ICICI Pru Life up 2% after Emkay maintains buy call, sees 15% upside

IPRU seems to have started stabilizing its premium growth, supported by smaller ticket-size ULIPs and a larger share of the higher-margin protection segment, Emkay said.

ICICI Prudential Life Insurance Company shares gained 2 percent intraday on June 7 after Emkay maintained buy call on the stock with a revised target price of Rs 435, implying 15 percent potential upside.


IPRU management targets absolute value of new business (VNB) growth of 19-25 percent over the next 3-4 years.

"We have built-in 11.8 percent VNB growth CAGR over FY19-21E. Its strategy largely remains the same with a greater focus on the protection segment," Emkay said.

The brokerage further said IPRU has not factored in savings persistency variance in its assumptions and has kept it unchanged at 82.5 percent in its forecast viz-a-viz the current prevailing 13-month persistency of greater than 86 percent (excluding single premium), leading to a positive operating variance.

IPRU is not looking to raise capital over the next three years (solvency ratio currently at 214.9 percent). It has a soft internal target of 200 percent (regulatory requirement of 150 percent) where it will start looking for alternative ways of generating internal accruals (cut dividends).

IPRU seems to have started stabilizing its premium growth, supported by smaller ticket-size ULIPs and a larger share of the higher-margin protection segment, Emkay said.

At 1346 hours, the stock was quoting at Rs 385.00, up to Rs 6.15, or 1.62 percent on the BSE.

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