Shares of PB Fintech jumped 7% to hit the day’s high of Rs 996 on the NSE on Monday after the insurance regulator upgraded the license of the company’s wholly-owned subsidiary Policybazaar Insurance Brokers Private Limited to ‘Composite Insurance Broker’ from ‘Direct Insurance Broker’

The Policybazaar operator informed about the development on Friday after market hours. The in-principle nod will allow the online insurance aggregator to deepen the insurance penetration in the country by bringing more technology, process control and data analytics-based innovation into reinsurance capacity, the company filing said.

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In its stock review, brokerage Morgan Stanley reiterated its ‘Equal Weight’ rating on the counter while suggesting the target price at Rs 1,010. The above move will likely enable the company’s entry into reinsurance broking, Morgan Stanley said, adding that the company will be able to now bring in more technology, process control and data analytics-based innovation into a reinsurance capacity.

Reinsurance pricing for Policybazaar-originated business could improve from here, the US brokerage said further.

The company posted its first-ever consolidated net profit in the December ended quarter at Rs 38 crore, against a loss of Rs 87.3 crore a year ago, and a loss of around Rs 20 crore a quarter ago. Revenue from operations increased 43% year-on-year (YoY) to Rs 871 crore. Policybazaar received target upgrades from top brokerages served following the earnings outcome.In its post-earnings stock review note, BofA raised the target while retaining its buy rating on the counter. Kotak Institutional Equities also maintained a buy view relying on its broad-based growth story to sustain despite headwinds in select segments. Nuvama raised the price target though it reduced the rating on the stock’s rich valuations The stock has surpassed targets by all these brokerages.

BofA maintained a ‘Neutral’ stance on the counter even as it hiked the target price to Rs 995 from an earlier target of Rs 840. Kotak Equities retained its ‘Add’ rating on the Policybazaar counter estimating a fair value of Rs 950.

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