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Go Digit hosted its Analyst/Investor Day on 16-Feb-26, where the management provided an update on its choice-led growth business strategy. KTAs: 1) Granular partner-based distribution decisions are taken, supported by data and analytics. 2) A cyclical approach to commercial lines, where the company accelerates growth when markets turn favorable, backed by technological advantage and reinsurance partners. 3) A rigorous Motor TP claims management framework, focusing on fraud prevention and early claims settlement. 4) While the company has adopted an opportunistic growth strategy, it engages continuously with distributors during soft cycles to maintain relationships while focusing on renewals. While we appreciate the company’s selective growth strategy, we see limitations in growth with profitability that can justify the premium valuations at which the stock trades. We maintain SELL and Dec-26E TP of Rs290.

RoE focus remains core to the distribution strategy

Go Digit’s distribution strategy remains focused on driving scale while protecting productlevel RoE. The company has adopted a granular partner-based distribution approach through enhanced data analytics, allowing it to focus more on profitable partners and taking corrective actions with lower-RoE partners. As a result, the distribution strategy has shifted from channel-based underwriting to partner-based underwriting. Furthermore, the underwriting discipline is maintained across distribution channels. In direct and digital channels, the company has performed data room exercises to understand extra context the digital platform knows about customers, which aids it in pricing the risk appropriately.

Motor – Steering toward high-RoE segments

The management emphasized that growth in any particular segment is a conscious decision, not a by-product. In Motor, growth follows RoE, not volumes. Over the past few years, the company has steered its Motor business mix, driven by RoE. Thus, the contribution of CVs declined to 23% in YTDFY26 as against 48% in FY22, while that of 2Ws increased to 32% in YTDFY26, up from 22% in FY22. The renewal segment in the Motor business is more profitable. Hence, the company has witnessed high growth from renewals and lower growth from roll-over business. The management stated that the company focuses on channels where it has a flexible pricing structure, while focusing on non-transaction business where the renewal ratio is high and is sticky. Additionally, direct premium fetching (DPF) is live with 5 OEMs, enabling the company to improve segmentation and more granular pricing. As a result, the company’s market share in DPFenabled OEMs has increased. Go Digit has rationalized the new vs renewal mix in 4W dealerships after exiting the high-commission and low-RoE new business segments.

A rigorous Motor TP claims management framework The Motor TP claims book is characterized by a long tail liability, court-driven adjudication, and wage inflation risks. Go Digit manages these through a proprietary framework that focuses on controlling outcomes and not just handling litigation. The management employs a disciplined ‘Prevent, Defend, Settle’ strategy that prioritizes factual evidence over legal petitions, utilizing digital forensics (including mobile tower records) and pre-decision checklists to strictly verify accident genuineness and insured presence. To mitigate fraud risk, the company has identified 258 high-risk police stations and instituted a six-hour accident tracking protocol to promptly establish whether the vehicle involved was covered by Go Digit at the time of the incident. This proactive surveillance and verification mechanism has resulted in no fraud TP litigation being initiated against the company. In cases that proceed to defense, the focus remains squarely on factual validation—particularly around accident authenticity and insurer liability. Where liability is evident, the company opts for early settlement, enabling faster claim resolution, reducing legal uncertainty, and containing longtail exposure.

Commercial Lines – Market cycles define the growth engine While the growth in the commercial lines segment is non-linear given its cyclical nature, Go Digit has maintained a ‘counter cyclical’ approach to grow in the segment. The company adapts its aggression to the market cycle: in hard markets, it focuses on scaling quickly in profitable segments and optimizing capital by exiting underperforming risks; conversely, in soft markets, it adopts a "market observant" stance, expanding horizontally only in pockets where rate adequacy is proven and prioritizing high-quality risks over volume. The management emphasized that severity dominates frequency in the portfolio, noting that a single catastrophic (CAT) event can erode cumulative profits from multiple underwriting years. Consequently, the company remains vigilant on exposures, particularly in highconcentration zones such as metros and industrial belts, to mitigate location-based CAT risks. Structurally, the company differentiates its capital strategy by treating reinsurers as core capital providers rather than just risk-transfer partners. Unlike peers who predominantly utilize Surplus Treaties, Go Digit employs a Quota Share structure (retention ~23%, cession ~67%). This alignment has reportedly fostered higher confidence among reinsurers, resulting in oversubscription during recent treaty renewals and ensuring adequate capacity even during harder market cycles.

We maintain SELL with an unchanged Dec-26E TP of Rs290

Go Digit continues to position itself as a tech-enabled insurer with a differentiated approach to underwriting and claims. The management has adopted a choice-led growth strategy across segments while focusing on profitability. While we appreciate the company’s disciplined and selective growth strategy, we see limitations in ‘growth with profitability’ that can justify the premium valuations at which the stock is trading. We maintain SELL, with an unchanged Dec-26E TP of Rs290, implying FY26E P/E of 30x.

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