Measuring ICICI Prudential Life Insurance Company Limited’s (NSEI:ICICIPRULI) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess ICICIPRULI’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for ICICI Prudential Life Insurance
How Well Did ICICIPRULI Perform?
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique allows me to assess different companies on a similar basis, using the most relevant data points. For ICICI Prudential Life Insurance, its most recent bottom-line (trailing twelve month) is ₹16.27B, which compared to the prior year’s level, has fallen by -9.41%. Given that these values may be somewhat short-term thinking, I’ve computed an annualized five-year value for ICICIPRULI’s earnings, which stands at ₹15.77B This shows that even though earnings declined from the previous year, over the longer term, ICICI Prudential Life Insurance’s earnings have been increasing on average.
How has it been able to do this? Well, let’s take a look at if it is solely because of an industry uplift, or if ICICI Prudential Life Insurance has experienced some company-specific growth. The ascend in earnings seems to be driven by a robust top-line increase overtaking its growth rate of expenses. Though this has caused a margin contraction, it has made ICICI Prudential Life Insurance more profitable. Eyeballing growth from a sector-level, the IN insurance industry has been growing its average earnings by double-digit 15.41% over the previous twelve months, and a more subdued 7.28% over the past half a decade. This suggests that any tailwind the industry is profiting from, ICICI Prudential Life Insurance has not been able to gain as much as its average peer.
What does this mean?
ICICI Prudential Life Insurance’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I recommend you continue to research ICICI Prudential Life Insurance to get a better picture of the stock by looking at: