Q4FY23 Preview: HDFC Life Insurance Company: VNB margin seen at 34.0%

24 Apr 2023 , 06:34 PM

Result date: 26^th April, 2023

Recommendation: Add

Target price: Rs 630

 

Analysts at IIFL Capital Services expect HDFC Life Insurance Company (HDFC Life) to post 38% growth in APE over the year-ago quarter (adjusted for the Exide acquisition).

Lower share of retail protection products coupled with merger of Exide will lead to a 430 basis points contraction in VNB margin as compared to the year-ago quarter.

Overall, though the company has a balanced product mix which will help it navigate the business cycle, believe analysts at IIFL Capital Services.

Important management insights to watch out for:

• Demand trends across product categories
• Update on actual impact of the changes announced in the Union Budget

Rs Billion	March 2023 estimates	YoY change
New Business Premium	60.9	24.2%
Renewal Premium	72.1	5.9%
Total APE	30.8	18.3%
VNB	10.5	35.3%
VNB Margin	34.0%	430 bps

Source: IIFL Research