The shares of this life insurance company fallen up to 10 percent after the company revenue plummeted by 82 percent YoY and also missed margins in Q3FY25.
With a market capitalization of Rs 84,010.90 crore, the shares of ICICI Prudential Life Insurance Company Ltd were trading at Rs 581.30 per share, increasing around 8.59 percent as compared to the previous closing price of Rs 635.90 apiece.
Reason for fall
The shares of the company have seen bearish movement after ICICI Prudential Life Insurance Company Ltd reported stable results in Q3FY25, revenue decreased by 82 percent on a quarter-on-quarter basis from Rs.25,158. crore in Q2FY25 to Rs.4,536 crore in Q3FY25. Further, revenue slipped by 82 percent year on year, from Rs 26,430 crore in Q3FY24 to Rs. 4,536 crore in Q3FY25.
The company’s net profit increased by 29 percent on a quarter-on-quarter basis, from Rs. 251 crore in Q2FY25 to Rs. 325 crore in Q3FY25. Further, net profit magnified significantly by 43 percent year on year from Rs. 227 crore in Q3FY24 to Rs. 325 crore in Q3FY25.
ICICI Pru Life reported weaker margins in Q3 FY25 due to a shift in product mix favoring low-margin linked and group savings businesses, despite growth in fund management and ULIP segments. VNB margin fell 220 bps QoQ to 21.2%, with no major cost changes.
Brokerage Views
Morgan Stanley assigned an ‘equal-weight’ rating to ICICI Prudential Life with a target price of ₹695. Despite stronger Annualized Premium Equivalent (APE) growth on a weak base, the company missed Value of New Business (VNB) forecasts in Q3.
After the margin miss, Morgan Stanley reduced its VNB estimates for FY25-27 by 2%. The brokerage assigned an “equal-weight” rating, citing volatility in performance, weaker margin delivery, and lower RoEV compared to peers as key factors behind the downgrade.
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Segment growth
In H1 FY2025, ICICI Pru Life’s APE grew 26.8% YoY to ₹44.67 billion, driven by strong segment growth: Annuity up 99.5%, Retail protection up 17.2%, Linked business up 54.5%. Agency and Direct channels saw APE growth of 45.7% YoY.
Strategic Focus
The company faces pricing pressures in group-term business due to heightened competition and is in discussions with partners on commission structures amid regulatory changes. Despite challenges in the partnership distribution channel, management remains optimistic about growth, expecting a rebound post-regulatory adjustments.
Company Snapshot
ICICI Prudential Life Insurance Company Ltd carries on the business of providing life insurance, pensions, and health insurance products to individuals and groups. The business is conducted in participating, non-participating, and unit-linked lines of business.
Written by Abhishek Singh
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