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Last Updated : Oct 22, 2019 12:42 PM IST | Source: Moneycontrol.com

ICICI Lombard shares at record high after Q2 results

Brokerages have given mixed reviews on the stock after the company's September quarter numbers.

 
 
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Shares of ICICI Lombard General Insurance Company jumped 4 percent to their fresh all-time high of Rs 1,292.65 on BSE on October 22, buoyed by its decent September quarter show.

The company on October 18 posted a 5 percent year-on-year (YoY) increase in its September quarter (Q2) net profit at Rs 307.91 crore.

The general insurer's underwriting loss came down significantly to Rs 8.75 crore compared to Rs 21.49 crore loss in the year-ago period. The combined ratio stood at 102.6 percent in Q2FY20 compared to 101.1 percent a year ago.

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Brokerages have given mixed reviews on the stock after the company's September quarter numbers.

"We maintain our positive view on the stock and see a 12-15 percent upside potential for the stock," said brokerage firm Sharekhan by BNP Paribas.

"While there were several one-offs and the structural business mix change impact, which saw a slower operating performance, we believe there are several tailwind benefits that are likely to continue," said Sharekhan.

The domestic brokerage firm thinks the company’s strategy to forego the crop business and instead focus on strong growth in preferred segments (such as fire, retail health and motor OD) will be a positive step for its profitability.

"We believe its increased focus on the higher-margin business, scale-driven operating cost and pricing benefits, and increasing retail focus make ILGI a strong franchise for the long-term," Sharekhan said.

On the contrary, HDFC Securities has a 'sell' recommendation on the stock with a target price of Rs 1,060.

"The company is best positioned to benefit from changing regulations in motor which will drive down both claims and tariffs. However, we expect high competitive intensity and lower motor TP tariffs to restrict underwriting margins and investment profits," said HDFC Securities.

Shares of ICICI Lombard traded 3.74 percent up at Rs 1,290.40 on BSE around 1230 hours.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Oct 22, 2019 12:42 pm

tags #BSE #stocks

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