ICICI Lombard hits new high, enters the top 50 most-valued companies list

The stock rallied 6 per cent to Rs 1,464 on the BSE, surpassing its previous high of Rs 1,439.90 touched on December 26, 2019.

Shares of ICICI Lombard General Insurance Company moved higher by 6 per cent to its record high of Rs 1,464 on the BSE on Thursday, thereby entering the top 50 most valuable firms list. The stoock surpassed its previous high of Rs 1,439.90 touched on December 26, 2019.

At 11:32 am, ICICI Lombard was trading 5 per cent higher at Rs 1,452 on the BSE, as compared to a 0.08 per cent decline in the S&P BSE Sensex. With Rs 65,988 crore market capitalisation (market-cap), ICICI Lombard stood at 49th position in the overall market-cap ranking, BSE data shows. The company’s m-cap is now higher than that of ICICI Prudential Life Insurance Company (Rs 65,419 crore) and IndusInd Bank (Rs 63,854 crore), data shows.

For the July-September quarter (Q2FY21), ICICI Lombard reported a good set of numbers as the company posted a 35 per cent jump in net profit at Rs 416 crore in Q2FY21, compared to Rs 308 crore in the same period last year, driven by improved underwriting practices. Profits were also aided by the investment income which rose more than 8 per cent.

Gross Direct Premium Income (GDPI) grew 8 per cent year-on-year (YoY) and declined 3.4 per cent, sequentially.  The solvency ratio of the insurer improved to 2.74 at the end of September 2020, compared to 2.26 in the same period last year despite a rise in Covid claims and non-Covid claims picking up pace.

While there is a lot of demand in the auto sector due to the festive season, the management said, whether or not the demand sustains is something that needs to be watched. The concern, which the management sees is a second spike in the number of Covid cases.

“If India does not witness the second wave of Covid case then it will be positive for ICICI Lombard. General insurance segment is well-placed in the current scenario and ICIC Lombard has the required skill set of underwriting, strong capital to grow business,” an analyst at Angel Broking said. The brokerage firm has a positive view on ICICI Lombard considering the healthy return ratio and the industry has a structural demand tailwind.