Niva Bupa share price rallies over 14% on strong Q4. Time to invest in this health insurance stock?

Stocks in focus today: Shares of Niva Bupa Health Insurance, a recent entrant on Dalal Street, jumped 14.13% in early trade on Thursday, May 8, to hit a 4-month high of ₹92.45 apiece, following the release of the company’s March quarter results (Q4FY25), which came in above Street estimates.

Niva Bupa net profit jumps 31% to ₹206 crore

The company reported a 31.2% year-on-year (YoY) increase in net profit, at ₹206 crore for the quarter ended March 31, 2025, compared to ₹157 crore in Q4FY24. The company’s PAT for FY25 rose to ₹214 crore, up from ₹82 crore in FY24, marking a 161% YoY growth.

In Q4FY25, Niva Bupa achieved a Gross Written Premium (GWP) of ₹2,395 crore, reflecting a 36% YoY increase. For the full financial year FY25, the company recorded a GWP of ₹7,407 crore, registering 32% YoY growth.

In terms of retail health market share, the company increased its share from 9.1% in FY24 to 9.4% in FY25, consolidating its position among the top players in the Indian health insurance sector.

Niva Bupa also improved its Claims Settlement Ratio from 91.9% in FY24 to 92.4% in FY25. Simultaneously, the company achieved a notable reduction in its Expense of Management, which dropped from 39.3% in FY24 to 37.4% in FY25.

Looking ahead, the company said it plans to invest in building a strong and differentiated brand, driving digital transformation, and expanding its distribution channels to further strengthen market presence and deliver superior healthcare protection to millions of Indians. “Our focus remains on innovating for the customer, simplifying the claims process, and strengthening our digital backbone to drive further efficiencies and scalability,” the company said in its Q4 earnings' filing.

Should you buy the stock after Niva Bupa shares after Q4

Following the company's Q4FY25 results, domestic brokerage firm Kotak Institutional Equities retained its 'Add' rating on the stock with a target price of ₹85 per share. However, the stock breached the brokerage’s target level during today’s session.

The brokerage stated that the company is well-positioned to deliver strong growth (26% GWP CAGR over FY2024–27E), continuing its market share gains through a diversified retail product portfolio, a focus on the mass affluent segment, and a well-balanced distribution mix. Improving operating leverage is expected to drive RoE expansion into the high teens over the medium term, supported by its best-in-class claims ratio.

Niva Bupa share price jumps 26% in less than 3 months

Niva Bupa Health Insurance’s share price has been gaining momentum on Dalal Street in recent months, delivering a 26% return in less than 3 months. The stock ended the last two months in the green and has extended the rally into the current month, already gaining an additional 12% so far.

Niva Bupa Health Insurance is a joint venture between the Bupa Group and Fettle Tone LLP, specializing in health insurance. The company made a decent debut on the stock exchanges on Thursday, November 14, 2024, listing at ₹78.14 on the NSE—a 5.5% premium over its issue price of ₹74.

The initial public offering (IPO), valued at ₹2,200 crore, was open for subscription from November 7 to November 11.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.