ICICI Lombard, ICICI Prudential Life results fail to excite Street. Here's what to do with stocks

ICICI Lombard General Insurance and ICICI Prudential Life Insurance shares faced selling pressure on Wednesday, a day after both private sector insurers reported their financial results that fell short of analysts' expectations.

ICICI Prudential largely stayed in negative territory in intraday trade, declining by as much as Rs 8.7  or 1.8 per cent to Rs 475.7 apiece on BSE.

ICICI Lombard shares fell by as much as Rs 75.8 or 6.1 per cent to Rs 1,174.4 apiece on the bourse, coming within Rs 104 of a 52-week low of 1,071 hit in June 2022.

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ICICI Lombard Results

ICICI Lombard General Insurance Company reported a net profit of Rs 352.5 crore for the October-December period, marking an increase of 11 per cent compared with the corresponding period a year ago. Its net premium earned increased 14.4 per cent on year to Rs 3,792 crore.

Both top-line and bottom-line missed analysts' estimates.

According to Zee Business research, ICICI Lombard's profit was estimated at Rs 368 crore and net premium earned at Rs 3,905.1 crore.

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ICICI Prudential Results

The life insurer reported a 28.9 per cent fall in net profit to Rs 220.6 crore for the December quarter compared with the year-ago period. Its net premium income, however, increased 4.3 per cent on a year-on-year basis to Rs 9464.5 crore.

According to Zee Business research, the insurance company's net profit was estimated at Rs 270 crore and net premium earned at Rs 10,552 crore.

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How brokerages are reading the insurers' Q3 results

ICICI Lombard’s performance continues to be marred by high competition in the motor own-damage segment, leading to slower growth and high claims, according to Kotak Institutional Equities Analyst Nischint Chawathe.

The brokerage retained a cautious stance on the general insurer with a 'reduce' rating and raised its target price for the stock to Rs 1,225 apiece from Rs 1,200 apiece.
Jefferies maintained a 'buy' call on ICICI Lombard citing growth in premium owing to the health segment. The brokerage has a target price of Rs 1,620 apiece for the stock -- implying upside potential of 30 per cent.

CLSA remained bullish on ICICI Prudential, maintaining a 'buy' with a target of Rs 620 apiece -- implying a 28 per cent upside.

ICICI Prudential's quarterly performance was mixed with a six per cent decline in the annual premium equivalent but an improvement in the value of new business margin, which is a positive, the brokerage highlighted.

CLSA expects the credit life and annuity to continue to drive growth for the private life insurer.