ICICIGI - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.2

📊 Core Financials:

- Quarterly PAT at ₹820 Cr vs ₹747 Cr previously → strong growth (18.1% variation).

- ROCE at 24.9% and ROE at 18.8% → healthy efficiency.

- Debt-to-equity ratio at 0.00 → debt-free balance sheet.

- Cash flows supported by consistent earnings, dividend yield at 0.64% adds investor appeal.

💹 Valuation Indicators:

- Current P/E: 34.7 vs Industry P/E: 42.8 → slightly undervalued compared to peers.

- P/B ratio: ~6.1 (₹1,954 / ₹322) → premium valuation.

- PEG ratio: 1.37 → fair but slightly stretched relative to growth.

- Intrinsic value appears close to CMP, suggesting balanced pricing.

🏢 Business Model & Competitive Advantage:

- ICICI Lombard (ICICIGI) is India’s leading general insurance company, offering motor, health, and corporate insurance.

- Competitive advantage lies in brand strength, diversified product portfolio, and strong distribution network.

- Market cap of ₹97,318 Cr reflects leadership in the insurance sector.

📈 Entry Zone & Long-Term Guidance:

- CMP ₹1,954 is near DMA 50 (₹1,968) and DMA 200 (₹1,920), showing neutral technicals.

- RSI at 43.5 and MACD negative → near oversold zone.

- Suggested entry zone: ₹1,850–₹1,930.

- Long-term holding recommended due to strong fundamentals, debt-free status, and growth in insurance penetration.

Positive

• Strong ROCE (24.9%) and ROE (18.8%).
• Debt-free balance sheet.
• Quarterly PAT growth of 18.1%.
• FII holdings increased by 0.10%.

Limitation

• P/B ratio ~6.1 indicates premium valuation.
• PEG ratio of 1.37 suggests slightly stretched valuation relative to growth.
• Dividend yield at 0.64% is modest.

Company Negative News

• DII holdings reduced by -0.11%.
• Stock showing weakness with negative MACD.

Company Positive News

• Quarterly PAT improved from ₹747 Cr to ₹820 Cr.
• FII holdings increased by 0.10%.

Industry

• Insurance industry is growing with rising demand for health and motor coverage.
• Industry P/E at 42.8 indicates sector is richly valued compared to ICICIGI’s lower P/E of 34.7.

Conclusion

⚖️ ICICI Lombard is financially strong with solid return ratios, debt-free balance sheet, and consistent profit growth. While valuations are slightly premium on P/B and PEG metrics, the stock trades at a discount to industry P/E. Entry is favorable around ₹1,850–₹1,930 for long-term investors, with potential for sustained growth driven by increasing insurance penetration in India.