ICICI Lombard share price jumps over 5% after strong Q4 results; Should you buy, sell or hold the stock?

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₹1,736.00 apiece on the BSE. ICICI Lombard General Insurance Company posted a net profit of ₹519 crore in Q4FY24, registering a growth of 19% from ₹436 crore in the year-ago period. The company’s net premium written in the March quarter increased 18% to ₹4,767 crore from ₹4,047 crore, year-on-year (YoY).

Its solvency ratio also improved to 2.62% from 2.51% in the year-ago period. ICICI Lombard’s board of directors also recommended a final dividend of ₹6 per share. Also read: Brigade Enterprises share price jumps over 4% on record pre-sales in FY24; Should you buy? Kotak Institutional Equities believes ICICI Lombard has fared well due to a combination of a better pricing environment and better risk management.

“While near-term profitability improvement may be visible, we expect growth aggression to keep medium term profitability range bound. However, the motor sector has fewer moats, and hence the performance of even the best-performing player is not insulated when industry aggression increases; rich valuations encourage competition," Kotak Institutional Equities said in a note. It believes while its premium valuations reflect superior performance, the scarcity premium (if any) may be at risk from listing of motor insurance peers.

The brokerage firm revised up its estimates by 3-4%, and retained a ‘Reduce’ call and raised ICICI Lombard share target price to ₹1,550 per share from ₹1,475 earlier. Also Read: Just Dial share price surges over 10% to hit 52-week high after Q4 result Nuvama Institutional Equities noted that the management of ICICI Lombard cited a much-improved competitive environment, and mildly improved its guidance to an exit CoR of 101.5% for FY25E. It believes the management is being cautious.