ICICI Prudential Life' overall annual premium equivalent in Q2 de-grew by -3.3% YoY but grew 29.9% QoQ to Rs 24.22 billion. Overall APE in H1 de-grew by -4.1% YoY to Rs 42.86 billion.
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Yes Securities Report
We maintain a relatively cautious ‘Add' on ICICI Prudential Life Insurance Company Ltd. with a revised price target of Rs 690.
The VNB margin for Q2 FY26 was 24.4%, down -7bps QoQ and up 104bps YoY. Management commentary focused on how margin in H1 has been better than FY25.
In this regard, positive evolution of product mix in favour of protection and non-par savings has helped. Within traditional products, the share of Par to Non-Par has changed from two-thirds in favour of Par in FY25 to half each in H1 FY26.
Product level margins have also improved due to higher sum assured, longer tenures and better rider attachment. There has also been a favorable movement of the yield curve. However, the flattish to slightly negative sequential evolution of VNB margin is likely explained by lower share of protection business, while the share of low margin group funds and linked business rose.
The company expects a 1% impact on EV and a marginal impact on VNB margin, to be offset through cost optimisation and renegotiation of commissions with distributors.
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