ICICI Pru Life shares tank 10% post muted Q3 earnings show
ICICI Prudential Life Insurance Company tanked over 10% on Thursday to the day's low of Rs 463.45 in Thursday's trade on the NSE as the Street was unimpressed by the company's December quarter earnings which saw a 3% increase in net profit to Rs 227 crore versus Rs 220 crore reported in the year-ago period. Net premium income was up 5% year-on-year (YoY) to Rs 9,928 crore mainly due to growth in first-year premium.
Today's action in the stock of ICICI Prudential takes the declining trend to six sessions in a row while extending the price erosion to over 14% during this period.
More than one crore shares changed hands on the NSE around 11 am triggering the selling pressure.
For the nine months, the annualised premium equivalent, a measure of life insurance business computed as a sum of annualised first-year premium and 10% of single premiums, grew by 1.7% to Rs 5,430 crore.
The company saw an increase in expenses, especially commissions, which resulted in the expense management ratio moving up to 18.3% during the quarter from 14.7% a year ago.
Commissions paid including rewards and compensation to agents, brokers and intermediaries increased to Rs 1,000 crore during the quarter from Rs 391 crore in the year-ago period.
The company's solvency ratio fell to 196% from 212%.
Persistency or the number of policies saw some improvement.
The insurer saw the 13th-month persistency remain flat while the 61st-month persistency improve to 51.3% during the quarter from 45.9% a year ago.
For the nine-month period, the value of new business (VNB), which is the present value of all future profits to shareholders, fell 15% to Rs 1,451 crore. VNB margin, which is similar to profit margin, fell to 26.7% from 32% for the nine-month
