Motilal Oswal Assigns Buy On Large Cap ICICI Group Stock, Sees 24% Gains, Board Recommends Dividend

Motilal Oswal has a "Buy" on ICICI Prudential Life Insurance Company Ltd. (IPRU) with a target price of Rs 550 apiece. Considering the given target price, the stock could fetch potential gains of up to 24% from the current level. On April 20, 2023, the board of directors of the company held a meeting where the company recommended Rs 0.60/share dividend. IPRU is a large-cap ICICI Group stock engaged in the life insurance sector. It has a market capitalisation of Rs 63,886.96 crore.

Stock's Current Market Price and Returns

The stock last traded at Rs 444.10 apiece, down 2.55% from its previous close. It hit the 52 week high on 2 September 2022 at Rs 608.75 apiece, and 52 week low on 16 March 2023 at Rs 380.70 apiece, respectively.

The stock gains 0.27% in 1 week, and 6.78% in 1 month, respectively. It has fallen 16.61% in 1 year. It gains 19.9% in 3 years and 18.71% in 5 years, respectively.

Recommended Rs 0.60/share dividend

The board of directors in its exchange filing on April 20, 2023, said, "Recommendation of final dividend of ₹ 0.60 per equity share of face value of ₹ 10 each, to the members of the Company which shall be subject to their approval at the ensuing Annual General Meeting. Please note that the final dividend shall be paid to the eligible members within 30 days from the declaration at the ensuing Annual General Meeting of the Company."

Valuation and view

According to the brokerage, IPRU has maintained healthy traction in VNB growth by achieving its stated guidance, led by improving product mix in favor of higher-margin products, which resulted in a robust margin of 32%. The share of banca (excluding ICICI Bank) increased to 16% from 4% in FY19, thus supporting growth and diversification in the distribution mix. The increase in agent recruitments and the strong pace of new partnership additions should boost premium growth. Further, the strategy of approaching customers with a wider product bouquet through all channels will also boost premium growth. Persistency too saw an improvement across cohorts. "We estimate IPRU to deliver a 17% CAGR in VNB over FY23-25. This will be fueled by a combination of premium growth and slight improvement in margins, leading to operating RoEV of ~18% over FY23-25E. Retain BUY with a TP of INR550 (based on 1.7x Sep'24E EV)," the brokerage has said.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.