The company’s net profit came in at Rs 659 crore for the December quarter, weighed down by higher claims and a deterioration in underwriting performance. Profit had stood at ₹724 crore in the year-ago period
Gross direct premium income rose 13.3% to Rs 7,041 crore in Q3 FY26 from Rs 6,214 crore a year earlier, outpacing industry growth of 11.5%.
Gross direct premium income rose 13.3% to Rs 7,041 crore in Q3 FY26 from Rs 6,214 crore a year earlier, outpacing industry growth of 11.5%.
However, the combined ratio worsened to 104.5% from 102.7% in Q3 FY25, due to pressure in motor and health lines. Return on average equity declined to 16.5% from 21.5% a year ago. The combined ratio, a key profitability metric in insurance, measures the ratio of claims/expenses to the premiums earned in the period under review.
Should you buy, sell or hold?
Goldman Sachs has maintained a Neutral rating on ICICI Lombard while cutting its target price to Rs 1,925 per share, an upside of just 2% from current levels. The brokerage highlighted that Q3 GDPI growth of around 13% YoY was ahead of industry trends, led by strong momentum in the fire and health segments. However, profitability came under pressure as the combined ratio rose to 104.5%. Goldman has tweaked its FY26–FY28 EPS estimates in the range of -6% to +1%, factoring in labour code changes and revisions to the outlook. The stock currently trades at about 30x FY27 P/E, close to its five-year average, with earnings CAGR expected to remain in high single digits over FY25–FY28.Morgan Stanley has retained an Equal-weight rating on ICICI Lombard with a target price of Rs 2,035, an 8% upside. The brokerage noted that Q3 PAT missed both its own and Street estimates, primarily due to a higher combined ratio that weighed on profitability. Adjusted PAT, excluding one-offs, declined 3% YoY and 15% QoQ, while competitive thinking remains intense in the motor segment. Morgan Stanley expects GST rate cuts to support motor and health insurance growth in Q4 and sees around 13% GDPI growth in Q4 as well as FY27–FY28. While PAT forecasts have been cut, the target price remains unchanged as the valuation has been rolled forward to March 2027.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)