Q3 FY21 Result Update - ICICI Prudential Life Insurance - YES Securities

(Rating: BUY, TP: Rs 562, Upside 13%)

Our view: ICICI Pru Life Q3 FY21 results were weaker than our forecasts primarily on the back of higher share of ULIPs and a declining share of protection. We have cut our VNB margin assumption for future years by 50bps each but have raised our APE growth estimates. Valuations at FY23E P/EV are attractive when compared with HDFC Life's valuations of 4x.

Product mix: Share of Protection business expected to reach 20% during next 2-3years from current levels of 15%. No change in business philosophy in deferred annuity and guaranteed product, however better investment risk hedge has become more systematic and want to seize the opportunity on the same.

Distribution: 83 new partners added during 9MFY21. Partnered with RBL bank, AU Small finance bank, PhonePay and BSE Ebix during Q3FY21. APE for channels other than ICICI Bank grew by 9%.

VNB: Will like to improve VNB led by growth in Savings and relatively faster growth in Protection. Addition of rider to the basic product to further aid margin trajectory. Have been able to increase attachment compared to start of the year.

Shares of ICICI Prudential Life Insurance Company Ltd was last trading in BSE at Rs.499.35 as compared to the previous close of Rs. 502. The total number of shares traded during the day was 111774 in over 7029 trades.

The stock hit an intraday high of Rs. 506.55 and intraday low of 497.5. The net turnover during the day was Rs. 55973940.

Source : Equity Bulls

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