Buy ICICI Prudential Life Insurance; target of Rs 525: Motilal Oswal
Motilal Oswal is bullish on ICICI Prudential Life Insurance recommended buy rating on the stock with a target price of Rs 525 in its research report dated October 27, 2020.
November 02, 2020 / 12:51 PM IST
Motilal Oswal's research report on ICICI Prudential Life Insurance
ICICI Prudential Life (IPRU) posted a sharp improvement in VNB margins at 27.4% (the highest among the listed insurers). This was aided by the growing mix of the Non-Linked Savings business and improvement in Protection margins – as the entire re-insurance hike was passed on to the customer. APE declined 23% YoY, mainly led by a 45% YoY plunge in ULIP (reported strong trends on a sequential basis). Persistency rate exhibited a mixed trend; it showed marginal improvement in 13th/61st month, but declined in other cohorts. Overall, persistency in the Protection segment improved sharply, while also showing recovery in ULIP (but lower v/s last year’s levels). IPRU is focused on expanding its distribution strength and has added IndusInd as its new banca partner (in the previous quarter, it had tied up with IDFC First Bank), which would aid growth in the medium term. We estimate IPRU to deliver 17% VNB growth over FY20–23E. Margins are expected to improve to ~28%, and operating RoEV would sustain at ~15% by FY23E. Maintain BUY.
We expect operating RoEV to sustain at ~15%. Maintain Buy, with Target Price of INR525 (2.2x Sep’22 EV).
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