Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.</li>
<li>As things stand, there could be one index change for the SENSEX index. </li>
<li>There could be four ADDs/DELs for the BSE 100 index and four ADDs/DELs for the BSE 200 index.</li>
</ul>


In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
As things stand, there could be one index change for the SENSEX index. 
There could be four ADDs/DELs for the BSE 100 index and four ADDs/DELs for the BSE 200 index.


Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Wipro SENSEX Deletion Possible

Equity Research Analyst - Long-Short

Raj S, CA, CFA

Artoval Advisors

Art’o’val stands for Art of Valuation. Artoval Advisors LLP is a professionally run advisory firm catering to various financial advisory services including Valuation, Investment Research, Training, Accounting, CFO Services and other ancillary services.

We are passionate about what we do and strongly believe in working with our clients as their extended teams. With Artoval Advisors as their trusted partner, our clients find it easy to achieve efficiency in service delivery without compromising on quality.

True Art of Valuation

Thematic (Sector/Industry)

<ul>
<li>IRDAI has released an exposure draft proposing a substantial  reduction in surrender charges on Non-Par Guaranteed Life Insurance Products</li>
<li>The move aims to the remove penalizing surrender charges prevalent on Traditional Savings products with guaranteed RoI; this is the latest of moves aimed to improve policyholder protection</li>
<li>All life insurers are negatively impacted  <a href="https://www.smartkarma.com/entities/sbi-life-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:25899:1" rel="noopener">SBI Life Insurance Co Ltd (SBILIFE IN)</a><a href="https://www.smartkarma.com/entities/hdfc-standard-life-insurance" target="_blank" data-smartkarma-citation="entities:26004:1" rel="noopener">HDFC Life Insurance (HDFCLIFE IN)</a><a href="https://www.smartkarma.com/entities/icici-prudential-life-insurance" target="_blank" data-smartkarma-citation="entities:23608:1" rel="noopener">ICICI Prudential Life Insurance (IPRU IN)</a><a href="https://www.smartkarma.com/entities/life-insurance-corp-of-india" target="_blank" data-smartkarma-citation="entities:28829:1" rel="noopener">Life Insurance of India (LICI IN)</a> <a href="https://www.smartkarma.com/entities/icici-prudential-life-insurance" target="_blank" data-smartkarma-citation="entities:23608:1" rel="noopener"></a>
</li>
</ul>


IRDAI has released an exposure draft proposing a substantial  reduction in surrender charges on Non-Par Guaranteed Life Insurance Products
The move aims to the remove penalizing surrender charges prevalent on Traditional Savings products with guaranteed RoI; this is the latest of moves aimed to improve policyholder protection
All life insurers are negatively impacted  SBI Life Insurance Co Ltd (SBILIFE IN)HDFC Life Insurance (HDFCLIFE IN)ICICI Prudential Life Insurance (IPRU IN)Life Insurance of India (LICI IN) 



India Life Insurers: IRDAI Proposes Higher Surrender Values (SBILIFE IN/ HDFCLIFE IN/ IPRU IN/ LICI)

Equity Bottom-Up

Life Insurance  of India / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/life-insurance-corp-of-india" target="_blank" data-smartkarma-citation="entities:28829:1" rel="noopener">Life Insurance of India (LICI IN)</a> reported its 1H24 earnings which are a continuation of the poor performance of the largest life insurer in India.</li>
<li>Total sales were down -10% (individual sales – flat y-o-y); VNB margins falling; outlook not positive. Not positive shifts in product mix or distribution trends.</li>
<li>We value LIC at 0.5x FY25e P/EV, implying a -15% downside from the current price, reflecting poor sales growth, loss of market-share and its failure to turn-around the business model.</li>
</ul>



Life Insurance of India (LICI IN) reported its 1H24 earnings which are a continuation of the poor performance of the largest life insurer in India.
Total sales were down -10% (individual sales – flat y-o-y); VNB margins falling; outlook not positive. Not positive shifts in product mix or distribution trends.
We value LIC at 0.5x FY25e P/EV, implying a -15% downside from the current price, reflecting poor sales growth, loss of market-share and its failure to turn-around the business model.


Life Insurance of India (LICI IN) 2Q24 Review: Poor Performance; No Signs of Turnaround. Sell.

SBI Life Insurance Co Ltd / Equity Bottom-Up

<ul>
<li>We make two arguments in this note (A) Why you should invest in the Indian Life Insurance Sector right now; (B) Why you should start with <a href="https://www.smartkarma.com/entities/sbi-life-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:25899:1" rel="noopener">SBILIFE</a>  over<a href="https://www.smartkarma.com/entities/hdfc-standard-life-insurance" target="_blank" data-smartkarma-citation="entities:26004:1" rel="noopener"> HDFCLIFE</a>
</li>
<li>Answers (A) The train has left-the-station on the long runway of double-digit growth in the sector; (B) The sector valuations are very reasonable due to short-term pressures, SBIL especially so.</li>
<li>We compare SBILIFE and HDFCL's valuations, and narrow the focus on to One Crucial Factor showcasing the fundamental strength of these businesses.</li>
</ul>


We make two arguments in this note (A) Why you should invest in the Indian Life Insurance Sector right now; (B) Why you should start with SBILIFE  over HDFCLIFE

Answers (A) The train has left-the-station on the long runway of double-digit growth in the sector; (B) The sector valuations are very reasonable due to short-term pressures, SBIL especially so.
We compare SBILIFE and HDFCL's valuations, and narrow the focus on to One Crucial Factor showcasing the fundamental strength of these businesses.


HDFCL Vs SBIL: The Low Down on the Best Life Insurance Stocks In India Right Now (+SBIL 2Q24 Review)

ICICI Prudential Life Insurance / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/icici-prudential-life-insurance" target="_blank" data-smartkarma-citation="entities:23608:1" rel="noopener">ICICI Prudential Life Insurance (IPRU IN)</a> reported its 2Q24 earnings results yesterday, with flat sales and decreasing margins</li>
<li>The lack of support from ICICI Bank, its parent, has been the main concern, with ICICI Pru consistently losing market share to other private peers due to below-par growth.</li>
<li>We value ICICI Pru at ~1.4x FY25e P/EV, implying a -15% downside to current price, reflecting the bleak outlook in terms of growth and margins in the medium-term.</li>
</ul>



ICICI Prudential Life Insurance (IPRU IN) reported its 2Q24 earnings results yesterday, with flat sales and decreasing margins
The lack of support from ICICI Bank, its parent, has been the main concern, with ICICI Pru consistently losing market share to other private peers due to below-par growth.
We value ICICI Pru at ~1.4x FY25e P/EV, implying a -15% downside to current price, reflecting the bleak outlook in terms of growth and margins in the medium-term.


ICICI Prudential Life: 2Q24 Result Update: The Search for Salvation (Continues..)

India

ICICI Prudential Life Insurance Company Limited of India provides life insurance services. The Company offers claim processing, electronic insurance accounts, and other services. ICICI Prudential Life Insurance conducts its business in India.

ICICI Prudential Life Insurance (IPRU IN)

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ICICI Prudential Life Insurance (IPRU IN)

Quiddity Leaderboard BSE/SENSEX Jun 24: Wipro SENSEX Deletion Possible

Wipro could be deleted from the SENSEX index in June 2024 and Coal India could become the replacement. There could be around three days of volume...

Janaghan Jeyakumar, CFA

India Life Insurers: IRDAI Proposes Higher Surrender Values (SBILIFE IN/ HDFCLIFE IN/ IPRU IN/ LICI)

Indian Life Insurance Regulatory update: Proposed removal of penal surrender charges on traditional guaranteed-return savings products; negatively...

Raj S, CA, CFA

Life Insurance of India (LICI IN) 2Q24 Review: Poor Performance; No Signs of Turnaround. Sell.

LIC’s 2Q24 earnings show a continuation of the poor performance of the largest life insurer in India. We expect further de-rating given the lack of...

Raj S, CA, CFA

HDFCL Vs SBIL: The Low Down on the Best Life Insurance Stocks In India Right Now (+SBIL 2Q24 Review)

We have added price charts showing clear "market sentiment" in favour of SBIL compared to HDFCL and the benchmark. This supports our central...

Raj S, CA, CFA

ICICI Prudential Life: 2Q24 Result Update: The Search for Salvation (Continues..)

The lack of support from ICICI Bank, its parent, has been the main concern for ICICI Prudential Life. This has resulted in a bleak outlook in terms...

Raj S, CA, CFA

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52-week Range

Market Cap (USDm)

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Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Wipro SENSEX Deletion Possible

Wipro could be deleted from the SENSEX index in June 2024 and Coal India could become the replacement. There could be around three days of volume...

Janaghan Jeyakumar, CFA

India Life Insurers: IRDAI Proposes Higher Surrender Values (SBILIFE IN/ HDFCLIFE IN/ IPRU IN/ LICI)

Indian Life Insurance Regulatory update: Proposed removal of penal surrender charges on traditional guaranteed-return savings products; negatively...

Raj S, CA, CFA

Life Insurance of India (LICI IN) 2Q24 Review: Poor Performance; No Signs of Turnaround. Sell.

LIC’s 2Q24 earnings show a continuation of the poor performance of the largest life insurer in India. We expect further de-rating given the lack of...

Raj S, CA, CFA

HDFCL Vs SBIL: The Low Down on the Best Life Insurance Stocks In India Right Now (+SBIL 2Q24 Review)

We have added price charts showing clear "market sentiment" in favour of SBIL compared to HDFCL and the benchmark. This supports our central...

Raj S, CA, CFA

ICICI Prudential Life: 2Q24 Result Update: The Search for Salvation (Continues..)

The lack of support from ICICI Bank, its parent, has been the main concern for ICICI Prudential Life. This has resulted in a bleak outlook in terms...

Raj S, CA, CFA

Quiddity Leaderboard BSE/SENSEX Jun 24: Wipro SENSEX Deletion Possible