Stock Of The Day: ICICI Prudential Life Insurance — Analyst Views, Key Levels
Motilal Oswal expects ICICI Prudential to outperform the industry in business growth.
ICICI Prudential Life Insurance Co.'s latest financial results for the fourth quarter of financial year 2024 reflect poor operating performance metrics. Elevated operating expenses and unfavourable product mix are the key reasons for the disappointing margin. The net profit of the private sector insurer dropped 26% to Rs 174 crore, missing estimates of Rs 231 crore by analysts tracked by Bloomberg.
The value of new business fell 27% year-on-year to Rs 776 crore. The VNB margin narrowed to 21.46% from 31.97% in the year-ago period, according to an exchange filing of the financial results.
Key Levels To Watch
Resistance level: Rs 640.85 apiece (life high).
Support level: Rs 545.85 apiece (two-month low).
Shares of ICICI Prudential were trading 3.17% lower at Rs 575 apiece on the NSE, compared to a 0.47 advance in the benchmark Nifty 50 at 10:45 a.m.
Brokerage Views
CLSA downgraded ICICI Prudential from 'buy' to 'underperform', citing limited upside potential. It rolled forward the valuation and raised the target price from Rs 630 to Rs 650 apiece, implying a potential upside of 9.46% from the previous close.
Citi Research downgraded ICICI Prudential to 'neutral' from 'buy', with a reduced target price of Rs 645 apiece from Rs 715 earlier. It highlighted concerns regarding sustained payout pressure, unfavourable product mix and elevated distributor payouts.
Jefferies India Pvt. maintains a 'buy' rating with a target price of Rs 680 per share. It anticipates growth improvement from the current financial year and expects a 16% compound annual growth rate in the VNB from fiscal 2024–27, with lower sensitivity to mortality charges and operating expenses.
Motilal Oswal Financial Services Ltd. retains a buy' rating with a target price of Rs 700 apiece. It expects ICICI Prudential to outperform the industry in business growth, projecting an 18% CAGR in the VNB over fiscal 2024–26, and values the company at 1.7 times the March 2026 enterprise value.
Analyst Recommendations
Of the 33 analysts tracking the company, 20 have a 'buy' rating on the stock, 10 recommend 'hold' and three suggest 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 10.47%.