HDFC Life Insurance Co.'s results for the first quarter of fiscal 2025 showed a good performance on the growth front, with a few mixed outcomes otherwise.
HDFC Life Q1 FY25 Earnings Highlights (Consolidated, YoY)
Net profit rises 15% to Rs 479 crore versus Rs 417 crore.
Total income rises 15% to Rs 26,750 crore versus Rs 23,243 crore.
Annualised Premium Equivalent And Individual APE Growth
APE witnessed growth of 23% year-on-year, reaching Rs 2,866 crore, slightly exceeding expectations of Rs 2,800 crore. The performance was driven by a surge in individual APE, which grew by 31% YoY to Rs 2,467 crore.
Value Of New Business And VNB Margin
The VNB grew by 18% YoY, coming in-line with expectations at Rs 718 crore. However, given the stronger-than-expected APE growth, VNB margin contracted more than expected.
VNB margin came in at 25% as compared to 26.2% YoY, and below the expected 25.4%. The dip largely seems to reflect that ULIPs aided the growth in APE. Unit-linked insurance plans are typically a lower margin product and seem to have impacted margin.
Profit After Tax And Embedded Value
PAT for the company rose by 15% YoY to Rs 478 crore. Additionally, the EV grew by 19% YoY, reaching Rs 49,611 crore. The current market capitalisation stands at Rs 1.38 lakh crore.
Persistency Ratio
Persistency ratios show improvement, with the 13-month persistency ratio increasing from 87% to 88% YoY, and the 61-month persistency ratio improving from 53% to 56% YoY. These enhancements reflect the company’s effective customer retention strategies.
Overall, it was a mixed quarter for HDFC Life with better than expected growth on the APE numbers front, while the VNB margin came in lower than expected.
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