Target: ₹670

CMP: ₹590

ICICI Prudential Life Insurance Co. Ltd. (IPRU), a joint venture between ICICI Bank and Prudential Corp. Holdings, offers life, health and pension products.

In Q4FY24, net premium income rose 17.1 per cent y-o-y to ₹14,788 crore, driven by robust growth in non-par life insurance, annuity non-par, and linked life. The annualised premium equivalent (APE) grew 9.5 per cent y-o-y in Q4-FY24, underpinned by a strong distribution network and digital support.

Value of New Business (VNB) declined 19.5 per cent y-o-y to ₹2,227 crore in FY24, and the VNB margin weakened to 24.6 per cent from 32 per cent in FY23. In the future, IPRU management aims to maintain the growing absolute VNB margin, as the effect of commission guidelines has already been factored in. A better product mix and strong customer demand should support VNB margin.

IPRU witnessed better business growth as a result of increased premium income and APE in Q4FY24. The company’s continuous focus on strengthening its distribution network, product and process innovation, and digitalisation in business processes, is expected to boost future performance and provide a sustainable outlook on the stock.

Therefore, we retain our BUY rating on the stock, with a target price of ₹670 based on 1.7x FY26E EV

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