Emkay Global Financial's report on HDFC Life Insurance
After navigating smartly and delivering robust performance in an uncertain and challenging year FY22, HDFCLIFE management sounded confident about the growth and margin outlook for FY23. Its FY22 results came broadly in line with our estimates with a minor positive surprise on the VNB margin front, led by a better product mix and operating leverage supporting margins in Q4. The acquisition and integration process of Exide Life is well on track and management expects standalone margins to improve in FY23 and the consolidated margins to be flat at FY22 levels. After the recent corrections, the valuation premium of HDFCLIFE versus peers has narrowed. Notwithstanding nearterm market volatility and the upcoming LIC IPO, the fundamental story of consistent profitable growth remains intact.
We reiterate our Buy rating on the stock with a revised target price of Rs690.
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