Motilal Oswal has issued a buy rating on Niva Bupa with a target price of ₹97 in its research report dated May 10, 2026. According to the brokerage's analysis, the recommendation is based on improved operational performance in the fourth quarter of FY26, with the stock valued at 30x FY28E IFRS PAT.
Niva Bupa reported 29% YoY growth in Net Earned Premium (NEP) to ₹19.7 billion in Q4FY26, which was in line with expectations. For the full fiscal year FY26, NEP grew 24% YoY to ₹60.7 billion. The company's loss ratio improved to 56.8% compared to the estimated 60.9%, while the operating expense ratio was 13.3% against the estimated 17%, with a 2% YoY decline in operating expenses to ₹3.1 billion, representing a 24% beat.
The commission ratio improved to 16.1% compared to the estimated 16.9%, benefiting from the passing of GST impact on distributors. According to Motilal Oswal's analysis, the rise in claims ratio was more than offset by operating efficiency, leading to a combined ratio of 86.1% versus the estimated 94.9%. The combined ratio for FY26 was 103.4% compared to 101.2% in FY25. Under IFRS, the combined insurance service ratio (CISR) improved to 97.4% in Q4FY26 versus 102% in Q4FY25, and for FY26, CISR improved to 101.4% versus 103% in FY25.
Motilal Oswal has raised its IFRS PAT estimates for FY27E and FY28E by 6% and 11% respectively, primarily driven by improved performance across key parameters in Q4FY26. The brokerage's revised estimates reflect the company's enhanced operational efficiency and better cost management during the quarter.
