50% Potential Upside Likely On This ICICI Group Stock, Says Yes Securities

Broking firm Yes Securities has a "buy" call on the stocks of ICICI Prudential and believes the stock can gain at least 50% from the current levels. The recommended target price on the stock according to Yes Securities is Rs 675, as against the current market price of Rs 444.

According to Yes Securities, ICICI Prudential has delivered on APE growth without really drawing materially from pre-buying before tax rule changes kick in: As such, the healthy growth in 4Q is not attributable to pre-buying of large-ticket policies, on which the tax benefit expired on 31st March 2023.

"The pre-buying / incremental sales in February and March are not material. The overall
APE growth for the company has been 26.5% YoY in 4Q compared with 4.2% in 9M. This has been driven by an APE growth of 42.9% YoY, excluding ICICI Bank channel, compared with 19.9% in 9M. Thus, the impact of de-growth in ICICI Bank channel has been more than mitigated by the other channels," the brokerage has said.

Retail business delivers healthy growth
According to Yes Securities, the Retail Protection business has delivered healthy YoY growth and, sequentially, pure term has outperformed ROP: The retail protection APE has grown 27.7% in 4Q compared with a -29.3% YoY de-growth in 9M. Management stated that they are focused on the revival of retail protection.

"While FY22 had seen a slowdown in retail protection, the company had invested in distribution and re-training. The ROP product had been introduced and as such, the company had started to additionally focus on lower sum assured segments such as the Rs 5-10mn ra nge. We maintain 'Buy' rating on IPRU with a revised price target of Rs 675: We value ICICI Prudential at 2.3x FY24 P/EV for an FY24E/25E RoEV profile of 17.7%/18.0%," Yes Securities has said.

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