NRI Business Associate
ICICI Prudential Life has been the leader in unit-linked business with a strong focus on high-ticket ULIPs in the past
ICICI Prudential Life (IPRU)
- IPRU reported 25.7% VNB (Value of new business) margin in 3QFY21 driving flat VNB yoy even as APE (Annual premium equivalent) was down 18% yoy.
- We expect a strong capital market to drive ULIPs next year, though VNB margins will likely hold on due to an increase in share of high-margin non-participating in the overall traditional savings mix and improving operating leverage as volumes bounce back.
- IPRU has been the leader in unit-linked business with a strong focus on high-ticket ULIPs in the past; the company has acquired dominant retail term business over the past 2-3 years.
- We expect the company to deliver 18% VNB CAGR (Compounded Annual Growth Rate) during FY21-24E (somewhat lower than 20-21% for other listed peers) and 14-15% medium-term operating RoEV (Return on embedded value).
- A consistent shift to high-margin non-par policies, coupled with a healthy topline will drive superior VNB and boost RoEV, closing the gap with peers. We are valuing IPRU on Appraisal value based fair value & at 2.3X EV (Embedded Value).
ICICI Prudential Life (IPRU): BUY
Dated: 5 th April 2021
CMP: Rs.444
Fair Value: Rs.560
Potential Upside: 26.1%
Market Cap: Rs.63,900 Cr
Time Frame: 12 months
Note:
The above is a brief note on the company, based on the inputs of a KIE research report dated 28th January 2021, which is available on their website at:
https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental
.
Disclaimer: http://bit.ly/2n5AxIE
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Authorised Person
Lakshit Financial is Authorized Person of Kotak Securities Limited in cash segments of BSE & NSE and NSE F&O segments with NSE. Lakshit Financial registration number: BSE CASH AP0106730124228 | NSE CASH AP029177621 | NSE F&O AP029177621. Lakshit Financial Registered Office: ASM 7, Ashwin Sector, Mumbai Agra Highway, CIDCO, Nasik 422009, Maharashtra, India. Kotak Securities Limited. Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. CIN: U99999MH1994PLC134051. Correspondence Address: Infinity IT Park, Bldg. No 21, Opp. Film City Road, A K Vaidya Marg, Malad (East), Mumbai 400097. SEBI Registration No. INZ000200137 (Member of NSE, BSE, MSE, MCX & NCDEX). Member Id: NSE-08081; BSE-673; MSE-1024; MCX-56285; NCDEX-1262. AMFI ARN 0164, PMS INP000000258 and Research Analyst INH000000586. NSDL/CDSL: IN-DP-NSDL-23-97.
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