Buy ICICI Prudential Life Insurance; target of Rs 650: Sharekhan

Sharekhan's research report on ICICI Prudential Life Insurance

ICICI Pru reported ~3% y-o-y growth in new business premium APE (in line with estimates); however, value of new business (VNB) fell by 7% y-o-y (~8% below estimates) resulting in VNB margins at 28% vs. 31.1% y-o-y. APE growth remained weak, led by continued drag from ICICI Bank channel (down 15% yoy) and lower group business. VNB margins were lower due to increased in share of ULIPs and higher commission cost to third-party channels. The company targets to achieve industry-level growth in APE for which the company has been continuously investing. Margins are likely to remain under pressure in the near term impacted by product mix and higher cost.t The stock trades at 1.8x/1.6x its FY2024E/FY2025E EVPS.

Outlook

We maintain our Buy rating with an unchanged PT of Rs. 650 as valuations seem to factor all concerns.