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HDFC Life, SBI Life and Max Financial Services continue to remain core names.
Uncertainty over PB FinTech's acquisition plans has increased volatility in the stock.
KEY POINTS
Potential regulatory action on commissions could significantly impact PB FinTech's profitability.
Valuations for HDFC Life, SBI Life, and Max Financial have now largely converged with similar EV multiples.
Axis Max Life reported the highest growth in January, with retail APE rising nearly 29%.
HDFC Life saw a decline in all premium metrics in January, signaling growth pressure.
Manas Agrawal, Vice President – Research Analyst at Bernstein, remains cautious on PB FinTech. He said recent uncertainty around acquisition plans has added to stock volatility, but the bigger concern is the possibility of regulatory action on commissions. Any such move could materially impact profitability, keeping investors on the sidelines.
Life insurance data for January shows mixed trends across players. According to Manas Agrawal, Vice President – Research Analyst at Bernstein, the gap in performance and valuation between leading life insurers has narrowed significantly.
Among the large insurers, HDFC Life, SBI Life and Max Financial Services continue to remain core names. Agrawal said, “I like HDFC Life, SBI Life and Max Life all three are perform rated.” While January data for HDFC Life appeared slightly weaker compared to SBI Life and Max Fin, Bernstein believes the overall franchise strength remains intact.
Valuations across the three insurers have largely converged, with similar embedded value (EV) multiples. This limits the scope for sharp re-rating in the near term. However, HDFC Life still enjoys an edge due to its strong distribution network, balanced product mix and consistent reporting standards.
Between the three, Bernstein prefers Max Financial, but sees all of them as fairly valued at current levels.
Axis Max Life delivered the best numbers among all life insurers despite a strong base. Its New Business Premium grew 24% during the month and total Annualised Premium Equivalent (APE) rose about 28%, while retail APE increased nearly 29%, reflecting broad-based growth across individual policies.
SBI Life slowed after delivering strong numbers in the previous months. In January, New Business Premium growth moderated to about 8%, while both total APE and retail APE grew by roughly 3%.
HDFC Life, reported a softer month. New Business Premium declined by about 3%, total APE fell nearly 6%, and retail APE contracted by around 7%, showing pressure on growth.
On PB Fintech, the brokerage remains cautious. The recent uncertainty around acquisition plans has added to volatility, but the bigger concern is potential regulatory action on commissions. These regulations could materially impact the company’s profitability, keeping investors on the sidelines.
The stock has already corrected meaningfully on a year-to-date basis, but in the absence of regulatory or cost clarity, it is difficult to take a clear view at this stage.
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