Morgan Stanley: Morgan Stanley launches coverage on PB Fintech, FSN E-Commerce


Mumbai: Morgan Stanley views digital businesses as long-term bets.

The foreign brokerage firm launched a cover on Policybazaar’s parent company, PB Fintech and FSN E-Commerce Ventures, operator of an online cosmetics retailer.

, with “equal weight” ratings, as valuations reflect short-term prospects.

According to Morgan Stanley, PB Fintech is a low risk consumer loan distribution and insurance game in India and FSN E-Commerce is a business built on solid foundations.

ET examines Morgan Stanley’s investment logic on the two companies:

FSN e-commerce companies

CMP: 1,945.30

Target price: 2,183

Morgan Stanley said FSN could see the same trend happening in the fashion industry as seen in the beauty and personal care industry. “Along with the strong growth in beauty, fashion could follow the same scenario, achieving profitability faster than the market expects. We are bullish in the market, but the risk / reward ratio appears balanced in the current stock price, ”Morgan Stanley said.

The stock is up nearly 73% from its IPO price of 1,125. He said that FSN’s business model and positioning has the potential to generate stronger and sustainable growth.

“This could result in a 50% faster revenue CAGR in FY 21-27, which would bring the action up to our valuation of 3,627 bullish,” Morgan Stanley said.

PB Fintech

CMP: 935.35

Target price: 1,160

PB Fintech is a targeted player in companies with large and growing revenue pools and there is greater visibility on its path to profitability than in most fintech companies, Morgan Stanley said. “We expect FY27 market share in insurance and consumer credit to be almost five times higher than FY21 levels. We expect 40% CAGR of revenue for FY21 -27, “the company said.

Customer preference for online channels and marketplaces has increased, creating a significant long-term opportunity for PB Fintech, whose market share in these revenue pools is only around 1.2% and 0.8%, respectively, the company added.

However, PB Fintech is no longer in favor of investors since its listing. The stock is down 56% below its IPO price of 2,150.


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