ICICI Lombard Q2: Mixed growth, motor weak; health & fire support Buy call

Analysts remain optimistic on ICICI Lombard’s prospects despite a mixed September quarter (Q2FY26) performance, highlighting strong growth in retail health and fire segments while noting challenges in the motor insurance business. 

 

Both brokerages Nuvama and Motilal Oswal continue to maintain a ‘Buy’ rating on ICICI Lombard stock, with target prices of ₹2,340 and ₹2,300, respectively, citing recovery potential from GST-led vehicle sales and sustained operational efficiency.

 

On the bourses, ICICI Lombard share price rallied up to 4.18 per cent to hit an intraday high of ₹1,936.40 per share. Around 9:20 AM, ICICI Lombard share was trading 3.79 per cent higher at ₹1,929.15 per share. By comparison, BSE Sensex was trading 0.2 per cent higher at 82,197.25 levels.  For the quarter ended September 2025, ICICI Lombard reported a muted 1.6 per cent year-on-year (Y-o-Y) growth in gross written premium (GWP), reflecting slower growth in the motor segment and a 63-basis-point decline in motor market share, according to Nuvama. 

 

 

Motilal Oswal pegged GWP growth at 2 per cent Y-o-Y to ₹7,060 crore, largely in line with expectations, while net earned premium (NEP) rose 12 per cent Y-o-Y to ₹5,650 crore, exceeding their estimate by 16 per cent. Retail health continued to outperform, with H1FY26 NEP up 47.3 per cent Y-o-Y, translating into a 50-basis-point market share gain. Fire insurance also saw strong momentum, with a 27.3 per cent surge in Q2FY26, while growth in the group health segment moderated to 14.6 per cent Y-o-Y due to competitive pricing pressures.  ALSO READ | SRF gets new 'Buy' rating from Antique; check target, outlook here 

Profitability showed resilience despite elevated claims, primarily supported by investment income and disciplined underwriting, analysts noted. 

 

ICICI Lombard’s combined ratio rose to 105.1 per cent, up 68 basis points Y-o-Y, though excluding catastrophe (CAT) losses, it stood at 103.8 per cent, according to Nuvama. Motor own-damage (OD) loss ratios spiked to 70.1 per cent, while motor third-party (TP) loss ratios were at 60.6 per cent. Motilal Oswal noted that the company outperformed the motor insurance industry in terms of profitability despite steep pricing pressures, aided by strong underwriting discipline.

 

Investment performance was another key driver, with yields including capital gains at 9 per cent, helping deliver adjusted profit after tax (APAT) growth of 18.1 per cent Y-o-Y to ₹819 crore (Nuvama) and PAT of ₹820 crore, a 18 per cent Y-o-Y increase (Motilal Oswal). Analysts cautioned that reliance on capital gains may moderate future profit after tax (PAT) growth as investment-book gains normalise, though investment yields ex-capital gains improved 54 basis points Y-o-Y to 7.3 per cent.

 

Going forward, management expects the recent GST rate cut on vehicles to boost new motor sales, which could gradually improve own-damage volumes and help regain market share. Both brokerages highlighted the company’s ability to absorb pricing pressures through efficiency gains and volume growth.   ALSO READ | Brokerages bullish on LG Electronics post-listing; targets up to ₹2,050 

Nuvama revised FY26-28E APAT by -10.8 per cent/-1.4 per cent/-5.1 per cent to account for persistent competitive intensity, while Motilal Oswal raised NEP estimates for FY26-FY28 by 6-7 per cent, with modest EPS adjustments of 1-3 per cent.

 

That said, ICICI Lombard delivered a mixed quarter with strong segmental growth in retail health and fire, but motor segment weakness and elevated combined ratios tempered the overall performance. Analysts, however, remain bullish, retaining ‘Buy’ ratings, stressing upon potential recovery in motor insurance and steady profitability across diversified lines.