Shares of PB Fintech rose on Friday after Nomura cut its target price on the stock but retained its ‘Neutral’ rating.
The PB Fintech stock was trading 2.46% higher at Rs 1,020.50 on the NSE at 11:09 am. Nomura lowered its target price to Rs 1,100 from Rs 1,590.
In its October 8 note titled ‘What if...?’, Nomura said it had revised its financial model based on the consultation paper on insurance distribution reform. The brokerage said: "We trim FY28/29F net profit by 72%/51%; maintain Neutral with lower TP of Rs 1,100."
Nomura said its key changes included trimming premiums from the point-of-sales person (POSP) business, assuming the company exits the segment, while keeping PolicyBazaar, Dubai and the corporate segment unchanged. It also revised take rates based on the proposed commission caps and cut total expenses for FY28 and FY29 by 40% and 48%, respectively.
"The above-mentioned changes lead to 13%/19% cuts to our insurance premiums and 72%/51% cut to net profit over FY28-29F," the brokerage said.