ICICI Prulife's APE de-grew by 5.4% YoY but saw improvement in Q2FY19 as protection business (1x growth) saw robust traction while savings saw catch up mainly from non-par and steady ULIP growth. Retail NB saw good recovery of 6% YoY in Q2FY18, while group has been growing strong. Slightly lower share of protection and retail NB being slow VNB margins were flattish sequentially at 17.5% but focus remains to improve the same as company continues on protection and retail. We expect margins to remain flattish as opex benefit to playout next year and protection mix being steady as other segments may likely pick-up. We fine tune our business growth numbers slightly downwards with margins unchanged, and slightly cut EV to factor in negative economic variances.
OutlookRetain BUY with revised TP of Rs507 (from Rs520) based on 2.8x (from 3.0x) Sep-20 EV (rolled from Mar-20) as persistency, lower surrenders yet to play out.
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