NIACL - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 2.8

📊 Fundamental Analysis of NIACL (New India Assurance Co. Ltd.)

✅ Positives

Zero Debt: Debt-to-equity of 0.00 — strong balance sheet

PEG Ratio: 0.38: Indicates undervaluation relative to expected growth

Stable Profitability

PAT Qtr: ₹356 Cr vs ₹349 Cr — consistent performance

Qtr Profit Var: 14.6% — modest growth

Book Value ≈ Current Price: ₹176 vs ₹174 — fair valuation

EPS: ₹6.29 — supports current price level

RSI: 31.9 — nearing oversold zone, potential for technical bounce

⚠️ Concerns

Low ROE & ROCE

ROE: 3.62%

ROCE: 3.56% — poor capital efficiency

High P/E (27.6) vs weak return metrics — valuation not justified

Dividend Yield: 1.19% — modest for a public sector insurer

Technical Weakness

Price below both DMA 50 and DMA 200

MACD: -2.07 — bearish trend

52w Index: 22.9% — underperformance relative to broader market

📉 Valuation & Ideal Entry Zone

Given current price of ₹174 and weak technicals

Ideal Entry Zone: ₹155–₹165

Near support levels and below book value

Improves margin of safety for long-term investors

🧭 Long-Term Investment Outlook

NIACL is a defensive, low-growth stock with limited upside unless ROE/ROCE improve significantly. It may suit conservative investors seeking exposure to the insurance sector, but not ideal for aggressive long-term compounding.

Hold only if seeking stability and low volatility

Holding Period: 2–4 years, contingent on improvement in return ratios and sector reforms

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹200–₹220

Near DMA resistance and psychological level

Full Exit: If ROE/ROCE remain below 5% for 2+ quarters and price fails to break ₹200

Reinvest only if return metrics improve and P/E compresses below 20

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