HDFC Life Results: HDFC Life Q1 Results (2021) Date, Earnings, News & More

HDFC Life Results: HDFC Life Q1 Results (2021) Date, Earnings, News & More

Last updated: 20 Jul, 2021 | 11:04 am

HDFC Life Results: HDFC Life Q1 Results (2021) Date, Earnings, News & More

Decline in Net Profits -

HDFC Life reported a 33% yearly fall in its Net Profit for April to June quarter. The net profit reported was Rs 302 crore as against Rs 451 crore reported a year ago in the same period. The fall in profit was on the back of higher claims as the company raised reserves for claims expected in the next two quarters. On a sequential basis profits fell by 15%.

Increase in total premium received -

The total premium received for Apr-Jun quarter dropped by a whopping 41% from Rs 12869.5 crores last quarter to Rs 7,656 crore .However on a yearly basis premiums increased by 31%. The new business premium also increased by 44% and renewal premium by 20% on a yearly basis and stood at Rs 3,767 crore and Rs 3889 crores respectively.

Revenue and Margins Fall - HDFC Life’s revenues fell 24% sequentially but rose 1% year-on-year to Rs 14,605.87 crore in the April-June quarter. Still, it beats the consensus estimate by 75%. Operating income fell by 12% sequentially and 39% year-on-year basis to Rs 274.15 crore in the quarter ended June. EBIDTA margin was at 1.9% against the projected 6.6%.

High claim settlement - The company reported that the claims it received were 3 to 4 times higher in the April to June quarter compared to the first wave of the pandemic. In the second wave, the number of deaths was very high and that has impacted the company also. The company paid over 70000 claims in the Apr-Jun quarter with gross and net claims amounting to Rs 1598 crore and Rs 956 crore, respectively.

Reserves - The company has set aside Rs 700 crore for potential adverse mortality. This amount is over and above the policy level liabilities calculated based on the applicable IRDAI regulations. The solvency ratio at the end of April-June quarter was about 203% much higher than the prescribed regulatory limit of 150%

Results Review :

HDFC Life Q1 results have been lacklustre for the Apr-Jun 21 period, as impact of second wave of Covid 19 weighed on the topline and bottomline. The company however has recorded a 22% growth and market share of 17.8% in private sectors in terms of individual WRP despite disruption in business on account of localized lockdowns and surge in cases during the second wave. With signs of the second wave receding over the past month, company has seen greater customer engagement and an increased interest in life insurance policies. Also the company has maintained the 13th month persistency ratio—or customer retention— to nearly 90%, while the 61st month ratio improved to 58.1% from 54.6% in the preceding three months. The value of new business amounted to Rs 408 crore, a growth of 40 per cent over last year. Most brokerages including Jefferies, Yes securities gave a positive outlook on HDFC Life with a buy rating.