Q2FY23 Preview: HDFC Life Insurance Company: Total APE seen at Rs26.3 billion, VNB margin at 27.5%

20 Oct 2022 , 07:41 AM

Result date: 21^st October, 2022
Recommendation: Add
Target price: Rs640

Analysts at IIFL Capital Services believe that HDFC Life Insurance Company (HDFC Life)’s balanced product mix will continue to help navigate the business cycle. HDFC Life should see APE growth of 3% over the year-ago quarter, as retail regular premiums are offset by weakness in single premiums, with 100 basis points margin expansion.

Renewal premium could see a healthy growth even as New Business Premium could decline.

HDFC Life’s expense ratio could see an uptick — in line with a pick-up in business growth.

Important management insights to watch out for:

• Demand trends across sections
• Market share movement during the quarter
• Margin outlook
• Improvement in persistency ratio

Rs. Billion	September 2022 estimates	YoY change
New Business Premium	61.9	(6.2)%
Renewal Premium	57.9	15.0%
Total APE	26.3	3.2%
Savings APE	23.0	3.3%
Protection APE	3.3	2.1%
VNB	7.2	7.1%
VNB Margin	27.5%	100 basis points

Source: Company, IIFL Research