ICICI Securities has recommended buying shares of Niva Bupa Health Insurance with a target price of ₹90. The firm believes Niva Bupa has shown strong growth, especially in its health insurance premiums, growing at around 40% annually between FY20 and FY25.
Thanks to its growing customer base and better management of funds, the company is expected to increase its profit margins and earnings. ICICI Securities expects Niva Bupa’s profit after tax (PAT) to grow by around 53% every year between FY25 and FY27 under the IFRS accounting system.
The report also explains how different accounting methods (like IGAAP and IFRS) impact how we understand the company’s long-term performance and costs. Niva Bupa’s wide distribution channels and recent price hikes (like many others in the industry) are also helping improve its profitability and reduce losses.
Outlook:
ICICI Securities projects a profit of approximately ₹4.7 billion for FY27 for Niva Bupa under IFRS. They have given the stock a higher price-to-earnings (PE) ratio of 35x, compared to 30x for its competitor Star Health, because of Niva Bupa’s faster growth rate. This valuation gives the company a total worth of ₹165 billion.
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Disclaimer: Investment tips and opinions shared by ICICI Securities and others are their own. Readers are advised to consult certified financial experts before making any investment decisions.
