Go Digit General Q1 FY27 Results (NSE: GODIGIT)
Signal: Earnings declined
The read
The quarter shows an underwriting-led deterioration rather than an investment-income problem: total income grew 8.3% YoY to 2,35,936 lakh, but the combined ratio rose to 112.3% from 108.6% and underwriting loss widened to 28,201 lakh, driving PAT down 37.5% to 8,639 lakh. The crop segment turned profitable at 574 lakh from a 75 lakh loss, but this was too small to offset motor losses.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,359.36 Cr | +8.3% | -24.2% |
| Net profit | ₹86.39 Cr | -37.5% | |
| EPS | ₹0.93 | -38.0% | |
| EBIT margin | 0% |
P&L walk
Total income rose 8.3% YoY to 2,35,936 lakh, but underwriting loss widened 45.7% to 28,201 lakh and operating profit fell 41.8% to 7,039 lakh; investment income growth was insufficient to prevent PAT from declining 37.5% to 8,639 lakh.
Segments
Motor remains the principal drag, generating 1,51,011 lakh of net premium earned but a 28,209 lakh underwriting loss versus a 23,234 lakh loss YoY; health group/corporate also worsened to a 5,143 lakh loss from 2,288 lakh.
Key positives
- Solvency ratio improved to 2.43 from 2.27 YoY and 2.42 QoQ, providing a stronger capital buffer.
- Net retention ratio increased to 76.7% from 65.4% YoY, indicating a greater proportion of written premium was retained.
- Net premium written grew 7.4% YoY to 2,09,419 lakh despite gross premium written declining 8.4% to 2,73,086 lakh.
- Fire, marine and health government business remained underwriting-profitable at 1,927 lakh, 421 lakh and 1,546 lakh respectively; crop also turned profitable at 574 lakh versus a 75 lakh loss YoY.
Key concerns
- Motor underwriting loss widened to 28,209 lakh from 23,234 lakh YoY, despite motor net premium earned rising 5.6% to 1,51,011 lakh.
- Combined ratio deteriorated to 112.3% from 108.6% YoY, implying the core insurance book remained loss-making before investment income.
- PAT fell 37.5% YoY to 8,639 lakh and EPS fell 38.0% to ₹0.93, while operating profit declined 41.8% to 7,039 lakh.
- Expenses of Management ratio increased to 39.0% from 35.0% YoY, and the company stated that insurance-business expenses exceeded regulatory limits for the quarter.
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