ICICI Prudential shares climb over 5% as Q4 profit more than doubles; brokerages still cut target

Shares of ICICI Prudential Life Insurance Company rose sharply by over 5 percent in intra-day trade on Wednesday, April 16, after the company posted a strong set of numbers for the quarter ended March 2025 (Q4FY25). The insurer reported a 122 percent year-on-year jump in net profit to ₹385 crore, compared to ₹174 crore in the same quarter last year, driven by robust premium income and steady growth in protection and annuity segments.

Net premium income for the quarter rose 11 percent year-on-year to ₹16,369 crore from ₹14,788 crore a year ago. On a sequential basis, the profit after tax rose 19 percent, while premium income was up 33 percent. The company also announced a final dividend of ₹0.85 per share for the fiscal year.

Annual Milestones and Business Mix

For the full financial year 2025, ICICI Prudential Life reported a 40 percent rise in profit after tax at ₹1,189 crore. The company’s Value of New Business (VNB) stood at ₹2,370 crore, with VNB margin at 22.8 percent. Total Annualised Premium Equivalent (APE) grew 15 percent to ₹10,407 crore, and the retail protection APE was up 25.1 percent at ₹598 crore. The annuity segment continued to demonstrate strength, delivering a two-year CAGR of 31.4 percent in FY25.

Retail New Business Sum Assured (NBSA) grew 37 percent year-on-year to ₹3.32 lakh crore, while the total in-force sum assured rose 15.6 percent to ₹39.43 lakh crore. The company said it now provides life insurance coverage to over 9 crore individuals.

Managing Director and CEO Anup Bagchi highlighted that the APE crossing the ₹10,000 crore mark for the first time was a significant milestone. He credited the company’s multi-channel distribution model and agile product strategy for the performance. “Our product ‘ICICI Pru Gift Select’, launched in January 2025, addresses growing customer demand for guaranteed income,” Bagchi added.

Stock Performance and Market Reaction

Following the results, the insurance stock surged 5.6 percent to an intraday high of ₹599.65. However, it still remains nearly 25 percent below its 52-week high of ₹795 touched in October 2024. The scrip had hit its 52-week low of ₹516.45 in June 2024.

Despite the recent gains, the stock has shed 8 percent over the past one year. It added 5.6 percent so far in April, after rising 2.3 percent in March. Prior to that, the stock was on a five-month losing streak, declining 10.5 percent in February, 6 percent in January, and posting similar losses in the preceding months.

Brokerages React: Mixed Views with Lower Targets

Brokerage Nuvama upgraded the life insurer to a ‘Buy’ rating while reducing its target price to ₹690 from ₹720 earlier. While the company’s VNB rose modestly by 2.4 percent year-on-year to ₹8,000 crore in Q4, Nuvama noted that a 7.8 percent decline in retail APE pulled down total APE growth. A dip in VNB margin by 185 basis points to 22.8 percent also prompted the brokerage to cut FY26E/FY27E VNB estimates by 5.5 and 6.1 percent, respectively.

Meanwhile, HDFC Securities maintained an ‘Add’ rating with a reduced target price of ₹665, citing weaker-than-expected APE and VNB growth. The brokerage flagged continued pressure on margins due to the company’s ULIP-heavy product mix and challenging quarter. It expects a 14 percent CAGR in APE and VNB over FY25-27 but remains cautious on margin expansion potential due to actuarial and product mix changes.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.