HDFC Life Insurance Company Ltd. share price target

Margins remain steady at 26% in FY21 and largely in-line with expectations HDFC Life's GWP grew by 18% YoY in FY21 and 22% YoY in Q4FY21 leading to a better APE growth of 13% in FY21 v/s 30% decline post lockdown and was led by continued growth in non-Par savings segment, Margins were steady at 26% in FY21 & 27% in Q4FY21 and largely in-line with expectation. Margin expansion has been not large as protection business has been slower in H2FY21 and higher mortality charges (COVID reserve) and fixed cost in the credit product business. Company has been able to steady its product mix to...

IPru Life posted a 7% YoY growth on overall APE and 6% on individual APE, a first positive growth in 13 months. On FYTD21 new business de-grew -27% and is likely to end in negative growth for second consecutive year. IPru Life...

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...

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'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...

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...