HDFC Life Insurance Q2 Results: Net Profit Rises 15%, Misses Estimates

HDFC Life Insurance Co.'s net profit rose 15% year-on-year in the July-September quarter but missed the analysts' estimate.

The insurer posted a net profit of Rs 433 crore in the quarter ended Sept. 30, 2024. That compares with consensus estimate of Rs 543 crore of analysts polled by Bloomberg. In the year-ago period, the company posted a net profit of Rs 377 crore.

The net premium income during the quarter under review climbed 12% year-on-year to Rs 16,570 crore, compared to Rs 14,756 crore in the corresponding quarter of the previous fiscal.

The value of new business grew 17% YoY to Rs 938 crore in the September quarter. However, the VNB margin declined to 24.3% from 26.3% in the year-ago period and from 25.1% in the preceding quarter.

• Net profit up 15% at Rs 433 crore (Bloomberg estimate: Rs 543 crore).

• Annualised premium equivalent grew 26.7% to Rs 3,858 crore.

• Value of new business advanced 17.1% to Rs 968 crore.

• VNB margin declined to 24.3% from 26.3%.

HDFC Life's solvency ratio slipped to 181%, compared to 186% in the June quarter. The 13th month persistency ratio fell to 82.5% from 84%, whereas the 61st month persistency ratio improved to 67.9% from 51.4% in the year-ago period.

Shares of HDFC Life Insurance slipped following the second quarter results as the insurer's net bottomline missed the estimates. The scrip was trading 3.19% lower at Rs 716.95 apiece, compared to a 0.32% decline in the benchmark Nifty 50.

The stock has risen 10.7% year-to-date, and by 14.5% over the past 12 months.

Out of 32 analysts tracking the stock, 27 have a 'buy' rating, four suggest a 'hold', and one recommends to 'sell', as per Bloomberg data. The average of 12-month analysts' price targets implies a potential upside of 9.2%.