HDFC Life slips nearly 2% despite Q1 beat; brokerages remain cautious

HDFC Life Insurance shares fell despite reporting a strong June quarter, with net profit rising 12 per cent year-on-year and premium income growing 14 per cent.

HDFC Life Insurance Company Ltd.'s share price came under pressure on Thursday, a day after the company reported its June quarter (Q1FY27) results after market hours on Wednesday. HDFC Life shares fell 1.8 per cent intraday to ₹588.

 

The counter came under pressure after brokerage firms, including Motilal Oswal Financial Services and JM Financial, remained mixed on the insurer post its quarterly results.

 

HDFC Life Insurance Company Q1FY27 Result Highlights

 

• HDFC Life Insurance Company reported standalone net profit of ₹611.19 crore in Q1 FY27, up 11.89 per cent as against ₹546.46 crore in Q1 FY26.
• Net premium income rose 14.39 per cent year-on-year to ₹16,547.97 crore in Q1 FY27 over Q1 FY26.
• Net income from investments jumped 14.1 per cent to ₹16,653.06 crore in Q1 FY27 as compared to ₹14,594.99 crore posted in the same quarter last year.
• Profit before tax (PBT) stood at ₹626.72 crore in Q1 FY27, registering a growth of 11.78 per cent on a YoY basis.
• Total APE rose 9 per cent to Rs 3,515 crore, while individual APE increased 7% to ₹2,969 crore. New business premium grew 12 per cent to Rs 8,143 crore, while renewal premium increased 19 per cent to ₹9,023 crore, driving a 15 per cent rise in total premium collections to ₹17,166 crore.

 

Brokerge view on HDFC Life

 

MOFSL revised the target price on the counter to ₹690 but maintained a 'Buy' call on the expectation of growth trajectory remaining stable at 15 per cent for FY28, along with a stable VNB margin, driven by a diversified product mix. However, the brokerage increased its VNB margin estimates for FY27 by 50bp, reflecting 1QFY27 performance.

 

 

JM Financial noted that the insurer's margin expansion is well explained by strong growth in retail protection, annuity and non-par; however, management was circumspect on margins as they are focusing on APE growth; "we too shall monitor APE closely hereon. All in all, we are not materially changing our headline estimates and continue to expect a 14–15 per cent APE CAGR over FY27–29E along with a gradual uptick in margin."

 

The brokerage maintain 'Add' rating on the stock with an unchanged target price of ₹640, valuing the insurer at an unchanged 1.6 times June 28E EVPS of ₹405. 

 

HDFC Life share price 

 

HDFC Life Insurance's stock has delivered mixed performance across shorter timeframes. The stock has gained 1.75 per cent over the past one week, outperforming the Nifty 50, which rose 0.64 per cent during the same period. However, it has declined 2.25 per cent over the past one month, compared with a 0.53 per cent gain in the benchmark index.

 

The stock has remained under pressure over longer periods, falling 25.14 per cent on a year-to-date basis and 25.72 per cent over the past one year, against declines of 7.76 per cent and 4.34 per cent, respectively, in the Nifty 50. HDFC Life has also underperformed the benchmark over the longer term, declining 16.20 per cent over the past three years and 19.56 per cent over five years, while the Nifty 50 has gained 23.27 per cent and 51.46 per cent, respectively.

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