Buy ICICI Prudential Life Insurance; target of Rs 700: Motilal Oswal
Motilal Oswal is bullish on ICICI Prudential Life Insurance recommended buy rating on the stock with a target price of Rs 700 in its research report dated dated July 21, 2021.
July 21, 2021 / 10:58 AM IST
Motilal Oswal's research report on ICICI Prudential Life Insurance
IPRU posted ~48% YoY growth in total APE, led by healthy (66%/~164%) trends in the Non-Linked Savings/Annuity business, while linked APE growth bounced back strongly (49%). Growth in the Protection segment was mainly aided by Credit Life/Group term, while Individual Protection saw a decline. Absolute VNB growth was robust (~78% YoY, 15% beat), with VNB margin improving sharply to 29.4% (500bp YoY) v/s 25.1% in FY21. It reported a shareholders' loss of ~INR1.9b on account of higher COVID-related provisions and claims settlement. It settled total gross COVID-19 claims of ~INR11.2b over 1QFY22 (3.2x increase over FY21). It has created provisions of ~INR5b (Mar'21: INR3.3b) towards future COVID-19 claims. We estimate IPRU to deliver ~36% CAGR in VNB over FY21-23E, led by robust premium growth, buoyed by new partnerships and product segments, thus enabling operating RoEV of ~17% over FY21-23E.
We maintain our BUY rating. We estimate IPRU to deliver ~32%/36% CAGR in new business APE/VNB growth over FY21-23E, led by improving margin (29% by FY23E), thus enabling an improvement in operating RoEV to ~17%. We maintain our Buy rating with a TP of INR700/share (2.6x FY23E EV).
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