ICICI Prudential shares drop 3% as analysts cut APE estimates post Q1

ICICI Prudential Life Insurance shares slipped over 3 per cent after analysts cut APE estimates after Q1 results

Shares of ICICI Prudential Life Insurance slipped over 3 per cent on Wednesday after analysts cut Annualised Premium Equivalent (APE) estimates after the insurer reported a 34 per cent jump in net profit in the June quarter. 

 

The insurer's stock fell as much as 3.79 per cent during the day to ₹644.2 per share, the biggest intraday fall since June 3 this year. The stock pared some losses to trade 2.2 per cent lower at ₹654 apiece, compared to a 0.13 per cent decline in Nifty 50 as of 9:50 AM. 

 

Shares of the company fell for the second straight day on Wednesday and currently trade at 11 times the average 30-day trading volume, according to Bloomberg. The counter has risen 0.2  per cent this year, compared to a 6.3 per cent advance in the benchmark Nifty 50. ICICI Prudential has a total market capitalisation of ₹94,905.26 crore.   Track LIVE Stock Market Updates Here

 

ICICI Prudential Q1 results 

The company's net profit increased 34 per cent to ₹302 crore in the first quarter of FY26 (Q1FY26) from ₹225.4 crore a year ago. The insurer’s net premium income grew by nearly 8 per cent year-on-year (Y-o-Y) to ₹8,503 crore. 

 

However, the annualised premium equivalent (APE) slipped 5 per cent Y-o-Y to ₹1,864 crore. APE is the sum of annualised first-year regular premiums, plus 10 per cent weighted single premiums. The company also reported a contraction in VNB margin to 24.5 per cent in Q1 FY26.

 

In Q1FY26, the insurer's solvency ratio stood at 212 per cent against 187.9 per cent in the year-ago period. Its persistency ratio remained healthy with the 13th-month persistency ratio at 80.8 per cent as against 85.7 per cent.  

Analysts take on ICICI Prudential's results 

Centrum Broking said that ICICI Prudential Life Insurance posted a subdued first quarter, with APE declining 5 per cent Y-o-Y, largely due to the base effect and weak demand for linked products. 

 

While the retail protection business remained strong, the credit life segment underperformed amid a sluggish microfinance sector. As a result, Centrum has trimmed its APE growth estimates by 2 per cent for 2025-26 and 3 per cent for 2026-27. The brokerage introduced forecasts for 2027-28, projecting a 13 per cent compound annual growth rate (CAGR) in APE over 2024-25 to 2027-28. Centrum raised its target price to ₹725 from ₹680 per share and maintained its 'Add' rating. 

 

Antique Stock Broking has lowered its APE estimates by 2 per cent for FY26-27, citing a muted first quarter. This comes even as the company aims to grow APE ahead of the industry average in FY26, with a focus on expanding the absolute VNB. Antique has reiterated its 'Buy' rating with a target price of ₹715 per share. 

 

Nuvama Institutional Equities has retained its 'Buy' rating and raised its target price to ₹770 from ₹760. Total APE declined 5 per cent Y-o-Y. However, group APE rose 18.9 per cent, supported by a strong 53.7 per cent jump in the group savings segment, it noted. 

 

Despite the margin improvement, VNB fell 3.2 per cent Y-o-Y, marginally below estimates. Nuvama has fine-tuned its VNB estimates for FY26-28, adjusting them by (-)0.1 per cent, (+) 0.8 per cent, and (+) 2.1 per cent, respectively.