HDFC Life Q1 net profit jumps 21% on-year to Rs 365 crore, misses estimates
HDFC Life has reported a lacklustre set of numbers in Apr-Jun 22 period, missing analysts’ expectations. The company has also seen a loss of market share in the quarter. Here are the major highlights from the Q1 earnings report.
HDFC Life results: Highlights
HDFC Life Q1 profit increases, misses estimates: HDFC Life reported a 21% increase in its Net Profit for April to June quarter as compared to the same period previous year. The net profit reported was Rs 365 crore, lower than Street estimates. As compared to the Jan-Mar 22 period, the net profit increased marginally by 2%. In Apr-Jun 21 period, it reported a profit of Rs 357 crore. Analysts' have earlier estimated a net profit of Rs 390 crore.
HDFC Life Q1 earnings: Increase in total premium received YoY- The total premium received for the Apr-Jun quarter increased by 23% on-year to Rs 9,396 crore. In the year-ago period, the total premium was Rs 7,656 crore.
HDFC Life Q1FY23 results: New and Renewal Business- New business margin (NBM) expanded to 26.8% in Apr-Jun 22 from 26.1% in the year-ago quarter. The company reported a 25% growth in the value of new business (VNB). There has been consistent growth in VNB on the back of top line growth and an increase in margins The VNB has grown at a 24% CAGR over the past 5 years and has almost tripled in the last 5 years.
HDFC Life Q1 results: 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 22% on-year to Rs 1,904 crore in Q1FY23, while individual APE rose 18% on-year to Rs 1,306 crore in Q1FY23. Overall protection grew by 31% in terms of APE.
HDFC Life Q1 results update: Product portfolio- Continue to maintain a balanced product mix with a share of participating savings, non-participating savings, ULIPs, protection, and annuity accounting for 30%, 35%, 25%, 5%, and 6% of individual APE, respectively.
HDFC Life AUM & Networth in Q1: Asset Under Management (AUM) for the June quarter stood at Rs 2.00 lakh crore, an increase of 10% from the corresponding quarter last year. It has a Debt: Equity mix of 65:35 and around 99% of debt investments in G-Secs and AAA bonds. The Networth increased 76% year on year to Rs 15,427 crore.
HDFC Life Q1 results: Overall market share - Amongst the top 2 in terms of Overall new business and individual new business segment in the private sector with market share at 19.0% and 14.6%, respectively. HDFC Life was Ranked #1 within the group - a new business segment in the private sector with a market share of 22.2%.
HDFC Life Solvency Ratio in Q1: It measures the extent to which assets cover commitments for future liabilities. It stood at 178% in Q1FY23 against 203% in Q1FY22 and 176% in Q4FY22.
HDFC Life Q1FY23 earnings: Claim settlement- The claim settlement ratio for Q1FY23 stood at 99.6% and 98.7% overall and Individual, respectively.
HDFC Life Q1 business update on Exide Life: Exide Life witnessed strong growth of 34% based on Individual WRP and continues to enjoy a healthy product mix and growth across channels. The integration of Exide Life is on track. The company has received the initial NCLT approval for triggering the merger process, including intimations to various regulatory authorities and related NOCs. The company expects to receive the final nod from IRDAI and be able to merge the subsidiary in the
second half of FY23.
HDFC Life Q1 results: Management Commentary- "We continue to maintain a consistent growth trajectory, growing by 22% in terms of APE (annual premium equivalent) in Q1FY23, this has enabled us to maintain market leadership as a ‘Top 3 life insurer’ across individual & group business,” Vibha Padalkar, MD & CEO, HDFC Life.
How is the HDFC Life Q1FY23 result?
The company has reported a net profit of Rs 365 crore for Q1FY23, a 21% growth YoY. The company's new business margins increased to 26.8%.
What is the shareholding pattern of HDFC Life?
HDFC Life has good promoter holding (over 50%), DII holds over 7%, and also FII has around 26% stake in the company which is a good sign for investors. Fundamentally, the company is strong.
What is HDFC Life's target price?
Sharekhan has published a report on HDFC Life and recommends buying for an estimated target price of Rs 740 per share.