ICICI Prudential Life Insurance
BSE SENSEX
38,897
S&P CNX
11,588
15 July 2019
Update | Sector: Insurance
CMP: INR384
TP: INR475 (+24%)
Buy
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Transforming into more than just a play on capital markets
The trajectory in new business premium at ICICI Prudential Life (IPRU Life) seems to be
stabilizing as the company reported ~5.3% YoY APE growth in 1QFY20 as against flattish
growth in FY19. Higher new business strain driven by rising mix of the protection
business and associated advertisement & marketing cost impacted earnings growth in
FY19. We estimate earnings growth to turn positive at 9% CAGR over FY19-21 led by (a)
Protection business continuing to grow at a robust pace, thus driving margins, (b)
improved operating leverage aided by increasing use of technology, and, (c) recovery in
the core savings business. We estimate IPRU to report ~22% CAGR in VNB over FY19-21E
led by 17% CAGR in new business APE while operating RoEV is expected to sustain at
~19%. Maintain BUY with PT of INR475/share (2.3x Mar-21E EV).
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
During FY19, ULIP APE declined 2.7% YoY v/s an average 18% growth over FY17-
19. Protection business though has grown at ~62% YoY and its share in the total
APE improved to 9.3%. Though FY20 has started on a softer note, we believe that
introduction of new customer friendly ULIP product (Exhibit 33) and stable
market performance should drive ULIP sales over FY19-21E while the growth in
Financials & Valuations (INR b)
Y/E MARCH
FY19 FY20E FY21E
protection business remains robust.
Net Premiums
305.8 349.8 402.8
Surplus / Deficit
12.3 14.8 14.6
Sh. holder's PAT
11.4 12.2 13.4
New bus.gr-unwtd (%) 12.5 15.0 17.0
New bus gr-APE (%)
-3.0 15.4 19.2
NBP margin (%)
17.0 18.5 19.6
RoE (%)
16.4 16.5 16.6
RoEV (%)
15.1 16.4 16.5
VNB(INRb)
13.3 15.6 19.7
EV per share
151 175 205
Valuations
P/EV (x)
2.6
2.2
1.9
P/EPS (x)
48.4 45.3 41.1
Shareholding pattern (%)
As On
Mar-19 Dec-18 Mar-18
Promoter
75.0
78.7
80.7
DII
6.5
4.6
3.7
FII
10.1
8.6
6.5
Others
8.4
8.1
9.1
FII Includes depository receipts
IPRU IN
1,435
551.9 / 8
428 / 278
8/4/0
705
25.0
APE growth showing recovery signs after volatile FY19
VNB margins to expand on back of rising protection mix & cost-control
Protection new business premium mix has improved from 4.6% to 20.6% over
FY16-19. Retail Protection and Credit Life forms ~61%/~22% of the total
Protection APE, enabling IPRU Life to report robust margins in the Protection
business with VNB from protection business constituting ~59% of total VNB. We
conservatively estimate VNB margins to increase ~260bp to 19.6% by FY21E.
Improving persistency and benign rate environment to boost EV growth
In FY19, IPRU displayed improved persistency across cohorts (barring 25
th
month)
despite markets being volatile. With improving customer awareness and product
proposition, we expect persistency ratios to improve further, thereby aiding
margin expansion and EV growth. As per the sensitivity analysis, IPRU life would
witness ~2%/4% improvement in EV/VNB for every 100bp decline in interest rates
whereas EV/VNB would improve by ~1%/9% for every 100bp decline in lapse rate.
Higher strain to remain a drag; estimate 9% earnings CAGR over FY19-21E
Over FY15-19, IPRU Life reported 20% CAGR in EVOP led by robust VNB growth.
However, higher new business strain driven by rising mix of protection and sales
related expenses impacted earnings growth. Improvement in operating cost (11%
Stock Performance (1-year)
ICICI Pru Life
Sensex - Rebased
decline in staff count) and increased operating leverage will enable 9% earnings
CAGR over FY19-21E.
440
400
360
320
280
Valuation and view
We estimate ~22% CAGR in VNB over FY19-21E led by 17% CAGR in new business
APE while operating RoEV is expected to sustain at ~19%. We thus estimate VNB
margins to recover to ~19.6% by FY21E while operating metrics improve further.
Despite outperformance over the recent months the stock is still trading at
attractive levels of 1.9x FY21E P/EV (LTA of 2.5x) and thus offers 24% upside to
our fair value of INR475/share (2.3x Mar-21E EV).
Maintain Buy.
Research Analyst: Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com); +91 22 6129 1542 |
Parth Gutka
(Parth.Gutka@motilaloswal.com)
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com);
Himanshu Taluja
(Himanshu.Taluja@motilaloswal.com);
Yash Agarwal
(Yash.Agarwal@motilaloswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
APE growth showing recovery signs after volatile FY19
Retail APE declined 2.2% YoY in FY19; FY20 YTD total APE growth stands at
modest ~5.3% YoY
During FY19, IPRU Life reported muted business performance, primarily led by
decline in the ULIP business on volatility in the markets. ULIP APE (79.6% of the total
APE) declined 2.7% in FY19 v/s an average 18% growth over the past three years.
The growth in the Protection business; however, stood robust (~62% YoY growth
during FY19) and the segment’s share in the total new business APE improved by
533bp over the past two years to 9.3%.
Exhibit 1: Premium grew at 19% CAGR over FY15-19
Net Premium income (INRb)
23%
25%
21%
17%
14%
8.4%
-2.2%
151.6
FY15
190.0
FY16
221.6
FY17
268.1
FY18
305.8
FY19
46.77
FY15
50.7
FY16
65.18
FY17
75.78
FY18
74.1
FY19
Growth (YoY, %)
Exhibit 2: Retail APE declined 2.2% YoY during FY19
Retail APE (INRb)
28.6%
16.3%
Growth (YoY, %)
Source: Company, MOFSL
Source: Company, MOFSL
Business performance to improve as market volatility reduces
IPRU Life has reported higher new business APE growth than NIFTY index over FY16-
18, but the growth range has moved in line with the market movement. Volatile
market conditions and political outlook worries affected the growth trend in FY19,
reporting flattish APE growth in FY19. Though FY20 started on a softer note, the
company has reported ~5.3% YTD growth in the total APE. However, the decisive
election mandate and the government’s focus on continued economic reforms
should assuage the uncertainty around capital markets. This along with introduction
of new products in the ULIP segment should help revive growth trends in the core
ULIP business. The Protection business continues to report robust growth trend. We
also expect IPRU Life to report a pick-up in overall business performance as it further
diversifies and re-invents itself from just being a play on the capital markets.
Exhibit 3:
Except FY19, IPRU’s new business APE growth has been better than Nifty index performance
12,000
10,500
9,000
7,500
6,000
FY15
Nifty gr : 27%
NBP gr : 42%
FY16
Nifty gr : - 9%
NBP gr : 27%
Total APE gr : 9%
FY17
Nifty gr : 19%
NBP gr : 15%
Total APE gr : 28%
FY18
Nifty gr : 10%
NBP gr : 16%
Total APE gr : 18%
FY19
Nifty gr : 15%
NBP gr : 12%
Total APE gr : 0%
Source: Company, MOFSL
15 July 2019
2
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
ULIPs remain the dominant business segment
Mix of Non-PAR segments improving
The share of ULIP in total APE has declined 444bp over FY17-19 to 79.6% due to
subdued market performance and continued focus on building the Protection
business. During FY17-19, proportion of Non-PAR segments (on NBP) improved
743bp to 14.9% whereas on total APE basis, Non-PAR segments gained ~546bp and
currently form ~11.8% of total APE. This has supported healthy expansion in new
business margins from 10.1% in FY17 to 17.0% in FY19. We estimate growth in the
ULIP business to revive, while the mix of the Non-PAR segments to improve further.
on the back of robust protection business growth
Exhibit 4: ULIP mix declines 393bp YoY to 76.3% in FY19
ULIPs
6.6%
11.5%
PAR
7.5%
10.2%
Non-PAR
11.8%
8.0%
14.9%
8.8%
Exhibit 5: Non-PAR segment mix improves to 11.8%
ULIP
1.6%
13.2%
PAR
Non- PAR savings
3.9%
9.6%
Non- PAR Protection
5.7%
10.9%
9.3%
8.6%
2.7%
14.1%
22.0%
16.0%
61.9%
81.9%
82.3%
80.2%
76.3%
83.1%
80.8%
84.1%
81.9%
79.6%
FY15
FY16
FY17
FY18
FY19
FY15
FY16
FY17
FY18
FY19
Note: Based on new business premium
Source: Company, MOFSL
Note: Based on total APE
Source: Company, MOFSL
Within the Protection
business, NBP for
Credit Life segment
has grown at ~109%
CAGR over FY16-19
and constituted 71% of
the total Protection
NBP in FY19 as against
53% in FY16.
Protection business grows at ~90% CAGR over FY16-19; Retail forms ~60%
of total Protection APE
Protection new business received premium grew at ~90% CAGR over FY16-19 and
protection mix in the NBP improved from 4.6% to 20.6% over a similar period. On
APE basis, Retail Protection and Credit Life form ~61%/~22% of the total Protection
APE. This has enabled IPRU to report robust margins in the Protection business
(109% during FY19) with value of new business in the Protection business
constituting ~59% of total VNB.
Exhibit 7: Retail business ~60% of total Protection APE
Exhibit 6: Protection APE grew at 73% CAGR since FY16
Protection APE (INRb)
83%
87%
72%
62%
Growth (YoY, %)
14.4%
7.2%
Retail protection
Group Term
60.6%
Credit life (ICICI group)
Credit life (Others)
17.8%
1.4
FY16
2.6
FY17
4.5
FY18
7.2
FY19
Source: Company, MOFSL
Source: Company, MOFSL
15 July 2019
3
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Exhibit 8: Protection NBP forms 21% of total un-weighted premium in FY19
Total NBP received
NBP received (Total Protection business)
Protection mix on NBP (reported, %)
NBP received (Credit life)
NBP received (Other products)
FY16
67,658
3,130
4.6%
1,650
1,480
FY17
77,604
6,710
8.5%
3,400
3,310
FY18
90,210
10,280
11.2%
5,810
4,470
FY19
101,360
21,370
20.6%
15,140
6,230
Source: Company, MOFSL
Exhibit 9: Protection business mix across insurers
FY16
FY17
FY18
FY19
Exhibit 10: Protection business mix (un-weighted) basis
FY16
FY17
FY18
FY19
IPRU life
Note: As a % of total APE
HDFC life
SBI life
Source: Company, MOFSL
IPRU life
Note: As a % of total NBP
HDFC life
SBI life
Source: Company, MOFSL
Exhibit 11: Retail Protection formed 60% of the total
Protection APE for FY18 …
Exhibit 12: Share of retail protection remained at ~60% in
FY19; share of Credit Life improved to 22% since FY18
1.28
18%
1.15
26%
Retail Protection
2.71
60%
Credit life
Group Term
1.57
22%
4.36
60%
Retail Protection
Credit life
Group Term
0.61
14%
Source: Company, MOFSL
Source: Company, MOFSL
IPRU Life is well positioned in terms of pricing on pure term plans
In our view, IPRU Life is well positioned to capture a greater pie of the protection
business, which should drive incremental profitability as it has access to a mass
affluent customer base coupled with wide presence in the banca and agency
channel. Also, IPRU Life’s pricing on pure terms plans is competitive as compared to
other listed players, and this, in our view, should augur well for the overall
Protection business going ahead. We estimate ~21% CAGR in Non-PAR APE over
FY19-21E on the back of management’s focus on Protection and the Credit Life
business; and expect the share of Non-PAR APE to inch up further.
15 July 2019
4
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Exhibit 13: Pricing of pure term plans across life insurers (Cover: INR10m, Up to: 70 years)
Claim
settled
(%)
98.6
99.0
98.7
96.8
98.0
92.0
99.1
96.2
97.4
96.5
96.4
94.5
Age : 30yrs
Monthly
Yearly
premium
Premium
(INR)
(INR)
1,068
12,502
1,073
12,478
893
10,148
1,282
15,070
NA
18,672
1,266
14,087
876
9,912
899
10,148
841
9,558
725
8,331
924
10,270
785
9,007
Age : 35yrs
Monthly
Yearly
premium
Premium
(INR)
(INR)
1,319
15,457
1,326
15,421
1,132
12,882
1,556
18,290
NA
27,249
1,550
17,227
1,073
12,154
1,141
12,878
1,111
12,626
945
10,867
1,144
12,709
995
11,419
Source: Company, MOFSL
Insurer
ICICI Prudential Life
HDFC Life Insurance Company Ltd
Max life Insurance
SBI Life Insurance
LIC
Bajaj Allianz life insurance
TATA AIA
PNB Met Life
Kotak Life
Aegon Life
Aditya Birla Capital
Aviva Life
Plan
I protect Smart
3D Plus Life option
Online Term Plus
e shield
e Term
e touch Online Term
Sampoorna Raksha
Mera Term Plan
Kotak e Term Plan
I Term
Ultima Term
I Term Smart
15 July 2019
5
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
VNB margins have improved 900bp to 17% over FY16-19
VNB margins to expand on back of rising protection mix and cost control
IPRU Life has reported sharp 900bp improvement in VNB margins over the past
three years (FY16-18) to a healthy 17% currently due to rising share of the
Protection business, focus on maintaining high retail mix and continued cost control.
But margin expansion in FY19 was a mere 50bp due to tepid business performance
and decline in operating leverage in the Savings business. Operating expense ratio
rose 76bp to 13.4% (of GWP) led by higher IT, advertisement and employee
expenses. During 4QFY19, the company reported segmental margins across its
Savings and Protection business. Thus, margins in the Protection business stood at
109% while in the Savings business, it was a weak 8% affected by tepid business
volumes.
Management is focusing on
doubling VNB growth over the
next 3-4 years.
IPRU Life has delivered 49% CAGR growth in VNB over the past four years led by
sharp margin expansion of ~1,130bp. The company has guided for doubling its VNB
growth over the next 3-4 years, thus implying required CAGR of 24-26%. We expect
IPRU Life to report healthy 22% CAGR growth in VNB over the next two years, led by
continued improvement in the business mix, lower employee expenses and
improved operating leverage in the savings business.
Exhibit 15: Protection business forms ~59% of total VNB
Exhibit 14: Trends in VNB margins and protection mix
VNB Margin
Protection (%)
8.2
3.9
4.5
4.2
5.7
4.1
7.9
8.6
9.3
5.4
41%
7.9
59%
Protection (INRb)
Savings (INRb)
2.7
Note: As a % of total APE
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 16: IPRU Life has reduced the staff count by 11% in
FY19
Employee exp (INRb)
Employees (in 000s, RHS)
Exhibit 17: Share of advertisement expenses increased to
35% led by 103% YoY growth in FY19
Employee cost
Advt & sales cost
Other cost
28%
35%
37%
FY19
Source: Company, MOFSL
30%
22%
47%
FY14
FY15
FY16
FY17
FY18
FY19
FY18
Source: Company, MOFSL
15 July 2019
6
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
The growth in IT expenses was in line with the management’s aim of enabling a
single digital platform to provide ease and simplicity to the customers. It
encompasses the customer’s journey from the time of analyzing life-stage-based-
needs, understanding risk appetite, quote generation till the post sales servicing of
queries. The turnaround time for various internal processes has come down
drastically post the introduction of digital initiatives (Exhibit: 18).
Exhibit 18: Introduction of digital initiatives has led to faster
turnaround time
Quantitative success metrics
Policy turnaround time
Self-help adoption
Same day closure of
customer request
Login to issuance ratio
Non-medical issuance
turnaround time
Pre Digital
4 days
in FY13
65%
in FY17
65%
in FY17
91%
in FY12
2 days
in FY10
Post Digital
4 hours
in FY19
75%
in FY19
79%
in FY19
96%
in FY19
2-4 hours
in FY19
Exhibit 19: IPRU Life reported sharp rise in IT expenses in
FY19
IT exp (INRm)
YoY growth (%)
268%
26%
33%
-62%
Source: Company, MOSL
FY16
FY17
FY18
FY19
Source: Company, MOSL
Assessing margin trajectory - implied margins would have been significantly
higher but for lower growth in FY19!
In FY19, margins in the core Savings business moderated significantly due to higher
operating expenses and muted business volumes. Our analysis of attributing FY18
segmental margins to FY19 APE highlights the gap between reported VNB margin
and the implied margin based and the gap stands at huge 357bp. Thus, it points
towards the extent of margin expansion that can occur as growth returns and
operating leverage in the savings business improves. However, this is to be seen
only as an indicative analysis as IPRU has launched newer and competitive customer
friendly ULIP products, which returns premium allocation charge and provides other
value benefits to customers (Exhibit
33)
while margins in protection business also
can moderate owing to increasing competitive intensity.
Exhibit 20: VNB margin assessment attributing the same segmental margins as FY18
APE mix (%)
Savings (%)
Protection (%)
Savings NBM (%)
Protection NBM (%)
NBM calc. under above assumption
Reported NBM (%)
Margin Differential
FY18
94%
6%
10%
125%
16.5%
16.5%
0.0%
FY19
FY19
(based on FY18
margins)
91%
91%
9%
9%
8%
10%
109%
125%
17.0%
20.6%
17.0%
17.0%
0.0%
3.6%
Source: Company, MOFSL
15 July 2019
7
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Improving persistency and benign rate environment to boost EV
growth
Retail-linked surrenders decline 21% YoY to ~INR92b
During FY19, IPRU displayed improved persistency across all cohorts (barring the
25th month) despite markets being volatile. With rising customer awareness and
improved product proposition, we expect persistency ratios to improve further,
thereby aiding margin expansion and EV growth. This improvement in persistency
was enabled by 21% YoY decline in retail-linked surrenders, thus enabling the
company to report cumulative positive persistency variance of INR5.2b since FY17.
With rising customer awareness and improved product proposition, we expect
persistency rate to improve further across all cohorts, thereby aiding further margin
expansion and EV growth.
Exhibit 21: Persistency ratios have improved steadily
13th Mth
49th Mth
25th Mth
61st Mth
37th Mth
93%
Exhibit 22: Surrenders as % of claims have declined to 73%
Surrenders (INRb)
92%
89%
78%
73%
73%
Surrenders ( % of total claims)
113
FY15
FY16
FY17
FY18
FY19
FY14
113
FY15
112
FY16
118
FY17
128
FY18
106
FY19
Note: Including single premium
Source: Company, MOFSL
Note: Out of the total surrenders, retail linked surrenders have
declined to 87% from 91% in FY17
Source: Company, MOFSL
Exhibit 23: Customer complaints has reduced to 72 (per
10,000 policies) from 142 in FY14
253
185
Exhibit 24: Claim settlement ratio has improved by 477bp
since FY15 to 98.6%
153
95
92
72
93.8%
96.2%
96.9%
97.9%
98.6%
Source: Company, MOFSL
Source: Company, MOFSL
15 July 2019
8
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Higher new business strain to remain a drag
Estimate modest 9% earnings CAGR over FY19-21 v/s 30% decline in FY19
Cost ratios deteriorated 145bp
in FY19 (%)
Commission ratio (on wrp)
Opex ratio (on wrp)
3.8
3.5
3.6
5.5
11.2
5.6
11.3
10.8
8.0
9.3
FY15 FY16 FY17 FY18 FY19
Over FY15-19, IPRU Life reported 20% CAGR in EVOP led by robust VNB growth.
EVOP as a % of opening EV expanded to 20.2% in FY19 v/s 15.4% in FY15. However,
the higher new business strain driven by rising mix of the Protection business and
the associated advertisement and marketing cost impacted earnings growth.
Consequently, the company reported 9% CAGR decline in shareholder PAT during
the past four years, even as reported earnings declined 30% YoY to INR11.4b. This
was driven by 10% YoY decline in policyholder surplus to INR12.3b on account of
higher acquisition expenses. However, with recovery in the Savings business, even
as the Protection business continues to grow at a robust pace, and improved
operating leverage we estimate earnings growth to turn positive with 9% CAGR over
FY19-21. This will still continue to trail VNB growth as the company continues to
invest in further scaling up the Protection business.
Exhibit 26: Policyholder’s surplus declines due to higher
acquisition costs
Surplus / (Deficit)
15%
-8%
-30%
-20%
-10%
YoY Growth
27%
-4%
Exhibit 25: Leading to earnings decline of 30% YoY during
FY19
Sh.holder's PAT
4%
1%
2%
YoY Growth
16.3
16.5
16.8
16.2
11.4
11.6
FY15
13.4
FY16
10.7
FY17
13.6
FY18
12.3
FY19
Source: Company, MOFSL
Source: Company, MOFSL
IPRU life has the highest sensitivity to declining interest rates
According to the disclosures made by the company, IPRU Life’s VNB would have a
favorable impact to the tune of 4.4% if interest rates decline by 100bp whereas EV
would have a positive impact of 2%. Similarly 100bp improvement in persistency
would have positive impact of ~8.9% / 1% on VNB/EV which is far higher than peers.
15 July 2019
9
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Exhibit 27: Sensitivity analysis across major life insurers
Sensitivity analysis
+ 100bp in interest rates
- 100bp in interest rates
+100bp in lapse rates
-100bp in lapse rates
+100bp in acquisition expenses
-100bp in acquisition expenses
+100bp in maintenance expenses
-100bp in maintenance expenses
Changes in tax rate
IPRU life
change
change
in
in
IEV
VNB
-2.0%
-4.3%
2.0%
4.4%
-1.3%
1.4%
Nil
Nil
-0.9%
0.9%
-4.0%
-8.5%
8.9%
-13.0%
13.0%
-3.6%
3.6%
-7.5%
HDFC life
change
change
in
in
IEV
VNB
-1.7%
-0.4%
1.6%
0.2%
-1.4%
1.5%
NA
NA
-0.7%
0.7%
-6.6%
-2.9%
3.0%
-18.1%
18.1%
-2.1%
2.1%
-13.8%
SBI life
change
change
in
in
IEV
VNB
-0.5%
0.3%
0.5%
-0.3%
-0.1%
0.1%
NA
NA
-0.1%
0.1%
-0.8%
-0.6%
0.6%
NA
NA
-0.2%
0.2%
-1.5%
Max life
change
change
in
in
IEV
VNB
-2.0%
7.0%
2.0%
-9.0%
-0.2%
0.2%
NA
NA
NA
NA
-12.0%
-0.4%
0.4%
NA
NA
NA
NA
-17.0%
Note: (a) Tax rates for IPRU life is 28.84% whereas for HDFC life, SBI life and Max life the tax rate is assumed to be 25%. (b) For SBI life, we
have pro-rated the sensitivities
Source: Company, MOFSL
15 July 2019
10
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Lower dividend payout to help preserve capital
RoEV to thus improve to 16.7% by FY21E
Insurance companies can
raise Tier-II capital up to
25% of the paid up
capital to meet solvency
ratio requirements.
IPRU Life has reported ~66% decline in solvency ratio over the past two years to
~215% currently. The company has also maintained high dividend payout. This,
along with dominant market share of the Savings business has resulted in a decline
in the solvency capital. The high dividend payout was also one of the reasons for
lower ROEVs, even as the operating RoEV improved sharply over recent years. IPRU
has lowered its dividend payout ratio in FY19, which will help it to conserve capital.
Moreover, insurance companies can raise Tier-II capital, up to 25% of the paid-up
capital to meet solvency ratio requirements, which will help them maintain business
growth. We estimate operating RoEV to sustain at healthy levels of ~18.5% and new
business margins to improve further to ~19% by FY21E (17% in FY19). The
continuous improvement in operating metrics along with lower dividend payout will
help boost EV growth to 17% CAGR over FY19-21E.
Exhibit 29: RoEV’s are expected to improve to 16.7% by
FY21E
Operating ROEV (%)
ROEV (%)
Exhibit 28: Lower dividend payout ratio will help conserve
capital
Solvency (%)
88%
74%
61%
40%
48%
Dividend payout (%)
337%
FY15
320%
FY16
289%
FY17
252%
FY18
215%
FY19
FY15
FY16
FY17
FY18
FY19
FY20E
FY21E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 30: EVOP has grown at 20% CAGR during FY15-19
EVOP (INRb)
EVOP (as a % of Op. EV)
22.8%
15.4%
15.3%
16.4%
20.2%
19.1%
18.7%
Exhibit 31: VNB as a % of opening EV has improved to 7.1%
in FY19
VNB (INRb)
VNB (as a % of opening EV)
7.9%
4.7%
2.3%
3.0%
4.1
6.6
12.9
13.3
15.6
19.7
7.1%
7.2%
7.8%
18.1
21.2
22.8
36.8
38.0
41.4
47.2
2.7
Source: Company, MOFSL
Source: Company, MOFSL
15 July 2019
11
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Valuations and view
We believe the life insurance sector in India is in a sweet spot, where strong
structural potential is now overlapping with the rising share of financial savings
and higher disposable income. We expect Indian insurers to trade at a premium
to global insurers.
Private sector life insurance companies have 51% market share in total new
business APE, and IPRU is amongst the leading players. Favorable demographics,
increasing customer awareness about financial products, strong distribution
network and superior brand image should help IPRU sustain WRP CAGR at 15%
over FY19-21E.
Shift towards balanced product segments to reduce volatility:
IPRU Life has
taken a strategic call to move towards balanced product categories and mass
affluent customer segments, which should help reduce volatility in the business.
Also, in our view, IPRU is well positioned to capture a greater pie of the
Protection business, which should drive incremental profitability as it has access
to a mass affluent customer base coupled with a wide presence in the banca
channel.
Valuation and View:
We estimate ~22% CAGR in VNB over FY19-21E led by 17%
CAGR in new business APE while operating RoEV is expected to sustain at ~19%.
We thus estimate VNB margins to recover to ~19.6% by FY21E while operating
metrics improve further. Despite outperformance over the recent months the
stock is still trading at attractive levels of 1.9x FY21E P/EV (LTA of 2.5x) and thus
offers 24% upside to our fair value of INR475/share (2.3x Mar-21E EV).Maintain
Buy.
Exhibit 32: IPRU Life is trading at 1-year forward P/EV of 1.9x; below its long-term average
1 Yr Forward P/EV
3.5
3.0
2.5
2.0
1.5
Average
Avg + 1STD
Avg - 1STD
Source: Company, MOFSL
15 July 2019
12
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Exhibit 33: IPRU Life: Comparison of ULIP plans
Name of
the ULIP
Premium
Allocation
charges
IPRU
Signature
Single Pay : 3%
Limited and Regular Pay:
Yr 1 to 7 : 5%
Yr 8 to 9 : 2%
Yr 10 : 1%
As % of annualized premium
5yrs : 25%
7 Yrs: 35%
10yrs and above: 40%
(these additions will be made at
the end of the 10th policy yr and
the same amount will be added
back at the end of the 5th yr
thereafter)
Fund
1.35% across all
management
the funds
charges
0.75% for the money
market fund
Reduction
in Yield
Reduction in Yield (RIY)
at 8% invt return for
premium paying term
of 7 years with 100% of
investment in
Maximizer V funds.
RIY: Signature - Premier
(Annual Premium : 5 lacs )
End of the year:
10th : 1,76%
15th : 1.33%
30th : 1.09%
RIY: Signature - Premier
(Annual Premium : 10 lacs )
End of the year:
10th : 1,55%
15th : 1.19%
30th : 1.01%
1.35% across all
the funds
0.75% for the money
market fund
NA
1.35% across all
the funds
0.75% for the money
market fund
Reduction in Yield (RIY) :
1.35% across all
the funds
0.75% for the money
market fund
NA
Elite Life
Super
Single Pay : 3%
Limited and Regular Pay:
Yr 1 to 5 : 5%
Yr 6 to 7 : 3%
Thereafter : 2%
NA
Smart Life
Single Pay : 3%
Annual Pay:
Yr 1 : 6%
Yr 2: 5%
Yr3 : 4%
Yr 4 to 5 : 4%
Yr 6 onwards : 2%
NA
Guaranteed
Wealth Protector
Single Pay : 3%
Annual Pay:
Yr 1 : 6%
Yr 2: 5%
Yr3 : 4%
Yr 4 to 5 : 4%
Yr 6 onwards : NIL
NA
Return of
Premium
Allocation
charges
RIY: Smart Life - Regular pay
assumed at investment
return of 4% p.a
End of the year:
5th : 3.87%
10th : 1.61%
15th : 1.04%
30th : 0.79%
Source: Company, MOFSL
15 July 2019
13
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Financials and valuations: ICICI Prudential Life Insurance Company
Technical account (INR m)
Gross Premiums
Reinsurance Ceded
Net Premiums
Income from Investments
Other Income
Total income
Commission
Operating expenses
Total commission and opex
Benefits Paid (Net)
Chg in reserves
Total expenses
Provisions for doubtful debts
Surplus / deficit before tax
Prov for Tax
Surplus / Deficit
Shareholder's a/c (INR m)
Transfer from technical a/c
Income From Investments
Total Income
Other expenses
Contribution to technical a/c
Total Expenses
PBT
Prov for Tax
PAT
Growth
Premium (INR m) & growth (%)
New business prem - unwtd
New business prem - wrp
Total premium - unwtd
New bus. growth - unwtd
New business growth - wrp
Total prem growth - unwtd
Premium mix (%)
New business - unwtd
- Individual mix
- Group mix
New business mix - APE
- Participating
- Non-participating
- ULIPs
Total premium mix - unwtd
- Participating
- Non-participating
- ULIPs
Indi. Premium sourcing mix (%)
Individual agents
Corporate agents-Banks
Direct business
Others
FY17
223,540
(1,988)
221,553
149,769
188
371,927
7,589
23,572
31,161
149,979
174,976
356,115
4,288
11,523
788
10,735
FY17
11,315
6,669
18,270
409
18
427
17,843
1,028
16,815
2%
FY17
78,633
64,965
223,540
16.2%
27.2%
16.6%
FY17
88.7%
11.3%
9.5%
4.8%
85.7%
11.7%
13.6%
74.8%
FY17
23.5%
57.1%
12.8%
6.6%
FY18
270,688
(2,581)
268,107
112,615
936
382,172
14,033
20,299
34,332
172,808
154,475
361,615
5,727
14,830
1,201
13,630
FY18
10,892
7,419
18,362
420
753
1,173
17,189
997
16,192
-4%
FY18
92,118
75,417
270,688
17.1%
16.1%
21.1%
FY18
91.2%
8.8%
10.6%
5.0%
84.4%
12.0%
12.8%
75.2%
FY18
25.6%
52.6%
16.0%
5.8%
FY19
309,298
(3,515)
305,783
102,144
5,562
414,003
15,513
26,053
41,566
142,591
210,030
394,187
6,351
13,465
1,132
12,333
FY19
10,770
6,443
17,307
422
5,272
5,694
11,612
223
11,389
-30%
FY19
103,644
73,171
309,298
12.5%
-3.0%
14.3%
FY19
78.5%
21.5%
9.0%
9.0%
82.0%
11.4%
15.2%
73.4%
FY19
21.8%
55.2%
16.7%
6.3%
FY20E
353,314
(3,562)
349,752
188,998
1,756
540,506
20,280
31,221
51,501
156,335
311,292
519,127
4,707
16,671
1,917
14,753
FY20E
11,353
6,960
18,416
443
5,008
5,452
12,965
778
12,187
7%
FY20E
119,190
84,406
353,314
15.0%
15.4%
14.2%
FY20E
83.0%
17.0%
9.1%
8.1%
82.8%
13.2%
20.2%
66.6%
FY20E
22.8%
55.0%
17.7%
4.6%
FY21E
406,918
(4,152)
402,765
213,661
1,963
618,389
22,958
35,858
58,816
177,570
360,660
597,047
5,316
16,027
1,424
14,603
FY21E
12,025
8,025
20,164
474
5,109
5,583
14,582
1,167
13,415
10%
FY21E
139,452
100,621
406,918
17.0%
19.2%
15.2%
FY21E
85.0%
15.0%
11.1%
9.5%
79.3%
13.9%
20.8%
65.3%
FY21E
23.8%
54.8%
17.5%
4.0%
15 July 2019
14
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Financials and valuations: ICICI Prudential Life Insurance Company
Balance sheet (INR m)
Sources of Fund
Share Capital
Reserves And Surplus
Shareholders' Fund
Policy Liabilities
Prov. for Linked Liab.
Funds For Future App.
Current liabilities & prov.
Total
Application of Funds
Shareholders’ inv
Policyholders’ inv
Assets to cover linked liab.
Current assets
Total
Operating ratios (%)
Investment yield (%)
Commissions / GWP
- first year premiums
- renewal premiums
- single premiums
Operating expenses / GWP
Total expense ratio
Claims / NWP
Solvency margin
Persistency ratios (%)
13th Month
25th Month
37th Month
49th Month
61st Month
Profitability ratios (%)
New business margin (%)
RoE (%)
RoIC (%)
EVOP as % of IEV
RoEV (%)
Valuation ratios
Total AUMs (INRb)
- Of which equity AUMs (%)
Dividend (%)
Dividend payout ratio (%)
EPS (INR)
VNB (INRb)
EV (INRb)
EV/Per share
VIF as % of EV
P/VIF
P/AUM (%)
P/EV (x)
P/EPS (x)
FY17
14,354
46,976
64,060
251,695
839,365
6,042
28,365
1,247,408
66,349
270,674
878,783
28,657
1,247,408
FY17
13.0%
3.4%
7.3%
2.0%
0.6%
10.5%
13.9%
67.7%
289%
FY17
85.7%
73.9%
66.8%
59.3%
56.2%
FY17
10.1%
28.7%
34.8%
16.4%
16.0%
FY17
1,229
47%
74%
40%
11.7
6.6
161.7
112.7
58%
5.9
45%
3.4
32.8
FY18
14,355
51,382
68,818
309,934
923,124
8,780
34,479
1,418,187
77,466
332,889
975,020
27,142
1,418,187
FY18
8.1%
5.2%
13.9%
1.9%
1.9%
7.5%
12.7%
64.5%
252%
FY18
86.8%
78.3%
68.8%
64.2%
54.5%
FY18
16.5%
24.4%
33.4%
22.8%
16.1%
FY18
1,395
48%
68%
74%
11.3
12.9
187.8
130.8
63%
4.7
40%
2.9
34.1
FY19
14,358
54,353
70,423
385,524
1,036,999
10,344
36,641
1,630,859
79,861
400,712
1,109,458
33,368
1,630,859
FY19
6.4%
5.0%
16.0%
1.9%
1.4%
8.4%
13.4%
46.6%
215%
FY19
87.4%
78.0%
71.3%
65.2%
57.6%
FY19
17.0%
16.4%
23.5%
20.2%
15.1%
FY19
1,604
48%
49%
74%
8.0
13.3
216.1
150.6
66%
3.9
34%
2.6
48.4
FY20E
14,358
60,657
76,898
691,012
1,209,309
11,895
43,957
2,052,432
87,848
711,299
1,209,309
35,500
2,052,432
FY20E
9.8%
5.7%
19.4%
1.8%
1.1%
8.8%
14.6%
44.7%
197%
FY20E
87.8%
78.5%
71.1%
67.0%
58.4%
FY20E
18.5%
16.5%
25.1%
19.1%
16.4%
FY20E
2,008
49%
34%
48%
8.5
15.6
251.6
175.3
68%
3.2
27%
2.2
45.3
FY21E
14,358
68,535
84,964
954,893
1,318,147
13,678
52,733
2,444,706
96,632
982,501
1,318,147
37,793
2,444,706
FY21E
9.3%
5.6%
18.3%
1.8%
1.1%
8.8%
14.5%
44.1%
171%
FY21E
88.0%
78.8%
71.4%
66.8%
59.8%
FY21E
19.6%
16.6%
27.6%
18.7%
16.7%
FY21E
2,397
50%
32%
41%
9.3
19.7
293.7
204.6
70%
2.7
23%
1.9
41.1
15 July 2019
15
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
NOTES
15 July 2019
16
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products.
MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on
www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading
Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity
& Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository
Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory &
Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are available on the
website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should
be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant
banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from
MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or
use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong
Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act"
and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and
investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for
distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document
relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule
15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order
to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities
International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in
respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of
which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
15 July 2019
17
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)
discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of
MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature.
The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed,
in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose
and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report
constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities
discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives,
financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document
should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including
the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be
suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade securities - involve substantial
risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions
contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as
endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and
alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from time to time, effect
or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment
banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a separate, distinct and
independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already
available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the
views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other
person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of
or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject
MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category
of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors,
employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may
arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any
and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold
MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person accessing this information due to any
errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management
Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of
Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a
group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory
services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee
of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj
Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
15 July 2019
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