ICICI Group Stock in focus after reporting 30% YoY increase in net profits

On 15 April 2025, this leading insurance company announced their financial results ending 31 March 2025. This result has fetched some mixed reactions from the market. In this article, we will try to understand the buzz about this leading insurance company.

Price Action

The shares of ICICI Lombard General Insurance Company Ltd opened at Rs 1,759.40 on Wednesday and made an intraday high of Rs 1,817.90. However, the stock later closed at Rs 1,811.80.

About the company

ICICI Lombard is a premium private general insurer in India dealing in motor, health, crop, fire, personal accident, marine, engineering, and liability insurance across distribution channels. Operating for more than 20 years, the firm functions under the brand philosophy of ‘Nibhaaye Vaade’, which encompasses customer centricity. 

The company has issued over 37.6 million policies, honoured over 3.2 million claims, and has a Gross Written Premium (GWP) of Rs 282.58 billion for the year ended March 31, 2025. ICICI Lombard has 328 branches and 15,123 employees as of March 31, 2025

Financial and Other Highlights

ICICI Lombard reported a revenue of Rs 23,961 crore in FY25, up by 10 percent from its FY24 revenue of Rs 20,487 crore. It has an operating profit of Rs 3,281 crore in FY25, up by 27 percent, as compared to its FY24 operating profit of Rs 2,577 crore.  As of FY25, its net profit stands at Rs 2,508 crore, up by 30.7 percent,  as compared to its FY24 net profit of Rs 1,919 crore.

In FY2025, ICICI Lombard recorded robust performance with Gross Direct Premium Income (GDPI) increasing by 8.3 percent to Rs 268.33 billion, higher than the industry growth of 6.2%. On a normalized basis, excluding the effect of accounting principles, GDPI increased by 11.0% versus the industry’s 8.6 percent. 

For Q4 FY2025, GDPI was at Rs 62.11 billion, recording a year-on-year growth of 2.3%. The combined ratio of the company improved to 102.8% in FY2025 from 103.3% in FY2024, and excluding CAT losses, it was 102.4%. 

The company offered a final dividend of Rs 7 per share, taking the FY2025 dividend to a total of Rs 12.50 per share. Return on Average Equity (ROAE) enhanced to 19.1% from 17.2% in FY2024, while the solvency ratio enhanced to 2.69x as of March 31, 2025, significantly higher than the regulatory requirement of 1.50x.

Analyst Recommendation

Brokerage firm Morgan Stanley has downgraded the stock and has set a price target of Rs 1,855 per share, signifying an upside potential of 2.3 percent. It stated that the company missed its fourth quarter net profit. It is optimistic about the company’s growth but sees a limited upside due to its valuation constraints, weaker underwriting results, and lower investment income

Whereas, Nuvama has cut its price target by ~13 percent from Rs 2,400 per share to Rs 2,100 per share, signifying an upside potential of 16 percent. It stated that the its 10.2 percent GWP was a result of a slowdown in new vehicle sales and deferred accounting on long-term products. Adding to it, it also mentioned that the company’s combined ratio dropped 23 bps sequentially but increased 26 bps yearly to 102.5%.

Conclusion

ICICI Lombard has reported a robust FY2025 with double-digit topline growth, operating profit growth, and net profit growth along with a solid solvency ratio and return on equity. While there has been some decline in Q4 and mixed analysts’ views based on valuation pressures and underwriting losses, the long-term fundamentals of the company are intact. 

Written by Satyajeet Mukherjee

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