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Results
18-Jul-23
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Analysis
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ICICI Prudential Life Insurance Company
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Stable performance, moderate premium collection growth
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ICICI Prudential Life Insurance Company has posted 33% jump in the
net profit of Rs 206.91 crore in the quarter ended June 2023 (Q1FY2024). The
Company registered 2% growth in net premium income in Q1FY2024. The commission
expenses jumped 25% and operating expense increased 21%. Benefits paid moved up
44% in Q1FY2024.
Value
of New Business (VNB) declined 7% to Rs 438 crore for Q1FY2024 over Q4FY2022. VNB margin eased to 30% in Q1FY24 from 32% in
FY2023 and 31% in Q1FY23. APE fell 4% to Rs 1461 crore for Q1FY2024. New
business premium declined 4% to Rs 3051 crore for Q1FY2024.
The Company
offers a wide range of products across various segments such as savings (linked
and non-linked), annuity and protection to meet the specific needs of the
customers. Protection APE grew by 4.2% year-on-year from Rs 330 crore in Q1FY2023 to Rs 344 crore in Q1FY2024. Retail protection
business APE registered a strong growth of 61.8% year-on-year from Rs 68 crore in Q1FY2023 to Rs 110 crore for Q1FY2024.
As a result,
new business sum assured increased by 8.8% year-on-year from Rs 220935 crore in Q1FY2023 to Rs 240304 crore in Q1FY2024. Retail New Business
Sum Assured grew by 39.3% year-on-year from Rs 34979 crore in Q1FY2023 to Rs 48712 crore in Q1FY2024.
Persistency
ratios have improved across all cohorts, reflective of the Company’s strong
focus on improving the quality of business. The 13th month persistency ratio
improved from 85.5% in 2MFY2023 to 86.4% in 2MFY2024. The 49th month
persistency ratio also improved from 63.3% in 2MFY2023 to 64.7% in 2MFY2024.
In Q1FY2024,
the cost to total weighted received premium (TWRP) ratio for the savings
business and the overall cost to TWRP ratio stood at 18.8% and 27.7%
respectively.
The assets
under management of the Company grew by 15.8% from Rs 230072 crore at June 30, 2022 to Rs 266420 crore at June 30, 2023. The Company
had a debt-equity mix of 54:46 at June 30, 2023 and 97.1% of the fixed income
investments were in sovereign or AAA rated instruments.
The
Company’s net worth was Rs
10520 crore end June 2023. The solvency
ratio was 203.4% against the regulatory minimum requirement of 150%.
The calculated Embedded Value per share stood at Rs 252.1 end June 2023.
Anup Bagchi,
MD & CEO, ICICI Prudential Life Insurance said, “Our very purpose of
existence is to provide financial security to our customers and their families.
We believe we are trustees of the life savings entrusted to us by our customers
to achieve their protection, retirement, health and long-term savings goals.
In Q1FY2024,
the VNB stood at Rs
438 crore, with a margin of 30%, while
PAT grew 33% year-on-year to Rs 207
crore. With customer-centricity at the core, we will continue to focus on
growing the absolute VNB, through the 4P strategy comprising Premium growth,
Protection focus, Persistency improvement and Productivity enhancement. Through
Q1FY2024, we have observed an improving trend in business, with double digit
growth in APE for the month of June 2023. Our efforts towards expanding the
protection business are visible in the 62% year-on-year growth in the retail
protection segment and this has led to the overall protection business
contributing nearly a quarter of the total APE. Further, our well-diversified
distribution network has ensured we have minimal concentration risk from any
single distributor. Our persistency across cohorts has further improved,
reflecting our need-based selling approach, with the 13th month persistency at
86.4%.
To improve our performance across the 4P strategic
elements, we have institutionalized a 4D framework comprising Data analytics,
Diversified propositions, Digitalisation and Depth in Partnerships, with a
focus on developing a quality business in a risk-calibrated manner. This
framework will ensure products are aligned with customer needs, are designed to
meet those needs effectively, are developed with the highest quality standards,
and are delivered through the most appropriate channels. Also, this framework
will help us provide simplified and hassle-free processes to our customers
across the product life cycle.”
Financial performance
Q1FY2024
Net premium
earned (gross premium less reinsurance premium) increased by 2.0% from Rs 6884 crore in Q1FY2023 to Rs 7020 crore in Q1FY2024. Total investment
income increased from a loss of Rs 8496 crore in Q1FY2023 to a gain of Rs 16327
crore in Q1FY2024.
Investment
income under unit-linked increased from a loss of Rs 9888 crore in Q1FY2023 to a gain of Rs
14159 crore in Q1FY2024, primarily due
to increase in the market value of the securities held coupled with increase in
profits on sale of investments. Investment income under unit-linked is directly
offset by change in valuation of policyholder liabilities.
Investment
income under other than unit-linked increased from Rs 1392 crore in Q1FY2023 to Rs 2167 crore in Q1FY2024 primarily on account
of an increase in profit on sale of investments and interest income.
Total
expenses (including commission) increased by 18.4% from Rs 1411 crore in Q1FY2023 to Rs 1670 crore in Q1FY2024.
Commission
expenses increased by 25.2% from Rs 306
crore in Q1FY2023 to Rs 383
crore in Q1FY2024. New business commission (including single premium
commission) increased from Rs 217
crore in Q1FY2023 to Rs 292
crore in Q1FY2024. The renewal commission increased from Rs 71 crore in Q1FY2023 to Rs 75 crore in Q1FY2024. The increase in new
business commission is primarily on account of changes in the commission
structure in line with the new guidelines issued by the IRDAI on March 31,
2023.
Operating
expenses increased by 16.8% from Rs 1085
crore in Q1FY2023 to Rs 1267
crore in Q1FY2024. Operating expenses comprised of unit fund expenses
(including goods and service tax on linked charges) amounting to Rs 157 crore (Q1FY2023: Rs 156 crore) under the unit-linked 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 19.5% from Rs 929 crore in Q1FY2023 to Rs 1110 crore in Q1FY2024, primarily on account
of continued investment in capacity creation to support future growth. The
increase in operating expenses is primarily on account of higher advertisement
and sales related cost and employee remuneration.
Claims and
benefit payouts (net of reinsurance) increased by 44.2% from Rs 5512 crore in Q1FY2023 to Rs 7946 crore in Q1FY2024, primarily on account
of higher surrenders/withdrawals in the unit-linked portfolio. The claims and
benefits under the unit-linked portfolio are directly offset by changes in the
valuation of policyholder liabilities.
Change in actuarial liability, including funds for
future appropriation and fund reserve, increased from Rs (8701) crore in Q1FY2023 to Rs 13559 crore in Q1FY2024. Change in fund
reserve, which represents the change in liability carried on account of units
held by unit-linked policyholders, increased from Rs (12015) crore in Q1FY2023 to Rs 10128 crore in Q1FY2024. The increase in
change in fund reserves is primarily on account of higher investment income in
the unit linked portfolio. Non-unit reserve increased from Rs 3215 crore in Q1FY2023 to Rs 3610 crore in Q1FY2024.
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%.
ICICI Prudential Life
Insurance: Results Standalone Policyholders Account
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2306 (3)
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2206 (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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7020.03
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6884.20
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2
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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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16030.89
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-8670.84
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LP
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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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44.65
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33.33
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34
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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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445.64
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292.12
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53
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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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23541.21
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-1461.19
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LP
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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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383.46
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305.91
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25
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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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1111.23
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918.37
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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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153.23
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162.86
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-6
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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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7945.81
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5512.49
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44
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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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13737.96
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-8799.87
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PL
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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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8.84
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44.10
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-80
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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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23340.53
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-1856.14
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PL
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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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200.68
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394.95
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-49
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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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379.60
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296.00
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28
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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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2306 (3)
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2206 (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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379.60
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296.00
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28
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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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333.55
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175.06
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91
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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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713.15
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471.06
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51
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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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23.16
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23.25
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0
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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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445.64
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292.12
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53
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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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35.87
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0.00
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-
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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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504.67
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315.37
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60
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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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208.48
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155.69
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34
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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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1.57
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0.00
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-
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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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206.91
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155.69
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33
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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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5.8
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4.3
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5.6
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5.2
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Embedded Valued (Rs)
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252.1
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224.4
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247.7
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220.0
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* on current equity of
Rs 1438.86 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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