‘Stable, good quality’ Q1 results — Analysts see 19% upside on this life insurance stock

Morgan Stanley said HDFC Life reported a steady first quarter, with its value of new business (VNB) ₹809 crore being 1% above the brokerage’s estimates. It said the quality of results was good.

It has maintained the company’s 17% VNB growth forecast for FY26.
HDFC Life also reported a VNB margin of 25.1% in the June quarter compared to Morgan Stanley’s estimate of 25%. The management sees the VNB margin to be range-bound in the ongoing financial year.Morgan Stanley said the HDFC Life stock trades at 18x its FY27 estimated profit/VNB and 2.2x its profit/enterprise value.

HDFC Life Insurance reported a net profit of ₹547 crore in the June quarter, up 14.4% from the previous financial year’s ₹478 crore.

Its APE came in at ₹3,225 crore, higher than Street estimates of ₹3,186 crore. Its retail APE stood at ₹2,777 crore, also above Street estimates of ₹2,717 crore.

Its market share increased 70 basis points to 12% in the June quarter. It also gained 40 basis points in the private sector, taking its share to 17.5%.

“The first quarter began on a strong note with healthy growth across topline, VNB and steady margins. Over 70% of new customers acquired in Q1 were first-time buyers, showing our deepening presence across Tier 1, 2 and 3 cities. We outperformed the industry and private players in market share gains. Our retail protection business grew faster than the company average at 19% from the previous year,” Vibha Padalkar, MD & CEO, said.

Of the 37 analysts that have coverage on the stock, 31 have a “buy” rating, five have a “hold” rating, and one has a “sell” rating.

Shares of HDFC Life were up 0.9% at ₹764 apiece at 10.30 am on Wednesday, July 16. The stock has gained 23.8% this year, so far.

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