Motilal Oswal has given Neutral recommendation for HDFC Life Insurance with a target price of Rs. 600 in its research report issued on Oct 22, 2022

Motilal Oswal’s research report on HDFC Life Insurance

HDFC Life Insurance (HDFCLIFE) reported 6% YoY growth in total premium in 2QFY23, led by 23% YoY growth in renewal premium while new business premium saw a contraction of 7% YoY. VNB rose 10% YoY (in line) with 170bp YoY expansion in VNB margin to 28.3% on a pre-merger basis. Consolidated VNB margin was 26.2% in 1HFY23. APE grew 4% YoY to INR26.5b (5% miss) in 2QFY23, driven by annuity, nonlinked savings and credit life. Demand for ULIP was soft due to volatile capital markets while retail protection trend has improved sequentially with a growth of 26% QoQ. In 2QFY23, HDFCLIFE reported financial performance post-merger with Exide Life for the first time. As we incorporate this and adjust for the quarterly performance, we expect HDFCLIFE to deliver ~26% VNB CAGR over FY22-24 and estimate margin to remain ~29% by FY24.


We maintain our Neutral rating with a TP of INR600 (premised on 2.8x FY24E EV).

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