HDFC Life Insurance Q1 result: Net profit rises 15% to Rs 415 crores

HDFC Life Insurance

HDFC Life Insurance on July 21 reported a net profit of Rs 415 crores for the April-June quarter of FY24, up by 15 percent from Rs 361 crores recorded in the year-ago period.

The net premium income of the insurer came in at Rs 11,479 crores, up 16.5 percent from Rs 9,847 crores in the year-ago quarter.

Following the earnings, shares of HDFC Life on July 21 were trading nearly 4 percent down at Rs 636.50 apiece on BSE at 2:30 pm.

The company reported annualised premium equivalent (APE), which is a measure of new business written by a life insurance company, of Rs 2328 crores, slightly missing market expectations which expected APE to grow to Rs 2340 crores.

The insurer’s solvency ratio improved during the April-June FY24 quarter and at 200 percent, compared to 183 percent a year ago. The solvency ratio of a life insurance company measures its cash flow in comparison to the amount it owes as total life cover.

The company's value of new business, which measures the expected profit from new premiums, grew by 18 percent to Rs 610 crores from Rs 518 crores.

"HDFC Bank Ltd. now holds 50.4 percent of HDFC Life. Our focus is on strengthening our partnership with HDFC Bank, enhancing collaboration, and maximising customer engagement within our group," said Vibha Padalkar, managing director and chief executive officer (MD & CEO), HDFC Life, in a statement.

In Budget 2023, Finance Minister Nirmala Sitharaman announced that income from traditional insurance policies where the premium is over Rs 5 lakh will no more be exempt from taxes.

Following this, HDFC Life and several other insurance stocks took a knock. However, it has now got a boost after HDFC Bank-HDFC merged entity was given approval to hold over 50 percent in the company.