* NBP – NBP was at Rs 25.6bn was in line with our estimate and registered a growth of 71% yoy, The growth was a contribution of strong of 89% yoy in single premium and healthy growth of 40% in First year premium on yoy basis.
* APE – APE at Rs 12.2bn was higher than our estimate of Rs11.1bn. APE growth was at 48.1% yoy. Growth was driven by strong performance across all product classes.
* APE Mix – Share of ULIPs was flat while that of other savings products led by annuities saw a growth of 367bps yoy. Share of protection dipped by 385bps yoy.
* VNB & VNB Margin – Q1 FY22 VNB at Rs3.6bn was higher than our forecasts of Rs3bn, while VNB margin at 29.4% was significantly ahead of our and street estimates. On a yoy basis VNB margins improved by 495bps and sequentially margins increased by 580bps.
* Profits – Reported loss was at Rs1.9bn as compared to profit of Rs2.8bn in Q1 FY21.
* Valuations ‐ The stock currently trades at FY23E P/EV of 2.3x.
ICICI Prudential delivered a stellar performance in terms of VNB margins during the quarter. This is attributable to the product mix wherein share of higher margin non‐linked savings increased in the overall savings mix. Going ahead we expect share of protection to taper down and share of non‐linked savings products to rise which will cause a drop in margins. However, for FY22 we are now expecting a growth of 33% in VNB and 24.4% CAGR between FY21‐23E. Management is confident of delivering on its target of doubling its FY19 VNB by FY23 which will require a 28% CAGR. On distribution front, while non ICICI Bank bancassurance partnerships continue to witness strong growth, ICICI Bank has also witnessed growth especially in the annuity business. We have raised our estimates for VNB and resultantly our target has now increased to Rs758. Retain BUY rating.
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