Buy ICICI Lombard; target of Rs 2650: Motilal Oswal

Motilal Oswal's research report on ICICI Lombard

ICICI Lombard (ICICIGI) has experienced improved market share across segments on a YTD basis, most notably in the Motor OD, Motor TP, and Health segments by 179/83/85bp. While motor sales have been slow in the recent past, the momentum is expected to be strong in the festive season. Further, as highlighted in our earlier note, value growth will continue to be strong. With the segment profitability improving for the industry, ICICIGI is foraying into some profitable segments, such as ambulances and school buses. In the health segment, investments in agency channel and product innovation will continue to drive market share gains. Its recent product launch ‘Elevate’ has found decent success and the company plans to launch more innovative products in the near term. The fire segment continues to reel under pressure of pricing and ICICIGI is taking a calibrated approach here. For the crop business, while the dynamics have turned favorable following the government’s 80-110 scheme, the risk in the business remains high and, hence, ICICIGI will constrain the share to 3.0-5.0% of the overall premium.

Outlook

We reiterate our BUY rating and raise our target price of INR2,650 (premised on 38x Sept’26E).