Profit-booking in ICICI Lombard? General insurer's stock hits a speed bump after Q4 results

ICICI Lombard on Tuesday said its net income jumped almost 40 per cent to Rs 437 crore for the March quarter, boosted by the base effect in the year-ago period when it took a heavy hit from the pandemic-related claims.

ICICI Lombard is engaged in general insurance, reinsurance, insurance claims management, and investment management -Image Source: Pixabay

ICICI Lombard stock: Shares of ICICI Lombard General Insurance – an insurance subsidiary of ICICI Bank – tumbled as much as 4.5 per cent to touch the day’s low level of Rs 1080.8 per share on the BSE during Wednesday’s session day after the private insurer announced its earnings for January-March quarter of the last fiscal.

ICICI Lombard on Tuesday said its net income jumped almost 40 per cent to Rs 437 crore for the March quarter, boosted by the base effect in the year-ago period when it took a heavy hit from the pandemic-related claims.

Premium income inched up 6.7 per cent in the reporting quarter to Rs 4,977 crore, the private sector general insurer said. The key profitability metric, the combined ratio, stood at 104.5 in FY23 against 108.8 per cent in FY22. In the March quarter, it was 104.2 against 103.2 a year ago.

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At around 01:00 PM, the stock quoted Rs 1084.20 per share, down Rs 46.35 or 4.10 per cent on the BSE. It was trading near its 52-week low level of Rs 1,049.10 per share, touched on March 16, 2023.

Anil Singhvi’s view on ICICI Lombard Q4 results

Zee Business Managing Editor Anil Singhvi was of the view that ICICI Lombard’s earnings are strong year-on-year (YoY) basis, while it was mixed sequentially. He said that the company reported strong results due to higher earnings in net premium and lower commission.

The share price of ICICI Lombard has declined around 13 per cent from last quarter, and it has been up 4 per cent in the last one week.

What brokerages make of Q4 results?

Amid decent earnings, most global brokerages have given a ‘buy’ rating on the stock. According to UBS, the insurance company’s earnings were mixed, with net income beating the estimates while premium growth was slower than the industry.

Brokerage	Rating	Price Target
UBS	Buy	Rs 1,445
CLSA	Buy	Cut to Rs 1,400 from Rs 1,500
Morgan Stanley	Overweight	Rs 1,400
JP Morgan	Neutral	Cut to Rs 1,160 from Rs 1,250
Jefferies	Buy	Cut to Rs 1,560 from Rs 1,620
Macquarie	Underperform	Rs 995

JP Morgan believes that the product mix of ICICI Lombard will continue to shift to a more profitable health segment, while Jefferies advised to watch for the impact of a rise in reinsurance cost and Macquarie said that visibility on underwriting profitability remains poor for the company.

ICICI Lombard Dividend

The general insurance company’s board has proposed a final dividend of Rs 5.50 per share for the full year, taking the overall payout in the year to Rs 10 per share.

ICICI Lombard stock history

ICICI Lombard stock in the last one year has dipped nearly 20 per cent as compared to over four per cent rise in the Nifty50.

The counter has slumped around 13 per cent year-to-date as against a nearly three per cent fall in the benchmark index.

ICICI Lombard is engaged in general insurance, reinsurance, insurance claims management, and investment management.

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(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)

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