ICICI Lombard Profit Slides 9% Amid Rising Costs; Analysts Remain Bullish
Overview
ICICI Lombard General Insurance reported a 9.04% year-on-year drop in net profit to ₹659 crore for Q3FY26. Despite higher expenses, gross written premium surged 14.8%. Analysts largely maintain a bullish outlook, citing the insurer's robust brand franchise and strategic gains in health insurance, though competition in motor insurance persists.
Stocks Mentioned
Q3 Financial Snapshot
ICICI Lombard General Insurance Company announced its Q3FY26 results after market close Tuesday, revealing a 9.04% year-on-year decline in net profit to ₹659 crore. The insurer's expenses rose significantly, up 16.19% to ₹6,039.06 crore, while commissions climbed 15.5% to ₹1,343.1 crore.
Despite the profit dip, gross written premium saw a robust 14.8% increase, reaching ₹7,432.98 crore from ₹6,474.45 crore in the prior year. Net premium income also grew by 12.7% to ₹5,685.3 crore, and investment income was up 8.23% to ₹909.01 crore. The company's solvency ratio stood at a healthy 269%, well above the regulatory requirement of 150% and improved from 237% a year ago.
Analyst Sentiment Shifts
Brokerages largely maintained a positive stance on ICICI Lombard, despite the weaker-than-expected profit figures. Motilal Oswal Financial Services reiterated a 'Buy' rating with a revised target of ₹2,260 from ₹2,400, noting the favorable impact of GST exemptions on health insurance and recovery in motor insurance.
The brokerage highlighted strong momentum in the retail health segment and the company's top position in motor own damage, despite competitive intensity. However, Motilal Oswal adjusted its claims ratio for motor, leading to a 4% reduction in FY26/27/28 earnings per share (EPS) estimates.
Emkay Global Financial Services maintained an 'Add' rating with a target of ₹2,250, acknowledging the weaker quarterly performance but emphasizing the company's focus on profit and strong brand. JM Financial Institutional Securities also kept its 'Buy' rating and ₹2,333 target, citing sustained net earned premium growth and a strong return on equity over 19% in 9MFY26. JM Financial anticipates improved profitability with IFRS implementation and believes ICICI Lombard is well-positioned for future opportunities.
