Shares of HDFC Life Insurance Co Ltd. are in focus after it closed FY26 on a subdued note, with brokerages flagging a weak Q4 marked by a miss on value of new business (VNB) and regulatory disruptions. However, the Street remains constructive, maintaining positive ratings with target prices ranging between Rs 745 and Rs 950, signalling confidence in a medium-term recovery.
The company reported a 4.7% rise in its consolidated net profit for the fourth quarter for FY26, as per an exchange filing on Thursday. The company has declared a final dividend of Rs 2.10 per share. The company's net profit stood at Rs 497 crore on year-on-year (YoY) basis, compared to last fiscal's Rs 475 crore.
ALSO READ: HDFC Life Insurance Q4 Results: Profit Rises Nearly 5%; Dividend Declared
Morgan Stanley maintained an Overweight rating with a target price of Rs 745, highlighting an 8% year-on-year decline in Q4 VNB. The brokerage termed the quarter “soft,” noting that weak growth momentum has led to a sharp de-rating in valuations. It expects a gradual recovery from FY27, backed by the company's strong execution track record and improving growth visibility. Despite near-term pressures, Morgan Stanley continues to see the stock as an attractive play within the insurance space.
Citi remains the most bullish, maintaining a Buy rating with a target price of Rs 950. Citi believes that margin expansion is likely to drive the next leg of growth. It expects recovery to be led by protection and annuity segments, alongside better operating efficiency. The brokerage added that HDFC Life is in a “sweet spot” to regain market share, contingent on business momentum improving.
Macquarie Group maintained an Outperform rating with a target price of Rs 900, calling FY26 both a “tough quarter and a tough year.” It attributed the weakness to regulatory impacts, including surrender charges and GST changes, as well as slower banca channel growth. That said, Macquarie expects VNB growth to rebound at around 15% CAGR over the next three years, aided by easing regulatory pressures. It also highlighted planned capital raising, which could improve solvency margins by nearly 900 basis points, strengthening the balance sheet.
Following the recent correction, valuations have turned more compelling. Consensus data suggests a broader bullish stance on the stock, with most analysts maintaining buy-equivalent ratings and an average target implying upto 50% upside from current levels.
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