Jefferies has maintained a ‘Buy’ rating on ICICI Lombard General Insurance, while cutting its target price to ₹2,170, as the stock closed at ₹1,832.00 in the previous session. The revision follows weaker-than-expected Q4FY25 results, prompting a more cautious near-term view on margins and earnings growth.
For the quarter, the company reported a net profit of ₹5.1 billion, a 2% year-on-year decline, primarily due to lower operating profits driven by a higher combined ratio (COR) and softer investment income. While gross premiums increased 2%, reflecting the impact of 1/n accounting for long-term products, net earned premium (NEP) showed a more robust 20% growth.
Jefferies flagged rising competition in the motor insurance segment, especially from public sector insurers, as a key concern that could persist. The brokerage also noted aggressive positioning by mid-sized private players aiming to meet month-end targets, intensifying pricing pressures.
As a result, Jefferies has trimmed its EPS estimates by approximately 6%, although it continues to see value in the stock. A potential hike in Motor Third-Party (TP) premiums could be a positive trigger for underwriting margins in the near term.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.