ICICI Lombard General Insurance Company

Key Highlights

• ICICI Lombard (ICICIGI) reported a 25.4% growth in earnings between FY22 and FY25, with a 11.3% YoY growth in 9MFY26 (7.5% ex-capital gains).
• The company's 5-year earnings Compound Annual Growth Rate (CAGR) stands at 16%, indicating compounding potential.

Business Performance

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Despite sectoral challenges, including lower motor growth and higher loss ratios, ICICIGI has shown signs of improvement. Motor and health insurance segments are expected to recover, leading to an improvement in investment leverage, a key factor for rerating.

Valuation and Outlook

We maintain a BUY rating for ICICIGI with an unchanged Target Price (TP) of INR 2,250, based on 28x FY28E EPS of INR 79.4. Key risks include increased competitive intensity, rise in health claims, and lower-than-expected industry growth.

Recommendation

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

ICICIGI's healthy earnings growth, improving sectoral trends, and attractive valuations make the stock a favorable investment opportunity.