Q3FY24 Preview: HDFC Life Insurance Company: Total APE seen at Rs. 31.5 Billion, VNB at Rs. 8.4 Billion

11 Jan 2024 , 11:24 AM

Result date: January 12, 2023

Recommendation: Add

Target price: Rs. 710       

Analysts at IIFL Capital Services believe HDFC Life Insurance Company (HDFC Life) should see annual premium equivalent (APE) decline of 3% over the year-ago quarter; while margins are expected to remain flat. They believe HDFC Life’s balanced product mix will continue to help navigate the business cycle.

Value of New Business (VNB) is estimated at Rs. 8.4 Billion, down 3.6%. This, in turn, could lead to flattish VNB margin, as per analysts at IIFL Capital Services.

Important management insights to watch out for:

• VNB margin outlook 
• Growth across product lines, particularly protection
• Impact of IRDA proposals on surrender penalty caps

Rs. Billion	December 2023 estimates	YoY change
New business premium	71.9	(2.7)%
Renewal premium	86.5	20.4%
Total APE	31.5	(3.4)%
Savings APE	26.8	(4.8)%
Protection APE	4.7	5.1%
VNB	8.4	(3.6)%
VNB margin (%)	26.8%	0 bps

Source: IIFL Research