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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