ICICI Pru Life Insurance shares, Q3 results: Tumble 10% as brokerages cut target prices

Shares of ICICI Prudential Life Insurance tanked 10 per cent to hit a low of ₹572 despite 43 per cent jump in Q3 net profit to ₹326 crore.

Its net premium income for the quarter ended December 2024 rose to ₹12,261 crore, as against ₹9,929 crore a year ago, and the assets under management (AUM) increased to ₹3.10 lakh crore as against ₹2.86 lakh crore, according to the stock exchange filing.

Brokerages have slashed target prices, disappointed by the VNB (value of new business) growth margins as the product mix evolved negatively.

HSBC has cut the target price on ICICI Prudential from ₹825 to ₹780, maintaining its buy rating.

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Reiterating buy rating at a target price of ₹780, analysts of Motilal Oswal said, “Going forward, the company’s ability to sustain strong premium growth and improve VNB margin will be crucial.”

Motilal reasoned that VNB margin has been under pressure during the quarter, mainly owing to the shift in product mix (higher share of ULIPs). “In terms of surrender charges, the company has already implemented changes in the commission structure with most of the channel partners, and the impact is reflected in the sequential decline in commission costs,” it added. The brokerage has cut the APE growth and VNB margin estimates for FY25.

Global brokerage Morgan Stanley has cut the VNB estimates by 2 per cent for FY25-27 and has remained ‘equal-weight’ on the stock at a target price of ₹695.

JM Financial analysts observed that ICICI Prudential trades at a significant discount to HDFC Life and SBI Life, which are strongly supported by their parent banca channels.

Volume growth could provide stability to ICICI Prudential over the medium term, according to JM Financial. The brokerage has maintained buy at a revised target price of ₹777 from ₹880 earlier.

Yes Securities has maintained a relatively cautious ‘add’ rating at a revised target price of ₹750.

Nuvama Institutional Equities retained hold call on the stock at a revised target price of ₹720 from ₹740, quoting that the product mix changed in favour of low-margin linked business and group savings business impacting VNB margins. The retail annualised premium equivalent (APE) growth was aided by strong contributions from agency and banca channels, it added. 

Macquarie and Goldman Sachs have maintained neutral stance at a target price of ₹725 and ₹650, respectively.

Shares of ICICI Prudential traded 7.64 per cent lower on the NSE at ₹587 as at 12.10 pm. On the BSE, the stock fell 7.50 per cent to ₹588.20.