InvestorQ : I am holding some shares of ICICI Lombard and I guess the latest quarter results have been good. Do you suggest I hold the stock or exit partially. I bought at around Rs.800?
Rutuja Nigam made post

I am holding some shares of ICICI Lombard and I guess the latest quarter results have been good. Do you suggest I hold the stock or exit partially. I bought at around Rs.800?

Answer
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Arti Chavan answered.
1 year ago


ICICI Lombard Q4 highlights

For the fourth quarter ended March 2019, ICICI Lombard reported a 26% growth in net revenues to Rs.407 crore. Even the net profit was up by 7.5% at Rs.227 crore, giving a very healthy net margin of nearly 55%. ICICI Lombard is the general insurance arm of the ICICI Group and is a joint venture with Lombard of UK. The stock is up by 40% in the last one year and has gained close to 34% in the last 6 months itself.

Outlook for ICICI Lombard stock

The private insurance companies have been consistently taking market share from the traditional PSU general insurer and ICICI Lombard has been one of the big beneficiaries of this trend. This is a business where less than 5% of the potential is full tapped, so it leaves a huge opportunity ahead. The stock touched a low of Rs.638 at the peak of the liquidity crisis in October last year and has bounced smartly since then. There is surely the huge potential in the industry but then this is an industry segment that is getting increasingly competitive.

To hold or partially sell the stock?

You have got in at an attractive price of Rs.800, which means you are sitting on more than 30% profits in a short period of time. You can look to keep a trailing stop loss much lower and keep hiking the trailing stop loss as you go ahead. We don’t see too many downside risks to the stock, so you can hold it.