The global brokerage firm Jefferies cut the target price for ICICI Prudential Life Insurance to Rs 730 from Rs 780. The new target price implies an upside of 23% from the current market price. The brokerage has, however, retained its ‘Buy’ call on the insurance stock. The continuity of soft growth led the brokerage to pare the target price.

Jefferies on ICICI Prudential Life Insurance: Decline in APE 

ICICI Prudential Life Insurance’s overall Annualised Premium Equivalent (APE) fell by 3% YoY, but that was due to a higher base. Retail APE saw a higher decline of 7% YoY. Across products, ULIPs were down 8% YoY (weaker trends may continue for another quarter or two), and annuity sales also fell 47% due to a higher share of single premium business. 

Jefferies on ICICI Prudential Life Insurance: Product mix led margin growth

For Q2 FY26, the company’s Value of New Business (VNB) of Rs 600 crore was up 1% YoY, and it was in line with the brokerage’s estimates. The company’s margins rose 100 basis points YoY. Improvement in margins was led by a shift in product mix towards non-par guaranteed products and protection over ULIPs, along with an increase in sum assured, average tenure, and rider attachments. The brokerage stated that it will watch the stock for persistent performance. If there is a lack of improvement, then ICICI Prudential may take a negative variance in enterprise value. 

Jefferies on ICICI Prudential Life Insurance: Clarity on GST key to margin recovery

The broker raised the concern around the Input Tax Credit. Jefferies stated that the absence of the Input Tax Credit will drag margins in the December quarter of the current financial year (Q3 FY26). Plus, cuts in commissions and operating expenditure are key to margins. To mitigate the negative impact of new policies, the management is trying to lower commissions and optimise opex.