Yes Securities Initiates Buy On ICICI Group Stock, See 36% Strong Return

ICICI Group's Large cap insurance sector firm ICICI Prudential Life Insurance Company Ltd. (IPRU) gets a Buy from renowned broking firm Yes Securities. The brokerage initiates coverage on IPRU with a positive outlook, maintains a 'Buy' rating with a revised price target of Rs 745 per share. The market cap of IPU is Rs 78,821.62 Crore.

Management commentary around VNB margin sounded cautious both tactically and strategically: Management stated that IPRU is already in the top decile as far as VNB margin is concerned and from here on, VNB growth will be driven by APE growth and not margin expansion, as such. The sequential decline in margin played out despite strong traction for high-margin retail protection since there were offsetting factors. Some of the large-ticket high-margin guaranteed business has shifted to lower margin Par and linked business.

Protection is a growth area for the company and distribution has become increasingly less dependent on ICICI Bank: There has been strong growth in retail protection, where the growth was 61.8% YoY, driving positive growth for overall protection to 4.2% YoY. Management stated that the traction seen in group protection in recent years is structural in nature. Excluding ICICI Bank, overall APE growth was a positive 3.7% YoY compared with a negative -3.9% YoY including ICICI Bank. ICICI Bank has de-grown 34.6% YoY and contributed 13.5% to total APE. Banca ex ICICI was flattish, lower by 0.4% YoY. However, there has been strong growth in non-ICICI Bank bancassurance partners in May and June 2023 during which the said growth was 20.2% and 21.2% YoY.

We maintain 'Buy' rating on IPRU with a revised price target of Rs 745: We value IPRU at 2.2x FY25 P/EV for an FY24E/25E/26E RoEV profile of 17.4%/17.7%/17.9%.

Stock Outlook

The last traded share price of IPRU on BSE is Rs 547.80, down 2.06% or Rs 11.50 from the previous close. On Thursday, the shares declined 2.06% with an intraday high and low of 564.90 and 545.45 on BSE, respectively.

The stock of IPRU has fallen 2.77% in the past 1 month, while in 1 month it has fallen 8.51%.
The shares gained 20.17% in 3 months. It gave 4.60% in 1 year, 25.58% in 3 years, and 54.05% in 5 years, respectively.

Its 52-week high is Rs 615.55 apiece and 52-week low is Rs 380.95 apiece, respectively.

Disclaimer - The stock has been picked from the brokerage report of Yes Securities. 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.