PB Fintech Q2 FY26 earnings call

What moved the numbers, as management explained it

• New initiatives adj. EBITDA margin moved from -12% to -4% with 5% Contribution margin, lifted mainly by UAE turning profitable for 3 quarters (85-90% of NI Contribution margin)
• Core Credit revenue -22% YoY but +4% QoQ with QoQ disbursals +9% as bottom-out confirmed; trail revenue fell as partners' NPA burden shared (one-off)
• Renewals accelerated in Q2: 12-month rolling renewal trail ₹774 Cr; quarterly renewals ARR ₹758 Cr (vs ₹516 Cr Q2 LY); Health renewals +50% YoY
• Quarterly margin lift attributed by management to ₹30-40 Cr (1.5-2 days of revenue) timing between quarters - per management, do not extrapolate (one-off)
• GST change 3-22 Sept: 5 Sept and 22 Sept were the biggest demand days in Policybazaar history; conversion on 22 Sept strong; no commission impact disclosed

The numbers management led with

• Total insurance premium: ₹7,605 Cr in Q2 FY26 (+40% YoY, +15% QoQ)
• Consolidated PAT: ₹135 Cr (+165% YoY or 2.65x); margin expanded from 4% to 8%
• PAT as % of insurance premium: 1.77%
• Renewal ARR: ₹758 Cr in Q2 FY26, up from ₹516 Cr in Q2 FY25 (incremental ₹242 Cr)
• New initiatives revenue growth: +61% YoY; adj. EBITDA margin from -12% to -4%; contribution margin 5%

Guidance on this call

What changed since the Fri 1 Aug 2025 call

By business

Balance sheet, capex and funding

• ESOP cost: old scheme phasing out by FY28; new scheme started last year; net annual ESOP cost expected to stay similar from here

The industry, as management sees it

Management views India insurance as structurally underpenetrated, with the GST exemption on individual Health and Term premiums expected to be a multi-year tailwind for category awareness and conversion. Insurers are simultaneously consolidating distribution through digital and PoSP channels, and Policybazaar is positioning itself as a partner across underwriting, claims and customer-acquisition rather than a commodity lead source. The narrowing of hospital networks (and integration into care pathways) is expected to become a meaningful margin lever for the industry over time.

Risks management named

• GST-linked commission renegotiations with private insurers remain in closed dialogue
• Core Credit NPA rates ran higher than anticipated, leading to shared burden with lending partners
• Savings category remains stressed against a high Q2 FY25 base (Q3 FY25 already 10% below Q2)
• Indirect cost creep from new BU experimentation across Pensions, PB Money, NRI Health

Not answered directly

• Narrow-network product design and contribution impact
• Other expense line item +67% YoY (deferred)
• Paisabazaar segment EBITDA margin specifics (declined exact number)
• Cross-sell economics between fresh and renewal take rates
• Secret-sauce execution during GST transition

Asked for a number, answered without one

• Core Credit Contribution margin and EBITDA margin: Declined, citing too many parameters - Credit cards, Secured lending, Unsecured lending; 'giving a single number becomes very odd for such a large category'
• Paisabazaar adjusted EBITDA margin this quarter: Declined; said 'slight improvement' but 'improvement is limited, not a marked improvement'; 'don't want to be exact about the number'
• Sharp QoQ and YoY rise in other expenses (₹592 Cr, +29% QoQ, +67% YoY): Said 'we will get back to you' - did not quantify on call

Every question, with its answer

1. 1. GST impact on demand and commissions

   Sachin Salgaonkar, BofA

   Question. Any impact from the September 22 GST cuts on consumer demand and on commissions, given private insurers are reportedly reducing distributor commissions?

   Answer, Yashish Dahiya, Chairman & Group CEO. Demand has been very strong and surprising positively. On commissions, the picture is more complicated than media narratives; Policybazaar is a very large source of fresh Health and Term with superior business quality. Conversations with insurers, regulators, government and consumers are constructive, and management expects all three stakeholders (consumer, insurer, Policybazaar) to gain — explicitly framing it as not a zero-sum game.

   Follow-up. Net-net, should we expect commissions largely intact — a win-win?

   Answer. Yashish: 'Yes, we want to ensure that it's a win-win for both... All three will gain. Consumer, Insurance company, and Policybazaar. Because otherwise it's a zero-sum game.'

   Partly answered.

2. 2. EBITDA margin sustainability

   Sachin Salgaonkar, BofA

   Question. Adj. EBITDA margin improvement was strong, led by Core online. Is this momentum sustainable, given prior commentary that revenue growth is the focus and margins are derivative?

   Answer, Yashish Dahiya, Chairman & Group CEO. Don't read anything into quarterly margin moves; ₹1,614 Cr revenue x 2% is just 1.5-2 days of revenue. Tactical focus remains growth, with cost-savings below the contribution line providing some leverage. There has been no dramatic change in contribution margin.

3. 3. Pensionbazaar and PB Money update

   Sachin Salgaonkar, BofA

   Question. Update on Pensionbazaar and PB Money over the last 3 months — and should we expect incremental investments?

   Answer, Yashish Dahiya, Chairman & Group CEO. Total incremental investment in PB Money and Pensionbazaar put together is less than half a million dollars. Both remain at drawing-board stage; Yashish: 'don't expect anything from a results perspective, at least for a year... don't expect any significant loss either.' Santosh added PB Money has consolidated investments into one view with multiple insights; bonds and deposits launched at very early stage.

4. 4. Cross-sell opportunity post-GST

   Sachin Dixit, JM Financial

   Question. With GST exemption on the renewal book too, is there a substantial opportunity to cross-sell/upsell to existing customers, especially Term where the 18% GST cut reduces premium?

   Answer, Yashish Dahiya, Chairman & Group CEO. First priority is increasing renewal rates (number of policies); second is cross-sell. On Term specifically, they are actively pushing customers from the most popular ₹1 Cr sum assured to ₹1.5 Cr at ~₹100/month extra. Called these 'slow burns' — well-oiled but not rapid.

5. 5. Execution initiatives during GST transition

   Sachin Dixit, JM Financial

   Question. What initiatives did the team execute to ensure growth didn't fall apart after the GST announcement?

   Answer, Yashish Dahiya, Chairman & Group CEO. Yashish: 'The Master Chef never sells their secret sauce.' Added that there is no secret sauce — just hard-working people figuring out solutions in hours.

   Not answered directly.

6. 6. Premium reporting post-GST

   Sachin Dixit, JM Financial

   Question. Housekeeping: should we expect a step decline in reported premium once GST is removed from the premium slides?

   Answer, Yashish Dahiya, Chairman & Group CEO. From next quarter onwards, premium will be shared without GST; past periods will also be restated to be apples-to-apples.

7. 7. Narrow network Health policies

   Nidhesh Jain, Investec

   Question. Have you launched narrow network Health policies, and what is the share of these in the Health business?

   Answer, Yashish Dahiya, Chairman & Group CEO. Yes, 'Preferred network' policies live with many partners — currently 15-20% discount, with a rider limiting the network. Share expected to grow over time. Management is focused on making narrow-network also a better experience, not just a price play.

8. 8. Core Credit margins

   Nidhesh Jain, Investec

   Question. Can you share contribution margin and EBITDA margin for the Core Credit business?

   Answer, Yashish Dahiya, Chairman & Group CEO. Declined to give a single Credit number, citing the mix between credit cards, secured lending and unsecured lending. Said margins are not very different from market benchmarks.

   Not answered directly.

9. 9. Long-term PAT margin target

   Jayant Kharote, Axis Capital

   Question. PAT as % of premium is currently 1.77%. Where do you see this number in 3-5 years (e.g. FY30), factoring in the ₹1 Tn premium aspiration?

   Answer, Yashish Dahiya, Chairman & Group CEO. About 3% or so. Reaffirmed that ₹1 Tn may slip 1-2 quarters due to ~6% GST impact on accumulated look. Described the 3% as a robust number, 'these numbers don't change very easily.'

10. 10. Savings growth normalization

    Jayant Kharote, Axis Capital

    Question. Q4 last year Savings was already negative. As Savings base effect weans, should we model a return to 30%+ overall growth?

    Answer, Yashish Dahiya, Chairman & Group CEO. Without Savings, growth has been in the 35-45% band for 10 quarters and is expected to continue. Savings growth will naturally come back; quarter-on-quarter growth already visible. Paisa business has 'a lot of effort' going into QoQ growth recovery.

11. 11. Pension and Child Education progress

    Jayant Kharote, Axis Capital

    Question. Any update on Child Education and Pension? Is Savings climbing the way you expected?

    Answer, Yashish Dahiya, Chairman & Group CEO. Pension category started 3-4 quarters ago and continues to grow sequentially and YoY. Child Education (ULIP waiver-of-premium feature) has been broadened beyond education to home and retirement goals. Given overall Q2 softness in Savings, this line did not grow very dramatically but remains a key differentiator vs mutual funds.

12. 12. Contribution margin Q1 to Q2

    Neeraj Toshniwal, UBS

    Question. Contribution margin improved despite Health still growing at 60%+ YoY. What drove the Q1-to-Q2 change?

    Answer, Sarbvir Singh, Joint Group CEO. Margin moves driven by 2-3 days of issuance/payment timing — ₹30-40 Cr can shift quarter-to-quarter. Fresh Health runs at ~-20% contribution margin, but renewals growing ~50% offset. Sarbvir recommended always looking at the 12-month rolling number to strip out seasonality.

    Partly answered.

13. 13. New initiatives profitability timeline

    Neeraj Toshniwal, UBS

    Question. More colour on New Initiatives growth and net take rate — when can PoSP turn profitable?

    Answer, Yashish Dahiya, Chairman & Group CEO. PoSP grew 55-56% in Q2, driven by going deeper into smaller towns plus peer distraction (other players focused on corporate actions). On profitability, Yashish: 'in the normal course of things next year, our [PoSP] losses should be meaningless,' but declined to commit firmly, preserving strategic optionality.

14. 14. New initiatives premium breakdown

    Neeraj Toshniwal, UBS

    Question. Can you break down New Initiatives premium and renewals between PB Partners, UAE and Corporate?

    Answer, Sarbvir Singh, Joint Group CEO. Total premium: PoSP ~₹1,700 Cr, UAE ~₹415 Cr, Corporate ~₹230 Cr. New vs renewal mix roughly similar to Core Policy.

15. 15. PAT margin mix sensitivity

    Dipanjan Ghosh, Citi

    Question. How do you extrapolate the 3% PAT/premium by FY30 across Core vs New initiatives mix?

    Answer, Yashish Dahiya, Chairman & Group CEO. PoSP share is not expected to shift materially from here. The 3% is robust and not very sensitive to mix. The mechanism is renewal-reward economics on Health (paid annually, not upfront), making renewal revenue the predictable source that compounds. Sarbvir clarified: 'our objective is the ₹1 Tn premium. This [3%] is a by-product.'

16. 16. PoSP diversification and Savings hybrid

    Dipanjan Ghosh, Citi

    Question. Is PoSP mix still Motor-heavy? Is profitability similar across Motor and non-Motor? And what's the Savings hybrid strategy ex-linked?

    Answer, Yashish Dahiya, Chairman & Group CEO. PoSP remains Motor-majority; Policybazaar is the most diversified among players. Motor drives the above-average growth in PoSP. EBITDA economics not materially different across products; agent economics are the focus. On Savings, hybrid model is the growth lever — being expanded from top 10-12 cities to next 15-20 cities with lower advisor intensity.

17. 17. Other expense line item

    Kushagra Goel, CLSA

    Question. Other expense line item rose 29% QoQ and 67% YoY (₹592 Cr) — what sits here and how to think about it going forward?

    Answer, Sarbvir Singh, Joint Group CEO. Sarbvir asked for clarification on the line item number; asked the analyst to highlight. After the analyst specified ₹592 Cr up 29% QoQ, management said 'Maybe, we will get back to you' — explicitly deferred.

    Not answered directly.

18. 18. Take-rate compression levers and narrow network

    Manas Agrawal, Bernstein

    Question. Hypothetical take-rate compression with volume offset — what cost levers protect margins? Is take-rate distortion between fresh vs renewal changing the renewal-led profit build-up? And is the narrow-network policy a Policybazaar-owned PB Health product or a partner-led concept?

    Answer, Yashish Dahiya, Chairman & Group CEO. Conversations with insurers are about operating ratios, quality and growth — not take-it-or-leave-it commissions. PB's combined operating ratio is more favourable than other channels; claim settlement rate is higher; direct traffic builds insurer brand. Cost levers: marketing efficiency (direct traffic, growth-business leverage), call-centre efficiency, advisor productivity — all under continuous management. On narrow network: 'PB Health is just a word' — same concept; will leverage PB Health hospitals as they come online. On GWP excluding GST: take rate will optically look higher.

19. 19. Indirect costs, Paisabazaar margins, renewal split

    Madhukar Ladha, Nuvama

    Question. Indirect costs between Contribution and adj. EBITDA contained well — components, how to model them, and the Paisabazaar EBITDA margin (last quarter -20%) for this quarter? Also renewals split by New Initiatives.

    Answer, Yashish Dahiya, Chairman & Group CEO. Fixed costs cover brand, other people, office and central cost allocations. The firm is in growth-mode, experimenting with new BUs/products; costs should grow similar to past rates, maybe a little lower. Paisabazaar margin: 'slight improvement' but declined to give an exact number, citing limited magnitude of improvement. Renewal premium split reiterated: PB Partners ~₹180 Cr, UAE ~₹110 Cr, Corporate ~₹140 Cr.

    Not answered directly.

20. 20. PoSP and fresh Motor

    Shreya Shivani, Nomura

    Question. PoSP grew very well — is the PoSP model better suited for cracking fresh Motor, given strong car sales in October?

    Answer, Sarbvir Singh, Joint Group CEO. Neither PoSP nor B2C has high exposure to fresh/new car sales. Q2 PoSP growth was driven by overall market share gains (going to new geographies and deepening existing ones), not new cars. Stock of cars, trucks, autos and school buses dominates the business.

21. 21. Overall Motor growth

    Shreya Shivani, Nomura

    Question. What is overall Motor segment growth including PB Partners?

    Answer, Sarbvir Singh, Joint Group CEO. About 40% or so including PB Partners.

22. 22. FY27 profit guidance timing

    Shreya Shivani, Nomura

    Question. Given ₹1 Tn premium may shift 1-2 quarters, can ₹1,000 Cr net profit guidance for next year also be delayed?

    Answer, Yashish Dahiya, Chairman & Group CEO. Yashish: 'If there was a change, I would have said it.'

23. 23. PB Connect revenue and ESOPs

    Shreya Shivani, Nomura

    Question. PB Connect revenue last quarter was ₹43 Cr — what is it this quarter? And any update on ESOP payouts?

    Answer, Santosh Agarwal, CEO, Paisabazaar. PB Connect revenue Q2 FY26: ₹66 Cr, up 53% QoQ. On ESOPs, new scheme ramping up while old scheme phases out by FY28; annual run-rate expected to stay similar from here.

24. 24. Credit trail revenue recovery

    Ashwin Mehta, Ambit

    Question. Credit trail revenue has fallen. What initiatives are being taken to build a higher trail?

    Answer, Yashish Dahiya, Chairman & Group CEO. NPA rates were higher than anticipated, leading to softening of P&L for lending partners; Policybazaar shared the burden, hence softening of trail revenue. Going forward, doubled down on risk assessment and alternate data collection; better quality business for partners will translate into better trail revenue. Insight: 'being a bucket shop distributor is not sufficient.'

25. 25. PB Health operational update

    Ashwin Mehta, Ambit

    Question. Update on PB Health — when do we see first operations?

    Answer, Yashish Dahiya, Chairman & Group CEO. PB Health strategy has three layers: (1) narrow network with care pathways (primary/secondary/tertiary routing); (2) technology and hospitals layer — four facilities part-acquired/part-whatever; (3) eventual integration. Narrow network rollout will come before the owned facilities become live. Build is slow; likened to Pensionbazaar and PB Money pacing.

26. 26. Fixed cost growth trajectory

    Sanketh Godha, Avendus Spark

    Question. Non-contribution fixed costs grew ~15% YoY for the half. How should we model this — will it stay in this range?

    Answer, Yashish Dahiya, Chairman & Group CEO. 15% should stay around this range; could be 15-20%. As long as the company delivers 30% fresh growth, fixed cost is not the focus. If fresh growth slips consistently (not one quarter), they will look at cost side. Sarbvir added indirect cost should run at roughly half of revenue growth.

27. 27. New initiatives CM composition

    Sanketh Godha, Avendus Spark

    Question. New initiatives contribution margin is 5.5% — how much is PoSP vs UAE vs Corporate driving it?

    Answer, Yashish Dahiya, Chairman & Group CEO. Combination of all three. UAE has been profitable for 3 quarters, Corporate burns at similar levels, PoSP losses have reduced materially while scaling. New initiatives as a whole should be very close to zero adj. EBITDA next year (FY27). On overall P&L, New Initiatives is ~7.5% of total Contribution — 'becoming meaningless.'

28. 28. New initiatives EBITDA break-even timing

    Sanketh Godha, Avendus Spark

    Question. Will New Initiatives turn adj. EBITDA positive by FY29 or FY30?

    Answer, Yashish Dahiya, Chairman & Group CEO. Yashish corrected: 'I said FY27, not FY30. Next year, it should be very close to adj. EBITDA zero.'

29. 29. Hybrid mix and Health long-term plans

    Sanketh Godha, Avendus Spark

    Question. Hybrid as % of Core new business (was ~25-30% last quarter) and what share of Health's 60-65% growth came from long-term plans?

    Answer, Sarbvir Singh, Joint Group CEO. There is no YoY change in long-term vs short-term mix. There's no trick — it is genuinely new-customer acquisition. Teased a positive Q3 surprise on Health metrics. Narrow network can add an incremental layer; no specific quantification given.

    Follow-up. If narrow network picks up, is there a number you have in mind?

    Answer. Yashish: narrow network is about better SOPs and cost control; it's not happening at banks because 'maybe this is not as critical to their survival and to their mission as it is for us.' No quantified number provided.

    Partly answered.

30. 30. PoSP CM ceiling and UAE dominance

    Rahul Jain, Dolat Capital

    Question. Bulk of the New Initiatives CM upside — is it from PoSP scaling CM, or from other New Initiatives (UAE)?

    Answer, Yashish Dahiya, Chairman & Group CEO. Yashish: PoSP CM is only 1%. 85-90% of the 5% New Initiatives CM is coming from UAE. Everything else on CM is 0. Suggested UAE should be reclassified from New Initiatives to Core going forward, since its dynamics are similar to Core Insurance.

Topic by topic, in the order it was spoken

In their words