At a Glance Go Digit is a digital-first general insurance company that’s posting profits, growing topline, and grabbing market share — yet still feels like a startup on training wheels. With other income doing a lot of the heavy lifting and underwriting margins barely positive, the stock trades at a generous P/E of 73.5. Is this disruption or just good branding?
1. TL;DR (Too Long, Digit Reads?)
- Stock Price: ₹338 (June 19, 2025)
- Market Cap: ₹31,248 Cr
- P/E: 73.5
- Sales (FY25): ₹9,371 Cr (+60% in 2 years)
- Net Profit (FY25): ₹425 Cr
- Underwriting Margin: ~1% (with help from hefty ‘other income’)
- Book Value: ₹49.7 → P/B of ~6.8x
- Fair Value Range (Est.): ₹210–₹270
2. How Did We Get Here? (The Rise of PolicyBazaar’s Cousin) Digit started in 2016 with a sexy proposition — insurance without the BS. Fully digital, quick claims, millennial branding. Over the years, they’ve scaled from ₹2,250 Cr in FY21 premiums to ₹9,371 Cr in FY25. But scale hasn’t brought underwriting profitability. They’ve gone from
- FY21: ₹-123 Cr loss
- FY23: ₹36 Cr net profit
- FY25: ₹425 Cr net profit
Great, right? Eh… A lot of this comes from ‘other income’ — read: investment returns. Underwriting operations still make razor-thin margins.
3. What They Actually Do (The Breakdown)
- Motor Insurance: Bulk of the portfolio. High churn, competitive pricing, and very sensitive to fraud.
- Health Insurance: Fast-growing, higher margins, but claim ratios vary wildly.
- Travel + Property + Marine + Liability: These are small and not margin drivers.
Digit isn’t just a tech company that sells policies. They’re a full-stack general insurer, with their own license, underwriters, product designs, and claim processing.
They’ve avoided the ‘aggregator trap’ but now face the ugly side: actual insurance risk.
4. Financial Pulse Check (Good Luck Reading This Without an Actuary)
- Gross Written Premium (GWP): ₹9,371 Cr in FY25
- Loss Ratio: ~70–72%
- Expense Ratio: ~27–30%
- Combined Ratio: 98–103%
- Underwriting Profit: Only positive because they wrote back old reserves
- Other Income: ₹325 Cr in FY25 — 75% of PBT
Let’s be blunt — if their investment income falters or equity markets turn, bottom line collapses. That P/E of 73.5 assumes compounding. But current profitability is fragile.
Also, FY25’s reported profit of ₹425 Cr is flattered by a one-off investment windfall. Without it? Likely below ₹200 Cr normalized.
5. Valuation Check (P/E Says Netflix, Not New India Assurance)
- Market Cap: ₹31,248 Cr
- EPS (FY25): ₹4.6 → trailing P/E of 73.5
- Book Value: ₹49.7 → P/B of 6.8x
- ROE: 11.7% (decent, but from a low base)
- Peers:
- ICICI Lombard: P/E ~38, better underwriting
- New India Assurance: P/E ~28, junk ROE
- Star Health: P/E ~39, with health focus
EduEstimate Fair Value Range: ₹210–₹270
- At 40x normalized EPS (~₹6–₹7, adjusted for investment cycles)
- Still assumes they maintain 30–35% GWP growth
Anything above ₹300 requires dreams, momentum, or a fintech bubble rerun.
6. The People & The Pitch (And the Celebrity Twist)
- CEO: Jasleen Kohli (not co-founder)
- Key Brain: Kamesh Goyal (Founder, ex-Allianz)
- Backers: Fairfax (Prem Watsa), cricketer Virat Kohli (because… why not)
Digit loves brand over margin. Their core sell is simple: “We’re not boring insurance — we’re cool, digital, no-fuss protection.”
But here’s the catch: You can only subsidize cool for so long.
7. The Verdict: Cool, But Is It Sustainable?
- Digit has built something real. But insurance is not SaaS.
- If you’re trading this stock, watch for claim ratios and combined ratios — not the cricket ads.
- The FY25 bottom line is propped by capital markets — not policy pricing.
Unless they show consistent underwriting profitability and not just investment-driven spikes, the stock is more ‘optimism premium’ than value bet.
For now? It’s a great case study. A well-packaged, decently-run, slightly overpriced bet on India’s digital insurance wave.
Would we insure our portfolio with this stock? Only after reading the fine print.
✍️ Written by Prashant | 📅 19 June 2025
