Buy ICICI Lombard, target price Rs 1,600: JM Financial
ICICI Lombard's on-going digital transformation has materially improved turn around time, convenience, customer access and productivity at the organizational level.
By ETMarkets.com | Updated:
JM Financial has buy call on ICICI Lombard General Insurance Company with a target price of Rs 1,600.
ICICI Lombard General Insurance Company Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 61643.59 crore) operating in Financial Services sector.
Investment Rationale
ICICI Lombard (ICICIGI) showcased its Digital Initiatives and underscored how it has been progressing on the journey of digitization, encompassing various stakeholders viz, customers, channel partners and employees.
This on-going digital transformation has materially improved turn around time, convenience, customer access and productivity at the organizational level. They aspire to be positioned on services (offerings), and do not play on pricing, hence they have premium pricing vs peers.
Similarly, they have not been aggressively working with aggregators as they want to ‘own the customer’ to create sustainable value for the organization.
The brokerage estimates 18% GWP CAGR over FY21-24E with earnings CAGR expected to be 20% on the back of topline growth and improving underwriting performance.
"Overall, we continue to like ICICIGI’s leadership position and conservative investment/ reserving approach and focus on profitable product lines. Maintain BUY with a TP of INR 1,600 (implying 32x FY24E EPS)," thr brokerage said.
Financials
For the quarter ended 31-12-2021, the company has reported a Standalone Total Income of Rs 4019.13 crore, up .93% from last quarter Total Income of Rs 3982.27 crore and up 25.64% from last year same quarter Total Income of Rs 3198.87 crore. Company has reported net profit after tax of Rs 317.53 crore in latest quarter.
Promoters held 48.05 per cent stake in the company as of 31-Dec-2021, while FIIs owned 29.4 per cent, DIIs 12.19 per cent.
ICICI Lombard General Insurance Company Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 61643.59 crore) operating in Financial Services sector.
Investment Rationale
ICICI Lombard (ICICIGI) showcased its Digital Initiatives and underscored how it has been progressing on the journey of digitization, encompassing various stakeholders viz, customers, channel partners and employees.
This on-going digital transformation has materially improved turn around time, convenience, customer access and productivity at the organizational level. They aspire to be positioned on services (offerings), and do not play on pricing, hence they have premium pricing vs peers.
Similarly, they have not been aggressively working with aggregators as they want to ‘own the customer’ to create sustainable value for the organization.
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The insurer has decently advanced on integration with Bharti AXA platform and entire migration to ICICIGI platform will be completed in 6-8 months with benefit in PnL from this year 2H onwards.The brokerage estimates 18% GWP CAGR over FY21-24E with earnings CAGR expected to be 20% on the back of topline growth and improving underwriting performance.
"Overall, we continue to like ICICIGI’s leadership position and conservative investment/ reserving approach and focus on profitable product lines. Maintain BUY with a TP of INR 1,600 (implying 32x FY24E EPS)," thr brokerage said.
Financials
For the quarter ended 31-12-2021, the company has reported a Standalone Total Income of Rs 4019.13 crore, up .93% from last quarter Total Income of Rs 3982.27 crore and up 25.64% from last year same quarter Total Income of Rs 3198.87 crore. Company has reported net profit after tax of Rs 317.53 crore in latest quarter.
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Promoter/FII Holdings Promoters held 48.05 per cent stake in the company as of 31-Dec-2021, while FIIs owned 29.4 per cent, DIIs 12.19 per cent.
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