Post Q4 results, life insurer's share price target trimmed but still a 'buy' by brokerage

Nuvama Institutional Equities has retained its 'Buy' rating on ICICI Prudential Life Insurance Company Ltd, even as it trimmed its target price following the company's Q4 FY26 results.

The brokerage revised its target price to Rs 750 from Rs 790 earlier. "We have slightly reduced our FY27E/28E VNB estimates by 1.4/1.1 per cent and changed our TP to Rs 750 (earlier Rs 790), i.e., FY27E/28E P/EV of 1.8/1.6x. Retain 'BUY'. The stock currently trades at FY27E/28E P/EV of 1.3/1.1x," Nuvama said.

"ICICI Prudential Life Insurance's total APE (annual premium equivalent) grew 9.3 per cent YoY (year-on-year) as retail APE moderated to 3.7 per cent while group APE jumped 40.3 per cent YoY in Q4 FY26," the brokerage noted.

"Protection share improved 260bp YoY, aiding VNB margin of 25.2 per cent (+251bp YoY). Consequently, VNB improved 21.4 per cent YoY to Rs 970 crore (+8.8 per cent versus estimate)," it added.

On the distribution front, individual APE growth remained muted due to channel-specific trends. "Individual APE inched up 3.7 per cent YoY while group APE jumped 40.3 per cent YoY. Agency channel sales (-4.1 per cent YoY) declined while it remained moderate at 4.7/2.3 per cent in banca/direct channel in Q4," Nuvama said.

It added that agency and direct channel growth slowed in FY26 due to a high base, given their higher contribution from ULIP and annuity products in the previous year. Meanwhile, the corporate agents channel delivered a stronger growth of 18.2 per cent YoY.

While the management did not provide explicit growth guidance, Nuvama said it indicated that growth could improve going forward, supported by a favourable base.