Sharekhan has given Buy recommendation for ICICI Lombard General Insurance with a target price of Rs. 1620 in its research report issued on Apr 22, 2022
Sharekhan’s research report on ICICI Lombard General Insurance
ICICI Lombard General Insurance Company’s PAT missed expectations despite strong growth in net premium earned. In Q4FY2022, PAT stood at Rs. 313 crore versus street estimates of Rs. 344 crore, down 10% y-o-y. This was primarily due to higher combined ratio and lower income from investments. GDPI grew strong by 32% y-o-y in Q4FY2022 but was offset by increased expense ratio (~32.5%), aided by integration with Bharti Axa and rise in investments in distribution and technology. Management plans to further invest in technology and agency channels for the health segment to accelerate growth going ahead. This may result in its RoE to recover to high teens in the medium term and combined ratio may take longer to reach at ~100%. At the current price, the stock trades at 36.4x/28x its FY2023E/FY2024E EPS.
We maintain our Buy rating on ICICI Lombard General Insurance Company with a revised PT of Rs. 1,620.