ICICI Lombard Shares Price Target Increased by Jefferies to INR 2,600: Analysts Bullish on Future Growth
On Friday, ICICI Lombard (ICICIGI:IN) shares received a price target increase from Jefferies to INR 2,600 from INR 2,180, while the firm retained a Buy rating on the stock. The adjustment reflects the insurer's position as a prime beneficiary of the current uptrend in the motor insurance sector, driven by robust vehicle renewals and a surge in two-wheeler insurance uptake.
The analyst from Jefferies highlighted that ICICI Lombard's market share and profitability are likely to benefit from a decrease in competitive intensity. The company's new channel strategy, aimed at broadening the funnel for risk selection, is also expected to contribute to its growth. Despite the potential for an industry-wide increase in motor claims, ICICI Lombard's prudent reserving practices are anticipated to maintain a healthy claims outlook.
According to the analyst, ICICI Lombard's combined ratio, a measure of underwriting profitability, is projected to improve by approximately 370 basis points, reaching around 100% by the fiscal year 2027. The firm's earnings per share (EPS) estimates have been raised by 6-16% as a result of these positive factors. The analyst also noted the potential impact of the transition to International Financial Reporting Standards (IFRS) on ICICI Lombard's financial reporting.
The change is expected to increase reported earnings by 20-25%, which would, in turn, lower the implied price-to-earnings (P/E) ratio based on September 2026 estimates. This transition to IFRS accounting standards is seen as a factor that could further enhance the attractiveness of ICICI Lombard's shares in the eyes of investors.
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Analysis:
Jefferies' price target increase for ICICI Lombard reflects their bullish outlook on the company's future growth prospects in the motor insurance sector. The analyst highlighted key factors such as market share, profitability, and the impact of prudent reserving practices on the company's claims outlook. The projected improvement in the combined ratio and earnings per share estimates further support the positive sentiment towards ICICI Lombard.
Additionally, the potential impact of the transition to International Financial Reporting Standards (IFRS) on the company's financial reporting is seen as a favorable development that could make ICICI Lombard's shares more attractive to investors. Overall, this news suggests that ICICI Lombard is well-positioned for growth and profitability in the coming years.