ICICI Lombard shares under pressure after CEO quits

ICICI Lombard General Insurance Company shares faced selling pressure on Friday after the private sector insurer said its CEO and Managing Director, Bhargav Dasgupta, tendered his resignation to pursue a career opportunity outside the country. The stock of ICICI Lombard General Insurance declined by as much as Rs 37.2, or 2.7 per cent, to Rs 1,320.2 apiece in morning deals on BSE, continuing to weaken for a fourth consecutive session. 

The company said its board took note of the CEO's resignation and was in the process of filling up the resultant vacancy. Dasgupta will be officiating his responsibilities till his last working date, which will be intimated in due course of time, it added. 

"It has been an honour to lead ICICI Lombard for more than 14 years and to serve the 32 million policyholders who trust us for their insurance needs," Dasgupta wrote in his resignation letter, dated September 21. 

"I have had the privilege to work with an exceptionally dedicated and skilled team of executives who lead the most talented group of employees in the industry. It is thanks to their collective effort that the company has grown to be the second largest insurance company in the country, growing revenues six times and net profits 78 times over these 14 years," wrote Dasgupta.  

"It has been my pleasure to lead such a team at ICICI Lombard. I could not have asked for a more supportive board of directors, and I treasure the relationship that I have built with each one of you… I am certain that a suitable successor will be found soon. Thereafter, I would be happy to support my successor in any manner required during my notice period," he added. 

Dasgupta was due to step down from his position in April 2024 after the completion of 15 years as CEO. 

ICICI Lombard General Insurance's financial results for the April-June period fell short of analysts' estimates. The company reported an 11.8 per cent year-on-year increase in net profit to Rs 390.3 crore over 12.1 per cent growth in net premium earned to Rs 3,887.3 crore for the first quarter of the financial year, according to a regulatory filing. 

Its expense ratio—a key measure of profitability for an insurer—came in at 17.21 per cent for the three-month period. 

According to Zee Business research, ICICI Lombard's quarterly net profit was estimated at Rs 475 crore, net premium earned at Rs 3,942.6 crore, and expense ratio at 28 per cent.

Should you buy, sell or hold ICICI Lombard General Insurance Company shares?

Zee Business analyst Kushal Gupta recommends selling the stock for a near-term target of Rs 1,310 with a stop loss at Rs 1,370.

ICICI Lombard General Insurance shares: Past performance

The insurer's stock has risen 11.5 per cent in the past year, in line with the headline Nifty index.

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