ICICI Prudential Life Q4 Results Review - Higher Costs, Adverse Product Mix Impact New Business: Motilal Oswal

Motilal Oswal Report

In Q4 FY24, ICICI Prudential Life Insurance Ltd. reported 9.6% YoY growth in annual premium equivalent to Rs 36.16 billion. The protection and ex-unit linked insurance plan individual savings segments declined YoY by 4.6% and 19.9%, respectively. ULIPs grew 77% YoY.

Value of new business declined 26% YoY to Rs 7.8 billion (19% miss), due to a sharp correction in margins to 21.5% (down 140 bp QoQ) versus our estimate of 26%.

In FY24, APE stood at Rs 90.5 billion (4.7% YoY) and VNB at Rs 22.3 billion (-20% YoY). VNB margin for FY24 stood at 24.6% (32% for FY23).

Considering the Q4 performance, we have cut our estimates for APE and VNB margin for FY25 and FY26. We expect ICICI Life to deliver an 18% compound annual growth rate in VNB over FY24-26.

Going ahead, the company’s ability to sustain strong premium growth and VNB margins will be vital for re-rating of the stock.

Retain Buy with a target price of Rs 700 (based on 1.7 times Mar’26E enterprise ).

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