ICICI Prudential Life Insurance has received a revised research rating from Goldman Sachs, with the global investment bank maintaining its neutral stance while adjusting the target price downward.

Goldman Sachs Rating Update

The investment bank has retained its neutral rating on ICICI Prudential Life Insurance while cutting the target price to ₹690.00 per share. This revision represents Goldman Sachs' updated assessment of the life insurance company's stock valuation.

Market Implications

The neutral rating suggests that Goldman Sachs analysts view the stock as fairly valued at current levels, neither recommending it as a strong buy nor advising investors to sell. The target price reduction to ₹690.00 indicates a more conservative valuation approach by the brokerage firm.

This research update comes as part of Goldman Sachs' ongoing coverage of the Indian life insurance sector, where ICICI Prudential Life Insurance operates as one of the leading private sector players. The revised target price provides investors with Goldman Sachs' updated fair value assessment for the company's shares.

ICICI Prudential Life Insurance delivered a strong December quarter performance, demonstrating remarkable margin resilience that successfully offset challenges from soft premium growth and GST-related headwinds. The insurer's ability to maintain stable profitability amid regulatory changes has drawn positive attention from leading brokerages, who see the quarter as a margin-led positive surprise.

Strong Financial Performance Despite Headwinds

The company's financial metrics for Q3 showcased mixed but overall positive trends, with profit growth compensating for revenue pressures.

Stock Performance and Market Reaction

Shares of ICICI Prudential Life Insurance remained in focus following the strong quarterly results. The stock ended 2.16% lower at ₹699.25 on BSE, after hitting a high of ₹700.15 in early trade, representing a 2% gain from the previous close of ₹684.05. Despite the day's decline, the stock has largely received positive reactions from brokerages.

Margin Resilience Drives Brokerage Optimism

The standout performance came from VNB margin expansion, which demonstrated the company's operational efficiency despite external pressures. VNB margin remained resilient at around 24%, slightly better than brokerage forecasts, while the 4% rise in annualised premium equivalent (APE) supported overall performance.

Jefferies noted that the GST impact was largely neutralised through better product mix, supportive yield curve, and tight cost control. The brokerage raised VNB estimates by 3-4% and expects 16% CAGR in VNB over FY26-28, arguing that steady growth could help the stock re-rate.

Persistency Challenges Remain Key Concern

Despite the positive margin story, persistency trends continued to present challenges across multiple timeframes.

While Jefferies flagged that persistency remains weak and could lead to a small negative variance in embedded value, brokerages remain optimistic about the company's ability to address these challenges through corrective actions.

Mixed Brokerage Outlook

CLSA highlighted strong 40% year-on-year growth in retail protection aided by GST removal, alongside pickup in ULIP and non-par sales. HSBC expects favourable base, robust demand and pickup in credit protection products to drive APE growth recovery.

However, some brokerages maintained cautious stances. Goldman Sachs retained its neutral rating but cut target price to ₹690, noting muted APE growth at 4% year-on-year. Nomura maintained neutral with ₹740 target, acknowledging good margin performance but expecting full-year VNB growth to remain in single digits.

Despite mixed views, most brokerages believe ICICI Prudential continues to trade at a 15-25% discount to peers, with consistent growth execution potentially driving gradual re-rating supported by margin stability and improving growth momentum.