ICICI Pru Life shares slip 3% despite healthy Q2 show; buy, sell or hold?

Shares of ICICI Prudential Life Insurance Company declined 2.85 per cent to hit an intra-day low of ₹581 on the NSE on Wednesday, despite the company reporting an 18 per cent year-on-year (Y-o-Y) rise in consolidated net profit at ₹296 crore for the second quarter of FY26 (Q2FY26) against ₹250.99 crore reported in the same quarter last year. 

 

At 10:03 AM, the stock was trading at ₹584.80 on the NSE, down 2.22 per cent from the previous close of ₹598.05. Around 0.61 million shares, worth ₹36.20 crore, had changed hands across the NSE and BSE by then.

 

Market analysts attributed the decline to profit booking and sectoral pressure following the government’s move to cut the Goods and Services Tax (GST) on health and life insurance products from 18 per cent to nil as part of its new tax reform measures.

 

“The stock has declined due to profit booking by investors. The insurance sector is likely to be affected by the recent announcement of GST revamp in September,” said independent market analyst Deepak Jasani.

 

Jasani, however, expects the stock price to stabilise after two to three sessions.

 

Meanwhile, the company’s management remains optimistic, saying the recent GST changes will drive long-term growth and create value for all stakeholders, including customers, distributors, and shareholders.

 

According to Anup Bagchi, managing director and chief executive officer (CEO) of ICICI Prudential Life Insurance, early trends following the GST exemption on life insurance indicate a positive response.

 

“We have observed growth in website traffic, lead volumes, and conversion rates across product segments, indicating enhanced customer traction. Protection remains our focus area and notably, the retail protection segment has grown at a CAGR of 31 per cent over the last three years. The New Business Sum Assured, which is the quantum of life cover taken by customers, grew 19.3 per cent Y-O-Y to ₹6.77 trillion in H1 FY26. As of September 30, 2025, our total in-force sum assured stood at ₹42.16 trillion,” said Bagchi.  CATCH STOCK MARKET LIVE UPDATES TODAY

ICICI Prudential Life Q2 FY26 performance

During the quarter, the insurer’s net premium income rose 10.1 per cent Y-O-Y to ₹11,843 crore from ₹10,754 crore in Q2 FY25. Its annualised premium equivalent (APE) for the first half of FY26 (H1 FY26) stood at ₹4,286 crore, reflecting a two-year CAGR of 10.3 per cent, the company said in an exchange filing.

 

The insurer’sTotal premium income grew 9.2 per cent Y-O-Y to ₹21,251 crore during the same period.

 

The company’s expenses for the quarter came in at ₹2,152 crore, down 6 per cent from ₹2,289.89 crore in Q2 FY25. Sequentially, however, expenses increased 13 per cent from ₹1,891.48 crore.

Analysts retain ‘Buy’ on ICICI Prudential Life

Analysts at Nuvama Institutional Equities and JM Financial have retained their Buy ratings on the stock, citing healthy long-term prospects despite short-term pressure.

 

While management did not quantify the impact of input tax credit (ITC) non-availability on value of new business (VNB) margins, analysts at Nuvama said they remain optimistic that the GST exemption–driven top-line growth will offset any margin impact and support overall VNB growth.

 

“We are reducing APE and margin estimates, and FY26E/27E/28E VNB by 0.3 per cent/4.5 per cent/7.5 per cent, respectively. This, along with a valuation rollover to Sep-27E, keeps our target intact at ₹770 (FY27E/28E P/EV of 1.4x/1.2x); retain Buy,” wrote the analysts at Nuvama in a research note.

 

Meanwhile, Raghvesh Sharan, research analyst at JM Financial at JM Financial also maintained their Buy rating but lowered the target price to ₹730 from ₹760 per share, valuing IPRU at 1.7x FY27E EVPS (against 1.8x earlier). They believe IPRU will return to growth in the latter half of Q3, adding that current valuations offer a good entry point.

 

The company’s results, Sharan said, were broadly in line with estimates. Going forward, the insurer expects stronger growth driven by GST 2.0, improved product attractiveness, an uptick in ULIPs, and a favourable base effect starting December 2025.

 

“The insurer has disappointed on growth so far, with agency channel APE contracting 21 per cent Y-O-Y and the direct channel down 9 per cent in Q2. We have cut our FY26E VNB estimate by 1 per cent (with a 2 per cent cut in individual APE growth). We believe IPRU will return to growth in the latter half of Q3, and current valuations present a good buying opportunity,” said Sharan.