Trendlyne Marketwatch    
05 Aug 2020, 06:01PM
LIVE: Pi Industries hits fresh 52 week high, heavy rains break BSE sign
  • The BSE signnage on top of the Exchange building has broken apart due to heavy rainfall. 

  • Pi Industries hits a fresh year high today on a strong June quarter performance.

  • Markets close flat after a volatile session. Nifty 50 closed at 11101.65 (6.4, 0.1%) , BSE Sensex closed at 37663.33 (-24.6, -0.1%) while the broader Nifty 500 closed at 9088.75 (13.8, 0.2%)

    Market breadth is in the green. Of the 1672 stocks traded today, 1001 were in the positive territory and 589 were negative.

  • Godrej Consumer is lower today after it reported an adjusted profit of 300 crore for Q1FY21, lower than analyst estimates of 315 crore

  • Cadila Healthcare is lower today after the company's Q1FY21 results showed a dip in overall revenues QoQ.

  • Granules India hits another lifetime high today.

  • HDFC Securities is a SELL on Vinati Organics, Axis Direct is a BUY on Relaxo.

  • Pi Industries is up after a strong quarter performance. The agribusiness company recorded a 40%+ rise in revenues and a 38%+ increase in net profits YoY. 

  • Upbeat trading in markets today, as Nifty 50 was trading at 11183.05 (87.8, 0.8%) , BSE Sensex was trading at 38059.09 (371.2, 1.0%) while the broader Nifty 500 was trading at 9151.00 (76.1, 0.8%). Market breadth is overwhelmingly positive. Of the 1464 stocks traded today, 1062 showed gains, and 313 showed losses.

  • The Government of Singapore buys shares in IRB Infrastructure Developers.

  • A day for new CEOs: SBI Cards & Payment Services says that Ashwini Kumar Tewari has taken charge as the company's new Managing Director and CEO. The RBI also approved Sashidhar Jagdishan's appointment as HDFC Bank's new MD and CEO. 

Riding High:

Largecap and midcap gainers today include Hindalco Industries Ltd. (175.75, 8.25%), Tata Steel Ltd. (395.80, 6.33%) and Steel Authority of India (SAIL) Ltd. (36.75, 6.21%).


Largecap and midcap losers today include Vodafone Idea Ltd. (8.30, -4.05%), Godrej Properties Ltd. (903.00, -3.04%) and Alkem Laboratories Ltd. (2847.45, -2.86%).

Movers and Shakers

41 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Gulf Oil Lubricants India Ltd. (680.20, 19.41%), Sunteck Realty Ltd. (224.40, 17.76%) and Strides Pharma Science Ltd. (535.50, 14.29%).

Top high volume losers on BSE were Omaxe Ltd. (71.80, -4.96%), EID Parry (India) Ltd. (293.20, -3.92%) and PNC Infratech Ltd. (128.10, -3.58%).

TCNS Clothing Co. Ltd. (329.50, 0.76%) was trading at 22.3 times of weekly average. Symphony Ltd. (850.00, 1.37%) and Hawkins Cookers Ltd. (4240.00, 2.85%) were trading with volumes 6.2 and 6.2 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

21 stocks hit their 52 week highs,

Stocks touching their year highs included - Balkrishna Industries Ltd. (1333.75, 0.72%), Cadila Healthcare Ltd. (396.05, -1.89%) and Caplin Point Laboratories Ltd. (572.60, 10.55%).

23 stocks climbed above their 200 day SMA including Hindalco Industries Ltd. (175.75, 8.25%) and Jyothy Labs Ltd. (141.50, 7.89%). 7 stocks slipped below their 200 SMA including Can Fin Homes Ltd. (369.65, -2.66%) and Trent Ltd. (548.60, -2.12%).

Strides Pharma Science Ltd.    
05 Aug 2020, 05:36PM
Earnings Call Transcript - Q1FY21 for Strides Pharma Science

Conference Call with Strides Pharma Management and Analysts on Q1FY21 Performance and Outlook. Listen to the full earnings transcript.

Inox Leisure Ltd.    
05 Aug 2020, 04:59PM
Earnings Call Transcript - Q1FY21 for Inox Leisure

Conference Call with Inox Leisure Management and Analysts on Q1FY21 Performance and Outlook. Listen to the full earnings transcript

Dixon Technologies (India) Ltd.    
04 Aug 2020, 08:19PM
Earnings Call Transcript - Q1FY21 for Dixon Technologies

Conference Call with Dixon Tech Management and Analysts on Q1FY21 Performance and Outlook. Listen to the full earnings transcript

Earnings Call Transcript - Q1FY21 for Deepak Fertilisers and Petrochemicals

Conference Call with Deepak Fertilisers Management and Analysts on Q1FY21 Performance and Outlook. Listen to the full earnings transcript

Godrej Consumer Products Ltd.    
04 Aug 2020, 06:30PM
Earnings Call Transcript - Q1FY21 for Godrej Consumer Products

Conference Call with Godrej Consumer Management and Analysts on Q1FY21 Performance and Outlook. Listen to the full earnings transcript.

Eris Lifesciences Ltd.    
04 Aug 2020, 04:26PM
Earnings Call Transcript - Q1FY21 for Eris Lifesciences

Conference Call with Eris Life sciences Management and Analysts on Q1FY21 Performance and Outlook. Listen to the full earnings transcript

Lockdowns impact segment growth, but ICICI Lombard delivers Q1 net profit

by Suhani Adilabadkar

In India, general insurance is not a product that has caught on, so far: we buy things, and we trust in fate that everything will be all right. Consequently, non-life insurance penetration in India is at a low 0.97% of GDP compared to the global average of 2.8%.

One may think that events like Covid-19 help people recognize that risk is an unfaltering variable for everyone, and that luck is not enough; insurance is necessary for a second chance. But people’s perception of risk is deep-rooted in culture, and one pandemic, however severe, may not be enough to change it. Nonetheless, insurance companies are doing better than expected in the current scenario.

 ICICI Lombard General Insurance is the largest private-sector non-life insurer in India, based on gross direct premium income in fiscal 2020. The company offers a comprehensive and well-diversified range of products, including fire, motor, health, travel and personal accident, marine, engineering and liability insurance, through multiple distribution channels.

ICICI Lombard has issued 26.2 million policies, covered 40.9 million lives and its gross direct premium income (GDPI) stood at Rs. 133 bn, translating into a market share of 7% among all non-life insurers and 14.6% among multi-line private-sector non-life insurers as on 31st March 2020.  

Quick Takes

  • Combined ratio improved to 99.7% and solvency ratio stood at 2.5x in June quarter FY21.
  • Lower claims due to lockdown and reduced tax expenditure led to higher PAT of Rs. 398 crore in Q1 FY21 rising 28% YoY.
  • Motor segment shrank 22% YoY impacted by lockdown, temporary shutdown of OEMs and decline in new vehicle sales
  • The company issues 96.5% of its policies in paperless form and aims to become a 100% digital company in the near future.
  • ICICI Lombard settled 100% motor claims during lockdown through ‘InstaSpect’, virtual inspection tool.
  • 40,000 insurance policies during lockdown through robotic process automation (RPA) during lockdown.

June Quarter FY21 Saw Lower Claims and Taxes

ICICI Lombard reported better than expected results, with an improved combined ratio and solvency ratio in the quarter ended June FY21 although its GDPI declined 5% YoY.  GDPI stood at Rs.3,302 crore in Q1 FY2021 as compared to Rs.3487 crore in the June quarter of FY20 impacted by decline in health, travel and motor GDPI.

Combined ratio (should be lower than 100), a profitability measure for the insurer, improved to 99.7% in Q1 FY21 compared to 100.4% in Q1 FY20. Operating profit stood at Rs. 531 crore in Q1 FY21 against Rs. 475 crore in June quarter FY20 rising 11.7% YoY.

Lower claims due to lockdown and reduced tax expenditure led to higher PAT of Rs. 398 crore in Q1 FY21 against Rs. 310 crore same period last year rising 28% YoY. Consequently, solvency ratio improved to 2.5x in June quarter FY21 compared to Rs. 2.2x corresponding June quarter previous year.

Speaking optimistically about industry trends over the past few weeks, Bhargav Dasgupta, the CEO of ICICI Lombard said, “We have been witnessing signs of green shoots across sectors. As more and more industries are adapting to digitization and restarting their operations, business activity should continue to grow. The non-life insurance industry which witnessed a blip in the Q1 of FY2021 should register a growth in the coming quarters we believe”.

Riding the Lockdown

It’s a changing, quieter world out there: people are shunning hospitals, schools and colleges are locked, playgrounds are empty and work from home is the new normal.

Though the backdrop is sombre, there are both challenges and opportunities in light of the big shift in how the world economy is functioning. Higher consumption of packaged food, lower amount of physical activity, higher dependence on own transport, lower travel spending, health anxiety and financial uncertainty has impacted individuals, families and workplaces.

Though insurance companies have responded rapidly, they have been hit hard overall by lower volumes, reduced new premiums and increased operational expenditure. The general insurance industry in India reported de-growth of 4.2% YOY in Q1 FY2021 with the industry GDPI moving down to Rs.393 bn in Q1 FY2021 from Rs.410.72 billion same period previous year. Though there are tough times ahead, there are resilient players like ICICI Lombard steering themselves through these waters.

ICICI Lombard has a product portfolio consisting of motor own damage and motor third party contributing 35% of GDPI, health, travel & personal accident 24% and property & casualty insurance comprising fire, marine, engineering and liability contributing roughly 35-40% in june quarter FY21.

Motor segment de-grew 22% YoY impacted by lockdown, temporary shutdown of OEMs and decline in new vehicle sales and in this respect Mr. Dasgupta said, “April, the frequency was very, very low for obvious reasons. And every month we have seen significant increase in the frequencies. June month, at this point in time would still be maybe 15-20% frequency lower than pre-COVID on the motor OD side. But it is a rapid increase from what we saw in April”. The auto industry witnessed a roughly 200% jump in sales of commercial vehicles and passenger cars in month of June from May 2020.

Next in line, in health insurance, group employer-employee policies make up roughly 70% of total segment GDPI followed by 20% individual, reported de-growth of 12% as bancassurance which is about 68% of health witnessed slow down while 32% of health business is garnered from direct one-to-one sales.

Management however, says that health insurance is gaining from heightened awareness and concern around Covid-19 and strong government measures (standardized Corona Kavach policy). Furthermore, health insurance is expected to do well as the Covid-19 pandemic could be a trigger factor leading to significant increase in health products penetration in the near future.

Currently, roughly, 25-30% of Indian population is covered under health insurance, indicating a strong growth landscape. And as a Covid vaccine is expected in 2021, high medical expenditure is propelling customers especially millennials towards health insurance.

Coming to property & casualty (P&C) insurance, the fire segment continues to witness robust growth due to the rate hike (since January 2020) while marine and engineering lines saw a decline due to the slowdown in economic activity. P&C segment has grown 20% YoY in Q1 FY21.

Green shoots are visible as the un-locking process is moving on, with double digit tractor sales, rise in electricity consumption, FASTag toll collections rising to March levels, rising fuel demand and throughput at state owned refineries (Hindustan Petroleum, Indian Oil and Bharat Petroleum) which have gone up from a low of 50% in the month of April to more than 80% in June.

In the post Covid scenario with growth returning, ICICI Lombard is among the few Indian firms focusing on AI (artificial intelligence), ML (machine learning), IOT (internet of things) and RPA (robotic process automation) for growth. For instance, AI helps in fast-tracking whether a claim is admissible under policy conditions, IOT helps in smooth marine transit and ML helps in deciding whether amount requested for sanction is within policy terms and conditions.

Currently, the company issues 96.5% of its policies in paperless form.  Multiple digital solutions are driving growth such as 100% motor claims during lockdown were settled through ‘InstaSpect’, a virtual inspection tool, tele-consult feature on its mobile app, ‘IL Take Care’ witnessed 50% jump in lockdown, 31% health claims were authorized through AI and issuing 40,000 insurance policies during lockdown through RPA. The company aims to become a 100% digital company with 50% of its workforce enabled through WFH. Covid-19 is only likely to accelerate these digital trends for the Indian insurance sector.

    Number of FIIs/FPIs holding stock rose by 73 to 703 in Jun 2020 qtr.
    Capri Global Capital Ltd.    
    04 Aug 2020, 12:05PM
    Earnings Call Transcript - Q1FY21 for Capri Global

    Conference Call with Capri Global Capital (CGCL) Management and Analysts on Q1FY21 Performance and Outlook. Listen to the full earnings transcript.

    Solar Industries India Ltd.    
    04 Aug 2020, 11:38AM
    Earnings Call Transcript - Q4FY20 for Solar Industries

    Conference Call with Solar Industries Management and Analysts on Q4FY20 Performance and Outlook. Listen to the full earnings transcript.