Buy ICICI Lombard; target of Rs 2200: Motilal Oswal

Motilal Oswal's research report on ICICI Lombard

ICICIGI’s gross written premium was 10% up YoY in 4QFY25 to INR69b (in line), impacted by 1/n regulation implementation for long-term products. NEP grew 20% YoY to INR52.3b (15% beat). For FY25, it grew 17% YoY to INR198b. The claims ratio for the quarter stood at 71.6% (280bp above our estimates and 68.6% in 4QFY24). While the commission ratio declined to 18.7% vs our estimates of 19.2% and 19.9% in 4QFY24, the opex ratio came in at 12.1% vs. 13.7% in 4QFY24 and MOFSLe at 15.4%). The combined ratio was 90bp lower than our estimates at 102.5% (vs 102.2% in 4QFY24 and 102.7% in 3QFY25). PAT declined 2% YoY to INR5.1b (12% miss). For FY25, PAT grew 31% YoY to INR25b. The company is targeting double-digit growth in the motor segment through increased focus on older vehicles and robust expansion in the Commercial Vehicle (CV) segment.

Outlook

We have broadly retained our FY26/FY27 earnings estimates as higher NEP estimates are offset by lower investment income. Reiterate BUY with a TP of INR 2,200 (based on 33x Mar’27E EPS).