Hold ICICI Prudential Life Insurance; target of Rs 625: KR Choksey

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26 Aug, 2025 12:21

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The Gross Written Premium (GWP) for Q3FY25 stood at INR 126,601 Mn, a growth of 23.1% (+13.3% QoQ), primarily led by a 56.2% YoY surge in New Business Premium (NBP). The Value of New Business Margin contracted by 166 bps YoY (-220 bps QoQ) in Q3FY25 to 21.2% (vs. our est. of 23.5%). The movement in VNB margin is primarily on account of the shift in the underlying product mix. The Annualized Equivalent Premium (APE) was INR 24,380 Mn in Q3FY25, a jump of 27.8% YoY (-2.6% QoQ). PAT for Q3FY25 was INR 3,257 Mn, a growth of 43.2% YoY/ 29.4% QoQ. We expect top-line growth to be driven by unit-linked savings products; however, margins are likely to remain under pressure due to their lower profitability relative to non-linked savings and protection products. We revise our VNB margin estimates downward to 23.2% for FY26E and 23.5% for FY27E, reflecting the ongoing pressure from the product mix shift.

Rolling over our valuation to FY27E, we assign a 1.3x P/EV multiple on FY27E EVPS of INR 480.8, resulting in a revised Target Price of INR 625 per share (previously INR 750). Consequently, we maintain our “HOLD” rating on the shares.

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