Shares of ICICI Prudential Life Insurance Company rose 1.07% on July 18 as investors bought shares of the insurance player after it posted broadly in-line Q1FY23 results.
The company posted its June quarter scorecard on July 16 and as the brokerage firm Motilal Oswal Financial Services pointed out, the company posted a 24.7% year-on-year (YoY) growth in new business APE (annualised premium equivalent), led by an all-round growth of 25% and 22% in savings and protection, respectively.
VNB (value of new business) grew 31.6% YoY to ₹470 crore which was in-line. This was primarily driven by a 128bp QoQ improvement in VNB margin to 31% in 1QFY23.
Motilal Oswal maintained a 'buy' call on the stock with a target price of ₹630.
"The company has maintained steady traction in VNB growth, led by a healthy product mix and APE growth. The increase in agent recruitment and the strong pace of adding new partnerships will continue to support premium growth. The idea of approaching customers with a wider product bouquet, through all channels, will further boost premium growth," Motilal Oswal said.
The brokerage firm said it expects the company's VNB margin to improve marginally and expects the company to deliver 18% and 24% CAGR in new business APE and VNB over FY22-24, thus enabling an operating RoEV of 17% in FY24.
Brokerage firm Nirmal Bang has a 'buy' call on the stock of ICICI Prudential Life Insurance Company with a target price of ₹756, implying a 47% upside.
As per the brokerage firm, the overall growth outlook is positive for the stock on the back of sustained traction in non-linked products, especially guaranteed products and revival in retail protection.
However, sustained increases in interest rates pose a competitive threat to guaranteed products, Nirmal Bang added.
Nirmal Bang highlighted that the company reported an all-time high VNB margin of 31%, mainly led by an improved product mix – a higher share of protection and non-linked savings products.
It also underscored that the company's management reiterated that it is on track to achieve ₹2650 crore in VNB by FY23-end. Besides APE growth, certain margin kickers such as improving protection mix and improving persistency could also help. Channel performance, except direct, was strong.
"Going forward, we would watch for revival in retail protection and traction in guaranteed products in light of the rising interest rate environment. Management commentary on IRDA’s engagement with the industry indicates the regulator’s pro-growth stance," Nirmal Bang said.
Emkay Global Financial Services also has a 'buy' rating on the stock with a target price of ₹670. The broekrage firm said it tweaked the estimates after Q1FY23 results and management commentary, leading to a lowering in APE estimates, a minor increase in VNB margins, and a largely unchanged VNB and EV (embedded value).
Among the global brokerage firms, Jefferies maintained a 'buy' call on the stock with a target price of ₹700 while Morgan Stanley maintained an 'overweight' call on the stock with a target price of ₹700, reported CNBC-TV18. Credit Suisse maintained an 'underperform' call on the stock with a target price of ₹440, CNBC-TV18 said.
According to a MintGenie poll, an average of 30 analysts has a ‘strong buy’ call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking firms and not of MintGenie.