Buy ICICI Lombard, target price Rs 1470: Emkay Global

Emkay Global has buy call on ICICI Lombard General Insurance Company with a target price of Rs 1470. The current market price of ICICI Lombard General Insurance Company is Rs 1236. Time period given by analyst is one year when ICICI Lombard General Insurance Company price can reach defined target.

ICICI Lombard General Insurance Company Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 59615.59 Crore) operating in Financial Services sector.

ICICI Lombard General Insurance Company Ltd. key Products/Revenue Segments include Miscellaneous Insurance, Other Operating Revenue, Fire Insurance and Marine Insurance for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Standalone Total Income of Rs 4149.38 Crore, down -13.55 % from last quarter Total Income of Rs 4799.75 Crore and up 21.54 % from last year same quarter Total Income of Rs 3414.09 Crore. Company reported net profit after tax of Rs 349.03 Crore in latest quarter.


Investment Rationale
Muted growth, deteriorating industry dynamics, and some specific non-operating concerns led to ICICIGI’s shares de-rating to the recent ~25x 2Y-forward EPS versus average of ~32x in the preceding three years. Now, with growth returning for the company and industry dynamics likely improving, the brokerage expects performance delivery to drive the gradual re-rating back to earlier levels. It Initiates coverage on ICICIGI with a Buy rating and a TP of Rs1,470 (implying ~30x Sep’24 EPS). Key risks: Downside: Sustained intense competition; Slower economic growth; Widespread pandemic; Upside risks: Faster consolidation in the industry; and Sustained strong economic growth.

Promoter/FII Holdings
Promoters held 48.03 per cent stake in the company as of 30-Jun-2022, while FIIs owned 26.43 per cent, DIIs 13.94 per cent.