10 ICICIPRULI share price target reports by brokerages below. See what is analyst's view on ICICIPRULI share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
The company’s core elements, premium and protection business growth, persistency and productivity improvement, has derived the growth for the company amidst COVID-19 lockdown and will continue to provide growth opportunities in the nearterm. The emphasis on non-linked and protection businesses will improve the financials going forward. We reiterate our BUY rating and value the stock at 2.5x embedded value (EV) with a revised target price of Rs. 512
Considering the impact of Coronavirus pandemic on the economy and market, we now value the company at 2.1x FY22E embedded value, with a revised target price of Rs. 473 and retain our BUY rating, given the upside potential from current price.
VNB growth steady with margin improving to 21.7% 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 pressure with 13th/25th month persistency declining 140bp/50bp YoY, mainly in the ULIP segment. FY20 VNB growth remained steady at 21% YoY led by improvement in asset mix (protection/annuity segment). VNB margins, thus, improved to 21.7% during FY20 (470bp YoY increase). We have cut our EPS estimates by 12%/18% for FY21/FY22E, mainly to factor in the softer business growth. Maintain Buy with revised PT of INR430.
We like IPRU’s re-engineered business model which is focused on a more diversified product mix along with an increased protection share. We expect VNB to grow at FY19-22E CAGR of 2.8%. We however remain wary of the current Covid-19 situation and believe that outlook for FY21E remains hazy. Lower than expected growth in FY21E may delay goal of doubling VNB by FY23E. We rate IPRU a BUY with a TP of Rs 460 (Mar21E EV + 21.1x Mar-22E VNB).
The company’s focus on premium and protection business growth, along with persistency and productivity improvement is expected to drive growth. The emphasis on non-linked businesses will also provide diversification benefits. We reiterate our BUY rating and value the stock at ~2.2x embedded value (EV) with a revised target price of Rs. 588.
We have valued the stock based on 2.9x forward P/EV on premium with a mean of 3.84x over the peers and 48.6x forward P/VNB with a mean of 42.47x over the peers and has arrived at a price target of Rs. 582 with potential upside of 12%. We rate the stock as ‘HOLD’. Upside risk to valuation is revival of big ticket in ulip business and protection segment with faster reach to lower income segment for non-par and downside risk due to faster surrender on policies due to higher ULIP proportion and less than expected sale of newly launched whole life par product
ICICI Prudential Life Insurance Company (IPLI) reported 3QFY20 results with the key pointers being (1) VNB up 24.7% YoY; high growth in protection key margin driver (2) 9MFY20 APE up 1% YoY, impacted by demand compression in the ULIP segment (3) 8MFY20 persistency down across cohorts except 49m. Also, see comprehensive conference call takeaways on page 2 for significant incremental colour. Per se, on the key financial items, IPLI posted NBP growth of 17% YoY at Rs30,381mn, Surplus growth of 19% YoY at Rs3,870mn and PAT growth of 2% YoY at Rs3,025mn. We have revised our estimates for FY20/FY21/FY22 and have retained a Buy rating on IPLI with a revised target price of Rs569 (from Rs565 earlier), valuing the stock at 2.6x H1FY22E P/EV.
IPRU printed a higher than est. 3QFY20 total APE of Rs 20.4bn (3.9/7.3% YoY/QoQ,+5.5% vs. est.). 9MFY19 reported VNBM was steady at 21.0%, leading to a +24.7% YoY VNB of Rs 11.4bn.
The stock trades at 2.5x FY21E P/EV, by far the cheapest amongst the Big Three private life insurers, by dint of its recent market share loss. A ULIP-heavy top line is prone to natural and frequent capital market-linked volatility. However, we believe this is an opportunity rather than an irritant. ULIPs are pass-through on risk and top-line gyrations are, in terms of potential impact on ROEV, high frequency low amplitude noise. I Pru Life’s balance sheet is also protected by its steadfast refusal to join the non- par savings bonanza in current fiscal. While opinions differ on suitability and adequacy of interest rate hedges assumed by its top private competitors, the company’s balance sheet health remains assuredly agnostic to interest rate drop. We maintain BUY/SO.
We estimate IPRU to deliver VNB CAGR of ~21% over FY19-22, led by 12% CAGR in new business APE. The company stands committed in doubling its VNB over next 3-4 years, while operating RoEV is expected to sustain at ~19%. We thus estimate VNB margin to recover to ~23% by FY22 led by an improved protection mix, while operating metrics are expected to improve further. Maintain Buy with a revised TP of INR565 (2.5x Sep’21E EV).
ICICI Pru Life’s APE grew by 4% YoY in Q3FY20 & 1.2% YoY in 9MFY20 with ULIP continuing to see de-growth on volatile market conditions and push to higher margin products especially protection as part of strategy with growth of 66% YoY and retaining share at 14%. Key negative has been 100bps drop in persistency for early cohorts which company is trying to segregate by improving value propositions for the same customers. With VNB growth as core of its strategy to double it in 3-4 years it has been tracking well on mix change and strong control on cost. We expect, growth to track back to mid- teens as company launched new product on non-linked side which are also slightly better margin as well. We retain Accumulate with TP of Rs529 (unchanged) based on 2.4x Sep-21 EV.
The company has registered strong results with robust growth in new business despite the market volatility. The company’s focus on premium growth, while maintaining its solvency levels should be the key for the upcoming few quarters. We value the stock at 2.6x FY21E embedded value (EV) and maintain our BUY recommendation with a revised target price of Rs. 572.
ICICI Prudential Life Insurance Company (IPLI) reported 2QFY20 results with the key pointers being (1) VNB margin expanded 400 bps YTD on account of protection thrust (2) Overall APE growth remains sluggish (-0.4% YoY) amidst changing business strategies (3) 13th month persistency (ex single premium) for 5M-FY20 at 83.6% is 100 bps lower than FY19 delivery. Also, see comprehensive conference call takeaways on page 2 for significant incremental colour. Per se, on the key P&L items, IPLI posted NBP growth of 14% YoY at Rs29,510mn, Surplus growth of 138% YoY at Rs4,768mn and PAT growth of 0.3% YoY at Rs3,019mn. We have revised our estimates for FY20/FY21/FY22 and have retained a Buy rating on IPLI with a revised target price of Rs565 (from Rs501 earlier), valuing the stock at 2.6x H1FY22E P/EV
Although APNT has taken 0.8% price cuts in 1H, Soft crude prices would enable maintain margins. We increase our EPS estimates of FY20-21 by 7.6- 1.2% as we incorporate one-time deferred tax re-measurement and estimate 23% Adj. PAT CAGR over FY19-22 and 15% PAT CAGR over FY20-22. We value the stock at 45xFY22 EPS of 41.2 and arrive at a target price of 1855 (Earlier Rs1640 at 45xJune21 EPS). Retain Accumulate
IPRU has taken a strategic call to move toward balanced product categories and improve granularity in ULIP, which is likely to help reduce volatility in the business. The company is well positioned to capture a greater pie of the protection business, which should drive incremental profitability as it has access to a large customer base from its wide presence in the banca channel. We estimate VNB CAGR of ~29% over FY19-21, while operating RoEV is expected to sustain at ~20%. We thus estimate the VNB margin to recover to ~22% by FY21 while operating metrics improve further. Maintain Buy with an unchanged target of INR475 (2.3x FY21E EV).
Valuations and view: We estimate ~29% CAGR in the VNB over FY19-21E led by 17% CAGR in new business APE while operating RoEV is expected to sustain at ~20%. Thus, we estimate VNB margins to recover to ~22% by FY21E while operating metrics improve further. Despite the stock’s outperformance over recent months, it is still trading at attractive levels of 1.8x FY21E P/EV (LTA of 2.5x), and thus, offers 24% upside to our fair value of INR475/share (2.3x FY21E EV). Maintain Buy.
We have valued the stock based on 1.07x forward P/EV on premium with a mean of 2.28x over the peers and 33.34x forward P/VNB with a mean of 33.34x over the peers and arrived at a price target of Rs.479 with potential upside of 21%. We rate the stock as ‘BUY’. Risk to valuation could be inversion in 10-year government bond yield with loss in market share due to prevailing competition and failure to revive the big ticket ULIP business and shift towards lower ticket and policyholder centric ULIP and non-par products.
We like IPRU’s re-engineered business model which focused on a more diversified product mix and an increasing protection mix. Sharp increase in VNB margin (to 21%) drive up our FY20/21E VNB estimates by 18.8%/16.1% to Rs 18.0/20.2bn. Lower than expected growth and lower protection share remain key risks. While IPRU reported an APE growth of a mere 5.3% YoY, protection share grew to 14.6% (+530bps vs. FY19). This boosted VNBM to an unexpected 21.0% (+400bps vs. FY19) and absolute VNB to Rs 3.1 (+29.9% YoY). We upgrade IPRU to a BUY with a TP of Rs 445 (Jun-20 EV + 19.0x FY21E VNB).
Valuation and outlook: We have revised our NBP estimates by -0.7%/-1.3%, VNB estimates by 6.3%/3.3% and EV estimates by 0.4%/0.7% for FY20/FY21, respectively. We have retained Buy rating on IPLI and revised our target price to Rs455 (from Rs462 earlier), valuing the stock at 2.3x FY21E P/EV.
We expect growth is likely to be lower than industry but retail protection growth should be better but margin sustainability will remain key as saving business improves. We retain BUY with TP of Rs511 (unchanged) based on 2.5x Mar-21 EV and 22x NB multiple.
We estimate ~22% CAGR in VNB over FY19-21E led by 17% CAGR in new business APE while operating RoEV is expected to sustain at ~19%. We thus estimate VNB margins to recover to ~19.6% by FY21E while operating metrics improve further. Despite outperformance over the recent months the stock is still trading at attractive levels of 1.9x FY21E P/EV (LTA of 2.5x) and thus offers 24% upside to our fair value of INR475/share (2.3x Mar-21E EV). Maintain Buy.
Post the recent run up in price, we rate IPRU a NEUTRAL with a TP of Rs 400 (FY20 EV + 19.3x FY21E VNB). FY19 was flat on new business written but VNBM at 17.0% after assumption changes is a tad bit below expectations. We expect growth to return on a more comfortable base. While we like IPRU as it benefits from increasing need of protection, and financialisation of savings, we are cautious due to high share of ULIP in portfolio and volatile equity market conditions. Given growth pangs, and high new business strain we maintain our Neutral. Benign equity markets, higher than expected growth and increased protection share remain a key risk to our call.
We have revised our NBP estimates by 1.2%/1.2%, VNB estimates by 1.6%/1.6% and EV estimates by 3.7%/4.3% for FY20/FY21, respectively. We have retained Buy rating on IPLI and revised our target price to Rs462 (from Rs453 earlier), valuing the stock at 2.4 FY21E P/EV.
ICICI Pru Life’s business improved in Q4FY19 with APE growing by 11% YoY ending the fiscal 2019 with flattish growth. Growth continued to be led protection segment in the credit life and retail, while savings saw improvement as well on back of immediate annuity segment. Within mix of products ULIP mix continued to consolidate as company is focusing on widening the base. VNB margins remained at flattish levels of 17% but new disclosure on VNB indicated protection contribution incrementally is much higher with overall being at 60% of VNB. As we had expected growth impact from the structural changes to be higher and should take some quarters to stabilize and then followed by improved growth, however margin improvement, in our view, will be slower given the cost strain. We retain BUY with revised TP of Rs511 (from Rs471) post roll over based on 2.6x Mar-21EV.
Our Mar-20 price target of Rs. 393 is based on peer mean 30.99x Adjusted P/VNB (Price/Value of New Business) and 2.67x Adjusted P/EV (Price/Embedded Value) as the firm valuation is undervalued as per the peer performance Q-O-Q and was once listed at Rs. 297.65 (or 32.2x FY18 P/VNB and 2.3x FY18 P/EV) on 29th Sept, 2016 and ever since then it has outperformed Nifty by 8.4%. Due to uneven product mix and premium correction on the existing and new product line will affect the firm’s PAT margin adversely before reversal in near future. We initiate coverage on ICICI Prudential Life Insurance (ICICIPRULI) with “BUY” rating for TP of Rs. 393 with potential upside of 15%. Key risks to the call is volatility in the capital markets that may impact the company’s business as IPru Life has ~82% FY18 APE (Annualized Premium Equivalent) under linked segment. Pricing pressure in competitive landscape can affect the VNB margin.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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