From Aggregator to Innovator: How PolicyX is Shaping India’s Insurtech... From Aggregator to Innovator: How PolicyX is Shaping India’s Insurtech Future Read more

Company Overview

PolicyX, founded in 2013 by Mr Naval Goel, is an IRDAI-approved and one of India's most credible digital insurance platforms. Companies headquartered in Gurugram provide end-to-end digital solutions for customers to select, compare, and purchase insurance policies across various segments, including life, health, and motor segments. Over the past 13 years, PolicyX has positioned itself as a customer-first brand that combines the reliability of expert-led advisory services with the efficiency of technology.

Business Model and Operations

PolicyX is an online insurance aggregator, which plays the role of mediating between the insurers and the seekers of policies. Its revenue model is majorly based on commission as a result of selling policies, renewal of policies, cross-selling policies and lead-based partnerships with insurance companies. It has recently entered the B2B business, which caters to corporate clients. Unlike many digital platforms, they rely heavily on automated sales funnels.

PolicyX has an advisory-based strategy (personalised advice with in-house experts) in place instead of aggressive selling along with lifetime claim guarantee and spam-free service without gimmicks. This ensures that trust is increased, the level of misselling is minimized as well as the conversion and retention rate (90%) which reinforces its image of being transparent and committed to the sales.

Industry Landscape

India's online insurance market is witnessing strong tailwinds, driven by increasing digital adoption, financial awareness and the government push toward financial inclusion. Insurance penetration in India is only 4 per cent of GDP which is significantly low compared to the global average of approximately 7 per cent; the market potential is also huge. Competitors of PolicyX like PolicyBazaar, Coverfox and InsuranceDekho are well established players in the market, but they are known by their heavy spending in the market, unlike PolicyX, which is characterized by customer oriented service offering, lean operations and an organic growth plan that does not involve excessive spending in the market.

Financial Performance

PolicyX demonstrates a high growth in revenue, massive increase in profitability, and a steep increase in EPS in FY24 after which earnings are expected to remain steady in FY25.

The Future Outlook: Projected Growth and Investment Case

PolicyX will reach its break-even point of 189-220 crore revenues and 19-33 crore PAT by FY30 due to a solid growth rate and increasing digital presence. The company has a strong long-term potential with valuations of ₹2,6423,963 crore over a bull situation with a share price of 832.

Assumptions We Made:

1. Revenue Growth Assumptions: PolicyX is currently witnessing significant early momentum and is expanding its reach into B2B insurance distribution. The industry is experiencing a growth rate of approximately 50% CAGR, indicating that the company's revenue is expected to rise rapidly. An infusion of ₹20 Cr in equity during FY26 will facilitate the acceleration of its network and technology expansion; consequently, we anticipate a sharp increase in revenue shortly, stabilizing at around approx 60% CAGR by FY30.
   
   2. PAT Margin: PolicyX is expected to sustain consistent profitability, with PAT margins projected to be between 10% and 15% until FY30. Historically, the company's PAT margins have averaged close to 15%, attributed to operational leverage and prudent cost management.
   
   3. Valuation Multiples (P/S): P/S multiples are anticipated to rise, aligning with the industry benchmark of 16, as PolicyX transitions from the initial phase to the growth and maturity phases.

Conclusion:

PolicyX, a popular, high-potential, and unlisted online insurance player, which can be offered at SharesCart, is becoming a strong competitor in the Indian insurtech sector with strong growth rates, efficient operations, and high profitability rates. With a 54% YoY revenue growth, no debt to equity, and penetration of Tier-2 and Tier-3 cities, PolicyX has a high likelihood of generating long-term value to investors, as an attractive opportunity at the initial stage of development, prior to a potential future listing.