Buy HDFC Life Insurance; target of Rs 910: Motilal Oswal

Motilal Oswal's research report on HDFC Life Insurance

HDFC Life Insurance (HDFCLIFE) reported an APE of INR41.9b (in line) in 2QFY26, up 9% YoY. This was led by a 9%/7% YoY growth in individual/ group APE. For 1HFY26, APE grew 10% YoY to INR74.1b. HDFCLIFE’s VNB grew 8% YoY to INR10.1b in 2QFY26 (in line), resulting in a VNB margin of 24.1% (vs. our estimate of 24%). For 1HFY26, VNB grew 10% YoY to INR18.2b, leading to a VNB margin of 24.5% (flat YoY). For 2QFY26, HDFCLIFE reported a 3% YoY growth in shareholders’ PAT to INR4.5b (6% miss), supported by a 14% increase in back-book profits. For 1HFY26, its PAT grew 9% YoY to INR9.9b while EV at the end of 1HFY26 was at INR595.4b (RoEV of 14.2%).

Outlook

We have factored in a 0.5% EV hit on the back book, resulting in a 0.6% decline in our FY26/27/28 EV estimates. We roll over to Sep'27E EV to arrive at our TP of INR910 (based on 2.4x Sep'27E EV). Reiterate BUY.