ICICI Lombard Q3 review: PAT slips YoY; analysts stay bullish on franchise

ICICI Lombard General Insurance Company reported its Q3FY26 results after market hours on Tuesday. Although the company posted weak numbers for the December quarter, brokerages remain bullish, citing its strong brand franchise.

 

At 9:16 AM, ICICI Lombard's share price was trading 0.24 per cent higher at ₹1,891.8 per share. In comparison, the BSE Sensex was down 0.2 per cent at 83,464.59. 

ICICI Lombard Q3 results highlights

• ICICI Lombard General Insurance recorded a 9.04 per cent year-on-year (Y-o-Y) drop in net profit to ₹659 crore in the October-December quarter of FY26 (Q3FY26), as compared to ₹724.38 crore in Q3 FY25.
• The expenses of the insurer were up by 16.19 per cent Y-o-Y to ₹6,039.06 crore in the quarter, while commissions rose by 15.5 per cent Y-o-Y to ₹1,343.1 crore.
• The gross written premium of the insurer was up by 14.8 per cent Y-o-Y to ₹7,432.98 crore from ₹6,474.45 crore in Q3FY25. Net premium income also increased by 12.7 per cent Y-o-Y to ₹5,685.3 crore. Investment income was up by 8.23 per cent Y-o-Y to ₹909.01 crore.
• The solvency ratio of the insurer stood at 269 per cent, compared with the regulatory mandate of 150 per cent. It stood at 237 per cent in the year-ago period.

Brokerages’ view on ICICI Lombard General Insurance Company

Motilal Oswal Financial Services | Buy | Target cut to ₹2,260 from ₹2,400

Q3FY26 witnessed the favourable impact of the recent goods and services tax (GST) exemption, making health insurance more affordable, while rate cuts in the automobile sector boosted vehicle sales, leading to a recovery in motor insurance, the brokerage noted.

 

 

Further, the company's retail health segment continued its strong momentum, gaining market share through effective new customer acquisition, strong distribution capabilities, and significant traction of its "Elevate" product, Motilal Oswal said. Competitive intensity remains high in the motor own damage segment, but the company maintains the top position.

 

“We have kept our premium estimates intact. However, we have raised the claims ratio for the motor segment considering the competitive intensity, leading to a 4 per cent decline in our FY26/27/28 earnings per share (EPS),” Motilal Oswal note said.   ALSO READ | TCS Q3 delivers steady show, brokerages split on growth outlook

Emkay Global Financial Services | Add | Target: ₹2,250

ICICI Lombard’s performance in the December quarter was weaker than consensus, according to Emkay. However, the brokerage has retained ‘Add’ given the company’s focus on profit and strong brand franchise.

 

To bake in the Q3 developments, the brokerage has increased its combined ratio estimate by 30 basis points (bps) over FY26-28; the lower investment income results in a 6 per cent cut in the FY26E EPS, but only 1 per cent cut in FY27-28E EPS. 

JM Financial Institutional Securities | Buy | Target: ₹2,333

ICICI Lombard reported weak results, the brokerage said. It added, despite adopting a focused underwriting approach, ICICI Lombard has sustained net earned premium growth of over 12 per cent over the past few quarters. The brokerage noted that heightened competition in high-return segments such as motor and commercial lines has weighed on growth recently.

 

However, ICICI Lombard still delivered a strong return on equity of over 19 per cent in 9MFY26, with JM Financial expecting profitability to improve further as the one-ninth (1/n) impact gets absorbed and IFRS implementation kicks in. While management may moderate near-term growth, the brokerage believes the company is well positioned to capture emerging opportunities, similar to how it benefited from the retail health insurance tailwind post goods and services tax (GST) 2.0. Recognising the quality of the franchise, the brokerage maintained ‘Buy’.

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.