Buy ICICI Prudential Life Insurance; target of Rs 569: Dolat Capital

Dolat Capital is bullish on ICICI Prudential Life Insurance has recommended buy rating on the stock with a target price of Rs 569 in its research report dated July 22, 2020.

July 23, 2020 / 07:13 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Dolat Capital's research report on ICICI Prudential Life Insurance


IPRU reported better than expected APE at Rs. 8.2bn (-44% YoY) with protection APE in-line with estimates at Rs. 2.1bn, flat on a YoY basis. Within the Protection business, Credit Protect APE declined ~72% on account of muted credit growth and lower disbursements whereas the retail protection business saw a substantial increase. ULIP continues to face headwinds both in growth and persistency declining ~67% APE YoY driven by market outlook. Overall 13th month persistency (ex-single premium) declined 1.4% sequentially and is currently below the VNB assumption of 82.5%. IRDA’s moratorium on premium payment makes this number looker weaker. Product mix changed significantly towards more profitable segments of protection and non-linked savings with ULIP mix declining 44% overall vs 71% in Q1FY20. Mix change was the main driver for VNB margin expansion of 3.4% YoY / 0.6% QoQ to 24.4%, however, this was lower than expected as the inability to pass on reinsurance price hike in the quarter led to suboptimal protection margins. Despite a weaker performance in growth relative to peers, we expect IPRU to continue to deliver in the individual protection segment where it is heavily backed by ICICI bank and a strong agency channel.


Outlook


We initiate on IPRU with a BUY at a target price of Rs. 569 implying a FY21 P/EV of 3.2x and RoEV of 13%.


Read More



For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Jul 23, 2020 07:13 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark