Niva Bupa shares soar 15% on strong Q4; can they revisit 52-week high?

Shares of Niva Bupa Health Insurance Company Ltd climbed 15 per cent in Thursday's trade on strong set of March quarter results. Niva Bupa reported an earnings beat of 9 per cent, with its PAT rising 31 per cent YoY despite the impact of the 1/n rule transition. On a like-for-like basis, the claims ratio was moderate at 52 per cent during the quarter, driving a beat on underwriting profits. A couple of brokerages suggested targets in the range of Rs 85-100 on the counter against a 52-week high of Rs 109.41 hit in December last year.

"Niva Bupa also clamped down on expenses to drive down the EoM ratio to 37 per cent in FY2025 from 39 per cent last year. The company remains on track to deliver strong growth and improvement in profitability over the medium term," Kotak said while suggesting a fair value of Rs 85 on the stock.

On Thursday, the stock rose a solid 15.12 per cent to breach this target. The scrip hit a high of Rs 93.33, before trading at Rs 92.10 apiece by 10.30 am. 

Following its quarterly results, MOFSL said Niva Bupa is well-positioned to harness growth opportunities with a strategic global partner, a growing customer base, and innovative product offerings. The diversified channel mix will ensure improved scalability as the company moves toward geographic expansion, it said adding that measures taken to mitigate claim inflation will continue to aid loss ratios, while operational efficiency will lead to an improved expense ratio going forward.

"Backed by a strong performance in 4QFY25, we have upgraded our estimates under IGAAP, mainly on expense ratio and slightly higher growth. However, our IFRS estimates have broadly remained unchanged and we value the stock at 40x FY27E IFRS PAT to arrive at a fair value of Rs 100. We reiterate our Buy rating," it said. 

Arihant Capital Markets said Niva Bupa reported strong Q4FY25 growth, driven by strategic expansion in retail and group health segments. 

Disciplined underwriting, improved claims management, and tech-led analytics supported sustained profitability, it said.

"Despite industry concerns over claim rejections and hospital negotiations, the company maintained a competitive claim settlement ratio and expanded its distribution network. Looking ahead, it aims to scale preferred provider networks, optimize costs, and deepen reach in underserved markets," Arihant Capital Markets said.