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Results
21-Apr-23
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Analysis
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ICICI Prudential Life Insurance Company
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Strong VNB growth and margins improvement
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ICICI Prudential Life Insurance Company has posted 27% jump in the
net profit of Rs 234.87 crore in the quarter ended March 2023 (Q4FY2023)
compared with net profit of Rs 184.67 crore in Q4FY2022.
The
Company registered 11% growth in net premium income in Q4FY2023. The commission
expenses jumped 35% and operating expense increased 21%. Benefits paid moved up
9% in Q4FY2023.
Value
of New Business (VNB) improved 36% to Rs 1055 crore for Q4FY2023 over Q4FY2022.
VNB margin increased from 28.0% in
FY2022 to 32.0% in FY2023, supported by change in product mix. APE increased
27% to Rs 3300 crore for Q4FY2023. New business premium increased 18% to Rs 5635
crore for Q4FY2023 from Rs 4788 crore for Q4FY2022.
The
Company offers a range of products across annuity, savings, and protection
solutions to meet the specific needs of customers. Annuity APE grew 102% to Rs 170
crore in Q4FY23 and Protection APE fell 1% to Rs 454 crore, while Savings APE jumped
29% to Rs 2675 crore in Q4FY23.
Persistency
ratios have improved across all cohorts in the last one year, reflective of the
Company’s strong focus on improving the quality of business. The 13th month
persistency ratio improved from 85.7% in 11M-FY2022 to 86.6% in 11M-FY2023. The
49th month persistency ratio also improved from 63.7% in 11M-FY2022 to 64.2% in
11M-FY2023.
In FY2023,
the cost to total weighted received premium (TWRP) ratio for the savings
business and the overall cost to TWRP ratio stood at 14.2% and 21.5%
respectively.
The assets
under management of the Company stood at Rs 251191
crore end March 2023. The Company had a debt-equity mix of 55:45 end March 2023
and 97.3% of the fixed income investments were in sovereign or AAA rated
instruments.
The
Company’s net worth was Rs
10092 crore end March 2023. The
solvency ratio was 208.9% against the regulatory minimum requirement of 150%.
The Embedded
Value increased from Rs
31625 crore end March 2022 to Rs
35634 crore end March 2023 with a yoy
growth of 12.7%.
The return
on embedded value (RoEV) was 17.4% in FY2023 as compared to 11.0% in FY2022. EV
operating profit was Rs
5488 crore, a yoy growth of 71.9%.
Embedded
value
per share stood at Rs 247.7 end March 2023.
N S Kannan,
MD & CEO, ICICI Prudential Life Insurance said “In April 2019 we had
articulated our aspiration to double the FY2019 VNB in four years. It gives me
immense pleasure to state that we have successfully delivered this with a VNB
of Rs 2765 crore and industry leading margin of
32.0%. This VNB was delivered along with strong quality of business as can be
seen from the sharp improvements in our persistency ratios across all cohorts.
Our strategy
of pursuing a diversified distribution and a well diversified product mix has
enabled us to deliver 26.5% yoy growth in APE (APE) in Q4-FY2023. Our focus on
protection and annuity products is reflected in the growth in these segments.
These products together now contribute nearly half of the new business received
premium for FY2023.
We believe
that we have built a resilient business with well-diversified product &
channel mix, industry leading quality parameters, and strong risk & capital
metrics. With this, we are well poised to take advantage of the insurance
opportunity in the coming years.”
Financial Performance FY2023
The net
profit increased to Rs
811 crore in FY2023 from Rs 754 crore in FY2022, a yoy growth of 7.6%. Profit
before tax increased from Rs 790
crore in FY2022 to Rs 897 crore
in FY2023, a yoy growth of 13.5%.
Value of New
Business (VNB) increased from Rs 2163 crore in
FY2022 to Rs 2765 crore in
FY2023, a yoy growth of 27.8%. With an APE of Rs 8640 crore for FY2023, VNB margin improved from 28.0% in FY2022 to 32.0%
in FY2023 primarily on account of shift in the underlying product mix. The
Company has doubled the FY2019 value of new business in FY2023 with a four-year
CAGR of 20.1%, in line with the aspiration articulated in April 2019.
New business
premium grew from Rs
15036 crore in FY2022 to Rs 16922 crore in FY2023, a yoy growth of 12.5%.
APE grew from Rs 7733 crore in
FY2022 to Rs 8640 crore in
FY2023 with a yoy growth of 11.7%.
Annuity APE
grew from Rs
300 crore in FY2022 to Rs 507 crore in FY2023, registering a strong yoy
growth of 69.0%. Protection APE grew from Rs 1313 crore in FY2022 to Rs 1504
crore in FY2023, registering a year-on- year growth of 14.5%. Retail protection
business registered a strong yoy growth of 27.7% in Q4-FY2023. As a result, new
business sum assured increased from Rs 773146 crore in FY2022 to Rs 1041392 crore in FY2023 with a yoy growth of 34.7%.
Net premium
earned (gross premium less reinsurance premium) increased by 6.2% from Rs 36321 crore in FY2022 to Rs 38560 crore in FY2023. Total investment income decreased from Rs
25830 crore in FY2022 to Rs 10694 crore in FY2023.
Investment
income under unit-linked decreased from Rs 19782
crore in FY2022 to Rs 4203 crore
in FY2023, primarily due to decrease in the market value of the securities held
and a decrease in profits on sale of investments. Investment income under
unitlinked is directly offset by change in valuation of policyholder
liabilities.
Investment
income under other than unit-linked increased from Rs 6048 crore in FY2022 to Rs 6491 crore in FY2023 primarily on account of
an increase in interest income offset in part by decrease in profit on sale of
investments.
Total
expenses (including commission) increased by 17.6% from Rs 6137 crore in FY2022 to Rs 7219 crore in FY2023.
Commission
expense increased by 11.4% from Rs 1673
crore in FY2022 to Rs 1864 crore
in FY2023. New business commission (including single premium commission)
increased from Rs 1179 crore in
FY2022 to Rs 1324 crore in
FY2023 in line with growth in new business premium. The renewal commission
increased from Rs 412 crore in
FY2022 to Rs 428 crore in
FY2023.
Operating
expense increased by 20.3% from Rs 4382
crore in FY2022 to Rs 5273 crore
in FY2023. Operating expenses comprised unit fund expenses (including goods and
service tax on linked charges) amounting to Rs 671 crore (FY2022: Rs 700
crore) under the unitlinked portfolio. The unit fund expenses under the
unit-linked portfolio are directly offset by changes in the valuation of
policyholder liabilities. Operating expenses of other than unit-linked
portfolio increased by 25.0% from Rs 3682 crore in FY2022 to Rs 4602
crore in FY2023, primarily on account of increase in expenses relating to
advertisement and publicity and employee remuneration.
Claims and
benefit payouts (net of reinsurance) increased by 5.6% from Rs 29359 crore in FY2022 to Rs 31004 crore in FY2023, primarily on account
of increase in surrenders/withdrawals offset in part by a decrease in death claims.
The death claims, net of amount ceded in reinsurance, decreased by 35.1% from Rs
3601 crore in FY2022 to Rs 2337 crore in FY2023 primarily on account of
a decline in COVID-19 related death claims. The Company had COVID-19 related
death claims (net of reinsurance) of Rs 41 crore in FY2023 (Rs 1017
crore in FY2022).
Change in
actuarial liability, including funds for future appropriation and fund reserve,
decreased from Rs
25814 crore in FY2022 to Rs 10103 crore in FY2023. Change in fund
reserve, which represents the change in liability carried on account of units
held by unit-linked policyholders, decreased from Rs 12317 crore in FY2022 to Rs (6808) crore in FY2023. The decrease in
change in fund reserves is primarily due to lower investment income in the unit
linked portfolio. Non-unit reserve increased from Rs 13467 crore in FY2022 to Rs 16625 crore in FY2023.
ICICI Prudential Life
Insurance: Results Standalone Policyholders Account
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2303 (3)
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2203 (3)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Premium earned (net)
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12629.11
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11358.91
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11
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38559.53
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36321.27
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6
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Income from
Investments
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-1905.31
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1476.48
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PL
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9964.58
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24969.54
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-60
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Other income
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43.63
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32.76
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33
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151.59
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112.59
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35
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Contribution from the
Shareholders` account
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732.41
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977.58
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-25
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1802.43
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2161.11
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-17
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Total Income
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11499.84
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13845.73
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-17
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50478.13
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63564.51
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-21
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Commission
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753.51
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556.43
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35
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1863.89
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1672.91
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11
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Op. expenses related
to Insurance business
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1566.84
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1298.64
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21
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4583.23
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3672.95
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25
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Others
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205.47
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203.76
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1
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723.53
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719.53
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1
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Benefits paid (Net)
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8760.67
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8003.79
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9
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31004.16
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29358.84
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6
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Change in valuation of
policy liabilities
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-693.02
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2546.35
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LP
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9816.96
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25783.76
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-62
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Provision for taxation
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47.07
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92.67
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-49
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184.23
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166.15
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11
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Total Expense
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10640.54
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12701.64
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-16
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48176.00
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61374.14
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-22
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PAT
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859.30
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1144.09
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-25
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2302.13
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2190.37
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5
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Transfer to
Shareholders` account
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822.27
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1068.11
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-23
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2016.18
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2160.22
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-7
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ICICI Prudential Life
Insurance: Results Standalone Shareholders Account
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2303 (3)
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2203 (3)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Amounts transferred
from Policyholders` account
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822.27
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1068.11
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-23
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2016.18
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2160.22
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-7
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Income from
investments
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259.46
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166.34
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56
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877.37
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1013.62
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-13
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Total Income
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1081.73
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1234.45
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-12
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2893.55
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3173.84
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-9
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Expenses (apart from
Insurance)
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28.39
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28.87
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-2
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102.17
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102.43
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0
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Contribution to
policyholders account
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732.41
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977.58
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-25
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1802.43
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2161.11
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-17
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Others
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4.12
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6.91
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-40
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92.05
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119.75
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-23
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Total Expenses
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764.92
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1013.36
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-25
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1996.65
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2383.29
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-16
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PBT
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316.81
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221.09
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43
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896.90
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790.55
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13
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Tax
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81.94
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36.42
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125
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86.23
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36.42
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137
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PAT
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234.87
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184.67
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27
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810.67
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754.13
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7
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EPS (Rs)*
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6.5
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5.1
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5.6
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5.2
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Embedded Valued (Rs)
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247.7
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220.0
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247.7
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220.0
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* on current equity of
Rs 1438.57 crore of face value of Rs 10 each, PL: Profit to Loss, LP: Loss to
Profit,
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Figures in crore,
Source: Capitaline Corporate Database
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