scorecardresearchICICI Lombard falls over 4% as Q3 results miss analyst estimates

ICICI Lombard falls over 4% as Q3 results miss analyst estimates

Updated: 18 Jan 2023, 11:30 AM IST
TL;DR.
  • Analysts believe that post the Q3FY23 result, the stock price has seen sharp sell-off and has broken below key support.
ICICI Lombard General Insurance Company slips 4% in Wednesday's trade.

ICICI Lombard General Insurance Company slips 4% in Wednesday's trade.

Shares of ICICI Lombard General Insurance Company Ltd slumped over 4 percent on Wednesday after the company's Q3FY23 (October-December) results missed the Street's estimates.

On Tuesday, the general insurance company reported a 11 percent rise in net profit year-on-year at 353 crore for the quarter ended December 31, aided by robust growth in gross premiums underwritten. The gross premium grew 17.0 percent on year, and 5.6 percent quarter-on-quarter to 5,493 crore.

According to brokerage Nuvama Institutional Equities, the claims ratio improved 250 basis points quarter-on-quarter (QoQ) to 70.3 percent, but commission and expense ratios rose 73 basis points QoQ to 4.2 percent, and 50/110 basis points on year/QoQ to 29.9 percent, respectively.

Investment income moderated 11.9 percent QoQ to 7,600 crore, driving a decline in average profit after tax (APAT) of 23.7 percent QoQ to 3,500 crore.

"High competitive intensity in the motor segment is driving up Combined Operating Ratio (COR). We believe street would be less enthused by management’s guidance for COR at 102 percent and RoE of 18 percent by FY25E," said the brokerage.

On the technical front, analysts believe that post the Q3FY23 result, the stock price has seen sharp sell-off and has broken below key support. Further weakness can be expected towards 1,140 level, and immediate resistance is seen at 1,235 level.

The stock price fell 16.4 percent and underperformed its sector by 26.8 percent in the past year.

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ICICI Lombard General Insurance Company one-year performance

According to Mintgenie poll, 24 analysts on average recommend 'buy' rating for the stock.

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First Published: 18 Jan 2023, 11:30 AM IST