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Last Updated : Jul 01, 2020 11:08 AM IST | Source: Moneycontrol.com

Buy GIC Reinsurance; target of Rs 185: HDFC Securities

HDFC Securities is bullish on GIC Reinsurance has recommended buy rating on the stock with a target price of Rs 185 in its research report dated June 29, 2020.

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HDFC Securities' research report on GIC Reinsurance


Higher losses in agriculture and aviation led to increased 4QFY20 claims ratio of 89.1%, +1,917/-1,788bps YoY/QoQ. This resulted in underwriting losses of Rs 7.2bn. Investment income was hit by higher provisions of Rs 3.8bn bringing yield down to 7.7%. 4QFY20 APAT was Rs 12.2bn (+37.5% YoY).



Outlook


FY22E P/ABV of 0.6x result in our BUY recommendation with a TP of Rs 185. We estimate an FY22E adj. RoE at 7.4%, and value GICRE at 0.7x FY22E ABV less 10% discount. We continue to rate GICRE a BUY with a TP of Rs 185 (Mar-22E P/ABV of 0.6x).





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First Published on Jul 1, 2020 11:08 am
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