ICICI Prudential vs ICICI Lombard: Which Stock Can Deliver Highest Upside According to Motilal Oswal?

Synopsis: Motilal Oswal, a leading Indian financial services firm, has identified two high-conviction insurance stocks with strong upside potential. In this article, let’s see ICICI Prudential Life Insurance Company or ICICI Lombard, which offers a more compelling upside opportunity.

Motilal Oswal a prominent Indian financial services firm, recently identified two high-conviction stocks and assigned them ratings, highlighting their potential upside based on its analysis. In this article, let’s explore ICICI Prudential Life Insurance Company or ICICI Lombard General Insurance Company, which will deliver the highest upside 

ICICI Prudential Life Insurance Company Ltd. is one of the leading Indian private insurers, a joint venture between ICICI Bank Ltd. and the UK’s Prudential Corporation Holdings, offering life insurance, savings, and retirement products through diverse channels like agents, banks, and online platforms, known for customer-centricity, strong digital presence, and significant market share.

With a market capitalization of Rs. 94,088.90 crore, the shares of the company opened at Rs. 653.00 per equity share, rose nearly 0.2 percent from its previous day’s close price of Rs. 652.95. 

The stock is in focus after one of the leading indian brokerage firm, Motilal Oswal, initiated a Buy Target of Rs. 800 on it with an upto 23 percent Upside Potential from the previous day’s close.

The company’s revenue rose by 403 percent from Rs. 4,536 crores in December 2024 to Rs. 22,834 crores in December 2025. Meanwhile, Net profit rose from Rs. 325 crores to Rs. 387 crores during the same period.

Reason for the Target: 

• Sustained VNB Margin Expansion: ICICI Prudential Life continues to demonstrate strong pricing discipline and favorable product mix, with VNB margin expanding to 24.4%, a 320bp YoY improvement and a 90bp beat versus expectations. The rising contribution from protection products and better operating leverage underpin this margin resilience, leading to healthy VNB growth despite modest APE growth.
• Earnings Visibility and Positive Regulatory Outlook: PAT growth of 19% YoY, significantly ahead of estimates, reflects improving profitability and operating efficiency. Additionally, management’s confidence that GST reforms will be value-accretive and VNB-neutral, along with upward revisions to VNB margin assumptions for FY26–28.
• Strong Retail and Protection Growth: APE growth of 4% YoY in 3QFY26 was supported by robust protection, partly driven by GST exemption, 8% YoY growth in ULIP and 5% YoY growth in non-par savings. The 320bp YoY expansion in VNB margin to 24.4% was driven by a higher contribution from the non-linked business at 18.1% (11% in 3QFY25), along with continued growth in retail protection contribution from 6% in 3QFY25 to 8.2% in 3QFY26
• Valuation and view: It has maintained our APE growth estimates for FY26-28. However, we have raised the VNB margin assumption by 50bp/50bp/100bp for FY26/FY27/FY28, considering the 3QFY26 performance BUY rating with a TP of Rs. 800.

ICICI Lombard General Insurance Company Ltd. is India’s largest private-sector non-life insurer, offering a broad portfolio including motor, health, travel, and business insurance, known for its strong distribution, customer focus, and backed by ICICI Bank as a promoter. Established in 2001 as a joint venture, it’s a major player in the Indian insurance market, providing digital and agent-based solutions for comprehensive protection. 

With a market capitalization of Rs. 90,355.02 crore, the shares of the company opened at Rs. 1804.35 per equity share, declined nearly 1.09 percent from its previous day’s close price of Rs. 1824.35. 

The stock is in focus after one of the leading indian brokerage firm, Motilal Oswal, initiated a Reiterate BUY Target of Rs. 2260 on it with an upto 24 percent Upside Potential from the previous day’s close.

The company’s revenue rose by 12.07 percent from Rs. 6,161 crores in December 2024 to Rs. 6,905 crores in December 2025. Meanwhile, Net profit declined from Rs. 724 crores to Rs. 659 crores during the same period.

Reason for the Target:

• NEP Miss and One-Off Impact on Profitability: ICICI Lombard’s NEP grew 13% YoY but missed estimates by 5%, while PAT declined 9% YoY. Combined ratio came in at 104.5% (vs our expectation of 101.6%), compared to 102.7% in 3QFY25. Excluding 1/n and the new wage code impact of  Rs. 0.55b.
• Strong Growth Outlook Despite Margin Pressure: Management expects robust demand in motor and health segments post-GST changes and aims to grow 100–200bp faster than the industry while maintaining 18–20% RoE. Premium estimates are unchanged.
• Strong fresh business growth in motor and health post GST cuts: ICICI Lombard’s 13% YoY NEP growth was driven by strong motor (+10%) and health (+22%) performance post-GST cuts, while marine fell 4% and fire rose 5%. Higher fresh business boosted URR but led to a 5% NEP miss and claims ratio 130bp above estimates, though absolute claims remained largely in line.
• Valuation and view: The retail health segment shows robust growth with market share gains through new customer acquisition, strong distribution, and traction of the “Elevate” product, while ICICI Lombard maintains a leading position despite high competition in motor OD.

However, it has raised the claims ratio for the motor segment, considering the competitive intensity, leading to 4% decline in FY26/27/28 EPS. It has a Reiterate BUY with a TP of Rs. 2,260.

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