Niva Bupa Health Insurance Company Limited — Q2 FY26 earnings call

Call held 3 Nov 2025

Management summary

Niva Bupa Health reported a strong H1 FY26 with significant growth in profitability and premiums, led by its retail segment. The management was particularly bullish on the recent GST reduction to 0%, which has already resulted in a dramatic uptick in demand in October. The company has made a strategic decision to pass on the entire GST-related commission impact to distributors, confident that increased volumes and higher ticket sizes will more than compensate, positioning it for accelerated growth.

Highlights

  • H1 FY26 GWP grew 23% YoY on a like-to-like basis to ₹3,983 crores.

  • H1 FY26 IFRS Profit After Tax (PAT) more than doubled to ₹132 crores from ₹60 crores YoY.

  • H1 FY26 Combined Ratio (IFRS) improved by 105 bps to 103.1% from 104.2% YoY, driven by expense ratio reduction.

  • Retail segment growth was strong at 28% YoY for H1 FY26, with a stable retail loss ratio of 68.1%.

  • The reduction of GST on health insurance to 0% spurred a >50% YoY growth in retail business for October 2025.

  • The company has fully passed on the commission impact from the GST change to distributors, betting on higher volumes.

  • Solvency ratio remains healthy at 2.85x as of September 30, 2025.

  • Expense of Management (EOM) ratio improved by 370 bps YoY to 36.3% for H1 FY26.

Key financials

3 periods

Headline

  • AUM
    ₹8,482 Cr
  • Solvency Ratio
    2.85×

H1

  • GWP
    ₹3,983 Cr
    YoY +23%
  • IFRS PAT
    ₹132 Cr
    YoY +120%
  • EOM Ratio
    36.3%

IFRS, H1

  • Combined Ratio
    103.1%

What they filed

Q1 FY27: revenue up 27.9%, net profit up 94.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,321 1,258 1,671 1,932 1,574 +19%1,611 +28%2,251 +35%2,471 +28%
EBITDA-66 -24 251 98 -53 +20%-94 −292%182 −27%184 +88%
Net profit13 13 206 71 -35 −369%-88 −777%159 −23%138 +94%
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

  • Retail Health
    28% Growth (H1, like-to-like)68.1% Loss Ratio (IFRS, H1)
  • Group Health
    13% Growth (H1, without 1/N)60.9% Loss Ratio (IFRS, H1)

Guidance & targets

Profitability

  • Long-term ROE Profitability · FY29 · High confidence mid to high teens
    We stick to long-term guidance, which is, let's say, FY '29 mid to high teens ROE. We stick to that.

    — Vishwanath Mahendra

Expense

  • EOM Ratio Expense · FY26 · High confidence Within regulatory limit
    We are confident of bringing down EOM ratio within regulatory limit in the current financial year as per glide path submitted to the IRDAI.

    — Vishwanath Mahendra

Pricing

  • Price Revision Pricing · Q3 FY26 · High confidence No revision
    On the point on price revision, Supratim, given what we have seen and what Ankur said around volumes, we do not intend to take in a revision at least this quarter.

    — Krishnan Ramachandran

Risks & concerns

  • Group Loss Ratio Increase

    medium

    The group loss ratio increased from 56% to 60.9% YoY in H1. Management attributed this to a change in business mix towards large corporates, which was offset by lower expense ratios.

    Analyst acknowledged

  • EOM Ratio Above Regulatory Limit

    medium

    Management stated the H1 EOM ratio was 50 bps above the allowable limit. They expressed confidence in bringing it within the full-year limit as per their glide path.

    Management acknowledged

  • GST Impact on Non-Commission Overheads

    low

    Analysts questioned the impact of non-availability of input tax credit on overheads. Management believes this will be more than compensated by volume growth and lower GST on pharmacy claims.

    Analyst acknowledged

Areas of evasion (1)

  • Declined to quantify the percentage of the portfolio that follows cohort-based/experience-based pricing, suggesting to take it offline.

Q&A highlights

3 direct
GST Impact and Commission Pass-through Strategy Direct
Yes. Yes, we have passed on entirely to the distributor. And as I explained, the distributor has also understood this that this is ultimately benefiting him because his income is going up. His income is not going down because the volume is going up, ticket size is also going up.

This confirms a critical strategic decision to prioritize volume growth over protecting margins from the ITC impact, signaling confidence in the demand elasticity of the product.

Asked by Prayesh Jain

Retail Loss Ratio Stability vs. Peer Improvement Direct
Yes, Supratim, so on loss ratio, for H1, we have seen same as last year and last year was also kind of stable loss ratio. It was not too elevated. So it is at same level. Q1, it was higher 2.5% to 3%. This year, Q2 is lower. Similar range. Trend perspective, yes, we're also seeing loss ratio on better in recent months.

Addresses a key investor concern about relative performance, clarifying that while the H1 average was flat, the recent quarterly trend is positive and in line with industry improvements.

Asked by Supratim Datta

Group Health Business Slowdown Direct
So I mean, we grew our business in those 2 segments quite rapidly last year as well as last. So the growth is off a fairly close to 40%, 50% growth last year and prior year, you would have seen those numbers. It's a double digit growth on top of a 40%, 50% growth rate last year, just to put that in context.

Provides context for the seemingly low group growth numbers, attributing it to a high base and a selective underwriting strategy, rather than a loss of competitiveness.

Asked by Sanketh Godha

2 min read 5 chapters

Detailed narrative

GST Reduction Sparks Unprecedented Demand

The central theme of the call was the reduction of GST on health insurance from 18% to 0%, which management termed an "incredible win for the industry." Niva Bupa has fully passed on this benefit to customers and the associated commission impact to distributors. This strategy yielded immediate, dramatic results, with retail business growing over 50% in October, a historically slow month. Furthermore, the ticket size for new retail business in October jumped by 15% compared to H1, indicating customers are using the savings to buy more adequate cover.

H1 Financial Performance: Strong Growth and Improved Profitability

Niva Bupa reported robust financial performance for H1 FY26. Gross Written Premium (GWP) grew 23% YoY on a like-to-like basis to ₹3,983 crores. Profit After Tax under IFRS more than doubled, rising to ₹132 crores from ₹60 crores in the same period last year. The IFRS Combined Ratio improved by 105 basis points to 103.1%, driven by a 2.3% reduction in the expense ratio, which more than offset a 1.2% increase in the overall loss ratio.

Segment Dynamics: Retail Powers Growth, Group Remains Selective

The retail segment was the primary growth engine, expanding 28% YoY in H1. The retail loss ratio remained stable at 68.1% on an IFRS basis. In contrast, the group business grew by a more moderate 13%, with management citing a high base from the previous year and a selective underwriting approach. The group loss ratio increased from 56% in H1 FY25 to 60.9% in H1 FY26, attributed to the mix of large corporate clients onboarded.

Operational Efficiency and Strategic Investments

The company demonstrated improved operational leverage, with the Expense of Management (EOM) ratio falling to 36.3% from 40% YoY. While this was 50 bps above the H1 allowable limit, management is confident of meeting the full-year regulatory target. The company is also investing heavily for future growth, having increased its distribution headcount by over 1,000, established an AI lab, and launched a new microservices-based core system to enhance product agility and customer service.

Claims Management and Network Strategy

Customer metrics remained strong, with a claims settlement ratio of 95.2% in Q2 and an improved weighted average NPS of 57 across 35 touchpoints. The company's Preferred Provider Network (PPN) strategy is gaining traction, with about 17% of claims in cities with PPN presence being routed through these hospitals. Management noted that incidence rates and average claim sizes have remained stable, contributing to a predictable claims environment.

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