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    ICICI Prudential Life gains 7% on robust Q1 earnings; CLSA maintains 'buy' rating

    ICICI Prudential Life gains 7% on robust Q1 earnings; CLSA maintains 'buy' rating

    ICICI Prudential Life gains 7% on robust Q1 earnings; CLSA maintains 'buy' rating
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    By Pranati Deva   IST (Published)

    Shares of ICICI Prudential Life Insurance Company (ICICI Pru) rose nearly 7 percent on Thursday after the company reported 27 percent growth (YoY) in value of new business (VNB) in the June quarter (Q1FY20).
    The stock rose as much as 6.7 percent to Rs 408.15 per share on the BSE. At 2:08 PM, the stock was trading 5 percent higher at Rs 402.70 as compared to 0.11 percent (41 points) rise in BSE Sensex at 37,889.
    "Value of new business for Q1FY20 was Rs 309 crore. With an annualised premium equivalent (APE) of Rs 1,470 crore for the quarter, VNB margin was 21 percent for the quarter as compared to 17 percent a year ago. The increase in VNB margin is primarily on account of increase in protection mix," the company said. Assets under management rose 15 percent to Rs 1.64 lakh crore as on June 30, 2019.
    The company posted a net profit of Rs 285 crore in Q1, almost flat growth as compared to Rs 282 crore reported in Q1FY19. Total income rose 5 percent to Rs 8,319 crore against Rs 7,920 crore in the same period a year ago.
    "We believe our customer-centric approach and digitalisation initiatives, coupled with the growing needs of protection, savings, and retirement for the country's young working population will continue to drive growth for us," said NS Kannan, MD and CEO of ICICI Prudential Life.
    According to CLSA, ICICI Prudential Life’s 1QFY20 results were encouraging as the scale-up of protection business led to a 27 percent YoY rise in VNB and margins rising to 21 percent. "Strong growth and high margins compensated for low overall premium growth that was due to weak trends in Ulip and PAR premiums, it added.
    It sees better risk/reward and maintained a 'buy' rating with a rolled-forward target price of Rs 500.
     
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