April 23, 2024

KR Choksey’s analysis report on ICICI Prudential Life Insurance coverage

In Q3FY24, the Gross Written Premium (GWP) grew 5.2% YoY however fell by 1.4% QoQ to INR 102,850 Mn. The premium was decrease by 2.4% than our estimates owing to lower-than-expected single premium phase. The Annualized Premium Equal (APE) for Q3FY24 stood at INR 19,070 Mn, a progress of 4.7% YoY (a fall of seven.5% QoQ). The APE was increased by 1.6% than our estimates. In 9MFY24, the APE progress was 1.7% YoY at INR 54,300 Mn. The VNB for Q3FY24 declined by 29.4% YoY/ 24.4% QoQ to INR 4,360 Mn. VNB margins have been 22.9% for the quarter as in opposition to 28.0% in Q2FY24 (vs 33.9% in Q3FY23). The margins have been decrease than our expectations of 29.0% because of important change within the product combine vs our expectation. The margins for 9MFY24 stood at 26.7%, a decline of 529 bps YoY. The full belongings below administration of the corporate have been INR 2,867 Bn as of December 31, 2023, a progress of 13.8% YoY/ 5.4% QoQ (1.2% increased than our expectations). As of December 31, 2023, the solvency ratio was 197.0% in opposition to the regulatory requirement of 150%.

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Outlook

We assign a 1.5x P/EV on FY26E EVPS of INR 368.2 and a VNB a number of of 8.2x to reach at a weighted common Goal Value of INR 545 per share (earlier INR 625) (50:50 weights on the P/EV and appraisal worth methodology); indicating a 12.1% upside from the CMP. Accordingly, we downgrade our ranking from “BUY” to “ACCUMULATE” on the shares of ICICI Prudential Life Insurance coverage Ltd.

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ICICI Prudential Life Insurance coverage – 19012024 – kr