HDFC Life Q1 Results Preview: Private insurer likely to report healthy numbers; profit may grow 9-11% YoY

The brokerage sees APE margin expansion of 25 basis points Quarter-on-Quarter (QoQ) based on expected business mix changes.

Shares of HDFC Life jumped marginally (0.56%) to end at Rs 542.90 apiece on NSE: PTI

Private insurer HDFC Life Insurance is likely to report healthy earnings during the first quarter of the financial year 2022-23 (Q1FY23). The company’s profit after tax as well as net premium income to show year-on-year (YoY), while its NBP and VNB may grow up to 50 per cent YoY during the quarter.

Almost in line with expectations, both Motilal Oswal and ShareKhan see the profit of HDFC Life may grow between 9-11 per cent, while the net premium income is expected to surge around 22-23 per cent YoY during the June-end quarter of FY23.

Meanwhile, the insurance company’s New Business Premium (NBP) may surge by over 41 per cent, and the Value of New Business (VNB) up by 54 per cent YoY during Q1FY23, YES Securities predicted.

YES Securities pencil in new business growth assumptions based on trends observed till May 2022, when HDFC Life had displayed NBP/APE (Annual premium equivalent) de-growth of -25/-30 per cent for 2M1QFY23 (April and May 2022) over 2M4QFY22 (January and February 2022).

The brokerage pencil in an APE margin expansion of 25 basis points Quarter-on-Quarter (QoQ) based on expected business mix changes.

Motilal Oswal in its preview expectations said, the new business premium to see a healthy growth and expects strong trends in Annuity/PAR. It also expects VNB growth to remain healthy and margin to expand YoY, but moderate QoQ.

The brokerage also estimated that expense ratio to see an uptick – in line with a pick-up in business growth and also see RoEV to stay healthy as well as improvement in persistency ratio is another monitorable.

For life insurers, premium growth is likely to remain healthy driven by strong demand for annuity, guaranteed, and credit life products, SharKhan said in preview report. It added that the protection segment may recover while ULIP is likely to see moderate growth amid market volatility.

Shares of HDFC Life jumped by marginally (0.56%) to end at Rs 542.90 apiece on NSE.

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