HDFC Life Q4: Net Profit jumps 12% to Rs 358 crore, Dividend declared

HDFC Life Q4

Profits increase, meets estimates: HDFC Life reported a 12.44% YoY increase in its Net Profit for Jan to March quarter. The net profit reported was Rs 357.52 crore, in-line with street estimates. Sequentially, the net profit zoomed 30%. In Q3FY22, it reported a profit of Rs 273.7crore. Analysts' have earlier estimated a net profit of Rs 360 crore.

Increase in total premium received YoY: The total premium received for the Jan-Mar quarter increased by 11.1% YoY to Rs 14,289 crore. Sequentially, premiums increased by 5.9%, it was Rs 12,124 crore in the last quarter.  

New and Renewal Business: New business margin (NBM) expanded to 27.4% in FY22 from 26.4% in the year-ago quarter. The company reported the value of new business (VNB) for FY22 of Rs 2,675 crore, 22% higher than FY21. The VNB has grown at a 24% CAGR over the past 5 years and has almost tripled in the last 5 years.

Annualized Premium Equivalent (APE): Annualized Premium Equivalent (APE) is the sum of annualized first-year regular premiums and 10% weighted single premiums and single premium top-ups. Total APE grew 17% YoY to Rs 9,758 crore, while individual APE rose 15% YoY to Rs 8,168 crore in FY22. Overall protection grew by 24% in terms of APE.

Growth of various channels: Proprietary distribution, which includes agency, direct and online channels, grew by 18% in FY22 and 11% based on a 2-year CAGR, based on individual APE. The agency channel grew by 26%. The channel added more than 40,000 agents in FY22. It is the second-highest amongst private players.

AUM & Income from the investment: Asset Under Management (AUM) for the March quarter stood at Rs 2.04 lakh crore, an increase of 17% from the corresponding quarter last year. Income from investments net of amortization slumped 77.8% on-year to Rs 1,397.2 crore in Q4FY22.

Solvency Ratio: It measures the extent to which assets cover commitments for future liabilities. It stood at 176% in Q4FY22 against 201% in Q4FY21 and 190% in Q3FY22.

Coverage and claim settlement: The company covered 54 million lives in FY22, registering an increase of 36% over FY21. It settled close to 3.9 lakh claims during FY22. Gross and net claims were at Rs 5,804 crore and Rs 4,328 crore, respectively for FY22. As of 31st March 2022, it has reserves of Rs 55 crore into FY23 as a prudent measure towards Covid.

Business update on Exide Life: Exide Life recorded a healthy growth of 22% based on individual WRP in FY22, well above the overall industry growth of 16%. Its Embedded value as of March 31, 2022, was Rs 2,910 crore. The merger process has been initiated with NCLT and is expected to be completed in the second half of this financial year.

Dividend: The company's board has recommended a final dividend of Rs 1.70 for fiscal 2022.

Management commentary:  Ms. Vibha Padalkar, MD & CEO said, “We clocked a growth of 16% in individual WRP in FY22 with a market share of 14.8% and 9.3% in the private and overall sector, respectively. We continue to deliver consistent all-round performance and be ranked amongst the top three life insurers in the industry. Despite very trying times during the 2-year pandemic, our 2-year CAGR of 17% was almost 2 times industry growth of 9%."

HDFC Life Q4 Results Review:

The company has reported net profit and APE in-line with analysts' expectations. It saw a healthy growth in Value of New Business and VNB margins. Also there was a healthy growth in overall and new premium received on yearly as well as sequential basis. On the retirement side, the company's annuity business recorded a 24% growth compared to industry growth of 3%.

Shares of HDFC Life Insurance ended at Rs 549.50, up 1.71% on the BSE on Tuesday.