Prabhudas Lilladher recommended accumulate rating on HDFC Life Insurance Company with a target price of Rs 604 in its research report dated October 23, 2019.
Prabhudas Lilladher's research report on HDFC Life Insurance Company
HDFC Life's overall APE grew 38% YoY driven by growth in decent NBP & regular premiums. Company's Indi APE product mix shift to non-par savings continues driven by growth from Annuities/Guaranteed products but same dragged on margins QoQ to 27.5% in H1FY20 from 29.8% in Q1FY20 on lag in pricing and new business strain along with movement in channel mix. Most metrics have continued to show improvement especially persistency. Although, recent run-up in valuations of 4.0x Sep-FY22 EV has left little room for large upside, while risk on margin coming off if growth slows in H2FY20.
We downgrade to HOLD from BUY with revised TP of Rs604 (from 585) based on 3.9x Sep-22 EV rolled from Mar-21 EV.
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