New India Assurance Company Ltd's Q4FY18 standalone net profit declines 39.27% yoy to Rs335.96cr : Misses Estimates

The company’s standalone NII stood at Rs5,215.46cr, down 3.92% yoy but up 2.79% qoq.

May 11, 2018 12:05 IST India Infoline Research Team

New India Assurance Company Ltd Q4FY18

Standalone Results Q4FY18: (Rs. in cr)

Q4FY18 YoY (%)
NII 5,215.46 [3.9]
Net Profit (adjusted) 335.96 [39.3]



Reco. Price


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The New India Assurance Company Ltd's net earned premium income for Q4FY18 came in at Rs5,215.46cr, down marginally by 3.9% yoy. The income from investments under policyholders fund increased by 14% yoy to Rs845.02cr. The net commission expense came in at Rs601.60cr, up by 50.1% yoy. The total incurred claims (claims paid and change in outstanding claims) stood at Rs4,435.24cr, down by 5.7% yoy. The income from investments under shareholder's account decreased by 33.8% yoy to Rs469.14cr in Q4FY18. The company's net profit came in at Rs335.96cr in Q4FY18, down by 39.3% yoy. The gross written premium for FY18 was in-line with street estimates. However, the net profit for FY18 missed the street estimates by 30%.

• The solvency ratio of the company improved to 2.58x as on March 31, 2018 as against 2.17x as on March 31, 2017.
• Adjusted combined ratio for Q4FY18 improved marginally to 97.49% as against 99.40% in Q4FY17.
• The yield on investments (with unrealized gains) for FY18 was 8.87% as against 8.69% in FY17.
• Employee benefit expenses increased significantly by 35% yoy to Rs690.05cr in Q4FY18. This is majorly on account of enhancement of gratuity limits and extension of pension scheme to PSU officers.
• Board of directors recommended final dividend of Rs5 per share.
• Board of directors recommended bonus issue in the ratio of 1:1.
• The highlights of segment performance for major segments:
o Fire segment - operating profit of Rs429.36cr in FY18 as against operating loss Rs346.61
o Motor segment - operating profit increased by 159% yoy to Rs1,490.06cr in FY18
o Health segment - operating loss increased to Rs1,492.88cr in FY18 as against Rs1,313.54cr in FY17
• Health insurance policies for the government employees has resulted into higher underwriting loss and combined ratio. However, the company has rolled out revised pricing for new and renewal health insurance policies.
• The commissions rates are peaked out and is expected to stabilize at ~8.5% of net premium earned.

Technical View:

New India Assurance Company Ltd is currently trading at Rs. 696.70, down by 0.75 points or 0.11% from its previous closing of Rs. 697.45 on the BSE.
The scrip opened at Rs. 685.10 and has touched a high and low of Rs. 704.80 and Rs. 685.10 respectively. So far 71,127 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 50 DMA.

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