Strong Premium Growth,
Profitability Under Pressure

Headline Numbers

Revenue & Premium Account

Care Health posted Gross Written Premium of ₹9,805 Cr in FY26, up sharply from ₹8,033 Cr in FY25 — a 22.1% surge reflecting aggressive customer acquisition and a buoyant health insurance market. Net Earned Premium grew more modestly at 14.3%, as the retention ratio slipped from 79% to 74%, meaning a significantly larger share of risk was ceded to reinsurers.

Profit & Loss Summary

The most critical story of FY26 is the sharp deterioration in the claims ratio. Net claims incurred jumped from ₹4,096 Cr to ₹5,051 Cr — a 23.3% increase that outpaced premium growth. The combined effect of higher claims, commissions, and operating expenses pushed the operating line into a loss of ₹151 Cr, compared to a profit of ₹49 Cr in FY25. Only the investment portfolio kept PAT in positive territory.

Key Ratios

All four key ratios tell the same story — a year of expansion that came at a cost to underwriting discipline. The combined ratio crossing 107% is the most critical signal, while the Mcap/GWP compression reflects market caution despite strong premium growth.

Balance Sheet Snapshot

With the complete balance sheet now available, the full picture is both more detailed and more revealing. Total assets grew ₹370 Cr YoY to ₹2,743 Cr. The sources side shows the company retired its ₹100 Cr borrowing in FY26 — a positive deleveraging move. On the application side, policyholder investments surged 43.9% from ₹5,933 Cr to ₹8,539 Cr, reflecting strong business growth. However, net current assets are deeply negative in both years, driven by large current liabilities and provisions that are structural to insurance balance sheets and do not represent a liquidity concern in isolation.

Market Valuation

At a market capitalisation of ₹11,495 Cr, the Mcap/GWP multiple has compressed from 1.43x to 1.17x. The market is pricing in premium growth while simultaneously discounting the underwriting deterioration. For a health insurer growing at 22% GWP, 1.17x is not expensive by sector norms — but the combined ratio expansion provides little comfort for near-term earnings multiples.

*Same Mcap used for FY25 as only current market cap (₹11,495 Cr) was provided. The P/E ratio of 945x for FY26 reflects the near-zero PAT and should be interpreted with caution.

Five Things to Watch in FY27

• 01
  Claims ratio trajectory. Any improvement toward the 65–67% band would restore operating profitability. A further spike toward 73–75% would likely push PAT into negative territory even with current investment income.
• 02
  Reinsurance retention. A further drop below 74% would signal management is buying more protection — limiting net earned premium leverage and compressing the growth story.
• 03
  Investment income sustainability. The ₹666 Cr investment income cushion is rate-sensitive. If the RBI cuts rates materially in FY27, this buffer shrinks, removing the safety net that kept PAT positive.
• 04
  Operating leverage. With GWP at ₹9,805 Cr, expenses should start to plateau as the platform matures. Whether the expense ratio dips below 18% is a meaningful test of scalability.
• 05
  Capital adequacy. Given underwriting losses and aggressive growth ambitions, solvency margins will be watched closely. Further capital raises may be necessary and could be dilutive.