Buy ICICI Lombard General Insurance Company; target of Rs 2250: ICICI Securities

Buy

ICICI Securities's research report on ICICI Lombard General Insurance Company

ICICI Lombard (ICICIGI) reported healthy earnings growth of 25.4% between FY22-25 and 11.3% YoY growth in 9MFY26 (7.5% ex-capital gains). Even on 5-year basis, earnings CAGR stands at 16%, highlighting the compounding potential of the stock which warrants a commensurate multiple. Sectoral challenges, in terms of lower motor growth and higher loss ratios, are cyclical but growth has improved and outlook remains better in near term driven by GST cuts. Maintain BUY, as we roll forward to FY28E

Outlook

With an unchanged TP of INR 2,250, based on 28x FY28E (earlier 32x FY27E) EPS of INR 79.4 (earlier ~INR 70.3). Higher growth expectation is the primary driver for earnings growth in FY28, while higher COR (there are accounting related escalations without which COR is stable) and higher growth (earnings growth lags premium growth) is leading to ~2%/3% cut in FY26/27 estimates (ex-labour code cost).

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ICICI Lombard General Insurance Company_16012026_ICICI Securities