Go Digit's Shares Touch New All Time High Post Strong Q4 Results

Go Digit Shares Jump 8% Intraday On Robust Q1 Results

SUMMARY

The insurtech startup’s shares touched an all time high of INR 372.35 during intraday trading a day after it disclosed its financial results for Q4 FY24

Go Digit’s PAT for FY24 grew 400% to INR 182 Cr from FY23’s INR 36 Cr

The shares lost their steam as trading went on June 12, ending today’s trading session at INR 341.75

A day after reporting a strong financial report for the quarter ending March 31, 2024, shares of recently listed insurtech startup Go Digit touched an all time high of INR 372.35 during intraday trading on Wednesday (June 12).

Yesterday (June 11), the company disclosed that its profit after tax (PAT) for the financial year 2023-24 (FY24) stood at INR 182 Cr, an over 400% jump from the previous fiscal’s INR 36 Cr. In tandem with the increase in profits, the startup’s total gross written premium (GWP) also grew by 24.5% to INR 9,016 Cr from INR 7,243 Cr in FY23.

Subsequently, the company’s shares opened today’s trading session at INR 365, an over 7% jump from the previous close, before reaching the new all time high.

However, these gains subsided during the day. Go Digit’s shares ended today’s trading session at INR 341.75, 1% higher than yesterday’s close of INR 338.35.

Go Digit’s market cap also went up to $3.74 Bn (INR 31,345.39 Cr), a marginal increase from the $3.73 Bn market cap it had at the end of last week.

The company has been seeing rather favourable market sentiment since making a muted debut on the bourses. On May 23, Go Digit’s got listed at INR 281 on the BSE, a meagre 3.3% higher than its issue price. The shares have maintained a healthy uptick week-on-week since getting listed on the bourses.

The market sentiment contradicts brokerage firm Emkay’s analysis of the startup. A day after listing, the brokerage initiated its coverage of the stock with a ‘Sell’ rating. It gave Digit a price target (PT) of “INR 210/ish”, which it estimates to reach by June 2025.

Emkay’s bearish sentiment for Digit stemmed from valuation concerns, which exceeds other listed insurance players. In its report, the brokerage pointed out disparities in the price-earnings ratio (P/E) and price to book (P/B) ratio that Go Digit’s shares were trading on. The startup’s estimated P/E for FY26 stands at 49.6X, and its P/B stands at 5.9X.

This is a substantial premium in comparison to its listed peers ICICI Lombard (FY26E P/E of 29x; P/B of 5.3x) and Star Health (FY26E P/E of 25x; P/B of 3.9x).