Private players for Sep'20 delivered a robust NBP growth of 20.1% YoY. On the APE front, growth of private players witnessed just 4% YoY growth. Amongst the listed private players HDFC Life outperformed gaining market share and delivering a healthy NBP / APE growth on YoY/ MoM basis. Max Life also

Momentum picking up, HDFC Life performance strong Given the July 2020 numbers, we believe that the traction has been improving and the momentum is likely to sustain in the ensuing months/quarters as the economy reverts back towards normalcy. For July 2020, total industry-wide individual APE was down 0.3% YoY compared to the ~44% YoY decline in April 2020 and ~20% YoY decline in May 2020. June 2020 saw strong recovery in new business with sales being down only 1.4% YoY. LIC has continued to outperform the industry, growing by 9.6% YoY (individual APE). At the same time, the private industry's individual APE was down 7.1% YoY, but much better than the first two months of...

HDFC Life Insurance gains after Q1 PAT rises 6% to Rs 451 cr, in line with estimates HDFC Life Insurance Company has recorded 6% growth in the net profit to Rs 451.09 crore in the quarter ended June 2020 (Q1FY2021). Despite the expected drop in business volumes, the company delivered a healthy new business margin of 24.3% on the back of a favourable product mix and cost control measures. The impact of covid 19 spread and lockdown is...

Valuation and Outlook: We have valued the stock based on 4.9x forward P/EV with a discount of 0.8x and 56.7x forward P/VNB and has arrived at a price target of Rs. 695 with potentialupside of 9%. We rate the stock as HOLD'.

Favorable product mix and healthy growth in individual protection segment should support company's outlook in near term. However, given current higher valuation, we see limited upside on the stock with a revised target price of Rs. 680 based on 4.5x FY22E. EV per share. Rapid growth in renewal collection Despite the robust growth in renewal premium, up 24.1% YoY to Rs. 3,239cr (contributing 55.3% of total gross income), company's gross premium income fell 10.3% YoY to Rs. 5,862cr. The decline was mainly attributable to lower first year...

HDFC Life's overall APE de-grew by 30% YoY as FYP and Single Premiums de-grew 23%YoY/38%YoY respectively. Product mix on Ind. APE basis continued its bias in Par segment from NPar (slowed SP product on higher base) which also has drag on margins being maintained at 24.3% (flat QoQ) as individual protection business still was better. Structurally growth pull back will be stronger with better positioning on protection, digital and tech led adoption. Although, in medium term slower attachment rates in credit life, on-par peer positioning in term insurance rates and lower room for risks on...

HDFC Life Insurance Company (HLI) has reported a relatively better performance than peers. The decline in individual APE was 22% YoY, lower than peers. Total APE declined by 30% YoY. Growth in individual protection APE was strong at 50% YoY and is likely to remain so, given the company's leadership position in the protection segment. Overall protection was however down 48% as credit protect declined by 74% on the back of adverse impact on lending during the quarter. The company expects credit protect to pick up from 3QFY21 onwards. Given the company's balanced product mix, we remain positive on the company's growth trajectory relative to peers. Renewals growth was strong at 24% YoY though the company remains...

HDFC Lifes (HDFCLIFE) reported weak business trends with new business APE declined 30% YoY affected by lockdown and weak buyer sentiment towards ULIP segment while the individual protection & PAR reflected strong traction. Overall, we expect VNB margins to gradually improve to ~26% by FY22E, led by 1QFY21 shareholders PAT grew 6% YoY to INR4.5b (above our estimates), supported by strong opex control even as business growth was weak. However in the near term, Individual Protection/PAR segments are likely to see healthy growth while ULIP trends should remain sluggish. HDFCLIFE has strong positioning, which is helping drive higher business It is witnessing some decline in persistency in the ULIP segment while it remains In non-PAR savings, it has cautiously slowed down in the current environment. However in the near term, Protection/ PAR segments are likely to see healthy growth while ULIP trend should remain sluggish.

HDFC Life has increased focus on the Protection and Non-PAR segments; the Non-PAR Savings business grew at ~220% YoY and the Protection business at 15% YoY. The Annuity business is gaining momentum; thus, its share has improved to ~16% of NBP (4% of the total individual APE). The share of Protection has improved to ~17.2% of the total APE. Furthermore, growth in new business premiums, led by the Group Savings business, increased at 25% YoY. HDFC Life reported improvement in persistency, led by a focus on better quality business, the leveraging of technological capabilities, and need-based selling, resulting in surrenders declining to ~35% in FY20 from ~76% in FY15. Surrenders and withdrawals together as a percentage of total benefit payouts declined to ~48% in FY20, from ~64% in FY18, weighed by management focus on need-based selling.

Valuation and Outlook: We have valued the stock based on 5x forward P/EV and 57.5x forward P/VNBwith a premium of 1.05x and has arrived at a price target of Rs. 574 with potentialupside of 11%.

Valuation and Outlook: We have valued the stock based on 5x forward P/EV and 57.5x forward P/VNB with a premium of 1.05x and has arrived at a price target of Rs. 574 with potential upside of 11%.

medical services whereas normal business growth was led by protection (marketing the increase in rates was one factor) and push from online channel sales. We believe, May & Jun should trend with similar de-growth numbers and will pick up only in 2HFY21....