Motilal Oswal's research report on Niva Bupa
Niva Bupa posted a 20% YoY growth in NEP to INR12.2b (in line) in 1QFY26. The loss ratio at 77.9% (our est. of 72.3%) increased 1,390bp YoY due to: 1) the impact of 1/n, 2) higher reserving led by suspension of auto adjudication of claims, and 3) the 50:50 URR accounting impact of large group business written in 4QFY25. This was offset by a 330bp improvement in expense ratio, leading to a combined ratio of 117% (vs. est. of 115.4%), up 1,090bp YoY. The loss for 1QFY26 was INR914m vs. the loss of INR188m in 1QFY25 (vs our estimated loss of INR525m).
Outlook
Our IFRS estimates have broadly remained unchanged, and we value the stock at 40x FY27E IFRS PAT to arrive at a fair value of INR101. Reiterate BUY.
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