Archive · 25 Sep 2026
Proposed commission limits threaten PB Fintech’s FY28 earnings
PB Fintech owns Policybazaar, which sells insurance online.
India’s insurance regulator has proposed limits on commissions.
Motilal Oswal says these limits could reduce the company’s insurance revenue in FY28.
Without changes elsewhere, its earnings could fall by 46%.
Cutting employee and advertising costs could reduce the decline.
The company may also find new ways to earn money, such as charging for services and reinsurance broking.
A major uncertainty is whether health renewal commissions would also be affected.
The rules are still a draft, so investors are waiting for the final decision.
Motilal Oswal retained its Neutral rating on PB Fintech and cut its target price to Rs 1,150.
The brokerage estimates proposed commission limits could reduce PB Fintech’s FY28 core online insurance revenue by about 30%.
Without cost or revenue adjustments, Motilal Oswal estimates a possible 46% decline in FY28 earnings.
Cutting employee and advertising costs by 20% could limit the earnings decline to about 30%, according to the brokerage.
The draft rules are expected to have their main impact from FY28, while management expects recovery toward similar levels by FY29.
- Who
- PB Fintech, the parent of Policybazaar, and brokerage Motilal Oswal are central to the assessment; the Insurance Regulatory and Development Authority of India proposed the commission changes.
- What
- Proposed insurance commission limits could reduce PB Fintech’s FY28 core online insurance revenue by about 30% and earnings by as much as 46%, according to Motilal Oswal.
- When
- The main impact is expected from FY28 if the proposals are implemented; Motilal Oswal expects no impact in FY27.
- Where
- The proposals concern India’s insurance market and PB Fintech’s online insurance business.
- Why
- Lower permitted commissions could reduce revenue, particularly in general insurance, although cost reductions, volume growth and new revenue streams may offset part of the impact.
Brokerage risk assessment
Management offset strategy
Revenue and earnings impact
Brokerage risk assessment
Motilal Oswal estimates proposed commission limits could cut FY28 core online insurance revenue by about 30% and earnings by 46% before adjustments.
Management offset strategy
Management expects to offset part of the impact through cost reductions, volume growth and additional revenue streams.
Timing of the impact
Brokerage risk assessment
Motilal Oswal expects PB Fintech to underperform until the final regulations are announced and sees the main impact from FY28.
Management offset strategy
Management expects no impact in FY27 and describes FY28 as a year of challenges and discovery, with a return toward a similar position by FY29.
Effect on insurance businesses
Brokerage risk assessment
The brokerage sees substantial pressure on general insurance net present value and identifies health renewal commissions as a key uncertainty.
Management offset strategy
The company is working with general insurance partners on a combined operating ratio model and expects lower commissions may be passed through to customers, supporting volume growth.
- Brokerage view
- Motilal Oswal retained a Neutral rating and expects PB Fintech shares to underperform until regulatory clarity.
- Revised target price
- Rs 1,150, nearly 5% below the stock’s Thursday closing price.
- FY28 core revenue impact
- Approximately 30% reduction under the proposed commission changes.
- FY28 earnings impact
- Potential decline of 46% without expense or additional-revenue adjustments.
- Cost mitigation
- A 20% reduction in employee and advertising costs could reduce the earnings cut to about 30%.
- General insurance impact
- The brokerage estimates general insurance net present value could fall to 35%-40% of current levels.
- Potential offsets
- Volume growth, cost reductions, service charges, reinsurance broking and possibly manufacturing.