HDFC Life Insurance Company Ltd. share price target

Q1FY26 got off to a solid start, with impressive growth in topline, new business value and stable margins. In addition, as the impact of surrender regulations normalise, new business margins are also expected to improve. HDFC Life is well-positioned for sustained growth due to its robust execution, experienced management, diversified product portfolio, extensive distribution network through continued investment in agency and branch expansion, increasing penetration in Tier 2 and Tier 3 cities,...

We reiterate our “BUY” rating on the stock, as we expect strong premium growth,
stable margins, and a resilient product mix to underpin sustainable profitability and market share gains in FY26E.

HDFC Life Insurance (HDFCLIFE) reported APE of INR32.3b (in-line) in 1QFY26, up 13% YoY, driven by 13%/12% YoY growth in individual/group APE.

APE grew by 9% y-o-y in Q4FY25, while VNB grew by 12% y-o-y. For FY25, APE grew 16% y-o-y, Individual APE grew by 18% and value of new business (VNB) grew by 13% y-o-y.

HDFCLIFE reported an overall steady performance in growth (Retail APE YoY growth – FY25: 18%; Q4FY25: 9.7%) and profitability (FY25 VNB margin: 25.6%; VNB growth: 13% YoY) despite the headwinds from new surrender regulation implementation and decline in the MFI-linked Credit Life segment.

HDFCLIFE reported below expectations APE growth of 9.7% YoY in Q4FY25 (up 17% YoY in FY25)

HDFC Life Insurance (HDFCLIFE) reported APE of INR51.9b (in line) in 4QFY25, up 10% YoY, driven by 9%/13% YoY growth in individual/group APE. For FY25, APE grew 16% YoY to INR154.8b.

A frontrunner in a growing industry

HDFC Life continues guide for 18-20% APE growth and >15% VNB growth in the next couple of quarters. APE growth remained healthy at 20% y-o-y while VNB grew by 14% y-o-y in 9MFY25.

HDFCLIFE reported an impressive performance in 9MFY25, with APE 1.6% above our estimate at Rs102.9bn, and VNB margin at 25.1% above our estimate of 24.5% resulting in a 4.2% beat on VNB at Rs25.9bn.

HDFCLIFE reported stronger-than-expected APE growth of 20%/12% YoY in 9MFY25/Q3FY25

HDFCLIFE reported broadly in-line numbers for H1FY25, with APE 3.6% above our estimate at Rs67.2bn however, VNB Margin at 24.6% missed our estimate of 25.1% resulting in largely in-line VNB at Rs16.6bn.

VNB margins lagged estimates, fell by ~200 bps y-o-y reported at 24.3% vs estimates of 25.4% due to adverse product mix and repricing of IRR downwards for some of the existing non-par savings & annuity products (one off item).

We maintain a Buy on HDFC Life with a revised PT of Rs.870. The company is confident of growing
retail APE higher than industry APE and doubling VNB every four years.

HDFC Life (HDFCLI) reported 18% growth in VNB YoY despite 113bps reduction in VNB margin to 25.1% in Q1FY25. This, along with strong 39% growth in non-par, 31% growth in individual protection and 22% growth in number of policies underline HDFCLI’s execution efforts as it aims to clock 18–20% VNB CAGR.

HDFC Life Insurance (HDFCLIFE) in 1QFY25 reported lower-than-expected
VNB margins at 25% (est. 26%), with absolute VNB increasing 18% YoY to
INR7.2b (in line with estimate).