With a “Add” rating, JM Financial Institutional Securities has started covering Niva Bupa shares. The firm has set a target price of ₹88 per share, which represents a 10% increase from the current price. The company is worth 35 times the FY28e earnings per share (EPS) of ₹2.5, according to the brokerage.
Niva Bupa’s share price was up 0.65% on the BSE at ₹79.93 per share at 10:58 AM. At 81,860.76, the Sensex was up 0.11 percent in contrast.
Niva Bupa’s stock has increased by 9% during the last year, while the Sensex has increased by 0.37 percent.
What makes JM Financial optimistic about Niva Bupa?
robust mix of distribution
The brokerage claims that Niva Bupa, the third-largest standalone health insurer (SAHI) in India, benefits from a broad distribution mix of about 30/30/30/10 among individual agents and corporate agents, including banks, brokerages, direct channel, and others. Even with the possible liberalization of agent tie-ups and composite licenses, JM Financial anticipates that Niva Bupa will continue to increase its market share due to its diversified distribution.
There is still room for health insurance to expand.
The firm thinks that after the amortized premiums are in the base, the reported growth downturn that began in H2FY25 should return from H2FY26. With an average ticket size of ₹2,000, 570 million lives insured paid ₹1.2 trillion in premiums in FY24. Redseer predicts a 20% compound annual growth rate (CAGR) for FY24–28e when top-ups are more popular than government coverage. According to JM Financial, Niva Bupa would maintain a gross premium CAGR of 25% between FY25–FY28e before normalizing to 20%–25% over the medium term.
Over the past ten years, health insurance has grown at a 19% CAGR, while general insurance has grown at a 13 percent CAGR and nominal GDP has grown at an 11% CAGR. The retail market share of Standalone Health Insurer (SAHI) increased to 58% in FY25, while the group and retail categories grew at CAGRs of 18% and 17%, respectively.
Why Niva Bupa in particular?
According to the brokerage, third-party administrators (TPAs) like MediAssist suffer total addressable market (TAM) limits, while Star Health has a shrunken group book despite having strong retail moats among health-focused businesses. A wider path for growth and share gains is provided by Niva Bupa’s diverse mix and expanding banca ties, including the possible liberalization of agent tie-ups and composite licenses.
Suppressed growth due to 1/n accounting
As multi-year plans are amortized, growth optics were lowered by the adoption of 1/n accounting in October 2024. According to the brokerage, Niva Bupa was more affected because of its increased exposure to bancas; nevertheless, base resets starting in October 2025 could normalize growth reporting.
On the regulatory front, everything was in alignment.
Penetration will be fueled by the Insurance Regulatory and Development Authority of India’s (IRDAI) “Insurance for All by 2047” initiative and premium reductions from the goods and services tax (GST). According to JM Financial, repricing will provide revenue neutrality while enhancing customer affordability, even though reduced GST lowers short-term profitability (no ITC claim).
