ICICI Securities Recommends Buying ICICI Lombard General Insurance, Targets Rs 2250

ICICI Lombard Posts Strong Earnings Growth Amid Sectoral Challenges

ICICI Lombard General Insurance Company has reported a healthy earnings compound annual growth rate (CAGR) of 17% over the last three years and 15% over the last six years. This highlights the compounding potential of the stock, making it an attractive investment opportunity.

The company's performance has improved despite sectoral challenges, such as lower motor growth and higher loss ratios. However, growth has picked up, and the outlook remains positive amidst heightened industry loss ratios and the possibility of a motor third-party (TP) hike. Additionally, the company's increasing market share in the health segment and improving return on equity (RoE) are expected to contribute incrementally to its growth.

Maintaining a Positive Outlook

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ICICI Securities maintains a BUY recommendation for ICICI Lombard with an unchanged target price (TP) of INR 2,250. This target price is based on a 30x multiple of the company's estimated earnings per share (EPS) for fiscal year 2028 (FY28E), which is INR 75. This represents an increase in multiple from 28x FY28E EPS of INR 79.4, reflecting a better underwriting outlook. The decrease in earnings is due to lower investment leverage as of FY26 end.

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The research report provides a comprehensive analysis of ICICI Lombard's performance and outlook, making it an essential read for investors and analysts interested in the insurance sector.