assessment and leveraging alternate data for improved credit quality. The renewal/trail revenue, a crucial driver of long-term profit growth, reached an Annual Recurring Revenue (ARR) of ₹758 crore for the quarter, up from ₹516 crore in Q2 FY25, representing a 39% YoY growth in the 12-month rolling basis.

New Initiatives and Strategic Expansions

The company's new initiatives played a pivotal role in its overall growth, with this segment's revenue expanding by 61% YoY. The adjusted EBITDA margins for new initiatives improved significantly from -12% to -4%, with management guiding towards near-zero losses by FY27. This progress is largely attributed to the strong performance of PB Partners, the agent aggregator platform, which has consolidated its leadership and accelerated its growth momentum. With over 380,000 advisors operating across 19,000 pin codes, PB Partners is driving deep penetration in Tier 4 and 5 towns and diversifying its business lines.

PB Fintech's UAE operations also demonstrated consistent strength, with insurance premium growing by 64% YoY. This segment has been consistently profitable for three quarters, aligning its focus towards health and life insurance, similar to the India business, and leveraging cross-border opportunities. The company has also expanded its financial wellness platform by launching FDs and Bonds, delivering smart investment insights to 7 Lac consumers through PB Money. Furthermore, Paisabazaar has ventured into offline retail with its first store in Gurugram and plans to open 100 more across India, aiming to enhance trust and market reach.

Risk Management and Operational Efficiency

PB Fintech continues to prioritize robust risk management and operational efficiency. In the credit segment, the company is building a sophisticated risk framework by integrating bureau data with alternative sources to enhance credit assessment, detect fraud, and improve decision-making for its partners. This proactive approach is crucial, especially given the challenges faced in the credit market.

In the insurance sector, the company's fraud detection framework led to significant results, including the initiation of life insurance cancellations based on recommendations from the framework in FY25. This resulted in a notable drop in deaths per 10,000 policies for the savings business, underscoring the effectiveness of its risk mitigation strategies. Operationally, the company's focus on cost efficiency has led to improved marketing and call center efficiencies, contributing to better overall margins.

Outlook and Investor Confidence

PB Fintech's Q2 FY26 results reflect a company that is not only growing rapidly but also strategically building a sustainable and profitable business model. The management's transparent communication regarding challenges, coupled with clear guidance on future profitability targets for both the overall business and new initiatives, instills confidence. The company's commitment to expanding its market leadership, diversifying its product offerings, and leveraging technology for enhanced customer experience and risk management positions it favorably for continued success in India's underpenetrated financial services market. The strategic clarity and disciplined execution observed in this quarter reinforce the company's potential for long-term value creation for its stakeholders.