Sharekhan Maintains Buy Call On Two Large Cap ICICI Group Stocks, Sees Up To 18% Upside

Renowned broking firm Sharekhan has picked two large-cap stocks of ICICI Group, namely ICICI Prudential Life Insurance Company Ltd. (IPRU) and ICICI Lombard General Insurance Company Ltd. with a Buy rating. Both the stocks are from the insurance sector, operating Life Insurance and General Insurance industries. Check below to know more:

ICICI Prudential Life Insurance Company Ltd. (IPRU)

The broking firm Sharekhan maintains a Buy on ICICI Prudential Life Insurance Company Ltd. (IPRU) with a positive outlook, and assigns a Target Price of Rs 650 on the stock, claiming an 18% upside from the current market price. IPRU is ICICI Group's Large cap insurance sector company focused on life insurance. The market cap of IPRU is Rs 79,254.05 Crore.

According to Sharekhan, Value of new business (VNB) fell 7% y-o-y, while VNB margins dipped 100 bps y-o-y to 30%. APE declined by 4% y-o-y. Despite strong growth in retail protection and stable non-linked savings share, VNB margins were lower due to a change in product mix towards par and ULIP products.

ICICI Bank channel continued to drag growth. Overall, ICICI Bank's contribution declined to 13% in the APE mix versus a peak of 59% in FY2019. Agency/partnership channel grew at a slower pace 5%/7% y-o-y, while direct channel reported strong growth of 28.5% y-o-y. "Stock trades at 2.0x/1.7x its FY2024E/FY2025E EVPS. We maintain a Buy rating and raise PT to Rs. 650," the brokerage has said.

On Friday, the stock of IPRU last traded on BSE is Rs 550.80, up 0.55% from the previous close of Rs 547.80 apiece. It traded intraday high and low of Rs 554.45 and Rs 545.05, respectively. The stock traded its 52-week high at Rs 615.55 apiece and 52-week low at Rs 380.95 apiece on BSE, respectively.
In the past 1 1 and 2 weeks, the stock of IPRU has fallen 6.26% and 3.78%, respectively. While in the past 1 month, it gained 24.03%. It gained 3.87% in 1 year and falls 8.94% in 2 years. It gained 24.25% in 3 years and 54.89% in 5 years, respectively.

ICICI Lombard General Insurance Company Ltd.

The brokerage firm maintains a Buy on ICICI Lombard with a target price of Rs 1,540 apiece, claiming 10% upside from its current market price. ICICI Lombard is ICICI group's General insurance company, having a market cap of Rs 69,229.89 Crore.

According to Shaekhan, ICICI Lombard reported a PAT of Rs. 390 crore (up 12% y-o-y/ down 11% q-o-q) mainly driven by higher investment income (up 22% y-o-y/ 2% q-o-q). Though net written premium grew strongly by 23% y-o-y, net earned premium grew by just 12% y-o-y due to higher unexpired risk reserves.

Combined ratio was higher at 103.8% versus expectation of 102.5% as it included the impact of Cyclone which increased the loss ratio by 90 bps which led to higher underwriting loss at Rs. 320 crore versus Rs. 251 crore q-o-q and Rs. 193 crore y-o-y. "Stock currently trades at 32.6x/ 28.7x its FY2024E/ FY2025 EPS. We maintain a Buy rating with a revised PT of Rs. 1540," the brokerage has said.

On Friday, the stock of ICICI Lombard last traded on BSE at Rs 1409.40 apiece, records a new 52-week high at Rs 1422.85 apiece. While its 52-week low is Rs 1049.10 apiece. The stock surged 2.49% in 1 week. It surged 33.04% in 3 months and 22.39% in 5 months, respectively. It gained 15.03% in 1 year, while declined 4.63% in 2 years. It gained 570% in 3 years, and 81.28% in 5 years, respectively.

Disclaimer - The stocks have been picked from the brokerage reports of Sharekhan. 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.