Motilal Oswal's research report on ICICI Lombard
In 4QFY23, underwriting loss amounted to INR2.5b compared to a loss of INR2.9b in 3QFY23 v/s. our estimates of INR3.7b. The beat was on account of lower-than-expected total expense ratio (commission + opex). The claims ratio in 4QFY23 increased to 74.2% from 70.3% in 3QFY23, due to higher loss ratio in Motor TP and other misc. commercial lines. The claims ratio increased ~223bp, on a YoY basis, which was higher than our expectations. Policyholders’ investment income stood at INR6.2b, which is in line with our expectations. The Combined ratio for the quarter stood at 104.2% v/s 103.2%/104.4% in 4QFY22/ 3QFY23. The solvency ratio stood was flat at 2.5x. PAT for the quarter grew 40% YoY to INR4.4b v/s our estimate of INR3.4b. In FY23, NEP grew 14% YoY, while the combined ratio stood at 104.5% v/s. 108.8%. PAT growth over the same period stood at 26% YoY. While our estimates for premium remains unchanged for FY24/FY25, our PAT estimates have been marginally lowered by 4% each for FY24/FY25. We retain our BUY rating and our target price of INR1,400 (29x FY25E).
Outlook
While our estimates for premium remains unchanged for FY24/FY25, our PAT estimates have been marginally lowered by 4% each for FY24/FY25. We retain our BUY rating and our target price of INR1,400 (29x FY25E).
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