Motilal Oswal is bullish on ICICI Prudential Life Insurance has recommended buy rating on the stock with a target price of Rs 430 in its research report dated January 22, 2019.
Motilal Oswal's research report on ICICI Prudential Life Insurance
IPRU Life reported 3QFY19 PAT of INR2.9b (our estimate: INR3.2b). Gross premium growth was restricted to 10% YoY (+15% for 9MFY19) due to a 15% YoY decline in first-year premium. Total APE declined 4.2% YoY in 9MFY19 (-2% YoY in 3QFY19). Savings APE declined ~9% YoY to INR48.8b, while protection APE grew strongly by 100% YoY to INR4.6b, mainly led by group protection. Share of protection in total new business APE improved further to 8.6% (5.7% for 12MFY18, 7.9% in 1HFY18), while that of ULIPs stood at 80.9%.
We lower our NBP margin estimate to reflect slowdown in the business and higher operating expenses due to investment in the protection business. We cut our FY19/20 PAT estimate by ~5%/~2% and project ~12% CAGR in new business APE over FY18-21. We estimate 14% VNB CAGR over FY18-21, while RoEV is expected to sustain at ~15%. We value IPRU at INR430 per share (2.3x Sept-20E EV). Maintain Buy.
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