On Monday, HSBC (LON:HSBA) analyst Rahil Shah revised the price target for ICICI Lombard (ICICIGI:IN) to INR2,280 from the previous INR2,290. The firm continues to recommend a Buy rating on the stock.
The adjustment follows the company's second-quarter financial year 2025 performance, which showcased a profit after tax (PAT) that surpassed HSBC's expectations. The favorable results were attributed to stronger investment income than anticipated.
ICICI Lombard's operating performance remained robust during the quarter, with the insurer expanding its market share in premiums. The company also reported an improvement in its core combined ratio (CR) year-over-year. Additionally, ICICI Lombard has been making strides in its digital initiatives, which are part of its operational strategy.
Despite these positive developments, the premium growth experienced a deceleration, coming down from a 15-20% year-over-year rate to approximately 11% in the same period.
The moderation in premium growth is linked to a slowdown in the underlying assets, such as auto sales and credit disbursements. Moreover, the company has faced an uptick in competitive pressures within certain segments of its business. This competitive environment has been a factor in the tempered growth figures for the quarter.
HSBC's revised price target reflects a slight adjustment based on the latest quarterly outcomes and market conditions influencing ICICI Lombard's business. The Buy rating indicates the firm's continued confidence in the insurer's stock performance potential, despite the recent challenges in growth acceleration.
The report concludes with the analyst's commentary on ICICI Lombard's second-quarter performance, highlighting the company's achievements in market share and digital efforts, as well as the factors affecting its premium growth. The company's ability to outperform HSBC's earnings estimates, primarily due to its investment income, is also emphasized.
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