Objective: ₹ 870
CMP: ₹ 712.55
HDFC Life Insurance reported a 15.7 percent increase in the entry of net premiums, backed by strong growth in individual and renewal premiums at 19.1 percent and 14.5 percent, respectively, while the first year premium grew 9.4 percent. The company’s equivalent of the company increased 9.7 percent to ₹ 5,186 million rupees, and the new commercial premium (NBP) increased by 15.1 percent to ₹ 10,969 million fourth rupees.
Despite the solid performance, management expects moderate growth in H1-FY26 due to a high base effect. However, they anticipate a recovery in H2Fy26. In general, the growth of FY26 is expected to be in adolescence. The perspective remains positive driven by the combination of products and the distribution force.
We maintain a purchase rating at HDFC Life with an objective price of ₹ 870, valuing the company at 2.6x FY27E EV. Premium growth remains strong, backed by robust performance in individual and renewal segments. Technological innovation and new product releases are expected to accelerate growth, while better persistence will help margin stability.
However, continuous investments in digital infrastructure and a stable agency mixture can maintain margins that extend in the short term. Despite the winds against regulatory that slightly affect the margins of fiscal year 200, HDFC Life is well positioned to offer leading industry growth and higher profitability, justifying its premium valuation versus pairs.
Posted on April 22, 2025
