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.
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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