ICICI Prudential AMC Q3 VNB Margin Steady At 24.4%; Motilal Oswal Maintains 'Buy' Rating

ICICI Prudential AMC has maintained steady performance in its insurance business, with the Value of New Business (VNB) margin remaining stable at 24.4% during the third quarter. This consistency in margin performance reflects the company's disciplined approach to product mix and pricing strategies.

Brokerage Maintains Positive Outlook

Motilal Oswal has reiterated its 'Buy' rating on ICICI Prudential AMC, expressing confidence in the company's long-term growth trajectory. The brokerage firm has identified several key factors that are expected to drive the company's profitability in the coming periods.

Growth Drivers Supporting Future Performance

The investment firm highlighted multiple catalysts that could enhance ICICI Prudential AMC's financial performance:

Growth Driver	Impact Area
GST Exemption	Higher business volumes
Non-linked Products	Increased customer traction
Product-level Margins	Improved profitability

Volume Expansion Through GST Benefits

The GST exemption is anticipated to contribute to higher business volumes, providing the company with opportunities to expand its customer base and increase premium collections. This regulatory advantage positions ICICI Prudential AMC favorably in the competitive insurance market.

Non-linked Product Portfolio

The growing traction of non-linked insurance products represents another significant opportunity for the company. These products typically offer better margins and more predictable revenue streams compared to traditional linked products, supporting overall profitability improvements.

Margin Enhancement Strategy

The company's focus on improving product-level margins across its portfolio demonstrates a strategic approach to profitability optimization. This initiative, combined with the other growth drivers, is expected to create a positive impact on the company's long-term financial performance and market position.

Systematic investment plans (SIPs) and diversified mutual funds are expected to remain in focus throughout 2026 as investors navigate sustained market volatility, according to Chintan Haria, Principal – Investment Strategy at ICICI Prudential AMC. His outlook emphasizes the continued appeal of process-driven investing strategies that offer built-in diversification and professional management.

SIPs and Mutual Funds Provide Stability Amid Volatility

Haria believes that periods of market swings highlight the benefits of systematic investing approaches. Mutual funds offer built-in diversification and professional management, while SIPs allow consistent participation without the need to time market entries or exits. This approach contrasts with trading strategies that depend heavily on timing, whereas long-term, diversified investing aligns better with goal-based wealth creation.

The investment strategy expert notes that process-driven investing becomes particularly valuable during uncertain market conditions, providing investors with a structured approach to wealth building.

Understanding SIP Stoppages in Market Context

Addressing concerns about SIP discontinuations, Haria clarifies that pauses in SIP contributions often rise during volatile periods but frequently stem from routine or temporary reasons. These include:

Changing bank mandates
Platform switches
Merging multiple SIPs
Adjusting investment sizes
Cashflow requirements including EMIs and tax obligations
Job changes

"Stopping a SIP does not necessarily mean investors are withdrawing funds. Net SIP flows and the duration of continued investments give a clearer picture," Haria explained. This perspective suggests that temporary SIP halts should not be interpreted as negative market sentiment.

Passive Instruments as Behavioral Stabilizers

Index funds and ETFs serve as behavioral stabilizers rather than substitutes for equity trading, according to Haria. These instruments provide low-cost, transparent, and rule-based exposure without the complexity of stock selection or timing decisions. Precious metal ETFs offer additional diversification and psychological comfort during periods of equity drawdowns or inflation concerns.

The allocation strategy depends on investor risk profiles:

Investor Type	Strategy
Aggressive investors	Higher direct equity exposure with index funds as core holdings
Conservative investors	Greater reliance on index and precious metal ETFs for risk control

Expected Product Focus Areas for 2026

Haria anticipates several categories of investment products will gain attention in 2026. Broader indices such as the Nifty 500, offering wider representation across market segments, and the Nifty Next 50, blending stability with growth potential, are expected to draw increased focus.

Factor-based indices focusing on low-volatility, quality, and momentum strategies are likely to see wider adoption as investors seek smoother equity participation and rules-based exposure. Gold and silver ETFs will continue acting as structural diversifiers rather than primary return drivers, providing balance in increasingly market-linked portfolios.

"The question is not whether to invest in these instruments, but how much. Their value lies in helping investors make consistent, reliable decisions over time, especially amid market volatility," Haria concluded. This approach emphasizes the importance of appropriate allocation rather than complete avoidance of passive investment strategies.