HDFC Life Q1 Results Review - Management Expects APE Growth To Drive New Business Growth: Yes Securities

Yes Securities Report

Management expects HDFC Life Insurance Company Ltd. to do better than industry annual premium equivalent growth, which in turn would drive value of new business growth:

For the quarter, the APE was Rs 28,660 million down by -39.4% QoQ but up 23.1% YoY. The company will target growing retail new business APE at a pace faster than the industry. The company’s target is to grow absolute VNB and is willing to allow margin to fluctuate in a range in order to deliver growth.

The company will target doubling VNB over four years on a consistent basis. The counter share on HDFC Bank was 66% by the end of Q1 FY25 compared with 56.5% in Q1 FY24 and is expected to go up more.

The agency channel has grown at 14%, which could have been faster but the company is focused on profitable growth. The company has added 18,500 agents in Q1 FY25, which is the highest in the industry

We maintain an ‘Add’ rating on HDFC Life with a revised price target of Rs 705.

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