The Front Page 20250409
The Front Page 20250409
Top Gainers Price Chg 1d 1yr Top Losers Price Chg 1d 1yr Company CMP M.Cap Traded Val. 20D Avg. Chg
(Rs) (%) (%) (Rs) (%) (%) (US$ m) (US$ m) (US$ m) (%)
Jio Financial Se 225 5.3 (38.9) Power Grid Corp 289 (0.2) 2.8 Berger Paints India Ltd 536 7,226 14 5 199.1
Shriram Finance 641 4.5 25.8 Trent Ltd 4,767 0.6 22.2 LIC Housing Finance Ltd 566 3,602 29 10 187.9
Cipla Ltd 1,433 3.5 (1.2) Indusind Bank 680 0.6 (56.3) Titan Co Ltd 3,122 32,078 108 42 157.3
Bharat Electron 281 3.4 23.4 Tata Consultancy 3,293 0.6 (15.2) Indraprastha Gas Ltd 180 2,919 20 9 130.3
Titan Co Ltd 3,122 3.3 (15.1) Tata Steel Ltd 130 0.6 (21.5) Siemens Ltd 2,763 11,389 91 43 112.0
Grasim Industries Ltd 2,590 20,396 39 19 105.3
Max Financial Services Ltd 1,132 4,522 23 11 104.8
Nifty MidCap 50
Biocon Ltd 322 4,478 16 8 101.0
Top Gainers Price Chg 1d 1yr Top Losers Price Chg 1d 1yr Coromandel International Ltd 2,063 7,036 29 14 99.9
(Rs) (%) (%) (Rs) (%) (%) Marico Ltd 678 10,166 26 13 95.2
Bse Ltd 5,538 6.9 101.7 Vodafone Idea Lt 7 (2.6) (44.4)
Pb Fintech Ltd 1,532 6.0 17.6 Astral Ltd 1,269 (1.4) (36.4)
Hindustan Petro 369 4.6 20.7 Tube Investments 2,569 (0.4) (26.4)
Sbi Cards & Paym 847 4.2 12.6 Max Healthcare I 1,073 (0.2) 29.6
Indus Towers Ltd 371 4.1 13.0 Fed Bank Ltd 191 (0.1) 22.3
Derivatives Segmental Data
Since last expiry (27-Mar-2025)
FII Change in OI (Contracts) Long/Short Ratio Client Change in OI (Contracts) Long/Short Ratio
1 Day Since Expiry Current At Expiry 1 Day Since Expiry Current At Expiry
FII Net Index Futures (1,514) (78,574) 0.3 0.7 Client Net Index Futures (2,895) 26,224 1.3 1.1
FII Net Stock Futures (8,015) (38,725) 1.8 1.8 Client Net Stock Futures 11,675 63,860 6.2 4.7
FII Net Index Call Options 192,267 377,728 1.8 1.6 Client Net Index Call Options (119,813) (219,522) 0.9 0.9
FII Net Index Put Options 205,347 410,392 2.1 1.7 Client Net Index Put Options (181,819) (397,887) 0.8 0.9
FII Net Stock Call Options (5,162) (150,261) 0.5 0.3 Client Net Stock Call Options 23,835 641,104 2.1 1.8
FII Net Stock Put Options (12,505) (28,010) 0.8 0.7 Client Net Stock Put Options 26,358 (91,297) 0.8 0.8
Prop DII
Prop Net Index Futures 1,873 31,268 0.9 0.4 DII Net Index Futures 2,536 21,082 3.8 2.4
Prop Net Stock Futures (20,062) 7,075 2.3 2.8 DII Net Stock Futures 16,402 (32,210) 0.1 0.0
Prop Net Index Call Options (72,605) (158,356) 0.9 1.0 DII Net Index Call Options 150 150 0.0 0.0
Prop Net Index Put Options (22,127) 632 0.9 0.9 DII Net Index Put Options (1,399) (13,137) 0.0 0.0
Prop Net Stock Call Options (3,780) (206,509) 0.7 0.6 DII Net Stock Call Options (14,893) (284,334) 0.0 0.1
Prop Net Stock Put Options (13,937) 119,223 1.3 1.3 DII Net Stock Put Options 84 84 0.0 0.0
Best Performers CMP Returns (%) OI Chg (%) Inference Worst Performers CMP (Rs) Returns (%) OI Chg (%) Inference
Bse Ltd 5,538 18.2 (21.2) Short Covering Vedanta Ltd 376 (20.4) (15.7) Long Unwinding
Gmr Airports Ltd 85 12.4 (10.2) Short Covering Coforge Ltd 6,473 (20.2) 21.1 Short Buildup
Tata Consumer Pr 1,070 9.9 (4.8) Short Covering Persistent Sys 4,595 (18.5) 85.8 Short Buildup
Indus Towers Ltd 371 9.5 (10.1) Short Covering Hindalco Inds 568 (18.0) 2.9 Short Buildup
Britannia Inds 5,179 7.0 6.6 Long Buildup National Alumin 147 (18.0) 15.1 Short Buildup
Berger Paints 536 6.7 (18.4) Short Covering Kpit Technologie 1,113 (16.6) 24.1 Short Buildup
Ramco Cement/The 934 5.8 (18.6) Short Covering Bharat Forge Co 970 (16.3) (20.4) Long Unwinding
BSE/NSE – Bulk Deals
Company Name of Acquirer / Seller Transaction Date Buy /Sale Quantity Price (Rs) Deal Size (Rs m)
Identixweb Vbcube Ventures Fund 8/4/2025 SELL 60,000 66.8 4
Identixweb Aarth.Aif Growth Fund 8/4/2025 SELL 100,000 66.8 7
Identixweb Craft Emerging Market Fund Pcc- Elite Capital Fund 8/4/2025 SELL 60,000 66.8 4
Sonata Software Ltd Tata Mutual Fund 8/4/2025 SELL 1,500,000 304.1 456
Earnings calls
Company Ticker Company Name Date Time Domestic Call Num Domestic Call Pin International Call Num International Call Pin
TARIL IN Equity Transformers & Rectifiers 8-Apr-25 16:30 91 22 6280 1342 18667462133
TCS IN Equity Tata Consultancy Services 10-Apr-25 17:30
TCS IN Equity Tata Consultancy Services 10-Apr-25 19:00 91 22 6280 1108 1 866 746 2133
ANANDRAT IN Equity Anand Rathi Wealth 11-Apr-25 14:00 91 22 6280 1112 0789240, 345215 18667462133 0789240, 345215
IPRU IN Equity ICICI Pru Life Insu 15-Apr-25 17:30 91 22 7115 8305 18667462133
ICICIGI IN Equity ICICI Lombard General Insu 15-Apr-25 19:30 91 22 6280 1341 18667462133
WPRO IN Equity Wipro 16-Apr-25 19:00 91 22 6280 1120 1 866 746 2133
HDFCAMC IN Equity HDFC AMC 17-Apr-25 17:00 91-22-6280 1551 18667462133
MAST IN Equity Mastek 21-Apr-25 09:00 91 22 6280 1107 1 866 746 2133
PSYS IN Equity Persistent Systems 24-Apr-25 08:00 91 22 48 798 004 16699009128 85706214442#
LTTS IN Equity L&T Technology Services 24-Apr-25 19:00 91 22 6280 1176 1866 746 2133
MPHL IN Equity Mphasis 25-Apr-25 08:30 91 22 6280 1165 18667462133
NAM IN Equity Nippon Life India AM 28-Apr-25 17:30 91 22 6280 1527
COFORGE IN Equity Coforge 5-May-25 17:00
CAMS IN Equity CAMS 6-May-25 11:00 +91 22 6280 1550 18667462133
Events Calendar – April 2025
Monday Tuesday Wednesday Thursday Friday Saturday
1 2 3 4 5
7 8 9 10 11 12
Mazgaon Dock TCS
Feb – IIP
Monetary Policy Monetary Policy Monetary Policy Mar - CPI
14 15 16 17 18 19
ICICI Lombard, ICICI Pru Life Wipro HDFC AMC, HDFC Life, Infosys Mastek HDFC Bank, ICICI Bank
IREDA
Mar - WPI
Mar Import/Export Mar – CPI (AL/RL)
21 22 23 24 25 26
Cyient DLM, HCL Tech, Bajaj Hsg Fin, LTIMindtree Cyient, Hind Unilever, Atul, Chola Inv, L&T Fin IDFC First Bank, India Cement
M&M Fin Serv L&T Tech, Mphasis, Nestle,
Persistent, Tech Mah
28 29 30
Castrol, CSB Bank, Cummins, Amara Raja, Bajaj Finance, CRISIL, Exide, Ujjivan SFB May 2 – Marico
KFin Tech, KPIT Tech, Bajaj Fins, CIE India, UTI AMC May 5 – CAMS, Coforge
Nippon AM, Ultratech May 6 – Kansai Nero
May 7 – Blue Star, Dabur
May 8 – Asian Paints, Biocon
May 9 – ABB, Dr Reddys,
Navin Fluorine
May 13 – Cipla
May 14 – BASF, Berger Paints,
Shree Cement
May 15 – Endurance
May 20 – Hindalco
May 23 – JSW Steel
May 27 – Bosch, Medplus,
TTK Prestige
Mar CPI (IW)
Black: Quarterly results, Blue: Economic data, Red: India Holiday
Events
Economics / • RBI’s Monetary Policy meeting | 5-7 Feb • RBI’s Monetary Policy meeting | May • RBI’s Monetary Policy meeting | Aug
Politics
• 3QFY25 Quarterly GDP • 4QFY25 Quarterly GDP • 1QFY26 Quarterly GDP
• India Budget | 1 Feb 2025
Auto • Auto volumes – 1day of the month • Auto volumes – 1day of the month • Auto volumes – 1day of the month
India - Insurance Outlook FY26
09 April 2025
Post regulatory chaos comes fundamental calm GI – GDPI growth to rebound; EOM compliance in focus: The
General Insurance sector has witnessed 7% growth YTDFY25 in GDPI,
DD MMM YYYY
We believe the insurance sector is ripe to outperform broader impacted by the change in accounting for long-term policies to 1/n w.e.f.
markets in FY26 as receding regulatory noise may help companies Oct-24, lower repricing in fire, absence of TP tariff hikes and pricing
focus on Premium/VNB/PAT growth and stocks could appreciate pressures in corporate health segments. We expect some of the drags to
on the back of healthy fundamentals. Underperformance in 2024 go behind us, leading to a rebound in growth. Pricing pressure in motor
was attributable to the regular introduction of various regulatory and corporate health may ease due to EoM compliance requirements by
changes, either proposed or speculated. With most of the FY26, fire repricing and 1/n accounting change would be in the base in
regulatory noise largely digested, and pending leadership change FY26/2HFY26 respectively and any TP tariffs would be a positive surprise.
at the regulator, we do not expect any fresh sweeping changes. ILOM and BAGIC would be market share gainers on the back of these
Life insurance companies should deliver healthy APE growth even developments, and we forecast them to deliver 15%/21% and 16%/18%
as volatile capital market and post surrender charges regulations, GDPI/PAT Cagr, respectively, over FY25ii-27ii. In standalone health,
growth may shift from ULIPs to traditional products again. VNB STAR may see healthy new business growth even as focus would remain
margins have bottomed out, driving a 16% VNB Cagr for our on improving loss/combined ratios through annual price hikes.
coverage over FY25ii-27ii. In non-life, EoM regulations will ensure
No fresh regulatory noise may bring relief: Insurance sector was
market share shift towards large non-life insurers including ILOM,
suffering from five potential regulatory changes at the beginning of FY25,
BAGIC, STAR and improving underwriting profitability. LI sector
(1) potential cap on banca, (2) surrender charges related impact, (3)
valuations are 20-30% below historical average and offer enough
composite license, (4) open architecture in agency, and (5) tax related
margin of safety. We prefer SBILI in the Life space; HDFCLI is a
changes. Within these, surrender charges have turned out to be no so
healthy compounding story but IPRU needs to balance growth and
material, no tax changes were proposed in the budget, cap on banca looks
margins. ILOM and STAR are trading attractively offering value.
speculative, and composite license plus agency open architecture may be
LI – ULIPs slow down, traditional pick up: For the past two years, on the backburner for the time being given changes in IRDAI. GST relief
ULIPs have been a key APE growth driver, driven by sanguine capital may come as a positive surprise. Hence, regulatory environment seems
markets. Traditional savings segment should now pick up post the to be turning benign with no fresh sweeping regulations proposed for
surrender charges regulations but companies may have to navigate the now. This could enable companies to focus on their business and
drag from moderation in ULIP growth due to heightened market volatility. improving growth and margins while benefitting from market share gains.
We forecast a 14% APE Cagr for our coverage in FY25ii-FY27ii.
Prefer SBILI and ILOM on attractive valuations: Valuations of
LI – Scope for margin improvement: Companies may witness steady insurance stocks remain below historical averages and have significant
margins with an upward bias going forward driven by favourable product scope to revert to mean given a healthy growth outlook in FY26ii and
mix as ULIPs slow down while high margin traditional and protection gradual easing of the regulatory overhangs. Within our coverage, we
segments pick up. Headwinds due to higher acquisition costs (EoM prefer SBILI (BUY) and ILOM (BUY) where we see a strong case for mean
regulations led) and surrender charges impact are largely behind. reversion. STAR (BUY) is trading at depressed valuations but needs to
Elevated commission ratios remain a concern for some private players execute better to achieve the potential re-rating. HDFCLI (ADD) remains
and a re-calibration of the cost structure would be required for VNB a healthy compounding story and should be added on corrections. IPRUs
growth to be faster than APE growth. We forecast 14%/16% APE/VNB (ADD) valuation is favourable but growth-margin balance needs to be
growth for our coverage companies. achieved for re-rating. BJFIN (ADD) valuations currently appear full.
LI: FY25: Regulations mask resilient growth Figure 3: ULIPs continued to drive APE growth for LI companies, driven by another
quarter of sanguine capital markets
Figure 1: The Indian Life Insurance Sector has underperformed the broader markets in 6 APE growth yoy (%)
of the last 7 CYs; macro uncertainty in CY25 makes LI a safe bet ULIP Non-linked Retail Protection Group
Annual market returns (%) 98%
80% 100% 78%
SBI Life Aggregate Life Insurance Sector* Nifty
61% 80% 64%
60% 40% 51%
60% 56%
34% 40% 42% 40%
40% 28% 30%
16% 18% 27% 21%
13% 10%
40% 32% 20% 2% 6% 8% 7% 3% 11%12% 2% 3% 6%
24% 20% 0% 11%
18% -1%
15% 16% -20% -9% -2%
20% 12% 14%
9% -11% -10%
5% 8% -40% -19%
3% 3% 4% 3% -29%
3% -60%
0% -46%
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 2
India - Insurance
LI: FY26 outlook: Back to fundamentals Figure 7: VNB margin expansion coupled with healthy APE growth should help drive 16%
VNB growth over FY25ii-27ii for the stocks under our coverage
Figure 5: We expect our coverage companies to deliver steady APE growth of 14% over
FY25ii-27ii VNB growth (YoY, %) FY24 FY25ii FY26ii FY27ii
20 17.8 17.2
APE growth (YoY, %) 14.4 15.8
FY24 FY25ii FY26ii FY27ii 13.8 12.8 12.5
15
20 9.5
17.3 10
15.0 15.6 15.9 14.8 4.4 3.1
13.6 14.3 5
15 12.0 12.7
-
9.6
10 (5)
4.7 (4.6)
(10)
5
(15)
- (20)
(0.3) (19.5)
(25)
(5) SBI Life ICICI Pru Life HDFC Life
SBI Life ICICI Pru Life HDFC Life
Source: Company, IIFL Research Source: Company, IIFL Research
Figure 6: We believe Life Insurers will be able to demonstrate ~40-100bps margin Figure 8: Given the sector has seen some correction in FY25, it is providing significant
expansion over FY25ii-27ii room for re-rating
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 3
India - Insurance
LI: ULIPs dominate but growth to moderate Figure 9: Companies under our coverage have witnessed increased traction in ULIPs;
however, we expect the rally to normalise
FY25 saw strong growth in ULIPs continuing, as investors looked to ULIP mix (%) Ipru SBI Life HDFC Life
capitalise on favourable capital market conditions. The buoyant stock
market played a crucial role in driving ULIP sales for the three listed 80
65 68 65
players, as they saw a yoy uptick in the share of ULIPs in all three 58 59 61
71
60 51 52 52
quarters in 9MFY25. However, over the last 3-4 months, the equity 47
44 43 49
markets have been witnessing a downturn, attributable to the various 51 52
macro developments. This downturn could have possibly caused a 40
39
45
43
liquidity crunch in the market, directly impacting the financial savings 40 41
37 33
27 20 33 34
of individuals. This is evident from muted premium growth delivered 20
26
30
by private sector insurers during February. We expect ULIP sales to 19 17 17 14
have normalised during 4Q due to the above-mentioned factors and 0
normalisation to continue during FY26 as well, given the continued 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
volatility in capital markets.
FY23 FY24 FY25
With some moderation expected in ULIP growth, we believe the Source: Company, IIFL Research
traditional savings segment (Par and Non-par) will take over some of
the load. Growth in the Par and Non-par savings segments has been Figure 10:We expect the share of ULIPs to gradually normalise, while traditional savings
largely modest during 9MFY25 for most private sector insurers due to should make up for some lost demand
the disruption caused by the changes in the surrender charges Industry Product Mix
regulations. Insurers are becoming more innovative and competitive
to drive growth, given the better margin profile offered by this Par Non-par ULIP Retail Protection Group
segment. Continued product launches and product innovation will also
100% 7% 9% 11% 11%
help attract customer interest within these segments. We believe 3%
12% 13% 13% 13% 11% 12% 11%
5% 4% 5%
these endeavours could help Par and Non-par segments to substitute 80%
7% 7% 6% 5% 5% 4% 5%
some of the lower demand from ULIP sales and expect their share in
38%
overall APE to improve gradually in the medium term, thereby 60% 68% 67% 55% 46% 48% 47% 53% 51% 51% 50%
supporting margin expansion. 40%
33%
3% 5% 15% 18% 21% 24% 24% 24% 25%
YTDFY25 also saw a continuation in strong demand for protection 20% 23%
products, with most companies recording mid- to high-double-digit 20% 14% 13% 16% 12% 13% 11% 10% 9% 9%
0% 9%
growth. Focus has also been on increased rider attachment.
FY25ii
FY26ii
FY27ii
9MFY25
FY18
FY19
FY20
FY21
FY22
FY23
FY24
Increasing awareness, rapid urbanisation, improved underwriting are
all causative to increasing adoption of protection products. Increasing
penetration of retail protection will be critical for APE growth and
margin expansion. Source: Company, IIFL Research
Note: Includes data for IPRU, HDFCLI, and SBILI
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India - Insurance
LI: Lot of regulatory noise in distribution Figure 11: Large life insurers remain dependent on Banca, while some players are
strategically diversifying by maintaining focus on other distribution channels
High dependency on Banca continues: Bancassurance continues Retail NBP (9MFY25, Mix %) SBILI HDFCLI IPRU AMAXLI BALIC
to be a key dependency for most large private sector insurers, Individual Agents 27% 17% 34% 20% 28%
contributing to more than half their total retail NBP during 9MFY25. Banks 61% 51% 29% 48% 31%
While SBILI’s distribution is dominated by its corporate tie-up with Direct Business 11% 23% 27% 22% 27%
its parent bank, it has witnessed a slowdown during 3QFY25, Corporate Agents (Non-bank) 2% 4% 2% 1% 4%
impacting overall business growth. HDFCLI’s banca channel
Others 0% 6% 8% 8% 10%
continues to witness healthy traction, with its share in HDFC Bank’s
Retail NBP (9MFY25 yoy growth, %) SBILI HDFCLI IPRU AMAXLI BALIC
business stabilising at 65%. IPRU’s diversified distribution
architecture saw broad-based growth across most segments, with no Individual Agents 36% 18% 25% 12% 6%
major dependency on a single partner. For BALIC, the Bancassurance Banks 1% 21% 25% 13% 7%
channel saw modest growth, with corporate agency and direct Direct Business 37% 11% 37% 36% 30%
distribution gaining traction. With Axis Bank now becoming a Corporate Agents (Non-bank) -13% -1% -31% 14% 54%
promoter for Axis Max Life, we see the addition of this ownership Others 38% 31% 16% 103% 68%
layer to translate into healthy growth numbers going forward. Most
Source: Company, IIFL Research;
life insurance companies have denied hearing anything from the
regulator pertaining to the media speculation around capping of
bancassurance channel and promoter share in business. We expect Figure 12:Banca continues to remain the largest channel of large life insurers, but focus
Bancassurance to continue to dominate life insurance distribution, and has been increasing towards agency and other forms of proprietary distribution
the segment could also see a pickup in growth as the speculation Private sector Retail NBP (%)
around capping of bancassurance fades out. Individual Agents Banks
Direct Business Corporate Agents (Non-bank)
Expansion of proprietary distribution a focus area: While the Others
bancassurance channel has been largely stable, a key driver of growth 4% 4% 4% 4% 4% 7% 6% 5%
for the large private sector life insurance companies has been healthy 100% 3% 3% 3% 3% 2%
3% 15% 4% 3%
12% 14% 16% 15% 13% 16% 19%
traction seen within proprietary distribution channels, which includes
Agency and Direct Distribution. Companies have been focusing on 50% 54% 54% 53% 55% 55% 53% 52% 49%
strategically expanding their Agency distribution channels, through
expansion of agency force, and going deeper into the Tier 2 and 3 28% 26% 25% 23% 23% 23% 23% 25%
0%
cities. The life insurance industry has added net 180k agents to the
9MFY25*
FY18
FY19
FY20
FY21
FY22
FY23
FY24
force during YTDFY25. The need for diversification and reducing
dependence on Bancassurance has led to renewed interest in this
channel. With talks around potential introduction of open architecture
Source: IRDAI, Company, IIFL Research;
in agency, it does provide an opportunity for players to expand their
* 9MFY25 includes data for IPRU, HDFCLI, SBILI, Axis MAX Life and BALIC as a proxy for private
agency footprint, although in the long run, it might cause more sector
disruption in the industry.
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India - Insurance
LI: Expanding beyond Tier 2 cities Figure 14: LIC has seen
FY24/9MFY25
a significant jump in its exposure to rural areas during
Contribution from
The expansion strategy for life insurance companies is designed to rural areas to retail FY19 FY20 FY21 FY22 FY23 FY24 9MFY25
cater not only to Tier 1 and 2 cities, but also to underserved Tier 3 NBP (%)
and 4 regions. These regions, traditionally underserved by the
LIC 13.4% 13.0% 10.8% 12.8% 13.0% 30.9% 52.7%
insurance sector, offer vast untapped potential due to rising incomes,
SBILI 16.2% 16.2% 18.6% 19.9% 21.4% 18.7% 20.0%
greater awareness of financial security, and changing attitudes
towards savings and investments. This has enabled them to record HDFCLI 10.7% 10.5% 11.6% 11.6% 11.9% 14.2% 16.7%
secular growth across Tier 1, 2, and 3 regions. Insurers are tailoring IPRU 8.3% 9.5% 10.8% 12.4% 11.1% 11.0% 12.3%
products to suit the needs of this population, offering affordable, easy- AMAXLI 19.9% 21.7% 19.0% 17.9% 15.5% 18.3% 4.4%
to-understand policies that align with local preferences. Moreover, BALIC 15.9% 17.7% 20.9% 19.6% 17.2% 20.4% 20.6%
with digitalisation playing a key role, insurers are leveraging Source: Company, IIFL Research
technology to bridge the distribution gap, providing seamless access Note: AMAXLI has reclassified its rural business starting 2QFY25, in accordance with the IRDAI Rural,
to services and facilitating better customer engagement. The push Social Sector, and Motor Third-Party Obligations Regulations, 2024. This has led to a much smaller
towards financial inclusion has led insurers to develop localised contribution from rural areas for 9MFY25 at 4.4%.
strategies, partnering with regional agents, utilising vernacular
languages, and adopting community-driven outreach programmes. Figure 15: SBILI has a lower dependency on Delhi and Maharashtra, while HDFCLI and
This strategic shift is seen as a long-term investment in market IPRU still derive a significant share from these two geographies
expansion.
Retail NBP mix (%) Ex- Delhi/Maha Delhi + Maharashtra
Figure 13: Among the large, listed players, SBILI has the most balanced exposure 100%
between Top 7 and Non-top 7 states
Retail NBP mix (%) Top 7 states Ex-Top 7 states 80%
100% 68% 69% 67% 62% 69% 70%
60% 83% 84% 83% 77% 75% 78% 77% 79%
90% 85% 85%
80% 47% 47% 46%
60% 56% 57% 54% 57% 60% 57%
67% 66% 66% 69% 64% 63% 59% 59% 40%
60%
40% 20% 32% 31% 33% 38% 31% 30%
53% 53% 54% 17% 16% 17% 23% 25% 22% 23% 21%
20% 40% 44% 43% 46% 43% 40% 43% 10% 15% 15%
33% 34% 34% 31% 36% 37% 41% 41% 0%
0% FY FY 9M FY FY 9M FY FY 9M FY FY 9M FY FY 9M FY FY
FY FY 9M FY FY 9M FY FY 9M FY FY 9M FY FY 9M FY FY 9M 19 24 25 19 24 25 19 24 25 19 24 25 19 24 25 19 24
19 24 25 19 24 25 19 24 25 19 24 25 19 24 25 19 24 25 LIC SBI Life IPru Life HDFC Life Axis Max Life BALIC
LIC SBI Life IPru Life HDFC Life Axis Max Life BALIC Source: Company, IIFL Research
Source: Company, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 6
India - Insurance
Life Insurance companies have been increasingly focusing on the Figure 18:SBILI and AMAXLI have among the highest ticket sizes for retail policies
protection business, as is evident from the increase in sum assured among large insurance players
per policy being witnessed by most players. AMAXLI has consistently Retail
been delivering higher sum assured/ premium vs peers, which is a NBP per 9M
FY19 FY20 FY21 FY22 FY23 FY24 Cagr (%)
representative of the higher share of retail protection in its overall policy FY25
mix. BALIC has also been slowly catching up and has witnessed a (Rs)
robust 27% Cagr in retail sum assured per policy over FY19-9MFY25. LIC 23,840 23,476 26,892 25,254 28,715 28,244 35,772 7%
SBILI 62,855 72,493 75,460 85,809 95,151 105,400 124,610 13%
Figure 16:AMAXLI’s sum assured/premium, a representative of the share of retail HDFCLI 76,833 94,420 102,597 127,195 145,451 125,927 133,638 10%
protection in its mix, is higher vs peers IPRU 91,204 102,887 118,622 142,492 148,585 142,991 148,059 9%
Retail Sum assured 9M Cagr AMAXLI 73,605 86,013 96,609 115,610 135,366 129,169 128,554 10%
FY19 FY20 FY21 FY22 FY23 FY24
/ Premium (X) FY25 (%) BALIC 57,934 64,190 59,274 83,401 93,179 91,706 94,585 9%
LIC 11.3 12.6 10.4 12.1 11.9 10.9 9.0 -4% Source: Company, IIFL Research
SBILI 13.2 11.9 10.5 9.3 8.2 8.1 9.1 -6% A closer look at the growth data for the large life insurance companies
HDFCLI 25.0 27.5 22.3 19.1 17.0 25.2 25.7 1% suggests both SBILI and BALIC have recorded well-balanced growth
IPRU 29.5 33.9 29.2 21.2 19.6 27.4 34.0 3% over the last 5 years. SBILI recorded a 19% Cagr in Retail NBP over
AMAXLI 36.0 35.7 35.8 30.7 27.1 31.6 37.4 1% FY18-24, with healthy volumes growth (8%) and increase in ticket
BALIC 16.5 16.5 29.2 17.0 21.5 24.6 39.7 17% size per policy (10%). BALIC has witnessed very strong volume
Source: Company, IIFL Research
growth of 16% over FY18-24, indicating strong operational
performance by BALIC’s distribution channels.
Figure 17: Ticket size of AMAXLI’s Protection policies is likely higher vs all peers, like Figure 19: SBILI/BALIC have delivered a 19%/25% Retail NBP Cagr over FY18-24, driven
IPRU/HDFCLIFE/BALIC by both growth in policy volumes and increase in ticket size
Retail Sum 9M Cagr
FY19 FY20 FY21 FY22 FY23 FY24 FY18-24
30% Cagr (%) No. of policies Retail premium per policy Retail NBP
assured/policy (Rsmn) FY25 (%)
LIC 0.3 0.3 0.3 0.3 0.3 0.3 0.3 3% 25% 24.9%
19.0%
SBILI 0.8 0.9 0.8 0.8 0.8 0.9 1.1 6% 20% 16.3% 15.1% 15.7%
14.2%
HDFCLI 1.9 2.6 2.3 2.4 2.5 3.2 3.3 10% 15% 10.2% 10.5%
10% 8.0%
IPRU 2.7 3.5 3.5 3.0 2.9 3.9 5.0 11% 6.1%
4.2% 8.0%
AMAXLI 2.7 3.1 3.5 3.6 3.7 4.1 4.8 11% 5% 2.5%
1.8% 1.8% 0.9%
BALIC 1.0 1.1 1.7 1.4 2.0 2.3 3.7 27% 0%
Source: Company, IIFL Research -5% -0.7%
-4.9%
-10%
LIC HDFC Life SBI Life IPru Life Axis Max BALIC
Life
Source: Company, IIFL Research
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India - Insurance
Figure 20:Retail NBP mix across states Figure 21: SBILI earns 50%+ more premiums than HDFC/IPRU/AMAXLI/BALIC in 5
9MFY25 - Retail NBP mix (%) LIC SBILI HDFCLI IPRU AMAXLI BALIC Aggregate states/union territories and 100%+ more premiums in 20 states/union territories
Maharashtra 12.5% 13.2% 25.0% 25.3% 15.5% 15.5% 15.5% 9MFY25 - Excess premium earned by SBILI over IPRU/HDFCLI/AMAXLI/BALIC
-150%
-100%
Uttar Pradesh 9.9% 8.6% 8.0% 6.7% 6.8% 8.8% 8.8%
100%
150%
200%
250%
300%
350%
400%
-50%
50%
0%
Tamil Nadu 10.9% 5.5% 6.6% 8.0% 6.6% 6.1% 8.4%
Karnataka 7.0% 6.3% 6.7% 5.9% 5.4% 6.1% 6.6%
Maharashtra -6%
West Bengal 6.5% 5.8% 5.5% 5.8% 7.1% 9.4% 6.4% Uttar Pradesh 90%
Gujarat 6.1% 4.8% 6.1% 7.2% 6.4% 8.2% 6.0% Tamil Nadu 47%
Haryana 5.0% 2.3% 4.7% 2.4% 18.3% 2.8% 5.0% Karnataka 68%
Kerala 4.4% 5.7% 2.7% 6.1% 3.3% 3.8% 4.5% West Bengal 84%
Delhi 4.5% 1.8% 5.3% 7.5% 6.3% 5.0% 4.4% Gujarat 40%
Haryana -64%
Telangana 4.1% 5.3% 3.8% 3.3% 2.6% 3.5% 4.1% Kerala 177%
Madhya Pradesh 3.8% 5.0% 2.7% 2.5% 2.0% 3.5% 3.7% Delhi -41%
Rajasthan 3.6% 4.3% 3.2% 3.8% 2.7% 2.3% 3.6% Telangana 144%
Orissa 3.5% 4.7% 2.4% 2.5% 2.2% 4.1% 3.5% Rajasthan 135%
Bihar 3.6% 4.1% 1.8% 2.8% 1.6% 4.1% 3.3% Madhya Pradesh 233%
Orissa 251%
Andhra Pradesh 2.5% 3.9% 2.8% 1.6% 2.5% 2.4% 2.8%
Andhra Pradesh 147%
Punjab 2.2% 2.4% 4.2% 2.1% 2.8% 2.4% 2.5% Bihar 287%
Jharkhand 1.9% 2.8% 1.2% 1.3% 1.2% 2.4% 1.9% Punjab 1%
Assam 1.9% 2.9% 1.3% 0.8% 1.2% 2.1% 1.9% Chattisgarh
Chhattisgarh 1.8% 3.3% 1.1% 0.8% 0.8% 1.7% 1.9% Jharkhand 310%
Uttarakhand 1.1% 2.1% 1.0% 1.0% 1.2% 1.7% 1.3% Assam 283%
Uttrakhand 273%
Himachal Pradesh 0.9% 2.0% 1.1% 0.6% 0.4% 0.5% 1.1%
Himachal Pradesh 211%
Jammu & Kashmir 0.7% 0.8% 0.6% 0.4% 0.4% 1.4% 0.7% Jammu & Kashmir 111%
Goa 0.4% 0.3% 0.5% 0.3% 0.8% 0.5% 0.4% Goa 7%
Chandigarh 0.3% 0.1% 0.4% 0.6% 0.5% 0.2% 0.3% Chandigarh -35%
Tripura 0.2% 0.4% 0.1% 0.2% 0.2% 0.4% 0.2% Tripura 267%
Arunachal Pradesh Arunachal Pradesh 303%
0.2% 0.4% 0.1% 0.0% 0.3% 0.2% 0.2%
Meghalaya
Meghalaya 0.1% 0.4% 0.1% 0.0% 0.1% 0.1% 0.2% Puducherry 380%
75%
Puducherry 0.1% 0.1% 0.1% 0.2% 0.2% 0.1% 0.1% Manipur 16%
Manipur 0.1% 0.1% 0.2% 0.2% 0.1% 0.2% 0.1% Nagaland 166%
Nagaland 0.1% 0.2% 0.1% 0.1% 0.2% 0.1% 0.1% Mizoram 135%
Mizoram 0.1% 0.1% 0.1% 0.1% 0.1% 0.0% 0.1% Sikkim 68%
Andaman & Nicobar Islands
Sikkim 0.0% 0.1% 0.1% 0.0% 0.1% 0.2% 0.1%
Dadra & Nagrahaveli -28%
Others 0.1% 0.2% 0.1% 0.0% 0.1% 0.1% 0.1% Ladakh 0%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Lakshadweep -83%
Source: Company, IIFL Research
Source: Company, IIFL Research
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India - Insurance
LI: Levers available for margin improvement Figure 23:Easing of EOM regulations led to an increase in IPRU’s and HDFCLI’s cost ratios,
while SBILI’s remained largely unchanged
While APE growth was healthy during YTD FY25, VNB margins saw Commission First year Premium Single Premium
rates (%)
140bps/120bps decline for SBILI and HDFCLI, while IPRU’s margins FY24 FY25 FY24 FY25
witnessed further decline of ~4ppt despite the easy base. Key aspects 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
that impacted margins include: SBILI
Par 24% 29% 26% 18% 25% 24% 36% 2% 2% 2% 2% 2% 2% 0%
• Higher share of ULIPs: Buoyant capital markets ensured ULIPs’
Non-par 21% 23% 25% 12% 26% 22% 25% 1% 1% 1% 1% 1% 2% 1%
share remained high at the expense of traditional savings.
ULIP 7% 10% 9% 0% 9% 9% 9% 2% 2% 2% 2% 2% 2% 2%
• Elevated cost ratios: Many insurance companies continue to see Total 13% 15% 13% 4% 15% 13% 13% 1% 1% 1% 1% 1% 2% 2%
an uptick in their commission ratios, further impacting margins. HDFCLI
• New surrender value regulations: The new surrender value Par NA NA NA NA NA NA NA NA NA NA NA NA NA NA
regulations applicable from 1st Oct’24 negatively impacted Non-par NA NA NA NA NA NA NA NA NA NA NA NA NA NA
margins. However, insurers were able to mitigate the impact by ULIP NA NA NA NA NA NA NA NA NA NA NA NA NA NA
implementing measures around distribution payout rationalisation. Total 23% 28% 25% 34% 36% 39% 54% 4% 8% 10% 11% 13% 9% 4%
IPRU
With a potential slowdown in ULIPs, a shift in product mix in favour of Par 35% 59% 57% 61% 55% 59% 54% 0% 0% 0% 0% 0% 0% 3%
traditional savings could act as a possible lever for margin expansion. Non-par 36% 56% 61% 40% 53% 57% 55% 4% 7% 16% 16% 22% 22% 23%
Insurers remain competitive and innovative in the Non-par segment, ULIP 10% 11% 11% 13% 9% 11% 11% 0% 0% 0% 0% 0% 0% 0%
with new product launches expected to renew interest in the segment Total 23% 32% 34% 31% 26% 29% 27% 3% 5% 14% 13% 19% 17% 10%
and drive growth. Increasing penetration of retail protection and high Source: Company Public Disclosures, IIFL Research
rider attachment will be critical for APE and margin growth.
Figure 24:SBILI continues to record best-in-class expense ratios, while IPRU and HDFCLI
Figure 22:Higher share of ULIPs, elevated cost ratios and the new surrender value
have witnessed an increase
regulations led to decline in margins for LI companies
30
35 34 Management expenses to NEP (1QFY23 - 3QFY25) (%)
VNB Margin (1QFY23 - 3QFY25) (%) 25
32 32 32 25 22 21
31 31 21 21 21
30 30
19 19 20 19 20 21 20 20 20 19
29 20 18 18
30 29 28 28
17 17
28 28 15 15
27 27 27
27 27 27 27 15
26 26 26 26 12 11 11 11
25 25
24 10 9 9 10 10 10
25 24 10
23 7
23
21 21 5
20
0
Ipru SBI Life HDFC Life
Ipru SBI Life HDFC Life
Source: Company, IIFL Research
Source: Company, IIFL Research
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India - Insurance
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India - Insurance
GI FY25: Pricing pressure in certain segments Figure 25:Sector recorded modest GDPI growth of 7% during YTD Feb FY25, with all
segments seeing a moderation in growth
Modest performance across segments: The General Insurance Sector GDPI growth % (YTD Feb. FY25)
sector has witnessed 7% growth in GDPI during YTDFY25. We note
15% 13%
that effective 1st October, general insurance companies are required 11% 10%
10% 9%
to account for premiums for long-term policies on a yearly basis (1/n), 10% 8% 8% 7%
thereby impacting growth numbers. Growth was modest across
segments. The Motor OD and Motor TP segments recorded modest 5%
1%
growth of 8% yoy each, attributable to the slowdown in new vehicle 0%
sales. The Motor TP segment did not see a price hike being
implemented in premium rates, which led to some players adopting a -5%
cautious stance in this segment. Retail Health, the segment most -10%
-6%
impacted by the aforementioned change in accounting, still managed
to record healthy 13% growth. Group Health saw 11% yoy growth in -15% -13%
GDPI, with many players citing pricing pressure in the segment. A Fire Marine Motor Motor Health Retail Group Govt Crop Others Total
similar pricing pressure was called out in Fire segment, which saw 6% OD TP Health Health Health
yoy decline, although there are hopes for pricing sanity to return,
starting 4Q. The Marine segment and Other miscellaneous segments Source: GI Council, Company, IIFL Research
managed to deliver moderate 10% yoy growth in GDPI.
Figure 26:Industry COR in Motor saw a modest improvement in FY24; however, the same
EOM compliance requirement to curb pricing intensity: As per has again started to peak in FY25. We expect the requirement for EOM compliance will
the new EOM regulations, the expenses of management have been lead to players going less aggressive in this segment, benefitting ILOM and BAGIC
capped at 30% of gross written premium for general insurers (35% FY23 FY24 FY25
for standalone health insurers), and companies have to achieve these Combined Ratios (COR, %) 1Q 1H 9M FY 1Q 1H 9M FY 1Q 1H
caps by FY26. As of 9MFY25, 14 companies within the sector remain Industry COR (Motor) 125 124 122 121 121 119 118 119 126 125
non-compliant with the EOM regulations. The need for EOM Industry COR (Overall, RHS) 111 112 116 116 114 112 112 112 114 113
compliance has caused many players to underwrite lower-cost ILOM COR (Motor) 118 115 112 113 114 109 106 106 111 108
businesses such as Group Health and Crop Insurance, although we do
ILOM COR (Overall, RHS) 104 105 105 104 104 104 104 103 102 103
not see this as a sustainable model. Our analysis of the combined
BAGIC COR (Motor) 113 108 104 100 112 111 108 107 108 109
ratios (COR) in the Motor portfolio suggests that the gap between
Industry and ILOM’s CORs has widened from 10ppt in 1HFY24 to BAGIC COR (Overall, RHS) 105 102 101 100 101 98 99 100 104 102
17ppt in 1HFY25. We expect the requirement for EOM compliance Source: Company, IIFL Research
hovering around most insurers will lead to a reduction in pricing
aggression by many players. As a result, the growth differential
between compliant companies and fast-growing non-compliant ones
would narrow, in our view.
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India - Insurance
Figure 27: As of 9MFY25, 3 SAHIs and 11 multi-line insurers are non-compliant with EOM regulations, constituting a total market share of ~21% as of YTDFY25
EOM Ratio (% of GWP) (FY23) EOM Ratio (% of GWP) (9MFY25) EOM Limit (Specified by IRDAI)
70%
60%
50%
40%
30%
20%
10%
0%
Reliance
Go Digit
Liberty
Acko
Aditya Birla
Raheja QBE
Niva Bupa
TATA AIG
Care
Bajaj Allianz
National
ECGC
Zuno
ICICI Lombard
HDFC ERGO
SBI
IFFCO Tokio
Magma HDI
Star
Agriculture Insurance
Cholamandalam MS
The New India
Shriram
NAVI
ManipalCigna
Royal Sundaram
Kotak Mahindra
Universal Sompo
Source: Company Reports, IIFL Research
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India - Insurance
Underperformance provides attractive entry Figure 29: India Life Insurance − Rating and valuation summary
Company Reco CMP TP Potential Mkt Cap EV/sh (Rs) P/EV (x)
We believe Life Insurers are well-placed to deliver aggregate (Rs) (Rs) Upside (US$ m) FY25ii FY26ii FY27ii FY26ii FY27ii
APE/VNB/EV Cagr of 14%/16%/15% over FY25ii-27ii. We continue to SBI Life BUY 1,490 2,000 34% 17,316 682 798 933 1.9 1.6
like SBILI for its resilient customer base, high agent productivity, IPRU Life ADD 558 640 15% 9,362 331 373 420 1.5 1.3
strong distribution franchise and best-in-class commission and
HDFC Life ADD 684 730 7% 17,077 255 295 342 2.3 2.0
expense ratios. While IPRU has demonstrated healthy growth,
persistent margin decline is negating APE growth gains. While the Coverage 43,754 1.9 1.6
recent correction makes valuations attractive, a convergence of APE Company P/VNB (x) FY25ii-27ii CAGR Target (x) VNB margin
and VNB growth is needed for a re-rating. HDFCLI remains a strong
FY26ii FY27ii EV VNB P/EV P/VNB FY25ii FY26ii FY27ii
compounding story, in our view. ILOM could see an improvement in
SBI Life 12.2 9.0 17% 15% 2.1 15 26.8% 27.0% 27.2%
market share with the sword of EOM compliance hanging above the
heads of many other insurers. The stock is trading at one standard IPRU Life 12.5 9.1 13% 13% 1.5 13 22.2% 22.6% 22.6%
deviation below its historical average, providing an attractive entry HDFC Life 19.9 15.4 16% 17% 2.1 17 25.6% 26.0% 26.6%
point. While STAR has seen a significant correction, improvement in Coverage 14.9 11.1 15% 15% 1.9 15 24.9% 25.2% 25.4%
growth profile and loss ratios is a key lever to drive a re-rating. MEDI Source: Bloomberg, Company, IIFL Research
remains an interesting proxy to the health insurance market.
Figure 30:India Insurance – Key assumptions and target price computation
Figure 28:Revision of key metrics and TP for listed life Insurance companies Key assumptions (Rs bn) SBI Life ICICI Pru Life HDFC Life
(Rsbn) Key metrics Change TP (Rs) Change EV - 1YF (A) 800 537 635
SBI Life FY25ii FY26ii FY27ii FY25ii FY26ii FY27ii 2,000 0%
VNB Cagr FY25ii-27ii 15% 13% 17%
NBP 364 415 477 -9% -8% -8%
APE 216 246 283 -1% -1% -1% Growth adjusted VNB multiple (B) 15 13 17
VNB 58 66 77 -2% -2% -2% VNB – 2YF (C ) 77 29 54
EV 683 800 934 0% 0% -1% Franchise value (B*C) 1,200 383 924
ICICI Pru Life 640 -15%
NBP 219 247 280 0% 0% 2% Appraisal value (A + B*C) 2,000 920 1,560
APE 103 116 130 -7% -9% -10% No. of shares (m) 1,001 1,441 2,151
VNB 23 26 29 -8% -11% -13% Target value per share (Rs) 2,000 640 730
EV 477 537 605 0% -1% -2% Implied 2YF EV multiple (x) 2.1 1.5 2.1
HDFC Life 730 0%
NBP 340 400 467 0% 2% 5% Source: Company, IIFL Research
APE 154 178 204 -2% -1% -1%
VNB 39 46 54 -2% -1% -1%
EV 549 635 736 0% 0% 0%
Source: Company, IIFL Research
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India - Insurance
Figure 31:Valuations remain attractive, given VNB growth expectations and margin Figure 33: Key operating metrics for peers
profile, with all the three stocks trading firmly below historical averages SBI Life FY24 FY25ii FY26ii FY27ii
P/VNB (1YF) VNB margin (%) 28.1 26.8 27.0 27.2
45.0
RoEV (%) 21.8 17.9 17.7 17.6
EV/share (Rsbn) 582 682 798 933
35.0
P/EV (x) 2.6 2.2 1.9 1.6
ICICI Pru Life
25.0
20.1 VNB margin (%) 24.6 22.2 22.6 22.6
15.0 12.5 RoEV (%) 14.1 13.4 13.5 13.5
EV/share (Rsbn) 294 331 373 420
12.5
5.0 P/EV (x) 1.9 1.7 1.5 1.3
Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 Apr-25 HDFC Life
SBILI SBILI Avg IPRU IPRU Avg HDFCLI HDFCLI Avg
VNB margin (%) 26.3 25.6 26.0 26.6
Source: Bloomberg, Company, IIFL Research RoEV (%) 17.5 16.6 16.7 16.8
EV/share (Rsbn) 221 255 295 342
Figure 32: Given the sector has seen some correction in FY25, it is providing significant P/EV (x) 3.1 2.7 2.3 2.0
room for re-rating
Source: Bloomberg, Company, IIFL Research
P/EV (1YF)
5.0 Figure 34: Both ILOM and STAR have seen significant correction in valuations
ILOM 1YF PE STAR 1YF PE STAR Avg (RHS) ILOM Avg (RHS)
4.0
70 50
3.0 60 40
2.3 50 30
2.0 1.9
40 20
1.5
1.0 30 27.810
Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 Apr-25 24.1
20 Apr-18 0
Apr-19
Apr-20
Apr-21
Apr-22
Apr-23
Apr-24
Apr-25
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-23
Oct-24
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
Jan-24
Jan-25
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
Jul-23
Jul-24
SBILI SBILI Avg IPRU IPRU Avg HDFCLI HDFCLI Avg
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India - Insurance
4QFY25 preview Figure 35: India Life Insurance – 4QFY25ii (Rs bn)
ICICI Pru Life (15-Apr) 4QFY25ii 4QFY24 yoy (%) FY25ii FY24 yoy (%)
New business premium 63.0 67.2 -6.3% 219.1 186.8 17.3%
Life Insurance: Muted growth potentially driven by market
slowdown: We expect the three Life Insurers under our coverage to Renewal premium 95.7 84.3 13.5% 260.8 245.6 6.2%
witness modest APE growth of ~4% yoy on average in 4QFY25, Retail APE 30.4 32.0 -4.9% 86.6 76.8 12.7%
potentially due to the slowdown in ULIP sales on the back of a Total APE 34.4 36.2 -4.9% 103.4 90.5 14.3%
downturn in capital markets. Lower share of ULIPs could be potential Savings APE 29.3 31.8 -7.8% 86.7 75.2 15.3%
tailwind to the VNB margins; however, the same is expected to be Protection APE 5.0 4.3 16.2% 16.7 15.3 9.5%
offset by lower operating leverage due to modest growth, leading to VNB 7.2 7.8 -7.2% 23.0 22.3 3.1%
~50bps decline in VNB margins. This would translate to 2% yoy VNB margin (%) 21.0% 21.5% -50 bps 22.2% 24.6% -240 bps
growth in VNB. Individual savings should continue to be the key
HDFC Life (17-Apr) 4QFY25ii 4QFY24 yoy (%) FY25ii FY24 yoy (%)
growth driver, although group savings is expected to remain weak.
Retail protection is expected to maintain the healthy growth trajectory New business premium 116.0 95.3 21.7% 340.1 296.4 14.8%
seen in 9MFY25. SBI Life is expected to witness growth of 6% yoy in Renewal premium 130.1 114.1 14.1% 376.3 334.5 12.5%
APE, but flat VNB growth, led by 170bps margin decline. HDFC Life Retail APE 44.5 42.4 5.1% 134.4 115.1 16.8%
is expected to see APE growth of 7% yoy and a 60bps yoy margin Total APE 50.7 47.3 7.3% 153.6 132.9 15.6%
uptick, translating to 10% VNB growth. IPRU is expected to record Savings APE 44.8 42.4 5.5% 135.4 115.2 17.5%
5% yoy decline in APE, while weakness in margins is expected to Protection APE 6.0 4.8 23.2% 18.3 17.7 3.5%
continue, with expected yoy decline of 50bps yoy despite an easy
VNB 13.5 12.3 9.6% 39.4 35.0 12.5%
base, resulting in 7% yoy decline in VNB. We expect renewals to
VNB margin (%) 26.7% 26.1% 60 bps 25.6% 26.3% -70 bps
remain healthy, clocking 14% yoy growth on average. We will watch
out for outlook on Non-Par and Protection, and developments in SBI Life (TBA) 4QFY25ii 4QFY24 yoy (%) FY25ii FY24 yoy (%)
competitive landscape and recent regulations. New business premium 101.0 122.4 -17.4% 363.6 382.4 -4.9%
Renewal premium 148.5 130.0 14.2% 495.7 431.9 14.8%
General Insurance – Growth moderates for ILOM and STAR; Retail APE 49.4 44.8 10.3% 196.8 173.9 13.2%
EOM compliance a moat: We expect both ILOM and STAR to deliver Total APE 56.5 53.3 6.0% 216.2 197.2 9.6%
GDPI growth of 8%/2% yoy, respectively, which was also impacted Savings APE 50.8 47.5 6.8% 197.1 176.2 11.8%
by the recent change in accounting for long-term policies. For ILOM,
Protection APE 5.7 5.8 -1.4% 19.1 21.0 -9.0%
we believe growth would be driven by strength in its Motor and Retail
VNB 15.0 15.1 -0.4% 57.9 55.5 4.4%
Health portfolios. We expect combined ratio to see a modest increase
of 50bps. STAR should see its combined ratio increase yoy by VNB margin (%) 26.6% 28.3% -170 bps 26.8% 28.1% -130 bps
~570bps to ~98.5%, driven by higher loss ratios. We will watch for Source: Company, IIFL Research
comments on growth outlook for FY25 and the expected trajectory for
combined ratio. We expect Medi Assist to grow its revenues 14%
yoy, with Ebitda margins remaining largely flat yoy.
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India - Insurance
Figure 36:India General Insurance, MEDI and PBFI – 4QFY25ii (Rs bn) Figure 37:Revision of key metrics and TP for listed general Insurance companies and MEDI
ICICI Lombard (15-Apr) 4QFY25ii 4QFY24 yoy (%) FY25ii FY24 yoy (%) (Rsbn) Key metrics Change TP (Rs) Change
GDPI 65.3 60.7 7.5% 271.5 247.8 9.6% ILOM FY25ii FY26ii FY27ii FY25ii FY26ii FY27ii 2,350 -2%
Net premium 48.5 43.7 11.0% 194.2 168.7 15.2% GDPI 272 313 358 1% 2% 2%
Claims ratio 67.2% 68.6% -150 bps 69.5% 70.8% -130 bps Loss Ratio (%) 69.5 68.9 68.6 0 bps 30 bps 30 bps
Mgmt. expense ratio 35.6% 33.6% 200 bps 33.4% 32.5% 90 bps Combined Ratio* (%) 102.9 101.6 100.6 20 bps 40 bps 50 bps
Combined ratio 102.7% 102.2% 50 bps 102.9% 103.3% -40 bps PAT 26.51 31.36 38.66 -2% -4% -2%
Investment income 11.0 10.0 10.0% 44.3 36.2 22.4% STAR (Rsbn) 500 -22%
PAT 6.5 5.2 25.6% 26.5 19.2 38.2% GDPI 167 187 215 -1% -4% -7%
Star Health (29-Apr ) 4QFY25ii 4QFY24 yoy (%) FY25ii FY24 yoy (%) Loss Ratio (%) 70.1 69.5 68.7 40 bps 90 bps 110 bps
GDPI 50.8 49.7 2.2% 166.8 152.5 9.4% Combined Ratio* (%) 100.9 100.0 99.0 40 bps 120 bps 140 bps
Net premium 36.9 34.0 8.7% 147.2 129.4 13.7% PAT 7.11 8.48 10.52 -7% -14% -16%
Claims ratio 68.4% 64.1% 420 bps 70.1% 66.5% 360 bps MEDI (Rsmn) 600 -15%
Mgmt. expense ratio 30.1% 28.6% 150 bps 30.9% 30.2% 70 bps Revenue 7,243 9,611 11,598 -1% -8% -5%
Combined ratio 98.5% 92.8% 570 bps 100.9% 96.7% 430 bps Ebitda margin (%) 21.4% 19.8% 22.0% -30 bps 0 bps 0 bps
Investment income 3.4 2.9 17.6% 13.4 10.8 24.1% PAT 900 845 1,405 -2% -10% -3%
PAT 0.7 1.4 -54.0% 7.1 8.5 -15.9% Source: Company, IIFL Research; *Reported
Medi Assist (TBA) 4QFY25ii 4QFY24 yoy (%) FY25ii FY24 yoy (%)
Revenue from operations 1,898.2 1,667.9 13.8% 7,242.7 6,347.3 14.1%
Figure 38: Recent acquisition of Paramount has consolidated MEDI’s leadership position
Ebitda 418.3 370.1 13.0% 1,552.0 1,333.1 16.4%
Mcap Cagr (FY25E-27E) P/E Multiple ROE
Ebitda margin (%) 22.0% 22.2% -20 bps 21.4% 21.0% 40 bps Company
(USDmn) Rev Ebitda PAT FY26E FY27E FY26E
Ebit margin (%) 14.1% 14.8% -70 bps 13.6% 14.2% -60 bps
Pre-exceptional PAT 206.0 253.2 -18.6% 900.3 900.5 0.0% TPA 27% 28% 25% 38.5 23.1 15%
Pre-exceptional EPS 2.91 3.55 -17.9% 12.70 12.82 -0.9% Medi Assist 372 27% 28% 25% 38.5 23.1 15%
PB Fintech (TBA) 4QFY25ii 4QFY24 yoy (%) FY25ii FY24 yoy (%) Non-life 14% NA 21% 23.8 21.0 16%
Revenue 14,709.8 10,895.7 35.0% 49,403.2 34,376.8 43.7% Insurers
ICICI Lombard 10,209 15% NA 21% 26.9 22.6 20%
Adjusted EBITDA 1,265.3 688.8 83.7% 3,107.4 1,440.2 115.8% Star Health 2,383 14% NA 22% 20.7 19.5 11%
Adjusted EBITDA margin 8.6% 6.3% 230 bps 6.3% 4.2% 210 bps Depositories 14% 15% 15% 40.1 33.8 35%
Net profit/loss 1,325.0 605.9 118.7% 2,983.4 669.8 345.4% CAMS 2,048 11% 11% 11% 35.2 30.4 42%
EPS (Rs) 2.86 1.31 118.0% 6.44 1.45 344.0%
Kfin tech 2,051 16% 18% 19% 45.0 37.3 27%
Source: Company, IIFL Research
Source: Company, Bloomberg, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 16
India - Insurance
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 17
India - Insurance
Companies
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 18
SBI Life Insurance – BUY
09 April 2025
Oct-23
Oct-24
Jun-23
Dec-23
Jun-24
Dec-24
Feb-25
Feb-24
Apr-25
Apr-23
Aug-23
Apr-24
Aug-24
with no significant impact on margins. SBILI generates a large proportion Dividend yield FY26ii (%) 0.3
of business from the bancassurance business, making it susceptible to any Free float (%) 45.0
potential caps on bancassurance. However, insurance companies have Financial summary (Rs m)
confirmed that there have been no discussions around it with the IRDAI. Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
There was nothing materially negative in the Income Tax Amendment and Net Premium Income 665,810 805,871 848,724 969,347 1,110,706
Draft Insurance Amendment Bills for SBI Life too.
VNB 50,700 55,500 57,934 66,289 76,767
ULIP expected to normalise; non-ULIP to gain traction: We expect VNB Margins (%) 30.1 28.1 26.8 27.0 27.2
volatility in capital markets to normalise ULIP sales. However, a favorable Reported PAT 17,206 18,938 24,986 31,075 38,777
base and continued product innovation could help drive growth from other Pre-exceptional EPS (Rs) 17.2 18.9 24.9 31.0 38.7
segments for SBILI. Retail protection has been witnessing a consistent Growth (%) 14.2 10.0 31.9 24.4 24.8
slowdown for SBILI, but the return of Banca and sales through SBI’s YONO Embedded Value/Share 460 582 682 798 933
app could help stage a comeback. Strong growth in non-ULIP segments, Price/ Embedded Value 3.2 2.6 2.2 1.9 1.6
coupled with stable ULIPs, could drive an improvement in margin profile. Price/ VNB 21.7 18.6 15.8 12.3 9.1
Attractive valuations: At 1.9x FY26ii P/EV, stock is trading at attractive RoEV (%) 22.9 21.8 17.9 17.7 17.6
valuations, at a 20% discount to HDFCLI, despite delivering top-quartile Solvency ratio (%) 215 196 185 180 178
VNB growth. We expect this discount to completely converge eventually. BVPS 130.1 148.9 170.1 196.4 229.4
Our TP of Rs2,000 implies 2.1x 2YF P/EV, offering 17%/15% EV/VNB Cagr Source: Company, IIFL Research. Priced as on 08 April 2025
(FY25ii-27ii). Key risk: Open architecture.
Figure 1: After starting FY25 on a strong note, SBILI growth moderated due to weakness Figure 3: We expect a 13%/22% Cagr in Non-par & Retail protection over FY25ii-27ii
in their banca channel, recording retail APE growth of 13% as of 11MFY25 Product Mix (Rs
FY19 FY20 FY21 FY22 FY23 FY24 FY25ii FY26ii FY27ii
bn)
Retail APE growth (YoY %) SBILI Private Sector
ULIP 68.6 74.7 74.2 94.1 92.9 119.3 144.5 166.1 191.0
100% YoY growth 21% 9% -1% 27% -1% 28% 21% 15% 15%
75% Product Mix 71% 70% 65% 66% 55% 60% 67% 68% 68%
50% Par 18.1 11.7 9.7 7.5 9.5 7.8 7.4 8.2 9.4
34%
31% 16% 20%17%26% 20%25% 21% 18% YoY growth -13% -35% -17% -23% 27% -18% -5% 10% 15%
25% 12% 18% 4%9%10%9%16%
8% 8% 5% 16% Product Mix 19% 11% 8% 5% 6% 4% 3% 3% 3%
0% Non-par 0.7 7.4 11.9 18.8 41.4 37.4 37.4 41.1 47.7
0% -5% -1%
-25% -3% -7% YoY growth 0% 957% 61% 58% 120% -10% 0% 10% 16%
Product Mix 1% 7% 10% 13% 25% 19% 17% 17% 17%
-50% Retail Protection 3.7 5.1 7.3 9.2 9.8 9.4 7.5 9.4 11.3
Apr-23
Apr-24
Mar-23
Dec-23
May-23
Aug-23
Mar-24
Dec-24
May-24
Aug-24
Jan-23
Jun-23
Oct-23
Jun-24
Oct-24
Nov-23
Jan-24
Nov-24
Jan-25
Feb-23
Jul-23
Sep-23
Feb-24
Jul-24
Sep-24
Feb-25
YoY growth 517% 38% 43% 26% 7% -4% -20% 25% 20%
Product Mix 4% 5% 6% 6% 6% 5% 3% 4% 4%
Source: LI Council, Company, IIFL Research Group 6.1 8.5 11.4 13.4 14.5 23.3 19.3 20.8 23.0
YoY growth -5% 39% 34% 18% 8% 61% -17% 8% 11%
Figure 2: In the event of introduction of caps on bancassurance, it will have a negative Product Mix 6% 8% 10% 9% 9% 12% 9% 8% 8%
impact on SBILI’s business Total APE 97.2 107.4 114.5 143.0 168.1 197.2 216.2 245.7 282.5
FY24 share (%) SBILI HDFCLI IPRU MAXLI YoY growth 14% 10% 7% 25% 18% 17% 10% 14% 15%
Banca Share in Total NBP 52% 35% 25% 53% Source: Company, IIFL Research
Potential Cap on Banca 50% 50% 50% 50%
Reduction required 2% NA NA 3% Figure 4: APE growth has moderated in FY25ii; we expect VNB margins to marginally
improve over FY25ii-27ii, driven by better product mix and best-in-class cost ratios
Share of Promoter Bank in Total NBP (assumed) 49% 28% 10% 47%
Potential Cap on share of Promoter Bank 25% 17.5% 12.5% 25% SBI Life estimates (%) FY24 FY25ii FY26ii FY27ii
Reduction required 24% 10.5% 0% 22% 30 28.1 26.8 27.0 27.2
26.5
Source: Company Public Disclosures, IIFL Research
25
20 17.3 17.3 17.0 16.9
15.0
15 13.6
9.6
10
5
0
APE growth (YoY, %) VNB margin (%) EV growth (YoY, %)
Source: Company, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 2
Company snapshot SBI Life Insurance – BUY
Background: SBI Life Insurance Company (SBI Life) started off as a joint venture between State Bank of India (SBI) and BNP Paribas Cardif S.A. SBI
Life is India’s largest private life insurer on a retail APE basis. The company has a product mix of participating (Par), non-participating (Non-Par) and linked
policies, with the mix skewed towards linked products. The company leverages a strong agency network of around 246,000 independent agents and
bancassurance partners (the State Bank group) to source business.
Management
NEP growth (%) VNB margin (%)
Name Designation
35.0 30.7 35.0
30.1
Amit Jhingran MD & CEO
30.0 30.0 28.1
25.9
22.6 23.4 25.0 23.2
Sangramjit Sarangi Chief Financial Officer 25.0 20.7 21.0 20.7
18.4 19.8
Subhendu Bal Chief Actuary & Risk Officer 20.0 17.4 20.0
13.9 15.0
15.0
10.0 10.0
5.0 5.0
0.0 0.0
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY18
FY19
FY20
FY21
FY22
FY23
FY24
Key earnings drivers Price/ Embedded Value (x)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Core RoEV (%)
12m fwd PB Avg +/- 1SD
NBP growth 16.2 29.2 (4.9) 14.2 15.0 25.0 23.0 22.9
APE growth 17.6 17.3 9.6 13.6 15.0 20.5 20.6
19.1 4.0
Conservation ratio 81.6 81.6 81.7 81.7 81.7 20.0 17.8 17.4 (x)
3.5
Commission ratio 4.5 4.0 4.8 4.8 4.8
15.0
Opex ratio 5.1 4.9 5.1 5.3 5.4 3.0
VNB Margins 30.1 28.1 26.8 27.0 27.2 10.0 2.5
Inv Yield w unrealized gains 4.8 15.1 9.9 9.9 9.9
Inv Yield w/o unrealized 6.4 7.7 9.9 9.9 9.9 5.0 2.0
gains 0.0 1.5
Surrenders & With to AUM 3.4 4.5 4.5 4.5 4.5
FY18
FY19
FY20
FY21
FY22
FY23
FY24
1.0
Source: Company data, IIFL Research
Oct-17 Apr-19 Sep-20 Mar-22 Sep-23 Mar-25
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 3
SBI Life Insurance – BUY
Financial summary
Policyholders' Account (Rs m) Balance Sheet (Rs m)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
Premiums earned - Net 665,810 805,871 848,724 969,347 1,110,706 Shareholders' Funds: 130,175 149,086 170,322 196,736 229,697
Income from Investments 132,601 503,666 400,102 470,833 558,778 Share Capital 10,009 10,015 10,015 10,015 10,015
Other Income 499 501 576 663 762 Reserve and surplus 119,237 135,902 157,138 183,552 216,513
Contribution from Shareholders' 17,075 16,276 18,717 21,525 24,753 Policyholders' Funds: 2,965,691 3,778,744 4,443,418 5,267,927 6,231,187
Account Policy Liabilities 1,301,319 1,558,085 1,782,213 2,047,694 2,346,977
Total A 815,985 1,326,314 1,268,119 1,462,368 1,694,999 Provision for Linked Liabilities 1,535,926 2,045,746 2,462,817 2,993,057 3,622,818
Commission 30,625 32,553 41,086 46,923 54,447 Fair Value change 20,389 47,191 47,191 47,191 47,191
Operating Expenses 34,095 39,819 43,907 52,216 60,957 Funds for future appropriation 11,427 13,366 15,861 19,820 24,654
Benefits Paid (Net) 300,902 427,244 488,219 501,582 570,151 Sources of Funds 3,095,865 3,927,830 4,613,740 5,464,663 6,460,884
Change in valuation of liability 410,031 784,313 641,199 795,722 929,043 Investments - Shareholders 112,087 130,364 151,602 178,016 210,977
Others 0 0 0 0 0 Investments - Policyholders 2,931,258 3,725,539 4,375,047 5,178,898 6,114,225
Provision for Tax 1,474 1,357 1,876 2,315 2,827 Fixed Assets 5,215 5,570 5,948 6,353 6,784
Total B 777,126 1,285,286 1,216,287 1,398,758 1,617,425 Net Current Assets 43,417 62,470 76,867 96,692 123,723
Surplus/(Deficit) 28,563 27,915 35,650 43,990 53,712 Misc. Expenditure 0 0 0 0 0
Transfer to Shareholders' Account 27,072 25,977 33,155 40,031 48,878 Application of Funds 3,095,866 3,927,830 4,613,740 5,464,663 6,460,884
Note – summation may not equal to the surplus/(deficit) as all P&L items are not shown in the above
statement
Ratio analysis (%)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
Shareholders' Account (Rs m) Growth ratios (%)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Net Premium Income 13.9 21.0 5.3 14.2 14.6
Transfer from Policyholders' account 27,072 25,977 33,155 40,031 48,878 Commission Expenses 41.9 6.3 26.2 14.2 16.0
Income from Investments 7,945 10,341 11,993 14,402 16,912 Operating Expenses 14.6 16.8 10.3 18.9 16.7
Total A 35,024 36,317 45,148 54,433 65,789 NPAT 14.2 10.1 31.9 24.4 24.8
Expenses (apart from insurance) 372 515 370 407 448 EPS 14.2 10.0 31.9 24.4 24.8
Contribution to Policyholders' Profitability ratios (%)
17,075 16,276 18,717 21,525 24,753 VNB Margins 30.1 28.1 26.8 27.0 27.2
Account
Others (8) 106 106 106 106 Commission To Gross Prem ratio 4.5 4.0 4.8 4.8 4.8
Total B 17,440 16,896 19,193 22,038 25,307 Opex To Gross Prem ratio 5.1 4.9 5.1 5.3 5.4
Profit/(Loss) before tax 17,585 19,421 25,955 32,396 40,482 Mgmt Expenses to Gross Prem ratio 9.6 8.9 9.9 10.1 10.2
Provision for Taxation 379 483 969 1,320 1,705 Conservation Ratio 81.6 81.6 81.7 81.7 81.7
Profit/(Loss) after tax 17,206 18,938 24,986 31,075 38,777 Return ratios (%)
Source: Company data, IIFL Research ROE 14.0 13.6 15.6 16.9 18.2
RoEV 22.9 21.8 17.9 17.7 17.6
Solvency Ratio 215.4 196.0 184.8 180.3 178.0
Source: Company data, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 4
HDFC Life – ADD
09 April 2025
Oct-23
Dec-23
Oct-24
Jun-23
Feb-24
Jun-24
Dec-24
Apr-24
Feb-25
Apr-23
Aug-23
Aug-24
Apr-25
Concerns on regulations largely overdone: HDFCLI has seen some Dividend yield FY26ii (%) 0.4
easing of competition since the implementation of the new surrender Free float (%) 50.0
guidelines. We believe the industry concerns around the other regulatory Financial summary (Rs m)
overhangs are largely overdone, with no material negatives in the Income Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
Tax Amendment and Draft Insurance Amendment Bills. The large insurers Net Premium Income 568,788 621,121 703,985 818,272 950,961
have cited the capping of bancassurance as largely media speculation. VNB 36,700 35,010 39,389 46,385 54,371
Investments should partially offset tailwinds to margins: We believe VNB Margins (%) 27.5 26.3 25.6 26.0 26.6
the recent volatility in capital markets could lead to normalisation of Reported PAT 13,683 15,741 18,761 21,638 24,272
demand for ULIPs. Demand for ULIPs could be displaced by traction in Pre-exceptional EPS (Rs) 6.4 7.3 8.7 10.1 11.3
traditional savings products given the easy base and continued product Growth (%) 9.9 14.0 19.1 15.3 12.2
innovation. Shift in mix and operating leverage are potential tailwinds to Embedded Value/Share 184 221 255 295 342
VNB margins. However, we expect HDFCLI to continue to invest towards Price/ Embedded Value 3.7 3.1 2.7 2.3 2.0
distribution expansion. Therefore, margin uptick should be limited. Price/ VNB 31.0 30.8 25.4 19.9 15.4
Long-term compounding story: The stock trades at 2.3x/2.0x on RoEV (%) 19.7 17.5 16.6 16.7 16.8
FY26ii/FY27ii P/EV. Our TP of Rs730 implies 2.1x 2YF P/EV, offering Solvency ratio (%) 203 187 173 163 153
16%/17% EV/VNB Cagr (FY25ii-27ii). We continue to believe that HDFCLI BVPS 60.5 68.2 74.7 82.3 90.7
is a healthy compounding story and should be accumulated post Source: Company, IIFL Research. Priced as on 08 April 2025
corrections. Maintain ADD. Key risk: Regulations.
Rishi Jhunjhunwala Vishesh Jain
rishi.jhunjhunwala@iiflcap.com vishesh.jain@iiflcap.com
91 22 4646 4686 91 22 4646 4650
HDFC Life – ADD
Figure 1: Since CY24, HDFCLI has maintained healthy growth rates in most months Figure 3: We expect Non-par mix to improve over FY25ii-27ii
Retail APE growth (YoY %) HDFCLI Private Sector Product Mix (Rs bn) FY19 FY20 FY21 FY22 FY23 FY24 FY25ii FY26ii FY27ii
95% ULIP 28.6 17.2 17.1 21.2 21.7 40.5 48.9 55.6 63.1
100%
YoY growth 3% -40% -1% 24% 2% 87% 21% 14% 14%
75% 58% Product Mix 46% 23% 20% 22% 16% 30% 32% 31% 31%
50% Par 9.4 11.7 24.2 24.5 30.8 26.7 23.8 27.4 30.1
28% 30% 34% 21% 25% YoY growth -32% 25% 108% 1% 26% -13% -11% 15% 10%
27% 17% 23% 25%
25% 17% 10%18% 16% 17% 10% 12% Product Mix 15% 16% 29% 25% 23% 20% 16% 15% 15%
7% 13% 3% 1%
0% Non-par 10.4 27.6 25.6 31.0 57.0 41.9 54.5 65.4 77.1
-7% -4%-5% YoY growth 136% 166% -7% 21% 84% -27% 30% 20% 18%
-25% Product Mix 17% 37% 30% 32% 43% 32% 35% 37% 38%
-50% -28% Retail Protection 3.6 4.9 5.0 4.9 4.6 6.0 7.2 8.6 10.3
Dec-23 YoY growth 24% 35% 1% -2% -7% 31% 20% 20% 20%
Dec-24
Apr-23
May-23
Oct-23
Apr-24
May-24
Jan-23
Mar-23
Jun-23
Aug-23
Jun-24
Oct-24
Nov-23
Jan-24
Mar-24
Aug-24
Nov-24
Jan-25
Feb-23
Jul-23
Sep-23
Feb-24
Jul-24
Sep-24
Feb-25
Product Mix 6% 7% 6% 5% 3% 5% 5% 5% 5%
Group 10.6 12.7 12.5 15.9 19.4 17.8 19.2 21.2 23.7
Source: Life Insurance Council, Company, IIFL Research YoY growth 66% 20% -2% 27% 22% -8% 8% 10% 12%
Product Mix 17% 17% 15% 16% 15% 13% 13% 12% 12%
Total APE 62.6 74.1 84.4 97.6 133.4 132.9 153.6 178.1 204.4
Figure 2: HDFCLI has seen broad-based growth across distribution channels during YoY growth 13% 18% 14% 16% 37% 0% 16% 16% 15%
9MFY25 Source: Company, IIFL Research
Distribution Mix* (Rs bn) FY18 FY19 FY20 FY21 FY22 FY23 FY24 9MFY25
Bancassurance 34.7 33.3 33.8 43.4 49.0 63.8 74.8 57.7 Figure 4: We expect HDFC Life to deliver 16% EV Cagr over FY25ii-27ii
YoY growth 29% -4% 1% 29% 13% 30% 17% 24% HDFC Life EV Walk (Rsbn) FY23 FY24 FY25ii FY26ii FY27ii
Mix 70% 64% 55% 61% 60% 56% 65% 64% Opening EV 329.7 395.3 474.7 548.8 635.2
Brokers & Others 2.4 2.1 5.5 5.0 5.7 12.5 6.9 6.5 Unwind 26.2 32.4 38.0 43.9 50.8
YoY growth 31% -15% 166% -10% 15% 119% -45% 43%
Mix 5% 4% 9% 7% 7% 11% 6% 7% VNB 36.7 35.0 39.4 46.4 54.4
Agency 5.4 6.8 8.6 9.3 11.4 22.8 20.7 15.5 Operating assumption changes 0.4 0.3 0.0 0.0 0.0
YoY growth 20% 26% 27% 8% 24% 99% -9% 17% Variance in operating experience 1.5 1.5 1.5 1.5 1.5
Mix 11% 13% 14% 13% 14% 20% 18% 17% Economic assumption/inv. Variance (15.9) 13.5 0.0 0.0 0.0
Direct 6.8 9.9 13.5 13.5 15.5 14.8 12.7 10.1
YoY growth 66% 44% 37% 0% 15% -5% -15% 24% Net Capital Injection 16.7 (3.3) (4.7) (5.4) (6.1)
Mix 14% 19% 22% 19% 19% 13% 11% 11% Closing EV 395.3 474.7 548.8 635.2 735.9
Retail APE 49.4 52.0 61.4 71.2 81.7 114.0 115.1 89.9 VNB Margins (%) 27.5 26.3 25.6 26.0 26.6
YoY growth 31% 5% 18% 16% 15% 40% 1% 24% RoEV 19.7 17.5 16.6 16.7 16.8
Source: Company, IIFL Research; *Basis Retail APE
VNB/share (Rs) 17.1 16.3 18.3 21.6 25.3
EV/share (Rs) 183.9 220.7 255.2 295.3 342.1
Source: Company, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 2
Company snapshot HDFC Life – ADD
Background: HDFC Life was incorporated on 14th Aug’2000 as a joint venture − between HDFC Ltd (HDFC), one of India’s leading housing finance
institutions, and Standard Life Aberdeen (SL), a global long-term investment institution − through its wholly-owned subsidiary, Standard Life Mauritius.
Besides consistently being among the top private life insurers in terms of profitability based on VNB margin, the company has also constantly remained
among the top three private life insurers in terms of market share based on total new business premium.
Management
NEP growth (%) VNB margin (%)
Name Designation 27.5
30.0 28.0
25.3
Keki Mistry Chairperson 23.8 27.0 26.3
25.0 21.3 25.9 26.2 25.8
Vibha Padalkar MD & CEO
20.0 18.3 19.1 26.0
25.0 24.6
Niraj Shah CFO 15.0 11.4
9.2 24.0 23.2
10.0
23.0
5.0
22.0
0.0 21.0
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY18
FY19
FY20
FY21
FY22
FY23
FY24
Key earnings drivers Price/ Embedded Value (x)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Core RoEV (%)
12m fwd PB Avg +/- 1SD
NBP growth 20.4 1.9 14.8 17.5 17.0 25.0
21.5
APE growth 36.6 (0.3) 15.6 15.9 14.8 20.1 19.7 7.0
Conservation ratio 95.3 84.1 84.4 85.4 85.7 20.0 18.1 18.5 17.5 (x)
15.8 6.0
Commission ratio 5.0 8.3 11.2 11.3 11.2
14.7 11.0 9.0 9.2 9.0 15.0 5.0
Opex ratio
VNB Margins 27.5 26.3 25.6 26.0 26.6 10.0 4.0
Inv Yield w unrealized gains 6.1 15.2 10.5 9.5 9.2
3.0
Inv Yield w/o unrealized 8.3 10.3 10.5 9.5 9.2 5.0
gains 2.0
Surrenders & With to AUM 10.6 8.3 8.3 8.3 8.3 0.0
1.0
FY18
FY19
FY20
FY21
FY22
FY23
FY24
Source: Company data, IIFL Research
Nov-17 May-19 Oct-20 Apr-22 Oct-23 Mar-25
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 3
HDFC Life – ADD
Financial summary
Policyholders' Account (Rs m) Balance Sheet (Rs m)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
Premiums earned - Net 568,788 621,121 703,985 818,272 950,961 Shareholders' Funds: 129,931 146,664 160,735 176,963 195,167
Income from Investments 126,044 383,632 316,270 335,573 378,125 Share Capital 21,494 21,509 21,509 21,509 21,509
Other Income 4,651 3,364 3,636 3,925 4,232 Reserve and surplus 108,241 120,649 134,720 150,948 169,152
Contribution from Shareholders' 8,795 1,295 1,489 1,712 1,969 Policyholders' Funds: 2,254,722 2,779,669 3,255,568 3,799,691 4,427,534
Account Policy Liabilities 1,433,448 1,754,443 2,106,948 2,514,871 2,990,908
Total A 708,277 1,009,411 1,025,380 1,159,482 1,335,286 Provision for Linked Liabilities 753,836 921,198 1,041,165 1,173,595 1,321,254
Commission 28,906 52,621 79,896 93,920 109,038 Fair Value change 19,759 60,257 60,257 60,257 60,257
Operating Expenses 84,495 NA NA NA 87,455 Funds for future appropriation 0 0 0 0 0
Benefits Paid (Net) 369,324 369,460 355,575 384,556 440,056 Sources of Funds 2,397,008 2,938,447 3,429,018 3,990,091 4,636,965
Change in valuation of liability 185,902 484,437 472,472 540,353 623,696 Investments - Shareholders 129,319 146,847 160,918 177,146 195,350
Others 3,757 4,119 6,215 7,790 9,002 Investments - Policyholders 2,259,108 2,775,996 3,254,450 3,795,886 4,423,314
Provision for Tax 1,591 (5,924) 2,288 2,751 3,150 Fixed Assets 3,824 4,203 4,414 4,634 4,866
Total B 673,975 973,928 980,925 1,106,137 1,272,397 Net Current Assets (11,097) (7,571) (13,530) (14,895) (19,349)
Surplus/(Deficit) 13,621 7,829 12,013 14,442 16,536 Misc. Expenditure 0 0 0 0 0
Transfer to Shareholders' Account 14,722 8,069 11,413 13,720 15,709 Application of Funds 2,397,008 2,938,447 3,429,018 3,990,091 4,636,965
Note – summation may not equal to the surplus/(deficit) as all P&L items are not shown in the above
statement
Ratio analysis (%)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
Shareholders' Account (Rs m) Growth ratios (%)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Net Premium Income 25.3 9.2 13.3 16.2 16.2
Transfer from Policyholders' account 14,722 8,069 11,413 13,720 15,709 Commission Expenses 49.0 82.0 51.8 17.6 16.1
Income from Investments 7,239 10,066 11,748 12,873 14,172 Operating Expenses 50.5 NA NA NA 13.9
Total A 22,889 18,724 23,160 26,593 29,881 NPAT NA 15.0 19.2 15.3 12.2
Expenses (apart from insurance) 1,518 1,688 1,941 2,233 2,567 EPS NA 14.0 19.1 15.3 12.2
Contribution to Policyholders' Profitability ratios (%)
8,795 1,295 1,489 1,712 1,969 VNB Margins 27.5 26.3 25.6 26.0 26.6
Account
Others (247) 45 0 0 0 Commission To Gross Prem ratio 5.0 8.3 11.2 11.3 11.2
Total B 10,067 3,027 3,430 3,945 4,536 Opex To Gross Prem ratio 14.7 11.0 9.0 9.2 9.0
Profit/(Loss) before tax 12,822 15,697 19,730 22,648 25,345 Mgmt Expenses to Gross Prem ratio 19.7 19.3 20.2 20.5 20.2
Provision for Taxation (861) (44) 969 1,011 1,073 Conservation Ratio 95.3 84.1 84.4 85.4 85.7
Profit/(Loss) after tax 13,683 15,741 18,761 21,638 24,272 Return ratios (%)
Source: Company data, IIFL Research ROE 9.6 11.4 12.2 12.8 13.0
RoEV 19.7 17.5 16.6 16.7 16.8
Solvency Ratio 203.2 186.6 173.2 162.6 153.1
Source: Company data, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 4
ICICI Prudential Life – ADD
09 April 2025
Oct-23
Oct-24
Jun-23
Dec-23
Jun-24
Dec-24
Feb-25
Feb-24
Apr-25
Apr-23
Aug-23
Apr-24
Aug-24
Diversified distribution a strength: IPRU has done well to not be Dividend yield FY26ii (%) 0.5
dependent on any single channel, by creating a diversified distribution Free float (%) 27.0
framework. This makes it less susceptible to all the regulatory noise around Financial summary (Rs m)
open architecture in agency and potential capping of insurance. In fact, in Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
the event of implementation of capping of bancassurance, IPRU would be Net Premium Income 385,596 417,597 462,552 518,746 589,229
net beneficiary. We believe an open architecture regime in agency could VNB 27,650 22,270 22,955 26,114 29,450
negatively impact the industry in the long term. VNB Margins (%) 32.0 24.6 22.2 22.6 22.6
Re-calibration of cost structure a necessity: While IPRU has Reported PAT 8,135 8,507 10,522 13,099 14,633
demonstrated healthy business growth, a re-calibration of the cost Pre-exceptional EPS (Rs) 5.7 5.9 7.3 9.1 10.2
structure would be required for the same to translate into healthy VNB Growth (%) 7.1 4.5 23.6 24.5 11.7
growth. Some other levers of margin improvement would be higher rider Embedded Value/Share 248 294 331 373 420
attachment, increase in sum assured, a higher policy payment term, with the Price/ Embedded Value 2.2 1.9 1.7 1.5 1.3
resultant savings going into margin improvement or further investments. Price/ VNB 17.5 20.0 16.5 12.4 9.0
Maintain ADD: IPRU’s strong franchise makes it an attractive story, but RoEV (%) 17.4 14.1 13.4 13.5 13.5
given the lack of comfort on like-to-like growth in APE and VNB, we believe Solvency ratio (%) 209 192 203 192 193
the stock may remain range-bound. Stock is trading at 1.4x FY26ii P/EV BVPS 70.1 76.4 81.5 87.9 95.0
post the recent correction, and we believe an improvement in margin Source: Company, IIFL Research. Priced as on 08 April 2025
trajectory would be crucial to drive a re-rating.
Rishi Jhunjhunwala Vishesh Jain
rishi.jhunjhunwala@iiflcap.com vishesh.jain@iiflcap.com
91 22 4646 4686 91 22 4646 4650
ICICI Prudential Life – ADD
Figure 1: IPRU saw a very healthy growth in APE during FY25, although the momentum Figure 3: Easing of EOM regulations did see an increase in IPRU’s cost ratios; a re-
has slowed during the past 3 months owing capital market downturn calibration of costs will be needed to drive simultaneous margin improvement
RWRP growth (YoY %) IPRU Life Private Sector Commission First year Premium Single Premium
rates (%) FY24 FY25 FY24 FY25
100%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
75% 72%
59% 57% SBILI
50% 34% 40% Par 24% 29% 26% 18% 25% 24% 36% 2% 2% 2% 2% 2% 2% 0%
21% 28% 29%
33% Non-par 21% 23% 25% 12% 26% 22% 25% 1% 1% 1% 1% 1% 2% 1%
22%
25% 12% 13% 22%28%
9%9%
1%7% 4%12%
8% ULIP 7% 10% 9% 0% 9% 9% 9% 2% 2% 2% 2% 2% 2% 2%
0% -5% Total 13% 15% 13% 4% 15% 13% 13% 1% 1% 1% 1% 1% 2% 2%
-3% -1% HDFCLI
-25% -13% Par NA NA NA NA NA NA NA NA NA NA NA NA NA NA
-31%
-50% Non-par NA NA NA NA NA NA NA NA NA NA NA NA NA NA
ULIP NA NA NA NA NA NA NA NA NA NA NA NA NA NA
Mar-23
Apr-23
Dec-23
May-23
Aug-23
Mar-24
Apr-24
Dec-24
May-24
Aug-24
Jun-23
Oct-23
Jun-24
Oct-24
Jan-23
Nov-23
Jan-24
Nov-24
Jan-25
Feb-23
Jul-23
Sep-23
Feb-24
Jul-24
Sep-24
Feb-25
Total 23% 28% 25% 34% 36% 39% 54% 4% 8% 10% 11% 13% 9% 4%
IPRU
Source: LI Council, Company, IIFL Research Par 35% 59% 57% 61% 55% 59% 54% 0% 0% 0% 0% 0% 0% 3%
Non-par 36% 56% 61% 40% 53% 57% 55% 4% 7% 16% 16% 22% 22% 23%
ULIP 10% 11% 11% 13% 9% 11% 11% 0% 0% 0% 0% 0% 0% 0%
Total 23% 32% 34% 31% 26% 29% 27% 3% 5% 14% 13% 19% 17% 10%
Figure 2: IPRU has managed to create a diversified distribution architecture, with all
distribution channels having delivered during 9MFY25 Source: Company Public Disclosures, IIFL Research
Distribution Mix (Rs bn) FY19 FY20 FY21 FY22 FY23 FY24 9MFY25 Figure 4: We forecast IPRU to deliver APE Cagr of 12% over FY25ii-27ii; and VNB Cagr of
Banca 43.5 37.5 27.3 30.1 25.4 25.9 19.1 13% over the same period, owing to the low base
YoY growth 7% -14% -27% 10% -16% 2% 26%
Mix 56% 51% 42% 39% 29% 29% 28% ICICI Pru Life estimates (%) FY24 FY25ii FY26ii FY27ii
Agency 16.9 15.6 15.4 18.3 22.8 26.4 20.9 30
YoY growth -15% -8% -1% 19% 25% 16% 41% 24.6
25 22.2 22.6 22.6
Mix 22% 21% 24% 24% 26% 29% 30%
Direct 9.3 9.3 8.1 10.0 10.6 12.8 10.6 18.8
20
YoY growth -11% 0% -13% 23% 7% 20% 32% 14.3
15 12.7 12.7 12.7
Mix 12% 13% 13% 13% 12% 14% 15% 12.0 12.7
Others 8.2 11.4 13.8 19.0 27.6 25.4 18.5 10
YoY growth 21% 38% 21% 37% 46% -8% 13% 4.7
Mix 11% 15% 21% 25% 32% 28% 27% 5
Total APE 78.0 73.8 64.6 77.3 86.4 90.5 69.0 0
Source: Company, IIFL Research APE growth (YoY, %) VNB margin (%) EV growth (YoY, %)
Source: Company, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 2
Company snapshot ICICI Prudential Life – ADD
Background: ICICI Prudential Life Insurance Company (IPru Life) is a joint venture between ICICI Bank and Prudential Corporation Holdings (UK). The
company began its operations in FY01 and has consistently remained among the leading private sector life insurance companies in India on a Retail
Weighted Received Premium (RWRP) basis. IPru Life was the first private sector life insurance company to cross the Rs1trn mark in Assets Under
Management (AUM) and total sum assured of Rs3trn. IPru Life offers a range of life, pension, and savings products across traditional and unit-linked
platforms, to provide a range of long-term savings and protection solutions. To strengthen its protection offerings, IPru Life launched new products on
retail, mortgage, and group platforms.
Management
NEP growth (%) VNB margin (%)
Name Designation
25.0 35.0 32.0
Anup Bagchi MD & CEO 21.0 28.0
30.0
20.0 25.1 24.6
Dhiren Salian Chief Financial Officer 25.0 21.7
14.1
15.0
Souvik Jash Appointed Actuary 20.0 16.5 17.0
10.0 7.5 8.3 15.0
6.4 6.2
3.9 10.0
5.0
5.0
0.0 0.0
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY18
FY19
FY20
FY21
FY22
FY23
FY24
Key earnings drivers Price/ Embedded Value (x)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Core RoEV (%)
12m fwd PB Avg +/- 1SD
NBP growth 12.3 7.3 17.3 12.9 13.3 25.0 22.7
APE growth 11.7 4.7 14.3 12.0 12.7 20.2 4.0
Conservation ratio 80.7 84.6 82.6 85.5 87.4 20.0 17.4 (x)
15.2 15.2 14.1
Commission ratio 4.7 8.6 11.3 11.2 11.3
15.0 3.0
Opex ratio 11.5 9.5 9.0 8.7 8.5 11.0
VNB Margins 32.0 24.6 22.2 22.6 22.6 10.0 2.0
Inv Yield w unrealized gains 4.3 18.0 13.4 10.0 9.8
Inv Yield w/o unrealized 7.4 9.6 13.4 10.0 9.8 5.0
1.0
gains 0.0
Surrenders & With to AUM 9.8 11.9 9.5 9.0 9.0
FY18
FY19
FY20
FY21
FY22
FY23
FY24
0.0
Source: Company data, IIFL Research
Apr-17 Nov-18 Jun-20 Jan-22 Aug-23 Mar-25
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 3
ICICI Prudential Life – ADD
Financial summary
Policyholders' Account (Rs m) Balance Sheet (Rs m)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
Premiums earned - Net 385,596 417,597 462,552 518,746 589,229 Shareholders' Funds: 100,895 110,046 117,408 126,577 136,821
Income from Investments 99,646 465,503 390,457 318,678 346,543 Share Capital 14,388 14,410 14,406 14,406 14,406
Other Income 1,516 2,047 3,405 3,916 4,710 Reserve and surplus 83,707 92,183 99,549 108,718 118,961
Contribution from Shareholders' 18,024 17,926 3,585 4,123 4,535 Policyholders' Funds: 2,388,674 2,813,183 3,069,038 3,375,154 3,724,149
Account Policy Liabilities 903,074 1,101,621 1,296,909 1,530,698 1,798,426
Total A 504,782 903,073 860,000 845,464 945,017 Provision for Linked Liabilities 1,352,324 1,579,173 1,628,300 1,687,401 1,753,472
Commission 18,639 37,220 54,122 60,594 69,426 Fair Value change 28,327 50,273 50,273 50,273 50,273
Operating Expenses 45,832 NA NA 46,920 52,179 Funds for future appropriation 16,693 12,866 13,917 15,197 16,656
Benefits Paid (Net) 307,887 397,459 494,712 416,259 455,995 Sources of Funds 2,501,569 2,935,229 3,198,446 3,513,732 3,872,970
Change in valuation of liability 98,170 406,391 244,416 292,891 333,798 Investments - Shareholders 98,468 105,673 113,039 122,208 132,451
Others 0 0 0 0 0 Investments - Policyholders 2,383,690 2,791,606 3,047,806 3,349,949 3,692,144
Provision for Tax 1,842 1,078 1,040 1,267 1,444 Fixed Assets 5,963 7,194 7,553 7,931 8,328
Total B 472,370 883,408 837,481 817,931 912,842 Net Current Assets 304 13,137 8,906 8,276 9,608
Surplus/(Deficit) 23,022 10,892 10,509 12,802 14,589 Misc. Expenditure 0 0 0 0 0
Transfer to Shareholders' Account 20,162 14,719 9,458 11,522 13,130 Application of Funds 2,501,569 2,935,229 3,198,446 3,513,732 3,872,970
Note – summation may not equal to the surplus/(deficit) as all P&L items are not shown in the above
statement
Ratio analysis (%)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
Shareholders' Account (Rs m) Growth ratios (%)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Net Premium Income 6.2 8.3 10.8 12.1 13.6
Transfer from Policyholders' account 20,162 14,719 9,458 11,522 13,130 Commission Expenses 11.4 99.7 45.4 12.0 14.6
Income from Investments 8,800 13,730 7,925 9,608 10,388 Operating Expenses 24.8 NA NA 8.6 11.2
Total A 29,100 28,771 17,383 21,130 23,518 NPAT NA 4.6 23.7 24.5 11.7
Expenses (apart from insurance) 1,152 1,280 1,423 1,581 1,771 EPS NA 4.5 23.6 24.5 11.7
Contribution to Policyholders' Profitability ratios (%)
18,024 17,926 3,585 4,123 4,535 VNB Margins 32.0 24.6 22.2 22.6 22.6
Account
Others 921 359 0 0 0 Commission To Gross Prem ratio 4.7 8.6 11.3 11.2 11.3
Total B 20,097 19,565 5,008 5,704 6,306 Opex To Gross Prem ratio 11.5 9.5 9.0 8.7 8.5
Profit/(Loss) before tax 9,003 9,205 12,375 15,426 17,212 Mgmt Expenses to Gross Prem ratio 16.1 18.2 20.3 19.9 19.8
Provision for Taxation 868 699 1,853 2,327 2,579 Conservation Ratio 80.7 84.6 82.6 85.5 87.4
Profit/(Loss) after tax 8,135 8,507 10,522 13,099 14,633 Return ratios (%)
Source: Company data, IIFL Research ROE 8.5 8.1 9.3 10.7 11.1
RoEV 17.4 14.1 13.4 13.5 13.5
Solvency Ratio 208.9 191.8 203.2 192.4 192.6
Source: Company data, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 4
ICICI Lombard General – BUY
09 April 2025
Oct-23
Oct-24
Jun-23
Dec-23
Jun-24
Dec-24
Feb-25
Feb-24
Apr-25
Apr-23
Aug-23
Apr-24
Aug-24
Dividend yield FY26ii (%) 1.1
Easing of competitive intensity could benefit Motor: Our analysis of
Free float (%) 48.0
the combined ratios (COR) in the Motor portfolio suggests that the gap
between Industry and ILOM’s CORs has widened from 10ppt in 1HFY24 to Financial summary (Rs m)
17ppt in 1HFY25. We expect the requirement for EOM compliance hovering Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
around most insurers will lead to these players going less aggressive within GDPI 210,251 247,761 271,513 312,967 357,555
this segment. As a result, this gap should narrow, providing ILOM an Underwriting Profit (8,898) (9,797) (8,491) (6,932) (5,357)
opportunity to gain market share within this segment. A pickup in new Investment Income 40,477 37,357 44,335 49,305 57,522
vehicle sales will further boost growth potential. Profit before tax 21,125 25,552 35,443 41,931 51,679
Profit after tax 17,291 19,186 26,511 31,365 38,656
Retail Health in good shape; group to bounce back: Recent product
Pre-exceptional EPS (Rs) 35.2 38.9 53.8 63.7 78.5
launches and prior investments made in the retail health segment have led to
the segment growing at 25% YTD for ILOM, 2x industry growth. ILOM remains Growth (%) 36.0 10.6 38.2 18.3 23.2
committed to entering contracts in Group Healthy only if pricing makes sense. PER (x) 50.4 45.6 33.0 27.9 22.6
We believe growth could return in this segment once pricing sanity returns. BVPS (Rs) 211.6 242.7 280.4 325.0 379.9
PB (x) 8.4 7.3 6.3 5.5 4.7
Maintain Buy: We believe ILOM should show a strong trajectory and Dividend payout (%) 27.0 28.2 30.0 30.0 30.0
forecast a GDPI/EPS Cagr of 15%/21% over FY25ii-27ii. We finetune our ROE (%) 17.7 17.2 20.6 21.0 22.3
estimates and maintain BUY with 12-mth TP of Rs2,350 based on 30x 2YF Solvency margin (%) 251 262 268 271 278
EPS. Key risks: Regulations, competitive intensity, M&A. Source: Company, IIFL Research. Priced as on 08 April 2025
Figure 1: Motor OD witnessed moderation in growth in FY23 due to competition. Figure 3: Weakness in the group health business, coupled with the change in accounting
However, FY24 onwards, ILOM saw a recovery in the segment method for long-term policies, has impacted ILOM’s growth in the health segment
Motor OD GDPI growth (YoY %) Motor OD loss ratio (%) Health & PA GDPI growth (yoy%) Health & PA loss ratio (%) (RHS)
35 72.6 30.8 75 50 100
68.9 68.1 90.7 91.7 39.6
30 70 90.2
65.9 40 87.4
25 64.2 62.2 62.063.5 63.563.5 82.1 83.6 83.8 90
61.8 65 32.6 27.3 80.7 79.0
20 18.4 63.5 64.3 30 76.5 78.0 78.2
13.3 65.6 20.8
60 80
15 20 21.8 68.3 69.9 81.3
10.9 59.2 55 77.3 78.9 24.68.1
10 59.0 11.3 10.4 14.2 16.0 15.0 21.5 70
8.2 19.319.3
5 9.4 53.7 11.1 10.0 50 10 7.2 19.2
2.0 13.7
2.8 9.7 60
0 45 0
(0.1)
(5) 40 (10) (4.4) 50
1Q 2Q 3Q (7.9) (9.3) (10.6)
FY FY FY FY FY FY FY FY FY FY FY FY25 FY FY FY (20) 40
1Q 2Q 3Q
14 15 16 17 18 19 20 21 22 23 24 25ii 26ii 27ii
Source: Company, IIFL Research FY FY FY FY FY FY FY FY FY FY FY FY25 FY FY FY
14 15 16 17 18 19 20 21 22 23 24 25ii 26ii 27ii
Figure 2: ILOM has recorded healthy growth rates in the Motor TP segment during FY25, Source: Company, IIFL Research
while also improving its loss ratios. We expect a 12% Cagr in this segment over FY25ii-27ii
Figure 4: Industry COR in Motor saw a modest improvement in FY24; however, the same
Motor TP GDPI growth (YoY %) Motor TP loss ratio (%) has started to peak again in FY25. We expect the requirement for EOM compliance will
40 119.1 130 lead to players going less aggressive in this segment, benefitting ILOM
37.9
35 107.1 120 (%) Industry COR (Motor) ILOM COR (Motor)
105.8
30 97.797.4 110 Industry COR (Overall, RHS) ILOM COR (Overall, RHS)
26.3 100
25 30.1 22.0
22.8 84.4 90 130 125 124 122 126 125
20 90.8 121 121 119 135
26.7 72.266.869.3 11.5 80 118 118 119
120 115
15 12.0 12.0 12.0 70 112 113 114
69.7 74.0 109 106 106 111 108 125
10 7.7 60 110
12.6
5 9.5 10.5 60.2 61.061.0 60.0 50 115
7.6 5.2 51.3 100 116 116
0 40 111 112 114 112 112 112 114 113
2.8 1Q 2Q 3Q 90 105
104 105 105 104 104 104 103
104 103 102
FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 80 95
14 15 16 17 18 19 20 21 22 23 24 25 25ii 26ii 27ii 1Q 1H 9M FY 1Q 1H 9M FY 1Q 1H
Source: Company, IIFL Research FY23 FY24 FY25
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 2
Company snapshot ICICI Lombard General – BUY
Background: ILOM was incorporated on 30th Oct’2000, as a joint venture between ICICIB and Fairfax Financial Holdings. The company commenced
operations in FY02 and has built a large franchise by delivering a diverse set of products in the corporate and retail segments. ILOM registered GDPI of
Rs248bn in FY24. The company’s market share on GDPI basis stood at 8.6% among all non-life insurance insurers and 13.2% among private sector non-
life insurers in FY24. ILOM has maintained market leadership through various cycles of industry evolution since FY04. It became the first private-sector,
non-life insurer in India to reach Rs100bn in GDPI, in FY17.
FY18
FY19
FY20
FY21
FY22
FY23
FY24
Motor - TP,
19.8
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 3
ICICI Lombard General – BUY
Financial summary
Policyholders' Account (Rs m) Balance Sheet (Rs m)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
GDPI 210,251 247,761 271,513 312,967 357,555 Shareholders' Funds 106,061 129,500 148,058 170,014 197,073
Premium on Reinsurance Accepted 7,467 8,181 8,646 10,180 11,981 Share capital 4,911 4,927 4,927 4,927 4,927
Premium on Reinsurance Ceded 62,323 74,286 77,282 88,430 100,994 Reserves and surplus 101,149 124,574 143,132 165,087 192,146
Net Premium 155,396 181,656 202,877 234,716 268,543 Borrowings 350 350 350 350 350
Change in the Unexpired Risk 7,167 12,991 8,655 10,184 11,838 Sources of Funds 106,411 129,850 148,408 170,364 197,423
Reserve Investments - Shareholders' 98,583 115,869 138,156 160,111 187,170
Premium earned - Net 148,229 168,665 194,223 224,532 256,705 Investments - Policyholders' 333,221 373,204 416,431 493,969 570,524
Income other than premiums 32,721 28,856 33,559 36,871 43,112 Loans 0 0 0 0 0
Total A 180,949 197,521 227,782 261,404 299,817 Fixed assets 5,640 7,009 8,709 10,823 13,449
Net claims paid 86,145 100,189 113,284 129,835 147,827 Deferred tax asset 2,653 2,926 3,219 3,541 3,895
Change in Claims Outstanding 21,112 19,206 21,716 24,888 28,338 Net current assets (333,687) (369,157) (418,107) (498,080) (577,615)
Total Claims Incurred (Net) 107,256 119,395 135,000 154,723 176,165 Others 0 0 0 0 0
Net Commission 4,722 30,890 39,169 43,960 49,095 Application of Funds 106,411 129,850 148,408 170,364 197,423
Opex related to insurance business 45,148 28,177 28,544 32,782 36,802 Ratio analysis (%)
Total Expenses 157,126 178,462 202,713 231,465 262,062 Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
Operating profit/(Loss) 23,823 19,059 25,069 29,939 37,755 Growth ratios (%)
Transfer to Shareholders' Account 23,823 19,059 25,069 29,939 37,755 GDPI 17.0 17.8 9.6 15.3 14.2
Note – summation may not equal to the surplus/(deficit) as all P&L items are not shown in the above
Net Premium Income 13.7 13.8 15.2 15.6 14.3
statement
Operating Expenses 9.6 13.6 13.6 14.2 13.2
Shareholders' Account (Rs m) NPAT NA 11.0 38.2 18.3 23.2
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii EPS NA 10.6 38.2 18.3 23.2
Operating profit/(Loss) 23,823 19,059 25,069 29,939 37,755 Profitability Ratios (%)
- Fire Insurance business 5,961 5,037 6,753 7,307 8,283 Retention Rate 71.4 71.0 72.4 72.6 72.7
- Marine Insurance business 229 272 (535) 59 162 Commission To NEP 3.2 18.3 20.2 19.6 19.1
- Misc. Insurance business 17,633 13,750 18,851 22,573 29,310 Opex to NEP 30.5 16.7 14.7 14.6 14.3
Income from Investments 7,317 8,449 10,776 12,434 14,410 Combined Ratio 104.5 103.3 102.9 101.6 100.6
Other income 439 52 0 0 0 Underwriting profit/(loss) % of NEP (6.0) (5.8) (4.4) (3.1) (2.1)
Total Income 31,579 27,559 35,845 42,373 52,165 Operating profit/(loss) % of NEP 16.1 11.3 12.9 13.3 14.7
Total Expenses 10,454 2,007 401 442 486 Return ratios (%)
Profit Before Tax 21,125 25,552 35,443 41,931 51,679 ROE 17.7 17.2 20.6 21.0 22.3
Tax 3,835 6,366 8,932 10,567 13,023 Solvency margin 251.2 262.5 267.7 271.4 278.2
Profit After Tax 17,291 19,186 26,511 31,365 38,656 Investment Leverage 4.2 4.1 4.0 4.1 4.0
Source: Company data, IIFL Research
Source: Company data, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 4
Star Health – BUY
09 April 2025
Oct-23
Dec-23
Oct-24
Jun-23
Feb-24
Jun-24
Dec-24
Apr-24
Feb-25
Apr-23
Aug-23
Aug-24
Apr-25
entry point to own a long-term compounding story. BUY. Dividend yield FY26ii (%) 0.0
Free float (%) 42.0
Price hikes to help normalise loss ratios: To minimize the impact of
medical inflation, STAR has taken a price hike in five of its products up to Financial summary (Rs m)
Jan’25, which contribute to ~65% of its GWP, within the blended range of Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
8-9%. STAR plans to take annual price hikes of 10-12% to pass on GDPI 129,525 152,545 166,831 186,689 215,323
healthcare inflation and avoid a material loss of customers. Underwriting Profit 2,046 903 (3,495) (2,299) (810)
Investment Income 8,403 10,882 13,489 14,171 15,467
ABCD - Growth levers of distribution strategy: With ~761k agents
Profit before tax 8,264 11,289 9,499 11,326 14,057
under them, STAR is well-positioned to grab land in the underpenetrated
Profit after tax 6,186 8,450 7,108 8,475 10,519
insurance market, with better control on commissions. STAR’s 69 Banca
and NBFC tie-ups complement its Agency channel. STAR continues to focus Pre-exceptional EPS (Rs) 10.6 14.4 12.1 14.5 18.0
on small businesses within its corporate portfolio. STAR has also managed Growth (%) NA 35.8 (15.9) 19.2 24.1
to build a strong D2C model second only to Policybazaar. PER (x) 32.9 24.2 28.8 24.1 19.5
BVPS (Rs) 93.4 108.4 120.5 135.0 153.0
Recent correction makes valuations attractive: We see STAR as a
PB (x) 3.7 3.2 2.9 2.6 2.3
strong compounding story (22% EPS Cagr over FY25ii-27ii), and it is
Dividend payout (%) 0.0 0.0 0.0 0.0 0.0
attractively trading at 24X/19X on FY26ii/27ii P/E. However, stronger
execution is needed to re-rate the stock. Near-term moderation in growth, ROE (%) 12.3 14.4 10.6 11.3 12.5
higher combined ratios and risk of composite license are largely priced in. Solvency margin (%) 214 221 211 224 230
Key risks: Composite license, higher competition, regulatory changes. Source: Company, IIFL Research. Priced as on 08 April 2025
Figure 1: GDPI for STAR has grown at 24% over FY18-24; we expect it to grow at 14% Cagr Figure 3: As of Dec’24, STAR had an agency force of more than 760k, with more than 118k
over FY25ii-27ii sponsored agents
GDPI (Rs bn) Growth (YoY %) (RHS) Sponsored health agency force ('000) Number of agents (mn) (LHS)
47%
250 50%
41% 215.3
45% 0.76
37% 37% 186.7 140 0.70 0.80
200 40% 118
166.8 0.63 0.70
30% 152.5 35% 120 111
150 129.5 30% 0.55
100 92 0.60
114.6 0.46
25% 79 0.50
93.9 18% 80 0.36
100 27% 15% 20% 59
68.7 22% 13% 12% 0.29 0.40
54.2 9% 15% 60
41.6 40 0.30
50 20.1 29.6 10% 40 28 0.20
5%
0 0% 20 0.10
FY25ii
FY26ii
FY27ii
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
0 0.00
FY19 FY20 FY21 FY22 FY23 FY24 9MFY25
Source: Company, IIFL Research Source: Company, IIFL Research
Figure 2: We expect loss ratios to gradually improve over FY26ii/FY27ii, as the full effect Figure 4: While FY25 has been a year of normalisation, we expect STAR’s PAT grow at a
of the price hikes will be implemented 22% Cagr over FY25ii-27ii
Net incurred claims ratio (% of NEP) Net expense ratio (% of NWP)
PAT (Rsbn) Underwriting profit (Rsbn)
Combined ratio (%)
140% 122% 118%
15 1.6 2.0 0.9 5
103% 103% 101% 100% 99% 0.3 0.5 0.3
95% 97% 99% (0.8)
93% 94% 93% 94%
87% 10 (3.5) (2.3) 0
90% 73% 71% 70% 70% 69%
62% 64% 66% 65% 66% 68% 5 -5
1.2 1.7 1.3 2.6 6.2 8.5 7.1 8.5 10.5
0 -10
40% (10.9) (10.4)
(5) -15
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 2
Company snapshot Star Health – BUY
Background: STAR was incorporated on 17th Jun’05 and was granted its certificate to carry out the business of General Insurance by a certificate dated
16th Mar’06 given by the IRDAI. From being the first standalone health insurance (SAHI) company established in India in 2006, it has grown into the
largest SAHI in the overall health insurance market in India. STAR is India’s largest retail health insurer, with the company’s market share in the attractive
retail health insurance market at 33% among all non-life insurers in FY24, over 3x the market share of the second-largest player. STAR registered GDPI
of Rs152.5bn in FY24. STAR boasts of a strong agency network of more than 700k agents as of FY24, which comprised 82% of its GDPI mix as of FY24.
FY18
FY19
FY20
FY21
FY22
FY23
FY24
5.0 81.8
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Star Health – BUY
Financial summary
Policyholders' Account (Rs m) Balance Sheet (Rs m)
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
GDPI 129,525 152,545 166,831 186,689 215,323 Shareholders' Funds 65,889 67,318 74,426 82,902 93,421
Premium on Reinsurance Accepted 0 0 0 0 0 Share capital 5,817 5,853 5,853 5,853 5,853
Premium on Reinsurance Ceded 6,328 11,871 12,792 15,246 19,711 Reserves and surplus 60,072 61,465 68,573 77,049 87,568
Net Premium 123,196 140,674 154,039 171,443 195,612 Borrowings 4,700 4,700 4,700 4,700 4,700
Change in the Unexpired Risk 10,581 11,291 6,883 7,666 8,749 Sources of Funds 70,589 72,018 79,126 87,602 98,121
Reserve Investments - Shareholders' 53,459 63,361 70,524 79,000 89,519
Premium earned - Net 112,616 129,383 147,156 163,777 186,863 Investments - Policyholders' 80,462 91,548 105,280 121,072 139,233
Income other than premiums 5,014 6,407 7,873 8,488 9,501 Loans 0 0 0 0 0
Total A 117,630 135,790 155,029 172,265 196,364 Fixed assets 1,113 1,751 1,839 1,931 2,027
Net claims paid 74,182 85,348 102,347 113,016 127,390 Deferred tax asset 5,689 3,582 3,582 3,582 3,582
Change in Claims Outstanding (978) 651 781 862 972 Net current assets (81,451) (91,090) (104,965) (120,849) (139,106)
Total Claims Incurred (Net) 73,204 85,999 103,128 113,879 128,362 Others 11,316 2,866 2,866 2,866 2,866
Net Commission 16,828 18,537 22,065 24,355 27,545 Application of Funds 70,589 72,018 79,126 87,602 98,121
Opex related to insurance business 20,538 23,944 25,458 27,842 31,767 Ratio analysis (%)
Total Expenses 110,570 128,480 150,651 166,076 187,673 Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii
Operating profit/(Loss) 7,060 7,309 4,378 6,189 8,691 Growth ratios (%)
Transfer to Shareholders' Account 7,060 7,309 4,378 6,189 8,691 GDPI 13.0 17.8 9.4 11.9 15.3
Note – summation may not equal to the surplus/(deficit) as all P&L items are not shown in the above
Net Premium Income 14.8 14.9 13.7 11.3 14.1
statement
Operating Expenses NA NA NA NA 40.4
Shareholders' Account (Rs m) NPAT NA NA NA NA 24.1
Y/e 31 Mar, Parent FY23A FY24A FY25ii FY26ii FY27ii EPS NA NA NA NA 24.1
Operating profit/(Loss) 7,060 7,309 4,378 6,189 8,691 Profitability Ratios (%)
- Fire Insurance business 0 0 0 0 0 Retention Rate 95.1 92.2 92.3 91.8 90.8
- Marine Insurance business 0 0 0 0 0 Commission To NEP 14.9 14.3 15.0 14.9 14.7
- Misc. Insurance business 7,060 7,309 4,378 6,189 8,691 Opex to NEP 18.2 18.5 17.3 17.0 17.0
Income from Investments 3,331 4,434 5,576 5,642 5,925 Combined Ratio 95.3 96.7 100.9 100.0 99.0
Other income 57 41 41 41 41 Underwriting profit/(loss) % of NEP 1.8 0.7 (2.4) (1.4) (0.4)
Total Income 10,449 11,784 9,995 11,871 14,657 Operating profit/(loss) % of NEP 6.3 5.6 3.0 3.8 4.7
Total Expenses 2,185 496 496 545 600 Return ratios (%)
Profit Before Tax 8,264 11,289 9,499 11,326 14,057 ROE 12.3 14.4 10.6 11.3 12.5
Tax 2,078 2,838 2,391 2,851 3,538 Solvency margin 213.6 220.7 211.2 224.3 230.4
Profit After Tax 6,186 8,450 7,108 8,475 10,519 Investment Leverage 2.4 2.4 2.4 2.5 2.5
Source: Company data, IIFL Research
Source: Company data, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 4
Bajaj Finserv – ADD
09 April 2025
Oct-23
Oct-24
Jun-23
Dec-23
Jun-24
Dec-24
Feb-25
Feb-24
Apr-25
Apr-23
Aug-23
Apr-24
Aug-24
majority of COF-led repricing behind, 2) credit costs eventually moderate Dividend yield FY26ii (%) 0.0
3QFY26 onwards, and 3) BAF’s Fin-AI-led tech initiatives drive opex Free float (%) 39.0
efficiencies (~70bps C/I decline). However, they are watchful of evolving Financial summary (Rs bn)
AQ trends, especially given the continued CE weakness/higher flow rates in Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii
2W, used car, LAP, urban B2C segments. NII 293 367 448 532 655
BAGIC – Scope for improvement in COR: We expect BAGIC to deliver PPOP 200 260 334 397 494
16% GDPI Cagr over FY25ii-27ii, potentially driven by healthy traction in Reported PAT 64 81 107 128 161
the Health and Commercial business lines. We expect combined ratio EPS (Rs) 40.3 51.1 66.9 80.1 100.7
(reported) to improve by ~230bps over the same period, driven by an Growth (%) 40.7 26.8 31.0 19.6 25.8
improvement in loss ratios, particularly in Motor and Health LOBs. As a IIFL vs consensus (%) 11.8 10.7 10.4
result, we expect an 18% EPS Cagr over FY25ii-27ii. PER (x) 47.2 37.2 28.4 23.8 18.9
Book value (Rs) 292 379 444 523 622
BALIC – Focus on profitable growth: Since FY16-24, BALIC has seen
PB (x) 6.5 5.0 4.3 3.6 3.1
strong growth at a 31% Cagr in terms of Individual Rated New Business
(IRNB) premium, much faster than the overall industry/private players at CAR (%) 0.0 0.0 0.0 0.0 0.0
12%/16%. BALIC now has renewed focus on driving profitable growth ROA (%) 1.7 1.7 1.8 1.8 1.9
through a higher share of traditional products in the business mix. We ROE (%) 14.8 15.3 16.3 16.6 17.6
estimate a 15% APE Cagr over FY25ii-27ii, while margins are expected to Source: Company, IIFL Research. Priced as on 08 April 2025
expand by 200bps, leading to a 23% VNB Cagr over FY25ii-27ii.
Rishi Jhunjhunwala Vishesh Jain
rishi.jhunjhunwala@iiflcap.com vishesh.jain@iiflcap.com
91 22 4646 4686 91 22 4646 4650
Bajaj Finserv – ADD
Figure 1: We expect BAGIC to deliver 16% GDPI Cagr over FY25ii-27ii Figure 3: Our SOTP of BJFIN stands at Rs1,920/share
GDPI Breakup (Rs bn) Amount Rs bn Basis Value Multiple Stake Value of % in Value/
Fire Motor - OD (x) (%) stake (Rs bn) total share
Motor - TP Marine (Rs)
Health Crop BALIC P/EV 312 2.0 74.0 462 12.2 290
350 Others GDPI Growth (yoy, RHS) 40% BAGIC P/E 28 30.0 74.0 611 16.1 380
34 BAF P/BV 1,307 4.0 51.3 2,706 71.2 1,700
300 Bajaj Markets P/BV 8 1.0 80.1 6 0.2 4
30 30%
250 34
Bajaj Finserv Health P/BV 11 1.0 100.0 11 0.3 7
25
24 31 20%
Bajaj Finserv AMC P/BV 5 1.0 100.0 5 0.1 3
200 Total 3,802 100.0 2,380
27 114
17 28 Holdco. Discount (%) 20
150 15 14 15 95 10%
13 28 67 79 Cash and cash equivalents 20
100 25 21 4 5
15 26 31 3 38
23 22 21 32 3 3 32 35 0%
Target price (Rs) 1,920
2 2 2 2 30 31
50 31 27 28 31 35 38 Source: Company, IIFL Research
28 24 27
21 9 21 20 17 20 22 24 29 34
0 12 19 26 -10%
FY19 FY20 FY21 FY22 FY23 FY24 FY25ii FY26ii FY27ii
Figure 4: Value of BJFIN’s holding in BAF is currently at 92% of its own market cap
Source: Company, IIFL Research
BJFIN mkt cap (Rsbn) BAF value to BJFIN (Rsbn)
Figure 2: BALIC - Focus on mass affluent segment, along with shift away from single & 3,500
group premiums to retail business has resulted in a rebound since FY16 3,000
Retail APE (Rs bn) Retail APE growth (YoY %) 2,500
70 60%
63.3 2,000
49.4%
60 40.9% 50% 1,500
38.3% 52.141.4%
47.4 40% 1,000
50 28.0%
24.7% 30% 500
40 36.9 18.6%20%
10.6% 21.3% 0
Apr-17
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
Apr-23
Apr-24
Apr-25
Oct-17
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Oct-23
Oct-24
30 24.7 10%
-7.5% 19.3
17.4 0%
20 14.0
7.8 7.2 10.1 -10%
Source: Bloomberg, Company, IIFL Research
10 -20%
-22.7%
0 -30%
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY249MFY25
Source: Company, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 2
Company snapshot Bajaj Finserv – ADD
Background: Bajaj Finserv is the holding company under which there are three key financial sector businesses. Bajaj Finance (BAF), which itself is listed,
the lending arm, provides financing for two-wheelers, consumer durables, housing, small businesses, construction equipment and infrastructure finance.
BAF's AUM as of FY24 was Rs3.31trn. BALIC, the Life Insurance subsidiary, earned total premium income of Rs227bn as of FY24. BAGIC, the General
Insurance subsidiary, is the No.2 private non-life insurer in India with a Gross Direct Premium Income of Rs205bn as of FY24. The company also has
established a presence in the Marketplace, Health Management, and AMC businesses.
Management (%) Trend in CASA and margins (%) (%) Asset quality trends
NIM CASA GNPA NNPA
Name Designation
0 1.9
Sanjiv Bajaj Chairman & MD 10.5
-0.2 1.7
10.0
Ramandeep Singh Sahni CFO 1.5
9.5 -0.4
1.3
President (Insurance & Special -0.6 1.1
S Sreenivasan 9.0
Projects) 0.9
8.5 -0.8
0.7
8.0 -1 0.5
7.5 -1.2 0.3
FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 3
Bajaj Finserv – ADD
Financial summary
Income statement summary (Rs bn) Ratio analysis - I
Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii
Net interest income 293 367 448 532 655 Balance Sheet Structure Ratios (%)
Non-interest income 406 552 378 424 493 Loans / Deposits 0.0 0.0 0.0 0.0 0.0
Fee Income 405 552 378 424 492 Loan Growth 26.4 35.1 22.1 24.4 24.6
Portfolio gains 0 0 0 0 0 Deposit Growth 0.0 0.0 0.0 0.0 0.0
Others 0 0 0 0 0 Total Assets Growth 21.5 32.7 19.0 21.4 22.0
Total operating income 699 920 826 955 1,148 Profitability Ratios (%)
Total operating expenses 499 660 492 559 654 Net Interest Margin 9.8 9.4 8.9 8.5 8.4
Pre provision operating profit 200 260 334 397 494 ROA 1.7 1.7 1.8 1.8 1.9
Total provisions 32 46 77 90 108 ROE 14.8 15.3 16.3 16.6 17.6
Profit before tax 168 214 257 307 386 Non-Int Income as % of Total Income 49.4 50.0 35.2 33.8 32.4
Taxes 46 58 65 77 97 Net Profit Growth 40.8 27.0 31.2 19.6 25.8
Net profit-pre exceptional 64 81 107 128 161 FDEPS Growth 40.7 26.8 31.0 19.6 25.8
Exceptional items 0 0 0 0 0 Efficiency Ratios (%)
Reported net profit 64 81 107 128 161 Cost to Income Ratio 71.4 71.7 59.6 58.5 57.0
Salaries as % of Non-Interest costs 17.6 15.7 15.7 16.0 16.2
Balance sheet summary (Rs bn) Ratio analysis - II
Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii
Net loans & advances 2,462 3,327 4,062 5,051 6,294 Credit Quality Ratios (%)
Placements to other banks 0 0 0 0 0 Gross NPLs as % of loans 0.9 0.9 1.2 1.1 1.0
Cash & equivalents 54 124 110 96 83 NPL coverage ratio 63.8 57.0 57.2 62.3 59.4
Investments 955 1,184 645 744 856 Total prov charges as % avg loans 0.7 0.6 0.8 0.8 0.7
Total interest-earning assets 3,471 4,635 4,816 5,891 7,233 Net NPLs as % of net loans 0.3 0.4 0.5 0.4 0.4
Fixed assets 38 50 47 51 54 Capital Adequacy Ratios (%)
Other assets 101 144 166 190 217 Total CAR 0.0 0.0 0.0 0.0 0.0
Total assets 4,055 5,379 6,399 7,769 9,483 Tier I capital ratio 0.0 0.0 0.0 0.0 0.0
Customer deposits 0 0 0 0 0 Source: Company data, IIFL Research
Borrowings 2,114 2,876 3,546 4,446 5,587
Total interest-bearing liabilities 2,114 2,876 3,546 4,446 5,587
Non-interest-bearing liabilities 1,477 1,900 2,144 2,489 2,903
Total liabilities 3,591 4,776 5,690 6,935 8,489
Total Shareholders' equity 464 603 708 834 993
Total liabilities & equity 4,055 5,379 6,399 7,769 9,483
Source: Company data, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 4
Medi Assist Healthcare – BUY
09 April 2025
Nov-24
Sep-24
Jul-24
Jan-24
Mar-24
May-24
Jan-25
Mar-25
Paramount acquisition solidifies industry leadership: Paramount TPA Dividend yield FY26ii (%) 0.7
is the second-largest TPA by premiums in the group health insurance Free float (%) 79.4
segment. The acquisition added 6.2ppt/4ppt to MEDI’s FY24 group
health/(group + retail health) market share of the overall health industry, Financial summary (Rs m)
taking the total to 36.6%/23.6%. This further consolidates MEDI’s industry Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii
leadership and augments its technology strengths and cost efficiencies. Revenues (Rs m) 5,049 6,347 7,243 9,611 11,598
Ebitda margins (%) 23.6 21.0 21.4 19.8 22.0
Strong profitability in a competitive industry: MEDI’s technology and
Pre-exceptional PAT (Rs m) 741 879 900 845 1,405
automation capabilities have helped achieve employee costs at 40% of
Reported PAT (Rs m) 741 669 900 845 1,405
revenues, vs. other TPAs operating at 55-60% levels. This explains MEDI’s
huge differential vs. peers in terms of Ebitda margins. MEDI’s use of Pre-exceptional EPS (Rs) 10.7 12.5 12.7 11.9 19.9
technology, including leveraging its domain expertise and scale, could Growth (%) 20 17.6 1.5 -6 66.4
generate operational efficiencies, enabling it to revert to its historical IIFL vs consensus (%) (1.0) (15.3) 0.9
margin levels post the integration of all acquisitions. PER (x) 42.7 36.3 35.8 38.1 22.9
ROE (%) 20.8 20.7 18.1 15.2 21.9
Reasonable valuations, strong compounding: We see MEDI as a strong
Net debt/equity (x) (0.6) (0.4) (0.6) (0.1) (0.3)
compounding story, and the recent acquisition of Paramount TPA further
EV/Ebitda (x) 24.1 21.8 18.6 16.4 11.5
strengthens MEDI’s position as an industry leader. Its asset-light, tech-led,
Price/book (x) 8.3 6.6 6.1 5.4 4.6
negative-working capital business model is comparable to sectors like
depositories. The stock is trading attractively at 38x/23x on FY26ii/FY27ii OCF/Ebitda (x) 0.9 0.6 0.9 0.8 0.9
P/E. Key risks: Competition, client concentration. Source: Company, IIFL Research. Priced as on 08 April 2025
Figure 1: The combined entity (MEDI + Raksha + Medvantage) administered ~19.8% of Figure 3: We expect 27% revenue Cagr over FY25-27ii, driven by Paramount acquisition
the total corporate + retail health insurance premiums during 9MFY25 while margins are expected to dilute in FY26 due to acquisition integration
Health Insurance industry premiums market share (%) Revenue (Rs mn) Ebitda margins (%)
32.9%
FY20 FY21 FY22 FY23 FY24 9MFY25 14,000 29.8% 35%
40% 11,598
12,000 25.7% 30%
30% 23.4% 23.2% 23.6% 9,611
30% 28% 29%
26%
10,000 21.0% 25%
23%24% 8,000 7,243
6,347 21.4% 20%
22.0%
18%20%20% 6,000 5,049 19.8% 15%
20% 15% 17% 3,938
3,186 3,227
15% 4,000 2,318 2,768 10%
10% 5% 4% 5% 5% 6% 6% 2,000 5%
- 0%
FY25ii
FY26ii
FY27ii
FY18
FY19
FY20
FY21
FY22
FY23
FY24
0%
Retail + Group Retail Group
Figure 2: Revenue and margin trajectory of Paramount Figure 4: We see MEDI as a strong compounding story and the recent acquisition of
Particulars (Rs mn) FY22 FY23 FY24 Paramount TPA further strengthens MEDI’s position as an industry leader
Revenue from operations* 1,129 1,352 1,533 Mcap Cagr (FY25-27E) P/E Multiple ROE
Company
Reported Ebitda** 55 73 63 (USDmn) Rev Ebitda PAT FY26E FY27E FY26E
Reported Ebitda margin (%) 4.9% 5.4% 4.1% TPA 27% 28% 25% 38.5 23.1 15%
Adjusted Ebitda*** NA NA 133 Medi Assist 372 27% 28% 25% 38.5 23.1 15%
Adjusted Ebitda margin (%) NA NA 8.7% Non-life Insurers 14% NA 21% 23.8 21.0 16%
Reported PAT 59 96 75 ICICI Lombard 10,209 15% NA 21% 26.9 22.6 20%
PAT margin (%) 5.2% 7.1% 4.9% Star Health 2,383 14% NA 22% 20.7 19.5 11%
Net Cash Balance (MTM basis) NA NA 111 Depositories 14% 15% 15% 40.1 33.8 35%
Source: Company CAMS 2,048 11% 11% 11% 35.2 30.4 42%
*FY24 numbers exclude discontinued business Kfin tech 2,051 16% 18% 19% 45.0 37.3 27%
**Reported Ebitda excludes discontinued business for FY24
Source: Company, Bloomberg, IIFL Research
***On continuing in-hand basis post-closing
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 2
Company snapshot Medi Assist Healthcare – BUY
Background: Medi Assist Healthcare Services provides third-party administration services to insurance companies through its wholly owned subsidiaries
Medi Assist TPA and Raksha TPA. As a third-party administrator, the company acts as a facilitator between (a) insurance companies and their policyholders,
(b) insurance companies and healthcare providers (such as hospitals), and (c) the Government and beneficiaries of public health schemes. The company
has developed a pan-India healthcare provider network that comprises 18,754 hospitals across 1,069 cities and towns and 31 states (including union
territories) in India. During FY24, Medi Assist managed premiums of ~Rs191bn and generated revenue of Rs6,347mn in FY24, with Ebitda margin of
21.0%.
Management
Market share Revenue split (%)
Name Designation 50% 46%
Others International Government
Dr Vikram Jit Singh Chhatwal Chariman & Whole-Time Drector 40% Retail Corporate
30%
Satish Gidugu CEO & Whole-Time Director 30% 19%
120
1 1 4 3 2 2 1
20% 100
Sandeep Daga CFO 6% 19 17 17 15 11 10 10
10% 80 13 11 12
15 18 16 16
0% 60
Health (FY23)
Health (FY23)
Group Health
Insurance Retail
Health (FY24)
TPA Group
TPA Retail
Insurance
40 74 75 72
Overall
66 64 66
(FY24)
63
Overall
20
0
FY22
FY24
FY18
FY19
FY20
FY21
FY23
Assumptions PE Chart EV/Ebitda
Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii 12m fwd EV/EBITDA Avg +/- 1SD
12m fwd PE Avg +/- 1SD
Revenue growth (YoY %) 28.2 25.7 14.1 32.7 20.7
Premium under 145.7 190.5 223.0 297.1 369.9 30.0
management (Rs bn) (x) (x)
54.0 27.0
Headcount (No.) 5,407.0 6,140.0 6,530.9 8,796.6 8,785.6 50.0
Employee expenses as % 39.2 40.1 42.6 42.6 41.8 24.0
46.0
of revenue 21.0
Other expenses as % of 37.2 38.9 36.0 37.6 36.2 42.0
18.0
revenue 38.0
Ebitda margin (%) 23.6 21.0 21.4 19.8 22.0 15.0
34.0
PBT margin (%) 20.5 13.3 15.3 11.5 16.1
30.0 12.0
Tax rate (%) 27.3 15.5 18.0 23.0 24.0 Jan-24 Apr-24 Jul-24 Oct-24 Dec-24 Mar-25
Jan-24 Apr-24 Jul-24 Oct-24 Dec-24 Mar-25
Source: Company data, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 3
Medi Assist Healthcare – BUY
Financial summary
Income statement summary (Rs m) Balance sheet summary (Rs m)
Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii
Revenues 5,049 6,347 7,243 9,611 11,598 Cash & cash equivalents 2,542 2,329 3,167 958 2,610
Ebitda 1,193 1,333 1,552 1,902 2,553 Inventories 0 0 0 0 0
Depreciation and amortisation (268) (431) (567) (739) (742) Receivables 1,272 1,786 1,905 2,835 2,885
Ebit 926 902 985 1,163 1,811 Other current assets 607 662 724 961 1,160
Non-operating income 140 183 210 32 144 Creditors 364 426 509 758 729
Financial expense (30) (32) (85) (85) (85) Other current liabilities 2,254 2,619 2,842 3,752 4,501
PBT 1,036 1,054 1,110 1,109 1,870 Net current assets 1,803 1,732 2,444 245 1,424
Exceptionals 0 (210) 0 0 0 Fixed assets 543 547 342 3,009 2,615
Reported PBT 1,036 844 1,110 1,109 1,870 Intangibles 1,172 1,948 1,948 1,948 1,948
Tax expense (283) (131) (200) (255) (449) Investments 129 245 245 245 245
PAT 753 713 910 854 1,421 Other long-term assets 792 989 1,108 1,416 1,788
Minorities, Associates etc. (12) (44) (9) (9) (16) Total net assets 4,439 5,461 6,087 6,863 8,021
Attributable PAT 741 669 900 845 1,405 Borrowings 307 263 263 263 263
Other long-term liabilities 366 480 566 708 812
Ratio analysis Shareholders equity 3,766 4,717 5,258 5,891 6,945
Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii Total liabilities 4,439 5,461 6,087 6,863 8,021
Per share data (Rs)
Pre-exceptional EPS 10.7 12.5 12.7 11.9 19.9 Cash flow summary (Rs m)
DPS 1.9 4.0 5.1 3.0 5.0 Y/e 31 Mar, Consolidated FY23A FY24A FY25ii FY26ii FY27ii
BVPS 54.7 68.4 74.7 83.6 98.5 Ebit 926 902 985 1,163 1,811
Growth ratios (%) Tax paid (283) (131) (200) (255) (449)
Revenues 28.2 25.7 14.1 32.7 20.7 Depreciation and amortization 268 431 567 739 742
Ebitda 30.8 11.7 16.4 22.5 34.3 Net working capital change 295 (144) 178 51 512
EPS 20.0 17.6 1.5 (6.0) 66.4 Other operating items (135) (317) (95) (235) (325)
Profitability ratios (%) Operating cash flow before interest 1,071 741 1,436 1,462 2,292
Ebitda margin 23.6 21.0 21.4 19.8 22.0 Financial expense 110 152 125 (53) 59
Ebit margin 18.3 14.2 13.6 12.1 15.6 Non-operating income 0 0 0 0 0
Tax rate 27.3 15.5 18.0 23.0 24.0 Operating cash flow after interest 1,181 893 1,560 1,409 2,351
Net profit margin 14.9 11.2 12.6 8.9 12.3 Capital expenditure (586) (673) (362) (288) (348)
Return ratios (%) Long-term investments (345) (653) 0 (3,118) 0
ROE 20.8 20.7 18.1 15.2 21.9 Others 36 (18) 0 0 0
ROIC ex goodwill 25.6 22.1 19.7 14.7 17.0 Free cash flow 286 (452) 1,198 (1,997) 2,003
Solvency ratios (x) Equity raising (216) 558 0 0 0
Net debt-equity (0.6) (0.4) (0.6) (0.1) (0.3) Borrowings 32 (43) 0 0 0
Net debt to Ebitda (1.9) (1.5) (1.9) (0.4) (0.9) Dividend (130) (276) (360) (211) (351)
Interest coverage 31.0 28.5 11.6 13.7 21.3 Net chg in cash and equivalents (28) (214) 838 (2,209) 1,652
Source: Company data, IIFL Research Source: Company data, IIFL Research
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 4
India - Insurance
IIFL Capital Services Limited (Formerly known as IIFL Securities Limited), CIN No.: L99999MH1996PLC132983, Corporate Office – IIFL Securities Ltd. 24th Floor, One Lodha Place, Senapati Bapat Marg, Lower Parel,
Mumbai – 400013 Tel: (91-22) 4249 9000 Fax: (91-22) 4060 9049, Regd. Office – IIFL House, Sun Infotech Park, Road No. 16V, Plot No. B-23, MIDC, Thane Industrial Area, Wagle Estate, Thane – 400604 Tel: (91-22)
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INA000000623, RA SEBI Regn. No. INH000000248, Merchant Banking SEBI Regn. No. INM000010940, AMFI Regn. No. ARN - 47791
Distribution of Ratings: Out of 296 stocks rated in the IIFL coverage universe, 149 have BUY ratings, 5 have SELL ratings, 103 have ADD ratings, 1 have NR ratings and 37 have REDUCE ratings
Price Target: Unless otherwise stated in the text of this report, target prices in this report are based on either a discounted cash flow valuation or comparison of valuation ratios with companies seen by the analyst as
comparable or a combination of the two methods. The result of this fundamental valuation is adjusted to reflect the analyst’s views on the likely course of investor sentiment. Whichever valuation method is used the re
is a significant risk that the target price will not be achieved within the expected timeframe. Risk factors include unforeseen changes in competitive pressures or in the level of demand for the company’s products. Such
demand variations may result from changes in technology, in the overall level of economic activity or, in some cases, in fashion. Valuations may also be affected by changes in taxation, in exchange rates and, in certain
industries, in regulations. Investment in overseas markets and instruments such as ADRs can result in increased risk from factors such as exchange rates, exchange controls, taxation, and political and social conditions.
This discussion of valuation methods and risk factors is not comprehensive – further information is available upon request.
i. Investments in securities market are subject to market risks. Read all the related documents carefully before investing.
ii. Mutual Funds Investments are subject to market risk. Please read the offer and scheme related documents carefully before investing.
iii. Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary
or provide any assurance of returns to investors
Jul-23
Jul-24
Apr-25
Apr-22
Apr-23
Apr-24
Jan-23
Jan-24
Oct-24
Jan-25
Oct-22
Oct-23
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 21
India - Insurance
Date Rating Close price Target price Upside Date Rating Close price Target price Upside
ICICI Pru Life: 3 year price and rating history (Rs) (Rs) (%)
(Rs) (Rs) (%)
(Rs) Price TP/Reco changed date 22 Jan 2025 ADD 636 750 17.9 21 Apr 2023 BUY 456 610 33.8
10 Jan 2025 ADD 647 780 20.6 17 Apr 2023 BUY 443 570 28.7
1,000 11 Oct 2024 ADD 746 800 7.2 19 Jan 2023 BUY 485 630 29.9
800 13 Sep 2024 ADD 756 750 -0.8 11 Oct 2022 BUY 516 680 31.8
600 24 Jul 2024 ADD 638 700 9.7 18 Jul 2022 BUY 517 665 28.6
400 24 Apr 2024 ADD 594 600 1.0 13 Jul 2022 BUY 526 650 23.6
200 16 Apr 2024 ADD 617 630 2.1 18 Apr 2022 BUY 541 710 31.2
0 19 Jan 2024 ADD 486 550 13.2 13 Apr 2022 BUY 535 660 23.4
11 Jan 2024 BUY 541 670 23.8
Jul-22
Jul-23
Jul-24
Apr-25
Apr-22
Apr-23
Apr-24
Jan-23
Jan-24
Oct-24
Jan-25
Oct-22
Jul-23
Jul-24
Apr-25
Apr-22
Apr-23
Apr-24
Jan-23
Jan-24
Oct-24
Jan-25
Oct-22
Oct-23
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 22
ICICI Lombard General – BUY
Jul-23
Jul-24
Apr-25
Apr-22
Apr-23
Apr-24
Jan-23
Jan-24
Oct-24
Jan-25
Oct-22
Oct-23
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 8
Star Health – BUY
Jul-23
Jul-24
Apr-25
Apr-22
Apr-23
Apr-24
Jan-23
Jan-24
Oct-24
Jan-25
Oct-22
Oct-23
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 8
Bajaj Finserv – ADD
Jul-23
Jul-24
Apr-25
Jan-24
Apr-22
Apr-23
Apr-24
Jan-23
Jan-25
Oct-22
Oct-23
Oct-24
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 8
Medi Assist Healthcare – BUY
Jul-24
Jan-24
Apr-24
Jan-25
Oct-24
ri sh i .j h u n j h u n wal a@ iifl ca p. c om 8
India - Coal Sector update
09 April 2025
Auctioned mines ramping up well Figure 1: Domestic coal production reached 1.05bn tonne in FY25, while
DDdispatches
MMM YYYY
stood at 1.025bn tonne
Domestic coal production in India stood at 1.05bn tonne in
FY25, supported by healthy ramp-up of production from CIL SCCL Captive/Commercial
1,100
captive/commercial coal blocks, which contributed 48.5% of 1,000
m tonne
155mn tonne of absolute incremental production over FY24- 900
25. 4Q/Mar’25 production run rate suggests FY26-27 would be 800
stronger as well. This, combined with growing 700
renewable/nuclear capacities, which would limit demand from 600
thermal power plants, would mean that offtake growth for Coal 500
India would be sluggish. Assuming maximum possible import 400
300
substitution, we see 5% offtake growth for Coal India in the
200
base case of 5.3% power demand growth over FY25-30. This 100
would pressurise e-auction realisations and hence, -
profitability, going ahead. FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
Captive/commercial blocks drive production growth in FY25:
Source: Ministry of Coal, IIFL Research
Domestic coal production in India crossed the 1bn tonne landmark in
FY25 to stand at 1.05bn tonne (up 5% yoy and clocking 10% Cagr
Figure 2: Production from captive/commercial mines (auctioned & allocated) has
over FY22-25). Over FY24-25, off the absolute incremental volume of ramped up well and should continue to rise sharply over FY26-30. 125 mines have been
155m tonne, while Coal India contributed 78m tonne, captive and auctioned till date (post 2020) with PRC of 273m tonne for explored mines.
commercial coal blocks contributed a similar 75m tonne. FY25
production from captive/commercial blocks stood at 198m tonne, but 400
m tonne
production run rate was much higher for 4QFY25 (269m tonne 350
annualised) and Mar’25 (355m tonne annualised). FY26-30 should 300
continue to see healthy domestic supply led by further ramp-up of 250
captive commercial coal blocks. 200
Subdued growth outlook for Coal India: Continued expansion of 150
renewable (incl hydro) and nuclear generation capacities would mean 100
that base case power demand growth of 5.5% will translate into TPP 50
power generation Cagr of 3.5% only. Low growth combined with -
higher contribution from captive/commercial blocks, will translate into Peak rated capacity FY25 reported 4Q25 prod - Mar25 prod
~5% offtake Cagr (over FY25-30) for Coal India even with healthy of explored mines production* annualised* annualised*
import substitution. Similar factors would result in further slowdown
beyond FY30 as well.
Source: Ministry of Coal, IIFL Research *Includes allocated, captive/commercial auctioned mines
Figure 3: Offtake to power sector constituted 82% of total domestic supply. CPPs Figure 5: Led by expanding renewable and nuclear capacity, demand for coal-based
consumed another 6% of domestic coal dispatches power is expected to grow at 3.5% over FY25-30 in base case; assuming much faster 7%
power demand growth, coal-based generation should still grow at 6% at best.
Power CPP Iron & steel Sponge Iron Cement Others Capacity GW Generation growth
100% FY25-30 FY25-30 FY25-30 FY25-30
FY25
addition Cagr Cagr Cagr
80% Domestic power demand
5.3% 6.0% 7.0%
growth
60%
Gas + Diesel 26 - 0.0% 0.0% 0.0%
40% Hydro 47 10 3.9% 3.9% 3.9%
Nuclear 8 5 9.5% 9.5% 9.5%
20%
Renewable @ flat PLF 168 147 14.0% 14.0% 14.0%
0% Thermal Power Plants 222 32 3.5% 4.6% 6.0%
FY20 FY21 FY22 FY23 FY24 FY25 Source: Ministry of Power, IIFL Research
Sep-21
Sep-22
Sep-23
Sep-24
Dec-20
Mar-23
Mar-20
Mar-21
Dec-21
Mar-22
Dec-22
Dec-23
Mar-24
Dec-24
Mar-25
Jun-20
Jun-21
Jun-22
Jun-23
Jun-24
*of the 190m tonne of import in FY25, ~62m tonne is for TPP based on imported coal, which cannot
be substituted. #76m tonne incremental from captive/commercial based on reported PRC. 157m
tonne incremental based on Mar’25 prod run rate. Assumes no growth for SCCL production.
Source: Ministry of Coal, IIFL Research
Figure 7: E-auction realisations should remain under pressure given ample domestic
supply going ahead
E-auction realisation
7,000
Rs/tn
6,000
5,000
4,000
3,000
2,000
1,000
-
4QFY25ii
FY26ii
FY27ii
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25
3QFY25
Source: Coal India, IIFL Research
Figure 8: Global thermal coal price has weakened steadily amid demand concerns led
by growing renewable capacity globally
400
USD/t
350 (Newcastle
300 6000Kcal)
250
200
150
100
50
0
Nov-23
Nov-17
Nov-18
Nov-19
Nov-20
Nov-21
Nov-22
Nov-24
May-18
May-19
May-20
May-21
May-22
May-23
May-24
Aug-17
Feb-18
Aug-18
Feb-19
Aug-19
Feb-20
Aug-20
Feb-21
Aug-21
Feb-22
Aug-22
Feb-23
Aug-23
Feb-24
Aug-24
Feb-25
9 April 2025
Figure 1: Office REITs offering 6.1-7.3% yields on FY26 basis Figure 4: Gross leasing vs Expiries- Despite healthy gross leasing in FY24, Occupancy
Rating CMP Target Price Pre-tax Yield Post-tax Yield dipped – FY25 seeing lower expiries and higher leasing
(Rs/sh) (Rs/sh) FY26ii FY27ii FY26ii FY27ii Total FY24 FY25e
EMBASSY BUY 368 405 6.6% 7.4% 5.9% 6.6% Expiry
Gross Pre- Change in Gross Pre- Change in
MINDSPCE BUY 365 415 6.1% 6.6% 5.7% 6.1% (msf) Expiries Expiries
Leasing leasing occupancy Leasing leasing occupancy
BIRET BUY 286 322 7.3% 7.8% 5.9% 6.3%
Embassy 8.1 2.8 4.7 -1% 6.5 1.0 3.9 +3%
Source: Company, IIFL Research.
Mindspace 3.6 2.4 2.7 7.2 1.4 2.7 +5%
0%
Figure 2: Office REITs- Gross leasing trend BIRET 2.8 0.0 2.4 3.1 0.0 1.7 +6%
-2%
Gross leasing (msf) FY22 FY23 FY24 9MFY25 FY25ii 4QFY25
Total 14.5 5.2 9.8 16.8 2.4 8.3
Embassy 2.2 5.1 8.1 5.0 6.5 1.5
YoY % 88% 130% 60% -24% YoY
16% -15%
Mindspace 4.5 4.1 3.6 4.8 7.2 2.3 change
Source: Company, IIFL Research
YoY % 27% -9% -12% 206%
BIRET 1.6 2.1 2.8 2.3 3.1 0.8
Figure 5: REITs share of Industry leasing has been gradually inching up
YoY % N.A 31% 32% 28%
(%) REIT share of Industry Gross leasing
Source: Company, IIFL Research 25.0%
REIT share of Industry Net leasing
Figure 3: Office REITs- Distribution trend 20.0%
Distribution (Rs/unit) FY21 FY22 FY23 FY24 FY25ii 9MFY25
Embassy 21.5 21.8 21.7 21.3 22.8 17.3 15.0%
YoY % 1% 0% -2% 7% 8%
Mindspace 18.5 19.1 19.2 20.9 15.4 10.0%
YoY % N.A 4% 0% 9% 7%
5.0%
BIRET 21.4 20.2 18.8 19.4 14.0
YoY % N.A -5% -7% 3% 0% 0.0%
Source: Company, IIFL Research FY20 FY21 FY22 FY23 FY24 9MFY25
Source: Cushman & Wakefield, Company
Figure 6: Occupancy has picked up for REITs in 9MFY25 Figure 8: Office REITs reported 1% rental growth qoq in 3Q
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25
3QFY25
82%
80%
FY20 FY21 FY22 FY23 FY24 9MFY25
Source: Company, IIFL Research
Source: Company, IIFL Research *Not adjusted for acquisitons
Figure 7: Occupancy levels have witnessed flat to marginal improvement in 3QFY25
Figure 9: Industry witnessed record Net absorption of 51msf (+23% yoy) in CY24,
Occupancy % Embassy Mindspace Brookfield surpassing the previous high of 45msf in CY19
100%
(net absorption msf) Office leasing top 8 cities
95%
60
90%
85% 50
80% 40
75%
30
70%
1QFY20
2QFY21
3QFY22
4QFY23
1QFY25
1QFY19
2QFY19
3QFY19
4QFY19
2QFY20
3QFY20
4QFY20
1QFY21
3QFY21
4QFY21
1QFY22
2QFY22
4QFY22
1QFY23
2QFY23
3QFY23
1QFY24
2QFY24
3QFY24
4QFY24
2QFY25
3QFY25
20
10
Figure 10: Cumulative Gross leasing for Listed REITs came in lower at 3.9msf (-22% yoy) Figure 12: Embassy- NOI vs NDCF comparison
(msf) BIRET M-REIT EOP (Rsbn) Embassy- NOI vs NDCF
10.0
6.0 NOI NDCF
5.0 8.0
4.0
6.0
3.0
2.0 4.0
1.0 2.0
0.0
0.0
1QFY22
4QFY22
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
2QFY22
3QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25
3QFY25
3QFY21
3QFY25
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25
Source: Company, IIFL Research Source: Company, IIFL Research
Figure 11: After witnessing 4% decline in FY24, hiring by IT companies is expected to Figure 13: Mindspace- NOI vs NDCF comparison
remain muted with ~4% yoy growth in FY25 and subsequently grow by 8% in FY26 (Rsbn) Mindspace- NOI vs NDCF
(IIFLe) 6.0
NOI NDCF
(nos) Incremental Hiring (LHS) % YoY 5.0
400,000 30.0% 4.0
25.0%
300,000 3.0
20.0%
2.0
200,000 15.0%
1.0
10.0%
100,000 5.0% 0.0
3QFY22
4QFY22
1QFY23
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25
3QFY25
0.0%
0
-5.0%
(100,000) -10.0% Source: Company, IIFL Research
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25ii FY26ii
Source: Company, IIFL Research
Figure 14: BIRET- NOI vs NDCF comparison Figure 16: Embassy REIT- We build 9% NDCF Cagr over FY25-27
(Rsbn) BIRET- NOI vs NDCF (Rsbn) Embassy NDCF (Distribution)
6.0 27
NOI NDCF
5.0 26
4.0 25
3.0 24
2.0 23
1.0 22
0.0 21
3QFY22
1QFY22
2QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25
3QFY25
20
19
FY25 FY26 FY27
Source: Company, IIFL Research
Source: Company, IIFL Research
Figure 18: BIRET- We build 13% NDCF Cagr over FY25-27 Figure 20: Meaningful share of fixed maturity debt for EOP is coming up for maturity in
next 2 yrs
(Rsbn) BIRET NDCF (Distribution)
16 (%) Debt maturities
100% 87%
14 Embassy Mindspace BIRET
12 80%
10
60% 47%
8
6 40% 29% 30%
22%25%
4 20% 13%15%
3% 7% 0% 3% 2% 5% 6% 4% 3%
2
0%
0 FY25 FY26 FY27 FY28 FY29 & FY30 &
FY25 FY26 FY27 beyond Beyond
Source: Company, IIFL Research
Source: Company, IIFL Research
Figure 19: Cost of debt for BIRET remains the highest
Figure 21: India REITs price performance
(%) Cost of debt Share price re-
8.5% (%) Repo rate (LHS) Embassy
Mindspace BIRET based to 100
FY21 FY22 FY23 9MFY25 7.0 140
8.0% 6.5 130
6.0 120
7.5%
5.5 110
7.0% 5.0 100
4.5 90
6.5% 4.0 80
3.5 70
6.0%
Nov-21
Nov-22
Nov-23
Nov-24
Aug-23
May-21
May-22
May-23
May-24
Aug-21
Aug-22
Aug-24
Feb-22
Feb-23
Feb-24
Feb-25
EOP M-REIT BIRET
Source: Company, IIFL Research
Source: Bloomberg, IIFL Research
Occupancy (%) 87.0% 86.2% 87.0% Occupancy improved sequentially for all REITs
In place Rental 89 71 96
M2M Potential 5.0% 3.9% 16.0%*
WALE (Yrs) 8.2 7.2 7.1 High WALE offers stability in rentals
Leasing Stats
Gross Leasing – 9MFY25 (msf) 5.0 4.8 2.3 EOP had the highest gross leasing for 9MFY25
Re-leasing/Renewal 1.3 1.4 0.5
New Leasing 3.7 3.4 1.8
Expiry of rentals in % (FY25-27) 9.0% 15.6% 17.0% BIRET has the highest share of expiry during FY25-27
FY25 1.0% 1.5% 1.0%
FY26 5.0% 7.3% 7.0%
FY27 3.0% 6.8% 9.0%
Source: Company, IIFL Research *For 4QFY25 expiries
FY26
NOI (Rsbn) 38.1 24.1 19.9
% margin 79.3% 80.4% 80.4%
NDCF (Distribution) (Rsbn) 23.1 13.3 12.7
DPU- FY26 (Rsbn) 24.4 22.4 20.9 Healthy DPU growth in FY26 for all Office REITs
FY27
NOI (Rs bn) 44.0 27.4 21.0
% margin 79.8% 80.5% 80.2%
NDCF (Distribution) (Rsbn) 25.8 14.2 13.5
DPU - FY27 (Rsbn) 27.2 23.9 22.1 Healthy DPU growth in FY27 for all Office REITs
Valuations
FY26 Yield 6.6% 6.1% 7.3%
FY26 Yield (Post Tax) 5.9% 5.7% 5.9% Post tax yield assumes 35% tax on Interest and 15% STCG on repayment of debt
Returns
EV (as per valuer) (Rsbn) 591 314# 368
Debt Levels - Current (Rsbn) 191 71 106
Debt-to-GAV (%) 32.0% 22.6% 24.7% M-REIT has the lowest leverage among REITs
% Floating (of Gross) 51.0% 46.8% 85.0% M-REIT has the highest share of fixed debt offering protection against rising interest rates
09 April 2025
JIO to benefit from tariff hike tailwinds Figure 3: qoq revenue growth trends
(%) 2QFY25 3QFY25 4QFY25ii 1Q-4QFY25ii
Subscriber additions normalised in 4Q: 2Q saw subscriber losses for 20.0%
16.9%
the top three telcos led by SIM consolidation and churn to BSNL. 3Q saw
slight subscriber gains for JIO and Bharti — as the churn to BSNL started 15.0% 12.8%
reversing in October and November — and these telcos exiting December 10.4%
on a healthy note. 10.0%
3.3% 4.1%
While TRAI data January onwards is yet to be released, we believe JIO 5.0%
and Bharti saw healthy adds. JIO saw 3.9mn net sub adds in December
as customers shifted back from BSNL due to poor network quality. We 0.0%
JIO overall JIO estimated Bharti mobile Vi overall Vi estimated
estimate 4mn sub adds in 4Q for JIO.
-5.0% mobile mobile
On the 3Q call, Vi had mentioned that its active subscriber base rose in
December and January in 11 circles. We expect Vi to witness subscriber Source: Companies, IIFL Research
decline in 4Q, albeit at a lower pace than in preceding quarters.
Stable smartphone prices yoy, shipments saw a cyclical dip: As per
Mobile ARPU to be impacted due to two fewer days in 4Q: ARPU IDC, smartphone ASP grew 2% yoy to US$267 in 4QCY24 vs. US$262 a
trajectory will be influenced by two fewer days in 4Q vs 3Q, upgrades to year back and US$224 two years back.
5G/4G (from JIO Phone for JIO and from 2G for Bharti and Vi), prepaid-
to-postpaid conversion (Bharti being the biggest beneficiary) and higher Figure 4: Smartphone ASP grew ~3.6% qoq in 4QCY24; smartphone shipment saw cyclical
data usage. dip in the December quarter
Benefits of Jul’24 tariff hike already in the bag for Bharti and Vi, Average Selling Price (LHS) Smartphone shipments (RHS)
but JIO may see some benefits in 4Q: The extent and timing of flow- (US$) (mn)
through of the Jul’24 tariff hikes vary across telcos due to differences in 280 60.0
subscriber mix (2G vs. 4G), subscriber quality and proportion of 260 50.0
customers on longer-duration packs. For Bharti and Vi, the benefits from 240
220 40.0
tariff hikes had already panned out in 2Q and 3QFY25. However, JIO will
see some benefit of the Jul’24 tariff hike in 4QFY25, as a higher proportion 200 30.0
of its customers are on longer-duration plans. 180 20.0
160
140 10.0
JIO will also benefit from robust 5G FWA adds: In recent months,
120 0.0
JIO’s FWA additions have been healthy with a monthly run-rate of
Dec-22
Mar-21
Dec-21
Mar-22
Mar-23
Dec-23
Mar-24
Dec-24
Jun-21
Sep-21
Jun-22
Jun-23
Jun-24
Sep-22
Sep-23
Sep-24
0.6mn+. With FWA ARPU at 2.5-3x mobile ARPU, this will also boost JIO’s
reported revenue in 4Q.
Source: IDC, IIFL Research
We expect cost to remain stable for telcos as rollout slows: Bharti Figure 5: Bharti Airtel (ex Indus)
has been relentlessly focusing on costs; we expect opex to remain stable Bharti (Rs mn) 4QFY24 3QFY25 4QFY25 % yoy % qoq
qoq. All telcos should also benefit from lower energy costs due to Influence of Indus on revenue 41,511 41,617
seasonality (lower cooling requirements in winter). For JIO, opex may see
India Revenue ex Indus 285,128 322,513 322,019 12.9% -0.2%
~2% qoq growth due to higher rollouts.
Consol revenue ex Indus 375,991 431,891 428,765 14.0% -0.7%
Bharti may see ~0.2% qoq Mobile Ebitda growth: We estimate
Bharti to have added 3.75mn mobile subs in 4QFY25 vs 4.95mn in Influence of Indus on Ebitda 70,811 45,446
3QFY25. We expect ARPU to decline ~1% qoq to Rs243 due to two fewer PDD reversal benefit to Indus from Vi 30,200 5,000
days in 4Q vs 3Q. We forecast 0.3% qoq Mobile revenue growth in 4Q. Recurring Ebitda for Indus 40,611 40,446
Consequently, we estimate 0.2% qoq Ebitda growth. India Ebitda ex Indus 152,934 184,486 187,363 22.5% 1.6%
Consol Ebitda ex Indus 193,648 234,782 236,421 22.1% 0.7%
Non-mobile segments – Indus Towers will get consolidated for
Source: Company, IIFL Research
full quarter; Home strong, Enterprise and DTH weak: We estimate
Bharti to have added a robust 0.68mn home broadband subs in 4QFY25
(vs. 0.67mn in 3Q) led by FWA. We expect 5.4% qoq Ebitda growth in
4Q, higher than recent quarters.
Enterprise segment may see ~2% qoq revenue decline due to exit from
low-margin contracts. Enterprise segment Ebitda is expected to grow 1%
qoq. DTH Ebitda is likely to decline 4% qoq due to a seasonally weak 4Q.
On consol basis, reported Ebitda is expected to grow 8.5% qoq led by full
quarter consolidation of Indus Towers. On an underlying basis (ex Indus),
consol Ebitda is expected to grow ~0.7% qoq.
Figure 6: We expect 0.2% qoq India mobile Ebitda growth and 8.5% consolidated Ebitda After removing exceptional hit in 3Q, PAT is expected to decline ~6%
growth, led by consolidation of Indus Towers for full quarter in 4Q qoq.
Bharti (Rsmn) 4QFY24 3QFY25 4QFY25 % yoy % qoq
India Figure 7: Bharti Hexacom - 4QFY25 estimates
Subs (mn) 352 357 360 2.3% 1.1% Consol P&L 4QFY24 3QFY25 4QFY25 % yoy % qoq
ARPU (Rs) 209 245 243 16.3% -0.9% Revenue 18,680 22,507 22,479 20.3% -0.1%
Data traffic (mn GB) 17,391 20,174 21,043 21.0% 4.3% Network opex 4,564 4,853 4,890 7.1% 0.8%
Data usage per sub per month (GB) 22.6 24.5 25.2 11.7% 3.0%
Access Charges 2,067 2,304 2,464 19.2% 6.9%
4G subs (mn) 252.7 270.2 278.3 10.1% 3.0%
LF / spectrum charges 1,728 2,074 2,068 19.7% -0.3%
India wireless revenue 220,657 262,687 263,423 19.4% 0.3%
India wireless Ebitda 121,607 154,568 154,911 27.4% 0.2% Employee benefits 260 292 299 15.0% 2.4%
Total India revenue 285,128 364,024 363,637 27.5% -0.1% Sales and marketing expenses 897 1,033 1,032 15.0% -0.1%
Ebitda 152,934 240,271 217,844 42.4% -9.3% Other expenses 386 434 438 13.6% 1.0%
Ebitda% 53.6% 66.0% 59.9% 627bps -610bps Ebitda 8,778 11,517 11,288 28.6% -2.0%
Africa (US$ mn) EBITDA% 47.0% 51.2% 50.2% 323 bps -95 bps
Revenue(US$ mn) 1,118 1,268 1,265 13.1% -0.2% Depreciation 4,598 5,315 5,408 17.6% 1.7%
Ebitda 520 596 591 13.6% -0.8%
EBIT 4,180 6,202 5,881 40.7% -5.2%
Ebitda margin 46.5% 47.0% 46.7% 19bps -29bps
EBIT% 22.4% 27.6% 26.2% 378 bps -140 bps
Consolidated
Revenue 375,991 451,293 470,382 25.1% 4.2% Finance cost 1,657 1,802 1,715 3.5% -4.9%
Ebitda 193,648 245,966 266,902 37.8% 8.5% Other income 487 450 424 -13.0% -5.9%
Ebitda margin 51.5% 54.5% 56.7% 524bps 224bps PBT 3,010 4,850 4,590 52.5% -5.4%
Ebit 92,896 128,924 142,891 53.8% 10.8% Tax expense 783 1,184 1,157 47.6% -2.3%
Share of JVs/associates 8,303 16,597 100 Pre-exceptional PAT 2,227 3,666 3,433 54.2% -6.4%
Finance charges (net) 45,243 50,067 46,442 2.6% -7.2% Exceptional items - 1,057 -
Exceptional losses (gains) 24,555 (75,456) 0
Reported PAT 2,227 2,609 3,433 54.2% 31.6%
Forex losses/ (gains) 3,621 1,991 2,000 -44.8% 0.5%
PBT 27,780 168,919 94,549 240.3% -44.0%
Tax 7,098 7,573 25,225 255.4% 233.1% Segmental Break-up
Minority interest 34 (13,534) (17,164) Mobile segment revenue 18,232 21,931 21,908 20% 0%
PAT 20,716 147,812 52,160 151.8% -64.7% Home segment revenue 547 645 701 28% 9%
Source: Company, IIFL Research
KPIs
Bharti Hexacom – We estimate ~2% qoq Ebitda decline: We expect Customer base (mn) 27.3 27.6 28.0 2.3% 1.3%
Hexacom’s ARPU decline to be similar to Bharti India mobile in 4Q. ARPU
ARPU (Rs) 204.0 241.4 240.0 17.6% -0.6%
is expected to decline ~1% qoq due to two fewer days in 4Q vs 3Q. We
estimate 2% Ebitda decline. Reported PAT is expected to grow ~32%. 4G customer base (mn) 19.5 20.8 21.5 10.2% 3.3%
Source: Company, IIFL Research
JIO – We estimate 2.1% qoq Ebitda growth: Since JIO has a higher by lower ETR. TCOM has received Rs3.5bn in 4Q from the sale of
proportion of customers on longer-duration plans, we estimate ARPU to subsidiary TCPSL.
grow 0.5% qoq, despite two fewer days in 4Q. In 4Q, we estimate 0.9%
qoq mobile revenue growth. Figure 8: JIO – 4QFY25 estimates
(Rsmn) 4QFY24 3QFY25 4QFY25 yoy qoq
We estimate JIO to have added 4.1mn mobile subs in 4QFY25 vs 3.3mn Revenue 259,590 293,070 298,574 15.0% 1.9%
in 3QFY25. We expect mobile sub-base of 468mn as of end-4Q. JIO has
Costs
been adding 0.6mn+ fixed BB subs per month due to strong traction on
5G FWA, and we estimate ~2mn net adds in 4Q. We expect 1.9%/2.1% Licence fee + SUC 23,890 26,810 26,966 12.9% 0.6%
qoq revenue/Ebitda growth. We expect PAT to grow 2.6%. Access charges 2,130 5,640 5,076 138.3% -10.0%
Network opex 78,660 83,590 85,848 9.1% 2.7%
Vi – We estimate ~4% qoq Ebitda decline: We expect Vi to lose 3mn S&D costs 7,040 9,440 9,853 40.0% 4.4%
subscribers in 4Q vs 5.2mn in 3Q. We expect Vi’s ARPU/revenue to decline Other costs 6,920 7,790 7,763 12.2% -0.3%
~1%/2% qoq in 4Q due to two fewer days and subscriber loss. We expect
Employee costs 4,830 5,020 5,078 5.1% 1.2%
opex to decline ~1% qoq. Consequently, Ebitda may see ~4% qoq
decline. With 3Q seeing a one-time interest cost reversal, we expect PBT Total opex 123,470 138,290 140,584 13.9% 1.7%
loss to widen sequentially. Ebitda 136,120 154,780 157,990 16.1% 2.1%
Ebitda margin 52.4% 52.8% 52.9% 48 bps 10 bps
Indus – Reported Ebitda may decline ~35% qoq, as the base Depreciation and amortisation 55,660 58,320 59,620 7.1% 2.2%
quarter had Rs30.2bn PDD reversal; underlying Ebitda to grow Ebit 80,460 96,460 98,370 22.3% 2.0%
2.7%: Tower and tenancy additions for Indus should see an acceleration
Interest expense 10,040 12,680 13,097 30.5% 3.3%
from 2Q and 3QFY25 levels as Bharti continued to expand its 4G rural
coverage and Vi accelerated its network rollout. Indus has been receiving Other income 1,220 3,200 4,000 227.9% 25.0%
ongoing payments from Vi and past dues on time in the recent quarters. PBT 71,640 86,980 89,273 24.6% 2.6%
We build in Rs5bn PDD reversal in 4Q (this will bring down Vi’s overdue Tax 18,270 22,210 22,795 24.8% 2.6%
receivables to nil). We expect ~35% qoq Ebitda decline as the base PAT 53,370 64,770 66,477 24.6% 2.6%
quarter had Rs30.2bn PDD reversal related to Vi. After removing PDD, we
expect ~3% Ebitda growth led by strong colocation additions and lower Total sub base (mobile + FTTH) (mn) 481.8 482.1 486.2 0.9% 0.9%
energy spread. Blended ARPU (Rs) 182 203 206 13.2% 1.1%
Total data traffic (mn GB) 40,900 46,500 50,418 23.3% 8.4%
TCOM – Ebitda to grow 3.2% qoq: We estimate TCOM’s revenue to
grow ~2% qoq, largely led by 2.5% growth in the Data segment. Digital
Est. mobile sub base (mn) 470.5 466.1 468.0 -0.5% 0.4%
platforms and Services revenue may remain flat qoq (the boost in cloud
Mobile ARPU (Rs) 175 194 195 11.7% 0.5%
and security revenue from new order wins in 1H is likely to offset the
Mobile data traffic (mnGB) 30,666 30,900 32,222 5.1% 4.3%
seasonal weakness in Kaleyra and media vertical). Core connectivity may
grow ~4% qoq off a low base (3Q was partly impacted by subsea cable Mobile data traffic per day (PB) 337.0 335.9 358.0 6.2% 6.6%
cuts). We expect 20bps expansion in Ebitda margin led by strong growth GB/month per mobile sub (est.) 22.0 22.1 23.0 4.7% 3.9%
in the higher-margin Core connectivity business. We expect Est. mobile revenue (Rsmn) 243,866 270,893 273,238 12.0% 0.9%
Reported/Pre-exceptional PAT to grow ~15%/9% qoq to Rs2.95bn, led Source: Company, IIFL Research
Figure 9: Vi – 4QFY25 estimates Figure 10:Indus – We expect ~35% qoq reported Ebitda decline. We build in Rs5bn
Vi (Rsmn) 4QFY24 3QFY25 4QFY25 % yoy % qoq reversal of provision for doubtful debts in 4Q vs. 30bn in 3Q. After removing doubtful
Quarter ending subscribers (mn) 212.6 199.8 196.8 (7.4) (1.5) debt provisions, Ebitda is likely to grow ~3%
Wireless traffic (mn min) 402,000 360,000 362,889 (9.7) 0.8 (Rsmn) 4QFY24 3QFY25 4QFY25 % yoy % qoq
ARPU (Rs) 146 163 162 11.0 (0.6) Total towers 219,736 234,643 239,643 9.1% 2.1%
MOU per sub per month 627 593 610 (2.7) 2.9 Tenancy 1.68 1.65 1.65 -1.6% 0.1%
Total data traffic (PB) 6,049 5,859 5,978 (1.2) 2.0 Rental revenue 45,785 48,165 49,108 7.3% 2.0%
4G subs (mn) 126.3 126.0 128.0 1.3 1.6 Energy reimbursement 26,147 27,309 26,560 1.6% -2.7%
Total revenue 71,932 75,474 75,668 5.2% 0.3%
Revenue 106,068 111,173 108,573 2.4 (2.3)
Ebitda before PDD towards Vi 37,048 39,381 40,446 9.2% 2.7%
Personnel Expenditure 5,441 5,493 5,548 2.0 1.0
Reported Ebitda 40,716 69,581 45,446 11.6% -34.7%
Network Opex 23,648 23,635 23,517 (0.6) (0.5)
Ebitda margin 56.6% 92.2% 60.1% 346bps -3213bps
Licence Fees & Spectrum charges 9,044 9,443 9,229 2.0 (2.3)
Ebit 25,071 53,896 29,556 17.9% -45.2%
Roaming and Access changes 10,624 11,808 11,400 7.3 (3.5)
Finance charges (net) 4,636 4,616 4,613 -0.5% -0.1%
SG&A 11,733 11,200 11,312 (3.6) 1.0
Other income 4,454 2,908 2,463 -44.7% -15.3%
Others 2,220 2,470 2,472 11.4 0.1
PBT 24,889 52,188 27,405 10.1% -47.5%
Total Cost 62,710 64,049 63,478 1.2 (0.9)
Tax 6,358 12,156 6,961 9.5% -42.7%
Ebitda 43,358 47,124 45,095 4.0 (4.3)
PAT 18,531 40,032 20,444 10.3% -48.9%
Ebitda margin 40.9% 42.4% 41.5% 66 bps -85 bps Source: Company, IIFL Research
Depreciation 57,513 56,288 57,046 (0.8) 1.3
Ebit -14,155 -9,164 -11,951
Share of gain from Indus -26 0 0
Finance Charges 62,803 59,399 65,367
Other Income 325 2,495 2,223
Exceptional gains/(losses) 0 0 0
Profit before Tax -76,659 -66,068 -75,095
Tax 87 25 0
Reported PAT -76,746 -66,093 -75,095
Exceptional gains/(losses) 0 0 0
Pre-exceptional PAT -76,746 -66,093 -75,095
Source: Company, IIFL Research
Figure 11: TCOM – 4QFY25 estimates Figure 12: TCOM – segmental estimates
Consolidated P&L (Rsmn) 4Q FY24 3Q FY25 4Q FY25 % yoy % qoq Segment-wise results (Rsmn) 4Q FY24 3Q FY25 4Q FY25 % yoy % qoq
Total Revenues 56,917 57,981 59,249 4.1% 2.2% Voice
Expenditure: Revenue 4,290 4,105 4,032 -6.0% -1.8%
Network costs 23,333 25,134 25,626 9.8% 2.0% Ebitda 440 483 444 0.7% -8.1%
Employee benefits expenses 11,755 11,240 12,578 7.0% 11.9% Ebitda margin 10.3% 11.8% 11.0% 73bps -76bps
Other expenses 11,267 9,797 8,857 -21.4% -9.6% Data
Total Cost 46,354 46,171 47,061 1.5% 1.9% Revenue 46,559 49,032 50,247 7.9% 2.5%
Reported Ebitda 10,563 11,810 12,188 15.4% 3.2% Ebitda 8,573 9,413 9,830 14.7% 4.4%
Ebitda margin 18.6% 20.4% 20.6% 201bps 20bps Ebitda margin 18.4% 19.2% 19.6% 115bps 36bps
Adjusted Ebitda 10,563 11,810 12,188 15.4% 3.2% Rental
Ebitda margin 18.6% 20.4% 20.6% 201bps 20bps Revenue 568 577 577 1.6% 0.0%
Depreciation and Amortization 6,658 6,371 6,888 3.4% 8.1% Ebitda 329 364 346 5.1% -4.9%
Ebit 3,905 5,438 5,300 35.7% -2.5% Ebitda margin 58.0% 63.1% 60.0% 200bps -309bps
Ebit margin 6.9% 9.4% 8.9% 209bps -43bps TCTSL
Finance charges 1,882 1,869 1,849 -1.7% -1.1% Revenue 3,704 2,561 2,593 -30.0% 1.2%
Other income 570 287 250 -56.1% -13.0% Ebitda 152 215 218 43.6% 1.2%
Exceptional items -521 -149 0 Ebitda margin 4.1% 8.4% 8.4% 431bps 0bps
Profit before Tax 2,072 3,856 3,701 78.6% -4.0% TCPSL
Tax -1,085 1,262 814 -175.1% -35.5% Revenue 417
PAT after MI 3,212 2,566 2,946 -8.3% 14.8% Ebitda 55
PAT Margin 5.6% 4.4% 5.0% -67bps 55bps Ebitda margin 13.2%
Exceptional Items -521 (149) 0 TCR
Pre-exceptional PAT 3,733 2,715 2,946 -21.1% 8.5% Revenue 1,380 1,705 1,800 30.5% 5.6%
Source: Company, IIFL Research Ebitda 1,013 1,334 1,350 33.2% 1.2%
Ebitda% 73.5% 78.2% 75.0% 155bps -324bps
Source: Company, IIFL Research
JIO: Cut FY25-27ii Ebitda by ~2-3%; new EV TCOM: Maintain estimates; new TP Rs1,821
US$117bn Figure 15:Our Mar’25 TP of Rs1,821 is based on the SoTP methodology
Ebitda (Rsmn) EV/Ebitda (x) EV (Rsmn)
We cut JIO’s revenue est. by 1%/3%/3% for FY25/26/27ii due to lower-
Voice segment 1,119 2.5 2,797
than-expected ARPU flow-through from Jul’24 tariff hikes (12% yoy ARPU
Data segment 58,634 10.00 586,338
growth in FY25 vs 16% assumed previously) on account of downtrading
Other subsidiaries 2,468 3.0 7,404
by low-end customers and sim consolidation. Consequently, we cut our
Ebitda est. by 2-3% for FY25-27ii and PAT est. by ~3-4%. EV 596,539
Less: Net debt 95,915
Our DCF model with 9% WACC yields US$117bn EV. Less: Potential AGR liability 16,500
Add: value of 26% stake in DC business 30,271
Figure 13: JIO - Estimate changes Equity value 519,121
(Rsmn) FY25 FY26 FY27 # shares (m) 285
New Change New Change New Change TP (Rs) 1,821
CMP (Rs) 1,563
Revenue 1,139,804 -1.0% 1,282,085 -3.4% 1,570,471 -3.1%
Upside 16.5%
Ebitda 602,330 -2.2% 715,598 -3.4% 914,289 -3.1%
Dividend per share (Rs) 20.3
Ebit 370,980 -3.1% 456,362 -4.1% 605,656 -3.8% Total Return 17.8%
PBT 333,083 -3.6% 392,469 -2.5% 548,849 -3.2% Source: IIFL Research
PAT 248,007 -3.6% 292,253 -2.5% 408,703 -3.2%
Source: IIFL Research
Date Rating Close price Target price Upside Date Rating Close price Target price Upside
Bharti Airtel: 3 year price and rating history (Rs) (Rs) (%)
(Rs) (Rs) (%)
(Rs) Price TP/Reco changed date 10 Feb 2025 BUY 1677 1877 11.9 19 Jan 2023 BUY 777 909 17.0
09 Jan 2025 BUY 1601 1829 14.2 02 Nov 2022 BUY 836 929 11.1
2,000 30 Oct 2024 BUY 1637 1786 9.1 10 Aug 2022 BUY 704 865 22.9
1,500 07 Aug 2024 BUY 1444 1633 13.1 19 May 2022 BUY 696 835 20.0
16 May 2024 BUY 1310 1403 7.1 18 May 2022 BUY 707 844 19.4
1,000
07 Feb 2024 BUY 1134 1215 7.1
500 04 Jan 2024 BUY 1035 1086 4.9
0 02 Nov 2023 BUY 913 1003 9.8
07 Aug 2023 BUY 890 967 8.7
Jul-22
Jul-23
Jul-24
Apr-25
Apr-22
Apr-23
Apr-24
Jan-23
Jan-24
Oct-24
Jan-25
Oct-22
Jan-25
Apr-24
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Jul-24
Apr-25
Apr-22
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Jan-23
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Oct-24
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Jul-24
Apr-25
Apr-22
Apr-23
Apr-24
Jan-23
Jan-24
Oct-24
Jan-25
Oct-22
Oct-23
28 Apr 2023 REDUCE 145 148 2.1
27 Jan 2023 REDUCE 158 142 -10.1
31 Oct 2022 ADD 187 199 6.4
Date Rating Close price Target price Upside Date Rating Close price Target price Upside
Tanla Solutions: 3 year price and rating history (Rs) (Rs) (%)
(Rs) (Rs) (%)
(Rs) Price TP/Reco changed date 23 Jan 2025 BUY 629 724 15.1 17 Aug 2022 BUY 752 950 26.3
21 Oct 2024 BUY 827 946 14.4 04 May 2022 BUY 1430 1863 30.3
2,000 22 Jul 2024 BUY 970 1238 27.6
1,500 29 Apr 2024 BUY 935 1228 31.3
25 Jan 2024 BUY 1049 1197 14.1
1,000 23 Oct 2023 BUY 1065 1240 16.4
500 24 Jul 2023 BUY 1266 1448 14.4
12 Jun 2023 BUY 837 977 16.7
0 28 Apr 2023 BUY 681 786 15.4
Jul-22
Jul-23
Jul-24
Apr-25
Apr-22
Apr-23
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Oct-22
Oct-23
ISG - 1Q2025
Global Index Call
Thursday, 10th April 2025
6:30 pm IST/9.00 am ET/2.00 pm BST/9.00 pm HKT
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Soham Dalal (91 22 4646 4659) Ryan Daniel (91 22 4646 4655) Rakshit Desai (91 22 4646 4743) Viral Shah (91 22 4646 4781) Rating companies, Telecom, Media,
Shalin Kapadia (91 22 4646 4760) Rikin Shah (91 22 4646 4668) Textiles,
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Balaji Subramanian (91 22 4646 4644)
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Percy Panthaki (91 22 4646 4662) Renu Baid (91 22 4646 4651)
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