Target: ₹520
CMP: ₹442.55
ICICI Prudential Life Insurance’s strong Q4-FY23 APE growth of 26 per cent y-o-y was primarily driven by non-linked savings (+104 per cent), partly offset by lower ULIPs (-24 per cent) and muted protection. VNB margins stood strong at 32 pe cent (up 400 bps, flat), driven by product mix.
VNB grew 36 per cent due to high APE growth and y-y margin expansion and IPRU achieved its guidance of doubling VNB over that in FY19. ICICI Prudential Life maintained its positive outlook on APE growth in FY24 exceeding the 12 per cent delivered in FY23 and retained its stance that the new income-tax regime and taxation of maturity proceeds of traditional products, for premiums exceeding 500k, have limited impact on the long-term growth potential of the business.
Valuations at 1.6x FY24E P/EV appear attractive at first glance in the context of what is arguably the safest balance sheet in the sector.
Unfortunately, we do not see ICICIBC’s enthusiasm levels as a growth issue but rather as a determinant of critical scale in the future.
We retain Buy but it remains the lowest in our coverage preference order.