July 15 (Reuters) – ICICI Prudential Life Insurance reported a 27.8% rise in first-quarter profit on Wednesday, supported by strong premium growth from its high-margin products.
The Indian insurer posted a profit after tax of 3.86 billion rupees ($40.11 million) for the three-month period ended June 30, a jump from 3.02 billion rupees billion rupees a year earlier.
Shares of the Mumbai-based insurer were up as much as 5.5% to 531.95 rupees, as of 02:05 pm IST.
Its value of new business, which measures expected profitability from new policies, stood at 5.71 billion rupees in the reported quarter, rising 24.9% year-on-year.
Annualised premium equivalent sales, a core measure of new business premiums, rose 14.6% to 21.36 billion rupees.
Investors and analysts closely watch operational metrics to gauge the health of new business.
For ICICI Prudential Life, analysts were focused this quarter on whether the insurer’s continued shift toward higher-margin non-participating and protection products could offset persistent headwinds from GST-related tax credit issues.
Prudential said it must cut its stake in the Indian insurer to below 10%, from about 22%, to secure regulatory approval for its planned 75% acquisition of Bharti Axa Life Insurance, which was announced in May.
Bernstein analysts warned that the resulting sale of nearly a 12% stake could create a supply overhang and weigh on ICICI Prudential Life’s shares.
Peers HDFC Life Insurance and SBI Life Insurance are yet to report their quarterly results.
($1 = 96.2300 Indian rupees)
(Reporting by Urvi Dugar and Surbhi Misra in Bengaluru; Editing by Sherry Jacob-Phillips)
