of 26.4% on the back of a favourable product mix and cost control measures. The value of new business (VNB) jumped 27% to Rs 570 crore in Q3FY2021 from Rs 450 crore in Q3FY2020. The company has posted 20% surge in total premium collection to Rs 9628 crore,...

In Q3FY21, Gross premium income increased by 20.3% YoY, primarily owing to solid performance from renewal premiums (+21.5% YoY) and single premium (+21.8% YoY). Overall performance aided by strong...

HDFC Life Insurance Company (HLI) reported 20% YoY growth in individual APE in 3QFY21, led by par and non-par segments. For 9MFY21, individual APE is up 6% YoY. Being one of the first movers in the space (started years ago), the overall protection business has also seen strong growth. Protection APE grew by 17% YoY (9MFY21) while annuity saw 42% YoY growth. Credit protect has seen strong pick up QoQ, clocking business worth Rs10bn in 3QFY21 compared to Rs7bn in 2QFY21 and Rs2.4bn in 1QFY21. For 9MFY21, the credit protect business is down 37% YoY, but the outlook remains positive. In 3QFY21, ULIP was down 13% YoY, which highlights the management's tilt toward long-term insurance products such as...

HDFC Life's APE grew by 18% YoY although individual APE continued to grow better at 20% YoY in Q3. This has led to APE growth to move to positive 3% YoY in 9MFY21 from -4% YoY in H1FY21. Continued growth across product segments on individual basis was seen with strong focus remaining on protection, PAR picking up strongly and recovery in ULIP. This balanced growth also led to gradual uptick in margins of 50bps from H1 to 9MFY21. With new term product with tweaked pricing (we hear double digit price increase) margin pressure should be off and gradually expand faster in next...

Gross premium growth remained healthy at 20.3% YoY to | 9628.21 crore, led by higher traction in renewal (up 21.5% YoY) and single premium (up 21.8% YoY). Growth in renewal premium continued to remain healthy at ~22% YoY to |4576.98 crore. New Business Premium (NBP) witnessed slight moderation at 19% YoY to | 5051.23 crore, due to sluggish group business. On APE basis, growth in premiums stood at 15.9% YoY to | 2100.14 crore, Individual APE for 9MFY21 stood at | 4660 crore, which was up by 6% YoY. Growth in retail protection stood at 17% YoY and 42%...

HDFC Life is focused on delivering consistent profitability with steady growth. GWP has grown at 17.1% CAGR in FY15-20. Value of new business (VNB) saw growth at 26.6% CAGR in FY15-20 while VNB margin expanded ~740 bps to 25.9% in FY20 from 18.5% in FY15. PAT posted ~10.5% CAGR in the past five years to | 1295 crore for FY20. The company has a healthy RoEV at 18.1% for FY20 and has remained at ~20% mark in the past few...

Strong product mix and APE (Annualized Premium Equivalent) growth in individual protection segment along with improvement in premiums through digital payments should help performance. Hence, we upgrade our rating to BUY with a revised target price of Rs. 660 based on 4.5x FY22E Embedded Value per share. Growth momentum continues for premium Q2FY21 gross premium rose 34.8% YoY to Rs. 10,182cr on account of strong growth under renewal premium (+20.8% YoY to Rs. 4,310cr), single premium (+65.5% YoY to...

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...