KR Choksey's research report on HDFC Life Insurance Co
The Gross Written Premium (GWP) for Q1FY25 stood at INR 128,109 Mn, a growth of 9.7% YoY, primarily led by the renewal segment. On a QoQ basis, the GWP declined by 38.8% on account of a high base of Q4FY24. GWP was lower than our estimates because of lower-than-expected renewal premium growth. The Value of the New Business (VNB) grew by 18.0% YoY to INR 7,200 Mn, led by healthy growth in APE. PAT for Q1FY25 was INR 4,197 Mn, a growth of 15.0% YoY/ 16.0% QoQ. The Embedded Value (EV) of HDFCLIFE was INR 496.1 Bn as of June 30, 2024, an increase of 18.6% YoY and 4.5% QoQ. We have adjusted our VNB margin estimates for FY25E/FY26E downward by approximately 50 basis points in light of the increasing prominence of ULIPs and believe it to remain range bound at these levels.
Outlook
We maintain our BUY rating on the stock with a target price of INR 765 per share (earlier INR 745), assigning a multiple of 2.5x.
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