HDFC Life Q2 net profit down 27% at Rs.328 crore on sequential basis

HDFC Life reported total income of Rs.16,426 crore for the quarter ended on Sep-20. This is a 90% growth on a yoy basis and 13% growth on a sequential basis.

Oct 19, 2020 04:10 IST India Infoline News Service

HDFC Life reported total income of Rs.16,426 crore for the quarter ended on Sep-20. This is a 90% growth on a yoy basis and 13% growth on a sequential basis. The net profits for the quarter were sharply down on a sequential basis by 27% at Rs.328 crore. However, on a yoy basis, the net profits were up 6%.

In short, the pandemic quarter ended Jun-20 has been one of the best quarters for HDFC Life in terms of profits and that is evident from the net profit margin at 3.11% in Jun. Relatively, the net margins for the Sep-20 quarter are down to just 2%, something that could impact valuations of the company.
Here are the financial highlights


Particulars Sep-20 Quarter Growth (YOY) Growth (QOQ)
Total Revenues Rs16,426cr +89.64% +13.12%
Net Profits Rs328cr +6.10% -27.31%
Key Ratios Sep-20 Quarter Sep-19 Quarter Jun-20 Quarter
Diluted EPS Rs1.62 Rs1.53 Rs2.23
Net Profit Margin 2.00% 3.57% 3.11%
Solvency Ratio (%) 203% 192% 190%
Mgt Expense Ratio (%) 15% 19.3% 15.5%
Policy Liabilities / Share Holder Funds (%) 1810% 1965% 1778%

Key takeaways from the Sep-20 quarter results
  • The solvency ratio of HDFC Life has gone up to 203% in the latest quarter as compared to sub-200% levels in the June and Sep-19 quarters.
  • Compared to Sep-19 quarter, the company has manged to rein in management expenses ratio at around 15% compared to 19.3% last year in Sep-19 quarter.
  • Durnig the June quarter, HDFC Life like most of the other life insurance companies saw a surge in policy buying due to the fear factor in the aftermath of COVID-19. That appears to have tapered to more normal levels.


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