ICICI Prudential Life Q2 VNB Rises 20.7% to ₹712 Crore, Misses Poll Estimate of ₹722 Crore
ICICI Prudential Life Insurance shares traded higher on Wednesday, October 14, after the insurer reported a 20.7% year-on-year rise in value of new business (VNB) for the September quarter. The ICICI Prudential Life Q2 results fell short of estimates on VNB and margin, while annual premium equivalent (APE) was in line.
Q2 FY27 Results
VNB came in at ₹712 crore against the CNBC-TV18 poll estimate of ₹722 crore. The VNB margin improved to 25.43% from 24% a year earlier but was below the poll estimate of 25.79%. For the first half of FY27, VNB rose 22.3% to ₹1,283 crore at a 26% margin, and profit after tax increased 26.5% to ₹760 crore from ₹601 crore, supported mainly by higher shareholders' investment income and better surplus generation on the existing policyholder portfolio.
| Indicator | Reading | Poll estimate / Change |
|---|---|---|
| VNB (Q2 FY27) | ₹712 crore | Estimate ₹722 crore; +20.7% year on year |
| VNB margin | 25.43% | Estimate 25.79%; up from 24% |
| APE | ₹2,799 crore | In line; +16.6% |
| Retail APE | ₹2,221 crore | Marginally ahead; +10.7% |
| H1 FY27 VNB | ₹1,283 crore | +22.3%; margin 26% |
| H1 FY27 profit after tax | ₹760 crore | +26.5% from ₹601 crore |
Brokerage Views
The views below are those of the named brokerages, not TradeKaizen, and target prices are measured against Tuesday's close of ₹447.
| Brokerage | Rating | Target price | Implied upside |
|---|---|---|---|
| HSBC | Buy | ₹582 | About 30% |
| JPMorgan | Overweight | ₹670 | About 50% |
| Nomura | Buy | ₹710 | About 59% |
HSBC said Q2 VNB was marginally ahead of its estimate, with margins helped by product mix and the yield curve. It named regulatory clarity and Prudential's stake sale as potential catalysts and described a valuation of around 1 times estimated FY28 embedded value as limiting downside. Nomura flagged the margin miss, at 25.4% against its 26.7% estimate, expects full-year FY27 VNB growth of 14%, and expects a high base in protection to weigh on second-half growth. It said momentum in non-participating products is picking up and that distribution reforms should not have a significant impact.
JPMorgan said VNB was 2.7% below its estimate. The margin expanded 100 basis points year on year but fell 129 basis points sequentially to 25.4%, which it attributed largely to a lower protection contribution. Protection's share of the mix fell 790 basis points sequentially to 20%, though it was 270 basis points above a year earlier. It noted management gave no near-term guidance on growth or margins, and said a sustained re-rating would depend on consistent retail APE growth and regulatory clarity.
Market and Sector Impact
According to Bloomberg data, 36 analysts cover the stock, with 33 rating it Buy and three Hold, and none Sell. The 12-month consensus price target is ₹621.41, implying about 39% above Tuesday's close. The shares traded 1.4% higher at ₹453.3 on Wednesday, still down 33% year to date and close to the 52-week low of ₹441.8.
What to Watch
Track the protection share of the product mix, retail APE growth, any guidance on growth or margins, and regulatory developments and the Prudential stake sale that brokerages cite as catalysts.