Niva Bupa Health Insurance Can Rally 22%, Says ICICI Securities As It Initiates Coverage With 'Buy' Rating

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ICICI Securities Report

We Initiate coverage on Niva Bupa with Buy rating; with target price of Rs 90 basis 35 times FY27E earnings per share of Rs 2.6 (IFRS)

Niva Bupa Health Insurance Company Ltd. has established track record of delivering growth, reporting a gross written premium CAGR of 46% between FY20-24. It turned profitable in FY23 and reported a PAT of Rs 125 million and Rs 819 million in FY24. In overall product mix, retail health forms 68.5% of the mix, group health forms 30% and balance is personal accident segment.

The company has seen improvement in its retail market share from 4% in FY19 to 9.1% in FY24 (9.4% in 11 MFY25). Overall market share has moved from 0.6% in FY19 to 1.9% in FY24 (2.2% in FY25). Levers of operating leverage available, strong growth in premiums were driven by lowering the expense ratio, while loss ratios remain elevated.

Niva Bupa has adopted a conservative investment management approach to provide the balance between yield enhancement and liquidity management and also enjoys strong solvency ratio of 303%.

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