Emkay Global Financial’s report on ICICI Pru Life
ICICI Prudential’s H1FY22 results were broadly on the expected lines. Since IPRU’s monthly new business numbers were already known, the key monitorablesin the results were VNB margin, EV growth, Covid-19 claims development and future guidance. VNB and VNB margin growth on estimated lines: The value of new business (VNB) grew 45% YoY to Rs 8.7bn in H1FY22, led by ~40% yoy APE growth (from low base of H1FY21) and 1ppt VNB margin expansion to 27.3%. The margin contracted from 29% seen in Q1, but it was on expected lines as with the increasing share of savings in the product mix slightly softened the VNB margin over the year. For FY22, we estimate a VNB margin of 26.7% (up 1.5ppts YoY).
Hold; TP of Rs760 based on appraisal value method, implies a FY23E P/EV of 2.9x: We value IPRU based on the appraisal value method, using FY23E EV and then adding discounted VNB of future years.
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