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HDFC Life Insurance has reported earnings: Should you buy, sell or hold stock?

Operating expenses as a percentage of total premium rose marginally to 12.3 percent in March quarter from 12 percent a year ago.

April 27, 2022 / 09:34 AM IST
HDFC Life Insurance Company

HDFC Life Insurance Company

 
 
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HDFC Life Insurance Company share price rose a percent in early trade on April 27 a day after the company came out with its quarterly earnings.

HDFC Life Insurance Company reported a net profit of Rs 357.52 crore in March quarter, up 12.4 percent from a year ago.

The net profit came on the back of 11 percent growth in net premium income, which stood at Rs 14,289.6 crore.

Expenses of management rose 15 percent even as net commissions fell by 3.88 percent to Rs 620.7 crore for the quarter.

Operating expenses as a percentage of total premium rose marginally to 12.3 percent from 12 percent a year ago.

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Here is what brokerages have to say about the stock and company after March quarter earnings:

Morgan Stanley

Research house Morgan Stanley has maintained overweight call on the stock with a target price Rs 675.

"The Value of New Business (VNB) of 12 percent was ahead of our estimate, driven by much higher VNB margin than expected. The persistency has improved, while EV was higher than our estimates," the brokerage said.

The company management guided for continued margin expansion with a possibility of 30 percent, and saw upside risks to VNB forecast, CNBC-TV18 reported.

Macquarie

The brokerage has kept an outperform rating on the stock with a target of Rs 850.

"It was a strong show in a tough year and VNB growth of 22 percent for FY22 is a good outcome. The company is targeting good double-digit growth in individual protection business," the brokerage said.

The management aims to maintain solvency margin of 180 percent, CNBC-TV18 reported.

CLSA

The research firm has maintained a buy rating on the stock but cut the target price to Rs 700.

The company posted strong VNB performance and said its VNB margin including Exide Life would maintain.

It was a tough quarter for APE growth, partly due to a high base, and expect Return on Embedded Value (ROEV) of 18-19 percent with favourable risk-reward, CNBC-TV18 reported.

Motilal Oswal

"The firm remains focused on maintaining a balanced product mix across businesses, with an emphasis on product innovation and superior customer service.

"In the near term, non-PAR/annuity is likely to witness healthy growth, while protection will witness a gradual recovery over FY23. Demand for ULIP remains healthy, but growth depends on how the capital market performs.

"Persistency trends remain steady and will continue to aid robust renewal trends. We estimate VNB margin of 29 percent, enabling 29 percent VNB compound annual rate over FY22-24. We expect operating RoEV of 20 percent in FY24.

"We maintain our neutral rating with a target price of Rs 650 per share, corresponding to 2.8x FY24 EV."

At 09:20 hrs HDFC Life Insurance Company was quoting at Rs 556.80, up Rs 7.30 or 1.33 percent on the BSE.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.



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Moneycontrol News
first published: Apr 27, 2022 09:34 am
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