Sharekhan's research report on HDFC Life Insurance
HDFC Life reported a robust 69% y-o-y growth in VNB. VNB margin remained stable at 29.3% in Q4FY2023 (versus 29.4% y-o-y). APE grew by 69% y-o-y. VNB margins for FY23 were flat at 27.5% versus standalone in FY22 in line with guidance. Strong growth was led by higher business volumes from sale of higher ticket value non-linked products in the last two months of the quarter, ahead of the change in the Union Budgetary provision. APE growth was 23%, excluding the one-off and adjusting for the merger. Non-PAR business growth was at 188% y-o-y in 4QFY23 and 90% in FY23, adjusting for the one-off higher ticket size policies, growth was 72% y-o-y in 4QFY23 and 53% in FY23. Retail protection grew by 62% y-o-y in Q4FY23 and was flat in FY23.
Outlook
The company is investing to grow lower-ticket policies to offset a slowdown in higher ticket non par business. Stock currently trades at 2.4x/ 2.1x its FY2024E/ FY2025E EVPS. We maintain a Buy on the stock with an unchanged PT of Rs. 720.
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