Jefferies has maintained a ‘Buy’ rating on ICICI Prudential Life Insurance, while trimming its target price to ₹670, as the stock currently trades at ₹572.50. The brokerage remains optimistic about the insurer’s long-term growth potential, despite near-term pressures on profitability.
For Q4FY25, the company reported a Value of New Business (VNB) of ₹8,000 crore, marking a 2% year-on-year growth. This was ahead of Jefferies’ estimates, driven by a better-than-expected premium mix and stronger overall premium collections. However, retail APE fell 8% YoY, impacted by weaker ULIP and credit protection sales.
Jefferies noted that the negative change in operating assumptions, particularly related to mortality and cost structures, led to a 330 basis point decline in margins and also had a marginal effect on Embedded Value (EV).
Despite these setbacks, the brokerage believes management can offset the pressure through repricing of credit protect products, improving protection attachment, and better product mix realignment. It has trimmed its VNB estimates by 6%, but still expects a 14% CAGR in VNB over FY25–28, supported by strategic adjustments.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.