PB FINTECH: PB Fintech Slides 5% Despite Robust Q4; Bullish Stance Maintained by Brokerages
The PB Fintech is the parent company of Policy Bazaar and Paisa Bazaar, reported Robust Q4 profit as Rs.60.51 cr from Rs.9.85 cr loss making in the previous quarter. Total revenue came 25.3% up as Rs.1089 cr from Rs. 869.1 cr in the previous quarter.
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On May 8, shares of PB Fintech, the holding company of Policybazaar and Paisabazaar, experienced a decline exceeding 5%, reaching Rs 1,178 per share, despite the company’s announcement of profitable performance for the second consecutive quarter in Q4FY24.
Similarly, Morgan Stanley reiterated an ‘equal-weight’ rating on PB Fintech, with a target price set at Rs 1,010 per share. Analysts highlighted the strong performance in the core business, driven by robust growth in insurance new business, and emphasized investors’ focus on the sustainability of premium momentum and the expansion of the credit business.
PB Fintech, which achieved break-even in the preceding quarter, returned to profitability in Q4FY24, reporting a net profit of Rs 60.19 crore compared to a loss of Rs 9.34 crore in the corresponding period last year. The company’s consolidated revenue also rose by 25.3% year-on-year to Rs 1,089 crore in Q4FY24 from Rs 869.1 crore in Q4FY23.
The firm’s insurance premiums for Q4FY24 totaled Rs 5,127 crore, resulting in an annual recurring revenue (ARR) of Rs 20,000 crore in insurance premiums. Growth was primarily driven by the expansion in new health and life insurance segments, with new premiums witnessing a significant increase of 47% year-on-year in the quarter ending in March.
Looking ahead, analysts at Citi anticipate strong momentum in PB Fintech’s long-term EPS accretive segments. They foresee a rise in the phygitally originated business mix, stable EBITDA margins at Paisabazaar, and robust traction in the PSOP business.
Despite the recent decline, PB Fintech’s stock has surged over 56% since the beginning of the year, outperforming the 2% rise in the benchmark Nifty 50 index.
Bharat Forge: Bharat Forge Stock Slips Before Q4; Kalyani Rejects Nephew and Niece’s HUF Claim
The Bharat Forge Chairman Baba Kalyani Rejected the division of Undivided Hindu family share of Kalyani Joint Family Assets. He appealed in the Court that his Nephew and Niece needed partition of HUF Shares in this Kalyani Joint Family Assets. The Court Decision is wait to see in coming days. The Bharat Forge share price down ahead of Q4 results in this week.
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On May 8, Bharat Forge shares continued their decline from the previous session, following reports regarding company chairman Baba Kalyani’s stance against sharing any portion of the Kalyani joint family assets with the children of his estranged sister, Sugandha Hiremath. This decline coincided with the anticipation of the company’s Q4 results, scheduled for release later in the day.
In an affidavit submitted to the civil court of Pune, Kalyani asserted that his nephew, Sameer Jai Hiremath, and niece, Pallavi Swadi, lacked the legal right to request the partition of the Kalyani Hindu undivided family’s (HUL) assets, as they are not considered members of the family under current law. Kalyani emphasized that Hiremath and Swadi cannot claim co-partnership in the Kalyani joint family, as they are inherently part of the Hiremath family by birth.
This legal dispute arose subsequent to Sameer and Pallavi filing a suit in a Pune court, seeking the partition of assets within the Kalyani family, which include Bharat Forge and other publicly listed and privately held companies.
Kalyani’s response forms part of an affidavit submitted in opposition to the siblings’ application for interim relief, requesting the court to prevent Baba Kalyani from engaging in any transactions related to the properties of the Kalyani HUF.
The Hiremath and Kalyani families are embroiled in a contentious legal battle concerning the ownership of shares in pharmaceutical firm Hikal Ltd and assets held by specific HUFs within the Kalyani joint family. This dispute extends to numerous real estate properties and collections of gold jewellery.
DR REDDY LAB: Dr Reddy’s Q4 Earnings Disappoint Brokerages Amid Growth Concerns
The DR REDDY Labs reported Q4 profit is robust reading, Netprofit Rs.1307 cr up from previous quarter is 36%, Revenue came as Rs.7083 cr Up from 12% in the previous quarter. EBITA Margin came as 26.5% from 25.5% in the previous quarter. But the Brokerages and Analysts expected DR Reddy Labs more invested in the advanced research technologies and it is down for Sales revenue in this quarter and upcoming quarter has more pipeline in the US Projects.
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Dr. Reddy’s Laboratories’ robust performance in the fourth quarter failed to generate enthusiasm among brokerages, who cautioned against the absence of immediate growth catalysts for the pharmaceutical giant. While Dr. Reddy’s continues its strategic focus on biosimilars and initiatives to fortify its presence in key markets, analysts foresee the realization of these benefits materializing only after FY25.
As in preceding quarters, the substantial contribution from the blockbuster cancer drug Revlimid significantly bolstered Dr. Reddy’s earnings for the January-March period. Nomura, a brokerage firm, attributed Revlimid’s contribution to supporting the company’s strong gross margin and operational performance in Q4.
Echoing this sentiment, Nuvama Institutional Equities highlighted the recurring significance of Revlimid, stating, “The US business benefitted from yet another quarter with Revlimid contribution ($110–130 million).” Revenue from the US market constitutes approximately 60% of Dr. Reddy’s total revenue.
For the March quarter of FY24, Dr. Reddy’s Laboratories reported a net profit of Rs 1,307 crore, marking a 36% increase from the corresponding period last year, slightly exceeding the estimated Rs 1,291 crore. Revenue stood at Rs 7,083 crore, reflecting a 12% growth year-on-year, albeit falling short of expectations. Nonetheless, the substantial contribution from Revlimid propelled profitability, leading to an expansion of the EBITDA margin to 26.4% in Q4 compared to 25.9% in the year-ago period.
Despite the commendable profitability, Nuvama’s analysis suggests that the core business’s EBITDA margin experienced a decline of 250–300 basis points year-on-year, standing at approximately 17%. This decline was attributed to elevated research and development (R&D) costs during the quarter, which amounted to 9.7% of total sales and weighed on the base EBITDA margin.
Nuvama anticipates that the elevated R&D expenditure, as a percentage of sales, will persist over the next few years due to Dr. Reddy’s pipeline for the Horizon 2 program, encompassing biosimilars and complex products. Furthermore, Jefferies anticipates pressure on the company’s EBITDA margin for FY25 due to a weak pipeline for US launches.
Looking ahead, Motilal Oswal Financial Services expects Dr. Reddy’s earnings growth to moderate to a 3.5% CAGR over FY24-26, partly attributable to the gradual consolidation of market share of the Revlimid generic. Nonetheless, the company’s endeavors to bolster its biosimilar portfolio and offerings through partnerships, R&D initiatives, joint ventures, and acquisitions are poised to yield results in the medium term.
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