Result Analysis: HDFC Life Insurance Company Ltd. (CMP- ₹590.55)
Result Update: Q3FY23
HDFC Life Insurance Company Ltd. (HDFC Life) was established in 2000, and is a leading long-term life insurance solutions provider in India, offering a range of individual and group insurance solutions that meet various customer needs such as Protection, Investment, Pension, Savings, Annuity, and Health. HDFC Life continues to benefit from its increased presence across the country having a wide reach with 372 branches and additional distribution touch-points through several new tie-ups and partnerships. The count of its partnerships is over 300, comprising traditional partners such as NBFCs, MFIs and SFBs, and including new-ecosystem partners.
|Market Cap. (Cr.)||126920|
|52 Wk. high/low||660 / 497|
|Book Value (Rs)||57.45|
- HDFC Life’s Revenue stood at Rs 19,970 crore, which shows a growth of 18.56%YoY, and of 9.62% QoQ.
- Persistency ratios for the 13th month remained unchanged at 87%, while the 61st month’s persistency ratio fell 100 basis points to 52%.
- Solvency ratio that measures the extent to which assets cover commitments for future liabilities, rose to 209% from 190% on the back of equity infusion in the second quarter.
- Value of new business (“VNB”) i.e. present value of the future profits associated with new business written during the period, grew 22% to Rs.2,163 crore.
- Value of New Business margin remained unchanged at 26.5%.
- Post-merger, the product mix consisted of 39% non-par. savings, 6% annuity, 4% protection, 29% par. products, and 21% unit-linked plans on an annualised premium equivalent basis.
- New business premium grew 9.56% to Rs 18,713 crore. Whereas Assets under management were at Rs 2.3 lakh crore, a rise of 20% post-merger.
- The Company’s profit after tax was 316 crores for Q3-FY23, which showed a growth YoY of 14.88% and a de-growth of 3.95% QoQ.
- APE was Rs.8,174 crores for 9M-FY2023, a growth of 21.84% as compared to Rs.6,709 crores for 9M-FY2022.
- Vibha Padalkar, MD & CEO said “.While globally, headwinds persist from an economic perspective, India appears to be relatively better positioned. Insurance as a sector continues to be a beneficiary of a relatively robust economy, stable savings trends and favourable regulatory regime. Against this backdrop, we continue to maintain a steady growth trajectory. Despite intense competition, we have consistently been ranked amongst the top 3 life insurers across individual and group businesses. We are happy to share that the post-merger integration and synergy realisation from the combined business is progressing as per plan. This has been demonstrated by achievement of margin neutrality during this period. The newly added distribution partners now have access to HDFC Life’s products and digital capabilities”.
|Promoters & Promoter Group||50.32%|
HDFC Life’s revenue jumps by 18.56%YoY, and by 9.62% QoQ at the same time the profits of the company grew by 14.88% YoY, but had a marginal decline of 3.95% QoQ basis. VNB grew at 22% at the same time on a YTD basis, company grew by 13% leading to a market share of 15.8% amongst private insurers. India’s insurance sector has a low penetration of about 22% which is very low as compared to the other developed nations and going forward it is expected to grow to 125% by FY-2035 which gives the company a huge headroom to grow. The company reported EPS of Rs.4.73 for 9MFY23, and we expect the company to clock in the EPS of Rs.6.31 for FY23
|Particulars (In Cr.)||Q3FY23||Q2FY23||Q3FY22||QoQ %||YoY%|
|Net Premium Earned||14,402||13,138||12,147||9.62%||18.56%|
|Other Operating Income||5,174||9,945||2,163||-47.97%||139.20%|
|Total Operating Expenditure||19,787||22,809||14,158||-13.25%||39.76%|
|Provisions & Write-Offs||-1||6||-21||-115.76%||-95.57%|
|Profit Before Tax||184||355||295||-48.17%||-37.63%|
|Profit After Tax||316||329||275||-3.95%||14.88%|
|Segment Premium Income (In Cr.)||Q3FY23||Q2FY23||Q3FY22||QoQ %||YoY%||Segment %|
|Par Individual & Group Life||3,240||3,067||2,397||5.64%||35.17%||22.50%|
|Par Individual & Group Pension||39||41||42||-4.88%||-7.14%||0.27%|
|Non-Par Individual & Group Life||5,674||5,398||4,173||5.11%||35.97%||39.40%|
|Non-Par Life Group Variable||95||70||349||35.71%||-72.78%||0.66%|
|Non-Par Individual & Group Pension||88||96||436||-8.33%||-79.82%||0.61%|
|Non-Par Individual & Group Pension Variable||105||132||459||-20.45%||-77.12%||0.73%|
|Non-Par Individual & Group Annuity||1,855||1,486||1,160||24.83%||59.91%||12.88%|
|Non-Par Individual & Group Health||8||11||7||-27.27%||14.29%||0.06%|
|Unit Linked Individual Life||2,764||2,505||2,661||10.34%||3.87%||19.19%|
|Unit Linked Individual Pension||73||81||92||-9.88%||-20.65%||0.51%|
|Unit Linked Group Life||421||206||334||104.37%||26.05%||2.92%|
|Unit Linked Group Pension||17||19||15||-10.53%||13.33%||0.12%|
|Particulars (In Cr.)||9M-FY23||9M-FY22||FY22||YoY%|
|Value of New Business (VNB)||2163||1780||2675||21.52%|
|New Business Premium (Indl. + Group)||18713||17075||24155||9.59%|
|Renewal Premium (Indl. + Group)||19194||14467||21808||32.67%|
|Profit After Tax||1001||850||1208||17.76%|
|New Business Margins||26.50%||26.50%||27.40%||0bps|
|13M / 61M Persistency||87%/52%||87%/53%||87%/54%||0bps/100bps|
*- Annualized Premium Equivalent
Source: Company website, EWL Research
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