ICICI Lombard, ICICI Prudential, Bank Of Maharashtra Q1 Results Review — HDFC Securities

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HDFC Securities Institutional Equities

ICICI Lombard General Insurance - Profits defy the growth dip: Maintain Buy

ICICI Lombard General Insurance Company Ltd. reported in-line net earned premium growth at 14% YoY, although PAT witnessed a sharp jump (+29% YoY), ahead of our estimates.

We believe that the steep growth in profitability was driven by slowdown in the topline growth, lower loss ratios, and continued high mix of realized capital gains (+34%YoY).

Given that ICICI Lombard lost market share across all major segments (except retail health) and lagged industry growth during Q1 FY26, we expect this to reflect in deceleration in NEP during FY26E.

We maintain our FY26-27E earnings estimates and COR at 102.1%/100.9%; while we expect modest FY26E earnings growth (+6% YoY), we reiterate that the quality of earnings is likely to be superior.

We maintain our Buy recommendation with a target price of Rs 2,210 (32.4x Mar-27E EPS) on the back of sustained dominance in core businesses (motor and commercial lines), likely tailwinds from easing competitive pressures on account of growing EOM compliance by peers, and build-out of capabilities in the retail health segment.

Bank of Maharashtra - Strong quarter; Capitalzing on a natural right-to-win

Bank of Maharashtra’s reported a healthy set of Q1 FY26 earnings on the back of steady margins as the impact of rate cut was offset by previous MCLR hikes, higher treasury gains and lower opex intensity. Loan growth (+15% YoY; 0.5% QoQ) was muted with growth largely driven from retail segments.

Deposit growth (+14% YoY, -0.7% QoQ) was soft too as CASA ratio declined to 50.1% (-321 bps QoQ) on account of downward normalization of CA balances in Q4 FY25.

Credit costs inched up to 1.2% (1.1% in Q4 FY25) owing to seasonality in agri portfolio.

We believe Bank of Maharashtra has a superior deposit franchise, stemming from sticky and sizable state and public account balances, reflected in a best-in-class mix of CA balances (~14% of deposits), translating into lower cost of funds, and a superior margin profile.

We expect Bank of Maharashtra to sustain its high growth and healthy earnings trajectory (while expanding beyond the state of Maharashtra) building in a 19% pre-provision operating profit CAGR and 14% EPS CAGR between FY25-27E.

We reiterate our Buy rating on Bank of Maharashtra with no revision in our estimates and a target price of Rs 70 (1.4x Mar-27 adjusted book value per share).

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