ICICI Prudential Life Insurance shares jump to 52-week high; should you buy or sell stock?

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Updated: August 28, 2019 12:59:41 PM

Shares of major life insurance provider ICICI Prudential Life Insurance swelled to a fresh 52-week high on Wednesday, even as the broader markets remain under pressure.

ICICI Prudential Life Insurance shares gained more than 4.5% to hit an intra-day and 52-week high of Rs 416.60 on BSE.

Shares of major life insurance provider ICICI Prudential Life Insurance swelled to a fresh 52-week high on Wednesday, even as the broader markets remain under pressure. ICICI Prudential Life Insurance shares gained more than 4.5% to hit an intra-day and 52-week high of Rs 416.60 on BSE. Interestingly, shares of its competitor HDFC Life Insurance also moved to hit an all-time high of Rs 559.60 on BSE. However, HDFC Life shares are now off from those levels and are trading 2% lower at Rs 546.90.

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Taking stock of the current status of India’s life insurance players, research firm Invested said that the Indian life insurance sector is completing its 6th year of steady growth with margin expansion. “The Industry, which saw consolidation post FY11, is witnessing a resurgence of mid-size players – unlisted companies without quarterly compulsions,” noted the firm. Sharing its top pick from the sector, Investec said that ICICI Life and HDFC Life at the top in its comparative analysis. “ICICI ranks highest in terms of quantitative metrics (Cost, Persistency and risks) but lower on product mix. HDFC Life ranks highest on management quality as is evident from its ability to identify new segments ahead of peers, product mix and distribution,” said the research firm.

Investec has a buy rating on ICICI Prudential Life Insurance shares with a target stock price of Rs 500. While there are various strengths, the firm’s affluent customer segment is a key weakness and management was slow to address this, said Investec. Management took steps to move towards a more balanced mix, and though progress is slow, the initial signs are encouraging, said the firm. “We believe IPRU could post 3 years VNB CAGR of ~18% driven by
protection growth and conservative assumptions. Current valuations imply low VNB growth expectations,” said the firm.

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