Buy ICICI Lombard General Insurance Company; target of Rs 1540: Sharekhan

Sharekhan is bullish on ICICI Lombard General Insurance Company has recommended buy rating on the stock with a target price of Rs 1540 in its research report dated October 19, 2023.

Broker Research

October 21, 2023 / 13:37 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on ICICI Lombard General Insurance Company

Higher investment income (14% y-o-y/ 17% q-o-q) and lower underwriting losses led to strong earnings beat with PAT at Rs. 577 crore (down 2% y-o-y, mainly due to low tax rate in the base period). PBT grew by 26% y-o-y. Underwriting loss stood at Rs. 146 crore versus Rs. 320 crore q-o-q and Rs. 152 crore y-o-y. Net earned premium grew by 12% y-o-y. Claim ratio showed improvement (led by motor segment) reported at 70.7% versus 74.1% q-o-q and 72.8% y-o-y. However, expense ratio ratio was higher due to surge in commission cost. Thus, the combined ratio stood at 103.9% vs 103.8% q-o-q and 105.1% y-o-y. The company maintained its guidance of a high-teen growth in premium while combined ratio is expected to fall to 102% by FY25E.

Outlook

The stock currently trades at 32.7x/ 28.8x its FY2024E/ FY2025 EPS. We maintain a Buy rating with an unchanged PT of Rs. 1540.

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