​ICICI Prudential share price jumps 9% despite loss in Q1 profit, as brokerages maintain BUY rating

Despite weak performance in the first quarter, ICICI Prudential shares jumped over 9 per cent and hit a new 52-week high to Rs 660.95 per share on the BSE intraday trade on Thursday. Impacted by the second wave of Covid-19, the company reported a loss in the Q1 of the financial year 2021-2022.

ICICI Prudential on Tuesday reported a net loss of Rs 185 crore in the June-ended quarter of FY22, as against a net profit of Rs 287.59 crore in Q1FY21 and a profit of Rs 63.78 crore on a sequential basis.

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The insurance company said in a regulatory filing said, the Total income was down at Rs 16,724.05 crore in the quarter under review as against Rs 19,057.42 crore in the same period a year ago.

At around 12:25 pm, the counter was trading at 6.56 per cent to Rs 643.05 per share on the BSE, as compared to a 1.19 per cent rise in the S&P BSE Sensex. The scrip has soared over 56 per cent since March 18, 2021 from Rs 422 per share.

The majority of brokerages are bullish on the stock despite weak Q1 numbers, as Morgan Stanley has an Overweight rating on ICICI Prudential and expects VNB (Value of New Business) growth pick-up after recent sluggish years to help rerate the stock. It sets a price target of Rs 700 per share.

Similarly, CITI also maintains a Buy call on the ICICI Prudential with a price target of Rs 750 per share. The brokerage raises FY22/23 VNB estimates by 6/3 per cent respectively, as brokerage factor higher VNB margin and lowers FY22/23 profit estimates by 18/13 percent amid higher claims and opex.

ICICI Pru’s Q1 VNB margin meets CLSA expectations around 29 per cent, the brokerage also gives a Buy call for the scrip, increasing the price target of Rs 725 per share. The brokerage expects a VNB CAGR of 25 per cent over FY21-23 and lifts VNB estimates by 13-14 per cent.