Result Analysis: ICICI Prudential Life Insurance Company Ltd. (CMP- ₹484.35) Result Update: Q3FY23

ICICI Prudential Life Insurance Company Ltd. (“ICICI Pru.”) is 3rd largest private sector Life Insurance Company and is engaged in the business of providing life insurance, pensions and health insurance products to individuals and groups. The company has consistently been amongst the top companies in the Indian Life insurance sector with a strong balance sheet and solvency ratio of 212.2%. It distributes its products through a large pan-India network of individual agents, corporate agents, banks, and brokers, along with the company’s proprietary sales force and website.

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    Stock Details
    Market Cap. (Cr.) 69677
    Equity (Cr.) 1438.56
    Face Value 10.00
    52 Wk. high/low 640 / 430
    BSE Code 540133
    Book Value (Rs) 66.7
    Sector Insurance


    Key Ratios
    Debt-equity: 0.10
    ROCE%: 0.42
    ROE%: 6.32
    EPS TTM: 5.95
    P/BV: 7.30
    P/E TTM: 81.40

    Result Highlights:

    • ICICI Pru.’s Revenue stood at Rs 17779 crore, which shows a growth of 78%YoY, and a degrowth of 1.22% QoQ.

    • The 13th and 61st month persistency ratios or customer retention by premium improved to 86.1% and 64.2% from 84.8% and 52.7%, respectively, and has improved across all cohorts.

    • Solvency ratio that measures the extent to which assets cover commitments for future liabilities, stood at 212% from 202.2%

    • Value of new business (“VNB”) i.e. present value of the future profits associated with new business written during the period, grew 23.2% to Rs 1,710 crore.

    • Value of New Business margin expanded to 32% from 27.1%.

    • The company’s overall cost ratio remained elevated; it went up to 20.8% from 17.7%.

    • New business premium grew 10% to Rs 11,287 crore.

    • Assets under management grew 6% to Rs 2.52 lakh crore.

    • The Company’s profit after tax was 222 crores for Q3-FY23, which showed a growth QoQ of 10.71% and a degrowth of 28.99% YoY

    • New business premium was 11287 crores for 9M-FY2023, a growth of 10.1% as compared to 10248 crores for 9M-FY2022.

    • APE was 5341 crores for 9M-FY2023, a growth of 4.2% as compared to 5125 crores for 9M-FY2022.

    • Annuity APE grew from 216 crores in 9M-FY2022 to 337 crores in 9M-FY2023, registering a growth of 56.0% year-on-year.


    Financial Performance:      


    Shareholding Pattern:

    Shareholding Pattern  
    Promoters & Promoter Group 73.35%
    FIIs  18.82%
    DIIs 5.03%
    Public 2.62%
    Others 0.18%

        Management Commentary:

    S Kannan, managing director and chief executive officer at ICICI Prudential      Life, said, “We have maintained positive momentum in business and profitability during the nine months ended FY2023 and have registered a strong year-on-year growth of 23.2% in the Value of New Business, which stood at 17.10 billion for the period ending 9M-FY2023. This consistent track record of healthy compounding of VNB and near doubling of the VNB margin are a result of the “transformative” diversification in products, distribution partnerships and customer segments that began in FY19.


    ICICI Pru.’s revenue jumps by 78% YoY at the same time the profits of the company decline by 29% in the same period of time. However, VNB grew at 23.2% along with the persistency ratio which improved across all cohorts of 13th, 25th, 37th, 49th, and 61st months. India’s insurance sector has a low penetration of about 22% which is very low as compared to the other developed nations and going forward it is expected to grow to 125% by FY-2035 which gives the company a huge headroom to grow. The 9M EPS of the company stands at ₹4.02 and we expect it to be at ₹5.36 for FY23 at the P/E of 90.36x


    Particulars (In Cr.) Q3FY23 Q2FY23 Q3FY22      QoQ %          YoY%
    Net Premium  Earned 9465 9582 9074 -1.22% 4.30%
    Other Operating Income 7962 13023 856 -38.86% 830.28%
    Other Income 352 507 58 -30.52% 512.50%
    Total Income 17779 23112 9987 -23.08% 78.01%
    Total Operating Expenditure 17392 22866 9506 -23.94% 82.95%
    Operating Profit 387 246 481 57.32% -19.62%
    Provisions & Write-Offs 110 3 122 3569.67% -9.46%
    Profit Before Tax 277 243 359 13.92% -23.06%
    Tax 55 43 47 28.96% 15.94%
    Profit After Tax 222 200 312 10.71% -28.99%
    Segment Premium Income (In Cr.) Q3FY23 Q2FY23 Q3FY22 QoQ % YoY% Segment %
    Par Life 1,172 1,146 1,168 2.29% 0.33% 12.45%
    Par Pension 2.6 1.7 3.0 52.38% -14.95% 0.03%
    Non-Par Life 2,789 2,513 1,972 10.99% 41.40% 29.62%
    Non-Par Pension 44 262 16 -83.19% 175.44% 0.47%
    Non-Par Variable 6.3 3.1 0.1 107.87% 4776.92% 0.07%
    Non-Par Variable Pension 0.0 0.6 10.8 -100.00% -100.00% 0.00%
    Annuity Non-par 540 703 774 -23.13% -30.23% 5.74%
    Health 6.9 7.4 7.3 -6.61% -5.72% 0.07%
    Linked Life 4,453 4,405 4,733 1.10% -5.91% 47.30%
    Linked Pension 33.4 35.9 42.2 -6.97% -20.85% 0.35%
    Linked Health -1 0 -1 -376.60% 116.67% -0.01%
    Linked Group Life 368 429 168 -14.31% 118.35% 3.91%
    Total 9,414.70 9,507 8,896 -0.97% 5.83% 100.00%


    Particulars (In Cr.) 9M-FY23 9M-FY22 FY22          YoY%
    Value of New Business (VNB) 1710 1388 2163 23.20%
    New Business Sum assured 692193 513163 773146 34.90%
    APE* 5341 5125 7733 4.20%
            -Savings 3954 4052 6120 -2.40%
           -Protection 1050 856 1313 22.70%
           -Annuity 337 216 300 56.00%
    New Business Premium 11287 10248 15036 10.10%
    Cost ratio (Cost/TWRP^) 20.80% 17.70% 18.60%
    Profit/(Loss) After Tax (PAT) 576 569 754 1.20%
    Assets under management 251884 237560 240492 6.00%
    *- Annualized Premium Equivalent
    ^- Total weighted received premium
    Source: Company website, EWL Research

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