An insurance stock surged 11 percent in Wednesday’s trade after Motilal Oswal issued a bullish report, projecting over 24 percent upside potential. The upbeat outlook from the brokerage firm sparked renewed investor interest, driving strong momentum in the stock.
Price Movement
During Wednesday’s trading session, Niva Bupa Health Insurance Company Ltd reached an intra-day high of Rs.86.46 per share, rising 11.4 percent from its previous close of Rs.77.62 each. The shares have retreated since then and currently at Rs.81.25 apiece.
Brokerage Target
Shares of recently listed Niva Bupa Health Insurance Co. jumped on Wednesday, April 23, after Motilal Oswal initiated coverage with a “buy” rating. The brokerage set a price target of Rs.100 apiec, signaling strong growth potential. This implies an additional upside of approximately 24 percent from current market price.
Rationale For Rating
Motilal Oswal anticipates Niva Bupa Health Insurance to maintain its strong growth momentum through financial year 2025, supported by a robust performance between 2022 and 2025. The brokerage expects the company’s Gross Written Premium (GWP) to grow at a Compounded Annual Growth Rate (CAGR) of 25 percent over the financial years 2025 to 2028.
Motilal Oswal projects that the company will achieve a 25 percent CAGR in Gross Written Premium and a 32 percent CAGR in Net Profit during financial year 2025 to 2028, reflecting confidence in the company’s growth trajectory and operational efficiency.
The brokerage highlighted that Niva Bupa benefits from an experienced leadership team and the strategic partnership with global health giant Bupa. This association offers valuable underwriting expertise, deep insurance industry experience, and strong distribution capabilities. These advantages are seen as key contributors to Niva Bupa’s financial strength and long-term growth.
Earnings Report
According to its latest financial update, Niva Bupa Health Insurance Company Ltd reported consolidated revenue of Rs.1,258 crores in Q3 FY25, reflecting a 23 percent rise from Rs.1,026 crores in Q3 FY24. Additionally, the company’s net profit surged by 160 percent to Rs.13 crores, compared to Rs.5 crores during the same quarter of the previous year.
Ratio Analysis
The company has a Return on Capital Employed (ROCE) of 6.48 percent and a Return on Equity (ROE) of 7.28 percent. Its Price-to-Earnings (P/E) ratio stands at 86.09, higher than the industry average of 29.53. Furthermore, the company maintains a current ratio of 0.23, a debt-to-equity ratio of 0.12, and an Earnings Per Share (EPS) of Rs.0.9.
Written by – Siddesh S Raskar
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