Buy ICICI Prudential Life Insurance; target of Rs 475: Motilal Oswal
Motilal Oswal’s research report on ICICI Prudential Life Insurance
The trajectory in new business premium at ICICI Prudential Life (IPRU Life) seems to be stabilizing as the company reported ~5.3% YoY APE growth in 1QFY20 as against flattish growth in FY19. Higher new business strain driven by rising mix of the protection business and associated advertisement & marketing cost impacted earnings growth in FY19. We estimate earnings growth to turn positive at 9% CAGR over FY19-21 led by (a) Protection business continuing to grow at a robust pace, thus driving margins, (b) improved operating leverage aided by increasing use of technology, and, (c) recovery in the core savings business.
We estimate IPRU to report ~22% CAGR in VNB over FY19-21E led by 17% CAGR in new business APE while operating RoEV is expected to sustain at ~19%. Maintain BUY with PT of INR475/share (2.3x Mar-21E EV).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.