HDFC Life Gets 'Buy' From Centrum Broking After Q3 Results; Sees 31% Upside — Here's Why

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Centrum Broking Report

HDFC Life Insurance Company Ltd.’s annual premium equivalent grew 20% YoY to Rs 103 billion in 9MFY25, led by Non-par (+55%) and ULIP (+38%) while there was a decline in the Par business (-20%).

Value of new business grew 14% YoY to Rs 26 billion but VNB margin declined 140 bps YoY to 25.1%. We maintain our VNB margin forecasts of 25.7%/25.8% for FY26/FY27. The revised surrender norms had a negative impact of Rs 0.1 billion on VNB and 0.1% on VNB margin during 9MFY25.

The company continues to be #2 insurance player with an individual APE market share of 13.9% at end-Q3 FY25. We continue to value the company at an unchanged 2.2 times FY27E P/EV (40% discount to mean) for a target price of Rs 780, reflecting a 31% upside. Maintain Buy.

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