Buy HDFC Standard Life Insurance; target of Rs 518: Prabhudas Lilladher

Prabhudas Lilladher is bullish on HDFC Standard Life Insurance has recommended buy rating on the stock with a target price of Rs 518 in its research report dated April 18, 2018.

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April 19, 2018 / 06:10 PM IST

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Prabhudas Lilladher' research report on HDFC Standard Life Insurance

HDFC SL showed strong performance in APE growth at 32% YoY for FY18 slightly below our expectations (Ple: 35% YoY) mainly led by ULIPs. However, margins improved significantly by 120bps at 23.2% mainly on increase in share of protection segment (25.9% share of total new business premium) as it benefits from innovation and digitisation despite price competition. We have revised the APE growth estimates slightly and increased VNB margins. We maintain our recommendation of a BUY, and revise our TP to Rs518 (from Rs500) and value it at Rs1,040 bn (from Rs996 bn) translating to 4.3x FY20E EV.

Outlook

We have revised the APE growth estimates slightly and increased VNB margins. We maintain our recommendation of a BUY, and revise our TP to Rs518 (from Rs500) and value it at Rs1,040 bn (from Rs996 bn) translating to 4.3x FY20E EV.

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