Motilal Oswal's research report on ICICI Prudential Life Insurance
ICICI Prudential Life Insurance (IPRU) reported a decline in new business APE (-6% YoY; in line) in 3QFY23 hit by weak ULIP growth even as nonlinked savings and protection businesses grew strongly. However, APE rose 4% YoY to INR53.4b in 9MFY23. VNB grew 20% YoY to INR6.2b (10% beat), driven by a 720bp YoY VNB margin expansion to 33.9% in 3QFY23. For 9MFY23, VNB rose 23% YoY to INR17.1b fueled by VNB margin expansion of 490bp to 32.0%.
Outlook
We estimate IPRU to deliver an 18% CAGR in VNB over FY22-25. This will be driven by a combination of premium growth and slight improvement in margins, thereby enabling an operating RoEV of ~16% over FY23-25E. Maintain BUY with a TP of INR570 (premised on 1.8x Sep’24E EV).
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