Last updated: 24 Oct, 2021 | 01:34 pm
Profits marginally up, miss estimates - HDFC Life quarterly results reported a 2% increase sequentially in its Net Profit for July to September quarter. The net profit reported was Rs 275.9 crore. It reported Rs 328 crore profit a year ago in the same period. The fall in profit was on the back of higher than expected Covid-19 claims.
Increase in total premium received YoY - The total premium received for the July-Sep quarter increased by 52% to Rs 11,445.5 crore. On a yearly basis, premiums increased by 10%, it was Rs 10,056.71 crore in the year-ago period.
New and Renewal Business - New business margin (NBM) expanded by 130 bps to 26.4% for the first half of the current fiscal, higher than 25.1% a year ago. The company saw growth in the new business premium because of a healthy uptick in an annuity or participating insurance policies. Renewal premium contributed around 44%.
Revenue and Margins Rise - HDFC Life’s revenues rose 52% sequentially to Rs 20,478.5 crore in Q2FY22. Analysts had earlier estimated revenue of Rs 10,585.5 crore. Operating income rose 1% sequentially but was 20% lower than analyst estimates. Ebitda margin was at 1.4% against 1.9% in the previous quarter. Analysts earlier estimated an EBITDA margin of 3.2%.
Solvency Ratio - It measures the extent to which assets cover commitments for future liabilities. It stood at 190% in Q2FY22 against 203% in Q1FY22.
Covid Claims - HDFC Life incurred net Covid claims worth Rs 2,466 in the H1FY22 against the anticipated Rs 1,690 crore. The excess amount of Rs 776 crore was paid out of reserves which at the end of the September quarter stood at 204 crore. In the second quarter of FY22, the company incurred Rs 1,510 crore on net claims against Rs 956 crore claims in the first quarter. The company believes the reserves should be sufficient to meet any future claims barring the impact of the third wave.
HDFC Life Q2 results review:
HDFC Life has reported a mixed set of numbers for the quarter ended September. While the topline growth was strong the bottomline failed to meet street estimates. The fall in profit was on the back of higher than expected Covid-19 claims. The business performance remains strong with 22% growth and private market share of 16.2% in terms of individual WRP in the first half of FY22. Shares of HDFC Life were trading at Rs 684.80 apiece on BSE, down 1.45% from the previous close.