Motilal Oswal has issued a buy rating on Niva Bupa with a target price of ₹92 in its research report dated January 29, 2026. According to the brokerage's analysis, the recommendation is based on the company's strong operational performance and growth prospects in the health insurance sector.
Niva Bupa reported 28% year-on-year growth in Net Earned Premium (NEP) to ₹14.5 billion in Q3 FY26, which was in line with expectations. For the nine-month period ending December 2025, NEP grew 22% YoY to ₹41 billion. The company's loss ratio increased to 72.3%, up 720 basis points year-on-year, while the operating expense ratio was 17.9% with 34% YoY growth in operating expenses to ₹3.2 billion.
The commission ratio improved to 18% compared to the estimated 19.3%, benefiting from the passing of GST impact on distributors. Operating expenses included a one-time labor code impact of approximately ₹200 million. Motilal Oswal's estimates for the quarter were largely met across key metrics, with the company demonstrating operational efficiency despite the challenging environment.
Following the Q3 performance, Motilal Oswal has cut PAT estimates for FY27/28 by 4% and 13% respectively, increasing the claims ratio by 150 basis points each. This revision has resulted in 11% and 7% cuts in FY27/28 IFRS PAT estimates. The brokerage values the stock at 30x FY28E IFRS PAT with the target price of ₹92, maintaining its bullish stance on the stock despite the recent quarterly challenges.
