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Buy HDFC Life Insurance Company; target of Rs 706: KR Choksey

KR Choksey is bullish on HDFC Life Insurance Company has recommended buy rating on the stock with a target price of Rs 706 in its research report dated July 21, 2022.

July 21, 2022 / 11:10 AM IST
 
 
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KR Choksey's research report on HDFC Life Insurance Company


The Gross written premium for Q1FY23 stood at INR 93,961 Mn, a healthy growth of 22.7% YoY owing to strong growth across all the segments, while the GWP reported a decline on sequential basis by 34.8% QoQ. New business margin (NBM) expanded by 65 bps YoY to 26.8% in Q1FY23 on the back of profitable product mix and growth in protection business, while declined 273 bps QoQ. The value of new business increased to INR 5,100 Mn, registering a YoY growth of 25% in Q1FY23. Profit after tax stood at INR 3,563 Mn, a growth of 20.8% YoY and 2.2% QoQ. Solvency as on June 30, 2022, stood at 178%. YoY vs 203% as of June 30, 2021. The fall in solvency is post the cash payout of INR 7,260 Mn to Exide Industries, as part-consideration for the acquisition of Exide Life. AUM as of June 30, 2022, stood at 2,001 Bn, a growth of 10.4% YoY (-2.0% QoQ).



Outlook


We assign a 3.25x P/EV on FY24E EVPS of INR 227.0, a VNB multiple of 26x to HDFC Life, and arrive at the weighted average Target Price at INR 706 per share (unchanged) (50:50 weights on the P/EV and appraisal value methodology), implying a 34.4% upside potential over CMP. We have maintained our 'BUY' rating on HDFC Life Insurance Co. Ltd.


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At 11:09 hrs HDFC Life Insurance Company was quoting at Rs 527.50, up Rs 2.60, or 0.50 percent.


It has touched an intraday high of Rs 528.00 and an intraday low of Rs 519.10.


It was trading with volumes of 55,580 shares, compared to its thirty day average of 113,632 shares, a decrease of -51.09 percent.


In the previous trading session, the share closed down 2.04 percent or Rs 10.95 at Rs 524.90.


The share touched its 52-week high Rs 775.65 and 52-week low Rs 497.30 on 02 September, 2021 and 08 March, 2022, respectively.


Currently, it is trading 31.99 percent below its 52-week high and 6.07 percent above its 52-week low.


Market capitalisation stands at Rs 111,469.85 crore.


For all recommendations report, click here


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HDFC Life Insurance Company - 210722 - kr

Broker Research
first published: Jul 21, 2022 11:10 am
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