HDFC Life Insurance (HDFCLIFE) posted a healthy 4QFY23 performance with a strong beat in both APE and VNB. Premium growth was healthy driven by both renewal premium (+26% YoY) and new business premium (+47% YoY). APE rose 69% YoY to INR51.6b (26% beat) in 4QFY23 propelled by Non-PAR, PAR and Group businesses. Demand for ULIP was soft due to volatile capital markets while trend in protection improved QoQ. VNB too rose 69% YoY (26% beat) with margin expanding 240bp QoQ to 29.3%. Embedded Value (EV) grew 5% QoQ to INR395b during the quarter.
OutlookWe estimate HDFCLIFE to deliver ~20% VNB CAGR over FY23-25 and margin would improve to ~29% by FY25. Reiterate Neutral with a TP of INR610 (premised on 2.4x Sep’24E EV).
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