Buy This Bluechip Private Life Insurance Stock For Potential 27% Upside: Motilal Oswal

Brokerage firm Motilal Oswal recommends investors to buy the stocks of ICICI Prudential Life Insurance. The brokerage firm has mentioned, "ICICI Prudential Life Insurance has maintained a steady traction in VNB growth, led by a healthy product mix and APE growth, aided by a more balanced distribution mix."

Target Price, Current Market Price, and Company Performance

The Current Market Price (CMP) of ICICI Prudential Life Insurance is Rs. 497. Motilal Oswal has estimated a Target Price for the stock at Rs. 630. The stock has the potential to give a 27% return, in the upcoming 1 year. This is a large-cap company with a market capitalization of around Rs. 70,846 crore.

Stock Outlook
Current Market Price (CMP)	Rs. 497
Target Price	Rs. 630
Potential 1 year return	27.00%
52 week high share price	Rs. 724.30
52 week low share price	Rs. 430.00

The company's Net Premiums in FY22 were recorded at Rs. 363.2 b, which is expected to be at Rs. 408.9 b in FY23. Their Total Premium growth in FY22 stood at 4.8%, which is expected to be at 11.8% in FY23. The company's share holder's PAT in FY22 was recorded at Rs. 7.5 b, which is expected to be at Rs. 8.4 b in FY23. ICICI Prudential Life Insurance has again guided to double FY19 Value of New Business (VNB) by FY23 led by its 4P strategy. The company has reported 34% YoY growth in individual WRP in FY23 YTD.

The company is offering a dividend yield of 0.11%.

Motilal Oswal says about stock advantages and risks

About the stock, Motilal Oswal commented, "The share of higher-margin products such as protection and annuity/non-par savings has increased in recent years, thus reducing dependence on ULIPs. On the distribution side, the share of banks (excluding ICICI Bank) has increased over the years (off a low base), supporting the diversification in its distribution mix. We expect VNB margins to improve slightly and project IPRU to deliver 21% and 23% CAGR in new business APE and VNB over FY22-24E, respectively, thus enabling an operating RoEV of 16.9% in FY24E."

The firm added, "The addition of new-age partners and a wider presence across traditional channels will boost its business growth. The share of banca channel (excluding ICICI Bank) has increased to 14% in FY22 from 5% in FY18. These initiatives will provide the company with diversification benefits and drive an optimal business mix, thereby supporting margins."

Company profile

The company started its operations in the financial year 2001. On a retail weighted received premium basis (RWRP), it has consistently been amongst the top companies in the Indian life insurance sector. Their Assets Under Management (AUM) at Q4 FY2022 were Rs. 2,404.92 billion. In FY 2015 ICICI Prudential Life became the first private life insurer to attain assets under management of Rs. 1 trillion, as the company informs. The share of traditional savings and protection has surged from 9% each in FY19 to 27% and 17% in FY22, respectively. Additionally, ICICI Prudential Life is the first insurance company in India to be listed on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Disclaimer

The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.