ICICI Lombard - Market Share Accretion To Continue Across Core Segments: Motilal Oswal

Motilal Oswal Report

Continued investments in retail health and growth momentum in old as well as new vehicle insurance have led to an improvement in ICICI Lombard General Insurance Ltd.’s market share. In the health segment, with growing traction of the newly launched retail solution ‘Elevate’, ICICI Lombard is confident of gaining market share at a faster pace in the medium term.

We expect ICICI Lombard to report a net earned premium/profit after tax compound annual growth rate of 18%/20% during FY24-FY27. We expect the company to deliver an return on equity of 20.2%/20.6% in FY26E/FY27.

International Financial Reporting Standards implementation will be earnings and return on equity accretive owing to the amortization of acquisition costs that are booked upfront under IGAAP. We have not built in the upsides in our estimates for IFRS implementation.

However, we assign a relatively higher multiple of 38 times on Sep’26E earnings (10% premium) to arrive at a fair value of Rs 2,650. This is also supported by our discounted investment income approach, assuming no underwriting profitability perennially that yields a fair valuation of Rs 2,600.

We reiterate our Buy rating and raise our target price of Rs 2,650 (premised on 38 times Sept’26E).

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