ICICI Lombard, Angel One, Mastek Q3 Results Reviews: HDFC Securities

HDFC Securities Institutional Equities

ICICI Lombard General Insurance Company Ltd. - ICICI Lombard reported net premiums written 2% below our estimates (up 14% YoY); however, better-than-expected loss ratios in motor third party business were offset by continued investments into building the retail health agency business, driving calculated combined operating ratios to 105% and adjusted profit after tax to Rs 3.5 billion (up 11% YoY, down 6% versus estimates). Even as we remain wary of heightened competitive intensity in the motor own damage segment, we expect loss ratios in the motor third party segment to inch up during FY24, and consequently cut our FY23E/24E earnings by 7/10% to build in slower than industry growth.

Angel One Ltd. - Angel One printed flat sequential growth in its top line due to slower retail derivatives average daily trading volumes and weak ancillary transaction revenues. Given the sharp jump in derivative volumes in Dec-22, followed by similar trends in Jan-23 to-date, we upgrade our earnings estimates by 8/3% for FY23E/FY24E.

Mastek Ltd. - Mastek reported a muted quarter; revenue growth of up 3.1% QoQ constant currency was led by the integration of MST Solutions and organic growth was flat QoQ. The organic growth was impacted by NHS Digital and U.S. Oracle portfolio offset by growth in UK private. The impact of NHS restructuring has been ~$25 million over the last nine months, with recovery taking longer than expected.

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