1, March, 2024
HomeBusinessMotilal Oswal Recommends Buying ICICI Lombard with a Target of Rs 1650

Motilal Oswal Recommends Buying ICICI Lombard with a Target of Rs 1650

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Motilal Oswal, in its research report dated January 16, 2024, expresses a bullish outlook on ICICI Lombard, recommending a buy rating with a target price of Rs 1650.

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ICICI Lombard’s (ICICIGI) Net Earned Premium (NEP) aligned with expectations, reaching INR 43 billion, a 14% YoY increase. However, investment income from policyholders and shareholders’ accounts fell below estimates, resulting in a PAT miss in 3QFY24.

The claims ratio at 70.0% was in line with the estimate of 70.5%, and the combined ratio stood at 103.6%, compared to 103.9% in 2QFY24. Despite a 22% YoY PAT growth, there was a 25% QoQ decline to INR 4.3 billion, 27% lower than the estimate. For 9MFY24, NEP/PAT grew by 13%/20% to INR 125 billion/INR 14 billion.

Despite the challenges, the company maintains its guidance of achieving a combined ratio of 102% by FY25. Motilal Oswal has adjusted its estimates to reflect the lower-than-expected 3Q performance, leading to a 4.5%/4.6% cut in EPS for FY24/FY25. The recommendation to BUY is reiterated with a target price of INR 1,650, based on 30x FY26E.

Read Also | ICICI Lombard Faces Rs 1,730-Crore Tax Notice, Stock Drops 2% – Second Notice in 3 Months

As always, it’s crucial to note that the opinions and investment tips presented in this report are those of investment experts, and users are strongly advised to consult certified experts before making any investment decisions.

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