Here's Why We Think ICICI Prudential Life Insurance (NSE:ICICIPRULI) Is Well Worth Watching

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in ICICI Prudential Life Insurance (NSE:ICICIPRULI). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide ICICI Prudential Life Insurance with the means to add long-term value to shareholders.

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ICICI Prudential Life Insurance's Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. ICICI Prudential Life Insurance managed to grow EPS by 15% per year, over three years. That's a pretty good rate, if the company can sustain it.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. It's noted that, last year, ICICI Prudential Life Insurance's revenue from operations was lower than its revenue, so that could distort our analysis of its margins. Unfortunately, ICICI Prudential Life Insurance's revenue dropped 42% last year, but the silver lining is that EBIT margins improved from 1.2% to 3.4%. That's not a good look.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

View our latest analysis for ICICI Prudential Life Insurance

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of ICICI Prudential Life Insurance's forecast profits?

Are ICICI Prudential Life Insurance Insiders Aligned With All Shareholders?

As a general rule, it's worth considering how much the CEO is paid, since unreasonably high rates could be considered against the interests of shareholders. The median total compensation for CEOs of companies similar in size to ICICI Prudential Life Insurance, with market caps over ₹719b, is around ₹99m.

ICICI Prudential Life Insurance offered total compensation worth ₹76m to its CEO in the year to March 2025. That seems pretty reasonable, especially given it's below the median for similar sized companies. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of good governance, more generally.

Is ICICI Prudential Life Insurance Worth Keeping An Eye On?

As previously touched on, ICICI Prudential Life Insurance is a growing business, which is encouraging. Not only that, but the CEO is paid quite reasonably, which should prompt investors to feel more trusting of the board of directors. So all in all ICICI Prudential Life Insurance is worthy at least considering for your watchlist. Even so, be aware that ICICI Prudential Life Insurance is showing 1 warning sign in our investment analysis , you should know about...

Although ICICI Prudential Life Insurance certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Indian companies that not only boast of strong growth but have strong insider backing.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.