BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Q1 of ICICI Prudential Life Insurance Company business trends were weak due to the Covid-19 led lockdown and subdued buyer sentiment toward capital market linked insurance and investment products. Annual premium equivalent (APE) growth declined 44% YoY led by 66% YoY drop in Unit linked insurance plans (ULIPs) while other segments maintained steady trends. Persistency declined further with 13th/25th month persistency dropping 140 basis points /170 basis points QoQ. However, it is recovering and is above the assumptions incorporated in embedded (EV) calculations.
Q1 FY21 of new business (VNB) declined 35% YoY; however, management has reiterated its intention to double FY19 VNB guidance over the next three to four years. VNB margins improved to 24.4%, led by sharp increase in Protection mix of 26% (verses 15% in FY20). We expect continued buoyancy in the Protection business along with gradual recovery in ULIPs to drive business /VNB growth over the near term while persistency should move in a narrow range. Maintain Buy with revised price target of Rs 510.
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