ICICI Lombard’s Shares Surge 7.4% After Strong Q3 Earnings

ICICI Lombard's Shares Surge 7.4% After Strong Q3 Earnings

VoM News Desk | January 17, 2024 | 03:36 PM IST | Breaking News | Follow on Google News

ICICI Lombard’s Shares Surge 7.4% After Strong Q3 Earnings

ICICI Lombard’s Shares Surge 7.4% After Strong Q3 Earnings

Despite the broader market weakness, ICICI Lombard General Insurance experienced a sharp uptick in its share value, surging 7.4% to an intraday high of ₹1,476 apiece. This notable jump is the stock’s most significant intraday increase since May 2023.

The surge follows the release of the company’s Q3 FY24 earnings, which revealed a robust 22.4% YoY improvement in net profit, reaching ₹431 crore compared to ₹353 crore in the same period last year. The net premium income for Q3FY24 surpassed Street estimates, standing at ₹4,690 crore, and the solvency ratio improved by 256% YoY.

Key highlights from the earnings report include an improvement in the claims ratio to 68.8% in Q3FY24, down from 70.7% in Q2 FY24 and 70.3% in Q3FY23. Notably, the health business saw a positive impact on the claims ratio, reflecting improved pricing in the group business. Additionally, Motor OD reported an 810 basis point YoY improvement in the claims ratio to 64.9% in Q3FY24, indicating better portfolio selection and an industry-wide improvement in claims ratios.

ICICI Lombard mentioned early signs of competitive intensity easing and growth returning to the business in its earnings report.

Following the strong performance in Q3, Kotak Institutional Equities revised its target price upward to ₹1,400, but retained a ‘reduce’ rating on the stock. On the other hand, Nuvama Institutional Equities maintained a ‘hold’ call and raised the target price to ₹1,520 from ₹1,350.

Despite a muted performance in CY21 and CY22, ICICI Lombard’s shares rebounded in CY23 with a return of 14.80%, slightly below the benchmark Nifty 50’s return of 20% during the same period. The stock has seen a 3.25% increase so far in the current month.

ICICI Lombard General Insurance, the second-largest general insurance and the largest private-sector general insurance player with an 8.2% market share, offers a diverse range of insurance products. Founded in 2001, it operates as a joint venture between ICICI Bank and Fairfax Financial Holdings. ICICI Bank is currently the sole promoter following the termination of the joint venture in 2018.

VoM News Desk

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