ICICI Prudential Life Insurance Company Ltd. share price target

Margins of 24.4% in Q1FY21 (v/s expectation of 24.8%) was led by reiterated mix focus towards non-linked savings & protection (benefit of pricing may not sustain current levels. We had downgraded to Reduce in our preview...

APE growth declined 44% YoY led by 66% YoY drop in ULIPs while other segments maintained steady trends. Persistency declined further with 13 140bp/170bp QoQ. However, it is recovering and is above the assumptions incorporated in EV calculations. 1QFY21 VNB declined 35% YoY; however, management has reiterated its intention to double FY19 VNB guidance over the next 3-4 years. We expect continued buoyancy in the Protection business along with gradual recovery in ULIPs to drive business /VNB growth over the near term while persistency should move in a narrow range. 1QFY21 PAT was flat YoY at INR2.9b, supported by strong opex control even as business growth was weak. Renewal premium grew a modest 2.4% YoY as persistency declined slightly. month persistency dropped by 140bp/170bp QoQ; however, it is recovering and is above the assumptions incorporated in the EV calculations. In 1QFY21, total APE declined ~44% YoY led by ULIPs, which plunged 66% YoY.

Valuation and Outlook: We have valued the stock based on 2.7x forward P/EV on discount of 0.8x and44.4x forward P/VNB with at a discount of 0.9x and has arrived at a price targetof Rs.418 with potential upside of 5%.

Valuation and Outlook: We have valued the stock based on 2.7x forward P/EV on discount of 0.8x and 44.4x forward P/VNB with at a discount of 0.9x and has arrived at a price target of Rs.418 with potential upside of 5%.

The stock has corrected significantly over last 6 months (return: -23.4%) and is a value-buy at the current valuation, given its growth potential. We revise our FY21-22E estimates and now value the stock at 2.1x FY22E Embedded Value (EV), with a target price of Rs. 473. Retain BUY. Delay in premiums, ALM mismatch Amidst the ongoing Corona pandemic, the Insurance Regulatory and Development Authority of India (IRDA), recently provided relief to existing life policy holders with an additional grace period of 30 days for premium payments. Life Insurance...

IPRU Life (IPRU) reported weak business trends due to the ongoing lockdown and volatile markets. APE growth declined 20% YoY led by ULIPs while protection business growth was steady. Persistency remained under...

although protection continues to be mainstay with 54% growth in FY20 & 35% in Q4FY20. Positive surprise was on strong NBMs of 21.7% (v/s expectation in margins. In our view, business will take time to move up with only protection growth visible and savings may not recover immediately given capital market conditions, keeping overall pressure on growth. We retain our...

ICICI continued to develop and grow through all its channels, continue to have a balanced channel mix with Bancassurance contributing 53% of overall business during 9M FY20. Growth is well supported by strong performance across channels. For 9M FY20, based on Retail Weighted Received Premium (RWRP), Company had a private market share of 16.6% and overall market share of 9.5%. However, this reduced from 10.8% from 9M FY19, predominantly due to slowdown in the ULIP business (formed 69% of APE in 9M FY20), on account of volatile...

In Q3FY20, gross premium income increased 9.2% YoY, driven by premium income +4.3% YoY and new retail business +16.8% YoY. Value of New business (VNB), surged 24.7% YoY in 9MFY20 on the...

Push in Protection Product Segment and Reduction in Saving Mix is the New Formula to Drive Growth: Value of new Business APE is increased by 60.5 percent in Q3FY20.