HDFC Life starts FY26 on a stable footing, eyes stronger second half

HDFC Life sees steady Q1 with margin gains

India’s largest private life insurer, HDFC Life, posted a steady performance for the June quarter of FY26, with double-digit growth in both Annual Premium Equivalent (APE) and Value of New Business (VNB). Margins also expanded modestly during the quarter, pointing to operational stability.

The management maintained a cautious tone for the near term but expressed confidence in a stronger second half of the fiscal.

“We expect growth to be somewhat muted for another quarter due to the ongoing macroeconomic pressures,” said Vibha Padalkar, MD & CEO of HDFC Life, during the post-earnings call. “There’s a visible slowdown in consumption, and external factors such as tariff uncertainties are still unresolved.”

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Despite these headwinds, the company began the fiscal year on a healthy note, starting with a VNB margin of 25.1 percent, compared to 24.7 percent in the same period last year, even after factoring in the impact of surrender charges. “Starting at 25.1 percent gives us a good base for the year,” Padalkar added.

On the product mix, HDFC Life continues to shift towards traditional products, particularly participating (par) policies, as customer retention has shown improvement in par plans.

In Q1FY26, par products contributed 32 percent to the overall mix, up significantly from 16 percent in Q1FY25. Non-par savings products saw a drop in contribution to 19 percent, down from 35 percent last year. Meanwhile, ULIPs held steady at 38 percent, unchanged from the previous year.

Looking ahead, the company aims to maintain non-par contributions in the mid-20s, while allowing the share of par products to come down slightly but still stay above the 25 percent mark.

The management also reiterated its view that VNB margins are likely to remain rangebound for the rest of FY26, with a sharper growth recovery expected in the second half of the year.