ICICI Lombard shares gain over 7%, log biggest intraday jump in 8 months on Q3FY24 earnings

Despite the weakness in the broader market, ICICI Lombard General Insurance, one of the leading and established private sector general insurance companies in India, saw a sharp uptick in its share value in today's trade, gaining 7.4% to reach an intraday high of 1,476 apiece. This was the stock's biggest intraday jump since May 2023.

The notable surge in shares today is attributed to the release of the company's Q3FY24 earnings on Tuesday post market hours, reporting a 22.4% YoY improvement in net profit to 431 crore. In the same period last year, the company posted a net profit of 353 crore. The net premium income came in at 4,690 crore in Q3FY24, beating the Street estimates.

Its solvency ratio improved 256% YoY in Q3. : It reported an improvement in the claims ratio to 68.8% in Q3FY24 from 70.7% in Q2 FY24 and 70.3% in Q3FY23. The claims ratio in the health business improved, likely reflecting better pricing in the group business, said domestic brokerage firm Kotak Institutional Equities.

On the other hand, Motor OD reported an 810 basis point YoY improvement in the claims ratio to 64.9% in Q3FY24 (though a tad higher than 64.1% in 2QFY24), likely reflecting better portfolio selection and improvement in the industry’s claims ratio, said the brokerage. Meanwhile, the company, in its earnings report, has indicated early signs of competitive intensity easing and growth returning to business.

Following the company's December quarter performance, Kotak Institutional Equities revised its target price higher to 1,400 apiece from an earlier price of 1,300 but retained its 'reduce' rating on the stock. However, the stock crossed the brokerage's target price in today's session.

"The company has shown profitability improvements and topline growth (though better YoY) but has been a tad lower/in line with the industry and yet to see tailwinds," said the brokerage. : Another brokerage firm, Nuvama Institutional Equities, also retained its 'hold' call on the stock but raised the target price to 1,520 apiece from the earlier target price of 1,350.

Muted Performance Following two years of underperformance between CY21 and CY22, the shares have exhibited a rebound in CY23 with a return of 14.80%. However, this performance falls below the benchmark Nifty 50's return, which recorded a 20% gain during the same period. In the current month, the stock has seen an increase of 3.25% so far.

: ICICI Lombard General Insurance is the second largest general insurance and largest private sector general insurance player with a market share of 8.2% on a gross direct premium income (GDPI) basis for FY23. It was founded in 2001 as a joint venture between ICICI Bank and Fairfax Financial Holdings.

The joint venture was terminated in 2018, and ICICI Bank is now the sole promoter. The company offers a comprehensive and well diversified range of products, including motor damage, motor third party, health, personal accident, crop, fire, marine, engineering, and liability insurance, among others. At 02:15 pm, the stock was trading with a gain of 6.88% at 1,468.75 apiece Livemint tops charts as the fastest growing news website in the world to know more.

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