Buy ICICI Prudential Life Insurance; target of Rs 665: KR Choksey

KR Choksey is bullish on ICICI Prudential Life Insurance has recommended buy rating on the stock with a target price of Rs 665 in its research report dated July 21, 2023.

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July 21, 2023 / 18:01 IST

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KR Choksey's research report on ICICI Prudential Life Insurance

In Q1FY24, the Gross Written Premium (GWP) de-grew 43.2% QoQ on a high base of Q4FY23 but grew by 1.5% YoY to INR 73,748 Mn. The Annualized Premium Equivalent (APE) for Q1FY24 stood at INR 14,610 Mn, a decline of 3.9% YoY/ 55.7% QoQ. The VNB for Q1FY24 declined by 7.0% YoY/ 58.5% QoQ to INR 4,380 Mn, with VNB margins at 30.0% for the quarter as against 32.0% in Q4FY23 (vs 31.0% in Q1FY23). As of June 30, 2023, the solvency ratio was 203% against the regulatory requirement of 150%. The total assets under management of the company were INR 2,664 bn as of June 30, 2023, a growth of 15.8% YoY/ 6.1% QoQ.

Outlook

We assign a 2.0x P/EV (earlier 1.75x P/EV of FY24E) on FY25E EVPS of INR 332.5 and a VNB multiple of 13.6x to arrive at a weighted average Target Price of INR 665 per share (earlier INR 570) (50:50 weights on the P/EV and appraisal value methodology); indicating a 21.5% upside from the CMP. Accordingly, we re-iterate our “BUY” rating on the shares of ICICI Prudential Life Insurance Ltd.

For all recommendations report, click here