Shares of HDFC Life Insurance Co. will be in focus on Thursday after brokerages gave mixed reviews on the insurer’s FY27 first-quarter earnings. Citi raised its target price and retained its buy rating, while Morgan Stanley lowered its target despite maintaining an overweight call. Bernstein also retained its outperform rating, saying a recovery in the HDFC Bank distribution channel could improve growth.
Brokerages largely pointed to slower growth through the HDFC Bank distribution channel as the key factor weighing on annual premium equivalent (APE) growth during the quarter. However, they also noted signs of improvement in non-parent channels and said a recovery in sales at HDFC Bank could support growth over the coming quarters.
HDFC Life Insurance (Q1 FY27, Consolidated YoY)
- New business premium up 12% to Rs 8,143 crore versus Rs 7,272 crore.
- Annual premium equivalent up 9% to Rs 3,515 crore versus Rs 3,225 crore.
- VNB up 8.7% to Rs 879 crore versus Rs 809 crore.
- VNB margin down 10 bps at 25% versus 25.1%.
- 13-month persistency at 84% versus 86%.
- 61-month persistency at 65% versus 64%.
- Net premium income up 15.1% to Rs 16,728 crore.
- Net profit up 11.5% to Rs 611 crore versus Rs 548 crore.
ALSO READ: HDFC Life Q1 Results: Profit Exceeds Rs 600 Crore As Net Premium Income Grows 15%
Here’s what analysts said after HDFC Life announced Q1 results:
Morgan Stanley
- Maintain Overweight; cut target price to Rs 730 from Rs 745
- Q1: VNB beat; all eyes on HDFC Bank channel
- Weak growth in the HDFC Bank channel has continued to weigh on overall APE growth and the outlook
- Management cited some pickup in Q1; sustenance remains monitorable
- Remain Overweight on attractive valuation
Bernstein
- Maintain Outperform with target price of Rs 810
- Another tough quarter, commentary provides context for a better outlook
- Banca sales remained weak, but the company said they have recovered counter share
- Recovery in sales at the parent bank should help with a better counter-share
- Company said they will prioritize growth over margins, and guided towards stable margins
Citi
- Maintain Buy; hike target price to Rs 990 from Rs 950
- Parent drags even as product mix change
- Flat business volumes at HDFC Bank is concerning
- Traction in non-parent channels is encouraging
- In a sweet spot to revive VNB growth to mid-to-high teens over medium-term
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