Emkay recommends "Buy" on ICICI Prudential Life Insurance
ICICI Prudential Life Insurance's (IPRU's) FY22 (2021-22) results came in marginally better than our estimates, thanks to strong APE (Annual Premium Equivalent) growth in March '22 and better product mix. IPRU reported FY22 VNB (Value of new business) of Rs 2,160 crore and a VNB margin of 28.0% that came in slightly better than our estimates of Rs 2,070 crore and 27.3%, respectively. To reflect FY22 development and management commentary, we have tweaked our estimates, leading to a minor increase in VNB margins and absolute VNB and a slight reduction in EV (Embedded value). Driven by these tweaks in estimates and the rollover to June '23E from March '23E, our target price increases to Rs 660 from Rs 620, with an implied FY23 P/EV of 2.7 times. We reiterate our 'Buy' rating on the stock at FY23E P/EV of approximately 2.2 times. The valuation looks attractive, with a return of topline growth remaining the key for a re-rating.
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