Buy ICICI Prudential Life Insurance; target of Rs 475: Motilal Oswal
Motilal Oswal is bullish on ICICI Prudential Life Insurance has recommended buy rating on the stock with a target price of Rs 475 in its research report dated July 15, 2019.
July 16, 2019 / 04:02 PM IST
Motilal Oswal's research report on ICICI Prudential Life Insurance
The trajectory in new business premium at ICICI Prudential Life (IPRU Life) seems to be stabilizing as the company reported ~5.3% YoY APE growth in 1QFY20 as against flattish growth in FY19. Higher new business strain driven by rising mix of the protection business and associated advertisement & marketing cost impacted earnings growth in FY19. We estimate earnings growth to turn positive at 9% CAGR over FY19-21 led by (a) Protection business continuing to grow at a robust pace, thus driving margins, (b) improved operating leverage aided by increasing use of technology, and, (c) recovery in the core savings business.
We estimate IPRU to report ~22% CAGR in VNB over FY19-21E led by 17% CAGR in new business APE while operating RoEV is expected to sustain at ~19%. Maintain BUY with PT of INR475/share (2.3x Mar-21E EV).
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