ICICI Pru Life shares under pressure despite strong Q4 results, is it an opportunity to buy?

Shares of ICICI Prudential Life Insurance – a subsidiary company of ICICI Bank – tumbled as much as four per cent to hit the day’s low of Rs 438.85 per share on the BSE during Friday’s session. The stock declined despite registering strong earnings for the January-March quarter of the previous fiscal.

ICICI Prudential Life on Thursday reported a 27.2 per cent jump in net income at Rs 235 crore for the March quarter as it earned near a record margin from the new policies sold.

While the bottom line was also boosted by the company achieving its stated target of doubling the value of its new business delivering Rs 2,765 crore from its FY19 level by a wide margin.

At around 12:25 PM, the stock recovered from its lows to trade at Rs 447.20 per share, down Rs 8.65 or Rs 1.9 per cent from Thursday’s closing of Rs 455.85 per share on the BSE.

Amid strong March quarter earnings, most global brokerages are bullish on ICICI Prudential Life Insurance shares. CLSA, Citi, Jefferies, and Macquarie have ‘buy’/ ‘outperform’ ratings on the stock.

CLSA in its view said that the ICICI Pru Life reported strong Q4 as March 2023 insurance sales were aided by budget tax change-related pre-buying that led to 27 per cent annual premium equivalent in Q4FY23 and the margin remained high at 32 per cent.

While Macquarie said the company has reported strong metrics as expected on all counts and added that the management remained confident of delivering strong value of new business (VNB) growth.

ICICI Pru Life shares declined over 15 per cent in the last one year as compared to a per cent fall in the Nifty50. Year-to-date, the stock was marginally down by a per cent against a three per cent drop on the benchmark index.

ICICI Prudential Life Insurance Company Limited (ICICI Prudential Life) is promoted by ICICI Bank Limited and Prudential Corporation Holdings Limited.

ICICI Prudential Life began its operations in the fiscal year 2001. Its Assets Under Management (AUM) as of December 31, 2022, was at Rs 2,518.84 billion.

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(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)