Brokerages tracking ICICI Prudential Life Insurance Company largely agree on one thing after the March quarter. Margins have come in stronger than expected, but growth has not kept pace. What’s the call on the share price now?
ICICI Pru Life: What to watch out for next
Reports from Motilal Oswal, Jefferies and HDFC Securities point to a steady expansion in value of new business margins, helped by protection mix and favourable yield movements, even as annual premium equivalent growth remained modest and uneven across segments.
JM Financial’s latest note adds to that view, calling out the sharp margin beat while acknowledging that demand trends, especially in retail and agency channels, stayed weak.
Across brokerages, the stance remains constructive with most retaining ‘Buy’ ratings. The common thread across these views is that profitability has held up better than expected, but the next leg of stock performance will depend on whether growth recovers in a more sustained manner.
Motilal Oswal on ICICI Prudential Life Insurance Company: ‘Buy’
Motilal Oswal maintained a ‘Buy’ rating with a target price of Rs 650, implying an upside of about 19% from the current market levels.
The brokerage said the company delivered a steady quarter on profitability, with value of new business margin at 25.2%, beating its estimate and rising year on year. The absolute value of new business came in at Rs 970 crore, ahead of expectations, supported by a strong protection mix and improved rider attachment. For the full year, margins expanded to 24.7%, even as annual premium equivalent growth remained modest.
Motilal Oswal noted that embedded value reached about Rs53,000 crore, growing over 10%, while return on embedded value stood at 11.9% for the year. The firm also pointed to sustained traction in protection, with retail protection witnessing strong growth, aided by regulatory changes and product positioning.
“ICICI Pru Life’s continued efforts toward the product mix shift and increasing retail protection contribution have resulted in continued YoY expansion in VNB margin, despite the loss of input tax credit after GST exemption,” Motilal Oswal said.
The report added that while distribution trends remained mixed, with agency channels seeing pressure, the company continued to invest in technology and analytics to improve productivity. It also expects margins to remain resilient, supported by higher protection share and improving product mix over time.
JM Financial on ICICI Prudential Life Insurance Company: ‘Buy’
JM Financial retained its ‘Buy’ rating and raised its target price to Rs 640, implying an upside of about 17% from current levels.
The brokerage said the March quarter margin performance stood out, even as growth disappointed. Value of new business margin for the quarter came in at 25.2%, while full year margin stood at 24.7%, expanding 190 basis points year on year. This was driven largely by strong protection growth and favourable product economics.
The firm highlighted that individual annual premium equivalent growth remained muted at 4% year on year in the quarter, reflecting weak demand conditions. However, total annual premium equivalent grew faster due to group business. Protection remained the strongest segment, with individual protection growing over 60%.
“We believe current valuations of 1.1x Mar’28E EV prices in the weak growth and any uptick in growth can see the stock rally as and when macros improve,” JM Financial said.
The brokerage added that margin performance benefited from higher protection contribution, favourable yield curve movements and better rider attachment. At the same time, it flagged concerns around persistency and weak agency channel trends, which continue to weigh on growth.
JM Financial expects the company to deliver steady compounding in value of new business and embedded value over the medium term, even as near term growth remains under pressure.
Jefferies on ICICI Prudential Life Insurance Company: ‘Buy’
Jefferies maintained its ‘Buy’ rating and raised its target price to Rs 670, implying an upside of about 22%.
The brokerage said the quarter beat expectations primarily due to stronger margins, supported by a steeper yield curve and favourable product mix. Value of new business margin at 25.2% came in ahead of estimates, while value of new business growth remained healthy.
At the same time, Jefferies pointed out that operating variances and persistency challenges continued to weigh on overall performance. It also flagged pressure on non-participating products due to competition from bank deposits, as well as weak agency channel trends.
“APE growth recovery in FY27e will depend on ability to grow non-par & agency,” Jefferies said.
The firm expects margins to remain stable with gradual improvement, driven by a higher share of protection and changes in product mix. It also expects value of new business growth to pick up as growth normalises from a low base.
Jefferies noted that the stock trades at a discount to peers, which could narrow if growth visibility improves and execution remains consistent.
HDFC Securities on ICICI Prudential Life Insurance Company: ‘Add’
HDFC Securities maintained an ‘Add’ rating with a target price of Rs 595, indicating a more modest upside from current levels at around 6%.
The brokerage said the company delivered a mixed performance, with weak annual premium equivalent growth but strong margin expansion. Value of new business margin at 24.7% for the year came in ahead of expectations, supported by protection mix and favourable yield movements.
However, it flagged that return on embedded value declined to 11.9%, weighed down by adverse operating assumptions and higher expenses. The brokerage also pointed to continued lag in retail growth compared with peers.
“Stability remains the key re-rating trigger,” HDFC Securities said.
The report added that frequent changes in strategy, product mix and cost structure over the past few years have impacted growth consistency. It expects the company to continue underperforming peers on growth metrics in the near term, particularly given its exposure to unit linked products in a volatile market.
Conclusion
Brokerage commentary on ICICI Prudential Life Insurance Company after the March quarter follows a consistent thread. Most firms continue to back the stock with ‘Buy’ ratings, citing valuation comfort and margin strength, though the path ahead depends on whether demand recovers and distribution stabilises.
Disclaimer: While the brokerage analysis and price targets presented reflect the professional assessments of established financial institutions, these views are for informational purposes only and do not constitute personal investment advice or a solicitation to buy or sell any security. Investors are advised to consult with a SEBI-registered investment advisor to evaluate the suitability of ICICI Prudential Life Insurance based on their individual risk profile and financial goals before taking any action. Market investments are subject to inherent risks, and past performance or brokerage targets are not a guarantee of future returns.
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