Shares of PB Fintech fell to INR 1,628.3 apiece on the BSE today, down 1.5% from the previous close.
The share price drop came after brokerage firm Bernstein expressed caution over the company’s plans to venture into the healthcare sector.
Bernstein expects stock price to fall as much as $100 million if PB Fintech’s foray into healthcare doesn’t go as planned
Brokerage firm Bernstein has expressed caution over plans by PB Fintech, parent company of insurance giant Policybazaar, to venture into the healthcare sector. However, he capped the drop at $100 million if the foray doesn’t go as planned.
Last month, PB Fintech Group Chairman and CEO Yashish Dahiya told CNBC-TV18 that the company was considering making a one-time investment of $100 million for a 30% stake in a new healthcare company.
However, Bernstein analysts said the foray into the healthcare sector would be a step change from the company’s current asset-light model to a more asset-rich sector, Moneycontrol reported.
Shares of PB Fintech have been under pressure since it was reported that the company was considering a move into the healthcare sector. On September 26, the stock plunged as much as 10.3% during the intraday trading session following news of its foray into the healthcare sector.
The stock has finished in the red in 10 of the last 12 trading sessions.
Despite the volatility, Bernstein maintained his ‘outperform’ rating, saying the foray into the healthcare sector could further strengthen PB Fintech’s position on the Indian health insurance map.
The brokerage has set a price target of INR 1,720 apiece, implying an upside potential of 4% from the stock’s previous close, according to the report.
In an interview last month, PB Fintech co-founder and CFO Alok Bansal raised concerns that the company’s business model remains asset-light. Although the insurance aggregator is committed to improving the healthcare experience, it is not considering buying physical assets like hospitals, Bansal was quoted as saying.
Comforted by this, brokerage firm Jefferies, earlier this month, reaffirmed its “buy” call on PB Fintech at a price target of INR 1,800 a piece. This would imply an upside of around 9% from the stock’s last close.
PB Fintech recorded a consolidated net profit of INR 59.98 Cr during the June quarter (Q1) of the financial year 2024-25 (FY25), compared to a loss of INR 11.9 Cr during the quarter of previous year. This recovery is largely explained by robust growth in all business segments.
Shares of PB Fintech were trading 0.7% lower at INR 1,642.65 on the BSE at 2:45 pm on Thursday.