Motilal Oswal's research report on ICICI Prudential Life Insurance
ICICI Prudential Life Insurance (IPRU) reported a 3.2% YoY growth in APE (in line) to INR20.6b in 2QFY24. The protection segment grew 2.6% YoY while the annuity segment declined 6.7% YoY during the quarter. VNB declined 7% YoY to INR5.8b (8% miss) due to moderation in margins. VNB margin for the quarter stood at 28.0% (a 200bp QoQ decline) vs. MOSLe of 30.4%. For 1HFY24, APE stood at INR35.2b and VNB was at INR10.1b with a VNB margin of 28.8%. Considering IPRU’s 1HFY24 performance, we have cut the APE/VNB margin for FY24 and FY25.
Outlook
We expect IPRU to deliver a 16% CAGR in VNB over FY23- 25. This will be fueled by a combination of premium growth and a slight improvement in margins, thereby enabling an operating RoEV of ~18% over FY23-25E. Reiterate BUY with a TP of INR600 (based on 1.7x Mar’25E EV).
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