Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

ICICI Prudential Life Insurance - VNB trajectory in-line despite YoY dip in protection in Q2 - ICICI Securities

Posted On: 2020-10-29 05:44:12


Despite the challenging times, ICICI Prudential Life Insurance (IPRU) has been successful in clocking Rs4bn absolute VNB in Q2FY21 (flat YoY) driven by increase in non-linked savings (45% growth YoY in Q2FY21). However, protection APE declined by ~10% YoY in Q2FY21 (flat credit life, ~15-20% dip in retail protection). Our expected FY22E VNB of Rs18bn factors-in growth in protection (~15% CAGR between FY20-FY22E) and recovering savings growth on an already weak base of FY20 (expect a dip in FY21E and recovery in FY22E to register ~4% decline in FY22E savings APE over FY20). Protection margin can stabilise while savings margin can improve with growth in non-linked savings. Maintain BUY with a revised target price of Rs475 (earlier Rs451) implying 2.2x FY22E EV of Rs310bn. Our VNB / VNB margin estimates stand at Rs14.5 / 24.1% and Rs18.3 / 25.4% for FY21E / FY22E respectively.

- Absolute VNB at Rs4bn in Q2FY21 has reached the same run rate as FY20 (Rs16bn) driven by higher margins (27% in Q2FY21). QoQ, there has been 95% growth in ULIP APE whereas non-linked savings have grown 45% YoY to Rs4.4bn in Q2FY21. However, protection APE has declined 10% YoY to Rs4.5bn in H1FY21. Individual protection declined ~15-20% whereas credit protect has restored to similar level YoY. Margin was also aided by impact of protection price hikes in Q2FY21.

- Levers of growth include bancassurance tie-ups, which too will incrementally improve non-linked savings mix and revival in ULIPs. IPRU has made tie-ups with IDFC First Bank, Yes Bank, NSDL Payments Bank and Indusind Bank in the past four months. This will aid volume growth, especially in the non-linked savings mix as ICICI Bank continues to abstain from traditional savings products. However, there are competing players like HDFC Life, Tata AIA, Max Life in the said banks.

- Persistency has shown QoQ improvement but remains lower YoY, yet is within assumptions. Excluding single premium, 13/25/37/49/61-month persistency for 5MFY21 came in at 82.1/73/65.2/63.8/57.5 vs 2MFY21 of 81.8/73.4/65.4/63.9/ 56.8 vs 11FY20 of 83.2/75.1/66.7/64.6/56.

- Could H1FY21 be a peak for VNB margin? With increased competition and majority pricing actions already played out in H1FY21, protection could have seen a peak Q1FY21. Sequential weaker performance in protection has been an industry-wide phenomenon. As such, IPRU will depend on revival of savings volumes going ahead.

- Maintain BUY. We factor in -15%/+20% growth in FY21E/FY22E APE with VNB margin remaining at 24%/25.4% for the two years respectively. Factoring-in unwind at 7.5%, we arrive at EV of Rs310bn/352bn for FY21E/FY22E. There has been Rs12bn total variance in H1FY21 (impact of market recovery from Covid). We ascribe a multiple of 20x to FY22E VNB of Rs18.3bn (VNB can decline in FY21) to arrive at a target price of Rs475 (implied FY22E P/EV of 2.2).

Shares of ICICI Prudential Life Insurance Company Ltd was last trading in BSE at Rs.408.7 as compared to the previous close of Rs. 408.55. The total number of shares traded during the day was 17898 in over 1010 trades.

The stock hit an intraday high of Rs. 409.5 and intraday low of 403.85. The net turnover during the day was Rs. 7281003.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com



Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Motherson Sumi Systems - Company Update - Virtual Investor Conference - ICICI Direct

Mutual Fund Review - November, 2020 - ICICI Direct

Sadbhav Engineering - Q2FY21 Company Update - ICICI Direct

IRB Infrastructure - Q2FY21 Company Update - ICICI Direct

Vodafone Idea fund raising - Angel Broking

Rupee - Nov 23, 2020 - Reliance Securities

Crude Oil - Nov 23, 2020 - Reliance Securities

Q2FY21 Bank Result Quick Review - Angel Broking

Banks & NBFC's Sector Update Report - Yet another watershed moment? - HDFC Securities

Galaxy Surfactants - EBITDA/kg has an upside risk - ICICI Securities

Diagnostics - COVID-19 tests continue to trend higher - ICICI Securities

Banking & Financial Services - Sector Update - Nov 22, 2020 - ICICI Direct

Dalmia Bharat Sugar - Q2FY21 Company Update - ICICI Direct

Balkrishna Industries - Industry export growth momentum continues - ICICI Securities

Covid Recovery Pulse - Festive positivity continues in auto retails, E-way bill generation improves... - ICICI Direct

Quant Pick - Exide Industries - ICICI Direct

Shankara Building Products - Q2FY21 Company Update - ICICI Direct

Triveni Engineering - Q2FY21 Company Update - ICICI Direct

Initiating Coverage on Sudarshan Chemical - Leaping into the league of giants - HDFC Securities

Earnings Wrap Q2FY21: Earnings outperform, post Covid recovery picks up steam - ICICI Direct

Vodafone Idea Positive development beneficial for IDFC first bank - Angel Broking

Lakshmi Vilas Bank - Angel Broking

WIPRO Buyback record date announcement - Angel Broking

TCS buyback record date announcement - Angel Broking

Banks Sector Update - Collection efficiency - a positive surprise! - HDFC Securities

Quant Pick - Max Financial Services - ICICI Direct

Graphite India - Q2FY21 Result Update - ICICI Direct

Gladiator Stocks - Maruti Suzuki India - ICICI Direct

Exide Industries - Q2FY21 Result Update - ICICI Direct

Mishra Dhatu Nigam - Execution outlook remains strong - ICICI Securities

Bharat Electronics - Diversifying into multiple revenue streams - ICICI Securities

Wipro Ltd - Virtual Analyst Meet Update - ICICI Direct

Avadh Sugar & Energy - November 2020 - Company Update - ICICI Direct

Mahindra Lifespace Developers - H1FY21 Company Update - ICICI Direct

Quant Pick - Godrej Consumer Products - ICICI Direct

India Equity Strategy Report - Quarterly flipbook - HDFC Securities

Maintain REDUCE on Jubilant FoodWorks - Recovery continues; priced-in - HDFC Securities

Maintain BUY on Ahluwalia Contracts - Q2FY21 - Significant beat on execution - HDFC Securities

Repco Home Finance Limited - Q2 FY21 Result Update - YES Securities

JK Lakshmi Cement - Target upgrade - Angel Broking

BUY on Petronet LNG - Stellar quarter - HDFC Securities

Maintain BUY on Prestige Estates Projects - Capex cycle to gather pace - HDFC Securities

REDUCE on LIC Housing Finance - Tread with caution - HDFC Securities

SELL on New India Assurance - High claims ratio dents profits - HDFC Securities

New orders for L&T - Angel Broking

Cipla - Multi-G agreement - Angel Broing

REDUCE on Eicher Motors - 'Meteor' to drive sales; valuations remain expensive - HDFC Securities

BUY on Galaxy Surfactants - Highest volumes in a quarter - HDFC Securities

Repco Home Finanance - Q2FY21 Result - Angel Broking

NMDC - A single headwind against investment thesis - II - ICICI Securities



Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019