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Since ICICI Lombard General Insurance Company Limited (NSEI:ICICIGI) released its earnings in March 2018, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 28.95% next year, though this is evidently lower than the past 5-year average earnings growth of 33.32%. With net income at current levels of ₹8.62B, we should see this rise to ₹11.11B in 2019. Below is a brief commentary around ICICI Lombard General Insurance’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here. See our latest analysis for ICICI Lombard General Insurance
Can we expect ICICI Lombard General Insurance to keep growing?
The longer term expectations from the 5 analysts of ICICIGI is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of ICICIGI’s earnings growth over these next few years.
By 2021, ICICIGI’s earnings should reach ₹16.35B, from current levels of ₹8.62B, resulting in an annual growth rate of 20.64%. EPS reaches ₹36.26 in the final year of forecast compared to the current ₹19.01 EPS today. The bottom-line growth seems to be caused by cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. Margins is currently sitting at 10.18%, which is expected to expand to 13.42% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For ICICI Lombard General Insurance, I’ve compiled three important factors you should look at:
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Valuation: What is ICICI Lombard General Insurance worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ICICI Lombard General Insurance is currently mispriced by the market.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ICICI Lombard General Insurance? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.