Sharekhan Initiates Buy On ICICI Group Stock For 33% Return, Board Recommends Final Dividend

Sharekhan initiates buy on ICICI Lombard General Insurance Company Ltd., an ICICI Group large-cap stock. The brokerage assigns a target price of Rs 1,400 apiece for the stock. Given the target price, the stock is likely to give up to 33% gains if purchased at the current market price. On April 18, 2023, the board of the company held a meeting and recommended a 55% final dividend for the year ended March 2022-23.

ICICI Lombard is one of the leading and established private-sector general insurance companies in India. It offers a well-diversified range of products and risk management solutions through multiple distribution channels. It has a market capitalisation of Rs 52,039.62 crore.

Stock's Current Market Price, Returns & 52-Week Low/High

The stock last traded at Rs 1,059.60 apiece on NSE, down 1.55% from the previous close. The stock is trading 1.01% up from its 52 week low which it hit on 21 March 2023 at Rs 1,049.05 apiece. Its 52 week high is Rs 1,412 apiece recorded on 21 April 2022. The stock has fallen 2.17% in 1 week and 2.17% in one month, respectively. It has fallen 24.37% in 1 year and 8.59% in 3 years, respectively. In 5 years, it has given a positive return of 37.57%.

Recommended Rs 5.50/share Final Dividend

According to the exchange filing by the Board of Directors of the ICICI Lombard Insurance Company Ltd., "The Board at the above Meeting also recommended final dividend of Rs 5.50/- per equity share i.e. at the rate of 55.0% of face value of Rs 10/- each for the financial year ended March 31, 2023, subject to approval of the Members of the Company at the ensuing Annual General Meeting."

Buy For a Target Price of Rs 1400/share

According to Sharekhan, The companys leading premium market share in the industry with secular growth potential, its profit focus with a profit share that is almost ~5x its premium market share, and its leading RoE profile make it a compelling investment for long-term financial services portfolios. "We expect healthy premium growth, led by investments in the health distribution channel and benefits accruing from past investments in technology. Gradual improvement in the motor business and health business should boost profitability although commercial lines will likely face headwinds in the near term due to the removal of standardized tariffs and higher reinsurance rates. We expect the company to deliver medium-term RoE of 18%. At the current price, the stock trades at 27.0x/23.7x its FY2024E/FY2025E EPS," the brokerage has said.

Disclaimer - The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.