Go Digit General Insurance is a mixed bag of sorts, but there’s some good news that needs sharing. Let’s get down to the bottom of things for this Bengaluru-based insurance firm. Go Digit’s revenue from operations, mainly net premiums, has seen a slight fall in Q1 FY25. We are looking at an 8% drop, bringing the revenues down to Rs 1,824 crore from Rs 1,982 crore in Q4 FY24.
PC: The Economic Times
Notwithstanding the drop in revenues, gross premium stood strong for the company at Rs 2,660 crore in the first quarter of the current fiscal. That is a pretty decent figure, showing Go Digit still having a strong foothold in the market. And let’s not forget they had a stellar previous fiscal year ending March 2024, with a 37.4% year-over-year growth to Rs 7,096 crore in net premium. Profits balloons over 5X to Rs 182 crore during this period. Now, here is when things get interesting.
Even though the revenues took a hit, Go Digit was able to rake in Rs 253 crore from its investments. Add that to the operational income, and the overall revenues for Q1 FY25 tallied up to Rs 2,077 crore, down from Rs 2,692 crore in Q4 FY24. So, while this is a bit of a drop, perhaps the investment income did definitely cushion it.
The single largest cost center for any insurance company is the claims paid out; Go Digit is no different. The share of claims paid was 64.48 percent of its overall expenditure. However, similar to its scale, this cost has fallen by 10 percent to Rs 1,285 crores in Q1 FY25. That’s a big drop and a healthy sign that the company is processing claims better.
The firm’s expenditure on commissions, employee benefits, business development, sales promotion and other overheads took its overall expense to Rs 1,993 crore in Q1 FY25 from Rs 2,198 crore in Q4 FY24. Go Digit covered a contained decline in scale with an about 9.3% QoQ cost control. This cost control was a vital factor in the company’s impressive profit spike.
Go Digit’s profits increased by a whopping 90.6% to Rs 101 crore in Q1 FY25 from Rs 53 crore in Q4 FY24, nearly doubling sequentially. The sequential profit growth for FY24 has been an unprecedented 5X for this firm. Whatever Go Digit is doing to its finances and operations, it is doing them right.
The IPO of Go Digit was pegged at Rs 2,616 crore, which includes a fresh issuance of Rs 1,250 crore and the rest under OFS. The company had listed on the bourses on May 23 this year at a per share price of Rs 286, thus representing a 5.1 per cent gain over their price band of Rs 258-272 per share. At 12:13 PM, the share price of Go Digit was at Rs 349.5.
With this, the total market capitalization, according to Entrackr’s estimates, comes to the vicinity of Rs 32,077 crore or $3.86 billion. Despite this fall in revenues, Go Digit has shown great resilience and financial acumen. They are able to rein in costs, cut expenditure on claims, and their profits have risen sharply.
It has been an extraordinary display of financial management and planning. Beginning with the immensely competitive general insurance field, Go Digit seems to prove that sometimes it’s not all about revenue figures— it’s smart management, efficient operations, and a set of good investments. Hope that they continue on this upwards trajectory and keep surprising us with their financial acumen.
