Shares of Niva Bupa Life Insurance were rolling in trade on May 8, surging as much as 14% after investors lapped up the stock after the company’s strong Q4 earnings show impressed the Street.
The health insurer’s net profit grew 31.2% year-on-year to Rs 206 crore for the quarter gone by, up from the Rs 157 crore that it reported in the year ago period. For the full fiscal, profit more than doubled to Rs 214 crore, in comparison to FY24’s Rs 82 crore.
Gross Written Premium (GWP) in the March quarter came at Rs 2,395 crore, marking a 36% on year growth. Not just that, the company also improved its retail health market share, albeit marginally, moving from 9.1% in FY24 to 9.4% in FY25.
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Operationally, its claims settlement ratio edged up from 91.9% to 92.4%, and its expense of management dropped from 39.3% to 37.4%, indicating better cost control.
Looking ahead, the insurer aims to strengthen its brand, scale up digital initiatives, and expand distribution channels. The company also emphasised its focus on customer-centric innovation, simplifying claims, and improving digital infrastructure for greater efficiency and scalability.
Meanwhile, the stock has been on an uphill ride for the past one month, notching an over 22% upmove in the period. With the surge in today’s session, the stock also moved past brokerage firm Kotak Institutional Equities’ price target of Rs 85.
Following the Q4 beat, Kotak retained its ‘add’ rating on the stock, stating that it believes Niva Bupa is well-positioned for strong growth, estimating a 26% GWP CAGR over FY2024–27. Kotak’s bullish is banked on Niva Bupa’s diversified product mix, focus on the mass affluent segment, and expanding distribution, which according to the firm, aid its earnings growth.
“Niva Bupa also expects rising operating leverage to push RoE into the high teens, aided by one of the best claims ratios in the sector,” Kotak added.
