ICICI Prudential Life Q4 Results Review: Motilal Oswal Maintains 'Buy' But Lowers Target Price —Here's Why

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Motilal Oswal Report

ICICI Prudential Life Insurance Company Ltd. reported a slight decline of 3% YoY in new business annual premium equivalent to Rs 35 billion (in line) in Q4 FY25. For FY25, APE grew 15% YoY to Rs 104.1 billion.

Value of new business margin for the quarter stood at 22.7% versus our estimate of 21.9% (21.5% in Q4 FY24). Absolute VNB grew 2% YoY to Rs 8 billion (in line). For FY25, VNB was at Rs 23.7 billion (+6%) and margin stood at 22.8% versus 24.6% in FY24. For Q4 FY25, ICICI Prudential reported a 122% YoY jump in shareholder PAT to Rs 3.9 billion (32% beat). For FY25, PAT grew 39% YoY to Rs 11.9 billion.

Management aims to achieve higher VNB growth compared to APE growth, driven by-

1. improvement in protection segment margin by repricing group term products, and

2. sustaining higher margins in ULIPs through rider attachments and higher sum insured.

While there is no specific APE growth guidance, the aim is to grow higher than estimated industry growth of 15% in FY26.

We trim our APE growth estimates for FY26 from 18% to 14% while retaining FY27E growth at 16%. For VNB margins, we build in about 70bp/50bp expansion in FY26/FY27 to 23.5%/24% due to better ULIP and protection margins. Reiterate Buy with a target price of Rs 680 (based on 1.6x FY27E EV).

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