Buy HDFC Life Insurance; target of Rs 775: Emkay Global Financial

Emkay Global Financial's research report on HDFC Life Insurance

HDFCLIFE reported an overall steady performance in growth (Retail APE YoY growth – FY25: 18%; Q4FY25: 9.7%) and profitability (FY25 VNB margin: 25.6%; VNB growth: 13% YoY) despite the headwinds from new surrender regulation implementation and decline in the MFI-linked Credit Life segment. Notwithstanding the intermittent short-term volatilities owing to the challenging macro environment and regulatory landscape changes, the management remains confident of doubling key performance metrics over 4 years – to help achieve this, it continues to invest in building capabilities and driving innovation. To account for the Q4 developments and future guidance, we marginally tweak our FY26-27 estimates which leads to a broadly unchanged (ie around -/+1%) VNB and EV.

Outlook

We reiterate BUY on the stock, with unchanged Mar-26E TP of Rs775 (implying FY27E P/EV: 2.2x).