While maintaining Buy rating with increased target price at Rs 500 (from Rs 490), Deutsche Bank said ICICI Pru is better placed to benefit from sector tailwinds.
ICICI Prudential Life Insurance Company shares rallied more than 4 percent intraday Monday as bullish brokerage houses raised target price of the stock after Q3 earnings.
The life insurance company reported profit at Rs 452.1 crore for the quarter ended December 2017, against Rs 450.04 crore in year-ago while net premium income grew by 19.26 percent during the quarter to Rs 6,795.13 crore from Rs 5,697.51 crore in the same period last fiscal.
The company is a joint venture between ICICI Bank and Prudential Corporation Holdings, which is a part of an international financial services group headquartered in the UK.
Brokerage houses maintained Buy call on the stock and expect the stock to give up to 26 percent return in 12 months:
Brokerage: Deutsche Bank | Rating - Buy | Target - Rs 500
While maintaining Buy rating with increased target price at Rs 500 (from Rs 490), Deutsche Bank said ICICI Pru is better placed to benefit from sector tailwinds.
December quarter saw strong uptick in margins but annual premium equivalent (ape) growth slowed due to demonetisation base, it added.
The research house feels higher margin should be sustained.
Brokerage: Nomura | Rating - Buy | Target - Rs 540
Nomura has maintained its Buy rating on the stock and target price raised to Rs 540 from Rs 490 as there was a big surprise on value of new business (VNB) margin that expanded to 13.7 percent in first nine months of FY18 from 10.1 percent in FY17.
"We see more legroom for margin expansion and ULIPs will remain unaffected by expected regulatory change," the research house said.
It expects FY18 margins at 14.7 percent and increased long-term margin expectations to 16-16.5 percent.
ICICI Prudential Life is the preferred insurance pick, Nomura said.
At 11:40 hours IST, the stock price was quoting at Rs 445.10, up Rs 15.65, or 3.64 percent on the BSE.
