Brokerages are divided in their outlook on a prominent private sector general insurer following its Q4FY25 earnings. Jefferies and Nuvama have maintained ‘Buy’ ratings with trimmed target prices, while Morgan Stanley has downgraded the stock to ‘Equal-weight’, flagging concerns over limited upside and weak profitability trends.
The stock in focus is ICICI Lombard General Insurance, which reported a net profit of ₹5.1 billion, down 2% year-on-year, missing analyst expectations due to weaker underwriting performance and lower investment income. While gross written premiums grew 10.2% YoY, the combined ratio (COR) rose to 102.5%, and underwriting losses stood at ₹2.1 billion. Investment income softness further dragged bottom-line performance.
Jefferies trimmed its EPS estimates by ~6% and cut the target to ₹2,170, but maintained a positive stance, citing robust NEP growth and potential upside from a Motor Third-Party (TP) premium hike.
Nuvama, too, cut its target to ₹2,100 from ₹2,400, pointing to a sharp rise in loss ratios but retained a ‘Buy’ rating, noting the insurer’s cost efficiencies and long-term growth visibility.
In contrast, Morgan Stanley reduced its target to ₹1,855 and downgraded the stock to ‘Equal-weight’, highlighting that valuations at 36x FY26E P/E leave little room for rerating in the face of muted top-line and investment income.
ICICI Lombard shares last closed at ₹1,832.00, near Morgan Stanley’s revised target, with investors now awaiting further clarity in the upcoming quarters.
Disclaimer: The above views are of the brokerages and not the author or the publication. Please make any and every investment decision after consulting your financial advisor.