Buy ICICI Prudential Life Insurance Company, target Rs 435: Emkay Global

Emkay Global Financial Services has given a buy recommendation on ICICI Prudential Life Insurance Company (IPRU) with a target price of Rs 435.

Shares of ICICI Prudential Life Insurance Company traded at Rs 387.15 around 9:45 am on 3 July, 2019. The brokerage has set a one-year horizon for the stock to hit the target price.

Investment rationale:

"IPRU is getting future ready through the use of technology. It believes that new-age millennials demand instant service on the principles of C2MxEI, i.e., connect to many but engage individually, possibly through the use of technology," said the brokerage.

IPRU is moving from robotic automation to cognitive (intelligent) automation which aims at eliminating system errors.

IPRU, through the use of technology, has achieved 76 per cent self-serviced transactions, 60 per cent renewal premium through electronic mode, and intuitive IVR that saves 50 per cent navigation time (first of its kind in the industry where a link on mobile generated through OTP redirects to the menu page on the screen).

"We believe that IPRU scores above the majority of industry players on technology platform. We maintain buy with a target price of Rs 435, implying 2.1 times FY21E EV. We have a slight UW position on IPRU in our sector EAP," said the brokerage.

Volatility in equity markets and higher surrenders are key risks for the stock, the brokerage cautioned.