Stock jumps 5% after company’s net profit increases by 177% YoY

Published 23-01-2025, 11:29 am
© Reuters.  Stock jumps 5% after company’s net profit increases by 177% YoY

The insurance sector in India has experienced significant growth, driven by increased awareness, rising income levels, and regulatory support. Key players in the market include public sector companies like Life Insurance Corporation (NSE:LIFI) of India (LIC), and private companies such as HDFC Life, GoDigit, ICICI Lombard (NSE:ICIL), SBI Life (NSE:SBIL), and Bajaj Allianz (ETR:ALVG). The sector is divided into life insurance, general insurance, and health insurance segments.

The government’s initiatives, such as the Pradhan Mantri Jeevan Jyoti Bima Yojana, and a growing middle class have boosted the sector’s prospects. With increasing digital adoption, insurance penetration is expected to rise further. The future looks promising with a focus on innovation, new product offerings, and expanding rural markets, making it a vibrant sector for investment.

Share Price

The shares of Go Digit General Insurance Ltd (NSE:GODG) are currently trading at Rs. 300.95 up by 5.1% from its previous close of 286.35. The stock has given a return of -1.05% compared to Nifty’s return of 9.41%.

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Q3 Result Updates

In Q3, the company reported strong financial performance with a 10.3% growth in gross written premium, rising to Rs 2,677 crore from Rs 2,428 crore. Profit surged by an impressive 176.7%, reaching Rs 119 crore, up from Rs 43 crore in the same period last year.

This robust growth can be attributed to effective business strategies, increasing customer demand, and operational efficiencies. The company also saw a significant rise in assets under management (AUM), which jumped 27% to Rs 18,939 crore, compared to Rs 14,909 crore in the previous year.

The Return on Average Equity (IGAAP) also showed a notable improvement, rising from 1.8% in Q3 FY23 to 3.1% in Q3 FY24, reflecting enhanced profitability and efficient capital utilization.

These results underscore the company’s strong market position and highlight its continued focus on expanding its portfolio and delivering value to stakeholders.

Growth Scope

The Indian insurance market remains significantly under-penetrated, with insurance density and penetration levels far below global standards. This gap presents a huge growth opportunity, especially with a growing middle class, rising awareness, and the increasing need for financial security.

As more people turn to insurance for protection against risks, the market is poised for rapid expansion, offering immense potential for insurers to tap into a largely untapped demographic.

Tax Reduction on Insurance

In a recent GST council meeting, there was a discussion about reducing the GST rate on medical insurance from 18% to a more affordable level. This move aims to make health insurance more accessible and affordable, potentially driving greater adoption and coverage across the country.

About the Company

Incorporated in 2016, Go Digit General Insurance Ltd (GDGIL) is a digital-first insurance company that has revolutionized the non-life insurance sector in India. The company offers a range of products, including motor, health, travel, property, and marine insurance, catering to diverse customer needs. Go Digit focuses on delivering a seamless customer experience by integrating technology across product design, distribution, and claims processing.

As a full-stack digital insurer, Go Digit emphasizes innovation, simplicity, and transparency in its offerings. The company leverages a user-friendly online platform, making it easier for customers to buy, manage, and claim insurance policies. With a strong focus on convenience and customer-centricity, Go Digit is rapidly expanding its market share and reshaping the landscape of digital insurance in India.

Written By: Dipangshu Kundu

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