Reduce ICICI GI, target price Rs 1141: HDFC Securities

HDFC Securities has given a reduce rating to ICICI Lombard General Insurance Company with a target price of Rs 1141. The share price moved up by 2.79 per cent from its previous close of Rs 1205.45. The stock’s last traded price is Rs 1239.05.

ICICI Lombard General Insurance Company Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 56393.52 Crore) operating in Financial Services sector.

ICICI Lombard General Insurance Company Ltd. key Products/Revenue Segments include Miscellaneous Insurance which contributed Rs 1413.48 Crore to Sales Value (70.37 % of Total Sales), Interest, Dividend & Rent which contributed Rs 389.47 Crore to Sales Value (19.39 % of Total Sales), Fire Insurance which contributed Rs 95.14 Crore to Sales Value (4.73 % of Total Sales), Income From Sale Of Share & Securities which contributed Rs 74.97 Crore to Sales Value (3.73 % of Total Sales) and Marine Insurance which contributed Rs 35.47 Crore to Sales Value (1.76 % of Total Sales)for the year ending 31-Mar-2020.


Financials
For the quarter ended 30-06-2020, the company reported a Standalone sales of Rs 443.99 Crore, down 6.69 % from last quarter Sales of Rs 475.82 Crore and up 18.61 % from last year same quarter Sales of Rs 374.33 Crore. The Company reported net profit after tax of Rs 398.10 Crore in latest quarter.

Investment Rationale
NEP expected to increase 4.0% YoY as new vehicle sales and renewals of older policies improved with Unlock. Property segment is expected to do well as a result of the price hikes mandated by GICRE. As the lockdown eases, COR’s to increase sequentially to 103.0% (+231bps) as loss ratios are expected to be higher. Commentary on loss ratios, reinsurance costs is key.