Q4FY24 Preview: HDFC Life Insurance Company: APE seen at ₹48.1 Billion, VNB Margin at 27.6%

16 Apr 2024 , 12:57 PM

Result date: April 18, 2024

Recommendation: Add

Target price: ₹720

Analysts at IIFL Capital Services believe HDFC Life Insurance Company (HDFC Life) could witness modest growth in annualized premium equivalent (APE) during the quarter, as compared to the year-ago quarter. This softness growth in APE comes on a tough base, driven by a strong performance in the year-ago quarter, largely due to the pent up selling of non-par savings products in March 2023 ahead of tax-related changes w.e.f. April 1, 2023. Renewal premium though could grow at a robust pace of 18.5% over the year-ago quarter.

Higher share of non-par savings products in the base quarter coupled with increased traction in ULIPs during the quarter under review could result in margins declining by 170 basis points.

Important management insights to watch out for:

• Outlook on growth of Non-Par and Protection products
• Developments in competitive landscape

₹ Billion	March 2024 estimates	YoY change
New business premium	91.1	(12.2)%
Renewal premium	109.7	18.5%
Total APE	48.1	(6.9)%
VNB	13.2	(12.4)%
VNB Margin (%)	27.6%	(170) bps

Source: IIFL Research