Niva Bupa Gets 'Buy' As Motilal Oswal Initiates Coverage, Sees 29% Upside

Niva Bupa has undergone a digital transformation to enhance customer experience in areas of policy management, claims tracking, telemedicine, etc. These initiatives should help the company expand its reach, attract tech-savvy customers, reduce operational costs and improve servicing capabilities. The company has a well-diversified distribution model, with agents/corporate agents/ brokers/direct contributing 30%/28%/29%/13% of the mix in 9M FY25. While agent productivity has been one of the highest levels in the industry, its strong relationships with brokers, banks and web aggregators have helped Niva de-risk its mix..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.We believe Niva Bupa Health Insurance Company Ltd. has a strong position to harness the growth opportunity in the health insurance industry, backed by product innovation and customer base expansion. Investments in technology will give results in terms of operational efficiency and better profitability. Excluding the 1/n impact, we expect Niva to report FY25-28E gross written premium/PAT CAGR of 25%/32%. While the claim ratio is expected to rise with scale, operational efficiency will offset the impact, leading to a pre-1/n combined ratio of 93.4% in FY28 (from 98.8% in FY24). On IFRS basis, we expect a CAGR of 27%/34% in insurance revenue/PAT over FY25-28. We initiate coverage on the stock with a target price of Rs 100, based on 40x FY27E P/E on IFRS PAT..Key downside risks: High competitive intensity – The Indian health insurance sector has several SAHIs, general insurers and new-age InsurTech players vying for market share, increasing pricing pressure.Highly regulated industry – IRDAI’s intervention in product structures, pricing, claim settlement, etc. can impact profitability and innovation.  Fraud incidences by customers and hospitals – Inflated claims, falsified medical reports and hospital insurer collusion are significant challenges.  Healthcare inflation – Annual cost increases in hospitalization, diagnostics and treatments can lead to higher claim payouts..Click on the attachment to read the full report:.Yes Bank Upgraded To 'Reduce' Rating By ICICI Securities After Q4 Results —Here's Why.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Niva Bupa Gets 'Buy' As Motilal Oswal Initiates Coverage, Sees 29% Upside

Niva Bupa maintains growth and profitability trajectory, hence Motilal Oswal initiates coverage with Buy rating

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