Emkay Global, a brokerage firm, has started covering Go Digit General Insurance stock after its debut on the Indian stock market, where it listed at ₹272 per share, a 5% premium. However, Emkay Global has given the stock a ‘sell’ rating, predicting a 31.4% decrease in its price, with a target of ₹210 per share.
The firm expects a significant price drop for Go Digit, considering it as just another insurance company with very high valuations. They acknowledge the growth potential in the Indian general insurance (GI) market but foresee profitability issues in the near future. Emkay Global believes Go Digit is overpriced, especially since it doesn’t have a significant competitive advantage over existing companies.
“We are positive about growth in the Indian GI sector, but we see near-term profitability issues. Our SELL recommendation is due to the high valuation of a company without a meaningful edge over its competitors,” the firm stated.
Emkay Global suggests that there are better investment options in listed private insurance companies like ICICIGI and STARHEAL, which have established business models and strong brands.
Go Digit, according to Emkay, doesn’t have a unique advantage compared to other Indian GI companies, which mostly acquire business through intermediaries and focus on motor and commercial lines. Although Go Digit is known for its digital capabilities, it hasn’t turned this into a lasting competitive edge, making its business model similar to others in the market.
“Go Digit has been in business for only six years and has grown rapidly from a smaller base. During this period, events like Covid-19 have had various impacts on the GI sector. Given this context, Go Digit is still evolving. Currently valued at a P/E of 49.6x and P/B of 5.9 for FY26, the stock is expensive compared to its established peers with stronger retail franchises,” Emkay added.
On Friday, Go Digit’s shares fell by 1.86%, closing at ₹300 per share, down from the previous close of ₹306 per share.
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