ICICI Pru Life Insurance - Q2FY21 Result Update - YES Securities

ICICI Pru Life Insurance - Q2FY21 Result Update - YES SecuritiesKey highlights of Q2 FY21 performance

- NBP - NBP was at Rs29bn and remained flat on YoY basis which was better than our forecast of de-growth of 16%. The performance was mainly supported by a sharp jump of 45% in single premium while First year premium registered a de- growth of 32%.

- APE - APE at Rs14.6bn was higher than our estimates of Rs13bn. APE de-grew by 23% yoy and grew by 78% qoq. The de-growth was led mainly on back of 45% decline in ULIP.

- APE Mix - Share of Protection surged 93bps and Non-linked savings business increased by 1829bps which was offset by decline of 1934bps in share of ULIPs.

- VNB & VNB Margin - Q2 FY21 VNB at Rs4bn was higher than our forecasts of Rs3.5bn, while VNB margin at 27.4% was above our estimates of 26.8%. On a yoy basis VNB margins expanded by 631bps.

- Persistency improvement - Sequentially, persistency improved across all time periods expect 13th Month. On a yoy basis only 37th month persistency saw a marginal decline.

- Opex and commission ratios - Cost ratios have improved with commission ratios falling 81bps yoy whereas opex ratio improved by 189bps yoy to 7.5%

- EV - EV improved by 12% to Rs257bn from March 2020. Significant positive economic variance on back of recovery in Equity Market.

- Profits - PAT came at Rs3bn was higher than our expectation of Rs2.8bn.

- Channel Mix - Mix of other channel increased by 657bps on YoY basis. On QoQ basis, share of banca improved by 414bps.

Q2 FY21 result, strong performance on VNB margins, attractively priced at FY22E P/EV of 2x, Retain BUY

We remain positive on ICICI Pru Life, given its strong delivery in terms of VNB margins (highest amongst listed peers). With benefits of base effect (ICICI Bank focusing only on protection, annuities and ULIPs from Jan 2020), APE growth should come back from Q4 FY21. Valuations are attractive at FY22E P/EV of 2x. Reiterate as top pick.

Shares of ICICI Prudential Life Insurance Company Ltd was last trading in BSE at Rs.413.5 as compared to the previous close of Rs. 404.75. The total number of shares traded during the day was 80553 in over 3513 trades.

The stock hit an intraday high of Rs. 414.9 and intraday low of 404.3. The net turnover during the day was Rs. 33070902.

Source : Equity Bulls

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