Buy ICICI Prudential Life Insurance Company; target of Rs 720: ICICI Securities

ICICI Securities is bullish on ICICI Prudential Life Insurance Company recommended buy rating on the stock with a target price of Rs 720 in its research report dated October 15, 2025.

Broker Research

October 15, 2025 / 13:29 IST

buy

26 Aug, 2025 12:21

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ICICI Securities research report on ICICI Prudential Life Insurance Company

ICICI Prudential (IPRU) saw APE/VNB decline/grow 3.3%/1% in Q2 and dip 4.1%/0.9% in H2FY26. Strong cost execution and product mix lifted margins to 24.5% (up 104bps YoY) in Q2. VNB slipped 0.9% YoY in H1FY26 but increased 1% YoY in Q2FY26. EV grew by 10% YoY in H1FY26, which includes ~1% impact of GST on its back book. While GST could have margin impact in the near term, the company is confident of an imminent benefit from a combination of mitigating factors (commission rationalisation/cost optimisation) and higher volumes. IPRU’s diversified channel mix (agency/direct/ banca/partnership distribution/group APE mix is 25%/14%/30%/13%/18%, as of H1FY26) remains unique vs. peers, and significantly blunts the risks to its business. Yet, its ability to better optimise margins and volume shall be tested, considering the open architecture and fluctuation in products mix.

Outlook

Maintain BUY; TP revised to INR 720 (vs. INR 750), basis 1.7x (earlier 1.75x) FY27E EV We factor in VNB margin of ~24%/24.5% with APE growth of 4%/12% for FY26E/FY27E, resulting in an embedded value (EV) of INR 620bn by FY27E. This translates to operating RoEV of 13%/13.5% in FY26E/FY27E.

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