Niva Bupa, a prominent player in the health insurance sector, has witnessed a remarkable surge in its share price, climbing 17% over the past month on the National Stock Exchange. On May 8, the company’s stock rose by 7.7%, with intra-day trading hitting a peak of 15%. This surge was largely driven by its impressive Q4 earnings, where net profit soared 31.2% year-on-year to Rs 206 crore, compared to Rs 157 crore in the same quarter last year.

Market Dynamics and Recent Decline

Despite the impressive gains, Niva Bupa’s share price dipped 1.86% today, settling at Rs 85.68 amid a challenging market environment influenced by geopolitical tensions between India and Pakistan.

Strong Performance Metrics

In the fourth quarter of FY25, Niva Bupa reported significant growth in several key metrics:

• Gross premiums written rose by 18.2% year-on-year, reaching Rs 2,078.7 crore, up from Rs 1,759.4 crore in the previous year.
• Net premium written increased by 21%, totaling Rs 1,672 crore compared to Rs 1,381.9 crore in Q4FY24.

However, it’s worth noting that the company’s underwriting profit took a hit, dropping 12.2% to Rs 57.6 crore from Rs 65.6 crore. Additionally, the operating profit fell sharply by 43.1%, declining to Rs 94.9 crore from Rs 166.8 crore a year earlier. On a positive note, Niva Bupa’s solvency ratio remained stable at 3.03% on a quarter-on-quarter basis.

Analyst Insights on Niva Bupa

According to the research firm Motilal Oswal, Niva Bupa earns a ‘Buy’ rating with a target price set at Rs 100, suggesting a 17% upside from its current valuation. The brokerage believes that the insurer is strategically positioned to capitalize on growth opportunities, thanks to a robust customer base, innovative products, and a strategic global partnership. The company’s diverse channel mix is expected to enhance scalability as it pursues geographic expansion. Additionally, ongoing efforts to mitigate claim inflation are anticipated to positively influence loss ratios, while improved operational efficiencies are projected to enhance the expense ratio in the future.

Stock Performance Overview

In terms of stock performance, Niva Bupa has experienced a 5.8% rise over the last five trading sessions. When looking at a broader timeframe, the stock has provided a 17% return over the past six months and a solid 16% over the last year. Year-to-date, shares have climbed nearly 4%.

This combination of robust earnings and strategic positioning indicates a promising future for Niva Bupa in the competitive health insurance landscape.