Go Digit General Insurance Limited — Q3 FY26 earnings call

Call held 22 Jan 2026

Management summary

Go Digit General Insurance Limited delivered a strong Q3 FY26, with GDPI growing 20.9% and PBT increasing 37% QoQ. The IFRS Combined Ratio improved to 105%, showcasing enhanced efficiency. While the Motor OD loss ratio saw an increase, management is implementing corrective pricing actions and maintains a robust solvency position, with AUM growing 18.8% YoY.

Highlights

  • GDPI grew by 20.9% to ₹2,557 crores in Q3 FY26, demonstrating strong top-line growth.

  • Profit Before Tax (PBT) increased by 37% QoQ to ₹163 crores, indicating improved profitability.

  • The IFRS Combined Ratio improved by 1.2% YoY to 105% in Q3 FY26, reflecting better operational efficiency.

  • Assets Under Management (AUM) reached ₹22,500 crores, marking an 18.8% YoY growth.

  • The company maintains a robust solvency ratio of 230%, significantly above the required 150%.

Concerns

  • Motor OD loss ratio increased to 75.6% in Q3 FY26 from 70.5% in Q4 FY25, primarily due to price competition.

  • A one-time impact of ₹7 crores on PBT was recorded in Q3 FY26 due to the new wage code.

  • Growth in Gross Written Premium (GWP) was lower at 8.7% due to the strategic decision not to renew a low-margin government health business.

Key financials

  1. Gross Direct Premium Income (GDPI) ₹2,557 Cr +20.9%YoY
  2. Gross Written Premium (GWP) ₹2,909 Cr +8.7%YoY
  3. Profit Before Tax (PBT) ₹163 Cr +37%QoQ
  4. Profit After Tax (PAT) ₹140 Cr
  5. IFRS Combined Ratio 105%
  6. Assets Under Management (AUM) ₹22,500 Cr +18.8%YoY
  7. Solvency Ratio 230%
  8. Motor OD Loss Ratio 75.6%

What they filed

Q1 FY27: revenue up 8.5%, net profit down 37.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,234 2,436 2,594 2,236 2,488 +11%2,570 +6%2,711 +5%2,427 +9%
EBITDA89 118 -209 159 135 +52%162 +37%-297 −42%114 −28%
Net profit89 119 116 138 117 +31%140 +18%149 +28%86 −38%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Health, Travel, PAs
    -31% GWP Growth
  • Motor
    66% Business Mix
  • Motor - Private Car
    47% Business Mix
  • Motor - Two-wheeler
    34% Business Mix47% Q3 Growth₹668 Cr Collected Premium Q3
  • Motor - Commercial Vehicle
    19% Business Mix

Capital allocation

high confidence
  • M&A Go Digit General Insurance Limited Merger · Closed · Consideration ₹[object Object] (stock)

    Simplification of corporate structure by merging holding company (Go Digit Infoworks) into the operating entity.

    1,169,000 shares (roughly 0.03% of total shares) issued at ₹375.10, increasing promoter shareholding by 0.03%.

    Let me just start by saying that in December, we had done a very short call explaining the merger between the holding company Go Digit Infoworks with the Go Digit General Insurance Company Limited. Basically, the shares which are held by Go Digit Infoworks are being split into three shareholders, which is Oben Ventures, FAL, and in my individual name. In addition, about 11,69,000 shares, roughly about 0.03% of the shares are being issued at a price of about Rs. 375.10. The price at that time of digit share was ~343. So, this will increase promoter shareholding by 0.03%.

Guidance & targets

Tax Rate

  • Tax Rate Tax Rate · next quarter · High confidence 14%
    And we expect even in the next quarter, the tax rate to be 14%.

    — Kamesh Goyal

  • Tax Rate Tax Rate · next financial year · High confidence 25%
    And then from next financial year, the tax rate would move to 25%.

    — Kamesh Goyal

Profitability

  • Motor OD Loss Ratio Profitability · next two quarters · Medium confidence Stabilization
    And we feel that in the next two quarters, this is also something which will stabilize with the actions which have broadly been taken.

    — Kamesh Goyal

  • TP Reserve Release as % of NEP Profitability · year-end · Medium confidence +/- 0.5-0.6%
    And I think when we end the year, as a percentage of NEP on the TP side, we don't expect it to be substantially higher, it might be plus minus 0.5, 0.6 up, but we don't expect it to be substantially higher.

    — Kamesh Goyal

  • IFRS ROE (9 months annualized) Profitability · 9 months · Medium confidence ~14%
    So, Rs. 600 crores over Rs. 4,400 crores gives you roughly about 14%. I am doing now this arithmetic, you should do this properly with that calculator, and this will be for 9-months, then you can actually annualize it. So, that is how we see IFRS ROE.

    — Kamesh Goyal

What to watch in Q4 FY26

Motor OD Loss Ratio Stabilization

next two quarters
Current 75.6% in Q3 FY26
Target Stabilization

Why it matters

This key profitability metric saw an increase this quarter, and management expects stabilization due to corrective actions, which is crucial for future performance.

And we feel that in the next two quarters, this is also something which will stabilize with the actions which have broadly been taken.

Risks & concerns

  • Increase in Motor OD loss ratio

    medium

    Motor OD loss ratio increased to 75.6% in Q3 FY26 from 70.5% in Q4 FY25, primarily due to price competition and a substantial renewal book, with corrective actions initiated.

    Management acknowledged

  • Tail risk from electric two-wheeler portfolio

    medium

    High market share in two-wheelers, especially electric, poses tail risk due to high total loss comparison in floods, leading to strategic reinsurance as a cost for protection.

    Management acknowledged

  • One-time impact of new wage code

    low

    A one-time impact of ₹7 crores on PBT was recorded in Q3 FY26 due to the new wage code.

    Management acknowledged

  • Market volatility impacting equity investments

    low

    Despite market volatility, the company's strong solvency (230%) and diversified asset allocation (7.4% equity) provide resilience, with solvency remaining above 180% even with a 20% market drop.

    Management acknowledged

Q&A highlights

6 direct
Product mix evolution and role of technology in customer acquisition/retention. Direct
So, I think we have been saying in the past that we don't drive ourselves from a prospective or an ideal product mix or a channel mix because we don't know what is good at that time. And I already explained, I think, that if you look at commercial vehicles, our commercial vehicle percentage in motor portfolio would have actually become half maybe in the last two years itself or maybe even less. And if you go back to 4-5 years, then it would now be one third. So, product mix can change very, very fast. Again, I think another example is in group health. The Company let go about 220 crores of premium, which is roughly 7% of the total premium for the quarter because they did not find the pricing right.

Highlights management's flexible strategy on product mix, prioritizing profitability over fixed targets, exemplified by letting go of significant group health premium.

Asked by Sucrit D. Patil

Sustaining profitability with strong solvency, managing claims volatility, and capital allocation. Direct
Well, I think I would say this is relatively easy to answer. If you look at digitization and our business model, the best example of that from the numbers is the management expenses as a percentage of GWP. I think our management expenses are 7% to GWP, which is by far best in class. I think the nearest competitor would be above 9.5%. So, the benefit of digitization and this is something which is continuing.

Emphasizes the company's competitive advantage in management expenses due to digitization and outlines the strategic approach to capital allocation for maximizing ROE.

Asked by Sucrit D. Patil

Reasons for increased reinsurance and its impact on premium retention. Direct
Now, I think when you look at retention and risk, you would remember that we always said that we want to retain more if our loss ratios are good, because this helps us in having more AUM or higher leverage, which actually drives the ROE. Now, when you look at motor example, because the premium is on a withheld basis, it is not impacting our investment leverage at all. And what has changed in this is that in the last two floods, which we have seen, the recent one in one in Chennai and one in Calcutta, what we have seen is that electric vehicles can actually have like very, very high total loss comparison compared to the, I would say, petrol two wheelers. So that is more like a tail risk, because as I already said that our market share in two-wheeler is very high.

Clarifies that the increased reinsurance is a targeted measure for tail risk protection in specific high-exposure segments like electric two-wheelers, rather than a general shift in retention strategy.

Asked by Supratim Datta

Discrepancy in Deferred Acquisition Cost (DAC) increase and its relation to two-wheeler business growth. Partial
On the DAC side, I think in third quarter, our DAC have increased by about Rs. 120 crores. And I think on the debt side, if you have more detailed questions in terms of development, you can always connect with us offline because I think every quarter number we might not have immediately with us right now, Supratim.

Indicates a potential area of complexity or discrepancy in reported DAC figures that management suggests discussing offline, implying it might not be straightforward.

Asked by Supratim Datta

EoM compliance status and drivers of higher commission ratios. Direct
So EoM is not driven by higher commission or lower commission, it is driven more from a segment perspective and I think that is also something which is now being debated more and more that IRDAI they came out with EoM with all the right intention and what has happened in the last two years is that commissions are actually increased because some companies increase the commission. Secondly, we also if you look at and some large companies they are taking reinsurance commission and setting it off against expenses and that is actually taking the benefit of that on the EoM side. If Digit would have done that then just in motor business, then our EoM would have improved by 1.4% on a YTD basis.

Provides detailed insight into the challenges and complexities of EoM regulations, highlighting how some industry players manage EoM and Digit's principled stance against certain practices.

Asked by Mehak

Impact of two-wheeler electric segment reinsurance on profitability (GAAP basis). Direct
So Sanketh, this is more an expense item rather than an income item because as I said we have taken this this year. As of now, there is no claims recovery in the treaty yet. So we have paid a cost for the option. The auction is not in the money yet. It's reducing the profit rather than increasing the profit and I hope it stays that way because when you protect the tail risk you don't expect it to play in the next 6 months, 12 months, 18 months.

Clarifies that the reinsurance for electric two-wheeler tail risk is currently an expense reducing profit, not a revenue-generating activity, and is a strategic cost for risk protection.

Asked by Sanketh Godha

Motor OD combined ratio and the impact of two-wheeler mix on overall ROE. Direct
I would again say that looking at any of this in isolation from a loss ratio perspective would give a conflicting picture and you know that we do not try and manage the IRDAI combined ratio as per IGAAP accounting combined ratio because we have gone on record last year and we demonstrated it in our February analyst meet that this is illogical. Combined ratio is high, but profit is improving even without capital gains. But if you see our IFRS combined ratio, which I think I would try to explain in a bit of detail, you can see that the improvement is happening.

Reaffirms management's focus on IFRS combined ratio and overall profitability, asserting that IGAAP combined ratio can be misleading and is not a primary management metric.

Asked by Sanketh Godha

Impact of recent pricing actions on volume and seasonality of Motor TP reserve releases. Partial
I would say that it's too early for us to look at trends in January, because we would want to see the trend also unfolding over two months. Secondly, if I am saying our loss ratio and OD should be in the top three, then every other company is bleeding much, much more. So we expect everyone to take corrective action. I think in GST, all of us know that after the GST idea was not to increase the premium rates. But I think everyone will start taking corrective action on the overall portfolio basis. On TP, I think if you look at last year also, Quarter 3 has the highest release out of 4 quarters. This year, our assessment is this year again, Quarter 3 would have the highest release. So this is something which is a bit more seasonal.

Indicates that the full impact of recent pricing actions on business volume is still under observation, and clarifies the seasonal nature of TP reserve releases, with Q3 typically seeing the highest releases.

Asked by Shobhit Sharma

2 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Highlights

Go Digit General Insurance Limited reported a robust Q3 FY26 with Gross Direct Premium Income (GDPI) growing 20.9% year-on-year to ₹2,557 crores. Profit Before Tax (PBT) saw a significant jump of 37% quarter-on-quarter to ₹163 crores, contributing to Profit After Tax (PAT) of ₹140 crores. The company has successfully eliminated accumulated losses, and the IFRS Combined Ratio improved by 1.2% YoY to 105%.

Strategic Product Mix and Growth Drivers

The company's product mix is dynamically driven by market opportunities, rather than fixed targets. In Q3, the motor business mix increased to 66% from 60% last year, with two-wheeler business growing 47% and contributing ₹668 crores in collected premium. Management strategically opted not to renew ₹220 crores of government health business due to inadequate pricing, which impacted overall GWP growth but improved profitability.

IFRS Combined Ratio and Profitability Improvement

Go Digit is focusing on IFRS-based reporting, where the combined ratio improved to 105% in Q3 FY26 and 105.6% for the nine-month period, reflecting a 1.2% and 1.3% improvement respectively. This approach defers acquisition costs and reinsurance commissions, providing a more accurate view of profitability. The company's internal calculation for IFRS ROE for the nine months stands at approximately 14%.

Motor OD Loss Ratio Challenges and Corrective Actions

The Motor Own Damage (OD) loss ratio increased to 75.6% in Q3 FY26 from 70.5% in Q4 FY25, primarily due to price competition and a substantial renewal book, particularly in private cars. Management has initiated pricing corrections since October, with further actions in January and February, expecting stabilization in the next two quarters. Two-wheeler and commercial vehicle OD loss ratios remain stable.

Capital Allocation and Solvency Strength

The company maintains a strong solvency ratio of 230%, well above the required 150%. Assets Under Management (AUM) grew 18.8% YoY to ₹22,500 crores as of December 31, 2025, with an overall yield of 1.9% for the quarter. Equity allocation stands at 7.4%, and the company has unrealized gains of ₹686 crores, demonstrating prudent asset management and capital deployment for profitable growth.

EoM Compliance and Industry Dynamics

Management highlighted the complexities of Expense of Management (EoM) regulations, noting that some companies increase commissions or use reinsurance to offset expenses, which Digit considers a GST violation. While EoM increased due to the two-wheeler business and non-renewal of group health, Digit asserts its compliance with EoM guidelines on a segment-wise basis, advocating for a segment-specific approach to EoM.

Promoter Confidence and Shareholding Structure

The company underwent a merger of its holding company, Go Digit Infoworks, into Go Digit General Insurance Limited. As part of this, 1,169,000 shares (0.03% of total) were issued to promoters at ₹375.10 per share, above the prevailing market price of ₹343. This transaction underscores the promoters' confidence in the company's future prospects and strengthens their shareholding.

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